Chpater-1 1.review of Literature Management:: - Henryfayol

CHPATER-1
1.REVIEW OF LITERATURE
MANAGEMENT:
Managing is the art of getting things done through people in formally organized groups.
Management can thus be defined as the art or skill of directing human activities and physical
resources in the attainment of predetermined goals. The ability to manage is an attribute quite
apart from any technical skill. A manager can take advice from technical or functional experts
consider the information given by him, and come to a conclusion that results in a management
decision. Management is practiced with the help of five basic functions:
 Planning
 Organizing
 Staffing
 Directing and
 Controlling
 “Management” is awide term; it carries different meanings depending on the context in

which it is used. It is described as an “activity”, a “process”, and a “group of people”
vested with the authority to make decisions.
DEFINITIONS:
 Management is what a manage ------- LouiSallen
 To manage is to fore cast and plan, to organize, to command, to coordinate, and to control
-Henryfayol
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INTRODUCTION OF THE TOPIC
CAITAL STRUCTURE:
Capital structure is a mix of long term sources of funds used by a firm. It is made up of debt-
equity securities and reffers to permanent financing of a firm. It is composed of a long term debt,
preference share capital and share holders’ funds.
DEFINITION:
“Financial management is concerned with the efficient use of an important economic

resource namely capital funds”
FINANCIAL MANAGEMENT
INTRODUCTION:
In present economy finance is provision of money at the time when it is required.
Every enterprise requires finance to carry operation and to achieve target without adequate
finance no enterprise can possibly accomplish this objective. Financial management is the
managerial activity which is concern with the planning and controlling of the firm financial
resources.
MEANING OF FINANCE:
Finance may be defined as the art and science of managing money. It includes
financial service and financial instruments. Finance also is referred as the provision of money at
the time when it is needed. Finance function is the procurement of funds and their effective
utilization in business concerns.
PHILLIPUS--
“Financial management is concerned with managerial decisions that result in the

acquisition and financing of long-term and short-term creditors of the firm. As such it deals with
the situations that require selection of specific assets, the selection of specific liability as well as
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the problem of size and growth of an enterprise. The analysis of these decisions is based on the
expected inflows and outflows of funds and their effects upon managerial objectives”
CAPITAL STRUCTURE ANALYSIS
Capital structure analysis is a periodic evaluation of all components of debt and equity financing
used by abusiness.The intent of analysis is to evaluate what combination of debt and equity the
business should have this mix various over time based on the cost of debt and equity and the risk
to witch a business is subjected. Capital structure analysis is usually confined to short term debt,
leases,long term debt,preffered stock, and common stock.
The analysis may be a regular scheduled basis, or it could be triggered by one

of the following events
 The upcoming maturity of a debt instrument, which may need to be replaced or paid off
 The need to fund an acquisition
 A demand by investor for a larger dividend
A company's capitalization describes the composition of a
company's permanent or long-term capital, which consist of a combination of a debt and
equity. A healthy proportion of a equity capital, in a company's capital structure is an
indication of financial fitness.
CAPITAL STRUCTURE
Capital structure i s a mix of the long-term sources of funds used by a firm. It is made
up of debt and equity securities and reffers to permanent financing of a firm The optimal
capital structure of a firm is often defined as the proportion of debt and equity that result in the
lowest weighted average cost of capital for the firm. The capital structure is how a firm finances
its overall operations and growth by using different sources of funds.
DEFINITION OF LEVERAGE:
Leverage may be defined as the employment of assets (or) funds for which the firm pays fixed
cost (or) fixed return. When revenue less variable cost (or) earnings before interest and tax es
exceeds fixed return. A positive (or) favorable leverage occurs. When it does not. The result is an
unfavorable leverage.
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Leverage may be defined as the relative change in the profit due to change in sales. Financial
leverage helps to know the responsiveness of the earning per share to change in the EBIT.
Financial leverage refers to the extent to which a firm has a fixed financial cost arising from the
use of debt capital.
Leverage can divided in to the following categories.
1.Operating leverage
2 Financial leverage
3. Combined leverage
OPERATING LEVERAGE
Operating leverage occurs any time a firm has fixed cost to must be met regardless of volume in
operating language. When fixed cost must be met regardless of volume operating leverage when
fixed cost remains constant the percentage change in volume operating leverage refers to the
exent to high the firm has fixed operating Costa firm with high operating leverage will be
relatively high fixed cost in comparision with a firm with a low operating leverage if a firm
employs operating leverage then its operating leverage then its profits will increase at a fastest
rate for any given increases in sales. however if sales fall the firm with a high operating leverage
will suffer more loss than the firm with no (or) low operating leverage.
Contribution
Operating leverage=----------------------------------------
Operating profit (or) EBIT
percentage change in operating profit
DOL=-----------------------------------------------------------
Percentage change in sales
FINANCIAL LEVERAGE
Financial leverage helps to know the responsiveness of earning per share to the change in the
EBIT.Financial leverage reffers to the exent to which a firm has a fixed financial cost arising
from the use of debt capital.Financial leverage will occur when company employees the fixed
cost of funds Debt( or) preference share capital with a view to maximizing earnings avilable
toequity share holders.By way of higher income than the cost of funds. if the earnings are in
sufficient for covering the fixed cost burden than the company has to face financial risk.As long
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as companies earnings are greater than its fixed .costs. It will enjoy a favourable financial
leverage position and make use of earnings available to equity share holders.
Percentage change in earning per share
DFL=---------------------------------------------------------------
Percenge change in operating profit(or) EBIT
COMBINED LEVERAGE
When financial leverage is combined with operating leverage.That effect of change in revenue
on revenue on earning per share is magnified. Combined leverage refers to the extent to which a
firm has fixed operating cost as well as financial cost The degree operating and financial
leverage can be combined to see the effect of total leverage on EPS associated with given change
in sales.If a company employees high level of operating leverage and financial leverage .Even a
small change in the level of sales will have an earnings per share.
% Change in EBIT % Change in EPS
DCL=-----------------------------*-------------------------------------
% Change in sales % Change in EBIT
EBIT-EPS ANALYSIS
The EBIT-EPS analysis as a method of studying the effects leverage.
Essential involves the comparision of alternative methods of financing under various assumption
of EBIT. A firm has choice to raise funds for financing its investment proposals from different
sources in different proportion.For instance it can
1. Exclusively use of equity
2. Exclusively of data
3. Exclusively of preference capital
4. Use of combination of debt and equity
5. Use of combination of debt.Equity and prefference capital in different proportions.
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The technics of leverage are highly usuful tools in the hands of financial manager.The
significance lies in the fact that they help.
1 .In specifying and measuring the effect of change in sales volume on the earnings available to
share holders.
2. In establishing the relationship between operating and financial leverage.
MEANING OF FINANCIAL LEVERAGE:

