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Analysis of business, financial statement & comparative study of Ambuja

cement & Binani cement

A Project Submitted to
University of Mumbai in partial completion of the degree of
Master in Commerce
Under the Faculty of Commerce

By
Jyotsna Devadiga

Under the Guidance of


Prof. Virendra Singh

Bunts Sangha’s
S.M. Shetty College of Science, Commerce and Management Studies
Opposite JalvayuVihar, Powai, Mumbai-400076.
November-2018

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Certificate

This is to certify that Jyotsna Devadiga has worked and duly completed her Project work for
the degree of Masters in Commerce under the faculty of Commerce in the subject of
Advanced accounting, Corporate accounting and Financial management and her project
is entitled “Analysis of business, financial statement & comparative study of Ambuja
cement & Binani cement.” under my supervision. I further certify that the entire work has
been done by the learner under my guidance and that no part of it has been submitted
previously for any Degree or Diploma of any University.
It is his own work and facts reported by his personal findings and investigations.

_________________ _________________ ________________


Prof. Virendra Singh External Examiner Dr. Sridhara Shetty
(Project Guide) (Principal)

Date of Submission:

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Declaration by learner
I the undersigned Jyotsna Devadiga hereby, declare that the work embodied in this project
work titled “Analysis of business, financial statement & comparative study of Ambuja
cement & Binani cement.” forms my own contribution to the research work carried out under
the guidance of Prof. Virendra Singh and is a result of my own research work and has not
been previously submitted to any other university for any other Degree/Diploma to this or any
other University.

Wherever reference has been made to previous works of others, it has been
clearly indicated as such and included in the bibliography.

I, hereby further declare that all the information of this document has been obtained
and presented in accordance with academic rules and ethical conduct.

Jyotsna Devadiga
Name and Signature of Learner
Certified by,

Virendra Singh
Project Guide

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Acknowledgment

This project has been a great learning experience. However, it would not have been
possible without the kind support and help of many individuals and organizations.
I would like to extend my sincere thanks to all of them.

I would like to thank the University of Mumbai for giving me the opportunity to
work on this project.

I would also like to thank my Principal, Dr. Sridhara Shetty and Vice Principal
Dr.LijiSantosh for their valuable guidance and suggestions.

I am highly indebted to my Coordinator Prof. Virendra Singh for guidance and


constant supervision as well as extending necessary support & information in
completion of this project.

My sincere thanks to everyone who was directly or indirectly involved in


completion of this project.

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INDEX

PAGE
PARTICULARS SUB-CONTENTS NOS.

Chapter – 1  ACC LTD & BIRLA CORP


Introduction

Chapter 2-
Research & Methodology  Scope of study
 Objectives
 Limitations
 Data Collection
Chapter 3-
Literature Review  Study Review by different
authors.

Chapter 4- Data Analysis,


Interpretation & Presentation  Comparing the equity share data,
income statements, Balance sheet,
Cash flow statements of both the
companies.
 SWOT analysis.
Chapter 5-
Conclusion, Findings &  Importance
Suggestions  Purpose

Chapter 6-
Bibliography  Websites

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CHAPTER 1
INTRODUCTION
India is the second largest producer of cement in the world. No wonder, India's cement
industry is a vital part of its economy, providing employment to more than a million people,
directly or indirectly. Ever since it was deregulated in 1982, the Indian cement industry has
attracted huge investments, both from Indian as well as foreign investors.
India has a lot of potential for development in the infrastructure and construction sector
and the cement sector is expected to largely benefit from it. Some of the recent major
initiatives such as development of 98 smart cities are expected to provide a major boost to the
sector.
Expecting such developments in the country and aided by suitable government foreign
policies, several foreign players such as Lafarge-Holcim, Heidelberg Cement, and Vicat have
invested in the country in the recent past. A significant factor which aids the growth of this
sector is the ready availability of the raw materials for making cement, such as limestone and
coal.

 MARKET SIZE -

The housing and real estate sector is the biggest demand driver of cement, accounting
for about 65 per cent of the total consumption in India. The other major consumers of cement
include public infrastructure at 20 per cent and industrial development at 15 per cent.
India’s total cement production capacity is nearly 455 million tonnes, as of 2017-18.
Cement consumption is expected to grow by 4.5 per cent in FY19 supported by pick-up in the
housing segment and higher infrastructure spending. The industry is currently producing 280
MT for meetings its domestic demand and 5 MT for exports requirement.
The Indian cement industry is dominated by a few companies. The top 20 cement
companies account for almost 70 per cent of the total cement production of the country. A
total of 210 large cement plants account for a cumulative installed capacity of over 350
million tonnes, with 350 small plants accounting for the rest. Of these 210 large cement plants,
77 are located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu.

 GOVERNMENT INITIATIVES -

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In order to help the private sector companies thrive in the industry, the government has
been approving their investment schemes. Some such initiatives by the government in the
recent past are as follows:
In Budget 2018-19, Government of India announced setting up of an Affordable Housing
Fund of Rs 25,000 crore (US$ 3.86 billion) under the National Housing Bank (NHB) which
will be utilised for easing credit to homebuyers. The move is expected to boost the demand of
cement from the housing segment.

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1. ACC Limited is India’s one of the largest manufacturers of cement and ready mixed
concrete. The company has 17 modern cement factories and more than 50 ready mixed
concrete plants. ACC has a unique track record of innovative research, product
development, and specialized consultancy services. Basically, ACC is the first cement
company in the country to start Bulk Cement, especially for large consumers.

Establishment: 1936

Headquarter: Mumbai, Maharashtra

ACC has completed 80 years of its incorporation. Its remarkable heritage and unremitting
tradition of good governance makes ACC stand out as a gem of Indian industry. Maintaining
this singular distinction is the challenge that guides us in steering the organization’s affairs.
ACC LTD is mindful of what the nation and our stakeholders expect from us and we work to
achieve meaningful stakeholder engagement. The government has ambitious plans to advance
the national economy ahead of other nations. The commissioning of the Jamul integrated
cement project makes us ready to participate in this growth, with quality cement and concrete
needed to build new infrastructure, mass housing, industrial and commercial projects. With
customers placed in the forefront of their vision, customer excellence is the key driver of their
business. An energetic sales force and efficient channel partners work to meet a charter that
defines service as a key differentiator.

The community in which they operate represents an important group of stakeholders and
it is a privilege to be of service to them. Last year we touched more than 4 lakh lives in 156
villages. There is more to be done in this respect and have plans. It is a matter of pride that
ACC has led the industry in producing environment-friendly blended cements that utilize
waste by-products from steel plants and thermal power stations. It is befitting that the
company also retains the distinction of having among the lowest carbon footprints as
compared to its global peers. The opening of twenty five Green Building Centres in small
towns and rural markets, amid plans to launch many more, makes for a unique initiative that
embodies the principles of sustainable construction with its compelling mix of societal,
economic and environmental benefits. Maintaining a well-concerted reduction in water
consumption and with two major plants already self-reliant in water, the company is moving
ahead towards achieving a zero waste water discharge status.

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Embellished with these and other measures, the company’s sustainable development
agenda is well on track, in pursuit of which we have been adjudged as one of “India’s Most
Sustainable” companies. ACC is fortunate to have a dedicated and dynamic workforce that is
ready to make all of this happen. Following the global merger of Holcim and Lafarge, they are
now part of LafargeHolcim – the world’s largest building materials supplier.

2. Birla Corporation Limited is an Indian-based flagship company of the M P Birla


group of companies. The Cement Division of Birla Corporation Limited has seven
plants. All the cement plants are ISO 9001:2000 Certificate, covering the entire range
of production and marketing. Some of the most popular cement brands are Samrat,
Khajuraho, Chetak, and Birla Premium cement.

Establishment: 1919

Headquarter: Kolkata, West Bengal

Incorporated as Birla Jute Manufacturing Company Limited in the year 1919. The
company has products ranging from cement to jute goods, PVC floor covering, as well as
auto trims (jute felt-based car interiors manufactured with German technology). The
Cement Division of Birla Corporation Limited has seven plants, having an installed
capacity of 5.8 million tons. These plants manufacture varieties of cement, including
Ordinary Portland Cement (OPC), 43 & 53 grades, fly ash-based Portland Pozzolana
Cement (PPC), Portland Slag Cement (PSC) and low- alkali Portland cement. Recently, the
Company has started producing Sulphate Resistant Cement (SRC) and it has been well
accepted in the market. The Jute Division of the company manufacturing more than 120
tonnes of a variety of jute products in Birla Jute Mill. The product range comprises of
almost every major application of jute - the most versatile, eco-friendly, biodegradable
fibre available, Jute- durable, natural and anti-static.
The Auto Trim Division of the company has been outfitting major Indian cars with
natural fibre-based interiors. Birla Corporation Limited’s subsidiaries consist of Assam Jute

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Supply Company Limited, Talavadi Cements Limited and Lok Cements Limited. The
Oxygen & Acetylene Gas Unit of the company was commissioned in August of the year
1964. The Company entered into an agreement with Indian Oxygen, Calcutta, for exclusive
sale of its products on principal-to-principal basis in the same year. During the year 1969,
BCL had entered into an agreement with Hindustan Steel Ltd for the purchase of blast
furnace slag from the Durgapur Steel Plant to set up a slag-cement plant at Durgapur. Bally
Jute Co. Limited’s two units, such as Bally-1 and Bally-2 were amalgamated with the
Company with effect from 1st April of the year 1982.
With effect from 7th February of the year 1983, the name of the company was
changed from the Birla Jute Manufacturing Company Limited to Birla Jute & Industries
Limited. The captive thermal plant of 4.5 MW at Chittorgarh was commissioned in
December of the year 1985. As a part of modernization programme, modern jute spreaders
were introduced in both Birla and Bally Mills during the period of 1988. An agreement was
signed in 18th February of the year 1989 with the Soviet Collaborators, viz. Odessa
Technical Fabrics Mill and V/o Novo export to transfer all assets and liabilities of Bally
Jute Mills, with effect from 1st April or other date as agreed upon, to a new Joint Venture
Company, Birla Odessa Industries Limited in consideration of offer of equity shares of
paid-up equity share capital of the Joint Venture Company.
A collaboration agreement was signed with EMPRWERKE of Germany in the same
year 1989 for the manufacture of Automobile interior Door panels based on jute fibre.
During the year 1991, Birla Linoleum’s new PVC floor covering plant was fully installed.
The Company undertook to manufacture Cetaria ferro alloys in one of the furnaces of Birla
Carbide. India Linoleums Ltd., a subsidiary of the Company was amalgamated with the
company effective 1st April of the year 1991. The closure of the Company’s Bally Jute
Mills from 26th August of the year 1992, had also contributed to the low turnover and
profits. The Company entered into a long-term agreement with a German linoleum
manufacture for technical help in upgrading the products.
During the year 1996, a joint venture company Birla Redland Ready mix Ltd. was
incorporated with Redland PLC, UK to set up facilities for manufacture of ready mix
cement concrete in India. Effective from 31st March of the year 1997, the name was again
changed from Birla Jute & Industries Limited to Birla Corp Limited. In 1998, the company
had sets up a fly ash-based cement-grinding unit at Rae Bareilly in Uttar Pradesh. The name
was again changed from Birla Corp Limited to the present name Birla Corporation Limited
in 27th October 1998.
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The company’s unit, Birla Synthetics consider as Suspension of Work from 2nd
November 1998. During the year 2001-02, the company had modernized/upgraded the plant
at Cittor Cement Works at Chittorgarh. During the year 2002-03, the company had
developed new product lines, Desktop and Bulletin Board. In 2003-04, the Satna unit of the
company was awarded the first prize for Noise, Vibration & Aesthetic Beauty and also the
first prize for maximum percentage reduction in electrical energy consumption per MT of
clinker produced. During April of the year 2004 the company has decided to close its Birla
Synthetics at Birlapur.

The company has expanded its installed capacity of Auto Trim Parts by 36000 Pcs
during the 2004-05 and with this expansion the total installed capacity of Auto Trim Parts
has increased to 603000 Pcs. The company’s unit, Birla Carbide & Gases was permanently
closed from 31st January of the year 2005. The company’s capacity enhancement project at
Durgapur viz. Durga Hitech Cement, which was commenced its commercial production
during the year 2005-06. BCL received the Amity Corporate Excellence Award during the
same year 2006-07. Credit Analysis and Research Limited (CARE) assigned CARE AA
rating to the company for long term borrowing programme in the year 2006-07.

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CHAPTER 2
RESEARCH AND METHODOLOGY

1. SCOPE OF STUDY:

The study deals in brief to evaluate and analyze various aspects of company’s i.e ACC
CEMENT LIMITED and BIRLA CORPORATION ; financial position, liquidity position and
long term solvency position, so as to present a clear picture of performance .A study like this
would help the organization to make decisions based on the current performance.

2. OBJECTIVES :

 To understand the business of both the companies.

 To compare profit and loss of both the companies.

 To compare balance sheet of both the companies.

 To find out which company is opting optimum capital structure as per nature of its
business.

 To analyze the financial and non-financial activities of selected companies.

 To find out the short term solvency position of the company i.e. liquidty, current ratio,
working capital, etc. This will help to find out the ability of firm to meet its current
liabilities, and perform day to day operation.

 To find out the benefits provided by the company to its shareholders, to its consumers,
Earning per share, Dividend declared, corporate social responsibilities, etc.

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3. LIMITATIONS OF THE STUDY :

The limitations are related with the constraint of tool or method used for analysis. As this
project is totally based on secondary data. So the main limitations which can be faced are :

 Study is only based on annual report of the company, which is not sufficient to
compare performance and efficiency of the company.

 Information available in different sites about the companies is also included.

 It is assumed that the information given is true and fair.

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4. DATA COLLECTION

The company collects and evaluates market research. Larger companies like ACC LTD and
BIRLA CORP have their own research and development department that find both secondary
data and conduct primary research. They post it in their respective site. Thus, this information
is totally based on secondary data.

 ACC LIMITED (FORMERLY THE ASSOCIATED CEMENT COMPANIES) :-

ACC Limited is one of India's leading manufacturers of cement and ready mix concrete
with 17 cement factories, 62+ ready mix concrete plants, over 7400 employees, a vast
distribution network of over 10,000 dealers and a countrywide spread of sales offices.

