Binani Cement

A PROJECT REPORT

On Financial Analysis of “Binani Cement Ltd”

Submitted to

Mrs.Neha S.Shukla.Faculty member, Nootan sarva vidhalaya kelavani

Mandal sanchalit MBA College, visnagar.

On December 10, 2010

In Partial Fulfillment of the requirements for the “Financial Accounting for Management” course in

MBA Programme 2010-12.

Group No:

Submitted by:

Bharat Prajapati -90 Pradip Prajapati - 95

Rahul Varsadiya -115 Aniket Patel -121

NSVKMS MBA COLLEGE, VISNAGAR. 1

PREFACE

This Project Report has been prepared in partial fulfillment of the requirement for the Subject: Practical Studies of the MBA Programmed in the academic year 2010-11.

This project repoet speaks about the research done for the binanicement Ltd. And divideds into three sections

General information Financial analysis Ratio analysis

All the three section take as stepwise from the

present and finding to the future the recommendation rest on the basis of research work done to ratio various graphs frequency table act. Have been added further this analysis tries to bring fore how Binanicement can grab to opportunity owing to it’s manufacturing and quality that is renowned foe through this report we summarize that we have strived to perfect ourselves in best possible manner to report our research systematically and ethically we would to be thankful for the feedback to enable research important on the most unprecedented king.

Date: 3 Jan 2011, Place: Visnagar,

Bharat Prajapati -90

Pradip Prajapati -95 Rahul Varsadiya -115

Aniket Patel - 121

ACKNOWIEDGEMENT


We have this opportunity to convey our gratitude to Dr. J.A.Shetti [Prof&Hod] NSVKMS MBA College of visnagar for providing faculties enabling us to preface this project report We sincerely express our most humble thank to our faculty member Mrs. Neha S.Shukla for assigning us this project work We are thankful for the continuous supported timely suggestion and encouragement thought out the project and for widening the horizons our thinking

Last but not the least we would like to convey our thank to all those who have helped us in preparing this project

Date: 3 Jan 2011, Place: Visnagar,

Bharat Prajapati -90 Pradip Prajapati - 95

Rahul Varsadiya -115 Aniket Patel -121

EXECUTIVE SUMMARY The Project is to find out the financial analysis and ratio analysis for edible cement products of Binanicement


Ltd. As a fulfillment of the MBA program is carried out of in the year 2010-11.

The project report distribution into three portions.

Introduction of Company Profile of the Company History of the company Mission of the company Marketing Strategy of the Company

FINANCIAL ANALYSIS Tread analysis Vertical Analysis [Common Size] Horizontal Analysis

RATIO ANALYSIS Profitability ratios Turnover Ratios Liquidity Ratios Leverage Ratios

FUTURE OUTLOOK

Growth in domestic cement demand is expected to remain strong, given the revival in the housing sector, continued Government spending on the rural infrastructure and gradual increase in the number of infrastructure projects being executed by the private sector. The trend in demand growth seen during the last five years is expected to continue over the medium term. Further,

with Government targeting 8-10% GDP growth rate, cement demand should grow at 9-10% over the next few years.

The key drivers of Cement Industry in India are Buoyant real estate market in non metro cities.


Increase in infrastructure spending on power, road, port and urban infrastructure. Increase in rural demand driven by National Rural Employment Guarantee Scheme (NREGS) Low-cost housing in urban and rural areas under schemes like Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and Indira Aawas Yojana Favorable interest rates and tax benefits on housing. Domestic Industrial growth and major expansion plans announced across different segments.

TABLE OF CONTENTS

Sr no. Particuiars Page

No. Preface Acknowledgement


Executive Summary

Ch-1 GENERAL INFORMATION1.1 Profile the company1.2 Mission of the company1.3 Leadership1.4 Global Presence1.5 Marketing Strategy Of Company

Ch-2 FINANCIAL ANALYSIS2.1 Balance sheet2.2 Profit&Loss A/c2.3 Commensize statement2.4 Trade Analysis2.5 Cashfiow Statement

Ch-3 RATIO ANALYSIS3.1 Profitibility ratios3.2 Liquidity ratios3.3 Turnover ratios3.4 Livrage ratios

4 Overall analysis5 Conclusion and Summary6 Recommendations7 Biblography8 Annexure


THE PROFILE OF COMPANY BINANI CEMENT LIMITED

Executives Of The Company

S.No NameDesignation


1 Mr. Shishir Jain Alternate Director

2 Mr. Braj Binani Chairman3 Ms. Nidhi Binani Director4 Mr. Sanjai Vohra Director5 Mr. V Subramanian Director6 Dr. V C Shah Director7 Mr. S Padmakumar Director8 Mr. M K Chattopadhyaya Director9 Mr. Ramakrishna Moogimane Director

10 Mr. P Acharya Director

(Subsidiary of Binani Industries Limited)

Registered Office706 Om Tower, 32, Chowringhee Road, Kolkata, West Bengal - 700071Tel: 22882508, 22882509, Fax: 22882510, Email: [email protected] Website: www.binani.com

Registrar & Share Transfer AgentIntime Spectrum Registry Ltd. C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup (W),Mumbai - 400078, Maharashtra.Tel: 25960320

Directors Of The Company

S.No Name Designation

1 Mr. R S Bhati Dy. GM (Mech.) & Unit Head, CGU

2 Mr. R S Joshi Exe. Vice President3 Mr. R K Ghia Vice President (Technical)4 Mr. Digvijay Singh Vice President (Marketing)


mailto:[email protected]

http://www.binani.com/

5 Mr. Darshan Lal Operatoin6 Mr. Kauslesh Maheshwari Vice President (Marketing)7 Mr. B M Khara Vice President (Marketing)8 Mr. M K Chattopadhyaya Chief Financial Officer9 Mr. Krishan Goenka Exe. Vice President

10 Mr. Mahendra Mehta Exe. Vice President11 Mr. K K Jain Asst. VP (Accounts)12 Mr. S L Parakh Sr. Vice President (CPP)

Auditors

M/s. Deloitte Haskins & SellsM/s Kanu Joshi Associates

Bankers

Punjab National BankDena BankOriental Bank of CommerceState Bank of IndoreJammu & Kashmir Bank LimitedAudit CommitteeMr. S. PadmakumarDr. V.C. ShahMr. V. SubramanianMr. Sushil Bhatte

Various Company Locations

Sr.no. Location type Address

1 Sales & Marketing Office

703 - 704 Sakar 2 Ellisbridge Ahmedabad , Gujarat - IndiaPin Code :380006Fax


212 -3 Somdutt Chambers 2 9 Bhikaji Cama Place Delhi , Delhi - India


Pin Code :110066Fax :,


D-35/A, Subhash Marg,C Schem, Jaipur , Rajasthan - IndiaPin Code :302001Fax :,

4 Registered Office

706 Om Tower, 32 Chowringhee Road Kolkata , West Bengal - IndiaPin Code :700071Phone :22882508,22882509,,Fax :22882510,

5 Factory/plantVillage: Sirohi, Taluka: Neem Ka Thana Dist. Sikar Sikar , Rajasthan - IndiaPin Code :

6 Branch Office Mercantile Chambers 12 Mumbai , Maharashtra - IndiaPin Code :400001Phone :22690506 - 10,22640040 - 44,,Fax :91 22 22690003,

History


‘

Binani’ is now consolidating on its enviable track record, with over one and a quarter entry of success behind it.In 1967, ‘Binani’ crossed a milestone in the world zinc industry by pioneering the manufacture of high-grade electrolytic zinc in India. The reigns of this expanding business was held by Late Ghanshyam Binani, the only son of Seth Govardhandas Binani. His individual expertise and time-honed skills steered the organization towards many more milestones.

