(credit assessment)
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A
Summer Internship Project ReportOn
Credit Assessment
(ACC Concrete)
In the partial fulfilment of the Degree of
Master of Management Studies (Finance)
Under The University of Mumbai
By
Mr. Sarankulu Naresh Eranna
MMS A, Roll No: 54
Specialization: Finance
Batch: 2013 -15
Under the Guidance of
Mr. Pernundu Dey
(Area finance head)
Mr. Balvinder Singh Reel
(Associate Professor)
Guru Nanak Institute of Management Studies and Research
Matunga, Mumbai-400019
2013 - 2015
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Faculty (Mentor / Guide Student
Summer Internship Progress Report
Name of the Student Sarankulu Naresh Eranna
Class & Roll No MMS-A54 Academic Year 2013-15
Title of the Project Credit Assessment and Evaluation and reducing DSO
Company ACC Concrete
Start
Date 2
nd
may 2014
Name of Company Guide & Designation Pernundu Dey (Area finance head)
Week Activities LearningsPlan for Next
Week
Mentors
Comment
1
(As on 09-May-
2014)
Knowing the
company and its
business
Basics of
the
company
Knowing about
the companies
clients
2
(As on 16-May-
2014)
Knowing the
company and its
business
Basics of
the
company
About the credit
Assessment
3(As on 23-May-2014)
About the creditAssessment
Knowingaboutclients
profile
Properdocumentationand filing of
clients profile
4
(As on 30-May-
2014)
Proper
documentation
and filing ofclients profile.
properly
filing of
clientsdocuments
Billing procedure
5
(As on 06-June-
2014)
Billing procedureHow to
make bills.
Inspection about
the bills in plant
6(As on 13-June-
2014)
Inspection about
the bills in plant
To knowabout the
delays ofthe billing
Evaluation of
module.
7
(As on 20-June-2014)
Evaluation of
module
To know
about the
clients
worthiness
Recommendation
8(As on 30-June-
2014)
RecommendationPresentationon the
topics
End of the
training
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DECLARATION BY THE STUDENT
I Naresh Eranna Sarankulu, hereby declare that the project work entitled Credit
Assessment and credit control and reducing collection period has been submitted during
the academic year 2013 2015 under the creative guidance and supervision of Prof.
Balvinder Singh Reel.
Further I extend my declaration that this report is result of my original work and data
acquired.
Thanking you,
Sarankulu Naresh Eranna Mentors
SignatureMMS- A; A54 Prof. Balvinder Singh Reel
\
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ACKNOWLEDGEMENT
I take this opportunity to extend my sincere thanks to GNIMS, Mumbai and ACC Concrete Ltd.
for offering a unique platform to earn exposure and garner knowledge in cement industry.
During the span of the project period, it was my great fortune to get inducted into Credit Control
department, ACC Concrete Ltd. I am especially thankful to my guide Mr. Purnendu Dey,
Regional Credit Controller, Mumbai Area Office, ACC Concrete Ltd. for his kind support
and guidance; he has been extending me throughout the project. I also express my sincere thanks
to Mr. Anurag Yadav, Area Marketing Head for constant encouragement and support at each
stage of project. I was fortunate to get Mr. Sameer Raul for helping me with all the informationand data required for successful completion of project.
I want to convey my sincere thanks to my college guide Mr., Balvinder Singh ReelProfessor, GNIMS, who has been guiding me throughout my project. He was there to help me
out whenever and wherever I needed.
Last but not the least I would like to express my profound gratitude to each and every employee
of the organization who contributed in their own ways in successful completion of this project.
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Sr. No.Chapters
Page No
1 EXECUTIVE SUMMARY 1-2
2 INTRODUCTION
2.1 Credit assessment 3
2.2 DSO Calculation 4-63 SECTOR INFORMATION
3.1 About Cement Industry before and after 18 century 7-12
4 COMPANY INFORMATION
4.1 Company Profile 13-14
4.2 Major Milestones: 15-16
4.3 About Accs RMC Business 17-18
4.4 ACC ConcreteA Wide Range 19
4.5 ACC Concrete Vision And Mission 20
5 METHODOLOGY
5.1 Introduction of the study 21
5.2 Literature Review 22
5.3 Background of the study 23
5.4 problem statement 23-24
5.5 Objective of the study 25
5.6 Hypothesis 25
6 RESEARCH METHODOLOGY
6.1 Sources of data 26
6.2 Data collection instrument 26
7 DATA ANALYSIS AND INTERPRETATION 27-29
8 RESULT AND FINDINGS 30-349 CONCLUSION 35-36
10 BIBLOGRAPHY 37
11 ANNEXURE 38-39
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Chapter 1EXECUTIVE SUMMARY
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This project is an in depth research about receivables management, average collection
period, credit assessment and credit evaluation of ACC Concrete Ltd. The prime
objective of the report is to develop a model to evaluate the clients of the company
and ascertain a credit limit. The project is included as part of MBA Program and the
project is done from 5th May to 30th June.
