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A

Project Study Report

On

SHREE DIGVIJAY CEMENT CO. LTD.

Financial analysis

Submitted in partial fulfillment for theAward of degree of

Master of Business Administration

Submitted By: - Submitted To: -

SUSHEEL KUMAR Mr. RAJAN ARORAMBA IIIrd Sem.(Finance) (Academic Head)

2009-2011


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DECLARATION

I, Mr. SUSHEEL KUMAR a student of MBA of ACERC COLLEGE hereby declare

that this project report has been carried out successfully under the guidance of Uday .N.panday(Hr. Manager).

The project is based on financial training to the Shree Digvijay Cement co. Ltd located

at Digvijaygram, Sikka Jamnagar. I am further declaring that this project is not previously

submitted to any college.

Place: - Jamnagar yours faithfully

Date: - SUSHEEL KUMAR


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ACKNOWLEDGEMENT

My industrial training for 45 days has helped me to broader my horizons of

knowledge. In the preparation of this project, I have received encouragement & support fromvarious persons.

I am thankful to Mr. Uday .N. Pandey, under whose mentorship I have finished myindustrial training. I learnt most modern practical approach to business management. I was able

to gather information from various Department of the company. I would like to express myheartfelt thanks & gratitude to all the persons.

I also thank for her valuable guidance, support & encouragement. Thus this project hasbeen a result of co-ordinate efforts of many.

Thanking you,

Date: Yours Sincerely,

Susheel kumar


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PREFACE

A person cannot learn driving a car by merely reading hundreds of books on it. He

acquires practicing his hands at the handle of the car. Similarly, management training remainsincomplete without the taste of real business life and its management process.

The curriculum of business management programmer has been matter of concern

from business schools across the globe, and project work is now-a-days a compulsory item in the

curriculum of management institutes.

So as a part of the study of management course of MBA along with theoretical

knowledge, we are required to undergo training in big business concerns. I visited Shree

Digvijay Cement Co. Ltd. This is an emerging company having good reputation in India as well

as in abroad. During my training I learned the practical aspects of business.

My project report is the mini-replica of the information. Provided by the heads of the

various departments. The department I visited was personal, marketing financial, production, etc

.and thus my project is based on the information gather from these various departments and

basically on financial analysis.


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CONTENTS

Sr.no Particulars Page no.

1. General information

y Introduction

y History & Development

y Size & Form of the Organization

y Manufacturing Process

y Manufacturing Products

y Organization Structure

y Awards & Achievement

y Time Keeping System

2. Personnel Management

y Introduction

y Recruitment & Selection

y Training & Management development

y Job Description

y Promotion & Transfer Policy

y Performance Appraisal System

y Wage & Salary Administrationy Provident Fund Scheme

y Grievance Handling Procedure

y Collective bargaining & agreements

y Trade Unions

y Extra facilities for workers

y Personnel Records

3. Marketing Management

y Introduction

y

Product Planningy Market Segmentation

y Pricing Policies

y Channels of Distribution

y Sales Promotion

y Advertising

y Marketing Research


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y Competitors

4. Financial Management

y Introduction

y Financial Planning

y Capitalizationy Capital Structure

y Management of Fixed Assets

y Management ofWorking Capital

5. Ratio Analysis

6. Comparison Base on Overhead

7. Comparison of sales

5. Conclusion

6. Appendix

7. Bibliography


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INTRODUCTION

INDIA has become the centripetal force of globalization. The country is attractingcapital & companies at an accelerated pace. With the resurgence of the industrial sector,

propelled by bound exports & the brightened of the domestic investment climate, both businessoptimism & consumer confidence rose.

The about we are going to study is SHREE DIGVIJAY CEMENT CO. LTD. Thereport consists of the information regarding the company. This report contains the information

about one of the leading business organization not only in the country but all over world.SDCCL is the only cement plant in Saurashtra region of Gujarat State, which is having

its captive mines at a distance of more than 90 km from work by road. It was after 1984 whenuse of sea sand was banned due to development of National Marine Park, the Limestone which

were available were obtained by the company to run the dry process plant which increases the

cost of raw material substantially & subsequently manufacturing cost of cement in competition.Company has its own jetty for Export of Clinker & Cement & import of Coal. SDCCL

is the only cement plant attached to all other Port Jetty. These are the facilities:-

y Import of coal from countries like South Africa, Australia, China

y Procurement of raw material by faster & cheaper sea routes.

y Dispatch of Clinker, Cement to coastal destination

y Export of Clinker, Cement to several countries of the world like Bangladesh, Malaysia,Nepal, Somalia, South Africa, and Yemen.

Apart from a large process plant the company has developed a township named

DIGVIJAYGRAM in the vicinity of the plant. The township contains Labour & staff colony,Officers hostel, general & VIP guest houses, bank, school building, hospital, & commercial

complex with plant area 3696 hectares, colony area 47.04 hectares. Company has more than1200 houses in DIGVIJAYGRAM.


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COMPANY PROFILE

Name of the Company : Shree DigVijay Cement Co. Ltd

Brand Name : KAMAL CEMENT

Year of Establishment : 6th

November, 1944

Location of the Company : P.O. Digvijaygram

Sikka 361140Jamnagar (Gujarat)

Registered Office : P.O. DigvijaygramSikka 361140Jamnagar (Gujarat)

Form of Organization : Public Limited

Scale of Organization : Large Scale Industry

Company Group : CIMPOR

Certified : ISO 9001 Quality

ISO 14001 EnvironmentalOHSAS 18001 Health

Product Manufacturing : Cement

Bankers : Citi Bank

Telephone No. : 0288-2344272-234-4275

Fax No. : 0288-2344092 & 2344214

Website : WWW.digvijaycement.com


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COMPANY SITE


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BOARD OF DIRECTORS

Board of Directors:y Mr. Leonard D Costa - Chairman

y Mr. Jorge Manual Tavares Salavessa Moura

y Mr. Alvora Joao Serra Nazare

y Mr. Robert Pavrey

y Mr. Nepoleon de la Colina

y Mr. Luis Filipe Sequeira Martins

y Mr. Penarveettil Achuthan Nair-Whole Time Director &C.E.O

Finance Heady Mr. Rui Duarte

Manager & Company Secretaryy Mr. S. N. Malpani

Vice President (Pers.., Admn.., & Mines)y Mr. C. S. Jasol

Asstt. Vice President (F& C)y Mr. G. D. Gupta

Asstt. Vice President (Tech)y Mr. P. B. Patel

Asstt. Vice President (Mktg)y Mr. Prateek Gaur


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1947Started commercial production with 1 lakh M.T capacity per annum.

1954Construction of Aerial Ropeway, a unique system in the country for transportation of sea-sand

from jetty to plant.

1957Ropeway put into Operation.

1958West Cost Paper Mills Ltd commissioned with financial help of Digvijay.

1964

Ropeway system installed for transportation of clinker & cement directly to Ship from factory.

1967Enhancement of cement production capacity to 6 lakh M.T capacity per annum.

1979Beawar cement project initiated with financial help of Digvijay.

1984Conversion of meter gauge line into broad gauge line.

1985 Dry process plant commissioned Lockout at Bombay Cement Mill

1989Digvijay become Sick & registered with BIFR first time.

1992Digvijay came out of BIFR through Profit & Equity infusion.

1998 Hasting Jute mills sold Grasim acquired management control of Digvijay Digvijay became Sick second time.


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2000Installation of captive power plant (DG Sets) & up gradation of Cement Mill to reduce cost.

2001

Digvijay was badly affected in Earthquake.

2002Downsizing of manpower through VRS.

2007Digvijay came out from BIFR.

2008Cimpor acquired management control of Digvijay.

SIZE & FORM OF ORGANIZATION

Size of the Organization:-A company can be classified on the basis of size. There are 3

types of industries on the basis of size in an economy. They can be named as under.

Chart no. 1:- Size of the unit

1. Large Scale IndustryLarge Scale Industries are those industries whose investment is more than 10 crore.


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2. Medium Scale IndustryMedium Scale Industries are those industries whose investment is more than 1 crore & less

than 10 crore.

3. Small Scale Industry

Small Scale Industries is those industries whose investment is less than 1 crore.

SHREE DIGVIJAY CEMENT CO.LTD. Is a LARGE SCALE INDUSTRY.Its total investment in plant & machinery and n fixed assets is more than 10 crore.

Form of the Organization:-

Chart no. 2:- Forms of Business Organization

SDCCL comes under the category of JOINT STOCK COMPANY registered under

COMPANIES ACT 1956.

A Joint Stock Company has 2 types:-

1. Private Company: - A Private Company means a company whicha) Restricts the right to transfer its shareb) Limit the number of its member to 50

c) prohibits any invitation to public to subscribe for any shares ordebentures of the company.

2. Public Company: - Public companies are those companies which have minimum 7members & maximum number is equal to the number of share issued. These are


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transferability of shares & shares are issued for public subscription through prospectus. Theminimum number of directors is 3 &

rddirectors must retire every year.