In the span of 1970s-80s Cominco Binani Zinc Ltd. upgraded its technology to be at par with the latest in the world. It also became the first plant in the country to commence production of special high-grade electrolytic By 1991, the company, having surged to a production capacity of 38,000 tones per annum of zinc and zinc based products, was re-christened as Binani Zinc Ltd. In 1997, the company diversified into the manufacture of cement by establishing Binani Cement Ltd. This pivotal move laid the foundation for the company’s most successful decade. One that also saw the company diversify into the manufacture of glass fiber. The mantle of responsibility passed on to Mr. Braj Binani, who following the footsteps of his father, Late Ghanshyam Binani, has successfully carried forward the family tradition of growth and excellence, and is today heading the ‘Binani – Braj Binani Group’.

Mission Forge ahead as a world-class organization in the core sector industry in India and abroad.

Explore opportunities and enhance stakeholder value through ethical practices.

Relentlessly pursue the global movement for a ‘customer-driven, quality-oriented, socially-conscious’ industrial corporation.


Adopt, adapt, assimilate and integrate technologies from global giants, thereby offering value-added products and services.

Adhere to the highest standards in manufacturing; over and above stringent environmental stipulations.

Pursue research and development activities diligently, consolidating on its track record of innovation and breakthroughs in manufacturing practices on a state-of-the-art technology platform.

Leadership

The Binani Group has a board comprising of eminent individuals from diverse fields. Headed by Mr. Braj Binani, it acts with independence in exercising strategic supervision, discharging its fiduciary responsibilities with


professionalism. The board acts as the standard-bearer for the company, ensuring that the management observes the highest standards of ethics, transparency and governance.

MilestonesAn enviable track record... spread over six decades.

1940s • Binani Metal Works Limited founded on 25th of February, 1941 near Howrah, in Kolkata by the Founder Chairman Late Seth Govardhandas Binani• The company entered into collaboration with Metal Distributors Limited and its trading activities in India expanded and grew strong.

1950s• Binani’s sets up its establishments in London, UK, for international trading, indenting of non-ferrous metals, investments, leasing and other activities.• The company went public for the first time in 1953.• Binani earned recognition as the largest importer and distributor of non-ferrous metals in the country.

1990s• Cominco Limited carted off its financial support from its operations in alignment with their world policy, Cominco Binani Zinc was re-christened as Binani Zinc Limited on 3rd March 1991.• Diversification was necessary for growth and hence two sectors were identified - Glass Fiber and Cement • Two Public Issues, one in February 1994 and the other in February 1995, were undertaken to raise funds for the implementation of new projects. Both the issues were oversubscribed.• The company was re-christened as Binani Industries Limited in 1996 reflecting its status as a multi-divisional, multi-product and multi-locational company driven by technology and professionalism.• Binani Zinc Limited received an ISO 14001 and an ISO 9001:2000 Certification from Bureau Veritas Quality


International for their Environment Management System and Quality Management System respectively• Binani Zinc Limited adopted the '5s' housekeeping management practice and tagged it with the international accreditation ISO 14001:1996. In April 2001, voluntary commitment to quality was demonstrated by getting the international accreditation on quality ISO 9001:2000. Leveraging people potential, Binani Zinc Limited became the first company in the manufacturing sector to go for international accreditation.

Global Presence

Binani, Dubai

The Binani Cement Factory LLC, established in 1996 in Dubai, is strategically located at the Jebel Ali Industrial Area, close to the Ports and in the construction hub of the area. BCFLLC has exhibited steady growth in the manufacturing / grinding of slag and clinker to produce high quality Ordinary Portland Cement (OPC) and Ground Granulated Blast Furnace Slag (GGBFS) for the UAE market. In 2006, on the back of growing demand, the capacity of the plant was increased from 0.5 Million Tonnes to 1 Million Tonnes of OPC and GGBFS, and in 2008 clinker grinding capacity was increased to 1.2 Million Tonnes per Annum.

Binani, Shanghai

The Braj Binani Group has acquired a 70% stake with management control of an operational, 2 year old


clinker plant (with grinding capacity under construction) in the Shandong Province of North China, in close proximity of two ports. The Chinese partner holds 30% stake of the plant, which has a current production capacity of 400,000 tonnes of clinker and will grind 300,000 tonnes of cement annually. The clinker capacity will be upgraded to 500,000 tonnes by the end of 2008. It is currently running at 100% capacity and exports its products to the UAE. It will also sell a small quantity of cement domestically.Subsidiaries

Binani Cement‘For Generations to come’Binani Cement has been working in this core sector from 1997. Binani cement Growing from strength to strength to become a leading cement manufacturer in Northern India. By employing cutting-edge technologies and world-class manufacturing practices.

Binani Cement has established itself as one of the top companies in the industry in terms of efficiency and performance. What’s more, constant improvement of


operating efficiency and cement quality has worked to improve profitability for the company and has ideally placed it to take advantage of growing markets. Always keeping true to its core promise: ‘for generations to come’ Its fully integrated cement plant, strategically located in Binanigram, Sirohi, Rajasthan with its own captive limestone mines, abundant reserves of limestone and captive power plant currently has a capacity of 5.3 mtpa.

Cement Plant


Focus on the core attributes of quality, strength and reliability of the end product has paid rich dividends and has seen the brand ‘Binani’ growing in prominence and stature. This, aided by the company’s widespread distribution network, has led to significant expansion of its market share in Rajasthan, Gujarat and other crucial markets in North India.

AccreditationIn 2008, the plant capacity, through expansion and by de-bottlenecking, is set to more than double to 5.3 mtpa to meet ever-increasing demand and achieve cost efficiencies. To ensure a healthy environment, pollution control devices like reverse air bag house with fiber bags, electrostatic precipitators and other dust collectors has been installed .

Binani Cement Limited made a noteworthy improvement in the production costs, along with power and coal consumption for which it has won a 'National Award for Energy Consumption' in 1999-2000 Binani Cement Limited received the National Award for its excellence in 'Thermal Energy Performance' for two consecutive years 1999, 2000.

Binani Cement Limited received ISO 9002 and ISO 14001 Certification from KPMG in January 1999 and October 1999 respectively.

Amli Limestone Mine at the Binani Cement Limited bags the first place for the 'Mines Award' at the Mines Environment and Mineral Conservation Week in 2000, organised by the Controller of Mines (NZ) and the Indian Bureau of Mines, Ajmer 2002-2008.

During the 30th Mines Safety Week organised by Directorate of Mines, Udaipur, the mines bagged best overall performance shield for the year 2006. Besides this, Amli and Thandiberi Mines also won several other prizes. During the 17th Mines Environment and Mineral Conservation Week, the mines won 10 prizes including the


most prestigious and coveted prize for overall performance.

At the 5th chapter conventions of quality circles, the company’s Pragati Quality Circle bagged the Excellent Award and Amar Jyoti Quality Circle got the Distinguished AwardThe company has also been awarded the ‘Certificate of Merit’ and ‘Commendation Certificates’ by Hon’ble Minister of Power, Government of India for energy conservation in the Cement Industries for the year 2006.

Products Binani Cement offers a mixture with high workability, compressive strength and consistent quality.structure.

Binani Cement Ltd. produces cement of two grades:

Grade 43 Grade 53PPC (Portland Pozzolana Cement)

Social Commitments

The Braj Binani Group is a multifaceted organization in the truest sense of the word. This philanthropic philosophy has seen it promoting several schools, colleges, libraries, educational institutes and noteworthy institutions throughout the country.

The Group’s Social InitiativesInstituted an award through the National Metallurgical Institute for outstanding achievement in this field.Ghanshyam Binani Foundation (the Binani charitable body) periodically conducts free eye camps, offers


donations and provides scholarships to the underprivileged..Distribution ChannelsThe Company has a large and wide spread distribution network of 1740 dealers and 41 MOs in the states of Rajasthan, Gujarat, Delhi, Haryana, parts of Uttar Pradesh and Punjab.

