39992717 financial statements and financial analysis of acc cemet (1)

8/8/2019 39992717 Financial Statements and Financial Analysis of ACC Cemet (1)

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TRAINING PROJECT REPORTONFINANCIAL SYSTEM & FINANCIAL ANALYSIS IN ACC LTD GAGAL CEMENT WORKS

SESSION (2008-2009)

SUBMITTED TO

MR.SANJAY JOHARY (MANAGER FINANCE)

SUBMITTED BY:

KURUKSHETRA UNIVERSITY, KURUKSHETRA

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INDEX________________________________________________________________________ ACKNOWLEDGEMENT UNDERTAKING PREFACE HISTORY OF INDUSTRY ASSOCIATED CEMENT COMPANY LTD CORPORATE PROFILE OF ACC LTD ENVIRONMENTAL POLICY OF ACC LTD MISSION & VISION OFACC LTD ARTICHETS OF ACC LTD ACC MILESTONE

GAGAL CEMENT WORKS INTRODUCTION GEOGRAPHICAL DETAIL CONTRIBUTION TO GOVERNMENT Q

UALITY POLICY ENVIRONMENTAL POLICY PRODUCTION SYSTEM IN GAGAL CEMENT WORKS MANUFACTURING PROCESS3


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POWER CEMENT PLANT

DEPARTMENTATION FINANCE DEPARTMENT ACCOUNTING SECTION COST SECTION

FINANCIAL CONDITION OF ACC LTD FINANCIAL HIGHLIGHTS OF THE COMPANY BALANCE SHEET

OF ACC LTD PROFIT & LOSS ACCOUNT OF ACC LTD FINANCIAL POSTION OF ACC LTD SHORTTERM LONG TERM

NEEDS OF STUDY OBJECTIVES OF STUDY RESEARCH METHODOLOGY DESIGN OF STUDY RATIO ANALYSIS(FINDINGS) LIMITATION OF STUDY FINDINGS4


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RECOMMODATIONS/SUGGESTIONS POLICY IMPLICATIONS BIBLIOGRAPHY __________________________________________________________________

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HISTORY OF CEMENT INDUSTRYThe history of the cement industry is the story of civilization from primitive caves of prehistoric times to the skyscrapers of the modern age. It is said thatthe use of cement is from period use of fire Egyptians utilize gypsum plaster ascementing material as early as 3000 BC in building their monuments. Material cement has existed the roman empire Joseph Arpdin invited Portland cement in 1824after the discovery of hydraulic properties of time, patented his product which

was call Portland cement. Portland stone which is lime stone quarried on Portland bill indorsed, England. Modern cement is outcome of effort of chemists technologist & architects. Cement is binding agent having hydraulic properties, which after hydration gives the setting properties strengthening concrete. Intergrading,Clinker, Gypsum, & Pozzolanic material in a proper ratio to get Portland Pozzolane Cement manufacture cement. Cement essentially made up of material containingcalcium silicon, aluminum and iron. Limestone, marl and chalk are major sourceof clay shale, quartzite, bauxite iron ore provide silicon, aluminum & iron components. CEMENT INDUSTRY OUTLOOK AND OPPORTUNITIES: India is the second largest producer of cement in the world. The cement industry witnessed the significant growth of 7.75 % in the calendar year 2008. During the year, most cement companiesoperated at high capacity utilization levels to meet increasing demand. While t

he pricing environment was favourable during the year, there were significant increasing cost particularly in energy, transportation and other inputs. The yearwas commendable one considering the massive increase in the production of blended cement, especially fly ash based. With rapidly growing of housing,

Infrastructure and real estate sectors and the ambitious plan for the developingSpecial Economic Zone (SEZ), the cement industry is expected to enjoy double digit growth. Cement remains the highest taxed among all the essential infrastructure inputs in India. Various govt. taxes and duties put together constitute over70 % of the extra-factory6


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price. Cement industries are a major contributed to the exchequer with excise duty alone working out to be over Rs. 5500 crores annually. Yet it is irony that cement is an essential commodity required by all sections of society including common man. The cement industry receives coal through long term linkages. Ministryof coal is not sanctioning linkages to new capacity which is adversely affecting the cement industry. The situation becomes all difficult, as the ministry of coal is supplying 80 % of total requirement of the cement industry through Fuel A

greements (FSAs). While cement plants may have to procure through other channels. Cements industry is largely dependent on captive power generation as the poweravailability situation is grim in the most producing steps, both in term of quality and quantity. Most cement plants have been compelled to make matters worse;some state governments are also imposing taxes and duties on these captive power plants. Although expectations are the industry will perform well during 2007 with demand likely to grow about 9 to 10 %. The demand supply scenario will be balanced most regions, though some region may experience seasonal tightness. Industry should be appreciative of the govt. as a target of 8 to 9% growth has been aimed for in the XI Plan, and the cement industry is an integral part of the coresector of industries.

MAJOR COMPANIES IN THE CEMENT INDUSTRY ARE: The Associated Cement Companies Ltd. Birla Group. Larsen & Turbo. J.K. Group. India cement. Guraj Ambuja. CORPORATE PROFILE OF ACC LTD. The associated cement companies (ACC) story begins in 1936. War clouds were gathering over Europe; the economy of the western world was deepin recession; and an Indian industry was reeling under severe difficulties. Butone man undaunted by the times7


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was building a vision for the future. The man was F.E. Dinshaw a man of tremendous foresight and outstanding initiative. The vision was to build a strong and unified cement industry that not would not only with stand all difficulties but also fulfil its responsibilities to the nation. The result was the amalgamation often of the existing cement companies belonging to four large industrial houses of that time, viz, the house of Tata, Khatau, Dinshaw and kellick Nixon-to form the nucleus of what is today known as ACC LTD (formerly the associated cement com

panies) Barely three years was later the fledging company catapulted into the fiery cauldron of World War II and resources were geared to meet that onslaught. ACC was there more than that eyewitness to history Over the year ACC realized thatpeople are as different as they are similar .different needs different dreams.With its depth of knowledge and width of experience ACC today is period to fulfil the hopes and aspirations of the people across the length and breadth of the country. For more than six decades now. ACC has has been forging a pioneering path making cement. Along the way it sharpened its expertise on the cutting edge ofthe latest processes/ technologies; learning /adapting- -no just transplanting to meet the specifies of local operating parameters in the process- setting standards, innovating, non just meeting needs, but anticipating them. ACC is a very fond acronym in India, often assuming synonimity with cement. With a annual cemen

t capacity of over 12 million tones, the companys operation are spread throughoutthe country with 12 cement plants, 3 refractories, 12 regional marketing offices, several area offices, and a dedicated band of people from all corners of India. Thus in industrial backdrop of India ACC stands for multi-product, multi-unitcompany. The companies various businesses are supported by a powerful, in-houseresearch and technology backup facility-the only one of its kind in the IndianCement Industry. ACC has also extended its services to overseas, to the Middle East, Africa and South America, where it has provided technical & management consultancy to a variety of consumers, and also helps in the operational maintenanceof cement plants abroad.

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In addition to its modernization and expansion, ACC has earmarked on an all around internal improvement program through introduction of various world class benchmarking and total productivity maintenance practices. Through an organization wide Business Process engineering, it has able to achieve revenue enhancement andcost savings by optimally aligning business practices with customer needs. It would also result in further simplification of the internal management process and delay ring and decentralization for fast decision making purposes. Today, ACC

stands poised to enter the new millennium, ready to seize the opportunities andface the challenges that lie ahead. With more than six decades of experiences, ACC has a rare perspective of sound business strategies, with which ACC is poisedto maintain its leadership in Cement Industry.

A GLIMPS ON THE HISTORY ON SUCCESSTHE Associated Cement Companies Limited is a multi business enterprise with operation in cement manufacturing. It is one of leading companies in India, producing more than one-fourth of national output. ACC. Ltd as company duly registered under Indian Companies Act 1956, having its registered office at Cement House, 121 Maharishi Karv Road, Mumbai-400020.It has 14 cement plants spread all over thecountry and has major force of its industry through customer satisfaction & thr

ough continuous innovation in quality of the product. As company ACC Ltd. is committed to make and deliver as cheaply as possible. Initially, when cement was introduced in 1914, South India Industry Ltd.started first cements plant near Madras. But due to lack of labors and knowledge in manufacturing of cement, this plant after a few months working closed down. After ward in 1912-1919 two more plants wee started in Katni situated in Madhya Pradesh and in,Lakhri in Rajasthan, before 1924 six more plants were started at various other places but they did notled any good start. In 1936 with the effort of Mr.Dinshaw a group of companiesand formed Associated Companies Ltd. Many men of outstand initiative and foresight contributed towards the development of cement industry in India. About 62 years ago in 1936 a number of companies belonging to the house of Tata Khatias andKellick, Nixon combined to from The associated

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Cement Companies Ltd.Great industrialist and patriot Mr.F.E.Dinshaw was mainly responsible into a single organization. The objectives of this merger were not toattain monopolistic position but to make and deliver cement as cheaply as possible. Mr Dinshaw added for new factories in ACC group from 1929 to 1936. During Second World War, the cement was deliver as essential commodities under the defences of Indian rule and through under price and distribution control. The cement industry gets further impetus under the leadership of ACC. CHANGE IN THE NAME OF

