SUMMER TRAINING PROJECT REPORT ON

“COMPARATIVE STUDY OF J.K. CEMENTS FINANCIAL

TRENDS AND WITH OTHER COMPANIES”

SUBMITTED IN THE PARTIAL

FULFILLMENT OF THE TWO YEAR
FULL TIME MBA PROGRAMME

2007-2009

VISION SCHOOL OF MANAGEMENT

Udaipur Road, Chittorgarh

[email protected]
www.visionmanagement.org

Submitted To: - Submitted By: -

Mr. R.P.Singh Trisha Das
G.M. (HRD&RTC) MBA-II

1
PREFACE

The industrial training provides an opportunity to student to demonstrate application of

his/her knowledge, skill and competencies required during the technical session. Training
also help the student to devote his/her skill to analyze the problem to suggest alternative
solutions, to evaluate them and to provide feasible recommendations on the provided
data.

The project report is on the topic of “COMPARATIVE STUDY OF J.K. CEMENT

FINANCIAL TRENDS AND WITH OTHER COMPANIES,” this project report play
dominant role in setting the frame work of managerial decisions.

The importance of Project Report is tremendously increased with the expansion of

business world. Under Financial Report, analyst basically uses Profit & Loss Account,
Balance Sheet, Ratio Analysis, Capital Structure, Different Schedule of company for
interpreting and comparison of the financial position. In this project report I have made
attempt to do comparative study of last two years data.

The objective of study is to see trends with the help of various method of comparative
study of J.K. Cement financial trends and with other companies. And give suggestions for
improvement. So it is an all over financial report of company.
J.K. Cement works
Nimbahera, Distt.Chittorgarh

2
ACKNOWLEDGEMENT

It gives me immense pleasure and a sense of honour to express my feeling of gratitude to

all those who have helped me in the successful completion of the present project.

First and foremost I am deeply indebted to the management of J.K. Cement, Nimbahera
in particular for not only having permitted me to undertake this study in the organization
but also for having provided me able and expert guidance at various stages of the project
till completion.

I wish to place on record my gratefulness with deep sense of gratitude to my project

supervisor Mr. R.P. Singh, General Manager (HRD & RTC) for his valuable advice
and assistance, which were extremely helpful in bringing out this project work
successfully. I am also thankful to Mr. Narendra Vaishnav (Officer- RTC).

I pay sincere gratitude to parents and friends who always inspire and guided me in
completion of this task.

At the last, but not the least I am thankful to the management of J.K. Cement which has
give me the opportunity to work on this project.

(TRISHA DAS)

3
EXECUTIVE SUMMARY

FINANCIAL STATEMENTS are prepared primarily for decision-making. The

statements are not an end in themselves, but are useful in decision-making.

FINANCIAL ANALYSIS is the process of determining the significant operating &

financial characteristics of a firm from accounting data. The Profit & Loss Account and
Balance Sheet are indicators of two significant factors – Profitability and Financial
Soundness.

The main function of FINANCIAL ANALYSIS is the pinpointing of the strength and
weakness of a business undertaking by regrouping and analysis of figures contained in
the financial statements.

RATIO ANALYSIS of a firm’s financial statements is interest to a number of parties,

mainly shareholders, creditors, debtors, firm’s own management etc. people in various
walks of life are at present interested in ratio analysis though in different ways and
fashion and each, however, from his own angle.

The type of RATIO ANALYSIS, its nature and dimension differ from party to party
according to their objectives of financial analysis. Different ratios are used to signify
different trends in the working of the firm.

4
CONTENTS

S.No. Particulars Page no.

Preface

Acknowledgement

Executive Summary

Introduction of Organization 7-12

1.

What is Cement 14-15

2.

Indian Cement Industry Scenario 17-25

3.

Corporate Profile 26-27

4.

Company Strength 28-29

5.

Company achievements 30-31

6.

Corporate Plan 32-33

7.

Products 34-44
8.

Financial Analysis 46-52

9.

Comparative Financial Analysis with Other Companies 53-59

10.

SWOT Analysis 60-61

11.

Suggestions 62
12.

Conclusions 63
13.

Bibliography 64
14.

5
INDIAN CEMENT INDUSTRY
SCENARIO

WHY INDIA

POLICY

TRENDS AND PLAYERS

MARKET/OPPORTUNITIES FOR INVESTMENT

6
INDIAN CEMENT INDUSTRY

The Indian cement industry with a total capacity of 151.2 million tones (including mini
plants) in March 2003 has emerged as the second largest market after China, surpassing
developed nations like the USA and Japan. Per capital consumption has increased from
28kg in 1980-81 to 110kg in 2003-04. In relative terms, India’s average consumption is
still low and the process of catching up with international averages will drive future
growth.

Infrastructure spending (particularly on roads, ports and airports), a spurt in housing

construction and expansion in corporate production facilities is likely to spur growth in
this area. South –East Asia and the Middle East are potential export markets. Low cost
technology and extensive restructuring have made some of the Indian cement companies
the most efficient across global majors. Despite some consolidation, the industry remains
somewhat fragmented and merger and acquisition possibilities are strong. Investment
norms including guidelines for foreign direct investment (FDI) are investor-friendly. All
these factors present a strong case for investing in the Indian market.

A GLOBAL HEAVY WEIGHT

India is the second largest cement producing country in the world. Cement demand in the
country grows at roughly 1.5 times the GDP growth rate. The industry had a turnover of
around US$7.8 billion in 2003-04 and according to CRISIL is expected to grow at a
CAGR of around 7per cent in the next five years. The demand for cement is closely
related to the growth in the construction sector. Consequently, cement demand has been
posting a healthy growth rate of around 8per cent since 1997-98, propelled by the
increased thrust on infrastructure development, and the higher demand from the housing
sector and industrial projects. This trend is likely to continue in the coming years.

7
LOW PER CAPITAL CONSUMPTION – A LONG TERM
OPPORTUNITY

PER CAPITAL CONSUMPTION OF CEMENT (2003)

1230

1030

830

630

430

230

0
China India US Japan Korea Mexico Germany Thailand France

Source: United State’s Geological Survey

Another factor that makes Indian cement an attractive investment destination is the
combination of a lower per capital consumption and a faster growth rate. The Indian
cement industry has registered a production of more than 100 million tones since 2001-02.

The per capital consumption of 102kg as compared to the world average of 260kg, 450kg
in China and 631kg in Japan underlines the tremendous scope for growth in the Indian
cement industry in the long term.

8
Prices and Profits to the Firm

Major players in the industry are not planning any significant capacity addition for the
next two years. Considering the gestation period of setting up a cement plant, additional
supply from new capacities, if any, will arrive only from 2005-06 onwards. Limited
capacity additions and high demand will narrow the demand supply gap, improve price
realizations and lead to higher profitability.

Any further reduction in import duties on cement and clinkers is unlikely to affect the
industry as the cement produced is at par with the international standards and the prices
are lower than those prevailing in other international markets.

POLICY
Opening up the FDI Channel
The impact of government policies on cement demand has been steadily decreasing with
the sector being gradually deregulated. At present, 100per cent foreign direct investment
(FDI) is permitted in the cement industry. Lafarge was the first foreign company to enter
the Indian market in 1999.

