Académique Documents
Professionnel Documents
Culture Documents
On
of
M.B.A. (FINANCE)
1
PREFACE
A good practical training must have creativity, ability, thought and skill. The
time for the student who want to prove them selves. My training was held for 45
day’s a very good response even from senior officer. A guidance with clear
explanation made me to enjoy this training. The most imp. role of training is that
tale life industrial process & new technologies. Without it the course would not
VIJAY MALKANI
Acknowledgement
I would also like to thank the supporting staff _MBA Department, for their help
and cooperation throughout our project.
(VIJAY MALKANI)
3. Research Methodology
30-32
6. SWOT
79-80
7. Conclusion
81-82
8. Suggestions
83-84
CHAPTER -1
INTRODUCTION
OF
Advent Institute of Management Studies 4
INDUSTRY
Indian Economy
The Indian economy continues as one of the fastest growing economies in the world.
Accelerated growth led by manufacturing and services sectors have enabled the corporate
to record strong performances. A GDP growth of around 9 percent in consecutive years
and robust domestic consumption shows encouraging signs of continued growth. Indian
economy is expected to grow at around 7 to 8 percent during 2008-09 compared to 8.7
percent during 2009-10 as the monetary tightening undertaken over the last 2 years and
world economic slowdown is expected to moderate the overall demand situation.
Grey Cement
The Indian Cement Industry not only ranks second in the production of cement in the
world but also produces quality cement to meet global standards. The induction of
advanced technology has helped the industry immensely to conserve energy and fuel and
to save materials substantially.
The cement industry in India is highly fragmented; there are 139 large cement plants with
estimated annual installed capacity of 189 million tonnes. However, the top seven-eight
players in the Industry accounts for about 50 percent of the capacity and industry is
consolidating through mergers and acquisitions. The industry is also regionalized, as
Recently, the excise duty rates on bulk cement and clinker has been amended. As per
amendment, bulk cement to attract excise duty of Rs. 400 per MT or 14 percent ad-
valorem, whichever is higher and clinker excise duty at Rs. 450 per MT. Further, excise
duty on the packaged cement with a price of above Rs. 250 per bag (50 kg) has been
changed to ad-valorem rate of 12 percent instead of Rs. 600 per tonne charged earlier.
White Cement
The world-wide white cement industry size is about one percent of grey cement industry
and in India it is much less than compared to the grey cement industry size of about 189
million tonne per annum. Unlike grey cement, the white cement industry in India is
highly concentrated. There are only three manufacturers of white cement in India out of
which Tranvancore Cement is restricted to Kerala, whereas JK White and Birla White,
the two largest players are having national presence and account for a major chunk of
India’s production capacity. Consequently, prices of white cement have been relatively
less volatile.
The growth of domestic white cement industry was negligible during 2008-09. Wall
putty continued to find increasing acceptance from the end consumers and recorded
significant growth in 2008-09 over 2007-08.
Outlook
Industry
The cement industry is implementing major capacity additions over the existing level of
189 million tonnes per annum. 22 million tonnes (14 million tonnes integrated unit and 8
million tonnes grinding unit) was added during the year 2008-09. Significant capacity
addition is expected during 2009-10. The prospects of cement industry over the medium
term are encouraging on the back of robust demand witnessed from housing sector,
infrastructure and commercial construction. Cement demand will further receive a fillip
from significant rise in industrial projects. Further, 11th Five Year Plan includes Rs.
18,000 crores Dedicated Rail Freight Corridor to be developed by Indian Railways
between Delhi and Mumbai would be a big demand driver for cement. A Delhi-Mumbai
Industrial Corridor, planned in synchronization with the freight corridor and estimated to
current fiscal is likely to show an improvement over the last year on account of (a)
additional production from the acquired plant of Nihon Nirman Ltd. for part of the year;
(b) full year benefit of commissioning of 20MW Captive Power Plant & 13.2 MW Waste
Heat Recovery Power Plant and replacement of 10 MW Turbine; (c) Continuous focus
on cost reductions. Efforts have been made to increase popularisation of the applications
of White Cement by involving general masses. Increased awareness is being built up
through mass media and word of mouth campaign.
The Eleventh Five Year Plan suggests that the economy could grow between 8 and 9
percent per year. Further, growth in GDP and cement consumption has a correlation and
over the last 10 years the cement consumption is always higher with rare exceptions. The
ratio happens to be 1: 1.2/1.3. This also supports the assumption that cement growth
should be 2 percent over the GDP growth. In view of above and accelerated growth of
infrastructure, it is assumed that the cement demand
would be around 11 percent. With demand expected to grow at around 11 percent,
additional capacity of 21 million tonnes per annum will be required to match the demand.
