Financial Analysis and Ratio Analysis of Binani Cement Ltd

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 Pradip Prajapati Rahul Varsadiya Aniket Patel -90 - 95 -115 -121
NSVKMS MBA COLLEGE, VISNAGAR.
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 its 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 Preface Acknowledgement Executive Summary Ch-1 1.1 1.2 1.3 1.4 1.5 Ch-2 2.1 2.2 2.3 2.4 2.5 Ch-3 3.1 3.2 3.3 3.4 4 5 6 7 8 GENERAL INFORMATION Profile the company Mission of the company Leadership Global Presence Marketing Strategy Of Company FINANCIAL ANALYSIS Balance sheet Profit&Loss A/c Commensize statement Trade Analysis Cashfiow Statement RATIO ANALYSIS Profitibility ratios Liquidity ratios Turnover ratios Livrage ratios Overall analysis Conclusion and Summary Recommendations Biblography Annexure Page No.
THE PROFILE OF COMPANY

BINANI CEMENT LIMITED
Executives Of The Company
S.No Name 1 2 3 4 5 6 7 8 9 10 Mr. Shishir Jain Mr. Braj Binani Ms. Nidhi Binani Mr. Sanjai Vohra Mr. V Subramanian Dr. V C Shah Mr. S Padmakumar Mr. M K Chattopadhyaya Mr. Ramakrishna Moogimane Mr. P Acharya Designation Alternate Director Chairman Director Director Director Director Director Director Director Director
(Subsidiary
of Binani Industries Limited)
Registered Office 706 Om Tower, 32, Chowringhee Road, Kolkata, West Bengal 700071 Tel: 22882508, 22882509, Fax: 22882510, Email: bclipo@binani.net Website: www.binani.com Registrar & Share Transfer Agent Intime 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 1 2 3 4 Mr. Mr. Mr. Mr. R S Bhati R S Joshi R K Ghia Digvijay Singh Designation Dy. GM (Mech.) & Unit Head, CGU Exe. Vice President Vice President (Technical) Vice President (Marketing) Operatoin Vice President (Marketing) Vice President (Marketing) Chief Financial Officer Exe. Vice President Exe. Vice President Asst. VP (Accounts) Sr. Vice President (CPP)
5 Mr. Darshan Lal 6 Mr. Kauslesh Maheshwari 7 Mr. B M Khara 8 Mr. M K Chattopadhyaya 9 Mr. Krishan Goenka 10 Mr. Mahendra Mehta 11 Mr. K K Jain 12 Mr. S L Parakh Auditors M/s. Deloitte Haskins & Sells M/s Kanu Joshi Associates Bankers Punjab National Bank Dena Bank Oriental Bank of Commerce State Bank of Indore Jammu & Kashmir Bank Limited Audit Committee Mr. S. Padmakumar Dr. V.C. Shah Mr. V. Subramanian Mr. Sushil Bhatte
Various Company Locations Sr.no. 1 Location type Address
5 6
703 - 704 Sakar 2 Ellisbridge Sales & Marketing Ahmedabad , Gujarat - India Office Pin Code :380006 Fax 212 -3 Somdutt Chambers 2 9 Bhikaji Cama Place Sales & Marketing Delhi , Delhi - India Office Pin Code :110066 Fax :, D-35/A, Subhash Marg,C Schem, Sales & Marketing Jaipur , Rajasthan - India Office Pin Code :302001 Fax :, 706 Om Tower, 32 Chowringhee Road Kolkata , West Bengal - India Registered Office Pin Code :700071 Phone :22882508,22882509,, Fax :22882510, Village: Sirohi, Taluka: Neem Ka Thana Dist. Sikar Factory/plant Sikar , Rajasthan - India Pin Code : Branch Office Mercantile Chambers 12 Mumbai , Maharashtra - India Pin Code :400001 Phone :22690506 - 10,22640040 - 44,, Fax :91 22 22690003,
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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 companys 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
NSVKMS MBA COLLEGE, VISNAGAR. 11
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 customerdriven, 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-ofthe-art technology platform.
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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.
Milestones
An 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 Binanis 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.
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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.
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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
15
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. Whats 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.
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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 companys widespread distribution network, has led to significant expansion of its market share in Rajasthan, Gujarat and other crucial markets in North India. Accreditation In 2008, the plant capacity, through expansion and by debottlenecking, 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 .
17
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 companys Pragati Quality Circle bagged the Excellent Award and Amar Jyoti Quality Circle got the Distinguished Award The company has also been awarded the Certificate of Merit and Commendation Certificates by Honble Minister of Power, Government of India for energy conservation in the Cement Industries for the year 2006.
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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 53 PPC (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 Groups Social Initiatives Instituted 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 Channels The 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 Rajasthan Gujarat Haryana Delhi Punjab Uttar Pradesh and Dealers 632 527 256 93 113 119
Products
19
Marketing Strategy Of Company

