FINANCIAL MODEL

Binani Cement Limited

Prepared by-

Rinkesh Shah
PG10072
Contents:
1 Basis for Assumption'
2 Balance sheet
3 Profit and Loss account
4 Assumptions
5 cash flow
6 Capex
7 Debt Repayment

Basis for Model

Historical Data
Historical data used in this model is on standalone basis.
Revenue Projection
For the revenue projection following factors are considered
The key drivers of Cement Industry in India are
1) Buoyant real estate market in non metro cities.
2) Increase in infrastructure spending on power, road, port and urban infrastructure.
3) Increase in rural demand driven by National Rural Employment Guarantee Scheme (NREGS).
4) Low-cost housing in urban and rural areas under schemes like Jawaharlal Nehru National Urban Renewal Mission (JNNURM)
and Indira Aawas Yojana
5) Favourable interest rates and tax benefits on housing.
6) Domestic Industrial growth and major expansion plans announced across different segments.

Basis of Sales:
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 sect
The trend in demand growth seen during the last five years is expected to continue over the medium term. Further, with Governmen
targeting 8-10% GDP growth rate, cement demand should grow at 9-10% over the next few years.

Basis of Price:
The Cement Sector is expected to grow by 9-10% in the Financial Year 2010-11 compared to Indias expected GDP of 8.5% . The
housing and construction sector generates 50% of the overall demand of Cement in the country and the demand is expected to
continue in the coming years as well. But the expected capacity additions, increased cost of raw material, fuel and logistics, proposed
service tax on housing sector and gradual withdrawal of stimulus package granted to the Cement Industry will have pressure on
margins in the coming years.
Future Plans
The Company proposes to set up a Greenfield Cement plant of 2.5 million tonnes per annum capacity at Sutrapada. For this the
company plans for capital expenditure.
M&A's
It has been assumed that not M&A Activities will take place in the next 5 years

Debt
For Capex it is assumed that no debt will be take and the capex would be funded through positive cash flow and Reserves and surplu
loans

Mission (JNNURM)

ontinued Government
cuted by the private sector.
Further, with Government

ed GDP of 8.5% . The

mand is expected to
uel and logistics, proposed
will have pressure on

rapada. For this the

and Reserves and surplus. The company wont take any

Back to schedule

Binani Cement
Balance Sheet

(All Figures in INR Lacs unless specified )

(2007-08 ) (2008-09 ) (2009-10 ) (2010-11 (2011-12
)
) (2012-13 ) (2013-14 )

Sources Of Funds
Share Holders Funds
Share Capital
Reserves and Surplus
Total

20,310
21,454
41,764

20,310
27,330
47,641

20,310
20,310
47,205
81,607
67,516 101,917

Loan Funds
Secured Loans
Unsecured Loans
Total

73,233
3,814
77,046

74,020
3,814
77,833

92,296
6,014
98,309

12,752
2,175

15,542
2,476

Total

133,738

Applications of Funds
Fixed Assets
Gross Block
Less: Accum. Depreciation
Net Block
Capital Work in Progress
Total

20,310
121,048
141,358

20,310
168,763
189,074

20,310
226,024
246,334

91,523

84,194

76,278

67,730

18,677
2,871

18,677
2,871

18,677
2,871

18,677
2,871

18,677
2,871

143,492

187,373

214,988

247,100

286,900

335,612

144,539
39,711
104,828
17,147
121,976

158,868
47,119
111,749
20,230
131,979

180,051
55,282
124,769
10,001
134,769

180,051
64,285
115,766
115,766

253,054
76,937
176,116
176,116

265,706
90,223
175,484
175,484

278,992
104,172
174,819
174,819

4,677

21,130

37,457

37,457

37,457

37,457

37,457

Current assets, loans and advances

Inventories
21,744
Cash and Bank Balance
9,593
Loans and Advances
18,873
Total
50,210

21,254
8,721
18,479
48,455

16,998
30,944
24,193
72,135

17,153
89,968
24,193
131,314

19,767
67,710
24,193
111,671

22,783
115,042
24,193
162,019

26,262
172,378
24,193
222,834

Current Liabilities and provisions

Current Liabilities
34,893
Provisions
8,232
Total
43,125

51,092
6,980
58,072

43,833
13,156
56,989

56,393
13,156
69,549

64,988
13,156
78,144

74,903
13,156
88,059

86,342
13,156
99,498

Net Current Assets

Total

(9,617)
143,492

15,146
187,373

61,765
214,988

33,527
247,100

73,959
286,900

123,336
335,612

Deferred Tax Liability

Trade Deposits

Investments

Unbalanced amount

7,085
133,738

()

()

()

()
Back to schedule

(2014-15 )

