acc ltd - multi-step income statement
DESCRIPTION
Multi Step Income StatementTRANSCRIPT
= ACC Ltd = Multi-Step Income Statement = 2014Total Revenue from Operations
Net Sales Revenue 11,481 Add Other Operating Revenue 257
11,738 Less COGS & Operating Expenses
Cost of material consumed 1,788 Purchase of Traded goods 194 Change in Inventories of finished goods, work-in-progress and stock in trade (11)Employees benefits expense 747 Power and fuel 2,442 Freight and Forward expense 2,598 Depreciation and amortization expense 558 Other expenses 2,491 Less Self Consumption of cement (net of Excise Duty) (18)
10,789 Operating Profit 950
268 Earnings Before Interest & Taxes (EBIT) 1,218
83 Earnings Before Taxes (EBT) 1,135
-33.09Net Income or Profit After Taxes (PAT) 1,168
1
Note:Income statement of Indian companies do not show cost of goods manufactured and operating expenses separately. Instead, they show the individual costs that make up COGS and operating expenses.
I will show you how the two match up.
Suppose there are only three costs that are part of conversion (this can easily be expanded to N number of costs): Manufacturing Employees Cost (MEC) + Manufacturing Depreciation Cost(MDC) + Other Manufacturing Cost (OMC).
Also, suppose there are only three costs that are part of operating expenses (this is easily be expanded to N number of costs): Operating Employees Expenses (OEE) + Operating Depreciation Expense (ODE) + Other Operating Expenses (OOE).
We know of the following identity:Raw Material Consumed + Conversion Cost = Manufacturing costBeginning WIP + Manufacturing Cost = Cost of Goods Manufactured + Ending WIPBeginning FG + COGM = COGAS = COGS + Ending FG
Adding Operating Expense to above, we get:
Note: Beginning WIP - Ending WIP = - Change in WIP; Similarly, Beginning FG - Ending FG = - Change in FG. Plugging this in the above, we obtain:COGS + Operating Expense = RMC + (MEC + OEE, employee costs) + (MDC + ODE, depreciation) + (OMC + OOE, other expenses) - Changes in WIP - Change in FG
Therefore, COGS + Operating Expense = Raw Material Consumed + Employee Costs + Depreciation + Other expenses - Change in WIP & FG.This is the way it shows up on the Income Statement of Indian Companies.
Add Non Operating Income & Gains
Less Interest Expenses
Less Income Tax Expenses
From the above set of equations, COGS = (Beginning WIP + Beginning FG) + RMC + (MEC + MDC + OMC) - (Ending WIP - Ending FG)
COGS + Operating Expense = (Beginning WIP + Beginning FG) + RMC + (MEC + MDC + OMC) - (Ending WIP - Ending FG) + (OEE + ODE + OOE)
Suppose, ACC consumes some of the cements it makes. It uses them in the construction of a new building.It will show the cost of cements self-consumed as a deduction from its COGS+Operating Expense. The same amount will be added to capital work in progress.
Suppose, ACC consumes some of the cements it makes. It uses them in the repairs & maintenance of a building used for sales office.The the cost of cements self-consumed is a deduction from COGS and an addition to Operating Expenses.How does COGS+Operating Expense change? The sum does not change. Therefore, ACC will not report this as a deduction from COGS+Operating Expense.
2013
10,889 261
11,150
1,609 161
7 661
2,376 2,309
574 2,406
(7)10,095
1,055 286
1,341 114
1,227 131.2
1,096 TRUE
Income statement of Indian companies do not show cost of goods manufactured and operating expenses separately. Instead, they show the individual costs that make up COGS and operating expenses.
Suppose there are only three costs that are part of conversion (this can easily be expanded to N number of costs): Manufacturing Employees Cost (MEC) + Manufacturing Depreciation Cost(MDC) + Other Manufacturing Cost (OMC).
Also, suppose there are only three costs that are part of operating expenses (this is easily be expanded to N number of costs): Operating Employees Expenses (OEE) + Operating Depreciation Expense (ODE) + Other Operating Expenses (OOE).
Note: Beginning WIP - Ending WIP = - Change in WIP; Similarly, Beginning FG - Ending FG = - Change in FG. Plugging this in the above, we obtain:COGS + Operating Expense = RMC + (MEC + OEE, employee costs) + (MDC + ODE, depreciation) + (OMC + OOE, other expenses) - Changes in WIP - Change in FG
Therefore, COGS + Operating Expense = Raw Material Consumed + Employee Costs + Depreciation + Other expenses - Change in WIP & FG.
