PROJECT REPORT
S.RAMESH
MASTER OF BUSINESS ADMINISTRATION
Under the guidance of
TADEPALLIGUDEM.
2007-2009
Certificate
Place: Visakhapatnam
Mr.A.JAMMAYA
Date: Manager,
F&A
Department
STUDENT’S DECLARATION
Earlier.
(S.RAMESH)
ACKNOWLEDGEMENT
(S.RAMESH)
PREFACE
The report has been divided into five chapters and the
arrangements of topics in various chapters have been grouped
according to the analysis of the subject.
CONTENTS
CHAPTER I INTRODUCTION
⇒ Introduction
⇒ Scope of the study
⇒ Objective of the study
⇒ Methodology of the study
⇒ Limitations of the study
INTRODUCTION
The focus of the study is an analysis of the financial performance of rashtriya ispat
nigam ltd. By using working capital management, which is widely used technique of
management. This evokes the interest and need for the study.
Financial instruments through which funds area raised from the capital
market and the related aspects of capital market.
The legal and accounting relationship between a firm and its sources of
funds. These decisions were assumed to be given to him, and one was requiring rising the
needed funds from a combination of various sources.
The scope of the study is confined to one of the key areas of finance i.e. inventory
management, which plays a vital role in the working capital management. The study
concentrates on the methods and techniques followed by Rashtriya Ispat Nigam ltd. For its
inventory management and its relative merits and demerits. This present study also
concentrates on the importance of inventory management for effective management of
working capital management of the company.
The data required for the study inventory management and its impact
on working capital is collected from the past six year’s published annual reports of the
company.
To ensure that each of the current assets is efficiently managed to ensure the
overall liquidity of the unity and at the same time not keeping too high level of any one of
them working capital management is a must. Working capital management ensures
smooth working of the unit with out any production held ups due to the paucity of funds.
Thus as working capital is the life blood and nerve centre of a business. It is managed in
order to attain a smooth running of the business.
Keeping in the view of above facts and figures of the following are the
objectives of the study.
1. Primary data
2. Secondary data
PRIMARY DATA: It is the information collected directly with out any references. In this
study it is gathered through interviews with concerned officers and staff, either
individually and collectively, sum of the information has been verified and supplemented
with personal observation conducting personal interviews with the concerned officers of
finance department of VSP.
SECONDARY DATA: It is the information collected from already published sources such as
pamphlets of annual reports, returns and internal records. The data collection includes:
LIMITATIONS OF STUDY:
The limitations that came across during the course of this work are listed below:
• The entire study is based on only financial data i.e. provided by the company
financial statements.
• The smaller time i.e. eight weeks are available for understanding this study is one
of the significant limitations of the study.
• These calculations may not be future indicators.
• The study is purely based on the date available in the form of annual reports.
• As VSP is multi product manufacturing unit the cycle time of each product varies
and it could be a problem to study the working capital management in a limited
period.
• Since the procedures and policies of the company do not allow disclosing of all
financial information the project has to be completed with the available data
collected with maximum effort.
• Some aspects of financial information were not available because of the
confidentiality of VSP.
MILE STONES OF VSP
26-02-1982
18. 01-02-1982 Zero date of the construction of the
project.
19. 18-02-1982 Rashtriya Ispat Nigam Limited (RINL)
formed
20. 29-01-1987 Commissioning of structural shop. With
this commissioning of various auxiliary
units commenced.
21. 06-09-1989 Coke oven battery No.1 started pushing
of coke. With this the commissioning of
metallurgical units started.
22. 14-11-1989 Sinter plant commissioned.
MISSION
To attain 16 million ton liquid steel capacity through technological up
gradation, operational efficiency and expansion to produce steel at
international standards of cost and quality and to meet the aspirations
of the stakeholders.
VISION
OBJECTIVES
Expand plant capacity to 6.3 Mt by 2008-09 with the mission to
expand further in subsequent phases as per the corporate plan.
