landuri chut

PROJECT STUDYES REPORT

“FINANCIAL ANALYSIS OF J.K.CEMENT”

For the Partial fulfillment

M.B.A. (FINANCE)

During Session 2010 – 11

ADVENT INSTITUTE OF MANAGEMENT STUDIES

Submitted By: - Submitted To:

VIJAY MALKANI Dr. N.S.RAO Sir

MBA Part III SEM. Designation

DIRECTOR

PREFACE

A good practical training must have creativity, ability, thought and skill. The training

is a exposure of Student in the industrial environment. This is the best 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 it teaches the student

practically in complete practical environment. It trained me to punctual, responsible

cooperative and creative the training has helped me to tale life industrial process &

new technologies. Without it the course would not have any true sense.

VIJAY MALKANI

Acknowledgement

I express my sincere thanks to my project guide, Dr. N. S. .RAO Sir, Designation ___DIRECTOR, Deptt_MBA, for guiding me right form the inception till the successful completion of the project. I sincerely acknowledge him/her/them for extending their valuable guidance, support for literature, critical reviews of project and the report and above all the moral support he/she/they had provided to me with all stages of this project.

I would also like to thank the supporting staff _MBA Department, for their help and cooperation throughout our project.

(VIJAY MALKANI)

Advent Institute of Management Studies 2

CONTENTS:- page no.

1. Introduction to the industry 1-3

2. Introduction to the J.K. 4-29

3. Research Methodology 30-32

3.1 Title of the Study 3.2 Objective of Study 3.3 Type of Research 3.4 Sample Size and method of selecting sample 3.5 Process of Research 3.6 Limitation of Study

4. Financial analyses j.k.cement 33-43

5. Analysis and Interpretation 44-78

6. SWOT 79-80

7. Conclusion 81-82

8. Suggestions 83-84

8. Bibliography 85

CHAPTER -1 INTRODUCTION OF

INDUSTRY

Management Discussion And Analysis Report

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.

Cement Industry Structure and Development

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 cement units are concentrated in clusters, close to the limestone deposits. Competition is also regionalized since low-value commodity makes transportation over long distances un-economical. Cement demand has posted a healthy growth rate of 8 percent in tandem with strong economic growth of the country. The industry-achieved production of 168 million tons in fiscal 2008- 09 compared to 156 million tons during corresponding previous year. In North India where the Company operates, the demand growth was at -12 percent. The demand has grown at a CAGR of 8 percent for last 15 years and there is nothing cyclical about cement demand. We believe that the present growth rate will be maintained with all drivers of demand, namely, housing, infrastructure, and corporate capex on an upswing.

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 attract huge investment of Rs. 3,60,000 crores, would propel cement demand to unprecedented highs. The growth in demand should help in sustaining the improved realization.

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 focuson 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.

OPPORTUNITIES AND THREATS

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 demandwould 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 commercialconstruction 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 continuouslyrecording 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.

The perception of mosaic tiles continues to be low compared to substitutes such as marble, ceramic and vitrified tiles, granite, which enjoys high esteem value due to attractive designs shades and less time to complete the floor. Moreover, there is a mushroom growth in the number of wall putty manufacturers while even larger paint manufacturer such as Asian Paint, Berger, Nerolac, Nitco are already supplying putty. The recent ban on cement export could also hamper the realisation.

Risks and Concerns

Concerns to the Indian cement industry are high cost of power & Coal, high freight cost, inadequate infrastructure, and poor quality of coal. In order to utilize the additional production capacity in pipeline, the Government has identified the following thrust areas for increasing demand: l Further push to housing development programmes;l Promotion of concrete highways and roads; l Use of ready-mix concrete in large infrastructure projects; and l Construction of concrete roads in rural areas under Prime Minister’s Gram Sadak Yojana Any delay or change in Government policy may adversely affect cement demand. The growth in cement consumption is linked to the GDP. Further, Cement consumption also depends on external factors such as infrastructural spending and fiscal incentives given by the government. Although the chances of country going into recession are remote, the recession would affect the cement demand adversely and this may also impact the cement prices. Cement is a heavily taxed commodity with both the Central and the State Government levying the taxes. Any other increase in taxes will have an adverse impact on the profitability. Proposed Government action to bring Cement under Essential commodities Act could adversely affect the Industry. On the input side coal availability is emerging as a risk in-spite of the fact that India is the world’s third largest coal producer. Continuous increase in price of coal is hampering the profitability. Sectors that will be directly impacted by the coal shortage are power, cement and steel. It could be the right time

for the Government to seriously look into the possibility of opening the coal sector for privatization besides effectively implementing its policy of opening coal sector for captive coal mining. Any further worsening of domestic coal availability and transportation infrastructure could hamper cement production.

Highlights of the Year

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 Company firmly recognizes that its human resources are the major source of strength to achieve the Company vision. There is a great team spirit amongst the member of staff. They are key to achieving its vision and are the primary source of competitive advantage. The total number of permanent employee of the Company as at March 31, 2009 was 1664. Further, the Company has a stable and experienced middle and senior level management team, many of whom have been with the Company for more than 21 years. Labour relations have been cordial for over two decades with no interruption of manufacturing activities.

INTERNAL CONTROL SYSTEMS

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, andhead 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 welldocumented

policies, guidelines, authorizations, and approval procedures. The Company has an Audit

committee that regularly reviews the reports submitted by the Internal Auditors. The IT

environment is being upgraded on a continuous basis with a view to keep pace with the rapid

changes taking place in the external environment

CHAPTER -2

Introduction

1. INTRODUCTION OF J K CEMENT WORKS

1.1 HISTORY BEHIND J K CEMENT

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 manufacturer of small machinery parts like ‘V' belts, etc. They established few small cotton textile industries also.

In the year 1914 they shifted their business from Calcutta to Kanpur where they established many big industries like J.K. cotton Mills, Straw product Co, Lohia Mach, J.K. Pulp and Raymond’s Woolen, etc.

In the year 1934 J.K. organization started one more division, as J.K. Synthetics Ltd. They established various big plants of Nylon, Acrylic fiber, etc. at Kota and Tyre Cord, Chemical and Pesticides at Jhalawar.

In the year 1974 under the same division one more unit was started for manufacturing of Grey Cement at Nimbahera.

The present cement factory was commissioned in the year 1974. The plant started its production from 27th Dec 1974.

Ist plant / kiln was commissioned in 1974 and the capacity of this plant was 900 tonne per day and 3 lakh tonne per year. After modification in Preheater, its present capacity is 1200 TPD.

