EDUCATIONAL VISIT TO ACC LIMITED

An industrial visit report

Submitted By

Pratik Govindani

Enroll no- BE/20762

In partial fulfillment for the award of the degree of

Bachelor of Business Administration

RDVVUNIVERSITY

(Est. U. JU Act No. 22 of 1956)

Jabalpur-482 001, (M.P.), India

Katni arts and Commerce College

February 2014

Submitted toCA. Sharad Nirankari(H.O.D. BBA)

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DECLARATION BY CANDIDATE

I hereby declare that the industrial visit report entitled to “Educational

visit to ACC limited” submitted by me to Rani Durgavati

Vishwavidyalaya, Jabalpur in partial fulfilment of the requirement for

the award of Bachelor of Business Administration in record of

bonafide industrial visit undertaken by me under the supervision of

security officer and Mr. Sharad Nirankari (H.O.D. BBA). I further

declare that the work reported in this report has not been submitted and

will not be submitted, either in part or in full, for the award or any other

degree or diploma in this institute or any other institute or university

Place: Katni Signature of the candidate

Date:

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RDVVUNIVERSITY

(Est. U. JU Act No. 22 of 1956)

Jabalpur-482 001, (M.P.), India

Katni Arts and Commerce College

BONAFIDE CERTIFICATE

This is to certify that the industrial visit report entitles “Educational

visit to ACC limited” submitted by Pratik Govindani (Reg.No.

BE/20762) to Rani Durgavati Vishwavidyalaya, Jabalpur in partial

fulfilment of requirement for the award of degree of Bachelor of

Business Administration is a record of bonafide industrial visit

undertaken by him/her under my supervision. The training fulfils the

requirement as per the regulations of this institute and in my opinion

meets the necessary standards for submission. The contents of this report

have not been submitted and will not be submitted either in part or in

full, for the awards of any other degree or diploma in this institute or any

other institute or university

Mr. Sharad Nirankari SUPERVISOR (H.O.D. BBA)Date: Date:

Internal Examiner (s) External Examiner (s)

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ACKNOWLEDGEMENT

I have taken efforts in this project. However, it would not have been

possible without the kind support and help of many individuals and

organizations. I would like to extend my sincere thanks to all of them.

I am highly indebted to Mr. Sharad Nirankari for their guidance and

constant supervision as well as for providing necessary information

regarding the project & also for their support in completing the project.

I would like to express my gratitude towards my parents & member of

Katni Arts and Commerce College for their kind co-operation and

encouragement which help me in completion of this project.

I would like to express my special gratitude and thanks to industry

persons for giving me such attention and time.

My thanks and appreciations also go to my colleague in developing the

project and people who have willingly helped me out with their abilities.

Place: Katni

Date: Pratik Govindani

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CONTENT

Chapter No. Page No.Declaration by candidate IiBonafide certificate IiiAcknowledgement Iv

1 Introduction 61.1 Cement 71.2 History 7

1.2.1 Early use 71.2.2 Modern use 7-8

1.2.2.1 Types of modern cement 91.3 Curing 9

2 About the company 102.1 General info 112.2 Companies profile 142.3 Performance highlights 182.4 Financial highlights 252.5 Financial analysis 262.6 Plant layout 332.7 Products offered 392.8 Market strategies 40

3 SWOT analysis 42

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INTRODUCTON

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Cement

Cement is a binder, a substance that 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 resembling modern concrete that was made from crushed rock with burnt lime as binder. The volcanic ash and pulverized brick additives that were added to the burnt lime to obtain a hydraulic binder were later referred to as cementum, cimentum, cäment, and cement.

Cements used in construction can be characterized as being either hydraulic or non-hydraulic. Hydraulic cements (e.g., Portland cement) harden because of hydration, a chemical reaction between the anhydrous cement powder and water. Thus, they can harden underwater or when constantly exposed to wet weather. The chemical reaction results in hydrates that are not very water-soluble and so are quite durable in water. Non-hydraulic cements do not harden underwater; for example, slaked limes harden by reaction with atmospheric carbon dioxide.

