TRAINING REPORT

ON

WORKING CAPITAL MANAGEMENT IN ACC LTD GAGAL CEMENT

WORKS

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF
DEGREE OF
MASTER OF BUSINESS ADMINISTRATION (M.B.A.)
(2020-2022)

PROJECT GUIDE : SUBMITTED BY :

MR. VIKRAMJEET SINGH DEEPANSH GUPTA
MANAGER FINANCE M.B.A. 2ND YEAR
GAGAL CEMENT WORKS ROLL NO :- 200521221220028
BARMANA (ACC LTD.)

SESSION (2020-2022)
Himachal Pradesh University Business School
-Summerhill (H.P.)
171005

1
2
 DECLARATION

I Deepansh Gupta do here by declare that the training report on study conducted on “Working
capital analysis” in GAGAL CEMENT WORKS Barmana submitted by me in the partial
fulfillment of M.B.A. (Master of Business Administration) Himachal Pradesh University
Business School, Shimla is the original work.

Whatever Data has been disclosed in the report are authentic to the best of my
knowledge. I have not submitted this training report to any other university ever before.

Deepansh Gupta
MBA HR&Finance
HPUBS(Shimla)

3
 GAGAL CEMENT WORKS

P.O.BARMANA, BILASPUR
HIMACHAL PRADESH
174013

THE ASSOCIATED CEMENT COS. LTD.

TABLE OF CONTENTS

 ACKNOWLEDGEMENT
4
 EXECUTIVE SUMMARY
 HISTORY OF INDUSTRY
 ASSOCIATED CEMENT COMPANY LIMITED
 CORPORATE PROFILE OF ACC LTD.
 ACC FOUNDATION
 ENVIRONMENTAL POLICY OF ACC LTD.
 MISSION & VISION OF ACC LTD.
 PERFORMANCE AND EVENTS
 ARTICHETS OF SUCCESS
 GAGAL CEMENT WORKS
 INTRODUCTION
 GEOGRAPHICAL DETAIL
 CONTRIBUTION TO GOVERNMENT
 QUALITY POLICY
 ENVIRONMENTAL POLICY
 PRODUCTION SYSTEM IN GAGAL CEMENT WORKS
 MANUFACTURING PROCESS
 POWER
 CEMENT PLANT
o DEPARTMENTATION
o FINANCE DEPARTMENT
 ACCOUNTING SECTION
 COST SECTION
o ANALYSIS OF WORKING CAPITAL
 RATIO ANALYSIS
 FUND FLOW ANALYSIS
 WORKING CAPITAL BUDGET

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 o NEED AND OBJECTIVE OF STUDY
o RESERCH METHODOLOGY
o DESIGN OF STUDY
 REFRENCES
 APPENDICES

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 ACKNOWLEDGEMENT

I offer my gratitude to those who have spend their precious time, curiosity and continued
encouragement through study and for the fulfillment of my On-Job Training IN GAGAL
CEMENT WORKS( ACC LTD.) DISTT – BILASPUR (H.P).

I would like to thanks Mr. Vikramjeet Singh (Manager Finance) and Mr. Rajinder Thakur
(Deputy General Manager) at Barmana allowing me to undertake training in their renowned
organization and permitting to work on Analysis of Working capital at this company.

I will indebted toward Mr. Rajinder Thakur and his staff for co-operative guidance and helping
me to find out relationship between books and its practical application and to learn a lot about
different aspects of the company. Under their guidance I succeeded in doing my Internship
training program.

Deepansh Gupta
ROLL No. 200521221220028

7
 Executive Summary

As a matter of Knowing how things look like in practical sense every M.B.A. student has to
undergo training in an approved business organization for the tenure of not less than eight weeks.
I got a chance to seek more and more knowledge under the guidance of professional managers.

On the completion of M.B.A. Degree students have hand on experience that will help for
facing challenging jobs under such competitive environment.

During the training tenure I visited various departments of GAGAL CEMENT WORKS
to study their process of functioning & organization structure. I have completed my project
successfully in “The study of working capital analysis” under the guidance of Mr. VikramJeet
Singh (Asst. Manager Finance).

During the above course tenure Mr. Narender Kumar (Salary Officer) helped me for
getting knowledge concerning with taxation and specially I would like to thank Mr. Vikramjeet
Singh for allowing me to work in finance department.

8
 HISTORY OF ACC LTD.

The history of cement industry is the story of civilization from primitive caves of prehistoric
times to the skyscrapers of the modern age. It is said that the use of cement is from period use of
fire Egyptians utilize gypsum plaster as cementing material as early as 3000 BC in building their
monuments.

Material cement has existed the roman empire joseph Arpdin invited Portland cement in
1824 after the discovery of hydraulic properties of time, patented his product which was call
Portland cement. Portland stone which is lime stone quarried on Portland bill in dorsed, England.
Modern cement is outcome of effort of chemist’s technologist and architects.

Cement is binding agent having hydraulic properties, which after hydration gives the
setting properties strengthening concrete. Intergrading, clinker, gypsum, and pozzolanic material
in a proper ratio to get protland pozzolane cement manufacture cement.

Cement essentially made up of material containing calcium silicon, aluminum and iron.
Limestone, marl and chalk are major source of clay shale, quartzite, bauxite iron ore provide
silicon, aluminum and components.

MAJOR COMPANIES IN THE CEMENT INDUSTRY ARE:-

 The Associated Cement Companies Ltd.

 Birla Group
 Larsen and Turbo
 J.K.Group
 India Cement
 Gujrat Ambuja

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 CORPORATE PROFILE OF ACC LTD.

ACC is a very fond acronym in India, often assuming synonimity with cement . With a
annual cement capacity of over 12 million tones, the company’s operation are spread regional
marketing offices, several area offices, and a dedicated band of people from all corners of
India. Thus in industrial backdrop of India ACC stands for multi-product, multi-unit
company.

The companies various businesses are supported by a powerful, in-house research and
technology backup facility-the only one of its kind in the Indian cement industry.

ACC has also extended its services to overseas, to the middle East, Africa and South
America, where it has provided technical and management consultancy to a variety of
consumers, and also helps in the operational maintenance of cement plants abroad.

In addition to its modernization and expansion, ACC has earmarked on an all round
internal improvement program through introduction of various world class benchmarking and
total productivity maintenance practices. Through an organization wide business process
engineering, it has able to achieve revenue enhancement and cost savings by optimally
aligning business practices with customer needs. It would also result in further simplification
of the internal management processes and delayering and decentralization
for fast decision making purposes.

Today, ACC stands poised to enter the new millennium, ready to seize the opportunities
and face the challenges that lie ahead. With more than six decades of experience ACC has a
rare perspective of sound business strategies, with which ACC in poised to maintain its
leadership in cement industry.

`
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 A GLANCE ON THE HISTORY ON SUCCESS

The Associated cement company Ltd. is known for the largest manufacturer of cement. So it
comes under the leading companies in India for producing more than 1/4th of national output.
ACC Ltd. company was duly registered under Indian companies Act 1956, having its registered
office at cement house, 121 maharishi Karv road, Mumbai-400020.

It has 14 cement plants spread all over the country and has various subsidiaries and other
overseas projects. Each business is concerned with the objective of rising business through
customer satisfaction and continuous improvement in quality of the product.

Initially when cement was introduced in 1914, south India industry Ltd. started
first cement plant near Madras.This plant was closed down after a few months due to shortage of
labors and lack of knowledge in manufacturing of cement. It has modernization and expansion
projects at lakheri in Rajasthan and Bargarh and has one project for additional capacity at new
wadi in Karnataka.

In 1936 with the effort of Mr. Dinshaw a group of companies formed

Associated companies Ltd.
In 2005 Holcim group of swizerland made take over of ACC Ltd. and this time whole
management of ACC Ltd. is in the hands of Holcim groups chairman MR. M.L.NARULA.

