Rahul 123456 hjh

8/10/2019 Rahul 123456 hjh

1/51

1

1.0 COMPANY PHOTOGRAPHY

Vikrant Bias Tyre Plant

8/10/2019 Rahul 123456 hjh

2/51

2

1.1 Vision, Mission and Quality Management

Vision:

TO BE AMONGEST THE MOST ADMIRED COMPANIES IN INDIA COMMITED TO

EXCELLENCE

Mission:

To be a customer obsessed company.

To be the largest and most profitable tyre company in India.

To retain No 1 position in truck and bus segment and to be amongst top 2 in all other

4 wheeler tyre.

8/10/2019 Rahul 123456 hjh

3/51

3

To make truck/bus radial opens profitable and retain leadership in the passenger

radial market.

To enhance value to shareholders and service to all stake holders.

To excel as a value driven organization.

To be the most preferred tyre brand in India.

Quality Management:

The people of JK Tyre have an organization committed to quality in everything they

do.

They continuously anticipate and understand customer requirement, convert these

into performance standards for their product and service and to meet the standards every

time.

1.2 J K Industries

JK Organization owes its name to Late Lala Juggilal Singhania, a dynamic personality

with a broad vision, Inspired by the Swadeshi movement of Mahatma Gandhi, and driven by

the zeal to set up an Indian enterprise, Lala Kamlapat Singhania founded JK organization in

the 19thcentury in India.

The process of industrialization and diversification was worthily and successfully

carried on by Lala Kamlapats three illustrious sons Sir Padampat, Lala Kailashpat and Lala

Laksmipat, aided in no small measure by the late Gopal Krishna son of sir Padampat.

JK Organization has been a forerunner in the economic and social advancement of

India. It always aimed at creating job opportunities for a multitude of country men and

provides high quality of products. It has driven to make India self reliant by pioneering the

production of number of industrial and consumer products, by adopting latest as well as

developing its own know-how. It has also under taken industrial ventures in several other

countries.

8/10/2019 Rahul 123456 hjh

4/51

4

JK Organization is an association of industrial and commercial companies and

charitable trust. Its member companies, employing nearly 50000 persons are engaged in the

manufacture of variety of products and in diverse fields of commerce.

Trust are devoted to promoting industrial, technical and medical researches,

education, religious values and providing better living and recreational facility. With the

spirit of social consciousness uppermost in mind, JK organization is committed to cause the

human advancement.

Background and inception of the company

1933 First in India to manufacture calico prints- {Juggilal Kamlapat cottons spinning

and weaving mills company, Kanpur.}

1940 First in India to manufacture steel bailing Hoops for jute and cotton and to make the

country self sufficient by meeting the entire demand- J.K Iron and Steel Co. Ltd.,

Kanpur.

1944 First in India to produce Aluminum Virgin Metal for Indian Bauxite-Aluminum

CorpoRATIOn of India Ltd., Jaykayanagar.

1949 First in India to manufacture Engineering files- J.K. Engineers files Bombay.

1959 First in India to set up a continuous process Rayon plant.

1960 First in India to set up a Hydraulically operated Cane Crushing Mill for Kandsari

Sugar Plant and completed 100 ton plant.

8/10/2019 Rahul 123456 hjh

5/51

5

1961 First in world to set up a plant for production of Hydrosulphite of soda by Sodium

Amalagam process- J.K. Chemicals Ltd., Bombay.

1962 First in India to produce Nylon-6 with its own polymerized raw material- J.K.

Synthetics Ltd., Kota.

1965 First to produce sodium Sulphoxylate Formaldehyde [Rangolite C of Formosul] in

India- J.K. Chemicals Ltd., Bombay.

1968 First to manufacture TV sets in India- J.K. Electronics, Kanpur.

1976 First in India to produce steel belted Radial tyres for passenger car, trucks and

buses- J.K. Tyre plant, Kankroli.

1980 First in the world to make steel belted radial tyres for 3 wheelers.

1984 First in India to produce white cement through dry process.

1985 First in India to produce cathonic Dye able Polyester Fiber.

1989 First in India to produce magnetic tapes with cobalt technology.

1991 Banmore tyre plant {BTP} set up with the capacity of 5.7 lacks tyres per annum.

1992 R&D centre setup at HASTERI.

1994 Indias first T-rated tyre launched Banmore Tyre Plant {BTP} Crossed 100 TPD.

8/10/2019 Rahul 123456 hjh

6/51

6

1995 Mercedes Benz launched on JK STEEL RADIALS first tyre manufacturer in the world

to get ISO 9001.

1996 Indias first dual contact high tractions steel radial- aqua sonic launched. {Introduce

steel wheels}.

1998 First tyre manufacturer in the world to get QS 9000. Awarded CAPEXILS highest

export award for 1997-98.

1999 Synergy with VTL in procurement, marketing and production flexibility.

Completion of states of the art modernizations of truck radials

J.K. Tyres ranked 16thlargest tyre company in the world

ISO- 14001 accreditation for environment and safety.

2000 J.K. introduced national Go- carting championships.

2001 J.K. industries received FOCUS LAC EXPORT award for the year 1999-2000.

Commendation certification of CII ND National exam. Go- carting championships

held.