20,310
292,054
312,365

58,497
18,677
2,871
392,410

356,941
122,019
234,922
234,922
37,457

30,277
178,257
24,193
232,727

99,540
13,156
112,696
120,031
392,410

Back to schedule

()

Binani Cement
Profit & Loss account (All figures in INR Lacs unless specified)
2007-08 2008-09 2009-10 2010-11
Income
Sales Turnover
Less: Excise Duty
Net Sales
Other Income
Total Income

2011-12 2012-13 2013-14

114,855 171,393 206,711

16,988
22,414
21,606
97,868 148,979 185,105
1,314
1,291
2,111
99,181 150,270 187,216

238,422 275,014 317,240 365,971

26,226
30,252
34,896
40,257
212,195 244,762 282,344 325,714
2,216
2,327
2,443
2,565
214,411 247,089 284,787 328,280

Total Expenditure
Raw Materials
8,719
13,922
25,010
Other Manufacturing Expenses
27,371
62,472
54,560
Payment to and Provision for Employees
2,550
2,939
3,435
Selling and Admin Expenses
25,844
40,297
45,032
Interest and Finance Charges
4,647
7,152
7,851
Depreciation and Amortization
5,567
8,031
9,166
Total Expenses
74,698 134,814 145,054

28,887
33,365
38,536
44,509
63,017
72,785
84,066
97,097
3,435
3,435
3,435
3,435
53,603
61,772
71,197
82,070
7,322
6,736
6,102
5,418
9,003
12,653
13,285
13,950
165,266 190,745 216,622 246,479

Profit Before Taxation and Prior period

24,484
items
Prior period adjustments
Profit Before Tax
24,484
Less - Current Tax
2,770
Add - MAT Credit Entitlement
4,359
Less - Deferred Tax
8,440
Less - Fringe Benefit Tax
51
Add - Excess Provision of earlier year
written back
Profit after Tax
17,582
Balance brought forward from Previous Year5,179
Transfer from / (to) Debenture
Redemption Reserve
-1,300
Transfer to General Reserve
-1,800
Proposed Dividend
-5,078
Tax on Proposed Dividend
-863
Balance Carried to Balance Sheet
13,721

15,456

2,790
59

42,161
-1,361
40,800
11,299
1,748
3,135
0

49,145
0
49,145
14,743
0
3,135
0

56,344
0
56,344
16,903
0
3,135
0

68,165
0
68,165
20,450
0
3,135
0

81,801
0
81,801
24,540
0
3,135
0

10,867
13,721

77
28,192
19,597

0
34,401
0

0
39,441
0

0
47,716
0

0
57,261
0

1,100
-1,100
-4,265
-725
19,598

1,200
-2,900
-7,109
-1,208
37,772

0
0
0
0
34,401

0
0
0
0
39,441

0
0
0
0
47,716

0
0
0
0
57,261

15,456
1,740

Back to schedule

2014-15

422,210
46,443
375,767
2,694
378,461

51,408
112,146
3,435
94,615
4,680
17,847
284,132
94,329
0
94,329
28,299
0
3,135
0
0
66,030
0
0
0
0
0
66,030
Back to schedule

All figures in INR Lacs unless specified

(2007-08 ) (2008-09 ) (2009-10 ) (2010-11 )
Cement
Actual production
Value
Volumes of cement
Price per ton(in Rs)
Sales
Assumption:% increase in volumes YoY
Assumption: % increase in price per ton YoY
Clinker
Volumes
Price per ton(in Rs)
Sales
Assumption: The Volumes of Clinker increase by 5% YoY
Assumption: The Price per unit increases by 5% YoY
Total Sales
Raw Materials Working
Production(includi
ng cement and
clinker)
Cost of Raw
Materials
Price per unit(in Rs)
Assumption: Increase in production YoY
Assumption: Increase in price per unit YoY

108,969
157,184
200,436
2,961,329
4,243,214
5,294,705
3,680
3,704
3,786
108,969.49 157,184.44 200,435.90

231,503
5,824,176
3,975
231,503
10%
5%

232,639
2,530
5,886

564,191
2,518
14,208

212,956
2,947
6,275

223,604
3,094
6,918
5%
5%

114,855

171,393

206,711

238,422

5,906,398

8,465,572

9,686,577

10,655,235

8,719
148

13,922
164

25,010
258

28,887
271
10%
5%

99,181
25,844
26

150,269
40,297
27

187,216
45,032
24

214,411
53,603
25%

5,906,398
27,371
463

8,465,572
62,472
738

9,686,577
54,560
563

10,655,235
63,017
591
5%

16,988

22,414

21,606

26,226
11%

1,314

1,291

2,111

2,216
5%

2008
2009
2010
Revenue
99,181
150,269
187,216
COGS:
74,698
134,814
145,054
% of Sales
75%
90%
77%
Assumption: Taking average of the last three years and assuming it to be constant for five years

