JAN 2013-15

Muni Krishna

Sachin Agarwal

BINANI CEMENT

Abhinay JainDiposree Sanyal

Group 1 Rajesh Burnwal

Swetha Tulasi

SOURCES OF DATA

• www.capitaline.com

• www.binaniindustries.com/

• www.binaniindustries.com/group-companies/binani- cement/cement-landing.asp

• www.youtube.com (Video)

• www.business-standard.com/

BRAJ BINANI GROUP

• The Braj Binani group traces its beginning in 1872 by Seth Pragdas Binani and his son

Seth Mathrudas to impor t and expor t metals

• In 1941 Seth Govardhandas son of Seth Mathrudas made bold decision to move from trading to manufacturing

• Following the restructuring of Braj Binani group in 1996 to 2004 BIL was founded to ser ve as the holding company for Binani cement limited , Binani zinc limited , Goa glass fiber limited and BT composites limited

• After establishing its foot print in India , China and Dubai it is exploring newer global horizons like South Africa ,East Africa and Mauritius

• The group is endeavoring to establish a strong network of Binani cement presence across the globe

BINANI GROUP INDUSTRIES

• BINANI Industries Ltd.

• BINANI Cement Ltd.

• BINANI Zinc Ltd.

• Goa Glass Fiber

• RBG minerals

• BIL Infratech Ltd.

• BINANI Metals (under construction)

• Crown Mining Ltd (under construction)

MANAGEMENT

Name DesignationBraj Binani CEOBraj Binani Chairman / Chair PersonDarshan Lal President (Operations)Dinesh Randad Sr.Vice President (Operations)K K Jain Vice President (F & A)M K Chattopadhyaya Director

BINANI CEMENT LIMITED

• Binani cement limited is the flagship subsidiar y of Binani Industr y Limited representing the Braj

Binani group

• The Binani cement star ted the operations in 1997 in Sirohi district , Rajasthan with a 1.65 MTPA

integrated cement facility and a 25 MW captive power plants

• The capacity was raised to 2.25 MTPA in 2005

• It was also cer tified to ISO 9001, ISO 14001 and OHSAS 18001 with in a shor t span from commencement of operations

• In 2008 , a split – grinding unit at Neem ka Thana was commissioned , boosting the capacity inIndia to 6.25 MTPA

VISION AND MISSION

• To achieve leadership status in the core sector, across the world

• To employ frontline technologies to meet the highest global standards in products and ser vices

• To set benchmarks in manufacturing and environmental performance

• To be a customer-first, quality-obsessed, socially sensitive corporate entity.

• To achieve breakthroughs in manufacturing based on intensive R&D

• To ensure well-being of all our stake-holders; upholding such values as integrity, trust, concern, empathy and commitment

CEMENT INDUSTRY• Cement is one of the core industries which plays a vital role in the growth

and development of a nation.

• The Indian cement industr y is the 2nd largest market after China accounting for about 7-8% of the total global production. It had a total capacity of about 330 m tones (MT) as of financial year ended 2011-12.

• There are 139 large cement plants and over 365 mini cement plants in India, with currently 42 players in the industr y.

• Binani has 3% of share in cement industr y

• Production increases by 9.1% yearly

• The Company was incorporated in Kolkata, West Bengal on Januar y 15, 1996 as Dynasty Dealer Private Limited.The name of the Company was changed to Binani Cement Private Limited and a fresh cer tificate of incorporation was issued to it by the RoC on April 23, 1998. Subsequently, the Company was conver ted into a public company and the name was changed to Binani Cement Limited vide a fresh cer tificate of incorporation dated October 6, 1998.

CEMENT INDUSTRY

• Binani Industries (BIL) today said its cement making arm Binani Cement has been delisted from the Bombay Stock Exchange and National Stock Exchange with effect from May 30 11.

• Because they wanted the company to be fully owned by the promoters so they got themselves delisted from BSE & NSE.

• Delisting of company's equity shares is actually stopping the stocks from fur ther trading on the bourses.

• BIL had in Januar y 11 launched an open offer to acquire 30.1% stake in Binani Cement. At present, BIL has 95.01% stake in Binani Cement.

