1

ON - SUMMER TRAINING REPORT

On
RISK MANAGEMENT
At


J.K. TYRE &INDUSTRIES LTD. (BANMORE)
Submitted to the
SOS Political Science and Public Administration
JIWAJI UNIVERSITY, GWALIOR (M.P.)
In The Partial Fulfillment on the requirement for the degree of
MASTER OF BUSINESS ADMINISTRATION
By
RAHUL DIXIT
M.B.A (FINANCE) 3
RD
Sem
Roll no - 3176760
Under the supervision of
Ms. Neha Saxena

SOS POLITICAL SCIENCE AND PUBLIC ADMINISTRATION
JIWAJI UNIVERSITY, GWALIOR (M.P.)


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DECLARATION

I RAHUL DIXIT a student of M.B.A (Finance) 3
RD
semester from SOS Political Science
and Public Administration, JIWAJI UNIVERSITY, GWALIOR (M.P.) hereby declare that I
have done on summer training of 45 days at J.K. TYRE &INDUSTRIES LTD. Dist.
(BANMORE), titled as RISK MANAGEMENT. All the facts and findings in this report are
genuine, authentic and purely in academic interest only.
I also declare that this project report has not been submitted to any other university for the
award of any other degree.

Batch 2013-2015
Place- Gwalior


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ACKNOWLEDGEMENT

I undertook this training in the partial fulfillment of my M.B.A. curriculum. I am glad that I
got wonderful opportunity to do my research report at J.K. TYRE &INDUSTRIES LTD in .
(BANMORE),, district
Finance is one of the key parts and the backbone of any company. Without finance no
organization can survive. My project is also based on the study of Finance which is just a
drop in the ocean.
I sincerely acknowledge my gratitude towards the faculty of SOS Political Science and
Public Administration who gave me the thorough understanding of different concepts. I
never forgot the name of my project mentor Ms. Neha Saxena who helped me in every
walk of my project work.
I am extremely grateful to Mr. .. (HR Executive) and Mr. .
(Finance Head). My project guides who were not only supportive and co-operative but
inspite of their busy schedule were ready to help me with their valuable guidance and
support which is of high worth.



RAHUL DIXIT
M.B.A (FINANCE) 3
RD
Semester
Roll no. 3176760






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CONTENTS

1. JK TYRE COMPANY PROFILE


2. VARIOUS ASPECTS OF THE STUDY

3. RESEARCH METHODOLOGY


4. ANALYSIS AND GRAPHICAL REPRESENTATION OF DATA

5. FINDINGS

6. SUGGESTION


7. CONCLUSION

BIBILOGRAPHY




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1.0 COMPANY PHOTOGRAPHY
Vikrant Bias Tyre Plant







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1.1 Vision, Mission and Quality Management
Vision:
TO BE AMONGEST THE MOST ADMIRED COMPANIES IN INDIA COMMITED TO
EXCELLENCE
Mission:
To be a customer obsessed company.
To be the largest and most profitable tyre company in India.
To retain No 1 position in truck and bus segment and to be amongst top 2 in all other
4 wheeler tyre.

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To make truck/bus radial opens profitable and retain leadership in the passenger
radial market.
To enhance value to shareholders and service to all stake holders.
To excel as a value driven organization.
To be the most preferred tyre brand in India.
Quality Management:
The people of JK Tyre have an organization committed to quality in everything they
do.
They continuously anticipate and understand customer requirement, convert these
into performance standards for their product and service and to meet the standards every
time.
1.2 J K Industries
JK Organization owes its name to Late Lala Juggilal Singhania, a dynamic personality
with a broad vision, Inspired by the Swadeshi movement of Mahatma Gandhi, and driven by
the zeal to set up an Indian enterprise, Lala Kamlapat Singhania founded JK organization in
the 19
th
century in India.
The process of industrialization and diversification was worthily and successfully
carried on by Lala Kamlapats three illustrious sons Sir Padampat, Lala Kailashpat and Lala
Laksmipat, aided in no small measure by the late Gopal Krishna son of sir Padampat.
JK Organization has been a forerunner in the economic and social advancement of
India. It always aimed at creating job opportunities for a multitude of country men and
provides high quality of products. It has driven to make India self reliant by pioneering the
production of number of industrial and consumer products, by adopting latest as well as
developing its own know-how. It has also under taken industrial ventures in several other
countries.

8

JK Organization is an association of industrial and commercial companies and
charitable trust. Its member companies, employing nearly 50000 persons are engaged in the
manufacture of variety of products and in diverse fields of commerce.
Trust are devoted to promoting industrial, technical and medical researches,
education, religious values and providing better living and recreational facility. With the
spirit of social consciousness uppermost in mind, JK organization is committed to cause the
human advancement.















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Background and inception of the company
1933 First in India to manufacture calico prints- {Juggilal Kamlapat cottons spinning
and weaving mills company, Kanpur.}
1940 First in India to manufacture steel bailing Hoops for jute and cotton and to make the
country self sufficient by meeting the entire demand- J.K Iron and Steel Co. Ltd.,
Kanpur.
1944 First in India to produce Aluminum Virgin Metal for Indian Bauxite-Aluminum
CorpoRATIOn of India Ltd., Jaykayanagar.
1949 First in India to manufacture Engineering files- J.K. Engineers files Bombay.
1959 First in India to set up a continuous process Rayon plant.
1960 First in India to set up a Hydraulically operated Cane Crushing Mill for Kandsari
Sugar Plant and completed 100 ton plant.
1961 First in world to set up a plant for production of Hydrosulphite of soda by Sodium
Amalagam process- J.K. Chemicals Ltd., Bombay.
1962 First in India to produce Nylon-6 with its own polymerized raw material- J.K.
Synthetics Ltd., Kota.
1965 First to produce sodium Sulphoxylate Formaldehyde [Rangolite C of Formosul] in
India- J.K. Chemicals Ltd., Bombay.
1968 First to manufacture TV sets in India- J.K. Electronics, Kanpur.

