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PROJECT REPORT

FINANCIAL ANALYSIS OF BALANCE SHEET –


AT
RELIANCE INDUSTRIES, HYDERABAD
MASTER OF BUSINESS ADMINISTRATION

Submitted by

(Student Name)

HT NO: 21WJ1E****

Under the Guidance of

Mr. K. SANDEEP REDDY

ASSISTANT PROFESSOR

School of Management studies


GURUNANAK INSTITUTIONS TECHNICAL CAMPUS

(Autonomous)
PAGE
CHAPTER CONTENTS
NO.
INTRODUCTION
 Objectives of the study

CHAPTER - I  Need for the study


 Scope of the study

 Research Methodology

CHAPTER - II REVIEW OF LITERATURE

CHAPTER -
COMPANY PROFILE
III
CHAPTER -
THEORETICAL FRAMEWORK
IV
DATA ANALYSIS &
CHAPTER - V
INTERPRETATION
 Findings
CHAPTER -
 Suggestion
VI
 Conclusion
Annexure / Questionnaire
INDEX
ABSTRACT
CHAPTER-I
INTRODUCTION
FINANCIAL STATEMENTS:
Accounting process involved recording, classifying and summarizing various business
transactions. The aim of maintaining various records is to determine profitability of the
enterprise from operation of the business and also to find out is financial position. Financial
statements are reports, presented periodically and reflect the financial results of operations of an
enterprise in a particular accounting period more frequently a year. The financial statement is an
organized collection of data according to logical and consistent accounting procedures. Its
purpose is to convey the financial results of a business firm.

DEFINITION
According to John N. Myer “The financial statements provide a summary of the accounts of a
business enterprise, the balance sheet reflecting the assets, liabilities, and capital as on a certain
date and the income statement showing the results of operations during a certain period”.
The term financial statement generally refers to following basic statements:

1. The Income Statement.


2. The Balance Sheet.
3. Statement of Retained earnings.
4. Statement of Changes in Financial position.
1. Income Statement:
The Income statement (also termed as profit and loss account) is generally considered
to be the most useful of all financial statements. It explains the income earned during the
balance sheet period. The nature of the ‘income’, which is the focus of the income statement,
can be well understood if a business is taken as an organization that uses ‘inputs’ to
‘produce’ output.

2. Balance Sheet:
It is a statement of financial position of a business at a specified moment of time. It
represents all assets owned by the business at a particular moment of time and the claims of
the owners and outsiders against those assets at that time. The important distinction between
an income statement and balance sheet is that an income statement is prepared for a period
while balance sheet is prepared on a particular date.

3. Statement of Retained Earnings:


The term retained earnings means the accumulated excess earnings over losses and
dividends. The balance shown by the income statement is transferred to the balance sheet
through this statement after making necessary appropriations. It is fundamentally a display
of things that have caused changes to the balance of retained earnings in the balance sheet at
the end of the period of balance sheet.

4. Statement of changes in Financial position:


The Balance sheet shows the financial condition of the business at a particular moment
of time while the income statement discloses the results of operations of business over a
period of time. For a better understanding of the affairs of the business, it is essential to
identify the movement of working capital or cash in the statement of changes in financial
position.

NATURE OF FINANCIAL STATEMENTS:


The financial statements are prepared on the basis of recorded facts. The recorded facts
are those which can be expressed in monetary terms. The statements are prepared for a
particular period, generally one year. The transactions are recorded in a chronological order as
and when the events happen. The financial statements by nature are summaries of the items
recorded in the business and these statements are prepared periodically generally for the
accounting period.

THE FOLLOWING POINTS EXPALIN THE NATURE OF FINANCIAL STATEMENT:

1. Recorded Facts:
The term “Recorded facts refer to the data taken out from the accounting records ”.
The records are maintained on the basis of actual cost data. The figures of various accounts
such as cash in hand, cash at bank, bill receivables, etc are taken as perfect figure recorded in
the accounting books. The recorded facts are not based on replacement cost. the financial
statements do not show current financial condition of concern.
2. Accounting Conversions:
Certain accounting converters are followed while preparing financial
statements. The conversion of valuing inventory at cost or market price, whichever is lower,
is followed. The valuing of assets is done at cost less depreciation principle for balance sheet
purposes, so that the statements are comparable, simple and realistic.
3. Postulates:
The accountants make certain assumption while making accounting records. One of
these assumptions is that the enterprise is treated as a going concern. The other assumption to
this postulate is that the concern is to be liquidated. So the assets are shown ongoing concern
basis. Another important assumption is to assume that the value of money will remain same
in different periods.
4. Personal Judgments:
Even though certain standard accounting conversions are followed in preparing
financial statement but still personal judgment of the accountant plays an important part.

CHARACTERISTICS OF FINANCIAL STATEMENTS:


The financial statements are prepared with a view to depict financial position of a
concern. The financial statements should be prepared in such a way that they are able to give a
clear and orderly picture of the concern. The ideal financial statement has the following
characteristics.

1. Depict true financial position:


The information contained in the financial statements should be such that a true and
correct idea is taken about the financial position of the concern.

2. Attractive:
The financial statements should be prepared in such a way that important information
is underlined so that it attracts the eye of the reader.

3. Comparability:
The results of financial analysis should be comparable. The financial statements should
be presented in such a way that they can be compared to the previous year’s statements.

4. Brief:
If possible, the financial statements must be prepared in brief. The reader will be able
to form an idea about the figures.

SIGNIFICANCE OF FINANCIAL STATEMENTS

Financial statements contain a lot of useful and valuable information regarding


profitability, financial position and future prospective of business concern. The utility of
financial statement to different parties may be summarized as follows:

1. Management:
The financial statements are useful for assessing the efficiency of different cost centers.
The management is able to decide the course of action to be adopted in future.
2. Creditors:
The trade creditors are to be paid in a short period. The CRS will be interested in
current solvency of the concerns. The calculations of current ratio and liquid ratio will
enable the creditors to assess the current financial position of the concerns in relation to their
debts.
3. Investors:
The investors include both short-term and long term investors. They are interested in
the security of the principal amounts of loan and regular payments by the concern. The
investors will not only analyze the parent financial position but will also study the future
prospectus and expansion plans of the concern.
4. Government:
The financial statements are used to assess tax liability of business enterprises. The
Government studies economic situation of the country from these statements. These
statements enable the government to find out whether business is following various rules and
regulations or not.
5. Trade Associations:
These associations provide service and protection to the members. They may analyze
the financial statements for the purpose of providing facilities to these members. They may
develop standard ratios and design uniform system of accounts.
6. Stock Exchange:
The stock exchange deals in purchase and sale of securities of different companies.
The financial statements enable the stock broker to judge the financial position of different
concerns. The fixation of prices for securities etc. is also based on the statements
OBJECTIVES OF THE STUDY

The objective of the study is to evaluate the financial performance of Reliance industries
limited . In order to achieve the above objective and to make the study purposeful, the following
additional objectives are fixed.

 To study the funds flow position of the company from financial reports and to analyze
performance of Reliance industries limited.
 To analyze and evaluate the efficiency of sources and application of funds in the steel
industry.
 For comparing the actual position with standards to ensure that the management takes
appropriate steps, if there is any deviation.
 To know the operating efficiency of the organization.
 To know the working capital position of the organization.
RESEARCH METHODOLOGY

Research methodology is a systematic procedure of collecting information in order to


analyze a variety of phenomenon. The data can be collected through two principle sources viz.

1. Primary data

2. Secondary data

1. Primary data:
It is the information collected directly without any reference. The data required for
accomplishment of this project has been collected mainly by conducting interviews, with
concerned officers and staff either individually (or) collectively and some of the information
had been verified (or) supplemented by personal observation method.

2. Secondary data:
The secondary data is the data, which is already available. The secondary data has been
obtained from annual reports, internal records, in-house magazines, journals, Books and
websites.
DATA SOURCES
LIMITATIONS OF THE STUDY

 The Major limitation is the short time span available for the study.
 Reliability on usage of secondary data is another limitation.
 The complexity and confidentially of various operations was also limitations to the study.
 Availability of time of employees is a major constraint.
 The study is carried basing on the information and documents provided by the organization
and based on the Interaction with various employees of respective departments.
 Data is available up to the financial year 2018-19 only and the data for the year 2022-23 is
not provided by the Company due to non-placement of the same in the Parliament of India.
CHAPTER-II
REVIEW OF LITRETURE
CHAPTER-III
INDUSTRY PROFILE
COMPANY PROFILE
INDUSTRY PROFILE
INTRODUCTION
The Government of India has decided to set up an integrated steel plant at
Visakhapatnam to meet the growing domestic demand for steel. Prime Minister
Mrs. Indira Gandhi laid down the foundation stone on 20th January 1971.
The Government of India and VSP signed an agreement on 12 th June 1979
for the co-operation in setting up 3.4 MT integrated steel plant. The project was
estimated to cost to Rs. 8,394.28 Crores based on prices as on 4 th Quarter of 1981.
However, on completion of the construction & commissioning of the whole plant
in 1992, the cost escalated to Rs. 8,500 Crores based on prices as on 2 nd Quarter of
1994. The plant was dedicated to the nation on 1 st August 1992 by the then Prime
Minister, Mr. P. V. Narasimha Rao.
The man power in the VSP has been limited to 17,500 employees. The plant
has the capacity of producing 3.0 MT of liquid steel & 2.656 MT of saleable steel.
It has set up two major Blast Furnaces, the Godavari, & the Krishna, which are the
envy of any modern steel making complex.

PROFILE
Steel comprises one of the most important inputs in all sectors of economy.
Steel is the basic input for automobiles; construction; machine building; fabrication
and transportation industries. Keeping this in view the Government of India
constituted Visakhapatnam Steel Plant in 1982 with the collaboration of Russia. Its
process is to produce a range of steel products. It is a subsidiary of Rastriya Ispat
Nigam Limited.
Unlike other integrated Steel Plants in India, Visakhapatnam Steel Plant
(VSP) is one of the most modern steel plants in the country. New Technology,
Large-Scale Computerization and Automation etc, are incorporated in Plant.
To operate the Plant at International levels and attain such labor
productivity, the organizational manpower has been rationalized. Because of high
level of technology existing throughout the plant, the company has a very good
manufacturing capability to meet the needs of various customers.
VSP has come a long way before becoming debt-free company in October
2003 (for the first time since its inception in 1992). VSP is now poised at 4th
position among Indian steel majors (Ranked no. 69 among global steel makers)
after passing through a turbulent phase& crisis that had threatened its very
existence. VSP has wiped out its accumulated losses completely by 2005-06.

GROWTH OF STEEL INDUSTRY

S.NO. YEAR GROWTH

1. 1830 Osier Marshall heather constructed the first


manufacturing plant at port-motor in Madras
presidency.
2. 1874 James Erskine founded the Bengal frame works.
3. 1899 Jamshediji TATA initiated the scheme for an integrated
steel plant
4. 1906 Formation of TISCO
5. 1911 TISCO started production
6. 1918 TISCO was founded
7. 1940-1950 Formation of Mysore iron and steel initiated at
Bhadravathi in Karnataka
8. 1951-1956 First five-year plant – The Hindustan Steel Limited
(HSL) was born in the year 1954 with decision of
setting up three plants each with 1 million tones ingot
steel per year at Rourkela, Bhili, Durgapur. TISCO
started its expansion programme.
9. 1956-1961 Second five – year plan – A bold decision was taken up
to increase the ingot steel output in India to 6 million
tones per year and its production at Rourkela, Bhilai and
Durgapur Steel plant started.
10. 1961-1966 Third five-year plant – During the plant the three steel
plants under HSL, TISCO & TISCO were expanded*
11. 1964 Bokaro Steel Plant came into existence
12. 1966-69 Recession period - Till the expansion programmes were
actively existed during this period
13. 1969-74 Fourth five-year plant - Salem Steel Plant started.
Licenses were given for setting up of many mini steel
plants and rerolling mills government of India. Plants in
south are each in Visakhapatnam and Karnataka. SAIL
was formed during this period on 24th January 1973.
14. 1974-79 Fifty five-years plan – The idea of setting up the fifth
integrated steel plant, the first re – base plant at
Visakhapatnam took a definite shape. At the end of the
fifth five-year plan the total installed capacity from six
integrated plants was up to 10.6 million tons.
15. 1979-1980 Annual plan. The Erstwhile soviet union agreed to help
in setting up the Visakhapatnam Steel Plant.
16. 1980-1985 Sixth five-year plant – Work on Visakhapatnam Steel
plant started with a big bang and top priority was
accorded to start the plant. Schemes for modernization
of Bhilai Steel Plant, Rourkela steel plant, Durgapur
steel and TISCO were initiated. Capacity at the end of
sixth five-year plant form six integrated plants stood
11.50 million tones.
17. 1985-91 Seventh five-year plant – Expansion works at Bhilai and
Bokaro steel plant completed. Progress of
Visakhapatnam steel Plant picked up and the
nationalized concept has been introduced to commission
the plant with 30 MT liquid steel capacities by 1990.
18. 1992-1997 Eighth five-year plan – The Visakhapatnam Steel Plant
was commissioned in 1992. The cost of plant has
become around 8755 cores. Visakhapatnam Steel Plant
started the production and modernization of other steel
plants is also duly engaged.
19. 1997-2002 Ninth five-year plant – Restructuring of Visakhapatnam
Steel Plant and other public sector undertakings.

PRE- INDEPENDENCE PERIOD:

By 1950 the total installed capacity for ingot steel production was 1.5
million tons per year. In 1830 James Heath constructed the first manufacturing
plant at port Nova in Madras Presidency. But it was a financial failure.
In 1874 James Erskine founded the Bengal Iron works. It was passed on to
M/s. Hoare Hiller and Co. in 1882 and to M/s. Martinand Co. in 1885. In 1899
Jamshedji Tata initiated the scheme for an integrated steel plant. In 1906 Sakhi in
Bihar was chosen as the site for the “Tata Iron and Steel Company”. The same
place is known as Jamshedpur. In 1918 initially “Indian Iron and Steel Company”
was founded and the “Bengal Iron and Steel Company” was merged with it in
1920. TISCO produced steel in 1939. Between 1940-50 formation of major Iron
and Steel at Bhadravti in Karnataka owing to the pioneering effort of
Shri.Visveswarayya in 1936 it started manufacturing steel and after 1945 adopted
electric reduction of Iron ore. It has also started manufacturing Ferro alloys and
special steel.

