1.

1 Introduction:
Fixed Assets are the assets held with the intention of being used on continuous
basis for the purpose of producing or providing goods or services and are not held for
resale in the normal course of business.
E.g.: Land and Buildings, Plant and Machinery, Motor Vehicles, Furniture and
Fixtures.
Valuation of fixed assets is important to have fair measure of profit or
loss and financial position of the concern. Fixed assets are meant for use for many
years. The value of these assets decreases with their use or with time or many other
reasons. A portion of fixed assets are reduced by usage are converted into cash
through charging depreciation. For correct measurement of income, proper
measurement of depreciation is essential, as depreciation constitutes a Part of total
cost of production.

Financial transactions are recorded in the books, keeping in view the going
concern aspect of the business unit. In going concern aspect it is assumed that the
business unit has reasonable expectation of continuing the business for a profit for an
indefinite period of time. This assumption provides much of the justification for
recording fixed assets at original cost and depreciating them in a systematic manner
without reference to their current realizable value.
It is useless to record the fixed assets in the balance sheet at their estimated
realizable values if there is no immediate expectation of selling them. So, they are
shown at their book value (i.e., Cost Depreciation) and not at current realizable
value. The market value of the fixed assets may change with the passage of time, but
for accounting purpose it continues to be shown in the books in historical cost.

The cost concept of accounting states that depreciation calculated on the basis of
historical cost of old assets is usually lower than the amount calculated at current
value/ replacement value. These results in more profits, which if distributed in full
will lead to reduction in capital.

ACCOUNTING STANDARD FOR FIXED ASSETS (AS-10):

AS-10 on Accounting for Fixed Assets has been made mandatory with effect from
01.04.1991. According to the AS-10, Fixed Asset is an asset held with the intention
of being used on continuous basis for the purpose of producing or providing goods or
services and is not held for resale in the normal course of action. Gross book value of
fixed asset is its historical cost or other amount substituted for historical costs in the
books of accounts or financial statements. When the amount of depreciation is
deducted from gross book value then it is Net Book Value.
Cost of Fixed Assets should consist of purchase price including import
duties etc., and attributable cost of bringing the asset to its working condition for its
intended use. Financing costs relating to borrowed funds attributable to construction
or acquisition of fixed assets for the period up to the acquisition or completion.
Expenditure incurred in start-up and commissioning of the project including test runs.
Revaluation of assets: Fixed assets may be restated in the value with the
help of appraisal under taken by the competent values .Such valuation of assets is
called revaluation.

FIXED ASSETS MANAGEMENT CYCLE

The fixed assets management cycle is the cycle of activities from the
acquisition of the asset to the final disposition of the assets at the end of their useful
life. The cycle has 7 steps:

Acquisition: The cycle begins with the acquisition, purchase, gift or otherwise, of
an asset and the determination that the asset is to be capitalized. To be capitalized the
asset has to meet the agencys capitalization limit and have a useful life of one year or
more.

Receiving: The asset is formally received and accepted by the agency. Receipt may
be verified by entry into an automated purchasing system or by hard copy document.
In the case of donated fixed assets, receipt can be verified by a letter to the donor.

Payment: Payment is made for the asset according to the terms of the purchase
order or recognition of acceptance of a gift to the donor. The payment includes the
acquisition cost, freight and all other costs to put the asset. Acquisition cost of donated
fixed assets is determined by its fair market value.

Identification: the asset is identified as an asset, tagged or otherwise identified and

entered into the fixed assets management inventory system. Assets are identified with
a permanently attached identification tag, etching or by painting on the identification
number.

Inventory: The longest step in the cycle. The asset is used over its useful life.
Assets are inventoried and accounted for during this step until they are no longer
needed. The agencys policies and procedures determine the inventory interval.

Excess: the asset is declared as excess to the users needs. The asset may be
transferred to another user where it will continue to be used, accounted for and
inventoried. Assets may be declared as excess more than once until the asset is no
longer needed.

Surplus: the last step in the fixed assets management cycle. The asset is declared to
be surplus property and to have no further value to the agency. The asset is disposed

of by sale or discarding depending on the residual value. Sale can be by auction,

sealed bid, spot sale, or through a sales store.

FIXED ASSETS MANAGEMENT CYCLE

1.2 NEED AND IMPORTANCE OF THE STUDY:

As fixed assets play an important role in companys objectives. These
fixed are not convertible or not liquidable over a period of time. The owners funds
and long term liabilities are invested in fixed assets. Since, fixed assets play dominant
role in the business and the firm has utilization of fixed assets. So, ratio contributes in
analyzing and evaluating the performance of the business.
If firms fixed assets are idle and not utilized properly it affects the longterm sustainability of the firm, which may affect liquidity and solvency and
profitability positions of the company. The idle of fixed assets leads to a tremendous
loss in financial cost and intangible cost associate of it. So, this will lead to evaluation
of fixed assets performance. Comparing with similar company and comparison with
industry standards.
Fixed assets are the assets which cannot be liquidated into cash within
one year. The huge amounts of funds of the company are invested in these assets.
Every year company invests an additional fund in these assets directly or indirectly.
The survival and other objectives of the company depend on operating performance of
management i.e. effective utilization of these assets.
Firm has evaluated the performance, of fixed assets with proportion of
capital employed on net assets turnover and other parameters which are helpful for
evaluating the performance of fixed assets.

1.3 SCOPE OF THE STUDY:

The project is covered on fixed assets of UltraTech Cement Limited. Drawn
from annual reports of the company. The subject matter is limited to fixed assets, its
analysis and its performance but not to any other areas of accounting corporate,
marketing and financial matters. Firm has evaluated the performance, of fixed assets
with proportion of capital employed on net assets turnover and other parameters
which are helpful for evaluating the performance of fixed assets.

1.4 OBJECTIVES OF THE STUDY:

The following are the objectives of the study
1. The study is conducted to know the amount of capital expenditure made by the
company UltraTech Cement Limited during study period 2009-10 to2013-14.
2. The study is conducted to evaluate fixed assets performance of UltraTech
Cement Limited.
3. The study is conducted to evaluate the fixed assets turnover of UltraTech Cement
Limited.
4. The study is conducted to evaluate depreciation and method of depreciation
adopted by UltraTech Cement Limited.
5. The study is conducted to know the amount of finance made by long-term
liabilities and owners funds towards fixed assets.

1.5 METHODOLOGY:
The data used for the analysis and interpretation is from annual reports
of the company i.e., secondary forms of data. Ratio analysis is used for calculation
purpose.
The project is presented using tables, graphs and with their
interpretations. No survey is undertaken or observation study is conducted by
evaluating fixed assets performance of the company.
SOURCES OF DATA:
The data needed for this project is collected from the following sources:
1. The data is adopted purely from secondary sources.
2. The theoretical contents are gathered purely from eminent text books and
references.
3. The financial data and information is gathered from annual reports of the company.

PERIOD OF STUDY:
The study has been conducted for a period of 5 years i.e 2009-10 to 2013-14.

2.1 THEORITICAL BACKGROUND

Fixed asset
Fixed asset, also known as a non-current asset or as property, plant, and
equipment (PP&E), is a term used in accounting for assets and property which
cannot easily be converted into cash. This can be compared with current assets such as
cash or bank accounts, which are described as liquid assets. In most cases, only
tangible assets are referred to as fixed.
Moreover, a fixed/non-current asset can also be defined as an asset not directly sold to
a firm's consumers/end-users. As an example, a baking firm's current assets would be
its inventory (in this case, flour, yeast, etc.), the value of sales owed to the firm via
credit (i.e. debtors or accounts receivable), cash held in the bank, etc. Its non-current
assets would be the oven used to bake bread, motor vehicles used to transport
deliveries, cash registers used to handle cash payments, etc. Each aforementioned
non-current asset is not sold directly to consumers.
These are items of value which the organization has bought and will use for an
extended period of time; fixed assets normally include items such as land and
buildings, motor vehicles, furniture, office equipment, computers, fixtures and
fittings, and plant and machinery. These often receive favorable tax treatment
(depreciation allowance) over short-term assets. According to International
Accounting Standard (IAS) 16, Fixed Assets are assets whose future economic benefit
is probable to flow into the entity, whose cost can be measured reliably.

It is pertinent to note that the cost of a fixed asset is its purchase price, including
import duties and other deductible trade discounts and rebates. In addition, cost
attributable to bringing and installing the asset in its needed location and the initial
estimate of dismantling and removing the item if they are eventually no longer needed
on the location.
The primary objective of a business entity is to make profit and increase the wealth of
its owners. In the attainment of this objective it is required that the management will
exercise due care and diligence in applying the basic accounting concept of
Matching Concept. Matching concept is simply matching the expenses of a period
against the revenues of the same period.
The use of assets in the generation of revenue is usually more than a year- that is long
term. It is therefore obligatory that in order to accurately determine the net income or
profit for a period depreciation is charged on the total value of asset that contributed
to the revenue for the period in consideration and charge against the same revenue of
the same period. This is essential in the prudent reporting of the net revenue for the
entity in the period.
Net book value of an asset is basically the difference between the historical cost of
that asset and it associated depreciation. From the foregoing, it is apparent that in
order to report a true and fair position of the financial jurisprudence of an entity it is
relatable to record and report the value of fixed assets at its net book value. Apart
from the fact that it is enshrined in Standard Accounting Statement (SAS) 3 and IAS
16 that value of asset should be carried at the net book value, it is the best way of
consciously presenting the value of assets to the owners of the business and potential
investor.

