ambuja cement annual report

7/23/2019 Ambuja Cement Annual Report

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SYMBIOSIS INSTITUTE OF BUSNIESS MANAGEMENT HYDERABAD

Assignment

Annual Report Analysis Am!u"a #ement $%&'(&)*

Submitted to:-

Prof. Venugopal Rao

Submitted By:-

Aman Singla

PRN:1402114100



+,at is an annual report-

An annual report i! a "ompre#en!i$e report on a "ompany%! a"ti$itie! t#roug#out t#e pre"eding year . Annual

report! are intended to gi$e !#are#older! and ot#er intere!ted people information about t#e "ompany%! a"ti$itie!and finan"ial performan"e. &#ey may be "on!idered a! grey literature. 'o!t (uri!di"tion! re)uire "ompanie! to

prepare and di!"lo!e annual report!* and many re)uire t#e annual report to be filed at t#e "ompany%! regi!try.

+ompanie! li!ted on a !to", e"#ange are al!o re)uired to report at more fre)uent inter$al!.

T,ings to loo. out /or in an annual report 0

• eneral +orporate /nformation

• A""ounting poli"ie!

• Balan"e !#eet

• +a!# flo !tatement

•

+ontent!: non-audited information• Profit and lo!! a""ount

• Note! to t#e finan"ial !tatement!

• +#airper!on! !tatement

• ire"tor%! Report

• perating and finan"ial re$ie

• t#er feature!

• Auditor! report



ANNUA1 RE2ORT 3 Am!u"a #ements $%&'(&)*

&* FIRM4S 2RODU#TS

&3PS 5 PR6+&S

7ig# !trengt# "ement

ynami" emand

-ome!ti" "ement "on!umption in /ndia on an uptrend

-&o meet t#e ri!e in demand* "ement "ompanie! are epe"ted to add 89 million tonne! '&; "apa"ity o$er t#e net

t#ree year!.

Pri"ing Poer

&#e "ompany doe! en(oy! t#e pri"ing poer

Pri"ing depend! upon t#e pri"e < "o!t !tru"ture of "ompetitor! li,e 6ltrate"# and =, >ami.

Sub!titute!

- a"# and e$ery produ"t #a! a !ub!titute

- 6ltrate"# "ement!* "#ettinad* (, lumi* india "ement produ"t! are it! ma(or !ub!titute!

- Pri"e and )uality of !imilar produ"t! i! almo!t t#e !ame among!t t#e "ompetitor!.

$* Te5,nology

Produ"tion Pro"e!!

A to-!tep pro"e!!

Ba!i"ally* "ement i! produ"ed in to !tep!: fir!t* "lin,er i! produ"ed from ra material!. /n t#e !e"ond

!tep "ement i! produ"ed from "ement "lin,er. &#e fir!t !tep "an be a dry* et* !emi-dry or !emi-et

pro"e!! a""ording to t#e !tate of t#e ra material.

'a,ing "lin,er

&#e ra material! are deli$ered in bul,* "ru!#ed and #omogeni!ed into a miture #i"# i! fed into arotary ,iln. &#i! i! an enormou! rotating pipe of 90 to ?0 m long and up to 9 m in diameter. &#i! #uge ,iln

i! #eated by a 2000@+ flame in!ide of it. &#e ,iln i! !lig#tly in"lined to allo for t#e material! to !loly

rea"# t#e ot#er end* #ere it i! )ui",ly "ooled to 100-200@+.

5our ba!i" oide! in t#e "orre"t proportion! ma,e "ement "lin,er: "al"ium oide 98;* !ili"on oide

20;* alumina oide 10; and iron oide 8;. &#e!e element! mied #omogeneou!ly "alled ra

mealC or !lurry; ill "ombine #en #eated by t#e flame at a temperature of approimately 1480@+. Ne



"ompound! are formed: !ili"ate!* aluminate! and ferrite! of "al"ium. 7ydrauli" #ardening of "ement i!

due to t#e #ydration of t#e!e "ompound!.

