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 2

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. 1 2 3 4 5 6 7 8 9 10 11 Group A.C.C. Ltd. Grasim Industries Ambuja Cements Ltd. UltraTech Cement Ltd. India Cements Jaypee Group Shree Cement J.K. Group Madras Cements Century Textiles Dalmia Cement Installed Capacity as on 22.41 Cement Production Share (%)

20.95 16.32 18.01 15.86 9.11 8.05 7.78 7.50 6.27 7.22 3.38

10.73 9.82 9.44 8.53 5.11 4.95 4.72 4.06 4.04 3.83 2.12

19.65 18.30 21.90 10.74 9.93 9.10 9.37 8.92 7.80 6.50

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 8

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

A) Sales

Sales
14000.00 12000.00 10000.00 Rs. (In Crore) 8000.00 Sales of Ultrarech 6000.00 4000.00 2000.00 0.00 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Sales of ACC

12

B) Profit before depreciation, interest and tax

PBDIT
3000.00 2500.00 2000.00 Rs. (In Crore) 1500.00 1000.00 500.00 0.00 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

PBDIT of Ultrarech PBDIT of ACC

13

C) Profit before depreciation and tax

PBDT
3000.00 2500.00 2000.00 Rs. (In Crore) 1500.00 1000.00 500.00 0.00 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 PBDT of Ultrarech PBDT of ACC

14

D) Profit after tax

PAT
1800.00 1600.00 1400.00 1200.00 Rs. (In Crore) 1000.00 800.00 600.00 400.00 200.00 0.00 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 PAT of Ultrarech PAT of ACC

15

E) Dividend per Share

Dividend Per Share

35.00 30.00 25.00 Rs. per Share 20.00 DPS of Ultrarech 15.00 10.00 5.00 0.00 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 DPS of ACC

16

F) Earnings per share (Basic)

EPS
100.00 90.00 80.00 70.00 Rs. per Share 60.00 50.00 40.00 30.00 20.00 10.00 0.00 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 EPS (Basic) of Ultrarech EPS (Basic) of ACC

17

G) Book Value per Share

Book Value per Share

450.00 400.00 350.00 Rs. (In Crore) 300.00 250.00 200.00 150.00 100.00 50.00 0.00 Book Value per Share of Ultrarech Book Value per Share of ACC

18

H) Net Worth

Net Worth
12000.00 10000.00 8000.00 Rs. (In Crore) 6000.00 4000.00 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
18000.00 16000.00 14000.00 12000.00 Rs (In Crore) 10000.00 8000.00 6000.00 4000.00 2000.00 0.00 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Total Assets of Ultrarech Total Assets of ACC

20

Accounting Policies

21

ACC Ltd.
(I) Basis of preparation (i) 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. (ii) Financial statements are based on historical cost and are prepared on accrual basis, except where impairment is made and revaluation is carried out. (iii) 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

(i) Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. (ii) 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 (i) 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. (ii) 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 (i) Fixed assets are stated at cost of acquisition or construction less accumulated depreciation, impairment losses. (ii) 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.

F) 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.

G) 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. Non-monetary 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: (i) 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. (ii) 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. (iii) 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. (iv) 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. Long-term 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

(a) Company Vehicles other than those provided to the employees at 20% per annum. (b) Roads, Culverts, Walls, Buildings etc. within factory premises at 3.34% per annum. (c) Computer and Office Equipments at 25% per annum (d) Furniture and Fixtures 7 years (e) Mobile Phones 3 years (f) Motor Cars given to the employees as per the Companys Scheme are depreciated over the Scheme period. (ii) Assets acquired up to September 30, 1987, are depreciated at the rates prevailing at the time of acquisition. (iii) The value of leasehold land and mining lease is amortized over the period of the lease. (iv) Assets not owned by the Company are amortized over a period of five years or the period specified in the agreement. (v) 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. (vi) 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. (vii) Depreciation is charged on Straight Line basis at UltraTech Cement Middle East Investment Limited and its subsidiaries at following rates.

31

Tangible Assets: Buildings (including improvements) Plant and equipment Furniture, fixtures and office equipment Motor vehicles Amortization of intangible Assets (B) Intangible Assets:

No. of Years 3-15 2-20 1-5 3-5 8.5

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.

