Professional Documents
Culture Documents
A project on
Inventory management
And
SUBMITTED By Mr.Shobhit E.D. Tirkey Central University of Jharkhand Under the Guidance of Accounts/Finance Department ACC Limited SINDRI CEMENT WORKS, SINDRI.
GUIDES CERTIFICATE
This is to certify that the project report entitled A project on Inventory management And Control in ACC Company. Submitted by Mr.Shobhit E.D. Tirkey in partial fulfillment of Internship completed by him under my supervision and guidance. To the best of my knowledge and belief the matter by him is original in nature and has not been copied from any sources.
ACKNOWLEDGMENT
It gives me immense pleasure in acknowledging the valuable assistance extended to me by various personalities in the successful completion of the report.
I am very much thankful to the Finance Department for providing me valuable guidance for preparation of this Project Report. I am also thankful to all the staff members of Finance Dept., Sindri for assisting me, without whose kind co-operation this Project Report would not have been completed. Place: Date: Mr.Shobhit E. D. Tirkey
CONTENTS
S.NO.
1.
TOPIC
INTRODUCTION
PAGE NO.
05-10
2.
11-15
3.
16-36
4.
CONCLUSION
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5.
BIBLIOGRAPHY
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CHAPTER -1
INTRODUCTION
About A.C.C
1. Genesis The story dates back to the year 1936, when war of clouds were gathering over Europe, the economy of the western world was deep in recession. It was an etched in people s memory more for a gloomier world than for all round optimism. An Indian industry was reeling under severe difficulties. But undaunted by the times, one man was F.E.Dinashaw -a man of tremendous foresight and outstanding initiative. The vision was to build a strong and unified cement industry that would not only withstand all difficulties but also fulfill its responsibility towards the development the under developed nation. The result was the amalgamation of ten of the existing cement companies-belonging to four large industrial houses of that time, viz-the house of TATA, KHATAU, DINSHAW AND KILLICK NIXON-to form the nucleus of factories then today known as The Associated Cement Companies ltd. (A.C.C). Barely three year later, was the fledging company catapulted into the fiery cauldron of World War II, and resources were geared to meet that onslaught. Soon after, India got her independence.
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ACC Limited - Sindri Cement Works. A.C.C was fully poised to fulfill the hopes and aspiration of people across the length and breadth of the country. For more than six decades now, A.C.C has been forging a pioneering path making cement and fulfilling its commitment of nation building.. Along the way, it sharpened its experience on the cutting edge of the latest processes /technologies / learning/adapting not just transplantingto meet the specifies of local operating parameters. In the process- setting standards, innovating, not just meeting needs, but anticipating them. Creating a balance between material progress and the long-term interest of all men and the nations. A new association was forged between ACC and the Holcim group of Switzerland in 2005.. Holcim is the world leader in cement as well as being large suppliers of concrete, aggregates and certain construction-related services. Holcim is also a respected name in information technology and research and development. The group has its headquarters in Switzerland with worldwide operations spread across more than 70 countries.
BRIEF
INTRODUCTION
ACC- SINDRI CEMENT WORKS Plant inaugurated by Mr. Khatau, the then Chairman of A.C.C on 21st December1955 Manufacturers Portland slag cement, in the brand name of ACCOUNT Super Present rated capacity : 1 MTPA It is an ISO 9001 (since Feb. 2000) & ISO 14001 (since July 2002) certified unit.
ACC Limited - Sindri Cement Works. management decided to convert the Sindri Works from full-fledged unit to a grinding unit from 1995 .Thereafter, SCW is only engaged in the process of grinding clinker, gypsum and slag to produce Portland Slag Cement (here-in-after referred to as PSC).The unit is getting clinker from its sister unit mainly from Chaibasa( Jharkhand ) Jamul ( Chhatisgarh ) and Kymore ( Madhya Pradesh) Bargarh ( Orrisa).
In
1996,
SCW
undertook
expansion
by
establishing a Vertical Rolling Mill (VRM) and mechanizing the packing cement & loading system. The commercial production from the expanded capacity commenced on 01-04.1998 with an In installed capacity of 6 lakhs tones per annum.
respect of the incremental production, SCW was granted an exemption from payment of Sales Tax under the Bihar Industrial Policy, 1995. It has been made to understand that SCW has also undertaken a restructuring and modification activity which has increased the installed capacity to 1 million tons per annum.
