Acc Cements Building A Sales Organization Accounting Essay

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ACC Cements is one of the top leading cements in India, ACC is essentially a peoples brand of cement and its customer base represents the masses of India - individual homebuilders in small towns, rural and semi-urban India. Customer services are an important differentiator. ACC promotes the use of Blended cements which are environment-friendly and acknowledged for their superior and unmatched durability as compared to ordinary cements.

Mega construction projects obtain cement from ACC delivered in bulk tankers - a welcome change from the conventional cement bag.

ACC was first to introduce Ready Mixed Concrete in India on a commercial basis. Thanks to this achievement, a transit concrete mixer is now a familiar sight in India's major cities.

As India's economic development accelerates ACC cement and concrete stand ready to enable the construction industry to achieve speedy completion of large commercial and infrastructure projects.

The Company now plans to further enhance this equity and strengthen its sales and marketing potential by building an effective sales organization, motivating channel partners and revitalizing customer services.

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ACC's brand name is synonymous with cement and concrete. The trademark ACC on 50 kilogram bags of Ordinary Portland Cements (43 and 53 grade), Blended cements (Fly ash and slag based) and some special purpose cements offers customers an assurance of dependable and consistent quality.

Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are

included to the extent they relate to the period till such assets are ready to be put to use. All other borrowing costs are charged to revenue.

(vi) Intangibles

a) Computer Software cost is amortised over a period of three years.

b) Costs incurred to gain access to mineral reserves are capitalised and depreciated over the life of the quarry, which is based on

the estimated tonnes of raw materials to be extracted from the reserves.

(vii) Impairment

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal

/ external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the asset's net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value at the weighted average cost of capital. Previously recognized impairment loss is further provided or reversed depending on changes in circumstances.

(viii) Expenditure during construction period

In case of new projects and substantial expansion of existing factories, expenditure incurred including trial production expenses

net of revenue earned, and attributable interest and financing costs, prior to commencement of commercial production are capitalised.

(ix) Investments

Current investments are carried at the lower of cost or fair value. Long term investments are stated at cost. Provision for diminution

in the value of long-term investments is made only if such a decline is other than temporary.

(x) Leases

Lease payments under operating lease are recognised as an expense in the Profit and Loss Account on a straight-line basis over

the lease term.

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(xi) Research and development

Expenditure on Research phase is recognised as an expense when it is incurred. Expenditure on development phase which results

in creation of assets is included in Fixed Assets.

(xii) Inventories

Inventories are valued as follows:

(a) Raw materials, fuels, packing materials, stores and spares

Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are

not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis.

(b) Work-in-progress and finished goods

Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads

based on normal operating capacity. Cost of finished goods includes excise duty.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and

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estimated costs necessary to make the sale.

(xiii) Foreign currency transactions

Foreign currency transactions are initially recorded at the rates of exchange prevailing on the date of transactions. Foreign currency

monetary items are subsequently reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Exchange differences arising on the settlement of monetary items or on reporting Company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise. The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the company itself. The premium on forward exchange contracts not intended for trading or speculation purpose is amortized as expenses over the life of the contract.

(xiv)Employee benefits

a)

b)

c)

d)

Defined Contribution Plan

Contribution to Officer's Superannuation Fund, ESIC and Labour Welfare Fund are recognised as an expense in the Profit and

Loss Account, as they are incurred. There are no other obligations other than the contribution payable to the respective trusts.

Defined Benefit Plan and Other Long Term Benefits

Retirement benefits in the form of gratuity, additional gratuity, provident fund, post retirement medical benefit schemes,

medical benefits under voluntary retirement scheme and other long term benefits in the form of leave encashment, silver jubilee and long service awards are determined using the projected unit credit method as at Balance Sheet date. Actuarial gains / losses are recognized immediately in the Profit and Loss Account.

Short term compensated absences are provided based on past experience of leave availed.

Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss Account immediately.

(xv) Employees Stock Option Scheme

The intrinsic value of option granted under Employees Stock Option Schemes has been deferred, to be written off over the vesting

period.

(xvi) Income taxes

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the

amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date.

Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets are reviewed at each Balance Sheet date.

(xvii) Contingencies / Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of

resources embodying economic benefit will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best

income or as expenses in the year in which they arise. The financial statements of an integral foreign operation are translated

as if the transactions of the foreign operation have been those of the Company itself. The premium on forward exchange contracts not intended for trading or speculation purpose is amortized as expenses over the life of the contract.

(xiv)

Employee benefits

a) Defined Contribution Plan

Contribution to Officer's Superannuation Fund, ESIC and Labour Welfare Fund are recognised as an expense in the Profit

and Loss Account, as they are incurred. There are no other obligations other than the contribution payable to the respective trusts.

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b) Defined Benefit Plan and Other Long Term Benefits

Retirement benefits in the form of gratuity, additional gratuity, provident fund, post retirement medical benefit schemes, medical benefits under voluntary retirement scheme and other long term benefits in the form of leave encashment, silver jubilee and long service awards are determined using the projected unit credit method as at Balance Sheet date. Actuarial gains / losses are recognized immediately in the Profit and Loss Account.

c) Short term compensated absences are provided based on past experience of leave availed.

d) Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss Account immediately.

(xv) Employees Stock Option Scheme

The intrinsic value of option granted under Employees Stock Option Schemes has been deferred, to be written off over the

vesting period.

(xvi) Income taxes

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the

amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date.

Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets are reviewed at each Balance Sheet date.

(xvii) Contingencies / Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of

resources embodying economic benefit will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. A contingent liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote.

(xviii) Mines Restoration Expenditure

The Company provides for the estimated expenditure required to restore quarries and mines. The initial recognition of the

provision for mines restoration cost comprises of the estimated costs for restoration caused by operations necessary before the raw materials can be exploited. Actual expenses for restoration are charged directly against the provision. The present obligation is revised annually based on technical estimates by internal or external specialists.