From the above set of equations, COGS = (Beginning WIP + Beginning FG) + RMC + (MEC + MDC + OMC) - (Ending WIP - Ending FG)
COGS + Operating Expense = (Beginning WIP + Beginning FG) + RMC + (MEC + MDC + OMC) - (Ending WIP - Ending FG) + (OEE + ODE + OOE)
Suppose, ACC consumes some of the cements it makes. It uses them in the construction of a new building.It will show the cost of cements self-consumed as a deduction from its COGS+Operating Expense. The same amount will be added to capital work in progress.
Suppose, ACC consumes some of the cements it makes. It uses them in the repairs & maintenance of a building used for sales office.The the cost of cements self-consumed is a deduction from COGS and an addition to Operating Expenses.How does COGS+Operating Expense change? The sum does not change. Therefore, ACC will not report this as a deduction from COGS+Operating Expense.
in Rs.CroreParticulars Note 2014IncomeRevenue from operations (gross) 13108.18Less-Excise duty 1369.97Revenue from operations (net) 21 11738.21Other Income 22 268.28Total Revenue
ExpensesCost of material consumed 23 1788.31Purchase of Traded goods 24 194.33Change in Inventories of finished goods, work-in-progress and s 25 -11.28Employees benefits expense 26 746.59Power and fuel 2441.82Freight and Forward expense 27 2598.33Finance Costs 29 82.76Depreciation and amortization expense 11 557.58Other expenses 28 2490.51
10888.95Self Consumption of cement (net of Excise Duty) -17.66Total Expenses
PROFIT BEFORE TAXTax expensesCurrent tax -262.24Tax adjustements for earlier years (Refer Note-40) 309.23Deffered tax -13.9
Profit for the yearEarning Per Equity Share 30{(Face value of 10 each (Previous year- 10 each)
BasicDiluted
SIGNIFICANT ACCOUNTING POLICIES 2
Statement of Profit and Loss for the year ended December 31st, 2014
in Rs.Crore2013
12471.741322.13
11149.61285.67
12006.49 11435.28
1608.8161.1
6.53661.27
2375.972308.87
113.55573.95
2405.7410215.78
-7.4610871.29 10208.32
1135.2 1226.96
-363.05216.74
15.1133.09 -131.2
1168.29 1095.76
62.23 58.3662.06 58.23
for the year ended December 31st, 2014
NOTES TO THE FINANCIAL STATEMENTS for year ended December 31, 2014
21. REVENUE FROM OPERATIONS
Sale of products Finished goods Traded goodsSale of servicesSale of products and services (gross)less: excise dutySale of products and services (net)Other operating revenueRevenue from operations (net)
i) Details of products soldFinished goods (net of excise duty)CementReady mix concrete Clinker
Traded goodsCementReady mix concrete
ii) Details of sale of servicesPumping and conversion services
iii) Details of other operating revenueProvision no longer required written backSale of surplus generated powerIncentives and subsidiesMiscellaneous incomeTOTAL
22. OTHER INCOME
Interest on bank depositsOther interest incomeInterest on income taxGain on sale of current investments(net of loss on sale of current investment- NIL ( P.Yr. Rs. 2.31 crore)
Dividend from long term investmentsTOTAL
23. COST OF MATERIALS CONSUMED
Opening stockPurchase and incidental expenses
Less: Closing stock
Details of cost of material consumedSlagGypsumFly ashCementAggregatesOthers*TOTAL*includes no item which in value individually accounts for 10 percent or more of the total value cost of materials consumed.
