Sajan's Report of Fm

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Prism Cement Limited

1

An Analytical Study

Of Three Years Published Data Of


Registered office : Laxmi Niwas Apartments, Ameerpet Hyderabad - 500016

Corporate office : 'Rahejas', Main avenue, V.P.Road, Santacruz (W), Mumbai 400054


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INDEX

Sr. No. TITLE Page

No.

1. Company Profile1.1 Name of the company1.2 Registered Address of the Company1.3 Brief introduction of the activities of business1.4 Status in the market1.5 Special Achievements1.6 Financial Highlights1.7 Meaning of analysis and objective of study

3

2. Results of Operations2.1 Profit of 3 years GP, NP, EBIT, EBT, EAT2.2 Meaning and importance of cash flow statement2.3 Cash flow statement

6

3. Ratio Analysis3.1 Meaning, Importance, Limitation and classification3.2 Profitability ratios3.3 Activity ratios3.4 Liquidity ratios3.5 Leverage ratios

13

4. Accounting policies and notes 41

5. Directors report 43

6. Auditors Report 47

7. Common Sized Statement 48


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Chapter 1 : COMPANY PROFILE

1.1 Name of the company:y Prism Cement Limited

1.2 Registered Address of the company:y Laxmi Niwas Appartments,

Ameerpet Hyderabad - 500016

1.3 Brief introduction of the activities of the business:y Prism Cement LTD. is cement manufacturing company

promoted by Rajan Raheja Group.

y It operates as one of the largest single kiln cement plants inthe country at Satna, Madhya Pradesh, equipped with

state-of-the-art machinery and technical support from F.L

Smidth & Co A.S Denmark, the world leaders in cement

technology.

y The company manufactures and markets PortlandPozzollana Cement (PPC) under the brand name

Champion which is companys largest selling product.

yThis

ISO 9001:2000 certified company also manufactures

Ordinary Portland Cement (OPC) of different grades such

as 33, 43 and 53. Prisms OPC are in demand for

specialised cement concrete applications like high-rise

buildings, bridges, manufacturing AC sheets, pipes, poles

etc.


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1.4 Status in the Market:Prism cement ltd is having very good financial status as well as

market goodwill in 2009-2010 financial year. At that time thecompany is having 4 out of 5 grade as per crisil analysis. The profit

margin is also near to 95% increased in 2009-2010 year then the

previous year but from 2010-2011 profit margin is increased just 10%

which is very lower then previous year and in second quarter of 2011

company make loss of 59.09 crore.

So from the above we can easily understand that company is

very profitable in 2009-2010 financial year after that a flat decrease

can be seen.

1.5 Special Achievements:y Prism cement ltd. was awarded with National Energy

Conservation award for year 2008

1.6 Financial Highlights:Profit:

Year 2008-2009:Rs. 96.23 crores

Year 2009-2010:Rs. 251.05 crores

Year 2010-2011: Rs. 95.79 crores

Sales:Year 2008-2009: Rs. 647.35 crores

Year 2009-2010: Rs. 2837.98 crores


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Year 2010-2011: Rs. 3355.24 crores

EPS:

Year 2008-2009:R

s.3.23Year 2009-2010: Rs. 4.99

Year 2010-2011: Rs. 1.90

1.7 Meaning of analysis and objective of study:

Analysis: The practice of examining information todetermine what conclusions it indicates,. The information

observed in analysis depends on the type of analysis being

conducted.

Objective of study: To know the financial situation andobjectives of the company. Also to know how company

makes its balance sheet, profit and loss statement, cash

flow statement etc.


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Chapter 2 :RESULTS OF OPERATIONS

2.1 Profit of 3 years GP, NP, EBIT, EBT, EAT:

y GP:2008-2009: Rs. 170.14 crores

2009-2010: Rs. 497.44 crores

2010-2011: Rs. 312.25 crores

y NP:2008-2009: Rs. 96.23 crores

2009-2010: Rs. 251.05 crores

2010-2011: Rs. 95.79 crores

y EBIT:2008-2009: Rs. 155.52 crores

2009-2010: Rs. 424.28 crores

2010-2011: Rs. 230.86 crores

y EBT:2008-2009: Rs.151.98 crores

2009-2010: Rs. 375.97 crores

2010-2011: Rs. 129.70 crores


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2.2 Meaning and Importance of cash flow Statement:

Meaning: A statement showing Inflow of cash andoutflow of cash during the last year and as a result the

balance of cash at the end of the year, is known as Cash

Flow Statement.

Importance:y Excess cash found at any time may be profitably invested

for time and profitability is increased.

y The management can plan out payment of dividend,repayment of long term loans, purchase of machines or

equipments etc.

y The information regarding the trends of cash receipts and payments is useful to the management in meeting any

future contingencies and also in seizing any profitable

opportunity.y The historical cash flow statement prepared for last year is

useful for comparing the figures of cash budgets and

points of differences may be located.

y By comparing the figures of cash flow statement and cash budgets, the cash planning and control becomes more

effective.


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2.3 CASH FLOW STATEMENT FOR THE YEARENDED MARCH 31, 2009

2008-2009(9 months)

A. CASH FLOW FROM OPERATING ACTIVITIES:Profit before tax as per Profit and Loss Account

Adjustments:

Dividend income

Interest income

Depreciation

Interest Expenses

Lease rentals

(Profit)/Loss on sale/discard of assets

Operating Profit/(Loss) before Working Capital changes

Adjustment for Working Capital changes:

Inventories

Trade receivables

Other receivables

Trade and other payables

Cash generated from operations

Direct taxes paidNet cash used for operating activities (A)

B. CASH FLOW FROM INVESTING ACTIVITIES:Purchase of Fixed Assets and additions in CWIPProceeds from sale of fixed assets

Net (investment) / redemption in mutual funds

Investment in subsidiary and associate

Dividend received

Interest received

Net Cash used for Investing activities (B)

