A Project Report on WORKING CAPITAL MANAGEMENT (RAJASHREE CEMENT, MALKHED) A Project Report Submitted To The Fulfillment For The

e Award Of Degree In Master of Business Administration In Partial

Submitted By

Reg. No.

UNDER THE GUIDANCE OF Internal Guide External Guide Mr.R. Annadurai, B.Com., FICWA, Manager (Accounts) Rajashree Cement, Malkhed.

Institute/University Name:

2010-11

ACKNOWLEDGEMENT

It is my privilege to express my gratitude to Mr. P.K. Jain, Joint Executive President - HR for giving me an opportunity to carry out my project work in Rajashree Cement.

I would like to extend my sincere thanks to Mr. V.A. Yaligar, GM - HR for providing all the help to complete my project work.

My sincere thanks to Mr. R. Annadurai, Manager (Accounts) for his continuous support and guidance in completion of my Project.

My special thanks to Mr. Basavraj Kalligudd, Dy. Manager - HR for his continuous guidance to complete my project.

I would like to thank my faculty for his guidance to get this placement.

I am extremely grateful to all the staff of HR Dept, Accounts Dept and Time Office for their valuable insight and suggestion and sparing their precious time to interact with me.

Finally, I would like to thank my family and friends who have encouraged me throughout my Project Work.

INTRODUCTION

Finance is a key factor and the same is so essential to the business just like blood circulation required for human body to maintain the life smoothly.

Financial management involves managerial activities concerned with the acquisition and running of the business. Finance function does with procurement of money taking into consideration of today as well as future needs as it is required for purchase of machinery, raw materials, to pay salaries and wages and also for day to day expenses.

Working capital is the process of planning and controlling the level of mix of the current assets of the firm as well as financing of these assets. Specifically, working capital management requires the financial manager to decide what quantum of cash & bank, other liquid assets, debtors and inventories of the firm are required to be held at any point of time. In addition, the finance manager must decide how these current assets are to be financed

The finance manager has to analyze the following before taking the decision. How should the firm manage its cash? To whom should the firm grant credit? How much inventory should the firm keep? What should be the composition of the firms current debt?

1.2. Statement of the Problem: Working capital management is an important function of finance department of the organization while managing current assets for two important factors of liquidity and profitability. The excess working capital results in deterioration in profits and inadequate working capital results in illiquidity risk so this study is undertaken to know what extent the Grasim Industries Limited is successful in trade off liquidity and Profitability.

1.3. Objectives of the Study:

To study and interpret the financial statement of Rajashree Cement which is a Unit of Grasim Industries Limited. To interpret the inventory statement.

To study the existing system of working capital management. To study overall sources and applications of working capital fund To know the strengths and weakness of Grasim Industries Limited. To suggest if necessary the methods by which future improvement may be made in its management of working capital. To calculate the working capital ratio of Rajashree Cement.

1.4. Scope of the Study The role of working capital management in industry indicates the effective utilization and control of net current assets. Proper maintenance of working capital in industry is very important. Finally the management of working capital has become a great recognition as the most important function of every modern business enterprise. Financial decision includes Inventory decision Financing decision Liquidity decision (Working Capital Management)

So an attempt has been made to identify the optimum working capital requirements for Rajashree Cement and it has been observed that the manners in which they utilize the current assets are in a better way.

1.5. Research methodology: Design of the Study The study was descriptive in nature so no attempt was made to test any hypothesis. Quantitative datas were used from verifying the assumptions and bringing this study on working capital management.

Data Collection Sources The major source of information for this study is secondary data, the information were collected through various Journals, books, Internet and magazines, also various literatures were reviewed for capitalizing them for the project report.

During my in plant training, I have visited Accounts Department and HR Department and have had interactions with the executives and staff. The impression carried out during the discussion and observation have helped a lot in understanding the manufacturing system of cement. The quantitative data generated was then used to present a study in comprehensive manner.

To gather information on the topic a study on working capital management and various ratios were used. For this purpose, Balance Sheet, Profit & Loss Account and Financial Statement were analyzed.

1.6. Tools and Technique: Here certain statistical tools and techniques are used to draw conclusion on working capital management.

The main techniques that are used in the study are Working Capital Ratio Efficiency Ratio Structure and Health Ratio Working Capital Leverage Comparative Analysis and Regression Analysis Method

1.7. Limitation of the Study:

The first limitation of the study was the time constraint. It was not possible to make an extensive study with in the available time to cover period of past five financial years. Figures for the analysis are taken from the annual reports. So all the limitations of these statements will apply to the study. Major part of the work is concerned with financial data adequate data could not be collected because of time constrain.

The study does not attempt to make a comparative analysis with any benchmarked industry norms. The study reveals the finding of the past and not reflecting the future.

2. THEORETICAL BACKGROUND OF WORKING CAPITAL MANAGEMENT Financial Management: Financial management is concerned with the overall decision making in general and with the management of economic resources in particular. In other words it can be defined as the management of cash and fund flow which deals with financial decision making of firm.

Working capital management is concerned with the problems that arises to manage the current assets, current liabilities and interrelation that exists between them. Current assets refer to those assets which can be converted into cash within one year. The major current assets are cash, inventories, bill receivable, and debtors.

Current liabilities refer to those liabilities which have to be paid within one year. The major current liabilities are bills payable, creditors, outstanding expenses, bank over draft etc.

The goal of working capital is to manage the current assets and current liabilities in a better way. If a firm is not in a position to manage the current assets and current liabilities, it may become insolvent and may be even forced into either for bankruptcy or for even closure.

Introduction of Working Capital Management A business unit or an industrial establishment require two types of finance namely, long term finance and short term finance. Long term finance required to meet capital

expenditure requirements. Short term finance or funds are needed to meet the day to day requirements of a business unit. The exploitation of capital assets can be had only by working capital.

It lubricates the wheel of fixed assets.

This facilitates the industrial units to have

sustained business. Working capital may be regarded as the life blood of a business. Its effective provision can do much to ensure the success of a business while its inefficient management can lead not only to loss but also to ultimate down fall of what otherwise might be considered as a promising concern.

Meaning and Definitions: Working capital management or administration of all aspects or working capital, which manages the current assets and current liabilities in such a way that a satisfactory level of working capital is maintained. Net working capital is commonly defined as the difference between current assets and current liabilities.

Net working capital can be alternatively defined as the part of the current assets which are financed with long term funds since current assets exceeds the current liabilities, the excess must be financed with long term funds.

According to Smith Working capital management is concerned with the problems that arise in attempting to manage the current assets and liabilities; and the inter relationship that exist between them.

According to Weston and Brigham Working capital refers to a firms investment in short term assets cash, short term securities accounts receivables and inventories.

Basic Objective of Working Capital Management These basic objectives of working capital management the firms working capital in such a way that a satisfactory level of working capital (it neither excessive nor inadequate working capital) is maintained.

This is necessary because if the working capital is excessive or large the liquidity position adversely affected, as funds would not doubt, improve, but its profitability would be adversely effected, as funds would remain idle. Conversely if the working capital is too small, the profitability of the firm may improve but the liquidity position of the firm would be adversely affected.

