(credit assessment)

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A

Summer Internship Project ReportOn

Credit Assessment

(ACC Concrete)

In the partial fulfilment of the Degree of

Master of Management Studies (Finance)

Under The University of Mumbai

By

Mr. Sarankulu Naresh Eranna

MMS A, Roll No: 54

Specialization: Finance

Batch: 2013 -15

Under the Guidance of

Mr. Pernundu Dey

(Area finance head)

Mr. Balvinder Singh Reel

(Associate Professor)

Guru Nanak Institute of Management Studies and Research

Matunga, Mumbai-400019

2013 - 2015


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Faculty (Mentor / Guide Student

Summer Internship Progress Report

Name of the Student Sarankulu Naresh Eranna

Class & Roll No MMS-A54 Academic Year 2013-15

Title of the Project Credit Assessment and Evaluation and reducing DSO

Company ACC Concrete

Start

Date 2

nd

may 2014

Name of Company Guide & Designation Pernundu Dey (Area finance head)

Week Activities LearningsPlan for Next

Week

Mentors

Comment

1

(As on 09-May-

2014)

Knowing the

company and its

business

Basics of

the

company

Knowing about

the companies

clients

2

(As on 16-May-

2014)

Knowing the

company and its

business

Basics of

the

company

About the credit

Assessment

3(As on 23-May-2014)

About the creditAssessment

Knowingaboutclients

profile

Properdocumentationand filing of

clients profile

4

(As on 30-May-

2014)

Proper

documentation

and filing ofclients profile.

properly

filing of

clientsdocuments

Billing procedure

5

(As on 06-June-

2014)

Billing procedureHow to

make bills.

Inspection about

the bills in plant

6(As on 13-June-

2014)

Inspection about

the bills in plant

To knowabout the

delays ofthe billing

Evaluation of

module.

7

(As on 20-June-2014)

Evaluation of

module

To know

about the

clients

worthiness

Recommendation

8(As on 30-June-

2014)

RecommendationPresentationon the

topics

End of the

training


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DECLARATION BY THE STUDENT

I Naresh Eranna Sarankulu, hereby declare that the project work entitled Credit

Assessment and credit control and reducing collection period has been submitted during

the academic year 2013 2015 under the creative guidance and supervision of Prof.

Balvinder Singh Reel.

Further I extend my declaration that this report is result of my original work and data

acquired.

Thanking you,

Sarankulu Naresh Eranna Mentors

SignatureMMS- A; A54 Prof. Balvinder Singh Reel

\


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ACKNOWLEDGEMENT

I take this opportunity to extend my sincere thanks to GNIMS, Mumbai and ACC Concrete Ltd.

for offering a unique platform to earn exposure and garner knowledge in cement industry.

During the span of the project period, it was my great fortune to get inducted into Credit Control

department, ACC Concrete Ltd. I am especially thankful to my guide Mr. Purnendu Dey,

Regional Credit Controller, Mumbai Area Office, ACC Concrete Ltd. for his kind support

and guidance; he has been extending me throughout the project. I also express my sincere thanks

to Mr. Anurag Yadav, Area Marketing Head for constant encouragement and support at each

stage of project. I was fortunate to get Mr. Sameer Raul for helping me with all the informationand data required for successful completion of project.

I want to convey my sincere thanks to my college guide Mr., Balvinder Singh ReelProfessor, GNIMS, who has been guiding me throughout my project. He was there to help me

out whenever and wherever I needed.

Last but not the least I would like to express my profound gratitude to each and every employee

of the organization who contributed in their own ways in successful completion of this project.


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Sr. No.Chapters

Page No

1 EXECUTIVE SUMMARY 1-2

2 INTRODUCTION

2.1 Credit assessment 3

2.2 DSO Calculation 4-63 SECTOR INFORMATION

3.1 About Cement Industry before and after 18 century 7-12

4 COMPANY INFORMATION

4.1 Company Profile 13-14

4.2 Major Milestones: 15-16

4.3 About Accs RMC Business 17-18

4.4 ACC ConcreteA Wide Range 19

4.5 ACC Concrete Vision And Mission 20

5 METHODOLOGY

5.1 Introduction of the study 21

5.2 Literature Review 22

5.3 Background of the study 23

5.4 problem statement 23-24

5.5 Objective of the study 25

5.6 Hypothesis 25

6 RESEARCH METHODOLOGY

6.1 Sources of data 26

6.2 Data collection instrument 26

7 DATA ANALYSIS AND INTERPRETATION 27-29

8 RESULT AND FINDINGS 30-349 CONCLUSION 35-36

10 BIBLOGRAPHY 37

11 ANNEXURE 38-39


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Chapter 1EXECUTIVE SUMMARY


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This project is an in depth research about receivables management, average collection

period, credit assessment and credit evaluation of ACC Concrete Ltd. The prime

objective of the report is to develop a model to evaluate the clients of the company

and ascertain a credit limit. The project is included as part of MBA Program and the

project is done from 5th May to 30th June.

