INTRODUCTION

In our present day economy, FINANCE is defined as the provision of money at the time when it is required. Every enterprise, whether big, medium of small, needs finance to carry on its operations and to achieve its targets. Finance is so indispensable today that it is the lifeblood of an enterprise. Without adequate finance, no enterprise can possibly accomplish its objectives. Finance is the life blood and nerve system of any business organization. Just as circulation of blood, is necessary in the human body to maintain life. Finance is necessary in the business org. for smooth running of the business. Financial management involves managerial activities concerned with the procurement and utilization of funds for business purpose the finance function does with procurement of money taking in to consideration of todays as well as future need and its effective utilization. Since finance is required to purchase of machinery and raw materials, to pay salaries and wages also for day-to-day expenses. Financial management entails planning for the future of a person or a business enterprise to ensure a positive cash flow. It includes the administration and maintenance of financial assets. Besides, financial management covers the process of identifying and managing risks. A tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry, or even the economy to judge the performance of the company. Ratio analysis is predominately used by proponents of fundamental analysis. Ratio analysis involves the process of calculation the ratio between the related items of financial statements, their comparison and interpretation.

NEED OF THE STUDY: Fixed Assets management is the management of assets, which cannot be liquidates into cash within one year. The large amount of the company is invested in these assets. Every year the company investment an additional fund in these assets directly or indirectly the survival and other objectives of the company purely depends on operating performance of management in effective utilization of their assets. To evaluate the performance of fixed assets with proportion of capital employee on net assets turnover in Kesoram cement.

OBJECTIVES OF THE STUDY: The study is to evaluate Fixed assets performance of KESORAM CEMENT. The study is to evaluate the fixed assets turnover of KESORAM CEMENT INDUSTRIES. The study is to known the amount of finance made by long-term liabilities and owner funds towards fixed assets. To know the value of fixed assets from time to time. The study is conducted to know the fixed assets position of the company.

SCOPE OF THE STUDY: The project is covered of fixed assets of KESORAM CEMENT drawn from annual report of the company. The fixed assets considered in the cannot be converted in to cash within one year. Ratio analysis is used for evaluating fixed assets performance of "KESORAM CEMENT INDUSTRIES". The subject matter is limited to fixed assets it analysis.

RESEARCH METHODOLOGY: Data for the study obtained by browsing through net and from different books relating to financial services, fund and also from the brochures of Company. Primary data Secondary data Primary Data: includes data ascertained from employees and interaction with different people at work place. Secondary Data: basically comprise Companys Manuals, Records, Brochure, Books, standard and Internet etc The data used for analysis and interpretation fore annual reports of the companythat is secondary forms of data. Ratio analysis is used for calculation on purpose.The project is presented by using tables, graphs and with their interpretations. Nosurvey is undertaken or observation study is conducted in evaluating "fixed assets"performance of "KESORAM CEMENT INDUSTRIES".

LIMITATIONS: The duration of the study is limited i.e., 45 days. The study is limited up to the date and information provided by kesoram cement and is annual reports. The accounting procedure and other accounting principles are limited by the company changes fixed assets performance. Data analysis is only five years 2006-2011.

INDUSTRY PROFILE
INTRODUCTION OF CEMENT: The 85 year of old Indian cement industry is one of the cardinal and basicinfrastructure industries, which enjoys core sector status and play a crucial role in theeconomic development and growth of a country. Being a core sector is industry wassubject to price and or distribution controls almost uninterruptedly from world war -II to1982. When the government of India announced the partial decontrol manufacturing cement became increasingly attractive industry and the industry experienced substantial expansion. As the supply in response to the 1982 partial decontrol was significant in march,1989. Price and distribution control were finally dispensed with. It was one of the firstmajor industries in the country to be so deregulated. DEFINITION OF CEMENT: Cement may be defined as it is a mixture of calcium silicate and aluminates whichhave the property of setting and hardening under water. The amount of silica, alumna whois present in each crust is sufficient to combine with calcium oxide [cao] to from thecorresponding calcium silicate and aluminates. CLASSIFICATION OF CEMENT: Cement is 3 types i. ii. iii. Puzzolantic cement ii. Natural cemen tiii. Portland cement

1. Puzzolantic cement: It consists of silicates calcium and aluminum. It shows the hydraulic, propertieswhen it is in the form of powder and being mixed with suitable proportion of lime. Therate of hardening is much slower and the comprehensive strength developed is about a half of Portland cement. It us found more resistant to the chemical action that others. 2. Natural cement: This is natural occurring material. It is obtained form cement rocks. The cementrocks are claying lime stones containing silicates aluminates of calcium. The sellingproperty of this cement is more than the Portland cement but is comprehensive strength ishalf of its. 3. Portland cement: a) Ordinary Portland cement b) Rapid hardening Portland cement c) low heat cement d) White or colored cement e) Water proof Portland cement f) Portland slag cement g) Portland puzzo h) Sulphate resisting cement i) Oil well cement After the deli censing of the industry in July, 1991 it reacted positively to the policychanges. New capacities created and the volume of the production increased. From asituation of importing cement, the country started exporting due to high quality and costeffectiveness. After liberalization the black market in cement also disappeared. Currently INDIA stands second largest in the cement production world wide after china after India, japans and USA stands. On the other hand India's per capitalconsumption is only 100kgs. As compared to the world average of 260kgs. The industryhas 59 companies owing 115 plants.In the mailer of exports, the government considers cement as extreme focuses are&However Indian cement in the global market is not very competitive due to high power and full costs. In order to improve its position in the international market. Technologicalup gradation is essential in terms INDIAN CEMENT 1NDUSTERY - PRESENT STATUS:

of process up process up gradation productdiversification costs reduction quality control and energy savings

CEMENT INDUSTRY PROFILE Cement is the basic construction material used extensively all over the World. Theper capita consumption of cement universal acknowledged one of the measure of thecountry. The per capita consumption of cement in India is estimated at approximately 57ke and India is the third lowest consumer in the world. Thus there is a excellent potentialgrowth of cement industry in India. Cement was first patented in 1824 in England. In India, first cement plant wasestablished by Indian cement industrial growth was continuously sufficiency and import of cement was stopped. In august, 1965 the Government accepted the principle to decontrolthe prices and distribution of Cement. A scheme of decontrol drawn and brought in toeffect from January, a cement allocation and coordination organization (CACO) wasFormed. As the decontrol scheme did not prove to the satisfaction of the government,CACO was abolished and its functions over by the cement, controller attached by thegovernment corporation of India limited. Prices of cement are revised by the governmentfrom time to time based on studies and reports of bureau 'of industrial cost and prices.

MISSION:
While maintaining its leading position in quality of cement maximize profitability through reduced cost of production and enhanced market share.

VISION OF KESORAM CEMENTS LIMITED:

To be a role model cement manufacturing company benefiting all stake holders and fulfilling corporate social responsibility while enjoying public respect and goodwill.