8/10/2019 Rahul 123456 hjh

7/51

7

JK Tyres Plants

Mysore plant- 1 {VTP} - Karnataka

Mysore plant- 2 {VTP Radial} - Karnataka

Kankroli - Rajasthan

Banmore - Madhya Pradesh

1.2 Vikrant Tyres Limited

Vikrant tyres ltd {VTL} is situated in an area of 53 acres in Mysore. VTL is a major

tyre manufacturing company and one of the most successful industrial ventures in the stateof Karnataka.

In the year 1970 this company was conceived as a joint venture by the participation of south

Indian export company Pvt Ltd, Madras {Chennai} with Karnataka state industrial

investment and development corporation Ltd {KSIIDC} for establishing and automobile

tyres and tubes manufacturing unit at Metagalli industrial area in Mysore. In 1977 the

management was taken over by the Government of Karnataka state industrial investment

and development corporation Ltd {KSIIDC}. The commercial production started from 19 th

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

The company is certified under ISO 9001, QS 9000, ISO 14001 and ISO/TS 16949:2002

certifications, for design manufacture and sale of automobile tyres, tubes, flaps and tread

rubber. JK industries ltd was inducted as strategic Alliance Partner {SAP} during may 1997

with a view to improve the overall performance of the company. Collaboration agreement

was entered with the M/S Continental tyres Germany in 1980. Vikrant tyres Limited, a JK

tyres associate, manufactures cutting edge innovative products at conformed to the highest

international standards.

JK industries ltd in 1997 Acquired Vikrant Tyres Limited, Mysore. VTL has the first

truck/bus steel radial in India. This has state of the art technology in technical collaboration

8/10/2019 Rahul 123456 hjh

8/51

8

with continental A G Germany. Vikrant tyres have successfully launched high performance

steel truck radial tyres in the latest international pattern for the Indian as well as

international market.

Register Office at:-

VIKRANT HOUSE

No 54, 1stMain Road,

V.V Mohalla, Mysore - 570002

Milestones of Vikrant Tyres Limited {VTL}

1970

Joint Venture by SIEC Pvt. Ltd., and KSIIDC conceived to manufacture Automotive

Tyres and Tubes at Mysore.

1973 Incorporated as a joint venture company by KSSIDC and SIEC Pvt. Ltd., Madras

{Chennai}.

1977 Taken over by government of Karnataka through KSIIDC.

1980 Commercial production commenced.

1982 Collaboration with M/S AVON Tyres UK.

1985 T-Pilot plant setup for manufacturing of truck Radial Tyre Plant.

1989 Construction of new Truck Radial Tyre Plant.

8/10/2019 Rahul 123456 hjh

9/51

9

1991 Commercial production of all steel truck Radial Tyre.

1992 First against OTR tyre rolled out.

1994 Certified to IS 9001:1994 quality management systems.

1997 JKIL inducted as strategic Alliance Partner {SAP} by government of Karnataka.

1999 Certified to QS 9001:1998 QMS and also ISO 14001:1996 EMS. Turnaround under JK

management within 10 months and declared divided after a gap of 6 years. Massive

modernization and up gradation investing Rs. 224.13 crores.

2000 March-Bias plant-Rs 73.16 crores, December-Truck Radial Plan- Rs 150.97 crores.

2011 Merged with JKIL. Certified to ISO/RS 16949:2002 process based QMS.

2004 First Indian tyre company to adopt process based management through Business

Process Re- Engineering {BPR}.

8/10/2019 Rahul 123456 hjh

10/51

10

1.3 J K GROUP DIVERSIFICATION

JK ORGANISATION

J.K. Organization, founded over 100 years ago, is an eminent

industrial group in India. The Group has multi-business,

multi-product and multi-location opeRATIOns

JK PAPER LTD.

JK Paper Limited is one of the leading manufacturers o

reading and writing paper

JK LAKSHMI CEMENT LTD.

JK Lakshmi Cement Limited is a well respected name in the

cement industry in India
http://jkorg.in/http://www.jkpaper.com/http://www.jkpaper.com/http://www.jkpaper.com/http://www.jklakshmi.com/http://www.jklakshmi.com/http://www.jkpaper.com/http://jkorg.in/

8/10/2019 Rahul 123456 hjh

11/51

11

FENNER (I) LTD.

Fenner (I) Limited is a leading manufacturer of Industrial

and Automotive Belts, Oil Seals, Power Transmission

Accessories and Textile Yarn

UMANG DAIRIES LTD.

The Creme de la creme of dairy foods

JK AGRI-GENETICS LTD.

At JK Agri-genetics limited, concentrates on Research and

Development, production, processing and marketing ohybrid seeds.

JK SUGAR LTD.

The company's principle activity is to manufacture Sugar.

However, the company currently operates in two segments.

Power and Sugar

JK RISK MANAGERS AND INSURANCE BROKERS LTD.

Services rendered to various clients for all facets o

Insurance both life & non-life.

CLINIRX RESEARCH PRIVATE LTD.

