DECLARATION

I, Mr. ARJUN R KANOJIA hereby declare that this project report is the
record of authentic work carried out by me during the period from April to
May 2016 and has not been submitted to any other University or Institute
for the award of any degree / diploma etc.

Signature
Name of the student
Arjun R. Kanojia
Date

CERTIFICATE
This is certify that Mr. Arjun R. Kanojia, Roll No. 08, Third Year BMS,
Semester V , 2016-17, has successfully completed the Project on
Financial Performance of JNPT under the guidance of Anu Pillai.
Course Co-ordinator
Proff. Anju Mam
Project Guide / Internal Examiner
Proff. Anu Pillai

Acknowledgement
To list who all have helped me his difficult because they are too numerous and the depth his so
enormous.
I would like to acknowledge the following as being idealistic channels & fresh dimensions in the
completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance to do this project.
I would like to thank my Principal, H.V. JADHAV for providing the necessary facilities required
for completion of this project.
I take this opportunity to thank our Coordinator Prof. ANJU SONKALA, for her moral support
& guidance.
I would also like to express my sincere gratitude towards my project guide Prof. ANNU PILLAI
whose guidance & care made the project successful.
I would like to thank my College Library, for providing various reference books & magazines
related to my project.
Lastly I would like to thank each and every person who directly or indirectly helped me in the
completion of the project especially my Parents and Peers who supported me throughout my
project.

PROJECT REPORT
ON

FINANCIAL PERFORMANCE OF JNPT

SUBMITTED TO
KSA BARNS COLLAGE PANVEL, NAVI MUMBAI
BY
Mr. ARJUN R KANOJIA
ROLL NO. 08
Batch (2016-2017)

IN PARTIAL FULFILLMENT OF BACHELOR OF

MANAGEMENT STUDIES (BMS), UNIVERSITY OF MUMBAI
4

Sr. No

Particular

Pg.No

Chapter 1 : Introduction

06

Chapter 2: Objectives

19

Chapter 3 : Research Methodology

21

Chapter 4 : Theoretical Background

24

Chapter 5 : Data Processing Analysis

40

Chapter 6 : Findings

56

Chapter 7 : Limitation

58

Chapter 8 : Recommendation

60

Chapter 9 : Conclusion

62

10

Chapter 10 : Reference

64

INDEX

Chapter I
Introduction

JAWAHARLAL NEHRU PORT TRUST (JNPT)

JNPT History:

Ever since its inception on May 26, 1989, Jawaharlal Nehru Port (JNP) has blazed a new path for
itself in the port sector aiming to set the benchmark for the heights India could reach in
technological innovation and administrative skill. Envisioned in a remote location about 10 km
across the Bombay Harbour, JN Port rose up from paddy fields, salt-pans and marshlands, in a
Herculean effort at construction the first large-scale industrial development in independent
India. The Port is as much a representation of what is best about our countrys capabilities, from
project conceptualization to completion, as it is an example of human endeavour against all
odds.
It has charted Indias international trade to a glorious course of success and achievements,
breaking records and creating new benchmarks. JN Port is the biggest container handling port in
India, handling around 44% of the countrys containerized cargo, crossing the historic landmark
of 4 million TEUs in container throughput consecutively for the last five years. In its coveted
role as the Hub Port on the West Coast of India, JNP is ranked 31st among the top 100 Container
Ports in the world.
7

Having set for itself a long-term goal of achieving 10 million TEUs by the year 2020-21,
through addition of two more Terminals, viz. the 330M Stand-alone Container Terminals (DP
World) and the 4th Container Terminal (Port of Singapore Authority) and a Satellite Port at
Vadhvan Point, JNP throws open an array of worthwhile opportunities for the maritime trade,
including the shipping lines and shippers, to ferry their cargo to various sectors across the globe.
Supported by a top of the order, world-class infrastructure with high technological standards,
facilities at JNP comprise of a full-fledged Custom House, 30 Container Freight Stations and
connectivity to 52 Inland Container Depots across the country. The excellent hinterland
connectivity both by rail and road is being further strengthened by ongoing projects like the
Dedicated Freight Corridor (DFC), which will increase the existing train capacity of 27 to 100
trains per day; Multi-Modal Logistics Park (MMLP) and widening of the Port road connectivity.
Its proximity to the Cities of Mumbai, Navi Mumbai and Pune; airports; hotels, exhibition
centres, etc. gives the Port an extra edge to address the shippers needs, efficiently and promptly.
With a strong commitment to provide seamless service to the customers as Indias prime
facilitator of international trade and logistics, Jawaharlal Nehru Port strives to be the undisputed
leader in the South Asia Region in the years to come.

Vision and Mission Statement of the Company

Vision:

To become the premier container port of south Asia with international standards providing
efficient and cost effective integrated logistics solutions.

Mission:
The port is committed to meeting the needs and expectations of its customers and the nation by:
Equipping itself with state-of-the-art equipment and technology and efficient, professional and
computer integrated terminal operation systeMr.
Conforming to international standards and offering competitive rates.
Ensuring security and safety of life, equipment and cargo.
Pursuing the principles of sustainable development.

Constantly upgrading the competence, awareness, skills and motivation of the port
personnel to bring about continual improvement in the physical efficiency parameters.

CREATION OF JAWAHARLAL NEHRU PORT TRUST

(JNPT)

Jawaharlal Nehru Port Trust was created to provide modern handling facilities for container and
dry bulk cargo (fertilizer, fertilizer raw materials, and food grains) beyond 1980 that could not
have been accommodated at Mumbai Port Trust. This port is originally known as Nhava Sheva
Port Trust and was conceived to relieve congestion of Mumbai Port. JNPT was declared as major
port in 1982 and a Port Trust Board was constituted under the provision of the Major Port Trust
Act.

Activities of the Port:

JNPT was commissioned for commercial operations from 26th May, 1989. The port is mainly
conceived with two terminals viz. Bulk Terminal and Container Terminal.