Easing Environment Norms

To set up a cement plant in India, with an investment of over US$22million entrepreneurs
are required to obtain environmental clearance from the Ministry of Environment.100per
centFDI is allowed for private cement companies to set up power projects as well as coal
or lignite mines for captive consumption. State policies and norms to encourage
investment.
Both the state and export policies promote cement production. Exporters can claim duty
drawbacks on imports of coal and furnace oil up to 20 per cent of the total value of
imports. Most state governments offer fiscal incentives in the form of sales tax
exemptions in order to attract investment. In some states, this applies only to intra-state
sales, like Madhya Pradesh and Rajasthan. States like Haryana offer a freeze on the
power tariff for 5years, while Gujarat offers exemption from duty on electricity.

9
TRENDS AND PLAYERS

Cement production in India has increased at a CAGR of 8.1per cent during the last
decade with a production level of 117.5million tones in 2003-04. The cement industry
comprises 125 large cement plants (capacity more than 0.198million tones per annum)
with an installed capacity of 148.28million tones and more than 300 mini cement plants
(capacity less than 0.198million tones per annum) with an estimated capacity of
11.10million tones per annum.

The industry worked at an estimated 80.2per cent capacity in 2003-04. Small plants,
however, work at an installed capacity of around 40per cent.

Among the different varieties of cement, India produces Ordinary Portland Cement
(OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS),
Oil Well Cement, Rapid Hardening Portland Cement and Sulphate Resisting Portland
Cement. The share of blended cement in total cement production has increased from
29per cent in 1997-98 to 54.5per cent in 2003-04.

Deconstructing Costs
Energy (including the landed cost of coal), freight and limestone costs are the major cost
components of the cement industry. These costs account for around 35per cent, 22per
cent and 9.5per cent of the total production costs respectively.

Decline in energy cost

Indian cement companies have been able to curtail costs through the setting up of captive
power plants. There has been a decline in the average coal consumption from 0.18 tones
per tone of cement to 0.17 tones per tone due to pyro processing systems, increased usage
of imported coal (with higher calorific value) and the higher production of blended
cement. The switch from the wet process to the dry process of cement manufacturing has
also aided in saving energy costs.

10
DOMESTIC PLAYERS

Associated Cement Companies Ltd (ACCL)

ACC Ltd manufactures ordinary Portland cement, composite cement and special cement
and has begun offering its marketing expertise and distribution facilities to other
producers in cement and related areas. It has twelve manufacturing plants located
throughout the country with exports to SAARC nations. The company plans capital
expenditure through acquisitions. Non-core assets are to be divested to release locked up
capital. It is also expected to actively pursue overseas project engineering and
consultancy services.
Birla Corp
Birla Corp’s product portfolio includes acetylene gas, auto trim parts, casting, cement,
jute goods, calcium carbide, yarn etc. The cement division has an installed capacity of
4.78million metric tones and produced 4.77million metric tones of cement in 2003-04.
The company has two plants in Madhya Pradesh and Rajasthan and one each in West
Bengal and Uttar Pradesh and holds a market share of 4.1per cent. It manufactures
Ordinary Portland cement (OPC), Portland pozzolana cement, fly ash-based PPC, Low-
alkali Portland cement, Portland slag cement, low heat cement and sulphate resistant
cement. Large quantities of its cement are exported to Nepal and Bangladesh. Going
forward, the company is setting up its captive power plant to remain cost competitive.
Grasim – Ultra Tech Cemco
Grasim’s product profile includes viscose staple fibre (VSP), grey cement, white cement,
sponge iron, chemicals and textiles. With the acquisition of Ultra Tech, L&T’s cement
division in early 2004, Grasim has now become the world’s seventh largest cement
producer with a combined capacity of 31million tones. Grasim (with Ultra Tech) held a
market share of around 21per cent in 2003-04. It has plants in Madhya Pradesh,
Chattisgarh, Punjab, Rajasthan, Tamil Nadu and Gujarat among others. The company
plans to invest over US$ 9million in the next two years to augment capacity of its cement
and fibre business. It also plans to focus on its international ventures, ramping up the
capacity of Alexandra Carbon Black in Egypt to 1,70,000 tones Per annum (from1,
20,000tpa) and raising the capacity of the carbon black plant in China from12,000tpa to
60,000 tpa.

11
Gujarat Ambuja Cements Ltd (GACL)
Gujarat Ambuja Cements Ltd was set up in 1986 with the commencement of commercial
production at its 2million tone plant in Chandrapur, Maharashtra. The group has clinker-
manufacturing facilities at Himachal Pradesh, Gujarat, Maharashtra, Chattisgarh, Punjab
and Rajasthan. The company has a market share of around 10per cent, with a strong
foothold in the northern and western markets. Its total sales aggregated US$ 526million
with a capacity of 12.6million tones in 2003-04. Gujarat Ambuja is India’s largest cement
exporter and one of the most cost efficient firms. GACL has a 14.45per cent stake in
ACC, making it the second largest cement group in the country, after Grasim-Ultra Tech
Cemco.
The company has free cash flows that it is likely to use to grow inorganically. The
company is scouting for a capacity of around two million tone in the northern and
western markets. It has also earmarked around US$ 195-220 million for acquisition.

India Cements
India Cements is the largest cement producer in southern India with a total capacity of
8.81million tones and plants in Andhra Pradesh and Tamil Nadu. The company has a
market share of 5.4 per cent with a total cement production of 6.36 million tones in 2003-04.

Its product portfolio includes ordinary portland cement and blended cement. The
company has limited its business activity to cement, though it has a marginal exposure to
the shipping business. The company plans to reduce its manpower significantly and exit
non-core businesses to turn around its fortune. It also expects the export market to open
up, with the Gulf emerging as a major importer.

JK Synthetics
JK Synthetics, a Singhania Group company, started manufacturing nylon at Kota in 1962.
Subsequently, it diversified into PSY/PFY, nylon tyre-cord, cement (in 1975), acrylic and
white cement (1984). The company has a market share of 2.7per cent. JK Synthetics
Limited is restructuring its business divisions into two separate entities- JK Cements and
JK Synthetics. After the restructuring, it will be left with a cement plant at Nimbahera in
Rajasthan, with a capacity of 3.26 million metric tones and manufacturing white cement.

12
FOREIGN PLAYERS

Holcim
Holcim, earlier known as Holder bank, has a cement production capacity of 141.9million
tones. It is a key player in aggregates, concrete and construction related services. It has a
strong market presence in over 70 countries and is a market leader in South America and
in a number of European and overseas markets. Holcim entered India by means of a long-
term strategic alliance with Gujarat Ambuja Cements Ltd (GACL). The alliance aims to
strengthen their clinker and cement trading activities in South Asia, the Middle East and
the region adjoining the Indian Ocean. Holcim also intends to use India as an additional
base for its IT operations, R&D projects as well as a procurement sourcing hub to
generate additional synergies and value for the group.

