A Summer Training Project Report On Working capital analysis of UltraTech Cement Ltd Jharsuguda Cement Work (JCW

Submitted in the partial fulfillment of the requirement for two year Post Graduate Diploma in Management Programme Session-2008-10 Under the Supervision of: R.K Prusty Submitted by: Lecturer Submitted to: Dr. Mohd. Zohair Sachidananda Sahoo Roll No: PG/14/096 SCHOOL OF MANAGEMENT SCIENCES, VARANASI (Approved by AICTE, Ministry of HRD, Govt. of India)
A Summer Training Project Report On Working capital analysis of UltraTech cement ltd Jharsuguda cement work (JCW)

Account Officer Student (PGDM-III)

Under the Supervision of: Submitted to: R.K Prusty Account Officer

Submitted by: Dr. Mohd. Zohair Lecturer

Sachidananda Sahoo Roll No: PG/14/096


I, Sachidananda Sahoo, PGDM-III student of School Of Management Sciences, Varanasi hereby declare that this project report titled Working Capital Analysis of UltraTech Cement Ltd. (JCW) is the record of authentic work carried out by me during the period from 18th May 2009 to 28th June 2009. The project report has not been submitted to any other University or Institute for the award of any degree/ diploma etc.

Place: Varanasi Batch: 2008-10

Signature: Date:

This is to certify that Sachidananda Sahoo has prepared his summer training Project report titled WORKING CAPITAL ANALYSIS of UltraTech Cement Limited at Jharsuguda unit under my supervision and guidance from 18th May 2009 to 28th June 2009. The work is original and has been done independently by the student. I further confirm that Mr. M. Sachidananda Sahoo bears a good moral character.

Mr. R. K. Prusty (External Guide)


ACKNOWLEDGEMENT I would like to thank Prof.P.N.Jha Director School of Management Sciences, Varanasi for giving me an opportunity for the summer training project in such an esteemed organization. I also express my deep sense of gratitude and obligation to my guide Mr. R.K.Prusty (ACCOUNTS OFFICER) of Ultra tech Cement Limited, Jharsuguda. His enduring patience, encouragement, constant, inspiration, scholastic guidance has made the project a success. A million of words could say I feel indebted to Md. Joher Sir. I deeply grateful his affection and suggestion without which this work would not have seen the light of the day. I would also like to thank School of management Sciences Varanasi for its sincere help and encouragement in this context for providing me with an industrial exposure during the academic session 2008-2010. I express my hearty thanks to the office staff of Ultra tech Cement Limited for their goodwill and sincere help. I am highly obliged to help rendered by Mr. B.M. Sahoo (Head HR & Admn.) & Mr. Shantimaya Dash for his kind co-operation and help during the course of this summer project. I am very much thankful to my family and friends for their cooperation and help. Nothing can express their profound affection and inspiration. My heart seems inadequate to express the eternal blessing and love that is bestowed upon me by my parents. I shall remain indebted for ever to my family members for their love, affection and constant inspiration. Lastly I bow before god, the benevolent savior whose blessings have given me this hour of glory to celebrate. Sachidananda Sahoo


The underlying aim of the summer training in UltraTech cement ltd. Jharsuguda cement work is a sincere attempt to analyze its Working Management by making use of different financial appraisal techniques. The data for the studies were obtained from the published annual reports of the company. Among all the problems of financial management, the problems of working capital management have probably been recognized as the most crucial one. It is because of the fact that working capital always helps a business concern to gain vitality and life strength. The objective of this study is to critically evaluate working capital management as practiced in ultra tech cement ltd. Jharsuguda. In this study, a sincere attempt has been made to analyze the working of ultra tech cement ltd. Jharsuguda making use of different financial appraisal techniques like ratio analysis, trend analysis, common-size analysis etc. The period of study was 3year from 2006-07 to 2008-09. The data for the studies were obtained from the published annual reports of the company. An effort has been made to appraise the overall financial performance and efficiency of management, but the scope and depth of study remained limited due to the limiting factors of time, and resources. However, it is expected that the study will provide useful information for better and easier understanding of the financial results of the company. This study has been divided into six chapters. The first chapter has been devoted to the introduction and last to the summary of conclusion and suggestion. The second chapter deals with the objectives. Third chapter takes care of introduction to financial analysis. In addition to this fourth chapter deals with significance of working capital, whereas fifth chapter deals with the analysis aspects of working capital. The main source of data has been the annual reports of the company.


The management of the working capital is an integral part of management analysis due to risk involved with it and return on investment of the concern is based on how will the working capital is properly managed. The ability to gain insight through the study of financial statement is vital to sound financial decision making. The basic data with which analyst must work are found in financial statement. So the ability to understand, interpret and use this information is the basic to an understanding of finance. Various stake holders of business are keenly interested to know regarding the financial position of the firm. To know the financial health of the company/business, analysis of financial statement is a necessary. Fixed assets are essential for running of the business where as current assets plays a very vital role in meeting day to day operations. Hence the scope of managing the current assets increases as the business operation increases. Here the question of WORKING CAPITAL MANAGEMENT rises. With the help of tools & technique of financial statement analysis, one can know the liquidity, solvency and profitability position of the company. The present study is an attempt to find out soundness of Working Capital Management at UltraTech Cement Limited and to study how far it handles the financial resources particularly current assets i.e. Paying capacity of short term obligations. For this, every possible effort has been made and adequate data has been collected to have a better conclusion over the study.


CHAPTER I i. Introduction ii. Introduction to working capital management iii. Research Objectives iv. Methodology CHAPTER II Company Profile i. About Aditya Birla Group ii. Industry Profile iii. Organization Structure CHAPTER - III Analysis & its Interpretations ii. Calculation of Working Capital iii. Ratio Analysis 56-90 i. Calculation of Balance Sheet & Profit and Loss Account 22-55 Page No. 15 16 17-18 19-21

CHAPTER IV i. Findings ii. Suggestions iii. Conclusions Annexure Bibliography INTRODUCTION TO THE TOPIC
Working capital is the life blood and controlling nerve center of a business. The organization has to make available of funds to pay their day to day bills, wages, and so on. The working capital is made up of the net current assets net of the current liabilities. It is very important for a company to manage the working capital carefully. This is particularly true where there is substantial time lag between making the product and receiving the money for it. In this situation the company has paid out of all the costs associated with making the product (raw material, labour and so on) but not yet got any money for it. They must therefore ensure they have enough cash to do this. This shows the cash coming into the business, what happens to it while the business has it and then it goes. Between each stage of this working capital cycle there is a time lag for some business this will be very long time to make and sale the product. They will need a substantial amount of working capital to survive. Others through may receive their cash very quickly after paying out for raw material etc. perhaps even before they have paid their bills they will need a less working capital. For all business through they need to plan how much cash they are going to have. The best way of doing this is a CASH FLOW FORECAST. ³Working Capital is a life blood and controlling nerve center of a business´, various aspects of working capital determine the health and growth of an organization. Working capital refers to excess of current assets over current liabilities, working capital measures how much in liquid assets a company has available to build its business. The number can be positive or negative, depending on how much debt the company is carrying. In general companies that have a lot of working capital will be more successful since they can expand and improve their operations of companies. With negative working capital may lack the funds necessary for growth.


The above information about the working capital may influence me for making a project on working capital management of UltraTech Cements ltd.

Introduction to the working capital:The management of current assets is similar to that of fixed assets in the sense that in both case that a firm analyses their effects on its return and risk. The management of fixed and current assets, however, differs in three important ways: first, in managing fixed assets, time is a very important factor; consequently, discounting and compounding techniques play a significant role in capital budgeting and a minor one in the management of current assets. Second, the large holding of current assets, especially cash, strengthens the firm¶s liquidity position (and reduces riskiness), but also reduces the overall profitability. Thus a risk-return trade off is involved in holding current assets. Third, levels of fixed as well as current assets depend upon expected sales, but it is only current assets which can be adjusted with sales fluctuations in the short run. Thus, the firm has a greater degree of flexibility in managing currents.

Working Capital is a life blood and controlling nerve center of a business´, various aspects of working capital determine the health and growth of an organization. Working capital refers to excess of current assets over current liabilities Working capital measures how much in liquid assets a company has available to build its business. The number can be positive or negative, depending on how much debt the company is carrying. In general companies that have a lot of working capital will be more successful since they can expand and improve their operations of companies.





RESEACH OBJECTIVES y To know the components working capital Management in ultra tech cement ltd.(JCW) y To assertion management of working capital and to calculate various ratios relating to working capital. y To study the liquidity position of the organization by analyzing the important components of working capital y To know the financial stability of a business. To study the past performance of the working capital management in the company, its present and future prospect considering the change in working capital position of company. y To understand the various problems faced by the company and the industry as a whole in proper implementation of working capital management. The necessary precaution if possible to undertaken to prevent and control them y To suggest the steps to be taken to increase the efficiency in management of working capital.


RESEARCH DESIGN The design chosen for this study is descriptive research design. The rationale behind using the descriptive research design is that the study was carried on working capital management for which the source is annual reports and cost report etc. The financial analysis is done keeping special emphasis on balance sheet, profit & loss account, cost report and analysis. The data are collected from the following sources: 2. Secondary sources:Secondary sources of data means that data those are already available i.e. that data which is already collected by someone else and already passed through statistical process. The secondary sources cover investigation of company s manuals, magazines, internet and records. PROCEDURE The work was carried out in the office of UltraTech cement plant at Dhutra. secondary data were acquired for the smooth and successful completion of the study. secondary data collected from the balance sheet of the project and annual

reports etc.