Need for Working Capital Every business requires some amount of working capital. The necessity of working capital arises because of the time gap between the production and realization of cash from sales. Working capital is needed for the following purposes: For the purchase of raw materials, components and spares. To pay wages and salaries To incur day to day expenses To provide credit facilities to the customers. To maintain the inventories of raw materials, work in progress and finished stock.

Concept of Working Capital There are two concepts of working capital. They are Gross Working Capital Net Working Capital

1. Gross Working Capital: Refers to the firms investment in current assets. Current Assets are the assets, which can be converted into cash within a short period say an accounting year or operating cycle and includes cash, short term securities, debtors (accounts receivables or book debts) bills receivable and stock (inventory). Gross working capital points to the arranging of funds to finance current assets.

2. Net Working Capital:

Refers to the difference between current assets and current liabilities, current liabilities are those claims of outsiders, which are expected to mature for payment within accounting years and include creditors (accounts payable), bills payable and outstanding expenses. Net working capital can be positive or negative. A positive networking capital will arise when current assets exceed current liabilities.

Sources of Working Capital Among the various sources available for financing working capital needs, finance manager has to select the best suitable source depending on working capital need of company. Long Term Sources: By issue of shares By issue of debentures Ploughing back of profits Long term loan

Short Term Sources: They are classified into Internal Withdrawing the depreciation fund. Using the renouncement for taxation Postponement of payment accrued expenses.

External Bank Loan Trade Credit Bills of Exchange Government Assistance Public deposits (Short Term)

The need of working capital is increased because of rise in prices of relative inputs. On the other hand, the government and monetary authorities play their own role to curd the

malice in period of inflation. The control measures often take the firm of dear money policy and restrictions credit.

Financing of additional working capital in such an amusement becomes a real problem to finance manager of a concerned unit. Commercial banks play the most significant role in providing working capital finance, particularly in Indians context. In view of mounting inflation, RBI has been taking up certain social measures to check the money supply in the economy. The balancing need has to be managed either by long term borrowings or by issuing equity or by earning sufficient profits and retaining the same of coping with the additional need on working capital requirements. The first choice before a finance manager is banks that can provide a part of additional working capital so as to take the long term sources of finance.

Measures to be adopted for a sound Working Capital Management For a sound management of working capital, a concern should adopt the following measures; Budget its cash flow Control its debtors Control its creditors Control its stock Avoid over borrowing Avoid over investment in fixed assets Determine the financing mix

CASH MANAGEMENT Cash management is one of the key areas of working capital management as cash is both beginning and the end of the working capital cycle cash, inventories, receivables and cash. Nature: Cash is the medium of exchange for purchase of goods and services, and for discharging liabilities. Cash has been used in two senses.

Narrow Sense: Cash covers currency and generally accepted equivalents of cash. E.g.: Cheques, demand drafts and bank demand deposits. Broad Sense: It includes Bank time deposits and marketable securities

Objectives of Cash Management Inadequate cash balance will affect the liquidity of the firm. Hence there is need to maintain balance between profitability and liquidity. So there should not be excess cash or inadequate cash To meet cash payment needs To maintain minimum cash balance Possible motives for holding cash Transaction motive Precautionary motive and Speculative motive

Aspects of cash management can be examined under these Cash inflows Cash outflows Cash flow within the firm and Cash balance held at the point of time.

Facets of Cash Management Strategies: Cash planning Cash flows management Determination of optimum cash balance, and Investment of surplus

3. COMPANY PROFILE

INTRODUCTION TO GRASIM INDUSTRIES LIMITED

The Aditya Birla Group is Indias first multinational company. Global in vision, rooted in Indian values, the group is driven by a performance ethic pegged on value creation for its multiple stakeholders. A US$ 29.2 billion conglomerate, with a market capitalization of US$31.5 billion, it is anchored by an extraordinary force of 130000 employees belonging to over 25 different nationalities. Over 24 percent of its revenues flow from its operations across the world. The Groups products and services offer distinctive customer solutions. Its 74 state of the art manufacturing units and sect oral services span India, Thailand, Laos, Indonesia, Philippines, Egypt, Canada, Australia, China, USA, UK, Germany and Hungary.

A premium conglomerate, the Aditya Birla Group is a dominant player in all of the sectors in which it operates. Among these are viscose staple fiber, non ferrous metals, cement, viscose filament yarn, branded apparel, carbon black, chemicals, fertilizers, sponge iron, insulators, financial services, telecom, BPO and IT services.

The ADITYA BIRLA Group is a dominant player in the entire sector in which it operates such as, Worlds most cost efficient aluminum and copper producers No.1 in viscose staple fiber The worlds largest single location palm oil producer The 3rd largest producer of insulator The 4th largest producer of carbon black. The 11th largest cement producer and the 2nd largest in India. Among the worlds top 15 BPO cos. & among Indias top 3 A non ferrous metals powerhouse and among the worlds most cost efficient producers of aluminum and copper The worlds No.1 in insulators with its joint venture with NGK of Japan Globally, the fifth largest producer of carbon black Best Employer in India The best employer among the top 20 in Asia

The worlds eighth largest producer of cement, and the largest in a single geography Indias premier branded garments player Among worlds best energy efficient fertilizer plants Indias second largest producer of viscose filament yarn The No.2 private sector insurance company, and the fourth largest asset management company in India Among the top 5 telephony companies.

RAJASHREE CEMENT PLANT

GRASIM BUSINESS DIVISION

Grasim ventured into cement production in the mid of 1980s, setting up its first cement plant at Jawed in Madhya Pradesh and since then it has grown to become cement major with the acquisition of the L & T cement business, it has become the worlds eighth largest cement producers, and the largest in a single geography, with a combined capacity of 45.65 Million Tones per annum.

Grasims cement operations today span the length and breadth of India, with 11 composite plants, 7 split grinding units, 4 bulk terminals and 7 ready mix concrete plants. All the plants are located close to sizeable limestone mines and are fully automated to ensure consistent quality. All units use state of the art equipment and technology and are certified with ISO 9001 for quality systems and ISO 14001 for environment management systems.

Leveraging the strong equity and goodwill of the house mark, the company has repositioned its portfolio cement brands under the Aditya Birla Group Logo. There include national brands such as Birla Super, Birla Plus, Birla White and Birla Ready Mix, while also nurturing some regional brands like Vikram Cement and Rajashree Cement.

Grasim is also the largest producer of white cement in India, with a capacity of 400000 tonnes per annum. Branded as Birla White, this division manufactures world class white cement in a variety of textures and finishes. It has applications in floorings and exterior wall finishes, apart from other innovative uses.

