ACC Ltd.

PROJECT REPORT

ON

“FINANCIAL ANALYSIS OF ACC LTD.”

Submitted for partial fulfillment of requirement for the award of degree of

“BACHELOR OF MANAGEMENT STUDIES”

Of

Mumbai University,(Mumbai)

Session (2013-2016)

Supervision By: LOKESH JAIN Prepared/Submitted by

ADITYA NAIK

Designation: Chief Manager ROLL NO: M13024

Department: ACC-FICO. B.M.S: Vth SEMISTER

DECLARATION

I ADITYA MANJUNATH NAIK declare that the report of the project work entitled financial analysis of ACC LTD is based on my own work carried out during the course of my study under the supervision of MR.LOKESH JAIN, Chief Manager-Finance, ACC LTD.

I assert that the statement made and conclusion drawn are an outcome of my project work. I further declare that to the best of my knowledge and belief that the project report does not contain any part of any work which has been submitted for the award of any other degree/diploma certificate in this university or any other university

ADITYA. M. NAIK

(M13024)

ACKNOWLEDGEMENT

I would like to express my profound gratitude and grateful thanks to MONUJ GOGOI and JESSICA CORREIA (HRD) for giving me opportunity undertake a research project in ACC LTD

I am really thankful to LOKESH JAIN Chief-manager(Finance) for making all kinds of arrangements to carry the project successfully and for guiding and helping me to solve all kinds of problems regarding the project work. His systematic way of working and in comparable guidance has inspired the pace of the project to a great extent.

I would like to thank all the employees of ACC LTD who have directly or indirectly helped me with their moral support for the completion of my project.

Objective of the study

To study about ACC Ltd. To compare the financial ratio (status) of ACC Ltd (2014 with 2013) To brought-down the comparative financial analysis of ACC Ltd. (2014 with

2013)

Methodology The whole study can be termed as a desk research. Hence there is no field work and collection of primary data for this research except for secondary information obtained by the medium of internets, journals and magazines and company’s annual financial report.

Introduction to the study

Finance is one of the most primary requisites of a business and the modern management obviously depends largely on the efficient management of finance. Financial statements are prepared primarily for decision making. They play a dominant role in setting the framework of managerial decisions. Thus the right quantity of money for liquidity considered right quality whether owned or borrowed funds at the right time to preserve solvency from the right sources at the right cost of capital.

Main subject matter of this project is to financial analysis of a company to recognize and compare the company’s current financial position with its financial position of previous year. Through which we will able to get a clear picture about the company.

WHAT IS FINANCIAL ANALYSIS?

It is the assessment of:-

Effectiveness with which funds (investment and debt) are employed in a firm.

Efficiency and employed in a firm. Value and safety of debtor’s claims against the firm’s assets.

Financial analysis is defined as the process of identifying financial strengths and weaknesses of the firm by properly establishing relationship between the items of the balance sheet and profit and loss account. It shows effectiveness of fund allocation and utilization. There are different types of tools and techniques to analysis financial position of the company. The results of financial techniques provide important inputs into security valuation.

Learning objectives

1. To study the financial position of the company.2. Prepare and interpret financial statements in comparative form.3. To get an overview of an industry.4. To analyze the profitability and solvency position of the unit with the

existing tools of financial analysis.

Selection of industry

Here I have selected cement industry for study. Cement industry in India is a very old industry. India is the second largest cement producing country after China in the world.

Selection of company

ACC is India’s NO.1 cement co. It is one of the oldest cement companies in India. So we have chosen this company to analyze how this performs in terms of finance.

PROJECT HIGHLIGHTS

SR.NO PARTICULARS

PAGE NO.

1 ABOUT THE COMPANYValues

Corporate profile

Customer focus

Customer approach

Customer experience

Channel partners

Cementing relationships

Embracing tomorrow

Recognition

Performance Highlights

Cost and profit Ratio

ABOUT its Subsidiary companies

2 FINANCIAL HIGHLIGHTS

3 VALUE ADDED STATEMENTS

4 BALANCE SHEET

5 PROFIT AND LOSS STATEMENT

6 CASH FLOW STATEMENT

7 FINANCIAL ANALYSIS

8 RATIO ANALYSIS

9 CONCLUSION (S-W-O-T Analysis)

ABOUT THE COMPANY

ACC Limited is India’s foremost manufacturer of cement and ready mixed concrete with a

countrywide network of factories and sales offices. Established in 1936, ACC is acknowledged as a pioneer and trendsetter in cement and concrete technology. ACC regularly wins accolades for best practices in environment management at its plants and mines, and for demonstrating good corporate citizenship. The quality of its products and customer services make ACC the most preferred brand in the Indian cement industry. ACC Limited is part of the worldwide Holcim Group.

ACC’s brand name is synonymous with cement and enjoys a high level of equity in the Indian market.ACC's operations are spread throughout the country with 17 modern cement factories, more than 50 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.

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

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 endeavors 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. They 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 programs have won it acclaim as a responsible corporate citizen. It was the first cement company to figure in the list of Consumer Super Brands of India.

VALUES VISION/AIM

“ TO BE ONE OF THE MOST RESPECTED COMPANIES IN INDIA DELIVERING SUPERIOR AND SUSTAINABLE VALUE TO ALL OUR CUSTOMER, BUSINESS PARTNERS, SHAREHOLDERS, EMPLOYEES AND HOST COMMUNITIES.”

OBJECTIVES

TO UPLOAD AND PROMOTE THE PRINCIPLESOF INCLUSIVE GROWTH AND EQUITABLE DEVELOPMENT.

TO DEVELOP COMMUNITY DEVELOPMENT PLANS BASED ON NEEDSAND PRIORITIES OF HOST COMMUNITIES AND MEASURE THE EFFECTIVENESS OF COMMUNITY DEVELOPMENT PROGRAMMES.

TO WORK ACTIVELY IN AREAS OF PREVENTIVE HEALTH AND SANITATION, EDUCATION, SKILLS FOR EMPLOYABILITY, LIVLIHOODS AND INCOME GENERATION, WASTE RESOURCES MANAGEMENT AND WATER CONSERVATION FOR HOST COMMUNITIES FOR ENHANCING HUMAN DEVELOPMENT INDEX.

TO COLLABORATE WITH LIKE MINDED BODIES LIKE GOVERNMENTS, VOLUNTARY, ORGANISATIONS AND ACADEMIC INSTITUTES IN PERSUIT OF OUR GOALS.

TO INTERACT REGULARLY WITH STAKEHOLDERS, REVIEW AND PUBLICITY REPORT OUR CSR INITIATIVES

CSR POLICYAPPROVED BY B.O.D

ON MAY 3, 2013

CORPORATE PROFILE

BOARD OF DIRECTORS

1. CHAIRMAN - Mr. N S Sekhsaria

2. DEPUTY CHAIRMAN – Mr. BenardTerver

3. C.E.O & M.D – Mr. Harish Badami

4. Mr. Benard Fontana5. Mr. ShaileshHaribhakti6. Mr. Aidan Lynam7. Mr. Sushil Kumar Roongta8. Mr. AshwinDani9. Mr. Farrokh K Kavarana10.Mr. Vijay Kumar Sharma11.Mr. ArunkumarRamanlal Gandhi12.Mrs. FalguniNayar

CORPORATE OFFICE - Mumbai (Maharashtra)

CEMENT PLANTS

1 Bargarh (Odisha) 2 Chaibasa (Jharkhand) 3 Chanda (Maharashtra)4 Damodhar (West Bengal) 5 Gagal I (HP) 6 Gagal II (HP)7 Jamul (Chhattisgarh) 8 Kudithini (Karnataka) 9 Kymore (MP)10

Lakheri (Rajasthan)11

Madukkarai (TN)12

Sindri (Jharkhand)

13

Thondebhavi (Karnataka)14

Tikaria (UP)15

Vizag (AP)

16

Wadi I (Karnataka)17

Wadi II (Karnataka)

REGIONAL OFFICES1. Eastern Region (Kolkata)2. Northern Region (New Delhi)3. Western Region (Thane)4. Southern Region (Bengaluru)

TRAINING CENTRES1. ACC ACL Leadership Academy, Thane2. ACC Cement Technology Institute, Jamul3. SumantMoolgaokar Technical Institute, Kymore4. ACC School for Technical Skill Development, Wadi

ENHANCING CUSTOMER VALUE

This company follows a Customer Charter that comprises a set of guiding principles to lead us on the path to be a customer-centric organization. Three fundamental commitments ensure that they remain focused on the customer in everything they do:-

They are easy to do business with They keep our promises They create value

In keeping with its’ commitments, the customer charter puts forth three simple objectives for them to follow:

Consistently meet highest product quality standards Consistently serve, support and seek feedback from end-consumer Consistently develop and upskill their channel partners and influences

The main customers they serve are end consumers- individual home builders, industrial, infrastructure and commercial projects and those who use their cement as raw material. But they also serve many others who in turn assist them in reaching and servicing their end consumers- their vast network of channel and supply chain partners, masons, contractors, architects, and engineers.

Foremost in the charter is the demand that they provide a safe and secure environment which ensures zero harm to customers and the communities they deal with, beyond the boundaries of their plants and establishments.

