TABLE OF CONTENT

PAGE NO. CONTENT PAGE NO.

1. TABLE OF CONTENT 1
2. J .K. CEMENT PROFILE 2
3. INTRODUCTION OF JK 3-5
4. INDUSTRY ANALYSIS 6-7
5. Major Players in the Indian Cement Industry 8-12
6. OBJECTIVE, SCOPE & PURPOSE OF STUDY 13
7. PLANT AND CAPACITY 14-20
8. PRODUCTION CYCLE 21-22
9. WORKING CAPITAL MANAGEMENT 23-31
10. FUND BASE LI MIT 32-33
11. NON FUND LIMIT
a. LATTER OF CREDIT 33-39
b. BANK GUARANTEE 40
c. FORWARD COVER 41
d. BUYER CREDIT 42-44
12. FDR (FIXED DEPOSIT) 45-46
13. INTER CORPORATE DEPOSIT (ICD) 47-48
14. IMPORT BILL 49-51
16. RATIO ANALYSIS WITH COMPARE OTHER 52-61
COMPANY
17. CONCLUSION 62
18. RECOMMENDATIONS 63
19. KEY LEARNINGS 64
20 REFERENCES 65

1
 J .K. CEMENT PROFILE

COMPANY PROFILE OF J.KCEMENT LTD

Date of incorporation 24-Nov-1994

Date of Listing 14-Mar-2006
MANAGEMENT
Name Designation
Yadupati singhania Chairman&Managing Director
K B Agarwal Director
Suparas Bhandari Director
Shyam Lal Bansal Director
Raj Kumar Lohia Director
Paul Heinz Hagentobler Director
Kailash Nath Khandewal Director
Jayant Narayan Godbole Director
Achintya Karati Director
Sushila Devi Singhania Director
Registered Office Address
Kamla Tower, 208001,Kanpur,Utter Pradesh, India

2
 INTRODUCTION OF JK
J.K. Cement is an affiliate of the J.K. organization, which was founded by Lal Kamlapat
singhania. The JK Organization is an association of industrial and commercial companies and
has operation in a broad number of industries.

JK’s cement operations commenced production in May 1975 at their first plant at Nimbahera in
the state of Rajasthan.

J K Cement Limited (JK Cement) is one of the largest cement manufacturers in Northern India
and also the second largest white cement manufacturer in India by production capacity. It is also
the second largest producer of Wall putty in the country. The Company produces 53-grade 43-
grade and 33-grade Ordinary Portland Cement (OPC) grey cement Portland Pozzolana Cement
(PPC) under grey and white cement.

J.K. Cement ltd is an affiliate of the multi-disciplinary industrial conglomerate J.K. Organization
and is one of the largest cement and building product manufacturers in India with a diversified
product portfolio, consistently growing capacity and a strong national and international presence.
It has an installed grey cement capacity of 10.5 MTPA. It is the second largest manufacturer of
white cement in India with an annual capacity of 600,000 tonnes in India. With an annual
installed capacity of 500,000 tonnes, it is also the second largest producer of wall putty in India.
It has seven high quality plants, six of which are in India and one in UAE. All the plants in India
are equipped with captive power facility to be self-sufficient in power requirements. These plants
are in close proximity to high-quality limestone assets, with long economic life. The company
plans to increase the production of wall putty by putting a plant with a capacity of 6 lakh tonnes
at Katni in Madhya Pradesh.

3
 Range of products manufactured

Ordinary Portland cement (OPC)

Portland Pozzolana Cement (PPC)

4
 GEOGRAPHICAL DISTRIBUTION IN INDIA

Industry analysis:

Introduction
India is the second largest producer of cement in the world. No wonder, India's cement industry
is a vital part of its economy, providing employment to more than a million people, directly or
indirectly. Ever since it was deregulated in 1982, the Indian cement industry has attracted huge
investments, both from Indian as well as foreign investors. India has a lot of potential for
development in the infrastructure and construction sector and the cement sector is expected to
largely benefit from it. Some of the recent major initiatives such as development of 98 smart

5
cities are expected to provide a major boost to the sector. Expecting such developments in the
country and aided by suitable government foreign policies, several foreign players such as
Lafarge-Holmic, Heidelberg Cement, and Vicat have invested in the country in the recent past. A
significant factor which aids the growth of this sector is the ready availability of the raw
materials for making cement, such as limestone and coal.

Market Size
The housing and real estate sector is the biggest demand driver of cement, accounting for about
65 per cent of the total consumption in India. The other major consumers of cement include
public infrastructure at 20 per cent and industrial development at 15 per cent. India’s total
cement production capacity is nearly 455 million tonnes, as of 2017-18. Cement consumption is
expected to grow by 4.5 per cent in FY19 supported by pick-up in the housing segment and
higher infrastructure spending. The industry is currently producing 280 MT for meetings its
domestic demand and 5 MT for exports requirement. The Indian cement industry is dominated
by a few companies. The top 20 cement companies account for almost 70 per cent of the total
cement production of the country. A total of 210 large cement plants account for a cumulative
installed capacity of over 350 million tonnes, with 350 small plants accounting for the rest. Of
these 210 large cement plants, 77 are located in the states of Andhra Pradesh, Rajasthan and
Tamil Nadu.

Investments
On the back of growing demand, due to increased construction and infrastructural activities, the
cement sector in India has seen many investments and developments in recent times.
According to data released by the Department of Industrial Policy and Promotion (DIPP), cement
and gypsum products attracted Foreign Direct Investment (FDI) worth US$ 5.25 billion between
April 2000 and December 2017.
Some of the major investments in Indian cement industry are as follows:

 In May 2018, Ultratech Cement decided to acquire the 13.4 MTPA capacity cement
business of Century Textiles and Industries.

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  JK Cement is planning to invest Rs 1,500 crore (US$ 231.7 million) over the next 3 to 4
years to increase its production capacity at its Mangrol plant from 10.5 MTPA to 14
MTPA.

Government Initiatives
In order to help the private sector companies thrive in the industry, the government has been
approving their investment schemes. Some such initiatives by the government in the recent past
are as follows:
In Budget 2018-19, Government of India announced setting up of an Affordable Housing Fund
of Rs 25,000 crore (US$ 3.86 billion) under the National Housing Bank (NHB) which will be
utilized for easing credit to homebuyers. The move is expected to boost the demand of cement
from the housing segment.

INDIAN CEMENT OUTLOOK

CENENT DEMAND in India is likely to grow about 4.5 per cent in 2018-19 on the back of pick-
up in housing segment, and higher infrastructure spend, rating agency ICRANSE -1.34 % said
today.

Domestic cement production during April-December 2017-18 stood at 216.5 million metric
tonne (MMT), higher by 2.7 per cent compared to 210.8 MMT during the same period of
previous financial year.

7
For the ongoing fiscal, ICRA said, demand is expected to grow around 3 per cent based on
current trends as in December 2017, production increased 8.4 per cent month-on-month to 26.3
MMT.

