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					Fixed Assets Management

                            INTRODUCTION

      Finance is one the basic foundations of all kinds of economic
activities. It is the master key, which provides access to all the sources for
being employed in manufacturing. Hence it is rightly said that finance is
lifeblood of any enterprise, besides being the scarcest elements, it is also the
most indispensable requirement. Without finance neither any business can
be started nor successfully run. Provision of sufficient funds at the required
time is the key to success of concern. As matter of fact finance may be said
to be the circulatory system of economic body, making possible the needed
co-operation among many units of the activity.

FINANCIAL MANAGEMENT:

      Financial management emerged as a distinct field of study at the turn
of this Century. Many eminent persons defined it in the following ways.

DEFINITIONS:

      According to GUTHMANN AND DOUGHAL: “Business finance
can broadly be defined as the activity concerned with planning, rising,
controlling and administering of funds used in the business.”

      According to BONNEVILE AND DEWEY: “Financing consists in
the rising, providing and managing of all the money, capital or funds of any
kind to be used in connection with the business.”

      According to Prof. EZRA SOLOMAN: “Financial management is
concerned with the efficient use of any important economic resource,
namely capital funds.”




EAIMS                                                                              1
Fixed Assets Management

FINANCIAL FUNCTIONS:

      The finance functions of raising funds, investing them in assets and
distributing returns earned from assets to shareholders are respectively
known as financing, investment and dividend decisions. While performing
these functions, a firm attempts to balance cash inflows and outflows. This is
called as liquidity decision.

      The finance functions can be divided into three broad categories.

                  1.       Investment or long-term asset mix decision
                  2.       Financing or capital mix decision
                  3.       Dividend or profit allocation decision
                  4.       Liquidity or short-term asset mix decision

INVESTMENT DECISION:

      Investment or capital budgeting involves the decisions of allocation of
cash or commitment of funds to long-term assets, which would yield
benefits in future. It involves measurement of future profitability, which
involves risk, because of uncertain future. Investment proposal should
therefore be evaluated in terms of both expected return and risk. Other major
aspect of investment decision is the measurement of standard or hurdle rate
against which the expected return of new investment can be compared.




EAIMS                                                                            2
Fixed Assets Management

FINANCING DECISIONS:

      Financing decision is the second important function to be performed
by the fir. Broadly, he must decide when, where, and how to acquire funds
to meet the firms investment needs. He has to determine the proportion of
debt and equity. This mix of debt and equity is known as the firms ‘capital
structure’. The financial manager must strive to obtain the least financing
mix or the ‘optimum capital structure’ where the market value of share is
maximized.

DIVIDEND DECISIONS:

      It is the third major financial decision. The financial manager decides
whether the firm should distribute all profits, or return them, or distribute a
portion and return the balance. The optimum dividend policy should be
determined where is maximizes the markets value of the share.

LIQUIDITY DECISIONS:

      Current assets management, which affects firm’s liquidity, is yet
another finance function in addition to the management of long-term assets.
Current assets should be managed effectively safeguarding the firm against
the dangers of liquidity and insolvency.

      Investment in current assets affects the profitability, liquidity, and
risk. A conflict exists between profitability and liquidity while managing
current assets. If the firm doesn’t invest sufficient funds in current assets it
may. Become illiquid. But it could loose profitability, as idle CA would not
earn anything. Thus a proper takeoff must be achieved between profitability
and liquidity. In order to ensure that neither insufficient nor unnecessary
funds are invested in current assets.


EAIMS                                                                              3
Fixed Assets Management

GOALS OF FINANCIAL MANAGEMENT:

        Maximize the value of the firm to its equity shareholders. This
         means that       the Goals of the firm should be to maximize the
         market value of its equity shares (Which represent the value of
         the firm to its equity shareholders)
        Maximization of profit.
        Maximization of earnings per share.
        Maximization of return on equity (defined as equity
         earnings/net worth).
        Maintenance of liquid assets in the firm.

        Ensuring maximum operational efficiency through planning,
         directing and Controlling of the utilization of the funds i.e.,
         through the effective employment of funds.
        Enforcing financial discipline in the use of financial resources
         through the coordination of the operation of the various divisions
         in the organization.
        Building up of adequate reserves for financing growth and
         expansion.
        Ensuring a fair return to the shareholders on their investment.

 The key challenges for the finance manager in India appear to be in
 the following areas:

                 Investment Planning
                 Financial Structure
                 Treasure Operations
                 Foreign Exchange
                 Investor Communication
                 Management Control



EAIMS                                                                         4
Fixed Assets Management

                         INDUSTRY PROFILE

      Cement, the wonder material for binding stones and bricks, together

has contributed to the development of modern civilization in a number of

ways, due to which it is known as the builder of modern civilization. It is a

grayish powdered lime stones as the basic material, mixed with clay,

calculated to clinker; gypsum added ground to a powdered cement.


      In past historic times, lime stone was roasted in hot fire to have a

crude form of lime which when mixed with water formed mortar. The use of

burnt system and also lime dates back to the fix Egyptians. The Greek

civilization" used some form of mortal but Romans developed it. The

cement has thus form the very early era contributed to the advancement of

the civilization in general measure.


      When one speaks of cement today it invariably refers to Portland

cement only. Portland cement has its origin in England bud until 19 th century

mixture of limestone with possalona a type of volcanic earth was known as

cement. It was JOSEPH ASPDIN who in 1924 took out the first sample of

cement, being an improvement in the modes of producing artificial stone and

it came to bear the "Portland cement. The first cement factory was

established around 1890 by Jinn at both Canada and Australia, while it was

found in 1884 in New Zealand.




EAIMS                                                                            5
Fixed Assets Management

INTRODUCTION OF CEMENT

   The ninety years old Indian cement industry is one of the cardinal basic
infrastructure industries, which enjoys core sector status and plays a crucial
role in the economic development and growth of a country. Being a core
sector is industry was subject to price distribution controls almost
uninterruptedly from world war-II to 1982. When the government of India
announced the partial decontrol of prices and decontrol manufacturing
cement became increasingly attractive industry and the industry experienced
substantial expansion.

  The supply in respect to the 1982 partial decontrol was significant in
March 1989. price and distribution control were finally dispensed with. It
was one of the first major 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 which have the property of setting hardening under water the
amount of silica, aluminates which is present in each crust are sufficient to
combine with calcium oxide [CAO] to form the corresponding calcium
silicate and aluminates.

CLASSIFICATION OF CEMENT:

Cement has mainly classified in to three types. These are,

       A) Puzzolantic cement

       B) Natural cement

       C) Portland cement




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Fixed Assets Management

PUZZOLANTIC CEMENT:

      It is consist of silicates calcium and aluminum. It shown the hydraulic
properties, when it is in the form of powder and being mixed with suitable
proportion of lime. The rate hardening is much slower and comprehensive
strength developed is about a half of Portland cement. It is found more
resistant to the chemical action that others.

B. NARURAL CEMENT:

      This is natural occurring material. It is obtained form cement rocks.
These cement rocks are claying limestone containing silicates aluminates of
calcium. The selling property of this cement is more than the Portland
cement but is comprehensive strength is half of its.

C. PORTLAND CEMENT:

        Ordinary Portland cement
        Rapid hardening Portland cement
        Low heat cement
        White or colored cement
        Water proof Portland cement
        Portland slag cement
        Portland puzzolantic cement
        Sulphate resisting cement
        Oil well cement.




EAIMS                                                                           7
Fixed Assets Management

INDIAN CEMENT INDUSTIRY – PRESENT STATUS

      After the de-licensing of the industry in July, 1991 it reacted

positively to the policy changes. New capacities created and the volume of

the production increased.


      From a situation of importing cement, the country started exporting

due to high quality and effectiveness. After liberalization the black market

in cement also disappeared.


