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CHAPTER 1



















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INTRODUCTION

MANAGEMENT OF FIXED ASSETS

The selection of various fixed assets required creating the desired production facilities
and the decision regards the determination of the level of fixed assets is primarily the task
that at the production technical people. The decision relating to fixed assets involves huge
funds a long period of time and are generally irreversible nature affecting the long term
profitability of a concern, an unsound invest decision may prove to be total to the very
existence of the organization.

Thus, the management of fixed asset is of vital importance to any organization. The
process of fixed asset management involves:
(i) Selection of most worthy projects or alternative of fixed assets.
(ii) Arranging the requisite funds / capital for the same.

The first important consideration to be acquire only that much amount of fixed assets
which will be just sufficient to ensure and efficient running of the business. In some cases it
may be economical to buy certain assets in a lot size. Another important consideration to be
kept in mind is possible increase in demand of the firm‘s product necessarily expansion of its
activities. Hence a firm should have that much amount of fixed assets, which could adjust to
increase demand.

The third of fixed assets management is that a firm must ensure buffer stocks of
certain essential equipment / services to ensure uninterrupted production in these events of
emergencies. Sometime, there may be a breakdown in some equipment or services affecting
the entire production. It is always better to have some alternative arrangements to deal with
such situations. But at the same time the cost of carrying such buffer stock should also be
evaluated. Efforts should also be made to minimize the level of buffer stock of fixed assets
be encouraging their maximum utilization during learn period, transferring a part of peak
period and living additional capacity.
ASSETS
Broadly speaking, assets represent resources which are of some value to the firm.They
have been acquired at a specific monetary cost by the firm for the conduct of its
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operations.Assets are classified as follows under the companies Act.
 fixed assets
 current assets

Fixed -assets
A long-term tangible piece of property that a firm owns and uses in the production of
its income and is not expected to be consumed or converted into cash any sooner than at least
one year's time.
These assets have two characteristics : They are acquired for use over relatively long
period for carrying on the operations of the firm and they are ordinarily not meant for resale.
Examples of fixed assets are land, buildings, plant, machinery, patents, and copy rights.

Current-assets
This category consists of cash and other resources which get converted into cash
during the operating cycle of the firm. Current assets are held for a short period of time as
against fixed assets which are held for relatively longer periods.
The major components of current assets are: cash, debtors, inventories, loans and
advances and pre-paid expenses.

ASSETS HAVE THREE ESSENTIAL CHARACTERISTICS

1. They embody a future benefit that involves a capacity, singly or in combination with other
assets,

2. In the case of profit oriented enterprises, to contribute directly or indirectly to future net cash
flows, And in the case of not-for-profit organizations, to provide services:

3. The entity can control access to the benefit; and, the transaction or event giving rise to the
entity‘s right to, or control of, the benefit has already occurred.
It is not necessary, in the financial accounting sense of the term, for control of
access to the benefit to be legally enforceable for a resource to be an assets, provided the
entity can control its use by other means. It is important to understand that in an accounting
sense an asset is not the same as ownership. In accounting, ownership is described by the
term ―equity‖ plus ―liability‖.
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The accounting equation relates assets, liability, and owner‘s equity:
Assets =Liability+ Owner‘s Equation is the mathematical structure of the balance
sheet.
Assets are usually listed on the balance sheet. It has a normal balance sheet. Assets
are usually listed on the balance sheet. It has a normal balance, or usual balance, of debit (i.e.
asset account amount appear on the left side of a ledger).

Similarly, in economics and assets any form in which wealth can be held.

Probably the most accepted accounting definition of asset is the one used by the
International Accounting Standards Board. The following is a quotation from the IFRS
Framework; ―An asset is a Resource controlled by the enterprise as a result of past events
and from which future economic benefits are expected to flow to the enterprise.”

Assets are formally controlled and managed within larger organization via the use of
asset tracking tools. These monitor the purchasing, upgrading, servicing licensing, and
disposal etc., of both physical and non physical assets.

The assets in the balance sheet are listed either in order of liquidity promptness with
which they are expected to be converted into cash or in reserve order, that is, fixity or listing
of the least liquid (fixed) first followed by others. All assets are grouped into categories, that
is, assets with similar characteristics are put in one category. The assets included in one
category are different from those in other categories.

Fixed assets management:
Fixed assets management is an accounting process that seeks to track Fixed assets for
the purposes of financial accounting, preventive Maintenance, and theft deterrence.
Many organizations face a significant challenge to track the location, quantity,
condition, Maintenance and depreciation status of their fixed assets. A popular approach to
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tracking fixed assets utilizes serial numbered Asset Tags, often with bar codes for easy and
accurate reading.
Periodically, the owner of the assets can take inventory with a mobile barcode reader
and then produce a report. Off-the-shelf software packages for fixed asset management are
marketed to businesses small and large. Some Enterprise Resource Planning systems are
available with fixed assets modules.
The term asset management is often used to refer to the investment management of
collective investments, whilst the more generic fund management may refer to all forms of
institutional investment as well as investment management for private investors. Investment
managers who specialize in advisory or discretionary management on behalf of (normally
wealthy) private investors may often refer to their services as wealth management or
portfolio management often within the context of so-called "private banking".

The provision of 'investment management services' includes elements of
financial analysis, Asset selection, stock selection, plan implementation and ongoing
monitoring of investment. Investment management is a large and important global industry
in its own right responsible for caretaking of trillions of dollars, Euros, pounds and yen.
Coming under the remit of financial Services many of the world's largest companies are at
least in part investment managers and employ millions of staff and create billions in
revenue.Fund manager (or investment advisor in the U.S.) refers to both a firm that provides
investment management services and an individual(s) who directs 'fund management'
decisions Global Investor‘s 2006 top 10 asset managers by assets under management.

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Rank Company
Assets under management
(US million)
Country
1. Barclays Global Investors 1,400,491 UK
2. State Street Global Advisors 1,367,269 US
3. Fidelity Investments 1,299,400 US
4. Capital Group Companies 1,050,435 US
5. Legg Mason 891,400 US
6. The Vanguard Group 852,000 US
7. Allianz Global Investors 790,513 Germany
8. JPMorgan Asset Management 782,646 US
9. Mellon Financial Corporation 738,294 US
10. Deutsche Asset Management 723,366 Germany
Fixed asset, also known as property, plant, and equipment (PP&E), is a term used in
accountancy for assets and property which cannot easily be converted into cash. This can be
compared with current assets such as cash or bank accounts, which are described as liquid
assets. In most cases, only tangible assets are referred to as fixed. Fixed assets normally
include items such as land and buildings, motor vehicles, furniture, office equipment,
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computers, fixtures and fittings, and plant and machinery. These often receive favorable tax
treatment (depreciation allowance) over short-term assets because they depreciate Over time.
FIXED ASSETS
Fixed assets are those, which are required and held permanently for a pretty longtime
in the business and are used for the purpose of earning profits. This successful continuance
of the business depends upon the maintenance of such assets. They are not meant for release
in the ordinary course or business and the utility of these remains so long as they are in
working order, so they are also known as capital assets. For example Land & building, plant
and machinery, motor vans, furniture.
Financial transactions are recorded in the books keeping in view the going concern
aspect of their business unit. It is assumed the business unit has a reasonable expectation of
continuing business at a profit for indefinite period of time. It will continue to operate I the
future. This assumption provides much of the justification for recoding fixed assets at
original coat and depreciating them in a systematic manner without reference to their current
realizable value. It is useless to show fixed assets in the balance sheet at their estimated
realizable values if there is no immediate expectation of selling them. Fixed resale, so they
are shown at their book values (i.e., cost less depreciation provided) and not at their current
realizable values.
The market value of a fixed asset may change with the passage of time, but for
accounting purpose it continues to be shown in the books at its book value, i.e., the cost at
which it was purchased minus depreciation proved up to date
The cost concept of accounting, depreciation calculated on the basis of historical costs
of old assets is usually lower than that of those calculated at current value or replacement
value. These results in more profits on paper, which if distributed in full, will lead to
reduction of capital.
8

IMPORTANCE
Fixed Assets are the assets, which cannot be liquidates into cash within one year. The
large amount of the company is invested in these assets. Every year the company investment
a additional fund in these assets directly or indirectly the survival and other objectives of the
company purely depends on operating performance of management in effective utilization of
their assets.
Firm has evaluated the performance of fixed assets with proportion of capital
employee on net assets turnover and other parameters, which is helpful for evaluating the
performance of fixed assets.