Expansion of this plant took place in the year 1979, when 2nd kiln was commissioned with a capacity of 1200 tonne per day and 7 lakh tonne per year. After modification in Preheater its present capacity is 1800 TPD.

Again in the third phase, a kiln was erected in the year 1982 and production of this kiln was 1350 tonne per day.

In the year 1988 a new technology was introduced in this 3rd Kiln that consisted of precalcination process, which raised the capacity of this plant to 3400 tonne

per day, which was earlier 1350 tonne per day. In Aug.-2003 after again some modification in Preheater and Folex cooler its capacity is increased to 5000 TPD.

Besides, J.K. cement plant is having its own diesel generator sets, producing power to meet the power energy requirements.

Main raw material for cement is LIMESTONE, for limestone we have our own open cast mines adjoining to the plant. Besides we have developed few more mines at Maliakhera, Karoonda and Tilakhera for producing 10,000 tonnes limestone per day as needed.

J .K. Cement erected one more plant from Jan. 2001 with the capacity of 1400 tonne per day at village Mangrol. In Nov.-2003 after modification in Preheater and installation of Mechanical elevator its capacity increased to 2200 TPD.

Due to power shortage as imposed by Ajmer electricity supply board J.K. established its own Thermal Power Plant at village Bamania, near Shambhupura, which is generating 15 M.W. power every day, which is consumed by J.K. Cement Plant.

J K Cement also has a plant of 400TPD installed capacity of White Cement at Gotten, Nagour (Raj).

Cement Plant at Karnataka of over 5500 TPD 1and Thermal Power Plant of capacity 30 MW.

Thermal Power Plant at Nimbahera of 22 MW.

Waste Heat Recovery Plant at Nimbahera of 15 MW capacity.

J.K. Cement has started the following projects:

J K Cement Project at Fuzairah, UAE

J.K. cement is one of the most productive, cost efficient cement producing plant in the country, a company, believing in corporate responsibility to society, integrity and fairness. The company’s cement is sold under the J.K. Sarve Shaktiman brand name, enjoys good brand image and a price premium.

The following types of cements are produced by J K Cement Works.

(a) Ordinary Portland Cement (OPC)

(b) Portland Pozzolana Cement (PPC)

(c) Super Silicate Cement (SSC)

(d) Masonry Cement (MC)

J. K. Cement manufactures and markets cement and clinker for both domestic as well as exports markets.

1.2 PRESENT CAPACITY AND PERFORMANCE

1.2.1 CLINKER PRODUCTION – Nimbahera and Mangrol Plant

Ist Plant / Kiln 1200 Tonne Per Day (TPD)

IInd Plant / Kiln 1800 TPD

IIIrd Plant / Kiln 5000 TPD

IVth Plant at Mangrol 2200 TPD

Total Capacity 10200 TPD

1.2.2 PRODUCTION ANALYSIS TABLE: IN TONS – Nimbahera and Mangrol Plant

Year Clinker Cement

2005-06 3170268 3511022

2006-07 2907196 3638786

2007-08 2917045 3690726

2008-09 3024091 3646220

1.2.3 FINANCIAL ANALYSIS: IN Million - J K Cement Ltd.

2. MANAGEMENT SET- UP

2.1 Corporate Level- Kanpur

Chairman - Dr Gaur Hari Singhania

Managing Director - Shri Y P Singhania

Advent Institute of Management Studies

Year Turnover PBT

2005-06 11087 522

2006-07 15297 2720

2007-08 18128 3466

2008-09 18765 2340

Group Executive President - Shri R G Bagla

2.2 Unit Heads:

President Shri D Ravisankar J K Cement, Nimbahera, Mangrol and Mudhol, Karnataka Plants

President Shri B K Arora J K Cement- White and Grey Plants at Gotten

2.3 Other Services:

President Shri M P Rawal Management & Technical Services & Marketing -South

President Shri R C Shukla Grey Cement Marketing - North

President Shri V P Singh White Cement Marketing

J K Organization

J K Cement Ltd.

J K White,

Gotan (Raj.)

White Cement –1000 TPD Grey Cement – 1200TPD

CPP – 7.5MWJ K Wall Putty

J K Cement Works,

Nimbahera (Raj.)

Grey Cement–

8000TPD

C P P – 22MW

J K Thermal Power, Bamania (Raj.)

J K Cement Works,

Mangrol (Raj.)Grey

Cement–2200TPD

J K Cement, Mudhol, Karnataka

Grey Cement –

Project J K Cement Fuzairah, UAE

Production & Location

REGIONAL TRAINING CENTRE- NORTH

SECOND DECADE OF COMPETENCY ENHANCEMENT AND SKILL

DEVELOPMENT IN CEMENT INDUSTRY

The Regional Training Centre - North is a premier training centre of North India promoted with

assistance from World Bank, DANIDA and Govt. of India as a unique HRD project in Cement

Industry. It is equipped with modern training aids and caters to the skill enhancement and

competency developmental needs of more than 20 cement and other plants. It has trained over

8000 technical and managerial personnel during the last 14 years. The centre has conducted many

tailor-made in-house programs for cement and other industries:

ABROAD :

Oman Cement, Oman Star Cement, Dubai Hama Cement, Syria / EHDASSE Sanat Corp. Iran.

INDIA:

J & K Cement, Srinagar Thermax Ltd., Pune Jindal Steel & Power Ltd., Raigarh, etc.RTC has specialized packages / modules in Mining, Process, Maintenance disciplines like Operation & Maintenance of HEMM / Gear-boxes / Pumps / Compressors / Electrical & Electronics Equipments / Energy Conservation / Environment Management and Machinery Alignment, etc. designed and developed by renowned International / National agencies like FLS Denmark, NCCBM, TATA Interactive Systems, VEC, NITTTR, etc. More than 100 senior line mangers from ten plants have been trained at Denmark, NITTTR, Bhopal and Chennai, who act as resource persons for these programs. Besides, OEM’s and management experts of national repute are invited for various technical and management programs to make them effective and gainful experience for the participants.

