104260253 Financial Report Analysis of Ultratech Cements Ltd and ACC Cements Ltd

8/18/2019 104260253 Financial Report Analysis of Ultratech Cements Ltd and ACC Cements Ltd

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Table of Contents

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

Introduction to the companies......................................................................................................... 7

ACC Ltd...................................................................................................................................... 8

UltraTech Cements Ltd............................................................................................................. 10

Financial Hihlihts...................................................................................................................... 11 A!

"ales.................................................................................................................................... 1# $! %ro&it

'e&ore depreciation( interest and ta) .......................................................................... 1* C! %ro&it

'e&ore depreciation and ta)........................................................................................ 14 +! %ro&it a&ter

ta) ...................................................................................................................... 1, -! +iidend per

"hare............................................................................................................... 1/ F! -arnins pershare $asic!.................................................................................................... 17 ! $oo2 3alue per

"hare.......................................................................................................... 18 H! et

5orth ............................................................................................................................ 16 I! Total

Assets ........................................................................................................................... #0 Accountin

%olicies ...................................................................................................................... #1 ACC

Ltd.................................................................................................................................... ## UltraTech

Cements Ltd............................................................................................................. #8 Capital

"tructure Analysis ............................................................................................................ *8 ACC

Ltd.................................................................................................................................... *6 UltraTech

Cements Ltd............................................................................................................. 4# "hare Holdin

%attern ................................................................................................................... 4, ACCLtd.................................................................................................................................... 4/ UltraTech

Cements Ltd............................................................................................................. 46 atio

Analysis............................................................................................................................... ,# 1


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Liuidity atios ........................................................................................................................ ,4

Current atio......................................................................................................................... ,,

9uic2 atio Acid : Test atio!............................................................................................ ,/

Leerae atios ........................................................................................................................ ,7


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+e't : -uity atio ............................................................................................................... ,8

Capital -mployed to et ;orth atio................................................................................... ,6 Fi)ed

Interest Coerae atio .............................................................................................. /0

%ro&ita'ility atios .................................................................................................................... /1

et %ro&it atio..................................................................................................................... /#


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%rice -arnins atio ............................................................................................................. 76

-arnins per "hare ................................................................................................................ 80

+iidend per "hare ............................................................................................................... 81

Common si?e "tatement ............................................................................................................... 8#

UltraTech Cements Ltd............................................................................................................. 8* ACCCements Ltd..................................................................................................................... 8, A;ards

and Achieements ........................................................................................................... 87 ACC

Ltd.................................................................................................................................... 88 UltraTech

Cements Ltd............................................................................................................. 60

Conclusion .................................................................................................................................... 6,

Anne)ure....................................................................................................................................... 67


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*


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Industry Analysis and Trend


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4


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Cement 'ein the most necessary components in any 2ind o& construction actiity( the cement

industry plays a crucial role in deelopin a country=s in&rastructure. Construction actiities

carried out 'y Central oernment( "tate oernments( %u'lic "ector Underta2in( and other

orani?ations includin the priate sector enerate a hue demand &or cement 'ecause o& the

ast eoraphical si?e and massie population o& India.

The Indian cement industry is the second larest cement producer in the ;orld ne)t to

China. India=s share in the total production o& cement is the ;orld is around /@. It

consists o& 1,4 lare cement plants ;ith an installed capacity o& #*0.8# million tons per

annum employin 1*,(000 people directly.

The cement production ro;th touched a pea2 o& 1#@ in #006:10( as aainst 7.6@ in #008:06.

The Indian cement industry is li2ely to achiee a capacity o& #68 million tons per annum 'y the

end o& #011:1#. Accordin to the inistry o& Industrial %olicy and %romotion an inestment o&

appro)imately s. ,00 crore is reuired &or creatin a capacity o& 1 million ton.

Accordin to the inistry o& Industrial %olicy and %romotion( cement industry in India

recorded a commenda'le ro;th o& around 8@ in #007:08( as ;ell as in #008:06. In

#006:10( the pace o& ro;th o& the industry accelerated a'oe dou'le diit.


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,


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%roduction &rom lare plants ;ith capacity o& a'oe 1 million ton per annum! account to

88@ o& the total production.

The maBor players in the Indian cement industry are

A.C.C. Ltd.

rasim Industries Am'uBa Cements Ltd. UltraTech Cements Ltd. India Cements

aypee roup "hree Cement .D. roup adras Cements Century Te)tiles +almia Cement

Market

S. No.

Group

Installed Capacity as on

Cement Production

Share

(%)


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1

A.C.C. Ltd.

##.41

#0.6,

10.7*

#

rasim Industries

16./,

1/.*#

6.8#

*

Am'uBa Cements Ltd.

18.*0

18.01

6.44


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4

UltraTech Cement Ltd.

#1.60

1,.8/

8.,*

,

India Cements

10.74

6.11

,.11

/

aypee roup

6.6*


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8.0,

4.6,

7

"hree Cement

6.10

7.78

4.7#

8

.D. roup

6.*7

7.,0

4.0/

6


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adras Cements

8.6#

/.#7

4.04

10

Century Te)tiles

7.80

7.##

*.8*

11

+almia Cement

/.,0

*.*8

#.1#


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/


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Introduction to the companies


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7


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ACC Ltd

ACC ACC Limited! is IndiaEs &oremost manu&acturer o& cement and concrete. ACCEs operations

are spread throuhout the country ;ith 1/ modern cement &actories( more than 40 eady mi)

concrete plants( #1 sales o&&ices( and seeral ?onal o&&ices. It has a ;or2&orce o& a'out 6(000

persons and a country;ide distri'ution net;or2 o& oer 6(000 dealers.

"ince inception in 16*/( the company has 'een a trendsetter and important 'enchmar2 &or

the cement industry in many areas o& cement and concrete technoloy. ACC has a uniue

trac2 record o& innoatie research( product deelopment and speciali?ed consultancy

serices. The companyEs arious manu&acturin units are 'ac2ed 'y a central technoloy

support serices centre : the only one o& its 2ind in the Indian cement industry.

ACC has rich e)perience in minin( 'ein the larest user o& limestone. As the larest

cement producer in India( it is one o& the 'iest customers o& the domestic coal industry( o&

Indian ail;ays( and a considera'le user o& the country=s road transport net;or2 serices

&or in;ard and out;ard moement o& materials and products.

Amon the &irst companies in India to include commitment to enironmental protection as one o&

its corporate o'Becties( the company installed sophisticated pollution control euipment as &ar

'ac2 as 16//( lon 'e&ore pollution control la;s came into e)istence. Today each o& its cement

plants has state:o&:the art pollution control euipment and deices.