2011
214,411
171,529
80%

Selling and Admin Expenses

Revenue
Selling and Admin Expenses
as % of Sales
Assumption: Selling and admin expenses is 25% of sales

Manufacturing Expenses
Production(includi
ng cement and
clinker)
Manufacturing expense
Expense per ton(in Rs)
Assumption: Increase in Manufacturing expense per unit
Excise Duty
Assumption: as % of total sales
Other Income
Assumption:% Increase in other income YoY

TAX:
Profit before Tax
Tax

24,484
2,770

15,456
1,740

40,800
11,299

49,145
14,743

% Tax
11%
11%
28%
30%
Assumption: The tax rate has increased from 11% to 27% and hence it seems that the tax benefits are no longer available.
Tax rate is assumed to be 30% for the 5 years.
Rest all taxes are assumed to be zero as of now.
Loan Funds
Secured Loans
Unsecured Loans
Total Debt

73,233
3,814
77,046

74,020
3,814
77,833

92,296
6,014
98,309

Assumption: Interest Charges on loans taken

Depreciation
Gross Block
Depreciation for the year
Accumulated Depreciation
Net Block
Change in Gross Block
Depreciation for the year as % of Gross Block

8.50%

144,539

158,868
47,119

Inventory
Assumption: Assume % of COGS

Liabilities
Average Credit Period

92,296
6,014
98,309

34,893
170

51,092
138

180,051
8,163
55,282
124,769
13%
5%

180,051
9,003
64,285
115,766
0%
5%

16,998

17,153
10%

43,833
110

56,393
120

Sundry Debtors are not included in the Balance sheet. So it is assumed that company deals on direct cash basis

(2011-12 )

(2012-13 )

(2013-14 )

(2014-15 )

267,387
6,406,593
4,174
267,387
10%
5%

308,831
7,047,252
4,382
308,831
10%
5%

356,700
7,751,978
4,601
356,700
10%
5%

411,989
8,527,175
4,831
411,989
10%
5%

234,784
3,249
7,627
5%
5%

246,523
3,411
8,409
5%
5%

258,849
3,582
9,271
5%
5%

271,792
3,761
10,221
5%
5%

275,014

317,240

365,971

422,210

11,720,758

12,892,834

14,182,117

15,600,329

33,365
285
10%
5%

38,536
299
10%
5%

44,509
314
10%
5%

51,408
330
10%
5%

247,089
61,772
25%

284,787
71,197
25%

328,280
82,070
25%

378,461
94,615
25%

11,720,758
72,785
621
5%

12,892,834
84,066
652
5%

14,182,117
97,097
685
5%

15,600,329
112,146
719
5%

30,252
11%

34,896
11%

40,257
11%

46,443
11%

2,327
5%

2,443
5%

2,565
5%

2,694
5%

2012
247,089
197,671
80%

2013
284,787
227,830
80%

2014
328,280
262,624
80%

2015
378,461
302,768
80%

56,344
16,903

68,165
20,450

81,801
24,540

94,329
28,299

30%
are no longer available.

92,296
6,014
98,309

30%

92,296
6,014
98,309

30%

92,296
6,014
98,309

30%

92,296
6,014
98,309

8.50%

8.50%

8.50%

8.50%

253,054
12,653
76,937
176,116
0%
5%

265,706
13,285
90,223
175,484
0%
5%

278,992
13,950
104,172
174,819
0%
5%

356,941
17,847
122,019
234,922
0%
5%

19,767
10%

22,783
10%

26,262
10%

30,277
10%

64,988
120

74,903
120

86,342
120

99,540
120

ct cash basis
Back to schedule

All figures in INR lacs unless specified

CAPEX SCHEDULE

(2007-08 ) (2008-09 ) (2009-10 )(2010-11 ) (2011-12 )

Capacity (MT)
6,000,000
6,000,000
### 6,250,000
Production
2,958,452
4,292,089
### 5,824,176
Utilization
49%
72%
84%
93%
Additional Capacity installed
- 250,000
Capex
Basis of Assumption: When the production of cement crosses more than 95% of the installed capacity
Capacity is increased by 2 million tonnes

8,250,000
6,406,593
78%
2,000,000
64,000
additional capacity is installed

Capacity addition
2,000,000
Capex required for installing 1 MT (in Rs) 3,200

Maintenance Capex
0
0
0
9,003
12,653
% of Gross block
0
0
0
5%
5%
Assumption: Maintenance CAPEX has been assumed to be constant for 5 years and is taken as a percentage of Gross Block.