ABOUT THE KESORAM Kesoram cement industry is one of the leading manufactures cement in India,incorporated by the promoters of Birla group company is a dry process cement plant. Theplant capacity is 8.26 lakh tone per annum, it is located at Basanthnanagar in karimnagar dist. Of Andhra Pradesh which is 8km away from the Ramagundam Railway station,linking madras to New Delhi. The company's first; unit at Basantnagar with a capacity of 2.1 lakh tones per annum. Humbolds suspension preheater system was commissioned during the year 1969.The second unit was set up in the year 1971 with a capacity 2.1 lakh tones per annum andthe third unit with a capacity of 2.5 lakh tones per annum went on stream in the year 1978.the coal for this company is being supplied by singareni colonies and the power isobtained form apsed. The power demand for the factory is about installed' in the year 1987. Kesorarn cement has set up a 15 MW captive power plant to facilitate for uninterrupted power supply for manufacturing of cement, which starts on august 1997.Kesoram cement industry distinguished itself among all the cement Factories inIndia by bagging the national productivity a ward consecutively for years i,e., for the year 1985-86 and 1986-87. The federation of Andhra Pradesh chambers of commerce andindustries FAPCCIO also conferred on Kesoram cement. An award for best industrialpromotion /expansion efforts in the state for the year 1984. Kesoram also bagged FAPCCI award for "best family planning efforts in the state" for the year 1987-88 One among the industrial giants in the country to day, serving the nation Onindustrial front, Kesoram industries ltd. has a chequred and eventful history dating back tothe twenties when the industrial house of Birla acquired it. With only a textile mill under is banner in 1924, it grew from Strength and spread and its activities to

10

newer fields likerayon, spun pipes, transparent paper, pulp, tyres, ref rectories and other products. Cement which plays an important role in nation building activity, the Governmentof India had de-kucensed (he cement industry in the year 1966 with a view to attractprivate entrepreneurs to augment the cement production. Then Kesoram decided to set upa few cement plants in the country. Birla supreme is popular brand of Kesoram cement from its prestigious plant of Basantnagar, in A,P which has outstanding track record in performance and productivity,serving the nation for the last two and half decades. It has proved it s distinction bybagging several national awards and state awards it also has the distinction of achievingoptimum capacity utilization. Kesoram offers a choice of top quality Portland cement for light, heavyconstructions and allied application. Quality is built to every fact of the operations. As isthe preference for uality, so is the demand for the product. The limestone is rich in calcium carbonate, a key factor that influences the qualityof the final product . The dry process technology used in the late computerized monitoringoversees the manufacturing process. Samples are sent regularly tot the brreau of Indianstandars, national council construction and building material for certification of derivedquality norms The company has actively undertaken promotional measures for promotingtheir product though different media, which includes the off hoardings compliments,newspapers, etc. Kesoram cement is undertaking the marketing activities extensively in the states of Andhra Pradesh, Karnataka, Tamilnadu, Kerala, Maharashtra and Gujarath. In A.P. salesdeposts are located in different areas like Karimnagar, Warangal, Nizamabad,Vijayavvada and Nellore. In other states it has opened around 10 depots. The market share of Kesoram cement in the all India cement is 1.19%. In A.P. it isa 7.05%.

11

The Kesoram cement industry came up with captive thermal power plant of 15.7 MW capacities for uninterrupted power supply. Which would ensure consistency in the supply of cement even during power cut periods? Birla supreme is popular brand Kesoram cement from its prestigious plant of Basantnagar in AP., which has out standing track record in performances and productivity, serving the national for the last three decades. It has proved its distinction by bagging several national and state awards. It also has the distinction of achieving optimum capacity utilization. Kesoram Cement undertaking marketing activities extensively In the state of AP,Karnataka, Kerala, Maharastra & Gujarat. In AP Sales depots are located in different areas like a Karimnagar, Warangal Nizamabad, Vijaywada and Nellore. In other states it has opened 10 depots. The market share of Kesoram cement in AP is 11.56%. The market share of the company in various states is shown as under.

States Karnataka Tamil Nadu Kerala Maharastra

Market Share 4.94% 0.94% 0.29% 2.81%

The share of Kesoram Cement in the all India cement market is 1.19%

12

PRODUCTION OF KESORAM CEMENT:

Year 1985-86 1995-96 2005-06

Tonnes 4,45,441 8,05,921(more capacity) 7,82,385(Due to power cut)

An average sale of the company is between 2000 to 2200 metric tones per day. The company takes order through its branch builders, dealers and from any organization if ordered for bulk quantity. Sales Promotion: The company has got a health sales promotion it has taken much concentration in advertising of the product through various mean like 1. News paper 2. Television 3. Wall Painting 4. Bus Panels 5. Shop Paintings Kesoram offers a choice of top quality Portland cement of light, heavy construction and allied application quality is built in every fact of the operations.

13

The plant layout is rational begin with the limestone is rich in calcium carbonate, a key factor that influenced the quality of the final product. The dry process technology used in the latest computerized monitoring. Type of Sales: 1.Depot Sales 2.Site Sales 1. Depot Sales: The required amount of cement is supplied to the dealers from the the depot. The Branches of company make these sales. 2. Site Sales: The company directly sell the required quantity of cement to required group or organization dealers etc. Distribution Channel : Kesoram Cement follows intensive type of Distribution channel 1. Intensive Distribution: In an Intensive distribution strategy the manufacture makes the goods or services in as many outlets as possible. 2. Dealers Selections: The company select the dealers after taking into consideration the financial position the are, the dealers opinion regarding the product. The company takes more attention for selecting dealers in the urban region. The incentive facilities given to the dealers by the company are quantity (trade discount) has count and sliding scale discount (A Annual Discount)

14

ORGANIZATION STRUCTURE OF KESORAM INDUSTRY LIMIDED: Chairman: Syt.B.K.Birla Direction: Shri.krishna gopal maheshwari Shri.bhagawathi Prasad bajoria Shri.pesi kushru choksey Shri.neetha mukerji (nominee of ICICI bank ltd.,) Shri.dharmananda mishra (nominee of LIC) Shri.amitabh gosh Shri.prasanta Kumar mallik Smt.manjushree khaitan Smt.shiva kumar parik ( also company secretary) SECRETARY SENIOR EXECUTIVES Shri.k.c (manging director of the company) Shri.J.D.paid Shri.s.k.parik

15

AUDITORS M/S Price Waterhouse

SUBSIDIARY COMPANIES OF KESORAM INDUSTRIES LTD: Barat general & textile industries ltd. KICM investment ltd. Assam cotton mill ltd Softshree estates ltd.

KESORAM CEMENT ADVANTAGES: 1) Helps in designing seeker and more elegant structures, giving greater flexibility in design concept. 2) Due to its fine quality, super fine construction can be achieved 3) It gives maximum strength at minimum use of cement with water in the water. cement ration especially the 53 grade 4) Better water proofing is achieved due to low heat of hydration, as the shrinkage will be less, which means fewer cracks. 5) Better finish is achieved due to fitness and hence better workability. Thus plastering becomes easier with better finish. WELFARE AND RECREATION FACILITIES AT A GLANCE: 1) Recreation Club : For the Purpose of recreation facilities tow auditors are provided for the employees to indoor games like shuttle, chess, caroms and for organising culture functions and activities like drama, music and dance concert etc. 2) Libraries and Reading Rooms : The company has provided libraries and

16

reading rooms for the benefit of the employee. About 5000 books are available in read the libraries. All kinds of newspaper and magazines are made available in reading rooms for the daily reading rooms for the employees and their families. 3) Canteen : Is provided to cater to the needs of the employees for the supply of snacks, tea, coffee and meals. 4) Schools : One English Medium school and Telugu Medium school are provided to meet the educational requirements of the employees children. 5) Dispensary: The Company has provided a dispensary with a qualified medical officer and Para medical staff for the benefit or the employee. The employees conversed under ESI scheme has to avail the medical facilities from the ESI Hospital. 6) House Jounal : A House Jounral in the name of Basantnagar Samachar is brought out quarterly where in all the important activities of the plant are published. 7) Kesoram Consumer Co-Operative Store : Consumer Co-Operative stores are available to meet the needs of the employees for supply of essential commodities like rice, wheat, sugar, kerosene on cash credit basis. 8) Sport and Games : Competitors in sport and games are conducted every year for 15th August & 26th January. AIMS: Continuous efforts to improving productivity. Evaluating individual skill through training and motivations Total involvement through participants management activities Creating healthy and safe environment. Social development.