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ACC plants( mines and to;nships isi'ly demonstrate success&ul endeaors in uarry reha'ilitation(

;ater manaement techniues and reenin= actiities. The company actiely

8


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promotes the use o& alternatie &uels and ra; materials and o&&ers total solutions &or ;aste

manaement includin testin( suestions &or reuse( recyclin and co:processin.

ACC has ta2en purpose&ul steps in 2no;lede 'uildin. 5e run t;o institutes that o&&er

pro&essional technical courses &or enineerin raduates and diploma holders ;hich are

releant to manu&acturin sectors such as cement. The main 'ene&iciaries are youth

&rom remote and 'ac2;ard areas o& the country.

ACC has made sini&icant contri'utions to the nation 'uildin process 'y ;ay o& uality

products( serices and sharin e)pertise. Its commitment to sustaina'le deelopment( its hih

ethical standards in 'usiness dealins and its on:oin e&&orts in community ;el&are prorams

hae ;on it acclaim as a responsi'le corporate citi?en. ACC=s 'rand name is synonymous ;ith

cement and enBoys a hih leel o& euity in the Indian mar2et. It is the only cement company

that &iures in the list o& Consumer "uper $rands o& India.


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6


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UltraTech Cements Ltd

UltraTech Cement Limited has an annual capacity o& 48.8 million tons. It manu&actures and

mar2ets


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UltraTechEs su'sidiaries are +a2shin Cements Limited( Harish Cements Limited( UltraTech CementLan2a %t.! Ltd( and UltraTech Cement iddle -ast Inestments Limited.

10


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inancial !i"hli"hts


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11

A) Sales

Sales

14000.00

12000.00

10000.00

(In

Crore)

8000.00

6000.00

Rs.


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4000.00

2000.00

0.00

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

10 2010-11

Sales of

Ultrarech

Sales of

ACC


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1#


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B) Prot before depreciation

interest and ta!

Rs. (In Crore)

PB"IT

3000.00


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2

5

0

0

.

0

0

P

B

D

I

o

f

U

lt

r

a

r

e

c

h

2000.00

PBDI of ACC

1500.00


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10

0

0

.

0

0

5

0

0

.

0

0

0.00

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

2010-11


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1*

C)

Pro

t

befo

re

depr

ecia

tion

and

ta!

PB

"T


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3000.00

2500.00

Crore)

2000.00

1500.00

Rs. (In

1000.00

500.00

0.00

2005-06 2006-07 2007-08 2008-

09 2009-10 2010-11


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PBD of Ultrarech

PBD

of ACC

14


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") Prot after ta!

PAT

1800.00

1600.00

1400.00

(In Crore)

1200.

00

1000.

00

800.0

0

Rs.

600.0

0

400.0

0

200.0

0

0.00


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2005-06 2006-07 2007-08 2008-

09 2009-10 2010-11

PA

of

Ultrar

ech

PA

of

ACC


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1,

#)

"i$i

den

d

per

Sha

re


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"i$idend Per

Share

35.00

30.00

25.00

per Share

20.00

15.00

Rs.

10.00

5.00

0.00

2005-

06

2006-

07

2007-

08

2008-09

2009-

10

2010-

11


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DPS

of

Ultrar

ech

DPS

of

ACC


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1/

%) #arnin&s per share

(Basic)

#PS

100.00

90.00

80.00

70.00

Share

60.00

50.00

Rs. per

40.00


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30.00

20.00

10.00

0.00

2005-06 2006-07 2007-08 2008-

09 2009-10 2010-11

!PS

"Bas#c$ of

Ultrarech

!PS

"Bas#c$ of

ACC


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17

') Boo al*e per Share


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450.00

400.00

350.00

(In Crore)

300.00

250.00

200.00

Rs.

150.00

100.00

50.00

0.00


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Boo

al*e

per

Share

Boo% &al'e(er Share of

Ultrarech

Boo% &al'e

(er Share of

ACC

18


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+) ,et -orth

,et -orth

12000.00

10000.00

Crore)

8000.00

6000.00

Rs. (In

4000.00

2000.00

0.00

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11


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)et

*orth of

Ultrarech

)et

*orth of

ACC


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16


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I) Total Assets

Total Assets

R

s

1

1

1

1

1

8

6

4

2


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o

t

a

l

As

s

e

t

s

o

f

U

l

re

ch

otal

As

se

ts

of

AC

C

0.00

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


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#0


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Accountin" Policies


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#1


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ACC Ltd.

I! $asis o& preparation

The &inancial statements o& the Company are prepared under the historical cost conention on

accrual 'asis o& accountin and in accordance ;ith the accountin principles enerally accepted

in India and in compliance ;ith the proision o& the Companies Act( 16,/ and comply ;ith the

mandatory accountin standards A"! speci&ied in Companies Accountin "tandard! ules(

#00/ prescri'ed 'y the Central oernment o& India.

Financial statements are 'ased on historical cost and are prepared on accrual 'asis(

e)cept ;here impairment is made and realuation is carried out.

Accountin policies hae 'een consistently applied 'y the Company.

II! Use o& estimates

The preparation o& &inancial statements in con&ormity ;ith enerally accepted accountin

principles reuires manaement to ma2e estimates and assumptions that a&&ect the

reported amounts o& assets and lia'ilities and disclosure o& continent lia'ilities at the date

o& the &inancial statements and the results o& operations durin the reportin period end.

Althouh these estimates are 'ased upon manaement=s 'est 2no;lede o& current eents

and actions( actual results could di&&er &rom these estimates.

III! "ini&icant Accountin %olicies


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A! eenue reconition

eenue is reconi?ed to the e)tent that it is pro'a'le that the economic 'ene&its ;ill&lo; to the Company and the reenue can 'e relia'ly measured.

"ale o& oods

##


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eenue is reconi?ed ;hen the sini&icant ris2s and re;ards o& o;nership o& the

oods hae passed to the 'uyer.

Income &rom Bo's and other serices rendered is accounted &or as per the terms o& contract. Interest

and +iidend Income Interest income is reconi?ed on a time proportion 'asis ta2in into account

the amount outstandin and the rate applica'le. +iidend income is reconi?ed ;hen the

shareholders= riht to receie diidend is esta'lished 'y the $alance "heet +ate.

$! Accountin o& claims

Claims receia'le are accounted at the time ;hen such income has 'een earned 'y the

Company dependin on the certainty o& receipts. Claims paya'le are accounted at the

time o& acceptance.