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1976 First in India to produce steel belted Radial tyres for passenger car, trucks and
buses- J.K. Tyre plant, Kankroli.
1980 First in the world to make steel belted radial tyres for 3 wheelers.
1984 First in India to produce white cement through dry process.
1985 First in India to produce cathonic Dye able Polyester Fiber.
1989 First in India to produce magnetic tapes with cobalt technology.
1991 Banmore tyre plant {BTP} set up with the capacity of 5.7 lacks tyres per annum.
1992 R&D centre setup at HASTERI.
1994 Indias first T-rated tyre launched Banmore Tyre Plant {BTP} Crossed 100 TPD.
1995 Mercedes Benz launched on JK STEEL RADIALS first tyre manufacturer in the world
to get ISO 9001.
1996 Indias first dual contact high tractions steel radial- aqua sonic launched. {Introduce
steel wheels}.
1998 First tyre manufacturer in the world to get QS 9000. Awarded CAPEXILS highest
export award for 1997-98.
1999 Synergy with VTL in procurement, marketing and production flexibility.
Completion of states of the art modernizations of truck radials

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J.K. Tyres ranked 16
th
largest tyre company in the world
ISO- 14001 accreditation for environment and safety.
2000 J.K. introduced national Go- carting championships.
2001 J.K. industries received FOCUS LAC EXPORT award for the year 1999-2000.
Commendation certification of CII ND National exam. Go- carting championships
held.
JK Tyres Plants
Mysore plant- 1 {VTP} - Karnataka
Mysore plant- 2 {VTP Radial} - Karnataka
Kankroli - Rajasthan
Banmore - Madhya Pradesh
1.2 Vikrant Tyres Limited
Vikrant tyres ltd {VTL} is situated in an area of 53 acres in Mysore. VTL is a major
tyre manufacturing company and one of the most successful industrial ventures in the state
of Karnataka.
In the year 1970 this company was conceived as a joint venture by the participation of south
Indian export company Pvt Ltd, Madras {Chennai} with Karnataka state industrial
investment and development corporation Ltd {KSIIDC} for establishing and automobile
tyres and tubes manufacturing unit at Metagalli industrial area in Mysore. In 1977 the
management was taken over by the Government of Karnataka state industrial investment
and development corporation Ltd {KSIIDC}. The commercial production started from 19
th

may 1980. During 1985 a plant was set up for manufacturing of radial tyres.

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The company is certified under ISO 9001, QS 9000, ISO 14001 and ISO/TS 16949:2002
certifications, for design manufacture and sale of automobile tyres, tubes, flaps and tread
rubber. JK industries ltd was inducted as strategic Alliance Partner {SAP} during may 1997
with a view to improve the overall performance of the company. Collaboration agreement
was entered with the M/S Continental tyres Germany in 1980. Vikrant tyres Limited, a JK
tyres associate, manufactures cutting edge innovative products at conformed to the highest
international standards.
JK industries ltd in 1997 Acquired Vikrant Tyres Limited, Mysore. VTL has the first
truck/bus steel radial in India. This has state of the art technology in technical collaboration
with continental A G Germany. Vikrant tyres have successfully launched high performance
steel truck radial tyres in the latest international pattern for the Indian as well as
international market.
Register Office at:-
VIKRANT HOUSE
No 54, 1
st
Main Road,
V.V Mohalla, Mysore - 570002

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Milestones of Vikrant Tyres Limited {VTL}

1970
Joint Venture by SIEC Pvt. Ltd., and KSIIDC conceived to manufacture Automotive
Tyres and Tubes at Mysore.
1973 Incorporated as a joint venture company by KSSIDC and SIEC Pvt. Ltd., Madras
{Chennai}.
1977 Taken over by government of Karnataka through KSIIDC.
1980 Commercial production commenced.
1982 Collaboration with M/S AVON Tyres UK.
1985 T-Pilot plant setup for manufacturing of truck Radial Tyre Plant.
1989 Construction of new Truck Radial Tyre Plant.
1991 Commercial production of all steel truck Radial Tyre.
1992 First against OTR tyre rolled out.
1994 Certified to IS 9001:1994 quality management systems.
1997 JKIL inducted as strategic Alliance Partner {SAP} by government of Karnataka.
1999 Certified to QS 9001:1998 QMS and also ISO 14001:1996 EMS. Turnaround under JK
management within 10 months and declared divided after a gap of 6 years. Massive
modernization and up gradation investing Rs. 224.13 crores.

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2000 March-Bias plant-Rs 73.16 crores, December-Truck Radial Plan- Rs 150.97 crores.
2011 Merged with JKIL. Certified to ISO/RS 16949:2002 process based QMS.
2004 First Indian tyre company to adopt process based management through Business
Process Re- Engineering {BPR}.

1.3 J K GROUP DIVERSIFICATION







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JK ORGANISATION
J.K. Organization, founded over 100 years ago, is an eminent
industrial group in India. The Group has multi-business,
multi-product and multi-location opeRATIOns


JK PAPER LTD.
JK Paper Limited is one of the leading manufacturers of
reading and writing paper

JK LAKSHMI CEMENT LTD.
JK Lakshmi Cement Limited is a well respected name in the
cement industry in India


FENNER (I) LTD.
Fenner (I) Limited is a leading manufacturer of Industrial
and Automotive Belts, Oil Seals, Power Transmission
Accessories and Textile Yarn

UMANG DAIRIES LTD.
The Creme de la creme of dairy foods



JK AGRI-GENETICS LTD.
At JK Agri-genetics limited, concentrates on Research and
Development, production, processing and marketing of
hybrid seeds.


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JK SUGAR LTD.
The company's principle activity is to manufacture Sugar.
However, the company currently operates in two segments.
Power and Sugar


JK RISK MANAGERS AND INSURANCE BROKERS LTD.
Services rendered to various clients for all facets of
Insurance both life & non-life.