(2012-13 )

(2013-14 )

(2014-15 )

8,250,000
8,250,000
7,047,252
7,751,978
85%
94%
additional capacity is installed

13,285
5%
entage of Gross Block.

13,950
5%

Back to schedule

10,250,000
8,527,175
83%
2,000,000
64,000

17,847
5%

Binani Cement
Cash Flow statement
A.CASH FLOW FROM OPERATING ACTIVITIES
Profit After Taxation
Depreciation
Deferred Tax Asset/Liability
Operating profit before Working Capital Changes

(2010-11 ) (2011-12 ) (2012-13 ) (2013-14 )

34,401
9,003
43,404

39,441
12,653
52,094

47,716
13,285
61,001

57,261
13,950
71,210

CASH FLOW FROM WORKING CAPITAL CHANGES

(Increase)/Decrease in Inventories
(Increase)/Decrease in Sundry Debtors
(Increase)/Decrease in Loans & Advances
Increase/(Decrease) in Current Liabilities
Increase/(Decrease) in Provisions
Cash generated from Operations
Net Cash Flow from Operating Activities (A)

-155

-2,614

-3,016

-3,479

12,560
12,406
55,810

8,595
5,980
58,074

9,915
6,899
67,900

11,439
7,960
79,170

B.CASH FLOW FROM INVESTING ACTIVITIES

Sale/(Purchase) of Investment
Sale/(Purchase) of Fixed Asset
Increase in Capital Work in Progress
Net Cash Flow from Investing Activities (B)

10,001
10,001

-73,003
-73,003

-12,653
-12,653

-13,285
-13,285

-6,786
-6,786

-7,329
-7,329

-7,915
-7,915

-8,549
-8,549

Net Increase/(Decrease) in cash and cash equivalents (A+B+C)

59,024
Cash and Cash equivalents at the beginning of the year
30,944
Cash and Cash equivalents at the end of the year
89,968

-22,258
89,968
67,710

47,332
67,710
115,042

57,336
115,042
172,378

C. CASH FLOW FROM FINANCING ACTIVITIES

Increase/(Decrease) in Total Debt
Net Cash Flow from Financing Activity (C)

Back to schedule

(2014-15 )

66,030
17,847
83,877

-4,014
Sundry Debtors are not included in the standalone balance
- sheet
13,198
9,184
93,061

-77,950
-77,950

-9,233
-9,233

5,879
172,378
178,257
Back to schedule

CRITICAL OUTPUT SHEET

All Figures in INR Lacs unless specified

Critical Output
Year to 31st March
Revenue

(2007-08(2008-09
)
)(2009-10 )(2010-11 )(2011-12(2012-13
)
)(2013-14 (2014-15
)
)
99,181

150,270

187,216

284,787

328,280

378,461

52

25

15

15

15

15

60,541

70,936

104,210

119,072 137,505

158,750

183,239

211,471

61

47

56

56

56

56

56

56

34,697

30,640

57,817

65,469

75,732

87,553

101,169

116,856

EBITDA to Revenue

35

20

31

31

31

31

31

31

Depreciation (P&L)

5,567

8,031

9,166

9,003

12,653

13,285

13,950

17,847

47,119

55,282

64,285

76,937

90,223

104,172

122,019

4,647

7,152

7,851

7,322

6,736

6,102

5,418

4,680

17,582

10,867

28,192

34,401

39,441

47,716

57,261

66,030

18

15

16

16

17

17

17

Maintenance Capex

9,003

12,653

13,285

13,950

17,847

Capex

64,000

64,000

Cash and Bank Balance

9,593

8,721

30,944

89,968

67,710

115,042

172,378

178,257

Net Current Asset

7,085

-9,617

15,146

61,765

33,527

73,959

123,336

120,031

Revenue Growth
Gross Profit
Gross Profit as a % of Revenue
EBITDA

Accumulated Depreciation
Interest Outgo
PAT
PAT to Operating Revenue

214,411 247,089
15

Back to schedule

(2014-15 )

Total Debt Repayment Schedule (EMI basis)

Assumption: The company had taken loans from SBI and no further debt would be taken and the current debt
will be repaid within a span of 10 years

Year
Principal Outstanding
Principal Repayment
2010 March
98,309
6,786
2011 March
91,523
7,329
2012 March
84,194
7,915
2013 March
76,278
8,549
2014 March
67,730
9,233
2015 March
58,497
9,971
Tenure
Interest rate

10
8%

Interest Yearly Installment

7,865
14,651
7,322
14,651
6,736
14,651
6,102
14,651
5,418
14,651
4,680
14,651

Back to schedule