For over eight decades, ACC has earned the country's trust and goodwill through its
valued product portfolio, ethical business practices and governance, focus on sustainable
development, and its contributions to society.

Synonymous with cement and enjoying high equity in the Indian market, ACC has
consistently set benchmarks in cement and concrete technology since its inception in 1936.

From the Bhakra Nangal Dam in 1960 to the Mumbai-Pune Expressway, ACC cement
is at the foundation of iconic landmarks across the country.

Anticipating customers’ needs early and being able to serve them with innovative and
differentiated products and solutions is a key aspect of its product strategy.

ACC’s brand architecture comprises the Gold range of premium products and the
Silver range of base products assuring superior quality for general construction as well as for
specialized applications and environments.

The ready mix concrete product range provides one-stop solutions from basic
requirements to high grades of concrete to build the country’s tallest structures.

Sustainability is an integral part of ACC’s business strategy with its Sustainable


Development 2030 plan focusing on fur broad themes: Climate, Circular Economy, Water &
Nature and People & Communities.

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Its corporate social responsibility efforts benefit local communities across the country
by ensuring economic and social progress. ACC’s earliest initiatives in community
development date back to the 1940's – long before the term 'corporate social responsibility'
was coined.

ACC was among the first Indian companies to include commitment to environmental
protection as one of its corporate objectives.

Since its inception, the company has continuously explored ways to make its business
more planet-friendly and this concern is integrated into all activities of the value chain, from
mining to sales to promoting the use of alternative fuels and resources, resulting in one of the
lowest carbon footprints in its class.

 A DETAILED COMPANY’S HISTORY–ACC LTD

1936 -1980

-The Company was incorporated at Mumbai. The Company manufactures cement,


refractories and cement plant and other heavy machinery including structural and mild
fabrications. The Company undertook revamping of the Kymore unit for production of
high value refractory intermediates. ACC is India's oldest and largest cement company,
belonging to the Tata group.

- 6, 03,200 No. of equity shares issued for consideration other than cash.

- In January, the Company in association with Vickers Ltd., and Babcock & Wilcox Ltd.,
formed a new company called ACC-Vickers-Babcock & Wilcox Ltd., formed a new
company called ACC-Vickers-Babcock Ltd.

- On 12th March, two agreements were signed between the Government of West Pakistan
and the Company for the sale of all the immovable properties of the Company at Wah
and Rohri in Pakistan to the Government of West Pakistan to the Company in seven
annual installments along with interest due. The Government of West Pakistan caused
the Mumbai Branch of the First National City Bank to furnish an irrevocable and without
recourse guarantee to the Company.

- 4,74,731 Right Equity shares issued at par in the proportion 1:5.

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- The Company owned two collieries, one at Nowrazabad and the other at Kotma, both in
M.P. Both the Collieries were taken over by Government with effect from 1st May, under
the provisions of the coal Mines (Nationalization) Act, 1973.

-With the acquisition of 2,86,000 shares during the year, AVB became a subsidiary of the
Company.

- The Company received intimation that the Commissioner of Payments had authorized a
provisional payment of Rs 61.01 lakhs out of which a sum of Rs 6 lakhs was kept aside
towards claims of the third parties which were pending in appeals.

- 4,74,731 Bonus shares issued in proportion 1:6.

- The Company entered the field of chemical engineering as process consultant and
secured orders as well as turnkey contracts. The provisional payment of Rs 60.01 lakhs
was received.

1981 -2010

- The name of this subsidiary was changed to ACC-Babcock Ltd., consequent upon the
disinvestment of the shareholding of Vickers Ltd., U.K., in the Company.

- The Company also received a communication in April, from the State Cement
Corporation of Pakistan Ltd. (SCCPL), informing the Company that they do not accept
the judgment of the Mumbai High Court as final and binding and as alleged successors-
in-title they intend to proceed for arbitration in the matter of settlement of Company’s
sale price for its undertaking in Pakistan.

-A Collaboration agreement was finalized with Licensintorg of Moscow, U.S.S.R. for


acquisition of `low temperature' technology for savings in fuel consumption, increase in
production capacity and improvement in the whiteness index in the manufacture of white
cement.

- 6, 64,623 Bonus Equity shares issued in prop. 1:5.

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- 80,882 No. of Equity shares issued to financial institution in conversion of loans/debs.
and another 16.175 shares allotted to them as bonus shares in respect of those shares.

- During October, the Company issued 20,42,399

- 12.5% debentures of Rs 125 each to shareholders on rights basis in the proportion 1


debenture: 2 equity shares. Of these, 14, 94,931 debentures were taken up. The
unsubscribed portion of 5, 47,468 debentures were not allotted and the issue was treated
as closed.

- 12.5% debentures of Rs 125 each were offered to the employees (including Indian
working directors) of the Company on an equitable basis. Only 15,776 debentures were
taken up. The unsubscribed portion of 86,344 debentures was allowed to lapse.

- The entire face value of each debenture was compulsorily and automatically converted
into 1 equity shares of Rs 100 each at a premium of Rs 25 per share as at 1st June. 15,
10,707 No. of equity shares were issued on 1st June, by virtue of this conversion.

- The Company undertook to set up a project for the use of 100% lignite at Madukkarai
Works in technical assistance with M/s. Rheinbraun Engineering of W. Germany.

- The Company also assisted the plant suppliers in commissioning and other activities
preceding the takeover of the management operation and maintenance of the one million
TPA cement plant at A1-Qaim.

- A Memorandum of Understanding was signed with M/s. Nihon Cement Company,


Japan for offering joint services in process engineering and productivity services, erection
and construction, geological, environment and mining etc.

- Production of grey cement at 74 lakh tonnes was almost same as in the previous year,
that of refractory products stood lowest at 31,742 tonnes due to a 4 months strike at the
Katni plant.

- The coal washing at the Kymore cement works was mechanically completed and was
commissioned in 1991-92. - The products developed in-house were dark color portland
slag cement, CASAL - non Portland cement for concrete repairs, `Shrinkkump-40', a new
grouting formulation with rapid hardening properties CALAL-65 a new calcium

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aluminate cement for refractory application and Low Cement Cashable - a new generation
refractory material.

- The Company entered into an agreement with Refractechnik, Germany for manufacture
of high quality bricks for the cement industry. Also an additional turbine of 25 MW
capacity was being installed at the existing 25 MW captive power plant at Wadi works.

- The Company undertook to set up a synthetic ferric oxide plant of 10,000 tonnes per
annum capacity at Falta in West Bengal at an estimated cost of Rs 24 cores. - The
Company entered into a joint venture agreement with Nihon Cement Co. Ltd., Japan,
pursuant to which a new company viz., Acc-Nihon Castings Ltd. (ANCL) was
incorporated for manufacture of high quality alloy steel castings.

- An integrated pilot plant was set up for a new generation of refractories.

- 22, 38,202 Bonus Equity shares issued in November in prop 2:5 .

- The Company undertook to install additional power plant of 25 MW capacity at Wadi


works. - Advanced research work was carried on in the field of chemically bonded
ceramics in collaboration with materials research laboratory of the Pennsylvania State
University, USA.

- The Company entered into a joint venture agreement with Aluminum Company of
America (ALCOA) USA. The joint venture company Alcoa-Acc Industrial Chemicals
Ltd., is to set up a 10,000 TPA capacity plant at falta in West Bengal.

-A MOU was signed in the Fars Khuzestan Cement Co., Iran for a joint venture company
to be set up in Iran for providing engineering and consultancy services in governmental
and specifically in the areas of process diagnostics productivity optimization, plant up
gradation etc.

- The Company signed a MOU for management, operation and maintenance of the
existing 1.2 million TPA cement plant at Yanbu for a period of 3 years commencing
from March 1996, with yanbu cement company.

The Company proposed to undertake major modernization programme of its old unit at
Lakheri & Kymore by adopting dry process technology at a total estimated cost of Rs 123
corers.

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- The new 1.2 MTPA clinkering unit at Kymore and the cement grinding, packing and
loading plant at Kymore was modernized and made operational.

- The surplus clinker from Kymore would be supplied to a new grinding unit to be set
up in Uttar Pradesh and the balance to Sindri Works, where the grinding, packing and
loading capacity was under expansion from 0.3 MTPA to 0.6 MTPA.

- Operation of the Cement plant unit at Bandra-Kurla Complex was expanded. A second
unit was commissioned at Kalamboli to supply ready mixed concrete in the Navi Mumbai
area. The third RMC plant was commissioned at Bangalore to facilitate the supply of
quality concrete to the expanding construction activities in the city.

- The Company signed a joint venture agreement with Bridgestone Corporation, Japan,
for setting up a plant near Indore in Madhya Pradesh for manufacture of internationally
renowned Bridgestone brand of all steel radial tyres for motor vehicles.

- Approvals were received for issue of equity shares and/or equity related instruments for
a Euro issue of up to US $ 100 million. Approval was received for issue of up to 5,
00,000 warrants to certain Tata Companies.

- Cement Marketing Co. of India Ltd., Associated Tyre Machinery Co. Ltd. and ACC
Nihon Castings, Ltd. are subsidiaries of the Company.
7, 29,565 Rights shares issued (Prop. 1:10; Prem. Rs 39.00).

- The company was awarded another contract for management operation and maintenance
of a new two MTPA cement plant at Saudi Arabia.

- The Company proposed to set up a new cement plant at Wadi with an initial capacity of
2 MTPA.

- The Company's new unit at Nagpur for manufacture of monolithic refractories was
partly commissioned. New products under licence from M/s. Intoeast of Germany were
produced for the first time at Nagpur.

- The Company also offered consultancy services in respect to design and drawings for
the construction of cement plants, refractory linings and technical know-how in
prospecting work.

- 51, 37,971 bonus equity shares issued in prop. 3:5

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- A memorandum of understanding (MoU) was signed to facilitate the new venture by
KPCL managing director K Jairaj and his ACC counterpart T M M Nambiar in the
presence of Karnataka Chief Minister J H Patel.

- The Associated Cement Companies (ACC) has set up a modern pre-grinding unit based
on the vertical pre-grinder technology at its plant in Chanda, Maharashtra. The pre-
grinder, set up for the first time in the country, has been developed by ACC Machinery
Company Ltd (AMCL), a 100-per cent subsidiary company.

- ACC's Wadi plant in Karnataka is installing a single kiln with a capacity of 10,000
tonnes per day.

- The Associated Cement Companies (ACC) will enter the syndicated debt market
shortly with a seven-year floating rate paper of Rs.100-crore with the coupon pegged at
three to 3.5 percentage points above the bank rate of nine per cent. The paper will have a
put-and-call option after five years.

- The modernization project at Sindri was commissioned during April and the new
Portland pozzolana cement grinding unit of 0.6 MTPA capacities at Tikaria in U.P. was
under implementation.

- ST-BSES, the coal washing joint venture between BSES Ltd, Spectrum Technologies
and CLI Corporation of USA, has signed up with the cement major ACC Ltd to sell
washed coal.

- ACC and Ebara Corporation of Japan have signed an MoU for joint implementation of
environment-related projects in India.

- ACC Ltd has bagged the Ficci award for adopting innovative measures for pollution
control, waste management and conservation of mineral resources in mines and cement
plants in Himachal Pradesh. The award is for the Gagal cement unit, which has also
received the ISO 14000 certification from the Bureau of Indian Standards.

- ACC made a preferential offer of naked warrants/equity shares to the promoter group at
an exercise price of Rs. 110 per share.

- ACC made a rights offer of equity at a price of Rs. 55 per share, and subdivide the face
value of shares of Rs. 100 each to Rs. 10 each have stirred a hornet's nest.

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- In Jan. 1999, the company came out with the rights issue of equity shares of Rs 10 each
at a premium of Rs 45 per equity shares in ratio of 1:4 to raise funds for capital
expenditure on modernization/expansion of existing plants and creation of new capacity
at wadi. Also, in Nov. 1999, it commenced commercial production of captive power
plants with capacity of 25 MW each at Jamul and Kymore.

- ACC's objective is to increase its cement capacity by approximately three million


tonnes per annum over the next two years.

- Of the 14,31,022 scam-tainted shares, which constitute 10.4 per cent of the total equity,
6,76,731 shares are held in the name of notified parties - of which the Harshad Mehta
group's holding adds up to 6,23,345 shares. Benami shares, allegedly held by Harshad
Mehta, amount to 6, 50,356 shares, while unregistered shares amount to 1, 03,935 shares.

- The ACC has set up an internal committee to "review" investments in subsidiaries and
associate companies.

- Shares of cement major ACC Ltd shot up by Rs 100 to Rs 1,450 after the market was
abuzz with unconfirmed reports that French cement major Lafarge had appointed an
investment bank to negotiate a buyout of financial institutions' stake in the Tata group
cement company.

- The Rs 2,500-crore ACC plans to double capacity at its Wadi, Gulbarga plant from the
present two million tonnes to four million.

- ACC Ltd will offer ready-to-use value-added products in a year's time. The `Suraksha'
brand was launched a year ago in the Konkan region and has features which make it a
durable cement for the coastal belt.

- The ACC has taken up capital expenditure programme amounting to Rs 750 crore for
modernization-cum-expansion of the existing plants and the creation of new capacity
additions at Wadi or through acquisitions.

- ACC is making a rights offer to part-finance its expansion/modernisation programme at


its existing plants, and set up a new unit at Wadi.

ACC has completed the modernization and expansion of the Chanda and Madukkarai
cement plants for increasing their capacities to around 1 MTPA each. These plants started

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production from 1 September 2000 and 1 October 2000 respectively. The de-
bottlenecking at Chanda, Gagal and Madukarrai plants have added 1 MT to ACC's
installed capacity.

- During the quarter ended Mar. 2001, the company commissioned its new Wadi plant of
2.6 MTPA, which is the largest kiln in the country. With the commissioning of this plant,
ACC's installed capacity of cement is the highest in the industry at 15.3 million tonnes.

Also, the construction of a 15-MW thermal power plant at Chanda Cement Works is
progressing satisfactorily and will be completed as per schedule. ACC also plans to have
a similar power plant of 15 MW at Madukkarai.