Sustain gross margin to turnover ratio > 25%
Be amongst top five lowest cost liquid steel producers in the world
by 2009-10
Achieve higher levels of customer satisfaction than competitors
Instill right attitude amongst employees and facilitate them to
excel in their professional personal social life
Be recognized as an excellent business organization by 2008-09
Be proactive in conserving environment, maintaining high levels of
safety and addressing social concerns
CORE VALUES
Commitment
Customer satisfaction
Continuous improvement
Concern for environment
Creativity & Innovation
POLICIES IN VSP
QUALITY POLICY:
Visakhapatnam steel plant is committed to meet the needs
and expectations of their customers and other interested parties. To
accomplish this, they will
ENVIRONMENT POLICY:
HR POLICY:
Visakhapatnam steel plant, believe that its employees are the most
important resources to realize the full potential of employees, the
company is committed to:
CUSTOMER POLICY:
IT POLICY:
Canteen facilities
Baby crèche
First aid facilities
Water coolers
Leave facilities
Maternity Leave
Factories Act
Gratuity facilities
Workmen’s compensation
Contract Labour welfare
Education facilities
Scholarships
Medical facilities
Medical Reimbursement
Housing Facility
Work dress
Vehicle advances to employees
House building advance
Motivational schemes
- Awards
- Jawahar Suggestion Rewards
- Gnana puraskar yojana(GPY)
- Icentive schemes
Ltc\Lltc
Leave encashment
Facilities for recreation
- Community welfare centers (cwcs)
- Library
- Ukkunagaram club and steel club
- Parks
- Sports facilities
- Sports complex
- hostel grounds
- cultural and trekking activities
- co-operatives
- employees consumers co-operative stores
-
The efforts of vsp have been recognized in various for a. some of the
major awards received by vsp are in the area of energy conservation,
environment protection,safety,quality, quality circles, rajsabha ,MOU,
sports related awards.
Year Award Purpose
BF dolomite Madharam, AP
Billets
Coke dust, lime
fines.
Channels
Rounds Benzene.
Re-bars Toluene.
Wash oil.
PRODUCTION PERFOMANCE (000 TONNES)
FINANCIAL PERFORMANCE
INDUSTRIAL PROFILE
1899: Jamshedji tata initiated the scheme for an integrated steel plant.
1961-66: (Third five year plan) During the third five year plan the three
steel plants under HCL, TISCO and HSCO were expanded as shown.
GLOBAL SCENARIO
As per IISI
MARKET SCENARIO
The year 2004-05 was a remarkable one for the steel
industry with the world crude steel production crossing the one billion
mark for the first time in the history of the steel industry. The world
GDP growth about 4% lends supports to the expectations the steel
market is all set for strong revival after prolonged period of depression.
The Indian economy also become robust with annual growth rates of 7-
8% this will provide a major boost to the steel industry. With the
nations focus on infrastructure development coupled with growth in
the manufacturing sector, the Indian steel industry all set for north
ward movement. The draft national steel policy envisages production
of 60mt by 2012 and 110mt by 2020, the annual growth rate of 6-7%.
All this should therefore augur well for the Indian steel industry.
INTRODUCTION:
Working capital management is concerned with the problems that arise in
attempting to manage the current assets, the current liabilities and the inter relation ship
that exists between them .The term current assets refer to those assets which in the
ordinary course of business can be, or will be, converted into cash with in one year
without undergoing a diminution in value and with out disrupting the operations of firm.
The major current assets are cash, marketable securities, accounts receivable and
inventory. Current liabilities are those liabilities which are intended, at there inception, to
be paid in the ordinary course of business, with in a year, out of the current assets or
earning of the concern. The basic current liabilities are account payable, bills payable;
bank over draft, and outstanding expenses, the goal of working capital management is to
manage the firm’s current assets and liabilities in such way that a satisfactory level of
working capital is maintained.
2. Working capital
Every business needs funds for two purposes for its establishment and to carry out
its day operations. Long-term funds are required to create production facilities trough
purchases of fixed assets such as plant and machinery, land, building, furniture etc.,
Investments in these assets represent that part of firm’s capital which is blocked on a
permanent or fixed basis and is called fixed capital. Funds are also needed for short-term
purposes for the purchased for the purchase of raw material, payment of wages and other
day –to-day expenses etc.., these funds are known as working capital.