1. Bulk Terminal:
The Bulk Terminal is having a total quay length of 712 meters with a draught of 12 meters
out of which 500 meters length is equipped with 2 nos. of grab unloaders and 2 nos. continuous
unloaders for handling food grains fertilizers, raw materials like Sulphur, rock phosphate and
finished fertilizers like diammonia phosphate and muriate of potash. The remaining quay length
of 212 meters is utilized for handling liquid cargo. The Bulk Terminal is constructed to handle
bigger size ships of 70000 DWT.

2. Container Terminal:
The Container Terminal was initially built up with a key length of 680 meters. The Container
Terminal is meant for handling of containers of import and export containerized cargo. The
terminal is capable of handling of 3rd generation container vessels with a draught of 12 meters.
10

A. Cargo handled at bulk terminal

In the initial stages of operation, dry bulk cargo like food grans, raw materials for fertilizers
and finished fertilizers were received at this port and handled successfully up to 1996. However,
subsequently business could not develop as per projection and fell to 0.36 million tonnes in
2001-2002. At this port developed an alternative facility to handle liquid cargo by creating tank
farMr and associated facilities at the port. Now the liquid cargo is increasing. In addition, JNP is
handling cement and other general cargo which is showing an increasing trend. With all these,
JNP bulk traffic has reached peak level of 4.257 million tonnes during the year 2000-2001.

B. Cargo handled at Container Terminal

Originally the Container Terminal had commenced operation with 3 nos. Rail Mounted Quay
Cranes (RMQC) on three breaths supported with 8 nos. Rubber Tyred Gantry Cranes (RTGC)
and 1 Rail Mounted Gantry Cranes (RMGC) in 1989. The container traffic reflected and
increasing trend. During 1994-95, 1995-96, vessels were waiting for berths. Therefore, in 199495 a decision was taken to acquire equipment, turnaround time reduced and in turn, pre-berthing
waiting time also reduced. The steady growth of the container traffic touched the peak in 199899 and port handled 6.69 lakh TEUs.
In view of the surging container traffic, parallel action was initiated to develop a separate 600
meters. Berth container terminal by private participation. Accordingly, global bids were invited
in December 1995 and M/s P&O (Australia) led consortium was awarded the contraction BOT
basis by signing the license agreement on 3rd July 1997 for construction of 600 meters quay

11

length container terminal with associated equipment for handling containerized cargo. This
terminal was commissioned in April 1999 and was fully operations by July 2000. The traffic
further rose and JN port created history in Indian Ports by handling 1 million TEUs along with
the private terminal (NSCIT) in the month of February, 2001. Thus joining the millionaire club
of reputed international container ports, during the year 2001-02 JNP along with NSCIT handled
15.73 lakhs TEUs.
To meet the future growth rate, JNP has augmented its container handling

equipment by

positioning 2 more Super Post Panamax Rail Mounted Quay Crane with its own resources and
planned to acquire 6 nos. Rubber Tyred Gentry Cranes on lease rental basis. Port is also planning
to replace 12 years old RMQCs & RTGCs in phase manner in the near future. With this
augmented plan, JNP is poised to cross 2 million TEUs by 2005.

C. Container Freight Station

At present, there are 6 Container Freight Stations (CFS) in operation for stuffing and
destuffing of containers. One of the CFSs is owned by JNPT. It is operated and managed by
CWC on contract. The second CFS is owned, operated and managed by Central Warehousing
Corporation. Outside the port estate, three more Container Freight Stations are operated by
CONWARE (a company of Punjab State Warehousing Corporation) Gateway Distripark Ltd. &
Balmar Lawrie just on the boundaries of the port. These CFSs will be in position to handle the
container traffic for next five years considering the expected growth.

D. Future growth of JNPT

12

Port has awarded a license to M/s Nhava Sheva International Container Terminal Limited. A
consortium led by M/s P&O Ports Australia Pvt. Ltd for construction, operation and management
of a new two berths Container Terminal at JNP on BOT basis in July, 1997. The project
comprises construction of 600 meter long quay, reclamation and development of 20 hectares area
of Container Yard and requisite Container Handling Equipment and other related facilities. At
present, the terminal is equipped with eight Rail Mounted Quay Crane, Twenty Nine Rubber and
Tyred Gantry Cranes.

NSCIT
PRIVATE CONTAINER TERMINAL (NSCIT)

13

In view of continuous growth in container traffic and meeting growing demand of business community
and trade partners to have additional facilities for handling the same, the Port introduced private participation and
invited global tenders for the first time in India to develop new Container Terminal to augment its container
handling capacity .
JN Port entered into a license agreement in July 1997 with M/s. NhavaSheva
International Container Terminal (NSICT) a consortium led by M/s. P & O Ports, Australia, for
construction, operation and management of a new 2-berth container terminal on BOT basis for
period of 30years. The same was fully operational from July 2000. The project comprises
construction of600 meters quay length; reclamation of 20 hectares of area for container yards and
requisite container handling equipment along with other related facilities. The design capacity of
this new2-berth container Terminal was considered as 7.2 million tons per year. However, this
capacity is further augmented and currently assessed as 15.6 million tons per year.
Number of ground slots: 6222, of which 620 are at ICD.
600 Meters linear quay length
Rail mounted quay cranes - (RMQC) Post Panamax
6; Super Post Panamax - 2
Rubber tyred gantry cranes - (RTGC): 29
Rail mounted gantry cranes - (RMGC): 3
Reefer points: 672
Backup Area - 26 Hectares (Container Yard)
Railway Sliding for ICD - Two Tracks
14

Tractor Trailers - 34 (owned) and about 100 hired

Reach stackers - 3
Empty Handlers 2

GTI
(GATEWAY TERMINALS INDIA)

15

Gateway Terminals India (GTI) is a joint venture between APM Terminals and the
Container Corporation of India Ltd (CONCOR). Incorporated in July 2004, GTI operates the
third container terminal at Jawaharlal Nehru Port on a build, operate and transfer (BOT) basis for
a period of 30years. It commenced partial operations in March 2006 and became fully
operational fromOctober2006.

