“A STUDY ON RATIO ANALYSIS IN HCL

TECHNOLOGIES LIMITED”
By

SHRINI.S

Roll No: 3511310157

A PROJECT REPORT

In partial fulfillment for the award of the degree

of
MASTER OF BUSINESS ADMINISTRATION

SRM University,

School of Management

KATTANKULATHUR-603203, TAMILNADU

MAY, 2015
 CERTIFICATE OF THE GUIDE

This is to certify that the project work

titled is a

bonafide work of Mr. /Ms…………………………..Enrolment No:

carried out in partial fulfillment for the award of the degree of Master of Business

Administration of SRM University under my guidance. This project work is original and not

submitted earlier for the award of any degree / diploma or Associateship of any other

University / Institution.

Signature of the Industry Expert

Place: Kattankulathur

Date: /05/2015
 CERTIFICATE

This is to certify that the projec work

t

titled

is a bonafide work of

Mr. /Ms….......................................Enrolment No: carried out in partial

fulfilment for the award of the degree of Master of Business Administration of SRM

University under my guidance. This project work is original and not submitted earlier for the

award of any degree / diploma or Associateship of any other University / Institution.

Signature of the Student

DEAN

SRM University Internal guide

Date : /05/15 Industry expert

 DECLARATION

I here declare that the project report titled “A STUDY ON RATIO

ANALYSIS IN HCL TECHNOLOGIES LIMITED” is the product of my
sincere efforts. This project report is being submitted by me to the Faculty of
Management, SRM University, for the partial fulfilment of the course MBA, is
a record of original work undergone by me during the period 16.03.2015 to
30.04.2015 and the course has not been submitted to any other educational
Institutions for any other purpose.

Place : Kattankulathur Signature of the student

Date : /05/15
 ACKNOWLEDGEMENT

We wish to express my deep sense of gratitude and indebtedness to Director and

Associate Dean and HOD of SRM UNIVERSITY for giving this environment and

encouragement for my studies and welfare.

We would like to extend my special thanks to Industry expert Mr. Sriram and

Assistant professor our Internal guide [Link], for guiding us, inspired for

doing project and presence for any situations with us.

We take this opportunity to express our thanks HCL TECHNOLOGIES gave us a

chance to do project over there. We are also thankful to Mrs. SREELEKHA, MANAGER for

granting us permission to do project.

Our sincere thanks to Mr. VASUDHAVEN, ACCOUNTS OFFICER, FINANCIAL

DEPARTMENT, who was our project guide in the organization. We thank him for allowing

us to take up this project and helping us throughout the project for his support and guidance.

We express our love and thanks to our parents and friends remembered with

gratitude for their co-operation and extended their help to us all through the study and

successful completion of this project work.

 ABSTRACT

The Report mainly focuses ratio analysis position of the HCL Technologies Limited.

The short term financial commitments called as current liabilities should be

effectively met with adequate current assets, working capital should be optimized in such a
way that the current liabilities are effectively handled and on the other hand the money flow
or resource should not be under used.

The aim of the study is to analyze the short term solvency and profitability position of
the company. The inflow and outflow of cash investment towards to maintain the short term
solvency position. The objectives of the study is, to analyses the profitability position of the
company, to analyze the overall financial performance having compared with the previous
years, to evaluate the financial performance.

The nature of the study was exploratory study and it analyses the financial records
with reference to funds usage pertaining to short term. The extracts from annual financial
statements were analyzed to isolate were critical factors that have an effect of financial
management in the short term. The study used standard financial analyses tools like Ratio
analysis to meet out of the objectives of the study. The scope of the study was to put into
practical the theoretical aspects of the study into real life work experience. The limitations of
the study were analysis and fact findings have been reported by using only secondary data.
Tables were framed based on relevant data from annual report and interpretations were made.
Findings of the study were extracted from interpretations. Suggestions of the study were
made based on the betterment of the company and projections of logic from conclusion by
experts. Conclusion of the study was derived from finding of the study and it has been
generalized conclusion.
 TABLE OF CONTENT

[Link] CONTENTS PAGE

NO.
List of Table I
List of Figure II
I CHAPTER I 1-36

1 INDRODUCTION 1
1.1 Industry Profile 6
1.2 Economic Growth during Liberalization Measures 16
1.3 Growth of Industry during recent decade 19
1.4 Organizational Profile 23
1.5 Need for Study 32
1.6 Literature Review 33
1.7 Objectives of the Study 36
1.8 Limitations of Study 36

II CHAPTER II 37-44

2.1 Methodology 37
2.2 Instrument Design 42
2.3 Tools of Analysis 43
2.4 Scope & Significance of Study 44

III CHAPTER III 45-70

3.1 Analysis of Data

IV CHAPTER IV 71-73
4.1 Findings 71
4.2 Suggestions 72
4.3 Conclusion 73

V CHAPTER V 74

5.1 Summary

BIBLIOGRAPHY 75
APPENDICIES 76
Appendix : Details of Secondary Data
 LIST OF TABLES

Page
S. No TITLE
No

1. Gross profit ratio (GP ratio) 46

2. Net profit ratio (NP ratio) 47

3. Operating profit ratio 49

4. Return on capital Employed (ROCE) 50

5. Return on Assets (ROA) 52

6. Return on Equity (ROE) 53

7. Price Earnings ratio (P/E ratio) 55

8. Fixed Asset turnover ratio 56

9. Average collection period 58

10. Working capital turnover ratio 59

11. Stock turnover ratio 61

12. Debtors turnover ratio 62

13. Current ratio 64

14. Quick ratio 66

 LIST OF FIGURES

Page
S. No TITLE
No

1. Gross profit ratio (GP ratio) 47

2. Net profit ratio (NP ratio) 48

3. Operating profit ratio 50

4. Return on capital Employed (ROCE) 51

5. Return on Assets (ROA) 53

6. Return on Equity (ROE) 54

7. Price Earnings ratio (P/E ratio) 56

8. Fixed Asset turnover ratio 57

9. Average collection period 59

10. Working capital turnover ratio 60

11. Stock turnover ratio 62

12. Debtors turnover ratio 63

13. Current ratio 65

14. Quick ratio 67

CHAPTER - I
1. INTRODUCTION

Ratio analysis is a useful technique to measure, compare, and evaluate the financial condition and
performance of a customer. Ratio analysis enables a credit manager to spot trends in a customer's
financial Financial performance, and to compare its performance and financial condition with the
average performance of similar businesses in the same industry. Balance sheet ratios measure
liquidity and solvency (a business's ability to pay its bills as they come due) and leverage (the
extent to which the business is dependent.

Financial ratio analysis is a useful tool for determining a customer's overall financial condition.
Industry-wide financial ratios are published by a variety of sources, including Dun & Bradstreet.
Financial ratios are useful for making quick comparisons. Banks and trade creditors use financial
ratio analysis to help them decide whether a business is a good credit risk or not.

Ratio analysis is a tool to help evaluate the overall financial condition of a customer's business.
Ratios are useful for making comparisons between a customer and other businesses in an industry.
A financial ratio is a simple mathematical comparison of two or more entries from a company's
financial statements. Creditors use ratios to Figure a company's progress, uncover trends and point
to potential problem areas.

Liquidity Ratios

These ratios indicate the ease of turning assets into cash. Liquidity refers a company's ability to
meet current obligations with cash or other assets that can be quickly converted to cash. Liquidity
Ratios give an indication of a company's short term financial or solvency. They include the Current
Ratio, Quick Ratio, and Working Capital.

 The Current Ratio formula is: Current assets divided by current liabilities. The current ratio
is one of the best-known measures of financial liquidity. The current ratio is the standard
measure of any business' financial health. It will tell you whether a customer is able to
meet its current obligations by measuring if it has enough assets to cover its liabilities.

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  The Quick Ratio formula is: (Current assets less inventories) divided by current liabilities.
The quick ratio (also sometimes called the acid test ratio) measures a customer's liquidity.
The term liquidity is used in various ways, all relating to availability of, access to, or
convertibility into cash. An institution is said to have liquidity if it can easily meet its
needs for cash either because it has cash on hand or can otherwise raise or borrow cash. A
market is said to be liquid if the instruments it trades can easily be bought or sold in
quantity with little impact on market.

LEVERAGE RATIO

Leverage ratios measure the relative contribution of stockholders and creditors. Leverage ratio
indicates the extent to which the business is reliant on debt financing (creditor money versus
owner's equity). Leverage Ratios which show the extent that debt is used in a company's capital
structure

 The Debt to Equity ratio formula is: Total liabilities divided by total equity. This ratio
indicates how much the company is leveraged (in debt) by comparing what is owed to
what is owned. A high debt to equity ratio could indicate that the debtor company may be
over-leveraged [too reliant on debt as a source of funding] and should look for ways to
reduce its debt.

 The Interest Coverage Ratio formula is: Earnings before Interest, Taxes, Depreciation and
Amortization divided by Interest Expense. This ratio indicates what portion of debt
interest is covered by a company's cash flow situation.

Profitability Ratios

Profitability refers to a company's ability to generate revenues in excess of the costs incurred
in producing those revenues.

 The Gross Profit Margin formula is: Gross Profit divided by Total Sales. The gross profit
margin ratio indicates how efficiently a business is using its materials and labor in the
production process.

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  The Return on Sales formula is: Net profit divided by sales. This ratio compares after tax
profit to sales. It can help you determine if you are making an adequate return on sales.

 The Return on Assets formula is: Net Income divided by Average Total Assets. The higher
the percentage rate that a company has the better.

It is a class of financial metrics that are used to assess a business's ability to generate earnings as
compared to its expenses and other relevant costs incurred during a specific period of time. For most
of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous
period is indicative that the company is doing well. There are some benefits are useful for every kind
of organization allocate costs quickly and easily and speed up budgeting and reporting. These term
also known as working capital policies.

Efficiency Ratios

 The Inventory Turnover Ratio formula is: Cost of goods sold divided by average inventory.
In general, the higher the turnover ratio the better the company is performing and the less
likely it is that your customer has a lot of obsolete and slow moving inventory that sooner
or later will need to be disposed of at a loss.

 The Asset Turnover formula is: Net sales divided by average total assets. Asset turnover is
an indicator of how efficiently a firm utilizes its assets to generate sales and profits. If the
ratio is high, it implies that the firm is using its assets efficiently.

Working capital

Working capital management is a very important component of corporate finance

because it directly affects the liquidity and profitability of the company. It deals with current
assets and current liabilities. Working capital is that part of company’s capital which is used
for purchasing raw material and involve in sundry debtors. The goal of working capital
management is to ensure that the firm is able to continue its operations and that it has
sufficient cash flow to satisfy both maturing short-term debt and upcoming operational
expenses. Working capital management is concerned with the problems that arise in
attempting to manage the current assets, the current liabilities and the inter-relationships that
exist between them.

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 The term current assets refers to those assets which in the ordinary course of business
can be or will be turned into cash within one year without undergoing a domination in value
and without disrupting the operations of the firm. The major current assets are cash,
marketable securities, accounts receivable and inventory. Current liabilities are those
liabilities, which are intended at their inception to be paid in the ordinary course of business
within a year, out of the current assets or earnings of the concern. The basic currents
liabilities are account payable, bills payable, bank overdraft and outstanding expenses.

The goal of working capital management is to manage the firm’s current assets and
current liabilities in such a way that a satisfactory level if the working capital is maintained.
This is so because if the firm cannot maintain satisfactory level of working capital it is likely
to become insolvent and may even be forced into bankruptcy. The current assets should be
large to cover its current liabilities in order to ensure a reasonable margin of safety. The
interaction between current assets and current liabilities is, therefore the main theme of the
theory of working capital management. The basic ingredients of the theory of working
capital management may be said to include its definition, need optimum level of current
assets, the trade-off between profitability and risk associated with a firm’s level of current
assets and liabilities, financing-mix strategies and so on. It largely deals with the management
and control of current assets and current liabilities. Implementing an effective working capital
management system is an excellent way for many companies to improve their earnings. The
two main aspects of working capital management are ratio analysis and management of
individual components of working capital.

The advantages of maintaining adequate amount of working capital are as follows.

1. Continuous production - Adequate working capital ensures regular supply of raw

materials and continuous production.

2. Solvency and Good will - Adequate working capital enables prompt payment to creditors.
This helps in creating and maintaining goodwill.

3. Easy Loans - A concern having sufficient working capital enjoys high liquidity and good
credit standing. Hence it can secure loans from banks and others on easy and favourable
terms.

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4. Cash discounts - Adequate Working Capital enables a concern to avail cash discounts on
the purchases, leading to a reduction in costs.

