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A PROJECT REPORT ON
FIXED ASSETS MANAGEMENT
AT
SAGAR CEMENTS LIMITED,HYDERABAD
A Project report Submitted in partial fulfillment for the Award
of
MASTER OF BUSINESS ADMINISTRATION
Submitted By
CH.KALYANI
(HT. NO 09M81E0012)
Under The Guidance of
Md.IRFAN(H.O.D)
SANA ENGINEERING COLLEGE
(Affiliated to JNTU Hyderabad and Approved By A.I.C.T.E,
New Delhi)
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NH-9, KODAD, NALGONDA (Dist.)
2009-2011
DECLARATION
This is to certify that the project report title fixed assets management submitted in
partial fulfillment for the award of MBA Program of Department of Business
Management, JNTU, Hyderabad, was carried out by me under guidance of
Md. IRFAN This has not been submitted to any other university of Institution for the
award of any degree or diploma/certificate
Md. IRFAN(H.O.D),
Project Guide,
Faculty of Business Management,
Kodad.
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ACKNOWLEDGEMENT
I express my sincere thanks to the deportment of SAGAR CEMENTS . for
their kindness of allowing me to undertake this project and its employees who lent
their helping hand towards the completion of this project study.
I Express my deep sense of gratitude to the principal Mr. Dr. P.
CHANCHU REDDY and Head of Dept. Mr. Md. IRFAN , a well-wisher of
helped me in every aspect.
I also express my gratitude to my project Guide Md.IRFAN.and other
faculty of SANA ENGINEERING COLLEGE for their guidance throughout the
project.
I express my deep sense of gratitude to Mr.D.V. CHOUDARY
(ACCOUNTS MANAGER of SAGAR CEMENTS LIMITED HYDERABAD-
500-034.
I am greatly indebted to my guide Mr. D. SRAVAN, SAGAR CEMENTS
sparing his valuable time and sharing his fast experience in successful completion
of this project.
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The co-operation I received from the employees of SCCL made it easy to
single out individual for acknowledge. I am also thankful to all the staff members
of SAGER CEMENTS LIMITED .
( CH.KALYANI)
CONTENTS
CHAPTER NO TITLE
CHAPTER -1 INTRODUCTION
Introduction to the study Need and importance for the study Objective,& scope for the study Research methodology Limitations & Source of data
CHAPTER-2
Industry profile Company profile Product profile
CHAPTER-3 REVIEW OF LITERATURE
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CHAPTER-4 ANALYSIS & INTERPRETATIONS
Tabulation Graphs Interpretations
CHAPTER-5 CONCLUSIONS & SUGGSTIONS
CHAPTER-6 BIBLOGRAPHY & BALANCE SHEETS
CHAPTER -I
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INTRODUCTION
INTRODUCTION
General Introduction:-
Finance may be defined as the provision of money at the time
Whne it is required. Finance refers to the management of flews of money
Through an organization It concerns with the application of skills in the
Manipulation, use term and control of money Different authorities have
Interpreted the term finance differently. However there are three main
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Approaches to finance.
The first approach views finance as to providing of funds neededBy a bunnies on most suitable terms this approach confines finance to the raising of
funds and to the study of financial institution & instrumental from where funds can be
Procured
The second approach relates finance to cash
The third approach views finance is being concerned with raising of funds& their effective utilization.
Definition of Financial Management
Financial management as practice by corporate firms can be called
corporation finance or business finance. Financial Management refers to that part
Of the management activity which is concerned with the planning & controlling of
firms financial resources. It deals with finding out various sources for raising funds
For the firm. the sources Must be suitable & economical for the need of the business the most
appropriate use of such funds also forms a part of financial management
Objectives of financial management
financial management is concerned with procurement and use of funds,
Its main aim is touse business funds in such a way that the firms, value /earning are
maximized thereare various alternatives available for using business funds. The pros
& cons of various decisions have to into befor. Making a final selection. Financial
management provides a framework for selecting a proper cause of action and
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deciding a viable commercial strategy the main objective of a business is to
maximize the owner economic welfare.
These objectives can be achieved by
profit maximization and wealth maximization
Management of fixed assets:-
The selection of various fixed assets required creating the desired
production facilities and the decision as regards determination of the level of fixed
assets is primarily the task at the production / technical people. The decision relating
to fixed assets involve huge funds for a long period of time and are generally of
irreversible nature affecting the long term profitability of a concern,
An unsound invest decision may prove to be the very existence of the organization.
Thus management of fixed asset is of vital importance to any organization.
The process of fixed asset management involves
Selection of most worthy projects or alternative of fixed assets
Arranging the requisite funds/ capital for the same
The first important consideration to be acquire only that mouch amount
of fixed assets whichwill be just sufficient to ensure it may be economical to buy
certain assets in a lot size. Another important consideration to be kept in mind is
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possible increase in demand of the firms product necessarily expansion of its
activities Hence a firm should have that much amount of fixed assets which could
adjust to increase demand
The third aspect of fixed assets management is that a firm must ensure buffer
stocks of certain essential equipments/ services to ensure uninterrupted production
in this events of emergencies. Sometime, there may be a breakdown in some
equipments or services affecting the entire production. It is always better to have
some alternative arrangements to deal with such situations. But at the same time the
cost of carrying such buffer stock should also be evaluated. Efforts should also be
made to minimize the level of buffer stock of fixed assets be encouraging their
maximum utilization during learn period, transferring a part of peak period and living
additional capacity
Fixed Assets:-
Fixed assets are those assets which are required and held permanently for a
pretty longtime in the business and are used for the purpos of earning profits. The
successful continuance of the business depends upon the maintenance ofsuch
assets. They are not ment for resale in the ordinary course of business and the utility
of these assets remains so long as they are in working order, so they are also know
as capital assets. Land and Building, Plant and Machinery, Motor vans, Furniture
and fixtures are some examples of these assets.
Financial transactions are recorded in the books keeping in view the going
concern aspect of the business unit. It is assumed that a business unit has a
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reasonable expectation of continuing business at a profit for an indefinite period of
time. It will continue to operate in the future. This assumption provides much of the
justification for recording fixed assets at original cost and depreciating them in a
systematic manner without reference to their current realizable value. It is useless to
show fixed assets in the balance sheet at their estimated realizable values if there is
no immediate expectation of selling them. Fixed resale; so they are shown at thire
book values (i.e,cost less depreciation provided) and not at their current realizable
valuesThe market value of a fixed asset may change with the passage of time, but
for accounting purpose it continues to be shown in the book at its book valu, i.e, the
costatwhich it was purchased minus depreciation provided up to date.
The cost concept of accounting, depreciation calculated on the basis of
historical Cost a of historical costs of old assets is usually lower than that of those
calculated atcurrent value or replacement valu. This results in more profits on paper
which, if distributed in full, will lead to reduction of capital.
Need For Valuation Of Fixed Assets:-
Valuation of fixed assets is important in order to have fair measure of profit or
loss and financial position of the concern. Fixed assets are meant for use for many
years. The value of these assets decreases with their use or with time or for other
reasons. A portion of fixed assets reduced use is converted into cash though
charging depreciation. For correct measurement of income properMeasurement of depreciation is
essential, as depreciation constitutes a part of the total cost of production.
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Need of the Study
Fixed Assets plays very important role in realizing companies objectives the
Firms to which capital investment invested on fixed asset. This fixed assets total
Owner funds and long term liquidable are invested are a period of time the total
Owner funds and long term liabilities are invested in fixed assets since fixed
Asset playing dominant role in total business the firms has realized the effective
Utilization of fixed assets. So ratio contributes very much in analysis of and evaluating
The performance of fixed assets long term sustainability of the firms which may effect
Liquidity, solvency and profitability positions of the company the idle fixed assets
leads a tremendous financial cost and intangible costs associate to it. So there is
need for the companies to evaluate fixed assets performance analysis time to time
by comparing with previous performance, comparison with similar company and
comparison with industry standards so I choose a study to conduct the fixed assets
analysis for SCCL corporate using rations in comparison with periods year
performance The title of the project is analysis of FIXED ASSET MANAGEMENT.
