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FINANCIAL PERFORMANCE

FINANCIAL PERFORMANCE

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A STUDY ON FINANCIAL PERFORMANCE

(with special reference to RASHTRIYA ISPAT NIGAM LIMITED, Visakhapatnam)

A project report submitted to JNT University, Kakinada in partial fulfillment for the award of the Degree of MASTER OF BUSINESS ADMINISTRATION

By SITARAM.T Regd.No: 09PD1E0043

Under the guidance of Mr.M.Gangunaidu, M.A (Eco), M.B.A (Finance), (MHRM) Asst. Professor, Dept. of MBA Vignan’s Institute of Information Technology

Department of Management Studies VIGNAN’S INSTITUTE OF INFORMATION TECHNOLOGY
(Approved by AICTE and Affiliated JNT University) VISAKHAPATNAM 2008-2010

DECLARATION

I hereby declare that this project work entitled “A Study on Financial Performance” in RASHTRIYA ISPAT NIGAM LIMITED. Submitted by me to the JNT University, Kakinada in partial fulfillment for the award of Degree of MBA is entirely based on my own study is being submitted for the first time and it has not been submitted to any other university or institution for any degree or diploma

(Kanaka Mahalakshmi I)

CERTIFICATE

This is to certify that the project report titled “A Study on Financial Performance” in RASHTRIYA ISPAT NIGAM LIMITED is being submitted by Kanaka Mahalakshmi.I in partial fulfillment for the award of the Degree of MBA has been carried out by his under my guidance and supervision.

Mr. J.Edukondala Rao (Head of the Department)

Mr. M.Gangunaidu (Project Guide)

ACKNOWLEDGEMENTS I express my sincere thanks to my project guide Mr. I am also thankful to our beloved Principal Prof.Ramjee for giving me the permission to carry out the project work.J. M. who is my project guide and who has been a constant source of inspiration for me throughout the study of the project. Asst Manager (F&A). I am also thankful to our Head of the Department Mr. Visakhapatnam. of Visakhapatnam Steel Plant.M. I also express my gratitude and heartfelt thanks to my company guide Mr. Edukondala Rao and all other faculty members who helped me directly and indirectly for the successful completion of my project work.Gangunaidu for his valuable guidance and cooperation throughout the project work. (Kanaka Mahalakshmi I) . Ramesh Kumar. Finally I would like to express my gratitude and thanks my parents and friends whose unremarkable encouragement had helped me throughout my educational endeavor and to do this project work.

Economy of any country depends on the strong base of the iron and steel industry. Steel is a versatile material with multitude of useful properties making it indispensable for furthering and achieving continuing growth of the .CONTENTS Declaration Certificate Acknowledgements Contents CHAPTER-I CHAPTER-II CHAPTER-III CHAPTER-IV INTRODUCTION ORGANISATION PROFILE THEORETICAL FRAMEWORK DATA ANALYSIS AND SUMMARY AND INTERPRETATION CHAPTER-V SUGGESTIONS Bibliography Introduction Chapter-1 INTRODUCTION Steel comprises one of the most important inputs in all sectors of the economy.

manufacturing. It deals mainly with raising funds in the most economic and suitable manner. The level of steel consumption has long been regarded as an index of industrialization and economic maturity attained by country. planning future operations and controlling current performance and future developments through financial accounting. directing and controlling the financial activities of an enterprise. both receipts and payments. The growth of any organization depends on the overall performance such as production. cost accounting. using these funds as profitably as possible. opportunities and threats of the organization with respect to profits Earned. Finance plays an important role in any organization. human resource and financial performance of the organization. the integrated steel plants with foreign collaborations were set up in the public sector in the post independence era. investments. weakness. turnover. budgeting. Efficient management of financial resources and deliberate analysis financial results are prerequisites for success of an enterprise.economy-be it construction. Financial management involves the management of finance function. The function of finance is not arranging funds for the business organization but also it includes planning. The financial performance of any organization reflects the strengths. allocation of funds and financial control. raising the funds. and net worth of capital. organizing. It is . Financial statements are the basis for decision making by the management and as well as all other outsiders who are interested in the affairs of the firm. Keeping in view the importance of steel. It is concerned with the planning. sales realization. forecasting of cash flow. Hence the name financial management could be referred to as money management. statistics and other means. The dictionary meaning of finance is money affairs or the art of managing or administrating the public money. infrastructure or consumable. return on investment. marketing.

profit and loss account and other operative data. Need for the Study: There is a special role of every industry barring up on the need essentiality where everything has to be done in accordance with standards that are regulated by the government. as this is necessary for survival and the attracting of new capital.. cost of capital from each source etc. and comparison of the capital structure with that of similar companies. There are various methods or techniques used in analysis financial statements such as comparative statements. The financial manager assesses the financial position of the company through the working out of the return on capital. schedule of changes in working capital. debt-equity ratio. 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.continuously with achieving an adequate rate of return on investment. The main aim of any firm is to maximize the wealth of the . Introduction to Financial Analysis: The terms ‘financial analysis’ also known as analysis and interpretation of financial statements refers to the process of determining financial strength and weaknesses of the firm by establishing strategic relationship between the items of the balance sheet.. funds flow and cash flow analysis – Cost Volume Profit Analysis and Ratio Analysis. common size statements. cost and control considerations are properly balanced in a given situation and there is optimum utilization of funds. both in short period and long period. The financial manager estimates the total requirements of funds. trend analysis. The financial manager must see that the funds are procured in a manner that the risk.

Objectives of the Study:  To know about Rashtriya Ispat Nigam Ltd . the study is all about analyzing. Which in turn depend on successful sales activity? To generate sales. how this has been possible for a company whose figures were budgeted to negative show finally ended with high positively. Here in this project an attempt is made by financial statements for knowing the financial performance of the company. Especially VISAKHAPATNAM STEEL PLANT has emerged from loss to profit making company. conceptual idea is not only sufficient but also it needs a wide knowledge and understanding of the factors that are affecting them. The need of current assets should be emphasized. To understand this. namely operating cycle. investment of sufficient funds in current assets is required. The capital required by each department in a large organization like RINL depends on the product target for that year.profits. Now. Rashtriya Ispat Nigam limited is a multi-product steel-manufacturing unit with varying cycle time for each product. as the sales don’t convert into cash immediately but involved a cycle of operations.

Long-term Financial Planning  To know the ability of the firm to meet its current obligations  To know the overall operation efficiency and performance of the firm  To find out foremost important Financial Decisions  To know the detailed information about comparative and common size balance sheets  To examine profitability position of RINL.  To know about steel scenario in India and world Research Methodology: . To know the current position of various assets. liabilities and results of operation activities  To find out Financial Strengths and weaknesses of the firm  To know the Liquidity Position of a firm  To know the causes of changes in the Cash Position  To find out important tools of Short-term. during the year 2004-2005 to 2008-2009.

returns and internal records. sums of the information has been verified or supplemented with personal observation conducting personal interviews with the concerned officers of finance department of Visakhapatnam steel plant. In this study it is gathered through interviews concerned officers and staff either individually or collectively. Secondary data:The secondary data was collected from already published sources such as. . pamplets of annual reports.Methodology is a systematic procedure of collecting information in order to analyze and verify a phenomenon. Reference from textbooks and journals relating to financial performance and management. The data collection includes:• • Collection of required data from annual records of RINL. They are as follows:-  Primary data  Secondary data Primary data:It is the information collected directly without any references. The data can be collected through two principle sources.

Data Sources: DATA SOURCES PRIMARY SOURCES SECONDARY SOURCES INSIDE THE MANAGEMENT RESPONDENTS COMPANY OUTSIDE THE COMPANY ANNUAL PERSONAL OBSERVANCE REPORTS TEXT BOOKS. JOURNELS .

Limitations of the Study:  The period of study that is 6 weeks as not enough to go in the detailed aspects of the study.  Respondents may not provide accurate information due to various reasons.  There was no scope of gathering current information as the auditing has not been done at the time of project work. .  Budgeting process is very dynamic.  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.  Most of the matters related to budgets were confidential so it is not possible to gather information.  Time is a major constraint.

. The great investment that has gone into the fundamental research in iron and steel technology has helped both directly and indirectly in many modem fields of today's science and technology.  It has got very good strength coupled with density and malleability. The versatility steel can be traced mainly of three reasons. Steel is versatile and indispensable item. Steel is versatile and indispensable item. to have machine structure. which can be continently and economically produced. . railway materials. pins. automobile parts. in large quantities. It would have been very painful to imagine the fate of today's civilization if steel has not been there. ship fabrication. The steel industry plays a vital role in the growth of nation's economy. agriculture implements boilers. etc. In this context a number of steel plants were setup.  It is only metallic item. needles etc. The versatility steel has not been there. Realizing these countries planners have been formulating and updating annual plans for production of iron and steel.Chapter-II Organisat ion Profile Chapter-2 ORGANISATION PROFILE Steel industry is the back bone of all industrial commercial activities. Steel is such a versatile commodity that every object we see in our day to day life has used steel either directly or indirectly in its product To mention a few it is used for such small items as nails.

opportunities and threats of the organization with respect to profits earned. returns on investment. The government is also helping the steel industries in this basis. The four aspects of "Waste Management” namely. The Indian companies cannot spend more for pollution control. where the steel industry was never expected to generate profit from business. energy and labor in Indian steel industry are much low than developed countries. India's Steel Scenario: Indian steel industry has always remained isolated and protected by government. net worth of capital. the integrated steel plants with foreign collaborations were setup in the public sector in the post-independence era. The growth of any organization depends on the over all performance such as production. The country's aim is to sell quality steel. The energy consumption per tone is 50-100% higher than that of the international norms. The production is growing on properly. The apparent consumption of steel . The existing equipment. Keeping in view the importance of steel. recycle and recovery do not hold much ground in the Indian steel industry. Its properties can be changed over a wide range. The Indian steel industries have developed a bit in the recent years. weaknesses. marketing. but was expected to provide employment to the unemployed. sales realization. which can cause environmental problems. It alloys easily with many of the common element. Many techniques are being implemented in the steel industries. investments.residue reprocess. human resource and financial performance of the organization. The financial performance of any organization reflects the strengths. The level of steel consumption has been regarded as an index of industrialization and economic maturity attained by country. Indian steel industry generates a significant amount of waste materials. Presently India is operating with open-hearth furnaces. turnover.

aluminum.0 annual rates up to the end of this century at a 7. This is the present of the bold steps taken by the government to develop this sector. steel demand is less developed countries on a whole is expected to grow at a 5.6% annual rate following a 2. According to their estimation total demand in advanced industrial countries on a whole is expected to grow at 0. North Korea region would grow at 4. which was raised to 9.5 million tones per year. The production of steel in significant quality started after 1990. per annum.5% annual rate up to 2000 following a 3. as per the study concerned by china economists.2% rate between 1974 to 1984. In the period of pre independence steel production was 1. Within the controlling plant economy the Eastern Europe erstwhile USSR region may have 0.3% annual steel demand growth. Steel demand in china.is shown below.  Developed countries slowly reduced the production of steel. The growth of steel industry can be started by dividing the period into pre and post independent era. etc.  There is a threat to steel industry from competitive products like plastics. World's demand for Steel: The total demand for steel in world is expected to grow at an annual rate of 1.D. The development of steel industry in India should be viewed in conjunction with the type and system of government that had been ruling the country.1 annual growth rate between 1984-1994. Highlights of present Steel Scenario:  The world steel shows a low growth demand.0 million tones of target by the seventies.5% per annual growth during 19741980.  Developing countries like China are planning to produce steel as much large quantity then of present output of 80 Mt. .7% between 1935 and 2000 A.

Recession period . Durgapur.  Emergence of new technology like scraps preheating Growth of Steel Industry: The growth in a chronological order is depicted below: S.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. Formation of TISCO TISCO started Production.  Preference is given to superior quality products and high value item production. TISCO was founded Formation of Mysore iron and steel initiated at Bhadravathi in Karnataka.During the plan the three steel plants under HSL. James erskin founded the Bengal frame works. Jamshediji TATA initiated the scheme for an integrated steel plant. First five-year plan . . India consciously and strategically decides to invest into steel production. 9 1956 – 1961 Bhilai. Bhilai and Durgapur steel 10 11 12 1961 – 1966 1964 1966 – 1969 plant started Third five-year plan . Second five-year plan .Till the expansion programmes were actively existed during this period. TISCO & TISCO were expanded* Bokaro steel plant came into existence. TISCO started its expansion program.No 1 2 3 4 5 6 7 8 YEAR 1830 1874 1899 1906 1911 1918 1940 1951 – 1956 GROWTH Osier Marshall heathIer constructed the first manufacturing plant at port-motor in Madras presidency.The Hindustan steel limited (HSL) was born in the year 1954 with decision of setting up three plants each with 1 million tones in got steel per year at Rourkela.  Customer oriented approach in view of product oriented approach.

At the end of the fifth five year plan the totaled installed capacity from six integrated plants was up to 10. Licenses were given for setting up of many mini steel plants and re-rolling mills government of India.The idea of setting first integrated steel Plant. the first sea-based plant at Visakhapatnam took definite shape. .13 1969 – 1974 Fourth five-year plan . Progress of Visakhapatnam steel plant picked up and the nationalized concept has been introduced to 17 18 commission the plant with 30 MT liquid steel capacities by 1990 1992 – Eight five-year plan .6 million tons.The Visakhapatnam steel plant was 1997 commissioned in 1992. The cost of plant has become around 8755 crores.Work on Visakhapatnam steel plant started 1985 with a big bang and top priority was accorded to start the plant. Rourkela steel plant. 16 1979 - Annual plan. SAIL was formed during this period on 24th January 1973 14 19741979 Fifth five-year plan . Visakhapatnam steel plant started the production and 19 modernization of other steel plants is also duly engaged. Capacity at the end of sixth five-year plan from six integrated plants stood 11.Salem steel plant started. Schemes for modernization of Bhilai steel plant.Expansion works at Bhilai and Bokaro 1991 steel plant completed.50 million tones. 1985 – Seventh five-year plan .Restructuring of Visakhapatnam steel plant 2002 and other pubic sector undertakings. Plants in south are each in Visakhapatnam and Karnataka. Durgapur steel plant and TISCO were initiated. The Erstwhile soviet union agreed to help in setting 1980 up the Visakhapatnam steel plant 1980 – Sixth five-year plan . 15. 1997 – Ninth five-year plan .

No Plant Collaboration Capacity of Finished Steel Products Annual Production 7.20.The Major Steel and Related Companies in India:  Bhart Refectories Ltd.000 Tones 1 Rourkela Steel Plant West Germany .  Hindustan Steel works Construction Ltd  Jindal Steel and Power Ltd  Manganese ore(India) Ltd  Metallurgical and engineering consultants India Ltd  National Mineral Development Corporation  Rashtriya Ispat Nigam Ltd  Sponge Iron India Ltd  Steel Authority of India Ltd  TATA Iron steel Company Steel Plants with Foreign Collaborations: S.No Plant Collaboration Capacity of Finished Steel Products 1 2 3 4 Rourkela Steel Plant Bhilai Steel Plant Durgapur Steel Plant Bokaro Steel Plant West Germany Erstwhile USSR Britan Erstwhile USSR S.