Full Service Contract Research Organization (CRO)
http://www.fennerindia.com/http://www.umangdairies.com/http://www.jkseeds.net/http://jksugar.net/http://www.jkbima.com/http://www.clinirx.com/http://www.clinirx.com/http://www.jkbima.com/http://jksugar.net/http://www.jkseeds.net/http://www.umangdairies.com/http://www.fennerindia.com/

8/10/2019 Rahul 123456 hjh

12/51

12

1.4 Product/Services profile:

The major products of JK Company are automobile tyre {Nylon tube tyre, radial tube and

tubeless tyre } tubes names.

1} Truck Tyre

1. Jet rib 7. Jet truck

2. Vikrant truck king 8. jet truck

3. Star lug 9. Sand cum hiway

4. Super T.K 10. Truck plus

5. JT king 11. JT Classic

6. Hi Life 12. JETRK

2} Light Tucks

1. Jet rib 3. Fleet king

2. Star lug 4. Truck king

8/10/2019 Rahul 123456 hjh

13/51

13

3} O.T.R (Of the Road)

1. VEM 99 E-3 T/L 3. VEM 00 SS E-4 T/L

2. VEM 99 E-4 T/T 4. EGO4 G2 T/T

4} Tubes

1. JK Tubes 2. Vikrant tubes 3. Tube V EX

5} Flaps

1. JK FLAPS 2. JK RDFLAPS 3. JK EXP FLAP

1.5 MANUFACTURING LOCATIONS

JK Tyre has five Modern plants in India which are strategically located at

Mysore plant-1(VTP) Karnataka

Mysore plant-2(VTP Radial) Karnataka

Banmore, Madhya Pradesh

Kankroli, Rajasthan

JK Tyre has also enhanced its global reach by taking over Tornel a renowed Mexican

company, which has 3 plants in Mexico. All these plants are equipped with Worlds most

advanced manufacturing and testing machines.

VIKRANT BIAS TYRE PLANT VIKRANT RADIAL TYRE PLANT
http://www.tornel.com.mx/http://www.tornel.com.mx/

8/10/2019 Rahul 123456 hjh

14/51

14

VIKRANT OTR PLANT

ghgkddfdf

KANKROLI TYRE PLANT BANMORE TYRE PLANT

Three plants in Mysore are

VTP -Vikrant Tyre Plant

OTR Off the road Tyre plant

RTP - Truck Radial Plant

8/10/2019 Rahul 123456 hjh

15/51

15

JK TYRE PLANTS OPERISKNAL CAPACITY

PLANT CURRENT CAPACITY(MT/DAY)

Kankroli Tyre Plant 210.00

Banmore Tyre Plant 165.00

Vikrant Tyre Plant 321.95

TOTAL 696.95

Nature of the business carried.

JK Industries is engaged in manufacturing and marketing of automotive tyres, tubes,

flaps. Products Involved:

Cross ply and radial tyres for light commercial vehicles.

Cross ply tyres for passenger cars.

Cross ply tyres for agricultural vehicles.

Cross ply tyres for of the road {OTR} vehicles.

Automotive inner tubes for trucks, buses, light commercial vehicles.

Achievements /awards

1. JK Tyres ranked 16thlargest company in the world.

2. ISO 14001 accreditation for environment and safety.

3. Indias first T rated tyre launched.

4. Mercedes Benz launched on JK Tyres radials first tyre manufacture in the world to

get ISO 9001.

8/10/2019 Rahul 123456 hjh

16/51

16

5. Only tyre manufacture to get E mark certification.

6. First tyre manufacture in the world to get QS 9000.

7. Awarded CEPEXILS highest export for 1997-98.

8. JK introduced national Go-carting championships.

9. JK industries received FOCUS LAC EXPORT award for the year 1999 and 2000.

10.Certified to ISO 9000 (1994 quality management systems).

11.First Indian Tyre Company to adopt process based management process based

management through business process re-engineering (BPRO).

8/10/2019 Rahul 123456 hjh

17/51

17

1.6

Work Flow Model

8/10/2019 Rahul 123456 hjh

18/51

18

The company opted for BPR (Business Process re-Engineering) with the concept of Factory

with in Factory called as Business Units. The primary objective of this concept is to focus on

Operational Efficiency such as production, quality, Cost, Deliverables and other parameters.

This breeds healthy competition amongst the BUs.

BU 1: Mixing, Dipping, Calendaring, Extruders

BU 2: Stock PrepaRATIOn and Tyre Assembly

BU 3: Tyre molding, Inspection

BU 5: Tyre Dispatch

BU 4: Radial Tyres

The Business Units are supported by SSUs calls as Service Support Units. general

functioning of Bus.

E.g. . SSU 1: Engineering Services

SSU 2: Engineering Services for Radial Plant

SSU 3: Finance

SSU 4: QA, Technical, IT

SSU 5: HR , IR , GAD

SSU 6: IED , Shift in charges , Mgf. services

8/10/2019 Rahul 123456 hjh

19/51

19

Work Flow Model

BU 1

1)

Compound At Banbury:

Compound is the process of mixing the necessary raw materials with selected

elastomer in the banbury. Banbury is an internal mixer, which consists of a completely

enclosed mixing chamber with two spiral shaped rotors. There is a hoper to feed the

ingredients and a door to discharge the mix. The rubber ingredients like chemicals are

weighted as mentioned in specification file and feed into hoper. Then the mixing process

takes place. Required mixing time is fixed to get better quality mixing.