C. CASH FLOW FROM FINANCING ACTIVITIES:Interest paid

Lease rentals

Dividend paid including tax on dividend

Net Cash from Financing Activities (C)Net increase in cash and cash equivalents during the

year (A+B+C)

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the year

(Note: Here cash flow statement is

given for only 9 months)

Rs. Crores

(7.31)

(0.41)

24.31

1.51

0.29

0.24_______

13.45

3.38

(12.00)

(5.76)______

Rs. Crores

151.98

18.63_______

170.61

(0.93)_______

169.68

(64.82)______

104.86______

(123.12)

0.16

195.55

(140.60)

7.31

0.36________

(60.34)______

(1.51)

(0.14)

(34.90)______

(36.55)______7.97

12.89

20.86


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CASH FLOW STATEMENT FOR THE YEAR ENDED

MARCH 31, 2010

2009-2010


Adjustments:

Depreciation and amortisationExchange loss on sale of preference shares

Dividend income

Income from Joint Ventures Dividend

Interest income

Interest paid

Lease rentalsLoss on assets written-off




Inventories

Trade receivables

Other receivables



Direct taxes paid

Net cash used for operating activities (A)

B. CASH FLOW FROM INVESTING ACTIVITIES:Purchase of Fixed Assets and additions in CWIP

Proceeds from sale of fixed assetsSales proceeds from investments

Purchase of investmentsDividend income

Income from Joint Ventures - DividendDividend on own shares held through trust

Interest income


C. CASH FLOW FROM FINANCING ACTIVITIES:Proceeds from secured loans

Repayment of secured loans

Proceeds from unsecured loans

Rs. Crores

89.85

(8.62)

(2.85)

(8.60)

(3.00)

48.31

0.33

(0.78) .

(41.77)

(47.38)

(1.77)

112.86_____

Rs. Crores

358.25

114.64 .

472.89

21.94_______

494.83

(127.49)_____

367.34______

(603.41)

3.64

375.70

(348.79)

2.85

8.60

1.85

3.00_______

(556.56)_____

459.82

(98.28)

38.41


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Repayment of unsecured loans

Redemption of preference shares

Interest paid

Lease rentals

Dividend paid including tax on dividendNet Cash from Financing Activities (C)

Net increase in cash and cash equivalents during theyear (A+B+C)

Cash and cash equivalents acquired upon amalgamationCash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the yearDetails of cash and cash equivalents:

Balance as per Schedule GLess: Deposits under lien

Balance

Rs.Crores Rs. Crores(4.24)

(10.75)

(48.31)

-

(141.02)_______

195.63________

6.41

25.01

20.86

52.28

52.50

0.22__________

52.28_________


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CASH FLOW STATEMENT FOR THE YEAR ENDED

MARCH 31, 2011

2010-2011


Adjustments:

Depreciation and amortisationExchange loss on sale of preference shares

Dividend income

Income from Joint Ventures Dividend

Interest income

Interest paid

Loss on exchange fluctuation on loansLoss on assets written-off




Inventories

Trade receivables

Other receivables



Direct taxes paid

Net cash used for operating activities (A)

B. CASH FLOW FROM INVESTING ACTIVITIES:Purchase of Fixed Assets and additions in CWIP

Proceeds from sale of fixed assetsSales proceeds from investments

Purchase of investmentsDividend income

Income from Joint Ventures - DividendDividend on own shares held through trust

Interest income


C. CASH FLOW FROM FINANCING ACTIVITIES:Proceeds from secured loans

Repayment of secured loans

Proceeds from unsecured loans

Rs. Crores

113.30

-

(3.01)

(8.38)

(1.58)

93.28

3.43

-(4.26) .

(97.05)

(53.54)

(134.38)

244.80_____

Rs. Crores

130.66

192.78 .

323.44

(40.17)_____

283.27

(29.51)_____

253.76______

(429.92)

8.92

(477.01)

448.04

3.01

8.38

1.24

1.58_______

(435.76)

423.89

(245.04)

200.00


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Repayment of unsecured loans

Redemption of preference shares

Interest paid

Dividend paid including tax on dividend

Net Cash from Financing Activities (C)

Net increase in cash and cash equivalents during the

year (A+B+C)Cash and cash equivalents acquired upon amalgamation

Cash and cash equivalents at the beginning of the yearCash and cash equivalents at the end of the year

Details of cash and cash equivalents:Balance as per Schedule G

Less: Deposits under lienBalance

Rs.Crores Rs. Crores(14.00)

-

(116.53)

(58.70)_______

189.62

7.62

-

52.28

59.90

60.00

0.10__________

59.90_________


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Chapter 3 : RATIO ANALYSIS

3.1 Meaning, Importance, Limitations and classification ofRatio Analysis:

Meaning:

If relationship between various related items in thesefinancial statements are established, they can provide

useful clue to gauge accurately the financial health and

ability of business to make profit. This relationship between the two related items of financial statement is

known as ratio analysis.

Importance:

a)On the basis of profitability ratios, investors get an ideaabout the overall efficiency of business, the management

gets an idea about the efficiency of managers and bank as

well as other creditors draw useful conclusions about

repaying capacity of the borrowers.

b)Banks and other lenders will be able to conclude fromliquidity ratios whether the firm will be able to pay

regularly the interest and loan instalments.

c)All turnover ratios related to sales present a good pictureof the success or otherwise of the business.

d)With the help of ratio inter-firm comparison becomes possible, which shows the strength and weakness of the

firm as compared to other firms and will indicate

corrective measures.


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e)The efficiency of various departments can be judged onthe basis of their profitability ratios and efficiency of each

department can thus be determined.

Limitations:

a)The utility of ratios computed from the financialstatements of one year only is obviously limited.

b)While comparing ratios of different firms, it must beremembered that different firms accountancy plans and

policies.

c)While comparing ratios of past several years, it should beremembered that changes in price level may render such

comparison useless.

d)One ratio used without reference to other ratios may bemisleading.

e)There is practically no standard ratio against which theactual performance can be compared.

f) The accounting ratios can never be more correct than theinformation from which they are computed.