However with the improved margins there is a possibility of over bunching of capacities
in the long term as most of the players have already announced new capacities and the
pace of capacity addition may be higher than demand growth. Besides continuous
intervention of the Government in the rising cement price could lead an adverse effect.
Looking to the growth in economy, housing sector and commercial
construction and low white cement consumption as compared to international
consumption rate there is immense opportunity to increase the white cement growth.
White cement wall putty, a value added product of white cement, has been continuously
recording significant growth rate. The high growth rate of realty and construction
industry is expected to create huge demand for putty. Cement wash application is being
popularised in semi urban areas. White cement applications face major threat from
competing products. For instance, the white cement paint industry continued with
marginal growth due to more usage of new generation polymer based exterior paints.
l Production and sale of cement touched an all-time high of 3.77 million tonnes and 3.76
million tonnes respectively during the year. l Commissioning of the 20 MW Captive
Power Plant. l Replacement of 10 MW Turbine. l Commissioning of 13.2 MW Waste
Heat Recovery Power Plant. l Financial closure of Rs. 525 crores term loan for Karnataka
Project under wholly owned subsidiary JayKayCem Ltd. l Signed MOU with Fujairah
Government for setting up a 2.2 million tonnes cement plant. l Increase in the production
of value added product (putty) at white cement plant by 39 percent.
HUMAN RESOURCES
Hiring the talent, motivating and retaining them and ensuring their development is a
foremost challenge in today’s business environment. Your Company focuses on building
an expert talent base. We groom existing talent as well as fresh recruits from reputed
professional institutions in a variety of areas to enable them to take on positions of
greater responsibility. On and off the jobs training programs are organized through
internal and external resources. Employees are also benefited by the Regional Training
Center at the Grey Cement Plant at Nimbahera.
The Internal Audit function is an independent function and is carried out by team of
external as well as in house auditors at the plants, sales centers, regional offices, and
head office. Introduction of the ERP system for revenues is under implementation. The
Company has proper and adequate systems of internal controls to provide reasonable
assurance that transactions are authorized, recorded, and reported correctly and to ensure
compliance with policies, statute. The internal control system provides for
Company has an Audit committee that regularly reviews the reports submitted by the
view to keep pace with the rapid changes taking place in the external environment
An
Introduction
The initial "J.K." stands for a father- son team, namely: Sir Juggilal
Kamlapath Singhania
J .K. organization started in the year 1884 at Calcutta. J .K. started their
business as a Financier, Investor, Trading Supplier of cotton belts and
2. MANAGEMENT SET- UP
President
J K Cement Ltd.
ABROAD:
INDIA:
Educational services:
Construction of rooms in Govt. College at Nimbahera.
Running JK Institute of Technology, ITI in five trades affiliated to NCVT.
Running 10+2 CBSE affiliated school
Medical services:
Religious services
Sports services
Sports infrastructure like wooden badminton court, table tennis court,
billiard room, and cricket ground, volleyball ground in colony campus.
Sponsoring all India youth football, volley ball and badminton
tournaments.
Sponsoring inter-district tournaments.
Arranging summer camps for various sports.
CEMENT MANUFACTURING:
Ordinary Portland cement is produced by grinding cement clinker in association
with gypsum (3-5%) to specified fineness depending on the requirements of the
cement consumers. Cement clinker is produced on large scale by heating finely
pulverised Calcareous and Argillaceous materials at very high temperature upto
1450oC in rotary kilns. The Calcarious and Argillaceous materials obtained from
the earth are properly proportioned to get a suitable ratio of lime (CaO), Silica
(SiO2), Alumina (Al2O3) and Iron (Fe2O3) present in the mixture. As the raw
materials are obtained directly from limestone and clay mines, minor constituents
like Magnesia (MgO), Sodium, Potassium, Sulphur, Chlorine compounds etc.,
may also be present in the raw materials upto limited extent which do not
adversely affect either the manufacturing process or the quality of cement
produced.
Limestone is the major raw material used for manufacture of cement and about
35% of raw materials are lost in the atmosphere in the form of gaseous
compounds of which carbon dioxide is the major one. Therefore cement units are
necessarily located near the cement grade limestone deposit. The major steps or
unit operations involved in cement manufacturing process include:
• Mining, Crushing, Pre-homogenisation, Grinding and Final Blending
of raw materials for preparation of kiln feed.
• Pyroprocessing of kiln feed in presence of combustion gas/ flame
generated from combustion of pulverized coal, mineral oil or natural gas.
• Grinding of cement clinker along with
• Gypsum for production of OPC
• Gypsum and other additive / blending components for production of
cement other than OPC.
• Packing and dispatch of cement.