Markets DealersRajasthan 632Gujarat 527Haryana 256Delhi 93Punjab 113Uttar Pradesh and 119Marketing Strategy Of CompanyExpand Capacity to meet additional Demand in North India North India, the Company’s key market, is in a positive phase with regional demand exceeding regional supply. The demand supply situation is further expected to improve from the perspective of the cement manufacturers, with demand on the one hand continuing to grow at 7-8% CAGR, and on the other hand no new kilns are expected to come up before December 2006. Even considering that at least 3-4 MT of cement capacity may be added in the next 3 years, the demand is still expected to outstrip its supply. Also, the chances of a spillover from the coastal Gujarat suppliers are limited as the demand from the Middle East countries is expected to continue to absorb the excess production from the western part of India. To take advantage of the favorable demand supply scenario in the Company’s key markets, it is increasing its clinker capacity by about 2.3 MTPA and adding another 40 MW captive power plant at its existing Sirohi facility.

Developing the Company’s product mix and enhancing productsThe Company’s production mix in the year ended March 31, 2005 were 29% PPC and 71% ordinary cement, compared to 22% and 78% in the year ended March 31, 2004. Through its marketing efforts, the Company intends


to continue to develop customer awareness and acceptance of its blended products which has lower production costs and offer higher margins than the ordinary cement products. In addition, it intends to further enhance the quantum of the blended products towards a mix of 60% PPC and 40% OPC.

Increasing promotion of the qualities of Company’s product and brand

strategy. On account of superior quality of its product the Company’s advertising is limited to wall paintings and hoardings thus reducing its promotional and advertising expenses. Direct promotional efforts to reach out to contractors and builders are done by the MOs, supported by the sales and marketing team of the Company.

Increase in distribution and sales networkThe Company’s products are currently marketed through a widespread distribution network comprising 1,740 dealers who in turn sell the product to end users such as contractors, retailers, etc. The Company does not market its products directly to institutions as this is a less profitable segment. It continues to focus on building a dedicated and motivated dealer network spread across all the States of Northern India. Quality products backed with transparent dealer policies and efficient services have helped the Company to build up a network of loyal dealers; around 70%-75% of the total network is exclusively dealing in Company’s products. The Company’s strategy is to saturate the markets which are close to the plant where it enjoys a relative freight advantage. The Company monitors the activities of its competitors and take proactive steps to ensure healthy market shares in its preferred markets. Below is the Company’s the latest distribution pattern of total sales to different markets with its market share.

State Rajasthan Gujarat Haryana Delhi Punjab

Distributio 46% 28% 12% 4% 4%


nMarket Share 13.4% 7.6% 5.7% 2.8% 1.5%Rank 3 7 6 12 12

Reducing power and fuel costs

The new power plant and the kiln at the Company’s expanded facility permits the use of alternative fuels in the manufacturing process. The Company expects to be in a position to utilize lignite, pet coke and agro waste as a fuel in the power plant and the kiln. The Company expects this will reduce the Company’s dependence on imported coal as a fuel.

Developing the Company’s product mix and enhancing productsThe Company’s production mix in the year ended March 31, 2006 was 37% PPC and 63% OPC, compared to 29% and 71% in the year ended March 31, 2005. For the six months ended September 30, 2006, the mix of PPC:OPC was 43:57. In addition, it intends to further enhance the quantum of the PPC towards a mix of 60% PPC and 40% OPC. This is to cater to the increased demand for PPC in the Indian cement markets.

Increasing the promotion of the Company’s brandTo promote the Company’s products and its brand ‘Binani’, with dealers who are the customers of the Company, the Company organizes seminars, workshops and conferences where it educates its dealers/customers about the strengths of its product. Annually, it also organizes a MOs meet where dealers and MOs from all over the country are invited and based on their feedback of the Company further fine-tunes its marketing strategy. The Company also intends to undertake advertising and promotional campaigns in select markets such as


Rajasthan and Gujarat to increase the brand awareness and enhance the understanding of the Company’s products. Direct promotional efforts to reach out to contractor and builders are done by the MOs, supported by the sales and marketing team of the Company.


Profit&Loss account Rs in cr. Mar ' 10 Mar ' 09 Mar ' 08 Mar' 07 Mar ' 06Income : Operating Income 963.04 678.43 490.28 438.80 374.99Expenditure Material Consumed 73.65 85.21 75.80 70.76 46.84Manufacturing Expenses 267.95 163.32 158.45 146.91 119.30Personnel Expenses 25.50 18.78 15.09 13.56 13.19Selling Expenses 231.67 162.57 90.98 87.99 0.00Adminstrative Expenses 23.47 14.59 15.65 13.85 98.00Expenses Capitalised 0.00 0.00 0.00 0.00 0.00Cost Of Sales 622.23 444.47 355.97 333.07 277.33Operating Profit 340.80 233.96 134.31 105.73 97.66Other Recurring Income 6.78 2.76 3.27 0.78 4.12Adjusted PBDIT 347.59 236.72 137.58 106.51 101.78Financial Expenses 46.47 32.62 34.17 52.35 56.02

Depreciation 55.67 43.46 42.91 42.00 41.28Other Write offs 0.00 0.00 0.00 0.00 0.00 Adjusted PBT 245.45 160.64 60.50 12.15 4.48Tax Charges 69.02 60.96 5.12 0.55 0.34Adjusted PAT 176.43 99.68 55.38 11.60 4.13Non Recurring Items -0.61 -4.07 -2.42 -5.16 0.00Other Non Cash adjustments 0.00 0.00 0.00 0.00 -0.67Reported Net Profit 175.82 95.61 52.96 6.45 4.13Earnigs Before Appropriation 227.61 144.32 58.51 14.74 3.79Equity Dividend 50.78 0.00 0.00 0.00 0.00Preference Dividend 0.00 40.62 10.06 0.00 0.00Dividend Tax 8.63 6.90 1.41 0.00 0.00Retained Earnings 168.21 96.79 47.04 14.74 3.79


FINANCIAL STATEMENTS BALANCE SHEET

Rs in Cr. Mar’10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

SOURCES OF FUNDS EquityShare Capital 203.10 203.10 203.10 217.07 217.07Share Application Money 0.00 0.00 0.00 0.00 0.00Preference Share Capital 0.00 0.00 0.00 0.00 0.00Reserves & Surplus 214.54 98.12 50.04 17.74 3.79Loan Funds Secured Loans 732.33 658.77 534.36 487.86 413.56Unsecured Loans 38.14 32.23 0.00 9.90 1.65Total 1,188.11 992.22 787.50 732.57 636.07USES OF FUNDSFixed Assets Gross Block 1,445.39 839.99 803.95 791.95 767.89Less : Revaluation Reserve 0.00 0.00 0.00 0.00 0.00Less:Accumu dep 397.11 347.03 308.07 266.99 228.68Net Block 1,048.28 492.96 495.88 524.96 539.21Capital Work-in-progress 171.47 517.37 100.02 5.16 5.06Investments 46.77 0.00 0.00 23.09 23.25Net Current Assets Curr asse&loan addvance 502.11 284.63 290.08 265.09 135.37Less:curr 580.52 302.72 98.47 85.73 66.82


asset&liabilitiesTotal Net Current Assets -78.42 -18.09 191.61 179.37 68.55Misc exp not written 0.00 0.00 0.00 0.00 0.00Total 1,188.10 992.24 787.51 732.58 636.07