Expand Capacity to meet additional Demand in North India North India, the Companys 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 Companys 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 Companys product mix and enhancing products The Companys 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 Companys product and brand
20
strategy. On account of superior quality of its product
the Companys 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 network The Companys 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 Companys products. The Companys 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 Companys the latest distribution pattern of total sales to different markets with its market share. State Distribution Market Share Rank Rajasthan Gujarat Haryana Delhi Punjab 46% 28% 12% 4% 4% 13.4% 3 7.6% 7 5.7% 6 2.8% 1.5% 12 12
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Reducing power and fuel costs The new power plant and the kiln at the Companys 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 Companys dependence on imported coal as a fuel. Developing the Companys product mix and enhancing products The Companys 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 Companys brand To promote the Companys 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 Companys 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.
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23
Profit&Loss account
Mar ' 10 Income : Operating Income Expenditure Material Consumed Manufacturing Expenses Personnel Expenses Selling Expenses Adminstrative Expenses Expenses Capitalised Cost Of Sales Operating Profit Other Recurring Income Adjusted PBDIT Financial Expenses Depreciation Other Write offs Adjusted PBT Tax Charges Adjusted PAT Non Recurring Items Other Non Cash adjustments Reported Net Profit Earnigs Before Appropriation Equity Dividend Preference Dividend Dividend Tax Retained Earnings 963.04 73.65 267.95 25.50 231.67 23.47 0.00 622.23 340.80 6.78 347.59 46.47 55.67 0.00 245.45 69.02 176.43 -0.61 0.00 175.82 227.61 50.78 0.00 8.63 168.21 Mar ' 09 678.43 85.21 163.32 18.78 162.57 14.59 0.00 444.47 233.96 2.76 236.72 32.62 43.46 0.00 160.64 60.96 99.68 -4.07 0.00 95.61 144.32 0.00 40.62 6.90 96.79 Mar ' 08 490.28 75.80 158.45 15.09 90.98 15.65 0.00 355.97 134.31 3.27 137.58 34.17 42.91 0.00 60.50 5.12 55.38 -2.42 0.00 52.96 58.51 0.00 10.06 1.41 47.04 Mar' 07 438.80 70.76 146.91 13.56 87.99 13.85 0.00 333.07 105.73 0.78 106.51 52.35 42.00 0.00 12.15 0.55 11.60 -5.16 0.00 6.45 14.74 0.00 0.00 0.00 14.74
Rs in cr. Mar ' 06 374.99 46.84 119.30 13.19 0.00 98.00 0.00 277.33 97.66 4.12 101.78 56.02 41.28 0.00 4.48 0.34 4.13 0.00 -0.67 4.13 3.79 0.00 0.00 0.00 3.79
24
FINANCIAL STATEMENTS BALANCE SHEET

Rs in Cr. Mar10 SOURCES OF FUNDS EquityShare Capital 203.10 Share Application Money 0.00 Preference Share Capital 0.00 Reserves & Surplus 214.54 Loan Funds Secured Loans 732.33 Unsecured Loans 38.14 Total 1,188.11 USES OF FUNDS Fixed Assets Gross Block 1,445.39 Less : Revaluation Reserve 0.00 Less:Accumu dep 397.11 Net Block 1,048.28 Capital Workin-progress 171.47 Investments 46.77 Net Current Assets Curr asse&loan addvance 502.11 Less:curr asset&liabilities 580.52 Total Net Current Assets -78.42 Misc exp not written 0.00 Total 1,188.10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06
203.10 0.00 0.00 98.12 658.77 32.23 992.22
203.10 0.00 0.00 50.04 534.36 0.00 787.50
217.07 0.00 0.00 17.74 487.86 9.90 732.57
217.07 0.00 0.00 3.79 413.56 1.65 636.07
839.99 0.00 347.03 492.96 517.37 0.00
803.95 0.00 308.07 495.88 100.02 0.00
791.95 0.00 266.99 524.96 5.16 23.09
767.89 0.00 228.68 539.21 5.06 23.25
284.63 302.72 -18.09 0.00 992.24
290.08 98.47 191.61 0.00 787.51
265.09 85.73 179.37 0.00 732.58
135.37 66.82 68.55 0.00 636.07
25
Note : Book Value of Unquoted Investments Market Value of Quoted Investments Contingent liabilities Number of Equity shares outstanding (in Lacs)
46.77 0.00 392.38
0.00 0.00 156.98
0.00 0.00 427.12
23.16 0.00 3.20
0.00 0.00 0.00
2,031.01
2,031.01
2,031.01
2,170.68
2,170.70
26
COMMON SIZE STATEMENT