11. Employee Benefits: (i) 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.

14. Revenue Recognition: (i) 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. (ii) Income from services is recognized as they are rendered, based on agreement/arrangement with the concerned parties. (iii) Dividend income on investments is accounted for when the right to receive the payment is established. Interest income is recognized on accrual basis. (iv) 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.

19. Government Grants and Subsidies: (i) 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. (ii) 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. (iii) 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.

20. 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

ACC Ltd.
Unsecured Lo a n s 1%

Dec '08
Share Capital 3% Share Capital Reserves and Surplus Secured Loans Unsecured Loans Reserves and Surplus 88%

Secured Loans 8%

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

Secured Loans 8%

Unsecured Lo a n s 0% Share Capital 3%

Dec '09

Share Capital Reserves and Surplus 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

Secured Loans 7%

Unsecured Lo a n s Share Capital 0% 3% Share Capital Reserves and Surplus 90% Reserves and Surplus Secured Loans Unsecured Loans

Dec '10

Reserves and Surplus amount to 90% of the capital Equity Capital amounts to 3% of the capital Loans amount to 7% of the capital

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

UltraTech Cements Ltd.

March '09
Unsecured Lo a n s 17% Share Capital 2% Share Capital Reserves and Surplus Secured Loans Unsecured Loans Secured Loans 20%

Reserves and Surplus 61%

Reserves and Surplus amount to 61% of the capital Equity Capital amounts to 2% of the capital Loans amount to 37% of the capital

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 expensive and may have a high impact on the earnings per equity share.

42

Secured Loans 14%

Unsecured Share Capital Lo a n s 2% 12%

March '10

Share Capital Reserves and Surplus 72% Reserves and Surplus Secured Loans Unsecured Loans

Reserves and Surplus amount to 72% of the capital Equity Capital amounts to 2% of the capital Loans amount to 26% of the capital

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
Secured Lo a n s 19% Unsecured Share Capital Lo a n s 2% 9% Share Capital Reserves and Surplus 70% Reserves and Surplus Secured Loans Unsecured Loans

Reserves and Surplus amount to 70% of the capital Equity Capital amounts to 2% of the capital Loans amount to 28% of the 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.

N on Institutional 21%

2008

Institutional 33%

Promoter and Promoter Group 46%

46

2009
N on Institutional 22% Promoter and Promoter Group 46%

Institutional 32%

47

N on Institutional 20%

2010

Institutional 32%

Promoter and Promoter Group 48%

48

UltraTech Cements Ltd.

2009
N on Institutional 24%

Institutional 21%

Promoter an d Promoter Group 55%

49

N on Institutional 14%

2010

Institutional 21% Promoter and Promoter Group 65%

50

N on Institutional 12%

2011

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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 1.09 1.00 1.13 0.72 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 0.54 0.71 0.50 0.47 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 0.59 0.10 0.35 0.09 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 1.80 1.17 1.53 1.15 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 11.80 40.16 14.46 27.31 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 15.31 16.66 15.50 20.02 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 0.22 0.18 0.22 0.26 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 0.78 0.82 0.78 0.74 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 81.82 80.79 79.22 74.41 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 Share Holders Fund X 100

Return on Shareholders Funds OR Return on NW 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 27.12 24.61 23.71 26.71 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 12.66 14.25 13.10 16.00 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) 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 15.11 21.11 15.52 23.18 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 5.70 7.67 5.02 7.62 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 1.20 1.44 1.36 1.27 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 53.64 40.75 43.31

1213.83 -9.36 -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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 0.83 0.86 0.85 0.80 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 1.77 1.48 1.53 1.33 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 32.91 23.48 32.66 39.41 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 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 0.01 0.03 0.01 0.03 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 EP S

Dividend Payout Ratio 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 0.06 0.31 0.07 0.27 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 EP S

Price-Earnings Ratio 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 6.96 10.98 9.61 8.16 15.90 15.37

79

Earnings per Share This ratio measures the profit available to the equity shareholders on a per share basis.
PAT No. of (Interim Equity Dividend + Final Equity Dividend)

EP S =

E PS 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 78.48 64.63 87.80 85.60 51.23 59.66

80

Dividend per Share This ratio shows the dividend divided among equity shareholders.
DPS = (Interim Equity Dividend + Final Equity Dividend) No. of Equity Shares

DP S 2008-09 / 2008 2009-10 / 2009 2010-11 / 2010

UltraTech ACC 5.00 20.00 6.00 23.00 6.00 30.50

81

Common size Statement

82

UltraTech Cements Ltd.