      Currently India stands second largest in the cement production world

wide after china. After India, Japan and USA stands third and fourth places

respectively. On the other hand India’s per capital consumption is only 100

kilograms. As compared to the world average 260 kilograms. The industry

has 59 companies 115 plants.


      In the matter of exports, the government considers cement as extreme

focuses are. How ever Indian cement in the global market is not very

competitive due to high power and full cost. In order to improve its position

in the international market, Technological up gradation is essential in terms

of process up gradation diversification costs reduction quality control and

energy savings.




EAIMS                                                                           8
Fixed Assets Management

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 change. This kind of analysis is particularly applicable to the
items of profit and loss account. It is advisable that trend of sales and net
income may be studies in the light of two factors.        The rate of fixed
expansion (or) secular trend in the growth of the business and the general
prier level. It might be found in practice that a number of firms would be
shown a persistent growth over period of time.

      But to get a true trend of growth, the sales figure should be adjusted
by a suitable index of general prices. In other words, sales figures should be
deleted for rising price level. Another method of securing trend of growth
and one which can be used instead of the adjusted sales figure or as check on
them is to tabulate and plot the out put 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 mislead management
they may become unduly optimistic in period of prosperity and pessimistic
in dual periods.

   For trend analysis, the use of index numbers is generally advocated the
procedure followed 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
the base year. The procedure may be called as “Fixed percentage method”.


EAIMS                                                                            9
Fixed Assets Management

      The margin determines the direction of upward and involves the
implementation of the percentage relationship of the each statement item
beans to same in the base year. Generally the first year is taken as the base
year. The figure for the trend ratio, base year taken as 100. And the other
years are calculated on the basis of first year. H ere an attempt is made to
known the growth total investment and fixed assets of LANCO
INDUSTRIES LTD for five years that is 2002 -2003 to 2006-2007.

         Finance may be defined as provision of the money at the time

where, it is required. Finance refers to the management flows of money

through an organization. It concerns with the application of skills in the

manipulation, use and control of money.          Different authorities have

interpreted the term “FINANCE” differently. 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

     rising of funds and to the study of financial institutions and

     instruments from where funds can be procured.

  2. Finance is being The second approach relates finance to cash.

  3. The third approach views concerned with rising of funds and their

     effective utilization.




EAIMS                                                                           10
Fixed Assets Management

DEFINITION OF FINANCIAL MANAGEMENT


      Financial management as practice by corporate firms can be called

corporation finance or business finance, financial management refers to that

part of the management activities which is concerned with the planning &

controlling of firms financial resources. It deals with finding out various

sources for raising funds for the firms. The sources must be4 suitable and

economical for the needs of the business. The most appropriate use of such

funds also forms a part of finance management.


FIANANCIAL OBJECTIVES OF MANAGEMENT


     Financial management is concerned with procurement and use of

funds. Its main aim is to use business funds in such a way that the firm’s

value\earning are maximized there are various alternatives available for

using business funds. The pros & cons of various decisions have to look

into before making a final selection. Financial management provides a

framework for selecting a proper cause if action and deciding a viable

commercial strategy. The main objective of a business is to maximize the

owner economic welfare. These objectives can be achieved by


     1. Profit Maximization and

     2. Wealth Maximization




EAIMS                                                                          11
Fixed Assets Management

      Cement Industry in India:


      Cement was produced for the first time in at Washermanpet in Madras

in 1904 by South India industries limited. This unit had an installed capacity

of 30 tones per day. Since the partial decontrol in 1989, the cement industry

has witness’s secular progress mainly due to the forces of economic

liberalization and the jettisoning of price controls and capacity restriction.


      The foundation of Stable Indian cement industry was in 1914. The

Indian cement company ltd. First manufacture cement at Porbundar in

Gujarat. At the end of the march 1988 there were 20 large cement units and

136 mini cement plants with a total installed capacity of 57 million tones and

actual production of 40 tones. Over two lakh persons are employed in the

industry. India is the 4tn largest cement producer in the world with 106 large

plants belonging to 34 companies. The per capital consumption of cement in

India however is one of the lowest in the world ranking i.e. 32 kgs per capita

in India (in year 1979) compared to 689kgs in Japan, 528kgs in West

Germany, 500 kgs in France and 483kgs in U.S.S.R.


      In 1936, all the cement companies with exception of song valley

Portland Company limited merged to form the associated cement companies

limited. This more facilitated cost reduction as well as uniformity in quality

by 1947 the installed capacity of the industry rose to 2.2 million tones per

annum.


EAIMS                                                                            12
Fixed Assets Management

Present Scenario of Cement Industry in India:


      The well developed Indian cement industry built almost totally on

domestic capital formation is modern, efficient and reasonably new and

today accounts for a total production of around one hundred million tones.

The industry is fully capable of meeting the needs of the country.


      In 1999-2000 the production of large plants was of the order of 94.fl

million tones as against 81.66 million tones in the previous years. The

capacity utilization of cement plants also increased to 85% in 1999-2'OOdas

against 78%'in the previous year.


      The cement industry witnessed a phenomenal demand growth of 15%

in fiscal year 1999-2000. However, the large scale capacity auditioned and

upgraded to the tune of around and up gradation to the tune of around 10.25

million tones in the last 2 years (4.40 million tones kin the south alone) led

to capacity demand mismatch. The coupled with intense competitive

pressures.


      Resulted in soft process in some areas and low prices in other regions

affecting the bottom line of industry.


      The year under review also saw an increased momentum in market

consolidation with major cement companies expanding their market share

through the acquisition route. In the current fiscal, growth has been lower


EAIMS                                                                            13
Fixed Assets Management

withy production in April-August 2000, being of the order of 40.09 million

tones a rise of only 3.62 as against 38.69 million tones in April-August

1999. A similar trend is noticeable in respect of cement dispatches grew by

3.66% to 39.90 million tones as against 38.49 tones in the previous year.

However, there has been over little additional/ new capacity increase and

this is a clear and visible signal that the capacity demand mismatch is slowly

coming to an end. With prices also firming up in the market, the cement

industry can hopefully look forward to better prospects in current fiscal.


      Over the next 2 to 3 years, with reasonable growth in demand to the

tune of around 7 to 9% sure to take place, in vies of the incentives granted to

housing and infrastructure, the ambitious plans of the Government boost

rural housing and kick start the National Highways development project, all

trace of capacity demand mismatch will vanish. As such, the overall outlook

of the cement industry is good in the future years.




EAIMS                                                                             14
Fixed Assets Management

                          COMPANY PROFILE

      LANCO Group is a fast growing and leading Indian industrial group
which has blazed a trial of success in civil engineering, pig iron and cement
surface transport. Shipping services and other areas of industrial activity.
S.V. Contractors, seaways shipping services limited, and lance industries are
all frontline companies in their respective fields of activity.

      M/s LANCO FERRO LTD., producing pig iron was established in the
1993 on June 9, at Rachagunneri. Srikalahasti Mandal, Chittor district. It
was renamed as M/s LANCO INDSTRIES limited in the year 1994 on
September 1st by his Excellency, Dr.S.D.Sharma, President of India when
the management stated the production of cement which is of a better quality
and grade.

The Challenge of Production:

      The production of high quality marks important chapter in the history
of construction. It is acknowledged as a development with far reaching
implications for the industry, to realize the full potential of adopt a new
perspective of the mechanics of construction.

      It needs to be recognized that superior quality cement has a positive
impact on every characteristic of building. In specific forms, it enhances
strength, increases dependability and effects greater economy. More, much
production 69.47 million tones during the year 1995-96. Out of this the
contribution of the large cement plans to capacity and production has been
88.23 MTP and 64.47 million tones respectively. Thus India continues to
enjoy the prestige of being the 4th largest cement produced in the world after
Japan, USA and China with 106 large plants belonging to 54 companies.