11
 ACC FOUNDATION

Many men of outstand initiative and foresight contributed towords the development of cement
industry in India. About 71 years ago in 1936 a number of companies belonging to the house of
Tata Khatias and Kellick, Nixon combined to from “The Associated Cement Companies Ltd.”
great industrialist and patriot Mr. F.E.Dinhsaw was mainly responsible into a single organization.

The objective of this merger was not to attain monopolistic position but to make and
deliver cement as cheaply as possible. Mr. Dinshaw added for new factories in ACC group from
1929 to 1936. During Second World War, the cement was delivered as essential commodities
under the defenses of Indian Rule and though under price and distribution control. The cement
industry gets further impetus under the leadership of ACC.

ENVIRONMRNTAL POLICY OF ACC LTD.

 Ensure continual improvement in environment performance by carrying out periodic

review of action plan.
 Prevent pollution and minimize fugitive emissions.
 Comply with all applicable legal and regulatory reguirements.
 Create environmental awareness among employee and community at large.
 Minimize the waste generation at source reutilize the work if generated.
 Conserve energy and mineral resource.

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 MISSION AND VISION OF ACC LTD.

QUALITY:- To make continuous improvement in the quality of our product and services and
add some essential features for customer satisfaction and ensure their supply at fair prices.

PROFITABILITY:- To achieve fair and reasonable return on capital employed by making

optimum utilization of available resources and increasing productivity & effectiveness
throughout the company.

RESPONSIBILITY:- To fulfill our obligation to society, specifically in the area of rural

development and in safeguarding.

LEADERSHIP:- Maintain our leadership of the Indian cement industry through the country
modernization and expansion of our manufacturing facilities and activities and through the
establishment of a wide and efficient marketing network.

GROWTH:- Ensure a steady growth of business by strengthening our position in the cement
sector.

EQUITY:- Promote and maintain fair industrial relation and environment for the effective
involvement, welfare and development of staff at all levels.

VISION OF ACC IS TO BE A WORLD CLASS CORPORATION WITH DIVERSE

BUSINESS BUILT AROUND ACC’sunita CORE COMPETENCIES AND KNOWLEDGE
BASE IN CEMENT REFACTOREIES ADVANCED MATERIAL ENGINEERING
GEOLOGY MINING AND RESEARCH.

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 PERFORMANCE AND EVENTS

 Change of name to ACC Limited with effect from september1,2006.

 Production and sale of cement touched an all-time high of 18.73 million tones and 18.86
million tones respectively during the year 2021, growth of 10% and 8% respectively as
compared to the corresponding previous period.
 Total group income for the year 2021 at Rs.5976 crore, up 28% over the corresponding
previous period.
 Profit before Exceptional items and tax for the year ended December 31,2021 for the
group was Rs1464 crore as against Rs435 crore in the nine months period ended
December 31,2020.
 Profit after Tax for the year ended December 31,2021 for the group was Rs 1240 crore as
against Rs514 crore in the nine months period ended December 31,2020.
 Augmentation of cement grinding capacities at Tikaria, Kymore, Wadi, Sindri and
Madukkarai.
 Modernization and expansion projects at Lakheri and Bargarh.
 Project for additional capacity at New Wadi in Karnataka.
 Captive power generating capacities being added at Lakheri, Kymore, Bargarh and Wadi.
 Increased focus on ready Mix Concrete business-major growth plans finalized.
 Technical Support Services centre to achieve technical excellence in plant operations and
project management.
 ACC pledges support to the national effort against HIV/AIDS.
 Synergies with HOLCIM further strengthened during the year.

14
Region (North) Region (East)
GAGAL

LAKHERI TIKARIA

DCW

SIND
RI
KYMORE CHAIBAS
A
BARGARH

CHANDA JAMUL

Region (South West)

WADI

MADUKKARAI

15
 ARTICHETS OF SUCCESS

NO NAME OF DIRECTOR NATIONALITY

1.
MR.N.S.SEKHARIA (CHAIRMAN) INDIAN
2. SWISS
MR.PAUL HUGENTOBLER (DEPUTY CHAIRMAN)
3. INDIAN
Mr. M.L.NARULA (MANAGING DIRECTOR)
4. INDIAN
MR.A.L.KAPUR
5. INDIAN
MR.S.M.PALIA
6. INDIAN
MR.NARESH CHANDRA
7. SWISS
MR.MARKUS AKERMAN
8. INDIAN
MR.D.K.MEHTROTRA
9. INDIAN
MR.R.A.SHAH
10. INDIAN
Dr.NIRMALYA KUMAR
11. INDIAN
MR.SHAILESH HARIBHAKTI
12. INDIAN
MR.ANIL SINGHVI

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13. INDIAN
MR.A.K.JAIN (WHOLETIME DIRECTOR)

GAGAL CEMENT WORKS

INTRODUCTION

Gagal Cement Works implemented & obtained ISO14001 Environment System, ISO9001:2000
Quality Management System & OHSAS18001 Occupational Health and Safety Management
System Certification.

The Gagal Cement Works was set up in the year

1984 wit the aim to serve the market of Himachal Pradesh, Punjab, Uttaranchal, Utter
Pradesh and Jammu & Kashmir. ACC was the first to put up large scale industry house in a
backward area of Himachal Pradesh. Gagal-1 unit started with an annual capacity of 0.56 Million
Tones(with one kiln of 1700 TPD). Gagal-11 unit of 1 Million Tone capacity (with one kiln of
3300 TPD) was installed in 1994-1995. Today Gagal Cement Works has risen to produce 3.2
million tones of blended cement and is like to increase to 4.0 Million Tones in the current
financial year 2020 to 2021. Gagal Cement Works is market leader in northern region and
maintains its market share in all strategic markets.GCW is the largest cement unit in this entire
Zone. There is four other major cement manufactures from Himachal Pradesh, Punjab and
Rajasthan who are his competitors.

ACC cement has very strong brand image, trusted by

generation for consistent and durable cement quality, fair business and practice and long
association with dealers and customers are the principal factor which provide us competitive
advantages over the other brand. ACC unique R & D support and business policy, differentiate
it from its competitors.

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 GEOGRAPHICAL DETAILS

Among the largest private sector companies, ACC is the only company to set up a cement plant
in 1982 in backward designated area at Barmana, Distt. Bilaspur (HP) and started production
with effect from 12th March 1984.

Barmana is 18 kms north to Bilaspur. The National Highway

No.21 connecting Ambala in Haryana and Manali in H.P. passes through Gagal Cement Works
and its colony.

The colony is at latitude 31.5-degree north and

77degree East Longitude. The total land acquired for the factory, colony and mining area is
2319.10 bighas. Factory covers 365 bighas, the colony covers 345 bighas and the mining
area is about1633 bighas. The topography of the area around the worksis mount-ainous.
Mean maximum temperature of the area goes upto 45 degree Celsius in the month of June
and the minimum temper- ature upto 3-degree in the month of December.

The work has generated direct and indirect employment to the scale
of nearly 12000.

Near by Towns:-
Bilaspur
Sunder Nagar
Mandi

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 CONTRIBUTION TO GOVERNMENT

Annual contribution to center government by way of taxes, duties is 155 crore out of which for
Himachal Government is 100 crore. And along with this it is also helping Govt. as its social
responsibility. The company has constructed a Govt. degree college; it is spending money
on schools, hospital and on other works of public welfare.

GAGAL CEMENT WORKS-AN UNRELENTLESS PURSUIT TOWARDS EXCELLENCE

Gagal Cement Works is committed to deliver quality products to the customers. Gagal
Cement Works has to its credit many a prestigious certifications like IS/ISO 9002, ISO
14001 for environmental management system and OHSAS 18001 for adopting high class
measures in the sphere of Occupational Health and Workers Safety in the manufacturing of
cement.

