A PROJECT REPORT

ON

“FINANCIAL ACCOUNTING

REAL LIFE STUDY

ON

COST ACCOUNTING”

BY

RATKAL SHIVAKANTH

PGP/FW/09-11/ISBE/1209

1

CEMENT CORPARATION OF INDIA LIMITED

TANDUR CEMENT FACTORY

R.R. DIST. A.P. - 501 158

“Practice makes more perfect”

In the field of management every time there is a requirement of understanding or practical aspect

of the organization with managerial mind. There is requirement to go for practical training of any

subject supplement to the theoretical knowledge and clarified concept.

It is more applicable in the field of the management especially a professional course like M.B.A.

Moreover IIPM Business School, has prescribed two month project report training during the II

Sem. as a part of M.B.A programmers my training at the CEMENT CORPORATION OF INDIA

LIMITED to comply with this requirements also.

The project report includes various aspects like cost audit report , balance sheet ,& cash flow

statement of the company and which provide perfect direction of production made during the

year . The data collections were by annual cost audit report of the company, web related to the

cement association and discussion with concerned employees and experts.

At the end findings and suggestions are reported.

I hope this serves the Purpose.

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Words are indeed inadequate to convey my deep sense of gratitude to all those who have helped me in

completing this summer project to the best of my ability. Being a part of this project has certainly been a

unique and a very productive experience on my part.

I am really thankful to, Mr. I.C JAIN ACA Sr.Manager (Fin), CCI Ltd, Tandur Cement

Factory for making all kinds of arrangements to carry the project successfully and for guiding and

helping me to solve all kinds of quarries regarding the project work. His systematic way of working and

incomparable guidance has inspired the pace of the project to a great extent.

I would also like to thank my mentor and project – coordinator, Ms. R. Raghunatham,

Officer(Accounts) for assigning me a project of such a great learning experience and acquainting me

with real life project financing and appraisal.

I am very grateful to Mr.Pankaj (Training & Placement Officer) IIPM Business School,

Hyderabad Who has given me the opportunity to do this project in the cement Corporation of India

Ltd. and very thankful to all lecturers of IIPM Business School, Hyderabad for their useful guidance

and advise.

This project would not have been successful without the help of Dr .N.C.G.NAIR Deputy

General Manager (persona & Administration Department) of CCI.

Last but not least I would like to thank all the employees of Cement Corporation of India Ltd.

who have directly or indirectly helped me with their moral support for the completion of my project.

RATKAL SHIVAKANTH

3

CH.

NO.

PARTICULARS PAGE

NO.

1 INTRODUCTION OF CEMENT INDUSTRY 1

Cement industry in India

Sector structure/market size

Key points

7

8

2 INTRODUCTION OF CCI

History & Company profile

Plants of Cement Production

Working units

Product profile

Objectives

Awards & Achievements

9

10

11

3 COST ACCOUNTING:

Objectives

Advantages

Limitations

11

12

4

4 Analasis

COST AUDIT REPORT

Overall financial position

Capacity utilization

Non-cost items & abnormal cost & income

Cost of production

Net sales realization

System of allocation expences

Current year profit

Break even point

Capacity utilization

Non-moving stores &spares

Budget preparation

Default in payment

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5 ANNEXURE TO THE COST AUDIT REPORT

GENERAL

COST ACCOUNTING SYSTEM

MANUFACTURING PROCESS OF CEMENT

QUANTITATIVE DETAILS

MAJOR INPUT MATERIAL

BREAK-UP OF COST OF INPUT MATERIAL

POWER, FUEL AND UTILITIES

SALIRIES &WAGES

REPAIRS&MAINTENANCE

FIXED ASSETS REGISTER &DEPRECIATION

GROSS BLOCK,DEPRECIATION&LEASE RENT

OVERHEADS

22

5

RESEARCH AND DEVELOPMENT EXP

ROYALITY&TECH KNOW HOW CHARGES

QUALITY CONTROL EXPENCES

POLLUTION CONTROL EXP

ABNORMAL NON-RECURRING COSTS

NON-MOVING STOCK

WRITTEN OFF STOCK

INVENTORY VALUATION

SALES OF PRODUCT UNDER REFERANCE

MARGIN PER UNIT OF OUTPUT

COMPETITIVE MARGIN AGAINST IMPORT

VALUE ADDITION & DISTRIBUTION OF EARNINGS

FINANCIAL POSITION &RATIO ANALYSIS

CAPITALISATION OF REVENU EXPENDITURE

CENTRAL EXCISE RECONCILATION

PROFIT RECONCILATION

BALANCE SHEET FOR THE YEAR 2008-09

BASICS OF ACCOUNTINCOST ACCOUNTING SYSTEM

PRODUCTION FLOW CHART

CASH FLOW STATEMENT

CHARTS

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1.CEMENT INDUSTRY IN INDIA

            Cement is a key infrastructure industry.  It has been decontrolled from price and

distribution on 1st March, 1989 and delicensed on 25th July, 1991.   However, the performance of

the industry and prices of cement are monitored regularly. The constraints faced by the industry

are reviewed in the Infrastructure Coordination Committee meetings held in the Cabinet

Secretariat under the Chairmanship of Secretary (Coordination). Its performance is also reviewed

by the Cabinet Committee on Infrastructure. Fast rising Government Expenditure on

Infrastructure sector in India has resulted in a higher demand of cement in the country. In the

same direction, participation of larger companies in the sector has increased.

Sector structure/Market size

India is the second largest cement producer in the world after China. The cement industry in

India is dominated by around 20 companies, which account for almost 70% of the total cement

production in India. In the present year, the Indian cement companies have produced 11 MT

cement during April-September 2009. It took the total cement production in FY09 to 231 MT.

 With the boost given by the government to various infrastructure projects, road networks and

housing facilities, growth in the cement consumption is anticipated in the coming years.

According to Jyotiraditya Scindia, Minister of State, Ministry of Commerce and Industry,

cement production could rise to 236.16 MT in FY11 and touch 262.61 MT in FY12.

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With almost total capacity utilization levels in the industry, cement dispatches have maintained a

10 per cent growth rate. Total dispatches grew to 170 MT during 2007–08 as against 155 MT in

2006–07.

Key Points

Supply The demand-supply situation is tightly balanced with the latter being

marginally higher than the former. 

Demand Housing sector acts as the principal growth driver for cement. However, in

recent times, industrial and infrastructure sector have also emerged as demand

drivers for cement. 

Barriers to

entry

High capital costs and long gestation periods. Access to limestone reserves

(principal raw material for the manufacture of cement) also acts as a significant

entry barrier.

Bargaining

power of

suppliers

Licensing of coal and limestone reserves, supply of power from the state grid

and availability of railways for transport are all controlled by a single entity,

which is the government. However, nowadays producers are relying more on

captive power, but the shortage of coal and volatile fuel prices remain a

concern. 

Bargaining

power of

customers

Cement is a commodity business and sales volumes mostly depend upon the

distribution reach of the company. However, things are changing and few

brands have started commanding a premium on account of better quality

perception.

Competition Due to large number of players in the industry and very little brand

differentiation to speak of, the competition is intense with players resorting to

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expanding reach and achieving pan India presence.

2. CEMENT CORPORATION OF INDIA

CCI or the Cement Corporation of India is a leading manufacturer of cement in India. The high

class products matched with the professional approach of the company makes it one of the

leading business houses in this segment in the country. The CCI Cement Plants make use of the

best facilities and services for the production of high quality brands and products. More and

more firms and organizations across the country are opting for the products of the Cement

Corporation of India. 

Cement plants of CCI  

The different cement plants of CCI are located in a number of locations across

the country. Presently there are 10 units which produce a total capacity of around 38.48 lakh

tones of cement on a yearly basis. To cater to the different market segments across the country,

the CCI Cement Plants are located in various states from Assam in the east to Karnataka in the

south. There is also a high class grinding unit that is located in the capital city of Delhi. The chart

provided below gives an ideal of the idea of the location of the cement plants of CCI or Cement

Corporation of India.

The high class cement plants of CCI use sophisticated gadgets and other facilities of high

standard which comply with the international standards. The equipments that are used are fully

equipped with environment friendly facilities which make the cement manufacturing process

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fully free from pollution. The company has also put emphasis on water conversation and

recycling of the waste produced in the cement production process. 

Working units

1)Tandur cement corporation of India

2)bokajan cement corporation of India

3)rajban cement corporation of India

Tandur unit was started in 1st july 1987.Its production capacity is in lakh tones. It is one of the

largest of all units. It is high position in profits. It is India’s largest income getting unit

PRODUCT PROFILE OF CCI CEMENT

i. Poorna shakti-33 grade

ii. Maha shakti-43 grade

iii. Param shakti-53 grade

iv. Railway sleeper grade-53s grade

v. Jal shakti - portland pozzolona cement

OBJECTIVES OF CCI:

To emerge resultants as the largest seller of cement in the country and to continue to

perpetuate and improve upon the same position by constant increase in the production

capabilities

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To emerge as a growing and important leader in the production of cement in the country

by creating additional capacity either by expansion or by improved technology or by

setting up new cement plants.

To achieve a pioneering and leading position in the exploration prospecting and proving

cement grade limestone reserves and deposits to sustain ambitious growth plans of the

corporation in particular and of the cement industry in general

AWARDS OF TANDUR UNIT:

It is given by IBM

1. mine and coal 2nd prize (2007-08)

2. Topsoil water 2nd prize (2007-08)

3 .Air quality management 1st prize (2006-07)

3.COST ACCOUNTING

OBJECTIVES OF COST ACCOUNTING:

The objectives of cost accounting are:

To ascertain and analyze costs: the primary objective of cost accounting is to ascertain and

analyze costs incurred on the production of various products, jobs and services, etc.

To control costs: cost accounting has developed various techniques such as standard costing and

budgetary control for controlling costs.

To fix the selling price: cost accounting provides reliable data on the basis of which selling price

can be fixed.

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To reduce costs: of late, the objectives of cost accounting have been extended to reducing costs.

Value analysis, time and motion study, standardization, simplification, etc. are important

techniques of cost reduction.

To prepare monthly or quarterly cost statements for periodic review of operating results.

To provide useful information for planning and control and for taking various decisions

regarding increase in production, installation or replacement of machine, the making or buying

of a component, continuing or closing down of business, etc

ADVANTAGES OF COST ACCOUNTING:

The following are the advantages of cost accounting:

Cost accounting is very helpful in controlling expenditure and economizing in the manufacture

of products.

Cost accounting relates various expenses to their functions and provides an effective instrument

for control over such expenses.

Cost accounting provides useful data not only about product costs but also about production

efficiency and performance.

It helps the management to initiate action to rectify delays, inefficiencies and wastage.

Centralization of purchasing is facilitated by the use of cost accounting.

Maintenance of time and jobs records for workers reveals losses incurred due to idle time. Such

records assist in taking steps to minimize these losses.

A cost accounting system provides information about availability of materials, labor, and

machine capacity. In the absence of such information, proper production plans cannot be drawn

up.

Cost accounting entails identifying normal and abnormal losses and gains. This task becomes

simpler when standards are set up.

Cost accounting lays the basis for the system of standard costing and budgetary control. These

two are instrumental in the control of expenditure. Variance analyses and comparison of actual

performance with budgets pinpoint areas where economies can be affected.

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Cost accounting data are very useful for the management for planning carious activities. A wise

manager takes a decision only after he has carefully studied the cost implications of carious

alternatives.

LIMITATIONS OF COST ACCOUNTING:

In spite of so many advantages, some people feel that cost accounting is an unnecessary

luxury for business establishments. This is not true. Perhaps they feel so because of a few

limitations of cost accounting such as:

Cost accounting is not an exact and foolproof science. Classification of cost into its elements,

pricing of material issues on the basis of average or standard costs, etc., appointment and

allocation of joint costs and overheads to joint/by-products and cost centres, division of

overheads into fixed and variable, division of costs into normal and abnormaln, controllable and

uncontrollable, etc., are based on conventions, estimation and arbitrariness. The information

provided by a cost accountant, therefore, may not be necessarily being absolutely true.

It may be noted that such limitations are also found in any other

system of accounting. Principles and practice of cost accounting are based on sound reasoning

and keen common sense.

4.ANALYSIS

COST AUDIT REPORT

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I A. Ramachandra Rao, having been appointed as Cost Auditor under Section 233B of the Companies Act, 1956 (1 of 1956) of M/s. Cement Corporation of India Limited, Tandur Cement Unit having its registered office at Core 5, Scope Complex, 7 Lodhi Road, New Delhi – 110 003, (hereinafter referred to as the company), have examined the books of account prescribed under clause (d) of sub-section (1) of section 209 of the said Act, and other relevant records in respect of the unit Tandur Cement Factory, Karankote, RR Dist – 501 158, A.P, for the financial year 1st April 2008 to 31st March 2009, relating to CEMENT maintained by the company and report, in addition to my comments in para 3 relating to auditor’s observations and suggestions, that-

1. OVERALL FINANCIAL POSITION:

The capacity utilization and profits, ahieved by the Tandur Cement Factory, a Unit of Cement Corporation of India Limited, for the current year and previous two years are as follows:

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2. CAPACITY UTILISATION:

It can be seen that the capacity utilization has been 61.50% in 2007-08 and it has increased to 68.34% in 2008-09. There is an increase of 6.84% of capacity utilisation during current year compared to previous year. However, after considering the present favourable market condition. the capacit utilisation needs to improve further.

3. NON-COST ITEMS AND ABNORMAL COSTS AND INCOME:

During 2008-09 all the costs and income have been looked into and abnormal costs, non-cost items and other income have been specifically identified and excluded from the costs. The items excluded relate to prior period expenses (Rs. 37.07 lakhs), non cost items (Rs. 163.12 lacs), E/D adjustments (Rs 24.62 lacs), abnormal cost relating to captive power generation (Rs.98.51 lakhs), excess provision written back (Rs.147.63 lakhs), FBT. (Rs.8.80 lakhs), Prior period Income( Rs.19.27 lakhs), ACR/DEC in stocks (Rs.21.70 lakhs), Provision for doubtful debts (Rs 8.15 lakhs) etc. The rest of the expenditures have been taken in costs.

4. COST OF PRODUCTION: (upto packing stage):

The cost of production of cement (upto packing stage) has increased in 2008-09 by Rs.25.91 per MT i.e. from Rs.1553.35 per MT in 2007-08 to Rs.1579.26 per MT in 2008-09. This is due to increase in input costs like Iron ore and Gypsum, packing material cost, cost of coal, Salaries, cost of stores and spares etc.

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4.1. LIMESTONE & SHALE:

Limestone and shale overburden cost DRE is being absorbed to limestone cost and shale cost on the basis of fixed percentage of quantity raised every year i.e. 10% in case of limestone raised and 20% in case of shale raised. This system need to be reveiwed since huge amount of overburden cost is lying unadjusted in the books of account since long. As on 31.03.2009, the unabsorbed overburden cost still stands at Rs.201.89 lakhs against opening balance of Rs.220.12 lakhs. Presently as the unit is earning profits, it is now the time to review for quick recovery of this expenditure.

4.2. POWER:

1. The power consumption has decreased from 134.98 units in 2007-08 to 129.73 units in 2008-09 i.e. decrease by 5.25 units per MT of cement. There is decrease in the average Power cost from Rs.2.60 per Kwh in 2007-08 to Rs.2.24 per Kwh in 2008-09. There is enough scope to bring down power consumption further. If consumption rate comesdown to 120 units per MT of cement, which is the internal norm, there will be a saving Rs.21.80 per MT of cement and this is a direct substantial saving amounting to Rs.1.49 Crores. Every effort should be made to reduce power consumption at least to achieve internal norm which itself is very high compared to present industrial norm.

2. The total purchased power during 2008-09 is 89636980 units. The transit losess included in the purchased units, which worksout to 2563410 units i.e. 2.86% of the total units purchased. This loss is higher side and efforts may be made to minimise the transit losess.

4.3. CAPTIVE POWER:

There are seven DG sets in the unit includes three HT and four LT as per records. There is no generation of power from DG sets during the year 2008-09 as there is adequate power available from state grid which is of lower cost than DG power generation cost.

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An investment of Rs.13.66 crores was made in March 1999 in installation of one DG set for Captive Power Generation. But this is not put to regular use due to the reason that the cost of purchase of electricity has been found to be cheaper than the cost of captive power generation. An expenditure of around Rs.93.93 lakhs relating DG cost centre has therefore been treated as abnormal during 2006-07 and taken to reconciliation in Para 28. Similar expenditure amounting to Rs.92.84 lakhs in 2007-08 and Rs.93.93 lakhs in 2006-07 have been shwon as non-cost items. This asset requires review for better utilisation at the time of expansion or during non-availability of power from state grid.

4.4. COAL:

The consumption of coal has been around 232.25 Kg per MT of clinker in 2008-09 as compared to 239.40 Kg in 2007-08 and 224 Kg in 2006-2007. It is informed, that this decrease in coal consumption by 7.15 Kg per MT in current year is due to less stoppages in kiln operation. Measures must be taken to bring down coal consumption while taking care of quality. A norm of 200 Kg coal consumption per MT of clinker is a reasonable figure which should be aimed and achieved.

4.5. STORES AND SPARES:

Stores and space consumption for 2008-09 per MT of cement is Rs 130.98 as against previous year consumption of Rs.131.05.The reason for decrease is due to higher production of cement during current year compared to previous year

4.6. INTEREST CHARGES:

During 2008-09, The unit earned an income of Rs 1506.20lacs and Zonal office Rs 11.90 lacs as interest income on FDR investments. Against this, the interest charge for the unit is Rs 379.34 lacs and Zonal office charge is Rs 221.80 lacs. The net income is Rs 16.98 lacs. This has been

17

considered in Proforma "K" to arrive at th total cost of cment sold. This positio has reduced the cost of cement by Rs 134.12 per MT in 28-09 compared to reduction of Rs 35.16 per MT in 2007-09.

