13-09-2012, 01:46 PM
Capital Budgeting for Kesoram
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CAPITAL BUDGEING:
An efficient allocation of capital is the most important finance function in modern times. It involves decisions to commit firm’s funds to long-term assets. Such decisions are tend to determine the value of company/firm by influencing its growth, profitability & risk.
Investment decisions are generally known as capital budgeting or capital expenditure decisions. It is clever decisions to invest current in long term assets expecting long-term benefits firm’s investment decisions would generally include expansion, acquisition, modernization and replacement of long-term assets.
Such decisions can be investment decisions, financing decisions or operating decisions. Investment decisions deal with investment of organization’s resources in Long tern (fixed) Assets and / or Short term (Current) Assets. Decisions pertaining to investment in Short term Assets fall under “Working Capital Management”. Decisions pertaining to investment in Long term Assets are classified as “Capital Budgeting” decisions.
Capital budgeting decisions are related to allocation of investible funds to different long-term assets. They have long-term implications and affect the future growth and profitability of the firm.
In evaluating such investment proposals, it is important to carefully consider the expected benefits of investment against the expenses associated with it.
Organizations are frequently faced with Capital Budgeting decisions. Any decision that requires the use of resources is a capital budgeting decisions. Capital budgeting is more or less a continuous process in any growing concern.
INTRODUCTION OF CEMENT:
The basic need of human being is food clothing and shelter love and affection /possession is on never ending process for a human being.
As the time passes on human beings their wants and wishes also changed from ancient times to modern times and among them the living pattern and costruction works also have been changed from temporary construction of house to permanent construction and the basic material used in construction is “Cement”.
Cement the word derived from a latin word ‘CEMENTTUM’ means stone chipping such as we used in roman.
Cement the word as per oxford, it is commonly used is any substance applied for soft stocking things. But cement means is most vital and important material for modern constructions. It is a material which sets and hardness when mixed with water. Cement is basically used in construction as a building agent. In ancient times clay bricks and stones have been used for construction works.
The Romans were using a binding or a cementing material that would harden and water. The first systematic effort was made by “SMEATON” who undertook the execution of a new light house in 1756. He observed that
production obtained by during lime stone was the best cementing material for work under water.
The construction in lost centuries was with Lime that was the main equipment used for construction work. The ancient constructions like Tajmahal, Qutubminar, Mysore Palace, Red fort, Charminar etc., the evidence of lime construction.
TECHNOLOGICAL CHANGES:
Continuous technological upgrading and assimilation of latest technology has been going on in the cement industry. Presently 93% of the total capacity in the industry is based on modern and environment friendly dry process technology and only 7% of the capacity is based on old wet and semi-dry process technology.
There is tremendous scope for waste heat recovery in cement plants and there by reduction in emission level. One project for co-generation of power utilizing waste heat in an Insian cement plant is being implemented with Japanese assistance under Green Aid Plan. The induction of advanced technology has helped the industry immensely to conserve energy and fuel and to save materials substantially.
PROFILE OF THE COMPANY
One among the industrial gains in the country today serving the nation on the industrial front kesoram industries limited has a tenured and extent full history dating hock to the twenties when the industrial house of Birla’s enquired it.With only a Textile mill under its banner in 1924,it grew from strength and spread its activities to newer fields like Rayon pulp Transparent Paper.Spun pipes and Refectory Tyres oil mills and refinery Extraction.
Looking to the wide gap between the demand and supply of vital commodity cement which it plays on important role in Nation Building, the government Private entrepreneurs to argument the cement production Kesoram rose to the occasion and decided to set up few cement plants in the country.
Kesoram cement is one of the prestigious units in the renowned Kesoram industries group that is one of India’s leaden industrial conglomerates, under the leadership of Mr.B.K.Birla, the famous personality of Indian Industry, who owes branches all over India.
Kesoram cement Industry is one of the leading manufactures of cement in India Kesoram cement is a division of Kesoram Industries limited. It is a dry process cement plant. It is located at Basant Nagar in Karimnagar District of Andhra Pradesh with the plant capacity is 8.26 lakhs tones per annum. It is 8Kms away from the Ramagundam Railway Station Lining Madras to New Delhi.