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 QUALITY POLICY

Build Quality In
Do not Sort Bad Quality Out
Quality Improvement is Limitless and therefore Continuous
Concern for Quality is for Entire Organization and Not Just for Product
Satisfy Customer Fully and Continuously

GAGAL CEMENT WORKS- A SYSTEMATIC APPROACH FOR

CLEANER WORLD

ACC GAGAL Cement Works is the first point in Himachal Pradesh to have EMS
certificate. The Bureau of Indian standards awarded this certificate to the works in March 1999.
The certificate has resulted in batter understanding among all the employees, of overall
environmental issues related to the plant. The main feature of EMS at Gagal is total involvement
of employees.

EMS is a program of continuous environmental improvement following a well-defined

sequence of steps drawn from the established project management practice and routinely
applied in business environment.

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 ENVIRONMENTAL POLICY

Prevent pollution and minimize fugitive emissions

Comply with all applicable legal and regulatory requirements
Conserve water, energy and natural resources
Minimize waste generation and utilize the same
Create environmental awareness and provide clean and safe environment to employees
and community at large

PRODUCTION SYSTEM IN GAGAL UNIT

Main Raw Material
Limestone
Quartzite
Iron Ore
Shale
Gypsum
Fly Ash

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 MANUFACTURING PROCESS
The Gagal Cement Works is based on the most modern process of cement manufacturing namely
a dry process suspension preheated kiln with precalcener. The limestone is crushed in the
crusher. It is than grinding in Raw Mill along with Shale and Iron Ore to fine power. The
grinding material is blended to a uniform consistency and fed to the kiln system pulverized Coal
in the kiln system to heat the material to a temperature of 1500 degree Celsius. The material
undergoes a series of chemical reaction to form a Clinker. The clinker is cooled in the Clinker
Cooler and stored in the Clinker silos. It is extracted from the Silos and integrated along with
Gypsum and Pozzolanaic material to form Portland Pozzoiana cement. The cement is stored in
cement silos. It is packed in 50-kg bags by automatic packing machine, loaded in trucks by auto
loaders and various consumption center in Himachal Pradesh as well as the neighbouring states
of Punjab, Haryana and J&K.

POWER
The co. met 54% power requirement through captive generation. Cost of captive power
generation was 34% lower as compare to grid power. In keeping with its policy of maximizing
its captive power capability. It is also the process of increasing its thermal captive power
generation capacity by another 45 MW. The company has already achieved significant reduction
in cost in specific area like fuel, power and manpower. The drives for cost reduction will be
further insified all area of operations.

DEPARTMENTATION
QUARRY DEPARTMENT

22
The Quarry Department is mainly concerned with the maintenance of Mines at ACC Barmana.
The sub-departments namely MINE; ELECTRICAL, GARAGE, CRUSHER, STACKER &
RECLAIMER support the Quarry department.

MINES

Gagal lime Stone Mine is captive mine of M/S ACC Ltd., Gagal Cement Works. The mining
lease covers an area of 265.97 hectares. Presently the mine is one of the largest mine of
northern India and is fully mechanized by Heavy Earth Moving Equipment's.

LIME STONE AND COAL HANDLING SECTION

LIMESTONE
The crushed limestone is received from Gagal Quarry with the help of a series of belt conveyer
and stacked in stockpile with the help of stackers.

COAL
Coal is used as a fuel for firing in the Kiln. Gagal Cement Works receives coal from different
collieries of CCC, ECL and NEC by rail upto Kiratpur Sahib.

LABORATORY DEPARTMENT
Laboratory department in coordination with other departments carries our regular quality control
functions. Quality and process control measures are exercised at each and every stage of process.
Inspection and procurement of raw materials, its testing, quality control of input materials,
intermediate products at different level of process and final product that is cement are done as
per procedures. Inspections and Test Records are maintained in the Laboratory as per the scheme
of testing and inspection. The departmental activities are coordinated by Deputy Manager-QPC
who reports to Manager- Production.

Gagal Works laboratory has three sections:

1. Chemical & Instrumentation laboratory
2. Physical Laboratory

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3. Site Laboratory

PROCESS DEPARTMENT
The Process department guides the operations in maintaining process parameters so that
production is within the desired range of quality parameters. The process parameters are arrived
at after discussions with the Departmental Heads of various sections (Raw Mill, Cement Mills &
Laboratory)
Manager – Production, coordinates the departmental activities.

RAW MILL
Activity of Raw Mill starts from feeding Raw Material (limestone, Quartzite and Iron Ore) to the
Mills and ends at filling the Raw Meal to Silos.

RAW MATERIAL FEEDING

Lime stone feeding to Raw Mills/Roller Mills is through the sequence of belt conveyors to
different Hoppers. Feed size of limestone is 90 mm and Mills Scale, Shale feeding is from
the Gantry to the respective Hoppers through sequence of belt conveyors. Shale feeding is
through Reclaimed or Pay Loader.

RAW MILL
Two close circuits two chamber Ball Mills are performing the grinding of limestone and
Additive mix. Raw Mill is a tube construction of thick MS plate with steel lines and
compartments are separated by diaphragm for improving the retention time and transfer of
materials in second for further grinding. Mill is charged with hyper steel balls. Raw material is
first fed to Tertiary Crusher (Single Rotor Reversible Impact Crusher) which reduces the size of
Mix. After crushing the mix the material is fed to Ball Mill where fine grinding takes place. The
finer product is separated by Air Separator and is fed to the blending silos and the coarse
material is fed back to the Mill Inlet.

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 VERTICAL ROLLER MILL (VRM)
In VRM Section the material is directly fed into Mill through the feed belt for grinding. The
ground material is stored in continuous flow silos from where it is fed to the Kiln. VRM utilizes
hot air from the kiln exhaust for drying the Raw Mix
Deputy Manager – VRM, who reports to Manager (Maintenance) coordinates the
departmental activities

KILN DEPARTMENT
Kiln Department functions are categorized under two heads, Manager (Maintenance) is
responsible for the maintenance of all equipment and Manager (Production) is responsible
for the Clinker Production and its quality parameters. Gagal Cement Work has two rotary kilns.
Kiln no 1 is having 3 streams coupled with 2 four stage and 1 five stage preheater with 2
precalciners, DDF and MFC. Kilns No 2 are having twin stream 5 stage preheater with
precalciners. Pulverized coal is used as a fuel for calcination. The Clinker is discharged to
horizontal grate cooler and is stored either in Silos or in stockpiles.

CEMENT MILLS DEPARTMENT

The basic function of the department is to grind the required ratio of clinker and gypsum in the
manufacture of OPC and clinker, Gypsum and CCP/fly ash for the manufacture of PPC with
the help of 4 ball Mills for cement grinding.

PRE GRINDING UNIT

Roller Press is the pre-grinding unit for Cement Mills 1 & 2. In Roller Press two rollers are
arranged in horizontal fashion. One is fixed and other has a hydraulic thrust arrangement for
horizontal movement. The clinker is fed vertically down ward between the rollers and gets
crushed by the hydraulic pressure arrangement The product, which is in flakes, is fed to the Ball
Mill with other additives for finished grinding.

25
 FINISHED GRINDING
Finished grinding is performed in Ball Mills. Ball Mill is a rotating shell divided into two
chambers fitted with shell liners for shell protection and charged with grinding media to the
required volume. The impact and friction between the grinding media and material perform
grinding. Out put from the ball Mills is fed to the dynamic separator where the coarse and fines
of specific sizes are separated. The coarse is again conveyed to the Ball Mill for further grinding.
The fines are conveyed to cement silos through a series of elevators and air slides. In order to get
the desired specific surface for cement the RPM of separator is varied accordingly?
The departmental activities are coordinated by Dy. Manager-Plant who reports to
Manager (Maintenance).