2)

Extruder:

The main function of an extruder is to produce tread and side wall, bead, apex.

Extrusion is a process of forcing the mixed compound by means of screw, which rotates

inside the barrel. There are two types of extruder: a) Screw extruder, b) Ram extruder.

3) Zell Plant: : Dipping

The dipping process takes places in a zeal plant. Here rayon, nylon. Polyesters are

dipped in a solution containing normally a latex based resorcinol formaldehyde to improve

adhesive properties. Then the fabric is dried at a temperature of about 280-300 F for 150-

180 sec, the fabric is stretches to about 0-15%

4) Calendaring:

Calendaring is a machine, which consists of three or four rolls held in a frame work

used to produce the rubber sheets of required strength and length. To get a better quality

calendared fabric with uniform gauges, viscosity is important in the same way, hot

temperature of about 110-137mm.

8/10/2019 Rahul 123456 hjh

20/51

20

BU 2

5) Bias Cutter:

It is a machine used to make plys or to the rubber coated fabrics at required widthand angle, which are used in the production of tyres. Bias angle is the angle of cords in tyres

with respect to the central line. Based on the ideal cured angle, required for particular type

size and pattern, bias angle is calculated for the particular drum.

6) Pocket Making:

It is a process of making the pocket from the angle cutter fabrics. In pocket making

section, three types of pockets are constructed. The plys used for the first and second

pocket are known ad inner ply and those used for third pocket are known as outer ply.

7) Bead Assembly : Bead wire High tensile copper coated Steelwire coated with compound

wound on a former , fillered and flipped

8) Tyre Assembly : All individual components of tyre Viz Beads , Pockets, Tread and Sidewall

are assembled on a Building drum and the finished product is called as Green Tyre.

BU 3

9) Bladder:

Butyl rubber compound is used for making the bladder. As first, butyl rubber is

mixed with specified chemicals properly and then it enters the extruder section by the use

of the extruder, a specific length and width of slug is extruded. Then the ends of the slugs are

cut into the specified angle for proper joining.

8) Tyre Moulding:

Before moulding opeRATIOns, the green tyre has to be made ready for painting with

inner lubricants inside tyre for easy release from the bladder and the side walls are to be

coated with blemish paints.

8/10/2019 Rahul 123456 hjh

21/51

21

9) Tyre Curing:

It is a process of cross linking the rubber compounds through heat and pressure. For

the pressure of curing tyres presses are used. These pressed are pre warmed before loading

of green tyre is done in the top ring raise condition with vacuum.

10) Tyre Finishing and Inspection:

After curing, the tyres obtained by trimming of the extensions on the tyres surfaces

are checked for defects. Thus the process of removing excess materials from the tyre after

curing is called finishing. The finishing process is done either by buffing or trimming

method. All the tyres then are inspected and separated.

BU 5 :

Finished Goods Storage and dispatch : Storing of Okay tyres and arranging logistics

to various depots / STUs / OEMs as per the marketing requirements.

Future growth and prospectus:

To be the No.1 tyre company in India.

To be the largest tyre export company in India.

To be a customer obsessed company.

High quality of products.

Profit Maximization.

8/10/2019 Rahul 123456 hjh

22/51

22

VARIOUS ASPECT OF THE STUDY

This is the measure of inter relationship between different sections of the financial

statements which then is compared with the budgeted or forecasted results. Prior year

results and or the industrial results. To be most important risk must include a study of

underlying data. risk should be taken as guides that are useful in evaluating a companys

financial position and open risk and making comparisons with results in previous years or

with other companies. The primary purpose of risk is to point out areas needing further

investigations, risk will not carry meaningful business reasoning if there is no supporting

quantitative and financial information. A part from the risk other information which should

be looked at includes:

1. The contents of any accompanying commentary on the accounts.

8/10/2019 Rahul 123456 hjh

23/51

23

2. The age and nature of companys assets.

3. Current and future development in the companys markets, at home and overseas,

recent acquisition and disposals of a subsidiary by the company.

4. Extraordinary items in the income statement.

5. The auditor opinion on the financial statements.

6. Other information in the local papers about the company.

As you know there are vast numbers of users of parties interested in analyzing the

financial statement, including shareholders, lenders, customers, government,

employees and competitor.

Yet in many respect, they will be interested in different things. There in not,

therefore, any definitive, all-encompassing list of points for management that would

be useful to all these stakeholder groups.

Nevertheless, it is possible to construct a series of risk that together will provide all

to them with something that they will find relevant and from which they can

investigate further if necessary.

Risk management is the first step in assessing an entity. It removes some of the

mystique surrounding the financial statement and makes it easier to pin point items

which it would be interesting to investigate further.

These risk can ably be classified according the target group of the stakeholders.

Profitability for shareholders, creditors, investors, management.

8/10/2019 Rahul 123456 hjh

24/51

24

Risk management of J.K. Tyre & industries ltd.

RISK MANAGEMENT

Category of risk

(1)

PROFITABILITY RISK :-

NET PROFIT MARGIN Risk = Profit after tax / sales 100

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

PERTICULARS 2011 2012

PROFIT AFTER TAX 1081 2603

SALES 9371 12282

NET PROFIT MARGIN

RATIO

11.5% 21.2%

The objectives of profitability relates to a companys ability to earn a satisfactory

profit so that the investors and shareholders will continue to provide capital to it.