POST- INDEPENDENCE PERIOD:

After the Independence the Government has taken steps to improve the Steel
Industry from the following Five-Year Plans.
 First Five year plan (1951-1956)
No new steel plant came up. The Hindustan Steel Limited was born in the
year 1954 with the decision of setting up 3 plants each with one million
tonnes of steel per year at Rourkela, Bhopal and Durgapur, TISCO started its
expansion program.
 Second Five year plan (1956-1961)
A bold decision was taken up to increase the ingot steel output in India to 6
million tonnes per year and the production at Rourkela, Bhilai and Durgapur
steel plant started. Rourkela steel plant was established with the
collaboration of West Germany, Bhilai steel plant with USSR and Durgapur
steel plant with Britain.
 Third Five year plan (1961-1966)
During the plan, the 3 steel plants under Hindustan Steel Limited (Rourkela,
Bhilai and Durgapur) Plants were expanded. In January 1964, Bokaro Steel
Plant came into existence.
 Fourth Five year plan (1969-1974)
Salem Steel Plant started. Government of India gave permission for setting
up Steel Plant in south at Visakhapatnam. Steel Authority of India Limited
was formed during this period on 24th January 1973.
 Fifth Five Year Plan (1974-1979)
The idea of setting up the 5th integrated Steel Plant, the Ore-based plant at
VSP Visakhapatnam took a definite shape. At the end of the fifth five-year
plan, the total installed capacity from 6 integrated plants was 10.6 million
tonnes.
 Annual plan (1979-1980)
The erstwhile Soviet Union agreed to help in setting up of the
Visakhapatnam Steel Plant.
 Sixth Five year plan (1980-1985)
The construction activities were started at Visakhapatnam Steel Plant with a
big bang and top priority was accorded to start the plant. Schemes for
modernization of Bhilai Steel Plant, Rourkela Steel Plant, Durgapur Steel
Plant and Tata Iron and Steel Company were initiated. Capacity at the end
of sixth five year plan from 6 integrated plants stood 11.5 million tonnes.
 Seventh five year plan (1986-1991)
Expansion work at Bhilai and Bokaro Steel Plant was completed. Progress
of Visakhapatnam Steel Plant picked up and the rationalized concept has
been introduced to commission the plant with 3 million ton capacity by
1990.
 Eighth Five year plan (1992-1997)
The Visakhapatnam Steel Plant was commissioned in 1992. The plant
started its production and its cost became around Rs.8, 755 cores.
Modernization of other steel plants was also duly envisaged.
 Ninth Five year plan (1997-2002)
Visakhapatnam steel plant had foreseen a 7% growth during the entire plan
period.
 Tenth Five Year Plan (2002-2007)
Steel industry registers the growth of 9.9 % Visakhapatnam steel plant high
regime targets achieved the best of them.
 Eleventh Five Year Plan (2007-2012)
Steel industry is trying to achieve its vision and mission by 2010 or entire
plan during this period.

INDUSTRY CLASSIFICATION:

The Industry classification based on product categories and the major


producers can be divided into the following:

1. Iron ore – National Mineral Development Corporation (NMDC),


Kudremukh Iron Ore Co (KIOCL) and Sesa Goa (Sesa) are the major
merchant producers of iron ore. SAIL and Tata Steel have their captive.
2. Pig iron – KIOCL, Sesa Goa and UshaIspat. Apart from them there are
many mini blast furnace (MBF) pig iron producers and even integrated steel
plants of SAIL and RINL produce a significant amount of pig iron.
3. Sponge Iron – Essar Steel, Ispat Industries, VikramIspat (a division of
Grasim) are the major producers of gas based sponge iron.

The major steel and related companies in India are:


1. Steel Authority of India Limited, (SAIL), New Delhi
2. Rashtriya Ispat Nigam Limited, (RINL), Visakhapatnam
3. NMDC Limited, Hyderabad
4. MOIL Limited, Nagpur
5. KIOCL Limited, Bangalore
6. Hindustan Steelworks Construction Limited (HSCL), Kolkata
7. MECON Limited, Ranchi
8. Ferro Scrap Nigam Limited (FSNL), Bhilai, (A subsidiary of MSTC Ltd.)

GLOBAL STEEL SCENARIO

In 2012, the capacity utilization of steel companies globally was lower than
the previous year mainly due to slowdown in consumption clubbed with continued
growth in new steelmaking facilities, particularly in developing economies.
Capacity utilization remained below 80% and overall likely to be under strain even
during 2014 due to further addition in capacity and remains an area of concern for
the steel sector. The growth in2014 up to august has been 2 % against 1.2% in
2013.Indian economy and Indian steel industry are not insulated from the global
developments and they are going through one of the most challenging phases.

INDIA’S STEEL SCENARIO

Indian Steel industry has always remained isolated and protected by


Government, where the steel industry was never expected to generate profit from
business, but was expected to provide employment to the unemployed. Presently
India is operating with open-hearth furnace. Energy Consumption per ton of steel
produced is also on higher side; production of steel per ton of man year is also on
lower side.
Indian Steel industry generates a considerable amount of waste materials,
which creates environmental problems. The four aspects of “Waste Management”
viz., – residue reprocess, recycle and recovery do not hold much ground in the
Indian Steel Industry. The Indian companies could not spend more for pollution
control.
The Indian steel industry has developed a bit in the recent years. The production is
going on properly. Many new technologies are being implemented in the steel
industries. The country’s aim is to sell quality steel at competitive prices. Indian
Steel Industry undertook revamp of its technology of steel production process.
This step is driving the industry towards qualitative and competitive production of
steel and thereby could withstand in the international market.
As per jpc, production of crude steel during 2020-2021 was at 78.31 Mt, a
growth of 5.4% compared to 2019-2020. The Main producers produced 24.61 Mt.
during this period, which was a growth of 4.3% compared to last year. The Major
producers produced 18.47 Mt. during this period, which was a growth of 8.6%
compared to last year. The rest i.e. 35.23 Mt. was the contribution of the other
producers, which was a growth of 4.65 compared to last year.
The consumption of finished steel during 2020-2021 increased by 3.3%
compared to the previous year.

PRESENT SCENARIO OF INDIAN STEEL INDUSTRY:

India is uniquely placed to become a very large producer and consumer of


finished steel products in the world. Substantial reserves of high grade iron ore,
low wage rates; technical and managerial skills of a high order have all enabled
India to gain this stature, by becoming 10th largest producer of steel in the world.
Unfortunately for the Indian steel industry, the price and distribution controls to
which it was subjected till about economic liberalization process began in the early
1990’s did not permit the large integrated steel plants to modernize their steel
manufacturing facilities, Or to upgrade their technologies to the state of art levels
from time to time.
With the economic liberalization that was initiated in 1992, Indian Steel
Industry has to accept the inevitable i.e. to appreciate the implications of low
import duty rated, face foreign competition and somehow improve its strengths and
competitive edge to produce good quality products at lower prices and learn to
survive in the market place. Following liberalization, the steel Industry is well set
on the path of globalization. The dynamics of the Mini Steel Plants World Steel
Industry has a close relation with Indian steel Industry. Presently in India, Steel
products are being produced from four different sources viz.,
1. Integrated Steel Plants
2. Re-rolling Mills
3. Alloy & Special Steel Plants
Integrated Steel Plants have larger capacity and produce Steel from basic raw
materials and the other three categories mentioned are characterized by low
investment and low break-even point.

PRODUCTION

Latest figures by World Steel Association (WSA) has revealed that


India's steel production increased by 3 per cent to 59.62 million tonne (MT) in the
first nine months of 2013, as against 57.90 MT in the corresponding period last
year. Moreover, the data showed that India's rate of production growth was the
second-best following China among the major global producers.

 The country’s steel output grew to 6.54 MT in September 2013 from 6.24
MT during the same month in 2012.
 Steel industry was delicensed and decontrolled in 1991 & 1992 respectively.
 Today, India is the 4th largest crude steel producer of steel in the world.
 Production for sale of Pig Iron in 2019-2020, was 5.78mt.

INDIAN STEEL PRODUCTION

India is currently the fourth largest crude steel producer in the world,
according to the Ministry of Steel, Government of India, and it is likely to become
the second largest steel producer by 2016, according to the Ernst and Young
Global Steel: 2010 trends, 2011 outlook report ("E&Y"). Unlike China, where
there is significant excess steelmaking capacity, (Chinese crude steel capacity is
expected to be 840.0 Mt in 2012, which would be 22% in excess of the expected
688.0 Mt of consumption), India remains a net importer of steel, which should
allow for more growth in steelmaking capacity for domestic Indian steel
companies. Indian crude steel production increased by a CAGR of 10.5% from
27.3 Mt in 2001 to 66.8 Mt in 2010, according to the WSA. In 2011, production
increased by 5.7%. Production is expected to further increase by 15.3% in 2012
and by 13.4% in 2013, according to E&Y.

INDIAN STEEL CONSUMPTION

India is about to enter the first year of the Twelfth "Five Year Plan" which
aims at "faster, sustainable and more inclusive growth." Also aforesaid objectives
of the Union Budget 2020-2021 are likely to stimulate consumption of steel in
2020-2021.
Demand in India has been driven by the expanding oil and gas and power
sectors and spending on infrastructural facilities, coupled with growth in the
housing, consumer durables and automobile sectors. Apparent steel consumption in
India is projected to grow by 6.9% in 2012 and 9.4% in 2013 after recording a
growth of 4.3% in 2011, according to the WSA.
Among end-user sectors, the infrastructure and industrial construction
sectors accounted for around one-third of total steel consumption in India in 2018-
2019, followed by the pipes and tubes industry, which accounted for 10% of total
steel consumption and the automobile sector, which accounted for 12% of total
steel consumption in the same period, according to CRISIL Research.
Furthermore, according to Ernst & Young 2010, an additional US$1 trillion
of investment is expected to be made in the construction and infrastructure sectors
during the 2012-17 period. Most infrastructure projects consume large amounts of
long steel products, and hence there should be a corresponding increase in long
steel demand.
Indian steel producers have a number of competitive advantages, the most
important of which is an abundant supply of iron ore resources and surplus iron ore
production, predominantly in the east of India. India is the world's fourth-largest
iron ore producer, with sufficient iron ore reserves to meet expected demand. Of
particular interest is Orissa State, which contains 25% of India's iron ore reserves
and 20% of India's coal reserves, according to Corporate Catalyst India.
Fig.Demand outlook for steel products in India

Thus, even though iron ore prices have been steadily increasing
towards the end of 2011, domestic Indian steel companies, with their access
to excess iron ore, have not faced similar increases in raw material prices as
those companies outside of India. Another advantage India has is its
unexplored rural market, which has been fairly unexposed to the varied uses
of steel. Steps are being taken by companies to penetrate this market,
including our Company's setting up of its district level dealership and rural
dealership schemes.
COMPANY PROFILE

INTRODUCTION:

Rashtriya Ispat Nigam Limited is the corporate entity of Visakhapatnam


Steel Plant. The steel plant is located 26 km south of Visakhapatnam city. The
company also has a blast furnace grade limestone captive mine at Jaggayapeta, a
captive mine for dolomite at Madharam, a manganese ore captive mine at
Cheepurupalli. All the captive mines are located in the state of Andhra Pradesh. It
has also got a mining lease for river sand in river Champavathi. The main facilities
of the plant are detailed at Fig 1. The plant has a capacity to produce 2.656 Mt of
saleable steel of which 2.410 Mt is finished steel.
Besides receiving raw materials from the captive sources, the steel plant meets its
iron ore requirements from Bailadilla mines of National Mineral Development
Corporation (NMDC), coking coal requirements through imports and coal
washeries of Coal India Limited, SMS grade limestone through imports, quartzite
requirements t h r o u g h purchase and boiler coal from the coal mines of
Mahanandi Coal Limited.
The product profile of the plant comprises of wire rods, rounds,
reinforcement bars (rebars), angles, channels, beams, squares, pillets and blooms.
The product profile also includes basic grade pig iron, granulated slag, coal
chemicals and other by-products. The plant also exports power to AP Transco from
its captive power plant.
The steel plant has many technological features, which are unique amongst
the steel plants in the country. The company is a pioneer in introducing many new
technologies in the country.
The production of TMT rebars by tempcore process is a shining example in
this respect. Because of high level of technology existing throughout the plant, the
company has a very good manufacturing capability to meet the needs of various
customers.
Human resource initiatives at RINL are closely linked to the corporate
strategy of the organization. It has exemplary industrial relations where the entire
work force (both executives and non-executives) works as a well-knit team for the
progress of the company. Participative management, by involving cross-section of
the employees, in development of the policy and strategy is actively implemented
in the company.

LOCATION:
The Plant is located on the coast of Bay of Bengal, 16 kms to the
Southwest of the Visakhapatnam Port.
MAJOR SOURCES OF RAW MATERIALS:

Source: VSP Profile

RAW MATERIALS
SUPPLIER OF RAW
SL.NO.
MATERIALS

1 Iron Ore Lumps & Fines Bailadilla, Madhya Pradesh

2 BF Lime Stone Jaggayyapeta, Andhra Pradesh

3 SMS Lime Stone Jaisalmer, Rajasthan

4 BF Dolomite United Arab Emirates

5 SMS Dolomite Madharam, Andhra Pradesh

6 Manganese Ore Chipurupalli, Andhra Pradesh

7 Boiler Coal Talcher, Orissa

8 Coking Coal Australia

MAIN PRODUCTS OF VSP:

STEEL PRODUCTS BY-PRODUCTS

Blooms Nut Coke Granulated Slag

Billets Coke Dust Lime Fines

Channels Coal Tar

Angles Ammonium Sulphate


Beams Anthracene Oil

Squares HP Naphthalene

Flats Benzene

Rounds Toluene

Re-bars Zylene

Wire Rods Wash Oil

VISION
To be a continuously growing world-class company, we shall
 Harness our growth potential and sustain profitable growth
 Deliver high quality and cost competitive products and be the first choice
of customers
 Create an inspiring work environment to unleash the creative energy of
people
 Achieve excellence in enterprise management
 Be a respected corporate citizen, ensure clean and green environment and
develop vibrant communities around us.

MISSION

To attain 20 million ton liquid steel capacity through technological up-


gradation, operational efficiency and expansion; augmentation of assured supply
of raw materials to produce steel at international standards of cost and quality; and
to meet the aspirations of the stakeholders.

OBJECTIVES

 Expand Plant capacity to 6.3 Mt. by 2014 with the mission to expand
further in subsequent phases as per the corporate plan.
 Revamp existing Blast Furnaces to make them energy efficient to
contemporary levels and in the process increase their capacity by 1.0 Mt,
thus total hot metal capacity to 7.5 Mt.
 Be amongst top five lowest cost steel producers in the world.
 Achieve higher levels of customer satisfaction.
 Vibrant work culture in the organization.
 Be proactive in conserving environment, maintaining high levels of safety

and addressing social concerns.

PERFORMANCE OF RINL AT A GLANCE

PRODUCTION PERFORMANCE:

In Visakhapatnam Steel Plant creating new records year after year in


production is part of its work culture. The Production Performance of
Visakhapatnam Steel Plant in the last five years is as follows:

PRODUCTION PERFORMANCE (000 TONNES)

Labor Productivity
Year Hot Metal Liquid Steel Saleable Steel
(Tonnes/man year)

2006-2007 4153 3603 3237 414

2007-2008 4046 3606 3290 413

2008-2009 3913 3322 3074 389

2009-2010 3546 3145 2701 359

2010-2011 3900 3399 3167 382


2011-2012 3830 3424 3077 358

2012-2013 3778 3410 2990 389

2013-2014 3998 3456 3010 359

2014-2015 3896 3420 3001 340

INTERPRETATION:

 The Hot metal during the year 2006-2007 is very high and in the year 2021-
2022it is low.
 The Liquid steel during the year 2006-2007 is very high and in the year
2021-2022it is low.
 The Saleable steel during the year 2007-2008 is high and in the year 2021-
2022it is low.
 The Labor productivity is almost decreasing in all years.

COMMERCIAL PERFORMANCE:

The Commercial Performance of Visakhapatnam Steel Plant for the past


five years is as follows:
 COMMERCIAL PERFORMANCE (Rs. in Crs.)

Year Sales Turnover Domestic Sales Exports

2006-2007 8469 8026 443


2007-2008 9131 8487 425

2008-2009 10433 9878 555

2009-2010 10411 10333 78

2010-2011 10635 10284 351

2011-2012 11517 11095 422

2012-2013 14462 14047 416

2013-2014 15451 15041 410

2014-2015 16042 16042 423

INTERPRETATION:

 Total Sales are in increasing trend.