26
 ELECTRICAL AND INSTRUMENTATION (E & I)
DEPARTMENT
The primary function of the E & I department is to maintain all E & I equipment in the
plant to provide the necessary service to ensure the smooth operation of all E 8 & I equipment.

ELECTRICAL
Electrical equipment mainly comprising transformers, HT/LT motors, DC Motors, switch gears,
power distributor system and factory and residential colony lighting
Besides the above E & I department is also responsible for the maintenance if the electrical
installations of the colony. The department CO-ordinates with the other relevant departments for
proper utilization of the Grid & DG power.

INSTRUMENTATION
Instrumentation system can be effectively termed as the nervous system of the plant. With the
recent advanced in technology instrumentation has become one of the most important aspect of
cement manufacturing industry. Almost all the monitoring and controlling parameters are now
available I the Central Control Room (CCR) for operators to run the plant efficiently. Accuracy
and degree of control has increased manifold due to the latest instrumentation control systems.
Dy. Manager (Electrical) and Dy. Manager (Instrumentation) report to Manager (E & I) for
electrical and instrumentation activities.

WORK SHOP
Following activities are carried out in the workshop department:
1. Departmental maintenance Activities
2. Maintenance of Gear Boxes
3. Compressors & PD Blowers
4. Water Pumps
5. Various equipment at Rambagh Pump House, Filter and Sewage Water Treatment plants.
The departmental activities are coordinated by Dy. Manager (Plant) who reports to Manager

(Maintenance).

27
 COMMERCIAL DEPARTMENT
Procurement Section
This section looks after that equipment, tools and other requisite items are made available to
different departments in time. Deputy Manager-Purchase who reports to Sr. Manager-
Commercial coordinates the departmental activities.

Packing House Department

Packing plant is the place where cement is packed & dispatched to various locations. Gagal
Cement Works packing department has six silos with total storage capacity of 35200 tonnes.
There are three Rotary Packer in Gagal I packing plant with a capacity of 100m TPH each and
two electronic rotary packers in Gagal II packing pant with a capacity of 180 TPM each. All the
packers have truck-loading facility because the cement form Gagal works to different locations
by road.
The various varieties of cement handled are
33 Grade Ordinary Portland Cement (OPC)
43 Grade Ordinary Portland Cement (OPC)
PPC (Portland Pozzolona Cement)
Assistant Manager-Plant reports to Manager Commercial for Packing Plant Activities.

28
 Cement Dispatch Section

Cement dispatch section receives dispatch instruction for Regional Marketing Office,
Chandigarh and also from Shimla. The trucks registered with authorized transporters enter the
factory gate with Loading Advice cum gate Pass. The Truck’s Gross weight is taken at the Exit
Gate by electronic weighbridge and finally an Excise Invoice is issued to the truck driver.
The departmental head reports to Manager Commercial.

29
 THE CIVIL DEPARTMENT
In cement industry the maintenance and applications of Refractories in kiln and its auxiliary units
are one of the most important job. It is the refractory, which is subject to all sort of, processes
and operational conditions like high temperature, abrasion, alkalis, chemicals, thermal shocks,
mechanical shocks etc. And protects the metallic body of the units. Due to this fact a strict
adherence with the quality of the refractory at every step from receipt to its application is of
paramount importance. In the organization the civil department does the complete dealing with
the refractory and is also responsible for all civil related jobs in the factory and colony.
Deputy Manager-Civil who reports to Manager-Maintenance coordinates the
departmental activities.

MAINTENANCE INSPECTION PLANNING & SYSTEMS (MIPS)

As the name suggests the main function of the department is preparing and planning for carrying
out various inspection, maintenance job and top record and update the inspection results.
Inspection/Maintenance planning is based upon the diagnosis of change in behavior pattern of
sound, temperature, heat, vibration, viscosity etc.

MIPS department also coordinates in planning the maintenance activities of various departments
so as to get optimum utilization of stoppage duration. MIPS also carries out the down tile
analysis of main equipment.

30
 GENERAL STORES
The general stores is the department which is involved in making the balanced and timely flow
of materials, spares, tools and equipment. General Stores also arranges for the disposal of the
scrap and unwanted materials.
Deputy Manager who reports to Works Manager coordinates the activities of the
department.

INFORMATION SYSTEM DEPARTMENT

The functions of Information System Department is to:
1.Transformation of EDP to Decision Support System
2. Optimize End User Computing to increase the Individual Productivity
3. Capture Processing and Sharing of Information from the Net
4. In House Development & Deployment of Application Packages
5. Database Maintenance & Administration
Hardware Setup
 UNIX based RISC Server.
 Win-NT based Intel Servers
 Microsoft Exchange Server
P I, P II, P III & P IV PCs :

Software Setup
Operating System: UNIX SVR 4, Win - NT 4.0, Win – 95 & Win - 98
Oracle 8 I, Developer 2000, Microsoft Exchange 5.5. MS-OFFICE – 97
Office XP

Intra-plant Connectivity
All plants, RMOs, Head Office is connected through INSAT- 3B services provided by TataNet.
Connectivity to the external World is through IIS, Head Office.

31
 MARKETING
ACC Range of cement and blended cements are marketed through a network of 12 regional
marketing offices, several area offices and warehouses. A countrywide network of about 11,000
stock lists who, in turn, are assisted by the sub- dealer's back this. Such an all-pervasive
marketing network has an enabled ACC to consolidate itself with a national presence. And the
customer is assured of being able to get quality ACC products when and where he wants them.
Complementing this is a unique customer services cell comprising qualified civil
engineers, which assist and advice customers with prior and post sales services. This service
begins with selection of type and grade of cement (where applicable) to trouble - shooting and on
site assistance.
Keeping pace with changing times, and an ever- growing need for specialized services,
ACC has been offering its marketing expertise and distribution facilities to other producers in
cement and related areas. However, a precondition of all such agreement is quality control
supervision to be carried out by an ACC expert located at the franchisee's plant. Currently, ACC
has franchising agreements for cement marketing with Alcon Cement Company, Goa and Cochin
cement Ltd., Cochin.
ACC also exports cement to SAARC Nations, especially Nepal and Bangladesh on a
regular basis.

32
 HUMAN RESOURCES DEPARTMENT
The basic object of setting up Human Resource Department is to provide inputs to the employees
for his optimum level of efficiency. It includes looking after various HR related functions such as
training & development, performance and potential appraisal, planning and allocation of
manpower, industrial relations including negotiations and dealing with staff functions such as
transfer, promotion, disciplinary action, grievance handling etc. Department is also responsible
for providing welfare amenities/facilities to employees, dealing with land matters, community
development, colony administration etc. Various details of personnel policies are readily
available with HR department. Manager-HR & Admn. Coordinates the activities of the
department.

Manager-HR & Admn. Coordinates the activities of the department.

33
 FINANCE DEPARTMENT
Introduction:
Finance department plays a major role in the working of any organization as
for all-purpose, money is required, which is arranged, procured and disbursed as the finance
department. They only make budget go for cost control and maintain to optimum balance of cash
for smooth operations. As such the finance department in Gagal cement works is looking after
only some of the aspects like payment for rawmaterial purchased, cost control and insurance
aspects of the unit. All receipts for cement sold is received by Regional office at Chandigarh and
fund financed by unit for different payment from its R.O.
Hierarchy of the finance department:
It is a line organization having a full-fledged department to manage the
finance budget, costing and other matter of this department. The ACC Gagal cement works
president has to manage two departments mainly i.e. works and Finance
President

Manager Finance

Assistant Manager

Senior Officer Senior Officer Senior Officer

(Cost) (Assets) (Cash)

Clerks

Fixed Asset Cost Employee salary Transportation

34
 FINANCE DEPARTMENT

Account Section

The accounts section deals all the general accounting, employee payroll, billing and matter
related to taxation etc. The department activities are coordinate by Assistant Manager-Accounts
that report to Manager-Finance.
Cost Section
The Cost Section does Accounting relating to preparation of Monthly Cost Data and Bill
Provisioning.Assistant Manager-Cost coordinates the departmental activities and reports to
Manager-Finance.
GEERAL OR ACCOUNTS SECTION
Accounting Procedure
The accounting procedure of ACC Gagal cement works is not a new complicated one.
They follow a standardized rule of making entries in there books of accounts or posting or
making their trial balance, Gagal cement works unit make its Trial Balance in the monthly basis
transaction and rent it to the Head Office. Head Office prepares final accounts for all units not
individual unit.