Classification:

a)Traditional classification: The ratios are grouped into basisof the financial statement from which the figures are taken

for computing the ratios. The ratios according to the

classification are:


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i. Revenue statement ratios: These are the ratios computedon the basis of items taken from revenue statement i.e. Profit

and Loss account.

ii. Balance sheet ratios: When two items or groups of itemsappearing in the balance sheet are compared, the ratio soobtained is a balance sheet ratio.

iii. Composite ratios: A ratio showing the relationship betweenone item taken from balance sheet and another taken from

Profit and Loss account is a composite ratio.

b)Functional classification: Ratios are also grouped inaccordance with certain tests on this basis there are four

categories of ratios.

i. Liquidity ratio: These ratios indicate the position ofliquidity. They are computed to ascertain whether the

company is capable of meeting its short-term obligation

from its short term resources.

y Current ratio.y Liquid ratio.y Acid test ratio.

ii. Profitability ratio: A number of ratios are designed toindicate the profitability of the business and are grouped into

the category of profitability ratios:

y Gross profit ratio.y Net profit ratio.y Operating ratio.y Return on total assets.y Return on capital Employed.y Return on equity share capital.y Earning per share.y Dividend per share.


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y Dividend pay-out ratio.

iii. Leverage ratio: The composition of capital of business andthe proportion of owners capital and capital provided byoutsiders are reflected by leverage ratios:

y Proprietary ratioy Debt Equity ratio.y Gearing ratio.y Fixed capital ratio.y Coverage ratio.

iv. Activity ratios: These are the ratios showing theeffectiveness with which the resources of the business are

employed. It signifies the efficiency of the management.

y Stock turnover.y Debtors ratio.y Current asset turnover.y

Fixed assets turnover.y Total assets turnover.


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3.2 Profitability Ratios:

3.2.1. Gross Profit Ratio: It is the basic measure of profitabilityof business. It expresses relationship between oss rofit earned to

net sales. It is also known as gross margin.

Gross profit Ratio = G.P./Sales*100

y G.P. ratio for 2008-2009 = 170.14/647.35*100 = 26.28y G.P. ratio for 2009-2010 = 497.44/2837.98*100 = 17.53y G.P. ratio for 2010-2011= 312.25/3355.24*100 = 9.31

2008-2009 2009-2010 2010-2011

G.P. (rs) 170.14 497.44 312.25

Sales (rs) 647.35 2837.98 3355.24

G.P. ratio 26.28 17.53 9.31

INTERPRETATION: Gross profit ratio has been constantly

declining as we can see in the above table. In year 2009-2010

G.P. ratio has decreased to 33.3% as compared to year 2008-

2009. In the year 2010-2011 G.P. ratio has decreased 64.57% as

compared to year 2008-2009 and 46.89% as compared to year

2009-2010 respectively.

3.2.2. Net Profit Ratio: The net profit is obtained after chargingoperating expenses, interest, depreciation and taxes to the gross

profit..It expresses relationship between net profit earned to net

sales.


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Net Profit ratio = N.P./Sales*100

y N.P. ratio for year 2008-2009 = 96.23/647.35*100 = 14.87y N.P. ratio for year 2009-2010 = 251.05/2837.98*100 = 8.85y N.P. ratio for year 2010-2011 = 95.79/3355.24*100 = 2.85

2008-2009 2009-2010 2010-2011

N.P. (rs) 96.23 251.05 95.79

Sales (rs) 647.35 2837.98 3355.24

N.P. ratio 14.87 8.85 2.85

INTERPRETATION: Net profit ratio has been constantly

declining as we can see in the above table. In year 2009-2010

N.P. ratio has decreased to 40.48% as compared to year 2008-

2009. In the year 2010-2011 N.P. ratio has decreased 80.83% as



3.2.3. Expense ratio: For the purpose of ascertainingrelationship between operating expenses and net sales, expense

ratios are computed.

Expense ratio = Expense/Sales*100


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y Expense ratio for year 2008-2009 = 505.06/647.35*100 =78.02



2008-2009 2009-2010 2010-2011

Expense (rs) 505.06 2482.91 3262.02

Sales (rs) 647.35 2837.98 3355.24

Expense ratio 78.02 87.49 97.22

INTERPRETATION: Here we can see that expense ratio is

increasing from year to year. Hence we can say dat expenses of

the company are increasing as compared to sales. In year 2009-

2010 Expense ratio has increased to 10.82% as compared to

year 2008-2009. In the year 2010-2011 Expense ratio has

increased 19.75% as compared to year 2008-2009 and 10.01%

as compared to year 2009-2010 respectively.

3.2.4. Operating ratio: It is a ratio that shows relationshipbetween cost of goods sold plus operating expenses to sales.

Operating ratio = (Cost of Sales + Operating Expense)/Net

Sales*100

y Operating ratio for year 2008-2009 = 477.21/647.35*100 =73.72



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2008-2009 2009-2010 2010-2011

Operating Expense (rs) 477.21 2340.54 3042.99

Sales (rs) 647.35 2837.98 3355.24

Operating ratio 73.72 82.47 90.69

INTERPRETATION: From the above table we can see that

operating ratio has been increasing year by year. In year 2009-

2010 Operating ratio has increased to 10.61% as compared toyear 2008-2009. In the year 2010-2011 Operating ratio has

increased 18.71% as compared to year 2008-2009 and 9.06% as

compared to year 2009-2010 respectively. Hence we can say

that cost of sales and operating expenses of the company is

increasing compared to previous years.

3.2.5. Capital Employed: The concept of capital employedmeans the long term funds employed in business supplied by thecreditors and owners both.