The customer-centric approach is designed to enrich the customer experience and enhance customer value.

A CUSTOMER CENTRIC APPROACH

In adopting a customer-centric approach they mean simply to demonstrate value in everything they do for their customers. They endeavor to give their customers three valuable offerings:

Superior products Superior logistics Superior Query & Complaint Handling

They have strived to ensure that the customer- the most valued our stakeholders – sees and experiences value in everything they do to fulfill his or her needs at every stage, in every transaction, in every interface.

Superior products

This translates into Quality Products and Quality Packaging that are designed to far exceed minimum statutory standards or meet the specifications agreed with the customer. They assure the customer the best in cement and ready mixed concrete

Superior Logistics

They promise to deliver on-time and in full. They continue to make steady progress with their on-going logistics management plan to achieve best-in-class performance in terms of cost-to-serve and time-to-serve, reducing lead distances and eliminating multiple handling through a focus on safety, people, vehicles and processes. A logistics strategy blueprint tool is in place that maps every plant on critical key performance indicators. GPS (Global Positioning Systems) and RFID (Radio Frequency Identification Device) modules have been successfully deployed at eleven and nine plants respectively which is helping improve overall turn-around time.

Superior Query & Complaint Handling

Customer relationship management systems help them to manage interactions and transactions with customers. A multi-nodal system is now in place for complaint logging and handling and targeted cycle closure. They track the resolution of issues and complaints through Loop closures for complaint through the Customer Complaint System. In, addition their frontline sales force now interacts increasingly with end-consumers to understand their expectations through the unique 5Ps survey for feedback on product, packaging, pricing, promotion and placement.

“ KEEP CALM LET THE CUSTOMER SPEAK”

ENRICHING CUSTOMER EXPERIENCE

Their vision requires that they work to ensure that the customer perceives value in all that they do to fulfill his needs in every interface with them. It is this that creates a special customer experience which they strive to enhance. Again, their customer denotes every partner in their supply chain right up to the end user.

Every frontline sales personnel spends a day at a retail counter to observe in-store consumer behavior from the moment a customer enters till the actual purchase is concluded. This helps them to understand the buying process, what a consumer is looking for and the drivers that leads to final purchase.

They conduct regular Consumer Camps and family level meets for the customers in addition to distributing product literature and informative pamphlets on good construction practices. In 2014, their sales offices interacted with 3000 individuals in family meets while 30,000 attended their consumer camps.

Their Customer Service teams also connect with construction engineers and contractors through a mix of engagements such as technical training programs, seminars and plant visits. In 2014, they conducted such training for 8000 persons while 500 persons made visits to our cement plants.

CHANNEL PARTNERS

ACC’s vast network of dealers and retailers, their channel partners, plays a fundamental role in reaching out to customers – in making their cement available and providing primary services to their customers. Channel partners play a vital role in the successful sale of their products. They are central to the continued success of their brand equity. Through their efforts and attentiveness, channel partners are responsible for contributing over three-fourth of their business.

On their part, they endeavor to team up with channel partners who have the required mind-set that makes them responsive to customers. Channel partners work in tandem with their sales teams. They provide them with a range of our quality products and assure them of the marketing, customer service and logistics support they need to succeed in serving the market and delivering value to satisfied customers. They offer them opportunities for skill development and training in product knowledge. They measure their responsiveness to them with tools like Easy Access. And they gauge their satisfaction with them through regular structured surveys. Channel partners act as there valuable ambassadors.

CEMENTING RELATIONSHIP

Going well beyond being a mere tagline, this means so much more to them. Cementing relationships represents the core of their philosophy in the manner they engage with their stakeholders beginning with the customer and all others in their supply chain – their channel and logistics partners, engineers, contractors, masons and other influencers.

They reach out to customers through promotion campaigns in print and electronic media as well as through social media to create continuous visibility that makes a strong brand impact. They track their brand equity regularly to get insights that help them assess how they are perceived and identify areas of improvement.

There sales force and customer service personal regularly connect with customers to meet their needs, thus creating enduring relationships. In addition, other employees are also encouraged to spend a day with customers on a regular basis so that the whole organization is engaged around what the customer needs and values in our products and service. As their network and products reach out to touch the lives of millions of Indians, it is a privilege to receive the customers’ vote of confidence that recognizes ACC as being one of the country’s most trusted brands.

EMBRACING TOMORROW

As the national economy follows a revival path amid countrywide housing, commercial and infrastructure development, new growth prospects open up for cement and concrete. ACC is taking necessary steps to make the organization future ready to enjoy these opportunities as they unfold.

In the past few years they have been busy building the requisite capability and people skills in the organization. A vital component of this journey has been the continuous pursuit of improvements in the key functions of manufacturing, sales & marketing, logistics and procurement.

On the sustainable development front, there is an ongoing thrust on pursuing their commitment to reduce the overall carbon footprint of their operations through the five levers of

a) Manufacturing blended cements that consume less clinker,b) Pursuing continuous improvements in thermal and electrical energy efficiency,c) Adopting waste heat recovery systems,d) Improving the usage of alternative fuels and raw materials ande) Adopting clean and green technologies.

They are equally committed to continue to engage and partner with local communities in their neighborhood through the efforts in promoting basic community development initiatives and in creating sustainable livelihood.

GETTING RECOGNIZED

In 2014, ACC was ranked as No. 1 in “India’s Most Admired Companies” in cement sector for the second consecutive year in the Fortune Hay Group India survey. Another distinction was receiving Gold Shield in the prestigious ICAI Awards for Excellence in Financial Reporting for 2013-2014. There were several awards in other categories – each recognizing excellencein core functional areas that went on to help them better serves their customers.

Of course there can be no greater reward or honor than earning the customer’s trust to give them new business or repeat business. Be they also draw inspiration from any recognition they get from professional bodies and associations. That serves as indicators that they are doing things right. It kindles a competitive spirit which motivates them to pursue continuous improvements and innovation in what they do.

SUBSIDIARY COMPANIES

ACC Mineral Resources Limited

ACC's wholly owned subsidiary, The Cement Marketing Company of India Limited, was renamed as ACC Mineral Resources Limited (AMRL) in May 2009 with an objective of securing valuable mineral resources, such as coal for captive use. ACC Mineral Resources Limited has already entered into Joint Venture arrangements for prospecting, exploration and mining coal from the coal blocks in Madhya Pradesh and West Bengal. The company is also exploring other opportunities for securing additional coal and gypsum resources in India and abroad

The financial highlights of the ACC Mineral Resources Limited For the year ended Dec 31, 2014 is as under:

PARTICULARS2014

AMOUNT RS.

2013 AMOUN

T RS.Total Operating Income

- -

Other income 3,24,77,978 -

Total Income 3,24,77,978 -

LESS:- Operating Expenditure

1,07,96,438 4,73,086

Profit before interest,Depreciation, Amortization Tax & Exceptional Item

2,16,81,540 (4,73,086)

LESS:- Depeciation& Amortization

4,69,174 83,890

LESS:- Finance Cost 5,66,70,460 -

Profit before Tax and Exceptional Item

(3,54,58,094)

(5,57,066)

Exceptional items - -

Profit before Tax(3,54,58,094

)(5,57,066)

The Financial highlights of ACC minerals Resources Limited (cont.)

PARTICULARS2014

AMOUNT RS.

2013 AMOUN

T RS.LESS:- Provision for Taxation (inci. Liability for earlier years)

-

1,000

LESS:- Deferred Tax Liability/assets

- -

ADD:- MAT credit entitlement

- -

Net profit for the year(3,54,58,094

)(5,56,066)

EPS:- Basic & Diluted

(26.06) (1.12)

Bulk Cement Corporation (India) Limited

Situated at Kalamboli, in Navi Mumbai (formerly New Bombay), this company caters to bulk cement requirements of the city of Mumbai and its environs. It has two cement storage silos with a capacity of 5,000 tons each. The plant receives cement in bulk from ACC plants at Wadi. The plant has its own special purpose railway wagons and rakes and its own railway siding. The first of its kind in India, BCCI is equipped with all the facilities required by increasingly sophisticated construction sites in a bustling metropolis, including a laboratory, a fleet of specialized trucks and site silos for the convenience of customers and is capable of offering loose cement in bulk-tanker vehicles as well as packed cement in bags of varying sizes from 1 tonne down to 25 kg bags. BCCI is situated strategically on the outskirts of Mumbai, just off the new Mumbai-Pune Expressway. It is a landmark structure spread over 30 acres of land.

The financial highlights of Bulk cement Corporation (India) Limited for the year ended Dec 31, 2014 is as under:

PARTICULARS2014 2013

RS. Lakh

RS. Lakh

Revenue from operations (net) and other income

2,331.36 1,930.83

Profit Before Tax 629.31 342.14LESS:- Current Tax 212.04 81.86LESS:-Deferred Tax (15.82) (10.66)Profit after Tax 432.99 270.94

Balance brought forward from previous year

1,551.16 1,280.22

Balance carried forward to Balance Sheet

1,984.15 1,551.16

Lucky Minmat Limited

ACC acquired 100 per cent of the equity of Lucky Minmat Private Limited. This company holds limestone mines in the Sikar district of Rajasthan, and helps supplement limestone supply to the Lakheri Plant.