The study draws attention to the fact that the current average collection period for
ACC is increasing over the period of 6 to 7 months, which according to the industry
average is very high. This directly and indirectly reflects on the company as well as
the creditors of the company by increasing the average payment period to operate at a
low working capital.
After data collection regarding client transaction, invoice tracker, etc. it was analyzed
with different charts and graph, which is very important to find observation and
findings. On the basis of this work, suggestions were made which were very helpfulfor analyzing project report and apparently a model was developed.
It was observed that the delay in receivables was mainly because of the market
scenario of the real estate industry which is more or less stagnant from past couple of
years which has reduced either the sales of the real estate developers or has increased
their receivables.
To regulate the average collection period and delays regarding the credit period
certain internal and external factors were considered and accordingly the scope of
improvement was suggested for ACC.
Here are some actions that were suggested for improvement:
Focus on top 30 clients who account for 87% of the revenue. Convert complete billing process to work electronically. Form a follow up team in synchronization with the marketing team and credit
control team.
Offer discounts for early payments on outstanding invoices.
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Chapter2
Introduction to the Credit Assessment
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Credit analysis is the method by which one calculates the creditworthiness of a businessor organization. In other words, it is the evaluation of the ability of a company to honor
its financial obligations. The audited financial statements of a large company might be
analyzed when it issues or has issued bonds. Or, a bank may analyze the financialstatements of a small business before making or renewing a commercial loan. The term
refers to either case, whether the business is large or small.
The objective of credit analysis is to look at both the borrower and the lending facility
being proposed and to assign a risk rating. The risk rating is derived by estimating the
probability of default by the borrower at a given confidence level over the life of thefacility, and by estimating the amount of loss that the lender would suffer in the event of
default
Credit analysis involves a wide variety of financial analysis techniques, including ratio
and trend analysis as well as the creation of projections and a detailed analysis of cashflows. Credit analysis also includes an examination of collateral and other sources of
repayment as well as credit history and management ability. Analysts attempt to predictthe probability that a borrower will default on its debts, and also the severity of losses in
the event of default. Credit spreadsthe difference in interest rates between theoretically
"risk-free" investments such as U.S. treasuries or LIBOR and investments that carry somerisk of defaultreflect credit analysis by financial market participants.
O Credit analysis is a systematic and continuous procedure, which is carried out inorder to evaluate the credit worthiness of debtor.
O Here the words systematic and continuous are important, hence highlighted.O
If the process is not conducted or followed in a systematic manner it can createerrors.O Credit analysis procedure should be continuous in nature. Credit rating of client
can change over a period of time.
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DSO calculation
In accountancy, days sales outstanding (also called DSO and days receivables) is a
calculation used by a company to estimate their average collection period. It is a financial
ratio that illustrates how well a company's account receivables are being managed. The
days sales outstanding figure is an index of the relationship between outstandingreceivables and credit account sales achieved over a given period.
Typically, days sale outstanding is calculated monthly. The days sales outstanding
analysis provides general information about the number of days on average that
customers take to pay invoices. Generally speaking, though, higher DSO ratio canindicate a customer base with credit problems and/or a company that is deficient in its
collections activity.A low ratio may indicate the firm's credit policy is too rigorous,
which may be hampering sales.
Days sales outstanding are considered an important tool in measuring liquidity. Days
sales outstanding tend to increase as a company becomes less risk averse. Higher dayssales outstanding can also be an indication of inadequate analysis of applicants for openaccount credit terms. An increase in DSO can result in cash flow problems, and may
result in a decision to increase the creditor company's bad debt reserve.
A DSO ratio can be expressed as:
DSO ratio = accounts receivable / average sales per day, or
DSO ratio = accounts receivable / (annual sales / 365 days)
For purposes of this ratio, a year is considered to have 365 days.
Days sales outstanding can vary from month to month, and over the course of a year witha company's seasonal business cycle. Of interest when analyzing the performance of a
company is the trend in DSO. If DSO is getting longer, customers are taking longer to
pay their bills, which may be a warning that customers are dissatisfied with thecompany's product or service, or that sales are being made to customers that are less
credit-worthy, or that salespeople have to offer longer payment terms in order to generate
sales. Many financial reports will state Receivable turnover defined as Net Credit
Account Sales / Trade Receivables; divide this value into the time period in days to getDSO.
