Ratio analysis of NCL by Shrawan Dwivedi

A PROJECT REPORT ON
“RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED”
AT
NORTHERN COALFIELDS LIMITED
SINGRAULI
Submitted to
SINHGAD INSTITUTE OF BUSINESS ADMINISTRATION & RESEARCH
In Partial Fulfillment of Requirements
for the Award of
Post Graduate Diploma in Management
BY
SHRAWAN KUMAR DWIVEDI
PGDM (Finance) IIIrd Semester
Under the Guidance of
PROF. SIDDHARTH KARALE
ACADEMIC YEAR 2009-2011
SINHGAD INSTITUTE OF BUSINESS ADMINISTRATION & RESEARCH
S.No. 40/4A + 4B/ 1, Near PMC Octroi Post, Kondhwa- Saswad Road,
Kondhwa (Bk.), Pune – 411048

RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED
2 | P a g e S h r a w a n K u m a r D w i v e d i
+91 8179130135 shrawan.sibar@gmail.com
shrawan.dwivedi@bevconzentry.com

CERTIFICATE
This is to certify that SHRAWAN KUMAR DWIVEDI student of SINHGAD
INSTITUTE OF BUSINESS ADMINISTRATION & RESEARCH, Pune has
completed his/ her summer training at NORTHERN COALFIELDS LIMITED,
SINGRAULI on the topic of RATIO ANALYSIS OF NORTHERN COALFIELDS
LIMITED and has submitted the Summer Training Project Report in partial fulfillment of
PGDM for the academic year 2009 -2011.
He has worked under our guidance and direction. The said report is based on bonafide
information.
PROF. SIDHHARTH KARALE PROF. AVADHOOT D. POL
Project Guide Director
Date:-
Place:-

ACKNOWLEDGEMENTACKNOWLEDGEMENTACKNOWLEDGEMENTACKNOWLEDGEMENT
My acknowledgement deeply thanks the co-operation received from all the employees of
Northern Coalfields Limited, Singrauli as a whole for providing me the opportunity to learn
from them there systematic approach of accomplishing the work. I also convey my gratitude to
its employees especially the Finance Department for intending all the help I needed and the
congenial working environment they provided me during my project they were so helpful that I
never felt that I am working with the persons senior to me age wise as well as experience wise.
With their guidance co-operation and best wishes it would have been possible for me to complete
my training and report satisfactorily.
I express my deep sense of gratitude of Mr. S. Mazumdar of NCL for his constant supervision
during the entire project work. I am truly grateful to all the Finance Managers who gave me vital
information related to my project work. I express my sincere thank to Mr. C.P. Singh (Dy.Chief
Finance Manager) Mr. B.P.Pathak (Sr. A.O.), Mr. V.S. Mohanti (Sr. A.O.), and Mr.
Rajendra Prasad Dwivedi (Sr. S.K.), whose selected views, morale support and proper
guidance has been possible for bringing out this project report in a schedule time and with a nice
get up.
I also wish to express a special thanks to Prof. Avadhoot Pol (Director SIBAR), Prof. R.M.
Indi (Dean Management Programmes). A big thank to Prof. Siddhart Karale and all teaching
and non- teaching staff members, the Sinhgad Institute of Business Administration & Research,
Pune for their support. The support is gratefully acknowledged.
I would also like to thank to my all family members specially Vineet and Vinay whose morale
support helped me to complete my project successfully.
Lastly, a big thanks to all those who helped me sparing time even through their busy schedule
and for being kind enough to help me whenever needed them.
- Shrawan Kumar Dwivedi

SINHGAD INSTITUTE OF BUSINESS ADMINISTRATION AND
RESEARCH, KONDHWA (BK)
DECLARATION
I herby declare that the project titled “RATIO ANALYSIS OF NORTHERN COALFIELDS
LIMITED” is an original piece of research work carried out by me under the guidance and
supervision of Prof. SIDDHARTH KARALE. The information has been collected from
genuine & authentic sources. The work has been submitted in partial fulfillment of the
requirement of PGDM .
Place:
Date: Shrawan Kumar Dwivedi
9595302505
shrawan.sibar@gmail.com

Executive Summary
India is the third largest coal producer in the world and the eighth largest importer. With annual
production of 310 million tonnes and imports of almost 25 million tonnes, coal provides one-
third of energy supply in India. The Indian government forecasts huge increases in electricity
capacity based on coal, and a financially viable electricity industry will be necessary to support
reforms in the coal industry. This report describes the Indian coal sector, and comments on
government policies and the performance of India's largely state-owned coal companies. There is
a substantial need for reforms in India's coal sector to improve efficiency and competitiveness.
With the growth of the Indian economy due to various factors like Industralization, Growth of
Infrastructure, Institutional Development etc. the power is going to be the main key for any
development so the Coal is wodely used by the power industries for generating the power.
Financial statement analysis is important to board of the Directors, Managers, Payers, Lenders,
and others who make judgments about the financial health of organizations. One widely accepted
method of assessing financial statements is ratio analysis, which uses data from the balance sheet
and income statement to produce values that have easily interpreted financial meaning. The
purpose of this project was to get awareness about how an organization works.
The project was carried out for study and analyzing the financial condition of Northern
Coalfields Limited with special reference of Jayant Project. It was done to know that what is the
current financial scenario of the company. In this project report I have made Ratio Analysis for
analyzing that that what are the different ratios available in the organization and what is current
growth comparing to the last year.