The financial highlights of the LUCKY Minmat Limited (LML) for the year ended Dec 31, 2014 is as under:

PARTICULARS 2014 (RS) 2013 (RS)

Revenue from 12,99,452 11,65,884

operations (net) and Other IncomeProfit / (Loss) Before Tax

(78,55,388) (41,93,499)

Provision for Taxation - -

Profit / (Loss) after Tax (78,55,388) (41,93,499)Balance brought forward from previous year

(1,90,30,904)

(1,48,37,405)


(2,68,86,292)

(1,90,30,904)

National Limestone Company Private Limited

National Limestone Company Private Limited is a wholly owned subsidiary. The company is engaged in the business of mining and sale of limestone. It holds mining leases for limestone in the state of Rajasthan.

The financial highlights of the National Limestone Company Private Limited for the year ended Dec 31, 2014 is as under:

PARTICULARS2014 in

(RS)2013 in

(RS)

Revenue from operations (net) and Other Income

_137

Profit / (Loss) Before Tax(22,94,305)

(17,57,878)


Profit / (Loss) after Tax(22,91,305)

(17,57,878)


(53,95,195)(36,37,317

)


(76,89,500)(53,95,195

)

Singhania Minerals Private Limited

The financial highlights of Singhania Minerals Private Limited for the year ended Dec 31, 2014 is as under:

PARTICULARS2014 in

(RS)2013 in

(RS)

Revenue from operations (net) and Other Income

_ _

Profit / (Loss) Before Tax (2,07,767) (2,63,328)


Profit / (Loss) After Tax (2,07,767) (2,63,328)


(5,53,864) (2,90,536)


(7,61,631) (5,53,864)

Financial highlights of ACC LTD. (IN CRORE)

Particulars 2014 2013 CHANGECHANGE(%

)

INCOME STATEMENTNet Sales 11,481 10889 592 5.4%Operating EBITDA 1,507 1629 (122) (7.4)%Profit before Tax 1,135 1227 (92) (7.4)%Profit after Tax 1,168 1,096 72 6.5%

BALANCE SHEETNet Worth 8,236 7825 411 5.25%Borrowings NIL 35 (35) (100)%Net Fixed Assets 7,513 6324 1,189 18.8%Cash and cash equivalents 1,686 2621 (935) (35.67)%Current Assets 3,485 3476 9 0.25%Current Liabilities 3,900 3726 174 4.66%Capital Employed 8,771 8367 404 4.82%

SIGNIFICANT RATIOSOperating EBITDA margin 13% 15%Average return on Capital Employed 11% 13%Return on Net Worth 14% 14%Current Ratio 0.89 0.93Debts Equity Ratio NIL 0.004

Price Earning Ratio 22.56 18.91 4 19.3%Net worth per share (Rs) 439 416.00 23 5.52%Dividend per share (Rs) 34 30.00 4 13.33%Basic Earnings per share (Rs) 62.23 58.36 4 6.63%Cash Earnings per share (Rs) 91.93 88.93 3 3.37%

CASH FLOWSOperating activities 1332 1,056 276 26.13%Investing activities (1437) (858) (579) 67.48%Financing activities (837) (834) (3) 0.35%

VALUE ADDED STATEMENT (IN CRORE)

PARTICULARS 2014 2013CHANG

ECHANG

E %

Capital employed 8,771 8,367 404 4.82%Avg capital employed 8,569 8,215 354 4.3%

Value AddedNet operating profit afetr taxes 1,168 1,096 72 6.56%LESS:- Cost of capital 1,105 1,084 21 1.93%Value Added 63 12 51 425%

Return on capital employed (%) 14 13.34LESS:- Weighted Average Cost of capital (%) 13 13.2Value Added / Capital employed (%) 1 0.14

Enterprise ValueMarket capitalisation (as at dec,31st) 26,287 20,806 5,481 26.34%ADD:- Debts NIL 35 (35) (100)%LESS:- Cash and cash equivalents 1,686 2,621 (935) (35.67)%Value Added (Enterprise Value) 24,601 18,220 6,381 35.02%Value Added / Yr. End Capital Employed (Times) 3 2.18 1 28.44%

BALANCE SHEET as at December 31, 2014

PARTICULARSNOTE

NO. 2014 2013 CHANGECHANG

E (%)

EQUITY AND LIABILITIESShareholders fundsShare capital 3 187.95 187.95 0 0Reserves and surplus 4 8,047.66 7,636.89 410.77 5.3

8,235.61 7,824.84 410.77 5.24Non-current liabilitiesDeferred tax liabilities (Net) 6 535.57 507.27 28.3 5.57Long-term provisions 7 115.94 106.14 9.8 9.23

651.51 613.41 38.1 6.21Current liabilitiesTrade payables 8 750.23 639.20 111.03 17.37Other current liabilities 9 2,096.71 1,952.44 144.27 7.38Short-term provisions 10 937.27 1,063.70 (126.43) (11.88)

3,784.21 3,655.34 128.87 3.52TOTAL 12,671.33 12,093.59 577.74 4.77

ASSETSNon-current assetsFixed Assets:

Tangible assets 11 5,597.75 5,503.13 94.62 1.71Intangible assets 11 0.64 0.83 (0.19) (22.89)

Capital work-in-progress 1,914.63 819.61 1095.02 133.6Non-current investments 12 290.9 176.81 114.09 64.52Long-term loans and advances 13 855.56 866.83 (11.27) (1.3)

Other non-current assets 14 360.71 308.24 52.47 17.029,020.19 7,675.45 1344.74 17.52

Current assetsCurrent investments 15 1,282.08 2,017.21 (735.13) (36.44)Inventories 16 1,255.59 1,121.47 134.12 11.95Trade receivables 17 410.71 397.22 13.49 3.39Cash and bank balances 18 304.3 503.38 (199.08) (39.54)Short-term loans and advances 19 383.92 359.39 24.53 6.8Others current assets 20 14.54 19.47 (4.93) (25.32)

3,651.14 4,418.14 (767) (17.3)TOTAL 12,671.33 12,093.59 577.74 4.77

Comment on Comparative balance sheet of the year 2014 with 2013

1. EQUITY & LIABILITIES.

Equity and liabilities are raised by (577.74) i.e. (4.7%) from RS.12, 093.59Cr. to RS.12, 671.33Cr. due to the following reasons:

Share-holders funds are raised from 7824.84 to 8235.61 i.e. by 410.77 (5.3%) due to increase in reserves & surplus by 410.77 and share capital being the same.

Non-current liabilities and current liabilities are raised from 613.41 to 651.51 i.e. by 38.1 (6.21%) and 12, 093.59 to 12, 671.33 i.e. by 577.74 (4.7%) respectively.

2. ASSETS.

Assets comprising Non-Current Assets and Current Assets are increased by (4.77 %) which is 577.74 i.e. it raised from 12, 093.59 to 12, 671.33 due to the following reasons

Non-current Assets are raised from 7,675.45 to 9,020.19 i.e. by 1,344.74 which is (17.5%). Fixed assets comprising Tangible Assets have increased from 5,503.13 to 5,597.55 i.e. by 94.62 i.e. (1.7%)

Although the Intangible Assets has decreased by 22.8% the Capital in WIP has rose from 819.61 to 1914.63 i.e. by 1,095.62 i.e. by 133.8% which gives a positive difference in Fixed Assets 2014 and Fixed Assets 2013.

Long-term loans and advances of 2014 are less than that of long-term loans and advances of 2013. But the Non-current investments and other non-current assets increased by 114.09 i.e. by 64.5 and 52.47 i.e. by 17.02 respectively.

When we observe the Current-assets comprising Current investments, Inventories, Trade receivables, Cash and Bank balances, Short term Loans, and Advances and other current assets, we can conclude that it has decreased by 17.3% i.e. from 4,418.14 to 3,651.14.

But when we combine the Current and Non-Current assets we get a positive difference of 557.74 which is (4.77%)

CONCLUSION Non-current Assets > Non-current liabilities Current Liabilities > Current Assets

The co. has to look after the current assets of 2014 which is decreased by RS. 76.7 Cr. than that of Current Assets of 2013.

Particulars Note.No 2014 (IN RS Crore) 2013 (IN RS Crore)

INCOMERevenue from operations (gross) 13,108.18 12,471.74LESS:- Excise Duty 1,369.97 1,322.13Revenue from operations (Net) 21 11,738.21 11,149.61Other Income 22 268.28 285.67Total Revenue 12,006.49 11,435.28

EXPENSESCost of material consumed 23 1,788.31 1,608.80Purchase of traded goods 24 194.33 161.1

Changes in inventories of finished goods, work-in-progress and stock-in-trade

25(11.28) 6.53

Employee benefits expense 26 746.59 661.27Power and fuel 2,441.82 2,375.97Freight and Forwarding expense 27 2,598.33 2,308.87Finance costs 29 82.76 113.55Depreciation and amortization expense 11 557.58 573.95Other expense 28 5,490.51 2,405.74

10,888.95 10,215.78Self Consumption of cement (net of Excise duty) (17.66) (7.46)Total Expenses 10,871.29 10,208.32

Profit before tax 1,135.20 1,226.96Tax expenses

Current tax (262.24) (363.05)Tax adjustments for earlier years 309.23 216.74Deferred tax (13.9) 15.11

33.09 (131.2)Profit for the year (After tax) 1,168.29 1,095.76

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED DEC 31, 2014

Comment on the Comparative profit & loss of the year 2014 with 2013

1. INCOME (Revenue)

The Total revenue of ACC Ltd is increased by 4.94% i.e. RS. 571.21 Cr. due to increase in net revenue from operations by (5.27%) i.e. 588.60 Cr.

