PRESENTAION ONSUMMER TRANING PROJECT“BINANI CEMENT LIMITED”

AT NEEM KA THANA

Presented By:- Sandeep Agarwal MBA (FINANCE)

LIM(LPU) Roll.no.:- A 59

TOPIC:- COMPARATIVE ANALYSIS OF WORKING CAPITAL MANAGEMENT BY DIFFERENT METHODES.

INTRODUCTION:-

• The Braj Binani Group beginning to 1872, By Seth Pragdas Binani.

• Binani Cement Limited (in Serohi ,Rajasthan) --effective from 1 st november 1996.

• An Other unit of Binani Cement Limited(in NEEM KA THANA, Rajasthan).—effective from 1997

• The Binani Cement Factory (LLC), established in 1996, is located in the Jebel Ali Industrial Area,Dubai.

• The Shandong Binani Rongon Cement Company Ltd. (SBRCCL), Shanghai (china). With 70% stakeholders , 2 year old clinker plant .

Binani Industries Limited (BIL):- • The Braj Binani Group an Asset value of Rs.

1968 crores, Annual turnover of Rs. 2302 crores and a 1750-strong Work force.

CLINKER GRINDING UNIT:-• GYPSUM=6.5%.• FLY ASH/SLAG=25%.• CLINKER= REST OF BALANCE(68.5%).• 3 mtpa.

The Core Values of BINANI CEMENT LIMITED IS COMIT:

C- Customer Focus

O - Organizational Pride

M- Mutual Respect and Trust

I - Initiative and Speed

T - Total Quality

Mr. VINOD JUNEJA (MD BRAJ BIANANI GROUP)

SCOPE OF STUDY

The scope of study will cover all the component of current assets and current liability. The ascertainment of working capital gap critical examination of financial statement, return on investment and the best and optimum sources of financing the working capital.

Mr. Amithabh Bachchan (Brand Ambassador of Braj Binani Group)

OBJECTIVE OF STUDY

• Analyse the Position of the current assets and liability.

• Identify the requirement and change in working capital.

• Analyse the working capital.• SWOT Analyse the of company.• Analyse by different Method.

RESEARCH METHODOLOGY

SOURCES OF DATA Secondary data:-• Annual report of last 2 year.• Red herring prospectus.• Audited balance sheet & p/l account 2008 and 2009.• Binani news jouranl Magazine March –April 2010.• Man power summary (May 2010). Primary data:-• Through the direct interview of different managers of different

department such as logistic, finance , production and H.R.&A.• Binani cement web sites.

CONCEPTS OF WORKING CAPITAL MANAGEMENT:

Working capital management is the device of finance. It is related to manage of current assets and current liabilities.

There are two concepts of working capital:-• Gross Working Capital.`• Net Working Capital.Gross Working Capital:- The gross working capital is the

capital invested in the total current assets of the enterprise.

NET WORKING CAPITAL: -Net working capital is the excess of current assets over current liabilities.

COMPARITIVE ANALYSIS OF WORKING CAPITAL MANAGEMENT CALCULATION OF GROSS WORKING CAPITAL (Rs . Lakhs)

PARTICULARS As at As at 31st March, 2009 31st March, 2008CURRENT ASSETS, LOANS AND ADVANCESCURRENT ASSETS :INVENTORIES• (as taken, valued & certified by the Management)• Stores, Spare Parts and Fuel______________________________________ 10,801.52 14,488.83• Loose Tools __________________________________________________ 12.49 5.00• Raw Material and Packing Material _______________________________ 734.43 329.11• Work - In - Process ____________________________________________ 24.48 42.78• Finished Goods _______________________________________________ 9,681.03 6,878.72

