Binani Financial Model

8/6/2019 Binani Financial Model

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FINANCIAL MODEL

Binani Cement Limited

Prepared by-

Rinkesh Shah

PG10072

Contents:1

2

3

4

5

6

7

Basis for Assumption'

Balance sheet

Profit and Loss account

Assumptions

cash flow

Capex

Debt Repayment


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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 (JNN

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 Go

spending on the rural infrastructure and gradual increase in the number of infrastructure projects being executed by th

The trend in demand growth seen during the last five years is expected to continue over the medium term. Further, wit

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.

housing and construction sector generates 50% of the overall demand of Cement in the country and the demand is exp

continue in the coming years as well. But the expected capacity additions, increased cost of raw material, fuel and logis

service tax on housing sector and gradual withdrawal of stimulus package granted to the Cement Industry will have pre

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

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 Reserv

loans


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URM)

vernment

private sector.

Government

% . The

cted to

ics, proposed

ssure on

this the

es and surplus. The company wont take any

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Binani Cement (All Figures in INR Lacs unless specified )

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

Sources Of Funds

Share Holders Funds

Share Capital 20,310 20,310 20,310 20,310 20,310 20,310 20,310

Reserves and Surplus 21,454 27,330 47,205 81,607 121,048 168,763 226,024

Total 41,764 47,641 67,516 101,917 141,358 189,074 246,334

Loan Funds

Secured Loans 73,233 74,020 92,296

Unsecured Loans 3,814 3,814 6,014

Total 77,046 77,833 98,309 91,523 84,194 76,278 67,730

Deferred Tax Liability 12,752 15,542 18,677 18,677 18,677 18,677 18,677

Trade Deposits 2,175 2,476 2,871 2,871 2,871 2,871 2,871

Total 133,738 143,492 187,373 214,988 247,100 286,900 335,612

Applications of Funds

Fixed Assets

Gross Block 144,539 158,868 180,051 180,051 253,054 265,706 278,992

Less: Accum. Depreciation 39,711 47,119 55,282 64,285 76,937 90,223 104,172

Net Block 104,828 111,749 124,769 115,766 176,116 175,484 174,819

Capital Work in Progress 17,147 20,230 10,001 - - - -

Total 121,976 131,979 134,769 115,766 176,116 175,484 174,819

Investments 4,677 21,130 37,457 37,457 37,457 37,457 37,457

Current assets, loans and advances

Inventories 21,744 21,254 16,998 17,153 19,767 22,783 26,262

Cash and Bank Balance 9,593 8,721 30,944 89,968 67,710 115,042 172,378

Loans and Advances 18,873 18,479 24,193 24,193 24,193 24,193 24,193

Total 50,210 48,455 72,135 131,314 111,671 162,019 222,834

Current Liabilities and provisions

Current Liabilities 34,893 51,092 43,833 56,393 64,988 74,903 86,342Provisions 8,232 6,980 13,156 13,156 13,156 13,156 13,156

Total 43,125 58,072 56,989 69,549 78,144 88,059 99,498

Net Current Assets 7,085 (9,617) 15,146 61,765 33,527 73,959 123,336

Total 133,738 143,492 187,373 214,988 247,100 286,900 335,612

Unbalanced amount () () () ()

Back to sche


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(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

99,54013,156

112,696

120,031

392,410

()

ule


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Binani Cement Profit & Loss account (All figures in INR Lacs unless specified)

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

Income

Sales Turnover 114,855 171,393 206,711 238,422 275,014 317,240 365,971

Less: Excise Duty 16,988 22,414 21,606 26,226 30,252 34,896 40,257

Net Sales 97,868 148,979 185,105 212,195 244,762 282,344 325,714

Other Income 1,314 1,291 2,111 2,216 2,327 2,443 2,565

Total Income 99,181 150,270 187,216 214,411 247,089 284,787 328,280

Total Expenditure

Raw Materials 8,719 13,922 25,010 28,887 33,365 38,536 44,509

Other Manufacturing Expenses 27,371 62,472 54,560 63,017 72,785 84,066 97,097

Payment to and Provision for Employee 2,550 2,939 3,435 3,435 3,435 3,435 3,435

Selling and Admin Expenses 25,844 40,297 45,032 53,603 61,772 71,197 82,070

Interest and Finance Charges 4,647 7,152 7,851 7,322 6,736 6,102 5,418

Depreciation and Amortization 5,567 8,031 9,166 9,003 12,653 13,285 13,950

Total Expenses 74,698 134,814 145,054 165,266 190,745 216,622 246,479

Profit Before Taxation and Prior pe 24,484 15,456 42,161 49,145 56,344 68,165 81,801

