S.V.

Institute Of Manage ment, Kadi 1

1.0 INTRODUCTION OF THE COMPANY:

Jindal Steel and Power Limited (JSPL) is one of India's major steel producers with a significant
presence in sectors like Mining, Power Generation and Infrastructure.

With an annual turnover of over US$ 3.6 billion, JSPL is a part of the
US$ 18 billion diversified O. P. Jindal Group and is consistently tapping new opportunities by
increasing production capacity, diversifying investments, and leveraging its core capabilities to
venture into new businesses. The company has committed investments exceeding US$ 30 billion
in the future and has several business initiatives running simultaneously across continents.
Mr. Naveen Jindal, the youngest son of the legendary Shri. O. P. Jindal spearheads JSPL and its
group companies. The company produces economical and efficient steel and power through
backward and forward integration.
From the widest flat products to a whole range of long products, JSPL today sports a product
portfolio that caters to varied needs in the steel market. The company also has the distinction of
producing the world's longest 121 meter rails and large size parallel flange beams for the first
time in India.
JSPL operates the largest coal - based sponge iron plant in the world and has an installed
capacity of 3 MTPA of steel at Raigarh in Chhattisgarh. With a 0.6 MTPA Wire Rod Mill and a
1.0 MTPA capacity Bar Mill at Patratu, Jharkhand, a medium and light structural mill at Raigarh,
Chhattisgarh and a 1.5 MTPA Steel Melting Shop and a Plate Mill to produce up to 5.00 meter
wide plates at Angul, Odisha. The company aims for a fast-paced growth so as to contribute
substantially to India's long term prosperity.
An enterprising spirit and the ability to discern future trends have been the driving force behind
the company's remarkable growth story. The company has scaled new heights with the combined
force of innovation, adaptation of new technologies and the collective skills of its 15,000 strong,
committed workforce.
And the recognition it has received only further lends credence to this. JSPL has recently been
rated as the second highest value creator in the world by Boston Consulting Group; 11th fastest

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growing company in India by Business World; included in one of the Fab 50 Companies by
Forbes Asia, 2009 and 2010; one of the Best Blue Chip companies as well as the Highest Wealth
Creator by the Dalal Street Journal. It has also been ranked fourth as per Total Income in the Iron
and Steel sector by Dun & Bradstreet.

1.1 GROUP:

Jindal Steel and Power is a part of the Jindal Group, founded by O. P. Jindal (1930–2005). In
1969, he started Pipe Unit Jindal India Limited at Hisar, India,one of the earlier incarnations of
his business empire. After Jindal's death in 2005, much of his assets were transferred to his wife,
Savitri Jindal. Jindal Group's management was then split among his four sons with Naveen Jindal
as the Chairman of Jindal Steel and Power Limited. His elder brother, Sajjan Jindal, is currently
the head of ASSOCHAM, an influential body of the chambers of commerce, and the head of
JSW Group, part of O.P. Jindal Group.

1.2 HISTORY OF THE COMPANY:

Jindal Steel and Power Limited (JSPL) is an Indian steel and energy company based in New
Delhi, India and a division of Jindal Group conglomerate. With annual turnover of over US$4
billion, Jindal Steel & Power Limited (JSPL) is a part of about US$17 billion diversified O.
P. Jindal Group. JSPL is a leading player in steel, power, mining, oil and gas and
infrastructure. Naveen Jindal, the youngest son of the late O P Jindal, drives JSPL and its group
companies Jindal Power Ltd, Jindal Petroleum Ltd., Jindal Cement Ltd. and Jindal Steel Bolivia.
The company professes a belief in the concept of self-sufficiency. The company produces steel
and power through backward integration from its own captive coal and iron-ore mines.

However, in terms of tonnage, it is the third largest steel producer in India. The company
manufactures and sells sponge iron, mild steel slabs, Ferro chrome, iron ore, mild steel,

S.V. Institute Of Manage ment, Kadi 3

structural, hot rolled plates and coils and coal based sponge iron plant. The company is also
involved in power generation.

