Summer Training project Report

PROJECT REPORT
FOR THE PARTIAL FULLFILLMENT OF THE
REQUIREMENT FOR
MASTER OF USINESS A!MINISTRATION
ON
Working Capital Management and its Appraisal
IN
Birla Corporation Limited
Su"mitte# to$% Su"mitte# "&$%
Mr' Aja& (ang)a* Ume+, Soni
-.'P'/ Finance0 M''A%Part III
A'I'M'S'/Jaipur
1
INDEX
S'N
PARTICULARS PA(E NO'
1 AC2NO3LE!(EMENT 1
4 E5ECUTI.E SUMMAR6 4
7 IN!USTR6 PROFILE%CEMENT ION!USTR6 7
8 PROCESS 9
: TOP TEN CEMENT PLA6ER ;
9 .ARIOUS CHARTS ANAL6SIS <=
> (O.ERNMENT ACTIOJNS ? IMPACT ON IN!USTR6 11
; PEER (ROUPS COMPARISON 14
= COMPAN6 PROFILE 17
1< COMPAN6 LO(O 18
11 E5PORT ACTI.ITIES 1:
14 LOCATION AN! CAPACIT6 OF CEMENT PLANTS 1:
17 MANA(EMENT 1>
18 MISSION ? .ISION 1;
1: OJECTI.E ? OLI(ATION 1=
19 SHAREHOL!IN( PATTERN 4<
1> CORPORATE SOCIAL RESPONSIILIT6 41
1; A3AR!S ? ACHIE.EMENTS 47
1= RA3 MATERIAL FOR CEMENT 4:
4< PLANTS OF IRLA ? FINANCIAL PERFORMANCE 7<
41 S3OT ANAL6SIS 77
44 INTRO!UCTION OF 3OR2IN( CAPITAL 7:
47 T6PES OF 3OR2IN( CAPITAL 7;
48 SI(NIFICANCE OF 3OR2IN( CAPITAL 7=
4: 3OR2IN( CAPITAL RATIO 8<
49 SATEMENT SHO3IN( CAHAN(E IN 3'C' 81
4> CALCULATION OF 3OR2IN( CAPITAL 84
4; .ARIOUS COMPONENETS OF 3OR2IN( CAPITAL 87
4= 3OR2IN( CAPITAL RATIOS ? ANAL6SIS :<
7< FUN! FLO3 ? CASH FLO3 STATEMENTS :>
71 CONCLUSIONS :;
74 MAJOR FIN!IN(S :=
74 ILIO(RAPH6 ? 3ELIO(RAPH6 9<
2
ACKNOWLEDGEMENT
Words are indeed inadequate to convey my deep sense of gratitude to all those who have helped
me in completing this summer project to the best of my ability. Being a part of this project has
certainly been a unique and a very productive experience on my part.
I am really thankful to Mr. Ajay Gangwal, i!e "resident #$inan!e % A!!o&nts' for making all
kinds of arrangements to carry the project successfully and for guiding and helping me to solve all
kinds of quarries regarding the project work. His systematic way of working and incomparable
guidance has inspired the pace of the project to a great extent.
I would also like to thank my mentor and project coordinator! Mr. (amal (is)or *osawar, Asstt.
Manager, #$inan!e % A!!o&nts' for assigning me a project of such a great learning experience
and acquainting me with real life project financing and appraisal.
I am very grateful to Mr. Mal)otra #*raining % "la!ement +,,i!er' o, A"-. IN/*I*0*- +$
MANAG-M-N* % /CI-NC-, 1aip&r. Who has given me the opportunity to do this project in the
Birla Corporation Ltd. and very thankful to all le!t&rers o, A.I.M./. , 1aip&r for their useful
guidance and advise.

"his project would not have been successful without the help of Mr. B.2.Na)ar #-3e!&ti4e
5ire!tor % C-+' of BCL and Mr./.L.5&gar #C)airman' of 2.5.Ind&stries.
#ast but not least I would like to thank all the employees of Birla Corporation Ltd. who have
directly or indirectly helped me with their moral support for the completion of my project.
$0M-/6 /+NI'
3
EXECUTIVE SUMMARY
%ounded in 7878 by the visionary industrialist! /)ri G.5. Birla! at the outskirts of the then (olkata.
Birla Man&,a!t&ring Company #td was the first company of Birla industrial conglomerate. &nder
the stewardship of his nephew! /)ri M.".Birla! the company diversified and expanded its business
interest beyond cement! jute! '() goods! steel casting and auto trims. Birla Corporation limited
is the flagship company of M.".Birla group. It has variety in its basket. "he core business of Birla
)orporation limited is cement! generating 89: of the revenue for the company! ;: jute and 7:
from other sectors.
"he project entitled Working Capital Management and its Appraisal in BCL deals in this
segment. "he term of study was kept limited to make the title true. "he purpose of the report is to
get the in depth understanding of the process of working capital management. With the growing
Indian economy and the government policies for infrastructure the demand for cement is
increasing and seeing this as an opportunity is under taking many new projects for expansion of
the production which are under implementation for increasing the capacity of the plants. Working
capital has been analy*ed in two ways overall study of the working capital of Birla Corporation
Ltd and secondly! plant+wise working capital of Birla )orporation! since the company has seven
plants in different region and each plant has its own working capital.
Borrowings are an important ingredient of funding a business entity. "he lenders must feel
comfortable with their clients and Birla )orporation enjoys this position among their lenders.
Borrowing is done for working capital requirement i.e.! to meet the day to day requirement for
smooth functioning of the production! and term loans for projects of capacity expansion. ,ajor
portion of the borrowing is done from banks at better rate of interest.
"he performance of the cement division of the company during the year was satisfactory. "he
production of cement during the year was -.../ lack tones! compared to production of -..0 million
tones1 the highest ever."he 2atna unit produced .3..3 lacks tones of clinker during the year. "he
cement production at 2atna and 4aebareli was lower at .5.-- lacs tones as compared to .5./6
lack tones during the previous year. "he cement dispatches of 2atna and 4aebareli units where
.5.77 lack tones as compared to .5./8 lack tones during last year.
"he production of 'ortland 'o**olana cement $'')9 at 2atna! however! recorded on all time high
level of 55.66 lack tones as against the previous best of 55.05 lack tones. :ute division of the
company produced ;6883," of jute goods during the year as compared to .8./8," in the
previous year. <uring the year the company has total 6 plants with annual capacity of 53 million
tones.
"he )ompany has posted yet another impressive for the .336+3/ results! which has surpassed all
respective previous levels. It has shown substantial growth in turnover! cash profit! profit before tax
and profit after tax. "he total turnover of company has registered a growth of 55..6= whereas
operating profits for the year where higher by 5/.3;= mainly on account of increase in the volume
4
of blended cement in the overall cement sales! higher realisation and effective cost control
measures taken by the company.
"he profit before tax was up by 58.;6= at 4s.--5.5/ crores as against 4s.705.67 crores in the
previous year. "he profit after tax is ;8;.-/ crores as against 4s. ;.0..; crores in the previous
year. >'2 was -5.55 as against 76.-5 in the previous year.
"he cash earnings of the company improved substantially to 4s.-35.;8 crores as against
4s.56/..- crores in the last financial year. With increase in capacity on account of expansion
projects being undertaken by the company! it is expected that the )ompany would be in a position
to maintain the growth in future years. )ompany has recommended a dividend of 4s 7.33 per
share $73=9 on 6! 63! 3-!;76 ordinary share compared ;.-3 per share $;-=9 last year.
"he objective of this project work is to focus on the working capital of the Birla Corporation and
exploring its potential in the company. "he project contain the basic postulates of working capital!
procedure of analysis of working capital! ratio being used to define the working capital and the
impact of working capital in the company in case of excess or inadequacy. ?lso! the project
contains analysis of estimation of working capital requirement and the procedure to estimate
working capital requirement in manufacturing and trading concern. and from the data available it
can be concluded that it holds a very strong position in the market.
5
Cement Ind&stry<=
)ement industry is one of the important industries to country development in the light of the main
important basis for construction industry and also the important indicator showing domestic
economic growth. In the past! the domestic demand of cement used to be up to ;0 million tons.
But! the severely negative effects from economic crisis in 5886 have caused real estate and
construction industry subdued1 the domestic demand of cement has shrunk and been in
oversupply atmosphere.
&ntil .335.33;! the government has launched many economic actuating policies. "his has
made real estate and construction industry recovered and the demand of cement has been
increasing gradually from .5 million tons in .335 to .- million tons and .0./. million tons in .33.
and .33; respectively1 and the price level is higher in line with increased production cost.
Cement Ind&stry originated in India w)en t)e ,irst plant !ommen!ed prod&!tion in 787> at
"or?andar, G&jarat. "he industry has since been growing at a steady pace! but in the initial stage!
particularly during the period before Independence! the growth had been very slow. 2ince
indigenous production was not sufficient to meet the entire domestic demand! the @overnment had
to control its price and distribution statutorily. #arge quantities of cement had to be imported for
meeting the deficit. "he industry was partially decontrolled in 58/. and this gave impetus to its
pace of growth. Installed capacity increased to more than double from .6 million tones in 58/3+/5
to 0. million tones in 58/8+83.
"he cement industry responded positively to liberali*ation policy and the @overnment decontrolled
the industry fully on 5
st
,arch 58/8. %rom 5885 onwards cement industry got the status of a priority
industry in schedule III of the industry policy statement! which made it eligible for automatic
approval for foreign investment up to -5= and also for technical collaboration on normal terms of
payment of royalty.
?fter the globali*ation and liberali*ation of Indian economy! the cement industry has been growing
rapidly at an average rate of 8 per cent. "he country is now the second largest producer of cement
in the world next only to )hina with a total capacity of 5//.86 million tones. ?dditionally! in the last
two decades! the industry has undergone rapid technological up gradation and growth! and now!
some of the cement plants in India are comparable to the worldAs best operating plants in all
respects.
"ill a few years ago India was importing cement from other countries! as the production could not
meet the demand for the whole country. Bow the tables have turned as India has started exporting
large quantities of cement and clinker to Bangladesh! Bepal! 2ri #anka! ,aldives! ,auritius! ?frica!
2eychelles! Burma! &?>! and 2ingapore etc.

