FINANCIAL ACCOUNTING

2012

RATIO ANALYSISAttock Cement

Shahzeb Pirzada

5701

Submitted to,

Arsalan Hashmi

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ATTOCK CEMENT

PROFILE

Attock Cement Pakistan Limited (ACPL) is a public limited company, listed on the Karachi Stock Exchange since June 2002. Main business of the company is manufacturing and sales of cement. ACPL is part of the Pharaon Group, which in addition to investment in cement industry has diversified stakes in Pakistan mainly in the oil and gas sector, power and real estate sector.

CORPORATE PROFILE

ACPL is a member of Pharaon Group of Companies operating in Pakistan. ACPL's project was conceived in 1981. The project is a Pak-Saudi venture and has involved an initial capital outlay of around Rs.1.5 billion with a foreign exchange component of around US$ 45 million. ACPL's manufacturing plant is located in Tehsil Hub, District Lasbela, Balauchistan, at a distance of about 45 kilometers north west of Karachi. ACPL has attained ISO 9001:2000 and ISO 14000 certifications from Lloyds Register Quality Assurance (LRQA) in 2002 and 2006. ACPL is making substantial contribution to the country's economy and deposited over Rs.2, 646 million (US$ 31.5 million) in the form of Excise Duty, Sales Tax, Royalty and Income Tax during the year 2008-2009.

The Plant's original capacity was 2000 TPD of Clinker and it was the first plant in the country to be based on the latest SUSPENSION, PRE-HEATER/PRE-CALCINATION, dry process technology which results in substantial savings in fuel and energy costs besides balanced plant operations.

With continuous growth in cement demand both in local and regional markets, the company put up another line of 3,300 TPD of clinker in 2006-2007 at a total investment of US $ 61 million. With this additional line the total clinker capacity of the company has reached 1,710,000 MT of clinker per annum.

“The cement manufactured and being marketed under the “FALCON” brand is of the highest standard and truly the market leader.”

GROUP PROFILE

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Pharaon Group's sponsor is Dr. Ghaith R. Pharaon, International Investor and Industrialist who, apart from his financial and trading interests in other parts of the world, has substantial investments in Pakistan over the past several years through Pharaon group of companies in the Cement, Oil and Gas sectors. A competent, motivated and commited team of highly skilled and experienced professionals manages Pharaon Group Companies. Following is the overview of the group companies headed by the Pharaon group:

Products:

The main product of the Company is ORDINARY PORTLAND CEMENT (OPC) but in addition to this ACPL also produces SULPHATE RESISTANT CEMENT (SRC) and PORTLAND BLAST FURNACE CEMENT (PBFC), which sells under the registered brand name of “FALCON CEMENT” in themarket. The SRC is special cement, which is resistant to attack of sulphate salts, which are present in the soil in the coastal and other saline areas. The PBFC is also mildly resistant to sulphate attack, but their important characteristic is low heat of hydration. It is used where massive concrete is involved.

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Vision:

To be the leading organization, continuously providing high quality cement, excelling in every aspect of its business and to remain the market leader in the cement industry.

Mission:

To be a premier and reputable cement manufacturing company dedicated to become industry leader by producing quality products, providing excellent services, enhancing customer satisfaction and maximizing shareholder's value through professionalism and dedicated team work.

CORPORATE SOCIAL RESPONSIBILITY

The Company continued to strongly support the uplift of the local community, as they are an integral part of it. Basic education facilities, medical treatment and availability of clean drinking water to the masses are the few top priorities of the Company. Presently, we are successfully running a school in Sakran where children of workers and nearby villages are getting free education. Moreover, with the cooperation of local administration, we are planning to upgrade the existing school in Hub, having all required facilities. Sensing the dire need for availability of medical facilities for the deserving, the Company regularly arranges free medical camps for the locality where treatment and medication is provided free of cost. During the year three medical camps were arranged where nearby villagers and Company workers' families were given free treatment. Additionally, the Company embarked upon and awareness program me on Hepatitis ‘B' & ‘C' for the local residents of nearby Goths. The Company provides transport in emergency and financial help to the downtrodden nearby villagers on a regular basis.

The Company currently operates a Primary level school that imparts education to children of both plant employees and also those from neighboring villages.

The Company has also signed a Memorandum of Understanding with The Citizen Foundation (TCF) a non-profit organization for the construction of TCF primary and secondary school located near to factory premises, which is close proximity to the surrounding villages. The total cost of this project would be around Rs. 40 million. This school would comprise of 2 units primary portion and 2 units secondary portion. The structure of the primary school bubeen completed and the progress of the project is on track as per the schedule. The school would commence its academic activities from April 2010. With the completion of this school atleast 1000 children of this area will get quality education

CALCULATION FORMULAE:

1) Account Receivable Turnover:

2) Working Capital:

3) Current Ratios:

The Company currently operates a Primary level school that imparts education to children of both plant employees and also those from neighboring villages.