Note : Book Value of Unquoted Investments 46.77 0.00 0.00 23.16 0.00Market Value of Quoted Investments 0.00 0.00 0.00 0.00 0.00Contingent liabilities 392.38 156.98 427.12 3.20 0.00Number of Equity shares outstanding (in Lacs) 2,031.01 2,031.01 2,031.01 2,170.68 2,170.70


COMMON SIZE STATEMENT PART-A PROFIT AND LOSS ACCOUNT

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Mar '06

Operating Income 100% 100% 100% 100% 100%(Net Sales) Material Consumed 7.64% 12.55% 15.46% 16.12% 12.49%Manufacturing Expenses 27.82% 24.07% 32.31% 33.47% 31.81%Personnel Expenses 2.64% 2.76% 3.077% 3.09% 3.51%

24.05% 23.96% 18.55% 20.05% 0Adminstrative Expenses 2.43% 2.150% 3.19% 3.15% 26.13%Expenses Capitalised 0 0 0 0 0

Cost Of Sales 64.61% 65.51% 72.60% 75.90% 73.95%

Operating Profit 35.38% 34.48% 27.39% 24.09% 26.04%

Other Recurring Income 0.70% 0.40% 0.66% 0.17% 1.098%

Adjusted PBDIT 36.09% 34.89232 28.06% 24.27% 27.14%

Financial Expenses 4.82% 4.80% 6.96% 11.93% 14.93%Depreciation 5.78% 6.405% 8.75% 9.57% 11.00%Other Write offs 0 0 0 0 0

Adjusted PBT 25.48% 23.67% 12.33% 2.76% 1.19%

Tax Charges 7.16% 8.98% 1.044% 0.125342 0.090%

Adjusted PAT 18.32% 14.69% 11.29% 2.64% 1.1%Non Recurring Items -0.063% -0.59% -0.49% -1.175% 0Other Non Cash adjustments 0 0 0 0 -0.17%

Reported Net Profit 18.256% 14.09% 10.80% 1.469% 1.101%

Earnigs Before Appropriation 23.63% 21.27% 11.93% 3.359% 1.010%

Equity Dividend 5.27% 0 0 0 0Preference Dividend 0 5.98% 2.051% 0 0Dividend Tax 0.89% 1.01% 0.287% 0 0Retained Earnings 17.46% 14.26% 9.59% 3.35% 1.01%


PART-B BALANCE SHEETMar ' 10 Mar ' 09 Mar 08 Mar 07 Mar 06

SOURCES OF FUNDSOwner's FundEquity Share Capital 17.09% 20.46% 25.79% 29.63% 34.12%Share Application Money 0 0 0 0 0Preference Share Capital 0 0 0 0 0Reserves & Surplus 18.05% 9.88% 6.35% 2.42% 0.595%Loan FundsSecured Loans 61.63% 66.39% 67.85% 66.59% 65.01%Unsecured Loans 3.21% 3.248% 0 1.351% 0.259%Total 100% 100% 100% 100% 100%

USES OF FUNDSFixed AssetsGross Block 121.65% 84.655% 102.0% 108.1% 120.7%Less : Revaluation Reserve 0 0 0 0 0Less : Accumulated Depreciation 33.42% 34.97% 39.12% 36.44% 35.95%Net Block 88.23% 49.68% 62.96% 71.66% 84.77%Capital Work-in-progress 14.43% 52.14% 12.70% 0.70% 0.79%Investments 3.936% 0 0 3.15% 3.65%

Net Current AssetsCurrent Assets, Loans & Advances 42.26% 28.68% 36.83% 36.18% 21.28%Less : Current Liabilities & Provisions 48.86% 30.50% 12.50% 11.70% 10.50%Total Net Current Assets -6.6004 -1.82315 24.33% 24.48% 10.7%Miscellaneous expenses not written 0 0 0 0 0Total 100% 100% 100% 100% 100%


TREND ANALYSIS

PART-B BALANCE SHEETMar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Mar06

SOURCES OF FUNDSOwner's FundEquity Share Capital 93.56429 93.56429 93.56429 100 100Share Application Money 0 0 0 0 0Preference Share Capital 0 0 0 0 0Reserves & Surplus 5660.686 2588.918 1320.317 468.0739 100Loan Funds Secured Loans 177.0795 159.2925 129.2098 117.966 100Unsecured Loans 2311.515 1953.333 0 600 100Total 186.7892 155.9923 123.8071 115.1713 100USES OF FUNDSFixed AssetsGross Block 188.2288 109.3894 104.696 103.1333 100Less : Revaluation Reserve 0 0 0 0 0Less : Accumulated Depreciation 173.6531 151.7535 134.7166 116.7527 100Net Block 194.4103 91.42264 91.96417 97.35724 100Capital Work-in-progress 3388.735 10224.7 1976.68 101.9763 100Investments 201.1613 0 0 99.31183 100Net Current AssetsCurrent Assets, Loans & Advances 370.9167 210.2608 214.2868 195.8263 100Less : Current Liabilities & Provisions 868.7818 453.038 147.3661 128.2999 100Total Net Current Assets -114.398 -26.3895 279.5186 261.663 100Miscellaneous expenses not written 0 0 0 0 0Total 186.7876 155.9954 123.8087 115.1729 100Book Value of Unquoted Investments 46.77 0 0 23.16 0Market Value of Quoted Investments 0 0 0 0 0Contingent liabilities 392.38 156.98 427.12 3.2 0


PART-B Profit & loss Account Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar' 06

Income :Operating Income 256.8175 180.9195 130.7448 117.0165 100

ExpenditureMaterial Consumed 157.2374 181.9172 161.8275 151.0675 100Manufacturing Expenses 224.6018 136.8986 132.8164 123.1433 100Personnel Expenses 193.3283 142.3806 114.4049 102.8052 100Selling Expenses 231.67 162.57 90,98 87.99 0Adminstrative Expenses 23.94898 14.88776 15.96939 14.13265 100Expenses Capitalised 0 0 0 0 0

Cost Of Sales 224.3645 160.2676 128.3561 120.0988 100

Operating Profit 348.9658 239.5658 137.5282 108.2634 100

Other Recurring Income 164.5631 66.99029 79.36893 18.93204 100

Adjusted PBDIT 341.5111 232.5801 135.1739 104.6473 100

Financial Expenses 82.95252 58.2292 60.99607 93.44877 100Depreciation 134.8595 105.281 103.9486 101.7442 100Other Write offs 0 0 0 0 0

Adjusted PBT 5478.795 3585.714 1350.446 271.2054 100

Tax Charges 20300 17929.41 1505.882 161.7647 100

Adjusted PAT 4271.913 2413.559 1340.92 280.8717 100Non Recurring Items -0.61 -4.07 -2.42 -5.16 0Other Non Cash adjustments 0 0 0 0 100

Reported Net Profit 4257.143 2315.012 1282.324 156.1743 100

Earnigs Before Appropriation 6005.541 3807.916 1543.799 388.9182 100

Equity Dividend 50.78 0 0 0 0Preference Dividend 0 40.62 10.06 0 0Dividend Tax 8.63 6.9 1.41 0 0Retained Earnings 4438.259 2553.826 1241.161 388.9182 100


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010

(Rs Lakhs)

PARTICULARS For the year ended 31st March, 2010

For the year ended 31st March, 2009

A. CASH FLOW FROM OPERATING ACTIVITIESNet Profit before tax 42,161.24 15,455.77Adjustments for :Depreciation/Amortization 9,166.20 8,031.35Interest and Finance Charges 7,850.58 7,152.31Exchange Fluctuation (Net) - -283.72(Profit)/ Loss on Sale/Discard of Fixed Assets

619.28 330.29

Dividend Received -195.15 -46.24Interest Income -196.11 -192.94Operating Profit before working capital changes

