New Financial Approaches for the Economic Sustainability of the KMML

NEW FINANCIAL APPROACHES APPROACHES FOR THE ECONOMIC SUSTAINABILITY SUSTAINABILITY OF THE KMML

2012

CHAPTER I INTRODUCTION TO THE STUDY

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INTRODUCTION About My Project Topic

The project is aimed to find out Economic sustainability is not just about achieving economic growth year on year. It‘s about understanding that economic growth is only sustainable if it simultaneously improves our quality of life and the environment. Sustainability makes perfect business sense and it will continue to be a defining characteristic of successful businesses of the future. Financial success is the key to achieving economic sustainability of a firm. Finance is an important function of any business, as money is required to meet the various activities activities of it. It has given a birth to ―Finance Management‖ as a separate subject. The study conducted to analyze the Economic Sustainabilityand Sustainability and adopting ‗New Financial approaches‘, approaches‘, for increasing ‗Economic Sustainability of The Kerala Minerals And Metals Ltd., Chavara, Kerala‘ Kerala‘. It indicates possible action, when needed accounting information‘ are used by varied interest viz., owners, managers, creditors, potential investors, employees, trade union, customers, and government. Financial statement is prepared primarily for decision making. They play a dominant role in setting the frame of managerial decisions. The information provided provided in the financial statement is of immense use in making decision through analysis anal ysis and interpretation of financial statement. This project assumes that economic sustainability is integrally linked to the environmental and social outcomes an organisation achieves. And while good financial and broader economic performance might mean that companies survive in the short-term, it does not necessarily secure a long-term economic future, nor does it guarantee positive environmental or social outcomes. If the predictions about sustainable development are accurate, neglecting the environment and social issues may be a barrier to long-term survival at both the micro or macro level. Consequently, those companies that can effectively manage their environment and the social will also help make them economically sustainable.

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INTRODUCTION About My Project Topic

The project is aimed to find out Economic sustainability is not just about achieving economic growth year on year. It‘s about understanding that economic growth is only sustainable if it simultaneously improves our quality of life and the environment. Sustainability makes perfect business sense and it will continue to be a defining characteristic of successful businesses of the future. Financial success is the key to achieving economic sustainability of a firm. Finance is an important function of any business, as money is required to meet the various activities activities of it. It has given a birth to ―Finance Management‖ as a separate subject. The study conducted to analyze the Economic Sustainabilityand Sustainability and adopting ‗New Financial approaches‘, approaches‘, for increasing ‗Economic Sustainability of The Kerala Minerals And Metals Ltd., Chavara, Kerala‘ Kerala‘. It indicates possible action, when needed accounting information‘ are used by varied interest viz., owners, managers, creditors, potential investors, employees, trade union, customers, and government. Financial statement is prepared primarily for decision making. They play a dominant role in setting the frame of managerial decisions. The information provided provided in the financial statement is of immense use in making decision through analysis anal ysis and interpretation of financial statement. This project assumes that economic sustainability is integrally linked to the environmental and social outcomes an organisation achieves. And while good financial and broader economic performance might mean that companies survive in the short-term, it does not necessarily secure a long-term economic future, nor does it guarantee positive environmental or social outcomes. If the predictions about sustainable development are accurate, neglecting the environment and social issues may be a barrier to long-term survival at both the micro or macro level. Consequently, those companies that can effectively manage their environment and the social will also help make them economically sustainable.

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For my study I have chosen KMML a fully owned Kerala Government enterprise and a topic for my for my study is ― New Financial Approaches for the Economic Sustainability of The Kerala Minerals and Metals Limited [KMML].‖ [KMML].‖

About KMML

Bringing more to your everyday life, KMML touches in numerous ways. Be it the dress you wear, the cosmetics you use, the medicines you take, the paints you decorate your home with or the utility plastic products, our products are there. Eco-friendly & socially committed, it is the only integrated Titanium Dioxide facility having mining, Mineral Separation, Synthetic Rutile and Pigment-Production Plants. Apart from producing Rutile grade Titanium Dioxide pigment for various types of industries, it also produces other products like Ilmenite, Rutile, Zircon, Sillimenite, Sillimenite, Synthetic rutile etc. Manufacturing Titanium Dioxide through the chloride route, KMML produces very pure rutile grade Titanium dioxide pigment. The different grades churned out by KMML under brand name KEMOX has a ready market which asks for more. The commendable work in research by the R&D department has also helped KMML to add more colours to its portfolio. With continued growth and demand in the economy and industry, the products of KMML are being lapped up by the eager market. This has in turn set the wheels turning for KMML‘s expansion. KMML has always been responsive to social and environmental causes. Some of the initiatives taken by KMML have made a significant change to the area and its people.

By focusing the attention of economic sustainability, new financial approaches, goes to the heart of financial management and reflects the management interest in the progress of the Economic sustainability of KMML.

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NEW FINANCIAL APPROACHES FOR THE ECONOMIC SUSTAINABILITY OF THE KMML

2012

1.1 BACKGROUND OF THE PROBLEM Work and the workplace are essential elements of industrial and industrializing economies. Work is combined with physical and natural capital to produce goods and services. The workplace is the place where the comparative advantages of workers and owners/managers create a market for exchange of talents and assets. Beyond markets, work provides both a means of engagement of people in the society, and an important social environment and mechanism for enhancing self-esteem. Finally, work is the main means of distributing wealth and generating purchasing power in dynamic national economic systems. The management of the organisation adopt various approaches(New) related to the work life of the organistion year to year, otherwise it will leads to create intricate relationship between employment and it also decreasing the economic sustainability of the organisation. Solution: - If the organisation has adopting new approaches and it will applied both the

employee and employer in his work; it will help the sustainable growth of the organisation and also lead to develop both industrial and industrializing economies. OBJECTIVES OF THE STUDY 

To find out the effectiveness while adopting new financial approaches in KMML.



To find out which factors has strongly affect on economic sustainability of KMML and which factor affect least.



Provide proper suggestion for controlling economic sustainability.



To know what are the measures taken by the company to increasing economic sustainability of the KMML



To know how economic sustainability affect the production of the organization.

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SCOPE OF THE STUDY

The study was conducted to know about the sustainability in KMML .The study looks how it affects the work of KMML and how the management of the company controls the economic sustainability. The project also analysis that while adopting n ew financial approaches in KMML help to increase the economic sustainability of the organisation.

1.2 INTRODUCTION TO THE COMPANY [Industrial and Company profile] INDUSTRY PROFILE

The world is rapidly shrinking with the advent of communication, transportation and financial flows product development in one industry are finding enthusiastic acceptance in other industry. As the industry, which is a manufacturing industry, the product will definitely depends on the end user industries. Industry plays a significant role in every firm. Industrial development has been given on greater importance in Indian planning on account of industry development. Industry is necessary in productivity, employment, national income and rate of capital. Formation in India witnessed large scale diversification in India. India now occupies 10th place among the industrially developed countries in the world. The KMML always maintains high standards of perfection, achieving technical excellence in every phase of production. Catering to strict guidelines, KMML offers a wide range of products for quality conscious customers. Our products go into the manufacture of a variety of products used in everyday life. Dress materials, facial creams, tablets,

newsprints, wood paints, emulsions, enamels, plastics, tooth paste,

rubber products, cosmetics, and printing ink- all contain titanium dioxide. Believe it you need our products to brighten your life. Fr. William Gregor (1761-1817) in the year 1781 discovered Ilmenite at Konwall in England and started that this black sand contains some important metal. But he fails to discover which metal it was. After several years in the year 1875 the Hungarian Scientist Martin Hen Witch Kalpeth found some metal contents in the Rutile metal about which Page 12


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Fr.William Gregor mentioned. After a series of investigation he found these metal contentsat Titanium metal named Titanium after Titan of Greek methodolog y. As for any other industry R&D holds the key for further growth at KMML. And we have invested heavily in the R&D dedicated to the paint and pigment division. The view is to establish world-class products and competitiveness. This excellent facility undertakes research, development and product improvement. Scientists and engineers continuously pursue innovative technologies in the area of TiO2 pigments, quality improvement and other allied products. The technical and sales service wing extends all help to customers in the field of applications and uses. Our R&D has achieved the following tasks in recent time:

1) Developed new grade RC-802with excellent balancing properties of gloss and weather resistance. 2) Successfully developed an improved process for oxidation plant. 3) Developed know how to convert iron oxide waste to bricks used for construction. 4) Developed new grade RC-808, special grade for automotive coating. The Ongoing research includes:

1. Developing a grade suited for thin film plastic application. 2. Management of solid effluents.

INDIAN SCENARIO

India has one of the most expensive deposits of a variety of minerals, particularly Ilmenite and Rutile, which are primary materials for the production of Titanium Dioxide Pigment. These deposits stretch along sea coast between Kayamkulam & Neendakara, a track generally known as the Chavara coast. Other major deposits of Ilmenite are located at Ganjam district of Orissa and along the Konkan coast of Maharashtra.

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The manufacturers of Titanium Dioxide in India are:

 Kolmark Chemicals, Calcutta.  Travancore Titanium Products, Trivandrum.  Kerala Metals & Minerals Limited, Kollam.

The first three companies are producing Anastasia Grade TIo 2 Unit. Only KMML is the Producer of Rutile Grade TiO2 in India.

STATE SCENARIO

Kerala has abundant volume of mineral resources mostly obtained from the sea coast. The three mineral industries extracting minerals from different parts of Kerala are:

  

Indian Rare Earth Ltd, Kollam. Travancore Titanium Products, Trivandrum. Kerala Minerals and Metals Ltd, Kollam.

A DISCOVERY AND HISTORY OF MINERALS INDUSTRY

Monazite was of great demand in the early 1900‘s. It was used in the manufacture of mantles in gas mantle lamps. There was no demand Ilmenite and Rutile in those days. The presences of black sand were found in the coir products exported from Chavara. Mr.Shoemburg a Germen national recognized the economic importance of these minerals and established a mineral sand industry in 1910 at Manavalakunchi. WORLD SCENARIO OF MINERALS

Minerals are very small in quantity in the world but its usages are numerous. Mineral deposits

are seen in some parts of Australia, South Africa and the peninsular

India. Of these India has the richest deposit of mineral sand. Rutile and Ilmenite are mainly used in the production of Titanium Dioxide. Titanium Dioxide is used in the industries like paints, printing inks, paper, plastics and ceramics. Rutile and leucozane

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are also used in the manufacture of welding electrodes. Monazite is used in nuclear technology. In short the uses of minerals are num erous but its availability is limited. INDIAN SCENARIO OF MINERALS

In India the deposits of minerals are found in Tamil Nadu, Orissa and Kerala. The minerals industry is well developed in these states. Indian Rare Earths Ltd; a government of India undertaking, has a minerals separation unit in Chavara, Kollam and has units in Orissa and in Tamil Nadu. MINERALS INDUSTRY IN KERALA

Kerala has the richest mineral sand deposits in the world. These deposits are found in the coastal area between Neendakara in the south and Kayamkulam in the north. Chavara coast stretches in a length of 22 kms. Investigations have proved that mineral sand is found up to a depth of 9 meters below the surface. The entire beach containing minerals deposits is divided into eight blocks and leased to Indian Rare Earths Ltd and Kerala minerals and Metals Ltd. Equally. Recent surve ys and investigations have proved that mineral deposits are seen up to Thottapalli (Alleppy Dist) in the north.

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COMPANY PROFILE

Kerala is blessed with rich and extensive mineral deposits. This deposits stretch along the sea coast between Neendakara and Kayamkulam, a track generally known as Chavara coast. The deposits stretch up to a distance of 18 km along the coastal strip and having a depth of 8 meter. The dark sands of Travancore coast are rich in mineral deposits as Monazite, Ilmenite, Rutile and Zircon. The company is located at Sangaramangalam near Chavara in Kollam District a coastal town 85 km north of Thiruvananthapuram. KMML is situated on the side of NH47 to about 285 a res in area. KMML has a worldwide reputation, a socially responsible company with an eco-friendly image. The company derived strength from its manpower and customer organization. The Kerala Minerals and Metals Ltd. (KMML) is fully owned and managed by the Government of Kerala. Eco-friendly and socially committed, it is the only integrated Titanium dioxide facility having mining, mineral separation, synthetic Rutile and pigment production plants. Apart from producing Rutile grade titanium dioxide pigment for various types of industries, it also produces other products like limonite, Rutile, zircon, Sillimelite, Synthetic Rutile, etc… Manufacturing titanium dioxide through the chloride route, KMML produces very pure Rutile grade Titanium dioxide pigment. The commendable work in research by the R&D department has also helped KMML to add more colours to its portfolio. KMML has always been responsive to social and environmental causes. Some of the initiatives taken by KMML have made a significant change to the area and its people.