5. Regular payment of expenses - A company which has ample working capital can make
regular payment of salaries, wages and other day–to-day commitments. Such prompt
payment raises the morale of employees and increases their efficiency. As a result costs are
minimized and profit increases.

6. Exploitation of market conditions - A concern with adequate working capital can exploit
favourable market conditions. It can buy its requirements of raw materials in bulk when the
market price is lower. Similarly, it can hold stock of finished goods to realize better prices.

7. Ability to face crisis - Adequate working capital enables a concern to face business crisis
such as depression because during such periods there is much pressure on working capital.

8. High return on Investments - Adequacy of working capital facilitates continuous

production and effective utilization fixed assets. Because of this, the concern is able to
general more profits and ensures higher return to its owner.

5
1.1 INDUSTRY PROFILR-HCL TECHNOLOGIES LIMITED

INDUSTRY PROFILE
CURRENT STATE OF THE INDIAN IT INDUSTRY

Poised to become a US$ 225 billion industry by 2020, the Indian information
technology (IT) industry has played a key role in putting India on the global map. The IT-
BPO sector has become one of the most significant growth catalysts for the Indian economy.
In addition to fuelling India’s economy, this industry is also positively influencing the lives
of its people through an active direct and indirect contribution to various socio-economic
parameters such as employment, standard of living and diversity. The industry has played a
significant role in transforming India’s image from a slow moving bureaucratic economy to a
land of innovative entrepreneurs and a global player in providing world class technology
solutions and business services, according to National Association of Software and Service
Companies (NASSCOM). The year 2014 has proven to be a much better year for the Indian IT
Industry as compared to the previous year. As per NASSCOM, Indian IT exports grew 19% YOY
during FY 2014. Last year, Indian IT exports registered a YOY growth of mere 5.5%. When we
analyze the performance of the Indian IT industry from three different perspectives, i.e. verticals,
service lines and geographies, some interesting facts come to light.

• Amongst the verticals, BFSI, Hi-tech/ Telecom and Manufacturing seem to be the dominant
ones contributing nearly 3/4th of the exports over the past several years. However, emerging
verticals like Media & Entertainment, Retail, Healthcare, Construction & Utilities, and
Airlines & Transportation are looking up, contributing to nearly 1/4th of the exports and are
growing faster than the mature verticals.
• Within IT Services, it appears that all service lines contributed almost equally to the overall
growth
• Amongst geographies, USA continues to be the dominant region [receiving over 60% of
Indian IT exports over the past several years]. However, Asia Pacific [APAC] and Rest of the
World [ROW] revenues are growing twice as fast as Europe revenues. Yet, through it all, the
good news is that HCLT continues to outperform the Indian IT Industry. As depicted in the
graph below, during FY 14, our revenues grew by 31% YOY to reach $3.5 bn.

6
Over the last three years, our revenues grew by 24% on a three-year CAGR whereas Indian
IT grew by 13%. Over the last five years, our revenues grew by 29% on a five-year CAGR
whereas Indian IT grew by 20%, proof that HCLT is indeed setting the pace within the
industry.

KEY HIGHLIGHTS
• Milestone year for Indian IT-BPO industry-aggregate revenues cross the USD 100
billion mark, exports at USD 69 billion
• Within the global sourcing industry, India was able to increase its market share from
51 per cent in 2012, to 58 per cent in 2014, highlighting India’s continued
competitiveness and the effectiveness of India-based providers delivering
transformational benefits
• Export revenues (including Hardware) estimated to reach USD 69.1 billion in
FY2015 growing by over 16 per cent; Domestic revenues (including Hardware) at
about USD 31.7 billion, growing by over 9 per cent
• Software and services revenues (excluding Hardware), comprising nearly 87 per cent
of the total industry revenues, expected to post USD 87.6 billion in FY2015;
estimated growth of about 14.9 per cent over FY2014. Within Software and services
exports, IT services accounts for 58 per cent, BPO is nearly 23 per cent and ER&D
and Software Products account for 19 per cent. The industry continues to be a net
employment generator - expected to add 250,000 jobs in FY2015, thus providing
direct employment to about 2.8 million, and indirectly employing 8.9 million people.
• As a proportion of national GDP, the sector revenues have grown from 1.2 per cent in
FY1998 to an estimated 7.5 per cent in FY2015.
• The industry’s share of total Indian exports (merchandise plus services) increased
from less than 4 per cent in FY1998 to about 25 per cent in FY2015
• While the global macroeconomic scenario remained uncertain, the industry exhibited
resilience and adaptability in continually reinventing itself to retain its appeal to
clients.

7
‘’ORDER TO CASH’’

"Order to cash" (O2C or OTC) normally refers to the business process for receiving and
processing customer sales. It follows "Opportunity to Order" and covers business-to-business
(B2B) and business-to-consumer (B2C) sales. O2C is the lifeblood of any commercial
organisation. But the performance of an important component-“receivables management”
continues to be an area of concern. Organizations have to work harder to collect cash on a
timely basis. It is important therefore that those responsible for Receivables management take
a comprehensive approach to driving continuous improvement within the O2C process.
In many business models a contractual relationship is established first via a Contract or
Subscription. Orders are then received via different sales channels, such as phone, fax, email,
internet or sales person. The contractual relationship is confirmed and the Orders are fulfilled
through shipping and logistics. On completion of key events an invoice is generated and
booked as Sales (subject to "Revenue Recognition" requirements). If payment has not already
been received, the debt is recorded and pursued through dunning cycles until the funds are
received. Order to Cash is completed by the Customer Care process (enquiries, requests and
complaints). When it comes to the company HCL Technologies ltd BPO services, Chennai,
the O2C process is responsible for effective management of their receivables account. The
company has implemented an ERP system which manipulates processes and manages
different client accounts, various transactions, service offerings, contract management etc. If
we consider the system flow, the O2C process of HCL technologies ltd is typically
categorized into the following eight sub-processes:
• Customer Presence
• Credit Check
• Contract Administration
• Order Management
• Billing/invoicing
• Collections
• Cash Applications
• Deduction/Exceptions Management.
8
 Receivables Cash

Invoicing Order
Received

Revenue Service
provided

FIGURE OF O2C PROCESS

1. CUSTOMER PRESENCE

The order to cash process, referred also as O2R (order to receivables), begins with the
establishment of customer presence. Customers must be identified and contacted to create an
agreement by which a sales contract can be established. This can be a one-time sales service
or a contractual agreement that results in ongoing sales over an extended period of time.
Orders must then be received from the customer, allowing the business to recognize customer
need and begin fulfilling the order.

2. CREDIT CHECK

An action taken by the host company to determine if a person is creditworthy is called a

credit check. A credit check entails seeking a detailed analysis from a credit reporting bureau
in the company. The report usually contains things like details of the client, client history,
current status and income, and payment history for loans and other debts. When a credit
check is conducted, payment history is documented through items reported by creditors to
9
credit bureaus, such as timely payments - or lack thereof. If a credit check shows the client to
be a poor risk for repaying debt, the company will act accordingly. If credit is approved
despite a less than glowing credit check, the company can make ensure that it’s a risk-free
client and offers extra credits for such clients.

3. CREDIT MANAGEMENT
The company should manage its credit in an effective manner keeping in views of various
objectives. The basic goal of credit management is to maximize the value of the firm by
achieving a trade off between risk and return. Credit management is a term used to identify
accounting functions usually conducted under the umbrella of Accounts Receivables.
Essentially, this collection of processes involves qualifying the extension of credit to a
customer, monitors the reception and logging of payments on outstanding invoices, the
initiation of collection procedures, and the resolution of disputes or queries regarding charges
on a customer invoices. When functioning efficiently, credit management serves as an
excellent way for the business to remain financially stable. The process of credit management
begins with accurately assessing the credit-worthiness of the customer base. This is
particularly important if the company chooses to extend some type of credit line or revolving
credit to certain customers. Proper credit management calls for setting specific criteria that a
customer must meet before receiving this type of credit arrangement. As part of the
evaluation process, credit management also calls for determining the total credit line that will
be extended to a given customer. Several factors are used as part of the credit management
process to evaluate and qualify a customer for the receipt of some form of commercial credit.
This includes gathering data on the potential customer’s current financial condition, including
the current credit score. Competent credit management seeks to not only protect the vendor
from possible losses, but also protect the customer from creating more debt obligations that
cannot be settled in a timely manner. After establishing the credit limit for a customer, credit
management focuses on providing the client with accurate and timely statements or invoices.
The invoices must be delivered to the customer in a reasonable amount of time before the due
date, thus providing the customer with a reasonable period to comply with the purchase
terms. The period between the delivery of invoice and the due date should also allow enough
time for the customer to review the invoice and contact the vendor if there are any questions
or concerns about a line item on the invoice.
10
This allows all parties concerned time to review the questions and come to some type of
resolution. When the process of credit management functions effectively, the people involved
benefits from the effort. Customers have an opportunity to build a strong rapport with the
vendor and thus create a solid credit reference.

4. Lenient Credit Policy

It is that policy where the seller sells goods on very liberal credit terms and standards. In
other words, goods are sold to the customers whose creditworthiness is not up to the
standards or whose financial position is doubtful.
Advantages:
• Increase in sales: It expands sales because of the liberal credit terms and favourable
incentives granted to customers.
• Higher Profits: Increase in sales leads to increase in profits, because higher level of
production and sales reduces permit cost.
Disadvantage:
•Bad debt loss: A firm that follows lenient credit policy may suffer from bad debt losses that
arise due to the non-payment credit sales.
•Liquidity Problem: Lenient credit policy not only increase bad debt losses but also creates
liquidity problem, because when the firm is not able to receive the payment at a due date, it
may became difficult to pay currently maturing obligation.

4.1. Stringent Credit Policy

Stringent Credit policy seller sells goods on credit on a highly selective basis only i.e., the
customers who have proven creditworthiness and financially sound.
Advantage:
•Less Bad Losses: A firm that adopts stringent credit policy will have minimum bad debt
losses, because it had granted credit only the customers who are creditworthy.
•Sound Liquidity Position: The firm that follows stringent credit policy will have sound
liquidation position, due to the receipt of all payments from customers on due date, the firm
can easily pay the currently maturing obligations.
Disadvantage: •Less Sales losses: Stringent credit policy restricts sales, because it is not
extending credit to average credit worthiness customers.
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•Less Profits: Less sales automatically reduces profits, because firm may not be able to
produce goods economically, and it may not be able to use resources efficiently that leads
increase in production cost per unit.

4.2. Optimum credit policy - It is the credit policy at which the firm maximises its value.
The value of the firm is maximised when the incremental or marginal rate of return of an
investment is equal to the incremental or marginal cost of funds used to finance the
investment. The incremental rate of return can be calculated as incremental operating profit
divided by the incremental investment in receivables. The incremental cost of fund is the rate
of return required by the suppliers of funds, given the risk of investment in accounts
receivable. The required rate of return is not equal to the borrowing rate. Higher the risk of
investment, higher the required rate of return. As firm loosens its credit policy, its investment
in accounts receivables becomes more risky because of increase in slow-paying and
defaulting accounts.

5. CONTRACT MANAGEMENT
Contract management or contract administration is the management of contracts made
with customers, vendors, partners, or employees. Contract management includes negotiating
the terms and conditions in contracts and ensuring compliance with the terms and conditions,
as well as documenting and agreeing on any changes or amendments that may arise during its
implementation or execution. It can be summarized as the process of systematically and
efficiently managing contract creation, execution, and analysis for the purpose of maximizing
financial and operational performance and minimizing risk.
Common commercial contracts include employment letters, sales invoices, purchase orders,
and utility contracts. HCL technologies ltd places sales invoices to customers for the services
they are offering.
The contract management process includes:
Managing Service Delivery To ensure that the services are delivered as and when they are
ordered.
Managing the Relationship This is the communications between the vendor and the
purchaser.
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Managing the Contract This is the ongoing contract administration to ensure that the day-
to-day procurement activities follow the spirit and sections of the contract.
Seeking Improvements Improvement within a procurement environment mean greater
efficiencies and an increase in profits.
Ongoing Assessment The entire procurement activities are assessed on a continual basis to
ensure that the contracts are adhered to and the purchasing processes followed.
Managing Change In a long term procurement relationship, there are sometimes changes in
activities, requirements or products available. All of these changes need to be noted and
handled effectively.