The Terminal will have the following equipment:

Rail-Mounted Quay Cranes - 10 (post-Panamax, 18 wide reach)
Rubber-Tyred Gantry Cranes - 40 (for yard operations)
Rail-Mounted Gantry Cranes - 3 (for rail transfers)
Reach Stackers - 2
Empty Handlers - 2
Tractor-Trailers - 90 Fork Lifts (small) 4
Twin Lift Spreaders - 61 meters rated load

ACHIEVEMENTS

JN Port's Achievements:

16

JNPT is the only major port in India to have achieved all the four certifications:

ISO 9001:2008 Standards for Quality Management System,

ISO 27001:2013 Standards for Information Security Management System,

ISO 14001:2004 for Environmental Management System,

OHSAS 18001:2007 for Occupational Health & Safety Management System.

Awards:
Year - 2014

JNPT has been adjudged as the "Major Port of the Year" by Maritime Gateway Group.

JNPT Bags "Container port of the Year" at the MALA Awards 2014

Shri N.N. Kumar was also adjudged the "Newsmaker of the Year" for his outstanding
contribution to maritime sector during the year.

JNPT bags "Indira Gandhi Rajbhasha Puraskar (1st prize)

JNPT bags Sea Port of the Year in Containerized Cargo Northern India Award

Year- 2013

JNPT bags MARKENOMY Award 2013 for the Best Indian Port (Public Sector)

JNPT Bags Prestigious Golden Peacock OHSAS Award 2013

17

JNPT bags Indira Gandhi Rajbhasha Puraskar.

Year- 2012

JNPT bagged prestigious corporate social responsibility award of Genentech Foundation

for its CSR initiative.

JNPT bagged Golden Peacock Environment Management Award.

JNPT bagged Maritime and Logistics Award 2012 (MALA -2012).

JNPT bagged Indira Gandhi Rajbhasha Puraskar.

JNPT bags performance Excellence award 2012

18

Chapter II
Objectives

19

 Objectives of the Study

To examine present financial system of JNPT.
To study the how liquid is the companys position.
To determine the financial ratios of JNPT.
To offer appropriate suggestions for the better performance of JNPT.
To compare between the ratios of two years 2015-16 and 2014-15.

20

Chapter III
Research Methodology
Research:

21

Research is a systematic and intensive study directed towards a more complete

knowledge of the subject studied. Research comprises creative work undertaken on a systematic
basis in order to increase the stock of knowledge, including knowledge of humans, culture and
society and use of this stock of knowledge to devise new applications. It is used to establish or
confirm the facts, reaffirm the results of previous work, solve new or existing probleMr, support
theoreMr, or develop new theories. There are two types of research namely, basic research and
applied research. A research project may also be expansion of the past work in the field. It
always starts with a question or a problem. The study of conducting the research is called as
Research Methodology.

Sources of data:

Primary Data:
Primary data is also termed as raw data. It is a term for data collected from a
source.First-hand information gathered on any happening or event is called as Primary
Data. It is often undertaken after the researcher has gained some insight into the issue by
reviewing secondary research or by analyzing previously collected primary data.
As a method of collecting information through primary data, observation method
was followed and the past records and results were being observed for assessing the
financial performance of the company for the last five years.
Combination of structured and unstructured observation was used. In structured
observation, the research question was formulated precisely and I have been told
specifically what is to be observed. In unstructured observation, I was free to observe
whatever I thought relevant and important.

22

Secondary data:

Primary data collected by one person is the secondary data for another person.
The information is also collected through secondary sources during the project. That information
was utilized for calculating performance evaluation and based on that, interpretations were made.
Internal secondary sources were used for carrying out the research of my project.

For calculations, companys annual report was referred. From annual report, Accounting

records and Sales Force Reports were helpful for gathering the data.
Also internal experts like finance manager and the assistant finance managers were also a
good source for collecting the data as they have specialized knowledge relevant to

finance probleMr.
Information related to theoretical aspects was collected from standard texts and internet.

23

Chapter IV
Theoretical
Background

24

Financial Performance
Financial performance is used to measure firm's overall financial health over a given period of
time and can also be used to compare similar firMr across the same industry or to compare
industries or sectors in aggregation. Performance is used to indicate firms success, conditions
and compliance. Financial performance refers to the degree to which financial objectives being
or has been accomplished. It defines competitiveness, potentials of the business, and economic
interests of the companys management and reliability of present or future contractors. Therefore,
financial performance analysis and identification of their weaknesses and strengths using
financial performance indicators has its contribution to the management, shareholders, the public
(customers of the bank), the regulator (the government), the financial sector, 6 and the economy
as a whole. In a competitive financial market, bank performance provides signal to depositors
and investors whether to withdraw or invest funds respectively from the bank.
Financial analysis involves the use of financial statements. A financial statement is an organized
collection of data according to logical and Conceptual Framework 50 consistent accounting
procedures. Its purpose is to convey an understanding of some financial aspects of a business
firm. It may show a position at a moment of time as in the case of a Balance Sheet, or may reveal
a series of activities over a given period of time, as in the case of an Income Statement. Thus, the
term financial statements generally refers to two basic statements: the Balance Sheet and the
Income Statement.

25

Financial Performance Analysis

Financial Performance analysis includes analysis and interpretation of financial statements in
such a way that it undertakes full diagnosis of the profitability and financial soundness of the
business. The financial analyst program provides vital methodologies of financial analysis.