Capital Employed = EBIT/Capital Employed*100

y Capital Employed for year 2008-2009 = 151.98/661.65*100= 22.97




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2008-2009 2009-2010 2010-2011

EBIT (rs) 151.98 377.12 129.70

Capital Employed(rs) 661.65 1970.97 2377.67

Capital Employed 22.97 19.13 5.45

INTERPRETATION: In the above table we can see that the rate

of capital employed is decreasing every year. In year 2009-2010

rate of Capital Employed has decreased 16.72% as compared to

year 2008-2009. In the year 2010-2011 rate of Capital

Employed has decreased 76.27% as compared to year 2008-

2009 and 71.51% as compared to year 2009-2010 respectively.

3.2.6. Return on shareholders fund: Shareholders equity isthe total funds belonging to shareholders. It includes paid up

equity share capital , preference share capital, Reserves and

surplus etc.

Return on shareholders fund = Net profit/Shareholders fund*100

y Return on shareholders fund for year 2008-2009 =96.23/661.65*100 = 14.54




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2008-2009 2009-2010 2010-2011

Net profit (rs) 96.23 251.05 95.79

Shareholders fund(rs) 661.65 1169.5 1207.83

Return on

shareholders fund

14.54 21.47 7.93

INTERPRETATION: In the above table we can see that Return

on shareholders fund has been fluctuating. In year 2009-2010

Return on shareholders fund has increased 32.28% as

compared to year 2008-2009. In the year 2010-2011 Return on

shareholders fund has decreased 45.46% as compared to year

2008-2009 and 63.06% as compared to year 2009-2010

respectively.

3.2.7. Return on Equity share capital: It indicates profitabilityof a firm from the viewpoint of real owners who are ordinary

shareholders, who bear all risks of business.

Return on Equity share capital = PAT-Preference Dividend/

Equity share capital*100

y Return on Equity share capital for year 2008-2009 =96.23/298.25*100 = 32.26




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2008-2009 2009-2010 2010-2011

PAT (rs) 96.23 251.05 34.52

Equity Capital(rs) 298.25 503.36 503.36

Return on Equity share

capital

32.26 49.87 6.85


on Equity share capital has been fluctuating. In year 2009-2010

Return on Equity share capital has increased 35.31% as

compared to year 2008-2009. In the year 2010-2011 Return on

Equity share capital has decreased 78.77% as compared to year

2008-2009 and 86.26% as compared to year 2009-2010

respectively.

3.2.8. Return on Equity shareholders fund: This ratio showsthe profit available to only equity shareholders in relation to

capital invested by them.

Return on Equity shareholders fund = PAT-Preference Dividend/Equity share fund*100

y Return on Equity shareholders fund for year 2008-2009 =96.23/66.65*100 = 14.54




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2008-2009 2009-2010 2010-2011

PAT (rs) 96.23 251.05 34.52

Equity share fund(rs) 661.65 1169.5 1207.83

Return on Equity

shareholders fund

14.54 21.46 2.86


on Equity shareholders fund has been fluctuating. In year 2009-

2010 Return on Equity shareholders fund has increased 32.25%

as compared to year 2008-2009. In the year 2010-2011 Return

on Equity shareholders fund has decreased 80.28% as



3.2.9. Earnings per share: This ratio measures the profitavailable to equity shareholders on per share basis.

Earnings per share = PAT-Preference dividend/No. Of Equity

shares

y E.P.S. for year 2008-2009 = 96.23-0/298250000 = 3.23y E.P.S. for year 2009-2010 = 251.05-0.08/503356580 = 4.99y E.P.S. for year 2010-2011 = 95.79-0/503356580 = 1.9

2008-2009 2009-2010 2010-2011PAT (rs) 962300000 2510500000 957900000

Preference dividend(rs) 0 800000 0

No. Of shares 298250000 503356580 503356580

Earnings per share 3.23 4.99 1.9


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INTERPRETATION: In the above table we can see that

Earnings per share is fluctuating. In year 2009-2010 Earnings

Per Share has increased 35.27% as compared to year 2008-2009.

In the year 2010-2011 Earnings per share has decreased 41.18%

as compared to year 2008-2009 and has increased 61.92% as

compared to year 2009-2010.

3.2.10. Dividend per share: Dividend per share is the amount ofactual dividend paid to equity shareholders divided by the no.

Of equity shares outstanding.

Dividend per share = Total dividend declared/No. Of shares

y D.P.S for year 2008-2009 = 549000000/298250000 = 1.84y D.P.S for year 2009-2010 = 416000000/503356580 = 0.83y D.P.S for year 2010-2011 = 587000000/503356580 = 1.17

2008-2009 2009-2010 2010-2011

Total Dividend

declared (rs)

549000000 416000000 587000000

No. Of shares 298250000 503356580 503356580

Dividend per share 1.84 0.83 1.17


Dividend per share is fluctuating.In year 2009-2010 Dividend

Per Share has decreased 54.89% as compared to year 2008-

2009. In the year 2010-2011 Dividend per share has decreased

36.41 % as compared to year 2008-2009 and has increased

29.06% as compared to year 2009-2010.


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3.2.11. Price Earning Ratio: It shows the relation between themarket price of the share and EPS.

Price earning ratio = Market value per share/Earning per share

y PER for year 2008-2009 = 28.2/1.9 = 14.84y PER for year 2009-2010 = 41.6/4.99 = 8.34y PER for year 2010-2011 = 54.9/3.23 = 17

2008-2009 2009-2010 2010-2011

Market value per

share(rs)28.2 41.6 54.9

E.P.S 1.9 4.99 3.23

Price earning ratio 14.84 8.34 17

INTERPRETATION: In the above table we can see that price

earning ratio is fluctuating. In year 2009-2010 price earningratio has decreased 43.8% as compared to year 2008-2009. In

the year 2010-2011price earning ratio has increased 12.71 % as

compared to year 2008-2009 and has increased 50.94% as


3.2.12. Dividend Yield Ratio: The Dividend yield is thepercentage of dividend actually received to the market value perequity share.

