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Masters of Business Administration

Name of Candidate : Prajakta Gund

Registration :

Name of the specialization : Finance



Under the guidance of

Prof. Suchitra Mam

Centre For Participatory Programmes



We thank IIBS College for giving us this opportunity for doing this
project report and we also would like to thank Professor Suchitra
mam for guiding us through the entire report formulation of IIBS for
the support as well as the faculties of IIBS.


I hereby declare that this Project work titled “STUDY AT TAXATION AND
COSTING OF AMBUJA CEMENT, CHANDRAPUR” is a record of original work
done by me under the guidance of Prof Suchitra of IIBS College and that this
project work has not formed the basis for the award of any
Degree/Diploma/Associate ship/Fellowship or similar title to any candidate of
any university.


Prajakta Gund

(Finance Student)

Date .......................


Prof Suchitra

Table of Contents


1 Introduction
2 Industry Profile

3 Company Profile

4 Product Profile
5 Organization
6 Taxation of INDIA

7 Costing of Company

8 SWOT Analysis

9 Conclusion

10 Bibliography

Chapter 1



Ambuja Cements Ltd a part of the global conglomerate LafargeHolcim is

among the leading cement companies in India. The company sells cement
under the Ambuja brand.Ambuja Cements Ltd (ACL) was incorporated in the
year 1981 as Ambuja Cements Pvt Ltd. The company was established as a
joint venture between the public sector Gujarat Industrial Investment
Corporation (GIIC) and Narottam Sekhsaria & Associates. In May 19 1983 the
company was rehabilitated into a public limited company. Subsequently the
company name was changed to Gujarat Ambuja Cements Ltd. Further the
name was changed to Ambuja Cements Ltd. Ambuja Cements is a major
cement producing company in India. The principal activity of the company is
to manufacture and market cement and clinker for both domestic and export
markets. The company has five integrated cement manufacturing plants and
eight cement grinding units. It is the first Indian cement manufacturer having
a captive port with three terminals along the country's western coastline to
facilitate timely cost effective and environmentally cleaner shipments of bulk
cement to its customer. The company has its own fleet of ships. The company
subsidiaries include Dang Cement Industries Private Ltd M.G.T Cements
Private Ltd Chemical Limes Mundwa Private Ltd and Dirk India Pvt Ltd.In the
year 1985 the company set up a cement plant in technical collaboration with
Krupp Polysius Germany Bakau Wolf and Fuller KCP. During the year 1988-89
the company commissioned the 12.6 MW diesel-generating sets. In the year
1991 the company got necessary approvals for setting up another cement
plant with 1 million tonne capacity per annum at Himachal Pradesh. The
company undertook bulk cement transportation by sea to the major markets
of Mumbai Surat and other deficit zones on the West Coast.In the year 1997
the company started commercial production in Kodinar plant with an
enhanced capacity. In the year 1998 they set up a $20 million clinker Grinding
unit in Sri Lanka. In the year 2000 giants Larsen & Tubro (L&T) and Gujarat
Ambuja Cements entered a unique agreement to reduce transportation costs
in dispatching bulk cement in Gujarat. Also they entered into an annual
contract with a Soinhalese firm Mahaveli Marine Cement to supply around 2.5
lakh tonnes of cement.In the year 2002 the company started commercial
production at Maratha Cement Works plant. In June 2002 they started
commercial production in the new 2-million tonne Greenfield cement plant at
Chandrapur Maharashtra. In the year 2004 Ambuja Cement Rajasthan was
amalgamated with the company.In February 2005 the company set up a
cement mill with a capacity of 80 TPH at Darlaghat and commenced
commercial production. They commissioned a captive thermal power plant
with two 12 MW Steam Turbo Generators (STG) with two boilers of 45 TPH
capacity each at a cost of Rs.94 crore. The first STG was commissioned in
February 2005 and the second in May 2005. In July 2005 Indo-Nippon Special
Cements Ltd a subsidiary company was amalgamated with the company. The
company set up new clinker capacity at Bhatapara in Chattisgarh and Rauri in
Himachal Pradesh each having a capacity of 2.2 million tonnes per annum at a
cost of Rs. 1600 crore. In 2006 Global Cement Major Holcim acquired
management control of the company.The company commenced commercial
production at two new 2.2 million tonne clinker production lines at Bhatapara
(Chattisgarh) and Rauri (HP) in December 2009 and January 2010 respectively.
In February 24 2010 the company inaugurated their cement plant (grinding
unit) at Dadri Uttar Pradesh with the capacity of 1.5 million tonnes. In March
27 2010 they inaugurated their cement plant (grinding unit) at Nalagarh
Himachal Pradesh with the capacity of 1.5 million tonnes. During the year the
company commissioned an additional 30 MW captive power unit at
Ambujanagar (Gujarat). In October 2010 the company signed an agreement
with the Rajasthan State Industrial Development and Investment Corporation
to set up a 2.2 million tonne clinkerisation unit in Nagaur district. In December
2010 the Dadri Grinding Unit in its very first year of operation received the
Integrated Management

System (IMS) Certification including ISO 9001:2008 ISO 14001:2004 and

OHSAS 18001:2007 by BSI (U.K.).In the year 2011 the company started
commercial production in a new cement mill at a cost of approx Rs. 185 crore
at Bhatapara plant. Also they commissioned a new cement mill of 0.9 million
tonne cement grinding capacity at Maratha Cement Works plant at a cost of
approx Rs 61 crore. The company commissioned a 7.5 MW Wind Mill project
in Kutch Gujarat at a cost of Rs 46 crore. The company increased the installed
capacity in Bhatinda grinding unit in Punjab by 0.1 million tonne to reach at
0.6 million tonne. Also they increased the installed capacity in Farraka
grinding unit in West Bengal by 0.25 million tonne to reach at 1.25 million
tonnes.In June 2011 the company made strategic investments in Dang
Cement Industries Pvt. Ltd Nepal and acquired 85% shareholding for Rs 19.13
crore to help further expansion of capacity in the northern region of India and
Nepal. In September 2011 they acquired 60% shareholding in Dirk India Pvt
Ltd Maharashtra Rs. 16.51 crore. The company entered into a joint venture
for speciality cement manufacturing facility in Goa with Counto Microfine
Products Pvt Ltd.On 24 July 2013 the Board of Directors of Ambuja Cements
approved a proposal to acquire 50.01% stake in ACC. It was decided that
Ambuja will first acquire from Holderind Investments Ltd. Mauritius (Holcim)
a 24% stake in Holcim India for a cash consideration of Rs. 3500 crore
followed by a merger of Holcim India into Ambuja. On 24 May 2016 Ambuja
Cement announced the completion of its Rs 338-crore expansion project at its
Sankrail grinding unit near Kolkata thereby raising the capacity of the unit to
2.4 million tonne per annum from 1.5 million tonne per annum.On 15
November 2016 Ambuja Cement's overseas parent company Lafarge Holcim
announced that its subsidiary Holderind Investments Ltd. has increased its
shareholding in Ambuja Cement Ltd. to 63.11% post the acquisition of
additional 3.91 crore shares.On 29 April 2017 Ambuja Cement announced the
launch of a superior composite cement product for better sustainability under
the brand Ambuja Compocem.Ambuja Cement's Board of Directors at its
meeting held on 5 May 2017 approved constitution of a special committee of
directors with majority of independent directors to explore the possibility of a
merger of Ambuja Cement and ACC.

