RAK Ceramics (Bangladesh) Ltd.

RAK Ceramics (Bangladesh) is the country’s largest and leading

tiles and sanitaryware brand. The Company was incorporated in
Bangladesh on 26 November 1998 as a private limited company under
the Companies Act, 1994, as a UAE-Bangladesh joint venture project.
The Company commenced commercial production on 12 November
2000. It converted into a public limited company on 10 June 2008
and subsequently listed on the stock exchanges of Bangladesh on 13
June 2010.
 RAK Ceramics (Bangladesh) Ltd.
Statement of financial position
as at 31 December

Year
Particulars 2013 2014 2015 2016
Assets

Property, plant and equipment 1,899,003,828 1,798,341,132 2,101,671,865 3,812,044,109

Investment property
Intangible assets 1,607,014 4,815,453 6,683,955 6,740,159
Trade and other receivables 43,400,792 187,146,983 148,050,000 74,025,000
Capital work in progress 35,091,397 289,116,566 1,545,379,710 28,726,284
Loan to subsidiary and associate 559,597,389 518,193,968
Investment in subsidiaries 900,220,800 383,200,000 360,379,950 360,379,950

Total non-current assets 3438921220 3180814102 4162165480 4281915502

Inventories 1,858,379,882 1,774,687,781 2,182,676,306 2,461,037,120

Trade and other receivables 720,608,027 713,050,343 611,920,398 600,037,283
Investment held for sale 361,914,560
Loan to associate 35,606,796 40,661,640 201,898,000 201,898,000
Advances, deposits and prepayments 188,900,332 358,743,066 332,412,027 398,705,901
Advance income tax 1,586,060,753 1,912,281,758 2,059,429,603 2,280,196,137
Cash and cash equivalents 1,437,778,798 1,394,695,836 997,806,852 693,707,402

Total current assets 5827334588 6556034984 6386143186 6635581843

Total assets 9266255808 9736849086 10548308666 10917497345

Equity

Share capital 3,062,278,290 3,368,506,110 3,368,506,110 3,368,506,110

Share premium 1,473,647,979 1,473,647,979 1,473,647,979 1,473,647,979
Retained earnings 2,029,441,871 1,853,026,000 1,219,078,987 1,291,214,523
Total equity 6565368140 6695180089 6061233076 6133368612

Liabilities

Deferred tax liability 56,957,686 41,564,780 38,236,099 91,907,602

Borrowings 420,624,802 594,926,064
Total non-current liabilities 56,957,686 41,564,780 458,860,901 686,833,666

Borrowings 255,783,541 323,755,163 771,119,369 567,719,326

Employees benefit payable 12,843,176 70,688,326 23,904,515
Trade and other payables 245,573,276 370,177,134 662,561,271 621,222,937
Accrued expenses 370,790,234 172,991,478 166,873,036 251,406,561
Provision for income tax 1,758,939,755 2,062,492,116 2,403,756,498 2,656,946,243
Total current liabilities 2643929982 3000104217 4028214689 4097295067
Total liabilities 2,700,887,668 3,041,668,997 4,487,075,590 4,784,128,733
Total equity and liabilities 9,266,255,808 9,736,849,086 10,548,308,666 10,917,497,345
 2017 2018

3,219,767,760 3,043,473,716
701,681,877 691,149,776
5,429,027 11,916,384

41,415,719 127,781,532

360,379,950 360,379,950

4328674333 4234701358

2,467,927,703 2,935,341,706
570,126,412 847,302,232

297,504,647 294,088,849
2,575,003,527 2,841,236,116
1,315,315,265 764,167,746

7225877554 7682136649
11554551887 11916838007

3,536,931,410 3,890,624,560
1,473,647,979 1,473,647,979
1,448,741,753 1,624,536,295
6459321142 6988808834

143,966,583 166,024,078
359,163,292 88,203,349
503,129,875 254,227,427

548,162,038 309,652,416

669,301,159 634,828,996
420,578,875 502,233,555
2,954,058,798 3,227,086,779
 4592100870 4673801746
5,095,230,745 4,928,029,173
11,554,551,887 11,916,838,007
 Statement of profit or loss and
comprehensive income
for the year ended 31 Decem