Dividend yield ratio = Dividend per share/Market value per share


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y DYR for year 2008-2009 = 1.17/28.2 = 0.04y DYR for year 2008-2009 = 0.83/41.6 = 0.02y DYR for year 2008-2009 = 1.84/54.9 = 0.03

2008-2009 2009-2010 2010-2011

Dividend per share 1.17 0.83 1.84

Market value per

share(rs)

28.2 41.6 54.9

Dividend yield ratio 0.04 0.02 0.03


Dividend yield ratio is fluctuating. In year 2009-2010 Dividend

yield ratio has decreased 50% as compared to year 2008-2009.

In the year 2010-2011 Dividend yield ratio has increased 25 %

as compared to year 2008-2009 and has increased 33.33% as


3.3 Activity/Turnover ratio:

3.3.1. Fixed asset turnover ratio: To ascertain the efficiencyand profitability of the business, the total fixed assets are

compared to sales.

Fixed Assets turnover ratio = Sales/Fixed Assets


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y Fixed assets turnover ratio for year 2008-2009 =647.35/705.67 = 0.92



2008-2009 2009-2010 2010-2011

Sales (Rs) 647.35 2837.98 3355.24

Fixed Assets (Rs) 705.67 1939.03 2298.53

Fixed Assets turnover

ratio

0.92 1.46 1.46

INTERPRETATION: In the above table we can see that Fixed

Assets turnover ratio firstly increased den remained same in the

year 2010-2011. In year 2009-2010 Fixed Assets turnover ratio

has increased 36.99% as compared to year 2008-2009. In the

year 2010-2011 Fixed Assets turnover ratio has increased 36.99

% as compared to year 2008-2009 and has remained same as


3.3.2. Debtors ratio: The ratio shows the no. Of days taken tocollect the dues of credit sales.

Debtors ratio = Debtors+B/R/Average daily sales * no. Of

working days


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y Debtors ratio for year 2008-2009 = Information not available.y Debtors ratio for year 2009-2010 = 211.08/2837.98*365 =

27.14 days

y Debtors ratio for year 2010-2011 = 264.62/3355.24*365 =28.79 days

2008-2009 2009-2010 2010-2011

Debtors (rs) - 211.08 264.62

Sales (Rs) 647.35 2837.98 3355.24

Debtors ratio - 27.14 28.79

INTERPRETATION: In the above table we can see that debtors

ratio of the year 2010-2011 has increased in comparison to

2009-2010. In year 2010-2011 debtors ratio has increased

5.73% as compared to 2009-2010.

3.3.3. Debtors Turnover ratio: The debtors turnover suggeststhe no. Of times the amount of credit sales is collected duringthe year.

Debtors turnover ratio = Credit Sales/Average Debtors

y Debtors turnover ratio for year 2008-2009 = Information notavailable.

y Debtors turnover ratio for year 2009-2010 = 2837.98/211.08= 13.45

y Debtors turnover ratio for year 2010-2011 = 3355.24/237.85= 14.11


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2008-2009 2009-2010 2010-2011

Credit sales (rs) - 2837.98 3355.24

Average debtors (Rs) - 211.08 237.85

Debtors turnover ratio - 13.45 14.11

INTERPRETATION: In the above table we can see that debtors

turnover ratio of the year 2010-2011 has increased in

comparison to 2009-2010. In year 2010-2011 debtors turnover

ratio has increased 4.68% as compared to 2009-2010.

3.3.4. Creditors ratio: The no. Of days within which we makepayment to our creditors for credit purchases is obtained from

creditors velocity.

Creditors Ratio = Creditors+B/P/Credit purchase*365

y Creditors ratio for year 2008-2009 = 35.11/479.29*365 =26.74y Creditors ratio for year 2009-2010 = 293.60/2265.62*365 =

47.30

y Creditors ratio for year 2010-2011 = 444.09/3042.51*365=53.28

2008-2009 2009-2010 2010-2011Creditors (R.s.) 35.11 293.6 444.09

Credit Purchase(Rs) 479.29 2265.62 3042.51

Creditors ratio 26.74 47.3 53.28


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creditors ratio is increasing constantly. In year 2009-2010

Creditors ratio has increased 43.47% as compared to year 2008-

2009. In the year 2010-2011 Creditors ratio has increased 49.81

% as compared to year 2008-2009 and has increased 11.22% as

compared to year 2009-2010. Hence we can say that debts of the

company has increased.

3.3.5. Creditors turnover ratio: The creditors ratio suggests theno. Of times the amount of credit purchase is done during the

year.

Creditors Turnover ratio = Credit purchase/Average Creditors

y Creditors turnover ratio for year 2008-2009 = 479.29/35.11 =13.65

y Creditors turnover ratio for year 2009-2010 = 2265.62/293.6= 7.72y Creditors turnover ratio for year 2010-2011 = 3042.51/444.09

= 6.85

2008-2009 2009-2010 2010-2011

Credit purchase (rs) 479.29 2265.62 3042.51

Average creditors (rs) 35.11 293.6 444.09Creditors turnover

ratio

13.65 7.72 6.85


creditors turnover ratio is decreasing constantly. In year 2009-


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2010 Creditors turnover ratio has decreased 43.44% as

compared to year 2008-2009. In the year 2010-2011 Creditors

turnover ratio has decreased 49.82 % as compared to year 2008-

2009 and 11.27% as compared to year 2009-2010 respectively.

3.3.6. Stock turnover ratio: It shows the no. Of times theaverage stock is turned over during the year.

Stock turnover ratio = Cost of sales/Average stock

y Stock turnover ratio for year 2008-2009 = 477.21/2.96 =161.21



2008-2009 2009-2010 2010-2011

Cost of sales (rs) 477.21 2340.54 3042.99

Average stock (rs) 2.96 39.38 77.08

Stock turnover ratio 161.21 59.43 39.47

INTERPRETATION: In the above table we can see that stock

turnover ratio is decreasing constantly. In year 2009-2010 stock

turnover ratio has decreased 63.13% as compared to year 2008-

2009. In the year 2010-2011 stock turnover ratio has decreased

75.52 % as compared to year 2008-2009 and 33.59% as

compared to year 2009-2010 respectively.