6. ORDER MANAGEMENT
It includes Order entry (creation of order / booking of order) It’s the process of entering order
information into the system. After the customers are created the company will offer various
services needed for the clients. The clients sometimes will be in need of customized services.
The O2C process maintains a separate account for each client. The most important objectives
of order entry are speed and accuracy so that customers can receive what they have ordered
as quickly as possible and the company can determine which promotions are working best. In
addition to service/product and customer information, order entry must also capture a key
code and payment type (cash, credit, credit card). The order entry process may also include
entry of demographic information. If the order is taken over the telephone, the order entry
executive of the company can act as a salesperson by trying to increase the size of the order.
Order fulfilment (physical & digital fulfilment) To continue the order to cash process, the
order placed by a customer must then be fulfilled on the part of the business. This means that
products/services must be prepared for transmission to the customer. Once the order is ready,
then it can be distributed to the customer, either physically or digitally.

7. INVOICING
An invoice or bill is a commercial document issued by a seller to the buyer, indicating the
products, quantities, and agreed prices for products or services the seller has provided the
buyer. An invoice indicates the buyer must pay the seller, according to the payment terms.
The buyer has a maximum amount of days to pay for these services and is sometimes offered
13
a discount if paid before the due date. An invoice is a legal document which can be used as
evidence of an incurred debt. The recipient of the goods or services can challenge the
legitimacy of individual charges, but the invoice itself is considered a bona fide debt.

A typical invoice contains

 The word invoice (or Tax Invoice if in Australia and amounts include GST).

 A unique reference number (in case of correspondence about the invoice)

 Date of the invoice.

 Tax payments if relevant (e.g. GST or VAT)

 Name and contact details of the seller
 Tax or company registration details of seller (if relevant)

 Name and contact details of the buyer

 Date that the product was sent or delivered

 Purchase order number (or similar tracking numbers requested by the buyer to be
mentioned on the invoice)

 Description of the product(s)/services(s)

 Unit price(s) of the product(s)/service(s) (if relevant)

 Total amount charged (optionally with breakdown of taxes, if relevant)

 Payment terms (including method of payment, date of payment, and details about
charges for late payment)

8. COLLECTIONS -Cash collection is a function of Accounts receivable. It is the recovery

of cash from a business or individual with which you have issued an Invoice. Unpaid invoices
are considered outstanding.
Invoices are always issued with terms of payment. These terms vary widely from 'Cash
terms', meaning that the invoice is due immediately, to many forms of 'Credit terms'.
14
(For example 30 days from date of invoice). Invoices which remain unpaid for periods longer
than their 'terms' indicate are considered overdue. It is the aim of the Cash collection
function of a business to collect cash for all outstanding invoices before they become
overdue and to mediate payment arrangements to ensure that invoiced debts do not become
doubtful or bad. Turnover time for collection of cash will reduce the dependency on external
borrowings for the need of more Working Capital.

9. CASH APPLICATION – Cash application involves managing customer payment

exceptions. It is instrumental to the success of any organization, as effective Cash
Application in turn facilitates elevated recovery rates and decline in time taken to resolve
exceptions. Cash application helps in early recognition of exceptions, exact identification of
them, efficient coding and active diffusion thereupon. It directly influences the customer
satisfaction levels, as its accuracy and turnaround time determines quality of results
In Day Sales Outstanding, Collector productivity and financial reporting integrity.
The better the Cash Application Management, the better are the results in terms of expedited
conclusion of exceptions and higher rate of conversion of invalid customers into cash. HCL
technologies ltd has an effective cash application process aiming at reducing their collection
period and increasing the profitability.

10. EXCEPTIONS/DEDUCTIONS MANAGEMENT - No matter how automated the

order-to-cash process becomes; there will always be exceptions and problems that require
human intervention. These irregular or exception transactions include disputes, claims,
special arrangements, credits and many others. Such exceptions are estimated to represent 15
percent to 20 percent of all business-to-business transactions. Until now, disputes about
invoices have been labour-intensive, time consuming, potentially damaging to customer
relationships and, ultimately, bad for business. With so many variables and so little control,
the problems seemed intractable. Deductions Management enables organisations to
streamline their deductions management process by proactively identifying, assigning,
tracking and root cause analysis of disputes and deductions. Deduction related transactions
arise for many reasons such as pricing discrepancies, returned product and freight issues. The
inclusion of these transactions in AR cash flow Cash Forecasting adversely affects the true
cash collectable position.
15
 1.2 ECONOMIC GROWTH DURING LIBERALIZATION MEASURES

INDUSTRY

The Indian IT services industry is expected to reach $100 billion in revenues this year, with
exports contributing to about $69 billion. The industry impacts India's GDP by around 7.5%
and employs close to 2.8 million employees, with an additional 2,50,000 employees expected
to be added in fiscal 2015. The IT Industry is at an inflection point. There are three major
disruptive forces that are likely to change how IT will be procured and consumed and how
business will engage with stakeholders in the future. These are:

Digital experience with mobile devices

• Cloud computing
• Social media

These trends will have important implications for the CIO's office and drive a rebalance
within the RTB/ CTB (Run-The-Business/Change-The-Business) spends. CTB spend will get
more share of the CIO's IT budget. The main reasons being:

• The traditional PC replacement cycle is undergoing a change

• Virtualization is making underlying hardware (and its ownership) non-strategic
• Cloud-enabled services are becoming increasingly viable.

The attractions are scalability; pay-as you-go, freedom from infrastructure build-out and less
cape sensitivity.
• Application development will focus more on Mobile/ Tablets than Desktops/
Notebooks
• Companies will spend money to create total product experience for consumers on
multiple devices and operating systems.

16
INDIAN IT-BPO INDUSTRY
FY 2015 is a landmark year – while the Indian IT-BPO industry weathered uncertainties in
the global business environment, this is also the year when the industry is set to reach a
significant milestone – aggregate revenue for FY2015 is expected to cross USD 100 billion.
Aggregate IT software and services revenue (excluding hardware) is estimated at USD 88
billion.

FY 2013
Exports ‐ 59
Domestic ‐ 29
FY 2012 FY 2014
% of GDP is 7.1%
Exports ‐ 50 Exports ‐ 69
Domestic ‐ 24 Domestic ‐ 32
% of GDP is 6.5% % of GDP is 7.5%
FY 2011
Exports ‐ 47
Domestic ‐ 22
% of GDP is 6.7%
FY2010
Exports‐ 41
Domestic‐ 22
% of GDP is 6.4%

Figure of Indian IT-BPO Revenues

DOMESTIC IT-BPO
Domestic IT-BPO revenue (excluding hardware) is expected to grow at almost 17 per cent to
reach Rs 918 billion in FY2015. Strong economic growth, rapid advancement in technology
infrastructure, increasingly competitive Indian organisations, enhanced focus by the
17
government and emergence of business models that help provide IT to new customer
segments are key drivers for increased technology adoption in India.

Hardware
FY 2014 ‐ 534
FY 2015 ‐ 615
15.2%

BPO Total Domestic IT Services

FY 2014 ‐ 127 market FY 2014 ‐ 500
FY 2015 ‐ 148 FY 2015 ‐ 589
16.9% Rs.1633 Billion 17.8%
FY 2015

Software
products
FY 2014 ‐ 159
FY 2015 ‐ 180
13.3%

Figure of Domestic IT-BPO Revenue

INDIA IT SERVICES Over the years, Indian IT service offerings have evolved from
application development and maintenance, to emerge as full service players providing testing
services, infrastructure services, consulting and system integration. The coming of a new
decade heralds a strategic shift for IT services organisations, from a one factory, one
customer model to a one factory, all customers model. Central to this strategy is the growing
customer acceptance of Cloud-based solutions which offer best in class services at reduced
capital expenditure levels.

18
1.3 GROWTH OF HCL TECHNOLOGIES DURING RECENT DECADE

The growth of the Indian IT industry reads more like a story about 'market-share gains' or
'replacement revenue'. In the year 2000, market share of the Indian Top 5 IT players in global
IT services spending was just around 0.1%. By the end of the decade, the market share
increased to around 3.1%. There is still big headroom for growth for the Indian IT industry.
For HCLT, growth opportunities could come from existing as well as new customers.

• From existing customers: Opportunities reside in cross-sell, up-sell and new propositions
such as business-aligned IT, cloud computing, platform-based BPO, and Green IT.

• From new customers: Growth opportunities can come from vendor consolidation, new
verticals, new geographies, and new propositions. The trend of vendor consolidation will
contribute significantly to greater offshore content in global IT services. Our ability to grow
customer relationships - particularly into large accounts - will be critical for our growth in the
coming years.
Some of the major reasons for the significant growth of the IT industry of India are -
 Abundant availability of skilled manpower.
 Reduced telecommunication and internet costs.
 Reduced import duties on software and hardware products.
 Cost advantages.
 Encouraging government policies.
MAJOR PLAYERS
 Tata Consultancy Services (TCS)
 Infosys
 Wipro
 IBM
 HP
 HCL
 Cognizant Technology Solutions (CTS)
 NIIT
19
India's IT industry caters to both domestic and export markets. Exports contribute around
75% of the total revenue of the IT industry in India. The IT industry can be broadly divided
into four segments
• IT services
• Software (includes both engineering and Research and Development)
• ITES-BPO
• Hardware

1. Sources of Working Capital - Banks are the main sources of funds. HCL technologies ltd
is the parent company for HCL Technologies ltd BSERV which has got huge cash balances
and maintains a zero-interest payout model. For HCL-Bserv, the subsidiary of HCL Tech,
banks are the main sources of working capital .
But the requirement for working capital depends upon different entities of the company.
Some entities may require working capital, some may not. For a fresh business start-up, we
need more working capital. For an existing company, if it needs to expand, it requires more
working capital.

2. Finance and Accounting department - The company HCL technologies ltd BPO services
follow a fixed structure for its finance department. The process of receivables management
starts from the MIS team
 MIS team gets the data (client account information, details about the service rendered,
date of order placement, credit terms and policies etc), processes the data and
forwards it to the process manager.
 Process manager reviews it and forwards it to the accounts manager.
 Accounts manager is responsible for maintaining direct relationship with the clients.
Third party agents have any role in this.
 Client approves the information and reverts this information back to the O2C process
of the company.
 The O2C process reviews the approval from the client.
 The O2C process raises the invoice request to the client and proceeds further with
other formalities.
20
3. Assessing credit risk - The company looks into the following two aspects to assess the
credit risk associated with the customer.
 Trend analysis.
 Client relationship.
The payment trend of a customer is closely observed and we can classify the customers
accordingly. A customer health check-up is done. But trend analysis has got certain
exceptions. Some customers would pay back before the due date or credit period. If a
customer who was maintaining such a relationship with the company by paying the dues on
time( within the credit period) and if suddenly the client delays the payment of one of the
services provided by the company, the company cannot categorize him as a risky customer.
The company’s main objective is to build maximum no .of clients and to maintain a healthy
relationship with them. Clients can be classified as direct or indirect. For indirect customers,
the central revenue team (CRT) at HCL Technologies ltd at Noida is responsible for raising
the invoice. These clients may be from across the globe.
4. Cash discounts on early payment - The company offers about 2.5-7.5% discount for
customers making early payments. This depends upon the margin of service level that the
company can forgo. This will reduce the working capital requirement and also the interest
payment associated with it. But the company must be careful enough in granting discounts
because it is considered as a cost in P&L account.

5. Collection agent - The company HCL technologies ltd has no collection agents. The
accounts manager of the finance department itself acts as the collection agent who manages
the receivables collection process as well as answers the queries of both the clients and
company.

6. Collection process - It depends on the client relationship with the company. Some clients
pay the company before the due date. If the clients that are delaying their payment, the
company takes effective measures to collect their receivables on time, if not the company has
to make more working capital requirement. This is because once a credit sale is done, the
company considers that the revenue from it is recognized (based on accrual concept) and the
receivables are treated as current assets. Whatever is documented in the contract between the
21
clients, the company can orally pressurize the client to get the payment done. It considers
legal action as the last resort because the company doesn’t want to lose any of its customers.
If it’s been 270 days after the due date and the customer has not cleared his accounts yet, the
company will automatically allocate provision for bad debts. But it will hit the profitability of
the company since it reduces receivables. Once un-accrued revenue is considered as bad debt,
it doesn’t mean that it is written off. The company will take enough measures to retrieve that
particular amount. The bad debts are written off if and only if the company is sure that it
cannot be accrued anymore.