PART-A PROFIT AND LOSS ACCOUNT Mar ' 10 100% Mar ' 09 100% Mar ' 08 100% Mar ' 07 100% Mar '06 100%
Operating Income (Net Sales) Material Consumed Manufacturing Expenses Personnel Expenses Adminstrative Expenses Expenses Capitalised Cost Of Sales Operating Profit Other Recurring Income Adjusted PBDIT Financial Expenses Depreciation Other Write offs Adjusted PBT Tax Charges Adjusted PAT Non Recurring Items Other Non Cash adjustments Reported Net Profit Earnigs Before Appropriation Equity Dividend Preference Dividend Dividend Tax Retained Earnings
7.64% 27.82% 2.64% 24.05% 2.43% 0 64.61% 35.38% 0.70% 36.09% 4.82% 5.78% 0 25.48% 7.16% 18.32% -0.063% 0
12.55% 24.07% 2.76% 23.96% 2.150% 0 65.51% 34.48% 0.40%
15.46% 32.31% 3.077% 18.55% 3.19% 0 72.60% 27.39% 0.66%
16.12% 33.47% 3.09% 20.05% 3.15% 0 75.90% 24.09% 0.17% 24.27% 11.93% 9.57% 0 2.76%
12.49% 31.81% 3.51% 0 26.13% 0 73.95% 26.04% 1.098% 27.14% 14.93% 11.00% 0 1.19%
34.89232 28.06% 4.80% 6.405% 0 23.67% 8.98% 14.69% -0.59% 0 6.96% 8.75% 0 12.33% 1.044% 11.29% -0.49% 0 10.80% 11.93% 0 2.051% 0.287% 9.59%
0.125342 0.090% 2.64% -1.175% 0 1.469% 3.359% 0 0 0 3.35% 1.1% 0 -0.17% 1.101% 1.010% 0 0 0 1.01%
18.256% 14.09% 23.63% 5.27% 0 0.89% 17.46% 21.27% 0 5.98% 1.01% 14.26%
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PART-B BALANCE SHEET

SOURCES OF FUNDS Owner's Fund Equity Share Capital Share Application Money Preference Share Capital Reserves & Surplus Loan Funds Secured Loans Unsecured Loans Total USES OF FUNDS Fixed Assets Gross Block Less : Revaluation Reserve Less : Accumulated Depreciation Net Block Capital Work-inprogress Investments Net Current Assets Current Assets, Loans & Advances Less : Current Liabilities & Provisions Total Net Current Assets Miscellaneous expenses not written Total Mar ' 10 17.09% 0 0 18.05% 61.63% 3.21% 100% Mar ' 09 20.46% 0 0 9.88% 66.39% 3.248% 100% Mar 08 25.79% 0 0 6.35% 67.85% 0 100% Mar 07 29.63% 0 0 2.42% 66.59% 1.351% 100% Mar 06 34.12% 0 0 0.595% 65.01% 0.259% 100%
121.65% 0 33.42% 88.23% 14.43% 3.936%
84.655% 0 34.97% 49.68% 52.14% 0
102.0% 0
108.1% 0
120.7% 0
39.12% 36.44% 35.95% 62.96% 71.66% 84.77% 12.70% 0.70% 0 3.15% 0.79% 3.65%
42.26% 48.86% -6.6004 0 100%
28.68% 30.50% -1.82315 0 100%
36.83% 12.50%
36.18% 11.70%
21.28% 10.50%
24.33% 24.48% 10.7% 0 100% 0 100% 0 100%
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TREND ANALYSIS
PART-B BALANCE SHEET
Mar ' 10 SOURCES OF FUNDS Owner's Fund Equity Share Capital Share Application Money Preference Share Capital Reserves & Surplus Loan Funds Secured Loans Unsecured Loans Total USES OF FUNDS Fixed Assets Gross Block Less : Revaluation Reserve Less : Accumulated Depreciation Net Block Capital Work-in-progress Investments Net Current Assets Current Assets, Loans & Advances Less : Current Liabilities & Provisions Total Net Current Assets Miscellaneous expenses not written Total Book Value of Unquoted Investments Market Value of Quoted Investments Contingent liabilities 188.2288 0 173.6531 194.4103 3388.735 109.3894 0 151.7535 91.42264 10224.7 104.696 0 134.7166 91.96417 1976.68 0 103.1333 0 116.7527 97.35724 101.9763 100 0 100 100 100 177.0795 2311.515 159.2925 1953.333 129.2098 0 117.966 600 100 100 93.56429 0 0 5660.686 93.56429 0 0 2588.918 93.56429 0 0 1320.317 100 0 0 468.0739 100 0 0 100 Mar ' 09 Mar ' 08 Mar ' 07 Mar06
186.7892 155.9923 123.8071 115.1713 100
201.1613 0
99.31183 100
370.9167 868.7818 -114.398 0 186.7876 46.77 0 392.38
210.2608 453.038 -26.3895 0 155.9954 0 0 156.98
214.2868 147.3661
195.8263 128.2999
100 100 100 0 100 0 0 0
279.5186 261.663 0 123.8087 0 0 427.12 0 115.1729 23.16 0 3.2
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PART-B Profit & loss Account