Significance of Financial Performance Measurement:

The interest of various related groups is affected by the financial performance of a firm. The
type of analysis varies according to the specific interest of the party involved:

Trade creditors: interested in the liquidity of the firm (appraisal of firms liquidity)
Bond holders: interested in the cash-flow ability of the firm (appraisal of firms capital
structure, the major sources and uses of funds, profitability over time, and projection of

future profitability)
Investors: interested in present and expected future earnings as well as stability of these

earnings (appraisal of firms profitability and financial condition)

Management: interested in internal control , better financial condition and better
performance (appraisal of firms present condition evaluation of opportunities in relation
to this current position, return on investment provided by various assets of the company
etc)

BALANCE SHEET
26

A Balance Sheet is a financial statement that summarizes a company's assets, liabilities and
shareholders' equity at a specific point in time. These three balance sheet segments give investors
an idea as to what the company owns and owes, as well as the amount invested by shareholders.
The Balance Sheet shows the financial position (condition) of the firm at a given point of time. It
provides a snapshot and may be regarded as a static picture. Balance sheet is a summary of a
firms financial position on a given date that shows
Total assets = Total liabilities + Owners equity.

PARTICULARS

2011-12

2012-13

2013-14

2014-15

2015-16

18,519,79

20,005,26

22,480,56

33,012,56

36,083,16

CAPITAL RESERVES

2,675
5,168,723,

8,567
7,477,328,

8,567
9,530,498,

8,567
1,506,867,

8,567
2,251,513,

REVENUE RESERVES

183
4,782,810,

054
5,196,992,

220
4,128,414,

430
3,838,245,

116
14,726,14

STATUTORY RESERVES

767
12,878,88

952
14,836,96

097
16,426,63

162
19,271,80

7,546
10,129,58

7,920

8,879

5,062

1,025

8,419

41,350,21

47,516,55

52,566,11

57,629,48

63,190,41

4,545

8,452

5,946

2,184

7,647

(WORLD BANK)
LOAN FROM MUMBAI PORT

TRUST

(A) SOURCES OF FUNDS:

RESERVES AND SURPLUS:

INFRASTRUCTURE RESERVES
DEFERRED TAX RESERVE
(NET)
TOTAL RESERVES AND
SURPLUS
LOANS:
LOANS FROM GOVT. OF INDIA
LOAN FROM GOVT. OF INDIA

27

LOAN FROM KANDLA PORT

TRUST
LOAN FROM CHENNAI PORT

TRUST
NON CONVERTIBLE

DEBENTURES
NON PLAN GOVERNMENT
BANK LOANS

4,13,196,0

4,13,196,0

4,13,196,0

TAX FREE BONDS

00
4,13,196,0

01
4,13,196,0

02
4,13,196,0

TOTAL LOAN LIABILITY

PENSION AND PROVIDENT

00

01

02

FUNDS

8,15,275,8

8,93,850,3

9,71,788,3

1,024,838,

1,443,822,

DEFERRED TAX LIABILITIES

18
42,165,49

20
48,410,40

62
53,951,10

126
59,067,51

599
65,047,43

0,363

8,772

0,308

6,310

6,246

15,873,78

17,291,16

19,584,49

29,673,80

31,130,11

CAPITAL ASSETS

2,300
5,070,529,

7,252
5,455,760,

3,586
5,886,750,

4,295
6,298,768,

5,877
6,693,365,

LESS: DEPRECIATION

760
10,803,25

323
11,835,406

584
13,697,74

174
23,375,03

710
24,436,75

NET FIXED ASSETS:

SHED HANDED OVER TO BOT

2,540
4,27,142,0

,929
4,08,965,8

3,002
3,90,789,5

6,121
3,72,613,3

0,166
3,54,437,0

95

36

76

17

58

INVESTMENTS

7,75,000,0

7,00,500,0

4,00,000,0

5,60,000,0

5,80,000,0

OTHER INVESTMENTS

00
7,75,000,0

00
7,00,500,0

00
4,00,000,0

00
5,60,000,0

00
5,80,000,0

TOTAL INVESTMENTS

00

00

00

00

00

TOTAL SOURCES OF FUND

(B) APPLICATION OF FUNDS:

OPERATOR
INVESTMENTS:
PF & PENSION FUND

28

DEFERRED TAX ASSETS

40,052,29

48,227,14

57,786,22

54,645,48

62,601,17

CURRENT ASSETS
CURRENT LIABILITIES AND

0,870
9,892,195,

6,169
12,761,61

3,457
18,323,65

8,169
19,875,62

2,964
22,924,92

PROVISIONS

142
30,160,09

0,161
35,465,53

5,727
39,462,56

1,298
34,769,86

3,943
39,676,24

NET CURRENT ASSETS

DEFICIT

5,728
42,165,49

6,008
48,410,40

7,730
53,951,10

6,871
56,067,51

9,021
65,047,43

0,363

8,773

0,308

6,310

6,246

TOTAL OF ASSETS

INCOME STATEMENT
An income statement is a financial statement that measures a company's financial
performance over a specific accounting period. Financial performance is assessed by giving a
summary of how the business incurs its revenues and expenses through both operating and nonoperating activities. It also shows the net profit or loss incurred over a specific accounting
period, typically over a fiscal quarter or year. The income statement (referred to in India as the
profit and loss statement) reflects the performance of the firm over a period of time. Income
statement is a summary of a firms revenues and expenses over a specified period, ending with
net income or loss for the period.

