STEP -HBTI

WINTER TRAINING PROJECT REPORT

ON
“A STUDY OF WORKING CAPITAL ANALYSIS
AND ITS APPRAISAL IN J.K CEMENT LTD.”

SUBMITTED TO:
DR. A.P.J ABDUL KALAM TECHNICAL UNIVERSITY, KANPUR
For the partial fulfillment of the requirement of
Masters of Business Administration
(MBA- 2017-2019)

Submitted by:

Priya Pal
(1718170032)

SCIENCE AND TECHNOLOGICAL ENERPRENEURS’ PARK HARCOURT

BUTLER TECHNOLOGICAL INSTITUTE, NAWABGANJ
KANPUR-208002
This is to certify that project report entitle

DECLARATION
I do hereby declare that the project report entitled “A study of working
capital analysis and its appraisal in J.K CEMENT LTD.” For partial
fulfillment of the Requirements for the award of the degree of MBA is a
record of original work done by me under the Supervision and guidance of
Mr. Rajeev Kumar Tiwari.
The Information provided is true according my Knowledge And his project
work is my own and has neither been submitted or published elsewhere.

(PRIYA PAL)
 ACKNOWLEDGEMENT

The project of such magnitude cannot be accomplished without the assistance

and co-operation of several people. Exchange of idea generates a new object to
work in a better way. So, whenever a person is helped and co-operated by others
His heart is bound to pay gratitude and is not merely formalities but an
expression of deep sense of gratitude and cumulative appreciation.

First of all, I wish to express my deep sense of gratitude to my Mentor MS.

RICHA MISHRA (Assistant Professor) whose support and guidance along with
timely advice has helped me to complete this project report on time.

I owe a special debt of gratitude to Sr. Accounts Officer of Finance

Department Mr. RAJEEV TIWARI for kind co-operation.

At last but not least I would also like to thanks my Parents and my friends for
providing me technical support and guidance.

PRIYA PAL
 PREFACE
To start any business, first of all we need finance and the success of that
business entirely depends On the proper management Of day-to-day finance
and the management of this short-term capital or finance of the business is
called Working Capital Management. Working capital Is The money Used
to pay for the Everyday trading activities carried Out By the business-
stationery needs, staff salaries and wages, rent, energy bills, payments For
supplies and so on.
At STEP HBTI, the MBA program has been Designed keeping in mind
requirement of company In the world at large. We, the student of STEP
HBTI are required to undergo 2-3 weeks company project study after
completing 3rd semester, where the students have To prepare a project
report during a particular area of specialization. Then the students have to
give presentation of their 2-3 weeks training project report To the panel of
faculty.
The objective of the training modules is to help the students to understand
the business environment well and equip us with the work culture of
companies in the present era.
I “PRIYAPAL” have done my 2-3weeks project training on a study of Working Capital
Analysis and its Appraisal under the guidance of our faculty guide Ms. RICHA MISHRA.
 CERTIFICATE
This is to certify that project report entitled ““A STUDY OF WORKING
CAPITAL ANALYSIS AND ITS APPRAISAL IN J.K CEMENT LTD.” ,
which is submitted by PRIYA PAL (1718170032) in partial fulfillment of the
requirement for the award of the degree of Master of Business Administration
(MBA) for “SCIENCE AND TECHNOLGY ENTERPRENUR’S PARK
HARCOURT BUTLER TECHNOLOGICAL INSTITUTE” KANPUR –
affiliated to Dr A.P.J Abdul Kalam Technical University ( A.K.T.U),Lucknow
is a record of candidate own works carried out by them under our Supervision
To the best of my knowledge the work has not been submitted in part or in full
to any other University or Institute for the award of any Degree or Diploma.

Ms .RICHA MISHRA
(Assistant Professor)
 TABLE OF CONTENTS
S. N TOPICS
1. EXECUTIVE SUMMARY
2. INTRODUCTION TO THE STUDY:
 OBJECTIVES OF THE STUDY
 PLACE OF THE STUDY
 SCOPE OF THE STUDY
 RESEARCH METHODOLOGY
3. INDUSTRY PROFILE: CEMENT INDUSTRY
 OVERVIEW OF INDUSTRY
 PORTER’S FIVE FORCE MODEL ANALYSIS
 MANUFACTURING PROCESS OF CEMENT
4. COMPANY PROFILE:
 JK CEMENTS: AT GLANCE
 PRODUCTS OF THE COMPANY
 BOARD OF DIRECTORS

5. COMPARISON OF FINANCIAL STATEMENTS BETWEEN FIRMS

6. INTRODUCTION TO WORKING CAPITAL:

 TYPES OF WORKING CAPITAL

 INFLUENCING FACTORS
 WORKING CAPITAL FINANCING
 CONSEQUENCES OF OVER AND UNDER ASSESSMENT OF
WORKING CAPITAL
 WORKING CAPITAL CYCLE
7. WORKING CAPITAL MANAGEMENT
 INVENTORY MANAGEMENT
  RECEIVABLES MANAGEMENT
 CASH MANAGEMENT
8. DATA ANALYSIS AND INTERPRETATION
9. QUESTIONNAIRE
10. FINDINGS
11. CONCLUSION & SUGGESTIONS
12. LIMITATIONS
13. ANNEXURE& BIBLIOGRAPHY
 EXECUTIVE SUMMARY
J. K. Cement Ltd. (“JKC” or “Company”) is part of the conglomerate, JK Organisation. The
company is promoted by Mr. Yadupati Singhania and (Late) Dr. Gaur Hari Singhania. The
group entered the cement manufacturing business in 1975.
One Of the largest white cement manufacturer in the World with 1.20
MTPA Capacity Including 0.6 MTPA White Cement Plant at Fujairah
Commissioned in Mar 2014. Also 2nd largest Producer of wall putty in
India with installed capacity of 0.5 MTPA. Highly reputed brand with
extensive nation-wide distribution.
Being A customer-focused organisation, company’s primary objective is to
cater To customer aspirations by providing value-added products. Their
Continued Trust has given company the confidence and motivation to
produce supreme and best-in-class products. We intend to continue our
growth, without making any compromise on our quality.
A powerful team can only raise the standard of a Company and ensure its
Sustainable growth. Individual talent matters, but only to a limited extent.
Therefore, company’s Focus Is on building a Team that will drive the
Company’s business growth. Company continue to Refine their established
people processes to keep Them abreast of global practices, thereby adding
value To The organisation. Company endeavour to reduce environmental
de-gradation, thus improving climatic condition in the long run. Moreover,
they are also taking steps to optimise resources and improve efficiencies.
The project tentitled “WORKING CAPITAL MANAGEMENT AND ITS
APPRAISAL IN J.K. CEMENT”. The purpose of the report is to get the in
depth understanding of the process of working Capital management. With
The Growing Indian economy and the government policies for
infrastructure The demand Of the cement is increasing and seeing this as an
opportunity Is Undertaking Many new projects for expansion of the
Production which are under implementation for increasing the capacity of
the plants.
INTRODUCTION
 INTRODUCTION TO THE STUDY:

Financial management refers to the efficient And effective management

of money (funds) in such a manner as to accomplish the objectives of the
organization. It is the specialized function directly associated with the top
management. The significance of this function is not Seen in the 'Line' but
also in the capacity of 'Staff' in overall of a company. It has been defined
differently by different experts in the field
Any firm, from time to time, employs its short-term assets as well as short-
term financing sources to carry out its day to Day business. It is this
management of such assets as well as liabilities Which is described as
Working capital management. Working capital management is a
quintessential part of financial management as a subject. It can also be
compared with long-term decision-making the process as both of the
domains deal with the analysis of risk and profitability.
Hence, this study focuses on the management of working capital in the
organisation as working capital form the life blood Of the business. The
management of working capital assumes great importance because of
shortage of working capital funds is perhaps the biggest cause of failure of
Man
y business units. Therefore, it is of great importance to pay attention to
the planning and control of working capital and an attempt is made To
make critical study of the various dimensions of the working Capital
management of J.K Cement Ltd.
 OBJECTIVE OF THE STUDY:
The following are the main objective of the study which has been
undertaken in the present study:

➢ To study the company’s financial position with respect to working

capital requirement.
➢
To calculate and to analyses the working capital requirement in the organization with
the help of various financial tools.
➢
To find out the methods used for better and efficient working capital management.
➢
To understand the role of inventory, cash and receivables while analyzing working
capital in an organization.
➢
To know the liquidity position of the organization.

PLACE OF STUDY:
This research is conducted at the finance department of J.K CEMENT
LTD. corporate office situated at KAMLA TOWER, KANPUR (Uttar
Pradesh). The study is undertaken as a part of the MBA curriculum From
10th JAN, 2019 to 25th JAN, 2019 in the form of Winter Internship.

SCOPE OF THE STUDY:

The study has got a wide and vast scope. As mentioned earlier the Study
mainly focuses on working capital management and also show The
financial performance of the organization with recent trends. It also covers
about the recent trends in the cement industry and also study The
comparison between J.K CEMENT LTD. and its other rivalry players.
 RESEARCH METHODOLOGY:
In everyday life, Human being has to face many problems viz. social,
Fo
economic, financial problems. These problems in life call r
acceptable and effective solutions and for this purpose, research Is
required and a methodology applied for the solutions can be found out.
Research is a common parlance refers to a
search for knowledge.
Fo
Research is also defined as a scientific and systematic research r
pertinent information on a specific topic. In fact, research is a Scientific
investigation.
Research methodology Is a procedure designed to an extent to which It
Is planned evaluated before conducting the enquiry and extent to Which
Th
the method for making decisions is evaluated before conducting e
enquiry and the Extent to which the method for making decisions Is
evaluated. The Research methodology if scientifically developed Enables
Betwee
the research with High degree of confidence, cause and effect n
the research activities and outcomes.
Researc
Research methodology is a way to systematically solve the h
Researc
problems. It may be understood as a science of studying how h
Th
Is done scientifically. It includes the overall research design, e

sampling procedure, data collection method and analysis procedure.

1. RESEARCH DESIGN:
A research design is the set of methods and procedures used in collecting and
analysing measures of the variables specified in the research problem. I have used
the descriptive research design while conducting the research.

2. DATA COLLECTION:

 SECONDARY DATA: Secondary data studies wholecompany records

and company’s balance sheet in which the project work has been done. In
addition, a number of reference books, journals and reports were also used
to formulate the theoretical model for the study. And some information
was also drawn from the websites.
3. TOOLS AND TECHNIQUE USED FOR ANALYSIS: Thetechniques used while
doing analysis are:
➢
Ratio analysis
➢
Comparative analysis
➢
Correlation
➢
Microsoft Excel

LIMITATION OF THE STUDY:

There is certain limitation related to the research and they are as follows:
▪ The major limitation is the limited time duration (i.e., 2 months) for
study and it’s not possible to observe every aspect of working capital
management.
▪ Another limitation is that company is bound by certain obligations
and so they are unable to provide full information to the outsiders.
▪ The study and conclusions are made on the data available in hand
but the back working is not known due to which findings and
conclusions are not fully appropriate.
▪ One of the limitation is of primary data collected through
questionnaire is Not sufficient to draw certain conclusion based on
The information provided through it. Hence, study is made on
secondary data also to reach up to a conclusion.
INDUSTRY
PROFILE:

CEMENT
INDUSTRY
 OVERVIEW OF THE CEMENT INDUSTRY:
India is the second largest producer of cement in the world. No wonder,
India's cement industry is a vital part of its economy, providing
employment To more than a million people, directly or indirectly. Ever
since It was deregulated in 1982, the Indian cement industry has attracted
huge investments, both from Indian as well as foreign investors.
India Has a lot of potential for development in the infrastructure and
construction sector and the cement sector is expected to largely benefit
from it. Some of the recent major government Initiatives such as
development of 98 smart cities are expected to provide a major boost to
the sector.
Expecting such developments in the country and aided by suitable
government foreign policies, several foreign players such as Lafarge-
Holcim, Heidelberg Cement, and Vicat have invested in the country in the
recent past. A significant factor which aids the growth of this sector is the
ready availability of the raw materials for making cement, such as
limestone and coal.

Market Size:
Cement prices in India recorded a 6.7 per cent month-on-month growth in
April 2017, thereby indicating the probability of growth in volume and
profitability of cement companies in the quarter ending June 2017.
The housing sector is the biggest demand driver of cement, accounting for
about 67 per cent of the total consumption in India. The other major
consumers of cement include infrastructure at 13 per cent, commercial
construction at 11 per cent and industrial construction at 9 per cent.
The cement capacity in India is estimated to be at 420 MT as of March
2017 With production growing at 5-6 per cent per year. The country's per
capita consumption stands at around 225 kg.
The Indian cement industry is dominated by a few companies. The top 20
cement companies account for almost 70 per cent of the total cement
Production of the country. A total of 188 large cement plants together
Account for 97 per cent of the total installed capacity in the country, with
365 small plants account for the rest. Of these large cement plants, 77 are
located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu.