Jindal Steel and Power is a part of the Jindal Group, founded by O. P. Jindal (1930–2005). In
1969, he started Pipe Unit Jindal India Limited at Hisar, India, one of the earlier incarnations of
his business empire. After Jindal's death in 2005, much of his assets were transferred to his wife,
Savitri Jindal. Jindal Group's management was then split among his four sons with Naveen Jindal
as the Chairman of Jindal Steel and Power Limited. His elder brother, Sajjan Jindal, is currently
the head of ASSOCHAM, an influential body of the chambers of commerce, and the head of
JSW Group, part of O.P. Jindal Group.

On 3 June 2006, Bolivia granted development rights for one of the world’s largest iron ore
reserves in the El Mutún region to Jindal Steel. With an initial investment of US$1.5 billion, the
company plans to invest an additional US$2.1 billion over the next eight years in the South
American country. Jindal Steel is most likely to terminate the contract of investing $2.1 billion in
setting up a steel plant in Bolivia, due to non-fulfillment of contractual obligations by the
Bolivian government. Savitri Jindal, the widow of O. P. Jindal, is ranked as the 19th richest
Indian person according to Forbes.

The Jindal family established Vidya Devi Jindal School, a residential school for girls in Hisar,
India, in 1984. Although not marketed as such, it is widely known to cater to the wealthy through
its private location and array of activities. The school's student body comprises girls from
affluent business and political families of India.

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1.3 VISION & MISSION:

VISION

To be a globally admired organization that enhances the quality of life of all stakeholders
through sustainable industrial and business development.

MISSION

We aspire to achieve business excellence through:

 The spirit of entrepreneurship and innovation

 Optimum utilization of resources
 Sustainable environment friendly producers and practices
 The highest ethics and standards
 Hiring, developing and retaining the best people
 Maximizing returns to stockholders
 Positive impact on the communities we touch

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1.4 CORE VALUE OF THE COMPANY:

 Passion for people

 Business Excellence
 Integrity, Ownership & Sense of Belonging
 Sustainable Development

1.5 PRODUCT PROFILE OF THE COMPANY:

 Rails

 Parallel Flange Beams, Columns

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 Plates & Coils

 Angles & Channels

 TMT Re-bars & Rounds

 Wire Rods

S.V. Institute Of Manage ment, Kadi 7

 Fabricated Sections

1.7 BASICS DETAILS OF THE COMPANY:

BOARD OF DIRECTORS

Smt. Savitri Jindal

Smt. Shallu Jindal
Mr. Ratan Jindal
Shri K. Rajagopal
Mr. R. V. Shahi
Mr. Arun Kumar
Mr. Haigreve Khaitan
Mr. Ajit M. Ingle
Mr. Hardip Singh Wirk
Shri Arun Kumar Purwar
Mr. S K Garg
Shri D. K. Saraogi

S.V. Institute Of Manage ment, Kadi 8

BANKERS:

Canara Bank
ICICI Bank Ltd
Punjab National Bank
State Bank of India
State Bank of Patiala

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S.V. Institute Of Manage ment, Kadi 10
 Particular Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09
Sources of funds
Owner's fund
Equity share 93.48 93.48 93.43 93.12 15.47
capital
Share - - - - -
application
money
Preference - - - - -
share capital
Reserves & 12,254.59 10,751.93 8,595.91 6,652.88 5,399.85
surplus
Loan funds
Secured loans 11,577.42 6,848.09 5,085.01 4,235.16 2,105.49

Unsecured 7,923.52 7,524.37 6,356.69 4,148.10 2,857.16

loans
Total 31,849.01 25,217.87 20,131.04 15,129.26 10,377.97
Uses of funds
Fixed assets
Gross block 18,821.38 15,163.15 12,757.46 8,814.21 7,362.90

Less : - - - - -
revaluation
reserve
Less : 4,665.19 3,614.14 2,757.04 2,110.15 1,617.00
accumulated
depreciation

Net block 14,156.19 11,549.01 10,000.42 6,704.06 5,745.90

S.V. Institute Of Manage ment, Kadi 11

 Capital work- 11,483.94 10,493.96 7,081.06 7,225.21 2,318.01
in-progress
Investments 1,330.72 1,412.17 1,210.01 1,067.11 1,233.40

