Project Kalyani

8/3/2019 Project Kalyani

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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



Loan FundSecured LoansUnsecured Loans


137683000598856340

22948430113957191

736539340

24344149284516107

TOTAL 1064496939 APPLICATION OF FUNDS


Less: DepreciationNet BlockCapital Work- in Progress


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


MARCH,2008



Loan Fund

Secured LoansUnsecured LoansCreditors For capital Goods


138826001914330729

198499408256419306138756712

1053156730

2180170100115103525


FIXED ASSETS

Gross BlockLess: Depreciation

Net BlockCapital Work- in Progress


14207085575441263112

979445463205896408927989300


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InventoriesSundry DebtorsCash and Bank BalancesLoans and Advances

705491795388236768648429463206151



NET CURRENT ASSETS

660786126

215577629163186994

282021503378764623

TOTAL 3348430355


MARCH,2009


Shareholders fund

Share CapitalReserves and Surplus

Loan FundSecured LoansUnsecured Loans

Creditors For capital Goods


1500230001772198694

24026465315922844123088375

1922221694

2531657750

202085650



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



NET CURRENT ASSETS

1261035706

50151339673913374

685608936575426770

TOTAL 4655965094


MARCH,2010


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



NET CURRENT ASSETS

1366873271

70931054494575068

562987659803885612

TOTAL 4648466458

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