Rourkela plant is unable to substitute aluminum of zinc for the production of galvanized sheet apart from source internal technical problems. . Further the industry is unable to get good quality coke and manganese is which the principal raw materials next to iron ore are unfortunately most of our resources of manganese ore are of poor quality besides the non availability of good quality raw material. South Korea and Malaysia. Because of technical limitations. Both prices and distribution of steel were under control of government. regular supplies of raw materials are very much handicapped due to the absence of good transport facilities.2 3 Bhilai Steel Plant Durgapur Steel Plant Erstwhile USSR Britain 7.000 Tones 8. supervise the steel and iron inducted according to the recommendation of Raja committee. Government Control and Pricing Policy: Since 1941.00. Lack of Technical Problems: Bhilai had to execute orders for shipment of rails to Iran. India steel and iron industry was almost completely state regulated. decided to remove statutory control over the price and distribution of all.000 Tones Problems of Steel Industry: Lack of Raw Materials: Non-availability of good quality raw material is another problem faced by iron and steel industry. Another problem faced by the steel industry related to the difficulty in getting zinc supplies for the continuous galvanizing line.70. our technology in the field of steel production is not a developed one when compared to other advanced countries. The Govt. But Raj committee in fixing the steel price didn't regulate the price of raw materials. 1964 the Govt. The modem giant blast furnace needs high-grade iron ore and good metallurgical coal. but a few categories with effect from 1st march 26.

Visakhapatnam Bestowed with modern technologies. 3897. and BS etc. The foundation stone for the plant was laid by the then prime minister on 20th Jan '71. maintenance and service units besides purchase system.Profile of Visakhapatnam Steel Plant Visakhapatnam steel plant the first coast based steel plant of India is located 16 km south west of city of destiny i.4 Mt integrated steel plant at Visakhapatnam. 24 branch offices and stock yard located all over the country. seamless integration and efficient up gradations which results in wide range of long and structural products to meet stringent demands of discerning customers with in India and abroad. DINAND BIS. BACKGROUND: Visakhapatnam steel plant To meet the growing domestic needs of steel.56 million tones of saleable steel. government of India decided to set up an integrated steel plant at Visakhapatnam. The project was estimated to cost Rs. VSP products meet exacting international quality standards such as JIS.28 Crs based on prices as on 4th quarter of 1981. VSP has an installed capacity of 3 million tones per annum of liquid steel and 2. VSP successfully installing and operating efficiently Rs460 crores worth of pollution control and environment control equipments and converting the barren land scope by planting more than 3 million plants has made the steel plant. steel township and surrounding areas into a heaven of lush greenery. The certificate covers quality system of all operational. However. training and marketing functions spreading over 4 regional marketing offices. At VSP there is emphasis on total automation. for Occupational Health & Safety (OHSAS-18001). An agreement was signed with erstwhile USSR in 1979 for co-operation in setting up 3. on completion of construction and commissioning ..e. VSP has become the first integrated steel plant in the country to be certified to all the three international standards for quality (ISO-9001) for environment management (ISO-14001).

The plant was dedicated to the nation on 1 st august' 1992 by the Prime Minister.  "Tempore" and "Stelmor" cooling process in LMMM & WRM.Narasimha Rao. A P UAE Madharam. Major Sources of Raw material: Iron Ore Lumps & Fines B F Lime Stone SMS Lime Stone B F Dolomite SMS Dolomite Manganese Ore Boiler Coal Coking Coal Medium Coking Coal Bailadilla.  Biggest Blast Furnaces in the country  Bell less top charging system in blast Furnace.  Suppressed combustion . A P Madharam. Unlike other integrated steel plants in India.LD gas recovery system.  Extensive waste heat recovery systems.0 Mt of liquid steel and 2. A P Talcher. M P Jaggayyapeta. Visakhapatnam Steel Plant is one of the most modem steel plants in the country. A P Chipurupalli.  100% continuous casting of liquid steel. VSP Technology: State-of-the-Art  7m tall coke oven batteries with coke dry quenching. the organizational man power has been rationalized. The plant has a capacity of producing 3. the cost escalated to around 8500 Cr.  Comprehensive pollution control measures.  100% slag granulation at the BF cast house.of the whole plant in 1992. P.656 Mt of saleable steel.V. To operate the plant at international levels and attain such labor productivity. Sri. Orissa Australia Gidi/Swang/Rajarappa/Kargali .

400 3. ('OOOT) 2. Volume and six 4 strand bloom casters 4 Strand Finishing Mill 2 x 10 Strand Finishing Mill 6 Strand Finishing Mill UNITS (3.0 MT STAGE) 4 Batteries each of 67 ovens & 7 Mts Main Products of VSP: Steel Products Angles Billets Channels Beams Squares Flats Rounds Re Bars Wire rods By Products Nut Coke Coke dust Coal Tar Anthracene Oil HP Naphthalene Benzene Toluene Zylene Wash Oil VISION: To be a continuously growing world-class company. We shall:  Harness our growth potential and sustain profitable growth.Major Units at VSP: DEPARTMENTS Coke Ovens Sinter Plant Blast Furnace Steel Melt Shop LMMM WRM MMSM ANNUAL Cap. .000 710 850 850 Height 2 Sinter machines of 312 Sqm grate area Each 2 Furnaces of 3200 cu m volume each 3 LD Converters each of 133 Cum.256 3.261 5.

 Deliver high quality and cost competitive products and be the first choice of customers.  To 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.

MISSION:
To attain 16 million tones liquid steel capacity through technological up gradation, operational efficiency and expansion, to produce steel at international standards of cost of quality, and to meet the aspirations of the stakeholders.

OBJECTIVES OF VSP:
 Expand plant capacity to 6.3 Mt by 2010-11 with the mission to expand further in subsequent phases as per the corporate plan.
 Towards growth-expand the plant capacity to 7Mt by 2011-12 and 10 Mt

By 2019-20.  Be amongst top five lowest cost steel producers in the world by 20092010.  Achieve higher levels of customer satisfaction than competitors.  Towards employees-make RINL the employer of choice. Upgrade the skills and efficiency of employees through training and development and maintain high levels of motivation and satisfaction.  Be recognized as an excellent business organization by 2009-10.  Instill right attitude amongst employees and facilitate them to excel in their professional, personal and social life.  Be proactive in conserving environment, maintaining high levels of safety and addressing social concerns.  Towards technology up-gradation and productivity-continuously upgrade tec1mology and practice benchmarking to achieve international efficiency

levels. Adopt latest developments in information and communication technology.  Towards knowledge management-become a knowledge based and a knowledge sharing company.  Towards safety, environment and society-continue efforts towards safety of employees, conversation of environment and be a good corporate citizen.

Core Values:  Commitment  Customer Satisfaction  Continuous Improvement  Concern for Environment  Creativity and innovation Policies & Rules of RINL/VSP:
VSP takes all necessary actions for the fulfillment of regulatory requirements. In this regard VSP follows the following policies. 1. Quality Policy:Continuously improve the quality of all materials processes and product services for customers. 2. Environment Policy:Maintain high level of environmental consciousness amongst employees and prevention of pollution by minimizing the emissions and discharge. 3. HR Policy:VSP believe that their employees are the most important resources, so it provides good working environment that makes the employees committed and motivated for maximizing productivity.

Land mark year of growth:

The year 2005-2006 saw the company registering then best ever sales turnover of Rs.8482 cores a 3.6% growth over previous year. The company stated a record net profit of Rs.1252.37 crores and this is the third consecutive year that the company has been earning net profit with this the accumulated losses have bought down with this accumulated losses have set up to out the Rs.906 crores and your company is all shortly also your 'MINI RATNA' by the government of India. It works under the following Slogan: “Let Excellence not only be our goal. Let us make it our standard”

Organizational Structure of Visakhapatnam Steel Plant:
VISAKHAPATNAM STEEL PLANT has a well designed organizational structure. It has centralized management structure. There is Chairman cum Managing Director (CMD) as head; the main decisions are taken by him, in accordance with steel industry (SAIL). These are 9 levels in organization from EO to E-9. LEVELS E-9 E-8 E-7 E-6 E-5 E-4 E-3 E-2 E-l E-0 NAME General Manager Joint General Manager Dy. Additional Chief Manager Additional Chief Manager Dy. Chief Manager Manager Deputy Manager Assistant Manager Junior Manager Assistant Executive

VISAKHAPATNAM STEEL PLANT has tall/vertical organization

they are .. Godavari and Krishna with bell less top charging equipment and 100% cast house slag granulation.225 Total Employees: Production Facilities: The production facilities in the RINL are most modern amongst the steel industry in the country. • 100% continuous costing of liquid steel into blooms resulted in RINL has sophisticated and latest features of automation of large lowest losses and better quality of blooms. • 3200 cubic meter two blast furnaces i.. • polling mills consisting of .structure. where the power & authority flows from top to bottom. • country helps in excellent blending of the faced material to sinter machine and production of consistent good quality sinter.. Human Resource dept.Finance Dept. Some of the production facilities in RINL are: • 7 meter coke ovens of RINL are the tallest so far built in the Base Mix Yard for sinter plant introduced for the first time in the country. and Production Department. Man power at a glance as on 31-03-2009 Works Executives Non Executives 3249 10476 Project 329 63 Mines 93 267 Other 1547 120 Total 5218 12007 17. the biggest to be setup in the country have done away either the conventional bell charging system.e. Marketing Dept. The know-how and the technology have been acquired from different parts of the world from the reputed/established manufacturers. It has four main departments.

Chennai and Hyderabad. Open market prices are generally on rise.• Light and Medium Merchant Mill (LMMM) which include billet and Wire Road Mill (WRM) Medium Merchant and Structure Mill (MMSM) The operations of blast furnace. Interface helps in redressing availability problems. Kolkata. Pricing & Distribution: • Price regulation of iron & steel was abolished on 16. Gaps in Availability are met mostly through imports. steel melting shop and rolling mills bar mill • • • have been entirely computerized to ensure consistent quality and efficient performance. Price increases of late have taken place mostly in long products than . consignment agencies have been contracted. Government has no control over prices of Iron & Steel. viz. Defence. And in other places.Availability Projection: • • • • Demand.1992. Railways.1. • • • • Allocation to priority sectors is made by Ministry of Steel. Marketing network of Visakhapatnam Steel Plant: The products are being sold through 35 marketing centers all over the country with four stock yards at Mumbai. ~ Distribution controls on iron & steel removed except 5 priority sectors. Exporters of Engineering Goods and I North Eastern region. Small Scale Industries Corporations. Demand .Availability of iron and steel in the country is projected by Ministry of Steel annually. which is conducted on regular basis. complaints related to quality. Interface with consumers by way of Steel Consumer Council exists.

Pollution control and Environmental protection: Elaborate measures have been adapted to combat air and water pollution in Visakhapatnam steel plant. Hyderabad. MOD. environment protection.flat products. Quality. Some of the major awards received by VSP are in the area of energy conservation. Achievements and Awards of VSP: The efforts of VSP have been recognized in various forms.4 million trees in area of 35 square kilometers and incorporated various technologies at a cost of Rs.460 crores and control measures. 2010March ‘Public Relations National Awards-2009’ RINL bagged third prize in the 2009 ‘Event Management’ category of the ‘Public Relations National Awards-2009’ at the 31st All India Public Relations . In order to be eco friendly Visakhapatnam steel plant has planted more than 3. Quality circles. Some of the important awards received by VSP are indicated below: Award Purpose Year 2010April Award of 'Certificate of Merit' of Global Human resources Human Resource Development of Development Organization'(IFTDO) NIPM certificate of Merit Best HR Practices 2010March Udyog Ratan Award by the Delhi Telugu Academy. Rajbhasha. sports related awards and a number of awards at the individual level. safety.

Energy Award-CII VSP was adjudged Unit’ ‘Energy 2009 by Feb Efficient award Confederation of Indian Industry Godrej Green Business Centre at the 10th National award for excellence International Control Convention on in energy Management in November 2009 Quality Two QC teams i.conference held in Chandigarh on 11th December.e. and “Akash’ ES&F dept consisting and members Circles (ICQCC) Convention Organized By: : Productivity from Improvement Circles Association. 2008 & 2009) which achieving is a HAT-TRICK NATIONAL RECORD. 2009. convention During October'2009 . fourteen Philippines VSP QC teams won Gold & coordinator presented QC case Bronze medals at International QC studies during the competition. Steel Minister’s Trophy for the year RINL bagged the First Steel 20102006-07 Minister’s Trophy for the year 2006-07 for being the best integrated steel plant in the country (Runner Up) in November 2009. Cebu. 10th National Management Quiz VSP won this Quiz successively 2009 for 3 in a row (2007. “Sraddha” 2009 2009 from CMM Dept.

Varanasi on this occasion for excellent Support rendered by him in propagation of Hindi . ‘Rajbhasha Gourav Alankaran Sri PK Bishnoi was awarded ‘Rajbhasha Gourav Alankaran’ by Rasvarsha Sansthan.Certification for CMMI Level 3 (version1. Technology ‘Rajbhasha performance Trophy’ for excellent for excellent performance of 2009 Hindi for the year 2007-08 by Hindi Salahkar Samithi of Ministry of Steel VSP bags Top Assessee Award for 2007-08 Central for paying highest central Excise Day.2) for its Information Technology VSP has achieved of a rare 2009 distinction becoming the First Indian Steel Company to be assessed and certified for CMMI Level 3(version 1. which was excise on the 65th Anniversary of celebrated at Vizag on 24th Feb’09 by the Visakhapatnam Excise zone.2) for its Information Department.

Financing and Accounting wing: .Slag granulation plant .000 category (More Top 6 than companies were 373) in employees).RMHP & Rolling mills. Top 50 for -Study 2009 by Great Place best companies to work for in India. cost consciousness. Top To Work Institute & Economic 2 PSUs to work in India. sophisticated equipment. production with less cost and customer satisfaction have become the hallmark of VSP.4th rank in large Times ( total no of participated organizations 10.SP.PSU Category Ispat Suraksha Puraskar Award JCSSI 2008 by In group A (Scheme2) for the 2008 year 2007 for the zones coal and coke. up to date knowledge. high skills. latest technology. manufacturing and production Performance Excellence Award 2007 Presented by Indian Institution 2008 of Industrial Engineering for Financial and Operational Strength for 2006-07 Award for Exemplary usage of ICT by for PSU's its e-governance Conference on by 2008 e- Government of India during 11th National Governance QCFI-NMDC Award for Best Quality QC Implementation Circle Implementation . in which no fatal accidents occurred during years 2006-07.BF. Total quality.Recognition as one among “India’s best India's best companies to work 2009 companies to work for” – 2009 .

Stores Accounting 3. Project Accounts 15. Concurrence Sections Sources of Funds: . Pay and PF Accounts 5. Cash Section 9. 1. Loans and Advances 10. Budget Section 13. Costing Section 14. The finance Department has many sub sections. General Accounts Section 8. To name a few are: The following are the sections of finance and Account department in RINL. Internal Audit Section 12. Sales Accounts 4. Raw material Accounts 2. Finance and Accounting Department of RINL is divided into several sections for administrative control and assignment of responsibilities and fixing of accountability etc. Operational Bills Accounts 7. It has about 275 employees consisting of about 260 executives and 15 non executives. Corporate Accounts 11.In RINL main function of the finance and Accounts Department is to look after the treasury management and to render service in financial aspects for effectively conducting the business of the company. The entire department is headed by the general manager. Works accounts section 6.

Iron ore 6. 3. State Bank of India Canara Bank UCO Bank Bank of Baroda Andhra Bank State Bank of Hyderabad Allahabad Bank. 7. 1. Ocean Freight 8. Coal Blast - 2 Crores/day 12 Crores/month 12 Crores/month 35 Crores/month 15 Crores/month 50 Crores/month 15 Crores/month 70 Crores/month . Where funds for finance are raised. 4. Employee salary 5. Sales Tax 3. 5. 2. HSBC Industrial Development Bank of India (IDBI) Indian Overseas Bank (IOB) The Company Pays: 1. Custom duty 4. 9. The following are the 10 banks. Excise duty 2. 8. Railway freight 7.VSP raise its working capital from of 10 Bankers. 10. 6.