The most important uses of cement are as an ingredient in the production of mortar in masonry, and of concrete, a combination of cement and an aggregate to form a strong building 

History

Early use

An early version of cement made with lime, sand, and gravel was used in Mesopotamia in the third millennium B.C. and later in Egypt. It is uncertain where it was first discovered that a combination of hydrated non-hydraulic lime and a pozzolan produces a hydraulic mixture, but concrete made from such mixtures was first used by the Ancient Macedonians and three centuries later on a large scale by Roman engineers. They used both natural pozzolans 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 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.

Modern cement

Modern hydraulic cements began to be developed from the start of the Industrial Revolution (around 1800), driven by three main needs:

Hydraulic cement render (stucco) for finishing brick buildings in wet climates. Hydraulic mortars for masonry construction of harbour work, 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

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prestige buildings from the new industrial bricks, and to finish them with a stucco to imitate stone. Hydraulic lime was favoured 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 “Natural cement" made by burning septarian – nodules that are found in certain clay deposits, and that contain both clay minerals and calcium carbonate. The burnt nodules were ground to a fine powder. This product, made into a mortar with sand, set in 5–15 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 Eddy stone 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 lime, 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 “artificial cement" in 1817. James Frost, working in Britain, produced what he called "British cement" in a similar manner around the same time, but did not obtain a patent until 1822. In 1824, Joseph Aspdin patented a similar material, which he called Portland cement, because the render made from it was in colour similar to the prestigious Portland stone.

Setting time and "early strength" are important characteristics of cements. Hydraulic lime, "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 North fleet, 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.

William Aspdin's innovation was counterintuitive for manufacturers of "artificial cements", because they required more lime in the mix, a much higher kiln temperature (and therefore more fuel), and the resulting clinker was very hard and rapidly wore down the millstones, which were the only available grinding technology of the time. Manufacturing costs were therefore considerably higher, but the product set reasonably slowly and developed strength quickly, thus opening up a market for use in concrete. The use of concrete in construction grew rapidly from 1850 onward, and was soon the dominant use for cements. Thus Portland cement began its predominant role.

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Types of modern cement

1. Portland cement

Portland cement is by far the most common type of cement in general use around the world. This cement is made by heating limestone (calcium carbonate) with small quantities of other materials (such as clay) to 1450 °C in a kiln, in a process known as calcination, whereby a molecule of carbon dioxide is liberated from the calcium carbonate to form calcium oxide, or quicklime, which is then blended with the other materials that have been included in the mix. 

2. Energetically modified cement

The grinding process to produce energetically modified cement (EMC) yields materials made from pozzolanic minerals that have been treated using a patented milling process ("EMC Activation"). This yields a high-level replacement of Portland cement in concrete with lower costs, performance and durability improvements, with significant energy and carbon dioxide savings.

3. Portland cement blends

Portland cement blends are often available as inter-ground mixtures from cement producers, but similar formulations are often also mixed from the ground components at the concrete mixing plant.

Curing (setting)

Cement sets or cures when mixed with water which causes a series of hydration chemical reactions. The constituents slowly hydrate and crystallize; the interlocking of the crystals gives cements its strength. Maintaining high moisture content in cement during curing increases both the speed of curing, and its final strength. Gypsum is often added to Portland cement to prevent early hardening or "flash setting", allowing a longer working time. The time it takes for cement to cure varies depending on the mixture and environmental conditions; initial hardening can occur in as little as twenty minutes, while full cure can take over a month. Cement typically cures to the extent that it can be put into service within 24 hours to a week.

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ABOUT THE COMPANY

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ACC Limited (Formerly the Associated Cement Companies Limited) one of the largest producers of cement in India. Its registered office is called Cement House. It is located on Maharishi Karve Road, Mumbai. The stock price of company contributes in calculating BSE Sensex.

ACC Limited is India’s foremost manufacturer of cement and ready mixed concrete with a countrywide network of factories and sales offices. Established in 1936, ACC is acknowledged as a pioneer and trendsetter in cement and concrete technology. Among the first companies in India to include environment protection as a corporate commitment, ACC regularly wins accolades for best practices in environment management at its plants and mines, and for demonstrating good corporate citizenship. The quality of its products and customer services make ACC the most preferred brand in the Indian cement industry. ACC Limited is part of the worldwide Holcim Group.

