Financial Accounting

Analysis of India Cements Ltd.

1. Company Overview
India Cements Limited (ICL) is a cement manufacturing company in India. It was established in the year 1946 and the first plant was set up at Sankarnagar in Tamil Nadu in 1949. Since then it has grown in stature to seven plants spread over Tamil Nadu and Andhra Pradesh thereby catering to major markets in South India and Maharashtra. The company has recently commissioned a plant in Rajasthan to tap the Northern markets. The capacities of its plants, as on March 2011, have reached 15.6 million tons per annum. It is the market leader with a market share of 28% in the South.

A. Key segments of business

Although the primary business of India Cements Ltd. Is the production of cement/ clinker, the organization also has several subsidiary and associated companies such as ICL Securities Ltd, ICL Financial Services Ltd, Trishul Concrete Products Ltd, Coromandel Sugars Ltd, Coromandel Electric Company Ltd, Coromandel Travels Limited etc. Some of the major brands of the company are Coromandel King, Coromandel Super Power. Incidentally, the company owns the Chennai Super Kings team which has been playing in the India Premier League (IPL) since 2008.

B. Indian Cement Industry

India is the worlds second largest producer of cement. Cement is also one of the six core industries of India. The increase in cement demand over the last few years has been driven by strong demand from housing sector, commercial construction and increased thrust on infrastructure projects. The domestic cement industry has witnessed a growth of ~8.0% CAGR over the last ten years. The effective capacity of India stands at the end of FY 2011 stands at 272 Million Tonnes (MT) with a total production of around 208 MT. Incidentally the average capacity utilization was above 90% from FY 07 FY 09. The southern region, where India Cement operates, is presently facing a huge demand supply mismatch. This region has an effective capacity of 92 MT with production at 63 MT. The main commodities used in cement production are coal, limestone, oil. Our analysis also touches upon a study of cement demand-supply trends and the change in input costs.

C. Suppliers and customers

The Company has a strong distribution network with over 10,000 stockists of whom 25% are dedicated.

D. Competitors
The major competitors of India Cements across the markets it operates are: ACC, Ambuja Cements, Dalmia Cements, Madras Cements, Chettinad Cements, Raasi Cement and Ultratech Cement

E. Auditors
The auditors of the firm are: Messrs. Brahmayya & Co., Chartered Accountants, Chennai. Messrs. P.S. Subramania Iyer & Co., Chartered Accountants, Chennai.

Financial Accounting

Analysis of India Cements Ltd.

F. Major Risk Factor

There has been a slowdown in the infrastructure and real estate sectors due to the rising cost of finance. This companys business is cyclical so there is a high impact when there is a downturn in economy. There is also a threat of double dip recession and in the present high interest scenario the prospects of infrastructure are looking bleak and this is the biggest risk for this firm. The company operates mainly in South India which faces a problem of overcapacity which is also an area of concern.

G. Competitive strength
India Cements sells nearly 90% of its produce in the South India market. This makes it extremely dependant on the vagaries of one region but it has a predominant market share of 28% here. This has allowed the company to keep prices high in a scenario of low demand. The company is over 60 years old which has allowed it to create a strong distribution network. The ownership of an IPL team provides it with a channel for publicity and is a valuable long term investment for the company. The company also owns a shipping division which allows it to place itself competitively with its peers in terms of transportations of fuel (coal).

H. The Peer
Prism Cement operates its plant from Madhya Pradesh. It has a capacity of 5.6 MT vs 15.5 MT of India Cements. The company also has a tiles division which accounts for 40% of its top line and bottom line. Considering the difference in their area of business and the fact that they compete in different regions, we feel it may not be a proper peer.