BOARD OF DIRECTORS Expansion plan: Product Capacity (MT) Hot Metal Charge Sinter Liquid Steel Present 4. Two 6 Std Billet Casters & One 6 std Saleable Steel Wire Rod Bars& Structural Seamless Pipes Special Bars 3.05 1.26 3.65 3.50 8.72 1.95 16mm 5.40 0.34 1. area SMS-2 with Two 150 CuM Converters.30 40mm Round Caster New WRM of 600000T/ Annum New SBM of 750000T/ Annum New SM of 700000T/ Annum Seamless Tube Plant of 300000T/ Annum Additional Facilities Envisaged .30 New BF with 3800 CuM Capacity New Sinter Plant of 400 Sq.00 5.70 Capacity (MT) Future 6.M.50 6.

(Plains) The company started its commercial production in 1990-91 And its financial results FY 9091 9192 9293 9394 9495 9596 9697 9798 9899 Gross Sales 245 772 1185 1751 2209 3039 3135 3071 2761 Operating Profit -88 -101 -31 114 416 633 606 460 15 Interes t 192 437 198 346 366 407 430 198 361 Depreciatio n 197 449 340 340 415 430 422 439 111 Net Profit -478 -987 -568 -573 -364 -204 -246 -177 -457 .

during the year 2002-03. In October 2003. Performance of RINL at a glance: Production Performance – (‘000 TONS’) The production performance of VSP in the last four years is as follows: LIQUID STEEL 2909 3080 SALABLE STEEL 2507 2757 YEAR 2000-2001 2001-2002 HOT METAL 3165 3485 . In the same year.521 Crores.9900 0001 0102 0203 0304 0405 0506 0607 0708 0809 2973 3436 4081 5058 6169 8181 8482 9151 10433 10411 252 504 690 1162 2053 3271 2336 2219 2994 2027 382 351 290 187 49 11 31 48 31 88 432 445 475 455 457 1006 416 315 471 240 -562 -291 -75 521 1547 2254 1890 1363 1942 1335 It can be seen from the above table. it bagged the PRIME MINISTER TROPHY for its excellent performance in the Steel Industry. the company turned around by earning a net profit of Rs. RINL became a DEBT FREE COMPANY.

2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 3941 4055 3920 4153 4046 3913 3546 3356 3508 3560 3603 3606 3322 3145 3056 3169 3173 3237 3290 3074 2701 Commercial Performance: The commercial performance of VSP for the past four years is as follows (In crores) SALES YEAR 2000-2001 TURNOVER 3436 DOMESTIC SALES 3122 EXPORTS 322 .

This has affected the company’s balance sheet due to very high interest burden.2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 4081 5059 6174 8181 8469 9131 10433 10411 3710 4433 5406 7933 8026 8487 9878 10332 371 626 768 248 443 424 555 78 Financial Performance: VSP had to bear the burnt of huge project cost right from the day of its inception. The company. . in spite of making operating profit every year had to report net loss during all financial years. This on the other hand had resulted in making VSP to take great care in planning the financial resources.

Year 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 GROSS MARGIN 504 690 1049 2073 3271 2383 2633 3515 2356 CASH PROFIT 153 400 915 2024 3260 2355 2584 3483 2267 NET PROFIT (-) 291 (-) 75 521 1547 2008 1252 1363 1943 1336 Financial Highlights: 2006-07 A OPERATING RESULTS (Rs Crs) Turn Over Gross Income Gross Expenditure Gross Profit Profit Before Tax Net Profit After Tax 9151 9812 7540 2271 2222 1363 2007-08 10433 11337 8310 3027 2995 1943 2008-09 10411 11387 2027 1336 .

90 19.90 105.30 14.60 38.00 18.00 3.50 29.10 97.70 3.10 3.40 16.70 16.60 3.60 26.B YEAR END FINANCIAL POSITION (Rs Crs) Share Capital Reserves and Surplus Capital Employed Net Worth Gross Block Depreciation Net Block Inventory C PROFITABILITY AND OTER RATIO (i) Percentage Of Gross Profit to Sales Net Profit to Sales Net Profit to Net Worth Net Profit to Capital Employed Gross Profit to Share Capital Inventory Sales Sales To Capital Employed (ii) Ratio Of Current Assets to Current Liabilities Quick Assets to Current Liabilities 7827 1711 9427 9523 8876 7085 1790 1203 24.30 7827 3654 9935 11481 8901 7516 1385 1761 29.80 14.10 7827 4593 12420 9006 7750 1256 3215 .80 14.00 13.90 23.

Chapter-III Theoretical Framework Chapter 3 THEORITICAL FRAMEWORK Introduction to Financial Statements: Accounting process involved recording. 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. classifying and summarizing various business transactions. The financial statement is an . presented annually and reflect a division of the life of an enterprise in to more or less arbitrary accounting period more frequently a year. Financial statements are in term reports.

cash at bank. bills receivables. The following points explain the nature of financial statements: 1. the balance sheet reflecting the assets. Nature of Financial Statements: The financial statements are prepared on the basis of recorded facts. 2. liabilities. The financial statements by nature are summaries of the items recorded in the business and there statements are prepared periodically generally for the accounting period.Myer “The financial statements provide a summary of the accounts of a business enterprise. Accounting Conversions: . refers to the data taken out from the accounting records. Sundry debtors. The figures of various accounts such as cash in hand. The recorded facts are those which can be expressed in monetary terms. Recorded Facts: The term ‘Recorded facts. Definitions: According to John N. and capital as on a certain date and the income statement showing the results of operations during a certain period”. The statements are prepared for a particular period. fixed assets are taken as per the figure recorded in the accounting books. The transactions are recorded in a chronological order as and when the events happen. generally one year. As the recorded facts are not based on replacement costs the financial statements do not show current financial condition of the concern.organized collection of data according to logical and consistent accounting procedures its purpose is to convey of a business firm. The records are maintained on the basis of actual cost data.

The conversion of valuating inventory at cost or market price. 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. The valuing of assets at cost less depreciation whichever is lower. 4. Personal Judgments: Even though certain standard accounting conversions are followed in preparing financial statement but still personal judgment of the accountant plays on important part. principle for balance sheet purposes statements comparable. Postulates: The accountants make certain assumption while making accounting records. The financial statements should be prepared in such a way that they are able to give a clear and orderly picture of the concern.Certain accounting converters are followed while preparing financial statements. The other alternative to this postulate is that the concern is to be liquidated the concern. The ideal financial statement has the following characteristics. realistic. One of these assumptions is that the enterprise is treated as a going concern. is followed. Attractive: . 3. So the assets are shows on a going concern basis. An other important assumption is to presume that the value of money will remain in the same in different periods. simple and Characteristics of financial statements: The financial statements are prepared with a view to depict financial position of a concern. 1.

Investors: . the financial statements must be prepared in brief. 2. Previous year’s figures in the balance sheet. Brief: If possible. 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. The CRS will be interested in current solvency of the concerns. Importance of financial statements: Financial statements contain a lot of useful and valuable information regarding profitability financial position and future prospective of business concern. The reader will be able to form as idea about the figures. The utility of financial statement to different parties may be summarized as follows: 1. 3.The financial statements should be prepared in such a way that important information is underlined so that it attracts the eye of the reader. 4. The financial statements should be presented in such a way that they can be compared to the previous year’s statements. The management is able to decide the course of action to be adopted in future. Comparability: The results of financial analysis should be comparable. Management: The financial statements are useful for assessing the efficiency of different cost centers. Creditors: The trade creditors are to be paid in a short period.

5. They may develop standard ratios and design uniform system of accounts. 6. They are interested in the security of the principal amounts of loan and regular payments by the concern. Limitations of Financial Statements: Financial statements are relevant and useful for the concern.The investors include both short-term and long term investors. 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. still they do not present a final picture of the concern. The financial statements enable the stock broker to judge the financial position of different concerns. Ignoring of non-monetary aspects: . Trade Associations: These associations provide service and protection to the members. and otherwise misleading conclusions may be drawn. They may analyse the financial statements for the purpose of providing facilities to these members. 4. is also based on the statements. Stock Exchange: The stock exchange deal in purchase and sale of securities of different companies. The investors will not only analyse the parent financial position but will also study the future prospectus and expansion plans of the concern. The financial statements suffer from following limitation: 1. The fixation of prices for securities etc. Government: The financial statements are used assess tax liability of business enterprises.

4. 3. common size statements. Financial Analysis: 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.These statements are prepared with the help of accounting information which mainly consider monetary aspects only. The balance sheet value are not shown the value of assets may be sold more over they do not reflect the market value which is as important factor in determining the solvency of an enterprise. Meaning and concept of financial analysis: The terms ‘financial analysis’ also known as analysis and interpretation of financial statements refers to the process of determining financial strength and . Historical cost: The statements are prepared on the basis of historical cost. Conversion of Conservation: Due to conversion of conservation the income statement may not disclose true income of the business. The value of fixed assets is at there original cost less depreciation. This is due to ignorance of probable incomes and accounting probable losses. funds flow and cash flow analysis – Cost Volume Profit Analysis and Ratio Analysis. There are various methods or techniques used in analysis financial statements such as comparative statements. Personal Judgment: In preparing financial statements certain items are left to the personal Judgment of the accountant. If any accountant is not following accounting principles correctly his judgment will give wrong picture. schedule of changes in working capital. The value of business depends both on qualitative and quantitative factors. trend analysis. 2.

P Analysis Cash Flow Analysis .weaknesses of the firm by establishing strategic relationship between the items of the balance sheet.V. profit and loss account and other operative data Techniques of financial analysis A financial can adopt one or more of the following techniques of financial analysis: Financial Analysis Techniques Comparative Financial Statements Trend Percentages Ratio Analysis Funds flow Analysis Common Size Financial Statements Ratio C.

iii. The third and fourth column used to show increase or decrease in figures in absolute adopted in preparing comparative balance sheet. The comparative study if income statement for more than 1 year may enable us to know the program of the concern. Comparison expressed in ratios. Increase or decrease in terms of percentages. Absolute figures expressed in terms of percentages. v.. The comparative financial statements contain the following items. find out the changes in absolute figures i. Absolute figures (amount in Rs. It reveals the profit carried or loss incurred by the cancers. Change in amount Percentage of change = Base year amount x 100 . increase or decrease should be calculated.e. /-) as given in the final accounts. iv.  In first step. First two columns gibe figures of various items for two years. Both the income statement and balance sheet can be prepared Ni the form of comparative financial statements. i. Increase of decrease in absolute figures in terms of money value. Percentages of totals. ii.  In second step percentage of change should be calculated with the help of following formula. Comparative Income Statements: The income statement (profit & loss A/c) gives the results of the operations during a definite period. vi.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 figures for two or more period side by side to facilitate comparison.

Similarly various liabilities are 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 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.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 amount of various transactions. The total assets are taken as 100 and different assets are expressed as percentage of the total.  The totals of assets or liabilities are taken as 100. taken as a part of total liabilities. The figures are shown as percentages of total assets.. The comparative balance sheet consists of two columns for the original data. The comparative studies throw light on financial policies adopted by management. balance sheet and income statement are shown in analytical percentages. Common Size Statements: The common size statements.  The individual assets are expressed as a percentage of total assets i. The common size statements may be prepared in the following way. 100 and different liabilities are calculated in relation to that liability.e. total liabilities and sales. A south column containing the parentage of increase or decrease may be added. . A third column used to show increase or decrease in various items.

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. So. a relationship is established between sales and other in income statement and this relationship is helpful in evaluating operational activities of the enterprises. the selling expenses should be reduced at once. A significant relationship can be The established between items of income statement and volume of sales. Analysis and the Interpretation of Financial Statements: Financial Statements are indicators of the two significant factors: 1. The increase in sales will certainly increases selling expresses and not administrative or financial expenses. Financial soundness Analysis and interpretation of Financial Statements therefore refer to such a treatment of the information contained in the income statement and balance sheet so as to afford full diagnosis of the profitability and financial soundness of the business. administrative and financial expenses may go up. . The comparison of figures in different periods is not useful becomes total figure may be affected by a number of factors. Profitability 2. The trends of year to year may not be studied and even they may not give proper results.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. In case the sales are declining. increase in sales will certainly increases selling expression and volume of sales. It is not possible to establish standard norms for various assets. In case the volume of sale increases to a considerable extent. The common size balance sheet is a horizontal analysis.

volume of production. who criticized the bankers for its lap sided development owing to their decisions regarding the grant of credit on current ratios a lone. and sold to reach the target profit level. It is not strictly a technique used for analysis of financial statements.Cost-Volume-Profit Analysis: Cost – Volume – Profit analysis is an important tool of profit planning. It studies the relationship between cost. Ratio analysis of business enterprises enters on efforts to derive quantitative measures or guides concerning the expected capacity of the firm to meet its future financial obligation or expectations present and past data are used for the purpose and what ever extrapolations appear necessary. selling price and cost. Ratio: Ratio is an expression of the quantitative relationship that exists between the two numbers. . Thus. Alexander Walt. it is an important tool for the management for decision making. a direct examination of the magnitude of two released items is some what enlightening but the comparison is greatly facilitated by expressing the relationship as a ratio. made the presentation of an elaborate system of ratio analysis in1919. 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. It tells the volume of account of variation in output. the quantity to be produced Ratio Analysis: Financial analysis depends to very large extents of the use of ratios through there are other equality important tools of such analysis. They are made to provide no indication of feature performance. and finally. Since the data is provided both cost and financial records. sales and profit. However.

Chapter-IV Data Analysis & Interpretation .

The elements of financial position are shown in comparative form so as to give an idea of financial of two or more periods is known as comparative statements. This in other words is called as activity analysis. people are required to take timely decisions in light of present objectives. To carry out these activities. They are created in order to achieve particular task. which individuals cannot accomplish on their own. effectively be an individual or a group of individuals. There are various tools to analyze the performance of an organization of which some important aspects are considered in this project.Chapter 4 DATA ANALYSIS & INTERPRETATION Organizations are purposive creations. Comparative statements not only shows the absolute . When organizations are created the huge task of the organization is also sub divided into smaller tasks. which can be handled. Usually this leads to departmentalization of organization. They are: • • Comparative Statement Analysis Common Size Statement Analysis Comparative statements: Comparative statements show the financial condition of business at a given point of time.

74 4280. For The Years 2008-2009 (Rs.64 62.03 -573.17 81.11 12.80 1.31 (Increase/ Decrease) -22. In Crs) PARTICULARS Income Gross Sales Less: Excise duty recovered on sales Net Sales Internal Consumption Interest Earned Other revenue Total Expenditure Raw Material Consumed Depletion / (Accretion) to Stock of Semifinished/Finished goods Employee's remuneration & benefits Stores & spares consumed Power & fuel 2008 10433.63 1282.45 40.71 5896.06 258.1 787. For the above purpose.5 % change -0.22 -4.17 1030.02 10104.65 1156. 2004-05 to 2008-09.22 37.81 2009 10410.98 8.22 -343.23 340..96 137.12 37.63 -17.97 1616.44 -62.57 -16.38 114.44 28.68 501.25 9128.07 1344. It includes: • • Comparative Income Statement Comparative Balance Sheet This statement is prepared to study the changes in various incomes and expenses between two periods on a specific date.76 167. we have taken into consideration of the five year accounts viz.46 724.37 88.64 0.25 111.01 25.49 .7 9088.figures and exhibits changes in absolute figures of a company but also gives absolute data in terms of percentages and change in percentages.48 125. Comparative Income Statement: Comparative Income Statement of VSP Ltd.68 31. It helps the management to know the profitability position and reasons behind fluctuations in incomes and expenses.64 91.27 9992.21 75.25 -916.72 364.