4.7. FACTORY OVERHEADS:

Compared to 2007-08 there has been increase of over heads by 6.12% in 2007-2008 i.e. from Rs.273.59 lakhs in 2007-08 to Rs.176.77 lakhs in 2008-09 (Para - 12A). There is increase in salary & wages under factory overheads compared to previous year.

4.8. ADMINISTRATION OVERHEADS:

During 2008-09 there has been reduction by Rs.96.82 lakhs (ie 35.39%) compared to 2007-08 i.e. Rs.273.59 lakhs in 2007-08 decreased to Rs.176.77 lakhs in 2008-09 (Para 12-B). However there is increase in controlable revenue heads like Salaries & Wages by Rs 41.94 lakhs, increase in advertisement expenses by Rs 7.75 lakhs, increse in stores and spares by Rs 4.30 lacs, increase in repairs by Rs 4.15 lacs, increase in T.A expenses by Rs 3.31 lacs, increase in office expenses by Rs 6.75 lacs and increase in C.O expenses by Rs 58.44 lacs. Management stated that the increase in slaries & wages and C.O expense is due to implementation of 6th pay commision pay to CDA, IDA employees in 2008-09, increase in advertisement is due to increase in advertisement tariffs and increase in office expenses, stores and spares, repairs and T.A expenses is due general increase in price index. However, these areas are to be kept under watch.

4.9. SOCIAL OVERHEADS:

During 2008-09 there has been increase by Rs.18.45 lakhs compared to 2007-08 i.e. Rs.141.94 lakhs in 2007-08 increased to Rs.160.39 lakhs in 2008-09. This increase is mainly due to increase in salaries and medical expeses, repairs , canteen, other welfare expenses, stores & spares and G.H expenses. (Para 12-C).

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4.10. SELLING OVERHEADS:

During 2008-09 there has been a decrease by Rs.18.45 lakhs compared to 2007-08 i.e. Rs.104.47 lakhs in 2007-08 decreased to Rs.87.99 lakhs in 2008-09 (Para 12-D). This decrease is due to reduction in railway siding expenses in 2008-09.

4.11. DISTRIBUTION OVERHEADS:

During 2008-09 there has been decrease by Rs.198.11 lakhs compared to 2007-08 i.e. Rs.2353.42 lakhs in 2007-08 decreased to Rs.2155.31 lakhs in 2008-09 (Para - 12D). The decrease is mainly due to more rail dispatches in 2008-09 compared to previous year instead of despatches by road.

4.12. ZONAL OFFICE EXPENSES:

The net Zonal office expensesexcluding interest. Provision for doubtful debts and accretion in stocks has been decreased by Rs 55.68 lacs compared to previous year . However, the major head (i.e.) Salaries and wages of Zonal office has increased by Rs 25.11 lacs (i.e) from Rs 121.33 lacs in 2007-08 to 137.44 lacs in 2008-09 due to implementation of 6th pay commision pay for CDA, IDA employees in 2008-09 to Zonal staffs.

5. NET SALES REALISATION:

During 2008-2009, the net sales realisation, excluding excise duty, has increased from Rs. 3116.26 per MT of cement in 2007-2008 to Rs.3252.76 per MT in 2008-09. Thus, the average increase worksout to Rs.136.80 per MT of cement, i.e. 4.38 % increase over 2007-2008. The sales prices have picked-up from January 2006 onwards, which is still contunuing.

6. SYSTEM OF ALLOCATION EXPENSES:

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The work shop service department cost are distributed on the basis of original value of plant & machinery installed in different cost centers. This system is not correct as the work shop expenses has no relationship with original cost of plant & machinery. In this connection, it is suggested to control this through job costing with due codification of all the jobs executed in the plant. This work can be done in computer with proper program.

7. CURRENT YEAR PROFIT

The current year profit of this unit as on 31st March 2009 has been Rs.9920.46 lakhs resulted in wiping off of cumulative loss and accumulation of Reserves and surplus by 524.61 lacs as per audited financial accounts. In the case of working capital, the net positon is Rs.8.91 Crores as against 2007-08 Rs.(-) 8.73 crores due to investment of surplus funds in FDRs during 2008-09.

8. ACHIEVING 100% CAPACITY UTILISATION:

This is very high time that the unit achieves 100% utilisation in the present market scenerio. In addition, further expension also can be looked into as the current market can absorb any level of production.

From the analysis of Machinery Report, the following is noted.

It is seen that stoppage hours have decreased in all machines and therefore the production as well as sales have gone up in current year compared to previous year. However, improvement to achieve ful utilisation of the plant is required.

In the light of above, the following areas need attention:

(i) Taking care of working capital requirement

(ii) Increase in capacity utilization; by reducing stoppage hours

(iii) Further reduction in power consumption per MT of cement;

(iv) Further reduction in coal consumption per MT of cement;

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(v) Further reduction in overhead expenditure

9. NON-MOVING STORES & SPARES:

The value of non-moving stock of stores and spares has been Rs.1142.33 lakhs for a period of twenty-four months and above. In the total inventory of stores and spares of Rs.1967.14 lakhs as on 31st March 2009, the value of non-moving stock works out of 58.07%. This needs to be reviewed by the management, and action to be taken for disposal of surplus stores and spares.

12. DEFAULTS IN PAYMENTS:

Regarding defaults in respect of payments due to Govt., Financial Institutions and Banks and penal interest levied thereon;

Reply: In case of Hyderabad Z.O. Sales tax demand for Rs.1570.05 lakhs has been received from Sales Tax Authorities. Appeals against their demands have been filed and stay orders obtained.

(f) steps required to strengthen the company under the competitive environment especially with regard to need for protection from cheaper imports, if any;

(g) export commitments of the company vis-à-vis actual exports for the year under review. Also comment on comparative profitability and pricing policy of the company for domestic and export sales. Give impact of exports benefits / incentives offered by the Government on export profitability;

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(h) the scope and performance of Internal audit of cost records, if any, and comment on its adequacy or otehrwise.

4. The Cost Auditor shall suggest measures for making further improvements in the performance in respect of cost control and cost reduction.

5. The Cost Auditor may also give his other observations and suggestions, if any, relevant to the cost audit.

ANNEXURE TO THE COST AUDIT

REPORT     

1. GENERAL:  1. (a) Name and address of the registered office of the company whose accounts are audited.

Cement Corporation of India Limited, Core-5, Scope Complex, 7, Lodhi Road, New Delhi – 110 003.

   (b) Name and address of the place where the cost accounting records are maintained viz. registered office, head office or factory.

Cement Corporation of India Limited, Tandur Cement Factory, Tandur, Karankote, Ranga Reddy Dist – 501 158. A.P.

   2. Name of the product and location of the unit to which the Annexure pertains.

Cement, Tandur Unit, A.P.

   3. The Company’s financial year to which the Cost Audit Report relates.

2007-2008 i.e. 1st April 2008 to 31st March 2009

   4. Date of first commencement of commercial production of the product under reference.

1st July, 1987

   5. Location of other sites manufacturing or producing or processing or mining the product or carrying out the activity under reference.

Factories Date of commencement

Units of comml. Production  ---------- ------------------------  a. Mandhar 19th July, 1970

  b. Kurkunta 01st Oct, 1972

  c. Bokajan 01st Apr, 1977

  d. Rajban 01st Apr, 1980

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  e. Akaltara 01st Apr, 1981

  f. Charkhidadri 01st Oct, 1981

  (sick unit taken over by CCI)  g. Nayagaon 01st Mar, 1982

  h. Adilabad 01st Apr, 1984

  i. Nayagaon Exp. 01st May, 1990

  k. Delhi Grinding 01st May, 1990

  Unit   6. Name and address of the Cost Auditor. Mr. A. Ramachandra Rao, Cost

Accountant,  6-3-1086/1/2, Rajbhavan Road,

Somajiguda, Gulmohar Avenue, Hyderabad – 500 082. A.P.

   7. Membership number of the Cost Accountant. In case of firm of Cost Accountants, name and membership number of all the partners.

M-428

8. Reference number and date of Government Order under which the Audit is conducted.

 

   9. Reference number and date of Government letter approving the appointment of the Cost Auditor.

52/327/CAB-89 dated 2.07.2009

   10. Date of Board of Directors’ meeting wherein the Annexure and Proforma to the cost audit report were approved.

Report approved in - Boarding meeting held on

   11. The number of Audit Committee meetings held by the company, and attended by the Cost Auditor during the year under reference.

Number of meetings held: Attended by the Cost Auditor: NIL

   12. Name, qualification and designation of the officer heading the cost accounting section or department of the company.

Mr. I.C.Jain, ACA. Sr. Manager (Fin), CCI Ltd, Tandur Cement Factory, A.P.

   13. In case of loan license / job work arrangement by the company, mention the name of the third party and location of the factory, where the product has been produced / manufactured.

Not applicable

   14. If there is any foreign technical collaboration for the product under reference, the following details shall be given;

NIL

   (a)     name and address of the foreign collaborators;     

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(b)     main terms of agreement:     (c)     amount of royalty, lump-sum payment, technical aid fee payable and the basis of calculating the same;

 

   (d)     whether the technical collaborator has contributed to the share capital. If so, the paid up share capital so held.     15. If the company is engaged in other activities besides the manufacture of the product under reference, the following details in respect of each such product or activity shall be given;

NIL

   (a)     list of the products or activities;     (b)     list of the products or activities for which Cost Accounting Records Rules have been prescribed under section 209(1)(d) of the Act.;     (c)     whether Cost Audit Order has been issued by the Government in respect of any of the products or activities. If so, number and date of the order.

 

   16. A printed copy of the Annual Report, containing audited Profit and Loss Account, Balance Sheet and Auditor’s Report in respect of the company’s financial year for which the report is rendered, shall be enclosed with the Cost Audit Report.

A copy of the audited financial accounts of Tandur Cement Factory, containing audited Profit and Loss Account, Balance Sheet and Auditor’s Report for the Financial year 1st April 2007 to 31st March 2008 is enclosed. Copy of Company’s Annual Report for 2007-2008 will be sent separately when it is made ready. In respect of Annexure to the Cost Audit Report figures relating to previous two years (2006-07 and 2005-06) have been taken by the Management from relevant years Cost Audit Reports to the extent available and balance information have been compiled and incorporated by the Management.

   2. COST ACCOUNTING SYSTEM: Cost Accounting System existing in the

factory is given below:    1. Briefly describe the cost accounting system existing in the company, keeping in view the requirements of the Cost Accounting Records Rules applicable to the class of companies manufacturing product under reference and also its adequacy or otherwise to determine correctly the cost of production, cost of sales, sales

The unit follows mercantile method of accounting based on double entry system. The accounts are codified for the Company as a whole to maintain uniformity of accounting. Receipts and expenditure are classified according to the nature of each item in accordance with the

24

realization and margin of the product under reference.

Accounting Manual. For costing of the product, process-costing system is adopted. For collection of costs, the factory is divided into production cost centers, service cost centers and overhead cost centers. There is also a non-cost center to collect expenses of non-cost nature. Voucher-wise details are analysed from the financial books allocated and apportioned to these cost centers as detailed below:

     1. RAW MATERIALS: The main Raw

materials used are limestone, shale, laterite and Gypsum. For all Raw materials, separate quantity records are maintained by production department, while priced stores ledgers are maintained for all items except for limestone and shale kept in the Accounts Department. The consumption of various raw materials are valued on the weighted average basis, including Coal & Packing Materials (yearly). Excise Duty on modvatable inputs is not considered while computing the weighted average cost of inputs.

     Limestone, shale and laterite are obtained

from the Corporation's own mines. On date there are four Mining Lease Areas, two for limestone and one each for shale and laterite. The mines of limestone are adjacent to factory, while the mine for shale is within one Km. distance from Factory & Laterite mine is at a distance of more than 45 Kms which is given on a contract for mining and transportation and paid a fixed rate per tonne of the material delivered at the factory. Limestone and shale are transported by departmental dumpers as well as through Private Contractors Dumpers to crusher and laterite is transported by the contractor to factory. Laterite is weighted in factory weighbridge on its receipt while the quantity of limestone and shale is determined on the basis of capacityof Dumper, and on the number of trips made either to crusher or to stockpile. The valuation of limestone and shale is made on the basisof actual expenditure incurred after apportioning and charging off the Quarry Development expenditure in accordance with the Accounting Policy of

25

  Corporation. All other Raw materials are normally received by Rail and unloaded through wagon trippler, which has got the automatic recording of the wight.

     In case of road receipts, the quantity is

accepted on actual weight through road weighbridge installed in the factory. Issues are accounted from the monthly reports prepared by the Production Department, issues are priced at only weighted average rate. Physical verification is also undertaken every month and year. Stock adjustments are made for any discrepancies found on physical verification through consumption.

     2. STORES & SPARES: Stores receipt

note is prepared for all stores material received. Receipts are valued at landed cost, which is calculated on the basis of invoice value excluding Modvat wherever is applicable plus freight, where directly identifiable. Weighted average price is used for valuing the issues. Bin cards are kept in stores while Price Stores Ledger is maintained in Accounts Department. Physical Verification of stores is made by the management as per perpetual inventory system.

     3. VALUATION OF SEMI-FINISHED AND

FINISHED GOODS: Finished and Semi finished goods are valued at lower of weighted average cost or net realisable value in financial accounts. In cost accounts, as per cost at the relevant stage.

     4. LABOUR: Payroll is computerised and

the monthly wages/salary are computed based on the attendance by the system of card punching. The payroll are maintained cost-center-wise. Summary of the payrolls is used for allocation to the cost centers.

    5. OVERHEADS: For the purpose of cost

allocation, the following cost centers have been adopted.

     A) Main Production Cost Centers:   1. Limestone raising & Shale raising  2. Crusher  3. Raw Mill

26

  4. Kiln  5. Cement Mill  6. Packing house     B) Service Cost Centers: Basis of

allocation  1. Power, including DG set - Units

consumed  2. Workshop - Depreciation

of Plant & Machinery  3. Civil Maintenance -

Depreciation of plant bldgs.  4. Material handling - Quantity

handled  5. Laboratory - Technical

Assessment  6. Water supply - Technical

Assessment  7. Railway siding and Loco - Quantity

handled  8. Coal Mill - Kiln (100%)     C) OVERHEADS COST CENTERS:   1. Administration Overheads   - Conversion Cost for clinker,

Cement grinding & packing   2. Social Overheads  - Direct employees in the Kiln,

Cement mill and Packinghouse.  3. Selling & Distribution   - Quantity of cement sold.     Overhead expenses incurred in the

Production centers and the overheads apportioned to factory from service and utility cost centers constitute factory, manufacturing overheads.

     6. DEPRECIATION: The Company adopts

the straight-line method of depreciation. The rates of depreciation is as per schedule XIV of the Companies Act as amended by Govt. of India, Department of Company Affairs, letter dt.16th December 1993. Depreciation on common assets are allocated along with overheads.

     7) ACCOUNTING FOR ROYALTY:

Royalty is paid on limestone & shale raised on the rates prescribed by the State Government. This is treated as a part of limestone cost.

 

27

  8) Accounting for Research and Development: For research and development activities separate account code is maintained and expenditure is collected. This is treated as a part of overheads.

     9) Accounting for packing cost including

cost of packing materials and packing overheads: Separate account codes for the above expenditures are there. These are collected and shown as a part of packing cost.

     10) Accounting for interest and Financial

Charges: Separate account codes are there for these expenditures. The company’s Corporate Office apportions, this expenditure once in a year to each of its units. Such expenditure is shown separately for each unit and taken into account for charging to each account code.

     In the cost statement these expenditures

are taken as provided in the Cost Audit guidelines.

     11) Accounting for Inter-unit Transfers:

These are adopted at actuals and accounted accordingly.

     12) Accounting for expenses incurred for

Pollution Control: Separate account code is maintained for collection of expenditure incurred for Pollution Control. This is taken as a part of overheads.

     13) Accounting for Sales Realisation and

Excise Duty, Taxes: The Sales Realisation and Excise Duty are accounted on the basis of actuals/accruals based on invoices raised.

     14) Inventory Valuation:   Raw Material : Valued on actual

cost basis;     Work-in-progress } Explained in para 3

above.  And Finished Goods }   2. Briefly specify the changes, if any, made in the costing system; basis of inventory valuation;

NIL

28

method of overhead allocation; appointment to cost centers / departments and final absorption to the product under reference etc; during the current financial year as compared to the previous financial year.   3. PROCESS OF MANUFACTURE: PROCESS TECHNOLOGY:   1. A brief note regarding the process manufacture along with flow chart covering, production, utility and service departments of the product:

The Tandur Cement Factory of Cement Corporation of India Limited is a 3000 TPD Dry Process, precalcinator based plant incorporating some of the modern concepts and equipments, which require minimum energy and ensure sustained operation. These modern concepts among others include single stage crushing system. Preblending stockpiles for limestone, shale and coal to smoothen out quality variation, grinding of raw meal and coal by vertical roller mill for energy conservation, high degree of environmental control by installing electrostatic precipitators in major units, latest pyro-processing technology by use of precalcinator automatic quality and production control of raw meal and most modern and efficient control and monitoring system adopting data supervisory computers for on line process programming, data logging and simultaneous display of process flow diagram.