INVESTMENTS:
On the back of growing demand, due to increased construction and
infrastructural activities, the cement sector in India Has seen many
investments and developments in recent times.
Some of the major investments in Indian cement industry are as follows:
Emami Ltd, a fast-moving consumer goods (FMCG) company, plans to
invest around Rs 8,500 crore (US$ 1.32 billion) to scale up its cement
Production capacity from 2.4 million tonnes (MT) to 15-20 MT in the next
three to five years.
The Gujarat-based Nirma group, with presence in detergent, soap and
Chemicals sector, has bought Lafarge India’s cement business, consisting
of 11 MT production capacities, for US$ 1.4 billion.
F.L. Smith, a global engineering company based in Copenhagen, has
signed A contract with India’s Larsen & Toubro Limited for engineering,
procurement and supply of equipment for a complete cement production
line with a capacity of 3,000 tonne in Tamil Nadu.

GOVERNMENT INITIATIVES:
➢
In the 12th Five Year Plan, the Government of India plans to
increase investment in infrastructure to the tune of US$ 1 trillion and
increase the industry's capacity to 150 MT.
➢
The Cement Corporation of India (CCI) was incorporated by the
Government of India in 1965 to achieve self-sufficiency in cement
production in the country. Currently, CCI has 10 units spread over
eight states in India.
In order to help the private sector companies, thrive in the industry, the government has
been approving their investment schemes. Some such initiatives by the government in the
recent past are as follows:
➢
The State Government of Chhattisgarh has auctioned one block of
Limestone (Kesla II) in Raipur District having estimated reserves of
215 million Tonnes valued at Rs 10,367crore (US$ 1.61 billion), and
would earn a cumulative revenue of Rs 11,894 crore (US$ 1.85
billion) to State Government over the lease period.
➢
The Union Budget proposed to assign infrastructure status to
affordable Housing projects and facilitate higher investments and
better credit facilities, in line with the government’s aim to provide
housing for all by 2022 which will boost cement demand.
➢
The Finance Minister, Arun Jaitley, said that the National Housing
Bank will refinance individual housing loans of about Rs 20,000
crore (US$ 3 billion) in 2017-18. The Finance Minister proposed to
complete 1 crore houses by 2019. All these developments are
expected to boost cement demand.
➢
The increased allocation to rural low-cost housing under Pradhan
Mantri Awaas Yojana- Gramin scheme to Rs 23,000 crore (US$
3.45 billion) From Rs 16,000 crore (US$ 2.4 billion) in FY17 is
likely to drive A 2 per cent increase in cement demand, Ambit
Capital said in a report.
RECENTS TRENDS AND REPORTS:
Credi
The t ratings Agency ICRA has forecast that cement demand is likely
to increase by 5% year-on-year in the 2017 – 2018 financial year due to
increases in infrastructure and residential housing. In a report on the Indian
Cement sector it said That demand for cement fell by 1.2% to 280Mt in the
2016 – 2017 period, according to the Hindu newspaper. It added that the
government’s demonetisation policy had decreased sales volumes by 9%
between November 2016 and March 2017 as construction activity fell.
The Cement Manufacturers Association (CMA) says that demand for
Cement Is likely to Grow in the second half of the Indian financial year due
Th
to e New Goods and Services Tax (GST) and increased infrastructure
spending. The cement industry is also expected to benefit from a 30%
Cost
Reduction in logistic s due to simplified state border checks, according
to The Press Trust of India. The CMA’s forecast follows a fall in growth
for the cement industry in the previous financial year.

Fig.1 Top cement producers and consumers in year 2016

The cement sector will witness 5 to 6 per cent CAGR over the next three fiscals on
account of recovery in demand, rating agency Crisil said.
According to Crisil, the demand of cement will double to 48 million
tonnes (MT) over the next three fiscals as compared to the past three
financial years.
It, however, said supply would be down to 31 MT from 39 MT.
"We foresee a sharp recovery in demand this fiscal after demonetisation dealt a major blow
leading to a 1.2 per cent de-growth last fiscal," said Crisil Ratings Senior Director Sachin
Gupta.
He further added: "The industry should be able to rack up 5-6 per cent compound annual
growth rate between this fiscal and 2020, or nearly twice as fast as between fiscals 2015 and
2017."
According to the rating agency, the surge in demand would also improve
the operating metrics of cement makers.
"The acquisitions totalled 42 MT of capacity, tantamount to the capacity
addition seen in the past 2.5 years," said Crisil, adding that once these
transactions are completed, acquirers will increase their installed capacity
significantly to 37 per cent from 28 per.
 PORTER’S FIVE FORCE ANALYSIS:

Threat from new entrants:

➢
High- Huge capital investments required present substantial barriersto entry and
achieving economies to scale.

Inter firm rivalry:

➢
Low- The Indian cement market is oligopolistic in nature,
characterised by tacit collusion where large players player’s partially
control supply for price discipline.

Supplier’s Power:
➢
Moderate- Cement players have to depend on the railways for
carriage outward and local coal companies for fuel although
diversification of freight options and fuel sources is diminishing the
supplier’s power.
Buyer’s Power:
➢
Low: Substantial market concentration among large players ensures
low bargaining power of buyer’s.

Threat of substitutes:
➢
Low: Although there are partial substitutes such as asphalt, glass,steel, wood, etc;
practically cement has no direct substitutes.
 MANUFACTURING PROCESS OF CEMENT:
Cement is the basic ingredient of construction and the most widely used
construction material. It is a very critical ingredient, because only cement
has the ability of enhancing viscosity of concrete which in returns provides
the better locking of sand and gravels together in a concrete mix.

TYPES OF CEMENT
Ordinary Portland Cement
(OPC) which has much Portland Slag Cement (PSC)
strengthand fineness.It is ideal isan intimately interground
for all kinds of construction jobs mixture of Portland Cement
and Clinker & granulated slag (Non-
mettalic) which is a by-product
Concrete components The another type of Grey
of iron blast from steel plant. It
production. OPC has three cement is Portland has a special character of later
grades that are differentiated by
their compressive strength, Pozzolana cement(PPC). compressive strength which is
expressed in mega pascals(MPa) The products complies gradually increased after 3days,
with the quality standards 7days &28 days obtaining
as specified by the BIS. The
50Mpa. This cement has less
three grades of OPC are: specified by the Bureau of water requirement for concrete
53-grade OPC Indian Standards(BIS) and construction & also better
43-grade OPC is much in demand, by workability can be achieved. It
both, the retail and the is mainly used in special
33-grade OPC
institutional segment. structure like pre- stressed
and here 53-grade OPC has concrete. It has highly corrosive
highhest compressive strength. resistance power, hence it can
be widely used in coastal areas.
Cement Manufacturing Process Phases
Production of cement completes in six phases. They are:

Cement Manufacturing Process Phase 1: Raw Material Extraction

Cement uses raw materials that cover calcium, silicon, iron and
aluminum. Such raw materials are limestone, clay and sand. Limestone is
for calcium. It is combined with much smaller proportions of sand and
clay. Sand & clay fulfill the need of silicon, iron and aluminum.

Extraction of raw material and crushing of material

Generally, cement Plants are fixed where the quarry of limestone is near
bye. This saves The extra fuel cost and makes cement somehow
economical. Raw materials are extracted from the quarry and by means of
conveyor belt material is transported to the cement plant. There are also
various other raw materials used for cement manufacturing. For example,
shale, Fly ash, mill scale and bauxite. These raw materials are directly
brought from other sources because of small requirement.
Cement Manufacturing Process Phase II: Proportioning, Blending
& Grinding
Fro
The Raw materials m quarry are now routed in plant laboratory where,
they Are analyzed and proper proportioning of limestone and clay are
making possible before the beginning of grinding. Generally, limestone is
80% and remaining 20% is the clay.

Proportioning of raw material at cement plant laboratory

Now cement plant grind the raw mix with the help of heavy wheel type
rollers and rotating table. Rotating table rotates continuously under the
roller and brought the raw mix in contact with the roller. Roller crushes the
material to a fine powder and finishes the job. Raw mix is stored in a pre-homogenization
pile after grinding raw mix to fine powder.

Cement Manufacturing Process Phase III: Pre-heating Raw Material

After final grinding, the material is ready to face the pre-heating chamber.
Pre-heater chamber consists of series of vertical cyclone from where the
raw material passes before facing the kiln. Pre-heating chamber utilizes the
emitting hot gases from kiln. Pre-heating of the material saves the energy
and make plant environmental friendly.

Preheating of raw material | Vertical cyclone

Cement Manufacturing Process Phase IV: Kiln Phase

Kiln is a huge rotating furnace also called as the heart of cement making process. Here, raw
material is heated up to 1450 ⁰C. This temperature
begins a chemical reaction so material called decarbonation. In the this reaction
(like limestone) releases carbon dioxide. High temperature of
kiln makes slurry of the material.

Rotary kiln

The series of chemical reactions between calcium and silicon dioxide

compounds form the primary constituents of cement i.e., calcium silicate.
Kiln is heating up from the exit side by the use of natural gas and coal.
When material reaches the lower part of the kiln, it forms the shape of
clinker.

Cement Manufacturing Process Phase V: Cooling and Final Grinding

After passing out from the kiln, clinkers are cooled by mean of forced air.
Clinker released the absorb heat and cool down to lower temperature.
Released heat by clinker is reused by recirculating it back to the kiln. This
too saves energy.

Clinker cooling | Cement making process

Final process of 5th phase is the final grinding. There is a horizontal filled
with steel balls. Clinker reach in this rotating drum after cooling. Here,
steel balls tumble and crush the clinker into a very fine powder. This fine
powder is considered as cement. During grinding gypsum is also added to
the mix in small percentage that controls the setting of cement.
Cement Manufacturing Process Phase VI: Packing and Shipping

Transportation of cement from silos

Material is directly conveyed to the silos (silos are the large storage tanks
of cement) from the grinding mills. Further, it is packed to about 20-40 kg
bags. Only a small percent of cement is packed in the bags only for those
Customers whom need is very small. The remaining cement is shipped in
bulk quantities by mean of trucks, rails or ships.

CEMENT MANUFACTURING PROCESS DIAGRAM

REPRESENTATION:

STEP1: MINING STEP2: CRUSHING

STEP3: GRINDING STEP4: FUEL PREPRATION

STEP5: KILN OPERATION STEP6: CEMENT GRINDING

STEP7: PACKING PROCESS STEP8: LOADING PROCESS

COMPANY
PROFILE
JK CEMENTS: AT GLANCE:

J.K. Cement Ltd Is an affiliate of the multi-disciplinary industrial

conglomerate J.K. Organization which was founded by Lala Kamlapat
Singhania. For over four decades, J.K. Cement has partnered India's multi-
sectoral infrastructure needs on the strength of its product excellence,
Customer orientation and technology leadership The Company has over
four decades of experienceincementmanufacturing.Our operations
commenced with commercial production at our first grey cement plant at
Nimbahera in the state of Rajasthan in May 1975. Subsequently the
Company also set up 2 more units in Rajasthan at Mangrol and Gotan. In
the Year 2009 the Company extended its footprint by setting up a green-
Uni
field t in Muddapur, Karnataka giving it access to the markets of south-
west India. In the year 2014, the company further expanded its capacity in
the North with brownfield expansion of 1.5 MnTPA integrated unit at
Mangrol and split grinding unit of 1.5 MnTPA at Jhajjar.

Today J.K. Cement has an installed grey cement capacity of 10.5 MnTPA
making it one of the leading manufacturers in the country.

The Company is the second largest manufacturer of white cement in India,

with an annual capacity of 600,000 tonnes in India. We are also the second
largest producer of Wall putty in the country with an annual installed
capacity of 700,000 tonnes. J.K. Cement was the first Company to install a
captive power plant In the year 1987 at Bamania, Rajasthan. J.K Cement is
also The first cement Company to install a waste heat recovery power plant
to take care of the need of green power. Today at its different locations,
the Company has captive power generation capacity of over 140.7 MWs
which include 23.2 MW of waste heat recovery power plants.

The Company has made its first international foray with the setting up of a green-field dual
process white cement-cum-grey cement plant in the free trade zone at Fujairah, U.A.E to cater to
the GCC and African markets. The plant at Fujairah has a capacity of 0.6 million tonnes per
annum for White Cement with a flexibility to change over its operation to produce up to 1 million
tonnes per annum of Grey Cement. The commercial production from Fujairah Plant started from
Sep'2014.With this, J.K Cement Ltd has become the second largest White Cement Producer in
the World. As a part of its new initiatives, the Company plans to increase the production capacity
of Wall Putty to keep pace with the rising demand. In this direction, the
company plans to put up 6 lac tonnes capacity at Katni in M.P. The first phase of 2 lac tonnes
commenced on 25.5.16. Backed by state-of-the-art technology, access to the best quality raw
materials and highly skilled manpower against the backdrop of India's infrastructural growth
in an overdrive, we are upbeat about the future. Superior products and a strong Brand name,
an extensive marketing and distribution network and the technical know-how represent the
Company's abiding strengths.