Balance Sheet of UltraTech Ltd Rs. (In Crore) March March '09 % '10 % 124.49 124.49 1.68 1.99 3,475.93 4,482.17 3,602.10 55.70 4,608.65 65.43 1,175.80 854.19 965.83 750.33 2,141.63 33.12 1,604.52 22.78 722.93 11.18 830.73 11.79 6,466.66 100.00 7,043.90 100.00 7,401.02 2,765.33 4,635.69 677.28 5,312.97 82.16 1,034.80 16.00 691.97 193.94 104.49 381.56 0.00 1,371.96 1,120.92 132.15 1,253.07 118.89 1.84 6,466.66 100.00 8,078.14 3,136.46 4,941.68 259.37 5,201.05 73.84 1,669.55 23.70 821.70 215.83 83.73 351.13 0.00 1,472.39 1,138.08 161.01 1,299.09 173.30 2.46 7,043.90 100.00 March '11 % 274.04 4.78 10,387.22 10,666.04 64.48 2,789.76 1,354.84 4,144.60 25.06 1,730.05 10.46 16,540.69 100.00 17,942.27 6,542.02 11,400.25 1,105.32 12,505.57 75.60 3,730.32 22.55 1,956.52 602.29 144.79 1,053.88 1.22 3,758.70 2,880.41 573.49 3,453.90 304.80 1.84 16,540.69 100.00

Share Capital Employees Stock Options Outstanding Reserves and Surplus Shareholders Funds Secured Loans Unsecured Loans Loan Funds Deferred Tax Liabilities (Net) Total Liabilities Gross Block Less: Depreciation Net Block Capital Work-in-Progress Fixed Assets Investments Inventories Sundry Debtors Cash and Bank Balances Loans and Advances Assets held for Disposal Current Assets, Loans and Advances Current Liabilities Provisions Less: Current Liabilities and Provisions Net Current Assets Total Assets

83

P&L A/C of UltraTech Ltd March '09 6577.68 7,160.42 777.34 6383.08 45.15 60.69 88.76 5216.22 684.96 2,420.17 19.5 217.67 1,433.79 125.51 323 -8.38 1361.46 197.54 0 180.58 6.32 977.02 1,598.12 2575.14 2575.14 62.24 10.58 -36.08 100 2,438.40 78.48 78.48 Rs. (In Crore) March March '10 '11 7169.43 13558.42 7,729.13 14,858.60 679.45 1,648.69 7049.68 13209.91 56.21 122.34 65.81 164.33 -2.27 61.84 5581.27 11772.23 960.61 1,805.33 2,148.87 4,547.98 63.74 122.18 252.94 666.5 1,653.53 3,597.91 117.52 277.11 388.08 765.73 -4.02 -10.51 1588.16 1786.19 387.25 -0.13 107.8 0 1093.24 2,438.40 3531.64 3531.64 74.69 12.41 -34.83 750 2,729.37 87.82 87.79 510.72 -125.52 -3.24 0 1404.23 2,729.37 4133.6 4133.6 164.42 26.67 58.92 1,100.00 2,783.59 62.74 62.72

Income Gross Sales Less: Excise Duty Net Sales Interest and Dividend Income Other Income Increase / (Decrease) in Stocks Expenditure Raw Materials Consumed Manufacturing Expenses Purchase of Finished Products Payments to and Provisions for Employees Selling, Distribution, Administration and Other Expenses Interest and Finance Charges Depreciation and Obsolescence Less: Captive Consumption of Cement Profit Before Tax Expenses Income Tax Expenses Provision for Current Tax Excess tax provision reversal related to earlier years Deferred Tax (Credit) / Charge Provision for Fringe Benefit Tax Profit After Tax Balance brought forward from Previous Year Profit Available for Appropriation Appropriations Proposed Dividend Corporate Dividend Tax Debenture Redemption Reserve General Reserve Balance carried to Balance Sheet Basic Earnings Per Equity Share Diluted Earnings Per Equity Share

84

ACC Cements Ltd.