Chapter 2

Industrial Profile


Ambuja Cements Limited (ACL) is India’s leading cement company. It

commenced cement production in 1986. Ambuja Cement is a premier cement
brand in India for Ordinary Portland Cement (OPC) and Pozzolana Portland
Cement (PPC), with a significant footprint across the western, eastern and
northern markets of India. Our customers range from individual house
builders (IHBs) to governments to global construction firms. For 2015, the
total cement capacity was 29.65 MTPA, its production 21.54 MT cement and
total number of permanent employees 5622.

Ambuja Cements Limited is a public limited company listed on the Bombay

Stock Exchange Limited and National Stock Exchange of India Limited. The
GDRs issued by the Company are listed on the Luxembourg Stock Exchange.
LafargeHolcim Limited, Switzerland is the majority shareholder with 50.35%


 Ambujanagar, Taluka Kodinar District Gir Somnath, Gujarat
 Darlaghat, District Solan, Himachal Pradesh
 Maratha Cement Works, District Chandrapur, Maharashtra
 Rabriyawas, District Pali, Rajasthan.
 Bhatapara, District Raipur, Chhattisgarh

 Roopnagar (Ropar), Punjab
 Bathinda, Punjab
 Sankrail, District Howrah, West Bengal
 Roorkee, District Haridwar, Uttaranchal
 Farakka, District Murshidabad, West Bengal
 Dadri, District Gautam Budh Nagar, Uttar Pradesh
 Nalagarh, District Solan, Himachal Pradesh

 Magdalla, District Surat, Gujarat

Ambuja Cements Limited, ‘Elegant Business Park’, MIDC Cross Road – ‘B’,
Andheri – Kurla Road, Andheri (East), Mumbai – 400 059.


P.O. Ambujanagar, Taluka Kodinar, District Gir Somnath, Gujarat – 362 715.


LafargeHolcim is a world leader in the building materials industry. With a well-

balanced presence in 90 countries and focus on cement, aggregates and
concrete, the LafargeHolcim Group has about 1,15,000 employees around the
world with combined net sales of CHF 32 billion (EUR 26 billion) in 2014.


Ambuja Cement Foundation is the corporate social responsibility (CSR) arm of

Ambuja Cements Limited which was formally registered in 1993. ACF works
with the rural communities surrounding Ambuja’s existing and proposed

manufacturing locations. Today ACF is functional across 12 states covering 22
locations in India.

Health and Safety

Ambuja Cement is committed to achieving Zero Harm at its workplace.

Strong emphasis on improving health and safety (H&S) parameters has
helped the company substantially reduce the number of onsite injuries

For Ambuja Cement, its people are its most important resource. The company
is committed to ensure the safety of all its employees, contractors and others
connected with its operations, through its Zero Harm policy.

The company has substantially reduced the number of onsite injuries with its
strong emphasis on improving health and safety parameters, reducing risks
through people engagement, capability building, and strengthening health
and safety management systems and processes. However, there is more to be
done to achieve the company's ultimate goal of achieving a Zero Harm

We Care – an umbrella initiative which covers all stakeholders – has played a
seminal role in transforming Ambuja Cement's operations as well as attitudes
towards safety. The We Care initiative has led the way in training and
capability building, and has been spearheading the company's efforts to
achieve the goal of Zero Harm.

All plants of Ambuja Cement are certified as per OHSAS 18001 world

Employees adhere to these five rules at work:

 I assess and control risks before starting any task

 I only perform activities for which I am authorised
 I never override or misuse health and safety devices, and I always use
the required PPE
 I do not work under the influence of alcohol or drugs
 I report all incidents

Chapter 3

Company Profile

Ambuja Cements Ltd is India’s foremost cement company known for its
hassle-free, home-building solutions. Unique products tailor-made for Indian
climatic conditions, sustainable operations and initiatives that advance the
company’s philosophy of contributing to the larger good of the society, have
made it the most trusted cement brand in India

Ambuja Cements Ltd, a part of the global conglomerate LafargeHolcim, is

among the leading cement companies in India. Ambuja Cement has provided
hassle-free, home-building solutions with its unique sustainable development
projects and environment-friendly practices since it started operations.
Currently, Ambuja Cement has a cement capacity of 29.65 million tonnes with
five integrated cement manufacturing plants and eight cement grinding units
across the country.

The company has many firsts to its credit – a captive port with four terminals
that has facilitated timely, cost-effective, cleaner shipments of bulk cement to
its customers. To further add value to our customers, the company has
launched innovative products like Ambuja Plus Roof Special, Ambuja Plus Cool
Walls and Ambuja Compocem. The new products not only fulfil important
customer needs but also help in significantly reducing carbon footprints.

Ambuja Cement is the industry leader in responsible use of resources, both

natural and man-made. The company has been certified over five times water
positive, a feat achieved through conservation efforts and increasing water
efficiency in its plants. It is also plastic neutral, by burning as much as over
50,000 tonnes of plastic waste in its kilns, equivalent to 1.5 times of total
plastic used. The company also generated 7.4% of its power needs from
renewable resources.

Sustainable profitable growth is ingrained in the company’s DNA. Ambuja

Cement’s multi-pronged strategy, including triple bottom line accounting
method; True Value; good corporate governance practices; overarching
corporate environment policy; and sustainable supply chain policy have
helped cement the company's credentials as a sustainable manufacturer.
Ambuja Cement's Sustainable Development Ambition 2030 provides strategic
direction to the company's long-term sustainability vision. All Ambuja Cement
plants are ISO 14001 certified.

Ambuja Knowledge Centres (AKCs), a unique initiative by the company, serves

as a knowledge sharing platform for construction professionals that includes
practical workshops on mix design and quality supervision. Currently, over 30
AKCs are functional across India.

The company also works closely with communities that live around its plants,
through its CSR arm, the Ambuja Cement Foundation (ACF). ACF implements
need-based and participatory programmes in the thematic areas of water
resource development, health and sanitation, women empowerment, rural
infrastructure, education and agro-based/skill-based livelihood creation.

The company's most distinctive attribute is its approach to business. Ambuja

Cement follows a unique homegrown philosophy that gives people the
authority to set their own targets and the freedom to achieve their goals. Its
focus has been consistent on two major building blocks that has resonated
through its daily operations – Quality (of products) and Safety (of all those
involved in the creation of its products).