Importance:
Fixed asset are the assets which cannot be liquidated in to cash within
one year The large amounts of funds of the company are invested in their assets.
Every year the company invests an additional fund in their assets directly or
indirectly. The survival and other objectives of the company purely depends onoperating performance of management in effective utilization of there
assets.
Firm has evaluate the performance of fixed assets with proportion of
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capital employee net assets, turnover, and other pan parameter which is
helpful for evaluating the performance of fixed assets.
Scope:
The project is covered Fixed Assets of SCCL drawn from AnnualReports of the company.
The fixed asset confidence in the project is which cannot be convertedinto cash within one year.
Ration Analysis is used for evaluating Fixed Assets performance ofSCCL.
The subject matter is limited to fixed asset its analysis and its rformance but not
any other areas of accounting corporate, marketing financial matters.
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Objectives of the Study:
The study is conducted to evaluate fixed assets performance of SCCL.
The study is conducted to evaluate the fixed assets turnover of SCCL.
The study to known the amount of capital expenditure made by the companyduring study period.
The study is conducted to evaluate deprecation and method ofdepreciation adopted by SCCL.
The study is conducted to known the amount of finance made by long-termliabilities to owner funds towards fixed assets.
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Study is conducted to evaluate that if fixed assets are liquidated, what is theproportion of fixed asset amount will contribute for proportion of owner and
long term liabilities.
The study to evaluate is giving eduquitent return to the company
REASEARCH METHODOLOGY:
The data used for analysis and interpretation from annual reports of
the company i.e, secondary data sources ratios analysis is used for calculation
purpose.
The project is presented by labels graphs and with their interpretation.
No summary is undertacken, or observation study is conucted in evaluating fixed
asset performance of SCCL
Sources of data:
The data gathering method is adopted purely from secondary
sources. The theoretical content is gathered from eminent texts book and
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reference.
The financial data and information is gathered from annual report of
Company internal records.
Interpretation, conclusion & suggestion and purely based on my opinion and
Suggestion provided by the project Guide.
Management of fixed Assets:
The selection of various fixed assets required to create the desired
production facilities and the decision asregards determination of the level of
fixed assets is primarily the task of the production /technical people. The
decision relating to fixed assets involve hug fund for long period of time and is
generally of irresistible nature affecting thelong term profitability of a concern
an unbound investment decision may pure to be fatal to the very existence of
the organization. Thus management of fixed asset is of vital important to any
organization.
Selection of most worthy projects or alternatives of fixed assets.
Arranging the requisite funds/capital for the same.The first important consideration to acquire only that much
amount of fixed assets which will be just sufficient to ensure smooth and
efficient running of the business in some cased it may be economical to buy
certain assets in a lot size. Another important consideration to be keptin mind
is possible increase in demand of the firms product necessity expansion of its
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activities. Hence, a firm should home that much amount of fixed assets which
could adjust to increase demand.
The third aspect of fixed assets management is that a firm most
income better stock of certain assets equipments/ service to incomes
uninterrupted production in the exerts of emergencies. Sometime.there many
be a breakdown in some equipments as services affecting the entire
production. It is always better to have some alternative arrangements to deal
with such situation. But at the same time thee cost of carrying such buffer
stock should also be evaluated. Effects should also be made to minimize the
land of buffer stock of fixed assets be encouraging their maximum attestation
during lean period transferring apart of peck period and hiring additional
capacity.
Limitations of the study
The study periods of 45 days as prescribed by Osmania University.
The study is limited up to the data and information provided by SCCL
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and its annual reports.
This report will not provide exact fixedasset status and position in
SCCL it may varying from time to time to time and situation to
situation.
This report is not helpful in investing in SCCL either throughdisinvestments or capital management
The Accounting procedures and other accounting principles arelimited by the company changes in them may very the fixed assets
performance.
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CHAPTER -II
INDUSTRY
PROFILE
AND
COMPNAY
PROFILE
&
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PRODUCT PROFILE
INDUSTRY PROFILE
INTRODUCTION
Cement is a key infrastructure industry. It has been decontrolled from price
and distribution on 1st
march, 1989 and de-licensed 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 ofSecretary (Coordination). Its performance is also reviewed by the cabinet
committee on Infrastructure.
CEMENT INDUSTRY HISTORICAL PERSPECTIVE:
Cement is like steel, one of the basic materials for the technical development
of the country. Cement, as a building material has been known in one form or
another since the time of ancient Sindh Civilization at Mohenjadaro in India.Though it has a long, history of its manufacturing is relatively of recent origin.
Cement industry is one of the major and oldest established manufacturing
industries in the modern sector of the Indian economy. It is an indigenous industry
in which the company is well endowed with all the necessary raw materials, skilled
manpower, equipments, and a machinery technology. It produces a commodity that
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enters into various constructions, investment, and welfare activities in almost every
segment of the economy. Cement is required by firms, bridges, buildings, water
supply projects, dams, roads, hydroelectric power projects, seaports, airports, and
irrigation schemes. Thus, this industry plays a crucial part in the economic
development of the country. Thus, it regards, as major nation building industrywhose importance in a developing economy can never be over century was scantly.
Egyptians are known as the first users of cement. The Greek civilization used some
of mortar but Romans has developed it.
When one speaks about the cement industry, it invariably refers to Portland
cement, which has its origin in England, but until the 19th
century, a mixture of
limestone with pozzoland of volcanic earth was known as cement. The first
cement factory was established around 1890 in both Canada and Australia, while itwas invented din 1884 in New Zealand. The cement industry occupies a position of
predominance not only in an infrastructure for development but also it is eight
largest in the world, which directly employs about millions of persons.
CEMENT INDUSTRY IN INDIA:
In India, it came to be established during the beginning of 20th
century. In
fact, the cement era in India commenced with the establishment of a small cement
factory at WASHERMANPET in 1904 by South India Industry Ltd. a companythat dates to 1879. The potential capacity of this plant was only 10,000 metric
tones per annum. This was the first attempt of manufacturing Portland cement with
cat carious seashells as a principal raw material. There was sufficient demand for
that product, but because of technological defects and inadequate supply of raw
materials, the plant did not operate economically, a later on collapsed. India is
ranked in the world after China, Japan, and USA in cement production. Yet the
per-capital consumption of cement in India however low at 70 to 80 kgs against the
world average of around 220 kgs.Cement industry in India is eight decades old. However, the growth has not
kept pace with period of its existence. Decades of the government control have
restricted the growth of the industry. The real foundation stone of the present
industry was laid in the year 1942, when a small factory was established at
Porbandar in Kaythiwar in India Cement Limited. This factory commenced its
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production in 1914 at the rate of 199 metric tones per day. This company adopted
dry process. This plant had easy access of more factories. One at Kanthi (MP)
another at Lakhier (Rajasthan) Kanthi Cement Limited and Bundi Portland Cement
Limited respectively in January 1915 and December 1916. The advent of the First
World War gave fill up to this industry and the output of the plants was undergovernment control. The government control was lifted immediately after the
world war and the boom period of the industry started. The demand for cement
increased very steadily as the cement was used not only for housing but also for
dams, roads, bridges and other developed activities.
The analysis of the data concerning cement dispatch showed that the demand
for cement rising particularly in the northern states, ASS, L&T, Grasim, Kesoram,
Century, Euka and many others who have plants in Northern States had reported
increase in capacity utilization. As selling prices remained low and the output has
not risen up to the desired rte. There was unsatisfied demand for the materials. On
February 28 1982 when government of India announced the decontrol of cement, it
made. Beginning of new era for the cement industry. In March 1989, the
government withdrew all restrictions on distribution and pricing. Because of this
with in a decade nearly 34 million tones was added. The production control
disappeared completely in 1991 with de-licensing. Dependence on imported
cement was stopped after 1986-87.
The demand for cement would go up significantly with the acceleration in the
economic growth. Cement industry would likely to grow at the rate of 8 to 10
percent annually to satisfy the increasing needs of domestic demand as well as
growing export market. The industry has a turnover of around Rs. 19,500 crores
and accounts for direct and indirect employment of 110 million persons. Private
Sectors contribute over 85 percent of cement output in the country. India has 165
large cement plants and more than 315 mini cement plants. Cement industry has
made a tremendous progress in both capacity and production. There is a slowdown
in infrastructure and real estate projects. Hence, cement market is depressed since
growth of the economy is leasing to investments in infrastructure and housing
sector and as the cement industrys growth is seen to and liked with the growth of
the economy. Cement companies are planning, expansion, integration, and
diversification.