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3.3.7. Working capital turnover: A measurement comparingthe depletion of working capital to the generation of sales over a

given period.

Working capital turnover = Sales/Net working capital

y Working capital turnover for year 2008-2009 = 647.35/58.84= 11

y Working capital turnover for year 2009-2010 =2837.98/186.62 = 15.2

y Working capital turnover for year 2010-2011 =3355.24/266.94 = 12.56

2008-2009 2009-2010 2010-2011

Sales (rs) 647.35 2837.98 3355.24

Net working capital (rs) 58.84 186.62 266.94

Working capitalturnover

11 15.2 12.56


Working capital turnover ratio is fluctuating. In year 2009-2010

Working capital turnover ratio has increased 27.63% as

compared to year 2008-2009. In the year 2010-2011 Working

capital turnover ratio has increased 12.42 % as compared to year

2008-2009 and has decreased 17.37% as compared to year

2009-2010.


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3.3.8. Book Value per share: A financial measure thatrepresents a per share assessment of the minimum value of a

company's equity is known as book value per share.

Book value per share = Proprietors fund/No. Of share

y BVPS for year 2008-2009 = 661.65/298250000 = 22.18y BVPS for year 2009-2010 = 1169.5/503356580 = 23.23y BVPS for year 2010-2011 = 1207.83/503356580 = 23.99

2008-2009 2009-2010 2010-2011

Proprietors fund (rs) 6616500000 11695000000 12078300000

No. Of shares 29825000 503356580 503356580

Book Value per

share

22.18 23.23 23.99

INTERPRETATION: In the above table we can see that Book

Value per share is increasing. In year 2009-2010 Book Value

per share has increased 4.52% as compared to year 2008-2009.

In the year 2010-2011 Book Value per share has increased 7.54

% as compared to year 2008-2009 and has increased 3.17% as



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3.4 Liquidity ratios:

3.4.1. Current ratio: This ratio shows the proportion ofcurrent assets to current liabilities.

Current ratio = Current Assets/Current Liabilities

y Current ratio for year 2008-2009 = 168.66/109.82 = 1.535y Current ratio for year 2009-2010 = 683.53/496.91 = 1.375y Current ratio for year 2010-2011 = 971.61/704.67 = 1.378

2008-2009 2009-2010 2010-2011

Current Assets (rs) 168.66 683.53 971.61

Current Liabilities (rs) 109.82 496.91 704.67

Current ratio 1.535 1.375 1.378

INTERPRETATION: In the above table we can see that Current

ratio is fluctuating very minorly. In year 2009-2010 Current

ratio has decreased 10.42% as compared to year 2008-2009. In

the year 2010-2011 Current ratio has decreased 10.23 % as

compared to year 2008-2009 and has increased 0.22% as


3.4.2. Liquid ratio: It is variant of current which isdesigned to show the amount of funds to meet immediate

payments.


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Liquid ratio = Liquid assets/Liquid liability

y Liquid ratio for year 2008-2009 = 91.76/109.82 = 0.83y Liquid ratio for year 2009-2010 = 409.29/496.91 = 0.82y Liquid ratio for year 2010-2011 = 706.99/704.67 = 1.003

2008-2009 2009-2010 2010-2011

Liquid Assets (rs) 91.76 409.29 706.99

Liquid Liabilities (rs) 109.82 496.91 704.67

Liquid ratio 0.83 0.82 1.003

INTERPRETATION: In the above table we can see that Liquid

ratio is fluctuating. In year 2009-2010 Liquid ratio has

decreased 1.2% as compared to year 2008-2009. In the year

2010-2011 Liquid ratio has decreased 17.25% as compared to

year 2008-2009 and has increased 18.25% as compared to year

2009-2010.

3.4.3. Acid test ratio: A stringent indicator that determineswhether a firm has enough short-term assets to cover its

immediate liabilities without selling inventory.

Acid test ratio = Quick assets/liquid liabilities

y Acid test ratio for year 2008-2009 = 91.76/109.82 = 0.83y Acid test ratio for year 2009-2010 = 409.29/496.91 = 0.82y Acid test ratio for year 2010-2011 = 706.99/704.67 = 1.003


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2008-2009 2009-2010 2010-2011

Quick Assets (rs) 91.76 409.29 706.99


Acid test/quick ratio 0.83 0.82 1.003






2009-2010.

3.5 Leverage ratios:

3.5.1. Current ratio: This ratio shows the proportion ofcurrent assets to current liabilities.

Current ratio = Current Assets/Current Liabilities

y Current ratio for year 2008-2009 = 168.66/109.82 = 1.535y Current ratio for year 2009-2010 = 683.53/496.91 = 1.375y

Current ratio for year 2010-2011 = 971.61/704.67 = 1.378


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2008-2009 2009-2010 2010-2011

Current Assets (rs) 168.66 683.53 971.61

Current Liabilities (rs) 109.82 496.91 704.67

Current ratio 1.535 1.375 1.378


Current ratio is fluctuating very minorly. In year 2009-2010

Current ratio has decreased 10.42% as compared to year

2008-2009. In the year 2010-2011 Current ratio has

decreased 10.23 % as compared to year 2008-2009 and has

increased 0.22% as compared to year 2009-2010.

3.5.2. Liquid ratio: It is variant of current which isdesigned to show the amount of funds to meet immediate

payments.

Liquid ratio = Liquid assets/Liquid liability

y Liquid ratio for year 2008-2009 = 91.76/109.82 = 0.83y Liquid ratio for year 2009-2010 = 409.29/496.91 = 0.82y Liquid ratio for year 2010-2011 = 706.99/704.67 = 1.003

2008-2009 2009-2010 2010-2011

Liquid Assets (rs) 91.76 409.29 706.99Liquid Liabilities (rs) 109.82 496.91 704.67

Liquid ratio 0.83 0.82 1.003




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2009-2010.

3.5.3. Acid test ratio: A stringent indicator that determineswhether a firm has enough short-term assets to cover its

immediate liabilities without selling inventory.