About Aditya Birla:The Aditya Birla Group is India s first multinational corporation. Global in vision, rooted in Indian values, the Group is driven by a performance ethic pegged on value creation for its multiple stakeholders. Currently a US $24 billion conglomerate, with a market capitalization of US $ 23 billion, it is anchored by an extraordinary force of 100,000 employees belonging to over 25 different nationalities. Over 50 per cent of its revenues flow from its operations across the world. The Group s products and services offer distinctive customer solutions. Its 74 state-of-the-art manufacturing units and sectoral services span India, Thailand, Laos, Indonesia, Philippines, Egypt, Canada, Australia, China, USA, UK, and Germany. Aditya Birla Group is a dominant player in all of the sectors in which it operates. Among these are viscose staple fibers, non-ferrous metals, cement, viscose filament yarn, branded apparel, carbon black, chemicals, fertilizers, sponge iron, insulators, financial services, telecom, BPO, and IT services. The group has been adjudged The Best Employer & among top 20 in Asia by the Hewitt Economic Times & Wall Street Journal Study.

GLOBALLY, THE GROUP IS:y y y y y y y

The largest aluminum rolling company. No one in viscose staple fiber. The Third largest producer of insulators. The Fourth largest producer of carbon black. The Eleventh largest cement producer. The best energy efficiency fertilizer plant. Among the world s top 15 BPO companies & among India s top three.


A Premier branded garments player The Second largest player viscose filament yarn. Among the first five mobile telephony players. Leading player in life Insurance & Assets management.


Grasim Industries Ltd. UltraTech Cement Ltd. Hindalco Industries Ltd. Aditya Birla Nuvo Ltd.


PSI Data systems. TransWorks. Essel Mining & Industries Ltd. Idea Cellular Ltd. Birla NGK Insulators. Shree Dig Vijay Cell


Thai Rayon (Thailand) Century Textiles (Thailand) Thai carbon Black (Thailand) Aditya Birla Chemicals Ltd.(Thailand)

y y y y y y y y y y

Indo Phil Textiles Ltd. (Philippines) Indo Phil Cotton Ltd. (Philippines) PT Indo Bharat Rayon (Indonesia) PT Elegant Textile Industry (Indonesia) Alexander Carbon Black Company (Egypt) Liaoning Birla Carbon (China) A V Cell Industry (Canada) A V Nackawic Industry (Canada) Aditya Birla Minerals Ltd.(Australia) Birla Laos Pulp and Paper Plantation Company (Laos)


Birla Sun Life Insurance Birla Sun Life Asset Management Company Ltd. Birla Sun Life Distribution Company Ltd. Tranfac Industry Ltd.

A US $29.2 billion corporation, the Aditya Birla Group is in the league of Fortune 500. It is anchored by an extraordinary force of 130,000 employees, belonging to 30 different nationalities. In India, the Group has been adjudged "The Best Employer in India and among the top 20 in Asia" by the Hewitt-Economic Times and Wall Street Journal Study 2007. Over 50 per cent of its revenues flow from its overseas operations. The Group operates in 25 countries ² India, UK, Germany, Hungary, Brazil, Italy, France, Luxembourg, Switzerland, Australia, USA, Canada, Egypt, China, Thailand, Laos, Indonesia, Philippines, Dubai, Singapore, Myanmar, Bangladesh, Vietnam, Malaysia and Korea.

Globally the Aditya Birla Group is: :: A metals powerhouse, among the world's most cost-efficient aluminium and copper producers. Hindalco-Novelis is the largest aluminium rolling company. It is one of the three biggest producers of primary aluminium in Asia, with the largest single location copper smelter :: No.1 in viscose staple fibre :: The fourth largest producer of insulators :: The fourth largest producer of carbon black :: The 11th largest cement producer globally, the seventh largest in Asia and the second largest in India :: Among the world's top 15 BPO companies and among India's top four :: Among the best energy efficient fertiliser plants In India: :: A premier branded garments player :: The second largest player in viscose filament yarn :: The second largest in the chlor-alkali sector :: Among the top five mobile telephony companies :: A leading player in life insurance and asset management :: Among the top three supermarket chains in the retail business Rock solid in fundamentals, the Aditya Birla Group nurtures a culture where success does not come in the way of the need to keep learning afresh, to keep experimenting. Beyond business ² the Aditya Birla Group is: :: Working in 3,700 villages :: Reaching out to seven million people annually through the Aditya Birla Centre for Community Initiatives and Rural Development, spearheaded by Mrs. Rajashree Birla :: Focusing on: health care, education, sustainable livelihood, infrastructure and espousing social causes :: Running 42 schools and 18 hospitals Aditya Birla Novo: Aditya Birla Nuvo is a diversified business conglomerate with interests in viscose filament yarn (VFY), carbon black, branded garments, fertilizers, textiles and insulators. Aditya Birla Novo, through its subsidiaries and joint ventures has made forays into life insurance, telecom, business process outsourcing (BPO), IT services, asset management and other financial services. Ultra Tech Cement: The Groups cement business is under both Grasim and UltraTech¶s cement. Together the two companies under the group account for a substantial share of the cement market in India. UltraTech¶s cement comprises the erstwhile cement business of L&T which was acquired by the group. Ultra Tech

Cement manufactures and markets Ordinary Portland Cement, Portland Blast Furnace Slag Cement and Portland Pozzolana Cement. It is the country¶s largest exporter of cement clinker. Its export market includes countries around the Indian Ocean, Africa, Europe and the Middle East. GRASIM INDUSTRIES LIMITED is the flagship company of Aditya Birla Group. Grasim Itself is a multi-product company with cement being the major area of focus. Now a day the cement division of the Grasim industries Limited works under the banner of the Ultratech Cement limited (UTCL). In August 1998, Grasim acquired the wellknown Dharani Cements Ltd situatedat Reddipalayam, Perambalur District. Soon after the acquisition, Grasim embarked on a mostprestigious project of one million top capacity cement plant at the existing locations. READY MIX CONCRETE Concrete is a hardened building material created by combining a binder i.e. cement (commonly Portland cement), aggregate (generally gravel and sand), water and admixtures. Although people commonly use the word cement as a synonym for concrete, it is only one of several components in modern concrete. As concrete dries, it acquires a stone-like consistency that makes it ideal for constructing roads, bridges, water supply and sewage systems, factories, airports, railroads, waterways, mass transit systems. Concrete is used more than any other man made material on the planet. It was in 1824, when Joseph Asp din and Isaac Charles Johnson refined synthetic cement that Portland cement came into existence. However, it was not widely used until World War II, when several large docks and bridges were constructed. Today, different types of concrete are categorized according to their method of installation. Ready or pre-mixed concrete is batched and mixed at a central plant before it is delivered to a site. This type of concrete is sometimes transported in an agitator truck and is also known as transit-mixed concrete. Shrink-mixed concrete is partially mixed at the central plant and its mixing is then completed en route to the site. The secret of good concrete lies in the degree of quality control and technical parameters of the mix. UltraTech¶s, the Aditya Birla Group Company, which makes good concrete better, maintains a high level of precision in its quality assurance procedures and produces world-class concrete that comes in a package of highly reliable durability, strength and performance. The making of concrete is a science as well as an art. Science because the right proportions of allthe ingredients as per the standard Bureau of Indian Standards (BIS) code assures the desired strength and durability. And an art because it is not just the accurate proportioning which determines the quality of concrete, but the way it is mixed, placed, compacted, cured and protected also play a great role.UltraTech Concrete makes good concrete better because the company takes extra

care to make sure it is perfect both ways ² proportion wise and handling wise. To ensure quality, each and every sample of concrete passes through stringent tests in fresh and hardened state to ensure strength, durability and performance. How does UltraTech¶s Concrete make good concrete better? Right from selecting the raw materials to batching and mixing, transportation, placing of concrete till testing of concrete ² UltraTech¶s ensures flawless operation in every stage. Clearly, it's all about putting together the right ingredients for that perfect recipe. Cement Fresh cement, protected from weathering conditions and influence of external environment such as air, moisture etc., is an important ingredient of concrete. UltraTech¶s Concrete plant uses fresh cement directly procured from the cement plants through cement bulkers, which in turn pump indirectly into the concrete silos thus protecting it from the external environment. Coarse aggregates Coarse aggregates ² free from clay, weeds and other organic materials, cubical or rounded with combination of different sizes and not elongated or flaky ² ensure proper strength of the concrete and make it non-porous. These coarse aggregates are a vital ingredient of good concrete. UltraTechConcrete directly sources the aggregates from selected and approved suppliers, tested as per BISfor size, shape, gradation, impact value and crushing value etc. Fine aggregate Sand, the fine aggregate used in concrete must be free from silt, clay, salts and organic materials toprevent shrinkage cracks, which affect the concrete quality and durability. UltraTech¶s Concrete directly purchases sand from selected and approved suppliers tested for moisture content. To maintain the correct water-cement ratio, UltraTech¶s Concrete plants use moisture sensors and an automatic water correction procedure. Water Potable water, free from impurities such as oil, alkalis, acids, salts, sugar, and organic materials is ideal for concrete. UltraTech¶s Concrete uses water tested at frequent intervals and
uses water purifiers whenever necessary. Admixture Admixtures used in concrete during mixing ensure its workability (the ease of placing of concrete in moulds) and the setting time is carefully chosen from reputed companies. The workability is measured for every batch through the slump cone and is controlled using a scientific method of dosing. UltraTech¶s Concrete is equipped with computerized batching and mixing plants to strictly monitor the quality of the concrete. It uses a computerized recipe for the

raw mix design (cement: sand : coarse aggregate : water : admixture) and quantities of raw materials are weighed automatically as per the design mix. The water-cement ratio, very important to satisfy the strengthened durability criteria of concrete, is pre-designed through a scientific mix design as per the BISstandards and kept constant throughout to maintain the consistency in quality for a particular mix. Mixing is generally done through high efficiency pan mixers (machine mixers / turbo mixer) to ensure uniform and consistent quality concrete. Transportation The transport of concrete from its place of mixing to the delivery point is very critical, as there impossibility of the concrete drying out and losing its workability and plasticity. UltraTech¶s Concrete transports concrete from its ready mix concrete plants to the site through transit mixers. Further, the concrete is pumped to the actual point of concreting using high efficiency concrete pumps, thus maintaining the homogeneity of the concrete throughout the transit till the final deposition. Placing the concrete is expedited scientifically by specialized delivery trucks. Qualified and experienced engineers monitor the entire operation. It is anchored by an extraordinary force of 100,000 employees, belonging to 25 different nationalities. In India, the Group has been adjudged ³The Best Employer in India and among the top 20 in Asia´ by the Hewitt-Economic Times and Wall Street Journal Study 2007. Over 50 per cent of its revenues flow from its overseas operations. Beyond business ² the Aditya Birla Group is: Working in 3,700 villages reaching out to seven million people annually through the Aditya Birla Centre for Community Initiatives and Rural Development, spearheaded by Mrs. Rajashree Birla Focusing on: health care, education, sustainable livelihood, infrastructure and espousing social cause. .

