Cement Industry Analysis and Key Players in India

Table of Contents
Industry Analysis and Trend........................................................................................................... 4

Introduction to the companies......................................................................................................... 7
ACC Ltd...................................................................................................................................... 8
UltraTech Cements Ltd............................................................................................................. 10
Financial Highlights...................................................................................................................... 11 A)
Sales.................................................................................................................................... 12 B) Profit
before depreciation, interest and tax .......................................................................... 13 C) Profit
before depreciation and tax........................................................................................ 14 D) Profit after
tax ...................................................................................................................... 15 E) Dividend per
Share............................................................................................................... 16 F) Earnings per
share (Basic).................................................................................................... 17 G) Book Value per
Share.......................................................................................................... 18 H) Net
Worth ............................................................................................................................ 19 I) Total
Assets ........................................................................................................................... 20 Accounting
Policies ...................................................................................................................... 21 ACC
Ltd.................................................................................................................................... 22 UltraTech
Cements Ltd............................................................................................................. 28 Capital
Structure Analysis ............................................................................................................ 38 ACC
Ltd.................................................................................................................................... 39 UltraTech
Cements Ltd............................................................................................................. 42 Share Holding
Pattern ................................................................................................................... 45 ACC
Ltd.................................................................................................................................... 46 UltraTech
Cements Ltd............................................................................................................. 49 Ratio
Analysis............................................................................................................................... 52 1
Liquidity Ratios ........................................................................................................................ 54

Current Ratio......................................................................................................................... 55
Quick Ratio (Acid - Test Ratio)............................................................................................ 56
Leverage Ratios ........................................................................................................................ 57
Debt - Equity Ratio ............................................................................................................... 58

Capital Employed to Net worth Ratio................................................................................... 59 Fixed
Interest Coverage Ratio .............................................................................................. 60
Profitability Ratios .................................................................................................................... 61
Net Profit Ratio..................................................................................................................... 62
Operating Profit Ratio........................................................................................................... 63
Operating Ratio..................................................................................................................... 64
Expenses Ratio...................................................................................................................... 65
Return on Shareholders Funds OR Return on NW.............................................................. 66
Return on Total Assets.......................................................................................................... 67
Return on Capital Employed (ROCE) .................................................................................. 68
Turnover Ratios ........................................................................................................................ 69
Inventory Turnover Ratio ..................................................................................................... 70 Fixed
Assests Turnover Ratio............................................................................................... 71 Working
Capital Turnover Ratio .......................................................................................... 72 Total Assets
Turnover Ratio ................................................................................................. 73 Net Worth
Turnover Ratio.................................................................................................... 74 Debtors
Turnover Ratio ........................................................................................................ 75 Valuation
Ratios........................................................................................................................ 76 Dividend
Yield Ratio ............................................................................................................ 77 Dividend
Payout Ratio.......................................................................................................... 78
Price Earnings Ratio ............................................................................................................. 79

Earnings per Share ................................................................................................................ 80
Dividend per Share ............................................................................................................... 81
Common size Statement ............................................................................................................... 82
UltraTech Cements Ltd............................................................................................................. 83 ACC
Cements Ltd..................................................................................................................... 85 Awards
and Achievements ........................................................................................................... 87 ACC
Ltd.................................................................................................................................... 88 UltraTech
Cements Ltd............................................................................................................. 90
Conclusion .................................................................................................................................... 95
Annexure....................................................................................................................................... 97
Industry Analysis and Trend
Cement being the most necessary components in any kind of construction activity, the cement
industry plays a crucial role in developing a countrys infrastructure. Construction activities
carried out by Central Government, State Governments, Public Sector Undertaking, and other
organizations including the private sector generate a huge demand for cement because of the
vast geographical size and massive population of India.
The Indian cement industry is the second largest cement producer in the world next to
China. Indias share in the total production of cement is the world is around 6%. It
consists of 154 large cement plants with an installed capacity of 230.82 million tons per
annum employing 135,000 people directly.
The cement production growth touched a peak of 12% in 2009-10, as against 7.9% in 2008-09.
The Indian cement industry is likely to achieve a capacity of 298 million tons per annum by the
end of 2011-12. According to the Ministry of Industrial Policy and Promotion an investment of
approximately Rs. 500 crore is required for creating a capacity of 1 million ton.
According to the Ministry of Industrial Policy and Promotion, cement industry in India
recorded a commendable growth of around 8% in 2007-08, as well as in 2008-09. In
2009-10, the pace of growth of the industry accelerated above double digit.
Production from large plants (with capacity of above 1 million ton per annum) account to
88% of the total production.
The major players in the Indian cement industry are
A.C.C. Ltd.
Grasim Industries Ambuja Cements Ltd. UltraTech Cements Ltd. India Cements
Jaypee Group Shree Cement J.K. Group Madras Cements Century Textiles Dalmia Cement
Market
S. No.
Group
Installed Capacity as on
Cement Production
Share
(%)
1
A.C.C. Ltd.
22.41
20.95
10.73
2
Grasim Industries
19.65
16.32
9.82
3
Ambuja Cements Ltd.
18.30
18.01
9.44
4
UltraTech Cement Ltd.
21.90
15.86
8.53
5
India Cements
10.74
9.11
5.11
6
Jaypee Group
9.93
8.05
4.95
7
Shree Cement
9.10
7.78
4.72
8
J.K. Group
9.37
7.50
4.06
Madras Cements
8.92
6.27
4.04
10
Century Textiles
7.80
7.22
3.83
11
Dalmia Cement
6.50
3.38
2.12
Introduction to the companies
ACC Ltd
ACC (ACC Limited) is India's foremost manufacturer of cement and concrete. ACC's operations
are spread throughout the country with 16 modern cement factories, more than 40 Ready mix
concrete plants, 21 sales offices, and several zonal offices. It has a workforce of about 9,000
persons and a countrywide distribution network of over 9,000 dealers.
Since inception in 1936, the company has been a trendsetter and important benchmark for
the cement industry in many areas of cement and concrete technology. ACC has a unique
track record of innovative research, product development and specialized consultancy
services. The company's various manufacturing units are backed by a central technology
support services centre - the only one of its kind in the Indian cement industry.
ACC has rich experience in mining, being the largest user of limestone. As the largest
cement producer in India, it is one of the biggest customers of the domestic coal industry, of
Indian Railways, and a considerable user of the countrys road transport network services
for inward and outward movement of materials and products.
Among the first companies in India to include commitment to environmental protection as one of
its corporate objectives, the company installed sophisticated pollution control equipment as far
back as 1966, long before pollution control laws came into existence. Today each of its cement
plants has state-of-the art pollution control equipment and devices.
ACC plants, mines and townships visibly demonstrate successful 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. We run two institutes that offer
professional technical courses for engineering graduates and diploma holders which are
relevant to manufacturing sectors such as cement. The main beneficiaries are youth
from remote and backward areas of the country.
ACC has made significant contributions to the nation building process by way of quality
products, services and sharing expertise. Its commitment to sustainable development, its high
ethical standards in business dealings and its on-going efforts in community welfare programs
have won it acclaim as a responsible corporate citizen. ACCs brand name is synonymous with
cement and enjoys a high level of equity in the Indian market. It is the only cement company
that figures in the list of Consumer Super Brands of India.
UltraTech Cements Ltd
UltraTech Cement Limited has an annual capacity of 48.8 million tons. It manufactures and
markets Ordinary Portland Cement, Portland Blast Furnace Slag Cement and Portland
Pozzalana Cement. It also manufactures ready mix concrete (RMC).
The company has 11 integrated plants, one white cement plant, one clinkerisation plant
in UAE, 15 grinding units 11 in India, 2 in UAE, one in Bahrain and Bangladesh each
and five terminals four in India and one in Sri Lanka.
UltraTech Cement is the countrys largest exporter of cement clinker. The export
markets span countries around the Indian Ocean, Africa, Europe and the Middle East.
UltraTech's subsidiaries are Dakshin Cements Limited, Harish Cements Limited, UltraTech Cement
Lanka (Pvt.) Ltd, and UltraTech Cement Middle East Investments Limited.
10
Financial Highlights
11
14000.00
12000.00
10000.00
(In
Crore)
8000.00
6000.00
A) Sales
Rs.
Sales
4000.00
2000.00
0.00
2005-06 2006-07 2007-08 2008-09 200910 2010-11
Sales of
Ultrarech
Sales of
ACC
12
B) Profit before depreciation,

interest and tax
Rs. (In Crore)
PBDIT
3000.00
2000.00
2
5
0
0
.
0
0
PBDIT of ACC
P
B
D
I
T
o
f
U
l
t
r
a
r
e
c
h
1500.00
0.00
1
0
0
0
.
0
0
2005-06 2006-07 2007-08 2008-09 2009-10