 Domestic Sales shown down ward trend in 2006-07 and export sales
increased.
 Export sales compensated the shortfall of domestic sales.

FINANCIAL PERFORMANCE:

Visakhapatnam Steel Plant had to bear the burns of huge project cost right
from its day of inception. This has affected the company’s balance sheet due to
very high interest burden. The company, inspite of making operating profits every
year had to report net loss during all financial years. This on the other hand has
resulted in making Visakhapatnam Steel Plant to take great care in planning the
financial resources.

The Financial Performance of Visakhapatnam Steel Plant for the past five years is
as follows:

 FINANCIAL PERFORMANCE (Rs. inCrs.)

Year Gross Margin Cash Profit Net Profit


2006-2007 2383 2355 1251

2007-2008 2,633 2584 1,363

2008-2009 3,515 3,483 1,943

2009-2010 2355 2267 1336

2010-2011 1603 1525 797

2011-2012 1412 1247 658

2012-2013 1167 1110 751

2013-2014 1265 1250 353

2014-2015 1325 1350 452

INTERPRETATION:

 Gross Margin, Cash profit and Net profit are interrelated.


 Even though the Gross Sales are in increasing trend, the profit factors are
showing downward trend due to increase in the global market trends and
cost factors.
 Idle funds which were yielding very good interest incomes have been
withdrawn for the purpose of investing in the expansion jobs hence, the
interest income has been reduced. This is also one of the factors for low
profits. But in the long run, the expansion activities are only desirable
and will yield good returns.

ACHIEVEMENTS AND AWARDS

Award Purpose Year


Significant Achievement in CII EXIM Overall Excellence in all activities of the 2013
Bank Award for Business Excellence company
2013
Vishwakarma Awards - Innovative suggestions for higher efficiency, 2013
VishwakarmaRashtriyaPuraskar) for 12 productivity & process improvements
employees
First prize of prestigious Indira Gandhi For effective implementation of Official 2013
Rajbhasha Shield Language
Award for Second best House Magazine For excellence in House Magazine in Hindi 2013
in Hindi 'Sugandh' 'Sugandh'
Cost Management Excellence Award by For excellence in Cost Management 2013
Institute of Cost Accountants of India ,
New Delhi
National Vigilance Excellence Award by For eminent professionals in the field of 2013
Vigilance Study Circle Vigilance
ICC Corporate Governance and For performance on Sustainability and 2013
Sustainability Vision Award 2013 Corporate Governance
CII-ITC Sustainability Award – 2012 - For performance on Sustainability 2013
‘Strong commitment’
Awards at ICQCC’12, Malaysia -3 star For implementation of QC projects 2012
(Top Most Category) for 3 QC Teams
Vishwakarma Awards - Innovative suggestions for higher efficiency, 2012
VishwakarmaRashtriyaPuraskar (VRP) productivity & process improvements
for 17 employees
Awards at INSSAN -2012 - 1st place in For implementation of Suggestions 2012
the ‘Excellence in Suggestion Scheme’ &
3 Merit prizes
QCFI Award-2012 - Best Public Sector For promoting Quality Concepts 2012
Organization
National Vigilance Excellence Award by For eminent professionals in the field of 2012
Vigilance Study Circle (VSC) Vigilance
CIO-100 Award For excellence in IT & Special Award under 2012
the category ‘Networking Pioneer’
“Indira Gandhi Rajbhasha Shield” - First For effective implementation of Official 2012
prize Language Hindi
Water Efficient Unit Award from CII For excellence in Water Management 2012
IPE CSR Corporate Governance Award- For best practices in CSR 2012
2012’
Green Rating Award by Centre for For Environmental Performance 2012
Science and Environment under Green
Rating Project – 3 Leaves Rating (Best in
Indian Steel Industry)
Gold Award - Greentech National HR Outstanding achievement in Training arena 2012
Award by Greentech Foundation
Green Manufacturing Excellence Award Recognition for best Green Manufacturing 2012
by Frost & Sullivan’s – Overall Leaders practices
Great Places to Work Award By Great For inspiring Trust among its Employees, for 2011
Places to work Institute and Economic instilling Pride in them and creating an
Times 2011 environment in the work place that promotes
camaraderie
First Prize - IIM Sustainability Award- Overall performance 2011
2011 by Indian Institute of Metals
“Excellent” and “Distinguished” awards Recognition for Quality Circle teams by 2011
at the International Convention on Union of Japanese Scientists and Engineers
Quality Control Circles (ICQCC’11) held (JUSE).
at Yokohama, Japan.
‘Excellent Energy Efficient Unit’ Award Recognition for Excellence in Energy 2011
of Confederation of Indian Industry by Management
CII
First in MOU Rating for 2017- Excellent MOU rating among all PSUs under 2011
2018among the PSEs under MOS Ministry of Steel (MOS) for the year 2017-
2018
IspatRajbhasha Shield (First time) by For remarkable work in progressive use and 2011
Department of Official Language, implementation of Official Language for the
Ministry of Home Affairs, GOI year 2016-2017
International Convention on Quality Seven ‘Quality Circle’ (QC) teams and Four 2010
Concept Circles (ICQCC) by ICQCC ‘5S’ teams bagged ‘Gold Medals.
Awards at CCQC-2010 by CCQC Teams from VSP bagged 20 Gold, 7 Silver 2010
and 2 Bronze Medals at the 10th Chapter
Convention of Quality Circle (CCQC) Forum
of India
IspatSurakshaPuraskar Award -2009 by 2 IspatSurakshaPuraskars 2009 for achieving 2010
JCSSI no fatal accident consecutively during 2007
& 2008 by Rolling Mills Zone and SMS&
CCD Zone
NIPM certificate of Merit by NIPM Best HR Practices 2010
UdyogRatan Award by Delhi Telugu For significant contribution in preservation 2010
Academy and promotion of Indian Culture and for
taking key initiatives towards CSR.
1st Steel Minister's Trophy for the year VSP’s excellent Overall performance 2010
2006-07
'Best Management Practices' Award by In recognition of VSP’s performance in the 2010
Govt. of AP areas of Production, Productivity, Labor
Practices, Industrial Relations and Corporate
Social Responsibility
5S "Strong Commitment" Award by CII for 5 S Excellence 2010
ViswakarmaRashtriyaPuraskar Awards, National level awards instituted by Ministry 2010
6th time in a row of Labor, Govt. of India for the workmen in
industries. Recognition for the innovative
suggestions resulting in higher efficiency,
productivity, quality, safety & working
conditions, house-keeping and import
substitution at enterprise level.
"Excellent Water Efficient Unit" award for Excellence in Water Management- 2010 2010
by CII at National level
Global HR Excellence award by World "Change Agent & Leadership Award" in 2010
HRD Congress Global HR Excellence Awards 2018-2019
given by World HRD Congress at Mumbai
Gold Award for Outstanding VSP has established World Class Training 2010
Achievement in Training Excellence by infrastructure since inception and
Greentech Foundation, New Delhi continuously improved training facilities
Global Human Resource Development In recognition of outstanding performance in 2010
Award of International Federation of setting up of high standards in HRD and
Training and Development Organization, focus on initiatives that would motivate and
London Empower employees to do their best
Town Official Language Implementation For its exemplary Performance in 2010
Committee Award, Visakhapatnam Implementation of Official language
INSSAN AWARD VSP won this Quiz successively for 3 years 2009
in a row (2007, 2008 & 2009) achieving
HAT-TRICK which is a National Record.
Bagged third prize in ‘Public Relations In the ‘Event Management’ category at the 2009
National Awards-2009’ 31st All India Public Relations conference
held in Chandigarh
Bagged the First Steel Minister’s Trophy For being the best integrated steel plant in the 2009
for the year 2006-07 country (Runner Up)
Won the TATA-Crucible Corporate Quiz. For the best performance in the inter 2009
corporate business quiz, TATA-Crucible
Corporate Quiz
Vishwakarma RashtriyaPuraskar Awards For the best suggestions 2009
for the performance year 2007 5TH Time
in a row.
RINL ranked No.2 globally for the Global survey by Steel guru for the most 2009
popularity of website among the global popular website among steel makers all over
steel makers. the world
The ‘Best Place to work for- 2009’ Award given by “The Economic Times-Great 2009
Place to Work Institute” was won by VSP in
June
ISPAT RAJYA BHASHA TROPHY For popularising the usage of Hindi. 2009

FINANCIAL STATEMENT ANALYSIS


INTRODUCTION

Financial statements are prepared primarily for decision making. They play a
dominate role in setting the frame work of managerial decisions.
Financial analysis is the process of identifying the financial strength and
weakness of the firm by properly establishing between the items of the balance
sheet and profit and loss account. There are various methods or techniques used in
analysis financial statements such as comparative statements, trend analysis,
common size statements, schedule of changes in working capital, funds flow and
cash flow analysis – Cost Volume Profit Analysis and Ratio Analysis.

MEANING & CONCEPT OF FINANCIAL STATEMENT ANALYSIS

Financial statement analysis is largely a study of relationship among the


various financial factors in a business as disclosed by a single set of statements and
a study of the trend of these facets as shown in a series of statement. The purpose
of financial analysis is to diagnose the information contained in financial
statements so as to judge the profitability and financial soundness of the firm.

 The term financial statement analysis includes both analysis and interpretation.

 The term analysis is used to mean the simplification of financial data by


methodical classification of the data give in the financial statement.

TYPES OF FINANCIAL ANALYSIS:


Financial analysis can be classified in to different categories depending up on:
A. On the basis of material used.
B. On the basis of modules used.

A] ON THE BASIS OF MATERIALS USED:


According to the basis, financial analysis can be of two types.

1. EXTERNAL ANALYSIS:
This analysis is done by those who are outsiders for the business. These
persons mainly depend up on the published financial statements. Their analysis
serves only a limited purpose.
2. INTERNAL ANALYSIS:
This analysis is done by persons who have access to the books of
account and at other information related to the business. Such analysis can be
done by executives and employees of the organization. The analysis is done
depending up on the objective to be achieved through this analysis.
B] ON THE BASIS OF MODULES USED:
According to this financial analysis can also be of two types:

1. Horizontal analysis

2. Vertical analysis

1. HORIZONTAL ANALYSIS:
In case of this type of analysis, financial statements for a number of years
are reviewed and analyzed. The current year’s figures are compared with the
standard or base year. The analysis statement usually contains figures for two
or more year and the change are shown regarding each item from the base year
usually in the form of percentage. Since this type of analysis is based on the
data from year to year rather than on date, it is also termed as “Dynamic
Analysis”.

2. VERTICAL ANALYSIS:
In case of this type of analysis a study is made of the quantitative
relationship of various items in the financial statement on a particular date.
Since this analysis depends on the data for one period, this is not very
conducive to a proper analysis of the company’s financial position. It is also
called ‘static analysis as it is frequently used for referring to ratio developed on
one date or for one accounting period.
PROCEDURE OF FINANCIAL STATEMENT ANALYSIS:-

There are three steps involved in the analysis of financial statements.

1. Selection

2. Classification

3. Interpretation

1. SELECTION:-Involves selection of information relevant to the purpose of


analysis of financial statements.
2. CLASSIFICATION:-The 2nd step involved is the methodical classification
of the data and the third step includes drawing of interpretation and
conclusion.
3. INTERPRETATION:-The final step involves the interpretation of the data
and it gives the final conclusion for the respective statements in a given
period when compared to past or previous year’s data.

METHODS OR DEVICES OR TECHNIQUES OF FINANCIAL ANALYSIS

The analysis and interpretation of financial statements is used to determine


the financial position and results of operations well.

1. Comparative Financial statements

2. Common size financial statements

3. Trend analysis / Trend Percentages

4. Cost-Volume-Profit analysis
5. Ratio analysis.

6. Cash Flow analysis

1. COMPARATIVE FINANCIAL STATEMENTS:


The statements which have been designed in a way so as to provide time
perspective to the consideration of various elements of financial position
embodied in such statements with figures for two or more period side by side to
facilitate comparison. Both the income statement and balance sheet can be
prepared in the form of comparative financial statements.
The comparative financial statements contain the following items.
1. Absolute figures as given in the final accounts.
2. Absolute figures expressed in terms of percentages.
3. Increase or decrease in absolute figures in terms of money value.
4. Increase or decrease in terms of percentages.
5. Comparison expressed in ratios.
6. Percentages of totals.
Comparative Financial Statements includes the following two statements i.e.
a) Comparative Balance sheet, and
b) Comparative Income statements.
a) COMPARATIVE BALANCE SHEET:
The balance sheet prepared on a particular date reveals the financial
position of the concern on the date. To study the trends of business over a
period of time; comparative balance sheet reveals the cause for changes in the
financial position on account of various transactions. The comparative study
throws light on financial policies adopted by the management.
The comparative balance sheet consists of two columns for the original
data. A third column used to show increase or decrease in various items. A
fourth column containing the percentage of share of a each variable out of the
total value.

GUIDELINES FOR INTERPRETATION OF BALANCE SHEET:


1. The short term financial position can be studied by comparing the working
capital of both years.

2. To study the liquidity position, changes in liquid assets must be ascertained


and if there is any increase in liquid assets, we must understand that there is
an improvement in the liquidity position of the concern and vice versa.

3. A high increase in sundry debtors and bills receivable means an increase in


risk in collecting the amount of dues.

4. A high increase in closing stock may mean decrease in the demand.

5. Long term financial position of the business concern can be analyzed by


studying the changes in fixed assets, long term liabilities and capital.

6. Fixed assets must be compared with long term loans and capital. If the
increase in fixed assets is more than the increase in long term loans and
capital, it means fixed assets are financed from the working capital which is
not good in the long term.

b) COMPARATIVE INCOME STATEMENTS:


The income statement (Profit &Loss A/c) gives the results of the
operations during a definite period. It reveals the profit carried or loss incurred
by the concern. The comparative study of income statement for more than 1
year may enable us to know the program of the concern. First two columns
give figures of various items for two years. The third and fourth column shows
increase or decrease in absolute figures and in percentage respectively.
In first step, find out the changes in absolute figures i.e., increase or
decrease should be calculated. Share of each variable out of the total income or
expenditure is calculated.

2. COMMON SIZE FINANCIAL STATEMENTS:


The common size statements i.e. balance sheet and income statement are
shown in analytical percentages. The figures are shown as percentages of total
assets, total liabilities and sales. The total assets are taken as 100 and different
assets are expressed as percentage of the total. Similarly various liabilities are
shown as a percentage of total liabilities. These statements are also known as
component parentage or 100% statements because every individual item is
stated as a percentage of the total 100.
The short-comings in comparative statements and trend percentages where
changes in item could not be compared with the total have been covered up.
The common size statements may be prepared in the following way.

 The totals of assets or liabilities are taken as 100.