ACC has decided to put on hold its plans to set up five new ready mix concrete (RMC)
plants. Instead, it has decided to consolidate the existing 13 RMC units and to go in for a
capacity expansion of these operational units. The company, along with the Tata, has
decided to exit from the ailing business at Floatglass India.

ACC holds around 13% stake in that company. Asahi Glass of Japan, a co-promoter and
the single largest stakeholder, has agreed to buy their stakes. The sale of the equity stake,
stake in preference capital as well as non-compete fee will fetch Rs 19.9 crore to ACC.

- The Company has suspended operations at one of its smaller cement works at
Mancherial, which has a capacity of about 330,000 tonnes. The suspension is due to non-
availability of lime-stone.

- ACC is likely to set up a 1-million tonne per annum cement plant in Bellary.

- The Company proposes to exit from its non-core businesses.

- ACC Ltd has informed that 18300 shares have been allotted to the permanent
employees of the company including employees retired during the FY 2001-02. The
company has received from applicants the issue price of Rs.108/- per share in full for
18300 shares allotted on December 31, 2001.

- The ACC .Mr. T.M M Nambiar has been re-appointed as Managing Director for a
further period from June 01, 2002 to November 30, 2002 on the existing terms and
conditions. 2. M L Narula, Whole time Director, is redesigned as Chief Operating Officer.
In addition to his current responsibilities of being in charge of the Cement Business, Mr.
Narula will be also directly supervise the Human Resources and Finance functions.

22
-He will continue to report to the Managing Director. 3. Mr. A K Jain, President-
Marketing has been inducted on the Board in the casual vacancy of Dr AK Chatterjee and
appointed Whole time Director for a period of three years with effect from January 25,
2002.

- Associated Cement Companies Ltd has informed that Mr P J Jagus has resigned from
the Board of Directors of the company wef January 25, 2002 after a long and fruitful
association of 55 years with ACC. The Board has at its meeting held on January 25, 2002
appointed Mr S M Palia as a Director in the Casual vacancy.

- In Feb. 2002, consequent upon the transfer of shares from Etex Group to the company,
Eternit Everest has become a subsidiary of the company w.e.f. 12.02.02. The company
now holds 76.01% of the total equity shares of Eternity Everest Ltd.

-Associated Cement Companies Ltd has informed that pursuant to the resolution passed
by circular dated June 10, 2002, by the Shareholders/Investors Grievance Committee,
12100 shares were allotted against exercise of Stock Options granted to employees under
the Employees Stock Option Plan 2000.Consequently the paid up share capital of the
Company has increased from 1,70,811,885 shares as on May 16, 2002 to 1,70,823,985
shares of Rs 10/- each as of date.

-Appoints Mr. M L Narula as managing director in place of Mr. T M M Nambiar -


Receives full consideration for sale of equity shares in International Ferrites.

-Wins PHDCCI Good Corporate Citizen Award for the year 2002.

-LIC holds 14.31% stake in the company 2003 -Govt. of Singapore cuts down its holding
in the company from 4.23% to 2.96%

-Sells 19.5% stake in Bridgestone ACC India to Bridgestone Corporation, Japan for Rs
50 crore.

-Increases stake in its subsidiary Eternit Everest India from 26 per cent to 76 per cent by
acquiring the shareholding of Belgium-based Etex group. The name of Eternit Everest
India rechristened Everest Industries Ltd.

-Bids for Idcol Cement of Industrial Development Corporation of Orissa (Idcol), where
the Government of Orissa hold 87% and remaining owned by UTI

23
-Special court decides not to auction ACC shares held by Harshad Mehta -Foreign
Institutional Investors (FII) increase holding in the company from 18% to 22% in two
months.

-ACC on December 22, 2003 has signed a share purchase agreement with Industrial
Development Corporation of Orissa Ltd to acquire its entire shareholding in IDCOL
Cement Ltd (ICL) amounting to 86.79% of ICL's equity share capital.

Earlier this month, the State's Cabinet Committee on Disinvestment had approved the
sale of IDCOL Cement Ltd to ACC as announced by the Department of Public
Enterprise, Government of Orissa.

-Associated Ceramics Ltd has informed that at the meeting of the BoD held on January
31, 2004, the Board approved voluntary delisting of shares from Calcutta Stock Exchange
Association Ltd and Hyderabad Stock Exchange Ltd.

-Launches $100m GDR, FCCBs -ties up with UTI MF to buy out their entire 13.3 per
cent shareholding in Bargarh Cement (formerly Idcol Cement) for a total consideration of
Rs 26.85 crore.

-Associated Cement Companies (ACC) has purchased 13.21 per cent stake in Bargarh
Cement Ltd from Unit Trust of India. ACC bought 3.5 crore shares of the nominal value
of Rs 10 each in the company, for a consideration of Rs 26.85 crore. With this, Bargarh
Cement becomes a 100 per cent subsidiary of ACC.

-Citigroup purchases 8.06 lakh GDRs of ACC - ACC Ltd appoints Naresh and Varshitha
as Addl Directors -Delist from Cochin Stock Exchange -Delist from Delhi Stock
Exchange with effect from October 13, 2004.

-ACC receives the CFBP Jamnalal Bajaj Uchit Vyavahar Puraskar Certificate of Merit
– 2004 from Council For Fair Business Practices.

- Holcim group of Switzerland enters strategic alliance with Ambuja Group by acquiring
a majority stake in Ambuja Cements India Ltd. (ACIL) which at the time held 13.8 % of
the total equity shares in ACC. Holcim simultaneously makes an open offer to ACC
shareholders, through Holdcem Cement Pvt. Limited and ACIL, to acquire a majority
shareholding in ACC. Pursuant to the open offer, ACILÂ’s shareholding in ACC
increases to 34.69 % of the Equity share capital of ACC.

24
- Commissioning of Modernisation and Expansion project at Chaibasa in Jharkhand,
replacing old wet process technology with a new 1.2 MTPA clinkering unit, together with
a captive power plant of 15 MW.

- Financial accounting year of the company changed to calendar year January-December


2006 -Subsidiary companies Damodhar Cement & Slag Limited, Bargarh Cement
Limited and Tarmac (India) Limited merged with ACC

- ACC announces new Workplace policy for HIV/AIDS .

- Change of name to ACC Limited with effect from September 1, 2006 from The
Associated Cement Companies Limited.

- ACC receives Good Corporate Citizen Award 2005-06 from Bombay Chamber of
Commerce and Industry.

- New corporate brand identity and logo adopted from October 15, 2006

- ACC establishes Anti-Retroviral Treatment Centre for HIV/AIDS patients at Wadi in


Karnataka, the first ever such project by a private sector company in India. -Company has
changed its name from Associated Cement Companies Ltd. to ACC Ltd

- ACC partners with Christian Medical College for treatment of HIV/AIDS in Tamil
Nadu

- Sumant Moolgaokar Technical Institute completes 50 years and reopens with new
curriculum 2008

-Ready mixed concrete business hived off to a new subsidiary called ACC Concrete
Limited. -ACC Cement Technology Institute formally inaugurated at Jamul on July 7.

-First Sustainable Development Report released on June 5.

- ACC wins CNBC-TV18 India Business Leader Award in the category India Corporate
Citizen of the year

- Project Orchid launched to transform our Corporate Office, Cement House into a green
building.

- ACC received the Jamanalal Bajaj "Uchit Vyavahar Puraskar" of Council for Fair
Business Practices

25
- ACC is allotted coal blocks in Madhya Pradesh and West Bengal.

- ACC's new Grinding plant of capacity 1.60 million tonnes inaugurated at Thondebhavi
in Karnataka.

- Kudithini Cement Grinding Plant inaugurated in Karnataka on January 4, 2010 with a


capacity of 1.1 MTPA of Portland Slag Cement.

- ACC acquires 100 percent of the financial equity of Encore Cements & Additives
Private Limited which is a slag grinding plant in Vishakhapatnam in coastal Andhra
Pradesh. This company became a wholly-owned subsidiary of ACC in January 2010.

- ACC enters its platinum jubilee year - the first company in the cement industry to
achieve this status.

- ACC receives FICCI Award for Outstanding Corporate Vision Triple Impact Business
Performance Social & Environmental Action & Globalisation for 2009-10 - a unique
award received for the first time.

2011-2017

-World's largest kiln installed at ACC Cement Plant, Wadi, Karnataka with a capacity of
12,500 tonnes per day creating new landmarks for cement industry - Central Control
Room Building at ACC Chanda Plant, Maharashtra set up as a Green building, the first of
its kind in an industrial environment.

- ACC Secretarial & Share processes received ISO 9001 - 2008 Certification.

-ACC launches M-100 grade concrete especially designed for the construction of high
intensity towers -Amalgamation of two subsidiary companies ACC Concrete and Encore
Cement & Additives with ACC Limited .

- Board recommended a Final Dividend of Rs. 19 per equity share.

- ACC launches its first Waste Heat Recovery System (WHRS) at Gagal in January
2014, marking an important step in energy conservation. The WHRS harnesses waste heat
from exhaust gases discharged in manufacturing and converts it into useful electrical
energy.

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-ACC wins CII-ITC Sustainability Prize, the highest honour awarded by CII ITC for
2013, as one of India's Most Sustainable Companies.

- Board recommended a Final Dividend of Rs. 19 per equity share

. -ACC launches a new cement blending unit in Padubidri village, Udupi district,
Karnataka with a blending capacity of 30,000 tonnes per month of Portland Pozzolana
Cement (PPC).

-ACC Ltd wins Gold Shield at the ICAI Awards for Excellence in Financial Reporting
2013-2014 -ACC Ltd has restarted limestone mining at Bargarh in Odisha -ACC has been
recognized for Corporate Excellence wih the prestigious CII-ITC Sustainability Award
2015.

-ACC commences commercial production at its Chhattisgarh plant -ACC stabilizes


operations of new cement grinding unit in Chhattisgarh

-ACC New Cement Grinding Unit in Jamul, Chhattisgarh -ACC starts production at
Sindri Cement Grinding unit in Jharkhand

-ACC receives Silver award for Excellence in Financial Reporting for its Annual Report
2014 from the Institute of Chartered Accountants of India (ICAI).

-In 2017 ACC Sindri Cement Works won the Industry Champions for Sustainable
Development Goals (SDGs) Awards, the first Jharkhand Corporate Social Responsibility
Award.

-ACC won the "Industry Excellence in Supply Chain - Manufacturing" and "Warehouse
Innovation/ Initiative of the Year" at the 11th Express Logistics and Supply Chain
Leadership Awards 2017.

-ACC won the "Industry Excellence in Supply Chain - Manufacturing" and "Warehouse
Innovation/ Initiative of the Year" at the 11th Express Logistics and Supply Chain
Leadership Awards 2017.

-ACC’s Wadi Limestone Mine Works was conferred the National Mineral Development
Corporation (NMDC) Social Awareness Award 2016-17 by the Federation of Indian
Mineral Industries (FIMI)

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-ACC is conferred with "Demand Planning and Forecasting Award 2017", category 'Best
Use of Analytics in Demand planning and forecasting

- Manufacturing Sector - organized by the Institution supply chain management

 VISION :-

To be one of the most respected companies in India; recognized for challenging


conventions and delivering on our promises.

 PURPOSE :-

To be a driving force in creating a confident future for our people, our customers, our
shareholders and nation.

 HERITAGE :-

ACC ltd has been an interesting story - one that inspired a book. ACC was formed in 1936
when ten existing cement companies came together under one umbrella in a historic merger -
the country's first notable merger at a time when the term mergers and acquisitions was not
even coined.

The history of ACC spans a wide canvas beginning with the lonely struggle of its pioneer
F E Dinshaw and other Indian entrepreneurs like him who founded the Indian cement industry.
Their efforts to face competition for survival in a small but aggressive market mingled with
the stirring of a country's nationalist pride that touched all walks of life - including trade,
commerce and business.

The first success came in a move towards cooperation in the country's young cement
industry and culminated in the historic merger of ten companies to form a cement giant. These
companies belonged to four prominent business groups - Tatas, Khataus, Killick Nixon and F
E Dinshaw groups. ACC was formally established on August 1, 1936. Sadly, F E Dinshaw,
the man recognized as the founder of ACC, died in January 1936; just months before his
dream could be realized.

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 SUSTAINABLE DEVELOPMENT :-

“For us at ACC, sustainability is about being ready for tomorrow. Climate


change, fuel and energy prices, water and resource scarcity are all going to have an
impact on our business. This is why we are taking positive action now.”

 ALTERNATIVE FUELS AND RAW MATERIALS :-

ACC has a robust approach to promote the use of Alternative Fuels and Raw Materials
(AFRM) through the co-processing of hazardous and non-hazardous wastes in cement kilns.
This gives us opportunities to offer unique and sustainable waste management solutions to
waste generators - industries, municipalities and other bodies for an effective means of
disposal of industrial wastes, municipal solid wastes and biomass. This task is undertaken
under the umbrella of Geocycle.

GEOCYCLE INDIA-

ACC ltd have always been on the forefront of understanding and managing
environmental challenges sustainably. They understand that sustainable waste management is
the need of the hour and have taken the lead in providing safe waste management solutions to
industries and municipalities.

Safe management of waste through co-processing, as done in a highly professional


setting utilizing the avant-garde technology available in our plants, ensures complete
destruction of waste.

The waste is managed safely without any change in the cement kiln exhaust gas
composition or leaving any residues. ACC has offered waste management services since 2005
and in 2014 these services were housed under the Geocycle brand.

Their core drivers of value creation, customer service and technical excellence have
combined to drive the business forward under this brand. Geo means ‘earth’ in Greek.

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Cycle evokes recycling. The name Geocycle alludes to the ‘holistic’ nature of what we
do turning unusable waste into a safe, usable resource. Geocycle India provides sustainable
waste management solutions to industries, municipalities and the agriculture sector. We
collaborate closely with the waste generators to understand their specific requirements and
construct tailored solutions.