"This demand growth is bolstered by a pick-up in the housing segment primarily affordable
housing, rural housing and higher infrastructure spend," ICRA Senior VP and Group Head
Sabyasachi Majumdar said.

He further said improved rural incomes, higher rural credit and increased allocation for rural,
agriculture and allied sectors are likely to boost rural housing demand.

Major Players in the Indian Cement Industry

List Of Top 10 Largest Cement Companies in India

1. UltraTech Cement – ‘The Engineer’s Choice’

UltraTech Cement is the India’s largest and amongst the World’s top cement manufacturers. The
company has the presence in five countries. The total operation includes 11 integrated plants, one
white cement plant, one clinkerisation plant, 15 grinding units, two rail and three coastal
terminals, and 101 ready mix concrete (RMC) plants. Additionally, the company is the
largest clinker exporter in India.

Establishment: 1987

Headquarter: Mumbai

Website: https://www.ultratechcement.com/

2. Shree Cements

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Shree Cements is a trusted brand in India, mainly in the northern and eastern part of the country.
Currently, the company has the manufacturing operations over North and Eastern India across
six states. Additionally, the company is popular as one of the most efficient and environment-
friendly companies in the global cement industry.

Establishment: 1970

Headquarter: Bangur Nagar, Ajmer, Rajasthan

Website: http://shreecement.in/

3. Ambuja Cements

Ambuja Cements is one of the most popular brands in the western India. The company was
formerly known as Gujarat Ambuja Cement Limited. Basically, it is a major cement producing
company in India. Now, the company is a part of the global conglomerate LafargeHolcim.
Currently, Ambuja Cement has a cement capacity of 29.65 million tons with five integrated
cement manufacturing plants and eight cement grinding units across the country.

Establishment: 1983

Headquarter: Mumbai

Website: http://www.ambujacement.com/

4. ACC

ACC Limited is India’s one of the largest manufacturers of cement and ready mixed concrete.
The company has 17 modern cement factories and more than 50 ready mixed concrete
plants. ACC has a unique track record of innovative research, product development, and
specialized consultancy services. Basically, ACC is the first cement company in the country to
start Bulk Cement, especially for large consumers.

Establishment: 1936

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Headquarter: Mumbai, Maharashtra

Website: http://www.acclimited.com/

5. Binani Cement

Binani Cement is the flagship company of the Braj Binani Group. Basically, the company
produces ‘Ordinary Portland Cement’ (OPC) and ‘Pozzolana Portland Cement’ (PPC) under the
Binani brand. Additionally, the company enjoys premium status amongst major Indian cement
brands with a significant market share in northern and western India.

Establishment: 1996

Headquarter: Mumbai

Website: http://binaniindustries.com/

6. Ramco Cements – Super grade

Ramco Cements was founded as Madras Cement. Companies’ flagship product Ramco Grade is
the most trusted cement brand in South India. The company has 5 cement plants, 4 Grinding
Plants, 1 Packing Plants, 1 Ready Mix Concrete Plant and 1Dry Mortar Plant spread across the
country.

In addition to that, the company is the fifth largest cement producer in the country. Company’s
product range includes Portland cement, Ready Mix Concrete, and Dry Mortar products.

Establishment: 1957

Headquarters: Chennai

Website: http://www.ramcocements.in/

7. OCL India

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Sjt. Jaidayalji Dalmia, an industrialist of the farsighted vision set up a cement plant at the request
of the government of Odisha to manufacture super grade cement for use in the construction of
Hirakud dam. The company is popular for producing one of the most prestigious brands
“Konark”.

Establishment: 1950

Headquarter: Rajgangpur (Odisha)

Website: http://www.ocl.in/

8. Birla Corp

Birla Corporation Limited is an Indian-based flagship company of the M P Birla group of

companies. The Cement Division of Birla Corporation Limited has seven plants. All the cement
plants are ISO 9001:2000 Certificate, covering the entire range of production and marketing.
Some of the most popular cement brands are Samrat, Khajuraho, Chetak, and Birla Premium
cement.

Establishment: 1919

Headquarter: Kolkata, West Bengal

Website: https://www.birlacorporation.com/

9. J. K. Cement

J. K. Cement Company is extensively in the manufacturing and distribution of cement as well as

cement based products. The company was founded by Lala Kamlapat Singhania. The Company
is the second largest manufacturer of white cement and wall putty in India. Actually, the
company has the annual production capacity of 600,000 tons and 700,000 tons respectively in
India.

Establishment: 1975

11
Headquarter: Kanpur

Website: http://www.jkcement.com/

10. India Cement

India Cements Limited was founded by two men, Shri S N N Sankaralinga Iyer and Sri T S
Narayanaswami. This is one of the most popular cement companies in the southern India. From a
two plant company having a capacity of just 1.3 million tons in 1989, the company has robustly
grown in the last two decades. Presently, the company has a total capacity of 15.5 million tons
per annum. It has 7 integrated cement plants in Tamil Nadu, Telangana and Andhra Pradesh, one
in Rajasthan and two grinding units, one each in Tamil Nadu and Maharashtra.

Establishment: 1946

Headquarters: Chennai, Tamilnadu

Website: http://www.indiacements.co.in/

OBJECTIVE, SCOPE & PURPOSE OF STUDY

The objectives of this project were mainly to study the fund base & non fund base working
capital, inventory, cash and receivable at JK CEMENT LIMITED, but there are some more and
they are-

 The main purpose of our study is to render a better understanding of the concept
“Working Capital Management”.

 To understand the planning and management of working capital at “JK CEMENT

LIMITED”.

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  To measure the financial soundness of the company by analyzing various ratios.
 My Project Report mainly focuses on “Working Capital”.
 My Project study also focuses on the main point that the basic objective of
the company.

 To ensure smooth & efficient working of a department.

 To promote individuals and collective, morals a sense of responsibilities, regarding
best utilization of resources.

 To develop the different sources of finance.

 To know the financial position of the company.
 Stability & growth.
 Development & Promotion of funds in the organization.
 To focus on Importance of financial analysis. It helps to achieve goals of organization.
 To understand the effectiveness of financial activity of JK cement Limited.
 To Compare the Assets and Liabilities of the company.
 To know about the trend of profits and sales of the company
 This project will be a learning device for the finance student.
 Through this project I would study the various methods of the working capital
management.

PLANT AND CAPACITY

 Nimbahera (Rajasthan)
Commence commercial production in 1975 with an initial capacity of 0.3 MnTPA. In
the year 1979, a second production line was added to enhance the production capacity to
0.72 MnTPA. 1982 witnessed the incorporation of another production line taking the
production capacity to 1.14 MnTPA. In 1988 a pre calciner was installed and the

13
 production capacity touched 1.54 MnTPA. Constant modernization and upgrading was
instrumental in bringing the plant to its present capacity of 3.25MnTPA.

Figure 1Nimbahera

 Mangrol (Rajasthan)

Commence commercial production in December 2001 with a capacity of 0.75MnTPA. In

integrated plant with 1.5 MnTPA cement grinding capacity. Total present capacity 2.25 MnTPA.