Claims raised 'y oernment Authorities reardin ta)es and duties( ;hich are

disputed 'y the Company( are accounted 'ased on the merits o& each claim.

C! Fi)ed assets

Fi)ed assets are stated at cost o& acuisition or construction less accumulateddepreciation( impairment losses.

+epreciation

The use&ul li&e o& transit mi)ers and pumps is estimated at 8 years and / years respectiely.

$uildins( ciil cost and installations are estimated to hae use&ul li&e o& 10 years. These assets are


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depreciated oer the use&ul li&e on straiht line method on a pro:rata 'asis. The a'oe assets( i&

trans&erred &rom ACC Limited( under the 'usiness purchase areement( are depreciated oer the

remainin use&ul li&e considerin the period &or ;hich ACC Limited has already used such assets.

Use&ul li&e o& certain assets is tailored 'ased upon the commercial areements and the carryin

amount o& such assets is allocated oer their use&ul li&e. In case o& %lant achinery and -lectrical

installation at the eady mi)ed concrete plants( depreciation has 'een proided on

#*


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triple shi&t 'asis &or the entire year een thouh the plants hae ;or2ed only dou'le and

sinle shi&ts at arious times( 'ased on assessment o& estimated use&ul li&e.

All other assets are depreciated on the straiht line method at the rates prescri'ed in

"chedule JI3 o& the Companies Act( 16,/( on a pro:rata 'asis.

iii! Cost o& leasehold land is amorti?ed oer the period o& lease.

+! Intani'les

"o&t;are cost is amorti?ed oer a period o& three years.

-! Impairment

An impairment loss is chared to the %ro&it and Loss Account ;hereer the carryin amount

o& an asset e)ceeds its estimated recoera'le amount. %reiously reconi?ed impairment

loss is &urther proided or reersed dependin on chanes in circumstances.

-)penditure durin construction period In case o& ne; proBects e)penditure incurred(

includin trial production e)penses net o& reenue earned( prior to commencement o&

commercial production are capitali?ed.


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Inestments

Current inestments are carried at the lo;er o& cost or &air alue. Lon term inestments

are stated at cost. %roision &or diminution in the alue o& lon:term inestments is

made only i& such a decline is other than temporary.

H! Leases

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Lease payments under operatin lease are reconi?ed as an e)pense in the %ro&it and

Loss Account on a straiht:line 'asis oer the lease term.

I! Inentories

a; materials( &uel( stores and spares are alued at lo;er o& cost and net reali?a'le alue.

Ho;eer( materials and other items held &or use in the production o& inentories are not

;ritten do;n 'elo; cost i& the &inished products in ;hich they ;ill 'e incorporated are

e)pected to 'e sold at or a'oe cost. Cost is determined on a ;eihted aerae 'asis.

et reali?a'le alue is the estimated sellin price in the ordinary course o& 'usiness( less

estimated costs o& completion and estimated costs necessary to ma2e the sale.

! Forein currency transactions

Forein currency transactions are recorded at the rates o& e)chane preailin on the date o&

transactions. Forein currency monetary items are reported usin the closin rate. on:

monetary items ;hich are carried in terms o& historical cost denominated in a &orein currency

are reported usin the e)chane rate at the date o& the transaction. -)chane di&&erences

arisin on the settlement o& monetary items or on reportin company=s monetary items at rates

di&&erent &rom those at ;hich they ;ere initially recorded durin the year( or reported in preious

&inancial statements( are reconi?ed as income or as e)penses in the year in ;hich they arise.

D! -mployee 'ene&its

i! +e&ined Contri'ution %lan


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+e&ined contri'ution plan consists o& oernment %roident Fund "cheme and

-mployee "tate Insurance scheme. Company=s contri'ution paid K paya'le durin the

year under these schemes are chared to %ro&it and Loss Account. There are no other

o'liations other than the contri'ution made 'y the company.

#,


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ii! +e&ined $ene&it %lan

Company=s lia'ilities to;ards ratuity( additional ratuity and lon term compensated a'sences

are the de&ined 'ene&it plans. Company=s lia'ilities to;ards these are determined usin the

proBected unit credit method ;hich considers each period o& serice as iin rise to an

additional unit o& 'ene&it entitlement and measures each unit separately to 'uild up the &inal

o'liation. Actuarial ain and losses are reconi?ed immediately in the statement o& %ro&it and

Loss account as income or e)pense.


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#/


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! Continencies K %roisions

A proision is reconi?ed ;hen an enterprise has a present o'liation as a result o& past eent

it is pro'a'le that an out&lo; o& resources em'odyin economic 'ene&it ;ill 'e reuired to settle

the o'liation( in respect o& ;hich a relia'le estimate can 'e made. %roisions are not

discounted to its present alue and are determined 'ased on 'est estimate reuired to settle the

o'liation at the 'alance sheet date. These are reie;ed at each 'alance sheet date and

adBusted to re&lect the current 'est estimates. A continent lia'ility is disclosed( unless the

possi'ility o& an out&lo; o& resources em'odyin the economic 'ene&it is remote.


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#7


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UltraTech Cements Ltd.

"ini&icant Accountin %oliciesM

1. $asis o& AccountinM

The &inancial statements are prepared and presented under the historical cost conention on

accrual 'asis o& accountin in accordance ;ith the enerally Accepted Accountin %rinciples

AA%! in India and comply in all material aspects ;ith the Accountin "tandards A"! noti&ied

under the Companies Accountin "tandard! ules( #00/ as amended!( to the e)tent

applica'le( other pronouncements o& the Institute o& Chartered Accountants o& India and ;ith the

releant proisions o& the Companies Act( 16,/.

#. Use o& estimatesM

The preparation o& &inancial statements in con&ormity ;ith the AA% reuires estimates andassumptions to 'e made that a&&ect the reported amounts o& assets and lia'ilities on the

date o& the &inancial statements( the reported amounts o& reenues and e)penses durin the

reported period and the disclosures relatin to continent lia'ilities as o& the date o& the

&inancial statements. Any reision to accountin estimates is reconi?ed prospectiely in the

current and &uture periods. +i&&erence 'et;een actual results and estimates are reconi?ed

in the period in ;hich the results are 2no;n or materiali?e.