FOOTPRINTS OF THE COMPANY:

GLOBAL FOOTPRINTS:

Fig. Countries where white cement was exported in year 2016

 List of countries where White cement was exported (FY 2016)

Addis Ababa Mauritius

Austria Mozambique
Bahrain Myanmar
Bangladesh New Zealand
Ethiopia Nigeria
Gauteng Oman
Ghana Philippines
Hong Kong Qatar
Japan Rwanda
Kenya Singapore
Korea South Africa
KSA Sri Lanka
Kuwait Tanzania
Madagascar Thailand
Malawi Uganda
Zambia

FOOTPRINTS IN INDIA:
GREY CEMENT:
PLACE VOLUME % PLACE VOLUME %
Delhi 363413 5.28% Kerala 59402 0.86%
Goa 102117 1.48% Madhya Pradesh 700276 10.18%
Gujarat 250065 3.63% Maharashtra 952746 13.85%
Haryana 970538 14.11% Punjab 328403 4.77%
Himanchal 58276 0.85% Rajasthan 1517306 22.05%
Pradesh
Jammu & 26689 0.39% Uttaranchal 76610 1.11%
Kashmir
Karnataka 708092 10.29% Uttar Pradesh 766594 11.14%
Kerala 59402 0.86% TOTAL 6680527
 1975

The group entered the cement business with 0.3 MnTPA plant at Nimbahera .

2004
Acquired a cement division from its affiliate through slump sale, on a going concern basis,
with a capacity to manufacture 3.55 MnTPA of grey cement and 0.3 MnTPA of white
cement along with 15MW of captive plant.

2005
The Company got listed on BSE.

JOURNEY TO PROGRESS

2006

Successfully raised 2960 Mn through the Follow on Public Offer(FPO)

2007

Enhanced Grey cement capacity by 0.5MnTPA set up a 20MW coal based power palnt and 13.2MW of
waste heat recovery based powr plant at Nimbahera and enhanced White cement capacity by 0.1 MnTPA
at Gotan through FPO proceeds.

JOURNEY TO PROGRESS(CONT...)
 2009

Commissioned a 3 MnTPA Greenfield plant in south at Muddapur, Karnataka .

2012

National Award for Excellence In Cost Management- 2011 from ICAI.

2013

Best Employer Award in Northern Region, 2012- Employer's Association

of Northern India.

2014
Commissioned a 1.5 MnTPA gringing unit for Grey cement capacity at Jhajjar (Haryana).
Commissioned a 1.5 MnTPA Grey cement capacity at Mangrol(Rajasthan) with 35 MW captive
power including 10MW waste heat recovery.
Commissioned a 0.6 MnTPA white cement capacity at Fujairah(UAE).

2016

O.2 Million Tons Wall Putty plant in Katni- Madhya Pradesh.

Best Employer Award from Employer's Association of Rajasthan.
PLANTS CAPACITY

NIMBAHERA 3.25 MnTPA

MANGLORE 2.25 MnTPA

MUDDAPUR 3.00 MnTPA

GOTAN (GREY CEMENT) 0.47 MnTPA

JHARLI 1.50 MnTPA

GOTAN (WHITE CEMENT) 0.60 MnTPA

GOTAN (WALL PUTTY) 0.50 MnTPA

KATNI (WALL PUTTY) 0.20 MnTPA

FUJAIRAH 0.60 MnTPA

PRODUCTS OF THE COMPANY:
GREY CEMENT
This cement is sold under the name
known as Sarvashaktiman and PPC &
PSC is sold as J.K Super cement.
WHITE CEMENT
It is suitable for numerous decorative
and architectural applications in white,
light and dark colours. you can put
your personal touch on almost any
part of your house, be it interiors or
exteriors, using J.K. White Cement as
your magical tool.
BOARD OF DIRECTORS:

Mr. Yadupati Singhania

Chairman and Managing Director
Helped to evolve India's cement industry for over three decades. Played a
pivotal role in the introduction of international quality white cement in
India;
Director of the Employers Association of Northern India and Chancellor
of Sir Padampat Singhania University, Udaipur. President of Kanpur
Productivity Council and member of the Board of Governors of the
National Council for Cement and Building Material and Jodhpur Chamber
of Commerce.

Smt.Sushila Devi

Non-Executive, Non-Independent Director (Graduate of Art)

A Member of Managing Committee of Seth Anandram Jaipuria School,
Kanpur, President of Juari Devi Girls Inter College, Kanpur and President
of Juari Devi Girls Post Graduate College, Kanpur. Acting as Director of
M/s. Yadu International Ltd. and M/s. G.H.Securities Limited
COMPARITIVE ANALYSIS
OF FINANCIAL
STATEMENTS OF JK
CEMENT WITH OTHER
FIRMS:
INTRODUCTION TO PRISM CEMENT:
Prism Cement Limited is professionally managed Company promoted by
the Rajan Raheja Group. Prism Cement Limited is India's largest
integrated Building Materials Company with a wide range from cement,
ready-mixed concrete, tiles, bath products to kitchens. The Company has
three Divisions, viz. Prism Cement, H & R Johnson (India), and RMC
Ready-mix (India).
The Cement Division of the Company Operates one of the largest single
kiln cement plants in the country at Satna, Madhya Pradesh. The Division
also has a packing unit at Allahabad, Uttar Pradesh. Equipped with
machinery and technical support from world leaders, F. L. Smith & Co.
A/S, Denmark, Prism Cement has created a niche for itself in the cement
industry.
Prism Cement primarily caters to the Demand in the Northern Region,
mainly in the States of Uttar Pradesh, Bihar and Madhya Pradesh. Its first
line was commissioned in year 1997 with a clinker production capacity of
6000 tpd. It was increased to 13200 tpd after commissioning of second line
in January 2011. It presently produces 5.6 million tonnes of cement per
annum. The capacity expansion has Established the Division's brand in
new markets and to a larger consumer.
INTRODUCTION TO J.K. LAKSHMI CEMENT:
JK Lakshmi cement, an ISO 9002 certified company, started its operation
in the year 1938 In Sirohi district located in Rajasthan. It manufactures
wide range of cement. It is part of diversified JK Group having business
ventures in various segments such as paper, tyres, sugar, agri genetics and
clinic research. The group has a turnover of Rs 1500 crore.
The company has a network of 70 cement dumps spread across and over 2200 dealers
the states of Rajasthan, Gujarat, Uttaranchal, Punjab, J&K, Delhi, Haryana, U.P,
Mumbai and Pune. The the Company today stands at 4.75 MT combined capacity of
per annum.
It became first cement manufacturer in north India to introduce colour
bags to promote its product. The company's product is chosen for various
important projects such as IGNP, Sardar Sarvorar Dam and also by major
corporations like L&T, Reliance, Essar and Airport Authority of India.
JK Lakshmi Cement's manufacturing Facility has been rated amongst
Greenest Cement Plant of India by CSE GRP 2005.
INTER FIRM ANALYSIS OF FINANCIAL DATA:
(amount in cr.)
PARTICULARS JK CEMENT PRISM CEMENT JK LAKSHMI
CEMENT
Net Worth 1714.41 988.45 1333.44
Net Sales 3560.32 5550.36 2619.85
PBDIT 568.99 371.03 319.68
PBDT 299.40 131.34 127.38
PBT 143.12 (-21.07) (-35.50)
NET PROFIT 101.54 8.36 6.28
EPS 14.52 0.17 0.53

INTERPRETATION: This can be clearly observed from the above

data thet J.K CEMENT is aprofitable organization as compared to other
two firms as it has high net profit and its net sales is also high. The
company has high EPS(Earnings per share) which indicates that company
is liable enough to pay dividend to its Investors. The market price of
equity share is high so investors will gain high dividend on their shares.
  Liquidity & Solvency analysis of the firms:
Ratios J.K. CEMENT PRISM CEMENT J.K LAKSHMI
CEMENT
Current Ratio 0.87 0.91 0.47

Quick Ratio 0.78 0.82 0.44

Debt/Equity Ratio 1.46 1.67 1.27

INTERPRETATION: As per the above mentioned data and chart

following observations are made:
1. Firstly, current ratio is taken into Consideration. A high current ratio
shows that the firm is liquid and is able to meet its current liabilities.
Here, all the company has current ratio below 1 which is not a good
sign for the company as it shows that the firm is not equipped to
meet its short-term obligations as and when they are due. But still
PRISM CEMENT has higher ratio i.e.,0.91 as compared to others.
2. Second consideration is of quick ratio which is a better measure of
short-term liquidity and help in order to assess short-term solvency
and financial soundness of the firm. The ideal ratio is 1:1 and here
all the firms are below and again PRISM CEMENT exceeds both
the company. Hence, companies should work upon to increase their
ratios.
3. Thirdly, debt-equity ratio is considered to know the solvency of the
Company. High debt-equity shows that the business is making more
use of debt funds and thus is aggressive in its financing decisions.
Here, all company has ratio above 1 but Prism cement is highest .
  EFFICENCY RATIO OF THE FIRMS:
PARTICULARS JK CEMENT PRISM CEMENT JK LAKSHMI
CEMENT
Inventory turnover 8.70 11.77 12.22
ratio
Debtor’s turnover 23.34 9.42 31.38
ratio
Fixed asset 0.79 1.52 0.59
turnover ratio

INTERPRETATION: All the above ratio is also known as activity

ratio or turnover ratio which are used to assess the company efficiency to
convert the assets into sales. Higher efficiency ratio shows better position
of the company whether it is inventory turnover ratio, debtor’s turnover
ratio and fixed assets turnover ratio. Here, Prism cement shows higher
fixed assets Turnover ratio while J.K LAKSHMI exceed in debtor’s
turnover ratio. But company should lower down its debtor’s ratio as very
high ratio shows that company cannot deal in credit sales.
  PROFITABILITY ANALYSIS OF FIRMS:
PARTICULARS JK CEMENT PRISM CEMENT JK LAKSHMI
CEMENT

Gross profit margin 10.18 2.71 4.09

Cash profit margin 7.14 2.92 6.71
Net profit margin 2.85 0.15 0.23
Return on capital employed 9.78 8.43 5.53
Return on net worth 5.92 0.84 0.47

INTERPRETATION: The above chart shows the profitability

analysis of all the companies which portrays the profitability status of
different organizations. The followings points are observed through the
above-mentioned data:
1. Gross profit ratio shows the average margin on products sold. A high
profit margin shows that concern is able to generate high margin on
the product sold. Here, J.K. CEMENT has the highest gross profit
margin 10.18% which is far more than other two company. While
Net profit ratio indicates the overall profitability of the company and
again J.K. CEMENT has high net profit margin of 2.85% which
shows company is in a profitable situation.
2. Return on capital employed is calculated to assess the firm’s ability
to generate sufficient return on the capital invested. So, higher the
ratio, the better it is, as it shows overall profitability and as per data
J.K. CEMENT has the ratio of 9.78 which shows that company
generate 9.78% of return on capital invested. On other hand, return
 on net worth indicates the return generated on shareholders wealth
and again J.K. CEMENT is at top with 5.92% as compared to other
Companies.
Hence, J.K. cement is more profitable organization as compared to
other two organization but has to work on few parameters so has to
Increase its liquidity and solvency.
INTRODUCTION
TO WORKING
CAPITAL
INTRODUCTION:
In an ordinary sense, working capital denotes the amount of funds needed for meeting day-to-
day operations of a concern.

Definition:
Working capital is that amount of funds which is required to carry out the day-to-day
operations of an enterprise-whether big or small. It may also be regarded as that portion of an
enterprise’s total capital which is employed in its short-term operations.

These operations consist of primarily such items as raw materials, semi-

processed goods, sundry debtors, finished products, short-term
investments, etc. Thus, working capital also refers to all the short-term
assets known as current assets used in day-to-day operations of an
enterprise.
The Accounting Principles Board of the American Institute of
Certified Public Accountants, U.S.A. has defined working capital as
follows:
“Working capital, sometimes called net working capital, is represented by
the excess of current assets over current liabilities and identifies the
relatively liquid portion of total enterprise capital which constitutes a
margin of buffer for maturing obligations within the ordinary operating
cycle of the business.”