On this basis SDCCL is a PUBLIC LTD COMPANY.

MANUFACTURING PROCESS

Raw Materials: -

Raw materials that are used for manufacturing with their sources are as under

y Lime stone own captive mines as well as selected vendors

y

Sand stone from selected vendorsy Iron ore - from selected vendors

y Coal imported coal

y Pet coke from M/s Reliance Industries Ltd

y Mineral gypsum - from Rajasthan Mineral Development

y High reactive silica from Thermal Power Station

y Granulated slag from Steel Plant

Lime stone + Sand stone + Iron ore + Fly ash = Clinker

&

Clinker + Gypsum + Coal = Cement

MANUFACTURING PROCESS

The manufacturing process of cement in SDCCL is as follows:-

1. PRIMARY CRUSHER:-The limestone which are of desired quality comes from the

totally quality mechanized captive mines & from vendors mines are crushed & stock pile ismade. After they quarried the raw material (limestone, etc.) are first crushed & then move on to

an initial blending stage (pre-blending).


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Primary

Crusher

Raw Mill Yard

2. RAW MIX PREPARATION:-Those crushed material comes to the Pre-Grinder Mill

through reclaimer & Stacker. Desired raw mix of consistent quality in controlled proportionthrough weight feeders is fed to VRM so as to produce powdery mix of required quality &

fineness suitable for producing exceptionally good quality.

Grinder Mill


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3. RAW MATERIAL GRINDING:-These raw materials possibly with several additives

(sand, limestone, pyrite ash, etc.) are simultaneously dried & crushed until a very fine powder is

obtained, which is then batched & stored.

4. COAL GRINDING:-Various fuels are used in the cement industry; the most common are

coal & pet coke.

Both require preliminary grinding to allow their injection into & ignition in the kilnproviding an optimal thermal gradient.

Coal Mill

5. BURNING:-Proper heat treatment transforms the powder into an intermediate products

clinker.On leaving the blending Silos the powder passes through a heat exchanger, passing

through a hot gases leaving the Kiln & beginning the process of carbon removal.

6. CLINKERIZATION:- Next is the clinkerization of the powder takes place in the

cylindrical rotatory kiln (a refractory- lined steel tubes that slopes slightly to allow the powder toslip down), in which the temperature is higher than 1500C, giving rise to the clinker. The

Clinker is than cooled quickly to stabilize its structure & to allow partial recovery of the heat.

Clinker is an artificial igneous rock that is the main constituent of cement. The dustis removed from hot gases leaving the cyclone tower before dispersing into the atmosphere.


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Kiln String

Cooler ID Fan

7. CEMENT GRINDING:-Very fine grinding of the clinker together with a binding

regulatory (gypsum) & other additives (limestone filler, fly ash, steel mill stag, etc) gives rise to

the various types of cement that meet various standard.

8. STORAGE & DESPATCH:-The cement is then pumped to the storage Silos & it may

then be sold in bulk or packed in paper bags that are shipped out a pallets or packet packed.Dispatch can be by lorry, train or ship or as necessary.


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Electronic Packer

Truck Loader

QUARRY

RAW MIX

PREPARATION


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Chart no. 3:- Manufacturing Process

STORAGE &

DESPATCH

RAW MATERIAL

GRINDING

COAL GRINDING BURNING

CLINKERIZATION

CEMENT GRINDING


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MANUFACTURING PRODUCTS

DIGVIJAY IS THE ONLY CEMENT PLANT IN INDIA CAPABLE OFMANUFACTURING MULTI VARIETY OF CEMENT.

IT CAN MANUFACTURE ANY OTHER VARIETY UPTO QUALITY STANDARDS OF

ANY SPECIFIC REQUIREMENT & CUSTOMER.

The following are the types of the product which are produced by the DIGVIJAY

y Ordinary Portland Cement (OPC) 43 grade

y Ordinary Portland Cement (OPC) 53 grade

y Sulphate Resisting Portland Cement (SRPC)

y Railway Sleeper Manufacturing Cement (53-S grade OPC)

y OilWell Cement Class G grade HRS

y Portland Pozzolana Cement


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AWARDS & ACHIEVEMENT

AWARDS WON BY DIGVIJAY

1982 : National Productivity Award

1989 : American Petroleum Institute Certification

1994 : Recognition as Export House

1995 : Export Award for Clinker & Cement

1996 : ISO 9002 Accreditation

2002 : Bharat Shells Lubricant Excellency Award

2003 : ISO 9001 Accreditation

2003 : Century International Quality Era Award in Gold Category

2003 : National Energy Conservation Award

2005 : Recognition as Two Star Export House

2008 : ISO 14001 EMS & OHSAS 18001 Certification Renewal


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TIME KEEPING SYSTEM

Time Keeping System means the system of

supervising the working time of each employeeswork, on a particular time for a particular period.

As the plant is working for 24 hours for allthe year, it has a scientific & systematic Time

Keeping System.

STAFF SHIFT TIMING TOTAL TIMING

Shift A

Shift B

Shift C

6:00 a.m. to 2:00 p.m.

2:00 p.m. to 10:00 p.m.

10:00 p.m. to 6:00 a.m.

8 hrs

8 hrs

8 hrs

General Shift 8:30 a.m. to 12:30 p.m.

2:00 p.m. to 6:00 p.m.

8 hrs

Table no.1:- Time keeping system

The Time Department of the company is always aware of presence of every

employee of the company.


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INTRODUCTION

Personnel are not only the heart of any organization but also the basic department of

any company. This is a challenging job because of challenging nature of people. The

management of men is very important in any organization because of management can achieve

its goals with co-operative of people working in the organization. Personnel management is

connected with managing the problems of personnel like recruitment, selection, wages and salary

administration, training and promotion etc. This department helps the management in securing,

utilizing and development appropriate manpower to achieve the organizational objectives.

Personnel department of SDCCL is designed with perfection & has some major work to

perform. This department forms the rules, regulations & policies regarding recruitment, transfer,

and promotion etc everything related to personnel of the organization. The personnel department

of SDCCL aims at following criteria:-

y To maintain good relation of personnel within the organization.

y To enable each person to make maximum contribution to the organization.

The effective functioning of the personnel department depends on its simplicity, clarity

of relationship, discipline, promptness in decision making, fixation of responsibility & effective

coordination. Thus, this is a very important part of the organization.


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RECRUITMENT & SELECTION

Recruitment:-

Recruitment means inducing or attracting more & more candidates to apply for

vacant job positions in the organization. In other words, Recruitment means search for

candidates who can perform the vacant roles & inducing them to apply & come forward for

filing the vacant roles.

Recruitment is the process of identifying the prospective employees, stimulating &

encouraging them to apply for a particular job or jobs in an organization.

Sources of Recruitment:-

It should be more likely sources of the types of the employees it needs. These sources may be

Internal & External.

Chat no.5: Sources of Recruitment

Selection:-

Selection is a long process starting from evaluating from resumes to the ending

with the contract of employment. Selection procedure for senior manager will be long drawn &

rigorous but it is simple & short while hiring short floor workers.

R

E

C

R

U

I

T

M

E

N

T

y Casual Callers

y DirectRecruitment

y Jobbers &Contractors

y CampusRecruitment

y EmploymentExchange

y Advertising

y WebPublishing

y Consultants

y E-Recruiting

y Telecasting

yTransfer

yPromotion

yRetiredMangers

yLoy-Off

yInternaladvertise-

ments


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Selection can be defined as discovering most promising & most suitable

candidates to fill up the vacant job position in the organization.

TRAINING AND DEVELOPMENT

Training: -

The word training, education and development are closely related but their have

important distinctions. Training is act of increasing the knowledge and skill of an employee for

doing a particular job. It is concerned with imparting specific skills particular purposes.

Training is the act of increasing knowledge and skills of an employee for doing a

particular job.

There are 2 types of training

1. On the job training

2. Off the job the training

Development: -

It means growth of an individual an all respects. In practice, the term

development is related to the executive or managers.

Training means equipping the employees with the required skill to perform the job.

The candidates are sent for training so that can perform the job in the expected manner.


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Table no.2:- Difference b/w Training & Development

THE CYBERNETIC SYSTEMOF TRAINING AND DEVELOPMENT AND

DEVELOPMENT PROGRAMME:

The dictionary meaning of cybernetics is the science of control and communication in

animals. The unique feature of the system is feedback is fed again in the system and response is

accordingly generated. It presumes that the need will identify in the organization and the training

process will meet the need and evolution will measure the effect of training. Schematically, it

can be represented as below

Point of Difference Training Development

1. Concept Training is concerned with

teaching skill only.

Development is concerned in

teaching technical, human and

conceptual skill.

2.Suitability It is more suitable for technical

staff.

It is more suitable for

managerial staff.

3.Methods Used In training on-the-job methods

of training are preferred.

In development off the job

methods of training are

preferred.

4.Purpose It focuses on present

requirement of the

organization.