CORPORATE SOCIAL RESPONSIBILITY

J K Cement has contributed significantly to the development of various services in

and around its offices and plants. Some of such activities can be enumerated as

under :

Education Schools and University:

Dr Gaur Hari Singhania Institute of Management & Research, Kanpur Sir Padampat Singhania Technical University at Bhatewar, Udaipur. J K Institute of Technology – JKIT at Nimbahera Padam Vidya Vihar – Primary School at Nimbahera Kailash Vidya Vihar – Sr Secondary School at Nimbahera Sr Secondary School, Gotan

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 Running Regional Training Centre for Cement technocrat’s aided by WB &

DANIDA. Various constructions in nearby govt. Schools of Chittorgarh district. We are involved in girls school (under construction) and committed reasonable

financial contribution for above

Medical services:

Rs. 36 lacks contribution for the construction of govt. Hospital at Nimbahera. Ambulance to govt. Hospital. Free facility of pathological laboratory for the persons of surrounding area. Financial contribution to various NGOS for medical camps in the district. Financial contribution for construction of dispensary & health centre in nearby

villages. Free Homeopathic consultancy/medicines for the patients of nearby area.Religious services

Radhakrishna temple at colony premises. prayer hall in hanuman temple in Nimbahera. Bheemkeshwar temple in staff colony. Dharmashala at Bhanwarmata (tourist/ religious place). 8 rooms for Dharamshala at Pashupati Nath temple in Mandsaur (M.P.). Various temples in number of nearby villages.

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.

Other social services

Construction of approach roads in and around villages of mining area. Digging of tube wells. Supply of tube well pumps. Construction of water tanks. Supply of drinking water in tankers in nearby needy places during summer. Regular plantation in plant, colony and nearby villages. Direct and indirect employment to thousands of persons of surrounding area. Financial helps to NGOS. Financial aid to organize religious festivals by municipal board.

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.

HISTORY OF CEMENT

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.

However, It was in 1824, sixty-eighty years after the discovery of hydraulic properties of lime Joseph Aspdin patented his product, which was called "Portland Cement" The plants manufacturing portland cement outside England were commissioned in Belgium and Germany in 1855. The interest that is evoked in the technology o f cement resulted in the development of Rotary kilns in 1886.

Modern cement is the outcome of the combined research and development efforts of chemists, technologists and architects. The cement technology is an offshoot of the overall development in other industries, technology, constructional activities and knowledge and the availability of raw material.

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

The most common type of cement used by concrete manufacturers is Portland cement, which is prepared by igniting a mixture of raw materials mainly composed of calcium carbonate or aluminum silicates. According to ASTM standard specification C 150, Portland cement is defined as “a hydraulic cement produced by pulverizing clinker consisting essentially of hydraulic calcium silicates, usually containing one or more of the forms of calcium sulfate as an interground addition” . The phase compositions in Portland Cement are shown below and they are denoted as tricalcium silicate (C3S), dicalcium silicate (C2S), tricalcium aluminate (C3A), and tetracalcium aluminoferrite (C4AF).

Components of Portland Cement

Description Formula % Composition

Tricalcium Silicate (C3S) 3CaO SiO2 49

Dicalcium Silicate (C2S) 2CaO SiO2 25

Tricalcium Aluminate (C3A) 3CaO Al2O3 12

Tetracalcium Aluminoferrite (C4AF)

4CaO Al2O3 Fe2O3

COMPOSITION OF ORDINARY PORTLAND CEMENT:

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.

Ingredient Percentage Range

Lime 64 64-68

Silica 22 17-25

Alumina 5 3-6

Calcium sulphate 4 3-5

Iron Oxide 3 3-4

Magnesia 2 0.1-3.0

Sulphur 1 1-3

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 dicalcium 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:-

Tricalcium Silicate (C3S)

2(3CaO-SiO2 ) + 6H2O → 3CaO - 2SiO2 – 3H2O + 3Ca (OH)2

Dicalcium Silicate (C2S)

2(2CaO-SiO2 ) + 4H2O → 3CaO - 2SiO2 – 3H2O + Ca (OH)2

Tricalcium Aluminate (C3A)

3CaO-A12O3 + 6H2O → 3CaO – A12O3 –6H2O

Tetracalcium Aluminoferrite (C4AF)

4CaO-A12 O3 – Fe2O3 + 2Ca(OH)2 + 10H2O → 3CaO – A12O3 –

6H2O+3CaO-Fe2O3-6H2O

TYPES AND USES OF CEMENT:

(a) Type of Cement:

Grey Cement

White Cement

(b) Uses of Cement:

Types of Cement Application

Ordinary Portland Cement (OPC)

General construction

Portland Slag Cement General construction and marine works.

Portland Pozzolona Cement (PPC)

General construction, hydraulic construction & marine.

White Portland Cement Architectural purposes, decorative work and in manufacturing of titles.

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.

Low Heat Portland Cement

Where low heat on hydration is required as in mass concrete for dams.

Super Sulphated Cement

In a varity of aggressive conditions like marine works, concrete sewers carrying industrial effluents.

High Alumina Cement Mainly as refractory cement and as structural material giving high early strength development in cold regions.

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

The major quantity of limestone is obtained from the captive limestone mines.The methods of mining are discussed as under.

MINING METHODS

Limestone mining operation traditionally is carried out generally as Opencast mining in India. However, newly developed Eco-friendly Surface Miners also find use in limestone mines today in J K Cement plants.

Planning and executing a systematic exploration programme.

Draw scope of drilling campaign. How to carry out survey and perform drilling activities for exploration purpose.

Establish system for computerized mine-planning in order to ensure supply of limestone with consistent quality.

Planning and executing drilling and blasting programme in normal course at site to take optimum output from blasting as well as achieving economy in explosive consumption.

(Approximate boulder size: 1.0 M * 1.4 M * 1.1M)

Loading and transportation of lime stone boulders to crusher site.

Implementing statutory requirement for safety and environment

Resources:

(a) Explosives

(b) Equipment:

Drilling Machines

Excavators / Shovels

Dumpers

Dozers

Loader

(C) Operations:

Drilling and Blasting

Loading and transportation

DRILLING / BLASTING METHODS OF MINING

Out of the eight cement plants of J K Cements Limited, seven plants are raising the limestone from their captive limestone mines by using drilling and blasting techniques. Sequential Timer Blasting Machines are used for blasting operations. This timer machine reduces the problem of noise, ground vibrations and improves fragmentation by introducing inter row delays. Noise, dust and illumination surveys are conducted at regular intervals in our mines to keep the same under control. Instruments used for noise and surveys include Noise Dosimeter and Gravimetric Dust Sampler respectively. Equipments used in this method of Open cast Mining includes HM-25 dumpers, Poclain & Demag shovels, Hindustan and Beml loaders, Beml dozers etc. The limestone produced by this method are in the form of big boulders having their physical dimensions may be from 1.5 meter to small fragment size upto few millimeters. Therefore before taking the limestone to grinding machines boulder crushing in one or two stages is required for reducing the size of limestone for preparing suitable feed size to grinding mills.