• BIL has also tendered an exit oppor tunity to Binani Cement's residual shareholders.

THE CEMENT PRODUCTION AND POWER GENERATION DETAILS ARE AS UNDER:

Production 2011-12 2010-2011 Percentage change

Cement (Lakhs MT) 55.84 54.58 Increase 2.3 %

Power production 3281.65 3056.69 Increase 7.4%

(Lakhs KWh)

FINANCIAL CONDITION OF BINANI CEMENT:

Particulars 2011-12 (in Rs. Lakhs) 2010-2011(in Rs. Percentage changeLakhs)

Net sales & other 205,668 174,335 Increase 18 %incomesOperating cost 172,607 145,814 Increase 18 %

Interest and financial 16,140 10,344 Increase 56% chargesCash profit 15,670 18,177 Decrease 14%Profit after tax (PAT) 4,840 9,051 Decrease 47%

OPERATIONAL PERFORMANCE

During the year 2011-12, the Company has achieved highest ever production of55.84 Lakhs MT and sold 56.06 Lakhs MT of cement.

Sales volumes increased by 3.20% and net turnover increased from Rs.1733.23 crore to Rs. 2,027.81 crore i.e. by 17%, which is mainly due to higher sales volumes and increased Cement prices.

Despite increase in cement prices, profit after tax dropped to Rs. 5,315 Lakhs from Rs. 8,227 Lakhs which is mainly due to higher input costs of coal, power and other raw materials, higher logistics and Interest costs.

OPPORTUNITIES / THREATS

THREATS:

• Despite a strong GDP growth forecast of 8-9% in next 3-4 years, Industr y is likely to see pressures on prices due to higher demand supply gap and increased Cost of Inputs, Fuel, and Logistics.

• Low profit due to higher input coal cost, power and other raw materials.

OPPORTUNITIES:

• Demand for Cement in India is likely to see a growth of 6-8 percent in 2012.

• The Union Budget's focus on developing infrastructure and on affordable & rural housing. It will provide a boost to cement demand.

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TOP 5 COMPETITORS OF BINANI CEMENT

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Name

Last Price (BSE) (Rs.)

Sales Turnover (In Cr.)

Net Profit Total Assets

Ultratech Cement

1,908.75

18,313.13

2,446.19

16,667.95

Ambuja Cement

190.55 9,730.30

1,297.06

8,839.69

ACC 1,259.20

11,357.96

1,061.19

7,467.83

Shree Cement 4,237.25

5,898.12

618.50

3,695.00

Madras Cements

257.00 3,278.20

385.11

4,164.32

Binani Cement

90.30 2332.11

48.4 2328.77

NOTES TO ACCOUNTS

• The financial statements have been prepared:

- Historical cost convention.- Accrual basis.- Indian GAAP.- Depreciation - Straight Line method

- Plant and Machiner y- Written Down Value

- Land that’s not owned by the co.- Roads inside the factor y premises.- Assets Below 5000INR are depreciated 100%

COMPARISON

(In Cr.) (In Cr.)

Year Current Liabilities Current Assets

2008 348.93 502.11

2009 510.92 484.55

2010 438.33 721.35

2011 495.85 497.21

2012 682.94 813.43

• Company has always made sure that the Current liabilities are always more than the Current Assets, except in year 2009.

350

III

250

.--- .------

is

150 t--r---

! I-100

50 - I-

CASH FLOW

(Figures In Cr.)

Cash Profit

400

r---

300 ...I

,...------.

200 t--

til

-

I ; ill:

o2012 2011 2010 2009 2008

• Year 2010 the profits of the company has doubled compared to previous year because of reduction in operating expenses and at the same time increase in Net profits of the company as compared to any year 286 cr. and Gross profit of 500 cr.

675.15_...-&46.8 6~

/ "T'

-¥...-

AU), A400

300

NET WORTH

(Figures In Cr.)

Net Worth of the Company

800

700

600

500

57..9..0. ."