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HISTORY OF KMML

The KMML was established by a private entrepreneur in the year 1932 as F.X.Pereira & Sons (Travancore) Pvt Ltd. During the year 1956 this concern was taken over by the Government and was placed under the control of the industries department. The unit was converted as an Ltd company with the effect from 1st April, 1972 in the name of ―The Kerala Minerals & Metals Ltd‖. Initially the company had only one unit known as ‗Mineral Separation Plant‘. In 1974 the company received intent for the production of Titanium Dioxide (TiO2) pigment using Chloride process. In 1976 KMML registered its 2 nd unit known as Titanium Dioxide Pigment Plant. Its construction started only in 1979 and total capital cost was Rs. 144 crores. The plant was commissioned in December 1984. Because of this KMML become the first and only integrated Titanium Dioxide Plant in the world.

Even though KMML was commissioned in 1984 it was not able to operate efficiently due to technical problems. Due to these problems the company has to suffer an accumulated loss of more than the capital investment over a period of 8 years.

In the above circumstances, it was in 1991 the entire personnel of KMML from top management to down to the lowest workers started to think individually and collectively about the requirement of a ‗Turn Around‘. A strategy was planned and implemented with the wholehearted support of the work force during the period 1991-1993. It started to yield results and the company attained the breakeven level by 1993. From 1993-1994 onwards, the company started to make profits and wiped out the entire accumulated loss within a few years and rapid the term loans. Thereafter, it is the story of success and growth.

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MILESTONES

♦

Letter of Intent for the production of 48,000 tones of Titanium Dioxide Pigment through Chloride process technology. Collaboration agreement with: Benelite Corporation of America, USA – Synthetic

1974

Rutile Plant. Woodall Duckham, U.K – Acid Regeneration Plant Kerr McGee Chemical Corporation, USA – Titanium Dioxide Pigment (Chloride process). 1979

♦

Construction of plants started at Sankaramangalam, Chavara, Kollam.

1983

♦

R&D recognition for KMML laboratory by DSIR.

1984

♦

Commissioned the first fully integrated Titanium Dioxide Pigment Plant in the world. Launched for the first time in India, Rutile grade Titanium Dioxide Pigment under Trade Name: KEMOX RC -822.

1992

♦

Launched another grade of Titanium Dioxide Pigment – KEMOX RC-800.

1992

♦

Launched Plastic Grade Pigment – KEMOX RC-800 PG. 1992.

1992

♦

Won the First National Award for in-house R&D efforts in Industry for Technology Absorption under TAAS programme b y DSIR.

1997

♦

A new grade of pigment for the new water based paint application was introduced – KEMOX RC-813.

1998

♦

Launched another improved grade pigment – KEMOX RC-822SG (Renamed as KEMOX RC-802).

1998

♦

Commercial production of Iron Oxide Bricks from the waste Iron Oxide – an innovative development by in-house R&D.

1998

♦

Supported Combustion Process was successfully commissioned in one of the streams in the Oxidation Plant. This In-house developed process is a significant breakthrough which enables KMML to improve productivity of the plant and for further capacity enhancement.

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1999

♦

Bypass system in both streams and support combustion in other streams was also commissioned.

1999

♦

Erected and commissioned one more Chlorinator in Chlorination section.

2003

♦ New modern Lime Preparation Plant (LPP) for effluent neutralization was commissioned.

2004

♦

Commissioned new DM Plant and added two more digesters in IBP.

2004

♦

Commissioned a new product packaging machine, modern energy efficient filter and drier system, DCS system in Unit-400.

2005

♦

World class quality management systems like ISO 14001 and OSHAS-1800 implemented.

2006

♦

Capacity enhancement to 40,000MT.

2006

♦

Foundation stone laid for Titanium sponge plant.

2007

♦

Commissioned Recovery cyclone.

2008

♦

Commissioned new ETP sludge and Oxide pond.

2009

♦

Development of Nano Titanium Dioxide particles in laboratory scale.

2010

♦

Commissioned the Enhanced Zircon Recovery plant at MS Unit.

2011

♦

India‘s first commercial titanium commissioned on 16/6/2011.

2011

♦

India‘s first commercial plant for synthesis of nano titanium dioxide commissioned on 19/7/2011.

2011

♦

Commissioned the Sillimenite Recovery system at MS Unit.

2011

♦

Started the sale of Sillimenite. --on 18th August 201 1.

2011

♦

Birth of First Batch of Titanium Sponge on 06.09.2011.

oxy

chloride

pilot

plant

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OBJECTIVES OF KMML  To exploit the mineral wealth abundantly available in the coastal belt.  To manufacture value added product like Titanium Dioxide and Titanium Metal

through Chloride Route Technology. TECHNICAL COLLABORATION

The company received a letter of intent for 48000 tons of TiO2 pigment using Chloride Route Technology in 1974. The KMML entered into technical collaboration with three multinational corporations – M/S Kers M C Gee Chemical Corporation of USA, M/S Benedict Corporation of America, M/S Woodall Dukham of UK respectively. The Metallurgical of Engineering Consultants India Ltd (MECON) a Government of India undertaking did the detailed engineering. VISION AND MISSION 

Vision:-

 KMML to be a world class producer of mineral sand based value added products.



Mission:-

 To become the nodal agency for promoting and establishing mineral based

industries in the state to ensure value addition and effective and controlled exploitation of mineral reserves.  To develop adequate supply been for the services and utility for development of

the mineral based industries.  To create awareness about corporate social responsibilities for chemical

industries in the state.  To become the leader in controlling Green House Gas & Emissions so as to

promote concept of Green Earth.

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GENERAL POLICIES AND OBJECTIVES Corporate Objectives  To exploit the mineral wealth abundantly available in the coastal belt.  To manufacture value added products like Titanium Dioxide and Titanium Metal

through Chloride Route Technology.  Large scale generation of employment in the state. 

Overall growth & development of the local area in the particular and the state in general.

Quality Policy

―We delight the customers with world class products and prompt service at competitive price. We shall work for continual improvement in the areas of delivery, new product development, communication, cost reduction, safe & clean workspace, inventory control, Human Resource Development and employee morale through implementation of ISO 9001-2000 quality management system.‖

Quality Objectives

a) Customer driven continuous improvement. b) Encouraging innovation and technology updating. c) Training and empowering the work force. d) Caring for requirements of the society. e) Compliance with documented quality system.

ISO 9001:2000

KMML has been certified ISO 9001:2000 in the year 2003 as recognition of practicing policy.

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EMPLOYEE STRENGTH

There are about 210 officers and 1122 workmen in KMML. The total strength is 1332. FUTURE PLAN

The company is studying the possibility of the productivity of more economic Titanium metal sheets. Recently, researchers established that the Aeronautic Industry could use Titanium metal instead of Aluminum Alloy coverings. The company is in the process of expansion and the target expected is approximately is shown below:

 A new Mineral Separation Plant of 2 lakh tone per year limonite.  A new systematic Rutile Plant of capacity 1.3 lakh tones per year.  A new 100 tons per day Oxygen Plant.  Capacity enhancement of TiO2 Pigment Plant 1 lakh tone per year.

POLLUTION CONTROL

KMML has elaborate Pollution Control System with respect to both water and air pollution. The wastes (acidic) from Ilmenite Beneficiation Plant are sent to Effluent Neutralization Plant (ENP). ENP consists of a Primary Neutralization Tank (PNT) and Secondary Neutralization Tank (SNT) where it is treated with caustic soda solution. The totally neutralized slurry from the SNT is pumped to 50000M3 capacities where the solids are settled. The day solution from setting pound of 25000M3 capacities where the balance solids are allowed to settle. The clean water from the polishing pound meeting all specification stipulated by Pollution Control Board authorities is pumped in Arabian Sea. All gases from Chlorination, Oxidation, Limonite Beneficiation Plant and Acid Regeneration Plant are scrubbed water or line or caustic solution to absorb the toxic gases diluted with enough fresh air and only let out to the atmosphere out through all slacks.

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SWOT ANALYSIS 

Strength  KMML is the only company in India produce Rutile grade Titanium

Dioxide.  Constant up gradation of technology.  Raw materials are found in nearby areas.  Availability of cheap and best quality raw materials, i.e., mineral sand

consisting of Ilmenite, Rutile, Zircon, etc.  The only integrated plant in the world having Mineral Separation Plant,

Synthetic Rutile Plant, Titanium Dioxide Plant and all are closely located in one complex.  KMML is a profit making public sector undertaking with a total capital

investment by the Government of Kerala.  The company has achieved a breakthrough in the export market. In the

year 2002-2003 the company has earned a maximum foreign currency among the chemical factories of public sector und ertaking in the state.  Technology perfected by internal research & development efforts.  Technological

collaborations

with

the

Russian

mining

company

ROSSBORN for the production of Titanium Sponge.  The proximity of infrastructure facility such as sea port, railway and

international airport is one of the greatest strength of the compa ny.



Weaknesses

 Lack of sufficient land for expansion projects and storing or disposal

hazardous waste.  Poor quality power and lack of captive power generation facility.  The internal control procedure relating to stores, raw materials including

components plant and machinery, equipment and other assets and for the sale of goods are not commensurate to the size of the company. Page 23


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 Government interference on company‘s day to day affairs impairing

corporate governance and professional management.  Weight variation due to atmosphere effect on the package product.



Opportunities

 More sales realization in domestic as well as foreign market.  Provision should be made for determination of unserviceable and damaged

stores, raw materials and productivity.  Steady growth of user industries like paints, plastics, cosmetics and ink.  Faster growth rate of market in Asian countries where manufacturing

facilities are limited.  Unexplored

value addition sector like Titanium Metal, Zirconium

compound.  Kerala State being made better known to the outside world with the

expansion of tourism and infrastructure technical sectors.  Technical collaboration with ISRO in Titanium Metal production.



Threats  Lower sales realization giants like DuPont, Kers-Mc Gee Ishihara and

Crystal.  Duplication chances by stockiest.  Existing infrastructure is very old and is need to b e replaced.  Policy change of the State and Central Government regarding sand mining

may affect the production.  Mining policy of Central and State Government can allow small time

centrants to the sector.

PRODUCT PROFILE

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KMML have monopoly in Titanium Dioxide (TiO2) pigment industry. Titanium Tetra Chloride (synonym-Tickle) is produced as an intermediary product in the production of rutile grade titanium dioxide pigment. Titanium Tetra Chloride is extensively used in the manufacture of Titanium dioxide pigment, Titanium sponge or metal. At present KMML produces six grades of Titanium Dioxide. They are: 1) Kemox RC-800 :- It is recommended for printing inks, high gloss coating, industrial coating, low abrasivity pigment for letterpress gravure polyamides and exterior application where maximum chalk resistance is not required. 2) Kemox RC-800 PG : - It finds application in plastic requiring a blue white high dispersion TiO2. Other areas of application are powder coating, polyethylene films and vinyl sheet goods.

It is used in most other common plastic or rubber floor like

applications. 3) Kemox Rc-822: - It is recommended for interior and exterior enamels and lacquers for industrial and architectural purpose. 4) Kemox RC – 813:- It can be used in both interior and exterior low gloss and flat paints and coating- both solvent and water based. It finds application in interior flat wall paints, exterior low gloss or flat house paints, low gloss maintenance pints, low gloss or flat chemical coating etc. Kemox RC-813 can be described as a universal pigment for all coatings formulated at higher percentage pigment vo lume concentrations. 5) Kemox RC-802 :- It is recommended for both interior and exterior applications. This is also recommended for architectural and industrial paints-both solvent and water based. 6) Kemox RC-808 :- It is recommended for automotive, industrial and architectural finishes. It is also recommended for coil coating, radiation cured finishes; emulsion paint systems powder coating, water borne coating and printing inks. It can also be used for letterpress gravure, polyamides and other inks where low abrasive pi gments are required. ORGANISATIONAL STRUCTURE OF KMML

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Board of Directors


Company Secretary

General Manager (Finance)

Deputy General Manager Materials

Manager (Finance)

Manager (Internal Audit)

Mana er Welfare

Mana er HRD

Assistant General Manager (Project)

AGM IBP

AGM ARP

Deputy General Manager Marketin

2012

Joint General Manager (Personnel & Administration

Joint General Manager (Time)

Chief Medical Officer

AGM PPP

AGM (Medical)

DEPARTMENTAL DETAILS

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Like any other public sector undertaking, KMML has separate departments and separate executive heads for each department. Each department specializes in its own area of operation. The various departments in KMML are:1. Personnel and Administration Department

Personnel Department is concerned with the people‘s dimension in organization. The sincerity and dedication of the employees in KMML is a major success factor. With a full-fledged Human Resource department, regular training and refresher courses are part of the company life. Apart from skill betterment, these courses inculcate quality consciousness, safety and awareness that contribute to personality development. There are around 1332 employees in the company.

Joint General Manager (Personnel &

Administration) is the head of the department, and he is assisted by manager (welfare) and manager (HRD) and chief medical officer and a Legal officer and other staffs.