Components of Working Capital:

Working capital is composed of various current assets and current liabilities, which are as
follows:
(A) Current Assets: Those assets which can be easily converted into
cash within 1 year are kept under this category. Current assets are
significant foe a business as they are utilized for the conduct of day-
to-day functioning and for meeting miscellaneous expenses

(B) Current Liabilities:Current liabilities are those short- term

liabilities, which need to be liquidated and converted into cash generally within one
year.
 CURRENT ASSETS CURRENT LIABILITIES
Inventories or Stocks Sundry Creditors
 Raw Materials
 Work in progress
 Consumable stores
 Finished goods
Sundry Debtors Bills Payable
Bills Receivable Accrued expenses
Pre- payments Bank Overdrafts
Short- term investments Bank Loans (short- term)
Accrued income Proposed dividend
Cash and bank balance Tax Payments due

Concept of Working Capital:

The funds invested in current assets are termed as working capital. It is the
fund that is needed to run the day-to-day operations. It circulates in the
business like the blood circulates in a living body. Generally, working
capital refers to the current assets of a company that are changed from one
form to another in the ordinary course of business, i.e. from cash to
inventory, inventory to work in progress (WIP), WIP to finished goods,
finished goods to receivables and from receivables to cash.
There are two concepts in respect of working capital:

Gross Working Capital:

The sum total of all current assets of a business concern is termed as gross working capital.
So,

GROSS WORKING CAPITAL= Stock+ Debtors+ Receivables+ Cash+

Other assets
Net Working Capital:
The difference between current assets and current liabilities of a business concern is termed
as the Net working capital.
Hence,

NET WORKING CAPITAL= Gross working capital- Creditors-

Payables-Other liabilities

Need for Working Capital:

Working capital plays a vital role in business. This capital remains blocked in raw materials,
work in progress, finished products and with customers.
The needs for working capital are as given below:
i. Adequate working capital is needed to maintain a regular supply of raw
materials, which in turn facilitates smoother running of production process.

ii. Working capital ensures the regular and timely payment of wages and salaries, thereby
improving the morale and efficiency of employees.
iii. Working capital is needed for the efficient use of fixed assets.
iv. In order to enhance goodwill a healthy level of working capital is needed. It is necessary
to build a good reputation and to make payments to creditors in time.

v. Working capital helps avoid the possibility of under-capitalization.

vi. It is needed to pick up stock of raw materials even during economic depression.

vii. Working capital is needed in order to pay fair rate of dividend and
interest in time, which increases the confidence of the investors in the
firm.

Importance of Working Capital:

It is said that working capital is the lifeblood of a business. Every business
needs funds in order to run its day-to-day activities.
The importance of working capital can be better understood by the
following:

i. It helps measure profitability of an enterprise. In its absence, there

would be neither production nor profit.
ii. Without adequate working capital an entity cannot meet its short-term liabilities in time.

iii. A firm having a healthy working capital position can get loans easily
from the market due to its high reputation or goodwill.
iv. Sufficient working capital helps maintain an uninterrupted flow of
production by supplying raw materials and payment of wages.

v. Sound working capital helps maintain optimum level of investment in

current assets.
vi. It enhances liquidity, solvency, credit worthiness and reputation of
enterprise.
vii. It provides necessary funds to meet unforeseen contingencies and thus
helps the enterprise run successfully during periods of crisis.
TYPES OF WORKING CAPITAL:

Types of working capital on the basis of concept

Generally, there are two concepts of working capital. They are gross
working capital and net working capital. But they are defined by different
names. They are explained below:
1) In broad sense: working capital refers to gross working capital. It is
also defined as financial concept or going concern concept. It means the
capital invested in the current assets of the firm. Current assets mean the
assets which can be converted into cash easily or within one accounting
period. It helps in determining the return on investment in working capital
and providing correct amount of working capital at right time.
2) In narrow sense: working capital refers to net working capital. It is
also defined as accounting concept. It means excess Of current assets over
current liabilities. It helps in finding out firm’s capability to meet short
Termliabilitiesaswellas indicates the Financial Soundnessof the
enterprise.

Net working capital = current assets – current liabilities

Net working capital can be positive or negative. When current assets are
more than the current liabilities than working capital is positive and when
current assets are less than the current liabilities than working capital is
negative.

Types of working capital on the basis of time:

1) Permanent working capital: It is also called fixed working
capital. It means to carry on the day to day expenses the firm is
required to maintain the minimum amount of working capital. For
example, the firm is required to maintain the minimum level of raw
material, finished goods or cash balance etc.
 Regular Working Capital: It is the permanent working
capital which is normally required in the normal course of
business for the working capital cycle to flow smoothly.
 Reserve Working Capital: It is the working capital
available over and above the regular working capital. It is kept for
contingencies which may arise due to unexpected situations.
2) Temporary / Variable WC: Temporary working capital is
easy to understand after getting hold over the permanent working
capital. In simple terms, it is the difference between net working
capital and permanent working capital. The main characteristic
which can be made out of the example is “fluctuation”. The
temporary working capital, therefore, cannot be forecasted. In the
interest of measurability, this can be further bifurcated as below
which can create at least some base to forecast.
 Seasonal Working Capital:Seasonal working capital is that
Temporary increase in working capital which is caused due to
some relevant season for the business. It is applicable to
Businesses having the impact of seasons, for example, the
manufacturer of sweaters for whom relevant season is the
winters. Normally, their working capital requirement would
increase in that season due to higher sales in that period and then
go down as the collection from debtors is more than sales.
 Special Working Capital: Special working capital is that
rise in the temporary working capital which occurs due to a
special event which otherwise normally does not take place. It has
no basis to forecast and has rare occurrence normally. For
example, a Special Working Capital: Special working capital is
that rise in the temporary working capital which occurs due to a
special event which otherwise normally does not take place. It has
no basis to forecast and has rare occurrence normally. For
example, a country where Olympic Games are held, all the
business requires extra working capital due to a sudden rise in
business activity.
Determinants of Working Capital
There are a number of factors affecting the working capital requirement. These factors have
different importance in different businesses and at different times. Some of the different
factors are mentioned here below: -

1) Nature of business: Nature of business is an important factor in

Determining the working capital requirements. There are some
businesses, which require a very nominal amount To be invested in
fixed assets, but a large chunk of the total Investment is in the form
of working capital. There businesses, for example, Are of the trading
and financing type. There are businesses, Which require large
investment In fixed assets and normal investment In the form of
working capital.
2) Size of business: It is another important Factor in determining
the Working capital requirements of a business. Size is usually
measured In terms of scale of operating cycle. The amount of
working capital needed is directly proportional To the scale of
operating cycle i.e. the larger the scale of Operating cycle the large
will be the amount working capital and vice versa.
3) Manufacturing Cycle: As is evident from the very word,
manufacturing cycle means the starting of the cycle with the
purchase of raw material and ends when finished products are
churned out. An extended manufacturing time span means larger tie
ups and hence more working capital. So, The shortest manufacturing
cycle should be chosen.
4) Business Fluctuations: Most business experience cyclical and
seasonal fluctuations in demand for their goods and services. These
fluctuations affect the business with respect to working capital
because during the time of boom, due to an increase in business
activity the amount of working capital requirement increases and the
reverse is true in the case of recession. Financial arrangement for
seasonal working capital requirements is to be made in advance.
5) Production Policy: As stated above, every business has to cope
with different types of fluctuations. Hence it is but obvious that
production policy has to be planned well in advance with respect to
fluctuation. No two companies can have similar production policy in
allrespectsbecauseitdepends upon the circumstances of an
individual company.
6) Firm’s Credit Policy: The credit policy of a firm affects
working capital by influencing the level of book debts. The credit
term is fairly constant in an industry but individuals also have their
role in framing their credit policy. A liberal credit policy will lead to
more amount being committed to working capital requirements
whereas a stern credit policy may decrease the amount of working
capital requirement appreciably but the repercussions of the two are
 not simple. Hence a firm should always frame a rational credit
policy based on the credit worthiness of the customer.

7) Availability of Credit: The terms on which a company is able

to manage its credit also affects the working capital requirement. If a
company in A position to get credit on liberal terms and in a short
span of time then it will be in a position to work with less amount of
working capital. Hence the amount of working capital needed will
depend upon the terms a firm is granted credit by its creditors.
8) Growth and Expansion activities: The working capital needs
of a firm increase as it grows in term of sale or fixed assets. There is
no precise way to determine the relation between the amount of sales
and Working capital requirement but one thing is sure that an
increase in sales never precedes the increase in working capital but it
is always The other way around. So, in case of growth or expansion,
the aspect of working capital needs to be planned in advance.
9) Price Level Changes: Generally, increase in price level makes
the commodities dearer. Hence with increase in price level the
working capital requirements also increases. The companies, which
are in a position to alter the price of these commodities in
accordance with the price level changes, will face fewer problems as
compared to others. The changes in price level may not affect all the
firms in same way. The reactions of all firms with regards to price
level changes will be different from one other.
WORKING CAPITAL FINANCING:
The two segments of working capital viz., regular or fixed or permanent
and variable are financed by the long-term and the short-term sources of
funds respectively. The main sources of long-term funds are shares,
debentures, term- loans, retained earnings etc.
The sources of short-term funds used for financing variable part of
working capital mainly include the following:
1. Loans from commercial banks
2. Public deposits
3. Trade credit
4. Factoring
5. Discounting bills of exchange
6. Bank overdraft and cash credit
7. Advances from customers

8. Accrual accounts
These are discussed in turn.

1. Loans from Commercial Banks:

Small-scale enterprises can raise loans from the commercial banks with or
without security. This method of financing does not require any legal
formality except that of creating a mortgage on the assets. Loan can be
paid in lump sum or in parts. The short-term loans can also be obtained
from banks on the personal security of the directors of a country.
Such loans are known as clean advances. Bank finance is made available
to small- scale enterprises at concessional rate of interest. Hence, it is
generally a cheaper source of financing working capital requirements of
enterprise. However, this method of raising funds for working capital is a
time-consuming process.

2. Public Deposits:
Often companies find it easy and convenient to raise short- term funds by
inviting shareholders, employees and the general public to deposit their
savings with the company. It is a simple method of raising funds from
public for which the company has only to advertise and inform the public
that it is authorized by the Companies Act 1956, to accept public deposits.
Ca
Public deposits n be invited by offering a higher rate of interest than the
O
interest allowed n bank deposits. However, the companies can raise funds
 O
through public deposits subject to a maximum of 25% f their paid up
capital and free reserves.
But, the small-scale enterprises are exempted from the restrictions of The
maximum limit of public deposits if they satisfy the following conditions:
The amount of deposit does not exceed Rs. 8 lakhs or the amount of Paid
up capital whichever is less.
(i) The paid-up capital does not exceed Rs. 12 lakhs.
(ii) The number of depositors is not more than 50%.
(iii) There is no invitation to the public for deposits.
The main merit of this source of raising funds is that it is simple as well as
cheaper. But, the biggest disadvantage associated with this source is that it
is not available to the entrepreneurs during depression and financial
stringency.

3. Trade Credit:
Just as the companies sell goods on credit, they also buy raw materials, components and other
goods on credit from their suppliers. Thus, outstanding amounts payable to the suppliers i.e.,
trade creditors for credit purchases are regarded as sources of finance. Generally, suppliers
grant credit to their clients for a period of 3 to 6 months.

Thus, they provide, in a way, short- term finance to the purchasing

company. As a matter of fact, availability of this type of finance largely
depends upon the volume of business. More the volume of business more
will be the availability of this type of finance and vice versa.
Yes, the volume of trade credit available also depends upon the reputation
of the buyer company, its financial position, degree of competition in the
market, etc. However, availing of trade credit involves loss of cash
discount which could be earned if payments were made within 7 to 10
days from the date of purchase of goods. This loss of cash discount is
regarded as implicit cost of trade credit.

4. Factoring:
Factoring is a financial service designed to help firms in managing their
book debts and receivables in a better manner. The book debts and
receivables are assigned to a bank called the 'factor' and cash is realized in
advance from the bank. For rendering these services, the fee or
commission charged is usually a percentage of the value of the book
debts/receivables factored.
This is a method of raising short-term capital and known as 'factoring'. On
the one hand, it helps the supplier companies to secure finance against
their book debts and receivables, and on the other, it also helps in saving the effort of
collecting the book debts.
The disadvantage of factoring is that customers who are really in genuine difficulty do not get
the opportunity of delaying payment which they might have otherwise got from the supplier
company.

5. Discounting Bills of Exchange:

When goods are sold on credit, bills of exchange are generally drawn for
acceptance by the buyers of goods. The bills are generally drawn for a
period of 3 to 6 months. In practice, the writer of the bill, instead of
holding the bill till the date of maturity, prefers to discount them with
commercial banks on payment of a charge known as discount.
The term 'discounting of bills' is used in case Of time bills whereas the
term, 'purchasing of bills' is used in respect of demand bills. The rate of
discount to be charged by the bank is prescribed by the Reserve Bank of
India (RBI) from time to time. It generally Amounts to the interest for the
period from the date of discounting to the date of maturity of bills.
If a bill is dishonored on maturity, the bank returns the dishonored bill to
the company who then becomes liable to pay the amount to the bank. The
cost of raising finance by this method is the amount of discount charged by
the bank. This method is widely used by companies for raising short-term
finance.