59,406.04 30,446.82

Adjustments for :Inventories 4,255.76 490.52Trade and Other Receivables 8,013.34 907.7Trade and Other Payables -23,008.89 16,407.54Cash Generated from Operations 48,666.25 48,252.58Direct Taxes Paid / Refunds -3,888.36 -2,027.90Net Cash from Operating Activities 44,777.89 46,224.68 B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets -12,599.59 -16,530.45(including capital work-in-progress)Sale of Fixed Assets - 48.05Interest and Dividend Income Received

297.58 213.44

Investments in Subsidiaries / Associates

-16,327.33 -16,453.32

Other add -474.77 -511.03Net Cash from / (in) Investing Activities

-29,104.11 -33,233.31

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds from Long Term Borrowings

53,395.21 11,767.78

Repayment of Long Term Borrowings

-18,190.02 -27,429.45


Dividend / Dividend Distribution Tax Paid

-4,989.99 -5,940.46

Repayment bank borrow money -729.19 -2,476.21Proceeds from Trade Deposits 395.01 300.72Interest and Finance Charges Paid -9,332.67 -9,085.16Proceeds from Short Terms Borrowings

15,000.00 22,500.00

Repayment of Short Terms Borrowings

-29,000.00 -3,500.00

Net Cash from / (in) Financing Activities

6,548.35 -13,862.78

Net I/D cash Equlibity 22,222.13 -871.41 OPENING CASH AND CASH EQUIVALENTS

8,721.46 9,592.87

CLOSING CASH AND CASH EQUIVALENTS

30,943.59 8,721.46


ANALYSIS OF COMMON SIZE STATEMENTS

Balance Sheet

Soure of Fund

61.63%

18.05%

17.09%

3.21%

Secured LoansReserves & SurplusEquity Share CapitalUnsecured Loans

Now let’s see the common size statement of Binani Cement and we can find that the over all contribution of equity capital is falling through out five years from year to year. Inversely the reserve and surplus is increased year by year and that’s the reason for reducing contribution of equity capital in total owner funds as well in sources of funds. Equity capital had total contribution of 17.09% in March 09 which reduced from previous 4 year. Inversely reserve had of 18.05% contribution in March 09 which increased from previous 4 year.Net block has 88.23% part in company’s assets. It was 84.77% in ‘05 years which decreased through next three year and highly increased at 88.23% in ‘09 the work in progress 14.43% in ‘09 which is quite less than ‘08.In case of net current assets the current assets and loans are less than current liabilities and provisions. The current assets was 42.26% of total assets and liabilities was 48.86% which is 6.6% high than assets. And it was sole reason for negative net current assets. It was also negative in 2008 there was same reason for this but it had less portion in total assets rather than current ye


We can interpret from above graph that the source of fund for Binani has increased consequently and that is a positive sign for the company as well the financial condition of Binani is concerned.

We can interpret from above graph that the source of fund for Binani has increased consequently and that is a positive sign for the company as well the financial condition of Binani is concerned.

Investment of company was highest during March 2010 and duel from March 06 because of high demand and bullishness of market conditions. Investment trend tends to positively.

NSVKMS MBA COLLEGE, VISNAGAR.

SOURCE OF CAPITAL

020406080

100120140160180200

Mar ' 10 Mar ' 09 Mar 08 Mar ' 07 Mar ' 06

INVESTMENT

0

50

100

150

200

250

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

33

We can interpret that net current assets tends positively during March 06 & 07 but declined during Year after 2008. At a result it is negative during current year which shows scarcity of working capital during that year.

We can interpret that its equal like first three year but net block goes to highest and duel than base year in March 2010.


NET CURRENT ASSETS

-150

-100

-50

0

50

100

150

200

250

300


Net Block

0

50

100

150

200

250

Mar ' 09 Mar ' 08 Mar ' 07 Mar '06Mar ' 10

34

We can see that there is vast increase in net profit constantly and accordance with sequence. As result it is too much increased in March 09 because of high demand and bullishness of market conditions.

Trend of operating margin shows positive movement. We can see that the operating margin of Binani cement is gone a increase year by year and highest during current year.


Reported Net Profit

0500

10001500200025003000350040004500


Operating Income

0

50

100

150

200

250

300


35

SalesDuring the year under review the Company surpassed all previous bests in all areas and continue to maintain its growth path. The Company produced 52.80 lac MT of Cement compared to 42.92 lac MT in the previous year, an increase of 23%. Sales was 52.95 lac MT compared to 42.43 MT in the previous year, an increase of 25%. Captive Generation of power was 2,449.07 Lac KWh ( Net) compared to 1,876.39 Lac KWh in 2008-09. Profit before tax was the highest ever of Rs. 40,800 Lakhs an impressive growth of 164% compared to Rs. 15,456 Lakhs during 2008-09. The higher profit could be achieved mainly due to increased sales volumes, low coal price and higher net realization

The Company, during the year, has also successfully commissioned its Cement Grinding unit at Neem ka Thana In March 2009. Consequent upon commisioning of the Neem ka Thana Unit the total grinding capacity has Increased to 6 Million MTPA.


RATIO ANALYSIS

Ratio, broadly speaking, is the numerical relationship between to numbers, and hence ratio analysis of statement stands for the process of determining and


presenting the relationship of items and groups of items in the statements. The following are the importance and uses of ratio analysis.Importance of ratios: The ratio analysis is one of the powerful tools of the financial analysis. It is used as a device to analysis more clearly and decisions made from such analysis.Values used in calculating financial ratios are taken from the balance sheet, income statement, cash flow statement and (rarely) statement of retained earnings. These comprise the firm's "accounting statements" or financial statements.Ratios are always expressed as a decimal value, such as 0.10, or the equivalent percent value, such as 10%.. Financial ratios allow for comparisonsbetween companies between industries between different time periods for one company between a single company and its industry average The ratios of firms in different industries, which face different risks, capital requirements, and competition are not usually comparable.

Sources of data for financial ratiosFinancial ratios are based on summary data presented in financial statements. This summary data is based on the accounting method and accounting standards used by the organization.

Accounting methods and principles Financial ratios may not be directly comparable between companies that use different accounting methods or follow various standard accounting practices. .Abbreviations and terminology Various abbreviations may be used in financial statements, especially financial statements summarized on the Internet. Sales reported by a firm are usually, technically, net sales, which deduct returns, allowances, and early payment discounts from the charge on an invoice.


http://en.wikipedia.org/wiki/Invoice

http://en.wikipedia.org/wiki/Net_sales

http://en.wikipedia.org/wiki/Sales_(accounting)

http://en.wikipedia.org/wiki/Statement_of_retained_earnings

http://en.wikipedia.org/wiki/Cash_flow_statement

http://en.wikipedia.org/wiki/Income_statement

http://en.wikipedia.org/wiki/Balance_sheet

Companies that are primarily involved in providing services based on man-hours do not generally report "Sales" based on man-hours. These companies tend to report "revenue" based in income from services provided.