CLINIRX RESEARCH PRIVATE LTD.
Full Service Contract Research Organization (CRO)










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1.4 Product/Services profile:
The major products of JK Company are automobile tyre {Nylon tube tyre, radial tube and
tubeless tyre } tubes names.
1} Truck Tyre

1. Jet rib 7. Jet truck
2. Vikrant truck king 8. jet truck
3. Star lug 9. Sand cum hiway
4. Super T.K 10. Truck plus
5. JT king 11. JT Classic
6. Hi Life 12. JETRK
2} Light Tucks
1. Jet rib 3. Fleet king
2. Star lug 4. Truck king




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3} O.T.R (Of the Road)
1. VEM 99 E-3 T/L 3. VEM 00 SS E-4 T/L
2. VEM 99 E-4 T/T 4. EGO4 G2 T/T
4} Tubes
1. JK Tubes 2. Vikrant tubes 3. Tube V EX
5} Flaps
1. JK FLAPS 2. JK RDFLAPS 3. JK EXP FLAP
1.5 MANUFACTURING LOCATIONS
JK Tyre has five Modern plants in India which are strategically located at
Mysore plant-1(VTP) Karnataka
Mysore plant-2(VTP Radial) Karnataka
Banmore, Madhya Pradesh
Kankroli, Rajasthan
JK Tyre has also enhanced its global reach by taking over Tornel a renowed Mexican
company, which has 3 plants in Mexico. All these plants are equipped with Worlds most
advanced manufacturing and testing machines.




VIKRANT BIAS TYRE PLANT VIKRANT RADIAL TYRE PLANT

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VIKRANT OTR PLANT

ghgkddfdf



KANKROLI TYRE PLANT BANMORE TYRE PLANT
Three plants in Mysore are
VTP -Vikrant Tyre Plant
OTR Off the road Tyre plant
RTP - Truck Radial Plant







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JK TYRE PLANTS OPERISKNAL CAPACITY
PLANT CURRENT CAPACITY(MT/DAY)
Kankroli Tyre Plant 210.00
Banmore Tyre Plant 165.00
Vikrant Tyre Plant 321.95
TOTAL 696.95
Nature of the business carried.
JK Industries is engaged in manufacturing and marketing of automotive tyres, tubes,
flaps. Products Involved:
Cross ply and radial tyres for light commercial vehicles.
Cross ply tyres for passenger cars.
Cross ply tyres for agricultural vehicles.
Cross ply tyres for of the road {OTR} vehicles.
Automotive inner tubes for trucks, buses, light commercial vehicles.
Achievements /awards
1. JK Tyres ranked 16
th
largest company in the world.
2. ISO 14001 accreditation for environment and safety.
3. Indias first T rated tyre launched.
4. Mercedes Benz launched on JK Tyres radials first tyre manufacture in the world to
get ISO 9001.

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5. Only tyre manufacture to get E mark certification.
6. First tyre manufacture in the world to get QS 9000.
7. Awarded CEPEXILS highest export for 1997-98.
8. JK introduced national Go-carting championships.
9. JK industries received FOCUS LAC EXPORT award for the year 1999 and 2000.
10. Certified to ISO 9000 (1994 quality management systems).
11. First Indian Tyre Company to adopt process based management process based
management through business process re-engineering (BPRO).














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1.6 Work Flow Model

23




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The company opted for BPR (Business Process re-Engineering) with the concept of Factory
with in Factory called as Business Units. The primary objective of this concept is to focus on
Operational Efficiency such as production, quality, Cost, Deliverables and other parameters.
This breeds healthy competition amongst the BUs.
BU 1: Mixing, Dipping, Calendaring, Extruders
BU 2: Stock PrepaRATIOn and Tyre Assembly
BU 3: Tyre molding, Inspection
BU 5: Tyre Dispatch
BU 4: Radial Tyres
The Business Units are supported by SSUs calls as Service Support Units. general
functioning of Bus.
E.g. . SSU 1: Engineering Services
SSU 2: Engineering Services for Radial Plant
SSU 3: Finance
SSU 4: QA, Technical, IT
SSU 5: HR , IR , GAD
SSU 6: IED , Shift in charges , Mgf. services





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Work Flow Model
BU 1
1) Compound At Banbury:
Compound is the process of mixing the necessary raw materials with selected
elastomer in the banbury. Banbury is an internal mixer, which consists of a completely
enclosed mixing chamber with two spiral shaped rotors. There is a hoper to feed the
ingredients and a door to discharge the mix. The rubber ingredients like chemicals are
weighted as mentioned in specification file and feed into hoper. Then the mixing process
takes place. Required mixing time is fixed to get better quality mixing.
2) Extruder:
The main function of an extruder is to produce tread and side wall, bead, apex.
Extrusion is a process of forcing the mixed compound by means of screw, which rotates
inside the barrel. There are two types of extruder: a) Screw extruder, b) Ram extruder.
3) Zell Plant: : Dipping
The dipping process takes places in a zeal plant. Here rayon, nylon. Polyesters are
dipped in a solution containing normally a latex based resorcinol formaldehyde to improve
adhesive properties. Then the fabric is dried at a temperature of about 280-300 F for 150-
180 sec, the fabric is stretches to about 0-15%
4) Calendaring:
Calendaring is a machine, which consists of three or four rolls held in a frame work
used to produce the rubber sheets of required strength and length. To get a better quality
calendared fabric with uniform gauges, viscosity is important in the same way, hot
temperature of about 110-137mm.