17

DEPARTMENTS: Finance Depertment Markating Depertment Research and Development Depertment Personal Depertment Production Depertment LIST OF AWARDS BAGGED BY KESORAM CEMENT: Kesoram cement distinguished itself among all the cement factories in India bagging a No of awards. S. No 1 2 3 4 5 6 7 8 9 10 11 12 13 15 16 Year 1984 1985 1986 1987 1987-88 1988 1988-89 1989-90 1990-91 1991 1991 1991-92 1993-94 1995 1996 Details FAPCCI A wards for best family planning efforts in states. FAPCCI A ward for best Industrial promotion Efforts in the states. Best family planning in the state. National productivity A ward. National a ward for Mines safety National productivity A ward. National award for Mines safety Best family planning efforts in states AP State for the Best Industrial Relation. AP State Yajamanya Ratna And Best management A ward Best family planning Efforts in the State by FAPCCI NCBMS National A ward for Energy performance. Indira Gandhi Memorial national award Excellence in Industry. Best Management award by AP Govt. Mines safety award in A.P.

18

17 18 19 20 21 22 23

1997 1997-98 1998 1999 2000-01 2001 2001-02

24 25

2003 2002-03

26 27 28 29

2003 July 2003 2004 2004-05

A ward for Mines Safety in AP. Best Workers Welfare by FAPCCI Company got ISO-9002 certification from bureau of Indian standard. The pay role saving group award among private sector. First prize in the level by International saving Organization, Govt of India. The best efforts in rural development by an industry in the state by the federation of A.P. of commerce &industry(FAPCCI) Mines environment &pollution control-First prize A ward for efforts in environmental protection in the region by the Godavari pradushana pariharana. Pariyvana parieractiona Gavjshamu (GAPPG).(A voluntary organization for pollution control & environmental protraction First prize for HORTICULTURE SHOW(for corombola fruit) held at public gardens, Hyderabad being Organ-feed by Director of Horticulture Award for the best environment protection efforts put in by kesoram cement being organized by Godavari pradushana patiharana. Pariyvana parieracrtion Gavkshamu (GAPPG) At Ravindra Bharthi, Hyderadad on the occasion of earth day (on 22-4-2001) The award was presented Honble Minister of state for urban development Sri Bandaru Dattatreya Company has got ISO-4001 certification pertaining to environment from burau of Indian standards. Vana Mithra a ward from the direct collector Company has got OHSAS-18001 certification from DNV New Delhi MINNESS SAFITY WEEK;(24-11-2002) 1) Over all performance Second prize 2) Operation and maintenance of machines of prize 3) Protection wquipment vocational and supervision standard first prize 4) Environment and pollution control 1st prize. 5) House keeping 2nd prize. MINES ENCIRONMENT AND MINERAL CONSERVATION WEEK 1)Dump yard management 1st prize 2 A forestation 2nd prize 3 Noise vibration 2nd prize Air quality and dust suppression Excellence in Corporate Social Responsibility by the FAPCCI HYD. Ecellence in Rural Development by the FAPCCI. Excellence rural workers welfare Silver Rolling Trophy from CM.

30

2006

31 32

2008-09 2009

19

KESORAM CEMENT
Chairman: Syt.B.K.Birla Direction: Shri.krishna gopal maheshwari Shri.bhagawathi Prasad bajoria Shri.pesi kushru choksey Shri.amitabh gosh Shri.prasanta Kumar mallik Smt.manjushree khaitan KESORAM GROUP OF INDUSTRIES a) Textile Kesoram Industries Ltd., 42, Garden Reach Road, Calcutta-700024. b)Rayon c)spun pipes Kesoram Rayon Triennia (PO), Dist. Hoogly, West Bengal Kesoram spun pipes & Foundries, Bansberia (PO) Dist. Hoogly, West Bengal. d)cement Kesoram cement, basanth nagar-505187, dist. Karimnagar andra pradesh. e)cement vasavadatta cement, sedam-585222, dist.gulargah- karnataka. f)tyres burka tyres, shiva chambers, 53, syed amir ali aenue, calcutta-700019

20

SWOT ANALYSIS OF THE CEMENT INDUSTRY STRENGTH: Cement industry is the core industry in India and it has been given prime importance by the government. India stands second in world population and their exists a high untapped market. The cement industry yield high return on investment (ROI) The present level of supply and growing demand of cement clearly indicate that the prices are tend to price. WEAKNESS: The per capital consumption of the cement in India is every now. The transport cost in India is very high. The cement industry is facing with acute power shortage and raw material problems. The industry is also facing major packaging problems. OPPORTUNITIES: The industry has tremendous potential for growth in India. In near future cement is going to replace in large scale for the construction of road. There are good prospects for exports with cement export promotion council (CEPC). THREATS: The surplus level are increasing as the production of the cement is much greater than the consumption. In the present scenario of stiff completion is a demanding trend of price. The performance of the smaller unit is badly hit by the major takeover. 21

 The crisis situation in south east asian countries may create problems to the exports of the industry.

FINANCIAL MANAGEMENT
Financial management is that managerial activity which is concerned with the planning and controlling of the firms financial resources. It is an integrated decision making process concerned with acquiring, financing and managing assets to accomplish. The overall goal of a business organization. It can also be started as the process of planning decisions in order to maximize the shareholders wealth. Financial manager have a major role in cash management, acquisition of funds and in all aspects of raising and allocating capital. As far as business organizations are concerned, the objective of Financial Management is to maximize the value of business. However there are three main approaches to finance. 1. The first approach views finance as to providing of funds needed by a business on most suitable terms this approach confines finances to the raising of funds and to the study of financial institutions and instrument from where funds can be produced. 2. The second approach related Finance to cash. 3. The third approach views finance is being concerned with rising of funds and their effective utilization. Definitions of Financial Management: Financial Management is the operation activity of a business that is responsible of obtaining and effectively utilizing the funds necessary for efficient operations. -Joseph & Massie Business Finance deals primarily with raising administering and disbursing funds by privately owned business unit operating in non-financial fields of industry, -Prather & Wert

22

OBJECTIVES OF FINANCIAL MANAGEMENT:The Main Objectives of Financial Management 1. Profit Maximization 2. Wealth Maximization 1. Profit Maximization : Financial Management evaluates how funds are used and procured. Financial policy is to maximization earnings in the long-run and optimize them in the short-run. Financial Management is concerned with the efficient use of an improved resource, mainly capital funds. Profits Maximization should serve as the basic criterion for decision arrived at by Financial Managers of privately-owned and controlled firm. Different alternative are available to a business enterprise in the process of decisions making. Each alternative has certain implication. 2. Wealth Maximization : The goals of Financial Management may be such that they should be beneficial to owners, management, employees and customers. These goals may be achieved only by maximization the value of the firm. The elements involved in the maximization of the value of a firm are: Elements of Wealth Maximization