It focuses on present as well

as future requirement of the

organization

5. Time It is short term process. It is long term process.


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Chart no. 6:- System of Training & Development

JOB DESCRIPTION

It is an important document which is descriptive in nature & contains a statement of

job analysis. It provides organizational information. It defines the scope of supervision for job

description. It gives the idea about the employees duty, responsibilities etc. The overlapping of

duty & confusion of duty & responsibility can be removed with the help of Job Description.

Job Description is specification of individuals task, generally a detailed list of duties &

responsibilities one is supposed to perform. It determines the content of the job.

SDCCL does not have conventional job description. It is totally informed & secret. All the

employees perform their duties which are prescribed by their superiors or as per their job

analysis done by the Group Cement Industry.

Identifying

TrainingNeeds

Feedback

Systematic

Evaluation

Implementing

Training

Designing of

Training

Programmed


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PROMOTION & TRANSFERPOLICY

Promotion: -

In promotion, the

new position carries higher pay,

status & job condition as compared

with old. Promotion aims at

recruiting the right man on the job

from the lower rank within the

organization. It increases the morale

of the people. Promotion is a part of personnel programmes. A sound of promotion policy helpsthe employees to increase their efficiency.

A promotion involves a change from one job to another that another that is better in

terms of status & responsibilities.

Basic elements in promotion are following:

1) Promotion of an employee to some higher job having more prestige, better status,

more benefits & privileges.

2) Re-assignment of an employee to a position having increased responsibilities.

3) Higher job grade.

Transfer:-

Transfer may involve promotion, demotion or no charge in status & responsibilities.

Transfer can be refers to change in job in which pay, status, responsibility & job condition are

almost the same. The objective of transfer is to maintain an equilibrium b/w demand & supply of

the employees within the organization by shifting the employees from one job to another or from

one department to another.


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Transfer is used as a technique in training programmes. It is made to train the employees

for different position & jobs.

The transfer is a change in job where the new job is substantially the equal to the old

in terms of pay, status & responsibilities.

Here, substantially the equal means that the general nature of duties & responsibilities remains

the same though there may a change in their specific nature.

PERFORMANCE APPRAISAL SYSTEM

Performance appraisal is an integral part of managing. Managerial appraisal is of

utmost importance if an organization whether business or non-business wants to achieve its goal

effectively & efficiently.

Performance Appraisal is the process of assessing quantitive & qualitative aspects of

an employees job performance.

It also involves not only quantity of work but also character & personal qualification of

the employee. However, the trend is clearly away from measuring a mans characteristics toward

measuring his work performance i.e. his value to the organization.

In SDCCL there is very successful scientific performance appraisal system. It is made

compulsory for every personnel in every department. It is done after every 6 months in means for

2 times in a year. The heads of the department have to do the appraising of his department

personnel. This company is having a specific & process in all departments.


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WAGES & SALARY ADMINISTRATION

Wages is a monetary reward paid for labour activities to the employees or labourers.

Salary refers to fees paid for clerical, administrative & professional work.Wage & Salary administration refers to the establishment & implementation of sound policies &

practices of employees compensation. It includes such areas as job evaluation, survey of wage& salary analysis or relevant organizational problems, development & maintenance of wage

structure establishing rules for administrating wage, wage payment, incentives, profit sharing,wage charges & adjustment supplementary payment control of compensation cost.

Wage Administration:-In SDCCL wages are paid to wage board staff & wage board

workers as per grades & norms fixed by the government. They also give extra allowance aseducation, medical, housing, allowances, working allowances etc.

Salary Administration:- The salary structure is different for different grades or position inthe organization structure. Salary is paid to the employees as per companys compensation law.Generally, salary includes basic pays, allowance & perks payable. While perquisites include

LTC, medical expenses, bonus, PF (12 %) etc.Bonus is paid to the staff having basic pay less than Rs. 10,000. The rate of bonus is

kept minimum of 8.33 % as per decided by company. While those employees having basic payof Rs. 10,000 or more are paid super annuation at the rate of 15 % as per decided by the

company.

PROVIDENT FUND SCHEME

The provident fund scheme was passed in 1952 covering factories employing 50 or moreworkers in 60 major industries viz. iron & steel, textile, engineering cement, paper & industries.

By an amendment in the year 1960 the scheme was extended to all factories of 5 years standing

& 20 or more workers. An exemption has been made for few undertaking for a period of 3 years.Establishment employing b/w 20 to 50 workers is exempted for 5 years.

SDCCL has adopted following policy for the employees Provident Fund. As per currentrate, 12 % is deducted from employees salary. In this, fifty-fifty contribution is done between

employer & employees. The company also pays interest at the rate of 12 % every year. Theinterest is paid on the basis of compound interest.


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After retirement, every employee can get 50 % in cash & 50 % as pension. This is done asper new Provident Fund Scheme.

GRIEVANCES OF HANDLING PROCEDURE

Grievances means complaints & dissatisfaction arise among employees due to payment

policies, promotions, transfer, working condition of the company etc. the process of talking &resolving any problem is known as Grievances Handling Procedure.

The nature & pattern of grievances, the way of their expression differs but the need for

creating a formal grievance handling procedure is a must. The personnel administrator of anorganization should go into the details of the grievances.

He should help the top management, programmes & procedures which would enablethem to handle employee grievances. These polices, programmes & procedures are known as the

grievance redressal procedure. Grievance procedure is problem-solving, dispute-settingmachinery which has been set up following an agreement between labour and management.

In SDCCL mostly the management itself solves the problem of the employees. Still if

any problem remains, the employee fills the grievances form & gives it to their immediatesuperior, who then passes their letter to personnel department. Here the problem is analyzed by

mutual discussion & solve it. Generally, these types of problems are solved out by personnelofficer only.

COLLECTIVE BARGAINING & AGREEMENT

Collective Bargaining is such type of process, by which any matter is resolved by thenegotiation between the two parties i.e. employees & employers without the help of outsiders. It

is new contact point of view in industrial relation.

Collective Bargaining is a process in which the representatives of labour

organization & the representatives of business organization meet & attempt to negotiate a

contract or agreement which specifies the nature of the employee employer union

relationship.

Thus collective bargaining is a process, a technique, a device to protect the interest of theemployers & employees to determine the employment condition, to fix the wage & salary &

achieve the objectives of the organization. It is a form of collective contract. Every matterdefining the relationship between the management & workers may form a part of contract.

Usually 2 types of provisions are included in the collective bargaining & agreement;


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1. Economic Provision:-Economic provisions are the provision, which affects the economic

working condition of workers.

2. Political Provision:-

The political provision includes the provision relating to generaladministration.

TRADE UNION

Trade unions were 1st

started in the textile industry.

A trade union as voluntary organization of workers formed to promote & protect

their interest by collective action.

for the achievement of goal of progressively speed up production it is necessary that worker

should eschew indiscipline stoppage of production and indifferent quality of work and for this it

is necessary that they should build strong, democratic trade union.

A Trade union is a combination of persons whether temporarily or permanently primary

for the purpose of regulating the relationship between the workers for imposing the restrictive

condition over the of any trade of the business and includes the federation of two or more

unions

In SDCCL There are two trade unions.

1. B.M.M.S- Bhartiya Mazdoor Sangh

2. I.N.T.U.C-Indian National Trade Union Congress

B.M.S. & I.N.T.U.C. runs Shree Digvijay Mazdoor Sangh and Sikka Employees Union

respectively. Majority of S.D.C.C.L employees are member of INTUC.

In S.D.C.C.L the law relating retirement is at the attainment of 60 years age which is made by

mutual understanding and decisions between management and union.


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EXTRA FACILITIES FOR WORKERS

SDCCL has a large no. employees working in various departments. As employees are

very important for any organization and they are an asset to the organization, proper care needs

to be taken and proper facilities are required for the workers so that they are happy working for

the organization. To increase the efficiency of workers following care is taken for employees:

MEDICAL

y A six bed hospital with four doctors and paramedical staff is provided.

y Emergency operation facility, pathological laboratory and orthodontic facility is provided for

all workers.

y Ambulance facility is given to the workers.

y Free medicine are given to the patients

SCHOOL

The company had CBSE affiliated English medium school from nursery to Higher

Secondary standard with well equipped science laboratory & commercial studies.

OTHER FACILITIES

To meet essential needs of the colony residents a welfare center named Kalyan Kendra

a shopping complex, dairy, canteen, bank, post office and telephone exchange, recreation club

for officers, ladies club etc. are there in the colony. The employee and residents of surroundings

area enjoy following services rendered by the company.

PERSONNEL RECORDS

The Personnel records are very necessary for each & every organization. It is difficult

for the management to remember each an every detail of each personnel. So records are essential

which are useful in the functions like payments, training, promotion etc in determining the future

needs of employees.


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A record means preserving of all information for a long time for various purposes at any

time. For e.g. if a CD contains some 40 to 50 songs, we can hear it any time. Therefore CD

containing these songs will be called as records. These records help to analyses and interpret

every employee individually and are helpful to remove the grievances of the employees in future.

In SDCCL records of every personnel are kept both on the hard disc of the computers &

in files which contain all the necessary details from the induction of an employer to the

retirement or death of the employers.