2. Analysis of Past Performance and Forward-looking Information, the Company View

The cement industry which registered spectacular growth in double digits over the last few years entered a phase of deceleration with the demand growth slackening to 4.7% during the year 2010-2011. In anticipation of growth cement manufactures had previously invested in creating capacity and over the last 3 years additional capacities of over 115 million tonnes have come online, half of which have been added in South India. The demand has been impacted due to slowdown in the infrastructure and real estate sectors due to the rising cost of finance. This capacity expansion coupled with low demand growth has led to fierce competition for market share causing a drop in cement prices during the year 2010-2011. The sales growth rate was the worst in the southern region (negative growth of 3.4%) of the country due to fall in demand in Andhra Pradesh by 17%, a nil growth in Kerala and a growth of only 4% in Tamil Nadu and Karnataka. While supply side pressures impacted the selling prices, there were also severe cost side pressures in the form of enhanced energy (coal and power) and transportation costs (diesel), increase in power tariff in Tamil Nadu and Andhra Pradesh (India Cements does not have captive plants unlike other some other cement players), increase in wages, and the impact of the increase in excise duty on cement from 8% to 10% announced in March 2010. This has resulted in a drop in profitability by nearly 80% for the year

Financial Accounting

Analysis of India Cements Ltd.

While the additional capacity of 1.5 MT was commissioned due to the tight market conditions the overall production was lower than that of previous year (10.15 MT vs 10.4 MT for FY 2010). The company has thus faced two pronged challenges in terms of low demand and high input costs effects which are reflected in the analysis below. The Company has access to huge limestone resources and plans to expand capacity by optimisation of existing plants as well as by acquisitions. India Cements Ltd has taken steps to upgrade/ enhance its cement production capacity to 15.6 million tonnes and has recently commissioned a plant in Rajasthan which will allow it to tap the Northern markets. The company has setup a 50 MW power plant in Tamil Nadu and orders have been placed for a similar capacity power plant in Andhra Pradesh both of which provide energy security at economic cost. It has also taken steps to reduce volatility in supply of coal, which is major fuel for its plants, through securing additional coal linkages from domestic coal companies and through mining rights for coal in Indonesia. The company during the year initiated steps to set up a division for infrastructure activities to boost cement consumption. The Division is in the process of finalizing the main areas of focus and is likely to commence activities during the current year. It is expected that the overall industry can possibly recover to normal capacity levels over the next 2 to 3 years. However, the industry in South can only be cautiously optimistic as the imbalance in demand supply position may take a long time to correct. Andhra Pradesh a major region for this firms sale (accounting for nearly 25% of the sales) has been racked with uncertainty due to Telengana demand which has led to a slowdown in projects there. With this issue still yet unresolved, the future is quite uncertain.

3. Trend Analysis
Analysis of the Profit after Tax/Revenue ratio We have analyzed the companies from the period of 2002. An analysis of the ratio of PAT/Revenue shows negative figures till 2005. In these years the average capacity utilization of the industry was between 70 75%. The GDP growth rates hovered between 4 6% during these years and profitability of the sector was severely affected. Meanwhile India Cements had amalgamated certain subsidiaries into it and had taken on their debt. This led to severed pressure on the margins. In FY 2003 and FY 2004 there was a thrust on infrastructure creation like Golden Quadrilateral Project were announced and certain sops for housing were announced. The industry now anticipated better days ahead. Because of the tough times previously no significant capacity had been added in the interim period. The boom period lasted from FY 2006 and till FY 2008. There was a tremendous growth in infrastructure and the resulting imbalance in demand and supply of cement led to an increase in cement realization rates. The capacity utilization jumped to ~90% in FY 2006 to nearly 100% in FY 2008. The ratio reached a decadal peak of 0.21 for India Cements and 0.27 for Prism Cements. The profitability shows a downtrend in FY 2009. While the demand was robust, cost of raw materials like imported coal and oil underwent a huge increase. In FY2010 excess capacity in South started coming into picture (companies had invested in increasing capacity during the boom years) so that by FY 2011 the utilization
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Analysis of India Cements Ltd.

for the South dropped to 66% leading to a severe cut in profitability. Due to rising finance cost there has been slowdown in investments also which has added to the overall problems of the industry. Analysis of Expenses/ Revenue Over the years India Cements has had higher expenses by revenue ratio to Prism Cement. Prism Cement operates in Northern India which has a higher ratio of demand to supply than South which broadly reflects in the expense to revenue trend.