35
Gagal cement works follows the following procedure

Step1: The quotations are called for acquiring or procuring the particular
assets, raw material fuel etc.

Step2: After then estimate decide/fixed through CESS.

(CAPITAL EXPENDITURE SECTION SCHEME)
Step3: After then allocation of budget for different requirements.

Step4: Then order re place, R.M/Assets be procured, inspected (G.R.No) by

the concerned department.

Step5: Then GR No. After quality check etc. is sent to finance department
where the cashier makes the payment.

Step6: The ledger department debits this in the books.

Step7: Finally at the wish of finance department assets is charged and

declared free.

36
 FINANCE MANAGER
Finance Manager is totally responsible for all activities to payment/receipts of cash and fund
Management of the unit. His decision on payment will be final as personal manual, account
manual directives laid by the organization. Under Finance Manager the financial activities is
disciplined in the manner as per smooth functionary of all activities of payment such as salary
and wages, payment to sundry creditors which include all pretty payments to local contractors,
repurations, workers and officers of all grade in working unit.
In detail it can be said that under finance manager their will be payment of salary and
wages, allocation of various financial activities such as disbursement of cash by cashier, the
payment like contractors bill, local bill, raw material bill, stores and spares payment of raw
material and packing material, traveling bills, outstation allowances. All the various mislenious
payments sanctioned are being made.
The financial activities are on summation of inputs information system department (I.S.D.)
provides various financial, cosying outputs available on daily report, weakly report and monthly
reports. It also provides information like cash payment, voucher, cash receipt voucher, and
various types of bills also. Various type inventory output summary of transaction bills of output
(local, contractor,raw material etc.) various type of finance ledgers of the month and monthly
trial balance.
Account staff to routs all payment in account department:-
To section the payment to staff,officer,mgt & to verify correction
FINANCIAL MANAGEMENT PREPAPER

 Payroll of employee.
 Accounting of sales.
 Financial accounts.
 Supply bills.
 Material Accounting.

37
 COST SECTION
The Cost Section is a branch of accounting and has been developed due to limitations of
financial accounting. Financial accounting is primarily concerned with record keeping directed
towards the preparation of profit and loss account and balance sheet. It provides information
regarding the profit and loss that the business enterprise is making and also its financial position
on a particular date. The information concerning the business enterprise is helpful to the
management to control in a general way the major function of business viz., finance,
administration, production and distribution but details regarding operating efficiency of these
divisions are lacking. Infect, the development in the field of cost accounting is so quick and
fields covered by it are expanding so much in magnitude that it becomes difficult for the
management to lay down management policies, to guide the management decisions or evaluate
operating management performance with the information provided by financial accounting.
.

38
 SUMMARY OF

WORKING CAPITAL ANALYSIS

UNDER

RATIO ANALYSIS

FUND FLOW ANALYSIS

WORKING CAPITAL BUDGET

39
40
 It is stated in the diagram how company has spent its earning during 2021:-

The diagram contains the following items:-

1. COAL AND OIL :- It is treated under direct expenses and its cost is all about Rs.541.68 crore
and it is 8.02% of the total cost and shown in TRADING A/C.

2. TAXES AND DUTIES :- It includes various taxes like corporate tax, sale tax etc. and duties
like custom duty, excise duty etc. and its cost is all about Rs.1263.04 crore and it is 18.70% of
the total cost and being an indirect expenses is treated under PROFIT AND LOSS A/C.

3. EMPLOYEE COST:- A company has to bear cost in account of services rendered by its
employee is called employee cost. Employee costs are in form of wages, salary, provident fund
and other perks and allowances and these cost are all about 318.02 crore. it is 4.71% of the total
cost and treated under TRADING AND PROFIT & LOSS A/C.

4. TRADING PURCHASE :- Trading purchase includes raw material purchased by the company
and is used for getting output of the company. its cost is all about 53.42 crore and it is 0.79% of
the total cost of the company.

5. REPAIR AND MAINTANANCE:- A company has to bear repair and maintenance cost of
machinery, building, furniture, tools and equipments. It is treated as indirect expenses and shown
in PROFIT AND LOSS A/C. its cost is all about 265.48 crore. It is 3.93% of total cost of the
company.

41
6. DIVIDEND:- A company has to pay dividend to equity and preference shareholders for their
amount invested in the company. Company has paid Rs 322.04 crore as dividend in 2021
and it is 4.76% of total cost. It is shown in PROFIT AND LOSS A/C.

7. POWER COST:- Electricity which is consumed for the purpose production called power cost.
A company has to bear power cost at about 430.98 crore and it is 6.38% of the total cost. It is
treated as direct expenses and shown in TRADING A/C.

8. FREIGHT AND TRANSPORTATION AND OTHER CHARGES:- A company has to bear

cost of carrying goods from one place to another place and loading and unloading the goods
called freight and transportation and other charges. It is treated as indirect expanses and shown in
PROFIT AND LOSS A/C. its cost 983.39 crore and it is 14.56% of the total cost.

9. DEPRECIATION :- It is gradual decrease in the value of fixed assets like machinery,

building, furniture, tools and equipments etc.it is treated as an indirect expanses and shown in
PROFIT AND LOSS A/C. it’s cost is all about 254.25 crore and it is 3.76% of the total cost.

10. INTEREST ON BORROWING:- A company has to pay interest on borrowing for long term
and short term basis. It is treated as an indirect expanses and shown in PROFIT & LOSS A/C.
it’s cost is all about 52.03 crore and it is 0.77% of the total cost.

11. RETAINED PROFIT:- Some times a company adopts a policy of ploughing back of profit
for further investment called retained profit. It is shown in the liabilities side of balance sheet. Its
cost is all about 909.80 crore and it is 13.47% of the total cost.

12. SELLING EXPENSES AND OTHER CHARGES :- Those expenses are related with the sale
of output in the market called selling expanses and these are treated as an indirect expenses and

42
shown in PROFIT AND LOSS A/C. these cost are all about 368.13 crore and it is 5.45% of the
total cost.

13. MANUFACTURING AND OTHER EXPANSES:- Those expanses which are related with
production of commodity it is treated as direct expanses and shown in TRADING A/C. it cost is
all about 318.50 crore and it is 4.71 % of total cost.

