FINANCIAL ANALYSIS OF ACC LTD

Presented By Shoven Mohapatra Shradha Rout Shruti Bagchi Siddhartha Goutam Rajesh Agarwal

AGENDA
Indian Cement Industry Overview of ACC Ltd Accounting Policies of ACC Financial Statement Analysis Comparison with Industry Stock Performance

8/12/2011

Praxis Business School, Class of 2012

Indian Cement Industry

Originated in 1914 at Porbandar, Gujarat The second largest cement industry in the world Total capacity of approximately 224 MT Accounts for 1.3% of the GDP Employs around 0.14 million people Highly fragmented with around 54 players Expected Growth Rate:11-12%
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Indian Cement Industry

Market Share of the Major Cement Companies
1% 1% 2% 2% 2% 3% 3% 3% 13% 4% 4% 2% 1% 0% ACC Ambuja Cements 15% UltraTechCement Samruddhi Cem India Cements Shree Cements Prism Cement Madras Cements Birla Corp Dalmia Bharat Binani Cement 5% 13% 5% 7% 7% JK Cement JK LakshmiCemen OCL India Chetinad Cem 8% HeidelbergCemen Rain Commoditie

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Overview of ACC Ltd

Founded in the year 1936 Headquartered in the Cement House, Mumbai 14 Factories + 30 Ready Mix Concrete Plants ICAI award for excellence in Financial Reporting, 2008 Pollution Control Excellence Award to ACC Bargarh, 2010

First cement company to become a super brand

Taken over by Swiss cement major Holcim in 2004

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Praxis Business School, Class of 2012

Overview of ACC Ltd

Subsidiaries of ACC
 ACC Concrete Limited- Ready Mix Concrete, Wholly owned  Bulk Cement Corporation(India) Ltd- 94.65% Equity  Lucky Minmat Ltd- Limestone Company, Wholly owned  National Limestone Company(P) Ltd- Wholly owned  ACC Mineral Resources Ltd- Wholly owned

Net worth of subsidiaries - ` 5868.97 Crores

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Overview of ACC Ltd

Share Holding Pattern as on 31.12.2009

Public Shareholding- NonInstitutions , 21.58 Promoter& promoter groupIndian , 45.91 Public Shareholding- Institutions , 32.22

Promoter & promoter group-Foreign , 0.29

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Praxis Business School, Class of 2012

Accounting Policies of ACC

Financial Statement: Historical cost & Accrual basis Fixed Assets: Cost of acquisition/construction Less: Accumulated depreciation/impairment loss Depreciation: SLM as per Schedule XIV, Companies Act Investments: Short Term- Lower of cost or Fair value Long Term- Cost Inventories: Lower of cost & NRV(Weighted average basis)

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Praxis Business School, Class of 2012

Financial Statement Analysis

Profit & Loss A/C Balance sheet Cash flow statement
Operating activities Investing activities Financing activities

Ratio analysis
ACC Analysis.xlsx
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Financial Statement Analysis

Du-Pont Analysis
Profit Margin Ratio Return on Asset Asset Turnover Ratio
ACC Analysis.xlsx

Profit after Tax

Sales

Sales Average of Total Assets

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Praxis Business School, Class of 2012

Comparison with Industry

Comparison with Industry average & industry leader
RATIOS ACC INDUSTRY AVERAGE INDUSTRY LEADER

Current Ratio Fixed Asset Turnover Ratio Debt Equity Ratio Return on Capital Employed

0.7277 1.03 0.0942 36.13%

1.2121 1.009 0.2224 26.26%

1.1368 1.0268 0.0256 25.63%

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Praxis Business School, Class of 2012

Stock Performance
Share price movement from 02/08/10 to 01/10/10 with comparison to Sensex movement

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Stock Performance
Major Announcements & their effects
DATE 19.08.2010 ANNOUNCEMENT EFFECT CHANGE Share prices increase by ` 40 Maharashtra Cement Favorable Companies hiked price by ` 20 per 50 kg Price hike in South Favorable India by ` 25-40 per 50 kg Price hike a result of cartelization Unfavorable

07.09.2010

Share prices increase by ` 60 Share prices fall by 30 `

14.09.2010 20.09.2010

Rumor of cartelization Unfavorable in the cement industry gains speed

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Share prices drop by ` 25

8/12/2011

THANK YOU

8/12/2011

Praxis Business School, Class of 2012