Company profitability is linked to its liquidity because earning ultimately produces

cash flow. For these reasons risk are important to both investors and shareholders.

(a) Return on capital employed (ROCE)

or return on investment.

(b) Return on equity (ROE )

RETURN ON INVESTMENT = NET PROFIT BEFORE TAX 100

CAPI TAL EMPLOYES

CAPITAL EMPLOYES = WORKING CAPITAL + FIXED ASSESTES

8/10/2019 Rahul 123456 hjh

25/51

8/10/2019 Rahul 123456 hjh

26/51

26

LIQUIDITY RISK :-

The business should not only provide information on its profitability, but also to

provide information that indicates whether or not the business will be able to pay itscreditors, expenses, loans falling due at correct times. A company may be profitable

but if it fails to generate enough cash to settle its said to be insolvent.

CURRENT ASSETS

CURRENT RISK = ______________________________

CURRENT LIABILITIES

CURRENT RISKN OF J.K. INDUSTRIES LTD.


CURRENT ASSETS 5865 6133

CURRENT LIABILTIES 3107 2388

CURRENT RATIO 1.89 2.56

SALES

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

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


SALES 692.31 967.55

FIXED ASSETS 569.02 741.52

TURNOVER RATIO 1.3 1.4

LIQUID ASSETS

QUICK RISK = _________________________

CURRENT LIABILITIES

8/10/2019 Rahul 123456 hjh

27/51

8/10/2019 Rahul 123456 hjh

28/51

8/10/2019 Rahul 123456 hjh

29/51

8/10/2019 Rahul 123456 hjh

30/51

30

To make a detailed analysis of the strategies adopted by the company for

planning monitoring and risk management.

To identify the vertical areas where greater attention is needed for better

management.

To give the feedback to the company for improvement in their strategies.

ii. The secondary objectives of this study are as follows:

To get some experience of working in an organization.

To know the deficiencies in the area of the finances.

4. Research Design:

Before starting the research every researcher should know the objective of the

study.

The objective is already given to attain it various data is analyzed. Research

design is

analytical.

5. Sample size:

A sample size cannot be given here because this study is purely based on

secondary

data and no field study are necessary for this analysis.

6.Analysis:

Analysis of data is most essential and difficult task in the present report an

attempt

has been made to analyze each & every financial statement of the company

effectively

so that proper analysis can be made of financial condition of the company.

8/10/2019 Rahul 123456 hjh

31/51

31

Management and interpretation:-

A much higher RATIO indicates poor investment policies of the company & poor inventory contro

while a low risk indicates

lack of liquidity & shortage of working capit In case of J.K.Tyres,this risk is increased in 2011 &

decreased till 2012.Better sign for the company investment policies & investment decision of

management.

In case of JK tyres,the risk decreased in 2011-12and later increased. Not a good sign.

In case of MRF Tyres,this risk is more or less constant,a better sign.

8/10/2019 Rahul 123456 hjh

32/51

32

higher risk indicates poor investment and inventory control.

Indicates lack of liquidity and shortage.

Working capital risk = CURRENT ASSETS/CURRENT LIABILITY

JK tyres is better. If we analyse graph working capital risk is low as compared with

others.

RISK-1

DEBT EQUITY RISK:

The debt-equity RISK is worked out to ascertain soundness of the long-tern financial

policies of the firm. This RISK experess a relationship between debt(external equities) and

the equity(internal equities). Debt means long term loans and equity means shareholders

fund. This RISK is calculated as under:-

Debt equity RISK= debt (long term loans)/equity(share holders fund).

A higher RISK indicates a risky financial position while a lower RISK indicates saferfinancial position.

OBJECTIVES:

The objectives of this RISK are as under:-

1) It derives the idea of the amount of capital supplied to the concern by the proprietors.

8/10/2019 Rahul 123456 hjh

33/51

33

2) To assess the soundness of long term financial position.

3) Indicates the extent to which the firm depends upon outsiders.

Table-2

years

company

2008 2009 2010 2011 2012

J.k tyres industries 1.04 1.26 1.84 1.96 2.28

JK tyres 0.76 0.72 0.84 1.07 0.86

MRF tyres 0.83 0.70 0.72 0.86 0.91

Management And Interpretation

In case of j.k tyre, debt-equity risk implies that the debt position is more than equity.The lower thedebt equity risk The higher the degree of protection felt by the creditors.

In this debt equity risk of company is increasing which is not a good sign.

In case of MRF tyre, debt-equity risk is more or less constant which a good sign is.

Graph-1

Debt equity risk

Relationship between debt(external equities) and equity(internal equities).

Ascertain soundness of long term financial policies.

Higher risk indicates a risky financial position.

Debt-equity risk =debt/equity.

MRF is better as its debt-equity risk is low.

8/10/2019 Rahul 123456 hjh

34/51

34

In case of JK tyre, debt-equity risk is more or less constant which a good sign is also.

MRF is better than others.

Risk-2

Interest coverage Risk:-

When a business borrow money, the lender is interested in finding out whether the business

would earn sufficient profits to pay periodically the interest charges. This risk is determined

by dividing profit before interest and taxes. Thus two variables involved in this risk are fixed

interest charges and net profit.