Analysis of Revenue In line with the analysis above, the revenue for both companies shows a robust growth rate till FY 2008. The positive macro picture aided the huge growth and India Cements revenue doubled in three years from FY 2006 to FY 2008. Over the past 2 years growth has been tepid and in fact for the last financial year there has been a negative growth in the revenues. The contrasting growth of Prism Cement can be attributed to its tile division which makes up for 40% of its bottom line. The graphs of total revenue over the years, revenue growth rate and expense growth rate are presented in the appendix. The expense growth rate of the two companies is nearly similar.

4. Common Size Analysis

Profit and Loss Account Analysis Sales The sales volume has been declining over the past few years due to an oversupply in the southern region. In FY11 Net sales declined 10% YoY to 781 crore as the poor demand scenario took a toll on dispatches as it dipped by 26% YoY to 2.04 MT. However, the effect of lower sales volume was negated by growth in net realization by 23% YoY to 3828.4 per tonne thanks to a rise in cement prices. Operating Expenses The manufacturing expenses have gone by 57% (47% of total sales) due to the increase in the cost of raw materials like coal, limestone, fly ash, oil etc. Prism Cements operating expenses also went up to 66% of its sales as compared to 43% in 2008 showing a similar trend. SG&A Expenses This has also gone up by 59% due to a 51% increase in selling and distribution expenses & a 113% increase in administrative expenses. Prism Cements selling and administrative costs expenses also went up from 12% to 18% of sales (Mostly from an increase in distribution costs). Interest Expenses This has gone up by 29% due to increasing interest rates and rising debt in the balance sheet of India Cements. Prism Cement had initially no debt, but after its amalgamation with its subsidiaries, its interest expense now stands at 3% of total sales as compared to 4% for India Cements. Balance Sheet Analysis Inventory India Cements inventory position has increased by 51% from 08 to 11. This brings to light the inability of India Cements to generate sales due to the problem of oversupply in the region. The sales volume dipped by 26% YoY in FY11 thanks to a lot of pressure from competitors in the industry. Post the amalgamation the inventory position at Prism stands at 11% of total assets (no break up in annual report) Cash and Bank Balances India Cements cash position has dropped drastically by 82% which could potentially be a problem in meeting its debt obligations and working capital requirements. This may be a result of
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Analysis of India Cements Ltd.

its expansion activities like setting up new plants (in Rajasthan), power plants (in Tamil Nadu, Andhra Pradesh). Prism however has improved its cash position by 3.62 times post its amalgamation with its subsidiaries. Loans and Advances This has shown a 98% increase over the past 4 years for India Cements. In particular, Advances for Goods increased by over 115 times and the Advances to Subsidiaries increased by 206% over the same period. Prism on the other hand, amalgamated its subsidiaries into the parent company leading to a 380% increase in Loans and Advances.