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However, dayssales outstanding are not the most accurate indication of the efficiency of
accounts receivable department. Changes in sales volume influence the outcome of the
days sales outstanding calculation. For example, even if the overdue balance stays thesame, an increase of sales can result in a lower DSO. A better way to measure the
performance of credit and collection function is by looking at the total overdue balance in
proportion of the total accounts receivable balance (total AR = Current + Overdue),which is sometimes calculated using the days delinquent sales outstanding (DDSO)formula.
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Chapter 3Sector Information
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Cement is a binder, a substance that sets and hardens as the cement dries and also reacts
with carbon dioxide in the air dependently, and can bind other materials together. The
word "cement" traces to the Romans, who used the term opus caementiciumto describemasonry resembling modern concrete that was made from crushed rock with
burnt lime as binder. The volcanic ash and pulverized brick additives that were added tothe burnt lime to obtain a hydraulic binder were later referred to ascement.
Cements used in construction can be characterized as being either hydraulic or non-hydraulic, depending upon the ability of the cement to be used in the presence of water
(see hydraulic and non-hydraulic lime plaster).
Non-hydraulic cement will not set in wet conditions or underwater, and is attacked by
some aggressive chemicals after setting.
Hydraulic cement is made by replacing some of the cement in a concrete mix with
activated aluminum silicates, pozzolanas, such as fly ash, to activate cement setting inwet condition or underwater and further protects hardened concrete from chemical attack
(e.g.,Portland cement).
The chemical process for hydraulic cement found by ancient Romans used volcanic ash
(activated aluminum silicates), to activate cement hardening betweenthe anhydrous cement powder and water or plaster and water instead of relying on water
drying out and simultaneously reacting with airborne carbon dioxide.
Presently cheaper, pollution free fly ash from power stations or other waste or by
products is used as pozzolanas with plain cement to produce hydraulic cement.Pozzolanas can replace up to 40% of Portland cement.
Thus, cement can harden underwater or when constantly exposed to wet weather. The
chemical reaction results in hydrates that are not very water-soluble and so are quitedurable in water and from chemical attack. Non-hydraulic cements and plasters do notharden in wet conditions.
The most important uses of cement are as an ingredient in the production of mortar in
masonry, and of concrete, a combination of cement and an aggregate to form a strong
building material.
Cements before the 18th century
An early version of cement made with lime, sand, and gravel was used in Mesopotamia
in the third millennium B.C. and later in Egypt. It is uncertain where it was firstdiscovered that a combination of hydrated non-hydraulic lime and a pozzolan produces a
hydraulic mixture (see also: Pozzolanic reaction), but concrete made from such mixtures
was first used by the Ancient Macedonians and three centuries later on a large scale
by Roman engineers.
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They used both natural pozzolans (trass or pumice) and artificial pozzolans (ground brickor pottery) in these concretes. Many excellent examples of structures made from these
concretes are still standing, notably the huge dome of the Pantheon in Rome and the
massive Baths of Caracalla.
[7]
The vast system of Roman aqueducts also made extensiveuse of hydraulic cement. Although any preservation of this knowledge in literary sources
from the middle Ages is unknown, medieval masons and some military engineers
maintained an active tradition of using hydraulic cement in structures such
as canals, fortresses, harbors, and shipbuilding facilities. This technical knowledge ofmaking hydraulic cement was later formalized by French and British engineers in the
18th century.
Cements in the 18th, 19th, and 20th centuries
John Smeaton made an important contribution to the development of cements when he
was planning the construction of the third Eddy stone Lighthouse (17559) in the EnglishChannel now known as Smeaton's Tower. He needed a hydraulic mortar that would set
and develop some strength in the twelve hour period between successive high tides. He
performed experiments with combinations of different limestones and additivesincluding trass and pozzolanas and did exhaustive market research on the available
hydraulic limes, visiting their production sites, and noted that the "hydraulicity" of the
lime was directly related to the clay content of the limestone from which it was made
Smeaton was a civil by profession, and took the idea no further.
http://en.wikipedia.org/wiki/Cement#cite_note-7http://en.wikipedia.org/wiki/Cement#cite_note-7http://en.wikipedia.org/wiki/Cement#cite_note-7http://en.wikipedia.org/wiki/Cement#cite_note-7 -
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In Britain particularly, good quality building stone became ever more expensive during a
period of rapid growth, and it became a common practice to construct prestige buildings
from the new industrial bricks, and to finish them with a stucco to imitate stone.Hydraulic limes were favored for this, but the need for a fast set time encouraged the
development of new cements. Most famous was Parker's "Roman cement. This was
developed by James Parker in the 1780s, and finally patented in 1796. It was, in fact,nothing like material used by the Romans, but was natural cement" made byburning septaria nodules that are found in certain clay deposits, and that contain
both clay minerals and calcium carbonate. The burnt nodules were ground to a fine
powder. This product, made into a mortar with sand, set in 515 minutes. The success of"Roman cement" led other manufacturers to develop rival products by burning
artificial hydraulic lime cements of clay and chalk. Roman cement quickly became
popular but was largely replaced by Portland cement in the 1850s.