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BU 2
5) Bias Cutter:
It is a machine used to make plys or to the rubber coated fabrics at required width
and angle, which are used in the production of tyres. Bias angle is the angle of cords in tyres
with respect to the central line. Based on the ideal cured angle, required for particular type
size and pattern, bias angle is calculated for the particular drum.
6) Pocket Making:
It is a process of making the pocket from the angle cutter fabrics. In pocket making
section, three types of pockets are constructed. The plys used for the first and second
pocket are known ad inner ply and those used for third pocket are known as outer ply.
7) Bead Assembly : Bead wire High tensile copper coated Steelwire coated with compound
wound on a former , fillered and flipped
8) Tyre Assembly : All individual components of tyre Viz Beads , Pockets, Tread and Sidewall
are assembled on a Building drum and the finished product is called as Green Tyre.
BU 3
9) Bladder:
Butyl rubber compound is used for making the bladder. As first, butyl rubber is
mixed with specified chemicals properly and then it enters the extruder section by the use
of the extruder, a specific length and width of slug is extruded. Then the ends of the slugs are
cut into the specified angle for proper joining.
8) Tyre Moulding:
Before moulding opeRATIOns, the green tyre has to be made ready for painting with
inner lubricants inside tyre for easy release from the bladder and the side walls are to be
coated with blemish paints.

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9) Tyre Curing:
It is a process of cross linking the rubber compounds through heat and pressure. For
the pressure of curing tyres presses are used. These pressed are pre warmed before loading
of green tyre is done in the top ring raise condition with vacuum.
10) Tyre Finishing and Inspection:
After curing, the tyres obtained by trimming of the extensions on the tyres surfaces
are checked for defects. Thus the process of removing excess materials from the tyre after
curing is called finishing. The finishing process is done either by buffing or trimming
method. All the tyres then are inspected and separated.
BU 5 :
Finished Goods Storage and dispatch : Storing of Okay tyres and arranging logistics
to various depots / STUs / OEMs as per the marketing requirements.
Future growth and prospectus:
To be the No.1 tyre company in India.
To be the largest tyre export company in India.
To be a customer obsessed company.
High quality of products.
Profit Maximization.






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VARIOUS ASPECT OF THE STUDY
This is the measure of inter relationship between different sections of the financial
statements which then is compared with the budgeted or forecasted results. Prior year
results and or the industrial results. To be most important risk must include a study of
underlying data. risk should be taken as guides that are useful in evaluating a companys
financial position and open risk and making comparisons with results in previous years or
with other companies. The primary purpose of risk is to point out areas needing further
investigations, risk will not carry meaningful business reasoning if there is no supporting
quantitative and financial information. A part from the risk other information which should
be looked at includes:
1. The contents of any accompanying commentary on the accounts.

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2. The age and nature of companys assets.
3. Current and future development in the companys markets, at home and overseas,
recent acquisition and disposals of a subsidiary by the company.
4. Extraordinary items in the income statement.
5. The auditor opinion on the financial statements.
6. Other information in the local papers about the company.
As you know there are vast numbers of users of parties interested in analyzing the
financial statement, including shareholders, lenders, customers, government,
employees and competitor.
Yet in many respect, they will be interested in different things. There in not,
therefore, any definitive, all-encompassing list of points for management that would
be useful to all these stakeholder groups.
Nevertheless, it is possible to construct a series of risk that together will provide all
to them with something that they will find relevant and from which they can
investigate further if necessary.
Risk management is the first step in assessing an entity. It removes some of the
mystique surrounding the financial statement and makes it easier to pin point items
which it would be interesting to investigate further.
These risk can ably be classified according the target group of the stakeholders.
Profitability for shareholders, creditors, investors, management.





30





Risk management of J.K. Tyre & industries ltd.
RISK MANAGEMENT
Category of risk
(1) PROFITABILITY RISK :-
NET PROFIT MARGIN Risk = Profit after tax / sales 100

NET PROFIT MARGIN RISK OF J.K. INDUSTRIES LTD.

PERTICULARS 2011 2012
PROFIT AFTER TAX 1081 2603
SALES 9371 12282
NET PROFIT MARGIN
RATIO
11.5% 21.2%

The objectives of profitability relates to a companys ability to earn a satisfactory
profit so that the investors and shareholders will continue to provide capital to it.
Company profitability is linked to its liquidity because earning ultimately produces
cash flow. For these reasons risk are important to both investors and shareholders.
(a) Return on capital employed (ROCE)
or return on investment.
(b) Return on equity (ROE )

RETURN ON INVESTMENT = NET PROFIT BEFORE TAX 100

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CAPI TAL EMPLOYES

CAPITAL EMPLOYES = WORKING CAPITAL + FIXED ASSESTES




RETURN ON INVESTMENT OF J.K. INDUSTRIES LTD.

PERTICULARS 2012 2012
NET PROFIT BEFORE TAX 1081 2603
CAPITAL EMPLOYED 5958 7725
RETURN ON INVESTMENT 18.14% 33.69%

Operating RISK = Cost of goods sold + operating expenses 100
Net sales
OPERATING RISK OF J.K. INDUSTRIES LTD.

PERTICULARS 2011 2012
COST OF GOODS SOLD 359 560
OPERATING EXP. 109 92
NET SALES 1070 2081
OPERATING RATIO 43.73% 31.33%

NET PROFIT RISK = NET OPERATING PROFIT 100
SALES

NET PROFIT RISK OF J.K. INDUSTIRES LTD.
PERTICULARS 2011 2012
NET OPERATING PROFIT 43.73 31.33

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NET SALES 9371 12282
NET PROFIT RATIO 0.47% 0.26%


LIQUIDITY RISK :-

The business should not only provide information on its profitability, but also to
provide information that indicates whether or not the business will be able to pay its
creditors, expenses, loans falling due at correct times. A company may be profitable
but if it fails to generate enough cash to settle its said to be insolvent.



CURRENT ASSETS
CURRENT RISK = ______________________________
CURRENT LIABILITIES




CURRENT RISKN OF J.K. INDUSTRIES LTD.
PERTICULARS 2011 2012
CURRENT ASSETS 5865 6133
CURRENT LIABILTIES 3107 2388
CURRENT RATIO 1.89 2.56

SALES
FIXED ASSETS TURNOVER RISK = ------------------------
FIXED ASSETS

FIXED ASSETS TURNOVER RISK OF J.K. INDUSTRIES LTD.