6
India is today the second largest producer of cement in world with an installed capacity of close to
5//.86 million tones per year. 8- = is consumed domestically and only -= is exported. <emand is
growing at more than 53 = per annum. ,ore than 83 = of production comes from large cement
plants. "here are a total of 5;3 large and more than ;-3 small cement manufacturing units in the
country. ,ore than /3= of the cement+manufacturing units use modern environment friendly CdryD
process.
"oday total number of cement companies in Indian market are 76!having number of cement plants
5;8! the installed capacity of large plants is 5//.86 million tones and cement production during
.336+.33/ was 50/.;5 million tones
*)e ,orms o, !ement prod&!ed< =
+rdinary "ortland Cement # +"C '
"ortland "o@@olana Cement # ""C '
"ortland /lag Cement # "/C '
Major players in Indian !ement se!tor<=
ACC
La,arge
G&jarat Am?&ja Cement
0ltrate!) Cement
India Cements
Cent&ry Cements
1aypee Gro&p
Madras Cements
Birla Corporation Limited
7
6ow is "ortland !ement man&,a!t&redA
"here are mainly two processes vi*. CWet processD E the C<ry processD. In CWet processD the
mixing E grinding of raw material is done in wet condition. In C<ry processD the mixing E grinding of
raw material is done in dry condition.
"here is also a C2emi+dry processD in which raw materials are ground dry and then mixed with 53+
57= of water and then further burnt to clinkering temperature.
"he processes of manufacture can also be categori*ed as F"raditional 'rocess of ,anufactureF
8
Cement Ind&stry = IN5IA
+4er4iew
5. Indian cement industry dates back to 5857 + first unit was set+up at 'orbandar with a capacity of
5333 tones
.. )urrently India is ranked second in the world with an installed capacity of 5//.86 million tones.
;. )urrent per capita consumption + /- kgs. as against world standard of .-0 kgs
7. -- + 03= of the cost of production are government controlled
-. )ontinuous @rowth approximately 5.; times of the countryAs @<'.
0. )onstruction is the biggest industry after agriculture in India. It is a industry worth 4s.;33
"housand )rores.
6. <uring .336+.33/ cement demand grew /=!with a firmly country wide rise in prices.
"ransportation G+
"ransportation costs high + freight accounts for 56= of the production cost
4oad preferred mode for transportation for distances less than .-3kms.
However! industry is heavily dependant on roads as the railway infrastructure is not
adequate + shortage of wagons.
+4er4iew o, t)e per,orman!e o, t)e Cement /e!tor G+

"he Indian cement Industry not only ranks second in the production of cement in the world but also
produces quality cement! which meets global standards. However! the industry faces a number of
constraints in terms of high cost of power! high railway tariff1 high incidence of state and central
levies and duties1 lack of private and public investment in infrastructure projects1 poor quality coal
and inadequate growth of related infrastructure like sea and rail transport! ports and bulk terminals.
In order to utili*e excess capacity available with the cement industry! the government has identified
the following thrust areas for increasing demand for cementG

Housing development programmes1
'romotion of concrete highways and roads1
&se of ready+mix concrete in large infrastructure projects1 and
)onstruction of concrete roads in rural areas under 'rime ,inisters @ram 2adak Hojana.
"he types o, !ement in India have increased over the years with the advancement in research!
development! and technology. "he Indian cement industry is witnessing a boom as a result of
which the production of different kinds of cement in India has also increased.
9
By a fair estimate! there are around 55 different types of cement that are being produced in India.
"he production of all these cement varieties is according to the specifications of the cement.
/ome o, t)e 4ario&s types o, !ement prod&!ed in India are<
)linker )ement
Irdinary 'ortland )ement
'ortland Blast %urnace 2lag )ement
'ortland 'o**olana )ement
4apid Hardening 'ortland )ement
Iil Well )ement
White )ement
2ulphate 4esisting 'ortland )ement
In India! the different types of cement are manufactured using dry, semi=dry, and wet pro!esses.
In the production of )linker )ement! a lot of energy is required. It is produced by using materials
such as limestone! iron oxides! aluminum! and silicon oxides. ?mong the different kinds of cement
produced in India! 'ortland 'o**olana )ement! Irdinary 'ortland )ement! and 'ortland Blast
%urnace 2lag )ement are the most important because they account for around 88= of the total
cement production in India.
CAPACITYWISE TOP TEN PLAYERS FOR YEAR 2007-2008

$ figures in ,n."ones9
)I,?'BH )?'?)I"H
HI#)I, J ?)) J ?,B&:? ;/..5
@4?2I, J &#"4? ">)H )>,>B" ;0..-
:?H'>> @4I&'. 8.8;
"H> IB<I?B )>,>B"2 #"<. 8.07
2H4>> )>,>B" 8.53
)>B"&4H ">K"I#>2 E IB<&2"4I>2 #"<. 6./3
BI4#? )I4'I4?"IIB #"<. -.6/
,?<4?2 )>,>B"2 #"<. -.76
#?%?4@> IB<I? '4I(?"> #"<. -.5-
:L )>,>B" 7.;3
10
'roduction E )onsumption "rend in )ementG+
@<' versus cement demand growthG+
11
All=India a4erage !ement pri!e trend
0tili@ation 4ers&s !ement pri!es<=
12
Go4ernment inter4ention impa!ts sentiment
Calendar o, e4ents #sin!e 1an&ary BCD'
13
"he recent @overnment action to ban exports of cement and clinker is not likely to have any major
impact on domestic prices as only ;.0= of total cement production is exported. However! pricing
upside may be capped in coastal @ujarat and ,aharashtra. 4ising inflation had forced the Indian
@overnment to play a proactive role in fixation of prices for the cement sector. ?s a result! the
14
@overnment had announced a flurry of steps during recent months leading to the fury of the
cement manufacturers around the country.
In :anuary! the import duty was reduced to *ero from 5..-=! and in ?pril! the countervailing duty
and additional customs duty on imported cement was reduced to nil. "his posed threat of imports
at prices lower than the local prices! but imported cement has certain entry barriers like high
freight! infrastructure bottlenecks! plus cement industry is highly localised! bulky and have just 7-
days shelf life.
"eer Gro&p Comparison <

'articulars $4s.in crore9
Company Name /ales
/ales
Growt): 2+C-: A"A*M: 5i4 Eld: "F- -"/ Mkt Cap
5 ?)) 0;80.7; 6..// 75../ 56.5- 5./0 55.8; 06.6. 5-5-0.6-
. &ltra"ech )em. -7/7.;- 77./8 7..80 57..0 3.7- 55.07 60./. 555.0.8.
; Birla )orp. 568../7 .-..7 03.0/ 5/.. 5.-0 7..7 -;.35 56;..6;
7 2hree )ement 505;.57 8-.67 58.0. 53.86 3.7/ 50.5. 66.6- 7;06.;6
- : L )em #td 5-.8.06 ;6.86 ;..;0 55.0/ ..36 7.7; ;/.5- 55/..56

Compa! P"o#$%&'-
($)*o"! o# *+& ,ompa!
15
"he company was founded by #ate 2hri @.<.Birla and was incorporated on .-
th
?ugust 5858! in
the name and style of "he Birla :ute ,anufacturing )ompany #imited. ? man of vision and
enterprise! he set up the first Indian Iwned :ute ,ill near Lolkata which marked not only the birth
of the company but also the beginning of the Birla Industrial @roup in India. "he company grew
steadily under his guidance in the earlier years. "hereafter 2hri ,.'.Birla took over the reins of the
company and he helped transform it from a jute mill to a leading multi+product! multi+location
corporate with widespread activities.
"oday! the product range includes cement! jute goods! vinoleum floor covering! auto trims and steel
castings. ?fter the demise of 2hri ,.'.Birla in 5883! 2mt.'riyamvada Birla took over as the
)hairman of the company and under her )hairmanship1 company crossed the 4s.5!333 cores plus
turnover mark. ?fter the demise of 2mt.'riyamvada Birla on ;
rd
:uly .337! 2hri 4.2.lodha took over
as the chairman of the company and under his )hairmanship! company has attained new heights.
"he name of the company was changed to Birla )orporation #imited with effect from .6
th
Ictober!
58// to establish the si*e! image and conglomerate character of the company.
Credit 2ating o, t)e Company
)redit ?nalysis and 4esearch #imited $ )?4> 9 has assigned C)?4> ??D rating for the company
long and medium term facilities of more than one year tenure and '4 5 M $ '4 one plus 9 rating for
short term bank facilities ! aggregating 4s.-33 crores. %urther ! the rating )ommittee of )?4> has
re+affirmed '4 5 M rating and )?4> ?? rating for short term debt and the proposed long term
borrowing programme of the company.