Balance Sheet of ACC Ltd Dec '08 % 187.88 0.00 4,739.85 4,927.73 450.00 32.03 482.03 335.79 5,745.55 5,835.67 2,365.97 3,469.70 1,602.86 5,072.56 679.08 793.27 310.17 984.24 20.67 651.28 2,759.63 1,801.79 963.93 2,765.72 -6.09 5,745.55 Rs. (In Crore) Dec '09 % 187.94 0.08 5,828.20 6,016.22 550.00 16.92 566.92 349.25 6,932.39 6,826.27 2,667.98 4,158.29 2,156.21 6,314.50 1,475.64 778.98 203.70 746.38 10.99 516.11 2,256.16 1,963.91 1,150.00 3,113.91 -857.75 6,932.39 Dec '10 % 187.95 0.00 6,281.54 6,469.49 509.93 13.89 523.82 361.53 7,354.84 8,076.95 2,994.51 5,082.44 1,562.80 6,645.24 1,702.67 914.98 178.28 1,080.03 56.12 523.94 2,753.35 2,093.96 1,652.46 3,746.42 -993.07 7,354.84

Share Capital Share Application money, pending allotment Reserves and Surplus Shareholders' Fund Secured Loans Unsecured Loans Loan Funds Deferred Tax Liabilities (Net) Total Funds Gross Block Less: Accumulated Depreciation and Amortization Net Block Capital Work-in-Progress (including Capital Advances) Fixed Assets Investments Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances Current Assets Current Liabilities Provisions Less: Current Liabilities and Provisions Net Current Assets Total Assets (Net)

85.77

86.78

87.96

8.39 5.84 100.00

8.18 5.04 100.00

7.12 4.92 100.00

88.29 11.82

91.09 21.29

90.35 23.15

-0.11 100.00

-12.37 100.00

-13.50 100.00

85

P&L A/C of ACC Ltd Rs. (In Crore) Dec '08 Dec '09 Dec '10 7,571.58 8,267.62 8,074.26 8,234.02 8,724.24 8,563.71 951.15 697.04 846.38 7,282.87 8,027.20 7,717.33 288.71 240.42 356.93 5,883.84 5,973.23 6,612.81 5,549.70 5,546.84 6,163.35 294.18 342.09 392.68 39.96 84.3 56.78 48.86 0 0 1,736.60 2,294.39 1,461.45 -523.81 -687.66 -341.44 -510.47 -673.3 -411.16 0 0 82 -4.34 -13.46 -12.28 -9 -0.9 0 1,212.79 1,606.73 1,120.01 2,064.89 2,477.91 3,203.85 3,277.68 4,084.64 4,323.86 799.77 880.79 942.45 187.65 187.7 187.75 187.68 244.06 384.88 63.79 73.38 95.1 0.02 0 -0.93 350 350 250 10 25 25 0.63 0.65 0.65 2,477.91 3,203.85 3,381.41 64.63 85.6 59.66 64.53 85.42 59.52

Income Sale of Products and Services (Gross) Less - Excise Duty Sale of Products and Services (Net) Other Income Expenditure Manufacturing and other expenses Depreciation and Amortisation Interest expenses Exceptional Items Profit before Tax Provision for Tax: Current Tax Tax adjustment of an earlier year Deferred Tax Charge Fringe Benefit Tax Profit after Tax Balance brought forward from Previous Year Profit available for appropriation Appropriations: Interim Dividend Proposed Dividend Dividend Distribution Tax Previous Year Dividend Distribution Tax General Reserve Debenture Redemption Reserve Amortisation Reserve Surplus carried to Balance Sheet Earnings per Share (Basic) Diluted

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

UltraTech Cements Ltd.

Year 2010-2011 2010-2011 2010 2010 2010 2009-2010 2009-2010 2009-2010 2009 2009

Award Subh Karan Sarawagi Environment Award Business World FICCI-SEDF CSR Award Greentech Environment Excellence Gold Award IMC Ramkrishna Bajaj National Quality Award Asian CSR Award National Awards for Prevention of Pollution Rajiv Gandhi Environment Award for Clean Technology State Level Environment Award (Plant) 9th Greentech Safety Award 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 without VRM 2009 without VRM 2009 2008-2009 2008-2009 Bhamashah Award from Commercial Tax Department, Ujjain State Level Environment Award (Mines) National Awards for Electrical Energy Performance 90 12th F.L. Smith Award for Lowest Electrical Energy Consumption in Cement 12th F.L. Smith Award for Lowest Electrical Energy Consumption in Clinker