The management control of company was taken over by Swiss cement major Holcim in 2004. On 1 September 2006 the name of The Associated Cement Companies Limited was changed to ACC Limited. The company is only Cement Company to get Super brand status in India.

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ACC headquarters “Cement House” in Mumbai

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Pioneer of Indian Cement Industry with a Rich Heritage

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Company’s Introductory Profile

ACC (ACC Limited) is India's foremost manufacturer of cement and concrete. ACC's operations are spread throughout the country with 17 modern cement factories, more than 40 Ready mix concrete plants, 21 sales offices, and several zone offices. It has a workforce of about 9,000 persons and a countrywide distribution network of over 9,000 dealers.

Since inception in 1936, the company has been a trendsetter and important benchmark for the cement industry in many areas of cement and concrete technology. ACC has a unique track record of innovative research, product development and specialized consultancy services. The company's various manufacturing units are backed by a central technology support services centre - the only one of its kind in the Indian cement industry.

ACC has rich experience in mining, being the largest user of limestone. As the largest cement producer in India, it is one of the biggest customers of the domestic coal industry, of Indian Railways, and a considerable user of the country’s road transport network services for inward and outward movement of materials and products.

Among the first companies in India to include commitment to environmental protection as one of its corporate objectives, the company installed sophisticated pollution control equipment as far back as 1966, long before pollution control laws came into existence. Today each of its cement plants has state-of-the art pollution control equipment and devices.

ACC plants, mines and townships visibly demonstrate successful endeavours in quarry rehabilitation, water management techniques and ‘greening’ activities. The company actively promotes the use of alternative fuels and raw materials and offers total solutions for waste management including testing, suggestions for reuse, recycling and co-processing.

ACC has taken purposeful steps in knowledge building. We run two institutes that offer professional technical courses for engineering graduates and diploma holders which are relevant to manufacturing sectors such as cement. The main beneficiaries are youth from remote and backward areas of the country.

ACC has made significant contributions to the nation building process by way of quality products, services and sharing expertise. Its commitment to sustainable development, its high ethical standards in business dealings and its on-going efforts in community welfare programmes have won it acclaim as a responsible corporate citizen. ACC’s brand name is synonymous with cement and enjoys a high level of equity in the Indian market. It is the only cement company that figures in the list of Consumer Super Brands of India

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Manufacturing Excellence

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Nationwide Presence

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14 cement plants- capacity of 30 million tons/annum

21 sales units, 66 area offices 55+ RMX plants 10,000 dealers

Performance Highlights

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SALES VOLUME & GROWTH

NET SALES, OPERATING EBITDA & OPERATING EBITDA MARGIN

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PROFIT BEFORE TAX & PROFIT AFTER TAX

CAPITAL EMPLOYED &RETURN ON CAPITAL EMPLOYED

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NET WORTH & RETURN ON NET WORTH

DIVIDEND PER SHARE, EARNING PER SHARE & DIVIDEND PAYOUT RATIO*

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NET CASH GENERATED FROM OPERATIONS

CEMENT PRODUCTION & CAPACITY UTILIZATION

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NET FIXED ASSETS & ASSET TURNOVER RATIO

EMPLOYEES AT THE YEAR END &TURNOVER PER EMPLOYEE

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BOOK VALUE PER SHARE

ECONOMIC VALUE ADDED (EVA)

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Cost & Profit as a Percentage of Total Income