Prior period adjustments -1,361 0 0 0 0

Profit Before Tax 24,484 15,456 40,800 49,145 56,344 68,165 81,801

Less - Current Tax 2,770 1,740 11,299 14,743 16,903 20,450 24,540

Add - MAT Credit Entitlement 4,359 1,748 0 0 0 0

Less - Deferred Tax 8,440 2,790 3,135 3,135 3,135 3,135 3,135

Less - Fringe Benefit Tax 51 59 0 0 0 0 0

77 0 0 0 0

Profit after Tax 17,582 10,867 28,192 34,401 39,441 47,716 57,261

Balance brought forward from Previous 5,179 13,721 19,597 0 0 0 0

-1,300 1,100 1,200 0 0 0 0

Transfer to General Reserve -1,800 -1,100 -2,900 0 0 0 0

Proposed Dividend -5,078 -4,265 -7,109 0 0 0 0

Tax on Proposed Dividend -863 -725 -1,208 0 0 0 0

Balance Carried to Balance Sheet 13,721 19,598 37,772 34,401 39,441 47,716 57,261

Add - Excess Provision of earlier yearwritten back

Transfer from / (to) DebentureRedemption Reserve

Back to sc


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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

edule


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All figures in INR Lacs unless specified

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

Cement

Actual production

Value 108,969 157,184 200,436 231,503

Volumes of cement 2,961,329 4,243,214 5,294,705 5,824,176

Price per ton(in Rs) 3,680 3,704 3,786 3,975

Sales 108,969.49 157,184.44 200,435.90 231,503

Assumption:% increase in volumes YoY 10%

Assumption: % increase in price per ton YoY 5%

Clinker

Volumes 232,639 564,191 212,956 223,604

Price per ton(in Rs) 2,530 2,518 2,947 3,094

Sales 5,886 14,208 6,275 6,918

Assumption: The Volumes of Clinker increase by 5% YoY 5%

Assumption: The Price per unit increases by 5% YoY 5%

Total Sales 114,855 171,393 206,711 238,422

Raw Materials Working

5,906,398 8,465,572 9,686,577 10,655,235

8,719 13,922 25,010 28,887

Price per unit(in Rs) 148 164 258 271

Assumption: Increase in production YoY 10%

Assumption: Increase in price per unit YoY 5%

Selling and Admin Expenses

Revenue 99,181 150,269 187,216 214,411

Selling and Admin Expenses 25,844 40,297 45,032 53,603

as % of Sales 26 27 24 25%

Assumption: Selling and admin expenses is 25% of sales

Manufacturing Expenses

5,906,398 8,465,572 9,686,577 10,655,235

Manufacturing expense 27,371 62,472 54,560 63,017

Expense per ton(in Rs) 463 738 563 591

Assumption: Increase in Manufacturing expense per unit 5%

Excise Duty 16,988 22,414 21,606 26,226

Assumption: as % of total sales 11%

Other Income 1,314 1,291 2,111 2,216

Assumption:% Increase in other income YoY 5%

2008 2009 2010 2011

Revenue 99,181 150,269 187,216 214,411

COGS: 74,698 134,814 145,054 171,529

% of Sales 75% 90% 77% 80%

Assumption: Taking average of the last three years and assuming it to be constant for five years

TAX:

Profit before Tax 24,484 15,456 40,800 49,145

Tax 2,770 1,740 11,299 14,743

Production(includi

ng cement andclinker)

Cost of RawMaterials

Production(including cement andclinker)


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% 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 longe

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 73,233 74,020 92,296 92,296

Unsecured Loans 3,814 3,814 6,014 6,014

Total Debt 77,046 77,833 98,309 98,309

Assumption: Interest Charges on loans taken 8.50%

Depreciation

Gross Block 144,539 158,868 180,051 180,051

Depreciation for the year 8,163 9,003

Accumulated Depreciation 47,119 55,282 64,285

Net Block 124,769 115,766

Change in Gross Block 13% 0%

Depreciation for the year as % of Gross Block 5% 5%

Inventory 16,998 17,153

Assumption: Assume % of COGS 10%

Liabilities 34,893 51,092 43,833 56,393

Average Credit Period 170 138 110 120

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


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(2011-12 ) (2012-13 ) (2013-14 ) (2014-15 )

267,387 308,831 356,700 411,989

6,406,593 7,047,252 7,751,978 8,527,175

4,174 4,382 4,601 4,831

267,387 308,831 356,700 411,989

10% 10% 10% 10%

5% 5% 5% 5%

234,784 246,523 258,849 271,792

3,249 3,411 3,582 3,761

7,627 8,409 9,271 10,221

5% 5% 5% 5%

5% 5% 5% 5%

275,014 317,240 365,971 422,210

11,720,758 12,892,834 14,182,117 15,600,329

33,365 38,536 44,509 51,408

285 299 314 330

10% 10% 10% 10%

5% 5% 5% 5%

247,089 284,787 328,280 378,461

61,772 71,197 82,070 94,615

25% 25% 25% 25%

11,720,758 12,892,834 14,182,117 15,600,329

72,785 84,066 97,097 112,146

621 652 685 719

5% 5% 5% 5%

30,252 34,896 40,257 46,443

11% 11% 11% 11%

2,327 2,443 2,565 2,694

5% 5% 5% 5%

2012 2013 2014 2015

247,089 284,787 328,280 378,461

197,671 227,830 262,624 302,768

80% 80% 80% 80%

56,344 68,165 81,801 94,329

16,903 20,450 24,540 28,299


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30% 30% 30% 30%

r available.