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INTRODUCTION

Marketing management means management of all the activities related to marketing or

in other words, it refers to planning, organizing, directing & controlling the activities which

result in exchange of goods & services.

Marketing management is an art & science of choosing target markets & getting,

keeping & growing customers through creating, delivering & communicating superior

customer value.

Marketing must ensure needs satisfying goods & services it should start with customers

& not with the production process rather than production should determine what product has to

be made for customers, should be the centre of all marketing activities. There are 4 Ps of

marketing i.e. Product, Price, Place & promotion. They aim at selling the right product at the

right price, at the right place & at the right time.

Marketing has a planned deep penetration with a view to reach out the end customers at

every segment of the market. SDCCL believes that rural marketing will be key to success in the

near future. SDCCL has a strategic plan to meet all challenges. They have central marketing

office at Ahmedabad & will be shortly adding customer technical cell to it.

PRODUCT PLANNING

Product planning concept came into existence with the birth of marketing concepts.Product planning means forecasting about the future on the basis past experience & present trend

in the organizational manner. In short, product planning means deciding in advance about

making the product more accurate, effective & satisfactory.


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SDCCL has good product with comparison to other companies. The product planning

is helpful to sell the products it includes:

1. Market Surveys

2. Classification of data

3. Put into action

4. Effective decision

There are the methods by which the products can be made popular. If these methods are

followed in an accurate way then the company can increase its growth in the market.

MARKETING SEGMENTATION

Marketing Segmentation is a process of dividing the entire heterogeneous market for a

product into several submarkets or segments, each of which tends to be homogenous wholly i.e.

each of which has common or similar properties, characteristics or needs.

The process of classifying people into group exhibiting different needs

characteristics of behaviors

Market segmentation is based on the assumption that different groups of customers in a

product market respond differently to various marketing mix offers & segment or target market

needs to be served by a separate distinct marketing mix. Thus, Marketing Segmentation is sub

dividing a market into homogeneous subgroups of customers, each subgroups being selected as a

target market to be reached with a distinct marketing mix.

SDCCL has entered many market segments under differential marketing strategy. It

makes the business successful in several segments. Market of SDCCL has segmented to every

taluka. Sales Officers & Sales Executives are appointed in every district of Gujarat. They collect

information & send this information to the Marketing Department of SDCCL at Ahmedabad.


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PRICING POLICIY

Pricing decision is very

crucial & much important. It is only

the variable factor, which determines

the revenue, income. Generally price is

the agreement b/w buyers & sellers

which are directly affected the demand

& supply. The marketer can know how

people react to different price range by

consumer behaviour study & therefore

it helps in fixing the price of the product.

Pricing is the process of selecting the pricing objective, determine the possible of

price & developing price strategy, setting the final price & controlling pricing decision.

In SDCCL pricing policies & strategies are derived from the firms objective of profit

earnings, return on investment, market, etc. Higher management sets its price accordingly with

the consideration of cement manufacturers association rules. SDCCL has adopted the cost in its

price undertaking the following consideration:-

1. Cost of production2. Distribution cost3. Advertising & Market expenses4. Sales promotion cost

CHANNELS OF DISTRIBUTION

Distribution channel is the set of marketing institution participating in the marketing

activities. In other words, it is the movement of flow of the goods & services from the primary

producer to the ultimate producer. Distribution channels can thus have a number of levels.


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Chart no. 7:- Distribution Channels

SDCCL has developed an excellent & perfect channel of distribution through which the

company can make its product available to the customer by stocking & dealers. In SDCCL, the

orders are received by the Marketing Officer which is sent by different dealers.

Manufacturer

Manufacturer

Retailer

Retailer

Retailer

Customers

Customers

Customers

Customers

Manufacturer

Manufacturer Wholesaler

Wholesaler

Agent


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y Companys Distribution channel on the basis of Trade & Non-

Trade

y Shree Digvijay Distribution Channel

Chart no. 8:- Companys Distribution Channel

Chart no. 9:- SDCCL Distribution Channel


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SALES PROMOTION

Promotion consists of those activities, which are designed to bring the companys

goods & services to the favourable attention of the customers. Sales must be promoted for

market promotion. So promotion is also very important for department of market. By way of

advertising, market is also produced.

Sales promotion is regarded to as a tool of communicating to an audience through a

variety of non-personal, non-media vehicle or short-term incentives to encourage, purchase or

sale of a product or service.

SDCCL achieves its objectives of capturing large market share through sales

promotion activities by providing a no. of incentives, mostly short term, designed to stimulate

quicker or greater purchase of a product by trade. The company gives dairies, key chains,

calendars, decorative items to the customers & dealers. SDCCL has no salesman but stockiest &

dealers. All the selling producers are handled by them. So the unit works accordingly more

interest & satisfaction to dealers & customers. The company offers 50% for advertisement

expense & held Architectural Conference on its own expenses. Company also gives awards to

the best performing dealer so that the enthusiasm of dealers can be maintained.


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ADVERTISEMENT

Advertising is any paid form of non-personal presentation & promotion of ideas, goods

& services by an identified sponsor. It broadens the knowledge of the consumer. Consumers find

& buy necessary products without much of wasting of time, this speed up the sales of

commodities which increases the efficiency of labour in distribution & diminishes the cost of

selling.

Advertising has become an important function of marketing in the competitive world.

It helps to spread the message & thus promotes its sales. Advertising is one of the major tools

that companies use to direct persuasive communication to target buyers & publics. It consists of

non-personal forms of communication conducted through paid media under their sponsorship.

Advertisement is important from the view point of product but sometimes SDCCL also

gives key chains, posters, walls, etc. for advertisement. The advertisement media adopted by the

company are:

y Circulars

y Banners

y Wall painting

y New publicity is done in Gujarati & English newspaper.

MARKET RESEARCH

Marketing research embrace all research activities carried on in connection with

management of the marketing work. This may include marketing research, sales research,

product research, advertising research, business economic analysis, export marketing research,

etc.


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Marketing research is a systematic problem analysis, model building, &

fact finding for the purpose of improved decision making & control in the marketing of goods

& services.

SDCCL prefers survey method, whenever they want to launch a new variety. They

conduct market survey to known the tastes & preferences of the consumers & also find which is

currently popular & favoured by the builders in the market.

The company also gets the monthly report from the entire authorized sales depot

regarding the sales of the current. So by this, the company gets an idea about which variety to be

produced more & which to be produced less.

CEMENT PLAYERS

Competitors may be defining as the same quality product with the same purpose by

different organizations is called competitors. SDCCL is playing in perfect competitive marke

The main competitors are as follows:

1.Binani Cement2.J. K Lakshmi Cement3.Ambuja Cement4.Birla Cement5.Ultratech Cement6.Hathi Cement7.Sanghi Cement8.Siddhi Cement


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INTRODUCTION

Money is the blood of business enterprise as it is required to purchase machines &

materials, to pay wages & salaries to employees & to allow credit facility to customers. Animportant requirement for success of any business organization is the provision of sufficientamount of funds or capital. It cannot get sufficient amount at its disposal to purchase machines &

materials, building premises, to meet day to day expenses & for several other purposes.

Financial Management is concerned with the efficient acquisition & allocation of funds.

In other words, financial management is concerned with the flow of funds & involves decisionrelated to procurement of funds, investment of funds in long term & short term assets &

distribution of earning to owners. The financial management helps in managing financeefficiently & effectively.

Financial Management involves the application of general management principlesto a particular financial operation.

In the business organization, to manage the finance properly & to the financialmanagement effective special financial department is created which mainly performs the

following functions like:-

1. Financial Planning2. Raising of funds3. Allocation of funds4. Financial Control

FINANCIAL PLANNING

The financial planning begins with determination of total capital

requirement. For this managers do the sales forecast and if the future prospectus

appear to be bright and expect increase in sale, then firm needs to increase its

production capacity which means more requirements of long term funds. Afterestimating the requirement of funs the next step of financial planning is deciding how to raisethis finance. Finance may be generated from internal & external sources.

Financial planning should estimate the resources required for carrying out operations &

for determining how far these resources can be generated internally by the firm itself & how farthey will have to be obtained externally. Financial planning aims at smooth operation by


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focusing on fund requirement and their availability. Financial planning is to ensure that enoughfunds air available at right time.

Financial planning includes long term investment decision. Its focus is on capital

expenditure plan and determining debt equity mix. Financial planning is done for long term as

well as short term. Short term financial plans are called budgets. Budgets are also draw as a partof financial planning. SDCCL maintains day to day financial positions & carries out all theprocedures for financial planning.

CAPITALIZATION

The term capitalization is derived from the term capital. But both the terms Capital& Capitalization are different. The term Capitalization is solely used in case of joint stock

companies whereas the term capital is used in all types of businesses such as sole trading,partnership firms, etc. In the other words, Capitalization is used to mean the total of funds raised

on long term basis, whether debt preferred equity or common equity.