5. Ratio Analysis
Comparison of Return on Equity The return on equity (RoE) has decreased from 19% to 2% over the period of our analysis from 2008 to 2011. This is due to the reduced profit margins in the business as a result of escalating raw material costs & lower sales. The RoE of Prism Cement has also declined from 39% to a lowly 8% over the same period highlighting the same issue. The RoE of Prism Cements is marginally higher than India Cements due to a higher leverage as illustrated by the Basic DuPont Analysis. Basic DuPont Analysis The Basic DuPont Analysis also reaffirms our analysis so far. The Profit Margin of India Cements has dipped from 21% to 2% while the Asset Turnover and Financial Leverage (Equity Multiplier) have remained flattish at 44% and 195% respectively. Prism Cement on the other hand increased its Leverage from 134% to 271% while its profit margin dipped from 27% to 3%. The Asset Turnover remained more or less constant at 104%. This reduced its RoE by 31%. Analysis of Turnover Ratios Inventory Turnover Ratio reduced by 73% during 2008-11. A reduction in sales volume due to the oversupply in the southern region & reduced demand further exacerbated the problem of rising inventories. Prism Cement also followed a similar trend with the Inventory Turnover Ratio dropping by 59% due to the same issues. The capacity utilization of the Cement industry fell to 76% in 2011 from 85% to tackle this issue of inventory buildup. Net Operating Assets Turnover Ratio registered a marginal drop of 17% to 0.56 largely due to a reduction in financial assets (a 92% decrease in cash in particular). Prism Cement on the other hand took on a lot of financial liabilities onto its balance sheet post the amalgamation with its subsidiaries in 2010. Its Net Operating Assets increased as a result by 4.7 times and the turnover ratio fell by 33%. Asset Turnover Ratio for India Cements has dipped marginally from 49% to 44% as the sales have increased by a lowly 15% over the period while the total assets have gone by 25% mostly due to an increase of 36% in the total debt. Similarly Prism Cement also registered a marginal drop in the asset turnover ratio of 4% mostly due to the lower growth in sales because of a challenging economic environment. Analysis of Liquidity Ratios Current Ratio at India Cements also depicts a similar story with the ratio dropping by 36% to a value of 0.67. The main change seems to have come from a steep decrease in the Cash and Bank Balance by 92%. Prism Cement is also witnessed a 50% drop in its Current Ratio which now stands at 1.22.

Financial Accounting

Analysis of India Cements Ltd.

Quick Ratio further highlights this problem of liquidity. The ratio for India Cements has reduced by 58% to 0.32. A 51% rise in the inventory position has further aggravated the liquidity problem. The supply overhang in southern India leading to a decrease in sales volume has led to a steep increase in inventory. Prism also registered a 57% drop in the Quick Ratio over the same period largely due the same reasons Long Term Debt and Interest Coverage Ratios Interest Coverage Ratio at India Cements shows a rather disturbing dip of 82%. The ratio, which now stands at 1.62, shows that the company is barely generating enough cash to meet its debt payments. This can be attributed to the rising interest rates and increasing debt in the balance sheet. Prism Cement added debt onto its balance sheet from 2010 and currently has an interest coverage ratio of 2.3. Long Term Debt to Equity Ratio at India Cements has reduced by 42% to 0.51. Though the debt has increased over the past 4 years, this has been supported by an increase in reserves and surplus. Besides that most of the increase in debt is through short term loans (cash credit facility increased 5 times in FY11 to 277 crores). Prism Cement on the other hand, which carried no debt initially, increased its ratio to 0.76 after its amalgamation with its subsidiaries in 2010.

6. Conclusion
While India Cements is a market leader in the South, and is a regular dividend paying company there are certain reservations in investing: a) Uncertain Revenue Outlook: Overcapacity: The overhang of oversupply is expected to last for the next 2 years. This will affect the sales growth. The company is focused on South India which is now well supplied. Input cost: Oil and coal costs are highly volatile and the current economic scenario pose a high cost pressure on the firm leading to low margins. Cash inflows to the firm are dipping due to lower margins. This coupled with high finance charges (because of rising interest rates) poses a serious threat to the company in terms of meeting its obligations. Due to the grim outlook on the infrastructure sector in general the company may find it difficult to generate sales volume growth in the near future. b) Having said that, the setting up of captive power plants and leased mines in Indonesia would lead to lower costs in the medium to long term. The setting up of new cement plant in Rajasthan will allow the company to tap the Northern markets. Due to these measures we expect India Cement to improve its performance significantly in the minimum to long term. Thus, on the basis of points as mentioned above, we expect the stock to underperform its peers in the short term.

