46987101 ACC Cement Managerial Accounts Presentation

8/3/2019 46987101 ACC Cement Managerial Accounts Presentation

1/23

ACC CementsFINANCIAL ANALYSIS

AND RATIO ANALYSIS

PRESENTED BY:SHAMMI KUMAR


2/23

Indias foremost cement manufacturer with a countrywide

network of factories and marketing offices.

It has been a pioneer and trend-setter in cement and

concrete technology.

It is among the first companies in India to include

commitment to environment protection as a corporate

objective.

ACC has won accolades for environment friendly measures

taken at its plants and mines, and has also been felicitated

for its acts of good corporate citizenship.

ACC- An Introduction


3/23

Established in year 1936 as a result of a merger of 10 existing

companies 1947 -Indias first indigenous cement plant, designed and built

by ACC at Chaibasa

1956 -Pioneered bulk cement distribution at Okhla, Delhi

1961 -First production of slag cement in India at above plant(Okhla), Delhi

1965 Commenced a Central Research Station at Thane

1979 - Award of management contract for Yanbu (SaudiArabia)

1993 Pioneered Commercial Ready Mix Concrete in Mumbai,India

2004 -ACC named Indias only Super Brand in cement sector

Brief History


4/23

2006 Change of name to ACC Limited with effect

from from The Associated Cement

Companies Limited.

2006 ACC receives Good Corporate Citizen

Award 2005-06 from Bombay Chamber of

Commerce and Industry

2006 New corporate brand identity and logo

adopted from

2006 ACC establishes Anti Retroviral TreatmentCentre for HIV/AIDS patients at Wadi in

Karnataka the first ever such project by a

private sector company in .


5/23

2007 ACC partners with for treatment of HIV/AIDS in Tamil Nadu

2007 Sumant Moolgaokar Technical Institute completes 50

years and reopens with new curriculum

2007 ACC commissions Wind energy farm in Tamilnadu.

2008 Ready mixed concrete business hived off to a new

subsidiary called ACC Concrete Limited.


6/23

Subsidiary companies Bulk Cement Corporation (India) Limited:

Year of Incorporation: 1992-93 Business: Pioneering of bulk handling facility funded by World

Bank. Located at Kalamboli, Mumbai

ACCs Stake & [Investment]: 94.65% [ Rs 37.27 Cr]

Lucky Minmat Private Limited:

Year of Acquisition: 2007

Business: Limestone mining. Location Sikar district, Rajasthan

ACCs Stake & [Investment]: 100% [ Rs 38.10 Cr]

ACC Concrete Limited:

Year of Incorporation: 2008 [ACC transferred the RMX business]

Business: Ready Mix Concrete. 29 plants located pan India

ACCs Stake & [Investment] 100% [ Rs 100.00 Cr]


7/23

Commitment To be one of the most respectedcompanies in India; recognized for challengingconventions and delivering on our promises

A New Vision


8/23

Leadership Maintain our leadership of the Indian cement

industry through the continuous modernization and

expansion of our manufacturing facilities and

activities, and through the establishment of a wide

and efficient marketing network.

Profitability Achieve a fair and reasonable return on capital bypromoting productivity throughout the company.

Growth Ensure a steady growth of business bystrengthening our position in the cement sector.

Quality Maintain the high quality of our products andservices and ensure their supply at fair prices.

Equity Promote and maintain fair industrial relations and an

environment for the effective involvement, welfare

and development of staff at all levels.

Pioneering Promote research and development efforts in theareas of product development and energy, and fuel

conservation, and to innovate and optimize

productivity.

Responsibility Fulfill our obligations to society, specifically in the

areas of integrated rural development and in

safeguarding the environment and natural

ecolo ical balance.

