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AMBUJA CEMENT

CONTENTS

➢ ACCOUNTING STANDARDS
➢ COMPANY PROFILE
➢ DIRECTOR BOARD
➢ ANNUAL REPORT
➢ AUDITORS REPORT
➢ CONSOLIDATED PROFIT AND LOSS A/C
➢ CONSOLIDATED BALANCESHEET
➢ ACCOUNTING STANDARD USED BY
COMPANY
➢ SUGESTION & RECOMMANDATION
➢ CONCLUSION
ACCOUNTING STANDARDS

Accounting Standard 21: Consolidated Financial Statements

• To be applied in the preparation and presentation of consolidated financial statements


(CFS) for a group of enterprises under the control of a parent. Consolidated
Financial Statements is recommendatory. However, if consolidated financial statements are
presented, these should be prepared in accordance with the standard. For listed companies
mandatory as per listing agreement.

• Control means the ownership directly or indirectly through subsidiaries, of more than one-
half of the voting power of an enterprise or control of the composition of the board of
directors or such other governing body, to obtain economic benefit. Subsidiary is an
enterprise that is controlled by parent

.
• Control of composition implies power to appoint or remove all or a majority of directors.

• When an enterprise is controlled by two enterprises definitions of control, both the


enterprises are required to consolidate the financial statements of the first mentioned
enterprise (ASI-24).

• Consolidated financial statements to be presented in addition to separate financial


statements.

• All subsidiaries, domestic and foreign to be consolidated except where control is intended
to be temporary; i.e., intention at the time of investing is to dispose the relevant
investment in the ‘near future’ or the subsidiary operates under severe longterm
restrictions impairing transfer of funds to the parent. ‘Near future’ generally means not
more than twelve months from the date of acquisition of relevant investments (ASI-8).
Control is to be regarded as temporary when an enterprise holds shares as ‘stock-intrade’
and has acquired and held with an intention to dispose them in the near future(ASI-25).

• CFS normally includes consolidated balance sheet, consolidated P & L, notes and other
statements necessary for preparing a true and fair view. Cash flow only in case parent
presents cash flow statement.
• Consolidation to be done on a line by line basis by adding like items of assets, liabilities,
income and expenses which involves:

i) Elimination of cost to the parent of the investment in the subsidiary and the parent’s
portion of equity of the subsidiary at the date of investment. The difference to be treated as
goodwill/capital reserve, as the case may be

.
ii) Minority interest in the net income to be adjusted against income of the group.

iii) Minority interest in net assets to be shown separately as a liability.

iv) Intra-group balances and intra-group transactions and resulting unrealised profits should
be eliminated in full. Unrealised losses should also be eliminated unless cost cannot be
recovered.

v) The tax expense (current tax and deferred tax) of the parent and its subsidiaries to be
aggregated and it is not required to recompute the tax expense in context of consolidated
information (ASI -26).

vi) The parent’s share in the post-acquisition reserves of a subsidiary is not required to be
disclosed separately in the consolidated balance sheet. (ASI-28).

• Where two or more investments are made in a subsidiary, equity of the subsidiary to be
generally determined on a step by step basis

.
• Financial statements used in consolidation should be drawn up to the same reporting
date. If reporting dates are different, adjustments for the effects of significant
transactions/events between the two date to be made

• Consolidation should be prepared using same accounting policies. If the accounting


policies followed are different, the fact should be disclosed together with proportion of such
items

.
• In the year in which parent subsidiary relationship ceases to exist, consolidation of P & L
accounts to be made up to date of cessation

.
• Disclosure is to be of all subsidiaries giving name, country of incorporation or residence,
proportion of ownership and voting power held if different.

• Also nature of relationship between parent and subsidiary if parent does not own more
than one half of voting power, effect of the acquisition and disposal of subsidiaries on the
financial position, names of the subsidiaries whose reporting dates are different than that of
the parent.
• When the consolidated statements are presented for the first time, figures for the
previous year need not be given. Notes forming part of the separate financial statements of
the parent enterprise and its subsidiaries which are material to represent a true and fair
view are required to be included in the notes to the consolidated financial statements (ASI-
15).

COMPANY PROFILE

Ambuja Cements was set up in1986. In the last decade the

company has grown tenfold. The total cement capacity of the company is 18.5 million tones .Its plants are some of
the most efficient in the world. With environment protection measures that are on par with the finest in the
developed world.

The company's most distinctive attribute, however, is its approach to the business. Ambuja follows a unique
homegrown philosophy of giving people the authority to set their own targets, and the freedom to achieve their
goals. This simple vision has created an environment where there are no limits to excellence, no limits to efficiency.
And has proved to be a powerful engine of growth for the company As a result, Ambuja is the most profitable
cement company in India, and one of the lowest cost producer of cement in the world.

MANAGEMENT TEAM | ENVIRONMENT POLICY

When we started out, we approached the cement business with an open mind. Some things struck us immediately.
To compete with the older, established players who had already written off their plant cost, it was important to have
the lowest capital cost per ton of cement. Our plants would have to be set up in record time. Our capacity utilization
would have to be above 100%. And our power consumption would have to set a record low Given this line of
thinking, empowerment was not just a fashionable term, it was the only way to achieve our goals

If costs had to be controlled, it seemed absurd for engineers to check back with their seniors for every little
decision. The time lost would be far more expensive than any errors they would make. It was the same with
controlling power consumption. Who better than the engineers to suggest ways to cut costs. They knew the plants
inside out. It made sense to listen to them. Over time this has become a natural company culture: I can..