In Russia, Egor Cheliev created a new binder by mixing lime and clay. His results were
published in 1822 in his bookA Treatise on the Art to Prepare a Good Mortarpublishedin St. Petersburg. A few years later in 1825, he published another book, which described
the various methods of making cement and concrete, as well as the benefits of cement inthe construction of buildings and embankments.
Apparently unaware of Smeaton's work, the same principle was identified byFrenchman Louis Vicar in the first decade of the nineteenth century. Vicar went on to
devise a method of combining chalk and clay into an intimate mixture, and, burning this,
produced an "artificial cement" in 1817 considered the "principle forerunner of Portlandcement and "...Edgar Dobbs of Southward patented a cement of this kind in 1811
James Frost,[working in Britain, produced what he called "British cement" in a similar
manner around the same time, but did not obtain a patent until 1822. In 1824, Joseph
Aspdin patented a similar material, which he calledPortland cement, because the render
made from it was in color similar to the prestigious Portland stone. However, Aspdins'cement was nothing like modern Portland cement but was a first step in its development,
called proto-Portland cement. Joseph Aspdins' son William Aspdin had left his fathers
company and in his cement manufacturing apparently accidentally produced calciumsilicates in the 1840s, a middle step in the development of Portland cement. William
Aspdin's innovation was counterintuitive for manufacturers of "artificial cements",
because they required more lime in the mix (a problem for his father), a much higher kilntemperature (and therefore more fuel), and the resulting clinker was very hard and rapidly
wore down the millstones, which were the only available grinding technology of the time.
Manufacturing costs were therefore considerably higher, but the product set reasonably
slowly and developed strength quickly, thus opening up a market for use in concrete. The
use of concrete in construction grew rapidly from 1850 onward, and was soon thedominant use for cements. Thus Portland cement began its predominant role.
Isaac Charles Johnson further refined the production of meso-Portland cement(middle
stage of development) and claimed to be the real father of Portland cement.
Setting time and "early strength" are important characteristics of cements. Hydrauliclimes, "natural" cements, and "artificial" cements all rely upon their belite content
for strength development. Belite develops strength slowly. Because they were burned at
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Chapter 4
Company Profile
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Year of establishment: 1936
Shareholder pattern:
Figure1 Shareholder pattern
Holder's Name No of Shares % Share Holding
Promoters 93888120 50.01%
Foreign Institutions 37035581 19.73%
General Public 23834380 12.70%
Financial Institutions 17818906 9.49%
Other Companies 6851404 3.65%
Banks Mutual Funds 5947011 3.17%
Foreign NRI 772515 0.41%
Others 767724 0.41%
Foreign Promoter 541000 0.29%
Central Govt 287815 0.15%
Foreign Industries 900 0%
ACC (ACC Limited) is India's foremost manufacturer of cement and concrete. ACC's operations
are spread throughout the country with 17 modern cement factories, more than 40 Ready mix
concrete plants, 21 sales offices, and several zonal offices. It has a workforce of about 9,000
persons and a countrywide distribution network of over 9,000 dealers.
Since inception in 1936, the company has been a trendsetter and important benchmark for the
cement industry in many areas of cement and concrete technology. ACC has a unique track
record of innovative research, product development and specialized consultancy services. The
company's various manufacturing units are backed by a central technology support services
centre - the only one of its kind in the Indian cement industry.
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ACC has rich experience in mining, being the largest user of limestone. As the largest cement
producer in India, it is one of the biggest customers of the domestic coal industry, of Indian
Railways, and a considerable user of the countrys road transport network services for inward and
outward movement of materials and products.
Among the first companies in India to include commitment to environmental protection as one of
its corporate objectives, the company installed sophisticated pollution control equipment as far
back as 1966, long before pollution control laws came into existence. Today each of its cement
plants has state-of-the art pollution control equipment and devices.
ACC plants, mines and townships visibly demonstrate successful Endeavours in quarry
rehabilitation, water management techniques and greening activities. The company actively
promotes the use of alternative fuels and raw materials and offers total solutions for waste
management including testing, suggestions for reuse, recycling and co-processing.