The company's quintessential spirit has ensured a product that

embodies Giant Strength

The spirit of I CAN

“Give a man orders and he will do the task reasonably well. But let him set his
own targets, give him freedom and authority, and his task becomes a
personal mission: ”

The spirit of is the catalytic force behind the success of Ambuja Cement
and its people’s strength in pushing boundaries and achieving the seemingly

The spirit encapsulates the management philosophy at Ambuja Cement
Ltd. It signifies that every individual contributes to the best of his potential to
achieve the collective goal of many. This process of

. The rationale promotes the virtues of accountability and

empowerment at each level and keeps the employees motivated by letting
them share equal responsibility.

tapping individual initiative for team synergy is at the heart of the culture
nurtured over the years. It emboldens employees to have an equal voice in
the functioning of any system that they are a part of, enabling them to
achieve goals more efficiently as a team.

Ambuja Cement entered the cement business with the driving conviction that
challenges are there to be met and opportunities are meant to be seized. As
the David among the established Goliaths, it saw a way to put the competition
at a disadvantage, and that was to achieve maximum efficiency and
productivity at the lowest cost do it faster

The norms said you needed three years to build a cement plant. We built it in

Three years is the time required for a cement plant to become operational! At
least that was the norm until Ambuja Cement engineers built a greenfield
plant at Ambujanagar in Gujarat.

One of the reasons for the delay in construction of plants was the time taken
for approvals. To cut red tape and reduce delays, Ambuja engineers were
empowered to take decisions on the spot which helped in ensuring timely
completion of tasks. The response time for approvals was dramatically
reduced by 90 percent.

The freedom from red tape ensured that plant engineers placed orders for
machinery even before the site was chosen, as a result of which the
equipment was ready for installation by the time land was acquired. Result:
The plant was on-stream almost a year ahead of schedule and ensured
tremendous savings in inflationary costs for the company.

The norms said you can't build a cement plant in three years. We
built it in two.

do it more economically

do it better

accomplish the impossible

be over five times water positive

make history

stop wastage

make a difference

sow an idea

overcome limitations

outperform myself

lead by example

Awards and recognition

Ambuja Cement is proud to be honoured with some of the prestigious awards
for business and operational excellence, and its people initiatives

2018 Awards

Ambuja Cement Foundation wins “Best CSR and sustainability practise

2017”award the 5th Asis business responsibility summit

Industry leadership
Ambuja cement’s industry leadership status is built on its world-class
products, pioneering initiatives and sustainable business growth

Water Positive

Ambuja cement is the only company to be certified over five times water
positive. A company is water positive when it gives back to the community
more water than it consumes, that means Ambuja cement gives back over
five times the water it consumes. Along with its efforts to conserve water at
its plants, villages in and around its plants, staff colonies, and mines, the
company also increased efficiencies and managed to reduce consumption and

Modular curing solution

Ambuja cement is the only company to manufacture specialised cement
which lends strength and durability to building roofs and makes it leakproof.
Known for its high strength and high performance, Ambuja Plus Roof Special
is a special quality PPC cement with advanced SPE technology which makes
the concrete stronger, denser and leakproof. Ambuja Cement Roof Special is
tailor-made for Indian climatic conditions.

True Value
Ambuja Cement is the first company to institutionalise True Value, the triple
bottom-line accounting method to reflect the three pillars of sustainability –
People, Planet, and Profit. A qualitative measurement of the company's
interaction with the environment and society, True Value has helped the
company identify a portfolio of cost-effective projects, reduce costs, increase
earnings and most importantly, increase its True Value.

Ambuja Knowledge Centre
A pioneering initiative by Ambuja cement, Ambuja Knowledge Centres (AKC)
serve as a knowledge sharing platform for construction professionals and is
aimed at increasing awareness about cement and concrete. AKCs help in
advancing the knowledge of professionals through practical workshops and
also function as an experience centre to promote and offer solutions for
cement and concrete applications. The AKCs also help the company build
long-term relationships with the AEC community. Currently, over 30 AKCs are
operational in various parts of the country.

Ambuja Cements Limited, formerly known as Gujarat Ambuja Cement

Limited, is an Indian major cement producing company.

The Group's principal activity is to manufacture and market cement and

clinker for both domestic and export markets.

The company has entered into a strategic partnership with Holcim, the second
largest cement manufacturer in the world from 2006. Holcim had, in January,
bought a 14.8 per cent promoters' stake in the GACL for INR 21.4 billion.

Currently Holcim holds 61.62% of shares in Ambuja cement.

Privacy Policy


Ambuja Cement Foundation (ACF) is committed to protecting your privacy

and the information that you provide to us or that we collect. This policy
discusses the type of information we collect, how we use it, whether we share
it with others, what you can do to limit our use of it and how you can correct
the information or have it deleted. Please read this policy carefully before
using our web site.

Information we collect :
From you

You may visit and use this website of Ambuja Cement Foundation
( at anytime that the web site is
operational. The submission of personal information is not required to use the
general features of the web site. Personal information, which you provide to
us on a voluntary basis, we request your name, city, state and country of
residence, Pin code, email address, telephone number, gender, date of birth
and limited personal details.

From other sources

We also collect information about you, which we obtain whenever you visit
our web site. We do this through using "cookies". Cookies are electronic
identifiers, which we attach to your computer through your browser, that
allow us to recognize you once you log on the web site. As a result of this
improved recognition, we can simplify your experience and make your use of
the web site much more convenient. The cookie does not collect personal
information, nor does it combine the information obtained with personal
information. Also, once you sign off our web site the cookie disengages. It
does not track where you go on the Internet unless you are on our web site.
We may also collect certain technical information, which does not allow us to
identify you personally, but pertains to your use of the Internet. For example,
we can determine what type of browser you are using to access the site and
thus give you optimized pages. This information is primarily for site
management purposes and may be used to diagnose problems, follow user
movement over the web site, determine and analyze user trends, collect
aggregate data, identifying referring web site addresses, etc.

3. How we use the information:

(i) We will use the information that you submit or we collect to improve the
site and your overall user experience.
(ii) Personal information will be used by ACF for internal purposes including
the following:
(a) Sending you inter alia emails, features, newsletters, and job related
(b) Maintaining an internal confidential database of all the Personal
Information collected from
visitors to the Site
(c) Evaluating and administering the Site and ACF's activities, responding to
any problems that may arise and gauging visitor trends on the Site.

4. What information do we share or disclose:

(i) We will not sell, trade, rent or lease your personal information to other
companies, except as otherwise provided herein. We may, however, share
aggregate information with the third parties linked to or included on our web
site. And we may notify you, from time to time; of information from a third
party which we believe would be of interest to you. However, no personal
information will be provided to the third party.
(ii) We will share or disclose your personal information with others if (a) you
consent to such disclosure; (b) you request something from us which requires
us to provide the information in order to comply with your request; (c) a
person, organization or entity that does work on our behalf needs the
information in order to do the work, but only if the information is not used for
other purposes and it is kept confidential and not retained after the work has
been completed; (d) in compliance with any legal or administrative process,
including court orders; (e) to enforce or apply this policy or any other
agreement; or (f) to protect the rights or property of Ambuja Cement
Foundation and/or the personal safety of its employees, users or others.