SWOT OF HCL TECHNOLOGIES

STRENGTHS : WEAKNESSES :
• Diversified portfolio of services • Lower margins as compared to
• Strategic alliances and peers
partnerships
• Diversified end markets and
geographic reach
OPPURTUNITIES : THREATS :
• Increasing adaption of cloud • Intense competition may
computing services pressurize margins and shrink
• Positive outlook for enterprise market share
mobility solutions • Increasing visa rejections could
impact margins
• Exchange rate fluctuations

22
1.4 ORGANIZATIONAL PROFILE

HCL Enterprise is a 36-year-old leading Global Technology and IT enterprise, with

USD 6 billion revenue, 88000 professionals and operations spanning 31 countries. The 3-
decade-old enterprise, founded in 1976, is one of India's original IT garage start-ups. Its range
of offerings spans Product Engineering, Custom & Package Applications, Business Process
Outsourcing, IT Infrastructure Services, IT Hardware, Systems Integration, and distribution
of ICT products.
Since its inception, HCL Enterprise has grown to become what it is today under the strong
leadership and guidance of Shiv Nadar (Founder, Chairman and Chief Strategy Officer). HCL
Enterprise comprises two companies listed in India, namely HCL Info systems
([Link]) and HCL Technologies ([Link]).
Industry: IT and ITES, Founded: 12th Nov 1991, Founder: Shiv Nadar, CEO: Vineet Nayar
Head Quarter: Noida, Uttra Pradesh ,Area Served: World wide,Revenue: US $ 6.7 billion,
Employees: 100000 & URL: [Link],[Link],[Link].
HCL Info systems deal with hardware, system integration, and network and ICT distribution,
solely for the Indian market. HCL Technologies on the other hand, focuses on
Transformational Outsourcing, working with clients in areas that impact and re-define the
core of their business. The company leverages an extensive global offshore infrastructure and
its global network of offices in 29 countries to deliver solutions across select verticals
including Financial Services, Retail & Consumer, Life Sciences & Healthcare, Hi-Tech &
Manufacturing, Telecom and Media & Entertainment (M&E). HCL Technologies caters to
the global market in areas like product engineering, research & development, enterprise &
custom applications, infrastructure management, and Business Services.

VISION STATEMENT

"To be the technology partner of choice for forward looking customers by collaboratively
transforming technology into business advantage."

23
MISSION STATEMENT

"We will be the employer of choice and the partner of choice by focusing on our stated
values of Employee First, Trust, Transparency, Flexibility and Value Centricity."

ABOUT HCL TECHNOLOGIES LTD

HCL is a global technology enterprise and a name to reckon with, in the industry. The
passion of its founder and the entrepreneurial zeal of its employees, have made its
Information Technology and Services arm, HCL Technologies, a leading provider of business
transformation, enterprise & custom applications, infrastructure management, business
process outsourcing, and engineering services. HCLT delivers solutions across a wide range
of verticals such as financial services, manufacturing, consumer services, public services and
healthcare. Its delivery model is spread across 31 countries around the globe, and its
empowered 'transformers' are busy working with over 500 forward looking customers,
seeking to shift paradigms and transform the way business is being done. When HCLT
commenced its transformation journey based on the foundation of 'Employees First' in 2005,
disruptive technologies and new business models were beginning to impact the industry.
HCLT had already anticipated the shift from employer driven to employee driven” market
conditions. Today, the impact of this unique management philosophy is being recognized and
praised worldwide for empowering employees to become the drivers of growth. HCL has also
become one of the fastest-growing IT services company in the world. “Employees First,
Customers Second - Turning Conventional Management Upside Down” - a business book
authored by the CEO Vineet Nayar encapsulating HCLT’s transformation journey from 2005,
was launched in June 2010. Already a massive bestseller in key markets, the book has won
accolades from leading management thinkers and CEOs such as Tom Peters, Gary Hamel,
Tony Hsieh, Judy McGrath, and Victor Fung. Covered by leading media groups around the
world, the book has already been translated into five languages - French, Spanish,
Portuguese, Korean, and Chinese, and over 50 Employees First, Customers Second [EFCS]
workshops for clients and partner organizations have been conducted in the USA, UK and
APAC.

24
1. THE PHENOMENTAL PERFORMANCE CONTINUES

HCLT has been recognized as a leader in Applications Outsourcing by key analyst firms and
became the only Indian headquartered company to be recognized as a leader in SAP services.
HCLT's dominance and leadership in Remote Infrastructure Management and in Engineering
and R&D Services continues. In a recent report published in February 2011, Frost & Sullivan
mentioned that HCLT is a perfect example of a company serving in long-term innovation and
"solutions engineering", and that its Engineering Out-of-the-Box [EOOTB] approach is novel
because it allows HCLT to proactively address the clients' business needs. HCLT has also
successfully positioned itself as the CIO's best friend. Back in 2005, CIOs were looking for
an alternative to the Big-4 due to dissatisfaction with large deals, a desire to optimize and
reduce cost, pay for performance, and for transformational gains.
HCLT responded by providing a trusted culture with transparency and flexibility, integrated
service offerings, output/ outcome-based pricing, and a value-centric proactive approach
rather than a reactive approach. As business and technology becomes equally important over.
The next decade, CIOs will take centre stage in business and HCLT is already focused on the
"reincarnated CIO", slowly and surely becoming the CIO's most trusted partner. So while
most Indian providers are trying to emphasize their business focus, HCLT continues its
strong commitment to technology expertise as an enabler of business change and is becoming
the technology partner to the CIO's office.

2. INCREASING CUSTOMER IMPACT

HCLT is a leader in client reference scores. In an independent survey by Forrester for the
North American Application wave, HCLT scored the highest across 10 parameters in client
reference and was positioned above its larger peers. The number of $10mn+, $20mn+ and
$5mn+ clients has more than doubled over the past three years. HCLT has also created
Customer Advisory Councils (CAC) to build stronger relationships with customers by
providing them with key strategic insights and information [70 CIOs/ CTOs form the HCLT
CAC]. During a brand workshop conducted with HCLT CAC in November 2010, customers
recognized that HCLT's key strengths lie in its entrepreneurial culture, broad-based services,
highly engaged people and customer alignment, and agreed that “it’s good to do business
25
with HCLT”. HCLT is aspiring to move from “good to do business with” to “great to do
business with” by 2015. Indeed, HCLT is more c mfortable in forging its own trail rather
than following the expected - thereby bringing about unexpected and path breaking results
year-on-year.

3. SERVICE OFFERINGS

HCLT believes in the good practice of regularly restructuring and re-energizing its
diversified portfolio of service offerings. By re-evaluating and realigning this portfolio from
time to
time, HCLT is able to develop a robust and resilient business model. No single
service line contributes more than 32% to the total revenue even while maintaining a leading
edge in key verticals where HCLT chooses to focus.

Financial service
26.5%

Energy &
utilities,Public sector Manufacturing
11.1% 27.8%

Healthcare Telecom
8.8% 10.3%

Media Publishing
Entertainment (MPE)
Retail & CPG
6.9%
8.6 %

26
FIGURE OF HCLT SERVICE OFFERINGS

27
 Enterprise
application services
BPO services 21.3%
5.5%

Infrastructure Engineering
services R&D services
23.3% 18.1%

Custom
applications
31.7%

FIGURE OF SERVICE MIX

USA
55.8%

ASIA EUROPE
17.3% 26.9%

FIGURE OF GEO MIX

28
4. CUSTOM APPLICATION SERVICES

The Custom Application Services group leverages HCLT developed IPs, tools, frameworks
and industry best practices to provide 'change-the-business', 'run the- business', and 'cross
functional IT' services. The focus is upon improving quality through metrics on applications
developed and managed with standards, to ensure that they are scalable, reliable, robust,
secure and maintainable, so that customers can ensure a predictable performance from their
IT applications. The service offerings include application development, management,
support, re-engineering, modernization, migration, and independent verification and
validation. This group employing domain and technology experts and supporting many
clients across geographies constitute 31.7% of HCLT's revenues and services various
industries like retail, banking, insurance, capital markets, media & publishing, manufacturing,
and public and healthcare services with a sharp domain focus, from 31 global delivery
locations.

5. ENGINEERING AND R&D SERVICES (ERS)

This division constitutes 18.1% of the company's overall revenues and is one of the largest
independent Engineering and R&D services organizations in the world. It offers end-to-end
engineering services and solutions in hardware, embedded, mechanical and software product
engineering to industry leaders across nine verticals - Aerospace & Defence, Automotive,
Consumer Electronics, Industrial Manufacturing, Medical Devices, Networking & Telecom,
Office Automation, Semiconductor, Servers & Storage, and Software Products. This group
helps its customers reduce time to market by leveraging the Global R&D network. It also
offers output based business models that are aligned to the R&D goals of the customer. ERS
today leverages engineering talent and development capabilities across Australia, China,
India, Israel, Poland, and the USA, to deliver complex engineering solutions. With over a
decade of experience operating in complex multi-vendor environments and customer value
chains, ERS has been able to seamlessly integrate into a customer's existing R&D ecosystem.
The group has also successfully collaborated with other innovation partners, captive centres,
universities, industry bodies, and manufacturing partners.

28
6. ENTERPRISE APPLICATION SERVICES (EAS)

HCLT's EAS group is a global pioneer in leveraging leading technologies to drive value
realization. Strategic partnerships with SAP, Oracle and Microsoft, allow EAS to provide the
complete range of consulting, hosting and BPO services that is necessary to define, realize
and sustain real business change. The EAS division accounts for over 21.3% of HCLT's
revenue and continues to be a key area of growth.

7. ENTERPRISE TRANSFORMATION SERVICES (ETS)

HCLT's ETS group offers an integrated "Advise to Execute" approach to its customers for
developing a transformation roadmap and execution plan. This group has grown rapidly
through a cross-industry focus on execution excellence in Middleware & SOA Services,
Analytics & Business Intelligence Services, Enterprise Content Management & Portals
Services, Independent Verification & Validation Services, and Business and Technology
Consulting. With experience in well-defined service lines, our principals drive business case
creation and formulate execution plans to support overall benefits realization. Strong
capabilities across established and disruptive application technologies combined with the
right IPs and frameworks, help reduce cost, time and risk while executing transformation
plans.

8. INFRASTUCTURE SERVICES DIVISION (ISD)

HCLT's Infrastructure Services Division is the fastest growing business line and contributes
to over 23.3% of HCL Technologies' total revenues. Also known as HCL ISD, the division
manages mission-critical environments for over 20% of Fortune 100 organizations. The
company's fast growth has prompted several bestselling authors to include the HCL ISD case
study in their books. ISD's key service offerings include End User Computing, Data Centre &
Mainframe Services, Integrated Operations Management, Cross Functional Services, Security
& Network and Cloud Computing Services. HCL ISD's vertical reach spans major
industries including Automotive, Energy (Oil & Gas) and Utilities, Financial Services, Hi-
Tech, Insurance, Manufacturing, Retail, Travel, Tourism & Logistics, Banking, Life
Sciences, Healthcare & Pharmaceuticals, Telecom & Media, and Publishing &
Entertainment.

29
Over 15,000 employees provide infrastructure management services to customers through a
robust delivery network of 20 service centres across the globe. Its scale of infrastructure
operations involves the centralized management of globally distributed assets of over 3
million devices; resolving over 10 million helpdesk calls while supporting over 1 million
business users' needs.

[Link] PROCESS OUTSOURCING (BPO)

HCL Technologies established its BPO Division in 2001. In doing so, HCLT pioneered third
party BPO operations in India, in addition to the Integrated Global Delivery Model and the
Platform Business Model. With 10,500 employees across 25 global, integrated delivery
centres, this division provides over 200 domain specific and quality driven processes to
several Fortune 500/Fortune Global 500 customers. HCLT offers 24x7 multi-channel, multi-
lingual support in 8 European languages and delivers the entire gamut of business services
with deep industry, micro-industry and process knowledge. Industry specific solutions
include Banking & Financial Services, Insurance, Healthcare, Media, Publishing &
Entertainment, Telecom, Retail, Utilities & Public Services, and Hi-Tech & Manufacturing.
HCLT's cross industry horizontal solutions include Finance & Accounting, Human Resource,
Customer Relationship Management, Knowledge Process, Technical Support Services and
Supply Chain Management. This group pursues a new and revolutionary form of BPO called
„Transformational BPO , which constitutes Full Process and Multiple Process outsourcing.
HCLT is considered the next generation BPO as it constantly invests in best-in-class enablers
across delivery, innovation and governance. These enablers include:

• Transformation through innovation and improvement-led solutions

• Vertically aligned strategy with horizontal centres of excellence
• End-to-end service offerings bringing technology, people and processes together
• Flexible business models and value based pricing
• A collaborative, business partnership approach
• Delivery through Integrated Global Delivery Centres
• Delivery through the “Employees First Customers Second” (EFCS) platform
The group follows industry best practices and metrics-based quality norms for all its
processes.
30
This is supported by robust technology infrastructure, skilled human resources, customized
training programs and transition frameworks. HCL Business Services is the first BPO
Company in the world to be appraised at Maturity Level 5 of People CMM. With stringent
internal metrics and audit systems, its quality certifications include CCA Global Standard,
COPC 2000 (CSP Release 4.1), ISO 9001:2000, OHSAS 18001:2007 and ISO 14001:2004;
Security Systems certification - ISO 27001:2005, ISO 20000:2005 and audit certification in
SAS 70 Type II. HCL Business Services is the first Indian and the third company in the world
to be Customer Operations Performance Centre Inc (COPC) certified in the specialized area
of collections. With a decade of industry experience, this division is the winner of several
industry awards and recognitions. HCLT ranks among the Top 10 ITeS-BPO companies in
India (NASSCOM & Gartner), and is the largest BPO service provider in Northern Ireland.
UK Trade and Investment (UKTI) published an exclusive case study on HCL Business
Services' engagements in the UK, showcasing the company as an ideal investment of choice.
HCLT was ranked second by Purdue Benchmark in the Global Peer Group of BPO Service
Providers.