PROFITABILITY RATIOS Profitability ratios measure the firm's use of its assets and control of its expenses to generate an acceptable rate of return.Gross margin, Gross profit margin or Gross Profit Rate = (Revenue - Cost of sales) / Revenue = (Net sales - Cost of goods sold) / Net sale= Operating earnings / Net salesOperating margin, Operating Income Margin, Operating profit margin or Return on sales (ROS) = Operating income / Net sales Note: Operating income is the difference between operating revenues and operating expenses, but it is also sometimes used as a synonym for EBIT and operating profit. This is true if the firm has no non-operating income. (Earnings before interest and taxes / Sales) Profit margin, net margin or net profit margin = Net Income / Sales= Net profits after taxes / SalesReturn on equity (ROE) = Net profits after taxes / Stockholders' equity or tangible net worth = Net profit / EquityReturn on investment (ROI ratio or Du Pont ratio= Net income / Total AssetsAsset turnover = Sales / AssetsReturn on assets (ROA) = Net Income / Total Assets Return on assets Du Pont (ROA Du Pont) = (Net Income / Sales) * (Sales / Total Assets) Return on Equity Du Pont (ROE Du Pont) =(Net Income/Sales) * (Sales/Average Assets) * (Average Assets/Average Equity) Return on net assets (RONA) = Profit after tax / ( Fixed assets + working capital ) Return on capital (ROC) = (Net Operating Profit Less Adjusted Taxes) / (Invested Capital)


http://en.wikipedia.org/wiki/Sales

http://en.wikipedia.org/wiki/Net_Income

Risk adjusted return on capital (RAROC) = (Expected Return)/(Economic Capital) or (Expected Return)/(Value at risk)

Liquidity RatiosLiquidity ratios measure the availability of cash to pay debt.Current ratio = Current assets / Current liabilitiesAcid-test ratio (Quick ratio) = (Current assets – [Inventories + Prepayments]) / Current liabilities Receivables Turnover Ratio = Net credit sales/ Average net receivablesInventory turnover ratio = Cost of goods sold / Average inventory

Debt RatiosDebt ratios measure the firm's ability to repay long-term debt. Debt ratios measure financial leverage.Debt ratio = Total liabilities / Total assets Debt to equity ratio = (Long-term debt + Value of leases) / Stockholders' equityLong-term debt/Total asset (LD/TA) ratio = long-term debt / Total assetsTimes interest-earned ratio = Earnings before interest and taxes EBIT / Annual interest expense Debt service coverage ratio = Net operating income / Total debt service

Turn Over RatiosInventory turnover ratioFixed Assets turn over ratioTotal Assets turn over ratioProfitability RatiosOperating Margin

The operating margin ratio measures the profitability of the company after it pays its operational expenses and before it pays interest or taxes. A high operating margin ratio shows that the company is managing its operating expenses efficiently.

Rs crore


http://en.wikipedia.org/wiki/EBIT

http://en.wikipedia.org/wiki/Accounting_liquidity

Mar ' 10

Mar ' 09

Mar ' 08

Mar ' 07

Mar ' 06

Operating Revenue 963.04 678.43 490.28 438.8 374.99Operating Profit 340.8 233.96 134.31 105.73 97.66Operating Margin (%) 35.38 34.48 27.39 24.09 26.04

Interpretation

We can see the ratio is going to increase from March 07 to March 09 respectively 27.39, 34.48, and 35.38. It increases 0.9% from previous year. The reason behind it is the increment in demand. Due to high demand it sales turnover were increase from 783.59 to1149.98 cr from previous year. When on other side, the expenses were less increase in respect of increase in sales.

Gross Profit RATIO Gross Profit = Revenue − Cost of Goods Sold

= (Revenue - Cost of sales) / Revenue


Operating Margin (%)

35.38 34.48

27.3924.09 26.04

05

10152025303540


41

=

(Net sales - Cost of goods sold) / Net sales = Operating earnings / Net sales

Mar ' 10

Mar ' 09

Mar ' 08

Mar ' 07

Mar ' 06

Gross Profit Margin (%) 29.6 28.07 18.64 14.52 15.03

Interpretation

This ratio shows the margin left after meeting manufacturing costs. We can see the ratio is going to increase from March 07 to March 09 respectively 18.64, 28.07, and 29.60. It increases 1.53% from previous year. The reason behind it is the increment in net sales.

Net Profit RATIOProfit margin, Net Margin, Net profit margin or Net Profit Ratio all refer to a measure of profitability. It is calculated using a formula and written as a percentage or a number.

= Net Income / Sales


Gross Profit Margin (%)

29.6 28.07

18.6414.52 15.03

05

101520253035

Mar ' 08 Mar ' 07 Mar ' 06Mar ' 09Mar ' 10

42

http://en.wikipedia.org/wiki/Sales

http://en.wikipedia.org/wiki/Net_Income

http://en.wikipedia.org/wiki/Percentage

http://en.wikipedia.org/wiki/Profitability

= Net profits after taxes / Sales

Mar ' 10

Mar ' 09

Mar ' 08

Mar ' 07

Sales 963.04 678.44 490.28 438.8Reported Net Profit 175.8

2 95.61 52.96 6.45

Net Profit Margin (%)

18.12 14.03 10.73 1.46

Interpretation

This ratio shows the earnings left shareholders (both in terms of equity and preference) as percentage of net sales. If higher will be this ratio higher will be profit to company. We can see the ratio is going to increase from March 07 to March 09 respectively 10.73, 14.03, and 18.12. It increases 4.09% from previous year. It’s due to high net sales.

Return on equity (ROE)

Return on Equity (ROE, Return on average common equity, return on net worth) measures the rate of return on the ownership interest (shareholders' equity) of the


Net Profit Margin (%)

18.12

14.03

10.73

1.46 1.09

0

5

10

15

20


43

http://en.wikipedia.org/wiki/Shareholders'_equity

common stock owners. ROE is viewed as one of the most important financial ratios. = Net profits after taxes / Stockholders' equity or tangible net worth = Net profit / Equity

Mar ' 10

Mar ' 09

Mar ' 08

Mar ' 07

Mar ' 06

Net Profit(Rs. cr) 175.82 95.61 52.96 6.45 4.13Equity Share Capital 203.1 203.1 203.1 217.07 217.07

ROE 0.865682

0.470753

0.260758

0.029714

0.019026

ROE(%) 86.5682

47.0753

26.0758 2.9714 1.9026

Interpretation

This ratio shows the profitability of equity funds invested in the firm. We can see the ratio is going to increase from March 07 to March 09 respectively 26.0758, 47.0753, and 86.5682. It increases 39.61% from previous year. Means dividend to equity shareholder should be greater than March 2009.

Returns on share holders Funds


ROE(%)

86.5682

47.0753

26.0758

2.9714 1.90260

20

40

60

80

100


44

http://en.wikipedia.org/wiki/Financial_ratio

The Return On Shareholders Funds (ROSF) ratio has historically been used by industry investors as a measure of the profit for the period which is available to the owner’s stake in a business. The Return On Shareholders Funds ratio is therefore a measure of profitability.

Return On Shareholders Funds (ROSF) =((Net profit after taxation & preference dividend) / ( Ordinary share capital + Reserves)) x 100

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Net Profit 175.82 95.61 52.96 6.45 4.13Equity Share Capital 203.1 203.1 203.1 217.07 217.07Reserves 214.54 98.12 50.04 17.74 3.79

ROSHF(%)42.09846

31.74092

20.92123

2.746902

1.869963

Interpretation

This ratio defines how efficiently the fund supplied by the shareholder has been used. We can see the ratio is going to increase from March 07 to March 09 respectively, 20.92, 31.74, and 42.09. It increases 10.35% from previous year. It remains to maximum during the year ended on March 2009 because of highest net profit stands over their.

Return on investment


ROSHF(%)

42.09846

31.74092

20.92123

2.746902 1.8699630

10

20

30

40

50


45

In finance, rate of return (ROR), also known as return on investment (ROI), rate of profit or sometimes just return, is the ratio of money gained or lost (realized or unrealized) on an investment relative to the amount of money invested. ROI ratio or Du Pont ratio = Net Profit / (Fixed assets + working capital)

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Fixed Assets 1219.75 839.99 803.95 791.95 767.89Net Profit 175.82 95.61 52.96 6.45 4.13Total Net Current Assets -78.42 -18.09 191.61 179.37 68.55ROI(%) 15.40483 11.6328 5.319619 0.664045 0.493759

Interpretation

It is a measure of financial performance of a company which takes the use of assets into account. We can see the ratio is going to increase from March 07 to March 09 respectively 5.31, 11.63, and 15.40. It increases 3.77% from previous year.