14
Figure 2mangrol

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  Gotan (Rajasthan)

We were the first White Cement facility in India, which was limestone based, and manufactured
Cement through the dry process. The White Cement plant was commissioned in 1984 at Gotan,
Rajasthan, with an initial production capacity of 50,000 tons.

Figure 3 gotan

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 Muddapur (Karnataka)

It is situated near Muddapur village of taluka - Mudhol, District - Bagalkot (Karnataka) and has
the latest state of art technology to manufacture 3.0 Million tonnes of cement per annum. The
commercial production at Muddapur started in September, 2009 and the dispatch commenced in
October, 2009

Figure 4 Muddapur

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  Jharli (Haryana)

J K Cement starts commercial production at Jharli unitWith grey cement grinding capacity of
1.5 mtpaJ K Cement announced that the commercial production of the JK Cement Works,
Jharli, a unit of the Company having grey cement grinding capacity of 1.5 million ton per
annum located at Vill: Jharli, Dist. Jhajjar, Haryana has commenced.

Figure 5Jharli

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 Fujairah (USE)

JK Cement Ltd. has formed a wholly owned subsidiary namely JK Cement (Fujairah) FZC and
step down subsidiary JK Cement Works (Fujairah) FZC in the Free Zone of Emirate of Fujairah,
UAE for setting up a dual process White cum Grey Cement plant with an installed capacity of
0.6 million tons per annum White Cement or 1.0 million tons per annum Grey Cement.

The production of White Cement has started and the first dispatch was done on 3rd March 2014.
The quality of the product has been well accepted in the market and registration formalities for
sale in various countries is being carried out

Figure 6 Fujairah

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PLANT CAPACITY TOTAL CAPACITY

GREY CEMENT MTPA

1.NIMBAHERA 3.25
2.MANGROL 0.75(OLD)
1.50(NEW)
3.GOTAN 0.50
4.MUDDAPUR 3.00
5.HARAYANA 1.50 10.50MTPA

WHITE CEMENT MTPA

GOTAN 0.60
FUJAIRAH 0.60 1.20MPTA

WHALL PUTTY
GOTAN 0.50 0.50MPTA

THERMINAL POWER MW
PLANT
GOTAN 7.50
NIMBAHERA 15(Bamanla)
20
MUDDAPUR 50 92.50MW

WASTE HEAT MW
RECOVERY
NIMBAHERA 13.20 13.20

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 PRODUCTION CYCLE

 Raw Material
 Finished Goods
 Sales
 Debtors
 Cash

Raw
material

Finished
Cash
Goods

Dedtors Sales

This working capital cycle can be described in the following words. If the company has a certain
amount of cash, it will be required for purchasing the raw material though some raw material
may be available on credit basis. Then the company has to spend some amount for labor and
factory overheads to convert the raw material in work in progress, and ultimately Finished goods.
These finished goods when sold on credit basis get converted in the form of sundry debtors.
Sundry debtors are converted in cash only after the expiry of credit period. Thus, there is a cycle
in which the originally available cash is converted in the form of cash again but only after
following the stages of raw material, work in progress, finished goods and sundry debtors. Thus,
there is a time gap for the original cash to get converted in form of cash again. Working Capital
needs of company arise to cover the requirement of funds during this time gap, and the quantum

21
of working capital needs varies as per the length of this time gap. Thus, some amount of funds is
blocked in raw materials, work in progress, finished goods, sundry debtors and day-to-day
requirements. However some part of these current assets may be financed by the current
liabilities also. E.g. some raw material may be available on credit basis; all the expenses need not
be paid immediately, workers areal so to be paid periodically etc. But still the amounts required
to be invested in these current assets is always higher than the funds available from current
liabilities. This is precise reason why the needs for working capital arise

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 WORKING CAPITAL MANAGEMENT

MEANING OF WORKING CAPITAL-

Capital required for a business can be classified under two main categories via,

1) Fixed Capital

2) Working Capital

Every business needs funds for two purposes for its establishment and to carry out its day- to-day
operations. Long terms funds are required to create production facilities through purchase of
fixed assets such as, land, building, furniture, etc. Investments in these assets represent that part
of firm’s capital which is blocked on permanent or fixed basis and is called fixed capital. Funds
are also needed for short-term purposes for the purchase of raw material, payment of wages and
other day – to- day expenses etc.

These funds are known as working capital. In simple words, working capital refers to that part of
the firm’s capital which is required for financing short- term or current assets such as cash,
marketable securities, debtors & inventories. Funds, thus, invested in current assets keep
revolving fast and are being constantly converted in to cash and these cash flows out again in
exchange for other current assets. Hence, it is also known as revolving or circulating capital or
short term capital.

CONCEPT OF WORKING CAPITAL

There are two concepts of working capital:

1. Gross working capital

2. Net working capital

The gross working capital is the capital invested in the total current assets of the enterprises
current assets are those

23
 Assets which can convert in to cash within a short period normally one accounting year.

CONSTITUENTS OF CURRENT ASSETS

1) Cash in hand and cash at bank

2) Bills receivables

3) Sundry debtors

4) Short term loans and advances.

5) Inventories of stock as:

a. Raw material

b. Work in process

c. Stores and spares

d. Finished goods

6. Temporary investment of surplus funds.

7. Prepaid expenses

8. Accrued incomes.

9. Marketable securities.

In a narrow sense, the term working capital refers to the networking. Net working
capital is the excess of current assets over current liability, or, say:

24
 NET WORKING CAPITAL = CURRENT ASSETS – CURRENT LIABILITIES.

Net working capital can be positive or negative. When the current assets exceeds the
current liabilities are more than the current assets. Current liabilities are those
liabilities, which are intended to be paid in the ordinary course of business within a
short period of normally one accounting year out of the current assets or the income
business.

CONSTITUENTS OF CURRENT LIABILITIES

1. Accrued or outstanding expenses.

2. Short term loans, advances and deposits.

3. Dividends payable.

4. Bank overdraft.

5. Provision for taxation, if it does not amount to appropriate of profit.

6. Bills payable.

7. Sundry creditors.

The gross working capital concept is financial or going concern concept whereas net working
capital is an accounting concept of working capital. Both the concepts have their own merits.

The gross concept is sometimes preferred to the concept of working capital for the following
reasons:

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 CLASSIFICATION OF WORKING CAPITAL

Working capital may be classified in two ways:

 On the basis of concept.

 On the basis of time.

On the basis of concept working capital can be classified as gross working capital and
net working capital. On the basis of time, working capital may be classified as:

 Permanent or fixed working capital.

 Temporary or variable working capital

PERMANENT OR FIXED WORKING CAPITAL

Permanent or fixed working capital is minimum amount which is required to ensure effective
utilization of fixed facilities and for maintaining the circulation of current assets. Every firm has
to maintain a minimum level of raw material, work- in-process, finished goods and cash balance.
This minimum level of current assets is called permanent or fixed working capital as this part of
working is permanently blocked in current assets. As the business grow the requirements of
working capital also increases due to increase in current assets.