2. EXPENSE

The Total expenses of ACC Ltd is increased by 662.97 i.e. by 6.49% which shows a negative sign of the company as the cost of material has increased by (11.15%), Employee benefit expense by (12.90)%, and also the freight and forwarding expenses by (12.53%).

3. As the expenses increased profit before tax has decrease by (7.46%) and due to tax adjustments for earlier years the profit after tax tends to increase by 6.61% as compared to 2013.

CONCLUSION Difference in Total revenue < Difference in Total Expenses Profit before tax of 2014 < Profit before tax of 2013 Tax adjustments for earlier years (2014) > Tax adjustments for earlier years

(2013) due to which Profit after Tax (2014) > Profit after (2013)

Cash Flow Statement for the year ended Dec 31, 2014

Particulars2014 (IN RS Crore)

2013 (IN RS Crore) Change

Change (%)

A . Cash flow from operating activitiesNet profit before taxation 1,135.20 1,226.96 (91.76) (7.47)Adjustments for :-Depreciation and Amortization 557.58 573.95 (16.37) (2.85)Impairment Loss - 11.93 (100)Loss / (Profit) on sale / write off of fixed assets (Net)

15.88 3.85 12.03 312.46

Provision for diminution in the value of investment and investment written off

4.82 17.86 (13.04) (73.01)

Gain on sale of current invesments (Net) (41.45) (59.47) 18.02 (30.3)Dividend income (9.86) (6.59) (3.27) 49.62Interest income (216.97) (219.61) (2.64) 1.2Finance Costs 82.76 113.55 (30.79) (23.05)Provision for doubtful debts and advances 15.88 7.62 8.26 108.39Bad debts written off 4.6 0.67 3.93 586.56Provision for slow and non moving stores & spares parts

13.72 18.48 (4.76) (25.76)

Provision no longer required written back (45.85) (13.92) (31.93) 229.38Capital Spares Consumed 9.05 23.22 (14.17) (61.02)Operating profit before working capital changes

1,525.36 1,698.50 (173.14)

(10.19)

Changes in working capital:Adjustments for Decrease / (Increase) in operating assets:

Decrease / (Increase) in Trade receivable, loans & advances and other assets (196.9) (299.54) 102.64 (34.260)

Decrease / (Increase) in Inventories (147.84) (6.4) (141.44)

2210

Adjustments for increase / (Decrease) in Operating liabilities:

Increase / (Decrease) in Trade payable, Other liabilities and Provisions 386.46 113.07 273.39 241.78

Cash generated from operations 1,567.08 1,505.63 61.45 4.08Direct tax paid - (Net of Refunds) (235.38) (449.4) 214.02 (47.62)Net cash flow from operating activities 1,331.70 1,056.23 275.47 26.08

Cash Flow Statement for the year ended Dec 31, 2014 (contd.)

Particulars 2014 (IN RS Crore)

2013 (IN RS Crore) Change Change

%

B. Cash Flow from investing activitiesLoans to subsidiary companies -75.76 -24.79 -50.97 205.6Payment received against loan given to subsidiaries

109.73 - 109.73 -

Purchase of Fixed Assets (Including Capital Work-in-progress and Capital Advances) -1,527.00 -947.77 -579.23 -61.11

Proceeds from sale of Fixed Assets 2.58 7.29 -4.71 -64.6Proceeds from sale of current invesments (Net) 41.45 59.47 -18.02 -30.3Purchase of Investments in subsidiary companies -118.91 - -118.91 -Investment in Bank deposits (having original maturity for more than 3 months)

-7.87 -119.3 111.43 -93.4

Dividend Received 9.86 6.59 3.27 49.62 Interest Received 129.23 160.77 -31.54 -19.61Net cash used in investing activities -1,436.69 -857.74 -578.95 67.49

Cash Flow Statement for the year ended Dec 31, 2014 (contd.)

Particulars2014 IN RS.

(Crore)2013 IN RS.

(Crore) ChangeChange

%

C. Cash flow from financing activitiesFinance Costs -49.07 -50.52 1.45 -2.87Repayment of Long term borrowings -35.03 -128.03 93 -72.63Dividend paid -644.51 -560.2 -84.31 15.04Dividend Distribution Tax paid -108.48 -95.72 -12.76 13.33Net Cash used in financing activities -837.09 -834.47 -2.62 0.31

Net increase / (decrease) in cash and cash equivalents

-942.08 -635.98 -306.1 48.13

Cash and cash equivalents at the beginning of the year 2,499.07 3,135.05 -635.98 -20.28Cash and cash equivalents at the end of the year 1,556.99 2,499.07 -942.08 -37.69Components of cash and cash equivalents:Cash on hand 0.12 0.12 - -Balance with banksOn current accounts 37.64 55.68 -18.04 -32.39On deposit accounts 105.28 288.02 -182.74 -63.44Earmarked for specific purpose 31.87 38.04 -6.17 -16.21Cash and cash equivalents 174.91 381.86 -206.95 -54.19ADD : Investments in Mutual Funds 350 1,062.00 -712 -67.04ADD : Investments in Certificate of Deposits 932.08 955.21 -23.21 -2.42ADD : Deposit with HDFC Limited 100 100 - -Cash and cash equivalents in cash flow statement 1,556.99 2,499.07 -942.08 -37.69

FINANCIAL ANALYSIS OF ACC LIMITED

The following table sets fourth the breakup of the company’s expenses as part of the Revenue from operations (Net)

Figures in RS. Crore

2014% of Revenue

from operations

2013% of Revenue

from operations

Revenue from operations (net) 11,738.21 100.00% 11,149.61 100%Other income 268.28 2.29% 285.67 2.56%Cost of material consumed 1,788.31 15.23% 1,608.80 14.43%Purchase of traded goods 194.33 1.66% 161.1 1.44%Changes in inventories of finished goods, work-in-progress and Stock-in-trade (11.28) (0.10%) 6.53 0.06%

Employee benefits expense 746.59 6.36% 661.27 5.93%Power and fuel 2,441.82 20.80% 2,375.97 21.31%Freight and Forwarding expense 2,598.33 22.14% 2,308.87 20.71%Finance costs 82.76 0.71% 113.55 1.02%Depreciation and amortization 557.58 4.75% 573.95 5.15%other expenses 2,472.85 21.07% 2,398.28 21.15%Profit before tax 1,135.20 9.67% 1,226.96 11.00%

1. REVENUE FROM OPERATIONS (NET):

2014 2013 Change Change%

Cement and Clinker 10,720.28 10,233.17 487.11 4.76%Ready mix Concrete 740.8 639.63 101.17 15.82%Sale of services 19.97 16.28 3.69 22.67%Other operating revenue 257.16 260.53 (3.37) (1.29%)Revenue from operations (net) 11,738.21 11,149.61 588.6 5.28%

Revenue from operations has increased by 5% due to following reasons:-

Net sale of cement and clinker has registered a growth of 4.76 % Sale volume of Ready Mixed Concrete has increased by 15.82%

2. OTHER INCOME:


Other Income 268.28 285.67 (17.39) (6.09%)

Other income consists of interest on bank deposits, Interest on Income tax, Gain on sale of current investments and Dividend from long term investments.

During the year, the company has utilized the surplus cash for Jamul and Sindri Projects which has resulted into lower interest income and gain on sale of investment by Rs 17.39 Crore in current year over previous year.

3. COST OF MATERIAL CONSUMED:


Cost of material consumed 1,788.31 1,608.80 179.51 11.16%

Cost of material consumed has increased due to following reasons:

Cement production during current year recorded an increase of 1.6% over previous year. Ready Mixed Concrete production has increased by 23% i.e. from 15.96 Lakh cubic

meters to 19.65 Lakh cubic meters. Fly ash prices increased by 11%.

4. PURCHASE OF TRADED GOODS:


Cement 121.91 68.6 53.31 77.71%Ready mix concrete 72.42 92.5 (20.08) (21.71%)TOTAL 194.33 161.1 33.23 20.63%

Although the purchase of Ready mix concrete has decreased by 21.71%. purchase of cement has increased by 77.71% due to the following reasons:

Purchase of cement from Ambuja Cements Limited has increased by Rs 65 Crore. While the company has discontinued the trading of cement from Shiva Cement Limited which has resulted into decrease in cement purchase by Rs 20 Crore as compared to previous year.