Mission of ACC


9/23

Major Players of Cement

Industry in India ACC Limited Gujarat Ambuja Cement

Ultra tech Grasim India cements JK cements ltd

Jaypee group Century cements Madras cements Birla Corp


10/23

ACC Cement plants in IndiaName of the

CompanyLocation State Process Used

ACC Ltd. Gagal Himachal Pradesh Dry

ACC Ltd. (G) Tikaria Uttar Pradesh Grinding Unit

ACC Ltd. Lakheri Rajasthan Dry

ACC Ltd. Kymore Madhya Pradesh Dry

ACC Ltd. Chaibasa Jharkhand Chaibasa

ACC Ltd. Sindri Jharkhand Grinding Unit

ACC Ltd. Jamul Chhattisgarh Dry and Semi-Dry

ACC Ltd. Chanda Maharashtra Dry

ACC Ltd. Wadi Karnataka Dry

ACC Ltd. - New Wadi Karnataka Dry

ACC Ltd. Macherial Andhra Pradesh Grinding Unit

ACC Ltd. Madukkarai Tamil Nadu Semi-Dry


11/23

ACC PLANT LOCATIONS


12/23

Ordinary Portland cement (OPC)

Portland Pozzolana Cement (PPC) White Cement

Portland Blast Furnace Slag Cement (PBFSC)

Specialized Cement

Rapid Hardening Portland cement Water ProofCement

Types of Cement produced

by ACC


13/23

ACC BARMANA ( H .P)


14/23

COMARATIVE BLANCE

SHEET OF ACC


15/23

2006

(%)

2007(%) 2008(%) 2009(%) 2010(%)

SOURCES OF FUNDS: Rs.(Cror

e)

Rs.(Cror

e)

Rs.(Cror

e)

Rs.(Cror

e)

Rs.(Cror

e)

Shareholders Funds:- 46.96 71.76 83.84 85.77 86.78

Loan Funds: 44.36 20.91 9.47 8.39 8.18

Deferred Tax Liabilities (Net) 8.68 7.32 6.69 5.84 5.04

TOTAL FUNDS 100 100 100 100 100

APP. OF FUNDS:---

Fixed Assets: - 84.16 79.48 80.03 88.29 91.08

Investments:- 9.60 11.50 17.06 11.82 21.28

Net Current Assets( Curr Assests- current

liabilities & provision)

5.62 9.00 2.92 (0.11) (12.37)

MISC EXP.

(to the extent not written off or adjusted)

0.61 0.02 0.00 0.00 0.00

TOTAL ASSETS (Net) 100 100 100 100 100

Common size statement analysis of ACC cements Ltd. from 2006-2010Interpretation:-

There is a significant increase in shareholders fund & decrease in loan funds continuously over a period of time.

There is also a significant increase in the amount invested by the company for the purpose of future growth.There is a significant decrease in current assetsa period of time.


16/23

TREND ANALYSIS OF

ACC


17/23

PARTICULARS 2007* 2008 2009 2010

SOURCES OF FUNDS: Rs.(Crore) Rs.(Crore) Rs.(Crore) Rs.(Crore)

Shareholders Funds:- 100 132.06 156.79 191.42

Loan Funds 100 51.21 52.62 61.9

Deferred Tax Liabilities 100 103.4 104.7 108.9

TOTAL FUNDS 100 113.1 131.2 158.3

APP. OF FUNDS:-

Fixed Assets 100 113.9 145.7 181.4

Investments 100 167.8 134.9 293.1

Curr Assets,Loans & Adv: --- 100 114.7 143.6 119.4

(Less):-Current Liabilities

&Prov.

MISC EXP.

(to the extent not written off or

adjusted)

100

100

134.8

0.00

181.1

0.00

206.4

0.00

TOTAL ASSETS (Net) 100 113.1 131.2 158.3


18/23

RATIO ANALYSIS OF

ACC


19/23

Dec0

6

Dec0

7

Dec08 Dec09 Dec10

Liquidity Ratio

Current Ratio 0.58 0.77 0.86 0.89 0.67

Quick Ratio 0.42 0.61 0.55 0.61 0.42

WORKING CAPITAL RATIOS

Interpretation: - As we know that ideal current ratio for any firm is 2:1.The current ratio of company is less thanthe ideal ratio. This depicts that companys liquidity position is not sound. Its current assets are less than its

current liabilities.Generally a QR of 1:1 is considered to represent satisfactory current financial position. The trend of quick ratio isuneven & the ratio is around 0.5:1 over a period of time. A quick ratio is an indication that the firm is liquid and hasthe less confidence to meet its current liabilities in time. This shows company has liquidity problem.