A company can finance its investments by debt and equity.The company may
also use preference capital.The rate of interest on debt is fixed irrespective of the company's rate
of return on assets.The company has a legal binding to pay interest on debt.The rate of freference
dividend is also fixed but preference dividends are paid when the company earn profits.That is'
earning after interest and turns belongs to them.The rate of equity dividend ios not fixed and
depends on the dividend policy of a company.
The use of fixed changes sources of funds, such as debt and preference share capital
along with the owners equity in the capital structure,is described as financial leverage or trading
on equity.
PROFITABILITY
Profitability is the ability of company generate profit.It is an overall measure which depects the
efficiency and effectiveness at which the company has been operating .It indicates the overall
results of management decisions.Further it reflects how best the company has put to use its scare
resources to generate a higher rate of profitability.
PROFIABILITY ANALYSIS
It is a proposed to make a comparitive study of the profitability of bharathi cements Ltd.With
aview to finding out a relative difference and identifing the contributing factors for such
differences through profit margin and asset turnover at the two major components return on
investment (or) profitability.
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CHAPTER-2
RESEARCH METHODOLOGY
RESEARCH DESIGN
Exploratory research design has been adopted in the present study.
Exploratory research design largely interprets the already available information. It makes use of
secondary data and lays emphosis on analysis and INTERPRETATION of the existing and
available information.
A research design is a logical and systematic plan prepared for directing a research study it
is a program that guides the investigator in the process of collecting, analizing, and interpreting
observation. The study is based on analytical Research is a system of procedures and technics
applicable to quantitative data.
SOURCES OF DATA
The analysis is totally based on PRIMARY DATA and SECONDARY DATA.
PRIMARY DATA:
in nature .primary data can be collect through personal interview, questionnaire etc.To support
the secondary data. The primary data is that data which is collected fresh hand and for first time
which
SECONDARY DATA:
The analysis is purely based on the secondary data and discussion with the personnel's
concerned.The secondary data has been collected from published annual reports of bharathi
cements industries limited.Relavant information has been collected from other publications and
websites.
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NEED OF THE STUDY
Capital structure mainly using for to know about the debt-equity ratio of the company.It
provides insights into how risky a company is.Usually a company that heavily financed by debt
has more aggressive capital structure and therefore possess greater risky to investors.The capital
structure is defined as the careful balance between equity and debt that a business uses to finance
its assets day-to-day operations and future growth.
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OBJECTIVES
 To understand the capital structure of bharathi cement company.

 To understand how leverages impact on financial position of the company.
 To examine the impact of leverages on EBIT and EPS analysis.
 To know the operating ,financial&combined leverages position of the company.
 To know the debt-equity position of bharathi cement company.
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SCOPE OF THE STUDY
 The study will cover the identification of financial position of bharathi cement
company with the help of leverage.It will also help the debt-equity analysis of the
company usuful for taking the best decisions on designing the capital structure.
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LIMITATIONS OF THE STUDY
1. As it is not the researcher direct observation but secondary source of information provided by
the company.
2. The information provided in the company balance sheet is only the data source available.
3. The information available in the balance sheet has taken from published annual reports.
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INDUSTRY PROFILE
The cement sector notably plays a critical role in the economic growth of the
country and its journey towards conclusive growth. Cement is vital to the
construction sector and all infrastructural projects. The construction sector alone
constitutes 7 per cent of the country's gross domestic product (GDP). The industry
occupies an important place in the Indian economy because of its strong linkages to
other sectors such as construction, transportation, coal and power.
India is the second largest producer of quality cement in the world. The
cement industry in India comprises 183 large cement plants and over 365 mini
cement plants. Currently there are 40 players in the industry across the country. The
cement industry in India is experiencing a boom on account of overall growth in the
economy. The demand for cement, being a derived one, depends mainly on the
industrial activities, real estate business, construction activities and investment in the
infrastructure sector.
The Indian cement industry is involved in production of several types of