 The individual assets are expressed as a percentage of total assets i.e., 100
and individual liabilities are also expressed as a percentage of total
liabilities i.e., 100.
Common Size Financial Statements also includes the following two statements
i.e.

a) Common Size Balance sheet, and


b) Common Size Income statements.

a) COMMON SIZE BALANCE SHEET:


Statement in which balance sheet items are expressed as the ratio of each
asset to total assets and the ratio of each liability is expressed as a ratio of total
liabilities is called common size balance sheet. The common size balance sheet
is a horizontal analysis. The comparison of figures in different periods is not
useful becomes total figure may be affected by a number of factors. It is not
possible to establish standard norms for various assets. The trends of year to
year may not give proper results.

b) COMMON SIZE INCOME STATEMENT:


The items in income statement can be shown as percentages of sales to
show the relation of each item to sales. A significant relationship can be
established between items of income statement and volume of sales. The
increase in sales will certainly increases selling expression and volume of sales.
The increase in sales will certainly increases selling expresses and not
administrative or financial expenses. In case the volume of sale increases to a
considerable extent, administrative and financial expenses may go up. In case
the sales are declining, the selling expenses should be reduced at once. So, a
relationship is established between sales and other in income statement and this
relationship is helpful in evaluating operational activities of the enterprises.
3. TREND ANALYSIS:
Trend analysis is an important and useful technique of financial analysis.
It involves computation of index numbers of the moments of the various
financial items in the financial statements for a number of periods. It enables to
know the changes in the financial position and the operational efficiency
between the period chosen.
Through trend analysis the analysis can give his opinion as to whether
favorable or unfavorable tendencies are reflected by the accounting date.
The comparative and common size balance sheets suffer from a major
limitation i.e., absence of basic standard to indicate whether the proportion of
an item is normal or analysis values are calculated for each item in isolation but
conclusions are to be drawn by studying the related items also.

Trend analysis can be analysis in the following ways:


1. By calculating trend ratio (or) percentage.
2. By plotting on graph paper (or) charge.

TREND RATIO (or) PERCENTAGE:


It involves the ascertainment of arithmetical relationship which each item of
several year to the same item of base year. Any year maybe as the base year, it is
usually the earliest year.

PROCEDURE FOR CALCULATING TREND RATIO:


The following procedure maybe adopted for calculating trend ratio.
Select any year as base year the selected year should be normal year for the base
year the trend value is taken as 100.
Trend percentage of each item should be calculated with the help of following
formula.

4. COST-VOLUME-PROFIT ANALYSIS:
Cost – Volume – Profit analysis is an important tool of profit planning. It
studies the relationship between cost, volume of production, sales and profit. It
is not strictly a technique used for analysis of financial statements. However, it
is an important tool for the management for decision making. Since the data is
provided both cost and financial records. It tells the volume of account of
variation in output, selling price and cost, and finally, the quantity to be
produced and sold to reach the target profit level.

5. RATIO ANALYSIS:
Financial analysis depends to a very large extent on the use of ratios
though there are other equally important tools of such analysis. Thus, a direct
examination of the magnitude of two related items is somewhat enlightening
but the comparison is greatly facilitated by expressing the relationship as a
ratio.
Ratio analysis of business enterprises is done to ascertain the capacity of
the firm to meet its future financial obligation or expectations. Present and past
data are used for the purpose and necessary extrapolations are made to provide
an indication of future performance. Alexander Walt, who criticized the bankers
for their lopsided decisions regarding the grant of credit on current ratios alone,
made the presentation of an elaborate system of ratio analysis as early as in the
year 1919.
RATIO:
Ratio is an expression of the quantitative relationship that exists between the
two numbers. The ratio is defined as “the indicated quotient of two mathematical
expressions” the ratio should be determined between related accounting variables
to be meaningful and effective.

RATIO ANALYSIS - IMPORTANCE:


As a tool of financial management, ratios are of crucial significance. The
importance of ratio analysis lies in the fact that presents facts on a comparative
basis and enables the drawing inference regarding the performance of a firm.
Ratio analysis is relevant in assessing the performance of a firm in respect to the
following aspects.

1. Liquidity position
2. Long-term solvency
3. Operational efficiency
4. Overall profitability
5. Inter-firm comparison, and

RATIO ANALYSIS-LIMITATIONS:
Ratio Analysis is a widely used tool of financial analysis. Yet, it suffers
from various limitations. The operational implication of this is that while using
ratios, the conclusions should not be taken on their face value. Some of the
limitations, which characterize ratio analysis, are
i. Difficulty in comparison.
ii. Impact of Inflation, and
iii. Conceptual Diversity

RATIO ANALYSIS-TYPES:
Several ratios, calculated from the accounting data, can be grouped into
various classes according to financial activity or function to be evaluated. As
stated earlier, the parties interested in financial analysis are short-term and long-
term creditors, owners and management. Short-term creditors` main interest is in
the liquidity position or the short-term solvency of the firm. Long-term creditors`,
on the other hand, are more interested in the long-term solvency and profitability
of the firm. Similarly, owners concentrate on the firm’s profitability and financial
condition. Management is interested in evaluating every aspect of the firm’s
performance. They have to protect the interests of all parties and see that the firm
grows profitably. In view of the requirements of the various users of ratios, we
may classify them into the following four important categories:

 LIQUIDITY RATIOS
 LEVERAGE RATIOS
 ACTIVITY RATIOS
 PROFITABILITY RATIOS

A)LIQUIDITY RATIOS:
It is extremely essential for a firm to be able to meet its obligations as they
become due. Liquidity ratios measure the firm’s ability to meet current
obligations.
In fact, analysis of liquidity needs the preparation of cash budgets and cash
and Fund Flow statements; but liquidity ratios, by establishing a relationship
between cash and other current assets to current obligations provided a quick
measure of liquidity. A firm should ensure that it does not suffer from lack of
liquidity, and also that it does not have excess liquidity. The failure of a company
to meet its obligations due to lack of sufficient liquidity, will result in a poor
creditworthiness, loss of creditors` confidence, or even in legal tangles resulting in
the closure of the company. A very high degree of liquidity is also bad; idle assets
earn nothing. The firm’s funds will be unnecessarily tied up in current assets.
Therefore, it is necessary to strike a proper balance between high liquidity and lack
of liquidity. The most common ratios, which indicate the extent of liquidity or
lack of it, are:

1. CURRENT RATIO:
The current ratio is calculated by dividing current assets by current
liabilities.

Current assets include cash and those assets, which can be converted into
cash within a year, such as Marketable Securities, Debtors and Inventories.
Prepaid expenses are also including in current assets as they represent the
payments that will not be made by the firm in future. Current Liabilities include
Creditors, Bill payable, Accrued expenses, Short-term bank loan, and Income Tax
Liability and Long-term debt maturing in the current year.
The current ratio is a measure of the firms` short-term solvency. The higher
the current ratio, the larger is the amount of rupees available per Rupee of current
liability, the more is the firms` ability to meet current obligations and the greater is
the safety of funds of short-term creditors.

2. QUICK RATIO:
The Quick ratio is calculated by dividing quick assets by quick liabilities.

Quick assets or Liquid assets mean those assets which are immediately
convertible into cash without much loss. All current assets except prepaid expenses
and inventories are categorized in liquid assets. Quick liabilities means those
liabilities, which are payable within a short period. Normally, Bank overdraft and
Cash credit facility, if they become permanent mode of financing are in quick
liabilities.
As this ratio concentrates on cash, marketable securities and receivables in
relation to current obligation, it provides a more penetrating measure of liquidity
than current ratio.

B) LEVERAGE RATIOS:

The short-term creditors like bankers and suppliers of raw material are more
concerned with the firms` current debt-paying ability. On the other hand, long-term
creditors like debenture holders, financial institutions etc., are more concerned with
the firms` long-term financial strength. In fact, a firm should have strong short-as
well as long-term financial position. To judge the long-term financial position of
the firm, financial leverage, or Capital structure, ratios are calculated. These ratios
indicate mix of funds provided by owners and lenders. As a general rule, there
should be an approximate mix of debt and owner’s equity in financing the firms`
assets.
The manner in which assets are financed has a number of implications.
First, between debt and equity, debt is more risky from the firms` point of view.
The firm has a legal obligation to pay interest on debt holders, irrespective of the
profits made or losses incurred by the firm. If the firm fails to debt holders in time,
they can take legal action against it to get payment and in extreme cases, can force
the firm into liquidation.
Secondly, use of debt is advantageous for shareholders in two ways:
a. They can retain control of the firm with a limited stake and
b. Their earnings will be magnified, when the firm earns a rate of return on the
total capital employed higher than the interest rate on the borrowing funds.
The process of magnifying the shareholders return through the use of debt is
called “financial leverage” or “financial gearing” or “trading on equity”.
Leverage ratios may be calculated from the balance sheet to determine the
proportion of debt in total financing. Many variations of these ratios exist; but all
these ratios indicate the same thing-the extent to which the firm has relied on debt
in financing assets. Leverage ratios are also computed from the profit and loss
items by determining the extent to which operating profits are sufficient to cover
the fixed charges.

1. DEBT – EQUITY RATIO:

The relationship describing the lender contribution for each rupee of the
owner’s contribution is called DEBT-EQUITY RATIO. Debt Equity ratio is
directly computed by the following formula.
2. PROPRIETARY RATIO:
This ratio states relationship between share capital and total assets.
Proprietors equity represents equity share capital, preference share capital and
reserves and surplus. The latter ratio is also called capital employed to total assets.

a) INTEREST COVERAGE RATIO:


This ratio indicates the extent to which earnings can decline without
resultant financial hardship to the firm because of its inability to meet annual
interest cost. For example, coverage of 5 times means that a fall in earnings unto
(1/5th) level would be tolerable, as earnings to service interest on debt capital
would be sufficiently available. This ratio is measured as follows:

C) ACTIVITY RATIOS:
Funds creditors and owners are invested in various assets to generate sales
and profits. Better the management of assets, larger the amount of sales. Activity
ratios are employed to evaluate the efficiency with which the firm managers and
utilizes its assets. These ratios are also called Turnover Ratios because they
indicate the speed with which assets are being converted or turned over into sales.
Activity ratios, thus, involve a relationship between sales and assets. A proper
balance between sales and assets generally reflects that assets are managed well.
Several activity ratios can be calculated to judge the effectiveness of asset
utilization.

1. DEBTORS TURNOVER RATIO:


A firm sells goods for cash and credit. Credit is used marketing tool by a
number of companies. When the firm extends credits to its customers, debtors
(accounts receivables) are created in the firms` accounts. The debtors are expected
to be converted into cash over a short period and, therefore, are included in current
assets. The liquidity position of the firm depends on the quality of debtors to a
greater extent. Debtor’s turnover ratio indicates the velocity of debt collection of a
firm. Unsimple words it indicates the number of times average debtors are turned
over during a year.

2. FIXED ASSETS TURNOVER RATIO:


The fixed assets turnover ratio measures the efficiency with which the firm
is utilizing its investments in fixed assets, such as land, building, plant and
machinery, furniture, etc. It also indicates the adequacy of sales in relation to the
investment in fixed assets. The fixed assets turnover ratio is sales divided by net
fixed assets. The firm assets turnover ratio should be compared with past and
future ratios and also with ratio of similar firms and the industry average. The high
fixed assets turnover ratio indicates efficient utilization of fixed assets in
generating sales, while low ratio indicates inefficient management and utilization
of fixed assets.
This ratio indicates the extent to which the debts have been collected in
time. The debt collection period indicates the average debt collection period. This
ratio is a good indicator to the lenders of the firm, because it explains to them
whether their borrower is collecting from its debt in time. An increase in this
period indicates blockage of funds in debtors.

3. WORKING CAPITAL TURNOVER RATIO:


Working capital turnover ratio indicates the velocity of the utilization of
net working capital. This ratio indicates the number of times the working capital is
turned over in the course of a year. This ratio measures the efficiency with which
the working capital is being used by a firm. A higher ratio indicates efficient
utilization of working capital and low ratio indicates otherwise. But a very high
working capital turnover ratio is not a good situation for any firm and hence care
must be taken while interpreting the ratio. Making of comparative and Trend
Analysis can at best use this ratio for different firms in the same industry and for
various periods. This can be calculated as follows:

D) PROFITABILITY RATIOS:
A company should earn profits to Survive and Grow over a long period of
time. Profits are essential, but it would be wrong to assume that every action
initiated by management of a company should be aimed at maximizing profits,
irrespective of social consequences.
Profit is the difference between revenues and expenses over a period of
time (usually a year). Profit is the ultimate “Output” of a company, and it will
have no future if it fails to make sufficient profits. Therefore, the financial
manager should continuously evaluate to the efficiency of the company in term of
profits. The profitability ratios are calculated to measure the operating efficiency
of the company. Besides management of the company, creditors and owners are
also interested in the profitability of the firm. Creditors want to get interest and
repayment of principle regularly. Owners want to get a required rate of return on
their investment. This is possible only when the company earns enough profits.
Generally two major types of profitability ratios are calculated.

1. PROFITABILITY IN RELATION TO SALES


2. PROFITABILITY IN RELATION TO INVESTMENT

PROFITABILITY RATIOS IN RELATION TO SALES:

a) GROSS PROFIT MARGIN RATIO:


Gross profit margin reflects the efficiency with which the management
produces each unit of product. This ratio indicates the average spread between the
cost of goods sold and the sales revenue. This shows profits relative to sales after
the deduction of production costs and indicates the relation between Production
costs and selling price. A high gross profit margin relative to the industry average
implies that the firm is able to produce at relatively lower cost.
A high gross profit margin ratio is a sign of good management. A gross
margin ratio may increase due to any of the following factors.
i. Higher sales prices, cost of goods sold remaining constant,
ii. Lower cost of goods sold, sales prices remaining constant,
iii. A combination of variations in sales prices and costs, the margin widening,
and
iv. Increases in the proportionate volume of higher margin items.
The analysis of these factors will reveal to the management that how a
depressed gross profit margin can be improved. A low gross profit margin may
reflect higher cost of goods sold due to the firms` inability to purchase raw
materials at favorable terms, inefficient utilization of plant and machinery,
resulting in higher cost of production. The ratio will also be low due to fall in
prices in the market, or market reduction in selling price by the firm in an attempt
to obtain large sales volume, the cost of goods sold remaining unchanged. The
financial manager must be able to detect the causes of a falling gross margin and
initiate action to improve the situation.

b) NET PROFIT MARGIN RATIO:


Net profit is obtained when operation expenses, interest and taxes are
subtracted from the gross profit.
If the non-operating income figure is substantial, it may be excluded from
PAT to see profitability arising directly from sales. Net profit margin ratio
establishes a relationship between net profit and sales and indicated management’s
efficiency in manufacturing, administering and selling the products. This ratio is
the overall measure of the firms` ability to turn each rupee sales into net profit. If
the net margin is inadequate, the firm will fail to achieve satisfactory return on
shareholder`s funds.
This ratio also indicates the firms` capacity to withstand in adverse economic
conditions. A firm with a high net margin ratio would be in an advantageous
position to survive in the case of falling selling prices, rising costs of production or
declining demand for the product. It would really be difficult for a low net margin
firm to withstand these adversities. Similarly, a firm higher net profit margin can
make better use of favorable condition, such as rising selling prices; fall in costs of
production or increasing demand for the product. Such a firm will be able to
accelerate its profits at a faster rate than a firm with a low net profit margin will.
An analyst will be able to interpret the firm’s profitability more meaningfully
if he/she evaluates both the ratios-gross margin and net margin-jointly. To
illustrate, if the gross profit margin has increased over years, but the net profit
margin has either remained constant or declined, or has not increased as fast as the
gross margin, this implies that the operating expenses relative to sales have been
increasing. The increasing expenses should be identified and controlled. Gross
profit margin may decline due to fall in sales price or increase in the cost of
production.

c) CASH MARGIN RATIO:


Cash profit excludes depreciation. It means Net profit after interests and
taxes but before depreciation. This ratio indicates the relationship between the
profit, which accrues in cash and sales. Greater percentage indicates better
position and Vice-Versa as it shows the correct profit earned by the firm.
This ratio is expressed as cash profit to sales.