TEMPORARY OR VARIABLE WORKING CAPITAL

Temporary or variable working capital is the amount of working capital which is required to
meet the seasonal demands and some special exigencies. Variable working capital can further be
classified as seasonal working capital and special working capital. The capital required to meet
the seasonal need of the enterprise is called seasonal working capital. Special working capital is
that part of working capital which is required to meet special exigencies such as launching of
extensive marketing for conducting research, etc.

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FACTORS AFFECTING WORKING CAPITAL

I. Internal Factors
a) Nature and size of the business
The working capital requirements of a firm are basically influenced by the nature and size of the
business. Size may be measured in terms of the scale of operations. A firm with larger scale of
operations will need more working capital than a small firm. Similarly, the nature of the business
influences the working capital decisions. Trading and financial firms have less investment in
fixed assets. But require a large sum of money to be invested in working capital. Retail stores,
business units require larger amount of working capital, whereas, public utilities need less
working capital and more funds to invest in fixed assets.

b) Firm’s production policy

The firm’s production policy (manufacturing cycle) is an important factor to decide the working
capital requirement of a firm. The production cycle starts with the purchase and use of raw
material and completes with the production of finished goods. On the other hand production
policy is uniform production policy or seasonal production policy etc., also influences the
working capital decisions. Larger the manufacturing cycle and uniform production policy –larger
will be the requirement of working capital. The working capital
Requirement will be higher with varying production schedules in accordance with the changing
demand.

c) Firm’s credit policy

The credit policy of a firm influences credit policy of working capital. A firm following liberal
credit policy to all customers requires funds. On the other hand, the firm adopting strict credit
policy and grant credit facilities to few potential customers will require less amount of working
capital.

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d) Availability of credit
The working capital requirements of a firm are also affected by credit terms granted by its
suppliers – i.e. creditors. A firm will need less working capital if liberal credit terms are available
to it. Similarly, the availability of credit from banks also influences the working capital needs of
the firm. A firm, which can get bank credit easily on favorable conditions, will be operated with
less working capital than a firm without such a facility.

e) Growth and expansion of business

Working capital requirement of a business firm tend to increase in correspondence with growth
in sales volume and fixed assets. A growing firm may need funds to invest in fixed assets in
order to sustain its growing production and sales. This wills, in turn, increase investment in
current assets to support increased scale of operations. Thus, a growing firm needs additional
funds continuously.

f) Profit margin and dividend policy

The magnitude of working capital in a firm is dependent upon its profit margin and dividend
policy. A high net profit margin contributes towards the working capital pool. To the extent the
net profit has been earned in cash, it becomes a source of working capital. This depends upon the
dividend policy of the firm. Distribution of high proportion of profits in the form of cash
dividends results in a drain on cash resources and thus reduces company’s working capital to that
extent. The working capital position of the firm is strengthened if the management follows
conservative dividend policy and vice versa.

g) Operating efficiency of the firm

Operating efficiency means the optimum utilization of a firm’s resources at minimum cost. If a
firm successfully controls operating cost, it will be able to improve net profit margin which, will,
in turn, release greater funds for working capital purposes.

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h) Co-coordinating activities in firm
The working capital requirements of a firm are depend upon the co-ordination between
production and distribution activities. The greater and effective the co-ordinations, the pressure
on the working capital will be minimized. In the absence of co-ordination, demand for working
capital is reduced.
II. External Factors
a) Business fluctuations

Most firms experience fluctuations in demand for their products and services. These business
variations affect the working capital requirements. When there is an upward swing in the
economy, sales will increase, correspondingly, the firm’s investment in inventories and book
debts will also increase. Under boom, additional investment in fixed assets may be made by
some firms to increase their productive capacity. This act of the firm will require additional
funds. On the other hand when, there is a decline in economy, sales will come down and
consequently the conditions, the firm try to reduce their short-term borrowings. Similarly the
seasonal fluctuations may also affect the requirement of working capital of a firm.

b) Changes in the technology

The technological change and development are in the area of production can have immediate
effects on the need for working capital. If the firm wish to install a new machine in the place of
old system, the new system can utilize less expensive raw materials, the inventory needs may be
reduced there by working capital needs.

c) Import policy
Import policy of the Government may also affect the levels of working capital of a firm since
they have to arrange funds for importing goods at specified times.

29
d) Infrastructural facilities
The firms may require additional funds to maintain the levels of inventory and other current
assets, when there is a good infrastructural facility in the company like transportation and
communications.

e) Government policy
The policies of the Government will influence the working capital decisions. If the Government
follows regressive taxation policy, i.e. imposing heavy tax burdens on business firms, they are
left with very little profits for distribution and retention purpose. Consequently the firm has to
borrow additional funds to meet their increased working capital needs. When there is a
liberalized tax policy, the pressure on working capital requirement is minimized. Thus the
working capital requirements of a firm are influenced by the internal and external factors.
Similarly government policies affecting the inputs used can affect working capital decisions.

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 WORKING CAPITAL

WORKING
CAPITAL

NON FUND
FUND BASED
BASED

LATTER OF
CASH CREDIT
CREDIT

WORKING
BANK
CAPITAL TERM
GUARUNTY
LOAN

BANK FORWORD
OVERDRAF COVER

TREASURY
BUYER CREDIT
MANAGEMENT

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WORKING CAPITAL:

A.Fund Based Limits:

Fund Base Limit is a limit in which the Company gets the money from bank or financial
institution in cash.

a. Cash Credit (CC) - To meet working capital requirements of the company the bank gives
the CC limit against the hypothecation of Stock and Debtors. But while deciding the limit,
the bank deducts the Trade Creditors also. Further a monthly stock and debtor’s statement
need to be submitted with the bank showing the position of the stock and aging of the
debtor’s client opens the Cash Credit Account which allows the withdrawal up to the limit
sanctioned by the bank. Bank charges the prevailing interest and other bank charges as per
norms. This facility is sanctioned for a year and need to review at the closing of the year for
renewal subject to the requirement of client.

b. Working Capital Term Loan: Some time the borrower fails to bring immediately its
own contribution as margin while enjoying the working capital limits. In that case the bank
may sanction WCTL which need to be adjusted as soon as possible. It normally carry higher
rate of interest in comparison to working capital limit.

c. Overdraft (OD): An overdraft facility allows you to write chequeS or withdraw cash
from your current account up to the overdraft limit approved. It is a short-term (usually up to
12 months) standby credit facility which is usually renewable on a yearly basis. It is
repayable on demand by the bank at any time.
The overdraft limit is the maximum amount that you can overdraw. You pay interest only on the
amount that you overdraw. Interest is calculated on the daily balance overdrawn and debited to
the account monthly. Any unpaid amounts of interest are added to the overdrawn amount in the
following month. The interest rate on an overdraft account is usually charged at a percentage
over the bank’s prime lending rate, for example, Prime + 3% per annum.
A secured overdraft is one where you pledge an asset to the bank as security. The asset could
include deposits in the bank. If the bank stops your secured overdraft facility and you are unable

32
to repay your debt, the bank has the right to sell your pledged assets to recover what you owe it.
If the proceeds are not enough to recover your debt, you are still liable for the difference.
How does an overdraft work?
Authorized overdrafts are pre-agreed and allow you to go overdrawn (or borrow) up to a certain
limit, normally at a set rate of interest. The way overdrafts are charged is changing: some banks
may charge a monthly or a daily usage fee, which may be instead of interest or in addition to
interest.