*. Fi)ed AssetsM

Fi)ed assets( ;hether tani'le or intani'le( are stated at cost less accumulated depreciationK

impairment loss i& any!( net o& odatKCenat ;hereer claimed!. The cost o& &i)ed assets

includes ta)es( duties( &reiht and other incidental e)penses incurred in relation to their

acuisition and 'rinin the assets &or their intended use. Adances paid to;ards the acuisition


72/357

o& &i)ed assets outstandin at each 'alance sheet date and the cost o& &i)ed assets not ready &or

their intended use 'e&ore such date are disclosed under capital ;or2:in:proress. Fi)ed Assets

held &or disposal are stated at lo;er o& net 'oo2 alue and net reali?a'le alue.

#8


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4. Treatment o& e)penditure durin construction periodM

-)penditureKIncome( durin construction period is included under Capital:5or2:in:

%roress and the same is allocated to the respectie Fi)ed Assets on the completion o&

their construction.

,. Forein Currency TransactionsM

Transactions denominated in &orein currency are recorded at the e)chane rate

preailin on the date o& the transaction. onetary assets and lia'ilities denominated in

&orein currency at the 'alance sheet date are translated at the year:end rates.

In respect o& For;ard e)chane contracts( premium or discount( 'ein the di&&erence

'et;een the ∨ard e)chane rate and the e)chane rate at the inception o& contract is

reconi?ed as e)pense or income oer the li&e o& the Contract.

-)chane di&&erence includin premium or discount on ∨ard e)chane contracts(

relatin to 'orro;ed &unds( lia'ilities and commitments in the &orein currency &or

acuisition o& &i)ed assets( arisin till the assets are ready &or their intended use( are

adBusted to cost o& &i)ed assets. Any other e)chane di&&erence either on settlement or

translation is reconi?ed in the %ro&it and Loss account.

Inestment in euity capital o& companies reistered outside India is carried in the

$alance "heet at the rates at ;hich transactions hae 'een e)ecuted.

/. +eriatiesM


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Financial +eriatie Instruments

+eriatie instruments are used to hede ris2 associated ;ith &orein currency &luctuations and

interest rates. The deriatie contracts are closely lin2ed ;ith the underlyin transactions and are

intended to 'e held to maturity. These are accounted on the date o& their settlement and reali?edainKloss in respect o& settled contracts is reconi?ed in the %ro&it and Loss Account. Commodity

#6


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Hedin The reali?ed ain or loss in respect o& commodity hedin contracts( the pricin period o&

;hich has e)pired or contracts cancelled durin the year are reconi?ed in the %ro&it and Loss

Account. Ho;eer( in respect o& contracts( the pricin period o& ;hich e)tends 'eyond the $alance

"heet date( suita'le proision &or li2ely loss( i& any( is made in the accounts.

7. InestmentsM

Inestments are classi&ied into lon term inestments and current inestments. Lon:

term inestments are carried at cost a&ter deductin proisions made( i& any( &or

diminution in alue o& inestments other than temporary( determined separately &or each

indiidual inestment. Current inestments are carried at lo;er o& cost and &air alue(

determined separately &or each indiidual inestment.

8. InentoriesM

Inentories are alued at the lo;er o& ;eihted aerae cost and estimated net

reali?a'le alue e)cept ;asteKscrap ;hich is alued at net reali?a'le alue. Cost o&

&inished oods and process stoc2 includes cost o& conersion and other costs incurred

in 'rinin the inentories to their present location and condition.

6. +epreciation and Amorti?ationM

+epreciation is chared in the Accounts on the &ollo;in 'asisM


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A! Tani'le AssetsM

i! +epreciation is proided on the straiht:line 'asis at the rates and in the manner prescri'ed

in "chedule JI3 to the Companies Act( 16,/ e)cept &or some o& assets at the rates 'ased on

the use&ul li&e o& the assets as determined 'y the manaement( ;hich are hiher than the rates

speci&ied in "chedule JI3 to the Companies Act( 16,/( as stated underM

*0


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Company 3ehicles other than those proided to the employees at #0@ per annum.

oads( Culerts( 5alls( $uildins etc. ;ithin &actory premises at *.*4@ per annum.

Computer and


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+epreciation on additions is proided on a pro:rata 'asis &rom the month o& installation

or acuisition and in case o& proBect &rom the date o& commencement o& commercial

production( ;hile depreciation on deductionsKdisposals is proided on a pro:rata 'asis

up to the month proceedin the month o& deductionsKdisposals.

+epreciation is chared on "traiht Line 'asis at UltraTech Cement iddle -ast

Inestment Limited and its su'sidiaries at &ollo;in rates.

*1


79/357

Tani'le AssetsM

o. o& >ears

$uildins includin improements!

*:1,

%lant and euipment

#:#0

Furniture( &i)tures and o&&ice euipment

1:,

otor ehicles

*:,

Amorti?ation o& intani'le Assets

8.,

$! Intani'le AssetsM

"peciali?ed so&t;are is amorti?ed oer a period o& * years.

10. Impairment o& AssetsM

The carryin amounts o& assets are reie;ed at each 'alance sheet date i& there is an indication o&

impairment 'ased on the internal and e)ternal &actors. An asset is treated as impaired ;hen the

carryin cost o& the asset e)ceeds its recoera'le amount. An impairment loss( i& any( is chared to

the %ro&it and Loss Account in the year in ;hich the asset is identi&ied as impaired. eersal o&

impairment loss reconi?ed in prior years is recorded ;hen there is an indication that impairment

loss reconi?ed &or the asset no loner e)ists or has 'een decreased.


80/357

-mployee $ene&itsM

"hort term employee 'ene&its.

"hort term employee 'ene&its are reconi?ed as an e)pense on accrual at the

undiscounted amount in the %ro&it and Loss Account.

*#


81/357

ii! +e&ined Contri'ution %lan

Contri'utions paya'le to reconi?e proident &und and approed superannuation scheme(;hich are de&ined contri'ution plans( are reconi?ed as e)pense in the %ro&it and Loss

Account as they are incurred. Contri'utions as speci&ied 'y the la; are paid to the

proident &und set up as irreoca'le trust 'y the holdin company. The Company is

enerally lia'le &or annual contri'ution and any short&all in the &und assets 'ased on the

oernment speci&ied minimum rates o& return and reconi?es such contri'ution and

short&all( i& any( as an e)pense in the year incurred.

iii! +e&ined $ene&it %lan

The o'liation in respect o& de&ined 'ene&it plans( ;hich coer ratuity( %ension and %ost

retirement medical 'ene&its( are proided &or on the 'asis o& an actuarial aluation( usin the

proBected unit credit method( at the end o& each &inancial year. ratuity is &unded ;ith an

approed &und. Actuarial ainsKlosses( i& any( are reconi?ed immediately in the %ro&it and Loss

Account.