Article I. PROFITABILITY RATIOS IN RELATION TO


INVESTMENT:

a) RETURN ON INVESTMENT:
The term investment refers to Total Assets. The funds employed in Net
assets are known as Capital Employed. Net assets equal net fixed assets plus
current assets minus Current liabilities excluding Bank loans. Alternatively,
Capital employed in equal to Net worth plus total debt.
The conventional approach of calculating return on investment (ROI) is to
divide PAT by Investment. Investment represents pool of funds supplied by
shareholders and lenders, while PAT represents residual income of shareholders;
therefore, it is conceptually unsound to use PAT in the calculation of ROI. Also,
as discussed earlier, PAT is affected by capital structure. It is, therefore more
appropriate to use one of the following measures of ROI for comparing the
operating efficiency of firms.
Where ROTA and RONA respectively Return on Total assets and Return on Net
assets.

RONA is equivalent of Return on Capital Employed.

b) RETURN ON CAPITAL:
The ROCE is the second type of ROI. The term capital employed refers to
long-term funds supplied by the creditors and owners of the fund. It can be
computed in two ways. First, it is equal to non-current liabilities (long-term
liabilities) plus owner’s equity. Alternatively, it is equivalent to Net Working
Capital plus Fixed Assets. Thus, the Capital Employed provides a basis to test the
profitability related to the sources of long-term funds. A comparison of this ratio
with similar firms, with the industry average and overtime would provide sufficient
insight into how efficiency the long-term funds of owners and creditors are being
used. The higher the ratio, the more efficient is the use of Capital Employed.

c) RETURN ON GROSS BLOCK:


This ratio establishes a relationship between net profit and gross fixed assets.
This ratio emphasizes the profit on investment in Fixed Assets. This ratio is
expressed as follows:
Net profit means profit before Tax. Gross Block means Gross fixed assets i.e.,
Fixed assets before deducting depreciation.

6. CASH FLOW ANALYSIS


The statement of changes in financial position has an analytical value as
well as an important planning tool. It gives a clear picture of the causes of changes
in the company’s working capital position or cash position. It reveals the financing
and investment policies followed by the company in the past. The statement
reveals the non-current assets acquired by the company and manner in which they
have been financed from internal and external sources.
A projected statement of changes in financial position is an important
planning tool. The estimates of working capital for a long-term period, say, for
five to ten years help the management to plan the repayment of long-term debt and
interest, acquisition of fixed assets and payment of cash dividends.
A projected statement of changes in financial position is also useful in
obtaining loans from banks and other financial institutions.
Now-a-days lenders invariably ask for such projected statements. These
statements indicate them the liquidity position of the firm and its ability to pay
interest regularly and return the principal sum.
The statement prepared to analyze the cash flows is an important tool of the
short term financial planning. To make payments in the immediate future the firm
needs cash; therefore, the firm is interested in estimating its cash balances for
several months or quarters.
THERE ARE 4 STEPS INVOLVED IN PREPARATION OF FUNDS FLOW
STATEMENT:

1. Ascertain the funds from operations.


2. Preparation of statement of changes.
3. Computation of any missing figures as to profit or loss on Sale of fixed
assets, purchase or sale of fixed assets and the amount of depreciation on
fixed assets etc.
4. Finally preparation of funds flow statement.

LIMITATIONS OF FINANCIAL STATEMENT ANALYSIS:

The following are the impartment limitations of financial analysis.

1. It is only a study of internal reports.

2. Financial analysis is based upon only monetary information and non-


monetary factors are ignored.

3. It does not consider changes in price levels.

4. As the financial statements are prepared on the basis of a going concern it


does not give exact position thus accounting concepts and contentions cause
a serious limitation to financial analysis.

5. Changes in accounting procedure by a firm may often make financial


analysis misleading.
6. Analysis is only means and not an end in itself. The analyst has to make
interpretation and draw has own conclusion. Different people may interpret
the same analysis in different ways.

PROCEDURE OF CASH MANAGEMENT:

In RINL cash requirements is placed and arrived at in the following manner.


 The chairman cum managing director of RINL in consultation with board of
directors and decides the production schedule for the following year.
 The production schedule as approved by the directors is then circulated to all
departments after that production target for each month will be set.
 The heads of 35 budgets formulate various budgets regarding to the
production, finance.
 After receiving all the budgets, the directors formulate a master budget for
the particular year and the monthly budget allocation is done for each
section.
 At the end of every month the actual results are comparing to the project
budgets. The management and the directors discuss about results of
performance.
 And finally, they will take decision about the amount of cash required for
the next month.

Proper cash management system is very important to any organization to


meet objectives of the company. In RINL cash is managed in a different way. In
RINL every week decides, what would be done in next week. Every week
analyzes, what are the payments and receipts of the next week and prepare the cash
budget. Whenever cash budget choose surplus balance of cash, RINL invites the
tender to public limited banks and also some private banks which have an MOU.
Then RINL receive the bids from various banks in the form of sealed bids or
through the email. After that RINL select the bank, which bank codes the highest
interest rate and also agree with the rules and regulations of RINL.

In the same way when RINL have deficit balance of cash, again we invite the
tender and select the bank which bank codes less interest rate. In this way RINL
manage the cash very effectively.

SILENT FEATURES OF CASH COLLECTION POLICY:

a) The Collections of each day at the Branches of RINL will be deposited in

the Bank before 11.00 AM of the next working day.

b) The funds so deposited at various branches will be pooled and credited to the

account of RINL held at Visakhapatnam on the same day by 3.00 PM as

long as Cash Management System is in vogue.

c) Banks must be capable to switch over immediately to Real Time Gross

Settlement (RTGS) at those RINLs locations once RBI enables and the

credit to the account of RINL at Visakhapatnam must be as per the system in

vogue at that time.

d) The Bank shall allow for a temporary overdraft in case of mismatch i.e., if

the payments of the day are more than the receipts, the short fall shall be

adjusted by way of overdraft which will be mitigated by the next working

day or two.
e) The Overdraft allowed by the Bank and the charges payable for returned

cheques shall be at softer rate of interest charge.

f) The bank will submit MIS report on daily basis to the respective RINL

Branches showing Cheque /DDs deposited, it’s clearing status, details of

returned cheques, amount transferred and a consolidated report on a

fortnightly basis and summary report daily and fortnightly to Head Quarters

at Visakhapatnam in mutually agreed user friendly formats.

g) Service charges to be levied by the Bank on the 1st of the following month as

per the agreed rates with a report of it being sent to Head Quarters.

Management efforts over the few years have been to inculcate cash
consciousness through constant emphasis on working capital, mainly inventory and
book debtors. In all these, it is to be kept in mind that VSP is a multi product
undertaking, were management decisions affecting working capital are taken at
managerial level.

PROCEDURE OF RECEIVABLES MANAGEMENT:

RINL sells its product directly to its customers. It has 27 marketing offices
spread through the country. The marketing and the finance department and top
management at the head quarter formalize the price of different products and
different branches jointly. The price list for each product in their region is
circulated to all branch offices.
The sales and billing are done at the individual braches and the record of the
daily transactions is maintained. The cash deposits are done at one of the
respective banks in turn transfer the entire sum to the banks at Visakhapatnam
through telegraphic transfer.

PAYABLES MANAGEMENT:

In RINL all payments are effected through the cast section of fiancé
department in the head quarters. Cast sections monitor the cash position on a daily
bases and prioritize the payments. Cash section prepares cash report every morning
and checks with the banks for cash balance. Based on the balance available in the
banks and priority of payments, cheques are issued to the parties. Payments are
prioritized so as to optimize the cost. Prioritization is done based on the financial
implication of non-payment of the due amount.
CHAPTERT-IV
THEROTICAL FRAME WORK
CHAPTERT-V
DATA ANALYSIS AND
INTERPRETATION
DATA ANALYSIS AND INTERPRETATION

Table No 5.1 Balance Sheets of VSP Ltd. from2019-2020to

2022-2023 Sources of Funds (Rs in Crores)

Particulars 31-03-2023 31-03-2022 31-03-2021 31-03-2020 31-03-2019

Share Holders
Fund

Share Capital 6346.82 7727.32 7827.32 7827.32 7827.32

Reserve &
6130.50 5931.97 5401.90 5057.68 4592.59
surplus
(A) 12477.32 13659.29 13229.22 12885.00 12419.91

Loan Funds

Secured Loans 1827.78 1002.4 274.89 407.28 907.72

Unsecured Loans 3072.22 1572.74 861.87 825.27 100.04

(B) 4900.00 2575.14 1136.76 1232.55 1007.76


Current
liabilities

Liabilities 6458.12 4119.26 3271.43 2871.95 2560.79

Provisions 587.87 1090.17 1336.06 1435.89 1620.53

(C) 7045.99 5209.43 4607.49 4307.84 4181.32

Deferred Tax
229.21 60.98 79.97 97.82 124.49
Liability

(D) 229.21 60.98 79.97 97.82 124.49


Total
24652.52 21504.84 19053.44 18523.21 17733.48
(A+B+C+D)
BALANCE SHEET AS AT 31-03-2023AND 31-03-2022
As at As at
Particulars
31-03-2023 31-03-2022

Equity and liabilities

Share holders’ Funds

Share Capital 6346.82 7727.32


Reserves and surplus 6130.50 5931.97

Non-current liabilities

Long-term borrowings 1241.56 350.4

Deferred tax liabilities(net) 229.21 60.98


Other long term liabilities 105.00 83.23
Long term provisions 414.77 479.73

Current Liabilities

Short term borrowings 3658.44 2575.74


Trade payables 737.94 39.19
Other current liabilities 5615.19 3645.84
Short term provisions 173.10 610.44

Total 24652.52 21504.84

Assets

Non-current assets

Tangible assets

Intangible assets

Capital work-in progress

Intangible assets under development 13777.25 12397.93

Non-current Investments 362.58 362.58

Long term loans and advances 498.36 241.89


Other non- current assets 36.58 10.33

Current assets

Inventories 3828.60 3403.11

Trade receivables 1009.65 427.15

Cash and bank balances 1625.02 2068.34

Short term loans and advances 3417.75 2366.54

other current assets 96.73 226.97

Total 24652.52 21504.84

Table No 5.2 Application of Funds (Rs in Crores)

31-03-2023 31-03-2022 31-03-2021 31-03-2020 31-03-2019


Particulars

Fixed Assets

Gross Block 12588.33 800.98 9794.60 9473.90 8971.80

Less: Depreciation 8798.52 347.66 8264.71 8008.55 7749.74

Net Block 3789.81 1787 1529.89 1465.35 1222.06

Hold for Disposal 0.13 0.00 0.03 0.05 0.05

Capital work-in-
9965.24 10596.08 9536.71 7506.90 4652.00
progress

(A) 13777.38 13531.72 11066.63 8972.30 5874.11

Investment (B) 362.58 362.58 361.60 0.25 0.05


Current Assets &
Advances

Inventories 3828.60 3403 3254.71 2451.52 3215.28

Sundry debtors 1009.65 427.15 330.61 181.18 191.27

Cash & Bank Balance 1625.02 2068.34 1998.89 5415.54 6624.17

Others Assets 96.73 226.97 75.96 137.40 258.91

Loans & Advances 3417.75 2366.54 1965.04 1365.02 1569.69

(C) 10512.56 9156.25 7625.21 9550.66 11859.32

Miscellaneous
Expenditure(D)
Profit & Loss
Account(E)
Total (A+B+C) 24652.52 23050.55 19053.44 18523.21 17733.48

COMPARATIVE BALANCE SHEET FOR THE YEARS


2017-2018and 2018-2019

Increase/ Increase/
2017-2018 2018-2019
Decrease Decrease
Particulars Rs. In Crs. Rs. In Crs.
Rs. In Crs. Percentage
ASSETS:
Cash & Bank Balance 6624.17 5415.54 -1208.63 -18.24
Sundry Debtors 191.27 181.18 -10.09 -5.27
Inventories (Stock) 3215.28 2451.52 -763.76 -23.75
Loans & Advances 1569.69 1365.02 -204.67 -13.03
Other Current Assets 258.91 137.4 -121.51 -46.93
Miscellaneous Expenditure
Profit & Loss Account
Investments 0.05 0.25 +0.2 +4.00
Fixed Assets 5874.11 8972.30 +3098.19 +52.74
Total Assets 17733.48 18523.21 +789.73 +4.45
LIABILITIES
Current Liabilities 2560.79 2871.95 +311.16 +12.15
Provisions 1620.53 1435.89 -184.64 -11.39
Secured Loans 907.72 407.28 -500.44 -55.13
Unsecured Loans 100.04 825.27 +725.23 +724.94

Deferred Tax Liability 124.49 97.82 -26.67 -21.42

Reserves & Surplus 4592.59 5057.68 +465.09 +10.12

Share Capital 7827.32 7827.32 ------ -------


Total Liabilities 17733.48 18523 +789.73 +4.45

Reasons for increase/decrease in profitability (2018-2019)

 Increase in turnover of rs.224crs over the last year sales turnover.

 Decrease in net sales realization of rs.1417crs over the last year NSR.

 Decrease of gross margin of Rs. 752crs over last year.

 Decrease in raw material price of rs.734crs over last year, increase in employee
remuneration& benefits of rs.224crs over last year: increase in production volume
of
 Rs.339crs over last year.

COMPARATIVE BALANCE SHEET OF VSP LTD FOR THE YEARS2019-2020and


2020-2021
Increase/ Increase/
2019-2020 2020-2021
Particulars Decrease Decrease
Rs. in Crs. Rs. in Crs.
Rs. in Crs. Percentage
ASSETS:
Cash & Bank Balance 5415.54 1998.89 -3416.65 -63.08

Sundry Debtors 181.18 330.61 +149.43 +82.47

Inventories (Stock) 2451.52 3254.71 +803.19 +32.76


Loans & Advances 1365.02 1965.04 +600.02 +43.95
Other Current Assets 137.4 75.96 -61.44 +44.71
Miscellaneous Expenditure
Profit & Loss Account
Investments 0.25 361.60 +361.35 +144540
Fixed Assets 8972.30 11066.63 +2094.33 +23.34
Total Assets 18523.21 19053.44 +530.23 +2.86
LIABILITIES
Current Liabilities 2871.95 3271.43 +399.48 +13.90

Provisions 1435.89 1336.06 -99.83 -6.95


Secured Loans 387.32 274.89 -112.39 -29.02
Unsecured Loans 845.23 861.87 +16.64 +1.96
Deferred Tax Liability 97.82 79.97 -17.85 -18.24
Reserves & Surplus 5057.68 5401.90 +344.22 +6.80
Share Capital 7827.32 7827.32 -0.05 -0.0006
Total Liabilities 18523.21 19053.44 +530.23 +2.86

Reasons for increase/decrease in profitability 2020-2021

 Increase in turnover of rs.882crs over the last year sales turn over.
 Increase in net sales realization of rs.719crs over the last year NSR.
 Decrease of gross margin of rs.190crs over last year.
 Increase in raw materials consumption expenditure of rs.1653crs due to increase in
raw material prices. Over last year.
COMPARATIVE BALANCE SHEET OF VSP LTD FOR THE YEARS 2021-2022and
2022-2023
Increase/ Increase/
2021-2022 2022-2023
Particulars Decrease Decrease
Rs. in Crs. Rs. in Crs.
Rs. in Crs. Percentage
ASSETS
Cash & Bank Balance 2068.34 1625.02 +443.32 +21.43

Sundry Debtors 427.15 1009.65 -582.5 -136.36

Inventories (Stock) 3403.11 3828.60 -425.49 -12.5

Short Term Loans & Advances 2366.54 3417.75 -1051.21 -44.41

Other Current Assets 226.97 96.73 +130.24 +57.38

Miscellaneous Expenditure

Profit & Loss Account

Investments 614.80 897.52 -282.64 -45.97

Fixed Assets 12397.93 13777.25 -1379.32 -11.12

Total Assets 21504.84 24652.60 -3147.76 -14.64

LIABILITIES

Liabilities 4119.26 6458.12 -2338.86 -56.77

Provisions 1090.17 587.87 +502.3 +46.07

Secured Loans 931.70 1827.78 -896.08 -96.17

Unsecured Loans 1643.44 3072.22 -1428.78 -86.93

Deferred Tax Liability 60.98 229.21 -168.23 -275.87

Reserves & Surplus 5931.97 6130.50 -198.53 -3.34

Share Capital 7727.32 6346.82 +1380.5 +17.86

Total Liabilities 21504.84 24652.52 -3147.68 -14.63


Reasons for increase/decrease in profitability 2022-2023

 Increase of turnover of Rs.2945crs over previous year.