Inrease in Profits

Reduction in cost

Judicious choice of funds

Minimised Risk

Long-run value

Increase of Profits: A firm should increase its revenues in order to maximize its value. It is a normal practice for a firm to formulate and implement all possible plants

23

of expansion and take every opportunity to maximize its profits. In theory, profits are maximized when a firm is in equilibrium. Reduction of Cost: Capital and equity funds are factor input in production. A firm has to make every efforts to reduce cost of capital and launch economy drive in all operations. Source of Funds: A firm has to make a judicious choice of funds so that they maximize its value. The source of funds are not risk-free. A firm will have to assess risk involved in each source of funds. Maximum Risk : While keeping the goal of maximization of the firm, the management will have to consider the interest of pure or equity stockholders as the central focus of financial policies. Long-run Value : The goal of Financial Management should be to maximize longrun value of the firm. It may be worthwhile for a firm to maximize profits by pricing its products high, or by pushing an inferior quality into the market, or ignoring interest of employees. FINANCIAL DECISIONS: Investment Decision Financing Decision Dividend Decision Investment Decision: Investment Decision is concerned with allocation of funds to both capital and current assets. Capital assets are financed through long term funds and current assets are financed through short-term funds. Financing Decision: Financing Decision in concerned with identification of various sources of funds. Funds are available through primary market, financial institution and through the commercial banks.

24

Dividend Decision: Regular and assured percentage of dividend and capital gains are the basic desires of equity shareholders. The overall objective of the corporate is to fulfill the desires of the shareholders and attain wealth maximization in the long run.

ASSETS: Assets may be described as valuable resources owned by a business which were acquired at a measurable money cost. As an economic, they satisfy three requirements. In the first place, the resource must be valuable. A resource is valuable if (1) it is cash/ convertible into cash; or (2) it can provide future benefits to the operations of the firm. Secondly, the resource must be owned. Mere possession or control of a resource would not constitute an asset; it must be owned in the sense of term. Finally, the resource must be acquired at a measurable money cost. In the where an asset is not acquired for cash/promise to pay cash, the test is what it would have cost had cash been paid for it. The accounting equation relates assets, liabilities, and owners equity: Assets=Liability+ Owners Equation is the mathematical structure of the balance sheet. The standard classification of assets divides the into Assets

Tangible Assets

Intangible assets

25

Fixed Assets

Current Assets

Tangible Fixed Assets: Are those, which have physical existence and generate goods and services. Included in this category is land, building, plant, machinery, furniture, and so on. They are shown in the balance sheet, in accordance with the cost concept, at their cost to the firm at the time they were purchased. Their cost is allocated to/charged against/spread over their useful life. The yearly charge is referred to as depreciation. As a result, the amount of such asses shown in the balance sheet every year declines to the extent of amount of depreciation charged in that year and by the end of the useful life of the asset it equals the salvage value, if any. Salvage value signifies the amount realized by the sale of the discarded asset at the end of its useful life. Intangible Assets: Do not generate goods and services directly. In a way, they reflect the rights of the firm. This category of assets comprises patents, copyrights, trademarks and goodwill. They confer certain exclusive rights to their owners. Patents conger exclusive rights to use an invention, copyrights relates to production and sale of literary, musical and article works, trademarks represent exclusive right to use certain name, symbols, labels, designs and so on intangible fixed assets are also written off over period of time. Fixed Assets: Fixed assets are those, which are required and held permanently for a pretty longtime in the business and are used for the purpose of earning profits. The successful continuance of the business depends upon the maintenance of such assets. They are notmeant for resale in the ordinary course or business and the utility of these remains so long as they are in working order, so they are also known as capital assets. For Example Land and building, plant and machinery, motor vans, furniture. Financial transactions are recorded in the books keeping in view the going concernaspect of the business unit. It is assumed the business unit has a reasonable expectation of continuing business at a profit for an indefinite period of time. It will continue to operatein the future. This assumption provides much of the justification

26

for recording fixed assetsat original cost and depreciating them in a systematic manner without reference to their current realizable values. It is useless to show fixed assets in the balance sheet at their estimated realizable values if there is no immediate (I.e., cost less depreciation provided)and not at their current realizable values. The market value of a fixed asset may changemay with the passage of time, but for accounting purpose it continues to be shown in thebooks at its book value, I.e., the cost at which it was purchased minus depreciation provedup to date. The Cost concept of accounting, deprecation calculated on the basis of historicalcosts of old assets is usually lower than of those calculated at current value. These resultsin more in more profits on paper which, if distributed in full lead to reduction of capital. Definition: Long lined property owned by a firm that is used by a firm in the production of its income tangible fixed assets include real estate, plant and machinery equipment. Management of Fixed Assets: The selection of various fixed assets required creating the desired production facilities and the decision regards determination of the level of fixed assets is primarily the task that at the production technical people. The decision relating to fixed assets involve huge funds for a long period of time and are generally irreversible nature affecting the long term profitability of a concern, an unsound invest decision may prove to be total to the very existence of the organization. Thus, management of fixed asset is of vital importanceto any organization.The process of fixed asset management involves:- . (I) (II) Selection of most worthy projects or alternatives of fixed assets. Arranging the requisite funds /capital for the same.

The first important consideration to be acquire only that much amount of fixed assets which will be just sufficient to ensure smooth and efficient running of the business. In some cases it may be economical to buy certain assets in a lot size. Another important 27

consideration to be kept in mind is possible increase in demand of the firm's product necessarily expansion of its activities. Hence a firm should have that much amount of fixed assets which could adjust to increase demand. The third aspect of fixed assets management is that a firm must ensure buffer stocks of certain essential equipments/services to ensure uninterrupted production in this events of emergencies. Sometime, there may be a breakdown in some equipment or services affecting the entire production. It is always better to have some alternative arrangements to deal with such situations. But at the same time the cost of carrying suchbuffer stock should also be evaluated. Efforts should also be made to minimize the level of buffer stock of fixed assets be encouraging their maximum utilization during learn period, transferring a part of peak period and living additional capacity. Need for Fixed Assets Management:Fixed assets plays very Important role in relating company's objectives the firms towhich capital investments vested on fixed assets. This fixed asset are not convertible or not liquid able over a period of time the owner funds and long term liabilities are investedin fixed assets. Since fixed assets playing dominant role in total business the firms has realized the effective utilization of fixed assets. So ration contributes very much in analyzing and utilized properly it effects long term sustainability of the firms which may affect liquidity and solvency and profitability positions of the company. The idle of fixedassets lead a tremendous in financial cost and intangible cost associate to it. So there isneed for the companies to evaluate fixed assets performance analysis time to time bycomparing with pervious performance. Comparison with similar company and comparisonwith industry standards. So chose a study to conduct on the fixed assets analysis of KESORAM CEMENT using ratio in comparison with previous year performance. Thetitle of the project is analysis on fixed Assets Management. Fixed Assets Features: Calculate deprciation for a combination of books including book, federal tax, alternative minimum tax, and other(such as state or local)