LIQUIDITY RATIOS


ROI(%)

15.40483

11.6328

5.319619

0.664045 0.4937590

5

10

15

20

Mar '10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

46

http://en.wikipedia.org/wiki/Money

http://en.wikipedia.org/wiki/Finance

Accounting liquidity (liquidity) is a measure of the ability of a debtor to pay their debts as and when they fall due. It is usually expressed as a ratio or a percentage of current liabilities.

For a corporation with a published balance sheet there are various ratios used to calculate a measure of liquidity. These include the following:The current ratio, which is the simplest measure and is calculated by dividing the total current assets by the total current liabilities. A value of over * the quick ratio calculated by deducting inventories and prepayments from current assets and then dividing by current liabilities - gives a measure of the ability to meet current liabilities from assets that can be readily sold. A better way for a trading corporation to meet liabilities is from cash flows, rather than through asset sales, so; For different industries and differing legal systems the use of differing ratios and results would be appropriate. For example, in a country with a legal system that gives a slow or uncertain result a higher level of liquidity would be appropriate to cover the uncertainty related to the valuation of assets. A manufacturer with stable cash flows may find a lower quick ratio appropriate than an Internet-based start up corporation.

CURRENT RATIO The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its


http://en.wikipedia.org/wiki/Manufacturer

http://en.wikipedia.org/wiki/Current_ratio


http://en.wikipedia.org/wiki/Percentage

http://en.wikipedia.org/wiki/Ratio

http://en.wikipedia.org/wiki/Debtor

debts over the next 12 months. It compares a firm's current assets to its current liabilities. It is expressed as follows:

Current assetsCurrent ratio =

Current liabilities

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06CurrenLiabilities Provisions 580.52 302.72 98.47 85.73 66.82CurrentAssets,Loans Advances 502.11 284.63 290.08 265.09 135.37Current Ratio 0.86 0.94 2.95 3.09 2.03

InterpretationThis ratio shows the ability of the firm to meet its current liabilities-current assets get converted into cash during the operating cycle of the firm and provide funds needed to pay current liabilities. We can see the ratio is going to decrease from March 07 to March 09 respectively 2.95, 0.94, and 0.86. It decreases 0.08% from previous year,

QUICK RATIO Acid-test ratio (Quick ratio) = (Current assets – [Inventories + Prepayments]) / Current liabilities



Current Ratio

0.86 0.94

2.95 3.09

2.03

00.5

11.5

22.5

33.5


48

http://en.wikipedia.org/wiki/Current_liabilities

http://en.wikipedia.org/wiki/Current_asset

Inventories 217.44 57.25 33.55 33.6 39.59Current Liabilities 580.52 302.72 98.47 85.73 66.82Current Assets 502.11 284.63 290.08 265.09 135.37Quick Assets 284.67 227.38 256.53 231.49 95.78Quick Ratio 0.49 0.61 2.61 2.70 1.43

InterpretationThe acid test ratio is perhaps the most stringent measure of liquidity. The quick ratio of 1 to 1 is considered to represent a satisfactory current financial condition. We can see the ratio is going to decrease from March 07 to March 09 respectively 2.61, 0.61, and 0.49. It decreases 0.12 from previous year, which reveals that during Mar’09 its to lesser than other year means shortage of liquidity for company to pay its obligations.

CASH RATIO ,= cash and bank balance / current liabilities

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Current Liabilities 580.52 302.72 98.47 85.73 66.82Cash and Bank Balance 43.28 27.53 15.66 8.81 8.82Cash Ratio 0.074554 0.090942 0.159033 0.102764 0.131996


Quick Ratio

0.49 0.61

2.61 2.7

1.43

0

0.5

1

1.5

2

2.5

3

Mar ' 10 Mar '09 Mar ' 08 Mar ' 07 Mar ' 06

49

Interpretation

The ideal ratio for cash is 1:2. the firm needs not maintain too many higher/super liquid assets. The cash ratio indicates the availability of the cash to meet short term commitments. We can see the ratio is going to decrease from March 07 to March 09 respectively 0.16, 0.091, and 0.075. It decreases 0.016 from previous year, which reveals that during Mar’09 the cash is lower than current liabilities.

TURNOVER RATIOS INVENTORY TURNOVER RATIO Inventory turnover ratio = Cost of goods sold / Average

inventory Average days to sell the inventory = 365 / Inventory Turnover

Ratio

Mar ' 10 Mar ' 09 Mar ' 08


Cash Ratio

0.0745540.090942

0.159033

0.1027640.131996

0

0.05

0.1

0.15

0.2


50

Cost Of Sales 622.23 444.47 355.97Opening stock 12.9234 6.1945 9.7795Closing stock 68.7872 12.9234 6.1945Average Stock 40.8553 9.55895 7.987Inventory Turn over Ratio (times) 15 46 45

InterpretationIt indicates the speed with which the inventory is converted into sales. We can see the ratio is going to decrease from March 07 to March 09 respectively 45, 44, and 15 times. It decreases 29 times from previous year. Its declined in Mar’09 due to highest average stock during that year.

FIXED ASSETS TURN OVER RATIOSFixed Asset turnover = Sales / net fixed Assets The Fixed Asset Turnover Ratio measures how fixed assets are used to generate sales. Given sales from a company's income statement and net fixed assets from the balance

sheet:

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Fixed Assets 1219.75 839.99 803.95 791.95 767.89Sales 963.04 678.44 490.28 438.8 374.99Fixed Assets Ratio 0.66 0.80 0.60 0.55 0.48


Inventory Turn over Ratio (times)

15

46 45

0

10

20

30

40

50

Mar ' 10 Mar ' 09 Mar ' 08

51

http://en.wikipedia.org/wiki/Asset_turnover

Interpretation

If this ratio is low means fixed assets is more than its necessary and must be reduced and if it is to be higher it means that fixed assets are being effectively to earn profit for company. We can see that during Mar’09, 08, and 07 it is respectively 0.66, 0.80, and 0.60 also decrease from 0.20 from previous year due to higher fixed assets in current year.

Total Assets Turn over Ratio

Total Asset Turnover = Sales / (Total Assets)"Sales" is the value of "Net Sales" or "Sales" from the company's income statement "Average Total Assets" is the value of "Total assets" from the company's balance sheet in the beginning and the end of the fiscal period divided by 2.


Fixed Assets Turnover Ratio

0.660.8

0.6 0.550.48

0

0.2

0.4

0.6

0.8

1


52


http://en.wikipedia.org/wiki/Income_statement

Assets turnover is a business term and may be used as a broad measure of asset efficiency and is calculated by dividing sales revenue by the total assets.

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Net Sales 963.04 678.44 490.28 438.8 374.99Total Assets 1188.1 992.24 787.51 732.58 636.07Total Assets Turn over Ratio 0.810572 0.683746 0.62257 0.598979 0.589542

InterpretationThis ratio measures how efficiently assets are employed, overall. We can see that during March 08 its found to b highest which sowing better utilization of assets of the Binani cement.