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LIMITED all major functions like recruitment, selection etc are governed by HR Division at Head Office The role of human resource in ACCOUNT sindri is to keep his eye on the departments which are running or functioning under this unit, (b) FinanceIt also plays very critical role in the proper functioning of any business. Here in Sindri unit finance plays a key role in the day today activities or operations. It pays to vendor supplying
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ACC Limited - Sindri Cement Works. various payment materials /services from and receives the
customer,
In this unit railway carries raw materials, finished goods and various materials, which includes the various day today activities or operations like keeping the records of incoming and outgoing of raw materials and final goods. So in this view finance plays a critical role. Finance department consists different sections like:
grinding unit and presently manufacturing only Port Land Slag Cement. The clinker is received from sister plant. Mineral gypsum is presently procured from Holcim, Thailand. Clinker, slag, mineral gypsum is received by rail & phospho gypsum by road. The Sindri Cement has got for numbers of cement mill and one of vertical Raw Mill ( VRM) .They grind the Gypsum & Clinker in Cement Mills and Slag in VRM .The grinded materials are mixed in blender in the proportion decided by quality norms and supervised by laboratory. Thus mixed materials
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ACC Limited - Sindri Cement Works. are transported to cement silo of packing
department through pipe line and from there it is packed in 50 Kg bags by rotary packer to be dispatched to selling points by rail/road (d) LaboratoryIn this manufacturing unit the main role of laboratory is to check the quality of both the row material and finished goods. So in this lab there is a quality control dept which plays the major role in the functioning to laboratory. In quality control dept they check the quality of the raw material which the comes from different places or units and also check the quality of the finished good (PSC) Portland stag Cement, (e) PurchaseThe purchase department of. unit
Manufacturing is mainly concern with the purchase of different types of materials which requires in production. Generation of purchase order by obtaining quotation from market against purchased requisition generated by various system of SAP...
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(f)
i.e. Information Systems Department in ACC is out sourced to NIT whose main job is to maintain : Maintaining Layer2, Layer3 networking devices, LAN/WAN connectivity, Servers (ISA, Exchange, Desktop Management, and SAP).To provide local IT support to company to allow efficient working of the IT Infrastructure. To ensure that proper documentation for all SOP (standard operations procedure), installation ordination configurations of with new IT management infrastructure. parties for CoIT.,Network security Support for configuration / third regarding
maintenance under warranty / out-of-warranty issues & request for quotes for new. (a) StoreThe store department of ACCOUNT Sindri manufacturing unit is concern with the inventory management of raw materials ,stores and spares and packing materials..
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Chapter 3
indri cement works is a grinding unit of ACC Ltd. Under flagship of Holcim the largest cement manufacturer in the cement Industry. As Finance plays a crucial role in operation of any business of manufacturing unit the same is with Sindri unit. Following is the brief over view of finance department of this unit. Finance has a key role in day to day activities of Sindri unit its major functions is to fulfill the financial requirements of the plant.
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ACC Limited - Sindri Cement Works. The finance department of ACC Limited is broadly divided into six major sections with each department has their own function which together keeps rein on the management of its working capital. This department is only concerned with the expenses and stock of the company
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The finance department of Sindri Cement works consists different sections : 1. : ACCOUNT RECEIVABLE / TARRIF SECTION The function of this department mainly
concerned with the receiving of the money and in regard to these receiving they maintain the tells which is known of Account receivables. It mainly act as the receiving of money and another instruments. It covers all the receipts from different units like receipts from employee, Refunds from railways and also received the mount from sale of scrap and other materials. AR considers mainly these three parties from whom they have to received the amounts: 1. Employees: The companies make the EMI (equally monthly installment) receipt against the loan and advances provided to the employees. The payment of these EMIs is not received by this
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ACC Limited - Sindri Cement Works. manufacturing unit, these receipt are received by the head office. This unit deals with only the making of receipts. 2. Customers: The ACC unit of Sindri, dont sell their finished goods to the customers directly it is being done by the separate marketing division ,for the unit account receivable form scrap dealers only
3. Railways: The railway plays a vital roll for this unit. This is the third and very important party from whom the unit have to receive the amount after considering the missing of wagons and damage of material the railway is liable to pay back or to refund the amount which is already paid to the railway for the transportation facility provided.
