WCM of Hisar Project

The IUP Journal of Infrastructure, Vol. IX, No. 2, 2011 44 2011 IUP. All Rights Reserved.
* Sr. Lecturer (Finance), Amity Business School, Noida 201301, UP, India. E-mail: asrivastava5@amity.edu
Anubha Srivastava*
A Study of Working Capital Management
of Hisar Project: Reliance Infrastructure
Limited, India
Introduction
Infrastructure industry is growing at a fast pace in almost all sectors with the development
and urbanization in the economy. The Indian government is also taking initiatives to develop
the infrastructure sector. The construction industry in India has reported an estimated growth
of 6.78% in the year 2006. According to a survey report,
1
The industry in India is highly
fragmented and has about 300,000 construction companies operating nationwide. The
government has allowed 100% foreign equity in the construction industry. Among the major
infrastructure projects are the $7-8 bn India-Iran gas pipeline, the $2.8 bn construction of
two power plants, and the $2.3 bn power project in Tamil Nadu.
Reliance Infrastructures Limited
Reliance Infrastructure Ltd. is not only Indias largest private sector enterprise in power utility
but also the largest private sector player in many other infrastructure sectors. In the power
1
http://business.mapsofindia.com
This case focuses on various facets of working capital management at RIL
at its Engineering, Procurement and Construction (EPC) division, which
mainly deals in power projects. Financial analysis of the company has also
been carried out to know its creditworthiness. Working capital
management involves not only managing the different components of the
current assets, but also managing the current liabilities, or to be more
precise, financing the current assets. There are three main areas in working
capital management and the study focuses on receivables management,
cash management, and inventory management. RIL manages its receivable
accounts through ageing analysis and manages its cash through
management information system. Inventory management is made easier
through the process of high sea sales and sale in transit. An analysis with
respect to the companys competitors is done on a few fronts to further
understand its position in the market.
A Study of Working Capital Management of Hisar Project:
Reliance Infrastructure Limited, India
45
sector they are involved in generation, transmission, distribution and trading of electricity
and constructing power plants as Engineering, Procurement and Construction (EPC) partners.
Reliance Infrastructure distributes more than 28 billion units of electricity to cover 25 million
consumers across different parts of the country including Mumbai and Delhi in an area that
spans over 1,24,300 sq km. Reliance infrastructure also emerging as one of the leading players
in India in the EPC segment of the power sector with an order book of 8,300 cr, having
executed projects worth 10,000 cr in the past four years. They are also executing the first
100% private sector power transmission project for western grid with an investment worth
2,250 cr. Reliance Infrastructure has significant presence in the field of execution of the
power projects on EPC basis with a strong track record of the execution and commissioning
of projects on time. Most of its projects have been executed by Reliance Energy through
its EPC division.
Engineering, Procurement and Construction (EPC) Division
2
The EPC division of Reliance Infrastructure was setup in 1966 and was undertaking EPC
contracts on a turnkey basis and other value added services for major public and private sector
projects both in India and abroad. The division has 10 regional offices in major cities of India
and Overseas offices in Dubai, Nepal and Bhutan.
The range of projects include:
Thermal, hydro, co-generation and gas-based power generating stations;
400/132 kV transmission lines and switch yards;
Overhead and underground electrical networks;
Industrial electrification works for petrochemicals, fertilizers, steel, cement plants,
refineries, ports and hotels;
Indoor and outdoor illumination works; and
Pre-moulded accessories for extra high voltage electrical cables.
Future Opportunities/Prospects
This company is the largest private sector distributor with 6.5 mn customers because of its
huge power distribution asset in Delhi , Mumbai and Orissa. During last six years it has
made an investment of 32 bn in distribution infrastructure. The companys Mumbai
distribution assets are the most efficient with less than 11% Aggregate Technical and
Commercial losses (AT&C) as compared to Indias average of 35%. There has been also
reduction in AT&C losses for its Delhi distribution circle from 55% to 20% during the period
of six years i.e., from FY02 to FY08. With increasing demand for privatization of power
distribution operation by more and more states making this sector more lucrative and
attractive and has opened and created huge space for this company. The company has total
generating capacity of 940 mw and is looking to stretch it further. The company is executing
three projects worth of 40 bn , which is expected to generate 15% return.
2
http://www.rinfra.com and http://indianpowersector.com
The IUP Journal of Infrastructure, Vol. IX, No. 2, 2011 46
Nature of the Problem
Historically, infrastructures companies have managed with very little capital. The infrastructure
sector is not capital intensive but working capital intensive. According to Dagar (2008),
3
After all, there is a ready market of infrastructure users who have time and again
demonstrated their willingness to pay; the private sectors capacity to fund and execute
projects is hardly in doubt and even the government, at the highest level, believes
infrastructure is the mantra for double digit growth. Indian infrastructure sector does not
require huge capex to set up manufacturing plants rather it requires a lot of free cash flows
to run the projects e.g., one can implement 1,000 cr project with the net worth of
25 cr only. Therefore, the size of project a company can bid for is determined by its net
worth because working capital can be borrowed against the net worth of the company.
RIL being a working capital intensive company requires knowing the effect of its current
methods. The company made a team to study the working capital management and to conduct
a financial analysis of RIL. The aim is to learn how to manage working capital needs of
the organization and to learn the different ways through which theoretical learning is applied
practically in the organization. The project is aimed to learn and gain knowledge of the
day-to-day working of the organization as to how does the different decision are taken and
on what basis. The project will help in gaining the knowledge of different steps of raising
the short term funds and their effective management so as to ensure adequate availability
of funds. The various analyses will help the management to assess the efficiency of the
working capital management of the company.
Objectives
To study and analyze working capital management at Reliance Infrastructure Ltd.;
Inventory management
Receivable management
Cash management
To study one of the undergoing projects; and
To suggest some recommendations related to working capital management.
Hisar EPC Project
Reliance Infrastructure bagged a contract from Haryana Power Generation Company Limited
(HPGCL) to set up 2*600 MW thermal power plants at Hisar on EPC basis for 4,000 cr
(approximately). The completion schedule is 33 months and 36 months for unit 1 and
unit 2, respectively, from the date of the notice to proceed i.e., from January 29, 2007 (Exhibit 1).
The completion of Hisar Thermal Power Plant project within 27 months shall be a major
milestone in Indias power history. The company has tied up with Shanghai Electric
Corporation (SEC) of China for supply and erection supervision of main power plant
equipments i.e., boiler, turbine, and generator and their auxiliaries and station control and
3
Dagar Shalini S (2008), Business Today, September 21, Vol. 17, No. 19, pp. 146-150, 3 p, 7 Color Photographs, 1 Chart.