Italcementi Group
The Italcementi group is one of the largest producers and distributors of cement with 60
cement plants, 547 concrete batching units and 155 quarries spread across 19 countries in
Europe, Asia, Africa and North America. Italcementi is present in the Indian markets
through a 50:50 joint venture company with Zuari Cements. All initiatives in southern
India are routed through the joint venture company, while Italcementi is free to buy deals
in its individual capacity in northern India. The joint venture company has a capacity of
3.4million tones and a market share of 2.1per cent.

Lafarge India
Lafarge India Pvt. Ltd, a subsidiary of the Lafarge Group, has a total cement capacity of
5million tones and a clinker capacity of 3million tones in the country. Lafarge
commenced operations in 1999 and currently has a market share of 3.4per cent. It exports
clinker and cement to Bangladesh and Nepal. It produces Portland slag cement, ordinary
Portland cement and Portland pozzolana cement. The Indian cement plants are located in
Chattisgarh and Rajasthan. Lafarge Cement has become the largest cement-selling firm in
the Indian markets of West Bengal, Bihar, Jharkhand and Chattisgarh.

13
MARKET OPPORTUNITIES FOR INVESTMENT

Growing demand-supply gap

Capacity additions (million tones)

Capacity additions (million tones)

250

200
195.2

168.2
150
146.4
117.3

100

50

0
2003.4 2006-07

Capacity demand

According to CRISIL estimates, given the demand-supply gap of roughly 40million

tones, capacity addition is expected over the next five years. Of this, almost 30million
tones will be met through Greenfield/brownfield expansions and 10million tones through
blending. The capacity addition of 30million tones would require an investment of
around US$ 2.2 billion.

14
Consolidation opportunity: Merger and Acquisitions

Cement capacity that can be sold million tones

Million tones
East 1.20
West 2.36
North 10.37
South 9.42
Total 23.35

Consolidation is expected to increase further in the cement industry. Around 23million

tones of additional capacity could be sold simply because on a stand-alone basis these
units are unviable. As part of a larger group, their operations could be cost effective. This
opens up a number of possibilities for acquisitions and mergers.

The Infrastructure Opportunity

The National Highways Development Project (NHDP) includes the 5,846km Golden
Quadrilateral (GQ) and the 7,300km North-South, East-West corridor. In addition, up-
gradation of rural roads, up-gradation to four/six lanes of about 13,000km of National
Highways and 10,000km of additional highways have been initiated.
The NHDP is expected to lay a significant part of the roads in cement concrete. Thus, if
25per cent of the roads of East-West corridors are laid by concrete, it is likely to lead to
an incremental demand of 5-6million tones of cement per annum. Likewise, the Golden
Quadrilateral is expected to add 4-5million tones of demand per annum. The total
demand from these road projects is expected to generate an incremental growth of 4-5per
cent per annum over the next 2-3 years.
Among other infrastructure sectors, construction and modernization of four airports and
two seaports, railroad, power plants and water management systems are also likely to
boost the demand for cement, in particular the ready-mix cement.

15
CORPORATE PROFILE

Vision –
“To be a premium conglomerate with a clear focus on each business.”

Mission –
“To deliver superior value to our customers, shareholders, employees and society
at large.”

Values –
“Respect for the individual, integrity, speed, simplicity, seamlessness, self
assuredness and a 100per cent commitment are the values we value.”

Management Philosophy –
 Customer Satisfaction

 Always invest in latest technology

 Huge distribution network creation

 Expansion through balancing equipment

 Constant focus on cost control & quality

 Invest in Managers & Develop people skills

 Stability of Executive Management & Low Employee Turnover

 Social Welfare – A Priority

16
Salient Features –
1. First dry process plant in India.

2. Latest process precalcinator technology for clinker.

3. UNT –II was first PLC controlled cement plant in India.

4. Most modern and sophisticated central control room for entire process
control from one point.

5. First Fuzzy Logic Control kiln and Cen-scanner for monitoring of kiln
shell temperature in India.

6. On-line quality control by X-ray analyzer.

7. First computerized management system in Indian cement industry.

8. Now computerized management system extended to stores, purchase,

sales, accounts, personnel functions.

9. Continuous on going process of training & development.

COMPANY STRENGTH
17
We enjoy a number of key competitive advantages, which have helped us maintain our
position as one of the leading cement manufactures in the Northern Indian cement
market. Our principal strengths and competitive advantages are as follows:

Leading position in attractive Northern India grey cement market:

Based on CMA data, Northern Indian cement manufacturers have consistently operated at
the highest levels of capacity utilization among India’s five regions. We believe this
reflects the strong demand in Northern India for cement products relative to supply.
Further, based on capacity expansions announced by cement manufacturers, we except
cement plants in Northern India to continue to operate at high utilization levels and
anticipate continued strong demand for our grey cement products in the near and
medium-term. We believed that we are well positioned to take advantage of this demand,
as the fourth largest grey cement manufacturer in Northern India, and the largest grey
cement manufacturer in the state of Rajasthan.

Second largest white cement producer in India:

White cement accounted for 16.6% of our total revenue and 35.2% of adjusted EBITDA
from our cement operations in fiscal 2005, and 15.5% of revenues and 26.7%
of our adjusted EBITDA from our cement operations in the six months ended
September 31,2005.

Unlike grey cement, the white cement industry in India is highly concerned with the two
largest players accounting for the substantial majority of India’s production capacity.
Consequently, prices of white cement have been relatively less volatile and sales of white
cement have generated more stable cash flows for us even during industry downturns in
grey cement. We also believe our position as the second largest producer of white cement
in India, together with our nationwide delivery network, significantly enhances the
overall brand image of JK Cement.

Proximity and access to large reserves of high quality limestone:

18
We have access to large reserves of limestone for both our grey and white cement
operations, which we believe are sufficient to sustain our operations well into
the future. Based on independent geological surveys of different mines during
1996 to 2001, we believe that our limestone reserves are sufficient to support
our current and planned capacity for approximately 40 years for both grey
and white cement. (Put in risk assuming we are able to renew our existing
leases upon their expiry). As one of the first cement producers in Northern
India, we were able to choose our limestone reserves in an area with high
quality limestone resources. In addition to allowing us to produce white
cement, which requires high quality limestone, it also provides us with a cost
advantage, as we are not required to purchase sweeteners to improve the
quality of limestone.

Further, our manufacturing plants are in close proximity to our limestone reserves,
resulting in lower transportation costs. Finally, our mines that supply our
white cement plant at Gotan also have a supply of white clay, an important
additive necessary for white cement production.

Experience and technical know-how:

We have 30 years of experience in the Indian cement industry, which we believe provides
us with the skills to maximize production efficiency, expand production capacity quickly
and reduce costs. Over the years, we believe that we have developed long-term customer
relationship and a strong reputation for quality.
Further, we have a stable and experienced middle and senior level management team,
many of whom have been working in our cement operations for more than 20 years. Our
Nimbahera manufacturing facility was chosen by World Bank and the Danish
International Development Agency as one of the four training centers in India to serve as
the “Regional Training Center” for Northern India.
There are only four regional training centers for the cement industry in India, and we
believe our operation of the training center provides us with access to state of art training
aids, live working models, and technical expertise developed by well known national and
international cement producers.