NEED FOR VALUATION OF FIXED ASSETS: Valuation of fixed assets is
important to have fair measure of profit or loss and financial position of the concern. Fixed
assets are meant for use for many years. The value of these assets decreases with their use or
with time or many other reasons. A portion of fixed assets are reduced by usage are converted
into cash through charging depreciation. For correct measurement of income, proper
measurement of depreciation is essential, as depreciation constitutes a Part of total cost of
production.
Financial transactions are recorded in the books, keeping in view the going concern
aspect of the business unit. In going concern aspect it is assumed that the business unit has
reasonable expectation of continuing the business for a profit for an indefinite period of time.
This assumption provides much of the justification for recording fixed assets at original cost
and depreciating them in a systematic manner without reference to their current realizable
value.
It is useless to record the fixed assets in the balance sheet at their estimated
realizable values if there is no immediate expectation of selling them. So, they are shown at
their book value (i.e., Cost –Depreciation) and not at current realizable value. The market
9

value of the fixed assets may change with the passage of time, but for accounting purpose it
continues to be shown in the books in historical cost.
The cost concept of accounting states that depreciation calculated on the basis
of historical cost of old assets is usually lower than the amount calculated at current value
replacement value. These results in more profits, which if distributed in full will lead to
reduction in capital.

NEED FOR FIXED ASSETS MANAGEMENT:

Fixed Assets play very important role in relating company‘s objectives the firms to
which capital investment vested on Fixed Assets. These fixed assets are not convertible or
not liquid able over a period of time the total owner funds and long-term liabilities are
invested in fixed assets.

Since fixed assets playing dominant role in total business the firms has realized the
effective utilization of fixed assets. So ration contribution very much in analyzing and
utilized properly it effects long term sustainability of the firms which may effect liquidity and
solvency and profitability positions of the company.

The idle of fixed assets lead a tremendous in financial cost and intangible coat
associate to it. So there is need for the companies to evaluate fixed assets performance
analysis time to time by comparing with previous performance, Comparison with similar
company and comparison with industry standards. So choose a study to conduct on the fixed
assets analysis of KESORAM CEMENT using ratio in comparison with previous year
performance. The title of the project is analysis on Fixed Assets Management.
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OBJECTIVES OF THE STUDY:

 The study is conducted to evaluated fixed assets performance of KESORAM CEMENT.

 The study is conducted to evaluate the fixed assets turnover of KESORAM CEMENT
INDUSTRIES.

 The study is made to known the amount of capital expenditure made by the company
during study period.

 The study is conducted to evaluate depreciation and method of depreciation adopted by
KESORAM CEMENT INDUSTRIES.

 The study is conducted to known the amount of finance made by long-term liabilities and
owner funds towards fixed assets.

 Study is conducted to evaluate that if fixed assets are liquidated. What is the proportion
of fixed assets amount will contribute for payment of owner funds and long-term
liabilities.











11

RESEARCH METHODOLOGY
To achieve the objective of the study, a methodology is designed. The research
design, variables, samples and sampling technique are explained briefly. The tool for data
collection, the method used for data collection and analysis of the collected data are
explained in this chapter.
Research Design: The research design is the specification of method and procedure used
for acquiring the information needed for the study. This study aims at analyzing the financial
performance of the company, hence, descriptive and exploratory design was planned for the
research study.
Tool of Data Collection:
 The primary and secondary data was obtained from published course like financial
data published in the annual reports of the company and books, journals,
magazines and internet and information‘s provide by the KESORAM employees.
Secondary Sources: basically comprise Company‘s Manuals, Records, Brochure,
books, standards and Internet etc. The data used for analysis and interpretation from
annual reports of the company that is secondary forms of data. Ratio analysis is used
for calculation on purpose.
The project is presented by using tables, graphs and with their
interpretations. No survey is undertaken or observation study is conducted in
evaluating ―Fixed Assets‖ performance of KESORAM CEMENT INDUSTRIES.
Period of study: The project duration is 45 days started from 27
th
APRIL to 10
rd
JUNE. I
had taken the data for ‖six‖ years that is 2006-2007 to 2011-2012.

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SCOPE
The project is covered of Fixed Assets of KESORAM CEMENT drawn from
Annual Report of the company. The fixed assets considered in the project are which cannot
be converted into cash with one year. Ratio analysis is used for evaluating fixed assets
performance of KESORAM CEMENT INDUSTRIES.
The subject matter is limited to fixed assets it analyses and its performance but not
any other areas of accounting, corporate, marketing and financial matters.
TECHNIQUES
1. FIXED ASSETS TO NET WORTH RATIO: This ratio establishes the relationship between
Fixed Assets and Net Worth.
Net Worth = Share Capital + Reserves & Surplus + Retained Earnings.

Fixed Assets
Fixed Assets to Net Worth Ratio = _______________ X 100
Net Worth

This ratio of ―Fixed Assets‖ to ―Net Worth‖ indicates the extent to which
shareholder funds are sunk into the fixed assets. Generally, the purchase of fixed assets
should be financed by shareholders, equity including reserves & surpluses and retained
earnings. If the ratio is less than 100% it implies that owners funds are more than total Fixed
Assets and a part of the working capital is provided by the shareholders. When the ratio is
more than 100% it implies that owner‘s funds are not sufficient to finance the fixed assets and
the finance has to depend upon outsiders to finance the fixed assets. There is no ―rule of
thumb‖ to interpret this ratio but 60% to 65% is considered to be satisfactory ratio in case of
industrial undertaking.


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2. FIXED ASSETS RATIO
This ratio explains whether the firm has raised adequate long term funds to meet its
fixed assets requirements and is calculated as under.

Fixed assets ratio = Fixed Assets (Assets Depreciation)
Capital Employed

This ratio gives an idea as to what part of the capital employed has been used in
purchasing the fixed assets for the concern. If the ratio is less than one it is good for the
concern.

3. FIXED ASSETS AS A PERCENTAGE TO CURRENT LIABILITIES
The ratio measures the relationship between fixed assets and the funded debt and is a
very useful so the long term erection. The ratio can be calculated as below.

Fixed Assets as a percentage to Current Liabilities = Fixed Assets .
Current Liabilities


4. TOTAL INVESTMENT TURNOVER RATIO
This ratio is calculated by dividing the net sales by the value of total assets that is
(Net Sales / Total Investment) or (Sales / Total Investment).
A high ratio is an indicator of over trading of total assets while a low ratio reveals idle
capacity. The traditional standards for the ratio in two times

5. FIXED ASSETS TURNOVER RATIO
This ratio expresses the number of times fixed assets are being turned – over is a state
period. It is calculated as under:
Sales / Net Fixed Assets (After Depreciation)

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This ratio shows low well the fixed assets are being uses in the business. The ratio is
important is case of manufacturing concern because sales are produced not only by use of
Current Assets but also by amount invested in Fixed Assets the higher ratio, the better is the
performance. On the other hand a low ratio indicated that fixed assets are not being
efficiently utilized.

6. GROSS CAPITAL EMPLOYED
The term ―Gross Capital Employed‖ usually comprises the total assets, fixed as well
as current assets used in a business.
Gross Capital Employed = Fixed Assets + Current Assets

7. RETURN ON FIXED ASSETS
( Profit after tax / Fixed assets ) X 100
This ratio is calculated to measure the profit after tax against the amount
invested in total assets to ascertain whether assets are being utilized properly or not.
The higher the ratio the better it is for the concern.