 ACC - 40 YEARS AGO.. AND NOW FROM A LEADER TO FIRST AMONG


EQUALS

If holding your ground is a measure of success then ACC (earlier Associated


Cement Companies Ltd) is one of the most enduring and successful companies in India. In the
mid-1970s ACC was almost synonymous with cement in the country. Forty-years
later ACC remains the most recognisable brand in the industry but has lost the race for market
share to a company it once helped start. ACC at one point controlled nearly a third of the
country's cement market but its share has fallen to around 10 per cent, behind Ultratech
Cement, a much younger company.

ACC was founded in 1936 when ten cement companies belonging to India's top four
top business groups decided to merge to form Associated Cement Companies Ltd. These 10
companies together accounted for nearly 92 per cent of India's cement market and the merger
was a way out of 'self-destructing' competition. ACC has been on a downhill journey ever
since, and losing market leadership to the Aditya Birla group's Ultratech Cement in the middle
of the last decade was the culmination of this process.

For most of its history, however, ACC was barely in a position to consolidate its
market share. After independence, the government's priority was to promote state-owned
companies and ensure a steady supply of cement to public projects at reasonable prices. Being
one of the largest corporates and the dominant cement maker, ACC was always on the
government's radar. Regulatory restrictions on the company were especially intense in the
1970s when it was placed under the Monopolies and Restrictive Trade Practices (MRTP) Act.
The law imposed restrictions on how fast the company could grow, allowing competitors to

30
walk away with most of the incremental demand. This coupled with controls on the production
and sale of cement hampered ACC's prospects during the roaring 1980s.

Indian industry's fortunes took a turn for the better in the 1980s but ACC was not
prepared to grab the opportunity. Cement production and pricing was liberalised partially in
1982 and then completely in 1989. Now companies were freed to produce as much cement as
they liked. For the first time in nearly a generation an Indian could buy cement from the open
market. The resulting boom in construction attracted a slew of new players to the industry,
including those with deep pockets like the Birlas and Larsen & Toubro. ACC was not in a
position to challenge the newcomers. Poor profitability had stretched ACC's balance sheet,
providing it little headroom to increase capacity in the 1980s. It was also saddled with old
plants, many built at the time of independence. In comparison, the newcomers were setting up
plants that were energy-efficient and could produce more with the same numbers of workers.

ACC needed to shed flab before it could participate in the growth race. Faster growth
also needed a large upfront investment, but its operations were not generating enough
resources. ACC could not turn to its promoters for funds, unlike its competitors that were parts
of diversified conglomerates which could cross-subsidise their cement ventures by dipping
into profits from other businesses. All of ACC's original promoter business groups had sold
out by the mid 1970s with the exception of the Tatas. But with just a 14 per cent stake, ACC
was a Tata company only in name and its management led by long-time chairman Nani
Palkhiwala never missed an opportunity to assert independence. With no deep pockets behind
it, ACC had to fend for itself.

Although the 1980s, ACC's finances were torn between funding growth and
maintaining financial solvency and this predicament shows in the financial ratios. On the eve
of the 1991 economic reforms, ACC was one of the country's most indebted cement
companies with only a small rise in capacity to show for it. During the year ending March
1989, ACC reported a debt to equity ratio of 2.3. Competitors like Grasim Industries (debt-
equity ratio of 1.6 in 1990-91), L&T (1.26) and Gujarat Ambuja Cement (1.27) were in much
better shape despite building significant capacityduring the previous decade.

ACC continued to face headwind all through the 1990s with its debt to equity ratio
running at around one throughout the decade. In the late 1990s, ACC had a chance to formally
become a part of the Tata group and access the resources of Tata Sons. Its largest
31
shareholders, the financial institutions, however, thwarted plans by Bombay House to raise its
holding in the company through a preferential issue of shares. Failing to get control of the
company, the Tatas sold their 14.45 per cent stake in ACC to Gujarat Ambuja Cement in two
tranches beginning 1999. One of India's oldest independent and professionally run companies
was now a part of a family enterprise. The change in ownership did little to change ACC's
fortunes and it managed to maintain its leadership with 10 per cent share of the market
volume. Its new owners, however, could not retain control over ACC for long.

In 2005, Gujarat Ambuja Cement sold its stake in ACC to Swiss


multinational Holcim which came out with an open offer to become the largest and controlling
shareholder. For the first time in its history ACC had a clear owner and promoter and could
bank on its resources to consolidate its leadership and grow faster. There was a new sense of
purpose at Cement House, ACC's historic headquarters in Mumbai opposite Churchgate
Station. One of India's most financially stretched firms was debt-free within three years
of Holcim taking charge. With its new financial heft, ACC could now recapture some lost
opportunity, but it was no more the same company and the goal posts had shifted. ACC's
management was not free to chart its own course but had to fit into Holcim’s overall strategy
for India

The boom in cement demand and ACC's profitability from 2005 was most visible in its
dividend payout and ever increasing cash pile. In the nine years since March 2005, ACC's
cumulative investment in plant and equipment (net block) doubled, lagging dividends that are
up 4.5 times and net profits, up 2.7 times. This suited Holcim because the higher dividend
income helped it recoup a big chunk of its investment in acquiring ACC (see chart). The
transformation at Cement House was complete when in December 2012, the ACC board
agreed to pay royalty to Holcim for using its technology at the rate of 1 per cent of its net
sales. A former executive wondered whether ACC was the same company that offered its
technical and geological services to newcomers in the industry.

 ACC CEMENT LIMITED NETWORKS:

32
ACC Limited is India's foremost manufacturer of cement and ready mixed concrete
with 17 modern cement factories, more than 50 ready mixed concrete plants, a vast
distribution network of over 9,000 dealers and a countrywide spread of sales offices.

Headquartered in Mumbai, ACC’s operations span the whole country with cement
factories, ready mix concrete plants, regional offices, sales units and area offices. If you wish
to download a map showing ACC’s network . Or else use the interactive map as shown to
locate individual units.

 SUBSIDARIES:

ACC has five subsidiary companies, which are all engaged to support the core business of
the company. These comprise Bulk Cement Corporation (India) Limited which is a bulk
cement distribution facility; ACC Mineral Resources Limited which was set up to explore and
supply key mineral resources of coal and gypsum. Lucky Minmat Limited, National
Limestone Company Private Limited and Singhania Minerals Private Limited which are
engaged in supply of limestone.

 PRODUCTS AND SERVICES :

ACC’s organizational vision is founded on the principles of good governance and a


resolve to be a customer-centric organization that delivers leading-edge building products
backed with dependable after sales services. The company has been one of the country’s
principal manufacturers of Portland Cement in its eight decade history. All products of the
company are sold under the overall umbrella brand name ACC. The brand enjoys a high level
of equity in the Indian market and the name has been synonymous with cement; mainly
because of the high quality standards we maintain and the service provided to customers by its
extensive distribution network of about 9000 dealers and more than 50,000 sales outlets which
make our cement widely available.

Types of Cement-

ACC makes FOUR types of cement used in general construction-

 43 grade ordinary Portland cement.


 53 grade ordinary Portland cement.
 Portland pozzolana cement.

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 Portland slag cement.

Cement is distributed in bags of 50 kilograms each made of polypropylene (PP). It is


also offered in bulk form for larger users. Bulk cement was first introduced in the country
by ACC in 1956 at its Okhla Silosite Depot which catered to many of the impressive
edifices built in New Delhi at the time. Additionally, the company promotes its range of
‘Premium’ cements which are offered in higher quality packaging viz. Paper bags,
Laminated PP bags and Ad Star Bags. These products typically assure superior
performance in respect of parameters such as early strength and durability.

1. Blended Cements
ACC has been a trendsetter in the industry in introducing Blended cements namely
Portland Slag Cement and Portland Pozzolana Cement. These varieties of cement have
had enormous positive environmental impacts. Blended cements are made by substituting
a part of clinker (which is limestone-based) with certain industrial by-products. Slag
derived as a by-product from steel plants is used to manufacture Portland Slag Cement
while fly ash, a waste from thermal power stations, goes in to the making of Portland
Pozzolana Cement. The laudable role played by blended cements in reducing CO2
emissions is well recognized globally as is ACC’s foremost contribution in promoting
them.

2. Customers-
Our largest customer segment comprises individual home builders across the country
who purchase cement from trade channels. In addition we also cater to industrial,
infrastructure and commercial (ICI) projects. These customers typically purchase cement
directly from the company. In addition there are units that consume cement as raw
material such as concrete product makers and readymix concrete plants.

3. Pan India Distribution-


34
A large dedicated network of dealers and retailers assists us to reach out to a countrywide
spread of customers. These channel partners play a critical role in providing primary
customer care and service to customers. In turn dealers and retailers are managed and
kept motivated by our young and active sales personnel based in the company’s sales
units, area offices and districts. A separate team manages sales and serving of the needs
of key customers who comprise industrial, infrastructure and commercial buyers. The
sales team is ably assisted by Customer Service personnel located in each office. They are
mostly civil engineers who provide technical assistance and useful information to the
supply chain comprising masons, contractors, architects and engineers.

4. Ready Mixed Concrete (RMX)-


This is a value addition introduced commercially in the Indian market in 1993 which has
since then had a profound positive impact on the performance and capability of the
construction sector. ACC’s RMX business has registered consistent growth in the past
few years, widening its customer base and blossomed in the last few years, developing
customer oriented value-added products and services, enhancing quality and successfully
widening its customer base. ACC RMX offers a wide range of building solutions for
different applications and custom-made to cater to a gamut of specific requirements -
from small applications to special grades of concrete for mega structures. Sale of ACC
RMX is made directly to buyers and end-users. Wherever convenient the team leverages
the use of intermediaries such as our trade channels.

5. Quality Specifications-
The company’s internal norms for cement manufacture are more stringent than the
relevant statutory ones as prescribed by the Indian Standards. ACC offers cement
conforming to 43 Grade Ordinary Portland Cement (IS 8112- 1989), 53 Grade Ordinary
Portland Cement (IS 12269-1987), Portland Slag Cement (IS 455-1989) and Portland
Pozzolana Cement (IS 1489-Part 1). Each bag of cement clearly indicates the statutory
quality specification to which the cement contained therein conforms. Bags containing
Special cements also highlight key product benefits in addition to the statutory
information.
We refer to two codes in the ready mixed concrete business. These are IS 456: 2000,
Plain and Reinforced Concrete- Code of Practice (Third Revision), (Reaffirmed 2005)
and IS 4926: 2003, Ready-Mixed Concrete- Code of Practice (Second Revision), 2003.
35
We do not manufacture any products that are either restricted or disputed. In 2015, there
was no incidence of non-compliance with regulations and voluntary codes concerning
product and service information and labeling. Similarly there was no instance reported for
non-compliance with regulations and voluntary codes concerning health and safety
impacts of our products and services.

6. Most viable building material-


While both cement and concrete involve extractive processes, concrete is recognized as
the most viable building material known to have lower average embodied carbon and
energy as compared to most other building materials. With no viable alternative for
cement and concrete visible in the near horizon, it is clear that the construction sector will
rely on these two building materials. India’s cement industry has the lowest carbon
footprint as compared to the rest of the world. ACC itself was felicitated in 2015 as being
one among ten most sustainable companies in India. ACC has led the industry in the
production of blended cement. Bulk Cement and Ready Mixed Concrete have also shown
to be environment-friendly.

7. Economic Impact of Cement


The advent of Portland Cement in India has been almost coterminous with ACC and the
company has participated significantly as prime supplier to much of the built environment
in the nation encompassing houses and infrastructure. Cement industry has contributed
substantially to the national economy and society and continues to do so today. The
benefits include direct and indirect employment, taxes and revenues for central and state
governments, municipalities and local bodies. Cement industry is a major customer of
Indian Railways, road transport and coal industry. Cement plants tend to generate several
multiplier effects both economic and social in their vicinity. Cement consumption per
capita is seen as an indicator of economic and human development. ACC continues to
make valuable contributions to the national economy supplying quality building materials
that are essential to build the nation’s housing and infrastructure development projects.

 CUSTOMER EXCELLENCE

ACC’s organizational vision is founded on the principles of good governance as well


as on a firm resolve to be a customer-centric organization. This belief motivates it to
36
deliver leading-edge building products backed with dependable after sales service. The
customer is seen as representing among the most valued of our stakeholders. The
company acts on a firm belief that its success in the marketplace leads to a good
reputation and these two advantages between them are among the primary determinants
of maximizing long-term value for its shareholders and investors. Further, customer
excellence constitutes an important part of the strategy to enhance the brand’s competitive
edge in a landscape that is characterized by aggressive selling.
Accordingly the company works to create a unique experience for its customers
through a triple offering of Superior products, Superior logistics and Superior service
which together assure enhanced customer value. ACC follows an unwavering tradition of
supplying the best quality and packaging in its range of cement and ready mixed concrete.
Quality implies exceeding base statutory standards and the specifications sought by the
customer. Besides the standard offering, we promote an assortment of Premium cements
and value added Building solutions in the concrete range that incorporate enhanced
technical features appropriate for different applications and local conditions.
Customer Services Customer Service (CS) teams at each Sales Unit engage with each
group of customers, supply chain members and influencers to impart product knowledge
and appropriate skill development. CS teams also offer a range of Technical Services
from providing basic product knowledge to retail buyers to customised and and fee-based
services for the large buyer such as concrete mix design, cement and concrete testing,
good construction practices and site supervision. Customer Service teams in regional
offices, Sales Units and area offices provide technical assistance and information to
others in the supply chain who are closely associated with or influence the decisions of
customers – this group includes masons, site supervisors and contractors. Consumer
Camps are conducted on a regular basis. CS teams also network with influential entities
such as construction engineers, builders, developers, promoters and large contractors at
platforms they arrange such as technical training programmes, seminars and plant visits.
Architects are connected with us indirectly but we also interact with them regularly; the
LafargeHolcim Foundation for Sustainable Construction, The Indian Concrete Journal
published by ACC and ACC Green Building Centres serve as useful platforms for a wide
range of influence groups.