Management Team Board of Directors
Mr. Kumar Mangalam Birla, Chairman Mr. S. Aga Mr. D. Bhattacharya Mr. S.K. Jain

Dr. S. Misra Mr. B.K. Singh Mr. K.K. Maheshwari Mr. Vikram Rao Mr. Ajay Srinivasan Mr. S. Misra, Managing Director

Executive President & Chief Financial Officer
Mr. K.C. Mishra

Chief Manufacturing Officer
Mr. S.K. Maheshwari

Company Secretary
Mr. S.K. Chatterjee

Mr. Kumar Mangalam Birla Chairman, the Aditya Birla Group

Mr. Kumar Mangalam Birla is Chairman of the US$ 29.2 billion Aditya Birla Group and India¶s first truly multinational corporation. An iconic figure, Mr. Birla holds several key positions on various regulatory and professional boards. He is a director of the Central Board of Directors of the Reserve Bank of India and chairman of the Staff Sub-Committee of the Central Board of the Reserve Bank of India. He serves on the Prime Minister of India¶s Advisory Council on Trade and Industry. He is the chairman

of the Board of Trade constituted by the Union Minister of Commerce & Industry, also chairman of the Ministry of Company Affairs¶ Advisory Committee. Additionally, he is on the National Council of the Confederation of Indian Industry (CII); the Apex Advisory Council of the Associated Chambers of Commerce and Industry of India, New Delhi and the Advisory Council for the Centre for Corporate Governance. He served as the chairman of Securities and Exchange Board of India¶s Committee on Corporate Governance, and as chairman of SEBI¶s committee on insider trading. He authored the nation¶s first report on corporate governance. On the academic front, Mr. Birla is the Chancellor of the Birla Institute of Technology & Science (BITS), Pilani. He is also a director on the G.D. Birla Medical Research & Education Foundation. Additionally, he is on the Asian Regional Advisory Board of the London Business School which provides counsel on the school¶s strategy and curriculum. He is also Honorary Fellow of the London Business School (LBS), a title conferred upon him by the governing board of the LBS. Several accolades have been showered on Mr. Birla such as the Asia Pacific Global HR Excellence ± Exemplary Leader Award and NDTV¶s ³Global Indian Leader of the year´, and ³Most Socially Responsible Leader´ by Outlook Business Magazine ± all in 2007. Earlier, the Lakshmipat Singhania ± IIM, Luck now National Leadership Award ± 2006, Business Leader, was conferred on Mr. Birla by the Prime Minister. Mr. Birla also has been named the World Economic Forum¶s ³Young Global Leader³, ³Ernst & Young Entrepreneur of the year", the Economic Times ± ³Business Leader of the year´, Business India¶s "Business Man of the year´, Business Today¶s ³Young Super Performer in the CEO Category´, NITIE¶s ³Business Visionary´, and the Bombay Management Association¶s ³Management Man of the year´. In recognition of his exemplary contribution to Indian business, the Banaras Hindu University awarded the D.Litt (Honoris Causa) Degree to him. The Honorary Degree of Doctor of Science (Honoris causa) was bestowed on Mr. Birla in recognition of his invaluable contribution in the field of business administration by the G.D. Pant University of Agriculture & Technology, Pantnagar. For the development of technology and for his involvement in bringing the country at par with other countries in the field of industries, the SRM University in Tamil Nadu conferred the Degree of Doctor of Literature. To salute his entrepreneurial excellence and exemplary contribution to Indian business, the All India Management Association conferred its Honorary Fellowship on him. Likewise, the National HRD Network named him ³Outstanding Business Man of the year´. A chartered accountant, Mr. Birla earned an MBA from the London Business School, where he is also an Honorary Fellow. Mr. Kumar Mangalam Birla and his wife, Mrs.

Neerja Birla, have three children, Ananyashree, Aryaman Vikram and Advaitesha.

Mr. Sanjeev Aga
Managing Director, Idea Cellular Limited and Director Aditya Birla Management Corporation Private Limited

Mr. Sanjeev Aga is Managing Director of Idea Cellular Limited, a leading Indian mobile services operator. He is a Director on the Board of the Aditya Birla Management Corporation, and is the Chairperson of the Cellular Operators Association of India. In a business career commencing in 1973, Mr. Aga has held senior positions in Asian Paints, Chellarams (Nigeria), and Jenson & Nicholson. In 1987, he joined Blow Plast to head the furniture business, was made Chief Executive of Mattel Toys in 1990, and in January 1993 was appointed Managing Director of Blow Plast with multi-business responsibility including the flagship VIP luggage business. In November 1998, he was appointed as CEO of the Aditya Birla Group's telecom JV, Birla AT&T Ltd. He led the company through a period of fast-paced change, through expansion and acquisition, and merger with Tata Cellular Ltd., to be CEO of what became Idea Cellular. From May 2005 until October 2006, Mr. Aga was Managing Director of Aditya Birla Nuvo Ltd., a conglomerate whose interests span diverse group businesses. Mr. Aga is an Honours graduate in Physics from St. Stephen's College, Delhi and a post graduate from the Indian Institute of Management, Kolkata

Mr. Debu Bhattacharya Managing Director, Hindalco Industries Limited, Vice Chairman Novelis Inc. and Director Aditya Birla Management Corporation Private Limited

Mr. D. Bhattacharya heads Aditya Birla Group's (one of the largest and most respected business Groups in India) non-ferrous metals business, and is the Managing Director of Hindalco Industries Limited, a Fortune 500 company with revenues (consolidated) in excess of Rs.60,000 crore. With Hindalco acquiring Novelis, the world's largest aluminium rolling company in May 2007, Mr Bhattacharya became the Vice Chairman of Novelis Inc. He is the Chairman of Utkal Alumina International Limited and of Aditya Birla Minerals Limited, a wholly-owned copper subsidiary of Hindalco in Australia, which runs two copper mines ² one in Nifty and the other one in Mt. Gordon. Mr. Bhattacharya is Director of Aditya Birla Management Corporation Limited; Birla Management Centre Services Limited; Dahej Harbour and Infrastructure Limited (a wholly-owned subsidiary of Hindalco), Minerals & Minerals Limited and Aditya Birla Power Company Limited. Other positions held by Mr. Bhattacharya include Hon. President ² Aluminium Association of India (AAI); Director ² International Aluminium Institute (IAI), Director ² The Fertiliser Association of India (FAI); Member ² Expert Committee of Agriculture and Agro-Industry of Associated Chambers of Commerce and Industry of India; and; Member ² Industrial Advisory Council for the state of Madhya Pradesh. Before taking over as Managing Director of Hindalco Industries Limited, Mr. Bhattacharya was the Managing Director of erstwhile Indo Gulf Corporation Limited. Mr. Bhattacharya is the recipient of the prestigious "India Business Leader of the Year Award (IBLA) 2005", and the much coveted "The Asia Corporate Citizen of the Year Award (ABLA) 2005". Mr. Bhattacharya is the recipient of the LEXI Award 2007 for Strategic & Leadership Excellence.

Mr. Bhattacharya earned a B. Tech (Hons.) in Chemical Engineering from IIT, Kharagpur, and a B.Sc. (Hons.) in Chemistry from Presidency College, Kolkata. Mr. K. K. Maheshwari Head, Global Chemical Business, Global Trading Business and Management Services Division Aditya Birla Group

Mr. K. K. Maheshwari heads the Aditya Birla Group's global Chemical Business which spans seven companies in three countries ² India, Thailand and China. The Group¶s Chemical Business comprises of chlor-alkali, inorganic and organic fluorine chemicals, phosphates for industrial and food application, epoxy resins, epichlorohydrine, sulphur based chemicals, hydrogen peroxide and viscose filament yarn. He is also responsible for the Group's global trading business with its main offices at Dubai and Singapore and 12 branches spread across Asia, Middle East and Africa and the Management Services Division. Together, they record revenues of over US $2.5 billion. Mr. Maheshwari is a director of Aditya Birla Management Corporation Private Ltd, the Group¶s apex decision making body that provides strategic direction to the various companies in its fold. Mr. Maheshwari has been with the Aditya Birla Group for 23 years. In the initial period, he was responsible for setting up the first Corporate Finance Division of the Group in Indian Rayon and Industries Ltd (now renamed as Aditya Birla Nuvo Ltd). He was also closely involved in the restructuring of the Group's operations and acquisitions for business growth. In 1988, he moved to Thailand where he was responsible for Thai Polyphosphate and Chemicals Co. Ltd. and Thai Organic Chemicals Co. Ltd. He moved back to India in early 2001 to look after the Group's Chemical Business in India. Since March 2005, Mr. Maheshwari has been responsible for the Group's global Chemical Business. In 2007, he became head of the trading business, bringing in sharp focus on product verticals and processes. An erudite speaker, he has been invited to speak at the University of Michigan Business School; the Global Chemical Leaders Summit and the Global Trader Summit, both in Singapore; the S P Jain Institute of Management and the Institute of Chartered Accountants of India, among others. He is the president of the Association of Man-Made Fibre Industry of India, member of the executive committee of the Indian Chemical Council and member of the National Chemical Committee, FICCI. Prior to joining the Aditya Birla Group, Mr.Maheshwari held senior positions in finance function with Blow Plast Ltd and Zenith Ltd.