10

Depreciating a Fixed Asset

Depreciation is, simply put, the expense generated by the use of an asset. It is the
wear and tear of an asset or diminution in the historical value owing to usage. Further
to this; it is the cost of the asset less any salvage value over its estimated useful life. It
is an expense because it is matched against the revenue generated through the use of
the same asset. Depreciation is usually spread over the economic useful life of an
asset because it is regarded as the cost of an asset absorbed over its useful life.
Invariably the depreciation expense is charged against the revenue generated through
the use of the asset. The method of depreciation to be adopted is best left for the
management to decide in consideration to the peculiarity of the business, prevailing
economic condition of the assets and existing accounting guideline and principles as
implied in the organizational policies.
It is worth noting that not all fixed assets depreciate in value year-over-year. Land and
buildings, for example, may often increase in value depending on local real-estate
conditions.
A long-term tangible piece of property that a firm owns and uses in the production of
its income and is not expected to be consumed or converted into cash any sooner than
at least one year's time.
Fixed assets are sometimes collectively referred to as "plant".

11

Balance sheet - accounting for fixed assets

Introduction
An important distinction is made in accounting between "current assets" and "fixed
assets".
Current assets are those that form part of the circulating capital of a business. They
are replaced frequently or converted into cash during the course of trading. The most
common current assets are stocks, trade debtors, and cash.
Compare current assets with fixed assets. A fixed asset is an asset of a business
intended for continuing use, rather than a short-term, temporary asset such as stocks.
Fixed assets must be classified in a company's balance sheet as intangible, tangible,
or investments. Examples of intangible assets include goodwill, patents, and
trademarks. Examples of tangible fixed assets include land and buildings, plant and
machinery, fixtures and fittings, motor vehicles and IT equipment.
How should the changing value of a fixed asset be reflected in a company's
accounts?
The benefits that a business obtains from a fixed asset extend over several
years. For example, a company may use the same piece of production machinery for
many years, whereas a company-owned motor car used by a salesman probably has a
shorter useful life.
By accepting that the life of a fixed asset is limited, the accounts of a business need to
recognise the benefits of the fixed asset as it is "consumed" over several years.

12

This consumption of a fixed asset is referred to as depreciation.

Definition of depreciation
Financial Reporting Standard 15 (covering the accounting for tangible fixed
assets) defines depreciation as follows:
"the wearing out, using up, or other reduction in the useful economic life of a tangible
fixed asset whether arising from use, effluxion of time or obsolescence through either
changes in technology or demand for goods and services produced by the asset.'
A portion of the benefits of the fixed asset will be used up or consumed in each
accounting period of its life in order to generate revenue. To calculate profit for a
period, it is necessary to match expenses with the revenues they help earn.
In determining the expenses for a period, it is therefore important to include an
amount to represent the consumption of fixed assets during that period (that is,
depreciation).
In essence, depreciation involves allocating the cost of the fixed asset (less any
residual value) over its useful life. To calculate the depreciation charge for an
accounting period, the following factors are relevant:
- the cost of the fixed asset;
- the (estimated) useful life of the asset;
- the (estimated) residual value of the asset.

13

What is the relevant cost of a fixed asset?

The cost of a fixed asset includes all amounts incurred to acquire the asset and
any amounts that can be directly attributable to bringing the asset into working
condition.
Directly attributable costs may include:
- Delivery costs
- Costs associated with acquiring the asset such as stamp duty and import duties
- Costs of preparing the site for installation of the asset
- Professional fees, such as legal fees and architects' fees
Note that general overhead costs or administration costs would not be included as part
of the total
costs of a fixed asset (e.g. the costs of the factory building in which the asset is kept,
or the cost of the maintenance team who keep the asset in good working condition)
The cost of subsequent expenditure on a fixed asset will be added to the cost of the
asset provided that this expenditure enhances the benefits of the fixed asset or restores
any benefits consumed.
This means that major improvements or a major overhaul may be capitalised and
included as part of the cost of the asset in the accounts.

14

However, the costs of repairs or overhauls that are carried out simply to maintain
existing performance will be treated as expenses of the accounting period in which the
work is done, and charged in full as an expense in that period.
What is the Useful Life of a fixed asset?
An asset may be seen as having a physical life and an economic life.
Most fixed assets suffer physical deterioration through usage and the passage of time.
Although care and maintenance may succeed in extending the physical life of an
asset, typically it will, eventually, reach a condition where the benefits have been
exhausted.
However, a business may not wish to keep an asset until the end of its physical life.
There may be a point when it becomes uneconomic to continue to use the asset even
though there is still some physical life left.
The economic life of the asset will be determined by such factors as
technological progress and changes in demand. For purposes of calculating
depreciation, it is the estimated economic life rather than the potential physical life of
the fixed asset that is used.
What about the Residual Value of a fixed asset?
At the end of the useful life of a fixed asset the business will dispose of it and
any amounts received from the disposal will represent its residual value. This, again,
may be difficult to estimate in practice. However, an estimate has to be made. If it is
unlikely to be a significant amount, a residual value of zero will be assumed.

15

The cost of a fixed asset less its estimated residual value represents the total amount
to be depreciated over its estimated useful life.

Fixed Asset Controls

This section contains two dozen controls that can be applied to the acquisition,
valuation, and disposal of fixed assets. Of this group, 13 are considered primary
controls and are included in the flowchart in figure System of Fixed Asset Controls.
The remaining 11 controls either do not fit into the various fixed asset transaction
flows or are considered secondary controls that can bolster the primary controls as
needed.
In essence, the system of controls for an asset acquisition requires that initial funding
approval come from the annual budget, as well as additional approval through a
formal capital investment form just prior to the actual acquisition. There should also
be a post installation analysis of how actual project results compared to the estimates
shown in the original capital investment form. The key controls used once an asset is
installed are to tag it, assign specific responsibility for it, and ensure that any asset
transfers are approved by the shipping and receiving managers. Finally, asset
disposition controls call for regular disposition reviews to ensure that dispositions
occur while assets still retain some resale value, a formal disposition approval
process, and proper tracking of any resulting receipts.

16

System of Fixed Asset Controls

The controls noted in the flowchart are described at greater length next, in
sequence from the top of the flowchart to the bottom for each of the three types of
fixed asset transactions.

Obtain funding approval through the annual budgeting process. The

annual budgeting process is an intensive review of overall company operations
as well as of how capital expenditures are needed to fulfill the companys
strategic direction. As such, capital expenditure requests should be included in
the annual budget, thereby ensuring that they will be analyzed in some detail.
Expenditure requests included in the approved budget still should be subjected
to some additional approval at the point of actual expenditure, to ensure that

17

they are still needed. However, expenditure requests not included in the
approved budget should be subjected to a considerably higher level of analysis
and approval, to ensure that there is a justifiable need for them.

Require a signed capital investment approval form prior to purchase.

Given the significant amount of funds usually needed to acquire a fixed asset,
there always should be a formal approval process before a purchase order is
issued. An example is shown in figure below. Depending on the size of the
acquisition, a number of approval signatures may be required, extending up to
the company president or even the chair of the board of directors.

Use prenumbered acquisition and disposal forms. If the company uses a

manual system for fixed asset acquisitions and disposals, then it should
acquire a set of prenumbered acquisition and disposal forms. By doing so, it
can keep track of form numbers to ensure that none is lost prior to completion.
This is also a good way to ensure that employees do not attempt to submit
multiple acquisition authorization forms for the same asset, allowing them to
order duplicate assets and make off with the extra items. For this to be a fully
functional control, someone must be assigned the task of storing the forms in a
secure location and monitoring which form numbers have been released for
use.

Require return on investment calculation prior to approval. Given the

considerable size of some fixed asset investments, a reasonable control is to
calculate the estimated return on investment to see if the investment exceeds
the corporate hurdle rate. The return calculation can involve a variety of
approaches, such as the payback period, net present value, or internal rate of

18

return. All three calculations are included in the capital investment proposal
form shown in figure below.

Conduct a postcompletion project analysis. Managers have been known to

make overly optimistic projections in order to make favorable cases for asset
acquisitions. This issue can be mitigated by conducting regular reviews of the
results of asset acquisitions in comparison to initial predictions and then
tracing these findings back to the initiating managers. This approach can also
be used at various milestones during the construction of an asset to ensure that
costs incurred match original projections.

Compare fixed asset serial numbers to the existing serial number database. There is a possibility that employees are acquiring assets, selling them to
the company, then stealing the assets and selling them to the company again.
To spot this behavior, always enter the serial number of each acquired asset in
the fixed asset master file, and then run a report comparing serial numbers for
all assets to see if there are duplicate serial numbers on record.

Independently review fixed asset master file additions. A number of

downstream errors can arise when fixed asset information is entered incorrectly in the fixed asset master file. For example, an incorrect asset
description can result in an incorrect asset classification, which in turn may
result in an incorrect depreciation calculation. Similarly, an incorrect asset
location code can result in the subsequent inability to locate the physical asset,
which in turn may result in an improper asset disposal transaction. Further, an
incorrect acquisition price may result in an incorrect depreciation calculation.
To mitigate the risk of all these errors, have a second person review all new
entries to the fixed asset master file for accuracy.

19

Affix an identification plate to all fixed assets. If a company acquires assets

that are not easily differentiated, then it is useful to affix an identification plate
to each one to assist in later audits. The identification plate can be a metal tag
if durability is an issue, or can be a laminated bar code tag for easy scanning,
or even a radio frequency (RFID) tag. The person responsible for tagging
should record the tag number and asset location in the fixed asset master file.