MINING WITH SURFACE MINER

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 a single stage crushing machine depending upon the size of the boulder produced while mining. This also depends on the type of grinding mills used for grinding of raw materials for preparation of finally pulverized raw meal. Jaw crushers as well as impact crushers / hammer crushers of different capacities are employed in J K Cements Ltd., for reduction of size of limestone boulders to a suitable feed size acceptable to the different types of grinding machines installed in plants. The crushers are mainly installed at the plant site. The limestone produced in the mine is transported to crusher site with the help of dumpers and tippers of different capacities. In some mines the crushers are installed at mine site and crushed limestone is transported to plant stackpile with the help of Belt conveyor / Ropeway. Figure 6.3 below illustrates the raw limestone mining and crushing at a limestone mine of a cement plant.

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 help of stacker machine, which moves to and fro along the side of stacking yard. The stacked materials is then cut in slices with the help of a reclaiming machine which mixes the layers of stacked limestone which reduces the variation in quality of limestone as compared to the large variations obtained in the limestone obtained from mines. The full fledge stack pile ready for reclaiming and feeding to raw mill hoppers can be seen in the above figure.

STACKER & RECLAIMER AT J K CEMENT WORKS

Purpose:

Homogenization of crushed limestone.

Stacker:

Fig. 6.3Fig. 6.3

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.

GRINDING OF RAW MATERIALS

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 representation of raw mill grinding section in a cement plant where raw mill hoppers, vertical roller mill alongwith dust collecting arrangement can be seen.

Materials used for grinding

Limestone and additives (Raw Mix) Coal and other fuels Clinker

Feed size of incoming materials

Limestone 25mm Size for Ball Mills 35mm Size for VRM (Segregated)

(Secondary Crusher is used to feed Ball Mills)

Coal – 25mm size Clinker – 25 to 35 mm size.

Fineness of output materials

Raw Mix: 15 – 17 % Residue On 90 #1.8 – 2.2 % Residue On 200 #

Coal Powder: 15 – 17% Residue On 90 #18-22 % Residue On 90 #

(For use in Pre-Calciner, there is separate arrangement to grind coal)

Cement: 33 Grade – 2600 To 2800 Blaine43 Grade – 2850 To 3000 Blaine 53 Grade – 3200 To 3400 Blaine

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)

Clinker Grinding: Ball Mill Combination of Roller Press and Ball Mill(Open circuit and closed circuit used. In closed circuit systems, fixed

and dynamic separators are used.)

Materials used for grinding

Limestone and additives (Raw Mix) Coal and other fuels Clinker

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

The modern pyroprocessing system comprises of three important sections namely preheating and precalcining, clinkerisation and cooling. The preheating section is 90-100 meters tall and comprises of battery of cyclones arranged one over the other in series. The modern preheaters are comprising of 5-6 stage of low pressure cyclone as compared to conventional 4 stages of cyclone preheaters. The riser ducts of top stage cyclones are connected with powerful induced draft fan also known as preheater fan, smoke gas fan etc. Precalcining of raw meal is carried out in separate vessel vertically held and placed in between preheating and clinkerisation section. The clinkerisation reaction is carried out in a rotary kiln. The rotary kiln is a long cylindrical shell provided with refractory bricks from inside which prevents the heat loss from the kiln and protects the steel shell from any damage due to persistent high temperature maintained inside the kiln. The kiln is inclined at an angle of about 3-5o from horizontal from preheating to the cooling end. The kilns are mounted on tyres and rotated at a speed of 2.5-4 rpm. The dry and properly blended raw meal is lifted either by Air lift or mechanically by Bucket Elevator from the bottom of raw meal blending / storage silo to the top of the preheater, and fed at the top stage of cyclone inlet duct with the help of screw conveyor and rotary air lock. Raw meal weigh-feeders are installed for continuous weighment of raw meal for feeding the same to preheater at a constant rate.

To transform Raw Mix into CLINKER through PYRO-PROCRESSING.

Sections of a Typical Kiln System:

KILN feed system.

Pre-heater (Four stage to Six stage)

Pre-Calciner (ILC, SLC)

Cooler (including Clinker Hammer)

Planetary Cooler Grate Cooler

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 include:

Dehydration of the argillaceous minerals; decomposition of the carbonates (decarbonisation or expulsion of CO2 commonly known as calcination); reactions in solid phase and reactions with the participation of one liquid phase and crystallizations.

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 SiO2 to form C2S and later with more CaO to form C3S. Some CaO will also react with Al2O3 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.

COAL GRINDING SYSTEM

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.

Conversion of raw meal into cement clinker is accomplished in steps in various zones of kiln circuit. The pulverized fuel (about 35-40% of total fuel to be fed to kiln system) is pushed into the burning zone of rotary kiln through a specially designed burner pipe along with the carrier air known as Primary air. The high temperature persisting in burning zone makes the fine coal to burn near the tip of burner pipe and helps in flame propogation.

Fig. 6.5.1

The combustion gases generated from burning of purlverized coal in clinkerisation zone of the kiln flow towards the inlet of PH fan under the influence of the induced draft created in the kiln circuit. While flowing from burning zone towards the inlet of fan after passing through Kiln Precalciner–Preheater circuit, the high temperature combustion gas transfer its heat to the finally derived raw meal which is fed to the inlet duct of 1st stage twin cyclone and falls towards the bottom end of preheater after passing through all stages of cyclones under the influence of hot gases flowing in the circuit. The moisture and other volatile contents present are completely driven away and thus raw meal attains a precalcination of about 35-40% before reaching the precalcining vessel installed in between preheater and kiln. The precalciner is fired with 40-55% of total pulverized fuel for increasing the precalcination degree of raw meal upto 90-92% before the same is fed to kiln for accomplishing the clinkerisation reaction. The remaining 8-10% degree of calcinations of raw meal is performed in the kiln before the meal enters in to the burning zone. Thus burning zone in rotary kiln receives complete decarbonated material, the part of which is transformed into liquid after achieving appropriate melting temperature of some of the raw meal components and powdery form of raw meal gets converted into nodulized clinker form. The final clinkerisation of raw meal is achieved between the temperature range of 1250-1450oC depending upon the raw meal characteristics. The high temperature clinker nodules varying in size then fall out of the kiln and enter the cooler. Most of the Kilns in J K Cements Ltd are provided with modern folax grate coolers except in Sankari wet process plant where planetary coolers are provided for performing clinker cooling operation.