 Increase of price realization of Rs.2601crs over previous year.

 Increase in margin by Rs.233crs over previous year.

 Increase in raw material consumed by Rs.1284crs.

 Rs.212crores increase in operating expenditure.

 Rs.105crs increase in depreciation cost.

 Rs.578crs decrease in stock due to changes in inventories.

 Rs.194crs increase in employee cost.

Government policies
Imposition of power restrictions and control measures by government of A.P

Increase in excise duty from 10.30% to 12.36%.

Other reasons
a) Increase in iron ore and MCC prices

b) Increase in railway frights.

c) Decrease of interest income due to maturity of deposits and liquidation to use in


operational activities and for capital payments.

d) Increase of interest due to utilization of resources for redemption of preference


share capital.

e) Increase in power cost.


COMPARATIVE PROFIT & LOSS A/C OF VSP LTD. FOR THE
2019-2020 & 2020-2021

Balance as at Balance as at Increase/


Increase/
PARTICULARS 31.03.2013 31.03.2012 Decrease
Decrease
(Rs. In crores) (Rs. In crores) (Rs. In crores)
Percentage
INCOME
Sales 10471.18 9809.15 662.03 +6.7%
Other Revenue 525.56 736.81 211.25 +28.6
TOTAL INCOME 10996.74 10545.96 450.78 +4.27
EXPENDITURE

Raw Material 6656.04 5950.46 705.58 +11.8%


consumed
Employee
1272.95 1399.74 -126.79 -9.05%
remuneration

Stores & Spares


471.22 466.48 4.74 +1.01%
Consumed

Depreciation 265.94 277.17 -11.23


-4.05
Other Expenditure
1383.89 1212.16 171.73
+14.16%
TOTAL
10050.04 9305.55 744.49
EXPENDITURE +8.00%
Adjustments 34.96(credit) 7.24(credit) 27.72 +382.87%
PBT 981.66 1247.65 -265.99 -21.31%

NET TAX 323.17 450.98 -127.81 -28.34%

PAT 658.49 796.67 -138.18 -17.34%


REASONS FOR INCREASE / DECREASE IN PROFITABLITY 2012-2013.

 Decrease in turnover of Rs.909 crs over the last year sales turnover due to
Sluggish market conditions and fall in NSR

 Decrease in net sales realization of Rs.758 crs over last year


 Decrease of gross margin of Rs.572 crs over last year

 Major capitalization of expansion units with gross block value of Rs.1859 crs and
consequential depreciation of Rs.35 crs

 Increase in efficiency

COMPARATIVE PROFIT & LOSS A/C OF VSP LTD. FOR THE YEARS
2021-2022and 2022-2023

Balance as at Balance as at Increase/


Increase/
PARTICULARS 31.03.2022(Rs. In 31.03.2023(Rs. Decrease
Decrease
crores) In crores) (Rs. In crores)
Percentage
INCOME
Sales 13232.61 12110.69 -1121.92 -8.48
Other Revenue 328.39 455.42 127.03 38.68
TOTAL INCOME 13561 12566.11 -994.89 -7.34

EXPENDITURE

Raw Material consumed 8472.58 8098.66 -373.92 -4.41


Changes in Inventories of 45.37 -303.74 -349.11 -769.473
Employee benefits 1466.67 1469.07 2.4
0.16
Finance Costs 190.60 359.25 168.25 88.48
Depreciation 344.86 186.88 -157.98 -45.8
Other Expenditure 1987.18 2296.75 309.57 15.58
TOTAL
12507.26 12106.87 -400.39 -3.20
EXPENDITURE

PROFIT BEFORE TAX 1110.01 526.47 -583.54 -52.57


Taxes 358.55 173.64 -184.91 -51.58
Profit After Tax 751.46 352.83 -398.63 -53.05

HIGHLIGHTS:
 Growing cash reserves often signal strong company performance
 If inventory grows faster than sales, it is almost always a sign of
deteriorating fundamentals
 If a company’s collection periodic borrowing longer, it could mean problems
ahead
 Much attention is no required on fixed assets, since the portion of fixed
assets is low
 Increase I capital work in progress indicates the expansion activities of the
company
 Company’s cash resources are indicating the low operating cycle
 Assets do not contain any fictitious assets
 Redemption of considerable amount of performance share capital indicates
the increased own generated funds and reduction in dividend payments
 Proportion of long term borrowings to CWIP indicates the low future
finances costs and very quick repayment of loans on commissioning of all
expansion units
 Company is not struggling to increase considerable credit sales, which
indicates the strong hold on the market base
 Due to increasing power requirements to cater to expansion units, imports of
costlier power is causing rise in power costs
 Acute shortage of boiler coal supplies hindering power generations
COMMON SIZE ANALYSIS

Table NO 5.2.1 COMMON SIZE BALANCE SHEET OF


2021-2022AND 2022-2023

2021-2022 2021-2022 2022-2023 2022-2023


Particulars Rs. In CRs. PERCENTAGE Rs. in CRs. PERCENTAGE
ASSETS:

Cash & Bank Balance 2068.34 9.61 1625.02 6.59

Sundry Debtors 427.15 1.98 1009.65 4.09

Inventories (Stock) 3403.11 15.82 3828.68 15.53

Loans & Advances 2366.54 11 3417.75 13.86

Other Current Assets 226.97 1.05 96.73 0.39

Miscellaneous
Expenditure
Profit & Loss
Account
Investments 614.80 2.85 897.44 3.64

Fixed Assets 12397.93 57.65 13777.25 55.88


Total Assets 21504.84 100 24652.52 100
LIABILITIES
Liabilities 4119.26 19.15 6458.12 26.19
Provisions 1090.17 5.06 587.87 2.38
Secured Loans 931.70 4.33 1827.78 7.41
Unsecured Loans 1643.44 7.64 3072.22 12.46
Deferred Tax
60.98 0.28 229.21 0.92
Liability

Reserves & Surplus 5931.97 27.58 6130.50 24.86

Share Capital 7727.32 35.93 6346.82 25.74


Total Liabilities 21504.84 100 24652.52 100
Common size balance sheet of 2021-2022and 2022-2023in %

70

60

50

40

30
2013-14
20
2014-15
10

0
e s ) s ts nts s s s l
nc btor tock nce sse s et itie sion an a ns ility lus ita
a e p p
l e s a a tm as bil ovi d lo d lo liab sur a
ba y d es( adv nt es xed lia p r re re x & rec
k r i e v
n d r & rr in fi ent cu cu ta rs sha
&ba sun ento oan cu rr se nse red rve
v l r r e
sh in he cu u fe res
ca ot de

INTERPRETATION:

 The fixed assets for the period of 2021-2022is 12397.93 & 2022-2023 is 13777.25
where the percentage is 57.65 & 55.88
 The total assets and total liabilities for the period of 2021-2022 is 21504.84 &
2022-2023 is 24652.52 where the percentage is 100
 The liabilities for the period 2021-2022 is 4119.26 & 2022-2023 is 6458.12 where
the percentage is 19.15 & 26.15
Table No 5.2.1 COMMON SIZE BALANCE SHEET OF 2020-2021 AND 2019-2020
2020-2021 2020-2021 2019-2020 2019-2020
Particulars Rs. in CRs. PERCENTAGE Rs. In CRs. PERCENTAGE
ASSETS:
Cash & Bank Balance 1998.89 10.49 5415.54 29.23

Sundry Debtors 330.61 1.73 181.18 0.97

Inventories (Stock) 3254.71 17.08 2451.52 13.23

Loans & Advances 1965.04 10.31 1365.20 7.336


Other Current Assets 75.96 0.39 137.40 0.0007
Miscellaneous
Expenditure

Profit & Loss Account

Investments 361.60 1.89 0.25 0.0001


Fixed Assets 11066.63 58.08 88972.30 48.43
Total Assets 19053.44 100 18523.21 100
LIABILITIES

Current Liabilities 3271.43 17.16 2871.95 15.50

Provisions 1336.06 7.01 1435.89 7.75

Secured Loans 274.89 1.44 407.28 2.19

Unsecured Loans 861.87 4.52 8225.27 4.45


Deferred Tax Liability 79.97 0.41 97.82 0.52
Reserves & Surplus 5401.90 28.35 5057.68 27.30
Share Capital 7827.32 41.08 7827.32 42.25

Total Liabilities 19053.44 100 18523.48 100


Common size balance sheet of 2020-2021 AND 2019-2020in %

70

60

50

40

30
2011-12
20
2012-13
10

0
ce s ) s s s s s s l
n tor ock nce set ent set itie ion a ns ans ility lus ita
la p p
eb st a as tm as bil vis lo l o ia b ur ca
ba y d es( adv nt es xed lia pro ured ured x l s&s are
k r ri e v
n d & rr in fi ent c c ta e
&ba sun ento ans cu rr se nse red serv sh
h v l o er u u r e
s in h c fe r
ca ot de

INTERPRETATION:

 The fixed assets for the period of2019-2020are 8972.30 & 2020-2021 is 11066.63 it has
been increased to10.77%.

 The Total assets for the period of2019-202018523.21 & 2020-2021 is 19053.44 i.e.,
100%.

 The current liabilities for the period2019-20202871.95& 2020-2021 are 3279.43 this has
been increased to1.66%.
Table NO 5.2.2 COMMON SIZE BALANCE SHEET OF 2017-2018AND 2018-2019

2018-2019 2018-2019 2017-2018 2017-2018


Particulars Rs. in CRs. PERCENTAGE Rs. In CRs. PERCENTAGE

ASSETS

Current Bank Balance 5415.54 29.23 6624.17 37.35

Sundry Debtors
181.18 0.97 191.27 0.01
Inventories
2451.52 13.23 3215.28 18.13
Loans & Advances 1365.02 7.36 1569.69 8.85
Other Current Assets 137.4 0.741 2587.91 1.46
Miscellaneous
Expenditure

Profit & Loss Account

Investments 0.25 0.0001 0.05 0.0002

Fixed Assets 8972.30 48.43 5874.11 33.12

Total Assets 18523.21 100 17733.48 100

LIABILITIES

Current Liabilities 2871.95 15.50 2560.79 14.44

Provisions 1435.89 7.75 1620.53 9.13

Secured Loans 407.28 2.19 907.72 5.11

Unsecured Loans 825.27 4.45 100.04 0.56


Deferred Tax Liability 97.82 0.52 124.49 0.70

Reserve & Surplus 5057.68 27.30 4592.59 25.89

Share capital 7827.32 42.25 7827.32 44.13

Total Liabilities 18523.21 100 17733.48 100

Common size balance sheet of 2017-2018AND 2018-2019in %

60.00%

50.00%

40.00%

30.00%

20.00% 2009-10
2010-11
10.00%

0.00%
ce l
n tor
s
rie
s
ce
s
s
s
et ent
s
s
s
et itie ion
s s
a ns ans ility s
lu pita
la o n s s l o o p
eb nt a a tm a bi ovis ed l ed l l ia
b r
Su e c
a
ba y d ve dv nt ves xed l ia r r r x r
k r A e &
n d In rr In Fi nt P cu cu ta s a
ba Sun ns & cu rre Se nse red erve Sh
& a r
Lo Oth
e Cu U er s
a sh
D
ef Re
C

INTERPRETATION:

 The fixed assets for the period of 2017-2018is 5874.11 & 2018-2019 is 8972.30 it has
been increased to 12%

 The Total assets for the period of 2017-2018is 17733.48 & 2018-2019 is18523.21 i.e.,
is 100%
 The current liabilities for the period 2017-2018is 2560.79 & 2018-2019 is 2871.95 this
has been increased by 1.2%

Table No 5.2.2: COMMON SIZE BALANCE SHEET OF 2017-2018AND 2016-2017

2017-2018 2017-2018 2016-2017 2016-2017


Particulars Rs. in CRs. PERCENTAGE Rs. in CRs. PERCENTAGE
ASSETS:
Cash & Bank Balance 6624.17 37.35 7699.11 50.39

Sundry Debtors 191.27 0.01 93.41 0.61


Inventories (Stock) 3215.28 18.13 1761.15 11.52
Loans & Advances 1569.69 8.85 1958.49 12.82

Other Current Assets 258.91 1.46 292.43 1.91

Miscellaneous
Expenditure

Profit & Loss Account

Investments 0.05 0.0002 0.05 0.0003


Fixed Assets 5874.11 33.12 3471.87 22.72
Total Assets 17733.48 100 15276.51 100
LIABILITIES

Current Liabilities 2560.79 14.44 1610.15 10.54

Provisions 1620.53 9.13 1518.47 9.93


Secured Loans 907.72 5.11 332.78 2.17
Unsecured Loans 100.04 0.56 107.95 0.70

Deferred Tax Liability 124.49 0.70 163.12 1.06

Reserves & Surplus 4592.59 25.89 3653.72 23.91


Share Capital 7827.32 44.13 7827.32 51.23
Total Liabilities 17733.48 100 15276.51 100

Common size balance sheet of 2017-2018AND 2016-2017in %


60.00%

50.00%

40.00%

30.00%

20.00% 2008-09
2009-10
10.00%

0.00%
ce s ) s s s s s l
n tor ock nce s et ent s
s
et itie ion a ns ans ility s
lu pita
la s s l o o p
eb (st a a tm d A abi ovis d L d L Lia
b r
Su e C
a
ba y d e s dv nt ves e i r e e
k r ri A e x L r r x & r
n d & rr In Fi ent
P u u a s a
ba Sun ento ns cu r Sec sec d T rve Sh
& v a r r n e e
sh In Lo Oth
e
Cu U ferr Res
Ca e
D

INTERPRETATION:

 The fixed assets for the period of 2016-2017is 3471.87 & 2017-2018is 5874.11 it has
been increased &%

 The Total assets for the period of 2016-2017is 15276.51 & 2017-2018is17733.48 there
is an increase of 2456.97