SUNDRY DEBTORS (UNSECURED AND CONSIDEREDGOOD,UNLESS OTHERWISE STATED) :• Other debts ________________________________________________ - 0.53Cash and Bank Balances• Cash In Hand_______________________________________________ 5.65 7.60• Remittances in transit and cheques in hand______________________ 12.08 86.88 Balance with Scheduled Banks :• Current Accounts ___________ _______________________________ 3,916.73 1,862.05• Collection Accounts _________________________________________ 3,159.69 2,371.49• Deposit Accounts (Including Rs. 1.83 Lakhs______________________ 1,627.31 5,264.85 (Previous year Rs. 1,316.81 lakhs) in margin accounts)Loans and Advances (Unsecured, considered good,unless otherwise stated)• Due from Holding Company__________________________________ 8,557.65 8,046.62 (Refer Note 26 of Schedule 15)• Advances recoverable in cash or in kind or for value to be received___ 7,015.31 6,911.17• Fringe Benefit Tax (Net)____________________________________ 5.20 9.47• Other Deposits ___________________________________________ 708.54 818.44• Balance with Excise, Customs and VAT Authorities ______________ 2,159.30 3,067.73 (including for Service Tax Rs. 156.15 lakhs, Previous Year Rs. 2.42 lakhs)• Assets held for disposal _____________________________________ 33.31 19.42GROSS WORKING CAPITAL _____________________________________ 48,454.72 50,210.69

Interpretation:• There should be investment for short term.As compare to FY 2008 the

company’s current assets has decreases in FY 2009.• Company should use the cash in hand and cash at bank for some

investment .• Company should maintain proper utilisation of the deposits.• Company’s closing stock in FY 2009 increase.• Company’s stocks are depend on demand and supply.

FY 2008

FY 2009

47500

48000

48500

49000

49500

50000

50500

50210.69

48454.72

CURRENT ASSESTS POSITION AS ON FY 2009 & 2008

R s.

LA

KH

TOTAL CURRENT LIABILITIES: (Rs.Lakhs)

PARTICULARS:- As at As at 31st March, 2009 31st March, 2008CURRENT LIABILITIES AND PROVISIONSCURRENT LIABILITIES:-• Acceptances_____________________________ 469.93 –• Sundry Creditors• For Trade : – Total outstanding dues of creditors other than micro enterprises and small enterprises_ ___________ 27,070.51 21,836.87 (includes creditors for capital projects Rs. 4,294.91 lakhs (Previous Year Rs. 5,546.27 lakhs))• – For Expenses___________________________ 5,546.75 2,050.40• Other Liabilities __________________________ 13,123.15 7,750.87• Advances from customers__________________ 4,779.82 3,204.26• Investor Education and Protection Fund shall be credited by the following – Unclaimed dividend ______________________ 6.04 2.83• Interest accrued but not due on loans__________ 95.58 47.93 PROVISIONS:-• For Current Income Tax (net of Advance Tax)___ 1,883.82 2,157.79• For Proposed Dividend _____________________ 4,265.13 5,077.53• For Tax on Dividend _______________________ 724.86 862.93• For Gratuity_______________________________ – 14.37• For Leave Encash__________________________ 106.36 119.13

• TOTAL CURRENT LIABILTIES____________________ 58,071.95 43,124.91

FY2008

FY 2009

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

43,124.9158,071.95

CURRENT LIABILITIES POSITION AS ON FY 2009 & 2008

R s .

LA

KH

INTERPRETATION:•Current liabilities has increase 34.65 % in FY 2009 its big responsiblity to full fill by current assets.

•Company should maintain the outstanding expenses in FY 2009 its increase 23.96%.

•Other liability has incerase 69.31%.it should be maintain by the company.

CALCULATION OF NET WORKING CAPITAL:

Net working capital=Current assets – Current liabilities. (Rs. Lakhs) As 31st March 2009 As 31st March 2008• Total Current Assets______________________________ 48,454.72 50,210.69LESS:• Total Current Liabilites___________________________ (58,071.95) (43,124.91) Net working capital requirment (9617.23) 7085.78

FY 2009

FY 2008

-10000-8000-6000-4000-2000

02000400060008000

NET WORKING CAPITAL POSITIONFY 2009 & 2008

Series1

Rs. L

akhs

INTERPRETATION:

• According this figure the net working capital in FY 2009 require Rs 9617.23 lakhs.

• The position of current assets is not able to recover the current liability in FY 2009.

Current ratio= current assets / current liability.• FY 2008 : CR=50210.69 /43124.91 =1.16 :1• FY 2009: CR=48454.72/58071.95 = 0.834:1

Statement of Change in Working Capital of Binani Cement Ltd. As on 31st March 2009

COST CAPITAL:

• The capital cost envisagedfor establishiing the clinker grinding unit in NEEM KA THANA (RAJASTHAN):

S.NO. PARTICULARS Rs in Lakhs.• 1. land and site development 336• 2. Building and & structures 2681• 3. Plat and Machinery 5489• 4. Other cost 1284 TOTAL 9790__

:- 2010 Sales Rs. 22,597,794,000 (Year Ending Jan 2011)

FINDINGS

“SWOT ANALYSIS” OF BINANI CEMENT LINITED, ‘NEEM KA THANA’:

STRENGTH: • 3 MILLION TON PER ANNUM CLINKER GRINDING UNIT WHICH IS HELP TO

MAXIMUM OUT PUT AND DELIVER GOODS ON DEMAND WITH IN TIME OF REQUIRMENT.