THE COMPANY & ACCOUNTING YEAR The company has changed its name to ACC Limited w.e.f. Sept.01, 2006 pursuant to resolution passed by the shareholders at the 70thAnnual General Meeting of the Company and after obtaining all requisite approvals. The accounting year has been changed from April-March to January-December. Therefore the accounts have been drawn up for nine months, for the period ended December 31, 2005. SUBSIDIARIES AND ASSOCIATES OF ACC In addition to the main cement business has certain joint ventures, subsidiaries and associations formed through technical collaboration and partnership with globally reputed companies, mining and radial tyres. In the year 2000, the management of ACC decided to divest those of its non- cement businesses that are unrelated and do not enhance or complement the company's basic strength. Bargarh Cement Limited (BCL) The newestsubsidiary of ACC, was formerly called IDCOL Cement Limited. BCL has a cement pl

ant located at Bargarh near Sambalpur in Western Orissa with a capacity of 0.96million tonnes per annum. The Bargarh cement plant has a modern dry process kilnand predominantly manufactures Portland cement, most of which is sold in the state of Orissa. BCL became a subsidiary of ACC in December 2003 when ACC purchased from the Industrial Development Corporation of Orissa Limited its entire shareholding in BCL amounting to 86.79% of BCL's equity share capital. In March 2004,BCL became a 100 % subsidiary of the company after ACC purchased the remaining13.21 % equity shares in BCL held by the Unit Trust of India.

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Bulk Cement Corporation (India) Limited (BCCI) Situated at Kalamboli, in Navi Mumbai (formerly New Bombay), this company caters to bulk cement requirements of the city of Mumbai and its environs. It has two cement storage silos with a capacity of 5,000 tons each. The plant receives cement in bulk from ACC plants at Wadi. The plant has its own special purpose railway wagons and rakes and its own railway siding. The first of its kind in India, BCCI is equipped with all the facilities required by increasingly sophisticated construction sites in a bustling m

etropolis, including a laboratory, a fleet of specialized trucks and site silosfor the convenience of customers and is capable of offering loose cement in bulk-tanker vehicles as well as packed cement in bags of varying sizes from 1 tonnedown to 25 kg bags. BCCI is situated strategically on the outskirts of Mumbai, just off the new Mumbai-Pune Expressway. It is a landmark structure spread over 30 acres of land. Damodhar Cement & Slag Limited (DCSL) This subsidiary company has a cement-grinding unit located at Madhukunda, in the Purulia district of WestBengal. With a capacity of 5.25 lakh tonnes per annum, it is a vital source ofcement to the eastern India. DCSL offers ACC Super, a premium brand of blended cement. ACC Machinery Company Limited (AMCL) Located in the Butibori Industrial estate near Nagpur, AMCL manufactures machinery and equipment for use in chemicals and cement industries such as bulk transports, vertical pre-grinding roller mi

lls and blowers and tyre and rubber manufacturing machinery such as presses, Mixer and extruders. ACC Nihon Casting Limited This state-of-the-art foundry is also based in Butibori, near Nagpur and manufactures alloy steel castings for a range of processing and mineral industries. It was set up in technical collaboration with Nihon Cement Company (now known as Asanotec Ltd) JOINT VENTURE: Everest Industries Limited (EIL) This subsidiary of ACC is a leading building products company which manufactures fibre-based cement products, such as sheets for roofingand interiors as well as Non11


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Asbestos Flat Sheets for varied applications including pre-fab housing. Its 'Everest' Brand enjoys huge brand equity. Besides roofing, the Company has introduced a range of New Generation Products called E-Board Classic for varied applications in interiors. EIL has four plants in India, Including a modern R&D facilitynear Nashik in Maharashtra. Aloca ACC Industrial Chemical Ltd. (AAICL) This is ajoint venture between ALOCA, Aluminium Company of America (60%) the worlds largest aluminium and aluminium chemicals company and ACC (40%). ACCICI commenced ope

rations in Jan. 1944. The plant is on 6.3 acres of land, and processing capacityis 10,000 metric ton of white tabular alumina in a single shift operation. Thesafety environment, health and industrial hygiene standards of Aloca ACC are a per/comparable with other ALCOA locations worldwide.

INTERNATIONAL ASSOCIATIONS: With its large pool of skilled scientists, engineersand technocrats who keep abreast of the latest international trends and developments in cement, ACC has successfully handled a diverse range of assignments indifferent parts of the world, mainly in Asia and Africa. Our project engineeringconsultancy and project management expertise has been tested against the best in the world. Saudi Arabia Yanbu Cement Company (YCC) Since 1979 ACC has been operating and managing a large cement plant owned by Yanbu Cement Company (YCC) and

located near the port city of Yanbu in the Kingdom of Saudi Arabia. The Yanbu plant incorporates sophisticated process control systems. YCC Today has a capacity of over 3.30 million-ton's per annum. Cement production at this plant has continued to exceed the guaranteed quantum stipulated in the contract year after year. The ACC team of Yanbu has won appreciation for significant achievement make with respect to ISO 9002 certification, launching of ISO 140000 em's certification activity manufacture of Portland Pozzalana Cement and a substantial increase in the quantum of exports. Iran and India Cement Engineering Consultants PJS (IICEC) Iran

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Iran and India Cement Engineering Consultants PJS (IICEC) is a joint venture company between ACC and Far Khuzestan Cement Company, Iran's largest cement company. IICEC provides consultancy services to the Iranian Cement Industry in areas such as process diagnostic studies of existing plants, up gradation and capacity enhancement of existing cement plants and training Iranian engineers to upgrade their knowledge and skills. Nigeria - Dangote Industries ACC has been retained byM/s Dangote Industries, a leading diversified industrial group of Nigeria, to p

rovide comprehensive engineering consultancy for setting up their proposed new green field cement plants of capacity 3 x 7000 TPD (ton's per day) and for optimization and up gradation of their existing plants from 2x2000 TPD to 2x3500 TPD.

ENVIRONMENTAL POLICY OF ACC LTD. Ensure continual improvement periodic review of action plan. Prevent Comply pollution and with all minimize in environmental performance by carrying out emissions. regulatory requirements.

fugitive

applicable legal and

Create environment awareness among employee and community at large. Minimize thewaste generation at source reutilize the work if generated. Conserve energy andmineral resource.

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Region(North)LAKHERI

GAGALTIKARIA

Region(East)

DCW SIND RI

KYMORE

CHAIBA SABARGARH

CHANDA

JAMU L

WADI

Region (SouthWest)MADUKKARAI

MISSION OF ACC LTD.LEADERSHIP:- Maintain our leadership of the Indian cement industry through thecountry modernization and expansion of our manufacturing facilities and activites and through the establishment of a wide and efficient marketing network.

PROFITABILITY:- Achieve a fair and reasonable return on capital by promotingproductivity throughout the company.

GROWTH:- Ensure a steady growth of business by strengthening our postion in thecement sector.

QUALITY:- Maintain the high quality of our products and services and ensure theirsupply at fair prices.

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EQUITY:- Promote and maintain fair industrial relation and environment for theeffective involvement, welfere and development of staff at all levels.

RESPONSIBILITY:- Fulfill our obligation to society, specifically in tha area ofintegrated rural development and in safeguarding.

PIONEERING:- Promote research and development effort in the area of product

development and energy and fuel conservation, to innovate and optimize productivity.

VISION OF ACC LTD.Vision of ACC is to be one of the most respected companies in India; recognizedfor challenging convections and delivering on our promises.

ARTICHETS OF SUCCESS.

NAME OF DIRECTOR S.NO 1. MR.N.S.SEKHARIA 2. MR.PAUL HUGENTOBLE (DEPUTY CHAIRMAN)3. MR.SUMIT BANERJEE 4. MR.A.L.KAPUR (MANAGING DIRECTOR) (CHAIRMAN)

NATIONALITY

INDIAN

SWISS

INDIAN

INDIAN

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5. MR.S.M.PALIA 6. MR.NARESH CHANDRA 7. MR.MARKUS AKERMAN 8. MR.D.K.MEHTROTRA 9.MR.R.A.SHAH 10. Dr.NIRMALYA KUMAR 11. MR.SHAILESH HARIBHAKTI 12. MR.ANIL SINGHVI 13. MR.A.K.JAIN (WHOLETIME DIRECTOR)

INDIAN

INDIAN

SWISS

INDIAN

INDIAN

INDIAN

INDIAN

INDIAN

INDIAN

ACC MILESTONES.1936Incorporation of The Associated Cement Companies Limited on Augest 1, 1936.

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1936First Board meeting of The Associated Cement Companies Limited held at EsplanadeHouse, Mumbai on November 10, 1936.

1937With the transfer of the 10th company to ACC, viz., Dewarkhand Cement Company, the formation of ACC is complete on October 23, 1937.

1944ACC`s first community development venture near Bombay.

1947India`s first entirely indigenous cement plant establish at Chaibasa in Bihar.

1952Village welfare scheme launched.

1955Sindri cement works used the waste product calcium carborate sludge from fertili

zer factory at Sindri.