Financial Accounting

Analysis of India Cements Ltd.

Appendix I Ratio Analysis

Ratio Analysis
India Cements Ratio Return on Equity Return on Sales or Profit Margin Asset Turnover Long Term Debt to Equity Return on Assets Leverage - Measure 1 Net Operating Profit Margin Net Operating Asset Turnover Return on Net Operating Assets Earnings per Share Debt to Equity Ratio Interest Coverage Current Ratio Quick Ratio Debtor Turnover Debt Collection Period Inventory Turnover Inventory Holding Period Operating Cycle 2011 0.02 2010 0.09 2009 0.12 2008 0.19 2011 0.08 Prism Cements 2010 0.21 2009 0.15 2008 0.39

0.02 0.44 0.51 0.01 1.95 0.53 0.56 0.29 2.22 0.60 1.62 0.67 0.32 13.92 25.87 7.51 48 74

0.09 0.50 0.54 0.05 1.84 0.57 0.65 0.37 12.49 0.52 4.42 0.97 0.57 15.03 23.95 25.93 14 38

0.12 0.49 0.61 0.06 1.94 0.59 0.65 0.38 15.32 0.55 7.49 0.69 0.43 9.82 36.67 26.36 14 50

0.21 0.49 0.88 0.10 1.91 0.65 0.67 0.44 23.97 0.55 9.03 1.06 0.77 9.93 36.26 27.47 13 49

0.03 1.04 0.76 0.03 2.71 0.34 1.73 0.59 1.95 0.97 2.28 1.22 0.79 12.83 28.07 12.95 28 56

0.09 1.09 0.39 0.10 2.24 0.41 1.80 0.74 5.11 0.69 8.12 1.39 0.95 13.55 26.57 14.81 24 51

0.15 0.75 0.00 0.11 1.32 0.50 1.52 0.76 4.31 0.00 47.76 1.92 1.44 0.00 0.00 26.28 14 14

0.27 1.08 0.00 0.29 1.34 0.57 2.58 1.47 8.1 0.00 99.67 2.44 1.84 264.01 1.36 31.66 11 13

Financial Accounting

Analysis of India Cements Ltd.

1. Return on Equity
0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 2008 2009 2010 2011 India Cement Prism Cement

2. Return on Sales or Profit Margin

0.3 0.25 0.2 0.15 0.1 0.05 0 2008 2009 2010 2011 India Cement Prism Cement

3. Asset Turnover
1.2 1 0.8 0.6 0.4 0.2 0 2008 2009 2010 2011 India Cement Prism Cement

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Analysis of India Cements Ltd.

4. Return on Assets
0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 2008 2009 2010 2011 India Cement Prism Cement

5. Leverage - Measure 1
3 2.5 2 1.5 1 0.5 0 2008 2009 2010 2011 India Cement Prism Cement

6. Net Operating Profit Margin

0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2008 2009 2010 2011
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India Cement Prism Cement

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Analysis of India Cements Ltd.

7. Net Operating Asset Turnover 3 2.5 2 1.5 1 0.5 0 2008 2009 2010 2011 India Cement Prism Cement

8. Return on Net Operating Assets 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2008 2009 2010 2011 India Cement Prism Cement

9. Earnings per Share 30 25 20 15 10 5 0 2008 2009 2010 2011 India Cement Prism Cement

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Analysis of India Cements Ltd.

10. Debt to Equity Ratio 1.2 1 0.8 0.6 0.4 0.2 0 2008 2009 2010 2011 India Cement Prism Cement

11. Interest Coverage 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2008 2009 2010 2011 India Cement Prism Cement

12. Current Ratio 3 2.5 2 1.5 1 0.5 0 2008 2009 2010 2011 India Cement Prism Cement

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Analysis of India Cements Ltd.