 The current liabilities for the period 2016-2017 is 1610.15 & 2017-2018is
2560.79i.e.,14 this has been increased to 4%
CASH FLOW STATEMENT for 2018-2019& 2019-2020.
Rs .in (Crs)
PARTICULARS 2019-2020 2018-2019
A. Cash flow from operating activities:
1. Net profit / (loss) before taxation 1247.65 2026.59
Add / (less) Adjustments for:
2. Depreciation 277.17 240.78
3. Interest finance charges 77.55 87.47
4. Provisions (107.14) (371.37)
5. Unrealized foreign exchange (Gain)/Loss (11.21) 47.85
6 (profit)/loss on sale of fixed assets (1.02) (0.47)
7. Finished goods consumed for capital jobs (94.90) (8087)
8. Interest income (534.71) (787.21)
Operating profit before working capital changes 853.39 1162.77
Adjustments for:
9. (Increase) / (Decrease) in inventories 763.76 (1454.13)
10. (Increase) / (Decrease) in sundry debtors 10.09 (97.86)
11. Decrease in loans & advances 204.67 388.80
12. Increase in Liabilities 281.99 382.23
13. Cash generated from operating activities 2113.90 (716.04)
14. Less: Income tax paid including fringe benefit tax 1622.90 334.23
Net cash from / (used in) operating activities
B. Cash flow to investing activity:
15. Purchase of fixed assets (3276.58) (2038.63)
16. Investments (0.20) 0.00
17. Proceeds from sale of fixed assets 35.28 2.29
18. Interest received 656.22 820.73
Net cash from / (used in) investing activity (2585.28) (1215.61)
C. Cash flow to financing activity:
19. Proceeds from / (Repayment of) secured loans (500.44) 574.94
20. Proceeds from / (Repayment of) unsecured loans 725.23 (7.91)
21. Interest and Finance charges (74.22) (92.13)
22. Dividend paid (339.18) 0.00
23. Dividend tax paid (57.64) 0.00
Net cash from / (used in) Financing activity (246.25) 474.90
Net Increase / (decrease) in cash & cash equivalents (A+B+C) (1208.63) (1074.94)
24. Opening balance of cash & cash equivalents 6624.17 7699.11
25. Closing balance of cash & cash equivalents 5415.54 6624.17

Section I.01 INTERPRETATION:

 In 2018-2019 there was an increase in inventories, current assets as compared to the


previous year.
 Interest received from the investments also placed an important quantum of inflow.
 Net profit decreased as compared to previous year.
CASH FLOW STATEMENT FOR 2020-2021AND 2019-2020

Rs. In crs
PARTICULARS 2020-2021 2019-2020
A. Cash flow from operating activities
1. Net profit / (Loss) before taxation 981.66 1247.65
Add / (Less) Adjustments for: 981.66 1247.65
2. Depreciation 268.61 277.17
3. Interest and Finance charges 164.55 77.55
4. Provisions 62.57 (107.14)
5. Unrealized foreign exchange (Gain) / (Loss) (5.30) (11.21)
6. (Profit) / (Loss) on sale of fixed assets (3.26) (1.02)
7. Finished goods consumed for capital jobs (6.65) (94.90)
8. Interest on income (347.54) (534.71)
Operating profit before working capital changes 1114.64 853.39
Adjustment for:
9. (Increase) / (Decrease) in Inventories (803.19) 763.76
10. (Increase) / (Decrease) in sundry debtors (149.43) 10.09
11. Decrease in Loans & Advances (600.02) 204.67
12. Increase in Liabilities 505.45 281.99
Cash generated from operating activities: 67.45 2113.90
13. Less: Income Tax paid including Fringe benefit Tax 486.26 491
Net cash from / (used in) operating activities (418.81) 1622.90
B. Cash flow to investing activity
14. Purchase of Fixed assets (2455.98) (3276.58)
15. Investments (361.35) (0.20)
16. Proceeds from sale of Fixed assets 3.55 35.28
17. Interest received 408.98 656.22
Net cash from / (used in) investing activity (2404.80) (2585.28)
C. Cash flow to Financing Activity
18. Proceeds from / (Repayment of) Secured Loans (112.43) (500.44)
19. Proceeds from / (Repayment of) Unsecured Loans 16.64 725.23
20. Interest and Finance charges (165.58) (75.22)
21. Dividend paid (285.29) (339.18)
22. Dividends tax paid (47.38) (57.64)
Net cash from / (used in) Financing Activity (593.04) (246.25)
Net increase / (Decrease) in Cash & Cash equivalents (3416.65) (1208.63)
(A+B+C)
Opening balance of Cash & Cash equivalents 5415.54 6624.17
Closing Balance of Cash & Cash equivalents 1998.89 5415.54

2019-2020:

There is a significant decrease in net working capital, which amounts to


2435.18 crores. There noticeable decrease in net working capital is due to decrease
in cash & bank balances. The decrease in cash is 1208.63crores. A negative growth
is observed in loan & advances and other current assets. The net effect of the above
changes has brought about the decreased working capital.

2020-2021:

There is a significant decrease in net working capital, which amounts to


2225.1crores. There noticeable decrease in net working capital is due to decrease
in cash & bank balances. The decrease in cash is 3426.7crores. A negative growth
is observed in loan & advances and other current assets. The net effect of the above
changes has brought about the decreased working capital

CASHFLOW STATEMENT FOR 2021-2022& 2022-2023


Section I.02
Rs. In Crs
PARTICULARS 2022-2023 2021-2022
A. Cash flow from operating activities:
1. Net profit / (Loss) before taxation 526.47 1110.01
Add / (Less) Adjustments for:
2. Depreciation 187.68 347.66
3. Interest and Finance charges 359.25 190.60
4. Provisions (17.20) 9.95
5. Unrealized foreign Exchange (Gain) / Loss 1.01 1.10
6. (Profit) /(Loss) on sale of fixed assets (0.45) (1.75)
7. Interest on income (151.26) (198.92)
8. Dividend income (0.13) (0.48)
Operating profit before working capital changes 905.37 1458.17
Adjustments for:
9. (Increase) / (Decrease) in Inventories (425.49) (148.40)
10. (Increase) / (Decrease) in Trade Receivables (582.50) (96.88)
11. (Increase) / (Decrease) in Loans & Advances (212.87) 52.50
12. (Increase) / (Decrease) in Other Non-current assets (26.25) (2.36)
13. (Increase) / (Decrease) in Other current assets 96.65 (36.46)
14. (Increase) / (Decrease) in Liabilities 639.53 262.46
Cash generated from operations
15. Less: Income Tax paid (143.60) (495.85)
Net cash from / (used in) operating activities 250.83 933.18
B. Cash flow from investing activities:
16. Purchase of Fixed Assets (1351.96) (1791.64)
17. Proceeds from / (purchase of) Investments 152.59 (156.87)
18. Dividend received 0.13 0.48
19. Proceeds from sale of fixed assets 0.59 2.95
20. Interest received 206.42 193.97
Net cash from / (used in) Investing activities (992.23) (1751.10)
C. Cash flow from Financing activities:
21. Proceeds from / (Repayment of) Long-term loans 1241.56 0.00
22. Proceeds from / (Repayment of) short-term loans 1083.30 1439.26
23. Proceeds from Prime Minister’s Awards Fund 1.44 0.39
24. Proceeds from / (Repayment of) share capital (1380.50) (100.00)
25. Interest and Finance charges (333.03) (196.77)
26. Dividend paid (270.79) (271.47)
27. Dividend Tax paid (43.91) (44.04)
28. Net proceeds from other bank balances 5.00 0.00
Net cash from / (used in) Financing activities 303.08 827.37
Net Increase / (Decrease) in cash & cash (438.32) 69.45
equivalents(A+B+C)
Opening Balance of cash & cash equivalents 2063.34 1993.89
Closing Balance of cash & cash equivalents 1625.02 2063.34

(Represented by Cash & Bank Balances – Schedule 12)

Section I.03 INTERPRETATION:

2021-2022

 There is a significant decrease in net working capital, over last 3 years. The
noticeable decrease in net working capital is due to decrease in current assets.
2022-2023
 In 2021-2022there was an decrease in inventories, current assets as compared to
the previous year.
 Interest received from the investments also placed an important quantum of
inflow.
 Net profit decreased as compared to previous year.

FINANCIAL HIGHLIGHTS & RATIOS


Rs. In crs

PARTICULARS 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023


A) OPERATING
RESULTS (Rs. In Crs)
Turn Over 10433 10411 10635 14462 13553
Gross Income 11337 11387 11392 14899 14021
Gross Expenditure 8310 9271 10067 13597 13135
Gross Profit 3027 2116 1326 1301 886
Profit Before Tax 2995 2027 1248 1110 526
Net Profit After Tax 1943 1336 797 751 353
B) YEAR END
FINANCIAL POSITION
(Rs. In Crs)
Share Capital 7827 7827 7827 7727 6347
Reserves and Surplus 3654 4593 5058 5932 6131
Capital Employed 9935 8869 5476 5813 7963
Net Worth 11481 12420 12885 13659 12477
Gross Block 8901 9006 9474 10394 12588
Depreciation 7516 7750 8009 8607 8799
Net Block 1385 1256 1465 1787 3790
Inventory 1761 3215 2452 3403 3829
C)PROFITABILITY
AND OTHER
RATIOS
(i) Percentage Of
Gross Profit to Sales 29.00 20.30 12.50 9.0 6.5
Net Profit to Sales 18.60 12.80 7.50 5.2 2.6
Gross Profit to Net Worth 16.90 10.80 6.20 9.5 7.1
Net Profit to Net Worth 19.60 15.00 14.50 2.8
5.5
Gross Profit to Capital 38.70 27.00 16.90 22.4 11.1
Employed
Net Profit to Capital 16.90 30.90 23.10 12.9 4.4
Employed
Gross Profit to Share 105.00 117.40 194.20 16.8 14.0
Capital
Inventory to Sales 10.23 4.65 8.23 23.5 28.2
(ii) Ratio Of
Current Assets to Current 3.60 2.84 2.20 1.2 1.0
Liabilities
Quick Assets to Current 3.10 2.10 1.60 0.7 0.6
Liabilities

Sales to Capital
Employed 2.50 1.50 1.54 2.5 1.7

INTERPRETATION:

 Turnover and Gross Income in favorable position

 Gross income is inclusive of Excise Duty recovered


 Gross Expenditure and Gross Profit is negative position

 Profit position was in upward trend from 2017-2018and after that it is in


down ward trend. This is mainly due to:

 Global melt down position


 Increase in competitors
 Decrease in Sales volume
 Increase in cost of production
 The same fact is revealing in the ratio analysis also

RATIO ANALYSIS & INTERPRETATION

I) LIQUIDITY RATIOS:

CURRENT RATIO:

TABLE SHOWS YEAR-WISE CURRENT RATIO:


(Rs. in crores)

Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Inventory 3215.28 2451.52 3254.71 3403.11 3828.60

Sundry debtors 191.27 181.18 330.61 427.15 1009.65


Cash & bank 6624.17 5415.54 1998.89 2068.34 1625.02

Other Assets 258.91 137.40 75.96 226.97 96.73

Loans & advances 1569.69 1365.02 1965.04 2366.54 3417.75

TOTAL
CURRENT 11859.32 9550.66 7625.21 8492.11 9977.75
ASSETS

Liabilities 2560.79 2871.95 3271.43 2575.14 3658.44

Provisions 1620.53 1435.89 1336.06 390.19 737.94

TOTAL
4181.32 4307.84 4607.49 7221.61 10184.67
LIABILITIES

CURRENT RATIO 2.8 2.21 1.65 1.176:1 0.979:1

Current Ratio
3

2.5

Current Ratio
1.5

0.5

0
2010-11 2011-12 2012-13 2013-14

INTERPRETATION:
1. As we can see over the years the current ratio has been in a declining trend. The
reasons and justifications are given below:
 The inventory maintained compared to production is almost the same
over the period of observation.
 There is a gradual increase in the sundry debtors but in the financial year
14-15 we can see a sharp rise in them due to high credit sales in that year.
 Cash at bank has decreased due to redemption of preferential shares.
 Other assets are almost the same value.
 There is an increase in Loans & Advances due to the Forward Contracts
receivables and increased advances to the suppliers to counter the
variations in the market (both Forex and Raw Material).
 Liabilities increased due to increased number of forward contract
payables so as to nullify the effect of Forex fluctuations.

Even though the current ratio is not ideal in this study period, the company’s
liquidity position is good because of high value of cash which is sufficient to
provide for the immediate provisions which are regular in nature.

LIQUID/QUICK RATIO:

TABLE SHOWING YEAR-WISE LIQUID RATIO


(Rs in crores)

Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Sundry debtors 191.27 181.18 330.61 427.15 1009.65


Cash & bank 6624.17 5415.54 1998.89 2068.34 1625.02

Other assets 258.91 137.40 75.96 226.97 96.73

Loans & advances 1569.69 1365.02 1965.04 2366.54 3417.75

LIQUID ASSETS 8644.04 7099.14 4370.50 5089 6149.15

Liabilities 2560.79 2871.95 3271.43

Provisions 1620.53 1435.89 1336.06

LIQUID
4181.32 4307.84 4607.49 7221.61 10184.67
LIABILITIES

QUICK RATIO 2.06 1.64 0.94 0.705:1 0.604:1


Quick Ratio
2.5

1.5 Quick Ratio

0.5

0
2010-11 2011-12 2012-13 2013-14 2014-15

INTERPRETATION:

As we can observe in the study period the ratio is gradually decreasing.

 When compared with the current ratio, we can see that the inventories make
almost 50 % of the current assets which is justified as it is a continuous process
manufacturing plant
 Also due to expansion plans there is a huge dip in the cash maintained by the
company which reduces the value of the total current assets
 When we compare the Inventory with the Trade Payables, it is evident that the
purchases are being made on cash basis and less on credit basis
 If we compare the Trade Payables with the Sundry Debtors, it is evident that there
is more to receive than to pay by the company

Even though the Quick Ratio is less than the ideal value and has a declining trend,
as explained the expansionary activities resulted in such trend but the liquidity position
of the company is good to pay back the immediate liabilities.

