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Assignment

Of

Make a comparative study of various


elements of capital structure of two
company of cement industry past five
years

Submitted To:- Submitted By:-


Lect.Renuka Sharma Abu Bashar

Lovely Professional University


Table of contents

15Introduction
16Scope of this report
17Income statement
18Acc’s:-
19Report card
20UltraTech Cement Ltd
21Report card
22Annual results in brief
23Balance sheet
24Profit loss account
25Cash flow
26Dividend
27Capital Structure
28Ratios
29Comparison of both cement companies
India Cement Report

Introduction:-
India is the second largest producer of cement in the world behind
China (1.06 billion tones) and the Indian cement industry
contributes approximately 6% of the overall global production.
This position has been achieved because of India’s sustained
growth at an average rate of 8.1% per year between 1981 and
2004-05. The booming demand for cement, both in India and
abroad, has attracted global majors to India. Within a short span of
2005-06, four of the top-5 cement companies in the world have
entered India through mergers, acquisitions, joint ventures or
Greenfield projects.

Scope of this report:-


Our India Cement report provides in-depth analysis, built on 2004
and 2005 year-end market data, and updated statistics for Q1-Q3
2006. Packed with tables and graphs from our own CEIC statistics
databases, and expert views from our own on-the-ground analysts,
this report delivers a thorough yet easily digested overview of the
Indian Cement market, keeping you up to speed and ahead of the
curve on industry developments.
Income Statement

ACC’s:-
ACC Limited is an India-based company whose operations
predominantly relate to the manufacture of cement. The Company
caters mainly to the needs of the domestic market. During the year
ended December 31, 2007, the production and sale of cement
totaled 19.92 million tons and 19.97 million tons respectively. In
2007, its clinkering capacity and cement grinding capacity crossed
14 million tons and 22 million tons, respectively. Effective January
1, 2008, the Company hived off its ready mixed concrete business
to a subsidiary, ACC Concrete Limited. In 2007, the Company
acquired Lucky Minmat Private Limited, which holds lime stone
mines in the Sikar District of Rajasthan. In 2007, ACC Limited
divested its entire stake in its engineering subsidiary, ACC Nihon
Castings Ltd.

Total Revenue Rs.17,599M

Net Income Rs.3,712M

EPS Rs.19.70
Report card

PE ratio 10.22 25/04/08

EPS (Rs) 76.59 Dec, 07

Sales (Rs crore) 1,795.75 Mar, 08

Face Value (Rs) 10

Net profit margin (%) 20.44 Dec, 07

Last bonus 3:5 02/04/96

Last dividend (%) 100 31/01/08

Return on average equity 34.64 Dec, 07

Profit & Loss account ------------------- in Rs. Cr. -------------------

Mar '04 Mar '05 Dec '05 Dec '06 Dec '07

12 mths 12 mths 9 mths 12 mths 12 mths

Income

Sales Turnover 3,899.02 4,549.80 3,723.51 6,467.84 7,865.11

Excise Duty 615.04 651.95 539.71 736.09 970.32

Net Sales 3,283.98 3,897.85 3,183.80 5,731.75 6,894.79

Other Income 117.69 44.71 300.84 247.87 369.35

Stock Adjustments -7.98 53.44 45.26 -29.25 6.93

Total Income 3,393.69 3,996.00 3,529.90 5,950.37 7,271.07

Expenditure
Raw Materials 1,210.32 1,511.25 1,078.84 1,513.55 1,843.65

Power & Fuel Cost 356.15 348.48 299.52 430.98 517.56

Employee Cost 203.22 214.76 184.84 318.02 352.73

Other Manufacturing Expenses 180.55 183.32 157.65 262.45 344.17

Selling and Admin Expenses 810.51 939.32 838.12 1,298.32 1,547.30

Miscellaneous Expenses 65.73 83.16 84.88 189.08 354.51

Preoperative Exp Capitalized 0.00 0.00 0.00 0.00 0.00

Total Expenses 2,826.48 3,280.29 2,643.85 4,012.40 4,959.92

Mar '04 Mar '05 Dec '05 Dec '06 Dec '07

12 mths 12 mths 9 mths 12 mths 12 mths

Operating Profit 449.52 671.00 585.21 1,690.10 1,941.80

PBDIT 567.21 715.71 886.05 1,937.97 2,311.15

Interest 112.17 95.23 66.19 75.19 73.87

PBDT 455.04 620.48 819.86 1,862.78 2,237.28

Depreciation 176.85 186.86 164.64 254.61 305.43

Other Written Off 30.33 19.40 6.46 6.24 1.55

Profit Before Tax 247.86 414.22 648.76 1,601.93 1,930.30

Extra-ordinary items 20.87 37.55 46.93 14.55 -0.16

PBT (Post Extra-ord Items) 268.73 451.77 695.69 1,616.48 1,930.14

Tax 54.32 66.43 140.17 369.10 491.70

Reported Net Profit 200.24 378.39 544.18 1,231.84 1,438.59

Total Value Addition 1,616.16 1,769.04 1,565.01 2,498.85 3,116.27

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 70.88 124.97 147.61 280.92 375.02