The study draws attention to the fact that the current average collection period for

ACC is increasing over the period of 6 to 7 months, which according to the industry

average is very high. This directly and indirectly reflects on the company as well as

the creditors of the company by increasing the average payment period to operate at a

low working capital.

After data collection regarding client transaction, invoice tracker, etc. it was analyzed

with different charts and graph, which is very important to find observation and

findings. On the basis of this work, suggestions were made which were very helpfulfor analyzing project report and apparently a model was developed.

It was observed that the delay in receivables was mainly because of the market

scenario of the real estate industry which is more or less stagnant from past couple of

years which has reduced either the sales of the real estate developers or has increased

their receivables.

To regulate the average collection period and delays regarding the credit period

certain internal and external factors were considered and accordingly the scope of

improvement was suggested for ACC.

Here are some actions that were suggested for improvement:

Focus on top 30 clients who account for 87% of the revenue. Convert complete billing process to work electronically. Form a follow up team in synchronization with the marketing team and credit

control team.

Offer discounts for early payments on outstanding invoices.


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Chapter2

Introduction to the Credit Assessment


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Credit analysis is the method by which one calculates the creditworthiness of a businessor organization. In other words, it is the evaluation of the ability of a company to honor

its financial obligations. The audited financial statements of a large company might be

analyzed when it issues or has issued bonds. Or, a bank may analyze the financialstatements of a small business before making or renewing a commercial loan. The term

refers to either case, whether the business is large or small.

The objective of credit analysis is to look at both the borrower and the lending facility

being proposed and to assign a risk rating. The risk rating is derived by estimating the

probability of default by the borrower at a given confidence level over the life of thefacility, and by estimating the amount of loss that the lender would suffer in the event of

default

Credit analysis involves a wide variety of financial analysis techniques, including ratio

and trend analysis as well as the creation of projections and a detailed analysis of cashflows. Credit analysis also includes an examination of collateral and other sources of

repayment as well as credit history and management ability. Analysts attempt to predictthe probability that a borrower will default on its debts, and also the severity of losses in

the event of default. Credit spreadsthe difference in interest rates between theoretically

"risk-free" investments such as U.S. treasuries or LIBOR and investments that carry somerisk of defaultreflect credit analysis by financial market participants.

O Credit analysis is a systematic and continuous procedure, which is carried out inorder to evaluate the credit worthiness of debtor.

O Here the words systematic and continuous are important, hence highlighted.O

If the process is not conducted or followed in a systematic manner it can createerrors.O Credit analysis procedure should be continuous in nature. Credit rating of client

can change over a period of time.


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DSO calculation

In accountancy, days sales outstanding (also called DSO and days receivables) is a

calculation used by a company to estimate their average collection period. It is a financial

ratio that illustrates how well a company's account receivables are being managed. The

days sales outstanding figure is an index of the relationship between outstandingreceivables and credit account sales achieved over a given period.

Typically, days sale outstanding is calculated monthly. The days sales outstanding

analysis provides general information about the number of days on average that

customers take to pay invoices. Generally speaking, though, higher DSO ratio canindicate a customer base with credit problems and/or a company that is deficient in its

collections activity.A low ratio may indicate the firm's credit policy is too rigorous,

which may be hampering sales.

Days sales outstanding are considered an important tool in measuring liquidity. Days

sales outstanding tend to increase as a company becomes less risk averse. Higher dayssales outstanding can also be an indication of inadequate analysis of applicants for openaccount credit terms. An increase in DSO can result in cash flow problems, and may

result in a decision to increase the creditor company's bad debt reserve.

A DSO ratio can be expressed as:

DSO ratio = accounts receivable / average sales per day, or

DSO ratio = accounts receivable / (annual sales / 365 days)

For purposes of this ratio, a year is considered to have 365 days.

Days sales outstanding can vary from month to month, and over the course of a year witha company's seasonal business cycle. Of interest when analyzing the performance of a

company is the trend in DSO. If DSO is getting longer, customers are taking longer to

pay their bills, which may be a warning that customers are dissatisfied with thecompany's product or service, or that sales are being made to customers that are less

credit-worthy, or that salespeople have to offer longer payment terms in order to generate

sales. Many financial reports will state Receivable turnover defined as Net Credit

Account Sales / Trade Receivables; divide this value into the time period in days to getDSO.