2010-11
5
0
0
.
0
0
13
C)
Profi
t
befo
re
depr
ecia
tion
and
tax
PB
DT
3000.00
2500.00
Crore)
2000.00
1500.00
Rs. (In
1000.00
500.00
0.00
2005-06 2006-07 2007-08 200809 2009-10 2010-11
PBDT
of ACC
PBDT of Ultrarech
14
1200.
00
1000.
00
800.0
0
Rs.
D) Profit after tax
PAT
600.0
0
1800.00
400.0
0
1600.00
1400.00
200.0
0
(In Crore)
0.00
2005-06 2006-07 2007-08 200809 2009-10 2010-11
PAT
of
Ultrar
ech
PAT
of
ACC
15
E)
Divi
den
d
per
Sha
re
Dividend Per
Share
5.00
0.00
35.00
30.00
25.00
per Share
20.00
15.00
Rs.
10.00
200506
200607
200708
200809
200910
201011
DPS
of
Ultrar
ech
DPS
of
ACC
16
90.00
80.00
70.00
Share
60.00
50.00
F) Earnings per share

(Basic)
Rs. per
EPS
40.00
100.00
30.00
20.00
10.00
0.00
2005-06 2006-07 2007-08 200809 2009-10 2010-11
EPS
(Basic) of
Ultrarech
EPS
(Basic) of
ACC
17
G) Book Value per Share
100.00
450.00
50.00
400.00
350.00
(In Crore)
300.00
250.00
200.00
Rs.
150.00
0.00
Book
Value
per
Share
Book Value
per Share of
Ultrarech
Book Value
per Share of
ACC
18
6000.00
Rs. (In
4000.00
H) Net Worth
Net Worth
12000.00
10000.00
Crore)
8000.00
2000.00
0.00
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
Net
Worth of
Ultrarech
Net
Worth of
ACC
19
I) Total Assets
Total Assets
1
1
1
1
1
8
6
4
R 2
s
U
T l
o
t
a
l
A
s
s
e
t
s
o
f
re
ch
Tot
al
As
se
ts
of
AC
C
0.00
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
20
Accounting Policies
21
ACC Ltd.
(I) Basis of preparation
The financial statements of the Company are prepared under the historical cost convention on
accrual basis of accounting and in accordance with the accounting principles generally accepted
in India and in compliance with the provision of the Companies Act, 1956 and comply with the
mandatory accounting standards (AS) specified in Companies (Accounting Standard) Rules,
2006 prescribed by the Central Government of India.
Financial statements are based on historical cost and are prepared on accrual basis,
except where impairment is made and revaluation is carried out.
Accounting policies have been consistently applied by the Company.
(II) Use of estimates
The preparation of financial statements in conformity with generally accepted accounting

principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent liabilities at the date
of the financial statements and the results of operations during the reporting period end.
Although these estimates are based upon managements best knowledge of current events
and actions, actual results could differ from these estimates.
(III) Significant Accounting Policies
A) Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will
flow to the Company and the revenue can be reliably measured.
Sale of goods
22
Revenue is recognized when the significant risks and rewards of ownership of the
goods have passed to the buyer.
Income from jobs and other services rendered is accounted for as per the terms of contract. Interest
and Dividend Income Interest income is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable. Dividend income is recognized when the
shareholders right to receive dividend is established by the Balance Sheet Date.
B) Accounting of claims
Claims receivable are accounted at the time when such income has been earned by the
Company depending on the certainty of receipts. Claims payable are accounted at the
time of acceptance.
Claims raised by Government Authorities regarding taxes and duties, which are
disputed by the Company, are accounted based on the merits of each claim.
C) Fixed assets
Fixed assets are stated at cost of acquisition or construction less accumulated

depreciation, impairment losses.
Depreciation
The useful life of transit mixers and pumps is estimated at 8 years and 6 years respectively.
Buildings, civil cost and installations are estimated to have useful life of 10 years. These assets are
depreciated over the useful life on straight line method on a pro-rata basis. The above assets, if
transferred from ACC Limited, under the business purchase agreement, are depreciated over the
remaining useful life considering the period for which ACC Limited has already used such assets.
Useful life of certain assets is tailored based upon the commercial agreements and the carrying
amount of such assets is allocated over their useful life. In case of Plant & Machinery and Electrical
installation at the Ready mixed concrete plants, depreciation has been provided on
23
triple shift basis for the entire year even though the plants have worked only double and
single shifts at various times, based on assessment of estimated useful life.
All other assets are depreciated on the straight line method at the rates prescribed in
Schedule XIV of the Companies Act, 1956, on a pro-rata basis.
(iii) Cost of leasehold land is amortized over the period of lease.
D) Intangibles
Software cost is amortized over a period of three years.
E) Impairment
An impairment loss is charged to the Profit and Loss Account wherever the carrying amount
of an asset exceeds its estimated recoverable amount. Previously recognized impairment
loss is further provided or reversed depending on changes in circumstances.
Expenditure during construction period In case of new projects expenditure incurred,

including trial production expenses net of revenue earned, prior to commencement of
commercial production are capitalized.
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.
H) Leases
24
Lease payments under operating lease are recognized as an expense in the Profit and
Loss Account on a straight-line basis over the lease term.
I) Inventories
Raw materials, fuel, stores and spares are valued at 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.
Net realizable value is the estimated selling price in the ordinary course of business, less
estimated costs of completion and estimated costs necessary to make the sale.
J) Foreign currency transactions
Foreign currency transactions are recorded at the rates of exchange prevailing on the date of
transactions. Foreign currency monetary items are reported using the closing rate. Nonmonetary 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 companys monetary items at rates
different from those at which they were initially recorded during the year, or reported in previous
financial statements, are recognized as income or as expenses in the year in which they arise.
K) Employee benefits
(i) Defined Contribution Plan
Defined contribution plan consists of Government Provident Fund Scheme and

Employee State Insurance scheme. Companys contribution paid / payable during the
year under these schemes are charged to Profit and Loss Account. There are no other
obligations other than the contribution made by the company.
25
(ii) Defined Benefit Plan
Companys liabilities towards gratuity, additional gratuity and long term compensated absences
are the defined benefit plans. Companys liabilities towards these are determined using the
projected unit credit method which considers each period of service as giving rise to an
additional unit of benefit entitlement and measures each unit separately to build up the final
obligation. Actuarial gain and losses are recognized immediately in the statement of Profit and
Loss account as income or expense. Obligation is measured at the present value of estimated
future cash flow using a discount rate that is determined by the reference to market yields at the
Balance Sheet date on Government bonds.
(iii) Other employee benefit
Companys liability towards silver jubilee and long service awards is determined on the
basis of period of service as at Balance Sheet Date.
L) 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 Tax 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 recognized 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 realized. In situations where the Company has unabsorbed
depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is
virtual certainty supported by convincing evidence that they can be realized against future
taxable profits. Deferred Tax Assets are reviewed at each Balance Sheet date.
26
M) Contingencies / Provisions
A provision is recognized 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.
27
UltraTech Cements Ltd.
Significant Accounting Policies:
1. Basis of Accounting:
The financial statements are prepared and presented under the historical cost convention on
accrual basis of accounting in accordance with the Generally Accepted Accounting Principles
(GAAP) in India and comply in all material aspects with the Accounting Standards (AS) notified
under the Companies (Accounting Standard) Rules, 2006 (as amended), to the extent
applicable, other pronouncements of the Institute of Chartered Accountants of India and with the
relevant provisions of the Companies Act, 1956.
2. Use of estimates:
The preparation of financial statements in conformity with the GAAP requires estimates and
assumptions to be made that affect the reported amounts of assets and liabilities on the
date of the financial statements, the reported amounts of revenues and expenses during the
reported period and the disclosures relating to contingent liabilities as of the date of the
financial statements. Any revision to accounting estimates is recognized prospectively in the
current and future periods. Difference between actual results and estimates are recognized
in the period in which the results are known or materialize.
3. Fixed Assets:
Fixed assets, whether tangible or intangible, are stated at cost less accumulated depreciation/
impairment loss (if any), net of Modvat/Cenvat (wherever claimed). The cost of fixed assets
includes taxes, duties, freight and other incidental expenses incurred in relation to their
acquisition and bringing the assets for their intended use. Advances paid towards the acquisition
of fixed assets outstanding at each balance sheet date and the cost of fixed assets not ready for
their intended use before such date are disclosed under capital work-in-progress. Fixed Assets
held for disposal are stated at lower of net book value and net realizable value.
28
4. Treatment of expenditure during construction period:
Expenditure/Income, during construction period is included under Capital-Work-inProgress and the same is allocated to the respective Fixed Assets on the completion of
their construction.
5. Foreign Currency Transactions:
Transactions denominated in foreign currency are recorded at the exchange rate

prevailing on the date of the transaction. Monetary assets and liabilities denominated in
foreign currency at the balance sheet date are translated at the year-end rates.
In respect of Forward exchange contracts, premium or discount, being the difference

between the forward exchange rate and the exchange rate at the inception of contract is
recognized as expense or income over the life of the Contract.
Exchange difference including premium or discount on forward exchange contracts,

relating to borrowed funds, liabilities and commitments in the foreign currency for
acquisition of fixed assets, arising till the assets are ready for their intended use, are
adjusted to cost of fixed assets. Any other exchange difference either on settlement or
translation is recognized in the Profit and Loss account.
Investment in equity capital of companies registered outside India is carried in the