     2. The raw material i.e. limestone is

received from the quarry which is usually less than 1 cubic meter size. It is crushed in the single stage impacter to a size of 75mm. It is then preblended in preblending stockpile. The crushed limestone along with the additives like laterite etc, is ground to the size 12-14 mm retained on 90 micron sieve, in a vertical roller mill. The powdered mill product i.e. raw meal is taken to the continuous blending silo for blending before feeding it to the preheater precalcinator system. About 80-90% of calcinations is achieved in the preheater precalcinator. The calcined (80-90%) material is fed to a coal-fired kiln, where it is burnt upto a temperature of 1350 C and clinker is formed. The clinker is passed through a grate cooler where it is cooled upto a temperature of 60 degree centigrade above ambient. The size of clinker is 85%

29

less than 25mm. The clinker can be stocked in the clinker silo and can be fed to the cement mill hoppers for grinding. The clinker is ground along with gypsum (upto 5%) to make Ordinary Portland Pozzolana cement.

     The clinker is also ground with Fly Ash

(upto 19%) and Gypsum (upto 5%) to make Portland Pozzolana Cement. The cement is stocked in the cement silos from where it is transported to the packing plant for packing into the bags. There is also provision for bulk loading of cement. The bagged cement is transported by road or by rail.

Encl: Manufacturing Process Flow Chart  

4 QUANTITATIVE DETAILS :

Particulars 2008-2009 2007-2008 2006-2005

       

1. Installed capacity * (in MT)

     

Multiple shift 1000000 1000000 1000000 2. Capacity enhanced during the year

0 0 0

by leasing arrangement etc.      3. Total available capacity (in MT)

1000000 1000000 1000000

30

       

4. Production during the year: (in MT)

683415.000

615000.000 696730.000

(a) self manufactured 683415.000

615000.000 696730.000

(b)third party on job work etc.

     

(c) loan license basis      

       

5. Total production quantity (in MT)

683415.000

615000.000 696730.000

       

6. Production as per Excise Records (in MT)

683415.000

615000.000 696730.000

7. Capacity utilisation percentage

68.340 61.500 69.673

8. Opening stock (finished quantity) (in MT)

15954.560 12000.232 7776.007

       

       9. Total available quantity (in MT)

699369.560

627000.232 704506.007

       10. Quantity captively consumed (in MT) – Factory

30.314 18.102 4.610

- Inter unit 5.000 7.000 12.000

11. Shortages 11.250 105.600 67.900 12.Quantity sold: (in MT)      

(a) domestic at controlled price (b) domestic at market price

683715.555

610914.970 692421.265

(c) export under advance license

     

(d) export under other obligation

     

(e) export at market price

0.000 0.000 0.000

(f) total 683715.555

610914.970 692421.265

       

13. Closing stock (finished quantity) (in MT)

15607.441 15954.560 12000.232

     

Notes :

1. It should be clarified whether the installed capacity is on single shift or multiple shift basis.- MULTIPLE SHIFT 2. In order to have a meaningful comparisons of production

31

and installed capacity, wherever necessary these details should also be expressed in appropriate units, e.g. standard hours or equipment/ plant/ vessel occupancy hours, crushing hours, spindle/ loom shifts, equivalent production, production in terms of standard hours etc.COMPLIED

5(A). MAJOR INPUT MATERIALS / COMPONENTS CONSUMED:

  2008-2009 2007-2008 2006-2007

 

  Qty. Rate Amount Qty. Rate Amount Qty. Rate Amount

  (MT) (RS) (RS) (MT) (RS) (RS) (MT) (RS) (RS)

1. Indigenous:

                 

(a) lime stone

950283.000

108.50

103105049

846000.000

102.51

86721738

929050.000

101.12

93940950

(b) Iron Ore

25882.000

2998.57

77608901

25058.000

2075.62

52010763

24358.000

1626.30

39613398

               

(c) Laterite

7480.000

178.33

1333884

6489.000

169.47

1099664

5806.000

165.54

961133

                 

(d) Shale 98945.00

67.46 6674824

80228.00

60.44 4849312

99746.00

5876.00

5861154

                   

(e) Fly-Ash Dry

0.000 0.00 0 0.000 0.00 0 0.000 0.00 0

               

(f) Gypsum

10711.000

1896.13

20309441

9713.000

1735.54

16857289

14167.000

1390.64

19701222

                   

(g) Packing Material

13738145

6.02 82636692

12187630

5.67 69163688

13891747

5.59 77698620

(Nos)              

               

2.Self manufactured:

                 

                   

3. Imported:

                 

                   

32

4. Total     291668791

    230702454

    237776477

                   

Note : Details should be furnished in respect of major input materials each constituting at least 2% of the total raw material cost.COMPLIEDComments: The increase in cement production over previous year comes to 11.12%, whereas the incresae in Raw material consumption cost including packing materials works to 26.43% due to mainly increase in input cost per MT of Iron ore by 44.47% and gypsum by 9.25% over prev.year and packing material by 6.17%

5(B). STANDARD/ ACTUAL CONSUMPTION OF INPUT MATERIALS PER UNIT:

Particulars Unit Standard / Actuals    Norm

Clinker stage    2008-

20092007-2008

2006-2007

(a) Iron Ore Ton / Ton of Clinker 0.04 0.04 0.04 0.04             (b) Laterite Ton / Ton of Clinker 0.04 0.01 0.01 0.02            (c) Crushed Limestone Ton / Ton of Clinker 1.31 1.39 1.40 1.39 (d) Crushed shale Ton / Ton of Clinker 0.21 0.15 0.13 0.15 Cement Stage                     (F) Gypsum Ton / Ton of Cement 0.04 0.02 0.02 0.02            

Note : Details should be furnished in respect of major input materials each constituting at least 2% of the total raw material cost for each major type/ variety/ size etc. of product under reference.COMPLIED

Comments: There is increas in Crushed shale consumption per MT of clinker by over 0.02 over prev year. However, there is a decrease in crushed lime stone consumption at clinker stage since both the products are interlinked products..

6. BREAK-UP OF COST OF INPUT MATERIALS IMPORTED DURING THE YEAR :

Particulars 2008-2009 2007-2008

2006-2007

1. FOB Price in foreign currency/ rupees

Nil Nil Nil

     

2. Insurance & freight Nil Nil Nil

       

33

3. Customs duty Nil Nil Nil

       

4. Clearing charges Nil Nil Nil

 

5. Inland freight Nil Nil Nil

       

6. Other expenses Nil Nil Nil

       

7. Total Nil Nil Nil

       

Note : Details should be furnished in respect of major input materials each constituting at least 2% of the total material cost - NIL

7 (A). POWER, FUEL AND UTILITIES :

Particulars 2008-2009 2007-2008 2006-2007   Qty. Rate Amount Qty. Rate Amount Qty. Rate Amount    RS RS   RS RS RS RS1. Indigenous (purchased) :

                 

coal (MT) 158523.000

2343.37

371478173

145401.000

2168.88

315357062

149921.000

1913.86

286928007

(a) APTRANSCO (KWH)

89636980

2.24 200873775

83141800

2.60 216099873

89984500

2.27 204468580

                   (b)power overhead

    5284943     5372213     6243690

2. Self generated/ produced:

                 

(KWH)                  3. Imported:

                 

                   4. Total power

           

      206158718

    221472086

    210712270

34

Note : Details should be furnished in respect of major items each constituting at least 2% of the total material cost:COMPLIEDComments: The coal cost per MT has increased by 8.05% compared to pervious year due to increase insale price by supplier i.e. by M/s . SCCL & M/s. WCL. The power cost has decreased to Rs.2.24 per KWH in current year compared to Rs 2.60 per KWH in previous year. This is on account of credits due to revision of rates passed on by APGPCL in 2008-09.

Rs.2.27 per KWH in previous year.

7 (B). STANDARD/ ACTUAL CONSUMPTION OF POWER, FUEL AND UTILITIES IN TERMS OF QUANTITY PER UNIT OF PRODUCTION :

Particulars Unit Standa

rdActuals

    (Budget)

2008-09 2007-08 2006-07

           

(a) Diesel unit power

produced

--- 0.00 0.00 0.00

           

(b) Coal Kgs./ Ton of clinker

  232.25 239.40 224.00

           

(c) Power consumption

Units/ Ton of

Cement

120.00 129.73 134.98 130.80

           

35

Note : Details should be furnished in respect of each major type/ variety/ size etc. of product under reference:NOT APPLICABLEComments : There is still scope in achieving power reduction to the level of 120 units taken as standard. If the unit can achieve the standard internally fixed, there will be a saving Rs.21.80 per MT of cement and per bag the reduction will be Re.1.09 in cost which is

substantial amount working to Rs.149 Crores.

36

8. SALARIES AND WAGES:

Particulars 2008-09 2007-08 2006-07       A. Quantitative Details :      1. Direct Workers:             a. Average number during the year 287 306 310 b. Man days available 104572 95472 96962 c. Mandays actually worked for:   (i) own production 76324 85268 83510 (ii job work      d. Reason-wise analysis of idle man-days (a-b)       

i) absenteeism 28248 10204 13392         ii) shortage of raw materials              iii) power shortage/ failures              iv) Others (specify)             2. Indirect Workers :             a. Average number during the year 531 553 557        b. Man days available 165672 172405 177840        c. Mandays actually worked for:              (i) own production 141265 172066 173951         (ii) job work             d. Reason-wise analysis of idle man-days (a-b)              i) absenteeism 24407 339 3889 ii) shortage of raw materials       iii) power shortage/ failures       iv) Others (specify)      

Comments: There is considerable increase in absenteeism of permanent works. This requires looking into.

B. Cost Detail :      Particulars 2008-

20092007-2008

2006-2007

  Rs. in Lakhs1. Direct labour cost on production

304.94 251.89 235.56

       

2. Indirect employee costs on production

306.17 234.35 218.69

       

3. Employee costs on administration and

234.30 188.62 181.97

social overheads      

4. Employee costs on selling and distribution

179.51 142.82 109.28

zonal office : Rs.112.33

     

Factory : Rs. 30.49

     

5. Other employees costs, if any

0.00 0.00 0.00

6. Total employee costs 1024.92 817.68 745.50

       

7.a.Payments under any VRS scheme

0.00 2.90 0.00

7.b.Amount provided during the year

1024.92 820.58 745.50

Comments: The increase in total cost salaries & wages and benefits charged to cost of cement works out to 24.90% due to implementation of 6th pay commission Pay for CDA & IDA employees with arrears from 1.1.06 & 1.1.07 respectively. Arrears payment pertainig to previous years has been taken into non-cost in reconciliation.

9. REPAIRS AND MAINTENANCE:Particulars 2008-

20092007-2008

2006-2007

  RS RS RS

1. Land and Building 12699998

963015 714039

2. Plant and machinery 24768838

10620058 9572124

3. Staff quarters and colony 879968 493563 372474

       

4. Others (to be specified asset category-wise)

     

Railway Siding 1545535 1324082 1162188

37

Leased Apartments 0 0 0

Others 5031966 6256470 4567533

Cars/Jeeps 602361 539916 604872

5. Total amount 34098666

20197104 16993230

6. Amount capitalized/ deferred during the year

0 0 0

7. Net amount (5-6) 34098666

20197104 16993230

8. Deferred amount of earlier years, if any

     

9. Total amount provided in the cost records (7+8)

34098666

20197104 16993230

NOTE:Stores and spares not included above as it is taken separately as stores and spares consumption

in cost statementsComments: The total Repairs & Maintainance cost increased by 68.83% compared to previous year whereas the decrease in cement production is on 11.12% over previous year. Major repair works done like Thermal insulation, repairs of motors,etc, and increase in wages of contract labourers are reasons. the age factor of the plant which is more than 20 years is also the reason for increase in repair costs.

10. FIXED ASSETS REGISTER AND DEPRECIATION:

+Particulars 2008-

20092007-2008 2006-2007

  RS RS RS

1.Whether fixed Yes Yes Yes

38

assets register maintained cost centre-wise2. Method of providing depreciation

SLM SLM SLM

3.Amount of depreciation under section 205(2) of the Companies Act, 1956 or any other relevant Act, as the case may be

19529238

17675086 26914596

     

4. Amount of depreciation provided in the financial records #

19529238

17675086 26914596

       

5. Amount of depreciation absorbed in the cost records *

19529238

17675086 26914596

       

6. Shortfall / Excess, if any (3 and 5)

0 0 0

Note : The impact of re-valuation of assets, if any, shall not be included.-Reply:No revaluation done. (1) Factory only considered. Selling Zone depreciation Rs.45039.72 is included in selling overheads. The depreciation excludes the quarry (Limestone raising) I.e. Rs.673057.00 included in lime stone cost (2) For 2007-2008, the above figures are for factory only. It excludes Rs.49464.44 relating to Zonal Office included in selling overheads and Rs.102860.00 relating to quarry included in limestone cost.

11. GROSS BLOCK, DEPRECIATION AND LEASE RENT:

  2008-20092007-2008

2006-2007

Particulars Gross Block Depreciation Lease Rent paid, if any

Total          (b+c)      RS RS RS RS RS RSName of major cost centers/ products:

a b c d    

LIME STONE RAISING 74739821 673057 0 673057 102860 106921 LIME STONE   0    

39

TRANSPORTATION LIME STONE CRUSHING 150801034 847420 0 847420 830078 830077

RAW MILL 354782728 1243830 0 1243830 1243830 1243830

COAL MILL 79773299 321196 0 321196 321196 321196

KILN 278765229 2446550 0 2446550 1727305 6322907

CEMENT MILL 160284727 1080696 0 1080696 1080696 1080696

PACKING PLANT 72595110 861678 0 861678 861678 1723356

ELECTRICAL MAINTENANCE     0 0   0 INSTRUMENTATION MAINTENANCE

    0 0   0

CIVIL MAINTENANCE     0 0   0

MINES-HEAVY EQUIPMENT     0 0   0 MECHANICAL MAINTENANCE WORKSHOP

4372225 43114 0 43114 54863 26875

A C PLANT MAINTENANCE   0 0   0

WATER SUPPLY 19259289 58028 0 58028 28998 586443

COMPRESSED AIR   0 0   0

LABORATORY 18255626 27073 0 27073 9560 0

RAILWAY SIDING 87454734 1201427 0 1201427 704845 3179967

MATERIAL HANDLING 112344635 946611 0 946611 652607 641848

MARKETING 0 0 0 0 0 0

ADMINISTRATION & SOCIAL 89204822 1140525 0 1140525 957489 985725

POWER DISTRIBUTION 87193457 1809211 0 1809211 1707820 3224082

OWN GENERATION 200687530 7494724 0 7494724 7494121 7609271 Total 179051426

6 20202295 0 2020229

5 1777794

6 2702151

6 Note : Excluding gross block of assets given on lease, if any REPLY: No assets have been given on lease. (2) The Zonal Office depreciation of Rs.45039.72 is not included in above. This has been taken in selling and distribution overheads. (3) The depreciation increase by Rs 24.24 lacs compared to previous year is due to additions(net) amounting to Rs 136.92 lacs in current year.

12. OVERHEADS:

Particulars Break up enclosed

2008-2009 2007-2008 2006-2007

in appendix

RS RS Rs.

 for the factory as a

whole&for the factory as a

whole&for the factory as a

whole&

 product under

referenceproduct under

referenceproduct under

reference1. Factory 12(a)

66648431 62803597 58421154

       

2. Administration 12(b)

17677026 27356873 32532325

3. Social 12(c)

16038801 14193723 12357402

4. Selling 8798720 10446540 7154567

40

12(d)   

5. Distribution 12(d)

215530601 235341965 244526188

TOTAL 324693579 350142698 354991636

Note :(1)The break-up under each head should be furnished in respect of major items constituting at-least 80% of the overhead cost under each head.COMPLIED (2) Sl.5 includes zonal office expenses (3) There is a decrease of overall overheads cost by Rs 254.49 lacs during 08-09 compared to prev year.

13. RESEARCH AND DEVELOPMENT EXPENSES:

Particulars 2008-2009 2007-2008 2006-2007

  RS RS RS

1. Process development and improvement       

2. Existing product development 0 0 435284

       

3. New product development      

       

4. Others, if any      

       

5. Total amount 0 0 435284

 

6. Amount capitalized/ deferred during the year

     

       

7. Net amount (5-6) 0 0 435284

       

8. Deferred amount of earlier years, if any

     

       

9. Total amount provided in the 0 0 435284

41

cost records (7+8)       

10. Amount paid to related parties NIL NIL NIL

       

CEMENT CORPORATIO

N OF INDIALIMITED

TANDUR CEMENT

FACTORY APPENDIX-

12(a)

ELEMENT WISE BREAK-UP OF FACTORY OVERHEADS (VIDE PARA.12 OF ANNEXURETO THE COST AUDIT REPORT) FOR THE YER 2008-2009

       

Particulars 2008-2009 2007-2008 2006-2007

Amount Amount Amount

(Rs.) (Rs.) (Rs.)

       

Employees remuneration & benefits 23740941.54 18196220.05 16975062.31

Stores & Spares 7029243.42 8359050.35 11851851.00

Depreciation 2156243.98 1990281.95 3675079.00

Other Expenses 33722002.51 34258044.62 25919162.00

     

TOTAL 66648431.45 62803596.97 58421154.31NOTE:- There is an increase of Factory Over heads to the tune of Rs 38.45 laks (I.e) 6.12% compared to previous year.This is in employees cost and depreciation.      