24. PURCHASE OF TRADED GOODS
CementReady mix concrete TOTAL
25. CHANGES IN INVENTORIES OF FINISHED GOODs, WORKS IN PROGRESS AND STOCK IN TRADE
Inventories at the end of the yearStock in tradeFinished goodsworks in progress
Inventories at the beginning of the yearStock in tradeFinished goodsworks in progress
TOTAL
26. EMPLOYEE BENEFIT EXPENSE
Salaries and wagesContributions to provident and other fundsStaff welfare expensesTOTAL
27. FREIGHT AND FORWARDING EXPENSE
On clinker transferOn finished productTOTAL
28. OTHER EXPENSES
Consumption of stores and spares parts Consumption of packing materialsExcise duty (refer notes ii & iii)RentRates and taxesRepairs to building Repairs to machineryRepairs to other itemsInsuranceRoyalty on mineralsDiscount on salesAdvertisementTechnology and know how feesMiscellaneous expenses (refer notes i & iv)TOTALi) Payment to statutory auditors (excluding service tax)As auditors audit fees audit fees for tax financial statements out of pocket expenses In other matters- certificationTOTAL
ii) Includes excise duty related to the difference between the closing stock and opening stockiii) Includes excise duty on captive consumption of Clinker- Nil (P.Yr. - Rs. 6.58 crore)iv) Miscellaneous expenses includes:a) Loss on sale/ write off and impairment of fixed assets (net) - Rs. 15.88 crore (P.Yr. - Rs. 15.78 crore)b) Provision for other than temporary diminution in long term investment of Rs. 4.13 crorec) Investments written off of Rs. 0.69 crore (P.Yr. NIL)
29. FINANCE COSTS
Interest expensesInterest on income taxTOTAL
30. EARNINGS PER SHARE (EPS)
Net profit as per Statement of Profit and LossWeighted average number of equity shares for Earnings Per Share computationShares for basic earnings per shareAdd: Potential diluted equity shares on account of shares in abeyance(Movement in number of shares is on account of change in fair value of share)
Earnings per shareFace value per shareBasicDiluted
21. REVENUE FROM OPERATIONS2014 (crore) 2013 (crore)
12626.88 12012.23204.17 182.7
19.97 16.2812851.02 12211.21
1369.97 1322.1311481.05 10889.08
257.16 260.5311738.21 11149.61
10574.8 10111.76664.75 544.58
17.36 33.7611256.91 10690.1
128.12 87.6576.05 95.05
204.17 182.7
19.97 16.2819.97 16.28
45.85 13.920.9 4.36
96.92 140.73113.49 101.52257.16 260.53
22. OTHER INCOME2014 (crore) 2013 (crore)
117.41 148.7710.41 3.3389.15 67.5141.45 59.47
9.86 6.59268.28 285.67
23. COST OF MATERIALS CONSUMED2014 (crore) 2013 (crore)
132.9 156.411794.48 1585.291927.38 1741.7
139.07 132.91788.31 1608.8
2014 (crore) 2013 (crore)284.19 331.54362.59 337.73346.55 310.7
91.51 61.49114.34 96.49589.13 470.85
1788.31 1608.8*includes no item which in value individually accounts for 10 percent or more of the total value cost of materials consumed.
24. PURCHASE OF TRADED GOODS2014 (crore) 2013 (crore)
121.91 68.672.42 92.5
194.33 161.1
25. CHANGES IN INVENTORIES OF FINISHED GOODs, WORKS IN PROGRESS AND STOCK IN TRADE
2014 (crore) 2013 (crore)
0.37 0.49 0.12153.75 129.82 -23.93240.32 252.85 12.53394.44 383.16 -11.28
0.49 0.29 -0.2129.82 160.54 30.72252.85 228.86 -23.99383.16 389.69 6.53-11.28 6.53000000000003
26. EMPLOYEE BENEFIT EXPENSE2014 (crore) 2013 (crore)
(increase)/ decrease in stock
629.46 57274.93 52.89
42.2 36.38746.59 661.27
27. FREIGHT AND FORWARDING EXPENSE2014 (crore) 2013 (crore)
393.81 277.522204.52 2031.352598.33 2308.87
28. OTHER EXPENSES2014 (crore) 2013 (crore)
361.99 375.49483.67 434.15
4.37 6.4733.83 30.51
141.13 120.134.61 7.2
140.78 134.3326.15 19.9124.62 25.29
129.82 118.2893.27 88.28
106.82 116.07112.91 107.66826.54 821.97
2490.51 2405.74
3.11 2.720.53 0.590.12 0.120.01 0.113.77 3.54
ii) Includes excise duty related to the difference between the closing stock and opening stockiii) Includes excise duty on captive consumption of Clinker- Nil (P.Yr. - Rs. 6.58 crore)
a) Loss on sale/ write off and impairment of fixed assets (net) - Rs. 15.88 crore (P.Yr. - Rs. 15.78 crore)b) Provision for other than temporary diminution in long term investment of Rs. 4.13 crore
29. FINANCE COSTS2014 (crore) 2013 (crore)
48.7 51.6734.06 61.8882.76 113.55
30. EARNINGS PER SHARE (EPS)2014 (crore) 2013 (crore)
1168.29 1095.76
187745356 187745356492243 445714
188237599 188191070
10 1062.23 58.3662.06 58.23