Balance Sheet at the rates at which transactions have been executed.
6. Derivatives:
Financial Derivative Instruments
Derivative instruments are used to hedge risk associated with foreign currency fluctuations and
interest rates. The derivative contracts are closely linked with the underlying transactions and are
intended to be held to maturity. These are accounted on the date of their settlement and realized
gain/loss in respect of settled contracts is recognized in the Profit and Loss Account. Commodity
29
Hedging The realized gain or loss in respect of commodity hedging contracts, the pricing period of
which has expired or contracts cancelled during the year are recognized in the Profit and Loss
Account. However, in respect of contracts, the pricing period of which extends beyond the Balance
Sheet date, suitable provision for likely loss, if any, is made in the accounts.
7. Investments:
Investments are classified into long term investments and current investments. Longterm investments are carried at cost after deducting provisions made, if any, for
diminution in value of investments other than temporary, determined separately for each
individual investment. Current investments are carried at lower of cost and fair value,
determined separately for each individual investment.
8. Inventories:
Inventories are valued at the lower of weighted average cost and estimated net
realizable value except waste/scrap which is valued at net realizable value. Cost of
finished goods and process stock includes cost of conversion and other costs incurred
in bringing the inventories to their present location and condition.
9. Depreciation and Amortization:
Depreciation is charged in the Accounts on the following basis:
(A) Tangible Assets:
(i) Depreciation is provided on the straight-line basis at the rates and in the manner prescribed
in Schedule XIV to the Companies Act, 1956 except for some of assets at the rates based on
the useful life of the assets as determined by the management, which are higher than the rates
specified in Schedule XIV to the Companies Act, 1956, as stated under:
30
Company Vehicles other than those provided to the employees at 20% per annum.
Roads, Culverts, Walls, Buildings etc. within factory premises at 3.34% per annum.
Computer and Office Equipments at 25% per annum
Furniture and Fixtures 7 years
Mobile Phones 3 years
Motor Cars given to the employees as per the Companys Scheme are depreciated over
the Scheme period.
Assets acquired up to September 30, 1987, are depreciated at the rates prevailing at
the time of acquisition.
The value of leasehold land and mining lease is amortized over the period of the lease.
Assets not owned by the Company are amortized over a period of five years or the
period specified in the agreement.
Expenditure incurred on Jetty is amortized over the period of the relevant agreement such that the
cumulative amortization is not less than the cumulative rebate availed by the Company.
Depreciation on additions is provided on a pro-rata basis from the month of installation

or acquisition and in case of project from the date of commencement of commercial
production, while depreciation on deductions/disposals is provided on a pro-rata basis
up to the month proceeding the month of deductions/disposals.
Depreciation is charged on Straight Line basis at UltraTech Cement Middle East

Investment Limited and its subsidiaries at following rates.
31
Tangible Assets:
No. of Years
Buildings (including improvements)
3-15
Plant and equipment
2-20
Furniture, fixtures and office equipment
1-5
Motor vehicles
3-5
Amortization of intangible Assets
8.5
(B) Intangible Assets:
Specialized software is amortized over a period of 3 years.
10. Impairment of Assets:
The carrying amounts of assets are reviewed at each balance sheet date if there is an indication of
impairment based on the internal and external factors. An asset is treated as impaired when the
carrying cost of the asset exceeds its recoverable amount. An impairment loss, if any, is charged to
the Profit and Loss Account in the year in which the asset is identified as impaired. Reversal of
impairment loss recognized in prior years is recorded when there is an indication that impairment
loss recognized for the asset no longer exists or has been decreased.
Employee Benefits:
Short term employee benefits.
Short term employee benefits are recognized as an expense on accrual at the

undiscounted amount in the Profit and Loss Account.
32
(ii) Defined Contribution Plan
Contributions payable to recognize provident fund and approved superannuation scheme,

which are defined contribution plans, are recognized as expense in the Profit and Loss
Account; as they are incurred. Contributions as specified by the law are paid to the
provident fund set up as irrevocable trust by the holding company. The Company is
generally liable for annual contribution and any shortfall in the fund assets based on the
Government specified minimum rates of return and recognizes such contribution and
shortfall, if any, as an expense in the year incurred.
(iii) Defined Benefit Plan
The obligation in respect of defined benefit plans, which cover Gratuity, Pension and Post
retirement medical benefits, are provided for on the basis of an actuarial valuation, using the
projected unit credit method, at the end of each financial year. Gratuity is funded with an
approved fund. Actuarial gains/losses, if any, are recognized immediately in the Profit and Loss
Account. Obligation is measured at the present value of estimated future cash flows using a
discount rate that is based on the prevailing market yields of Government of India securities as
at the balance sheet date for the estimated term of the obligations.
(iv) Other Long Term Benefits
Long-term compensated absences are provided for on the basis of an actuarial valuation, using
the projected unit credit method, at the end of each financial year. Actuarial gains/losses, if any,
are recognized immediately in the Profit and Loss Account.
12. Borrowing Costs:
Borrowing costs that are attributable to the acquisition or construction of a qualifying asset are
capitalized as part of the cost of such asset till such time the asset is ready for its intended use. A
qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its
intended use. All other borrowing costs are recognized as an expense in the
33
period in which they are incurred. The difference between the face value and the issue
price of Discounted Value Non-Convertible Debentures, being in the nature of interest,
is charged to the profit and loss account, on a compound interest basis determined with
reference to the yield inherent in the discount.
13. Taxation:
Current Tax is measured on the basis of estimated taxable income for the current
accounting period and tax credits computed in accordance with the provisions of the
Income Tax Act, 1961. Deferred Tax resulting from timing differences between book
and taxable profit for the year is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the balance sheet date. Deferred tax
assets are recognized and carried forward only to the extent that there is reasonable
certainty, except for carried forward losses and unabsorbed depreciation which is
recognized based on virtual certainty, that the assets will be realized in future.
Revenue Recognition:
Sales Revenue is recognized on transfer of significant risks and rewards of ownership

of the goods to the buyer. Sales are net of Sales Tax, VAT, trade discounts, rebates and
returns but include excise duty.
Income from services is recognized as they are rendered, based on

agreement/arrangement with the concerned parties.
Dividend income on investments is accounted for when the right to receive the payment is
established. Interest income is recognized on accrual basis.
Export Incentives, insurance, railway and other claims, where quantum of accruals cannot be
ascertained with reasonable certainty, are accounted on acceptance basis.
34
15. Mines Restoration Expenditure:
The Company provides for the estimated expenditure required to restore quarries and mines.
The total estimate of restoration expenses is apportioned over the estimate of mineral reserves
and a provision is made based on minerals extracted during the year. The total estimate of
restoration expenses is reviewed periodically, on the basis of technical estimates.
16. Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognized when there is a present obligation as a result of past events and it is
probable that an outflow of resources will be required to settle the obligation, in respect of which a
reliable estimate can be made. These are reviewed at each Balance Sheet date and adjusted to
reflect the current best estimate. Contingent Liabilities are not recognized but are disclosed and
Contingent Assets are neither recognized nor disclosed, in the financial statements.
17. Employees Share based payments:
The Company follows intrinsic value method for valuation of Employees Stock Options.
The excess of the market price of shares at the time of grant of options, over the
exercise price to be paid by the option holder is considered as employee compensation
expense and is amortized in the Profit and Loss account over the period of vesting,
adjusting for the actual and expected vesting.
18. Earnings Per Share:
The basic Earnings Per Share (EPS) is computed by dividing the net profit after tax for the year
attributable to the equity shareholders by the weighted average number of equity shares outstanding
during the year. For the purpose of calculating diluted earnings per share, net profit after tax for the
year attributable to the equity shareholders and the weighted average number of
35
equity shares outstanding during the year is adjusted for the effects of all dilutive
potential equity shares.
Government Grants and Subsidies:
Government grants and subsidies are recognized when there is reasonable assurance
that the Company will comply with the condition attached thereto and that the grants will
be received.
Capital Government Grants or Subsidies relating to specific fixed assets are deducted
from the gross value of the respective fixed assets and capital grants for projects are
credited to Capital Reserve.
Revenue Government Grants or Subsidies relating to an expense item are recognized

as income over the period to match them on a systematic basis to the costs or deducted
from related expenses.
Segment Reporting Policies:
Primary Segment is identified based on the nature of products and services, the different risks
and returns and the internal business reporting system. Secondary segment is identified based
on geography in which major operating divisions of the Company operate.
21. Research and development expenditure:
Revenue expenditure on research and development is expensed as incurred. Capital

expenditure incurred on research and development is capitalized as fixed assets and
depreciated in accordance with the depreciation policy of the Company.
22. Operating lease:
36
Leases where significant portion of the risks and rewards of ownership are retained by
the lessor are classified as operating leases and lease rentals thereon are charged to
the Profit and Loss Account
23. Goodwill:
Goodwill arising out of consolidation of financial statements of Subsidiaries and joint