PARTICULARS
(A) OPERATING INCOME
BULK HANDLING AND

2011-12

636,

2012-13

394,

2013-14

707,

2014-15

540,

2015-16

631,

29

STORAGE CHARGES
CONTAINER HANDLING AND

97,121.00
25319,7

66,141.00
28253,5

33,994.00
31838,4

74,330.00
33197,9

95,450.00
41990,5

STORAGE CHARGES

6,034.00
16230,9

8,784.00
16672,7

2,607.00
18264,8

7,682.00
20759,2

5,841.00
26222,8

PORT AND DOCK CHARGES'

6,312.00
6582,9

1,747.00
7724,6

3,157.00
8140,6

5,305.00
9288,4

0,315.00
9658,7

ESTATE RENTAL
INCOME FROM BOT

9,841.00
63492,8

7,296.00
63662,9

2,215.00
50836,3

8,423.00
70742,7

5,838.00
72303,7

CONTRACT
TOTAL OPERATING INCOME

0,914.00
112263,5

1,077.00
116714,8

6,314.00
109787,4

7,312.00
134529,2

1,788.00
150807,7

(A)
(B) OPERATING

0,222.00

5,045.00

0,280.00

3,053.00

9,231.00

EXPENDITURE
BULK HANDLING AND

421,

581,

768,

831,

788,

STORAGE CHARGES
CONTAINER HANDLING AND

51,211.00
15026,2

33,366.00
17975,7

77,476.00
23647,0

96,559.00
25964,2

43,952.00
27709,6

STORAGE CHARGES
PORT AND DOCK FACILITIES

1,970.00
8740,9

3,799.00
8283,5

0,002.00
8726,0

5,558.00
8869,1

7,261.00
11006,9

FOR SHIPPING

0,873.00
121,

8,412.00
121,

4,425.00
121,

5,804.00
121,

8,686.00
121,

RAILWAYS WORKING
RENTAL LAND AND

45,606.00
4329,2

45,606.00
4195,0

41,820.00
7098,3

41,823.00
4339,8

41,823.00
5273,5

BUILDING
EXPENDITURE ON BOT

8,101.00
6274,8

8,080.00
6274,8

7,372.00
6968,2

6,509.00
6224,2

1,349.00
7433,2

CONTRACT

5,505.00
33841,1

5,505.00
37432,0

3,151.00
47329,8

3,768.00
46350,6

4,261.00
52333,2

SUBTOTAL

3,516.00

4,768.00

4,246.00

3,020.00

7,332.00

MANAGEMENT AND

10604,5

12530,8

13540,4

14752,0

14818,0

GENERAL ADMINISTRATION
TOTAL OPERATING

2,758.00
44445,6

3,830.00
49962,8

5,817.00
6087,0

0,855.00
61102,6

3,106.00
67151,3

EXPENSES(B)
OPERATING PROFIT (A)-(B)

6,274.00
67817,8

8,598.00
66751,9

3,063.00
48917,1

3,875.00
73426,5

0,438.00
83656,4

30

3,948.00
16637,5

6,447.00
28036,9

0,217.00
39716,0

9,178.00
35243,0

8,793.00
30132,7

FINANCE AND MISC INCOME

3,901.00
5752,7

4,968.00
7910,8

1,738.00
15667,4

0,049.00
31124,3

3,963.00
29386,8

FINANCE AND MISC EXPENSE

0,774.00

1,201.00

9,298.00

2,471.00

4,703.00

35,
NET PRIOR PERIOD ITEMR

37,107.00
78667,1

PROFIT BEFORE TAX

PROVISION FOR TAXATION:

1,969.00

-2437,32,0
14.00

-290,5
6,250.00

89295,42,
228.00

73074,6
8,282.00

839,

160,

21,943.00

06,762.00

16706,0

84242,3

4,812.00

1,291.00

23555,8

26806540

21799,7

2554,1

24443,1

CURRENT TAX

2,045.00
752,

46

2,746.00
779,

8,811.00
530,

1,354.00
4189,8

DEFERRED TAX
FRINGE BENEFIT TAX

31,953.00
-

78574502
-

38,042.00
-

49,764.00
-

4,473.00
-

NET PROFIT AFTER TAX

54358,97,

61703,13,

50495,57,

50633,66,

55609,35,

(BEFORE EOI)
EXTRA ORDINARY ITEMR

971.00

680.00

494.00

237.00

464.00

(LOSS ON SALE OF ASSETS)

NET PROFIT

54358,97,

61703,13,

50495,57,

50633,66,

55609,35,

971.00

680.00

494.00

237.00

464.00

TECHNIQUES/TOOLS OF FINANCIAL PERFORMANCE ANALYSIS:

An analysis of financial performance can be possible through the use of one or more tools /
techniques of financial analysis. In my study, I have used ratio analysis as an accounting tool for
evaluating financial performance of JNPT.
31

RATIO ANALYSIS
The analysis of the financial statements and interpretations of financial results of a particular
period of operations with the help of 'ratio' is termed as "ratio analysis." Ratio analysis used to
determine the financial soundness of a business concern. Ratios express the numerical
relationship between two or more things. This relationship can be expressed as percentages,
fraction, or proportion of numbers.
Principles of Ratio Selection
The following principles should be considered before selecting the ratio:
(1) Ratio should be logically inter-related.
(2) Pseudo ratios should be avoided.
(3) Ratio must measure a material factor of business.
(4) Cost of obtaining information should be borne in mind.
(5) Ratio should be in minimum numbers.
(6) Ratio should be facilities comparable.
Accounting Ratios are classified on the basis of the different parties interested in making use of
the ratios. A very large number of accounting ratios are used for the purpose of determining the
financial position of a concern for different purposes. Ratios may be broadly classified in to:
(1) Classification of Ratios on the basis of Balance Sheet.

32

(2) Classification of Ratios on the basis of Profit and Loss Account.

(3) Classification of Ratios on the basis of Mixed Statement (or) Balance Sheet and Profit and
Loss Account.
This classification further grouped in to:
I. Liquidity Ratios
II. Profitability Ratios
III. Turnover Ratios
IV. Solvency Ratios
V. Overall Profitability Ratios

33

CLASSIFICATION
OF RATIOS
USING
STATEMENTS
BALANCE
SHEET

1. CURRENT RATIO
2. QUICK RATIO
3. DEBT EQUITY
RATIO
4. PROPRIETORY
RATIO
5. CAPITAL GEARING
RATIO
6. WORKING
CAPITAL RATIO
7. RATIO OF
CURRENT ASSTES
TO FIXED ASSETS.