82/357

$orro;in costs that are attri'uta'le to the acuisition or construction o& a uali&yin asset are

capitali?ed as part o& the cost o& such asset till such time the asset is ready &or its intended use. A

uali&yin asset is an asset that necessarily ta2es a su'stantial period o& time to et ready &or its

intended use. All other 'orro;in costs are reconi?ed as an e)pense in the

**


83/357

period in ;hich they are incurred. The di&&erence 'et;een the &ace alue and the issue

price o& +iscounted 3alue on:Conerti'le +e'entures=( 'ein in the nature o& interest(

is chared to the pro&it and loss account( on a compound interest 'asis determined ;ith

re&erence to the yield inherent in the discount.

1*. Ta)ationM

Current Ta) is measured on the 'asis o& estimated ta)a'le income &or the current

accountin period and ta) credits computed in accordance ;ith the proisions o& the

Income Ta) Act( 16/1. +e&erred Ta) resultin &rom Ntimin di&&erencesO 'et;een 'oo2and ta)a'le pro&it &or the year is accounted &or usin the ta) rates and la;s that hae

'een enacted or su'stantiely enacted as on the 'alance sheet date. +e&erred ta)

assets are reconi?ed and carried ∨ard only to the e)tent that there is reasona'le

certainty( e)cept &or carried ∨ard losses and una'sor'ed depreciation ;hich is

reconi?ed 'ased on irtual certainty( that the assets ;ill 'e reali?ed in &uture.

eenue econitionM

"ales eenue is reconi?ed on trans&er o& sini&icant ris2s and re;ards o& o;nership

o& the oods to the 'uyer. "ales are net o& "ales Ta)( 3AT( trade discounts( re'ates and

returns 'ut include e)cise duty.

Income &rom serices is reconi?ed as they are rendered( 'ased on

areementKarranement ;ith the concerned parties.

+iidend income on inestments is accounted &or ;hen the riht to receie the payment is

esta'lished. Interest income is reconi?ed on accrual 'asis.


84/357

-)port Incenties( insurance( rail;ay and other claims( ;here uantum o& accruals cannot 'e

ascertained ;ith reasona'le certainty( are accounted on acceptance 'asis.

*4


85/357

1,. ines estoration -)penditureM

The Company proides &or the estimated e)penditure reuired to restore uarries and mines.

The total estimate o& restoration e)penses is apportioned oer the estimate o& mineral reseres

and a proision is made 'ased on minerals e)tracted durin the year. The total estimate o&

restoration e)penses is reie;ed periodically( on the 'asis o& technical estimates.

1/. %roisions( Continent Lia'ilities and Continent AssetsM

%roisions are reconi?ed ;hen there is a present o'liation as a result o& past eents and it is

pro'a'le that an out&lo; o& resources ;ill 'e reuired to settle the o'liation( in respect o& ;hich a

relia'le estimate can 'e made. These are reie;ed at each $alance "heet date and adBusted to

re&lect the current 'est estimate. Continent Lia'ilities are not reconi?ed 'ut are disclosed and

Continent Assets are neither reconi?ed nor disclosed( in the &inancial statements.

17. -mployees "hare 'ased paymentsM

The Company &ollo;s intrinsic alue method &or aluation o& -mployees "toc2


86/357

The 'asic -arnins %er "hare N-%"O! is computed 'y diidin the net pro&it a&ter ta) &or the year

attri'uta'le to the euity shareholders 'y the ;eihted aerae num'er o& euity shares outstandin

durin the year. For the purpose o& calculatin diluted earnins per share( net pro&it a&ter ta) &or the

year attri'uta'le to the euity shareholders and the ;eihted aerae num'er o&

*,


87/357

euity shares outstandin durin the year is adBusted &or the e&&ects o& all dilutie

potential euity shares.

oernment rants and "u'sidiesM

oernment rants and su'sidies are reconi?ed ;hen there is reasona'le assurance

that the Company ;ill comply ;ith the condition attached thereto and that the rants ;ill

'e receied.

Capital oernment rants or "u'sidies relatin to speci&ic &i)ed assets are deducted

&rom the ross alue o& the respectie &i)ed assets and capital rants &or proBects are

credited to Capital esere.

eenue oernment rants or "u'sidies relatin to an e)pense item are reconi?ed

as income oer the period to match them on a systematic 'asis to the costs or deducted

&rom related e)penses.

"ement eportin %oliciesM

%rimary "ement is identi&ied 'ased on the nature o& products and serices( the di&&erent ris2s

and returns and the internal 'usiness reportin system. "econdary sement is identi&ied 'ased

on eoraphy in ;hich maBor operatin diisions o& the Company operate.

#1. esearch and deelopment e)penditureM


88/357

eenue e)penditure on research and deelopment is e)pensed as incurred. Capital

e)penditure incurred on research and deelopment is capitali?ed as &i)ed assets and

depreciated in accordance ;ith the depreciation policy o& the Company.

##.


89/357

Leases ;here sini&icant portion o& the ris2s and re;ards o& o;nership are retained 'y

the lessor are classi&ied as operatin leases and lease rentals thereon are chared to

the %ro&it and Loss Account

#*. ood;illM


90/357

ood;ill arisin out o& consolidation o& &inancial statements o& "u'sidiaries and Boint

3entures is not amorti?ed. Ho;eer the same is tested &or impairment at each $alance

"heet +ate.

*7


91/357


92/357

Capital Structure Analysis


93/357

*8

ACC

Ltd.

U+sec're,

"ec /0

Sec're, -oa+s

-oa+s

Share Ca(#tal

1


94/357

8

3


95/357

Share Ca(#tal

Reser$es and S*r(l's

Sec're, oa+s

Unsec*red Loans

/eseres a+,

S'r(l's

88

#eser$es and Surplus amount to % o& the capital

'uity Capital amounts to % o& the capital

*oans amount to +% o& the capital


96/357

It sho,s that the company is hi"hly e&&icient as it relies

mostly on the &unds "enerated -y it. *oans are used to ha$e

the -ene&its o& le$era"e.

+


97/357

U+sec're,

"ec /1

oa+s

0.