• The various unit operations from mining of raw materials to cement
dispatch are discussed as under.
The history of cement is the story of civilization from primitive caves of pre-
historic times to the skyscrapers of the modern age. It is said that the use of
cement is form the period of use of fire. Egyptians utilized gypsum plaster as
cementing material as early as 3000 BC building their monuments.
INTRODUCTION OF CEMENT
Cement can be defined as any substance, which can join unite two or more
pieces of some other substance together to from a unit mass. Cement, as
used in construction industries, is a fine powder which when mixed with
water and allowed to set and harden can join different components or
members together to give a mechanically strong structure. Thus cement can
be used as bonding material for bricks or for bonding solid particles of
different sizes (rubber masonry) to form a monolith.
Ordinary Portland Cement is the basic cement and it has three grades namely 33,
43 and 53 respectively. Limestone is the principal raw material for the
manufacturing of cement. Our country has enough reserve of raw material needed
in the cement industry. Cement consumption growth is highly correlated to the
GDP growth and serves as a leading indicator. More industrial activity and greater
purchasing power means more asset formation and construction and thus more
consumption of cement.
Lime 64 64-68
Silica 22 17-25
Alumina 5 3-6
Magnesia 2 0.1-3.0
Alkalise 1 0.2-1.0
HYDRATION
In this experiment, the hydration rate for each type of tricalcium silicate
component was measured. Hydration is the reaction that takes place between
cement and water that leads to setting and hardening. All compounds present in
Portland cement clinker are anhydrous, but when brought into contact with water,
they are all attacked or decomposed, forming hydrated compounds. When the
tri- or di- calcium silicates react with water a calcium-silicate-hydrate gel is
formed. This calcium-silicatehydrate (C-S-H) is the principal hydration product
and primary binding phase in Portland cement.
The chemical reaction that take place during hydration are summarized below:-
Oil Well Cement Connecting the steel casing to the walls of gas oil wells
at high temperature and to seal porous formations in
petroleum industry.
TYPES OF PROCESSES:
Basically there are two types of process for cement manufacturing that is -
Hydro Processing (Wet Process)
Pyro Processing (Dry Process)
We are using Pyro Process in JK Cement Works at all our plant
PROCESS OVERVIEW :
MINING OF LIMESTONE
MINING METHODS
Surface miners were firstly developed for road making and are now used for
limestone mining operation also. Being ecofriendly machine, Surface Miners
eliminate the problems associated with drilling, blasting, crushing & loading and
the complaints associated with their activities. There are three surface miner
machines working in Adanakurichi Limestone Mine of ICL’s Dalavoi works. The
capacity of each machine is 200 tonnes per hour limestone.
The surface miner is a track-mounted machine with a powerful diesel engine and
hydraulic pumps for delivering the power to the cutting drum. The cutting drum is
made up of a special alloy steel with replaceable Tungsten Carbide cutting tools
(spikes), which can be quickly detached or fixed. The drum can be lowered or
lifted by hydraulic system with powerful hydraulic motors thereby varying the
depth of cut. Dust is suppressed at the source itself by water spraying on to the
milling drum thereby making it an environment friendly machine. As the cut
materials are of uniform size and the impact on the crusher while crushing is
reduced. Whenever, there is an interstitial reject band encountered, the same is
eliminated by loading and dumping it separately in the specified dump thereby
facilitating Selective Mining with this machine.
CRUSHING OF LIMESTONE
The big boulders produced during drilling and blasting methods of limestone
mining are crushed in suitable type of crushers. The crushing is carried out either
in single or double stages by using Primary crusher and Secondary crusher, or in
Fig. 6.3
Purpose:
Size reduction from 1.0M * 1.4M * 1.1M boulder to 25mm size limestone pieces.
Common type of Crushers:
Double Toggle Jaw Crusher (Capacity : 400 TPH): Used as primary crusher.
Swing Hammer Crusher (Capacity : 200 TPH) used as secondary crusher.
Compound Impactor (Capacity : 800 TPH) combined unit of primary and
secondary crusher.
PREHOMOGENISATION
The crushed limestone is then transported to stacker reclaimer site with the help
of belt conveyor / rope ways installed at different plant site. Finally the crushed
limestone is pre-blended with the help of stacker and reclaimer systems. The
crushed limestone travelling on the belt conveyors is stacked in layers with the
Purpose:
Homogenization of crushed limestone.
Stacker:
Type of Pile: Longitudinal.
Details of Piles: 20000 – 30000 tonnes per pile. Height of pile upto 11.00
meters.
Rated capacity: 1000 tonnes per hour. It varies from plant to plant
depending upon the production requirement.
The stacker moves on longitudinal rails.
Reclaimer
Type: Bridge Scrapper Type.