Definition:
In the words of shubin “working capital is the amount of funds necessary to
cover the operating the enterprise”.
THE NET WORKING CAPITAL concept is an accounting concept, which refers to the
arithmetic difference between current assets and current liabilities of a business concern.
It is defined as “the difference between the book value of the current assets and current
liabilities”. The net working capital indicates.
(a) The liquidity position of the firm, and (b) suggests the extent to which working needs
maybe financed by permanent sources of funds. An alternative definition of networking
capital is that portion of firm’s current assets financed with long term funds.
These two concepts of working capital are not mutually exclusive rather have equal
significance from the management point of view and represent two important two
important facets of the working capital management.
1. Inventories: including stocks of raw material and components, work- in- progress,
finished goods and factory supplies, packing and shipment materials, office
supplies etc.,
2. Loans and advances and other Balances: Include Sundry Debtors, Bills receivable
and others including loans and advances, prepaid expenses etc.,
2) Bills receivable
a. Raw materials
b. Work-in-progress
d. Finished goods
7) Prepaid expenses
8) Accrued income
In narrow sense the term working capital refers to the net working capital.Net
working capital is the excess of currents assets over current liabilities(or)
Gross working capital= Current assets total
Net working capital may be positive or Negative. When the current assets exceed the
current liabilities the working capital is positive and the negative working capital results
when the current liabilities are more than the current assets. Current liabilities are those
liabilities which are intended to be paid in the ordinary course of business with in a short
period of normally one accounting year out of the current assets or the income of the
business.
Current Liabilities are those, which are expected to fall due or nature of payment
in short period of one year, and they represent short-term sources of funds they include
1. Short-term borrowings: include bank borrowings other than those against own
debentures and other mortgages.
2. Trade creditors and other liabilities Sundry creditors, outstanding expenses and
advances received.
5. Dividends payable
6. Bank overdrafts
The firm needs extra funds and hence the need for working capital. If this is not
provided the business operations will be effected to a greater extent and hence this
past of finance has to be managed well.
3. To incur day-to-day expenses and overhead cost such as fuel, power and office
expenses, etc.,
2. Goodwill.
3. Easy loans.
4. Cash discounts
Production policy
Seasonal variations
Credit policy
Business cycles
Other factors
The working capital requirements of a firm basically depend upon the nature of
its business. Public utility undertakings like electricity, water supply and railways need
very limited working capital because they offer cash sales only and supply services, not
products, and as such no funds are tied up is inventories and receivables.
PRODUCTION POLICY:
SEASONAL VARIATIONS:
In certain industries raw material is not available through out the year. They
have to buy raw materials in bulk during the season to ensure blocked in the form of
material inventories during such season, which gives rise to more working capital
requirements, generally during he busy season, a firm requires larger working capital than
in the slack season.
In manufacturing concern, the working capital cycle starts with the purchase of raw
materials and ends with the realization of cash from the scale of finished products. This
cycle involves purchase of raw materials and stores its conversation into stocks of
finishing goods through work-in-progress.
CREDIT POLICY:
The credit policy of a concern in its dealing with debtors and creditors
influence considerably the requirements of working capital. A concern that purchases its
requirements on credit and sells its products/services on cash requires lesser amount of
working capital.
BUSINESS CYCLES:
Business cycle refers to alternate expansion and contraction in general business activity.
In the period of boom i.e. when the business is prosperous, there is a need for larger
amount of working capital due to increase in sales, raise in prices, optimistic expansion of
business etc.
The working capital requirements of a concern increase with the growth and
expansion of its business activities. Although it is difficult to determine the relation ship
between the growth in the volume of business and the growth in the working capital of
business.
OTHER FACTORS:
The basic goal of working capital management is to manage the current assets
and current liabilities of a firm in such a way satisfactory level of working capital is
maintain, i.e. ., it is neither inadequate nor excessive.
ii. Dimensions II is concerned with the decision about the composition and level of
current assets.
iii. Dimension III is concerned with the decision about the composition and level of
current liabilities.