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.

Strength development of concrete is the result of hydration of the particles. Smaller the particles, larger the specific surface and faster the hydration. Particles coarser than 30–50 microns hydrate very slowly and will only affect late strengths. On the other hand, superfine particle with 2-3 micron size may hydrate before the concrete has been cast and will have limited influence on strength development.

In order to achieve the objectives of energy conservation, the clinker produced in rotary kiln cooled in cooler is usually stored for few days before it is ground in cement grinding mills along with appropriate quantity of gypsum and other additive materials for production of finely pulverized cement with desired fineness.

The Ball / Tube mills (in open circuit or closed circuit mode) are used for clinker grinding in cement plant worldwide. However, the energy requirement of Ball Mills . Being comparatively higher towards reducing energy consumption in cement grinding newer types of energy efficient equipments like Vertical Roller Mills, Roll Presses / Roller Presses in combination with Ball Mill / Closed Circuit Ball Mills, Horro Mills etc., are now being used for grinding cement clinker. Most of the plants in J K cements Limited are using tube mill grinding machines for cement grinding. The cement grinding unit along with dust collector, cement storage silo and the dispatch section are illustrated in the figure 6.6 shown.

CEMENT STORAGE PACKING & DESPATCH

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

Fig. 6.6.

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:

50 Kg and small size packs as per market demandPackers:

Mechanical Packers Electronic Packers

QUALITY CHARACTERISTICS OF 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 prod-

uct / 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:

Loss on ignition [LOI]

Insoluble residue [IR]

Sulphur trioxide [SO3]

Magnesium oxide [MgO]

Total chloride [Cl]

Lime saturation factor [LSF]

Alumina modulus [AM]

PHYSICAL PROPERTIES

Fineness

Consistency

Setting time – initial and final

Soundness

Compressive strengths (3 days, 7 days and 28 days)

CHAPTER 3 RESEARCH METHODLOGY OF J.K.CEMENTRESEARCH

METHODOLOGY Research is common parlance to refer to a search for knowledge. We can also define research as “Scientific ad systematic search for pertinent information on a specific topic” Research is careful investigation or inquiries for new facts in any branch of knowledge. Researches are basically systematic inquiry with customer’s critical examination with objectives to search new facts or interpret know facts in new

light.Objective of Research :-

The main objective of study is to ratio analyses comparison to the other cements comparisons important in modern business. When we analyze and interpret the financial statement analysis Working involves investment of funds of the company.

The process of research methodology of j.k. cement –

1. Formulating the research problem: overt difficulties, latent difficulies

2. Extensive literature survey :- Management Accounting, & past records

3. Development of working hypotheses: logical & empirical consequences

4. preparing the research design.:- exploratory research , conclusive research

5. Determining sample design ;- systematic ,simple random sampling probability sampling & non probability sampling

6. Collecting the data ;- secondary data sources

7. Execution of the project :-interview & collection data

8. analyses of data ;- tables, graphs & Graphical Representation

9. Hypothesis testing;- quantitative statistics statement

10. Generalization and interpretation; all data interpretation help of data

11. preparation of report:- introduction, summary, main report, conclusion, suggestions help of book , journals, reports etc.

Research Process of J.K. Cement:-

Extensive Literature survey

Development of Working Hypotheses

Preparing the Research Design

Determining sample Design

Formulating the Research problem

Execution of the project

Analysis of Data

Collecting the Data

Hypothesis Testing

CHAPTER 4

FINANCIAL ANALYSES

J.K.CEMENT

Generalization and Interpretation

Preparation of the Report or the Thesis

“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.

Given the comparisons based on:

1. PE Ratio

2. EPS (TTM)

3. NET SALES

4. FACE VALUE

5. NET PROFIT

6. DIVIDEND

7. BALANCE SHEET

COMPARISION OF PRICES WITH OTHER PEERS:-

18 Jul 17:31

Company 1 Year 9 Month 6 Month 3 Month 1 Month 2 Week 1 Week Last

ACC 1133.1

-52.46%

1036.0

-48.00%

37.69%

-32.69%

-16.25%

14.06%

-0.84%

538.70

Ambuja

Cements

-40.35%

42.98%

131.95

37.25%

-27.05%

-8.66%

15.16%

Andhra

Cement

-20.67%

31.81%

41.60%

-11.03%

-0.21%

12.26%

Barak Vally

Cement

-47.99%

47.99% 49.61% -17.19% -12.59% -1.35% -8.91%

Binani

Cement

-26.55%

56.16%

116.60

57.29%

-38.90%

-19.35%

-4.60%

Birla Corp 300.9

-46.06%

50.96%

272.10

40.35%

-22.25%

-18.61%

-1.79%

162.30

Burnpur

Cement

-65.37%

65.37%

57.71%

-31.26%

-21.90%

-5.31%

Chetinad Cem 433.0

11.55%

10.54%

452.50

-0.07%

-4.50%

-3.40%

-3.59%

483.00

Dalmia

Cement

-42.27%

59.06%

481.90

55.62%

-26.11%

-19.33%

-4.57%

-5.54%

213.85

Gujarat 21.0 28.7 32.20 21.0 21.7 23.6 22.2 22.40

Siddhee

Cement

21.95%

30.43%

-5.08%

India Cements 229.3

-40.83%

53.15%

251.95

46.14%

-27.30%

-17.28%

135.70

JK Cement 158.7

-19.82%

27.31%

184.70

31.10%

-16.39%

-9.46%

-6.57%

-3.56%

127.25

LakshmiCemen

137.20

-41.44%

-56.87%

52.37%

32.31%

18.09%

-3.60%

-9.82%

386.00

-33.50%

-31.57%

61.46%

42.16%

24.99%

232.10

10.60%

258.15

-0.56%

256.70

Madras Cements 3497.80

-28.92%

4039.5

-38.45%

3779.4

34.21%

3353.3

25.86%

2896.5

14.16%

2763.75

-10.04%

2536.45

-1.98%

2,486.30

Mangalam

Cement

170.30

-45.57%

-55.48%

42.80%

31.69%

18.15%

101.40

-8.58%

-3.24%

Mysore Cement 57.35

-49.35%

-44.03%

41.02%

21.49%

12.24%

12.38%

-8.93%

OCL India 151.60

-36.81%

-49.78%

65.82%

37.02%

25.59%

-0.10%

102.50

-6.54%

Panyam Cements 77.05

143.2%

104.19%

160.40

16.86%

153.15

22.40%

187.45

Prism Cement 49.50

-33.54%

-49.89%

-5.60%

42.53% 26.15% 12.15%

Rain Commoditie 147.00

19.46%

31.15%

30.59%

20.18%

169.20

188.40

-6.79%

175.60

Saurastra

Cement

-44.79%

-49.23%

45.75%

14.50%

24.50%

14.05%

Shree Cements 1452.05

-64.75%

1448.0

-64.65%

1275.1

59.86%

1077.8

52.51%

31.82%

522.70

-2.08%

529.70

-3.37%

511.85

Shree Dig Vijay 24.55

-43.18%

-56.20%

63.24%

33.73%

25.40%

-5.10%

Ultra Tech

Cement

957.00

-43.59%

1044.2

-48.30%

38.58%

30.08%

14.59%

534.20

551.35

-2.09%

539.85

J.K. CEMENT V/s ACC Ltd.