       

CEMENT CORPORATIO

N OF INDIALIMITED

TANDUR CEMENT

42

FACTORY APPENDIX-

12(b)

ELEMENT WISE BREAK-UP OF ADMINISTRATION OVERHEADS (VIDE PARA.12 OF ANNEXURE TO THE COST AUDIT REPORT) FOR THE YEAR 2008-2009

       

Particulars of A/C Heads 2008-2009 2007-2008 2006-2007

Amount Amount Amount

(Rs.) (Rs.) (Rs.)

       

Salaries, Wages & benefits 20838115.52 16644297.48 16193126.45

Stores & Spares / Repairs 522961.48 92682.24 716986.60

Depreciation 680930.52 415493.95 562637.53

Repairs & Maintenance 1060519.00 645203.00 556115.80

Direct Expenses :

Travelling Expenses 1540458.00 1208728.50 1180212.00

Conveyance Charges 128281.00 126976.00 134122.50

Travelling Expenses - Recruit 0.00 0.00 0.00

Advt. for invtg Tenders 1758560.00 983892.00 773553.00

Insurance (P&M) allocated 0.00 5722.00 5722.00

Office Expenses 1673828.00 999143.40 839061.60

Running Expenses of Vehicles 1321745.97 1336602.35 1217157.13

Other Expenses : 1261561.46 4119916.98 4013692.72

Other Sundry Expenses 6479125.45 6494449.76 5302030.16

Insurance 275275.00 399628.00 343442.93Corporate Office & R&D Expenses 2844180.00 -3000000.00 1500000.00

Expenses on Pros. & Boring 0.00 0.00 101537.00

Other Expenses 2272419.00 2340989.00 2597305.00

SUB TOTAL 42657960.40 32813724.66 36036702.42

Apportioned Expenses

Civil Expenses allocated 130624.76 317121.10 193200.91

Power 1782491.19 1944695.60 1739242.92

Water Supply 528158.63 558763.09 681482.91

Power Overhead 47036.83 48521.42 53237.84

       

SUB TOTAL 2488311.41 2869101.21 2667164.58

CEMENT CORPORATIO

N OF INDIALIMITED

TANDUR

43

CEMENT FACTORY

APPENDIX-12(b)

ELEMENT WISE BREAK-UP OF ADMINISTRATION OVERHEADS (VIDE PARA.12 OF ANNEXURE TO THE COST AUDIT REPORT) FOR THE YEAR 2007-2008

       

Particulars of A/C Heads 2008-2009 2007-2008 2006-2007

Amount Amount Amount

(Rs.) (Rs.) (Rs.)

       

LESS: Scrap Sales / Other Misc. Income 8858594.00 432837.00 3627184.08

Sundry Receipts 3984792.39 7848028.93 2417377.49

Hire Charges of Equipment 14622129.70 18372.00 15713.00

Hire Charges of Vehicles 3730.00 20993.00 9730.00

       

SUB TOTAL 27469246.09 8320230.93 6070004.57

NET AMOUNT 17677025.72 27362594.94 32633862.43

Note: There has been decrease in total Administrative overheads in 2008-09 by Rs.96.82 lakhs which works to reduction of 35.39% compared to previous year i.e. 2007-2008 due to increase in revenue like scrap sales & hire charges of equipments. it is to be noted that there has been increase in Salaries & wages, Stores & spares, repairs, T.A expenses, Advertisement and ofice expns However, there is substantial reduction in Corporate Office expenditure compared to last year. The increased heads are to be noted for watch and control.

CEMENT CORPORATIO

N OF INDIALIMITED

TANDUR CEMENT

FACTORYAPPENDIX-

12(c)

ELEMENT WISE BREAK-UP OF SOCIAL.OVER HEADS (VIDE PARA.12 OF ANNEXURE TO THE COST AUDIT REPORT) FOR THE YEAR 2007-2008

44

       

Particulars of A/C Heads 2008-2009 2007-2008 2006-2007

Amount Amount Amount

(Rs.) (Rs.) (Rs.)

       

Salaries, Wages & benefits 2591452.19 2217358.62 2003987.29

Stores & Spares 202268.62 80318.51 337059.76Medical & Other benefits to employees 2668686.00 60625.00 476393.60

Medical Expenses 4386935.01 4230675.00 3133433.01

Subsidy to employee welfare 272258.00 61890.00 68800.00

Expenses on canteen 1019579.00 724847.00 497273.00Other Welfare Expenses (canteen) 334266.00 1493340.00 607697.90

Repairs & Maintenance 880937.92 601707.00 405642.00

Leveries to Staff 561734.20 633625.70 383268.37

Guest House Expenses 236975.00 104295.00 207394.00

Depreciation 459594.40 541994.62 423687.37

Insurance - Others 0.00 0.00 1488.00

Coal Consumption - (Others) 0.00 0.00 0.00

Apportioned Expenses:

Civil 271823.91 385123.72 234630.41

Power 1824863.35 261541.72 2662541.82

Water Supply 1277803.15 1351846.18 1648748.98

Power Over Heads 48154.95 65249.49 81499.81

       

SUB TOTAL 17037331.70 12814437.56 13173545.32

LESS:

House Rent 401529.00 408355.50 319876.80

Electricity Charges 426126.50 390989.60 351874.15

Subsidised Transport 159675.00 165149.00 136653.00

Guest House Receipts 11200.00 9820.00 7140.00

       

SUB TOTAL 998530.50 974314.10 815543.95

NET AMOUNT 16038801.20 11840123.46 12358001.37Note: There is increase in Salary & Wages, stores & Spares,medical expns & other benefits to employees madical charges reimbursement, expenses on canteen, other welfare expenses, repairs and maintenance and guest house exps, etc., in 2008-09 (i.e) increase by Rs 18.45 lacs (13.00%) over prev. year. These are to bekept under watch.

CEMENT CORPORATIO

N OF INDIA LIMITEDTANDUR CEMENT

FACTORY

45

APPENDIX-12(d)

ELEMENT WISE BREAK-UP OF SELLING AND DISTRIBUTION OVERHEADS (VIDE PARA.12OF ANNEXURE TO THE COST AUDIT REPORT) FOR THE YEAR 2007-2008

       

Particulars of A/C Heads 2008-2009 2007-2008 2006-2007

Amount Amount Amount

(Rs.) (Rs.) (Rs.)

       

SELLING OVERHEADS:

A) Direct Expenses Salaries & Wages and benefits 4206672.38 3048686.66 2938394.96

Other Expenses 11888.00 13103.00 399504.00

     

SUB TOTAL (A) 4218560.38 3061789.66 3337898.96

B) Siding Charges Apportioned Salaries & Wages and benefits 364392.45 287760.00 279067.00

Stores & Spares 2313202.00 5624485.00 373868.00

Depreciation 822157.75 507605.00 2316953.00

Other Expenses 1080406.98 964900.73 846780.00

     

SUB TOTAL (B) 4580159.18 7384750.73 3816668.01

SUB TOTAL (A+B) 8798719.56 10446540.39 7154566.97

DISTRIBUTION OVERHEADS:

Zonal Office Expenses 235341965.10 244526187.88 165621679.91

       Note: (a) During 2008-09 , there is increase by Rs 11.57 lacs in selling expenses when compared to previous year. (b) During 2008-09, there has been substantial decrase in Railway sdg. expenses by Rs 248.05 lacs. (c) In Zonal Office exepenses, there has been decrease by Rs.19.11 lakhs compared to prev year. This is mainly due to increase dspathches by rai instead of road.

14. ROYALTY AND

46

TECHNICAL KNOW HOW CHARGES:

 

Particulars 2008-2009

2007-2008

2006-2007

  RS RS RS

1. Royalty      

1.a Royalty paid on Production -Limestone

43425000

38625000

41940000

1.b Royalty paid on production- shale

494000 316000 408000

2. Lump sum payment of royalty, if any

     

     

3. Technical know how charges

     

       

4. Others if any : cess 3860000 3380000 3728000

       

5. Total amount 47779000

41721000

46076000

       

6. Amount capitalized/ deferred during the year

     

       

7. Net amount (5-6) 47779000

41721000

46076000

       

8. Deferred amount of earlier years, if any

     

  317944    

9. Amount provided in the financial accounts (7+8)

48096914

41721000

46076000

       

10. Amount absorbed in the cost records

47779000

41721000

46076000

       

11. Shortfall/ Excess, if any 317944 0 0

       

12. Amount paid to related parties

NIL NIL NIL

       

Note : The details should be furnished in respect of each agreement separately. Not applicableas above relate to statutory paymentsProvision made in Financial books towards liability of difference of royalty on shale relating to 2004-05 to 2007-08. This amount shown under Reconcialation - head "cost not considered.

47

48

15. QUALITY CONTROL EXPENSES:

Particulars 2008-2009 2007-2008 2006-2007  RS RS RS1. ISO number, if any ---- ---- ----       2. Name of certifying agency ---- ---- ----       3. Salaries & Wages 0 0 0        4. Others, if any (specify)(I) bureau of Indian standards)

1539370 1372407 1764551

(II) NCBM/VIMTA 71663 75504 6285 5. Total amount 1611033 1447911 1770836  

16. POLLUTION CONTROL EXPENSES:

Particulars 2008-2009 2007-2008 2006-2007  RS RS RS1. Effluent treatment 0 0 0        2. Control of air pollution APPCB 1800119 272600 81000        3. Control of ash pound/       ash mound             4. Penalty, if any 0 0 0        5. Others if any : water cess 0 0 0        6. Total amount 1800119 272600 81000        

17. ABNORMAL NON-RECURRING COSTS:

Particulars 2008-2009 2007-2008 2006-2007  RS

RS RS

1. DG MAINT. COST 9850719 9284408 9393184        2 VRS DRE CHARGED OFF 0 290483 0 3. IDA/WB SALARY ARREARS 0 0 0 4. Provision for Doubt Debts 814706 14744023 0       Total 10665425 24318914 9393184        

*(a) The unabsorbed cost on DG set due to non operation for all three years

18.(A) NON-MOVING STOCK (at the end of the year) :

Rs. in lakhsParticulars 2008-2009 2007-2008 2006-2007

a1.Total direct material consumption 2916.69 2307.02 2377.76        a2.Closing stock of direct material 236.45 132.39 141.42        a3. Value of non-moving stock 0.00 0.00 0.00 a4. Percentage of a3 to a2 0.00 0.00 0.00 b1.Total indirect material consumption (coal + stores 4612.32 3959.60 3538.42 & spares)      b2.Closing stock of indirect material (including 2250.32 1837.77 1826.82 coal lakhs)      b3.Value of non-moving stock 1142.33 1025.33 986.47        b4. Percentage of b3 to b2 50.76 55.79 54.00        c1.Work-in-progress ------ ------ ------c2.Closing stock 265.99 120.32 89.64        c3.Value of non-moving stock 0.00 0.00 0.00        

49

c4.Percentage of c3 to c2 0.00 0.00 0.00        d1.Finished Goods ---------- ---------- ----------d2.Closing stock 327.26 342.16 218.42        d3.Value of non-moving stock 0.00 0.00 0.00 d4.Percentage of d3 to d2 NA NA NAe1.Total : (Consumption) 7529.01 6266.62 5916.18 e2.Closing stock 3080.02 2432.64 2276.30 e3.Value of non-moving stock 1142.33 1025.33 1026.80 e4.Percentage of e3 to e2 37.09 42.15 45.11

18.(B) WRITTEN OFF STOCK (during the year) : Rs. in lakhs Particulars 2008-2009 2007-2008 2006-2007

1. Direct Materials (Raw Material & Components etc) NIL NIL NIL2. Indirect Materials NIL NIL NIL3. WIP NIL NIL NIL4. Finished Goods NIL NIL NIL5. Total NIL NIL NIL

19.(A) INVENTORY VALUATION (at the end of the year) :Particular

sBasis 2008-2009 2007-2008 2006-2007

 

of valuation

Quantity

Rate Amount Quantity

Rate Amount Quantity

Rate Amount

    (MT) (Rs) (Rs.) (MT) (Rs) (Rs.) (MT) (Rs) (Rs.)

1. Input material:

                  

(i) Purchased

                  

- Indigenous

 

                 (a) Iron Ore

AT COST

4175.075

3006.25

125510309.02

2752.825

2075.62

5713805.15

3298.775

1626.30

5364795.42

(b) Laterite " 1232. 195. 241586. 3531. 169. 598476.8 2073. 165. 343326.

50

902 95 97 547 47 8 962 54 27 (c) Gypsum

" 3906.405

1529.67

5975514.13

836.995

1398.02

1170133.25

3517.958

1136.30

3976363.39

(d) Raw material in transit

'

    0.00   0.00 0.00 0.000 0.00 0.00 - Imported "     0.00     NIL     NIL(ii)Self manufactured

"

    0.00     NIL     NIL2. Chemicals, additives

"

    0.00     NIL     NIL3.(a) Stores and spares

"

   1967143

62.18    1671811

04.29    1511159

83.33 including consumables

 

                 3(b) Coal   6999.

5672344

.89 1641322

7.71 3716.

3172168

.88 8060238.

99 8628.

1871913

.86 1651315

3.57 3© Coal in Tansit

 0.000   0.00 0.000 0.00 0.00 0.000 0.00

7047868.00

4. Packing materials (NOs)

"98783

1 4.94 4876701

.81 80318

9 4.56 3659861.

71 92174

8 4.66 4298017

.78 5. Tools and implements and Jigs, Dies and Fixtures.

"     390.00     1861.00     6531.00  

                 6. Work-in-progress:

                 (a) CRUSHED LIME STONE

AT COST

30544.453

108.50

3314047.93

15827.415

102.51

1622436.10

16827.415

101.12

1701505.14

(b) CRUSHED SHALE

AT COST 3858.

990 67.4

6 260327.

26 4003.

990 60.4

4 242017.7

1 5231.

990 58.7

6 307435.

17 (c) RAW MEAL

AT COST

6425.000

249.32

1601868.50

2248.000

243.59

547583.57

4062.000

208.34

846289.63

(d) CLINKER

AT COST

18103.550

1215.79

22010057.11

8267.550

1210.72

10009720.88

6219.550

1030.41

6408702.17

7. Finished goods:

          (a) Finished Goods - Silo

AT COST

6455.441

1391.98

8985844.41

10200.560

1374.31

4018740.01

5201.032 0.00 0.00

(b) Finished Goods -Transit/Branches

 

9152.000

1579.26

14453345.71

5754.200

1553.30

8937974.19

6799.20

1889.72

12848584.22

8. Scrap       1190414     8533528.     8004524

51

0.00 00 .35 9. Others, if any

                  

10.Total value of inventory as per cost accounts

    

299302722.74    

230297481.73    

225005833.57

 

            11. Total value as per Financial accounts

 

   3080025

21.88    2432641

71.06    2337792

81.45 Difference (10 - 11)    

(8699799.14)    

(12966689.33)    

(8773447.88)

12. Reasons for major differences, if any, Valuation of Finished Goods in Fin books with Excise Duty and freight           Main Reasons: 1) Excise Duty included in valuation of stocks in financial books. 2) In financial accounts finished goods and work in progress valued at cost or market price which ever is lower. In cost accounts actual costs are taken.Note:

(1)In respect of item at Sr. No. 1 and 6 details be furnished in respect of each major input material constituting at least 2% of the total material cost.COMPLIED(2) In respect of items at Sr. No. 2 to 5, total amount be given without any quantitative details.NOTED AND COMPLIED(3) Give in brief the method of inventory valuation system indicating the elements of cost included therein and the extent thereof. - indicated above.

(4)Capital work-in-progress to be shown separately. NIL Inventory valuation done on Weighted average method for raw material,stores,packing material and coal in financial books Inventory valuation done on material cost plus appropriate overheads at respective stages for work in progress and finished goods stocked at silo in cost sheet.

19.(B) PHYSICAL VERIFICATION OF INVENTORY :

      2008-2009 2007-2008 2006-2007Sr. No.

Particulars Periodicity of

Shortage Value

(Rs.)

Excess

Value

Net (Rs.

)

Shortage Value

(Rs.)

Excess

Value

Net (Rs.

)

Shortage Value

(Rs.)

Excess

Value

Net (Rs.

)    verification (Rs.)   (Rs.)   (Rs.)  

1 Raw material

month/yearly

0 0 0 0 0 0 0 0 0

                       

2 Chemicals, additives,

_                  

                     

52

consumable3 Stores &

Sparesperpetual 0 0 0 0 0 0 0 0 0

                       

4 Packing Materials

month/yearly

0 0 0 0 0 0 0 0 0

                       

5 Tools & Implements

yearly 0 0 0 0 0 0 0 0 0

                       

6 WIP month/yearly

0 0 0 0 0 0 0 0 0

                       

7 Finished Goods

month/yearly

0 0 0 0 0 0 0 0 0

                       

8 Scrap, Wastage

yearly 0 0 0 0 0 0 0 0 0

                       

9 Total 0 0 0 0 0 0 0 0 0 0

                       

20. SALES OF THE PRODUCT UNDER REFERENCE:                   Particulars 2008-2009 2007-2008 2006-2007

  Qty. Rate Amount Qty. Rate Amount Qty. Rate Amount    Rs.Pe

r MTRs.   Rs.Pe

r MTRs.   Rs.Pe

r MTRs.

1. Purchased goods :

                 

a) TRADING

NIL NIL NIL NIL NIL NIL NIL NIL NIL

             2. Loan NIL NIL NIL NIL NIL NIL NIL NIL NIL

53

license basis:3. Own manufactured:

                 

                   4. Total sale of Cement

683715.555

3252.76

2223961162

610914.970

3116.26

1903772092

692421.265

2652.23

1817765045

5.Export sales

0.000 0.00 0 0.000 0.00 0 0.000 0.00 0

TOTAL SALE OF CEMENT &

CLINKER 683715.555

3252.76

2223961162

610914.970

2975.48

1817765045

692421.265

2625.23

1817765045

1) Above details shall be furnished for major product groups/ varieties. NOT APPLICABLE(2)Separate details shall be furnished for indigenous sales and export sales. REPLY: No explorts during 2006-07 and 2007-08 (3)2006-2007and 2007-08: Sales amount excludes self consumption and stock transfer to other units of CCI and related excise duty.