It is a tool to aid cash-flow by a bank providing a reserve of easily accessible money to meet any
shortfall in working capital. The facility is usually repayable "on demand" which means
whenever the bank demands. Consequently, it is usually shown as a current liability on the
balance sheet. It may be secured or unsecured.

33
 Non-fund Based Limits:

The credit facilities given by the banks where actual bank funds are not involved are termed as
'non-fund based facilities'

a. Later Of Credit

A letter of credit is a document from a bank that guarantees payment. There are several types of
letters of credit, and they provide security when buying and selling.

 Seller protection: If a buyer fails to pay a seller, the bank that issued a letter of credit
will pay the seller if the seller meets all of the requirements in the letter. This provides
security when the buyer and seller are in different countries.
 Buyer protection: Letters of credit can also protect buyers. If you pay somebody to
provide a product or service and they fail to deliver, you might be able to get paid using a
standby letter of credit. That payment can be a penalty to the company that was unable to
perform, and it’s similar to a refund, allowing you to pay somebody else to provide the
product or service needed.

Elements of a Letter of Credit

1. A payment undertaking given by a bank (issuing bank)

2. On behalf of a buyer (applicant)
3. To pay a seller (beneficiary) for a given amount of money
4. On presentation of specified documents representing the supply of goods
5. Within specified time limits
6. Documents must conform to terms and conditions set out in the letter of credit
7. Documents to be presented at a specified place

Key points:

 A letter of credit provides protection for sellers (or buyers).

34
  Banks issue letters of credit when a business “applies” for one and has the assets or credit
to get approved.
 Letters of credit are complicated, and it’s easy to make an expensive mistake when using
one.

Example

1. A manufacturer gets an order from a new customer overseas. The manufacturer has no
way of knowing if this customer can (or will) pay for the goods after they’re produced
and shipped.
2. To manage risk, the seller uses an agreement requiring the buyer to pay with a letter of
credit as soon as shipment is made.
3. To move forward, the buyer needs to apply for a letter of credit at a local bank. The buyer
may need to have funds on hand at that bank or get approval for financing from the bank.
4. The bank will only release funds to the seller after the seller proves that the shipment
happened. To do so, the seller typically provides documents showing how goods were
shipped (with details like the exact dates, destination, and contents). In some ways, the
buyer also enjoys protection under a letter of credit: Buyers might prefer to pay a bank
with a big legal department than send the money directly to an unknown seller.

International Trade

Importers and exporters regularly use letters of credit to protect themselves. Working with an
overseas buyer can be risky because you don't really know who you're working with. A buyer
may be honest and have good intentions, but business troubles or political unrest can delay
payment or put a buyer out of business.

In addition, communication is difficult across thousands of miles, different time zones, and
different languages. A letter of credit spells out the details so that everybody is on the same page.
Instead of assuming that things will work a certain way, everybody agrees on the process up
front.

Letter of Credit Lingo

35
To better understand letters of credit, it helps to know the terminology.

Applicant: The party who requests the letter of credit. This is the person or company that will
pay the beneficiary. The applicant is typically (but not always) an importer or buyer who uses the
letter of credit to make a purchase.

Beneficiary: The party who receives payment. This is usually a seller or exporter who has
requested that the applicant use a letter of credit (because the beneficiary wants more security).

Issuing bank: The bank that creates or issues the letter of credit at the applicant’s request. It is
typically a bank where the applicant already does business (in the applicant’s home country,
where the applicant has an account or a line of credit).

Negotiating bank: The bank that works with the beneficiary. This bank is generally located
in the beneficiary’s home country, and may be a bank where the beneficiary already conducts
business. The beneficiary will submit documents to the negotiating bank, and the negotiating
bank acts as a liaison between the beneficiary and other banks involved.

Confirming bank: A bank that “guarantees” payment to the beneficiary as long as the
requirements in the letter of credit are met. The issuing bank already guarantees payment, but the
beneficiary may prefer a guarantee from a bank in her home country (with which she is more
familiar). This may be the same bank as the negotiating bank.

Advising bank: The bank that receives the letter of credit from the issuing bank and notifies
the beneficiary that the letter is available. This bank is also known as the notifying bank, and
may be the same bank as the negotiating bank and the confirming bank.

Intermediary: A company that connects buyers and sellers, and which sometimes uses letters
of credit to facilitate transactions. Intermediaries often use back-to-back letters of credit (or
transferable letters of credit).

36
Freight forwarder: A company that assists with international shipping. Freight forwarders
often provide the documents exporters need to provide in order to get paid.

Shipper: The Company that transports goods from place to place.

Legal counsel: A firm that advises applicants and beneficiaries on how to use letters of credit.
It’s essential to get help from an expert who is familiar with these transactions.

In addition to the terms above, you might hear about different types of letters of credit, such
as standby letters of credit.

Getting a Letter of Credit

To get a letter of credit, contact your bank. You'll most likely need to work with an international
trade department or commercial division. Not every institution offers letters of credit, but small
banks and credit unions can often refer you to somebody who can accommodate your needs.

37
Step-by-step process:

 Buyer and seller agree to conduct business. The seller wants a letter of credit to guarantee
payment.
 Buyer applies to his bank for a letter of credit in favor of the seller.
 Buyer's bank approves the credit risk of the buyer, issues and forwards the credit to its
correspondent bank (advising or confirming). The correspondent bank is usually located
in the same geographical location as the seller (beneficiary).
 Advising bank will authenticate the credit and forward the original credit to the seller
(beneficiary).
 Seller (beneficiary) ships the goods, then verifies and develops the documentary
requirements to support the letter of credit. Documentary requirements may vary greatly
depending on the perceived risk involved in dealing with a particular company.

38
  Seller presents the required documents to the advising or confirming bank to be
processed for payment.
 Advising or confirming bank examines the documents for compliance with the terms and
conditions of the letter of credit.
 If the documents are correct, the advising or confirming bank will claim the funds by:
o Debiting the account of the issuing bank.
o Waiting until the issuing bank remits, after receiving the documents.
o Reimburse on another bank as required in the credit.
 Advising or confirming bank will forward the documents to the issuing bank.
 Issuing bank will examine the documents for compliance. If they are in order, the issuing
bank will debit the buyer's account.
 Issuing bank then forwards the documents to the buyer.