Share Ca(#tal

Sec're, -oa+s


98/357

3

8


99/357


100/357

Share Ca(#tal


101/357


102/357


103/357


104/357

Reser$es and S*r(l's


105/357


106/357

Sec're, oa+s


107/357


108/357

Unsec*red Loans


109/357


110/357

/eseres a+,

S'r(l's


111/357

89

#eser$es and Surplus amount to +% o& the capital

'uity Capital amounts to % o& the capital

*oans amount to % o& the capital

No maor chan"e is o-ser$ed in the capital structure. #eser$es and

Surplus ha$e increased -y /% and *oans ha$e reduced -y /%.


112/357

01


113/357

"ec

2/

U+sec

're,

Sec're

,

oa+s

oa+s

Share

Ca(#ta

l

7

0

3

/

e

s

e

r

e

s

a

+

,


114/357

S'r(l'

s

90

#eser

$es

and

Surplu

s

amount to

+1% o&

the

capital

'uit

y

Capit

alamou

nts to

% o&

the

capita

l

*

o

a

n

s

a

m

o

u

n

t

t

o

2

%

o

&

t

h

e

c

a

p

ita

l

S

h

a

r

e


115/357

Ca(#ta

l

Reser$es

and

S*r(l'

s

Sec're

,

oa+s

U

n

s

e

c

*

r

e

d

L

o

a

n

s

A"ain3 no

maor

chan"e is

o-ser$ed&rom last

year -ut

since

4ecem-er

51/1 the

*oans

ha$e

reduced

-y 5% and

#eser$es

andSurplus

has

increased

-y 5%.


116/357

0/

Ultr

aTec

hCem

ents

Ltd.

3

a

r

c

h

/

1


117/357

U+sec

're,

Share

Ca(#tal

-oa+s

2

17


118/357

/

e

s

er

e

s

a

+

,

S

'

r

(l

'

s


119/357

61

Sec're,

oa+s

2

0


120/357

#eser$

es and

Surplu

s

amoun

t to

6/% o&

the

capital

'(uit

y

Capit

al

amou

nts to

5% o&

the

capita

l

*oans

amou

nt to

2%

o& the

capita

l

S

h

a

r

e

C

a

(

#t

a

l

R

e

s

e

r

$

e

s

a

n


121/357

d

S*r(l'

s

Sec're

,

oa+s

Unsec

*

r

e

d

L

o

a

n

s

It sho,s

that the

company

is

e&&icient

as 6/% o& its capital

relies on

#eser$es

and

Surplus.

*oans

amount

to 2% o&

the

capital

,hich

could -e

e7pensi$

e and

may ha$e

a hi"h

impact

on the

earnin"s


122/357

per

euity

share.

05


123/357

3arch2/

Unsec*r

e,

Share

Ca(#tal

Loans

2

24

5

Se

c'

re

,

-o

a+

s


124/357

14


125/357

/eseres

a+

,

S'

r(l

's

72


126/357

#eser$es

and

Surplus

amount

to 25% o& the

capital

'uity

Capital

amounts

to 5% o&

the

capital

*oans

amount

to 56%

o& the

capital

Sh

are

Ca

(#t

al

Re

se

r$

es

an

d

S*

r(l

's

Se

c'

re,

o

a+

s

U

ns

ec

*r

ed

Lo

an

s


127/357

*oans ha$e

reduced -y

//% ,hich

sho,s that the

de-t on the

company has

reduced and

more earnin"s

per share can

-e "enerated.

#eser$es and

Surplus ha$e

increased -y

//% ,hich is a

&ree source o&

capital. Thecapital

structure has

impro$ed this

year.

0


128/357

3arch22

Unsec*r

ed

Share

Ca(#tal

Sec're,

Loans

2

1

5

-o

a+

s


129/357

19


130/357

/eseres

a+,

S'r(l's

70

#e

se

r$es

an

d

Su

rpl

us

a

m

ou


131/357

nt to 21%

o& the

capital

'uityCapital

amounts

to 5% o&

the

capital

*oans

amount

to 5%

o& the

capital

Share

Ca(#tal

Re

se

r$

esan

d

S*

r(l

's

Se

c'

re,

o

a+

s

U

ns

ec

*r

ed

Lo

an

s

8nce a"ain

the company

has

increased

the loans to

utili9e the


132/357

-ene&its o&

le$era"e. The

unsecured

loans ha$e

reduced -y

%mean,hile

secured

loans ha$e

increased -y

:%.

#eser$es

and Surplus

has reduced

-y 5%.

00


133/357


134/357

Share !oldin" Pattern


135/357

4,


136/357

ACC Ltd.

4//0

)o+

I+st#t't#o+

al

21


137/357

I+st#t't#o+

al

33

Prooter

a+,

Prooter

ro'(

46

4/


138/357

4/

/1

)I2

I

+3

P


139/357

P

r4


140/357

4/2/

)o+

I+st#t't#o+al 20


141/357

Prooter a+,

Prooter

ro'(

I+st#t't#o+al 48

32


142/357

48


143/357

UltraTech Cements Ltd.

4//1

)o+

I+st#t't#o+al

24


144/357

Prooter

a+,

I+st#t't#o+al

Prooter

ro'(

21

55


145/357

46


146/357

4/2/

)o+

I+st#t't#o+al 14

I+st#t't#o+al


147/357

21

Prooter a+,

Prooter

ro'(

65


148/357

,0


149/357

)o+ 4/22

I+st#t't#o+al

12


150/357

I+st#t't#o+al

23

Prooter a+,

Prooter

ro'(

65


151/357

,1


152/357


153/357

#atio Analysis


154/357

,#


155/357

:A eneral techniue &or analy?in a 'usiness=s per&ormance or its potential

per&ormance is 2no;n as atio Analysis

:atio Analysis inoles calculatin ratios &or a 'usiness or proposed 'usiness and

comparin them to ratios o& other 'usinesses ;ithin the same industry.

:An Inestor is interested in in&ormation reardin the e)act &inancial position o& the

'usiness( its earnin capacity( the present position ;ith reards to possi'ility.

:The pu'lished accounts contain the %L AKc( $alance sheet( +irectors report( Auditor=s

report and Chairman=s speech.

:The ratio is one num'er e)pressed in term o& another. atio is customarily e)pressed in

three di&&erent ;ays G "imple &iures( percentae &orm and in proportions.


156/357

,*


157/357


158/357

Li6*idit7 Ratios


159/357

,4


160/357

C*rrent Ratio

It is the ratio that measures ;hether a &irm has enouh resources to pay its de'ts oerthe ne)t 1# months. It compares a &irmEs current assets to its current lia'ilities. Ideally it

should 'e #M1.