1.1 Functions

The major functions of Personnel department are as follows:

1) Recruitment & Selection



Recruitment

The company adopts different methods of recruitment. For this KMML gives advertisements in Malayalam and English news papers, published in Kerala and other states of South India. 

Procedure for Recruitment  For the vacancy in female category, it is notified to the concerned employment

exchange.  In the case of staff category selection, it is based on public service commission.  For recruitment in managerial and professional posts, applications received with

respect to the advertisements in the news papers are considered. Details furnished by Technical Employees Exchange are also considered.

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 Those people in and around the company who were evacuated for the expansion

purpose of the company will also be given job in the company.  Applications received with respect to the advertisements in news papers and

details furnished by technical employees are also considered.  Those people in and around, the company who were interested for the expansion

purpose of the company will also be given job in the company.  Recruitment to vacancies is done by a committee set by the board of Directors

with not less than three members and at least one of them being a Government representative.

2) Training and Development

KMML gives a lot of importance for its human resources. The company believes that the success depends upon providing necessary training to the employees.

Training is

provided to each and every employee in the organization. The full responsibility of the training and development program at KMML rests on the shoulder of Personnel and Administration Department.

The department head identify the training needs and

coordinate training activities. As per ISO requirement, annual training schedule has be prepared based on individual training needs of the employees identified by the supervision in a specified format. KMML seeks training needs identification in the specified from all functions responsible to provide such identification on annual basis before 15 March every year for preparation of annual training plan. In case a training need for individual crops up suddenly, the concerned department heads prepares the training needs identification form and forward it to administrative officer who plans for the training. While identifying training needs, the respective department or selection identifying training needs of personal considerations.

a) Members present positions b) Training already acquired c) New skills to be imparted Page 28


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d) Qualification required e) Motivation or communication required The details of qualification, experience and training undergone by the individual employee are maintained in the personal bio-data record. The annual training plan is authorized by the Managing Director and external training proposals are authorized by the Managing Director and technicians.

3) Promotion

Promotion is the movement of an employee from a lower position to another position with a better pay, and responsibility. The employees are promoted once in five years.

4)

Transfer

There is only inter- departmental transfer in the compan y.

5) Retirement and Superannuation

KMML being a Kerala Government undertaking company, the retirement or superannuation is fixed at the age of 58.

6)

Labor Remuneration

The remuneration of the employee includes salaries and wages.

Methods of wage

payment: In KMML two important wage payment systems are followed They are:-

1. Time rate system : the time may be an hour, a week, or a month. Total amount of wages is calculated by multiplying time rate with the time spent by each worker on the job. 2. Piece rate system : in this method the workers are paid on the basis of the number of units produced by them. Wages are payable by multiplying the piece rate with the number of units produced. Page 29


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In addition to this the employees get certain other benefits. These benefits are called Fringe benefits /wage extras. It includes medical facilities, leave with pay, Traveling concessions, festival allowances, service awards, free meals, recreational facilities, retirement benefits such as pension, gratuity or annuity payment etc. Many other non monetary benefits are also allowed to the employees of the KMML based on their performance. E.g.: job encouragement, providing recognition for accomplishment, providing involvement /participation in work etc

1.2 Procedure for wage payment

The wage period of the workers in the Titanium pigment unit is fixed as 21

st

of the

th

present month to the 20 of succeeding month. For the all other employees the period is st

fixed from the 1 to the last day of the month. The remuneration is calculated by the department and is paid to on the first day of every month. If the first day is on Sunday or any other holiday it will be paid on the proceeding working day.

1.3 Trade Union

The trade unions in KMML are:- CITU - INTUC - RSP (B) - STU The middle level officers of KMML have two associations. They are:- KMML Officers Association - KMML Officers Federation

1.4 Manpower Planning in KMML

The primary objective is ensure the availability of the required skill and avoids or minimizes redundancies. In order to achieve this objective the management should anticipate manpower needs, plan job requirements and description and should explore the various sources of manpower supply.

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The manpower requirements in KMML has been estimated based on the Engineering Consultants (India) Limited.

The company has now decided to review manpower

requirements and entrusted Kerala State Productivity Council, Kalamassery to undertake the work study and job evaluation so as to enable the company to arrive at the required manpower for their plant capacity. The absence of proper manpower planning in the company had led to the excess employment of the work force.

According to the

executives, many external sources of the manpower are utilized by KMML in filling the position created from time to time. There is a detailed guideline for the company for filling position through promotion.

1.5 Workmen Classification:

1) Permanent Employees: - There are about 219 officers, 568 skilled and 427 unskilled workers in the TiO2 pigment plant as permanent employees, and 29 officers, 44 skilled, and 490 unskilled workers in Mineral Separation P lant. 2) Employees engaged on Contract Basis- These employees work on contract for a limited period of time says one year or six months on specific terms and condition fixed by the company.

There are mainly engaged through Employment Exchanges.

They have no preference for future employment in the company. 3) Temporary or Seasonal Worker: - These workers are employed when the work load is more. On certain season due to the increase in demand, more work forces are needed to meet the production. In such cases temporary workers are engaged. The services of such employees are dispensed with as and when the need is satisfied. 4) Casual Labor : - Casual laborers are employed from people who lost their land due to acquisition by KMML they are engaged first as Casual workers and then absorbed as permanent employee when vacancy arises. 5) Apprentice: - Apprentices work for a period of one year as part of their training programme as per Apprenticeship Act.

1.6 Working Hours

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The daily working of the company is on shift basis. There are three shifts for plant and general shift for administration. The timing is as follows:-

♦

A shift-6 am to 2 p.m

♦

B Shift-2 p.m to 10 p.m

♦

C Shift-10 p.m to 6 a.m

♦

General-9 a.m to 5 p.m

1.7 Welfare Activities

1.8 Labor Welfare Activities

1.9 Personal Record

KMML maintains a personnel record for its employees. It is a file consisting of all the details regarding the employee and all the data relevant to him

1.10 Recording of the Attendance

The electronic punching system is adopted in KMML. Every employee had to punch the card on entering the work.

1.11Time Keeping and Time Booking

A separate wing is concerned with time keeping and time booking in the company. With the help of the punch card this section keeps an attendance register. Main function of this section is attendance recording of lease wage, absence, late coming, early going, lost hours, overtime, shift allowance, loosed wages due to absence, wages due to work holidays etc.

2. Marketing Department Page 32


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KMML have monopoly in Titanium Dioxide (TiO2) pigment industry.

KMML is a

public limited company that stands as a leader in production of TiO2. The company has a large number of customers from all over the world and outside. department is engaged in selling of the company‘s product.

The marketing

There is no separate

department for sales and marketing management also performs these functions. The marketing section keeps detailed report about customers‘ product, product group control, dispatch and payment. The Marketing department is headed by Deputy General Manager who is assisted by Manager (Marketing) and Deputy Manager and other officers and assistants. Products of KMML always maintain very high standard perfection, achieving technical excellence in every phase of production to offer a wide range of products for quality conscious customers. At KMML, one factor comes before everything else is customers and KMML go out of their way to ensure customers satisfaction. A team of motivated marketing experts, who make it their business to find out the firm‘s views, highlights customer‘s consciousness.

Maintaining close contacts, they are perfectly aware of

customer‘s needs and are instrumental in development of new products at price and offering.

♦

Main Objectives

1) To find out the general impression of KMML products in the titanium dioxide marketing of India. 2) To ascertain whether demand exists in the Indian market. If we undertake the proposed expansion of 6000 MT. 3) Equivalent grade needed in market.

3. Finance Department Page 33


Finance is the lifeblood of every business.

2012

This is one of the most important

departments. KMML has a well organized finance department. The Finance department is headed by Deputy General Manager (Finance) who is assisted by Manager, Deputy Managers, accounts officers and other officers. 1.1 Organisational Structure of Finance Department

Managing Director

G/M

Manager (Internal Audit)

Deputy Manager

Internal audit Assistant

Accounts Officer (Cash)

Accounts Officer

Accounts Officer

Accounts Officer

Accounts Officer

Accounts Officer

(Sales)

(Tax)

(Budget)

(Direct Bills)

(Other Bills & sales tax

Ass: Accounts Officer






Accountant

Accountant

Accountant

Accountant

Accountant

Accountant

1.2 Capital structure of KMML

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KMML has an authorized capital of 3500 lakhs. The issued, subscribed and paid up capital comes to 3093.27 lakhs. Equity is of value Rs 100 each. Today KMML is a Zero debt company making profit continuously for 1.3 Functions of Accounting Section or Finance Department

The company maintains a clear and perfect accounting system. The main activity of the Finance Department is Working Capital Management. Preparation of Fund statement, cash Flow Statement, Balance Sheet, Profit and Loss Account etc are also the activities of Finance Department. Secretarial work relating to Board comes under the review of the Finance Department. Most of the activities carried out by the Finance Department are pertaining to long term and short term requirements of the operation, closing purchase bill, maintaining the account of contractors, subcontractors, income tax deduction, salary discrepancy, dealing with the financial institutions with imports and exports are also the functions of the Financial Department. 1.4 Functions in Finance Department Recording and analysis of purchases:

The finance department of the company keeps the accounts of purchase of spare parts, chemicals, etc. and accounting entries are made in the books of accounts of the company on day to day basis, on the basis of bills and supporting vouchers of each item. Each voucher is essentially numbered to avoid discrepancy. The department analyses the details of purchases afterwards. Salary Section and Pay Divisions:

The main function of the department is preparation and disbursement of salary of office members of office staff and workers. The department keeps the salary register pertaining to each of the above sections, which facilitates charges in salary due to granting of annual increments and deduction due from the salary. The disbursements of salary are credited to the amount of the respective bank account of the employee. The department sends a detailed list of salaries to the respective departments.

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Sales and Revenue Accounting:

The department is calculating and paying sales tax and central excise duty to the concerned Government every year.

Cash and Bank Transactions:

The department does all the matters relating to the day to day cash transactions. They receive and make payment for purchase and sales. The company is allowed to collect cash up to the limit of Rs. 20000/- is carried out by cheque or DD as per direction of the tax authority.

Costing:

Annual budget and cost sheet is prepared at the outset of every year and on with the basis of department fixes the floor price of each product of the company.

Calculation of Depreciation:

The department calculates the depreciation is provided on the straight line method in the case of plant & machinery of Titanium Pigment Unit and written down value method in case of other assets of the company.

1.5 Auditing

Auditors are appointed by the Government for a period of one Year. There exist an external audit and internal audit. Internal Audit: - These are part of the organization. There is an internal auditing sector. They are in the charge of periodical audit External Audit: - They are as follows:

Statutory Audit



Account General‘s Audit



Inspection Audit



Sales Tax Audit



Income Tax Audit Page 36




2012

Cost Audit

4. Production Department

KMML always maintain high standard of perfection by achieving technical excellence in every phase of production. Catering to strict guideline, KMML offers a wide range of products for quality conscious customers. Their products go in to the manufacture of variety of products used in everyday life. Paint material, facial creams, tablets, newsprint, rubber products, cosmetics and printing inks all contain TiO2. This department undertakes activities and decision regarding the production work. Deputy General Manager (production and maintenance) controls the activities of the department. He is assisted by Process Engineer, Assistant Engineers and other Workmen. Production of TiO2 is carried out in lot wise with specific lot number. Each lot contain 15 MT of TiO2, samples are collected from production at specific intervals and examined thoroughly in the laboratory or the company. If any defect is identified, then the lot is considered as inferior quality 5. Materials Department

All functions relating to purchase and storage of materials for the company is carried out by this department. This department is headed by the Deputy General Manager (materials) and he is assisted by manager (purchase & Stores), purchasing officers, sales officers and other staffs. Purchase is one such department if functioning properly can bring about profit to the organization by carefully monitoring its purchase activity, i.e. maintenance of well developed vendor list and through inventory control.

There is

around 27000 items of raw materials in KMML. The functions of material department can be grouped in to three: 1) Purchase 2) Storage 3) Inventory control 1) Purchase Section Page 37


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Purchase can be broadly classified as 

Purchase made in India, i.e., indigenous purchase



Purchase made from foreign countries



Cash purchase i.e., up to Rs2000/-with the permission of unit head



Local purchase. i.e., up to Rs25000/-this arises in the case of emergencies and purchase can be made from approved.