1956Bulk cement Depot established at Okhla, Delhi.

1957Technical training institute established at Kymore, Madhya Pradesh

1957Katni Refractories.

1961

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Blast furnace slag from TISCO used at the Chiabasa Unit to manufacture PortlandSlag Cement for the first time in India.

1961Oilwell Cement manufacture at ACC Shahabad Cement Works in Karnataka for cementation of oilwells up to a depth of 6000 feet.

1961Manufacture of Hydrophobic (waterproof) cement at ACC Khalari Cement Works in Bihar.

1962Manufacture of Accoproof a waterproofing additive.

1965ACC`s Central Research station establish at Thane.

1965Manufacture of Calundum, a High Alumina Binder,firecrete, Low Density Alumina Ca

stables and high Alumina Refractory cement.

1965Manufacture of Portland Pozzolana Cement.

1968Advent of computer in ACC for data processing and designing management information and control systems.

1968ACC supplied and commissioned one-million-tone iron ore palletizing plant ordered by TISCO.

1971Manufacture of Whytheat Castables A, K, C and Cal-Al-75.

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1973Takeover of the cement marketing company of India (CMI).

1977ACC received ASSOCHAM first national award from the year 176 instituted for outstanding performance in promoting rural and agriculture development activities.

1978Introduction of the energy efficient precalcinator technology for the first timein India. Full scale commercial production based on MFC technology at Wadi in 1979.

1979ACC wins international contract for operation and management of a new one million tone cement plant at Yanbu-Ras Biridi in Saudi Arabia.

1982Commissioning of the first MPTA plant in the country at Wadi, Karnatka.

1984ACC achieves a breakthrough in import substitution by developing and supplying aspecial G type of oil well cement to ONGC.

1987ACC develops a new binder for use at sub-zero temperatures, which is successfully used in the Indian expedition to Antarctica.

1992Incorporated of bulk Cement Corporation of India, a joint venture with the Government of India.

1993

ACC starts the commercial manufacture of Ready Mixed Concrete at Mumbai.

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1998Commissionong of the 0.6 MPTA cement grinding unit at Tikaria, Utter Pradesh.

1999Commissioning of captive power plants at the Jamul and Kymore plants in Madhya Pradesh.

1999Tata group sells 7.2% of its stake in ACC to Ambuja Cement Holding Ltd., a subsidiary of Gujarat Ambuja Cement Ltd. (GACL).

2000Tata group sells their remaining stake in ACC to the GACL group with 14.45% nowemerge as the single largest shareholder of ACC.

2001Commissioning of the new plant of 2.6 MPTA capacity at Wadi, Karnataka plant, the largest in the country and among the largest sized kilns in the world.

2002ACC wins PHDCCI Good Corporate Citizen Award.

2003IDCOL Cement Ltd. becomes a subsidiary of ACC.

2004IDCOL Cement Ltd. is renamed as Bargarh Cement Limited.

2004ACC raise US $ 100 million abroad through Foreign Currency Convertible Bonds forUS $ 60 million and Global Depository Share for US $ 40 million. Both offeringare listed on the London Stock Exchange.

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2004ACC named as a Consumer Super brand by the Super Brand Council of India becomingthe only cement company to get this status.

2004Green Tech Safety Gold and Silver Award awarded to Madukkarai Cement Works and Katni Refractory Works by Green Tech Foundation for outstanding performance in Sa

fety Management System.

2005ACC receive the CFBP Jamnalal Bajaj Uchit Vyavahar Puraskar Certificate of Merit-2004 from Council For Fair Business practice.

2005Holcim group of Switzerland enters strategic and alliance with Ambuja group by acquiring a majority stake in Ambuja Cement India Ltd (ACIL) which at the time held 13.8% of total equity share in ACC. Holicm simultaneously makes an open offerto ACC shareholder, through Holcim Cement Pvt Ltd and ACIL, to acquire a majority shareholders in ACC. Pursuant to open offer, ACIL`s share holding in ACC incr

eases to 34.69% of the equity share capital of ACC.

2006ACC receives Good Corporate Citizen Award 2005-06, from Bombay chamber of commerce.

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BUSINESS RELATION BETWEEN ACC & HOLCIMA New Association was forged between ACC and the Holcim Group of Switzerland in2005. In January 2005, Holcim announced its plans to enter into a long-term strategic alliance with the Ambuja Group by acquiring a majority stake in Ambuja Cements India Ltd. (ACIL), which at the time held 13.8 per cent of the total equityshares in ACC. Holcim simultaneously announced its bid to make an open offer toACC shareholders, through Holcim Cement Pvt Limited and ACIL, to acquire a majo

rity shareholding in ACC. An open offer was made by Holcim Cement Pvt. Limited along with Ambuja Cements India Ltd. (ACIL), following which the shareholding ofACIL increased to 34.69 per cent of the Equity share capital of ACC. Consequently, ACIL has filed declarations indicating their shareholding and declaring itself as a Promoter of ACC. Holcim is the world leader in cement as well as being large suppliers of concrete, aggregates and certain construction-related services.Holcim is also a respected name in information technology and research and development. The group has its headquarters in Switzerland with worldwide operationsspread across more than 70 countries. Considering the formidable global presence of Holcim and its excellent reputation, the Board of ACC has welcomed this newassociation. The company implemented an ERP system that has standardized business process to run SAP software called CONNECT INDIA system is based on a template

that caters to ready-mix concrete business, cement and AFR process of the company with the assistance of Holcim Group. All operations, locations and transactionbecome fully integrated in a manner i.e. on line with updated data and information. The new system will greatly enhance the companys capability to capture and process a comprehensive range of data to be used for decision making and day to operation while automating some processes which were not part of earlier IT system. Project connect India integrates tighter control through well defined authorization profiles and rigid system. The new features serves as triggers to usher in better work habits and practices.

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GAGAL CEMENT WORKSINTRODUCTION:Gagal Cement Works implemented & obtained ISO14001 Environment System, ISO9001:2000 Quality Management System & OHSAS18001 Occupational Health and Safety Management System Certification. The Gagal Cement Works was set up in the year 1984 wit the aim to serve the market of Himachal Pradesh, Punjab, Uttaranchal, Utter Pradesh and Jammu & Kashmir. ACC was the first to put up large scale industry hous

e in a backward area of Himachal Pradesh. Gagal-1 unit started with an annual capacity of 0.56 Million Tones(with one kiln of 1700 TPD). Gagal-11 unit of 1 Million Tone capacity (with one kiln of 3300 TPD) was installed in 1994-1995. TodayGagal Cement Works has risen to produce 3.2 million tones of blended cement andis like to increase to 4.0 Million Tones in the current financial year 2005 to 2006.Gagal Cement Works is market leader in northern region and maintains its market share in all strategic markets.GCW is the largest cement unit in this entireZone. Four other major cement manufactures from Himachal Pradesh, Punjab and Rajasthan are his competitors. ACC cement has very strong brand image, trusted bygeneration for consistent and durable cement quality, fair business and practiceand long association with dealers and customers are the principal factor whichprovide us competitive advantages over the other brand. ACC unique R & D support

and business policy, differentiate it from its competitors.

GEOGRAPHICAL DETAILSAmong the largest private sector companies, ACC is the only company to set up acement plant in 1982 in backward designated area at Barmana, Distt. Bilaspur (HP) and started production with effect from 12th March 1984. Barmana is 18 kms north to Bilaspur. The National Highway No.21 connecting Ambala in Haryana and Manali in H.P. passes through Gagal Cement Works and its colony. The colony is at latitude 31.5-degree north and 77degree East Longitude. The total land acquired for the factory, colony and mining area is 2319.10 bighas. Factory23


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covers 365 bighas, the colony covers 345 bighas and the mining area is about1633bighas. The topography of the area around the worksis mount-ainous. Mean maximum temperature of the area goes upto 45 degree Celsius in the month of June and the minimum temperature upto 3-degree in the month of December. The work has generated direct and indirect employment to the scale of nearly 12000. Nearby Towns: Bilaspur, Sunder Nagar, Mandi.

CONTRIBUTION TO GOVERNMENTAnnual contribution to center government by way of taxes, duties is 155 crore out of which for Himachal Government is 100 crore. And along with this it is alsohelping Govt. as its social responsibility. The company has constructed a Govt.degree college; it is spending money on schools, hospital and on other works ofpublic welfare.

GAGAL CEMENY WORKS-AN TOWARDS EXCELLENCE

UNRELENTLESS

PURSUIT

Gagal Cement Works is committed to deliver quality products to the customers. Gagal Cement Works has to its credit many a prestigious certifications like IS/ISO9002, ISO 14001 for environmental management system and OHSAS 18001 for adopting high class measures in the sphere of Occupational Health and Workers Safety inthe manufacturing of cement.

QUALITY POLICYBuild Quality In Do not Sort Bad Quality Out Quality Improvement is Limitless and therefore Continuous Concern for Quality is for Entire Organization and Not Just for Product Satisfy Customer Fully and Continuously

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GAGAL CEMENT WORKS- A SYSTEMATIC APPROACH FOR CLEANER WORLDACC GAGAL Cement Works is the first point in Himachal Pradesh to have EMS certificate. The Bureau of Indian standards awarded this certificate to the works in March 1999. The certificate has resulted in batter understanding among all the employees, of overall environmental issues related to the plant. The main featureof EMS at Gagal is total involvement of employees. EMS is a program of continuous environmental improvement following a welldefined sequence of steps drawn from

the established project management practice and routinely applied in business environment.