TABLE OF CONTENTS
Chapter
No. Sr. No. Particulars
Page
No.
Chapter
I Introduction
1.1 Introduction of the topic 9
1.2 Objectives of the study 11
1.3 Significance of te Study 11
1.4 Limitations & Future Scope 11
Chapter
II Research Methodology 12
Chapter
III Organizational Profile 14
3.1 About the Organization 16
3.2 Vision, Mission of the Organization 19
3.3
Historical Background of the
Organization 20
3.4
Different Departments of the
Organization 21
3.5
Organizational Structure of the
Organization 23
3.6 Current Status of the Organization 26
3.7 Future Plans of the Organization 29
3.8 Awards and Achievements 30
Chapter
IV Data Analysis 31
Chapter
V Summary & Conclusions 45
5.1 Major Findings & Suggestions 46
5.2 Conclusions 47
Chapter
VI Reference Section 48

LIST OF TABLES
TABLE NO. TITLE OF THE TABLE PAGE NO.
Table no. 3.1 Projects of NCL 17
Table no. 3.2 Coal Resources in Northern
Coalfields Limited
26
Table no. 3.3 Payment to Central/ State
Exchequer
44
LIST OF FIGURES
LIST OF FIGURES
TABLE NO. TITLE OF THE FIGURE PAGE NO.
Figure no. 3.1 Consumer Profile 22
Figure no. 3.2 Cost of Production 27
Figure no. 3.3 Status of Outstanding Dues 28
Figure no. 3.4 Comparison of the
production between NCL
and Jayant project
28

CHAPTER I
INTRODUCTION

INTRODUCTION OF THE TOPIC
To analyze the financial position of NORTHERN COALFIELDS LIMITED, different tools
are used, of Ratio Analysis. Financial analysis involves the use of various financial statements.
These statements do several things. First the balance sheet and the second is income statement.
The Balance sheet summarizes the assets, liabilities, and owner’s equity of a business at a point
in time, while the income statement summarizes revenues and expenses of a firm over a
particular period of time. A conceptual framework for financial analysis provides the analyst
with an interlocking means for structuring the analysis.
A financial ratio (or accounting ratio) is a relative magnitude of two selected numerical values
taken from an enterprise's financial statements. Often used in accounting, there are many
standard ratios used to try to evaluate the overall financial condition of a corporation or other
organization. Financial ratios may be used by managers within a firm, by current and potential
shareholders (owners) of a firm, and by a firm's creditors. Security analysts use financial ratios to
compare the strengths and weaknesses in various companies. If shares in a company are traded in
a financial market, the market price of the shares is used in certain financial ratios.
Values used in calculating financial ratios are taken from the balance sheet, income statement,
statement of cash flows or (sometimes) the statement of retained earnings. These comprise the
firm's "accounting statements" or financial statements. The statements' data is based on the
accounting method and accounting standards used by the organization.
Financial ratios quantify many aspects of a business and are an integral part of financial
statement analysis. Financial ratios are categorized according to the financial aspect of the
business which the ratio measures. Liquidity ratios measure the availability of cash to pay debt.
Activity ratios measure how quickly a firm converts non-cash assets to cash assets. Debt ratios
measure the firm's ability to repay long-term debt.Profitability ratios measure the firm's use of its
assets and control of its expenses to generate an acceptable rate of return. Market ratios measure
investor response to owning a company's stock and also the cost of issuing stock.
Financial ratios allow for comparisons
• between companies
• between industries
• between different time periods for one company
• between a single company and its industry average
Ratios generally hold no meaning unless they are benchmarked against something else, like past
performance or another company. Thus, the ratios of firms in different industries, which face
different risks, capital requirements, and competition are usually hard to compare.

1.2 Objectives of the report
To get awareness about the financial techniques.
To find out NCL’s ability to meet the current obligation.
To analyze the financial statement of NCL.
To understand how effectively NCL utilizes its assets in producing Coal.
1.3 Significance of the study:
The present study dealt with the current financial status of the Northern Coalfields
Limited. It provides a broad view regarding Coal Production in NCL as well as in India. And this
project also tells, what is the current financial condition of the NCL in India? And How they are
contributing towards the coal production?
. In this context, we will address the following questions:
1. To analyze the current financial condition of NCL, Singrauli
2. To know the contribution of the NCL in the Indian Coal Industry.
1.4 Limitations & Future Scope:
Limitations :
Less response by some of the staff members
Due to new in the department some of the staff members not provided some kind
of information.
Problems in collection of the data of past years because the database is maintained
by the headquarter and they don’t allow to provide these information to the
outsiders.
Two months period for understanding all the working procedure of any particular
organization is not sufficient.
Scope :
In this project I have done the financial analysis of the company so the scope of the
study is that this report can be used as a financial statement of the company. This
report shows different financial aspects of the Northen Coalfields Limited. This
report also contains the information related the various projects run by the NCL and
what is their contribution in Coal production.

CHAPTER II
RESEARCH
METHODOLOGY

RESEARCH METHODOLOGY :
Research in common parlance refers to a search for knowledge. One can also define
research as a scientific and systematic search for pertinent information on a specific topic.
Research methodology is a way to systematically solve the research problem. Research
methodology just does not deal research method but also consider the logic behind the method. It
facilitates the researcher with reason for evaluating the research problem.
Definition:
According to Redman and Mory
“Research is systematized effort to gain new knowledge”.
According to Clifford Woody
“Research comprises defining and redefining problems, formulating hypothesis or
suggested solutions, collecting organizing and evaluating data , making deductions and reaching
conclusions and at last carefully testing the conclusions to determine whether they fit the
formulating hypothesis”.
The research is done through :
Journals : I have used the the organizational journals published by the company for
collecting the data.
Annual Reports : Annual reports are the best way to collect the information about the
company. If we are going to conduct any research work in the field of Finance then we
must should have to refer the company’s Annual Report.
Plant visit : By visiting the Plant I came to know that what is the real scenario, what is
the position of the company? How the work flows ? etc. then I collected the relavent
information which I was needed to complete my project.
Personal discussion and interaction : I have Discussed with the concerned
people and thus collected information for the research.