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A new impetus to the cement industry was provided during the post independence
period through setting up of targets for cement production less than five-year plans.
CEMENT INDUSTRY IN ANDHRA PRADESH:
Cement was first manufactured in America in the year 1875. In India, in
1914 the India Cements Company Limited was established a cement factory at
Portland. Andhra Pradesh is the second largest cement production state in India,
one third of the limestone is available in A.P.I.A.P. the cement production was
started in 1936 with two factories. Of these two factories, one is Andhra Cement
Company Limited and another in Krishna Cement Factory. One is on the side of
Krishna River and another is in between Krishna and Guntur districts respectively.
In 1985, one more factory was established at Panyam in Kurnool Dist., named as
Panyam Cement and mineral industries. At the same time, one more factory hasbeen established at Maacherla in Guntur District. At the end of the July 1985, the
total capital invested in cement industry was Rs. 427.81 lakhs and provided
employment for 1262 persons and 19 factories were functioning with a production
of 85 lakhs tones.
Today there are 18 large-scale cement plants and 18 mini cement plants in
the state, with the total capacity of 1.8 crores tones per annum and it is expected to
rise to 2.15 crores tones per annum in the year 1989-90. Our state consumes 217
lakhs of cement per annum. The remaining production is distributed to other states.
Power cut is the main reason for low production in Andhra Pradesh. During to their
heavy coal prices, railway freight, etc., it is very difficult to service the cement
industry in Andhra Pradesh. Today, Portland cement is an essential commodity on
which our modern standard of living is greatly dependent. Buildings, water supply
projects, dams, bridges, roads, hydroelectric power projects, seaports, airports,
irrigation schemes, etc., are the demand for the cement.
Cement is manufactured by either wet process or Dry Process. Wetprocess is remained popular for many years. With the modern development of the
technique of dry missing of powered materials using compressed air, the dry
process gained momentum. Now a day in most of the plants cement is being
manufactured by dry process. The basic raw material for manufacturing cement is
limestone is ensured.
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The same is passed through crushes to bring it to required size. The raw materials
consist of limestone, iron ore, and bauxite or literate, in the correct proportions are
fed into a grinding mill where they are reduced to a very fine of compressed air.
The power from the storage ribs is fed into rotary kiln; the material is subjected to
a temperature of about 1500C. Chemical reaction takes place between the variousmaterials resulted in the formation of cement compounds like tri calcium silicate
(24%), di calcium silicate (20%), tri calcium aluminate (7-10%), and tetra calcium
alumino ferrite (10-12%).
CAPACITY AND PRODUCTION:
The cement industry comprises of 125 large cement plants with an installed
capacity of 148.28 million tones and more than 300 mini cement plants with an
estimate capacity of 11.10 million tones per annum. The cement corporation ofIndia, which is a Central Public Sector Undertaking, has 10 units. There are 10
large cement plants owned by various State Governments. The total installed
capacity in the country as a whole is 159.38 million tones as against a production
of 106.9 million tones in 2001-02, registering a growth rate of 8.84%. Keeping in
view the trend of the growth of the industry in previous years, a production target
of 126 million tones has been fixed for the year 2003-04. During the period April-
June 2003, a production was 31.30 million tones. The industry has achieved a
growth rate of 4.86 percent during this period.
EXPORTS:
Apart from meeting the entire domestic demand, the industry is also
exporting cement and clinker. The export of cement during 2001-02 and 2003-04
was 5.14 and 6.92 million tones respectively. Export during April-May 2003
ws1.35 million tones. Major exporters were Gujarat Ambuja Cements Ltd., and
L&T Ltd.
RECOMMENDATIONS ON CEMENT INDUSTRY:
For the development of the cement industry working group on cement
industry was constituted by the planning commission for the formulation of X
five-year plan. The working groups has projected a growth rate of 10% for the
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cement industry during the plan period and has projected creation of additional
capacity of 40-62 million tones mainly through expansion of existing plants. The
working group has identified following areas for improving demand for cement:
Further push to housing development programs.Promotion of concrete highways and roads
Use of ready-mix concrete in large infrastructure projects.
Further, in order to improve global competitiveness of the Indian Cements
Industry, the department of industrial policy and promotion commissioned a study
on the global competitiveness of the Indian Industry through an organization of
international repute, viz KPMG Consultancy Pvt.., The report submitted by the
organization has made several recommendations for making the Indian CementIndustry more competitive in the international market. The recommendation is
under consideration.
TECHNOLOGICAL CHANGE:
Cement industry has made tremendous strides in technological up gradation
and assimilation of latest technology. At present 93% of the total capacity in the
industry based on modern and environment friendly dry process technology and
only 7% of the capacity is based on old wet and semi-dry process technology.
There is tremendous scope for waste heat recovery in cement plants and thereby
reduction in emission level. One project for co-generation of power utilizing waste
heat in an Indian cement plant is being implemented with Japanese assistance
under Green Aid Plan. The induction of advanced technology has helped the
industry immensely to conserve energy and fuel to save materials substantially.
India is also producing different varieties of cement like Ordinary Portland Cement
(OPC), Portland Pozzoland Cement (PPC), Portland Burst Furnace Slag Cement
(PBFS), Oil Well Cement, Rapid Hardening Portland Cement, Sulphate Resisting
Portland Cement, White Cement etc. Production of these varieties of cement
confirms to the BIS specifications. It is worth mentioning that some cement plants
have set up dedicated jetties for promoting bulk transportation and export.
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COMPNAY PROFILE
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COMPNAY PROFILE
PROFILE OF SAGAR CEMENTS LIMITED
Sagar Cements Limited (SCL) is a Company of 25 Years standing, engaged in manufacture if
Cement at its Plant in Mattampally, Nalgonda District, Andhra Pradesh.The Company which that
started its operation with a Cement capacity of 66000 TPA, has gradually increased it to the level
of 297000 TPA, while its Clinker capacity has also witnessed a significant increase from 66000
TPA in 1982 to present level of 600000 TPA. Sagar Cements Limited is undertaking a major
expansion, the completion of which will see its Cement Capacity reaching a level of 2.50 Million
TPA and Clinker 2.00 Million TPA.
The Company manufactures various varieties of cement like Ordinary Portland Cement (OPC) of
53 grade, 43 grade, Portland Pozzalona Cement (PPC) and Sulphate Resistant Cement (SRC) to
suit different needs of customers and all these products are being sold under the brand name
SAGAR, which having already become popular in Andhra Pradesh, has now found its
acceptance among the customers in the neighboring States as well. The Company has a strong
committed marketing network comprising various layers like Distributors, Dealers, C&F Agents,
all of whom are served by dedicated marketing personnel.
SAGAR GROUP
A GROUP Profile
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Sagar Group, a reputed industrial house in Andhra Pradesh, is a 25 year old
enterprise, which has its interests in Cement and Power generation and a group
turnover of Rs.1300 millions.
Shri. S. Veera Reddy, a well known industrialist hailing from Nalgonda
District in A.P., along with his friends and associates, promoted the Sagar Cements
Limited (SCL), the flagship company of the Group, in 1981. This Company
established a Cement plant at Mattampally in Nalgonda district as an assisted unit
under the auspices of A.P. Industrial Development Corporation. SCL has
chequiered history of growth and, but for a brief interval of a few years, has paid
dividend consistently at reasonable levels.
In the year 1994, Sagar Power Ltd., (SPL) was promoted by SCL along with
Shri S. Veera Reddy and his relatives as co-promoters. SPL having successfully
implemented hydel projects in A.P. part of this plan, it is presently implementing.
For fully appreciating the other aspects of this Group, company wise profile
of the group is given below:s
SAGAR CEMENTS LIMITED :
HISTORY
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commenced its commercial production on 26th January 1985 with as annual
capacity of 5,60,000 tonnes and 66,000 tonnes of clinker and cement
respectively. The Sagar Cements Limited is engaged in the manufacture of
cement at its plant in Mattampally in Nalgonda district. This Plant cement
capacity has since been increased to 1,98,000 tonnes per annum.