47
instrumentation (Exhibit 2). The engineering partners for the projects would be Black & Veatch
and DCPL of Kolkata.
Exhibit 1: Rajiv Gandhi Thermal Power Plant, Hisar, Haryana
Parties to the Contract
Owner : HPGCL
Contractor : Reliance Infrastructure Ltd.
Capacity : 2*600 MW
Letter of Intent: HPGCL confirmed the contractor, Reliance Infrastructure Ltd. about the
acceptance of its bid proposal for a lump sum price of 4,000 cr (approx).
The price shall remain firm during the contract period and would be inclusive of
all taxes, duties, levies, freight, insurance, etc.
The commissioning schedule shall be:
Unit 1-33 months.
Unit 2-36 months from the date of issue of letter of intent.
Contract Performance Guarantee
Bank guarantee 10% for timely completion and faithful performance.
Equipment performance guarantee should be given for trouble free performance
for the period of 12 months.
Ocean Transportation
Contractor shall be responsible for the transport of the plant and equipment from the place of
origin to the port of destination (cost such as packaging and the like) shall be at the contractors
expense.
Contract Price Adjustment
The contract price shall be subject to price adjustment during performance of the
contract to reflect changes in the cost of labor and material equipment, etc.
In case of shipments which are delayed beyond the schedule date for the reason
attributable to the contractors, the price adjustment provision shall not be applicable
for the period of time.
The contractor shall be required to arrange and bear the charges which he has to
lawfully obtain as a EPC contractor. Owner shall bear the charges which he has to
lawfully obtain as a promoter of coal fired thermal power project.
Effect and Jurisdiction
In the event of the delayed release of advance payment within the stipulated time even after
the contractor has performed its entire obligation. The date of actual release will be considered
as an effective date of contract.
Contract Price
The price quoted by the contractor in his bid proposal with addition and deletion as given in
the supplementary price by bid proposal and incorporated in the letter of intent for the entire
scope of work shall be treated as the contract price.
Exhibit 1 (Cont.)
Liquidated Damage
The contractor shall pay to the owner liquidate damage for the delayed period @ 0.25% of
total contract price per week of delay or part thereof for a period of four weeks delay
subsequently @ 0.5% of total amount of liquidated damage for the delay, subject to a maximum
ceiling of 10% of total contract price.
Payment Schedule or Cash Flow Schedule
Any payment under the contract shall be made only after the contractors price breakup is
approved by the owner or engineer.
Training of Owners Personnel
The contractor shall undertake to train at site engineering personnel selected by the
owner. Total period shall not be less than 36 man months at manufacturers work and
facilities.
To and fro rail, road or air fare of trainees between the place of posting and the place
of training, shall be borne by the owner. The contractor shall provide the training
equipment.
Exhibit 2: Terms of Operation Between Reliance Infrastructure Ltd. and Shanghai
Electric (Group) Corporation and Shanghai Electric Group Co. Limited
Parties To The Contract
Owner : HPGCL.
Purchaser : Reliance Infrastructure Ltd.
Contractor : Shanghai Electric (Group) Corporation and Shanghai Electric Group
Company.
Completion of construction of the facility and the project in the manner as specified
in the contract 4
The contractor is required to supply the entire equipment as mentioned as per contract
price.
The contractor Shanghai Limited will be entitled to the lump sum of $325.5 mn.
First contract providing equipments Shanghai Electric Group Corporation.
Second contract providing engineering consultancy for BTG Shanghai Electric (Group)
Company Limited.
Payment Structure for Equipment
5% of contract price as first initial advance.
5% of contract price as second initial advance.
First-stage payment 65% of the material price for individual package.
Second-stage payment 5% of the material price for individual package.
Third-stage payment 10% of the material price for individual package.
Fourth-stage payment 10% of the contract price shall be paid on final taking over
certificate for the plant.
49
Mode of Payment: Telegraphic transfer/swift upon within 10 days of submission of invoice.
Delay of Supply: Contractor shall be liable to pay liquidity damage of 0.3% per week. The total
amount should not exceed maximum of 10% of contract price.
Shortfall in Guaranteed Performance
Less than or up to 15% work will be accepted after imposing the liquidity damage.
Greater than 15% necessary modification should be made to comply with
guaranteed requirement.
Spares Specification
Supply equipment for 5 years.
Provide a schedule of recommended spare parts.
The price of spare parts shall remain valid for 12 months from the date of issue of letter
of intent.
Spare parts required in addition to the specification should be submitted by the
contractor within 30 days.
The contractor shall ensure the long-term availability of spares covered under the
contract.
In case of emergency the contractor shall make every effort to deliver such spares on
mutually agreed time schedule.
The price of all future requirements beyond five years shall be derived from the
corresponding price escalation formula to be furnished by the contractor.
Training of Purchasers Personnel
Total period shall not be less than 24 months at manufacturers place.
The contractor shall provide training equipment during the training period.
Commutation shall be borne by the purchaser.
The contractor shall train purchasers personnel free of cost.
Types of Bank Guarantee
Bank guarantee should be issued from the first class Chinese bank.
Advance Payment Bank Guarantee (ABG) 10% of contract price issued from first class
international bank.
Contract Performance Bank Guarantee (CPBG) 2.5% of contract price for timely
completion and the faithful performance of the contract.
Equipment Performance Bank Guarantee (EPBG) 2.5% valid for a period of 15 months.
Supervision
Contractor shall supervise the work and give technical advice and suggestion on the
quality of work required during this period.
Contractor should employ skilled technical personnel for the work.
Permits and License: Contractor shall be liable for arranging all permits and license to be
obtained for filing the organization.
Progress Report: Contractor shall at his own expense submit the periodic report as and when
required.
Exhibit 2 (Cont.)
Working Conditions and Facilities to be Provided by Reliance Infrastructure Ltd.
Purchaser shall free of charge provide contractor technical personnel, an erection
team of steel turbine and generator accommodation and other necessary facilities
including but not limited suitable furnished bedroom, toilet, and air conditioned
working office, safety ware, necessary working tools, vehicles for transportation,
from supervisor's residence to the site.
The contractor shall during the contract period dispatch at his own cost healthy
and skilled technical personnel for supervision of the erection in accordance with
the supervision schedule.
The total supervision plan for man month will be 300 man months based on
8 h per day on six days per week basis.