Secondly, Capitalization refers to the sum total of all the long term securities, shares,debentures, & reserves, but the term capital represents all the investment of a firm in terms of

cash, tangible & intangible assets. Thus, capitalization means the sum total of all long termsecurities issued & the reserves held by the company.

Capitalization means the total accounting value of capital stock, surplus, & long

term loans of a corporation.

Capital plays an important role in business. At the time of incorporation, the thingsthose are brought in by the owners like field assets, raw materials, current assets, etc. they also

gather are known was the capital of the company. Following are types of capitalization:-

1. Over Capitalization: - A company is said to be over-capitalized when a firm employsmore capital than is actually required.

2. Under capitalization: - A company is said to be under capitalized when a firm employsless capital than needed.


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CAPITAL STRUCTURE

Capital structure is the permanent financing of the firm represented by the long termdebts preferred stock & net worth. This capital comes in many forms long and short-term debts,secured and unsecured debts preference shares, equity shares, retained earnings and other.

Capital structure is frequently used indicates the long term sources of funds

employed in the business enterprise.

The capital structure should be such which increase the value of equity share or

maximizes the wealth of equity shareholders. Debt and equity differ in costs and risk. As debtinvolve less cost but these are safe securities from companies point of view.

However in one sense capital structure includes all the long term capital resources

including loans, bonds, reserves, surplus components of the total capital etc. Each firm hascapital structure which can help it in achieving the desire objective of financial management. It

will be different from firm to firm.

In SDCCL decisions are coordinately taken by experts and accounting members offinance department considering the view of costing department and experts of department

offices.

MANAGEMENT OF FIXED ASSETS

Fixed assets are those assets used for permanent or long term needs of the business;fixed assets cannot be easily converted into short period money; investment in these assets will

be exposed to risk for a long period.

Fixed assets cannot be withdrawn from the business without distributing the normalworking of the undertaking. It is necessary that sufficient kind are raised for also question to the

fixed assets net only while establishing a need, enterprise must also go for expanding &maintaining the existing enterprise.

The financial manager must be careful to depreciate assets properly. Some

characteristics of these assets are as following:

1. In involves risk for long period2. It is of highest cost


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3. It creates problem of amounts & replacement

In SDCCL the company has adopted simple procedure of fixes assets management.The company maintains proper records to show full particulars including quantitive details &

situation of fixed assets. Fixed assets have been physically verified by the management & no

material description found on such verification fixed assets are sited at the cost less none of thefixed assets has been revolved during the year of fluctuation is provided on straight line methodduring the residual life of the assets.

MANAGEMENT OF WORKING CAPITAL

Working Capital is needed for day to day expenses. It is a type of liquid capital &generally invested in current assets, which can easily converted into cash. Working Capital also

called as Circulating Capital is that pail of capital, which is required to purchase current assetsi.e. to meet regular & recurring needs of a business firm. The regular & recurring needs of a

business firm refers to purchase of raw materials, payment of wages & salaries, expenses likerent, advertising, power & so on.

Working Capital means current assets of a company that are changed in the

ordinary course of business from one to another.

Working Capital = Current Assets Current Liabilities

Financial Department of SDCCL keeps liquid capital to meet its day to day expenses. Thecompany has a provision for sufficient liquid cash for meeting unpredicted incidents. Working

Capital management comprises of management of cash & bank receivables & inventories.

A. Management of Cash & Bank balance:-Every undertaking desirous of utilizing the

available cash effectively so as to accomplish the goals of the undertaking i.e. maximization ofprofits or wealth of the owners of capital with the minimum of efforts. But the management of

the cash is not as simple as it appears. In case, the undertaking does not keep sufficient cash inhand, it may not be in a position to meet the unexpected challenges that may bring down its

credit in the market. On the other hand, if undertaking maintains excessive cash reserves to meetthe challenges the excessive cash will remain idle in the business, contributing nothing towards

the wealth of the firm.

Management Of Receivables:-


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Receivables are direct results of credit sales. Creditsale is resorted to by a firm to push up its sales which ultimately results in pushing up the profit

earned by the firm. At the same time, selling goods on credit results in blocking of funds inaccounts receivable.

Management of accounts receivable may, therefore, be defined as the process of making

decisions relating to the investment of the funds in this asset which will result in maximizing theoverall return on investment of the firm.Thus, the objective of receivable management is to promote sales & profits until that

point is reached where the return on investment further funding of receivable is less than the costof funds raised to finance that additional credit.

B. Management Of Inventories:-Purchase, production & sale department are mainly

concerned with the management of inventories. Their officials always try to have large stocks of

inventories to facilitate production & marketing of the product. It is, therefore, the primeresponsibility of the financial executives to have a proper management & control over the

investment in inventories.For this purpose, financial management should take care of the maximum & minimum

limits of stock of inventories in the business to have continuity in the production process.

1. size of inventory-maximum & minimum level2. establishing timing schedules, procedures3. coordinating4. providing proper storage facilities


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KAMAL CEMENT: Ratio Analysis

Balance Sheet of kamlCements

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

--

Jun '05 Dec '06 Dec '07 Dec '08 Dec '09

12 mths 18 mths 12 mths 12 mths 12 mths

Sources Of FundsTotal Share Capital 270.38 303.37 304.48 304.52 304.74Equity Share Capital 270.38 303.37 304.48 304.52 304.74Share Application Money 0.03 1.14 0.00 0.34 0.24Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 1,908.01 3,187.21 4,356.77 5,368.01 6,165.92Revaluation Reserves 0.00 0.00 0.00 0.00 0.00Networth 2,178.42 3,491.72 4,661.25 5,672.87 6,470.90Secured Loans 549.33 317.77 100.00 100.00 100.00Unsecured Loans 578.12 547.61 230.42 188.67 65.70Total Debt 1,127.45 865.38 330.42 288.67 165.70Total Liabilities 3,305.87 4,357.10 4,991.67 5,961.54 6,636.60



Application Of FundsGross Block 3,709.17 4,542.50 5,231.05 5,706.94 6,224.13Less: Accum.Depreciation 1,463.93 2,053.32 2,271.19 2,514.19 2,784.09Net Block 2,245.24 2,489.18 2,959.86 3,192.75 3,440.04Capital Work in Progress 118.10 634.93 696.79 1,947.22 2,714.43Investments 1,125.06 1,133.12 1,288.94 332.39 727.01Inventories 317.00 408.82 581.60 939.75 683.24Sundry Debtors 45.84 89.95 145.68 224.60 152.20

Cash and Bank Balance 86.27 172.36 114.94 123.73 116.64Total Current Assets 449.11 671.13 842.22 1,288.08 952.08Loans and Advances 145.10 313.03 237.04 351.82 292.65Fixed Deposits 0.26 205.74 535.85 728.11 764.04Total CA, Loans &

Advances 594.47 1,189.90 1,615.11 2,368.01 2,008.77Deffered Credit 0.00 0.00 0.00 0.00 0.00Current Liabilities 676.70 929.06 1,081.70 1,412.55 1,582.32


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Provisions 106.77 168.68 493.55 470.56 674.04Total CL & Provisions 783.47 1,097.74 1,575.25 1,883.11 2,256.36Net Current Assets -189.00 92.16 39.86 484.90 -247.59Miscellaneous Expenses 6.47 7.71 6.22 4.28 2.71Total Assets 3,305.87 4,357.10 4,991.67 5,961.54 6,636.60

Contingent Liabilities 332.70 506.71 1,193.08 1,224.42 647.12Book Value (Rs) 16.11 23.01 30.62 37.26 42.47

Profit & Loss accountof Ambuja Cements

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

--Jun '05 Dec '06 Dec '07 Dec '08 Dec '09


IncomeSales Turnover 3,025.84 7,022.59 6,469.68 7,089.89 7,763.93Excise Duty 428.79 796.31 798.29 907.80 680.72Net Sales 2,597.05 6,226.28 5,671.39 6,182.09 7,083.21

Other Income 70.51 111.07 965.04 468.18 180.41Stock Adjustments 6.97 -10.92 58.79 62.62 -49.44Total Income 2,674.53 6,326.43 6,695.22 6,712.89 7,214.18Expenditure

Raw Materials 435.52 1,007.07 953.32 1,251.08 1,642.09Power & Fuel Cost 678.40 1,239.87 1,004.20 1,325.69 1,422.75Employee Cost 106.44 235.98 209.46 266.94 274.29Other ManufacturingExpenses 92.97 185.59 124.50 145.61 161.66Selling and AdminExpenses 502.01 1,273.55 1,254.41 1,276.80 1,432.55Miscellaneous Expenses 61.77 122.96 140.63 215.64 202.19Preoperative ExpCapitalised -3.43 -10.82 -9.47 -21.19 -19.33Total Expenses 1,873.68 4,054.20 3,677.05 4,460.57 5,116.20



Operating Profit 730.34 2,161.16 2,053.13 1,784.14 1,917.57


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PBDIT 800.85 2,272.23 3,018.17 2,252.32 2,097.98Interest 91.77 113.23 75.85 32.06 22.43PBDT 709.08 2,159.00 2,942.32 2,220.26 2,075.55Depreciation 195.41 326.12 236.34 259.76 296.99Other Written Off 0.94 1.07 0.47 1.72 1.57