II) LEVERAGE RATIOS:


DEBT EQUITY RATIO:

TABLE SHOWING YEAR-WISE DEBT EQUITY RATIO


(Rs. in crores)

Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Secured loans 907.72 387.32 274.89 931.70 274.89

1495.23 861.87
Unsecured loans 100.04 845.23 861.87 148.21 347.58
(Others) (Others)

TOTAL DEBT 1007.76 1232.55 1136.76 2575.14 1484.34

Share Capital 7827.32 7827.32 7827.32 7727.32 6346.82

Reserves and Surplus 4592.59 5057.68 5401.90 5931.97 6130.50

Total Equity 12419.91 12885 13229.22 13659.29 12477.32

Debt Equity Ratio 0.08 0.09 0.08 0.189:1 0.119:1


Debt Equity Ratio
0.2
0.18
0.16
0.14
0.12 Debt Equity Ratio
0.1
0.08
0.06
0.04
0.02
0
2010-11 2011-12 2012-13 2013-14 2014-15

INTERPRETATION:

Even though there is a slight increase in the ratio over the study period the value of the
ratio is very less which signifies the fact that the company is debt free. There are two
factors for the ratio to be small

 The company mostly depends on short term borrowings to meet its capital needs
 The high value of equity also makes the ratio very low

INTEREST COVERAGE RATIO:


TABLE SHOWING YEAR-WISE INTEREST COVERAGE RATIO
(Rs. in crores)

Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

EBIT 2114.06 1325 1146 1325 1146

Fixed Interest 87.47 77.55 164.55 77.55 164.55

Interest
Coverage 24.16 17.09 6.96 17.09 6.96
Ratio
Interest coverage Ratio
30

25

20
Interest coverage Ratio
15

10

0
2010-11 2011-12 2012-13 2013-14 2014-15

INTERPRETATION:

 As we can see the Interest Coverage Ratio for the company is decreasing on yearly
basis but still it is in the acceptable range. The reasons for the decline are
explained below
 The company‘s capital investment has increased due to expansionary plans. The
capital was raised from short term borrowings which increased the interest rates
over the years which resulted in decreased ratio.
 The profit of the company has also been reducing due to increase in raw materials
in the market
 These two factors resulted in decrease of the numerator as well as the denominator
of the formula resulting in the decrease of the ratio however it is an acceptable
value and shows the company is performing well
PROPRIETARY RATIO:

TABLE SHOWING YEAR-WISE PROPRIETARY RATIO


(Rs.in crores)

Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Share holders’
12419.91 12885.00 13229.22 13659.29 12477.32
funds

Total assets 17733.48 18523.21 19053.44 21504.84 24652.52

Proprietary
70.03% 69.56% 69.43% 63.52% 50.61%
Ratio
Proprietary Ratio
80.00%

70.00%

60.00%

50.00%
Proprietary Ratio
40.00%

30.00%

20.00%

10.00%

0.00%
2010-11 2011-12 2012-13 2013-14 2014-15

INTERPRETATION:

 The Proprietary ratio shows how its proprietors have financed its assets.
 The ratio indicates long-term solvency position of the company.
 It decreases from 70% in the year 2017-2018to 51% in the year 2022-2023.
 The shareholders fund occupied 50% on total assets. It indicates that the
proprietary ratio of VSP is not at good position.
 But the decrease in the Propriety Ratio is due to the redemption of
shareholder capital.
 The remaining 50% of the capital is being funded through outside sources,
which indicates that the outsider’s hold on the company is increasing in all
the years in consideration.
DEBT TO TOTAL FUNDS RATIO:

TABLE SHOWING YEAR-WISE DEBT TO TOTAL FUNDS RATIO


(Rs.in.crores)

Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Secured loans 907.72 387.32 274.89 931.70 274.89

1495.23 861.87
100.04
Unsecured loans 845.23 861.87 148.21 347.58
(Others) (Others)

TOTAL DEBT 1007.76 1232.55 1136.76 2575.14 1484.34

EQUITY 12419.91 12885 13229.22 13659.29 12477.32


TOTAL
13427.67 14117.55 14365.98 16234.43 13961.66
FUNDS
Debt to Total
7.5% 8.73% 7.91% 15.86% 10.63%
Funds Ratio

Debt to Total funds Ratio


18.00%

16.00%

14.00%

12.00%

10.00% Debt to Total funds Ratio

8.00%

6.00%

4.00%

2.00%

0.00%
2010-11 2011-12 2012-13 2013-14 2014-15

INTERPRETATION:

 During the year 2022-2023, the debt to total funds is 10.63%.


 This implies that although the company is in expansion phase the company mainly
relies on the short term funding to finance its needs rather than long term loans.
 There is enough scope for the company to raise long term loans from outside.

III) ACTIVITY RATIOS:


INVENTORY TURNOVER RATIO:

TABLE SHOWING YEAR-WISE INVENTORY TURNOVER RATIO


(Rs.in. crores)

Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Net sales 9128.38 9809.15 10471.18 13232.61 12110.69

AVG Inventory 1622.14 1500.68 1559.17 3328.91 3615.86

Inventory 5.62
6.53 times 6.71 times 3.98 times 3.35 times
Turnover Ratio Times
Inventory Turn over ratio
8

5
Inventory Turn over ratio
4

0
2010-11 2011-12 2012-13 2013-14 2014-15

INTERPRETATION:

 The Inventory Turnover Ratio during the year 2018-2019 was 5.62
 The ratio shows that there is an increase in the year 2018-2019 which meets the
customers demand and further there is a slight decrease in the year 2022-2023
which also satisfies the demands of the customers.
 Normally higher the ratio indicates the better stock management.
 The decrease in inventory ratio for the year 2022-2023 is mainly due to the fact
that net sales have drop for the year and coupled with a slight increase in
inventory. Although the decrease in net sales although is a worrying factor but this
should not be viewed in isolation because the decrease in sales has occurred
throughout the country across all the major steel plants. Higher ratio also indicates
that the company is able to meet the customers demand properly.
DEBTORS TURNOVER RATIO:

TABLE SHOWING YEAR-WISE DEBTORS TURNOVER RATIO


(Rs. In crores)

Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Net sales 9128.38 9809.15 10471.18 13232.61 12110.69

Average trade
191.27 181.18 330.61 378.88 718.40
Debtors

Debtors
48times 54 times 32 times 35 times 17 times
turnover Ratio
Debtors turnover ratio
60

50

40
Debtors turnover ratio
30

20

10

0
2010-11 2011-12 2012-13 2013-14 2014-15

INTERPRETATION:

 The Debtors turnover ratio for the year 2022-2023 is 17 times which is a drastic drop
compared to the previous years
 This is due to drop in net sales for the year 2022-2023 and a drastic increase in
average trade debtors
 This could point to the fact that the company has been trying to improve its sales by
extending the credit sales
 It can be concluded that the management isn’t better position in converting Debtors
into cash
AVERAGE COLLECTION PERIOD:

TABLE SHOWING YEAR-WISE AVERAGE COLLECTION PERIOD

Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Days in a year 365 365 365 365 365

Net sales 9128.38 9809.15 10471.18 13232.61 12110.69

Average trade
191.27 181.18 330.61 378.88 718.40
debtors

DEBTORS TURN
47.72 54.14 31.67 35 times 17 times
OVER RATIO
AVG.COLLECTIO
7.6days 6.7 days 11.52 days 10.4 days 21.5 days
NPERIOD

Average collection period


25

20

15
Average collection period

10

0
2010-11 2011-12 2012-13 2013-14 2014-15

INTERPRETATION:

 The average collection period during the year 2022-2023 is 21.5 days it represents
the number of days for which the firm has to wait before its receivables are
converted into cash.
 During the period of study it has been observed that debt collection period varies
from 6 to 21.5 days.
 This is due to drop in net sales and a drastic increase in average trade debtors for
the year 2022-2023.
 This could point to the fact that the company has been trying to improve its sales
by extending the credit sales.
 However, the Average collection period during different periods is quite low. It
indicates the better quality of debtors and the efficiency of the debt collection
department

WORKING CAPITAL TURNOVER RATIO:

TABLE SHOWING YEAR-WISE WORKING CAPITAL TURNOVER RATIO


(Rs. In crores)

Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Sales 10411 10634.6 11516.99 13232.61 12110.69

Net working
7678.00 5242.82 3017.72 1270.5 -206.92
capital
Working
capital 1.35 2.02 3.81 2.02 (58.5283)
turnover Times times Times times
Ratio

Working capital turnover ratio


10

0
2010-11 2011-12 2012-13 2013-14 2014-15
-10

-20 Working capital turnover ratio


-30

-40

-50

-60

-70

INTERPRETATION:

 There is a negative working capital for the year 2022-2023. Although is a


distressing but the negative working capital has been due the redemption of
preferential capital which has increased by almost 1400crores, thereby decreasing
working capital.

 The aim of this ratio is that it indicates the velocity of its utilization of working
capital.
IV) PROFITABILITY RATIOS:

A) PROFITABILITY RATIOS IN RELATION TO SALES:

GROSS PROFIT RATIO:

TABLE SHOWING YEAR-WISE GROSS PROFIT RATIO


(Rs. In crores)

Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

2115.00
Gross profit 850.99 837.80 1301 886
Net sales 9128.38 9809.15 10471.18 13232.61 12110.69

Gross profit
23.17% 8.6% 8.01% 9.83% 7.32%
Ratio

Gross profit ratio


25.00%

20.00%

15.00% Gross profit ratio

10.00%

5.00%

0.00%
2010-11 2011-12 2012-13 2013-14 2014-15

INTERPRETATION:

 It has been observed that the Gross profit ratio is in decreasing trend from 2018-
2019 to 2020-2021 and it is increasing in 2021-2022then in 2022-2023 there is a
further slight decrease.
 Net sales are in increasing trend from 2021-2022whereas the Gross profit ratio is
decreasing from 2020-2021. It is due to increased cost of production i.e., the
increasing cause raw materials coupled with an expansion of production has
further increase of the raw materials cost.
NET PROFIT RATIO:

TABLE SHOWING YEAR-WISE NET PROFIT RATIO


(Rs. In crores)

2019-
Particulars 2018-2019 2020-2021 2021-2022 2022-2023
2020

Net profit 1335.57 796.67 658.49 751 353


Sales 10410.63 10634.6 11516.99 13232.61 12110.69

Net profit
12.82% 7.49% 5.71 % 5.68% 2.91 %
Ratio

Net profit ratio


14.00%

12.00%

10.00%

8.00% Net profit ratio

6.00%

4.00%

2.00%

0.00%
2010-11 2011-12 2012-13 2013-14 2014-15

INTERPRETATION:

 Net profit is in decline position from 2018-2019 to 2022-2023.


 This is due increased finance cost and increased long term borrowing.
 Even in adverse market conditions, the company is able to earn net profits.
V) PROFITABILITY RATIOS IN RELATION TO INVESTMENT:

RETURN ON SHAREHOLDERS INVESTMENT:

TABLE SHOWING YEAR-WISE RETURN ON SHAREHOLDERS INVESTMENT


(Rs. In crores)
Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Net profit 1335.57 796.67 658.49 751 353

EQUITY 12420.00 12885.00 13229.22 13659.29 12477.32

Return on
10.75% 6.18% 4.97% 5.49% 2.83%
Investment
Return on investment
12.00%

10.00%

8.00%
Return on investment
6.00%

4.00%

2.00%

0.00%
2010-11 2011-12 2012-13 2013-14 2014-15

INTERPRETATION:

 Highest return on investment was recorded in 2018-2019.


 It has been observed that the ROI is fluctuating from year to year.
 More reserves and surplus funds have been diverted to expansion activities.
RETURN ON EQUITY CAPITAL:

TABLE SHOWING YEAR-WISE RETURN ON EQUITY CAPITAL


(Rs. In crores)

Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Net profit after


2026.59 1247.65 981.66 1247.65 981.66
interest & tax

Equity share
7827.32 7827.32 7827.32 7727.32 6346.82
capital
Return on Equity
25.89% 15.9% 12.5% 16.14% 15.46%
capital

Return on Equity capital


30.00%

25.00%

20.00%
Return on Equity capital
15.00%

10.00%

5.00%

0.00%
2010-11 2011-12 2012-13 2013-14 2014-15

INTERPRETATION:

 Equity share capital is constant from 2018-2019 to2019-2020whereas net profit is


fluctuating.
 Even though the Return on Equity capital is in decreasing position, the Rate of
Return in comparison with the marketing conditions is very satisfactory.
 Global market conditions, increase in operating costs, decrease in net profits are
the main reasons for recording of low ratio.

EARNING PER SHARE:

TABLE SHOWING YEAR-WISE EARNING PER SHARE

(Rs. In crores)

Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023


Earnings available to
Equity Shareholders 1095.00 556.89 419.51 617.00 684.00
(AFTER DIVIDEND)

No. of Equity shares


4.89 4.89 4.89 4.89 4.89
(CRORES)

EARNING PER
223.92 113.89 85.78 126.18 139.88
SHARE(RS)

Earnings per share


250

200

150 Earnings per share

100

50

0
2010-11 2011-12 2012-13 2013-14 2014-15
INTERPRETATION:
 The Earnings per share are in declining trend from 2018-2019 to2019-2020it
increases from 2021-2022to 2022-2023
 The least Rate of Return is 11.40%
 This is due to the constant payment of dividends
10% to the equity shareholders which paid from PAT
7% payment to preference shareholders from preference shareholder contribution
 Since the company is in expansion activity, the future earnings per share will
increase.

RETURN ON CAPITAL EMPLOYED:

TABLE SHOWING YEAR WISE RETURN ON CAPITAL EMPLOYED

(Rs. In crores)
Particulars 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023

Net profit 1335.57 796.67 658.49 1247.65 981.66

Capital Employed
13552.16 14215.37 14445.95 14283.23 14467.85
(TOTAL ASSETS-C.L)

Return on Capital
9.85% 5.60% 4.55% 8.74% 6.79%
Employed

Return on Capital Employed


12.00%

10.00%

8.00%
Return on capital Employed
6.00%

4.00%

2.00%

0.00%
2010-11 2011-12 2012-13 2013-14 2014-15

INTERPRETATION:
 This ratio indicates firm’s ability of generating profit per rupee of capital
employed. This ratio is decreasing gradually from 9.85% in 2018-2019 to 6.79%
in 2022-2023. The reason may be that its net profit and Capital Employed are
decreasing. So steps should be taken in this ratio

 Even though the Return on Capital Employed is declining, but it is satisfactory,


considering the present market conditions and from the security point of view
CHAPTER-VI

FINDINGS
CONCLUSIONS
SUGGETIONS
FINDINGS
 Liquidity position of the company is excellent.

 The company is zero debt/low debit company.

 The net worth of VSP is satisfactory.

 It is noted that the inventory level is increasing.

 The profitability ratio is in decline state.

 The company has accumulated funds which are available for


expanding business Operation and expansion of work.

 Security to share holders is envisaged.


SUGGESTIONS

Steel industry performance is looking like sine curve. It always has up and down
curves. During the period of inflation and recession steel sales also decreased very
high.

 The company is getting all its funds i.e. day zero (0) when the rates are
compared; the company is investing surplus funds at 8-8.5% & paying at 3-
5% to get the funds on zero (0). The spread should be maintained during the
time of expansion also.
 Unlikely any other steel company VSP is not having its own sources of raw
material i.e. coal mine. These are very basic needs as the company always
depends on its suppliers for its raw materials. Had the company utilized its
2-3% half % of its working capital limit for acquisition of mines purchasing
of mines, etc. It could have been a favorable situation
 RINL may finance expansion project by the long term loans as they would
be cheaper instead of using internal generation/Accounting rules.
CONCLUSONS

Company’s management has been working very effectively. The return on


investment is very high when compared to loans, which are being sourced at very
cheaper rate of interest. Sincere efforts should be made by the company to acquire
mines/ companies of mutual interest for better future of the organization.
Coming to the actual business scenario, working exactly in consultation of
ratios may not be possible, because the immediate interests of the company will
play a vital role. However, if some more concentration is paid, there may be
chances to improve profitability.

Other highlights
2022-2023
a) During the year the company redeemed preference share capital amounting
to Rs.1400crs which has led to liquidation of bank deposits/increased
working capital borrowings due to which the interest income has come down
and interest expenditure has gone up.
b) During the year an amount of Rs.1300crs was spent on expansion activities.
c) Depreciation in rupee against dollar impacted reduction in raw material
prices adversely by Rs.425crs as compared to previous year.
d) Power restrictions imposed by Government has led to reduction in
production of saleable steel.
2020-2021
The drop in profit levels with reference to previous year is primarily due to
increase in cost of major raw materials(iron ore 55% and coal 22%),reduction in
interest income from fixed deposits due to utilization of funds in the expansion
projects, other capital schemes and working capital needs of the company.
2019-2020
a) The increase in profit levels with respect to previous year is primarily due to
higher sales realization achieved and higher sales volume in steel and pig
iron.

b) The operating margin as a percentage of gross sales improved to 9.11% in


the year2019-2020from 8.57% in the year 2018-2019 in spite of higher input
costs.
BIBLIOGRAPHY

NAME OF THE BOOK AUTHOR


Financial Management I. M.Pandey

Financial Management Prasanna Chandra

Research Methodology Sri Kotari C.R

Accounting For S N Maheshwari, S K


Management Maheshwari

Annual Reports Of Rashtriya Ispat Nigam Limited

General Articles And Magazines Of Rashtriya Ispat Nigam Limited

Website:www.vizagsteel.com, www indianinfoline.com,

Newspapers: Deccan Chronicle, The Hindu, Eenadu.

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