The purchaser shall pay the contractor a fixed lump sum which will include ocean
freight to the port of entry into the Indian port. All other payment under this
contract should be paid through an irrevocable letter of credit payable at site.
Entire payment should be made through 10 days of submission of employees.
Erection Condition: On-Site Agreement
Owners Lien on Equipment: The owner shall have lien on all equipments brought
to the site for the purpose of creation, testing and commissioning of the plant
till final acceptance and handing over.
Access to Site and Work on Site: In the execution of work, no person other than
the contractors representative, subcontractor and workmen shall be allowed access
to work except by the special permission in writing of the engineer or his
representative.
Contractors Field Operation: The contractor shall keep the engineer informed in
advance regarding his field activity plans and schedule for carrying out each part
of the work.
Facilities to be Provided by the Owner
The following works and services shall be provided by the owner at no cost to the
contractor:
Space and Electricity: The contractor shall make its own arrangement for
construction power and further distribution arrangement.
Medical Facilities: The owners medical facilities available at site will be
extended for the contractor only if and when available.
Employment of Labor: The contractor shall employ for the work only his regular
skilled employees.
Fuel: The fuel required for start up on trial run will be arranged by the owner.
51
Facilities to be Provided by the Contractor
General Aspect: Cleaning and unloading of the equipments from the rail or
road transport shall be at the contractors area and charges incurred for default
of the contractor shall be paid by him.
Owners will not provide any accommodation to the contractors supervisor,
engineer or labor.
Tools Tackles and Scaff Holdings: The contractor shall provide at his own
expense, all the construction equipment, erection tools, machine tools and all
associated protection equipment and appliance required for accomplishing
work under the contract.
Pre-Commissioning Activities and Trial Operation: This will be the
responsibility of the contractor. The contractor shall provide, in addition, test
instrument, calibration device, etc., for successful performance.
Transportation: The contractor will have to at his own risk and expense transport
all plant and equipment to the site by suitable mode of transport.
Custom Clearance: The contractor shall at its own expense handle all
formalities for custom clearance, including liability of port charges.
Progressive Payment Site Work
All progressive payment for construction and erection work shall be based on
milestone progress achieved.
In case where contract provides for tests whether at the premises or works of
the contractor or any subcontractor, except where otherwise specified, shall
provide free of charge items such as labor, material, electricity, fuel, water,
stores apparatus and instruments which may be reasonably demanded by the
inspector to carry out effectively such test on equipment.
The contractor shall demonstrate all guarantees covered herein during guarantee/
acceptance test at site in the presence of the owner, all cost should be included
in the bid price. In case of failure of performance guarantee test, the contractor
will replace/modify at no extra cost to the owner.
Receivables Management: Reliance Infrastructure uses debtors aging schedule method for
monitoring receivables, i.e., the time within which the credit sales are converted into cash.
Ageing schedule is one of the effective tool in the hands of finance division to get a feel
of the ongoing receivables that has been not realized from its customers. They expect to
realize their receivables within that stipulated period but many a time it does not happen.
This gets possible on account of several reasons:
Bill Break Up (BBU) not being approved by the customer.
Dispatch letter not enclosed.
There are some prerequisites for the sale of goods, which are:
Ownership of goods should be transferred (ownership should be transferred before
the goods reach the site through endorsement of LR).
Rates must be approved. But at times we raise invoices to our customers as a
pressure building tool in spite of BBU not being approved.
Credit Policy: REL has a credit policy of 30 days from the date of invoicing. An invoice
exceeding 30 days becomes due, beyond 60 days requires managerial attention, and beyond
90 days is an alarming situation for the organization. Hence, ageing analysis comes into
effect. This brings the need for management to gear up for the recoverable amount. Reliance
Infrastructure follows a lenient credit policy in Hisar project as it is dealing with a government
body and thus has to endure various said formalities before the invoice gets rewarded.
It has all terms and conditions predefined with HPGCL and so, there is very little possibility
of invoice not getting paid. Management is assured that no matter a few invoices get delayed
but will be received after the required formalities (such as BBU not approved) are fulfilled.
Process of Receivables Management
Obtain the aging of all the Debtor;
Review of contractual norms with the debtors for the payment schedule;
Identify the overdue payments;
Obtain the reasons for the overdue and the follow up actions taken;
Recovery mechanism followed;
Recognition of bad debts; and
Review the difference arising out of escalation and negotiation.
Cash Management: It can be seen from the cash flow statement of Hisar project that net
cash inflow is in the negative (Table 1). This means that the payment from the client side
and payment to the vendors is not back to back. RIL is paying to its vendors but not getting
all payment obligations fulfilled from its client.
Work Breakdown Structure: For the purpose of simplifying the process of maintaining
accounts, the entire project has been divided into various WBS elements. WBS is a
hierarchical tree structure for defining and organizing the total scope of the structure.
The first two levels of the WBS (the root node and Level 2) define a set of planned outcomes
that collectively and exclusively represent 100% of the project scope. At each subsequent
level, the children of a parent node collectively and exclusively represent 100% of the scope
of their parent node. A well-designed WBS describes planned outcomes instead of planned
actions. Outcomes are the desired ends of the project, and can be predicted accurately; actions
comprise the project plan and may be difficult to predict accurately.
4
Hisar Thermal Power
Plant project has been divided into the following WBS elements:
4
http://www.websters-online-dictionary.org
53
Table 1: Cash Flow Statement of Hisar Project
Cash Inflow
Opening Balance 234.86
1. 1
st
5% Advance Receipt from HPGCL
(a) Against Supply Order Indigenous 75.18 75.18
(b) Against Supply Order Offshore 61.11 61.11
(c) Civil and Str. Steel and ETC 34.78 34.78
Total 171.07 171.07
2. 2
nd
5% Advance Receipt from HPGCL
(a) Against Supply Order Indigenous 75.18 75.18
(b) Against Supply Order Offshore 58.68 58.68
(c) Civil and Str. Steel and ETC 34.78 34.78
Total 168.64 168.64
3. Receipt Against RA Bill 1,002.75 135.27 1,138.02
4. Others 0.14 32.14 32.28
Total Inflow 1,342.60 1,342.60
Less: TDS
Less: WCT
Net Inflow (A) 1,342.60 167.41 1,510.01
Cash Outflow
1. Advances Given
(a) REL Contractors 81.08 0.03 81.11
(b) As Security Deposits 5.09 5.09
2. Payment for Material
(a) Imported 652.10 14.86 666.96
(b) Indigenous 508.38 68.54 576.92
3. Payment to Contractors 278.80 46.31 325.11
4. Corporate Ohs. Including Salaries
and Wages and Bonus
5. Staff Welfare Expenses 0.04 0.04
6. Insurance 0 0
7. Rent 1.30 0.08 1.38
8. Repairs and Maintenance 0.59 0.05 0.64
Description
March 3,
2009 to April
30, 2009
Till Feb.