31
1.5 NEED FOR STUDY

• Accounting ratios are very useful in assessing the financial position and profitability
of a business enterprise. This can be achieved through comparison by ratios in the
following ways:
• For same enterprise over a no. of years (horizontal analysis)
• For one enterprise against another in the same industry(third-dimension analysis)
• For one enterprise against the industry as a whole
• For one enterprise against the pre determined standards
• For inter departmental comparisons within an organization

• The empirical analysis on the financial position of the company is essential. Study
on the short & long term financial performance is analyzed by using various
techniques.

• The study was undertaken for knowing the solvency position of the company years
data of the company were considered for the study starting from 2009-10 to 2014.

32
1.6 LITERATURE REVIEW

The traditionally stated major purpose of using financial data in the ratio form is making the
results comparable across firms and over time by controlling for size. This basic assertion
gives rise to one of the fundamental trends in financial ratio analysis (or FRA for short, in this
paper). The usually stated requirement in controlling for size is that the numerator and the
denominator of a financial ratio are proportional.

The seminal paper is this field is Lev and Sunder (1979). They point out, using theoretical
deduction, that in order to control for the size effect, the financial ratios must fulfill very
restrictive proportionality assumptions (about the error term, existence of the intercept,
linearity, and dependence on other variables in the basic financial variables relationship
models Y = bX + e and its ratio format Y/X = b + e/X). It is shown that the choice of the size
deflator (the ratio denominator) is a critical issue. Furthermore, Lev and Sunder bring up the
problems caused in multiple regression models where the explaining variables are ratios with
the same denominator. This is a fact that has been discussed earlier in statistics oriented
literature like in Kuh and Meyer (1955).

Two interrelated trends are evident. Theoretical discussions about the ratio format in FRA
and empirical testing of the ratio model. While mostly tackling the former Whittington (1980)
independently presents illustrative results finding the ratio specification inappropriate in a
sample of U.K. firms. Whittington also discusses the usage of a quadratic form in FRA.
Significant instability in the results was reported.

The proportionality considerations have implications on various facets of FRA. Barnes

(1982) shows how the non-normality of financial ratios can result from the underlying
relationships of the constituents of the financial ratios. He is thus able to tie in the ratio
format aspects with the distributional properties of financial ratios (to be discussed later in
this review). In the discussion on Barnes's paper (Horrigan, 1983, Barnes, 1983), Horrigan
puts forward that financial ratio research should be more interested in the role of the financial
ratios themselves than in "the nature of the ratios' components or to the ratios' incidental role
as data size deflators".

33
To extrapolate from Horrigan's critique, in our own interpretation the validity of financial
ratio analysis should be determined by its usefulness to the decision making process of the
different interested parties (owners, management, personnel). To illustrate, consider the
potential impact of economics of scale. To assess the efficiency of management a direct
comparison of financial ratios of small and big firms would have to be adjusted for the size
effect. On the other hand, an investor evaluating different investment targets might be more
interested in the level of profitability regardless whether or not it is a result of the size effect.

.As was discussed in Introduction financial ratios can be extended to include market based
data. We concentrate mainly on "pure" financial ratios with both the numerator and the
denominator originating from the income statement and/or the balance sheet. Nevertheless,
concomitant research has been presented with market based ratios. For example, Booth,
Martikainen, Perttunen and Yli-Olli (1994) report deviations from proportionality in the E/P
ratio. Bana Abuzayed (2012), the purpose of this paper is to examine the effect of working
capital management on firms’ performance for a sample of firms listed on a small emerging
market. The paper includes a conceptual as well as empirical analysis, in which data from a
sample of listed firms for the period from 2000 to 2008 are analyzed to examine if more
efficient working capital management improves firms’ accounting profitability and firms’
value. Cash conversion cycles as well as its components are used as measures of working
capital management skills. To bring up more robust results, this study used more than one
estimation technique, including panel data analysis, fixed and random effects, and
generalized methods of moments. In this study, two performance measures are used: one
accounting and one market measure, believing that wealth maximization is shareholders’
main concern. Using robust estimation techniques this study found that profitability is
affected positively with the cash conversion cycle. This indicates that more profitable firms
are less motivated to manage their working capital. In addition, financial markets failed to
penalize managers for inefficient working capital management in emerging mark. The paper's
originality and value lies in suggesting that policy makers in emerging markets need to
motivate and encourage managers and shareholders to pay more attention to working capital
through improving investors’ awareness and improving information transparency.

34
Haitham Nobanee, Modar Abdullatif, Maryam AlHajjar(2011),The purpose of this paper
is to investigate the relation between a firm's cash conversion cycle and its profitability. The
relation between the firm's cash conversion cycle and its profitability is examined using
dynamic panel data analysis for a sample of Japanese firms for the period from 1990 to 2004.
The analysis is applied at the levels of the full sample and divisions of the sample by industry
and by size. A strong negative relation between the length of the firm's cash conversion cycle
and its profitability is found in all of the authors’ study samples except for consumer goods
companies and services companies. Traditional focus in corporate finance was on the long-
term financial decisions, particularly capital structure, dividends, and company valuation
decisions. However, the recent trend in corporate finance is the focus on working capital
management. Most of working capital management literature is based on the US experience.
This study investigates the relation between the firm's cash conversion cycle and its
profitability of Japanese firms where the organizational structure is totally different from that
of the US firms; most of the Japanese firms are interconnected and related through corporate
groups (keiretsu).

Extensive research works on working capital management have been done in both public and
private sectors including multinational companies in Bangladesh. Sayaduzzaman (2006) in
his article on “Working Capital Management: A study on British American Tobacco
Bangladesh Company Limited” mentions that the efficiency of working capital management
of British American Tobacco Bangladesh Company Ltd. is highly satisfactory due to the
positive cash inflows and planned approach in managing the major elements of working
capital. He found that working capital management helps to maintain all around efficiency in
operations.

In the article “Liquidity-Profitability Tradeoff: An Empirical Investigation in an Emerging

Market,” Eljelly (2004) examined the relation between profitability and liquidity by using
Correlation and regression analyses and found that the cash conversion cycle was of more
Importance as a measure of liquidity than the current ratio that affects profitability.

35
1.7 OBJECTIVES OF THE STUDY

Primary objectives:

• To study the short term solvency and profitability position of the company.
Secondary objectives:

• To study the short term financial performance maintained by the company.

• To analyze the profitability position of the company using ratio analysis a
technique.
• To analyze the overall financial positions having compared with the previous
years.
• To suggest measures to improve the financial performance of the company.
• To understand what is receivables management.
• To understand the important factors related to receivables management.
• To understand what is O2C and what are its sub-processes.
• To study how HCL technologies ltd effectively manage their receivables.
• To study the credit management policy of HCL technologies ltd.
• To analyze the efficiency of the collection process.
• To study how effective Receivables Management will help you track customers
and analyze customer activity.

1.8 LIMITATIONS OF STUDY

 The analysis and Fact Findings has been reported has been by using only secondary
data.
 The Study report has been prepared only with the availability of date.
 The study is restricted to only 5 years of data has been taken into account due to time
constrains.

36
CHAPTER – II
2.1 METHODOLOGY

An analysis of financial statements based on ratios is known as ratio analysis. Ratio

analysis involves the process of computing determining and resenting the relationship of
items or group of items of financial statements. Ratio analysis is a widely-used tool of
financial analysis. It can be used to compare the risk and return relationship of firms of
different sizes. It is defined as the systematic use of ratio to interpret the financial statements
so that the strengths and weaknesses of a firm as well as its historical performance and
current financial condition can be determined. The term ratio refers to the numerical or
quantitative relationship between two items.

Classification of Ratio analysis:

Here analysis can be done in two ways,

 Fundamental analysis
 Statistical analysis
Fundamental analysis
In fundamental analysis, Ratio analysis has been used for computing working capital
ratio.

Ratio analysis

Ratio is a relationship between two figures expressed mathematically .Ratio summarize

the data for easy understanding, comparison and interpretation. Financial ratio may be
divided into four groups. They are

1. Profitability ratios
2. Liquidity ratios
3. Turnover ratios

37
1. Profitability ratio:

Profitability is an indication of the efficiency with which the operations of the business
are carried out. The profitability of a firm can be measured by its profitability Ratio. The
amount and rate of profits earned depend upon the quantum of investment committed, so the
profitability

Ratio can be calculated on the basis of either sales or investment. The profitability in relation
to sales can be used to assess the ability of the firm’s management to control the various
expenses involved in generating sales.

 Gross profit ratio

 Net profit ratio
 Operating ratio
 Return on capital employed
 Return on Assets(ROA)
 Return on Equity
 Price earnings ratio(P/E ratio)

2. Liquidity ratio:

Liquidity means the ability of the firm to meet its short term obligation. Current ratio
and acid test ratio are the most popular ratios used to analyze the liquidity.

 Current ratio
 Acid test ratio
Current ratio

The current ratio is calculated by dividing current assets by current liabilities.

Current Asset
Current Ratio = Current
Labilities

38
 As a conventional rule, current ratio of 2:1 or more is considered satisfactory. It is based
on the logic that the higher the current ratio the more the firm’s ability to meet its current
obligations.

Quick ratio

This ratio establishes the relationship between quick or liquid assets and current
liabilities. An asset is liquid if it can be converted into cash immediately or reasonably soon
without a loss of value.
Inventory
Quick Ratio = CurrentAsset —
Currentliabilities

Generally quick ratio of 1:1 is considered to represent a satisfactory current financial

condition. The quick ratio remains as an important index of the firm’s liquidity and is a more
absolute test than the current ratio.

3. Turnover ratio:

The turnover ratios show how well the assets are used and the extent of
excess inventory, if any. These ratios are also known as activity ratios or asset
management ratios. Each ratio has a specific application. They are

 Working capital turnover ratio

 Inventory turnover ratio
 Inventory holding period
 Debtors turnover ratio
 Debt collection period
 Fixed asset turnover ratio
 Average collection period

39
Working Capital Turnover Ratio

This is also known as working capital leverage ratio. This ratio indicates whether or
not working capital has been effectively utilized in marketing sales. This ratio indicates the
number of times the working capital is turned over in the course of a year. A big ratio
indicates efficient utilization of working capital.
Sales
Working capital turnover ratio =
Networkingcapital

Inventory Turnover Ratio

The net result of this ratio is expressed in times, which indicates how many times the
inventory is covered into sales. A high level inventory turnover ratio indicates the risk sales.
A low level inventory turnover ratio results in blocking of funds in inventory which may
ultimately result in heavy loss to the business and becoming obsolete or deteriorating the
quality of material in the stores. Inventory turnover ratio is calculated as follows:

Cost of goods sold

Inventory(or) Stock Turnover Ratio =
Average inventory at cost

Debtors Turnover Ratio

Debtor’s turnover ratio indicates the extent to which the debt has been collected in
times. Debtor’s turnover ratio shows the relationship between credit sales and debtors of the
firm. It gives an indication of credit policy of the firm. It is to test the liquidity position of the
debtors of the firm.
Annualsales
Debtors turnover ratio =
Debtor

Fixed Asset Turnover Ratio

This ratio establishes the relationship between fixed asset and sales. The following formula
is used to calculate sales to fixed asset ratio:
Netsales
Fixed Asset Turnover ratio =
FixedAsset

40
AVERAGE COLLECTION PERIOD

Ratio measures the quality of debtors, short collection period implies prompt payment by
debtors. It reduces the chances of bad debts. Similarly, a longer collection period implies too
liberal and inefficient credit collection performance.

AVERAGE COLLECTION PERIOD (DAYS) =DEBTORS *365/NET CREDIT SALES

METHODS OF DATA COLLECTION

PRIMARY DATA

In primary data collection, the researcher collects the data by himself using methods such as
interviews and questionnaires. The key point here is that the data he collects is unique to
himself and his research and, until he publishes, no one else has access to it.