43
 COMPOSITE BALANCE SHEET OF ACC LTD. AS ON 31-12-2020 & 31-
12-2021

LIABILITIES 2020 2021 ASSETS 2020 2021

SHARE CAPITAL 187.76 185.54 FIXED ASSETS 4816.25 4628.64
LESS: DEPRECIATION -1893.76 -1722.29
RESERVES & 2955.16 1951.21 NET BLOCK 2922.49 2906.35
SURPLUSES
CAPITAL WORK IN 473.42 215.68
LOAN FUND 771.16 1071.42 PROGRESS

DEPOSITS 144.82 104.75 INVESTMENT (LONG 503.54 293.75

TERM)
DEFFERRED TAX
LIABILITIES 320.72 300.38 INVENTORIES 624.13 600.95

CURRENT SUNDRY DEBTORS 213.96 199.17

LIABILITIES 1024.73 913.28
CASH & BANK 620.17 102.79
BALANCES
PROVISIONS 502.28 316.77
OTHER CURRENT 16.13 31.49
ASSETS

LOAN’S AND 631.85 486.76

ADVANCES

MISC. EXPENDITURE 0.94 6.41

TOTAL 5906.63 4843.35 TOTAL 5906.63 4843.35

44
 WORKING CAPITAL ANALYSIS CAN BE STUDIED UNDER THE
FOLLOWING THREE HEADS:-

1. RATIO ANALYSIS :- Under the ratio analysis It is urgent to find out short term ratios
that will effect working capital of every company

2. FUND FLOW ANALYSIS :- Under the fund flow analysis it is urgent to find out
changing in working capital and its operation and sources and application of funds.

3. WORKING CAPITAL BUDGET :- It helps in forecasting the short term requirement

for every company.

45
 WORKING CAPITAL

INTRODUCTION:-
Working capital refers to that part of firms capital which is
required for financing short term or current Assets such as cash, debtors, marketable security and
inventories. Thus funds invested in current assets keep revolving fast and are being constantly
converted in cash and this cash flows out again in exchange for other current assets. It is also
known as revolving or circulating capital or short term capital.

CONCEPTS OF WORKING CAPITAL :-

1. BALANCE SHEET CONCEPT
2. OPERATING CYCLE CONCEPT

1.BALANCE SHEET CONCEPT:-

(a) Gross working capital:-
The capital which is invested in total current assets of the
enterprise.current assets are those assets that can be converted into cash with in tenure of one
year.
CURRENT ASSETS= Inventory + sundry debtors+ cash & bank balances + other current assets
+loans & advances
= 624.13 + 213.96 + 620.17 + 16.13 + 531.85
= 2006.24 crore

46
(b) Net working capital:-
Net working capital is the excess of current assets over current
liabilities
Net working capital=current assets-current liabilities
= 2006.24—1024.73
= 981.51 crore
( Note:- Provision is not treated as current liability)
2. OPERATING CYCLE CONCEPT:-

47
 DEBTO
CASH
-RS

RAW
SALES MATER
-IALS

WORK
FINISH-
IN
ED
PROGR
GOODS
-ESS

WORKING CAPITAL CYCLE : CIRCULAR FLOW CAPITAL

CONVERSION PROCESS:-
It starts with purchase of raw material and
other resources and ends with the realization of cash from the sale of finished goods. Initially a
company has to purchase raw material and it is put into process called work in process and got
result as output “stock of finished goods and this output is ready for sale and becomes debtors

48
and ultimately realization of cash and this cycle continuous again from cash to purchase of raw
material and so on.

GROSS OPERATING CYCLE = RMCP + WIPCP + FGCP

(1)Raw material conversion period (RMCP):-

Average stock of raw material____
Raw material consumption per day
Average stock of raw material :-
= opening Raw material + Closing raw material
2
= 362.06 + 410.43
2
= 386.245 crore
Raw material consumption per day :-
Total consumption during the year
No of days in a year
= 674.87/365
= 1.85 crore

RMCP = 386.245/1.85
= 208.78 Days (App. 209 days)
(2) Work in process conversion period (WIPCP):-
Average stock of work in progress
Total cost of production per day
Average stock of work in progress :-
Opening W.I.P. + Closing W.I.P
2
=167.47 + 149.72
2

49
 = 158.95 Crore
Total cost of production per day = Actual production / 365
= 275.56/365
= 0.75 crore
= 158.95/0.75
WIPCP = 211.93 Days

(3) Finished goods conversion period (F.G.C.P.):-

Average stock of finished goods
Total cost of sale per day
Average stock of finished goods :-
Opening F.G. + Closing F.G.
2
=71.42 + 63.98
2
= 67.70 crore
Total cost of sale per day = Total cost of sale / 365
= 4415.51 / 365
= 12.09 crore
F.G.C.P. = 67.70 / 12.09
F.G.C.P. ` = 5.596 days

(4) Receivable conversion period :-

Average Accounts Receivables
Net credit sales per day
Average Accounts Receivables = opening A.R + Closing A.R
2
= 199.17 + 213.96
2
= 206.565 crore
Net credir sales per day = 5803.48/365

50
 = 15.89 crore
R.C.P = 206.565/15.89
R.C.P = 13 days

(5) Payables deferral period:-

Average payables
Net credit purchase per day
Average payables = opening payables + closing payables
2
= 103.78 + 120.05
2
= 111.915 crore
Net credit purchase per day = Net credit purchase / 365
= 1473.37 / 365
= 4.037 crore
P.D.P = 111.915 / 4.037
P.D.P = 28 days
GROSS OPERATING CYCLE:-
RMCP + WIPCP + FGCP + R.C.P.
= 209 + 212 + 6 + 13
= 440 Days
NET OPERATING CYCLE:-
= GROSS OPERATING CYCLE—PAYABLES DEFFERAL PERIOD
= 440--28
= 412 Days

INTERPRETATION :-
Funds invested in current Assets keep revolving fast and are being
constantly converted into cash and this cash flows out again in exchange for other current assets

51
hence it is known as revolving or circulating or operating cycle. The whole circulating capital
cycle will be finished in 412 days or App. 14 months.

RATIO
A Ratio is a simple arithmetical expression of the relationship of one number to another. In
simple language ratio is one number expressed in terms of another and can be worked out by

52
dividing one number into the others. A Ratio is known as a symptom like blood pressure, the
pulse rate or the temperature of an individual.
Example=current assets/current liabilities .
RATIO ANALYSES
A Ratio analyses is one of the most powerful tools of financial analyses. it is used as device to
analyze and interpret the financial help of enterprise. Just like a doctor examines his patient by
recording his body temperature, blood pressure etc before his conclusion regarding the illness
and before giving him treatment. With the help of ratio analyses one can measure the financial
condition of the firm and point out whether the condition is strong good or poor. one can arrive
at a decision of how the performance of a firm is deteriorating and can find out short term
financial position or liquidity position and suggest what a company must do for improving its
working capital.
THE VARIOUS RATIOS THAT EFFECTS THE WOKING CAPITAL OF A
COMPANY DISCUSSED AS BELOW:-
1.CURRENT RATIO:-
CURRENT ASSETS___
CURRENT LIABILITIES
As given:
Current assets = Inventories + sundry debtors + cash & bank balance + other current assets
=624.13 + 213.96 + 620.17 + 16.13 + 531.85
= 2006.24 crore
Current liabilities = sundry creditors + outstanding interest + investor education & protection
fund + sundry deposits + Employees
=854.48 + 12.94 + 11.08 + 62.76 + 17.23 + 66.24
= 1024.73 crore.
CURRENT RATIO = 2006.24/1024.73
=1.958:1

INTERPRETATION:-

53
 The above calculated current ratio is indicating us that the ACC
Ltd. company is liquid and has the ability to pay its current obligations in time as and when they
become due. As a convention 2:1 is considered as a banker’s rule of thumb and current ratio of
ACC Ltd. Company stands at 1.958:1 and it is near about 2 that is why company is running in
strong position. Because of ultimate ratio there may be fast moving stocks and debtors may go
up because debt collection has become satisfactory and with the increase in cash & bank
balances may be used in further investment. Hence the working capital of a company would be
increased because of having sufficient fund.

2. QUICK OR ACID TEST OR LIQUID RATIO:-

QUICK ASSETS______
CURRENT LIABILITIES

QUICK ASSETS = Current Assets – ( inventories + prepaid exp.)