Corporate Dividend Tax 9.08 17.53 20.70 39.40 63.74

Per share data (annualized)

Shares in issue (lakhs) 1,771.96 1,785.34 1,845.08 1,872.78 1,876.24

Earning Per Share (Rs) 11.30 21.19 29.49 65.78 76.67


Equity Dividend (%) 40.00 70.00 80.00 150.00 200.00

Book Value (Rs) 76.37 89.46 115.76 167.81 221.33

Balance Sheet ------------------- in Rs. Cr. -------------------

Mar '04 Mar '05 Dec '05 Dec '06 Dec '07

12 mths 12 mths 9 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital

177.40

178.74

184.72

187.48

187.83
Equity Share Capital

177.40

178.74

184.72

187.48

187.83

Share Application Money

0.54

0.49

0.82

0.28

0.10

Preference Share Capital

0.00

0.00
0.00

0.00

0.00

Reserves

1,175.79

1,418.45

1,951.21

2,955.16

3,964.78

Revaluation Reserves

0.00

0.00

0.00

0.00

0.00
Networth

1,353.73

1,597.68

2,136.75

3,142.92

4,152.71

Secured Loans

1,040.13

1,141.07

950.12

720.96

266.03

Unsecured Loans

287.11

266.66

121.30
50.20

40.38

Total Debt

1,327.24

1,407.73

1,071.42

771.16

306.41

Total Liabilities

2,680.97

3,005.41

3,208.17

3,914.08

4,459.12
Mar '04

Mar '05

Dec '05

Dec '06

Dec '07

12 mths

12 mths

9 mths

12 mths
12 mths

Application Of Funds
Gross Block

3,789.75

4,074.86

4,628.64

4,816.25

5,464.07

Less: Accum. Depreciation

1,414.14

1,565.69

1,722.29

1,893.76

2,149.35

Net Block

2,375.61

2,509.17

2,906.35

2,922.49

3,314.72
Capital Work in Progress

116.10

388.24

290.95

558.42

649.19

Investments

375.74

326.69

333.80

543.09

844.81

Inventories
378.01

542.38

600.95

624.13

730.86

Sundry Debtors

182.37

190.54

199.17

213.96

289.29

Cash and Bank Balance

35.17

54.94

100.60

152.98

78.87
Total Current Assets

595.55

787.86

900.72

991.07

1,099.02

Loans and Advances

435.21

443.33

533.54

569.21

544.31

Fixed Deposits

4.34
2.38

2.19

467.19

664.61

Total CA, Loans & Advances

1,035.10

1,233.57

1,436.45

2,027.47

2,307.94

Deferred Credit

0.00

0.00

0.00

0.00

0.00
Current Liabilities

1,086.39

1,224.51

1,449.02

1,596.50

1,991.27

Provisions

170.11

248.46

316.77

541.83

666.27

Total CL & Provisions

1,256.50

1,472.97
1,765.79

2,138.33

2,657.54

Net Current Assets

-221.40

-239.40

-329.34

-110.86

-349.60

Miscellaneous Expenses

34.92

20.71

6.41

0.94

0.00
Total Assets

2,680.97

3,005.41

3,208.17

3,914.08

4,459.12

Contingent Liabilities

157.86

144.16

282.42
341.56

890.62

Book Value (Rs)