2) Store Section

Store section deals with: 1) Receiving the materials 2) Inspection of materials 3) Storage and presentation 4) Proper classification and codification of materials 5) Materials handling 6) Issue and dispatch 7) Stock records 8) Store accounting 9) Stock taking 3) Inventory Control Section

Proper inventory management is necessary to provide and maintain good customer service. It enables smooth flow of goods through the production process. It is important as it provides protection against the Uncertainties of demand and supply and also performing the various production operations economically and independently. Materials purchased for month is analyzed and an issue price is fixed for the month. The company follows weighted average method. The inventory control system of KMML is very efficient and it has helped the company to increase profitability by piling up fewer

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funds in stock and also stock control is being done whereby goods above lead time stock level are sold to metallic scrap trading organization (MSTC). Currently through this process goods bought before 2000 and not used till 2008 March were identified and it amounted to around 4.8 crore rupees worth, of this goods worth 1.16 crore rupees was certified as not required and are ready to be sold. 6. Fire and Safety Department

Fire and safety is a main department of KMML. It manages the process of giving security to the employees by giving successful training and giving license to employees and machines. The Deputy General Manager is the head and he is assisted by Assistant general Manager Fire officer, Safety officer, safety inspector and other fireman. The sections under fire and safety are: 1.

Employee details managing: - In this section the details of the employees are identified by separate employee codes. Here in employee code, employee name, designation, date of birth, date of joining and qualifications are recorded. These section supplies the details of employee to another section.

2. Employee training: - All the employees are trained for the successful running up of KMML. The details of training is recorded when they gives each training. Employee code, serial number, date of training, course and remark are recorded. When accidents occur, the details of the training given to the employee are produced. 3. Employee accident: - This section handles the details of accident occurs to the employee. Employee code, serial number, accident data, description of accident, the body part which was injured, unsafe condition or unsafe act, whether lost time accident or not lost time accident, the days lost are recorded. 4. Expo- Petro-License: - This section stores the details of the license provided to each machines. A different agency provides this license. It must be renewed after the validity is lost. This section stores the serial number, item name, license number, tag number, last test, test type etc.

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2012

Lifting machines and tackles: - There are different lifting machines in different location. These machines have to be tested and if any defect it is stored. The machine is given a hoist no., location, last test, tested by defect, next test and remarks are stored.

6. Pressure vessel: - This section handles different machines, which handle the substance of high pressure such as LPG, CHLORINE etc. It is very difficult to handle these types of machines. It needs high security and to confirm whether the equipment is running smoothly. It contains serial no., section, pressure vessel, last test etc. 7. Mock-drill: - This section contains trained person to maintain the security. If any accident occurs, the help of this person is supplied and reduces the complexity of accident. An accident controller is the head of this section. 7. Maintenance Departmen

The maintenance department of KMML can be grouped into Electrical, Mechanical and Instrumentation section. The Joint General Manager (maintenance) is the top authority and he is assisted by AGM (Mechanical, Electrical, and Instrumentation) and other Managers and Engineers. The main objectives of the maintenance department are as follows  To carry out the maintenance work in the plant.  To carry out preventive measures to avoid break down of machines.

8. Technical Department

Assistant General Manager (technical) is the head of this wing who is assisted by manager (Technical and Lab) and also deputy managers for both and scientific officers and statisticians. This wing functions as a third agency to the production and maintenance department. The technical wing takes charge to research and development, Quality control, Laboratory and technical services. 9. Project Department

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Joint General Manager (Project) is the head of the wing and he is assisted by Manager, Deputy Manager and manager an Engineer. This wing is engaged in the expansion program of the company. They are engaged in the building up of new products etc. They also decide up on the future plans of the company. 10. Data Processing Department

Data processing department mainly deals with processing of information to be used by the employees of KMML. Thus, it mainly involves Management Information System. Management Information System (MIS) is under the supervision of the data processing department. Deputy General Manager (EDP) is the top authority of the department who is assisted by manager, software engineers and an assistant. There are 70 personal computers in the company. 53 personal computers in the company are in local area network. Company is having 10 Mega Bytes personal computers with copper cabling. It has four signals: 1. Stores 2. Plant technical service 3. Ilmenite Beneficiation plant/Acid regeneration plant 4. Pigment processing unit/laboratory. The MIS used in KMML is an in- house developed software. It started functioning from1999 December. There is a direct connection from IBM server to Purchase, Finance, Marketing and Personnel department. The entire Information Technology activities are monitored by Electronic Data Processing (EDP) section. KMML is using Oracle Related Database management system at backend and Power Builder as front-end. An integrated online application module developed in power builder is being used among finance, purchase, stores, marketing, personnel and production departments. The database is fed to the system by each department, which is required to generate various Management Information Systems to the management. A strict security control is incorporated in the operations of various modules.

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Starting with the core departments now it has been extended to an Enterprise Resource Module (ERP) with integration from other departments as well. It also performs stock analysis like ABC analysis, expenditure analysis (variable and fixed cost analysis), sales (segment wise analysis report), comparison (segment wise, product wise). 11. Research and Development Department

KMML maintains a fully equipped research and Development facility in the area of Pigment and paint technology with a view to establish world- class products and competitiveness. This excellent facility undertakes research, development and product improvement. Scientists and Engineers continuously pursue innovative technologies in the area of TiO2 pigment, quality improvement and other allied products. The technical and sales service

wing extends all helps to customer in the field of applications and

users. KMML‘s research and development has achieved following tasks in recent times: 1. Developed new grade RC-802 with excellent balancing properties of glass and weather ability. 2. Successfully developed an improved process of oxidation plant. 3. Developed know how to convert iron oxide waste to bricks used for construction. 4. Developed grade RC- 808, special grade for automotive coating. The following works are on progress: 1. Developing a grade suited for thin film plastic application. 2. Management of solid effluent

1.3 BRIEF INTRODUCTION TO THE REAEARCH METHODOLOGY Page 42


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The study deals with the new financial approaches of the KMML, it will help to increase the economic sustainability of the company. Econ omic sustainability is not just about achieving economic growth year on year. It‘s about understanding that economic growth is only sustainable if it simultaneously improves our quality of life and the env ironment. The focus of the study is on the need of an effective financial approach (New) in the company. Financial approaches are an important factor which derives human beings to strive for achieving the desired objectives. For the development of the employees and the company, the study necessary for an organization to study the financial approaches help to increase the economic sustainability.

1.3. A. OBJECTIVES OF THE STUDY



To find out the effectiveness while adopting new financial approaches in KMML.



To find out which factors has strongly affect on economic sustainability of KMML and which factor affect least.



Provide proper suggestion for controlling economic sustainability.



To know what are the measures taken by the company to increasing economic sustainability of the KMML



To know how economic sustainability affect the production of the organization.

1.3. B. METHODOLOGY AND SAMPLE SELECTION

The need for an effective financial system through adopting new financial approaches in finance department is emphasized based on the objectives assessment of the project activities in KMML. The data collected through:

 A Structured questionnaire.  Information from supervisors and directors.  Annual company reports.  Journals.  Books.

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 Web sites.  Profiles and other records of the company.

Selection of this Sample

For getting accurate information, graphic rating scale method was used. The reason for using this method was to get fair representation for all the respondents who formed different types. This method helps us to give a pictorial view of the study and can make a comparative study for future use.

1.3. C. RESEARCH DESIGH Sampling Method

The method used in convenient sampling method. Here, the list of employees are taken based on the convenience, they are short listed 20 employees from the finance department. And their opinion of about adopting new financial approaches for increasing economic sustainability of the company is studied. Sample Size

There are about 1332 employees in K. M. M. L, Chavara. The investigator selected 20 respondents from finance department for analyzing the data. SAMPLE UNIT

Sample unit is the employees of KMML, Chavara.

Tools used for Analysis

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1. Under this study, adopting new financial approach we should firstly understood the current economic sustainability of the organisation. Commonly to know the economic sustainability of the organisation the following tools are used by the finance department.

 Ratio analysis  Trend analysis 

Cash flow statement

2. Current economic sustainability is found out through the above financial tools then the second step is to identify the proper function of the organisation (finance Department). We can identify the function of the finance department through observation and Survey with the help of the company guide. 3. Then the final step is to identify, the finance department are follow the rules and regulation of the company (Company By-law and Articles of Association) and also identify any new finance approach adopting year to year. It should study with the help of questionnaire and survey method.

1.3. D. PERIOD OF STUDY

The study entitled ― New Financial Approaches for the Economic Sustainability of th

Kerala Minerals and Metals Limited [KMML].‖ covers a period of 45 days from 16 April 2011 to 31

st

May 2011.

1.3. E. SOURCES OF DATA

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For collecting data the researcher used two methods that are the primary data collection and the secondary data collection. 1. Primary Data Collection

Primary data is a source from which the researchers collect the data. It is a firsthand data which is used directly for the analysis purposes. In the present study primary data has been collected using questionnaires.

The questionnaire consists of two parts: 

general information or personal data



Information related to study.

The information related to study consists of three parts: (1) organizational factors (2) personal factors (3) other factors

2.

Secondary Data Collection

Secondary data is collected from the records o f KMML, information available at the:  Information from supervisors and directors.  Annual company reports.  Journals.  Books.  Web sites.  Profiles and other records of the company.

1.3. F. TOOLS OF DATA COLLECTION

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The data‘s are collected directly from the respondents with the help of questionnaire method and interview schedule. Percentage analysis as well as graphical analysis is used to interpret the data collected. 1.3. G. SATATISTICAL ANALYSIS

Percentage calculation is used for analyzing the data collected. The percentages of responses are then shown using tabular columns and charts. Inferences are drawn out by analyzing these charts. 1.3. H. LIMITATIONS  Some employees do not wish to disclose the truth to personal reasons.

 Time constrain is another problem.

 The topic under the study is vast and requires much information, but the

information available is very limited.

 The company is refusal to disclose several material facts because they want to

keep it very confidential.

1.4 SCOPE OF THE STUDY Page 47


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The study was conducted to know about the sustainability in KMML .The study looks how it affects the work of KMML and how the management of the company controls the economic sustainability. The project also analysis that while adopting new financial approaches in KMML help to increase the economic sustainability of the organisation.

1.5 LIMITATION OT THE STUDY

Time allotment was a constraint, making the study confined to a small sample size. Employees were busy with their day to day affairs and it was very difficult to collect information from them. The study may not be devoid of sampling errors. Any error or bias in the response may also affect the validity of findings.

1.6 CHAPTERISATION

CHAPTER 1

: INTRODUCTION TO THE STUDY

CHAPTER 2

: LITERATURE REVIEW

CHAPTER 3 and 4

: EMPIRICAL RESULTS

CHAPTER 5

: SUMMARY AMD CONCLUSION

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CHAPTER II LITERATURE REVIEW

Theoretical Review of Economic Sustainability Introduction Page 49


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The word sustainability is derived from the Latin sustinere. Dictionaries provide more than ten meanings for sustain, the main ones being to ―maintain", "support", or "endure‖. However, since the 1980s sustainability has been used more in the sense of human sustainability on planet Earth and this has resulted in the most widely quoted definition of sustainability and sustainable development, that of the Brundtland Commission of the United Nations on March 20, 1987: ―sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.‖ As illustrated below, a widely accepted definition of Economic Sustainability is: ―maintenance of capital, or keeping capital intact.‖ This is compatible with the definition of income provided by J ohn Hicks, the co-winner of the 1972 Sveriges Riksbank Prize

in Economic Sciences, which states that an individual can consume during a period and still be as well off at the end of the period. The individual, therefore, consumes valueadded (interest) rather than his capital.

MEANING

Economic sustainability is not just about achieving economic growth year on year. It‘s about understanding that economic growth is only sustainable if it simultaneously improves our quality of life and the environment. Some would argue that sustainability is not economically based or economically feasible. They would argue that business cannot profit through sustainability, yet nothing could be further from the truth. Sustainability makes perfect business sense and it will continue to be a defining characteristic of successful businesses of the future. Financial success is key to achieving sustainability. Bankrupt businesses are not sustainable.

Some define sustainability as economic development with minimal environmental degradation, or equitable development that is environmentally sound. Understanding and adopting economic sustainability includes broadening decision-making criteria for

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business investments and partnerships. It means taking the lead and doing your part to "move industry." ECONOMIC SUSTAINABILITY

Economics is important to sustainability because of its broader meaning as a social science that explains the production, distribution, and consumption of goods and services. Sustainable economy consists of sub-themes, such as:  Investment in people and equipment for a competitive economy,  Job opportunities,  Vibrant local economy,  Services are accessible,  Creation of new markets and opportunities for sales growth,  Cost reduction through efficiency improvements,  Reduced energy and raw material inputs, and  Creation of additional added value, etc.

Part of sustainability is changing the way things are valued to take into consideration the economic losses due to lost or degraded natural resources, and expand the scope of concern from short term to long term impacts. Once this is done sustainable development will be revealed to be a more economically beneficial option than current development patterns. The key contribution of the construction industry to economic sustainability is manifested through the sustained and efficient use of resources and materials, sustained employment opportunities through formal construction and sustained investment and capital formation opportunities for the economy.