5. POWER AND FUEL:


Power and fuel 2,441.82 2,375.97 65.85 2.77%

Power and fuel cost has increased marginally due to following reasons:

Coal cost for kiln increased by 3.6% in 2014 over 2013. Coal cost for captive power plants increased by 10%

6. EMPLOYEE BENEFITS EXPENSE:


Employee Benefits expense 746.59 661.27 85.32 12.90%

Employee benefits expense has increased due to following reason:

Retirement benefits provision has increased due to decrease in discounting rate from 8.85% to 7.90%. Total impact of increase in employee benefit provision / expenses are approx Rs 28 Crore as compared to previous year.

7. FREIGHT AND FORWARDING EXPENSE:


On inter unit Clinker transfer 393.81 277.52 116.29 41.90%On finished products - Cement 2,136.50 1,973.59 162.91 8.25%Ready mixed Concrete 68.02 57.76 10.26 17.76%TOTAL 2,598.33 2,308.87 289.46 12.54%

Freight and Forwarding expenses has increased due to following reasons:

Hike in rail & road freight. Freight on cement has gone up due to increase in cement sale volume. Freight on clinker transfer has gone up on account of long lead time movement of clinker.

8. OTHER EXPENSES:


Consumption of packing materials 483.67 434.15 49.52 11.41%Repairs 171.54 161.44 10.1 6.26%Royalty on Minerals 129.82 118.28 11.54 9.76%Discount on sales 93.27 88.28 4.99 5.65%Rates and Taxes 141.13 120.13 21 17.48%Advertisement 106.82 116.07 (9.25) (7.97%)Excise Duties 4.37 6.47 (2.1) (32.46)%Rent 33.83 30.51 3.32 10.88%Insuarance 24.62 25.29 (0.67) (2.65)%Consumption of Stores and spares 361.99 375.49 (13.5) (3.60)%Technology and Know-how fees 112.91 107.66 5.25 4.88%Miscellaneous Expenses 826.54 821.97 4.57 0.56%TOTAL 2,490.51 2,405.74 84.77 3.52%

Other expenses has increased on account of following reasons:

Consumption of packing material cost has increased mainly due to increase in average price of bags by 6%.

Due to temporary suspension of limestone mining operation royalty rate on limestone increased from Rs 63 to Rs 80

Rates and Taxes have increased mainly due to additional goods tax rate in Himachal Pradesh which has increased from Rs 130/ton to Rs 150/ton. Entry tax on cement has also increased due to local body tax in the state of Maharashtra.

9. DEPRECIATION AND AMORTIZATION EXPENSE:


Depreciation and Amortization expense 557.58 573.95 (16.37) (2.82)%

Depreciation expense has decreased due to following reason:

Reduction in depreciation on account of retirement of assets and useful life of some assets are fully depreciated in the previous year.

10. FINANCE COSTS:


Finance costs 48.7 51.67 (2.97) (5.75)%Interest on Income tax 34.06 61.88 (27.82) (44.96)%TOTAL 82.76 113.55 (30.79) (27.12)%

Finance costs comprise interest on debentures, interest on income tax and other interest.Finance costs has decreased due to following reasons:

During the year, the company has redeemed debentures of Rs 32 Crore. Interest on debentures has decreased by Rs 3.92 Crore as compared to the previous year.

Interest on Income tax has decreased by Rs 27.82 Crore.

11. FIXED ASSETS


Tangible assets 5,597.75 5,503.13 94.62 1.72%Intangible assets 0.64 0.83 (0.19) (22.89)%Capital Work in progress 1,914.63 819.61 1,095.02 133.60%TOTAL 7,513.02 6,323.57 1,189.45 18.81%

Capitalization of Waste Heat Recovery System (WHRS) at Gagal, Coal handling system at Wadi and purchase of mining and non-mining freehold land for projects, resulted in marginal increase in tangible assets.

Capital Work-in-Progress has gone up mainly on account of capital expenditure incurred for Jamul and Sindri projects.

12. INVESTMENTS:


Non-Current investments 290.9 176.81 114.09 64.52%Current invesments 1,282.08 2,017.21 (735.13) (36.44)%TOTAL 1,572.98 2,194.02 (621.4) (28.31)%

Non-current investments in current year has increased by 64.52% over precious year . Current investment has decreased due to surplus fund used for Jamul and Sindri projects.

13. LOANS AND ADVANCES:


Long- terms loans and advances 855.56 866.83 (11.27) (1)%Short-term loans and advances 383.92 359.39 24.53 7%TOTAL 1,239.48 1,226.22 13.26 1%

Long-term loans and advances decreased mainly due to decrease in Capital advance for Jamul and Sindri projects which is partly offset by increase in Advance of income tax (Net)

Short term loans and advance has increased due to following reasons: Advances for supply of Raw material has gone up by Rs 30 Crore. Increase in balance with statutory / government authorities by Rs 25 Crore.

14. INVENTORIES:


Raw materials 139.07 132.9 6.17 5%

Work-in-progress 240.32 252.85 (12.53) (5)%Finished Goods 153.75 129.82 23.93 18%Stock-in-trade 0.37 0.49 (0.12) (24)%Stores & Spares Parts 262.53 274.64 (12.11) (4)%Packing Materials 20.02 21.49 (1.47) (7)%Fuels 439.53 309.28 130.25 42%TOTAL 1,225.59 1,121.47 134.12 12%

Increase in inventories of the current year is recorded as 12% over the previous year.

Fuel inventory has increased mainly due to stoppage of clinkerisation activities which was due to temporary suspension of limestone mining operation.

15. TRADE RECEIVABLES:


Trade receivables- Cement 244.77 269.53 (24.76) (9)%Trade receivables - Ready Mixed Concrete 165.94 127.69 32.25 30%TOTAL 410.71 397.22 13.49 3%

Trade receivable for cement has decreased due to better realization. The average collection days outstanding for cement sales as on December 31, 2014 is 5 as compared to 6 as on December 31, 2013.

Increase in concrete business trade receivable in 2014 is mainly due to increase in sales.

The average collection days outstanding for concrete business as on December 31, 2014 is 59 as compared to 62 as on December 31, 2013.

16. OTHER ASSETS:


Other non-current assets 360.71 308.24 52.47 17%Other current assets 14.54 19.47 (4.93) (25)%TOTAL 375.25 327.71 47.54 15%

During the current year , the other non-current assets has increased by 17 % due to accrual of incentive receivables from government under various incentives schemes.

Other current assets have decreased by 25% due to decrease in interest accrued on investments.

17. OTHER CURRENT LIABILITIES;


Current maturities of Long-term borrowings - 35.03 (35.03) (100)%Interest accrued but not due on borrowings - 0.64 (0.64) (100)%Unpaid dividend & Deposit 31.89 38.06 (6.17) (16)%Statutory dues 324.27 314.33 9.94 3%Advance from customers 131.94 144.85 (12.91) (9)%Security deposits and retention money 624.48 514.35 110.13 21%Liability for capital expenditure 131.09 70.06 61.03 87%Other payables 853.04 835.12 17.92 8%TOTAL 2,096.71 1,952.44 144.27 7%

During the current year, the company has repaid the borrowing of Rs 35.03 Crore. Statutory dues & Security deposits are increased by 3% & 21% respectively There is no significant change in other payables Liability for capital expenditure has increased due to Jamul and Sindri Projects.

18. PROVISIONS:


Long-term provisions 115.94 106.14 9.5 9%Short-term provisions 937.27 1,063.70 (126.43) (12)%TOTAL 1053.21 1,169.84 (116.63) (10)%

Long-term provisions have gone up by 9% due to increase in provision for employee benefits. The increase is on account of change in discounting rate.

Short-term provisions has decreased by 12% due to following reasons:

Increase in provision for Leave encashment by Rs 19 Crore mainly due to decrease in discounting rate considered for valuation.

19. TRADE PAYABLES:


Trade payables 750.23 639.2 111.03 17.37%

Increase in trade payable is in line with increase in business activities. Trade payable of concrete business has increased by Rs 34 Crore.

20. CASH FLOW:


Net cash flow from operating activities 1,331.70 1,056.23 275.47 26.08%

The net cash from operating activities is increased as compared to previous year due to following reasons:

The cash operating profit before working capital changes has decreased by Rs 173 Crore. Reduction in working capital by Rs 42 Crore, as compared to an increase by Rs 193

Crore in the previous year. Cash outflow from direct tax paid is Rs 235 Crore, as compared to Rs 449 Crore in the

previous year


Net cash used for investing activities (1,436.69) (857.74) (578.95) 67.50%

Cash outflow from investment activities has increased mainly on account of purchase of fixed assets for Jamul and Sindri projects.


Net cash used for financing activities (837.09) (834.47) (2.62) 0.31%

Payment of dividend and dividend tax increased by Rs 97 Crore as compared to previous year, increase is offset by lower repayment of borrowings by Rs 93 Crore as compared to previous year.

BALANCE SHEET RATIOS

1. Current Ratio : It is the ratio of Current Assets to Current liabilities.

It is also known as “cash asset ratio” and “cash ratio”.

Formula: Current ratio = Current Assets / Current liabilities.

The standard current ratio is 2:1.