39
b. Bank Guarantee: A bank guarantee is a promise from a bank or other lending institution
that if a particular borrower defaults on a loan, the bank will cover the loss. Note that a bank
guarantee is not the same as a letter of credit.
EXAMPLES:
Company XYZ is a small, relatively unknown restaurant company that would like to
purchase $3 million of kitchen equipment. The equipment vendor may require
Company XYZ to provide a bank guarantee in order to feel more confident that
it will receive payment for the equipment it ships to Company XYZ.

.TYPE OF BANK GUARANTEE:

1. Financial Guarantee – This type of guarantee is given be the bank to the creditor on
behalf of debtor that debtor will pay his or her debt to the creditor on time and in the
event of default made by the debtor, bank will compensate to the credit for the loss due to
failure of repayment by the debtor.
2. Performance Guarantee – Performance guarantee is often given by the bank on the
behalf of contractor who undertakes to complete the contract on time. The company
which has awarded the contract to contractor demand guarantee that work will completed
on time, and in this case bank will give performance guarantee that contractor will
complete the contract on stipulated time, and if he is not able to complete it on time bank
will compensate the company for the losses due to such delay in work.

3. Advance Payment Guarantee – this is to ensure the safety of any advance

payment made by the buyers to the seller. In case the seller is unable to deliver the
service or the goods, then the buyer can get his money back.

4. Payment Guarantee – this guarantee is provided to the seller, ensuring payment by a

predetermined date.

40
 How Do Bank Guarantees Work?

The system for providing bank guarantees work like this:

 Applicant and the creditor ascertain that there is a need for a bank guarantee.

 Applicant reaches out to a financial institution to issue a bank guarantee to the creditor.

 The bank runs a risk assessment and asks for a security.

 The applicant furnishes the security and the bank, or the financial institution processes the bank
guarantee.

 The bank guarantee is sent to the creditor’s bank or the creditor, or the applicant may be asked to
collect it in person to give it to their creditor.

c. Forward cover:

A forward exchange contract is a special type of foreign currency transaction. Forward

contracts are agreements between two parties to exchange two designated currencies at a specific
time in the future. These contracts always take place on a date after the date that the spot contract
settles and are used to protect the buyer from fluctuations in currency prices.

How It Works

If payment on a transaction is to be made immediately, the purchaser has no choice other than to
buy foreign exchange on the spot or current market, for immediate delivery. However, if
payment is to be made at some future date, the purchaser has the option of buying foreign
exchange on the spot market or on the forward market, for delivery at some future date.

For example, you want to buy a piece of property in Japan in three months in Yen. You’re
funding the purchase from a sale of a property in the United States in U.S. dollars, and you want

41
to take advantage of the current exchange rate from Yen to U.S. dollar. Here you could use a
forward.

Regardless of what happens during the next three months on the exchange rate, you would pay
the set rate you have agreed on rather than the market rate at the time. This same scenario applies
to importing and exporting in terms of buying products in one currency (e.g., Yen) and importing
and paying for them in another currency (e.g., U.S. dollar).

d. Buyer Credit-

Meaning of buyer credit-

Buyer's credit is a loan facility extended to an importer by a bank or financial institution to

finance the purchase of capital goods or services. Buyer’s credit is a very useful mode of
financing in international trade, since foreign buyers seldom pay cash for large purchases, while
few exporters have the capacity to extend substantial amounts of long-term credit to their buyers.
A buyer’s credit facility involves a bank that can extend credit to the importer, as well as an
export finance agency based in the exporter's country that guarantees the loan.

PROCESS OF BUYER CREDIT-

1. Importer requests the consultant to arrange the buyer’s credit before the date of the
bill.

2. Consultant approaches overseas financial institutions for buyer’s credit.

3. Best rate of interest is quoted to the importer.

4. After acceptance of the importer, financial institutions are requested to provide a

buyer’s credit offer letter in the name of the importer arranged by the consultant.

42
 5. Overseas financial institutions funds the existing bank’s Nostro account with the
required amount as per the instructions in the LOU/LOC.

6. Payments are made against the import bill by the existing bank by utilizing the funds
credited.(cross currency contract is also permitted by RBI)

7. The importer’s bank will recover the required amount from the importer on the due
date and remit the same to overseas bank.(Principal + interest is paid based on the
pricing quoted in letter of credit)

43
1. Importer imports the goods either under DC / LC, DA / DP or Direct Documents.
2. Importer requests the Buyer’s Credit Consultant before the due date of the bill to avail buyer’s
credit quote.
3. Consultant approaches overseas bank for indicative pricing, which is further quoted to
Importer.
4. If pricing is acceptable to importer, overseas bank issue’s offer letter in the name of the
Importer.
5. Importer approaches his existing bank to get letter of undertaking / comfort (LOU / LOC)
issued in favor of overseas bank via swift. On receipt of LOU, funding bank ask for
confirmation of LOU. LOU Issuing bank provide confirmation to funding bank.
6. On receipt of LOU / LOC ( and Confirmation swift), Overseas Bank as per instruction
provided in LOU, will either funds existing bank’s Nostro account or pays the supplier’s bank
directly (using only MT202 payment mode).
7. Existing bank to make import bill payment by utilizing the amount credited (if the borrowing
currency is different from the currency of Imports then a cross currency contract is utilized to
effect the import payment)
8. On due date existing bank to recover the principal and Interest amount from the importer and
remit the same to Overseas Bank on due date.

44
FDR (FIXED DEPOSIT)

Fixed Deposits (FD) are investment instruments offered by banks and non-banking financial
companies, where you can deposit money for a higher rate of interest than savings accounts. You
can deposit a lump sum of money in fixed deposits for a specific period, ranging from 7 days to
10 years. The interest rate varies between 4 and 7.25 percent.

The interest earned from fixed deposits is taxable. The tax deducted at source on FDs can range
from 0% to 30%, depending on income tax bracket of the investor. Financiers deduct 10% TDS
if your interest earned is more than Rs. 10,000 in a year, if your PAN details are available with
them. However, in case your PAN details are not provided to your financial institution, 20%
TDS will be deducted.

Can we withdraw money from fixed deposit before maturity?

Yes, usually you can. You would be paid back the principal amount as well as the interest either
at a lower interest rate or after deducting a penalty. However, as per recent RBI regulations, a
bank can also offer fixed deposits with lock-in i.e. the bank can refuse any with draw
before the maturity period.

What is the minimum period for a fixed deposit?

The minimum amount accepted for fixed/short deposit is Rs.1, 000/- for a period of 15 days and
above and minimum of Rs.100 laces and above for a minimum period of 7 days.

What happens when fixed deposit matures?

A fixed deposit gets renewed automatically if not withdrawn on maturity or the interest rate of
savings account is paid for period after maturity. Therefore, while opening an FD, you have 2
options: After maturity the amount is transferred to a specific savings bank account.

45
Can we get monthly interest on fixed deposits?

Interest paid on a fixed deposit is paid either monthly or quarterly according to the investor's
choice. So if you invest Rs 3 lakes in a one year fixed deposit which pays 8 per cent you can earn
Rs. 2,000 of interest every month or Rs 6,000 of interest every quarter.

How tax is calculated on fixed deposits?