93 31.14 240.25 113.04 179.49 1076.77 38.55 4 988. Overall income position was good.17 1942.2008.81 286.43 -132.54 -607.12%.12 88.62 36.2 -968.09 0. when compared to the previous year 2008.77 441.39 38.e.18 5. The Net Expenditure have increased by Rs.71 2022.78 15.73 -69.42 15.57 3 652.10 -6. due to increase the expenditure like Raw Material Consumed.38 -4.96 509.39 2995.41 1083. i.81 56.89 8120.23 9.1.12 24.raw material mining cost Net Expenditure Profit for the year Prior period adjustmentsNet credit Profit Before Tax Provision For Taxation Current Tax Fringe Benefit Tax Earlier year adjustments Deferred Tax Profit After Tax Balance of Profit brought forward from previous year Amount available for appropriation 125.1084.97Crs.53 377.57 Interpretation: From the above analysis we found that.e.79 306.40 -2.77 128.86 -31.50 -32.97 0.55 149.50%. Stores & spares .81 3 652.57 471.46 0.111.15.77 2994.59 2026.01 85.97 4.94 -972.34 -37.85 -1.48 7036.e.66 21.75 -0. during the financial year 2009.92 39.06 8082.13 -4.59 -746.19 81.92 -32. the total income i.57 -231.74 1355.43 11.63 1335.74 1 709. i.36 -1188.00 4.02 -20.57 19. In comparison to the previous year i.17 1942.e. gross profit was increased to Rs.19 -49.55 0.62 -89.66 -26.Repairs & Maintenance Freight outward Other expenses & Provisions Interest Depreciation Wealth Tax Gross Expenditure Less: Inter account adjustments.94Crs.09 1084.15 6997. Employee's remuneration & benefits.

27 9992.90 6.86 16.07 1344.22 -343.52 14.36 8593.25% as compared to the previous year.57 1217.11 391.46 724. In Crs) PARTICULARS 2007 9150.41 14.94 357.17 1 030.32 39.02 10.06 258.06 167.91 1399.66 28.79 1155.72 364.e.43 15.09 % change 14.79 (Increase/ Decrease) 1282.27 242.57 211. i. -31.48 30.04 23.78 6.76 740. The overall profitability is satisfactory.93 289.17Crs.28 10. The profit after tax is decreased to Rs. Increase in the expenditure resulted in fall in profit after tax.70 2008 10433.11 1.91 7932.79 15.81 125.21 75.40 557.70 9 088.05 21.18 -366. For The Years 2007-2008 (Rs. Power & fuel.consumed.06 -1544.37 88.95 109. Comparative Income Statement of VSP Ltd.64 91.11 16.67 Income Gross Sales Less: Excise duty recovered on sales Net Sales Internal consumption Interest earned Other revenue Total Expenditure Raw materials consumed Depletion / (Accretion) to Stock of Semifinished/Finished goods Employees’ remuneration & benefits Stores & spares consumed Power & fuel Repairs & maintenance .63 3889.5 126.74 4 280.71 60.-607.

96 -87. the total income i.55 0.04 634.48 7036. i.81 3652.46 34.49 393.79 34.34 793.92 39.28%.76 -8.3 187.78%.42 351.55 -0.21 86.77 -128.38 0.22 -98. The profit after tax or net profit is Rs.95 -0.52 6402.77 2994.23 3. 16.69 9. i.31 1363.74 579.78 34.e.11Crs.38 1709.01 42.40 2219.e.15 6997.72 773.89 28.69 5.43 1363.63 404.74 -1 -2.42 9.23 -113.39 2995.43 -11.90 37.66 623. The Net Expenditure have increased by Rs.02 394.15 -102. during the financial year 2009.11 2222. Overall income position was good.36 1188.12 -7.63 58.17 1942.60 0.74 -2.26 -16.85 119.43 346.37 775.74 1709.Net credit Profit Before Tax Provision for Taxation Current Tax Fringe Benefit Tax Earlier years adjustments Deferred Tax Net Profit Balance of Profit brought forward from previous year Balance carried to Balance Sheet 0.13 4.75 4.1942.623.49 6374.67 48.62 Interpretation: From the above analysis we found that.Contributions to joint plant committee funds Freight outward Other expenses & provisions Interest & Finance charges Depreciation Wealth tax Gross Expenditure Less: Inter account adjustments-raw material mining cost Net expenditure Profit for the year Prior period adjustments.57 471. gross profit was increased to Rs 1399.03 -34.26 322. Power & fuel. In comparison to the previous year i.97 0.78 49.62 113.93 31.e. when compared to the previous year 2008.74Crs as .03 10.9.2008.76 315.43 1942.38 -25.81 _ 306. due to increase the expenditure like Raw Material Consumed.96 509.e.37Crs. Employee's remuneration & benefits. Stores & spares consumed.

85 572. In Crs) PARTICULARS 2006 8490.95 109.83 57.76 740.compared to Rs.03 % change 7.63 3889.92 29.60 18.31 7761.57 1217.46 0.73 2007 9150.26 354.95 832.49 8.34 338.77 3.62 10.21 75.18 618.42 -42.51 20.91 7932.40 557.40 3.34 -8.15 8.46 5.87 84.43Crs for the previous year.04 304.27 242.81 4.73 7314. For The Years 2006-2007 (Rs.94 357.1363.32 7.66 28.34 12.62 65.36 8593.24 0.85 12.09 168.04 23.14 202.69 41.59 3584.11 Income Gross Sales Less: Excise duty recovered on sales Net Sales Internal consumption Interest earned Other revenue Total Expenditure Raw materials consumed Depletion / (Accretion) to Stock of Semifinished/Finished goods Employees’ remuneration & benefits Stores & spares consumed Power & fuel Repairs & maintenance Contributions to joint plant committee funds . Comparative Income Statement of VSP Ltd.10 97.88 1176.02 -10.49 -63. The overall profitability is satisfactory.46 243.70 0.76 (Increase/ Decrease) 659.72 8.95 235.

89 28.38 8.34 793.48 5878.43 346. gross profit was increased to Rs.e.39 17.39 188.1252.60 0.55 67.e.37Crs for the previous year.43Crs as compared to Rs. Overall income position was good.51 4.e.21 86.52 55.11 2222. during the financial year 2009.97 0.85 _ -116. 10.40 2219.23 3.43 2.26 322.Freight outward Other expenses & provisions Interest & Finance charges Depreciation Wealth tax Gross Expenditure Less: Inter account adjustments-raw material mining cost Net expenditure Profit for the year Prior period adjustments. In comparison to the previous year i.23 1252.66 111. when compared to the previous year 2008.72%.37 1363.34 499.67 48.52 6402.38 -183. The Net Expenditure have increased by Rs.89 -15. The profit after tax or net profit is Rs.79 26.57 0.61 67.12 6.06 415.54 -3.42 351.03 31.495. Stores & spares consumed.38 315.27 86. Power & fuel.88 -54. Employee's remuneration & benefits.64 17.94 Interpretation: From the above analysis we found that.78 0.04Crs.83 318.Net credit Profit Before Tax Provision for Taxation Current Tax Fringe Benefit Tax Earlier years adjustments Deferred Tax Net Profit Balance of Profit brought forward from previous year Balance carried to Balance Sheet 306.38 1709.43%.49 6374.99 346.07 8.43 1363.46 16.2008.81 8.87 -138.69 6.18 5903.75 4.51 474. i.e.71 332. the total income i.89 8.23 3.38 24. .06 1252.50 336. The overall profitability is satisfactory.1363.97 3.43 17. i.01 495. 8.71 255.82 1889.50Crs.832.90 1882.38 -25.94 -158.37 -905.36 -63. due to increase the expenditure like Raw Material Consumed.

21 16.59 3584.76 -30.74 8.90 7646.04 3.39 490.54 355.81 4.84 6.34 338.87 84.13 8.28 -36.62 65.10 -3.78 43.85 572.76 2006 8490.44 196.51 18.15 8.73 7314.26 1.99 376.25 313.62 21.73 (Increase/ Decrease) 309.59 115.83 -0.15 3019.09 25.24 0.34 821.46 216.59 120.50 7359.10 97.23 -45.Comparative Income Statement of VSP Ltd.88 1176.03 % change 3.11 123.95 235.24 -0.24 82.44 564.06 93.69 1.31 7761.95 Income Gross Sales Less: Excise duty recovered on sales Net Sales Internal consumption Interest earned Other revenue Total Expenditure Raw materials consumed Depletion / (Accretion) to Stock of Semifinished/Finished goods Employees’ remuneration & benefits Stores & spares consumed Power & fuel Repairs & maintenance Contributions to joint plant committee funds .26 354. For The Years 2005-2006 (Rs. In Crs) PARTICULARS 2005 8181.71 -121.41 0.82 158.63 -310.49 19.

12 -558. during the financial year 2009.03 373.61 -32.26 -755.51 474.53 301.38 7.29 179.19 1.90 1882.09 1252.44 2812. i. 1.44Crs.03 31.94 -0.99 346.72 2008.97 3.05 11.57 0.48 5878.69 6.87 2253.49 2008. The Net Expenditure have .82 1889.18 -46.e.82 -100 -16.e.02 19.76 87.94 158.39 -15.95 -8. gross profit was increased to Rs.63 558. when compared to the previous year 2008.20 0.11 424. the total income i.16 444.50 5.18 24.99 306.22 4834.25 387.38 24.96 2811.18 0 158.37 -905.23 Interpretation: From the above analysis we found that.03 50 21.79 3.Freight outward Other expenses & provisions Interest & Finance charges Depreciation Wealth tax Gross Expenditure Less: Inter account adjustments-raw material mining cost Net expenditure Profit for the year Prior period adjustments.49 1.87 -364.07 21.38 -923.e.59 -33.09 -2914.12 4859.63 -68.16 -37.37 2.51 0 1889. Overall income position was good.94 -928.19 0.57 -2.115.08 -905.91 -138. In comparison to the previous year i.Net credit Profit after Prior Period Adjustments Depreciation short provided in earlier years Profit before Tax Provision for Taxation Current Tax Fringe Benefit Tax Deferred Tax Net Profit Balance of (loss) brought forward from previous year Balance carried to Balance Sheet 299.51%.62 0.26 1043.06 1044.71 255.18 5903.23 1252.2008.82 -0.06 415.

61 16.60 31. Increase in the expenditure resulted in fall in profit after tax.59%.32 1896.90 7956.25 5612.15 347.63 490.50 7359. Power & fuel.e.68 706. i.71 36.89 -9.35 2344. i.19 138.40 -17.46 -12.39 158.50 5. Employee's remuneration & benefits.21.94Crs.55 41.46 408.increased by Rs. due to increase the expenditure like Raw Material Consumed.-755.e.54 .27 -3.34 8181.18 5463.34 821. For The Years 2004-2005 (Rs.34 1.43 481.00 -25. The profit after tax is decreased to Rs.82 335.98 47.59 120. -37.81 6169. Comparative Income Statement of VSP Ltd.99 127.27 1.86 -1.72Crs.40 -1312.20 9.66 115. Stores & spares consumed.84 6.25 313.06 969.33 34.04 3019. The overall profitability is satisfactory.63% as compared to the previous year.46 216.10 -34.77 Income Gross Sales Less: Excise duty recovered on sales Net Sales Internal consumption Accretion/ (depletion) to Stock of Semifinished/Finished goods Interest earned Other revenue Total Expenditure Raw materials consumed Employees’ remuneration & benefits Stores & spares consumed Power & fuel 2050.82 310.73 220.1043. In Crs) PARTICULARS 2004 2005 (Increase/ Decrease) 2011.20 % change 32.

08 -0. .09 93.12 5169.76 17.28 -7.05 11.16 61. 41.18 1547.18 158.08 -905.07 14.57 11.76 87.99 8.62 -77.27 -2914.87 706.18 158.68 25.29 21.18 1310.27 48.10 1033.76 299. Overall income position was good.76 46.2344.86 25.43 -44. when compared to the previous year 2008.79 -34.57 24.28 3.79 45.19 0.32 -96.e.18 1547.78 -37.68 -68.68 255.89 457.10 - 10.98 1265.53 301.08 43.12 4112.Repairs & maintenance Contributions to joint plant committee funds Freight outward Other expenses & provisions Interest & Finance charges Depreciation Wealth tax Gross Expenditure Less: Inter account adjustments-raw material mining cost Net expenditure Profit for the year Prior period adjustmentsNet credit Profit after Prior Period Adjustments Depreciation short provided in earlier years Profit before Tax Provision for Taxation Current Tax Deferred Tax Net Profit Balance of loss brought forward from previous year Balance of loss carried to Balance Sheet 84.87 2253.49 2008.44 2812.17 1500.45 558.48 0.22 5145.7 4133.19 1.09 -2914.63 558.89 81.41 0.67 29.93 0. during the financial year 2009.18 -4461.58 1036.11 424.19 2008.88 114.20Crs i.12 87.91 Interpretation: From the above analysis we found that.78 -33.49 460.42 1547.23 -82.e.35 2811.77%. the total income i.58 87. gross profit was increased to Rs.65 186.91 1547.27 0.

10 1.18Crs .91 Total Current Assets 11804. The profit after tax or net profit is Rs.75 -13.32 Miscellaneous Assets: Deferred Revenue 0.13 -388.07 Railway Lines & Sidings 5.53 Roads.46 +0.09Crs as compared to Rs.11 6624.39 +9. Employee's remuneration & benefits.A) Cash & Bank Balances 7699.80 -33. The third column is used to show increase or decrease in various items.41 191.00 Expenditure Investments 0. In Crs) PARTICULARS 2008 2009 INCREASE /DECREASE AMOUNT(Rs) % CHANGE ASSETS: Current Assets:(C.00 ---+65.05 Profit & Loss a/c ------Fixed Assets: (F.49 1569.59 11859.43 258.00 0.92 3. i. For The Years 2008-2009 (Rs.72 -40. The Comparative Balance Sheet consists of two columns for the original data.76 +82.69 Other Current Assets 292.94 +97.57 -2.A) Land-Free Hold 51.56 Culverts -1074.12 %. Repairs & maintenance. Other expenses & provisions.37 +10.e.17 Sundry Debtors 93. Comparative Balance Sheet of VSP Ltd.46 0. The fourth column shows percentage increase or decrease. The Net Expenditure have increased by Rs.1547.03 -2.due to increase the expenditure like Raw Material Consumed. The overall profitability is satisfactory. Comparative Balance Sheet: The comparative studies throw a lot on financial policies followed by management.2008.00 0.1033.81 106.73 0.28 Loans & Advances 1958.15 3215.00 ---+33.96 +104.e.2008.00 0.18Crs for the previous year.85 -11.86 +1454.67 Land-Lease Hold 1.56 -19.74 85. 25.07 . Bridges & 96.52 +54. Freight outward.In comparison to the previous year i.93 -0.27 Stock (Inventories) 1761.05 0.

23 27.08 3.32 -8.04 124.62 2402.45 2560.51 0.04 14.05 -13.01 2530.76 -1.80 59.78 32.55 +129.32 1149.39 1 -5.A ] LIABILITIES: Current Liabilities: (C.64 -97.11 -26 -132.13 +30.57 99.T.63 +567.14 1134.53 907.46 +2.68 44.46 1.36 11.87 +648.26 +25 +121.14 -8.29 +0.45 0.Buildings Plant & Machinery Furniture & Fittings Locomotives Vehicles Electrical Installations Water Supply & Sewerage systems Miscellaneous Articles Mining Lease Rights Held For Disposal Capital Work-inprogress Total Fixed Assets TOTAL ASSETS [ C.98 59.78 107.96 .08 15276.80 54.32 1620.14 38.12 9.35 -8.22 0.43 501.47 -22.69 4.68 +25.06 +574.63 31.49 2572.46 +172.75 +268.09 1610.04 2087.81 4.91 25.72 100.97 -5.76 -7.19 +16.94 -7.19 3471.12 2185.04 1581.51 17733. Security & Other Deposits Interest Accured but not Due Other Liabilities Total Current Liabilities Long Term Liabilities & Provisions: (L.36 6.A + F.42 3.81 5.95 163.36 950.43 137.47 332.92 448.33 -23.P) Provisions Secured Loans Unsecured Loans Deferred Tax Liability Total Long Term Liabilities & Provisions 474.97 1.91 -38.L) Sundry Creditors Advances from Customers Other Advances Earnest Money.28 +0.46 -29.13 6.78 +39.90 -0.24 +2456.89 866.50 600.13 +0.81 5874.44 137.49 -0.24 +69.05 4617.32 3.15 0.17 -12.91 38.50 468.79 -4.54 26.31 136.