6. Bank Overdraft and Cash Credit:

Overdraft is a facility extended by the banks to their current account
holders for a short-period generally a week. A current account holder is
allowed to withdraw from its current deposit account up-to a certain limit
over the balance with the bank. The interest is charged only on the amount
actually overdrawn. The overdraft facility Is also granted against
securities.
Cash credit is an arrangement whereby the commercial banks allow
borrowing money up to a specified-limit known as 'cash credit limit.' The
cash credit facility is allowed against the security. The cash credit limit can
be revised from time to time according to the value of securities. The
money so drawn can be repaid as and when possible.
The interest is charged on the actual amount drawn during the period
rather on limit sanctioned. The rate of interest charged on both overdraft
and cash credit is relatively higher than the rate of interest given on bank
deposits. Arranging overdraft and cash credit with the commercial banks
has become a common method adopted by companies for meeting their
short- term financial, or say, working capital requirements.
7. Advances from Customers:
One way of raising funds for short-term requirement is to demand for
advance from one's own customers. Examples of advances from the
customers are advance paid at the time of booking a car, a telephone
connection, a flat, etc. This has become an increasingly popular source of
short-term finance among the small business enterprises mainly due to two
reasons.
First, the enterprises do not pay any interest on advances from their
customers. Second, if any company pays interest on advances, that too at a
nominal rate. Thus, advances from customers become one of the cheapest
sources of raising funds for meeting working capital requirements of
companies.
8. Accrual Accounts:
Generally, there is a certain amount of time gap between incomes is earned
and is actually received or expenditure becomes due and is actually paid.
Salaries, wages and taxes, for example, become due at the end of the
month but are usually paid in the first week of the next month. Thus, the
outstanding salaries and wages as expenses for a week help the enterprise
in meeting their working capital requirements. This source of raising funds
does not involve any cost.

OTHER SOURCES OF FINANCE ARE:

  Letter of credit
 Commercial Papers
 Bank Guarantee

Letter of credit: A letter of credit is a letter from a bank

guaranteeing that a buyer's payment to a seller will be received on time
and for the correct amount. In the event that the buyer is unable to make
payment on the purchase, the bank will be required to cover the full or
remaining amount of the purchase. Due to the nature of international
dealings, including factors such as distance, differing laws in each country,
and difficulty in knowing each party personally, the use of letters of credit
has become a very important aspect of international trade.

Commercial Papers: Commercial Paper or CP is defined as a

short-term, unsecured money market instrument, issued as a promissory
note by big corporations having excellent credit ratings. As the instrument
is not backed by collateral, only large firms with considerable financial
strength are authorized to issue the instrument.
 FEATURES OF COMMERCIAL PAPER:

1. The maturity period of commercial paper lies between 30 to 270 days.

2. It is sold at a discount but redeemed at its par value.
3. There is no well-developed secondary market for commercial paper; rather
they are placed with existing investors who intend to hold it till it gets
matured.

The primary purpose of issuing commercial paper is to raise short-term

funds so as to meet working capital requirements of the firm. However,
firms also raise money through CP’s to fill The gap between fund required
currently and long-term funds raised from the market.

Bank Guarantee:Bank Guarantee (BG) is an agreement between 3

parties viz. the bank, the beneficiary (party to whom the guarantee is
given) and the applicant (party who seeks the bank guarantee from the
bank). BGs are an important banking arrangement and play a vital role in
promoting international and domestic trade.BG is issued by the bank on
the receipt of the request from the “applicant” for the “guarantee amount”
towards some purpose / underlying transaction towards the “beneficiary”.
If the bank i.e. “the guarantor” receives the “claim” from the beneficiary, it
results in “BG invocation”. In the case of foreign BG, apart from these 3
parties, there is also a “correspondent bank”. If a bankdoes not have a
branch in some foreign country, it issues BG in that country through its
“correspondent bank”.Thebankdoesall the required due diligence,
financial and business analysis before issuing the guarantee.
CONSEQUENCES OF UNDER AND OVER ASSESSMENT OF
WORKING CAPITAL:

Consequences of underassessment of the working capital:

Each entrepreneur understands the necessity to make an accurate

assessment of the working capital requirements for their units. The
following are the consequences of underassessment of working capital:
a) Growth may be stunted. It may become difficult for the enterprise to undertake profitable
projects due to non-availability of working capital;
b) Implementation of operating plans may become difficult and consequently the profit
goals may not be achieved;
c) The cash crisis may emerge due to paucity of working funds;
d) The optimum capacity utilization of fixed assets may not be achieved
due to non-availability of the working capital;
e) The business may fail to honor its commitment in time, thereby
adversely affecting its credibility and this situation may lead to business
closure;
f) The business may be compelled to buy raw materials on credit and sell finished goods on
cash. During such process, it may end up with increasing cost of purchases and reducing
selling prices by offering many discounts. Both these situations would affect profitability
adversely.
g) Non-availability of stocks due to non-availability of funds may also result in production
slippage;
Consequences of over-assessment of working capital:
While underassessment of working capital has disastrous implications on
business, over- assessment of working capital also has its own dangers.
a) It may lead to offer too liberal credit terms to buyers and very poor
recovery system and cash management;
b) It may make management complacent leading to less efficient and they
do not perform task vigorously.
c) Over-investment in working capital makes the capital less productive
and may reduce return on investment.
Working capital is very essential for the success of a business and,
therefore, needs efficient management and control.
CALCULATION OF WORKING CAPITAL FOR J.K CEMENTS:
PARTICULARS As at 31-03- As at 31-03- As at 31-03-2015
2017(Rs. Lacs) 2016(Rs. Lacs) (Rs. Lacs)

Current assets:
Investments 6526.00 6150.00 3050.00
Inventories 49806.98 47424.31 50978.5
Trade receivables 14813.92 16569.39 13940.46
Cash and cash equivalents 41785.02 47586.88 40770.57
Short term loans & advances - 32483.03 28454.29
Bank balance other than above 99.20
Current financial assets 4521.82
Other current assets 17419.33 832.07 954.01

GROSS WORKING CAPITAL 134972.27 151045.68 138147.87

(A)
Less: Current Liabilities:
Short term borrowings 16577.24 19620.69 26335.28
Trade Payables 20517.96 28064.66 22925.76
Other financial liabilities 65996.85 - -
Other current liabilities 8335.82 64577.25 58920.35
Short term provisions 1601.60 4771.79 4766.56
Current tax liability(net) 156.65 - -

TOTAL (B) 113186.12 117034.39 112947.95

NET WORKING CAPITAL (A- 21786.15 34011.29 25199.92
B)
Source: Annual Report

TREND ANALYSIS OF WORKING CAPITAL IN JK CEMENTS:

PARTICULARS 31-03-2018 31-03-2017 31-03-2016
Gross working 134972.27 151045.68 138147.87
capital
Net working 21786.15 34011.29 25199.92
capital
Note: While doing interpretation year 2017 is not compared with
previous year and its interpretation is mentioned separately.

INTERPRETATION: The above data and graph clearly mention

that there is an increase in gross working capital and net working capital
by ₹128.98 crore and ₹88.11 crore respectively. In year 2017 the working
capital of the company is ₹21786.15.

 Here 128.98 crore as against gross working capital has been funded
by current liabilities up-to 40 crore and rest has been funded through
reserves and surplus of the company which is a good sign for the
organization.
 Further, there is a decrease in short term borrowings which also
indicates sound liquidity of the company.
 Investments has been increased and inventories are reduced to an
extent of ₹35.54 crore which is beneficial for the company. It is done
on account of increase in sales or efficient inventory holding system
which helps in reduction of inventory carrying cost.
 Short term loans and advances is increased by ₹40.28 crore which is
not good for company hence, company should reduce its higher side
which include MAT credit entitlement and balance with custom and
excise departments.
 Hence, increase in the amount of working capital is a good sign for
the company and its shows the sound position of the company as
company is able to meet out it expenses easily.
 In year 2017 the net working capital is ₹21786.15 which if analyzed
is lowered down as per layman’s analysis but the reason behind this
figure is because of the various amendments made while preparing
financial statements, if the figures of year 2016 and 2015 is amended
accordingly then it shows the increasing trend.
Dimensions of Working Capital of J.K. Cement:
Working Capital management refers to the administration of all aspect of
current assets and current liabilities. The management must determine
levels and composition of current assets. It is necessary to manage
Wa
working capital in the best possible y to get maximum benefit.
Management of current assets gives a right dimension of working capital.

PARTICULARS 31-03-2016 % TOTAL % CURRENT

ASSETS ASSETS

Current assets:
Investments 6150.00 1.08% 4.07%
Inventories 47424.31 8.35% 31.39%
Trade receivables 16569.39 2.91% 10.96%
Cash and cash equivalents 47586.88 8.37% 31.50%
Short term loans & 32483.03 5.71% 21.50%
advances 832.07 0.14% 0.55%
Other current assets

INTERPRETATION:
As per the above chart besides cash and well as
inventories forms the major part of current as portrays that total assets. This the working
inventories and cash majorly affect company. capital of the
 CALCULATION OF CORRELATION COEFFICIENT
BETWEEN SALES AND WORKING CAPITAL:
YEAR X Y X2 Y2 XY

2016 333731.88 25199.92 111376967728.33 635035968.006 8410016677.45

2017 353103.60 34011.29 124682152332.96 1156767847.46 12009508939.64

2018 432784.00 21786.15 187301990656 474636331.822 9428697141.6

TOTAL 1119619.48 80997.36 423361110717 2266440147.3 29848222759

Where X – Sales, Y – Working Capital, N = Number of Values

Working Capital = Current Asset – Current Liabilities
N =3
∑X = 1119619.48
∑Y = 80997.36
∑X2 = 423361110717
∑Y2 =2266440147.3
∑XY =29848222759
Formula
r= N∑XY – (∑X) (∑Y)

√ [NΣX2 - (ΣX) 2] [NΣY2 - (ΣY) 2]

= 3* 29848222759- (1119619.48*80997.36)
√ [3* 423361110717-(1119619.48)2] [3*2266440147.3-(80997.36)2]
= +0.11759
INTERPRETATION: As per the above calculation it can be interpreted that there is
positiverelationship between sales and working capital of the company.
WORKING CAPITAL CYCLE:
Operating Cycle:
Working capital is also called a circulating capital or revolving capital.
That is the money/capital which circulates in various forms of current
assets in a continued manner. For example, at a point of time, funds may
be tied up in raw materials, then later converted into semi-finished
products, then into finished/final products and when these finished
products are sold, it is converted either into account receivables or cash.
This cash is reinvested in current assets. Thus, the amount always keeps on
circulating or revolving from cash to current assets and back again to cash.
That is why some people prefer to use the term liquidity management
instead of working capital management. Although this circulation takes
place at short intervals, the money is required again and again.
The American Institute of Certified Public Accountants defined the
operating cycle as: “the average time intervening between the
acquisition of material or services entering the process and the final
cash realization.”
According to I. M. Pandey, “Operating cycle is the time duration
involved in the acquisition of resources, conversion of raw materials
into work- in-process into finished goods, conversion of finished goods
into sales and collection of sales.”

Working Capital Cycle:

Working Capital cycle (WCC) refers to the time taken by an organization

to convert its net current assets and current liabilities into cash. It reflects
the ability and efficiency of the organization to manage its short-term
liquidity position.
In other words, the working capital cycle (calculated in days) is the time
duration between buying goods to manufacture products and generation of
cash revenue on selling the products. The shorter the working capital
cycle, the faster the company is able to free up its cash stuck in working
capital. If the working capital cycle is too long, then the capital gets locked
in the operational cycle without earning any returns. Therefore, a business
tries to shorten the working capital cycles to improve the short-term
liquidity condition and increase their business efficiency.
Every company would like to keep its working capital cycle as short as
possible. A shorter working capital cycle can be achieved by focusing on
individual aspects of the working capital cycle. Let us see how this works:
The company can aim to shorten its working capital cycle by:

 Reducing the credit period given to its customers and thereby

reducing the average collection period. Giving cash discount can
also help improve the debtor’s turnover ratio or average collection
period amid various other ways.
 Reducing the credit period given to its customers and thereby
reducing the average collection period. Giving cash discount can
also help improve the debtor’s turnover ratio or average collection
period amid various other ways.
 The company can try to improve/streamline its process of
manufacturing and focus on various ways to increase sales to reduce
the time taken for inventory to convert to sales. The earlier the stock
clearance better is the working capital cycle.
 A better negotiation to increase the credit period from suppliers of
raw material and goods required for production can also aid
reduction in the working capital cycle.
While the average collection period and credit period from supplier’s aid
in shortening the working capital cycle, the initial prime focus of the
business should be to reduce the time taken for inventory to convert to
sales. If the time taken is very long it could imply that the business is not
able to generate sales for the goods produced and more and more capital
gets locked in inventory. Either the business should try and reduce the time
or should reduce the amount of inventory thereby reducing the amount
locked in working capital. In other words, if the business is not able to
reduce its working capital cycle and has higher inventory levels, it should
aim at reducing inventory levels and reduce the amount locked in the
working capital keeping the cycle time length same.