Profit Before Tax 512.73 1,831.81 2,705.51 1,958.78 1,776.99Extra-ordinary items 6.08 10.17 -194.92 11.28 26.52PBT (Post Extra-ordItems) 518.81 1,841.98 2,510.59 1,970.06 1,803.51Tax 50.52 338.73 741.49 567.79 585.14Reported Net Profit 468.29 1,503.25 1,769.10 1,402.27 1,218.37Total Value Addition 1,438.16 3,047.13 2,723.73 3,209.49 3,474.11Preference Dividend 0.00 0.00 0.00 0.00 0.00Equity Dividend 189.16 461.24 532.65 334.97 365.59Corporate Dividend Tax 26.54 64.69 90.52 56.92 62.13

Per share data (annualised)

Shares in issue (lakhs) 13,518.8315,168.2

915,223.7

515,225.9

915,237.1

1Earning Per Share (Rs) 3.46 9.91 11.62 9.21 8.00Equity Dividend (%) 90.00 165.00 175.00 110.00 120.00Book Value (Rs) 16.11 23.01 30.62 37.26 42.47

Cash Flow of AmbujaCements

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

--Jun '05 Dec '06 Dec '07 Dec '08 Dec '09


Net Profit Before Tax 518.54 1841.60 2712.35 1969.84 1803.30Net CashFrom Operating Activities 548.15 1796.18 1558.67 966.22 2129.15Net Cash (used in)/from

-253.14 -627.17 -161.59 -274.90 -1196.13Investing ActivitiesNet Cash (used

in)/from Financing Activities -277.31 -888.86 -1124.44 -482.06 -466.66Net (decrease)/increaseIn Cash and CashEquivalents 17.70 280.15 272.63 209.26 466.36Opening Cash & CashEquivalents 68.83 97.95 378.16 642.58 949.11


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Closing Cash & CashEquivalents 86.53 378.10 650.79 851.84 1415.47

Key Financial RatioskamalCements

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

--


Investment Valuation RatiosFace Value 2.00 2.00 2.00 2.00 2.00Dividend Per Share 1.80 3.30 3.50 2.20 2.40Operating Profit PerShare (Rs) 5.40 14.25 13.49 11.72 12.58Net Operating Profit PerShare (Rs) 19.21 41.05 37.25 40.60 46.49Free Reserves Per Share(Rs) 12.08 19.66 27.48 34.13 39.35Bonus in Equity Capital 71.98 64.15 63.92 63.91 63.86

Profitability RatiosOperating ProfitMargin(%) 28.12 34.71 36.20 28.85 27.07Profit Before Interest AndTax Margin(%) 20.39 29.13 31.35 24.04 22.32Gross Profit Margin(%) 25.44 33.74 36.26 24.65 22.87Cash Profit Margin(%) 25.29 29.04 34.61 21.17 20.46

Adjusted Cash Margin(%) 23.41 28.29 23.44 21.17 20.46Net Profit Margin(%) 17.85 23.86 30.53 22.11 16.78

Adjusted Net Profit

Margin(%) 15.93 23.09 19.35 22.11 16.78Return On CapitalEmployed(%) 16.94 43.76 38.84 28.19 27.04Return On Net Worth(%) 21.50 43.05 37.95 24.73 18.83

Adjusted Return on NetWorth(%) 19.24 41.77 24.09 19.07 18.35Return on Assets 11.45 27.56 30.58 37.23 42.45


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Return on AssetsIncluding Revaluations 11.45 27.56 30.58 37.23 42.45Return on Long TermFunds(%) 16.94 43.77 38.84 28.19 27.04

Liquidity And Solvency Ratios

Current Ratio 0.76 1.08 1.03 1.26 0.89Quick Ratio 0.35 0.70 0.64 0.74 0.57Debt Equity Ratio 0.52 0.25 0.07 0.05 0.03Long Term Debt EquityRatio 0.52 0.25 0.07 0.05 0.03Debt Coverage RatiosInterest Cover 6.28 17.61 26.02 52.66 80.15Total Debt to OwnersFund 0.52 0.25 0.07 0.05 0.03Financial ChargesCoverage Ratio 8.24 19.73 28.68 60.58 93.32Financial ChargesCoverage Ratio Post Tax 8.24 17.17 27.45 52.89 68.63

Management Efficiency RatiosInventory Turnover Ratio 8.28 15.41 9.96 7.54 11.36Debtors Turnover Ratio 58.66 91.70 48.14 33.39 37.60Investments TurnoverRatio 9.55 17.19 11.13 7.54 11.36Fixed Assets TurnoverRatio 1.07 2.28 1.68 1.10 1.15Total Assets Turnover

Ratio 0.79 1.43 1.14 1.05 1.08 Asset Turnover Ratio 0.70 1.37 1.09 1.10 1.15

Average Raw MaterialHolding 30.85 43.45 30.93 36.96 14.69

Average Finished GoodsHeld 7.58 6.26 7.00 8.01 4.58Number of Days InWorking Capital -26.20 7.99 2.53 28.24 -12.58

Profit & Loss Account Ratios

Material CostComposition 16.76 16.17 16.80 20.23 23.18Imported Composition ofRaw Materials Consumed -- 5.05 11.01 8.41 31.66Selling Distribution CostComposition 17.91 19.08 20.95 19.2 18.58Expenses asComposition of Total 10.48 8.36 4.9 3.69 2.6


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Sales

Cash Flow Indicator RatiosDividend Payout RatioNet Profit 46.06 34.98 35.22 27.94 35.1

Dividend Payout RatioCash Profit 32.45 28.73 31.06 23.55 28.19Earning Retention Ratio 48.4 63.85 44.44 63.75 63.97Cash Earning RetentionRatio 64.89 70.49 54.13 70.81 71.21

AdjustedCash FlowTimes 1.84 0.49 0.24 0.22 0.11


Earnings Per Share(%) 3.46 9.91 11.62 9.21 8Book Value 16.11 23.01 30.62 37.26 42.47

LIQUIDITY RATIOS

Liquidity is defined as having enough cash (or near-cash assets) to pay your bills when they

come due. The liquidity ratios compare the assets that will be converted into cash soon (thenumerator) to the bills that will be coming due soon (the denominator).

CURRENNT RATIO: The current ratio is a popular financial ratio used to test a company'sliquidity (also referred to as its current or working capital position) by deriving the proportion of

current assets available to cover current liabilities. The concept behind this ratio is to ascertainwhether a company's short-term assets (cash, cash equivalents, marketable securities, receivables

and inventory) are readily available to pay off its short-term liabilities (notes payable, current portion of term debt, payables, accrued expenses and taxes). In theory, the higher the current

ratio, the better.

sLiabilitieurrent

ssetsurrent=atiourrent


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In the above graph we can see that current ratio increased from 0.75 to 1.08 in the year 2006.Further it declined by .05% to 1.03% in year 2007. In year 2008 it increased by .23% to 1.26.

Finally it declined to .89% in the year 2009. Generally it tells for every 1 rupee that companyowes how much amount is available to repay its debts. Here in years where ratio was above 1%,

in those years current ratio was favorable, telling that current assets are more than currentliabilities. But in year 2009 we can see that current ratio is just .89% which tells that current

liabilities of company are greater than current assets which is not favorable for the company.

QUICK RATIO: The quick ratio - aka the quick assets ratio or the acid-test ratio - is a liquidityindicator that further refines the current ratio by measuring the amount of the most liquid current

assets there are to cover current liabilities. The quick ratio is more conservative than the currentratio because it excludes inventory and other current assets, which are more difficult to turn into

cash. Therefore, a higher ratio means a more liquid current position.

The average for all manufacturing companies is about one (1.0). This average also varies a great

deal from one industry to another.

siabilitieurrent

eceivablecc.+ecuritieskt.+ash=atiouick

commonly used variation of the ratio is:

abilitiesCurrent Li

entorysets - InvCurrent Aso =Quick Rati


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Here we can see that quick ratio of the company is fluctuating. It increased in year 2006 to .7 as

compared to .34 in year 2005. Further it declined in year 2007 to .63 and then again it increasedto .74 in the year 2008. Finally it declined again in year 2009 by .17(.74-.57) and reached .57.Here we can see in the year 2009 current ratio is significantly higher, than quick ration, it is a

clear indication that the company's current assets are dependent on inventory. Quick ratioindicates the companies ability to meet its short term obligations. Since currently the ratio is .57

which is less than 1 so it is not favorable for the company at present.


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Working Capital: It is a financial metric which represents operating liquidity available to an

organization. Along with fixed assets such as plant and equipment, working capital is considered a part of

operating capital. It is calculated as current assets minus current liabilities. If current assets are less than

current liabilities, an entity has a working capital deficiency, also called a working capital deficit. Net

working capital is working capital minus cash (which is a current asset) and minus interest bearing

liabilities (i.e. short term debt).