The interest income from bank fixed deposit is fully taxable, unlike savings bank account where
one gets income tax exemption on the interest earned up to Rs 10,000 in a year. In case of FDs,
banks deduct tax at source (TDS) at the rate of 10 per cent if the interest income for the year is
more than Rs 10,000.

Can FD be transferred to another person?

If the FD could be transferred to another person, it will be considered as a gift received by that
person. ... However, if the amount of FD including accrued interest is less than Rs. 50,000 then
the same will not be taxable as a gift received from non-relative below Rs. 50,000 in totality is
not taxable.

46
INTER CORPORATE DEPOSIT (ICD)

Inter-company deposit is the deposit made by a company that has surplus funds, to another
company for a maximum of 6 months. It is a source of short-term financing. The three types of
inter-corporate deposits are: three month deposits, six month deposits, and call deposits.

1. Call Deposit:
Such a type of deposit is withdrawn by the lender by giving a notice of one day. However, in
practice, a lender has to wait for at least 3 days.

2. Three-month Deposit: As the name suggests, such type of a deposit provides funds for
three months to meet up short-term cash inadequacy.

3. Six-month Deposit:
The lending company provides funds to another company for a period of six months.

Three month deposits are the most popular type of inter-corporate deposits. These deposits are
generally considered by the borrowers to solve problems of short term capital inadequacy. This
type of short-term cash problem may develop due to various issues, including tax payment,
excessive raw material import, breakdown in production, payment of dividends, delay in
collection, and excessive expenditure of capital.

Features of Inter-corporate Deposits:

The important features of inter-corporate deposits are as follows:

I. It is a popular source of short-term finance.

ii. Procurement procedure is simple.

iii. The rate of interest on such deposits is not fixed. It depends upon the amount involved and
the tenure of lending.

47
iv. It is uncertain source of finance, as deposit can be withdrawn any time—so it is risky also.

Advantages of Inter-company Deposits:

The advantages of inter-corporate deposits are:

i. Surplus funds can be effectively utilized by the lender company.

ii. Such deposits are secured in nature.

iii. Inter-corporate deposits can be easily procured.

Disadvantages of Inter-company Deposits:

Inter-company deposits suffer from following disadvantages:

i. A company cannot lend more than 10 per cent of its net worth to a single company and cannot
lend beyond 30 per cent of its net worth in total.

ii. The market for such source of financing is not structured.

Sheet

Principle Days Rate of interest Grass interest 10%of net interest maturity date Total amount
50000000 60 16% 1315068.493 131506.8493 18/07/2018 50131506.85
50000000 73 16% 1600000 160000 31/07/2018 50160000
50000000 120 16% 2630136.986 263013.6986 27/10/2018 50263013.7
50000000 150 16% 3287671.233 328767.1233 26/11/2018 50328767.12
50000000 270 16% 5917808.219 591780.8219 26/03/2019 50591780.82
50000000 300 16% 6575342.466 657534.2466 25/04/2019 50657534.25
50000000 360 16% 7890410.959 789041.0959 24/06/2019 50789041.1
50000000 270 16% 5917808.219 591780.8219 26/03/2019 50591780.82

48
 IMPORT BILL

Meaning of import bill - Import bill is the total amount of imports made by a country. This
includes both physical imports of goods and imports of services.

Import Bill Collection is a mode of payment for international trade where the seller forwards
financial and/or commercial documents to the buyer, against which the payment is made.

1-Lodgment bills- The process of settle of import bill by creating PAD (Interim arrangement
for making payment of negotiated Import bill) on complying presentation are known
as Lodgment of documents. ...Bill of Exchange, Commercial Invoice, Insurance
Documents, Bills of Lading /Other Transport Documents.

WORKING OF IMPORT BILLS-

1- Sight – (immediate)- Its mean payment after received invoice three days.
2- Tenure- In tenure payment given the days

Document of import bill

1. Bills of loading
2. Invoice
3. Packaging list
4. Insurance copy
5. Surveys’ copy
6. Packaging certificate

49
Acceptance of import bill –

1. In case of sight - (cash against document) -An arrangement under which an

exporter instructs the presenting bank to hand over shipping and title documents (see
document of title) to the importer only if the importer fully pays the accompanying bill
of exchange or draft. Also called cash against documents.
2. In case of tenure-(Document against payment)-The collecting bank will pass
relevant documents and receipts to the importer until the importer fulfill his/her
payment

Advance payment in import bill

1. Purchase order
2. Order conformation
3. Advance payment - Through bank
 Goods supply
 Invoice bills
 Release custom
 Custom copy -

50
 How does Import Bill for Collection (DA/DP) work?

 Step 1 - The seller and buyer enter into a contract and agree that payment be made on the basis of
a documentary collection
 Step 2 - The seller ships the goods and tenders the documents to its bank (remitting bank)
together with a corresponding collection order
 Step 3 - The remitting bank sends the documents along with its collection instructions to ICICI
Bank (collecting bank)
 Step 4 - ICICI Bank notifies the buyer of arrival of documents, for his payment/acceptance
 Step 5 - The buyer pays the amount due or accepts the draft and in turn receives the documents
 Step 6 - ICICI Bank remits the amount to the remitting bank
 Step 7 - The remitting bank credits the amount to the seller’s account

51
RATIO ANALYSIS WITH COMPARE OTHER COMPANY

1. LIQUIDITY RATIO
Liquidity ratio provides information regarding the company’s abilities to meet the short
term liabilities and day to day operations. A greater liquidity ratio depicts lesser risk
whereas lower liquidity ratio depicts the utilization of asset.
a. Current Ratio:

One of important function of the financial manager is to maintain sufficient liquidity. Current
ratio is an important criterion to test the liquidity and also the short term solvency. The ratio of
2:1 is considered as standard of current ratio. Mathematically,

Current Ratio = Current Assets ÷ Current Liabilities

JK CEMENT JK LAKSHMI SHREE CEMENT

2016 1.87 1.47 1.11

2017 1.82 1.43 1.37

2018 1.89 1.42 1.22

Chart Title
2
1.8
1.6
1.4
1.2
Axis Title

1
0.8
0.6
0.4
0.2
0
jk cement jk lashmi shree cement
2016 1.87 1.47 1.11
2017 1.82 1.43 1.37
2018 1.89 1.42 1.22

52
 b. Quick Ratio:

This ratio also tests liquidity but it is a more refined test of liquidity and solvency. This ratio
takes into consideration the liquid assets only which are directly convertible into cash. The
current assets like inventories which are two steps away from the cash are excluded.

Mathematically,

Cash + Marketable Securities + Receivables

Quick Ratio =
Current Liabilities

Alternatively, quick ratio can also be calculated using the following formula:

Current Assets − Inventory − Prepayments

Quick Ratio =
Current Liabilities

A quick ratio of 1:1 is considered adequate. In general, the higher the ratio, the greater the
company's liquidity (i.e., the better able to meet current obligations using liquid assets.