5. Limiting our use to the information:

(i) You can chose not to provide some or all of the personal information
initially requested from you.
(ii) Another means of limiting our use to information is by rejecting cookies.
Most browsers are set up to accept cookies automatically, unless you indicate
otherwise. If you choose to reject the cookie you may do so and still use the
web site, but your access to and use of certain areas of the web site may be

6. Security:

Although we employ measures to protect your privacy, we cannot guarantee

that your information will be secure against unauthorized intruders in every
instance. In addition, because internet communications can be intercepted by
third parties during transmission, we cannot ensure the security of your
information as it is being transmitted to us.

7. Changes To This Policy:

Ambuja Cement Foundation may amend this privacy policy at any time. If we
do so, we will post the changes on this page, with the change, and the word
"Amended" prominently displayed, so that you are always aware of the type
of information we collect, how we use it, whether we share it with or disclose
it to others, what you can do to limit our use of it and how you can correct the
information or have it deleted.

8. Copyright Protection

All content on this Site including graphics, text, icons, interfaces, audio clips,
logos, images and software is the property of ACF and/or its content suppliers
and is protected by Indian and international copyright laws. The arrangement
and compilation of all content on this Site is the exclusive property of ACF and
protected by Indian and international copyright laws. Permission is given to
use the resources of this Site only for the purposes of making enquiries,
making a donation or placing an order for the purchase of ACF products. Any
other use, including the reproduction, modification, distribution,
transmission, republication, display or performance, of the content on this
Site can only be made with the express permission of ACF. All other
trademarks, brands and copyrights other than those belonging to ACF belong
to their respective owners and are their property.

9. No Guarantees

While this Privacy Policy states our standards for maintenance of Data and we
will make efforts to meet them, we are not in a position to guarantee these
standards. There may be factors beyond our control that may result in
disclosure of data. As a consequence, we disclaim any warranties or
representations relating to maintenance or nondisclosure of Data.

Chapter 4

Product Profile

Product of Ambuja Cement
Ambuja Cement
Known for its high strength, high performance cement caters to each of its
three customer segments – Individual Home Builders (IHBs), Masons and
Contractors, and Professionals

An established brand in India, Ambuja Cement is known for its high strength,
high performance Ordinary Portland Cement (OPC) and Pozzolana Portland
Cement (PPC). OPC & PPC both are high quality active hydraulic binders & are
preferred brands in the market for all the construction applications. The
company currently has a manufacturing capacity of 29.65 million tonnes.

Innovation – the hallmark of Ambuja Cement since its inception – has helped
it develop technology to produce cement of consistent quality from diverse
raw materials. About 25 per cent of the company’s production of high
strength Portland Pozzolana Cement (PPC) uses fly ash – a waste produced in
thermal power plants – as raw material. PPC currently constitutes 93 percent
of the company’s product portfolio.

Ambuja was the first to introduce 53-grade cement in the market. By

benchmarking quality standards for the industry, Ambuja became the first
cement company to receive the ISO 9002 quality certification.

Through use of state-of-the-art technology and strong thrust on research and
development, Ambuja Cement has developed products to cater to its three
customer segments – Individual House Builders, Masons and Contractors, and
Professionals’ FOR YOUR ROOF!

We are a leading Manufacturer of Ambuja Cement and Ambuja PLUS from
Mumbai, India.

Ambuja Cement

Ambuja PLUS

Cement Product
Pioneers in the industry, we offer Ambuja Cement, Portland Pozzolana
Cement (PPC) and Ambuja PLUS from India.

Ambuja Cement

Portland Pozzolana Cement (PPC)

Ambuja PLUS

SPE technology. It extracts 100% of silicate gel from cement that helps in
making the concrete stronger, denser and leak proof, resulting in
strengthening of the roof.

Chapter 5

Organization Structure


An organization is a consciously coordinated social entity, with a relatively

identifiable boundary, that functions on a relatively continuous basis to
achieve a common goal or set of goals. The basic elements of organizations
have remained the same over the years. Three viewpoints have emerged:
classical, the neo-classical and the modern viewpoints. In the late 18th
Century three streams of concept, i.e. Bureaucracy, administrative theory and
scientific management began to be developed. The structure of an
organization received emphasis under this school. The streams of concepts in
the "classical" model are based on the same assumptions, but are developed
rather independently.

Bureaucracy as a concept, developed by Max Weber, presents descriptive,

detached, scholarly point of view. Administrative theories not only described
macro aspects of organizations but also focussed on principles and practice
for better performance. Scientific Management focussed mainly on work
process, etc. The classical as the whole viewed organizations as mechanistic
structures. The Neo-classical theory gave birth to human relations movement
and provided the thrust toward democratization of organizational power,
structures and participative management.

The need for order, rationality, structure, etc. have been modified to highlight
the importance ofrelaxing the rigid and impersonal structure consider each
person as an individual with feelings and social influenced that effect
performance on the job. Modern theory of organization and management has
been developed since 1930’s. Chester I Barnard considered the individual,
organizations, suppliers and consumer as a part of the environment.

Organization structures based on classical bureaucratic principles are

hierarchical. Modem theorists attempted to modify these in the light of
experience, technological changes and knowledge of human resource. The
centralised structures gave way to some sort of decentralisation and thus
transformed, partially at least, vertical and horizontal ones, reflecting a shift
in emphasis from command to consensus based self-control. The relative
conditions of instability and uncertainty transferred the classical
mechanisticforms ofmanagement systems into Organic ones.

The advent of specialisation and requirements of coordination had thrown up

new issues and strategic choices concerning product versus function and
matrix organization. The continuum of structures range from centralisation to
detentralisation, vertical to Horizontal, mechanistic to organic and product to
function. The predominant mode is decentralisation with centralized control
and certain type of matrix in complex organisation. Each form has its own set
of advantages and disadvantages. Compromises are possible in the context of
organisation's environment, technology, culture and aspects of human
behaviour. Organisation structure recognises the need for formally
coordinating the interaction patterns of organisation members. Organisation
structure defines how task are to be allocated, who reports to whom, and the
formal coordinating mechanisms and interaction patterns that is followed. In
organisation's structure having three important components: Complexity,
formalization, and centralization. Acceptance of these three components as
thecore dimensions of organizational structure, while generally widespread
today, is not universal.