Complaints

37
The company has a robust complaint handling system that makes for prompt logging,
investigation and resolution and closure. In 2015, a total of 285 complaints were received
from customers (end-consumers), none of which remained pending at the close of the year.
Effective customer relationship management (CRM) systems are used by our sales team to
manage customer transactions, queries and other interactions. An assortment of routine studies
and surveys are conducted which help ensure that we always have the pulse of our valued
clientele. Feedback is obtained from channel partners on their experience and perceptions
across all operational parameters and the information thus gathered is processed to measure
the “Net Promoter Score” for the company which indicates the level of satisfaction of channel
partners. This score was 66% in 2015 as compared to 52% in 2014. NPS segregates customers
in three categories i.e., “Detractors, Passives and Promoters. Analysis of their responses
suggests the measures needed to convert customers into the category of Promoters. A
significant element in customer excellence is the need to support and motivate the business of
our Channel Partners who comprise a strong bridge between the company and its customers,
contributing over 80% of our business. Channel partners also play a key role in brand
promotion. The business success, growth and productivity of this vast network of dealers and
retailers is vital to our own success.

Slow-moving market conditions witnessed in 2015 posed severe challenges for the
company’s sales force. The goal before the sales team was to enrich customer services, to seek
stronger customer-pull and price improvements - particularly by leveraging enhanced brand
building initiatives in partnership with the company’s channel members. The team dealt with
the situation with vitality and innovation while facing the challenges involved in dealing with
a slow-moving market. The sales force engaged itself with reaching out to customers to
address their needs and concerns with a differentiated customer experience that helped in
strengthening and nurturing the company’s brand advantage and maintaining market share.

Brand Promotion

38
Apart from the point of purchase in the company’s vast retail network, ACC’s brand
visibility was widened across several mediums making effective use of television advertising,
print and social media to synergize sales efforts.

Lafarge Holcim Vision

Towards the year end when LafargeHolcim emerged as the world’s largest building
materials supplier, we were particularly inspired by three elements of their vision for customer
excellence namely a strong commitment to help customers to differentiate, innovate and
succeed; to serve the building needs of the individuals and retail customers and to be the
preferred partner for building and infrastructure.

Product Responsibility

Cement and concrete and the raw materials associated are generally not considered to have
any safety or health hazards of significance associated with them. As such cement is a strongly
alkaline and exothermic substance. Moist cement or concrete can be caustic and cause skin
burns. Customers, masons and engineers are given due awareness of these properties.

 SUPPLY CHAIN AND PROCUREMENT

Limestone is the principal raw material for cement and has to be mined in large
quantities. Mining leases are obtained over tracts that have reserves of the mineral enough to
sustain cement plants over reasonably long periods. Coal is the principal fuel and is purchased
directly from domestic coal companies or imported. Other raw materials are slag and fly ash
which are also procured directly from steel plants and thermal power stations. Cement
machinery is large and complex and is also procured directly from manufacturers. The
company meets most of its energy requirements from its captive power plants. Wherever
possible, the company prefers to purchase materials, stores and equipment directly from
manufacturers or from licensed sellers. The supply chain and procurement process represent
an important part of the organization’s value chain and account for a major portion of its
operating cost. Procurement and supply chain operations involve a large multi-disciplined
group of personnel representing internal and external stakeholders. It is thus vital to ensure
efficiency and transparency in our operations. In 2010 ACC, then part of the Holcim group,
had launched its Sustainable Procurement Initiative with the ultimate goal of partnering with

39
suppliers to deliver value-for-cost procurement for the Group and our customers, and to
demonstrate responsible supply chain management. We have adopted a Supplier Code of
Conduct, recommended by UNGC principles, which is communicated to all suppliers.

Since 2011, we have been working towards the implementation of Sustainable


Procurement through the Supplier Code of Conduct which is meant to provide a clear
summary of ACC’s expectation from suppliers in all procurement dealings. We insist on
transparency and accountability to be adhered to strictly in all procurement activities. The
code lists nine standards that Suppliers are expected to follow, in addition to compliance with
local and national laws and regulations :-

 Occupational health and safety (OH&S).


 Working conditions.
 Freedom of association and non-retaliation.
 Forced labour.
 Child labour.
 Non-discrimination.
 Environmental regulatory compliance.
 Management of environmental impacts.
 Bribery and corruption.

 Respecting Human Rights


At ACC, we are highly conscious of respecting human rights. Care is taken to
ensure that all measures in this respect are taken across all our operations and supply
chain. Respecting the rights of women, preventing child labour or any other forms of
forced labour and non-discrimination are among our areas of focus. We have put in
place systems and measures to ensure that the labour engaged by our contractors is
governed by the Contract Labour (Regulation & Abolition) Act and mechanisms to
report any grievance of human rights violation. During the last year, no cases of
human rights violation (viz. incidences of child labour, forced or compulsory labour,
overtime without pay etc.) were recorded in our operations.

 Environmental principles in Procurement

40
Contractual agreement of Compliance: All agreements with Suppliers, such as
purchase orders, purchase agreements, service agreements and frame agreements have
to refer to the Supplier’s compliance with SA8000, environmental management and
legal compliance requirements. With its signature or order confirmation, the supplier
accepts and agrees to adhere to these requirements. In the reporting period under
review, more than 5% of new suppliers were screened using environmental criteria.

 Suppliers and Vendors


Our vendor base of more than 11,000 suppliers spread across the country
includes reputed manufacturers and trusted brand names, usually from among the
leading 3-4 vendors of their particular industry segment who are technically and
financially sound and have the intrinsic capacity to supply material of desired quality
and on time. For our vendor base, we prefer vendors who demonstrate good corporate
citizenship and promote sustainable development. Vendors are selected to meet the
requirements of our specifications and are expected to make timely deliveries of the
required material.

 BUSINESS RISKS AND OPPORTUNITIES :

The Company has a comprehensive approach to address business risks such that these
may be identified and anticipated in a timely manner so as to be acted upon appropriately,
thereby enhancing the Company’s competitive advantage. A Business Risk Management
Committee is in place and functioning as required under SEBI (Listing Obligations and
Disclosure Requirements) Regulations 2015. Chaired by an Independent Director of the
Board, the Committee met twice during 2015. Details of its terms of reference and functioning
are described in the Corporate Governance section on page 90 of the Annual Report 2015 .

A specially developed and structured Business Risk Management framework is used


for the purpose that maps risks in terms of their likelihood and potential impacts while also
looking for threats and opportunities. Essentially the process aims to identify, understand,
evaluate and treat risks and their drivers systematically in a manner that enhances transparency
about the risk exposure within the organization. The Company’s Mid-Term Planning cycle
defines separate approaches for each of the two main business segments of cement and

41
concrete. Some important risks identified in this way relate to the availability and cost of raw
materials, increased competition and safety.

 Raw Materials Risks


Limestone is the principal raw material for Portland Cement. Certain provisions of the
new Mines and Minerals (Development and Regulation) Amendment Act, 2015 may
impact both the availability and cost of this mineral which is of critical importance to the
company. Among one of the ways to mitigate this risk, is increasing the consumption of
petcoke and additives which enable the company to use lower grade limestone which
would then not only help conserve mineral resources but also increase the life of the plant.

 Competition Risks

India’s Cement Industry has been among the most competitive in the world arena,
with capacity addition coming from the expansion of existing plants as well as an ever
increasing number of new entrants. In the face of this competition, the company’s response is
to seek ways of increasing all-round operational efficiencies, identifying strategies that
enhance its competitive advantage, by managing risks and pursuing opportunities for
profitable growth all done with a view to maximize long-term value for its shareholders. As a
means of maintaining its market share and strengthening its competitive edge, the Company
aims to leverage on its veteran expertise and capacity additions expected from its Jamul and
Sindri projects that are expected to be commissioned in Q2’16. This is complemented by the
on-going measures to deepen its reach, broaden its product portfolio and services and enhance
brand equity. Simultaneously a close watch is kept on managing costs so as to be more
competitive.

 Safety Culture

In line with the Group vision, Health & Safety of employees and workmen is singled out
as an overarching value. As a key thrust area, the H&S agenda involves frequent safety
assessments and training that are conducted with unwavering regularity on behaviour based
safety and Visible Safety Leadership programmes. These are meant to keep a continuous focus
on imbibing a proactive safety culture. The job descriptions of all Management Staff have
Health & Safety competencies integrated into them in a way that reinforces accountability.
Road Safety is another risk identified as having critical importance, particularly because more

42
than half of the company’s dispatches are made by road. Safety on national highways and
roads is dependent on many external and uncontrollable factors which include their condition
and maintenance, density of traffic and general observance of road traffic laws.

However the company’s Logistics team has made proactive efforts to mitigate risks to all
its stakeholders through well-structured initiatives that address issues such as vehicle
inspection for road-worthiness, simulator-based driver training and the deployment of Global
Positioning Systems and RFID technologies to monitor both in-plant and outbound movement
of cement right up to the end user. Opportunities Also pertinent to note is that nearly every
risk faced at the operational level often brings with it an opportunity which, when analyzed
strategically, has the potential to create fresh business value.

The Company routinely looks for potential business opportunities presented by situations
involving risks – some such possibilities may be in the areas of raw materials and their
availability and sourcing, energy efficiency, logistics, quality and product development,
research-based market segmentation, benchmarking best practices in manufacturing and
productivity improvement.

 FINANCIAL PERFORMANCE OF ACC CEMENT LIMITED:-

ACC Ltd is India's foremost manufacturer of cement and concrete. ACC's operations are
spread throughout the country with 17 modern cement factories, more than 50 readymix
concrete plants, 21 sales offices, and several zonal offices. Since its inception in 1936, the
company has been a trendsetter and an important benchmark for the cement industry.

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 Indian cement industry.

 OVERALL COMPANY’S FINANCIAL PERFORMANCE

43
 Consolidated income, comprising Revenue from Operations (Gross) and other income,
for the year was ₹14,329.58 crore, 13.31% higher as compared to ₹12,646.20 crore in
2016.

 Total consolidated Revenue from operations (Gross) increased to ₹14,200.72 crore


from ₹12,523.39 crore in 2016.

 Other Operating revenue for the year 2017 was ₹354.18 crore representing an increase
of 59.59 % over the previous year.

 Consolidated Profit before Tax for the year was ₹1,310.06 crore as compared to
₹885.31 crore in 2016.

 Consolidated Profit after Tax for the year was ₹924.41 crore as compared to ₹658.29
crore in 2016.

 No material changes or commitments have occurred between the end of the financial
year and the date of this Report which affect the financial statements of the Company
in respect of the reporting year

 CORPORATE GOVERNANCE:-

The Annual Report contains a separate section on the Company’s corporate


governance practices, together with a certificate from the Company’s Auditors
confirming compliance, as per SEBI Listing Regulations.

 CORPORATE SOCIAL RESPONSIBILITY:-

Our vision is to be one of the most respected companies in India, delivering


superior and sustainable value to all our customers, business partners, shareholders,

44
employees, and host communities. Our CSR initiatives focus on the holistic
development of our host communities while creating social, environmental and
economic value to the society. To pursue these objectives we will continue to:

• Uphold and promote the principles of inclusive growth and equitable development.

• Devise and implement Community Development Plans based on the needs and
priorities of our host communities and measure the effectiveness of such development
programmes.

• Work actively in the areas of Livelihood advancement, Enhancing employability and


Income Generation, Improving Quality and reach of Education, Promoting Health and
Sanitation, conserving the Environment and supporting local Sports, Arts and Culture.

• Collaborate with like-minded bodies such as Governments, Civil Society


Organizations and Academic Institutions in pursuit of our Goals.

• Interact regularly with stakeholders, review and publicly report our CSR initiatives.

 BIRLA CORPORATION CEMENT LTD :-

Birla Corporation Limited, is an Indian-based flagship company of the M P Birla


group of companies, founded by Shri Ghanshyam Das Birla in the late 1910s and carried on
by Madhav Prasad Birla.

In the 1890s, Birla Corporation was a jute manufacturing company, but over time, it
grew to operate four main divisions: cement, jute, vinoleum, and auto trim.[1] It is not a part of
the Aditya Birla Group, a multinational conglomerate with products ranging from metals,
cements, textiles, agricultural businesses, telecommunications, IT, and financial services.

45
Formerly known as Birla Jute Manufacturing Company Limited, with the expansion
of divisions, the company changed their name in 1998 to Birla Corporation Limited.

Under the Chairmanship of Mrs. Priyamvada Birla, the Company crossed the Rs.
1,300 - crore turnover mark and the name was changed to Birla Corporation Limited in 1998.

After the demise of Mrs. Priyamvada Birla, the Company continued to consolidate in
terms of profitability, competitiveness and growth under the leadership of Mr. Rajendra S.
Lodha, late Chairman of the M.P. Birla Group. Under his leadership, the Company posted its
best ever results in the years ended 31.3.2006, 31.3.2007 and 31.3.2008.

The Company continued to record impressive growth in 2008-09 and 2009-10.

Mr Harsh V Lodha is now Chairman of the Company.


The Company had a turnover of Rs 3,768.42 crores in 2015-16 and a net profit of Rs 157.35
crores.

The Company is primarily engaged in the manufacturing of cement as its core


business activity. It has significant presence in the jute goods industry as well.
The Company has acquired 100% shares of Reliance Cement Company Private Limited
(Reliance Cement), a subsidiary of Reliance Infrastructure Limited (RIL).

After this acquisition, Reliance Cement has become a wholly-owned material


subsidiary of Birla Corporation Limited. The entire cement business of RIL has been acquired
for an Enterprise Value of Rs. 4,800 crores.

This acquisition provides Birla Corporation Limited with the ownership of high-
quality assets, taking its total capacity from 10 MTPA to 15.5 MTPA.

46
 A DETAILED COMPANY’S HISTORY – BIRLA CORPORATION

1919-1984

- The Company was incorporated at Calcutta. The main object of the company is to
Manufacture Jute goods, calcium carbide, oxygen and acetylene gases, synthetic and
viscose yarn and cement.
- The Cement division comprises Satna Cement works and Birla Vikas Cement (new
plant) at Satna (M.P.); the Birla Cement Works at Chittorgarh (Rajasthan) and Durgapur
Cement Works at Durgapur (W. Bengal).
- The Jute Mills division comprises of Birla Jute Mill at Birlapur, Bally Jute Mills (Bally-
1) at Bally and Soorah Jute Mills (Bally-2) at Narkeldanga, all in W. Bengal.
- The staple fibre division is known as "Birla Synthetics" and the calcium carbide division
is known as "Birla Carbide & Gases".
- The Oxygen & Acetylene Gas Unit was commissioned in August. The Company also
entered into an agreement with Indian Oxygen, Calcutta, for exlusive sale of its products

47
on principal to principal basis. 1966 - In August, 3,98,906 Bonus Equity shares issued in
prop. 1:4.