= 2006.24 – ( 624.13 + 6.02 )
=1376.09 crore

CURRENT LIABILITIES = 1024.73 crore

QUICK RATIO = 1376.09/1024.73

= 1.343:1

INTERPRETATION:-
The above calculated quick ratio is indicating us that the ACC Ltd.
company is moving in the brighter side of life in this competitive era and has got sufficient fund
to meet its current obligations. As a convention 1:1 is considered as a rule of thumb and
quick ratio of ACC Ltd. company stands at 1.343:1 and there is an increase of about 0.343 and
having a good sign for companies name, fame and reputation. The position of quick assets like
cash & bank balance and debtors is much strong as compared to current liabilities.

54
3.ABSOLUTE LIQUID RATIO OR CASH RATIO:-

ABSOLUTE LIQUID ASSETS

CURRENT LIABILITIES

=620.17/1024.73
=0.61:1

INTERPRETATION:-
A.L.R represents conversion of some items into cash rapidly and
involves cash in hand, cash at bank and marketable securities. The accepted norms for this ratio
is 50% or 0.5:1 or 1:2 and the absolute liquid ratio of ACC Ltd. stands at 0.61:1 which is more
than 0.5. Hence it is good symbol for company to meet its day to day expenses and to promote
saving.

4. (a) INVENTORY TURNOVER RATIO:-

COST OF GOODS SOLD
AVERAGE STOCK
C.O.G.S. = Net Sale — Gross profit
= 5803.48 – 1756.10
= 4047.38 crore
AVERAGE STOCK = Opening stock + closing stock
2
= 600.95 + 624.13
2
=612.54 crore
Inventory Turnover Ratio = 4047.38/612.54
Current year I.T.R.(2021) = 6.61 Times

55
Previous year I.T.R.(2020) = 5.60 Times

(b) INVENTORY CONVERSION PERIOD:-

DAYS IN A YEAR (365)________
INVENTORY TURNOVER RATIO
= 365/6.61
Current year (2021) = 55.22 DAYS (App. 55 days )
Previous year(2020) = 65.17 DAYS (App. 65 days )

INTERPRETATION:-
Inventory turnover ratio measures the velocity of conversion of
stock into sale. Usually the previous year inventory turnover ratio was 5.60 times which is less
than current year inventory turnover ratio that is 6.61 times. Thus this high stock velocity
indicates efficient management of inventory because more frequently the stocks are sold, the
lesser amount of money is required to finance the inventory. Sometimes a high inventory
turnover may be the result of a very low level of inventory which results in shortage of goods in
relation to demand. An inventory turnover ratio should not be too high and too low and ACC
Ltd. inventory turnover ratio falls in medium category. The current year inventory conversion
period is 55 days which is less than previous year and thus a company has converted its
inventory into cash with in a short period of time.

4.(a) DEBTORS TURNOVER RATIO:-

TOTAL SALE
DEBTORS
= 5803.48/213.96
CURRENT YEAR (2021) = 27.12 times
PREVIOUS YEAR (2020) = 14.29 times

56
(b) AVERAGE COLLECTION PERIOD:-
DAYS IN A YEAR (365)
DEBTORS TURNOVER RATIO
= 365/27.12
CURRENT YEAR (2021) = 13.46 DAYS
PREVIOUS YEAR (2020) = 25.54 DAYS

INTERPRETATION:-
Debtors turnover ratio indicates the number of times the debtors
are turned over during a year. Recently debtors turnover ratio has been increased from 14.29
times to 27.12 times. Thus the higher value of debtor turnover represents sufficient management
over a company and having less chances of becoming bad debts and results to increase in sale of
commodities and received cash may be used for production purpose and funds flows in smooth
way. At presently average collection period is 13 days which is less than 25 days of previous
year. Hence the time taken by ACC Ltd. to convert its debtors into cash has been minimized.
5. (a) CREDITORS TURNOVER RATIO :-
Net credit annual purchase
Average trade creditor
Net credit annual purchase = Purchase + raw material + packing material
= 53.42 + 1216.55 + 203.40
= 1473.37 crore
Average trade creditor = 103.78 + 120.05
2
= 111.915 crore
C.T.R. =1473.37/111.915
Current year (2021) = 13.165 Times
Previous year (2020) = 10 Times

(b) AVERAGE PAYMENT PREIOD:-

NO OF WORKING DAYS

57
 C.T.R.
= 365/13.165
Current year (2021) = 27.73 Days
Previous year (2020) = 36 Days

INTERPRETATION:-
Those person who supply goods to company are called creditors and they
are interested in finding out how much time the company will take in repaying its creditors. The
creditors turnover ratio has been increased from 10 to 13 times and company got itself capable of
purchasing raw material on time and on the other hand suppliers can get payment in spite of
delivering goods as fast as possible. Thus it is a good sign for both company and suppliers. The
average payment period has been decreased from 36 days to 28 days and this will help in running
operating cycle very smoothly.
6. WORKING CAPITAL TURNOVER RATIO:-
COST OF SALE_____________
AVERAGE WORKING CAPITAL
Cost of sale = C.O.G.S. + selling & distribution expanses
= 4047.38 + 368.13
= 4415.51 crore
Average working capital = opening W.C. + closing W.C.
2
= 507.88 + 981.51
2
= 744.695
Working capital turnover ratio = 4415.51/744.695
= 5.93 Times

INTERPRETATION:-
Working capital turnover ratio indicates the velocity of the utilization of
net working capital. This ratio indicates the no. of times the working capital is turned over in the

58
course of a year. It measures the efficiency with which the working capital is being used by a
company. The cost incurred on sale can be compensated by using working capital at 5.93 times
by ACC LTD COMPANY.

7. WORKING CAPITAL LEVERAGE :-

% CHANGE IN RETURN ON INVESTMENT
% CHANGE IN CURRENT ASSETS
Return on investment (2021) = 38%
Return on investment (2020) = 18%

% change in ROI = 38-18

18
= 1.11%
CURRENT ASSESTS(2021) = 2006.24
CURRENT ASSESTS(2020) = 1421.16

% CHANGE IN C.A = 2006.24-1421.16

1421.16
= 0.41%
WORKING CAPITAL LEVERAGE = 1.11/ 0.41
= 2.7

INTERPRETATION :-
Working capital leverage measure the impact of a change
in current assets on change in investment. Here % change in current assets 0.41% has been
calculated while as % change in investment is 1.11%. so company can use amount drawn for 2.7
Times in order to reach on return on investment.

8.RATIO OF CURRENT LIABILITIES TO TANGIBLE NET WORTH

59
 CURRENT LIABILITIES__
TANGIBLE NET WORTH
= 1024.73/3141.98
= 0.326: 1

INTERPRETATION:-
From the above calculated figure is indicating us that a company
has sufficient tangible worth for meeting its current liabilities with out interrupting circulating
capital. Here net worth is 1/3rd of current liabilities and showing company moving on the right
direction and having different sources of generating finance.

FUND FLOW ANALYSES

A fund flow analysis is a technical device used to study the sources from which additional funds
were derived and the use to which these sources were put. It is an effective management tool to

60
study changes in the working capital of business enterprises between beginning and ending
financial statements dates. The fund flow analysis consists of:
1. Preparing schedule of change in working capital.
2. State of sources and application of funds.

FLOW OF FUNDS ?

CURRENT ASSETS NO CURRENT LIABILITIES

YES
YES
YES YES

NON-CURRENT ASSETS NON-CURRENT LIABILITIES

NO

STATEMENT OR SCHEDULE OF CHANGE IN WORKING CAPITAL:-

Working capital means the excess of current assets over current liabilities.
There are following four rules to kept in mind while preparing schedule of change in working
capital given as under :-

61
 1. An increase in current assets increases working capital.
2. A decrease in current assets decreases working capital.
3. An increase in current liabilities decreases working capital.
4. A decrease in current liabilities increases working capital.
STATEMENT OF SCHDULE OF CHANGE IN WORKING CAPITAL OF
ACC LTD COMPANY

INTERPRETATION:-
Statement of changes in working capital is
prepared to show the changes in the working capital between the two balance sheet dates. The
difference is recorded for each individual current assets & current liabilities. If we talk about
current assets like cash & bank balances, sundry debtors, inventory and other current assets have
left positive effect on working capital except only prepaid expenses. On the other hand all
current liabilities have shown increase in balances with comparing from the previous balances.
The ACC working capital has been increased from 191.11 crore to 479.23 crore, hence company

62
has found net increase in working capital as amount as 288.12 crore. It is good sign for
companies’ short term financial health.