PROFIT AND
LOSS

1. GROSS PROFIT
RATIO
2. OPERATING RATIO
3. OPERATING
PROFIT RATIO
4. OPERATING
EXPENSE RATIO
5. INTEREST
COVERAGE RATIO

P&L ACCOUNT
AND BALANCE
SHEET
1. STOCK TURNOVER RATIO
2. DEBT COVERAGE RATIO
3. PAYABLE TURNOVER
RATIO
4. FIXED ASSET TURNOVER
RATIO
5.RETURN ON EQUITY
RATIO
6. RETURN ON
SHAREGOLDER'S FUND
7. RETURN ON CAPITAL
EMPLOYED
8. CAPITAL TURNOVER
RATIO
9. WORKING CAPITAL
TURNOVER RATIO
10. TOTAL ASSETS
TURNOVER RATIO.

I. LIQUIDITY RATIOS
Liquidity Ratios are also termed as Short-Term Solvency Ratios. The term liquidity means the
extent of quick convertibility of assets in to money for paying obligation of short-term nature.
Accordingly, liquidity ratios are useful in obtaining an indication of a firm's ability to meet its
current liabilities, but it does not reveal how effectively the cash resources can be managed. To
measure the liquidity of a firm, the following ratios are commonly used:

34

(1) Current Ratio.

(2) Quick Ratio (or) Acid Test or Liquid Ratio.

II. PROFITABILITY RATIOS

The term profitability means the profit earning capacity of any business activity. Thus, profit
earning may be judged on the volume of profit margin of any activity and is calculated by
subtracting costs from the total revenue accruing to a firm during a particular period. Profitability
Ratio is used to measure the overall efficiency or performance of a business. Generally, a large
number of ratios can also be used for determining the profitability as the same is related to sales
or investments.
1. Gross Profit Ratio.
2. Operating Ratio.
3. Operating Profit Ratio.
4. Net Profit Ratio.
5. Return on Investment Ratio.
6. Return on Capital Employed Ratio.
7. Earnings per Share Ratio.
8. Dividend Payout Ratio.
9. Dividend Yield Ratio.

35

10. Price Earnings Ratio.

11. Net Profit to Net worth Ratio.

III. TURNOVER RATIOS

Turnover Ratios may be also termed as Efficiency Ratios or Performance Ratios or Activity
Ratios. Turnover Ratios highlight the different aspect of financial statement to satisfy the
requirements of different parties interested in the business. It also indicates the effectiveness with
which different assets are vitalized in a business. Turnover means the number of times assets are
converted or turned over into sales. The activity ratios indicate the rate at which different assets
are turned over.
1. Inventory Ratio or Stock Turnover Ratio (Stock Velocity)
2. Debtor's Turnover Ratio or Receivable Turnover Ratio (Debtor's Velocity)
2 A. Debtor's Collection Period Ratio
3. Creditor's Turnover Ratio or Payable Turnover Ratio (Creditor's Velocity)
3 A. Debt Payment Period Ratio
4. Working Capital Turnover Ratio
5. Fixed Assets Turnover Ratio
6. Capital Turnover Ratio.

36

IV. SOLVENCY RATIOS

The term 'Solvency' generally refers to the capacity of the business to meet its short-term and
long- term obligations. Short-term obligations include creditors, bank loans and bills payable etc.
Long-term obligations consist of debenture, long-term loans and long-term creditors etc.
Solvency Ratio indicates the sound financial position of a concern to carry on its business
smoothly and meet its all obligations. Liquidity Ratios and Turnover Ratios concentrate on
evaluating the short-term solvency of the concern have already been explained. Now under this
part of the chapter only the long-term solvency ratios are dealt with. Some of the important ratios
which are given below in order to determine the solvency of the concern:
(1) Debt - Equity Ratio
(2) Proprietary Ratio
(3) Capital Gearing Ratio
(4) Debt Service Ratio or Interest Coverage Ratio

37

Chapter V
Data Processing and
Analysis
38

Financial performance profile

Operating results for the year 2011-12 2015-16:
Year
2011-12
2012-13
2013-14
2014-15
2015-16

Total expenditure
502.34
578.74
765.38
930.66
966.98

Total income
1289.01
1471.69
1496.12
1697.72
1809.41

2000
1800
1600
1400
1200
Total expenditure

1000

Column1

800
600
400
200
0
2011-12

2012-13

2013-14

2014-15

2015-16

I. LIQUIDITY RATIOS

39

(1) Current Ratio

Current Ratio establishes the relationship between current Assets and current Liabilities.
It attempts to measure the ability of a firm to meet its current obligations. In order to compute
this ratio, the following formula is used:
Current Ratio = Current Assets/ Current Liabilities

Year
2011-12
2012-13
2013-14
2014-15
2015-16

Current assets(in crores)

4005.23
4822.71
5778.62
5464.55
6260.12

Current liabilities(in crores)

989.22
1276.16
1832.37
1981.56
2292.49

Ratio
4.05
3.78
3.15
2.75
2.73

4.5
4
3.5
3
2.5
2

Ratio

1.5
1
0.5
0
2011-12

2012-13

2013-14

2014-15

2015-16

40

Interpretation of Current Ratio:

The ideal current ratio is 2: 1. It indicates that current assets double the current liability are
considered to be satisfactory. Higher value of current ratio indicates more liquid of the firm's
ability to pay its current obligation in time. On the other hand, a low value of current ratio means
that the firm may find it difficult to pay its current ratio as one which is genera

lly recognized

as the patriarch among ratios.

According to this, in the years 2011-12, 2012-13 and 2013-14, the current assets
are high as compared to current liabilities as most of the assets are locked up in the debtors and a
high current ratio may not always be able to pay its current liabilities. In 2014-15 and 2015-16,
we see that current ratio has been decreased but it is also not equal to ideal current ratio so it does
not indicate a good financial position of the company.