CHAPTER III
ORGANIZATIONAL
PROFILE

NORTHERN COALFIELDS LIMITED
(A Government of India’s Mini ratna Enterprise)
P.O.:Singrauli, Dist.:Singrauli (M.P.), PIN.:486889
EPABX-07805-266670, 266393 Fax - 07805-266640
E mail : nclsgr@hotmail.com, nclsgr@yahoo.com
Website : http://www.ncl.nic.in

3.1 About the Company
Northern Coalfields Limited (NCL) – A Profile
NCL is a subsidiary of Coal India Limited (CIL). It was founded in
the year (1984). Earlier it was a subsidiary of Central Coalfields
Limited (CCL). It is among the top PSU's in India.
NCL is the only subsidiary of CIL producing 100% of coal from
opencast mines. There is steep rise in the coal demand on NCL to
meet the power and energy needs of the country . (44.43MT in 2002-
03 to 78.44MT in 2011-12). The major demand of coal on NCL is
from power sector, which contributes more than 96% of the total
demand.
The CILs production level in the year 2011-12 is projected as 619.67 million tones out of which NCLs
contribution will be 78 million tonnes.
In NCL there are four existing & completed projects with production capacity of 20.00MTpa , six
ongoing projects recently approved with the sanctioned capacity of 57.50 mtpa. Two new expansion
projects are awaiting Government approval , and one extension project is under formulation .
The NCL supplies coal to pithead power plants of national thermal power corporation (NTPC), Uttar
Pradesh rajya vidyut utpadan nigam Ltd (UPRVUNL) and Renupower division of M/s. Hindalco
Industries having installed capacity of 11155MW. NCL is also supplying coal to power plants of
rajasthan state Electricity Board and Delhi Vidyut Board (DVB) and to other industries like Aluminium
(Hindalco), Chemicals etc.
In December 2008, NCL achieved its company-
wide ISO 9001:2000 certification. It is also
preparing to implement a company-level
Integrated Management System to
simultaneously comply with ISO 9001, ISO
14001, OHSAS 18001, and SA 8000; which will
cover all its mining establishments, other support
units, and all headquarters function .

Projects of NCL
Sl.
No.
Project Existing Capacity (MT)
Incremental/N
ew
Total Actual
08-09
Production
(MT)
Target
09-10
11-12
1 Amlori
Expansion
4.00 6.00 10.00 5.28 5.50 8.50
2 Bina
Extension
4.50 1.50 6.00 5.44 5.50 6.00
3 Block B - 3.50 3.50 3.50 3.00 3.00
4 Dudhichua
Expansion
10.00 5.00 15.00 13.27 12.75 15.00
5 Jayant
Expansion
10.00 5.00 15.00 13.02 12.75 15.00
6 Jhingurda 3.00 - 3.00 3.86 4.00 -
7 Kakri
Extension
3.00 - 3.00 2.93 3.00 3.00
8 Khadia
Expansion
4.00 6.00 10.00 3.68 4.00 8.00
9 Krishnashila - 4.00 4.00 1.08 3.00 4.00
10 Nigahi
Expansion
10.00 5.00 15.00 11.66 13.00 15.00
48.50 36.00 84.50
Grand
Total
84.50-3.00*
= 81.50
63.65 66.50 78.00
* Jhingurda Project will exhaust by 2011-12
Table no. 3.1
The area of Singrauli Coalfields is about 2202 Sq.Km. The coalfield can be divided into two basins, viz.
Moher sub-basin (312 Sq.Km.) and Singrauli Main basin (1890 Sq.Km.). Major part of the Moher sub-
basin lies in the Singrauli district of Madhya Pradesh and a small part lies in the Sonebhadra district of
Uttar Pradesh. Singrauli main basin lies in the western part of the coalfield and is largely unexplored. The
present coal mining activities and future blocks are concentrated in Moher sub-basin. The exploration
carried out by GSI/NCDC/CMPDI has proved abundant resource of power grade coal in the area. This in
conjunction with easy water resource from Govind Ballabh Pant Sagar makes this region an ideal location
for high capacity pithead power plants. The coal supplies from NCL has made it possible to produce
about 10515 MW of electricity from pithead power plants of National Thermal Power Corporation
(NTPC), Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd (UPRVUNL) and Renupower division of M/s.
Hindalco Industries. The region is now called the "power capital of India". The ultimate capacity of
power generation of these power plants is 13295 MW and NCL is fully prepared to meet the increased

demand of coal for the purpose. In addition, NCL is also supplying coal to power plants of Rajasthan
Rajya Vidyut Utpadan Nigam Ltd, Delhi Vidyut Board (DVB) and Hariyana State Electricity Board.
NCL, through its community development programmes, has significantly contributed towards
improvement and development of the area. It is helping local tribal, non-tribal and project-affected
persons in overall improvement of quality of their life through self-employments schemes, imparting
education and providing health care.
NCL is the only subsidiary of CIL prroducing 100% of coal from opencast mines. There is steep rise in
the coal demand on NCL to meet the power and energy needs of the country. (44.43 MT in 2002-03 to
78.44 MT in 2011-12). The major demand of coal on NCL is from power sector, which contributes moe
than 96% of the total demand. The CIL’s production level in the year 2011 – 12 is projected as 619.67
million tonnes out of which NCL’s contribution will be 78 million tonnes.
In NCL there are four existing & completed projects with production capacity of 20.00 Mtpa, six ongoing
projects recently approved with the
sanctioned capacity of 57.50 mtpa.
Two new Expansion Projects are
awaiting Government approval, and
one extension project is under
formulation. The additional production
capacity of the three new projects is
11.00 mtpa.
The NCL supplies coal to pithead
power plants of National Thermal
Power Corporation (NTPC), Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd. (UPRVUNL) and
Renupower division of M/s. Hindalco Industries having installed generating capacity of 11155 MW. NCL
is also supplying coal to power plants of Rajasthan State Electricity Board and Delhi Vidyut Board
(DVB) and to other industries like Aluminium (Hindalco), Chemicals etc.

3.2 Vision and Mission of the organization
VISION
“Be the leading energy supplier in the country, through best
practices from mine to market.”
MISSION
“The mission of Coal India Limited is to produce and market
the planned quantity of coal and coal products efficiently and
economically with due regard to safety, conservation, quality
and environment.”