The responses from the employees constitute the major source of data in this research.
The primary data is obtained through survey method i.e. personal interview method. Personal
and informal discussions with the executives of finance and accounts department were held.

SECONDARY DATA

Secondary data is the data collected by someone other than the user. Common sources of
secondary data include organizational records, different book, journals, internet which are
published and written by different writers and publishers.

Annual reports of HCL technologies ltd and its competitors, company publications, major
financial websites, various text books regarding financial management helped me in
collecting the necessary secondary information.

41
 METHODOLOGY The study is conducted using various accounting ratios. The study is
conducted with the help of primary and secondary data. The data collected has been
classified, tabulated and analyzed. The analyzed data gives rise to findings and conclusions is
drawn from the findings. The suggestions have been given based on the conclusions.
RESEARCH METHODOLOGY Research is an art of scientific investigation. According
to Redman and Mary, research is a “systematic effort to gain knowledge”. Research
methodology is way to systematically solve the research problem. It is a plan of action for a
research project and explains in detail how data are collected and analyzed.

2.2 RESEARCH DESIGN

RESEARCH DESIGN
A research design is collection and analysis of data in a manner, which is relevant to the
research purpose with economy in procedure. The design adopted for the study is descriptive
in nature. Descriptive research studies are those, which are concerned with describing the
characteristics of particular individual or group. Involves gathering data that describe events
and then organizes, tabulates, depicts, and describes the data. It uses description as a tool to
organize data into patterns that emerge during analysis. Often uses visual aids such as graphs
and charts to aid the reader.

STATEMENT OF THE PROBLEM

Effective management of accounts receivable presents important opportunities for firms to
achieve strategic advantage through improvements in customer service, cash management
and reductions in costs. The primary objective of accounts receivable is to collect the cash
due and to assist in meeting cash flow requirements. An effective accounts receivable
function can assist in achieving the desired cash flow outcome through the timely collection
of outstanding debts. The problem encountered is to find out how the accounts receivables
are managed fairly, efficiently and effectively while minimizing the risk of loss. This project
is done for analyzing the receivables management process with reference to HCL
technologies limited, Chennai.

42
2.3 TOOLS OF ANALYSIS

AIM OF THE STUDY

The aim of the study is to evaluate the PROFITABILITY & TURNOVER RATIO process
with special reference to HCL technologies, Chennai.

TIME FRAME OF STUDY: Study is based on the financial data published by the company
for the last 5 years.

TOOLS FOR DATA COLLECTION

RATIO ANALYSIS
It is concerned with the calculation of relationships, which after proper identification and
interpretation may provide information about the operations and state of affairs of a business
enterprise .The analysis is used to provide indicators of past performance in terms of critical
success factors of a business. The assistance in decision-making reduces reliance on
guesswork and intuition and establishes a basis for sound judgements. Major working capital
ratios are found out and analysed here.

INTERVIEW
Interviewing is a technique that is primarily used to gain an understanding of the underlying
reasons and motivations for people’s attitudes, preferences or behaviour. Interviews can be
undertaken on a personal one-to-one basis or in a group. They can be conducted at work, at
home, in the street or in a shopping centre, or some other agreed location. In this project,
informal interviews are made use of. These interviews are conducted with the executives of
Finance & Accounting department of HCL technologies, Chennai.
OBSERVATION
Observation involves recording the behavioural patterns of people, objects and events in a
systematic manner.
GRAPHICAL REPRESENTATION
The researcher used this method for data analysis and interpretation.

43
2.4 SCOPE AND SIGNIFICANCE OF STUDY

• Accounting ratios are very useful in assessing the financial position and profitability
of a business enterprise. This can be achieved through comparison by ratios in the
following ways:
• For same enterprise over a no. of years(horizontal analysis)
• For one enterprise against another in the same industry(third-dimension analysis)
• For one enterprise against the industry as a whole
• For one enterprise against the pre determined standards
• For inter departmental comparisons within an organization

• The study was to put into practical the theoretical aspect of the study into real life
work experience.
• The study of solvency position was analyzed by using various techniques viz.,
Profitability, liquidity, turnover Ratio Analysis. Further the study is based on the past
5 year’s data of HCL technologies.
• Excessive Liquidity is an indicator of idle funds, on the other hand, adversely affects
the creditworthiness of the firm, interrupts the production process and hampers its
earning capacity to a great extent. Thus, efficient Liquidity management has become
essential for the smooth running of any business enterprise.

44
CHAPTER – III
 3.1 ANALYSIS OF DATA

Analysis of working capital is significant for both management and short-term creditors
employed in the business. Such an analysis helps management to detect trends and initiate
corrective measures. It helps the shareholders and creditors to payment of dividend and
interest. The analysis of working capital helps is determining the ability of the company to
repay its current debts promptly, assess the effectiveness of management of working capital
and adequacy of working capital. Analysis of Working Capital relates to an examination of
liquidity, circulation, level and structure of working capital. In this chapter a detailed analysis
of how the working capital is managed in Lucas Indian service limited is presented.

Structure Analysis of Working Capital

Structure analysis of working capital includes the analysis of composition of current

assets and current liabilities.

The current assets include

 Inventories
 Sundry debtors
 Cash and bank balance
 Loans and advances
The current liabilities includes

 Bank Overdraft
 Creditors
 Bills Payables
 Advances
 Other Liabilities
 Provisions

45
PROFITABILITY RATIO :

Table no: 1

Table showing the Gross profit ratio

( In Crore )

Years Gross profit Net sale Ratio (%)

2009-10 1492 12791.95 11.7

2010-11 2577 16908.14 15.2

2011-12 3335 22942.33 14.5

2012-13 3976 26073.15 15.2

2013-14 3515 26900.49 13.1

Source: Collected from the Report of HCL Technologies ltd.

Interpretation:
From the above analysis, it is found that the ratio of Gross profit has increased in the
study period starting from 2010-11 (11.7 to 15.2%). During 2011-13 the Gross performance
rate slightly decreases but the amount of Gross profit increased from Rs.2577 to 3335. During
2013-14 the amount of gross profit rate dropped from 15.2 to 13.1 due to increase in
Expenditure.

Inference: It is inferred that, the higher Gross profit indicates the efficiency of the
manufacturing / trading operation of a company is maintaining good.

46
 Figure no: 1

Figure showing on Gross profit ratio

GROSSROFIT
P Ratio () %

20
15
10
5
0

2009‐10 Ratio (%)

2010‐11
2011‐12
2012‐13
2013‐14

Table no: 2

Table showing on Net profit ratio

( In Crore )

Year Net profit Net sale Ratio (%)

2009-10 1175 12791.95 9.2

2010-11 1992 16908.14 12

2011-12 2543 22942.33 11.1

2012-13 3130 26073.15 12

2013-14 2837 26900.49 10.5

47
Source: Collected from the Report of HCL Technologies ltd.

Interpretation:

From the above table, it is found that the Net profit increases in the study period from
2010-12 (9.2-12%) indicates improvement in the operational efficiency of the business. From
due to 2013-14 the Net profit rate slightly decreases Rs.3130-2837. But the amount of Net
profit increased from Rs.1175-3130. During 2013-14 the amount of Net profit ratio decreased
from 12 to 10.5% due to decrease in indirect expenses.

Inference: It is inferred that, the Net profit ratio during 2009-10 (9.2%) therefore the
operating profits increased. It indicates that the overall financial performance is satisfactory.

Figure no: 2
Figure showing the Net profit ratio

Net profit Ratio (%)

12

10

0
2009‐10 2010‐11 2011‐12 2012‐13 2013‐14

48
 Table no: 3
Table showing the Operating profit ratio
( In Crore )

Year Operating Net sale Ratio (%)

profit

2009-10 1344 12791.95 10.5

2010-11 2442 16908.14 14

2011-12 2999.27 22942.33 13.1

2012-13 3651.4 26073.15 14

2013-14 3100.53 26900.49 11.5

Source: Collected from the Report of HCL Technologies ltd.

Interpretation:

Form the above analysis, it is found that the ratio of Operating ratio has increased in the
study period starting from 2010-11 (10.5-14%). During 2012-13 the operating ratio increases
and also operating profit increases from Rs.2999.27 to 3651.4. During 2013-14 the amount of
operating profit decreases from Rs.3651.4 to 3100.53 and the operating ratio rate also
decreased from 14-11.5% due to increase in operating expenses. So the operating profit
decreases in cost.

Inference: It is inferred that, operating profit indicates the operational efficiency of a

company to leave a portion of sales to give a fair return to the investors

49
 Figure no: 3

Figure showing the Operating Profit

14

12

10

0
2009‐10 2010‐11 2011‐12 2012‐13 2013‐14

Table no: 4

Table showing on Return on capital employed

( In crore)

Year Profit before interest & Capital ROC %

tax employed

2009-10 1509 14233 11%

2010-11 2595 15517 17%

2011-12 3352 17166 20%

2012-13 3997 19033 21%

2013-14 3533 20782 17%

50
Source: Collected from the Report of HCL Technologies ltd.

Implementation:

From the above table it is found that the Return of capital employed increases in the
study period starting from 2010-14 (11-21%). During 2012-14 the return on capital employed
decreases from 21- 17% .The capital employed also increases in study period from 14233-
20782 due to capital generates an high income to an employee.

Inference: It is inferred that, the employed capital generates lower earnings during 2009-
10, i.e. at 11%.

Figure no: 4

Figure showing on Return on capital employed

25%

20%

15%

10%

5%

0%

2009‐10
2010‐11
2011‐12
2012‐13
2013‐14

51
 Table no: 5

Table showing on Return on Total asset

( In Crore)

Year Profit after Total asset ROTA

tax

2009-10 1175 17988.02 0.06

2010-11 1992 15575.28 0.13

2011-12 2543 21023.16 0.12

2012-13 3130 23359.22 0.12

2013-14 2837 24794.09 0.11

Source: Collected from the Report of HCL Technologies ltd.

Interpretation:

From the above table it is found that the return on asset increases in the study period
starting from 2010-14. During 2010-11 the return on asset rate has been increased from 0.06-
0.13% due to increasing in asset based on generating the income. During 2011-14 the return
on asset ratio has slight changes from 0.13-0.11%.

Inference: It is inferred that, the return on asset how effectively the funds pooled together
have been financed from the pool of funds supplied by the creditors and the owners.

52
 Figure no: 5

Figure showing on Return on Total asset

ROTA

0.15

0.1

0.05

2009‐10 ROTA
2010‐11
2011‐12
2012‐13 2013‐14

Table no: 6

Table showing on Return on equity

( In crore)

Year Profit after Net worth ROE

tax

2009-10 1175 14233 0.08

2010-11 1992 15517 0.13

2011-12 2543 17166 0.15

2012-13 3130 19113 0.16

2013-14 2837 20762 0.14

53
Source: Collected from the Report of HCL Technologies ltd.

Interpretation:

From the above analysis, it is found that return on equity increases in the study period
starting from 2010-14. During 2010-11 the return on equity rate is increases from 0.08-0.13%
due to profitability of shareholder’s funds. During 2011-14 the equity funds ratio is slightly
decreases from 0.13-0.15%.

Inference: It is inferred that, the return on equity is how efficiently they manage a
shareholder’s equity funds.

Figure no: 6

Figure showing on Return on equity

0.2

0.15

0.
1
0.05

2009‐ 0
1 201 ‐11
0 2011‐12
2012‐13
2013‐14

54
 Tab Table showing P le no: 7

( In rice Earnings ratio

crores)

Year MPS EPS P/E Ratio (%)

2009-10 171 15 11.4

2010-11 187 25 7.4

2011-12 208 22 9.5

2012-13 165 28 5.9

2013-14 180 25 7.2

Source: Collected from the Report of HCL Technologies ltd.

Interpretation

From the above analysis, it is found that the P/E ratio has been increasing in the study
period from 2011-12 (7.4-9.5%) which indicates the MPS has been increased from Rs.187 to
208 and also the EPS has been slightly decreased from Rs.25 to 22. During 2012-13 the P/E
ratio has been decreased from 9.5to5.9% due to fall in the market price per share from Rs.208
to 165.

Inference: It is inferred that the number of times the EPS is covered by its market price
due to change in P/E Ratio.