Ventures is not amortized. However the same is tested for impairment at each Balance
Sheet Date.
37
Capital Structure Analysis
38
Unsecured
Dec '08
ACC
Ltd.
Secured Loans
Loans
Share Capital
1%
8%
3%
Share Capital
Reserves and Surplus
Secured Loans
Unsecured Loans
Reserves and
Surplus
88%
Reserves and Surplus amount to 88% of the capital
Equity Capital amounts to 3% of the capital
Loans amount to 9% of the capital
It shows that the company is highly efficient as it relies

mostly on the funds generated by it. Loans are used to have
the benefits of leverage.
39
Unsecured
Dec '09
Loans
0%
Share Capital
Secured Loans
3%
8%
Share Capital
Secured Loans
Unsecured Loans
Reserves and
Surplus
89%
Reserves and Surplus amount to 89% of the capital
Equity Capital amounts to 3% of the capital
Loans amount to 8% of the capital
No major change is observed in the capital structure. Reserves and

Surplus have increased by 1% and Loans have reduced by 1%.
40
Dec
'10
Unsec
ured
Secure
d
Loans
Loans
Share
Capita
l
7%
0%
3%
R
e
s
e
r
v
e
s
a
n
d
Surplu
s
90%
L
o
a
n
s
a
m
o
u
n
t
t
o
7
%
o
f
t
h
Reser
e
ves
c
and
Surplu a
s
p
amoun it
t to
a
90% of
l
the
capital
Equit
y
Capit
al
amou
nts to
3% of
the
capita S
h
l
a
r
e
Capita
l
Reser
ves
and
Surplu
s
Secure
d
Loans
U
n
s
e
c
u
r
e
d
L
o
a
n
s
Again, no
major
change is
observed
from last
year but
since
December
2010 the
Loans
have
reduced
by 2% and
Reserves
and
Surplus
has
increased
by 2%.
41
Ultr
aTec
h
Cem
ents
Ltd.
M
a
r
c
h
'
0
9
Unsec
ured
Share
Capital
Loans
2%
17%
R
e
s
er
v
e
s
a
n
d
S
u
r
p
l
u
s
61%
2
0
%
Secured
Loans
Reserv
es and
Surplu
s
amoun
t to
61% of
the
capital
Equit
y
Capit
al
amou
nts to
2% of
the
capita
l
Loans
amou
nt to
37%
of the
capita
l
S
h
a
r
e
C
a
p
it
a
l
R
e
s
e
r
v
e
s
a
n
d
Surplu
s
Secure
d
Loans
u
r
e
d
L
o
a
n
s
Unsec
It shows
that the
company
is
efficient
as 61% of
its capital
relies on
Reserves
and
Surplus.
Loans
amount
to 37% of
the
capital
which
could be
expensiv
e and
may have
a high
impact
on the
earnings
per
equity
share.
42
March
'10
Unsecur
ed
12
%
Share
Capital
Loans
2%
Se
cu
re
d
Lo
an
s
14%
an
d
Su
rpl
us
72
%
Reserves
Sh
ar
e
Ca
pit
al
Reserves
and
Surplus
amount
to 72% of
the
capital
Re
se
rv
es
an
d
Su
rpl
us
Equity
Capital
amounts
to 2% of Se
the
cu
capital
re
Loans
amount
to 26%
of the
capital
d
Lo
an
s
U
ns
ec
ur
ed
Lo
an
s
Loans have
reduced by
11% which
shows that the
debt on the
company has
reduced and
more earnings
per share can
be generated.
Reserves and
Surplus have
increased by
11% which is a
free source of
capital. The
capital
structure has
improved this
year.
43
March
'11
Unsecur
ed
Share
Capital
9
%
Secured
Loans
2%
Lo
an
s
19%
70
%
Reserves
and
Surplus
Re
se
rv
es
an
d
Su
rpl
us
a
m
ou
nt to 70%
of the
capital
Equity
Capital
amounts
to 2% of
the
capital
Loans
amount
to 28%
of the
capital
Share
Re
se
rv
es
an
d
Su
rpl
us
Se
cu
re
d
Lo
an
s
U
ns
ec
ur
ed
Lo
an
s
Capital
Once again
the company
has
increased
the loans to
utilize the
benefits of
leverage. The
unsecured
loans have
reduced by
3%
meanwhile
secured
loans have
increased by
5%.
Reserves
and Surplus
has reduced
by 2%.
44
Share Holding Pattern
45
ACC Ltd.
2008
Non
Institution
al
21%
Institution
al
33%
Promoter
and
Promoter
Group
46%
46
20
09
N
I
2
I
n
3
P
r
G
4
2010
Non
Institutional 20%
Promoter and
Promoter
Group
Institutional
32%
48%
48
2009
Non
Institutional
24%
Promoter
and
Institutional
Promoter
Group
21%
55%
49
2010
Non
Institutional 14%
Institutional
21%
Promoter and
Promoter
Group
65%
50
Non
2011
Institutional
12%
Institutional
23%
Promoter and
Promoter
Group
65%
51
Ratio Analysis
52
-A general technique for analyzing a businesss performance or its potential