PERTICULARS 2011 2012

33

SALES 692.31 967.55
FIXED ASSETS 569.02 741.52
TURNOVER RATIO 1.3 1.4

LIQUID ASSETS
QUICK RISK = _________________________
CURRENT LIABILITIES


QUICK RISK OF J.K. INDUSTRIES LTD.
PERTICULARS 2011 2012
LIQUID ASSETS 3003 2697
CURRENT LIABILITIES 3107 2388
QUICK RATIO 0.97 1.13

SALES
CURRENT ASSETS TURNOVER RISK = _______________________
CURRENT ASSETS

CURRENT ASSETS TURNOVER OF J.K. INDUSTRIES LTD.
PERTICULARS 2011 2012
SALES 692.31 967.55
CURRENT ASSETS 5865 6133
TURNOVER RATIO 0.12 0.16

ACTIVITY RISKS :-
Activity risk is calculated to measure the efficiency with which
the resources of a firm have been employed. These risk are called turnover risk
because they indicate the speed with which assets are being turned over into sales.

COST OF GOODS SOLD
STOCK TURNOVER RISK = _______________________________
AVERAGE STOCK
STOCK TURNOVER RISK OF J.K. INDUSTRIES LTD.

PERTICULARS 2011 2012

34

COST OF GOOD SOLD 4052 5789
AVERAGE STOCK 289 358
STOCK TURNOVER RATIO 14.03 16.18

ASSETS MANAGEMENT RISK :-
Management is required to maintain an optimum level of working capital.
Remember if an entity is having high inventory levels it will insure high storage
costs, theft, insurance costs and stock losses. Likewise having low stock levels will
disturb the production run of the company as it will regularly run out of inventories
thereby loosing important business opportunities. The same can be said of
receivables, having more receivable the company may run the risk bad debts but
also being too strict with debt repayment period may result in loss of customers.

MARKET VALUE RISKS :-
The market price of a companys shares is of interest to the Management because
it represents what investor as a whole think of the company at a point in times.
Market price is the at which people are willing to buy or sell the shares. It provides
information about how investors view the potential return and risk connected with
owning the company shares. Market price by itself however is not very information
for this purpose. Companies differ in number of outstanding shares and amount of
underlying earnings and ratios. Thus, market price must be related to earsidering
the price earnings risk and the ratio yield.




35




















RESEARCH METHODOLOGY
Research is not conned to science and technology only. There are vast areas
of research in other disciplines such as languages, literature, history and
sociology. Whatever might be the subject, research has to be an active,

36

diligent and systematic process of inquiry in order to discover, interpret or
revise facts, events, behaviours and theories. Applying the outcome of
research for the renement of knowledge in other subjects, or in enhancing
the quality of human life also becomes a kind of research and development.
2. Type of Research:
The research work being undertaken by the researcher is purely analytical work
Because the research is an attempt to analyze the financial position of the
organization
on the basis of the annual reports.
3. Objective of the study:
There are various objective of the study which is as follows:
I. Primary objectives
II. Secondary objectives

i. The primary objectives of the study are to prepare the project report
successfully it was necessary to create some objective so that it helps task to
get complete easily and correctly.
To highlight the policies and procedure of analysis of working capital &
by analyzing various ratios.
To make a detailed analysis of the strategies adopted by the company for
planning monitoring and financing working capital.
To identify the vertical areas where greater attention is needed for better
management.
To give the feedback to the company for improvement in their strategies.


ii. The secondary objectives of this study are as follows:
To get some experience of working in an organization.
To know the deficiencies in the area of the finances.

4. Research Design:

37

Before starting the research every researcher should know the objective of the
study.
The objective is already given to attain it various data is analyzed. Research
design is
analytical.
5. Sample size:
A sample size cannot be given here because this study is purely based on
secondary
data and no field study are necessary for this analysis.

6. Analysis:
Analysis of data is most essential and difficult task in the present report an
attempt
has been made to analyze each & every financial statement of the company
effectively
so that proper analysis can be made of financial condition of the company.



38




Management and interpretation:-
A much higher RATIO indicates poor investment policies of the company & poor inventory control
while a low risk indicates
lack of liquidity & shortage of working capit In case of J.K.Tyres,this risk is increased in 2011 &
decreased till 2012.Better sign for the company investment policies & investment decision of
management.
In case of JK tyres,the risk decreased in 2011-12and later increased. Not a good sign.
In case of MRF Tyres,this risk is more or less constant,a better sign.


39




higher risk indicates poor investment and inventory control.
Indicates lack of liquidity and shortage.
Working capital risk = CURRENT ASSETS/CURRENT LIABILITY
JK tyres is better. If we analyse graph working capital risk is low as compared with
others.

RISK-1
DEBT EQUITY RISK:
The debt-equity RISK is worked out to ascertain soundness of the long-tern financial
policies of the firm. This RISK experess a relationship between debt(external equities) and
the equity(internal equities). Debt means long term loans and equity means shareholders
fund. This RISK is calculated as under:-
Debt equity RISK= debt (long term loans)/equity(share holders fund).
A higher RISK indicates a risky financial position while a lower RISK indicates safer
financial position.
OBJECTIVES:
The objectives of this RISK are as under:-
1) It derives the idea of the amount of capital supplied to the concern by the proprietors.

40

2) To assess the soundness of long term financial position.
3) Indicates the extent to which the firm depends upon outsiders.
Table-2
years
company
2008 2009 2010 2011 2012
J.k tyres industries 1.04 1.26 1.84 1.96 2.28
JK tyres 0.76 0.72 0.84 1.07 0.86
MRF tyres 0.83 0.70 0.72 0.86 0.91

Management And Interpretation
In case of j.k tyre, debt-equity risk implies that the debt position is more than equity.The lower the
debt equity risk The higher the degree of protection felt by the creditors.
In this debt equity risk of company is increasing which is not a good sign.
In case of MRF tyre, debt-equity risk is more or less constant which a good sign is.
Graph-1
Debt equity risk


Relationship between debt(external equities) and equity(internal equities).
Ascertain soundness of long term financial policies.
Higher risk indicates a risky financial position.