DEFINITION

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H. E. Daly { Daly, H. E., “ Allocation, Distribution and Scale: Towards an Economics which is Efficient, Just and Sustainable ,” Ecol. Econ., 6(3), 185– 193 (1992) } made an extremely useful suggestion in 1992, namely that a third criterion be added to the traditional economic criteria of allocation and efficiency, i.e., scale. The scale criterion is added to constrain throughput growth, i.e., the flow of material and energy (which together defines natural capital) from environmental sources to sinks. It is to be noted that, traditional economic theory in the past has only rarely been concerned with natural capital (such as ‗healthy air‘ and ‗preserved forests‘ for instance). Indeed, at the time he was writing, the father of modern economics did not have a clue that there would one day be serious constraint on the natural system, which he assumed as infinite. The world has evolved so much that it would appear today the free-market society is holding the environment and our social systems for ransom (as opposed to what Smith believed, namely that, in the market society, self-interested, profit-hungry individuals hold up their fellow citizens for ransom{Smith, A., “ An Inquiry into the Nature and Causes of the Wealth of Nations ,” London: Methuen and Co., Ltd., Edwin Cannan, 5th Edition, 1904 (first published in 1776).})

"The business of business is business" Milton Friedman

"Economic growth can and should occur without damaging the social fabric of a community or harming the environment".2 US President’s Council on Sustainable Development

"Maintaining high and stable levels of economic growth is one of the key objectives of sustainable development. Abandoning economic growth is not an option. But sustainable development is more than just economic growth. The quality of growth matters as well as the quantity." UK Government Annual Report 2000, January 2001

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Economic Sustainability is: ―maintenance of capital, or keeping capital intact .‖ This is compatible with the definition of income provided by John Hicks, the co-winner of the 1972 Sveriges Riksbank Prize in Economic Sciences

The Economics of Sustainability: A Review of J ournal Articles

Concern about sustainability is almost as old and enduring as the dismal science itself, even though the word itself has come into fashion only in the past decade or so. In 1798, Malthus (1798/1976) worried about how Britain‘s apparently inexorable rise in population could be sustained from a finite amount of land. In 1865, Jevons (1865/1977) wondered how Britain‘s ever -increasing energy consumption could be sustained from finite supplies of coal. In 1952, the President‘s Materials Policy Commission (1952) was concerned about the sustainability of the American economy‘s postwar growth, given its prodigious wartime increase in the consumption of nonrenewable minerals from apparently finite supplies. In 1972, Meadows and others pondered the sustainability of the whole of industrial civilization, given the ultimate finiteness of the planet‘s capacities to provide material inputs to modern economies (and to assimilate their waste outputs) in The Limits to Growth.

The Limits to Growth, and the general fear of "running out" that it inspired in some quarters, provoked a response from mainstream economists, especially Dasgupta and Heal (1974), Solow (1974), and Stiglitz (1974). Their analyses of the impact of nonrenewable resources on existing theories of economic growth have continuing significance for the economics of sustainability; in retrospect, it seems a little surprising that the debate largely rested there for the next decade, apart from a few noteworthy developments. Economists interested in sustainability issues returned to the scene in the late 1980s with the publication of Our Common Future by the World Commission on Environment and Development (WCED 1987). This publication helped to launch a new agenda for both development and environmental economics. It voiced new and urgent environmental concerns (deforestation, desertification, the loss of biodiversity, the enhanced greenhouse effect, and the effects of poverty on the environment in mainly Page 53


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developing countries) that were especially relevant to developing countries and the global environment. It thereby challenged many of the fundamental goals and assumptions of the conventional, neoclassical economics of growth and development. In addition, it propelled the ideas of ―sustainability‖ and ―sustainable development‖ to the forefront of public debate. However, sustainability proved a remarkably difficult concept to define and use precisely. Overlapping and conflicting definitions rapidly proliferated. One result was that words such as ―sustainability‖ and ―sustainable‖ became common buzzwords— motherhood-and-apple-pie concepts mouthed approvingly by anyone from media moguls to

multinational

mining

companies — that

often

meant

nothing

more

than

―environmentally desirable,‖ if that. Indeed, when comparing successive versions of official environmental policy documents of the late 1980s and early 1990s, one can almost attribute the proliferation of sustainability rhetoric to a mere find-and-replace operation. The Economics of Sustainability: A Review of Journal Articles John C. V. Pezzey and Michael A. Toman

In 1987, the United Nations released the Brundtland Report, which included what is now one of the most widely recognised definitions:

"Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs." It contains within it two key concepts: 

The concept of 'needs', in particular the essential needs of the world's poor, to which overriding priority should be given; and



The idea of limitations imposed by the state of technology and social organization on the environment's ability to meet present and future needs."

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“The business of staying in business”

Yet another way of viewing economic sustainability is as ―the business of staying in business,‖ which stems from Milton Friedman‘s ―the business of business is business.‖ Staying in business therefore is about long-term survival. This is why economic sustainability is sometimes viewed as a concept in its own right (even though it is best viewed as one of the three intricately-linked preoccup ations of sustainable development.)

Sustainability measurement

Sustainability measurement is a term that denotes the measurements used as the quantitative basis for the informed management of sustainability. The metrics used for the measurement of sustainability (involving the sustainability of environmental, social and economic domains, both individually and in various combinations) are evolving: they include indicators, benchmarks, audits, sustainability standards and certification systems like Fairtrade and Organic, indexes and accounting, as well as assessment, appraisal and other reporting systems. They are applied over a wide range of spatial and temporal scales. Some of the best known and most widely used sustainability measures include corporate sustainability reporting, Triple Bottom Line accounting, World Sustainability Society and estimates of the quality of sustainability governance for individual countries using the Environmental Sustainability Index and Environmental Performance Index.

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Sustainable Development encompasses three general policy areas: Environmental, Economic, and Social

Sustainable Development

Fulfilling the needs of the Rodriguans while maintaining the quality of the natural resource base indefinitely

Environmental Sustainability

Ability of the environment to function properly indefinitely, i.e. Human activity only uses nature's resources at a rate at which they can be replenished naturally.

Economic Sustainability

―The widely accepted definition of economic sustainability is maintenance of capital, or keeping capital intact. Thus Hicks’s definition of income - the amount one can consume during a period and still be as well off at the end of the period – can define economic sustainability, as it devolves on consuming value-added (interest), rather than capital.” - Robert Goodland (World Bank) in Encyclopedia of

Global Environmental Change,

Social Sustainability

“Social sustainability encompasses 3 components: 1) Basic needs such as housing and sufficient income that must be met before capacity can develop; 2) Individual or human capacity or opportunity for learning and self development; and 3) Social or community capacity for the development of community organizations, and networks that foster interaction. The above components are underpinned by four guiding principles, namely Equity; Social inclusion and interaction; Security; and Adaptability. - Policy Report on Social Development, City of Vancouver, 2005

2002

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How companies determine its Sustainability? Many corporate decision makers and investors have traditionally taken a myopic view of valuation and decision making. The focus has been on short-term financial accounting numbers while ignoring sustainability factors, including longer-term economic and social impacts. Corporate myopia is one of the factors leading today‘s climate changes. The goal of a publicly-traded corporation, however, is not to maximize any set of accounting numbers or measures like return on investment (ROI). The fiduciary duty of a public corporation is to maximize shareholder value, while considering all available relevant information, including sustainability factors. Conversely, a public corporation‘s duty is not to value environmental or social impact directly, but instead to consider the ways in which it‘s environmental and social impacts affect shareholder value through future financial performance. The numerical calculation of shareholder value incorporating sustainability factors will allow corporate decision makers to match their strategic analysis with their intuition about environmental responsibility. Externalities are effects that are outside the corporation‘s scope of concern, i.e., that have no effect on shareholder value. Many factors that are seen as externalities from a myopic view become ―internalized‖ as sustainability factors when viewed through a more comprehensive lens. A myopic corporation that ignores sustainability factors will find that they are internalized eventually anyhow, but with greater costs and inefficiencies that reduce shareholder value

Sustainability is determined by how a company treats its assets, stakeholders, and environment.

Sustainability factors include the long-term health of company assets, e.g., factory maintenance and intellectual property protection. It is insufficient for management to focus exclusively on the current shareholders or on the traded price of the stock. Decisions must consider the other stakeholders, including customers, employees, partners, governments and other authorities, interest organizations, and local communities. Each of these stakeholders could.

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Governments will often need to intervene through incentives, taxes, fees, caps, or regulations to protect certain common goods like our air and lakes. This is because without protection, individual and corporate interests structurally doom some resources, especially non-renewable resources such as the earth‘s atmosphere, leading to climate change and the possibility of large costs for society. Through taxes on select common goods, the government can align the shareholder value of environmental and societal factors with the value they have to society. Because governments are likely to protect these resources, corporations will maximize shareholder value by proactively accounting for the possibility of government intervention. The environmental impacts of various creative strategies, possibly including reduced greenhouse emissions and usage of non-renewable natural resources like fossil fuels, will often need to be calculated and linked to shareholder value. Climate change is perhaps the best example of an environmental factor previously treated as a corporate externality, but that is now widely regarded as a sustainability factor. Corporations are now facing the painful reality that their direct and indirect carbon emissions are changing the global environment, including parts of the environment upon which some corporations directly depend. A corporation also needs to consider the indirect effects of their strategies. For example, electricity usage means the generation of carbon emissions. By reducing electricity usage, a corporation could possibly improve their reputation and prepare themselves for the chances of higher costs and government intervention in the future. MatthewPritsker

A growing share of financial assets are held by large institutional investors whose desired trades are large enough to move prices in markets. Because large investors‘ trades have ―price impact‖, asset markets are not perfectly liquid from their perspective. This illiquidity is likely to influence their decisions of which assets to hold and which assets to trade, and may influence how assets are priced. These insights on illiquidity and large investors motivated Pritsker‘s (2002) modeling

of liquidity in a market with large

investors. This article is a companion piece to P ritsker (2002) which reviews the literature on asset liquidity and on large investors and suggests ways in which these research areas can be combined. The standard competitive asset pricing paradigm assumes that individual investors‘ desired trades are sufficiently small that each investor can take prices as given and hence Page 58


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choose their asset holdings while ignoring the price impact of their trades. The pricetaking assumption is reasonable when applied to the trades of most individual investors, but it is less tenable when applied to the trades of institutional investors. The observed behavior of many institutional investors - breaking apart a large trade into several smaller trades, or building up or selling a position over days - suggests that their desired trades have price impact, and that large institutions account for price impact when selecting their trading strategy (Chan and Lakonishok (1995)). One notion of a perfectly liquid asset is an asset for which individuals can buy and sell all that they want at current prices. This notion of liquidity suggests that many markets are essentially perfectly liquid from the perspective of small investors since prices do not change much, if at all, in response to their desired trades. However, many markets are not perfectly liquid... John Hibbert

The price of liquidity – the liquidity premium – and its variability is currently the subject of enormous interest from accountants, actuaries, financial intermediaries and regulators. The outcome of the debate will have an impact on the future price of certain financial products and, arguably, the cost of finance for firms using the capital markets. There is a large body of theoretical and empirical evidence to support the view that liquidity is real and measurable. The primary purpose of this report is to provide a summary of the main conclusions of researchers, with the objective of refining liquidity premium estimation methods. V S Rama Rao

Liquidity Analysis gives the measure of the ability of a firm to meet its current and short term obligations. The higher the ratio the greater is the liquidity and vice versa. But greater liquidity implies that the firm has blocked a greater amount as idle funds which could have been put to better use and generated more returns for the firm. An efficient financial manager seeks to achieve a proper balance between liquidity on one hand and profitability on the other.

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CHAPTER III DATA ANALYSIS AND DISCUSSION

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Data analysis Data analysis is considered to be important step and heart of the research in research work. After collection of data with the help of relevant tools and techniques, the next logical step, is to analyze and interpret data with a view to arriving at empirical solution to the problem. The data analysis for the present research was done quantitatively with the help of both financial techniques and inferential statistics. The financial techniques like ratios, performance evaluation, and comparison of financial reports etc… and for the inferential statistics like questionnaire, ANOVAs.

Analysis and Interpretation TREND ANALYSIS

The financial statement may be analyzed by computing trends by series of increase. This method determines the direction upwards or downwards and involves the computation of the percentage relationship that each statement item bears to the same item in base year. One year is taken as the base year. Usually, the first year is taken as the base year. Trend percentage = Current Year amount/ Base Year amount × 100 RATIO ANALYSIS

A ratio is simple arithmetical expression of the relationship of one number to another .it may be defined as the indicator quotient of two mathematical expressions. In simple language ratio is one number expressed in terms of another can be worked out by dividing one number to another. CASH FLOW STATEMENT ANALYSIS

Cash Flow refers to the flow of cash into and out of a business over a period of time. The outflow of cash is measured by the money you pay every month to salaries, suppliers, and creditors. The inflows are the cash you receive from customers, lenders, and investors.