59 0.e. The liquidity position of the company during the year 2008-2009 is satisfactory. In comparison to the previous year i.94 -7.68 7699. The fixed assets have been increased by Rs..T.08 Interpretation: 1.Share Capital & Reserves: (CAP.L + L..69 +8. 5..P + CAP.] 7827. For The Years 2007-2008 (Rs.91 +46.37 +28.98 .72 7827.46% shows which that the working capital of the company is strengthened.A) Cash & Bank Balances Sundry Debtors Stock (Inventories) Loans & Advances Other Current Assets Total Current Assets 2007 2008 INCREASE /DECREASE AMOUNT(Rs) % CHANGE 7194.01 -56.91 +439. 0.2402.e.10 11804.24 in comparison to the previous year i. & RES.96% comparison to the previous year 2008.e.59 +504. Current assets have been increased by Rs.32 3653.49 +7.97 +16. 2. 25.04%. Comparative Balance Sheet of VSP Ltd.17 11481.51 17733.19%.00 +25..49 314.80 93.46 i.87 938. 2008 the current liabilities were increased by Rs.54.04 12419.05 +1356.48 2456.73 in comparison to previous year i.) Share capital Reserves & Surplus Total Capital & Reserve TOTAL LIABILITIES [C.39 +557. the long-term liabilities were increased by Rs 567.43 -123.90 1958.15 1518.43 10448.00 +938.e.24 1761. 4.01 +12. & RES.87 0.. In Crs) PARTICULARS ASSETS: Current Assets:(C. 3. by 69.41 1203.11 216.64 i.48 292.e.950.32 4592.91 15276.59 -22. by 59. During the financial year 2009.

19 2402.04 2087.91 2.80 59.27 -73.36 11.81 474.81 5.18 -22.41 -5.81 -23.45 +16.05 ---51.50 600.48 -9.95 16.63 -2.92 96.76 -100.31 136.00 0.03 +14.09 -13.50 -9.48 +1.25 82.41 422.68 44.00 -0.04 +1490.52 +443.75 15276.79 -34.43 926.96 73.84 . Security & Other Deposits Interest Accured but not Due Other Liabilities 14.78 +37.21 1.54 501.14 +35.17 -35.17 -42. Bridges & Culverts Buildings Plant & Machinery Furniture & Fittings Locomotives Vehicles Electrical Installations Water Supply & Sewerage systems Miscellaneous Articles Mining Lease Rights Held For Disposal Capital Work-inprogress Total Fixed Assets TOTAL ASSETS [ C.00 -0.51 0.89 866.A + F.49 68.73 -0.33 +14.95 0.29 3.00 597.00 ---0.39 +0.15 3.24 +17.19 3471.50 +44.08 3.74 1.91 25.16 10.65 0.00 +1069.00 -5.88 12850.33 18.88 -18.57 99.00 0.10 5.95 0.L) Sundry Creditors Advances from Customers Other Advances Earnest Money.50 +18.48 +17.92 -14.54 28.65 +93.32 +135.A) Land-Free Hold Land-Lease Hold Railway Lines & Sidings Roads.00 ---0.06 -4.Miscellaneous Assets: Deferred Revenue Expenditure Investments Profit & Loss a/c Fixed Assets: (F.93 -325.70 -10.A ] LIABILITIES Current Liabilities: (C.05 ---51.42 3.13 +1.97 1.82 4.02 82.74 1.00 +100.27 +2425.00 +249.90 0.39 522.70 -31.28 +20.44 +104.83 119.51 365.42 -47.84 -13.

T..32 1710.20 11481.76 +18.49 in comparison to previous year i.598.50%.94 -65. 2007 the current liabilities were increased by Rs.84 0.72 -44.15 +598. 4.95 163.75 15276.51 291. 5. .. by 44. 3.18%.78 107.17 -115.88 Interpretation: 1.47 332.e.03 7827.27 in comparison to the previous year i.56 +20. & RES.45 312.00 +113.Total Current Liabilities Long Term Liabilities & Provisions: (L. In comparison to the previous year i.77 604.04 12850.P + CAP.32 3653.00 +1942..02 1581.84 +1942.37 9538.88 7827.) Share capital Reserves & Surplus Total Capital & Reserve TOTAL LIABILITIES [C.e.P) Provisions Secured Loans Unsecured Loans Deferred Tax Liability Total Long Term Liabilities & Provisions Share Capital & Reserves: (CAP. 12.62 i.12 2185.46 -44.70 i.e.03% comparison to the previous year 2007. Current assets have been increased by Rs.1356. by 59.] 1011. the long-term liabilities were decreased by Rs 115.51 +2425.72 0.53 1610.T.e.1069.L + L..29 2301. 2.32 +488. & RES.. During the financial year 2008.98% shows which that the working capital of the company is strengthened.70 +44.18 1092.67 -204.56 -128.00 -5.62 +59.e.70 -271. The fixed assets have been increased by Rs.

17 544.66 -4. Comparative Balance Sheet of VSP Ltd.92 +0.22 -22.02 -5.21 1.12 +2196.A) Land-Free Hold Land-Lease Hold Railway Lines & Sidings Roads.96 73.20 1.51 73.39 -1.70 7194.27 216.10 24.11 +70.00 ---50.15 3.19 12.46 +7.48 8252.35 1203.85 -0.52 -18.05 ---+0.01 +416.67 -2.95 0.80 1218.36 314.05 -21.32 1518.55 -6.98 +30.43 .41 -0.10 -9.A) Cash & Bank Balances Sundry Debtors Stock (Inventories) Loans & Advances Other Current Assets Total Current Assets Miscellaneous Assets: Deferred Revenue Expenditure Investments Profit & Loss a/c Fixed Assets: (F.17 -6.90 0.95 -14.57 +13.98 +50.01 -18. In Crs) PARTICULARS ASSETS: Current Assets: (C.89 1.53 -15.05 ---51.46 +27.87 0.72 85. For The Years 2006-2007 (Rs.73 14.53 67.28 -0.54 28.01 180.46 3.27 -2.58 +130.24 -12.99 +0.28 +15.61 -39.20 +22.06 -7.71 34.95 16.74 1.25 82.29 3.68 19.68 166.00 10448.70 -100 +230.34 -15.43 926.24 1061. Bridges & Culverts Buildings Plant & Machinery Furniture & Fittings Locomotives Vehicles Electrical Installations Water Supply & Sewerage systems Miscellaneous Articles Mining Lease Rights Held For Disposal Capital Work-inprogress 2006 2007 INCREASE /DECREASE AMOUNT(Rs) % CHANGE 5621.49 68.90 184.16 10.11 +457.89 +100 ---+1.56 4.24 +43.17 +0.03 -253.18 0.00 597.03 -2. The liquidity position of the company during the year 2007-2008 is satisfactory.58 +26.19 +1572.5.46 1179.39 522.

01 -0.L) Sundry Creditors Advances from Customers Other Advances Earnest Money.76 +118.93 +16.32 346.44 316.42 +13. & RES.43 +724.P+ CAP.38 8173.62 785.03 +45.77 18.A ] LIABILITIES: Current Liabilities: (C.39 +35.20 +21.40 +430.28 +0.47 10535.98 +111.25 +19.87 369.73 716.72 1576.19 1.75 275.29 2301.T.50 +1364.77 604.64 -15.04 120.82 1011.58 -56.45 312.60 68. & RES.T.L + L.L + F.32 1710.87 2402.] 2283.50 0.P) Provisions Secured Loans Unsecured Loans Deferred Tax Liability Total Long Term Liabilities & Provisions Share Capital & Reserves: (CAP.02 82.37 173.65 +118.81 8.97 10535.54 +90.00 +393.00 +1364.51 291.20 +225.53 +9.83 119.88 +5.70 7827.75 +2314.91 2.78 +2314.97 .93 -25.65 +33. Security & Other Deposits Interest Accured but not Due Other Liabilities Total Current Liabilities Long Term Liabilities & Provisions: (L.97 7827.43 311.02 +376.) Share capital Reserves & Surplus Total Capital & Reserve TOTAL LIABILITIES [C.68 +28.87 12850.79 -0.62 +52.20 0.87 12850.41 -8.40 1092.89 365.41 422.54 +247.23 +26.88 +21.88 9538.Total Fixed Assets TOTAL ASSETS [ C.

61 49.87 0.36 8252.e.35 1061.225.99 51.53 710. the long-term liabilities were increased by Rs 724. 2006 the current liabilities were increased by Rs.27 1218.e.00 0.27 -39.73%.118. by 28.74 43. 3.21 +49.19 +1689. For The Years 2005. by 5.01 0. Comparative Balance Sheet of VSP Ltd.00 50.Interpretation: 1. 2. In Crs) INCREASE /DECREASE AMOUNT(Rs) % CHANGE PARTICULARS ASSETS: Current Assets:(C. The liquidity position of the company during the year 2006-2007 is satisfactory.00 -100 -1. 26.46 +84.76 i..61% shows which that the working capital of the company is strengthened.A) Cash & Bank Balances Sundry Debtors Stock (Inventories) Loans & Advances Other Current Assets Total Current Assets Miscellaneous Assets: Deferred Revenue Expenditure Investments Profit & Loss a/c Fixed Assets: (F.73 in comparison to the previous year i.00 -0.84 -15.2196.18 6049.. During the financial year 2007.e.20 +84. 45.12 100.97% comparison to the previous year 2006.46 .18 +351.32 184. Current assets have been increased by Rs.30 1257.20%.26 -18.71 1.18 +2202.82 -0.00 24.89 1. The fixed assets have been increased by Rs.22 5621. 5.18 0.10 in comparison to previous year i..62 i. 4.14 0.00 905.95 +235.2006 (Rs.03 +42. In comparison to the previous year i..A) Land-Free Hold Land-Lease Hold 2005 2006 3932.40 -42..03 +36.70 166.e.e.58 -2.00 0.09 +116.

80 62.87 218.72 -12.53 67.80 -65.90 4.28 +100 +207.46 3.21 -12.29 269.97 -15.96 +15.83 -0.36 .18 22.04 +17.62 785.98 +158.89 8.43 311.85 3449.04 -21.01 180.79 -11.39 332.04 +95.72 -6.46 0.06 0.78 +10.94 442.71 34.28 +0.84 568.P) Provisions Secured Loans Unsecured Loans Deferred Tax Liability Total Long Term Liabilities & Provisions 14.46 275.40 +10.30 85.89 -4.72 1576.77 +56.39 4.46 1179.27 +4.01 -13.69 +6.49 +99.42 158.86 +1.49 959.51 73.20 1.42 -312.23 +617.10 -33.68 19.29 +1036.49 -16.25 3.87 369.16 12.29 -20.10 +84.20 2.12 716.70 35.92 9498.27 88.51 98.T.94 +16.25 -13.34 +6.44 316.01 +121.72 85.50 -2.17 544.18 0.31 +25.32 +73.88 -1165.29 -3.88 1492.96 +237.65 +17.33 -24.04 120. Bridges & Culverts Buildings Plant & Machinery Furniture & Fittings Locomotives Vehicles Electrical Installations Water Supply & Sewerage systems Miscellaneous Articles Mining Lease Rights Held For Disposal Capital Work-in-progress Total Fixed Assets TOTAL ASSETS [ C.83 +64.52 +34.79 +0.73 2283.L) Sundry Creditors Advances from Customers Other Advances Earnest Money.99 -0.19 1.56 4.A ] LIABILITIES: Current Liabilities: (C.34 -6.Railway Lines & Sidings Roads.37 173.94 712.A+ F.39 102. Security & Other Deposits Interest Accured but not Due Other Liabilities Total Current Liabilities Long Term Liabilities & Provisions: (L.00 58.55 +252.87 -2.28 +166.99 -2.93 -72.60 68.90 10535.40 +447.64 51.

97 0.e. The fixed assets have been decreased by Rs. & RES. & RES.42 +10.32 7827.87 Interpretation: 1.73.31 i. Comparative Balance Sheet of VSP Ltd..92 9498.38 +1036.29%. In Crs) PARTICULARS 2004 2005 INCREASE /DECREASE .00 +100 +4. 5. the long-term liabilities were increased by Rs 617. by 33. For The Years 2004. 2.e.38 +346.32 346.e.70 0.32 0.36% comparison to the previous year 2005. During the financial year 2006. 2004-05 the current liabilities were increased by Rs.P + CAP.2005 (Rs. Current assets during the year 2006 have been increased by Rs.Share Capital & Reserves: (CAP..] 7827.) Share capital Reserves & Surplus Total Capital & Reserve TOTAL LIABILITIES [C.90 10535.1165. In comparison to the previous year i. 64. 3.e.28 i.. by 10.29 in comparison to the previous year i.38 8173.36 in comparison to previous year i.T.e.. The liquidity position of the company during the year 2005-2006 is satisfactory.00 7827. 4.2202.00 +346.40% shows which that the working capital of the company is strengthened.. 36.78%.L + L.

04 +33.44 0.09 22.00 +133.71 1.34 1257.48 51.AMOUNT(Rs) ASSETS: Current Assets: (C.76 210.A) Land-Free Hold Land-Lease Hold Railway Lines & Sidings Roads.16 9099.99 +2572.00 905.32 +551.62 -12.39 4.10 +0.44 +14.85 -30.91 -100.16 -37.53 550.30 706.23 -0.18 1492.00 2914.45 -2.22 +518.40 -13.55 568.20 -252.03 +28.38 -12.38 51.35 +10.78 3.09 +121.16 -24.89 -6.64 51.22 17.01 0.25 1.95 85.80 56.90 +312.01 0.70 25.19 +159.88 2385.22 218.90 4.74 61.61 85.22 -42.90 710.42 +78.02 -53.18 2726.92 98.94 -5.67 -10.04 0.11 35.51 +40.78 +399.88 6049.84 593.07 -45.94 3449.30 0.88 +4.46 0. Bridges & Culverts Buildings Plant & Machinery Furniture & Fittings Locomotives Vehicles Electrical Installations Water Supply & Sewerage systems Miscellaneous Articles Mining Lease Rights Held For Disposal Capital Work-in-progress Total Fixed Assets TOTAL ASSETS [ C.52 .08 14.03 -2.A) Cash & Bank Balances Sundry Debtors Stock (Inventories) Loans & Advances Other Current Assets Total Current Assets Miscellaneous Assets: Deferred Revenue Expenditure Investments Profit & Loss a/c Fixed Assets: (F.25 58.91 +0.L) Sundry Creditors Advances from Customers Other Advances Earnest Money.30 97.37 -108.67 -892.18 25.39 -12.82 9498.90 -36.06 0.06 +3.62 49.68 62.39 102.A + F.51 110.A ] LIABILITIES: Current Liabilities: (C.61 -51.87 +3322.08 +189.25 2.71 3932.60 -2923.08 +70.87 -4.09 43.00 -2008.28 -0. Security & Other Deposits % CHANGE 1359.28 -0.86 -18.45 0.03 +0.85 6372.25 +10.28 +6.93 +0.75 57.90 470.12 24.21 -12.00 25.96 0.31 100.74 4.00 -11.00 -68.22 +75.40 -3.