Acid test ratio = Quick assets/liquid liabilities

y Acid test ratio for year 2008-2009 = 91.76/109.82 = 0.83y Acid test ratio for year 2009-2010 = 409.29/496.91 = 0.82y Acid test ratio for year 2010-2011 = 706.99/704.67 = 1.003

2008-2009 2009-2010 2010-2011

Quick Assets (rs) 91.76 409.29 706.99


Acid test/quick ratio 0.83 0.82 1.003





year 2008-2009 and has increased 18.25% as compared to year2009-2010.


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3.5.4. Long term funds to fixed assets: This ratio showsthe relationship between fixed capital and fixed assets.

Long term funds to fixed assets = Capital employed/Net fixed

assets

y Long term funds to fixed assets for year 2008-2009 =661.65/392.70 = 1.68



2008-2009 2009-2010 2010-2011

Capital Employed(rs) 661.65 1970.97 2377.67

Net fixed assets (rs) 392.70 991.13 1886.78

Long term funds to

fixed assets

1.68 1.98 1.26

INTERPRETATION: In the above table we can see that Long

term funds to assets ratio is fluctuating. In year 2009-2010 Long

term funds to assets ratio has increased 15.15% as compared to

year 2008-2009. In the year 2010-2011 Long term funds to

assets ratio has decreased 25% as compared to year 2008-2009

and has increased 36.36% as compared to year 2009-2010.


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Chapter 4: Accounting Policies and standards

Notes of Accounts:1.Exceptional items shown in the Profit and Loss Account

comprises of gain of Rs. 4.36 Crores on sales of land andbuilding, loss ofRs. 1.35 Crores on redemption of mutual fund

investments and loss of Rs. 2.05 Crores on redemption of

investments in preference shares (Previous year : exceptionalitems comprises of amalgamation expenses ofRs. 10.25 Crores

and exchange loss of Rs. 8.62 Crores on redemption of

investments in preference shares.)2. The group has investment in Norcros Plc to the extent of 9.92%

of the equity capital. As per the management of the Company itdoesnt have significant influence over Norcros Plc due to

professional management structure and intention for which the

investment has been made. Further, the group has no materialtransactions with Norcros Plc. In view of this, Norcros Plc is notconsidered as an Associate and accordingly, accounting of the

same is carried out as per Accounting Standard - 13 in

Accounting for Investments as notified under the Companies(Accounting Standards) Rules, 2006.

3.The Depreciation is being provided for on straight line methodat the rates provided in schedule XIV to the Companies Act,1956 except for H. & R. Johnson (India) TBK Ltd., including

Joint Ventures of H. & R. Johnson (India) TBK Ltd., Sentini

Ceramica Private Ltd. and Milano Bathroom Fittings PrivateLtd., where they have charged the same on written down valuemethod. The proportion of value of depreciation which has been

charged on written down value method is as under :

l Amount of Depreciation charged on WDV basis Rs. 4.99Crores (Previous Year : Rs. 5.68 Crores)l Total Depreciation charged in Consolidated Accounts ` 126.01

Crores (Previous Year : Rs. 102.35 Crores)


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l Percentage of Depreciation charged on WDV basis to total

Depreciation : 3.96%

Main policies pertaining the unit:Basis of Preparation:

The financial statements have been prepared to comply in all

material aspects with the Notified Accounting Standards byCompanies (Accounting Standards) Rules, 2006 and the relevant

provisions of the Companies Act, 1956.

Method of Accounting and Revenue RecognitionAccounts are maintained on an accrual basis and at historicalcost. Sales are recognised on passing of risks and rewardsattached to the goods. Sales include excise duty but do not

include Value Added Tax (VAT) and Central Sales Tax (CST).Dividend income is recognised for when the right to receive is

established. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rateapplicable.

Implications: The preparation of financial statements inconformity with Indian Generally Accepted AccountingPrinciples (GAAP) requires management to make estimates andassumptions that affect the reported amounts of assets and

liabilities and disclosures relating to contingent liabilities as atthe date of financial statements and reported amounts ofrevenues and expenses during the reporting period. Actual

results could differ from these estimates. Differences betweenthe actual result and estimates are recognised in periods inwhich the results are known/materialised.


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Chapter 5: Directors Report

2008-2009:Finance

The company continues to be debt free. The company major

investments are in Mutual fund liquid schemes. The aggregrateamount of investments in the schemes as an march 31, 2009 stood atRs. 55.8 crores. During the period under review, the company has

invested Rs. 145.78 crores in raheja QBE General insurance companyLtd, taking the total investment to Rs. 153.18 crores (including Rs.

5.18 crores as share application money), which represents 74% of its

share in the subsidiary.

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statements have been prepare

in accordance with the requirements of the Accounting standard (AS)21, consolidated financial statements and accounting standards (AS)

23, Accounting for investments in association in consolidated

financial statements issued by the institute of chartered accountants ofindia.

For the nine months ended March 31, 2009, the consolidated net

profit of the company amounted to Rs 92.05 crores as compared toRs. 96.23 crores for the company on a standalone basis.

2009-2010:

Finance

Pursuant to the Scheme, the Company has issued and allotted

20,51,06,580 equity shares of the Company, of the face value ofRs.10/- each, to each of the members of H. & R. Johnson (India) Limited


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and RMC Readymix (India) Private Limited. Out of the said

allotment, 1,23,51,600 equity shares were allotted to the Prism Trust,set up pursuant to the Scheme for the benefit of the Company, againstthe equity shares held by H. & R. Johnson (India) Limited in the paid-

up capital ofR

MCR

eadymix (India) Private Limited.

Upon the Scheme becoming effective, the issued, subscribed

and paid-up equity share capital of the Company post allotment ofshares as a foresaid stands at Rs. 503.36 crores comprising of50,33,56,580 equity shares of Rs. 10/- each fully paid-up and the

Authorised Capital stands at Rs. 525 crores comprising of50,50,00,000 equity shares of Rs. 10/- each and 2,00,00,000

preference shares ofRs. 10/- each.