Year
Particulars 2013 2014
Sales 4,687,262,509 5,009,387,118
Cost of sales -2,961,999,118 -3,161,225,770
Gross profit 1,725,263,391 1,848,161,348

Other income 38,414,466 44,076,989

Administrative expenses -235,662,788 -403,879,105
Impairment loss on trade receivable
Marketing and selling expenses -486,989,506 -664,746,269
-684,237,828 -1,024,548,385

Profit from operating activities 1,041,025,563 823,612,963

Finance income 213,035,252 204,934,862

Finance expenses -12,722,910 -7,459,571
Net finance income 200,312,342 197,475,291

Profit before contribution to workers'

profit participation and welfare fund and income tax 1,241,337,905 1,021,088,254
Contribution to workers' profit participation and welfare fund -59,111,329 -48,623,250
Profit before income tax 1,182,226,576 972,465,004

Income tax expense:

Current tax -340,962,371 -398,704,217
Deferred tax 27,122,870 15,392,906
-313,839,501 -383,311,311

Profit for the year 868,387,075 589,153,693

Other comprehensive income for the year
Total comprehensive income for the year 868,387,075 589,153,693

Basic earnings per share (par value Tk 10) 2.58 1.75

Statement of profit or loss and other
comprehensive income
for the year ended 31 December

Year
2015 2016 2017 2018
5,013,034,253 5,577,443,970 6,857,150,915 6,768,898,315
-3,015,388,640 -3,355,020,608 -4,337,619,174 -4,417,547,895
1,997,645,613 2,222,423,362 2,519,531,741 2,351,350,420

66,653,261 113,249,824 102,298,556 157,626,209

-308,662,916 -332,594,844 -352,098,131 -357,354,110
-3,162,362
-687,682,858 -699,551,760 -772,198,834 -906,244,747
-929,692,513 -918,896,780 -1,021,998,409 -1,109,135,010

1,067,953,100 1,303,526,582 1,497,533,332 1,242,215,410

86,212,028 18,400,859 18,507,175 32,051,044

-18,812,730 -39,747,963 -99,773,955 -37,086,830
67,399,298 -21,347,104 -81,266,780 -5,035,786

1,135,352,398 1,282,179,478 1,416,266,552 1,237,179,624

-54,064,400 -61,056,166 -67,441,264 -58,913,315
1,081,287,998 1,221,123,312 1,348,825,288 1,178,266,309

-329,336,045 -253,189,745 -297,112,555 -273,027,981

3,328,681 -53,671,503 -52,058,981 -22,057,495
-326,007,364 -306,861,248 -349,171,536 -295,085,476

755,280,634 914,262,064 999,653,752 883,180,833

755,280,634 914,262,064 999,653,752 883,180,833

2.24 2.71 2.27 2.27

Particulars 2013

Cash flows from operating activities

Cash receipts from customers 4,699,771,401
Cash payments to suppliers and employees -3,616,812,146
Cash generated from operating activities 1,082,959,255

Interest received from bank deposit 3,687,887

Income tax paid -313,765,850
Net cash (used in)/from operating activities 772,881,292

Cash flows from investing activities

Acquisition of property, plant and equipment -104,338,624
Sale of property, plant and equipment 3,064,156
Disposal proceeds of associate
Loan to subsidiaries and associate 4,795,815
Investment in subsidiaries and associates -30,630,000
Interest received from FDR 165,893,802
Income from rental
Intangible assets -595,496
Dividend received 29,562,500
Net cash (used in)/from investing activities 67,752,153

Cash flows from financing activities

Finance charges -12,722,910
Avail/ (repayment) of short term borrowings 43,253,213
Avail/ (repayment) of long term borrowings
Dividend paid -414,001,079
Unclaimed share application fund -863,996
Net cash (used in)/from financing activities -384,334,772
Effect of exchange rate changes in cash and cash equivalents

Net increase/(decrease) in cash and cash equivalents 456,298,673

Cash and cash equivalents as at 1 January 981,480,125
Cash and cash equivalents as at 31 December 1,437,778,798
 RAK Ceramics (Bangladesh) Ltd.
Statement of cash flows
for the year ended 31 December