A. BACKGROUND AND INCEPTION OF THE COMPANY Rajashree cement, a unit of Grasim Industries Ltd, established in 1983, with a capacity of 0.50 MTPA at Malkhed in Gulbarga District of Karnataka State and now it has enhanced its capacity to 4.20 MTPA. On the Hyderabad Mumbai BG line at a strategic location with regard to its market base. It is well connected by rail with major cities of Hyderabad, Bangalore, Mumbai and Chennai. The salient facts about Rajashree Cement are; Coal based thermal power plant with a 58.2 MW capacity Modern dry process technology form KHD, Germany with a state of the art process control system The only cement plant in Indian with a captive coal washers First in India to achiever certification of ISO 9001:2001 by DNV, Netherlands 2001

Cement varieties catering to different segments, Rajashree Cement for residential and commercial construction; Birla Super cement for multistoried buildings, dams and bridges, Birla Plus for mass concrete laying and non

structural applications, Birla Coastal for foundation work and for use in coastal areas as well as sugar and fertilizer plants, and OPC 53 S (Sleeper Grade Cement) The plant consists of 3 units Unit UNIT I Commissioned Cement Rajashree Cement 1984 Birla Plus Birla Super Cement Rajashree Cement UNIT II 1990 Birla Plus Birla Super Cement Birla Plus UNIT III 1995 Birla Super Cement IRST 40 5200 Tonnes /day 4100 Tonnes /day 3200 Tonnes / day Capacity

The plant has been under going the continuous expansion and modernization programmed right from the inception of the first unit. The present installed cement production capacity of the plant is 4.2 million tones per annum. It also has a captive power plant of 58.2 MW. It is one of the largest cement plants, at a single location, in the country. It is worlds 11th largest cement producers. MILESTOINES: 1984 : Production was commenced in Unit I with a capacity of 1500 TPD. 1989 : The capacity of Unit-I was increased from 1500 TDP to 2200 TDP. 1990 : Unit II commenced its production with a capacity of 3200 TPD. The roller press was installed in Unit-I Raw Mill that was first of its kind in India.

A six stage pre heater was installed with two strings for lower heat Consumption in Unit-II.

1991 : First in India to manufacture 53 Grade (Birla Super) Cement . 1992 : Installed ESPs in coal mill and cooler for better efficiency and dust Control. Installed 16 MW Thermal Power Plant. 1993 : Installed Roller Press in Cement Mill in Unit I. Received Rajiv Gandhi National Quality Award from Bureau of Indian Standards (BIS), New Delhi. 1994 : Launch of Birla Star Portland Pozzolona Cement. Obtained ISO 9002 Quality System Certification. 1995 : Commencement of production in Unit III with a capacity of 5000 TPD. Attained revised IS ISO- 9002 94 certified from BIS. Unit III plant erected in record time of 15 months with existing Manpower. First in India to install V separator in Raw Mill and KHD type. Pyrostep Cooler and project in Kiln of Unit III. Constructed pre heater tower of 99 meters height in record time of 8 months. Installed Thermal Power Plant II of 20 MW Capacities. Installed split grinding unit at Hotgi in record time of 12 months. 1996 : Installed coal washery for getting consistent coal ash of 30%. Installed additional boiler III of capacity 95 TPD. 1998 : EMS 14001 certification. Bulk cement rail loading terminal with 3 rakes of special bulk Cement wagons. 1999 : SAP, ERP package implemented for modules PM, MM, FI, CO, PP, PI, PS, DM and AM. 2001 : Up gradation of Unit I pre heater to six stages from V

stages. 2002 : Unit III kiln capacity enhanced to 4650 TPD from 4250 TPD (IST Phase up-gradation). First in country in installing Omega Plate in cooler and Triplet Cyclone in Pre-Heater. Unit- I Pyro Process up-gradation and Installation of Omega plate in Cooler to enhance clinker capacity From 2500-2900 TPD Installation of V- Separator in Unit I Raw Mill. 2003 : U-III, II phase up gradation by modification of pre heater cyclone of both kiln and pyro string enhanced clinker capacity to 4900 TPD. Installation of Triplet ion Pre heater and Omega plate in cooler of Unit II clinker capacity enhanced from 3400 TPD to 3600 TPD.

B. NATURE OF BUSINESS CARRIED Rajashree Cement (A unit of Grasim Industries Ltd) is a cement manufacturing company (Grey Cement) consists of three manufacturing units with production capacity of 4.2 Million Tonnes per annum producing a wide variety of products catering to different segments of customers in western and southern regions of the country. Apart from carrying business activity with profit motive, simultaneously it also concentrates on corporate social responsibility and environment management. Corporate social responsibility is delivered through Kagina Jan Seva Trust (KJST) for rural and social development and environment management by following ISO Standards, a forestation in and around the unit and village, by using effective pollution control devices in the unit, establishing and maintaining greenery in the company premises and by effective waste management through MUDA.

C. VISION, MISSION AND QUALITY POLICY RAJASHREE CEMENT VISION

Our vision is to be a market leader in cement business and recognized as the benchmark for; Customization Quality consistency Product range Cost competitiveness Employee empowerment

RAJASHREE CEMENT MISSION To become the best cement unit in the country through human and technical excellence. To foster the culture of involvement, participation, team work and innovation To achieve excellence ion all effort and activities by each one of us To produce a premium quality cement and extend best service to its customer To establish a neat clean and pollution free environment Community should perceive us a progressive well professional organization.

QUALITY POLICY Rajashree Cement is committed to serve their customers with timely supply of cement of quality and quantity as per mutually agreed terms. In order to improve the total quality management and performance of the organization, the international quality rating system (IPRS) has been adopted and attained level 6 in the year 1999. Further in this direction six sigma concepts has also been initiated to improve the process efficiencies.

D. PRODUCT PROFILE

The Rajashree Cement manufactures a wide range of premium brands of cement, catering to different needs of customers. Types of Cement Ordinary Portland Cement 43 Grade Ordinary Portland Cement 53 Grade Premium Composite Cement IRST 40 Cement Brand Name Rajashree Cement Birla Plus Birla Plus Rajashree IRST-40 IRST 40

RAJASHREE CEMENT: Rajashree cement is OPC 43 grade cement, which has end strength of 63 MPA. It is positioned in the middle market segment. The product has been used extensively for construction activities in the southern Maharashtra and Karnataka. It enjoys a reputation of giving value for money.

BIRLA SUPER: Birla super is OPC 53 grade cement, is the companys Up-Market product. Birla super has a 28 days compressive strength of 70 MPA. This is one of the finest cements available in the country. It can produce concrete up to M70 grade with ease. It has been observed that, savings up to 10% in steel and up to 20% in cement consumption (in civil construction) can be realized by using Birla Super Cement.

BIRLA PLUS: Birla plus is a Pozzolona Cement that has chloride resistant properties. The product is used all over the world for making mass concrete and in irrigation projects. In India, it is mainly used in non structural applications market. It is equivalent to the 53 grade cement and has similar properties excepting that it has a marginally slower setting time. This fly ash based cement is used for high raise construction, as it can be pumped with care and has convenient workability. IRST 40:

Rajashree OPC 53 S is a special cement used for making railway sleepers. It is a special category of cement that has very high blains. It helps in producing most durable concrete. Packing Design High Density Polythene (HDP) Paper

Weight 50 Kg Net per Bag Specification bureau of international standard as per quality system of ISO 9001:2000 E. AREA OF OPERATION Area of Operation & Production One of the main reasons for tremendous success of Rajashree Cement (A Unit of

Quality

Grasim Industries Ltd) in the Indian market is the spread of business across the six highly industrialized states in both western and southern regions. Karnataka Maharashra Andhra Pradesh Goa

F. OWNERSHIP PATTERN The Rajashree Cement (A unit of Grasim Industries Ltd) is owned and executed by Aditya Birla Groups under the chairmanship of Mr. Kumar Mangalam Birla.