PARTICULARS J.K. CEMENT ACC Ltd.

Total Share Capital 69.93 187.83

Net Worth 1053.34 4152.71

Total Debt 510.53 306.41

Net Block 1089.13 3314.72

Investments 9.50 844.81

Net Current Assets 329.43 -349.60

Total Assets 1563.86 4459.12

J.K. CEMENT ACC Ltd.

BSE: Jul 18,15:57 BSE: Jul 18,16:00

127.25 3.45 (2.79%) 538.70 -0.10(-0.02%)

Vol- 4,362 Vol- 124,908

P/E Ratio: 3.36% P/E Ratio: 7.06

Face Value: 10 Face Value: 10

Dividend: 50 Dividend: 200

EPS (TTM): 37.92 EPS (TTM): 76.33

Net Sales: 1458.25 Net Sales: 6894.79

Net Profit: 265.17 Net Profit: 1438.59

J.K. CEMENT V/s AMBUJA CEMENT

PARTICULARS J.K. CEMENT AMBUJA CEMENT

Net Worth 1053.34 4661.25

Total Debt 510.53 330.42

Net Block 1089.13 2959.86

Net Current Assets 329.43 39.86

Total Assets 1563.86 4991.67

J.K. CEMENT AMBUJA CEMENT

BSE: Jul 18,15:57 BSE: Jul 18,15:57

127.25 3.45 (2.79%) 82.80 1.10 (1.35%)

Vol- 4,362 Vol- 355,769

P/E Ratio: 3.36 P/E Ratio: 7.39

EPS (TTM): 37.92 EPS (TTM): 11.21

J.k. CEMENT V/s BINANI CEMENT

PARTICULARS J.K. CEMENT BINANI CEMENT

Net Worth 1053.34 417.64

Total Debt 510.53 770.47

Net Block 1089.13 1048.28

Total Assets 1563.86 118.09

J.K. CEMENT BINANI CEMENT

BSE: Jul 18,15:57 BSE: Jul 18,15:53

127.25 3.45 (2.79%) 49.80 .65 (1.32%)

Vol- 4,362 Vol- 7,618

EPS (TTM): 37.92 EPS (TTM): 10.67

J.K. CEMENT V/s BIRLA CORPORATION

PARTICULARS J.K. CEMENT BIRLA CORPORATION

Net Worth 1053.34 1004.98

Total Debt 510.53 227.50

Net Block 1089.13 500.80

Total Assets 1563.86 1232.47

J.K. CEMENT BIRLA CORPORATION

BSE: Jul 18,15:57 BSE: Jul 18,16.01

127.25 3.45 (2.79%) 162.30 3.10 (1.95%)

Vol- 4,362 Vol- 7,433

EPS (TTM): 37.92 EPS (TTM): 51.11

CHAPTER 5

DATA ANALYSIS

INTERPRETATION

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

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)

Changes

Particulars Mar ' 08 Mar ' 09 Absolute % Ratio

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

Operating profit (1)-(2) 415.66 324 -91.66 -22.05% -0.22

Other recurring income 23.19 17.05 -6.14 -26.48% -0.26

Adjusted PBDIT 438.85 341.06 -97.79 -22.28% -0.22Financial expenses (Intrest) 51.21 54.67 3.46 6.76% 0.07

Depreciation 41.07 52.42 11.35 27.64% 0.28

Other write offs - - - - -

Adjusted PBT 346.57 233.96 -112.61 -32.49% -0.32

Tax charges 81.4 91.62 10.22 12.56% 0.13

Adjusted PAT 265.17 142.34 -122.83 -46.32% -0.46

Nonrecurring items - - - - -Other non cash adjustments - - - - -

Reported Net Profit 265.17 142.34 -122.83 -46.32% -0.46 Table 2: Comparative Income Statement

J.K.Cement Ltd.

COMMON SIZE BALANCE SHEET

as on 31st March 2008 and 2009 (In Rs. Crore)

Particulars

Absolute Percentage

Mar ' 08 Mar ' 09 Mar ' 08 Mar ' 09

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%

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)

Particulars

Absolute Percentage

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%

Operating profit (1)-(2) 415.66 324 28.50% 21.65%

Other recurring income 23.19 17.05 1.59% 1.14%

Adjusted PBDIT 438.85 341.06 30.09% 22.79%Financial expenses (Interest) 51.21 54.67 3.51% 3.65%

Depreciation 41.07 52.42 2.82% 3.50%

Other write offs - -

Adjusted PBT 346.57 233.96 23.77% 15.63%

Tax charges 81.4 91.62 5.58% 6.12%

Adjusted PAT 265.17 142.34 18.18% 9.51%

Nonrecurring items - - - -Other non cash adjustments - - - -

Reported Net Profit 265.17 142.34 0.18 9.51%Table 4: Common Size Income Statement

COMPARISONS OF RATIOS & INTERPRETATION

1. Liquidity Ratios: Current Ratio

Current Assets

Current Ratio = Current Liabilities

. . . . . In Rs. Crore . . . . .Particulars

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

Current Assets (1) 283.79 530.92 541 671.06 912.9

Current Liabilities (2) 258.79 259.9 297.62 341.63 426.43

Current Ratio (1/2) 0.93 1.63 1.43 1.96 2.14 Table 5: Current Ratio

Graph 1.1: Current Ratio

Graph 1.2: Current Ratio

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

inventories. However in next year current ratio has decreased but in the year 2007 –

2008 it is 1.96, which is close to ideal ratio & shows that company has company has

adequate current assets to meet its current obligations. However a further increase

in this ratio in year 2008-2009 indicates that company has piled up extra inventories.