19
COMPANY ACHIEVEMENTS

The key events in respect of the JKSL Cement Division and the Company are set forth
below:

Year

1975
The grey cement plant at Nimbahera, with an initial capacity of 0.3 MnTPA, commenced
commercial production

1979
A second production line was added at Nimbahera, increasing the capacity from 0.3
MnTPA to 0.72 MnTPA

1982
A third production line was added at Nimbahera, increasing the capacity from 0.72
MnTPA to 1.14 MnTPA

1984
Lime-based white cement plant was established at Gotan, with an initial capacity of 0.05
MnTPA

1987
A captive thermal power plant was installed at Bamania

1988
A pre-calciner was installed at Nimbahera, increasing the total capacity to 1.54 MnTPA

1990
The JKSL Cement Division instituted Architect of the Year award

1994

20
(i) The Company was incorporated
(ii) The Regional Training Centre for Northern India, which was established at the
Nimbahera plant of the JKSL Cement Division with aid from the World Bank and the
Danish International Development Agency, commenced service

2000
The total capacity of the white cement plant at Gotan was increased to 0.3 MnTPA as a
result of continuous modernization and upgradation

2001
A new grey cement plant with a capacity of 0.75 MnTPA was installed at Mangrol

2004
(i) The Company acquired the JKSL Cement Division
(ii) The total capacity of the grey cement plant at Nimbahera was increased to 2.8
MnTPA as a result of continuous modernization and upgradation

2005
(i) The Company allotted 7,426,950 Equity Shares to the shareholders of JKSL pursuant
to the AAIFR order dated January 23, 2003
(ii) The Company was listed on the BSE

2006
-JK Cement has finalised the issue price of its recently concluded initial public offering
(IPO) at Rs 148 per share.
-Jk Cement Limited has informed that w.e.f. 16.12.2006 Mr. Manish Bajpai Company
Secretary and Compliance Officer of the company has resigned and in his place Mr.
Ashish Sabharwal has been appointed as Company Secretary.

2007
-Jk Cement Limited has appointed Dr. K.B. Agarwal as Additional Director of the
Company to hold office until the conclusion of next Annual General Meeting.

CORPORATE PLAN
21
Increase Power generation capacity to 50MW by 2006-2007. Establish one R&D center
for cement & its applications such as concrete, tiles etc. To achieve specific power
consumption level of 85units per tone of cement. J.k. Cement has excellent track record
of HR Planning and Development. The initiative taken for setting up Regional Training
Center (RTC) as Nimbahera (in the campus of J.K. Cement works) is an indication of
Management’s commitment towards HRD. The Center at Nimbahera is one of the four
RTC’s in India and caters the manpower development needs, not only to J.K. Cement
Works, but also supports cement industry in Western M.P., Rajasthan, Haryana, Jammu
& Kashmir, Himachal Pradesh and Punjab (i.e. Northern Region).

1. First Five-Year Plan (1951-56): -

In the beginning of the first five-year plan, there were 22 factories with a production was
2.69million tones only. The target set for the first five-year plan was 5.02million tones.
Therefore, capacity enhancement was the main objective of this plan.

2. Second Five-Year Plan (1956-61): -

Due to the rising demand a the end of the first plan period government imposed a sort of
control of issuing an order under section 18G of the industries (Development &
Regulations) Act, 1951, making it necessary for all cement producers to sell their total
production to State Trading Corporation of India for distribution to consumers at uniform
price fixed by the Government from time to time on F.O.R. destination basis.

3. Third Five-Year Plan (1961-66): -

This plan marked for industrial growth led the government to anticipate a heavy shortage
of cement and to meet this challenges. Expansion programs were undertaken:
 To make survey for the prospecting and providing cement grade limestone in
the country.
 To set up unit in public sectors to achieve plan targets.
 To support all the ancillary and subsidiary activities connected with cement and
make efforts for its growth and development.

22
4. Policy of 1980:
National Highway Project, new railway lines, bridges, irrigation canals and dams
reshaped the country and projected a new face of the industrialist’s scenario. The
government of India had to decide start a partial decontrol of cement industry and
subsequently to fuller decontrol of it. The new policy granted cement manufactures a
profit of about 12% in their investments so that rapid increase in cement production can
take place to bridge the gap of demand and production capacity.

Greenfield Grey Cement at Karnataka in Jaykaycem Ltd

A Greenfield Grey Cement project is being set up in Jaykaycem Ltd. (wholly owned
subsidiary of the Company) at Mudhol in the State of Karnataka with a capacity of 3.5
million tones at an estimated project cost of Rs.1050 crores (Rs.950 crores to be spent in
first phase and Rs.100 crores in second phase for putting up a Grinding Unit at
Bellary). The project cost includes cost of Captive Power plant of 50 MW. Foundation
stone of the plant was laid on 8th December; 2007.The Company is in process of
obtaining various approvals. Necessary land has already been acquired and orders for
long delivery items of plant and equipments have already been placed. Financial closure
of the project is likely to be completed by end of September 2007. The Company
proposes to invest about Rs. 400 Crores in the said project from its internal accruals. A
total sum of Rs.76.40 crores has already been spent on the project. Barring unforeseen
circumstances, the project is expected to be on stream in first quarter of 2009.

During the year, the Company has acquired from IDBI the assets of Nihon Nirmaan Ltd.
at Gotan for Rs.42 crores. The Company has decided to utilize this facility to produce
Grey cement. It has been decided to revenue these facilities at an estimated cost of Rs.70
crores the capacity of plant is expected to be 4 Lacs Tons Revamping has already started
and it is likely to be completed by December 2007. In the meantime, the Company has
already started grinding facilities at the plant w.e.f. 19.3.2007.

23
PRODUCTS

We produce grey cement and white cement. Grey cement produced by us consists of
Ordinary Portland Cement (“OPC”) and Portland Pozzolana Cement (“PPC”). OPC has
three principal grades that are differentiated by their compressive strengths, and consists
of 53-grade, 43-grade and 33-grade OPC.

All our products comply with the quality standards specified by the Bureau of Indian
Standards (“BIS”). Our cement products are marketed under the brand names J.K.
Cement and Sarvashaktimaan for OPC products, J.K. Super for PPC products and J.K.
White and Camel for white cement products, which we believe are well known brands in
their respective markets.
Types of Cement

Grey Cement White Cement J.K. Wall Putty

GREY CEMENT:

SPECIFICATION GREY CEMENT

RAW MATERIAL LIMESTONE & GYPSUM
TRADE NAME SARVASHAKTIMAAN
TRADE MARK VIJAYSTAMBH
PRODUCTS GRADES 43, 53, PPC
PACKAGING CAPACITIES 50 Kg per bag

24
During the year under report, the production of Grey cement at Nimbahera and Mangrol
plants was higher at 3.64 million tons compared to 3.51 million tons in the previous year.
Sales volume also increased in tandum with production. Higher realizations during the
current year coupled with increase in production of blended cement resulted in
substantially higher profits after setting of price increase of various inputs.