Income : Operating Income Expenditure Material Consumed Manufacturing Expenses Personnel Expenses Selling Expenses Adminstrative Expenses Expenses Capitalised Cost Of Sales Operating Profit Other Recurring Income Adjusted PBDIT Financial Expenses Depreciation Other Write offs Adjusted PBT Tax Charges Adjusted PAT Non Recurring Items Other Non Cash adjustments Reported Net Profit Earnigs Before Appropriation Equity Dividend Preference Dividend Dividend Tax Retained Earnings Mar ' 10
Mar ' 09
Mar ' 08
Mar ' 07
Mar' 06
256.8175 180.9195 130.7448 157.2374 224.6018 193.3283 231.67 23.94898 0 181.9172 136.8986 142.3806 162.57 14.88776 0 161.8275 132.8164 114.4049 90,98 15.96939 0
117.0165 100 151.0675 123.1433 102.8052 87.99 14.13265 0 100 100 100 0 100 0
224.3645 160.2676 128.3561 348.9658 239.5658 137.5282 164.5631 66.99029 79.36893 341.5111 232.5801 135.1739 82.95252 58.2292 134.8595 105.281 0 0 60.99607 103.9486 0
120.0988 100 108.2634 100 18.93204 100 104.6473 100 93.44877 100 101.7442 100 0 0 271.2054 100 161.7647 100 280.8717 100 -5.16 0 0 100
5478.795 3585.714 1350.446 20300 17929.41 1505.882
4271.913 2413.559 1340.92 -0.61 -4.07 -2.42 0 0 0
4257.143 2315.012 1282.324 6005.541 3807.916 1543.799 50.78 0 8.63 0 40.62 6.9 0 10.06 1.41
156.1743 100 388.9182 100 0 0 0 0 0 0
4438.259 2553.826 1241.161
388.9182 100
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CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
(Rs Lakhs)
PARTICULARS A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax Adjustments for : Depreciation/Amortization Interest and Finance Charges Exchange Fluctuation (Net) (Profit)/ Loss on Sale/Discard of Fixed Assets Dividend Received Interest Income Operating Profit before working capital changes Adjustments for : Inventories Trade and Other Receivables Trade and Other Payables Cash Generated from Operations Direct Taxes Paid / Refunds Net Cash from Operating Activities B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets (including capital work-in-progress) Sale of Fixed Assets Interest and Dividend Income Received Investments in Subsidiaries / Associates Other add Net Cash from / (in) Investing Activities C. CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Long Term Borrowings Repayment of Long Term Borrowings
For the year ended 31st March, 2010 42,161.24 9,166.20 7,850.58 619.28 -195.15 -196.11 59,406.04
For the year ended 31st March, 2009 15,455.77 8,031.35 7,152.31 -283.72 330.29 -46.24 -192.94 30,446.82
4,255.76 8,013.34 -23,008.89 48,666.25 -3,888.36 44,777.89
490.52 907.7 16,407.54 48,252.58 -2,027.90 46,224.68
-12,599.59 297.58 -16,327.33 -474.77 -29,104.11
-16,530.45 48.05 213.44 -16,453.32 -511.03 -33,233.31
53,395.21 -18,190.02
11,767.78 -27,429.45
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Dividend / Dividend Distribution Tax Paid Repayment bank borrow money Proceeds from Trade Deposits Interest and Finance Charges Paid Proceeds from Short Terms Borrowings Repayment of Short Terms Borrowings Net Cash from / (in) Financing Activities Net I/D cash Equlibity OPENING CASH AND CASH EQUIVALENTS CLOSING CASH AND CASH EQUIVALENTS
-4,989.99 -729.19 395.01 -9,332.67 15,000.00 -29,000.00 6,548.35 22,222.13 8,721.46 30,943.59
-5,940.46 -2,476.21 300.72 -9,085.16 22,500.00 -3,500.00 -13,862.78 -871.41 9,592.87 8,721.46
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ANALYSIS OF COMMON SIZE STATEMENTS Balance Sheet
Soure of Fund
18.05%
Se cure d Loans Re s e rve s & Surplus 17.09% 61.63% 3.21% Equity Share Capital Uns e cure d Loans
Now lets 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 thats 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 companys 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
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SOURCE OF CAPITAL
200 180 160 140 120 100 80 60 40 20 0 Mar ' 10 Mar ' 09 Mar 08 Mar ' 07 Mar ' 06
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
250 200 150 100 50 0 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06
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.
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NET CURRENT ASSETS

