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

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

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

Katni arts and Commerce College

February 2014
Submitted to
CA. Sharad Nirankari
(H.O.D. BBA)

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:

RDVV
UNIVERSITY
(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)

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

CONTENT

Chapter No.

1
1.1
1.2
1.2.1
1.2.2
1.2.2.1
1.3
2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
3

Declaration by candidate
Bonafide certificate
Acknowledgement

Page No.
Ii
Iii
Iv

Introduction
Cement
History
Early use
Modern use
Types of modern cement
Curing
About the company
General info
Companies profile
Performance highlights
Financial highlights
Financial analysis
Plant layout
Products offered
Market strategies
SWOT analysis

6
7
7
7
7-8
9
9
10
11
14
18
25
26
33
39
40
42

INTRODUCTON

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, cment, and cement.
Cements used in construction can be characterized as being either hydraulic or nonhydraulic. 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
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 515
minutes. The success of "Roman Cement" led other manufacturers to develop rival
products by burning artificial mixtures of clay and chalk.
John Smeaton made an important contribution to the development of cements when
he was planning the construction of the third Eddy stone Lighthouse (17559) 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 alitebased 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.
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.
9

10

ABOUT THE COMPANY

11

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 Indias 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.

12

ACC headquarters Cement House in Mumbai

13

Pioneer of Indian Cement Industry with a Rich Heritage

14

Companys 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 countrys 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. ACCs brand name is synonymous with cement and enjoys a high level of
15

equity in the Indian market. It is the only cement company that figures in the list of
Consumer Super Brands of India

16

Manufacturing Excellence

17

Nationwide Presence

18

14 cement plants- capacity of

30 million tons/annum
21 sales units, 66 area offices
55+ RMX plants
10,000 dealers

19

Performance Highlights

SALES VOLUME & GROWTH

NET SALES, OPERATING EBITDA &

OPERATING EBITDA MARGIN

20

PROFIT BEFORE TAX & PROFIT AFTER TAX

CAPITAL EMPLOYED &

RETURN ON CAPITAL EMPLOYED

21

22

NET WORTH & RETURN ON NET

WORTH

DIVIDEND PER SHARE, EARNING PER

SHARE & DIVIDEND PAYOUT RATIO*

23

NET CASH GENERATED FROM

OPERATIONS

CEMENT PRODUCTION & CAPACITY

UTILIZATION

24

25

NET FIXED ASSETS & ASSET TURNOVER

RATIO

EMPLOYEES AT THE YEAR END

&TURNOVER PER EMPLOYEE

26

BOOK VALUE PER SHARE

ECONOMIC VALUE ADDED (EVA)

27

Cost & Profit as a Percentage of Total Income

28

2012 2011 2010

2009

2008

Crore
2007 2006 2005* 2004-05 2003-04

INCOME STATEMENT
Net Sales
Operating EBIDTA
Profit before Tax
Profit after Tax

11,130 9,430 7,710

2,196 1,921 1,812
1,451 1,540 1,461
1,061 1,325 1,120

7,967
2,644
2,294
1,607

7,126
1,899
1,737
1,213

6,905 5,803 3,221

1,993 1,717 616
1,930 1,620 684
1,439 1,232 544

3,902
715
444
378

3,284
496
254
200

BALANCE SHEET
Net Worth
Borrowings
Net Fixed Assets
Cash and cash equivalents#
Current Assets
Current Liabilities
Capital Employed

7,383 7,192 6,469

163 511 524
6,175 6,573 6,548
3,037 2,832 2,288
3,198 3,791 2,851
3,863 3,768 3,746
8,063 8,221 7,355

6,016
567
6,113
1,876
2,458
3,114
6,932

4,928
482
4,717
1,438
3,116
2,766
5,746

4,153 3,142
306 771
3,741 3,396
1,489 1,080
2,426 2,006
2,221 1,672
4,791 4,234

1,585
1,408
2,835
57
1,251
1,076
3,301

1,319
1,353
2,451
114
1,061
941
2,982

SIGNIFICANT RATIOS
Operating EBIDTA/ Net sales
Return on Capital Employed
Return on Net Worth
Current Ratio
Debts Equity Ratio
Price Earnings Ratio
Net worth per Share (`)
Dividend per share (`)
Basic Earnings per Share (`)