performance is known as Ratio Analysis
-Ratio Analysis involves calculating ratios for a business or proposed business and
comparing them to ratios of other businesses within the same industry.
-An Investor is interested in information regarding the exact financial position of the
business, its earning capacity, the present position with regards to possibility.
-The published accounts contain the P&L A/c, Balance sheet, Directors report, Auditors
report and Chairmans speech.
-The ratio is one number expressed in term of another. Ratio is customarily expressed in
three different ways Simple figures, percentage form and in proportions.
53
Liquidity Ratios
54
Current Ratio
It is the ratio that measures whether a firm has enough resources to pay its debts over
the next 12 months. It compares a firm's current assets to its current liabilities. Ideally it
should be 2:1.
Current Ratio =
Current Assets
Current Liabilities
Current Ratio
UltraTech
ACC
2008-09 / 2008
1.09
1.00
2009-10 / 2009
1.13
0.72
2010-11 / 2010
1.09
0.73
Analysis
The current ratio of 1 or above is healthy for the company. It shows the companys strength to
pay back its short term liabilities. The figures of ACC do not give a good indication for 2009 and
2010. It is below 1, which means the company is weak in paying back short term debt.
While in case of UltraTech it is above 1 in all the years and also there is not much of change. It
means that the companys strength to pay back short term liabilities is constant.
Taking recent years into account UltraTech is much stronger than ACC when it comes to
pay back short term liabilities.
55
Quick Ratio (Acid - Test Ratio)
The Acid-test or quick ratio or liquid ratio measures the ability of a company to use its
near cash or quick assets to extinguish or retire its current liabilities immediately. Quick
assets include those current assets that presumably can be quickly converted to cash at
close to their book values. Ideally it should be 0.5.
Quick Ratio =
(Current Assets Inventory)
Current Liabilities
Quick Ratio
UltraTech
ACC
2008-09 / 2008
0.54
0.71
2009-10 / 2009
0.50
0.47
2010-11 / 2010
0.52
0.49
Analysis
The quick ratio of ACC is highly fluctuating in the recent time which should be a matter of concern
for the company. 2008 had a strong ratio 2009 and 2010 had weaker figures.
UltraTech has good figures in terms of quick ratio. It has been able to maintain its ratio.
The companys dependency on inventory as short term asset is high. The inventory rose
drastically in the three years. The inventory has increased from 821.7 to 1956.
Both the companies saw a decline in 2009 and 2010 but they recovered in 2011. 2009 was a difficult
year for the cement industry. Costs raised and demand was stagnant or rather declining.
56
Leverage Ratios
57
Debt - Equity Ratio
The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of
shareholders' equity and debt used to finance a company's assets closely related to
leveraging, the ratio is also known as Risk, Gearing or Leverage.
Debt-Equity Ratio =
Total Debt
Net Wroth
Debt-Equity Ratio
UltraTech
ACC
2008-09 / 2008
0.59
0.10
2009-10 / 2009
0.35
0.09
2010-11 / 2010
0.39
0.08
Analysis
ACC largely depends on shareholders fund. Very small part of the capital is allotted to debt. It is
good in a way as the company will not have to maintain the balance of short term assets.
UltraTech had a very stable ratio in 2008-09 but after that the company has reduced its
dependency on debts and increased the use of equity capital.
Both the companies seem to have been facing similar situations and it can be seen that
both the company have started depending on their own money.
58
Capital Employed to Net worth Ratio
There is another alternative way of expressing the basic relationship between debt and
equity. It helps in knowing, how much funds are being contributed together by lenders
and owners for each rupee of owner's contribution.
CE to NW Ratio =
Capital Employed
Net Worth Excluding Pref. Share Capital
CE to NW Ratio
UltraTech
ACC
2008-09 / 2008
1.80
1.17
2009-10 / 2009
1.53
1.15
2010-11 / 2010
1.55
1.14
Analysis
59
Fixed Interest Coverage Ratio
A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest
and leases.
Fixed Interest Coverage Ratio =
EBIT
Interest
Fixed Interest Coverage Ratio
UltraTech
ACC
2008-09 / 2008
11.80
40.16
2009-10 / 2009
14.46
27.31
2010-11 / 2010
7.45
25.00
Analysis
The amount that ACC pays in terms of interest is very low indicating that the company
has a strong position in paying off long term loans. From 2008 there is massive reduction
in use of loan and company increased the use of its own money.
UltraTech has more long term obligations. It is evident from the figures. Its expansion and
amalgamation have led it to borrow huge amount of money from the market. Though, the
companys condition is stable.
The situations of both the companies are very different. While ACC has miniscule
dependency on loans UltraTech has huge borrowings and thus has a huge liability. ACC
here has a stronger position than UltraTech.
60
Profitability Ratios
61
Net Profit Ratio
It shows the ratio of Net Profit (after Tax) to Sales. This Ratio is expressed in Percentage
Form.
Net Profit Ratio =
PAT
Net Sales X 100
Net Profit Ratio
UltraTech
ACC
2008-09 / 2008
15.31
16.66
2009-10 / 2009
15.50
20.02
2010-11 / 2010
10.63
14.51
Analysis
For ACC, while in 2009 20% of the sales were converted to profit, in 2010 it came down
to 14.5%. These figures are moderate.
The figures of UltraTech shows that majority of the sales have failed to convert into profit.
It is evident that there are higher expenses taking place.
ACC holds a stronger position in converting sales into profit. UltraTech maybe facing the
problem as the company is comparatively new than ACC.
62
Operating Profit Ratio
Operating Profit Ratio is generally calculated for the industries or companies which has
high operating expenses.
Operating Profit Ratio =
(PBIT Other Income)
Net Sales
Operating Profit Ratio
UltraTech
ACC
2008-09 / 2008
0.22
0.18
2009-10 / 2009
0.22
0.26
2010-11 / 2010
0.13
0.14
63
Operating Ratio
This ratio is a test of the efficiency of the management in their business operation. It is a
means of operating efficiency. In normal conditions, the operating ratio should be low
enough so as to leave portion of the sales sufficient to give a fair return to the investors.
Operating Ratio = 1 Operating Profit Ratio
Operating Ratio
UltraTech
ACC
2008-09 / 2008
0.78
0.82
2009-10 / 2009
0.78
0.74
2010-11 / 2010
0.87
0.86
64
Expenses Ratio
Expense ratios indicate the relationship of various expenses to net sales. In this case Total
expenses of both the companies are compared with its sales. The lower the operating ratio, the
larger is the profitability and higher the operating ratio, lower is the profitability.
Expenses Ratio =
Total Expenses
Net Sales X 100
Expenses Ratio
UltraTech
ACC
2008-09 / 2008
81.82
80.79
2009-10 / 2009
79.22
74.41
2010-11 / 2010
89.20
85.69
65
Return on Shareholders Funds OR Return on NW
It is the ratio of net profit to shareholders investment. It is the relationship between net profit
(after interest and tax) and shareholders/proprietor's fund. This ratio establishes the profitability
from the share holders' point of view. The ratio is generally calculated in percentage.
Return on Shareholders Funds OR Return on NW =
PAT
X 100
Share Holders Fund
Return on Shareholders Funds OR Return on NW
UltraTech
ACC
2008-09 / 2008
27.12
24.61
2009-10 / 2009
23.71
26.71
2010-11 / 2010
13.16
17.31
Analysis
ACCs ratio of 17.31 should be considered as moderate and has declined in the last year.
UltraTechs ratio of 13.16 is quite lower. It shows that the companys profit after tax is
much less.
Both the companies are going through similar phase. Ratios of both the companies
have decreased.
66
Return on Total Assets
It is a ratio that measures a company's earnings against its total net assets. The ratio is
considered an indicator of how effectively a company is using its assets to generate
earnings before contractual obligations must be paid.
Return on Total Assets =

PAT
(Fixed Assets + Investment + Current Assets) X 100
Return on Total Assets

UltraTech
ACC
2008-09 / 2008
12.66
14.25
2009-10 / 2009
13.10
16.00
2010-11 / 2010
7.02
10.09
67
Return on Capital Employed (ROCE)
It is a ratio that indicates the efficiency and profitability of a company's capital

investments.
Return on Capital Employed (ROCE) =

PAT
Total Capital Employed X 100
Return on Capital Employed (ROCE)

UltraTech
ACC
2008-09 / 2008
15.11
21.11
2009-10 / 2009
15.52
23.18
2010-11 / 2010
8.49
15.23
Analysis
ACCs ROCE were quite good in 2008 and 2009. It declined in 2010 to 15.23.
UltraTechs ROCE is much lower as compared to ACC.
Again both the companies are declining in terms of ROCE. This show that both the
companies have earned less in comparison with the amount of capital employed.
68
Turnover Ratios
69
Inventory Turnover Ratio
A ratio showing how many times a company's inventory is sold and replaced over a
period.
Inventory Turnover Ratio =
COGS
Average Inventory
Inventory Turnover Ratio
UltraTech
ACC
2008-09 / 2008
5.70
7.67
2009-10 / 2009
5.02
7.62
2010-11 / 2010
5.08
7.65
Analysis
It shows that ACC sold its inventory more than 7 times in a year.
UltraTech managed to sell its inventory just above 5.08 times.
ACC holds a stronger position in terms of selling the whole inventory.
70
Fixed Assests Turnover Ratio
Fixed-asset turnover is the ratio of sales (on the profit and loss account) to the value of
fixed assets (on the balance sheet). It indicates how well the business is using its fixed
assets to generate sales. The higher the ratio, the better it is.
Fixed Assets Turnover Ratio =
Net Sales
Net Fixed Assets
Fixed Assets Turnover Ratio
UltraTech
ACC
2008-09 / 2008
1.20
1.44
2009-10 / 2009
1.36
1.27
2010-11 / 2010
1.06
1.16
Analysis
The declining figure of ACC shows that the company has been inefficient in investing into
fixed Assests which can be turned into sales. They depend very minutely on fixed assets.
UltraTechs expansion and amalgamations has made the ratio unstable.
Both the companies have similar figures which show that they dont depend much on
fixed assets to convert into net sales.
71
Working Capital Turnover Ratio
Working capital turnover ratio establishes relationship between cost of sales and net
working capital. As working capital has direct and close relationship with cost of goods
sold, therefore, the ratio provides useful idea of how efficiently or actively working capital
is being used.
Working Capital Turnover Ratio =
Net Sales
Net Working Capital
Working Capital Turnover Ratio
UltraTech
ACC
2008-09 / 2008
53.64
1213.83
2009-10 / 2009
40.75
-9.36
2010-11 / 2010
43.31
-7.77
72
Total Assets Turnover Ratio
This ratio is ascertained by dividing the net sales by the value of total assets.
Total Assets Turnover Ratio =

Net Sales
Total Assets (FA + CA + Investments)
Total Assets Turnover Ratio

UltraTech
ACC
2008-09 / 2008
0.83
0.86
2009-10 / 2009
0.85
0.80
2010-11 / 2010
0.66
0.70
Analysis
The ratios of ACC are quite high which shows that the company is less dependent on
total assets to turn in to sales.
UltraTech ratios are also quite high.
It shows that these companies dont depend on total assets much to make sales.
73
Net Worth Turnover Ratio
This ratio indicates the overall financial and operational efficiency of the company. It is an
indication about the optimum capital structure and production efficiencies of the company.
Net Worth Turnover Ratio =

Net Sales
NW excl. Pref. Capital
Net Worth Turnover Ratio

UltraTech
ACC
2008-09 / 2008
1.77
1.48
2009-10 / 2009
1.53
1.33
2010-11 / 2010
1.24
1.19
74
Debtors Turnover Ratio
The ratio measures the net credit sales of a firm to the recorded trade debtors thereby indicating the
rate at which cash is generated by turnover of receivables or debtors.
Debtors Turnover Ratio =