Financial Highlights

Crore

2012 2011 2010 2009 2008 2007 2006 2005* 2004-05 2003-04

INCOME STATEMENT

Net Sales 11,130 9,430 7,710 7,967 7,126 6,905 5,803 3,221 3,902 3,284

Operating EBIDTA 2,196 1,921 1,812 2,644 1,899 1,993 1,717 616 715 496

Profit before Tax 1,451 1,540 1,461 2,294 1,737 1,930 1,620 684 444 254

Profit after Tax 1,061 1,325 1,120 1,607 1,213 1,439 1,232 544 378 200

BALANCE SHEET

Net Worth 7,383 7,192 6,469 6,016 4,928 4,153 3,142 2,130 1,585 1,319

Borrowings 163 511 524 567 482 306 771 1,071 1,408 1,353

Net Fixed Assets 6,175 6,573 6,548 6,113 4,717 3,741 3,396 3,047 2,835 2,451

Cash and cash equivalents# 3,037 2,832 2,288 1,876 1,438 1,489 1,080 348 57 114

Current Assets 3,198 3,791 2,851 2,458 3,116 2,426 2,006 1,496 1,251 1,061

Current Liabilities 3,863 3,768 3,746 3,114 2,766 2,221 1,672 1,335 1,076 941

Capital Employed 8,063 8,221 7,355 6,932 5,746 4,791 4,234 3,508 3,301 2,982

SIGNIFICANT RATIOS

Operating EBIDTA/ Net sales 20% 20% 24% 33% 27% 29% 30% 19% 18% 15%

Return on Capital Employed 21% 18% 20% 34% 29% 36% 41% 19% 16% 12%

Return on Net Worth 14% 18% 17% 27% 25% 35% 39% 34% 24% 15%

Current Ratio 0.83 1.01 0.76 0.72 1.00 0.99 1.15 1.06 1.13 1.11

Debts Equity Ratio 0.02 0.07 0.08 0.09 0.10 0.07 0.25 0.50 0.89 1.02

Price Earnings Ratio 25.15 16.29 18.04 10.23 7.39 13.74 16.44 17.74 17.25 21.62

Net worth per Share (`) 393 385 345 320 263 221 168 115 89 74

Dividend per share (`) 30.00 28.00 30.50 23.00 20.00 20.00 15.00 8.00 7.00 4.00

Basic Earnings per Share (`) 56.52 70.59 59.66 85.60 64.63 76.75 66.02 30.02 21.23 11.68

CASH FLOWS

Net cash provided by/ (used in)

Operating activities 1,577 1,571 1,935 2,397 1,708 2,023 1,422 644 598 478

Investing activities (311) (258) (812) (1,505) (1,170) (824) (483) (181) (519) (415)

Financial activities (1,066) (768) (621) (455) (297) (1,075) (423) (419) (87) (33)

*Pertains to 9 months period#Cash and cash equivalents includes investment in short term deposits and mutual fundsCurrent maturities of Long-Term Borrowings have been included in Borrowings excluding the same from current liabilities.

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Financial Analysis of ACC Limited

The following table set forth the breakup of the Company’s expenses as part of the Revenue from operations (Net)

Figures in ` Crore

2012 % of Netsales 2011 % of Net

SalesRevenue from operations (net) 11,357.96 100% 9,660.29 100%Other income 264.82 2% 191.91 2%Cost of material consumed 1,605.52 14% 1,140.30 12%Purchase of stock-in-trade 158.75 1% 169.78 2%Changes in inventories of finished goods, work-in-progress 20.02 0% (94.39) -1%

stock-in-tradeEmployee benefits expense 616.65 5% 533.01 5%Power and fuel 2,382.26 21% 2,183.30 23%Freight and Forwarding expense 2,233.36 20% 1,894.44 19%Finance costs 114.65 1% 96.91 1%Depreciation and amortization expense 558.88 5% 475.30 5%Other expenses 2,145.82 19% 1,913.13 20%Profit before exceptional item and tax 1,786.87 16% 1,540.42 16%

Note – On account of amalgamation of wholly owned subsidiaries, ACC Concrete Limited and Encore Cement and Additives Private Limited with the Company, the figures for the year ended December 31, 2012 are strictly not comparable with previous year.

1. Revenue from operations (net):

Figures in ` Crore2012 2011 Change Change%

Cement and Clinker 10,513.38 9,417.22 1,096.16 12%Ready Mix Concrete 605.80 - 605.80 100%Sale of services 11.27 12.40 (1.13) -9%

Other operating revenue 227.51 230.67 (3.16) -1%TOTAL 11,357.96 9,660.29 1,697.67 18%

Revenue from operations has increased due to following:-

Net sale of cement and clinker has registered a growth of 12% mainly on account of improved sales realisation. The Company has achieved a sales volume of 24.11 million tonnes of cement during the year. This represented only marginally growth of 1.60% owing to difficult market conditions in the latter part of the year.

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2. Other Income: Figures in ` Crore

2012 2011 Change Change%Other income 264.82 191.91 72.91 37.99%

The increase in other income is attributable to return on surplus cash invested.