21. MARGIN PER UNIT OF OUTPUT: (Rupees per MT)

Particulars 2008-2009 2007-2008 2006-2007  Cost of

SalesNet

SalesMargin Cost of

SalesNet

SalesMargin Cost of

SalesNet

SalesMargin

54

 (Rs.) Reals.

(Rs.)(Rs.) (Rs.) Reals.

(Rs.)(Rs.) (Rs.) Reals.

(Rs.)(Rs.)

1.Purchased goods :

NIL NIL NIL NIL NIL NIL NIL NIL NIL

  2.Loan license basis :

NIL NIL NIL NIL NIL NIL NIL NIL NIL

                   3.Own manufactured:

                 

                   a) OPC Cement

1773.27 3252.76

1479.49 1920.79 3116.26 1195.47 1771.99 2625.23 853.24

                   

Notes :

(1) Above details shall be furnished for major product groups/ varieties. NOT APPLICABLE(2) Separate details shall be furnished for margin on indigenous sales and export sales. Where the product (such as sugar, bulk drugs, formulations, etc.) is sold at different prices in accordance with government policy, sales realisation and margin on such product at different prices shall be shown separately alongwith quantity and value. NOT APPLICABLE.

22. COMPETITIVE MARGIN AGAINST IMPORTS:Particulars 2008-2009 2007-2008 2006-2007

55

1. Name of product Cement Cement Cement

     

2. Estimated demand of the product in the country * information not

information not

information not

  readily available

readily available

readily available

3. Total production in the country * information not

information not

information not

  readily available

readily available

readily available

4. Quantities imported in the country ** information not

information not

information not

  readily available

readily available

readily available

5. Total production by the company (Tandur Unit) MT

683415.000 615000.000

696730.000

       

6. %age share of the company in total inland production (item 5/ item 3)

--- --- ---

       

7. a. Cost of production per Unit (Inland sale) 1391.98 1374.31 1165.73

(Up to naked stage)      

b. Cost of Sale per Unit (Inland sale) 1773.27 1920.79 1771.99

       

c. Cost of production per Unit (Export sale) 0.00 0.00 0.00

       

d. Cost of Sale per Unit (Export sale) 0.00 0.00 0.00

       

8. Quantity of the product imported by the company NIL

NA NA NA

 

9.FOB value of quantity imported by the company NIL

NA NA NA

 

56

10. Weighted average FOB rate for quantities imported by the company (item 9/ item8) ** NIL

NA NA NA

 

11. FOB value of quantity imported in the country ** NA NA NA

 

12. Weighted average FOB rate of quantities imported in the country (item 11/ item4) **

NA NA NA

 

13. Competitive margin (item 12 less item 7(A)) ** NA NA NA

 

14. Major exporting countries (other than those NA NA NA

listed in item 4 above)

15.(A) Total import duty paid by the company NA NA NA

(net of CENVAT)

(B) Weighted average rate of import duty paid by the company (net of CENVAT) (item 15(A)/ item 8)

NA NA NA

16. Bound rate of duty under WTO agreement. NA NA NA

     

Notes : N.A. - NOT APPLICABLE / ** Not Available.

(1)* Indicate the source of information.

(2) ** Country-wise details should be furnished in respect of major countries covering at-least 75% of the total and balance should be shown under the head “Others”.       

23. VALUE ADDITION AND DISTRIBUTION OF EARNINGS : (RS. IN LAKHS) (For the product under reference and factory as a whole)

Particulars 2008-2009 2007-2008 2006-2007

A.Value Addition :A4      1. Gross sales (Cement) 25796.51 22724.97 21165.16 (excluding returns)      2. Less: Excise Duty and adjustment 3520.61 3662.80 3987.07 3. Net sales 22275.90 19062.17 18178.09 4. Adjustments in stocks 164.48 159.72 18.58

57

4A. Input cost plus margin 22440.38 19221.89 18196.67 5. Less: cost of bought out materials and services (consumed)

     

Raw material including Royalty 1979.12 1518.50 1423.47 Packing material 826.37 691.64 776.99 Power and fuel 2002.76 2153.14 2039.77 Stores and spares 895.13 896.04 669.20 Coal 3717.19 3153.57 2869.28 Total 9420.57 8412.89 7778.71 6. Value added 13019.81 10809.00 10417.96 7. Add: income from any other sources       Other income 2001.05 891.95 4036.84 Total 15020.86 11700.95 14454.80 8. Earnings for distribution 15020.86 11700.95 14454.80 B. Distribution of earnings to:      1. Employees as salaries and wages, retirement benefits etc.,

1265.96 886.28 795.93

2. Shareholders as dividend 0 0 0 3. Retained funds Depreciation 195.74 177.25 269.76 4. Government as taxes (specify)      5. Others, if any (specify)       Interest and Finance charges 601.13 556.72 617.49 Internal consumption 0.00 0.00 0.00 Write off (DRE) 0.00 5.35 110.20 Advertisement (Tenders & Sales Promotion) 17.75 18.52 27.47 Insurance 18.11 20.30 22.20 Rates and taxes 22.37 24.02 27.16 Rent 4.70 4.75 4.30 ED on shortages & Int consumption & stock adj. 60.35 28.00 36.96 Repairs & Maintenance 341.62 202.16 170.16 Corporate Office overheads 28.44 30.00 15.00 Research & Development 0.00 0.00 0.00

Prior period exp 17.79 194.95 15.42

Freight /handling secondary transportation 2061.38 2219.60 2337.12

Provisions 8.15 147.44 0.00

FBT 8.80 7.90 5.46 Miscellaneous 448.11 432.40 402.74 SUB-TOTAL OF SL(5) 3638.70 3826.70 3686.83 TOTAL OF B 5100.40 4890.23 4752.52 PROFIT/ (LOSS) as per audited financial accounts 9920.46 6900.66 9702.28 Total as per Sl.No.8 15020.86 11790.89 14454.80

58

59

60

24. FINANCIAL POSITION AND RATIO ANALYSIS :Sl. Particulars 2008-2009 2007-2008 2006-2007No.

 

    Product under

reference & Factory as a

whole

Company as a whole

Product under

reference & Factory as a whole

Company as a whole

Product under

reference & Factory as a

whole

Company as a whole   

1 Capital employed (Rs. in lakhs)

2601.75 19499.11 2581.45 13178.63 1386.45 6497.08

2 Net Worth (Rs. in lakhs)

-- NEGATIVE -- NEGATIVE -- NEGATIVE

3 Profit (Rs. in lakhs)

9920.46 5254.57 6900.66 4089.08 8398.97 16660.61

4 Net Sales (Rs. in lakhs)

22275.9 31947.5 19034.17 29228.49 18141.12 28424.88

5 Operating expenses as a percentage of Net Sales:

           

                 (a) Material cost 8.88 13.94 7.98 12.55 7.85 13.38  (b) Factory

overheads2.99 39.56 3.30 39.17 3.22 37.78

  (c) Royalty on production, if any

2.15 2.02 2.19 2.03 2.33 2.29

  (d) Direct Salaries & wages

1.37 17.92 1.32 12.62 1.30 12.65

  (e) Research and development expenses

0.00 0.00 0.00 0.00 0.04 0.00

  (f) Quality control 0.07 0.00 0.08 0.00 0.10 0.00  (g) Administrative

and Social Overheads

1.51 1.25 2.18 1.24 2.47 1.31

  (h) Selling & distribution

10.07 7.98 12.91 9.14 13.87 10.52

  (i) Interest 4.12 11.20 -1.13 11.85 2.60 10.946 Profit as %age of

capital employed381.30 26.95 267.31 31.03 644.74 256.43

7 Profit as %age of net worth

- NEGATIVE - NEGATIVE -- NEGATIVE

8 Profit as %age of net sales

44.53 16.45 36.25 13.99 49.27 58.61

9 Profit as %age of value addition

131.25 29.85 61.34 25.79 85.80 105.00

10 Value addition as a %age of Net Sales

58.45 55.11 57.24 54.25 57.43 55.12

11 Current assets to current liabilities

1:0.92 1:0.65 1:1.10 1:0.68 1:1.07 1:1.86

12 Net working capital in terms of number of months of cost of sales excl. depreciation.

0.83MONTHS 1.7MONTHS NEGATIVE NEGATIVE 0.65MONTHS NEGATIVE             

13 Debt-equity ratio -- 0.54:1 -- 0.55:1 -- 0:51.114 Raw materials

stock in terms of number of days of consumption

35 126 18.00 131 24.83 130              

15 Stores & spares stock in terms of number of days of consumption

802 331 757 355 866 363             

16 Work-in-progress stock in terms of number of days of cost of production

10 40 5 35 4 34             

17 Finished goods 9 60 13 7 6.5 9

61

25. CAPITALISATION OF REVENUE EXPENDITURE:

Particulars 2008-2009 2007-2008 2006-2007       1. Raw Materials: Nil Nil Nil  Nil Nil Nil    (a)  Purchased Nil Nil Nil  Nil Nil Nil     -  Indigenous Nil Nil Nil  Nil Nil Nil     -  Imported Nil Nil Nil  Nil Nil Nil    (b)  Self manufactured Nil Nil Nil  Nil Nil Nil2. Direct wages & salaries Nil Nil Nil  Nil Nil Nil3. Consumable stores Nil Nil Nil  Nil Nil Nil4. Repairs & maintenance Nil Nil Nil  Nil Nil Nil5. Depreciation Nil Nil Nil  Nil Nil Nil6. Factory overheads Nil Nil Nil  Nil Nil Nil7. Administration overheads Nil Nil Nil  Nil Nil Nil8. Other expenses (specify) Nil Nil Nil  Nil Nil Nil(a) Interest Premium Nil Nil Nil  Nil Nil Nil(b) ROC fees + Stamp Duty - Increase in Share Capital

Nil Nil Nil

Prepayment premium on loan Nil Nil Nil  Nil Nil Nil9. Total             10.Capitalisation – Excisable   value Nil Nil Nil       11.Capitalisation – Non Excisable value Nil Nil Nil

       

62

26. RELATED PARTY TRANSACTIONSFOR PRODUCT UNDER REFERENCE :NILBriefly describe the transfer pricing policy, followed by the company in respect of “related party relationship” as defined in the relevant cost accounting records rules made under clause (d) of sub-section (1) of section 209 of the Act. The following particulars may be furnished with regard to related party transactions :                               2008-2009 2007-2008 2006-2007Particulars of related party

Product/

activity

Quantity

Rate

Amount

Normal

Quantity

Rate

Amount

Normal

Quantity

Rate

Amount

Normal

        Price       Price       Price

Note :

(1)Details should be furnished for sale and purchase transactions separately. NIL

27.     CENTRAL EXCISE RECONCILIATION FOR THE PRODUCT UNDER REFERENCE :

  Particulars Chapter   Product under reference: CEMENT Heading -- 2502-29A QUANTITATIVE DETAILS : MT1 Opening Stock 15954.560 2 Add : Production 683415.000 3 Less : Closing Stock 15607.441 4 Total Sales / Clearances 683762.119

63

  Particulars Assessable Rate of Duty Amount of Duty (Rs.)    Value (Rs.) Rs/Ton

B DETAILS OF CLEARANCES      1 Total Clearances (Chapter heading-wise) 2579651383 520.08 355613893 2 Less : Duty Free Clearances (factory) 0 0 0 3 Excisable Clearances (factory) 2579651383 520.08 355613893 3a Reversel in current year 0 0.00 0 3b CEMENT 0 520.08 0   CLINKER 0 0 0   SCRAP 0 0 0.00         0   Total 0 0.00 0 4 Penalty / Fine / Interest payable if any 0 0 0 5 Total Duty Payable ( total 3 & 4 ) 2579651383 520.08 355613893

  Particulars InputsCapital Goods Services Total

C SUMMARY OF CENVAT CREDIT        1 Opening Balance 975543 3402328 0 4377871

2 Add : Availed During the year1363315

2 9355505 4249651 2723830

8 3 Add   Refunds received during year 0 0 0 0 4 Less: Reversal during the year 175763 0 0 175763 5 Less : Closing Balance as per Excise Records 115932 4884826 0 5000758

6 Total Cenvat credit utilised during the year (1+2+3-4-5)

14317000 7660312 2595640

26439658

7 Closing Balance as per Annual Accounts 115932 5697621 1654011 5000758 8 Difference between 5-7 0 212695 1654011 0 9 (State amount and reasons  for difference) 0 0 0 0

  Particulars Amount (Rs.)D RECONCILIATION OF DUTY PAID  1 Excise Duty Payable as per 'B' 0.00 2 Total Excise Duty paid through    a) Cenvat Account -( Inputs )+services 16912640.00   b) Cenvat Account -( Capital Goods ) 7660312.00   c) P.L.A. 331040947.00   Total ( a+b+c ) 355613899.00 3 Difference between (1-2) (Rounding off diffr) (355613899)4 (State amount and reasons  for difference) 0 5 Excise Duty as per RT – 12 355613899.00 6 Difference  between (2-5) 0.00 7 (State amount and reasons  for difference) 0

27.     CENTRAL EXCISE RECONCILIATION FOR THE PRODUCT UNDER REFERENCE :

E RECONCILIATION OF DUTY PAID AND RECOVERED :  1 Excise Duty paid as per P & L A/c 358656015.00 2 Excise Duty Recovered  as per P & L A/c 355613899.00 3 Difference between duty paid and recovered 2482116.00 4 (State amount and reasons  for difference)  (*) ED provided on closing stock in silos as on 31.03.2008 Rs.6014163.00 and

corresponding withdrawal of ED on opening stock as on 01.04.2007

Rs.3214238.00-.F RECONCILIATION OF TURNOVER  1 Turnover as per RT 12 0.00 2 Turnover as per Annual Accounts (Net off Duties & Taxes) 0.00 3 Difference between ( 1- 2 ) 0 4 (State amount and reasons  for difference) 0

CEMENT CORPORATION OF INDIA LTD.,

TANDUR CEMENT FACTORY

64

Performa

Name of the company: Cement Corporation of India LimitedName and address of the factory: Tandur Cement Factory, Karankote, RR Dist. A.P. - 501 158

Name of the product: CEMENT

Statement showing the cost of production, cost of sales, sales realisation andmargin in respect of the produt(s) under reference produced during the year

ended 31st March 2008.

A. Quantitative Information:

Sl. Particulars   (unit of measurement

No.     to be specified)

         

     Current Year

Previous year

        MT MT1 (I) Installed capacity   1000000 1000000   (ii) Capacity enhanced during the year 0 0   by leasing arrangement etc.    

         

         

         

         2 Actual production / output:      

  (I) Self:   615000.000 696730.000   (ii) third parties, if any; (Shortage) 105.600 67.900

     

3 Production as percentage of   61.50% 69.67%

  installed capacity      

     4 Captive consumption, if any   18.102 4.610

     

5 Quantity sold/ transfer - Inter Unit 7.000 12.000

 (a) Domestic   610914.970 692421.265

  (b) Export   0.00 0.00

       6 Closing Stock (finished goods) 15954.560 12000.232

       7 Opening Stock (finished goods) 12000.232 7776.007

CEMENT CORPORATION OF INDIA LTD

TANDUR CEMENT FACTORY PRODUCTION FLOW CHART 2008-2009

OPENING STOCK

LIME STONE 0.00

SHALE 0.00

ADD RAISING DURING THE YEAR

LIME STONE 965000.00

SHALE 98800.00

LEASS: CLOSING STOCK

LIME STONE 0.00

SHALE 0.00

TRANSFERRED TO CRUSHER

CRUSHED LIMESTONE 965000.00

CRUSHED SHALE 98800.00

ADD: OPENING STOCK

CRUSHED LIMESTONE 15827.415

CRUSHED SHALE 4003.990

DEDUCT CLOSING STOCK

CRUSHED LIMESTONE 30544.415

CRUSHED SHALE 3858.990

TRANSFERRED TO CRUSHER RAW MILL 1049228.000

ADD: LATERITE 7480.000

IRON ORE 25882.000

FLY ASH 0.000

RAW MEAL PRODUCED 1082590.000

ADD: OPENING STOCK 2248.000

DEDUCT CLOSING STOCK 6425.000

RAW MEEL TRANSFERRED TO KILN 1078413.000

CLINKER PRODUCED 682540.000

ADD: OPENING STOCK 8267.550

DEDUCT CLOSING STOCK 18103.550

DECUCT CLINKER SOLD 0.000

CLINKER TRANSFERRED TO CEMENT MILL 672704.000

ADD: GYPSUM (excluding MOISTURE 2345 MT) 10711.000

NAKED CEMENT PRODUCED 683415.000

ADD: OPENING STOCK 10200.560

DEDUCT CLOSING STOCK 6455.441

CEMENT PACKED 687160.119

ADD : OPENING STOCK

TANDUR 0.000

HYDERABAD DUMP 907.600

MUMBAI DUMP 4846.400

TOTAL PACKED CEMENT 692914.119

LESS: CLOSING STOCK

TANDUR 0.000

HYDERABAD DUMP 0.000

DUMP STOCK IN TRANSIT 9152.000

LESS : TRANSFERRED TO OTHER UNIT 5.000

LESS SHORTAGES RECOVERY FORM 11.250

HANDLING AGENT 0.000

SELF CONSUMPTION AND SAMPLES 30.314

683715.555

BALANCE SHEET As at 31.03.09 (AMOUNT IN RUPEES)

PARTICULARS

SCHEDULE As at 31.03.09 As at 31.03.08

SOURCES OF FUNDS:

SHAREHOLDER'S FUNDS

Share Capital

Inter Unit Balances 01 334284574.68 1161402853.20

Reserves & Surplus P & L A/c (PROFIT)

02 62163226.44 0.00

LOAN FUNDS:

Secured Loans 03 0.00 0.00

Un-secured loans 03 0.00 0.00

TOTAL SOURCES OF FUNDS 396447801.12 1161402853.20

APPLICATION OF FUNDS:

FIXED ASSETS:

Gross Block 04 1790362655.63 1776822047.04

LESS: Depreciation 1535319533.38 1512969593.92

Net Block 255043122.25 263852453.12

Capital works in progress 05 415455.70 415455.70

INVESTMENTS 07 22795600.00 22795600.00

65

CURRENT ASSETS, LOANS & ADVANCESInventories 08 307846798.59 243264271.06

Sundry Debtors 08 68032487.75 60145301.37

Cash & Bank Balances 08 572493771.90 422780785.65

Other current Assets 08 0.00 3661986.00

Loans & Advances 09 153402214.00 156243117.52

1101775272.24 886095461.60

CURRENT LIABILITIES AND PROVISIONSCurrent liabilities 10 620631202.71 601732736.90

Provisions 11 383120569.23 371620642.23

1003751771.94 973353379.13

Net Working Capital 98023500.30 -87257917.53

MISC EXPENDITURE &LOSSES

Misc exps to the extent not ]Written off or Adjusted ]

12 20170122.87 22012354.15

Profit & Loss A/c.(LOSS) 0.00 939584907.76

TOTAL APPLICATION OF FUNDS

396447801.12 1161402853.20

NOTES TO ACCOUNTS 21

66

BASIS OF ACCOUNTING:

The accounts are prepared on historical cost convention adopting the accrual method of

accounting except for the following items which are accounted for on cash basis.