II. PROFITABILITY RATIOS

The following important profitability ratios are discussed below:

(1) Operating Ratio: Operating Ratio is calculated to measure the relationship between total
operating expenses and sales. The total operating expenses is the sum total of cost of goods sold,
office and administrative expenses and selling and distribution expenses. In other words, this
ratio indicates a firm's ability to cover total operating expenses. In order to compute this ratio,
the following formula is used:
Operating Ratio = Operating Cost/ Net Sales x 100

41

Operating Cost = Cost of goods sold + Administrative Expenses + Selling and Distribution
Expenses
Net Sales = Sales - Sales Return (or) Return Inwards.

Year
2011-12
2012-13
2013-14
2014-15
2015-16

Operating cost
444.46
499.63
608.70
611.03
671.51

Net sales/total income

1289.01
1471.69
1495.83
1697.72
1809.41

Ratio
34.48%
33.95%
40.69%
36%
37.11%

0.42
0.4
0.38
0.36
Ratio
0.34
0.32
0.3
2011-12

2012-13

2013-14

2014-15

2015-16

Interpretation of Operating Ratio:

42

This ratio is used to measure the operational efficiency of the management. It shows
whether the cost component in the sales figure is within normal range. A low operating ratio
means high net profit ratio i.e., more operating profit.
The ratio should be compared: (1) with the companys past years ratio, (2) with the ratio of other
companies in the same industry. An increase in the ratio should be investigated and brought to
attention of management. The operating ratio varies from industry to industry.
According to this, in the year 2011-12, 2012-13 and 2014-15 the operating ratio is low
that means operating profit is high. The lower the ratio, the more efficiently the company is
creating profits. Whereas, in the year 2013-14 and 2015-16 the operating ratio is high this means
operating profit is low.

(2) Operating Profit Ratio: Operating Profit Ratio indicates the operational efficiency of
the firm and is a measure of the firm's ability to cover the total operating expenses. Operating
Profit Ratio can be calculated as:
Operating Profit Ratio = Operating Profit/Net Sales x 100
Operating Profit = Net Sales - Operating Cost
Net Sales = Sales - Sales Return (or) Return Inwards
Year
2011-12
2012-13
2013-14
2014-15
2015-16

Operating profit
678.18
667.52
489.17
734.27
836.56

Net sales/total income

1289.01
1471.69
1495.83
1697.72
1809.41

Ratio
52.61%
45.36%
32.07%
43.25%
46.23%

43

0.6
0.5
0.4
0.3
Ratio
0.2
0.1
0
2011-12

2012-13

2013-14

2014-15

2015-16

Interpretation of Operating Profit Ratio: The trend of Operating Profit Ratio should be
analyzed over several periods in the context of the industry sector in which the company
operates. Generally, a higher operating profit margin is desirable as it suggests greater potential
to derive profits and more cushion against any increase in competition or costs.
According to this, in the year 2011-12, 2012-13, 2014-15 and 2015-16 operating profit ratio is
high; this shows that the company is making enough money from its ongoing operations to pay
for its variable costs as well as its fixed costs. Whereas, in the year 2013-14 operating profit is
very low.

(3) Net Profit Ratio: Net Profit Ratio is also termed as Sales Margin Ratio (or) Profit Margin
Ratio (or) Net Profit to Sales Ratio. This ratio reveals the firm's overall efficiency in operating

44

the business. Net profit Ratio is used to measure the relationship between net profit (either before
or after taxes) and sales. This ratio can be calculated by the following formula:
Net Profit Ratio = Net Profit after Tax/ Net Sales x 100

Year
2011-12
2012-13
2013-14
2014-15
2015-16

Net profit
543.59
617.03
504.96
506.34
556.09

Total income/net sales

1289.01
1471.69
1495.83
1697.72
1809.41

Ratio
42.17%
41.93%
33.76%
29.82%
30.73%

0.45
0.4
0.35
0.3
0.25
0.2

Ratio

0.15
0.1
0.05
0
2011-12

2012-13

2013-14

2014-15

2015-16

Interpretation of Net Profit Ratio: Net profit (NP) ratio is a useful tool to measure the
overall profitability of the business. A high ratio indicates the efficient management of the affairs
of business. There is no norm to interpret this ratio. To see whether the business is constantly

45

improving its profitability or not, the analyst should compare the ratio with the previous years
ratio, the industrys average and the budgeted net profit ratio.
According to this, in year 2011-12, 2012-13 and 2013-14, the net profit ratio is high which
indicates efficient management of the affairs of business. Whereas, in the year 2014-15 and
2015-16 the ratio is very low.

(4) Return on Investment Ratio: This ratio is also called as ROI This ratio measures a
return on the owner's or shareholders' investment. This ratio establishes the relationship between
net profit after interest and taxes and the owner's investment. Usually this is calculated in
percentage. This ratio, thus can be calculated as:
Return on Investment Ratio = Net Profit (after interest and tax)/ Shareholders' Fund (or)
Investments/ total assets x 100
Shareholder's Investments = Equity Share Capital + Preference Share Capital + Reserves and
Surplus - Accumulated Losses
Net Profit = Net Profit - Interest and Taxes

Year

Net profit after tax

Total assets/investment cost

Ratio

2011-12
2012-13
2013-14

(in crores)
543.59
617.03
504.96

(in crores)
4216.55
4841.04
5395.11

12.89%
12.75%
9.35%
46

2014-15
2015-16

506.34
556.09

5606.75
6504.74

9.03%
8.55%

0.14
0.12
0.1
0.08
0.06

Ratio

0.04
0.02
0
2011-12

2012-13

2013-14

2014-15

2015-16

Interpretation of Return On Investment Ratio:

Return on investment (ROI) is the benefit to an investor resulting from an investment of
some resource. A high ROI means the investment gains compare favorably to investment cost. As
a performance measure, ROI is used to evaluate the efficiency of an investment or to compare
the efficiency of a number of different investments.
According to this, in year 2011-12, 2012-13, 2013-14 the Return on investment ratio is high as
compared to year 2014-15 and 2015-16.