Assign responsibility for assets. There is a significant risk that assets will not
be tracked carefully through the company once they are acquired. To avoid
this, formally assign responsibility for each asset to the department manager
whose staff uses the asset, and send all managers a quarterly notification of
what assets are under their control. Even better, persuade the human resources
manager to include asset control as a line item in the formal performance
review for all managers.

Use a formal transfer document to shift asset locations. If the preceding

control is implemented that assigns responsibility for specific assets to
department managers, then the transfer of an asset to a different department
calls for the formal approval of the sending and receiving department
managers. Otherwise, managers can claim that assets are being shifted without
their approval, so they have no responsibility for the assets.

Conduct regular asset disposition reviews. Fixed assets decline in value

over time, so it is essential to conduct a regular review to determine if any
assets should be disposed of before they lose their resale value. This review
should be conducted at least annually, and should include representatives from
the accounting, purchasing, and user departments. An alternative approach is
to create capacity utilization metrics (which is most easily obtained for

20

production equipment) and report on utilization levels as part of the standard

monthly management reporting package; this tends to result in more
immediate decisions to eliminate unused equipment.

Require a signed capital asset disposition form prior to disposition. There

is a risk that employees could sell off assets at below-market rates or
disposition assets for which an alternative in-house use had been planned.
Also, if assets are informally disposed of, the accounting staff probably will
not be notified and so will continue to depreciate an asset no longer owned by
the company, rather than writing it off. To avoid these problems, require the
completion of a signed capital asset disposition form, such as the one shown in
figure below.

Verify that cash receipts from asset sales are handled properly. Employees
may sell a companys assets, pocket the proceeds, and report to the company
that the asset actually was scrapped. This control issue can be reduced by
requiring that a bill of sale or receipt from a scrapping company accompany
the file for every asset that has been disposed of.

The preceding controls were primary ones required as part of the basic fixed
asset transaction flows. In addition, the next ancillary controls either are
general controls that operate outside of any specific transaction or are
designed to provide additional risk mitigation.

Segregate responsibilities related to fixed assets. If the person purchasing an

asset also receives it, there is a considerable risk that the person will alter the
purchasing documents to eliminate evidence of the receipt and then steal the
asset. The same concern applies to several aspects of fixed assets transactions.
A control over this situation is to segregate these types of responsibilities:

21

o Fixed asset acquisition

o Fixed asset transaction recording
o Custody of the fixed asset
o Fixed asset disposal
o Reconciliation of physical assets to accounting records

Restrict access to the fixed asset master file. The fixed asset master file
contains all baseline information about an asset and is the source document for
depreciation calculations as well as asset location information. If people were
to gain illicit access to this file, they could make modifications to change
depreciation calculations (thereby changing financial results) as well as
modify locations (possibly resulting in theft of the assets). To avoid these
problems, always use password controls to restrict access to the fixed asset
master file.

Restrict facility access. If the company owns fixed assets that can be easily
moved and have a significant resale value, there is a risk that they will be
stolen. If so, consider restricting access to the building during nonwork hours
and hire a security staff to patrol the perimeter or at least the exits.

Install an alarm system to detect RFID-tagged assets. If the company has

especially valuable fixed assets that can be moved, then consider affixing a
RFID tag to each one and then installing a transceiver near every building exit
that will trigger an alarm if the RFID tag passes by the transceiver.

Reconcile fixed asset additions with capital expenditure authorizations. A

good detective control to ensure that all acquisitions have been authorized
properly is to periodically reconcile all fixed asset additions to the file of
approved capital expenditure authorizations. Any acquisitions for which there
22

is no authorization paperwork are then flagged for additional review, typically

including reporting of the control breach to management.

Increase the capitalization limit. A key problem with fixed asset tracking is
that it involves a considerable amount of additional paperwork as well as
ongoing depreciation calculations, which may so overwhelm the accounting
staff that they are struggling to keep up with the paperwork rather than
focusing on proper control of the assets themselves. This recommended
control may seem counterintuitive, but increasing the capitalization limit
reduces the number of assets designated as fixed assets, thereby allowing the
accounting staff to focus its attention on the proper approval, tracking, and
disposition of a smaller number of large-dollar assets. Thus, oversight of
smaller assets is abandoned in favor of greater inspection of large-dollar asset
transactions.

Conduct a periodic fixed asset audit. The internal audit staff should schedule
a periodic audit of fixed assets, reconciling the on-hand inventory to the
accounting records. Given the considerable quantity of fixed assets that many
companies maintain, it is acceptable to focus on the 20 percent of fixed assets
that typically account for 80 percent of the invested cost of all fixed assets. An
example of a report suitable for a fixed asset audit is shown in figure below.

Verify the fair value assumptions on dissimilar asset exchanges. Accounting rules allow one to record a gain or loss on the exchange of dissimilar
assets. Since this calculation is based on the fair value of the assets involved
(which is not stated in the accounting records), the possibility exists for
someone to artificially create an asset fair value that will result in a gain or

23

loss. This situation can be avoided by having an outside appraiser review the
fair value assumptions used in this type of transaction.

Test for asset impairment. There are a variety of circumstances under which
the net book value of an asset should be reduced to its fair value, which can
result in significant reductions in the recorded value of an asset. This test
requires a significant knowledge of the types of markets in which a company
operates, the regulations to which it is subject, and the need for its products
within those markets. Consequently, only a knowledgeable person who is at
least at the level of a controller should be relied on to detect the presence of
assets whose values are likely to have been impaired.

Verify that correct depreciation calculations are being made. Though there
is no potential loss of assets if incorrect depreciation calculations are being
made, it can result in an embarrassing adjustment to a companys financial
statements at some point in the future. This control should include a
comparison of capitalized items to the official corporate capitalization limit to
ensure that items are not being inappropriately capitalized and depreciated.
The control should also include a review of the asset categories in which each
individual asset has been recorded, to ensure that an asset has not been
misclassified and therefore incorrectly depreciated.

Verify that all changes in asset retirement obligation assumptions are

authorized. A company can artificially increase its short-term profitability by
altering the assumed amount of future cash flows associated with its asset
retirement obligations. Since downward revisions to these assumptions will be
reflected in the current periods income statement as a gain, any changes to
these assumptions should be approved prior to implementation.

24

MANAGEMENT OF FIXED ASSETS:

The selection of various fixed assets required for creating the desired
production facilities and the decision regarding the determination of level of fixed
assets in the capital structure is an important decision for the company to take for the
smooth running of business. The decisions relating to fixed assets involve huge funds
for long period of time and are generally of irreversible nature affecting the long
profitability of the business. Thus, management of fixed asset is of vital importance to
any organization.
The process of Fixed Assets Management involves:
1. Selection of most worthy projects from the different alternatives of fixed assets.
2. Arranging the requisite funds/capital for the same.

The first important consideration is to acquire only that amount of fixed

assets, which will be just sufficient to ensure smooth and efficient running of the
business. In some cases it may be economical to buy certain assets in a lot size.
Another important consideration to be kept in mind is possible increase in the demand
of the firms product needs the expansion of activities. Hence a firm should have that
amount of fixed assets, which could adjust to increase demand.
Another aspect of fixed assets management is that a firm must ensure
buffer stocks of certain essential equipments to ensure uninterrupted production in the
events of emergencies. Sometimes, there may some breakdown in some equipments
or services affecting the entire production. It is always better to have some alternative
arrangements to deal with such situations but at the same time the cost of carrying
such buffer stock should also be evaluated.

25

2. 2 ARTICLE/JOURNALS
1. JOURNAL REFERENCE: INTERNATIONAL
JOURNAL OF COMPUTER SCIENCE AND APPLICATIONS.
AUTHORS: AGATHA BROWN, EXPERT ASP, NET
ABSTRACT: The fixed asset management system primarily helps you keep track
record of the assets of organization and its where about. The system at the same time
enables you to calculate depreciation and also enables you to find out the cost.
Accumulate depreciation and WDV at the of the asset.

AUTHORS: CCH, A WOLTER KLUWER BUSINESS

ABSTRACT: Designed for use by accounting and tax professionals, pro system
fixed assets is a comprehensive tracking, management and reporting program that
offers extensive depreciation calculation capabilities, projections, asset-life events and
reporting.

AUTHOR: THOMSON RETUTERS-FIXED ASSETS

Fixed assets CS is designed for professionals accountant managing the assets
depreciations functions for multiple clients entities. the program, which can be used as
standard alone system are integrated into CS, professionals suit of tax in accounting
applications, provide comprehensive depreciation, projection, inventory and reporting
capabilities, with automatic calculations asset department and extensive life
management.

26

2. JOURNAL REFERENCE:TOWARDS AND APPROACH TO

SELECT AND ASSET INFORMATION MANAGEMENT
STRATEGY.
AUTHOR: MOHAMMED ZIED QUERTANI.
ABSTRACT: The management of engineering asset such as a facilities and
equipments can be challenging task and optimizing there is critical. To ensure
effective utilization of on asset, one as to make effective decision regarding the asset
lifecycle. The objective of these papers is then to propose and approach for decision
makers to develop and effective asset information management(AIM) Strategy. We
focus on the management of the set of information associate with asset throughout
is lifecycle. For these purpose the propose first to identify asset information
requirements of and effective management. Second, we examine different technology
and system for information capture, storage, retrieval and use. The finding of these
paper would be help in selecting AIM strategy aim it providing, time accurate,
complete and consistence information about location and condition of asset so as
result in better decision making. Furthermore, in order to assist manager to select a
strategy, we discuss the role of information quality to assess the performance of an
asset information strategy.