55
 Figure no: 7

Figure showing P/E ratio

P/E Ratio (%)

15

10

2009‐10 2010‐11 P/E Ratio (%)

2011‐ 12
2012‐13
2013‐14

TURN OVER RATIO:

Table no: 8

Table showing Fixed asset turnover ratio

( In Crore)

Years Net sales Fixed Assets Ratio(Times)

2009-10 12792 1798 7

2010-11 16908.14 2633 6

2011-12 22942.33 2832 8

2012-13 26073.15 3710 7

2013-14 26900.49 3935 7

56
Source: Collected from the Report of HCL Technologies ltd.

INTERPRETATION:

From the above table it is shown that the fixed asset turnover ratio has been consistent in
the study period starting from 2010-14 (6-7times). During 2011-12 the fixes asset turnover
ratio is 8times which is high contributes towards sales. They are maintaining the rigid policy.
It is the ratio between on net sales of fixed Asset.

Inference: It is inferred that the increase in the investment in fixed asset has not brought
about commensurate gain.

Figure no.8

Figure showing Fixed asset turnover ratio

Fixed asset turnover Ratio(Times)

0
2009‐10
2010‐11
2011‐12
2012‐13
2013‐14

57
 Table no: 9
Table showing Average collection period

Year Debtors*365 Net credit Average

Sales Collection
Period
2009-10 87698 868 101
2010-11 76767 788 97
2011-12 98795 679 146
2012-13 98976 965 103
2013-14 76758 679 113

Source: Collected from the Report of HCL Technologies ltd.

INTERPRETATION

It measures the quality of debtors since it indicates the speed of their collection. The average
collection period in the year 2010 was 101 days which slightly reduce up to 97 days in the
year 2011 and went on increasing till it reached 146 days in the year 2012 which clearly
depicts that the company HCL technologies ltd hold a liberal credit policy. The delay in
collection of receivables impairs the firm’s liquidity. On the other hand, too low a collection
period is not necessarily favourable, rather it may indicate a very restrictive credit and
collection policy which may curtail sales and hence adversely affect profit. For HCL
technologies ltd, it is a company that follows a very liberal policy in dealing with its debtors,
which is why the average collection period rose in the year 2013 and 2014 and came down to
113 days in the year ended 2014.

58
 Figure no: 9
Figure showing Average collection period

Average Collection Period

150
100
50
0

2009‐10 2010‐11
2011‐12
2012‐13
2013‐14

Table no: 10
Table showing Working capital turnover ratio

( In Crore)

Year Net sales Working Ratio (Times)

capital

2009-10 12791.95 4681.04 2

2010-11 16908.14 2679.64 6

2011-12 22942.33 5113 4.5

2012-13 26073.15 7511 3.5

2013-14 26900.49 8554 3

59
Source: Collected from the Report of HCL Technologies ltd.

Interpretation:

From the above table it is found that the working capital turnover ratio has increased in
the study period starting from 2010-14 (2-6times). During 2010-11 the working capital ratio
has increased from 2-6times, due to an increase in sales. During 2012-14 the working capital
ratio is around 3-4times, it is slightly decreased in 2010-11.

Inference: It is inferred that the working capital ratio indicates higher volume of sales with
relatively small amount of working capital and indicating operating efficiency of a firm.

Figure no:10

Figure showing Working capital turnover ratio

Working capital turnover Ratio

(Times)

0
2009‐10 Ratio (Times)
201 0‐11
2011‐ 12
2012‐13
2013‐14

60
 Table no:11

Table showing Inventory turnover ratio

( In Crore)

Year Cost of Goods Average stock Ratio (%)

Sold

2009-10 11300 461.2 24.00

2010-11 14331 610.43 23.00

2011-12 19550 969.38 20.00

2012-13 22029 1235 18.00

2013-14 23287 1074.08 22.00

Source: Collected from the Report of HCL Technologies ltd.

Interpretation:

From the above table it is found that the inventory turnover ratio decreased in the
study period starting from 2010-14 (24-18times). During 2008-10 the inventory turnover ratio
has high ratio 24-23times which has a brisk sale. During 2010-12 it has been decreased from
20to18times that is inventory turnover is lower and result in blocking of funds in inventory
causes heavy losses.

Inference: It is inferred that the inventory turnover ratio indicates that investment in
inventory is in under limits and there is a quick movement of inventory.

61
 Figure no:11

Figure showing Stock turnover ratio

Stock turnover Ratio (%)

25
20
15
10
5
0

2009‐10
2010‐11 Ratio (%)
2011‐12
2012‐13 2013‐14

Table no: 12

Table showing Debtors turnover ratio

( In Crore)

Years Net sales Su dry Ratio (%)

Debtors

2009-10 12792 2365.49 5.4

2010-11 16908.14 2781.63 6.1

2011-12 22942.33 3826.54 6.0

2012-13 26073.15 4608.23 5.6

2013-14 26900.49 4995.56 5.4

62
Sou Int rce: Collected fro m the Report of HCL Technologie
s ltd.
From the above table it has been shown that the debtor’s turnover ratio has maintaining
erpretation:
a consistency of
5.4-6% in the study period starting from 2010-14. During 2013-14 the
receivables ratio is slightly changes from 5.6to5.4% because they maintained the rigid policy.

Inference: It is inferred that the receivables ratio indicates that the debtor’s turnover ratio
is maintaining the consistency.

Figure no: 12

Figure showing Debtors turnover ratio

Debtors turnover Ratio %)

(

6.2

5.8

5.6

5.4

5.2

5
2009‐10 2010‐11 2011‐12 2012‐13 2013‐14

63
LIQUIDITY RATIO

Table no: 13

Table showing current ratio

( In Crore)

Year Current Assets Current liabilities Ratio (%)

2009-10 6120 2800 2.185

2010-11 4807 2841 1.692
2011-12 5795 4349 1.332
2012-13 10831 6783 1.596
2013-14 17603 8939 1.962

Source: Collected from the Report of HCL Technologies ltd.

Interpretation :
The current ratio has increased from 2.18 to 1.69 in 2010. In the year 2012, there has been a
sudden decrease in the ratio where it hiked beyond the level 2 in the year [Link] has
been an increase in the current assets of the company in the year 2010 and in the following
years. Though the current ratio has slightly increased in the year ended 2014, still the
company liquidity holds good. Higher the ratio, the better it is, however but too high ratio
reflects an in-efficient use of resources and too low ratio leads to insolvency. The firm should
keep up this satisfactory level of current ratio in the following years in order to pay off its
obligations. A company’s ability to pay back its short term liabilities depends upon its short
term assets. The higher the current ratio, the more capable the company is of paying its
obligations. From the above analysis it is found that the current ratio has been increasing in
the study period from 2010-14. It indicates the current asset and current liabilities required
norms is 2:1. During the study period 2010-14 mean times above and below the norms.

64
In 2011-12 the current ratio is at 1.332% (i.e.) less than ideal ratio. Due to decrease in current
asset, hence they
maintaining the current ratio are not satisfied. It is suggested that the
company should attempted to maintain the current ratio.

Figure no: 13

Figure showing current ratio

Current Ratio (%)

2.5
2
1.5
1
0.5
0

9
200 ‐10 0
201 ‐11 Ratio (%)
2011‐12
2012‐13
2013‐14

65
 Table no: 14

Table showing Quick ratio

( In Crore)

Year Quick Assets Current Ratio (%)

liabilities
2009-10 5500 2800 1.964
2010-11 4200 2841 1.478
2011-12 5188 4349 1.261
2012-13 9990 6783 1.472
2013-14 15678 8939 1.754

Source: Collected from the Report of HCL Technologies ltd.

Interpretation:
The quick ratios in the year 2011 and 2012 are same as that of current ratios since there is no
inventory mentioned in the balance sheet. The quick ratio is said to be strong when it is
around 1. In the case of the company, it can be seen that the quick ratio is more than 1 in all
the years. The reason for this is the contribution made by sundry debtors and cash and bank
balances to the current assets. This is the major reason why HCL technologies ltd is able to
maintain a good rate of quick ratio. Even then it can be seen that the quick ratio has slightly
reduced from 1.96 to 1.10 in 2012. The reason for this change is the increased loans and
advances and current liabilities. Still it can be said that the quick ratio of the company is good
as it is able to maintain quick ratio near 1 and utilizing the liabilities better. The ideal quick
ratio is 1:1. From the graph, it’s clear that the company is financially fit enough to pay off its
liabilities in time.

66
 Figure no: 14

Figure showing Quick ratio

o
Quick Rati(%)

1.5

0.5

0
2009‐10 Ratio (%)
0 ‐11
201
2011‐12
2012‐13
2013‐14

67
 COMPARATIVE ANALYSIS: PROFITABILITY RATIO

Ratios 2009-10 2010-11 2011-12 2012-13 2013-14

GP Ratios 11.7% 15.2% 14.5% 15.2% 13.1%

NP Ratios 9.2% 12% 11.1% 12.00% 10.5%

Operating 10.5% 14% 13.1% 14% 11.5%

Profit Ratio

Conclusion:

From the above analysis it is shown that the Gross profit ratio which has a continuous
growth in the study period from 2010-14, except 2013-14. The Net profit ratio also has a
stable growth from 9.2-12%.The operating profit ratio also have consistency growth starts
during the study period from 10.5to14%. Compared with the profitability ratios the Gross
profit ratio has flexible trend in the year 2010-11 and 2012-13.

Ratios 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

ROA 0.06 0.13 0.12 0.12 0.11

ROE 0.08 0.13 0.15 0.16 0.14

P/E Ratio 11.4 7.4 9.5 5.9 7.2

Conclusion: From the above analysis it is found that the Return on Asset (ROA)
which has been increasing from 0.06-0.11%. The Return on total asset has a growth in the
total asset during 2010-14.

68
The Return on Equity which is based on increasing its net worth has stable growth on equity.
The Price Earnings ratio does not follow the constant growth that, it seems volatile during the
study period it influences on market price per share.

COMPARATIVE ANALYSIS: LIQUIDITY ANALYSIS

Ratios 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

Current 2.3 1.6 2.3 3 3.3

Ratio

Quick Ratio 2 1.3 1.8 2.5 4.5

Conclusion:

From the above analysis it is found that the current ratio decreased in current asset. In
2010-2011 the current ratio is at 1.6% (i.e.) less than ideal ratio (2:1). During 2013-14 they
have a high quick ratio which is above the norm due to increase in short term investment.

69
 COMPARATIVE ANALYSIS: TURNOVER ANALYSIS

Ratios 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

Working 2 6 4 4 5
capital ratio

Inventory 24.00 23 20 18 22
turnover
ratio

Debtors 5.4 6.1 6 5.6 5.4

turnover
ratio

Fixed asset 7 6 8 7 7
turnover
ratio

Conclusion:

From the above analysis it is found that the turnover ratio indicates the efficiency with
which capital employed is rotated in the business. The working capital turnover ratio has
been effectively utilized in making sales in 2013-14 (5times). The inventory turnover ratio
indicates during 2011-13 it has been decreased from 20-18 times that is inventory turnover is
lower and result in blocking of funds in inventory causes heavy losses. The debtors turnover
ratio indicates sundry debtors are maintaining consistency in study period 2010-14. In fixed
asset turnover ratio indicates high contributes towards sales during 2011-12 (8times).

70
CHAPTER – IV
4.1 FINDINGS

• Current ratio has been deteriorating in 2012 and 2013 at 1.332 and 1.596 which was
well below the benchmark of 2:1. Short term solvency of the company improves in
the following years and is satisfactory in the year 2014.

• Quick ratio of the company in the year 2011 and 2012 is also less but in the following
years, it has been seen above the benchmark of 1:1

• Debtor’s turnover ratio is high in the year 2010 and 2012 but it slowly deteriorated in
the following years. But there has been an increase from 2.178 to 2.416 in the year
2014 which shows that the liquidity of the receivables is high.

• Increase in fixed asset turnover ratio in the year 2010 to 2013 shows maximum
utilisation of employed capital. But from the year 2014, there is a steep decrease in
the ratio which shows fixed assets are underutilised.
• Average collection period in the year 2012 was very high approximately 146 days it
took for collecting its receivables. This was made to minimize in the year 2014 to 113
days.

• From the Profitability analysis , it is found that the GP ratio was decreased from 15.2
to 13.1 during the study period 2012-13 and 2013- 14 . The Net Profit ratio also
decreased the rate from 12 to 10.5 due to increase in Direct and Indirect expenses over
the period of time.

• The Operating profit ratio decreased from 14 to 11.5 due to increase in operating
expenses. It indicates the Operation Efficiency of the company to leave a portion of
sales to give a fair return to the investors.