28

 Eliminate manual journal entries; the TRAVERSE General Ledger interface records accumulated Depreciation expense entries automatically when you post Change the system to conform to your tax Assesment and reporting needs with user defy noble tax districts. Group related assets for reorting purposes or Link additions and adjustments to original assets by using multiple-part assets Ids. Modify the system to conform to the way your business is organized with user-definable location filed. Track actual and scheduled service maintainance dates with a description pf work performed for Each asset. Explanation Fixed assets often comprise a significant portion of the total assets of an enterprise, and therefore are important in the presentation of financial position. Furthermore, the determination of whether expenditure represents an assets or an expense can have a material effect on an enterprises reported results of operations. Identification of Fixed Assets Fixed assets is an asset held with the intention of being used for the purpose of producing or providing goods or services and is not held for sale in the normal course of business. The criteria to specific circumstances or specific types of enterprises. It may be appropriate to aggregate individually insignificant items, and to apply the Criteria to the aggregate value. An enterprise may decide to expense an item which could otherwise have been included as fixed asset, because the amount of the expenditure is not material. Standby equipment and servicing equipment are normally capitalized. Machinery spares are usually charged to the profit and loss statement as and when consumed. However, if such spares can be used only in connection with an item of fixed asset and their use expected to be irregular, it may be Appropriate to allocate the total cost on a

29

systematic basis over a period not in certain circumstances, the accounting for an item of fixed asset may be improved if the total expenditure thereon is allocated to its component part , provided they are in practice separable, and estimates are made of the useful lives of these components. For example, rather than treat an aircraft and its engines as one unit, it may be better to treat the engines as a separate unit if it is likely that their useful life is shorter than of the aircraft as a whole. Self-constructed fixed asset: In arriving at the gross book value of self-constructed fixed assets, the same principles apply as those described. Included in the gross book value are a cost of construction that relate directly to the specific asset and costs those are attributable to the construction activity in general and can be allocated to the specific asset. Any internal profits are eliminated in arriving at such costs. Non-monetary consideration: When a fixed asset is acquired in exchange for another asset, its cost is usually determined by reference to the fair market value of the consideration given. It may be appropriate to consider also the fair market value of the asset acquired if this is more clearly evident. An alternative accounting treatment 1 it may be noted that this paragraph relates to all expenses incurred during the period. Since Accounting Standard (AS) 16, Borrowing costs, specifically deals with the treatment of borrowing costs, the treatment provided by AS16 would prevail over the provision in this respect contained in this paragraph as these provisions are general in nature and apply to all expenses. Accounting for Fixed Assets: That is sometimes used for an exchange of assets, particularly when the assets exchanged are similar, is to record the asset acquired at the net book value of the up; in each case an adjustment is made for any balancing receipt or payment of cash or other consideration. Main Principles of Fixed Asset:

30

 The item determined in accordance with the definition in paragraph 6.1 of this Standard should be included under fixed assets in financial statements. The gross book value of a fixed asset should be either historical cost or a revaluation computed in accordance with this Standard. The method of accounting for fixed assets included at historical cost is set out in paragraphs 20 to 26; the method of accounting of revalued assets. The cost of a fixed asset should comprise its purchase price and any attributable cost of bringing the asset to its working condition for its intended use. The cost of a self-constructed fixed asset should comprise those costs that relate directly to the specific asset and those that are attributable to the construction activity in general and can be allocated to the specific asset. Accounting for fixed assets 105. The revaluation in financial statement of a class of a assets should not result in the net book value of that class being greater than the recoverable amount of assets of that class. Subsequent expenditure relate to an item of fixed asset should be added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard performance. Material items retired from active use and held for disposal should be stated at the lower of their net book value and net realizable value and shown separately in the financial statement. Fixed asset should be eliminated from the financial statements on disposal or when no further benefit is expected from its use and disposal. Losses arising from the retirement or gains or losses arising from disposal of fixed asset which is carried at cost should be recognized in the profit and loss statement.

31

 When a fixed asset is revalued in financial statement, an entire class of asset should be revalued, or the selection of assets for revaluation should be made on a systematic basis. This basis should be disclosed.

Improvement and Repairs Frequently, it is difficult to determine whether subsequent expenditure related to fixed asset represents improvements that ought to be added to the gross book value or repairs that ought to be charged to the profit and loss statement. Only expenditure that increases the future benefits from the existing asset beyond its previously assessed standard of performance is included in the gross book value, e.g., an increase in capacity. The cost of an addition or extension to an existing asset which is of a capital nature and which becomes an integral part of the existing asset is usually added to its gross book value. Any addition or extension, which has a separate identity and is capable of being used after the existing asset is disposed of, is accounted for separately. Need for Valuation of Fixed Assets: Valuation of fixed assets is important-in order to have fair measure of loss andfinancial position of the concern. Fixed assets are meant for use for many years. The value of these assets decreases with their use or with time or for other reasons. A portion of fixed reduced by use isconverted into cash though charging depreciation. For correct measurement of income proper measurement of depreciation is essential, as depreciation constitutes apart of the total cost of production. Definition of depreciation Financial Reporting Standard 15 (covering the accounting for tangible fixed assets) defines depreciation as follows: 32

The wearing out, using up, or other reduction in the useful economic life of a tangible fixed asset whether arising from use effusion of time or obsolescence through either changes in technology or demand for goods and services produced by the asset. A portion of the benefits of the fixed asset will be used up or consumed in each accounting period of its life in order to generate revenue. To calculate profit for a period, it is necessary to match expenses with the revenue they help earn. In determining the expenses for a period, it is therefore important to include an amount to represent the consumption of fixed asset during that period (that is, depreciation) In essence; depreciation involves allocating the cost of the fixed asset (less any residual value) over its useful life. To calculate the depreciation charge for an accounting period, the following factors are relevant: The cost of the fixed asset; The (estimated) useful life of the asset; The (estimated) residual value of the asset. Characteristics of depreciation. 1. Depreciation is always a fall in the value of asset. 2. This fall is always gradual. 3. This fall of permanent character and cannot be recouped afterwards. 4. The depreciation is a continuous process and it does not matter whether the asset was put to use during the period or not. Depreciation is always on fixed assets and on current or floating assets The relevant cost of a fixed asset The cost of fixed asset includes all amounts incurred to acquire the asset and any amount that can be directly attributable to during the asset into working condition.

33

 Directly attributable cost may include: Delivery costs Costs associated with acquiring the asset such as stamp duty and import duties Costs of preparing the site for installation of the asset Professional fees, such as legal fees and architects fees Note that general overhead costs or administration costs would not costs of a fixed asset (e.g. the cost of the factory building in which the asset is kept, or the cost of the maintenance team who keep the asset in good working condition) The cost of subsequent expenditure on a fixed asset will be added to the cost of the asset provided that this expenditure enhances the benefits of the fixed asset or restores any benefits consumed. This means that major improvements or a major overhaul may be capitalized and included as part of the cost of the asset in the accounts. However, the costs of repairs or overhauls that are carried out simply to maintain existing performance will be treated as expenses of the accounting period in which the work is done, and charged in full as an expense in that period. DEPRECIATION AND SALVAGE VALUE Although the useful life of equipment (a fixed asset) may be long, it is nonetheless limited. Eventually the equipment will loss all productive worth and will possess only Salvage value (scrap value). Accounting demands a period-by-period matching of costs against income. Hence, the cost of a fixed asset (over and above its salvage value) is distributed over the assets estimated lifetime. This spreading of the cost over the periods which receive benefits is known as depreciation. The depreciable amount of a fixed asset-that is, cost minus salvage value- may be written off in different ways. For example, the amount may be spread evenly over the years affected as in the straight-line method. The units of production method bases 34

depreciation for each period on the amount of amount of output. Two accelerated method, the double declining balance method and the sum-of-the year-digits method, provide for greater amounts of depreciation in the earlier years.