• Liquidated damages/penalties/claims made are accounted for on realization and

included in miscellaneous income.

Profit/Loss, if any on surplus/slow moving/non-moving items etc of stores and spares is

accounted for only in the year of their disposal.

This is the balance sheet of the company for the year 2008-09. We see various values provided

with their description given in the respective schedule mentioned. Some of the schedules are

discussed below.

Under the Shareholders’ funds we have the share capital and the inter unit balances. Since this

unit is a branch and is not registered individually, there is no share capital mentioned. Instead the

inter unit balances i.e. the net amount that the unit is credited to by the corporate office and the

other units is recorded here.

LAND & AMORTIZATION:

• Land given free by the State Govt. is valued at nominal cost or on the basis of

incidental expenditure incurred on its acquisition.

• Land free hold under mining lease at quarry & land lease hold with less than 99 years

lease is amortized within a period of ten years from the date of commercial

production of the respective units.

67

DEPRECIATION:

• Depreciation on fixed assets is charged off on straight line method at the rates as

prescribed in schedule 14 of the companies act 1956

• Depreciation is provided on assets after they are completed and become available for

use.

• Depreciation on assets added during the year is charged prorate from the month in

which these are capitalized & up to the month in which these are discarded, as the

case may be.

• Any individual assets whose written down value is Rs 5000/- or less at the beginning

of the year is fully depreciated during the year without retaining the residual value as

it is considered insignificant.

STAFF BENEFITS:

• Provision for gratuity under the payment of gratuity act 1972 & company own gratuity

scheme is made in respect of all employees in service as on 1st jan of of each year in

accordance with the actuarial valuation.

• Provision for earned leaves /half pay leaves etc which is en cashable on retirement of

death of any employee is made in respect of employees in service as on 1st jan of each

year in accordance with the actuarial valuation.

• Liabilities for bonus is provided as per the provision of payment of bonus act 1965 on

unit wise bases 7not corporation as a whole. The liability for the corporate office is

provided at a rate which is average of the rates at which the bonus is provided for the

other units.

PREMIUM OF REDEMPTION OF DEBENTURE:

68

Premium payable on redemption of debentures is charged to p&l a/c IEDC account in such

equal installments as the duration of debenture commencing from the year in which debenture

are allotted.

DETAILS OF INTER UNIT BALALCES

PARTICULARS A/C CODE

As at 31.03.09

As at 31.03.09

As at 31.03.08

As at 31.03.08

DEBIT CREDIT DEBIT CREDIT

Corporate Office 3801 125092084.42 332317596.14 71013307.31 1085790332.47

Mandhar Unit 3802 0.00 0.00 0.00 2220763.29

Kurkunta Unit 3803 0.00 290940.28 6751.16 11400.00

Bokajan Unit 3804 159541.50 0.00 7262.00 2840.00

Rajban Unit 3805 334981.00 0.00 3369633.80 0.00

Charkhi Dadri Unit

3806 11230.00 1425.00 0.00 24831.00

Akaltara Unit 3807 94065.00 32000.00 296674.00 0.00

Nayagaon Unit 3808 0.00 148815.65 0.00 709161.51

Adilabad Unit 3810 10811.67 4631.00 0.00 90093.00

Tandur unit 3811 0.00 59642248.30 54521847.11 0.00

Delhi Grinding Unit

3813 0.00 1583.00 0.00 0.00

Delhi Zonal Office

3817 0.00 0.00 0.00 0.00

69

Hyderabad Zonal Office

3818 59642248.30 0.00 0.00 54521847.11

Gauhati Zoal office

3819 0.00 0.00 0.00 0.00

Bombay Zonal Office

3820 0.00 0.00 0.00 0.00

Chennai Zonal Office

3821 0.00 0.00 0.00 0.00

Yerraguntla control Account

4002 0.00 127190297.20 0.00 147247060.20

TOTAL   185344961.89 519629536.57 129215475.38 1290618328.58

NET BALANCE     334284574.68   1161402853.20

INTER UNIT/ZONES/CORPORATE OFFICE TRANSFER:

• Finished goods transferred by the unit are initially valued at dispatch plan rates and

the quantity sold at dispatch rates and the quantity sold is then settled by zones at

actual net realizable value.

• Inter unit/zones//corporate office transfer of fixed assets etc are accounted at book

value.

• Inter unit transfer of clinker is accounted for at its realizable rates (by work back

method from cement) and its losses in transit are absorbed in cost by reciving unit.

• Inter unit/zone/corporate office balances are reconciled regularly and balance

confirmation obtained.

The profit that is generated from the profit and loss account is retained under the reserves and

surplus a/c. These are also called as retained earnings i.e. the amount that is retained with the unit

for further investment without distributing to the share holders.

70

Sales are stated exclusive of Excise Duty and Sales Tax.

The unit did not take any long term loan in the form of secured or unsecured loans. Hence the

loan funds for the unit are nil.

The schedule for the capital works in progress is given below. The civil engineering works such

as construction of buildings and the plant and machinery that are yet to be installed to be made

use of are considered as capital works in progress. Plant and machinery in transit or inspection

that is if they are running under trail for the inspection of the output and are not yet being used

for the normal production, they are treated as capital works in progress.

SCHEDULE - 5 CAPITAL WORKS IN PROGRESS

(AMOUNT IN RUPEES)

PARTICULARS

BALANCE

ADDITIONS

ADJUSTMENTS

CAPITALISED

BALANCE

As at 01.04.08

DURING THE YR

DURING THE YR

DURING THE YR

As at 31.03.09

WORKS IN PROGRESS I

1. Civil Engg. works

258910.65 0.00 0.00 0.00 258910.65

2. Plant & Mach awaiting erection

156545.05 0.00 0.00 0.00 156545.05

3. Others 0.00 0.00 0.00 0.00 0.00

Sub Total 415455.70 0.00 0.00 0.00 415455.70

IN TRANSIT/INSPECTION II1. Plant & Machinery in Transit/Inspection

0.00 0.00 0.00 0.00 0.00

Sub Total 0.00 0.00 0.00 0.00 0.00

71

TOTAL 415455.70 0.00 0.00 0.00 415455.70

INVESTMENT:

• Long term investments are stated at cost. Permanent decline in the value of such

investment is recognized & provided for.

• Current investment are stated at lower cost & quoted/fair value. Unquoted current

investments are stated at cost.

As defined in Accounting Standard 13 (AS-13) - "Investments are assets held by an enterprise

for earning income by way of dividends, interest, and rentals, for capital appreciation, or for

other benefits to the investing enterprise. Assets held as stock-in-trade are not 'investments'."

Some of the investments found in companies' balance sheets include stocks, bonds, mutual funds

and investments made towards their subsidiaries or associate companies.

Broadly investments can be categorized into four categories. They are as follows:

• Current and long-term investments

• Quoted and unquoted investments

72

Current and long-term investments:

On a broader basis, investments are classified as long-term and short terms investments. Current

investments are investments that are not intended to be held on for more than a year from the

date of purchase. An example of the same would be an investment in a liquid fund. On the other

hand, AS-13 states that an investment other than a current investment is termed as a long term

investment.

In the financial statements, current investments are valued at the lower of cost and fair value.

However, in the case of long term assets, it should be valued at cost. However, it is mandatory

for companies to make a provision for diminution in value if there is a decline in the value of the

investment. AS-13 has defined fair value as - "Fair value is the amount for which an asset could

be exchanged between a knowledgeable, willing buyer and a knowledgeable, willing seller in an

arm's length transaction. Under appropriate circumstances, market value or net realizable value

provides an evidence of fair value." Apart from the actual cost of the asset, the cost of an

investment also includes acquisition charges such as brokerage, fees and duties.

Further, as values of investments fluctuate from time to time, companies need account for the

same in their books (profit and loss account). It is mandatory for companies to report the

aggregate amount of quoted and unquoted investments. They should also give the aggregate

market value of quoted investments as on the date of reporting.

We may also notice investments termed 'investment property' annual reports of in some

companies. This is nothing but an investment in land or buildings which are not intended to be

used or occupied by the investee. Such an investment is considered as a long term investment.

Quoted and unquoted investments: 

Quoted investments are investments whose value is easily assessable. Investment in the stock of

companies which are listed on stock exchanges would be the best example of quoted

investments. This is because market prices give these instruments a readily assessable value.

Investment in mutual funds would also classify as a quoted investment. On the other hand, un-

73

quoted investments are investments which do not have a readily available price. Many times you

will find that companies have invested in stocks that are not listed on any stock exchange. For

such kind of investments, other means are used to determine fair value.

SCHEDULE 7 - INVESTMENTS

(AMOUNT IN RUPEES)

Particulars MARKET VALUE

BOOK VALUE

MARKET VALUE

BOOK VALUE

As at 31.03.09

As at 31.03.09

As at 31.03.08 As at 31.03.08

LONG TERM

UN QUOTED SHARES (FULLY PAID) AT COST(1) 3920840(Previous year3920840) equity shares of Rs.10/- each of AP Gas Power Corpn.(including 1641280 Bonus shares)

0.00 22795600.00 00 22795600.00

TOTAL INVESTMENTS

0.00 22795600.00 0.00 22795600.00

74

INVENTORIES:

• VALUATION:

• Stores spare parts & raw material except as indicated in below are stated at weighted

average cost. The obsolete/unserviceable stores &spares when determined are treated

as scrap & valued at net realizable value.

• Clinker &other semi-finished goods are stated at lower of unit’s weighted average

cost or net realizable value on basis of work back formula.

• Finished goods at factories/projects/in dumps or in transit to dumps are stated at

lower of unit’s weighted average cost or realizable value. Fright including in selling

expenses up to dump is included in value of finished goods lying at various dumps.

• The total quantity of various scrap items as at close of financial year is valued as per

rates available as per latest sales order for respective items. However, where no such

rates are available because of scrap have been generated for the first time or not

disposed off earlier, reserve price fixed for disposal of such scrap items it adopted for

the purpose of valuation.

•

LOOSE TOOLES&TACKLES:

Tolls and tackles are written off over a period of three years

75

Below is the schedule for the Current Assets.

SCHEDULE - 8 CURRENT ASSETS(AMOUNT IN RUPEES)

PARTICULARS A/C CODE   As at 31.03.09 As at 31.03.08

INVENTORIES (As certified by Mgmt)

Stores & Spares Parts 1501-1510 194046323.89 166305455.00

Scrap sales-Stock 1522 11904140.00 8533528.00

Coal 1513 16413227.71 8060238.99

Coal in Transit 1520 0.00 0.00

Packing Material 1516-1517 4876701.81 3659861.71

Packing mat in Transit 1521 0.00 2097198.00

Stores/Spares in Transit/Insp.

1518 2668038.29 875649.29

Tools & Tackles 1519 390.00 1861.00

Raw Mat @ cost/estimated cost

1701 to 1711

18768410.12 7482415.28

Raw Material in transit 1712 0.00 0.00

Semi fin goods at cost/estimated cost(Clinker at Lower of cost/ estimated cost or Net realizable value)

1718 26507954.81 12031089.63

Finished goods (at lower of cost/estimated cost or net realizable value)

1719 11186382.96 21685880.00

Damaged Cement /Set 1717 0.00 0.00

Cement in transit 1721 21475229.00 12531094.16

Total Inventories     307846798.59 243264271.06

76

SUNDRY DEBTORS (unsecured)

Over 6 months considered good

1901 TO 1908

131796116.35

Less provisions made for bad/debts

1909 63763628.60

68032487.75 60145301.37

CASH & BANK BALANCES

Cash in hand 2001 TO 2004

108376.05 78609.65

Bank Balance 2101 & 2104

91187124.85 172034940.00

Short term Deposits & Int 2102 461550000.00 250000000.00

Remittance in Transit 2005 0.00 0.00

Drafts/Cheques in hand 2006 3345000.00 667236.00

Int. accrued on Term Deposits

2103 16303271.00 3661986.00

TOTAL     572493771.90 426442771.65

OTHER CURRENT ASSESTSInt. accrued on investments 2201 0.00 0.00

TOTAL     948373058.24 729852344.08

Packing material like gunny bags/HDPE bags are used to store the cement. Raw materials

include Lime stone, Laterite, Iron Ore, Fly Ash, Gypsum and Other raw materials.

Cash includes cash in hand, imprest in hand, franking machine imprest and stamps in hand.

77

78

SCHEDULE - 9 LOANS & ADVANCES(AMOUNT IN RUPEES)

PARTICULARS A/C CODE As at 31.03.09 As at 31.03.08

LOANS

Other Outside parties 2302 0.00 0.00

Employees 2304 TO 2307 13400.00 26900.00

Interest accrued on above 2309 247417.70 293251.95

TOTAL LOANS   260817.70 320151.95

ADVANCES (Recoverable in cash or in kind or for Value to be received)Contractors & suppliers 2401 TO 2406 26850144.03 29701062.52

Employees 2408 to 2413 393279.40 12589648.95

Claims Recoverable 2419,2420,2427 to 2429

11301055.70 10235522.70

E D Relief Recoverable 2426 1033742.50 1033742.50

Others 2407,2414,2415,2418, 2424,2425

51908586.06 47690502.29

TOTAL ADVANCES

  91486807.69 101250478.96

DEPOSITS

Deposit with E&S.T Authorities

2701/2702 8738754.00 7695249.00

Other Deposits 2709 61070110.34 56060820.34

Interest accrued on above 2711 3723512.00 2794205.00

TOTAL DEPOSITS

  73532376.34 66550274.34

GRAND TOTAL   165280001.73 168120905.25

Provision made for doubtful loan/adv

2459 -11877787.73 -11877787.73

TOTAL   153402214.00 156243117.52

Loans &advances secured 695149.20 12948983.10

Loans & advances unsecured/considered good 152707064.80 143294134.42

Loans & advances unsecured/considered doubtful 11877787.73 11877787.73

TOTAL   165280001.73 168120905.25

Loans to employees are home loans, vehicle loans and others. Advances given to the employees

are festival advances, Pay advances, travelling advances, medical and other advances. Excise

duty relief recoverable. Other advances include Pre Paid Expenses, Sales tax set off, Excise duty

set off.

ACCOUNTING FOR BAD&DD/LONES/ADVANCES ETC:

• Provision is made for doubtful debts/loans and advances when the same is considered

doubtful of recovery but the chance of recovery is subsist.

• Amounts are written off when the efforts for recovery failed either due to legal

process or where it is considered litigation will not be fruitful and recovery is not

possible.

DEPOSIT WORKS:

In respect of deposit works in progress, the same are treated as corporation’s capital-work-in-

progress &incidental expenditure during construction period is proportionately added to the

deposit work when the ownership is transferred & capitalized.

SCHEDULE - 10 CURRENT LIABILITIES

(AMOUNT IN RUPEES)

PARTICULARS A/C CODE As at 31.03.09 As at 31.03.08

Sundry Creditors

Sundry Creditors 2801 TO 2805 84299470.94 86764035.98

Sundry Creditors SSI Units 2806 3002043.53 2994056.53

Deposits Received 2901 TO 2904 46377358.86 41390081.39

Advance from Customers 3001 TO 3002 101312519.72 94039097.80

Liability other Exps. 3109 224036038.44 231562750.56

Dues to Employees 3201 TO 3203 365942.20 530304.00

79

Others 3301 TO 3309,

3401TO3409,

3501 TO 3519

145701218.63 129504531.25

Interest Accrued on deposits 3106 15536610.39 14947879.39

TOTAL   620631202.71 601732736.90

Deposits include Security deposits from works contracts, suppliers, Earnest money deposits and

Deposits from stockists.