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2. ACCOUNT PAYABLE SECTION:It plays a major role for all payments for venders and employees. It mainly include the function of payment to different vendor from whom the copany has received the material or services etc. 1. VENDORS:The vendor is a person/organization from whom the company is receving the materials or services In the Sindri manufacturing unit (ACC) vendor plays a very important role in the smooth functioning of the company. Vendors are there which provides raw materials to the company like, slag, gypsum, HDPE bags. These vendors also provides transportation facilities to the company through the railways and roadways. Sometimes these vendors also provides labour or workers to the company. There are two categories of venders:1. NORMAL VENDORS. 2. GOVERNMENT VENDORS.
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1. Normal Vendors, include three type of vendors: i). Local vendors :- These vendors restrict the boundaries of outside vendors. It means, these vendors belong to the local area or within district. ii). Head Office Vendors :- these vendors are from outside, its means these vendors do not belong to the local areas. These vendors render their services form outside the local area or within district. These vendors are hired by the Head Office ACCOUNT which is in Mumbai. iii). Contractor:- Contractors are those who provide services to the plant locally. 2. Government Vendors:- Government Venders are those vendor whom the company make the statutory ton. payment is the against best their example services. of the the Payment are also in the form of excise, sales Railway government under. Railways provides
ACC Limited - Sindri Cement Works. machinaries and etc. which helps in the
production of cement. It also carries the finish goods from sindri manufacturing unit to the market.
3. General ledger Section :1) General ledger: The central task of G/L accounting is to provide a comprehensive picture of external accounting and accounts ,recording of all business transaction (primary posting as well as settlements from internal accounting) in a software system that is fully integrated with all other operational areas of the companyand ensure that the accounting data is always complete and accurate. This section works as a security point or reference point for all the activities of accounts payable and accounts receivable, assets management etc.Here the automatic and simultaneous posting of all sub ledger items in appropriate general ledger accounts takes place through all modules . Every entry in the accounts department has to pass with GL. For every thing there is a dedicated 8nuber GL assigned which is called account number and the entry in these GL are being done on the basis of some pre defined nomenclature. The account number has been classified in to different categories, the first two numbers indicates the categories like 10 XX XX XXSales/Revenues 20 XX XX XXCost/Expenses 30 XX XX XXAssets 40 XX XX XX Liabilites 50 XX XX XX Capital /Retained earning
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Every machinery and expense points (ex-a/c office, Time office, VRM) got an identification no. which is called cost centers. which have also been allotted seven digit alpha numeric/numeric numbers ,which have been grouped in the following way, where the first digit/numbers indicates the grouping like number starting from B0 is for Plant administration ,I0 for mobile equipment,50 for Grinding and 60 for packing etc.and next three digit is for the unit for Sindri it is 205and last two number indicates stages/numbers of that unit for example 5020510,-50is For cement grinding 205 is plant number for Sindri,10 is for Portland Slag cement Grinding. The SAP system has following stock account Raw Materials Fuels Finished & semi finished Product Parts and supplies ( also includes Packing Materials) The list of expenses account is very exhaustive and contains various types and nature of accounts for repair ,salary and wages for other amenities( traveling exp.Medical reimbursement ,LTA etc .
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is also play a very important role in the finance department. Management of Assets includes the sale, purchase or acquisition of assets and the proper record of their maintenance. The asset management section of sindri cement works mainly deals in capital assets or can say fixed assets like plant & machinery, furniture & fixture etc. For the purchase and maintenance of these fixed and capital assets they prepare CESS (capital expenditure sanction scheme) and history sheet which is maintained after the preparation of CESS (capital expenditure sanction scheme). The asset management incharge also keep there record depreciation of fixed asset. The rate of depreciation is decided by the head office not by the incharge of the asset management of different units. The list of charging depreciation of different fixed assets is made and given by head office to different units. On the basis of these lists they charge the depreciation on different fixed assets.
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ACC Limited - Sindri Cement Works. The head office this also given the limited authority of sanctioning the purchase of any fixed assets which is upto 10 lakhs. Above 10 lakhs the purchase of any fixed assets is only possible by the permission granted by Head Office.
5. CONTROLLING/COSTING SECTION:It takes into consideration the function of evaluating the per unit costs of the materials either it is raw or it is finished. This function of costing helps in knowing through which process the finished product passes through and the cost of the product at different processes. It reflect the cost of product. It has major function over all products. It observes and report the deviation in costs of products which are the end result of all transactions.
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ACC Limited - Sindri Cement Works. It has the responsibility of products costing. It observes all the transactions for specific period to calculate the cost of finished product and also it has a specific role in reporting to the top management regarding the cost of product and also with the various aspects of product costing and assumptions over cost.