BOARD OF DIRECTORS: Mr. Kumar Mangalam Birla (Chairman) Mrs. Rajashree Birla Mr. M.L. Apte Mr. B.V. Bhargava Mr. R.C. Bhargava

Mr. S.B. Mathur Mr. Cyril Shroff Mr. S.G. Subramanyam Mr. Shailendra K. Jain (Whole Time Director) Mr. D.D. Rathi (Whole Time Director & CFO)

G. COMPETITORS INFORMATION Rajashree cement is facing competition from the following cement manufacturing companies; ACC Limited, Wadi Gujarat Ambhuja Shree Cements JP Revas Other MNCs (Lafarge Cement)

RAJASHREE CEMENT 1989-1994: State and Regional level Mines Safety award for five consecutive years from 1989-1994. 1990 : National award from NCBM, for Meritorious Performance in Electrical Energy Efficiency in 1989-90. 1991 : Conservationist Award in recognition of outstanding achievement in the conservation of energy and metal resources by EWAC Institute and Larsen & Tourbo Ltd. 1993 : Award for outstanding contribution towards the Growth of Industry by Hyderabad Karnataka Chambers of Commerce. 1993 : Rajiv Gandhi National Quality Award Commendation certificate for efforts and commitment to quality in the field of Chemical Industry. 1993 : ISO 9002 Certification.

1994 :

Jawaharlal Nehru memorial national award for energy conservation for effective implementation of energy conservation methods during 1993-94.

1995 :

Jamaal Bajaj Uchit Vyavahar Puraskar Trophy from Council of Fair Business Practices, for addressing customers complaints quickly and achieving customer satisfaction.

1997 : 1998 :

NCQC: Quality Circle Award. Aditya Birla award for technical excellence and innovation. 2nd AV Birla Planet Award for Technological Innovation (Alteration in Raw Mix). Environmental Management System (EMS) ISO 14001. International Quality Rating System (IQRS) Level - 5 Certification Ramakrishna Bajaj National Quality Award Commendation. Certificate International Quality Rating System (IQRS) Level -6 Certification. Chairmans award for manufacturing excellence (WCM) Commendation Certificate. NCBMs Quality Excellence Award Chairmans Award for Manufacturing Excellence (WCM) Bronze Medal. Quality Management System - ISO 9001:2000 Certificate.

1999 :

2000 :

2001 : 2002 :

2003 :

Greentech Award for Environment Management System. NIPM Award for People Involvement. NCBM Quality Excellence Award. Greentech Safety Award.

2004 :

OHSAS 18001 Certification. Social Accountability SA 8000 Certification.

The Cement Manufacturing Process The technology adopted by the company for manufacture of cement is the dry process with suspension mainly because of low fuel consumption, lesser requirement of water and high in production capacity.

Raw Material used; Limestone Iron Ore/Hemadite Alumnus Literate Coal Fly Ash Chemical Gypsum

Stage- I: Mining and Crushing: The limestone is extracted form the earths crust by the process of blasting. After blasting limestone boulders are transported to the crushing chit and crushed to the required size. The crushed limestone is then transported through belt conveyor to the stacker/reclaimer section.

Stage-II: Stacker / Reclaimer: The stacker reclaimer is used for pre blending of crushed limestone. Reclaimer picks up the required quantity of crushed limestone from the stock pile and feeds into the raw mill hopper through belt conveyor. Stage-III: Raw Mix Grinding: There are different hoppers for the storage of crushed limestone, iron ore and Aluminum Late rite. The stored raw materials from the hopper are proportioned and fed to roller press and subsequently to mill for fine grinding of required fineness. The mix containing 93-98% Limestone 3-4% aluminum late rite, 2-3% Hematite and 1-3% fly ash. The

output of the mill grinding is stored in raw meal silo.

Stage-IV: Coal Crushing and Grinding: The coal is fed into the coal crusher from where the crushed coal is stored in the coal stocker and reclaimer. This coal (used as fuel for burning) is crushed, pulverized in vertical roller mill (ball mill and fed into the kiln along with primary on through burner pipe). Stage-V: Clinkerization: From the raw mill silo the material is extracted and conveyed to the pre heater section. The powdered homogenized raw mill from the silo is fed to the kiln passes through pre heaters where raw mill gets partly cocainized and converted into clinker at a temperature of about 1300 14000C in the sintering zone of the kiln. The material is cocainized and heated in pre heater and cocainized by utilizing kiln waste gases and additional coal finding. This partially cocainized material enters into the kiln where the remaining 8% of the calcinations and clinkerization takes place in the kiln and clinker is discharged into the cooler.

Stage-VI: Clinker Cooling / Storage: The clinker from the kiln is cooled in the cooler section and is transported to the clinker stockpile by Deep Pan Conveyor (DPC) from the clinker stock pile, the clinker is transported to cement mill hopper though Deep Bucket Conveyor (DBC).

Stage-VII: Cements Grinding: The clinker and gypsum are stored in the respective hopper. The clinker and gypsum are proportioned and fed to roller press subsequently to ball mill for fine grinding of required fineness. The proportion contains 97-98% of clinker and 2.3% gypsum. The fine ground material is as cement.

Stage-VIII: Packing and Dispatch:

The cement from the mill is transported to storage silo and from there the cement is conveyed to packing plant and is packed in 50kgs bags by rotary packing machine and then directly loaded into trucks/rail rakes and transported to different locations in the country.

FUTURE GROWTH AND PROSPECTS Annual Rural Sports and cultural meet Smooth functioning of Kasturba Gandhi Balika Vidyalaya, Sedam with 100 drop out girls. Cleft lip palate screening and surgical camp Artificial limb camp for physically challenged people Self help group members training for income generation activities Completion of world bank sponsored Jal Nirmal Scheme in villages covering 2 Gram Panchayuat on or before March 2007 Plans to set up new plant to boost of the production

The swot analysis provides information that is helpful in marketing the firms resources and capabilities to the competitive environments in which it operates as such, it is environmental in strategy formulation and selection and it also provides a scale of the internal and external environment of the strategic planning process.

Environmental factors internal to the firm usually can be classified as strength or weakness and those external to the firm can be classified as opportunities or threats such as analysis of strategic environment is referred to as a Swot Analysis. MCKINSEYS 7S MODEL These 7 S are divided as Hard Ss and Soft Ss Hard S s Shared Values Skills Staffs Style Soft Ss Structure Strategy Systems

Seven S formula is a comprehensive guide to analyze two culture and behavior of corporations. Those seven elements are distinguished and so called as Hard S s and Soft S. The hard elements are feasible and easy to identify that they can be found in strategy statements, corporate plans, organizational charts and other documentations.