Year
2014 2015 2016 2017 2018

4,786,300,855 5,077,233,550 5,509,595,241 6,992,654,428 6,480,145,244

-3,894,122,440 -3,910,804,174 -4,303,618,433 -4,918,902,620 -5,743,933,669
892,178,415 1,166,429,376 1,205,976,808 2,073,751,808 736,211,575

2,397,804 5,878,296 2,501,297 8,087,551 5,105,100

-326,221,005 -147,147,845 -220,766,533 -294,807,390 -266,232,589
568,355,214 1,025,159,827 987,711,572 1,787,031,969 475,084,086

-389,490,597 -1,797,584,154 -584,223,234 -327,700,455 -307,400,340

1,150,500 641,500 134,140
374,599,560 86,710,000 74,025,000 74,025,000
36,348,577 102,973,608
-243,179,950
107,117,449 65,415,094 13,159,539 7,718,236 28,745,724
7,758,261 8,911,130 16,628,956 10,757,571
-5,222,551 -5,673,511 -12,401,543 -6,925,458 -11,950,323
35,405,000 58,775,000 103,489,500 83,979,600 85,959,600
-214,691,622 -1,436,916,092 -383,713,108 -152,274,121 -119,728,628

-7,459,571 -15,447,122 -42,288,002 -40,339,117 -45,604,563

67,971,622 447,364,206 -203,400,043 -35,815,064 -238,509,621
420,624,802 174,301,261 -267,565,020 -270,959,943
-456,817,003 -836,657,005 -838,775,610 -669,736,148 -351,973,215
-441,602 -1,017,600 2,064,480 -19,200
-396,746,554 14,867,281 -908,097,914 -1,013,455,349 -907,066,542
305,363 563,565

-43,082,962 -396,888,984 -304,099,450 621,607,862 -551,147,519

1,437,778,798 1,394,695,836 997,806,852 693,707,402 1,315,315,265
1,394,695,836 997,806,852 693,707,402 1,315,315,264 764,167,746
 RAK Ceramics (Bangladesh) Limited
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December
2018

Details Share Capital Share Premium Retained Earning

Balance as at 1 January 2018 3,536,931,410 1,473,647,979 1,448,741,753
Total comprehensive income for 2018
Profit for the year 883,180,833
Other comprehensive income

Transactions with the shareholders

Cash dividend (2017) -353,693,141
Stock dividend (2017) 353,693,150 -353,693,150
Balance as at 31 December 2018 3,890,624,560 1,473,647,979 1,624,536,295

2017

Details Share Capital Share Premium Retained Earning

Balance as at 1 January 2017 3,368,506,110 1,473,647,979 1,291,214,523
Total comprehensive income for 2017
Profit for the year 999,653,752
Other comprehensive income

Transactions with the shareholders

Cash dividend (2016) -673,701,222
Stock dividend (2016) 168,425,300 -168,425,300
Balance as at 31 December 2017 3536931410 1473647979 1448741753

2016

Details Share Capital Share Premium Retained Earning

Balance as at 1 January 2016 3,368,506,110 1,473,647,979 1,219,078,987
Total comprehensive income for 2016
Profit for the year 914,262,064
Other comprehensive income

Transactions with the shareholders

Cash dividend (2015) -842,126,528
Stock dividend (2015)
Balance as at 31 December 2016 3368506110 1473647979 1291214523
 2015

Details Share Capital Share Premium Retained Earning

Balance as at 1 January 2015 3,368,506,110 1,473,647,979 1,305,924,881
Total comprehensive income for 2015
Profit for the year 755,280,634
Other comprehensive income

Transactions with the shareholders

Cash dividend (2014) -842,126,528
Stock dividend (2014)
Balance as at 31 December 2015 3368506110 1473647979 1219078987

2014

Details Share Capital Share Premium Retained Earning

Balance as at 1 January 2014 3,062,278,290 1,473,647,979 2,029,441,871
Total comprehensive income for 2014
Profit for the year 42,052,574
Other comprehensive income