Risk here refers to the inability of a firm to meet its obligations as and when
they become due for payment. Larger investment in current assets with less dependence
on short term borrowings increases liquidity reduces risk and there by decreases the
opportunity for gain or loss. On the other hand less investment in current assets with
greater dependence on short term borrowings increases risk, liquidity and increases
profitability .In other words, there is a definite direct relationship between the degree of
risk and profitability.
The various sources of raising working capital finance have different cost of
capital and the degree of risk involved. Generally, higher the risk lower is the cost and
lower the risk higher is the cost. A sound working capital management should always try
to achieve a proper balance between these two.
The principle is concerned with planning the total investment in current assets.
According to this principle, the amount of working capital invested in each component
should be adequately justified by a firm’s equity position. Every rupee invested in the
current assets should contribute to the net worth of the firm. The level of current assets
may be measured with the help of two ratios (I) current assets as a percentage of total
assets and (II) current assets as a percentage of total sales while deciding about the
composition of current assets, the financial manager may consider the relevant industrial
averages.
This principle is concerned with planning the sources of finance for working
capital. According to this principle, a firm should make every effort to relate maturities of
payment to its flow of internally generated funds. Maturity pattern of various current
obligations is an important factor in risk assumptions and risk assessments. Generally
shorter the maturity schedule of current liabilities in relation to expected cash in flows the
greater the in ability to meet its obligations in time.
To regulate and control bank finance, the Reserve Bank of India has been issuing
directives and guidelines to the banks form time to time on the recommendations
of certain specially constituted committees entrusted with the task of examining
various aspects of bank finance to industry.
1. Dehejia committee
2. Tendon committee
3. Chore committee
4. Marathe committee
5. Chakravarty committee
6. Kannam committee
RATIO ANALYSIS
INTRODUCTION:-
The ratio analysis is one of the most powerful tools of financial analysis.
It is the process of establishing and interpreting various ratios (quantitative
relationship between figures and groups of figures). It is with the help of ratios that
the financial statements can be analyzed more clearly and decisions made from
such analysis.
MEANING OF RATIO:
A ratio is a simple arithmetical expression of the relationship of one
number to another. It may be defined as the indicated quotient of one numbers”.
According to Kohler, a ratio is the relation, of the amount, a to another b,
expressed as the ratio of a to b; a: b (a is to b); or as a simple fraction, integer,
decimal, fraction or percentage. In simple language ratio is one number expressed
in terms of another and can be worked out by the dividing one number into the
other.
1. Selection of relevant data from the financial statements depending upon the
objective of the analysis.
3. Comparison of the calculated ratios with the ratios of the same firm in the past,
or the ratios developed from projected financial statements or the ratios of the
some other firms or the comparison with ratios of the industry to which the firm
belongs.
6. Personal bias.
7. Uncomparable
I. Limited use of a single ratio: A single ratio, usually, does not convey
much of sense. To make a better interpretation a number of ratios
have to be calculated which is likely to confuse the analyst than help
him in making any meaningful conclusion.
VI. Personal Bias: Ratio are only means of financial analysis and not an
end in itself. Ratios have to be interpreted and different people may
interpret the same ratio in difficult ways.
VII. Incomparable: Not only industries differ in their nature but also the
firms of the similar business widely differ in their sixe and account
ion procedures, etc. It makes comparison of ratios difficult and
misleading. Moreover, comparisons are made difficult due to
differences in definitions of various financial terms used in the ratio
analysis.
1. Liquidity Ratios
2. Leverage Ratios
3. Activity Ratios
4. Profitability Ratios
LIQUIDITY RATIOS:
1. Current ratio
2. Quick ratio
TURNOVER RATIOS:
1. Capital turnover ratio
B. CURRENT LIABILITIES:
Sundry Creditors
Advances from customers
Other advances
Earnest money, security &
other deposits
Interest accrued but not due
Other liabilities
Provisions
TOTAL CURRENT LIABILITES
Which one better letter of credit or bank guarantees and when will we
receive our amount from them.
A letter of credit means you have found a creditor that is willing to loan
you a certain amount. You don’t receive that amount in cash to do what ever you please
with, but it will be a loan tied into some type of collateral ( usually you only here this
term with mortgages).