8. FIXED ASSETS TO NET WORTH
NET WORTH = Share Capital + Reserves & Surplus + Retained Earning.
If the ratio is less than 100%, it implies that owner funds are more than the
fixed assets and a part of working capital is provided by the share holder and vice-versa.
Fixed Assets to Net worth Ratio = ( Fixed Assets / Net Worth ) X 100




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LIMITATIONS : In the study many factors that need detailed analysis could not be
discussed in detail because of the limitations regarding length of the project and available
time.
 The study is limited up to the date and information provided by Kesoram Cement and
is annual reports.
 The study is within the limit of Warangal.
 The report will not provide exact Fixed Assets status and position in Kesoram
Cement; it may varying from time to time and situation to situation.
 This report is not helpful in investing in Kesoram Cement Industries either through
disinvestments or capital market.
 The accounting procedure and other accounting principles are limited by the company
changes in them may vary the fixed assets performance.

The data gathering method is adopted purely from secondary sources. The theoretical
content is gathered from eminent texts books and reference and library at Kesoram Cement
Industries. The Financial data and information is gathered from annual reports of the
company internal records.
Interpretation, Conclusions and Suggestions are purely base on my
opinion and suggestions provided by the project guide.








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CHAPTERIZATION

The Chapterization scheme of the present study presented here as under gives a clear
picture about the organization of different chapters and the sub-contents in each chapter.

Chapter1:
The first chapter includes introduction of the topic, need for the study, and
objective of the study, period of the study, methodology, and limitations of the study.

Chapter2:
The second chapter consists of company profile of the company and its history and
SWOT analysis on cement industry.

Chapter3:
The third chapter is the core chapter of the study the chapter through its data
analysis, and interpretation gives a clear picture of the present study.

Chapter4:
The fourth chapter deals with the summary part of the study . It also tries to offer
some suggestions and conclusion.












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CHAPTER 2
















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COMPANY PROFILE :

Cement Industry Profile:
Cement is the basic construction material used extensively all over the world. The
per capital consumption of cement is universally acknowledged as one of the measure of the
country. The per capital consumption of cement in India is estimated at approximately
Rs.57 lahk, and India is the third lowest consumer in the world. Thus there is a excellent
potential growth of cement industry in India.
Cement was first patented in 1824 in England. In India, the first cement plant was
established by Indian cement industrial growth was continuously increased. By 1961, cement
production in the country achieved self sufficiency and import of cement was stopped. In
August, 1965 the Government accepted the principle to decontrol the prices and distribution
of cement. A scheme of decontrol drawn and brought into effect from January, 1996 and a
cement allocation and coordination organization (CACO) was formed. As the decontrol
scheme did not prove to the satisfaction of the Government, CACO was abolished and its
functions over by the cement controller attached by the Government Corporation of India
Limited. Prices of cement are revised by the Government from time to time based on studies
and reports of Bureau of Industrial cost and prices.
The origin
The south India Industries Ltd. Produced cement for the first time in India in 1904
near Chennai with a capacity of 30 tones per day. However this venture is failed. In October
1914 another enterprise, India Cement Company Limited commissioned 100 tones per day
rotary kiln at Porbander (Gujarat). The next couple of years saw the emergence of two
factories when plants at Kant (Madhya Pradesh) and Katani (Rajastan) were commissioned.
The First World War gave a fillip to the cement industry and by 1918; the three
factories together were able to produce about 85,000 tones per year. In 1857, an American
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named David Saylor improved the mix design of limestone and clay resulting in a much more
superior quality of cement. He also called his cement by same name viz., ―Portland Cement‖.
Production Of Cement
India ranks fourth biggest cement producing country after China, Japan and United
States. In early 90‘s only India achieved this significant position in world cement scenario.
The Indian Cement Industry consists of 57 companies operation about 116 large plants and
around 300 mini plants having installed capacity of 109.3 million tones.
Composition Of Cement :The chemical analysis of the cement is s follows:
Limestone : 80%
Coke Breeze : 12% to 13%
Clay : 6% to 9%
Additives : 2%
Gypsum : 5%
Indian Cement Industry –Present Status
After the deli censing of the industry in July 1991 it reacted positively to the policy
changes. New capacities created and the volume of the production increased. From a
situation of importing cement, the country started exporting due to high quality and cost
effectiveness. After liberalization the black market in cement also disappeared.

Currently INDIA stands second largest in the cement production worldwide after
China after India, Japan and USA stands. On the other hand India‘s per capital consumption
is only 100 Kgs, as compared to the world average of 260 Kgs. The industry has 59
companies owning 115 plants. In the matter of exports, the Government considers cement as
extreme focuses are. However Indian cement in the global market is not very competitive
due to high power and full costs. In order to improve its position in the international market.
Technological up gradation is essential in terms of process up gradation diversification costs
reduction quality control and energy savings.
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About The Kesoram Company

Kesoram Cement Industry is one of the leading manufacturers cement in India,
incorporated by the promoters of Birla Group Company. It is a dry process cement plant.
The plant capacity is 8.26 lakh tones per annum; it is located at Basanthnagar in Karimanagar
Dist. Of Andhra Pradesh which is 8km away from the Ramagundam Railway Station, linking
Madras to New Delhi.

The company‘s first unit Basanthnagar with a capacity of 2.1 lakh tones per annum.
Humbolds suspension preheater system was commissioned during the year 1969. The second
unit was set up in the year 1971 with a capacity 2.1 lakh tones per annum and the third unit
with a capacity of 2.5 lakh tones per annum went on stream in the year 1978. The coal for
this company is being supplied by Singareni Colonies and the power is obtained forms
APSEB. The power demand for the factory is about installed in the year 1987.
 Kesoram Cement has set up a 15MW captive power plant to facilitate for
uninterrupted power supply for manufacturing of cement, which starts on 24th
August, 1997.
 Kesoram Cement Industry distinguished itself all the cement factories in India by
bagging the National Productivity Award Consecutively for two years i.e., for the
year 1985-86 and 1986-87.
 The Federation of Andhra Pradesh Chambers of Commerce and Industries (FAPCCI)
also conferred on Kesoram Cement, an Award for Best Industrial promotion /
expansion efforts in the state for the year 1984.
 Kesoram also bagged FAPCCI award for ―Best Family Planning Effort in the state‖
for the year 1987-88.

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One among the industrial giants in the country today, serving the nation on industrial
front, Kesoram Industries Ltd., has a chequered and eventful history dating back to the
twenties when the Industrial House of Birla acquired it. With only a Textile Mill under is
banner in 1924, it grew form strength and spread its activities to newer fields like Rayon,
Spun Pipes, Transparent Paper, Pulp, Tyres, Refectories and other products.
Cement, which plays an important role in Nation Building activity, the Government of
India, had de-licensed the cement industry in the year 1966 with a view to attract private
entrepreneurs to argument the cement production. Then Kesoram decided to set up a few
Cement Plants in the Country.
Birla supreme is popular brand of Kesoram Cement from its prestigious plant of
Basanthnagar, in A.P., which has outstanding track record in performance and productivity,
serving the nation for the last two and half decades. It has proved its distinction by bagging
several national awards and state awards. It also has the distinction of achieving optimum
capacity utilization.
Kesoram offers a choice of top quality Portland Cement for light, heavy constructions
and allied applications. Quality is built to every fact of the operations. As is the preference
for quality, so is the demand for the product.
The limestone is rich in calcium carbonate, a key factor that influences the quality of
the final product. The dry process technology used in the late computerized monitoring
overseas the manufacturing process. Samples are sent regularly to the bureau of Indian
Standards, National Council of Construction and Building Material for certification of
derived quality norms. The company has actively undertaken promotional measures for
promoting their product through different media, which includes the use off hoardings.
Compliments, Newspapers etc.,

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Kesoram Cement is undertaking the marketing activities extensively in the states of
Andhra Pradesh, Karnataka, Tamilnadu, Kerala, Maharashtra and Gujarat. In A.P. sales
depots are located in different areas like Karimnagar, Warangal, Nizamabad, Vijayawada and
Nellore. In other estates it has opened around 10 depots. The market share of Kesoram
Cement in the all India Cement market is 1.19% in A.P. it is a 7.05%.