ENVIRONMENTAL POLICY Prevent pollution and minimize fugitive emissions Comply with all applicable legal and regulatory requirements Conserve water, energy and natural resources Minimize waste generation and utilize the same Create environmental awareness and provide clean and safe environment to employees and community at large

PRODUCTION SYSTEM IN GAGAL UNIT Main Raw Material Limestone Quartzite Iron Ore Shale Gypsum Fly AshEMPLOYEES IN GAGAL CEMENT WORKS:

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The company is having the strength of manpower approximately nine hundred, out of which 90 are from management staff. Company needs low employees because of automation.

CERTIFICATION:Certification from IS/ISO 9002, ISO 14001 for environmental management system and OHSAS 18001 for adopting high class measure in the sphere of occupational heal

th and workers safety in the manufacturing of cement

MANUFACTURING PROCESSThe Gagal Cement Works is based on the most modern process of cement manufacturing namely a dry process suspension preheated kiln with precalcener. The limestone is crushed in the crusher. It is than grinding in Raw Mill along with Shale and Iron Ore to fine power. The grinding material is blended to a uniform consistency and fed to the kiln system pulverized Coal in the kiln system to heat the material to a temperature of 1500 degree Celsius. The material undergoes a seriesof chemical reaction to form a Clinker. The clinker is cooled in the Clinker Cooler and stored in the Clinker silos. It is extracted from the Silos and integrated along with Gypsum and Pozzolanaic material to form Portland Pozzoiana cement.

The cement is stored in cement silos. It is packed in 50-kg bags by automatic packing machine, loaded in trucks by auto loaders and various consumption centerin Himachal Pradesh as well as the neighbouring states of Punjab, Haryana and J&K.

POWER:The co. met 54% power requirement through captive generation. Cost of captive power generation was 34% lower as compare to grid power. In keeping with its policy of maximizing its captive power capability. It is also the process of increasing its thermal captive power generation capacity by another 45 MW. The company has already achieved significant reduction in cost in specific area like fuel, power and manpower. The drives for cost reduction will be further insified all area of operations.

MAP KEY00 Limestone quarry and crushing plant. 01 Llime Stone Stock Pile. 02 Additive Hooper. 03 Additive Storage.26


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04 Raw Mill Building. 05 Blending & Storage Silo. 06 Preheater. 07 Gas Conditioning Tower and ESP. 08 Kiln. 09 Cooler. 10 Deep Bucket Conveyor. 11/12 Clinker/Gypsum Storage. 13 Coal Mill Building. 14 Coal Mill And Bag Storage. 15 Cement Storage Silo. 16 Packing & Dispatch. 17 Cement Control Room.

DEPARTMENTATION:QUARRY DEPARTMENT

The Quarry Department is mainly concerned with the maintenance of Mines at ACC Barmana. The sub-departments namely MINE; ELECTRICAL, GARAGE, CRUSHER, STACKER &RECLAIMER support the Quarry department.

MINESGagal lime Stone Mine is captive mine of M/S ACC Ltd., Gagal Cement Works. The mining lease covers an area of 265.97 hectares. Presently the mine is one of thelargest mine of northern India and is fully mechanized by Heavy Earth Moving Equipment's.

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LIME STONE AND COAL HANDLING SECTION LIMESTONEThe crushed limestone is received from Gagal Quarry with the help of a series ofbelt conveyer and stacked in stockpile with the help of stackers.

COALCoal is used as a fuel for firing in the Kiln. Gagal Cement Works receives coalfrom different collieries of CCC, ECL and NEC by rail upto Kiratpur Sahib.

LABORATORY DEPARTMENTLaboratory department in coordination with other departments carries our regularquality control functions. Quality and process control measures are exercised at each and every stage of process. Inspection and procurement of raw materials,its testing, quality control of input materials, intermediate products at different level of process and final product that is cement are done as per procedures. Inspections and Test Records are maintained in the Laboratory as per the scheme of testing and inspection. The departmental activities are coordinated by Deputy Manager-QPC who reports to Manager- Production. Gagal Works laboratory has three sections: 1. Chemical & Instrumentation laboratory 2. Physical Laboratory 3.Site Laboratory

PROCESS DEPARTMENTThe Process department guides the operations in maintaining process parameters so that production is within the desired range of quality parameters. The processparameters are arrived at after discussions with the Departmental Heads of various sections (Raw Mill, Cement Mills & Laboratory) Manager Production, coordinates the departmental activities.

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RAW MILLActivity of Raw Mill starts from feeding Raw Material (limestone, Quartzite andIron Ore) to the Mills and ends at filling the Raw Meal to Silos.

RAW MATERIAL FEEDINGLime stone feeding to Raw Mills/Roller Mills is through the sequence of belt conveyors to different Hoppers. Feed size of limestone is 90 mm and Mills Scale, Sh

ale feeding is from the Gantry to the respective Hoppers through sequence of belt conveyors. Shale feeding is through Reclaimed or Pay Loader.

RAW MILLTwo close circuits two chamber Ball Mills are performing the grinding of limestone and Additive mix. Raw Mill is a tube construction of thick MS plate with steel lines and compartments are separated by diaphragm for improving the retentiontime and transfer of materials in second for further grinding. Mill is charged with hyper steel balls. Raw material is first fed to Tertiary Crusher (Single Rotor Reversible Impact Crusher) which reduces the size of Mix. After crushing themix the material is fed to Ball Mill where fine grinding takes place. The finerproduct is separated by Air Separator and is fed to the blending silos and the c

oarse material is fed back to the Mill Inlet.

VERTICAL ROLLER MILL (VRM)In VRM Section the material is directly fed into Mill through the feed belt forgrinding. The ground material is stored in continuous flow silos from where it is fed to the Kiln. VRM utilizes hot air from the kiln exhaust for drying the RawMix Deputy Manager VRM, who reports to Manager (Maintenance) coordinates the departmental activities

KILN DEPARTMENTKiln Department functions are categorized under two heads, Manager (Maintenance)is responsible for the maintenance of all equipment and Manager (Production) isresponsible for the Clinker Production and its quality parameters. Gagal Cement

Work has two rotary kilns. Kiln no 1 is having 3 streams coupled with 2 four stage and 1 five stage preheater with 2 precalciners, DDF and MFC. Kilns No 2 arehaving twin stream 5 stage preheater with precalciners. Pulverized coal is usedas a fuel for calcination. The Clinker is discharged to horizontal grate coolerand is stored either in Silos or in stockpiles.29


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CEMENT MILLS DEPARTMENTThe basic function of the department is to grind the required ratio of clinker and gypsum in the manufacture of OPC and clinker, Gypsum and CCP/fly ash for themanufacture of PPC with the help of 4 ball Mills for cement grinding.

PRE GRINDING UNITRoller Press is the pre-grinding unit for Cement Mills 1 & 2. In Roller Press tw

o rollers are arranged in horizontal fashion. One is fixed and other has a hydraulic thrust arrangement for horizontal movement. The clinker is fed vertically down ward between the rollers and gets crushed by the hydraulic pressure arrangement The product, which is in flakes, is fed to the Ball Mill with other additives for finished grinding.

FINISHED GRINDINGFinished grinding is performed in Ball Mills. Ball Mill is a rotating shell divided into two chambers fitted with shell liners for shell protection and chargedwith grinding media to the required volume. The impact and friction between thegrinding media and material perform grinding. Out put from the ball Mills is fedto the dynamic separator where the coarse and fines of specific sizes are separ

ated. The coarse is again conveyed to the Ball Mill for further grinding. The fines are conveyed to cement silos through a series of elevators and air slides. In order to get the desired specific surface for cement the RPM of separator is varied accordingly? The departmental activities are coordinated by Dy. Manager-Plant who reports to Manager (Maintenance).

ELCTRICAL AND INSTRUMENTATION (E & I) DEPARTMENTThe primary function of the E & I department is to maintain all E & I equipmentin the plant to provide the necessary service to ensure the smooth operation ofall E 8 & I equipment.

ELECTRICALElectrical equipment mainly comprising transformers, HT/LT motors, DC Motors, sw

itch gears, power distributor system and factory and residential colony lightingBesides the above E & I department is also responsible for the maintenance if the electrical installations of the colony. The department CO-ordinates with theother relevant departments for proper utilization of the Grid & DG power.30


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INSTRUMENTATIONInstrumentation system can be effectively termed as the nervous system of the plant. With the recent advanced in technology instrumentation has become one of the most important aspect of cement manufacturing industry. Almost all the monitoring and controlling parameters are now available I the Central Control Room (CCR) for operators to run the plant efficiently. Accuracy and degree of control hasincreased manifold due to the latest instrumentation control systems. Dy. Manag

er (Electrical) and Dy. Manager (Instrumentation) report to Manager (E & I) forelectrical and instrumentation activities.