JK CEMENT JK LAKSHMI SHREE CEMENT

2016 0.78 0.44 0.81

2017 0.67 0.38 1.02

2018 0.69 0.42 0.92

53
 Chart Title
1.2

0.8
Axis Title

0.6

0.4

0.2

0
JK CEMENT JK LASHMI SHREE CEMENT
2016 0.78 0.44 0.81
2017 0.67 0.38 1.02
2018 0.69 0.42 0.92

2. LEVERAGE RATIO

This measure is used to measure the debt bearing level of the organization. It deals with the
financial obligation of the organization. Too much debt can be dangerous for a firm and for
the investors whereas less debt means that money has been raised by equity. There should be
a proper capital structure in the organization.

Debt- Equity Ratio: The Debt- Equity Ratio measures the long- term financial
solvency of a business concern. This ratio relates the owner’s stake in the business Vis-a
–Vis that of outsiders. In fact, it reflects the relative claims of creditors and shareholders
against the assets of the unit.
A high debt- equity ratio shows the large share of financing by the creditors as compared
to the shareholders and therefore a larger claim against the assets of the unit. A low ratio
signifies a smaller claim of creditors. A debt- equity ratio of 1:1 is considered adequate.
More precisely, the greater the debt-equity ratio, the greater the risk to the creditors.

Debt- Equity Ratio= Outsider’s Funds

54
 Shareholder’s Funds

Chart Title
1.6
1.4
1.2
1
Axis Title

0.8
0.6
0.4
0.2
0
JK CEMENT JK LASHMI SHREE CEMENT
2016 1.46 1.26 1.12
2017 1.31 1.27 1.11
2018 1.02 1.42 1.17

COMPANY’S PERFORMANCE
1. GRASS SALES

YEAR Mar’14 Mar’15 Mar’16 Mar’17 Mar’18

Sales turnover 2795.85 3870.76 4127.09 4379.83 4758.18
(In Rs cr.)

Increase in -3.99% 38.45% 6.62% 6.12% 8.64%

present

55
 GRASS SALES( IN RS CR.)
5000
4500
4000
3500
3000
Axis Title

2500
2000
1500
1000
500
0
2014 2015 2016 2017 2018
GRASS SALES( IN RS CR.) 2795.85 3870.76 4127.09 4358.83 4758.18

56
2. NET SALES

YEAR Mar’14 Mar’15 Mar’16 Mar’17 Mar’18

NET SALES 2795.85 3348.60 3560..32 4379.83 4758.18
(IN RS CR.)

NET SALES (IN RS CR.)

5000
4500
4000
3500
3000
Axis Title

2500
2000
1500
1000
500
0
2014 2015 2016 2017 2018
NET SALES (IN RS CR.) 2795.85 3348.6 3560.32 4379.83 4758.18

57
3. EBITDA

YEAR Mar’14 Mar’15 Mar’16 Mar’17 Mar’18

EBITDA 422.84 515.18 568.98 773.75 872.63

EBITDA (IN RS CR.)

1000
900
800
700
600
Axis Title

500
400
300
200
100
0
2014 2015 2016 2017 2018
EBITDA 422.84 515.18 568.98 773.75 872.63

58
4. NET PROFIT

YEAR Mar’14 Mar’15 Mar’16 Mar’17 Mar’18

NET PROFIT (IN RS 97.03 156.92 101.54 210.78 341.87
CR.)

NET PROFIT (IN RS CR.)

400

350

300

250
Axis Title

200

150

100

50

0
2014 2015 2016 2017 2018
NET PROFIT (IN RS CR.) 97.03 156.92 101.54 210.78 341.87

59
5. EARNING PER SHARE (RS)

YEAR Mar’14 Mar’15 Mar’16 Mar’17 Mar’18

EARNING 13.88 22.44 14.52 30.94 48.89
PER SHARE
(RS.)

EARN PER SHARE (IN RS.)

60

50

40
Axis Title

30

20

10

0
2014 2015 2016 2017 2018
EARN PER SHARE (IN RS.) 13.88 22.44 14.52 30.94 48.89

60
6. NET WORTH

YEAR Mar’14 Mar’15 Mar’16 Mar’17 Mar’18

NET 1758.46 1646.54 1714.41 1871.52 2147.35
WORTH (IN
RS CR.)

NET WORTH(IN RS CR.)

2500

2000

1500
Axis Title

1000

500

0
2014 2015 2016 2017 2018
NET WORTH(IN RS CR.) 1758.46 1646.54 1714.41 1871.52 2147.35

61
 CONCLUSION

To see the overall report, we can understand J.K. Cement much famous and mostly consumers
are aware. The branch office of JK Cement in Okhla has a job to make working capital available
for the projects. The branch raises the working capital from different banks by coming in a
contract. All the documentation work as well as storage of files in excels is also the job of the
branch. The company offices try to raise money at the lowest interest rate possible by different
medium.

 I conclude from the above project that J.K. Cement is one of the top organizations in the
cement sector.
 J.K. Cement has 25.83 % current assets of the total assets as this is the good percentage
but still the company needs to raise its current assets to meet its current obligations.
 Liquidity analysis shows that a company’s has the ability to meet its short-term debt
obligations. Current ratio is little bit less from the current level.
 It has maintained good bonding with the bank so as to avail the working capital on time.
 The employees of the company are very cooperative and share a healthy bond amongst
them.
 The companies perform the CSR activity and help the trainees in the training process by
providing internship.

62
 RECOMMENDATIONS

According to the Study on Working Capital Arrangement Process of J.K. Cements, I have found
following facts: -

 From the last year, the profit of the company increases but more improvement is required
by the company to increase its profit margin.
 Proper liquidity funds are maintained by the firm such as cash and bank balances to
improve its liquidity position.
 The company to focus on investing the capital in a productive manner instead of just
earning through the interest rate. I think the company should borrow the money to get
higher benefits from it instead of small interest.
 The company should also enhance its employee’s efficiency and more and more training
is needed to employees and interns.

The company can increase the area of the office so that more employees can be employed.

63
 KEY LEARNINGS

Key learning involved during internship is:

 Exposure to real business world.

 Learn to know about the applicability and usability of theory which have been taught to
us during the first year of the course.
 Learned about the financial performance of the organization.
 Learned about the documentation process required to raise Working Capital.
 Learned how to raise Commercial Paper, parties involved in it, process of raising
commercial paper and making of it in excel form.
 Non-fund based financing, its types.
 Letter of Credit, Types and Process of Letter of Credit.

This summer training project has provided me with a lot of learning opportunities as my working
ability with excel and word improved

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 REFERENCES

 www.jkcement.com/

 https://www.slideshare.net/sanjay3017/project-report-on-working-capital

 https://www.ibef.org/

 http://www.globalcement.com/news/itemlist/tag/India

 http://business.mapsofindia.com/cement/

 http://www.careerride.com/fa-fund-based-lending.aspx

 http://www.allprojectreports.com/MBA-Projects/Finance-Project-
Report/working_capital_management/working_capital_management.htm

 Library books
 JK cement annual report 2017-18

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