DEPRECIATION METHODS 1.STRAIGHT-LINE METHOD This is the simplest and most widely used depreciation method. Under This method an equal portion of the cost (above salvage value) of the asset is allocated to each period of use. The periodic depreciation charge is expressed as Depreciation=cost-salvage value Estimated life

2. UNITS OF PRODUCTION METHOD Where the use of equipment varies substantially from year to year, the unitsof-production method appropriate for determining the depreciation. For example, in some year logging operations may be carried on for 200 days, in other years for 230 days, in still other years for only 160 days, depending on weather condition. Under this method, depreciation is computed for the appropriate unit of output or production (such as hours, miles, or pounds) by the following formula: cost-salvage Unit depreciation= Estimated units of production during lifetime The total number of units used I a year is the multiplied by the unit depreciation to arrive at the deprecation amount for that year. We can express this as Unit depreciationusage=depreciation cost-salvage 35 usage

Deprecation= Estimated life (in units) This method has the advantage of relating depreciation cost directly to income.

3.DOUBLE DECLINING BALANCE METHOD The double declining method produces the highest amount of depreciation in the earlier years. It does not recognize salvage or scrap values. Instead, the book value of the asset remaining at the end of the depreciation period becomes the salvage or scrap value. Under this method, the straight-line rate is doubled and applied to the declining book balance each year. Many companies prefer the double declining balance method because of the greater write-off in the earlier years, a time when the asset contributes most to the business and when the expenditure was actually made. The procedure is to apply a fixed rate to the declining book value of the asset each year. As the book value declines, the depreciation becomes smaller. 100% Depreciation= 100% 2 Estimated life in years 4.SUM-OF-THE-YEARS-DIGITS METHOD With this method, the years of assets lifetime are labeled 1,2, and 3 and so on, and the depreciation amount are based on a series of fraction that have the sum of the years, digit as their common denominator. The greatest digit assigned to a year is used as the numerator for the first year, the next greatest digit for the second year, and so forth. The Useful life of a Fixed Asset An asset may be seen as having a physical life and an economic life. Most fixed assets suffer physical deterioration through usage and the passage of time. Although acre and maintenance may succeed in extending the physical life of an 36

asset, typically it will, eventually, reach a condition where the benefits have been exhausted. However, a business may not with to keep an asset until the end of its physical life. There may be point when it becomes uneconomic to continue to use the asset even though there is still some physical life left. The economic life of the asset will be determined by such factors as technological progress and changes in demand. For purposes of calculating depreciation, it is the estimated economic life rather than the potential physical life of the fixed asset that is used. The Residual Value of a Fixed Asset At the end of the useful life of a fixed asset the business will dispose of it and any amount received from the disposal will represent its residual value. This, again, may be difficult to estimate in practice. However, an estimate has to be made. If it is unlikely to be a significant amount, a residual value of zero will be assumed. The firm should evolve strategies regarding the following two factors. Trend Analysis: In financial analysis the direction of changes over a period of years is of initial importance. Time series or trend analysis of ratios indicators the direction of changer. This kind of analysis is particularly applicable to the items of profit and loss account. It is advisable that trends of sales and net income may be studies in the light of two factors. The rate of fixed expansion for secular trend in the growth of the business and the general price level. It might be found in practice that a number of firm would be shown price leve. apersistent growth over period of years. But to get a true trend of growth, thd sales figure should be adjusted by a suitable index of general prices In other words, sales figures should be defaulted for rising price level. Another method of securing trend of growth and bewhich can be used instead of the adjusted sales figure or as check n them is to tabulate andplot the

37

output or physical volume of the sales expressed in suitable, units of measure . If the general price level is not considered while analyzing trend of growth, it can be misleadmanagement they may become unduly optimistic in period of property and pessimistic in duel periods.

For trend analysis, the use of index numbers is generally advocated the procedurefollow is to assign the numbers 100 to items of the base year and at calculate percentage change in each items of other years in relation to base year. The procedure may be calledas Mixed percentage method. This margin determines the direction of upward or downward and involves theimplementation of the percentage relationship of the each statement item meant to thesame in the base year. Generally the first year is taken as the base year. The figure of thebase year are taken as 100 and trend ratio be other year or calculated on the basis of oneyear. Here and attempt is made to known the growth total investment and fixed assets of Kesoram cement industries for six years that is 2001-2002 to 20072008 RATIO ANALYSIS: Ratio analysis is a powerful is a powerful tool of financial analysis. A ratio isdefined as "The indicated quotient of two mathematical expression" and as "Therelationship between for evaluating the financial position and performance of a firm. Theabsolute accounting figure reported in financial statement do not private a meaning fullunderstanding of the performance and financial position of a firm. An accounting figureconveys meaning when it is related to some other relevant information. Ratios help to summarize large quantities of financial data and to make qualitativejudgment about the firms financial performance. 1. Fixed Assets to Net worth Ratio: This ratio establishes the relationship between Fixed Assets and Net Worth.

38

Net Worth = share capital + Reserves& surplus + Retained earnings. Fixed Assets Fixed Assets to Net Worth Ratio = ------------------------------ X 100 Net Wort Net Worth This ratio of "Fixed Assets" to "Net Worth" indicates the extent to whichshareholder be financed by shareholders, equity including reserves surpluses and retainedearnings. If the ratio is less than 100% it implies that owners funds are more than totalFixed Assets and a part of the working capital is provided by the share holders. When theratio is more than 100% it implies that owners funds are not sufficient to finance the fixedassets and the finance ahs to depend up onoutsiders to finance the fixed assets. There is no "Rule of Thumb" to interpret this ratio but60%to65%is considered to be ratio in ease of industrial undertaking. 2. Fixed Assets Ratio:This ratio explained whether the firm has raised adequate long term funds to meetits fixed assets requirements and is calculated as under Fixed Assets (After Depreciation) ---------------------------------------Capital Employed This ratio gives an idea as to what part of the capital employed has been used in purchasing the fixed assets for the concern. If the ratio is less than one it is good for the concern. 3. Fixed Assets as a Percentage to Current Liabilities: The ratio measures the relationship between fixed assets and the funded debt and isa very useful so the long term erection. The ratio can be calculated as below. Fixed assets

39

Fixed assets as a percentage to current liabilities = -------------------------Current Liabilities 4. Total Investment Turnover Ratio: This ratio is calculated by dividing the net sales by the value of total assets i.e., (Net sales/Total Investment) or (Sales /Total Investment). A high ratio is an indicator of over trading of total assets while a low ratio reveals idle capacity. The traditional standardfor the ratio in two times. 5. Fixed Assets Turnover Ratio: This Ratio expresses the number of times fixed assets are being turned -over is a stateperiod. It is calculated ass under: Sales -------------------------------------------Net Fixed Assets (After depreciation) This ratio shows low well the fixed assets are being used in the business . The ratiois important in ease of manufacturing concern because sales are. produced not only by useof Current Assets but also by amount invested in Fixed Assets the higher ratio , the better is the performance, on the other hand a low ratio indicated that fixed assets are not beingefficiently utilized. 5. Gross Capital Employed: The term "Gross Capital Employed" usually comprises the total assets , fixed aswell as current assets used in a business. Gross Capital Employed - Fixed Assets + Current Assets 7. Return on Fixed Assets: Profit after Tax ------------------------------ x 100

40

Fixed Assets This ratio is calculated to measure the profit after tax against the amount invested intotal assets to ascertain whether assets are being utilized properly or not, the higher theratio the better it is for the concern.