Working Capital Current Assets Current Liabilities

A company can be endowed with assets and profitability but short of liquidity if its assets cannot

readily be converted into cash. Positive working capital is required to ensure that a firm is able to

continue its operations and that it has sufficient funds to satisfy both maturing short-term debt

and upcoming operational expenses. The management of working capital involves managing

inventories, accounts receivable and payable and cash

In the above graph we can see that, there was working capital deficiency in year 2005 i.e. -189.

Working capital increased to 92.16 in year 2006. It remained positive in year 2007 but it declined

to 39.86 crores. There was drastic increase in working capital due to increase in amount of

current assets, as result it increased to 484.9 crores in year 2008. But in year 2009 the amount of

current liabilities was greater than current assets which resulted in working capital deficiency i.e.

it declined to -247.59. Negative working capital is not favorable for the company as it cant

fulfill its short term obligations and upcoming operational expenses. Thus company has to relook

its management of inventories, accounts receivable and payable and cash in order to insure

positive working capital.


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LEVERAGE RATIOS

Any ratio used to calculate the financial leverage of a company to get an idea of the company'smethods of financing or to measure its ability to meet financial obligations. There are several

different ratios, but the main factors looked at include debt, equity, assets and interest expenses.It is used to measure a company's mix of operating costs, giving an idea of how changes in

output will affect operating income. Fixed and variable costs are the two types of operating costs;depending on the company and the industry, the mix will differ.

Interest coverage ratio: A ratio used to determine how easily a company can pay interest onoutstanding debt. The interest coverage ratio is calculated by dividing a company's earnings

before interest and taxes (EBIT) of one period by the company's interest expenses of the sameperiod.

The lower the ratio, the more the company is burdened by debt expense. When a company's

interest coverage ratio is 1.5 or lower, its ability to meet interest expenses may be questionable.An interest coverage ratio below 1 indicates the company is not generating sufficient revenues tosatisfy interest expenses.

From the above graph we can see that companys interest coverage ratio is constantly increasing.

Initially it was 6.28 in year 2005 but it increased to 17.61 in year in 2006. Further it kept onincreasing and finally reached 80.15 in year 2009. It shows company is generating sufficient

revenues to satisfy interest expenses.Debt-equity ratio: The debt-equity ratio is another leverage ratio that compares a company's

total liabilities to its total shareholders' equity. This is a measurement of how much suppliers,lenders, creditors and obligors have committed to the company versus what the shareholders

have committed. To a large degree, the debt-equity ratio provides another vantage point on acompany's leverage position, in this case, comparing total liabilities to shareholders' equity, as

opposed to total assets in the debt ratio.

A lower the percentage of debt-equity ratio means that a company is using less leverage and hasa stronger equity position.

EquityTotal

s)iabilitie(orebtTotal=atioEquity-to-ebt


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Here in the above case we can see that debt-equity ration is constantly declining since year 2005.In year 2005 D/E ratio was .52 but it declined to .25 i.e. almost by half to .25 in year 2006. It

further declined to .07 in year 2007 and finally declined more and reached .03 in year 2009. Alower the percentage of debt-equity ratio means that a company is using less leverage and has a

stronger equity position.

TURNOVER OR EFFICIENCY RATIOS

Turnover ratios measure the managements efficiency and effectiveness in managing the firms

assets. In general, sales (or a measure of sales, like cost of goods sold) will be in the numerator.We would like for the value of the turnover ratios to be quite high (with the exception of the

average collection period).Inventory Turnover: Indicates the number of times a year that the firms inventory has been

replaced. A low ratio may indicate that the firm has some obsolete inventory, or that possibly,the firm is simply overstocked on inventory. If the inventory turnover is 4 times per year, the

company is replacing its inventory approximately every 3 months; if its inventory turnover is 12times per year, it is replacing its inventory approximately every 30 days (or 1 month).

Inventory

SalesTurnoverInventory


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From the above graph we can see that, in 2005 the inventory turnover ratio was 8.28.It further

increase by 7.13 in 2006 and reached to 15.41. But in year 2007 the inventory turn over ratiodeclined by 5.45 and was 9.96. When we talk about year 2008 there was again a decline by 2.42

and in 2009 the ratio was 11.36 thereby increasing by 3.82. Thus we can say that the inventoryturnover of the company is fluctuating. Inventory turnover ratio of 11.36 in year 2009 tells us

that company is replacing its inventory approximately every 30 days (or 1 month).Total Asset Turnover Ratio: The purpose of investing in assets is to generate sales: the higher

the sales per dollar invested in total assets, the better. This ratio measures how efficiently themanagement is achieving its goal.

AssetsTotal

Sales

TurnoverAssetTotal Major fault of the ratio: Total assets are made up of current assets and fixed assets. If thecompanys fixed assets are old (and therefore almost fully depreciated), the value of net fixed

assets on the balance sheet will be quite small. This, in turn, will make total assets appear to besmall and the value of the ratio will be high. This implies that a company with old assets is

managing its assets quite efficiently. In fact, the company may not be managing its assets well atall they are simply old and much depreciated. A company that has recently upgraded its assets

by investing in newer equipment may actually be better managed, but its total asset turnover ratiowill look inferior to the company with older assets. In spite of this, the total asset turnover ratio

is widely used; its simply important to know of its major deficiency when using it.


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In 2005 the ratio was 0.79 and there was an increase of 0.64 in 2006 as it was 1.43 but in 2007

the Total Assets Turnover Ratio decreased to 1.14, it further decrease by 0.09 in 2008 as it was1.05 and in 2009 there was a slight increase of 0.03.Therefore we can say that the Total Assets

Turnover Ratio of the company is fluctuating.

FIXED ASSETS TURNOVER RATIO: IT is the ratio ofsales (on the Profit and loss account)to the value offixed assets (on the balance sheet). It indicates how well the business is using itsfixed assets to generate sales.

FIXED ASSET TURNOVER RATIO Net SalesTotal Fixed Assets

The higher the ratio, the better, because a high ratio indicates the business has less money tied upin fixed assets for each dollar of sales revenue. A declining ratio may indicate that the business is

over-invested in plant, equipment, or other fixed assets.

The Fixed Assets Turnover Ratio in 2005 was 1.07. In 2006 it increased to 2.28, increasing by1.21.In 2007 it declined to 1.68. Further it declined to 1.1 in year 2008. In 2009 there was a


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slight increase by 0.05 and it reached to 1.15. Greater the ratio more it is beneficial for thecompany. Ratio of 1.15 in year 2009 tells that 1.15 times assets were turned and converted into

sales. The ratio was most favorable in year 2006 as its fixed asset turnover was 2.28, which washighest in last 5 years.

Debtors Turnover Ratio: It indicates the velocity of debt collection of a firm. In simple words it

indicates the number of times average debtors (receivable) are turned over during a year.

Debtors Turnover Ratio = Net Credit Sales / Average Trade Debtors

The higher the value of debtors turnover the more efficient is the management of debtors or more

liquid the debtors are. Similarly, low debtors turnover ratio implies inefficient management ofdebtors or less liquid debtors. It is the reliable measure of the time of cash flow from credit sales.

There is no rule of thumb which may be used as a norm to interpret the ratio as it may bedifferent from firm to firm.

In 2005 the Debtors Turnover Ratio was 58.66.In 2006 there was increase by 33.04 and reached

to 91.70.In 2007 it declined by 43.56 and ratio was 48.14. In 2008 it further decrease to 33.39.finally in year 2009 there was slight increase and it reached 37.6. ratio was highest in 2006, it

tells that in year 2006 there was most efficient management of debtors or debtors were mostliquid. Lower ratio in year 2008 i.e. 33.39 indicates inefficient management of debtors or less

liquid debtors.

PROFITABILITY RATIOS

A class of financial metrics that are used to assess a business's ability to generate earnings ascompared to its expenses and other relevant costs incurred during a specific period of time. For

most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the company is doing well. These ratios, much like the

operational performance ratios, give users a good understanding of how well the companyutilized its resources in generating profit and shareholder value. The long-term profitability of a

company is vital for both the survivability of the company as well as the benefit received byshareholders. It is these ratios that can give insight into the all important "profit".


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Return on Assets: The primary purpose of investing in assets is to generate sales, which in turnlead to profits. The return on assets ratio measures the profitability per dollar of investment in

the firm. Notice that the ratio doesnt say anything about how the assets are financed, i.e., wherethe money comes from (either debt or equity). It simply wants to know how profitable the

company is per dollar invested in total assets (no matter where the money comes from to finance

those assets).

ssetsTotal

TaxesfterEarnings=ssetsoneturn

Here we can see that ratio is continuously in creasing over the past 5 years. Initially ratio was11.45 in year 2005 but it kept on increasing per year and finally reached 42.45 in year 2009. It is

good sign for the company.

Net Profit Margin: Profit margin, net margin, net profit margin or net profit ratio all refer to a measure

ofprofitability. It is calculated by finding the net profit as a percentage of the revenue.