EAIMS                                                                            15
Fixed Assets Management

Particulars of the Cement Project:

      Lanco Industries Limited as setup a Portland Slag cement plant of
70,000 TPA capacity at Rachagunneri village, Srikalahasti mandal, Chittor
District in Andhra Pradesh. The cement plant utilizing as raw materials are
slag, coke and iron are tines being generated by the pig iron plant as by
product and waster. By ibis cement plant LIL adding values to by-
products/waste generated from pig iron in addition to solving the problem of
storing slag in the plant premises.

a.    Location and Land:

      The facilities to manufacture slag cement are located on 21 acres of
land adjacent to the existing pig iron plant of L1L. The site is about 30 km
from the temple town of TIRUPATI on state Highway No. 61 and is situated
between Renigunta and Srikalahasti.

b.    Plant and Machinery:

      The main plant and machinery installed are limestone crusher, a raw
mill system for blending and grinding iron ore, clay, limestone and coke
breeze, a vertical shift kiln, a cement mill for grinding slag, clinker and
gypsum and slag drying system.

Technology

      There are two technologies available for manufacture of clinker,
Vertical Shaft Kiln (VSK) and Rotary Shaft Kiln (RSK). LIL has chosen the
VSK technology for manufacture of clinker. The VSK technology is widely
popular through out the world.

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Fixed Assets Management

a.    Utilities

Power: The total demand of power for the cement plant is 1.3 MN. The
company already has a 11KV transmission line for its pig iron plant. It has
commissioned its 2.5 MW gas fired power plant which uses the blast furnace
gas from pig iron plant.

Water: The requirement of water for process and other general use is 301trs.
The company bore wells sunk at site and also has a reservoir with a capacity
to hold one month’s requirement of water.

Manufacturing Process of Cement:

Wet Process:

      The lime stones has to be crushed to mutable size (below 25mm on
the largest dimension) before actual treatment can take place clay may often
a good deal of moisture it has the proper of being was able which means that
which Subjects to powerful in chemical action. It can be mixed to slurry
with water.

      The crusher lime stone and the clay slurry are fed in the proper mix
proposition to a raw meal and ground a very high fitness, generally indicated
by the percentage of ground material which will pass a sieve with 4900
meshes per square centimeters. The product leaving the raw meal contains
about 35% of water. It is very important for the quality of cement that the
chemical composition of the slurry various only with in narrow limit.

      The preparation of the slurry calls for constant supervision by the
works laboratory and samples are drawn regularly for analysis. From mixing

EAIMS                                                                           17
Fixed Assets Management

silos, the finished slurry is taken to a storage basin called slurry basin. From
the slurry takes place, the kiln is along rotary mild steel cylinder with a
lining of refractory bricks.

      It is creates with a slight inclination to the horizontal causing the
material which is fed as the lopper end to move slowly down to the outlet of
the kiln in tired by means of flame of burring coal dust or gas. To be with a
just evaporation of waste contained in the Landry takes place in the upper of
the kiln causes a gradual transformation of the fried masses into small balls.
There after the temperature rises further to about 8000 degrees centigrade
where the carbon dioxide found in the limestone is expelled.

      The cooled clinker is transported either to a store or directly to mill in
which it is ground with the addition of small amount of gypsum. The
finished product is cement.

Dry Process:

      In the dry process no water is added to the raw materials. The
materials are grounded in the dry state and the dry ground "RAW
MATERIALS" is taken sailor in which it is homogenized so that minor
inaccuracies in compassion are evened out through which the raw meal is
passed directly to the kiln.

      In the dry process the heat loses is voided which occurs in the sent
process because the water content of the slurry will first have to be
evaporated. In the homogenization the raw material is more difficult.




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Fixed Assets Management

Requirements for the Conversion of Wet to Dry process:

                   ITEM                        WET         DRY

 Heat consumption(k.cal/kg.cl inker)       1300-1600     750-850

 Power consumption(k.wh/tone of cement)    110-115       120-125


Varieties of Cement:

There are a large number of varieties in cement. Some of them are
mentioned here.

   Ordinary Portland Cement(OPC)
   Portland Slag Cement(PSC)
   Portland Pozzadana Cement(PPC)
   Sulphate Resistance Cement(SRC)
   Quick Setting Cement(QSC)
   Rapid Hardening Cement(RHG)
   Low Heat Cement(LHC)
   Masonry Cement
   High Strength Cement
   High Alumina Cement




EAIMS                                                               19
Fixed Assets Management

   Lanco cements can boast of incorporating closed circuit cement mill with

Dynamic-Separators, where the slag is ground to a uniform practical size of

optimum fineness- which contributes to the ultimate strength of the cement.

But it's not enough to have the best slag and the best clinker.


      The place where these made blend to give the best Portland Slag

Cement where technology plays major role in the ultimate quality of the

product. Fuzzy logic, a computerized process control system monitors kiln

operation 24 hours a day and ensures uniform control of the feed rate, thus

avoiding human errors. The result is reliable consistency, bag after bag, of

Lanco Cement.


      Today, more and more people are changing over to slag cement all

over the world especially in building of dams, bridges, docks, harbour,

coastal constructions.


      Industrial coastal constructions, industrial effluent treatment plant,

aquarium tank ponds, cooling towers, chimneys and in industrial townships,

residential like columns RCC slabs, plastering.




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Fixed Assets Management


   S.NO           PERFORMANCE               OPC            PSC
     1.     Rate of development            Medium         Medium


     2.     Rate of heat Evolution         Medium          Low


            Inherent resistance to
     3.     Chemical Attack


            a. Sulphate                     Low        Medium-High


            b. Chloride                     Low          Very high


            c. Weak acid                    Low        Medium-High


            d. Percolation water            Low           Medium


            e. Decaying organic matter      Low            High



OPC = Ordinary Portland cement

PSC = Portland slag cement

     The cement that is all to revolutionize our modern construction
methods and concepts.




EAIMS                                                                  21
Fixed Assets Management

Portland Slag Cement:

      Until recently, there was very limited scope for specifying cement. At
best only the type of cement could be chosen- DPC, PPC, PC, and SHOPC.

       Things however, have now changed. Now there is choices even in a
particular type of cement take for instance, Portland cement or pc some
brands list meet minimum IS a specification. Others surpass the minimum
standards. A few others not only possess high quality features but also have
done consistently. All appropriate choice could be made depending upon the
specific requirement. Generally, the better the quality of the cement, the
more durable is the concrete structure.

Construction will also be faster:

High quality cement also means lower construction cost, resulting from
lower consumption of cement per cubic meter of concrete.

       Some time ago,      ISI carried out experiments with the various
qualities of PC being, manufactured in the country and classified them in to
six grades A to F depending upon the 28 days strength as follows.

28 days strength as follows:

      A= (325-375 kg/cm=2)

      B= (375-425 kg/cm=2)

      C= (425-525 kg/cm=2)

      D= (475-525 kg/cm=2)

      E= (525-575 kg/cm=2)

      F= (575-625 kg/cm=2)



EAIMS                                                                          22
Fixed Assets Management

(Extract from IS: 10262-1982 recommended Guidelines for concrete mix
design cement tested according to IS 4031-1968).

      'A' quality refers to the cement which meets the minimum IS
specification i.e., 28 days strength of 330kg/cm. Better quality cements fall
into higher categories e.g. Lance cement normally falls in categories D or E.

      Slag cement is widely accepted building material through out the
world. The manufacture of slag cement was started for more than 120 years
ago in developed countries like West Germany.

      In India ACC commenced production of slag cement in 1961 for the
first time Presently there are number of units producing slag cement in India
namely ACCJK Cement, Orissa Cement. L&T. Modi Cement industry etc.,
and now LANCO INDUSTRIES LIMITED with their premier brand
LANCO CEMENT.




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Fixed Assets Management

                            PRODUCT PROFILE

        Slag is a bye-product obtained from the blast furnace in the
manufacture of steel.