Changing pattern of Organisational structure of cement industry needed to be
assessed to maintain organization viability so that the system accommodate it
self to changes. Its compulsory for the manager to anticipate changes and
accommodates it for survival and stability in the environment. Indian Cement
Corporation incorporated changes in structure to become more competitive.
Change is the only constant in organization structure. Many of the
organizational changes in Indian Cement Industry companies refer that they
reflect a shift in one or two function, or a change in several reporting
relationships, on the other hand, a sizable portion ofthe changes are major in
that they reflect large-scale regroupings of activities or basic changes in the
authority structure of the company.

The study, broadly speaking, emanating only the minor shift in Indian Cement
Industry. The Cement Industry also made notice of regrouping of some
activities. Among the different companies whose charts make up the back
ofthis report, such a pattern is discernible. The Indian Cement Industry's
pattern reflects the attempts of companies to build organization structures
consonant with the requirements of longer and - importantly - far more
complex business. The increase in size and complexity which has confronted
many companies has come about through the new various types of cements
markets they are serving, the new products they are producing and the
resulting changed legal and economic climate they are operating in. In some
cement companies, the increased complexity has resulted from self-
guaranteed expansion; in other it has came about through mergers and
acquisition. Managing of large complex business is a problem in case of few
cement companies in 1980's. The most Indian Cement Corporations adopted
emulating techniques to get efficient. But more often today it seems to result
from the application of the principles of organization to a given set of

Ambuja and ACC Cement Growth Report

Ambuja Cement today reported a 6.21 per cent growth in its production at
1.84 million tonnes in January compared to the same month last year.

The cement major's output was 1.73 million tonnes in January 2010, a
company statement here.

In dispatch, the firm witnessed 5.32 per cent rise in January at 1.84 million
tonnes from 1.74 million tonnes in the corresponding month last year.

Another major player, ACC Cement reported 9.57 per cent increase in
production at 2.06 million tonnes compared to 1.88 million tonnes in January
last year.

The company said dispatch grew by 7.32 per cent at 2.05 million tonnes from
1.91 million tonnes in the same month last year.

Chapter 6

What is tax?The word tax is derived from the Latin word ‘taxare’ meaning to
estimate.A tax is not a voluntary payment or donation but an enforced
contribution,exacted pursuant to legislative authority and is any contribution
imposed by government whether under the name of toll,
tribute,impost,duty,custom,excise,subsidy,aid,supply,or any other name.

India has abolished multiple taxes with passage of time and imposed new
ones. Few of such taxes include inheritance tax, interest tax, gift tax, wealth
tax, etc. Wealth Tax Act, 1957 was repealed in the year 2015.

Direct Taxes in India were governed by two major legislations, Income Tax
Act, 1961 and Wealth Tax Act, 1957. A new legislation, Direct Taxes Code
(DTC), was proposed to replace the two acts. However, the Wealth Tax Act
was repealed in 2015 and the idea of DTC was dropped.

The tax structure in India is divided into direct and indirect taxes.

While direct taxes are levied on taxable income earned by individuals and
corporate entities, the burden to deposit taxes is on the assessees
themselves. On the other hand, indirect taxes are levied on the sale and
provision of goods and services respectively and the burden to collect and
deposit taxes is on the sellers instead of the assessees directly.Taxes in India
are levied by the Central Government and the State Governments. Some
minor taxes are also levied by the local authorities such as the Municipality
and the Local Governments.

Over the last few years, the Central and many State Governments have
undertaken various policy reforms and process simplification towards great
predictability, fairness and automation. This has consequently lead to India’s
meteoric rise to the top 100 in the World Bank’s Ease of Doing Business
(EoDB) ranking in 2017. The Goods & Services Tax (GST) reform is one such
reform to ease the complex multiple indirect tax regime in India.

Major Central Taxes

>Income Tax
Income Tax is a tax imposed on individuals or entities (taxpayers) that varies
with respective income or profits (taxable income). Income tax generally is
computed as the product of a tax rate times taxable income. The tax collected
by Income Tax Department for central government.

>Central Goods & Services Tax (CGST)

>Integrated Goods & Services Tax (IGST)

>Customs Duty-
Custom Duty is a indirect tax for goods when import or export. When import
goods import from outside in the tax known as import custom duty. we goods
export to outside India is known as export custom duty. The tax collected by
Central Board of Indirect Taxes and Customs.

Major State Taxes

>State Goods & Services Tax (SGST)

>Stamp Duty & Registration

Local Body Taxes

"Local Body Tax", popularly known by its abbreviation as "LBT", is the tax
imposed by the local civic bodies of India on the entry of goods into a local
area for consumption, use or sale therein. The tax is imposed based on the
Entry 52 of the State List from the Schedule VII of the Constitution of India
which reads; "Taxes on the entry of goods into a local area for consumption,
use or sale therein." The tax is to be paid by the trader to the civic bodies and
the rules and regulations of these vary amongst different States in India. The
LBT is now partially abolished as of 1 August 2015

GST is one of the biggest indirect tax reforms in the Country.GST is a
comprehensive indirect tax levied on manufacture, sale and consumption of
goods as well as services at the national level. It has replaced all indirect taxes
levied on goods and services by the Central and State Governments.

GST regime was implemented from 1st July 2017, and India has adopted the
dual GST model in which both the Centre and States levy taxes:

>STATE GST (SGST)-Collected by State Government.


Central Government.

NOTE:The GST is applicable on all goods other than following:

• Alcoholic liquor for human consumption.

• Five petroleum products (Petroleum crude, high-speed diesel, motor spirit,

natural gas and aviation turbine fuel). GST on these to be levied post
notification about the effective date.


>Minimal physical interface

>Compliance cost reduced due to the unification of Indirect taxes

>Check over tax-evasion through a robust IT-based administration

>Unified tax-regime for both goods and services

>No cascading of taxes


Tax incidence of an individual depends upon his residential status, which is
defined on the basis of his physical presence in India as per the Income Tax


Tax incidence of a company depends on the residential status of the

company,i.e.,whether the company has been incorporated in India or its place
of effective management lies in India

Tax incidence of a Limited Liability Partnership (LLP) depends on the
residential status of the LLP,i.e.,whether the control and management of its
affairs are situated wholly or partially in India.


>Liaison Office
A Liaison Office (LO) is generally not subject to Income Tax in India, as it
cannot conduct business activities and earn profits on account of Indian
exchange control regulations.

It is required to obtain an Indian tax registration number (PAN) and a

withholding tax registration number (TAN).

It is required to file an annual statement of its financial affairs and an annual

activity certificate (AAC).

As an LO cannot generally earn any profits, no repatriation taxes are

applicable. Even if there are any unutilized funds available at the time of its
closure, they can be repatriated without any exit taxes.

>Project Office/Branch Office

A Project Office (PO)/ Branch Office (BO) is treated as an Indian Permanent
Establishment (PE) of its Foreign headquarter. Therefore, it is taxable in
respect of its Indian profits @ 40% plus applicable surcharge and cess.

It is required to obtain a PAN and TAN, file an annual return of income and an

Repatriation of surplus or at the time of closure, PO/ BO is not subject to any

additional taxes.