Mr. Maheshwari was a member of the Ahluwalia Committee on State Specific Reforms for State Electricity Boards constituted by the Ministry of Power. While in Thailand, Mr. Maheshwari served as a trustee and was a member of the Board of New International School of Thailand in Bangkok. Mr. Maheshwari holds a masters degree in commerce (Business Administration) and is a fellow member of The Institute of Chartered Accountants of India having topped the CA exams in 1976. Mr. Vikram Rao Director, Aditya Birla Management Corporation Private Limited

Mr. Vikram Rao is Director, Aditya Birla Management Corporation Private Limited. He heads the Acrylic Fibre Business and supervises the overseas spinning business of the Group. Mr. Rao joined the Group in 1999 from Arvind Mills Limited where he was the President of the Shirting Division and Bed and Bath Projects. He also held additional responsibility as the President of Knit Fabrics and Garment Division. Mr. Rao started his career with Madura Coats in 1975 as a management trainee and, over the years, became the President of the Textile Division, reporting to the Chairman of Madura Coats. He holds the chairmanship of the Confederation of Indian Industries (CII) task force on textiles for Karnataka. He was awarded the Super Achiever Award by the Indira Group of Institutes, Pune in 2003. Mr. Rao is well known and highly regarded in the textile and apparel industry in India. Mr. Rao holds degrees in chemical engineering and business management. He is married, with two children and is a tennis and theatre enthusiast.

UltraTech Cement Limited Jharsuguda cement work, orissa

UltraTech Cement Limited
UltraTech cement Limited, Jharsuguda Cement Works which is a part of Aditya Birla Group was previously under the L&T group of companies. The Cement division of L&T was demerged in 2004 after Grasim Cement Ltd. made the 30% open offer for equity shares, gaining control over the new company, christened UltraTech. Besides the long term strategic value in the wake of rising demand for cement, with the growth of housing and infrastructure sectors in the country, the acquisition brings significant synergy gains to the parent company. UltraTech cement Limited, a Grasim subsidiary has an annual capacity of 17 million tons. It manufactures and markets Ordinary Portland cement, Portland Blast Furnace Slag Cement and Portland Pozzolana cement, as a part of the eight biggest cement manufacturer of the world. Ultratech has five integrated plants, five grinding units and three terminals-two in India and one in Sri Lanka. These include an integrated plant and two grinding units of the erstwhile Narmada Cement Limited, a subsidiary which has been amalgamated with the company in May 2006. Ultratech is the country¶s largest exporter of cement clinker. The company exports over 2.5 million tons per annum, which is about 30% of the country¶s total exports. The export markets span countries around the Indian Ocean, Africa, Europe and the Middle East. 
Incorporated y y y y

on 24th August 2000 as L&T cement Limited.

Cement business of L&T Ltd. demerged and vested in company in 2004. Grasim acquired management control in July 2004. Together with Grasim the largest cement producer in India. Name changed to UltraTech Cement Limited with effect from 14th October 2004.

Details of UltraTech s production capacities
Plant/Unit Kiln capacity (tdp) Capacity (million tpa) A Composite integrated plants* Andhra Pradesh Cement Works Awarpur Cement Works Gujarat Cement Works Hirmi Cement Works Narmada Cement Jafrabad Works B Grinding Units Arakkonam Cement Works Jharsuguda Cement Works Narmada Cement-Ratnagiri Works Narmada Cement-Magdala Works West Bengal Cement Works Total

8000 9500 15000 8050 4350

2.3 3.3 5.3 1.6 0.4 1.2 0.8 0.4 0.7 1.0 17.0

* The integrated plant has their own mines, their captive power plants for running the plants.

All the plants of the UltraTech are ISO 14001 Environment Management Systems certified and adhere to OHSAS 18001 standards. Clean technologies and processes that combined economic progress and sustainable environment have been adopted at UltraTech¶s plants at Awarpur and Ratnagiri in Maharashtra; Kovaya, Jafrabad and Magdalla in Gujarat; Hirmi in Chhattisgarh; Arakkonam in tamil Nadu; Tadipatri in Andra Pradesh; Jharsuguda in Orissa and Durgapur in West Bengal. Plant ISO 9001 ISO 14001 OSHAS 18001

Awarpur cement Works Hirmi Cement Works

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Jharsuguda cement Works Gujarat cement Works Andhra Pradesh Cement Works Arakkonam Cement Works Narmada Cement Company Ltd.

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Jharsuguda Cement Works is an ISO certified company. It has been awarded with ISO: 9001, ISO: 14001 & ISO: 18001 certificates. ISO: 9001This is the certificate that gives important on QMS (Quality Management Systems) that always gives importance to quality of the product. ISO: 14001This certificate gives importance to EMS (Environment Management Systems) where environment always matters. OHSAS: 18001OHSAS stands for Occupational Health & Safety Assessment Series. OHSAS give importance to health & safety of the employee within company.

UltraTech¶s products include Ordinary Portland cement, Portland Pozzolana cement and Portland Blast Furnace Slag cement. Ordinary Portland cement:Ordinary Portland cement is the most commonly used cement for a wide range of applications. These applications cover dry-lean mixes, general-purpose ready-mixes and even high strength pre-cast and pre-stressed ordinary concrete. Portland Pozzolana Cement:Portland Pozzolana cement is ordinary Portland cement blended with pozzolanic materials (power station fly ash, burnt clays, ash from burnt plant material or silicious earth) either together or separately. Portland clinker is ground with gypsum and pozzolanic materials which, together they do not have cementing properties in themselves, combine chemically with Portland cement in the presence of water to form extra strong cementing material which resists wet cracking, thermal cracking and has a high degree of cohesion and workability in concrete and mortar. Portland Blast Furnace Slag cement:-

Portland Blast Furnace Slag cement contain up to 70% of finely ground, granulated blast-furnace slag, a nonmetallic product consisting essentially of silicates and alumino-silicates of calcium. Slag brings with it the advantage of the energy invested in the slag making. Grinding slag for cement replacement takes only 25% of the energy needed to manufacture Portland cement. Using slag cement to replace a portion of Portland cement in a concrete mixture is a useful method to make concrete better and more consistent. Portland blast-furnace slag cement has a lighter color, better concrete workability, easier finish ability, higher compressive, flexural strength, lower permeability, improved resistance to aggressive chemicals and more consistent plastic

LAND:The total land acquired for establishment of the factory in the Revenue Circle Arda is 165 acres. LOCATION:Company s plant is situated in the district of Jharsuguda, in the Western part of Orissa. It is on the Howrah-Bombay Rail line situated near Dhutra railway station which is 10kms from Jharsuguda railway station. It is situated in an area of 165 acres in the midst of three villages named Arda, Dhutra, and Champapara. ESTABLISHMENT:For the purpose of establishing cement plant the land acquisition process in the month of May 1992. The construction of the company was completed in March 1993 and commercial production and dispatch in 14th September 1993. RAW MATERIALS:Jharsuguda Cement works produces Portland Pozzolana cement by grinding the following raw materials like:1. Clinker:Clinker which is calcinated from limestone procured from Hirmi cement Works of UltraTech (Chattisgarh). It is used about 66%. 2. Gypsum:The Gypsum which are used here are of two types; one is Mineral Gypsum another one is Chemical Gypsum. The Mineral Gypsum is brought from

Rajasthan and the Chemical Gypsum is brought from Coromondal Fertilizer Vizag. It is used about 5%. 3.Fly Ash:It is procured from HINDALCO Hirakud, 50% and rest from OPGC Banharpali. It is used about 29%. MANUFACTURING PROCESS This clinker, fly ash and gypsum mixed together and grind to cement packed into of 50kgs bag each. As per the demand and requirement of the market, the packed cements are dispatched to various locations through trucks and rakes. The transportation works are done by road and railways respectively MANPOWER STRENGTH:Jharsuguda Cement Works is a grinding unit. The Jharsuguda Cement Works has total man power of 127 permanent and 309 contract employees. It is having a limited manpower which is presented in a tabular form:1. Officers & Supervisors (O & S): 2. Wage board employee: a. Monthly Rated (MR) b. Daily Rated 3. Contract Labour: TOTAL= (DR) 12 72 309 436 43

The company is having its great vision, mission & values for the development of the company. VISION:-

Jharsuguda Cement Works shall be a Premium brand cement manufacturer. We shall be innovative with entrepreneurial excellence meeting the expectation of all stakeholders. MISSION:We shall manufacture Portland Pozzolana cement with consistence high quality adopting good manufacturing practices to meet cent percent requirement of the customers. VALUES:The company is having five great values and these values are found to be important even from the chairman s desk. Those are as follows:I. INTEGRITY:Acting and taking decision in a manner that are fair, honest, following the highest standard of professionalism and are perceived to be so. Integrity means not only financial and integrity but in all other forms as are commonly understood. Key words that connote integrity are truthful, principled, ethical, transparent, upright & respectful. II. COMMITMENT:On the foundation of integrity, see commitment as doing whatever it takes to deliver as promised. Key words for commitment are accountability, discipline, responsibility, result-orientation, self-confidence & reliability. III. PASSION:Passion is denied as missionary zeal arising out of an emotional engagement with work, which inspires each one to give his or her best. Relentless pursuit of goal & objectives with highest level of energy and enthusiasm, that is voluntary & spontaneous. Key words that connote passion are intensity, innovation, transformational, fire in the belly and inspirational deep sense of purpose. IV. SEAMLESSNESS:Seamlessness means thinking and working together like a team to get a common across functional silos, hierarchy, levels, across business line & involvement, openness, global, learning from the best & empowering. V. SPEED:Speed means satisfy the requirements of internal & external customers in short time period. Continuously seeking to crash timeliness and choosing the

light rhythm of optimize organization efficiency. Key words that connote speed are response time, agile, accelerated, timeliness, nimble, promote, proactive and decisive.