Transactions with the shareholders

Cash dividend (2013) -459,341,744
Stock dividend (2013) 306,227,820 -306,227,820
Balance as at 31 December 2014 3368506110 1473647979 1305924881

2013

Details Share Capital Share Premium Retained Earning

Balance as at 1 January 2013 2,783,889,350 1,473,647,979 1,857,027,139
Total comprehensive income for 2013
Profit for the year 868,387,075
Other comprehensive income

Transactions with the shareholders

Cash dividend (2012) -417,583,403
Stock dividend (2012) 278,388,940 -278,388,940
Balance as at 31 December 2013 3062278290 1473647979 2029441871
Total Equity
6,459,321,142

883,180,833

-353,693,141

6,988,808,834

Total Equity
6,133,368,612

999,653,752

-673,701,222

6459321142

Total Equity
6,061,233,076

914,262,064

-842,126,528

6133368612
Total Equity
6,148,078,970

755,280,634

-842126528

6061233076

Total Equity
6,565,368,140

42,052,574

-459,341,744

6148078970

Total Equity
6,114,564,468

868,387,075

-417,583,403

6565368140
 Trend Analysis

Year
Ratios 2014 2015 2016

Liquidity Ratio

Current Ratio 2.1852690806 1.5853532344 1.61950304639849

Quick Ratio 1.5937270365 1.0435061695 1.01885381812557

Activity Ratio

Inventory Turnover Ratio 1.7812855894 1.3815097693 1.36325477610025

Total Asset Turnover Ratio 0.5144772271 0.4752453129 0.510872024398006
Fixed Asset Turnover Ratio 1.5748757888 1.2044293474 1.3025581582343
Account Receivables Turnover Ratios 7.0252923474 8.1922980005 9.29516236410263

Profitability Ratio

Return on Equity 8.7996690928 12.460841293 14.9063609549121

Return on Capital Employed 12.225681379 16.379412686 19.1127261167136
Return on Assets 6.0507633198 7.1602060379 8.37428244870345
Gross Profit Margin 36.893961366 39.849031788 39.8466282037792
Net Profit Margin 11.760993493 15.06633699 16.3921335457181
Earning Per Share 1.75 2.24 2.71

Leverage Ratio

Debt-to-Assets Ratio 0.3123874028 0.4253834176 0.438207455593386

Debt-to-Equity Ratio 0.4543072713 0.7402908837 0.780016502455079
Asset-to-Equity Ratio 1.4543072713 1.7402908837 1.78001650245508
Debt-to-Capital Ratio 0.3123874028 0.4253834176 0.438207455593386
Debt-to-EBITDA Ratio 3.1277927581 4.1497506661 3.91780968063281

LEVERAGE Rati o
Debt-to-Assets Ratio Debt-to-Equity Ratio Asset-to-Equity Ratio
Debt-to-Capital Ratio Debt-to-EBITDA Ratio
4.5
4
3.5
3
2.5
2
 Debt-to-Assets Ratio Debt-to-Equity Ratio Asset-to-Equity Ratio
Debt-to-Capital Ratio Debt-to-EBITDA Ratio
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2014 2015 2016 2017 2018

Ratio Based On Market information

Price Earning Ratio = ( Market value per share / Earning Per share )
Market value per Share 60.4625 46.0992 61.6796
Earnings per Shares 1.75 2.24 2.71
P/E ratio 34.55 20.58 22.76

Market to Book value Ratio

Total shareholder equity 6695180089 6061233076 6133368612
No. of common share outstanding 336,850,611 336,850,611 336,850,611
Book value 19.875813997 17.993831325 18.2079782898182
Market value of share 60.4625 46.0992 61.6796
Market to Book value ratio 0.3287296092 0.3903284943 0.29520260004634

Dividend Payout ratio

Dividends per Share 2.61802625 1.72411008 1.99225108
Earning per Share 1.75 2.24 2.71
Dividend payout ratio 1.496015 0.769692 0.735148

Dividend Yield ratio

Dividends per Share 2.61802625 1.72411008 1.99225108
Market value of share 60.4625 46.0992 61.6796
Dividend Yield ratio 0.0433 0.0374 0.0323