417.64

200

100

o2008 2009 2010 2011 2012

• The Net Wor th of the company has increased by 55% as compared to year 2008

Investments

Ver tical Analysis=

X 100 900 .----

»: -700

600

500

400

300

200

100

L-;::::""

.>Binani has consistently increased itsinvestments in the last 5 years, with

tit• -

i -the ::I.....1ft

• -...... !highest increase in year 2009 of

approx351%.

~ --~

factor y of 2.5MTPA in Gujarat, paid in

Made investments in:

•

INVESTMENTS(Figures In Cr.)

Total Assets 800

v -

/ -

II!L_

~ /.io

~~

2008 2009 2010 2011 2012

• In the year 2008-09 the company hasplaced an order for setting up a new Investments - Vertical

Analysis

advance 35.00% +---------------------,-0

30.00% +-----------------:::::;!I ...'t.fl...25.00% +---------------:~:;-----------

• Unquoted Equity (Stocks that are not 5.00% +--~~ ...,...,...-.,-----------------

listed in any stock exchange) 0.00% +------r-------r------,r------.----....,2008 2009 2010 2011 2012

• Preference shares.

Total Current Assets

Companies

money

withothers:

•600

500300

Year Amount (In Cr.) Percentage

Inter corporate Deposits (An Inter-

•

2010 241.93 33.54%loan extended by one corporate to

LOANS AND ADVANCES

Ver tical Analysis= Loans & Advances

X 100

(Figures In Cr.)

Loans and Advances - Horizontal Analysis

3.01

• For Eg. 400

200• Loans to Subsidiar y 100

0

• Deposits with Government

2008 2009 2010 2011 2012

• Advance Tax Loans and Advances - Vertical Analysis

2008 188.73 37.59%

Corporate Deposit (ICD) is an unsecured 2009 184.8

38.14%

another. ) 2011 104.9

21.10%

2012 563.01 69.21%

592

20102011

88.84517.25

1011.81235.58

8.78%41.86%

UNSECURED LOANS(Figures In

Cr.)Unsecured Loans -

Horizontal

700 -r------------------ Year Unsecured Loans Total Debt Percentage

2008 59.89 792.22 7.56%

soo -f----------- 2009 62.9 803.1 7.83%400 -f-----------

300 -f-----------

2012 592 1646.52 35.95%

2008 2009 2010 2011 2012

• Unsecured Loans has increased by 10 times in the last 5 years.

• Because of Expansion Plans

• Buy back of shares

• In ver tical analysis:

• The unsecured loans is around 35% of the total liabilities, with a huge increase coming from

year 2011, approx 33 Percentage points due to set up of a plant in Gujarat

CONTINGENT LIABILITIES

For year 2012 (332.67 in Crs)

- Company Bought Steam Coal machine for 5crs, for which the seller didn’t give bill.

- Land Tax dispute with the cour t for ( 10 Crs)

- 177 crs / 399. 21 with the Income Tax depar tment.

- 4 Crs with excise depar tment

RATIO ANALYSIS

It’s a tool which enables the banker or lender to arrive at the following factors:

Liquidity

Profitability

SolvencyFinanc

ial Stability

Current Liablities

RATIO ANALYSIS

Current Ratio= Current Asset

March

‘08 ‘09 ‘10 ‘11 ‘12

Ratio:1

ANALYSIS: From the above graph & char t, we understand that BinaniCement has shown a decline in the Current Ratio during the year ended2009 and 2011. Data also indicates a relative increase in the year ended2012 as compared to year ended 2011.

YearsCurre

nt Assets

(In Cr.)

Current

Liabilities (In Cr.)

Ratio

Mar ’12

813.43

683.72 1.18971Mar

’11497.21

551.34 0.90182Mar

’10721.35

569.89 1.26577Mar

’09484.55

580.72 0.8344Mar

’08502.11

431.25 1.16431

CurrentLiabilities

0.96

0.94

0.46

‘08 ‘09 ‘10 ‘11 ‘12

RATIO ANALYSIS

Quick Ratio= Current Asset - Closing Stock - Prepaid

Expenses

March

1

0.66 0.6

0

Ratio (%)

ANALYSIS: From the above graph & char t, we understand that Binani Cement has shown a decrease in the year ended 2011, and an increase in year ended 2012.