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However, dayssales outstanding are not the most accurate indication of the efficiency of

accounts receivable department. Changes in sales volume influence the outcome of the

days sales outstanding calculation. For example, even if the overdue balance stays thesame, an increase of sales can result in a lower DSO. A better way to measure the

performance of credit and collection function is by looking at the total overdue balance in

proportion of the total accounts receivable balance (total AR = Current + Overdue),which is sometimes calculated using the days delinquent sales outstanding (DDSO)formula.


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Chapter 3Sector Information


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Cement is a binder, a substance that sets and hardens as the cement dries and also reacts

with carbon dioxide in the air dependently, and can bind other materials together. The

word "cement" traces to the Romans, who used the term opus caementiciumto describemasonry resembling modern concrete that was made from crushed rock with

burnt lime as binder. The volcanic ash and pulverized brick additives that were added tothe burnt lime to obtain a hydraulic binder were later referred to ascement.

Cements used in construction can be characterized as being either hydraulic or non-hydraulic, depending upon the ability of the cement to be used in the presence of water

(see hydraulic and non-hydraulic lime plaster).

Non-hydraulic cement will not set in wet conditions or underwater, and is attacked by

some aggressive chemicals after setting.

Hydraulic cement is made by replacing some of the cement in a concrete mix with

activated aluminum silicates, pozzolanas, such as fly ash, to activate cement setting inwet condition or underwater and further protects hardened concrete from chemical attack

(e.g.,Portland cement).

The chemical process for hydraulic cement found by ancient Romans used volcanic ash

(activated aluminum silicates), to activate cement hardening betweenthe anhydrous cement powder and water or plaster and water instead of relying on water

drying out and simultaneously reacting with airborne carbon dioxide.

Presently cheaper, pollution free fly ash from power stations or other waste or by

products is used as pozzolanas with plain cement to produce hydraulic cement.Pozzolanas can replace up to 40% of Portland cement.

Thus, cement can harden underwater or when constantly exposed to wet weather. The

chemical reaction results in hydrates that are not very water-soluble and so are quitedurable in water and from chemical attack. Non-hydraulic cements and plasters do notharden in wet conditions.

The most important uses of cement are as an ingredient in the production of mortar in

masonry, and of concrete, a combination of cement and an aggregate to form a strong

building material.

Cements before the 18th century

An early version of cement made with lime, sand, and gravel was used in Mesopotamia

in the third millennium B.C. and later in Egypt. It is uncertain where it was firstdiscovered that a combination of hydrated non-hydraulic lime and a pozzolan produces a

hydraulic mixture (see also: Pozzolanic reaction), but concrete made from such mixtures

was first used by the Ancient Macedonians and three centuries later on a large scale

by Roman engineers.


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They used both natural pozzolans (trass or pumice) and artificial pozzolans (ground brickor pottery) in these concretes. Many excellent examples of structures made from these

concretes are still standing, notably the huge dome of the Pantheon in Rome and the

massive Baths of Caracalla.

[7]

The vast system of Roman aqueducts also made extensiveuse of hydraulic cement. Although any preservation of this knowledge in literary sources

from the middle Ages is unknown, medieval masons and some military engineers

maintained an active tradition of using hydraulic cement in structures such

as canals, fortresses, harbors, and shipbuilding facilities. This technical knowledge ofmaking hydraulic cement was later formalized by French and British engineers in the

18th century.

Cements in the 18th, 19th, and 20th centuries

John Smeaton made an important contribution to the development of cements when he

was planning the construction of the third Eddy stone Lighthouse (17559) in the EnglishChannel now known as Smeaton's Tower. He needed a hydraulic mortar that would set

and develop some strength in the twelve hour period between successive high tides. He

performed experiments with combinations of different limestones and additivesincluding trass and pozzolanas and did exhaustive market research on the available

hydraulic limes, visiting their production sites, and noted that the "hydraulicity" of the

lime was directly related to the clay content of the limestone from which it was made

Smeaton was a civil by profession, and took the idea no further.
http://en.wikipedia.org/wiki/Cement#cite_note-7http://en.wikipedia.org/wiki/Cement#cite_note-7http://en.wikipedia.org/wiki/Cement#cite_note-7http://en.wikipedia.org/wiki/Cement#cite_note-7


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In Britain particularly, good quality building stone became ever more expensive during a

period of rapid growth, and it became a common practice to construct prestige buildings

from the new industrial bricks, and to finish them with a stucco to imitate stone.Hydraulic limes were favored for this, but the need for a fast set time encouraged the

development of new cements. Most famous was Parker's "Roman cement. This was

developed by James Parker in the 1780s, and finally patented in 1796. It was, in fact,nothing like material used by the Romans, but was natural cement" made byburning septaria nodules that are found in certain clay deposits, and that contain

both clay minerals and calcium carbonate. The burnt nodules were ground to a fine

powder. This product, made into a mortar with sand, set in 515 minutes. The success of"Roman cement" led other manufacturers to develop rival products by burning

artificial hydraulic lime cements of clay and chalk. Roman cement quickly became

popular but was largely replaced by Portland cement in the 1850s.