3. Cost of material Consumed: Figures in ` Crore

2012 2011 Change Change%Cost of material consumed 1,605.52 1,140.30 465.22 40.80%

Cost of material consumed has increased due to following:-

Cement production during the current year at 24.12 million tonnes recorded an increase of 3% over previous year. Escalations in major input cost such as Gypsum, slag and fly ash.

3. Purchase of Traded goods: Figures in ` Crore

2012 2011 Change Change%

Cement 92.20 169.78 (77.58) -46%Ready mix concrete 66.55 - 66.55 100%

TOTAL 158.75 169.78 (11.03) -6%

Previous year figures of traded cement includes an amount of 73 Crore, relating to cement purchased from subsidiary company Encore Cement, which is amalgamated during the year.

4. Power and Fuel: Figures in Crore

2012 2011 Change Change%

Power and fuel 2,382.26 2,183.30 198.96 9.11%

Power and fuel cost has increased marginally due to following:-Increase in power tariff by 13.60%. During the current year consumption of imported coal has increased due to short receipt of linkage coal. The impact of increase in power tariff and coal cost is partially offset by improvement in consumption norms and improved efficiency of equipment. All of these have resulted in reduction of power consumption from 92.92 kwh/t of cement to 87.51 kwh/t. Clinker production decreased by 3% over the previous year

6. Employee benefits expense:

Figures in Crore

2012 2011 Change Change%Employee benefit expense 616.65 533.01 83.64 15.69%

Employee benefit expenses increased due to normal increments in salary.

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The Company has recognized an additional expense of 13.04 Crore as compared to previous year, relating to provision for retirement benefits. The additional expense is on account of change in actuarial assumption factors.

7. Freight and Forwarding expense: Figures in Crore

2012201

1 Change Change%Freight and Forwarding expense 2,233.36 1,894.44 338.92 17.89%

Freight and Forwarding expense has increased mainly due to increase in freight rates by 12% from` 742.04 per ton to ` 829.52 per ton. The increase was mainly on account of higher diesel prices and surcharges imposed by railways.

8. Other Expenses: Figures in Crore

2012 2011 Change Change%Consumption of packing materials 381.53 344.94 36.59 10.61%Repairs 515.74 455.45 60.29 13.24%Royalties 130.85 138.19 (7.34) -5.31%Discount, Rebates and Allowances 83.16 84.00 (0.84) -1.00%Rates and Taxes 115.66 109.29 6.37 5.83%Advertisement 102.58 106.90 (4.32) -4.04%Excise Duties 88.47 103.94 (15.47) -14.88%Rent 31.59 18.96 12.63 66.61%Insurance 24.67 18.58 6.09 32.78%Consumption of stores and spares 33.03 36.04 (3.01) -8.35%Miscellaneous Expenses 638.54 496.84 141.70 28.52%Total 2,145.82 1,913.13 232.69 12.16%

Other expenses have increased on account of following:-

Consumption of packing material cost has increased mainly due to increase in price of bags. Repairs expenditure has increased on account of maintenance activities carried out at various locations. Rent expense increased by 12.44 Crore due to amalgamation of ACC concrete Limited. Miscellaneous expense has gone up due to increase in third party services on account of trainings, tax, IT, various excellence projects and others.

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9. Depreciation and Amortization expense:

Figures in Crore

2012 2011 Change Change%

Depreciation and Amortization expense 558.88 475.30 83.58 17.58%

There is increase in depreciation on account of followings:-

Effective January 01, 2012, the Company has with retrospectively effect changed its method of providing depreciation on fixed assets pertaining to its Captive Power Plants from the ‘Straight Line’ to the ‘Written down Value’. Accordingly additional depreciation charge for the year ended December 2012 is 28.70 Crore. Further, additional depreciation charge of 335.38 Crore relating to the period up to December 31, 2011 has been disclosed as an exceptional item.

9. Finance costs:

Figures in Crore

2012 2011 Change Change%

Finance cost 114.65 96.91 17.74 18.31%

Finance costs comprise interest on debenture, interest on income tax and other interest. Finance cost has increased due to increase in interest on income tax.