-7.86% II Pref. shares redeemed on 30th Sept., 75,000 III 9.3% Pref. shares issued at par.

- The Company entered into an agreement with Hindustan Steel, Ltd. for the purchase of
blast furnace slag from the Durgapur Steel Plant to set up a slag-cement plant at Durgapur.
The Durgapur Slag-Cement unit comprising the fourth cement mill with an integrated
E.S.P. unit was commissioned in March 1981.
- In March, 18,94,527 Bonus Equity shares issued in the prop. 1:1. 1979 - 39,89,054
Bonus Equity shares issued in prop. 1:1.
- The Company undertook a comprehensive modernisation scheme of its spinning unit
phased over three years.
- Bally Jute Co. Ltd., having two units viz. Bally-1 and Bally-2 was amalgamated with the
Company with effect from 1st April. As per the scheme, a total of 1,02,370 equity shares
of Rs 10 each and 30,000
.- 15% debentures of Rs 100 each were allotted to the members of Bally Jute Co. Ltd.
These debentures are redeemable at par on March '90. The Bally-1 Jute Mill and Bally-2
Jute Mill have come to be known as Bally Jute Mills and Soorah Jute Mill respectively.
-4,61,848 No. of equity shares issued on 1.4.1983 (prem. Rs 20 per share) to financial
institutions in conversion of loans/debs. (30,186 shares to ICICI; 1,666 shares to IFCI;
1,43,333 shares to IDBI; 1,43,333 shares to UTI and 1,43,333 shares to GIC and its
subsidiaries).
- The Company revalued the assets of its Birla Jute Mills, Birla Carbide & Gases and
Birla Synthetics, all at Birlapur, Bally Jute Mills at Bally and Soorah Jute Mill at
Narkeldanga as on 1st April. 1983
- Two diesel generating sets of 4000 KW capacity each were installed and commissioned
at Birla Vikas Cement Unit.
. - With effect from 7th February, the name of the company was changed from the Birla
Jute Mfg. Co. Ltd. to Birla Jute & Industries, Ltd. Effective 31st March 1997, the name
was again changed from `Birla Jute & Industries Ltd.' to Birla Corp. Ltd.
- With effect from 1st April, the Company cancelled its 23,642 - 7 1/2% preference shares
of Rs 100 each and issued and allotted in lieu thereof 23,642
48
-15 % secured non-convertible redeemable debentures of Rs 100 each in the prop. of 1
debenture for every one such preference share. These debentures are redeemable at par on
31st March, 1990 or earlier by giving three months' prior notice.

- The captive thermal plant of 4.5 MW at Chittorgarh was commissioned in December


1985.
- In order to raise funds for substantial expansion in the capacity of the cement works at
Chittorgarh, the Company issued 13 1/2% convertible debentures of Rs 230 each for Rs
11.5 crores and 15% non-convertible debentures of Rs 100 each for another Rs 8 crores,
Rs 30 from each convertible debenture was converted into 3 equity shares of Rs 10 each
on 1st July 1985.
- 1,43,333 No. of equity shares issued (prem. of Rs 20 per share) to LIC on 1st September,
in part conversion of loan.

1985-1995
- 15, 00,000 shares issued at par on 1st July, in conversion of debs. 1,01,85,659 bonus
equity shares issued in prop 1:1.
- A letter of intent was received for increasing the installed capacity from 45,680 spindles
to 50,000 spindles. It was implemented during the year.
- The old wet process plant was affected by poor quality of coal but the modern dry
process plant was affected by poor quality of coal. The Birla Carbide & Gases unit
suffered losses on account of increase in the costs of power and carcoal coupled with sharp
decline in the realisations.
- A letter of intent was received for the setting up of a hydrogen peroxide plant of 4,500
TPa capacity on 100% concentration basis. Efforts were made to obtain technology and
know-how for the project.
- As a part of modernisation programme, modern jute spreaders were introduced in both
Birla and Bally Mills. However, labour union at all the three mills were opposing the
modernisation programme fearing retrenchment.
- The inferior quality of coal and labour troubles coupled with sluggish demand for cement
reduced the cement capacity utilisation at the old plant in Chittor.

The production at Birla Carbide & Gases unit was slightly lower due to a six week shut
down of the plant for relining of furnace and lime kiln.
49
- An agreement was signed on 18th February, by the company and the Soviet
Collaborators, viz. Odessa Technical Fabrics Mill and V/o Novoexport to transfer all
assets and liabilities of Bally Jute Mills, with effect from 1st April or other date as agreed
upon, to a new Joint Venture Company, Birla Odessa Industries Ltd. in consideration of
offer of equity shares of paid-up equity share capital of the Joint Venture Company.
- A collaboration agreement was signed by the Company with EMPRWERKE of
Germany for the manufacture of Automobile interior Door panels based on jute fibre.
- A MOU was signed by the Company with Maruti Udyog Ltd. to supply door panels
manufactured by them.
- The Company initiated a fresh programme of modernisation. - As the long term prospect
for the manufacture of calcium carbide in W. Bengal is not encouraging, application was
made to Govt. for conversion of the furnaces to the manufacture of ferro-silicon.
- Production of both cement were lower due to the prolonged disruption in production at
the chittor cement works and due to labour unrest.
- An application for a letter of intent for expansion at Satna was submitted for expansion
of its capacity from 15.5 lakh tonnes to 27.5 lakh tonnes.
- In February, the company allotted 20,00,000-14% secured redeemable non-convertible
debentures of 100 each to financial institutions on private placement basis.
- The break-up of the USSR, and the suspension of their purchasing during the second
half of 1991-92 was a severe blow to the Company. But the benefits could not be reaped
due to an industry wide strike that led to closure of the mills for seven weeks.
- 11,000 high speed ring spindles, three high speed cards, five high speed draw frames
were replaced and five sets of autolevellers were installed. In addition, four Volkman TFO
machines were also added to augment supply of knotless export yarn.
- With a view to increase export of higher value added jute products, the export yarn unit
at Birlapur was being expanded and quality upgraded while a new unit was being set up at
Bally to produce high quality export yarn with upto-date technology.
- Operations of the Satna plant were adversely affected due to heavy power cuts and
shortage and poor quality of coal leading to lower production of clinker and cement.
- The Chittor plant was awarded the second best productivity award for the year 1991-92
and 1993-94.
- With the commissioning of two modified kilns with the installed capacity of each kiln
increased to 900 TPD while energy consumption got reduced by 25%.
- Birla Vinoleum's new PVC floor covering plant was fully installed.
50
- The Company undertook to manufacture Cetaria ferro alloys in one of the furnaces of
Birla Carbide.
- The closure of the Company's Bally Jute Mills from 26th August, had also contributed to
the low turnover and profits.
- Due to severe labour problems, Bally Jute Mills suspended production from 26th August.
The continued loss of markets in Russia and other CIS countries was made up by increased
export to GCA markets. Bally Jute Mills reopened on 1st August 1993 with the
commissioning of sophisticated export yearn unit and high value fabric unit.
- Production of Birla Synthetics division declined due to the shortage in the supply of
viscose staple fibre from Grasim, the major supplier which had a closure of 60 days due to
labour problems.
- Additional autoconers, T.F.O. machines and other equipments were commissioned for
catering to the export market. - Installation of high efficiency separators on all cement
grinding mills. The cement grinding mill was scheduled to be commissioned by September
1993.
- The Company entered into a long term agreement with a German linoleum manufacture
for technical help in upgrading the product and marketing it within Europe on a regular
basis. - The revival and remodelling of the second submerged arc furnace was undertaken
for the production of ferro manganese.
- Production of jute declined due to the industrywide strike called by the trade unions,
shortage of fibre and acute shortage of raw jute resulting in an unprecendented rise in
prices.
- The company was setting up Dornier Looms at Birla Jute Mills to produce Lino Hessian
and other specialities to give a further boost to the production of export-oriented value
added items.
- Two DG sets of 6 MW capacity were to be installed at Satna and Chittor to meet the
power shortages.
- A joint venture company `Birla Redland Readymix Ltd.' was incorporated with Redland
PLC, UK to set up facilities for manufacture of readymix cement concrete in India.
- The company proposed to set up a 1.2 million plant each at Satna and Chittor. - India
Linoleum unit was demerged from the company under a scheme of arrangement which
provided for transfer of all assets and liabilities of the India Linoleum unit to Birla-DLW
Ltd. a joint venture between the company and DLW Aktiengesellschaft of Germany. This
arrangement was effective from 1st April.
51
1997-2010
- As on 31st March, the Company held the entire issued share capital of its subsidiaries,
Assam Jute Supply Co. Ltd. - Shareholders of Birla Jute & Industries Ltd at an extra
ordinary general meeting which sought to authorise the board to change the name of the
company to Birla Corp Ltd and to restructure the present businesses of the company.
- Shareholders of Birla Corp (the erstwhile Birla Jute & Industries Ltd) on 16th July
approved the company's proposal to promote a 50:50 joint venture with Redland Plc of the
UK, but only after voicing their resentment over the decision.
- Birla Corp Ltd. of the M P Birla group is setting up a fly ash-based cement grinding unit
at Rae Bareilly in Uttar Pradesh..

- The company is using slag in the range of 50-55 per cent with a small percentage of
chemical additives to ensure strength, durability and anti-corrosive properties of its
cement.
- The company's Satna and Durgapur plants have been exporting large quantities of
cement to Bangladesh and Nepal where prices have gone down "substantially on account
of cheaper supplies from China and Indonesia and the prevailing prices hardly give any
contribution."
- The company's installed capacity will go up to five million tonnes per annum.
- Due to the continuing strike by workers of the company's unit at Birla Jute Mills,
Birlapur, which commenced since March 22, the management of the company has been
constrained to declare a lock-out of the mills with effect from April 3.
- The Company to increase the authorised share capital of the company from Rs. 75 crores
to Rs. 100 crore.
- The Company to issue ordinary shares of the company on rights basis to the shareholders
of the company in the ratio of three ordinary shares for every 10 ordinary shares held
within a price band of Rs. 20 to Rs. 24.
-Makes it clear not to invest further in Cement business. -Board approves the proposal to
install power plants with a total capacity of 52 MW at its Cement Units at Satna.
-Appoints Shri Jayant Kumar Ray as Nominee Director by IDBI on the board of the
company, and Shri Pracheta Majumdar as the Additional Director on the Board of the
company.
52
-Receives 6 disclosures from Shri N K Kejriwal, Director and his family members. -Birla
Corporation Ltd has informed that Shri. Ajay Saraf, Deputy General Manager, ICICI Bank
Ltd., has been appointed as Nominee Director by ICICI Bank Limited in place of Shri
Arnab Basu on the Board of the company.
-Birla Jute Mills and Soorah Jute Mills have gone on strike on December 29, 2003.

2011-2017
-BirlaCorp - Expansion of Grinding Capacity at Durgapur.
-Trial production of clinker from the brownfield cement capacity expansion project of 1.2
Million Tonne at Chanderia has commenced.
-Birla Corporation Lt - Mining Operations at Chanderia.
-The Company has declared Dividend of Rs. 6.00 per share (i.e. 60%) on 7, 70, 05,347
ordinary shares for the Financial Year 2013-14.

-Birla Corporation completes acquisition of cement business of Reliance


-The Company has signed a deal with RIL whereby it took over cement production unit of
RIL for Rs 4,800 crore at a valuation of USD 140 a tonne.

 OVERVIEW OF BIRLA CEMENT INDUSTRY :-

The Cement Division of Birla Corporation Limited has 10 plants at seven


locations, Satna & Maihar (Madhya Pradesh), Raebareli & Kundanganj (Uttar Pradesh),
Chanderia (Rajasthan), Butibori (Maharashtra) and Durgapur (West Bengal).

They manufacture varieties of cement like Ordinary Portland Cement (OPC), 43 & 53
grades, Portland Pozzolana Cement (PPC), fly ash-based PPC, Low Alkali Portland Cement,
Portland Slag Cement (PSC), Low Heat Cement and Sulphate Resistant Cement.

The cement is marketed under the brand names of MP Birla Cement PERFECT,
ULTIMATE, UNIQUE, CHETAK, PSC, SAMRAT, MULTICEM &
CONCRECEM, bringing the product under the common brand of M P Birla Cement.

53
The Company has acquired 100% shares of Reliance Cement Company Private
Limited (Reliance Cement), a subsidiary of Reliance Infrastructure Limited (RIL). After this
acquisition, Reliance Cement has become a wholly-owned material subsidiary of Birla
Corporation Limited. The entire cement business of RIL has been acquired for an Enterprise
Value of Rs. 4,800 crores. This acquisition provides Birla Corporation Limited with the
ownership of high-quality assets, taking its total capacity from 10 MTPA to 15.5 MTPA.

This merger caused the acquisition of three cement plants from Reliance – An
integrated plant at Maihar (Madhya Pradesh), and grinding units at Kundanganj (Uttar
Pradesh) & Butibori (Maharashtra) with an aggregated capacity of 5.58 MTPA of cement and
3.30 MTPA of clinker.

 VISION :-

The Company believes that it is the TRUSTEE of its HUMAN RESOURCES and
encourages to develop them to introspect deeply and learn to act not on directives but on
inspiration from within, thus aiming to provide a strong motivation to our employees to
become psychological co-owners of the organization and to succeed with DETERMINATION
& COMMITMENT.

 SUSTAINABILITY :-

1. Climate –

Green power: The Waste Heat Recovery System (WHRS) in Satna and Chanderia plants
is constantly working on generating power from waste heat, vented out in the atmosphere,
from preheaters and clinker coolers. Since the environment-friendly initiative does not
generate CO2, it is called green power.

Installation of new energy-efficient grinding systems like Vertical Roller Mill (VRM)
for raw mill grinding and Roll Presses for cement grinding.

54
Continuous upgradation of technology through installation of latest energy-efficient
clinker coolers and grinding systems like VRM and Roll Press.