In Russia, Egor Cheliev created a new binder by mixing lime and clay. His results were

published in 1822 in his bookA Treatise on the Art to Prepare a Good Mortarpublishedin St. Petersburg. A few years later in 1825, he published another book, which described

the various methods of making cement and concrete, as well as the benefits of cement inthe construction of buildings and embankments.

Apparently unaware of Smeaton's work, the same principle was identified byFrenchman Louis Vicar in the first decade of the nineteenth century. Vicar went on to

devise a method of combining chalk and clay into an intimate mixture, and, burning this,

produced an "artificial cement" in 1817 considered the "principle forerunner of Portlandcement and "...Edgar Dobbs of Southward patented a cement of this kind in 1811

James Frost,[working in Britain, produced what he called "British cement" in a similar

manner around the same time, but did not obtain a patent until 1822. In 1824, Joseph

Aspdin patented a similar material, which he calledPortland cement, because the render

made from it was in color similar to the prestigious Portland stone. However, Aspdins'cement was nothing like modern Portland cement but was a first step in its development,

called proto-Portland cement. Joseph Aspdins' son William Aspdin had left his fathers

company and in his cement manufacturing apparently accidentally produced calciumsilicates in the 1840s, a middle step in the development of Portland cement. William

Aspdin's innovation was counterintuitive for manufacturers of "artificial cements",

because they required more lime in the mix (a problem for his father), a much higher kilntemperature (and therefore more fuel), and the resulting clinker was very hard and rapidly

wore down the millstones, which were the only available grinding technology of the time.

Manufacturing costs were therefore considerably higher, but the product set reasonably

slowly and developed strength quickly, thus opening up a market for use in concrete. The

use of concrete in construction grew rapidly from 1850 onward, and was soon thedominant use for cements. Thus Portland cement began its predominant role.

Isaac Charles Johnson further refined the production of meso-Portland cement(middle

stage of development) and claimed to be the real father of Portland cement.

Setting time and "early strength" are important characteristics of cements. Hydrauliclimes, "natural" cements, and "artificial" cements all rely upon their belite content

for strength development. Belite develops strength slowly. Because they were burned at


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Chapter 4

Company Profile


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Year of establishment: 1936

Shareholder pattern:

Figure1 Shareholder pattern

Holder's Name No of Shares % Share Holding

Promoters 93888120 50.01%

Foreign Institutions 37035581 19.73%

General Public 23834380 12.70%

Financial Institutions 17818906 9.49%

Other Companies 6851404 3.65%

Banks Mutual Funds 5947011 3.17%

Foreign NRI 772515 0.41%

Others 767724 0.41%

Foreign Promoter 541000 0.29%

Central Govt 287815 0.15%

Foreign Industries 900 0%

ACC (ACC Limited) is India's foremost manufacturer of cement and concrete. ACC's operations

are spread throughout the country with 17 modern cement factories, more than 40 Ready mix

concrete plants, 21 sales offices, and several zonal offices. It has a workforce of about 9,000

persons and a countrywide distribution network of over 9,000 dealers.

Since inception in 1936, the company has been a trendsetter and important benchmark for the

cement industry in many areas of cement and concrete technology. ACC has a unique track

record of innovative research, product development and specialized consultancy services. The

company's various manufacturing units are backed by a central technology support services

centre - the only one of its kind in the Indian cement industry.


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ACC has rich experience in mining, being the largest user of limestone. As the largest cement

producer in India, it is one of the biggest customers of the domestic coal industry, of Indian

Railways, and a considerable user of the countrys road transport network services for inward and

outward movement of materials and products.

Among the first companies in India to include commitment to environmental protection as one of

its corporate objectives, the company installed sophisticated pollution control equipment as far

back as 1966, long before pollution control laws came into existence. Today each of its cement

plants has state-of-the art pollution control equipment and devices.

ACC plants, mines and townships visibly demonstrate successful Endeavours in quarry

rehabilitation, water management techniques and greening activities. The company actively

promotes the use of alternative fuels and raw materials and offers total solutions for waste

management including testing, suggestions for reuse, recycling and co-processing.