• ALL MACHINARY HAS CONTROLED BY COMPUTER CONTROL SYSTEM, ONLY 1 EMPLOYEE CAN HANDLE VERY WELL AND RUN THE MACHINARY. SAVING THE COST OF EMPLOYEE SALARY AND SAVING TIME.

• RAILWAY LINE VERY STRONG POINT TO BRING THE CLINKER WHOLE 59 COACHS.

• THERE IS A MACHIN WHO UNLOAD 1-BY-1 COACH OF GOODS TRAIN AND WITH IN 7 TO 8 HOURES ITS COMPLITLY UNLODED ALL 59 COACH FROM GOODS TARIN.

• BINANI INCREASES THE EMPLOYEE INCRIMENT WITH IN 18 MONTH.• GOOD JOB SATISFACTION FOR EMPLOYEE.• COMPANY HAS EARND GOOD PROFITS , SURPLUS & RESURVES BUT NOT

INVEST IN THAT AREA WHERE THEY WILL GET MORE PROFITS & EARNING.

WEAKNESS & OPPRTUNITY:

WEAKNESS:• NO DRESS COAD FOR LABOUR FOR EASY TO IDENTIFY ,WHO

IS COMPANY’S WORKER AND WHO IS OUT SIDER?• ONLY 5 MEMBER IN SECURITY.OPPRTUNITY:• COMPANY SHOULD ESTABLISHED MORE PLANTS FOR

MANUFATURING CEMENT AND SAVE THE COST OF TRANSPORTATION.

• COMPANY SHOULD DELIVER THE ORDERS BY THE GOODS TRAIN.

THREATS:

• IN BALANCE SHEET SCHEDULE -5 THE LONG TERM INVESTMENT AND SHORT TERM INVESTMENT HAS NO EFFECT .THE INVESTMENT WAS SAME NO PROFIT AND NO LOSS.

HOW ?

COMPARISION WITH OTHER

COMPANIES:-

ANALYSIS Profit % Market Capital

Ultra Tech Cement:- 15.20%. 28,059.80 Ambuja Cement:- 16.96%. 20,781.94Acc :- 19.61%. 18,190.71Samruddhi Cement:- 14.40% 13,629.79Shree Cement :- 18.55% 7,131.18India Cement :- 09.31% 3,425.01Prism Cement :- 08.79% 2,987.42Birla Corp :- 25.34% 2,925.43Madras Cements :- 12.56% 2,711.66Chetinad Cement :- 07.07% 2,030.14Binani Cement :- 15.18% 1,640.04

ANALYSIS

Q3 FY 09 Q4 FY 09 Q1 FY 10 Q2 FY 10 Q3 FY 100

1000

2000

3000

4000

5000

6000

3623.7

4980.85247.1

4346.24033.2

84.9 200.7

1067 1011.4

571.7

NET SALE & PATBRAJ BINANI GROUP

NET SALEPAT

YEARS

Rs. C

RORE

Q3 FY09 Q4 FY 09 Q1 FY 10 Q2 FY 10 Q3 FY 100

1

2

3

4

5

6

0.42 0.99

5.25

4.98

2.81

EPS OF BRAJ BINANI

EPS

YEAR

LIMITATION

• Insufficent data.• Schedule -5 not accurate data in Balance

sheet .• Time constraint.• Binani have certain rules and regulations.• Binani does not provide practical knowledge

about finances.

CONCLUSION

• As compared Binani cement has very good performance with his 2 units only. Binani Cement Limited boasts of a fully integrated cement plant, strategically .BCL, a split grinding unit at Neem Ka Thana to increase the capacity of the cement facility to 6 mtpa . Binani Cement, Shree Cement and Dalmia Cement are among the new players who have plans to get into the RMC business in the next five years. It is recommend to ‘BUY’ Equity share in this particular scrip with a target price of Rs.82.00. for Medium to Long term Gains as it is seeing the expansion in medium and long term.

THANK YOU!