&#e final produ"t of t#i! p#a!e i! "alled "lin,erC. &#e!e !olid grain! are t#en !tored in #uge !ilo!. nd of

p#a!e one.

From 5lin.er to 5ement

&#e !e"ond p#a!e i! #andled in a "ement grinding mill* #i"# may be lo"ated in a different pla"e to t#e

"lin,er plant. yp!um "al"ium !ulp#ate!; and po!!ibly additional "ementitiou! !u"# a! bla!tfurna"e

!lag* "oal fly a!#* natural poDDolana!* et".; or inert material! lime!tone; are added to t#e "lin,er. All

"on!tituent! are ground leading to a fine and #omogenou! poder. nd of p#a!e to. &#e "ement i! t#en

!tored in !ilo! before being di!pat"#ed eit#er in bul, or bagged.

i!tribution +#annel

• +ement i! largely a regional produ"t E manufa"tured and !old in a region E a!tran!porting it o$er long di!tan"e! i! not po!!ible due to t#e nature of t#e produ"t;.

&ran!portation i! a ma(or "o!t element for "ement "ompanie! around 20-28 of !ale!;*

often a bigger line item t#an net profit!.

+o!t !tru"ture

• +o!t of manufa"turing "ement #a! ri!en o$er t#e year!* t#an,! to #ig#er "o!t! of fuel and

finan"ing* and #ig# tae!.

•

5ied "o!t! in t#e "ement indu!try are parti"ularly #ig# and !ignifi"ant relati$e to $ariable"o!t!. 5ied "o!t! generally a""ount for more t#an 80 of t#e o$erall produ"tion "o!t!.

&#e fied "o!t! are u!ually !un, "o!t!. n"e built* a "ement plant "an !er$e no ot#er

purpo!e. A! fied "o!t! are #ig# it# re!pe"t to t#e $ariable "o!t!* t#e brea,-e$en point i!

#ig#. Fit# automation* labor "o!t! #a$e de"rea!ed* but energy "on!umption i! a more

!ignifi"ant $ariable "o!t. &#u!* profit! in t#e indu!try are !en!iti$e to t#e le$el of

utiliDation of t#e produ"tion "apa"ity. Signifi"ant "a!# flo! are generated only #en

produ"t in"rea!e! beyond t#e brea,-e$en point* #i"# depend! on t#e effi"ien"y of t#e

plant.

Supplier netor, and #o t#e !upply "#ain operate!.

• $er t#e year!* t#e indu!try #a! be"ome more organiDed and !tru"tured* and a$erage !iDe

of player! #a! in"rea!ed. roing !"ale* "oupled it# impro$ement in manufa"turing

te"#nology* #a! led to !ignifi"ant "o!t effi"ien"ie! a! ell.

• Supply !ide bottlene",! #a$e al!o inten!ified.



6* 7no8 t,e 5ompetiti9e o/ t,e in:ustry

a. +on"entration in t#e indu!try* t#e number of firm! and t#eir !iDe!.

• /ndia i! t#e !e"ond large!t produ"er of "ement in t#e orld.

• &#e /ndian "ement indu!try i! dominated by a fe "ompanie!. &#e top 20 "ement

"ompanie! a""ount for almo!t 0 per "ent of t#e total "ement produ"tion of t#e

"ountry. A total of 1GG large "ement plant! toget#er a""ount for ? per "ent of t#e

total in!talled "apa"ity in t#e "ountry* it# H98 !mall plant! a""ount for t#e re!t. f

t#e!e large "ement plant!* are lo"ated in t#e !tate! of And#ra Prade!#* Ra(a!t#an

and &amil Nadu.

b. Barrier to entry

• Sin"e a ma(or per"entage of mar,et !#are i! "o$ered by top mo!t "ement "ompanie!*

barrier for entry i! #ig# in t#i! indu!try.

• 7ig# +apital re)uired !in"e "o!t for !etting up #ole ne "ement produ"ing plant i!

$ery #ig#.

•

>imited ra material !our"e!lime!tone and gyp!um; and tou"# go$ernment"learan"e al!o re!tri"t ne "ompetition

". +ompetiti$ene!! of !upplier!.