31 7827.46 +1. During the financial year 2005.14 337.e.3322..e. 12.] 1.T.94 712.39 332.78 in comparison to the previous year i. The fixed assets have been decreased by Rs.. by 33.42 158.00 7827.32 +0.01 9099.00 +100.2923...99 1078.38 Interpretation: 1.e.49 -33. 2.68 269.00 +395. 4.P + CAP.86 in comparison to previous year i. by 45.T.00 193.49 +765. 2005 the current liabilities were decreased by Rs.65 -1.01 +0.e. the long-term liabilities were increased by Rs 765.31 7827.00 +0.01 0.36 i.00 0.e.96 156. In comparison to the previous year i.00 0.36 +109. 3. & RES.L + L.366.42 +158. & RES.44 i.82 2.05 -366.94 442.) Share capital Reserves & Surplus Total Capital & Reserve TOTAL LIABILITIES [C. .88%. 395.44 +72.85% shows which that the working capital of the company is weakened.90 +399.12 +112.25 -5.28 +100.21 7827.82 9498.27 88.49 959.08 +4.05 +139. Current assets have been decreased by Rs.96%.01 0.51 37.00 +0.77 +442.21% comparison to the previous year 2004.32 0.17 0.P) Provisions Secured Loans Unsecured Loans Deferred Tax Liability Total Long Term Liabilities & Provisions Share Capital & Reserves: (CAP.Interest Accured but not Due Other Liabilities Total Current Liabilities Long Term Liabilities & Provisions: (L.76 +51.

The increase in sales will certainly increase selling expenses and volume of sales.25 9128. Common Size Income Statement of VSP Ltd.1 787.74 4280. In Crs) PARTICULARS Income Gross Sales Less: Excise duty recovered on sales Net Sales Internal Consumption Interest Earned Other revenue Total Expenditure Raw Material Consumed 2008 10433.41 13.35 .46 724. For The Years 2008-2009 (Rs.21 75.83 % change in 2009 103.25 %Change in 2008 104.07 1344. The liquidity position of the company during the year 2004-05 is satisfactory.46 0. The increase in sales lead to an increase in selling expenses but not financial or administrative expenses.13 7.89 7.38 114.69 90.71 5896.34 1. administrative and financial expenses may go up.7 9088. A significant relationship can be established between items of income statement and volume of sales.00 42.5.00 58. In case the volume of sales increases to a considerable extent.74 100.91 100.37 88.25 0.22 2009 10410.01 0.02 10104.63 1282.27 9992.79 0.03 12.64 91. Common Size Income Statement: The items in the income statements can be shown as percentages of sales to show the relation of each item to sales.

38 79.28 19.32 4.43 10.42 0.81 286.98 -11.59 2026.39 70.38 -4.12 1.13 -4.99 20.38 0.45 4.55 4 988.17 1030.72 0.38 13.55 -916.74 1 709.48 7036.79 306.05 0.00 29.87 2.43 11.93 31.12 -3.74%.96 509.97 0.05 20.97 0.64 2.03 29.Depletion / (Accretion) to Stock of Semifinished/Finished goods Employee's remuneration & benefits Stores & spares consumed Power & fuel Repairs & Maintenance Freight outward Other expenses & Provisions Interest Depreciation Wealth Tax Gross Expenditure Less: Inter account adjustments.92 39.31 149.13% .00 70.48 2.66 21.77 2994.59 -746.06 258.46 0.39 2995.84 3.63 1335.39 -0.23 340.00 4.39 38.91% to 0.01 80.14 240.37 0.44 17.68 501.17 1942.71 2022.37 1.81 3 652.raw material mining cost Net Expenditure Profit for the year Prior period adjustmentsNet credit Profit Before Tax Provision For Taxation Current Tax Fringe Benefit Tax Earlier year adjustments Defferred Tax Profit After Tax Balance of Profit brought forward from previous year Amount available for appropriation -343.07 5.12 88.57 3 652.06 8082.57 471.26 3.81 125.77 128.22 36.55 -9.55 0.11 36.04 0.06 -7.77 38.15 6997.15 49.01 0.59 1.36 -1188.72 364.10 0.07 11.31 3.96 3.65 1156.21 0.36 Interpretation: The common size income statement reveals that there is decrease in other revenue from 0.73 0.53 377.89 -0. The Internal Consumption is increased to 1.89 8120.

from 0.89% and the Interest Earned is increased to 7.79% from 7.25% 2008-09. Overall income position was good. The net expenditure was increased to 79.99% from 70.03% due to increase the expenditure like Raw Material Consumed, Employee's remuneration & benefits, Stores & spares consumed, Power & fuel and Repairs & Maintenance. The profit after tax is decreased to 13.22% from 19.44% in 2008-09. The overall profitability is satisfactory.

Common Size Income Statement of VSP Ltd. For The Years 2007-2008 (Rs. In Crs)
PARTICULARS

2007 9150.57 1217.91 7932.66 28.40 557.21 75.36 8593.63 3889.04 23.76 740.94 357.27 242.95 109.70 0.76 315.26

2008 10433.07 1344.70 9088.37 88.46 724.64 91.27 9992.74 4 280.22 -343.17 1 030.72 364.06 258.81 125.79 _ 306.96

% Change in 2007 106.48 14.17 92.31 0.33 6.48 0.88 100.00 45.25 0.28 8.62 4.16 2.83 1.28 0.008 3.67

% Change in 2008 104.41 13.46 90.95 0.88 7.25 0.91 100.00 42.83 -3.43 10.31 3.64 2.59 1.26 _ 3.07

Income Gross Sales Less: Excise duty recovered on sales Net Sales Internal consumption Interest earned Other revenue Total Expenditure Raw materials consumed Depletion / (Accretion) to Stock of Semifinished/Finished goods Employees’ remuneration & benefits Stores & spares consumed Power & fuel Repairs & maintenance Contributions to joint plant committee funds Freight outward

Other expenses & provisions Interest & Finance charges Depreciation Wealth tax Gross Expenditure Less: Inter account adjustments-raw material mining cost Net expenditure Profit for the year Prior period adjustmentsNet credit Profit Before Tax Provision for Taxation Current Tax Fringe Benefit Tax Earlier years adjustments Deferred Tax Net Profit Balance of Profit brought forward from previous year Balance carried to Balance Sheet

322.67 48.42 351.60 0.52 6402.89 28.49 6374.40 2219.23 3.11 2222.34 793.75 4.21 86.38 -25.43 1363.43 346.38 1709.81

509.93 31.57 471.55 0.48 7036.92 39.15 6997.77 2994.97 0.39 2995.36 1188.13 4.43 -11.77 -128.17 1942.74 1709.81 3652.55

3.75 0.56 4.09 0.006 74.51 0.33 74.18 25.82 0.04 25.86 9.24 0.05 1.01 -0.29 15.87 4.03 19.89

5.10 0.32 4.72 0.004 70.42 0.39 70.03 29.97 0.003 29.98 11.89 0.04 0.12 1.28 19.44 17.11 36.55

Interpretation:
The common size income statement reveals that there is increase in other revenue from 0.88% to 0.91%. The Internal Consumption is increased from 0.33% to 0.88% and the Interest Earned is increased to 7.25% from 6.48% 200708. Overall income position was good. The net expenditure was decreased to 70.03% from 74.18% due to decrease the expenditure like Raw Material Consumed, Stores & spares consumed, Power & fuel, Repairs & Maintenance

and Freight outward. The profit after tax or net profit is increased from 15.87% to 19.44% in 2007-08. The overall profitability is satisfactory.

Common Size Income Statement of VSP Ltd. For The Years 2006-2007 (Rs. In Crs)
PARTICULARS

2006

2007

% Change in 2006 109.39 15.16 94.24 0.11 4.57 1.09 100

% Change in 2007 106.48 14.17 92.31 0.33 6.48 0.88 100

Income Gross Sales Less: Excise duty recovered on sales Net Sales Internal consumption Interest earned Other revenue Total Expenditure Raw materials consumed Depletion / (Accretion) to Stock of Semifinished/Finished goods Employees’ remuneration & benefits Stores & spares consumed Power & fuel Repairs & maintenance 3584.62 65.85 572.34 338.95 235.10 97.24 3889.04 23.76 740.94 357.27 242.95 109.70 46.18 0.85 7.37 4.37 3.03 1.25 45.25 0.28 8.62 4.16 2.83 1.28 8490.88 1176.73 7314.15 8.26 354.87 84.31 7761.59 9150.57 1217.91 7932.66 28.40 557.21 75.36 8593.63

008 3.38 0.99 346.006 74.43 1363.52 6402.69 6.33 74.33% from 0.94 -158.03 19.32 75.38 24.26 0.67 3. The Internal Consumption is increased to 0.03 31.67 4.21 86.06 0.81 0.12 0.73 306.76 315.49 6374.67 48.Contributions to joint plant committee funds Freight outward Other expenses & provisions Interest & Finance charges Depreciation Wealth tax Gross Expenditure Less: Inter account adjustments-raw material mining cost Net expenditure Profit for the year Prior period adjustmentsNet credit Profit Before Tax Provision for Taxation Current Tax Fringe Benefit Tax Earlier years adjustments Deferred Tax Net Profit Balance of Profit brought forward from previous year Balance carried to Balance Sheet 0.11% and the Interest Earned is increased to 6.89 Interpretation: The common size income statement reveals that there is decrease in other revenue from 1.40 5.05 0.04 25.95 3.34 6.48% from 4.57 0.29 0.82 0.89 28. .43 346.42 351.05 1.12 25.40 2219.34 793.86 9.14 -11.02 16.74 24.75 4.75 0.09 0.24 0.09 24.87 4.56 4.01 2.57% 2006-07.46 -0.009 3.23 1252.51 0.38 -25.29 15.06 415.71 255.97 3.38 1709.51 474.09% to 0.82 1889.18 5903.002 76.48 5878.60 0.88%.90 1882.37 -905.11 2222.23 3.35 0.26 322.

09 2.73 7314.95 235.Overall income position was good.25 313.49 -4. Common Size Income Statement of VSP Ltd. Power & fuel and Freight outward.41 4. The profit after tax or net profit is decreased to 15.90 7646.22 0.26 354.63 -310. The net expenditure was decreased to 74.73 8181.57 1.59 .34 338. In Crs) PARTICULARS 2005 2006 %Change in 2005 106.76 3584.88 1176. Stores & spares consumed.09 2.99 10.26 0.11 4.62 65.12% from 75.14% in 2006-07.59 120.82 158.31 7761.25 0.24 0.06 6.18 0.74% due to decrease the expenditure like Raw Material Consumed.06 93.37 3.09 100 46.39 15.24 0.46 216.009 % Change in 2006 109.15 8.03 1.87 84.83 1.87% from 16.84 6.009 Income Gross Sales Less: Excise duty recovered on sales Net Sales Internal consumption Interest earned Other revenue Total Expenditure Raw materials consumed Depletion / (Accretion) to Stock of Semifinished/Finished goods Employee’s remuneration & benefits Stores & spares consumed Power & fuel Repairs & maintenance Contributions to joint plant committee funds 3019.41 0.39 490. The overall profitability is satisfactory.07 1.16 94.74 96.58 100 39. For The Years 2005-2006 (Rs.85 572.34 821.85 7.37 4.50 7359.15 8490.10 97.

09%.57 0.07 26. The Internal Consumption is increased to 0.001 63.38 24.05 2.57% from 2.06 415.18 0 158.71 255.37 -905.07% 2005-06.63 558.09 -2914.69 6.55 0.31 75.02 36.11 424.76 306.49 2008.22 4834.01 24.35 0.55 0.87 2253.Freight outward Other expenses & provisions Interest & Finance charges Depreciation Wealth tax Gross Expenditure Less: Inter account adjustmentsraw material mining cost Net expenditure Profit for the year Prior period adjustments.96 2811.12 0.99 474.48 3.29 0.Net credit Profit after Prior Period Adjustments Depreciation short provided in earlier years Profit before Tax Provision for Taxation Current Tax Fringe Benefit Tax Deferred Tax Net Profit Balance of (loss) brought forward from previous year Balance carried to Balance Sheet 299.92 3.08 -905.99 346.44 2812.06 0.19 1.38 1.48 5878.67 4.53 301.09% and the Interest Earned is increased to 4.51 0 1889.13 -11.51 3.77 0.46 Interpretation: The common size income statement reveals that there is decrease in other revenue from 1.58% to 1.14 0 2.05 11.78 7.74 24.85 6.94 158.94 0.26 0.02 16.97 3.34 0 24.90 1882.40 5.95 3.26 -38.23 36.11 -11.19 0.12 4859.002 76.23 1252.11% from 0.18 5903.82 1889. .15 5.34 87.31 29.32 63.03 31.18 24.

Employee's remuneration & benefits.48 0.16 3.68 706.52 100.25 5612.17 0.26% in 2005-06.59 120.84 6.68 3019.13% from 26.60 31. The overall profitability is satisfactory.43 481.46 0.09 -0.76 36.93 12.73 220.19 3.53 8.50 0.72 1. In Crs) PARTICULARS 2004 6169.90 1.82 310.83 10.34 2005 8181.00 -25.63 490.58 97. For The Years 2004-2005 (Rs.57 6.92 1.46 216.34 821.74% from 63. Common Size Income Statement of VSP Ltd.95 6.00 Income Gross Sales Less: Excise duty recovered on sales Net Sales Internal consumption Accretion/ (depletion) to Stock of Semifinished/Finished goods Interest earned Other revenue Total Expenditure Raw materials consumed Employees’ remuneration & benefits Stores & spares consumed Power & fuel Repairs & maintenance Contributions to joint plant committee funds 2050. Stores & spares consumed. Power & fuel and Repairs & Maintenance.50 5.00 % Change in 2005 102.41 0. The net expenditure was increased to 75.04 84.32 92.35 0.Overall income position was good.01 37.18 5463.50 7359.51 0.39 158.25 313.90 7956.94 2. Increase in the expenditure resulted in fall in profit after tax.23% due to increase the expenditure like Raw Material Consumed.46 100.56 2.15 347.08 3.06 93. The profit after tax is decreased to 16.54 % Change in 2004 109.19 138.99 1.009 .

35 2811.53 301.18 -4461.08% from 0.67 35.35 7.76 3.99 - 4.09 1.27 48.33 0.99% from 0.001 64.83 27.08 -905.87 2253.27 0.65 0.57 -79.76 87.09% and the Interest Earned is increased to 1.19 1.30 64.49 2008. The net expenditure was decreased to .12 5169.18 1547.12 4112.Freight outward Other expenses & provisions Interest & Finance charges Depreciation Wealth tax Gross Expenditure Less: Inter account adjustments-raw material mining cost Net expenditure Profit for the year Prior period adjustmentsNet credit Profit after Prior Period Adjustments Depreciation short provided in earlier years Profit before Tax Provision for Taxation Current Tax Deferred Tax Net Profit Balance of loss brought forward from previous year Balance of loss carried to Balance Sheet 255.27 26.18 158.78 0.24 -36.05 11.17 1500.63 558.32 0.22 5145.92 25.76 46.57 28.42 1547.52%.65 186.15 0.01 73.7 4133.87 8.56 3.56% 2004-05.46% to 1.27 -2914.18 1547. The Internal Consumption is decreased to 0.14 5.09 -2914.33 1.62 -11.74 0.38 73.57 3.02 27.57 24.19 0.89 457.09 299.49 -51.02 35.99 27.29 21.11 424.39 Interpretation: The common size income statement reveals that there is decrease in other revenue from 2.33 0. Overall income position was good.97 0.44 2812.