An LLP incorporated in India is treated as a tax resident of India and is taxed
@ 30% plus surcharge of its global income. It is required to obtain a PAN and
TAN, and file an annual return of income.

When LLP distributes its profits to partners, they are not taxed in the hands of
the LLP or its partners. Repatriation of capital contribution (say, upon
dissolution) is permissible without any thresholds and is not subject to any
additional taxes.

>Company formed in India (Wholly-owned subsidiary/ Joint Venture)

A company incorporated in India is treated as a tax resident of India and is

taxed @ 30%* on its global income. However, if its turnover is up to INR 2,500
mn in FY 2016-17, then the applicable rate of tax is 25% plus surcharge.

It is required to obtain a PAN and TAN, and file an annual return of income.
Profit repatriation by way of a dividend is subject to Dividend Distribution Tax
(DDT) in the hands of the company @ 20.36% of dividend declared.

Chapter 7

Costing Methods & Important Cost Terms
Costs can be simply defined as the money or resources associated with a
purchase / business transaction or any other activity. Different industries
adopt different methods of ascertaining costs of their products depending on
the nature of the production and the type of output.

Cost sheet is the statement that shows various components of total cost of a
product. It indicates per unit cost in addition to total cost. Cost sheet is
prepared on the basis of historical cost and estimated cost.


Fixed cost:
Fixed costs are those costs that do not vary with respect to changes in output
and would accrue even if no output was produced. E.g. Rent, interest
payments, property taxes and employee salaries. However, fixed costs are
restricted to specific time frame, since over the long run fixed costs can vary.
For example, a manufacturer may decide to expand capacity in tandem to the
increase in demand for its product, requiring a higher level of expenditure on
plant and equipment.

Variable Cost:
Variable cost changes proportionately to the level of output. For
manufacturers, the key variable cost is the cost of materials.

Total Cost:
It is defined as the sum of fixed, variable and semi variable costs.

Direct and Indirect cost:

Direct costs typically include the major components for manufacturing goods
and the labor directly required to produce those goods. Direct costs are also
referred to as prime costs. On the other hand, indirect costs include plant-
wide costs such as those resulting from the use of energy and fixed capital.
Indirect costs are also referred to as overhead.

Incremental cost:
It is mainly the extra cost associated with manufacturing one additional unit
of production. It is also referred to as differential cost.

Opportunity Cost:
It is defined as the cost of an alternative that is forgone (benefit, profit, value
given up) in order to pursue a certain action.

Sunk Cost:
It is the cost that is already incurred and cannot be recovered.

Marginal Costing:
Through this method only the variable cost is allocated i.e. direct materials,
direct expenses, direct labour and variable overheads to production. It does
not include the fixed cost of production.

Absorption Costing:
It is the technique to absorb the fixed and variable costs to production. In this
method, full costs i.e. fixed and variable costs are absorbed to the production.

Standard Costing:
When the costs are predetermined on certain standards in a given set of
operating conditions, it is called standard costing.

Historical Costing:
In this method the costs are determined in terms of actual costs and not
predetermined standard costs. Costs are determined only after it is incurred.
Almost all organizations adopt this method of costing.


Unit costing:
It is also called the single output costing. It is used in costing of products that
are expressed in identical units and suitable for products that are
manufactured by continuous activity.

Example: Cement manufacturing, Dairy, Mining etc.

Job costing:
Under this method, costs are ascertained for each work order separately as
each has its own specification and scope. Tailor made products also get
covered by this type of costing.
Example: Repair of buildings, Painting etc

Contract costing:
In this method costing is done for jobs that involve heavy expenditure and
stretches over long period and across different sites. It is also called as
terminal costing.

Example: Construction of roads and bridges, buildings etc

Batch costing:

Through this method the costing is done for units that are produced in
batches that are uniform in nature and design.

Example: Pharmaceuticals

Process costing:
It is used for the products which go through different processes. Like in the
process of manufacturing cloth, different processes are involved namely
spinning, weaving and finished product. Each process gives an output that is a
finished product in itself and can be sold. That is why; process costing is used
to ascertain the cost of each stage of production.

Service or operating costing:

It is the method used for the costing of operating a service such as Public Bus,
Railways, Nursing home. It is used to ascertain the cost of a particular service.

Multiple costing:
When the output comprises different assembled parts like in televisions, cars
or electronic gadgets, cost has to be ascertained for the component as well as
the finished product. Such costing may involve different / multiple methods of

Product Costing:
Product costing methods are used to assign cost to a manufactured product.
The main costing methods available are process costing, job costing and direct
costing. Each of these methods apply to different production and decision

The main product costing methods are:

Job costing:
This is the assignment of costs to a specific manufacturing job. This method is
used when individual products or batches of products are unique, and
especially when jobs are being billed directly to customers or are likely to be
audited by customers.

Process costing:
This is the accumulation of labor, material and overhead costs across
departments or entities, with the total production cost then being allocated
to individual units. Process costing is used when large quantities of the same
product are manufactured, usually in long production runs.

Inventory Costing:
Different inventory costing methods are best suited to different situations
and financial goals.

First In, First Out

Under the First In, First Out (FIFO) method, the oldest costs are assigned to
inventory items sold, regardless of whether the sold items were actually
purchased at that cost. When the number of inventory items purchased at the
oldest cost is sold, the next oldest cost is assigned to sales.

Last In, First Out

The last in, first out method (LIFO) is the exact opposite of the FIFO method,
assigning the most recent inventory costs to items sold

Average Cost Method

The average cost method assigns inventory costs by calculating a moving

average of all inventory purchase costs.

Specific Identification Method

The specific identification method perfectly matches inventory costs with

units sold, assigning the exact cost of each sold inventory item when the
specific item is sold.



There are two conventional costing approaches used in manufacturing,
namely process and job order costing. Process costing method analyzes the
net cost of a manufacturing process. Since most manufacturing processes
involve more than one step, calculation is made for each step to arrive at a
unit cost average for the entire production system.

The second major costing method, job-order costing, involves costing based
on an individual product basis. This is useful where each unit of production is
customized or where there are very few units produced. Under this method,
the exact costs incurred in the production of a particular unit are calculated
and are not necessarily averaged with those of any other unit, since every unit
may be different.

Activity-based costing (ABC) is a secondary / somewhat complementary
method to the two traditional costing techniques.

While traditional methods classify costs into categories like direct materials,
labor and other overheads, ABC considers all the costs associated with a
single manufacturing task, regardless of whether they fall under the headings
of labor or materials or something else.
The benefit of this method is that management can keep track of tasks that
cost the most versus which add the most value; indicating any
disproportionate amount of money being spent on low-value activities,
thereby indicating the need for process change.