Interest coverage risk = net profit before interest and tax/interest on fixed loans or

debentures.

OBJECTIVES:

The objectives of this Risk are as under:-

1) It measures the margin of safety for the lenders.

2) Determines the over all efficiency of the business.

TABLE-2

Graph-3 Interest coverage RISK:-

years

company

2008 2009 2010 2011 2012


JK tyres 5.55 4.30 2.76 2.84 3.48

MRF tyres 3.50 3.34 3.91 3.91 2.27

8/10/2019 Rahul 123456 hjh

35/51

35

Points whether business would earn sufficient profits or not.

Interest coverage RISK=

N.P before interest and tax/int. on fixed loans.

JK is better as its interest coverage RISK is more.

MANAGEMENT and interpretation:-

The greater the interest coverage risk , the higher the ability of the firm to pay its Interest

expense. Thus in case of J.k tyres, it is more or less constant, declined in year2011-12 but

increased in 2012. Better sign for the company.

In case of M.R.F tyres, it is more or less constant but increased in 2012. A better sign for the

company.

In case of JK tyre, it is decresed till 2005 but increased in 2012.A better sign for the company to

pay its interest expenses. JK tyres is better company.

RISK-3

FIXED ASSETS TURNOVER RISK:-

This risk indicates the extent to which the investment in fixed assets contribute towards sales

If compared with previous years, it indicates whether the investment in fixed assets is

judicious or not. This can be calculated as under.

Fixed assets turnover risk = net sales/net fixed assets

Net fixed assets= fixed assets-depreciation

OBJECTIVES:-

8/10/2019 Rahul 123456 hjh

36/51

36

The objectives are as follows:-

1)indicates how efficiently fixed assets are used. If there is increase indicates improvement

in the utilization of fixed assets.

Management and interpretation:

Fixed assets turnover risk indicates the efficient utilization fo fixed assets. It indicates to whatextent fixed assets are contributing in gene risk of sales in case of J.K. tyres, fixed assets but

not increasing in increased pattern.

Fixed constant rate -This indicates efficient management of fixed asets.

In case of appolo tyre, fixed assets are decreased in year 2002 to 2005. but company has made

better performance in utilization of fixed assets in year 2012 and can be due to-

Graph-3 Fixed assets turnover RISK:-

indicates the extend to which investment in fixed assets contributes towards sales.

Fixed assets turnover risk =Net sales/Net assets

MRF is better as its fixed assets turnover is constantly increasing.

1) Better policies regarding fixed assets.

2) Better investment decision in fixed assets.

years

company

2008 2009 2010 2011 2012


JK tyres 2.94 2.74 2.51 2.45 2.70

MRF tyres 1.91 2.04 2.21 2.26 2.40

8/10/2019 Rahul 123456 hjh

37/51

37

This through the abover figures MRF tyre is better utilizing its fixed assets in a better way.

RISK-4

INVENTORY TURNOVER RISK OR STOCK TURNOVER RISK

This risk established relationship between the cost of goods sold during a given period and the

Average amount of inventory carried during that period. This is calculated as under:-

Stock turnover risk= cost of goods/ Average stock or inventory.

Cost of goods sold is calculated as :

Cost of goods sold= opening stock +purchases+ direct expenses- closing stock.

OR

Cost of goods sold= sales- Gross profit

Higher the risk, better it is. The risk shows better performance if it increases, since it means that

the investment in stocks is leading to higher sales.

OBJECTIVES:-

The significance and objectives of this risk are as under:-

1) Indicates whether stock is efficiently used or not.2) Enables the business to earn a reasonable margin of profits.

Management and interpretation

Inventory turnover risk indicates how quickly inventory is converted into sales. The higher

the inventory turnover risk, the better it is for the organization. In case of J.k tyre inventory

turn over risk is increased in year 2002 to 2005 but this risk is decreased in 2012.

This risk is more or less constant and is good enough.

years

company

2008 2009 2010 2011 2012


JK tyres 11.30 9.66 8.96 8.01 8.66

MRF tyres 6.21 6.68 6.67 6.64 7.57

8/10/2019 Rahul 123456 hjh

38/51

38

In case of MRF tyre, inventory turnover risk is more or less constant but is increasing. This

indicates that the company is performing well.

In case of appolo tyre, inventory turn over risk is in the pattern of decreasing and then in

increased pattern. Till 2005 it show decreasing pattern but 2012 it is increasing. This is mainly

due to-

1). Efficient utilization of stock.

2). J.k tyres is better as compared with others.

Graph-4 Inventory turnover RISK:-

Establishes relationship between costs of goods sold and average amount of

inventory carried during that perid.

Higher the risk better leads that investment in stock to higher sales.

Stock turnover risk = cost of goods sold/ average inventory.

J.k tyres is better as it has high inventory turn over risk.

RISK-5

8/10/2019 Rahul 123456 hjh

39/51

8/10/2019 Rahul 123456 hjh

40/51

40

Total assets turnover risk:-

It high lights the amount of assets that the firm used to generate its total sales. The ability to

generate a large volume of sales on a small assets base is an important part of the firms profitpicture, idle or improperly used assets increase a firmsneed for costly financing and the expensesfor maintenance and upkeep. By achieving a high assets turnover, a firm reduces cost and

increases the eventual profit of its owner.