92,296 92,296 92,296 92,296

6,014 6,014 6,014 6,014

98,309 98,309 98,309 98,309

8.50% 8.50% 8.50% 8.50%

253,054 265,706 278,992 356,941

12,653 13,285 13,950 17,847

76,937 90,223 104,172 122,019

176,116 175,484 174,819 234,922

0% 0% 0% 0%

5% 5% 5% 5%

19,767 22,783 26,262 30,277

10% 10% 10% 10%

64,988 74,903 86,342 99,540

120 120 120 120

Back to schedule


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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 8,250,000

Production 2,958,452 4,292,089 ### 5,824,176 6,406,593

Utilization 49% 72% 84% 93% 78%

Additional Capacity installed - 250,000 - 2,000,000

Capex - 64,000

Basis of Assumption: When the production of cement crosses more than 95% of the installed capacity additional c

Capacity is increased by 2 million tonnes

Capacity addition 2,000,000

Capex required for installing 1 MT (i 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 Gr


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(2012-13 ) (2013-14 ) (2014-15 )

8,250,000 8,250,000 10,250,000

7,047,252 7,751,978 8,527,175

85% 94% 83%

- - 2,000,000

- - 64,000

pacity is installed

13,285 13,950 17,847

5% 5% 5%

ss Block.

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Binani Cement

Cash Flow statement (2010-11 ) (2011-12 ) (2012-13 (2013-14

A.CASH FLOW FROM OPERATING ACTIVITIES

Profit After Taxation 34,401 39,441 47,716 57,261

Depreciation 9,003 12,653 13,285 13,950

Deferred Tax Asset/Liability - - - -

Operating profit before Working Capital Changes 43,404 52,094 61,001 71,210

CASH FLOW FROM WORKING CAPITAL CHANGES

(Increase)/Decrease in Inventories -155 -2,614 -3,016 -3,479

(Increase)/Decrease in Sundry Debtors

(Increase)/Decrease in Loans & Advances - - - -

Increase/(Decrease) in Current Liabilities 12,560 8,595 9,915 11,439

Increase/(Decrease) in Provisions - - - -

Cash generated from Operations 12,406 5,980 6,899 7,960

Net Cash Flow from Operating Activities (A) 55,810 58,074 67,900 79,170

B.CASH FLOW FROM INVESTING ACTIVITIES

Sale/(Purchase) of Investment - - - -

Sale/(Purchase) of Fixed Asset - -73,003 -12,653 -13,285

Increase in Capital Work in Progress 10,001 - - -

Net Cash Flow from Investing Activities (B) 10,001 -73,003 -12,653 -13,285

C. CASH FLOW FROM FINANCING ACTIVITIES

Increase/(Decrease) in Total Debt -6,786 -7,329 -7,915 -8,549

Net Cash Flow from Financing Activity (C) -6,786 -7,329 -7,915 -8,549

Net Increase/(Decrease) in cash and cash equivalents ( 59,024 -22,258 47,332 57,336

Cash and Cash equivalents at the beginning of the year 30,944 89,968 67,710 115,042

Cash and Cash equivalents at the end of the year 89,968 67,710 115,042 172,378

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CRITICAL OUTPUT SHEET

All Figures in INR Lacs unless specified

Critical Output

Year to 31st March (2007-0 (2008-09 (2009-10 (2010-11 (2011-1 (2012-13 (2013-1 (2014-1

Revenue 99,181 150,270 187,216 214,411 247,089 284,787 328,280 378,461

Revenue Growth 52 25 15 15 15 15 15

Gross Profit 60,541 70,936 104,210 119,072 137,505 158,750 183,239 211,471

Gross Profit as a % of Revenue 61 47 56 56 56 56 56 56

EBITDA 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

Accumulated Depreciation 0 47,119 55,282 64,285 76,937 90,223 104,172 122,019

Interest Outgo 4,647 7,152 7,851 7,322 6,736 6,102 5,418 4,680

PAT 17,582 10,867 28,192 34,401 39,441 47,716 57,261 66,030

PAT to Operating Revenue 18 7 15 16 16 17 17 17

Maintenance Capex 0 0 0 9,003 12,653 13,285 13,950 17,847

Capex 0 0 0 0 64,000 0 0 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

Back to schedule


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)


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Total Debt Repayment Schedule (EMI basis)

will be repaid within a span of 10 years

Year Principal Outstan Principal Repaym

2010 Marc 98,309 6,786

2011 Marc 91,523 7,329

2012 Marc 84,194 7,915

2013 Marc 76,278 8,549

2014 Marc 67,730 9,233

2015 Marc 58,497 9,971

Tenure 10

Interest rate 8%

Assumption:The company had taken loans from SBI and no further debt would be taken and the current debt


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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

Documents

Binani Financial Model