ACC has taken purposeful steps in knowledge building. We run two institutes that offer

professional technical courses for engineering graduates and diploma holders which are relevant

to manufacturing sectors such as cement. The main beneficiaries are youth from remote and

backward areas of the country.

ACC has made significant contributions to the nation building process by way of quality

products, services and sharing expertise. Its commitment to sustainable development, its high

ethical standards in business dealings and its on-going efforts in community welfare programmes

have won it acclaim as a responsible corporate citizen. ACCs brand name is synonymous with

cement and enjoys a high level of equity in the Indian market. It is the only cement company that

figures in the list of Consumer Super Brands of India.


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Major Milestones:

1936 Incorporation of The Associated Cement Companies Limited on August 1,1936.

1937 With the transfer of the 10th company to ACC, viz. Dewarkhand Cement

Company, the formation of ACC is complete on October 23, 1937.

1947 Indias first entirely indigenous cement plant established at Chaibasa in Bihar

1956 Bulk Cement Depot established at Okhla, Delhi

1961 Blast furnace slag from TISCO used at the Chaibasa Unit to manufacture

Portland Slag Cement for the first time in India.

1961 Manufacture of Accocid Cement, which resists the corrosive action of acids andchemicals.

1961 Manufacture of Hydrophobic (waterproof) cement at ACC Khalari Cement

Works in Bihar.

1962 Manufacture of Accoproof, a waterproofing additive.

1965 ACCs Central Research Station (CRS) established at Thane

1965 Manufacture of Portland Pozzolana Cement.


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1968 ACC supplied and commissioned one-million-tone iron ore pelletizing plant

ordered by TISCO

1973 Take-over of The Cement Marketing Company of India (CMI)

1979 ACC wins international contract for operation and management of a new one

million tone cement plant at Yanbu-Ras Biridi in Saudi Arabia.

1982 Commissioning of the first 1 MTPA plant in the country at Wadi, Karnataka.

1992 Incorporation of Bulk Cement Corporation of India, a joint venture with the

Government of India.

1993 ACC starts the commercial manufacture of Ready Mixed Concrete at Mumbai.

1999 Tata group sells 7.2% of its stake in ACC to Ambuja Cement Holdings Ltd, a

subsidiary of Gujarat Ambuja Cements Ltd. (GACL)

2000 Tata Group sells their remaining stake in ACC to the GACL group, who with

14.45% now emerge as the single largest shareholder of ACC.

2002 ACC wins PHDCCI Good Corporate Citizen Award

2004 ACC named as a Consumer Super brand by the Super brands Council of India,

becoming the only cement company to get this status.


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2004 Green tech Safety Gold and Silver Awards awarded to Madukkarai Cement

Works and Katni Refractory Works by Green tech Foundation for outstanding

performance in Safety Management System.

2005 Holcim group of Switzerland enters strategic alliance with Ambuja Group by

acquiring a majority stake in Ambuja Cements India Ltd. (ACIL) which at the

time held 13.8 % of the total equity shares in ACC. Holcim simultaneously

makes an open offer to ACC shareholders, through Holcim Cement Pvt.

Limited and ACIL, to acquire a majority shareholding in ACC. Pursuant to the

open offer, ACILs shareholding in ACC increases to 34.69 % of the Equity

share capital of ACC.

2006 Change of name to ACC Limited with effect from September 1, 2006 from The

Associated Cement Companies Limited.

2006 ACC receives Good Corporate Citizen Award 2005-06 from Bombay Chamber

of Commerce and Industry

2006 New corporate brand identity and logo adopted from October 15, 2006

2008 Ready mixed concrete business hived off to a new subsidiary called ACC

Concrete Limited.

2008 ACC wins CNBC-TV18 India Business Leader Award in the category India

Corporate Citizen of the year 2008

2009 ACC received the Jamanalal Bajaj "Uchit Vyavahar Puraskar" of Council for

Fair Business Practices

2010 ACC acquires 100 percent of the financial equity of Encore Cements &

Additives Private Limited which is a slag grinding plant in Vishakhapatnam in


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coastal Andhra Pradesh. This company became a wholly-owned subsidiary of

About Accs RMC Business

ACC set up India's first commercial Ready Mix Concrete

(RMC or RMX) plant in Mumbai in 1994. ACC Concrete

is one of the largest manufacturers of RMX in India with

over 50 modern plants in major cities such as Mumbai,

Bangalore, Kolkata, Chennai, Delhi. Hyderabad, Goa,

Pune and Ahmadabad.

ACC's pioneering efforts in introducing RMX coupled with the promotion of bulk cement

handling facilities have been responsible for redefining the pace and quality of construction

activity in metropolitan cities and in mega infrastructure projects.