During the year under review, the Company tied up term loans

to finance its ongoing capital expenditure and the total borrowings ofthe Company stood at Rs. 801.57 crores as on March 31, 2010.


The Consolidated Financial Statements have been prepared by

the Company in accordance with the applicable Accounting Standards(AS - 21, AS 23 and AS - 27) issued by the Institute of CharteredAccountants ofIndia.

For the year ended March 31, 2010, the consolidated net profitof the Company and its subsidiary companies amounted to Rs. 259.78

crores as compared to Rs. 251.05 crores for the Company on

a stand alone basis.


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2010-2011

Finance

During the year under review, the Company privately placed

Secured Redeemable Non-convertible Debentures of Rs. 100 croresand Unsecured Redeemable Non-convertible Debentures of Rs. 50

crores to fund its ongoing capital expenditure. The Non-convertibleDebentures (NCDs) are listed on The Bombay Stock ExchangeLimited.

The Company has repaid loans ofRs. 259.04 crores during the

year and tied up term loans ofRs. 623.89 crores (inclusive of NCDsof Rs. 150 crores) to finance its long term working capital/capitalexpenditure during the year. The total borrowings of the Company

stood at Rs. 1,169.84 crores as on March 31, 2011. The loans wereused for the purpose that they were sanctioned for by the respective

banks/financial institutions.


The Consolidated Financial Statements have been prepared bythe Company in accordance with the applicable Accounting Standards

(AS - 21, AS - 23 and AS - 27) issued by the Institute of CharteredAccountants ofIndia.

For the year ended March 31, 2011, the consolidated net profitof the Company and its subsidiary companies amounted to Rs. 104.95

crores as compared to Rs. 95.79 crores for the Company on astandalone basis.


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Other general information and implementations:

Expansion

During the year, the Division enlarged its scope of operations

and has commenced operating a Mega Project Vertical in view of thelarge infrastructure construction work expected to be put in place to

meet the requirements of the power, water, irrigation and

infrastructure sectors.The Mega Project Vertical will offer dedicated site project

solutions to the construction industry.

The Division has planned to increase its size of operations in the

coming years and is actively pursuing certain projects in the RMC andAggregates Verticals. Some of these projects will become operational

during 2010-11.

Future Outlook

The ready mixed concrete industry is 15 years old and has beenon a fast track growth mode over the last few years. The anticipated

construction boom and developments in the residential, commercialand infrastructure space will offer great opportunities to the Division.The growth forRMC will come through higher penetration in more

areas of construction. At present, around 8-10% of the total concretemanufactured in the country is obtained through the RMC routewhereas internationally this figure is in the region of 60-70%. It is

expected that this will undergo change and going ahead thepenetration will be more and faster.


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Chapter 6: Auditors report

Name of the auditors: J.M. GandhiThe Auditors report is qualified.

Implications:In 2004 the Order issued by the Central Government ofIndia in

terms of sub-section (4A) of Section 227 of the Companies Act,1956, auditors have enclose in the Annexure a statement on the

matters specified in paragraphs 4 and 5 of the said Order.


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Chapter 7: COMMON SIZED STATEMENT

P & L A/C Common sizeYear Percentage of Sales

Sales

Cost of goods sold

Gross profit:

Administrative expenses

Selling expenses

Total operating Expense

Net Profit:

2008-09

Rs.

2009-10

Rs.

2010-11

Rs.

2008-09

%

2009-10

%

2010-11

%

647.35

477.21__

170.14__

28.81

74.22___

103.03__

96.23

2837.98

2340.54_

497.44__

135.29

389.53__

524.82__

251.05

3355.24

3042.99_

312.25__

175.22

511.42__

686.04__

95.79

100

73.72___

26.28___

4.45

11.47___

15.92___

14.87

100

82.47___

17.53___

4.78

13.73___

18.49___

8.85

100

90.69___

9.31____

5.22

15.24___

20.45___

2.85


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Common size Balance sheet:

y Common size balance sheet for year 2008-2009

Assets Amount Rs. % of Total

AssetsFixed Assets less depreciationCapital Work in progress

Investments

Net current assets

392.70109.16

203.81

-44.02 .661.65

59.35%16.5%

30.8%

-6.65% .100%

Liabilities Amount Rs. % of TotalLiabilities

Equity share capitalReserves & Surplus

Secured loansUnsecured loans

298.25363.4

-- .661.65

45.08%54.92%

-- .100%

y Common size balance sheet for year 2009-2010Assets Amount Rs. % of Total

AssetsFixed Assets less depreciation

Capital Work in progressInvestmentsNet current assets

991.13

621.23326.6732.04 .

1971.07

50.28%

31.52%16.57%1.63% .

100%


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Liabilities Amount Rs. % of Total

LiabilitiesEquity share capital

Reserves & Surplus


503.36

666.14

743.258.37 .1971.07

25.54%

33.8%

37.7%2.96% .100%

y Common size balance sheet for year 2010-2011

Assets Amount Rs. % of TotalAssets

Fixed Assets less depreciation

Capital Work in progress

Investments

Net current assets

1886.78

57.44354.31

79.14 .2377.67

79.35%

2.42%14.9%

3.33% .100%

Liabilities Amount Rs. % of TotalLiabilities

Equity share capitalReserves & Surplus


503.36704.47

925.47244.37 .2377.67

21.17%29.63%

38.92%10.28% .100%


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Comparison of common size with absolute P & L andbalance sheet:

P & L A/C common size is basically extracted from P&La/c. Here Sales is taken as 100% and den every expenses

are calculated into percentage on sales. In profit and loss

a/c amount is given in currencies while in common size

profit and loss common size that amount is converted into

percentage form. Hence it becomes easy to understand the

incomes and expenses of the company by P&L a/c

common size.

In the same way balance sheet common size is extractedfrom balance sheet. Here total assets and total liabilities is

taken as 100%. Hence it becomes to know and understand

the balance sheet.

Sajan's Report of Fm

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