Valuation of fixed assets in special cases: In the case fixed assets acquired on hire purchase terms, although legal ownership does not vest in the enterprise, such assets are recorded at their cash value, which, if not readily available, is calculated by assuming an appropriate rate of interest. They are shown in the balance sheet with an appropriate narration to indicate that the enterprise does not have full ownership thereof. Where an owns fixed assets jointly with others (otherwise than as a partner in a firm), the extend of its share in such assets, and the proportion in the original cost, accumulated depreciation and written down value are stated in the balance sheet. Alternatively, the pro rata cost of such jointly owned assets is grouped together with similar fully owned assets. details of such jointly owned assets are indicated separately in the fixed assets register. Where several assets are purchased for a consolidation price, the consideration is apportioned to the various on a fair basis determined by competent value. Fixed Assets of special types: Goodwill, in general, is recorded in the books any when some consideration in money or moneys worth has been paid for it. Whenever a business is acquired for a price (payable either in cash or in shares or otherwise) this is in excess of the value of the net assets of the business taken over, the excess is termed as goodwill. Goodwill arises from business connection, trade name or reputation of an enterprise or from other intangible benefits enjoyed by an enterprise. As a matter of financial prudence, goodwill is written off over a period. However, many enterprises do not write off goodwill and retain it as an asset.

41

Examination of current fixed asset records The first step in the conversion process should be to determine what fixed assets the currently has in its property records. These assets should be sorted into the following classification: Land Building Building improvements Furniture and fixtures-dwelling Furniture and fixtures-administration Equipment-dwelling Equipment-administration This process may be accomplished by obtaining the original development cost certificates and the modernization cost certificates and any other grant-related closeout documents. These documents can then be used to segregate the costs that should be capitalized from that now should be expensed, i.e. soft costs. A simple procedure to use would be to accumulate all costs on a spreadsheet with columns categorized for cost to be capitalized, per the guidance above, and costs that should be expensed, also per above, for each asset. This allocation should equal the hard and soft costs for each asset as originally accumulated. This would assist in accumulating sufficient cost information to generate subsequent conversion entries. The totals of these columns, both hard and soft costs, should agree with the total costs

42

for fixed assets as shown on the existing accounting records under the former Accounting.

Disclosure Certain specific disclosures on accounting for fixed assets are already required by accounting standard 1 on disclosure of accounting policies and accounting standard 6 on depreciation accounting. Further disclosure that are sometime made in financial statements include: i. Gross and net book values of fixed assets at the beginning and end of an accounting period showing additions, disposals, acquisitions and other movements; ii. Expenditure incurred on account of fixed assets in the course of construction or acquisition; and iii. Revalued amount substituted for historical costs of fixed assets, the method adopted to compute the revalued amounts, the nature of any indices used, the year of any appraisal made, and whether an external valuer was involved, in case where fixed stated at revalued amounts.

43

Trend Analysis: Current year investment Trend Analysis = -------------------------------------- X 100 Basis of one year investment TREND ANALYSIS YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 TREND PERCENTAGE INVESTMENT 44,85,21,386 39,68,35,265 24,99,02,930, 28,19,24,444 29,01,51,000 TREND PERCENTAGE 100 88.47 56.71 62.85 64.69

44

Interpretation
From the analysis of the above table it can be observed that the growth rate of total investment of Kesoram cement industries is in downward trend which shows table of the Kesoram cement industries investment is decreasing from time to time. During the year 2006-2007 It was recorded 100%. But it is decreasing in the year 2009-2010 which shows that there is a net decrease by 62.85 %. The average investment In total assets was found to be Rs.28,19,24,444 during the review period . During the period of 2009-2010 the average investment in total asset was found to be Rs. 209.51, it was recorded by 64.69%.

45

Percentage of Growth Rate in Fixed Assets: Current year fixed assets Percentage of Growth Rate in Fixed Assets =----------------------------------------- X 100 previous year fixed assets

GROWTH RATE IN FIXED ASSETS YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 INVESTMENT 6,25,64,02,879 5,89,55,39,377 5,69,93,08,565 5,71,48,37,436 74321.97 TREND PERCENTAGE 100 94.23 91.09 91.34 118.79

GROWTH RATE IN FIXED ASSETS

46

Interpretation
Growth rate in fixed assets, the examination of the above table reveals analysis and interpretation. The average growth rate in fixed assets Rs. 74321.97 in 5 years.

47

Fixed Assets to Net worth Ratio If the ratio is less than 100%, it implies that owner funds are more than total Fixed Assets and a part of the working capital is provided by the share holder and vice-versa. Net Worth = share capital + Reserves& surplus + Retained earnings. Fixed Assets Fixed Assets to Net Worth Ratio = --------------------------- X 100 Net Worth Net Worth FIXED ASSESTS TO NET WORTH YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 NETWORTH 3,38,81,85,855 3,38,78,40,215 3,48,48,27,422 3,77,14,58,784 41605.00 GROSS FIXED ASSETS 6,25,64,02,879 5,89,55,39,377 5,69,93,08,565 5,71,48,37,436 74321.97 RATION IN % 184.65 174.02 163.54 151.52 178.63

FIXED ASSETS TO NET WORTH

Interpretation

48

 The gross fixed to Net worth ratio is furcating from year to year. In the year 2003-2004 the gross fixed assets to net worth to ratio is 184.65%, in the year 2009-2010 the fixed assets to net worth to acquire the ratio is 168.87%. The average net worth to fixed ratio is Rs.36385.62 or fixed assets average Rs.61996.668 the average percentage of fixed assets to net worth is 168.06 The highest ratio recorded in 2002-2003 at 184.65 the lowest ratio is recorded at151.52 in the year 2008-2009

49

Fixed Assets as a percentage to Long Term Liabilities: Fixed Assets Ratio a Various ratio of fixed assets to net worth is a ratio of fixed assets to long term funds which is calculated as: Fixed assets (After depreciation) Fixed Assets to long term liabilities=----------------------------------------------- X 100 Capital Employed Fixed Assets as a percentage to Long Term Liabilities: YEAR FIXED ASSETS LONG TERM PERCENTAGE 163.5 152.7 178.63 168.87 178.63 FUNDS 2006-2007 5,69,93,08,422 3,48,48,27,422 2007-2008 5,71,48,37,436 3,77,14,58,784 2008-2009 74321.97 41605.03 2009-2010 1,10,519,01 65,443,44 2010-2011 74321.9700 416050300 Fixed Assets as a percentage to Long Term Liabilities:

Interpretation

50

 The fixed assets as a % of long term liabilities the ratio is fluctuating from year to year. The fixed assets as a percentage of long term liabilities is recorded at 184.5% in the year 2001 and it is recorded at 152.7% in the year 2007-2008 The highest ratio is recorded at 184.6% in the year 2002-2003 the low ratio is152.7% in 2007-2008.

51

Fixed Assets as a Percentage Current Liabilities: Fixed assets Fixed Assets as a Percentage to Cu/Liabilities=........................................... Current liabilities

Fixed Assets as a Percentage Current Liabilities: YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 FIXED ASSETS 6,25,64,02,879 5,89,55,39,377 5,69,93,08,565 5,71,48,37,436 74,321.97 CURRENT LIABILITIES 2,03,50,123 2,40,99,51,568 2,14,80,89,665 2,30,72,27,432 237,45.24 RATIO 3.07 2.44 2.65 2.47 3.12

Fixed Assets as a Percentage Current Liabilities:

52

Interpretation
The ratio was fluctuating trend percentage in review period. From the above table it is observed that the ratio was recorded at 3.07 in the 2006-2007 and is gradually changing to 3.12 in 20010-2011 which indicates that the current funds are used in the fixed assets which is quite satisfactory. The average ratio was rewarded at during 15% the review period of time The highest ratio was recorded at 3.12% which is higher than the average ratio. The lowest ratio was recorded at 2.44 which is less than the average ratio.