Numerous landmark structures in India's metro cities have been built using ACC Concrete - mega

housing projects, townships, commercial complexes, factories, bridges, flyovers, roads and

railways. Prestige projects such as the Mumbai-Pune Expressway, the Indore-Dewas bypass,

Kolkata and Delhi Metro Rail projects. Most of the new bridge and fly-overs in Mumbai used

ACC Concrete and could perhaps not have been completed on schedule without it.

Concrete is basically a mixture of Portland cement, water and aggregates comprising sand andgravel or crushed stone. In traditional construction sites, each of these materials is procured

separately and mixed in specified proportions at site to make concrete. Ready Mix Concrete, or

RMX as it is popularly called, refers to concrete that is specifically manufactured elsewhere and

transported in a Transit Mixer for delivery to the customer's construction site in a ready-to-use

freshly mixed state. RMX can be custom-made to suit different applications. Ready Mix Concrete

is bought and sold by volume - usually expressed in cubic meters.

Ready Mix Concrete is manufactured under computer-controlled operations and transported and

placed at site using sophisticated equipment and methods. RMX assures its customers numerous

benefits:

Uniform, consistent and assured quality of concrete Flexibility in concrete design mixes Easier addition of admixtures


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Faster and speedier construction Reduced inventories, material handling and storage of raw materials at sites Savings in labour requirements, labour costs and supervision of labour Reduced wastage of materials

The use of RMX is an environmental friendly practice that ensures a cleaner work place and

causes minimal disturbance to its surroundings. This makes its utility more significant in crowded

cities and sensitive localities.

In contrast to this, conventional methods of making, transporting and placing concrete at most

construction sites are somewhat labor-intensive and suffer from practices which may be erratic

and not very systematic.

Therefore the use of Ready Mix Concrete can prove to more cost effective in the longer term

while ensuring that structures are built faster and using concrete that comes with higher levels of

quality assurance.

ACC Concrete is manufactured at modern fully computerized plants which have state-of-the-art

machinery and equipment by machinery suppliers of global repute - fully automated Batching

Plants, well-equipped laboratories for testing raw materials and fresh concrete, Transit mixers,

Mobile and stationary pumps capable of discharging concrete at high elevations and over long

distances.

A large fleet of the latest models of Transit Mixers and Concrete Pumps to suit different terrains

and work sites ensures that our customers get timely and uninterrupted supply of premium quality

concrete as per their requirement as well as its efficient and timely placement at the work site.

ACC Concrete is supplied in a variety of grades and compositions to meet specific demands of

customized applications - from simple requirements for small homes to High Performance

Concrete to meet the complex needs of mega projects.

Each of our plants has a fully equipped laboratory with the latest in testing machines to carry out

routine and detailed tests of raw materials as well as fresh finished concrete. These in-plant

laboratories are backed by the facilities of ACC's reputed Research centre at Thane which serves

as a focal research and testing laboratory centre for cement and concrete.

ACC Concrete customers can avail of a range of options in our testing and quality control

services - from simple tests and analyses of raw materials and concrete to non-destructive testing

of hardened concrete

ACC ConcreteA Wide Range


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High Strength Concrete High Performance Concrete Self-levelling Concrete Self-compacting Concrete Coloured Concrete Concrete made with binary and ternary blends of cements Early strength Concrete Fibre reinforced Concrete

ACC's fleet of Transit Mixers and Concrete Pumps helps ensure that our customers in cities like

Mumbai, Bangalore, Kolkata, Delhi, Chennai, Hyderabad, Goa and Pune now just a phone call

away from ACC Concrete - freshly blended premium quality concrete that is door delivered and

efficiently placed at site on the day of concreting.

For very large constructions or infrastructure works, we can consider dedicating an entire RMX

plant catering exclusively to the project sites.

In addition, our marketing team, which includes qualified and experienced engineers and concrete

technologists, can assist customers in defining and specifying quality standards, designing

specific concrete mixes to meet the most challenging of requirements as well as sourcing reliable

supplies of good quality raw materials.

If you wish to know more about ACC Ready Mix Concrete or have a specific requirement, please

send a mail to any of the following options which is nearest to you.

Main officeIs in Thane (W) with total employee strength of 11500.

ACC Concrete Vision and Mission:


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Chapter 5

METHODOLOGY


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Introduction to the study

Every Industry wants to provide complete satisfaction by providing goods and services to

its clients. The firm required a big shots of player so that the industry could be perform

smoothly and continuously. The concrete is a very critical and short span of product,

which gets rejected from the client site easily.