cement such as Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC),
Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid Hardening
Portland Cement, Sulphate Resisting Portland Cement, White Cement, etc. They are
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produced strictly as per the Bureau of Indian Standards (BIS) specifications and their
quality is comparable with the best in the world.
Indian cement majors ACC Ltd, Shree Cement Ltd and Ultratec have signed a
cooperation pact to support low-carbon investments in India. The pact was signed in
Geneva with member companies of the World Business Council (WBC) for
Sustainable Development’s Cement Sustainability Initiative and International
Finance Corporation (IFC). Under the pact, a Low Carbon Technology Roadmap for
the Indian cement industry is to be launched this year-end. The roadmap will outline
a possible transition path for the cement industry to reduce its direct emissions .
An overview of Cement Industry in India
India is today the second largest producer of cement in world with an installed
capacity of close to 159.43 million tons per year. 95% of cement is consumed
domestically and only 5% is exported. An increased outflow in infrastructure sector,
by the government as well as private builders, has raised a significant demand of
cement in India. It is the key raw material in construction industry. Also, it has highly
influenced those bigger companies to participate in the growing sector. At least 125
plants set up by the big companies in India with about 300 other small scale cement
manufacturers, to fulfill the growing demand of cement. Being one of the vital
industries, the cement industry contributes to the nation's socioeconomic
development. The sum total utilization of cement in a year indicates the country's
economic growth.
Cement plant was first set up in Calcutta, in 1889. At that time, the cement
used to manufacture from Argillaceous. In 1904, the first organized set up to
manufacture cement was commenced in Madras, which was named South India
Industries Limited. Again in 1914, another cement manufacturing unit was set up in
Porbandar, Gujarat, but this time it was licensed. In the early years of that era, the
demand for the cement tremendously exceeded but only after few years, the industry
faced a severe downfall. To overcome from this the worsening situation, the Concrete
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Association of India was founded in 1927. The organization has two prime goals, one
was to create awareness about utility of cement and another was to encourage cement
utilization.
What is the cement

Cement is a fine, soft, powdery-type substance. It is made from a mixture of elements
that are found in natural materials such as limestone, clay, sand and/or shale. When
cement is mixed with water, it can bind sand and gravel into a hard, solid mass called
concrete
History of cement
Throughout history, cementing materials have played a vital role. They were
used widely in the ancient world. The Egyptians used calcined gypsum as cement.
The Greeks and Roma used lime made by heating limestone and added sand to make
mortar, with coarser stones for concrete.
The Romans found that cement could be made which set under water and this
was used for the construction of harbours. The cement was made by adding crushed
volcanic ash to lime and was later called‘pozzolanic’ cement, named after the village
of Pozzuoli near Vesuvius.
In places such as Britain, where volcanic ash was scarce, crushed brick or tile
was used instead. The Romans were therefore the first to manipulate the properties of
cementitious materials for specific applications and situations.
Types of Cement
There are some varieties in cement that always find good demand in the
market. To know their characteristics and in which area they are most required, it will
be better to take a look at some of the details given below.
 Portland Blast Furnace slag cement (PBFSC)
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 Sulphate Resisting Portland Cement
 Rapid Hardening Portland Cement
 Ordinary Portland Cement (OPC)
 Portland Pozolona Cement (PPC)
 RAW MATERIALS OF CEMENT
The main raw materials used in the cement manufacturing process are
limestone sand, shale, clay and iron ore. The main material limestone is usually
mined on site while the other minor materials may be mined either on site or in
nearby quarries. Another source of raw materials is industrial by products. The use
of by product materials to replace natural raw materials is a key element in achieving
sustainable development.In India limestone deposits are abundantly found only in
siroly (Rajasthan),santna, belaspur (MP), Wadi (Karnataka), Yerraguntla (AP) and
some places in Gujarat. Units are generally located in close proximately of limestone
deposits in Madhya Pradesh, Andhra Pradesh, Tamil Nadu, Karnataka Rajasthan and
Gujarat.
The quality of required for the cement production should have the following
composition
Lime : 50%
Silica : 03%
Aluminum : 04%hh
Iron Oxide : 0.5%
Magnesia : 0.5%
Loss on ignition : 43%
Total : 100%
If magnesia content exceeds 0.4% to 0.5%, the limestone is not suitable for
cement. Similarly lime content is directly proportional to the clinker and cement
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quality and quantity.
Gypsum
Gypsum is another important required material for cement manufacturing,
constitutes about 5% of the cement. Gypsum is added in required quantity at the time
of grinding of clinker and the required amount of the gypsum are added to control the
sitting time of the cement. India possesses resources of gypsum. Hence its
availability is not a concern for the cement manufacture.
Manufacturing process of cement
There are several steps to manufacturing cement that are explained detailed
below.
Raw material preparation
Mining of limestone requires the use of drilling and blasting techniques. The
blasting techniques use the latest technology to insure vibration, dust and noise
emissions are kept at a minimum. Blasting produces materials in a wide rage of sizes
from approximately 1.5 meters in diameter to small particles less than a few
millimeters in diameter. Material is loaded at the blasting face into trucks for
transportation to they crushing plant. Through a series of crusher and screens, the
limestone is reduced to a size the minor materials (sand, shale clay and iron ore) may
or may not be crushed before being stored in separate areas until required.
Raw Grinding
In the wet process each raw material is proportioned to meet a desired chemical
composition and fed to a rotating ball mill with water. The raw materials are ground
to a size where the majority of the materials are less than 75 microns. Materials
exiting the mill are called “slurry’ and have flow ability characteristics. This slurry is
pumped to blending tanks and homogenized insure the chemical composition of the
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slurry is correct. Following the homogenization process the slurry is stored in tanks
until required.In the dry process, each raw material is proportioned to meet a desired
chemical composition and fed to either a rotating ball mill or vertical roller mill. The
raw materials are dried with waste process gases and ground to a size where the
majority of the materials are less than 75 microns. The dry materials exiting either
type of mill are called “kiln feed”. The kiln feed is pneumatically blended to insure
the chemical composition of the kiln feed is well homogenized and then stored in
silos until required.
Processing
Whether the process is wet or dry, the same chemical reactions take place.
Basic chemical reactions are: evaporating all moisture, calcining the limestone to
produce free calcium oxide, and reacting the calcium oxide with the minor
materials(sand, shale, clay, and iron). This results in final black, nodular product
known as ‘clinker’ which has the desired hydraulic properties.
In the wet process, the slurry if fed to rotary kiln, which can be from 3.0 m to 5.0m
in diameter and from 120.0 m to 165.0 m in length. The rotary kiln is made of steel
and lined with special refractory materials to protect it from the high process
temperatures. Process temperatures can reach as high as 1450 C during the clinker
making process. In the dry process, kiln feed is fed to a preheater tower, which
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COMPANY PROFILE
Bharathi Cement Corporation Limited (BCCPL) is a subsidiary of Vicat Group. The