ACC has taken purposeful steps in knowledge building. We run two institutes that offer
professional technical courses for engineering graduates and diploma holders which are relevant
to manufacturing sectors such as cement. The main beneficiaries are youth from remote and
backward areas of the country.
ACC has made significant contributions to the nation building process by way of quality
products, services and sharing expertise. Its commitment to sustainable development, its high
ethical standards in business dealings and its on-going efforts in community welfare programmes
have won it acclaim as a responsible corporate citizen. ACCs brand name is synonymous with
cement and enjoys a high level of equity in the Indian market. It is the only cement company that
figures in the list of Consumer Super Brands of India.
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Major Milestones:
1936 Incorporation of The Associated Cement Companies Limited on August 1,1936.
1937 With the transfer of the 10th company to ACC, viz. Dewarkhand Cement
Company, the formation of ACC is complete on October 23, 1937.
1947 Indias first entirely indigenous cement plant established at Chaibasa in Bihar
1956 Bulk Cement Depot established at Okhla, Delhi
1961 Blast furnace slag from TISCO used at the Chaibasa Unit to manufacture
Portland Slag Cement for the first time in India.
1961 Manufacture of Accocid Cement, which resists the corrosive action of acids andchemicals.
1961 Manufacture of Hydrophobic (waterproof) cement at ACC Khalari Cement
Works in Bihar.
1962 Manufacture of Accoproof, a waterproofing additive.
1965 ACCs Central Research Station (CRS) established at Thane
1965 Manufacture of Portland Pozzolana Cement.
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1968 ACC supplied and commissioned one-million-tone iron ore pelletizing plant
ordered by TISCO
1973 Take-over of The Cement Marketing Company of India (CMI)
1979 ACC wins international contract for operation and management of a new one
million tone cement plant at Yanbu-Ras Biridi in Saudi Arabia.
1982 Commissioning of the first 1 MTPA plant in the country at Wadi, Karnataka.
1992 Incorporation 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.
1999 Tata group sells 7.2% of its stake in ACC to Ambuja Cement Holdings Ltd, a
subsidiary of Gujarat Ambuja Cements Ltd. (GACL)
2000 Tata Group sells their remaining stake in ACC to the GACL group, who with
14.45% now emerge as the single largest shareholder of ACC.
2002 ACC wins PHDCCI Good Corporate Citizen Award
2004 ACC named as a Consumer Super brand by the Super brands Council of India,
becoming the only cement company to get this status.
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2004 Green tech Safety Gold and Silver Awards awarded to Madukkarai Cement
Works and Katni Refractory Works by Green tech Foundation for outstanding
performance in Safety Management System.
2005 Holcim group of Switzerland enters strategic alliance with Ambuja Group by
acquiring a majority stake in Ambuja Cements India Ltd. (ACIL) which at the
time held 13.8 % of the total equity shares in ACC. Holcim simultaneously
makes an open offer to ACC shareholders, through Holcim Cement Pvt.
Limited and ACIL, to acquire a majority shareholding in ACC. Pursuant to the
open offer, ACILs shareholding in ACC increases to 34.69 % of the Equity
share capital of ACC.
2006 Change of name to ACC Limited with effect from September 1, 2006 from The
Associated Cement Companies Limited.
2006 ACC receives Good Corporate Citizen Award 2005-06 from Bombay Chamber
of Commerce and Industry
2006 New corporate brand identity and logo adopted from October 15, 2006
2008 Ready mixed concrete business hived off to a new subsidiary called ACC
Concrete Limited.
2008 ACC wins CNBC-TV18 India Business Leader Award in the category India
Corporate Citizen of the year 2008
2009 ACC received the Jamanalal Bajaj "Uchit Vyavahar Puraskar" of Council for
Fair Business Practices
2010 ACC acquires 100 percent of the financial equity of Encore Cements &
Additives Private Limited which is a slag grinding plant in Vishakhapatnam in
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coastal Andhra Pradesh. This company became a wholly-owned subsidiary of
About Accs RMC Business
ACC set up India's first commercial Ready Mix Concrete
(RMC or RMX) plant in Mumbai in 1994. ACC Concrete
is one of the largest manufacturers of RMX in India with
over 50 modern plants in major cities such as Mumbai,
Bangalore, Kolkata, Chennai, Delhi. Hyderabad, Goa,
Pune and Ahmadabad.
ACC's pioneering efforts in introducing RMX coupled with the promotion of bulk cement
handling facilities have been responsible for redefining the pace and quality of construction
activity in metropolitan cities and in mega infrastructure projects.