The company is managed by a Board of Directors, headed by Shri
O.Swaminatha Reddy, Chartered Accountant, Ex-Chairman of Andhra Bank
Limited and APSFC Limited and a well known Management Consultant from
Hyderabad.
The Board includes Shri. k. Thanu Pillai, Ex-Managing Director of State Bank
of Hyderabad and Shri S. Ramana, a Nominee director of APIDC.
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Shri S. Veera Reddys sons, Dr.S.Anand Reddy, a medical graduate and Shri S.
Sreekanth Reddy, a Cement Technologist and Industrial Engineer are the bord
of directors.
Vision and mission statement
Vision
To provide foundations for society 's future
Mission
To be the India's most respected and attractive company in our industry -
creating value for all our stakeholders.LOCATION :s
SCL's plant is located at Mattampally, Mattampally Mandal, Nalgonda District,
within 35 KM from the National Highway No.9 connecting Vijayawada -
Hyderabad.
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PRODUCTION PROFILE
PRODUCTION PROFILE
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PRODUCTION CAPACITY:
The Plant commenced its operations with an initial installed capacity of 66,000
tons of OPC per year and gradually expanded its capacity to 20,00,000 Mt Clinker
per annum. The clinker capacity has also similarly gone up from 66,000 tpa in
1985 to 5,60,000 tpa in 2003.
TECHNOLOGY :
SCL's Plant is one of the most successful mini cement units in Andhra Pradesh. Scl
plant is based on Dry Process Rotary Kiln Technology with 6 suit pre-heater and
(RABH) reveres air bag house system for control poulation widely used all overthe world. the Plant has adopted most modern technology in terms of cooler and
material handling and installed Bucket Elevators and IKN Kids Cooler imported
from Germany. Further, a OSEPA Separator is used for maintaining uniform
quality of cement.
INSTITUTIONAL SUPPORT :
The company enjoys a very high credibility with All India Financial Institutions
and Banks in view of its track record in repaying the term loans in time.
PRODUCT RANGE:
The company is marketing its product in the brand name of 'SAGAR PRIYA'
which is well known in Andhra Pradesh for the last 16 years and its range of
products i.e., (1) 43 Grade Ordinary Portland Cement (OPC), (2) 53 Grade
OPC, (3) Sulphate Resistant Cement (SRC), (4) Special Grade OPC used for
Railway Sleepers, and (5) Portland Blast Furnance Slag Cement (PBFSC).
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Further, the Company is also marketing its product in the States of Tamilanady
and Orissa.
The Company's customers, apart from Builders and Dealers, include well
known organizations like Mazgaon Dock, Mumbai, Rain Clacining, Larsen &
Toubro, Nagarjuna Fertilizers and Chemicals Limited, Hyderabad Industries
Limited.
Other highlights of the Plant:
The plant consumers about 92 units per ton of Cement, which is considered to be
lowest among mini cement plants and comparable with major cement plants.
The capacity utilisation is 122 percent in terms of clinker.
The company has been able to reduce the cost of production considerably by
installing latest equipments and power saving devices.
The unit is supported by 2 DG sets to cover 75 percent of the power requirement in
addition to the power received from Sagar Power Limited.
The unit produces 43 grade, 53 grade and Sulphate Resistant Cement to the
requirement of customers.
The cement is sold on "SAGAR" brand, which is known in the market.
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PROCESS OF CEMENT MANUFACTURINGAT SAGAR
CEMENTS LIMITED
LIMESTONE CRUSHING:
The purpose of limestone crushing is size reduction i.e. from 1000mm to below
90mm.
The larger size material received from mines through dumpers is discharged into
hopper and fed in regulated quantity to the crusher. The discharge material from
crusher is below 90mm size and is transported to stockyard through belt conveyor.
STACKER & RECLIMER:
Limestone stacking in the yard is by means of stacker Re-claimer. Sagar Cements
is having stacker re-claimer. Unique character with the stacker Re-claimer is
stacking different grades of limestone and additives uniformly.
Limestone extracted from stockpile by means of Reclaimed will have very
consistency in quality of raw meal, which will be further reduced to minimum
level by blending in raw meal silos. Clinker produced with such raw meal will
consistent quality.
VERTICAL ROLLER MILL:
The main function is to reduce 90mm size limestone to powder of --212 microns
size.
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90mm size material from closed hoppers is extracted in precise and regulated
quantities with the help of Weigh feeders. In side the mill the raw materials are
ground to powder from the support of rollers. Hot gasses are extracted from the
pre-heater. The powdered material is lifted to the storage silo with help of bucket
elevator.
COAL MILLS:The main function is to powder the Raw coal. The coal extracted from the
storage shed is feed to mill through Weigh feeders. Hot air required for drying
process is extracted from Pre-heater gases with the help of mill fan. The raw coal is
ground to powder from in the mill, and lifted by the hot gases traveling through the
mill. The ground coal is fed to the storage bins and pumped in to kiln & calciner
through the Solid flow feeders.
KILN:
The main function is production of clinker from raw meal by controlled
burning.Raw meal powder is extracted from the storage silo and transported silo and
transported to closed kiln feed bins with the help of bucket elevators. From the
bins, precise and regulated quantities are extracted and transported to the top of the
pre-heater. Big fans are used to draw air from cooler through the kiln & pre-heater.
This air is help in to burn coal and to convey the material from preheater top is
slowly traveled through the cyclones to kiln. In the process the raw material is
heated by the heat absorbed from the hot gases and attains required temperature
and finally the powder is converted to ball like material called clinker in the
burning zone and discharged to the cooler from the kiln outlet. In the cooler the hot
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clinker is cooled by cold air being pumped with the help of fans. The cooled
clinker is transported to a closed clinker storage shed.
CEMENT MILL:
The main function is grinding the clinker in to fine powder which is cement.
The clinker is extracted from storage shed and fed to the feed bins. From the
bins the clinker fed to the mill along with 4 to 5% Gypsum and ground to the
required fineness. This fine material is transported to storage silos by means of
bucket elevator.
PACKING HOUSE:
The main function is to fill the bags with exact 50kgs. Quantity of cement
and loading to the trucks.
The cement is extracted from the cement silos and filled the packing
machine bin. Bags are filled with 50 kgs, by the automatic packing machine. The
filled bags are transported by the belt conveyor and loaded in to trucks.
QUALITY CONTROLLING:
All raw materials chemical analysis is carried out before taking them in to
process. Raw material mix ratios pre-defined with preparing raw mix design. Raw
materials is ground from 50mm to 212 microns in the vertical roller mill. The
output of the mill is called raw meal. Raw meal chemical analysis will carried out
by using XRF at every hour. These analysis values are fed to QCX soft ware,
which is supplied by FLS. Based on the meal analysis QCX will make necessary
corrections in raw material ratios if required.
Clinker chemical analysis is carried out by XRF at every two hours. Based
on chemical analysis values, fine coal ash required % will be decided.sCement
fineness will be analyzed at every hour by using air permeability method necessary
steps will be taken accordingly.
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Day average composite clinker sample is ground in pilot ball mill by adding
around 4 % Gypsum. These sample will be used to test cement mortar cubes to
know the compressive strength of such sample. Cement mortar cubes of day
average composite cement sample for grinding and packing also tested to know the
compressive strength of cement. Apart from the above tests Le-Chatlier and Auto
Clave tests will be carried out to determine the soundness in the cement at every
day. Initial and Final setting times are carried out for all the day average composite
cement samples.
All the sample receiving and preparation of test samples for chemical analysis and
sending the sample for XRF is done by ROBO Technology supplied FLS
Automation, DENMARK. In normal course sample are collected manually form
different locations. Where as in Sagar Cement FLS Automations system makes it
possible to collect Samples from Cement mill & Raw meal and conveys to the
ROBOT by Pneumatic system from the field.
Chemical analysis by wet method takes around 6 hours, whereas the XRF
takes only one minute. So that no of testings are increased, so that better and
consistent quality product are produced.