61 191.15 1958.34 0.11 93.82 1569.46 66.35 1. The Common size Balance Sheet consists of two columns for the original data. Stores & spares consumed.27% due to decrease the expenditure like Employee's remuneration & benefits.40 6624.13 8. Power & fuel.92 96.56 37.74 1.019 0.49 292.10 5.85 1.32 0.53 3215. The studies throw a lot on financial policies followed by management.01 ---0.27 11859.53 106.28 12.08 18.04 0.48 0.63 ---85.07 3. In Crs) 2008 Particulars ASSETS: Current Assets: (C.57% in2004-05.41 176.59 0. Common Size Balance Sheet: Common size Balance Sheet reveals the cause for changes in the financial position on amount of various transactions.001 0. Bridges & Culverts Amount Percentag e % Percentage % Amount 2009 7699.A) Land-Free Hold Land-Lease Hold Railway Lines & Sidings Roads.27 11.91 77. The profit after tax or net profit is decreased to 25.17 0.43 11804.87 ---0.05 ---51.81 50. The third column and fourth columns are used to show percentage increase or decrease.60 .64. Repairs & Maintenance and Freight outward.006 0. For The Years 2008-2009 (Rs.69 1.24% from 27.67% from 73.91 258. Common Size Balance Sheet of VSP Ltd.67 1.A) Cash & Bank Balances Sundry Debtors Stock (Inventories) Loans & Advances Other Current Assets Total Current Assets Miscellaneous Assets: Deferred Revenue Expenditure Investments Profit & Loss a/c Fixed Assets: (F. The overall profitability is satisfactory.

50 468.89 866.02 0.18 0.04 26.57 99.48 0.15 3.78 9.P) Provisions Secured Loans Unsecured Loans Deferred Tax Liability Total Long Term Liabilities & Provisions Share Capital & Reserves: (CAP.03 0.51 51.56 0.53 907.91 25.71 1.04 0.03 100.53 2.72 11481.79 6.07 14.00 .64 0.04 100.L + L.A + F.09 1610.32 3658.51 0.03 0.50 600.31 1620.91 100.77 0.87 0.18 0.97 1.69 4.72 23.15 12419.80 54.81 5.54 1149.93 0.45 2560.73 448.46 1.431 1581.12 2185.29 0.11 3.63 31.59 75.00 100.32 3.11 2.005 4617.23 7827.19 3471.44 137.13 5.48 44.05 0. & RES.72 100.00 17733.43 137.68 44.35 2.31 136. Security & Other Deposits Interest Accured but not Due Other Liabilities Total Current Liabilities Long Term Liabilities & Provisions: (L.01 0.02 0.001 6.T. & RES.43 501.04 0.P + CAP.66 22.51 3.39 0.14 25.42 3.14 1134.81 5874.49 2752.65 0.001 26.78 32.67 10.L) Sundry Creditors Advances from Customers Other Advances Earnest Money.] 474.92 15276.12 9.02 0.78 0.47 332.28 0.04 15276.89 70.36 11.07 0.01 13.22 0.36 6.T.04 2087.Buildings Plant & Machinery Furniture & Fittings Locomotives Vehicles Electrical Installations Water Supply & Sewerage systems Miscellaneous Articles Mining Lease Rights Held For Disposal Capital Work-in-progress Total Fixed Assets TOTAL ASSETS [ C.17 0.) Share capital Reserves & Surplus Total Capital & Reserve TOTAL LIABILITIES [C.80 59.08 3.04 124.39 14.90 0.03 5.31 0.32 4.95 163.70 15.12 0.32 10.00 17733.A ] LIABILITIES: Current Liabilities:(C.78 107.51 7827.17 0.92 4592.

61 11.31% this shows that the company in both the years have financed working capital from long term sources.80 1203.73 and long term funds are 14. 3.43%. The working capital position of the company in both the years is good. In the current year investments in fixed assets are 26. The working capital of the company in the year 2009 is not much better than the year 2008. During the year 2008-09 the company is less traditionally financed as compared to previous year. The analysis of various figures shows that the company for both the years has satisfactory long-term and short term financial position in comparisons the previous year. In 2008-09 the share capital consists of 70. In Crs) Particulars ASSETS: Current Assets: (C.87 % while current liabilities are 14.53 .41 1761.15 50.11 93.15 %.Interpretation: 1.24 55.98 1.40 0. 4. In both the years the company has followed the policy of financing fixed assets from long term funds.69 9. 2. The company has relied less on shareholders fund in the current year.27% of current assets while current liabilities are 10.68 216.54% of total investment.51% and these figures in previous year is 22.36 7699.A) Cash & Bank Balances Sundry Debtors Stock (Inventories) 2007 Amount Percentage % 2008 Amount Percentage % 7194. Common Size Balance Sheet of VSP Ltd. For The Years 2007-2008(Rs. In the previous year the company has 77. In the current year current assets are 66.04% while long term funds are 15.03% of total investment while the percentage is in previous year 75.

A ] LIABILITIES: Current Liabilities: (C.85 0.65 12850.31 136.91 2.70 100.32 4.73 100.95 16.82 2.04 2087.A + F.25 82.65 0.64 4.92 15276.51 12.29 3.90 314.28 0.01 0.91 77.57 99.42 3.11 3.68 44.34 0.49 292.00 1958.64 0.01 ---0.05 ---51.05 ---51.43 11804.66 22.54 .54 28.81 5.16 10.19 2402.96 73.93 0.45 81.29 7.82 1011.65 18.63 3.95 0.22 0. Bridges & Culverts Buildings Plant & Machinery Furniture & Fittings Locomotives Vehicles Electrical Installations Water Supply & Sewerage systems Miscellaneous Articles Mining Lease Rights Held For Disposal Capital Work-in-progress Total Fixed Assets TOTAL ASSETS [ C.39 522.02 0.51 0.21 0. Security & Other Deposits Interest Accured but not Due Other Liabilities Total Current Liabilities 1518.36 11.10 5.L) Sundry Creditors Advances from Customers Other Advances Earnest Money.15 3.75 11.53 0.11 0.02 0.81 474.27 ---0.30 0.10 14.82 1.02 0.19 3471.17 0.90 ---597.74 1.01 0.21 1.41 422.03 ---4.40 0.08 0.39 0.48 10448.08 3.06 7.09 1610.02 82.14 3.A) Land-Free Hold Land-Lease Hold Railway Lines & Sidings Roads.03 5.03 0.74 1.80 59.53 2.07 0.04 0.91 25.01 ---0.50 600.67 10.90 0.43 926.02 0.57 0.92 96.83 119.29 0.97 1.89 866.54 18.87 501.15 3.49 68.01 0.59 ---0.03 0.13 0.Loans & Advances Other Current Assets Total Current Assets Miscellaneous Assets: Deferred Revenue Expenditure Investments Profit & Loss a/c Fixed Assets: (F.93 0.01 13.00 365.

) Share capital Reserves & Surplus Total Capital & Reserve TOTAL LIABILITIES [C.29 2301.51 100.77 604.18 0.00 15276.02 8.20 60.27 17. & RES.35 2.75 100.P + CAP.70 2.58% while long term funds are 9.32 3653.T.] 12850.00 1092.07 14.27 % while current liabilities are 21.45 312.41% of current assets while current liabilities are 16. & RES.24% of total investment while the percentage is in previous year 74.P) Provisions Secured Loans Unsecured Loans Deferred Tax Liability Total Long Term Liabilities & Provisions Share Capital & Reserves: (CAP.04 51.93% this shows that the company in both the years have financed working capital from long term sources.21 %.32 10.37% of total investment. In the previous year the company has 81.31 74.51 291.91 1581. 2. During the year 2007-08 the company is more traditionally financed as compared to previous year.L + L.48%.95 163.92 75.37% and these figures in previous year is 22.15 Interpretation: 1.72 11481.44 2.78 107. In the current year current assets are77.22 7827. The working capital position of the company in both the years is good. The company has relied more on shareholders fund in the current year. In 2007-08 the share capital consists of 74.72 and long term funds are 3.T.31 7827.71 1.91 13. 3.Long Term Liabilities & Provisions: (L.12 2185.32 1710.50 4.47 332.88 9538. In the current year investments in fixed assets are 18. In both the years the company has followed the policy of financing fixed assets from long term funds.23 23. The working capital of the .

51 73.70 166.03 0.24 1518. In Crs) Particulars ASSETS: Current Assets: (C.06 7.89 1. The analysis of various figures shows that the company for both the years has satisfactory long-term and short term financial position in comparisons the previous year.48 10448.98 1.01 0.74 1.21 0.70 0.56 4.00 24.A) Cash & Bank Balances Sundry Debtors Stock (Inventories) Loans & Advances Other Current Assets Total Current Assets Miscellaneous Assets: Deferred Revenue Expenditure Investments Profit & Loss a/c Fixed Assets: (F.56 10. Common Size Balance Sheet of VSP Ltd.10 14.53 67.15 3. 4.18 0.80 1203.68 216.22 0.04 0.95 16.29 3.11 0.02 0.30 0.21 1.02 0.81 0.71 34.95 0.96 73.12 0.32 184.08 0.68 19.36 1.43 926.00 51.87 0.17 11.64 4.17 544.07 1.24 0.33 0.00 0.90 0.32 0.00 0.19 0.01 ---0.48 0.05 0.01 53.00 50.01 0.45 81.00 7194.35 1061. Bridges & Culverts Buildings Plant & Machinery Furniture & Fittings Locomotives Vehicles Electrical Installations Water Supply & Sewerage systems Miscellaneous Articles Mining Lease Rights Held For Disposal 2006 Amount Percentage % 2007 Amount Percentage % 5621.82 2.16 10.46 3.72 85.40 0.03 0.46 1179.19 12.57 0.58 11.company in the year 2008 is much better than the year2007.69 9.18 0.53 0. For The Years 2006-2007 (Rs.36 8252.00 55.A) Land-Free Hold Land-Lease Hold Railway Lines & Sidings Roads.39 522.25 82.13 0.54 28.03 ---- .64 5.27 1218.00 0.75 78.20 1.36 11.90 314.49 68.

A ] LIABILITIES: Current Liabilities: (C.02 0.29 77.80 1.A + F.P) Provisions Secured Loans Unsecured Loans Deferred Tax Liability Total Long Term Liabilities & Provisions Share Capital & Reserves: (CAP.31 74.93 0.50 4.91 13.89 8.) Share capital Reserves & Surplus Total Capital & Reserve TOTAL LIABILITIES [C.32 1710.44 2. & RES.22 10535.72 1576.75 100.41 422. & RES. In 2007 the share capital consists of 74.T.27 17.87 100 12850.65 18.04 120.61 1.45 365.85 0.73 2283.L + L.29 2301.65 0.T.L) Sundry Creditors Advances from Customers Other Advances Earnest Money. 2007 the company is less traditionally financed as compared to previous year.87 10535.96 7.02 8. i.43 311.77 2.53 2. During the year.20 60.60 68.91 7827.54 18.91 2.19 2402.75 4.37 173.Capital Work-in-progress Total Fixed Assets TOTAL ASSETS [ C.02 82.] 180.40 6.00 Interpretation: 1.77 604.51 291.87 1.14 3.08 2.70 74.65 12850.97 1092.e.19 1.14 0. Security & Other Deposits Interest Accured but not Due Other Liabilities Total Current Liabilities Long Term Liabilities & Provisions: (L.72 21.01 0.00 275.62 785.44 316.29 3.88 9538.29 7.01 14.32 346.83 119.65 3.45 312.51 3.P + CAP.82 1011.21% .68 100 597.38 8173.87 716.64 0.58 7827.70 2.70 100.87 369.

58 %. In the current year investments in fixed assets are 23.68% while long term funds are 11.39 this shows that the company in both the years have financed working capital from long term funds also.40 0.74 43. The analysis of various figures shows that the company for both the years has satisfactory long-term and short term financial position in comparisons the previous year.42% and current liabilities are 16.58 11. 2.00 5621.37%.36 1.01 0.00 53. In the year 2007 current assets are 86.24 7.05 63.35 1061.61 49. 4.69 0.53 710.00 24. In Crs) 2005 Amount Percentage % 2006 Amount Percentage % Particulars ASSETS: Current Assets: (C. The working capital of the company in the year 2007 is much better than the year 2006.48 1.25% of total investment. The working capital position of the company in both the years is good. The company has relied less on shareholders fund in the current year.A) Cash & Bank Balances Sundry Debtors Stock (Inventories) Loans & Advances Other Current Assets Total Current Assets Miscellaneous Assets: Deferred Revenue Expenditure Investments 3932.31% of current assets while current liabilities are 14.52 13.70 166.of total investment while the percentage is in previous year 77.32 0.00 .87 0.18 6049. Common Size Balance Sheet of VSP Ltd.32 184.58 and long term funds are 9.12 100.00 41.24 0. For The Years 2005-2006 (Rs. In both the years the company has followed the policy of financing fixed assets from long term funds.30 1257.45 0.56 10. 3. In the current year the company has 76.27 1218.07 1.36 8252.4% and these figures in previous year is 18.75 78.

54 0.46 2.72 21.90 9.04 120.00 1.17 11.89 8.43 311.39 102.01 1.18 0.80 1.71 1.85 3449.94 4.94 712.01 0.48 0.44 316.46 3.01 14.80 62.50 275.46 0.20 2. Bridges & Culverts Buildings Plant & Machinery Furniture & Fittings Locomotives Vehicles Electrical Installations Water Supply & Sewerage systems Miscellaneous Articles Mining Lease Rights Held For Disposal Capital Work-in-progress Total Fixed Assets TOTAL ASSETS [ C.31 100 0.87 369.88 1492.22 14.37 0.71 34.66 1.04 0.87 10535.10 716.77 2.53 67.39 4.40 6.42 158.33 0.A + F.90 0.39 332.12 2.T.20 1.L) Sundry Creditors Advances from Customers Other Advances Earnest Money.01 180.00 15.97 .A ] LIABILITIES: Current Liabilities: (C.54 0.25 3.87 0.65 0.02 0.84 568.16 9498.66 6.71 0.17 544.51 3. Security & Other Deposits Interest Accured but not Due Other Liabilities Total Current Liabilities Long Term Liabilities & Provisions: (L.18 22.51 73.72 1576.27 88.65 3.61 1.67 10.03 0.64 5.14 0.73 2283.96 7.45 269.30 1.P) Provisions Secured Loans Unsecured Loans Deferred Tax Liability Total Long Term 905.99 51.72 85.00 50.94 442.03 0.30 85.62 36.83 0.46 1179.81 0.60 68.02 3.00 0.68 19.62 785.18 0.Profit & Loss a/c Fixed Assets: (F.37 173.A) Land-Free Hold Land-Lease Hold Railway Lines & Sidings Roads.56 4.68 100 218.03 0.90 4.70 0.19 1.51 98.54 0.04 0.50 7.64 51.00 0.08 2.01 0.08 0.01 0.00 58.89 1.16 0.23 0.19 0.19 12.49 959.12 0.70 35.06 0.05 0.

In both the years the company has followed the policy of financing fixed assets from long term funds. i.40 0.34% and these figures in previous year is 23.Liabilities & Provisions Share Capital & Reserves: (CAP. The working capital of the company in the year 2006 is much better than 2005. The company has relied less on shareholders fund in the current year. 2.90 100 10535. So financial structure of current year is less safe as compare to previous year.29 3. In 2006 the share capital consists of 77.67% of current assets while current liabilities are 10.32% while long term funds are 7. & RES.) Share capital Reserves & Surplus Total Capital & Reserve TOTAL LIABILITIES [C.29 77. .4% this shows that the company in both the years have financed working capital from long term funds also.00 7827.40 7827.32 0. During the year. 2006 the company is less traditionally financed as compared to previous year.00 82.32 82.38 8173.e. In the year 2006 current assets are 76.50%.75%.68 and long term funds are 11. In the current year investments in fixed assets are 26.T.58% of total investment while the percentage is in previous year 82.31% and the current liabilities are 15.32 346.33% of total investment. The analysis of various figures shows that the company for both the years has satisfactory long-term and short term financial position in comparisons the previous year. In the current year the company has 73. 4. The working capital position of the company in both the years is good.87 100 7827.] 9498. 3.70 74.58 Interpretation: 1.L + L. & RES.P + CAP.