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FIRST STEP:Table No. 3.1 Trend Analysis of Sales Year

Sales

Trend Percentage

2005-2006

28967.07

100

2006-2007

29574.49

102.1

2007-2008

30748.69

106.1

2008-2009

41908.91

144.7

2009-2010

48398.20

167.1

Interpretation

Trend analysis of sales showing an increased trend during the study period. And in the year 2009-2010 it is very high.

Chart No.3.1 Trend Analysis of Sales 180 160 140 120 100 80 60 40 20 0 2005-2006

2006-2007

2007-2008

2008-2009

2009-2010 Page 62


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METHOD OF LEAST SQUARES TREND SALES FORECASTING OF KERALA MINERALS AND METALS LIMITED FOR 2011-2015 Table No 3.2 STRAIGHT LINE TREND OF SALES (AMOUNT IN CRORES)

Time Deviation Year

Sales(Y)

from the Mid

Square of

Year (X) M/Y

Deviation (X )

2

Trend Value

XY

(Yc)

2008

2006

289.67

-2

4

-579.74

256.94

2007

295.74

-1

1

-295.74

308.1

2008

307.48

0

0

0

359.26

2009

419.08

1

1

419.08

410.41

2010

483.98

2

4

967.96

461.57

∑XY= N=5

∑Y=1796.28

∑X=0

2

∑ X =10

511.56

Source: Annual Report.

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Chart No 3.2 STRAIGHT LINE TREND OF SALES 600 500 400 Actual Sales

300

Forecasted sales 200 100 0 2006

2007

2008

2009

2010

The equation of straight line is Yc = a+ bx Two normal equations are ∑Y = Na+b∑X 2

∑XY= a∑X+b∑X

Substituting the values given in the table, we get 1796.28 = 5a+0b

1

511.56 = 0a+10b

2

From solving the above equations we get a = 359.26 The straight line trend is Y= 359.26+51.16X

b = 51.16 3

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Table No 3.3 ESTIMATED SALES FOR 2011-2015 (AMOUNT IN CRORES) Year

Estimated Sales

2011

512.74

2012

563.9

2013

615.06

2014

666.22

2015

717.38

Inference:

From the above table it is inferred that the estimated sales in the year 2011 is 512.74 crores, in the year 2012 it will be 563.9 crores, it is 615.06 crores in the year 2013 and it will be 666.22 crores and 717.38 crores in the year 2014 & 2015 respectively. The estimated sales show an increasing trend from the year 2011 -2015.

CHART No 3.3 ESTIMATED SALES FOR 2011-2015

800 717.38

700

666.22 615.06

600 500

563.9 512.74

400

Estimated Sales

300 200 100 0 2011

2012

2013

2014

2015

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Table No.3.4 Trend Analysis of Cash Year

Cash in Crores

Trend Percentage

2005-2006

16090.35

100

2006-2007

8950.61

55.6

2007-2008

8827.10

98.6

2008-2009

14076.20

159.5

2009-2010

13808.32

98.1

Interpretation

The trend analysis of cash shows a vast increase in the year 2008-2009 there after it shows a decreasing trend.

Chart No.3.4 Trend Analysis of Cash

180 160 140 120 100

Trend Percentage

80 60 40 20 0 2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

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Table No. 3.5 Trend Analysis of Working Capital Year

Working Capital

Trend Percentage

2005-2006

20553.31

100

2006-2007

16635.83

80.9

2007-2008

13607.16

81.8

2008-2009

14006.85

102.9

2009-2010

14293.68

102.4

Interpretation

The analysis is shows that there is an increase in the Working Capital from 2008-2009 and 2009-2010.

Chart No.3.5 Trend Analysis of Working Capital 120 100 80 60

Trend Percentage

40 20 0

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

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Table No.3.6 Trend Analysis of Gross Profit Year

Gross Profit

Trend Percentage

2005-2006

6882.07

100

2006-2007

5714.61

83.0

2007-2008

8451.49

147.9

2008-2009

17466.78

206.7

2009-2010

22911.80

131.2

Interpretation

The trend of Gross Profit shows an increasing trend from the year 2006 & 2007 to 20082009. But afterwards it shows a decreasing trend. But it shows a favorable position.

Chart No.3.6 Trend Analysis of Gross Profit 250

200

150 Trend Percentage 100

50

0 2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

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Table No.3.7 Trend Analysis of Manufacturing Cost

Year

Variable Cost

Trend Percentage

2005-2006

22085.60

100

2006-2007

23859.88

108.0

2007-2008

22297.20

93.5

2008-2009

24442.13

109.6

2009-2010

25486.40

104.3

Interpretation

The analysis of manufacturing cost shows high variations in ever y year. From the year 2008-2009 it shows a decreasing trend.

Chart No.3.7 Trend Analysis of Manufacturing Cost 115 110 105 100

Trend Percentage

95 90 85 2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

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CURRENT RATIO Current ratio is the most common ratio for measuring liquidity. It represents the ratio of current assets to current liabilities. It is also called working capital ratio. Current assets are those, the amount of which can be realized with in a period of one year. It is calculated by dividing current asset by current liabilities.

Current Ratio = Current Assets/Current Liabilities

Table No.3.8 Current Ratio Year

Current assets

Current liabilities

Ratio

2005-2006

27130.94

6577.63

4.1

2006-2007

22531.03

5895.47

3.8

2007-2008

23688.82

10081.66

2.4

2008-2009

26044.46

12037.61

2.2

2009-2010

25961.61

11667.93

2.2

Sources: Annual Report Interpretation

The current ratio of a firm measures its short term solvency i.e. its ability to meet short term obligation. In a sound business a current ratio of 2:1 is considered as an ideal one. It provides a margin of safety to the creditors. The current ratio is satisfactory. It achieves the standard ratio of 2:1. It shows that the firm has the ability to cover its current liabilities with its current assets.

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Chart No.3.8 CURRENT RATIO 4.5 4.1 3.8

4 3.5 3

2.4

o2.5 i t a R 2

2.2

2.2

2008-2009

2009-2010

1.5 1 0.5 0 2005-2006

2006-2007

2007-2008

Year

ACID TEST RATIO (QUICK RATIO)

This ratio is also known as Liquidity ratio. It is the measure of the instant debt paying ability of the business enterprise. It is determined by dividing quick assets by current liabilities. The term quick asset refers to current assets which can be converted into cash immediately. It comprises all current assets except stock and prepaid ex penses.

Quick ratio =

Quick Assets / Current Liabilities

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Table No.3.9 Acid Test Ratio Year

Quick Asset

Current liabilities

Ratio

2005-2006

19377.92

6577.63

3.0

2006-2007

10557.07

5895.47

1.6

2007-2008

11556.33

10081.66

1.2

2008-2009

18188.95

12037.61

1.2

2009-2010

19022.91

11667.93

1.6


A Quick Ratio of 1:1 is considered satisfactory as a firm can easily meet all its current liabilities. If the ratio is less than 1:1, then the financial position of the firm shall be deemed to be unsound. Here the company is in satisfactory level in all the years. That is the entire quick ratio is greater than one. It shows that the solvency position of the firm is good.

Chart No.3.9 ACID TEST RATIO 3.5 3 3 2.5

o 2 i t a1.5 R

1.6

1.6 1.2

1.2

2007-2008

2008-2009

1 0.5 0 2005-2006

2006-2007

2009-2010

Year Page 72


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CASH TURN OVER RATIO Cash Turnover Ratio = Net sales/cash & Bank Balance

Table No.3.10 Cash Turnover Ratio Year

Sales

Cash& bank balance

Ratio

2005-2006

28987.07

16090.35

1.8

2006-2007

29574.49

8950.61

3.3

2007-2008

30748.69

8827.10

3.5

2008-2009

41908.91

14076.20

3.0

2009-2010

48398.20

13808.32

3.5


The cash turnover ratio shows stable in the stud y period except from the year 2005-2006.

Chart No.3.10 CASH TURNOVER RATIO 4 3.3

3.5

3.5

3.5 3

3 2.5

o i t a R

2

1.8

1.5 1 0.5 0 2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

Year

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INVENTORY TURN OVER RATIO

Inventory turnover ratio is the relationship between the cost of goods sold and the capital employed. This ratio is calculated to measure the efficiency or the effectiveness with which a firm is utilizing its resources or the capital employed. As capital is invested in a business to make sales and earn profits, this ratio is an indicator of the overall profitability of a business. Inventory Turnover Ratio = Cost Of Goods Sold/ Average Inventory

Table No.3.11 Inventory Turnover Ratio Year

Cost of goods sold

Inventory

Ratio

2005-2006

22085.00

7753.02

2.9

2006-2007

23859.88

11974.24

2.0

2007-2008

22297.20

12132.43

1.8

2008-2009

24442.13

7855.51

3.1

2009-2010

25486.40

6938.70

3.7

Sources: Annual Report

Interpretation

The inventory turnover ratio shows fluctuations during the years. This is due to increase in cost of goods sold and decreases in the net working capital. In the year 2009 and 2010 the inventory turnover ratio is high because the rise in price a large inventory may be kept by the business this will lead to over stocking or over valuation.

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Chart No.3.11 INVENTORY TURN OVER RATIO 4

3.7

3.5

3.1

2.9

3 2.5 o i t a R

2

1.8

2

1.5 1 0.5 0 2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

Year

FIXED ASSET TURN OVER RATIO

The fixed-asset turnover ratio measures a company‘s ability to generate net sales from fixed asset investments-specifically property, plant and equipment- net of depreciation. A higher fixed-asset turnover ratio shows that the company h as been more effective in using the investment in fixed asset to generate revenues. Fixed Asset Turnover Ratio= Net Sales/ Fixed Asset

Table No.3.12 Turnover of Fixed Asset Ratio Year

Sales

Fixed Assets

Ratio

2005-2006

28987.07

10157.90

2.9

2006-2007

29574.49

11746.84

2.5

2007-2008

30748.69

12862.52

2.4

2008-2009

41908.91

17942.43

2.3

2009-2010

48398.20

17803.97

2.7

Sources: Annual Report Page 75


2012

Interpretation

If the ratio is greater than one, it means that creditors fund have been used to acquire a part of the fixed assets. Due to fluctuations in sales and decrease the value of assets the turnover of Fixed Assets ratio shows fluctuations during the study period. Here the company‘s fixed assets ratio is satisfactory.

Table No.3.12 TURNOVER OF FIXED ASSET RATIO 3.5 3

2.9

2.7

2.5

2.4

2.3

2006-2007

2007-2008

2008-2009

2.5 o 2 i t a R1.5

1 0.5 0 2005-2006

2009-2010

Year

DEBTORS TURNOVER RATIO

Debtor‘s turnover ratio is the relationship between the net credit sales and average debtors. This ratio is calculated calculated to measure the efficiency or the effectiveness with which the firm is utilizing its resources. As capital is invested in a business to make sales and earn profit, this ratio is an indicator of all the overall profitability of business.

Debtors Turnover Ratio = Net Credit Sales/ Average Debtors

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Table No.3.13 Debtors Turnover Ratio Year

Sales

Debtors

Ratio

2005-2006

28987.07

2612.57

11.1

2006-2007

29574.49

1453.40

20.3

2007-2008

30748.69

2606.48

11.8

2008-2009

41908.91

3203.56

13.1

2009-2010

48398.20

4707.92

10.3


The Debtors turnover ratio ratio showing, the increasing trend during the years. Generally the higher value of Debtors turnover ratio shows more efficient in the management of Debtors.

Chart No.3.13 DEBTORS TURNOVER RATIO 25 20.3 20 15

o i t a R

11.8

11.1

13.1 10.3

10 5 0 2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

Year

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GROSS PROFIT RATIO

Gross profit ratio means the relationship of gross profit to net sales and is usually represented as a percentage. Net sales means sales sales minus sales return. return.

Gross Profit Ratio=Gross Profit/Net Sales x 100

Table No.3.14 Gross profit Ratio Year

Gross Profit

Sales

Ratio

2005-2006

6882.07

28987.07

23.7

2006-2007

5714.61

29574.49

19.3

2007-2008

8451.49

30748.69

27.5

2008-2009

17466.78

41908.91

41.7

2009-2010

22911.80

48398.20

47.3


Interpretation

The Gross profit ratio shows fluctuations during the years. From the year 2007-2008 the gross profit ratio shows increasing trend, this happened due to decrease in cost of goods sold and increase in other source of income.

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Chart No.3.14 GROSS PROFIT RATIO 50

47.3

45

41.7

40 35 30 o i t 25 a R

27.5 23.7 19.3

20 15 10 5 0 2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

Year

NET PROFIT RATIO

Net Profit Ratio is used to measure the overall profitability and hence it is very use full to proprietors. The Ratio is very useful as if the net profit is not sufficient; the firm shall able to achieve a satisfactory return on its investment. This ratio also indicates the firm‘s capacity to face adverse economic condition such as price, competition, low demand, etc. obviously, higher the ratio the better is the profitability. But while interpreting the ratio it should be kept in minds that the performance of profits also is seen in relation to investments or capital of the firm and not only in relation in sales. Net Profit Ratio= Net Profit/ Sales x 100

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Table No.3.15 Net profit Ratio Year

Net Profit

Sales

Ratio

2005-2006

862.61

28987.07

3.0

2006-2007

1237.15

29574.49

4.2

2007-2008

612.74

30748.69

2.0

2008-2009

449.76

41908.91

1.1

2009-2010

6063.23

48398.20

12.5


In the year 2009-2010 net profit shows a vast increase, this is due to decrease in cost of goods and increase in other source of income.