2009
Total

MECH Mechanical
ELEC Electrical
C&IN Consulting
SEFS Site Enabling Facilities
ENGG Engineering
OVHD Overhead
CIVL Civil Supply
INS Insurance
UEPL Work Orders to UEPL
MISC Miscellaneous
CONT Contingency
HEDG Hedging
The initial budget allotted to various WBS elements, the revised budget and the actual
cost as on March 31, 2010 is given below (Table 2):
Table 1 (Cont.)
Description
Till Feb.
2009
Total
9. Bank Charges and Commission 10.29 2.79 13.08
and Interest Paid
10. Other Expenses 9.75 1.17 10.92
11. Management Overhead 2.79 0.09 2.88
12. Capital Expenditure 7.71 0.04 7.75
13. Payment for Other Projects 19.54 5.60 25.14
Total Outflow 1,577.46 139.56 1,717.02
Closing Balance 234.86 207.01 207.01
March 3,
2009 to April
30, 2009
Table 2: Revenue Versus Cost
Project Object Actual Costs (in cr) Revenue (in cr)
HS/CR 2,312.27 3,379.40
Onshore 332.86 1,458.92
Offshore 1,210.10 1,350.41
Civil 695.48 570.06
Others 73.84
55
Inventory Management: Inventory constitutes a sizeable part of the total current assets of
the company. The popular control techniques which are used by Reliance Infrastructure for
mitigating the cost and increasing the benefits of optimum inventory holding are high sea
sale and sale in transit. RIL maintains inventory only of items like steel and cement which
are necessary for its projects. An ageing schedule was prepared in order to segregate the
inventory items under the categories:
Fast Moving Stock: An item in the warehouse for less than six months has been
put under this category (Table 3).
Normal Moving Stock: An item in the warehouse for more than six months but
less than a year has been put under this category (Table 4).
Slow Moving Stock: An item in the warehouse for more than a year has been put
under this category (Table 5).
The following data shows percent of items under these categories and the amount
associated with them and there has been also a need felt to have comparative study to know
the amount associated with them (Table 6) This lead to learn the reasons behind less inventory
costs for RIL and the process through which it manipulates the condition in its favor.
It can be seen from the data that the highest percent is that of slow moving stock and
least is of fast moving stock. The collated data provides a holistic view of the movement
of stocks. Although, the inventory items i.e. steel and cement are more or less used in every
project so excess of one is used to compensate for any deficiency in other projects.
Table 3: Ageing Schedule for Fast Moving Stock
Description Fast Moving Stock (%)
Metal SS Sheet 6 mm 41,442,833.85 (18.13093)
Metal CS Sheet 12 mm 1,966,485.99 (0.860323)
Metal CS Sheet 20 mm 1,154,595.30 (0.505127)
Metal Steel Sheet 5 mm IS2062 GRB 1,672,800.90 (0.731838)
Metal Steel Beam MS 350 140 mm 52.4 kg/m 49,385.37 (0.021606)
Metal Steel Beam MS 400 140 mm 563,503.41 (0.246529)
Metal Steel Sheet 32 mm IS2062 GRB 343,739.83 (0.150384)
Metal Steel Beam MS 600 220 mm 122.4 kg/m 68,361.92 (0.029908)
BLDG Steel Reinforced FE500 8 mm 574,695.80 (0.251425)
BLDG Steel Reinforced FE500 16 mm 2,469,456.37 (1.080369)
Excise Duty 4,952,612.04 (2.166731)
Excise Duty Including Cess 20,413,239.37 (8.930641)
Total 75,671,710.15 (33.11)
Table 4: Ageing Schedule for Normal Moving Stock
Description Normal Moving Stock (%)
Cable ARM PVC 11 kV 2C 10 mm 2 AL 171,680.00 (0.075109)
Fuse HV Dropout 11 kV 100 A Base 10 A Fuse 18,808.05 (0.008228)
SWGR Switch 11 kV GOAB 400 A 1P O/D 14,795.00 (0.006473)
CT&PT Unit, F/11 kV, 300/5A, O/D Metering 26,041.37 (0.011393)
Metal Steel Beam MS 300 7.5 mm 44.2 kg/m 1,521,578.55 (0.665679)
Metal Steel Sheet 40 mm IS2062 GRB 771,659.11 (0.337595)
Metal MS Angle 100 100 10 mm IS2062 GRA 263,398.47 (0.115235)
Metal MS Channel ISMC 250 mm IS2062 GRA 2,923,202.57 (1.278879)
Metal Steel Beam MS 500 200 mm 79.4 GRA 2,207,914.90 (0.965946)
BLDG MATRL Cement Portland Ordinary GR43 1,428,569.78 (0.624989)
BLDG MATRL Block Concrete Admixture 2,833,742.34 (1.239741)
METAL Steel Beam ISMC 75 1,212,995.85 (0.530677)
Metal MS Channel ISMC 125 75 mm 1,073,458.43 (0.46963)
Metal MS Channel ISMC 100 mm 1,317,424.75 (0.576364)
BLDG MATRL Cement Portland Pozzolana 15,472,623.01 (6.769158)
Metal Steel Beam 250 125 mm 37.3 kg/m 1,799,273.36 (0.787169)
Grout, Nonshrink (CONBEXTRA GP2) 57,044.80 (0.024957)
Metal MS Angle 110 110 10 mm IS2062 GRA 1,665,697.10 (0.72873)
BLDG Steel Reinforced FE500 10 mm 372,378.13 (0.162913)
Supply of Vibration Isolation System 3,969,211.68 (1.736501)
Total 61,070,347.75 (26.72)
57
Table 5: Ageing Schedule for Slow Moving Stock
Description Slow Moving Stock (%)
JNT KIT HS STRT 11 kV 3C 300 mm2 XLPE 20,616.00 (0.009019)
ELINS Meter Trivector 3 PH 3 W 5 A Static 4,271.63 (0.001869)
ELINS Panel APFC 300 kVAR 35 kA 375,768.48 (0.164396)
CONN Earth PIPE GI PERFO 40 mm 2.5 m 49,389.78 (0.021608)
Cable INSUL PIN 11 kV 10 kN Creep 280/320 mm 14,936.05 (0.006534)
Cable INSUL DISC 11 kV 70 kN Creep 280/320 mm 47,257.56 (0.020675)
ELINS Meter Energy 3PH 4 W-/5 A Static 38,387.70 (0.016794)
Cable INSUL DISC Hardware DOG 11,712.87 (0.005124)
Fuse, Drop Out, 11 kV, 400 A Base, 200 A Fuse 16,023.48 (0.00701)
Channel, TYP:11GB3, F/Mounting Goab Switch 16,716.00 (0.007313)
CONN Earth Electrode MS 40 mm 8,855,003.71 (3.873998)
Junction Box 4WAY F/ SP33 Steel Pole 58,033.36 (0.025389)
Metal MS Angle 25 25 3 mm 1,176,000.00 (0.514491)
Metal MS Sheet 6 mm Chequered IS2062 GRB 323,398.18 (0.141484)
Metal MS Angle Different Sizes 92,551.84 (0.040491)
Metal Steel Column MS 305 305 mm 97 GRA 147,976.59 (0.064739)
Metal Steel Column MS 254 254 mm 73 GRA 1,004,812.39 (0.439598)
Metal MS Bar Round TMT 28 mm IS1786 FE415 15,114,845.47 (6.612633)
Metal MS Bar Round TMT 32 mm IS1786 FE415 12,098,614.95 (5.293054)
Metal Steel Column MS 203 203 mm 71 kg/m 1,359,406.98 (0.59473)
Total 91,833,251.26 (40.17)
Table 6: Comparison of Ageing Schedule for All Three Types of Stock
Fast Moving Stock (%) Normal Moving Stock (%) Slow Moving Stock (%)
41,442,833.85 (18.13093) 171,680.00 (0.075109) 20,616.00 (0.009019)
1,966,485.99 (0.860323) 18,808.05 (0.008228) 4,271.63 (0.001869)
1,154,595.30 (0.505127) 14,795.00 (0.006473) 375,768.48 (0.164396)
1,672,800.90 (0.731838) 26,041.37 (0.011393) 49,389.78 (0.021608)
49,385.37 (0.021606) 1,521,578.55 (0.665679) 14,936.05 (0.006534)
563,503.41 (0.246529) 771,659.11 (0.337595) 47,257.56 (0.020675)
343,739.83 (0.150384) 2,145,267.52 (0.938539) 38,387.70 (0.016794)
68,361.92 (0.029908) 1,975,718.58 (0.834362) 11,712.87 (0.005124)
574,695.80 (0.251425) 1,111,247.72 (0.486163) 16,023.48 (0.00701)
2,469,456.37 (1.080369) 1,323,356.36 (0.578959) 16,716.00 (0.007313)
263,398.47 (0.115235) 8,855,003.71 (3.873998)
819,958.57 (0.358726) 58,033.36 (0.025389)
2,923,202.57 (1.278879) 1,176,000.00 (0.514491)
7,893,316.50 (3.453267) 1,266,579.45 (0.554127)
2,207,914.90 (0.965946) 1,203,653.43 (0.526589)
2,587,646.10 (1.132076) 323,398.18 (0.141484)
1,428,569.78 (0.624989) 92,551.84 (0.040491)
2,833,742.34 (1.239741) 322,547.12 (0.141112)
1,212,995.85 (0.530677) 81,726.52 (0.035755)
1,073,458.43 (0.46963) 806,185.05 (0.3527)
1,317,424.75 (0.576364) 1,381,384.80 (0.604346)
15,472,623.01 (6.769158) 273,347.21(0.119587)
1,799,273.36 (0.787169) 147,976.59 (0.064739)
57,044.80 (0.024957) 1,004,812.39 (0.439598)
1,665,697.10 (0.72873) 15,114,845.47 (6.612633)
372,378.13 (0.162913) 12,098,614.95 (5.293054)
3,137,034.58 (1.372429) 1,359,406.98 (0.59473)
3,878,507.04 (1.696818) 1,041,453.27 (0.455628)
3,969,211.68 (1.736501) 41,707,430.92 (18.24669)
20,413,239.37 (8.930641) 4,952,612.04 (2.166731)
50,305,858.74 (22.008) 81,483,587.12 (35.6485) 96,785,863.30 (42.343)
59
Status of Working Capital: The net working capital has decreased from 2006 to 2009 (Table 7).
The liabilities has increased whereas assets have decreased. We can see that decrease in current
assets is mostly in cash and loans and advances. This marks poor on the liquidity position
of the company as well. And also indicates that the company is not taking any loans or asking
for advance payments from its clients thus reduction in loans and advances.
Ratio Analysis: Credit manager will calculate a few key ratios to interpret whether accounts
receivable are under control or in danger. Further he should take a long-term as well as short
term approach to the business. Profitability (Tables 8 to 12) of the firm largely depends upon
the operational and financial structure of the company, when these two structures are strong
enough there is no need to worry but if the financial structure is weak and operational is
good, company may have to redesign its capital structure again, the situation will worsen
if the operational structure is not good and financial structure is good, in such a case poor
operational structure will soon eat into the hitherto financial structure. According to
Hrishikesh Bhattacharya,
5
Although working capital management, particularly its receivables
component, apparently takes on a short term approach, commitment to a particular
receivables policy and the customer-relationship that emanates from it are long-term in nature
is strong, then chance of its revival is bleak. The poor operating structure would soon eat
into the hitherto good financial structure.
Operating Management
Fixed Assets Turnover Ratio
The ratio is used to evaluate the long-term state of the business. For a capital intensive firm
like RIL, the ratio should be above 5, but it has remained below 5 for the studied period.
Table 7: Calculation of Working Capital
Particulars 2005-06 2006-07 2007-08 2008-09
Current Assets
Inventories 295.05 353.09 300.29 440.68
Debtors 1,092.79 930.96 1,351.41 1,523.33
Cash and Bank Balance 5,652.90 6,045.37 87.65 251.01
Loan and Advances 3,161.69 1,170.11 645.58 1,012.05
Other Current Advances 312.90 140.91 6,636.53 5,576.56
A. Total (Gross Working Capital) 10,515.33 8,640.44 9,021.46 8,803.63
Current Liabilities
Provisions 643.14 409.61 778.43 766.25
Current Liability 1,570.82 1,478.14 2,599.38 4,655.50
B. Total 2,213.96 1,887.75 3,377.81 5,421.75
Net Working Capital (A B) 8,301.37 6,752.69 5,643.65 3,381.88
5
Hrishikesh Bhattacharya (2009), Working Capital Management: Strategies and Technique, p. 16, Chapter 1,
2
nd
Edition, PHI Learning.
Table 8: Profitability Ratios
Profitability Ratios March 2009 March 2008 March 2007 March 2006 March 2005
Operating Margin 4.50 8.49 8.64 19.27 16.18
Gross Profit Margin 1.96 4.96 4.46 8.73 4.65
Net Profit Margin 10.73 15.34 12.43 14.39 11.64
Adjusted Cash Margin 8.93 11.41 12.71 23.83 17.90
Reported Return on Net Worth 10.81 10.57 9.27 9.24 10.36
Return on Long-Term Funds 9.66 9.67 9.45 9.04 5.85
Return on Investments 12.50 12.10 7.20 7.40 6.20
Table 9: Leverages Ratios
Leverages Ratios
March March March March March
2009 2008 2007 2006 2005
Long-Term Debt/Equity 0.14 0.06 0.16 0.41 0.71
Total Debt/Equity 0.69 0.48 0.67 0.60 0.74
Owners Fund as Percentage 58.96 67.19 59.59 62.23 57.31
of Total Source
Fixed Assets Turnover Ratio 1.40 0.99 0.97 0.72 0.80
Table 10: Liquidity Ratios
Liquidity Ratios
March March March March March
2009 2008 2007 2006 2005
Current Ratio 1.55 2.47 3.93 4.25 3.94
Current Ratio (Inc. ST Loans) 0.74 1.06 1.51 2.09 3.58
Quick Ratio 1.45 2.37 3.82 4.07 3.75
Inventory Turnover Ratio 55.96 40.26 32.87 19.60 31.27
Table 11: Component Ratios
Component Ratios March March March March March
2009 2008 2007 2006 2005
Material Cost Component 44.32 39.50 26.96 27.67 24.57
(Percentage Earnings)
Selling Cost Component 1.79 2.36 2.32 0.21 0.23
Exports as Percentage of Total Sales 0.96 0.01 0.02
Long-Term Assets/Total Assets 0.63 0.53 0.27 0.23 0.24
Bonus Component 3.57 3.43 3.53 3.80 4.35
in Equity Capital (%)
61
Although the ratio is showing an increasing trend throughout, this can be attributed to a
substantial increase in its net sales. The low ratio can also be because of poor liquidity,
which is a case during the growth phase of a firm. It is also evident in growing current
liabilities and reducing assets of the company through years.
Return on Investments (ROI)
The ultimate strength of a business lies not only on a consistently good margin on sales
but also on sales generation capacity of the assets of the firm. In fact, this is the most
comprehensive ratio for judging the operating strength of a business, as it translates the
financial objective of a firm into such operating terms as selling prices, profit margins, sales
turnover, production costs and capital equipments. Performance of the company against a
standard minimum of 12% is encouraging. The trend is also on the increase which further
puts the operating strength of the company on the positive side.
Gross Profit Ratio
This ratio of Reliance Infrastructure Limited has shown a downward trend. This is so because
some of its projects are in their initial stages, much of funds has been used in these projects,
but there has not been any revenue generation because of them, thus the gross profit ratio
has been declining.
Equity-Total Debt Ratio
A high long-term debt equity ratio is unfavorable because it indicates possible difficulty in
meeting long-term debt obligations. Reliance Infrastructure has a current ratio of 0.14 which
has increased from 0.06. It is less than the industry average of 0.33.
Inventory Turnover Ratio
Reliance has an inventory turnover ratio of 12.92 which is higher than the industry average
of 8. This depicts the efficiency of the firm in managing its inventory and the speed with
which it travels within the company to produce sales.
Receivables Turnover Ratio and Average Collection Period
The ratio (Table 13) shows an increasing trend and average collection period has also
decreased. This tells us that trade credit management is improving in the company and it
is better for the liquidity position of the company as well.
Table 12: Coverage Ratios
Coverage Ratios March March March March March
2009 2008 2007 2006 2005
Interest Cover 3.75 5.44 4.47 3.41 3.65
Total Debt to Owners Fund 0.74 0.61 0.68 0.49 0.7
Financial Charges Coverage Ratio 4.25 4.13 4.76 6.88 7.30
Financial Charges Coverage Ratio (Post-Tax) 5.19 5.23 5.16 6.57 8.41
Payable Turnover Ratios and Average Payments Period
Creditors turnover ratio (Tables 14 and 15) is showing increasing and decreasing trend both
and payable period is also first increasing and then decreasing.
Table 13: Details of Debtors, Creditor and Sales
2008-09 2007-08 2006-07 2005-06 2004-05
Debtors 1,523.33 1,351.41 1,209.88 1,092.79 930.96
Sales 9,696.53 6,364.25 5,709.91 4,012.64 4,133.72
Creditors 1,618.64 1,106.86 1,160.65 662.05 739.09
Table 14: Turnover Ratios
2008-09 2007-08 2006-07
Debtors Turnover Ratio 6.75 4.970 5.314
Creditors Turnover Ratio 5.42 3.090 4.712
Average Collection Period 54.11 73.447 68.691
Average Payable Period 67.33 118.126 77.459
Table 15: Details of Sales, Debtors and Bad Debts
2008-09 2007-08 % Change
Debtors 1,523.33 1,351.41 13
Bad Debts 92.94 34.47 170
Sales 9,696.53 6,364.25 52
In Reliance Infrastructure debtors are the major portion of working capital. As explained
earlier the company uses ageing method to collect its money from debtors. Since the projects
have long gestation period, company has to arrange money from somewhere, and its their
policy to collect money from the client after regular interval after completion of a certain
stage of work. In lieu of these policies we can see that the company has brought its current
ratio and quick ratio to the industry standard. Inventory turnover ratio is very high as the
company doesnt store any inventory. As soon as the material reaches port they are transferred
to the clients store houses as per contract to save on taxes. The major inventory comprises
of steel and cement which are used in different projects. Comparing debtors and creditors,
earlier debtors were higher than creditors, because BBUs were different for creditors and
debtors. However, now the company has changed its policies and is trying to match up BBUs
for both so that they have lower creditor than debtor, result is apparently visible in the annual
report of 2008-09. The companys creditors collection period is higher than debtors which
is a good sign.
Credit Scoring
A credit score is calculated for RIL based on the ratios analyzed above. But there are few
major points which a user of credit scoring model should bear in mind.
63
No credit scoring model has universal applications. So, a firm must develop its
own model and update it periodically with the experience gathered from its usage.
Ratios or set of ratios also do not enjoy universality. The model developed should
be put to constant scrutiny and review to perfect the ratio set.
Trend of a ratio is more important than its absolute value. Therefore, ratios for
five years have been taken for eight ratios and three years for two in order to discern
the trend.
An objective credit scoring model should be supplemented by subjective analysis.
Complete reliance on credit scoring model may defeat the very purpose of credit
scoring as an instrument of credit decisions.
Framework for a Credit Scoring Model (Table 16)
Ten ratios have been taken for the model and divided in two parts: operating
management and financial management.
Table 16: Credit Scoring
Operating Management
1. Fixed Assets Turnover Ratio 0.83 1.12 5 0.43 0.43
2. Return on Investments 6.93 10.6 12 0.41 0.82
3. Gross Profit Ratio 5.95 3.79 20 0.31 0.93
Sub Total (A) 1.32/6 = 0.22
Financial Management
1. Total Debt Equity Ratio 0.67 0.61 0.33 0.76 0.76
2. Long-Term Debt Equity Ratio 0.43 0.12 0.60 1.52 3.04
3. Current Ratio 4.04 2.65 1.50 0.42 1.26
4. Inventory Turnover Ratio 27.91 43.03 8.00 4.92 19.68
5. Interest Coverage Ratio 3.84 4.55 1.75 1.78 8.90
6. Receivables Turnover Ratio 5.14 5.86 6.00 0.12 0.72
7. Creditors Turnover Ratio 3.9 4.26 4.00 0.16 1.12
Sub Total (B) 35.48/28 = 1.27
Credit Score= [A+B]/2 = 0.745
Categorization of trade credit customers
Category Excellent Very Good Good Fair Doubtful Poor
Credit Score 1.00-0.85 0.84-0.74 0.73-0.63 0.62-0.52 0.51-0.41 0.40 and
Below
S. No.
and
Weight
Ratio MA1 MA2 S Score
Weighted
Score
Moving Average (MA1) is calculated for first three years and then MA2 is calculated
for last three years.
Framework is presented in Exhibit 1. The serial number is also the weight assigned.
Weights are assigned according to the importance given to the ratios as a corporate
manager. It can be different for a loan officer.
Score of RIL is calculated by using the following formula:
2
) (
1

t
t t
SM
M S M
where M
t
= Moving average for current period.
M
t1
= Moving average for immediately preceding period.
S = Standard value of ratio.
It is clear that with a credit score of 0.745, RIL falls in the category of Very good
customers and will be considered creditworthy by credit givers.
Comparison of RIL with Its Competitors: If we compare the current ratios (Table 17 and
Figure 1) of RIL with the rivals it can be seen that during last five years RIL has brought
down the ratio to 3.94:1.55.
Table 17: Current Ratio
March 2009 March 2008 March 2007 March 2006 March 2005
REL Infra 1.55 2.47 3.93 4.25 3.94
Adani Power 1.78 0.89 0.21 0.46 6.00
NTPC 2.89 2.36 2.42 2.11 1.72
Tata Power 2.10 2.04 2.25 2.22 1.90
Figure 1: Comparative Current Ratio
7
6
5
4
3
2
1
0
March
2005
March
2006
March
2007
March
2008
March
2009
REL Infra Adani Power NTPC Tata Power
65
Quick Ratios: So far, as this ratio (Table 18 and Figure 2 ) is concerned RIL is showing
a decreasing trend during last five years but Adani powers ratio is showing decreasing trend
till year 2007 but after that it has gone up.
Table 18: Quick Ratio
REL Infra 1.45 2.37 3.82 4.07 3.75
Adani Power 1.78 0.89 0.21 0.46 6.00
NTPC 2.59 2.16 2.18 1.84 1.44
Tata Power 1.77 1.75 2.00 1.85 1.64
Table 19: Comparative Financial Data for March 2010
RIL NTPC Power Grid Tata Power
Sales 10027.26 48221.32 7127.45 7098.27
PAT 1151.69 8728.20 2040.94 947.65
Equity 244.91 8245.46 4208.84 237.33
OPM% 19.04 31.82 86.28 30.20
NPM% 11.49 18.10 28.63 13.35
RONW 470.25 13.98 12.80 9.48
EPS 51.11 10.59 4.85 40.77
CEPS 60.08 13.80 9.55 60.07
Figure 2: Comparative Quick Ratio
REL Infra Adani Power NTPC Tata Power
March
2005
March
2006
March
2007
March
2008
March
2009
7
6
5
4
3
2
1
0
Comparative Financial Information: During March 2010 RIL turnover (Table 19) was second
highest after NTPC and EPS of RIL was highest among all in March 2010.
Some Key Learnings
The study of contract between RIL and HPGCL lead to learning important terms
like bank guarantee, liquidation deposits, turnkey contract.
Each project is compared with previous ones in order to not make the same mistakes
and to take out key points to be able to negotiate with the same client. Here,
Hisar was compared with Yamunanagar project since both are from the same client.
One of the assignments was to compare the payments done by client and payment
done to the vendors, record the mismatch and prepare a summary. This shows
the importance of proper documentation and an information system.
The difference in approach towards different clients viz., private, public,
government.
RIL pays attention to paying its vendors on time. Earlier the payment from client
and to the vendors was back to back on a weekly basis. But then due to some
technical glitches client deferred its payments, but RIL continued paying its
vendors. In fact, an assignment required us to calculate the percent of billing done
by the vendors. If the purchase order has been given and still the billing is not
complete, respective vendors were contacted to know the reason. This tells that
the company wants to keep a good relationship with their vendors, which can
be helpful in future to ask for deference in payment.
Importance of documents like lorry receipt for sale in transit or bill of lading and
agreement for high sea sales.
Conclusion
Working capital is an important source of fund for the company in the absence of which,
the company may not fulfil its obligations on time. Therefore, it should be given due
importance and treated as an integral part of overall corporate management functions. It is
also very important to evaluate cause and effect relationship of every activity of the
management to assess its impact on working capital. During the course of the project, impact
of various causes is seen on the ongoing projects. Type of client, type of project, other ongoing
projects and many other events affect the working capital of a company. Management can
control the cost of bank interest up to some extent to support additional sales growth or
investments by negotiating with their vendors and effective working capital management.
Reliance Infrastructure has good industrial relationship and it has worked to maintain this.
It has also ventured into many turnkey projects of the government, which has increased the
goodwill of the company. The cash and bank balance have decreased but this can be attributed
to mega power projects taken over by the company. The company is following a conservative
policy in maintaining its current assets and it can be said that the overall performance of
the company is good with an effective working capital management being an integral part
of its system.
Recommendations
If the days past due is 30 days, the situation is serious but still may not be out
of control. Past payment records can be examined. If it is a regular feature,
67
the company may decide that no further than a mild warning letter will do.
If, however, the delay is occurring for the first time, a direct contact with the
customer is required to know the reasons behind the unusual delay.
If the days past due is more than 60 days, the situation is serious. Further top
management should be contacted and future processes should be stopped.
The credit manager should have patience and try to find out new
If the payment is due for more than 90 days, all deliveries should be stopped.
The account may be on the brink of becoming bad debt. It has to be closely
monitored with a view to collecting as much payment as possible.
The goal must be that all priority outflows be met fully out of operating cash flows
while all discretionary outflows be met with the balance in conjunction with the
financial flows.
Mismatch between the current receipts and current payments should be reduced
as much as possible.
Limitation of the Study
The study and analysis is based on the figures available in the annual report of the organization
and quarterly results published by the company. Time has been again a constraint in this
study for covering huge infrastructure sector.
Other websites
www.ntpc.com
www.tatapower.com
www.adanipower.com
1: Balance Sheet for the Period 2005-2009

Annexure
Sources of Funds
Owners Fund
Equity Share Capital 226.07 235.62 228.57 212.36 185.61
Share Application Money 783.49 783.49 88.24 568.01
Preference Share Capital
Reserves and Surplus 10,308.14 10,024.16 8,412.74 6,820.51 4,834.10
Loan Funds
Secured Loans 1,848.33 1,125.00 1,435.00 1,919.81 785.00
Unsecured Loans 5,483.85 3,884.04 4,423.32 2,347.12 2,953.67
Total 18,649.88 16,052.31 14,499.63 11,388.04 9,326.39


Annexure (Cont.)
1: Balance Sheet for the Period 2005-2009
March 2009
Uses of Funds
Fixed Assets
Gross Block 6,922.69 6,396.14 5,898.36 5,470.61 5,172.97
Less: Revaluation Reserve 589.74 643.69 697.93 752.17 752.17
Less: Accumulated Depreciation 3,582.52 3,328.56 3,082.49 2,814.55 2,452.85
Net Block 2,750.43 2,423.89 2,117.94 1,903.89 1,967.95
Capital Work-in-Progress 564.42 568.92 288.49 217.65 192.19
Investments 12,147.10 7,664.36 2,511.88 1,192.74 696.22
Net Current Assets
Current Assets, 8,972.41 9,073.85 12,849.04 10,559.79 8,668.18
Loans and Advances
Less: Current 5,784.48 3,678.71 3,267.72 2,486.03 2,198.15
Liabilities and Provisions
Total Net Current Assets 3,187.93 5,395.14 9,581.32 8,073.76 6,470.03
Miscellaneous Expenses
Not Written
Total 18,649.88 16,052.31 14,499.63 11,388.04 9,326.39
Notes:
Book Value of Unquoted 5,130.99 4,336.92 942.53 189.31 605.63
Investments
Market Value of Quoted 16,398.06 33,986.71 1,601.17 1,007.47 97.78
Investments
Contingent Liabilities 3,934.79 3,237.54 1,992.48 658.86 582.65
Number of Equity Shares 2260.70 2365.30 2285.30 2123.20 1855.73
Outstanding (Lakh)

March 2008 March 2007March 2006 March 2005
2: Profit Loss Account for the Period 2005-2009
Income
Operating Income 9,640.16 6,331.50 5,752.47 3,963.97 4,156.73
Expenses
Material Consumed 4,272.53 2,501.51 1,601.86 1,031.93 1,030.04
Manufacturing Expenses 3,308.95 2,403.59 2,919.43 1,710.82 2,036.25
Personnel Expenses 536.62 367.95 290.35 212.80 201.68
Selling Expenses 173.26 149.89 133.48 8.35 9.84
March 2009 March 2008
March 2007March 2006
March 2005
69
Reference # 27J-2011-06-04-01
3: Cash Flow Details for the Period 2005-2009
Profit Before Tax 1,193.43 1,151.70 872.37 781.47 569.64
Net Cashflow-Operating Activity 892.64 246.97 1,118.65 380.87 420.89
Net Cash Used in Investing Activity 992.67 2,611.77 6,824.35 2,103.60 1,985.68
Net Cash Used in Fin. Activity 263.16 276.53 2,228.72 1,330.26 2,778.64
Net Inc./Dec in Cash and Equivalent 163.13 2,088.27 3,476.98 393.37 5,185.21
Cash and Equivalent Begin of Year 87.88 2,175.92 5,652.90 6,045.37 860.16
Cash and Equivalent End of Year 251.01 87.65 2,175.92 5,652.00 6,045.37
Annexure (Cont.)
2: Profit Loss Account for the Period 2005-2009
March
2009
March
2008
March
2007
March
2006
March
2005
Administrative Expenses 914.40 371.00 310.24 235.88 206.32
Expenses Capitalized
Cost of Sales 9,205.76 5,793.94 5,255.36 3,199.78 3,484.13
Operating Profit 434.40 537.56 497.11 764.19 672.60
Other Recurring Income 971.07 738.58 695.22 555.24 311.84
Adjusted PBDIT 1,405.47 1,276.14 1,192.33 1,319.43 984.44
Financial Expenses 330.50 308.76 250.32 191.88 134.82
Depreciation 244.88 222.94 240.06 417.83 479.26
Other Write Offs
Adjusted PBT 830.09 744.44 701.95 709.72 370.36
Tax Charges 126.89 160.37 122.07 50.58 49.50
Adjusted PAT 703.20 584.07 579.88 659.14 320.86
Non-Recurring Items 310.12 258.77 103.05 14.22 61.00
Other Noncash Adjustments 127.41 241.79 157.92 65.14 5.46
Reported Net Profit 1,140.73 1,084.63 840.85 579.78 387.32
Earnings Before Appropriation 1,915.59 1,443.91 1,116.78 780.09 509.87
Equity Dividend 157.69 147.73 121.12 104.62 87.21
Preference Dividend
Dividend Tax 26.80 25.11 20.58 14.87 11.74
Retained Earnings 1,731.10 1,271.07 975.08 660.60 410.92

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1: Balance Sheet for the Period 2005-2009

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