20% 20% 24% 33% 27% 29% 30%

21% 18% 20% 34% 29% 36% 41%
14% 18% 17% 27% 25% 35% 39%
0.83 1.01 0.76 0.72 1.00 0.99 1.15
0.02 0.07 0.08 0.09 0.10 0.07 0.25
25.15 16.29 18.04 10.23 7.39 13.74 16.44
393 385 345
320
263
221 168
30.00 28.00 30.50 23.00 20.00 20.00 15.00
56.52 70.59 59.66 85.60 64.63 76.75 66.02

CASH FLOWS
Net cash provided by/ (used in)
Operating activities
Investing activities
Financial activities

2,130
1,071
3,047
348
1,496
1,335
3,508

19% 18% 15%

19% 16% 12%
34% 24% 15%
1.06
1.13
1.11
0.50
0.89
1.02
17.74 17.25 21.62
115
89
74
8.00
7.00
4.00
30.02 21.23 11.68

1,577 1,571 1,935 2,397 1,708 2,023 1,422 644

(311) (258) (812) (1,505) (1,170) (824) (483) (181)
(1,066) (768) (621) (455) (297) (1,075) (423) (419)

598
(519)
(87)

478
(415)
(33)

Financial Highlights

*Pertains to 9 months period

#Cash and cash equivalents includes investment in short term deposits and mutual funds
Current maturities of Long-Term Borrowings have been included in Borrowings excluding the same
from current liabilities.

29

Financial Analysis of ACC Limited

The following table set forth the breakup of the Companys expenses as part of
the Revenue from operations (Net)
Figures in ` Crore
% of Net
% of Net
2011
sales
Sales
Revenue 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-trade
Employee 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%

2012

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):
2012
10,513.38
605.80
11.27
227.51
11,357.96

Cement and Clinker

Ready Mix Concrete
Sale of services
Other operating revenue
TOTAL

2011
9,417.22
12.40
230.67
9,660.29

Figures in ` Crore
Change
Change%
1,096.16
12%
605.80
100%
(1.13)
-9%
(3.16)
-1%
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.

30

2. Other Income:

Other income

2012
264.82

Figures in ` Crore
2011
Change
Change%
191.91
72.91
37.99%

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

3. Cost of material Consumed:

Cost of material consumed

2012
1,605.52

2011
1,140.30

Figures in ` Crore
Change
Change%
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

Cement

2012
92.20

Ready mix concrete

TOTAL

2011
169.78

Change

Change%

(77.58)

-46%

66.55

66.55

100%

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
Power and fuel

2012
2,382.26

2011
2,183.30

Change

Change%

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

Employee benefit expense

2012
616.65

2011
533.01

Change

83.64

Employee benefit expenses increased due to normal increments in salary.

31

Change%

15.69%

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

Freight and Forwarding expense

2012
2,233.36

201
1
1,894.44

Change

338.92

Change%

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
Consumption of packing materials
Repairs
Royalties
Discount, Rebates and Allowances
Rates and Taxes
Advertisement
Excise Duties
Rent
Insurance
Consumption of stores and spares
Miscellaneous Expenses
Total

2012
381.53
515.74
130.85
83.16
115.66
102.58
88.47
31.59
24.67
33.03
638.54
2,145.82

2011
344.94
455.45
138.19
84.00
109.29
106.90
103.94
18.96
18.58
36.04
496.84
1,913.13

Change

36.59
60.29
(7.34)
(0.84)
6.37
(4.32)
(15.47)
12.63
6.09
(3.01)
141.70
232.69

Change%

10.61%
13.24%
-5.31%
-1.00%
5.83%
-4.04%
-14.88%
66.61%
32.78%
-8.35%
28.52%
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.

32

9. Depreciation and Amortization expense:

Figures in Crore
2012
558.88

Depreciation and Amortization expense

2011
475.30

Change

83.58

Change%

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
114.65

Finance cost

2011
96.91

Change

17.74

Change%

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
5,858.86
5.01
311.30

Tangible assets
Intangible assets
Capital Work in progress

2011
6,206.26
1.27
365.63

Change

(347.40)
3.74
(54.33)

Change%

-5.60%
294.49%
-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
194.67
2,358.88
2,553.55

Non-current investments
Current investments
TOTAL

2011
445.10
1,179.85
1,624.95

Change

(250.43)
1,179.03
(928.60)