C'rre+t /at#o

C'rre+t Assets

C'rre+t #a#l#t#es

C*rrent Ratio

UltraTech


161/357

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 o& 1 or a'oe is healthy &or the company. It sho;s the company=s strenth to

pay 'ac2 its short term lia'ilities. The &iures o& ACC do not ie a ood indication &or #006 and

#010. It is 'elo; 1( ;hich means the company is ;ea2 in payin 'ac2 short term de't.


162/357

5hile in case o& UltraTech it is a'oe 1 in all the years and also there is not much o& chane. It

means that the company=s strenth to pay 'ac2 short term lia'ilities is constant.

Ta2in recent years into account UltraTech is much stroner than ACC ;hen it comes to

pay 'ac2 short term lia'ilities.

,,


163/357

8*ic Ratio (Acid 9 Test Ratio)

The Acid:test or uic2 ratio or liuid ratio measures the a'ility o& a company to use its

near cash or uic2 assets to e)tinuish or retire its current lia'ilities immediately. 9uic2

assets include those current assets that presuma'ly can 'e uic2ly conerted to cash at

close to their 'oo2 alues. Ideally it should 'e 0.,.

'#c% /at#o

"C'rre+t Assets I+e+tor$

C'rre+t #a#l#t#es


164/357

8*ic Ratio

UltraTech

ACC

2008-09 2008

0.54

0.71

2009-10 2009

0.50

0.47


165/357

2010-11 2010

0.52

0.49

Analysis

The uic2 ratio o& ACC is hihly &luctuatin in the recent time ;hich should 'e a matter o& concern

&or the company. #008 had a stron ratio #006 and #010 had ;ea2er &iures.

UltraTech has ood &iures in terms o& uic2 ratio. It has 'een a'le to maintain its ratio.

The company=s dependency on inentory as short term asset is hih. The inentory rose

drastically in the three years. The inentory has increased &rom 8#1.7 to 16,/.

$oth the companies sa; a decline in #006 and #010 'ut they recoered in #011. #006 ;as a di&&icult

year &or the cement industry. Costs raised and demand ;as stanant or rather declinin.


166/357

,/


167/357


168/357

Le$era&e Ratios


169/357

,7


170/357

"ebt 9 #6*it7 Ratio

The de't:to:euity ratio +K-! is a &inancial ratio indicatin the relatie proportion o&shareholdersE euity and de't used to &inance a companyEs assets closely related to

leerain( the ratio is also 2no;n as is2( earin or Leerae.

Det-!'#t /at#o

otal Det

)et *roth


171/357


172/357

ACC larely depends on shareholders= &und. 3ery small part o& the capital is allotted to de't. It is

ood in a ;ay as the company ;ill not hae to maintain the 'alance o& short term assets.

UltraTech had a ery sta'le ratio in #008:06 'ut a&ter that the company has reduced its

dependency on de'ts and increased the use o& euity capital.

$oth the companies seem to hae 'een &acin similar situations and it can 'e seen that

'oth the company hae started dependin on their o;n money.


173/357

,8


174/357

Capital #mplo7ed to ,et :orth Ratio

There is another alternatie ;ay o& e)pressin the 'asic relationship 'et;een de't and

euity. It helps in 2no;in( ho; much &unds are 'ein contri'uted toether 'y lenders

and o;ners &or each rupee o& o;nerEs contri'ution.

C! to )* /at#o

Ca(#tal !(loe,

)et *orth !:cl',#+; Pref. Share Ca(#tal

C# to ,- Ratio

UltraTech

ACC

2008-09 2008

1.80

1.17

2009-10 2009

1.53

1.15

2010-11 2010


175/357

1.55

1.14

Analysis


176/357

,6


177/357

%i!ed Interest Co$era&e Ratio

A ratio that indicates a &irmEs a'ility to satis&y &i)ed &inancin e)penses( such as interest

and leases.


178/357

UltraTech

ACC

2008-09 2008

11.80

40.16

2009-10 2009

14.46

27.31

2010-11 2010

7.45

25.00

Analysis


179/357

The amount that ACC pays in terms o& interest is ery lo; indicatin that the company

has a stron position in payin o&& lon term loans. From #008 there is massie reduction

in use o& loan and company increased the use o& its o;n money.

UltraTech has more lon term o'liations. It is eident &rom the &iures. Its e)pansion and

amalamation hae led it to 'orro; hue amount o& money &rom the mar2et. Thouh( the

company=s condition is sta'le.

The situations o& 'oth the companies are ery di&&erent. 5hile ACC has miniscule

dependency on loans UltraTech has hue 'orro;ins and thus has a hue lia'ility. ACC

here has a stroner position than UltraTech.


180/357


181/357


182/357

Protabilit7 Ratios


183/357


184/357

,et Prot Ratio

It sho;s the ratio o& et %ro&it a&ter Ta)! to "ales. This atio is e)pressed in %ercentae

Form.

)et Pro=t /at#o

PA

)et Sales > 100


185/357

,et Prot 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


186/357

For ACC( ;hile in #006 #0@ o& the sales ;ere conerted to pro&it( in #010 it came do;n

to 14.,@. These &iures are moderate.

The &iures o& UltraTech sho;s that maBority o& the sales hae &ailed to conert into pro&it.

It is eident that there are hiher e)penses ta2in place.

ACC holds a stroner position in conertin sales into pro&it. UltraTech may'e &acin the

pro'lem as the company is comparatiely ne; than ACC.


187/357

/#


188/357

;peratin& Prot Ratio


189/357

UltraTech

ACC

2008-09 2008

0.22

0.18

2009-10 2009

0.22

0.26

2010-11 2010

0.13

0.14


190/357


191/357

/*


192/357

;peratin& Ratio

This ratio is a test o& the e&&iciency o& the manaement in their 'usiness operation. It is a

means o& operatin e&&iciency. In normal conditions( the operatin ratio should 'e lo;

enouh so as to leae portion o& the sales su&&icient to ie a &air return to the inestors.

?(erat#+; /at#o 1 ?(erat#+; Pro=t /at#o

;peratin& Ratio

UltraTech

ACC

2008-09 2008

0.78

0.82

2009-10 2009

0.78

0.74

2010-11 2010

0.87

0.86


193/357


194/357

/4


195/357

#!penses Ratio

-)pense ratios indicate the relationship o& arious e)penses to net sales. In this case Total

e)penses o& 'oth the companies are compared ;ith its sales. The lo;er the operatin ratio( the

larer is the pro&ita'ility and hiher the operatin ratio( lo;er is the pro&ita'ility.