ADDRESS:UltraTech Cement Limited, Jharsuguda Cement Works, Near Dhutra railway Station, Post: Arda, District: Jharsuguda Pin Code: 768202 Phone: (06645) 283104/283105 Fax: (06645) 283108

PRODUCTION & DISPATCH:Year 1993-1994 1994-1995 1995-1996 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Production (In Lakhs MT) 1.43 3.96 5.34 5.54 7.53 6.21 6.34 7.37 6.79 6.10 5.22 7.78 8.82 8.93 10.03 Dispatch (In Lakhs MT) 1.33 3.95 5.37 5.56 7.56 6.21 6.34 7.37 6.80 6.10 5.25 7.76 8.82 8.87 10.06

UltraTech¶s Cement
Stock Code Bombay Stock Exchange National Stock Exchange Reuters Bloomberg 532538 ULTRACEMCO ULTC.BO UTCEM IS

Location Details - UltraTech Cement Location Type Address Registered Office 'B' Wing, Ahura Centre 2nd Foor Mahakali Caves Road Andheri (East) Mumbai - 400093 Maharashtra - India Phone : 66917800 Fax : 66928109 Email : sharesutcl@adityabirla.com Internet : N.A. Factory/plant Cement Works P.O. Awarpur Cement Project Taluka: Korpana Chandrapur District - 442917 Maharashtra - India Phone : 266323 Fax : 266339 Email : jainak@adityabirla.com Internet : N.A. Factory/plant Cement Works Bhogasamudram Tadipatri Ananthapur District - 515415 Andhra Pradesh - India Phone : 288841/47 Fax : 288821,288831 Email : csreddy@adityabirla.com Internet : N.A. Factory/plant Cement Works Kovaya Taluka: Rajula Amreli - 365541 Gujarat - India Phone : 283034 Fax : 283036 Email : kypk@adityabirla.com Internet : N.A. Factory/plant Cement Works Post Hirmi Raipur - 493195 Chattisgarh - India Phone : 281269 Fax : 281268 Email : jkumar@adityabirla.com Internet : N.A. Factory/plant Cement Works Chitteri Village Arakkonam - 631003

Tamil Nadu - India Phone : 293291 Fax : 233585 Email : ramanaraomv@adityabirla.com Internet : N.A. Factory/plant Cement Works Near Dhutra Railway Station P.O. Arda Jharsuguda District - 768202 Orissa - India Phone : 283104/105 Fax : 283108/110 Email : rbsingh@adityabirla.com Internet : N.A. Factory/plant West Bengal Cement Works Near EPIP Plot, Muchipara Durgapur - 713212 West Bengal - India Phone : 2533029 Fax : 2533358 Email : rbsingh@adityabirla.com Internet : N.A. Factory/plant Magdalla Port Surat - 395007 Gujarat - India Phone : 2725175 Fax : 2726952 Email : N.A. Internet : N.A. Factory/plant Ratnagiri Cement Works MIDC Industrial Ratnagiri - 415639 Maharashtra - India Phone : 223679 Fax : 221807 Email : N.A. Internet : N.A. Factory/plant Jafrabad Cement Works Village Babarkot Amreli - 365540 Gujarat - India Phone : 245103 Fax : 245110 Email : N.A. Internet : N.A. Factory/plant Cement Works Bhogasamudram, Tadipatri Mandal Ananthapur District - 515415 Andhra Pradesh - India Phone : 288841/01 Fax : 288821/59 Email : csreddy@adityabirla.com

Internet : N.A. Factory/plant Cement Works P.O. Kovaya, Taluka: Rajula Amreli - 365541 Gujarat - India Phone : 283034 Fax : 283036 Email : kypk@adityabirla.com Internet : N.A. Factory/plant Cement Works Village & Post: Hirmi, Tahsil: Simga Raipur - 493195 Chattisgarh - India Phone : 281217/218/221 Fax : 281572 Email : jkumar@adityabirla.com Internet : N.A. Factory/plant Near Magdalla Port, Dumas Road Surat - 395007 Gujarat - India Phone : 2725175/176 Fax : 2726952 Email : N.A. Internet : N.A. Factory/plant Ratnagiri Cement Works MIDC Industrial Estate, Zadgaon Block Ratnagiri - 415639 Maharashtra - India Phone : 223679 Fax : 221807 Email : N.A. Internet : N.A. Factory/plant Jafrabad Cement Works P B No.10, Village Babarkot Taluka:Jafrabad Amreli - 365540 Gujarat - India Phone : 245103 Fax : 245110 Email : N.A. Internet : N.A. Factory/plant West Bengal Cement Works Near EPIP, Muchipara, Post: Rajbandh Durgapur - 713212 West Bengal - India Phone : 2533030 Fax : 2533358 Email : rbsingh@adityabirla.com Internet : N.A. Factory/plant Arakkonam Cement Works: Chitteri Village District Vellore

Arakkonam - 631003 Tamil Nadu - India Phone : 293291, 293111 Fax : 293810 Email : ramanaraomv@adityabirla.com Internet : N.A. Factory/plant Ginigera Cement Works: Ginigera Grinding Unit Ginigera Village Koppal Gangavathi Road Koppa Karnataka - India Phone : 286575/201452 Fax : 286574 Email : N.A. Internet : N.A. Factory/plant Hirmi Cement Works: Village & Post: Hirmi, Tahsil: Simga Raipur - 493195 Chattisgarh - India Phone : 281217, 281218, 281221 Fax : 281572 Email : jkumar@adityabirla.com Internet : N.A. Factory/plant Jharsuguda Cement Works: Near Dhutra Railway Station P.O. Arda Jharsuguda District - 768202 Orissa - India Phone : 283104/105 Fax : 283108/110 Email : rbsingh@adityabirla.com Internet : N.A. Source : Religare Technova

Information Details
Address for correspondence UltraTech Cement Limited 'B' Wing, 2nd Floor Ahura Centre, Mahakali Caves Road Andheri (E) Mumbai 400 093 Tel: 022 - 66917800 Fax: 022 - 66928109 Email: sharesutcl@adityabirla.com Registrar and transfer agent Sharepro Services (Unit: UltraTech Cement Limited) Satam Estate, 3rd Floor

Above Bank of Baroda, Chakala, Andheri (E) Mumbai 400099 Email: sharepro@vsnl.com Tel: 28215168 Fax: 28392259

I. Largest domestic customer strength, II. Availability of raw materials in the domestic country.

I. More Govt. interference, II. More logistic cost.

I. Focus of new budget on development of physical infrastructure, II. Housing demand and consumption for increased demand

I. Substitute like marble for flooring, II. Foreign entries






BALANCE SHEET OF ULTRATECH CEMENT LIMITED (JCW) FOR THE YEAR ENDING 31ST MARCH 2006-07, 2007-08 & 2008-09 Year Particulars Assets Current Assets 2006-07 Rupees 2007-08 Rupees 78247514 2008-09 Rupees

Inventories Sundry debtors Cash and bank Other current Assets and Advance Total Current Assets Fixed Assets Gross Block Less: Depreciation Net Block Capital w-i-p Investment Total Assets Liabilities Current Liabilities Liabilities Provision Total Current Liabilities Share holder¶s fund Share capital Share capital Suspense Reserve & Surplus Loan Fund¶s Secured Loan Unsecured Loan Inter unit balance Total Liabilities

156490107 159043950 (8198120) 80826503 388162440 1132533440 628548446 503984994 73440193 10000 965597627

7328420 345446 75520061 201456077 1214884226 684538902 530345324 64887208 10000 796698609

121255078 56269146 94352 72014233 249632810 1224760449 750360104 474400344 95980257 10000 389876485

318346063 2181353 320527416 438297559 226075 -

395491828 395491828 632388801 5072641 -

430146926 430146926 890442350 11190303 -

206546577 965597627

236254661 796698609

511756168 389876485

Year Particulars Income Sales Other Income Interest & dividend 2006-07 Rupees 2854472773 1280473 29569712 2007-08 Rupees 2008-09 Rupees

3272153735 3766249364 953520 (54768748) 1129698 (120155891) 21941484

(99565827) (109849799)

Operating receipt Stock adjustment changes

Total Income Expenditure Raw material Manufacturing & Operating expenses Exercise duty Purchase of trading goods Staff expenses Sales & administrative expenses Interest & brokerage Depreciation Less: Self-consumption Total Expenditure Profit for the year Provision for Taxes Profit after Tax

2785757131 129094617 823027720 370998885 62072276 29746984 871288094 2802486 58428510 0 2347459572 438297559 0 438297559

3108488708 3669164655 125431360 1032838379 495049075 36704200 36163437 687833192 4429385 57939750 (288870) 259836496 1148324586 521325223 41608587 735152319 6010083 66663309 (198298)

2476099908 2778722305 632388801 890442350 0 0 632388801 890442350


Financial accounting involves recording transaction and preparing report and financial statement that can be used by management, owners, creditor, government agencies and other to understand what is happening in the business or nonprofit organization. ³Accounting´ is the process of identifying, measuring and communicating economic information to permit informed judgment and decision by users of the information.

Financial statement are major means employed by firm to present their financial situation to stock holders creditors and the public financial statement is a collection of data organized accounting to logical andconsistent accounting procedure. Its purpose is to convey understanding ofsome financial aspects of a business firm. The and product of financial accounting is financial statement consisting of the balance sheet,

profit and lossaccounting and statement changes in financial position.Financial statements are major means employed by a firm topresent their financial situation to stock holders, creditors and the generalpublic. Accounting reports on the result of operation and the current status of abusiness enterprise by a financial statement. The balance sheet and income and statement. Since the balance sheet and income statement are of limited interest the annual report of the company are supplemented by a third statement thechange in financial position and by foot notes which explain and amplify thereported numerical data.