INFORMATION REQUIRED UNDER SECTION 217(1)(e) OF THE

COMPANIES ACT, 1956

A. CONSERVATION OF ENERGY

(a) Energy conservation measures taken:

* Installation of Cement Mill 5 to increase production of Cement Mill 4 along with close
circuiting.

* Installation of Cement Mill 6 to increase production of Cement Mill 3 along with close
circuiting

* Enlargement of down comer duct of PH 2 to save power.

* Replacement of Cement Mill 4 separator

* Feeding of fly ash at outlet of Cement Mill 3 from fly ash silo

* Close circuiting of 1 & 2 Cement Mills.

* ESP up gradation work at Kiln 4

* Additional Elevator for Cement Mill No.8

* Dust & Spillage Control System

25
* Installation of 13.0 MW waste heat recovery power plant.

* Installation of 20 MW Pet coke based captive power plant.

* Installation of 10 MW Turbine at Bamania to replace existing 7.5 MW Turbine.

* Installation of control & automation system at Kiln -3.

B. TECHNOLOGY ABSORPTION

(i) Research & Development, specific area in which R & D has been carried out.

* Increase in fly ash in PPC production

(ii) Benefits Derived as a result of above R & D

* Fly ash addition has been increased from 18.44% to 24.08% at NBH and from 17.72%
to 21.56% at Mangrol

* Reduction in cost

* Cleaner Environment

* Smooth & continuous running of Kiln & raw mill

(iii) Future Action Plan

* Size reduction of clinker granule and limestone

* Mechanical transport system for Kiln 1&2 CM 3&4

(iv) Expenditure on R & D

26
The Research & Development activities are carried out by our own team under the
advice and consultancy of foreign consultant. Apart from regular expenditure on research
activities debited to profit & loss account under different heads, the company has paid
contribution of Rs. 29 lacs to Research institutes for carrying out research and
development work related to Company's products.

(v) Efforts in brief, made towards Technology Absorption, Adaptation and innovation.

* Daily monitoring of power consumption

* Preventive monitoring of all critical equipments.

WHITE CEMENT:

The production of white cement at 248880 M.T. during the year under review against
226729 M.T. in 2005-06 recorded growth of 9.77%. This was mainly on account of
robust growth of around 65% recorded in export volumes (37294 tons vs. 22472 tons).
The growth in domestic market (including Nepal) was 3.59%. Increased market of value
added products mainly wall putty also contributed to additional profits.

A. CONSERVATION OF ENERGY

(a) Energy conservation measures taken:

* Steam exhaust cyclone dust collection arrangement modified for online re-feeding,
eliminating the operation of additional drug chain to conserve energy

* Calciner installed to enhance kiln capacity and achieve further reduction in energy
consumption.

* A clay crusher was developed and installed at raw mill to take care of large size lumps
and to cater demand for increased capacity resulting in smooth operation and energy
conservation.

27
(b) Additional Investments & proposals being implemented for reduction in conservation
of energy.

B. TECHNOLOGY ABSORPTION

(i) Research & Development, specific area in which R & D has been carried out.

* Clinker dryer circuit optimization to achieve homogeneous seasoning resulting in

improved cement quality

* Kiln inlet modified with improved seal to reduce the fresh air entry to improve the
Clinkerisation process

* The clinkerisation process controls switched to free lime control in place of clinker
litre weight control by installing latest X-Ray analyzer having XRF & XRD features

(ii) Benefits Derived as a result of above R & D

* Consistency in quality with increased whiteness

* Consistency in kiln operation and clinker quality

(iii) Future Action Plan

* Complete automatic Putty manufacturing plant keeping the specialities of imported

high-speed mixers, batch controller, to cater the increased market demand and
consistency in quality.

* Upgrading of Packing machines with check weigher arrangement for 50 Kg. Cement
bags.

* Petcoke/Coal/Lignite based thermal power plant.

28
(iv) Expenditure on R & D

The Research & Development activities are carried out by our own team under the
advice and consultancy of foreign consultant. Apart from regular expenditure on research
activities debited to profit & loss account under different heads, the company has paid
contribution of Rs. 29 lacs to Research institutes for carrying out research and
development work related to Company's products.

(v) Efforts in brief, made towards Technology Absorption, Adaptation and innovation.

* Monitoring of energy consumption

* Proactive approach towards Environmental Management System

J.K. Wall Putty:

White cement based putty for luxurious and silky interior/ exterior finish of our dream
home. J.K. Wall Putty is White Cement based putty for cement plastered walls and
ceilings. J.K. Wall Putty is used to fill the uneven surfaces of cement plastered walls and
concrete walls. Application of J.K. Wall Putty provides smooth and strong finish to the
walls for further application of all kinds of paints. The smooth finish gives better look to
interiors and exteriors.

Surface Preparation:
The surface should be cleaned to make it free from dirt, dust, grease, oil and paint. All
foreign impurities should be removed with a wire-brush. Wall surfaces should be cured
so that the surface is saturated with water yet in ‘touch dry’ condition.

Treatment of New Surface:

29
The new surface requires only soft treatment such as removal of dust, dirt and foreign
matter. In case of cracks, voids and damages; it should be patched up prior to application
of J.K. Wall Putty with grey/white cement.

Treatment of Old Surface:

All loose material and/or organic growth must be removed with putty blade or brush. In
case of old painted surface scrub the surface with course emery stone/paper.

Preparation of J.K. Wall Putty Paste:

J.K. Wall Putty is a fine powder. Mix slowly J.K. Wall Putty with approx.40% water by
volume to prepare paste of desired consistency. Mix vigorously for 5-10 minutes lump
free, uniform and smooth putty paste. Product should be mixed in required quantities to
be used within 2-3 hrs. of preparation.

Application:
Apply uniformly the first coat of J.K. Wall Putty with blade/ trowel on the wall from
bottom to top. Apply second coat after the first coat has dried completely. Limit the total
thickness of 2 coats to 1.5mm. Allow completely drying and then use fine emery paper to
remove the application mark if any. Any kind of paint can be applied on this surface. Use
water for curing before applying paint.

Precaution:
Although J.K. Wall Putty does not contain any toxic material, use rubber gloves while
mixing, as prolonged exposure with water may soften the skin resulting in fine
cuts/legions due to cement particles. Precaution should be taken to avoid dust inhalation
while handling the powder putty.

Storage:
Store J.K. Wall Putty in a dry place and open the pack just before use. Keep out of reach
of children.

Advantages over Plaster of Paris (POP)

30
1. White cement based product therefore strength is more than gypsum based POP.

2. J.K. Wall Putty can be applied on exteriors/exposed surfaces where as the same is
not possible with POP.

3. J.K. Wall Putty is very white in appearance while POP is yellowish.

4. In case of J.K. Wall Putty no primer is required before painting, where as it is

compulsory for POP surfaces.

5. J.K. Wall Putty resists seepage while POP does not.

31
TECHNOLOGY CHANGES

Technology changes, needs change, and in turn products change. What remain
unchanged, are values and ideas that propel any entity forward. Ideas that are concrete
and unwavering, just like their outcome.
At JK Cement we are crossing milestones, one after another, propelled by the following
concrete ideas:
1. To provide products that fully comply with technical specifications committed to
our customers, at the most competitive price.