Slag Cement:

        Lanco Portland slag cement is similar to OPC. The product has
properties similar to those OPC and in addition, more resistant to soils and
water containing excess of acid or sulphate of Alkali metals like Alumina
and Irony, as well as to acidic water and can therefore be used for marine
works with advantage.

                  PSC                                      OPC

Portland slag cement long lasts          Normal Portland cement lacks this
hence

Due to higher compaction which           Structures built out of normal
Portland

Is mainly due to the presence of blast   Cement tend to disintegrate faster
furnace slag


Characteristics of Portland Slag Cement:

    High compressive strength
    Faster gain of Strength
    Consistency of these features



EAIMS                                                                          24
Fixed Assets Management

   Consistency is important to ensure that every batch of cement produced
is uniformly of the same high quality.

   It is equally important to understand what it takes to produce high quality
cement.

   It is not only need good quality raw material but also a modern
sophisticated plant with advanced quality control systems.

   Lanco cement plant at Rachagunneri Village near Tirupati, Srikalahasti
Mandal. Chittoor Dist., A.P. has been producing Portland slag cement from
January 1996 onwards.

Advantages of Portland Slag Cement Compared to Ordinary Portland
cement:

           PSC is the cement for all general civil constructions.
           PSC has advantage of higher strength in long ages. The strength
            surpasses that of OPC produced from the same clinker at later
            ages.
           The water tightness of concrete prepared with PSC is superior
            due to lower pore diameter and uniform pore size.
           The utility drying prepared with PSC is lower than that of OPC.
           The concrete prepared with PSC is superior in resistibility, to
            sea water this has been established by number of long period of
            exposure tests.
           The heat of hydration of PSC is much lower; hence it is
            desirable for mass concrete.
           PSC has higher dimensional stability.


EAIMS                                                                            25
Fixed Assets Management

           PSC is the best suited for construction work at rivers, ports and
            harbors. Hot sprains and sewer, for protection such as blocks
            and tetra pods.
           Savings in construction costs like savings in cement, savings in
            shuttering and props, savings in cement, savings in construction
            time. Higher workability in fresh concrete, improved durability.
           It applied at design state. PSC can achieve substantial savings in
                a. Concrete
                b. Cement
                c. Reinforcing steel
                d. Shuttering and props
                e. Finishers/rendering/painting
                f. Manpower
                g. Construction time
                h. Slick, elegant construction with better aesthetics
                i. Increased floor space
                j. More durable construction

     PSC offers better workability in concrete. Further, for higher grades of
      concrete, PSC becomes indispensable.
     In views of the above advantages the slag cement can due used for
      following:
     All types of general civil works, like columns, RCC, Slabs, plastering
      etc.
     General Architectural works
     Industrial users
     Water retaining and water tights structure
     Whether mild sulphate resistance is required.

      You've heard about talk that slag cement can do and you have already
convinced that this wonder cement is the right choice of your construction.


EAIMS                                                                            26
Fixed Assets Management




      Brand, there's more than one good reason that the right choice should
be PSC from Lanco cement.

      The very components that go into the making at slag cement the
expertise combined with high technology and professional management. For
instance- the calcareous type Limestone originates from our own
sedimentary deposits and be used after strenuous quality control.

a)    High grade imported, coke breeze which is a bye-product from our
      steel plant (L1L).
b)    High purity iron or from our steel plant as reducing agent.
c)    Clinkers from one of the most modern, automated, computer
      controlled plant with the state-of-the-art technology and clawless
      quality.
d)    Best of all the granulated slag from our prestigious steel plant (L1L).
e)    Uninterrupted supply of power and advanced quality control system.




EAIMS                                                                           27
Fixed Assets Management

                      REVIEW OF LITERATURE

Fixed Asset
      A long-term tangible piece of property that a firm owns and uses in
the production of its income and is not expected to be consumed or
converted into cash any sooner than at least one year's time.
Notes:
      Buildings, real estate, equipment and furniture are good examples of
fixed assets. Fixed assets are sometimes collectively referred to as 'plant'.
      Generally intangible long-term assets, such as trademarks and patents,
are not categorized as fixed assets but more specifically referred to as "fixed
intangible assets'.
      Long-lived 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
equipment. Intangible fixed assets include patents, trademarks, and customer
recognition.
Fixed asset
      An asset not readily convertible to cash that is used in the normal
course of business. Examples of fixed assets include machinery, buildings,
and fixtures. A firm whose total assets are made up primarily of fixed assets
is in a less liquid financial position, thus entailing greater risk of a big
tumble in profits if its revenues fall.
Fixed assets management
      Search Fixed assets management is an accounting process that seeks
to track fixed assets for the purposes of financial accounting, preventive
maintenance, and theft deterrence.



EAIMS                                                                             28
Fixed Assets Management

A typical asset tag
      Many organizations face a significant challenge to track the location,
quantity, condition, and maintenance and depreciation status of their fixed
assets. A popular approach to tracking fixed assets utilizes serial numbered
Asset Tags, often with bar codes for easy and accurate reading. Periodically,
the owner of the assets can take inventory with a mobile barcode reader and
then produce a report. Off-the-shelf software packages for fixed asset
management are marketed to businesses small and large.
      Some Enterprise Resource Planning systems are available with fixed
assets modules.
      Some tracking methods automate the process, such as by using fixed
scanners to read bar codes on railway freight cars or by attaching a radio-
frequency identification (RFID) tag to an asset.
Fixed Asset Tracking Software
      Tracking assets is an important concern of every company, regardless
of size Fixed assets are defined as any 'permanent' object that a business uses
internally including but not limited to computers, tools, software, or office
equipment.]While employees may utilize a specific tool or tools, the asset
ultimately belongs to the company and gaust be returned. And therefore
without an accurate method of keeping track of these assets it would be very
easy for a company to lose control of them.
      With advancements in technology, asset tracking software is now
available that will help any size business track valuable assets such as
equipment and supplies. According to a study issued in December, 2005 by
the ARC Advisory Group, the worldwide market for Enterprise Asset
Management (EAM) was then at an estimated $2.2 billion and was expected
to grow at abdut 5.0 percent per year reaching $2.8 billion in 2010.

EAIMS                                                                             29
Fixed Assets Management

      Asset tracking software allows companies to track what assets it
owns, where each is located, who has it, when it was checked out, when it is
due for return, when it is scheduled for maintenance, and the cost and
depreciation of each asset.
      The reporting option that is built into most asset tracking solutions
provides pre-built reports, including assets by category and department,
check-in/check-out, net book value of assets, assets past due, audit history,
and transactions.
      All of this information is captured in one program and can be used on
PCs as well as mobile devices. As a result, companies reduce expenses
through loss prevention and improved equipment maintenance. They
Fixed Asset Tracking Software
      Tracking assets is an important concern of every company, regardless
of size. Fixed assets are defined as any 'permanent' object that a business
uses internally including but not limited to computers, tools, software, or
office equipment. While employees may utilize a specific tool or tools, the
asset ultimately belongs to the company and must be returned. And therefore
without an accurate method of keeping track of these assets it would be very
easy for a company to lose control of them.
      With advancements in technology, asset tracking software is now
available that will help any size business track valuable assets such as
equipment and supplies. According to a study issued in December, 2005 by
the ARC Advisory Group, the worldwide market for Enterprise Asset
Management (EAM) was then at an estimated $2.2 billion and was expected
to grow at about 5.0 percent per year reaching $2.8 billion in 2010.