(A) The Balance Sheet:The balance sheet is called a fundamental accounting report. It provides information about the financial standing or position of affirm at given instant. The balance sheet can be visualized, as a snapshot of the financial status of company is a valid for only one day the reference day. The position of the firm on a preceding day is bound to be different.³The balance sheet of a company indicates to management the financial status of a company as on a given moment. From an analyst point of view a balance sheet is written representation of the resources and liabilities of an individual partnership firm an association of a corporation.´ The contents of balance sheet can be divided into three divisions *Assets: Assets are valuable resources owned by a business, which are acquired at a measurable money cost these are economic resources of a firm which provide economic benefits to the company. Liabilities:Liabilities are claim of creditors against the enterprises arising out of past activities that are to be satisfied by the disbursement of utilization ofcorporate resources. They are economic obligation of the firm. *Owner¶s equity:The owner¶s equity is the owner¶s current investment in the assets of company. The entire system of recording business transaction is based on accounting equation. The accounting equation is an accounting formula expressing equivalence of the two expressions of assets and liabilities.

ACCOUNTING EQUATION (B) The Income Statement:The balance sheet, as discussed above, is considered a very significant statement from the view point of bankers, and other lenders, because it indicates the firm¶s financial position and strength, as measured by its recourses and obligations, however, editors and financial analysis have recently started paying more attention to the firm¶s capacity as a measure of its financial strength. Its income statement revels the firm¶s capacity as a measure of its financial strength. Its income statement reveals the earning potential of the firm. ASSETS = LIABILITIES + OWNER¶S EQUITY OR OWNERS EQUITY = ASSETS - LIBILITIES OR LIBILITIES = ASSETS - OWNER¶S EQUITY An income statement is a financial statement summarizing the result of company¶s income (profit) making activities for a specific time period. It summarizes revenues and expenses in a manner that discloses whether a company¶s activates in a particular fiscal period have resulted in profit or loss. The income statement is a scoreboard of the firm¶s performance during particular period of time. ³The profit and loss account is the condensed and classified record of the gains losses posing change in the owner¶s interest in the business for a period of time.´The income statement or the profit and loss account presents the summary of revenues, expenses and net income (or net loss) of a firm for a period of time. Thus, it serves as measure of the firm¶s profit ability. It¶s systematic array of the data of the revenues, revenues deduction (expenses, revenues, revenue deductions, expenses, losses, taxes etc.) Net income and distribution or assignment of the net income to creditors and property investors of a particular period. (C)STATEMENT OF CHANGE IN FINANCIAL POSITION Until 1960, the income statement and the balance sheet constituted the major financial statement. However, management traditionally made use of a wide variety of statement and reports in apprising internal company performance. One popular report for management¶s internal use was called the statement of changes in final position. From such a report, management could extract valuable information about where working CapitaLand cash come from and how they were used. If these past events could be projected in future, management would have a useful tool for budgeting. Today, the statement of changes of financial position represents third financial position represents a third financial statement. PARTIES INTERESTED

According to the American institute of certified public accountants, financial statement reflects, a combination a recorded facts, accounting convention and personal judgments and the judgments and conventions applied, affect themmaterially.Following are interested in financial statement:y y y y y y y y

Credit, suppliers and others are having business with the company. Debenture holders. Credit institutions and banks. Potential lenders and investors. Trade unions and employees. Important customers wishing to make a long standing with the company. Economist and analyst. Members of parliament, the public committee in respect in government companies. Taxation authorities. Other departments dealing with the industry in which the company engaged cooperative. The company law board.

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FINANCIAL APPRAISAL A company¶s financial statement are intended to summarize the results of its operation and its ending financial condition. The information in the statement is studied and related to other information by external users for several reasons. Current shareholders, for example, are concerned about there invested income, as well as the company¶s overall profitability and stability. Some potential investors are invested in ³solid ³companies that are companies whose financial statement indicate stable earnings and dividends with little growth in operations. Other prefers companies whose financial statement indicate rend for rapid growth in a company¶s short run solvency, its ability to pay current obligation as they become due. Long-term creditors are concerned about the safety of their interest; income and company¶s ability to continue earning cash flow to meet its financial commitments and these are only few of the users, and uses of financial statements. But the numerical data in the financial statement are quit calm. They cannot speak. Analytical data are not ending in themselves, but they are meant to an end. Financial appraisal is an attempt to determine the significance, and meaning of the financial statement data so that forecast may be made of the prospects for future earnings, ability to pay interest, debt maturities both current as well as long term profitability of a sound dividend policy. Financial appraisal involves the assessment of firm¶s past, present and anticipated future financial condition. Financial appraisal is a scientific evaluation if the

profitability and financial strength of a business concern. In fact financial appraisal and analysis of financial statement have nearly the same meaning. Financial statement analysis is used for the purpose of financial appraisal. Financial appraisal is the process of making a scientific proper, critical and comparative evaluation of the profitability and financial health of given concern through the application of financial statement analysis. Financial statement analysis is a preliminary step towards the evaluation of result dawn by the analysis or management accountant. Appraisal or evaluation of such results is made thereafter. Financial appraisal begins where financial analysis ends, and financial analysis starts where the summarization of financial data in the form of profit and loss account and balance sheet ends, in the words of Kenney and mecmillan,³financial statement analysis attempts to unveil the meaning and significance of the items composed in profit and loss account and balance sheet so as to assist the management in the formation of sound operating financial policies. The appraisal or analysis of financial statement spotlights the significant facts and relationship concerning managerial performance, corporate efficiency, financial strength or weakness and credit worthiness, that would have otherwise been buries in the maze of details.´The technique of financial appraisals frequently applied to the study of accounting data with a view to determining continuity or discontinuity of the operating policies and investment value of business. Everybody interested in the affairs of the company is interested in finding answer to the following searching question:A. Does the company earn adequate profit? B. Does the company process enough funds to meet its obligation as and when they mature? C. Is investment in the company safe? Appraisal of financial statement alone can answer such queries. Its true that statement analysis merely reveals what has taken place in the past, but past events given some indication of what may be expected in future unless some drastic changes take place in business it. Will continue to move in the same direction in the past. Roy .A. Faulkner is very correct to say ³if a train is moving forward at a known rate of speed, it is reasonable to assume that it will continue to move at approximately the same rate unless some obstacle interrupts its progress abruptly or the motive power is increased or decreased.´ Similarly it is a reasonable to assume that unless some realistic change take places in the places in the business, it will continue to move in the same general direction as indicated by its comparative trends.

NEED OF FINANCIAL APPRAISAL The need of financial appraisal varies accounting to type of users. For management are servers as mean s of ³self evaluation as it is like a report of its managerial skill and competence a banker can judge the liquidity position a creditor can plan buying and selling of hares of concern on the basis of safety of principal and its capital appearances as wanted by the past record of earning. A debenture holder of a concern can ascertain whether income is generates sufficient margin to pay the interest / answers to different question are provided by financial appraisal. By using this technique an economist can study the extent of ³concentration of economic power´ and pitfalls in the financial policies pursued, while a planner can ascertain if the patter of investment reveals the company¶s position in relation to labor and its welfare, legislation concerning licensing desirable in the socio economic interested may be based on statement analysis.

Items Current Assets Inventories Sundry Debtors Cash & bank Other current assets Loan & Advances Gross working capital Current Liabilities Liabilities Provision Net Working Capital 2006-07 156490107 159043950 (8198120) 80826503 388162440 318346063 69816377 2007-08 78247514 47328420 360082 75520061 201456077 395491828 (194035751) % Inc/dec -50.00 -70.24 -104.39 -6.57 -48.10 24.23 100 -377.92 2008-09 121255078 56269146 94352 72014233 249632809 430146926 (180514117) % Inc/dec 54.96 18.90 -73.80 -4.64 23.91 8.76 6.97


In the FY 2007-08, the inventories are decreased by 50% and in 2007-08 periods it was increased by 54.96% as more investments are done on inventories to increase production capacity. Debtors are less in the year 2007-08 than 2006-07 because in 2007-08 the sales are increased by 14.63% and in this 2008-09 the debtors are more and the sales are also increased because the company allowed more sales in credit to capture the market. The company keeps very less amount in the bank only because of that we can see the bank amount is very low amount. In this year the production capacity is stable that¶s why the company reduced the loan by 5% as compared to year 2007-08

Gross working capital:Gross working capital refers to the firm¶s investment in current assets are the assets which can be converted into cash within an accounting year and include cash , shortterm securities, debtors,(accounts receivable or book debts) bills receivable and stock(inventory). Working Capital:It¶s refers to the difference between current assets and current liabilities. Current liabilities are those claims of outsiders which are expected to mature for payments within an accounting year and include creditors (account payable) , bills payable ,and outstanding expenses Net Working Capital can be positive or negative. A positive net working capital will arise when current assets exceed current liabilities .a negative net working capital occurs when current liabilities are in excess of current assets. PERMANENT WORKING CAPITAL:We know that the need of current assets arises because of the operating cycle. The operating cycle is a continuous process and, there for, the need for current assets is felt constantly. But the magnitude of current assets needed is not always the same; it increases and decreases over time. However there is always a minimum level of current assets which is continuously required by a firm to carry on its business operations. Permanent or fixed, working capital is the minimum level of current assets. it is permanent in the same way as the firm¶s fixed assets are. Depending upon the changes in production and sales, the need for working capital, over and above permanent working capital, will fluctuate. For example extra inventory of finished goods will have to be minted to support the peak period of sale, and investment in debtors (receivable) may also increase during such periods. On the other hand,

investment in raw material, work in process and finished goods will fall if the market is slack. VARIABLE OR FLUCTUATING WORKING CAPITAL:Variable or fluctuating working capital the extra working capital needed to support the changing production and sales activities of the firm. Both kinds of working capital ± permanent orAmount of workingcapital (Rs) Temporary and Fluctuating Time fluctuating (temporary)-are necessary-to facilitate production and sales through the operating cycle. But the firm to meet liquidity requirements that will last only temporary working capital. In figure illustrates differences between permanent and temporary working capital. It is shown that permanent working capital is stable over time, while temporary working capital is fluctuating ± sometimes increasing and sometimes decreasing. However, the permanent working capital need not be horizontal if the firm¶s requirement for permanent capital is increasing (or decreasing) over a period FOCUSING ON MANAGEMENT OF CURRENT ASSETS The gross working capital concept focuses attention on two aspects of current assets management: 1. How to optimize investment in current assets? 2. How should current assets be financed