WORK SHOPFollowing activities are carried out in the workshop department: 1. Departmentalmaintenance Activities 2. Maintenance of Gear Boxes 3. Compressors & PD Blowers4. Water Pumps 5. Various equipment at Rambagh Pump House, Filter and Sewage Water Treatment plants. The departmental activities are coordinated by Dy. Manager(Plant) who reports to Manager (Maintenance).

COMMERCIAL DEPARTMENT Procurement Section: This section looks after that equipment, tools and other

requisite items are made available to different departments in time. Deputy ManagerPurchase who reports to Sr. Manager-Commercial coordinates the departmental activities. Packing House Department: Packing plant is the place where cement ispacked & dispatched to various locations. Gagal Cement Works packing departmenthas six silos with total storage capacity of 35200 tonnes. There are three Rotary Packer in Gagal I packing plant with a capacity of 100m TPH each and two electronic rotary packers in Gagal II packing pant with a capacity of 180 TPM each. All the packers have truckloading facility because the cement form Gagal works todifferent locations by road.31


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The various varieties of cement handled are: 33 Grade Ordinary Portland Cement (OPC) 43 Grade Ordinary Portland Cement (OPC) PPC (Portland Pozzolona Cement) Assistant Manager-Plant reports to Manager Commercial for Packing Plant Activities.

Cement Dispatch Section: Cement dispatch section receives dispatch instruction for Regional Marketing Office, Chandigarh and also from Shimla. The trucks registered with authorized transporters enter the factory gate with Loading Advice cum

gate Pass. The Trucks Gross weight is taken at the Exit Gate by electronic weighbridge and finally an Excise Invoice is issued to the truck driver.The departmental head reports to Manager Commercial.THE CIVIL DEPARTMENT

In cement industry the maintenance and applications of Refractories in kiln andits auxiliary units are one of the most important job. It is the refractory, which is subject to all sort of, processes and operational conditions like high temperature, abrasion, alkalis, chemicals, thermal shocks, mechanical shocks etc. And protects the metallic body of the units. Due to this fact a strict adherencewith the quality of the refractory at every step from receipt to its applicationis of paramount importance. In the organization the civil department does the c

omplete dealing with the refractory and is also responsible for all civil related jobs in the factory and colony. Deputy Manager-Civil who reports to Manager-Maintenance coordinates the departmental activities. MAINTENANCE INSPECTION PLANNING & SYSTEMS (MIPS) As the name suggests the main function of the department ispreparing and planning for carrying out various inspection, maintenance job andtop record and update the inspection results. Inspection/Maintenance planning isbased upon the diagnosis of change in behavior pattern of sound, temperature, heat, vibration, viscosity etc.32


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MIPS department also coordinates in planning the maintenance activities of various departments so as to get optimum utilization of stoppage duration. MIPS alsocarries out the down tile analysis of main equipment.

GENERAL STORESThe general stores is the department which is involved in making the balanced and timely flow of materials, spares, tools and equipment. General Stores also arr

anges for the disposal of the scrap and unwanted materials. Deputy Manager who reports to Works Manager coordinates the activities of the department.

INFORMATION SYSTEM DEPARTMENTThe functions of Information System Department is to: 1.Transformation of EDP toDecision Support System 2. Optimize End User Computing to increase the Individual Productivity 3. Capture Processing and Sharing of Information from the Net 4.In House Development & Deployment of Application Packages 5. Database Maintenance & Administration Hardware Setup y UNIX based RISC Server. y Win-NT based Intel Servers y Microsoft Exchange Server P I, P II, P III & P IV PCs : 135

Software Setup Operating System: UNIX SVR 4, Win - NT 4.0, Win 95 & Win - 98 Ora

cle 8 I, Developer 2000, Microsoft Exchange 5.5. MS-OFFICE 97 Office XP

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Intra-plant Connectivity All plants, RMOs, Head Office is connected through INSAT- 3B services provided by TataNet. Connectivity to the external World is through IIS, Head Office.

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MARKETINGACC Range of cement and blended cements are marketed through a network of 12 regional marketing offices, several area offices and warehouses. A countrywide network of about 11,000 stock lists who, in turn, are assisted by the sub- dealer'sback this. Such an all-pervasive marketing network has an enabled ACC to consolidate itself with a national presence. And the customer is assured of being ableto get quality ACC products when and where he wants them. Complementing this is

a unique customer services cell comprising qualified civil engineers, which assist and advice customers with prior and post sales services. This service beginswith selection of type and grade of cement (where applicable) to trouble shooting and on site assistance. Keeping pace with changing times, and an ever- growingneed for specialized services, ACC has been offering its marketing expertise and distribution facilities to other producers in cement and related areas. However, a precondition of all such agreement is quality control supervision to be carried out by an ACC expert located at the franchisee's plant. Currently, ACC hasfranchising agreements for cement marketing with Alcon Cement Company, Goa and Cochin cement Ltd., Cochin. ACC also exports cement to SAARC Nations, especiallyNepal and Bangladesh on a regular basis. Besides ordinary Portland cements, these exports include custom- tailored cements.

HUMAN RESOURCES DEPARTMENTThe basic object of setting up Human Resource Department is to provide inputs tothe employees for his optimum level of efficiency. It includes looking after various HR related functions such as training & development, performance and potential appraisal, planning and allocation of manpower, industrial relations including negotiations and dealing with staff functions such as transfer, promotion, disciplinary action, grievance handling etc. Department is also responsible for providing welfare amenities/facilities to employees, dealing with land matters, community development, colony administration etc. Various details of personnel policies are readily available with HR department. Manager-HR & Admn. Coordinatesthe activities of the department. Manager-HR & Admn. Coordinates the activitiesof the department.

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Manpower Arrangement:` The total manpower employed at ACC, Gagal Cement works are divided into 2 categories. Management Staff is governed by Conduct Rules framed by the company whereas Non-Management Staff is governed by Standing Orders certified under the Industrial Employment (Standing Orders) Act, 1946

MANPOWER

Mgmt. Staff

Non-Mgmt Staff

TM - Top Management WM -Works Manager E4 - Sr. Manager E3 - Manager E2 Deputy Manager E1 Assistant Manager

MONTHLY PAID

DAILY PAIDGrades

A B C D

Grades

TC I II III IV V

Senior Officer/Engg.

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TOTAL PRODUCTIVE MAINTENANCEACC Gagal Cement Works has continuously tried to improve upon its operational productivity through world class plant management practices known as Total Productive Maintenance (TPM). TPM is the integration of the basic functions of Production and Maintenance allowing the employees to jointly take the responsibility for, and ownership of their work processes and equipment. It aims to maximize Overall Equipment Effectiveness (OEE). It establishes and promotes a systematic appro

ach to achieve operational excellence through autonomous working. TPM involves all employees at all levels in every function of its implementation. The most important point about TPM is that it continuously encourages all the employees to undertake continuous improvement of all work-related processes and systems by adopting a proactive problem solving approach. 15th of every month is the day for TPM gate Meeting. We are striving towards following goals using TPM: y Zero Breakdown y Zero Accident

y Zero Defect y Zero Waste y Zero Inventory

SAFETYGagal Cement Work constantly keeps a vigil on the safe practices of doing work a

nd in this regard expects the same from all its employees. The following table presents the expectations from both the participants in this regard. Deputy Manager-Safety coordinates all activities related to safety at works. Besides day today safety functioning, safety committee meets once in every month. The committee consists of equal number of representatives form management and wage board employees.

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All employees working inside the factory are required to wear helmets, safety shoes and other safety gadgets. Other regular safety activities include monthly Gate Meeting, on first of every month, Nukkad Drama, Quiz & Slogan Competition celebration of National Safety Day etc.

OUR SAFETY COMMITMENTMANAGEMENT EMPLOYEES

1. Provide Safe working Condition

The care of oneself and colleague

2.Provide system for the safe control of work

Immediately report any unsafe condition/hazard

3. Supply information on work hazard

Look out for hazards and potential dangers to self and others

4. Arrange adequate training and instrucyion in safe working practices

Do not take any short cuts

5.Make appropriate protective clothing and equipment available

Know the safety guidelines and follow working instructions

6. Punish people violating instructions on safety and health

Always use safety equipment indicated and provided

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FINANCE DEPARTMENTIntroduction:Finance department plays a major role in the working of any organization as forallpurpose, money is required, which is arranged, procured and disbursed as thefinance department. They only make budget go for cost control and maintain to optimum balance of cash for smooth operations. As such the finance department in Gagal cement works is looking after only some of the aspects like payment for raw

material purchased, cost control and insurance aspects of the unit. All receiptsfor cement sold is received by Regional office at Chandigarh and fund financedby unit for different payment from its R.O.

Hierarchy of the finance department: It is a line organization having a full-fledged department to manage the finance budget, costing and other matter of this department. The ACC Gagal cement works president has to manage two departments mainly i.e. works and finance.