EAIMS                                                                           30
Fixed Assets Management

       Asset tracking software allows companies to track what assets it
owns, where each is located, who has it, when it was checked out, when it is
due for return, when it is scheduled for maintenance, and the cost and
depreciation of each asset.
       The reporting option that is built into most asset tracking solutions
provides pre-built reports, including assets by category and department,
check-in/check-out, net book value of assets, assets past due, audit history,
and transactions.
       All of this information is captured in one program and can be used on
PCs as well as mobile devices. As a result, companies reduce expenses
through loss prevention and improved equipment maintenance. They reduce
new and unnecessary equipment purchases, and they can more accurately
calculate taxes based on depreciation schedules.
The most commonly tracked assets are:
    Office Equipment
      Evidence
    Medical Equipment
      IT Equipment, for example laptops.
      Vehicles
      Files
      Maintenance supplies
      Educational materials
      Software licenses
    Videos
    Tools




EAIMS                                                                           31
Fixed Assets Management


MANAGEMENT OF FIXED ASSETS

   The selection of various fixed assets required creating the desired
production facilities and the decision regards the determination of the level
of fixed assets is primarily the task that at the production technical people.
The decision relating to fixed assets involves 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, the management of fixed
assets is of vital importance to any organization.

   The process of fixed asset management involves:

  (i)      Selection of most worthy projects or alternative of fixed assets.
  (ii)     Arranging the requisite funds\capital for the same.

    The first important consideration to be acquire to be 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 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.

         The third aspect of fixed assets management is that a firm must ensure
buffer stocks of certain essential equipment\services to ensure uninterrupted
production in this event of emergencies.          Sometime, there may be a
breakdown in some equipment or services affecting the entire production. It



EAIMS                                                                             32
Fixed Assets Management

is always better to have some alternative arrangements to deal with such
situations. But at the same time the cost of carrying such buffer 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.

FIXED ASSETS

      Fixed assets are those assets 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 not meant for release 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. Land and buildings,
plant and machinery, motor vans, furniture and fixtures are some examples
of these assets.

   Financial transactions are recorded in the books keeping in going concern
aspect of the business unit. It is assumed the business unit has a reasonable
expectation of continuing business at a profit for indefinite period of time. It
will continue to operate in the future. This assumption provides much of the
justification for recording fixed assets at original coat and depreciating them
in a systematic manner without reference to their current realizable value if
there are no immediate expectations of selling them. Fixed resale, so they
are shown at their book values (i.e. cost less depreciation provided) and not
at their current realizable values.




EAIMS                                                                              33
Fixed Assets Management

  The market value of a fixed asset may change with the passage of time,
but for accounting purpose it continues to be shown in the books at its book
value, i.e. the at which it was purchased minus depreciation proved values.

      The cost concept of accounting, depreciation calculated on the basis
of historical costs of old assets is usually lower than that of those calculated
at current value r replacement value. This results in more profits on paper
which, if distributed in full, will lead to reduction of capital.

NEED AND IMPORTNACE FOR VALUATION OF FIXED ASSETS

      Valuation of fixed assets is important in order to have fair measure of
profit or loss and financial position of the concern.

   Fixed assets are meant for use for many years. The value of fixed assets
decrease with their use or with time or for other reasons. A portion of fixed
assets reduced by use is concerted into cash though charging depreciation.
For correct measurement of income proper measurement of depreciation is
essential. As depreciation constitutes a part of the total cost of production.

   Fixed assets are the asset 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
nor indirectly the survival and other objective of the company purely
depends on operating performance of management in effective utilization of
there assets.

   Firm has evaluate the performance of fixed assets with proportion of
capital employee on net assets turnover and other parameters which is
helpful for evaluating the performance of fixed assets.

EAIMS                                                                              34
Fixed Assets Management




                          RESEARCH DESIGN

Need for the study

   To study for the known about fixed assets analysis and other areas
     accounting, corporate, marketing and financial matters.

   To study are the known about fixed assets position and performance of the
     company.

   To study to know about the investments of the company.
   To study know about the financial position of the company.
   To study for the known the amount of finance made by long term liabilities
     and owner funds towards fixed assets.




EAIMS                                                                            35
Fixed Assets Management

                       SCOPE OF THE STUDY

        The project is covered of fixed assets of Lanco Industries Ltd

     drawn from annual report of the company. The fixed assets considered

     in the project are which can be converted into cash with one year?

     Ratio analysis is used for evaluating fixed assets performance of Lanco

     Industries Ltd.


        The subject matter is limited to fixed assets it analysis and its

     performance but not any other areas of accounting, corporate,

     marketing and financial matters.




EAIMS                                                                          36
Fixed Assets Management

                  OBJECTIVES OF THE STUDY


   The study is conducted to evaluated fixed assets performance of

     LANCO INDUSTRIES LTD.

   The study is conducted to evaluate the fixed assets turnover of

     LANCO INDUSTRIES LTD.

   The study is made to known the amount of capital expenditure made

     by the company during study period.

   The study is conducted to known the amount of finance made by long

     term liabilities and owner funds towards fixed assets.

   Study is conducted to evaluate that if fixed assets are liquidated.

     What is the proportion of fixed assets amount will contribute for

     payment of owner funds and long term liabilities.

   The study is evaluate is giving adequate return to the company.




EAIMS                                                                     37
Fixed Assets Management

                  RESEARCH METHODOLOGY

   The data gathering method is adopted purely from secondary sources.
The theoretical content is gathered from eminent texts books and reference
and library at LANCO INDUSTRIES LTD.

   The financial data and information is gathered from annual reports of the
company internal records.

   Interpretation, conclusions and suggestions are purely based on my
option and suggestions provided by the project guide.

   The data used for analysis and interpretation from annual reports of the
company that is secondary form of data.         Ratio analysis is used for
calculation on purpose.

   The project is presented by using table, graphs and with their
interpretations. No survey is undertaken or observation study is conducted in
evaluating “FIXED ASSETS” performance of LANCO INDUSTRIES LTD.




EAIMS                                                                           38
Fixed Assets Management




                   LIMITATIONS OF THE STUDY

   The study period of forty five days as prescribed by SRI

     VENKATESWARA UNIVERSITY.

   The study is limited up to the data and information provided by

     LANCO INDUSTRIES LTD and its annual reports.

   The report will not provide exact fixed assets status position in Lance

     cement; it may vary from time to time and situation to situation.

   This report is not helpful in investing in LANCO CEMENT

     INDUSTRIES LTD either through disinvestments or capital market.

   The accounting procedure and other accounting principles are limited

     by the company

   Changes in them may vary the fixed assets performance.




EAIMS                                                                         39
Fixed Assets Management

          DATAS ALAYASIS AND INTERPRETATIONS

   After the de-licensing of the industry in July 1991 it is reacted positively
to the policy changes. New capacities created and the volume of the
production increased.

   From a situation of importing cement, the country started exporting due
to high quality and effectiveness. After liberalization the blackmasekrt in
cement also disappeared.

   Currently India stands second largest in the cement production world
wide after China.

   After India, Japan and USA stands third and fourth places respectively.
On the other hand India’s per capital consumption is only 100 kilograms. As
compared to the world average 260kg. The industry has 59 companies 115
plants.

   In the matter 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 cost. In over to improve its position
in the international market, technological up gradations essential in terms of
process up gradation diversification costs reduction quality control and
energy savings.

Trend Analysis

   In financial analysis the direction of changes over a period of years is of
initial importance. Time series of trend analysis of ratios indicators the
direction of change. This kind of analysis is particularly applicable to the

EAIMS                                                                             40
Fixed Assets Management

times of profit and loss account. It is advisable that trend of sales and net
income may be studies in the light of two factors. The rare of fixed
expansion or secular trend in the growth of the business and the general prier
level. It might be found in practice that a number of firms would be shown a
persisted growth over period of time. But to get a true trend of growth, the
sales figure should be adjusted by a suitable index of general prices. In other
words, sales figures should be adjusted by a suitable index of general prices.
In other words, sales figures should be deleted for rising price level. Another
method of securing trend of growth and one which can be used instead of the
adjusted of the adjusts sales figure or as check on them is to tabulate and plot
the output or physical volume of the sales expressed in suitable units of
measures.

       If the general price level is not considered while analyzing trend of
growth, it can be mislead management they may become unduly optimistic
in period of posterity and pessimistic in dual periods.