Rated Capacity : 600 tonnes per hour It will vary from plant to plant
depending on the production requirement (in TPD).
Working Principle:
Cuts Stack Pile in slice from parallel to face of pile. Shifting material
(limestone) to belt with the help of scrapper.
The pre-blended limestone from stack pile is transported to raw mill hoppers.
More than one hoppers are used for proportioning of raw mix incase the
limestone is obtained from more than one sources or purchased sweetner or
additive materials are required to be mixed with captive mines limestone.
Presently Raw mill hoppers are provided with continuous weighing machines
known as weigh feeders in order to produce a suitable raw meal proportioned
appropriately for production of desired good quality of cement clinker. Vertical
Roller Mill and Tube Mill Grinding machines are used for production of pulverized
raw meal at J K Cements Plants. Figure presented below is a typical
Grinding Systems
• Raw Mix:
- Ball Mill
- Vertical Roller Mill
- Combination of Roller Press and Ball Mill
(Generally open circuit is used in wet process and closed circuit is used in dry
process. In closed circuit systems, fixed and dynamic separators are used.)
• Coal and fuel:
Ball Mill
Vertical Roller Mill
(Closed circuit used)
HOMOGENISATION
The raw meal ground in the raw mill is thoroughly blended in vertically tall
blending silos of capacity upto 10,000-15,000 tonnes or more. The blending is
performed pneumatically by introducing the compressed air in the bed of fine raw
meal fed to the blending silo or mechanically by distributing the raw meal at
different cross section of the silo with the help of airslides. The blended raw meal
is taken out of the silo with the help of air slides and fed in a central discharge
bin, which is continuously aerated for accomplishing final blending of raw
materials. The characteristics of blending raw meal should satisfy the
requirement of standard deviation variation in the range of (+/-) 0.2% CaO of raw
meal. The moisture content of raw meal powder is less than 1%. The properly
blended raw meal is now ready for burning the same to produce cement clinker
in cement rotary kiln.
PYROPROCESSING
In order to manufacture cement from the raw mix, it is required to heat raw meal
to a temperature of 1450OC, thus carrying out SINTERING OR
CLINKERISATION. The burning process requires an oxidising atmosphere in the
kiln, as in the opposite case a clinker of brown colour (contrary to the normal
greenish –gray) will be formed and the resulting cement will be quicker setting
and with lower strength.
CHEMICAL TRANSFORMATIONS
During heating of the raw meal to the burning temperature 1450oC (clinkerization or
sintering) certain physio-chemical processes take place.
These processes are influenced by chemical factors in the raw meal (such as its
chemical composition), by mineralogical factors (its mineralogical composition), by
physical factors (fineness or particle size in the raw meal), homogeneity and other
factors. The complete course of these endothermic reactions plays a decisive role
in quality of the resulting cement.
In per-heater kiln, the first five transformations shows in figure 4.1 will take place
in pre-heater tower. The decomposition of limestone and other carbonates will
primarily take place in the calciner vessel where the calcination temperature is
maintained by injection of fuel. The last two transformations will take place in the
rotary kiln.
The carbonate Ca CO3 decomposes between 600 – 800OC to form CaO. Quartz
and clay will have started decomposing slightly before that to liberate free
reactive Al2O3 and SiO2
The CaO being formed at this stage, now reacts with SiO 2 to form C2S and later
with more CaO to form C3S. Some CaO will also react with Al 2O3 and Fe2O3 to
form various intermediate components such as CA, C12A7 and others, which will
decompose at higher temperature at later stage.
C2S content is seen to grow steadily during the heating and reach maximum
content at approx. 1300OC which is a point where liquid phase appears. The
major part of C2S is then transformed to C3S in the liquid phase and the final
content of C2S in the clinker is less than the content of C3S.
Combustible fuels eg., coal, liquid fuel oil, or natural gas are used for providing
heat for converting raw meal into clinker.
Indian cement plants use coal obtained from Indian Coalmines or imported from
South Africa, china,Australia and Indonesia. The coal obtained in the form of
lump containing upto 10% moisture is ground to suitable fineness in vertical roller
mills or closed circuit tube mills at different cement manufacturing facilities. The
cooler exhaust/ part of preheater gases are used for driving away the moisture
from coal while grinding the same in the airswept VRM or tube mills. The figure
above 6.5.1 represents a typical pyroprocessing and coal preparation section in
a dry process 4-stage suspension preheater kiln equipped with folax cooler.
The modern Folax grate coolers are provided with fixed and moving grate plates.