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President

General Manager

Assistant Manager

Senior Officer (Cash)

Senior Officer

Senior Officer (Costs)

Clerks Fixed Asset Cost Employee Salary Transportation Cash

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FINANCE DEPARTMENTAccount Section: The accounts section deals all the general accounting, employeepayroll, billing and matter related to taxation etc. The department activitiesare coordinate by Assistant Manager-Accounts that report to Manager-Finance. Cost Section The Cost Section does Accounting relating to preparation of Monthly Cost Data and Bill Provisioning.Assistant Manager-Cost coordinates the departmental activities and reports to Manager-Finance. 1. GEERAL OR ACCOUNTS SECTION

Accounting Procedure:The accounting procedure of ACC Gagal cement works is not a new complicated one.They follow a standardized rule of making entries in there books of accounts orposting or making their trial balance, Gagal cement works unit make its Trial Balance in the monthly basis transaction and rent it to the Head Office. Head Office prepares final accounts for all units not individual unit. Gagal cement works follows the following procedure: Step1: The quotations are called for acquiring or procuring the particular assets, raw material fuel etc. Step2: After then estimate decide/fixed through CESS. (CAPITAL EXPENDITURE SECTION SCHEME) Step3: After then allocation of budget for different requirements. Step4: Then order replace, R.M/Assets be procured, inspected (G.R.No) by the concerned department. S

tep5: Then GR No. After quality check etc. is sent to finance department where the cashier makes the payment. Step6: The ledger department debits this in the books.41


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Step7: Finally at the wish of finance department assets is charged and declaredfree.

FINANCE MANAGERFinance Manager is totally responsible for all activities to payment/receipts ofcash and fund Management of the unit. His decision on payment will be final aspersonal manual, account manual directives laid by the organization. Under Finan

ce Manager the financial activities is disciplined in the manner as per smooth functionary of all activities of payment such as salary and wages, payment to sundry creditors which include all pretty payments to local contractors, repurations, workers and officers of all grade in working unit. In detail it can be said that under finance manager their will be payment of salary and wages, allocationof various financial activities such as disbursement of cash by cashier, the payment like contractors bill, local bill, raw material bill, stores and spares payment of raw material and packing material, traveling bills, outstation allowances. All the various mislenious payments sanctioned are being made. The financialactivities are on summation of inputs information system department (I.S.D.) provides various financial, cosying outputs available on daily report, weakly report and monthly reports. It also provides information like cash payment, voucher,

cash receipt voucher, and various types of bills also. Various type inventory output summary of transaction bills of output (local, contractor,raw material etc.) various type of finance ledgers of the month and monthly trial balance. Account staff to routs all payment in account department:1. To verify the correction of payment 2. To sanction the payment to:a) Staff b) Officer c) Management

FINANCIAL MANAGEMENT PREPAPER Payroll of employee.42


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Accounting of sales. Financial accounts. Supply bills. Material Accounting.

COST SECTION:The Cost Section is a branch of accounting and has been developed due to limitations of financial accounting. Financial accounting is primarily concerned with record keeping directed towards the preparation of profit and loss account and balance sheet. It provides information regarding the profit and loss that the busi

ness enterprise is making and also its financial position on a particular date.The information concerning the business enterprise is helpful to the managementto control in a general way the major function of business viz., finance, administration, production and distribution but details regarding operating efficiencyof these divisions are lacking. Infect, the development in the field of cost accounting is so quick and fields covered by it are expanding so much in magnitudethat it becomes difficult for the management to lay down management policies, to guide the management decisions or evaluate operating management performance with the information provided by financial accounting.

OBJECTIVES OF COST ACCOUNTING.The objective of cost accounting are ascertainment of cost, fixation of selling

price, proper recording and representation of cost, data to the management for measuring efficiency and for cost control. The aim is to know the methods by which expenditure on materials, wages and overhead is recorded, classified and allocated so that the cost of products and services may be accurately ascertained, these cost may be related to sales and profitability may be determined. Yet with the development of business and industry. Its objectives are changing day by day.The following are the main objectives of cost accounting. a) To ascertain the cost per unit of the different products manufactured by a Business concern.

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b) To provides a correct analysis of cost both by processors or operations and the different elements of cost. C) To provides requisite data and serve as a guide to price fixing of products manufactured or served rendered. d) To ascertain the profitability of each of the products and advise the management as to how these profits can be maximizes. e) To reveal sources of economy by installing and implementing a system of cost control for materials, labor and overheads. f) To advise management on future expansion policies and proposed capital projects. g)

To help in the preparation of budgets and implementation of budgetary control. h) To guide management in the formulation and implementation of incentive bonus plans based on productivity and cost savings. i) To supply useful data to the management to take various financial decisions such as introduction of new productsreplacement of labor by machine etc. j) To help in supervising the working of punched card accounting or data processing through computers. k) To organize theinternal audit systems to ensure effective working of different department. l) To organize cost reduction program with the help of different department Managers.

COST SHEET OR STATEMENT OF COSTCost sheet is a statement designed to show output of a particular accounting per

iod along with break- up of costs. The data incorporated in cost sheet are collected from various statement of accounts which have been written in cost accounts, either day by day or regular records. There is no fixed form for preparation ofcost sheet but in order to make the cost sheet useful it is generally presentedin columnar form. The columns are for the total cost of current period, per unit for the current period, total cost and per unit cost for a period and so on. Cost sheet is a memorandum statement. Therefore, it does not from part of doubleentry cost accounting records. Inspite of this, the relationship between cost sheet and financial accounts, which are maintained on double entry system, is veryimportant as cost sheet derives its data from financial accounting.44


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SPECIMEN OF STATEMENTS OF COST UNITS:TOTAL COST PARTICULR DIRECT MATERIAL DIRECTLABOUR DIRECT EXPENSES PRIME COST ADD: WORKS OVERHEAD WORKS COST ADD: ADMINISTRATION OVERHEAD COST OF PRODUCTION ADD: SELLING AND DISTRIBUTION OVERHEAD TOTAL COST OR COST OF SALES (RS.) XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX COST PER UNIT(RS.) XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

TREATEMENT OF STOCK: Stock requires special treatment while preparing a cost she

et. Stock may be of raw materials, work-in-progress and finished goods.

STOCK OF RAW MATERIALS: If opening stock of raw materials, purchased of raw materials and closing stock of raw materials are given, then with the help of the following raw materials consumed can be calculated as: RS. Opening stock of raw materials Add: Purchase of raw Materials x x x x x x

____________

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x Less: Closing stock of Raw Materials x

x x

x x

____________ Cost of Raw Materials consumed x x x

_____________

STOCK OF WORK IN-PROGRESS:Work in-progress means units on which some work has been done but which are not yet complete. Work-in-progress is valued at prime costs or work cost basis, but the latter is preferred. If it is valued at works or factory cost then opening and closing cost may will be adjusted as follows: Prime cost Add: Factory overheadincurred Add: work-in-progress (beginning) x x Less: work-in-progress (closing)Factory or works cost x x x x x x x x x x x x x x x x

Stock of Finished Goods: If opening and closing stock of finished stocks are als

o given, and then these must be adjusted before calculating cost of goods sold as under: Cost of Production Add: Opening stock of finished goods x Less: closingstock of finished goods Cost of goods sold x x46

x

x x x x x

x x x x x x


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STATEMENT SHOWING COST OF CLINKER MANUFACTURE PARTICULARS RAW MATERIAL: Lime stone PURCHASED IRON ORE Purchased Quartzite (corrective materials) OWN QUARTZITE Other Raw Materials (shale) FUEL : COAL Coke POWER : PURCHASED OWN GENERATION DIESEL COST OF CLINKER AMOUNT (RS.)

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STATEMENT SHOWING COST OF CEMENT GROUNDS PARTICULARS COST DATA Materials consumed : CLINKER PURCHASED GYPSUM FLY ASH Cost Of Cement Ground AMOUNT (RS.)

STATEMENT SHOWING COST OF CEMENT PACKEDAND LOADED

PARTICULARS COST DATA PACKAGING AND LOADING COST EXCLUDING PACKAGING MATERIALS Packing material cost : HDPE Bags (High Density Polythene) COST OF PRODUCTION

AMOUNT(RS.)

TOOLS AND TECHNIQUES OF COST CONTRL Budgetary control Standard costing48


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Standardization of product and tools and equipments Improvement in design Material control Labor control Overhead control Production planning and control Automation Operation research Market research Planning in control of finance WAYS OF ACKIEVING COST REDUCTION (In Gagal Cement Works (ACCLtd.) Barmana, Bilaspur) Reducing setup- time. Eliminating material handling activities. Choosing an insertion process. Using common components. Choosing best quality of raw material at reasonable price. Reducing idle time.

FINANCIAL CONDITION OF ACCSHARE CAPITALIssued capital and subscribed capital as a December 31st,2008 increased to Rs.187.88 crore as against Rs. 187.83 crore as at the end of previous year primarilyon account of exercise of conversion option by the FCC Bond Holder.

RESERVE AND SURPLUS49


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Reserve and surplus as at December 31st 2008 stood at Rs.4739.85 crore as compared to Rs.3964.78 crore as at the end of previous year. The increase is mainly onthe account of retained profits.

LOAN FUNDThere has been a increase in loan fund to Rs.482.03 crore as at December 31st 2008 as compare to Rs.314.70 crore as at the end of previous year.