BOARD OF DIRECTORS

Mr. Suresh Neotia, Chairman


Mr. N. S. Sekhsaria, Vice Chairman
Mr. Markus Akermann
Mr. Paul Hugentobler
Mr. M. L. Bhakta
Mr. Nasser Munjee
Mr. Rajendra P. Chitale
Mr. Shailesh Haribhakti
Mr. Nirmalya Kumar, (upto 31/12/2008)
Mr. Onne van der Weijde, (w.e.f. 9/1/2009)
Mr. Omkar Goswami
Mr. Naresh Chandra, (w.e.f. 26/7/2008)
Mr. A. L. Kapur, Managing Director
Mr. P. B. Kulkarni, Whole-time Director (upto 31/1/2009)
Mr. N. P. Ghuwalewala, Whole-time Director
Mr. B. L. Taparia, Whole-time Director & Company
Secretary

Corporate Office :
106, Maker Chambers III,
Nariman Point,
Mumbai 400 021.
Elegant Business Park,
MIDC Cross Road ‘B’,
Off Andheri-Kurla Road,
Andheri (East),
Mumbai - 400 059.

AUDITORS REPORTS

To

The Members of Ambuja Cements Limited

1. We have audited the attached Balance Sheet of Ambuja Cements Limited ('the
Company') as at December 31, 2008 and also the Profit and Loss Account and the
Cash Flow Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on our
audit.

2. We conducted our audit in accordance with auditing standards generally accepted in


India. Those Standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the
Central Government of india in terms of sub-section (4A) of Section 227 of the Companies
Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

i. We have obtained all the information and explanations, which to the best of our
knowledge and belief were necessary for the purposes of our audit;

ii. In our opinion, proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;

iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with
by this report are in agreement with the books of account;

iv. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report comply with the accounting standards
referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

v. On the basis of the written representations received from the directors, as on


December 31, 2008, and taken on record by the Board of Directors, we report
that none of the directors is disqualified as on December 31, 2008 from being
appointed as a director in terms of clause (g) of sub-section (1) of section 274 of
the Companies Act, 1956.

vi. In our opinion and to the best of our information and according to the
explanations given to us, the said
accounts give the information required by the Companies Act, 1956, in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India;
a) in the case of the Balance Sheet, of the state of affairs of the Company as at
December 31, 2008;

b) in the case of the Profit and Loss Account, of the profit for the year ended on that
date; and

c) in the case of Cash Flow Statement, of the cash flows for the year ended on that
date.

For S. R. BATLIBOI & ASSOCIATES


Chartered Accountants
per Sudhir Soni
Partner
Membership No.: 41870
Mumbai
February 6, 2009
ACCOUNTING STANDARD USED BY COMPANY
AS 21
The consolidated financial statement have been prepared by Ambuja cements limited’s.
management in accordance with the requirements of accounting standards (as) 21.
Consolidated financial statements notified pursuant to the companies (accounting standards
) rules, 2006.

SUGGESTIONS & RECOMMENDATION

A very exhaustive study has been made, keeping in the essence of the objective of the
project. With the efforts put on the project a detailed analysis was conducted and result
were derived, based on the results and market response few suggestions are discussed
below

➢ The reach to the rural market need to be strengthened

➢ Now the domestic sales only 9% at 16.8 million it should be increases through rural
market

➢ On basis of past 5 year performance we have only net sale up to5% at 5344 per ton
,so we should reduced our miscellaneous expenses (manufacturing expenses
-4511.60)

➢ We should increases our export market , because we have only

All India

Demand analysis for all India is given below:

Fig in mil.tonnes
2007 2008 %

DOMESTIC 159.7 173.9 9

EXPORTS 4.2 2.9 -31


TOTAL 163.9 176.8 8

➢ Our profit before tax down 27 % at Rs1970crs it should increased through our the
domestic sales.
➢ During the inflation period our exceptional income rs 308 as compared to rs 786 cr in
2007 it was the big loss of our company , therefore we should increase our domestic
sales.

➢ Now we have increased only the 5% of production it should be increased with the
help of employees performance. Company should increases the workers in the
industry and also we increased our technology .

➢ Demand analysis of northern and southern region

Northern region
Fig in mil. In tones
North 2007 2008 %
Demand 32.3 34.3 7
Ambuja volume 6.1 6.2 3
Share (%) 18.8 18.1

Southern region
Fig in mil. in tones

South 2007 2008 %


Demand 19.2 21.1 10
Ambuja volume 2.2 2.6 19
Share (%) 11.5 12.4

Therefore we should increased the demand and supply in the southern region .

➢ Our freight and forwarding cost increased up to 12 %. We take necessary action to


reduces this charges

➢ Taxes on cement slightly reduced toward at end of 2008, that will help for profit.

➢ We should reduces our baddept and sundry debtor balance, now we have 1.86 crs

➢ We should take necessary step for reducing unsecured loans

Conclusion
We should prepare our annual reports with help of the accounting standards 21. To
be applied in the preparation and presentation of consolidated financial statements
(CFS) for a group of enterprises under the control of a parent. All subsidiaries,
domestic and foreign to be consolidated except where control is intended to be
temporary; i.e., intention at the time of investing is to dispose the relevant
investment in the ‘near future’ or the subsidiary operates under severe long-term
restrictions impairing transfer of funds to the parent.
Un realized profit and un realized losses should not be considered in our account.
This accounting standard useful for all company .it should be useful for analysis
whole business transaction.

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