Numerous landmark structures in India's metro cities have been built using ACC Concrete - mega
housing projects, townships, commercial complexes, factories, bridges, flyovers, roads and
railways. Prestige projects such as the Mumbai-Pune Expressway, the Indore-Dewas bypass,
Kolkata and Delhi Metro Rail projects. Most of the new bridge and fly-overs in Mumbai used
ACC Concrete and could perhaps not have been completed on schedule without it.
Concrete is basically a mixture of Portland cement, water and aggregates comprising sand andgravel or crushed stone. In traditional construction sites, each of these materials is procured
separately and mixed in specified proportions at site to make concrete. Ready Mix Concrete, or
RMX as it is popularly called, refers to concrete that is specifically manufactured elsewhere and
transported in a Transit Mixer for delivery to the customer's construction site in a ready-to-use
freshly mixed state. RMX can be custom-made to suit different applications. Ready Mix Concrete
is bought and sold by volume - usually expressed in cubic meters.
Ready Mix Concrete is manufactured under computer-controlled operations and transported and
placed at site using sophisticated equipment and methods. RMX assures its customers numerous
benefits:
Uniform, consistent and assured quality of concrete Flexibility in concrete design mixes Easier addition of admixtures
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Faster and speedier construction Reduced inventories, material handling and storage of raw materials at sites Savings in labour requirements, labour costs and supervision of labour Reduced wastage of materials
The use of RMX is an environmental friendly practice that ensures a cleaner work place and
causes minimal disturbance to its surroundings. This makes its utility more significant in crowded
cities and sensitive localities.
In contrast to this, conventional methods of making, transporting and placing concrete at most
construction sites are somewhat labor-intensive and suffer from practices which may be erratic
and not very systematic.
Therefore the use of Ready Mix Concrete can prove to more cost effective in the longer term
while ensuring that structures are built faster and using concrete that comes with higher levels of
quality assurance.
ACC Concrete is manufactured at modern fully computerized plants which have state-of-the-art
machinery and equipment by machinery suppliers of global repute - fully automated Batching
Plants, well-equipped laboratories for testing raw materials and fresh concrete, Transit mixers,
Mobile and stationary pumps capable of discharging concrete at high elevations and over long
distances.
A large fleet of the latest models of Transit Mixers and Concrete Pumps to suit different terrains
and work sites ensures that our customers get timely and uninterrupted supply of premium quality
concrete as per their requirement as well as its efficient and timely placement at the work site.
ACC Concrete is supplied in a variety of grades and compositions to meet specific demands of
customized applications - from simple requirements for small homes to High Performance
Concrete to meet the complex needs of mega projects.
Each of our plants has a fully equipped laboratory with the latest in testing machines to carry out
routine and detailed tests of raw materials as well as fresh finished concrete. These in-plant
laboratories are backed by the facilities of ACC's reputed Research centre at Thane which serves
as a focal research and testing laboratory centre for cement and concrete.
ACC Concrete customers can avail of a range of options in our testing and quality control
services - from simple tests and analyses of raw materials and concrete to non-destructive testing
of hardened concrete
ACC ConcreteA Wide Range
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High Strength Concrete High Performance Concrete Self-levelling Concrete Self-compacting Concrete Coloured Concrete Concrete made with binary and ternary blends of cements Early strength Concrete Fibre reinforced Concrete
ACC's fleet of Transit Mixers and Concrete Pumps helps ensure that our customers in cities like
Mumbai, Bangalore, Kolkata, Delhi, Chennai, Hyderabad, Goa and Pune now just a phone call
away from ACC Concrete - freshly blended premium quality concrete that is door delivered and
efficiently placed at site on the day of concreting.
For very large constructions or infrastructure works, we can consider dedicating an entire RMX
plant catering exclusively to the project sites.
In addition, our marketing team, which includes qualified and experienced engineers and concrete
technologists, can assist customers in defining and specifying quality standards, designing
specific concrete mixes to meet the most challenging of requirements as well as sourcing reliable
supplies of good quality raw materials.
If you wish to know more about ACC Ready Mix Concrete or have a specific requirement, please
send a mail to any of the following options which is nearest to you.
Main officeIs in Thane (W) with total employee strength of 11500.
ACC Concrete Vision and Mission:
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Chapter 5
METHODOLOGY
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Introduction to the study
Every Industry wants to provide complete satisfaction by providing goods and services to
its clients. The firm required a big shots of player so that the industry could be perform
smoothly and continuously. The concrete is a very critical and short span of product,
which gets rejected from the client site easily.