Steps for Performing ABC:

Analyze the Activities

Gather all the Costs

Trace Costs to the Activities

Set up Output Measures

Analyze the Costs

Features of ABC:

Indicates High Cost activities

Helps in establishing and monitoring performance measures

Is useful for forecasting financial baselines

Captures the current cost of performing any activity

Balance Sheet of Ambuja Cements Ltd.

AS ON 31-12-2005 TO 31-12-2017

y Year 3/31/2017 3/31/2016 3/31/2015 3/31/2014

12 Month 12 Month 12 Month 12 Month

Book Value / 100.59 96.06 66.41 65.19

Share (unadj)
Capital Work In 397 320.02 414.12 690.17
Net Block 5721 5978.65 6092.03 6227.11
Reserves 19576 18676.4 9996.49 9793.38
EQ Capital 397.13 397.13 310.38 309.949
Working Capital 2033 -98.02 1607.33 1042.47
Shareholder's 19973 19073.6 10306.9 10103.3
Total Debt 24 36.81 32.74 29.15
Current 4827 4364.99 3989.1 3902.8
Total Liablities 4851 4401.8 4021.84 3931.95
Cash & Bank 3497.07 1412.87 2848.39 2458.12
Total Assets 24825 23475.4 14328.7 14035.3
Capital 19997 19110.4 10339.6 10132.5
Current Assets 6860 4266.97 5596.43 4945.27

Balance Sheet of Ambuja Cements Ltd.
AS ON 31-12-2005 TO 31-12-2017
3/31/2017 12 mths

Book Value / Share (unadj)

6%0%5% Capital Work In Progress

18% 17% Net Block

1% Reserves
EQ Capital Shareholdings
22% 18% Working Capital
3%4%4% Shareholder's Funds
Total Debt
Current Liablities

Chart Title

Balance Sheet of Ambuja Cements Ltd. AS ON 31-12-2005 TO 31-12-2017 3/31/2017 12 mths

Balance Sheet of Ambuja Cements Ltd. AS ON 31-12-2005 TO 31-12-2017 3/31/2016 12 mths
Balance Sheet of Ambuja Cements Ltd. AS ON 31-12-2005 TO 31-12-2017 3/31/2015 12 mths
Balance Sheet of Ambuja Cements Ltd. AS ON 31-12-2005 TO 31-12-2017 3/31/2014 12 mths

Balance Sheet of UltraTech Cement LTD
AS ON-31-03-2008 TO 31-03-2018
Year 3/31/2017 3/31/2016 3/31/2015 3/31/2014

12 Months 12 Months 12 Months 12 Months

Sources Of Funds
Total Share Capital 274.51 274.43 274.4 274.24
Equity Share Capital 274.51 274.43 274.4 274.24
Reserves 24,117.38 21,671.20 18,766.78 16,907.66
Networth 24,391.89 21,945.63 19,041.18 17,181.90
Secured Loans 2,545.77 2,947.93 3,019.07 2,449.63
Unsecured Loans 4,904.25 4,424.45 4,537.52 4,555.69
Total Debt 7,450.02 7,372.38 7,556.59 7,005.32
Minority Interest 9.71 15.45 18.19 16.64
Total Liabilities 31,851.62 29,333.46 26,615.96 24,203.86
Application of Fund
Gross Block 28,428.88 26,575.40 34,797.31 27,763.69
Less: Accum.
Depreciation 2,525.13 1,265.99 11,454.46 9,663.99
Net Block 25,903.75 25,309.41 23,342.85 18,099.70
Capital Work in
Progress 921.48 1,469.09 2,250.01 2,177.89
Investments 6,690.51 5,095.18 4,500.02 4,861.85
Inventories 2,400.64 2,454.58 2,949.12 2,580.35
Sundry Debtors 1,757.09 1,928.21 1,658.82 1,632.06
Cash and Bank
Balance 2,248.78 2,266.96 392.58 348.49
Total Current Assets 6,406.51 6,649.75 5,000.52 4,560.90
Loans and Advances 2,296.65 2,679.87 2,969.65 2,492.45
Total CA, Loans &
Advances 8,703.16 9,329.62 7,970.17 7,053.35
Current Liabilities 9,909.42 11,431.09 10,123.67 6,994.69
Provisions 457.86 438.75 1,323.42 994.24
Total CL & Provisions 10,367.28 11,869.84 11,447.09 7,988.93
Net Current Assets -1,664.12 -2,540.22 -3,476.92 -935.58
Total Assets 31,851.62 29,333.46 26,615.96 24,203.86

Contingent Liability 3,821.94 3,612.79 4,865.63 3,309.79

Book Value (Rs) 888.57 799.68 693.91 626.52
Balance Sheet of UltraTech Cement LTD AS ON-31-
03-2008 TO 31-03-2018 3/31/2017 12 mths

Sources Of Funds
13% 2%
Total Share Capital
4% 10%
4% 1%
2% Equity Share Capital
4% 3%
3% Reserves
1% 13%
0% Networth
11% 1% 12%
Secured Loans
Unsecured Loans
Total Debt
Minority Interest

Chart Title
Cash and Bank…

Total CL &…
Less: Accum.…

Capital Work in…

Total Current…

Total CA, Loans &…

Application Of…
Unsecured Loans

Total Assets

Loans and Advances

Equity Share Capital

Total Liabilities

Net Block

Sundry Debtors
Total Share Capital


Net Current Assets


Gross Block

Total Debt


Current Liabilities
Secured Loans

Minority Interest

Book Value (Rs)

Sources Of Funds


Balance Sheet of UltraTech Cement LTD AS ON-31-03-2008 TO 31-03-2018 3/31/2014 12 mths

Balance Sheet of UltraTech Cement LTD AS ON-31-03-2008 TO 31-03-2018 3/31/2015 12 mths
Balance Sheet of UltraTech Cement LTD AS ON-31-03-2008 TO 31-03-2018 3/31/2016 12 mths
Balance Sheet of UltraTech Cement LTD AS ON-31-03-2008 TO 31-03-2018 3/31/2017 12 mths

Comparison of Ambuja Cement and Ultra Tech Cement:
Ambuja Cement
Ambuja Cements Ltd. (ACL) is one of the leading cement manufacturing
companies in India and commenced cement production in 1986. Initially
called Gujarat Ambuja Cements Ltd, the Company later became Ambuja
Cements Ltd. In 2006, global cement major Holcim, acquired management
control of the Company. Today, Holcim holds a little over 50% equity in ACL.

UltraTech Cement
UltraTech Cement was incorporated in 2000 as Larsen & Toubro Cement.
Later it was demerged and acquired by Grasim and was renamed as UltraTech
Cement in 2004. Today UltraTech Cement, an Aditya Birla Group Company
and a 60.3% subsidiary of Grasim, is the largest domestic cement player in the
country and the 8th largest in the world.