10. Fixed Assets:

Figures in Crore

2012 2011 Change Change%

Tangible assets 5,858.86 6,206.26 (347.40) -5.60%

Intangible assets 5.01 1.27 3.74 294.49%Capital Work in progress 311.30 365.63 (54.33) -14.86%

Effective January 01, 2012, the Company has with retrospectively effect changed its method of providing depreciation on fixed assets pertaining to its Captive Power Plants from the ‘Straight Line’ to the ‘Written down Value’ method. Accordingly, the Company has recognized an additional depreciation charge of ` 364.08 Crore. Capital work-in-progress has gone down mainly on account of capitalisation of Wadi Captive Power Plant.

11. Investments: Figures in Crore

2012 2011 Change Change%

Non-current investments 194.67 445.10 (250.43) -56%Current investments 2,358.88 1,179.85 1,179.03 100%TOTAL 2,553.55 1,624.95 (928.60) -57%

Non-current investments have decreased due to followings:

Decrease in investment by 261.78 Crore due to amalgamation of subsidiary Companies, ACC Concrete Limited and Encore Cement and Additives Private

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Limited. During the current year, the company has acquired 100% stake in Singhania Minerals Private Limited for a total consideration of 5 Crore. Current investment has increased due to increase in investments of surplus cash.

13. Loans and Advances:

Figures in Crore

2012 2011 Change Change%

Long-term loans and advances 564.20 447.88 116.32 26%Short-term loans and advances 323.29 332.32 (9.03) -3%TOTAL 887.49 780.20 107.29 40%

Long-term loans and advances increased mainly due to increase in capital advances for Jamul expansion project.

13. Inventories:

Figures in Crore

2012 2011 Change Change%Stores & Spare Parts and Packing Material 286.02 236.37 49.65 21%Other inventories 847.53 863.17 (15.64) -2%TOTAL 1,133.55 1,099.54 34.01 3%

Inventories have increased due to followings:

Packing material inventory increased due to increase in price of Bags price by 7%. Increase in stores & spares parts are due to planned maintenance activity for next year. Other inventories have gone down mainly on account of decrease in finished goods.

14. Trade receivables:

Figures in Crore

2012 2011 Change Change%Trade receivables 303.45 187.74 115.71 62%

The average collection days outstanding for cement sales as on December 31, 2012 is 4.59 as compared to 4.10 as on December 31, 2011 and similarly for RMX sales is 45 days.

16. Other assets: Figures in Crore

2012 2011 Change Change%

Other non-current assets 165.84 56.14 109.70 195%Other current assets 28.80 15.00 13.80 92%TOTAL 194.64 71.14 123.50 174%

Other non-current assets have gone up due to accrual of incentive receivables from

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Government under various incentives schemes.

17. Long-term borrowings:

Figures in Crore

2012 2011 Change Change%

Secured borrowings 82.00 500.00 (418.00) -83.60%Unsecured borrowings 3.03 6.08 (3.05) -50.16%TOTAL 85.03 506.08 (421.05) -83.20%

During the current year, the Company has bought back non-convertible debentures of 343 Crore and current maturities of debentures of 75 Crore is shown under other current liabilities.

18. Other Liabilities: Figures in Crore

2012 2011 Change Change%

Other Long-term liabilities 381.09 372.26 8.83 2.37%Other current liabilities 1,515.81 1,517.06 (1.25) -0.08%TOTAL 1,896.90 1,889.32 7.58 0.40%

Other liabilities have increased marginally as compared to previous year.

19. Provisions: Figures in Crore

2012 2011 Change Change%

Long-term provisions 157.21 123.06 34.15 28%

Short-term provisions 1,226.88 1,049.94 176.94 17%

TOTAL 1,384.09 1,173.00 211.09 18%

Long-term provisions have gone up due to increase in provision for employee benefits. The increase is on account of change in actuarial assumption factors.

Short term provisions have increased mainly due to increase in provision for Income Tax by 127.07 Crore as compared to previous year.

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20. Trade Payables:

Figures in Crore

2012 2011 Change Change%Trade payables 660.49 710.26 (49.77) -7.01%

Trade payables have decreased marginally as compared to previous year.