41

Debt-equity risk =debt/equity.
MRF is better as its debt-equity risk is low.

In case of JK tyre, debt-equity risk is more or less constant which a good sign is also.
MRF is better than others.
Risk-2
Interest coverage Risk:-
When a business borrow money, the lender is interested in finding out whether the business
would earn sufficient profits to pay periodically the interest charges. This risk is determined
by dividing profit before interest and taxes. Thus two variables involved in this risk are fixed
interest charges and net profit.
Interest coverage risk = net profit before interest and tax/interest on fixed loans or
debentures.
OBJECTIVES:
The objectives of this Risk are as under:-
1) It measures the margin of safety for the lenders.
2) Determines the over all efficiency of the business.
TABLE-2







years
company
2008 2009 2010 2011 2012
J.k tyres industries 1.13 1.39 1.19 0.93 1.21
JK tyres 5.55 4.30 2.76 2.84 3.48
MRF tyres 3.50 3.34 3.91 3.91 2.27

42

Graph-3 Interest coverage RISK:-

Points whether business would earn sufficient profits or not.
Interest coverage RISK=
N.P before interest and tax/int. on fixed loans.
JK is better as its interest coverage RISK is more.

MANAGEMENT and interpretation:-
The greater the interest coverage risk , the higher the ability of the firm to pay its Interest
expense. Thus in case of J.k tyres, it is more or less constant, declined in year2011-12 but
increased in 2012. Better sign for the company.
In case of M.R.F tyres, it is more or less constant but increased in 2012. A better sign for the
company.
In case of JK tyre, it is decresed till 2005 but increased in 2012.A better sign for the company to
pay its interest expenses. JK tyres is better company.

RISK-3
FIXED ASSETS TURNOVER RISK:-
This risk indicates the extent to which the investment in fixed assets contribute towards sales.
If compared with previous years, it indicates whether the investment in fixed assets is
judicious or not. This can be calculated as under.
Fixed assets turnover risk = net sales/net fixed assets
Net fixed assets= fixed assets-depreciation


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OBJECTIVES:-
The objectives are as follows:-
1)indicates how efficiently fixed assets are used. If there is increase indicates improvement
in the utilization of fixed assets.

Management and interpretation:
Fixed assets turnover risk indicates the efficient utilization fo fixed assets. It indicates to what
extent fixed assets are contributing in gene risk of sales in case of J.K. tyres, fixed assets but
not increasing in increased pattern.
Fixed constant rate -This indicates efficient management of fixed asets.
In case of appolo tyre, fixed assets are decreased in year 2002 to 2005. but company has made
better performance in utilization of fixed assets in year 2012 and can be due to-

Graph-3 Fixed assets turnover RISK:-


indicates the extend to which investment in fixed assets contributes towards sales.
years
company
2008 2009 2010 2011 2012
J.k tyres industries 1.06 1.26 1.57 1.59 1.72
JK tyres 2.94 2.74 2.51 2.45 2.70
MRF tyres 1.91 2.04 2.21 2.26 2.40

44

Fixed assets turnover risk =Net sales/Net assets
MRF is better as its fixed assets turnover is constantly increasing.

1) Better policies regarding fixed assets.
2) Better investment decision in fixed assets.
This through the abover figures MRF tyre is better utilizing its fixed assets in a better way.

RISK-4
INVENTORY TURNOVER RISK OR STOCK TURNOVER RISK
This risk established relationship between the cost of goods sold during a given period and the
Average amount of inventory carried during that period. This is calculated as under:-
Stock turnover risk= cost of goods/ Average stock or inventory.
Cost of goods sold is calculated as :
Cost of goods sold= opening stock +purchases+ direct expenses- closing stock.
OR
Cost of goods sold= sales- Gross profit
Higher the risk, better it is. The risk shows better performance if it increases, since it means that
the investment in stocks is leading to higher sales.
OBJECTIVES:-
The significance and objectives of this risk are as under:-
1) Indicates whether stock is efficiently used or not.
2) Enables the business to earn a reasonable margin of profits.

Management and interpretation
Inventory turnover risk indicates how quickly inventory is converted into sales. The higher
years
company
2008 2009 2010 2011 2012
J.k tyres industries 8.51 10.13 11.57 11.29 9.64
JK tyres 11.30 9.66 8.96 8.01 8.66
MRF tyres 6.21 6.68 6.67 6.64 7.57

45

the inventory turnover risk, the better it is for the organization. In case of J.k tyre inventory
turn over risk is increased in year 2002 to 2005 but this risk is decreased in 2012.
This risk is more or less constant and is good enough.
In case of MRF tyre, inventory turnover risk is more or less constant but is increasing. This
indicates that the company is performing well.
In case of appolo tyre, inventory turn over risk is in the pattern of decreasing and then in
increased pattern. Till 2005 it show decreasing pattern but 2012 it is increasing. This is mainly
due to-
1). Efficient utilization of stock.
2). J.k tyres is better as compared with others.
Graph-4 Inventory turnover RISK:-

Establishes relationship between costs of goods sold and average amount of
inventory carried during that perid.
Higher the risk better leads that investment in stock to higher sales.
Stock turnover risk = cost of goods sold/ average inventory.
J.k tyres is better as it has high inventory turn over risk.





46

RISK-5
Debtors turnover risk:-
This risk establishes the relationship between net credit sales and average debtors of the year.
Average debtor is calculated by dividing the sum of debtors in the beginning and at the end by
2. This risk is calculated as:-
Debtors turnover risk = Net credit sales/Average accounts
If the risk is high, it indicates economy and efficiency in collection of amounts due.
While calculation of debtors turnover, doubtful debts are not deducted from total debtors.
When opening and closing receivables and credit sales are not given, the risk is calculated as:-
Debtors turnover risk = total sales/ accounts receivables.
OBJECTIVES:
the objectives of this risk are as under
1) It indicates the efficiency of the staff entrusted with collection of amounts which are due
from debtors.