13. Quick Ratio 2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2008 14. Debt Collection Period 300 250 200 150 100 50 0 2008 2009 2010 2011 India Cement Prism Cement 2009 2010 2011 India Cement Prism Cement

15. Debtor Turnover 40 35 30 25 20 15 10 5 0 2008 2009 2010 2011 India Cement Prism Cement

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Analysis of India Cements Ltd.

16. Inventory Turnover 35 30 25 20 15 10 5 0 2008 2009 2010 2011 India Cement Prism Cement

17. Inventory Holding Period 60 50 40 30 20 10 0 2008 2009 2010 2011 India Cement Prism Cement

18. Operating Cycle 80 70 60 50 40 30 20 10 0 2008 2009 2010 2011 India Cement Prism Cement

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Analysis of India Cements Ltd.

Appendix II Indian Cement Industry

The major competitors of India Cements across the markets it operates are: ACC, Ambuja, Dalmia Cements, Madras Cements, Chettinad Cements, Ultratech Cement and Grasim Industries. Its key markets are Andhra Pradesh, Tamil Nadu, Kerala, parts of Karnataka and Maharashtra. In TN following data is available as of 31 March 2010: 9 8 7 6 5 4 3 2 1 0 Grasim Industries India Cements Tamil Nadu Cements Madras Cements Chettinad Cement Dalmia Cement UltraTech Cement 1.4 0.9 1.1 5.86 4.92 6.5 8.2

Production (in Million Tonnes) In Karnataka following data is available as of 31 March 2010: 8 7 6 5 4 3 2 1 0 1.5 1.4 3 2.26 2.5 4.4 3.6 5.6 4 7.09 6.5

Production (in million tonnes)

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Financial Accounting

Analysis of India Cements Ltd.

India Cement produces nearly 90% of its cement in these two states. Cement industry trends in India, figures in million tonnes (past 5 years): 300 250 204 200 167 150 100 50 0 FY 07 FY 08 Capacity FY 09 Production FY 10 FY 11 155 172 181 167

272 228 199 208

Thus there is a growing situation of oversupply in the overall industry. The capacity indicated is the effective capacity available at the end of the year. Cement industry trends in South India, figures in million tonnes (past 5 years): 100 90 80 70 60 50 40 30 20 10 0 FY07 FY08 Capacity FY09 Production FY10 Consumption FY11 54 57 50 44 54 49 67 60 54 66 59 63 63 80 92

A situation of high supply and low demand prevails which is expected to last at least up to the next two years. Sources: Cement manufacturers association, ICICI Direct
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Analysis of India Cements Ltd.

Appendix-III Trend Analysis

It can be observed that the revenue of Prism Cement undergoes a big jump from FY 2009 to FY 2010. This happened because the company amalgamated RMC India Pvt. Ltd and H & R Johnson India Pvt. Ltd into itself, with effect from April 2009. Prism Cement also changed its financial year period in 2009 from June to March which explains the gaps in calculation of expense growth rate revenue growth rate. 1. Plot of total revenues

Total revenue per year

4000 Total Revenue (in Cr.) 3500 3000 2500 2000 1500 1000 500 0 Prism Cement 2011 3389 2010 2860 3808 2009 657 3475 2008 892 3088 2007 771 2269 2006 570 1536 2005 448 1249 2004 388 1040 2003 335 834 2002 354 1132 India Cements Prism Cement

India Cements 3540

Year

2. Growth rate in revenue

Revenue growth rate

60 50 40 30 20 10 0 -10 -20 -30 -40 Growth rate in %age

Prism Cement India Cements

2011 18 -7

2010 10

2009 13

2008 16 36

2007 35 48 Year

2006 27 23

2005 15 20

2004 16 25

2003 -5 -26

Prism Cement India Cements

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Analysis of India Cements Ltd.