Vicat Group manufactures Cement, Ready-Mixed Concrete, Concrete Product (Precast) and
Aggregates. In 1817 Louis Vicat discovered artificial cement. His son, Joseph, created Vicat
Company in 1853. The Group continues expanding under the President Jacques Merceron-Vicat
and is present in 11 countries (France, US, Turkey, Senegal, Switzerland, Egypt, Italy, Mali,
Kazakhstan, Mauretannia and India). The Vicat Group has 6,700 employees and generates sales
of Euros 2 billion.
Bharathi was founded by the promoters of Sakshi Telugu Daily &Sakshi TV, under the
chairmanship of Smt. Y.S. Bharathi Reddy and managing director Markus Oberle from
Vicat.And senior professionals with vast experience in Power, Cement, Infrastructure, Ready-
Mixed Concrete, Aggregates and Waste Management.
Before vicat, Bharathi Cement is a company that has been promoted by the Sakshi Group,
which has interests in media and power. It is controlled by Y.S. Jagan Mohan Reddy, the
Member of Parliament (MP) from Kadapa and son of former Andhra Pradesh chief minister Y.S.
Rajasekhara Reddy.Apart from the Sakshi group, Bharathi Cement has been co-promoted by
India Cements Ltd., Dalmia Cement (Bharat) Ltd. and N. Prasad, vice-chairman and founder of
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Matrix Laboratories Ltd.The Sakshi group bought Raghuram Cements in 2007 and renamed it
Bharathi Cement.
Bharathi expects to have a capacity to produce 5 million tonnes (mt) of cement by the end
of 2010. So the company makes a deal with vicat for global partner both for technology and
getting a pan-India footprint”.Bharathi in October commissioned a 2.5 mt capacity plant in
Andhra Pradesh Kadapa district with an investment of Rs700 crore. The second phase of the
plant expansion, with an additional investment of Rs720 crore for another 2.5 mt capacity, would
be completed by DecemberIn India, Vicat already has a 51:49 joint venture with Sagar Cements
Ltd to build a 5.5 mt, $625 million cement plant at Gulbarga in Karnataka.An analyst tracking
the cement industry for an Indian brokerage said Vicat will have a 10 mt cement-making
capacity in south India, making it the fastest capacity ramp-up from a low base by any cement
manufacturer in India.
Mission Statement
To partner our customers in building the best, by delivering superior quality cement that’s
produced with best-in-class technology. To grow by building lasting relationships with business
associates and contribute to the well-being of society
Careers
We value the human resources - a vital asset. People are always the strength of 'Bharathi
Cement'. Recognizing this, the Company gives great importance to provide Professional
Management, a work culture that allows its members a space to learn, innovate and grow. It
gives its people the freedom to think differently, and work as a team to achieve organizational
goals.
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STRENGTHS
State of the art plant
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Bharathi cement corporation Limited has set up most modern cement plant with state of
the art technology at Nallalingayapalli, Kamalapurammandal, Kadapa district of Andhra
Pradesh.
This area is known for its superior quality Nazi lime stone deposits , possessing high lime
content that gives high early strength and ultimate long term strength. Another characteristic
feature of this lime stone is low alkali, magnesia and low chloride contents which are highly
desirable parameters for concrete durability.
The state of the art technology adopted at the plant consists of Vertical Roller mill of
LOESCHE, Germany for grinding of cement to achieve the optimum fineness, and controlled
particle size distribution of cement particles
German Technology
The Bharathi Cement plant has the most advanced Vertical Roller Mill (Type 63.3) from
LOESCHE, Germany. This mill has a capacity of producing 360 tons per hour and is equipped
with a 6,700 KW gear box.
The mill is designed to produce a range of high quality cements such as Ordinary
Portland Cement (OPC), Portland Pozzolona Cement (PPC), Pozzolona Slag Cement (PSC) and
Ground slag at varying fineness. It has a rated capacity of 360tph OPC at 3000 Blaine and
300tph of ground slag at 4000 Blaine
• Homogenized mining
• Online process control
• Exclusive R&D facility for continuous product improvement
The early setting times and the rapid strength gain makes Bharathi cement ideal for
 Residential, Commercial and industrial structures
 Bridges, Dams
 Prestressed concrete works