Liquidity Ratios: Quick Ratio

Quick Assets

2. Quick Ratio = Current Liabilities

ParticularsMar '05 Mar '06 Mar '07 Mar '08 Mar '09

Quick Assets (A) 201.86 426.24 419.64 556.86 759.05

Current Liabilities (B) 258.79 259.9 297.62 341.63 426.43

Quick Ratio (A/B) 0.78 1.64 1.41 1.63 1.78

Table6:QuickRatio

. . . . . In Rs. Crore . . . . .

Super Quick Ratio. . . . . In Rs. Crore . . . . .

cash & Bank Bal. + F.D. (A) 68.15 285.42 192.53 145.44 125.2

Current Liabilities (B) 258.79 259.9 297.62 341.63 426.43

Super Quick Ratio (A/B) 0.26 1.10 0.65 0.43 0.29

Table 7: Super Quick Ratio

Graph 2.1: Quick Ratio

Graph 2.2: Quick Ratio

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

2. Interest Coverage Ratio

------------------- in Rs. Cr. -------------------

Particulars Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

Long Term Fund (A) 554.43 553.54 527.76 510.53 564.4

Equity (B) 56.26 355.91 515.37 762.19 908.2

PBDIT 47.83 141.86 358.41 438.84 341.06

Less : Depreciation 12.56 31.02 33.16 41.07 52.42

Net Profit before interest and taxes (C)

35.27 110.84 325.25 397.77 288.64

Interest (D) 24.33 58.59 53.26 51.21 54.67

Debt-Equity Ratio (A/B) 9.85 1.56 1.02 0.67 0.62

Interest Cover (C/D) 1.45 1.89 6.11 7.77 5.28

Table 8: Debt-Equity Ratio & Interest Cover

Graph 3.1: Debt-Equity Ratio

Graph 3.2: Debt-Equity Ratio

Graph 4.1: Interest Coverage Ratio

Graph 4.2: Interest Coverage Ratio

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.

Interest coverage ratio of company is satisfactory as profits of company in all the 5

years are more than of interest obligations. It means that company is able to pay

interest out of profits very easily.

4. ACTIVITY RATIOS

I. Capital Turnover Ratio

II. Fixed Assets Turnover Ratio,

III. Net Working Capital Turnover Ratio

IV. Stock Turnover Ratio

V. Debtors Turnover Ratio.

------------------- in Rs. Cr.

-------------------

Sales Turnover (A) 329.4 873.7 1,233.30 1,458.30 1,502.46

Capital Employed (B) 947.77 1,227.82 1,347.87 1,563.87 1,750.45

Net Fixed Assets (C) 921.07 897.99 922.44 1,089.13 1,215.75

Current Assets (D) 283.79 530.92 541 671.06 912.9

Current Liabilities (E) 258.79 259.9 297.62 341.63 426.43

Net Working Capital (D-E = F)

25 271.02 243.38 329.43 486.47

Capital Turnover Ratio (A/B)

0.32 0.7 0.9 0.93 0.86

Fixed Assets Turnover Ratio (A/C)

0.36 0.97 1.34 1.34 1.24

Net Working Capital Turnover Ratio (A/F)

13.18 3.22 5.07 4.43 3.09

Table 9: Capital Turnover, Fixed Assets Turnover, Net Working Capital 1.

I Capital Turnover Ratio:-

Graph 5.1: Capital Turnover Ratio

Graph 5.2: Capital Turnover Ratio

Interpretation

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.

Graph 6.1: Fixed Assets Turnover Ratio

Graph 6.2: Fixed Assets Turnover Ratio

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.)

III Working Capital Turnover Ratio

Graph 7.1: Working Capital Turnover Ratio

Graph 7.2: Working Capital Turnover Ratio

Interpretation

There is no stable increase in working capital ratio which is due to ineffective control

of the management over working capital utilization.

IV .Stock Turnover Ratio

Cost of Goods Sold (Sales)

Stock Turnover Ratio = Average Inventory

------------------- in Rs. Cr.

-------------------

Net Sales (A) 329.4 873.7 1,233.30 1,458.30 1,502.46

Opening Inventory 54.25 66.56 83.98 110.01 114.53

Closing Inventory 66.56 83.98 110.01 114.53 136.13

Average Inventory (B) 60.405 75.27 96.995 112.27 125.33

Inventory Turnover Ratio

5.45 11.61 12.72 12.99 11.99

Table 10: Inventory Turnover Ratio

Graph 8.1: Inventory Turnover Ratio

Graph 8.2: Inventory Turnover Ratio

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.

V. Debtors turnover ratio

[Debtors Turnover Ratio = Net Credit Sales / Average Trade Debtors]

--------

----------- in Rs. Cr. -------------------

Net Sales (A) 329.4 873.7 1,233.30 1,458.30 1,502.46

Opening Debtors 42.27 42.27 46.13 62.16 57.26

Closing Debtors 42.27 46.13 62.16 57.26 53.04

Average Debtors (B) 42.27 44.2 54.145 59.71 55.15

Debtors Turnover Ratio (A/B) 7.79 19.77 22.78 24.42 27.24

Average Collection Period

(365/Debtors T.O.Ratio)

46.84 18.47 16.02 14.94 13.40

Table 11: Debtors Turnover Ratio & Average Collection Period

Interpretation

Debtors Turnover Ratio

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.

Graph 9.1: Debtors Turnover Ratio & Average collection period

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.

5. Profitability Ratios

1. Gross Profit Ratio.

2. Net Profit Ratio.

3. Operating Profit Ratio.

Sales Turnover (A) 329.4 1108.7 1,233.30 1,458.30 1,502.46

Gross Profit (B) 23.30 83.20 305.20 387.70 286.38

Net Profit (C) 6.3 32.57 178.62 265.17 142.34

Operating profit (D) 38.42 133.15 330.13 415.66 324.00

G/P Ratio (B)/(A) 7.07% 7.50% 24.75% 26.59% 19.06%

N/P Ratio (C)/(A) 1.91% 2.94% 14.48% 18.18% 9.47%

Op./P Ratio (D)/(A) 11.66% 12.01% 26.77% 28.50% 21.56%

Table 12: G/P Ratio, N/P Ratio, Operating Profit Ratio

Graph 10.1: Gross Profit Ratio

Graph 10.2: Gross Profit Ratio

Interpretation

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.

GP Ratio may also be considered to be an indicator of high selling price without a

corresponding increased cost of goods sold.