300 250 200 150 100 50 0 -50 -100 -150 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06
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.
Net Block 250 200 150 100 50 0 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar '06
We can interpret that its equal like first three year but net block goes to highest and duel than base year in March 2010.
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Reported Net Profit 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06
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.
Operating Income 300 250 200 150 100 50 0 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06
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.
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Sales During 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.
45 40 35 30 25 20 15 10 5 0 2005-06 2006-07 2007-08 2008-09 2009-10
Sales
37
RATIO ANALYSIS
38
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 comparisons between 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 ratios Financial 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. .
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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. 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 sales Operating 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 / Sales Return on equity (ROE) = Net profits after taxes / Stockholders' equity or tangible net worth = Net profit / Equity Return on investment (ROI ratio or Du Pont ratio= Net income / Total Assets Asset turnover = Sales / Assets Return 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) Risk adjusted return on capital (RAROC) = (Expected Return)/(Economic Capital) or (Expected Return)/(Value at risk) Liquidity Ratios Liquidity ratios measure the availability of cash to pay debt. Current ratio = Current assets / Current liabilities Acid-test ratio (Quick ratio) = (Current assets [Inventories + Prepayments]) / Current liabilities Receivables Turnover Ratio = Net credit sales/ Average net receivables Inventory turnover ratio = Cost of goods sold / Average inventory Debt Ratios Debt 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' equity Long-term debt/Total asset (LD/TA) ratio = long-term debt / Total assets Times interest-earned ratio = Earnings before interest and taxes EBIT / Annual interest expense Debt service coverage ratio = Net operating income / Total debt service Turn Over Ratios Inventory turnover ratio Fixed Assets turn over ratio Total Assets turn over ratio Profitability Ratios
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Operating 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 Mar 10 Operating Revenue Operating Profit Operating Margin (%) ' Mar 09 ' Mar 08 ' Mar 07 ' Mar 06 '
963.04 678.43 490.28 438.8 340.8 35.38
374.99
233.96 134.31 105.73 97.66 34.48 27.39 24.09 26.04
Operating Margin (%) 40 35 30 25 20 15 10 5 0 35.38
34.48 27.39 24.09 26.04
Mar ' 10
Mar ' 09
Mar ' 08
Mar ' 07
Mar ' 06
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.
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Gross Profit RATIO