2008-2009 2008-2009 2008 2008 2008 2008

National Awards for Energy Performance in Manufacture of Blended Cement FIMI CSR Social Awareness Award 8th TERI Corporate Award for CSR 8th Greentech Safety Award Bhamashah Award from Commercial Tax Department, Ujjain 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 2008 2007-2008 2007-2008 2007 2007 2006 2005-2006 2005 Golden Peacock National Quality Award ICWAI National Award for Excellence in Cost Management National Awards for Electrical Energy Performance National Awards for Energy Performance in Manufacture of Blended Cement 7th Greentech Safety Award Chairman's WCM Silver Award 6th Greentech Safety Award National Awards for Energy Efficiency 5th Greentech Safety Award

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 2003 2002 2001-2002 7th F.L. Smith Award for Energy Consumption M.P. State Level Environment Award Manufacturing Excellence & Competitive Advantage Award 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 2001-2002 2001 2001 2000-2001 2000 2000 1999-2000 1999-2000 1999-2000 National Awards for Quality Excellence Indo-German Greentech Industrial Safety Award British Safety Council Award Award for Excellence in Consistent TPM Commitment Indo-German Greentech Environment Excellence Award British Safety Council Award National Energy Conservation Award Fuller Energy Award Bharat Shell Excellence Award Energy Efficiency Award (Second Best in Electrical Energy Performance) 92

1999-2000 1999 1998-1999 1998-1999

Energy Efficiency Award (Second Best in Thermal Energy Performance) British Safety Council Award Energy Efficiency Award (Second Best in Thermal Energy Performance) 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 1998 1998 1998 1997 1997 1997 1997 1996 1996 Cement 1995 Cement 1995 1994-1996 TPM Excellence Award from Japan Institute of Plant Maintenance Safety Awards from National Safety Council - MP Chapter British Safety Council Award for Vikram, New Vikram and Vikram Super AV Birla Award for Outstanding Achievement in Community Development Golden Peacock National Training Award British Council Safety Award IMC Ramkrishna Bajaj National Quality Award National Safety Award from Government of India IMC Ramkrishna Bajaj National Quality Award British Safety Council Award Rajiv Gandhi National Quality Award AV Birla Award for Outstanding Achievement British Safety Council Award for Vikram, New Vikram and Vikram Super

93

1994-1995 1992-1993 1988-1989

Productivity Awards (Best performance in productivity) Productivity Awards (Best performance in productivity) 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 '10 187.88 187.94 187.95 0.00 0.08 0.00 4,739.85 5,828.20 6,281.54 4,927.73 6,016.22 6,469.49 450.00 550.00 509.93 32.03 16.92 13.89 482.03 566.92 523.82 335.79 349.25 361.53 5,745.55 6,932.39 7,354.84 5,835.67 2,365.97 3,469.70 1,602.86 5,072.56 679.08 793.27 310.17 984.24 20.67 651.28 2,759.63 1,801.79 963.93 2,765.72 -6.09 5,745.55 6,826.27 2,667.98 4,158.29 2,156.21 6,314.50 1,475.64 778.98 203.70 746.38 10.99 516.11 2,256.16 1,963.91 1,150.00 3,113.91 -857.75 6,932.39 8,076.95 2,994.51 5,082.44 1,562.80 6,645.24 1,702.67 914.98 178.28 1,080.03 56.12 523.94 2,753.35 2,093.96 1,652.46 3,746.42 -993.07 7,354.84

Share Capital Share Application money, pending allotment Reserves and Surplus Shareholders' Fund Secured Loans Unsecured Loans Loan Funds Deferred Tax Liabilities (Net) Total Funds Gross Block Less: Accumulated Depreciation and Amortisation Net Block Capital Work-in-Progress (including Capital Advances) Fixed Assets Investments Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances Current Assets Current Liabilities Provisions Less: Current Liabilities and Provisions Net Current Assets Total Assets (Net)

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 Reserves and Surplus 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 Deferred Tax Liabilities (Net) 722.93 830.73 1,730.05 Total Liabilities 6,466.66 7,043.90 16,540.69 Gross Block Less: Depreciation Net Block Capital Work-in-Progress Fixed Assets Investments Inventories Sundry Debtors Cash and Bank Balances Loans and Advances Assets held for Disposal Current Assets, Loans and Advances Current Liabilities Provisions Less: Current Liabilities and Provisions Net Current Assets Total Assets 7,401.02 2,765.33 4,635.69 677.28 5,312.97 1,034.80 691.97 193.94 104.49 381.56 0.00 1,371.96 1,120.92 132.15 1,253.07 118.89 6,466.66 8,078.14 3,136.46 4,941.68 259.37 5,201.05 1,669.55 821.70 215.83 83.73 351.13 0.00 1,472.39 1,138.08 161.01 1,299.09 173.30 7,043.90 17,942.27 6,542.02 11,400.25 1,105.32 12,505.57 3,730.32 1,956.52 602.29 144.79 1,053.88 1.22 3,758.70 2,880.41 573.49 3,453.90 304.80 16,540.69