      For trend analysis the use of incest number is generally advocated the
procedure followed is to assign the number 100 to times base yeast and at
calculate percentage change in each items of other years in relation to the
base year. The procedure may be called as “Fixed percentage method”.

   The margin determinates the direction of upward and involves the
implementation the percentage relationsh9ip of the each statement item
beans to same in the base year. Generally the first year is taken as the base
year. The figure for the trend radio, base year taken as 100. An order is
calculated on the basis of first year. Here attempt is made to known the
growth total investment and fixed assets of LANCO INDUSTRIES LTD
for five years that is 2002-03 to 2007-2008.



EAIMS                                                                              41
Fixed Assets Management




        Year           Investment (Rs.in lakhs)          Trend Percentage
     2006-07                   589.35                          100
     2007-08                      ---                           0
     2008-09                      ---                           0
     2009-10                      ---                           0
     2010-11                      ---                           0




INTERPRETATION:

   From the analysis of the above table to can be observed that the growth rate of
total investment of LANCO INDUSTRTIES LTD is in down trend which shows
table of the LANCO CEMENT INDUSTRIES in total investment is decreasing
from time to time during the year 2006-2007 is was recorded 100. But it is
decreasing in the year 2007-08, 2008-09 and 2009-2008.




EAIMS                                                                                42
Fixed Assets Management

                      GROWTH RATE OF FIXED ASSETS

                                       TABLE II

        YEARS           FIXED ASSETS (Rs. In Lakhs)                PERCENTAGE
       2006-2007                     18525.70                          100
       2007-2008                     24158.08                         165.41
       2008-2009                     26388.35                         180.68
       2009-2010                     28239.98                         193.39
       2010-2011                     30165.63                         206.55

                                       GRAPH


                         GROWTH RATE OF FIXED ASSETS
         250


         200


         150

                                                                     PERCENTAGE
         100


          50


           0
               2006-2007 2007-2008 2008-2009 2009-2010 2010-2011



INTERPRETATION

   Growth rates in fixes assets the examination of the above results analysis and
interpretation.

   During the year 2006-2007 the assets increment was recovered at 14604.33
lacks and it is increased to Rs. 26388.35 lacks in 2009-2010 the fixed assets



EAIMS                                                                               43
Fixed Assets Management

ingredient is quite satisfactory. The trend percentage in the year 2006-2007 is
taken at as the base year as 100%.

RATIO ANALYSIS

    Ratio analysis is a powerful tool of financial analysis. A ratio is defined
as “The Indicated quotient of two mathematical expression” and as “The
relationship between for evaluating the financial position and performance
of firm”. The absolute accounting figure reported in financial statement do
not private of a firm. An accounting figure when it is related to some other
relevant information.

    Ratio help to summarize large quantities of financial data and to make
qualitative judgment about he firm’s financial performance.

   1. FIXED ASSETS TO NET WORTH RATIO:

  This is ratio establishes the relationship between fixed assets and net
worth.

  Net worth = share capital +Reserves & Surplus

                                         Fixed assets

  Fixed assets to net worth ratio = --------------------------X 100

                                         Net worth

      This ratio of “Fixed Assets” to “Net worth” indicates the exte3nt to
which share holder funds are sunk into the fixed assets. Generally, the
purchase of fixed assets should be financed by share holders, equity in
lading reserves and surplus and retained earnings. If the ratio is less than


EAIMS                                                                             44
Fixed Assets Management

100% it impels than owners funds are more than total fixed assets and a part
of the working capital is provided by the shareholders. When the ratio is
more than 100% it implies that owner’s funds are not sufficient to finance
the fixed assets and the finance has to depend upon outsiders to finance the
fixed assets. There is no “rule of thumb” to interpret this ratio but 60% it
65% us considered to be satisfactory ratio in case industrial undertaking.

   1. FIXED ASSETS RATIO:

          This ratio explains whether the firm has raised adequate long-term
      funds to meet its fixed assts requirement and is calculated as under.

                                    Fixed assets (after depreciation)

          Fixed assets ratio = ----------------------------------------------

                                       Long term funds

 The measure the relationship between fixed assets and the funded debt and
is very useful to the long term creditors.

   2. FIXED      ASSETS        AS     A   PERCENTAGE             TO     CURRENT
      LIABILITIES:

   The ratio measures the relationship between fixed assets and the funded
debt and is a very useful to the long term creation. The ratio can be
calculated as below.

                                                            Fixed assets

   Fixed assets as a percentage to current liabilities = -----------------------

                                                             Current liabilities


EAIMS                                                                              45
Fixed Assets Management


3. TOTAL INVESTMENT TURNOVER RATIO:

    The ratio is calculated by dividend the net sales by the value of total
assets that is (net sales/total investment) or (sales/total investment). A high
ratio is an indicator of over trading of total assets while a low reveals idle
capacity. The traditional standard for the ratio is two times.

4. FIXED RATIO TURN OVER RATIO:

    This ratio expresses the number of time fixed assets are being turned
over is a state period. It is calculated as under.

                                          Sales

    Fixed Assets Turnover Ratio= ------------------------------------------

                                    Net fixed assets (after depreciation)

    This ratio shows low well the fixed assets are being uses in the business.
The ratio is important incase of manufacturing concern because sales are
produced not only by use of current assets but also by amount invested in
fixed assets the higher ratio, the better the performance. On the other hand a
low ratio indicated that fixed assets are not being efficiently utilized.

5. GROSS CPITAL EMPLOYED:

    The term “Gross Capital Employed” usually comprises the total assets,
fixed as well as current assets used in a business.

    Gross Capital Employed = Fixed +Current Assets




EAIMS                                                                             46
Fixed Assets Management

6. RETURN ON FIXED ASSETS:

                             Profit after tax

    Return on fixed assets = ----------------------X100

                              Fixed assets

    The ratio is calculated to measures the profit after tax against the amount
invested in total assets to ascertain whether assets are being utilized properly
or not. The higher the ratio better it is for the concern.




EAIMS                                                                              47
Fixed Assets Management

1. FIXED ASSETS TO NET WORTH RATIO:

   This is ratio established the relationship between fixed assets and net
worth.

Net worth = Share Capital + Reserves & surplus

                                        Fixed assets

   Fixed assets to net worth ratio= ----------------------------X100

                                         Net worth

                                    TABLE III

         YEARS GROSS                 FIXED NET WORTH RATIO
                   ASSETS
                                            (Rs. In lakhs)
                   (Rs. In lakhs)
         2006-07          18525.70              7869.46        235.41
         2007-08          24158.08              9058.00        266.70
         2008-09          26388.35              11155.00       236.56
         2009-10          28239.98              12526.13       225.44
         2010-11          30165.63              17653.91       170.87




EAIMS                                                                        48
Fixed Assets Management


                                       Graph


                       FIXED ASSETS TO NET WORTH RATIO
      300

      250

      200

      150
                                                                  RATIO
      100

       50

        0
             2006-07      2007-08   2008-09   2009-10   2010-11




INTERPRETATION

   The gross fixed net worth ratio is fluctuating from year to year in the
year 2006-07 the gross fixed assets to net worth ratio is 232.45% in the year
2008-09 the fixed assets net worth ratio to acquire the ratio is 275.28 and in
the year 2009-2010 is the ratio is




EAIMS                                                                            49
Fixed Assets Management

2. FIXED ASSETS RATIO

   The ratio explains whether the firm has raised adequate long term funds
to meet its fixed assets requirement and is calculated as under.

                                 Fixed assets (after depreciation)

   FIXED ASSETS RATIO = ------------------------------------------------

                                    Long term funds

   The measures the relationship between fixed assets and the funded debt
and is very useful to the long term creditors.