The Specialty of SAGAR cement is that the XRD equipment enables to
Check the Phase compos situation of the Clinker, which gives early insight of
clinker quality.
TOP LEVEL MANAGEMENT :
Chairman - Sri. O. SwaminathaReddy
Managing Director - Sri S. Veera Reddy
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Director - Sri K. Thnu Pillai
JMD - Dr. S. Anand Reddy
ED - Sri S. Srikanth Reddy
Secretary - Sri R. Soundararajan
Sr. vice President (works)- Sri N. Krishna Reddy
ORGANIZATION CHART
CHAIRMAN
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MD
DIRECTORS
Production Accounts Testing Sales
Department Department Department Department
Production Chief Accounts Lab Sales
Manager Manager Technicians Manager
Supervisor Accountant Sales Supervisors
Clerk
LEADER IN SPECIAL CEMENTS :
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Ordinary Portland Cements
(OPC-Grade 43 & Grade 53)
Sulphate Resident Cement
Special Grade Ordinary Portland Cement
Special Grade Slage Cement
Special Cements
ORGANISATION PROFILE
A GROUP PROFILE
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SAGAR CEMENTS LIMITED a reputed industrial house in Andhra Pradesh
is a 25 year old nterprise , which has its interests in cement and power generation
and a group turnover of RS 1300 millions
As a part of Governments drive to encourage power generation in the
private Sector to minimize the dependence on state grid, Sagar Cements Limited
(SCL) which is already a success story in the Mini Cement industry, obtained
license for implementing two hydel power projects in A.P and later promoted
Sagar Power Limited (SPL)to implement them
The company has a Grinding Unit Bayyavaram, produces cement by
grinding the surplus clinker made available from the companys main cement
manufacturing facility at Mattampally. AS the operating results of this grinding
unit has not been encouraging the Company under took comprehensive review of
its operations and found the increasing input Costs and financial charges as major
reasons for this state of affair
The company has adopted the dry process rotary kiln technology as its
Mattampally plant for manufacture of clinker. With the adoption of latest
technologies like O-sepa separator for cement mill, Rotary packing systems, IKN
kids cooler for cooling sections and the new six stage pre heating systems this
plant is considered to be the most modern plant among mini cement plants in A.P.
The company has also installed a stacker-reclaimed for ensuring high quality
PERFORMANCE
The clinker production at the Mattampally unit during the year under review
stands at 4, 34,000 MTS showing an increase of 40.52% aganist the previous
year production of 3, 08, 850MTS
The Mattampally unit had produced 2, 45, 000 MTS and sold 2, 47,656
MTs of Cement during the year under review, registering an increase of 19.11%
and 22.21%respectively over the previous year This Unit earned a net profit of RS
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275.39 lakhs during the year under review as compared to the previous year net
loss of RS349.14 lakhs, it because of increase in sales realization and cost
reduction achieved in terms of power consumption this unit continues to be highly
cost effective among the mini cement units.
The production and a sale of slag cement at in bayyavaram had also shown
a marginal Increase of 2.62% and 5.20% 1,1and 1,10,004 MTS and1,11,491
MTS respectively over The previous year. Despite this increased production and
sale this unit had incurred a net loss of RS235.95 lakhs due to high cost of inputs
and financial charges. The directors do not for see Any improvement in the
operations
SUBSIDIARY COMPANY
Sagar Power Limited (SPL), SPLs subsidiary that has two mini hydel power
units in Andhra Pradesh, is regularly power to your company statement pursuant to
section 212 of the companies act, 1956 in respect of this subsidiary has been
separately given in this report and accounts have also been annexed FUTURE
OUTLOOK
Sagar Cement Limited continuous thrusts on costs reduction through
modernization of equipment has in as one ofthe most cost effective unites in the
industry, Your Mattampally plant continues to achieve higher capacity utilization
and is becoming more cost effective in terms of power and coal consumption. The
directors had mentioned in their previos report, the company has installed at
mattampally unit, a new six stage pre-heater and increased the cooler capacity to
increase the clinker production capacity to 1500 tonnes per day. Future the
company has also installed stacker reclaimed along with other equipment such as
impact crusher for limestone, new kiln feed system and electronic packing machine
to improve the quqlity and to further reduce the power and coal consumption.
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However the operation of this companys slag grinding unit at
Bayyavaram, thought to be cost effective because of the imported VRM
technology have turned to be otherwise, because of increasing clinker
transportation cost and financial charges. The board decided to sell, lease or other
wise dispose of this unit so that further strain on the overall profitability of your
company could be avoided After selling this unit, your directors propose to make
alternative arrangements to grind the surplus clinker in the vicinity of your plant at
mattampally itself.
During the year under review, the price of cementwashighly volatile
Though it has resulted in temporary setback in the financial results of your
company, yet the broad outlook appears to be promising one, with the industry
getting more and more consolidated due to mergers and alliances The company has
already become cost effective and the performance would improve with
stabilization on the price front. With the proposed sale of the Grinding unit
Bayyavaram materializing, strain on the overall profitability of company would
also get substantially reduced.
INTERNAL CONTROL SYSTEMS
The company has adequate internal control system in all areas of its cement plant
at Mattampally and the grinding unit at Bayyavaram and the branch at
Vishakapatnam. All these are properly linked to the administrative office at
Hyderabad to ensure up to date information to the management.
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CHAPTER III
REVIEW OF LITERATURE
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Fixed Asset
A long-term tangible piece of property that a firm owns and uses in the production of its
income and is not expected to be consumed or converted into cash any sooner than at
least one year's time.
Notes: Buildings, real estate, equipment and furniture are good examples of fixed assets.
Fixed assets are sometimes collectively referred to as 'plant'.
Generally intangible long-term assets, such as trademarks and patents, are not categorized
as fixed assets but more specifically referred to; as "fixed intangible assets'. Long-lived
property owned by a firm that is used by a firm in the production of its income. Tangible
fixed assets include real estate, plant, and equipment. Intangible fixed assets include
patents, trademarks, and customer recognition.
Fixed asset
An asset not readily convertible to cash that is used in the normal course of business.
Examples of fixed, assets include machinery, buildings, and fixtures. A firm whose total
assets are made up primarily of fixed assets is in a less liquid financial position, thus
entailing greater risk of a big tumble in profits if its revenues fall.
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Fixed assets management
Jump to: navigation. Search Fixed assets management is an accounting process that seeksto track fixed assets for the purposes of financial accounting, preventive maintenance,
and theft deterrenceA typical asset tag Many organizations face a significant challenge to
track the location, quantity, condition, and maintenance and depreciation status of their
fixed assets. A popular approach totracking fixed assets utilizes serial numbered Asset
Tags, often with bar codes for easy and accurate reading. Periodically, the owner of the
assets can take inventory with a mobile barcode reader and then produce a report. Off-
the- shelf softwarepackages for fixed asset management are marketed to businesses small
and large. Some Enterprise Resource Planning systems are available with fixed assets
modules.
Some tracking methods automate the process, such as by using fixed scanners to
read bar codes on railway freight cars or by attaching a ratio-frequency
identification (RFID) tag to an asset.
Fixed assets management is an accounting process that seeks to track
fixed assets for the purposes of financial accounting, preventive maintenance and
theft deterrence.
Many organization face a significant challenge to track the location quantity
condition maintenance and depreciation status of their fixed assets Apopular
approach to tracking fixed assets utilizes serial numbered asset tags often with bar
codes for easy and accurate reading periodically the owner of the asset can take
inventory with a mobile barcode reader and then produce a report.
Off-the shelf software packages for fixed asset management are marketed to
businesses small and large some enterprise resource planning systems are available
with fixed assets modules.
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Some tracking method automate the process such as by using fixed scanners to
read bar codes on railway freight cars or by attaching a ratio-frequency
identification(RFID) tag to an asset.
Fixed asset management services
When it comes to verifying your fixed asset information what are your
choice Few organization have the internal resources available to properly assess
fixed asset inventory- especially when may be years of questionable data to
reconcile there are software-based fixed asset management solution out there
designed to improve data quality but none offers the validation of a physical
inventory and there are firm who offer statistically sampled inventory services but
the results are estimates at best.