Total assets turnover RISK = Total sales/ Average assets.

TABLE-6

MANAGEMENT and interpretation

In case of J.k tyres, total assets turn over risk is increasing theta is a better sign . this

increases results in profit of company. In case of MRF tyres, this risk is in increasing. In case

of Apollo tyres this risk is more or less constant decreased till 2005. but increased in 2012.

Graph -6 Total assets turnover RISK

High assets turnover reduces cost and increases profit. Total assets turnover risk =total sales/ average assets.

J.K is better as its total assets turnover is increasing continuously.

RISK-7

years

company

2008 2009 2010 2011 2012


JK tyres 3.19 2.74 2.52 2.40 2.54

MRF tyres 2.00 2.30 2.43 2.50 2.81

8/10/2019 Rahul 123456 hjh

41/51

41

GROSS PROFIT RISK:-

This risk establishes relationship of gross profit on sales to net sales of a firm. Its formula

is:-

Gross profit risk = gross profit/net sales 100

Net sales means gross sales (both cash and credit ) minus sales returns.

And fluctuations in this gross profit is the results of a change either in

SALES or the cost of goods sold or both. Thus this risk shows the average margin on goods

sold.

Objectives:

The objectives of gross profit are as under:

1) It helps to determine the selling price.

2) To determine, how much selling price per unit may decline without resulting

in losses of ope risk of the firms.

3) Gross profit risk when compared to earlier years, it significantly different is a

reason for the management to investigate the change.

MANAGEMENT and interpretation

G.p risk is a reliable guide to the adequacy of selling prices and efficiency of trading

activities higher the G.p risk declined in the year 2004 and 2005 but gradually increased in

2012 decrease may be mainly due to

1) Price of material has gone up and wages increased but selling price remained constant.

2) Decrease in selling price.

3) Closing stock undervalued.

4) Miss appropriation of goods and wastages.

years

company

2008 2009 2010 2011 2012


JK tyres 9.87 6.44 5.33 5.97 6.88

MRF tyres 9.39 7.33 5.94 4.26 4.91

8/10/2019 Rahul 123456 hjh

42/51

42

A higher gross profit is mainly due to revese reasons in case of MRF tyres, G.P. risk

decreased during till 2005 but increased in 2012. this is mainly due to frame of new policies

and better management efficiency.

In case of appolo tyres, this risk decreased till 2005 but J.K. increased later.

J.K tyres is better.

Graph-7

Gross profit RISK:

Net profit risk = net profit /net sales *100

JK and J.k tyres gross profit risk is good as it is increasing in 2005 and 2012 continuously.

RISK-8

NET PROFIT RISK:-

A risk of net profit to sales is called net profit risk. net profit is derived by deducting

administrative & marketing expenses, finance charges and making adjustments of non

operating expenses and income from the gross profit. This risk reveals the rate of net

profit to each sale.

Net profit risk = net profit/ net sales *100

Some time N.P risk is calculated in two ways. N.P is taken either as profit before tax and

profit after tax.

Net profit risk = profit before tax /net sales *100

8/10/2019 Rahul 123456 hjh

43/51

43

Net profit risk = profit after tax/ net sales *100

Objectives:

The objectives of this risk are as :

a. determine over all efficiency of the business.

b. Higher the net profit, better the business is .

c. Determines ope risk nal efficiency of the business.

Table-8


Net profit margin in case of J.K tyre is increased in 2011 but decreased in 2011-12but is

increase in 2012. this is more Or less constant. Decrease is mainly due to more other

charges such as administrative, marketing and other operating and operating expenses.

Increase is mainly due to reduction in tax liability and other expenses.

Graph-8

Net profit RISK:-

Net profit risk = net profit /net sales *100

JK is good as its net profit is increasing in 2011-12and in 2012 also.

years

company

2008 2009 2010 2011 2012


JK tyres 5.93 3.04 2.55 2.60 3.01

MRF tyres 3.57 2.68 1.84 0.75 1.16

8/10/2019 Rahul 123456 hjh

44/51

44

In case of JK tyre is net profit is decreased in 2004 but increased later. It is better sign for

the company.

In case of MRF tyre is net profit is decreased in 2005 but increased in 2012. this indicates

that company made efforts to reduce its other expenses.

JK tyre is better then others.

RISK-9

Operating profit risk:-

Operating profit risk establishes relationship between operating profit and net sales.

Operating profit is the net profit arising from the normal ope risk and activities of an

enterprise.

Operating profit is given by net profit before adjustments of non-operating income andexpenditure and finance charge. This risk can be calculated by the following formula:-

Operating profit risk:- operating profit /net sales 100

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

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

1) Indicator of open risk efficiencies of management as against the net profit which

reveals only overall efficiency

2) To measure the profitability and soundness of the business.

3) Higher the risk, the better is the profitability of business.


years

company

2008 2009 2010 2011 2012


JK tyres 11.68 7.82 7.15 7.89 8.86

MRF tyres 11.44 8.92 6.88 5.44 6.08

8/10/2019 Rahul 123456 hjh

45/51

45

This risk is indicator of operating risk efficiency of management. In case of J.K tyres,

operating profit risk is decreasing till 2005, but increased during 2012. this increase may be

better. Formulation of policies and reduction on non operating expenses.