The main players in the real estate industry in Mumbai are

Runwal Homes Pvt. Ltd Indiabulls construction limited Shayona corporation JMC projects Shapoorji Palonji & Co Larsen & Toubro Ltd Constrution Kalpataru Ltd Pratibha Industry Ltd B. E. Billimoria & Co. Limited Raheja Universal (Pvt) Limited Capacit'e Infraprojects Pvt Ltd


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LITERATURE REVIEW:

Rmc Industry

The Ready Mix Concrete (RMC) industry is growing due to the superior technical properties over

normal concrete, but the potential is still huge

The Ready Mix Concrete (RMC) industry in India is in its early stages with cement consumption

of just 2-3 per cent of total production. This is evident from the fact that in the West, the RMC

consumes 60 per cent of total cement production. However, since the demand for RMC is

expected to grow exponentially, cement manufacturers in India such as Ultratech, ACC, Madras

Cements, India Cements, Ambuja Cements, among others, have forayed into the business. As the

industry grows, it will make aggregate distribution and production more organized as large

players are likely to venture into the aggregates business themselves or have a long-term

relationship with commercial aggregate companies.

The cement companies are able to leverage the RMC market in a better way since cement is one

of the essential ingredients in the manufacture of RMC. Of course, acquiring and operating

suitable aggregate quarries in India is a difficult task, but since cement companies possess

sufficient experience in limestone quarrying will have technical competency of running such

captive operations too.

The use of RMC is growing due to its superior technical properties than normal concrete. The

difference between normal concrete and RMC lies in the technology used for production,

transportation and placement. In the case of RMC, all the ingredients are proportioned in

accordance with the standard codes of practice to get the targeted strength and durability. The

quality of concrete depends on the way it is mixed, placed, compacted, finished, cured and

protected. RMC used in construction makes it possible to achieve speed with quality

the acceptability of RMC is certainly high in large cities and metros and as many as around 40

cities are currently using RMC for several infrastructure projects. Specifications in tenders by

municipal corporations, public works and other government bodies will play a big role in growth

of rmc


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BACKGROUND OF THE STUDY

Most firms have to provide their customers with trade credit. The aim of the internship was to

ensure that customers do not take advantage of willingness to provide this credit.

We will look at:

the problems caused by providing credit, including the consequences of badDebt and late payments

how to assess whether your customers are credit worthy how good credit control routines prevent customers from keeping your money

Longer than necessary

where debt collection fails, we will see how to claim income tax and VAT reliefOn the bad debt.

This unit wont make you an instant expert at credit control and debt recovery. However, it will

give you some useful guidelines to collecting debt efficiently. Good cash flow is essential for

business success. We hope that this unit will make the cash flow for you.

In later units of the course we will look at how you can supplement your experience and

knowledge by using specialist agencies and bodies to enable you to ensure payment from your

debtors.

Statement of Problem:

To understand the payment behavior of ACCs clients and exploring the possible verticals for

improvement in reducing average collection period.

Need of Study:

Staff involved in credit control and credit management at all levels who need to gaina broad overview and understanding.

Staff about to take on more responsibility for credit management. Staff newly appointed to these areas. Anyone in business wanting to improve their cash flow and reduce bad debts Affirmation of good credit control practices, including telephone collection

techniques.

Appreciation of skills required to work closely with the sales department.


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Understanding of the different customer trading types and the laws relating to them. Ability to select credit reference agencies and interpret the information they supply. Knowledge of how to effectively target and motivate a team to reduce your company

D S O.

Knowledge of the laws governing litigation on unpaid debt. Update on legislation in relation to best practice compliance and the Financial

Conduct Authority.

Scope of Study:

The study was restricted to the Mumbai area operations of ACC.

The study was carried on all the plants of ACC concrete Ltd. in and around Mumbai. Study includes the tracker sheets of clients of ACC in Mumbai. Complete analysis of fundamental and sentimental aspects of ACCs clients by using

their balance sheets and related news.

An additional of cost structure and contribution margin was carried out of personalinterest in the field of cost management.

Objectives of Study:

To find the clients who are exceeding the credit period for payment To develop attractive policies for the clients to tempt them to pay early To convert the billing process to electronic means on pilot basis for top 5 customers. To understand the degree of current credit analysis of ACC.


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Hypothesis

Due to highest rank in the client report, it shows that the clients in a better position to pay

the outstanding and current dues.