A bank guarantee and a letter of credit are similar in many ways but they
are two different things. The main difference between the two credit security instruments
is the position of the bank relative to the buyer and seller of a good, service or basket of
goods or services in the event of the buyer’s default of payment. These financial
instruments are often used in trade financing when suppliers, or vendors, are purchasing
and selling goods to and from overseas customers with whom they don’t have established
business relationships.
6 Indian 100.0 0.00 100.00 0.00 100.00 300.0 50.0 350.00 450.00
Overseas 0 0 0
Bank
7 Andhra 14.00 21.00 35.00 11.50 46.50 45.00 3.00 48.00 94.50
bank
8 SBI 225.0 0.00 225.00 0.00 225.00 500.0 50.0 550.00 775.00
0 0 0
9 Allahabad 25.00 0.00 25.00 15.00 40.00 90.00 5.00 95.00 135.00
bank
10 HSBC 0.00 0.00 0.00 0.00 0.00 50.00 0.00 50.00 50.00
11 IDBI 0.00 0.00 0.00 0.00 0.00 50.00 0.00 50.00 50.00
WCDL: WORKING CAPITAL DEMAND; CC : CASH CREDIT
A) CURRENT ASSETS
Inventories 1761.15 1203.24
sundry debtors 93.41 216.8
cash bank balance 7699.11 7194.68
Loans advances 1958.49 1518.9
Other current assets 292.43 314.48
TOTAL CURRENT ASSETS 11804.59 10448.10
B) CURRENT LIABILITIES
sundry creditors 501.31 365.83
advance from customers 136.97 119.91
Other advances 1.57 2.02
earnest money, security and other
deposits 99.32 82.54
Interest accrued but not due 4.89 18.41
other liabilities 866.09 422.82
Provisions 1581.47 1092.77
TOTAL CURRENT LIABILITIES 3191.62 2104.30
INTERPRETATION:
From the above table it shows that there is an increase is net working capital
during the year 2007-08 by rs 269.17 crores in comparison to the previous year
2006-07. During the year 2007-08 it is 8612.97 crores, where as it was rs 8343.8
crores only for the year 2006-07.
The total assets and liabilities during the year 2007-08are rs 11804.59 crores and
rs 3191.62 crores and during the year 2006-07 are rs 10448.10 crores and rs
2104.30 crores respectively.
The net increase in current assets during the year 2007-08 is 1356.49 crores in
comparison to the previous year 2006-07.
The net increase is current liabilities during the year 2007-08 is rs 1087.32
crores in comparison to the previous year 2006-07.
A) CURRENT ASSETS
Inventories 1203.24 1218.35
sundry debtors 216.80 166.27
cash bank balance 7194.68 5621.70
Loans advances 1518.9 1061.32
Other current assets 314.48 184.36
TOTAL CURRENT ASSETS 10448.10 8252.00
B) CURRENT LIABILITIES
sundry creditors 365.83 275.04
advance from customers 119.91 120.19
Other advances 2.02 1.60
earnest money, security and other
deposits 82.54 68.89
Interest accrued but not due 18.41 8.43
other liabilities 422.82 397.34
Provisions 1092.77 716.37
TOTAL CURRENT LIABILITIES 2104.30 1587.86
INTERPRETATION:
From the above table it shows that there is an increase in net working capital
during the year 2006-07 by rs 1593.94 crores in comparison to the previous tear
2005-06. During the year 2006-07 it is rs 8343.8 crores, where as it was rs 6749.86
crores only for the year 2005-06.
The total assets and liabilities during the year 2006-07 are rs 10448.10 and 21.4.30
crores and during the year2005-06 are rs 8252.00 and 1502.14 crores respectively.
The net increase in current assets during the year 2006-07 is 2196.10 crores in
comparison to the previous year that is 2005-06.
The net increase in current liabilities during the year 2006-07 is rs 602.16 crores in
comparison to the previous year that is 2005-06.
During the year 2006-07 the overall performance of the company is satisfactory.