Measurement of Operating Cycle:

Strictly speaking, the volume of working capital depends upon the length
of working capital cycle. So, it is important to measure working capital
cycle for management of working capital. The financial statements i.e.,
Profit and Loss Account and Balance Sheet, can guide us to measure working capital cycle.

The procedure can be summarized:

1. Raw Material Storage Period:

It represents the average period during which raw materials are kept in stores.

It is calculated as:

If consumption of raw material is not available, average daily purchase can

also be taken.

2. Processing Period:
Once materials are issued to production, it again involves time gap
between issue of materials and production of finished product. This time
gap is called processing period.
It is calculated as:

Factory cost of production during the year = Raw materials consumed +

Direct wages + Other direct expenses + Manufacturing overhead+
Opening WIP – Closing WIP.
3. Finished Goods Storage Period:
Manufacturing enterprises produce the output in the expectation of future
demand. Till the demand for finished product materializes, the product
would remain in the store. This period is termed as finished goods storage
period.
This is calculated as:

Cost of goods sold = Opening stock of finished goods + Factory cost of production – Closing
stock of finished goods.

4. Credit period Allowed to Debtors:

The business enterprises—due to competitive and other reasons—extend credit facilities to
customers. The time gap between sale and realization of cash is known as credit or collective
period from debtors.
It is computed as:

5. Credit Period Received from Suppliers:

The business enterprises receive credit in the purchase of raw materials from suppliers. It
refers to the average time taken for payment to suppliers from the date of purchase.

It is computed as:
COMPUTATION OF OPERATING CYCLE OF J.K. CEMENT:
PARTICULARS CALCULATION NO. OF DAYS

Raw material conversion [{(5785+5465)/2}/ 175598.34] * 360 12 days

period
Work-in-progress [{(9027+6978)/2}/ 175598.34] * 360 16 days
conversion period
Finished goods conversion [{(6648+7862)/2}/ 307944] * 360 8 days
period
Debtor collection period [{(13940+16570)/2}/ 343417.74] * 360 16 days

GROSS OPERATING 52 days

CYCLE
Less: Creditors deferral [{(22925+28065)/2}/ 300108] * 360 30 days
period
NET OPERATING CYCLE 22 days

NOTE: In above calculation total sales is considered while calculating average sales per day.

OPERATING CYCLE = 360/22= 17 Times.

INTERPRETATION: The above tables shows that the company is
able to realize its inventories in cash and recovers cash from trade
receivables in 22 days which shows a positive sign for the company. The
operating cycle moves 17 times in a year which means the whole operation
of producing of goods and realizing cash out by selling them and
recovering from debtors can be carried out for 17 times in a year. It is a
good sign for company as it shows that company operation is in
movement. They can be enhanced.
WORKING CAPITAL MANAGEMENT:
Working capital management is the way a company manages the
relationship between assets and liabilities in the short term. Simply put,
working capital management is how a company manages its money for
day to day operations as well as any immediate debt obligations. When
managing working capital, the company has to manage accounts
receivable, accounts payable, inventory, and cash. The goal of working
capital management is to have adequate cash flow for continued operations
and have the most productive usage of resources.

Components associated with WCM:

Often the interrelationships among the working capital components create
real challenges for the financial managers. Inventory is purchased from
suppliers, sale of which generates accounts receivable and collected in
cash from customers to pay off those suppliers. Working capital has to be
managed because the firm cannot always control how quickly the
customers will buy, and once they have made purchases, exactly when
they will pay. Thatis why; controlling the “cash-to-cash” cycle is
paramount.
The different components of working capital management of any
organization are:
• Cash and Cash equivalents
• Inventory
• Debtors / accounts receivables
• Creditors / accounts payable

A) Cash and Cash equivalents:

One of the most important working capital components to be managed by
all organizations is cash and cash equivalents. Cash management helps in
determining the optimal size of the firm’s liquid asset balance. It indicates
the appropriate types and amounts of short-term investments along with
efficient ways of controlling collection and pay-out of cash. Good cash
management implies the co-relation between maintaining adequate
liquidity with minimum cash in bank. All companies strongly emphasize
on cash management as it is the key to maintain the firm’s credit rating,
minimize interest cost and avoid insolvency.
B) Management of inventories:
Inventories include raw material, WIP (work in progress) and finished
goods. Where excessive stocks can place a heavy burden on the cash
resources of a business, insufficient stocks can result in reduced sales,
delays for customers etc. Inventory management involves the control of
assets that are produced to be sold in the normal course of business.

For better stock/inventory control:

o Regularly review the effectiveness of existing purchase and inventory
systems
o Keep a track of stocks for all major items of inventory
o Slow moving stock needs to be disposed as it becomes difficult to sell if
kept for long
o Outsourcing should also be a part of the strategy where part of the
production can be done through another manufacturer
o A close check needs to be kept on the security procedures as well

C) Management of receivables:
Receivables contribute to a significant portion of the current assets. For
investments into receivables there are certain costs (opportunity cost and
time value) that any company has to bear, along with the risk of bad debts
associated to it. It is, therefore necessary to have a proper control and
management of receivables which helps in taking sound investment
decisions in debtors. Thereby, for effective receivables management one
needs to have control of the credits and make sure clear credit practices are
a part of the company policy, which is adopted by all others associated
with the organization. One has to be vigilant enough when accepting new
accounts, especially larger ones. Thereby, the principle lies in establishing
appropriate credit limits for every customer and stick to them.

Effectively managing accounts receivables:

o Process and maintain records efficiently by regularly coordinating and
communicating with credit managers’ and treasury in-charges
o Prepare performance measurement reports
o Control accuracy and security of accounts receivable records.

o Captive finance subsidiary can be used to centralize accounts receivablefunctions and

provide financing for company’s sales
D) Management of accounts payable:
Creditors are a vital part of effective cash management and have to be
managed carefully to enhance the cash position of the business. One has to
keep in mind that purchasing initiates cash outflows and an undefined
purchasing function can create liquidity problems for the company. The
trade credit terms are to be defined by companies as they vary across
industries and also among companies.
DATA ANALYSIS
AND
INTERPRETATION
WORKING CAPITAL MANAGEMENT
 INVENTORY MANAGEMENT:
Inventories are the stock of the product made for sale by the company or
semi-finished goods or raw materials. Inventory of finished goods, which
are ready for sale, is required to maintain smooth marketing operation. The
inventory of raw material and work in progress is required in order to
maintain an unobstructed flow of material in the production line. These
inventories serve as a link between the production and consumption of
goods.
The aspect of management of inventory is especially important in respect
to the fact that in country like India, the capital block in terms of inventory
is about 70% of the current assets. It is therefore, absolutely imperative to
manage efficiently and effectively in order to avoid unnecessary
investment in them. Although to maintain low inventories may prove to be
profitable but to maintain very low inventories may prove risky on the
contrary.
Basically, there are three main reasons for which inventories are stocked
and they are: -
1. Transaction Motive: This motive lays emphasis on maintaining ofinventories in order to
maintain a smooth and unobstructed supply of materials for the sales and production
operations.
2. Precautionary Motive: This motive emphasizes on the stocking goods
in order to guard against the uncertainties of future i.e. unpredictable changes in the
forces of demand, supply and other forces.
3. Speculative Motive: This motive influences the decisions regarding the
increase or decrease of in the level of inventory in order to take advantage
price fluctuations.
A company should maintain adequate stock of materials for continues
supply to the factory for an uninterrupted production. It is not possible for
a company to procure raw material instantaneously whenever needed. A
time lag exists between demand and supply of material. Also, there exists
an uncertainty in procuring raw material in time at many occasions. The
procurement of materials may be delayed because of factors beyond
company’s control e.g. transport disruption, strike etc. Therefore, the firm
should keep a sufficient stock of raw material at a time to have streamline
production. Other factors which may incite us to keep stock of inventories
is the quantity discounts, expected rise is price.
The work in process inventory builds up because of the production cycle. Production cycle is
the time span between the introduction of raw material in to the production and the
emergence of finished goods at the completion
of production cycle. Till the production cycle completes, the stock of work
in process has to be maintained. Efficient firms constantly try to make the
production cycle smaller by improving their production techniques.
The stock of finished goods has to be held because production and sales
are not instantaneous. A firm cannot produce immediately when goods are
demanded by customers. Therefore, to supply finished goods on regular
basis, their stock has to maintain for sudden demand of customers. in case
the firm sales are seasonal in nature, substantial finished goods inventory
should be kept to meet the peak demand. Failure to supply products to
customer, when demanded, would mean loss of the firm’s sales to the
competitors.
A sufficiently large inventory has to be maintained of finished goods so as
to meet the fluctuating demands. If a close link is maintained between the
sales and the production department then an organization can do with a
small inventory also. In the process inventory is also necessary because
production cannot be instantaneous. But it should be seen that the size of
production cycle should be small.

8.1 Objectives of Inventory Management

In the modern business world, there is practically nothing that is done
without objective. The objective is also one that would help the
organization in reaching its goals in a better way. Hence it can be inferred
that the importance given to management of inventory in the business
world is not devoid of a concrete reason behind it.
The two main reasons behind all this are, firstly, to maintain an inventory
big enough that the production and sales operation are carried on without
any hindrance and secondly, to minimize the investment in inventory, in
order to maximize the profits. Both, excessive as well as inadequate
inventory level is not good. They are the two danger points that a company
should try to avoid and should always try to maintain optimum level of
inventory. The excessive investment in the inventory has the following
drawbacks:
▪
Unnecessary ties up of firm’s fund and loss of profit.
▪
Excessive carrying cost.

▪
The risk of liquidity.

The over investment of funds in inventory eat up the precious funds which
could have been put to some profitable use. The carrying cost incurred,
cannot be ignored, this is the cost of storage, handling insurance, recording
and inspecting. These all costs incurred in order to have large inventories
impair the profitability of the firm. Another danger of carrying excessive
inventory is the deterioration, obsolescence and pilferage of raw materials.
Maintaining inadequate inventory is also dangerous. The consequences of under investment
in inventory are:
▪
Production holds ups;
▪
Failure to meet commitment

If the inventory of finished goods is not adequate than the demand of

customer is peak periods may not be left unmet and it the under investment
is in the area of raw materials that is likely that the production process may
be held up frequently.
The aim of inventory management thus should be to avoid excessive and
inadequate level of inventory and to maintain sufficient inventory for
smooth production and sales operation. Efforts should be made to place an
order at the right time to right source to acquire right amount at the right
priceandfor rightquantity.The aspects of an effective inventory
management should take care of areas:

 Ensure continuous supply of material to facilitate uninterrupted

production.
 To maintain sufficient stocks of raw material in the periods of short
supply and evident price rise.
 To maintain sufficient inventory of finished goods for smooth sales
operation.
 Minimize carrying cost and time.

 Control investment and keep it to the optimum level.

PARTICULARS 31-03-2017(Rs. Lacs) 31-03-2016(Rs. Lacs)

Current assets:
Investments 6526.00 6150.00
Inventories 49806.98 47424.31
Trade receivables 14813.42 16569.39
Cash and cash equivalents 41785.02 47586.88
Bank balance other than above 99.20 -
Short term loans & advances - 32483.03
Current financial assets 4521.82 -
Other current assets 17419.33 832.07
INTERPRETATION:The above pie charts shows that inventoriesforms the major part
of the current assets other than cash in both of the financial year that is 37% and 31% in year
2017 and 2016 respectively.

Techniques of Inventory Control:

There are many techniques to inventory. Control over inventory is very important for
company because it is involved loss of money. Some techniques are:

1.Economic Order Quantity:

It is the inventory level which minimizes the total of ordering and carrying
cost. Determining economic order quantity involves two types of costs i.e.
ordering cost and carrying cost. Here we find the economic order quantity
with the help of the formula:
 EOQ = (2AO/C) ^1/2

Where, A -Total Annual Requirement

O - per order cost

C - per unit carrying cost

2.ABC Analysis:
ABC analysis is a technique of selective control of inventory by
classifying all items of stores into three categories namely-

 Category A- A few items accounting for substantial usage in term of total monetary
value (10% of items covering 75% value).
 Category B- In between Items A and C (20% items representing 15% value).

 Category C- Large number of items of small value (70% items covering 10% value).

3.Just-In-Time Purchasing
In this technique company are reducing stock levels to a minimum by
creating closer relationship with suppliers and arranging more frequent
deliveries of small quantities. The objective of just-in-time purchasing is to
purchase goods so that delivery immediately precedes their use.

4.VED Analysis
Vital, Essential and Desirable (VED) analysis is done mainly for control of
spare parts keeping in view the criticality to production. Vital spare are
spares the stock-out of which even for a short time will stop production for
quite some time. The stock-out cost of vital items is very high. Essential
spare is spare the absence of which cannot be tolerated for more than a few
hours a day and cost of lost production is high. Desirable spares are those
which are needed but their absence for even a week or so will not lead to
stoppage of production.