Change%

-56%
100%
-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
33

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
564.20
323.29
887.49

Long-term loans and advances

Short-term loans and advances
TOTAL

2011
447.88
332.32
780.20

Change

Change%

116.32
(9.03)
107.29

26%
-3%
40%

Long-term loans and advances increased mainly due to increase in capital advances
for Jamul expansion project.
13. Inventories:
Figures in Crore
Stores & Spare Parts and Packing Material
Other inventories
TOTAL

2012
286.02
847.53
1,133.55

2011
236.37
863.17
1,099.54

Change

Change%

49.65
(15.64)
34.01

21%
-2%
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
303.45

Trade receivables

2011
187.74

Change

Change%

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
165.84
28.80
194.64

Other non-current assets

Other current assets
TOTAL

2011
56.14
15.00
71.14

Change

109.70
13.80
123.50

Change%

195%
92%
174%

Other non-current assets have gone up due to accrual of incentive receivables from
34

Government under various incentives schemes.

17. Long-term borrowings:
Figures in Crore

2012
82.00
3.03
85.03

Secured borrowings
Unsecured borrowings
TOTAL

2011
500.00
6.08
506.08

Change

(418.00)
(3.05)
(421.05)

Change%

-83.60%
-50.16%
-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
381.09
1,515.81
1,896.90

Other Long-term liabilities

Other current liabilities
TOTAL

2011
372.26
1,517.06
1,889.32

Change

8.83
(1.25)
7.58

Change%

2.37%
-0.08%
0.40%

Other liabilities have increased marginally as compared to previous year.

19. Provisions:
2012
157.21
1,226.88
1,384.09

Long-term provisions
Short-term provisions
TOTAL

2011
123.06
1,049.94
1,173.00

Figures in Crore
Change
Change%
34.15
28%
176.94
17%
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.

35

20. Trade Payables:

2012
660.49

Trade payables

Figures in Crore
2011
Change
Change%
710.26
(49.77)
-7.01%

Trade payables have decreased marginally as compared to previous year.

21. Cash Flow:
2012
1,577.00

Net cash flow from operating activities

Figures in Crore
2011
Change
Change%
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.
2012
310.65

Net cash flow from investing activities

2011
258.24

Figures in ` Crore
Change
Change%
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.
2012
Net cash flow from financing activities

1,066.02

2011
768.32

Figures in ` Crore
Change
Change%
297.70

38.75%

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

36

Plant layout

Acc cement plant

37

Plant layout

38

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 (ElectroStatic 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 companys greening efforts even within the plant premises have ensured a
cleaner, relatively dustfree environment.

39

Ltd

ACC Ltd

40

Bag Houses: Reducing & Reusing ACC

Covered Conveyors, but emissions fugitive

Alternate Fuels & Raw Materials (AFR)

Pine Needles: An Alternative

Fuel?

41

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 coprocessing 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 coprocessing, however, provides a wonderful business opportunity for ACC.
The AFR division spent its first few years in selfeducation on waste coprocessing
and then educating and making the state Government, MoEF and other stake
holders aware of the potential of cement plants in waste coprocessing. 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
coprocessing. Coprocessing is a service which ACC extends to companies
generating waste. At present, 10 15 tonnes of waste is coprocessed 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, previouslyagreedupon nature, then it is let in the plant
campus and is sent for coprocessing.
The team was informed that currently; ACC has agreements with Hindustan
Unilever Limited (HUL) and the Kullu Municipality to coprocess their waste. In
the case of HUL, ACC coprocesses all trade rejects and expired products from
HULs 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 coprocessed. 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 coprocessing, an integrated waste management
system for the entire township would go a long way in developing it as a model
township.
42

Products offered
Cement

Concrete products

Ready mix concrete

Clinker

43

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. Competitors price and offering
Marketing Strategy
Company conducts market surveys to identify market trends and customers
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 competitors activities and its offerings
likedifferent promotional schemes, product price etc. It also takes proper action acco
rding tocompetitors strategy.
Distribution Strategy
The company is distributing cement by following ways:1. Direct to consumer
2. Depot:Whole seller
Retailer
44

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.

45

SWOT ANALYSIS

46

STRENGTH

THREATS

SWO
T

OPPORTUNITI
ES

47

WEEKNESS

Strengths
1. It is having a good image and brand loyalty among consumers.
Service is good
2. They have same
stockiest retailers end.

price

prevailing for

wholesale at

dealers

Weakness
1. The competitors are doing much promotional activity rather than acc limited
thats 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 Indias 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.

48

Thank you

49