Establishes relationship between net credit sales and average debtors.
It risk is high indicates economy and efficiency.
years
company
2008 2009 2010 2011 2012
J.k tyres industries 5.72 5.35 5.19 5.54 6.64
JK tyres 16.66 23.76 19.19 18.10 19.96
MRF tyres 6.37 6.74 7.53 7.99 8.45

47

Debtors turnover risk = net credit sales/average accounts.
Both the three companies have increasing debtors turnover risk. But
MRF is better.
In case of MRF tyres, debtors turnover risk is increasing it is a better sign for the company.
RISK:-6
Total assets turnover risk:-
It high lights the amount of assets that the firm used to generate its total sales. The ability to
generate a large volume of sales on a small assets base is an important part of the firms profit
picture, idle or improperly used assets increase a firms need for costly financing and the expenses
for maintenance and upkeep. By achieving a high assets turnover, a firm reduces cost and
increases the eventual profit of its owner.
Total assets turnover RISK = Total sales/ Average assets.
TABLE-6
MANAGEMENT and interpretation
In case of J.k tyres, total assets turn over risk is increasing theta is a better sign . this
increases results in profit of company. In case of MRF tyres, this risk is in increasing. In case
of Apollo tyres this risk is more or less constant decreased till 2005. but increased in 2012.
Graph -6 Total assets turnover RISK

High assets turnover reduces cost and increases profit.
years
company
2008 2009 2010 2011 2012
J.k tyres industries 1.00 1.16 1.35 1.49 1.89
JK tyres 3.19 2.74 2.52 2.40 2.54
MRF tyres 2.00 2.30 2.43 2.50 2.81

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Total assets turnover risk =total sales/ average assets.
J.K is better as its total assets turnover is increasing continuously.
RISK-7
GROSS PROFIT RISK:-
This risk establishes relationship of gross profit on sales to net sales of a firm. Its formula
is:-
Gross profit risk = gross profit/net sales 100
Net sales means gross sales (both cash and credit ) minus sales returns.
And fluctuations in this gross profit is the results of a change either in
SALES or the cost of goods sold or both. Thus this risk shows the average margin on goods
sold.
Objectives:
The objectives of gross profit are as under:
1) It helps to determine the selling price.
2) To determine, how much selling price per unit may decline without resulting
in losses of ope risk of the firms.
3) Gross profit risk when compared to earlier years, it significantly different is a
reason for the management to investigate the change.




MANAGEMENT and interpretation
G.p risk is a reliable guide to the adequacy of selling prices and efficiency of trading
activities higher the G.p risk declined in the year 2004 and 2005 but gradually increased in
2012 decrease may be mainly due to
1) Price of material has gone up and wages increased but selling price remained constant.
2) Decrease in selling price.
3) Closing stock undervalued.
years
company
2008 2009 2010 2011 2012
J.k tyres industries 3.80 4.86 3.48 2.48 2.96
JK tyres 9.87 6.44 5.33 5.97 6.88
MRF tyres 9.39 7.33 5.94 4.26 4.91

49

4) Miss appropriation of goods and wastages.
A higher gross profit is mainly due to revese reasons in case of MRF tyres, G.P. risk
decreased during till 2005 but increased in 2012. this is mainly due to frame of new policies
and better management efficiency.
In case of appolo tyres, this risk decreased till 2005 but J.K. increased later.
J.K tyres is better.
Graph-7
Gross profit RISK:

Net profit risk = net profit /net sales *100
JK and J.k tyres gross profit risk is good as it is increasing in 2005 and 2012 continuously.

RISK-8
NET PROFIT RISK:-
A risk of net profit to sales is called net profit risk. net profit is derived by deducting
administrative & marketing expenses, finance charges and making adjustments of non
operating expenses and income from the gross profit. This risk reveals the rate of net
profit to each sale.
Net profit risk = net profit/ net sales *100
Some time N.P risk is calculated in two ways. N.P is taken either as profit before tax and
profit after tax.

50

Net profit risk = profit before tax /net sales *100
Net profit risk = profit after tax/ net sales *100
Objectives:
The objectives of this risk are as :
a. determine over all efficiency of the business.
b. Higher the net profit, better the business is .
c. Determines ope risk nal efficiency of the business.

Table-8

Management and interpretation
Net profit margin in case of J.K tyre is increased in 2011 but decreased in 2011-12but is
increase in 2012. this is more Or less constant. Decrease is mainly due to more other
charges such as administrative, marketing and other operating and operating expenses.
Increase is mainly due to reduction in tax liability and other expenses.
Graph-8
Net profit RISK:-

years
company
2008 2009 2010 2011 2012
J.k tyres industries 0.87 1.09 0.54 0.37 0.41
JK tyres 5.93 3.04 2.55 2.60 3.01
MRF tyres 3.57 2.68 1.84 0.75 1.16

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Net profit risk = net profit /net sales *100
JK is good as its net profit is increasing in 2011-12and in 2012 also.
In case of JK tyre is net profit is decreased in 2004 but increased later. It is better sign for
the company.
In case of MRF tyre is net profit is decreased in 2005 but increased in 2012. this indicates
that company made efforts to reduce its other expenses.
JK tyre is better then others.
RISK-9
Operating profit risk:-
Operating profit risk establishes relationship between operating profit and net sales.
Operating profit is the net profit arising from the normal ope risk and activities of an
enterprise.
Operating profit is given by net profit before adjustments of non-operating income and
expenditure and finance charge. This risk can be calculated by the following formula:-
Operating profit risk:- operating profit /net sales 100

Operating profit risk : net profit + non operating expenses non operating income.

Objectives: the objectives of this risk are as under:-

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1) Indicator of open risk efficiencies of management as against the net profit which
reveals only overall efficiency
2) To measure the profitability and soundness of the business.
3) Higher the risk, the better is the profitability of business.