Kesoram cement Industry is one of the leading manufacturers of cement in India
Kesoram cement is a division of Kesoram Industries Limited. The latter is a 6 decades Old
company belonging to the house of Birlas. It is a dry process cement plants. The plant
capacity is 8.26 Lakh tones per annum. It is located at Basanthnagar in Karimnagar District
Andhra Pradesh. The Chairman of the company is Syt.B.K.Birla.
 The firs tunit at Basanthnagar with a capacity of 2.1 lakh tones per annum in
corprating Suspension pre heater system was commissioned during the year 1969.

 The second unit was setup in the year 1991 with a capacity of 2.1 lakh tones per
annum and the third unit with a capacity at 2.5 lakh tones per annum went oh stream
in the year 1978.
The coal for this company is being supplied by singareni colleries and the power is
obtained from APSEB.
Kesoram Cement Industry distinguished it self among on the cement factories
in India by bagging the national productivity Award consecutively for two years i.e., for the
year 1985-86 and 87. The Federation of A.P chambers and commerce and Industries
(FAPCCI) also conferred on Kesoram Cement. An award for the Best Industrial promotion
lekpanasian Efforts in the state for the year 1984. Kesoram also baged FAPCCI award for
‖Best Family Planning Effort in the State ‖ for the 1987-88.
The company being a continuous process industry works around the clock and has an
excellent reord of performance achieving over 100% capacity utilization.
23

Kesoram cement belongs to the Birla Group of Companies, one of the industrial giants in
the country.
The company takes care of the employee‘s welfare facilities during the work like as
well as outside the work life. The company has provided housing facilities to the workers, co-
operatives stores, canteen, schools, pays 20% Bonus every year, conducts sports and games
for republic day and Independence Day, swimming pool, recreation clubs with facilities for
Indoor and Outdoor games.
Family planning camps are conducted regularly with the help of the District medical
and Health Authorities at the government. The company propagates the importance of family
welfare to its employees and in the neighboring villages through their medical officer and
rural development officer
. Not only the employees of the factory are well taken care of, but the company pays
lot of attention to words the rural development activities. Twelve villages are adopted and the
company has extended help in constructing temples, roads, school buildings, conducting
training programmers to the farmers, eye surgical camps, health check up camps e
The company has planted about 5 lakh trees in and around Basanthnagar and near by
villages there by contributing a lot for eliminating the pollution. The greenery here keeps the
temperature low about 2 to 3 degrees (CG) less when compared to other areas.The company
contributes about 12.5 crores rupees to the state economy and 26 crores rupees to the national
economy per annum.
One among the industrial giants in the country to day serving the nation on the industrial
front. Kesoram Industries Limited. Has a acquired and eventful history dating back to the
twenties when the industrial House Birla‘s acquired it. With only textiles mill under its
banner in 1924, it grew from strength and spread it‘s activities to newer fields like Rayon,
Pulp, Transparent Paper, Spun Pipes, Refractory, Tyres and other products.
24

Looking to wide gap between the demand and supply, of a vital commodity cement,
which plays an important in National building activity the government of India de-licensed
the cement industry in the year 1966 with a view to attract private entrepreneur to argument
the cement production. Kesoram rose to the occasion and decide to set up a few cement
plants in country.
Kesoram Cement in one of the prestigious units on the renowned Kesoram Industries
group that is one of India‘s leading Industrial conglomerate, under the stewardship of Syt.
B.K.Birla, the doyen of Indian Industry.
Production
Last 20 production of kesoram cement industry,Basanthnagar.

Year Production (in tones)
1989-90 601453
1990-91 643307
1991-92 643663
1992-93 748258
1993-94 685596
1994-95 731177
1995-96 784555
1996-97 782383
1997-98 731049
1998-99 746474
1999-2000 688305
2000-2001 777092
2001-2202 692424
2002-2003 727447
2003-2004 735012
2004-2005 746418
25

2009-10 13,72,501
2010-11 42,77,698
2011-12 39,73,531

Note: Production including internal consumption also.
Cement and clinker production were lower than the previous year mainly because
of lower cement does of recession prevailing in cement industry with slowdown in demand
during the year under review . this section had to production due to accumulation of large
stocks of clinker. However, sales realization during the second help of the year as improved
and it is hoped that prices will stabilize at some reasonable levels.
DIRECTORS OF KESORAM INDUSTRIES LIMITED.

Chairman
 Sri. Basant Kumar Birla
Directors
 Smt.Krishna Gopal maheswari
 Sri.B.P.Bajoria
 Sri.P.K.Choksey
 Sri.G.B.Pande
 Sri.Amitabha Ghosh
 Sri.P.K.Mallik
 Smt.Manjushree Khaitan
Secretary
 Sri.S.K.Patodia


2005-2006 754834
2006-2007 1046166
2007-2008 1056742
2008-2009 1199445
26

Senior Executives
 Sri.K.C.Jain (Manager of the Company)
 Sri.J.D.Poddar
 Sri.P.K.Goyenka
 Sri.Deepak Tandon

Auditors
 Messrs Price Waterhous

Subsidiary companies of Kesoram Industries
 Bharat General & Textiles industries Limited
 KICM Investment Limited
 Assam Cotton Mills Limited
 Soft-shoe Estates Limited
Supreme Heritage
Kesoram cement needs no introduction, as the name, ―Kesoram‖ is synonymous
with cement, rather Kesoram is a household name throughout the country today. Kesoram
cement is one of the prestigious unit of the Kesoram industries group. Which is one of the
India‘s leading industrial under the stewardship of Syt.B.K.Birla, the doyen of Indian
Industry.
Supreme Performances
One of the largest cement plants in A.P. the plant in corporate the latest technology
in cement making. It is professionally managed and well-established cement manufacturing
company enjoying the confidence of the consumers. Kesoram has outstand track record in
performance and productivity with quite a few national and state Awards to its credit.
Birla supreme the 43 Grade cement, is widely accepted and popular in the market,
commanding a premium However to meet the specific demands of the consumers, Kesoram
brought out the 53 Grade BIRLA SUPREME GOLD, which has special qualities higher
fineness, quick-setting, high compressive strength and durability.
27

Supreme Strength
Kesoram cement has huge captive lime stone Deposit which make it possible to feed
high grade limestone consistently. Its natured gray color is an inborn Ingredient and gives
goods shade.
Both the products offered by Kesoram, i.e. BIRLA SUPREME 43Grade and BIRLA
SUPREME GOLD 53 Grade cement are outstanding much higher compressive strength and
durability.

Supreme process
BIRLA SUPREME is manufactured by closed circuit cement grinding process
involving high efficiency separators. This ensures uniform and high quality in cement, which
in turn contributes to its superior strength and optimum setting time.

Process & Quality control: It has been the endeavor of Kesoram to incorporate the
world‘s latest technology in the plant and today has the most sophisticated, states of the art
technology in its process.

X-Ray Analyzers: Fully computerized XRF and XRD x-ray analysis keep a constant
round the clock vigil on quality.

Distributed Control System
Clinker-making process is a key step in the over all cement-making process. In the case
of BIRLA SUPREME GOLD, the clinker making process is totally computer controlled.

The Distributed Control System (DCS) constantly monitors the process and ensures
operating efficiency. The eliminates variation and ensures consistency in the quality of
clinker.
28

Supreme Expertise

The best technical team, exclusive to Kesoram, mans the plant and monitor the
process, to blend the cement in just the required proportions, to make BIRLA SUPREME
GOLD of rock strength.

Eco Friendly

Kesoram has been doing its best for protecting the environment and maintain the
ecological balance in the area.
Appropriate pollution control equipment has been installed in the plant. Lot of a
forestation measures have been taken and green belts developed and lakhs of trees have been
planted in and around the factory, mines township and in the near by areas.

Basanthnagar has become a paradise with lush greenery, beautiful landscapes
and avenues. The tree plantation is so dense that is has virtually drowned the township. It‘s
but natural that ambient temperature in the township is now less by 3-4 degree cells,
compared to the near by Ramagundam, one of the hottest spots in the country.