Gross Profit = Revenue Cost of Goods Sold
= (Revenue - Cost of sales) / Revenue

Gross Profit Margin (%) 35 30 25 20 15 10 5 0 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06
29.6
28.07 18.64 14.52 15.03
(Net sales - Cost of goods sold) / Net sales = Operating earnings / Net sales Mar 10 ' Mar 09 28.07 ' Mar 08 18.64 ' Mar 07 14.52
Gross Profit 29.6 Margin (%) Interpretation
' Mar 06 15.03
'
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.
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Net Profit RATIO
Profit 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 = Net profits after taxes / Sales Sales Reported Net Profit Net Profit Margin (%) Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 963.04 678.44 490.28 438.8 175.82 95.61 52.96 6.45 18.12 14.03 10.73 1.46
Net Profit Margin (%) 20 15 10 5 0 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 18.12 14.03 10.73
1.46
1.09
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. Its due to high net sales.
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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 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 Net Profit(Rs. cr) 175.82 Equity Share Capital 203.1 ROE 0.865682 ROE(%) 86.5682
ROE(%) 100 80 60 40 20 0 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 47.0753 26.0758 2.9714 1.9026
Mar ' 09 95.61 203.1 0.470753 47.0753
Mar ' 08 52.96 203.1 0.260758 26.0758
Mar ' 07 6.45 217.07 0.029714 2.9714
Mar ' 06 4.13 217.07 0.019026 1.9026
86.5682
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.
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Returns on share holders Funds

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 owners 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 Net Profit 175.82 Equity Share Capital 203.1 Reserves 214.54 ROSHF(%) 42.09846 Mar ' 09 95.61 203.1 98.12 31.74092 Mar ' 08 52.96 203.1 50.04 20.92123 Mar ' 07 6.45 217.07 17.74 2.746902 Mar ' 06 4.13 217.07 3.79 1.869963
ROSHF(%) 50 40 30 20 10 0 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 2.746902 1.869963 42.09846 31.74092 20.92123
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.
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Return on investment
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)
Fixed Assets Net Profit Total Net Assets ROI(%)
Mar ' 10 1219.75 175.82 Current -78.42
Mar ' 09 839.99 95.61 -18.09
Mar ' 08 803.95 52.96 191.61
Mar ' 07 791.95 6.45 179.37
Mar ' 06 767.89 4.13 68.55
15.40483 11.6328 5.319619 0.664045 0.493759