Provision for waste fuel utilization with provision for bio-mass and municipal waste
utilization as a fuel saving non-renewable energy resource.

Challenging Global Warming

Extensive plantations are undertaken in and around mining, plant and residential areas. To
reduce and control emission, parallel bag house and bag filters have been installed in Satna
complex.

The Company has utilized 93388 tonnes of flyash in 2008-09 alone, at its cement plants,
thereby reducing clinker usage. This, in turn, has reduced GHG emissions at the plants,
without compromising on the quality and strength of cement.

2. Social –

Birla Corporation Limited has been playing a pro-active role in the socio-economic
upliftment in and around its facilities in terms of health, education, rural infrastructure
development, etc.

1. It has actively supported establishment of Priyamvada Birla Cancer Research Institute at Satna
(MP).

2. The Medical Officer and para-medical staffs visit nearby villages in the Satna area every week
to offer free check-up, treatment and medicine.

3. A 24-hour, fully-equipped dispensary, with a Doctor and para-medical staff is maintained at


Sagmania Mines (MP) to benefit the villagers in the vicinity.

4. The Company has provided the required infrastructure for establishing an Ayurvedic
Dispensary at Sagmania Mines Colony, run by the Cess and Welfare Department, Government
of India.

5. Free eye checking and treatment camps were organized to benefit the villagers in the Satna
area.

55
6. A family planning camp was organized at Chanderia unit recently wherein 80 operations were
carried out.

7. Eight pulse polio camps have been organized, at Birlapur (WB), for the wards of our
employees as well as local habitants.

8. A four-day AIDS awareness camp was also organized at Birlapur on the last AIDS Day.

 JUTE DIVISION :-
The Birla Jute Manufacturing Company Limited was founded in 1919. BJMCL was the
first jute mill to have been established by an Indian business house and is the forebearer of
the present Birla Corporation Limited. We take pride in promoting sustainable and
environmentally friendly living, both at home and abroad.

 CEMENT DIVISION :-

The Cement Division of Birla Corporation Limited has 10 plants at seven locations, Satna
& Maihar (Madhya Pradesh), Raebareli & Kundanganj (Uttar Pradesh), Chanderia
(Rajasthan), Butibori (Maharashtra) and Durgapur (West Bengal).

They manufacture varieties of cement like Ordinary Portland Cement (OPC), 43 & 53
grades, Portland Pozzolana Cement (PPC), fly ash-based PPC, Low Alkali Portland Cement,
Portland Slag Cement (PSC), Low Heat Cement and Sulphate Resistant Cement.

The cement is marketed under the brand names of MP Birla Cement PERFECT,
ULTIMATE, UNIQUE, CHETAK, PSC, SAMRAT, MULTICEM &
CONCRECEM, bringing the product under the common brand of M P Birla Cement.

The Company has acquired 100% shares of Reliance Cement Company Private Limited
(Reliance Cement), a subsidiary of Reliance Infrastructure Limited (RIL). After this
acquisition, Reliance Cement has become a wholly-owned material subsidiary of Birla
Corporation Limited.

56
The entire cement business of RIL has been acquired for an Enterprise Value of Rs. 4,800
crores. This acquisition provides Birla Corporation Limited with the ownership of high-quality
assets, taking its total capacity from 10 MTPA to 15.5 MTPA. This merger caused the
acquisition of three cement plants from Reliance – An integrated plant at Maihar (Madhya
Pradesh), and grinding units at Kundanganj (Uttar Pradesh) & Butibori (Maharashtra) with an
aggregated capacity of 5.58 MTPA of cement and 3.30 MTPA of clinker.

 BIRLA CORP INCOME STATEMENT 2017-18

NO.OF MONTHS
YEAR ENDING 12 MAR-17 12 MAR-18 % CHANGE
Net sales Rs m 43477 57342 31.9 %
Other Income Rs m 1459 755 -48.2 %
Total Revenue Rs m 44935 58096 29.3 %
Gross Profit Rs m 6235 8066 29.4 %
Depreciation Rs m 2555 3322 30.0 %
Interest Rs m 2768 3776 36.4 %
Profit before Tax Rs m 2371 1723 -27.3 %
Tax Rs m 108 59 -45.6 %
Profit after tax Rs m 2195 1540 -29.9 %
Gross profit margin % 14.3 14.1
Effective tax rate % 4.6 3.4
Net profit margin % 4.9 2.6

ANALYSIS-

 Operating income during the year rose 31.9% on a year-on-year (YoY) basis.

57
 The company's operating profit increased by 29.4% YoY during the fiscal.
Operating profit margins witnessed a fall and stood at 14.1% in FY18 as against
14.3% in FY17.
 Depreciation charges and finance costs increased by 30.0% YoY and 36.4% YoY,
respectively.
 Other income declined by 48.2% YoY.
 Net profit for the year declined by 29.9% YoY.
 Net profit margins during the year declined from 4.9% in FY17 to 2.6% in FY18.

 BIRLA CORP BALANCE SHEET AS ON MARCH 2018

NO. OF MONTHS YEAR 12-MAR 17 12 MAR 18 %


ENDING CHANGE
Networth Rs m 32863 42798 30.2

Current liablities Rs m 12442 15888 27.7


Long-Term Debt Rs m 40491 38298 -5.4
Total Liabilities Rs m 96978 110749 14.2

Current assets Rs m 20948 24541 17.1


Fixed assets Rs m 71683 81311 13.4
Total assets Rs m 96978 110749 14.2

ANALYSIS :-

 The company's current liabilities during FY18 stood at Rs 16 billion as compared to Rs


12 billion in FY17, thereby witnessing an increase of 27.7%.
 Long-term debt down at Rs 38 billion as compared to Rs 40 billion during FY17, a fall
of 5.4%.

58
 Current assets rose 17% and stood at Rs 25 billion, while fixed assets rose 13% and
stood at Rs 81 billion in FY18.
 Overall, the total assets and liabilities for FY18 stood at Rs 111 billion as against Rs 97
billion during FY17, thereby witnessing a growth of 14%

 CASH FLOW STATEMENT 2017-2018

PARTICULARS MAR 17 Mar 18 % CHANGE

Cash flow from Operating Rs m 6773 8049 18.8 %


Activities
Cash Flow from Investing Rs m -9816 -2344 -
Activities
Cash Flow from Activities Rs m 2803 -5552 -
Net Cash Flow Rs m -241 153 -

ANALYSIS :-

 BIRLA CORP's cash flow from operating activities (CFO) during FY18 stood at Rs 8
billion, an improvement of 18.8% on a YoY basis.
 Cash flow from investing activities (CFI) during FY18 stood at Rs -2 billion on a YoY
basis.

59
 Cash flow from financial activities (CFF) during FY18 stood at Rs -6 billion on a YoY
basis.
 Overall, net cash flows for the company during FY18 stood at Rs 153 million from the
Rs -241 million net cash flows seen during FY17.

No. OF MONTHS 12 MAR-17 12 MAR-18


YEAR ENDING
Sales per share Rs 564.6 744.6
TTM Earnings per share Rs 28.5 20.0
Diluted earnings per share Rs 28.5 20.0
Price to cash flow x 12.6 12.3
TTM/PE x 30.7 30.7
Book value ratio x 1.4 1.8
Market Cap Rs m 59717 59714
Dividends per share Rs 6.5 6.5

60
ANALYSIS :-

 The trailing twelve-month earnings per share (EPS) of the company stands at Rs
20.0, an decline from the EPS of Rs 28.5 recorded last year.
 The price to earnings (P/E) ratio, at the current price of Rs 775.5, stands at 30.7
times its trailing twelve months earnings.
 The price to book value (P/BV) ratio at current price levels stands at 1.8 times,
while the price to sales ratio stands at 1.3 times.
 The company's price to cash flow (P/CF) ratio stood at 12.3 times its end-of-year
operating cash flow earnings.

 SOLVENCY RATIO :

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Current Ratio: The company's current ratio improved and stood at 1.5x during FY18,
from 1.7x during FY17. The current ratio measures the company's ability to pay short-term
and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at
1.5x during FY18, from 1.9x during FY17. The interest coverage ratio of a company states
how easily a company can pay its interest expense on outstanding debt. A higher ratio is
preferable.

 PROFITABILITY RATIOS ;

Return on Equity (ROE): The ROE for the company declined and down at 3.6%
during FY18, from 6.7% during FY18. The ROE measures the ability of a firm to generate
profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down
at 6.6% during FY18, from 6.9% during FY17. The ROCE measures the ability of a firm to
generate profits from its total capital (shareholder capital plus debt capital) employed in the
company.

Return on Assets (ROA): The ROA of the company declined and down at 4.8% during
FY18, from 5.1% during FY17. The ROA measures how efficiently the company uses its
assets to generate earnings.

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 CORPORATE GOVERNANCE :-

The Company has complied with the Corporate Governance Code as stipulated under the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

A separate section on Report on Corporate Governance, along with certificate from the
auditors confirming the compliance of conditions of Corporate Governance, is annexed and
forms part of the Annual Report.

 CORPORATE SOCIAL RESPONSIBILITY :-

The purpose of Birla Corporation Limited (BCL) Corporate Social Responsibility


(CSR) Policy is to devise an appropriate strategy and focus for its CSR initiatives and lay
down the broad principles on the basis of which it will fulfill its CSR objectives.

Corporate Social Responsibility (CSR) has evolved during last few decades from
simple philanthropic activities to integrating the interest of the business with that of the
communities in which it operates.

The Company is actively associated with various social and philanthropic activities
undertaken on its own as well as by different Trusts and Societies. As a constructive partner in
the communities in which it operates, the Company has been taking concrete action to realize
its social responsibility objective.

The Company has been playing a pro-active role in the socio-economic growth and
has contributed to all spheres ranging from health, education, empowerment of women, rural
infrastructure development, environment conservation etc.

63
In the past nine decades, the Company has supported innumerable social initiatives in India,
touching the lives of lakhs of people positively by supporting environmental and health-care
projects and social, cultural and educational programs.

CHAPTER 3

LITERATURE REVIEW

We are living in the information era where the information is fast exchanged and new
concepts are re-established and researched. Knowledge is getting doubled in a very short span
of time.

The researcher has to survey the available literature relating to his field of study. The
review of literature guides the researchers for getting better understanding of methodology
used, limitations of various available estimation procedures and data base and lucid
interpretation and reconciliation of the conflicting results.

Besides this the review of empirical studies explores the avenues for future and present
research efforts related with the subject matter. In case of conflicting and unexpected results,
the researcher can take the advantage of knowledge of other researchers simply through the
medium of their published works.

A large number of research studies have been carried out on different aspects of the
working of public and private sector by the researchers, Economists and Academicians in
India.

Different authors have analyzed financial performance in different perspective. A review of


these analyses is important in order to develop an approach that can be employed in the
context of the study of selected Indian Public and Private Sector Manufacturing Enterprises
viz. Steel, cotton and cement.

64
Therefore, the present chapter reviews the various approaches to the study on financial
analysis and performance.

 Singh, K.P. (1981) has found out that the size of the unit has a significant role in the
capital structure of the cement industry. His study has revealed that the returns and
profitability can be increased by increasing the firm size from small too big.

 Tiwari R.S. (1998) has identified the following outcomes. He revealed that the industry
must earn reasonable profits to survive and this will mostly depend on the cost of
production. He also suggested that proper management, effective control and cost
reduction strategies are the most important methods that need to be adopted to improve the
profitability in cement companies.

 Govind Rao and Rao (1999) studied the impact of working capital on profitability in
Indian cement industry. It can be analyzed both positive as well as negative correlations
between working capital related ratios and profitability.

 Rajeswari. N (2000), in her study on liquidity management of Tamil Nadu Cement


Corporation Ltd., Alangulam, identified that the liquidity position of the Tamil Nadu
Cements Corporation Ltd. (TANCEM) was not satisfactory in terms of Quick ratio and
Current ratio. She concluded that necessary steps ought to be taken to improve the
liquidity position of the company.

 Padmaja Manoharan (2002) through the analytical study on “Profitability of Cement


Industry in India” has revealed the variation in profitability of Indian cement companies
depending on age, size and region. The study identified that quality of earning depends on
management and leverage management. Further, the analysis concludes that the
profitability and quality of earnings is influenced by the liquidity factor.

65
 Santany Kumar Ghosh & et al (2003) in this paper, “Utilization of Current Asset and
Operating Profitability and an Empirical Study on Cement in India”. The study concluded
that the degree of current asset in positive associated with the operating profitability of the
firm.

 Haq and Sohail and Zaman and Alam (2011) analyzed The relationship between
Working Capital Management and Profitability: A Case Study of Cement Industry in
Pakistan. In this study to analyzed the relationship between working capital management
and profitability. Researcher selected 14 companies in cement industry in the Khyber
Pakhton khuwa Province (KPK) of Pakistan. The study is totally depend on secondary data
collected from the audited financial statements of these companies which are listed in
Karachi Stock Exchange for the period spaning 2004- 2009. The data was analyzed using
the statistical techniques of correlation coefficient and multiple regression analysis.

 Hajihassani (2012) A Comparison of Financial Performance in Cement Sector in Iran.


This study exhibited comparison of financial performance for the period study 2006 to
2009. It can be analyzed comparison of financial performance of selected cement
companies by using various financial ratios and measures of cement companies working in
Iran. Financial ratios are divided into three categories In this concludes that the
performance of cement companies on the basis of profitability ratios different than on the
basis of liquidity ratio and leverage ratio.

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CHAPTER 4

DATA ANALYSIS, INTERPRETATION AND ANALYSIS

 COMPARATIVE ANALYSIS OF ACC LTD WITH BIRLA CORPORATION LTD

1. COMPARING THE CURRENT VALUATIONS ;-

 The below table depicts the current valuation of price earning ratio (P/E), the basis of
price to book value (P/BV) and dividend yield.

 ACC ltd has higher P/E than Birla cement ltd. This means that ACC ltd investors are
anticipating higher growth in future.

 Traditionally, any value under 1.0 is considered a good P/B value, indicating a
potentially undervalued stock . So, ACC ltd and BIRLA ltd has P/B value more than
1.0 therefore indicating that it is not potentially undervalued stock.

 Dividend yield of ACC ltd is more than that of BIRLA CORP.