We assist many corporate in managing and reconciling their fixed asset database
we undertake complete physical verification and affix bar coded tags on each type
of assets available thereafter the next time the activity is capable of being done by
hand held barcode scanners which is extremely accurate and efficient on carrying
out a reconciliation of the physical vis a vis accounting records we provide a
location- wise or asset wise variance report. Our activities are broadly as
mentioned under.
Preparation and maintenance of fixed asset register.
Running depreciation calculation as per statutory laws and US GAAP
Monthly capitalization and inventory reconciliation
Physical verification including a fixed of tags
Usng barcode technology for identification of assets.
Fixed Asset Tracking Software
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Tracking assets is an important concern of every company, regardless ofsize Fixed assets
are defined as any 'permanent' object that a business uses internally including but not
limited to computers, tools, software, or office equipment. While employees may utilize a
specific tool ortools, the asset ultimately belongs to the company and guest be returned.And therefore without an accurate method of keeping track of these assets it would be
very easy for a company to lose control of them. With advancements in technology, asset
tracking software is now available that will help any size business track valuable assets
such as equipment and supplies. According to a study issued in December, 2005 by the
ARC Advisory Group, the worldwide market forEnterprise Asset Management (EAM)
was then at an estimated $2.2billion and was expected to grow at about 5.0 percent per
year reaching $2.8billion in 2010. Asset tracking software allows companies to track what
assets it owns, where each is located, who has it, when it was checked out, when it is due for
return, when it is scheduled for maintenance, and the cost and depreciation of each asset.
The reporting option that isbuilt into most asset tracking solutions providespre-built reports,
including assetsby category and department, check-in, check-out, net bookvalue of assets,
assets past due, audit history, and transactions. All of this information is captured in one
program and can be used on PCs as well as mobile devices. As a result, companies reduce
expenses through loss prevention and improved equipment maintenance. They Fixed AssetTracking Software
Tracking assets is an important concern of every company, regardless of size. Fixed assets
are defined as any 'permanent' object that a business uses internally including but not limited
to computers, tools, software, or office equipment. While employees may utilize a specific
tool or tools, the asset ultimately belongs to the company and must be returned. And
therefore without an accurate method of keeping trackof these assets it would be very easyfora company to lose control of them.
With advancements in technology, asset tracking software is now available that will help any
size business track valuable assets such as equipment and supplies. According to a study
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issued in December, 2005 by the ARC Advisory Group, the worldwide market forEnterprise
Asset Management (EAM) was then at an estimated $2.2 billion and was expected to grow at
about 5.0 percent per year reaching $2.8billion in 2010.
Asset tracking software 'allows companies to track what assets it owns, where each is
located, who has it, when it was checked out, when it is due for return, when it is
scheduled for maintenance, and the cost and depreciation of each asset.
The reporting option that is built into most asset tracking solutions provides pre-built
reports, including assets by category and department, check-in/check-out, net book value
of assets, assets past due, audit history, and transactions.
All of this information is captured in one program and can be used on PCs as well as
mobile devices. As a result, companies reduce expenses through loss prevention and
improved equipment maintenance. They reduce new and unnecessary equipment
purchases, and they can more accurately calculate taxes based on depreciation schedules.
The most commonly tracked assets are: Office Equipment Evidence Medical Equipment IT Equipment, for example laptops. Vehicles Files Maintenance supplies Educational materials Software licenses Videos Tools
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RATIOANALYSIS
Ratio analysis is a powerful tool of financial analysis. A ratio is defined as "The
Indicated quotient of two mathematical expression" and as "The relationship between for
evaluating the financial position and performance of firm". The absolute accounting
figure reported in financial statement do not private of a firm. An accounting figure
when it is related to some other relevant information.
Ratio help to summarize large quantities of financial data and to make qualitative
judgment about he firm's financial performance.
FIXEDASSETSTONET WORTH RATIO:
This is ratio establishes the relationship between fixed assets and net worth.
Net worth =share capital+Reserves & Surplus
This ratio of "Fixed Assets" to " Net worth" indicates the exte3nt to which share
holder funds are sunk into the fixed assets. Generally, the purchase of fixed assets should be
financed by share holders, equity in lading reserves and surplus and retained earnings. If the ratio
is less than 100% it impels than owners funds are more than total fixed assets and a part ofthe
working capital is provided by the shareholders. When the ratio is more than 100% it implies that
owner's funds are not sufficient to finance the fixed assets and the finance has to depend upon
outsiders to finance the fixed assets. There is no "rule ofthumb" to interpret this ratio but 60% it
65% us considered to be satisfactory ratio in case industrial undertaking.
FIXED ASSETS RATIO:
This ratio explains whether the firm has raised adequate long-term funds to
meet its fixed assts requirement and is calculated as under.
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The measure the relationship between fixed assets and the funded debt and is very useful to the
long term creditors.
2. FIXED ASSETS AS A PERCENTAGE TO CURRENT LIABILITIES:
The ratio measures the relationshipbetween fixed assets and the funded debt and isa very useful to the long term creation. The ratio can be calculated as below.
3. TOTAL INVESTMENT TURNOVER RATIO:
The ratio is calculated by dividend the riet sales by the value of total assets that is
(net sales/total investment) or (sales/total investment). A high ratio is an indicator
of over trading of total assets while a low reveals idle capacity. The traditionalstandard for the ratio is two times.
4. FIXED RATIO TURNOVER RATIO:
This ratio expresses the number of time fixed assets are being turned over is a state
period. It is calculated as under.
This ratio shows low well the fixed assets are being uses in the business. The ratio
is important incase of manufacturing concern because sales are produced not only
by use of current assets but also by amount invested in fixed assets the higher ratio,
the better the performance. On the other hand a low ratio indicated that fixed assets
are not being efficiently utilized.
5. GROSS CPITAL EMPLOYED:
The term "Gross Capital Employed" usually comprises the total assets, fixed as
well as current assets used in a business.
Gross Capital Employed = Fixed+Current Assets
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6. RETURN ON FIXED ASSETS:
The ratio is calculated to measures the profit after tax against the amount invested
in total assets to ascertain whether assets are being utilized properly or not. The
higher the ratio better it is for the concern.
CHAPTER-IV
DATA ANALYSIS
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&
INTERPRETATIONS
Componential analysis
YEAR F.A C.A TOTAL2005-2006 374638774(95.3) 18188786(4.7) 392827560(100)2006-2007 387614395(84.88) 69026320(15.12) 456640715(100)2007-2008 435188738(56.05) 341299089(43.95) 776487827(100)2008-2009 979445463(32.24) 2058964089(67.76) 3038409552(100)2009-2010 3714647184(97.95) 77709675(2.05) 3792356859(100)
INTERPRETATION:
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The investment in the F.A is in fluctuating trend and it is varying in between95.3, over the total fixed Asstes during the year 2005-2006 and it is
increased up to 97.95 during the year 2009-2010
The investment in F.A is 374638774 In the year 2006-2007there is capital expenditure increased to 456640715, so
this fixed Asstes proportion is 84.88% and WIP is 15.12%which show
change in proportion investment in F.A & C.A by the company
In the year 2008-2009the proportionof fixed assets to the total assets was32.24% and current Assets it was 67.76%,compare to the previous year the
fixed proportion in total assets was decreased and current Assets portion was
increased.
This show that in this year the company financial toward permanent
working capital
TREND ANALYSIS
YEAR TOTALINVESTMENT
TREND2005-2006 27989300 6.842006-2007 27989300 6.842007-2008 27999300 6.852008-2009 177989300 43.53
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2009-2010 408867550 100
INTERPRETATION:
The growth rate of total investment of sagar Cement is down wordtrend ,which shows the Sagar Cements investment in total
investment is increasing, from time to time During the year 2005-
2006it was recorded as 6.84.
But it is increased in the 2007-08,2008-09 & 2009-10wich shows thatthere is net increase
The average investment in total assest was found to be134166950during the review period
GROWTH RATE OF IN FIXED ASSETS
YEAR TOTAL ASSETS TREND2005-2006 387614395 1002006-2007 435188738 112.272007-2008 979445463 252.692008-2009 3714647184 958.342009-2010 3575357930 924.40
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INTERPRETATION:
An examination of the above reveals during the year 2005-
06the fixed assets investment was recorded at 38761495,and increased
in the subsequent 5 yeras compared to the2005-06
FIXED ASSETS TURNOVER RATIO:
Fixed assts turnover ratio is the relationship between the sales
or cost of good &fixed capital assets employed in a business.