La*& S+"$ M-P-.$"%a La*& Sm*- P"$!am/a0a .$"%a
16
.irla Corporation Limited is a multi+ product conglomerate.
It plays signi,i!ant roles in t)e Cement, 1&te, "C ,loor Co4ering, A&to *rim and /teel
!asting ind&stries.
*)e !on!entri! aro&nd t)e triangle represents t)is 4ery m&lti=dimensional nat&re.
*)e ape3 o, t)e triangle is a 4is&al representation o, t)e ,or!e t)at dri4es t)e entire
!orporation G t)e &ni,ying ,or!e in sear!) o, e3!ellen!e.
*)e !ir!le represents t)e inspiration to e3plore new ,rontiers o, growt).
5i4ision Wise -3port *&rno4er
2s in !rore
"arti!&lar HCCD= CI : HCC;= CD :
Cement 9J.H9 >J.>J 7C.IC H7.HD
1&te >7.D7 J9.I9 98.H; DD.97
+t)er C.JD C.DH C.DH 7.>H
*otal DD.J7 7CC.CC JC.DI 7CC.CC
CEMENT DIVISION'-
17
)ement is the primary product of the company and accounts for around 83= of the turnover of the
company. "he company has seven cement plants at four locations! namely! 2atna )ement Works $
2)W 9 and Birla (ikas )ement $ B() 9 at 2atna $,adhya 'radesh 9! )handeria )ement Works
$ ))W 9 and Birla )ement Works $ B)W 9 at )handeria $ 4ajasthan 9! <urgapur )ement Works
$ <)W 9 and <urga Hitech )ement $ <H) 9 at <urgapur $ West Bengal 9 and )ement @rinding &nit
at 4aebareli $&ttar 'radesh9. "he present installed capacity of cement is -/./3 lac metric tones per
annum. #ocation wise details are given hereunder<=
Lo!ation +, Cement "lants in India<=
2"?"> "IWB &BI"2
,adhya 'radesh 2atna 2atna )ement Works
Birla (ikas )ement
4ajasthan )handeria Birla )ement Works
)handeria )ement Works
West Bengal <urgapur <urgapur )ement Works
<urga Hitech )ement
&ttar 'radesh 4aebareli 4aebareli @rinding unit
CA"ACI*E< J.DI Mill. *s.
2"?"> "IWB &BI"2 )?'?)I"H ,ill. "s
,.'. 2atna 5.--
4ajasthan )handeria ..33
West Bengal <urgapur 5.03
&ttar 'radesh 4aebareli 3.0;

1UTE DIVISION
"he companyAs jute division has two jute units! one at Birlapur! Budge Budge and the other at
Barkeldanga! Lolkata. "he combined installed capacity of jute unit is 57!333 spindles in the fine
side and .!503 spindles in the coarse side. "he company has a wide market for its products both in
local and international market. ?lmost 7-= of its products are exported to various >uropean
countries! &2? ! :apan and middle >ast. (alue added product such #ino Hessian! carpet backing!
specialty fabrics! matting! continues to be in high demand. %or hydrocarbon free bags! the foreign
market popularly refers the companyAs bags as CBirla /a,e Bags C. "he products are highly rated
in the industry by way of quality and are classified as premium quality.
18
AUTO TRIM DIVISION
?uto "rim <ivision was established in the year 588- . "he production for the year was 5;856;
pcs.as compared to .;;;68 pcs .in the previous year. "he unit are located at Birlapur $ West
Bengal 9! @urgaon $ Haryana 9! and )hakan near 'une $ ,aharastra 9. "he division has also
obtained Ine+2tep "echnology from Italy &tili*ing energy efficient recyclable polypropylene wood
material. "he major customers are ,aruti &dyog #td.! Hindustan ,otors and ,ahindra E ,ahindra
#td.
VINOLEUM DIVISION
"he (inoleum division was established in the year 58/8. "he production for the year was -.3/ lac
sq. mtrs..as compared to -..0 lac sq. mtrs. in the previous year. "he products are marked under
the brand name C Birla (inoleum C and '() floor covering for institutional application is marked in
the brand name of C 2uper )orporate C.
STEEL CASTING
"he company also has a facility for manufacture of steel castings at 2atna with an installed
capacity of ;!6-3 tones of iron and steel castings. "he production for the year was 5.;- tones as
compared to 5;35 tones in the previous year.
2ubsidiary )ompany G Birla :ute 2upply )ompany #imited
G "alavadi )ements #imited
G #ok )ements #imited
G Budge Budge %loor )overing #imited
$-arlier 5LW Limited9
MANAGEMENT
"he day+ to+ day management of the company is being looked after by the )hief >xecutive Ifficer!
2hri B.4.Bahar who is assisted by a team of highly qualified professional persons.
C)airman
19
2hri 4.2. #odha
-5 % C-+
2hri B.4.Bahar

Board o, 5ire!tors
2hri B.L. Lejriwal

2mt Bandini Bopany
2hri Harsh (. #odha
2hri 'racheta ,ajumdar
2hri (ikram 2warup
2hri ?nand Bordia
2hri B.B. "andon
2hri <.B.@hosh
MI//I+N % I/I+N
Mission<
20
"o achieve international standards of excellence in all aspect of division and diversified
business with focus on customer delight through value of product! 2ervices! cost and
reduction.
"o maximi*e creation for wealth and satisfaction for the stakeholder.
"o foster a culture of participation and innovation of employee growth and contribution.
"o cultivate high standards of business ethics and total Nuality ,anagement.
"o provide technology and service through sustained research and development.
"o attain leadership in developing! adopting and assimilating state+of+art technology for
competitive advantage.
Iffered full opportunities and challenges to develop individually enabling career growth.
>ncouraged to acquire knowledge to meet the challenges of new technologies and business
needs in the changing scenario.
>ducated and guided to inculcate and practise right values as are nurtured by the
organi*ation.
ision<
A major diversified! transnational! integrated company with leadership and a strong
environment conscience playing a national role in cement! :ute! ?uto trim! (enolium and
public distribution.
+B1-C*I-/ % +BLIGA*I+N/
+?je!ti4es<
21
"o serve the national interests in the 'roduct and related sectors in accordance and
consistent with @overnment policies.
"o earn a reasonable ate of on interest.
"o maximi*e utili*ation of the existing facilities in order to improve efficiency and increase
productivity.
"o work towards the achievement of self+sufficiency in the field of cement market by setting
up adequate capacity and to build up expertise in lying of crude.
"o further enhance distribution network for providing assured service to customers
throughout the country through expansion of reseller network as per ,arketing 'lanJ
@overnment approval.
+?ligations<
"owards )ustomers and <ealersG "o provide prompt! courteous and efficient service
and quality products at fair and reasonable prices.
"owards 2uppliers< "o ensue prompt dealings with integrity! impartiality and courtesy
and promote ancillary industries.
"owards >mployees< <evelop their capability and advancement through appropriate
training and carrier planning.
"owards )ommunityG "o develop techno+economically viable and environment friendly
products for the benefit of the people.
S(ARE(OLDING PATTERN
22
"he shareholding pattern of the company as on ;5
st
,arch! .336 is as underG

/I.N+ 5-/C2I"*I+N :
I "romoters, Asso!iates % 5ire!tors ;H.8C

II M&t&al $&nds % 0*I ;.9C
III Banks, $inan!ial Instit&tion % Ins&ran!e Companies D.IJ
I $oreign Instit&tional In4estor I.J>
"ri4ate Corporate Bodies J.H;
I Indian "&?li! I.JD
II N2Is % +BCs C.JI

*+*AL
7CC.CC
)orporate 2ocial 4esponsibilitiesG+
>ducational ?ctivitiesG+
23
2outh 'oint 2chool! Lolkata! West Bengal
,.'. Birla %oundation Higher 2econdary 2chool! Lolkata! West Bengal
,.'. Birla 2hiksha Bhawan! ?llahabad! &ttar 'radesh
,.'. Birla Industrial "raining Institute! 4ewa! ,adhya 'radesh
Birlapur (idyalaya! West Bengal
Birla (ikas (idyalaya! 2atna! ,adhya 'radesh
2chool at )hittorgarh! 4ajasthan
2arada Lanya (idyapith! Barrackpore! West Bengal
,.'. Birla %oundation (eda 2anskrit 'athshala! Bangalore! Larnataka
,edical ?ctivities G+
Bombay Hospital! ,umbai! ,aharashtra
Belle (ue )linic! Lolkata! West Bengal
,.'. Birla ,edical 4esearch )entre at Birlapur! West Bengal and 2atna!
,adhya 'radesh
Birla (ikas Hospital! 2atna! ,adhya 'radesh
Birlapur Hospital! Birlapur! West Bengal
<ispensary at ?llahabad! &ttar 'radesh
Hindustan ,edical Institution at Barrackpore! West Bengal
Ither 'hilanthropic ?ctivities G+
24
,.'. Birla 'lanetarium! Lolkata! West Bengal
>xpress <airy! Behala! Lolkata! West Bengal
:oka ?gricultural E Horticultural 2ociety! :oka! West Bengal
/+CIAL /-2IC-/<=
Water $a!ilities in /atna % C)anderia.
2oads in C)anderia.
Cleanness Campaign wit) Killa "aris)ad in C)anderia.
AWA25/ % AC6I--M-N*/<=
&s to do more...
25

CA"-.IL /pe!ial -3port Award e4ery year, sin!e 788C
I2I 833. certification for 2atna )ement Works! Birla (ikas )ement and <urgapur )ement
Works.
I2I 8335 + .333 $N,29 certification for Birla )ement Works! )handeria )ement Works
from B(NI! &L.
I2JI2I 57335 certification in 5888+.333 for 2atna )ement Works and Birla (ikas )ement! in
.33.+.33; for Birla )ement Works E )handeria )ement Works for environment
management systems.
FBest in >nergy 'erformanceF in 58/0+/6.
FBest in >nergy 'erformanceF for 2atna )ement Works in 588;+87! 5887+8-! 588-+80!
5886+8/.
FBest improvement in "hermal >nergy 'erformanceF recognition from B)B for Birla )ement
Works in 588.+8; and )handeria )ement Works in 588;+87.
.
FBhama 2hah 2ammanF from the 4ajasthan @overnment for >ducational ?ctivities for Birla
)ement Works in 5880+86.
F>xcellence in Improving ,achinery Health )onditionF in 5886.
,inistry of #abour! @overnment of India! for Birla )ement Works E )handeria )ement
Works in 588/+88 and again in .335+3..
F#al Bahadur 2hastri ,emorial Bational ?wardF for >xcellent 'ollution )ontrol
Implementation by )handeria )ement Works in .33.+3;.