2. To ensure complete reliability in our dealings with customers, distributors,

suppliers and other partners.

3. To operate our manufacturing facilities in such a way, that they help sustain the
environment and provide new opportunities for the underprivileged in that region.

4. To ensure that every department of our every office encourages new and better
ideas and freedom of expressing the same, and cultivate a work environment that
rewards excellence in every employee’s chosen area of work leading to a
harmonious & fulfilling atmosphere.

5. To motivate every team member of challenge his last best performance and out do
it continually.

6. To remain abreast and imbible the latest technological trends for the benefit of our
customers.

32
Significant Market Share in Key Markets in North India

State JK Cement Market Share (FY06) Rank

%
Haryana 18.2 1
Delhi 13.4 3
Rajasthan 11.0 6
Punjab 4.0 6

Experienced Management Team and Strong Processes

People

 Professionally managed company-support by an experienced senior management

and operating team.
 Most of our senior management has been with the company for more than
20years.
 Maintain good labour relationship.
 Nimbahera plant selected as the Regional Training Centre for Northern India, by
the World Bank and Danida.

Process

 Grey cement plant at Nimbahera:

ISO 9001:2000 QMS; ISO 14001:2004 EMS Certified
 White cement plant at Gotan:
33
ISO 9001:2000 QMS; ISO 14001:1998 EMS and OHSAS 18001:2005 Certified

Sales and Distribution Network

 Well developed distribution network for Grey Cement in North India.

 Strong national distribution network for White Cement.

Sales Handling Team

64 Warehouses

4000 Retailers

Customer

Marketing Team
Grey cement 79 White Cement 101
Members Members

1.Co-ordinate with dealer network 1. Works closely with customers to

And direct customer. Retailers and increase awareness
and usage of white cement

2.Efforts to increase production of producers.

Blended cement to meet growth
In demand.

34
35
The Directors have pleasure in submitting their Thirteenth Annual Report &Audited
Statements of accounts for the year ended 31st March, 2007.

Financial Results
The Financial highlights of the company are as under:

Particulars 2006-07 2005-06

Gross Turnover 152966.52 110867.84
Profit before Depreciation & Tax 30513.99 8322.76
Less: Depreciation 3315.77 3101.83
Profit before Tax 27198.20 5220.93
Provision for Tax:
- Fringe benefit tax 200.00 150.00
- Current tax 7045.85 434.00
- Deferred tax 2152.14 1380.00
Profit after Tax 17800.21 3256.93
Add: Balance brought forward from 694.30 633.39
the Previous year
Less: Transfer to General Reserve 10000.00 2000.00
Less: Proposed Dividend on Equity 2863.52 1196.02
Shares (including tax there on)
Balance to be carried forward 5630.99 694.30

PROFIT AND LOSS ACCOUNT

Mar’08 Mar’07 Mar’06

12mths 12mths 12mths
Income
Sales Turnover 1458.25 1529.67 1108.68
Less: Excise Duty 0.00 186.03 168.86
Net Sales 1458.25 1343.64 939.82
36
Other Income 23.19 28.27 8.71
Stock Adjustments -17.27 1.84 15.55
Total Income 1464.17 1373.75 964.08
Expenditure
Raw Materials 140.90 206.47 165.07
Power & Fuel cost 0.00 309.70 285.60
Employee cost 68.48 48.84 41.20
Other Manufacturing Expenses 445.99 13.67 12.55
Selling & Administration Expenses 324.49 408.86 297.11
Miscellaneous Expenses 45.47 27.80 20.69
Pre- operative Expenses Capitalized 0.00 0.00 0.00
Total Expenses 1025.33 1015.34 822.22

Mar’08 Mar’07 Mar’06

12mths 12mths 12mths
Operating Profit
Profit before Depreciation, Interest 415.65 330.14 133.15
& Tax
Less: Interest 51.21 53.26 58.59
Profit before Depreciation & Tax 387.63 305.15 83.27
Less: Depreciation 41.07 33.16 31.02
Other Written off 0.00 0.00 0.00
Profit before Tax 346.56 271.99 52.25
Extra-ordinary items 0.00 -0.01 -0.04

Profit before Tax (post extra- 346.56 271.99 52.21

ordinary items)
Less: Tax 81.40 93.37 19.64
Reported Net profit 265.16 178.62 32.57
Total Value Addition 884.42 808.87 657.15
Preference Dividend 0.00 0.00 0.00
Equity Dividend 34.96 24.47 10.49
Corporate Dividend Tax 5.94 4.16 1.47
Per Share data
(Annualized)
Shares in Issue (in Rs.) 699.27 699.27 699.27
Earnings Per Share 37.92 25.54 4.66
Equity Dividend (%) 50.00 35.00 15.00
Book Value 109.00 73.70 50.90

CASH FLOW STATEMENT

37
Mar’07 Mar’06 Mar’05
12mths 12mths 12mths
Net Profit before Tax 271.98 52.21 10.80
Net Cash from Operating Activities 213.79 134.22 172.12
Net Cash from Investing Activities -180.97 -81.73 -584.09
Net Cash from Financing Activities -127.70 164.78 417.68
Net decrease/increase in Cash & -92.88 217.27 5.71
Cash Equivalents
Opening Cash & Cash Equivalents 285.42 68.15 62.43
Closing Cash & Cash Equivalents 192.54 285.42 68.15

COMPARATIVE BALANCE SHEET

Mar’08 Mar’07 Mar’06

12mths 12mths 12mths
Sources of Fund
Total Share Capital 69.93 69.93 69.93
Equity Share Capital 69.93 69.93 69.93
Share Application Money 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00
Reserves 692.26 445.44 285.98
Revaluation Reserves 291.15 304.74 318.37
Net worth 1053.34 820.11 674.28
Secured Loans 382.79 429.94 443.14
Unsecured Loans 127.74 97.82 110.40
Total Debt 510.53 527.76 553.54
Total Liabilities (net worth+ total 1563.87 1347.87 1227.82
debt)
Mar’08 Mar’07 Mar’06
12mths 12mths 12mths
Application of Funds
Gross Block 1089.13 1029.42 959.20
Less: Accumulated Depreciation 0.00 106.98 61.21
Net Block 1089.13 922.44 897.99
Capital Work in Progress 133.84 164.39 56.90
Investments 9.50 15.91 0.00
Inventories 114.53 110.01 83.98
Sundry Debtors 57.26 62.16 46.13
Cash and Bank Balance 145.44 45.25 32.62
Total Current Assets 317.23 217.42 162.73
Loans and Advances 353.83 176.30 115.39
Fixed Deposits 0.00 147.28 252.80
38
Total Current Assets, Loans and 671.06 541.00 530.92
Advances
Deferred Credit 0.00 0.00 0.00
Current Liabilities 289.62 255.90 247.25
Provisions 52.01 41.72 12.65
Total Current Liabilities & 341.63 297.62 259.90
Provisions
Net Current Assets 329.43 243.38 271.02
Miscellaneous expenses 1.96 1.74 1.90
Total Assets 1563.86 1347.86 1227.81
Contingent Liabilities 299.99 161.88 153.96
Book Value 109.00 73.70 50.90