76.37

89.46

115.76

167.81

221.33

UltraTech Cement Ltd


Report card
PE ratio 9.59 29/04/08

EPS (Rs) 80.94 Mar, 08

Sales (Rs crore) 1,601.66 Mar, 08

Face Value (Rs) 10

Net profit margin (%) 15.75 Mar, 07

Last dividend (%) 50 22/04/08

Return on average equity 44.35 Mar, 07

Annual results in brief

Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04

Sales 5,509.22 4,910.83 3,299.45 2,681.05 2,251.14

Operating profit 1,720.06 1,417.81 554.26 272.81 319.09

Interest 75.67 86.83 89.64 106.88 115.01

Gross profit 1,744.24 1,392.44 501.62 188.18 263.67

EPS (Rs) 80.94 62.84 18.46 0.23 3.12

Annual results in details


Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04

Other income 99.85 61.46 37.00 22.25 59.59

Stock adjustment -26.63 32.54 -39.12 -20.90 8.27

Raw material 536.77 392.99 282.25 190.59 163.78


Power and fuel 1,253.26 1,138.32 910.11 783.13 630.59

Employee expenses 171.55 117.22 92.26 72.96 66.67

Excise - - - - -

Admin and selling expenses - - - - -

Research and development expenses - - - - -

Expenses capitalised - - - - -

Other expenses 1,854.21 1,811.95 1,499.69 1,305.62 1,062.74

Provisions made - - - 76.84 -

Depreciation 237.23 226.25 216.03 221.78 214.47

Taxation 499.40 383.91 55.83 -36.45 10.37

Net profit / loss 1,007.61 782.28 229.76 2.85 38.83

Extra ordinary item - - - - -

Prior year adjustments - - - - -

Equity capital 124.49 124.49 124.49 124.40 124.40

Equity dividend rate - - - - -

Agg.of non-prom. shares (Lacs) 565.20 0.59 0.61 - 1.24

Agg.of non promotoHolding (%) 45.40 47.02 48.96 48.92 100.00

OPM (%) 31.22 28.87 16.80 10.18 14.17

GPM (%) 31.10 28.00 15.03 6.96 11.41

NPM (%) 17.96 15.73 6.89 0.11 1.68

Balance sheet
Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 03
Sources of funds

Owner's fund

Equity share capital 124.49 124.40 124.40 124.40 3.00

Share application money - 0.09 - 0.51 -

Preference share capital - - - - -

Reserves & surplus 1,639.29 913.78 942.73 950.54 -

Loan funds

Secured loans 1,151.25 1,221.93 1,253.35 1,245.01 -

Unsecured loans 427.38 229.90 278.03 309.07 -

Total 3,342.41 2,490.10 2,598.51 2,629.53 3.00

Uses of funds

Fixed assets

Gross block 4,784.70 4,605.38 4,304.29 4,176.46 -

Less : revaluation reserve - - - - -

Less : accumulated depreciation 2,267.42 2,068.21 1,755.39 1,448.56 -

Net block 2,517.28 2,537.17 2,548.90 2,727.90 -

Capital work-in-progress 696.95 141.03 48.18 24.06 -

Investments 483.45 172.39 184.79 238.09 1.21

Net current assets

Current assets, loans & advances 972.13 781.95 850.78 745.21 1.98

Less : current liabilities & provisions 1,327.40 1,142.44 1,034.14 1,121.25 0.21

Total net current assets -355.27 -360.49 -183.36 -376.04 1.77

Miscellaneous expenses not written - - - 15.52 0.02

Total 3,342.41 2,490.10 2,598.51 2,629.53 3.00

Notes:

Book value of unquoted investments 483.45 172.39 184.79 238.09 1.21

Market value of quoted investments - - - - -

Contingent liabilities 1,942.56 685.42 130.74 83.58 -

Number of equity shares outstanding (Lacs) 1244.86 1243.99 1243.99 1243.99 300.00
Profit loss account
Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04

Income:

Operating income 4,909.05 3,299.45 2,681.05 2,264.12

Expenses

Material consumed 902.06 733.72 609.13 482.34

Manufacturing expenses 1,194.54 958.30 839.40 736.34

Personnel expenses 117.22 92.26 72.96 66.67

Selling expenses 1,137.66 843.99 650.98 473.49

Administrative expenses 133.93 109.57 137.36 162.32

Expenses capitalized - - - -

Cost of sales 3,485.41 2,737.84 2,309.83 1,921.16

Operating profit 1,423.64 561.61 371.22 342.96

Other recurring income 57.65 23.11 21.70 33.33

Adjusted PBDIT 1,481.29 584.72 392.92 376.29

Financial expenses 92.61 96.99 128.05 138.85

Depreciation 226.25 216.03 221.78 198.90

Other write offs - - - 15.57

Adjusted PBT 1,162.43 271.70 43.09 22.97

Tax charges 383.91 55.83 -36.45 10.37

Adjusted PAT 778.52 215.87 79.54 12.60

Non recurring items 3.76 1.48 -77.24 20.44

Other non cash adjustments - 12.41 0.55 5.79

Reported net profit 782.28 229.76 2.85 38.83

Earnings before appropriation 962.85 239.87 20.77 38.83


Equity dividend 49.79 21.79 9.33 6.22

Preference dividend - - - -

Dividend tax 6.98 3.06 1.33 0.80

Retained earnings 906.08 215.02 10.11 31.81

Cash flow
Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 03

Profit before tax 1,166.19 285.59 43.24 49.20 -

Net cash flow-operating activity 1,113.09 551.63 337.42 381.35 0.07

Net cash used in investing activity -1,046.25 -357.24 -87.18 -163.04 -0.09

Net cash used in fin. Activity -38.84 -191.02 -235.81 -176.60 -

Net inc/dec in cash and equivalent 27.99 3.37 14.43 41.80 -0.02

Cash and equivalent begin of year 61.60 58.23 41.83 0.03 0.05

Cash and equivalent end of year 89.59 61.60 56.26 41.83 0.03

Dividend

Year Month Dividend (%)