Current Ratio speaks about the short term solvency position of the company.The ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health,

Current Ratio of the ACC Ltd can be calculated as follows:

Current Ratio (2014) = Rs 3,651.14 (in crore) / Rs 3,784.21 (in crore) = 0.96 Current Ratio (2013) = Rs 4,418.14 (in crore) / Rs 3,655.34 (in crore) = 1.20

When we compare the current ratio (2014) with the current ratio (2013) we can say that current ratio (2014) < current ratio (2013). This indicates that the short- term solvency position of ACC Ltd has fallen down.As in 2013, Current assets > current liabilities, while in 2014, Current assets < Current liabilities. Where it shows that in 2014, the company would be unable to pay off its obligations if they come due at such point.

This ratio is similar to the acid-test ratio except that the acid-test ratio does not include inventory and prepaids as assets that can be liquidated. The components of current ratio (current assets and current liabilities) can be used to derive working capital (difference between current assets and current liabilities). Working capital is frequently used to derive the working capital ratio, which is working capital as a ratio of sales.

2. Quick Ratio: It is the ratio of Quick assets to Quick Liabilities. It is also known as Liquid Ratio or Acid Test Ratio or Quick Assets Ratio. Formula: Quick ratio = Quick Assets / Quick Liabilities.

Where Quick Assets excludes inventories and prepaid expenses.

The quick ratio is more conservative than the current ratio because it excludes inventories from current assets. The ratio derives its name presumably from the fact that assets such as cash and marketable securities are quick sources of cash. Inventories generally take time to be converted into cash, and if they have to be sold quickly, the company may have to accept a lower price than book value of these inventories. As a result, they are justifiably excluded from assets that are ready sources of immediate cash.

Whether “accounts receivable” is a source of ready cash is debatable, however, and depends on the credit terms that the company extends to its customers. A firm that gives its customers only 30 days to pay will obviously be in a better liquidity position than one that gives them 90 days. But the liquidity position also depends on the credit terms the company has negotiated from its suppliers. For example, if a firm gives its customers 90 days to pay, but has 120 days to pay its suppliers, its liquidity position may be reasonable.

The other issue with including accounts receivable as a source of quick cash is that unlike cash and marketable securities – which can typically be converted into cash at the full value shown on the balance sheet – the total accounts receivable amount actually received may be slightly below book value because of discounts for early payment and credit losses.

The Standard Ratio is 1:1.

Quick Ratio speaks about the liquidity position of the company.

Quick ratio of ACC Ltd can be calculated as follows:

Quick Ratio (2014) = Rs 3,650.77 (in crore) / Rs 3,784.21 (in crore) = 0.96

Quick Ratio (2013) = Rs 4,417.65 (in crore) / Rs 3,655.34 (in crore) = 1.20

When we compare the Quick ratio (2014) with the Quick ratio (2013) we can say that Quick Ratio (2014) < Quick Ratio (2013). This indicates that the liquidity position of ACC Ltd has fallen down.

3. Proprietary Ratio : It is the ratio of proprietor fund to total assets of the company

The proprietary ratio is also known as the equity ratio or the net worth to total assets ratio.

Formula: Proprietary Ratio = Proprietor’s fund / Total assets * 100

Proprietary Ratio speaks about the proportion of total assets financed by proprietor.

It provides a rough estimate of the amount of capitalization currently used to support a business. If the ratio is high, this indicates that a company has a sufficient amount of equity to support the functions of the business, and probably has room in its financial structure to take on additional debt, if necessary. Conversely, a low ratio indicates that a business may be making use of too much debt or trade payables, rather than equity, to support operations (which may place the company at risk of bankruptcy).

Proprietary Ratio of ACC Ltd can be calculated as follows:

Proprietary Ratio (2014) = Rs 8,235.61 (in crore) / Rs 12,671.33 (in crore) * 100= 64.99%

Proprietary Ratio (2013) = Rs 7,824.84 (in crore) / Rs 12,093.59 (in crore) * 100= 64.70%

When we compare the Proprietary Ratio (2014) with the Proprietary Ratio (2013) we can conclude that there is no significant increase/decrease in the proportion of total assets financed by proprietor.A slight change of 0.29% is observed in the Proprietary ratio (2014) as compared to Proprietary ratio (2013).While observing the above proprietary ratio we can say that the company is safe from bankruptcy and the company is not using too much of debts and trade payables.This ratio is not necessarily a good indicator of long-term solvency, since it does not make use of any information on the income statement, which would indicate profitability or cash flows.

4. Capital bearing Ratio : It is a ratio of funds bearing fixed rate of interest and dividend to funds not bearing fixed rate of interest and dividend

Formula: Capital bearing Ratio = Funds bearing fixed rate of interest and dividend / funds not bearing fixed rate of interest and dividend.

It speaks about the proportion of borrowed funds and preference share holders funds to equity shareholders funds

Capital bearing Ratio of ACC Ltd can only be calculated for the year 2013 because there are no borrowings done in the year 2014 Capital bearing Ratio (2013) = Rs 35 (in crore) / Rs 7,824.84 (in crore) = 0.004 (Low Graded)As in the year 2014 the debts of previous year are paid, thus the borrowings are nil. Hence the Capital bearing Ratio (2014) is nil.

Finally, we can consul that the proportion of borrowed funds and preference share holders funds to equity shareholders funds of 2014 is less than the proportion of borrowed funds and preference share holders funds to equity shareholders funds of 2013.

Thus, capital bearing Ratio (2014) < capital bearing Ratio (2013).

Capital gearing ratio is the measure of capital structure analysis and financial strength of the company and is of great importance for actual and potential investors.Borrowing is a cheap source of funds for many companies but a highly geared company is considered a risky investment by the potential investors because such a company has to pay more interest on loans and dividend on preferred stock and, therefore, may have to face problems in maintaining a good level of dividend for common stockholders during the period of low profits.Banks and other financial institutions reluctant to give loans to companies that are already highly geared

5. Debt-equity Ratio : It is the ratio of debt to equity

Also known as the Personal Debt/Equity Ratio, this ratio can be applied to personal financial statements as well as corporate ones.

This ratio is the measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets.

A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense.

If a lot of debt is used to finance increased operations (high debt to equity), the company could potentially generate more earnings than it would have without this outside financing. If this were to increase earnings by a greater amount than the debt cost (interest), then the shareholders benefit as more earnings are being spread among the same amount of shareholders. However, the cost of this debt financing may outweigh the return that the company generates on the debt through investment and business activities and become too much for the company to handle. This can lead to bankruptcy, which would leave shareholders with nothing.

Formula: Debt-equity ratio = Debt / Equity

This ratio speaks about the proportion of Debt and proportion of Equity. It may be higher or lower. The standard Ratio is 2:1.

Debt-Equity Ratio of ACC Ltd can be calculated as follows:

Debt-Equity Ratio (2013) = Rs 35 (in crore) / Rs 7,824.84 (in crore)= 0.004

As in the year 2014 the debts of previous year are paid, thus the borrowings are nil. Hence the Debt-Equity Ratio (2014) is nil.

Finally, we can consul that the proportion of Debt to Equity (2014) is less than the proportion of Debt to Equity (2013).

Thus, Debt-Equity Ratio (2014) < Debt-Equity ratio (2013)

6. Stock to Working capital Ratio : It is the ratio of closing stock to working capital.

Formula: Stock to Working capital Ratio = Closing stock / Working capital * 100

This ratio speaks about the amount of Working Capital which is block in inventories (stock)

This ratio is an important indicator of a company’s operation efficiency. A low value of 1 or less of inventory to working capital means that a company has high liquidity of current asset. While it may also mean insufficient inventories. A high value inventory to working capital ratio means that a company is carrying too much inventory in stock. It is not favorable for management because excessive inventories can place a heavy burden on the cash resources of a company. A key issue for a company to improve its operation efficiency is to identify the optimum inventory levels and thus minimize the cost tied up in inventories.

Stock to working capital ratio of ACC Ltd can be calculated as follows:

Stock to working capital ratio (2014) = Rs 394.44 (in crore) / Rs (133.07) (in crore) * 100

= (296.41) %

Stock to working capital ratio (2013) = Rs 383.16 (in crore) / Rs 762.83 (in crore) * 100

= 50.62 %

In 2013, 50.62% of the working capital was block in inventoriesWhile in 2014, the working capital is negative due to current liabilities over current assetsSo there is no question of blocking of working capital in inventories in the year 2014.

http://strategiccfo.com/wikicfo/current-assets/

Revenue Statement Ratio

1. Gross profit ratio: This ratio indicates profit ability of the company or organization it is expressed in the form of percentage of gross profit to net sales.

It is a popular tool to evaluate the operational performance of the business . The ratio is computed by dividing the gross profit figure by net sales.

When gross profit ratio is expressed in percentage form, it is known as gross profit margin or gross profit percentage. The formula of gross profit margin or percentage is given below:

Formula: Gross profit ratio = Gross profit / Net Sales * 100

The basic components of the formula of gross profit ratio (GP ratio) are gross profit and net sales. Gross profit is equal to net sales minus cost of goods sold. Net sales are equal to total gross sales less returns inwards and discount allowed. The information about gross profit and net sales is normally available from income statement of the company.