21. Cash Flow: Figures in Crore

2012 2011 Change Change%Net cash flow from operating activities 1,577.00 1,571.31 5.69 0.36%

The net cash from operating activities is marginally increased as compared to previous year due to followings:-

The operating profit before working capital changes and income tax during current year is 2,228 Crore, as compare to 1,909 Crore in previous year, as a result of higher operating profits during the current year. Cash outflow on income tax paid is 206 Crore, as compare to 416 Crore in previous year. During the current year working capital is increase by 446 Crore, as compare to 78 Crore decrease in the previous year.

Figures in ` Crore2012 2011 Change Change%

Net cash flow from investing activities 310.65 258.24 52.41 20.30%

During the current year, net cash from investing activities has increased due to following:-

Increase in outflow for purchase of fixed assets mainly on account of Capital advances for Jamul expansion project. Increase in return on investments of surplus cash by 58 Crore.

Figures in ` Crore2012 2011 Change Change%

Net cash flow from financing activities 1,066.02 768.32 297.70 38.75%

During the current year, the Company has bought back non-convertible debentures of 343 Crore.

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Plant layout

Acc cement plant

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Plant layout

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ACC has invested continuously and considerably to upgrade the plant infrastructure as well as cement manufacturing techniques to increase economic as well as environmental efficiency.

To reduce source emissions, the company has installed 11 bag houses, 85 bag filters and 2 ESPs (Electro‐Static Processors). These have resulted in drastic reduction in the stack emission levels, which are now maintained at less than 20 ppm. In fact, not only do the bag houses filter the emissions, they also feed it back to the manufacturing process. This not only reduces emissions, but also makes great economic sense.

The plant has installed a monitoring station to constantly monitor SOx, NOx and SPM levels.

Fugitive emissions are a bigger cause for concern. ACC has put in place dust suppression systems like water sprinklers to tackle these emissions, whether on the conveyor which carries the quarried limestone from the mines to the plant, or at the enclosed stockyards which store coal, gypsum and fly ash. However, current efforts to curb fugitive emissions might need augmentation and further improvements.

The packing area also poses a challenge in terms of fugitive emissions. Every time, a cement bag is transferred, be it along the conveyor or from the conveyor on to the truck, there is some amount of leakage. ACC management could explore and seriously pursue options like using paper bags or despatching cement in bulk quantities. (The enclosed bunkers that are used to bring fly ash

Plant goes back empty. These could be used to despatch bulk cement.) ACC is trying out packaging using laminated bags.

The company’s greening efforts even within the plant premises have ensured a cleaner, relatively dust‐free environment.

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Bag Houses: Reducing & Re using ©ACC Ltd‐

Covered Conveyors, but emissions fugitive ©ACC Ltd

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Alternate Fuels & Raw Materials (AFR)

Pine Needles: An Alternative Fuel?

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The concept of AFR, though practised by Holcim for the last three decades, is a recent introduction to ACC. It involves substituting mainstream non renewable fuel resources like coal with replenishable alternate fuels. A subsidiary activity of AFR is waste co‐processing which is basically a means of waste management.

Under the mainstream AFR activities, currently the plant is using mill scale (a reject from steel rolling mills) as a substitute for iron ore. It is also assessing the feasibility of harnessing the potential of pine needles as an alternative fuel. However, despite the high calorific value of pine needles, there are several limiting factors for its use. Collection of pine needles from the forest floor is one of the major issues of concern. Also, due to the voluminous nature of the needles, the cost of transportation increases. The pine needles are extremely inflammable, hence a safety issue. Processing the pine needles for use as a source of fuel for the kilns would add further to the cost.

The AFR division is exploring other options for alternative fuels such as rice husk, jatropha, castor, etc. There have been no significant breakthroughs as yet.

Waste co‐processing, however, provides a wonderful business opportunity for ACC. The AFR division spent its first few years in self‐education on waste co‐processing and then educating and making the state Government, MoEF and other stake‐holders aware of the potential of cement plants in waste co‐processing. It also inventorized the type of waste that could be directly used in the kiln without impacting on the clinker quality or environmental emissions.

The plant follows strictly all national norms for handling waste that is delivered for co‐processing. Co‐processing is a service which ACC extends to companies generating waste. At present, 10‐ 15 tonnes of waste is co‐processed daily. The transportation of the waste to the plant is the responsibility of the waste generator. On entry, the waste is checked physically; a spot analysis is undertaken, and if it is found to be of a suitable, previously‐agreed‐upon nature, then it is let in the plant campus and is sent for co‐processing.