3.3 Historical background of Singrauli Coalfields – A Retrospect
Singrauli Coalfields is located in the northern most part of sone-Mahanadi master basin
and covers an area of 2202 Sq. Km. in M.P. and U.P. States. Discovery of coal in
Singrauli coalfields dates back to 1840 when Capt. Wroughton located the occurrence of
coal near surface in the vicinity of Kota Dist. Mirzapur (presently known as Shaktinagar,
Dist. Sonebhadra, UP). Primitive mining was reported even before 1857. In those days
coal was transported by bullock carts and camel to Mirzapur for use in steamers on the
Ganges. In the outcrop region of Kota seam near Kota Basti – Shaktinagar, where mining
was being done through inclines and subsequently there was fire in the incline. A temple
has been built near that site with the name of ‘Jwalamukhi’ (the name probably derived
from the fire emanating from the incline mouth). Due to poor quality of coal as well as
poor communication the coal from this coalfield could not compete in the market with
good quality coal
available from
Bihar and Bengal
coalfields with
better
communication and
transport facilities
and hence mining
activities ceased
very quickly.
Subsequently this
coalfield was
surveyed and
explored by various
Geologists namely
Smith (1857), Mellet (1872), Roberts (1885), Oldham (1894), Sinor (1923), and Fax
(1934) etc. GeologistsF. Ahmed mapped the area in details in (1948-1953) and
recommended detailed drilling and investigations. In pursuance of this, GSI took up
regional drilling in northern part of the coalfields in 1958. As a sequel to these
investigations by GSI thick coal seams containing inferior grade coal were discovered.
Erstwhile NCDC (in association with GSI and IBM carried out detailed drilling after
1958.
The first major industrial activity was started in this area with the construction of Rihand
Dam in 1954 for tapping hydel power. It was beyond the imagination of anybody to
foresee at that point of time that this hydel project, which resulted in converting an area of
about 487 sq. Km. into Govind Ballabh Pant Sagar (with a water capacity of about 10.44

cu. Km) will come handy in developing a network of Thermal and Super Thermal Power
Plants, thus bestowing upon this most neglected area, the honour of becoming country’s
power capital.
With the increase in
demand of coal and
also with an
objective to conserve
the better quality
coal in terms of
CoalmMines
(Conservation &
Safety) Act, 1952
and rules 1954, the
development &
exploitation of
outlying coalfields
gained importance
since 2nd
plan period
(1956-61). NDNC was formed in 1956 with one of the objectives to develop outlying
coalfields. Systematic coal mining was first started in 1964 by erstwhile NCDC. The
coalfield was under command area of NCDC from 1962-73, under CMAL upto 1975 and
then under CCL from 1975-85. In November 1985 the area became Northern Coalfields
Limited with Headquarters at Singrauli. Since then this coalfield has witnessed
tremendous growth and has now developed in as one of the largest coal power complexes
of the world.
3.4 Different Departments of the organization
Materials Management
Sales and Quality Control
Industrial Engeneering Department
Personnel Department
Finance Department
Project & planning

23 | P a g e
UPRVUNL
21.90%
RRUVNL
2.83%
IPGCL
2.98% HPGCL
1.75%
RPD
4.26%
Hindalco(Co. Gen.)
0.37%
Kanoria
0.41%
Consumer Profile (2009
NTPC : National Thermal Power Corporation Ltd.
UPRVUNL : Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited
RRUVNL : Rajasthan Rajya Vidyut Utpadan Nigam Limited
IPGCL : Indraprasth Power Generation Company Ltd.
HPGCL : Haryana Power Generation Corporation Ltd.
RPD : Reliance Power
Hindalco: Hindustan Aluminium Company Ltd.
Kanoria Industries Ltd.
S h r a w a n K u m a r D w i v e d i
NTPC
61.58%
Hindalco(Co. Gen.)
Aluminum
0.40% Others
3.52%
Consumer Profile (2009-10)
Sector Coal Supplied (MT)
Power 61.714
Aluminium 0.256
Other 2.260
Figure 3.1
NTPC : National Thermal Power Corporation Ltd.
UPRVUNL : Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited
RRUVNL : Rajasthan Rajya Vidyut Utpadan Nigam Limited
Generation Company Ltd.
HPGCL : Haryana Power Generation Corporation Ltd.
Hindalco: Hindustan Aluminium Company Ltd.
ANALYSIS OF NORTHERN COALFIELDS LIMITED
NTPC
UPRVUNL
RRUVNL
IPGCL
HPGCL
RPD
Hindalco(Co. Gen.)
Kanoria
Aluminum
Others
Coal Supplied (MT) % Share
96.08%
0.40%
3.52%

3.5 Organizational Structure
Management Profile
Board of Directors
Mr. Vinay Kumar Singh
Chairman Cum Managing Director
FUNCTIONAL DIRECTORS
Ms. Shantilata Sahoo
Director ( Personnel)
Shri Niranjan Das
Director (Technical)
Project & Planning
Shri O. P. Mishra
Director (Technical)
Operations
Shri S. K. Rawat
Director (Finance)
PART TIME OFFICIAL DIRECTOR
Shri Kailash Pati
Economic Advisor, Ministry of Coal
Dr. A. K. Sarkar
Director (Marketing), CIL

25 | P a g e
PART TIME NON
Mr.J.N.L. Shrivastava Mr.V.K. Bhalla
Mr. P. Parvathisem
Shri Chandan Roy
Company Secretary : Mr. D.H. Lalwani
PART TIME NON-OFFICIAL DIRECTORS
Mr.V.K. Bhalla Mr. B.N. Pan
Dr. B. B. Goel
PERMANENT INVITEES
Shri R. S. Pandey Shri M. K. Roy
: Mr. D.H. Lalwani
Shri M. K. Roy

26 | P a g e
Subsidiary Companies of Coal India Limited
Projects Under Northern Coalfields Ltd.
Jhingurda Kakri
Amlori Bina
Projects Under Northern Coalfields Ltd.
Northern
Coalfields
Limited,
Singrauli
Block B Dudhichua Jayant
Khadia Krishnashila
Nigahi