CALCULATION OF FUNDS FROM OPERATION

RESERVE IN THE BEGINNING ( 1-1-2020) 1951.21

RESERVE AT THE END ( 31-12-2021) 2955.16

PROFIT FOR THE YEAR(2955.16-1951.21) 1003.95

ADD : DEPRICIATION ( 1893.76-1722.29) 171.47
ADD : TO WRITTEN OFF MISC. EXPENCES 5.47

FUNDS FROM OPERATION 1180.89

INTERPRETATION:-
After finding out changes in working capital a company is required
to find out funds from operation for which all items that are already debited in profit & loss
account must be added in the net difference of reserve & surpluses of current & previous year
because these all items are treated as loss for company and on the other hand those items are
credited in profit & loss account must be deducted in the net difference of reserve &
surpluses. From the above calculations it is found that profit for the year is 1003.95 crore and

63
 change in deprecation is 171.47 crore and written off misc. expenses is 5.47 hence company
has derived funds from its operation near about to 1180.89 crore.

NOTES:-

CALCULATION OF REPAYMENT OF LOAN

LOAN FUNDS IN THE BEGINNING OF 2021 = 1071.42

LOAN FUNDS IN THE END OF 2021 = 771.16

REPAYMENT OF LOAN DURING THE YEAR = 300.26

( 1071.42-771.16)

FUND FLOW STATEMENT OF ACC L.T.D. COMPANY

64
 AS ON 31-12-2021

FUNDS FROM OPERATION 1180.89 REPAYMENT OF LOAN 300.26

ISSUE OF SHARE CAPITAL 2.22 PURCHASE OF FIXED ASSETS 187.61
CASH RECEIVED FROM DEPOSITS 40.07 NET INCREASE IN WORKING 288.12
CAPITAL
NET DEFFERED TAX LIABILITIES 20.34 PURCHASE OF INVESTMENT 209.79
CAPITAL WORK IN PROGRESS 257.74

TOTAL 1243.52 TOTAL 1243.52

INTERPRETATION:-
The fund flow statement is a statement which shows the movement
of funds and is a report of the financial operations of a company. It indicates various means by
which funds were obtained during the particular period and the ways in which these funds were
employed. Flow of funds is not possible when both accounts are current or non current (fixed)
because current assets remain same as current liabilities but when one account is current and
other is non current than there is perfect flow of funds. From the above prepared fund flow
statement o9f ACC company it is find out that the company has issued further share capital of
about 2.22 crore and treated as soures of company because it will generate funds for company.
Company has minimized its long term funds that will treated as repayment of loan it is indicating
out flow of funds for company and shown on application side of fund flow statement. Company
has generate funds from its operations and treated as sources. The company has received cash
from its deposits near about to 40.07 crore. And deferred tax liability amounted to 20.34 crore is
our source. Company has made additional purchase of fixed assets amounting to 187.61 crore it
is out flow of cash for company and increase in working capital & capital work in progress
should be treated as out going of funds.

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 WORKING CAPITAL BUDGET
A Budget is a financial or quantitative expression of business plans and policies to be persuade in
the future period of time. Working capital budget is a process of estimating working capital
needs and the sources to finance them and then comparing the budgeted figure with the actual
performance and if necessary to take corrective actions in future and its objective to ensure
effective utilization of resources.

STATEMENT SHOWING NET WORKING CAPITAL AMOUNT

REQUIREMENT

CURRENT ASSETS:-

Stock of raw material (4104300000 * 209/365) 2350133424.00

Stock of work in progress (1497200000 * 212/365) 869606575.00

Stock of finished goods ( 639800000 * 6/365) 10517260.00

Amount blocked in debtors at sale ( 2139600000 * 13/365) 76204932.00

3306462191.00
LESS : CURRENT LIABILITIES :-

Sundry Creditors (8544800000 * 28/365) 655491507.00

Net working capital required (C.A – C.L) 2650970684.00

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INTERPRETATION:-
By preparing working capital budget it is find out
that total working capital required should be near about to 265.09 crore for ACC LTD.
Company in forthcoming year and net increase in working capital is 288.12 crore has been
calculated by preparing schedule of change in working capital with comparing current figures
with previous figures.

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 NEEDS OF STUDY

The study in itself a problem of how best to manage capital of a company i.e. ACC Ltd.
Therefore, needs for conducting the study are as follows:-
1. Due to time between production and sales, every company has maintain a substantial
portion of working capital to run its operation smoothly.
2. In case of manufacturing companies it is required to maintain about 40% - 50% of
their capital as current and remaining in the forma of fixed assets for the large scale
production of product. So, every manufacturing company needs to arrange required
working capital.
3. investment in current assets represents a substantial portion of total investment.
4. investment in current assets and the level of current liabilities have to be geared
quickly to change in sales, to be sure, fixed asets investment and long term financial
position are also responsive to variation in sales.

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 OBJECTIVE OF THE STUDY

The objectives aim is to highlight the reasons how important is the financial system and
financial statement for an organization or company. There are various objectives of the study are
as follows:
1. To study liquidity of the firm.
2. To study smoothly flow of funds and its application
3. To estimate working capital requirement in future
4. To study short term financial position

RESEARCH METHODOLOGY

Our research project has a specified framework for collecting the data in an effective manner.
Such framework is called “Research Design”. The research process which was followed by our
consisted of following steps:

Defining the problem & Research Objectives:- The definition of problem includes the study of
financial system in ACC Ltd. GAGAL CEMENT WORKS.

Developing The Research Plan:- It is very important to research anything we must know about
the it’s main sources where we get the main information regarding the research plan the
development of research plan has following steps:-

Data Sources:- There are two types of data were taken into consideration i.e. Secondary data and
primary data. The secondary data has been used to make the analysis because we have no much
sufficient time and resources to collect the primary data.

Secondary data:- secondary data is that data which is collected for other purpose. This is indirect
collection of data from sources containing past or recent past information like annual report,
balance sheet, books, newspapers and magazines etc.

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Collecting the information:-For this research methodology, we were collecting information with
the help annual reports, balance sheet and other companies publications.

Analyse the information :- In this research methodology the next step is to extract the pertinent
finding from the collected data. We tabulated this collected dada and develop the means of
analyzing the data. There are so many tools for financial analysis but we mainly concentrate on
the RATIO analysis and supportive information taken from the other means i.e. comparative
financial statement with its major components viz. common size statement, comparative
financial statement.

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 REFRENCES

86Th ANNUAL REPORT (ACC LTD.) 2020-2021

FINANCIAL MANAGEMENT SHASHI. K. GUPTA

I.M. PANDEY
MANAGEMENT ACCOUNTING SHARMA & GUPTA
WEBSITE www.accltd.com

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 APPENDICES

 Learning and Motivation, Volume 41, Issue 2, May 2010, Pages 84-94

 Cement and Concrete Research, Volume 33, Issue 6, June 2020, Pages 807-814

 Journal of Memory and Language, Volume 48, Issue 2 February 2020, Pages304-319

 www.acclimited.com/newsite/cement.asp

 www.ibef.org/industry/cement-india.aspx

 Info.shine.com>industry information

 www.understanding_cement.com/history.html

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