Co*"$23*$o *o Na*$oa% E4,+&53&" #o" *+& !&a" &0&0 2007-2008
26
DUTY STRUCTURE FOR T(E YEAR 20007-08
'?4"I)&#?42
>K)I2> <&"H$ 4sJ tones 9 833
)ustom duty $=9
2pecial additional custom duty $ = 9
Bill
7
?vg. sales tax J (?" $ = 9 5..-
4oyalty E cess on #imestone $4s J
tones9
08
4oyalty on coal $ 4s.J tones 9 ..
<uties on power tariff $ 4s.J tones9 .6
2ourceG B)#
RAW MATERIAL FOR CEMENT
Limestone<= #imestone is the main raw material for manufacture of cement. %or manufacturing
one tone of cement! a quantity of 5.- tone of limestone is required. India is endowed with large
27
deposits of limestone. "he estimated total reserves of cement+grade limestone are 8- billion
tonnes. "here is a concentration of about 6; per cent of the total reserves in five 2tates! namely
?ndhra 'radesh! Larnataka! @ujarat! 4ajasthan and ,adhya 'radesh. Bot surprisingly these -
states account for more than --= cement production in the whole country. "here are other
industries such as Iron E 2teel! %ertili*ers and )hemicals! which also use limestone as raw
material! but the cement industry is the largest consumer accounting for about 6-+/3= of total
limestone production.
Gyps&m<= @ypsum is another raw materials used mainly as a retarding agent along with clinker
during the manufacture of cement. It is used during the grinding stage of clinker. )onsumption of
gypsum varies from . to 0 per cent in different plants depending upon the quality of clinker. ?t the
present level of production! the annual requirement of gypsum is estimated at about -.3 million
tonnes. India has good reserves of natural gypsum! which are mainly concentrated in three 2tates!
namely! 4ajasthan! @ujarat and "amil Badu.
Coal<= )oal is an important input in the manufacture of cement both as a fuel and as a feed+stock.
?s a fuel its heal value provides thermal energy for the operation of cement kiln and as a feed+
stock its mineral content $silica9 acts as a constituent in clinker. %or every tone of clinker! around
.33+..3 kg of coal is consumed! which accounts for 5-+.3= of total cement production cost.
)ement accounts for around 7.-= of IndiaAs coal demand. But in recent years due to deteriorating
quality of Indian coal with increasing prices! cement industry has started importing coal and using
alternative fuel such as lignite or pet coke.
"ower<= )ement companies use power mainly for three purposes! which are raw meal grinding!
Liln rotation and clinker grinding. >ach stage roughly accounts for one third of the total power
)onsumption. )ement industry requires an average of 553+5.3 units of power per tones of cement
produced which accounts for 5-+.3= of the variable cost of cement manufacturing.
<ue to increasing power costs and power cuts! many plants have started to setup their own
captive thermal power plants which serve them dual purpose of reduce power cost with
uninterrupted supply of power.

Gran&lated Blast $&rna!e /lag #GB$/'<= "he other raw materials that are also used in the
manufacture of cement are blast furnace slag $a waste product obtained from iron+smelting
furnaces9 and fly ash $leftover ash from a thermal power station9. #imestone contains about -.= of
lime and about /3= of this lime is lost during ignition of the raw materials.
2imilarly! )lay contributes about -6= silica of which about .-= is lost during ignition. @B%2 is
obtained by granulation of slag obtained as a by+product during the manufacture of steel. It is a
complex calcium aluminum silicate and has latent hydraulic properties. "hat is why it is used in the
manufacture of 'ortland blast furnace slag cement.
"ortland "o@@olona CementG +
It is known as strongest cement for strong and durable structures. In <urgapur Hi+tech plant at
<urgapur produces Birla )ement 2amrat! using high quality clinker! high+quality fly ash from
28
modern power plants and gypsum. "his 'ortland 'o**olana )ement $'')9 brand has all the
advantages of -;+@rade )ement.
"ortland !ementG+
'ortland cement is a blend of finely pulveri*ed clinker! produced by burning at high temperature
materials containing lime! alumina! iron and silica in pre+determined proportion to give the desired
end properties. Bormally! @ypsum or its derivatives are added during grinding stage for set control.
When mixed with water alone or in combination with sand and stone! it has the property of
combining slowly with water to form hard mass.
4aw ,aterials used in the manufacture of 'ortland cementG+
"he two principal raw materials used in the manufacture of 'ortland )ement are calcareous
material such as limestone! chalk! shells or marl and argillaceous materials such as clay and
shale$rich in silica9.
'ortland )ement manufacturing processG+
"he raw materials! i.e. calcareous and argillaceous with correctives are finely ground and
intimately blended and fired in a rotary kiln at high temperature of 57-3+5-333). "he material
which emerges from kiln is called )linker. "he clinker is cooled and ground to fine power along with
small quantity of gypsum $7+-=9 to give 'ortland cement.
'o**olonaG
'o**olona are amorphous alliaceous and aluminous materials which by itself have no
cementations properties but in presence of )alcium Hydroxide liberated by hydration of is cooled
and ground to fine power along with small quantity of gypsum $7+-=9 to give 'ortland )ement.
I') reacts chemically with it at ordinary temperatures to form compounds possessing
cementations properties.
'ortland 'o**olona )ement has two most trusted brands belong to this categoryG
Birla )ement 2amrat
Birla )ement 2amrat 'remium
2pecial featuresG
6ig)er ,inesse ,or impro4ed worka?ility
29
2esistan!e to alkali=aggregate rea!tion
Low )eat o, 6ydration res&lting in red&!tion in !ra!king
Impro4ed resistan!e to s&lp)ate atta!k
6ig)er long=term strengt) o4er +"C
/egregation= ,ree !o)esi4e mi3 ,or e3!ellent ,inis)
Lower !)loride !ontent to minimi@e !orrosion
/lagG
2lag is a non+metallic product consisting essentially of gases containing silicates! aluminosilicaten
of lime and other bases and is obtained as a byproduct with iron in blast furnace or electric pig iron
furnace.
@ranulated slag is used in the manufacture of 'ortland 2lag )ement.
0ses o, /lag Cement<
2lag )ement can be used for all plain and reinforced concrete construction! mass concreting
structures such as dams! reservoirs! swimming pools! river embankment! canal piers! etc. where
low heat of hydration and resistance to alkali silica reaction are desired! structure in aggressive
environments where chemical and mildly acidic water are encountered $where I') cannot used9!
marine construction! dykes! wharves! etc. where sulphatic water is present.
"ortland /lag Cement )as t)ree ?randsG
Birla )ement 2amrat
Birla 'remium )ement
Birla )ement
/pe!ial ,eat&resG+
Higher )ompressive 2trength
#ow Water ?bsorption
Increased Workability
#ow 2hrinkage
2ulphate 4esistance
<esired durability
+rdinary "ortland Cement<
30

BrandsG
5. Birla )ement Lhajurao!
.. Birla )ement )hetak
/pe!ial properties o, t)ese ?rands<
31
,oderate sulphate resistance.
(ery low chloride content to avoid corrosion in steel.
Nuicker rate of strength development.
Improved workability.
Better surface finish.
Birla Cement ()aj&ra)oF C)etak=J9 Grade +rdinary "ortland Cement<
're+stressed grinders and electric poles.
%or ready+mix concrete.
, .- and above concrete.
4oads! runways! industrial building! 4)) bridges tunnels and high rise buildings.
?ll types of general constructions.
Birla Cement ()aj&ra)oFC)etak=>9 Grade +rdinary "ortland !ement<=
Brick and stone masonry.
'lastering and flooring.
%or ready+ mix concrete.
'lain and reinforced cement concrete.
're+cast and pre+stressed concrete.
4)) bridges! high+rise buildings and concrete roads.
?ll types of general constructions.
"lants w)ere it is man&,a!t&red<
2atna )ement Works and Birla (ikas )ement! 2atna.
Birla )ement Works and )handeria )ement Works! )handeria.
/pe!ial ,eat&res o, !ement man&,a!t&red ?y BCL are <=
Ideal for mass concreting.
4educed thermal cracks.
Increased water tightness of concrete.
Ideal for plastering.
@reater resistance to sulphate and other aggressive environments.
@reater resistance to alkali+ aggressive reaction.
Increased durability.
"lants +, Birla Corporation Limited $or Cement "rod&!tion<=
32
/atna "lants <
*otal !apa!ity< 7J,JC,CCC tones.

C)anderia "lants<
*otal !apa!ity< HC, CC,CCC tonnes.