99

P&L A/C of UltraTech Ltd March '09 6577.68 7,160.42 777.34 6383.08 45.15 60.69 88.76 5216.22 684.96 2,420.17 19.5 217.67 1,433.79 125.51 323 -8.38 1361.46 197.54 0 180.58 6.32 977.02 1,598.12 2575.14 2575.14 62.24 10.58 -36.08 100 2,438.40 78.48 78.48 Rs. (In Crore) March March '10 '11 7169.43 13558.42 7,729.13 14,858.60 679.45 1,648.69 7049.68 13209.91 56.21 122.34 65.81 164.33 -2.27 61.84 5581.27 11772.23 960.61 1,805.33 2,148.87 4,547.98 63.74 122.18 252.94 666.5 1,653.53 3,597.91 117.52 277.11 388.08 765.73 -4.02 -10.51 1588.16 1786.19 387.25 -0.13 107.8 0 1093.24 2,438.40 3531.64 3531.64 74.69 12.41 -34.83 750 2,729.37 87.82 87.79 510.72 -125.52 -3.24 0 1404.23 2,729.37 4133.6 4133.6 164.42 26.67 58.92 1,100.00 2,783.59 62.74 62.72

Income Gross Sales Less: Excise Duty Net Sales Interest and Dividend Income Other Income Increase / (Decrease) in Stocks Expenditure Raw Materials Consumed Manufacturing Expenses Purchase of Finished Products Payments to and Provisions for Employees Selling, Distribution, Administration and Other Expenses Interest and Finance Charges Depreciation and Obsolescence Less: Captive Consumption of Cement Profit Before Tax Expenses Income Tax Expenses Provision for Current Tax Excess tax provision reversal related to earlier years Deferred Tax (Credit) / Charge Provision for Fringe Benefit Tax Profit After Tax Balance brought forward from Previous Year Profit Available for Appropriation Appropriations Proposed Dividend Corporate Dividend Tax Debenture Redemption Reserve General Reserve Balance carried to Balance Sheet Basic Earnings Per Equity Share Diluted Earnings Per Equity Share

100

P&L A/C of ACC Ltd Rs. (In Crore) Dec '08 Dec '09 Dec '10 7,571.58 8,267.62 8,074.26 8,234.02 8,724.24 8,563.71 951.15 697.04 846.38 7,282.87 8,027.20 7,717.33 288.71 240.42 356.93 5,883.84 5,973.23 6,612.81 5,549.70 5,546.84 6,163.35 294.18 342.09 392.68 39.96 84.3 56.78 48.86 0 0 1,736.60 2,294.39 1,461.45 -523.81 -687.66 -341.44 -510.47 -673.3 -411.16 0 0 82 -4.34 -13.46 -12.28 -9 -0.9 0 1,212.79 1,606.73 1,120.01 2,064.89 2,477.91 3,203.85 3,277.68 4,084.64 4,323.86 799.77 880.79 942.45 187.65 187.7 187.75 187.68 244.06 384.88 63.79 73.38 95.1 0.02 0 -0.93 350 350 250 10 25 25 0.63 0.65 0.65 2,477.91 3,203.85 3,381.41 64.63 85.6 59.66 64.53 85.42 59.52

Income Sale of Products and Services (Gross) Less - Excise Duty Sale of Products and Services (Net) Other Income Expenditure Manufacturing and other expenses Depreciation and Amortisation Interest expenses Exceptional Items Profit before Tax Provision for Tax: Current Tax Tax adjustment of an earlier year Deferred Tax Charge Fringe Benefit Tax Profit after Tax Balance brought forward from Previous Year Profit available for appropriation Appropriations: Interim Dividend Proposed Dividend Dividend Distribution Tax Previous Year Dividend Distribution Tax General Reserve Debenture Redemption Reserve Amortisation Reserve Surplus carried to Balance Sheet Earnings per Share (Basic) Diluted

101