3.6 Current status of the organization
NCL – At a Glance
Explored area of the Moher Basin of Singrauli Coalfields is about 210 Sq. Km.
Presently the coal mining activities are done over an area of about 100 Sq. Km.
At present NCL produces only power grade coal through 10 nos. mechanised opencast mines
located in M.P. (about 81% of Prod.) and U.P. State (about 19% of Prod.)
Since incption, NCL has shown overall growth in all spheres.
Coal production increased from 13.4 MT (1986-87) to 63.65 MT (2008-09).
Overburden removal increased from 42.4 M. CuM. (1986-87) to 202.75 M.CuM. (2008-09).
The profit (Before tax) of NCL grown from Rs. 74.70 Crores (1986-87) to Rs. 3131.01 crores
(2008-09).
NCL is presently the highest profit earning company of CIL.
In NCL there is:
• A Central Fire Station
• A Central workshop besides workshops in each project
• A Central Hospital (150 beds) besides 10 dispensaries and 2 other hospitals
• Total Employees as on 30th
Nov.’09 are 16261 (1305 officers and 14956 staff/workman)
Cordial relations between trade unions and management
Coal Resources in Northern Coalfields Limited
Category wise, Depth wise and state wise Geological Reserves of Non Coking Coal in Singrauli
Coalfields
Depth Proved Indicated Inferred Total
*** *** MP *** ***
0-300 4251 2660 1040 7951
300-600 115 3313 993 4421
600-1200 0 40 4 44
Sub Total MP 5366 6013 2037 12417
*** *** UP *** ***
0-300 866 196 0 1062
Total 6232 6209 2037 13478
Table No. 3.2
Special Features of NCL
Mining Operations
Fully mechanised Opencast mines.
Largest Electric Rope Shovel 20 CuM.
Largest Dragline 24/96 (24 Cum. Bucket)
Largest Rear Dumper 170T

28 | P a g e
Consumers’ Satisfaction
Supply of sized coal through CHP
Electronically Weighed Coal Supplies
Despatch through Merry-Go
Other Specialties
All employee’s salaries and wages are paid through Bank.
Payment to all vendors through cheque with Bank name & Account Number
Literacy of workforce, Free LPG to Employees, School Bus for Children,
Supply of Drinking water
Housing Satisfaction – 100%
Land oustees Employed in NCl 25.92% of total workman (Land ous
out of total workman 14956)
Spares and
other stores
12.18%
P.O.L.
10.57%
Power
5.14%
Repairs
6.76%
Explosives
4.43%
Others
5.17%
Admin. Exp.
4.16%
Cost of production (NCL)
Figure 3.2
Supply of sized coal through CHP – 97%
Electronically Weighed Coal Supplies – 100%
Go-Round Rail and Ropeway – 98%
All employee’s salaries and wages are paid through Bank.
to all vendors through cheque with Bank name & Account Number
Supply of Drinking water – 100 %
100%
Land oustees Employed in NCl 25.92% of total workman (Land ous
out of total workman 14956)
Wages
23.73%
OB outsourcing
15.92%
OBR Adj
0.72%
Int. & Dep.
11.22%
Spares and
other stores
Admin. Exp.
4.16%
Cost of production (NCL) - Segment wise
Share (2009-10
Wages
OB outsourcing
OBR Adj
Int. & Dep.
Spares and other stores
P.O.L.
Power
Repairs
Explosives
Others
Admin. Exp.
to all vendors through cheque with Bank name & Account Number
Land oustees Employed in NCl 25.92% of total workman (Land oustees 3878 Nos.
Segment wise
OB outsourcing
Int. & Dep.
Spares and other stores
Admin. Exp.

29 | P a g e
Comparison of the Production between NCL and Jayant Project (In Million Tonnes)
Year-wise Status of
Outstanding Dues
50
60
70
80
90
100
110
120
130
140
CroreRs.
Year-wise Status of Outstanding Dues
0
10
20
30
40
50
60
70
2004-05
2005-06
10
9.9
49.95
Figure 3.3
Figure 3.4
2004-05 2005-06 2006-07 2007-08
117.57 127.29 63.32 70.36
wise Status of Outstanding Dues
Jayant Project
NCL
06
2006-07
2007-08
2008-09
10.57 12.79
13.02
51.52 52.16
59.62 63.65
2008-09
89.6
wise Status of Outstanding Dues
Jayant Project
Jayant Project
NCL

International Standards
ISO 14000 Certification for Environmental Management System since 2001 and renewed
up to 2010.
ISO 9001:2000 Certification for Quality Management System since 11 May 2009 and
valid until 14 November 2010.
Efforts for certification of Integrated Management System complying ISO 14001:2004,
ISO 9001:2008, OHSAS 18001:2007 and SA 8000:2008 are being made and stage- 1
audit for the same is scheduled from 04.01.2010 by the Certification Body.
3.7 Future plans of the organization
After achieving profits and coal production more than the targeted value, NCL in collaboration
with UPRUVNL is planning to set up a 1000 megawatt coal-based power plant in Uttar Pradesh.
NCL is also planning to set up a power plant of 1000 megawatts in Madhya Pradesh with
Neyewali Lignite Corporation. NCL has already got the permission with the Directors of CIL.
Coal India Plans to raise Rs 4,500 cr by issue of fresh capital thru book-building route. Coal
India has equity base of Rs 6,316 crore is holding company of seven coal producers Aggregate
profit to top Rs 7,043 cr this year. Performance of the company is continuously improving
quantitatively and qualitatively. As a part of liberalization Process, the CIL is going for proposed
disinvestments through Initial Public Offer (IPO). In deregulated environment, market is the best
judge for performance and market discounts all past and future events, CIL is confident to get
high value quote in the secondary market.

3.8 Awards and achievements
Prestigious “ INDIRA GANDHI NATIONAL AWARD FOR EXCELLENCE” Given to
the BEST ENTERPRISES Amongst the Public Sector
NATIONAL SAFETY AWARDS ( By the Hon’ble President of India)
Four Awards of Excellence ( By the Hon’ble Prime Minister for Bina, Nigahi, Amlohri
And Jhingurda Projects.
National Award for promotion of Family Planning
Coal India Award of Excellence
For excellence in pollution Control – Indira Gandhi National Gold Award
Jawaharlal Nehru Memorial National Award
Dadabhai Naoroji International Millennium Award
Teri National Award for Environment
Rajbhasha Shri Award
Best Chief Executive Gold Award by WHAT HAILS PUBLIC SECTOR TODAY
Bharat Gaurav Award by India International Friendship Society
9th Gold Award in Metal & Mining Sector for outstanding achievement in Environment
Management by GREENTECH
SCOPE Meritorious award for environmental excellence & sustainable development –
Gold Plaque Certificate of Excellence in Corporate Performance awarded by CIL.