Salaries, wages and other claims payable to employees come under Dues to employees.

All pension funds, schemes, Income tax on salaries, LIC premium, Employment or professional

tax, Central sales tax, State sales tax and cess payable come under other advances.

SCHEDULE - 11 PROVISIONS

(AMOUNT IN RUPEES)

PARTICULARS A/C

CODE

As at 31.03.09 As at 31.03.08

PROVISIONS

For Gratuity 3703 52755845.00 45081964.00

For Bonus 3704 1696000.00 180000.00

For Capital works 3705 0.00 0.00

For E/L & HPL encashment 3709 25805063.00 19787511.00

For Others 3711 302863661.23 306571167.23

80

TOTAL   383120569.23 371620642.23

Other provisions include the provisions for the payment of other liabilities that have to be paid in

the future.

SCHEDULE - 12

MISC. EXPENDITURE TO THE EXTENT NOT WRITTEN OFF OR ADJUSTED

(AMOUNT IN RUPEES)

PARTICULARS

A/C

CODE

BALANCE

As at

01.04.08

ADDITIONS

ADJUSTED/

CAPITALISED

BALANCE

As at

31.03.09

Expenditure on

Prospecting and

boaring pending

allocation

4301 0.00 0.00

Quarry

Development

Expenses.

4303 22012354.15 1853346.89 3695578.17 20170122.87

Deferred Revenue

Expenses.

4304 0.00 0.00 0.00 0.00

Shortages/Losses

pending

Investigation

4305 434160.88 0.00 0.00 434160.88

TOTAL   22446515.03 1853346.89 3695578.17 20604283.75

Less: Provision for

shortages & Losses

pending

4307 434160.88 0.00 0.00 434160.88

81

Investigation

TOTAL   22012354.15 1853346.89 3695578.17 20170122.87

CEMENT CORPORATION OF INDIA LIMITED

TANDUR CEMENT FACTORY

PROFIT & LOSS A/C FOR THE YEAR ENDED 31st MARCH.2009

(AMOUNT IN RUPEES)

PARTICULARS SCH/A.CODE As at 31.03.09 As at 31.03.08

INCOME :

SALE OF CEMENT (including self

conspn. of Rs.46814.92

Prev.yr Rs.50466.00)

SALES

Less: ED on actual sales

4403&4404,440

6

4409

2579651383.10

(355447646.89)

2224203736.21

2272497084.79

(367095580.60)

1905401504.19

Sale of Clinker 4402 0.00 0.00

Other Income 13 197496730.19 89194625.59

Accretion/(decretion) to semi finished

and finished goods

14 16292114.98 15971353.32

TOTAL INCOME   2437992581.38 2010567483.10

EXPENDITURE:

Raw material consumed 15 197359983.20 151850125.74

Stores & Packing Material Consumed 16 115495542.98 88232591.90

Employee Remuneration & Benefits 17 118435431.60 88628431.35

82

Other Manufacturing, Admin. &

Selling Expenses

18 916686541.58 886364244.48

Interest 19 60113126.00 55672038.00

Depreciation 8201-8204 19574277.95 17724550.65

Deferred expenditure Written Off 8301 0.00 0.00

Corporate Office Over Heads 8501 2444180.00 -3000000.00

Allocation of R & D EXPN. 8502 0.00 0.00

Allocation of T&D EXPN. 8504 0.00 0.00

Allocation of Z O Expenses. 8505 0.00 0.00

Provision for doubtful loans and

advances/shortage loss pending

investigation

8401-8402 0.00 14744023.02

Total Expenditure   1430109083.31 1300216005.14

Profit /(Loss) for the Year   1007883498.07 710351477.96

Extra-ordinary Items 20'A' 0.00 0.00

Profit /(Loss) after Extra-ordinary items 1007883498.07 710351477.96

Adjustments related to past yrs 20'B' -5255363.87 -19495248.56

PROFIT/(LOSS) AFTER PROIR

PERIOD ADJUSTMENTS

1002628134.20 690856229.40

Fringe Benefit Tax 880000.000 790000.000

Profit/Loss after FBT   1001748134.20 690066229.40

Add: Loss kept at C.O and

transferred to unit/z o during the year

-939584907.76 -1629651137.16

BALANCE C/F TO B/S PROFIT/(LOSS) 62163226.44 -939584907.76

83

84

SCHEDULE - 13 OTHER INCOME

(AMOUNT IN RUPEES)

PARTICULARS A/C CODE As at 31.03.09 As at 31.03.08

Scrap sales 4601 5441982.00 290301.00

Clms. cement short recd/Damaged 4603 793910.00 441379.00

Interest received Bank 4901 150255421.00 75591887.00

Interest received Staff 4902 2380.00 3888.00

Interest received others 4903 1553376.00 1553376.00

Other Misc. Income 4904 TO 4909 26261253.90 10203101.68

Receipts from Township 5001 TO 5009 987330.50 964494.10

Excess provisions w/back 5104 12155076.79 146198.81

Interest on financial inst loan w/d 5010 0.00 0.00

Interest on cc a/c 5107 0.00 0.00

Interest on Government loan 5109 0.00 0.00

Interest on Debentures w/d 5011 0.00 0.000

Interest on premium on

Debentures w/d

5012 0.00 0.000

Interest on Public deposits. w/d 5108 0.00 0.000

Profit on sale Fixed Assets 5102 46000.00

TOTAL   197496730.19 89194625.59

Hire charges of equipment and vehicles and other receipts come under other miscellaneous

income.

Receipts from township are rent receipts, water and electricity charges, subsidized transport

receipts etc.

CLASSIFICATION OF EXPENDITURE:

• Expenditure incurred on repairs and maintenance of fixed assets, including cost of stores

&spares that increase the future benefits from the existing assets beyond its previously

assessed standard of performance is capitalized e.g. an increase in capacity.

• Expenditure incurred on repairs and maintenance of fixed assets, including cost of stores

&spares except as shown in (1) above are charged to p&l A/C.

• Salaries and wages: Salaries & wages incurred on repairs & maintenance of plant &

machinery, building etc are charged directly to salaries and wages account.

• Other sundry expenses: Expenditure on parks, plantation of trees and purchase of tents

and tarpaulins etc are charged off as revenue expenditure.

SCHEDULE - 14

ACCRETION/(DECRETION) TO SEMI-FINISHED AND FINISHED GOODS

(AMOUNT IN RUPEES)

PARTICULARS A/C CODE As at 31.03.09 As at 31.03.08

SEMI-FINISHED GOODS IN STOCK

85

-Closing Stock 4802 26507954.81 12031089.63

-Opening Stock 4801 12031089.63 8964304.80

TOTAL   14476865.18 3066784.83

FINISHED GOODS IN TRANSIT

-Closing Stock 4812 21475229.00 12531094.16

-Opening Stock 4811 12531094.16 12848584.22

TOTAL   8944134.84 -317490.06

FINISHED GOODS IN STOCK

-Closing Stock 4804 11186382.96 21685880.00

-Opening Stock 4803 21685880.00 8992825.10

TOTAL   -10499497.04 12693054.90

SCRAP STOCK

-Closing Stock 4808 11904140.00 8533528.00

-Opening Stock 4807 8533528.00 8004524.35

TOTAL   3370612.00 529003.65

GRAND TOTAL   16292114.98 15971353.32

The stocks are valued at the lower of cost and net realizable value.

SCHEDULE - 15 RAWMATERIALS CONSUMED

PARTICULARS A/C CODE As at 31.03.09 As at 31.03.08

RAW MATERIAL

86

Opening Balance 7482415.28 15827753.30

ACQUISITION DURING THE YEAR 97777138.19 81882408.94

limestone purchased, quarrying

and transportation @

110868839.85 61622378.78

SUB TOTAL   216128393.32 159332541.02

LESS: Closing stock 1701 TO

1711

18768410.12 7482415.28

Raw Material Consumed 5901to5909 197359983.20 151850125.74

The closing stock of the raw material is the one entered in the current assets inventory of the

balance sheet.

DEFERRED REVENU EXPENDITURE:

• Expenditure on prospecting &boring is treated as deferred revenue expenditure &

charged off in three to five years after units go into commercial production

• Expenditure on removal of over burden etc, at the mines which is utilized for capital

works like laying roads, stockyard, crusher ramp etc, is capitalized. The rest of the

expenditure incurred on removal of over burden etc, is treated as initially ad deferred

revenue expenditure & is charged over the period for which the limestone exposed

out of quarry development is available for exploitation

• The cost of internal partition &others fixtures in rented buildings are directly charged

off in the year of installation, but if the cost is more than the rupees one lakh, the

same is treated as deferred revenue expenditure& is charged of three to five years.

• After start of commercial production of a unit, initial full charged off high chrome

grinding media is treated as DRE & written off over a period of three years. However

make up charges are charged to p&l account.

87

• In case there is no un-utilized grants/subsidy for voluntary retirement scheme (VRS),

then terminal benefits which are attributable to VRS payment equivalent to one &

half month wages for each completed year of services or wages for the balance period

of service, whichever is less & notice period pay are deferred & charged off during

the remaining period of service of the individuals or in a maximum period of 5 years,

whichever is less. However, any expenditure incurred on VRS/VSS on or after

01.04.2003 will be recognized as an expense when it is incurred and charged off

wholly in that year itself.

PRIOR PERIOD/EXTRA-ORDINARY ADJUSTMENT:

Expenditure/receipts relating to the particular year, coming to notice after close of the accounts

i.e., cutoff date are booked under the relevant head of expenditure/receipts of the next year, if the

amount involved not more than Rs 10000/- in the case if the amount is more than Rs10000/- the

provisions contained in the accounting standard-5 of the institute of charted accountants of

INDIA are applied for the determination of its accountal under the natural head of accounts of

current year/prior period/ extra ordinary expenditure /receipts

ACCOUNTAL OF FOREIGN EXCHANGE TRANSACTION:

88

Foreign lone liabilities are translated at the closing market exchange rate. Gains or losses on

settlement of transaction

(a) During project period are debited/credited to the relevant cost of equipment those relating to

spares and services are credited/debited to IEDC.

(b) After the project has gone into commercial production the gains or losses are debited/credited

to the relevant cost of equipment but those relating to spares and services are charged off to

profit & loss a/c. depreciation on such adjustment to fixed assets is adjusted prospectively.

GOVERNAMENT GRANTS/SUBSIDIES:

• Government grants/subsidies related to particular assets are deducted from the gross

value of concerned assets in arriving in the book value. Where grants are related to

specific assets equals the whole or virtually the whole of the cost of the assets, the assets

is valued at nominal valued or on the basis of incidental expenditure incurred on its

acquisition /installation.

• Grants for voluntary retirement scheme, transport subsidy and other revenue grants are

deducted from the related expenditure

• Government grants received central investment subsidy scheme included in central

government incentive for industries for back ward area & other similar grants received

from the state government, where no repayment is ordinarily expected in respect thereof

the grants are treated as capital reserve

• Capital/reserve grants/subsidies, other than those specified above are accounted for as

per accounted standard -12 issued by the institute of charted accountants of INDIA.

CLAIMES OF THE CORPORATION:

89

• Insurance claims are brought to account on the bases of surveyors report and /or on

the bases of claim lodged where on account payment have been received. In case,

however, where surveyor’s report, for the event of losses occurred up to 31 st march is

not before closing of the accounts, the discloser to that effect is made in the form of

notices to the accounts.

• Railway claims are brought to the account on lodging of the claims.

PRE-PAID EXPENCES:

Expenditure of Rs 1000/-or less in each case incurred in advance of the following year(s) are

charged off as expenses of the current year.

INDIRECT EXPENCES ON EXPANSION PROJECTS ADJACENT TO THE EXISTING

PLANT:

The common expenses on administration, supervision etc incurred by existing plants are not

charged to the expansion project/new projects adjacent to the existing plants.

ALLOCATION OF CORPORATE OFFICE EXPENDITURE:

Net revenue expenditure /income of the corporate office is allocated to all the units and projects

under construction on estimates based on the probable to the different units or projects are

decided by the management to their best assessment and judgment

COST ACCOUNTING SYSTEM

90

The unit follows mercantile method of accounting based on double entry system. The accounts

are codified for the Company as a whole to maintain uniformity of accounting. Receipts and

expenditure are classified according to the nature of each item in accordance with the

Accounting Manual. For costing of the product, process-costing system is adopted. For

collection of costs, the factory is divided into production cost centers, service cost centers and

overhead cost centers. There is also a non-cost center to collect expenses of non-cost nature.

Mercantile Method is a method of accounting that recognizes revenue when earned rather than

when due or collected and expenses when incurred rather than when paid. Thus, under

Mercantile Method, transactions are recorded on the basis of income earned or expense incurred,

irrespective of actual receipt or payment. For example, a seller bills the buyer at the time of sale

and treats the bill amount as revenue, even though the payment may be received later.

Voucher-wise details are analyzed from the financial books allocated and apportioned to these

cost centers as detailed below. A voucher is a document containing the details of a financial

transaction. Examples include sales invoice, purchase invoice, pay slip, rent receipts and so on.

1. RAW MATERIALS: The main Raw materials used are limestone, shale, laterite and

Gypsum. For all Raw materials, separate quantity records are maintained by production

department, while priced stores ledgers are maintained for all items except for limestone and

shale kept in the Accounts Department. The consumption of various raw materials is valued on

the weighted average basis, including Coal & Packing Materials (yearly). Excise Duty on

modvatable inputs is not considered while computing the weighted average cost of inputs.

Limestone, shale and laterite are obtained from the Corporation's own mines. On date

there are four Mining Lease Areas, two for limestone and one each for shale and laterite. The

mines of limestone are adjacent to factory, while, the mine for shale is within one Km and

distance to the Laterite mine is more than 45 Kms, which is given on a contract for mining and

91

transportation and paid a fixed rate per ton of the material delivered at the factory. Limestone

and shale are transported by departmental dumpers as well as through Private Contractors

Dumpers to crusher and laterite is transported by the contractor to factory. Laterite is weighted

in factory weighbridge on its receipt while the quantity of limestone and shale is determined on

the basis of capacity of Dumper, and on the number of trips made either to crusher or to

stockpile. The valuation of limestone and shale is made on the basis of actual expenditure

incurred after apportioning and charging off the Quarry Development expenditure in accordance

with the Accounting Policy of Corporation. All other Raw materials are normally received by

Rail and unloaded through wagon trippler, which has got the automatic recording of the weight.

In case of road receipts, the quantity is accepted on actual weight through road weighbridge

installed in the factory. Issues are accounted from the monthly reports prepared by the

Production Department. Issues are priced at only weighted average rate. Physical verification is

also undertaken every month and year. Stock adjustments are made for any discrepancies found

on physical verification through consumption.

2. STORES & SPARES: Stores receipt note is prepared for all stores material received.

Receipts are valued at landed cost, which is calculated on the basis of invoice value excluding

Modvat wherever is applicable plus freight, where directly identifiable. Weighted average price

is used for valuing the issues. Bin cards are kept in stores while Price Stores Ledger is

maintained in Accounts Department. Physical Verification of stores is made by the management

as per perpetual inventory system.

Modvat stands for "Modified Value Added Tax". It is a scheme for allowing relief to final

manufacturers on the excise duty borne by their suppliers in respect of goods manufactured by

them. E.g. ABC Ltd is a manufacturer and it purchases certain components from PQR Ltd for

use in manufacture. PQR Ltd would have paid excise duty on components manufactured by it

and it would have recovered that excise duty in its sales price from ABC Ltd. Now, ABC Ltd has

to pay excise duty on toys manufactured by it as well as bear the excise duty paid by its supplier,

PQR Ltd. This results in multiple taxation. Modvat is a scheme where ABC Ltd can take credit

92

for excise duty paid by PQR Ltd so that lower excise duty is payable by ABC Ltd.

The scheme was first introduced with effect from 1 March 1986. Under this scheme, a

manufacturer can take credit of excise duty paid on raw materials and components used by him

in his manufacture. Accordingly, every intermediate manufacturer can take credit for the excise

element on raw materials and components used by him in his manufacture. Since it amounts to

excise duty only on additions in value by each manufacturer at each stage, it is called value-

added-tax (VAT).

The Modvat credit can be utilized towards payment of excise duty on the final product.

3. VALUATION OF SEMI-FINISHED AND FINISHED GOODS: Finished and Semi

finished goods are valued at lower of weighted average cost or net realizable value in financial

accounts and as per cost at the relevant stage, in cost accounts.

4. LABOUR: Payroll is computerized and the monthly wages/salary is computed based on the

attendance generated by the system of card punching. The payroll is maintained cost-center-

wise. Summary of the payrolls is used for allocation to the cost centers.

5. OVERHEADS: For the purpose of cost allocation, the following cost centers have been

adopted.

93

A) Main Production Cost Centers:

1. Limestone raising & Shale raising

2. Crusher

3. Raw Mill

4. Kiln

5. Cement Mill

6. Packing house

B) Service Cost Centers: Basis of allocation

1. Power, including DG set - Units consumed

2. Workshop - Depreciation of Plant & Machinery

3. Civil Maintenance - Depreciation of plant buildings.

4. Material handling - Quantity handled

5. Laboratory - Technical Assessment

6. Water supply - Technical Assessment

7. Railway siding and Loco - Quantity handled

8. Coal Mill - Kiln (100%)

c) Overheads cost centers:

1. Administration Overheads

- Conversion Cost for clinker, Cement grinding & packing

94

2. Social Overheads

- Direct employees in the Kiln, Cement mill and Packinghouse.

3. Selling & Distribution

- Quantity of cement sold.

Overhead expenses incurred in the Production centers and the overheads apportioned to factory

from service and utility cost centers constitute factory manufacturing overheads.