The four Soft Ss however are hardly feasible, they are difficult to describe since capabilities, values and elements of corporate culture are continuously developing and changing they are highly determined by people at work in the organization, therefore it is much more difficult to plan or to influence the characteristics of the soft elements, although the soft factor are below the surface, they can have great impart of the hard structures, strategies and systems of the organization. Effective organizations achieve a for between these seven elements, it includes the policies and procedures that governs the way in which the organization acts within and in the competitive environment it provides the framework for relationship among different parts of organization.

Structure: Objective: To define roles and responsibilities of all employee in the organization. Career planning and successive planning of employees To analyze the manpower requirements for optimum utilization of human resource To define hierarchy level of authority vertical and horizontal relationship.

ORGANIZATIONAL STRUCTURE UNIT HEAD

FH-CPP FH -Technical FH-Mines FH-Human Resource Personnel & Administration FH-Commercial DH-Electrical DH-QC/R & D Environment DH-Finance & Accounts DH-Materials

DH-Mechanical DH-HEMM Maintenance DH-CPP Operation

DH-CPP Maintenance DH-HR DH-Mines Operation

DH-IR & Legal DH-I T

DH-Security & Administration

DH-Raw Material Handling

DH- Process

DH-T & D Cell Cell

DH-Instrumentation

ACCOUNTS DEPARTMENT UNIT HEAD

FUNCTIONAL HEAD (F&C)

DEPARTMENT HEAD (F & A)

MIS SH- Excise, Legal, Banking & Taxation

SH- Stores & Spares & Pay Roll Accounting SH-Contracts, Raw Material & Block A/c

Support Staff 2 Support Staff 1 Coordinators Support Staff 2 Support Staff 1 Coordinators Support Staff 2 Support Staff 1 Coordinators Support Staff 2 Support Staff 1 Coordinators

Strategy: Strategy means those course of action that a company plans response to or in anticipation of its competition and changing external environment. In order to become the first choice of customers globally the Aditya Birla Group (Cement Manufacturing Units) is pursuing several initiatives under the generic terms World Class Manufacturing to improve its performance under quality, cost, delivery innovation and productivity leading to enhance customer satisfaction.

The WCM is all eight dimensional programmed enshrine the basic philosophic of TPM, TQM, ISO 9000, BPR and change initiatives.

WCM enables the companies to aim at zero abnormalities, zero defects, zero pollution, zero losses, zero break down and zero customer complaints through a cultural transformation program aiming to zero abnormality in all the business processes.

WCM is a structured 17 steps programmed that covers are employees, equipments and areas under the laser if WCM, the employees are empowered to undertake the

improvement initiatives and achieve a sustainable superior performance with a focus on quality, cost , delivery, innovation and productivity, the companies acquire competencies that are necessary too meting the competitive. Changes of tomorrow WCM programmed gears the individual to operate in team based structures that innovate and improve continues.

The unit adopting WCM programmers are regularly developing and continuously updating a deep understanding of their customers present and future needs this competitive advantage also lies in having the best technology and superior processes too designing and manufacturing selling their products at the lowest cost in these endeavors WCM is the major deriving force.

System: Rajashree Cements commitment to manufactures and supply clinker and cement of consistent quality to customer, for their total satisfaction by implementation of management systems of quality, environment, energy, occupational, health and safety and ethical consideration in all their manufacturing.

a) Environment Management System: (ISO 14001: 1996)

The purpose of EMS is to meet the environment issues and to have better control over it. It also helps to meet the government legislation, customer demand and social pressure resulting from environment aspects.

Benefits: Control of environment problem Financial gains through waste management Improved investors Good regulatory compliance

Principles: The following are the 5 principles that are to be implemented effectively for improving EMS. Commitment and Policy Planning Implementation Measurement and Evaluation Review and Implementation

b) QUALITY MANAGEMENT SYSTM: ISO International Organization for Standardization (ISO-9000) Standards to guide and audit a companys quality management practices. Documents and records issued by international standards organization (ISO) in Geneva in 1987.

Purpose of ISO: The purpose of ISO-9000 systems is to understand clearly the customer requirements and integrate the various functional departments to ensure that the final product/service fully meets the contractual requirements. SA 8000 SINCE 2004 SA 8000 Social Accountability:

SA -8000 standard social accountability standard published by CEPAA in 1977 and guidelines published in 1999.

(CEPAA- Council on Economic Priorities Accreditation Agency now named as Social Accountability International) Aims of SA 8000 Promotes continues improvement of work place conditions

Shared Value: Shared Value refers to a set of values and aspirations that go beyond the conventional formal statement of corporate objectives, their goals are the fundamental basement upon which a business is built.

Culture of an organization is usually determined by the sum of value and belief which is followed by all the members of organization for accomplishing the goals and objectives efficiently and effectively.

Shared Values of Rajashree Cement which is followed by all its employees are as followers Integrity : Honesty in every action Commitment Delivery on the promise Passion Energized action Seamlessness Boundaryless in letters Speed one step ahead always

SWOT ANALYSIS SWOT Analysis of Rajashree Cements: The SWOT analysis provides information that is helpful in matching the firms resources and capabilities to the competitive environment in which it operates as such, it is instrumental in strategy formulation and selection and it also provides a scan of the internal and external environment of the strategic planning process.

Environmental factors internal to the firm usually can be classified as strength or weakness and those external to the firm can be classified as opportunities or threats such an analysis of strategic environment is referred to as SWOT Analysis.

Strength: Dynamic and round leadership support by highly qualified, cultivated, committed and charged team of officers and staff with full of professional approach and industrials work force. Use of state of the art equipments and technology certified with ISO 9001: for quality systems and ISO 14001 for environment management system. Coal based captive power plant of capacity 58.2 MW by product of which (Fly Ash) can be used as raw materials in cement manufacturing. It is only a cement plant integrated with a Captive Coal Washery System Manufacturing a variety of cements catering to different segments.

Rajashree Cement : Residential and Commercial construction.

Birla Super cement: Multistoried building, dams and bridges Construction. Birla Mass: Mars concrete laying irrigation projects and Non structural application. IRST 40 : Making Railway Sleeper.

Facilitated with good logistics facility, well connected by Road and railway for early transport of product to different locations in the country. Ranks first in the country for the introduction of 53 grade Birla Super cement (up market product) which helped in saving up to 10% in steel and up to 20% in cement consumption (in civil construction in the country).

Rajashree cements limestone mine is one of the largest single location mines in India spread over all area of 1800 acres. Strong brand image and excellent marketing support and customer acceptance.

Corporate social responsibility in the name of Kagina Jan Seva Trust to serve develops the nearby villages and society.

WEAKNESS Stimulating and retaining young talent is a challenging task due to tremendous opportunities in metros. Difficulty to obtain skilled workers which in turn increases cost of training for imparting skills to workers.