27

3. JOURNAL: FIXED ASSET ACCOUTING AND MANAGEMENT

PROCEDURES
ABSTRACT: Assigning proper value to fixed asset and controlled items is critical
to maintaining accurate accounting records. Depending upon the classification of the
asset (land, buildings improvements, equipments, vehicles or infrastructures), the
information required to establish and properly recorded asset value will come from
various organizations are departments. Therefore, there will be shared responsibilities
While other city organizations may provide supporting information, it remains the
ultimate responsibilities of each department Fixed asset coordinator (DFAC) to ensure
that the proper complete valuation has been recorded for each asset in the
departments Fixed Asset Management System (FAMS).

28

4. JOURNAL: THE VALUE OF FIXED ASSET REVALUATION

RESERVES IN INTERNATIONAL ACCOUNTING
TITLE: INTERNATIONAL MANAGEMENT REVIEW VOL 5 NO.TO
2009
AUTHOR: GYUNG PAIK
ABSTRACT: The Securities and Exchange Commission (SEC) of US, as recently
proposed that all US, firms the required to issue financial statements in accordance
with IFRS by 2014. Under IFRS the rules for measurement of fixed asset are resented
in IAS 16, which allows firms to choose either the cost model or the revaluation
model. In the studies, investigate the effect of adopting the IFRS the standard for
fixed asset revaluation by examine the relationship between changes in revaluation
reserves and stop prices. Out of the 15 countries used for the analysis, 5countries and
revaluation results that are statistically significant in explaining the market value of
equity , suggesting that revaluation results are value relevant for those countries.

29

5. JOURNAL: DEVELOPING THE ASSET-LIGHT BUSINESS

MODEL
SOURCE: STRATEGIC MANAGEMENT
AUTHOR: FEN- MAY LIOU
ABSTRACT: The A-L model refers to a business strategy the pursues capital
efficiency by focusing the equity investment on those assets where a companys
expertise attains the best return for investors (Maly and palter, 2002, p. 1). The core of
the asset-light approach is to enhance the firms the long term value through enlarging
valuable and unique firm resources. The fundamental question of operational strategic
management is this: What kinds of the data can be taken into audit the heterogeneous
strategic resources?. The data must be observable, assessable and most importantly
commeasurable, since competitive advantage must be assessed on a comparative
basis.

30

3.1 INDUSTRY PROFILE

Cement industry in India
Introduction:The Indian cement industry is directly related to the country's infrastructure
sector and thus its growth is paramount in determining the development of the
country. With a current production capacity of around 366 million tonnes (MT), India
is the second largest producer of cement in the world and fueled by growth in the
infrastructure sector, the capacity is expected to increase to around 550 MT by FY20.
India has a lot of potential for development in the infrastructure and construction
sector and the cement sector is expected to largely benefit from it. Some of the recent
major government initiatives such as development of 100 smart cities are expected to
provide a major boost to the sector.
Expecting such developments in the country and aided by suitable government
foreign policies, several foreign players such as the likes of Lafarge, Holcim and Vicat
have invested in the country in the recent past. Another factor which aids the growth
of this sector is the ready availability of the raw materials for making cement, such as
limestone and coal.
Market Size
According to data released by the Department of Industrial Policy and
Promotion (DIPP), cement and gypsum products attracted foreign direct investment
(FDI) worth US$ 2,984.29 million between April 2000 and September 2014.
In India, the housing sector is the biggest demand driver of cement, accounting for
about 67 per cent of the total consumption. The other major consumers of cement
include infrastructure at 13 per cent, commercial construction at 11 per cent and
industrial construction at nine per cent.
To meet the rise in demand, cement companies are expected to add 56 MT capacity
over the next three years. The cement capacity in India may register a growth of eight
per cent by next year end to 395 MT from the current level of 366 MT. It may
increase further to 421 MT by the end of 2017. The country's per capita consumption
stands at around 190 kg.
A total of 188 large cement plants together account for 97 per cent of the total
installed capacity in the country, while 365 small plants account for the rest. Of these

31

large cement plants, 77 are located in the states of Andhra Pradesh, Telangana,
Rajasthan and Tamil Nadu. The Indian cement industry is dominated by a few
companies. The top 20 cement companies account for almost 70 per cent of the total
cement production of the country.
Investments
On the back of growing demands, due to increased construction and infrastructural
activities, the cement sector in India has seen many investments and developments in
recent times. Some of them are as follows:

Lafarge and Holcim plans to request for the European Commission's approval for

their possible merger. The two companies had earlier unveiled plans in April 2014 to
create the world's biggest cement group with US$ 44 billion in yearly sales.

JSW cement plans to enter the Kerala market to cash in on the construction frenzy

in the state. JSW is presently building a three million tonnes per annum (MTPA)
capacity plant at Chitrapur in Karnataka to add to the current 5.4 MTPA capacity in
South India.

Zuari Cement through its subsidiary Gulbarga Cement Limited (GCL) plans to set

up a 3.23 MT cement plant in Gulbarga, Karnataka. The company along with the
cement plant is setting up a 50 MW captive power plant in the region.

Malabar Cements plans to set up an automated cement handling and bagging unit

as well as raw materials import facility in the Kochi port. Malabar Cements has
projected a minimum throughput of 300,000 tonnes per annum which can be
extendable up to 600,000 tonnes per annum, apart from intermediate products and raw
materials such as clinker, limestone and coal.

Reliance Cement Company (RCC), a subsidiary of Reliance Infrastructure, has

entered into the cement market of Bihar where the demand for the building material is
on the rise due to a realty boom. RCC presently has plants with total installed capacity
of 5.8 MTPA.
Government Initiatives
In the 12th Five Year Plan, the government plans to increase investment in
infrastructure to the tune of US$ 1 trillion and increase the industry's capacity to 150
MT.

32

The Cement Corporation of India (CCI) was incorporated by the Government

of India in 1965 to achieve self-sufficiency in cement production in the country.
Currently, CCI has 10 units spread over eight states in India.
In order to help the private sector companies thrive in the industry, the government
has been approving their investment schemes. Some such initiatives by the
government in the recent past are as follows:

India has joined hands with Switzerland to reduce energy consumption and develop

newer methods in the country for more efficient cement production, which will help
India meet its rising demand for cement in the infrastructure sector.

The Government of India has decided to adopt cement instead of bitumen for the

construction of all new road projects on the grounds that cement is more durable and
cheaper to maintain than bitumen in the long run.
Road Ahead
The globally-competitive cement industry in India continues to witness positive trends
such as cost control, continuous technology upgradation and increased construction
activities.
Furthermore, major cement manufacturers in India are progressively using other
alternatives such as bioenergy as fuel for their kilns. This is not only helping to bring
down production costs of cement companies, but is also proving effective in reducing
emissions.
With the ever-increasing industrial activities, real estate, construction and
infrastructure, in addition to the various Special Economic Zones (SEZs) being
developed across the country, there is a demand for cement.
It is estimated that the country requires about US$ 1 trillion in the period FY 2012-13
to FY 2016-17 to fund infrastructure such as ports, airports and highways to boost
growth, which promises a good scope for the cement industry.
The 4th Annual India Cement Sector Business Sentiment Survey is nearly out and the
India Construction & Building Materials Journal provides the opportunity of an
exclusive look at the surveys results before their sharing with the wider audiences.

33

We are glad to be able to present here some of the survey highlights and provide our
readers with before-hand data regarding the views and expectations of cement
industry professionals.
Optimism continues to be the name of the game for the Indian cement industry a
function of long-term trends as well as human nature. But on a closer look, the survey
shows that the optimism only runs skin deep and that it has already been eroded by an
increasing percentage of industry members who feel dissatisfied with the overall
performance of the field last year.
For instance, the percentage of those who believe the industry performed well
dropped from 43 percent in 2012 to 26 percent in 2013, while the number of
respondents who believe the industry performed poorly almost tripled from 8 percent
last year to 22 percent in 2013. Regarding the future evolution of the industry, survey
participants continue to be on the optimistic side and hope for a somewhat better or
much better performance compared to the last 6 months.
Sub-Saharan Africa draws up the battle lines
Competition in sub-Saharan Africa is set to intensify when Nigeria's Dangote Cement
opens its first cement plant in South Africa in early 2014. It is the first time Africa's
two largest cement producers, Dangote and South Africa's PPC, will produce cement
in the same country. Future clashes will follow across the region as each producer
increasingly advances toward the other.
The Kingdom needs cement... and workers
Saudi Arabian infrastructure demands have created all sorts of reverberations across
the Middle Eastern cement industry and beyond as the nation pushes on to build its
six 'economic' cities amongst other projects. Back in April 2013 King Abdullah bin
Abdulaziz Al Saud of Saudi Arabia issued an edict ordering the import of 10Mt of
cement. Then some producers started to report production line shutdowns in the
autumn of 2013 as they buckled under the pressure, although they consoled
themselves with solid profit rises. Now, cement sales have fallen following a
government crackdown on migrant workers that has hit the construction sector.