The profit margin is mostly used for internal comparison. It is difficult to accurately compare the net

profit ratio for different entities. Individual businesses' operating and financing arrangements vary so

much that different entities are bound to have different levels of expenditure, so that comparison of onewith another can have little meaning. A low profit margin indicates a low margin of safety: higher risk

that a decline in sales will erase profits and result in a net loss.

Profit margin is an indicator of a company's pricing policies and its ability to control costs. Differences in

competitive strategy and product mix cause the profit margin to vary among different companies


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Here we can see that net profit margin increased from 16.78 in year 2005 to 22.22 in year 2006.It further increased to 30.53 in year 2007. But after that it kept on declining continuously for

both years i.e. the ratio declined from 30.53 to 23.86 in year 2008 and it further declined to 17.85in year 2009.

Return on Equity This ratio indicates how profitable a company is by comparing its netincome to its average shareholders' equity. The return on equity ratio (ROE) measures how much

the shareholders earned for their investment in the company. The higher the ratio percentage, themore efficient management is in utilizing its equity base and the better return is to investors.

Widely used by investors, the ROE ratio is an important measure of a company's earnings

performance. The ROE tells common shareholders how effectively their money is beingemployed. Peer Company, industry and overall market comparisons are appropriate; however, it

should be recognized that there are variations in ROEs among some types of businesses. Ingeneral, financial analysts consider return on equity ratios in the 15-20% range as representing

attractive levels of investment quality. While highly regarded as a profitability indicator, theROE metric does have a recognized weakness. Investors need to be aware that a disproportionate

amount of debt in a company's capital structure would translate into a smaller equity base. Thus,a small amount of net income (the numerator) could still produce a high ROE off a modest

equity base (the denominator).


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We can see that ROE is continuously decreasing since year 2007. In year 2007 it was 24.09, itfurther declined to 19.07 and then it further declined in year 2009 and reached 18.35. Here wecan say that earning of shareholders of the company is continuously decreasing which is not a

good sing for the company.

Return on Investment: A performance measure used to evaluate the efficiency of an investmentor to compare the efficiency of a number of different investments. To calculate ROI, the benefit

(return) of an investment is divided by the cost of the investment; the result is expressed as apercentage or a ratio.

The return on investment formula:

Return on investment is a very popular metric because of its versatility and simplicity. That is, ifan investment does not have a positive ROI, or if there are other opportunities with a higher ROI,

then the investment should be not be undertaken.


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From the above graph we can see that ROI was 16.94 in year 2005. It increased drastically to43.77 in year 2006. But after that it kept on declining for all the 3 years. It declined to 38.84 in

year 2007. Further it declined more in year 2008 and reached 28.19. finally it declined more andreached 27.04 in year 2009.


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KCC RATIOS ANALYSIS

Balance Sheet ofKCC

------------------- in

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

Dec '05 Dec '06 Dec '07 Dec '08 Dec '09


Sources Of FundsTotal Share Capital 184.72 187.48 187.83 187.88 187.94Equity Share Capital 184.72 187.48 187.83 187.88 187.94Share ApplicationMoney 0.82 0.28 0.10 0.00 0.08Preference ShareCapital 0.00 0.00 0.00 0.00 0.00Reserves 1,951.21 2,955.16 3,964.78 4,739.85 5,828.20Revaluation Reserves 0.00 0.00 0.00 0.00 0.00Networth 2,136.75 3,142.92 4,152.71 4,927.73 6,016.22Secured Loans 950.12 720.96 266.03 450.00 550.00

Unsecured Loans 121.30 50.20 40.38 32.03 16.92Total Debt 1,071.42 771.16 306.41 482.03 566.92Total Liabilities 3,208.17 3,914.08 4,459.12 5,409.76 6,583.14



Application Of FundsGross Block 4,628.64 4,816.25 5,464.07 5,835.67 6,826.27

Less: Accum.Depreciation 1,722.29 1,893.76 2,149.35 2,365.97 2,667.98Net Block 2,906.35 2,922.49 3,314.72 3,469.70 4,158.29Capital Work inProgress 290.95 558.42 649.19 1,602.86 2,156.21Investments 333.80 543.09 844.81 679.08 1,475.64Inventories 600.95 624.13 730.86 793.27 778.98Sundry Debtors 199.17 213.96 289.29 310.17 203.70


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Cash and Bank Balance 100.60 152.98 78.87 87.57 95.64Total Current Assets 900.72 991.07 1,099.02 1,191.01 1,078.32Loans and Advances 533.54 569.21 544.31 779.76 714.55Fixed Deposits 2.19 467.19 664.61 896.67 650.74Total CA, Loans &

Advances 1,436.45 2,027.47 2,307.94 2,867.44 2,443.61Deffered Credit 0.00 0.00 0.00 0.00 0.00Current Liabilities 1,449.02 1,596.50 1,991.27 2,245.39 2,558.73Provisions 316.77 541.83 666.27 963.93 1,091.88Total CL & Provisions 1,765.79 2,138.33 2,657.54 3,209.32 3,650.61Net Current Assets -329.34 -110.86 -349.60 -341.88 -1,207.00MiscellaneousExpenses 6.41 0.94 0.00 0.00 0.00Total Assets 3,208.17 3,914.08 4,459.12 5,409.76 6,583.14

Contingent Liabilities 282.42 341.56 890.62 1,734.21 840.52Book Value (Rs) 115.76 167.81 221.33 262.56 320.45

Profit & Loss accountof KCC

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



IncomeSales Turnover 3,723.51 6,467.84 7,865.11 8,300.18 8,803.17Excise Duty 539.71 736.09 970.32 1,070.21 781.58Net Sales 3,183.80 5,731.75 6,894.79 7,229.97 8,021.59Other Income 300.84 247.87 369.35 252.84 137.40Stock Adjustments 45.26 -29.25 6.93 0.33 28.74Total Income 3,529.90 5,950.37 7,271.07 7,483.14 8,187.73ExpenditureRaw Materials 1,078.84 1,513.55 1,843.65 1,180.48 1,233.42Power & Fuel Cost 299.52 430.98 517.56 1,598.96 1,539.65Employee Cost 184.84 318.02 352.73 413.04 367.71


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Other ManufacturingExpenses 157.65 262.45 344.17 362.90 421.69Selling and AdminExpenses 838.12 1,298.32 1,547.30 1,620.65 1,658.79Miscellaneous

Expenses 84.88 189.08 354.51 270.99 262.72Preoperative ExpCapitalised 0.00 0.00 0.00 0.00 0.00Total Expenses 2,643.85 4,012.40 4,959.92 5,447.02 5,483.98



Operating Profit 585.21 1,690.10 1,941.80 1,783.28 2,566.35

PBDIT 886.05 1,937.97 2,311.15 2,036.12 2,703.75Interest 66.19 75.19 73.87 39.96 84.30PBDT 819.86 1,862.78 2,237.28 1,996.16 2,619.45Depreciation 164.64 254.61 305.43 294.18 342.09Other Written Off 6.46 6.24 1.55 0.00 0.00Profit Before Tax 648.76 1,601.93 1,930.30 1,701.98 2,277.36Extra-ordinary items 46.93 14.55 -0.16 35.39 21.54PBT (Post Extra-ordItems) 695.69 1,616.48 1,930.14 1,737.37 2,298.90Tax 140.17 369.10 491.70 524.60 688.93Reported Net Profit 544.18 1,231.84 1,438.59 1,212.79 1,606.73Total Value Addition 1,565.01 2,498.85 3,116.27 4,266.54 4,250.56Preference Dividend 0.00 0.00 0.00 0.00 0.00Equity Dividend 147.61 280.92 375.02 375.33 431.76Corporate Dividend Tax 20.70 39.40 63.74 63.79 73.38Per share data (annualised)Shares in issue (lakhs) 1,845.08 1,872.78 1,876.24 1,876.82 1,877.40Earning Per Share (Rs) 29.49 65.78 76.67 64.62 85.58Equity Dividend (%) 80.00 150.00 200.00 200.00 230.00Book Value (Rs) 115.76 167.81 221.33 262.56 320.45

CURRENT RATIO

0.81348858 0.948156 0.868450.89347

3 0.66937

QUICK RATIO

0.473159322 0.6562780.59343

60.64629

60.45598

7


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CASH RATIO

0.870460247 1.0196980.89812

80.92075

90.69556

9

DEBT EQUITY RATIO

0.501425061 0.2453640.07378

6 0.097820.09423

2

INTEREST COVERAGERATIO

13.38646321 25.7743131.2867

250.9539

532.0729

5

INVENTORY

TURNOVER RATIO

2.3879162.37654

31.40944

41.60172

3

DIH

150.7591151.480

6255.419

8 224.758

TOTAL ASSETS

TURNOVER RATIO

0.992403769 1.4643931.54622

21.33646

81.21850

5

PROFIT MARGINRATIO

0.17092154 0.2149150.20864

90.16774

50.20030

1DEBTORS TURNOVERRATIO

15.98533916 26.78889

23.8334

9 23.3097

39.3794

3RETURN ON

ASSETS(%)

16.96231808 31.4720232.2617

my project10

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