It‘s in the fitness of things that Kesoram senior president Shri.K.C Jain has been
recommended by the state government to the central government for the prestigious
―Vishwamithra‖ National award.





29

ISO 9002 Certification

 All quality system of Kesoram have been certified under ISO 9002/IS14002 which
proves the worldwide acceptance of the products.
 All quality system in production and marketing of the product has been certified by
B.I.S. under ISO 9002/IS 14002.
Awards

Kesoram Cement captured various awards including national awards for productivity
technology conservation and several state awards. For the year 1989, Kesoram bagged ‗Best
Family Planning Effort in the State‘ by the Federation of A.P. Chambers of Commerce &
Industry and National Awards for ‗mines safety‘ for two successive years 1985-86 & 1986-
87. It also bagged the ‗National Award for Energy Efficiency‘ for the year 1989-90 fir the
best performance among all cement plans in India. This award installed by National Council
for Cement and Building and Material (NCBM) in association with the department of power,
ministry of energy, Govt. of India.

Kesoram bagged the prestigious ‗A.P. State Productivity Award‘ in 1987-88, also
annexed the state award for industrial Management‘ in 1988-89 and also ―Best Industrial
Promotion Effort‖ in the state and ‗ vazamany Ratna‘ and ‘Best Efforts of an Industrial Unit‘
in the state to developed ‗Rural Economy‘ development programs for the year 1991 its
bagged ―May Day Award‖ of the Government of Andhra Pradesh for the ―Best
Management‖ and the Pandit Jawaharlal Nehru ―Silver Rolling Trophy‖ for the Industrial
Productivity effort in the State of A.P, by FAPCCI‘ and also The Indria Gandhi Memorial
National Award for excellence in industry. ‗Best Management Award‘ of the Govt. of A.P.
for the year 1993, and it got the prestigious award ―ISO-9002‖ award for its quality.
30

During the last 3 years the Govt. of A.P. has given the following awards

Best Management award for the year 1993. Best Industrial Retain Award for the year
1994. Best Industrial Retain award for the year 1995. Environment and Mineral
conversation award for the year 1995. To keep the ecological balance, they have also
undertaken massive tree plantation in factory and township areas and they have been
nominated by Government of India of ―VRIKSHAMITRA AWARD‖. Best effort of an
industrial unit in the state for Rural Development for the year 1994-95, presented by Chief
Minister in March, 1996 and Best Family Welfare Award for the year 1996-97.

Kesoram cement industry has been awarded ISO14001 certificate for its effective
implementation of environment schemes. For improving the standard relating to health and
safety Kesoram cement industry has started implementation of OSHAS 18001 which is still
under progress. Kesoram Basanthnagar limestone mines won three first prize for
environment and pollution control, transport and dust suppression and welfare amenities and
two second prizes for overall performance and operation and maintenance of machines.
Kesoram cement industry has also won the award for workers welfare including family
planning for the year 2000-01 of the federation of Andhra Pradesh Chambers of commerce
and industry, which was presented by the Hon‘ble Chief Minister of Andhra Pradesh Sri N.
Chandra Babu Naidu.







31

Advantages

 Helps in designing sleeker and more elegant structures, giving greater flexibility
in design concept.
 Due to its fine quality, super fine construction can be achieved.
 It gives maximum strength at minimum use for cement with water in the water
cement ratio, especially the 53 Grade BIRLA SUPREME GOLD.
 Improved durability is achieved the permeability it is valuation changes are also
reduced.
 Better water –proofing is achieving due to low heat of hydration as the shrinkage
will be less which means less cracks.
 Better finish is achieved due to fineness and hence better workability. Thus
plastering becomes easier with better finish.
 Faster construction possible as both BIRLA SUPREME GOLD achieve their high
easy strength in just 24 hours and hence the from work can be removed thus
important the saving in cost and time.











32

KESORAM GROUP OF INDUSTRIES

a) Textiles Kesoram Industries Ltd.,
42, Garden Reach Road,
Calcutta—700024.

b) Rayon Kesoram Rayon Triennia (PO),
Dist. Hoogly, West Bengal.

c) Spun Pipes Kesoram Spun Pipes & Foundries,
Bansberia (PO) Dist. Hoogly,
West Bengal.

d) Cement Kesoram Cement,
Basanth Nagar – 505187,
Dist. Karimnagar – Andhra Pradesh

e) Cement Vasavadatta Cement,
Sedam – 585222,

Dist. Gulargah – Karnataka.
f) Tyres Burka Tyres,
Shiva Chambers,
53, Syed Amir Ali Aenue,
Calcutta – 700019.

33

SWOT Analysis Of The Cement Industry

Strength

 Cement industry is the core industry in India and it has been given prime
importance by the Government.

 India stands second in World Population and their exists a high untapped market.

 The Cement Industry yield high return on investment (ROI).

 The present level of supply and growing demand of cement clearly indicate that the
prices are tend to price.



Weakness

 The per capital consumption of the cement in India is every now.

 The transport cost in India is very high.

 The cement industry is facing with acute power shortage and raw material
problems.

 The industry is also facing major packaging problems.





34


Opportunity

 The industry has tremendous potential for growth in India.

 In near future cement is going to replace in large scale for the construction of road.

 There are good prospects for exports with cement export promotion council (CEPC).

 The government policies of reduction in excise duty and exempting from jute
packaging may a boon to the industry.


Threats


 The surplus level are increasing as the production of the cement is much greater than
the consumption.

 In the present scenario of stiff completion there is a demanding trend of price.

 The performance of the smaller unit is badly hit by the major takeovers.

 The crisis situation in South East Asian Countries may create problems to the exports
of the industry.






35








CHAPTER 3
















36

DATA ANALASYS & INTERPRETATION

Assets may be described as valuable resources owned by a business which were
acquired at a measurable money cost. As an economic resource, they satisfy three
requirements. In the first place, the resource must be valuable. A resource is valuable if
it is cash / convertible into cash; or it can provide future benefits to the operations of the
firm. Secondly, the resource must be owned. Mere possession or control of a resource would
not constitute an asset ; it must be owned in the legal sense of term. Finally, the resource must
be acquired at a measureable money cost. In case where an asset is not acquired for
cash/promise to pay cash, the test is what it would have cost had cash been paid for it.
How should the changing value of a fixed asset be reflected in a company’s accounts?
The benefits that a business obtains from a fixed asset extend over several years. For
example, a company may use the same piece of production machinery for many years,
whereas a company-owned motor car used by a salesman probably has a shorter useful life.
By accepting that the life of a fixed asset is limited, the accounts of a business need to
recognize the benefits of the fixed asset as it is ―consumed‖ over several years. This
consumption of a fixed asset is referred to as depreciation.
Definition of depreciation
Financial Reporting Standard 15 (covering the accounting for tangible fixed assets)
defines depreciation as follows:
“the wearing out, using up, or other reduction in the useful economic life of a
tangible fixed asset whether arising from use effusion of time or obsolescence through either
changes in technology or demand for goods and services produced by the asset.”
A portion of the benefits of the fixed asset will be used up or consumed in each
accounting period of its life in order to generate revenue. To calculate profit for a period, it is
necessary to match expenses with the revenues they help earn.
37

In determining the expenses for a period, it is therefore important to include an amount to
represent the consumption of fixed assets during that period (that is, depreciation) In essence;
depreciation involves allocating the cost of the fixed asset (less any residual value) over its
useful life. To calculate the depreciation charge for an accounting period, the following
factors are relevant:
 the cost of the fixed asset;
 the (estimated) useful life of the asset;
 the (estimated) residual value of the asset.

What is the relevant cost of a fixed asset?
The cost of a fixed asset includes all amounts incurred to acquire the asset and any
amount that can be directly attributable to bringing the asset into working condition.
 Directly attributable cost may include:
 Delivery costs
 Costs associated with acquiring the asset such as stamp duty and import duties
 Costs of preparing the site for installation of the asset
 Professional fees, such as legal fees and architects‘ fees
Note that general overhead costs or administration costs would not costs of a fixed
asset (e.g. the cost of the factory building in which the asset is kept, or the cost of the
maintenance team who keep the asset in good working condition)
The cost of subsequent expenditure on a fixed asset will be added to the cost of the
asset provided that this expenditure enhances the benefits of the fixed asset or restores any
benefits consumed. This means that major improvements or a major overhaul may be
capitalized and included as part of the cost of the asset in the accounts.