34

Competition concerns in Europe

Europe may be slowly emerging from the economic gloom but anti-trust regulators
have remained vigilant. An asset swap between Cemex and Holcim over units in the
Czech Republic, Germany and Spain has received attention from the European
Commission. In the UK the Competition Commission has decreed that further action
is required for the cement sector following the creation of new player Hope
Construction Materials in 2012. Lafarge Tarmac may now have to sell another one of
its UK cement plants to increase more competition into the market. Elsewhere in
Europe, Belgium regulators took action in September 2013 and this week we report
on Polish action against cartel-like activity.
Don't forget South-East Asia, Brazil or Russia!
Growth continues to dominate these regions and major sporting tournaments
are on the way in Brazil and Russia, further adding to local cement demand.
Votorantim may have cancelled its US$4.8bn initial public offering in August 2013
but it is still has the highest cement production capacity in Brazil. Finally, Indonesia
may not have had any 'marquee' style story to sum up 2013 but it continues to
regularly announce cement plant builds. In July 2013 the Indonesian Cement
Association announced that cement sales growth had fallen to 'just' 7.5% for the first
half of 2013.
In the most general sense of the word, a cement is a binder, a substance which
sets and hardens independently, and can bind other materials together. The word
"cement" traces to the Romans, who used the term "opus caementicium" to describe
masonry which resembled concrete and was made from crushed rock with burnt lime
as binder. The volcanic ash and pulverized brick additives which were added to the
burnt lime to obtain a hydraulic binder were later referred to as cementum, cimentum,
cment and cement. Cements used in construction are characterized as hydraulic or
non-hydraulic.
The most important use of cement is the production of mortar and concretethe
bonding of natural or artificial aggregates to form a strong building material which is
durable in the face of normal environmental effects.

35

Concrete should not be confused with cement because the term cement refers only to
the dry powder substance used to bind the aggregate materials of concrete. Upon the
addition of water and/or additives the cement mixture is referred to as concrete,
especially if aggregates have been added.
It is uncertain where it was first discovered that a combination of hydrated nonhydraulic lime and a pozzolan produces a hydraulic mixture (see also: Pozzolanic
reaction), but concrete made from such mixtures was first used on a large scale by
Roman engineers. They used both natural pozzolans (trass or pumice) and artificial
pozzolans (ground brick or pottery) in these concretes. Many excellent examples of
structures made from these concretes are still standing, notably the huge monolithic
dome of the Pantheon in Rome and the massive Baths of Caracalla. The vast system
of Roman aqueducts also made extensive use of hydraulic cement. The use of
structural concrete disappeared in medieval Europe, although weak pozzolanic
concretes continued to be used as a core fill in stone walls and columns.

MODERN CEMENT
Modern hydraulic cements began to be developed from the start of the
Industrial Revolution (around 1800), driven by three main needs:
Hydraulic renders for finishing brick buildings in wet climates
Hydraulic mortars for masonry construction of harbor works etc, in contact with
sea water.
Development of strong concretes
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 any material used by the Romans, but
was a "Natural cement" made by burning 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

36

in 515 minutes. The success of "Roman Cement" led other manufacturers to develop
rival products by burning artificial mixtures of clay and chalk.
John Smeaton made an important contribution to the development of cements when
he was planning the construction of the third Eddystone Lighthouse (1755-9) in the
English Channel. He needed a hydraulic mortar that would set and develop some
strength in the twelve hour period between successive high tides. He performed an
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 engineer by
profession, and took the idea no further. Apparently unaware of Smeaton's work, the
same principle was identified by Louis Vicat in the first decade of the nineteenth
century. Vicat went on to devise a method of combining chalk and clay into an
intimate mixture, and, burning this, produced an "artificial cement" in 1817. James
Frost,orking 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 called Portland cement, because the render made
from it was in color similar to the prestigious Portland stone.
All the above products could not compete with lime/pozzolan concretes because of
fast-setting (giving insufficient time for placement) and low early strengths (requiring
a delay of many weeks before formwork could be removed). Hydraulic limes,
"natural" cements and "artificial" cements all rely upon their belite content for
strength development. Belite develops strength slowly. Because they were burned at
temperatures below 1250 C, they contained no alite, which is responsible for early
strength in modern cements. The first cement to consistently contain alite was made
by Joseph Aspdin's son William in the early 1840s. This was what we call today
"modern" Portland cement. Because of the air of mystery with which William Aspdin
surrounded his product, others (e.g. Vicat and I C Johnson) have claimed precedence
in this invention, but recent analysis of both his concrete and raw cement have shown
that William Aspdin's product made at Northfleet, Kent was a true alite-based cement.
However, Aspdin's methods were "rule-of-thumb": Vicat is responsible for
establishing the chemical basis of these cements, and Johnson established the
importance of sintering the mix in the kiln.

37

William Aspdin's innovation was counter-intuitive for manufacturers of "artificial

cements", because they required more lime in the mix (a problem for his father),
because they required a much higher kiln temperature (and therefore more fuel) and
because 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.

3.2 COMPANY PROFILE

ULTRATECH CEMENT:
UltraTech Cement Limited has an annual capacity of 18.2 million tonnes. It
manufactures and markets Ordinary Portland Cement, Portland Blast Furnace Slag
Cement and Portland Pozzalana Cement. It also manufactures ready mix concrete
(RMC).
UltraTech Cement Limited has five integrated plants, six grinding units and three
terminals two in India and one in Sri Lanka.
UltraTech Cement is the countrys largest exporter of cement clinker. The export
markets span countries around the Indian Ocean, Africa, Europe and the Middle East.
UltraTechs subsidiaries are Dakshin Cement Limited and UltraTech Ceylinco (P)
Limited.
The roots of the Aditya Birla Group date back to the 19th century in the
picturesque town of Pilani, set amidst the Rajasthan desert. It was here that Seth Shiv
Narayan Birla started trading in cotton, laying the foundation for the House of Birlas.
Through India's arduous times of the 1850s, the Birla business expanded rapidly. In
the early part of the 20th century, our Group's founding father, Ghanshyamdas Birla,
set up industries in critical sectors such as textiles and fibre, aluminium, cement and
chemicals. As a close confidante of Mahatma Gandhi, he played an active role in the
Indian freedom struggle. He represented India at the first and second round-table
confere

nce in London, along with Gandhiji. It was at "Birla House" in Delhi

38

that the luminaries of the Indian freedom struggle often met to plot the downfall of the
British Raj.
Ghanshyamdas Birla found no contradiction in pursuing business goals with the
dedication of a saint, emerging as one of the foremost industrialists of preindependence India. The principles by which he lived were soaked up by his
grandson, Aditya Vikram Birla, our Group's legendary leader.
Aditya Vikram Birla: putting India on the world map
A formidable force in Indian industry, Mr. Aditya Birla dared to dream of
setting up a global business empire at the age of 24. He was the first to put Indian
business on the world map, as far back as 1969, long before globalisation became a
buzzword in India.
In the then vibrant and free market South East Asian countries, he ventured to set up
world-class production bases. He had foreseen the winds of change and staked the
future of his business on a competitive, free market driven economy order. He put
Indian business on the globe, 22 years before economic liberalisation was formally
introduced by the former Prime Minister, Mr. Narasimha Rao and the former Union
Finance Minister, Dr. Manmohan Singh. He set up 19 companies outside India, in
Thailand, Malaysia, Indonesia, the Philippines and Egypt.
Interestingly, for Mr. Aditya Birla, globalization meant more than just geographic
reach. He believed that a business could be global even whilst being based in India.
Therefore, back in his home-territory, he drove single-mindedly to put together the
building

blocks

to

make

our

Indian

business

global

force.

Under his stewardship, his companies rose to be the world's largest producer of
viscose staple fiber, the largest refiner of palm oil, the third largest producer of
insulators and the sixth largest producer of carbon black. In India, they attained the
status of the largest single producer of viscose filament yarn, apart from being a
producer of cement, grey cement and rayon grade pulp. The Group is also the largest
producer of aluminum in the private sector, the lowest first cost producers in the
world and the only producer of linen in the textile industry in India.

39

At the time of his untimely demise, the Group's revenues crossed Rs.8,000 crore
globally, with assets of over Rs.9,000 crore, comprising of 55 benchmark quality
plants, an employee strength of 75,000 and a shareholder community of 600,000.
Most importantly, his companies earned respect and admiration of the people, as one
of India's finest business houses, and the first Indian International Group globally.
Through this outstanding record of enterprise, he helped create enormous wealth for
the nation, and respect for Indian entrepreneurship in South East Asia. In his time, his
success was unmatched by any other industrialist in India.
That India attains respectable rank among the developed nations, was a dream he
forever cherished. He was proud of India and took equal pride in being an Indian.
Under the leadership of our Chairman, Mr. Kumar Mangalam Birla, the Group has
sustained and established a leadership position in its key businesses through
continuous value-creation. Spearheaded by Grasim, Hindalco, Aditya Birla Nuvo,
Indo Gulf Fertilisers and companies in Thailand, Malaysia, Indonesia, the Philippines
and Egypt, the Aditya Birla Group is a leader in a swathe of products viscose
staple fibre, aluminium, cement, copper, carbon black, palm oil, insulators, garments.
And with successful forays into financial services, telecom, software and BPO, the
Group is today one of Asia's most diversified business groups.
Board of Directors
:: Mr. Kumar Mangalam Birla, Chairman
:: Mrs. Rajashree Birla
:: Mr. R. C. Bhargava
:: Mr. G. M. Dave
:: Mr. N. J. Jhaveri
:: Mr. S. B. Mathur
:: Mr. V. T. Moorthy
:: Mr. O. P. Puranmalka
:: Mr. S. Rajgopal
:: Mr. D. D. Rathi
:: Mr. S. Misra, Managing Director
Executive President & Chief Financial Officer
:: Mr. K. C. Birla