The team was informed that currently; ACC has agreements with Hindustan Unilever Limited (HUL) and the Kullu Municipality to co‐process their waste. In the case of HUL, ACC co‐processes all trade rejects and expired products from HUL’s depot at Parwanoo, located 140 kms away. The Kullu Municipality sends its sorted municipal wastes, especially plastics, to the ACC plant.

The waste generated in the plant itself, which includes paper wastes and waste oily rags and cloths, is also co‐processed. However, since the household waste generated in the township as well as in the surrounding villages is not segregated, it is not yet used for co‐ processing. This is something which the ACC management might want to seriously consider, as it will also help in reducing the monkey menace, which township residents and local communities keep complaining about. Besides, given the available opportunity for waste co‐processing, an integrated waste management system for the entire township would go a long way in developing it as a model township.

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Products offered

Cement

Concrete products

Ready mix concrete

Clinker

Marketing strategy of ACC Cements Limited

1. Segmentation:-The Company has segmented the market geographically. It sells its products all over India with major presence in northern region

2. Pricing strategy

Before deciding the price of the cement company has considered the following points:--

1. Cost factor:-

Manufacturing cost

Transporting cost

Storing and material handling

Other cost

Officer expenses

Other expenses

Tax and interest

2. Competitor’s price and offering

Marketing Strategy

Company conducts market surveys to identify market trends and customer’s response, company position in the market etc. There is R and D department which continuously trying to improve the quality of the product at the minimum cost and trying to meet the demand of the customer.

Marketing Strategy for Competitors

Company always keeps an eye over its competitor’s activities and its offerings likedifferent promotional schemes, product price etc. It also takes proper action according tocompetitors strategy.

Distribution Strategy

The company is distributing cement by following ways:-

1. Direct to consumer2. Depot:-

Whole sellerRetailer

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Director General of sales and disposal

1. Tender sales

2. Government department

Non trading sales

1. Wagon load

2. Institutional sales Method of developing dealers:-

Company conducts the market survey also to motivate the sub dealer and advertise the programmer. The company takes profile of the dealers and gives dealership only to those in a particular area where the company is not having already existing dealer.

Objectives of marketing strategies

1. To increase sales in high realization

2. To develop stockiest network consisting of retailer or final outlet which directly sells?

3. Increasing sales of branded cement i.e. Acc white cements

4. Marketing distribution network more efficient and cost effective. The company has a dedicated team of highly skilled professionals and experienced application engineering. They are functioning in an advisory capacity. Besides handling their constructional problem they sell offering all kind of assistance in the selection of the right cement for different application to ensure cost effective, durable and safe construction.

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SWOT ANALYSIS

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SWOT

STRENGTH

WEEKNESS

OPPORTUNITIES

THREATS

Strengths

1. It is having a good image and brand loyalty among consumers.

Service is good

2. They have same price prevailing for wholesale at dealers / stockiest retailers end.

Weakness

1. The competitors are doing much promotional activity rather than acc limited that’s why it facing more problems in selling of product in the market.

2. Lack of awareness programmes for consumers

Opportunity

1. Rapid growth is taking place in Bihar and Madhya Pradesh.2. People are opting for more stable structures and intensive use of cement is

taking place, even government is spending heavily on infrastructure projects. Thus, this is the right time to fully tap these markets.

3. As Indian core industry is also growing at rate of nearly 10% per annum, it is having a good future.

4. Foreign direct investment in infrastructure sector is going to increase in coming years, which will increase the demand of cement.

5. Roads are undergoing through the transformation process through which the traditional method of road building will be replaced by modern concrete roads.

Threats

1. Large number of players in cement industry makes it more competitive for acc to carefully price its product and at the same time satisfy its dealers and customers.

2. Players such as jaypee cement, prism cement, and Birla Samrat are eating up considerable market share.

3. due to India’s exponential growth many new international cement companies are expected in coming years which will bring a tide of change and can start price war.

4. The emergence of small players in this market may increase the competition and start the malpractices, and heavy discounts to retailers. They can also influence many retailers by giving better profit margin, and other benefits.

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Thank you

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