2008 Apr 50

2007 Mar 40

2006 Jul 18

2005 Apr 8

004 Sep 5
Capital Structure
Authorized Paid Up Shares Paid Up Face
From Year To Year Class Of Share Issued Capital Paid Up Capital
Capital (Nos) Value

2006 2007 Equity Share 130.00 124.49 124485879 10 124.49

2005 2006 Equity Share 130.00 124.40 124398621 10 124.40

2004 2005 Equity Share 130.00 124.40 124398621 10 124.40

2003 2004 Equity Share 130.00 124.40 124398621 10 124.40

2002 2003 Equity Share 30.00 30.00 29999993 1 3.00

2002 2003 Equity Share 30.00 30.00 7 10

Ratios
Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 03

Per share ratios

Adjusted EPS (Rs) 62.54 17.35 6.39 1.01 -

Adjusted cash EPS (Rs) 80.71 34.72 24.22 18.25 -

Reported EPS (Rs) 62.84 18.47 0.22 3.12 -

Reported cash EPS (Rs) 81.02 35.84 18.06 20.36 -

Dividend per share 4.00 1.75 0.75 0.50 -

Operating profit per share (Rs) 114.36 45.15 29.84 27.57 -

Book value (excl rev res) per share (Rs) 141.69 83.46 85.78 85.16 0.99

Book value (incl rev res) per share (Rs.) 141.69 83.46 85.78 85.16 0.99

Net operating income per share (Rs) 394.35 265.23 215.52 182.01 -
Free reserves per share (Rs) 116.03 60.27 63.37 62.75 -0.01

Profitability ratios

Operating margin (%) 29.00 17.02 13.84 15.14 -

Gross profit margin (%) 24.39 10.47 5.57 6.36 -

Net profit margin (%) 15.75 6.91 0.10 1.69 -

Adjusted cash margin (%) 20.23 12.99 11.14 9.88 -

Adjusted return on net worth (%) 44.13 20.79 7.45 1.18 -

Reported return on net worth (%) 44.35 22.13 0.26 3.66 -

Return on long term funds (%) 37.78 14.89 6.97 6.43 -

Leverage ratios

Long term debt / Equity 0.88 1.38 1.30 1.34 -

Total debt/equity 0.89 1.40 1.44 1.45 -

Owners fund as % of total source 52.76 41.69 41.06 40.88 100.00

Fixed assets turnover ratio 1.03 0.71 0.62 0.54 -

Liquidity ratios

Current ratio 0.73 0.68 0.82 0.66 9.43

Current ratio (inc. st loans) 0.70 0.66 0.68 0.59 9.43

Quick ratio 0.39 0.34 0.53 0.45 9.43

Inventory turnover ratio 34.61 21.20 11.04 12.12 -

Payout ratios

Dividend payout ratio (net profit) 7.25 10.81 374.03 18.07 -

Dividend payout ratio (cash profit) 5.62 5.57 4.74 2.77 -

Earning retention ratio 92.71 88.49 86.60 44.29 -

Material
cost
Cash earnings retention ratio 94.35 94.25 component 17.74 23.42 23.49 20.93
(%
earnings)

Coverage ratios

Adjusted cash flow time total debt 1.57 3.36 5.08 6.84 -

Financial charges coverage ratio 15.99 6.03 3.07 2.71 -

Fin. charges cov.ratio (post tax) 11.89 5.60 2.75 2.82 -


Component ratios

Selling cost Component 23.17 25.57 24.28 20.91 -

Exports as percent of total sales 13.71 15.23 19.88 17.42 -

Import comp. in raw mat. Consumed 2.43 0.24 - - -

Long term assets / total Assets 0.79 0.78 0.76 0.79 0.37

Bonus component in equity capital (%) - - - - -

Comparison of both cement companies

Eps Year Year Year Year Year

March 04 March March March March

05 06 07 08

Acc’s 11.30 21.19 29.49 65.78 76.67

Ultra tech 3.12 0.23 18.46 62.84 80.94

Higher Eps Acc’s Acc’s Acc’s Acc’s Ultra

Tech

COMPA 04 04 05 05 06 06 07 07 08 08
NY Debt
Equit Debt Equit Debt Equit Equit Debt Equit Debt
y y y y y

Acc’s 1353.7 1327.2 1597.6 1407.7 2136.7 1071.4 3142.9 771.16 4152.7 306.47
3 4 8 3 3 2 2 1

Ultra tech 950.14 1554.0 942.73 1531.8 913.78 1451.8 1639.2 1578.6 1740.2 1698.6
8 3 3 9 3 4 3

When we compare eps of both companies the current year eps of


the ultra tech is higher but of we see the eps of last four year eps of
the Acc’s company higher.
The means when eps higher or increasing then company issuing
move debt as compare to equity.