The need for working capital to run the day-to-day business activities cannot be overemphasized. We will hardily find a business firm which does not require any amount of working capital. Indeed, firms differ in their requirement of the workingcapital.We know that a firm should aim at maximizing the wealth of its shareholders. In its Endeavour to do so, a firm should earn sufficient return from its operations. Earninga steady amount of profit requires successful sells activities. The firm has to investenough funds in current assets for generating sales. Currents assets are neededbecause sales do not convert into cash instantaneously. There is always an operatingcycle involved in the conversion of sales into case.There is a difference between current and fixed assets in terms of theirliquidity. A firm requires many years

to recover the initial investment in fixedassets such as plant and machinery or land and building. On the contrary, investment in current assets such as inventories and debtors [accountreceivable] is realized during the firm¶s operating cycle that is usually less than a year. What is an operating cycle? Operating cycle is the time duration required to convert sales, after theconversion of resources into inventories, into cash. The operating cycle of a manufacturing company involve three phases: · Acquisition of resources such as raw material, labor, power and fuel etc. · Manufacture of the product which includes conversion of raw materialinto work-inprogress into finished goods. · Sales of the products either for cash or on credit. Credit sales createaccount receivable for collection.These phases affect cash flows, which most of the time, are neithersynchronized because cash outflows usually occur before cash inflows. Cashinflows are not certain because sales and collections which give rise to cashinflows are difficult to forecast accurately. Cash outflows, on the other hand, are relatively certain. The firm is, therefore, required to invest in current assets for a smooth, uninterrupted functioning. It needs to maintain liquidity topurchase raw materials and pay expenses such as wages and salaries; othermanufacturing, administrative and selling expenses and taxes are there ishardly a matching between cash inflows and outflow. Cash is also held to meetto any future exigencies. Stocks of raw material and work ±in- process are keptto ensure smooth production and to guard against non-availability of rawmaterials of other components. The firms hold stock of finished goods to meetthe demand of customers on continuous basis and sudden demand from somecustomers. Debtors (Accounts Receivable) are created because goods are soldon credit for marketing and competitive reasons.Purchase Payment Credit Sale Collection
RMCP+WIPCP+FGCP Inventory convention period Gross operation cycle Payable Net operating cycle Operating Cycle of manufacturing firm Receivable conversion price

Thus, a firm makes adequate investment in inventories, and debtors, for smooth, uninterrupted production and sale. How is the length of operating cycle determined? The length operating cycle of a manufacturing firm is the sum of (i) inventory conversion period (ICP) and (ii) debtors (Receivable) conversion period (DCP).The inventory conversion period is the total time needed for producing and selling the

product. Typically, it includes: (a) raw material conversion period (rmcp) ,(b)work-inprocess conversion period (WIPCP), and (c) finished goods conversion period (FGCP). The debtors¶ conversion period is the time required to collect the outstanding amount from the customers. The total of inventory conversion period and debtors conversion period is referred to as gross operating cycle (GOC).In practice, a firm may acquire resources ( such as raw material) on credit and temporarily postpone payment of certain expenses. Payables, which the firm can defer, are spontaneous sources of capital to finance investment in current assets,. The creditors (Payables) deferral period (CDP) is the length of time the firm is able to defer payments on various resource purchases. The difference between (gross) operating cycle and payables deferral period is net operating cycle (NOC). if depreciation is excluded from expenses in the computation of operating cycle, the net operating cycle also represents the cash conversion cycle(CCC).it is net time interval between cash collections sale of the product and cash payments fore resources acquired by the firm. It also represents the time interval over which additional funds, called working capital, should be obtained in order to carry out firm¶s operations. The firm has to negotiate working capital from sources such as commercial banks. The negotiated sources of working capital financing are called non-spontaneous sources. If net the consideration of the level of investment in current assets should avoid two danger points-excessive or inadequate investments in current assets. Investment in current assets should be just adequate to the needs of the business firm. Excessive investment in current assets should be avoided because it impairs the firm¶s profitability, as idle investment earns nothing. On the other hand, inadequate amount of working capital can threaten solvency of the firms because of its inability to meet its current obligations. It should be released that the working capital needs of the firm may be fluctuating with changing business activity. This may cause excess or shortage of working capital frequently. The management should be prompt to initiate an action and correct imbalances another aspect of the gross working capital point to the need of arranging funds to finance current assets. Whenever a need for working capital funds arises due to the increasing level of business activity or for any other reason. Financing arrangement should be made quickly. Similarly, if suddenly, some surplus funds arise they should not be allowed to remain idle, but should be invested in short- term securities. Thus, the financial manager should have knowledge of the sources of working capital funds as well as investment avenues where idle funds may be temporarily invested.

FOCUSING ON LIQUIDITY MANAGEMEN Net working capital is a qualitative concept. It indicates the liquidity position of the firm and suggests the extent to which working capital needs may be financed by

permanent sources of funds. Current assets should be sufficiently in excess of current liabilities to constitute margin or buffer for maturing obligations within the ordinary operating cycle of business. In order to protect their interests, short term creditors always like a company to maintain current assets at a higher level than current liabilities. It is a conventional rule to maintain the level of current assets twice the level current liabilities. However, the quality of current assets should be considered in determining the level of current assets vis ± a ± vis current liabilities. A weak Liquidity position poses a threat to the solvency of the company and makes it unsafe and unsound. A negative working capital means a negative liquidity, and may prove to be harmful for the company¶s reputation excessive liquidity is also bad. it may be due to mismanagement of current assets. There for, prompt and timely action should be taken by management to improve and correct the imbalances in the liquidity position of the firm. For every firm, there is a minimum amount of net working capital which is permanent. Therefore, apportion of the working capital should be financed with the permanent sources of funds such as equity share capital, debentures, long term debt, performance share capital or retained earnings. Management must, therefore, decide the extent to which current assets should be financed with equity capital and/or borrowed capital. In summary, it may be emphasized that both gross and net concepts of working capital are equally important for the efficient management of working capital. There is no precise way to determine the exact amount of gross or net working capital for any firm. The data and problems of each company should be analyzed to determine the amount of working capital. There are no specific rules to how current assets should be financed. It is not feasible in practice to finance current assets by short ± term sources only. Keeping in view the constraints of the individual company, a judicious mix of long and short term finances should be invested in current assets. Since current assets involve cost of funds, they should be put to productive use.


Analysis of working capital is an essential part of financial management. If there is an adequate amount of working capital and it is utilized in the right manner, it is a great achievement for the business. The excess of working capital causes financial stringency and brings the business to a standstill. Realizing the impotence of working capital in financial management the analysis of working capital becomes an essential phenomenon. It facilitates the adequacy and management of working capital. The management of working capital provides a careful inquiry into its components so as to control the working capital and to conserve it properly. It helps in determining the optimum level of working capital in the firm. The process of measurement and analysis of working capital is performed on the basis of financial statements of the business enterprise for past few years. In the present study the analysis of working capital of ultra tech cement ltd. has been made by two techniques vis., trend analysis and ratio analysis. WORKING CAPITAL TREND ANALYSIS The working capital trend analysis represents picture of variation in current assets, current liabilities and working capital over period of time. Such an analysis enables us to study upward and downward trend in current liabilities and its effect on the working capital position. The trend analysis is a tool of financial appraisal where the changes in the factors are compared with the base year assuming the base year as 100.In the present study a statement ± showing trend of working capital as well as its structure has been made. It is it scientific and important study because each component of working capital has got the relationship of causes and effects.

Liquidity Ratio:Current Ratio:Current ratio is one of the important ratios used in testing liquidity of a

Concerned firm. This is a good measure of the ability of company to maintain solvency over a short run. This is computed by dividing the total current assets by the total current liabilities and is expressed as: Current Ratio = Current Assets Current Liabilities The current assets of a firm represent those assets, which can be in the ordinary course of business, converted into cash within one accounting year. The current liabilities are defines as obligation maturing within a short period (usually one accounting year). Excess of current assets over current liabilities is known as working capital and since these two (current assets and current liabilities) are used incurrent ratio therefore, this ratio is also known as working capital ratio. With the help of this ratio the analyst can review the extent to which the company can covert such liabilities with current assets. The current ratio gives the analyst a general picture of the adequacy of the working capital of accompany and ability of the company to meet its day-to-day payment obligation. ³It likewise measures the margin of safety provided for paying current debts in the event of a reduction in the values of current assets.´The current ratio is very useful as a measure of short terms debt prying ability but it is tricky to interpret this ratio. Experts are of the view that the value of current assets should be at least double the amount if current liabilities. Walker and Bough have the same view when they ay ³a good current ratio may mean a good umbrella for creditors against the rainy days.´But to the management it reflects bad financial planning or presence of idle assets or overcapitalization´ IDLE CURRENT RATIO: 2:1
y y y y y y

If this ratio is higher than standards than it is assumed Very good short ±term liquidity/solvency. Excess stocks, bad debts and idle cash. Under trading If this ratio is lower than standards than it is assumed Unsatisfactory short-term liquidity. Shortage of stocks, less credit sales, shortage of cash.

Year Ratio

2006-07 1.22

2007-08 0.51

2008-09 0.58


According to banker¶s rule of thumb 2:1 is the ideal ratio for current ratio but as per the statistics of the last 3 years, the current ratio is good in 2006-07 and quite satisfactory in 2008-09. However the company is able to manage with the above current ratio, availing more credit from the vendor. If we see the nature of the business it is a grinding unit, so the investment is done more for the fixed assets.