Net Sales
(Debtors + Bills Receivables)
Debtors Turnover Ratio

UltraTech
ACC
2008-09 / 2008
32.91
23.48
2009-10 / 2009
32.66
39.41
2010-11 / 2010
21.93
43.29
Analysis
The ratios of ACC are quite high which is not advisable. Above 43% of the sales made by the
company are on credit which means that the company may face shortage of cash.
Ratios of UltraTech are reducing quite significantly which means the company does not
have much to worry about credit receipts.
ACC here is at a higher risk as the amount of debtors and bills receivables are very high.
75
Valuation Ratios
76
Dividend Yield Ratio
This ratio establishes the relation between the market price and the dividend per share.
Dividend Yield Ratio =
DPS
Average MPS
Dividend Yield Ratio
UltraTech
ACC
2008-09 / 2008
0.01
0.03
2009-10 / 2009
0.01
0.03
2010-11 / 2010
0.01
0.03
Analysis
ACC has been paying dividend which is equal to 3% of its market price for the last three years. UltraTech
has been paying dividend which is equal to 1% of its market price for the last three years.
Although the market price of UltraTech is higher than ACC, the return of ACC is much higher
which makes ACC the better choice to invest in.
77
Dividend Payout Ratio
This ratio expresses the relationship between what is available as earnings per share and what
is actually paid in the form of dividends out of available earnings.
Dividend Payout Ratio =
DPS
EPS
Dividend Payout Ratio
UltraTech
ACC
2008-09 / 2008
0.06
0.31
2009-10 / 2009
0.07
0.27
2010-11 / 2010
0.10
0.51
Analysis
The dividend payout ratio of ACC is quite high. It has been paying out 31% to 51% dividend to
shareholders. This means that investors get a good return on their investment.
UltraTechs ratio are minute compared to ACC. It also shows that ACC is a mature company as compared to
UltraTech. UltraTech being a newer company may not payout as much as ACC.
78
Price Earnings Ratio
A valuation ratio of a company's current share price compared to its per-share earnings.
Price-Earnings Ratio =
Average MPS
EPS
Price-Earnings Ratio
UltraTech
ACC
2008-09 / 2008
6.96
10.98
2009-10 / 2009
9.61
8.16
2010-11 / 2010
15.90
15.37
79
Earnings per Share
This ratio measures the profit available to the equity shareholders on a per share basis.
PAT
EPS = No. of (Interim Equity Dividend + Final Equity
Dividend)
EPS
UltraTech
ACC
2008-09 / 2008
78.48
64.63
2009-10 / 2009
87.80
85.60
2010-11 / 2010
51.23
59.66
80
Dividend per Share
This ratio shows the dividend divided among equity shareholders.
(Interim Equity Dividend + Final Equity Dividend)
DPS =
No. of Equity Shares
DPS
UltraTech
ACC
2008-09 / 2008
5.00
20.00
2009-10 / 2009
6.00
23.00
2010-11 / 2010
6.00
30.50
81
Common size Statement
82
Balance Sheet of UltraTech Ltd
Rs. (In Crore)
March
March
March
'09
%
'10
%
'11
Share Capital
124.49
124.49
274.04
Employees Stock Options Outstanding

1.68
1.99
4.78

3,475.93
4,482.17
10,387.22
Shareholders Funds
3,602.10
55.70
4,608.65
65.43
10,666.04
64.48
Secured Loans
1,175.80
854.19
2,789.76
Unsecured Loans
965.83
750.33
1,354.84
Loan Funds
2,141.63
33.12
1,604.52
22.78
4,144.60
25.06
Deferred Tax Liabilities (Net)

722.93
11.18
830.73
11.79
1,730.05
10.46
Total Liabilities
6,466.66
100.00
7,043.90
100.00
16,540.69
100.00
Gross Block
7,401.02
8,078.14
17,942.27
Less: Depreciation
2,765.33
3,136.46
6,542.02
Net Block
4,635.69
4,941.68
11,400.25
Capital Work-in-Progress
677.28
259.37
1,105.32
Fixed Assets
5,312.97
82.16
5,201.05
73.84
12,505.57
75.60
Investments
1,034.80
16.00
1,669.55
23.70
3,730.32
22.55
Inventories
691.97
821.70
1,956.52
Sundry Debtors
193.94
215.83
602.29
Cash and Bank Balances

104.49
83.73
144.79
Loans and Advances

381.56
351.13
1,053.88
Assets held for Disposal

0.00
0.00
1.22
Current Assets, Loans and Advances

1,371.96
1,472.39
3,758.70
Current Liabilities
1,120.92
1,138.08
2,880.41
Provisions
132.15
161.01
573.49
Less: Current Liabilities and Provisions

1,253.07
1,299.09
3,453.90
Net Current Assets

118.89
1.84
173.30
2.46
304.80
1.84
Total Assets
6,466.66
100.00
7,043.90
100.00
16,540.69
100.00
83
P&L A/C of UltraTech Ltd
Rs. (In Crore)
March
March
March
'09
'10
'11
Income
6577.68
7169.43
13558.42
Gross Sales
7,160.42
7,729.13
14,858.60
Less: Excise Duty

777.34
679.45
1,648.69
Net Sales
6383.08
7049.68
13209.91
Interest and Dividend Income

45.15
56.21
122.34
Other Income
60.69
65.81
164.33
Increase / (Decrease) in Stocks

88.76
-2.27
61.84
Expenditure
5216.22
5581.27
11772.23
Raw Materials Consumed

684.96
960.61
1,805.33
Manufacturing Expenses
2,420.17
2,148.87
4,547.98
Purchase of Finished Products

19.5
63.74
122.18
Payments to and Provisions for Employees

217.67
252.94
666.5
Selling, Distribution, Administration and Other Expenses

1,433.79
1,653.53
3,597.91
Interest and Finance Charges

125.51
117.52
277.11
Depreciation and Obsolescence

323
388.08
765.73
Less: Captive Consumption of Cement

-8.38
-4.02
-10.51
Profit Before Tax Expenses

1361.46
1588.16
1786.19
Income Tax Expenses
Provision for Current Tax

197.54
387.25
510.72
Excess tax provision reversal related to earlier years

0
-0.13
-125.52
Deferred Tax (Credit) / Charge

180.58
107.8
-3.24
Provision for Fringe Benefit Tax

6.32
0
0
Profit After Tax

977.02
1093.24
1404.23
Balance brought forward from Previous Year

1,598.12
2,438.40
2,729.37
Profit Available for Appropriation

2575.14
3531.64
4133.6
Appropriations
2575.14
3531.64
4133.6
Proposed Dividend
62.24
74.69
164.42
Corporate Dividend Tax

10.58
12.41
26.67
Debenture Redemption Reserve

-36.08
-34.83
58.92
General Reserve
100
750
1,100.00
Balance carried to Balance Sheet

2,438.40
2,729.37
2,783.59
Basic Earnings Per Equity Share

78.48
87.82
62.74
Diluted Earnings Per Equity Share

78.48
87.79
62.72
84
ACC Cements Ltd.
Balance Sheet of ACC Ltd
Rs. (In Crore)
Dec '08
%
Dec '09
%
Dec '10
%
Share Capital
187.88
187.94
187.95
Share Application money, pending
allotment
0.00
0.08
0.00

4,739.85
5,828.20
6,281.54
Shareholders' Fund
4,927.73
85.77
6,016.22
86.78
6,469.49
87.96
Secured Loans
450.00
550.00
509.93
Unsecured Loans
32.03
16.92
13.89
Loan Funds
482.03
8.39
566.92
8.18
523.82
7.12

335.79
5.84
349.25
5.04
361.53
4.92
Total Funds
5,745.55
100.00
6,932.39
100.00
7,354.84
100.00
Gross Block
5,835.67
6,826.27
8,076.95
Less: Accumulated Depreciation and
Amortization
2,365.97
2,667.98
2,994.51
Net Block
3,469.70
4,158.29
5,082.44
Capital Work-in-Progress (including
Capital Advances)
1,602.86
2,156.21
1,562.80
Fixed Assets
5,072.56
88.29
6,314.50
91.09
6,645.24
90.35
Investments
679.08
11.82
1,475.64
21.29
1,702.67
23.15
Inventories
793.27
778.98
914.98
Sundry Debtors
310.17
203.70
178.28

984.24
746.38
1,080.03
Other Current Assets

20.67
10.99
56.12
Loans and Advances

651.28
516.11
523.94
Current Assets
2,759.63
2,256.16
2,753.35
Current Liabilities
1,801.79
1,963.91
2,093.96
Provisions
963.93
1,150.00
1,652.46

2,765.72
3,113.91
3,746.42
Net Current Assets

-6.09
-0.11
-857.75
-12.37
-993.07
-13.50
Total Assets (Net)

5,745.55
100.00
6,932.39
100.00
7,354.84
100.00
85
P&L A/C of ACC Ltd
Rs. (In Crore)
Dec '08
Dec '09
Dec '10
Income
7,571.58
8,267.62
8,074.26
Sale of Products and Services (Gross)
8,234.02
8,724.24
8,563.71
Less - Excise Duty

951.15
697.04
846.38
Sale of Products and Services (Net)

7,282.87
8,027.20
7,717.33
Other Income
288.71
240.42
356.93
Expenditure
5,883.84
5,973.23
6,612.81
Manufacturing and other expenses

5,549.70
5,546.84
6,163.35
Depreciation and Amortisation

294.18
342.09
392.68
Interest expenses
39.96
84.3
56.78
Exceptional Items
48.86
0
0
Profit before Tax

1,736.60
2,294.39
1,461.45
Provision for Tax:

-523.81
-687.66
-341.44
Current Tax
-510.47
-673.3
-411.16
Tax adjustment of an earlier year