The main players in the real estate industry in Mumbai are
Runwal Homes Pvt. Ltd Indiabulls construction limited Shayona corporation JMC projects Shapoorji Palonji & Co Larsen & Toubro Ltd Constrution Kalpataru Ltd Pratibha Industry Ltd B. E. Billimoria & Co. Limited Raheja Universal (Pvt) Limited Capacit'e Infraprojects Pvt Ltd
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LITERATURE REVIEW:
Rmc Industry
The Ready Mix Concrete (RMC) industry is growing due to the superior technical properties over
normal concrete, but the potential is still huge
The Ready Mix Concrete (RMC) industry in India is in its early stages with cement consumption
of just 2-3 per cent of total production. This is evident from the fact that in the West, the RMC
consumes 60 per cent of total cement production. However, since the demand for RMC is
expected to grow exponentially, cement manufacturers in India such as Ultratech, ACC, Madras
Cements, India Cements, Ambuja Cements, among others, have forayed into the business. As the
industry grows, it will make aggregate distribution and production more organized as large
players are likely to venture into the aggregates business themselves or have a long-term
relationship with commercial aggregate companies.
The cement companies are able to leverage the RMC market in a better way since cement is one
of the essential ingredients in the manufacture of RMC. Of course, acquiring and operating
suitable aggregate quarries in India is a difficult task, but since cement companies possess
sufficient experience in limestone quarrying will have technical competency of running such
captive operations too.
The use of RMC is growing due to its superior technical properties than normal concrete. The
difference between normal concrete and RMC lies in the technology used for production,
transportation and placement. In the case of RMC, all the ingredients are proportioned in
accordance with the standard codes of practice to get the targeted strength and durability. The
quality of concrete depends on the way it is mixed, placed, compacted, finished, cured and
protected. RMC used in construction makes it possible to achieve speed with quality
the acceptability of RMC is certainly high in large cities and metros and as many as around 40
cities are currently using RMC for several infrastructure projects. Specifications in tenders by
municipal corporations, public works and other government bodies will play a big role in growth
of rmc
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BACKGROUND OF THE STUDY
Most firms have to provide their customers with trade credit. The aim of the internship was to
ensure that customers do not take advantage of willingness to provide this credit.
We will look at:
the problems caused by providing credit, including the consequences of badDebt and late payments
how to assess whether your customers are credit worthy how good credit control routines prevent customers from keeping your money
Longer than necessary
where debt collection fails, we will see how to claim income tax and VAT reliefOn the bad debt.
This unit wont make you an instant expert at credit control and debt recovery. However, it will
give you some useful guidelines to collecting debt efficiently. Good cash flow is essential for
business success. We hope that this unit will make the cash flow for you.
In later units of the course we will look at how you can supplement your experience and
knowledge by using specialist agencies and bodies to enable you to ensure payment from your
debtors.
Statement of Problem:
To understand the payment behavior of ACCs clients and exploring the possible verticals for
improvement in reducing average collection period.
Need of Study:
Staff involved in credit control and credit management at all levels who need to gaina broad overview and understanding.
Staff about to take on more responsibility for credit management. Staff newly appointed to these areas. Anyone in business wanting to improve their cash flow and reduce bad debts Affirmation of good credit control practices, including telephone collection
techniques.
Appreciation of skills required to work closely with the sales department.
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Understanding of the different customer trading types and the laws relating to them. Ability to select credit reference agencies and interpret the information they supply. Knowledge of how to effectively target and motivate a team to reduce your company
D S O.
Knowledge of the laws governing litigation on unpaid debt. Update on legislation in relation to best practice compliance and the Financial
Conduct Authority.
Scope of Study:
The study was restricted to the Mumbai area operations of ACC.
The study was carried on all the plants of ACC concrete Ltd. in and around Mumbai. Study includes the tracker sheets of clients of ACC in Mumbai. Complete analysis of fundamental and sentimental aspects of ACCs clients by using
their balance sheets and related news.
An additional of cost structure and contribution margin was carried out of personalinterest in the field of cost management.
Objectives of Study:
To find the clients who are exceeding the credit period for payment To develop attractive policies for the clients to tempt them to pay early To convert the billing process to electronic means on pilot basis for top 5 customers. To understand the degree of current credit analysis of ACC.
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Hypothesis
Due to highest rank in the client report, it shows that the clients in a better position to pay
the outstanding and current dues.