5.FSN Analysis:

In this technique items are classified according to Fast-moving (F), Slow-

moving (S), and Non-moving (N) on basis rate of consumption. The non-
moving items are items not consumed for a long period say 24 months.
The classifications of fast and slow-moving items are determined on the
basis of storage turnover and it helps in proper arrangement of stocks in
stores and distribution and handling methods.
ANALYSING THE COMPOSITION OF INVENTORIES:
INVENTORIES (Valued at lower or/and cost or net As on 31-03-2107(Rs. Lacs)
realisable value.

Raw Materials 7206.33

Work-in-progress 7395.02

Finished goods 7776.74

Stock-in-trade 16.45

Consumable stores and spares 26074.18

GOODS IN TRANSIT:
Raw materials -
Consumable stores and spares 1338.26

TOTAL 49806.98

TABLE1.SHOWINGINVENTORIES COMPOSITIONFORYEAR
2017

FIG. SHOWING COMPOSITION OF INVENTORIES FOR YEAR 2017.

 INVENTORIES 31-03-2018 31-03-2017
Raw Materials 5464.66 5785.23

Work-in-progress 6978.10 9027.74

Finished goods 7861.02 6648.71

Stock-in-trade 23.43 14.95

Stores, spare parts 25890.56 29254.48

Less: Provision for 38.91 25851.65 38.91 29215.57

diminution in the value of
stores, spare parts etc.
Goods- in -transit
Raw materials 15.13 1.20
Stores, spare parts etc. 1230.32 285.14
TOTAL 47424.31 50978.54
TABLE 2. SHOWING INVENTORIES COMPOSITION FOR YEAR 2016 AND
2015.

INTERPRETATION: As per the data mentioned following pointshave been noticed:

  As per fig 1. The inventory composition in year 2017 shows a higher

portion of consumable stores and spares. As per layman’s view

inventories are enhanced by ₹2382.67 from the previous year but again due to
amended balance sheet there is certain changes in the
 value. But increase in inventory is not a positive sign as more funds
are blocked in stores only.
 Now as per fig 2. Firstly, it can be easily interpreted that inventory
is reduced to an extent of ₹35.54 crore on account of increase in
sales or efficient inventory holding system which causes reduction in
inventory carrying cost.
 Secondly, the graph above shows that stores and spares forms the
major part of inventories. They are almost 55% of the total
inventories in year 2016. They should be reduced as it is not
beneficial for company to block large amount of funds in stores and
spares. Although, they have been reduced up to ₹33.63 crore from
year 2015 to 2016 but still there is a scope to reduce them by central
processing system in purchasing department.
  CASH MANAGEMENT:
Cash is the important current asset for the operations of the business. Cash
is the basic input needed to keep the business running on a continuous
basis It is also the ultimate output expected to be realized by selling the
service or product manufactured by the firm. The firm should keep
sufficient cash, neither more nor less. Cash shortage will disrupt the firm’s
operations while excessive cash will simply remain idle, without
contributing anything towards the firm’s profitability. Thus, a major
function of the Financial Manager is to maintain a sound cash position.
Cash is the money, which a firm can disburse immediately without any
restriction. The term cash includes currency and cheques held by the firm
and balances in its bank accounts. Sometimes near cash items, such as
marketable securities or bank time deposits are also included in cash. The
basic characteristics of near cash assets are that they can readily be
converted into cash. Cash management is concerned with managing of:
I. Cash flows in and out of the
firm II. Cash flows within the firm.
III. Cash balances held by the firm at a point of time by financing deficit
or inverting surplus cash.

Functions of Cash Management

Cash Management functions are intimately, interrelated and intervened.
Linkage Amongdifferent Cash Management functions has ledto the
adoption of the following methods for efficient Cash Management:

 Use of techniques of cash mobilization to reduce operating equipment’s

of cash.

 Major efforts to increase the precision and reliability of cash

forecasting.

 Maximum effort to define and quantify the liquidity reserve needs of

the firm.

 Development of explicit alternative sources of liquidity

 Aggressive search for relatively more productive uses for surplus money assets.

Motives for holding cash

There are four primary motives for maintaining cash balances:
➢
Transaction motive
The transaction motive refers to the holding of cash to meet anticipated obligations whose
timing is not perfectly synchronized with cash receipts.
If the receipts of cash and its disbursements could exactly coincide in the
normal course of operations, a firm would not need cash for transaction
purposes. Although a major part of transaction balances is held in cash, a
part may also be in such marketable securities whose maturity conforms to
the timing of the anticipated payments.
➢
Precautionary motive
Precautionary motive of holding cash implies the need to hold cash to
meet unpredictable obligations and the cash balance held in reserve for
such random and unforeseen fluctuations in cash flows are called as
precautionary balances. Thus, precautionary cash balance serves to
provide a cushion to meet unexpected contingencies. The unexpected cash
needs at short notice may be the result of various reasons as: unexpected
slowdown in collection of accounts receivable, cancellations of some
purchase orders, sharp increase in cost of raw materials etc. The more
unpredictable the cash flows, the larger the need for such balances.
Another factor, which has a bearing on the level of precautionary balances,
is the availability of short-term credit. Precautionary cash balances are
usually held in the form of marketable securities so that they earn a return.
➢
Speculative motive
It refers to the desire of a firm to take advantage of opportunities which
present themselves at unexpected movements and which are typically
outside the Courseofbusiness.Thespeculative motive represents a
positive and aggressive approach. Firms aim to exploit profitable
opportunities and keep cash in reserve to do so. The speculative motive
helps to take advantage of: In opportunity to purchase raw materials at a
reduced price on payment of immediate cash; a chance to speculate on
interest rate movements by buying Securitieswhen interest rates are
expected to decline; delay purchases of raw materials on the anticipation
of decline in prices; etc.
➢
Compensation motive
Yet another motive to hold cash balances is to compensate banks for
providing certain services and loans. Banks provide a variety of services to
business firms, such as clearances of cheques, supply of credit
information, transfer of funds, etc. While for some of the services banks
charge a commission of fee for others they seek indirect compensation.
Usually clients are required to maintain a minimum balance of cash at the
bank. Since this balance cannot be utilized by the firms for transaction
purposes, the bank themselves can use the amount for services rendered.
To be compensated for their services indirectly in this form, they require
the clients to always keep a bank balance sufficient to earn a return equal
to the cost of services. Such balances are compensating balances.
Compensating balances are also required by some loan agreements
between a bank and its customer.
TREND ANALYSIS OF CASH IN J.K CEMENT:
CASH & CASH EQUIVALENTS 31-03-2017

Balance with banks: 3173.20

 In current accounts
 In fixed assets
➢
Up to 3 months 8288.98
➢
More than 3 months & up to 1 year 30421.23
Less: Overdraft against fixed deposits 151.93 38558.28

Cash on hand 28.31

Cheques in hand 25.23

TOTAL 41785.02

TABLE 1. SHOWING CASH & CASH EQUIVALENTS FOR YEAR 2017

CASH & CASH EQUIVALENTS 31-03-2016 31-03-2015

Balances with Banks in: 4141.79 7207.06
- Current Accounts
- Unclaimed Dividend 109.74 114.62
- Fixed Deposits 43305.34 33417.29

Cheques and Drafts on hand 2.74 3.57

Cash on hand 27.27 28.03

TOTAL 47586.88 40770.57

TABLE 2. SHOWING CASH & CASH EQUIVALENTS FOR YEAR 2016 & 2015
Fig. 1 Showing Cash & cash equivalents in year 2017

Fig. 2 Showing Cash & cash equivalents for year 2016 & 2017.
INTERPRETATION: As per the above the charts following points
are notices:

 Fig.1 shows the composition of cash and cash equivalents for the
year 2017 in which cash in fixed deposits forms the major portion of
cash.
 Fig.2 shows that in cash and cash equivalents the major investment
is in Fixed Deposits and they have been increased by ₹98.88crore
from year 2015 to 2016 which is beneficial for the organization as it
provides huge opportunities to the company.

Cash Ratio: Cash ratio is the ratio of cash and cash equivalents of a
company to its current liabilities. It is an extreme liquidity ratio since only
cash and cash equivalents are compared with the current liabilities. It
measures the ability of a business to repay its current liabilities by only
using its cash and cash equivalents and nothing else.
Formula:

Cash ratio is calculated using the following formula:

Cash Ratio = Cash + Cash Equivalents

Current Liabilities
Cash equivalents are assets which can be converted into cash quickly
whereas current liabilities are those liabilities which are to be settled
within 12 months or the business cycle.

Calculation of cash ratio of J.K. Cement:

YEAR CASH RATIO

31-03-2017 0.37

31-03-2016 0.40

31-03-2015 0.36
INTERPRETATION:
 The above graph shows the cash ratio Of the company which shows
an increase in ratio from 0.36 to 0.40 In year 2016. A cash ratio of
1.00 and above means that the business will be able to pay all its
current liabilities in immediate Short term. Therefore, creditors
usually prefer high cash ratio. But businesses usually do not plan to
keep their cash and cash equivalent At level with their current
liabilities because they can use a portion of idle cash to generate
profits. This means that a normal value of cash ratio is somewhere
below 1.00. Hence it can be concluded that company has a scope to
increase its cash ratio to pay off its liabilities but not on the grounds
of putting funds idle.
 The above graph also shows the figure Of 2017 in which ratio lowers
down to 0.37 from 0.40 in previous Year and it is negative outcome
from company’s perspective.
  RECEIVABLE MANAGEMENT:
Trade credit, the tool that as a bridge for movement of goods through
production and distribution stages to customer, is a force in the present-
day business and an essential device. Trade credit is granted with a motive
of protecting the sale from ones, competitors and attaching more of the
potential customers. Trade credit is said to be extended to a customer when
a firm sell its services or goods and does not receive the payment for them
immediately. Thus, trade credit creates receivable which refer to the
amount, which a firm is expected to collect in near future.
The book debt or receivable which arise a result of trade credit have the following features:

 It involves an element of risk and hence should never to be fiddled

with. As credit sale leave a sum to be recovered in future and future can
never predicted with certainty, hence it is risky.

 It is based on economic value, while for the buyer, the economic value
in goods passes immediately at the time of purchase, while the seller
expects an equivalent value to be received later on.

 It represents futurity. The cash payments for the goods or services

received by the buyer will be made in future.

Need of Management of Receivable:

As all other aspects of management, this also aims at the maximization of
wealth by a beneficial trade- off between liquidity risk and profitability.
The main aim of management is not to maximize sales or minimize bad
debt risk but in a way, it is to expand sale to the extent that the bad debt
risk remained within the limits. So, in an effort to maximize the wealth,
the goals of management of receivable are:

  To obtain optimum values of sales.

  To control the cost of credit and keep it to the minimum level.
 To maintain investment in debtors at optimum level.
TREND ANALYSIS OF TRADE RECEIVABLES OF J.K CEMENT:

TRADE RECEIVABLES 31-03-2017

Secured:
Considered good 6224.79
Unsecured:
Considered good 8588.63
Considered doubtful 739.12
Less: Provision for doubtful balances 739.12
TOTAL 14813.42
TABLE 1. COMPOSITION OF TRADRE RECEIVABLES FOR THE
YEAR 2017

TRADE RECEIVABLE 31-03-2016 (Rs. Lacs) 31-03-2015 (Rs. Lacs)

Trade Receivable over six months

- Considered Good
Secured 120.68 81.33
Unsecured 385.12 253.35
- Considered doubtful 602.00 566.22
Less: Provision for Doubtful Debts 602.00 566.22

Sub Total 505.80 334.68

Other Trade Receivable
- Considered Good
Secured 3281.27 3097.37
Unsecured 12782.32 10508.41
Considered doubtful - -

Sub Total 16063.59 13605.78

TOTAL 16569.39 13940.46

TABLE 2. SHOWING TREND OF TRADE RECEIVABLES FOR YEARS 2016 &

2015
 Fig. 1 Showing trade receivables for year 2017

Fig. 2 Bar chart showing trade receivables for year 2016 & 2015

Debtor’s Turnover Ratio:

Accounts receivable turnover is an efficiency ratio or activity ratio that
measures how many times a business can turn its accounts receivable into
cash during a period. In other words, the accounts receivable turnover ratio
measures how many times a business can collect its average accounts
receivable during the year.
 Debtor’s Collection Period:
Debtors collection period, is the average amount of days it takes, for the
business to receive the money it is owed from its customers. The sooner
debtors pay the business the better, so a short debtor’s collection period is
good. If debtors pay quickly, it helps cashflow and reduces the risk of
customers not paying the money they owe. The calculation for debtor’s
collection period is as follows:

Accounts Receivable Collection Period

Accounts Receivable Turnover Ratio= Average debtors *365
Net Credit sales

❖
TREND ANALYSIS OF RECEIVABLE MANAGEMENT:
YEAR DEBTORS TURNOVER DEBTORS
RATIO COLLECTION
PERIOD
31-03-2016 23.14 16 DAYS

31-03-2015 26.58 15 DAYS

*NOTE: The days considered for calculation is 360.