53

Total Investment Turnover Ratio Sales Total investment turnover ratio= -------------------- x100 Total investment Total Investment Turnover Ratio YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 SALES 140116.22 135375.24 129553.62 142195.78 161317.74 TOTAL INVESTMENT 4485.21 3968.35 2499.02 2819.24 2901.51 RATIO 31.2 34.1 51.84 50.53 55.59

Total Investment Turnover Ratio

Interpretation

54

 The ratio was in increasing trend. During the year 2006-2007 the ratio was recorded at 31.2 and in the 20102011 the ratio was increased to 55.59 The highest ratio was recorded at 55.59 in the year 2010-2011 which is more than the average ratio. The ratio was 32.5 which is lesser than the average ratio.

55

Fixed Assets Turnover Ratio Sales Fixed Assets Turnover Ratio ----------------------x 100 Total Fixed Asset Fixed Assets Turnover Ratio YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 SALES 140116.22 135375.24 129553.62 142195.78 161317.74 TOTAL FIXED ASSETS 62564.02 58955.39 56993.08 57148.37 74321.97 RATIO 2.23 2.29 2.27 2.40 2.17

Interpretation

56

 The fixed assets turnover ratio is fluctuating trend during the review period of time. During the year 2006-2007 the ratio was recorded as 2.23% and in the year 2010-2011 the ratio was recorded to 2.17% Average ratio was observed 5% during the review period of time* The highest ratio was recorded at 2.40% during the year 2009-2010 which is morethan average. The lowest ratio was 2.23% in the 2006-2007 which is less than the average.

57

Fixed Assets as a Percentage to Total Assets:Fixed Assets Fixed Assets as a percentage to Total Assets=--------------------------X 100 Total Assets Fixed Assets as a Percentage to Total Assets:YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 FIXED ASSTS 62564.03 58955.39 56993.08 57148.37 74321.97 TOTAL FIXED ASSETS 112647.26 112637.07 113443.06 123031.14 138204.81 RATIO 55.5 52.3 50 46 53.77

Fixed Assets as a Percentage to Total Assets:-

Interpretation

58

 Fixed assets to total assets ratio is fluctuating trend during the review period of time During the year 2006-2007 the ratio was recorded at 55.5% and the year 20102011the ratio was decreased to 53.77%. Average ratio was observed at 51.51% during the review period of time. The highest ratio was observed at 55.5% during the year 2006-207 which is more then the average. The lowest ratio was recorded at 46% in the year 20092010 which is less then average ratio.

59

Gross capital Employed Gross capital Employed = Fixed Assets + current Assets. Gross capital Employed YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 CURRENT ASSETS 45598.02 49712.32 53951.48 63063.52 60981.33 GROSS CAPITAL EMPLOYED 108162.05 108668.71 110944.56 120211.89 785303.3 RATIO 153760.07 108668.71 214609.36 183275.36 846284.63

60

Interpretation
From the above the profits of Kesoram Cement Industries is in increasing which isgood for the company. In the year 2009-2010 the PAT is 4570.92 lacks and then it is increasing. In the year 2006-2007 the PAT is the lowest and in 2007-2008 it is observed thatthe highest PAT is 62999.57 over the years.

61

Return On Gross Capital Employed:Profit After Tax Return on Gross Employed= ---------------------------------------X 100 Gross Capital Employed Return On Gross Capital Employed:YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 PROFIT AFTER TAX 4137.14 2814.67 6299.57 3351.57 4644.97 GROSS CAPITAL EMPLOYED 108162.05 108668.71 110944.56 120211.89 113857.82 RATIO 3.8 2.5 5.7 2.8 4.0

62

Interpretation
Return on Gross capital employed ratio is fluctuating trend during the review period of time During the year 2006-2007 the ratio recorded as 3.8% in the year 2010-2011 theratio was increased to 4.0% and average ratio is 3.9% The highest ratio is recorded at 5.7%% in the year 2008-2009 which is more then average ratio The lowest ratio was recorded at 2.5% in the year 2007-2008 which is less than the average ratio.

63

Return on Fixed Assets:Profit After Tax Return on Fixed Assets =....................................X 100 Fixed Assets Return on Fixed Assets:YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 PROFIT AFTER TAX 4137.14 2814.67 6299.57 3351.57 4644.97 FIXED ASSETS 62564.03 58955.39 56993.08 57148.37 74321.97 RATIO 6.6 4.7 11.05 5.86 6.15

Interpretation

64

 Return on fixed assets ratio is increasing During the year 2006-2007 the ratio recorded as 6.6% in the year 2010-2011 the ratio was increased to 6.15% The average ratio is 6.872% The highest ratio is recorded at 11.05% in the year 2008-2009, the lowest ratio is 4.7% in the year 2007-2008.

65

FINDINGS
The total growth rate in fixed assets is increased during the year 2006-2011 from 100% to 118.63% The total investment turnover ratio it is clear that it has been increased over the years considerably i.e., 31.2% to 56.59% during the period 2006-2011 The profit and gross capital employed ratio it can be clear that it has been increasing over the year i.e., from 3.82% to 14.48% Gross capital employed ratio it can be clear that it has been increasing over the 5 years from 3.8% to 4.0. The return and fixed assets it can be cleared that has overage percentage considered by 6.8721 during the period 2006-2011.

66

CONCLUSIONS The financial position of Kesoram cement regarding investment it has been increased. The fixed assets as a percentage of current liabilities it is observed it is decreased. The fixed assets turn over ratio it has been observed that it is satisfactory. The fixed assets to total assets it been observed that three was increased. As a result it is said to be that ratio is quite satisfactory. As a result of the above it can be said that the ratio is steadily increasing

The value of assets has to be increased. From the above study it can be said that the Kesoram cement industries financial position on fixed assets is quite satisfactory.

By that the appropriate value of the fixed assets can be ascertained.

67

SUGGESTIONS The financial position of the Kesoram cement industry is clear that the ratio fixed assets to turnover is not at all ideal. The company has to increase the fixed assets turnover ratio. Return on fixed assets are not satisfactory througthout all the years, there was a too much flutuation in the percentage of return on fixed assets so the coma\pany should try to decrease the fluctations. From the financial position of the kesoram cement industry is clear that on the basis of ratio fixed assets as percentage to current liabilities, the current liabilities were increasing as fixed assets increasing gradually. For the purpose of purchasing fixed assets the company is utilizing is curent liabilities. It may cause the company to bare excess intewrest compare to long term liabilities, so the company should not depend on the current liabilitis to invest in fixed assets.

68

BIBLIOGRAPHY Books: S N Maheshwari & S K Maheshwari Prasanna Chandra M Y Khan & Jain Aish K Bhattacharya Financial Accounting Fundamentals Of Financial Management Financial Management Financial Accounting

Websites: 1. www.kesoramcementindustry.com 2. www.google.com 3. www.kesocorp.com/COMPANY/cement.html

69