40

Chief Manufacturing Officer

:: R.K. Shah
Chief Marketing Officer
:: Mr. O. P. Puranmalka
Company Secretary
:: Mr. S. K. Chatterjee
Our Vision
"To actively contribute to the social and economic development of the
communities in which we operate. In so doing, build a better, sustainable way of
life for the weaker sections of society and raise the country's human development
index."
Mrs. Rajashree Birla, Chairperson,
The Aditya Birla Centre for Community Initiatives and Rural Development
Awards won
Year
2013-2014
2012-2013
2011-2012
2010-2011
2010-2011
2010
2010
2010
2009-2010
2009-2010
2009-2010

Award
IMC Ramkrishna Bajaj National Quality Award
Asociated with Govrmnent projects & Business World FICCI-SEDF
CSR Award
ASSOCHAM CSR Excellence Award for its "truly outstanding"
CSR activities
Subh Karan Sarawagi Environment Award
Business World FICCI-SEDF CSR Award
Greentech Environment Excellence Gold Award
IMC Ramkrishna Bajaj National Quality Award
Asian CSR Award
National Award for Prevention of Pollution
Rajiv Gandhi Environment Award for Clean Technology
State Level Environment Award (Plant)

Making a difference

41

Before Corporate Social Responsibility found a place in corporate lexion, it was

already textured into our Group's value systems. As early as the 1940s, our founding
father Shri G.D Birla espoused the trusteeship concept of management. Simply stated,
this entails that the wealth that one generates and holds is to be held as in a trust for
our multiple stakeholders. With regard to CSR, this means investing part of our profits
beyond business, for the larger good of society.
While carrying forward this philosophy, his grandson, Aditya Birla weaved in the
concept of 'sustainable livelihood', which transcended cheque book philanthropy. In
his view, it was unwise to keep on giving endlessly. Instead, he felt that channelising
resources to ensure that people have the wherewithal to make both ends meet would
be more productive. He would say, "Give a hungry man fish for a day, he will eat it
and the next day, he would be hungry again. Instead if you taught him how to fish, he
would be able to feed himself and his family for a lifetime."
Taking these practices forward, our chairman
Mr. Kumar Mangalam Birla institutionalised the concept of triple bottom line
accountability represented by economic success, environmental responsibility and
social commitment. In a holistic way thus, the interests of all the stakeholders have
been textured into our Group's fabric.
The footprint of our social work today straddles over 3,700 villages, reaching out to
more than 7 million people annually. Our community work is a way of telling the
people among whom we operate that We Care.
Our strategy
Our projects are carried out under the aegis of the "Aditya Birla Centre for
Community Initiatives and Rural Development", led by Mrs. Rajashree Birla. The
Centre provides the strategic direction, and the thrust areas for our work ensuring
performance management as well.
Our focus is on the all-round development of the communities around our plants
located mostly in distant rural areas and tribal belts. All our Group companies Grasim, Hindalco, Aditya Birla Nuvo, Indo Gulf and UltraTech have Rural
Development Cells which are the implementation bodies.

42

Projects are planned after a participatory need assessment of the communities around
the plants. Each project has a one-year and a three-year rolling plan, with milestones
and measurable targets. The objective is to phase out our presence over a period of
time and hand over the reins of further development to the people. This also enables
us to widen our reach. Along with internal performance assessment mechanisms, our
projects are audited by reputed external agencies, who measure it on qualitative and
quantitative parameters, helping us gauge the effectiveness and providing excellent
inputs.
Our partners in development are government bodies, district authorities, village
panchayats and the end beneficiaries -- the villagers. The Government has, in their 5year plans, special funds earmarked for human development and we recourse to many
of these. At the same time, we network and collaborate with like-minded bilateral and
unilateral agencies to share ideas, draw from each other's experiences, and ensure that
efforts are not duplicated. At another level, this provides a platform for advocacy.
Some of the agencies we have collaborated with are UNFPA, SIFSA, CARE India,
Habitat for Humanity International, Unicef and the World Bank.

Our focus areas

Our rural development activities span five key areas and our single-minded goal here
is to help build model villages that can stand on their own feet. Our focus areas are
healthcare, education, sustainable livelihood, infrastructure and espousing social
causes.
The name Aditya Birla evokes all that is positive in business and in life. It
exemplifies integrity, quality, performance, perfection and above all character.

43

Our logo is the symbolic reflection of these traits. It is the cornerstone of our
corporate identity. It helps us leverage the unique Aditya Birla brand and endows us
with a distinctive visual image.
Depicted in vibrant, earthy colours, it is very arresting and shows the sun rising over
two circles. An inner circle symbolising the internal universe of the Aditya Birla
Group, an outer circle symbolising the external universe, and a dynamic meeting of
rays converging and diverging between the two.

Our corporate logo thus serves as an umbrella for our Group. It signals the common
values and beliefs that guide our behaviour in all our entrepreneurial activities. It
embeds a sense of pride, unity and belonging in all of our 130,000 colleagues
spanning 25 countries and 30 nationalities across the globe. Our logo is our best
calling card that opens the gateway to the world.
Group companies
:: Grasim Industries Ltd.
:: Hindalco Industries Ltd.
:: Aditya Birla Nuvo Ltd.
:: UltraTech Cement Ltd.

Indian companies
:: Aditya Birla Minacs IT Services Ltd.
:: Aditya Birla Minacs Worldwide Limited
:: Essel Mining & Industries Ltd
:: Idea Cellular Ltd.
:: Aditya Birla Insulators
:: Aditya Birla Retail Limited
:: Aditya Birla Chemicals (India) Limited
International companies
Thailand
:: Thai Rayon
:: Indo Thai Synthetics
:: Thai Acrylic Fibre
:: Thai Carbon Black

44

:: Aditya Birla Chemicals (Thailand) Ltd.

:: Thai Peroxide
Philippines
:: Indo Phil Group of companies
:: Pan Century Surfactants Inc.
Indonesia
:: PT Indo Bharat Rayon
:: PT Elegant Textile Industry
:: PT Sunrise Bumi Textiles
:: PT Indo Liberty Textiles
:: PT Indo Raya Kimia
Egypt
:: Alexandria Carbon Black Company S.A.E
:: Alexandria Fiber Company S.A.E
China
:: Liaoning Birla Carbon
:: Birla Jingwei Fibres Company Limited
:: Aditya Birla Grasun Chemicals (Fangchenggang) Ltd.
Canada
:: A.V. Group
Australia
:: Aditya Birla Minerals Ltd.
Laos
:: Birla Laos Pulp & Plantations Company Limited
North and South America, Europe and Asia
:: Novelis Inc.
Singapore
:: Swiss Singapore Overseas Enterprises Pte Ltd. (SSOE)
Joint ventures
:: Birla Sun Life Insurance Company
:: Birla Sun Life Asset Management Company
:: Aditya Birla Money Mart Limited
:: Tanfac Industries Limited
UltraTech is India's largest exporter of cement clinker. The company's production
facilities are spread across eleven integrated plants, one white cement plant, one
clinkerisation plant in UAE, fifteen grinding units, and five terminals four in India
and one in Sri Lanka. Most of the plants have ISO 9001, ISO 14001 and OHSAS
18001 certification. In addition, two plants have received ISO 27001 certification and
45

four have received SA 8000 certification. The process is currently underway for the
remaining plants. The company exports over 2.5 million tonnes per annum, which is
about 30 per cent of the country's total exports. The export market comprises of
countries around the Indian Ocean, Africa, Europe and the Middle East. Export is a
thrust area in the company's strategy for growth.
UltraTech's products include Ordinary Portland cement, Portland Pozzolana cement
and Portland blast furnace slag cement.

Ordinary Portland cement

Portland blast furnace slag cement

Portland Pozzolana cement

Cement to European and Sri Lankan norms

Ordinary Portland cement

Ordinary portland cement is the most commonly used cement for a wide range of
applications. These applications cover dry-lean mixes, general-purpose ready-mixes,
and

even

high

strength

pre-cast

and

pre-stressed

concrete.