38

The depreciable amount of a fixed asset – that is, cost minus salvage value – may be
written off in different ways. For example, the amount may be spread evenly over the years
affected as in the straight-line method. The units of production method bases depreciation for
each period on the amount of output. Two accelerated methods, the double declining balance
method and the sum-of-the years‘-digits method, provide for greater amounts of depreciation
in the earlier years.

What is the Useful Life of a fixed asset?
An asset may be seen as having a physical life and an economic life. Most fixed assets
suffer physical deterioration through usage and the passage of time. Although care and
maintenance may succeed in extending the physical life of an asset, typically it will,
eventually, reach a condition where the benefits have been exhausted.
However, a business may not with to keep an asset until the end of its physical life.
There may be a point when it becomes uneconomic to continue to use the asset even though
there is still some physical life left.
The economic life of the asset will be determined by such factors as technological
progress and changes in demand. For purposes of calculating depreciation, it is the estimated
economic life rather than the potential physical life of the fixed asset that is used.

What about the Residual Value of a fixed asset?
At the end of the useful life of a fixed asset the business will dispose of it and any
amounts received from the disposal will represent its residual value. This, again, may be
difficult to estimate in practice. However, an estimate has to be made. If it is unlikely to be a
significant amount, a residual value of zero will be assumed.



39

Trend Analysis: In Financial Analysis the direction of changes over a period of years is
of initial importance. Time series or trend analysis of ratios indicators the direction of
change. This kind of analysis is particularly applicable to the items of profit and loss
account. It is advisable that trends of sales and net income may be studies in the light of two
factors.
The rate of fixed expansion or secular trend in the growth of the business and the
general price level. It might be found in practice that a number of firms would be shown
price level. It might be found in practice that a number of firms would be shown a persistent
growth over period of years.
But to get a true trend of growth, the sales figure should be adjusted by a suitable
index of general prices. In other words, sales figures should be deflated for rising price level.
Another method of securing trend of growth and one which can be used instead of the
adjusted sales figure or as check on them is to tabulate and plot the output or physical volume
of the sales expressed in suitable units of measure. If the general price level is not considered
while analyzing trend of growth, it can be mislead management they may become unduly
optimistic in period of prosperity and pessimistic in duel periods.
For trend analysis, the use of index numbers is generally advocated the procedure
followed is to assign the numbers 100 to items of the base year and at calculate percentage
change in each items of other years in relation to the base year. The procedure may be called
as ‗fixed percentage method‘.
This margin determines the direction of upward or downward and involves the
implementation of the percentage relationship of the each statement item beans to the same in
the base year. Generally the first year is taken as the base year. The figure of the base year
are taken as 100 and trend ratio he other year are calculated on the basis of one year. Here an
attempt is made to known the growth total investment and fixed assets of Kesoram Cement
Industries for six years that is 2007-2008 to 2011-2012.
40

1) GROWTH OF TOTAL INVESTMENTS & FIXED ASSETS


we can get TREND PERCENTAGE value through using the following formula i.e

CURRENT YEAR INVESTMENT
TREND PERCENTAGE=
___________________________________________
X PREVIOUS YEAR
TREND %
PREVIOUS YEAR INVESTMENT


TABLE – I: GROWTH OF TOTAL INVESTMENTS & FIXED ASSETS



YEAR

INVESTMENT

TREND PERCENTAGE
2007-2008 29.02 100
2008-2009 28.87 99.48
2009-2010 47.83 164.81
2010-2011 61.78 212.88
2011-2012 51.43 177.22




0
50
100
150
200
250
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
100 99.48
164.81
212.88
177.22
T
R
A
D
E

P
E
R
C
E
N
T
A
G
E

YEARS
GRAPH: 1 TREND PERCENTAGE
41

Interpretation
I have taken the percentage of investment as 100 to base year(2007-08)

a) From the analysis of the above table it can be observed that the growth rate of total
investment of Kesoram Cement Industries is in downward trend which shows
table of the Kesoram Cement Industries investment in total investment is
decreasing from time to time during the year 2007-2008.
b) It was recorded 100%. But it is decreasing in the year 2008-2009 which shows that
three is a net decrease by 99.48%.
c) The average investment in total assets was found to be Rs. 28, 19, 24,444 during
the review period. During the period of 2011-2012 the average investment in total
asset was found to be Rs. 2901.51, it was recorded by 64 .69%.
d) The total investment of the 2011-2012is 65,81,54,156.

2) GROWTH RATE IN FIXED ASSETS
This ratio determines the value of fixed assets either increased or decreased.we can
calculate the growth rate in fixed assets by using following formula:
CURRENT YEAR FIXED ASSETS
GROWTHRATE IN FIXEDASSETS =
____________________________________________ X PREVIOUS YEAR
PREVIOUS YEAR FIXED ASSETS

TABLE-II GROWTH RATE IN FIXED ASSETS

YEAR FIXED ASSETS(Cr)

PERCENTAGE
2007-2008 743.22

100
2008-2009 1105.19

148.70
2009-2010 1718.84

231.26
2010-2011 2669.20

359.13
2011-2012 3844.65 517.29

42




Interpretation

Growth rate in fixed assets, the examination of the above table reveals analysis and
interpretation. I have taken the percentage of investment as 100 to base year(2007-08)


a) During the year 2007-08 the assets investment was recorded at 743.22 and it is increased to
Rs.3844.65 in 2011-12 the fixed assets investment is quit satisfactory.
b) The trend percentage in the year 2007-08 is taken as the base year 100% and is was
increased to 517.29 in the year 2011-12.
c) The average growth rate in fixed assets Rs. 2016.22Cr in 5 years.
d) The percentage of the fixed -assets of the company is 517.29 In the year 2011-2012 and it
increased the percentage to compare with the previous year.






0
100
200
300
400
500
600
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
100
148.7
231.26
359.13
517.29
Y
E
A
R

P
E
R
C
E
N
T
A
G
E

YEAR
GRAPH: II GROWTH RATE IN FIXED ASSETS
43


3) FIXED ASSESTS TO NET WORTH

This ratio establishes the relationship between Fixed Assets and Net Worth. This ratio
of ―Fixed Assets‖ to ―Net Worth‖ indicates the extent to which shareholder funds are sunk
into the fixed assets.
Net Worth = Share Capital + Reserves & Surplus + Retained Earnings.

we can calculate the ratio by using the below formula:
GROSS FIXED ASSETS
FIXED ASSETS TO NETWORH =
_______________________________________
x 100
NETWORTH


Table – III FIXED ASSSESTS TO NET WORTH

YEAR NETWORTH GROSS FIXED
ASSETS
RATOIN IN %
2007-2008 654.43 1827.12 279.19
2008-2009 981.92 2530.04 257.66
2009-2010 1330.10 3582.42 269.33
2010-2011 1540.24 4926.99 319.88
2011-2012 1300.25 5,478.69 421.36
44



Interpretation
a) The Gross Fixed to Net worth Ratio is fluctuating from year to year. In the year
2007-2008 the gross fixed assets to net worth ratio is 279.19 in the year 2010-2011
fixed assets to net worth to acquire the ratio is 319.88.
B) The highest ratio recorded in 2011-2012 at 421.36% the lowest ratio is recorded at
257.66 in the year 2008-2009.