3. Total expenses by sales 1.60 1.40 1.20 1.00 Ratio 0.80 0.60 0.40 0.20 0.00 Prism Cement India Cements 2011 0.96 0.98 2010 0.87 0.87 2009 0.77 0.79 2008 0.65 0.71 2007 0.62 0.78 Year 2006 0.84 0.97 2005 0.91 1.00 2004 0.98 1.11 2003 1.11 1.37 Prism Cement India Cements

Expenses/ Revenue over years

4. Growth rate in expenses 35 30 %age increase in expenses 25 20 15 10 5 0 -5 Prism Cement India Cements Prism Cement India Cements

Expenses growth rate

2011 31 4

2010 21

2009 25

2008 21 24

2007 -1 20 Year

2006 18 19

2005 7 8

2004 2 1

2003 1 0

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Analysis of India Cements Ltd.

5. Ratio of net profit to sales 0.30

Ratio of PAT/ Revenue

0.20

0.10 Ratio

0.00 Prism Cement -0.10 India Cements

-0.20

-0.30 Prism Cement India Cements

2011 0.03 0.02

2010 0.09 0.09

2009 0.15 0.12

2008 0.27 0.21

2007 0.25 0.21

2006 0.11 0.03

2005 0.06 0.00

2004 -0.02 -0.09

2003 -0.09 -0.24

2002 -0.03 0.00

Year

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Analysis of India Cements Ltd.

Common Size B/S

India Cements 2011 Share Capital Reserves & Surplus Total ShareHolders' Equity Minority Interests Secured Loans Unsecured Loans Current Liabilities & Provisions Deferred Tax Liabilities Total Funds Fixed Assets Investments Inventories Sundry Debtors Cash & Bank Balances Curent Assets Other Current Assets Loans & Advances Deferred Tax Assets Total Assets 4% 48% 51% 0% 15% 16% 14% 4% 100% 61% 2% 6% 3% 0% 12% 0% 26% 0% 100% 2010 4% 50% 54% 0% 11% 17% 14% 4% 100% 61% 4% 6% 3% 1% 14% 0% 25% 0% 100% 2009 4% 48% 52% 0% 15% 14% 16% 4% 100% 67% 2% 5% 5% 1% 14% 0% 19% 0% 100% 2008 4% 48% 52% 0% 15% 13% 16% 4% 100% 64% 2% 5% 5% 7% 19% 1% 17% 0% 100% 2011 15% 22% 37% 0% 28% 7% 23% 4% 100% 59% 11% 11% 8% 2% 32% 0% 8% 0% 100% Prism Cements 2010 19% 25% 45% 0% 28% 2% 21% 4% 100% 61% 12% 10% 8% 2% 33% 0% 6% 0% 100% 2009 34% 42% 76% 0% 0% 0% 18% 6% 100% 57% 23% 9% 0% 3% 35% 0% 8% 0% 100% 2008 36% 39% 75% 0% 0% 0% 18% 7% 100% 49% 31% 11% 0% 2% 44% 0% 7% 0% 100%

Common Size P&L

India Cements 2011 Sales & Other Income Operating Expenses Operating Income S,G & A Expense Interest Expense Total Expenses Profit Before Tax & Extra Ordinary Items Exceptional Items Profit Before Tax Tax Profit After Tax 100% -47% 53% -46% -4% -98% 2% 0% 3% -1% 2% 2010 100% -43% 57% -40% -4% -87% 13% 1% 14% -5% 9% 2009 100% -41% 59% -35% -3% -79% 21% -2% 19% -6% 12% 2008 100% -35% 65% -33% -4% -71% 29% -1% 27% -7% 21% 2011 100% -66% 34% -28% -3% -96% 4% 0% 4% -1% 3% Prism Cements 2010 100% -59% 41% -26% -2% -87% 13% -1% 13% -4% 9% 2009 100% -50% 50% -27% 0% -77% 23% 0% 23% -8% 15% 2008 100% -43% 57% -21% 0% -65% 35% 0% 35% -8% 27%

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