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 Slip form concreting
 PQC works
 Concrete blocks, electric poles, paver blocks etc.
VRM Cement mill-The largest in the world
Loesche vertical roller mills are the most efficient mills in the world and achieve very
high throughputs. They are extremely maintenance friendly. Service tasks can be carried out
quickly. Downtimes are reduced to a minimum.
The Loesche grinding principle combines a horizontal grinding table with large tapered
roller under hydro pneumatic loading- the best possible compromise between output and wear.
The product quality can be enhanced by altering the classifier speed. All Loesche mills can be
started with grinding rollers raised. Metal to metal contact between grinding parts does not occur.
Their quiet, smooth operation is appreciated.
In Bharathi Cement the most advanced vertical roller mill from Loesche, Germany has
been commissioned. The mill has a capacity of producing 360 MT/hour and is equipped with
6,700 Kw gearbox. The mill is designed to produce a range of high quality cements such as
Ordinary Portland Cement, Portland Pozzolana Cement, and Portland Slag cement and ground
slag at varying fineness. It has a rated capacity of 360 tphopc at 3000 Blaine and 300 tph of
Ground slag at 4000 Blaine. The high flexibility of the system enables to produce cements of 6
different types from the same mill. Switching from one product to other can be done within
minutes.
Robotic Labs
A typical QCX/Rubella configuration consists of a standard industrial robot placed in the
centre of a circular arrangement of sample preparation and analytical equipment. Samples
normally arrive automatically from the connected automatic sample transport system, but may
also be entered via operator sample conveyors or special input/output magazines.
QCX/Rubella offers a very high flexibility in terms of the number and types of equipment
handled by the robot. Supported, fully automated preparation & analysis disciplines relevant to
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the cement industry include powder or fused bead preparation for X-ray analysis, particle sizing
by laser or by conventional sieving, color analysis, Carbon/Sculpture/Moisture combustion
analysis, physical testing and collection of shift/daily composites. For the typical cement lab
project a throughput capacity of 10-20 samples will apply; but higher numbers in one robot cell
are achievable.
The QCX computer integrates the system components. It identifies incoming samples,
downloads the relevant sample-handling specification and controls all intelligent devices in the
configuration. Sequence control includes priority handling, intelligent handling of equipment
failure situations and much more.
QCX/Rubella (and QCX/Auto Prep) provides high quality in sample preparation and
analysis. Quality not only meets the performance of 'the very best lab technician', but is highly
consistent over time. Thus, there are no fluctuations from shift to shift in analytical levels due to
small differences in the practical procedures undertaken by human operators.
BCCPL has established an Ultra-modern quality

control and assurance facility which provides high
quality in sample preparation and analysis & thereby
producing consistent quality of cement. It includes
 QCX/ Robotic Lab
 Cross Belt analyzers for limestone
 Cross belt ash analyzer for coal
 Burke XRF & XRD
 Automatic Particle Size analyzers of Marvin
 Auto- Sampling Systems etc.
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Tamper-Proof Packing
When cement bags are dumped on the ground, the impact causes cement to spill out of
the bag. This causes considerable loss, considering that some projects require thousands of bags,
but you incur no such loss with Bharathi Cement.
Bharathi Cement is packed in fully imported, tamper-proof PP laminated bags, which do

not allow the minutest of cement particles to spill. This ensures accurate weight and also
eliminates any possibility of pilferage. This technique of packaging is also eco-friendly.The
cement religiously processed and produced is packed in
specially designed imported polypropylene bags which are
dust proof and tamper proof. This special package ensures
full quantity (i.e. 50Kg net) cement in every bag and
chances of adulteration are totally eliminated.
Moisture Resistant
Manufactured from laminated fabric, the sack is water-resistant and keeps its strength when in
contact with water. Sack provides better resistance to humid condition as compared to Kraft
paper sack.
Environment Friendly
Sack is made of polypropylene which is environment friendly
degradable thermoplastic material. When incinerated or put to waste it
does not pollute air, soil or water with toxic residues. Empty sack it
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recycled and can be used for producing new Sacks. Bharathi Cement is packed in imported,
tamper-proof, PP laminated bags. There's no chance for any pilferage or adulteration.
PRODUCTS OF BHARATHI CEMENTS:
OPC 53 Grades:
Ordinary Portland Cement 53 grade is manufactured by inter grinding of high grade clinker (with
high C3Scontent) and right quality gypsum in predetermined proportions. The cement produced
gives high early strength and excellent ultimate strength.
OPC 43 Grades:
Ordinary Portland Cement 43 grade is manufactured by inter grinding of high grade clinker (with
optimum C3Scontent) and right quality gypsum in appropriate proportions.
PPC:
Bharathi Portland pozzolana cement is a premium composite cement manufactured by inter