0
100
200
300
400
500
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
279.19
257.66
269.33
319.88
421.36
R
A
T
I
O

I
N

P
E
R
C
E
N
T
A
G
E

YEAR
GRAPH iii: FIXED ASSESTS TO NET WORTH
45

4) FIXED ASSETS AS A PERCENTAGE TO LONG TERM
LIABILITIES
Fixed Assets ratio a various of fixed assets to net worth is a ratio of fixed assets to
long term funds which is calculated as:
FIXED ASSETS (After Depreciation)
FIXED ASSETS TO LONGTERM LIABILITIES =
__________________________________________
* 100
LONG TERM LIABILITIES

TABLE– IV FIXED ASSETS AS A % TO LONG TERM LIABILITIES
YEAR FIXED ASSETS LONG TERM
FUNDS
PERCENTAGE
2007-2008 1105.19 348.48 317.15
2008-2009 1718.84 377.14 455.75
2009-2010 2669.20 416.05 641.55
2010-2011 3844.65 1111.58 345.87
2011-2012 4129.53 1483.36 278.39

Graph: FIXED ASSETS AS A %TO LONG TERM LIABILITIES



0
100
200
300
400
500
600
700
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
317.15
455.75
641.55
345.87
278.39
P
E
R
C
E
N
T
A
G
E

YEAR
46

Interpretation

a) The fixed assets as a % of long-term liabilities the ratio is functioning from year to
year. The fixed assets as a percentage of long term liabilities is recorded at 317.15%
in the year 2007-2008 and it is recorded at 278.39% in the year 2011-2012.
b) The highest ratio is recorded at 641.55 in the 2009-2010 the lowest ratio is 278.39%
in 2011-2012.

5) FIXED ASSETS AS PERCENTAGE CURRENT LIABILITIES
The ratio measures the relationship between fixed assets and the funded debt and is
a very useful so the long term erection. The ratio can be calculated as below.
We can calculate the fixed assets as a percentage current liabilities by using following
formula i.e
FIXED ASSETS
FIXED ASSETS AS PERCENTAGE CURRENT LIABILITIES =
______________________________


CURRENT LIABILITIES


Table – V FIXED ASSETS AS PERCENTAGE CURRENT LIABILITIES
YEAR FIXED
ASSETS(Cr)
CURRENT
LIABILITIES (Cr)
RATIOS %
2007-2008 1105.19 362.53 3.04
2008-2009 1718.84 633.42 2.71
2009-2010 2669.20 394.50 6.76
2010-2011 3844.65 543.61 7.07
2011-2012 4,129.53 767.53 5.30


47

GRAPH: FIXED ASSETS AS % CURRENT LIABILITIE



Interpretation

a) The ratio was fluctuating trend percentage in review period.
b) From the above table it is observed that the ratio was recorded at 3.04% in the 2007-
2008 and its gradually changing to 7.07% in 2010-2011 which indicates that the current
funds are used fixed assets which is quite satisfactory.
c) The average ratio was recorded at during 5% the review period of time.
d) The highest ratio was recorded at 7.07% which are higher than the average ratio.
e) The lowest ratio was recorded at 2.71% which is less than the average ' ratio.
f) The ratio in the year 2011-2012 is 5.30% which is less than the previous year ratio.





0
1
2
3
4
5
6
7
8
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
3.04
2.71
6.76
7.07
5.3
P
E
R
C
E
N
T
A
G
E

YEAR
48

6) TOTAL INVESTMENT TURNOVER RATIO
The total investment turnover ratio can be calculated by the formula as
Sales
Total investment Turnover Ratio =
______________________

Total investment
Table – VI TOTAL INVESTMENT TURNOVER RATIO
YEAR SALES (In Lacks) TOTAL
INVESTMENT(In
Lacks)
RATIOS %
2007-2008 2516.46 28.87 87.16
2008-2009 3440.32 47.83 71.92
2009-2010 4292.07 61.78 69.47
2010-2011 5020.63 51.43 97.62
2011-2012 5750.72 65.82 87.37

GRAPH: VI TOTAL INVESTMENT TURNOVER RATIO

0
20
40
60
80
100
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
87.16
71.92
69.47
97.62
87.37
R
A
T
I
O

I
N

P
E
R
C
E
N
T
A
G
E

YEAR
TOTAL INVESTMENT TURNOVER RATIO
49

Interpretation
a) The ratio was in increasing trend.
b) During the year 2007-2008 the ratio was recorded at 87.16 and in the 2010-2011 the ratio
was increasing to 97.62.
c) The highest ratio was recorded at 97.62 in the year 2010-2011
47d) The lowest ratio was 69.7 which is lesser than the average ratio.
e) The investment turnover ratio in the year 2011-2012 is 87.37%

7) FIXED ASSETS TURNOVER RATIO
The Fixed Assets Turnover Ratio is the relationship between the sales or cost of goods
/capital assets employed in a business.

SALES
FIXED ASSET TURNOVER RATIO =
_______________________________
*100
TOTAL FIXEDASSETS


Table – VII FIXED ASSET TURNOVER RATIO

YEAR SALES (In
Lacks)
TOTAL
FIXED ASSETS(In Lacks)
RATIOS %
2007-2008 2516.46 1105.19 227.69
2008-2009 3440.32 1718.84 200.15
2009-2010 4292.07 2669.20 160.79
2010-2011 5020.63 3844.65 130.58
2011-2012 5750.72 4129.53 139.26



50


GRAPH-VII FIXED ASSET TURNOVER RATIO




Interpretation
The fixed assets turnover ratio is fluctuating trend during the review period of
time. During the year 2007-2008 the ratio was recorded as227.69% and in the 2010-2011
the ratio was recorded to 130.58%.
a) Average ratio was observed 5% during the review period of time. *
b) the highest ratio was recorded at 227.69% in 2007-2008 which is more than the average.
c) the lowest ratio was 130.58% in the 2010-2011 which is less than the average.
d) In the year 2011-2012 the ratio increased from 130.58% to 139.26%





0
50
100
150
200
250
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
227.69
200.15
160.79
130.58
139.26
R
A
T
I
O

I
N

P
E
R
C
E
N
T
A
G
E

YEAR
FIXED ASSESTS TURNOVER RATIO
51

8) FIXED ASSETS AS PERCENTAGE TO TOTAL ASSETS

FIXED ASSETS
FIXED ASSET AS A PERCENTGE TO TOTAL ASSETS =
______________________________

*100

TOTAL ASSETS

Table – VIII FIXED ASSET AS A PERCENTAGE TO TOTAL ASSET
YEAR FIXEDASSETS
(In Lacks)
TOTAL ASSETS
(In Lacks)
RATIOS %
2007-2008 1105.19 2002.17 55.19
2008-2009 1718.84 2972.92 57.81
2009-2010 2669.20 3992.67 66.85
2010-2011 3844.65 5753.21 66.82
2011-2012 4129.53 6453.48 64.00

GRAPH– VIII FIXED ASSET AS A PERCENTAGE TO TOTAL
ASSET


0
10
20
30
40
50
60
70
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
55.19
57.81
66.85 66.82
64
R
A
T
I
O

I
N

P
E
R
C
E
N
T
A
G
E

YEAR
FIXED ASSESTS AS A % TO TOTAL ASSETS
52

Interpretation

a) Fixed assets to total ratio are fluctuating trend during the review period of time.
b) During the year 2007-2008 the ratio recorded as 55.19% and the year 2010-2011
The ratio increased to 66.82%.
c) Average ratio was observed at 60.08% during the review period of time.
d) The highest ratio was observed at 66.85% in the year 2009-2010 which is more than the
average. The lowest ratio was recorded at 55.19% in the 2007-2008 which is less than
average ratio. In the year 2011-2012the ratio decreased to 64.00%

9) GROSS CAPITAL EMPLOYED
The term ―Gross Capital Employed‖ usually comprises the total assets, fixed as well
as current assets used in a business.

GROSS CAPITAL EMPLOYED = FIXED ASSETS+CURRENT ASSETS

Table – IX GROSS CAPITAL EMPLOYED
YEAR FIXED ASSETS
(In Lacks)
CURRENT ASSETS
(In Lacks)
GROSS CAPITAL
EMPLOYED (In
Lacks)
2007-2008 1105.19 362.53 1467.72
2008-2009 1718.84 633.42 2352.26
2009-2010 2669.20 394.50 3063.70
2010-2011 3844.65 543.61 4388.26
2011-2012 4129.53 767.54 4897.07



53

GRAPH-IX GROSS CAPITAL EMPLOYED



Interpretation
a) From the above the profits of Kesoram Cement Industries are in increasing which is
good for the company. In the year 2009-2010 the PAT is 4388.26 lacks and then it
is increasing.
b) In the year 2007-2008 the PAT is the lowest and in 2011-2012 it observed the highest
.