The Company has also signed a Memorandum of Understanding with The Citizen Foundation profit organization for the construction of TCF primary and secondary school

ctory premises, which is close proximity to the surrounding villages. The total cost of this project would be around Rs. 40 million. This school would comprise of 2 units primary portion and 2 units secondary portion. The structure of the primary school bubeen completed and the progress of the project is on track as per the schedule. The school would commence its academic activities from April 2010. With the completion of this school atleast 1000 children of this area will get quality education free of cost.

CALCULATION FORMULAE:

Account Receivable Turnover:

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The Company currently operates a Primary level school that imparts education to children of

The Company has also signed a Memorandum of Understanding with The Citizen Foundation profit organization for the construction of TCF primary and secondary school

ctory premises, which is close proximity to the surrounding villages. The total cost of this project would be around Rs. 40 million. This school would comprise of 2 units primary portion and 2 units secondary portion. The structure of the primary school building has been completed and the progress of the project is on track as per the schedule. The school would commence its academic activities from April 2010. With the completion of this school at-

4) Quick Ratio:

5) Return Of Equity:

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ATTOCK CEMENTYear 2004

Year 2005

Year 2006

Year 2007

Year 2008

18 Sales 3731994 5351341 4614728 14120847 1660841319 Cost of Sales 3210524 4810589 4104409 12776676 1504464020 Operating Expenses 232161 253205 279191 -445270 -58083021 Interest Expenses 86967 300830 183130 -68050 -26933722 Other Expenses 121386 173293 102501 -63399 -6077223 Other Income 29127 44306 61843 171513 15068124 Taxes 83085 32446 23845 -308509 -24992425 Net Income 126998 -109824 -16505 630456 553591

1 Cash 78975 146292 100579 1432363 9196232 Inventory 1012679 725690 1051835 1567530 15809253 Receivable 32047 29200 26200 343704 2835524 Other Current Assets 801123 1161318 1111784 822314 15806865 Total Current Assets[ Sum of 1+2+3+4] 1924824 2062500 2290398 4165911 43647866 Fixed Assets 1468575 1903739 1718818 1925417 36718597 Total Assets [Sum of 5+6] 3393399 3966239 4009216 6091328 80366458 Account Payables 708207 754365 701231 2347211 27709669 Current Maturity of Long Term Liabilities 122950 255801 246422 231981 465829

10 Other Current Liabilities 637671 1373166 1301899 304366 15527511 Total Current liabilities [Sum of 8+9+10] 1468828 2383332 2249552 2883558 339207012 Long Term Liabilities 629274 470563 537496 1129537 166875413 Number of Shares 750000 750000 750000 40000014 Share Capital 597713 597713 597713 255460 41129115 Retained Earnings 697584 514631 624455 1822773 256453016 Total Book Equity [Sum of 14+15] 1295297 1112344 1222168 2078233 297582117 Total Liabilities + Owners' Equity [Sum of 11+12+16] 3393399 3966239 4009216 6091328 8036645

ATTOCK CEMENT RATIOS26 Quick Ratio 0.62 5.6 0.55 0.82 0.727 Current Ratio 1.31 0.86 1.018 1.44 1.29

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28 Working Capital 455996 -320832 1759664 1282353 97271629 Net Cash Flows From Operations30 Account Receivable Turnover 116.45 183.26 176.13 41.08 58.5731 Inventory Turnover 0.3 6.62 3.9 8.15 9.5132 Free Cash Flows33 Debt / Equity 0.61 0.17 0.69 2.11 2.3634 Times Interest Earned35 Gross Margin 0.139 0.1 0.11 0.095 0.09436 Operating Margin 0.062 0.047 0.06 0.031 0.03437 Net Margin 0.034 -0.02 -0.0035 0.044 0.03338 Earnings Per Share39 Return on Assets40 Return on Equity 1.018 7.6 7.1 3.3 4.7

RATIOS

CURRENT RATIO OF ATTOCK CEMENT IS INCREASING THAT CURRENT ASSETS OF COMPANY IS INCREASING WHEREAS CURRENT LIABILITIES ARE DECREASING.

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1.6

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Current Ratio

Current Ratio

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WORKING CAPITAL SHOWS THE EXCESS CURRENT ASSETS OVER CURRENT LIABILTIES ANDACCORDING TO RATIO THE ASSETS ARE IN EXCESS OVER LIABILITIES.

THE DEBT/EQUITY RATIO IS INDICATING THAT ATTOCK CEMENT HAVE MORE EQUITY AS COMPARE TO DEBTS.

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500000

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Working Capital

Working Capital

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Debt / Equity

Debt / Equity

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ACCOUNT RECEIVABLE TURNOVER WAS HIGHER IN 2OO4-06 THEN IT WAS DECREASED IN 2007 AND 2008.

INVENTORY TURNOVER IS INCREASING IN ATTOCK CEMENT SHOWING THAT COMPANY SELLINQ QUANTITY IS INCREASING PER YEAR EXCLUDING YEAR 2006.

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Account Receivable Turnover

Account Receivable Turnover

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10

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Inventory Turnover

Inventory Turnover