FIXED ASSETSNet fixed assets including capital work in progress as at December 31st 2008 wasRs.3469.70 crore as compared to Rs.3314.72 crore as at the end of previous year.

INVESTMENTTotal amount of investment as at December 31st 2008 was Rs. 679.08 crore as compared to Rs.844.98 crore as at December 31st 2007.

DEFFERED TAX LIABILITIESDeffered tax liabilities provision outstanding as at December 31st 2008 was Rs.1

777.36 crore as compare to Rs.1554.92 crore as at the end of previous year.

NET CURRENT ASSETSNet current assets decreased to Rs.138.99 crore as at December 31st 2008 from Rs.7.26 crore as at December 31st 2007.

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FINANCIAL HIGHLIGHTS 2008 2009 (ACC).2008PARTICULAR Gross Revenue Profit/(Loss) before tax and exceptional items Exceptional Items Profit/(Loss) after tax and exceptional items Dividends Capital Employed Net Worth Borrowings Debt: Equity Ratio

2007 (in crore) 8025.81 1717.18 213.11 1438.59 438.92 4790.57 4152.71 306.41 0.0

7

(in crore) 8548.48 1687.74 48.86 1212.79 439.14 5745.55 4927.73 482.03 0.10

Book Value Per Share at Period End Basic Earning per Share Dividend Per Share Employee(Number) Shareholder(Number)

262.56 64.63 20.00 9557 1,55,813

221.33 76.75 20.00 10,032 1,27,476

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Profit and Loss Account of the year 2008-07S.No. Particulars 2008 (in Crore) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Rated Capacity Production Gross revenue(including Excise Duty) Employees Cost Mfg.and other Expences Depreciation Interest Expences Provision for tax Income(4-5 to 9) Percentage of Gross Revenue Par Share Dividend Retained Profit (10-13) 226208 8548 413 6114 294 40 524 1163 13.62 62.02 439 724 2007 ( in crore) 224 199 8026 353 5576 305 74 492 1226 15.27 65.32 439 787

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BALANCE SHEET AS AT DECEMBER 31, 2006S.no

PARTICULAR

2008 (in crore)

2007 (in crore)743 1460 2221 (18) 3964 845 -4769 332 306 3965 188

1. 2. 3. 4. 4. 5. 6. 7. 8. 9. 10. 11.

Cash and securties Receivebles and Inventories Less: Current Libalities Total(1+2+3) Net Block Investments Other Non Current Assets Tola Assets less Current Libalities Deferred Tax Libalities Borrowings Reserves and Surplus Share Capital

984 1751 2741 (6) 5073 679 --. 5746 336 482 4740 188

NEEDS OF STUDY

The study in itself a problem of how best to manage capital of a company i.e. ACC Ltd. Therefore, needs for conducting the study are as follows:1. Due to time between production and sales, every company has to maintain a substantial portionof working capital to run its operation smoothly. 2. In case of manufacturing companies it is required to maintain about 40% - 50% of their capital as currentand remaining in the form of fixed assets for the large scale production of product. So, every manufacturing company needs to arrange required working capital.

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3. Investment in current assets and the level of current liabilities have to geared quickly to change in sales. To be sure, fixed assets investment and long term financial position are also responsive to variation in sales.

OBJECTIVE OF THE STUDYThe objectives aim to highlight the reasons how important is the financial system and financial statement for an organization or company. There are various obje

ctives of the study are as follows: 1. To study liquidity of the firm 2. To study long term financial position 3. T study the short term financial position 4. Earning per share

RESEARCH METHODOLOGYOur Research project has a specified framework for collecting the data in an effect manner. Such framework is called Research Design. The research process which was followed by our consisted of following steps:

Defining the problem & Research objectives:The dfinition of problem includes thestudy of financial system in ACC Ltd GAGAL CEMENT WORKS.

Developing The Research Plan:It is very important to researching anything we must know about the it`s main sources where we get the main information regarding the research plan. The development of research plan has following steps:

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Data Sources:There are two types of data were taken into consideration i.e. Secondary data and primary data. The secondary data has been used to make the analysis because wehave no much sufficient time and resources to collect the primary data.

Secondary Data:Secondary data is that data which is collected for other purpose. This is indire

ct collection of data from sources containing past or recent past information like annual reports, balance sheet, books, newspapers and magazines etc.

Collecting The Information:For this tesearch methodology, we were collecting information with the help of annual reports, balance sheets and other companies publications.

Analyse The Information:In this research methodology the next step is to extract the pertinent finding from the collected data. We tabulated this collected data and develop the means of analyzing the data. There are so many tools for financial analysis but we mainly concentrate on the RATIO Analysis and supportive information taken from the o

ther means i.e. comparative financial statements with its major components viz.common size statement, comparative financial statement.

DESIGN OF STUDYThe finance has an important impact on the working of an industry or organization. So it becomes significant to note that the money makes the money. Money playsan important role to run the business smoothly. So it needs a sound planning offinance arrangement and preparation of financial statement. The design of studyis therefore significant to know the financial arrangement and working of capital in the production organization or company like ACC Gagal Cement Works (Barmana). It is therefore with this point of view the present study has been undertaken as present training report.

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RATIO ANALYSISMEANING OF RATIO:Ratio Analysis is one of the most powerful tool of financial analysis. It is the process of establishing and interpreting various ratios. It the help of ratios that the financial statements can be analysed more clearly anddecisions made from such analysis.

USE OF RATIOS:The use of ratio analysis is not confined to financial manager onl

y. There are different parties interested in ratio analysis for knowing the financial position of firm for different purposes. In view of various users of ratios, there are many type of ratios which can be calculated from the information given in the financial statements. The particular purposes of user determines theparticular ratios that might be used for financial analysis.

RATIO ANALYSIS OF ACC GAGAL CEMENT WORKS LTD:ANALYSIS OF SHORT TERM FINANCIAL POSITION OR TEST OF LIQUIDITY:The short term creditors of the company like suppliers of goods of credit and commercial banks providing short term loans are primarily interested to knowing the company`s ability to meets its current or short term obligations as and when those become due. The short term obligation of a firm can be met only when there

are sufficient liquid assets. Therefore a firm must ensure that it does not suffer from lack of liquidity or there capacity to pay its current obligations. If afirm fails to meet such current obligations due to lack of good liquidity position, its goodwill in the market is likely to be affected beyond repair. It willresult in a loss of creditor`s confidence in a firm may causes even closure of the firm. Even a very high degree of liquidity is not is not good for a firm because such a situation represents unnecessarily excessive funds of the firm beingtiedup in current assets. Therefore, it is a very important to proper balance inregards to the liquidity of the firm.

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COMMENTS ON FINANCIAL POSITION OF THE ACC WITH THE HELP OF RATIOS:SHORT TERM FINANCIAL POSITION:y LIQUIDITY RATIOS:

CURRENT RATIO:CURRENT RATIO=CURRENT ASSETS/CURRENT LIABILITIES

CURRENT ASSETS

=2735.20Cr.

CURRENT LIABILITIES = 2741.29Cr. CURRENT RATIO = 1:1( approx)

INTERPRETATION OF CURRENT RATIO:Current Ratio is an indicator of the firms liquidity and its ability to pay its current obligations in time when they become due. As a convention the minimum of two to one ratio is referred to as a bankers rule of thumb. Current Ratio of ACC Ltd. is 1:1. it is matter of concern. As a manufacturing concern there is more investment in the capital goods but current assets also to be increased accordinglyto improve the current ratio. A business with heavy investment in fixed assetsmay be successful even the ratio is low.

QUICK RATIO:QUICK RATIO=QUICK ASSETS/CURRENT LIABILITIESQUICK ASSETS=Cash in Hand and in bank+ B/R + Sundry Debtors + Marketable Securities+ temporary Invesments

QUICK ASSETS CURRENT LIABILITIES QUICK RATIO

= 1349.33Cr. = 2741.29Cr. = 0.50:1

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INTERPRETATION OF QUICK RATIO:Usually, a high acid test ratio is an introduction that the firm is liquid and has the ability to meet its current or liquid liabilities in time and on the other hand a low quick ratio represents that the firms liquidity position is not good. As a rule of thumb quick ratio of 1:1 is considered satisfactory. But quick ratio of ACC Ltd. is 0.50:1 it is low, company should take necessary steps to improve this.

ABSOLUTE LIQUID RATIO:ABSOLUTE QUICK RATIO = ABSOLUTE LIQUID ASSETS/ /CURRENT ASSETS OR = CASH & BANK+ SHORT TERM SEC./CURRENT ASSETS LIQUID ASSETS CURRENT ASSETS = 991.48Cr = 2741.29Cr.