5&rgap&r "lant G
33
Capa!ity< ;, CC,CCC tonnes
A new !ement plant is esta?lis)ed in 5&rgap&r, w)i!) is 5&rgap&r 6ig)=te!) !ement.
*)is plant )as t)e !apa!ity o, 7C, CC,CCC tones o, !ement prod&!tion.
*)&s total prod&!tion !apa!ity at 5&rgap&r is 7;, CC,CCC tones per year.
2ae?areli "lant G
(IG(ILIG(TS OF FINANCIAL PERFORMANCE o# .CL
34
# 2s. In !rores '
"A2*IC0LA2/ HCCJ=C; HCC;=CD

HCCD=CI
7.*+*AL INC+M- 7HHI.;7 7J89.>7 7D;9.CJ
H.*+*AL -."-N5I*02- 7C9;.D> 7CD9.>8 77>8.9I
9.+"-2A*ING "2+$I* 787.ID J78.8H ;79.;D
>.IN*2-/* 79.;H 7I.J9 H7.CJ
J."2+$I* A$*-2 IN*2-/* B0*
B-$+2- 5-"2-CA*I+N % *A. 7DI.HJ JC7.98 J8H.;H
;.5-"2-CA*I+N 9>.7; 98.;J >7.>>
D."$+$I* B-$+2- *A. 7>>.C8 >;7.D> JJ7.7I
I."2+$I* A$*-2 *A. 7HJ.D; 9H;.H9 989.JD

$&t&re o, t)e Cement Ind&stry<
@overnment policies have affected the growth of cement plants in India in various stages. "he
control on cement for a long time and then partial decontrol and then total decontrol has
contributed to the gradual opening up of the market for cement producers. "he consumption of
cement is determined by factors influencing the level of housing and industrial construction!
irrigation projects! and roads and laying of water supply and drainage pipes etc. "he level and
growth of @<' and its sectoral composition! capital formation! development expenditure! growth in
population! level of urbani*ation! etc! in turn! determine these factors. But the domestic demand for
cement is mainly from the housing activities and infrastructure development.
"he government paved the way for the entry of the private sector in road projects. It has amended
the Bational Highway ?ct to allow private toll collection and identified projects! bridges!
expressways and big passes for private construction. "he budget gave substantial incentives to
private sector construction companies. Ingoing liberali*ation will lead to an increase in industrial
activities and infrastructure development. 2o it is hoped that Indian cement industry shall boom
again in near future.
SWOT ANALYSIS OF .IRLA CORPORATION LIMITED
35

/trengt)s<=
7. *)e ind&stry is likely to maintain its growt) moment&m and !ontin&e growing at
a?o&t 8 G 7C: in t)e ,oreseea?le ,&t&re.
H. Go4ernment initiati4e in t)e in,rastr&!t&re se!tor s&!) as t)e !ommen!ement o, t)e
se!ond p)ase o, t)e National 6ig)way 5e4elopment proje!t, ,reig)t !arriers, r&ral
roads and de4elopment o, t)e )o&sing se!tor, are likely to ?e t)e main dri4ers o,
growt).
9. Meas&res initiated ?y t)e Go4ernment towards p&?li!=pri4ate partners)ip ,or remo4ing
?ottlene!k in t)e de4elopment o, in,rastr&!t&re in t)e !o&ntry, a&g&rs well ,or t)e
ind&stry.
>. In t)e !oming ,ew years t)e demand ,or t)e !ement will in!rease w)i!) will ?e
?ooming news ,or !ement man&,a!t&res.
J. $or t)e p&rpose o, t)e pa!king o, essential item, j&te prod&!ts w)i!) are en4ironment
,riendly and ?iodegrada?le !)ara!teristi! are !onsidered as ?est option.
Weaknesses
6- 6ig) !apital !ost and in4estment !ost ,or ea!) and e4ery proje!t.
2- *)e !omple3 -3!ise 5&ty str&!t&re ?ased on t)e !ategory o, ?&yer and end &se o, t)e
!ement )as !a&sed at lot o, !on,&sion in t)e ind&stry.
7- *)e re!ent ?an on e3port o, !ement !linker wo&ld in!rease t)e a4aila?ility o, !ement in
t)e domesti! market, w)i!) in t&rn wo&ld p&t press&re on !ement pri!es.
8- *)e major !on!ern ,or t)e ind&stry are <
Contin&o&s in!rease in la?o&r !ost.
/)ortage o, skilled la?o&rers.
Appre!iation o, r&pees against ,oreign !&rren!ies.
"ro!&ring o, limestone mines at e!onomi!al pri!e an entry ?arrier.
+pport&nities
36
7. AdeL&ate s&pport ,rom t)e Go4ernment is 4ery essential to promote ?&siness
a!ti4ities.
H. In!rease in t)e prod&!tion and sell o, !ement at di,,erent plants )a4e in!reased t)e
t&rno4er o, t)e !ompany.
9. It wo&ld ?e in t)e interest o, ?ot) t)e go4ernment and t)e ind&stry to work toget)er
wit) aim to streamline t)e indire!t ta3 regime and keep t)e pri!es o, t)e inp&ts s&!) as
!oal &nder !ontrol so t)at t)e !ement pri!e !an ?e maintained at reasona?le le4els.
>. 5espite slig)tly lower e!onomi! growt), t)e !onstr&!tion and in,rastr&!t&re se!tor is
e3pe!ted to re!ord )ealt)y growt), w)i!) a&g&rs well ,or !ement ind&stry.
J. *)e moderni@ation, prod&!ti4ity impro4ement and !ost !ontrol meas&res will impro4e
t)e per,orman!e o, t)e di4ision in times to !ome.
*)reats
*)e re!ent mo4es ?y t)e Central Go4ernment in making t)e import o, t)e !ement total
d&ty ,ree, is a !a&se o, ,or t)e Indian !ement ind&stry.
$&rt)er re!ent !)anges in t)e Central -3!ise 5&ty str&!t&re ?y way o, introd&!tion o,
m&ltiple sla?s o, -3!ise 5&ty is also a !a&se o, worry ,or t)e ind&stry.
Almost all t)e major players in t)e ind&stry )a4e anno&n!ed s&?stantial in!rease in t)e
!apa!ity and t)e possi?ility o, o4er s&pply sit&ation !annot ?e r&led o&t.
In!reased railway ,reig)t, !oal pri!es and dispat!) ?ottlene!ks on a!!o&nt o, tr&!k
Loading restri!tions imposed ?y 4ario&s /tate Go4ernments
/!ar!ity o, good L&ality Coal are some ot)er ,a!tors w)i!) are !a&se o, !on!ern ,or
t)e ind&stry.
37
A I*"o03,*$o To Wo"9$: Cap$*a% Maa:&m&*
CWorking !apital means t)e part o, t)e total assets o, t)e ?&siness t)at !)ange ,rom one ,orm
to anot)er ,orm in t)e ordinary !o&rse o, ?&siness operations.
Con!ept o, working !apital<=
"he word working capital is made of two words 7.Working and H. )apital
"he word working means day to day operation of the business! whereas the word capital means
monetary value of all assets of the business.
Working !apital < =
Working capital may be regarded as the life blood of business. Working capital is of major
importance to internal and external analysis because of its close relationship with the current day+
to+day operations of a business. >very business needs funds for two purposes.
O #ong term funds are required to create production facilities through purchase of fixed assets
such as plants! machineries! lands! buildings E etc
O 2hort term funds are required for the purchase of raw materials! payment of wages! and other
day+to+day expenses.
. It is other wise known as revolving or circulating capital
It is nothing but the difference between current assets and current liabilities. i.e.
Working )apital P )urrent ?sset )urrent #iability.

Businesses use capital for construction! renovation! furniture! software! equipment! or machinery. It
is also commonly used to purchase inventory! or to make payroll. )apital is also used often by
businesses to put a down payment down on a piece of commercial real estate. Working capital is
essential for any business to succeed. It is becoming increasingly important to have access to
more working capital when we need it.

Con!ept o, working !apital
@ross Working )apital P "otal of )urrent ?sset
Bet Working )apital P >xcess of )urrent ?sset over )urrent #iability
38
C&rrent Assets C&rrent Lia?ilities
)ash in hand J at bank
Bills 4eceivable
2undry <ebtors
2hort term loans
InvestorsJ stock
"emporary investment
'repaid expenses
?ccrued incomes
Bills 'ayable
2undry )reditors
Iutstanding expenses
?ccrued expenses
Bank Iver draft
Working !apital in terms o, ,i4e !omponents<
7. Cas) and eL&i4alentsG + "his most liquid form of working capital requires constant supervision.
? good cash budgeting and forecasting system provides answers to key questions such asG Is the
cash level adequate to meet current expenses as they come dueQ What is the timing relationship
between cash inflow and outflowQ When will peak cash needs occurQ When and how much bank
borrowing will be needed to meet any cash shortfallsQ When will repayment be expected and will
the cash flow cover itQ
H. A!!o&nts re!ei4a?le< = ,any businesses extend credit to their customers. If you do! is the
amount of accounts receivable reasonable relative to salesQ How rapidly are receivables being
collectedQ Which customers are slow to pay and what should be done about themQ
9. In4entory< = Inventory is often as much as -3 percent of a firmRs current assets! so naturally it
requires continual scrutiny. Is the inventory level reasonable compared with sales and the nature of
your businessQ WhatRs the rate of inventory turnover compared with other companies in your type
of businessQ