Chart No.3.15 NET PROFIT RATIO 14

12.5

12 10

o 8 i t a R 6 4

4.2 3 2 1.1

2 0

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

Year

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OPERATING RATIO

A ratio of a company‘s operating expenses to its sales or revenue. A lower operating ratio is considered ideal because it indicates that, in the event of decline in sales or revenue, a company will maintain profitability. A ratio that shows the efficiency of management by comparing operating expense to net sale.

Operating Ratio= Cost of Goods Sold+ Operating Expenses / Sales x 100

Table No.3.16 Operating Ratio Year

Operating Cost

Sales

Ratio

2005-2006

29698.36

28987.07

102.5

2006-2007

32067.78

29574.49

108.4

2007-2008

30083.95

30748.69

97.8

2008-2009

36005.00

41908.91

85.9

2009-2010

39503.43

48398.20

81.6


Interpretation

During the study period the operating ratio of the company is high that is due to increase in the cost of goods sold.

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Chart No.3.16 OPERATING RATIO 120 108.4 102.5 97.8

100

85.9

81.6

80

o i t a R

60

40

20

0 2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

Year

RETURN ON INVESTMENT RATIO

It is the ratio of net profit to share holder‘s investment. It is the relationship between net profit (after interest and tax) and share holder‘s/ proprietor‘s fund. This ratio is one of the most important ratios used for measuring the overall efficiency of a firm.

Return on Investment Ratio= Net Profit / Capital Employed x 100

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Table No.3.17

Return on Shareholder’s Investment Ratio Year

Net Profit

Capital Employed

Ratio

2005-2006

862.61

43075.03

2.0

2006-2007

1237.15

43850.07

2.8

2007-2008

612.74

44126.96

1.4

2008-2009

449.76

44758.15

1.0

2009-2010

6063.23

49434.26

12.3


This ratio reveals how well the resources are being used higher the ratio is better the result. During the year 2006-2007 the ratio shows the declining trend. But in the year 2009-2010 the ratio shows an increase this is due to the effective utilization of resources.

Table No.3.17

RETURN ON SHAREHOLDER’S INVESTMENT RATIO 14

12.3

12 10 o i t a R

8 6 4 2

2.8

2

1.4

1

2007-2008

2008-2009

0 2005-2006

2006-2007

2009-2010

Year

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EARNINGS PER SHARE

The earnings per share ratio mean the relationship of percentage changes in net profit. Available to Equity Share Holders to number of Equity Shares issued and is usually represented as a percentage. This ratio would be the difference between Net Profit available to Equity Share holders and number of Equity Shares issued.

Earnings per Share= Net Profit Available to Equity Share Holders /Number of Equity Shares

Table No.3.18 Earnings per Share Ratio Year

Profit

No of Equity Shares

Ratio

2005-2006

862.61

3093.27

27.9

2006-2007

1237.15

3093.27

40.0

2007-2008

612.74

3093.27

19.8

2008-2009

449.76

3093.27

14.5

2009-2010

6063.23

3093.27

196.0


During the period the Earning per Share shows a variation. In the year 2009-2010 the ratio shows increasing trend this is due to total asset are invested are not utilizing properly.

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Table No.3.18 EARNINGS PER SHARE RATIO

250

196

200

150 o i t a R

100

50

40 27.9

19.8

14.5

2007-2008

2008-2009

0 2005-2006

2006-2007

2009-2010

Year

DEPRECIATION COST RATIO

The depreciation cost ratio means the relationship of percentage changes to depreciation and sales and usually represented as a percentage. This ratio would be the difference between depreciation and sales.

Depreciation Cost Ratio=Depreciation/sales x 100

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Table No.3.19 Depreciation Cost ratio Year

Depreciation

sales

Ratio

2005-2006

738.63

28967.07

2.6

2006-2007

764.36

29574.49

2.6

2007-2008

836.69

30748.69

2.7

2008-2009

884.45

41908.91

2.1

2009-2010

1245.94

48398.00

2.6


The Depreciation cost ratio is stable during the stud y period.

Chart No.3.19 DEPRECIATION COST RATIO 3 2.6

2.6

2.7

2.6

2.5 2.1 2

o i t 1.5 a R 1

0.5

0 2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

Year

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ADMINISTRATIVE COST RATIO

Gross Profit Ratio means the relationship of administrative cost to sales and is usually represented as a percentage.

Net sales mean total sales minus sales return.

Administrative Cost would be the difference between administrative cost and sales.

Administrative Cost Ratio=Administrative Cost/Sales x 100

Table No.3.20 Administrative Cost Ratio Year

Administrative Cost

sales

Ratio

2005-2006

613.23

28967.07

2.1

2006-2007

583.00

29574.49

2.0

2007-2008

521.73

30748.69

1.7

2008-2009

912.34

41908.91

2.2

2009-2010

3814.37

48398.00

7.9


Interpretation

The Administrative cost ratio is showing fluctuations during the study period. The ratio is very high in the year 2009-2010

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Table No.3.20 ADMINISTRATIVE COST RATIO 9 7.9

8 7 6 o 5 i t a R4

3 2.1

2

2

2.2 1.7

1 0 2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

Year

MANUFACTURING COST RATIO

Manufacturing Cost Ratio means the relationship of manufacturing cost of materials consumed to sales and is usually represented as a percentage. Manufacturing Cost Ratio profit would be the difference between total materials consumed for manufacturing and sales.

Manufacturing Cost Ratio=Manufacturing Cost of Materials Consumed/ sales x 100

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Table No.3.21 Manufacturing Cost Ratio Year

Variable Cost

sales

Ratio

2005-2006

22085.60

28967.07

76.3

2006-2007

23859.88

29574.49

80.7

2007-2008

22297.20

30748.69

72.5

2008-2009

24442.13

41908.91

58.3

2009-2010

25486.40

48398.00

52.7


The manufacturing cost ratio showing a decrease in trend after 2006-2007 this is because of the proper utilization of the inputs. And also the decrease in the price of cost of goods sold.

Chart No.3.21 MANUFACTURING COST RATIO 90 80

76.3

80.7 72.5

70 58.3

60

52.7

o 50 i t a R40

30 20 10 0 2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

Year

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WORKING CAPITAL TURN OVER RATIO

A measurement comparing the depletion of working capital to the generation of sales over a given period. This provides some useful information as to how effectively a company is using its working capital to generate sales. Working Capital Turnover Ratio=Net Sales/Net Working Capital Net Working Capital= Current Asset-Current Liabilities

Table No.3.22 Working capital Turnover Ratio Year

Sales

Working Capital

Ratio

2005-2006

28967.07

20553.31

1.4

2006-2007

29574.49

16635.83

1.8

2007-2008

30748.69

13607.16

2.3

2008-2009

41908.91

14006.85

3.0

2009-2010

48398.00

14293.68

3.4


This ratio reflects the turnover of the firm‘s net working capital in the course of the year. The higher ratio indicates the efficiency utilization of working capital. Here the working capital turnover ratio shows an increasing trend. It indicates that working capital is utilizing its funds in the proper way.

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Chart No.3.22 WORKING CAPITAL RATIO 4 3.4

3.5 3 3 2.5 o i t a R

2.3

2

1.8 1.4

1.5 1 0.5 0

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

Year

DEGREE OF OPERATING LEVERAGE

The degree of operating leverage ratio means the relationship of percentage changes in operating leverage to percentage changes in sales and is usually represented as a percentage. This ratio would be the difference between percentage changes in operating profit and sales. Degree of Operating Leverage=percentage changes in operating profit/sales*100 Contribution=Sales-Variable Cost

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Table No.3.23 Gross Degree of Operating Leverage Year

Contribution

EBIT

Ratio

2005-2006

6881.41

1782.05

3.9

2006-2007

5714.61

2243.24

2.6

2007-2008

8451.49

1043.63

8.1

2008-2009

17466.78

4674.26

3.7

2009-2010

22911.60

9245.02

2.5


The Degree of operating leverage ratio shows variation through the study period. The ratio is high in 2007-2008.

Chart No.3.23 GROSS DEGREE OF OPERATING LEVERAGE 9 8.1 8 7 6 o 5 i t a R4

3.9

3

3.7 2.6

2.5

2 1 0 2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

Year

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Interpretation About Above Financial Analysis

Current economic sustainability is found out through the above financial tools. This analysis assumes that economic sustainability is integrally linked to the environmental and social outcomes an organisation achieves. And while good financial and broader economic performance might mean that companies survive in the short-term, it does not necessarily secure a long-term economic future, nor does it guarantee positive environmental or social outcomes. If the predictions about sustainable development are accurate, neglecting the environment and social issues may be a barrier to long-term survival at both the micro or macro level. Consequently, those companies that can effectively manage their environment and the social will also help make them economically sustainable. Then the second step is to identify the proper function of the organisation (finance Department). We can identify the function of the finance department through observation and Survey with the help of the company guide.

SECOND STEP:The following are the main function of the financial department of the KMML:-

The company maintains a clear and perfect accounting system. The main activity of the Finance Department is Working Capital Management. Preparation of Fund statement, cash Flow Statement, Balance Sheet, Profit and Loss Account etc are also the activities of Finance Department. Secretarial work relating to Board comes under the review of the Finance Department. Most of the activities carried out by the Finance Department are pertaining to long term and short term requirements of the operation, closing purchase bill, maintaining the account of contractors, subcontractors, income tax deduction, salary discrepancy, dealing with the financial institutions with imports and exports are also the functions of the Financial Department.

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Functions in Finance Department Recording and analysis of purchases:

The finance department of the company keeps the accounts of purchase of spare parts, chemicals, etc. and accounting entries are made in the books of accounts of the company on day to day basis, on the basis of bills and supporting vouchers of each item. Each voucher is essentially numbered to avoid discrepancy. The department analyses the details of purchases afterwards. Salary Section and Pay Divisions:

The main function of the department is preparation and disbursement of salary of office members of office staff and workers. The department keeps the salary register pertaining to each of the above sections, which facilitates charges in salary due to granting of annual increments and deduction due from the salary. The disbursements of salary are credited to the amount of the respective bank account of the employee. The department sends a detailed list of salaries to the respective departments.

Sales and Revenue Accounting:

The department is calculating and paying sales tax and central excise duty to the concerned Government every year.

Cash and Bank Transactions:

The department does all the matters relating to the day to day cash transactions. They receive and make payment for purchase and sales. The company is allowed to collect cash up to the limit of Rs. 20000/- is carried out by cheque or DD as per direction of the tax authority.

Costing:

Annual budget and cost sheet is prepared at the outset of every year and on with the basis of department fixes the floor price of each product of the company.

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Calculation of Depreciation:

The department calculates the depreciation is provided on the straight line method in the case of plant & machinery of Titanium Pigment Unit and written down value method in case of other assets of the company.

Auditing

Auditors are appointed by the Government for a period of one Year. There exist an external audit and internal audit. Internal Audit: - These are part of the organization. There is an internal auditing sector. They are in the charge of periodical audit External Audit: - They are as follows:

Statutory Audit



Account General‘s Audit



Inspection Audit



Sales Tax Audit



Income Tax Audit



Cost Audit

Interpretation about the Functions of Financial Department

The finance department of the KMML follows all the basis and necessary function of a manufacturing firm and follows the top level instruction and the duty at the right time at the right place. The final step is to identify, the finance department are follow the rules and regulation of the company (Company By-law and Articles of Association) and also identify any new finance approach adopting year to year. It should study with the help of questionnaire and survey method.

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FINAL STEP:-

Under this method convenient sampling method is used. Here, the list of employees are taken based on the convenience, they are short listed 20 employees from the finance department. And their opinion of about adopting new financial approaches for increasing economic sustainability of the company is studied through the help o a scheduled questionnaire.