TABLE-

CURRENT VALUATIONS

ACC LTD/BIRLA
Particulars ACC LTD BIRLA CORP CORP
P/E (TTM) x 28.0 23.1 121.4%
P/BV x 2.9 1.1 260.8%
Dividend yield % 1.8 1.0 171.1%

67
2. COMPARING THE EQUITY SHARE DATA OF BOTH THE FIRMS:-

PARTICULARS ACC LTD BIRLA CORP ACC LTD/


BIRLA
CORP
Sales per share Rs 703.7 744.6 94.5 %
Earnings per share Rs 49.0 20.0 245.0 %
Cash flow per share Rs 83.1 63.1 131.6 %
Dividends per share Rs 26.00 6.50 400.0 %
Dividend yield % 1.6 0.7 248.1 %
Book value per share Rs 495.6 555.7 89.2 %
Shares outstanding m 188.79 77.01 245.1 %
Bonus/Rights/Conversions - - -
Sales ratio x 2.3 1.3 170.6 %
Avg P/E ratio x 32.5 49.4 65.8 %
P/CF ratio x 19.2 15.6 122.5 %
Book value ratio x 3.2 1.8 180.8 %
Dividend payout % 53.1 32.5 163.3 %
Avg Mkt Cap m 300,610 76,047 395.3 %
No. of employees Rs th 7.4 5.9 125.6 %
Avg.sales/ employee Rs th 17,899.7 9704.1 184.5%

68
Avg.wages/employee Rs th 1,106.7 604.7 183.0%

The above table depicts comparative information of both the firms, therefore we get to
know that ACC ltd is more effective than BIRLA ltd in terms of number of employees,
dividend payout , earnings per share, etc.

A company’s earnings per share is the portion of its profit that is allocated to each
outstanding share of the common stock and like cash flow per share serves as an indicator of a
company’s profitability. In above table ACC ltd has more profitability than BIRLA CORP.

3. COMPARING THE INCOMES :-

The below table has the compared information of the incomes of ACC ltd and BIRLA
CORP ltd.

PARTICULARS ACC LTD BIRLA ACC LTD/


CORP BIRLA CORP
Net sales Rs m 132851 57342 231.7 %
Other Income Rs m 1289 755 170.7 %
Total revenues Rs m 134140 58096 230.9 %
Gross profit Rs m 19124 8066 237.1 %
Depreciation Rs m 6436 3322 193.8 %
Interest Rs m 985 3776 26.1 %

69
Profit before tax Rs m 12991 1723 753.9 %
Minority Interest Rs m 0 0 -
Prior Period Items Rs m 109 0 -
Extraordinary Exp Rs m 0 -125 0.0 %
Tax Rs m 3856 59 6545.8 %
Gross profit margin % 14.4 14.1 102.3 %
Effective tax rate % 29.7 3.4 868.3 %
Net profit margin % 7.0 2.7 259.2 %

It can be clearly seen in the above table that ACC ltd earned income more than BIRLA
CORP.

4. COMPARING THE BALANCE SHEET :-

PARTICULARS ACC LTD BIRLA ACC LTD/


CORP BIRLA CORP
Current assets Rs 56549 24541 230.4 %

70
Current liabilities Rs 47927 15888 301.7 %
Net working cap to sales % 6.5 15.1 43.0 %
Current Ratio X 1.2 1.5 76.4 %
Inventory Days Days 39 44 88.3 %
Debtors Days Days 18 12 150.1 %
Net fixed Assets Rs m 75493 81311 92.8 %
Share capital Rs m 1880 770 244.1 %
‘Free’ reserves Rs m 91679 42028 218.1 %
Net worth Rs m 93559 42798 218.6 %
Long term debt Rs m 0 38298 0.0 %
Total Assets Rs m 148457 110749 134.0 %
Interest coverage x 14.2 1.5 974.1 %
Debt to equity ratio x 0 0.9 0.0 %
Sales to assets ratio x 0.9 0.5 174.8 %
Return on assets % 6.9 4.8 143.6 %
Return on equity % 9.9 3.6 274.7 %
Return on capital % 15.1 6.6 227.2 %
Exports to sales % 0 0.8 0.0 %
Imports to sales % 0 0 -
Exports Rs m NA 478 0.0 %
Imports Rs m NA NA -
Fx inflow Rs m 0 596 0.05%
Fx outflow Rs m 1330 1091 122.0%

The table comparison statement represents that the :-

1. Current ratio-

The current assets exceeds the current liabilities that represents the value of all the assets
that can reasonably expect to be converted into cash. A ratio under 1 indicates that the
company’s debts that will need to be paid in a year or less are greater than its assets. A current

71
ratio less than one would not be concerning if the company has a much higher receivables
turnover than payables turnover.
As ACC LTD has more assets than that of BIRLA CORP, it depicts that the ACC ltd is more
efficient than BIRLA CORP.

2. Return on equity (ROE )-

It is a measure of financial performance calculated by dividing net income by


shareholders' equity. Because shareholders' equity is equal to a company's assets minus its
debt, ROE could be thought of as the return on net assets. BIRLA CORP has low returns than
ACC ltd.

3. Debt/Equity (D/E) Ratio –

It is calculated by dividing a company's total liabilities by its shareholder equity.


The ratios are used to evaluate a company's financial leverage.
The debt/equity ratio is also referred to as a risk or gearing ratio. 0.4 or lower ratios are
considered as better debt ratios, here in the above table ACC ltd has 0 ratio which means Zero
debt means a zero debt-equity ratio
. A negative ratio means negative equity. Although a company could have
negative debt in a logical sense-if it held more debt securities as assets than it had as
liabilities-conventionally we don't count debt assets as negative debt.

4. Sales to assets ratio –

A measure of a company's efficiency in managing its assets in relation to the revenue


generated. The higher this ratio, the smaller the investment required to generate sales revenue
and, therefore, the higher the profitability of the company. Also called total assets turnover.
Here, ACC ltd ratio is more than BIRLA CORP.

5. Net worth -

Net worth is the value of all the non-financial and financial assets owned by an
institutional unit or sector minus the value of all its outstanding liabilities. Net
72
worth can apply to companies, individuals, governments or economic sectors such as the
sector of financial corporations or to entire countries.
However both the company has positive net worth it means that it owns more than it owe.

6. Net fixed assets -


Net Fixed Assets is the purchase price of all fixed assets (Land, buildings,
equipment, machinery, vehicles and leasehold improvements) less accumulated
Depreciation, i.e. effectively property, plant and equipment after depreciation. It is
however defined as Total Assets - Total Current Assets - Total Intangibles &
Goodwill. In above balance sheet comparison, BIRLA CORP has net fixed assets
more than ACC ltd.

Overall comparison says that both the firms are working efficiently in accordance with their
working capital, net sales, etc.

5. CASH FLOW STATEMENT :-

PARTICULARS ACC LTD BIRLA CORP ACC LTD/


BIRLA CORP
From Operations Rs m 15545 8049 193.1 %

From investments Rs m -3796 -2344 161.9 %

From Financial Activity Rs m -4258 -5552 76.7 %

Net Cashflow Rs m 7500 153 4911.8 %

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A cash flow statement, also known as STATEMENT OF CASH FLOWS, is a financial
statement that shows how changes in balance sheet accounts and income affect cash and cash
equivalents, and breaks the analysis down to operating, investing and financing activities.

Essentially, the cash flow statement is concerned with the flow of cash in and out of
the business.

The statement captures both the current operating results and the accompanying
changes in the balance sheet.

As an analytical tool, the statement of cash flows is useful in determining the short-
term viability of a company, particularly its ability to pay bills.

International Accounting Standard 7 (IAS 7) is the International Accounting


Standard that deals with cash flow statements.

The above table represents clearly the changes in the balance sheet and income
statement and comparison of ACC ltd with BIRLA CORP.

SWOT ANALYSIS OF ACC LIMITED:-

STRENGTHS
 It is having a good image and brand loyalty among consumers.

 Service is good.

 They have same price prevailing for wholesale at dealers/stockiest retailers end.

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WEAKNESS

 The competitors are doing much promotional activity rather than ACC Limited that’s
why it is facing more problems in selling of product in the market.

 Lack of awareness program for consumers.

OPPORTUNITY

 Rapid growth is taking place in Bihar and Madhya Pradesh.

 People are opting for more stable structures and intensive use of cement is taking
place, even government is spending heavily on infrastructure projects. Thus, this is the
right time to fully tap these markets.

 As Indian core industry is also growing at rate of nearly 10% per annum, it is having a
good future.

 Foreign direct investment in infrastructure sector going to increase


in coming years, which will increase the demand of cement.

 Roads are undergoing through the transformation process through which the traditional
method of road building will be replaced by modern concrete roads.

THREATS

 Large number of players in cement industry makes it more competitive for ACC to
carefully price its product and at the same time satisfy its dealers and customers.

 Players such as Jaypee Cement, Prism Cement, and Birla Samrat are eating up
considerable market share.

75
 Due to India’s exponential growth many new international cement companies are
expected in coming years which will bring a tide of change and can start price war.

 The emergence of small players in this market may increase the competition and start
the malpractices, and heavy discounts to retailers. They can also influence many
retailers by giving better profit margin, and other Benefits.

SWOT ANALYSIS OF BIRLA CORPORATION :-

STRENGTHS

 It is the only company in India, which manufacture eight types of cement


 Low cost of production.

WEAKNESS

 Effect of global recession on real estate and infrastructure.


 Demand –supply gap, Overcapacity.
 Increasing cost of production.
 High interest rates.

OPPORTUNITIES

 Strong growth of economy in the long run.


 Increase in infrastructure projects.
 Growing middle class.
 Technological changes.
 Increase in Govt spending.
 They have big market in western India.

76
THREATS

 Excess over capacity can hurt margins as well as prices.


 Expected competition new arrivals like Jaypee cement, choromandal king cement.

77
CHAPTER 5
SUGGESTIONS AND CONCLUSION

CONCLUSION

 In order to carry on the business successfully, it is mandatory to have a good


liquidity and solvency position that is to have good short -term financial position and
long -term financial position. It must be noted that a business having good solvency
position does not mean that its liquidity position will also be good and vice versa.

 On the basis of findings it can be concluded that short -term financial position of
ACC ltd cements is better than that of BIRLA corp in the financial year 2017 and
2018, while as the long -term financial position of ACC Ltd. is good enough against
the long -term financial position of BIRLA cements in both the years.

 Hence, ACC Ltd has good long -term financial position and can discharge its all
long -term liabilities without having any negative impact on the functioning of the
business. But the company will face problem while meeting its day to day
expenditures because the liquidity position is not as good as expected.

 On the other hand the short -term financial position of BIRLA corp cement is
excellent and will not face shortage of funds to meet routine expenditures but the
company has weak long -term financial position and may not be able to discharge
its permanent obligations without having the effect on the operations.

78
FINDINGS

 The monthly average share price of ACC Limited showed an increasing trend on an
average till the year 2007-08 whereas the share price witnessed a decline in the year
2008-09. The behavior of share price of ACC Limited is also confirmed by the
standard deviation.

 The coefficient of variation indicates that the highest increase in share price took
place during the year 2005-06 while the lowest variation was found in the monthly
average share price of ACC Limited which showed an increasing trend on an
average till the year 2007-08 whereas the share price witnessed a decline in the year
2008-09.

 The behavior of share price of ACC Limited is also confirmed by the standard
deviation. The co-efficient of variation indicates that the highest increase in share

79
price took place during the year 2005-06 , while the lowest variation was found in
the year 2006-07.

 Money flow index of ACC Limited reveals that the highest money flow was found
during April 2006 and the lowest flow of money took place during April 2003.

SUGGESTIONS

The cement companies in India are facing a lot of difficulties like excess cement
capacity,. inadequate availability of wagons and shortage of coal and other raw materials etc.
The rising cost of input has further adversely affected the profitability of the cement
companies in India.

The following suggestions may be considered by the cement companies to improve


their profitability and to provide better returns to the shareholders in the form of dividend :-

1. Cement companies are suggested to set up a separate research and development word
in the area of production, sales and marketing to avoid mismatch between demand and
supply. This can also reduce the excess capacity of cement in cement companies.

2. Cement companies should concentrate more on quality management at every level of


activity to enhance their performance and this will enable them to supply quality
cement products to the public.

3. Apart from their business motto, cement companies should come forward to sell their
products at an affordable price to the public through public distribution system of the
governmental agencies. This will be helpful for economically downtrodden people in
the societies who are struggling for constructing their own houses.

80
4. To avoid health hazard to the public, environment protection measures should be
taken by the cement companies to control pollution by way of effectively utilizing
their industrial waste like fly ash etc. and also through other measures.

5. In the era of globalization, cement industries need more competitive edge which can
be given by way of modernization, enhancing productivity and manufacturing
excellent quality cement at competitive price. This will reduce imports from foreign
countries and for attaining self-sufficiency.

6. Cement companies can also use alternate fuels, especially bio energy, to fire their
kilns and also use alternative raw materials for cement production .This not only helps
to bring down production cost by cement companies, but also proven effective in
reducing emissions.

7. Government can take necessary steps to setup new cement units to meet out more
demand for cement in the future.

8. The cement companies should concentrate more on ready mix concrete to meet
current demand in construction sector. Ready mix concrete is ready-to-use concrete
blend of cement, sand and aggregate and water mixed in .

9. The basic raw material for manufacturing cement such as lime stones and coal
entailing huge freight cost. The cost-conscious manufacturers have attempted to use
sea route for transportation as a cost – effective method of transportation.

10. Cement companies can solve the problem of shortage of coal (the raw material for the
cement production,) by way of operating their own coal mines. Otherwise, they can
take up coal blocks on lease basis and can operate the mines.

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BIBLIOGRAPHY

 ACC ltd Official site


(http://www.acclimited.com/about)

 ACC Wikipedia
[https://en.wikipedia.org/wiki/ACC_(company)]
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 BIRLA CORPORATION official site (https://www.birlacorporation.com/index.html)

 Annual report of Birla Corporation limited


(https://www.birlacorporation.com/index.html)

 Annual report of Acc cement limited


(http://www.acclimited.com/investor-relations/financial-annual-results)

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