>. A!!o&nts paya?le<= %inancing by suppliers is common in small business1 it is one of the major
sources of funds for entrepreneurs. Is the amount of money owed suppliers reasonable relative to
what you purchaseQ What is your firmRs payment policy doing to enhance or detract from your
credit ratingQ
J. A!!r&ed e3penses and ta3es paya?le< = "hese are obligations of your company at any given
time and represent a future outflow of cash.
*wo di,,erent !on!epts o, working !apital areG+
Balan!e s)eet or *raditional !on!ept
39
+perating !y!le !on!ept.
Balan!e s)eet or *raditional !on!ept<+ It shows the position of the firm at certain point of
time. It is calculated in the basis of balance sheet prepared at a specific date. In this method there are
two type of working capitalG+
@ross working capital
Bet working capital
Gross working !apitalG+ It refers to the firmAs investment in current assets. "he sum of the current
assets is the working capital of the business. "he sum of the current assets is a quantitative aspect of
working capital. Which emphasi*es more on quantity than its quality! but it fails to reveal the true
financial position of the firm because every increase in current liabilities will decrease the gross
working capital.
Net working !apital<+ It is the difference between current assets and current liabilities or the excess
of total current assets over total current liabilities.
Working !apitalM !&rrent assets = !&rrent lia?ilities.
Net working !apital< + It is also can defined as that part of a firmAs current assets which is
financed with long term funds. It may be either positive or negative. When the current assets exceed
the current liability! the working capital is positive and vice versa.
+perating !y!le !on!eptG+ "he duration or time required to complete the sequence of events
right from purchase of raw material for cash to the reali*ation of sales in cash is called the
operating cycle or working capital cycle.
40
*ypes o, Working Capital<=
RAW MATERIAL
WORK IN
PROGRESS
FINISH GOODS SALES
DEBTORS &
BILLS
RECEIABLES
CASH
OPERATIN( C6CLE
T!PES OF
WORKING
CAPITAL
ON THE BASIS OF
B"S CONCEPT
ON THE BASIS OF
TIME
GROSS WORKING
CAPITAL
NET WORKING
CAPITAL
REG#LAR
WORKING
CAPITAL
TEMPORAR!
WORKING
CAPITAL
SEASONAL
WORKING
CAPITAL
SPECIFIC
WORKING
CAPITAL
41
/IGNI$ICANC- +$ W+2(ING CA"I*AL<+
$a!tors reL&iring !onsideration w)ile estimating working !apital.
"he average credit period expected to be allowed by suppliers.
"otal costs incurred on material! wages.
"he length of time for which raw material are to remain in stores before they are issued for
production.
"he length of the production cycle $or9 work in process.
"he length of sales cycle during which finished goods are to be kept waiting for sales.
"he average period of credit allowed to customers
"he amount of cash required to make adance payment
EAS! LOAN
FROM BANKS
INCREASE
EFFECIENC$!
INCREASE IN
FI% ASSETS
INCREASE
DEBT
CAPACIT!
DIIDEND
DISTRIB#TI$
ON
PA!MENT TO
S#PPLIERS
SIGNIFICAN$$
CE OF
WORKING
CAPITAL
42
Importan!e o, Working Capital 2atios
4atio analysis can be used by financial executives to check upon the efficiency with which working
capital is being used in the enterprise. "he following are the important ratios to measure the
efficiency of working capital. "he following! easily calculated! ratios are important measures of
working capital utili*ation.
2atio $orm&lae 2es&lt Interpretation
2tock "urnover
$in days9
?verage 2tock O
;0-J
)ost of @oods 2old
P x days In average! you turn over the value of your entire stock
every x days. Hou may need to break this down into
product groups for effective stock management.
Ibsolete stock! slow moving lines will extend overall
stock turnover days. %aster production! fewer product
lines! just in time ordering will reduce average days.
4eceivables
4atio
$in days9
<ebtors O ;0-J
2ales
P x days It takes you on average x days to collect monies due to
you. If your official credit terms are 7- day and it takes
you 0- days.
Ine or more large or slow debts can drag out the
average days. >ffective debtor management will minimi*e
the days.
'ayables 4atio
$in days9
)reditors O ;0-J
)ost of 2ales $or
'urchases9
P x days In average! you pay your suppliers every x days. If you
negotiate better credit terms this will increase. If you pay
earlier! say! to get a discount this will decline. If you
simply defer paying your suppliers $without agreement9
this will also increase + but your reputation! the quality of
service and any flexibility provided by your suppliers may
suffer.
)urrent 4atio "otal )urrent
?ssetsJ
"otal )urrent
#iabilities
P x times )urrent ?ssets are assets that you can readily turn in to
cash or will do so within 5. months in the course of
business. )urrent #iabilities are amount you are due to
pay within the coming 5. months. %or example! 5.- times
means that you should be able to lay your hands on
S5.-3 for every S5.33 you owe. #ess than 5 times e.g.
3.6- means that you could have liquidity problems and be
under pressure to generate sufficient cash to meet
oncoming demands.
Nuick 4atio $"otal )urrent
?ssets + Inventory9J
"otal )urrent
#iabilities
P x times 2imilar to the )urrent 4atio but takes account of the fact
that it may take time to convert inventory into cash.
Working
)apital 4atio
$Inventory M
4eceivables +
'ayables9J
2ales
?s =
2ales
? high percentage means that working capital needs are
high relative to your sales.

43
/tatement s)owing !)ange in working !apital ,or BCL<=
# 2s.in la!s'
'articulars 36+3/ 30+36 Increase $ M 9 <ecrease $+ 9
C&rrent Assets
Inventories .3377./. 57.-/./; -6/-.88
2und. <ebtors ;565..- .6...76 77/.6/
)ash E Bank ;5;-.0- ;7;8.7. ;3;.66
#oan E ?dvances 76;55..6 ;3-.-.;7 506/-.8;
"otal $ ? 9 D9;;H.88 JC8>;.C;
C&rrent Lia?ilities
).#. ;3538.;. .738..8- 0350.;6
'rovisions ;-;30.8. 58.5-../ 50385.07
"otal $ B 9 ;J>7;.H> >99CI.H9
$ ?+B 9 /.70.6- 60;6./; .;3.3.63 ..755.6/
T in working
!apital
;CI.8H ;CI.8H
"otal IH>;.DJ IH>;.I9 H9CHC.DC H9CHC.DC
/tatement s)owing !)ange in working !apital ,or BCL<
# 2s.in la!ks'
'articulars 30+36 3-+30 Increase $ M 9 <ecrease $ + 9
C&rrent Assets
Inventories 57.-/./; 53-6..;; ;0/0.-
2und. <ebtors .6...76 ..7/... 767..-
)ash E Bank ;7;8.7. -8...-8 .7/;.56
Ither ).?. +++++++++++ ./.;/ ./.;/
#oan E ?dv. ;3-.-.;7 5.77..35 5/3/;.;;
"otal $ ? 9 JC8>;.C; 97H79.J9
C&rrent Lia?ilities
).#. .738..8- .-6-;..5 5003..0
'rovisions 58.5-../ 77/8..5 576.0.36
"otal $ B 9 >99CI.H9 9CHH>H.>H
$ ?+B 9 60;6./; 865.55 .;837.;7 56.;6.0.
N in working
!apital
;;;;.DH ;;;;.DH
"otal D;9D.I9 H98C>.9>
44
CALC0LA*I+N +$ W+2(ING CA"I*AL $+2 BI2LA C+2"+2A*I+N
LIMI*-5

#2s.in la!ks'

E-A2 97.C9.C; 97.C9.CD 97.C9.CI
CURRENT ASSETS
IB(>B"I4I>2 53-6..;; 57.-/./; .3377./.
2&B<4H <>B"I42 ..7/... .6...76 ;565..-
)?2H ?B< B?BL -8...-8 ;7;8.7. ;5;-.0-
I"H>4 )&44>B" ?22>"2 ./.;/ +++ +++
#I?B2 E ?<(?B)>2 5.77..35 ;3-.-.;7 76;55..6
$$$$$$$$$$$$$$ $$$$$$$$$$$$$$ $$$$$$$$$$$$$$$
"I"?# )&44>B" ?22>2"2 ;5.5;.-; -3870.30 6;00..88
$$$$$$$$$$$$$$ $$$$$$$$$$$$$$ $$$$$$$$$$$$$$$
LESS&$
C022-N* LIABILI*I-/ AN5 "2+I/I+N/
)&44>B" #I?BI#I"I>2 .-6-;..5 .738..8- ;3538.;.
'4I(I2IIB 77/8..5 58.5-../ ;-;30.8.
++++++++++++++ ++++++++++++++ ++++++++++++++
"I"?# )&44>B" #I?BI#I"I>2 ;3.7..7. 7;;3/..; 0-750..7
$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$
N-* C022-N* A//-*/ 8D7.77 D;9D.I9 IH>;.DJ
45
/o&r!es o, Additional Working Capital
2ources of additional working capital include the followingG
O >xisting cash reserves
O 'rofits $when you secure it as cash U9
O 'ayables $credit from suppliers9
O Bew equity or loans from shareholders
O Bank overdrafts or lines of credit
O #ong+term loans

ANALE/I/ +$ A2I+0/ C+M"+N-N*/ +$ W+2(ING CA"I*AL
IN-N*+2E ANALE/I/
Inventory is total amount of goods and materials content in a store of factory at any given time.
Inventory means stock of three things G+
5. 4aw materials
.. 2emi finished goods.
;. %inished goods.
"osition o, in4entory in Birla Corporation Limited
$4s.in lacks9
E-A2 97.C9.C; 97.C9.CD 97.C9.CI
2tores! 2pare 'arts etc. -3-7.50 0-35.;/ 88.5.78
M'()*+,-. S/'-,0 +12 *+ -,345'- 40, 56-.77 5;3.55 ..7.;-
$$$$$$$$$$$$ $$$$$$$$$$$ $$$$$$$$$$$$
-..8.03 00;5.78 5357-./7
2tock In trade+
F*+*0),6 G1160 5887.-/ ..6;.68 ;-55.8;
R'7 M'2,-*'50 5.57.0- ;3;..-6 .;70.87
M'2,-*'5 4+6,- /-1(,00 .5;;.-3 .;.3.8/ 7373.55
$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$$
53-6..;; 57.-/./; .3377./.
$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$
46
Analysis t)ro&g) !)art<
IN*-2"2-*A*I+N<
By analy*ing the ; years data we see that the inventories are increased year by year. We are
looking increasing pattern in inventories. We can see that inventories are grown by ;7= and 73=
in 30+36 and 36+3/ respectively from previous year. By this growth we can say that the company is
growing very rapidly in cement sector. ? company uses inventory when they have demand in
market and Birla )orporation is having a great demand in infrastructure sector. "hat is biggest
reason for increase in inventories. %rom other point of view we can say that the liquidity of firm is
blocked in inventories but to stock is very good due to uncertainty of availability of raw material in
time.
/0N52E 5-B*+2/ ANALE/I/
<ebtors or an account receivable is an important component of working capital and fall under
current assets. <ebtors will arise only when credit sales are made.
"osition o, /&ndry 5e?tors in Birla Corporation Limited
$4s.in lacks9
E-A2 97.C9.C; 97.C9.CD 97.C9.CI
5e?ts o&tstanding more t)an ; mont)s
2ecured! )onsidered @ood 556.83 80.37 5;/.;5
&nsecured! )onsidered @ood ;5. ./; 58/./0 .3..8/
$$$$$$$$$$$$ $$$$$$$$$$$$ $$$$$$$$$$$$
7;3.6; .87.83 ;75..8
+t)er 5e?ts
2ecured! )onsidered @ood .7/.6; .7;.30 ;37.80
&nsecured! considered @ood 5-0/.60 .5/7.-5 .-.-.33
$$$$$$$$$$$$$ $$$$$$$$$$$$$ $$$$$$$$$$$
..7/... .6...76 ;565..-
$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$