0
1000
2000
3000
4000
5000
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
1467.72
2352.26
3063.7
4388.26
4897.07
R
A
T
I
O

I
N

P
E
R
C
E
N
T
A
G
E

YEAR
FIXED ASSESTS AS A % TO TOTAL ASSETS
54

11) RETURN ON GROSS CAPITAL EMPLOYED

This ratio is an indicator of the earning capacity of the capital employed in the business.
We can calculate return on gross capital employed by using following formula :
PROFIT AFTER TAX
RETURN ON GROSS CAPITAL EMPLOYED =
_____________________________________
*100

GROSS CAPITAL EMPLOYED

Table – XI RETURN ON GROSS CAPITAL EMPLOYED
YEAR PROFIT AFTER
TAX (In Lacks)
GROSS CAPITAL
EMPLOYED(In Lacks)
RATIOS %
2007-2008 265.68 1467.72 18.10
2008-2009 383.34 2352.26 16.29
2009-2010 378.74 3063.7 12.36
2010-2011 237.33 4388.26 5.40
2011-2012 210.21 4897.07 4.29
GRAPH –XI RETURN ON GROSS CAPITAL EMPLOYED

0
5
10
15
20
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
18.1
16.29
12.36
5.4
4.29
R
A
T
I
O

I
N

P
E
R
C
E
N
T
A
G
E

YEAR
RETURN ON GROSS CAPITAL EMPLOYED
55

Interpretation

a) Return on Gross Capital Employed ratio is fluctuating trend during the review
period of time.
b) During the year 2007-2008 the ratio was recorded at 18.10% and in the year 2010-
2011 the ratio was increased to 5.40% and average ratio is 11.36%.
c) The highest ratio was recorded at 18.10% in the year 2007-2008 which is more than
average ratio.
d) The lowest ratio was recorded at 4.29% in the year 2011-2012 which is less than the
average ratio and also decreased the value if compare with the previous year


12) RETURN ON FIXED ASSETS
This ratio is calculated to measure the profit after tax against the amount invested in
total fixed assets to ascertain whether fixed assets are being utilized properly or not. The
higher the ratio is better to the firm. We can calculate the return on fixed assets by using
below formula:

PROFIT AFTER TAX
RETURN ON FIXED ASSETS =
______________________________
* 100
FIXED ASSETS
Table – XII RETURN ON FIXED ASSETS

YEAR PROFIT AFTER TAX
(In Lacks)
FIXED ASSETS
(In Lacks)
RATIOS %
2007-2008 265.68 1105.19 24.03
2008-2009 383.34 1718.84 22.30
2009-2010 378.74 2669.20 14.18
2010-2011 237.33 3844.65 6.17
2011-2012 210.21 4129.53 5.09
56

GRAPH-XII: RETURN ON FIXED ASSETS


Interpretation

a) Return on Fixed Assets Ratio is decreasing.
b) During the year 2007-2008 the ratio recorded as 24.03% and in the year 2010- 2011the
ratio decreased 6.17%.
c) The average ratio is 14.6%.
d) The highest ratio is recorded at 24.03% in the year 2007-2008, the lowest ratio
is 5.09% in the year 2011-2012.
e) In the year 2011-2012 the ratio is 5.09%,the value decreased if we compare with the
previous year





0
5
10
15
20
25
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
24.03
22.3
14.18
6.17
5.09
R
A
T
I
O

I
N

P
E
R
C
E
N
T
A
G
E

YEAR
RETURN ON FIXED ASSETS
57










CHAPTER 4














58




Suggestions

 From the financial position of the Kesoram Cement Industry is observed that the ratio
fixed assets to turnover is not at all ideal where as a ratio of around 5 is considered as
ideal so the company must and should increase the fixed assets turnover ratio.

 From the financial position of the Kesoram Cement Industry is observed that return
on fixed assets not satisfactory through out all the years, there was a too mutch
fluctuation in the percentage of return on fixed assets so the company should try to
decrease the fluctuations, for that the company should concentrate on sales.


 From the financial position of the Kesoram Cement Industry is observed that on the
basis of ratio fixed assets as percentage to current liabilities, the current liabilities
were increasing as fixed assets increasing gradually. For the purpose of purchasing
fixed assets the company is utilizing current liabilities. It may cause the company to
bare excess interest compare to long term liabilities, so the company should not
depend on the current liabilities to invest in fixed assets.





59



Conclusion
After analyzing the financial position of Kesoram Cement Industries and evaluating
its Fixed Assets Management or Capital Budgeting Techniques in respect of Components
Analysis. Trend Analysis and Ratio Analysis. The following conclusions are drawn from the
project preparation.
 The financial position of Kesoram Cement regarding investment it has been
decreased.

 The total growth rate in fixed assets is increased during the year 2006-07 TO
2011-12 from 100% to 517.29%.

 Regarding the fixed assets as a percentage of current liabilities it is observed it is
decreased.

 Regarding the total investment turnover ratio it is observed that it has been
increased over the years considerably i.e., 64.70% to 97.62% during the period
2006-07 TO 2011-12.

 Regarding the fixed assets turnover ratio it has been observed that it is
satisfactory.

 Regarding the fixed assets to total assets it been observed that there was increased.
As a result it is said to be that the ratio is quite satisfactory.

 Regarding the profit and gross capital employed ratio it can be observed that it has
been increasing over the year i.e., from 980.67% to4388.26%

 From the above study it can be said that the Kesoram Cement Industries Financial
position on Fixed Assets is quite satisfactory.

60




APPENDIX


1) CALCULATIONS


CURRENT YEAR INVESTMENT
TREND PERCENTAGE=
___________________________________________
*PREVIOUS YEAR
TREND %
PREVIOUS YEAR INVESTMENT



CURRENT YEAR FIXED ASSETS
GROWTHRATE IN FIXEDASSETS =
____________________________________________ *PREVIOUS YEAR
%
PREVIOUS YEAR FIXED ASSETS



GROSS FIXED ASSETS
FIXED ASSETS TO NETWORH =
_______________________________________
*100
NETWORTH


FIXED ASSETS AS A PERCENTAGE TO LONG TERM LIABILITIES =

FIXED ASSETS
_________________ *100
LONG TERM FUNDS



61

FIXED ASSETS
FIXED ASSETS AS PERCENTAGE CURRENT LIABILITIES =
______________________________


CURRENT LIABILITIES



SALES
TOTAL INVESTMENT TURNOVER RATIO =
__________________________


TOTAL INVESTMENT


SALES
FIXED ASSET TURNOVER RATIO =
_______________________________
*100
TOTAL FIXEDASSETS

FIXED ASSETS
FIXED ASSET AS A PERCENTGE TO TOTAL ASSETS =
______________________________

*100

TOTAL ASSETS


GROSS CAPITAL EMPLOYED = FIXED ASSETS+CURRENT ASSETS

PROFIT AFTER TAX
RETURN ON GROSS CAPITAL EMPLOYED =
_____________________________________
*100

GROSS CAPITAL EMPLOYED


PROFIT AFTER TAX
RETURN ON FIXED ASSETS =
______________________________
* 100
FIXED ASSETS
62





2)BIBLIOGRAPHY

BOOKS:
1. Financial Management I.M.Pandey
Vikas Publishing Houses Pvt Ltd
2006, 9th Edition.

2. Financial Management Prasanna Chandra
Tata McGraw Hill Publishing Company Ltd
2005, 5th Edition.

3. Total Quality Management P.N.Mukherjee
Prentice Hall India.
2006, Edition.
REPORTS:
1) Company‘s Stores Management
2) Company‘s Annual Report 2011

WEBSITES:
www.kesoram.com
www.brilagroup.com
www.google.com




63