P/E (TTM) x 57.1 20.8 274.20%
P/BV x 4.1 2.1 198.90%
Dividend Yield % 0.3 1.7 15.90%

18-Mar 17-Dec
High Rs 4,594 291 1577.20%
Low Rs 3,774 209 1810.10%
Sales per share
Rs 1,143.80 118.8 962.60%
Earnings per share
Rs 81 9.8 827.20%
Cash flow per share
Rs 148.3 15.9 930.70%
Dividends per share
Rs 10.5 3.6 291.70%
Dividend yield (eoy) % 0.3 1.4 17.40%
Book value per share
Rs 960.7 104.1 922.90%
Shares outstanding 1,985.9
m 274.61 13.80%
(eoy) 7
- - -
Price / Sales ratio x 3.7 2.1 173.90%
Avg P/E ratio x 51.7 25.5 202.40%
P/CF ratio (eoy) x 28.2 15.7 179.90%
Price / Book Value ratio x 4.4 2.4 181.40%
Dividend payout % 13 36.8 35.30%
Rs 496,29
Avg Mkt Cap m
1,149,009 231.50%
No. of employees 0
19.7 NA -
Total wages/salary m
18,102 15,112 119.80%
Avg. sales/employee Th
15,960.00 NM -
Avg. wages/employee Th
919.8 NM -
Avg. net Rs
1,130.30 NM -

Net Sales Rs m 314,108 235,984 133.10%
Other income Rs m 5,837 3,226 180.90%
Total revenues Rs m 319,945 239,211 133.80%
Gross profit Rs m 57,984 38,576 150.30%
Depreciation Rs m 18,479 12,195 151.50%
Interest Rs m 12,328 2,058 599.10%
Profit before tax Rs m 33,015 27,550 119.80%
Minority Interest Rs m 0 128 0.00%
Prior Period Items Rs m 0 0 -
Extraordinary Inc (Exp) Rs m 0 0 -
Tax Rs m 10,770 8,229 130.90%
Profit after tax Rs m 22,245 19,449 114.40%
Gross profit margin % 18.5 16.3 112.90%
Effective tax rate % 32.6 29.9 109.20%
Net profit margin % 7.1 8.2 85.90%
Current assets Rs m 114,685 110,766 103.50%
Current liabilities Rs m 113,389 88,677 127.90%
Net working cap to sales % 0.4 9.4 4.40%
Current ratio x 1 1.2 81.00%
Inventory Days Days 38 38 99.90%
Debtors Days Days 26 14 179.70%
Net fixed assets Rs m 412,265 215,654 191.20%
Share capital Rs m 2,746 3,971 69.10%
"Free" reserves Rs m 261,066 202,751 128.80%
Net worth Rs m 263,812 206,722 127.60%
Long term debt Rs m 158,635 241 65768.90%
Total assets Rs m 571,577 355,004 161.00%
Interest coverage x 3.7 14.4 25.60%
Debt to equity ratio x 0.6 0 51536.40%
Sales to assets ratio x 0.5 0.7 82.70%
Return on assets % 6 6.1 99.80%
Return on equity % 8.4 9.4 89.60%
Return on capital % 10.7 14.4 74.70%

Exports to sales % 0 0 -
Imports to sales % 0 0 -
Exports (fob) Rs m NA NA -
Imports (cif) Rs m NA NA -
Fx inflow Rs m 5,273 46 11488.00%
Fx outflow Rs m 2,565 9,760 26.30%
Net fx Rs m 2,708 -9,714 -27.90%
From Operations Rs m 38,874 34,339 113.20%
From Investments Rs m 18,570 -7,788 -238.40%
From Financial Activity Rs m -57,302 -10,147 564.70%
Net Cashflow Rs m 184 16,635 1.10%
Indian Promoters % 61.7 0.8 7712.50%
Foreign collaborators % 0 50.5 -
Indian inst/Mut Fund % 5.2 9.4 55.30%
FIIs % 20.4 30.6 66.70%
ADR/GDR % 1.8 1.6 112.50%
Free float % 10.8 8 135.00%
Shareholders 293,227 179,823 163.10%

Chapter 8


 It has an operational experience of over many decades

 It is one of the leading cement manufacturers in the country.
 It has a strong revenue year on year
 Holcim, one of the world’s largest cement manufacturers has a
significant share in Ambuja Cements
 Branding activities through TVCs, online marketing etc in India make it a
prominent brand
 The company is also listed on NSE & BSE

 It exports cement to a limited number of countries, as compared to its
global competitors.
 It deals primarily with cement and concrete while many global players
manufacture other construction materials along with cement to
provide greater portfolio to the customers.
 Ambuja cements is planning to buy share from Holcim that would
strengthen the brand as a Indian Brand and It would help the brand to
grow in the country as Indian customers would psychologically relate
to the brand now.
 It can increase its global exports business by mergers and acquisitions.
 The government is promoting Manufacturing sector in India which is a
huge opportunity for Ambuja cements and other manufacturing

 It is facing strong competition from Indian and Global players in
cement sector.
 If it tries to increase its global operations, it would face tough
competition and moreover, each country has different policies that
might hamper its expansion.

Chapter 9

With the increasing changes in the industries and complexities of businesses,
costing becomes important for managements to take appropriate decisions,
planning and control and having effective cost management measures in

The foregoing study in the preceding chapters leads to many conclusions

about the cement industry working capital management but with one
caution. As already pointed out in earlier the biggest limitation of the study
had been that a large number of companies had to be left out because
cement is not their main business though they are big producers of cement.
Further, beyond data published in annual accounts no further data were
made available by any company. Therefore, detailed probe could not be made
on many aspects which has been pointed out at relevant places.

Subject to these limitations following conclusions can be drawn from the


The basic objective of working capital management is to minimise cost to the

firm whether managing cash, receivables (Sunday debtors) or inventory or
miscellaneous current assets, minimize risk to the company on receivables,
ensure just level of inventory to operate full level of capacity with minimum
inventory. It also implies that as far as possible miscellaneous current assets
should be utilised for company’s operations. In other words the working
capital management should aim to optimise production and sales with
minimum risk and cost. However, this had not been achieved by cement
industry because scientific techniques have not been utilised and

decisions have been taken on ad hoc basics. It seems from the analysis of data
of selected sample companies that in cement industry by and large there is no
proper working capital management. Every decision has been left out to
market forces without working out cost benefit analysis or applying various
formulas suggested by experts. This is very much evident from wide variations
in various ratios from company to company and in different years for the same

The cash management is very faulty as a result of which cash ratio to total
current assets and to sales are very high for the cement industry. With the
above general observations one can draw number of conclusion about the
economic health of the industry and various aspects of working capital.

The industry at present is passing through buyers phase of the market. This
state of cement industry is expected to continue in near future too because
new capacity is being created faster than growth in demand. This has increased
competition and working capital management has become more difficult. On
the one side customers have to be accommodated to compete in the market
but at the same time all possible economies must be achieved in management
of cash, receivables and inventory to maintain and improve profitability.

Chapter 10