Portland blast furnace slag cement

Portland blast-furnace slag cement contains up to 70 per cent of finely ground,
granulated blast-furnace slag, a nonmetallic product consisting essentially of silicates
and alumino-silicates of calcium. Slag brings with it the advantage of the energy
invested in the slag making. Grinding slag for cement replacement takes only 25 per
cent of the energy needed to manufacture portland cement. Using slag cement to
replace a portion of portland cement in a concrete mixture is a useful method to make
concrete better and more consistent. Portland blast-furnace slag cement has a lighter
colour, better concrete workability, easier finishability, higher compressive and
flexural strength, lower permeability, improved resistance to aggressive chemicals and
more consistent plastic and hardened consistency.
Portland Pozzolana cement

46

Portland pozzolana cement is ordinary portland cement blended with pozzolanic

materials (power-station fly ash, burnt clays, ash from burnt plant material or silicious
earths), either together or separately. Portland clinker is ground with gypsum and
pozzolanic materials which, though they do not have cementing properties in
themselves, combine chemically with portland cement in the presence of water to
form extra strong cementing material which resists wet cracking, thermal cracking
and has a high degree of cohesion and workability in concrete and mortar.
"As a Group we have always operated and continue to operate our businesses as
Trustees with a deep rooted obligation to synergise growth with responsibility."
Mr Kumar Mangalam Birla, Chairman, Aditya Birla Group
The cement industry relies heavily on natural resources to fuel its operations.
As these dwindle, the imperative is clear alternative sources of energy have to be
sought out and the use of existing resources has to be reduced, or eliminated
altogether. Only then can sustainable business be carried out, and a corporate can truly
say it is contributing to the preservation of the environment.
UltraTech takes its responsibility to conserve the environment very seriously, and its
eco-friendly approach is evident across all spheres of its operations. Its major thrust
has been to identify alternatives to achieve set objectives and thereby reduce its
carbon footprint. These are done through:
::
::
::
::
::

Waste management
Energy management
Water conservation
Biodiversity management
Afforestation

47

4.1 DATA ANALISYS AND INTERPRETATION

PRODUCT PROFILE
ULTRA TECH CEMENTS manufactures and distributes its own main product
lines of cement .We aim to optimize production across all of our markets, providing a
complete solution for customer's needs at the lowest possible cost, an approach we
call strategic integration of activities.
Cement is made from a mixture of 80 percent limestone and 20 percent clay.
These are crushed and ground to provide the "raw meal, a pale, flour-like powder.
Heated to around 1450 C (2642 F) in rotating kilns, the meal undergoes complex
chemical changes and is transformed into clinker. Fine-grinding the clinker together
with a small quantity of gypsum produces cement. Adding other constituents at this
stage produces cements for specialized uses.
QUALITY
Six strong benefits that make 43, 53 Grade, Super fine, Premium and Shakti
the ideal cement
1.

Higher compressive strength.

2.

Better soundness.

3.

Lesser consumption of cement for M-20 Concrete Grade and above.

4.

Faster de shuttering of formwork.

5.

Reduced construction time with a superior and wide range of cement catering to

every conceivable building need, ULTRA TECH CEMENTS is a formidable player in

the cement market.
Here just a few reasons why ULTRA TECH CEMENTS chosen by millions of
India.

48

 Ideal raw material

Low lime and magnesia content and high proportion of silicates.
Greater fineness.
COMPONENTIAL ANALYSIS:
The componential analysis of the fixed assets of Ultratech includes net
blocks, capital (work in progress) and construction stores and advances. The data
relating to different components of fixed assets of the UltraTech Cement Limited for
5 years commencing from 2009-10 to 2013-14 are set out in the following table
analysis:
YEAR

NETBLOCK
(FIXEDASSETS)

2009-10
2010-11
2011-12
2012-13
2013-14

4941.68
11400.25
11634.82
13122.36
15871.84

CAPITAL
(W\P)

124.49
274.04
274.07
274.18
274.24
TABLE NO 4.1 COMPONENTIAL ANALYSIS

GRAPH NO 4.1 COMPONENTIAL ANALYSIS

49

TOTAL
5066.17
11674.3
11908.9
13396.5
16146.1

INTERPRETATION: By observing the above table it reveals that the investment in

the net block is in increasing trend .It was 5066.17 over the total fixed assets during
the year 2010 and it has increased to 16146.1 during the year 2013-14.
TREND ANALYSIS:
In financial analysis the direction of change over a period of years is of
initial importance. Time series and trend analysis of ratio indicates the direction of
changes. This kind of analysis is particularly applicable to the profit and loss account.
It is advisable that trends of sales and net income may be studied in the light of two
factors. The general price level that might be found in practice is that a number of
firms would be shown at persistent growth over period of years but to get a true trend
of growth, the sales figure should be adjusted by a suitable index of general prices.
In other words, sales figures should be deflated for raising price level.
Another method of securing trend of growth and the one which can be used instead of
adjusted sales figure or as to check on them is to tabulate and lot the output of
physical volume of the sales expressed in suitable units of measure. The general price
level is not considered while analyzing trend in growth as it can mislead management.
They may become unduly optimistic in period of prosperity and pessimistic in dual
periods.
For trend analysis the use of index numbers is generally advocated, the
procedure followed is to assign the numbers to items of base years and at calculated
percentage change in each item of other years in relation to base year. This procedure
may be called as Fixed percentage method.

This

margin

determines

the

direction of upward or downward and involves the implementation of the percentage

relationship of each statement item means on the same in the base year. Generally the
first year is taken as the base year. The figures of the base year are taken as 100 and

50

trend ratio for the other years is calculated on the basis of first year. Here an attempt is
made to know the growth rate in total investment and fixed assets of the UltraTech

Cement Limited for 5 years that is 2009-10 to 2013-14.

TABLE NO 4.2 GROWTH IN TOTAL INVESTMENT:
YEAR

INVESTMENT

TREND PERCENTAGE

2009-10

1669.55

100

2010-11
2011-12

3730.32
3788.77

223.432661
101.56689

2012-13

5108.72

134.838483

2013-14

5391.67

105.538569

GRAPH NO 4.2 GROWTH IN TOTAL INVESTMENT

INTERPRATATION:
From the analysis of above table it can be observed that Total Investment of
UltraTech Cement Limited had change and the growth rate is increased and in the
51

year 2011 it is the increasing stage and in the year 2014 it is increased due to
increased in the current block. It is constant from 2009-10 to 2013-14.
TABLE NO 4.3 GROWTH RATE IN FIXED ASSETS:
YEAR

FIXEDASSETS

2009-10

TREND PERCENTAGE
100

4716.99

2010-11

230.87456

10890.33

2011-12

111.71498

12166.13

2012-13

115.28062

14025.19

2013-14

110.66816

15521.42

GRAPH NO 4.3 GROWTH RATE IN FIXED ASSETS

INTERPRETATION:
The above table shows that the investments in fixed assets are
increasing. So this is a good sign for the company. When compared to 2010-2014 it is
been continuously increased in different ratio percent to 110.66%

52

RATIO ANALYSIS:
Ratio analysis is a powerful tool of financial analysis. A ratio is defined
as the indicated Quotient of two mathematical expressions and Ratios look at the
relationship between individual values and relate them to how a company has
performed in the past, and might perform in the future.
The absolute accounting figure reported in financial statement does not
provide a meaningful understanding of the performance and financial position of the
firm. Ratios help us to summarize large quantities of financial data and to make
qualitative judgment about firms financial performance.
1. FIXED ASSETS TO NET WORTH RATIO:
This ratio establishes the relationship between fixed assets and net worth.
Net worth = share capital + reserves and surplus + retained earnings
Fixed assets to net worth ratio = Fixed assets
Net worth
The ratio of Fixed assets to Net worth indicates the extent to which
share holders funds are sunk into the fixed assets. Generally, share holders should
finance for
Purchasing fixed assets and equity including the reserves and surpluses and
retained earnings. If the ratio is less than 100% it implies that owners funds are more
than total fixed assets and the share holder provide a part of working capital.
When the ratio is more than 100% it implies that owners funds are not
sufficient to finance the fixed assets and financier has to depend upon outsiders to
finance the fixed assets. There is no Rule of Thumb to interpret but 60%-65% is
considered to be satisfactory ratio in case of industrial undertaking.

53

2. FIXED ASSET RATIO:

This ratio explains whether the firm has raised adequate long term fund to meet its
fixed assets required and is calculated as under:
=

Fixed assets (after depreciation)

Capital employed
This ratio gives an idea as to what part of the capital employed has been used in
purchasing the fixed assets for the concern. If the ratio is less than 1 it is good for the
concern.
3. FIXED ASSETS AS A PERCENTAGE TO CURRENT LIABILITIES:
The ratio measures the relationship between fixed assets and the funded debts
and is very useful to the long term erection. The ratio can be calculated as shown
below
Fixed assets as a percent of current liabilities=

Fixed Assets
Current liabilities

a. TOTAL ASSETS TURN OVER RATIO:

The ratio is calculated by dividing the net sales by the value of total assets that
is (net sales/total investment) or (sales/total investment).A high ratio is an indicator of
over trading of total assets while a low ratio reveals idle capacity. The traditional
standard for the ratio is two times.

= Net sales
Total Assets

4. FIXED ASSETS TURNOVER RATIO:

The ratio expresses the no. of times fixed assets are being turned over in
a stated period. It is calculated under.
=

_____________sales_____________
Net fixed assets (after depreciation)

This ratio shows how well the fixed assets are being used in business. The ratio is
important in case of manufacturing concern because sales are produced not only by
use of current assets but also by amount invested in fixed assets the higher ratio, the

54

better is the performance. On the other hand, a low ratio indicates that fixed assets are
not being effectively utilized.
5. RETURN ON TOTAL ASSETS:
=

Profit after tax

Total assets
This ratio is calculated to measure the profit after tax against invested in

total assets to ascertain whether assets are being utilized properly or not.
The higher the ratio the better it is for the concern.
Let us use ratios in the (UltraTech Cement Limited) information:
FIXED ASSETS TO NET WORTH RATIO
The ratio indicates the extent to where the shareholders funds are struck
in the fixed assets. The formula to compute fixed assets to net worth is calculated as
follows:
Fixed assets (after depreciation)
Net worth
NET WORTH =share capital + reserves and surplus + retained earnings-net loss.
If the ratio is less than 100% it implies that owners funds are more than the fixed
assets and the shareholders and vice versa provide a part of working capital.
Fixed assets to net worth ratio = Net fixed assets
Net worth

55

TABLE NO 4.4 FIXED ASSETS TO NET WORTH RATIO

YEAR

NETFIXED ASSETS

2009-10
2010-11
2011-12
2012-13
2013-14

NET WORTH
4608.65

4716.99

10666.04

10890.33

RATIO IN %
1.02351
1.02103

12166.13

12859.82

0.94606

14025.19

15234.82

0.92061

17097.51

0.90781

15521.42
FIXED ASSETS TO NET WORTH RATIO

INTERPRETATION:
The above table shows a continuous increase in net worth and fixed assets.
This shows the satisfactory position of the company.