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Chapter 6

Research Methodology


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Source of Data

Secondary data may be available which is entirely appropriate and wholly adequate to

draw conclusions and answer the question or solve the problem. Sometimes primary data

collection simply is not necessary. It is a secondary data which carries from the internal

employees and from 3rd

party (TCM)

Data collection instrument

Third party report (TMC) provides the detail information and accordingly provide their credit rate

(money and terms)

A

72

INR 513000000 / USD 9551000


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Chapter 7

Data Analysis and interpretation


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This is the balance sheet of Man Infrastructure


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Profit and loss A/C


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Interpretation


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Chapter 8

Results and findings


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This the Module which has several parameters to rank the top 30

customers in the business

Interface of the Model:


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ABC CO.

SOLVENCY

net worth more than 500cr 1

debt equity ratio less than 1 1.5

ICR greater than 20times 0.75

sector infrastructure 1

class promoter 0.75

ownership public ltd listed company 1

6

LIQUIDITY

current ratio greater than 2 2

ACP less than 45 Days 1

APP less than 45 Days 1

4

PROFITABILITY

Profit after tax greater than 200cr 1

profit margin greater than 15 1

profit growth rate greater than 30% 0.5

sales growth rate greater than 30% 0.5

sales turnover greater than 1000cr 0.5

3.5

CLIENT TRADE HISTORY

value of monthly business done 10lac to 50 lac 1

average DSO less than 45 days 3


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It is also recommended that the company start e-mailing the invoicesto at least 5 major clients on a pilot basis and then later on migrate

other customers onto the same system of invoice e-mailing in order to

cut down the DSO which is caused by the current internal time lag

between supply and bill delivery. (Current Average time lag betweensupply and bill delivery is 7 Days). Moreover there are other issues

with hardcopy of Invoice viz. Physical damage, loss, misplacement

etc. contributing to further delay.

The company currently uses total volume requirement of the client,number of projects in hand, overall reputation in the market and

other such non-quantitative and non-financial parameters to arrive at acertain specific credit limit for its clients. It is recommended that the

company use the model prepared during the course of the internship

named Client Report Card which assesses the clients on both its

financial and non-financial strength before fixing a certain credit limit.

Since the company deals with a lot of clients which are public listedcompanies it is also recommended that the company monitor thefinancial performance of these clients which also happen to be

contributing to major portion of the revenue and review their credit

limit from time to time based on the receivables collection experience

and financial position.


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Chapter 9

CONCLUSION


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We set out to solve the problem of rising DSO. However before solving that, it was

required that we understand the RMX business thoroughly. Also understanding the

company method of calculation of DSO, its way of accounting for provisions, procedures

and formalities involved for authorization of debit notes and credit notes, study of the

internal procedure that has to be gone through before invoice is created and delivered to

the customer, etc., was equally important.

What initially felt like a problem caused by a loose credit policy turned out to be a

compulsory and absolute essential marketing tool employed by all players in the RMX

industry to support their top line Using a loose credit policy as a marketing tool is

advantageous as long as it is supported by a sophisticated system of continuous

monitoring and rigorous collection efforts of the receivables. It was found that the

Company was indeed following a disciplined and well set out receivables collection and

monitoring mechanism; sending out regular reminders through e-mails, calls and visits toclient locations along with carrying out timely reconciliations with all its top clients for

the period ending two months before closing date.

An opportunity of reducing the DSO by improvising the current process being followed

internally before an invoice is being delivered to the client was being identified and the

suggestion of implementing the same is being incorporated in the recommendations sent

to the company.

Finally another very important factor impacting DSO i.e. acceptable credit standards for

clients and the procedure currently being followed for ascertaining client credit limits

presently being done using traditional non-quantitative tools was studied in great detail.

The potential risks arising out of ignoring the financial position of the clients while

arriving at the credit limits were communicated to the company. Thus, a model to assess

the financial position of the clients has been provided to the company in order to aid them

in making well informed decision on the credit limit.


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Chapter 10

REFERENCES AND BIBLIOGRAPHY


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www.veda.com.au www.investopedia.com/creditrating www.moodysanalytics.com www.ecccreditcontrol.com www.moodys.com www.standardandpoors.com www.crisil.com www.acclimited.com www.moneycontrol.com en.wikipedia.org www.accconcrete.com
http://www.veda.com.au/http://www.investopedia.com/creditratinghttp://www.moodysanalytics.com/http://www.ecccreditcontrol.com/http://www.moodys.com/http://www.standardandpoors.com/http://www.crisil.com/http://www.acclimited.com/http://www.moneycontrol.com/http://www.accconcrete.com/http://www.accconcrete.com/http://www.moneycontrol.com/http://www.acclimited.com/http://www.crisil.com/http://www.standardandpoors.com/http://www.moodys.com/http://www.ecccreditcontrol.com/http://www.moodysanalytics.com/http://www.investopedia.com/creditratinghttp://www.veda.com.au/


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Chapter 11

Annexure


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(credit assessment)

Documents