FIXED ASSETS TURNOVER RATIO= SALES X 100
FIXED ASSETS
year sales Fixed assets percentage
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2005-06 1537719469 3987614395 396.71%
2006-07 2471433454 435188738 567.89%
2007-08 2746183129 979445463 280.38%
2008-09 3342733929 3714647184 89.99%
2009-10 5230025899 3575357930 146.28%
INTERPRETATION:
The fixed assets turnover ratio is in fluctuating trendduring the review period in the year 2005-06 the ratio was
recorded at 396.71%
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Average ratio was recored at 296.26 during the reviewperiod of time
The highest ratio was recorded at 567.89%in the year2006-07 which is more than the average the lowest ratio
was 89.99% in the year 2008-09 which is less than
average
FIXED ASSETS RATIO:
This ratio explain whether the raised adequate long term
funds to meet its fixed assets requirement
FIXED ASSETS (AFTER DEPRECIATION)
X100
CAPITAL EMPLOYED
COPITAL EMPLOYED= TOTAL ASSETS CURRENT
LIABILITIS
YEAR FIXEDASSETS
CAPITAL
EMPLOYED
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2005-06 387614395 382313216 101.39%2006-07 435188738 783302222 55.56%
2007-08 979445463 2969538732 32.98%2008-09 3714647184 4080538324 91.03%2009-10 3575357930 3575357930 92.997%
TOTAL INVESTMENT TURNOVER RATIO:
SALES
TOTAL INVESTMENT
YEAR SALES TOTALINVESTMENT
PERCENTAGE
2005-06 1537719469 27989300 54.93%2006-07 2471433454 27989300 88.30%2007-08 2746183129 27999300 98.08%2008-09 3342733929 177989300 18.78%2009-10 5230025899 408867550 12.79%
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INTERPRETATION:
The above relevance that the total investment turnover ratio is recorded as54.93%
in the year 2005-06 and 2006-07 and 2007-08 it was increased to 88.30% and
98.08 % and then it is decreased in year2008-09 &2009-10
18.78% &12.79%
RETURN OF FXED ASSETS
The return on fixed assets can be calculated as
Profit after tax
X 100
Fixed assets
Year Profit after tax Fixed assets percentage
2005-06 28335044 387614395 7.3%
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2006-07 276668271 433188738 63.57%
2007-08 309556391 979445463 31.60%
2008-09 164566593 3714647184 4.43%
2009-10 191235211 3575357930 5.35%
INTERPRETATION:
During the year 2005-06 the ratio recorded as 7.3%an dinthe year 2009-10 the ratio recorded as 5.35%
The highest ratio recorded at 63.57%in the year2006-07the lowest was 5.35% in the year 2009-10
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FIXED ASSETS NET WORK RATIO
GROSS FIXED ASSETS
X 100
NET WORK
YEAR GROSSFIXED
ASSTESNET WORK PERCENTAGE
2005-06 3876
143
95
24855
3176
155.9%
2006-07 435188738 736539340 59.09%
2007-08 979445463 1053156730 93.00%
2008-09 3714647184 1922221694 193.25%
2009-0 3575357930 2070990576 172.64%
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INTERPRETATION:
The gross fixed assets net work rate is fluctuating from year to year in theyear 2005-06. The gross fixed assets to net worth ratio is 155.90% in the
year 2009-10 the fixed assets to networth acqire the ratio is 172.64% which
shows that the net worth utilization to acquire the fixed assets is increase in
the year 2009-10 compared 2005-06.
The average ratio net worth ratio is 134.78% The highest ratio recorded in 2008-09at 193.25% the lowest ratio was
recorded at 59.09% in the year 2006-07
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GROSS CAPITAL EMPLOYEE:
YERA
FIXEDASSETS CURRENTASSETS GROSSCAPITAL
EMPLOYEES2005-06 387614395 253815309 6414297042006-07 435188738 551627988 9868167262007-08 979445463 660786126 16402315892008-09 3714647184 1261035706 49756828902009-10 3575357930 1366873271 4942231201
INTERPRETATION:
The above table the G.C.I decreased for the lost three
years I.e in 2007-08,2008-09&2009-10 and in sub-seqent years it is in
decreasing trend
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FIXED ASSETS AS A PERCENTAGE OF CURRENT LIABILITIES:
FIXED ASSETS
X 100
CURRENT LIABILITIES
YEARGROSS
FIXED
ASSETS
NET WORK PERCENTAGE
2005-06 387614395 147004209 263.68%2006-07 435188738 281194717 154.76%2007-08 979445463 378764623 258.59%2008-09 3714647184 575426770 645.55%2009-10 3575357930 803885612 444.76%
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INTERPRETATION:
The ratio has ups dn in the review period From the above table it is observed that the ratio was recorded
at645.59% in the 2008-09 and is gradually reduced to 154.76%
in 2006-07 which indicates that the current funds are used to
invest in the fixed assets which is not satisfactory.
The average ratio was recorded at 237.47%during the reviewpeiod.
The higest ratio was recorded at 645.55% which is higher thanaverage ratio.
The lowest ratio was recorded at 154.76 which is less than theaverage ratio.
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PROFIT AFTER THE TAX
YEAR PROFIT AFTER THE TAX2005-2006 283350442006-2007 2766682712007-2008 3095563912008-2009 1645665932009-2010 191235211
INTERPRETATION:
By observing the above table profit after tax (PAT) of sagar
cements increased in year 2007-08in comparison with the PAT of
2005-06 28335044/- to 309556391 /- in 2007-08
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REURN ON GROSS CAPITAL EMPLOYED:
PAT( PROFIT AFTER TAX)
X 100
GROSS CAPITAL EMPLOYED
YEAR PROFITAFTER TAX
GROSS
CAPITAL
EMPLOYEDPERCENTAGE
2005-06 28335044 641424704 4.42%
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2006-07 276668271 986816726 28.04%
2007-08 309556391 1640231589 18.87%
2008-09 164566593 4975682890 3.13%
2009-10 191235211 4942231201 3.87%
INTERPRETATION:
Return on GCE is in fluctuating trend during the review period
during the year 2005-06 , the ratio was recorded at 4.42% and in the
year 2009-0 , the ratio decreased to 3.87%
Average ratio was observed at 11.70 % over theperiod of time the
highest ratio was recorded at 28.04% in the year 2006-07 Which is more
than the average ratio.
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The lowest ratio was recorded at 3.31% in year 2008-09 which is Less
than the average ratio
FIXED ASSETS AS A % TO TOTAL ASSETS
FIXED ASSETS X 100
TOTALASSETS
YEAR FIXEDASSETS
TOTALASSETS
PERCENTAGE
2005-06 387614395 64142904 60.43%
2006-07 435188738 986816726 44.10%
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2007-08 979445463 1640231589 59.71%
2008-09 3714647184 4975682890 74.66%
2009-10 3575357930 4942231201 72.34%
INTERPRETATION:
From the above graph it is clear that :
Fixed assets as a percentage to total assets ratio fluctuationsduring the review period.
During the year 2005-06 the ratio was recorded at 60.43% and theyear 2009-10 the ratio 72.34% which is increased
Average ratio was observed at 62.25% during the study reviewperiod
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The highest ratio was observed at 74.66% in the year 2008-09which is more than average . The lowest ratio was recorded at
44.10% in 2006-07 which is less than the average
CHAPTER V
CONCLUSIONS & SUGGSTIONS
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CONCLUSIONS
After analyzing the financial position of Sagar cement and evaluating
its fixed assets management or capital budgeting techniques in respect of
components Analysis trend analysis and ratio analysis The following conclusions
are drawn from the project preparation.