In case of MRF tyres it is more or less constant and decreased till 2005 but increased in

2012.In case of appolo tyres operating profit risk decreased till 2012 & but increased later.J.k tyres is better.

GRAPH-9

OPERATING PROFIT RISK-

Establishes relationship between operating profit and net sales.

N.P arising from normal open RISK of business.

Operating profit RISK = operating profit /net sales 100 JK is good.

RISK-10

8/10/2019 Rahul 123456 hjh

46/51

46

Return on capital employed (R.O.I)

The net result of open risk of business is profit or loss. The sources used in business to

attain it are consisting of both proprietors fund & loans. The overall performances can be

judged by working out a risk between profit earned & capital employed. This risk can be

calculated as:-

Return on capital employed = profit before interest, tax and ratio / capital employed 100

Capital employedcan be calculated by any of the methods:-

Total of:- 1) Share capital (both preference and equity )

2) Reserves and

3) Long term loans.

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

1) Non operating assets like investments.

OR

Total of :- 1) fixed assets less depreciation and

2) Working capital that is C.A-C.L

objectives:

The objectives of this risk are as under :-

1) Determines overall efficiency and performance of the business.

2) Determines open risk efficiency of the business and performance of each

department.

8/10/2019 Rahul 123456 hjh

47/51

47

Table-10


In case of J.k tyres, this risk is decreasing till 2012. but later increased. This is mainly due to

better utilization of available resources and managerial efficiency of the company. It is a

better sign.

In case of MRF tyres ther is a constant increase and decrease. Till 2012 it is decreased but

increased in 2007. in case of appolo tyres it is same.

Appolo tyre is better as its R.O.I is higher as compared to other companies.

Graph-10

Returns on capital employed:-

Net result of every business is profit or less.

Returns on capital employed = profit before int, tax and ratio /capital employed

100

MRF is better.

years

company

2008 2009 2010 2011 2012


JK tyres 15.28 12.17 8.95 5.57 7.40

MRF tyres 32.18 16.30 12.65 13.14 17.56

8/10/2019 Rahul 123456 hjh

48/51

48

5 . FINDINGS

After taking the feedback of more than 100 customers the study reveals that customers are

fond of different brands in different areas. Like, in Guipure area almost 70% of customers

prefer BIRLA tyres (especially SAMSON), in Paginate areas customers prefer JK tyres, where

in Dunlop people prefer JK & APOLLO. Not only different choices but also having different

experience on different brands. It is found that many customers prefer JKs guaranteed tyres

such as JET TRAK 39 and economy class rib tyre VIKRANT TRACK KING for its milage &

reliability but it is also true that many other brands such as JET MILES, JET PACE, JET

SUPER LUG do not have a strong place in customers mind. The study shows that JKs strong

contender is APOLLO whos quality was appreciated by many. APOLLOs XT-7 & LOAD

STAR SUPER are very much preferred. In guaranteed tyres BIRLAs SAMSON is the main

contender of JK. Incase of normal loaded trucks customers mostly rely on CEAT but in over

load APOLLO & JK are reliable. Certainly MRF has not a good reputation at all.

8/10/2019 Rahul 123456 hjh

49/51

49

6. SUGGESTION

J.K. ORGANIZATION is a big and well known organization. The company has built a

committed pool of talented people with technological capability and market prowess backed

up by world class manufacturing facilities. In spite of organization. There are as follows:-

The production cycle is just little bit

longer, it has to be decreased.

Current RATIO of the company in

2007is comparison of year 2006 but it is not the satisfactory.

The production of J.K. Tyre has been

altering so many records but they have to increase their sales in

comparison of production, which is loss at present.

Gross profit is decreased in year 2007

it is not good indication for the company.

Current asset and current liabilities

both are increased gradually since year 2006 which increase Cash Flow,

Turnover so it has to be restricted.

8/10/2019 Rahul 123456 hjh

50/51

50

Company should maintain adequate

level of working capital which fulfilling the daily requirement of company.

Company should maintain proper

balance between the current assets & current liabilities.

CONCLUSION:

On the basis of the study about risk management in this company, we have concluded that

J.K. tyre is one of the most balanced and safely growing company. Keeping in mind various

risks for management during the whole study we reached on some milestone points such

as -

Return on capital employed risk is decreasing till 2012. but later increased. This is

mainly due to better utilization of available resources and managerial efficiency of the

company. It is a better sign while operating profit risk is decreasing till 2005, but increased

during 2012. This increase may be better. Formulation of policies and reduction on non

operating expenses.

Net profit margin in case of J.K tyre is increased in 2011 but decreased in 2011-12but is

increase in 2012. this is more Or less constant. Decrease is mainly due to more other

charges such as administrative, marketing and other operating and operating expenses.

Increase is mainly due to reduction in tax liability and other expenses. total assets turn over

risk is increasing theta is a better sign . this increases results in profit of company.

After going through each and every data I came to an come to an conclusion that J.K tyre

industries pvt. ltd. Is the best company in India when compared with other companies.

8/10/2019 Rahul 123456 hjh

51/51

Rahul 123456 hjh

Documents

Transcript of Rahul 123456 hjh