DIVIDENDS DECLARED

Announcement Effective Dividend

Date Date
Type Percentage

21-05-08 16-05-08 Final 50%

14-05-07 14-08-07 Final 35%

03-05-06 19-07-06 Final 15%

CAPITAL STRUCTURE

39
From To Class of Authorize Issued Paid Up Paid Paid Up
share d Capital Shares Up Capital
Capital (Nos) Face
Value
2006 2007 Equity 80 69.93 6992725 10 69.93
Share 0
2005 2006 Equity 80 69.93 6992725 10 69.93
Share 0
2004 2005 Equity 60 49.93 4992725 10 49.93
Share 0
2003 2004 Equity 60 36.55 3654540 10 36.55
Share 0

FINANCIAL RATIOS

PROFITABILITY RATIOS

Mar’08 Mar’07 Mar’06

Adjusted Net Profit Margin (%) 17.89 12.94 3.49
Cash Profit Margin (%) 20.67 15.45 6.69
Gross Profit Margin (%) 26.16 22.20 8.87
Operating Profit Margin (%) 28.50 24.56 14.16
Profit before Interest & Tax 25.28 21.66 10.76
Margin (%)
Return on Capital Employed (%) 31.25 31.06 12.24
Return on Net Worth (%) 34.79 34.66 9.15

MANAGEMENT EFFICIENCY RATIOS/TURNOVER RATIOS

Mar’08 Mar’07 Mar’06

Debtors Turnover Ratio 24.42 24.82 21.26
Fixed Assets Turnover Ratio 1.71 1.91 1.56
40
Inventory Turnover Ratio 12.93 12.46 11.30
Total Assets Turnover Ratio 1.15 1.30 1.04

LIQUIDITY & SOLVENCY RATIOS

Mar’08 Mar’07 Mar’06

Current Ratio 1.90 1.92 1.57
Debt Equity Ratio .67 1.02 1.56
Long Term Debt Equity Ratio .67 .95 1.46

41
Comparison of J.K. Cement with various other companies such as ACC Ltd., Ambuja
Cement, Birla Corporation Ltd., and Binani Cement have been made to realize the
strength of the J.K. Cement in the presence of these strong competitors.

Given the comparisons based on:

1. PE Ratio

2. EPS (TTM)

3. NET SALES

4. FACE VALUE

5. NET PROFIT

6. DIVIDEND

7. BALANCE SHEET

COMPARISION OF PRICES WITH OTHER PEERS

18 Jul 17:31
Company 1 Year 9 Month 6 Month 3 Month 1 Month 2 Week 1 Week Last
Price
ACC 1133.10 1036.00 864.60 800.30 643.20 472.30 543.25 538.70
-52.46% -48.00% -37.69% -32.69% -16.25% 14.06% -0.84%
Ambuja 138.80 145.20 131.95 113.50 90.65 71.90 80.50 82.80
Cements -40.35% -42.98% -37.25% -27.05% -8.66% 15.16% 2.86%
Andhra Cement 30.00 34.90 40.75 26.75 23.85 21.20 22.45 23.80
-20.67% -31.81% -41.60% -11.03% -0.21% 12.26% 6.01%
Barak Vally 56.05 56.05 57.85 35.20 33.35 29.55 32.00 29.15
Cement -47.99% -47.99% -49.61% -17.19% -12.59% -1.35% -8.91%
42
Binani Cement 67.80 113.60 116.60 81.50 61.75 46.45 52.20 49.80
-26.55% -56.16% -57.29% -38.90% -19.35% 7.21% -4.60%
Birla Corp 300.90 330.95 272.10 208.75 199.40 159.40 165.25 162.30
-46.06% -50.96% -40.35% -22.25% -18.61% 1.82% -1.79%
Burnpur 46.35 46.35 37.95 23.35 20.55 15.20 16.95 16.05
Cement -65.37% -65.37% -57.71% -31.26% -21.90% 5.59% -5.31%
Chetinad Cem 433.00 436.95 452.50 483.35 505.75 500.00 501.00 483.00
11.55% 10.54% 6.74% -0.07% -4.50% -3.40% -3.59%
Dalmia Cement 370.40 522.30 481.90 289.40 265.10 224.10 226.40 213.85
-42.27% -59.06% -55.62% -26.11% -19.33% -4.57% -5.54%
Gujarat Siddhee 21.05 28.70 32.20 21.05 21.70 23.60 22.25 22.40
Cement 6.41% -21.95% -30.43% 6.41% 3.23% -5.08% 0.67%
India Cements 229.35 289.65 251.95 186.65 164.05 124.80 133.45 135.70
-40.83% -53.15% -46.14% -27.30% -17.28% 8.73% 1.69%
JK Cement 158.70 175.05 184.70 152.20 140.55 136.20 131.95 127.25
-19.82% -27.31% -31.10% -16.39% -9.46% -6.57% -3.56%

JK 137.20 186.30 168.70 118.70 98.10 83.35 89.10 80.35

LakshmiCemen -41.44% -56.87% -52.37% -32.31% -18.09% -3.60% -9.82%
386.00 375.15 666.05 443.80 342.20 232.10 258.15 256.70
KCP -33.50% -31.57% -61.46% -42.16% -24.99% 10.60% -0.56%
Madras 3497.80 4039.55 3779.40 3353.35 2896.50 2763.75 2536.45 2,486.30
Cements -28.92% -38.45% -34.21% -25.86% -14.16% -10.04% -1.98%
Mangalam 170.30 208.20 162.05 135.70 113.25 101.40 95.80 92.70
Cement -45.57% -55.48% -42.80% -31.69% -18.15% -8.58% -3.24%
Mysore Cement 57.35 51.90 49.25 37.00 33.10 25.85 31.90 29.05
-49.35% -44.03% -41.02% -21.49% -12.24% 12.38% -8.93%
OCL India 151.60 190.75 280.25 152.10 128.75 95.90 102.50 95.80
-36.81% -49.78% -65.82% -37.02% -25.59% -0.10% -6.54%
Panyam 77.05 91.80 107.70 142.80 162.15 160.40 153.15 187.45
Cements 143.2% 104.19% 74.05% 31.27% 15.60% 16.86% 22.40%
Prism Cement 49.50 65.65 57.25 44.55 37.45 31.35 34.85 32.90
-33.54% -49.89% -42.53% -26.15% -12.15% 4.94% -5.60%
Rain 147.00 163.80 255.05 253.00 220.00 169.20 188.40 175.60
Commoditie 19.46% 7.20% -31.15% -30.59% -20.18% 3.78% -6.79%

43
Saurastra 56.60 61.55 57.60 36.55 33.15 25.10 27.40 31.25
Cement -44.79% -49.23% -45.75% -14.50% -5.73% 24.50% 14.05%
Shree Cements 1452.05 1448.00 1275.15 1077.80 750.75 522.70 529.70 511.85
-64.75% -64.65% -59.86% -52.51% -31.82% -2.08% -3.37%
Shree Dig Vijay 24.55 31.85 37.95 21.05 18.70 13.10 14.70 13.95
-43.18% -56.20% -63.24% -33.73% -25.40% 6.49% -5.10%
Ultra Tech 957.00 1044.20 878.90 772.15 632.10 534.20 551.35 539.85
Cement -43.59% -48.30% -38.58% -30.08% -14.59% 1.06% -2.09%

J.K. CEMENT V/s ACC Ltd.