The progress of the Sagar shows that there is an decrease in net lockconsiderable over the year that is from 98.2% to 97.25%
The fixed assets to net worth ratio is more than 59.09% in all yearsconsidered in the study In 2005-2006 it was155.9% and it reduced to
59.9% in 2006-2007 and it increase to 193.25% in 2008-2009 in 2009-
2010 it shows 172.64% This indicates that owner funds are sufficient
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to finance the fixed assets and the firm has to depend on outsiders
funds. But in Sagar Cement fluctuations are happening
There are fluctuation in the return on fixed assets 2006-2007the rate ofreturn was very high i.e.63.57%it is increased compared with previous
years. but it is going to be decreased in 2007-2008 i.e. 31.60% & 2008-
2009 i.e. 4.43% and in 2009-2010 some more increased to 5.35%
It is observed that are fluctuation in fixed assets as percentage currentliabilities it was high in 2008-2009 i.e.645.55%in the successive it was
reduced
The total investment turnover ratio it is decreased over the years
The assets turnover ratio observed that is not satisfactory at it were indecreasing from 396.71% to 146.28%
The profit & gross capital employees ratio it can be observed that it hasbeen fluctuations over the year i.e. from 4.42% to 3.87% results of the
above It can be said that the ratio is fluctuations
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Regarding profit & fixed assets ratio it can be observed that it has beenfluctuating over the year i.e. from 7.3% to 5.35% it can be said that the
profit to fixed assets ratio is quit not satisfactory.
From the above it can be said that the Sagar Cement financial positionon Fixed Assets is quit not satisfactory.
SUGGESTION
After analyzing the financial position of Sagar cement and evaluating
its fixed assets management or capital budgeting techniques in respect of
components Analysis trend analysis and ratio analysis The following suggestions
are drawn from the project preparation. As for my knowledge
The progress of the Sagar shows that there is an decrease in net blockconsiderable over the year so batter to increase
The fixed assets to net worth ratio is more than 59.09% in all yearsconsidered in the study In 2005-2006 it was155.9% and it reduced to
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59.9% in 2006-2007 and it increase to 193.25% in 2008-2009 in 2009-
2010 it shows 172.64% This indicates that owner funds are sufficient
to finance the fixed assets and the firm has to depend on outsiders
funds. But in Sagar Cement fluctuations are happening batter to
constant the these founds
There are fluctuation in the return on fixed assets 2006-2007the rate ofreturn was very high i.e.63.57%it is increased compared with previous
years. but it is going to be decreased in 2007-2008 i.e. 31.60% & 2008-
2009 i.e. 4.43% and in 2009-2010 some more increased to 5.35% The
return are low batter increase
The total investment turnover ratio it is decreased over the yearsSo batter to increased total investment
The assets turnover ratio observed that is not satisfactory at it were indecreasing from 396.71% to 146.28% so batter to do the province
methods
The profit & gross capital employees ratio it can be observed that it hasbeen fluctuations over the year i.e. from 4.42% to 3.87% results of the
above It can be said that the ratio is fluctuations
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Regarding profit & fixed assets ratio it can be observed that it has beenfluctuating over the year i.e. from 7.3% to 5.35% it can be said that the
profit to fixed assets ratio is quit not satisfactory so batter profit & fixed
assets ratio has to increase
CHAPTER-6
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BIBLOGRAPHY & BALANCE
SHEETS
BIBLOGRAPHY
BOOK NAME AUTHER
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R.K. Sharma & Shashu .K .Guptha - management Accounting
Prassana Chandra - Financial Management
S.P.Jain & K.L.Narang - Financial Accounting & Analysis
www.google.com
WWW. FIXED ASSETS MANAGEMENT.COM
Annual Reports of Sagar Cements
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BALANCE SHEETS
BALANCE SHEET AS AT 31ST MARCH,2006
PARTICULARS AMOUNTE AMOUNTESOURCES OF FUNDS
Shareholders fundShare CapitalReserves and Surplus
Loan Fund
Secured LoansUnsecured Loans
Deferred Income Tax Liability
111523000137030176
11201567087382611
248553176
19939828181365968
TOTAL 529317425APPLICATION OF FUNDS
FIXED ASSETSGross Block
Less: DepreciationNet BlockCapital Work- in Progress
InvestmentsCURRENT ASSETS, LOANS ANDADVANCES
InventoriesSundry DebtorsCash and Bank Balances
Loans and Advances
761406516373792121
665194909145171012102502
83741607
387614395690263027989300
LESS: Current liabilitys andprovisions
LiabilitiesProvisions
253815309
13079310916211100
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NET CURRENT ASSETS
147004209106811100
TOTAL 529317425
BALANCE SHEET AS AT 31ST
MARCH,2007
PARTICULARS AMOUNTE AMOUNTESOURCES OF FUNDS
Shareholders fundShare CapitalReserves and Surplus
Loan FundSecured LoansUnsecured Loans
Deferred Income Tax Liability
137683000598856340
22948430113957191
736539340
24344149284516107
TOTAL 1064496939 APPLICATION OF FUNDS
FIXED ASSETSGross Block
Less: DepreciationNet BlockCapital Work- in Progress
InvestmentsCURRENT ASSETS, LOANS ANDADVANCES
InventoriesSundry Debtors
Cash and Bank BalancesLoans and Advances
841575961
406387223
6637879582476149159456231243316813
43518873833088563027989300
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LESS: Current liabilitys and
provisionsLiabilitiesProvisions
NET CURRENT ASSETS
551627988
173903036107291681
270433271281194717
TOTAL 1064496939
BALANCE SHEET AS AT 31ST
MARCH,2008
PARTICULARS AMOUNTE AMOUNTESOURCES OF FUNDS
Shareholders fundShare CapitalReserves and Surplus
Loan Fund
Secured LoansUnsecured LoansCreditors For capital Goods
Deferred Income Tax Liability
138826001914330729
198499408256419306138756712
1053156730
2180170100115103525
TOTAL 3348430355 APPLICATION OF FUNDS
FIXED ASSETS
Gross BlockLess: Depreciation
Net BlockCapital Work- in Progress
InvestmentsCURRENT ASSETS, LOANS ANDADVANCES
14207085575441263112
979445463205896408927989300
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InventoriesSundry DebtorsCash and Bank BalancesLoans and Advances
705491795388236768648429463206151
LESS: Current liabilitys andprovisions
LiabilitiesProvisions
NET CURRENT ASSETS
660786126
215577629163186994
282021503378764623
TOTAL 3348430355
BALANCE SHEET AS AT 31ST
MARCH,2009
PARTICULARS AMOUNTE AMOUNTESOURCES OF FUNDS
Shareholders fund
Share CapitalReserves and Surplus
Loan FundSecured LoansUnsecured Loans
Creditors For capital Goods
Deferred Income Tax Liability
1500230001772198694
24026465315922844123088375
1922221694
2531657750
202085650
TOTAL 4655965094 APPLICATION OF FUNDS
FIXED ASSETSGross Block
Less: Depreciation
Net Block
4343135291628488107
3714647184
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Capital Work- in ProgressInvestments
CURRENT ASSETS, LOANS ANDADVANCES
Inventories
Sundry DebtorsCash and Bank BalancesLoans and Advances
425331984249294641
112203882474205199
77709674177999300
LESS: Current liabilitys andprovisions
LiabilitiesProvisions
NET CURRENT ASSETS
1261035706
50151339673913374
685608936575426770
TOTAL 4655965094
BALANCE SHEET AS AT 31ST
MARCH,2010
PARTICULARS AMOUNTE AMOUNTESOURCES OF FUNDS
Shareholders fundShare CapitalReserves and
Surplus
Loan FundSecured Loans
Creditors For capital Goods
Deferred Income TaxLiability
1500230001920967576
221823525955651746
2070990576
2273887005
303588877
TOTAL 4648466458
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APPLICATION OF FUNDSFIXED ASSETS
Gross BlockLess: Depreciation
Net BlockCapital Work- in
ProgressInvestments
CURRENT ASSETS, LOANSAND ADVANCES
InventoriesSundry DebtorsCash and Bank
Balances
Loans and Advances
4480731083905373153
48861477241187945626731560439647483
3575357930101253319
408867550
LESS: Current liabilitys andprovisions
LiabilitiesProvisions
NET CURRENT ASSETS
1366873271
70931054494575068
562987659803885612
TOTAL 4648466458