47

(5) Return on Capital Employed Ratio: Return on Capital Employed Ratio measures a
relationship between profit and capital employed. This ratio is also called as Return on
Investment Ratio. The term return means Profits or Net Profits. The term Capital Employed
refers to total investments made in the business.
Return on Capital Employed = Net Profit after Tax / Total Capital Employed x 100
Year
2011-12
2012-13
2013-14
2014-15
2015-16

Net profit after tax

543.59
617.03
504.96
506.34
556.09

Total capital employed

1871.05
2028.98
1785.32
2010.91
3247.88

Ratio
29.05%
30.41%
28.28%%
25.18%
17.12%

0.35
0.3
0.25
0.2
0.15

Ratio

0.1
0.05
0
2011-12

2012-13

2013-14

2014-15

2015-16

Interpretation of Return On Capital Employed Ratio:

48

Return On Capital employed is a good measure of the total resources that a business has
available to it. With ROCE, the higher the percentage figure, the better. The figure needs to be
compared with the ROCE from previous years to see if there is a trend of ROCE rising or falling.
According to this, as compared to year 2011-12 & 2012-13 and in year 2013-14 & 2014-15
the ROCE is rising this means it is beneficial for company but as compared to year 2012-13 &
2013-14 and in year 2014-15 & 2015-16 the ROCE is falling this means that it is not good for
company.

(6) Return on Net worth Ratio: This ratio measures the profit return on investment. This
ratio indicates the established relationship between net profit and shareholders' net worth. It is a
reward for the assumption of ownership risk. This ratio is calculated as:
Return on Net worth Ratio = Net Profit after Taxes/Shareholders' Net Worth x 100

Year
2011-12
2012-13
2013-14
2014-15
2015-16

Net profit after tax

543.59
617.03
504.96
506.34
556.09

Shareholders net worth

4135.02
4751.66
5256.61
5762.95
6319.04

Ratio
13.15%
12.99%
9.61%
8.79%
8.80%

49

0.14
0.12
0.1
0.08
0.06

Ratio

0.04
0.02
0
2011-12

2012-13

2013-14

2014-15

2015-16

Interpretation of Return On Net Worth Ratio:

Return on net worth ratio measures how efficiently a firm can use the money from
shareholders to generate profits and grow the company.

IV. SOLVENCY RATIOS

(1) Debt Equity Ratio: This ratio also termed as External - Internal Equity Ratio. This ratio
is calculated to ascertain the firm's obligations to creditors in relation to funds invested by the
owners. The ideal Debt Equity Ratio is 1: 1. This ratio also indicates all external liabilities to
owner recorded claiMr. It may be calculated as
Debt - Equity Ratio = Debt/Equity
Debt = Total Long-Term Debt
50

Equity = Shareholders' Funds

Year
2011-12
2012-13
2013-14
2014-15
2015-16

Total debt
41.32
41.32
41.32

Total equity
4135.02
4751.66
5256.61
5762.95
6319.04

Ratio
0.01
0.01
0.01

0.01

0.01

0.01

0.01
Ratio
0

0
2011-12

2012-13

2013-14

2014-15

2015-16

Therefore, the aim of this study is to evaluate and compare financial performance of
51

52

Chapter VI
Findings

Findings

It is observed that cash ratio and quick ratio is keeps on increasing year after year with
increase in current assets but it is not that satisfactory as both the ratios are lower even
than 1.
53

Debt Equity Ratio is slowing down in the subsequent year. Moreover the debt is in
quite negligible proportion which may cause hindrance in the potentiality of the firm.

Gross Profit Ratio is also decreasing, as this could be the result of their inefficiency in
managing their liquidity and their negligible borrowings.

It is same with the Net Profit Ratio.

Company is quite inefficient in generating fund from the debtors and stock.

The company needs to work on its regular operations in order to attain efficiency in their
performance and to beat the benchmark.

Chapter VII
Limitations
54

Limitation of the study

Every study will be bound by certain limitations. The constraints under which the study
was conducted are mentioned below:
Most of the information is kept confidential
Time is an important limitation as the whole study was carried out in a period of 60 days
which is insufficient to carry out interpretation and analysis.
Collection of secondary data from pre available data.

55

Chapter VIII
Recommendations

Recommendations

56

The information released by the firm are very often used by the people who are directly or
indirectly associated with it. Company should always think about them as they are the harbingers
for the firm. Henceforth,
The company need to work on its liquidity of utilizing its assets properly and in prolific
way. This will enables the company to make the worth full use of the asset available to it.
They also need to focus on their solvency, as we have seen that they have insufficient
Debt Equity ratio. If not then this will be a big obstacles for them in increasing their
potential.
Turnover is also important as from that whether the company is able to collect the money
from the debtors in short span of time or is able to convert the stock into funds.As their
turnover ratios are also decreasing they should also look into converting them into cash.
Furthermore, company need to work on their entire financial operations to walk hand in
hand along with its competitors. Then only they could be able to beat the bench mark.

57

Chapter IX
Conclusion

Conclusions

58

 Ratios make the related information comparable. By single figure it has no meaning, but
when expressed in terMr of related figure, it yields significant interferences. Thus, ratios
are relative figure reflecting the relation between the related variable.
Ratio Analysis has a major significance in analyzing the financial performance of the
company over the period of time.
Along with the limitations, ratio analysis should be consider only as the tool for analysis
rather than as an end in itself. The reliability and the significance of the ratios will largely
hinge upon the quality of data on which they are based. They are as good or as bad as the
data itself. Nevertheless, they are ana important tool of financial analysis itself .

59

Chapter X
References

References

Websites:
www.investopedia.com
www.wikipedia.com

Books:
Annual report of JNPT
Introduction of JNPT

60

61