OPPORTUNITIES: Cement industry is one of the main beneficiary of the infrastructure boom, as it has a tremendous opportunity to supply cements in southern region of country viz Karnataka, Andhra Pradesh, Maharashtra for infrastructure development which inturn acts as a sector to attract foreign investment.

THREATS: Increased transportation cost due to loading recreation and increasing fuel prices. Increasing coal prices and shortage of coal in the country (estimated to be over in million tones) which is main material for producing current in the power plant of the cement companys.

4. ANALYSIS AND INTERPRETATION OF DATA CALCULATION OF RATIOS CURRENT RATIO: The current ratio is the ratio of total current asset to total current liabilities. It is

calculated by dividing current assets by current liability. The standard Current Ratio is 2:1.

Current Ratio =

Amount in Crores SL. NO. Year Current Assets Current Liabilities 1 2 3 4 5 6 2004 2005 2006 2007 2008 2009 1496.01 1853.93 2026.76 2342.39 2959.07 3097.84 1217.81 1238.49 1473.02 1610.26 2497.08 2876.56 1.22 1.49 1.37 1.45 1.18 1.07 Ratio

(Sources Annual Report of Grasim Industries Limited) From the table it is clears that the company is maintaining current ratios of 1.22, 1.49, 1.37, 1.45, 1.18 and 1.07 in the year 2004, 2005, 2006, 2007, 2008 and 2009 respectively.

GRAPH SHOWING CURRENT RATIO

QUICK RATIO OR ACID TEST RATIO

The usefulness of the ratio lies in the fact that it is widely accepted as the best available test of the liquidity position of a firm. The standard ratio is 1:1.

Quick Ratio = (Amt in Crores) SL.NO. Year Quick Assets Current Liabilities 1 2 3 4 5 6 2004 2005 2006 2007 2008 2009 1036.55 1175.34 1276.03 1518.25 1980.64 1719.6 1217.81 1238.49 1473.02 1610.26 2497.07 2876.56 0.85 0.94 0.86 0.94 0.79 0.59 Ratio

It is clear from the table that the acid test ratio was lower than the standard. In the year 2004, 2005, 2006, 2007 and 2008 the ratios were 0.85, 0.94, 0.86, 0.94, 0.79 and 0.59 respectively. This decrease is only because of changes in provisions.

GRAPH SHOWING QUICK RATIO OF ACID TEST

GROSS PROFIT RATIO

Gross Profit Ratio is the percentage of gross profit towards the sales. It determines what amount of gross profit company has obtained towards its sales. Gross Profit Ratio =

(Amt in Crores) SL. NO. 1 2 3 4 5 6 Year 2004 2005 2006 2007 2008 2009 Gross profit 1321.50 1682.93 1687.43 2452.79 3280.85 2712.37 Sales 6129.95 7201.06 7607.20 9572.71 11551.56 12072.67 Ratio (in %) 21.55 23.37 22.18 25.62 28.40 22.46

(Sources: Annual report of Grasim Industries Limited) The table showing the gross profit ratios which were in the year 2004 was 21.55 and then started rising during 2005, 2007& 2008 as 23.17, 25.62 & 28.40 and in the year 2006 the ratio fall to 22.18 from 23.37.

GRAPH SHOWING GROSS PROFIT RATIO

NET PROFIT RATIO Net profit is the ratio of net towards sales. The net profit margin is indicative of managements ability to operate the business with sufficient success not only to recover from revenue of the period the cost of the merchandise are services. Net Profit Ratio = (Amt inCrores) SL.NO. 1 2 3 4 5 6 Year 2004 2005 2006 2007 2008 2009 Net profit 1077.26 1361.36 1201.90 2189.26 2964.22 2247.84 Sales 6129.95 7201.06 7607.20 9572.71 11551.56 12072.67 Ratio (in %) 17.57 18.90 15.73 22.78 25.66 18.62

(Sources: Annual Report of Grasim Industries Limited)

It was found that the Net Profit Ratio were started increasing from 17.57 to 18.90 from the year 2004 to 2005 and suddenly decreased in the year 2006 the ratio is 15.73 and gradually increased to 22.78 in 2007 and to 25.66 in 2008. During 2009 it was 18.62.

GRAPH SHOWING NET PROFIT RATIO

INVENTORY TURNOVER RATIO The ratio indicates how fast the inventory sold a high ratio is good from the view point of the companys liquidity and vice versa.

Inventory Turnover Ratio = (Amt inCrores) SL.NO. Year Cost of Goods Sold 1 2 3 2004 2005 2006 5052.69 5839.70 6436.51 Average Inventory 499.71 569.03 714.66 10.11 10.26 9.00 Ratio

4 5 6

2007 2008 2009

7100.77 6679.65 9360.3

787.43 793.65 823.67

9.01 8.42 11.36

(Sources: Annual Report of Grasim Industries Limited)

The inventory turnover ratio is in an increasing trend off 10:11 and 10.26 during 2004 and 2005 respectively, the company has maintained reasonable amount of stock in the years 2006, 2007, 2008 and 2009 the ratios were 9.00, 9.01, 8.42 and 11.36 respectively.

GRAPH SHOWING INVENTORY TURNOVER RATIO

TOTAL ASSETS TO TURNOVER RATIO

(Amt in Crores) SL.NO. Year Cost of goods sold 1 2 3 4 5 6 2004 2005 2006 2007 2008 2009 6129.25 7201.06 7638.41 9607.97 11551.56 12072.67 Average inventory 6308.56 6936.19 7546.13 9764.15 11949.45 13736.90 0.97 1.03 1.00 0.98 0.96 0.88 Ratio

(Source: Annual Report of Grasim Industries Limited)

The assets of the company are increasing year by year. In the year 2004, 2005, 2006, 2007, 2008 and 2009 the ratios were 0.97, 1.03, 1.00, 0.98 ,0.96 and 0.88 respectively. In the year 2007 and 2008 the ratio has come down to some extent.

GRAPH SHOWING TOTAL ASSETS TO TURNOVER RATIO

DEBT TO EQUITY RATIO The Debt Equity Ratio is an important tool of financial analysis to appraise the financial structure of a firm. The debt equity ratio indicates the margin of safety to the creditors.

Debt Equity Ratio = (Amt in Crores) Sl. No. Year Long Term Debt 1 2 3 4 5 6 2004 2005 2006 2007 2008 2009 2065.23 2008.34 1979.67 2951.56 3.201.87 3394.95 Shareholders Equity 91.67 91.67 91.67 91.69 91.69 91.69 22.52 21.90 21.59 32.19 34.92 37.02 Ratio

(Sources: Annual report of Grasim industries Limited)

The debt equity ratios indicate the margin of safety to the creditors. In the year 2004, 2005, 2006, 2007, 2008 and 2009 the ratios were 22.52, 21.90, 21.59, 32.19, 34.92 and 37.02 respectively.

GRAPH SHOWING DEBT TO EQUITY RATIO

SALES AND CURRENT ASSETS The sales and current assets indicate the assets of the company. When the companys sales are increasing the ratio of sales and current assets also increasing.