grinding of high quality clinker, carefully selected High reactive Silica (HRS) obtained from
electrostatic precipitators with right quality gypsum.
PSC:
Bharathi Portland Slag cement is manufactured by inter grinding high quality clinker with
carefully selected, good quality slag purchased from major steel plants and using high quality
gypsum.
Our Leadership
Chairman Y.S.Jagan mohan reddy
Executive Directors
Anoop Kumar Saxena Gilles Du Manoir
G Balaji J J Reddy
Harish C Kamarthy M Ravinder Reddy
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Non-Executive Directors
Rodolphe Revel Guy Sidos
Jacques Merceron-Vicat Ulrich Thierry-Mieg
CALCULATION OF EBIT
EBIT=EBT+INTEREST
YEAR EBT INTEREST EBIT

2016 2456.46 2234.88 4691.34
2017 15390.09 5607.36 20997.45
2018 5062.88 3439.37 8502.25
2019 2646.72 3955.27 6601.99
202o 5062.88 3439.37 8502.25
120000
80000
40000
0
INTERPRETATION:
From the table1, it was observed that the edit was fluctuating during the period of study. edit in
the financial year 2013 is Rs 20997.45 and is the highest during period of study
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CALCULATION OF CONTRIBUTION
CONTRIBUTION=FIXED COST+PROFIT
YEAR
FIXED
COST PROFIT CONTRIBUTION
2016 37935.17 12265.11 50200.28
2017 70643.80 9210.09 79853.89
2018 52622.26 2062.88 54685.14
2019 55098.82 2434.04 57532.86
2020 52622.26 2062.88 54685.14
120000
80000
40000
0
R T D O
EA EB N TI
Y D FU RA
S
E RM ER
G
-T LD
N O
H
LO RE
L A
TA SH
TO
INTERPRETATION:
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From the above table 2, it was observed that the contribution was fluctuated due to changes in
fixed cost and EBIT during the study period. The fixed cost and EBIT increased during the
financial year 2012-2013. By this contribution was highest Rs 79853.89
CALCULATION OF DEGREE OF FINANCIAL LEVERAGE

% CHANGE IN EBIT
DFL=--------------------------
% CHANGE IN PBT
YEAR EBIT PBT DFL

2016 4691.34 2456.46 1.9098
2017 20997.45 15390.09 1.3643
2018 8502.25 5062.88 1.6793
2019 6601.99 2646.72 2.4944
2020 8502.25 5062.88 1.6793
120000
80000
40000
0
INTERPRETATION:
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From the above table 3, it was observed that the degree of finance leverage was increased in the
financial year 2012-2013. After that degree of financial leverage decreased continuously up to
the finance year 2014-2016.
CALCULATION OF DEGREE OF OPERATING LEVERAGE

% CHANGE IN CONTRIBUTION
DOL=----------------------------------------------
% CHANGE IN EBIT
CONTRIBUTIO
YEAR N EBIT DOL
2016 50200.28 4691.34 10.7006
2017 79853.89 20997.45 3.8030
2018 54685.14 8502.25 6.4318
2019 57532.86 6601.99 8.7145
2020 54685.14 8502.25 6.4318
GRAPH:
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120000
80000
40000
0
R T D O
EA EB N TI
Y D FU RA
S
E RM ER
G
-T LD
N O
H
LO RE
L A
TA SH
TO
INTERPRETATION:
From the above table 4,it was observed that the the degree of operating leverage was fluctuating
due to the changes in contribution and EBIT during the study period.The DOL IS 10.70 in the
financial year 2012.
CALCULATION OF DEGREE COMBINED LEVERAGE
DCL= DEGREE OF FINANCIAL LEVERAGE*DEGREE OF OPERATING

LEVEARGE
YEAR DFL DOL DCL

10.700 20.426
2016 1.9098 6 3
2017 1.3643 3.803 5.1884
10.800
2018 1.6793 6.4318 9
21.737
2019 2.4944 8.7145 4
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10.800
2020 1.6793 6.4318 9
GRAPH:
140000
120000
100000
YEAR
80000
2020
60000 2019
2018
40000
20000
INTERPRETATION:
From the above table 5, it was that degree of leverage was fluctuating due to the changes in
financial leverages and degree of operating leverage during the study period.The degree of
combined leverage increased for the financial year and operating leverage of 2015
CALCULATION OF EARNING PER SHARE

PROFIT AFTER TAX
EPS=--------------------------------------------------
NO.OF SHARES OUT STANDING
NO.OF
YEAR PAT SHARE EPS
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2016 12265.11 23.80 425.8719
2017 9210.09 23.80 386.9786
2018 2062.88 23.80 86.6756
2019 2434.04 23.81 102.2276
2020 2062.88 23.81 86.6392
GRAPH:
120000
80000
40000
0
T
R
O
EB
EA
TI
N
FU
RA
D
Y
RM
S
ER
E
LD
-T
G
O
N
H
LO
RE
L
A
TA
SH
TO
INTERPRETATION:
From the above table 6, it was observed that the earnings per share of BHARATHI CEMENTS
was fluctuated during the study period.The PAT was increased and number of shares is constant
from year 2012-2016.by this EPS was highest 425.8719 in the financial year 2012.
DEBT-EQUITY RATIO:
The ratio is called external and internal equity ratio it is mainly calculated to assets the sounding
of long term financial position and determined inside and outside owners
Total debt
Debt equity ratio=-------------------------