• +ompetition i! etremely #ig# for /ndian +ement /ndu!try.

• /n /ndian +ement indu!try Supplier #a! t#e mar,et poer due rapidly in"rea!ing

mar,et demand for t#e produ"t.

d. +apa"ity in t#e indu!try.

• /ndia%! "ement demand i! epe"ted to rea"# 880-900 million tonne! per annum

'&PA; by 2028.

• &#e #ou!ing !e"tor i! t#e bigge!t demand dri$er of "ement* a""ounting for about 9

per "ent of t#e total "on!umption in /ndia.

•&#e ot#er ma(or "on!umer! of "ement in"lude infra!tru"ture at 1H per "ent*"ommer"ial "on!tru"tion at 11 per "ent and indu!trial "on!tru"tion at nine per "ent.

• &o meet t#e ri!e in demand* "ement "ompanie! are epe"ted to add 89 million tonne!

'&; "apa"ity o$er t#e net t#ree year!.

• &#e "ement "apa"ity in /ndia may regi!ter a grot# of eig#t per "ent by net year end

to H?8 '& from t#e "urrent le$el of H99 '&. /t may in"rea!e furt#er to 421 '& by

t#e end of 201.

• &#e "ountry%! per "apita "on!umption !tand! at around 1?0 ,g.



'* 7no8 t,e Management

No manager! #a$e a propen!ity to $iolate t#e et#i"al "#arter under #i"# t#e firm operate!

be"au!e t#e Board periodi"ally re$ie! +omplian"e report! of all la! appli"able to t#e +ompany

and t#e !tep! ta,en by t#e +ompany to re"tify in!tan"e! of non-"omplian"e!* if any. uring t#e

year* t#e +ompany #a! implemented a eb ba!ed legal "omplian"e tool "alled +omplian"e

'anagerC de$eloped by rn!t I 3oung 3;* it# a $ie to fo!ter an impro$ed "omplian"ereporting and monitoring in t#e +ompany. 5urt#er* legal ri!,! are mitigated t#roug# regular

re$ie of "#ange! in t#e regulatory frameor, to en!ure "omplian"e it# all t#e appli"able

!tatute!. &#e Board i! al!o !ati!fied t#at plan! are in pla"e for orderly !u""e!!ion for appointment!

to t#e Board and to !enior management.

a. F#at i! t#e !trengt# of "orporate go$ernan"e me"#ani!m!J

+orporate o$ernan"e i! an integral part of $alue!* et#i"! and be!t bu!ine!! pra"ti"e! folloed by

t#e +ompany. &#e "ore $alue! of t#e +ompany are:

• "ommitment to e"ellen"e and "u!tomer !ati!fa"tion

• maimiDing long term !#are#older!K $alue

•

!o"ially $alued enterpri!e and• "aring for people and en$ironment.

&#e +ompany #a! in pla"e a +ode of +orporate t#i"! and +ondu"t reiterating it! "ommitment to

maintain t#e #ig#e!t !tandard! in it! interfa"e it# !ta,e#older! and "learly laying don t#e "ore

$alue! and "orporate et#i"! to be pra"ti"ed by it! entire management "adre.

)* 7no8 t,e 2oliti5al; legal ;regulatory an: et,i5al en9ironment<

a. &aation for t#e bu!ine!!

• &#e finan"ial !tatement! are prepared in a""ordan"e it# t#e /ndian enerally

A""epted A""ounting Prin"iple! AAP;. AAP "ompri!e! mandatory

a""ounting !tandard! !pe"ified under !e"tion 1HH of t#e +ompanie! A"t 201H

t#e A"t;

• read it# Rule of t#e +ompanie! A""ount!; Rule 2014 and t#e rele$ant

pro$i!ion! of t#e A"t.

• +urrent &a i! t#e amount of ta payable on t#e e!timated taable in"ome for t#e

"urrent year a! per t#e pro$i!ion! of /n"ome &a A"t* 1?91.

ambuja cement annual report

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