The Gross profit ratio of ACC Ltd can be calculated as follows:

Gross profit ratio (2014) = Rs 1250 (in crore) / Rs 11481 (in crore) * 100= 10.88 %

Gross profit ratio (2013) = Rs 1368 (in crore) / Rs 10889 (in crore) * 100= 12.56 %

When we compare the above gross profit ratios it indicates that the profitability of the company in the year 2014 has decreased as compared to the profitability of the company in the year 2013. This shows that the operational performance is getting down.

Gross profit is very important for any business. It should be sufficient to cover all expenses and provide for profit.There is no norm or standard to interpret gross profit ratio (GP ratio). Generally, a higher ratio is considered better.The ratio can be used to test the business condition by comparing it with past years’ ratio and with the ratio of other companies in the industry. A consistent improvement in gross profit ratio over the past years is the indication of continuous improvement . When the ratio is compared with that of others in the industry, the analyst must see whether they use the same accounting systems and practices.

2. Operating ratio: This ratio explains the relationship between operating expenses and sales.

Formula: cost of goods sold + operating expenses / net sales * 100

The basic components of the formula are operating cost and net sales. Operating cost is equal to cost of goods sold plus operating expenses. Non-operating expenses such as interest charges, taxes etc., are excluded from the computations

The Operating Ratio of ACC Ltd can be calculated as follows:

Operating ratio (2014) = R.s 10230 (in crore) / R.s 11481 (in crore) * 100

= 89.10%

Operating ratio (2013) = R.s 9520 (in crore) / R.s 10889 (in crore) * 100

= 87.42%

This ratio is used to measure the operational efficiency of the management. It shows whether the cost component in the sales figure is within normal range. A low operating ratio means high net profit ratio i.e., more operating profit.The ratio should be compared: (1) with the company’s past years ratio, (2) with the ratio of other companies in the same industry. An increase in the ratio should be investigated and brought to attention of management. The operating ratio varies from industry to industry.

While in ACC ltd the cost component in the sales figure is not within the normal stage which is the (+) for the company.

3. Operating net profit ratio : This ratio gives the relation between net operating profit and sales.

Operating net profit ratio is calculated by dividing the operating net profit by sales. This ratio helps in determining the ability of the management in running the business.

Formula: Operating net profit ratio = (Operating profit / Net sales) *100

Where, Operating profit = Gross profit - Operating Expenses

Or

Operating profit = Net sales – Operating cost

Or

Operating Profit= Net sales – (cost of goods sold – Operating + Administrative and office expenses + Selling and distribution exp.)

The Operating Net profit ratio of ACC Ltd can be calculated as follows:

Operating net profit ratio (2014) = R.s 1507 (in crore) / R.s 11481 * 100 = 13.12%

Operating net profit ratio (2013) = R.s 1629 (in crore) / R.s 10889 * 100= 14.96%

When we compare the above operating net profit we can consul that the ability of the management in running the business is getting poor as the operating net profit ratio (2014) has decreased by 2% as compared to the operating net profit ratio (2013).

The operating profit margin ratio is a key indicator for investors and creditors to see how

businesses are supporting their operations. If companies can make enough money from their

operations to support the business, the company is usually considered more stable. On the

other hand, if a company requires both operating and non-operating income to cover the

operation expenses, it shows that the business' operating activities are not sustainable.

A higher operating margin is more favorable compared with a lower ratio because this shows

that the company is making enough money from its ongoing operations to pay for its variable

costs as well as its fixed costs.

http://www.accountingexplanation.com/operating_profit_ratio.htm

4. Net profit ratio : This ratio gives the relationship between net profit and sales.

It is computed by dividing the net profit (after tax) by net sales.

For the purpose of this ratio, net profit is equal to gross profit minus operating expenses and income tax. All non-operating revenues and expenses are not taken into account because the purpose of this ratio is to evaluate the profitability of the business from its primary operations. Examples of non-operating revenues include interest on investments and income from sale of fixed assets. Examples of non-operating expenses include interest on loan and loss on sale of assets.The relationship between net profit and net sales may also be expressed in percentage form. When it is shown in percentage form, it is known as net profit margin.

Net profit (NP) ratio is a useful tool to measure the overall profitability of the business. A high ratio indicates the efficient management of the affairs of business.There is no norm to interpret this ratio. To see whether the business is constantly improving its profitability or not, the analyst should compare the ratio with the previous years’ ratio, the industry’s average and the budgeted net profit ratio.The use of net profit ratio in conjunction with the assets turnover ratio helps in ascertaining how profitably the assets have been used during the period.

Formula : Net profit Ratio = Net profit After tax / Net sales *100

The Net profit ratio of ACC Ltd can be calculated as follows:

Net profit ratio (2014) = R.s 1168 (in crore) / R.s. 11481 (in crore) * 100

= 10.17%

In the year 2014 10.17% of the sales was profit.

Net profit ratio (2013) = R.s 1096 (in crore) / R.s 10889 ( in crore) * 100

= 10.06%

In the year 2013 10.06% of the sales was profit

There is no significant change in the net profit ratio of 2014 as compared to net profit ratio of 2013. This ratio indicates that there is an efficient management of the affairs of the business. But the profitability of the business in 2014 is same as it in 2013.

The above figures of net profit ratio show that the assets have been used profitably during these 2 years (2013 & 2014).

5. Stock turnover ratio: This ratio indicates how many times stock is turn into sales. It is also known as velocity ratio.

The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is managed by comparing cost of goods sold with average inventory for a period.

This ratio is important because total turnover depends on two main components of performance. The first component is stock purchasing. If larger amounts of inventory are purchased during the year, the company will have to sell greater amounts of inventory to improve its turnover. If the company can't sell these greater amounts of inventory, it will incur storage costs and other holding costs.

The second component is sales. Sales have to match inventory purchases otherwise the

inventory will not turn effectively. That's why the purchasing and sales departments must be

in tune with each other.

Inventory turnover is a measure of how efficiently a company can control its merchandise, so

it is important to have a high turn.

Formula: Stock turnover ratio = Cost of goods sold / average stock

where, average stock = (opening stock + closing stock) / 2

The stock turnover ratio of ACC Ltd can be calculated as follows:

Stock turnover ratio (2014) = R.s 10231 (in crore) / R.s 389 (in crore)

= 26.3

Stock turnover ratio (2013) = R.s 9520.82 (in crore) / R.s 386 (in crore)

= 24.66

From the above figures of the ratio we can say that

The company does not overspend by buying too much inventory and wastes resources by storing

non-salable inventory. It also shows that the company can effectively sell the inventory it buys.

This measurement also shows investors how liquid a company's inventory is. This measurement

shows how easily a company can turn its inventory into cash.In 2014 it is 26 times that the stock had turned into sales while in 2013 it is 25 times the stock is turned into sales. This statistics shows that how efficient and effective are the sales unit to the ACC Ltd.

Combined Ratio

1. Return on capital employed : The return on capital employed measures the proportion of adjusted earnings to the amount of capital and debt required for a business to function. For a company to remain in business over the long term its return on capital employed should be higher than its cost of capital; otherwise, continuing operations gradually reduce the earnings available to shareholders. It is commonly used to compare the efficiency of capital usage of businesses within the same industry.

The return on capital employed is a better measurement than return on equity, because

ROCE shows how well a company is using both its equity and debt to generate a return.

It is the ratio of net profit to the capital employed by the proprietor in the business. It expresses the profitability in the overall investments.

Formula : Return on capital employed = Net profit before interest & tax / total

net assets * 100

Where, total net assets = total assets – current liabilities

The ROCE of the ACC Ltd can be calculated as follows:

ROCE (2014) = R.s 1135 (in crore) / R.s 8887.12 (in crore) * 100

= 12.77%

ROCE (2013) = R.s 1227 (in crore) / R.s 8438.25 (in crore) * 100

= 14.54%

From the above figures of ROCE (2014 & 2013) we can say that the capital usage in 2013 was more efficient than that of in the year 2014.as compared to 2014 the company was using its equity & debts more effectively in the year 2013.

The ROCE has decreased by approx. 2% as compared to the 2013.

2. Return on proprietor fund : It is also known as share proprietor equity.It gives an idea about the return expected on proprietor’s contribution in the business.It is calculated after declining interest and tax from the net profit.It is the ratio of net profit after tax to the proprietor’s fund.

Formula: ROPF ratio = Net profit after tax / proprietary fund * 100

The ROPF of the ACC Ltd can be calculated as follows:

ROPF (2014) = R.s 1168 (in crore) / R.s 8236 (in crore) * 100

= 14.18%

ROPF (2013) = R.s 1096 (in crore) / R.s 7825 (in crore) * 100

= 14%

As we can see that there is no significant change in ROPF (2014) as compared to ROPF (2013). The company must strive to raise the ROPF by using the proprietary fund more effectively.

3. Return on equity capital and Return on equity shareholders funds : This ratio indicates profit available to equity shareholders and return expected equity shareholder.The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.

Formula: ROEC = Net profit after tax and preference dividend / equity capital * 100

Return on equity capital and return on equity shareholders’ funds of ACC Ltd can be calculated as follows:

ROCE (2014) = Rs 1168 (in crore) / Rs 8236 (in crore) * 100

= 14 %

ROCE (2013) = Rs 1096 (in crore) / Rs 7825 (in crore) * 100

= 14 %

When we compare the above two ROEC i.e. of 2014 with 2013 we can consul that there is no significant change between those ROEC. This indicates that the profit available to equity shareholders and return expected equity shareholders (2014) is same as that of in (2013). The profit generated by the company by investing shareholders’ money is 14%.