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Net worth
Total debt=secured loans+unsecured loans
Net worth=share capital+reserves and surplus
TOTAL LONG- SHARE

YEAR TERM DEBT HOLDERS FUND RATIO
2020 32616.79 17690.27 1.8438
2019 60036.84 121414.3 0.4945
2018 61036.84 119646.11 0.5101
2017 77122.06 128856.2 0.5985
2016 24313.93 7969.42 3.0509
GRAPH:
120000
80000
40000
0
INTERPRETATION
:From the above table we find that debt equity ratio has been increased 2012-2013 after
continuous some period up to 2015.T he standard norms is 1:1.The solvency position of the
company’s satisfactory.
FINDINGS
 The EBIT and CONTRIBUTIONS are increased in the intial period after slightly
decreased.
 The financial leverage continuously increased upto 2015 after slightly decreased
next year.
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 The operating leverage is high in starting period after fluctuating the next years.
 The degree of combined is high in the years 2012 and 2015 remaining years
decreased slightly.
 The no of shares is constant for all years but EPS is high in initial period
remaining years slightly decresed.
 The debt equity ratio is high in the initial and end of the period, fluctuating the
ratio in middle years.
SUGGESTIONS
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 The variability of EBIT depends on the sales revenues,so the company should
concentrate more on the income of sales for increasing the EBIT, so that the operating
efficiency will increase.
 The higher the financial leverage is effect to the company .I suggest to decrease the
financial leverage that is useful for the company.
 I suggest to increase the operating leverage more for increasing the operating efficiency
of the company.
 I suggest that combined leverage to maintain same for overall financial and operating
efficiency.
 The EPS is the measure of profitability. It shows the decreasing trend it is effect to the
company so i suggested to increase the sales to attract to share holders equity.
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CONCLUSION
After studying and analysing the position about capital structure of bharathi cement
company.The debt equity ratio is revealed that debts are decreased for the company so share
holders equity are eually raised.The operating profit of the company is increased.The company
leverage position is also good for evaluating based on financial,operating and combined
leverage.All those are expressed good operating efficiency of the company to grown up in near
future also.the profitability is impact of leverages of the company.
PROFIT AND LOSS ACCOUNT FOR THE YEAR-2016
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Rs in lakhs
PERTICULARS 2016 2015
Income
Sales(gross) 54306.18 40166.84
Less: Excise Duty 7616.56 7284.19
Sales (Net) 47306.18 32882.65
Other Income 457.41 412.55
46749.03 33295.20
Expenditure
Cost of goods sold 44017.91 --
Persona cost 3288.27 1574.49
Other expenses 29552.25 28359.17
Depreciation 2859.77 2839.05
Interest and other finance charges 2234.88 2333.38
Profit before tax 37690.57 35192.63
Profit/(Loss) for the year 2456.46 1897.43
Provision for tax -- --
Current tax -- --
Fringe benefit tax 65.00 --
Profit/(loss) for the year 12265.11 2104.92
Debit balance brougjt forword from previous year 16609.18 14504.26
Debit balance carried to balance sheet 14344.07 16609.18
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BHARATHI CEMENT LIMITED BALANCE SHEET FOR THE YEAR 2016
Sources of funds
Share holders’ funds
a)Share capital
b)Reserved capital
a)Secured loans
a)Unsecured loans
Differed tax liability
TOTAL
Application of funds
Fixed assets
a)Gross block
b)less depreciation
Net block
Capital work in progress
Investment
Current assets, Loans and Advances
a)Inventories
b)Sundry Debtors
c)Cash and bank balance
d)Loans and Advances
Less current liabilities and provisions

a)Current liabilities
b)Provisions
Net current assets

Differed tax assets
Miscellaneous expenditure
TOTAL
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Rs inlakhs
PARTICULARS 2017 2016
INCOME
Sales of manufactured goods 163355.89 116737.13
Sale of manufacturing goods, net 144081.08 101677.84
Other income 2178.64 1955.33
146259.72 103633.77
EXPENDITURE
Cost of goods sold 60225.83 45948.33
Personnel cost 5126.83 4765.94
Amortization of goodwill 1799.20 1799.20
Interest and other finance cost 5607.36 3439.37
130869.63 98570.89
Provision for tax
Current tax 3140.00 1031.00
Differed tax(credit)/ charge 5920.00 3000.00
MAT entitlement credit 2880.00 1031.00
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Profit after tax 9210.09 2062.88
Debit balance in profit and loss account brought forword 54948.04 52885.16
Balance in profit &loss account carried forword 64158.13 54948.04
BALANCE SHEET AS ON 31st DECEMBER 2017