Fig. 3 graph representing debtor’s collection period and turnover ratio

INTERPRETATION: The following interpretation can be drawn
from the above-mentioned data and graph:
 As per fig.1 unsecured trade receivables in year 2017 forms the
major part of trade receivables which should be reduced as they
portray the negative image of the company and funds cannot be
realized on time.
 As per fig.2 trade receivables over six months are increasing by 51%(approx.) from
year 2015 which is not a good sign from company’s point of view as it increases the
risk of bad debts which reduces the profitability of the organization.

 As per fig.3 debtor’s turnover ratio decreases slightly from previous

of year by 3.44 times which should not happen. Debtor’s turnover
ratio should be increased as more ratio means company is able is to
convert debtor’s more quickly in cash.
 Debtor’s collection is period is almost same for both the year’s i.e.
15 days but there is a scope to reduce the collection period of
debtors as reduction in collection period means company is capable
enough to collect amount from debtors quickly And hence risk of
bad debts or default reduces.
  PAYABLES MANAGEMENT:
Account Payables Management refers to the set of policies, procedures,
and practices employed by a company with respect to managing its trade
credit purchases.
In summary, they consist of seeking trade credit lines, acquiring favorable
terms of purchase, and managing the flow and timing of purchases so as to
efficiently control the company’s working capital.
The account payables of a company can be found in the short-term
liabilities section of its balance sheet, and they mostly consist of the short-
term financings of inventory purchases, accrued expenses, and other
critical short-term operations.

EVALUATING THE PERFORMANCE OF PAYABLES MANAGEMENT

Accounts payable are one of 3 main components of working capital, along
with receivables and inventory.
Understanding how these 3 accounts Interact among each other and the
resulting effects on working capital levels, cash flow, and the operating
cycle can help in managing and evaluating payables management.
An appropriate balance must be struck, whereby the advantage of
deferring cash outlays using trade credit is weighted against the risk of
excessive short-term credit.
It is therefore important to maintain optimal utilization of credit lines and
timing of payments, and create a balance between the need for cash,
working capital, and liquidity.
A number of metrics and short-term financial ratios can be used to
evaluate the performance payables management.
Trade Payables 31-03-2017 31-03-2016 31-03-2015
(Rs. Lacs) (Rs. Lacs) (Rs. Lacs)
Micro, Small & 403.57 940.77 681.21
Medium
Enterprises

Other 20114.39 25318.60 26259.37 19384.98 20066.19

Acceptance - 1805.29 2859.57

TOTAL 20517.96 28064.66 22925.76

INTERPRETATION: As per the above bar chart trade payables are maximum in year
2o6from other sources. In 2017 creditors reduced as compared previous year.

PAYABLES TURNOVER RATIO:

The accounts payable turnover ratio is a liquidity ratio that shows a
company's ability to pay off its accounts payable by comparing net credit
purchases to the average accounts payable during a period. In other words,
the accounts payable turnover ratio is how many times a company can pay
off its average accounts payable balance during the course of a year.
Formula: The accounts payable turnover formula is calculated by dividing
the total purchases by the average accounts payable for the year.
 Management can use this ratio to measure the average number of times a
company pays its suppliers in a particular period. A higher number than
the industry average indicates the company pays its suppliers at a faster
rate than its competitors, and is generally conducive to short-term
liquidity.
Days in Payables Outstanding (DPO):
Measuring the average length of time, it takes a company to pay for its
short-term purchases in a period, the DPO can be used by management to
determine an optimal timing of payments for its payables.

Accounts Payable Deferral Period

Accounts Payable Deferral Period= Average trade creditors* 365
Net credit purchases

❖
TREND ANALYSIS OF PAYABLES MANAGEMENT:

YEAR CREDITORS TURNOVER CREDITORS DEFERAL

RATIO PERIOD
31-03-2016 11.77 30 DAYS

31-03-2015 23.04 16 DAYS

INTERPRETATION: As Per the above chart the following points
can be drawn:
1. Creditors deferral period has been increased from 16 days to 30 days
from the previous year which is a good sign for the company as
more deferral period then cash will stay more in the organization and
due to this operating cycle will also become better.
2. Creditors turnover ratio is reduced from previous year to 11.77 times
from 23.04 times. A Higher ratio shows suppliers and creditors that
the company pays its bills frequently and regularly. A higher
turnover ratio helps to negotiate favorable credit terms in the future
so company has good turnover ratio but they had a scope to increase
it.
 FINDINGS:
From the above discussion followings points were observed. They are:
1. Inventories forms a major part of the current assets of the company.
It is almost 31.39% of the total current assets which is huge amount.
2. Major portion of the inventories contains stores and spares which is
up to 55% of the total inventories. Though it is reduced up to ₹33.63
crore from previous year but Still huge fund is blocked in this portion
of inventories.
3. Companies cash ratio is not satisfactory as it is just 0.40 which is
less than 1 which shows that company face difficulty to pay its
short-term loans immediately.
4. The amount of cash is Majorly invested in fixed deposits (91%)
which is useful for the company in the long run as it helps to avail
the future opportunities present.
5. Short term loans have been increased up to 40.28 crore from the
previous year which is not a good sign for the company.
6. Trade receivables above 6 months has increased by 51%
approximately from previous year which is again not a good sign for
the company as it increases the risk of bad debts.
Reduc
7. Company has the scope to e the debtor’s collection period so as
to convert them into cash as early as possible.
8. Creditors deferral period is up to 30 days as per 2016 data but it
should be increased.
9. Company is at profitable situation and has good EPS of ₹14.52
which shows that company is earning profits.
10. The current ratio of the company is very low as compared to other
cement players. It is only 0.87:1 which is not satisfactory for such a
huge organization.
 CONCLUSION AND SUGGESTIONS:
According to the above analysis company should work in following areas:
1. Company has the scope to reduce its funds blocked in inventory by
either increasing the sales or by establishing an effective inventory
holding system so that cash can be released and sales could be
increased.
2. Company has to work upon debtors above 6 months those are
increasing which is not a good sign as it will block the funds,
increase the risk of bad debts and also stops investors to invest in the
company.
3. Company should focus on the short-term loans which has been
increased from the previous year due to MAT account where there is
an increase of about ₹3760 lacs and same is with prepaid expenses
which has been increased up to ₹1654.25 lacs from previous year.
So, they should be settled in future as soon as possible.
4. Company has to take suitable measures so as to reduce its finance
cost as it increases by ₹5016.79 lacs from previous year.
5. Sales revenue should be increased and specially in those areas where competitors are
doing well.
6. Operating cycle can be improved so as to earn more profit.

Hence, it can be concluded that J.K. CEMENT has a sound financial

position and is a major player of cement industry. The company is earning
better results and earning profit but with some measures it can increase
that in future to become the leading brand in whole cement industry.
 LIMITATIONS OF THE STUDY
There is certain limitation related to the research and they are as follows:

 The major limitation is the limited time duration (i.e., 2 months) for
study and it’s not possible to observe every aspect of working capital
management.
 Another limitation is that company is bound by certain obligations
and so they are unable to provide full information to the outsiders.
 The study and conclusions are made on the data available in hand
but the back working is not known due to which findings and
conclusions are not fully appropriate.
 One of the limitation is of primary Data collected through
questionnaire is not sufficient to draw certain conclusion based on
the information provided through it. Hence, study is made on
secondary data also to reach up to a conclusion.
 Another limitation in the study is that the financial statements of
year 2017 are formed according to the amended pattern due to which
data of 2017 cannot be compared with the previous results as it will
result in incorrect outcomes.
 BIBLIOGRAPHY
BOOKS:
I.M PANDEY, FINANCIAL MANAGEMENT (11TH EDITION)
M Y KHAN & P.K JAIN FOR FINANCIAL MANAGEMENT (4TH EDITION)
S.M MAHESWARI FOR MANAGEMENT ACCOUNTING. SULTAN
CHAND PUBLICATION.
STATISTICS FOR MANAGEMNET (7th EDITION), PEARSON, BY
LEVIN.RUBIN, RASTOGI, SIDDIQUE.

WEBSITES:
www.jkcements.com
www.moneycontrol.com
www.investopedia.com
www.wikipedia.com
www.managementstudyguide.com
ANNEXURE
BALANCE SHEET FOR YEAR 2017:
As on 31-03-2017
ASSETS:
NON- CURRENT ASSETS:
Property, plant and equipment 3,67,445.95
Capital work-in-progress 10,482.45
Other intangible assets 556.98
Financial assets:
 Investments 47,037.88
 Other 14,243.27
Other non-current assets 8,907.44
TOTAL NON-CURRENT ASSETS 4,48,673.97
CURRENT ASSETS:
Inventories 49,806.98
Financial assets:
 Current investments 6526.00
 Trade receivables 14,813.42
 Cash and cash equivalents 41,785.02
 Bank balances other than above 3 99.20
 Current financial assets 4,521.82
Current tax assets(net) -
Other current assets 17,419.33
TOTAL CURRENT ASSETS 1,34,971.77
TOTAL ASSETS 5,83,645.74
EQUITY AND LIABILITIES:
Equity share capital 6,992.72
Other equity 1,85,038.76
TOTAL EQUITY 1,92,031.48
LIABILITIES:
NON-CURRENT LIABILITIES:
Financial liabilities
 Borrowings 2,31,845.63
 Other financial liabilities 17,671.71
Long-term provisions 2,237.99
Deferred tax liabilities(net) 21,401.44
Other non-current liabilities 5,271.37
TOTAL NON-CURRENT LIABILITIES 2,78,428.14
CURRENT LIABILITIES:
Financial liabilities
 Borrowings 16,577.24
 Trade payables 20,517.96
  Other financial liabilities 65,996.85
Other current liabilities 8,335.82
Short-term provisions 1,601.60
Current tax liability(net) 156.65
TOTAL CURRENT LIABILITIES 1,13,186.12
TOTAL LIABILITIES 3,91,614.26
TOTAL EQUITY AND LIABILITIES 5,83,645.74
BALANCE SHEET FOR YEAR 2016 & 2015:
As at 31-03-2016 (lacs) As at 31-03-2015 (lacs)

EQUITY AND LIABILITIES

Shareholders’ Funds
Share Capital 6992.72 6992.72
Reserves and Surplus 164448.38 157661.34
TOTAL 171441.10 164654.06

Non-Current Liabilities
Long Term Borrowings 230787.66 215879.73
Deferred Tax Liability (Net) 32844.11 27984.55
Other Long-Term Liabilities 13964.53 11676.87
Long Term Provisions 1828.53 1659.47
TOTAL 279424.83 257200.62

Current Liabilities
Short term Borrowings 19620.69 26335.28
Trade Payables 28064.66 22925.76
Other Current Liabilities 64577.25 58920.35
Short Term Provisions 4771.79 4766.56
TOTAL 117034.39 112947.95
TOTAL 567900.32 534802.63

ASSETS
Non-Current Assets
Fixed Assets
Tangible Assets 348883.95 333598.56
Intangible Assets 199.76 197.51
Capital Work-in-Progress 15240.46 19117.98
Non-Current Investments 36279.56 28400.61
Long term Loans and Advances 16250.91 15340.10
TOTAL 416854.64 396654.76
Current Assets
Current Investments 6150.00 3050.00
Inventories 47424.31 50978.54
Trade Receivables 16569.39 13940.46
Cash and Cash Equivalents 47586.88 40770.57
Short Term Loans and Advances 32483.03 28454.29
Other Current Assets 832.07 954.01
TOTAL 151045.68 138147.87
TOTAL 567900.32 534802.63
STATEMENT OF PROFIT AND LOSS:
FY 2016 (in lacs) FY 2015 (in lacs)

INCOME
Revenue from Operations 356032.08 335716.72
Other Income 4999.44 5135.48
Total Revenue 361031.52 340852.20
EXPENSES
Cost of Materials Consumed 66579.74 55620.12
Purchases of Stock-in-Trade 151.78 103.94
Changes in inventories of finished goods work- 828.85 (94.84
in-progress and Stock-in-Trade
Employee Benefits Expense 23144.62 20254.24
Finance Costs 26959.06 21942.27
Depreciation and amortization expense 15628.13 13659.63
Other Expenses 213426.30 213451.45
Total Expenses 346718.48 324936.81
Profit before Tax 14313.04 15915.39
Tax Expense:
Current Tax 3060.00 3338.76
Less: MAT Credit entitlement (3060.00) (3338.76)
Earlier Years Tax Adjustments (700.07) -
Deferred Tax 4859.56 223.00
Profit for the Year 10153.55 15692.39