6.
salary (only monthly paid) related activities. It prepares the salary related data for a whole month for all employees and forward it to payroll consultant for processing the salaries. It also includes the data or information about the newly recruited employees, monthly or yearly leave records, transfer of employees, promotion or demotion of employees or retirement of employees. On the basis of these informations the payroll section incharges calculate their monthly salaries and sent it to the head office (Mumbai) for close verification ofall salary related bills.
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ACC Limited - Sindri Cement Works. It also considers the LIC premium and monthly re-payment against loans taken by the employees or deductions which helps in getting the fair and ACCOUNTurate salaries to the employees after close verification by the head office (Mumbai).
7. TAXATION SECTION:On the most of the purchase of materials the company has to pay excise duty/service tax for which the company gets the CENVAT credit to be availed while paying the excise duty for the finished product i.e.Cement the taxation section captures the excise duty so paid in the system before passing of the invoices and keeps track track of the same It is an important and most significant source of revenue for the company It is also responsible for sale tax/Income tax deduction and deposit form vendors.
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Acoounting procedure of Raw Materials /Stores Spares/Services in Cement ManufacturingUnit of ACC Sindri Cement Works
After being the subsidiary of HOLCIM Limited a multinational and one of the biggest Cement and ready mix company of the world the need was felt to migrate to a world class technology of Information and technology and from February 2007 The ACC Limited which was earlier using Oracle 9i and developer 6i has Migrated to an System Application &Products in Data Processing (SAP ) ,an IBM product which is available in multiple languages and being used over 12million users across the globe based solution ,where there is a single integrated system for its all activities The full integrated SAP R/3 system which is a multicompany, ,multi-currency and multi-languages and uses best business practices across the globe and have on line /real-line access and have the facility of data entry once at source .Its reported can be downloaded in excel worksheet directly and can be used for different reports and analysis which has got different module only six of the following module has been implemented in ACC Limited through out the country 1 Sales/Shipping /Billing Process (SD) 2 Purchase and Inventory (MM) 3 Production Process (PP) 5.) Maintaince Activity (PM) 6 Human Resources ( HR) 7 Finance ( Revenue & Expenditure(FI) 8 Controlling (Analysis Report of control) (CO)
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ii)
Services supply: In case of services again the department will raise a PR slip and they can name the register vendor also from whom they want the services to be rendered. These services can be cleaning, packing, transportation by road /rail, whitewash, service of lawyer etc. Then again the same process goes on as it is in the case of material supply. After getting the services the department prepares a Service Entry Sheet (SES) confirming that they rendered the following services. This SES is always raised by the department and passed through the higher authority for confirmation because services are intangible in contrary of materials which are tangible. As soon as the SES is passed an accounting entry is passed on the basis of acconunt assignment mentioned in purchase requisition . Expense a/c ---Dr To GAR/Invoice received a/c --Cr The same credit lies with the vendor also. After the receipt of the materials/and services the vendors submits their invoices to finance
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Iii In some cases the company has to procure the materials from its sister unit based Within states of Jharkhand or near by states ,in case of Sindri Cement works .it is Getting one of the main essential raw materials Clinker from its sister unit Chiabasa Cement works for which PR and PO is not required to be made .The supplying unit makes a PO for transfer of quantity ,this order is called STO( Stock Transfer order Stock a/c --Dr Business Area Sindri To Stock a/c Cr Business Area Chibasa This stock transfer is being done at the manufacturing cost of the sending Unit .The receiving unit has to be bear the transportation and other cost of ransfer.
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The same credit entry will be copied in vendor account as credit balance i.e amount payable to them When the consumption of the materials takes place the following entries will be passed by the system. Consumption a/c --To stock a/c --Dr Cr
Asset Management: This section deals with mainly fixed asset of the company :
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CONCLUSIONS
There is mainly about the one commodity which is cement and the manufacturing unit sindri cement works. As per the whole report these helps the other persons or students to know about the finished product (cement and its varities) and also the raw material used and also the function of finance department consists of different sections in Sindri cement works. Each of the different unit of cement industry has its own financial rules and regulations. The productions of this unit (Sindri Cement Works) is increasing year by year. This year its production capacity reched from 6 to 10 lakhs ton PA. ACC LIMITED IS GOVERNED BY HOLCIM GROUP. The increasing production of these units are growing and helps the Indian economy to grow faster.
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BIBILOGRAPHY
www.ACClimited.com www.google.co.in www.askACC.com VARIOUS PROJECT. REPORTS OBSERVED WHILE
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