0
0
82
Deferred Tax Charge

-4.34
-13.46
-12.28
Fringe Benefit Tax

-9
-0.9
0
Profit after Tax

1,212.79
1,606.73
1,120.01

2,064.89
2,477.91
3,203.85
Profit available for appropriation

3,277.68
4,084.64
4,323.86
Appropriations:
799.77
880.79
942.45
Interim Dividend
187.65
187.7
187.75
Proposed Dividend
187.68
244.06
384.88
Dividend Distribution Tax

63.79
73.38
95.1
Previous Year Dividend Distribution Tax

0.02
0
-0.93
General Reserve
350
350
250

10
25
25
Amortisation Reserve
0.63
0.65
0.65
Surplus carried to Balance Sheet

2,477.91
3,203.85
3,381.41
Earnings per Share (Basic)

64.63
85.6
59.66
Diluted
64.53
85.42
59.52
86
Awards and Achievements
87
ACC Ltd.
National Award for Excellence in Water Management by Confederation of Indian Industry (CII)
Outstanding Corporate Vision, Triple Impact - Business Performance Social &

Environmental Action and Globalization for 2009-10 from Federation of Indian
Chambers of Commerce and Industry
Asia Pacific Entrepreneurship Award in two categories, Green Leadership and

Community Engagement by Enterprise Asia.
Indira Priyadarshini Vrikshamitra Award --- by The Ministry of Environment and Forests
for "extraordinary work" carried out in the area of afforestation.
Subh Karan Sarawagi Environment Award by The Federation of Indian Mineral

Industries for environment protection measures.
Drona Trophy - By Indian Bureau Of Mines for extra ordinary efforts in protection of
Environment and mineral conservation in the large mechanized mines sector.
Indira Gandhi Memorial National Award - for excellent performance in prevention of

pollution and ecological development
88
Excellence in Management of Health, Safety and Environment: Certificate of Merit by

Indian Chemical Manufacturers Association
Good Corporate Citizen Award - by PHD Chamber of Commerce and Industry
FIMI National Award for valuable contribution in Mining activities from the Federation of
Indian Mineral Industry under the Ministry of Coal.
Rajya Sthariya Paryavaran Puraskar for outstanding work in Environmental Protection and
Environment Performance by the Madhya Pradesh Pollution. Control Board.
National Award for Fly Ash Utilization - by Ministry of Power, Ministry of Environment &
Forests and Dept of Science & Technology, Govt of India - for manufacture of Portland
Pozzolana Cement.
89
Year
Award
2010-2011
Subh Karan Sarawagi Environment Award
2010-2011
Business World FICCI-SEDF CSR Award
2010
Greentech Environment Excellence Gold Award
2010
IMC Ramkrishna Bajaj National Quality Award
2010
Asian CSR Award
2009-2010
National Awards for Prevention of Pollution
2009-2010
Rajiv Gandhi Environment Award for Clean Technology
2009-2010
State Level Environment Award (Plant)
2009
9th Greentech Safety Award
2009
12th F.L. Smith Award for Maximum Percentage Reduction in Electrical Energy
Consumption of Clinker
2009
12th F.L. Smith Award for Maximum Percentage Reduction in Electrical Energy
Consumption of Cement
2009
12th F.L. Smith Award for Lowest Electrical Energy Consumption in Clinker
without VRM
2009
12th F.L. Smith Award for Lowest Electrical Energy Consumption in Cement
without VRM
2009
Bhamashah Award from Commercial Tax Department, Ujjain
2008-2009
State Level Environment Award (Mines)
2008-2009
National Awards for Electrical Energy Performance
90
2008-2009
National Awards for Energy Performance in Manufacture of Blended Cement
2008-2009
FIMI CSR Social Awareness Award
2008
8th TERI Corporate Award for CSR
2008
2008
Bhamashah Award from Commercial Tax Department, Ujjain
2008
11th F.L. Smith Award for Energy Conservation for Lowest Electrical Energy
Consumption in Clinker without VRM
2008
11th F.L. Smith Award for Energy Conservation for Lowest Electrical Energy
Consumption in Cement without VRM
2008
11th F.L. Smith Award for Energy Conservation for Maximum Percentage
Reduction in Electrical Energy Consumption of Cement
2008
11th F.L. Smith Award for Energy Conservation for Maximum Percentage
Reduction in Electrical Energy Consumption of Clinker
2008
Golden Peacock National Quality Award
2008
ICWAI National Award for Excellence in Cost Management
2007-2008
National Awards for Electrical Energy Performance
2007-2008
National Awards for Energy Performance in Manufacture of Blended Cement
2007
2007
Chairman's WCM Silver Award
2006
2005-2006
National Awards for Energy Efficiency
2005
91
2005
8th F.L. Smith Award for Energy Consumption for Maximum Percentage
Reduction in Electrical Energy Consumption Category-III per ton of Cement Production
2005
8th F.L. Smith Award for Energy Consumption for Maximum Percentage
Reduction in Electrical Energy Consumption Category-II per ton of Clinker Production
2005
National Award for Thermal Energy Excellence, Electrical Energy Excellence
and Environment Excellence
2004
7th F.L. Smith Award for Energy Consumption
2003
M.P. State Level Environment Award
2002
Manufacturing Excellence & Competitive Advantage Award
2001-2002 Fuller Energy Award for Maximum Percentage Reduction in Thermal Energy
Consumption in K.cal/Kg of Cement Produced
2001-2002 Fuller Energy Award for Maximum Percentage Reduction in Thermal Energy
Consumption in K.cal/Kg of Clinker Produced
2001-2002
National Awards for Quality Excellence
2001-2002
Indo-German Greentech Industrial Safety Award
2001
British Safety Council Award

2001
Award for Excellence in Consistent TPM Commitment
2000-2001
Indo-German Greentech Environment Excellence Award
2000
2000
National Energy Conservation Award
1999-2000
Fuller Energy Award
1999-2000
Bharat Shell Excellence Award
1999-2000
Energy Efficiency Award (Second Best in Electrical Energy Performance)
92
1999-2000
Energy Efficiency Award (Second Best in Thermal Energy Performance)
1999
1998-1999
Energy Efficiency Award (Second Best in Thermal Energy Performance)
1998-1999
Fuller Energy Award MP Chapters for maximum percentage reduction in
electrical energy consumption
1998-1999
Fuller Energy Award MP Chapters for maximum percentage reduction in thermal
energy consumption
1998
AV Birla Award for Outstanding Achievement in Community Development
1998
Golden Peacock National Training Award
1998
British Council Safety Award
1998
1997
National Safety Award from Government of India
1997
1997
1997
Rajiv Gandhi National Quality Award
1996
AV Birla Award for Outstanding Achievement
1996
British Safety Council Award for Vikram, New Vikram and Vikram Super
Cement
1995
British Safety Council Award for Vikram, New Vikram and Vikram Super
Cement
1995
TPM Excellence Award from Japan Institute of Plant Maintenance
1994-1996
Safety Awards from National Safety Council - MP Chapter
93
1994-1995 Productivity Awards (Best performance in productivity)
1992-1993 Productivity Awards (Best performance in productivity)
1988-1989 Productivity Award (Second best)
94
Conclusion
95
ACC Ltd, being established in 1936 is one of the oldest cement companies of India while
UltraTech Cement Ltd is a much newer company established in 1983. Today both the
companies are trading at a very close price in the stock markets but after analyzing both the
companies financially there are some major difference between the companies which
should be brought to notice before investing in either of the companies.
ACC Ltd is a very mature company which has been set up since long and at a developed
stage while UltraTech Cement Ltd although being a major manufacturer of cement in India
is looking forward to expand even more and is trying to grow even further.
The major motives behind the companies are different and that is what makes them
different. Those investors which are looking forward to earn dividend right away may opt for
ACC Ltd as it is observed that its dividend payout ratio is very high. ACC Ltd gives the profit
away to the shareholders. On the other hand UltraTech Cement Ltd is acquiring more and
more factories and expanding. This may not let the company payout high dividends but the
value of the share will gradually increase and it could also become even a bigger company
in future which may payout very high dividends.
In a nutshell, ACC Ltd may deliver higher returns right now but UltraTech Cement Ltd
has a scope of even higher returns in the future.
96
Annexure
97
Balance Sheet of ACC Ltd
Rs. (In Crore)
Dec '08
Dec '09
Dec '10
Share Capital
187.88
187.94
187.95
Share Application money, pending allotment

0.00
0.08
0.00

4,739.85
5,828.20
6,281.54
Shareholders' Fund
4,927.73
6,016.22
6,469.49
Secured Loans
450.00
550.00
509.93
Unsecured Loans
32.03
16.92
13.89
Loan Funds
482.03
566.92
523.82

335.79
349.25
361.53
Total Funds
5,745.55
6,932.39
7,354.84
Gross Block
5,835.67
6,826.27
8,076.95
Less: Accumulated Depreciation and Amortisation

2,365.97
2,667.98
2,994.51
Net Block
3,469.70
4,158.29
5,082.44
Capital Work-in-Progress (including Capital Advances)