Below the grate are provided number of air chambers which receive atmospheric
cold air with the help of number of high pressure discharge fans in different
compartments. The pressurized air flows through the holes provided in the grate
plates and cools the clinker which is travelling in the form of granules on the
grate plates. The clinker is cooled down to a temperature of 100-150oC while
leaving the outlet end of the cooler. The cold clinker is crushed continuously in a
suitable clinker crusher provided at the outlet end of the cooler before the same
is discharged on the clinker transportation system for transporting the same to
clinker storage Silo stock/ Pile.
CEMENT GRINDING
In a modern cement plant, the total power consumption is about 100 Kwh / tonne
whereas cement grinding process accounts about 40%. The quality of final
cement product depends on operational mode and parameters of cement
grinding plant.
Cement has to be ground fine enough to meet the requirements for strength
properties specified in current standards. As it takes quite long time to determine
especially the late strength, the hour –to-hour and day –to-day control of cement
grinding has to be based on cement fineness.
Fig. 6.6.
The pulverized different types of cements are stored in different silos installed
with different capacities. Depending upon the market requirements the cement is
loaded in bulk or packed in 50KG bags with the help of conventional rotary
packers or electronic packers, loaded on to trucks and finally dispatched to the
required destinations.
Purpose:
To pack cement in appropriate packages suitable for consumption at site.
Common packs available:
Grey Cement:
50 Kg bags
Bulk handling of cement has started at selected places e.g.
bulk-handling project near Mumbai by ACC.
White Cement:
The survival and well being of the cement plants / companies in the market depends
upon the quality of product and its cost. Quality and cost together define the value of
the product (i.e. cement in this case). The concept of quality has undergone a sea
change from mere quality control of the product to total quality management (T.Q.M.)
with emphasis on quality defined as “totality of features and characteristics of
product / services that bears on its ability to satisfy the stated and implied needs”.
The quality of the product depends on variety of factors such as technology, quality
of raw materials and fuels, operation and quality control procedures to produced
consistent product.
The broad quality parameters of cement relate to chemical and physical properties
as per IS Code are as mentioned below:
CHEMICAL PROPERTIES:
• Fineness
• Consistency
• Setting time – initial and final
• Soundness
• Compressive strengths (3 days, 7 days and 28 days)
• Heat of hydrationDrying shrinkage [for PPC
Advent Institute of Management Studies 1
CHAPTER 3
RESEARCH METHODLOGY
OF
J.K.CEMENT
• Objective of Research :-
Development of Working
Hypotheses
Preparing the Research
Design
Analysis of Data
Hypothesis Testing
Advent Institute of Management Studies 4
Generalization and
Interpretation
CHAPTER 4
FINANCIAL ANALYSES
OF
J.K.CEMENT
Comparison of J.K. Cement with various other companies such as ACC Ltd., Ambuja
Cement, Birla Corporation Ltd., and Binani Cement have been made to realize the
strength of the J.K. Cement in the presence of these strong competitors.
1. PE Ratio
2. EPS (TTM)
3. NET SALES
4. FACE VALUE
5. NET PROFIT
6. DIVIDEND
7. BALANCE SHEET
18 Jul 17:31
Barak Vally 56.0 56.0 57.85 35.2 33.3 29.5 32.0 29.15
Cement 5 5 -49.61% 0 5 5 0
-47.99% -47.99% -17.19% -12.59% -1.35% -8.91%
Birla Corp 300.9 330.9 272.10 208.7 199.4 159.4 165.2 162.30
0 5 -40.35% 5 0 0 5
-46.06% -50.96% -22.25% -18.61% 1.82% -1.79%
Chetinad Cem 433.0 436.9 452.50 483.3 505.7 500.0 501.0 483.00
0 5 6.74% 5 5 0 0
11.55% 10.54% -0.07% -4.50% -3.40% -3.59%
India Cements 229.3 289.6 251.95 186.6 164.0 124.8 133.4 135.70
5 5 -46.14% 5 5 0 5
-40.83% -53.15% -27.30% -17.28% 8.73% 1.69%
Madras Cements 3497.80 4039.5 3779.4 3353.3 2896.5 2763.75 2536.45 2,486.30
-28.92% 5 0 5 0 -10.04% -1.98%
-38.45% -34.21 -25.86 -14.16
% % %
Mysore Cement 57.35 51.9 49.2 37.0 33.1 25.85 31.90 29.05
-49.35% 0 5 0 0 12.38% -8.93%
-44.03% -41.02 -21.49 -12.24
% % %
OCL India 151.60 190.7 280.2 152.1 128.7 95.90 102.50 95.80
-36.81% 5 5 0 5 -0.10% -6.54%
-49.78% -65.82 -37.02 -25.59
% % %
Panyam Cements 77.05 91.8 107.7 142.8 162.1 160.40 153.15 187.45
143.2% 0 0 0 5 16.86% 22.40%
104.19% 74.05 31.27 15.60
% % %
Prism Cement
Advent Institute49.50 65.6 Studies
of Management 57.2 44.5 37.4 31.35 34.85 1032.90
-33.54% 5 5 5 5 4.94% -5.60%
-49.89% -42.53 -26.15 -12.15
% % %
J.K. CEMENT V/s ACC Ltd.