1.Source of funds:
Share capital 42796.14 42796.14
Reserve capital 86060.06 76849.97
128856.20 119646.11
Loans funds
Secured loans 61619.27 42501.93
Unsecured loans 15502.79 13358.90
Deferred tax liability 13280.00 7360.00
Total 219258.26 182866.94
Total capital employed 348114.46 302513.05
2.Application of funds:
Fixed assets
Gross block 218365.00 193075.65
(-)Depreciation 66948.98 53870.09
Net block 154116.02 139205.56
Capital work in progress 44897.19 44589.34
Net fixed asset 196313.21 184064.90
Investments 16682.49 6850.27
Current assets, Loans &Advances:
Inventories 1211.47 9061.61
Sundry debtors 5047.37 4123.75
Cash & Bank balances 12433.56 4550.46
Loans & Advances 24236.04 11510.12
53928.44 29245.94
Current liabilities & Provisions:
Current liabilities 43801.30 34698.37
Provisions 3864.58 2595.80
47665.88 37294.17
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Net current assets 6262.56 8048.23
TOTAL 219258.26 182866.94
Rs in lakhs
INCOME
Less:Excise Duty 15059.29 12218.19
Other income 1955.93 796.30
103633.77 109524.85
EXPENDITURE
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98570.89 81805.61
Current tax 1031.00 11520.00
Deferred tax(credit)/ charge 3000.00 781.16
MAT entitlement credit 1031.00 --
BALANCE SHEET FOR THE YEAR-2018
Rs in lakhs

1.Source of funds:
Share capital 42796.14 42796.14
119646.11 117583.23
Loans funds
Secured loans 42501.93 43190.95
Total 188042.95 181385.48
Total capital employed -- --
Fixed assets
Gross block 193075.65 94463.86
(-)Depreciation 53870.09 43632.77
Net block 139205.56 50831.09
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Net fixed asset 184064.90 152121.73
Investments 6850.27 16764.10
Loans & Advances 11510.12 7482.89
29245.94 36866.00
Provisions 2595.80 4921.17
32118.16 24366.35
TOTAL 188042.95 181385.48
Rs in lakhs
INCOME 116737.13
Other income 1760.34 103633.77
93805.51
EXPENDITURE 45948.33
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96452.23 5062.88
Profit before tax 2646.72 --
Provision for tax -- 1031.00
Current tax 1010.38 3000.00
MAT entitlement credit 1423.66 2062.88
Balance in profit &loss account carried forword 56376.9
Rs in lakhs

1.Source of funds:
Share capital 42796.14 42796.14
12141.3 119646.11
Loans funds
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Secured loans 42501.93 42501.93
Differed tax liability 7433.6 7360.00
Total 188884.74 188042.95
Total capital employed -- --
Fixed assets
Gross block 187075.65 193075.65
(-)Depreciation 50970.09 53870.09
Net block 136104.91 139205.56
Net fixed asset 178684.25 184064.90
Investments 7850.27 6850.27
Loans & Advances 11944.12 11.510.12
29584.86 29245.94
Provisions 2306.32 2595.80
36840.638 32118.16
TOTAL 188884.74 188042.95
Rs in lakhs
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INCOME
Sales of manufactured goods 116737.13 120.946.74
Sale of manufacturing goods, net -- --
Other income 1955.93 796.30
103633.77 109524.85
EXPENDITURE
Amortization of goodwill 1799 1799.20
98570.89 81805.61
Current tax 1031.00 11520.00
MAT entitlement credit -- --
[Type text] Page 46


1.Source of funds:
Share capital 3976.36 3976.36
17690.27 12526.13
Loans funds
Secured loans 26486.50 22645.54
Total 53742.80 53755.86
Total capital employed
Fixed assets
Gross block 40286.29 38974.86
(-)Depreciation 12527.20 10734.88
Net block 27759.09 28239.98
Net fixed asset 31200.30 28665.35
Investments -- --
Inventories 11519.49 14436.48
Loans & Advances 5581.47 6107.54
30463.18 35973.84
Provisions 1066.74 774.95
7920.68 10883.33
TOTAL 53742.80 53755.86
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Chpater-1 1.review of Literature Management:: - Henryfayol

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CHPATER-1

 “Management” is awide term; it carries different meanings depending on the context in

 Management is what a manage ------- LouiSallen

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“Financial management is concerned with the efficient use of an important economic

“Financial management is concerned with managerial decisions that result in the

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CAPITAL STRUCTURE ANALYSIS

The analysis may be a regular scheduled basis, or it could be triggered by one

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Leverage can divided in to the following categories.

Operating profit (or) EBIT

percentage change in operating profit

Percentage change in sales

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Percentage change in earning per share

Percenge change in operating profit(or) EBIT

% Change in EBIT % Change in EPS

% Change in sales % Change in EBIT

The EBIT-EPS analysis as a method of studying the effects leverage.

1. Exclusively use of equity

3. Exclusively of preference capital

4. Use of combination of debt and equity

5. Use of combination of debt.Equity and prefference capital in different proportions.

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2. In establishing the relationship between operating and financial leverage.

MEANING OF FINANCIAL LEVERAGE:

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 To understand the capital structure of bharathi cement company.

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The Indian cement industry is involved in production of several types of

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An overview of Cement Industry in India

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What is the cement

 Portland Blast Furnace slag cement (PBFSC)

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Manufacturing process of cement

Raw material preparation

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Bharathi Cement Corporation Limited (BCCPL) is a subsidiary of Vicat Group. The

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State of the art plant

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 Residential, Commercial and industrial structures

 Prestressed concrete works

 Concrete blocks, electric poles, paver blocks etc.

VRM Cement mill-The largest in the world

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BCCPL has established an Ultra-modern quality

 QCX/ Robotic Lab

 Cross Belt analyzers for limestone

 Cross belt ash analyzer for coal

 Burke XRF & XRD

 Automatic Particle Size analyzers of Marvin