ROI(%)
20 15.40483 15 10 5.319619 5 0.664045 0 Mar '10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 0.493759 11.6328
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.
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LIQUIDITY RATIOS
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.
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CURRENT RATIO
The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months. It compares a firm's current assets to its current liabilities. It is expressed as follows:
Current ratio = Current assets Current liabilities
Mar ' 10 CurrenLiabilities Provisions CurrentAssets,Loans Advances Current Ratio 580.52 502.11 0.86
Mar ' 09 Mar ' 08 302.72 284.63 0.94 98.47 290.08 2.95
Mar ' 07 85.73 265.09 3.09
Mar ' 06 66.82 135.37 2.03
Current Ratio 3.5 3 2.5 2 1.5 1 0.5 0 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 0.86 0.94 2.03 2.95 3.09
Interpretation This 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,
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QUICK RATIO
Acid-test ratio (Quick ratio) = (Current assets [Inventories + Prepayments]) / Current liabilities Mar ' 10 217.44 580.52 502.11 284.67 0.49 Mar ' 09 57.25 302.72 284.63 227.38 0.61 Mar ' 08 33.55 98.47 290.08 256.53 2.61 Mar ' 07 33.6 85.73 265.09 231.49 2.70 Mar ' 06 39.59 66.82 135.37 95.78 1.43
Inventories Current Liabilities Current Assets Quick Assets Quick Ratio
Quick Ratio 3 2.5 2 1.5 1 0.5 0 Mar ' 10 Mar '09 Mar ' 08 Mar ' 07 Mar ' 06 0.49 0.61 1.43 2.61 2.7
Interpretation The 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 Mar09 its to lesser than other year means shortage of liquidity for company to pay its obligations.
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CASH RATIO
, = cash and bank balance / current liabilities Mar ' 10 Current Liabilities 580.52 Cash and Bank Balance 43.28 Cash Ratio Mar ' 09 302.72 27.53 Mar ' 08 98.47 15.66 Mar ' 07 85.73 8.81 Mar ' 06 66.82 8.82 0.131996
0.074554 0.090942 0.159033 0.102764
Cash Ratio 0.2 0.159033 0.15 0.1 0.05 0 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 0.090942 0.074554 0.102764 0.131996
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 Mar09 the cash is lower than current liabilities.
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TURNOVER RATIOS
INVENTORY TURNOVER RATIO
Inventory turnover ratio = Cost of goods sold / Average inventory Average days to sell the inventory = 365 / Inventory Turnover Ratio
Cost Of Sales Opening stock Closing stock Average Stock Inventory Turn (times)
over
Ratio
Mar ' 10 622.23 12.9234 68.7872 40.8553 15
Mar ' 09 444.47 6.1945 12.9234 9.55895 46
Mar ' 08 355.97 9.7795 6.1945 7.987 45
Inventory Turn over Ratio (times) 50 40 30 20 10 0 Mar ' 10 Mar ' 09 Mar ' 08 15 46 45
Interpretation It 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 Mar09 due to highest average stock during that year.
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Fixed 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:
Fixed Assets Sales Fixed Assets Ratio Mar ' 10 1219.75 963.04 0.66 Mar ' 09 839.99 678.44 0.80 Mar ' 08 803.95 490.28 0.60 Mar ' 07 791.95 438.8 0.55 Mar ' 06 767.89 374.99 0.48
FIXED ASSETS TURN OVER RATIOS
Fixed Assets Turnover Ratio 1 0.8 0.8 0.6 0.4 0.2 0 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 0.66 0.6 0.55
0.48
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 Mar09, 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.
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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. 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 Net Sales 963.04 Total Assets 1188.1 Total Assets Turn over Ratio 0.810572 Mar ' 09 678.44 992.24 Mar ' 08 490.28 787.51 Mar ' 07 438.8 732.58 Mar ' 06 374.99 636.07
0.683746 0.62257 0.598979 0.589542
Total Assets Turn over Ratio 1 0.810572 0.8 0.6 0.4 0.2 0 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 0.683746 0.62257 0.598979 0.589542
Interpretation This 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.
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LEVERAGE RATIOS
Debt
DEBT-ASSETS RATIO
Ratio is a
financial
ratio
that
indicates
the
percentages of a companys 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
Mar ' 10 770.47 1188.1 0.648489 Mar ' 09 691 992.24 0.696404 Mar ' 08 534.36 787.51 0.678544 Mar ' 07 497.76 732.58 0.679462 Mar ' 06 415.21 636.07 0.652774
Total Debt Total Assets Debt-Assets Ratio
Debt-Assets Ratio 0.7 0.69 0.68 0.67 0.66 0.65 0.64 0.63 0.62 0.696404 0.678544 0.679462
0.648489
0.652774
Mar ' 10
Mar ' 09
Mar ' 08
Mar ' 07
Mar ' 06
Interpretation The debt-assets ratio measures the extent to which borrowed funds support the firms assets. We can see that during Mar09 its 0.648489, which lowest of all the five years.
Total Debt to equity ratio = Total Debt/ Stockholders' equity
DEBT TO EQUITY RATIO
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)..
Total Debt Equity Share Capital Reserves & Surplus Total Debt/Equity Mar ' 10 770.47 203.1 214.54 1.84 Mar ' 09 691 203.1 98.12 2.29 Mar ' 08 534.36 203.1 50.04 2.11 Mar ' 07 497.76 217.07 17.74 2.12 Mar ' 06 415.21 217.07 3.79 1.88
Total Debt/Equity 2.5 2 1.5 1 0.5 0 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 1.84 2.29 2.11 2.12 1.88
Interpretation The 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.
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Proprietary Ratio The Proprietary the Ratio represents the the proportion of of the
Proprietors Equity to Total Assets. A higher percentage denotes stronger financial position enterprise
= Shareholders Equity/Total Assets
Share Holders Fund 417.64 Total Assets 1188.1 Proprietor ratio 0.35 Mar ' 10 Mar ' 09 301.22 992.24 0.30 Mar ' 08 253.14 787.51 0.32 Mar ' 07 234.81 732.58 0.32 Mar ' 06 220.86 636.07 0.35
Proprietor ratio 0.36 0.35 0.34 0.33 0.32 0.31 0.3 0.29 0.28 0.27 0.35 0.35
0.32 0.3
0.32
Mar ' 10
Mar ' 09
Mar ' 08
Mar ' 07
Mar ' 06
Interpretation The 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.
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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 ' 10 291.31 46.47 6.268776 Mar ' 09 189.19 32.62 5.799816 Mar ' 08 91.25 33.17 2.75098 Mar ' 07 59.35 52.35 1.133715 Mar ' 06 60.49 56.02 1.079793
EBIT Interest TIE Ratio
TIE Ratio 7 6 5 4 3 2 1 0 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 2.75098 1.133715 1.079793 6.268776
5.799816
Interpretation This ratio reflects the number of times that the companys 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.
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OVERALL ANALYSIS:PRARTICULARS Operating Margine Gross Profit ratio Net Profit ratio Return on equty Return on Share holders ROI Current ratio Quick ratio Cash Ratio Inven turnover ratio FIX Asset turnover Totai -assets ratio Debt-assets ratio Debt-equty ratio Proprietor ratio IOC 2010 35.38 29.6 18.12 86.568 42.098 15.405 0.86 0.49 0.0746 15 0.66 0.8106 0.6485 1.84 0.35 6.2688 2009 2008 34.48 28.07 14.03 47.075 31.741 11.633 0.94 0.61 0.0909 46 0.80 0.6837 0.6964 2.29 0.3 5.7998 2007 2006 26.04 15.03 1.09 1.9026 1.87 0.4938 2.03 1.43 0.132 0.48 0.5895 0.6528 1.88 0.35 1.0798
27.39 24.09 18.64 14.52 10.73 1.46 26.08 2.9714 20.92 2.7469 5.32 0.664 2.95 3.09 2.61 2.70 0.159 0.1028 45 0.60 0.55 0.623 0.599 0.679 0.6795 2.11 2.12 0.32 0.32 2.751 1.1337
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DU PONT CHART
Return on investment
PM(profit margin)
18.12%
Total asets turnover