Graph 11.1: Net Profit Ratio

Graph 11.2: Net Profit Ratio

Interpretation

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.

Graph 12.1: Operating Profit Ratio

Graph 12.2: Operating Profit Ratio

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.

Operating profit (A) 38.42 133.15 330.13 415.66 324

Capital Employed (B) 928.24 1169.01 1165.82 1418.56 1702.22

EAT & Pf.D (C) 6.3 32.57 178.62 265.17 142.34

Equity Sh. Holder`s Fund (D) 49.93 69.93 69.93 69.93 69.93

Total Assets (E) 1,022.89 1,404.66 1,744.50 2,169.32 2,238.49

Return on Investment (A)/(B) 4.14% 11.39% 28.32% 29.30% 19.03% Return on Equity (C)/(D) 12.62% 46.58% 255.43% 379.19% 203.55% Ret. On Total Assets (A)/(E) 3.76% 9.48% 18.92% 19.16% 14.47%

Calculation of Capital Employed

Net block 903.24 897.99 922.44 1,089.13 1,215.75

Add: Current Assets 283.79 530.92 541 671.06 912.9

Total 1187.03 1428.91 1463.44 1760.19 2128.65

Less: Current Liabilities 258.79 259.9 297.62 341.63 426.43

Capital Employed 928.24 1169.01 1165.82 1418.56 1702.22

Table 13: Return on Investment, Return on Equity, Ret. On Total Assets

Graph 13.1: Return on Investment

Graph 13.2: Return on Investment

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.

Graph 14.1: Return on Equity

Graph 14.2: 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 performance & strength of the firm. In the year 06-07 to 08-09 company has earned a very satisfactory return for its equity shareholders.

Graph 15.1: Return On Total Assets

Graph 15.2: Return On Total Assets

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 06-07 it is increasing, while in the year 07-08 it is near about flat and in year 08-09 it is declini

Table 14: EPS, Pay Out Ratio, Price Earning Ratio, Dividend Yield Ratio

Interpretation

. . . . . In Rs. Crore . . . . .Particulars Mar

'05 Mar '06 Mar '07 Mar '08 Mar '09

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

Market Price Per Share (on 31st March) (E) - 175.3 144.95 164.65 39.70

EPS (A)/(B)=(F) 1.26 4.66 25.54 37.92 20.36

Pay Out Ratio (D)/(F) 0.00% 32.21% 13.70% 13.18% 17.19%

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%

Earning per share

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.

Pay Out Ratio

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

In general, a high P/E suggests that investors are expecting higher

earnings growth in the future compared to companies with a lower P/E. However, the

P/E ratio doesn't tell us the whole story by itself.

Dividend yield 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.

Cash Flow of JK Cement

. . . . . In Rs. Crore . . . . .

Particulars Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

Net Profit Before Tax 10.8 52.21 271.98 346.57 233.96

Net Cash From Operating Activities 172.12 134.22 213.79 380.46 241.21

Net Cash (used in)/from Investing Activities -584.09 -81.73 -180.97 -171.68 -82.35

Net Cash (used in)/from Financing Activities 417.68 164.78 -125.7 -255.88 -179.11Net (decrease)/increase In Cash and Cash Equivalents 5.71 217.27 -92.88 -47.09 -20.24

Opening Cash & Cash Equivalents 62.43 68.15 285.42 192.54 145.44

Closing Cash & Cash Equivalents 68.15 285.42 192.54 145.44 125.2

Table 15: Cash Flow of JK Cement

Interpretation

Cash from operations:

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

bills. Here we can see that company has adequate cash to meet all its obligations in

all the years.

Cash from investing:

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.

Cash from financing:

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.

CHAPTER 6

SWOT ANALYSIS

j.k cement

SWOT ANALYSIS

SWOT means Strength, Weakness, Opportunity and Threats.

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:-

1) Low sales as compared to market potential.

2) High complaints of quality deterioration.

3) Less advertisement and negligible sales promotion schemes as compared to other brands.

4) Monopoly of dealers.

5) Lack of self-enthusiasm in working pattern.

Opportunities:-

1) Explosive of quality yet to be displayed.

2) Aggressive advertisement is required.

3) Competitive price.

4) More advertisement.

5) Margin structure for retailer and dealer.

Threats:-

1) Competitors are publicizing rapidly may be another threat to the company.

2) Price fluctuation and price war is general phenomena in the cement industry. Frequent

availability of supply of cement.Advent Institute of Management Studies 50

CHAPTER-7

CONCLUSION

FINDINGS

Conclusions & 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.

Overall Performance: The Company’s turnover increased to Rs. 1876.45 Crores

during the year as against to Rs. 1812.85 Crores in previous year. However

Profit before Depreciation and Tax was lower at Rs. 286.38 Crores compared to

Rs. 387.64 Crores due to reduced margins on account of the general slowdown

in the economy and higher operational costs due to substantial increase in fuel

cost in first nine months of operations. The situation improved in last quarter on

account of various steps initiated by the Government.

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.

The company has good control & command over internal factors such as low cost

of production, low inventory, minimum collection period, efficient utilization of

capital employed & satisfactory return to share holders. The bottle neck areas of

the company is the control over the external environment like competition, low

market coverage, high selling price etc.

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.

Survey should be done in order to find potential markets

for cement. Timely supply of cement should be given due importance. This would

help in achieving greater goodwill for the company resulting in higher sales.

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.

Chapter -9

BIBLIOGRAPHY & REFERENCES;

Books & References:

Agarwal M.R., Management accounting,

Malik & Company, Fifth Edition, 1997.

Bhalla V.K., Working Capital Management,

Anmol Publication, Fifth Edition, 2003.

Chandra Prasanna, Financial Management,

Tata McGraw-Hills Publishing Company Limited, Sixth Edition, 2005.

Gupta R.L. & Radhaswamy M., Advanced Accountancy,

Sultan Chand & Sons, Eighth Revised Edition, 1993.

Khan M.Y. & Jain P.K., Financial Management,

Tata McGraw-Hills Publishing Company Limited, Fifth Edition, 2008.

Pillai R.S.N. & Bagavathi, Management accounting,

Sultan Chand & Company Limited, Eighth Edition.

Rav S.N., Heda B.L. & Gupta S.L., Management accounting,

Apex Publishing House, Edition 2007.

Sharma K.R., Research Methodology,

National Publishing House, Edition 2004.

Webcites:

www.jkcement.com

www.moneycontrol.com

www.rediffmoney.com

www.indiabulls.com

www.investopedia.com

www.wikipedia.com

www.google.com

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