!:(e+ses /at#o

otal !:(e+ses

)et Sales > 100


196/357

#!penses Ratio

UltraTech

ACC

2008-09 2008

81.82

80.79

2009-10 2009

79.22

74.41

2010-11 2010

89.20


197/357

85.69


198/357


199/357

Ret*rn on Shareholders< %*nds ;R Ret*rn on ,-

It is the ratio o& net pro&it to shareholder=s inestment. It is the relationship 'et;een net pro&it

a&ter interest and ta)! and shareholder=sKproprietorEs &und. This ratio esta'lishes the pro&ita'ility

&rom the share holdersE point o& ie;. The ratio is enerally calculated in percentae.

/et'r+ o+ Sharehol,ers@ 100

Share ol,ers@


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Ret*rn on Shareholders< %*nds ;R Ret*rn on ,-

UltraTech

ACC

2008-09 2008

27.12

24.61

2009-10 2009

23.71

26.71

2010-11 2010


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13.16

17.31

Analysis

ACC=s ratio o& 17.*1 should 'e considered as moderate and has declined in the last year.

UltraTech=s ratio o& 1*.1/ is uite lo;er. It sho;s that the company=s pro&it a&ter ta) is

much less.

$oth the companies are oin throuh similar phase. atios o& 'oth the companies

hae decreased.


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//


203/357

Ret*rn on Total Assets

It is a ratio that measures a companyEs earnins aainst its total net assets. The ratio is

considered an indicator o& ho; e&&ectiely a company is usin its assets to enerate

earnins 'e&ore contractual o'liations must 'e paid.

/et'r+ o+ otal Assets

PA

"


204/357

7.02

10.09


205/357

/7


206/357

Ret*rn on Capital #mplo7ed (R;C#)

It is a ratio that indicates the e&&iciency and pro&ita'ility o& a companyEs capital

inestments.

/et'r+ o+ Ca(#tal !(loe, "/?C!$

PA

otal Ca(#tal !(loe, > 100

Ret*rn on Capital #mplo7ed (R;C#)

UltraTech

ACC

2008-09 2008

15.11

21.11

2009-10 2009

15.52

23.18

2010-11 2010

8.49


207/357

15.23

Analysis

ACC=s


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/8


209/357


210/357

T*rno$er Ratios


211/357

/6


212/357

In$entor7 T*rno$er Ratio

A ratio sho;in ho; many times a companyEs inentory is sold and replaced oer a

period.

I+e+tor 'r+oer /at#o

C?S

Aera;e I+e+tor


213/357

In$entor7 T*rno$er Ratio

UltraTech

ACC

2008-09 2008

5.70

7.67

2009-10 2009

5.02

7.62

2010-11 2010

5.08

7.65


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Analysis

It sho;s that ACC sold its inentory more than 7 times in a year.

UltraTech manaed to sell its inentory Bust a'oe ,.08 times.

ACC holds a stroner position in terms o& sellin the ;hole inentory.


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70


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%i!ed Assests T*rno$er Ratio

Fi)ed:asset turnoer is the ratio o& sales on the pro&it and loss account! to the alue o&

&i)ed assets on the 'alance sheet!. It indicates ho; ;ell the 'usiness is usin its &i)ed

assets to enerate sales. The hiher the ratio( the 'etter it is.


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UltraTech

ACC

2008-09 2008

1.20

1.44

2009-10 2009

1.36

1.27

2010-11 2010

1.06

1.16

Analysis


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The declinin &iure o& ACC sho;s that the company has 'een ine&&icient in inestin into

&i)ed Assests ;hich can 'e turned into sales. They depend ery minutely on &i)ed assets.

UltraTech=s e)pansion and amalamations has made the ratio unsta'le.

$oth the companies hae similar &iures ;hich sho; that they don=t depend much on

&i)ed assets to conert into net sales.


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71


220/357

-orin& Capital T*rno$er Ratio

5or2in capital turnoer ratio esta'lishes relationship 'et;een cost o& sales and net

;or2in capital. As ;or2in capital has direct and close relationship ;ith cost o& oods

sold( there&ore( the ratio proides use&ul idea o& ho; e&&iciently or actiely ;or2in capital

is 'ein used.

*or%#+; Ca(#tal 'r+oer /at#o

)et Sales

)et *or%#+; Ca(#tal

-orin& Capital T*rno$er Ratio


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UltraTech

ACC

-

2008-09 2008

53.64

1213.83

2009-10 2009

40.75

-9.36

2010-11 2010

43.31

-7.77


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223/357

7#


224/357

Total Assets T*rno$er Ratio

This ratio is ascertained 'y diidin the net sales 'y the alue o& total assets.

otal Assets 'r+oer /at#o

)et Sales

otal Assets "


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Analysis

The ratios o& ACC are uite hih ;hich sho;s that the company is less dependent on

total assets to turn in to sales.

UltraTech= ratios are also uite hih.

It sho;s that these companies don=t depend on total assets much to ma2e sales.


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7*


227/357

,et -orth T*rno$er Ratio

This ratio indicates the oerall &inancial and operational e&&iciency o& the company. It is an

indication a'out the optimum capital structure and production e&&iciencies o& the company.

)et *orth 'r+oer /at#o

)et Sales

)* e:cl. Pref. Ca(#tal

,et -orth T*rno$er Ratio

UltraTech

ACC

2008-09 2008

1.77

1.48

2009-10 2009

1.53

1.33

2010-11 2010

1.24


228/357

1.19


229/357

74


230/357

"ebtors T*rno$er Ratio

The ratio measures the net credit sales o& a &irm to the recorded trade de'tors there'y indicatin the

rate at ;hich cash is enerated 'y turnoer o& receia'les or de'tors.

Detors 'r+oer /at#o

)et Sales

"De4tors B#lls /ece#a4les$

"ebtors T*rno$er Ratio

UltraTech

ACC

2008-09 2008

32.91

23.48

2009-10 2009

32.66

39.41

2010-11 2010

21.93


231/357

43.29

Analysis

The ratios o& ACC are uite hih ;hich is not adisa'le. A'oe 4*@ o& the sales made 'y the

company are on credit ;hich means that the company may &ace shortae o& cash.

atios o& UltraTech are reducin uite sini&icantly ;hich means the company does not

hae much to ;orry a'out credit receipts.

ACC here is at a hiher ris2 as the amount o& de'tors and 'ills receia'les are ery hih.


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7,


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8/18/2019 104260253 Financial Repor

Documents

104260253 Financial Report Analysis of Ultratech Cements Ltd and ACC Cements Ltd