Dividend: 50 Dividend: 25
Dividend: 50 Dividend: 40
DATA ANALYSIS
&
INTERPRETATION
J.K.Cement Ltd.
COMPARATIVE BALANCE SHEET
as on 31st March 2008 and 2009 (In Rs. Crore)
Changes
Particulars Mar ' 08 Mar ' 09 Absolute % Ratio
Sources of funds
Owner's fund
Equity share capital 69.93 69.93 0.00 0.00% 0
Share application money - -
Preference share capital - -
Reserves & surplus 692.26 838.27 146.01 21.09% 0.21
Revaluation reserve 291.15 277.85 -13.30 -4.57% -0.05
Loan funds
Secured loans 382.79 436.86 54.07 14.13% 0.14
Unsecured loans 127.74 127.54 -0.20 -0.16% 0.00
Current Liabilities
Current Liabilities 289.62 382.69 93.07 32.14% 0.32
Provisions 52.01 43.74 -8.27 -15.90% -0.16
Total 1905.50 2176.88 271.38 14.24% 0.14
Uses of funds
Fixed assets
Advent Institute of Management Studies 16
Gross block 1,089.13 1,215.75 126.62 11.63% 0.12
Less : accumulated
depreciation - -
Net block 1,089.13 1,215.75 126.62 11.63% 0.12
Capital work-in-progress 133.84 35.06 -98.78 -73.80% -0.74
Investments 9.5 10.74 1.24 13.05% 0.13
Current assets
Inventories 114.53 136.13 21.60 18.86% 0.19
Sundry Debtors 57.26 53.04 -4.22 -7.37% -0.07
Cash and Bank Balance 145.44 125.2 -20.24 -13.92% -0.14
Loans and Advances 353.83 598.53 244.70 69.16% 0.69
Miscellaneous expenses not
written 1.97 2.43 0.46 23.35% 0.23
Total 1,905.50 2,176.88 271.38 14.24% 0.14
Table 1: Comparative Balance Sheet
J.K.Cement Ltd.
COMPARATIVE INCOME STATEMENT
for the years ended 31st march 2008 and 2009 (In Rs. Crore)
Income
Sales Turnover (1) 1,458.25 1,496.84 38.59 2.65% 0.03
Expenses
Material consumed 158.17 158.22 0.05 0.03% 0.00
Manufacturing expenses 445.99 501.11 55.12 12.36% 0.12
Personnel expenses 68.48 84.62 16.14 23.57% 0.24
Selling expenses 320.39 363.54 43.15 13.47% 0.13
Adminstrative expenses 49.56 65.36 15.80 31.88% 0.32
Expenses capitalised - - - - -
Cost of sales (2) 1,042.59 1,172.83 130.24 12.49% 0.12
J.K.Cement Ltd.
COMMON SIZE BALANCE SHEET
as on 31st March 2008 and 2009 (In Rs. Crore)
Sources of funds
Owner's fund
Equity share capital 69.93 69.93 3.67% 3.21%
Share application money - - - -
Preference share capital - - - -
Reserves & surplus 692.26 838.27 36.33% 38.51%
Revaluation reserve 291.15 277.85 15.28% 12.76%
Loan funds
Secured loans 382.79 436.86 20.09% 20.07%
Unsecured loans 127.74 127.54 6.70% 5.86%
Current Liabilities
Current Liabilities 289.62 382.69 15.20% 17.58%
Provisions 52.01 43.74 2.73% 2.01%
Total 1905.50 2176.88 100.00% 100.00%
Uses of funds
Fixed assets
Gross block 1,089.13 1,215.75 57.16% 55.85%
Less : accumulated
depreciation - - - -
Net block 1,089.13 1,215.75 57.16% 55.85%
Capital work-in-progress 133.84 35.06 7.02% 1.61%
Investments 9.5 10.74 0.50% 0.49%
Current assets
Inventories 114.53 136.13 6.01% 6.25%
Sundry Debtors 57.26 53.04 3.00% 2.44%
Cash and Bank Balance 145.44 125.2 7.63% 5.75%
Loans and Advances 353.83 598.53 18.57% 27.49%
Miscellaneous expenses not
written 1.97 2.43 0.10% 0.11%
Advent Institute of Management Studies 19
Total 1,905.50 2,176.88 100.00% 100.00%
Table 3: Common Size Balance Sheet
J.K.Cement Ltd.