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Chapter 6
Research Methodology
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Source of Data
Secondary data may be available which is entirely appropriate and wholly adequate to
draw conclusions and answer the question or solve the problem. Sometimes primary data
collection simply is not necessary. It is a secondary data which carries from the internal
employees and from 3rd
party (TCM)
Data collection instrument
Third party report (TMC) provides the detail information and accordingly provide their credit rate
(money and terms)
A
72
INR 513000000 / USD 9551000
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Chapter 7
Data Analysis and interpretation
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This is the balance sheet of Man Infrastructure
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Profit and loss A/C
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Interpretation
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Chapter 8
Results and findings
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This the Module which has several parameters to rank the top 30
customers in the business
Interface of the Model:
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ABC CO.
SOLVENCY
net worth more than 500cr 1
debt equity ratio less than 1 1.5
ICR greater than 20times 0.75
sector infrastructure 1
class promoter 0.75
ownership public ltd listed company 1
6
LIQUIDITY
current ratio greater than 2 2
ACP less than 45 Days 1
APP less than 45 Days 1
4
PROFITABILITY
Profit after tax greater than 200cr 1
profit margin greater than 15 1
profit growth rate greater than 30% 0.5
sales growth rate greater than 30% 0.5
sales turnover greater than 1000cr 0.5
3.5
CLIENT TRADE HISTORY
value of monthly business done 10lac to 50 lac 1
average DSO less than 45 days 3
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It is also recommended that the company start e-mailing the invoicesto at least 5 major clients on a pilot basis and then later on migrate
other customers onto the same system of invoice e-mailing in order to
cut down the DSO which is caused by the current internal time lag
between supply and bill delivery. (Current Average time lag betweensupply and bill delivery is 7 Days). Moreover there are other issues
with hardcopy of Invoice viz. Physical damage, loss, misplacement
etc. contributing to further delay.
The company currently uses total volume requirement of the client,number of projects in hand, overall reputation in the market and
other such non-quantitative and non-financial parameters to arrive at acertain specific credit limit for its clients. It is recommended that the
company use the model prepared during the course of the internship
named Client Report Card which assesses the clients on both its
financial and non-financial strength before fixing a certain credit limit.
Since the company deals with a lot of clients which are public listedcompanies it is also recommended that the company monitor thefinancial performance of these clients which also happen to be
contributing to major portion of the revenue and review their credit
limit from time to time based on the receivables collection experience
and financial position.
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Chapter 9
CONCLUSION
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We set out to solve the problem of rising DSO. However before solving that, it was
required that we understand the RMX business thoroughly. Also understanding the
company method of calculation of DSO, its way of accounting for provisions, procedures
and formalities involved for authorization of debit notes and credit notes, study of the
internal procedure that has to be gone through before invoice is created and delivered to
the customer, etc., was equally important.
What initially felt like a problem caused by a loose credit policy turned out to be a
compulsory and absolute essential marketing tool employed by all players in the RMX
industry to support their top line Using a loose credit policy as a marketing tool is
advantageous as long as it is supported by a sophisticated system of continuous
monitoring and rigorous collection efforts of the receivables. It was found that the
Company was indeed following a disciplined and well set out receivables collection and
monitoring mechanism; sending out regular reminders through e-mails, calls and visits toclient locations along with carrying out timely reconciliations with all its top clients for
the period ending two months before closing date.
An opportunity of reducing the DSO by improvising the current process being followed
internally before an invoice is being delivered to the client was being identified and the
suggestion of implementing the same is being incorporated in the recommendations sent
to the company.
Finally another very important factor impacting DSO i.e. acceptable credit standards for
clients and the procedure currently being followed for ascertaining client credit limits
presently being done using traditional non-quantitative tools was studied in great detail.
The potential risks arising out of ignoring the financial position of the clients while
arriving at the credit limits were communicated to the company. Thus, a model to assess
the financial position of the clients has been provided to the company in order to aid them
in making well informed decision on the credit limit.
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Chapter 10
REFERENCES AND BIBLIOGRAPHY
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www.veda.com.au www.investopedia.com/creditrating www.moodysanalytics.com www.ecccreditcontrol.com www.moodys.com www.standardandpoors.com www.crisil.com www.acclimited.com www.moneycontrol.com en.wikipedia.org www.accconcrete.com
http://www.veda.com.au/http://www.investopedia.com/creditratinghttp://www.moodysanalytics.com/http://www.ecccreditcontrol.com/http://www.moodys.com/http://www.standardandpoors.com/http://www.crisil.com/http://www.acclimited.com/http://www.moneycontrol.com/http://www.accconcrete.com/http://www.accconcrete.com/http://www.moneycontrol.com/http://www.acclimited.com/http://www.crisil.com/http://www.standardandpoors.com/http://www.moodys.com/http://www.ecccreditcontrol.com/http://www.moodysanalytics.com/http://www.investopedia.com/creditratinghttp://www.veda.com.au/ -
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Chapter 11
Annexure
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