6. DEPRECIATION: The Company adopts the straight-line method of depreciation. The rate

of depreciation is as per schedule XIV of the Companies Act as amended by Govt. of India,

Department of Company Affairs, letter dt.16th December 1993. Depreciation on common assets

is allocated along with overheads.

7) ACCOUNTING FOR ROYALTY: Royalty is paid on limestone & shale raised, on the rates

prescribed by the State Government. This is treated as a part of limestone cost.

8) Accounting for Research and Development: For research and development activities

separate account code is maintained and expenditure is collected. This is treated as a part of

overheads.

9) Accounting for packing cost including cost of packing materials and packing overheads:

Separate account codes for the above expenditures are there. These are collected and shown as a

part of packing cost.

10) Accounting for interest and Financial Charges: Separate account codes are there for these

expenditures. The company’s Corporate Office apportions this expenditure once in a year to

each of its units. Such expenditure is shown separately for each unit and taken into account for

charging to each account code.

95

In the cost statement these expenditures are taken as provided in the Cost Audit guidelines.

11) Accounting for Inter-unit Transfers: These are adopted at actual and accounted

accordingly.

12) Accounting for expenses incurred for Pollution Control: Separate account code is

maintained for collection of expenditure incurred for Pollution Control. This is taken as a part of

overheads.

13) Accounting for Sales Realization and Excise Duty, Taxes: The Sales Realization and

Excise Duty are accounted on the basis of actuals/accruals based on invoices raised.

14) Inventory Valuation:

Raw Material : Valued on actual cost basis;

Work-in-progress and Finished Goods : Finished and Semi finished goods are valued at

lower of weighted average cost or net realizable value in financial accounts and as per cost at the

relevant stage, in cost accounts.

MAJOR INPUT MATERIALS CONSUMED

  2008-2009 2007-2008   Qty. Rate Amount Qty. Rate Amount

  (MT) (RS) (RS) (MT) (RS) (RS)

96

1. Indigenous:            (a) lime stone 950283.000 108.50 103105049 846000.000 102.51 86721738 (b) Iron Ore 25882.000 2998.57 77608901 25058.000 2075.62 52010763           (c) Laterite 7480.000 178.33 1333884 6489.000 169.47 1099664

           

(d) Shale 98945.00 67.46 6674824 80228.00 60.44 4849312              (e) Fly-Ash Dry 0.000 0.00 0 0.000 0.00 0         (f) Gypsum 10711.000 1896.13 20309441 9713.000 1735.54 16857289              (g) Packing Material 13738145 6.02 82636692 12187630 5.67 69163688 (Nos)          

         2.Self manufactured:                         3. Imported:                         4. Total     291668791     230702454              

The increase in cement production over previous year comes to 11.12%, the increase in Raw

material consumption cost including packing materials works to 26.43% mainly due to increase

in input cost per MT of Iron ore by 44.47% and gypsum by 9.25% and packing material by

6.17% over previous year.

STANDARD/ ACTUAL CONSUMPTION OF INPUT MATERIALS PER UNIT

Particulars Unit Standard / Actuals    NormClinker stage     2008-2009 2007-2008 (a) Iron Ore Ton / Ton of Clinker 0.04 0.04 0.04

97

          (b) Laterite Ton / Ton of Clinker 0.04 0.01 0.01          (c) Crushed Limestone Ton / Ton of Clinker 1.31 1.39 1.40 (d) Crushed shale Ton / Ton of Clinker 0.21 0.15 0.13 Cement Stage                 (F) Gypsum Ton / Ton of Cement 0.04 0.02 0.02          

There is increase in Crushed shale consumption per MT of clinker by over 0.02 over previous

year. However, there is a decrease in crushed lime stone consumption at clinker stage since both

the products are interlinked products.

POWER, FUEL AND UTILITIES

Particulars 2008-2009 2007-2008   Qty. Rate Amount Qty. Rate Amount    RS RS   RS RS1. Indigenous (purchased) :            coal (MT) 158523.00

0 2343.37 37147817

3 145401.000 2168.8

8 315357062

(a) APTRANSCO (KWH) 89636980 2.24 200873775

83141800 2.60 216099873

             (b)power overhead     5284943     5372213 2. Self generated/ produced:

           

(KWH)            3. Imported:                         4. Total power        

      206158718

    221472086

The coal cost per MT has increased by 8.05% compared to previous year due to increase in sale

price by supplier i.e. by M/s. SCCL & M/s. WCL. The power cost has decreased to Rs.2.24 per

KWH in current year compared to Rs 2.60 per KWH in previous year. This is on account of

credits due to revision of rates passed on by APGPCL in 2008-09.

98

STANDARD/ ACTUAL CONSUMPTION OF POWER, FUEL AND UTILITIES IN

TERMS OF QUANTITY PER UNIT OF PRODUCTION

Particulars Unit Standard Actuals

    (Budget) 2008-09 2007-08

          (a) Diesel unit power produced --- 0.00 0.00           (b) Coal Kgs./ Ton of clinker   232.25 239.40           (c) Power consumption Units/ Ton of

Cement120.00 129.73 134.98

         

There is still scope in achieving power reduction to the level of 120 units taken as standard. If

the unit can achieve the standard internally fixed, there will be a saving Rs.21.80 per MT of

cement and per bag the reduction will be Re.1.09 in cost which is very substantial amount

working to Rs.149 Crores.

OVERHEADS

Particulars 2008-2009 2007-2008

RS RS

  for the factory as a whole& for the factory as a whole&

  product under reference product under reference

1. Factory 66648431 62803597

     

2. Administration 17677026 27356873

3. Social 16038801 14193723

4. Selling 8798720 10446540

 

5. Distribution 215530601 235341965

TOTAL 324693579 350142698

There is a decrease of overall overheads cost by Rs 254.49 lakhs during 08-09 compared to

previous year.

99

NON-MOVING STOCK (at the end of the year)

Particulars 2008-2009 2007-2008

a1.Total direct material consumption 2916.69 2307.02

     

a2.Closing stock of direct material 236.45 132.39      a3. Value of non-moving stock 0.00 0.00 a4. Percentage of a3 to a2 0.00 0.00

b1.Total indirect material consumption (coal + stores 4612.32 3959.60

& spares)    

b2.Closing stock of indirect material (including 2250.32 1837.77

coal lakhs)    

b3.Value of non-moving stock 1142.33 1025.33

     

b4. Percentage of b3 to b2 50.76 55.79

     

c1.Work-in-progress ------ ------

c2.Closing stock 265.99 120.32

     

c3.Value of non-moving stock 0.00 0.00

     

c4.Percentage of c3 to c2 0.00 0.00

     

d1.Finished Goods ---------- ----------

d2.Closing stock 327.26 342.16

     

d3.Value of non-moving stock 0.00 0.00

d4.Percentage of d3 to d2 NA NA

e1.Total : (Consumption) 7529.01 6266.62

e2.Closing stock 3080.02 2432.64

e3.Value of non-moving stock 1142.33 1025.33

e4.Percentage of e3 to e2 37.09 42.15

SALES OF THE CEMENT

Particulars 2008-2009 2007-2008

  Qty. Rate Amount Qty. Rate Amount

100

    Rs.Per MT

Rs.   Rs.Per MT Rs.

1. Purchased goods :            a) TRADING NIL NIL NIL NIL NIL NIL         2. Loan license basis: NIL NIL NIL NIL NIL NIL3. Own manufactured:                         4. Total sale of Cement 683715.555 3252.76 2223961162 610914.970 3116.26 1903772092 5.Export sales 0.000 0.00 0 0.000 0.00 0 TOTAL SALE OF CEMENT &

CLINKER 683715.555 3252.76 2223961162 610914.970 2975.48 1817765045

MARGIN PER UNIT OF OUTPUT

Particulars 2008-2009 2007-2008  Cost of Sales Net Sales Margin Cost of Sales Net Sales Margin

  (Rs.) Reals. (Rs.) (Rs.) (Rs.) Reals. (Rs.) (Rs.)

1.Purchased goods : NIL NIL NIL NIL NIL NIL

  2.Loan license basis : NIL NIL NIL NIL NIL NIL             3.Own manufactured:                         a) OPC Cement 1773.27 3252.76 1479.49 1920.79 3116.26 1195.47              

PRODUCTION FLOW CHART 2008-2009

101

OPENING STOCK

102

LIME STONE 0.00

SHALE 0.00

ADD RAISING DURING THE YEAR

LIME STONE 965000.00

SHALE 98800.00

LEASS: CLOSING STOCK

LIME STONE 0.00

SHALE 0.00 TRANSFERRED TO CRUSHER

CRUSHED LIMESTONE 965000.00

CRUSHED SHALE 98800.00

ADD: OPENING STOCK

CRUSHED LIMESTONE 15827.415

CRUSHED SHALE 4003.990

DEDUCT CLOSING STOCK

CRUSHED LIMESTONE 30544.415

CRUSHED SHALE 3858.990TRANSFERRED TO CRUSHER RAW MILL 1049228.000

ADD: LATERITE 7480.000

IRON ORE 25882.000

FLY ASH 0.000

RAW MEAL PRODUCED 1082590.000

ADD: OPENING STOCK 2248.000

DEDUCT CLOSING STOCK 6425.000

RAW MEEL TRANSFERRED TO KILN 1078413.000

CLINKER PRODUCED 682540.000

ADD: OPENING STOCK 8267.550

DEDUCT CLOSING STOCK 18103.550

DECUCT CLINKER SOLD 0.000

CLINKER TRANSFERRED TO CEMENT MILL 672704.000ADD: GYPSUM (excluding MOISTURE 2345 MT) 10711.000

NAKED CEMENT PRODUCED 683415.000

ADD: OPENING STOCK 10200.560

DEDUCT CLOSING STOCK 6455.441

CEMENT PACKED 687160.119

ADD : OPENING STOCK

TANDUR 0.000

HYDERABAD DUMP 907.600

MUMBAI DUMP 4846.400

TOTAL PACKED CEMENT 692914.119

LESS: CLOSING STOCK

TANDUR 0.000

103

HYDERABAD DUMP 0.000

DUMP STOCK IN TRANSIT 9152.000

LESS : TRANSFERRED TO OTHER UNIT 5.000

LESS SHORTAGES RECOVERY FORM 11.250

HANDLING AGENT 0.000

SELF CONSUMPTION AND SAMPLES 30.314

683715.555

COST INFORMATION

PARTICULARS QUANTITY RATE AMOUNT Cost per

      Per unit (MT)   Current

    Unit (Rs.) (Rs.) Year

          2006-07            (Rs.)Material consumed:        (item-wise covering at least 80%        of items by value)          1.Purchased           a)indigenous (specify)         Gypsum (MT) 9713.000 1735.54 16857289 27.41 b)imported (specify)        2)Self manufactured (specify)        

Clinker (MT) 605287.000 1210.72 732835474 1191.60

Total   615000.00   749692763 1219.01Process chemicals (specify)        

Utilities          1.Purchased           a) Indigenous (Power) (units) 24927113.000 2.60 64789864 105.35 b) Imported      2.Self manufactured          Direct wages and salaries   5227794 8.50Consumable stores and spares     10602721 17.24Depreciation       1080696 1.76Lease Rent, if any       0 0.00Repairs and maintenance:     1821573 2.96Other works overheads     6229977 10.13Total Works Overheads (2 to 9)     89752625 145.94Royalty, if any       0 0.00Technical Assistance/know-how     0 0.00

fee          Research and development     0 0.00

104

Quality control       1447911 2.35Admnistrative and Social     Overheads          a) Salaries and wages     2516189 4.09

b) Others       2876486 4.68c) Total (a+b)       5392675 8.77Total (1+10 to 15)     846285974 1376.07Adjustment for variance (where     0 0.00standard costing system is        

followed)        

PARTICULARS QUANTITY RATE AMOUNT Cost per

      Per unit (MT)   Current

    Unit (Rs.) (Rs.) Year

          2006-07            (Rs.)Add: Opening Stock   5201.032 1165.73 6063017  Less: Closing Stock   10200.560 (1374.31) -14018740  (Naked cement)       Stock adjustment         -1.76

  (MT) 610000.472   838330251 1374.31Less: Credits (from wastage and     0.00 0.00by products)/recoveries, if any        Packing cost Primary (Packed   0.00 0.00

    Cement)      a) Materials (HDPE Bags/Nos) 12187630 5.67 69163688 113.38

b) Others   (Nos) 41523885 68.07c) Total (a+b)       110687573 181.45Cost of production(16 to 20)     949017824 1555.77Finished Goods Purchased,     0 0.00

if any          Add:Opening Stock   6799.200 0.00 9087764 1336.59Less:Closing Stock   5754.000 0.00 8937974 1553.35Stock Transfer   7.000 0.00 10874 1553.43

Finished Stock Adjusted   Total (21+22+23)   611038.672   949156740 1553.35Quantity and cost transferred for:      

i) Captive consumption, if any 18.102 28119 1553.36ii) Packed Quantity for Sale 611020.570 949128621 1553.35iii) Others, (Shortage) 105.600   0 0.00

iv) Total   610914.970   949128621 1553.62Packing cost Secondary       0.00a) Materials       0 0.00

b) Others       0 0.00

c) Total       0 0.00Other Expenses:       Selling and distribution      

105

expensesa) Salaries and wages 610914.970   14281434 23.38b) Frieght and transportation     221960137 363.32 charges          c) Commission to selling       agents }        d) Advertisement expenses }       e) Royalty on sales f) Warranty expenses after adjusting income from chargeble services g) Others h) Total (a to g) Interest charges: (Net)

      0.00   

   

9546935

0.00

   

   

  

15.63610914.970   245788506 402.33

610914.970   -21477113 -35.16

Total cost of sales(excluding 610914.970 1173440014 1920.79

Excise Duty) of packed    

quantity sold (24 to 29)      

Sales Realisation   610914.970 1903772092 3116.26

Less: Excise Duty and others    

statutary dues        

Net Sales Realisation 610914.970 1903772092 3116.26

Margin (32-30)   610914.970 730332078 1195.47

Add: Export benefits and  

incentives, if any      

Total margin (including 610914.970 730332078 1195.47

106

107

 

PROCESS TECHNOLOGY:

 

The Tandur Cement Factory of Cement Corporation of India Limited is a 3000 TPD Dry Process, precalcinator based

plant incorporating some of the modern concepts and equipments, which require minimum energy and ensure

sustained operation. These modern concepts among others include single stage crushing system. Preblending

stockpiles for limestone, shale and coal to smoothen out quality variation, grinding of raw meal and coal by vertical

roller

mill for energy conservation, high degree of environmental control by installing electrostatic precipitators in major

units,

latest pyro-processing technology by use of precalcinator automatic quality and production control of raw meal and

most modern and efficient control and monitoring system adopting data supervisory computers for on line

process programming, data logging and simultaneous display of process flow diagram.

 

2. The raw material i.e. limestone is received from the quarry which is usually less than 1 cubic meter size. It is

crushed

in the single stage impacter to a size of 75mm. It is then preblended in preblending stockpile. The crushed

limestone

along with the additives like laterite etc, is ground to the size 12-14 mm retained on 90 micron sieve, in a vertical

roller mill.

The powdered mill product i.e. raw meal is taken to the continuous blending silo for blending before feeding it to the

preheater precalcinator system. About 80-90% of calcinations is achieved in the preheater precalcinator. The

calcined

(80-90%) material is fed to a coal-fired kiln, where it is burnt upto a temperature of 1350 C and clinker is formed.

The

clinker is passed through a grate cooler where it is cooled upto a temperature of 60 degree centigrade above ambient.

The size of clinker is 85% less than 25mm. The clinker can be stocked in the clinker silo and can be fed to the

cement

mill hoppers for grinding. The clinker is ground along with gypsum (upto 5%) to make Ordinary

Portland Pozzolana cement.

 

The clinker is also ground with Fly Ash (upto 19%) and Gypsum (upto 5%) to make Portland Pozzolana Cement.

The

cement is stocked in the cement silos from where it is transported to the packing plant for packing into the bags.

There

is also provision for bulk loading of cement. The bagged cement is transported by road or by rail.

Manufacturing Process of Cement

Annual turnover and Profit after Tax of the Company for the last three years viz. 2006-07, 2007-

08 and 2008-09 is as detailed below

108

TURNOVER (Rs. Cr.)

PROFIT AFTER TAX (Rs. Cr.)

109

Quality

Special emphasis was laid on quality of cement produced at all the three operating units. In

addition to regular testing of cement samples in CCI’s own well equipped laboratories situated in

each plant, monthly cement samples were tested for complete physical & chemical parameters in

reputed Govt./Private laboratories such as NCB, Hyderabad, NTH, Guwahati.

Main aim of Quality Assurance is to ensure that Quality of Cement dispatched is with Zero

defect Quality and Zero defect weight and above BIS norms so that every bag dispatched will

have quality in appearance of bag, its weight and quality of cement carried. Our focus is not only

on the Quality of Cement dispatched but on the consistency of High Quality Cement dispatched.

A Quality Assurance is the backbone of Quality, for the product manufactured by CCI.

Corporate Governance

110

CCI believes in financial prudence, customers’ satisfaction, transparency, accountability, and

commitment to values. CCI practices based on its stated belief and the guidelines the

Government of India issues from time to time should go a long way to enhancing value for all

those who are associated with the Corporation shareholders, customers, suppliers, creditors,

Government of India, State Governments, Government Agencies / Departments and the society

at large.

BIBLIOGRAPHY:

COST AUDIT REPORT BOOK FOR THE YEAR 2008-09 WEB SEARCH

111