COMMON SIZE INCOME STATEMENT
for the years ended 31st march 2008 and 2009 (In Rs. Crore)
Absolute Percentage
Particulars Mar ' 08 Mar ' 09 Mar ' 08 Mar ' 09
Income
Sales Turnover (1) 1,458.25 1,496.84 100.00% 100.00%
Expenses
Material consumed 158.17 158.22 10.85% 10.57%
Manufacturing expenses 445.99 501.11 30.58% 33.48%
Personnel expenses 68.48 84.62 4.70% 5.65%
Selling expenses 320.39 363.54 21.97% 24.29%
Adminstrative expenses 49.56 65.36 3.40% 4.37%
Expenses capitalised - -
Cost of sales (2) 1,042.59 1,172.83 71.50% 78.35%
Current Assets
. . . . . In Rs. Crore . . . . .
Particulars
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
Interpretation:-
Traditionally, a current ratio of 2: 1 is considered to be a satisfactory ratio. On the
basis of this traditional rule, the current ratio in the year 2004 – 2005 is 0.93 & has
increased in the year 2005 – 2006 up to 1.63. This increase was due to increase in
Quick Assets
2. Quick Ratio = Current Liabilities
. . . . . In Rs. Crore . . . . .
Particulars
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
Quick Assets (A) 201.86 426.24 419.64 556.86 759.05
Table6:QuickRatio
Interpretation
The emerging liquidity position of the company appears to be highly satisfactory from
quick ratio. But from super quick ratio it can be inferred that liquidity position of the
company is not satisfactory.
3. Solvancy Ratio:
1. Debt-Equity Ratio
Advent Institute of Management Studies 24
2. Interest Coverage Ratio
------------------- in Rs. Cr.
-------------------
Particulars
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
Net Profit before interest and 35.27 110.84 325.25 397.77 288.64
taxes (C)
Interpretation
The Debt Equity Ratio reflects the relative contribution of creditors & owners of
business in its financing. In year 04-05 this ratio is very high which indicate that
company is depend on outside capital & its equity as compared to debt is very low.
A sudden decrease of D/E Ratio in the next year is due to issue of share capital by
the company. This decreasing trend is continuing in the following years showing that
the company is able to meet the creditors claim very efficiently.
Capital turnover ratio indicates that the amount of net sales for a rupee employed
has increased from 0.32 in the year 2004-2005 upto 0.93 in 2007-2008. This reflects
that there was an efficient utilization of capital employed in the organization. Even
after this a decline in the current year may be attributed external environment like
recession, market conditions, competition, inflation etc.
Interpretation
It indicates the firm's ability to generate sales per rupee of investment in fixed
assets. The high ratio over the years indicates efficient management and utilization
of fixed assets.
It may be noted that there is no direct relationship between sales and fixed assets
since the sales are influenced by other factors as well (e.g., quality of product,
delivery terms, credit terms, after sales service, advertisement and publicities.)
Interpretation
There is no stable increase in working capital ratio which is due to ineffective control
of the management over working capital utilization.
Interpretation
This ratio indicates how fast inventory is sold. In year 04-05 it is 4.45 times per year.
In subsequent years it is increased by more than 2 times. This is good from the view
point of liquidity.
Interpretation
In year 04-05 it is 7.79, which shows that debts are not collected rapidly by company
as compared to subsequent years. In year 05-06 it is 19.77 which is 2.5 times more
than previous year. After this the ratio shows increasing trend upto 08-09. Which
indicate shorter time lap between credit sales & cash collection.
Interpretation
Average Collection Period
The ratio shows that company is following strict policy of recovering debts.in the year
04-05 it was 47 days, whereas in 08-09 it is only 13.4 days.
. . . . . In Rs. Crore . . . . .
Particulars
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
A high ratio of Gross profit to sales is a sign of good management. It implies that the
cost of production of the firm is relatively low. Here it also can be seen that GP
Margin is highest in the year 07-08. This is again due to low cost of production in 07-
08 as compared to other years.
In the years 04-05 and 05-06 this ratio is low. But in years 06-07 and 07-08 it is high,
which ensures adequate return to the owners. However in the year 08-09 this ratio
falls upto 9.47%. this fall may be due to adverse economic conditions, examples –
declining selling price, rising cost of production & falling demand for the product.
Interpretation
Same as net profit ratio this ratio also indicate that in the year 07-08 company
utilizes its resources very efficiently as compared to other years.
. . . . . In Rs. Crore . . . . .