                                TABLE – IV

YEARS       FIXED ASSETS            LONG TERM FUNDS                  RATIO
            (Rs. In lacks)
2006-07            18585.70                      7969.72              232.42
2007-08            21458.08                      9085.00              265.09
2008-09            26388.38                      9586.00              285.08
2009-10            28239.98                      12526.13             225.44
2010-11            30165.63                      21140.61             142.69




EAIMS                                                                          50
Fixed Assets Management

                                   GRAPH


                            FIXED ASSETS RATIO
        300

        250

        200

        150
                                                                  RATIO
        100

         50

          0
              2006-07   2007-08   2008-09   2009-10   2010-11




INTERPRETATION

   Fixes assets as at longer liabilities ratio is functioning from year to year
fixed assets as a long liabilities was recorded at 439.07 in the year 2002-03
and it is recorder at 180.70 in the year 2004-05.

   The higher ratio is recorded at 285.08 in the year 2007-08 the lowest
recorded at 43.90 in the year 2002-03.




EAIMS                                                                             51
Fixed Assets Management

FIXED ASSETS AS A PERCENTAGE TO CURRENT LIABILITIES

   The ratio measures the relationship between fixed and the funded debt
and is a very useful to the long term creation. The ratio can be calculated as
below.

                                                           Fixed assets

   Fixed assets as a percentage to current liabilities = ---------------------------
                                                        Current liabilities



                                  TABLE – V

YEAR         FIXED ASSETS             CURRENT                        RATIO
             (Rs. In lacks)           LIABILITIES
                                      (Rs. In lacks)
2006-2007           18525.70                     9556.53                  1.93
2007-2008           24158.08                    10776.59                  2.24
2008-2009           26388.35                    10030.68                  2.63
  2009-10           28239.98                    10883.33                  2.59
  2010-11           30165.63                    16923.88                  1.78




EAIMS                                                                                  52
Fixed Assets Management


                                        GRAPH



                 FIXED ASSETS AS A PERCENTAGE TO CURRENT
                                 LIABILITIES
         3

        2.5

         2

        1.5
                                                                      RATIO
         1

        0.5

         0
              2006-2007   2007-2008   2008-2009   2009-10   2010-11




INTERPRETATION:

          1. The ratio was fluctuating trend % in review period time.
          2. From the above it is observed that the ratio was recorded at
              1.502 in the year 2002-03 it is gradually changing at 2.24 in
              year 2006-2007 which indicate that the current funds re used in
              the fixed assets which’s quite satisfactory.
          3. The highest ratio was recorded at 2.24 which are higher than the
              average ratio.
          4. The lowest ratio was recorded at 1.502 is less than the average
              ratio.




EAIMS                                                                           53
Fixed Assets Management




FIXED ASSETS TURNOVER RATIO:

    This ratio expresses the number of times fixed assets are being turned
over is a state period. It is calculated as under.

                                                         Sales

    Fixed assets turnover ration= ----------------------------------------------------

                                    Net fixed assets (after depreciation)


TABLE - VII

YEARS          SALES               TOTALFIXEDS                     RATIO
               (Rs. In lacks)      ASSSETS
                                   (Rs. in lacks)
 2006-2007         30295.06                  18525.70               163.53
 2007-2008         36936.65                  24158.08               152.89
 2008-2009         16365.63                  26388.35               175.70
 2009-2010         64471.61                  28239.98               228.29
 2010-2011         72485.63                  12932.62               560.48




EAIMS                                                                                    54
Fixed Assets Management


                                       GRAPH




                     FIXED ASSETS TURNOVER RATIO
        600

        500

        400

        300
                                                                          RATIO
        200

        100

          0
              2006-2007   2007-2008   2008-2009   2009-2010   2010-2011



INTERPRETATION

   The fixes assets ratio turnover ratio is fluctuating trend during the review
period of time in the year 2002-2003 in the year ratio was recorded as
185.85 in the year 2007-208 the ratio 175.50.

Average ratio was recorded 175.50 during the review period of time.

   The highest ratio was recorded at 185.85 in the year 2003-04 which is
more than average ratio.

The lowest ratio was 152.89 in the year 2006-07.




EAIMS                                                                             55
Fixed Assets Management

FIXED ASSETS AS PERCENTAGE TO TOTAL ASSETS.

                                               Fixed assets

Fixed assets as a percentage to total assets = -------------------X 100

                                                 Total assets



                                TABLE – VIII

      YEAR        FIXED ASSETS            TOTAL ASSETS             RATIO
                    (Rs. In lacks)           (Rs. in lacks)
     2006-07           18525.70                36847.43             50.27
     2007-08           24158.08                50354.91             47.91
     2008-09           26388.35                26616.92             99.17
     2009-10           28239.98                64213.82             43.97
     2010-11           28239.98                64213.82             43.97




EAIMS                                                                       56
Fixed Assets Management


                                  GRAPH


               FIXED ASSETS AS PERCENTAGE TO TOTAL
                              ASSETS
        120
        100
         80
         60
                                                                  RATIO
         40
         20
          0
              2006-07   2007-08   2008-09   2009-10   2010-11



INTERPRETATION

   Fixed assets to total asset ratios fluctuation to trend during the review of
period of time. During the year 2002-03 the ratio was recorder 997.09 and
the ever 2007-08 the ratio slightly decreasing to average ratio was observed
5.027 during the review of period time.




EAIMS                                                                             57
Fixed Assets Management

7. RETURN ON FIXED ASSETS:

                                  Profit after tax

    Return on fixed assets =----------------------------X100

                                  Fixed assets

    The ratio is calculated to measure the profit after tax against the amount
invested in total assets to ascertain whether assets are being utilized properly
or not. The higher the ratio better it is for the concern.



                                     TABLE

      YEARS          PROFIT         AFTER FIXED                 RATIO
                     TAX                      ASSETS
                      (Rs. In lacks)          (Rs. In lacks)
      2006-2007               415.02                 18525.70    22.40
      2007-2008              1580.80                 24158.08     6.54
      2008-2009              2591.71                 26388.35     9.2
      2009-2010             3077.77                  28239.98     10.8
      2010-2011             4202.63                  30165.63    13.93




EAIMS                                                                              58
Fixed Assets Management


                                      GRAPH


                         RETURN ON FIXED ASSETS
        25

        20

        15

                                                                         RATIO
        10

         5

         0
             2006-2007   2007-2008   2008-2009   2009-2010   2010-2011



INTERPRETATION:

   Return on fixed assets ratio is fluctuation trend furring the review of
period of time.

   During the year 2002-2003 the ratio recorded as 21.44 the year 2007-
2008 the decreased as 9.2.

   The highest ratio is recorded at 22.40 in the year 2005-06 the lowest
ratio was 9.2 in the year 2007-2008.




EAIMS                                                                            59
Fixed Assets Management

                             FINDINGS

      The financial position of the LANCO cement industries regarding

        investment has been fluctuation in the year 2002-03% and 2004-05

        40.50%

      Regarding the fixed assets as a percentage of current liabilities it is

        observed it is year to year fluctuated at 2002-03 1.502% abd2004-

        05 1.58%.

      The fixed assets turnover ratio in the year 2002-03 185.85 2004-05

        195.88 and 2007-08 152.89%.

      The grass capital employed ratio it can be observed that in an every

        year increasing. Like that 2002-03 8523.40, 2003-2004 24539.33.




EAIMS                                                                            60
Fixed Assets Management




                          SUGGESTIONS

   The company investment has low, but to improve the investment in

     future.

   The LANCO INDUSTRIES long term funds quite normal so decrease

     the long term funds increase the fixed assets.

   The current liabilities are to main thing in future.

   The sales are increasing in very year. But to main thing the sales in

     future.




EAIMS                                                                       61
Fixed Assets Management




                          CONCLUSION

           After Analyzing the Financial position of Lanco cement

     industries and evaluating its fixed asset management and capital

     budgeting techniques in respective of components analysis, trend

     analysis. The following conclusions are drawn from the project

     preparation.