• Price earnings ratio has been decreased from 9.5 to 5.9 % due to fall in the MPS. The
number of times the EPS is covered by its market price due to P/E ratio changes.
71
4.2 SUGGESTIONS

• It is suggested that the company may concentrate on the amount of investment

towards current asset and liabilities in which to maintain short term solvency position
(i.e.) the idle current ratio of 2:1 and the liquidity ratio of 1:1.
• The company may give attention in the area of Direct Expenses and Indirect
Expenses to reduce it because effective and efficiency performance of the company
can be measured in term of profitability.
• Expenses are the major direct impact on the profitability of the every Enterprise. The
company may give attention in the area of Direct Expenses and Indirect Expenses to
reduce it because effective and efficiency performance of the company can be
measured in term of profitability. Expenses are the major direct impact on the
profitability of the every Enterprise.
• It is suggested that the higher investment in Inventory indicates current ratio to slow
down.
• Encourage customers pay on time. Raising the invoice promptly and accurately.
Demanding cash on delivery (COD). But this can sometimes reduce sales. Establish
automatic debits to bank accounts on the invoice date to effectively reduce the
receivables float.
• Effective communication with the clients. Offer customers discounts for earlier
payments. Receivables financing or factoring.

72
4.3 CONCLUSIONS

Managing the receivables may be identified with any other type of governance as the
process of implementation of specific management objectives which includes planning,
organizing, motivation and controlling. This is what the O2C process is concerned about.
Return of debt in short time is the main objective of effective receivable collection which
gives the real opportunity to supplement scarce working capital. Thus management of
accounts receivables is a part of overall management aimed at increasing the volume of sales
and optimizing the size of debt, providing its timely collection.

The O2C (order to cash/order to receivables) process of HCL technologies ltd BSERV
ensures to understand the mindset of their clients. It aims at increasing sales through
increased product/service sales on credit reliable clients and ensures timely collection of
debts. It assesses and manages credit risk on an ongoing basis. The company has got a
comprehensive and liberal credit management strategy. It has got a practical approach in
balancing credit risk and customer relationship.

Profitability and liquidity position at satisfactory level and the proper maintenance of
the Receivables and Payables system in the organization. It improves Gross Performance of
the company and the Earning Performance was satisfactory.

73
CHAPTER – V
 SUMMARY

The Report mainly focuses ratio analysis position of the HCL Technologies private
Limited .

The short term financial commitments called as current liabilities should be

effectively met with adequate current assets, working capital should be optimized in such a
way that the current liabilities are effectively handled and on the other hand the money flow
or resource should not be under used.

The aim of the study is to analyze the short term solvency and profitability position of
the company. The inflow and outflow of cash investment towards to maintain the short term
solvency position. The objectives of the study is, to analyses the profitability position of the
company, to analyze the overall financial performance having compared with the previous
years, to evaluate the financial performance.

The nature of the study was exploratory study and it analyses the financial records
with reference to funds usage pertaining to short term. The extracts from annual financial
statements were analyzed to isolate were critical factors that have an effect of financial
management in the short term. The study used standard financial analyses tools like Ratio
analysis t to meet out of the objectives of the study. The scope of the study was to put into
practical the theoretical aspects of the study into real life work experience. The limitations of
the study were analysis and fact findings have been reported by using only secondary data.
Tables were framed based on relevant data from annual report and interpretations were made.
Findings of the study were extracted from interpretations. Suggestions of the study were
made based on the betterment of the company and projections of logic from conclusion by
experts. Conclusion of the study was derived from finding of the study and it has been
generalized conclusion.
 BIBLIOGRAPHY

BOOKS REFERED:

1. Dr. S. N. Maheshwari “Management Accounting and Financial Control” (2004), Sultan and
Chand Sons Publications.
2. T.S. Reddy, Y. Hari Prasad Reddy “Management Accounting” (2012), Margham
Publications.
3. A. Murthy “Financial Management” (2012), Vikas Publishing House Pvt Ltd.
4. Donald R. Cooper and Pamela S. Schindler “Business Research Methods”, Tata McGraw-
Hill Publishers, 11th Edition, 2012.
5. [Link] and Yesh pal “Research methodology in management”, deep & Deep Publications,
2004.
6. G C Beri “Business statistics”, Tata McGraw-Hill Publishing Company Limited, 2005.
7. T N Srivastava & Shailajarego “Statistics for Management”, Tata McGraw Hill Education
Private Limited’s 2010.
WEBSITES:

[Link]

[Link]

[Link]

[Link]

[Link]

[Link]
ELOPMENT_IN_THE_NIGERIAN_PUBLIC_SERVICE

[Link]

[Link]

[Link]

75
ANNEXIER AND
APPENDIX
 APPENDIX
DETAIL FOR SECONDRY DATA

HCL Technologies

Financial ratios

Jun '14 Jun '13 Jun '12 Jun '11 Jun '10

Investment Valuation Ratios

Face Value 2.00 2.00 2.00 2.00 2.00

Dividend Per Share 8.00 9.00 11.00 6.50 4.00

Operating Profit Per Share (Rs) 88.44 61.88 36.21 20.02 10.83

Net Operating Profit Per Share (Rs) 145.68 117.63 85.48 54.66 40.82

Free Reserves Per Share (Rs) -- -- -- -- 41.74

Bonus in Equity Capital 45.35 39.61 32.91 39.30 23.17

Profitability Ratios

Operating Profit Margin(%) 25.31 19.67 28.18 22.31 21.83

Profit Before Interest And Tax

29.75 32.16 23.42 17.59 21.77
Margin(%)

Gross Profit Margin(%) 31.34 33.14 24.21 18.02 22.43

Cash Profit Margin(%) 37.74 31.42 25.01 21.40 26.12

Adjusted Cash Margin(%) 37.74 31.42 25.01 21.40 26.12

Net Profit Margin(%) 34.88 28.72 21.18 17.21 20.18

Adjusted Net Profit Margin(%) 34.88 28.72 21.18 17.21 20.18

Return On Capital Employed(%) 47.30 41.71 33.64 20.74 20.44

Return On Net Worth(%) 38.00 36.20 29.53 20.45 21.41

Adjusted Return on Net Worth(%) 38.00 35.29 29.53 20.45 22.16

Return on Assets Excluding Revaluations

224.94 146.84 95.25 85.06 72.69

Return on Assets Including Revaluations 224.94 146.84 95.25 85.06 72.69

Return on Long Term Funds(%) 47.41 42.05 34.47 20.74 21.71

Liquidity And Solvency Ratios

Current Ratio 2.44 1.82 1.38 1.95 1.92

Quick Ratio 2.40 1.76 1.42 1.84 2.19

Debt Equity Ratio -- 0.06 0.11 0.14 0.28

Long Term Debt Equity Ratio -- 0.05 0.08 0.14 0.21

Debt Coverage Ratios

Interest Cover 91.60 59.22 25.27 13.72 13.24

Total Debt to Owners Fund 0.00 0.06 0.11 0.14 0.28

Financial Charges Coverage Ratio 97.61 65.00 28.90 16.60 15.48

Financial Charges Coverage Ratio Post

80.31 55.23 24.68 15.69 14.13
Tax

Management Efficiency Ratios

Inventory Turnover Ratio 1,061.61 152.95 89.08 54.37 1,131.13

Debtors Turnover Ratio 5.56 5.32 4.88 3.63 2.84

Investments Turnover Ratio 1,061.61 152.95 89.08 54.37 1,131.13

Fixed Assets Turnover Ratio 3.71 3.38 2.88 2.73 2.56

Total Assets Turnover Ratio 1.05 1.16 1.23 1.03 0.84

Asset Turnover Ratio 1.24 1.38 1.27 1.04 0.98

Average Raw Material Holding -- -- -- -- --

Average Finished Goods Held -- -- -- -- 0.40

Number of Days In Working Capital 154.14 80.74 25.08 72.38 189.90

Profit & Loss Account Ratios

Material Cost Composition 2.09 2.01 2.02 4.04 0.05

Imported Composition of Raw Materials

-- -- -- -- --
Consumed

Selling Distribution Cost Composition -- -- -- -- 0.39

Expenses as Composition of Total Sales 86.31 90.91 94.12 74.42 97.82

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit 11.70 22.54 42.58 42.93 25.57

Dividend Payout Ratio Cash Profit 10.81 20.14 36.05 34.53 20.30

Earning Retention Ratio 88.30 76.87 57.42 57.07 75.30

Cash Earning Retention Ratio 89.19 79.39 63.95 65.47 80.25

Adjusted Cash Flow Times 0.01 0.15 0.30 0.57 1.02

HCL Technologies
Balance sheet

Jun '14 Jun '13 Jun '12 Jun '11 Jun '10

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 140.00 139.37 138.66 137.74 135.76

Equity Share Capital 140.00 139.37 138.66 137.74 135.76

Share Application Money 7.65 5.01 2.77 1.00 2.01

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Init. Contribution Settler 0.00 0.00 0.00 0.00 0.00

Preference Share Application Money 0.00 0.00 0.00 0.00 0.00

Employee Stock Option 0.00 0.00 0.00 0.00 0.00

Reserves 13,402.18 11,019.61 8,696.43 6,514.25 5,151.06

Net worth 19,549.83 13,163.99 9,837.86 7,652.99 6,288.83

Secured Loans 200.51 791.98 1,483.60 1,638.52 2,345.90

Unsecured Loans 205.96 133.27 42.59 35.87 378.34

Total Debt 406.47 925.25 1,526.19 1,674.39 2,724.24

Minority Interest 57.33 44.68 1.07 3.71 3.68

Policy Holders Funds 0.00 0.00 0.00 0.00 0.00

Group Share in Joint Venture 0.00 0.00 0.00 0.00 0.00

Total Liabilities 20,013.63 14,133.92 11,365.12 9,331.09 9,016.75

 Jun '14 Jun '13 Jun '12 Jun '11 Jun '10

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 140.00 139.37 138.66 137.74 135.76

Equity Share Capital 140.00 139.37 138.66 137.74 135.76

Share Application Money 7.65 5.01 2.77 1.00 2.01

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Init. Contribution Settler 0.00 0.00 0.00 0.00 0.00

Preference Share Application Money 0.00 0.00 0.00 0.00 0.00

Employee Stock Opiton 0.00 0.00 0.00 0.00 0.00

Reserves 19,402.18 13,019.61 9,696.43 7,514.25 6,151.06

Networth 19,549.83 13,163.99 9,837.86 7,652.99 6,288.83

Secured Loans 200.51 791.98 1,483.60 1,638.52 2,345.90

Unsecured Loans 205.96 133.27 42.59 35.87 378.34

Total Debt 406.47 925.25 1,526.19 1,674.39 2,724.24

Minority Interest 57.33 44.68 1.07 3.71 3.68

Policy Holders Funds 0.00 0.00 0.00 0.00 0.00

Group Share in Joint Venture 0.00 0.00 0.00 0.00 0.00

Total Liabilities 20,013.63 14,133.92 11,365.12 9,331.09 9,016.75

Jun '14 Jun '13 Jun '12 Jun '11 Jun '10

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds

Gross Block 10,547.05 9,483.41 8,884.52 7,264.71 7,061.60

Less: Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Less: Accum. Depreciation 3,103.11 2,730.87 2,431.42 2,018.93 2,221.98

Net Block 7,443.94 6,752.54 6,453.10 5,245.78 4,839.62

Capital Work in Progress 530.95 493. 84 47 555.85 609.13

Investments 661.69 713. 578. 20 737.50 831.70

Inventories 122.30 231. 04 16 166.35 65.17

Sundry Debtors 5,682.84 4,497. 66 2,611.28 2,521.06

673.
Cash and Bank Balance 8,807.30 3,577. 69 1,612.36 1,580.37
50
Total Current Assets 14,612.44 8,305. 51 4,389.99 4,166.60
226.

15 3,875.

11 1,947.
76 6,049.

Loans and Advances 6,730.67 6,134. 14 4,537. 02 2,971.52 2,155.67

0.00 0. 00 00 0.00 0.00
Fixed Deposits 0.
Total CA, Loans & Advances 21,343.11 14,439.9 0 .53 7,361.51 6,322.27

10,586
Deferred Credit 0.00 0. 00 00 0.00 0.00
Current Liabilities 8,309.53 6,342. 26 3,596.16 2,979.93
0.
32 5,299.

Provisions 1,656.53 1,923.08 1,626.92 973.39 606.04

Total CL & Provisions 9,966.06 8,265.40 6,926.18 4,569.55 3,585.97

Net Current Assets 11,377.05 6,174. 50 3,660. 35 2,791.96 2,736.30

Minority Interest 0.00 0. 00 00 0.00 0.00

0.
Group Share in Joint Venture 0.00 0. 00 00 0.00 0.00
Miscellaneous Expenses 0.00 0. 00 0.00 0.00
0.
00
0.

Total Assets 20,013.63 14,133.9 2 .12 9,331.09 9,016.75

11,365