Management and interpretation
This risk is indicator of operating risk efficiency of management. In case of J.K tyres,
operating profit risk is decreasing till 2005, but increased during 2012. this increase may be
better. Formulation of policies and reduction on non operating expenses.
In case of MRF tyres it is more or less constant and decreased till 2005 but increased in
2012.In case of appolo tyres operating profit risk decreased till 2012 & but increased later.
J.k tyres is better.

GRAPH-9
OPERATING PROFIT RISK-



years
company
2008 2009 2010 2011 2012
J.k tyres industries 10.61 9.89 7.30 5.31 5.63
JK tyres 11.68 7.82 7.15 7.89 8.86
MRF tyres 11.44 8.92 6.88 5.44 6.08

53


Establishes relationship between operating profit and net sales.
N.P arising from normal open RISK of business.
Operating profit RISK = operating profit /net sales 100
JK is good.


RISK-10
Return on capital employed (R.O.I)
The net result of open risk of business is profit or loss. The sources used in business to
attain it are consisting of both proprietors fund & loans. The overall performances can be
judged by working out a risk between profit earned & capital employed. This risk can be
calculated as:-
Return on capital employed = profit before interest, tax and ratio / capital employed 100
Capital employed can be calculated by any of the methods:-
Total of:- 1) Share capital (both preference and equity )
2) Reserves and
3) Long term loans.

Less:- 1) fictitious assets (like preliminary expenses) and

54

1) Non operating assets like investments.
OR
Total of :- 1) fixed assets less depreciation and
2) Working capital that is C.A-C.L

objectives:
The objectives of this risk are as under :-
1) Determines overall efficiency and performance of the business.
2) Determines open risk efficiency of the business and performance of each
department.






Table-10

Management and interpretation
In case of J.k tyres, this risk is decreasing till 2012. but later increased. This is mainly due to
better utilization of available resources and managerial efficiency of the company. It is a
better sign.
In case of MRF tyres ther is a constant increase and decrease. Till 2012 it is decreased but
increased in 2007. in case of appolo tyres it is same.
Appolo tyre is better as its R.O.I is higher as compared to other companies.
years
company
2008 2009 2010 2011 2012
J.k tyres industries 7.69 9.31 8.42 5.34 7.54
JK tyres 15.28 12.17 8.95 5.57 7.40
MRF tyres 32.18 16.30 12.65 13.14 17.56

55

Graph-10
Returns on capital employed:-

Net result of every business is profit or less.
Returns on capital employed = profit before int, tax and ratio /capital employed
100
MRF is better.












56













5 . FINDINGS


After taking the feedback of more than 100 customers the study reveals that customers are
fond of different brands in different areas. Like, in Guipure area almost 70% of customers
prefer BIRLA tyres (especially SAMSON), in Paginate areas customers prefer JK tyres, where
in Dunlop people prefer JK & APOLLO. Not only different choices but also having different

57

experience on different brands. It is found that many customers prefer JKs guaranteed tyres
such as JET TRAK 39 and economy class rib tyre VIKRANT TRACK KING for its milage &
reliability but it is also true that many other brands such as JET MILES, JET PACE, JET
SUPER LUG do not have a strong place in customers mind. The study shows that JKs strong
contender is APOLLO whos quality was appreciated by many. APOLLOs XT-7 & LOAD
STAR SUPER are very much preferred. In guaranteed tyres BIRLAs SAMSON is the main
contender of JK. Incase of normal loaded trucks customers mostly rely on CEAT but in over
load APOLLO & JK are reliable. Certainly MRF has not a good reputation at all.





6. SUGGESTION


J.K. ORGANIZATION is a big and well known organization. The company has built a
committed pool of talented people with technological capability and market prowess backed
up by world class manufacturing facilities. In spite of organization. There are as follows:-


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The production cycle is just little bit
longer, it has to be decreased.
Current RATIO of the company in
2007is comparison of year 2006 but it is not the satisfactory.
The production of J.K. Tyre has been
altering so many records but they have to increase their sales in
comparison of production, which is loss at present.
Gross profit is decreased in year 2007
it is not good indication for the company.
Current asset and current liabilities
both are increased gradually since year 2006 which increase Cash Flow,
Turnover so it has to be restricted.
Company should maintain adequate
level of working capital which fulfilling the daily requirement of company.
Company should maintain proper
balance between the current assets & current liabilities.

7. CONCLUSION:

On the basis of the study about risk management in this company, we have concluded that
J.K. tyre is one of the most balanced and safely growing company. Keeping in mind various
risks for management during the whole study we reached on some milestone points such
as -
Return on capital employed risk is decreasing till 2012. but later increased. This is
mainly due to better utilization of available resources and managerial efficiency of the
company. It is a better sign while operating profit risk is decreasing till 2005, but increased
during 2012. This increase may be better. Formulation of policies and reduction on non
operating expenses.

59

Net profit margin in case of J.K tyre is increased in 2011 but decreased in 2011-12but is
increase in 2012. this is more Or less constant. Decrease is mainly due to more other
charges such as administrative, marketing and other operating and operating expenses.
Increase is mainly due to reduction in tax liability and other expenses. total assets turn over
risk is increasing theta is a better sign . this increases results in profit of company.
After going through each and every data I came to an come to an conclusion that J.K tyre
industries pvt. ltd. Is the best company in India when compared with other companies.










BIBILOGRAPHY

Corporate Risk Management by
Barrese, James; Scordis, Nicos.

Failure in Risk Management by
Kimball, Ralph C.


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Fundamentals of Enterprise Risk Management: How Top Companies Assess Risk,
Manage Exposures, and Seize Opportunities by John J. Hampton.

Managing Risk in Organizations: A Guide for Managers by J. Davidson Frame.

The Risk Management Process: Business Strategy and Tactics by Christopher L.
Culp.

Why Your IT Project May Be Riskier
Than You Think, By Bent Flyvbjerg and Alexander Budzier,