CHAPTER IV
DATA ANALYSIS

Northern Coalfields Limited, Jayant Project
Balance Sheet AS on 31st
March 2010-2009
PARTICULARS DETAILS AS AT 31ST
MARCH2010
(RS IN
LAKH)
DETAILS AS AT 31ST
MARCH2009
(RS IN
LAKH)
SOURCES OF FUND:
SHAREHOLDERS FUNDS:
Share capital
Share money pending allotment
Reserves & surplus
LOAN FUND:
Secured
Unsecured
Current Account with HQ
APPLICATION OF FUND:
A. Fixed Assets
Gross Block
Less: Depreciation
Net Block
B. Capital work-in-Progress
0.00
0.00
82105.48
92891.74
58620.37
34271.37
4170.97
82105.48
0.00
0.00
(27184.43)
54921.05
0.00
0.00
67025.47
82890.74
57996.99
24893.75
677.51
67025.47
0.00
0.00
(24918.57)
42106.90

C. Surveyed off Fixed Assets
Awaiting disposal
Investment
Current Assets , Loans &
Advances:
Debtors
Inventories
Cash & Bank Balances
Loans& Advances
Other current Assets
Cost of Removal of Over
Burden
Total Current Assets, Loans &
Advances
Less: Current Liabilities &
Provisions:
Net Current Assets
Misc. Expenditure
240.11
(594.18)
7594.33
36.32
600.58
3363.76
28934.76
39935.57
23696.97
38682.45
0.00
16238.60
0.00
54921.05
195.71
219.19
4994.18
0.14
607.01
632.60
31572.88
38026.00
21686.07
25766.97
0.00
16339.93
0.00
42106.90

NORTHERN COALFIELDS LIMITED: JAYANT PROJECT
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED
31ST
MARCH 2010-2009
PARTICULARS 31ST
MARCH 2010
(RS IN LAKHS)
31ST
MARCH2009
(RS IN LAKHS)
INCOME:
Sales
Coal issued for other purposes
Accretion/ Decretion in Stock
Workshop jobs for own purposes
Other income
EXPENDITURE:
Consumption of Stores & Spares
Employees Remuneration & Benefits
Social Overhead
Power & Fuel
Repairs
Contractual Expenses
Miscellaneous Expenses
Overburden Removal Adjustment –Existing Mines
Total Expenditure
GROSS OPERATING PROFIT/ LOSS
Interest
Financial/Commitment Charges
135235.59
0.00
2292.77
0.00
7511.49
145039.85
19900.27
13336.93
3459.46
3814.22
4090.72
7037.10
5471.05
2638.12
59747.87
85291.88
192.86
175.76
123719.15
0.00
854.39
0.00
4735.80
129309.34
20644.35
16093.00
3392.10
3903.61
5392.11
5819.95
6196.99
5709.57
55732.54
73576.80
324.94
312.29

Depreciation
Provisions
Write Off
PROFIT / LOSS FOR THE YEAR
Overburden Removal Adjust. For Closed Mines
Provision written Back
Prior Period Adjustment
Extra Ordinary Items
PROFIT / LOSS BEFORE TAXATION
Provision for income tax for earlier years
PROFIT AFTER TAX
Provision for Dividend on Preference Shares
Provision for proposed Dividend of Equity shares
Provision for income tax on proposed Dividend
Net profit After Tax & Proposed Dividend
Retained Profit After Trans. To Reserve
BALANCE CARRIED TO BALANCE SHEET
2856.35
111.87
0.00
81955.14
0.00
131.65
18.69
0.00
82105.48
0.00
82105.48
0.00
0.00
0.00
82105.48
82105.48
82105.48
5853.00
268.48
0.00
66818.09
0.00
29.04
163.59
0.00
67010.72
0.00
67010.72
0.00
0.00
0.00
67010.72
67010.72
67010.72

CALCULATION & INTERPRETATION OF RATIOS
1) CURRENT RATIO:
Meaning:
Current ratio may be defined as the relationship between current assets and
current liabilities. This ratio is also known as working capital ratio, is measure of
general liquidity and mostly used to make the analysis of a short-term financial
position or liquidity of a firm. The rule of thumb for current Ratio is 2:1 which is
considered as strong financial position of the company.
Current ratio = Current Assets
Current Liabilities
Calculation :
Year 2010 2009
Current
assets
39935.57 38026.00
Current
liabilities
23696.97 21686.07
Ratio 1.69:1 1.75:1
Interpretation:
In 2009 current ratio was 1.75 which is decreased to 1.69 in the year 2010. As
compared to last year Current Assets has increased because of increase in
Inventories, Cash and Bank balance and other Current Assets but Current Ratio
has decreased because of excess advance received from debtor , decrease in Cost
of Removal of over burden, and increase in current liability .
2) QUICK / ACID TEST/ LIQUID RATIO :
Meaning:
Quick ratio is more rigorous test of liquidity than the current ratio. The
term liquidity refers to the ability to pay its short term obligations as and when
they become due. As a rule of thumb quick ratio of 1:1 is considered
satisfactory.
Quick Ratio = Quick/ liquid Assets
Current liabilities

Calculation :
Year 2010 2009
Quick
assets
3406.48 1458.94
Current
liabilities
23696.97 21686.07
Quick ratio 0.14:1 0.07:1
Interpretation:
In 2009 quick ratio was 0.07 which has increased to 0.14 in 2010. Quick assets
has increased by 133% and Current liabilities has increased only by 9% Due to
which quick ratio has increased by 100%. The management has taken a great
effort in maintaining high quick assets as compared to last year.
3) STOCK TURN OVER OR INVENTORY TURN OVER RATIO :
Meaning :
Every firm has to maintain a certain amount of inventory of finished goods so as
to meet the requirement of business. But the level of inventory should neither be
too high nor too low. Because it is harmful to hold more inventory as amount of
capital is blocked in it and some cost is involved in it.
Inventory turn over ratio measure the speed with which stock is converted into
sales. Usually high inventory ratio indicates an efficient management of
inventory because more frequently stocks are sold ; the lesser amount of money
is required to finance the inventory. Where as low inventory turn over ratio
indicates the inefficient management of inventory. A low inventory turn over
implies over investment in inventories.
Inventory turn over ratio = Cost of good sold
Average inventory
Cost of goods sold = Opening Stock+ Purchase + Direct
Expenses - Closing Stock
Average inventory = Opening stock + Closing stock
2