WORKING CAPITAL STATEMENT OF RINL 2005-06
A) CURRENT ASSETS
Inventories 1261.45 1257.53
sundry debtors 165.65 49.30
cash bank balance 5621.70 3932.61
Loans advances 1063.84 710.12
Other current assets 184.36 100.18
TOTAL CURRENT ASSETS 8252.00 6049.74
B) CURRENT LIABILITIES
sundry creditors 275.04 660.81
advance from customers 120.19 102.90
Other advances 1.60 4.64
earnest money, security and other
deposits 68.89 51.20
Interest accrued but not due 8.43 2.39
other liabilities 397.34 332.94
Provisions 716.37 269.27
TOTAL CURRENT LIABILITIES 1587.86 1424.14
INTERPRETATION:
From the above table it shows that there is an increase in net working capital
during the year 2005-06 by rs 1596.13 crores in comparison to the previous year
2004-05. During the year 2005-06 it is rs 6664.14 crores, where as it was rs
5068.01 crores only for the year 2004-05.
The total assets and liabilities during the year 2005-06 are rs 8252.00 and 1587.86
crores and during the year 2004-05 are rs 6049.74 crores and 981.73 crores
respectively.
The net increase in current assets during the year 2005-06 is rs 2202.26 crores in
comparison to the previous year that is 2004-05.
The net increase in current liabilities during the year 2005-06 is rs 606.13 crores in
comparison to the previous year that is 2004-05.
During the year 2005-06 the over all performance of the company is satisfactory.
WORKING CAPITAL STATEMENT OF RINL 2004-05
A) CURRENT ASSETS
Inventories 1255.30 706.34
sundry debtors 49.30 85.61
cash bank balance 3932.60 1359.71
Loans advances 710.12 550.70
Other current assets 100.16 24.3
TOTAL CURRENT ASSETS 6047.48 2726.66
B) CURRENT LIABILITIES
sundry creditors 660.81 470.76
advance from customers 102.90 210.96
Other advances 4.63 0.75
earnest money, security and other
deposits 51.20 57.22
Interest accrued but not due 2.39 1.14
other liabilities 332.94 337.99
Provisions 269.27 156.51
TOTAL CURRENT LIABILITIES 1424.14 1235.33
INTERPRETATION:
From the above table it shows that there is an increase in net working capital
during the year 2004-05 by rs 3132.01 crores in comparison to the previous year
20003-04.During the year 2004-05 it is rs 4623.34 crores, where as it was rs
1491.33 crores only for the year 2004-05.
The total assets and liabilities during the year 2004-05 are rs 6047.48 crores and
1424.14 crores and during the year 2003-04 are rs 2726.66 crores and 1235.33
crores respectively.
The net increase in current assets during the year 2004-05 is rs 3320.82 crores in
comparison to the previous year that is 2003-04.
The net increase in current liabilities during the year 2004-05 is rs 188.81 crores in
comparison to the previous year that is 2003-04.
During the year 2004-05 the overall performance of the company is satisfactory.
CURRENT RATIO:-
CURRENT RATIO = CURRENT ASSETS/ CURRENT LIABILITIES
CURRENT
RATIO
2.20 4.25 5.20 4.97 3.70
CURRENT RATIO
c u rre n t ra tio
4
C U R R E N T R A TIO
a m o u n3t
0
1 2 3 4 5 6
y e a rs
w o rk in g c a p ita l tu rn o v e r ra tio
3.5
3
2.5
amount
2
1.5
1
0.5
0
1 2 3 4 5 6 7 8 9
ye a rs
GROSS WORKING CAPITAL
YEAR
GROSS WORKING
CAPITAL (in crs)
2003-04 2,726.66
2004-05 6,047.48
2005-06 8,252.00
2006-07 10,448.10
2007-08 11,804.59
YEAR
NET WORKING
CAPITAL (IN
CRS)
2003-04 1,491.33
2004-05 4,623.34
2005-06 6,664.14
2006-07 8,343.80
2007-08 8,612.97
10000
8000 Series1
Series2
6000
Series3
4000
Series4
2000 Series5
0 Series6
0 5 10
• It is also heard that the reason why the stock is lying more in quantity
in the list of current assets because of the high prices for the steel in
the market.
• Even after at the request of the customers the prices are not at all being
cheated by the mgt which resulted in the poor customer relationships
which resulted in the decrease of turn over.