PARTICULARS J.K. CEMENT ACC Ltd.

Total Share Capital 69.93 187.83
Net Worth 1053.34 4152.71
Total Debt 510.53 306.41
Net Block 1089.13 3314.72
Investments 9.50 844.81
Net Current Assets 329.43 -349.60
Total Assets 1563.86 4459.12

J.K. CEMENT ACC Ltd.

BSE: Jul 18,15:57 BSE: Jul 18,16:00
127.25 3.45 (2.79%) 538.70 -0.10(-0.02%)
Vol- 4,362 Vol- 124,908

P/E Ratio: 3.36% P/E Ratio: 7.06

Face Value: 10 Face Value: 10

Dividend: 50 Dividend: 200

EPS (TTM): 37.92 EPS (TTM): 76.33

44
Net Sales: 1458.25 Net Sales: 6894.79

Net Profit: 265.17 Net Profit: 1438.59

J.K. CEMENT V/s AMBUJA CEMENT

PARTICULARS J.K. CEMENT AMBUJA CEMENT

Total Share Capital 69.93 304.48
Net Worth 1053.34 4661.25
Total Debt 510.53 330.42
Net Block 1089.13 2959.86
Investments 9.50 1288.94
Net Current Assets 329.43 39.86
Total Assets 1563.86 4991.67

J.K. CEMENT AMBUJA CEMENT

BSE: Jul 18,15:57 BSE: Jul 18,15:57
127.25 3.45 (2.79%) 82.80 1.10 (1.35%)
Vol- 4,362 Vol- 355,769

P/E Ratio: 3.36 P/E Ratio: 7.39

Face Value: 10 Face Value: 2

Dividend: 50 Dividend: 175

EPS (TTM): 37.92 EPS (TTM): 11.21

Net Sales: 1458.25 Net Sales: 5671.39

Net Profit: 265.17 Net Profit: 1769.10

45
J.K. CEMENT V/s BINANI CEMENT

PARTICULARS J.K. CEMENT BINANI CEMENT

Total Share Capital 69.93 203.10
Net Worth 1053.34 417.64
Total Debt 510.53 770.47
Net Block 1089.13 1048.28
Investments 9.50 46.77
Net Current Assets 329.43 -78.43
Total Assets 1563.86 118.09

J.K. CEMENT BINANI CEMENT

BSE: Jul 18,15:57 BSE: Jul 18,15:53
127.25 3.45 (2.79%) 49.80 .65 (1.32%)
Vol- 4,362 Vol- 7,618

P/E Ratio: 3.36 P/E Ratio: 4.67

Face Value: 10 Face Value: 10

Dividend: 50 Dividend: 25

EPS (TTM): 37.92 EPS (TTM): 10.67

Net Sales: 1458.25 Net Sales: 963.04

Net Profit: 265.17 Net Profit: 175.82

46
J.K. CEMENT V/s BIRLA CORPORATION

PARTICULARS J.K. CEMENT BIRLA CORPORATION

Total Share Capital 69.93 77.01
Net Worth 1053.34 1004.98
Total Debt 510.53 227.50
Net Block 1089.13 500.80
Investments 9.50 634.00
Net Current Assets 329.43 -51.44
Total Assets 1563.86 1232.47

J.K. CEMENT BIRLA CORPORATION

BSE: Jul 18,15:57 BSE: Jul 18,16.01
127.25 3.45 (2.79%) 162.30 3.10 (1.95%)
Vol- 4,362 Vol- 7,433

P/E Ratio: 3.36 P/E Ratio: 3.18

Face Value: 10 Face Value: 10

Dividend: 50 Dividend: 40

EPS (TTM): 37.92 EPS (TTM): 51.11

Net Sales: 1458.25 Net Sales: 1724.91

Net Profit: 265.17 Net Profit: 393.57

SWOT ANALYSIS
47
SWOT means Strength, Weakness, Opportunity and Threats.

Strengths:

1) J.K. possess good brand image in the existing markets which is definitely a part of
payment brick for it.

2) Location has always been an important factor in Rajasthan extensive (above

2500mt.) of cement grade limestone available.

3) Wider experience and old set capacities.

4) 10000 tons per day production capacity.

Weakness:

1) Low sales as compared to market potential.

2) High complaints of quality deterioration.

3) Less advertisement and negligible sales promotion schemes as compared to other

brands.

4) Monopoly of dealers.

5) Lack of self-enthusiasm in working pattern.

48
Opportunities:

1) Explosive of quality yet to be displayed.

2) Aggressive advertisement is required.

3) Competitive price.

4) More advertisement.

5) Margin structure for retailer and dealer.

Threats:

1) Competitors are publicizing rapidly may be another threat to the company.

2) Price fluctuation and price war is general phenomena in the cement industry.

3) Frequent availability of supply of cement.

SUGGESTIONS

49
1) It is suggested that the sales of the company (Rs. 1458.25 crores) are rising to a
positive extent for the benefits of the company as compared to the past year
(Rs.1343.64 crores). Yet can must be taken to counter the attack on the market.
Capture by the rival firm progressing very hard to embark the successive sales.

2) There is a need for implantation of the latest means technology, which J.K.
Cement adhered to best advantage for the company.

3) Further more, it is highly recommended that there should be aggressive training

and development courses be imparted to the personnel and new recruited
professionals for the proper and timely industries to the policies and procedures
and with corporate environment of the company.

4) There should be market survey done native wide to know that exactly a customer
perceive about the strength of cement and care must be taken to maintain the
product quality and brand value among other competitors.

5) Proper communication between dealer and retailer should be maintained for the
better prospective growth.

6) Also, stockiest should be convinced to bass the incentives to the retailer to

motivate the regarding this brand.

7) Need to undergo intensive of research and development with constant

enhancement quality of cement.

CONCLUSIONS
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At the completion of the Project Report, what I like to conclude is that I come to know
and understand the conceptual knowledge and practical experience of finance and its
measure such as measured of Profit and Loss a/c Statement, Balance Sheet, and Financial
Ratio as well as the studies of comparisons with corporate in the field of cement such as
Ambuja Cement, Binani Cement, ACC Ltd., Birla Corporation and soon gave me an
insight about the perspective and importance of finance and its relative trends. For all this
I may deeply thankful to the prestigious company and honorable management.
Authorities of J.K. Cement who let me allow to experience such a fine corporate
environment, which I will utilize in my future career prospects.

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BIBLIOGRAPHY

Following sources were undertaken in completing project report:

Websites Visited

1. www.jkcement.com

2. www.jkwhite.com

3. www.jkcement works.com

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