Calculation :
Year 2010 2009
COGS 57147.72 50738.36
Avg.
inventory
6294.255 4994.18
Ratio 9.08 Times 10.16 Times
Interpretation: In 2009 inventory turn over ratio was 10.16 times which is
reduced to 9.08 times. Reduction of Inventory turn over ratio in 2010 may be due
to increase in cost of goods sold with increase in sales as compared to last year or
due to non availability of opening balance of inventory in the year 2009.
4) DEBTOR TURN OVER RATIO:
Meaning :
A concern may sell goods on cash as well as on credit. The volume of sales can
be increased by adopting liberal credit policy. But liberal credit policy may result
in tying up substantial funds of a firm in form of trade debtors. Trade debtors are
expected to be converted into cash within short period and are included in current
assets.
Debtors velocity indicates the number of times the debtors are turned over during
a year. Higher the value of debtor turnover the more efficient is the management
of debtors/sales and vice versa.
Debtor turnover ratio = Net credit sales
Average debtors
Average debtors = Opening Debtor + closing Debtor
2

Calculation :
NOTES: Debtor in the year 2010 is -594.18 because of excess advance
received from customer therefore debtor is considered nil.
Interpretation:
Debtor turn over ratio in the year 2009 is extremely high i.e 564 times . The ratio
is too high because the entire sale done by the project is according to the
agreement with customer. The debtor shown on the closing day of financial year
is not received by the customer because customer has time to pay his liability in
near future. So the project is not worried about the Bad debts.
5) GROSS PROFIT RATIO:
Meaning :
The gross profit ratio indicates the extent to which selling prices of goods per unit
may decline without resulting in losses on operations of a firm. It reflects the
efficiency with which a firm produces its products. Gross profit should be
adequate to cover the operating expenses and to provide for fixed charges,
dividends and accumulation of reserves.
Gross profit ratio = Gross profit * 100
Net Sales
Gross Profit = Sales- Cost of goods sold
Calculation :
Year 2010 2009
Sales 135235.59 123719.15
Debtor Nil 219.19
Ratio Nil 564 Times

Year 2010 2009
Gross profit 78087.87 72980.79
Net sales 135235.59 123719.15
Ratio 58 % 59 %
Interpretation:
In the year 2009 gross profit ratio was 59 % which is decreased to 58% in the
year 2010. The project gross profit has increased with increase in sales as
compared to last year. The project gross profit ratio has decreased by 1% due to
increase in direct expenses. The company has sound position to meet its non-
operating expenses and also enough capable to pay taxes and royalty to the
government.
6) OPERATING RATIO:
Meaning :
Operating ratio establishes the relationship between cost of goods sold and other
operating expenses on the one hand and sales on the other hand. Operating ratio
indicates the percentage of net sales that is consumed by operating cost. Higher
the operating ratio is less favourable for the company because it would have
small margin to cover interest, income tax , dividend and reserve.
Operating ratio = Operating Cost*100
Net Sales
Calculation :
YEAR 2010 2009
Operating Cost 59747.87 55732.54
Net Sales 135235.59 123719.15
Ratio 44.18% 45.05%
Interpretation:

In the year 2009 operating ratio was 45.05% which is reduced to 44.18% in the
year 2010. Reduction in operating ratio will contribute more to net profit .
Reduction in operating ratio may be possible due to reduction in cost per tones.
7) NET PROFIT RATIO:
Meaning:
Net profit ratio establishes a relationship between net profit after tax and sales
and indicate the efficiency of the management in controlling the expenses of the
company.
Net profit ratio = Net profit after tax *100
Net sales
Calculation :
Year 2010 2009
Net profit 82105.48 67010.72
Net sales 135235.59 123719.15
Ratio 60.71% 54.16%
Interpretation:
The net profit of the company has been increased by 6.55% as compared to last
year. In 2009 project net profit was 54.16% which increased to 60.71% in 2010.
Net profit of the project has been increased due to increase in sales/ production,
reduction in cost per tonnes, and better control on operating expenses. The net
profit of the project reveals sound business of the project and strong financial
position.

8) WORKING CAPITAL TURNOVER RATIO:
Meaning:
Working capital turnover ratio indicates the velocity of the utilization of net
working capital. This ratio indicates the number of times the working capital is
turned over in the course of a year. This ratio measures the efficiency with
which the working capital is being used by a firm. A higher ratio indicates
efficient utilization of working and low ratio indicates otherwise. But a very
high working capital turnover ratio is not a good situation for any firm and must
be taken while interpreting the ratio.
Working Capital Turnover Ratio = Cost of Sales
Net working capital
Calculation :
YEAR 2010 2009
COGS* 57147.72 50738.36
WORKING CAP. 16238.6 16339.93
RATIO 3.52 times 3.11imes
*COGS :- Cost of Goods Sold
Interpretation: In the year 2009 ratio was 3.11 times which is increased to
3.52 times in the year 2010. As compared to last year working capital has been
utilized very efficitently. In 2010, the reciprocal of this ratio( 1/3.52=0.284)
shows that for sales of RS 1 company requires 28 paisa as working capital.
This ratio is very helpful to forecast the working capital requirement on the
basis of sales.

9) CREDITOR TURNOVER RATIO:
Meaning: In the course of business operations, a firm has to make
credit purchases and incur short-term liabilities. A supplier of goods i.e,
creditors is always interested to know how much time the firm is likely
to take in repaying its trade creditors. It shows the speed at which
payments are made to the supplier for purchase made from them. It is a
relation between net credit purchase and average creditors. Higher
creditor turnover ratio or lower credit period enjoyed signifies that the
creditors are being paid promptly.
Creditors turnover ratio = Net Credit Purchases
Average creditors
Average creditors = opening creditors + closing creditors
2
Calculation :
YEAR 2010 2009
CREDIT
PURCHASE
38301.77 39152.12
AVG.
CREDITORS
22691.52 21686.07
RATIO 1.69 times 1.81times
Credit purchase include consumption of stores and spares, social overhead,
power & fuel, repairs& contractual expenses.
Interpretation :
A high creditors turnover ratio indicates that creditors not paid in time while a
low ratio gives an idea that the business is not taking full advantages of credit
period allowed by the creditors. Since creditors turnover ratio has decreased
from 1.81 times to 1.69 times which represents that creditors are paid in time.
It’s a good sign for the company.