Particulars
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
Equity Sh. Holder`s Fund (D) 49.93 69.93 69.93 69.93 69.93
Interpretation
This ratio provide sufficient insight into how efficiently the long term funds of owners
& lenders are being used .This ratio is continuously increasing up to year 07-
08,giving proof of efficient use of capital employed. However in the year 08-09 there
was a downfall which may be due to external factor.
Advent Institute of Management Studies 42
Graph 14.1: Return on Equity
Interpretation
There is an increasing trend in this ratio of the company. This increase indicates that
the company is utilizing owner`s fund profitably. Is also focuses on the relative
Interpretation
This ratio is the key indicator of the profitability for a firm. Companies efficiently using
their assets will have a relatively high return and vice-versa. From year 04-05 to 06-
Advent Institute of Management Studies 44
07 it is increasing, while in the year 07-08 it is near about flat and in year 08-09 it is
declini
Earning for
Equity
Shareholders (A) 6.3 32.57 178.62 265.17 142.34
Shares in issue
(crores) (B) 4.9927 6.9927 6.9927 6.9927 6.9927
Equity Divident
(C) 0 10.49 24.47 34.96 24.47
Equity Divident
Per Share (C)/
(B)=(D) 0.00 1.50 3.50 5.00 3.50
Price Earning
Ratio (E)/(F) - 37.64 5.67 4.34 1.95
Dividend Yield
Ratio (D)/(E) - 0.86% 2.41% 3.04% 8.81%
Table 14: EPS, Pay Out Ratio, Price Earning Ratio, Dividend Yield Ratio
Earning per share is generally considered to be the single most important variable in
determining a share's price. It is also a major component used to calculate the price-
to-earnings valuation ratio. The company has handsome amount of profit available to
equity shareholders on per share basis.
As we can see that since last 5 years this ratio is less than 100%, which shows that
company has distributed all its earnings as dividend. Moreover the company has
also utilized its retained earnings to maintain the rate of dividend.
Price-Earnings Ratio
The dividend yield ratio allows investors to compare the latest dividend they received
with the current market value of the share as an indicator of the return they are
earning on their shares. It depicts the increasing trend which is good sign for the
investors of the company.
Particulars
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
Interpretation
This is cash that was generated over the year from the company’s core business
transactions. This may serve as a better indicator than earnings, since noncash
earnings can’t be used to pay off bills. It's arguably a better measure of a business's
profits than earnings because a company can show positive net earnings (on the
income statement) and still not be able to pay its debts. It's cash flow that pays the
This portion of the cash flow statement accounts for cash used to make new
investments, as well as proceeds gained from previous investments. In Target’s
case, this number in every year from 2005 to 2009 is negative, which shows the
company spent significant cash investing in projects it hopes will lead to future
growth.
This last section refers to the movement of cash from financing activities. Two
common financing activities are taking on a loan or issuing stock to new investors.
Dividends to current investors also fit in here. Investors will like these last two items,
since they reap the dividends, and it signals that Target is confident in its stock
performance and wants to keep it for the company’s gain. A simple formula for this
section: cash from issuing stock minus dividends paid, minus cash used to acquire
stock.
SWOT ANALYSIS
Of
j.k cement
Strengths:-
1) J.K. possess good brand image in the existing markets which is definitely a
part of payment brick for it.
2) Location has always been an important factor in Rajasthan extensive
(above 2500mt.) of cement grade limestone available.
3) Wider experience and old set capacities.
4) 10000 tons per day production capacity.
Weakness:-
Opportunities:-
Threats:-
CONCLUSION
&
FINDINGS
There is an increase in current assets ratio during all the five years due to
increase in inventories. The piling of inventory should be avoided. For this
demand should be projected using previous year data and production should be
done accordingly.
The quick ratio of last five years reflects liquidity. But to make this liquidity
favorable collection policy should be strictly followed.
The stock turnover of the company reflects an urgent need to monitor inventory
management.
The company is not fully prepared to face macro market threats. As the year 08-
09 popularly the period of recession, was successful in breaking the growth of
sales of this organization. This failure was mainly due to lack of company`s
management over unexpected factors.
CHAPTER - 8
SUGGESTIONS
For sustaining the capital turnover ratio vigilance should always be in process to
control the external factors. Besides this hiring of experienced employees will
also reduce the negative effect of external factors.
There is a need of spending funds on sales promotion activities. Along this sales
can also be increased by producing quality in accordance with the current
expectations of the customers.
Cash budget should be prepared in order to know the projected cash balances in
the following months. This would help the company in arranging funds if there are
chances of deficiency in cash balance in the future years. And if there is
possibility of surplus cash balance than the manager can accordingly plan for
future investments to maximize other incomes.
Webcites:
www.jkcement.com
www.moneycontrol.com
www.indiabulls.com
www.investopedia.com
www.wikipedia.com
www.google.com