Sales and Current Assets = (Amt in Crores) SL.NO. 1 2 3 4 Year 2004 2005 2006 2007 Sales 6129.95 7201.06 7638.41 9607.97 Current Assets 1496.01 1853.93 2026.76 2342.39 Ratio 4.09 3.88 3.76 4.10

5 6

2008 2009

11551.56 12072.67

2959.07 3097.84

3.90 3.89

The Current Assets of the company are increasing year by year. As the assets are increasing the ratios were also increasing. In the year 2004, 2005, 2006, 2007, 2008 and 2009 the ratios were also increasing 4.09, 3.88, 3.76, 4.10, 3.90 and 3.89 respectively. GRAPH SHOWING SALES AND CURRENT ASSETS

DEBTORS TURNOVER RATIO The debtors turnover ratio determines the amount of sales which is sold in credit to the customer net credit sales consists of gross credit sales minus returns if any from customer.

Debtors Turnover Ratio = (Amount inCrores) SL.NO. Year Sales Closing Debtors 1 2 2004 2005 6129.95 7201.06 484.63 522.01 12.64 13.79 Ratio

3 4 5 6

2006 2007 2008 2009

7638.41 9607.97 11551.56 12072.67

413.45 576.48 711.98 559.93

18.47 16.66 16.22 21.56

From the table it has been observed that in the year 2004 the debtors turnover ratio was 12.64 which started continuously rising up to 2006 as 13.79 & 18.47 and then it decreased to 16.66 in 2007 and 16.22 in 2008. In 2009 it was 21.56. GRAPH SHOWING DEBTORS TURNOVER RATIO

Changes in working capital for the year 2004-2005 (Amt in Crores) Particulars 2004 Current Assets Interest accrued on Investment Inventories Sundry Debtors Cash and Bank balance Loan and advances Total Current Assets -459.46 484.63 227.48 324.44 1496.01 1.09 678.59 522.01 86.70 565.54 1853.93 Year 2005

Current Liabilities Liabilities Provision Short Term Loans and Advances Documentary Bills discounted Total Current Liability Net Working Capital Increase in Working Capital 752.10 194.27 243.10 28.34 1217.81 278.20 827.89 280.41 96.66 33.53 1238.49 615.44 337.24

Changes in working capital for the year 2005-2006

Particulars 2005 Current Assets Interest accrued on Investment Inventories Sundry Debtors Cash and Bank Balance Loan and Advances Total Current Assets Current Liabilities Liabilities Provision Short term Loans and Advances Documentary Bills Discounted Total Current Liability Net Working Capital Decrease in Working Capital

Year 2006

1.09 678.59 522.01 86.70 565.54 1853.93

1.46 750.73 413.45 155.58 705.54 2026.76

827.89 280.41 96.66 33.53 1238.49 615.44

969.15 304.22 137.33 62.32 1473.02 553.74 61.70

Changes in Working Capital for the year 2006-2007

Particulars 2006 Current Assets Interest accrued on Investment Inventories Sundry Debtors Cash and Bank balance Loan and Advances Total Current Assets Current Liabilities Liabilities Provision Short term Loans and Advances Documentary Bills Discounted Total Current Liability Net Working Capital Increase in Working Capital

Year 2007

1.46 750.73 413.45 155.58 705.54 2026.76

0.70 824.14 576.48 116.38 824.69 2342.39

969.15 304.22 137.33 62.32 1473.02 553.74

1266.86 183.20 73.54 86.66 1610.26 732.13 178.39

Changes in working capital for the year 2007 & 2008 & 2009

Particulars 2007 Current Assets Interest accrued on Investment Inventories Sundry Debtors Cash and Bank Balance Loan and Advances Total Current Assets

Years 2008

0.70 824.14 576.48 116.38 824.69 2342.39

0.70 978.44 711.98 127.47 1140.49 2959.08

Current Liabilities Liabilities Provisions Short Term Loans and Advances Documentary bills discounted Total Current Liability Net Working Capital Decrease in Working Capital 1266.86 183.20 73.54 866.66 1610.26 732.13 -1604.17 540.21 190.87 161.83 2497.07 462.01 270.12

1. Gross Working Capital Gross working capital represents only current assets. Current assets are those assets which are converted into cash within a period not exceeding one year normally. Such assets are called current assets. Gross working capital points to the arranging of funds to finance current assets.

Structure of Gross working capital of Grasim Industries Limited (Rs. InCrores) Particulars Interest Accured on Investment Inventories Sundry Debtors Cash & Bank balance Loan & 324.44 565.54 705.54 824.69 1140.49 1045.81 767.88 227.48 86.70 155.58 116.38 127.47 113.38 137.83 484.63 227.48 678.59 522.01 750.73 413.45 824.14 576.48 978.44 711.98 1378.24 559.93 849.12 501.85 2004 459.46 2005 1.09 2006 1.46 2007 0.70 2008 0.70 2009 0.48 Avg 0.77

Advances Total 1496.01 1853.93 2026.76 2342.39 2959.08 3097.84 2295.98

Size and Growth of Gross Working Capital Particular 2004 2005 2006 s Size of Gross Working Capital Growth of Gross Working Capital 0 123.92 % 135.47 % 1496.0 1 1853.93 2026.76

2007

2008

2009

Avg

2342.39

2959.07

3097.84

2296

156.57 %

197.79 %

208.05 %

136.96 %

Interpretations Taking the base year as 2004 as 100% the gross working capital was maximum in the year 2008 and the rest of the year ratio are increased from year 1853.93, 2026.76, 2342.39, 2959.07 and average ratio for five years is 2135.63.

Net Working Capital It refers to the difference between current asset and current liabilities are those claims of outsiders which are expected to mature for payments within accounting years and include provision. Short term loans and advances, documentary bills discounted. Net working capital shows positive or negative Net Working Capital = Current Asset - Current Liabilities

GRAPH SHOWING SIZE AND GROWTH OF NET WORKING

Particulars

2004

2005

2006

2007

2008

2009

Current Assets Interest accrued on Investment Inventories Sundry Debtors Cash and Bank balances Loans and Advances Total Current Liabilities Liabilities Provision Short Term Loans and Advances Documentary Bills discounted Total 1217.81 1238.49 1473.02 1610.26 2497.07 2457.89 28.34 33.53 62.32 86.66 161.83 28.29 752.10 194.27 243.10 827.89 280.41 96.66 969.15 304.22 137.33 1266.86 183.20 73.54 1604.17 540.21 190.87 1686.93 590.88 151.79 1496.01 1853.93 2026.76 2342.39 2959.07 3097.84 324.44 565.54 705.54 824.69 1140.49 1045.81 227.48 86.70 155.58 116.38 127.47 113.38 459.46 484.63 678.59 522.01 750.73 413.45 824.14 576.48 978.44 711.98 1378.24 559.93 1.09 1.46 1.70 0.70 0.48

Size and growth of Net Working Capital (Rs. inCrores) Particular s Current Assets 1496.0 1 1853.93 2026.76 2342.39 2959.07 3097.84 2296 2004 2005 2006 2007 2008 2009 Avg

Current Liabilities Size of NWC Growth of NWC -

1217.8 1 278.20

1238.49

1473.02

1610.26

2497.07

2277.81

1719

615.44

553.74

732.13

462.00

820.03

576.83

221.22 %

199.04 %

263.16 %

166.06 %

292.32 %

190.135 %

Interpretations Taking the base year as 2004 as 100% the net working capital was maximum in the year 2007 the ratio are 263.16% and rest of the year with decreased rates 221.22%, 199.045, 166,06% average ratio for these four years ratio is 189.89%.