Payment to Central/ State Exchequer
(Rs. In Crores)
Particulars 2006 – 07 2007-08 2008-09
MP UP Total MP UP Total MP UP Total
Royalty 385.94 110.90 496.84 504.40 115.17 619.57 645.17 93.40 738.57
Central &
State Sales
Tax 113.23 84.32 197.55 86.51 92.02 178.53 103.69 97.72 201.41
Sales Tax
on works
and scraps 2.94 1.44 4.38 2.56 1.27 3.83 2.03 1.81 3.84
Entry Tax 5.60 1.50 7.10 6.86 - 6.86 5.19 0.08 5.27
Stowing
Excise Duty 41.86 10.86 52.72 47.70 10.90 58.60 48.76 12.11 60.87
SSDA Cess - 5.84 5.84 - 6.61 6.61 - 9.29 9.29
Property
Tax - - - 3.77 - 3.77 0.07 - 0.07
Forest Cess 16.09 - 16.09 2.63 - 2.63 36.80 - 36.80
Professional
Tax 2.16 - 2.16 2.29 - 2.29 2.21 - 2.21
TOTAL 490.11 265.99 756.10 656.72 225.97 882.69 843.93 214.41 1058.33
Table No. 3.3
The above chart shows the detailed Statement of the payment of the taxes to the Madhya Pradesh
Government and Uttar Pradesh Government. The Coal belt of the NCL is situated in two states M.P. and
U.P. so the NCL pay taxes to both government acoordingly.

CHAPTER V
SUMMARY AND
CONCLUSION

5.1 Major Findings & Suggestions
I came across following suggestions and findings during undergoing the project work on topic
“FINANCIAL ANALYSIS OF NORTHERN COALFIELDS LIMITED”.
1. In NCL the coordination among the various sections of the Finance & Accounts
department is very nice, as the Finance & Accounts department is a big department
consisting of near about 32 sections. It is the work force of the Finance & Accounts
department, which makes it possible.
2. In the NCL there not to create debtors they generally deal with first to receive the cash
or cheque, and then they supply the finished material.
3. In the NCL there working capital management is very good, they use the IBS (ERP
system) to manage the over all activity.
4. During the study I find that their is no huge variation in budget decided and the actual
one.
5. The taxation policy is to be made flexible because of which bulkiness of the work is to
be removed.
6. The tendering process time is to be minimized so that the current market price benefits
if any can be availed.
7. Monthly return filling is not on line process, hence sales and excise department face
problem.
8. Online inventory valuation can be implemented.
9. The departmental policies is to made flexible which leads to decrease in the work flow
process as well as it leads in better profits.
10. Some The staff members of the NCL are lack of the Computer knowledge. During my
internship I observed that the employees don’t have the necessary training to do the
job efficiently and properly. So I think the management should arrange special
training for educating them. Proper distribution of work leads to success in every
organization. Proper distribution of work prevents the employee from over and under
work situation. So for a smooth running of an organization proper distribution of work
is the hint to be followed. During my internship I observed that there was no proper
distribution of work in the organization. So ln this case the organization would not be
able to utilize their energy. So their should be proper distribution of work

5.2 Conclusion
After analyzing the different Ratios of the Northern Coalfields Limited I found that the Company is
really in Good financial condition because the management has taken a great effort in managing the funds
like acquiring and allocation of the funds, optimum utilization of the available resources.The analysis
shows that the profitability of the company is increases as compared to the last years due to high
production and sells with lesser expenses. The organization is in sound position which is good for the
company, stakeholders as well as the Country also.Good financial position not just beneficial for the
company stake holders but it helps to improves the GDP as well as the per capita income of the entire
country.
As compared to the last year Current ratio is decreased due to increase in Inventories, Cash and Bank
balance and other Current Assets. If we talk about the Quick Ratio then In 2009 it was 0.07 which has
increased to 0.14 in 2010. The management has taken a great effort in maintaining high quick assets as
compared to last year. The company has sound position to meet its non-operating expenses and also
enough capable to pay taxes and royalty to the government. The net profit of the company has been
increased by 6.55% as compared to last year. Net profit of the project has been increased due to increase
in sales/ production, reduction in cost per tonnes, and better control on operating expenses. The net profit
of the project reveals sound business of the project and strong financial position.
It is currently in good financial condition and it is continuously trying to implement new tools and
techniques to improve its productivity as well as profitability.

REFERENCE
SECTION

BIBLIOGRAPHY:
1. Published books:
Ajoy K Ghose, Mining, Challenges of the 21st
century, 2000
International Energy Agency Coal in the energy supply of India,2002
C.R. Kothari, Research methodology-methods and techniques, New Age
International Publishers, New Delhi 1985, second edition.
Text book of coal (indian context) first edition (2000) by D. Chandra, R.M.
Singh & M.P. Singh
Anubhuti Ranjan Prasad, Coal nIndustry of India, 1986
Ashish Publishing House
2. Journals/Periodical::
KHANIJ URJA, Volume No. 48, September 2009
KHANIJ URJA, Volume No. 52, January 2010
NCL DIARY, Published by the organization every year
Online Published material on the world wide web:
URL : http://www.coalindia.nic.in
June 05, 2010
URL : http://www.ncl.nic.in
June 05, 2010
URL : http://www.wikipedia.nic.in
June 07, 2010
URL : http://www.geologydata.info
July 15, 2010
URL : http://books.google.co.in
July 15, 2010

Thanks a lot for going through my project.
Feel free to Contact me anytime for further queries and any help regarding this project
or any other topic related to the Finance.
All the best for your bright future. And one thing always keep in mind that smart work
always pays, so work smartly.
Thanks & Regards,
Shrawan Kumar Dwivedi
+91 81791 30135
+91 88855 11105
shrawan.sibar@gmail.com
shrawan.dwivedi@live.com
Facebook:
http://www.facebook.com/#!/shrawan.dwivedi

Ratio analysis of NCL by Shrawan Dwivedi

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