LEVERAGE RATIOS

DEBT-ASSETS RATIO Debt Ratio is a financial ratio that indicates the percentages of a company’s assets are provided via debt. It is the ratio of total debt (the sum of current liabilities and long-term liabilities) and total assets (the sum of current assets, fixed assets, and other assets such as 'goodwill'). Debt-Assets Ratio = Total Debt / Total Assets


Total Assets Turn over Ratio

0.8105720.683746 0.62257 0.598979 0.589542

0

0.2

0.4

0.6

0.8

1


53

http://en.wikipedia.org/wiki/Total_assets

http://en.wikipedia.org/wiki/Long-term_liabilities

http://en.wikipedia.org/wiki/Current_liabilities

http://en.wikipedia.org/wiki/Debt

http://en.wikipedia.org/wiki/Revenue

http://en.wikipedia.org/wiki/Asset

http://en.wikipedia.org/wiki/Business

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Total Debt 770.47 691 534.36 497.76 415.21Total Assets 1188.1 992.24 787.51 732.58 636.07Debt-Assets Ratio 0.648489 0.696404 0.678544 0.679462 0.652774

InterpretationThe debt-assets ratio measures the extent to which borrowed funds support the firm’s assets. We can see that during Mar’09 it’s 0.648489, which lowest of all the five years. DEBT TO EQUITY RATIO

Total Debt to equity ratio = Total Debt/ Stockholders' equity

Financial economists and academic papers will usually refer to all liabilities as debt, and the statement that equity plus liabilities equals assets is therefore an accounting identity (it is, by definition, true)..

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Total Debt 770.47 691 534.36 497.76 415.21Equity Share Capital 203.1 203.1 203.1 217.07 217.07Reserves & Surplus 214.54 98.12 50.04 17.74 3.79Total Debt/Equity 1.84 2.29 2.11 2.12 1.88


Debt-Assets Ratio

0.648489

0.696404

0.678544 0.679462

0.652774

0.620.630.640.650.660.670.680.69

0.7


54

http://en.wikipedia.org/wiki/Identity#Mathematics

http://en.wikipedia.org/wiki/Economist

InterpretationThe total debt to equity ratio shows the relative contribution of creditors and owners. In general lower the debt-equity ratio, higher the degree of protection to enjoy by the creditors. We can see that it decrease in March 09 form previous year from 2.29 to 1.84 its means that use of equity is more than debt rather than March 08.

Proprietary Ratio

The Proprietary Ratio represents the proportion of Proprietors’ Equity to Total Assets. A higher percentage denotes the stronger the financial position of the enterprise

= Shareholders’ Equity/Total Assets

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06Share Holders Fund 417.64 301.22 253.14 234.81 220.86Total Assets 1188.1 992.24 787.51 732.58 636.07Proprietor ratio 0.35 0.30 0.32 0.32 0.35


Total Debt/Equity

1.84

2.292.11 2.12

1.88

0

0.5

1

1.5

2

2.5


55

InterpretationThe Proprietary Ratio can be used to ascertain the solvency and financial stability of the firm in the long run. It is like 0.35, 0.30, 0.32, 0.32 and 0.35 respectively from March 09 to 05. We can see that it is highest during March 2009. It means that large degree of security to lenders during current year.

INTEREST COVERAGE OR TIE RATIO

Given the Earnings Before Interest and Taxes (EBIT) and Interest from the Income Statement:

The Times Interest Earned Ratio = EBIT / Interest

Generally, the higher the ratio, the more easily interest obligations can be met out of earnings. Ratios of less than 1 means earnings are insufficient to meet the interest payments.

Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06EBIT 291.31 189.19 91.25 59.35 60.49Interest 46.47 32.62 33.17 52.35 56.02


Proprietor ratio

0.35

0.3

0.32 0.32

0.35

0.270.280.29

0.30.310.320.330.340.350.36


56

TIE Ratio 6.268776 5.799816 2.75098 1.133715 1.079793

InterpretationThis ratio reflects the number of times that the company’s interest are covered by its earnings before interest and taxes. We can see that its increases from March 07 to March 09 like 1.13, 2.75, 5.8 and 6.27 respectively which is higher in 2009.

OVERALL ANALYSIS:-

PRARTICULARS 2010 2009 2008 2007 2006Operating Margine 35.38 34.48 27.39 24.09 26.04Gross Profit ratio 29.6 28.07 18.64 14.52 15.03Net Profit ratio 18.12 14.03 10.73 1.46 1.09Return on equty 86.568 47.075 26.08 2.9714 1.9026Return on Share holders

42.098 31.741 20.92 2.7469 1.87

ROI 15.405 11.633 5.32 0.664 0.4938Current ratio 0.86 0.94 2.95 3.09 2.03Quick ratio 0.49 0.61 2.61 2.70 1.43Cash Ratio 0.0746 0.0909 0.159 0.1028 0.132Inven turnover ratio 15 46 45FIX Asset turnover 0.66 0.80 0.60 0.55 0.48


TIE Ratio

6.2687765.799816

2.75098

1.133715 1.079793

01234567


57

Totai -assets ratio 0.8106 0.6837 0.623 0.599 0.5895Debt-assets ratio 0.6485 0.6964 0.679 0.6795 0.6528Debt-equty ratio 1.84 2.29 2.11 2.12 1.88Proprietor ratio 0.35 0.3 0.32 0.32 0.35IOC 6.2688 5.7998 2.751 1.1337 1.0798

DU PONT CHART Return on investment

*

/

-


PM(profit margin) 18.12%

Total asets turnover15 (Times)

EBIT(In Rs.) 297.31

Total Sales (In Rs.) 963.04

Sales (Non-operating Income) 1425.28

Operating exp= 1133.97

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CONCLUSION

Binani Cement has been working in this core sector from 1997.Binani Cement has established itself as one of the top companies in the industry in terms of efficiency and performance. What’s more, constant improvement of operating efficiency and cement quality has worked to improve profitability for the company. And has ideally placed it to take advantage of growing markets. Always keeping true to its core promise: ‘for generations to come’ I had an opportunity to know financial workings at well known organization. It was nice experience working at Binani. As far as my financial report concern, I got all


Net fixed assets 1048.28

Net working capital -78.42

Investment 46.77

Total fixed assets 1445.39

Accumulated depreciation 397.11

TotalCurrent Assets 502.11

Current Liability 580.53

necessary support from the staff. For that, I am extremely grateful to them.

RECOMMENDATION FINDINGS Binani cement has got success in making heavy profit in current year which is most in life of company. There is vast increase in net profit constantly and accordance with sequence of year. Binani has never issued preference share and debentures. Binani has most operating margin in current year (2008-09) in life of it. The source of fund for Binani has increased consequently and that is a positive sign for the company.


Investment of company was highest during March 2009 and double from March 05 because of high demand and bullishness of market conditions. Financial leverage has declined during year by year and in March 09 which good sign for financial risk of Binani. Due to high demand it sales turnover were increase from 783.59 to1149.98 cr from previous year. Return on Equity ratio increases means dividend to equity shareholder should be greater than March 2008.

Recommendation Capital structure of Binani is mainly consist of outsider loan and has 61.63% part in total capital of company which is even more than Ambuja and ACC. So company is to be suggested to reduce loan portion in capital structure. Binani has negative flow of net current assets (-78.42) in last two year which would be barriers to working capital management. Binani needs to improve working capital management. Quick ratio which reveals that during Mar’08 it is to lesser than 1 to 1 & other year means shortage of liquidity for company to pay its obligations. Company should take place to raise this ratio.


The ideal ratio for cash is 1:2.The cash ratio indicates the availability of the cash to meet short term commitments which reveals that during Mar’08 the cash is lower than current liabilities. Binani needs to improve Cash management.Inventory turn over ratio indicates the speed with which the inventory is converted into sales. It decreases 29 times from previous year. Binani needs to improve inventory managementBinani has lowest total assets (1,188.09 cr) than Ambuja, ACC, Ultra tech cement, India Cements. Binani needs to increase to be competing with rivals.

BIBLIOGRAPHY Books Used

Author- AMBRISH GUPTABook- Financial for ManagementPublisher– Pearson Edition– 3th

Websiteswww.binani.comwww.sebi.gov.inwww.smcindiaonline.comwww.wikipedia.comwww.kotaksecrurity.com


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http://www.binani.com/

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