4. Earning per share: This ratio indicates earnings or returns which equity shareholder will get per share.

The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability.

Earnings per share are generally considered to be the single most important variable in determining a share's price. It is also a major component used to calculate the price-to-earnings valuation ratio.

An important aspect of EPS that's often ignored is the capital that is required to generate the earnings (net income) in the calculation. Two companies could generate the same EPS number, but one could do so with less equity (investment) - that company would be more efficient at using its capital to generate income and, all other things being equal, would be a "better" company. Investors also need to be aware of earnings manipulation that will affect the quality of the earnings number. It is important not to rely on any one financial measure, but to use it in conjunction with statement analysis and other measures.

Formula: Earning per share: Net profit available for equity shareholders /

No. of equity share.

The Earning per share of ACC Ltd can be calculated as follows:

Earnings per share (2014) = R.s 1168.29 (in crore) / 18, 77, 45,356

= R.s 62.22

Earnings per share (2013) = R.s 1095.76 (in crore) / 18, 77, 45,336

= R.s 58.36

Comparing the above two ratios we can consul that the earnings per share has increased considerably which is R.s (3.86) per share. This indicates that the company’s profitability has increased.

5. Dividend Payout Ratio : It is also known as payout ratio. It measures the relationship between the earning belonging to the ordinary shareholders and dividend paid to them.

In other words, this ratio shows the portion of profits the company decides to keep to

fund operations and the portion of profits that is given to its shareholders.

Formula: Dividend payout Ratio = E.P.S ( Earnings per share) / Dividend per share.

The dividend payout ratio of ACC Ltd can be calculated as follows:

Dividend Payout Ratio (2014) = R.s 34 / R.s 62 * 100

= 55%

Dividend Payout Ratio (2013) = R.s 30 / R.s 58 * 100

= 52%

The above Stats shows that the earning belonging to the ordinary shareholders 2014 and

the dividend paid per share are more than that of in 2013.

The portion of profits the company decided to keep to fund operations and the portion of

profits that is given to its shareholders is raised by 3%.

6. Price earnings ratio : This ratio indicates price paid by market for each rupee of earning

per share.

It is also known as ‘price multiple’ ratio or ‘earnings multiple’ ratios.

Generally a high P/E ratio means that investors are anticipating higher growth in the future.

The average market P/E ratio is 20-25 times earnings.

The P/E ratio can use estimated earnings to get the forward looking P/E ratio.

Companies that are losing money do not have a P/E ratio.

Formula: Price earnings ratio = Market price of a share / Earning per share * 100

The price earnings ratio of ACC Ltd can be calculated as follows:

Price earnings ratio (2014) = R.s 1403.68 / R.s 62.23 * 100 = 22.56

Price earnings ratio (2013) = R.s 1103.78 / R.s 58.36 * 100 = 18.81

The above ratios states that the price paid by the market for each rupee of earning per share

to the ACC Ltd.is increased R.s 3 per share. This shows that the ACC Ltd is earning money

in a greater proportion which helps to build a strong financial position.

7. Debt service ratio: This ratio indicates the company’s ability to make payment of interest and installments of long term debt out of its net profit. In other words, this ratio compares a company's available cash with its current interest, principle, and sinking fund obligations.

The debt service coverage ratio is important to both creditors and investors, but creditors

most often analyze it. Since this ratio measures a firm's ability to make its current debt

obligations, current and future creditors are particularly interest in it.

Creditors not only want to know the cash position and cash flow of a company, they also

want to know how much debt it currently owes and the available cash to pay the current

and future debt.

Unlike the debt ratio, the debt service coverage ratio takes into consideration all expenses

related to debt including interest expense and other obligations like pension and sinking

fund obligation. In this way, the DSCR is more telling of a company's ability to pay its

debt than the debt ratio.

Formula: Debt service ratio = (Net profit before interest and tax + Depreciation + Amortization) / (Interest + Principal Repayment)

The Debt service of ACC Ltd. Can be calculated as follows:Debt service Ratio (2014) = R.s 1852.58 (in crore) / R.s 134.28 (in crore)

= R.s 13.79

Debt service Ratio (2014) = R.s 1741.48 (in crore) / R.s 134.28 (in crore)

= R.s 12.96

The above ratios indicates that the ACC Ltd.’s ability to make payment off interest and installments of long-term debt out of its profit has improved . This ensures that their ability to fulfill its debt obligations, current and future creditors are particularly interest in it has become strong. This Ratio will help the company to borrow funds in future needs more efficiently.

http://www.myaccountingcourse.com/financial-ratios/debt-ratio

8. Debt turnover ratio : The time required for conversion of debtors into cash is called as debtors turnover ratios. It indicates the credit enjoyed by customer.

It's an efficiency ratio or activity ratio that measures how many times a business can turn its

accounts receivable into cash during a period. In other words, the accounts receivable

turnover ratio measures how many times a business can collect its average accounts

receivable during the year.

This ratio shows how efficient a company is at collecting its credit sales from customers.In

some ways the receivables turnover ratio can be viewed as a liquidity ratio as well.

Companies are more liquid the faster they can convert their receivables into cash

Formula: Debt turnover ratio = Net credit sales / Average debtors or Average B/R

The debt turnover ratio of ACC Ltd can be calculated as follows:

Debt turnover ratio (2014) = R.s 11481 (in crore) / R.s 410.71 (in crore)

= R.s 27.95

Debt turnover ratio (2013) = R.s 10889 (in crore) / R.s 397.22 (in crore)

= R.s 27.41

The above stats show that how frequently the company are collecting their receivables throughout the year. Thus, the company was able to pay their debt of 35 crore in 2014.

Debtors’ turnover ratio also is an indication of the quality of credit sales and receivables. ACC Company with a higher ratio shows that credit sales are more likely to be collected than a company with a lower ratio.

In 2013 Debt turnover ratio was 27.41 from which has increased to 27.95 in 2014 which denotes the strength of ACC Ltd.

http://www.myaccountingcourse.com/financial-ratios/efficiency-ratios

(Conclusion)

With the help of the financial report discussed before I came to the following SWOT Analysis of ACC Ltd.

Strengths of ACC Ltd. Weaknesses / (Challenges) For ACC Ltd.

1Holds the NO. 1 position in cement industry in India in terms of installed capacity.

Higher power & fuel consumption & Raw material cost.

2Higher Blended cement ratio @ 91%.

Optimize the capacity utilization and evaluate the material in the market .

3 Lower clinker cement ratio @ 65%. Delays in projects implementation.

4 Strong & dedicated manpower. Minimize clinker purchases.

5

Strong Balance sheets with strong cash flow position.

The competitors are doing much promotional activity rather than ACC Limited that’s why it facing more problems in selling of product in the market.

6Strong position of cash & cash equivalents.

Lack of awareness program for consumers.

7Having a good image and brand loyalty among consumers.

8 Service is good

9 People ask for ACC

10They have same price prevailing for wholesale at dealers/stockiest retailers end

11 There is no debts for the company

Opportunities for ACC Ltd Threats before ACC Ltd.

1

Rapid growth is taking place in Bihar and Madhya Pradesh

Large number of players in cement industry makes it more competitive for ACC to carefully price its product and at the same time satisfy its dealers and customers.

2

People are opting for more stable structures and intensive use of cement is taking place, even government is spending heavily on infrastructure projects. Thus, this is the right time to fully tap these markets

Players such as Jaypee Cement, Prism Cement, and Birla Samrat are eating up considerable market share.

3

As Indian core industry is also growing at rate of nearly 10% per annum, it is having a good future.

Due to India’s exponential growth many new international cement companies are expected in coming years which will bring a tide of change and can start price war.

4

Foreign direct investment in infrastructure sector going to increase in coming years, which will increase the demand of cement.

The emergence of small players in this market may increase the competition and start the malpractices, and heavy discounts to retailers. They can also influence many retailers by giving better profit margin, and other Benefits.

5

Roads are undergoing through the transformation process through which the traditional method of road building will be replaced by modern concrete roads.

(REFERENCES)

For Primary Data

1. Lokesh Jain (Sir) (Guidance).2. ACC’s 78th & 79th Annual report. 3. ACC’s public journal (Latest edition)

Books referred.1. Cost Management – By Saxena & Vashist2. Cost and Management Accounting – By Ravi N Kishore3. Essentials of Management Accounting – By P. N Reddy4. Advanced Management Accounting – By Robert S Kailar5. Management Accounting – Khan & Sani

Net Surfing sites.1. www.acclimited.com 2. www.wikipedia.com 3. www.bms.co.in 4. www.investopedia.com 5. www.myaccountingcourse.com 6. www.accountingcoach.com

http://www.accountingcoach.com/

http://www.myaccountingcourse.com/

http://www.investopedia.com/

http://www.bms.co.in/

http://www.wikipedia.com/

http://www.acclimited.com/

ACC Ltd.

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