Quick Ratio:The solvency of a company is batter indicated by quick ratio. The fundamental this Ratio is to enable the financial management of company to ascertain that would happen If current creditors press for immediate payment and either not Possible to push up the sales of closing or it id sold, a heavy loss is likely to be suffered. This problem arises because closing stock is two steps away from the cash and their price more or less uncertain according to market demand. The term quick assets include all current assets except inventories and prepaid expenses. It shows the relationship of quick assets and current liabilities. The Ratio is calculated as following Quick Ratio = Current Assets ± Inventor Current Liabilities It is indicator of a company's short-term liquidity. The quick ratio measures a company¶s ability to meet its short-term obligations with its most liquid assets. The higher the quick ratio, the better is the position of the company. It is known as the "acid-test ratio" or the "quick assets ratio". IDLE QUICK RATIO 1:1

Year Ratio

2006-07 0.72

2007-08 0.31

2008-09 0.30


As per the Banker¶s rule of thumb 1:1 ratio is satisfactory for the quick ratio. Here the inventories are not included as this ratio requires the liquid assets which are easily convertible to cash within a short period of time. The average collection period also affect this ratio as debts are the liquid assets. Again the firm¶s transactions are mainly done in credit and the credit period is a bit longer. So the quick ratio doesn¶t affect the firm.

Inventory Turn-over Ratio
Every firm has to maintain a certain level of inventory of finished goods so as to be able to meet the requirements of the business. But the level of inventory should neither to be high not to be low. It to high inventory means higher carrying cost and higher risk of stocks becoming obsolete whereas to low inventory may mean the loss of business opportunities. it is express in number of time . Stock turnover ratio or inventory turnover ratio indicates the no. of times the stock has been turned over during the period and evaluates the efficiency with which a firm a able to manage its inventory. This ratio indicates whether investment in stock is within proper limit or HIGHER RATIO INDICATES:y Stock is sold out fast.
y y y y y y y

Same volume of sales from less stock or more sales from Same stock Too high ratio shows stock outs or over trading. Less working capital requirement. LOWER RATIO REVEALS:Stock a sold out at a slow speed. Same volume of sale for more stock or less sale from same stock.

y y

More working capital requirement. Too low ratio show obsolete stock or under trading. Inventory turn-over ratio = Sales

Inventory Inventory turnover ratio measures the velocity of conversion of stock in to sales. Usually a high inventory turnover / stock velocity indicates efficient management of inventory because more frequently the stock are sold, the lesser amount of money is required to finance the inventory. Low inventory turnover ratio indicates inefficient management of inventory. in low inventory turnover implies over investment in inventories, the business, poor quality of goods, stock accumulation, accumulation of absolute and slow moving good and low profit as compared to total investment the inventory turnover ratio is also an index profitability where a high ratio signifies more profit µa low ratio signifies low profit some time a high inventories.
Year Ratio 2006-07 18.24 2007-08 41.82 2008-09 31.06

Interpretation:Activity ratio indicates the speed with which assets are converted to sales. Inventory turn-over ratio indicates the rate at which funds invested in inventories are converted into sales. The inventory turn-over ratio of the company is more in 2007-08 than 2008-09. The inventories are managed better in 2007-08 than the previous years and 2008-09 as higher inventory turn-over ratio is considered to be better. Higher the inventory turn-over ratio, lesser amount is required to be invested in inventories.

Days of Inventory Holding:Days of inventory holding = Inventory x 360 Sales Year Ratio 2006-07 19 2007-08 9 2008-09 12

Interpretation:The days of inventory holding shows the efficiency of the movement of the inventories into sales. Here we can see 2007-08 is a great year for the company as per inventory holding. The inventories are converted into sales quicker than the previous years.

Raw Material Inventory Turn-Over Ratio:Raw Material Turn-Over Ratio = Materials Consumed Avg. Raw Material Inventory
Year Ratio 2006-07 34.96 2007-08 16.07 2008-09 22.53

Interpretation:This ratio tells about the time period to convert raw materials into work-inprogress. The figure shows that 2007-08 has a lower level of raw material inventory turn-over. In manufacturing industries raw materials must be consumed fast and as per that point of view 2007-08 is better than 2006-07 and 2008-09.

Debtors Turn-Over Ratio:Debtors Turn-Over Ratio = Sales Debtors Year Ratio 2006-07 17.94 2007-08 69.14 2008-09 66.93


This ratio shows the liquidity of the debtors, how promptly they are paying to the firm. Higher value is considered to be better for this ratio, so in 2007-08 the debtors are more liquid and this helps the firm to maintain a healthy liquid asset.
Average Collection Period:Average Collection Period = Debtors x 365 Sales Year Ratio 2006-07 20 2007-08 5 2008-09 5

Interpretation:The average collection period shows promptness of the debtors in making payments. As per the statics 2007-08 and 2008-09 are the best among the 3 years for the company in getting the payments. The chances of bad debts and losses are more in 2006-07. Creditor Turn-Over Ratio:Creditor Turn-Over Ratio = Purchase Creditors Year Ratio 2006-07 7.32 2007-08 10.11 2008-09 16.38

Interpretation:-The ratio indicates the velocity with which the creditors are turned over in relation to purchases. Better the value better it is or otherwise lower the value less favorable the result.

Average Payment Period:Average Payment Period = Creditor x 365 Purchase Year Ratio 2006-07 32 2007-08 36 2008-09 22

Interpretation:It shows the average number of days taken by the firm to pay to its creditors. Higher the value implies greater credit period enjoyed by the firm. Lower value is considered to be better as it keeps a healthy liquidity position. Working Capital Turn-Over Ratio:A measurement comparing the depletion of working capital to the generation of Sales over a given period. This provides some useful information as to how Effectively a company is using its working capital to generate sales. Working Capital Turn-Over Ratio = Cost of sales Net Working Capital A company uses working capital (current assets - current liabilities) to fund operations and purchase inventory. These operations and inventory are then converted into sales revenue for the company. The working capital turnover ratio is used to analyze the relationship between the money used to fund operations and the sales generated from these operations. In a general sense, the higher the working capital turnover, the better because it means that the company is generating a lot of sales compared to the money it uses to fund the sales.

Year Ratio

2006-07 14

2007-08 -6

2008-09 -7.80

Interpretation:It shows the effective utilization of the net working capital. If we see the statistics of the company, the working capital turn over ratio is negative for the company, in the financial year 2007-08 and 2008-09. This is because current liabilities are more than current assets in both years.

Net Profit Margin:Net Profit Margin = PAT x 100 Sales Year Ratio 2006-07 15.35 2007-08 19.33 2008-09 23.64

Interpretation:This ratio indicates the efficiency of the management in manufacturing, selling, administrative and other activities of the firm. This ratio measures the overall ability of the company to turn each rupee sales in profit. In 2006-07 when the company

gained 15.35% for each one rupee invested, in the next 2 years it has increased to 19.33% and 23.64% respectively.

Gross Profit Ratio:Gross Profit Ratio = (Sales ± COGS) x 100 Sales Year Ratio 2006-07 65.51 2007-08 61.81 2008-09 72.80

Interpretation:This ratio indicates the efficiency with which a company produces its products. It is good in 2008-09 as compare to the previous years. In previous years the manufacturing cost is higher and excessive competition might be one of the reasons.



Current assets are not sufficient to meet the current liabilities. The liquid assets are also not sufficient to fund the liabilities. The company holds the inventory for around 30-35 days in an average for last 3 years. It is not same for all the years as the production capacity is changed every year. The company is getting material on credit for a long time. The average collection period is manageable and the company pays immediately to the suppliers. Sales are increasing over the years. Liabilities are increasing year-on-year basis and it is one of the reasons for the unhealthy Working Capital Position.








SUGGESTIONS y The company should improve the cash position to meet the current liabilities immediately, when required.

The quick assets condition has to be improved. As a manufacturing industry the company should show its endeavor towards decreasing the net operating cycle. The company has to make the debtors prompt in making payments.




Cash flow and fund flow statements should be prepared for the benefit of the company. Even the cash budget to know the cash requirement for each month. The company should invest in short term assets to meet the current liabilities. The non-moving stocks have to be removed continuously.






The plant being a small grinding plant is immediately contributing to the profitability of the company. After taken over by the Aditya Birla group the firm has increased the production capacity. Its main advantage is the location for production and distribution of the product. The company is located near to HINDALCO, another Aditya Birla Company of Aluminum, which is 70kms away from Dhutra. The Fly Ash required for the production of cement, brought from HINDALCO. The company pays only the transportation charges. As per the Working capital Analysis we saw the firm is retaining a small amount of current assets, which is good for profitability but not for the health of the company. Being a small grinding unit it depends upon the Head Office and fully fledged plant. It is advantageous for the company as it gets raw materials and money on credit when required. There is no doubt about the current assets management of the unit, it is managed aggressively. The working capital management is not that much good as concerned to the company. It is all due to the 24x7 support of the head office in every respect. The unit along with the Hirmi Cement Works and Durgapur Cement Works is the cheapest producer and top in the profitability concern.



Pandey, I.M, Financial management, 1978, Vikas Publishing House Pvt. Ltd. New Delhi Sharma, R.K. & Gupta, Shashi K, Management Accounting, 1996 kalyani Publisher, Chandra Prasanna, Financial Management, Golgotha Publishing Co. New Delhi, Jain, S.P, & Narang, K.L, Advance cost & Management Accounting, Kalyani Publisher, Ludhiana, MY Khan, P.K.Jain (1981), Financial Management,5th edition, Publisher Mc graw hill companies Horne Wwachonicz, J.R.Bhaduri (2005), Fundamentals and Financial management, 12th edition, Pearson publisher www.adityabirla.com www.ultratech.com Search engine www.google.com Annual Accounts from 2006-07 to 2008-09






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