1,602.86
2,156.21
1,562.80
Fixed Assets
5,072.56
6,314.50
6,645.24
Investments
679.08
1,475.64
1,702.67
Inventories
793.27
778.98
914.98
Sundry Debtors
310.17
203.70
178.28

984.24
746.38
1,080.03
Other Current Assets

20.67
10.99
56.12
Loans and Advances

651.28
516.11
523.94
Current Assets
2,759.63
2,256.16
2,753.35
Current Liabilities
1,801.79
1,963.91
2,093.96
Provisions
963.93
1,150.00
1,652.46

2,765.72
3,113.91
3,746.42
Net Current Assets

-6.09
-857.75
-993.07
Total Assets (Net)

5,745.55
6,932.39
7,354.84
98
Balance Sheet of UltraTech Ltd
Rs. (In Crore)
March
March
March
'09
'10
'11
Share Capital
124.49
124.49
274.04
Employees Stock Options Outstanding

1.68
1.99
4.78

3,475.93
4,482.17
10,387.22
Shareholders Funds
3,602.10
4,608.65
10,666.04
Secured Loans
1,175.80
854.19
2,789.76
Unsecured Loans
965.83
750.33
1,354.84
Loan Funds
2,141.63
1,604.52
4,144.60

722.93
830.73
1,730.05
Total Liabilities
6,466.66
7,043.90
16,540.69
Gross Block
7,401.02
8,078.14
17,942.27
Less: Depreciation
2,765.33
3,136.46
6,542.02
Net Block
4,635.69
4,941.68
11,400.25
Capital Work-in-Progress
677.28
259.37
1,105.32
Fixed Assets
5,312.97
5,201.05
12,505.57
Investments
1,034.80
1,669.55
3,730.32
Inventories
691.97
821.70
1,956.52
Sundry Debtors
193.94
215.83
602.29

104.49
83.73
144.79
Loans and Advances

381.56
351.13
1,053.88
Assets held for Disposal

0.00
0.00
1.22
Current Assets, Loans and Advances

1,371.96
1,472.39
3,758.70
Current Liabilities
1,120.92
1,138.08
2,880.41
Provisions
132.15
161.01
573.49

1,253.07
1,299.09
3,453.90
Net Current Assets

118.89
173.30
304.80
Total Assets
6,466.66
7,043.90
16,540.69
99
P&L A/C of UltraTech Ltd
Rs. (In Crore)
March
March
March
'09
'10
'11
Income
6577.68
7169.43
13558.42
Gross Sales
7,160.42
7,729.13
14,858.60
Less: Excise Duty

777.34
679.45
1,648.69
Net Sales
6383.08
7049.68
13209.91
Interest and Dividend Income

45.15
56.21
122.34
Other Income
60.69
65.81
164.33
Increase / (Decrease) in Stocks

88.76
-2.27
61.84
Expenditure
5216.22
5581.27
11772.23
Raw Materials Consumed

684.96
960.61
1,805.33
Manufacturing Expenses
2,420.17
2,148.87
4,547.98
Purchase of Finished Products

19.5
63.74
122.18
Payments to and Provisions for Employees

217.67
252.94
666.5
Selling, Distribution, Administration and Other Expenses

1,433.79
1,653.53
3,597.91
Interest and Finance Charges

125.51
117.52
277.11
Depreciation and Obsolescence

323
388.08
765.73
Less: Captive Consumption of Cement

-8.38
-4.02
-10.51
Profit Before Tax Expenses

1361.46
1588.16
1786.19
Income Tax Expenses
Provision for Current Tax

197.54
387.25
510.72
Excess tax provision reversal related to earlier years

0
-0.13
-125.52
Deferred Tax (Credit) / Charge

180.58
107.8
-3.24
Provision for Fringe Benefit Tax

6.32
0
0
Profit After Tax

977.02
1093.24
1404.23

1,598.12
2,438.40
2,729.37
Profit Available for Appropriation

2575.14
3531.64
4133.6
Appropriations
2575.14
3531.64
4133.6
Proposed Dividend
62.24
74.69
164.42
Corporate Dividend Tax

10.58
12.41
26.67

-36.08
-34.83
58.92
General Reserve
100
750
1,100.00
Balance carried to Balance Sheet

2,438.40
2,729.37
2,783.59
Basic Earnings Per Equity Share

78.48
87.82
62.74
Diluted Earnings Per Equity Share

78.48
87.79
62.72
100
P&L A/C of ACC Ltd
Rs. (In Crore)
Dec '08
Dec '09
Dec '10
Income
7,571.58
8,267.62
8,074.26
Sale of Products and Services (Gross)
8,234.02
8,724.24
8,563.71
Less - Excise Duty

951.15
697.04
846.38
Sale of Products and Services (Net)

7,282.87
8,027.20
7,717.33
Other Income
288.71
240.42
356.93
Expenditure
5,883.84
5,973.23
6,612.81
Manufacturing and other expenses

5,549.70
5,546.84
6,163.35
Depreciation and Amortisation

294.18
342.09
392.68
Interest expenses
39.96
84.3
56.78
Exceptional Items
48.86
0
0
Profit before Tax

1,736.60
2,294.39
1,461.45
Provision for Tax:

-523.81
-687.66
-341.44
Current Tax
-510.47
-673.3
-411.16
Tax adjustment of an earlier year

0
0
82
Deferred Tax Charge

-4.34
-13.46
-12.28
Fringe Benefit Tax

-9
-0.9
0
Profit after Tax

1,212.79
1,606.73
1,120.01

2,064.89
2,477.91
3,203.85
Profit available for appropriation

3,277.68
4,084.64
4,323.86
Appropriations:
799.77
880.79
942.45
Interim Dividend
187.65
187.7
187.75
Proposed Dividend
187.68
244.06
384.88
Dividend Distribution Tax

63.79
73.38
95.1
Previous Year Dividend Distribution Tax

0.02
0
-0.93
General Reserve
350
350
250

10
25
25
Amortisation Reserve
0.63
0.65
0.65
Surplus carried to Balance Sheet

2,477.91
3,203.85
3,381.41
Earnings per Share (Basic)

64.63
85.6
59.66
Diluted
64.53
85.42
59.52
101

Cement Industry Analysis and Key Players in India

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Cement Industry Analysis and Key Players in India

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Table of Contents

Industry Analysis and Trend........................................................................................................... 4

Liquidity Ratios ........................................................................................................................ 54

Debt - Equity Ratio ............................................................................................................... 58

Price Earnings Ratio ............................................................................................................. 79

Industry Analysis and Trend

The major players in the Indian cement industry are

Introduction to the companies

UltraTech Cements Ltd

2005-06 2006-07 2007-08 2008-09 200910 2010-11

B) Profit before depreciation,

2005-06 2006-07 2007-08 2008-09 2009-10

2005-06 2006-07 2007-08 200809 2009-10 2010-11

D) Profit after tax

2005-06 2006-07 2007-08 200809 2009-10 2010-11

F) Earnings per share

2005-06 2006-07 2007-08 200809 2009-10 2010-11

G) Book Value per Share

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(I) Basis of preparation

Accounting policies have been consistently applied by the Company.

(II) Use of estimates

The preparation of financial statements in conformity with generally accepted accounting

(III) Significant Accounting Policies

Fixed assets are stated at cost of acquisition or construction less accumulated

(iii) Cost of leasehold land is amortized over the period of lease.

Software cost is amortized over a period of three years.

Expenditure during construction period In case of new projects expenditure incurred,

J) Foreign currency transactions

(i) Defined Contribution Plan

Defined contribution plan consists of Government Provident Fund Scheme and

(ii) Defined Benefit Plan

(iii) Other employee benefit

UltraTech Cements Ltd.

Significant Accounting Policies:

4. Treatment of expenditure during construction period:

5. Foreign Currency Transactions:

Transactions denominated in foreign currency are recorded at the exchange rate

In respect of Forward exchange contracts, premium or discount, being the difference

Exchange difference including premium or discount on forward exchange contracts,

Investment in equity capital of companies registered outside India is carried in the

Financial Derivative Instruments

9. Depreciation and Amortization:

Depreciation is charged in the Accounts on the following basis:

(A) Tangible Assets:

Computer and Office Equipments at 25% per annum

Furniture and Fixtures 7 years

Mobile Phones 3 years

Depreciation on additions is provided on a pro-rata basis from the month of installation

Depreciation is charged on Straight Line basis at UltraTech Cement Middle East

Specialized software is amortized over a period of 3 years.

10. Impairment of Assets:

Short term employee benefits.

Short term employee benefits are recognized as an expense on accrual at the

(ii) Defined Contribution Plan

Contributions payable to recognize provident fund and approved superannuation scheme,

(iii) Defined Benefit Plan

(iv) Other Long Term Benefits

12. Borrowing Costs:

Sales Revenue is recognized on transfer of significant risks and rewards of ownership

Income from services is recognized as they are rendered, based on

15. Mines Restoration Expenditure:

16. Provisions, Contingent Liabilities and Contingent Assets: