Summer Training project Report

PROJECT REPORT FOR THE PARTIAL FULLFILLMENT OF THE REQUIREMENT FOR MASTER OF BUSINESS ADMINISTRATION ON Analysis of Indian cement Industry & Financial performance of ACC LTD IN ACC CEMENT LIMITEDSubmitted to: -

Submitted to :-

Submitted by:SHIVALI KAMAL Semester III IRBS/PGPM/SPR09/006 Course: MBA+PGPM Batch: SPR-09/11

PREFACE To start any business, First of all we need finance and the s u c c e s s o f t h a t business entirely depends on the proper management of day-today finance andthe management of this short-term capital or finance of the business is called Working capital Management. Working Capital is the money used to pay for theeveryday trading activities carried out by the business - stationery needs, staff salaries and wages, rent, energy bills, payments for supplies and so on.I have tried to put my best effort to complete this task on the basis of skill that Ihave achieved during the last one year study in the institute. I have tried to putm y m a x i m u m e f f o r t t o g e t t h e a c c u r a t e s t a t i s t i c a l d a t a . H o w e v e r I w o u l d appreciate if any mistakes are brought to me by the reader.

Acknowledgement It is difficult to acknowledge precious a debt as that of learning as it is theo n l y d e b t t h a t i s d i f f i c u l t t o r e p a y e x c e p t t h r o u g h g r a t i t u d e . It is my profound privilege to express my sincere thanks to Mr B D Daler,HeadHR of ACC Ltd, Wadi ,for giving me an opportunity to work on the project. whog a v e m e a n o p p o r t u n i t y t o c a r r y o u t t h i s p r o j e c t a n d h a d b e e n a c o n s t a n t inspiration. I would like to thank to Mr. Rajiv joshi, Manager HR for their constant support and guidance through out the tenure of this project withouttheir cooperation it would have been a difficult task to accomplish this project

I am also thankful to my faculty guide Mr.V.Ramana , RaiBusiness School, Hyderabad, who has provided their valuable time and effort for guiding me for the completion of this report. Shivali Kamal, Place :-Hyderabad Date

STUDENTS UNDERTAKING

I do hereby declare that this piece of project report entitled Analysis of Indiancement Industry & Financial performance of ACC LTD for partial fulfillment of therequirements for the award of the degree of MBA+PGPM is a record of originalwork done by me under the supervision and guidance of Mr. Rajiv Joshi, HR and Mr. B D Daler Head HR of ACC LTD,Wadi plant .This Project w o r k i s m y o w n and has neither been submitted nor published elsewhere.

Place: Hyderabad Date: Shivali Kamal

EXECUTIVE SUMMERY The major objective of the study is to understand the working capital of ACC & tosuggest measures to overcome the shortfalls if any .Funds needed for short term needs for the purpose like raw materials, paymentof wages and other day to day expenses are known as working capital. Decisionsr e l a t i n g t o w o r k i n g c a p i t a l ( C u r r e n t a s s e t s - C u r r e n t l i a b i l i t i e s ) a n d s h o r t t e r m financing are known as working capital management. It involves the relationshipbetween a firms short-term assets and its short term liabilities. By definition,working c apital management entails short-term definitions, generally relating tothe next one year period.

The goal of working capital management is to ensure that the f i r m i s a b l e t o continue its operation and that it has sufficient cash flow to satisfy both maturingshort term debt and upcoming operational expenses. Working capital is primarily concerned with inventories management, Receivablemanagement, cash management & Payable management. Inventories management at ACC: ACC is a large scale manufacturing company involved in production of Cement.Therefore, it has to maintain large quantity of inventories at production units for its smooth running and functioning. Cash management at ACC: ACC has been accumulating huge cash surpluses over last several years, whichenables the organization to maintain adequate cash reserves and to generaterequired amount of cash. Receivables management at ACC: ACC h a s s e t u p i t s m a r k e t i n g o f f i c e a t a l l m a j o r c i t i e s i n I n d i a i.e Bangaluru ,B h o p a l , C h a n d i g a r h , C o i m b a t o r e , K a n p u r , K o l k a t a , M u m b a i , P u n e , Secunderabad New Delhi & patnaThis marketing office obtains sales order from Cement users in India as well asglobally. The cement production and dispatch figures for the month of May 2010are 1.81 & 1.75 million tones respectively. The Sales recorded for the FY 2009was Rs. 83,861,000,000

INTRODUCTION Working Capital:The life blood of business, as is evident, signified funds required for day-to-dayo p e r a t i o n s o f t h e f i r m . T h e m a n a g e m e n t o f w o r k i n g capital assumes greatimportance because shortage of working c a p i t a l f u n d s i s p e r h a p s t h e b i g g e s t possible cause of failure of many business units in recent times. There it is of great importance on the part of management to pay particular attention to the p l a n n i n g a n d

control for working capital. An attempt has been made to m a k e critical study of the various dimensions of the working capital management of ACC . Decisions relating to working capital and short term financing are referred to as working capital management . T h e s e i n v o l v e managing the relationship between a firm's short -term assets and its short -term liabilities. The goal of Working capital management is to ensure t h a t t h e f i r m i s a b l e t o c o n t i n u e i t s operations and that it has sufficient money flow to satisfy both maturing short-term debt and upcoming operational expenses Objective of the study:The following are the main objective which has been undertaken in the presentstudy: 1. T o d e t e r m i n e t h e a m o u n t o f w o r k i n g c a p i t a l r e q u i r e m e n t a n d t o c a l c u l a t e various ratios relating to working capital. 2. To analyze the Indian Cement Industry. 3. To evaluate the financial performance of ACC limited using financial tools. 4. .To suggest the steps to be taken to increase the efficiency in managementof working capital.

Place of study:The project study is carried out at the Finance Department of ACC cements ltd corporate office Situated at Wadi, Karnataka. The study is undertaken as a parto f t h e P G P M c u r r i c u l u m f r o m 0 3 J U N E 2 0 1 0 t o 0 3 J U L Y 2 0 0 9 i n t h e f o r m o f summer internship Study design and methodology:-

Two types of data are collected, one is primary data a n d s e c o n d o n e i s secondary data. The primary data were collected from the Department of finance,ACC Ltd, Wadi. The secondary data were collected from the Annual Report of ACC & ACC website, etc. Scope: -The study has got a wide & fast scope. It tries to find out the players inthe industry & focuses on the upcoming trends. It also tries to show the financialperformance of the major player of the industry i.e.; ACC Ltd. Limitations:There may be limitations to this study because the study d u r a t i o n ( s u m m e r placement) is very short and its not possible to observe every aspect of working c a p i t a l m a n a g e m e n t p r a c t i c e s . T h e d a t a c o l l e c t e d w e r e m o s t l y s e c o n d a r y i n nature. Industry Overview:The cement industry is one of the vital industries for economic development in ac o u n t r y . T h e t o t a l u t i l i z a t i o n o f c e m e n t i n a y e a r i s u s e d a s a n i n d i c a t o r o f economic growth. Cement is a necessary constituent of infrastructure development and a key rawm a t e r i a l f o r t h e c o n s t r u c t i o n i n d u s t r y , e s p e c i a l l y i n t h e g o v e r n m e n t s infrastructure development plans in the context of the nations socio-Economic development.India is the world's second largest producer of cement with total capacity of 219 million tones (MT) at the end of FY 2009, according to the Cement ManufacturesAssociation. According to the Cement Manufacturers Association, cement dispatches during2009-10 were 159.43 million tones (MT) increasing by 12 per cent over 142.23 in2 0 0 8 - 0 9 . C e m e n t p r o d u c t i o n d u r i n g 2 0 0 9 - 1 0 w a s 1 6 0 . 3 1 M T a n i n c r e a s e o f 12.37 per cent over 142.65 MT in 2008-09. Moreover, the governments continued thrust on infrastructure will help the keyb u i l d i n g m a t e r i a l t o m a i n t a i n a n a n n u a l g r o w t h o f 9 - 1 0 p e r c e n t i n 2 0 1 0 , according to Indias largest cement company, ACC. In January 2010, rating agency Fitch predicted that the country will add about 50million tone cement capacity in 2010, taking the total to around 300 million tones

Government Initiatives Government initiatives in the infrastructure sector, c o u p l e d w i t h t h e housing sector boom and urban development, continue being the maindrivers of growth for the Indian cement industry. Increased infrastructure spending has been a key focus area. In the UnionB u d g e t 2 0 1 0 - 1 1 , U S $ 3 7 . 4 b i l l i o n h a s b e e n p r o v i d e d f o r i n f r a s t r u c t u r e development. The government has also increased budgetary allocation for roads by 13per cent to US$ 4.3 billion. Future Trends: The cement industry is expected to grow steadily in 2 0 0 9 - 2 0 1 0 a n d increase capacity by another 50 million tons in spite of the recession anddecrease in demand from the housing sector The industry experts project the sector to grow by 9 to 10% for the currentfinancial year provided India's GDP grows at 7%. India ranks second in cement production after China. The major Indian cement companies are Associated Cement CompanyLtd (ACC), Grasim Industries Ltd, Ambuja Cements Ltd, J.K Cement Ltdand Madras Cement Ltd. The major players have all made investments to increase the productionc a p a c i t y i n t h e p a s t f e w m o n t h s , h e r a l d i n g a p o s i t i v e o u t l o o k f o r t h e industry. The housing sector accounts for 50% of the demand for cement and thistrend is expected to continue in the near future. PORTERS FIVE FORCE MODEL:-It is useful for analyzing the industry overalland determining the level of competition among different existing players .It canbe understood under different topics .Along with the industry we will try to pointout the conditions for ACC too. I)THREAT OF NEW ENTRANTS:ACC has threat from new entrants like TATA; Relia nce etc can enter into this industry. But there are certain barriers to their entry. These are:-

 Availability of raw material Restrictions on entry by government into cement industry Cement industry requires a huge investment Switching costs are high in cement industry ii) BARGAINING POWER OF SUPPLIERS:Suppliers have very much impact on cement industry because of the followingreasons: Raw materials used in cement are gypsum, fly ash and slag. There arefew suppliers of these materials. Quality of finished goods i.e. cement is very important for ACC ltd. As already said, there are high switching costs in cement industry. There is no substitute to the raw material used in cement. iii) BARGAINING POWER OF BUYER:- ACC ltd plays the role of buyer. It hasfollowing bargaining powers: There are only few buyers of raw material of cement. ACC has major stake in cement industry i.e. 11% of the world .iv) THREAT OF SUBSTITUTES:- It has threat from its competitors like Ambujacements, Birla cements, Binani cements ,Grasim etc. V) RIVALRY AMONG THE COMPETING FIRMS IN INDUSTRY:In spite of huge stake in cement industry, it is difficult to be on the top because of t h e other competing companies i.e. Ambuja, Birla, and B i n a n i e t c . T h e competitors are using different promotional strategies to attract buyers. So, allthe leading players in the industry have to analyze the situation frequently & theyhave to keep changing them too.

SWOT ANALYSIS Strengths: 1. T h e i n d u s t r y i s l i k e l y t o m a i n t a i n i t s g r o w t h m o m e n t u m a n d c o n t i n u e growing at about 9 10% in the foreseeable future. 2. 2G o v e r n m e n t i n i t i a t i v e i n t h e i n f r a s t r u c t u r e s e c t o r s u c h a s t h e commencement of the second phase of the National Highway Developmentproject, freight carriers, rural roads and development of the housing sector (Bharat Nirman Yojana) are likely to be the main drivers of growth. 3. .In the coming few years the demand for the cement will increase whichwill be booming news for cement manufactures. As capacity utilization isover 90% now. 4. H u g e p o t e n t i a l f o r e x p o r t .

Weakness: 1. Cement Industry is highly fragmented & regionalized. 2. Low value commodity makes transportation over long distances un-economical. 3.High capital cost and investment cost for each and every project. 4.The complex Excise Duty structure based on the category o f b u y e r a n d end use of the cement has caused at lot of confusion in the industry. 5.The recent ban on export of cement clinker w o u l d i n c r e a s e t h e availability of cement in the domestic market, which in turn would putpressure on cement prices. Opportunities: Demandsupply gap 1. Substantially low per capita cement consumption as compared todeveloping countries (1/3 rd of world a v e r a g e ) P e r c a p i t a c e m e n t consumption in India is 82 kgs against a global average of 255 kgs and Asian average of 200 kgs.

2. Despite slightly lower economic growth, the c o n s t r u c t i o n a n d infrastructure sector is expected to record healthy growth, which augurswell for cement industry. 3. A d d i t i o n a l c a p a c i t y o f 2 0 m i l l i o n t o n s p e r a n n u m w i l l b e r e q u i r e d t o match the demand.

Threats: -

1. The recent moves by the Central Government in making the import of t h e c e m e n t t o t a l d u t y f r e e , i s a c a u s e o f w o r r y f o r t h e I n d i a n c e m e n t industry. 2.Further recent changes in the Central Excise Duty structure b y w a y o f introduction of multiple slabs of Excise Duty is also a cause of worry for the industry 3. Almost all the major players in the industry have announced substantiali n c r e a s e i n t h e c a p a c i t y a n d t h e p o s s i b i l i t y o f o v e r s u p p l y s i t u a t i o n cannot be ruled out. 4. Increased railway freight, coal prices and dispatch bottlenecks ona c c o u n t o f t r u c k L o a d i n g r e s t r i c t i o n s i m p o s e d b y v a r i o u s S t a t e Governments 5. Scarcity of good quality Coal is some other factors which are cause of concern for the industry.

Competitor analysis (Overall industry):ACC, with an installed capacity of 22.63 MTPA, enjoys an 11% market share inI n d i a , w h i c h w i t h i t s t o t a l i n s t a l l e d c a p a c i t y o f 2 0 7 M T P A , I n d i a i s t h e s e c o n d largest cement producing country in the world. ACCs nation-wide presence andb r a n d i m a g e e n s u r e s a c o m p e t i t i v e e d g e a n d h e l p s i t t o w i t h s t a n d r e g i o n a l fluctuations in prices and also to adapt its distribution to market place needs. Its key competitors are as follows:

ACC Ltd is the market leader with the capacity of 22.63 MTPA .The top ten companies are given below with the details:Name ACC Limted Production 17902 Installed Capacity 18,640 Net Profit (Quarter ended Sep 30, 2009) 41,550.89 lakhs

Name Production Installed Capacity Net Profit(Quarter ended on Name Production Installed Capacity Net Profit (in 2008-09) Name Production Installed Capacity Net Profit (in 2008-09) Name Production Installed Capacity Net Profit (in 2008-09) Name Production Installed Capacity Net Profit (in 2008-09) Name Production Installed Capacity Name Production Installed Capacity Name Production Installed Capacity Net Profit (in 2008-09) Name Production Installed Capacity Net Profit (in 2008-09)

Gujarat Ambuja Cements Limited 15,094 14,860 Sep30,2009) 31,848 lakhs Ultratech 13,707 17,000 97,700 lakhs Grasim 14,649 14,115 1,64,800 lakhs India Cements 8,434 8,810 43,218 lakhs JK Cement Ltd 6,174 6,680 14,234.40 lakhs Jaypee Group 6,316 6,531 Century Cement 6,636 6,300 Madras Cement 4,550 5,457 49,081 lakhs Birla Corp. 5,150 5,113 9,061 lakhs

Introduction of the Company ACC (ACC Limited) is India's foremost manufacturer of cement and concrete. A C C ' s o p e r a t i o n s a r e s p r e a d t h r o u g h o u t t h e c o u n t r y with 14 modern cement factories, 19 Ready mix concrete p l a n t s , 1 9 s a l e s o f f i c e s , a n d s e v e r a l z o n a l offices. It has a workforce of about 9000 persons and a countrywide distributionnetwork of over 9,000 dealers. ACC's research and development facility has aunique track record of innovative research, product development and specializedc o n s u l t a n c y s e r v i c e s . S i n c e i t s i n c e p t i o n in 1936, the company has been atrendsetter and important b e n c h m a r k f o r t h e c e m e n t i n d u s t r y i n r e s p e c t o f i t s production, marketing and personnel management processes. Its commitment toenvironment-friendliness, its high ethical standards in business dealings and itso n - g o i n g e f f o r t s i n c o m m u n i t y w e l f a r e p r o g r a m s h a v e w o n i t a c c l a i m a s a responsible corporate citizen. In the 70 years of its existence, ACC has been apioneer in the manufacture of cement and concrete and a trendsetter in many areas of cement and concrete technology including improvements in raw

materialutilization, process improvement, energy conservation and development of highperformance concretes. ACCs brand name is synonymous with cement and enjoys a high level of equityi n the Indian market. It is the only cement company that figures in t h e l i s t o f Consumer Super Brands of India. The company's various businesses are sup ported by a p o w e r f u l , i n - h o u s e research and technology backup facility - the only one of its kind in the Indiancement industry. This ensures not just consistency in product quality but also continuous improvements in products, processes, and application areas. ACC has rich experience in mining, being the largest user of limestone, and it isalso one of the principal users of coal. As the largest cement producer in India, itis one of the biggest customers of the Indian Railways, and the foremost user of the road transport network services for inward and outward movement of materials and products. ACC has also extended its services overseas to the Middle East, Africa, andSouth America, where it has provided technical and managerial consultancy to avariety of consumers, and also helps in the operation and maintenance of cement plants abroad. ACC is among the first companies in India to include commitment toenvironmental protection as one of its corporate objectives, long before pollutioncontrol laws came into existence. The company installed pollution controlequipment and high efficiency sophisticated electrostatic precipitators for cementkilns, raw mills, coal mills, power plants and coolers as far back as 1966. Everyfactory has state-of-the art pollution control equipment and devices.

History & Profile of ACC Cement Works

ACC was formed in 1936 when ten existing cement companies came together under one umbrella in a historic merger the countrys first notable merger at atime when the term mergers and acquisitions was not even coined. The history of ACC spans a wide canvas beginning with the lonely struggle of its pioneer F EDin Shaw and other Indian entrepreneurs like him who founded the Indiancement industry. Their efforts to face competition for survival in a small butaggressive market mingled with the stirring of a countrys nationalist pride thattouched all walks of life including trade, commerce and business. The first success came in a move towards cooperation in the countrys youngcement industry and culminated in the historic merger of ten companies to form acement giant. These companies belonged to four prominent business groups Tatas, Khataus, Killick Nixon and F E Din Shaw groups. ACC was formallyestablished on August 1, 1936. Sadly, F E Din Shaw, the man recognized as thefounder of ACC, died in January 1936. Just months before his dream could berealized. The ACC Board comprises of 13 persons. These include executive, non-executive, and nominee directors. This group is responsible for determining theobjectives and broad policies of the Company - consistent with the primaryobjective of enhancing long-term shareholder value. The Board meets once a month. Two other small groups of directors comprisingShareholders'/Investors' Grievance Committee and Audit Committee of the Boardof Directors - also meet once a month on matters pertaining to the finance andshare disciplines. During the last decade, there has been a streamlining of thesenior management structure that is more responsive to the needs of theCompany's prime business. A Managing Committee - comprising, in addition tothe Managing Director and the two executive directors, the presidents

representing multifarious disciplines: finance, production, marketing, researchand consultancy, engineering and human resources meets once a week. A Strategic Alliance:

The house of Tata was intimately associated with the heritage a n d h i s t o r y o f ACC, right from its formation in 1936 up to 2000. The Tata group sold all 14.45%of its shareholdings in ACC in three stages to subsidiary companies of GujaratAmbuja Cements Ltd. (GACL), who are now the largest single shareholder inACC.T h i s e n a b l e d A C C t o e n t e r i n t o a s t r a t e g i c a l l i a n c e w i t h G A C L ; a c o m p a n y reputed for its brand image and cost leadership in the cement industry. Holcim A New Partnership: A new association was formed between ACC and The H o l c i m g r o u p o f Switzerland in 2005. In January 2005, Holcim announced its plans to enter intolong term alliances with Ambuja Group by acquiring a majority stake in AmbujaCements India Ltd. (ACIL), which at the time held 13.8% of total equity shares inACC. Holcim simultaneously announced its bid to make an open offer to ACCshareholders, through Holdcem Cement Pvt. Ltd. and ACIL, to acquire a majoritys h a r e h o l d i n g i n A C C . A n o p e n o f f e r w a s m a d e b y H o l d c e m C e m e n t P v t . L t d . along with ACIL, following which the shareholding of ACIL increased to 34.69% o f E q u i t y share capital of ACC. Consequently, ACIL has filed d e c l a r a t i o n s indicating their shareholding and declaring itself as a promoter of ACC. Holcim is the world leader in cement asw e l l a s b e i n g large supplier of concrete, aggregates and certain c o n s t r u c t i o n related services. Holcim is also a respected name in information technology andresearch and development. The group has its headquarters in Switzerland withworldwide operations spread across more than 70 countries. Plants & Their Capacity: S.No. 1 2 3 4 5 Units Bargarh Chaibasa Chanda Damodhar Gagal State Bargarh Cement Works Chaibasa Cement Works Chanda Cement Works Damodar Cement Works Gagal Cement Works Capacity (MTPA) 0.96 0.87 1.00 0.53 4.40 (Gagal I and II)

6 7 8 9 10 11 12 13

Jamul Jamul Cement Works 1.58 ymore Kymore Cement Works 2.20 Lakheri Lakheri Cement Works 1.50 Madukkarai Madukkarai Cement Works 0.96 Sindri Sindri Cement Works 0.91 Wadi Wadi Cement Works 2.59 New Wadi Plant Wadi Cement Works 2.60 Tikaria Tikaria Cement Grinding andPacking Plant 2.31

Vision: To be one of the most respected companies in India; recognized for challengingconventions and delivering on our promises Mission of ACC

Mission of ACC

Leadership

Maintain our leadership of the Indian cement industry through thecontinuous modernization and expansion of our manufacturingfacilities and activities, and through the establishment of a wide andefficient marketing network. Achieve a fair and reasonable return on capital by promotingproductivity throughout the company. Ensure a steady growth of business by strengthening our positionin the cement sector. Maintain the high quality of our products and services and ensuretheir supply at fair prices. Promote and maintain fair industrial relations and an environmentfor the effective involvement, welfare and development of staff at alllevels. Promote research and development efforts in the areas of

Profitability

Growth

Quality

Equity

Pioneering

productdevelopment and energy, and fuel conservation, and to innovateand optimize productivity. Responsibility Fulfill our obligations to society, specifically in the areas of integrated rural development and in safeguarding the environmentand natural ecological balance

Few Achievement of ACC Limited: YEARA 1936 1947 1955 1956 1961 chievements The Associated Cement Companies Limited incorporated on August 1 India's first entirely indigenous cement plant installed at Chaibasa. ACC Sindri uses waste material - calcium carbonate sludge -from fertilizer factory atSindri to make cement Bulk Cement Depot established at Okhla, Delhi Blast furnace slag, (a waste by-product from steel) from TISCO used at ACCChaibasa to manufacture Portland Slag Cement. Manufacture of Hydrophobic (waterproof) cement at ACC Khalari. Manufacture of Portland Pozzolana Cement using naturally available materials. AnEco-friendly cements using an eco-friendly process ACC inducts use of pollution control equipment and high efficiency sophisticatedelectrostatic precipitators for its cement plants and captive power plants decadesbefore it becomes mandatory to do so.

1961 1965

1966

1978 Introduction of the energy efficient pre-calcinations technology for the first time inIndia. 1982 Commissioning of the first 1 MTPA plant in the country at Wadi, Karnataka.

1987 ACC develops a new binder, working at sub-zero temperature, which is successfullyused in the Indian expedition to Antarctica. 1992 Incorporation of Bulk Cement Corporation of India, a JV with the Government of India. 1993 Commercial manufacture of ready-mixed concrete at Mumbai. 2001 Commissioning of the new Wadi plant of 2.6 MTPA capacity in Karnataka, thelargest in India, and among the largest sized kilns in the World.

Awards & Accolades IMC Ramkrishna Bajaj National Quality Award - Gagal wins CommendationCertificate and New Wadi Plant wins Special Award for Performance Excellence in theManufacturing Sector, 2007. National Award for outstanding performance in promoting rural and agricultural development by ASSOCHAM Sword of Honour - by British Safety Council, United Kingdom for excellence in safetyperformance. Indira Priyadarshini Vrikshamitra Award --- by The Ministry of Environment andForests for "extraordinary work" carried out in the area of afforestation. FICCI Award --- for innovative measures for control of pollution, waste management &conservation of mineral resources in mines and plant. Subh Karan Sarawagi Environment Award- by The Federation of Indian MineralIndustries for environment protection measures. Drona Trophy- By Indian Bureau Of Mines for extra ordinary efforts in protection of Environment and mineral conservation in the large mechanized mines sector. Indo German Greentech Environment Excellence Award Golden Peacock Environment Management Special Award - for outstanding efforts inEnvironment Management in the large manufacturing sector. Indira Gandhi Memorial National Award - for excellent performance in prevention of pollution and ecological development

Excellence in Management of Health, Safety and Environment :Certificate of Meritby Indian Chemical Manufacturers Association Vishwakarma Rashtriya Puraskar trophy for outstanding performance in safety andmine working Good Corporate Citizen Award - by PHD Chamber of Commerce and Industry Jamnalal Bajaj Uchit Vyavahar Puraskar - Certificate of Merit by Council for Fair Business Practices Greentech Safety Gold and Silver Awards- for outstanding performance in Safetymanagement systems by Greentech Foundation FIMI National Award - for valuable contribution in Mining activities from the Federationof Indian Mineral Industry under the Ministry of Coal.

ACC was the first recipient of ASSOCHAMs first ever National Award for outstanding performance in promoting rural and agricultural developmentactivities in 1976 Decades later,PHD Chamber of Commerce and Industry selected ACC aswinner of its Good Corporate Citizen Award for the year 2002. Over the years, there have been many awards and felicitations for achievementsin Rural and community development, Safety, Health, Tree plantation, Aforestation, Clean Mining, Environment Awareness and Protection.

Map of ACC Network Corporate office:

Overseeing the companys rang of business; the Corporate Office is the centralhead quarters of all business and human resource function located in Mumbai. ACC Subsidiaries: 1.Bulk Cement Corporation India Ltd (BCCI) 2.ACC Machinery Company Ltd (AMCL) 3.ACC Nihon Casting Ltd (ANCL) Regional marketing offices :Offices at all major cities in India i.e Bangaluru , Bhopal, Chandigarh ,Coimbatore , Kanpur, Kolkata, Mumbai, Pune , Secunderabad ,New Delhi &Patna. MAP OF ACC PLANTS:-

HIGHILIGHTS OF FINANCIALY PERFORMANCE

Particulars NET SALES PBT OPERATING PROFIT PAT Capital Employed Basic Earning

2005 3221 684 616 544 3502 3002

2006 5803 1620 1717 1232 4234 6602

2007 6991 1930 1933 1439 4791 76.75

2008 7283 1737 1899 1213 5746 64.63

2009 8027 2294 2643 1607 6932 85.60

An Introduction To Working Capital Management Working capital means the part of the total assets of the business that changefrom one form to another form in the ordinary course of business operations. Concept of working capital:The word working capital is made of two words 1.Working and 2.CapitalThe word working means day to day operation of the business, whereas the wordcapital means monetary value of all assets of the business. Working capital : Working capital may be regarded as the life blood of business. Working capital isof major importance to internal and external analysis because of its closerelatio nship with the current day-to-day operations of a business. Every business needs funds for two purposes. * Long term funds are required to create production facilities through purchaseof fixed assets such as plants, machineries, lands, buildings & etc

* Short term funds are required for the purchase of raw materials, payment of wages, and other day-to-day expenses. . It is other wise known as revolving or circulating capital It is nothing but the difference between current assets and current liabilities. i.e. Working Capital = Current Asset Current Liability Businesses use capital for construction, renovation, furniture, software,equipmen t, or machinery. It is also commonly used to purchase inventory, or tomake payroll. Capital is also used often by businesses to put a down paymentdown on a piece of commercial real estate. Working capital is essential for anybusiness to succeed. It is becoming increasingly important to have access tomore working capital when we need it. Concept of working capital Gross Working Capital = Total of Current Asset Net Working Capital = Excess of Current Asset over CurrentLiability. Current Assests Cash in hand/at Bank Bills Receivable Sundry Debtors Short term loans Investors/stock Temporary investment Prepaid expenses Accrued incomes Current Liabilities Bills Payable Sundry Creditors Outstanding expenses Accrued expenses Bank Over draft

Working

capital

in

terms

of

five

components:

1. Cash and equivalents: - This most liquid form of working capital requiresconstant supervision. A good cash budgeting and forecasting system

providesanswers to key questions such as: Is the cash level adequate to meet currentexpenses as they come due? What is the timing relationship between cash inflowand outflow? When will peak cash needs occur? When and how much bankborrowing will be needed to meet any cash shortfalls? When will repayment be expected and will the cash flow cover it? 2. Accounts receivable: -Many businesses extend credit to their customers. If we do, is the amount of accounts receivable reasonable relative to sales? Howrapidly are receivables being collected? Which customers are slow to pay and what should be done about them? 3. Inventory: -Inventory is often as much as 50 percent of a firm's currentassets, so naturally it requires continual scrutiny. Is the inventory levelreas onable compared with sales and the nature of our business? What's the rate of inventory turnover compared with other com panies in our type of business? 4.Accounts payable: -Financing by suppliers is common in smallbusiness; it is one of the major sources of funds for entrepreneurs. Is the amount of money owed suppliers reasonable relative to what wepurchase? What is our firm's payment policy doing to enhance or Detract from our credit rating? 5. Accrued expenses and taxes payable: -These are obligations of our company at any given time and represent a future outflow of cash.

Two different concepts of working capital are:-