• The company has been maintaining the ideal current ratio during the
year 2003-04 but during the year 2004-05 and 2005-06 it has
maintained its current ratio more than the ideal one which represents
that the company has blocked up the capital in the current assets than
the require one.
• During the year 2007-08 the company has followed the policy of
maintaining an ideal current ratio
• During the five years of i.e., from 2003-04 to 2007-08 the gross
working capital has been steadily increasing year by year.
• It is observed that the cash and bank balances constitute for more
percentage in the total current assets every year.
• From the director’s report presented in the 26th annual general meeting
it has come to know that the company has sufficient resources to
finance its expansion project.
• As per the international iron and steel institute (IISI) report, the total
production quantity represents the highest level of crude steel output in
history and it is the 5th consecutive year that the world steel production
grew by more than 7%.
• During the year 2007-08 India reached the 5th rank among the top steel
producing countries by producing 53 million tonnes.
• After analyzing the 26th annual report i.e., for the year 2007-08 it has
been found that the company was recertified for ISO 14001:2004
which is valid till 2010.
• During the period of study it is also concluded that the company has
been implementing certain things like the use of Hindi language in
carrying out official work in the company in order to prompt the
national integrity.
• With the help of past records of the company it is observed that the
levels of income have been increasing tremendously during the decade
i.e., the income for the year 1998-99 was Rs 2958 crores where as it is
Rs 11337 crores for the current year.
• How ever, the overall performance of the company during the period
of study is much satisfactory.
BIBLOGRAPHY
Books referred:
Essentials of financial management I.M.Pandey
Website :- www.vizagsteel.com
Search engine :- Google search
• During the year 2007-08 India reached the 5th rank among the top steel
producing countries by producing 53 million tonnes.
• With the help of past records of the company it is observed that the levels of
income have been increasing tremendously during the decade i.e., the income
for the year 1998-99 was Rs 2958 crores where as it is Rs 11337 crores for
the current year.
• It is recommended to put a check upon the prices of the steel ( if possible ) ,
as there is an economic recession during the current year.
• Instead of blocking most of its funds in the current assets it is advisable for
the company to reduce the value of current assets to some extent and to
invest it in some invest mental activities.
• The company has to put a regular check upon it inventory level to avoid the
locking of the capital in the inventories.
• How ever, the overall performance of the company during the period of
study is much satisfactory.
• The debt equity ratio is low. It indicates that the company has not been able to
use the outsider’s funds to magnify their earnings. Hence the company has to
increase its debt content in its capital structure so as to increase its earning per
share.
• The increase in the interest coverage ratio shows that the firm has improved its
ability to a greater extent in handling fixed charge liabilities.
• The increase in inventory and debtors turn over ratios shows the efficiency of
the firm in managing the inventories and debtors. But the company has to
increase its credit sales so as to improve its further sales and profits.
• The increase in the gross profit is due to the increase in sales. The company
may put some more special efforts to further consolidate its position by
concentrating on more market share.
• The reason for the company to have less net profit is due to the increase in its
expenditure and operating expenses. The company must have to increase its
net profit by reducing its operating expenses.
• During the period of study, it is observed that, the return on capital employed
is decreasing year by year, which is not a good sign of performance or it
implies that, the company is unable to utilize the available capital effectively.
• From the director’s report presented in the 26th annual general meeting
it has come to know that the company has sufficient resources to
finance its expansion project.
• As per the international iron and steel institute (IISI) report, the total
production quantity represents the highest level of crude steel output in
history and it is the 5th consecutive year that the world steel production
CERTIFIED MAILSubject:During the year 2007-08 India reached the
5th rank among the top steel producing countries by producing 53
million tonnes.
• After analyzing the 26th annual report i.e., for the year 2007-08 it has
been found that the company was recertified for ISO 14001:2004
which is valid till 2010.
• During the period of study it is also concluded that the company has
been implementing certain things like the use of Hindi language in
carrying out official work in the company in order to prompt the
national integrity.
• With the help of past records of the company it is observed that the
levels of income have been increasing tremendously during the decade
i.e., the income for the year 1998-99 was Rs 2958 crores where as it is
Rs 11337 crores for the current year.
• How ever, the overall performance of the company during the period
of study is much satisfactory.