EAIMS                                                                   62
Fixed Assets Management




EAIMS                     63
Fixed Assets Management

                          BIBLIOGRAPHY

Author                      :   I.M.PANDEY
Title of the book           :   Financial Management
Publisher                   :   Vikas Publishing House Pvt. Ltd.,
Edition                     :   Eighth Edition.


Author                      :   M.Y. Khan & P.K. Jain
Title of the book           :   Financial Management
Publisher                   :   Tata Mc. Graw Hill Publishing Co.Ltd.,
Edition                     :   Third Edition.


Author                      :   Prasanna Chandra
Title of the book           :   Financial Management
Publisher                   :   Tata Mc. Graw Hill Publishing Co.Ltd.,
Edition                     :   Fourth Edition.

-




EAIMS                                                                    64
Fixed Assets Management




LANCO INDUSTRIES LIMITED BALANCESHEET FOR THE YEAR2006-07


Sources of funds                              2007           2006
Share holders funds
A) Share capital                              3,976.36       3,976.36
B) Reserves and Surplus                       3,993.06       3,804.74
Loan Funds:
A) Secured Loans                              9,244.81      10,886.36
B) Unsecured Loans                           15,069.11       9,588.74
Deferred Tax Liability (Net)                    618.06         424.17
Total                                        32,901.40      28,680.37
Application of funds:
Fixed Assets: -
A) Gross Block                               25,035.99      20,021.36
B) Less: Depreciation                         6,510.29       5,417.03
Net Block                                    18,525.70      14,604.33
Capital Work In Progress                      5,604.02       6,015.09
Investment                                       —            589,83
Current Assets, Loans and Advances
A) Inventories                                9,194.08       7,075.18
B) Sundry Debtors                             6,706.59       7,197.89
C) Cash and Bank Balance                        350.67         247.72
D) Loans and Advances                         2,070.42       1,616.75
                                             18,321.76      16,137.54
Less: current Liabilities and Provisions
A) Current Liabilities                        9,202.11       8,090.45
B) Provisions                                   354.42         586.14
Net Current Assets                            8,765.23       7,460.95
Miscellaneous Expenditure                         6.45          10.17
Total                                        32,901.40      28,680.37




EAIMS                                                               65
Fixed Assets Management

LANCO INDUSTRIES LIMITED BALANCESHEET FOR THE YEAR 2007-08

Sources of funds                                 2008        2007
Share holders funds:
A) share capital                                 3,976.36     3,976.36
B) Reserves and Surplus                          5,108.64     3,993.06
Loan Funds:
A) Secured Loans                                16,382.92     9,244.81
B) Unsecured Loans                              13,733.65    15,069.11
Deferred Tax Liability                           1,184.79      618.06
Total
                                                40,386.36    32,901.40
Application of funds:
Fixed Assets: -
A) Gross Block
                                                31,824.32    25,035.99
B) Less: Depreciation                            7,666.24     6,510.29
Net Block
                                                24,158.08    18,525.70
Capital Work In Progress
                                                  754.45      5,604.02
Investment                                              —            —
Current Assets, Loans and Advances
A) Inventories                                  10,636.86     9,194.08
B) Sundry Debtors                                7,667.92     6,706.59
C) Cash and Bank Balance                         2,650.37      350.67
D) Loans and Advances                            5,241.68     2,070.42
                                                26,196.83    18,321.76
Less: current Liabilities and Provisions
A) Current Liabilities                          10,188.34     9,202.11
B) Provisions                                     538.25       354.42
                                                10,726.59     9,556.53
Net Current Assets                              15,470.24     8,765.23
Miscellaneous Expenditure                            3.59           6.45
Total                                           40,386.36    32,901.40



EAIMS                                                                 66
Fixed Assets Management

LANCO INDUSTRIES LIMITED BALANCESHEET FOR THE YEAR 2008-09

Sources of funds                               2009          2008
Share holders funds:
A) share capital                                3,976.36      3,976.36
B) Reserves and Surplus                         7,179.70      5,108.64
Loans funds
A) Secured Loans                               17,832.33     16,382.92
B) Unsecured Loans                             12,271.32     13,733.65
Differed tax Liability (Net)                    2,576.95      1,184.79
Total                                          43,836.66     40,386.36
Application of funds:

Fixed Assets: -
A) Gross Block                                 35,516.23     31,824.32
B) Less: Depreciation                           9,127.88      7,666.24
Net Block                                      26,388.35     24,158.08
Capital Work In Progress                          862.01        754.45
Investments                                           —              —
Current Assets, Loans and Advances
A) Inventories                                 12,092.91     10,636.86
B) Sundry Debtors                               8,814.31      7,667.92
C) Cash and Bank Balance                          420.10      2,650.37
D) Loans and Advances                           5,289.66      5,241.68
                                               26,616.98     26,196.83
Less: current Liabilities and Provisions
A) Current Liabilities                          9,319.38     10,188.34
B) Provisions                                     711.30        538.25
                                               10,030.68     10,726.59
Net Current Assets                             16,586.30     15,470.24
Miscellaneous expenditure                                           3.59
Total                                          43,836.66     40,386.36




EAIMS                                                                 67
Fixed Assets Management

LANCO INDUSTRIES LIMITED BALANCESHEET FOR THE YEAR 2009-10

Sources of funds                               2010          2009
Share holders funds:
A) Share capital                                3,976.36     3,976.36
B) Reserves and Surplus                         8,549.77     7,179.70
Loans funds
A) Secured Loans                               22,645.54   17,832.33
B) Unsecured Loans                             15,460.46   12,271.32
Deferred Tax Liability (Net)                    3,123.73     2,576.96
Total                                          53,755.86   43,836.66
Application of funds:
Fixed Assets: -
A) Gross Block                                 38,974.86   35,516.23
B) Less: Depreciation                          10,734.88     9,127.88
Net Block                                      28,239.98   26,388.35
Capital Work In Progress                         425.37       862.01
Investment                                             -            -
Current Assets, Loans and Advances
A) Inventories                                 14,436.48   12,092.91
B) Sundry Debtors                              11,966.16     8,814.31
C) Cash and Bank Balance                        3,550.27      420.10
D) Loans and Advances                           6,020.93     5,289.66


Less: current Liabilities and Provisions
A) Current Liabilities                         10,108.38     9,319.38
B) Provisions                                    774.95       711.30
                                               10,883.33   10,030.68
Net Current Assets                             25,090.51   16,586.30
Miscellaneous Expenditure                              -            -
Total                                          53,755.86   43,836.66




EAIMS                                                                   68
Fixed Assets Management




LANCO INDUSTRIES LIMITED BALANCESHEET FOR THE YEAR 2010-11

Sources of funds                                2011          2010
Share holders funds:
A) Share capital                               3,976.36      3,976.36
B) Reserves and Surplus                       13,713.91      8,549.77
Loan Funds
A) Secured Loans                              26,486.50    33,227.46
B) Unsecured Loans                             6,130.29      4,878.54
Deferred Tax Liability (Net)                   3,435.74      3,123.73
Total                                         53,742.80    53,755.86
Application of funds:
Fixed Assets: -
A) Gross Block                                40,286.29    38,974.86
B) Less: Depreciation                         12,527.20    10.734.88
Net Block                                     27,759.09    28,239.98
Capital Work In Progress                       3,441.21      425.37
Investment                                             -             -
Current Assets, Loans and Advances
A) Inventories                                11,519.49    14,436.48
B) Sundry Debtors                             11,845.80    11,966.16
C) Cash and Bank Balance                       1,516.42      3,550.27
D) Loans and Advances                          5,581.47      6,020.93
Less: current Liabilities and Provisions
A) Current Liabilities                         6,853.94    10,108.38
B) Provisions                                  1,066.74      774.95
                                               7,920.68    10,883.33
Net Current Assets                            22,542.50    25,090.51
Miscellaneous Expenditure                        —             —
Total                                         53,742.80    53,755.86




EAIMS                                                                    69

				
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