Table No.3.24 Respondents Details (General Information)



General Information Or Personal Data

Category

Response Male [ 15 ] Female [ 5 ]

Gender 18-30 [ 3 ] 31-40 [ 7 ] 41-50 [ 4 ] Above 51 [ 6 ] Age Diploma [ ] Graduation [ 5 ] Post Graduation [ 15 ] Technical [ ] Educational Qualification 0-1 Year [ 2 ] 1-5 Year [ 4 ] 5-10 Year [ 5 ] 10-15 Year [ 9 ] Year of Experience Sources: Questionnaire

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Chart No.3.24 Respondents Details (General Information) 25

20

15

Series 4 Series 3 Series 2

10

Series 1 5

0 Gender

Age

Educational Qualification

Year of Experience

Series 1

Show {Gender-Male, Age- 18-30, Educational Qualification- Diploma, Years of Experience- 0-1 year}

Series 2

Show {Gender-Female, Age- 31-40, Educational Qualification- Graduation, Years of Experience- 1-5 year}

Series 3

Show {Age- 41-50, Educational Qualification- Post Graduation, Years of Experience- 5-10 year}

Series 4

Show {Age- above 51, Educational Qualification- Post Graduation, Years of Experience- 10-15 year}

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Table No.3.25 Respondents Details (Information Related To Study) 

Information Related To Study.

Questions I.

Effectiveness of financial planning and budgeting

Response Highly effective [ 6 ]

Partly Effective [ 12 ]

Effective [ 2 ] II. Is there adequate Internal Control Procedure commensurate with the size and nature of Company‘s business III.

(i) There is an internal audit system commensurate with company‘s size and nature of the business

(ii) Whether proper action is taken by the management based on Internal Audit Report

Yes

[ 13 ]

Highly agree [ 7 ] Agree [ ]

Yes

Ineffective [ ]

No

[7]

Partly agree [ 11 ] Disagree [ 2 ]

[ 11]

No

[9]

IV. Opinion on the effectiveness of the system of Perpetual Physical Verification of Inventory

Highly effective [ 1 ] Effective Partly [ 15 ]

V. Are you satisfied on the techniques followed in Inventory Control Management

Highly satisfied [ 3 ] Partly satisfied [ 7 ]

VI. Your opinion on the value of closing stock of Inventory for the year-end

Very high [ 2 ] High [ 6 ]

VII. Are you satisfied with the system followed for write off of obsolete/outdated materials

Highly satisfied [ 1 ] Partly satisfied [ 8 ]

effective [ 4 ]

Satisfied [ 8 ]

Ineffective[ ]

Dissatisfied [ 2 ]

Adequate [ 12 ] Low [ ]

Satisfied [ 8 ]

Dissatisfied [ 3 ]

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VIII. Rate the effectiveness of existing system of MIS

Highly effective [ 5 ] Effective [ 7 ]

IX. Rate the effectiveness of existing management information system in integrating production, planning and control

Highly effective [ 2 ] Effective [ 5 ]

2012

Partly Effective [ 6 ] Ineffective [ 2 ] Partly Effective [ 11 ] Ineffective [ 2 ]

Sources: Questionnaire

Chart No.3.25 Respondents Details (Information Related To Study) 25

20

15 Ineffective Effective 10

Partly Effective Highly effective

5

0

INTERPRETATION

The above diagram we can see that every financial planning and procedure of the company is no fully effective so the company adopt new financial approaches for achieving their objective with a given period of time by the organisation. It should help to increase the economic sustainability of the KMML. This study is concerned with Page 99


2012

economic sustainability – which at its simplest can be interpreted as how companies stay in business. It is clearly important to situate this within the general framework for sustainability, though. Sustainability refers to the notion that anything that can go on being done on an indefinite basis is sustainable; anything that cannot is unsustainable. By common consensus, sustainability is thought to have an economic, a social and an environmental component. All three overlap, and they interact. The following are the areas by the organisation (KMML) adopting new financial approach es:1. Preparation of good financial plan and budget and it should follow by the organisation for the following year. 2. Plan an adequate Internal Control Procedure commensurate with the size and nature of Company‘s business. 3.

Evaluate yearly about the internal audit system commensurate with company‘s size and nature of the business.

4. Take proper action is taken by the management based on Internal Audit Report. 5.

To adopt an effective way for the Perpetual Physical Verification of Inventory.

6. To provide adequate information and support to the Inventory Control Management by the organisation it helps avoiding wastage. 7. Calculate value of closing stock of Inventory for the year-end.

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CHAPTER IV FINDINGS AND SUGGESTIONS

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FINDINGS Emphasis in the report is given on the findings of most practical interest and on the implication of these findings. The suggestions of the actions on the basis of the findings from the study are made in this section of report. Conclusion is a detailed summary of the findings and the policy implication drawn the results be explained. Findings shows below have been found out from the analysis. The analysis is to find out the financial position and performance of the company. It will help to identify the needs of adopting new financial approaches for increasing the economic sustainability of THE KMML. The major findings from the study are as follows: KMML is an unlevered firm. The company‘s sources of funds are only from

internal capital. No external funds are made use of in financial operation.  The higher current ratio indicates greater margin of safety. There for the firm has

to improve its current assets and maintain minimum balance of finished goods for future years.  The quick ratio is satisfactory over the period of the study. The quick ratio is more

favorable in the year 2009.  The cash turnover ratio shows stable in the study period except from the year

2005-2006.  The inventory turnover ratio shows a fluctuating trend. But the last two years

shows a high turnover that indicates brisk sales.  The fixed asset turnover ratio shows fluctuations during the study period Due to

fluctuations in sales and decreases the value of assets. Here the company‘s fixed assets ratio is satisfactory.  The Debtors turnover ratio showing increasing trend during the years. Generally

the higher value of Debtors turnover ratio shows more efficient in the management of Debtors.  The company‘s gross profit ratio fluctuations during the years. From the year

2007-2008 the gross profit ratio shows increasing trend, this happened due to decrease in cost of goods sold and increase in other source of income. Page 102


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 In the year 2009-2010 net profit shows a vast increase, this is due to decrease in

cost of goods and increase in other source of income.  During the study period the operating ratio of the company is high that is due to

increase in the cost of goods sold.  During the year 2006-2007 the Return on investment ratio shows the declining

trend. But in the year 2009-2010 the ratio shows an increase this is due to the effective utilization of resources. 

During the period the Earning per Share shows a variation. In the year 20092010 the ratio shows increasing trend this is due to total asset are invested are not utilizing properly.

 The Depreciation cost ratio is stable during the study period.  The Administrative cost ratio is showing fluctuations during the study period. The

ratio is very high in the year 2009-2010  The manufacturing cost ratio showing a decrease in trend after 2006-2007 this is

because of the proper utilization of the inputs. And also the decrease in the price of cost of goods sold.  The working capital turnover ratio shows an increasing trend. It indicates that

working capital is utilizing its funds in the proper way.  The Degree of operating leverage ratio shows variation through the study period.

The ratio is high in 2007-2008.  The analysis is shows that there is an increase in the Working Capital from 2008-

2009 and 2009-2010.  The trend analysis of working capital shows that there is an increase in the

Working Capital from 2008-2009 and 2009-2010.  The trend analysis of cash shows a vast increase in the year 2008-2009 there after

it shows a decreasing trend. 

The trend analysis shows that the Debtors having high variations in every year, and in the year 2007-2008 it is very high.

 The trend of Gross Profit shows an increasing trend from the year 2006 & 2007 to

2008-2009. But afterwards it shows a decreasing trend. But it shows a favorable position. Page 103


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 The analysis of manufacturing cost shows high variations in ev ery year. From the

year 2008-2009 it shows a decreasing trend. 

Current economic sustainability is found out through the above financial tools. This analysis assumes that economic sustainability is integrally linked to the environmental and social outcomes an organisation achieves. And while good financial and broader economic performance might mean that companies survive in the short-term, it does not necessarily secure a long-term economic future, nor does it guarantee positive environmental or social outcomes. If the predictions about sustainable development are accurate, neglecting the environment and social issues may be a barrier to long-term survival at both the micro or macro level. Consequently, those companies that can effectively manage their environment and the social will also help make them economically sustainable.

 The finance department of the KMML follows all the basis and necessary

function of a manufacturing firm and follows the top level instruction and the duty at the right time at the right place.  The financial planning and procedure of the company is no fully effective so the

company adopt new financial approaches for achieving their objective with a given period of time by the organisation. It should help to increase the economic sustainability of the KMML. This study is concerned with economic sustainability – which at its simplest can be interpreted as how companies stay in business. It is clearly important to situate this within the general framework for sustainability, though. Sustainability refers to the notion that anything that can go on being done on an indefinite basis is sustainable; anything that cannot is unsustainable. By common consensus, sustainability is thought to have an economic, a social and an environmental component. All three overlap, and they interact

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SUGGESTIONS

Suggestions are based on the findings that got from the analysis. Suggestions shows below are used on the analysis is to find out the financial approaches leads to increase the economic sustainability of a manufacturing industry (KMML). The following are suggestions from the study are as follows:-

 A systematic and well planned working policy may be formulated and put in to

practice so that Liquidity position of the firm remains stable.  Company should increase the investment to make a profit for utilizing

accumulated reserves.  The company‘s Net profit ratio is satisfactory. The company has to reduce its

expenses and increase the volume of sales will help to maintain the position.  The company should take necessary actions for increasing the profitability

position. Through an effective marketing of products in the world market.  The administrative cost ratio of the company is not satisfactory and it shows an

increasing trend the company has to take effective steps to improve the position.  The trend analysis of cash in a decreasing trend this shows an ineffective cash

management system. So the company should take necessary action to improve it.  Preparation of good financial plan and budget and it should follow by the

organisation for the following year.  Plan an adequate Internal Control Procedure commensurate with the size and

nature of Company‘s business. 

Evaluate yearly about the internal audit system commensurate with company‘s size and nature of the business.

 Take proper action is taken by the management based on Internal Audit Report. 

To adopt an effective way for the Perpetual Physical Verification of Inventory.

 To

provide adequate information and support to the Inventory Control

Management by the organisation it helps avoiding wastage.  Calculate value of closing stock of Inventory for the year-end.

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CHAPTER V SUMMARY AND CONCLUSION

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BIBLIOGRAPHY 

K SASIDHARAN & ALEX K MATHEWS, (2008) ―Financial Services and System‖ Published by ―Tata McGraw-Hill Publishing Company Limited‖.



Dr. P.C. TULSIAN, (2009) ―Financial management‖ Published by ―S. Chand & Company Ltd‖.



BHABATOSH BANERJEE, (2009) ―Fundamentals of Financial Management‖ Published by ―PHI Learning Private Limited‖.



I M PANDEY, (2004) ―Financial Management- Ninth Edition‖ Published by Vikas Publication Housing Pvt Ltd‖.



KOTHARI C.R , (2008) ―Research Methodology- Second Edition‖ Published by New Age International Publishers.

Web Sites  www.wikepedia.org  www.investopedia.com  www.kmml.com  www.qfinance.com  www.accountingexplanation.com

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ANNEXURE QUESTIONNAIRE

―A STUDY ON NEW FINANCIAL APPROACHES FOR THE ECONOMIC SUSTAINABILITY OF KERALA MINERALS AND METALS LIMITED [KMML]‖ Sir/Madam, I am a student of Kerala Institute of Co-operative Management (KICMA). Final year MBA, I am undertaking the project work on ―A Study On New Financial Approaches For The Economic Sustainability Of Kerala Minerals And Metals Limited [KMML]‖as a part of my course curriculum. Kindly help me in sparing sometime of your busy schedule and fill up the questionnaire to provide with true and fair information. Thank You. Robin Jacob Part A 1. Name: …………………………………………………………………………………. 2. Gender:

Male [ ] Female [ ] 3. Age:

18-30 [ ] 31-40 [ ] 41-50 [ ] Above 51 [ ] 4. Educational Qualification:

Diploma [ ] Graduation [ ] Post Graduation [ ] Technical [ ]

5. Year of Experience:

0-1 Year [ ] 1-5 Year [ ] 5-10 Year [ ] 10-15 Year [ ]

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Part B I. Effectiveness of financial planning and budgeting a.

Highly effective

[ ]

b.

Effective

[ ]

c.

Partly effective

[ ]

d.

Ineffective

[ ]

II. Is there adequate Internal Control Procedure commensurate with the size and nature of Company‘s business a.

Yes

[ ]

b.

No

[ ]

III. (i) There is an internal audit system commensurate with company‘s size and nature of the business a.

Highly agree

[ ]

b.

Agree

[ ]

c.

Partly agree

[ ]

d.

Disagree

[ ]

(ii) Whether proper action is taken by the management based on Internal Audit Report a.

Yes

[ ]

b.

No

[ ]

IV. Opinion on the effectiveness of the system of Perpetual Physical Verification of Inventory a.

Highly effective

[ ]

b.

Effective

[ ]

c.

Partly effective

[ ]

d.

Ineffective

[ ]

V. Are you satisfied on the techniques followed in Inventory Control Management a.

Highly satisfied

[ ]

b.

Satisfied

[ ]

c.

Partly satisfied

[ ]

d.

Dissatisfied

[ ]

VI. Your opinion on the value of closing stock of Inventory for the year-end a.

Very high

[ ]

b.

High

[ ]

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New Financial Approaches for the Economic Sustainability of the KMML

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