ABSOLUTE LIQUID RATIO = 0.361:1

INTERPRETATION OF ABSOLUTE QUICK RATIO:Absolute quick ratio is also important tool. It shows the relation of absolute liquid assets with current liabilities. Rule of thumb for this ratio is 1:2. In regards of ACC Ltd this ratio is quite low high. Management should gave attention

in this context.

y CURRENT ASSETS MOVEMENT OR EFFICIENCY/ACTIVITY RATIO: INVENTORY TURNOVER RATIO:

INVENTORY TURNOVER RATIO = NET SALES / AVG. STOCK AT COST

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NET SALES AVG. STOCK

= 7,308.62Cr. = 762.06

INVENTORY TURNOVER RATIO = 9.6times INTERPRETATION OF INVENTORY TURNOVER RATIO:Inventory turnover ratio is concerned with the maintenance of level of inventoryof finished goods so as to be able to meet the requirements of the business. Le

vel of inventory should neither be too high nor too low. Inventory turnover ratio indicates the number of time the stock has been turned over during the period.In the context of ACC Ltd. is manufacturing company the inventory turnover ratio is good and shows their good efficiency to manage their inventory. Inventory Conversion Period=Days in year/Inventory Turnover Ratio = 365/9.6 = 38.02 days OR38 days

INTERPRETATION OF INVENTORY CONVERSION PERIOD:This shows the time taken to clear the stocks. Stock of the company cleared morethan five times in the year. It shows their good management of the stores. Thisis good as a manufacturing concern.

DEBTORS TURNOVER RATIO:DEBTORS TURNOVER RATIO= NET CREDIT ANNUAL SALES OR ANNUAL TOTAL SALES/ AVERAGE TRADE DEBTORS

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TOTAL SALES

= 7308.62Cr.

AVG. DEBTORS = 299.73Cr. DEBTORS TURNOVER RATIO = 24.38times.

INTERPRETATION OF DEBTOR TURNOVER RATIO:

Debtor Turnover Ratio indicates the number of times the debtors are turned overduring a year. Debtors turnover ratio of ACC Ltd. is higher it shows more efficient management of debtors.

AVERAGE COLLECTION PERIOD = NO.OF WORKING DAYS/ DEBTORS TURNOVE RRATIO = 365/24.98 = 14.9 Days or 15 days

INTERPRETATION OF AVERAGE COLLECTION PERIOD RATIO:The average collection period ratio represents the average number of days for which a firm has to wait before its receivables are converted into cash. Average collection period of the ACC Ltd. shows their efficiency for debt collection andshows their credit terms & policy towards debtors.

WORKING CAPITAL TURNOVER RATIO:WORKING CAPITAL TURNOVER RATIO= SALES/ NET WORKING CAPITAL SALES = Rs. 7308.62Cr.

NET WORKING CAPITAL = Rs. 2747Cr. WORKING CAPITAL TURNOVER RATIO = 2.66 times

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INTERPRETATION OF WORKING CAPITAL TURNOVER RATIO:Working capital Turnover Ratio indicates the number of times the working capitalis turned over during a year. Working capital turnover ratio of ACC Ltd. is higher it shows more efficient management of Working capital.

ANALYSIS OF LONG TERM FINANCIAL POSITION OR SOLVENCY:The term solvency refers to the ability of a concern to meet its long term oblig

ation. The long term indebtedness of a firm include debentures holders, financial institution providing medium and long term loans and other creditors selling goods on installment basis. Long term solvency ratios indicate a firm ability tomeet the fixed the interest and costs and repayments schedule associated with its long term borrowings.

(1). DEBT EQUITY RATIO:Debt Equity Ratio = Outside Funds/Shareholders Fund Outsiders Funds = 482.03Cr.Shareholders Funds = 4927.73 Cr.. Therefore Debt Equity RATIO = 0.10:1

INTERPRETATION OF DEBT EQUITY RATIO:This ratio calculated to measure the extend to which debt financial has been use

d in business. Being a manufacturing concern there is more investment in the capital goods. Lower of ratio gives the higher margin of safety. There is no standard norm or rule of thumb regarding the ratio. It depends upon the policy of thecompany. There no much more risk in the companies operation. Therefore they relyon the shareholders funds.

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(2). TOTAL DEBT TO CAPITAL EMPLOYED RATIO:TOTAL DEBT TO CAPITAL EMPLOYED RATIO= TOTAL DEBT / TOTAL CAPITALISATION X 100 =817.82/4927.73 X 100 = 16.5%

INTERPRETATION OF CAPITALISATION RATIO:

FUNDED

DEBT

TO

TOTAL

Though there is no rule of thumb but still lesser the reliance on outsiders thebetter it will be ACC Ltd. can raise funds from the outside sources as there isenough scope.

(3).PROPREITORY OR EQUITY RATIO:

PROPREITORY OR EQUITY RATIO=SHAREHOLDERS FUNDS/ TOTAL ASSETS X 100 SHAREHOLDER FUNDS = 4927.73 Cr.. TOTAL ASSETS = 5,745.55 Cr. PROPREITORY OR EQUITY RATIO=85.7%

INTERPRETATION OF PROPREITORY OR EQUITY RATIO:As equity ratio represents the relationship of owners fund to total assets. In ACC Ltd. there is high ratio it indicates better is long term solvency of the company.

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EARNING PER SHARE:Earnings per Share - [EPS] 2008 (I) Net Profit as per Profit and Loss Account ........................Rs.1,212.79 Cr. Adjustment for the purpose of Diluted EPS Inon Foreign Currency Convertible Bonds .. Less: Tax on above . Profit.....................................Rs. 1,212.79Cr. (II) Weighted average number of equity shares for Earnings per Share computation Shares for Basic Earningsper Share .............................Rs.18,76,45,744Cr. Add: Potential equity

shares on exercise of option of ESOS. Rs.2,83,742Cr. Number of Shares for DilutedEarnings per Share .......... Rs.18,79,29,486Cr. (III) Earnings per Share (Weighted Average) Basic .................................................................... Rs.64.63 Diluted ..................................................................Rs.64.53

INTERPRETATION OF EARNING PER SHARE:One of the main party interested in the ratio analysis is the shareholders are the real owners of the company. Earning per share is more important for shareholders because they were the risk taker. In the ACC Ltd. face value of share is Rs.10 and earning per share is Rs.64.63 this shows their good and sound financial position.

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FINANCIAL POSITION OF THE COMPANY:SHORT TERM FINANCIAL POSITION:The short term financial position of the company is good enough. Current Assetsof the company in the year 2008 is Rs.2735.20Cr.where as the Current Liabilitiesis Rs.2741.29Cr. Current Ratio is 1:1. Company needs bit improvement in it so that to make it 2:1. Short term liquidity position is also good as the acid testratio is 0.50:1. Company needs bit improvement to make it 1:1. Turnover Ratio of

the company reflects their good and sound position. Stock turnover over ratio is 9.6 times. It is good that they clear their stock more than 5 times in the year. Debtors and creditors turnover ratio also show positive results in their efficiency.

LONG TERM FINANCIAL POSTION:Long term financial policy is not as better as it should be. No doubt company adopted very nice policy of financing fixed assets from the long term fixed assetsand the long term liabilities. Rest payment is made in cash, thereby leading toreduction of the amount of cash. Debt equity ratio also gives the same picture.It should be near to one as possible. But it is not than one in every year. Notonly but also showing the increasing trends. This is not a good sign. Proprieta

ry ratio is 85.7%, it is good, and it is 50% or more than it. Earning per shareis the one of most important factor. Shareholders are the main stakeholders of the company they judge the companies performance on the basis of earning per share & dividend declared by the company. In the accounting year 2007 companies earning per share is Rs.76.75. Dividend paid for the current year is Rs.20 per share.

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LIMITATIONS OF THE STUDYExcept the supreme power, the Almighty, no one is impeccable and prowess enoughto accomplish anything without any faults and limitations. A research is no exception. No study is devoid of certain shortcomings. Some problems encountered inthis study are under mentioned: y Some officers were too busy to give a sincereresponse to investigators & hence their response may not relate to real picture.y Manager some time denied disclosing some important financial matters, which c

an be helpful in this study. y The time period given to me for the completion ofthe project was short in such a short span of time it is difficult to completeany project in detail. y Some information related to the study, which had been collected from the company was rounded off because of some influence.

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FINDINGSSHORT TERM FINANCIAL POSITION: The short term financial position of the companyis not good enough. Current Assets of the company in the year 2008 is Rs.2735.20Cr where as the Current Liabilities is Rs.2741.29Cr. Current Ratio is 1:1. Company needs bit improvement in it so that to make it 2:1. Short term liquidity position is also good as the acid test ratio is 0.50:1. Company needs bit improvement to make it 1:1. Turnover Ratio of the company reflects their good and sound

position. Stock turnover over ratio is 9.6 times. It is good that they clear their stock more than 5 times in the year. Debtors and creditors turnover ratio also show positive results in their efficiency. LONG TERM FINANCIAL POSTION Longterm financial policy is not as good as it should be. No doubt company adopted very nice policy of financing fixed assets from the long term fixed assets and the long term liabilities. Rest payment is made in cash, thereby leading to reduction of the amount of cash. Debt equity ratio also gives the same picture. It should be near to one as possible. But it is not than one in every year. Not onlybut also showing the increasing trends. This is not a good sign. Proprietary ratio is 85.7%, it is good, and it is 50% or more than it. Earning per share is the one of most important factor. Shareholders are the main stakeholders of thecompany they judge the companies performance on the basis of earning per share &

dividend declared. In the accounting year 2007 companies earning per share isRs.76.75. Dividend paid for the current year is Rs.20 per share.

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39992717 financial statements and financial analysis of acc cemet (1)

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