Ratios 2014 2015 2016

Ratio Based On Market information
P/E ratio 34.55 20.58 22.76
Market to Book value ratio 0.3287296092 0.3903284943 0.29520260004634
Dividend payout ratio 1.496015 0.769692 0.735148
Dividend Yield ratio 0.0433 0.0374 0.0323
 Ratio based on market information
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2014 2015 2016 2017 2018

Market to Book value ratio Dividend payout ratio Dividend Yield ratio
 Liquidit
Year 2.5
2017 2018 AVG
2

1.5

1.573545041488 1.64365907380959 1.740917601

1
1.036116145027 1.01561752101755 1.173050792
0.5

0
1.757595722406 1.50495183779466 1.557719539 2014 2015 2016

0.593458836142 0.568011272035746 0.52351335 Current Ratio

1.58412261757 1.59843581465609 1.452884345
12.02742193779 7.98876488147856 8.905787906

Acti
15.4761426166 12.6370724107289 12.85601727 14
21.50870905007 17.1504789598899 17.27540164 12
8.651601219816 7.41120112970585 7.529610831
10
36.74312804591 34.7375645278843 37.61406279
8
14.57826675235 13.0476303808975 14.16907223
2.27 2.27 2.248 6

0
2014 2015

Inventory Turnover Ratio

0.440971730867 0.413534963729914 0.406096994 Fixed Asset Turnover Ratio
0.788818303501 0.705131488076413 0.69371289
1.788818303501 1.70513148807641 1.69371289
0.440971730867 0.413534963729914 0.406096994
3.777532042386 4.18244087551179 3.831065205

Profitablitiy Ratio
45
Equity Ratio
40 Return

35 Return
Emplo
30
Return
25
20 Gross

15 Net Pr
 45
Equity Ratio
40 Return

35 Return
Emplo
30
Return
25
20 Gross

15 Net Pr
10 Earnin
5
0
2014 2015 2016 2017 2018
2018

47.216 38.6808
2.27 2.27
20.8 17.04

6459321142 6988808834
353,693,141 389,062,456
18.26250043678 17.9632054602565
47.216 38.6808
0.386786268146 0.464395913741611

0.7885072 0.99022848
2.27 2.27
0.34736 0.436224

0.7885072 0.99022848
47.216 38.6808
0.0167 0.0256

2017 2018

20.8 17.04
0.386786268146 0.464395913741611
0.34736 0.436224
0.0167 0.0256
 P/E ratio
40

35

30

25

20

15

10

0
2014 2015 2016 2017 2018
ratio
 Liquidity Ratio

2015 2016 2017 2018

Current Ratio Quick Ratio

Activity Ratio

2014 2015 2016 2017 2018

Inventory Turnover Ratio Total Asset Turnover Ratio

Fixed Asset Turnover Ratio Account Receivables Turnover Ratios

tiy Ratio
Return on Equity

Return on Capital
Employed

Return on Assets

Gross Profit Margin

Net Profit Margin

 Return on Equity

Return on Capital
Employed

Return on Assets

Gross Profit Margin

Net Profit Margin

Earning Per Share

7 2018
 RAK Ceramics (Bangladesh) Ltd.
Calculation of Free Cash Flow

Particulars 2014 2015 2016

Profit Before Tax 972,465,004 1081287998 1221123312

Less:Tax 383311311 326007364 306861248
Profit after tax 589,153,693 755,280,634 914,262,064
Plus: Depreceation & Amortization 21,710,012 25,399,963 49,517,177
Less: Capital expedutre -100,662,696 303,330,733 1,710,372,244
Less: Change in working capital 372526161 -1198002270 180358279
Free cash flow 339,000,240 1,675,352,134 -926,951,282

Working note:

Particulars 2013 2014 2015 2016

Working capital 3183404606 3555930767 2357928497 2538286776

Depreciation 19,695,900 21,594,954 37,171,838

Amortization 2,014,112 3,805,009 12,345,339

Assumptions

Growth Rate of EBIT 0.1119042778428 0.12932291328

Average Growth Rate of EBIT 0.0548386592
Depreciation 0.0223247232 0.0234904697425 0.04055051321
Average Depreciation 0.148673443
Capex -0.103512924 0.2805272356311 1.40065481282
Average Capex 0.1977884504
WACC 15.04%
Tax 30%
NWCC 0.3830741049 -1.107940042076 0.14769866174
Average NWCC -0.037696627
Terminal Growth rate 2%
Risk Free Rate 5.00%
Market Free Rate
 2018 2019 2020

EBIT 1178266309 1242880853.5337 1311038773.05

EBIT(1-Tax) 824786416.3 870016597.47362 917727141.137
Add: Depreciation 129348363.0533 136441653.849
Less: Capital Expenditure 172079234.60312 181515829.1
Less: Change in Net Working Capital -32796691.28293 -34595217.858
FCFF 860082417.20672 907248183.744
Time Factor 1 2
Discount Factor 0.8692628650904 0.75561792863
PV of FCFF 747637706.19499 685532993.35
Terminal Value
PV of Terminal Value

PV of All CF 5218343301
Add: Cash and Cash Equivalents 764167746
Firm Value 5982511047
Less : Interest bearing debt 254227427
Value of Equity 5728283620

No. of shares outstanding 389062456

Share price 14.723300928
Market price 60.4
desh) Ltd.
ash Flow

2017 2018

1348825288 1178266309
349171536 295085476
999,653,752 883,180,833
413,091,343 413,266,807
-592,276,349 -176,294,044
95489908 374558219
1,909,531,536 1,098,183,465

2017 2018
2633776684 3008334903

407,503,491 407,803,841
5,587,852 5,462,966

0.10457746138 -0.126450015816

0.30626008177 0.350741427336

-0.4391053121 -0.149621560638

0.07079486784 0.317889271839
 2021 2022 2023

1382934381.49 1458772648.695 1538769785

968054067.043 1021140854.086 1077138849
143923931.202 151816526.6116 160141941
191469913.787 201969867.1306 213045624
-36492373.219 -38493566.03667 -40604502
957000457.677 1009481079.604 1064839668
3 4 5
0.65683060555 0.57095845406 0.496312982
628587190.128 576371756.6133 528493751
4133923511
2051719904
 WACC Calculation cost of debt calculation

Risk Free Rate 5.00% Finance expenses

Market Return 19.59% Total non-current liabilit
Beta 0.7 Cost of debt
Cost of Equity 15.21%
Cost of Debt 14.59%
After Tax cost of debt 10.21%
Weight ot Debt 3.51
Weight of Equity 96.49
Total Debt 254227427
Total Equity 6988808834
Total Value(Debt+ Equity) 7243036261
Corporate Tax rate 30%
Distress Premium
WACC 15.04
of debt calculation

37086830
254227427
14.59
 RAK Shinepukur Monno Standard Fuwang Average

Liquidity Ratio
Current Rat 1.740917601 1 1.106408994 0.900911208 1.1 1.104505492
Quick Rati 1.173050792 0.161583474 0.645268226 0.429535346 0.83 0.647887568

Activity Ratio
Inventory 1.557719539 1.786564382 2.26060859 -4.743414093 0.839696452 0.340234974
Total Asset 0.52351335 0.250609828 0.249155096 1.348630752 0.372242709 0.548830347
Fixed Asset 1.452884345 0.306063923 0.338851268 2.452842426 0.715403704 1.053209133

Profitability Ratio
Return on 12.85601727 0.001151904 0.001158176 0.451411162 0.061272767 2.674202257
Return on 17.27540164 0.05694402 0.001636643 0.068543931 0.076132809 3.495731808
Return on 7.529610831 -0.000297034 0.000840285 0.205506634 0.045976804 1.556327504
Gross Profi 37.61406279 0.241427839 0.191596322 0.194741677 0.295308883 7.707427501

Leverage Ratio
Debt-to-Ass0.406096994 0.355350622 0.275816967 1.0669566 0.262790047 0.473402246
Debt-to-Equ 0.69371289 0.551409814 0.381918346 1.234843852 0.363305457 0.645038072