15 (Times)
EBIT(In Rs.) 297.31
Total Sales (In Rs.) 963.04
Sales (Non-operating Income) 1425.28
Operating exp= 1133.97
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
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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. Whats 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 necessary support from the staff. For that, I am extremely grateful to them.
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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.
62
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 Mar08 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 Mar08 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 management Binani 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.
63
BIBLIOGRAPHY
Books Used Author- AMBRISH GUPTA Book- Financial for Management Publisher Pearson Edition 3th Websites www.binani.com www.sebi.gov.in www.smcindiaonline.com www.wikipedia.com www.kotaksecrurity.com
64
ANNEXURE:-
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Financial Analysis and Ratio Analysis of Binani Cement Ltd

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Financial Analysis and Ratio Analysis of Binani Cement Ltd

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A PROJECT REPORT

Submitted to Mrs.Neha S.Shukla.

On December 10, 2010

Group No: Submitted by:

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

Tread analysis Vertical Analysis [Common Size] Horizontal Analysis

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

THE PROFILE OF COMPANY

of Binani Industries Limited)

NSVKMS MBA COLLEGE, VISNAGAR.

Directors Of The Company

NSVKMS MBA COLLEGE, VISNAGAR.

Various Company Locations Sr.no. 1 Location type Address

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

Marketing Strategy Of Company

NSVKMS MBA COLLEGE, VISNAGAR.

strategy. On account of superior quality of its product

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

NSVKMS MBA COLLEGE, VISNAGAR.

FINANCIAL STATEMENTS BALANCE SHEET

203.10 0.00 0.00 98.12 658.77 32.23 992.22

203.10 0.00 0.00 50.04 534.36 0.00 787.50

217.07 0.00 0.00 17.74 487.86 9.90 732.57

217.07 0.00 0.00 3.79 413.56 1.65 636.07

839.99 0.00 347.03 492.96 517.37 0.00

803.95 0.00 308.07 495.88 100.02 0.00

791.95 0.00 266.99 524.96 5.16 23.09

767.89 0.00 228.68 539.21 5.06 23.25

284.63 302.72 -18.09 0.00 992.24

290.08 98.47 191.61 0.00 787.51

265.09 85.73 179.37 0.00 732.58

135.37 66.82 68.55 0.00 636.07

NSVKMS MBA COLLEGE, VISNAGAR.

46.77 0.00 392.38

0.00 0.00 156.98

0.00 0.00 427.12

23.16 0.00 3.20

0.00 0.00 0.00

NSVKMS MBA COLLEGE, VISNAGAR.

COMMON SIZE STATEMENT

12.55% 24.07% 2.76% 23.96% 2.150% 0 65.51% 34.48% 0.40%

15.46% 32.31% 3.077% 18.55% 3.19% 0 72.60% 27.39% 0.66%

NSVKMS MBA COLLEGE, VISNAGAR.

PART-B BALANCE SHEET

121.65% 0 33.42% 88.23% 14.43% 3.936%

84.655% 0 34.97% 49.68% 52.14% 0

42.26% 48.86% -6.6004 0 100%