47
Analysis t)ro&g) !)art<
IN*-2"2-*A*I+N

In the table and figure we see that there is continuous rise in the debtors of Birla )orporation
#imited in the successive years. ? simple logic is that debtors increase only when sales increase
and if sales increases it is good sign for growth. We can see .5= and 56= growth in 30+36 and
36+3/ respectively from previous years.
We can say that it is a good sign as well as negative also. )ompany policy of debtors is very good
but a risk of bad debts is always present in high debtors. when sales is increasing with a great
speed the profit also increases. If company decreases the
<ebtors they can use the money in many investment plans.
CA/6 AN5 BAN( BALANC- ANALE/I/
)ash is called the most liquid asset and vital current assets! it is an important component of
working capital. In a narrow sense! cash includes notes! bank draft! cheque etc while in a broader
sense it includes near cash assets such as marketable securities and time deposits with bank.
"osition o, Cas) and Bank Balan!e in Birla Corporation Limited
$4s.in lacks9
E-A2 97.C9.C; 97.C9.CD 97.C9.CI
)ash Balance in hand 5760..- 563-.-3 5050.8/
Bank Balance+
With 2cheduled Banks 7770.;7 56;;.8. 5-5/.06
$$$$$$$$$$$$$ $$$$$$$$$$$$$ $$$$$$$$$$$$
-8...-8 ;7;8.7. ;5;-.0-
$$$$$$$$$$$$$ $$$$$$$$$$$$$ $$$$$$$$$$$$
48
Analysis t)ro&g) !)art<
IN*-2"2-*A*I+N
If we analy*e the above table and chart we find that it follows a decreasing trend. In the year .330
it had maintained a huge amount of cash and bank balance which has fallen hugely in the year
.336 but there is slight fall between the year .336 and .33/. ?lthough companyAs cash is
decreasing but this is very good sign for company because they are not holding the cash in hand
but using the cash for better projects. "he analysis shows that the fix deposits of company are
rapidly fallen in last three years as 6.= and 67= in 30+36 and 36+3/ respectively from previous
year. )ompany is utili*ing the fixed cash for exploding the projects that is good for growth!
L+AN/ AN5 A5ANC-/ ANALE/I/
#oans and ?dvances here refers to any to amount given to different parties! company! employees
for a specific period of time and in return they will be liable to make timely repayment of that
amount in addition to interest on that loan.
"osition o, +t)er Loans % Ad4an!es in Birla Corporation Limited
$4s.in lacks9
E-A2 97.C9.C; 97.C9.CD 97.C9.CI
?dvances to subsidiary companies ;7;.65 ;76.;6 583.7.
?dvances 85.3... .6577./; 77075.;6
Interest 4eceivable 75.7/ 55.73 77.00
<eposits .8;0.03 ;3.5.67 .7;7./.
$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$
5.77..35 ;3-.-.;7 76;55..6
$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$
49
Analysis t)ro&g) !)art<

IN*-2"2-*A*I+N
If we analy*e the table and the chart we can see that it follows an increasing trend which is a good
sign for the company. We can see that from the year .330 to .336 it increased more than double.
We can see that the increase of 57-= and --= in 30+36 and 36+3/ respectively from previous
year.
"he increasing pattern shows that company is giving advances for the expansion of plants and
machinery which is good sign for better production of cement and other goods. ?lthough
companyAs cash is blocked but this is good that company is doing moderni*ation of plants In time
to compete with other competitors in market.
C022-N* LIABILI*I-/ ANALE/I/
)urrent liabilities are any liabilities that are incurred by the firm on a short term basis or current
liabilities that has to be paid by the firm with in one year.

50
"osition o, +t)er C&rrent Lia?ilities in Birla Corporation Limited

$4s.in lacks9
E-A2 97.C9.C; 97.C9.CD 97.C9.CI
C4--,+2 L*'8*5*2*,0 9
S4+6-. C-,6*21-0 19195:75 17459:14 21345:32
O2),- L*'8*5*2*,0 6479:15 6559:84 8649:37
I+;,021- E64('2*1+ '+6 P-12,(2*1+ <4+6 12:60 18:99 29:35
I+2,-,02 '((-4,6 842 +12 64, 65:71 54:98 85:28
$$$$$$$$$$$$$ $$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$
25753:21 24092:95 30109:32
$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$$
Analysis t)ro&g) !)art<
IN*-2"2-*A*I+N

If we analy*e the above table then we can see that it follow an uneven trend. "he important
component of current liabilities is sundry creditors and other liabilities. In 30+36 it decreased by 6=
and in 36+3/ it increased by .-=. In 36+3/ it was increased because of growth in other liabilities by
;.=."his is liability for company so this should be less. when company have minimum liabilities it
creates a better goodwill in market. High current liabilities indicate that company is using credit
facilities by creditors.
51
"2+I/I+N/ ANALE/I/
"osition o, +t)er "ro4isions in Birla Corporation Limited
#2s.in la!ks'
E-A2 97.C9.C; 97.C9.CD 97.C9.CI
'roposed <ividend 56;..0. .08-.58 ;3/3...
)orporate <ividend "ax .7;.33 7-/.3- -.;.7/
Income "ax ../5..- 5-080.33 ;5--/.33
%ringe Benefit "ax .;3... ;07.33 575.33
Wealth "ax ;.-8 7.37 7...
%ringe Benefit "ax 3.-; ++++ ++++
+++++++++++++++ +++++++++++++++ ++++++++++++++++
7785..5 58.5-../ ;-;30.8.
+++++++++++++++ ++++++++++++++++ +++++++++++++++++
Analysis t)ro&g) !)art<
IN*-2"2-*A*I+N
%rom the above table we can see that provision shows an increasing trend and the huge amount is
being kept in these provisions. "hough the profits of the company are increased income tax is also
increased which is good that company is creating goodwill in market by paying income tax in time.
"he income tax is increased by -//= and 535= in 30+36 and 36+3/ respectively from previous
year. ?lthough company is paying more income tax but also they are earning more. Ither
provisions are also for the benefit of employees and public. "his is good sign for
)ompany growth.
52
W+2(ING CA"I*AL 2A*I+/ AN5 I*/ IN*-2"2-*A*I+N
"osition o, 2-C-IABL- 2A*I+ in Birla Corporation Limited
FORM#LA
DEBTORS
RECEIABLE RATIO = $$$$$$$$$$$$$$$$ > 365
SALES
E-A2 97.C9.C; 97.C9.CD 97.C9.CI
2-C-IABL- 2A*I+ #IN 5AE/' J.DH J.J9 J.D8
Analysis t)ro&g) !)art<
IN*-2"2-*A*I+N
@enerally a low debtors turnover ratio implies that it considered congenial for the business as it
implies better cash flow. "he ratio indicates the time at which the debts are collected on an
average during the year. Beedless to say that a high <ebtors "urnover 4atio implies a shorter
collection period which indicates prompt payment made by the customer.

Bow if we analy*e the three year data we can say that it holds a good position while receiving its
money from its debtors. "he ratios are in an increasing trend! which implies that recovery position
is good and company should maintain these positions.
53
"osition o, "AEABL- 2A*I+ in Birla Corporation Limited
%I4,&#?
)4><I"I42
'?H?B#> 4?"IIP +++++++++++++++++++++++++++++
)I2" I% 2?#>2

E-A2 97.C9.C; 97.C9.CD 97.C9.CI
"AEABL- 2A*I+ #IN 5AE/' D.DH >.J9 9.8;
Analysis t)ro&g) !)art<
IN*-2"2-*A*I+N
?ctually this ratio reveals the ability of the firm to avail the credit facility from the suppliers
throughout the year. @enerally a low creditors turnover ratio implies favorable since the firm enjoys
lengthy credit period
Bow if we analy*e the three years data we find that in the year .330 the ratio was
very high which means that its position of creditors that year was not good! but in the next two
years it is seen that it has followed a decreasing trend which is very good sign for the company. 2o
we can say it enjoys a very good credit facility from the from the suppliers:
54
"osition o, C022-N* 2A*I+ in Birla Corporation Limited
%I4,&#?
"I"?# )&44>B" ?22>"2
)&44>B" 4?"IIP ++++++++++++++++++++++++++++++++++++++++++++
"I"?# )&44>B" #I?BI#I"I>2

E-A2 97.C9.C; 97.C9.CD 97.C9.CI
C022-N* 2A*I+ 7.C9 7.7I 7.79
Analysis t)ro&g) !)art<
IN*-2"2-*A*I+N
"his ratio reflects the financial stability of the enterprise. "he standard of the normal ratio is .G5 but
in most of companies standard is taken according to "andon )ommittee which is taken as 5.;;G5.
Bow if we analy*e the three years data it can be predicted that it holds a stable position all
through out period but it is seen that it holds a low position than the standard one and the company
is required to improve its position.
55
"osition o, O0IC( 2A*I+ in Birla Corporation Limited
%I4,&#?
"I"?# )&44>B" ?22>"2 + IB(>B"I4I>2
N&I)L 4?"IIP +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
"I"?# )&44>B" #I?BI#I"I>2

E-A2 97.C9.C; 97.C9.CD 97.C9.CI
O0IC( 2A*I+ C.;I C.IJ C.IH
Analysis t)ro&g) !)art<