Debt-equity

ratio.

0.50 0.25 0.07 0.10 0.09

Solvency Ratio

Debt-equity ratio shows relationship between borrowed funds and owners capital is a popular measure of the

long term financial solvency of the firm. For ACC it was the highest around 0.5:1 in 2005.After that it showsfluctuation.

Activity/mgmt efficiency Ratio:


20/23

Dec,06 Dec07 Dec08 Dec09 Dec10

Inventory

Turnover Ratio

5.37 9.33 24.85 27.51 25.22

Debtor Turnover

Ratio

16.34 27.75 27.40 24.12 31.22

Investment

Turnover Ratio

12.29 22.40 24.85 27.51 25.22

Work cap turn. (27.93) (6.96) (18.25) (17.02) (54.17)

Activity/mgmt efficiency Ratio:-

INTERPRETATION:1.It shows increasing trend which is favorable for the company. As it indicates how rapidly

the inventory is turning into receivable through sales. A high ratio is good from the viewpoint of liquidity. A low ratio would signify that inventory does not sell fast.

2. A high ratio is indicative of shorter time lag between credit sales and cash collection. Thehigher the value of debtors turnover the more efficient is the management of debtors or

more liquid the debtors are. A low ratio shows that debts are not being collected rapidly. Asthe graph reveals that the debts are collected in time & the process is improvingconsistently. This shows that company is utilizing its debtors efficiently as compare to

previous year.3. This ratio indicates high net working capital requires for sales. This company havingnegative working capital because, they have more current liabilities over current assets. Itshows that the short term loans are not sufficient and more money are invested in thepurchase of fixed assets. Thus this ratio is helpful to forecast the working capitalrequirement on the basis of sale.


21/23

Profitability

Ratio

Dec,06 Dec07 Dec08 Dec09 Dec10

Gross ProfitRatio

17.32 28.97 23.72 20.59 27.68

Net Profit

Ratio

16.85 21.16 20.44 16.29 19.69

Investment

Valuation

Ratio

Face value 10.00 10.00 10.00 10.00 10.00

Dividend per

Share

8.00 15.00 20.00 20.00 23.00

Profitability & Investment turnover Ratio:-

G/P margin ratio shows the profit relative to sales. A high ratio of gross profits to sales is a sign of goodmanagement as it implies that the cost of production of the firm is relatively low. For ACC it is uneven but it wasgood in FY07 & FY10.

The net profit margin is indicative of management ability to operate the business with sufficient success not onlyto recover from revenues, but also to leave a reasonable margin to the owners. A high net profit margin wouldensure adequate return to the owners as well as enable a firm to face adverse economic conditions. It issignificant & satisfactory for the company.

As it shows the dividend per share ratio is increasing over years. It means that the investors have faith in thecompany.


22/23

Suggestion:-

It is suggested that the company has to increase its current assets to meet its short-term obligations.Company has to improve debtors collection period continuously so that effective

receivable management will possible.Reserves should be utilized for the growth of the company.While forecasting cash flow, the management should take into account the impact ofunforeseen events, market cycles and actions by competitors. The effect of unforeseendemands of working capital should be factored in.Collaborating with the customers & suppliers instead of being focused only on ownoperations will also yield good results. If feasible, helping them to plan their inventory

requirements efficiently to match their production with their consumption will help reduceinventory levels.


23/23

THANK YOU!

Documents

46987101 ACC Cement Managerial Accounts Presentation