FIXED ASSETS RATIO:

Capital employed=shareholders fund + Long-Term borrowings
Fixed assets (after depreciation)
Capital Employed

TABLE NO 4.5 FIXED ASSETS RATIO

56

YEAR

NETFIXED

CAPITAL EMPLOYED

RATIO IN %

ASSETS
2009-10
2010-11
2011-12
2012-13
2013-14

4716.99
10890.33
12166.13
14025.19
15521.42

978.68
3063.83
2286.16
2421.52
2663.59

4.819747
3.554482
5.321644
5.791895
5.827255

GRAPH NO 4.5 FIXED ASSETS RATIO

INTERPRETATION
The above table shows growth in fixed assets satisfactory position of
fixed assets in the company. Long term funds show less fluctuation, there is no change
the highest percent 5.82 recorded in the year 2013-14. That shows the position of the
company is satisfactory.

FIXED ASSETS AS A PERCENTAGE TO CURRENT LIABILITIES:

Fixed assets as a percentage to current Liabilities
= __fixed assets__
Current Liabilities
57

TABLE NO 4.6 FIXED ASSETS AS A PERCENTAGE TO CURRENT

LIABILITIES:
YEAR
2009-10
2010-11
2011-12
2012-13
2013-14

NET
ASSETS
4716.99
10890.33
12166.13
14025.19
15521.42

FIXED CURRENT
LIABILITIES
2153.61
5345.56
6420.48
7711.26
7783.72

RATIO IN %
2.190271
2.037266
1.894894
1.818793
1.994087

GRAPH NO 4.6 FIXED ASSETS AS A PERCENTAGE TO CURRENT

LIABILITIES

INTERPRETATION

58

The above table shows the relationship between fixed and current Liabilities.
The above table shows growth in fixed assets this shows the satisfactory position of
fixed assets in the company. Even the current liabilities are increasing. The highest
percentage recorded was in the year 2009-10 i.e., 2.19 and the lowest was in the year
2013-2014 i.e., 1.99.
TOTAL INVESTMENT TURN OVER RATIO:
The total investment turnover ratio can be calculated by the formula as given
under
Total investment ratio =

sales
Total investment

TABLE NO 4.7 TOTAL INVESTMENT TURN OVER RATIO

YEAR

SALES

INVESTMENT

RATIO IN %

2009-10
2010-11
2011-12
2012-13
2013-14

7042.82
13205.64
18270.69
20174.94
20279.80

1669.55
3730.32
3788.77
5108.72
5391.67

4.218394
3.540082
4.822328
3.949118
3.761320

GRAPH NO 4.7 TOTAL INVESTMENT TURN OVER RATIO

59

INTERPRETATION
From the above table we can see that sales had an increase Investment is
constant from 2010-2014that signifies the company position is satisfactory.
FIXED ASSETS TURN OVER RATIO:
The fixed assets turnover ratio is a relation between the sales or cost of
goods and fixed/capital assets employed in a business.
Fixed assets turnover ratio =

sales

Total fixed asset

YEAR

SALES

NETFIXED

ASSETS
2009-10
7042.82
4716.99
2010-11
13205.64
10890.33
2011-12
18270.69
12166.13
2012-13
20174.94
14025.19
2013-14
20279.80
15521.42
TABLE NO 4.8 FIXED ASSET TURN OVER RATIO

RATIO IN %
1.493075
1.212602
1.501767
1.438478
1.306568

GRAPH NO 4.8 FIXED ASSET TURN OVER RATIO

60

INTERPRETATION
The above table shows increases in Net fixed assets. That can also be seen clearly in
sales, that indicates a good sign.
RETURN ON TOTAL ASSETS:
The return on fixed assets can calculate as under:
Return on fixed assets = profit after tax
Total Assets
YEAR

PROFIT AFTER TAX

TOTAL ASSETS RATIO IN %

6213.17

0.175955

2010-11

1093.24
1404.23

14810.64

0.094812

2011-12

2446.19

16667.95

0.14676

2012-13

2655.43

19697.50

0.13481

2013-14

2144.47

21970.29
TABLE NO 4.9 RETURN ON TOTAL ASSETS

0.09760

2009-10

GRAPH NO 4.9 RETURN ON TOTAL ASSETS

61

INTERPRETATION
The above table shows decrease in profit 2010-2014 profit has gone up. This
shows the favorable position of the company.
VALUATION OF FIXED ASSETS:
UltraTech Cement Limited Follows
1. Historical cost method in the valuation of fixed assets.
2. The fixed assets do not include assets acquired on sale-cum-lease basis from
various Financial Institutions whereon the lease rent paid for the year is charged to
revenue.
3. Plant and Machinery includes the value of Air Conditioning Plants at various units
which were transferred and vested with the Corporation under the transfer scheme.
The gross value and depreciation thereon are not segregated in the absence of
break up details under the transfer scheme. The value thereof, however, is
insignificant.
4. Investments are intended for long term and are carried at cost. Income on
investment is accounted on accrual basis.

62

5. Capital expenditure on assets not owned by the company is reflected as a distinct

items in capital WIP till the period of completion and therefore in the Fixed assets.
6. The Company evaluates the impairment of losses on the fixed assets whenever
events or changes in circumstances indicate that their carrying amounts may not
be recoverable. If such assets are considered to be impaired the impairment loss is
then recognized for the amount by which the carrying amount of the assets
exceeds its recoverable amount, which is the higher of an asset's net selling price
and value in use. For the purpose of assessing impairment, assets are grouped at
the smallest level for which, there are separately identifiable cash flows.
7. Fixed assets is adjusted in their carrying cost in respect of foreign currency
transactions entered before 1-4-2014 and that related to current assets is
recognized as revenue/expenditure during the year.
8. In case of commissioned assets, where final settlement of bills with contractors is
yet to be effected, capitalization is done on provisional basis subject to necessary
adjustment in the year of final settlement.
CALCULATION OF DEPRECIATION:
Depreciation methods followed by UltraTech Cement Limited is as follows:
1. Depreciation is charged on straight-line method as per rates notified by the
Government of India except where actual cost does not exceed Rs. 5547 in
which case it is charged 100% in the same year. In respect of assets, where
rate is not laid down, depreciation is provided on straight-line method under
the schedule XIV of the Companies Act 1956.
2. Depreciation is provided on pro-rata basis in the year in which the asset
becomes available for use.

63

3. Where the cost of depreciable assets has undergone a change during the year
due to increase/decrease in long term liabilities on account of exchange
fluctuation, price adjustment, change in duties or similar factors, the
unamortized balance of such asset is depreciated prospectively over residual
life determined on the basis of the rate of depreciation.
4. Internal electrical wiring, fittings etc., are treated as part of buildings and as
such depreciation applicable to buildings is charged thereon.

64

5.1 FINDINGS
After analyzing the financial position of UltraTech Cement Limited and
evaluating its fixed assets management or capital budgeting techniques in respect of
component analysis, trend analysis and ratio analysis. The following conclusions are
drawn from the project preparation.
The progress of UltraTech Cement Limited shows that there is an increase in
Net block considerably over the year that the investment in the net block is in increase
trend .It increased during the year 2010-14 and it has 53.24%.

Regarding to the fixed assets to net worth ratio shows a continuous increase in net
worth and fixed assets. This shows the satisfactory position of the company.

Regarding the long-term funds to fixed assets they show an increase.

Regarding the total investment turnover ratio it is observed sales had an increase
from 2010-14.

Regarding the Fixed Asset turnover ratio, sales had an increased.

Regarding the Return on total assets ratio it has been observed that

There is profit. This shows the favorable position of the company.

From the above study it can be said that the UltraTech Cement Limited overall
financial position on fixed assets is satisfactory.

65

5.2 SUGGESTION

It is suggested to improve the position of the company by effectives utilization of

fixed assets.

Growth rate in fixed assets can be increase by employing more investment.

Total investment to sales can be improved.

Instead of disclosing the combined flows of debtors and loans advances as

decrease/(increase) in trade and other receivables, their separate disclosure will be
more meaningful.

Globalization of economies and the requirement of shares from investors in

capital market, diverse and demanding audience to the company, need a clear and
in-depth in information about the companys financial position in Annual report.

66

5.3 LIMITATIONS
The following are the limitations for the study
1. The study is limited into the date and information provided by the UltraTech
Cement Limited and its annual reports.
2. The report may not provide exact fixed assets status and position of UltraTech
Cement Limited; it may be varying from time to time and situation to situation.
3. This report is not helpful in investing in UltraTech Cement Limited
4. The accounting procedure and other accounting principles are limited by the
changes made by the company, may vary fixed assets performance.

67

5.4 CONCLUSION
The Fixed asset management of UltraTech Cement Limited is quite
comfortable with a judicious mix of debt and equity. The overall assessment of
financial statement signifies efficient utilization of the investments, loans and
advances. The profitability of the company appears to be impressive, as judged by
increase in reserves and surplus.
The management discussions and analysis by Directors report and opinions
expressed by Auditors report through fixed asset management statements is true and
fair view in accordance with the provisions of the companies Acts, and Accounting
standards.
The overall fixed asset management of the company appears to be more than
satisfactory.

68

69