Note: Quick Ratio is also known as ‘Acid Test Ratio’ or ‘Liquid Ratio’.

YearsCurrent Asset (In Cr.)

Closing

Stock (In Cr.)

Prepaid Expenses (In Cr.)

Current

Liabilities (In Cr.)

Ratio

Mar ’12

813.43

168.34

0 683.72

0.9435

Mar ’11

497.21

161.84

0 551.34

0.6083

Mar ’10

721.35

169.98

0 569.89

0.9675

Mar ’09

484.55

212.54

0 580.72

0.4684

Mar ’08

502.11

217.44

0 431.25

0.6601

Tangible Net Wor th (Equity)

RATIO ANALYSIS

Debt-Equity Ratio= Debt (Secured Loans + Unsecured

Loans)

March

3

2

1

‘08 ‘09 ‘10 ‘11 ‘12

Ratio:1

ANALYSIS: From the above data it is seen that the Debt-Equity ratio of the company is increased in past years, which means that the company is has more loans compared to the promoters contribution.

Note: Debt-Equity Ratio is also known as ‘Banker’s Ratio’.

YearsSecure

d Loans (In Cr.)

Unsecured

Loans (In Cr.)

Equity (InCr.)

Ratio

Mar ’12

1054.52

592

646.86 2.5454

Mar ’11

718.33 517.25 579.02 2.1339

Mar ’10

922.96 88.84 675.15 1.4986

Mar ’09

740.2 62.9 476.4 1.6858

Mar ’08

732.33 59.89 417.64 1.8969

Net Sales

48.3 44.1

4

RATIO ANALYSIS

Gross Profit Ratio= Gross Profit X 100

50

25 32.92 31.38 29.7

‘08 ‘09 ‘10 ‘11 ‘12

Ratio (%)

ANALYSIS: From the above char t & graph, we come to know that the efficiency of Binani cement has constantly decreased since year ended2010.Higher the ratio, the better it is.

Years Sales

(In Cr.)

Cost of

Goods Sold (In Cr.)

Net Sales

(In Cr.)

Ratio

(%)Mar

’122332.11

1729.76

2027.81

29.7045Mar

’111991.64

1447.67

1733.24

31.3846Mar

’102067.11

1249.95

1851.05

44.1458Mar

’091713.93

1223.47

1489.80

32.9212Mar

’081148.55

684.02 961.6 48.308

[(Opening + Closing Stock)/2]

X 52 weeks

RATIO ANALYSIS

Stock Turnover Ratio= Average Inventor y 365 days

Sales 12 months

Months

Stock Turnover Ratio calculates how fast the stock is moving. It is a test of inventor y management.Turnover Ratio’s are addressed with reference to time (Days/Weeks/Months)

YearsSales

(InCr.)

Average

Stock (In Cr.)

RatioFor 365Day

s

For 52Weeks

For 12

Mar ’12

2332.11

165.09 14.1263

25.83834

3.68108

0.84948

Mar ’11

1991.64

165.91 12.0043

30.40567

4.33177

0.99964

Mar ’10

2067.11

191.26 10.8079

33.77174

4.81132

1.1103

Mar ’09

1713.93

214.99 7.97214

45.78445

6.52272

1.50524

Mar ’08

1148.55

- - - - -

Net SalesFixed Asset Turnover

Ratio=X 52

weeks

RATIO ANALYSIS365 days

Fixed Assets 12 months

Months

This ratio relates Net Sales to Fixed AssetsHigher the Fixed Asset Ratio, better it is.

Years Net Sales

FixedAssets Ratio

For 365Day

s

For 52Weeks

For 12

Mar ’12

2027.81

1515.34

1.3382

272.7569

38.859

8.967349

Mar ’11

1733.24

1350 1.2839

284.2942

40.502

9.346657

Mar ’10

1851.05

965.6 1.917

190.4022

27.126

6.259798

Mar ’09

1489.80

794.95 1.8741

194.7622

27.747

6.403141

Mar ’08

961.6 707.75 1.3587

268.6447

38.273

8.832155

QUESTIONS

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