45 0.94 9099.69 0.28 70.92 97.31 100 .25 3.03 0.A) Cash& Bank Balances Sundry Debtors Stock (Inventories) Loans & Advances Other Current Assets Total Current Assets Miscellaneous Assets: Deferred Revenue Expenditure Investments Profit & Loss a/c Fixed Assets: (F.71 0.88 1492.01 0.90 41.62 706.27 0.03 0.54 0.71 1. For The Years 2004-2005 (Rs.90 24.16 9498.30 1257.22 1.78 25.08 0.00 58.05 63.24 7.30 110.76 6.12 100.01 0.62 36.68 593.94 7.00 905.52 26.55 2385.A ] 1359.21 0.09 51.74 43.97 0.05 0.09 0.Common Size Balance Sheet of VSP Ltd.00 9.95 25.71 85.30 85.02 0.84 568.11 4.53 710.05 0.00 15.25 17.18 6049.00 32.39 4.23 0.74 0.85 3449.03 100 3932.54 0.01 0.04 25.18 2. In Crs) 2004 Amount Percentage % 2005 Amount Percentage % Particulars ASSETS: Current Assets:(C.99 51.62 6.37 0.34 550.00 0.82 14.03 0.57 0.88 61.61 49.16 0.45 0.A) Land-Free Hold Land-Lease Hold Railway Lines & Sidings Roads.22 14.70 35.00 2914.46 0.51 98.90 0.01 0.66 6.27 0.25 6372.80 62.28 29.94 0.01 1.40 0.18 22.08 56.05 0.19 0.48 1.67 0.A+ F.48 1.52 13.06 0.31 2726.01 1. Bridges & Culverts Buildings Plant & Machinery Furniture & Fittings Locomotives Vehicles Electrical Installations Water Supply &Sewerage systems Miscellaneous Articles Mining Lease Rights Held For Disposal Capital Work-in-progress Total Fixed Assets TOTAL ASSETS [ C.

04 0.00 7827.01 3.94 4. In both the years. During the year i.10 7827.17 0.63 0.M + CAP.00 0. The company has less relied on shareholders' funds in the current year compared to previous year.40 100 Interpretation: 1.20 2.00 7827.39 332.01 0.41%.41 0.02 3. In the year 2004 investments in fixed assets are 37.68 1.34%.L) Sundry Creditors Advances from Customers Other Advances Earnest Money.T. 2004 is less traditionally financed comparison to previous year.14 337. while long-term funds 0.66 1. The figures in 26.67 10.64 51.51 37.12 2.83 0.46 2.00 2.02 100 7827.17 2.32 9498.94 712.75 57.57% and . the company has followed the policy of financing fixed assets from long-term funds.30 1.94 442.00 0. & RES. 2.90 82.] 470.40 0.01%.) Share capital Reserves & Surplus Total Capital & Reserve TOTAL LIABILITIES [C.49 959.L+ L.50 156.00 86.22 1.96 0..31 9099. Security & Other Deposits Interest Accured but not Due Other Liabilities Total Current Liabilities Long Term Liabilities & Provisions: (L.99 1078.40% of total investment while the percentage in previous year 86.50 7.08 0.32 0.13 269.42 158.32 0.82 5.71 11.54 0.e.00 82. In 2005 the share capital consists of 82.LIABILITIES: Current Liabilities: (C.72 0.&RES.39 102.76 210.90 4.P) Provisions Secured Loans Unsecured Loans Deferred Tax Liability Total Long Term Liabilities & Provisions Share Capital &Reserves :( CAP.T.85 218.82 86.00 193.31 0.02 0.27 88.

Ratio Analysis: Financial analysis depends to very large extents of the use of ratios through there are other equality important tools of such analysis.42% and current liabilities are 14. The analysis of figures shows that the company for both the years has satisfactory long-term and short-term financial position in comparison of previous year. In the year 2005 current assets are 72. The working capital of the company in the year 2005 is much better than the year 2004.long-term funds are 2.45% and current liabilities are 13.56%. 3.99%. RATIO ANALYSIS Various ratios are calculated in the following tables to understand the performance of the company. Thus. 4. a direct examination of the magnitude of two released items is some what enlightening but the comparison is greatly facilitated by expressing the relationship as a ratio. The working capital of the company is good in both the years.59%. This shows that both the years the company has financed funds from long-term sources. The current assets comprise 62. LIQUIDITY RATIOS Current Ratio: Formula: Current Assets Current Ratio = Current Liabilities .

63.63 in the year 2008-09. The current ratio of the year 2005-06 was highest current ratio 5. It shows that the firm was able to meet its obligations.2 compare the all years.63 Interpretation: The current ratio for the year 2008-09 was 4.63 of Current Assets.97 3.15 1587.6 11859.52 8252.00 10448.32 Current Liabilities (Cr) 1424.20 4.1 11804. Quick Ratio: Formula: Quick Assets Quick Ratio = Current Liabilities Year wise quick assets and current liabilities . but coming to years it was falling down to 4.that is for every rupee of current liability the firm is holding 4.70 4.Year Wise Current assets and Current liabilities Years 2004-05 2005-06 2006-07 2007-08 2008-09 Current Assets (Cr) 6047.62 2560.25 5.79 Ratio 4.3 3191.86 2104.

55 Ratio 2.09 5971.06 Interpretation: The quick ratio for the year 2008-09 was 2. for every one rupee of quick liabilities the firm holding 2.4 8644.06.32 Ratio 2.76 3. That is.15 1587.6 Current Liabilities 1335.96 10043.14 2.06. but now was falling down to 2.76 .Years 2004-05 2005-06 2006-07 2007-08 2008-09 Quick Assets 4082.87 3.71 7725.30 3191.67 3.76. Quick ratio was highest in the year 2005-06 was 3.06 of quick assets. Cash Ratio: Formula: Cash & Marketable Securities Cash Ratio = Current Liabilities Year wise current liabilities and cash position (Rs in Crores) Years 2004-05 Cash 3932.62 4181.86 2104.04 Current Liabilities (Cr) 1424.

17 1587.42 2. LEVERAGE RATIOS Debt –Equity Ratio: Formula: Total Debt Debt ratio = Equity Debt –Equity Ratio for last 5 years (Rs in Crores) Years 2004-05 2005-06 2006-07 Total Debt 531. That is.41 1.96 Equity 7827.54 3.70 7194. This could be obtained due to increase in its turnover.2005-06 2006-07 2007-08 2008-09 5621.32 3.86 2104.31 7827.31 7827.66 7699.11 6624.58 Interpretation: The cash ratio for the year 2008-09 was 1.36 457.059 0.31 Ratio 0. the firm is able to maintain nearly 50% of cash reserves in its current assets. This indicates that’s the firm’s cash position is satisfactory.62 4181.58 cash in its current assets.30 3191.0117 .58 that is for every one rupee of current liabilities the firm is holding 1.59 916.067 0.

This relationship describes the lender’s contribution for each rupee of the owner’s contribution. This ratio shows that debt is of the equity.2007-08 2008-09 440. Proprietary Ratio: Formula: Equity share capital Proprietary Ratio = Total tangible Assets X 100 Proprietary Ratio for last 5 years Years 2004-05 2005-06 2006-07 Shareholders funds 7827.12.89 1051.76 7827.46 Ratio 91. This less debt indicates less risk to shareholders. Lender’s contribution is times of owner’s contribution for 2007-08. Public sector companies are expected to maintain 1:1 ratio. Under unfavorable conditions.54 744.73 1007.31 Total net Assets 8549.31 7827.97 .04 60. It is clear that from debt-equity ratio that VSP`s lenders have contributed fewer funds than owners have. firms desire to use a low debt-equity ratio.056 0.12 Interpretation: The Debt-Equity ratio for the year 2008-09 was 0.31 7827.31 7827.31 0.99 12836.

This ratio reflects that the shareholder’s contribution was 44.66 9088.91 6.31 15276.99 1210.16 .50 5.71 7932.24 44.46 17733. This relation describes shareholders contribution for each rupee of the total net assets. Inventory Turnover Ratio: Formula: Net Sales Inventory Turnover Ratio = Inventories Year Wise Inventory Turnover Ratio Years 2004-05 2005-06 2006-07 2007-08 Net Sales 7359.80 1761. This shows that the firm has increased it’s contribute to the assets.15 Ratio 7.2007-08 2008-09 7827.37 Inventories 980.84 7305.31 7827.43 51.13.55 5.82 1236.13 Interpretation: The Proprietary ratio for the year 2008-2009 was 44.13 of the total net assets.

80 Ratio 149. Normally.28 2.83 times. Debtors Turnover Ratio: Formula: Net Sales Debtors Turnover Ratio = Debtors Year Wise Debtors Turnover Ratio Years 2004-05 2005-06 2006-07 Net Sales 7359.60 .30 165.84 7305.66 Debtors 49.29 44. higher the ratio indicates the better inventory management.10 36.71 7932. It shows that there is a rapid turning of the inventory into receivables through sales.2008-09 9128.83 Interpretation: The Inventory turnover ratio for the year 2008-09 was 2. Hence. That is. the firm is able to convert its inventory for nearly 6 times within a year. it is evident that the increase in the ratio is obtained due to increase in its turnover. Though the ratio is not so high it is reasonably high.38 3215.65 216.

97 3.60 97.44 8.30 47.37 9128.75 . the firm is able to convert Credit Sales (Debtors) into Cash.72 Interpretation: The Debtors turnover ratio for the year 2008-09 was 47.10 36.38 93.30 Ratio 2.29 44.2007-08 2008-09 9088.25 9.92 times.27 97.41 191. That is. Debtors Collection Period Ratio: Formula: 365 Debtors Collection Period Ratio = Debtors Turnover Ratio Year Wise Debtors Collection Period Ratio Years 2004-05 2005-06 2006-07 2007-08 Days 365 365 365 365 Debtors Turnover Ratio 149.

72 7.56 .37 Net Fixed Assets 2441.26 1790.52 4.2008-09 365 47.43 6.71 7932. This shows that the debt from the debtors is collected very soon.64 Ratio 3.30 2078.66 9088.84 7305. Fixed Assets Turnover Ratio: Formula: Net Sales Fixed Assets Turnover Ratio = Net Fixed Assets Year Wise Fixed Assets Turnover Ratio Years 2004-05 2005-06 2006-07 2007-08 Net Sales 7359.01 3.64 times in a year.64 Interpretation: The firm is able to turnover its Debtors for 7.46 1384. but it was falling next years. Debtors Collection Period Ratio was highest in 2006-07.

10 . Interpreting the reciprocal of this ratio. one may say that for generating a sale of one rupee.37 6664. Working Capital Turnover Ratio: Formula: Net Sales Working Capital Turnover Ratio = Net Working Capital Year Wise Working Capital Turnover Ratio Years 2004-05 2005-06 Net Sales 7359.43 times investment in fixed assets.24 times.2008-09 9128.71 Net Working Capital 4623. the company needs 0.38 1256.14 Ratio 1.24 Interpretation: The ratio for the year 2008-09 was 7.84 7305.59 1.25 7.

77 Share Capital 7827.00 0.80 8612.37 9128. PROFITABILITY RATIOS Return on Capital: Formula: Net Profit after Interest Return on Capital = Before Tax Share Capital Year Wise Return on Capital Ratio Years 2004-05 Profit Before Tax 2253.95 1.2006-07 2007-08 2008-09 7932.18 Interpretation: The ratio for the year 2008-09 was 1.38 8343.66 9088.97 7678.79 . Interpreting the reciprocal for the year 2007-08 only 1.31 Ratio 28.06 1.06 of net current assets is used to generate 1 rupee of sales.18 times.

51 2222.27 25.89% of return earned on the book value of share capital.89%.31 7827.2005-06 2006-07 2007-08 2008-09 1889.59 7827.34 2995.31 7827.89 Interpretation: The Return on capital in the year 2008-09 was 25. This ratio indicates that the firm is able to generate 25.14 28. .36 2026.31 7827.39 38.31 24.

The study analyzed the company’s success in being able to effectively manage its day to day requirements pertaining to cash and funds flow and effectively channelizing the short term and long term funds of the company to meet the requirements. The performance of the Company in terms of both Production and Sales Revenue has been satisfactory. it has presented a broader picture of the financial position of the company. the Company surrounded various adverse situations during the past 25 years and has now been conferred the status of Mini Ratna by now been conferred the status of Mini Ratna by Government of .Chapter-V Summary and Suggestions SUMMERY This study concentrated on the financial state of affairs of the company RINL.It involved study of Balance sheet profit and loss account and ratio analysis and also their comparison over the last five years.

2) Since the firm performance is largely dependant on availability of raw materials. 3) The present level of the cash is Rs 7106 crores.  The analysis for the purpose of the investing in shares generally concentrates on the return on equity of vsp.  The debt capital is less than the share capital so.  Even though profit before tax (PBT) reduced by 969 crores in year 200809 compared to last year.  Working capital position of the company is in satisfactory position.India . SUGGESTIONS 1) High profit realization by selling the products in higher margins will eventually result in higher cash accrual and hence higher credit rating.  Finally total assets of the company increased by 16% as whole the financial position is satisfied. this can be used in . The Company’s plan to expand its capacity to 6. it reveals that the company in the high liquidity position. which is increasing.3 mtpa of liquid steel has been approved by Government of India and the project is under progress. FINDINGS  Fixed assets forms more than 25% to the total assets in the financial year 2008-09.  Debt capital is less than the equity and it shows the economical strength of the company. therefore it is a good bet for investment subjected to availability of shares. the company is in a good financial position. In order to avoid the uncertainties in acquiring the raw materials New and innovative steps will be taken to effectively utilize the surplus funds.

. between current assets and current liabilities at the optimum level.e. . 6) The company should take proper steps to reduce the expenses and thoroughly seek for maximum gains. CONCLUSION The Visakhapatnam Steel Plant has been dedicated to nation in 1992 and it is one of the major steel plants in the Asia and having much more capital investment. But the top management of VSP conducts so many training and development programs to improve their performance. 5) Standardization of general stores material and spares and reduce the number of items. not only this but also frequent technological changes due to the above factors in the initial stage. We know that the Visakhapatnam Steel Plant as a large organization might have long gestation period and while establishing the Visakhapatnam Steel Plant so much of lands were taken from the local people and provided the jobs to them in VSP thought they may not skillful.expansion II in order to maintain the current ratio i. This will result in better sales realization and higher profits. 4) The other main area where RINL has tremendous scope for improvement is in manufacturing value added products.

66 crores as a profit for the year 2002.The VSP incurred some losses but with the remedial measures taken by the top management the past scenario was changed and the organization was stepped towards the profits and recorded 449. However the top management must take care to improve the profitability and must try to reduce / remove the accumulated losses.PANDEY  FINANCIALMANAGEMENT PRASANNA CHANDRA OTHER SOURCES: .M. which is important for the wealth of the organization. BIBILOGRAPHY  FINANCIAL MANAGEMENT I.

The Hindu.   Annual Reports of Rashtriya Ispat Nigam Limited Information from (www.com) General Articles And Magazines Of Rashtriya Ispat Nigam Limited  Newspapers: Deccan Chronicle. .vizagsteel.

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