GRASIM CEMENT INDUSTRIES LIMITED PROFIT AND LOSS A/C LAST FOUR YEARS (Rs. In crores)
Particulars Income Sales Interest and 9607.97 10215.05 113.27 165.77 10804.01 159.04 4290.63 10.88 13209.91 122.34 2006-07 2007-08 2008-09 2009-10 2010-11

Dividend Income Other Income Increase / Decrease in Stock Total Expenditures Raw Materials Consumption Manufacturing Expenses Purchase of Finished and other product Payment to and Provision for Employees Selling, Distribution, Administration and other expenses Excise Duty Interest Depreciation Net Profit Total 1004.38 111.84 317.91 2189.26 ----------107.00 353.27 2964.22 ------------- --------------------142.14 456.97 2247.84 11231.4 4388.97 13558.42 87.06 213.12 ----------------277.11 765.73 1505.69 1701.73 1920.29 1120.97 3597.91 459.4 550.07 598.17 198.62 666.50 321.16 97.40 65.94 53.14 122.18 1744.33 2196.85 2735.80 1245.18 4547.98 2219.32 2828.93 3064.25 535.61 1805.33 9873.29 10723.11 11187.97 4388.97 13558.42 168.49 (16.44) 212.07 130.22 191.38 33.54 39.07 48.39 164.33 61.84

9873.29 10723.11

BALANCE SHEET LAST FOUR YEARS Particulars Liabilities Shareholder Funds Share Capital Share Capital Suspense Reserve and Surplus Loan Fund Secured Loans 2006-07 2007-08 2008-09 2009-10 (Rs. InCrores) 2010-11

91.69 0.02 6138.35 2206.31

91.69 4.90 8044.12 2350.40

91.69 10.45 9375.44 2205

85.00 45.84 4452.56 1835.31

274.04 ------10387.22 2789.76

Unsecured Loan Documentary Bills discounted with banks Deferred Payment Credit Deferred Tax Liabilities Total Application of Fund Fixed Assets Gross Block Less Depreciation Net Block Capital Work in Progress Fixed Asset held for Disposal Investment Current Assets, Loans and Advances Interest Accrued on Investment Inventories Sundry Debtors Cash and Bank balances Loans and Advances Total Less Current Liabilities and Provision Liabilities Provision Total Net Current Asset Total

658.59 86.66 -582.55 9764.15 --6770.97 3380.53 3390.44 1192.35 14.33 4274.7 -0.7 824.12 576.48 116.38 824.69 (2342.39

851.47

1189.95 28.29 -864.37 13765.1 --11060.82 3972.54 7088.28 1218.64 0.85 4609.10 -0.48 1378.24 559.93 113.38 1045.81 3097.84

707.51

1354.84

-606.87 11949.45 --6770.90 3380.53 3390.44 1192.35 4.14 4080.79 -0.70 978.44 711.98 127.47 1140.49 (2959.08)

-918.01 8046.75 --9038.70 2585.19 6453.51 392.95 ---------1238.64 --

-1730.05 16540.69 --17942.27 6542.02 11400.25 1105.32 1.22 3730.32 --

772.31 241.52 90.95 611.25 1716.03

1956.52 602.29 144.79 1053.88 3758.70

1266.86 183.20 (1450.06) 892.33 7964.15

1604.17 540.21 2144.38 814.70 11949.45

1686.93 590.88 2277.81 820.03 13736.9

1505.07 249.31 1754.38 (38.35) 8046.75

2880.41 573.49 3453.90 304.80 16540.69

LEARNING EXPERIENCE Studying Mkinseys 7S model with respect to Rajashree Cement gave me a great exposure to learn about the company. I learned about the working of the company during my project.

It was my privilege to be there and learn different things about the company. The Executives and Staff of the company were very much cooperative in helping me out in my project as well as in updating the developments.

I also gained knowledge about the cement manufacturing operations of the company though it was not a part of the project. The HR and Accounts officials were very

cooperative and helpful in every aspect. Here I came to get a close view of the working environment of the corporate world.

My In-plant training in Rajashree Cement was a wonderful and knowledgeable experience in my life. During my in plant training I understand how the top level

management works with participation of lower level management.

At the time of training I came to know How managerial functions work in an organization. What is the importance of maintaining the relationship with the workers. How theoretical concepts are applied in organization practically. How planning, organizing, staffing, leading, controlling, all this management functions in an organization

5. FINDINGS, SUGGESTIONS AND CONCLUSION

5.1. FINDINGS: It is observed that the company is able to maintain a proper working capital. If any increase in sales is contemplated working capital was thus, made available which means it is able to maintain the adequate level of working capital. It is observed that the company is able to maintain a proper proportion of working capital. The company is able to maintain high current ratio as per Indian Bench mark i.e., 1.33

The gross profit ratio shows the organization gross profit is increasing year by year. Fixed assets turnover ratio has been increasing year to year which is a welcome sign. It was found that the inventory turnover ratio is on increasing trend seeing the ideal ratio of the company has maintained reasonable amount of stock in the years.

5.2. SUGGESTIONS The company has been following few methods like liquidity ratio, debt equity ratio etc., and the researcher has suggested to have more new techniques to estimate and manage working capital through regression analysis. It is clear from the inventory turnover ratio that major parts of funds have been invested in stores and spares. It is suggested to have minimum inventory and thus can reduce the Working Capital Cost. The sales of company are increasing year by year. Though there is a cut throat competition, the sales are in an increasing trend. It is because of good quality of products at reasonable prices and customer satisfaction. It is suggested to keep and adopt the same policy in future too.

5. CONCLUSION Working capital management plays a vital role in keeping the business enterprise running and it is concerned with short term financial decision. Lack of efficient and effective utilization of working capital leads to earn not only low rate of return on capital employed but also will lead to even sustain losses which in turn will compel foe even closure of business.

BIBLIOGRAPHY

BOOKS: Financial Management Year 1999 By Khan and P.K.Jain, 3rd Edition, Tata Mc. Graw Hill, New Delhi. Page No: 4.1-4.18; 15.2-15.4; 16.1-16.6 Financial Management Year 2003 By Prasanna Chandra, 6th Edition Tata Mc. Graw Hill, New Delhi Page No:18.2-18.7 Financial Management Year 2003 By A.M.Pandey, Eighth Edition, Vikas Publishing House Pvt Ltd., Page No: 809, 817-819 WEBSITES: www.grasim.com www.adithyabirla.com Google search Wikepedia

SOURCES: Annual Reports of Grasim Industries Limited.