IN*-2"2-*A*I+N
It is the ratio between quick liquid assets and quick liabilities. "he normal value for such ratio is
taken to be 5G5. It is used as an assessment tool for testing the liquidity position of the firm. It
indicates the relationship between strictly liquid assets whose reali*able value is almost certain on
one hand and strictly liquid liabilities on the other hand. #iquid assets comprise all current assets
minus stock.
By analy*ing the three years data it can be said that its position was weak in the year .330 but it
improved significantly in the next two years and was stable during that year. But it is to be said that
it does not meet with the standard but in the year .336 E .33/ it was very close to the standard
and it can be said that its liquidity position on an average is stable.
56
"osition o, W+2(ING CA"I*AL 2A*I+ in Birla Corporation Limited
%I4,&#?
IB(>B"I4H M 4>)I(>?B#> + '?H?B#>
WI4LIB@ )?II"?# 4?"IIP +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
$?2 = I% 2?#>29 2?#>2
E-A2 97.C9.C; 97.C9.CD 97.C9.CI

W+2(ING CA"I*AL 2A*I+ J.8J D.IC 7C.H7
Analysis t)ro&g) !)art<
IN*-2"2-*A*I+N
"his ratio indicates whether the investments in current assets or net current assets $ i.e.! working
capital 9 have been properly utili*ed. In order words it shows the relationship between sales and
working capital. Higher the ratio lower is the investment in working capital and higher is the
profitability. But too high ratio indicates over trading.
"his ratio is an important indicator about the working capital position. Bow if we analy*e the three
years data! we find that it follows an increasing trend which means that its investment in working
capital is lower and the company is utili*ing more of its profit. But we find that ratio is increasing at
a very fast rate which is not a good sign for the company and the company is required to look into
these matters closely.
57
"osition o, IN-N*+2E *02N+-2 2A*I+ in Birla Corporation Limited
%I4,&#?
?(>4?@> 2"I)L
2"I)L "&4B I(>4 4?"II $ IB <?H2 9P +++++++++++++++++++++++++++++++++++++++ O ;0-
)I2" I% @II<2 2I#<
E-A2 97.C9.C; 97.C9.CD 97.C9.CI

/*+C( *02N+-2 2A*I+ H>.D> >;.CD JC.C7
Analysis t)ro&g) !)art<
IN*-2"2-*A*I+N
"his ratio tells the story by which stock is converted into sales. ? high stock turnover ratio reveals
the liquidity of the inventory i.e.! how many times on an average! inventory is turned over or sold
during the year. If a firm maintains a minimum stock level in order to maximi*e sales by quick
rotation of inventory and the holding cost of inventory will be minimum. ? low stock turn over ratio
reveals undesirable accumulation of obsolete stock.
By analy*ing the three year data it seen that it follows an increasing trend. We see that from the
year .330 to .336 it is more or less double which has been rectified in the year .33/. But it is need
less to say that ratio the company maintains is very high and the company is required to take
measures to lower down this ratio as it affects the working capital cycle of company and the flow of
cash in the company.
58
"osition o, 5e?t=-L&ity 2A*I+ in Birla Corporation Limited
$orm&la M 5e?t F -L&ity
Cal!&lation o, de?t=eL&ity ratio at BCL<=
"arti!&lars HCCJ=C; HCC;=CD HCCD=CI
Long *erm 5e?t 7H7J8.CI I8D> D7D;.8I
Net Wort) 9I>H9.J; ;;JI7.9D 7CC>8D.J9
5F- 2atio C.9H<7 C.7><7 C.CD<7
Analysis t)ro&g) !)art<
Interpretation

When a company has lower dJe ratio! it means that company is utili*ing its own
funds and reserves rather than taking loans from outsiders. B)# have a decreasing
trend in dJe ratio so we can say that B)# is using its funds and not taking loans from
banks. >quity is more than debt that shows a very strong position in whole market.
59
$&nd ,low /tatement o, Birla Corporation Limited<=
/.N. /o&r!es o, $&nds CD=CI C;=CD CJ=C; C>=CJ C9=C> CH=C9
7. @eneration from
Iperations
a. 2urplusJ$deficit9 after
taxes
;8;-6 ;.0.; 5.-60 /0/6 7;35 758
b. <epreciation 7577 ;80- ;750 .8/; ;;06 ;..3
c. .<eferred "ax 550 ++++++++ +++++ +++++ ++++++ .7-
>9;7D 9;JII 7J88H 77;DC D;II 9II>
H. Borrowings $ net 9 $53;89 53/6 ;3.. ;77- $-6679 $89
9. 4eduction in Working
capital
+++++++ ++++++ -636 ++++ 005 /;.
>. <ecrease in )apital
4eserve
$79 +++++ ++++ ++++ +++++ ++++
*otal /o&r!es +, $&nd >HJD> 9D;DJ H>DH7 7J77J HJJJ >DCD
Appli!ation o, $&nds
7. %ixed ?ssets 57./8 ;0;6 50.;7 53/5; .-08 ;3;6
H. Investments .5;8; .7760 0-55 5.55 $//;9 5063
9. Increase in Working
)apital
;.// 0738 ++++ 5667 +++++ ++++
>. <ividend ;037 ;5-; 5860 5;56 /08 +++++
*otal Appli!ation o,
$&nds
>HJD> 97;DJ H>DH7 7J77J HJJJ >DCD
Ca)+ F%o; S*a*&m&* <.$"%a Co"po"a*$o L*0-
"arti!&lars Mar CI Mar CD Mar C; Mar CJ Mar C>
"ro,it Be,ore *a3 JJ7.7I >;7.D> 7>>.C8 89.DC >7.JI
Net Cas) $low=+perating A!ti4ity 98>.C8 H8J.87 H79.J> 7CD.CD 77>.C>
Net Cas) 0sed In In4esting A!ti4ity =99>.>7 =H87.8I =7I7.>9 =7HH.8> =D.C8
Net Cas) 0sed in $in. A!ti4ity =;H.D7 =HI.DJ =7.8; C.HH =I7.;9
Net In!F5e! In Cas) And -L&i4alent =9.C> =H>.I9 9C.7J =7J.;J HJ.9H
Cas) And -L&i4alent Begin o, Eear 9>.98 J8.H9 H8.CD >>.DH 78.>C
60
Cas) And -L&i4alent -nd +, Eear 97.9; 9>.98 J8.H9 H8.CD >>.DH
Con!l&sion<=
"he overall performance of Birla )orporation #imited is getting on a good track."he total turnover
of the company has registered a growth of 55..6= where as the operating profits for the year were
higher by 5/.3;= mainly on the accounts of increase in the volume or blended cement in the
overall cement sales! higher reali*ation and effective cost control measures taken by the company.
"he profit before tax was up by 58.;6= at 4s. --5.5/ crores at against 4s. 705.67 crores in the
previous year. "he cash earning of the company improved substantially to 4s. -35.;8 crores as
against 4s.568..- crores in the last financial year. With the increase in capacity on account of
expansion projects being undertaken by the company! it is expected that the company would be in
a position to maintain the growth in future years.
)ompany has parked its surplus fund in the various debt schemes of mutual fund. "here is an
increase of 573= in investment from the previous year. )ompany is cash rich but as there are
expansion and diversification plans under the pipeline! company is not utili*ing these funds. %or
meeting the working capital needs and capacity expansion needs it has borrowed from banks.
"he recent boom in the housing! construction and retail sector in India coupled with continued
thrust of the @overnment on infrastructure projects is expected to sustain healthy growth of cement
demand. <uring the year .336+3/! Indian cement industry has registered a growth of 8.;7= in
terms of cement production. ?lmost all the major players in the industry including Birla )orporation
#td have announced substantial increase in capacity and the possibility of oversupply situation
cannot be ruled out.
<uring the year company has embarked upon expansion projects at 2atna and )handeria which
would effectively enhance the cement capacity by 5.6 million tones. With the capacitive power
plants already in operation and expansion projects under implementation! it is expected that the
cement division of the company will do well in the foreseeable future.
"he concern about the cement industry is that it is one of the most taxed industries in the country
where the government levies and taxes! taken together! constitute over 63= of the ex+factory
price. In the top of the above the increase in the cost of coal! railway freight and transportation
charge have further added worries of cement manufactures:
61
Major $indings
/tatement /)owing 5i,,eren!e ,rom "re4io&s Eear
#amt. in la!ks'
"arti!&lars C;=CD CD=CI
In4estments H>>D;.7J
N ?y 7>C:
H798H.;>
N ?y J7:
In4entories 9;I;.J
N ?y 9J:
JDIJ.88
N ?y >C:
/&ndry 5e?tors >D>.HJ
N ?y H7:
>>I.DI
N ?y 7;:
Cas) % Bank =H>I9.7D
P ?y >H:
=9C9.DD
P ?y 8:
C&rrent Lia?ilities =7;;C.H;
P ?y ;.>>:
;C7;.9D
N ?y HJ:
General reser4e 7DJCC
N ?y H99:
7CCCC
N ?y >C:
7. BCLBs N"A* is in!reasing day ?y day ,rom last t)ree years and t)e growt) is
remarka?le.
H. BCL )as s)own t)at it is 4ery strong !ompetitor in !ement se!tor o, India.
9. Cement !an ?e said as tr&e ,r&it,&l ?&siness ,or BCL ,rom last many years.
>. +4erall all ratios o, t)e !ompany are good and !ompany need to work wit) more
e,,i!ien!y.
J. *)e additional !apa!ity o, !ement prod&!tion at 5&rgap&r will !reate new milestones
,or t)e BCL.
;. La!k o, ad4ertisement !an ?e said as weak point o, t)e BCL.
D. BCLBs in4estment poli!ies are 4ery m&!) relia?le.
I. "osition o, t)e sto!k is in!reasing per year t)at is good sign to ,a!e t)e !ompetition
!oming a)ead.
8. 6ig)est e4er net pro,it o, 2s. 989.JD !rores
62
7C. 6ig)est e4er di4idend pay o&t o, 2s. 9;.C> !rores
Bibliography & Webliography
www.?irla!orporation.!om
$inan!ial Management G I.M."andey
$inan!ial /tatement Analysis G 5r. Anjan B)atta!)arya
$inan!ial Management G /.N.Ma)es)wari
Ann&al 2eports o, BCL C;=CD % CD=CI.
www.!ma.!om
www.7;anna.!om
63