Net current assets

Current 12,839.08 10,102.97 8,095.98 5,175.50 5,189.28
assets, loans
& advances
Less : current 7,960.92 8,340.24 6,256.43 5,045.64 4,111.64
liabilities &
provisions

Total net 4,878.16 1,762.73 1,839.55 129.86 1,077.64

current
assets
Miscellaneous - - - 3.02 3.02
expenses not
written

Total 31,849.01 25,217.87 20,131.04 15,129.26 10,377.97

INTERPRETATION:

 Thebalancesheetisthestatementshowingtheincreaseordecrease intheassetsand
liabilities.Thisindicatesthechangeinthecapitalstructureaswellasincreaseordecrease in
assets, its shows that Company’s production capacity is also increase with the Assets
 The reserves and surplus ofthe companyhas increased rapidlyin last fouryears.It has
increased by 10,751.93crore as compared to that of2013. Moreover therehas been
constant increasein thenet worthof the company. Thenetworth which
wasaround10,377.97crores in 2009 has been increaseto 31,849.01crores in 2013. Its mean
Company having good amount as reserve it will be a beneficial for the future

S.V. Institute Of Manage ment, Kadi 12

 contingencies and other future projects if Company can expand his business then
reserve & surplus will be helpful for its.

 Thebalancesheet also shows thebalanceof assets and other investment madebythe

company. Thenetassetshas also increase from 11,549.01croreto that 14,156.19
crorein 2013.

 We also like to concludethat the liquid position ofthe companyis moderated

because net currentassets of the companyaredecreasingyearonyear basis.

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S.V. Institute Of Manage ment, Kadi 14
 Profit loss account (Rs crore)
Particulars Mar ' Mar ' Mar ' Mar ' 12 Mar ' 13
09 10 11
Income
Operating 7,677.83 7,347.44 9,574.17 13,333.95 14,954.70
income
Expenses
Material 3,419.42 3,179.38 3,709.15 6,060.52 6,780.34
consumed

Manufacturing 773.84 838.4 568.47 838.37 939.38

expenses

Personnel 181.46 219.72 277.78 385.44 447.89

expenses

Selling 327.76 209.68 - - -

expenses
Administrative 337.49 344.78 1,436.22 1,987.13 2,848.64
expenses

Expenses - - - -
capitalized

Cost of sales 5,039.97 4,791.96 5,991.62 9,271.46 11,016.25

Operating 2,637.86 2,555.48 3,582.55 4,062.49 3,938.45

profit
Other 199.46 205.37 143.16 184.48 159.28
recurring
income
Adjusted 2,837.32 2,760.85 3,725.71 4,246.97 4,097.73
PBDIT
Financial 267.89 331.66 285 536.77 820.77
expenses
Depreciation 433.03 512.16 687.77 867.19 1,048.46

Other write 0.2 - - - -

offs
Adjusted PBT 2,136.20 1,917.03 2,752.94 2,843.01 2,228.50

S.V. Institute Of Manage ment, Kadi 15

 Tax charges 465.4 427.78 688.82 732.36 635.95

Adjusted PAT 1,670.80 1,489.25 2,064.12 2,110.65 1,592.55

Nonrecurring -144.78 -12.5 - - -

items

Other non 10.46 2.93 - - -

cash
adjustments

Reported net 1,536.48 1,479.68 2,064.12 2,110.65 1,592.55

profit
Earnings 4,584.28 5,798.63 7,542.95 9,222.66 10,339.60
before
appropriation

Equity 85.33 116.52 140.19 149.46 149.57

dividend
Preference - - - - -
dividend
Dividend tax - 4.28 3.75 3.15 3.32

Retained 4,498.95 5,677.83 7,399.01 9,070.05 10,186.71

earnings

INTERPRETATION:

SALES: Company’s sale has constant increase, so the income of company also increase it is
good indication for any company. Its means company having a good productivity and having a
good reputation into the market.
EXPENDITURE: The expenditure of company increasing at big extent, it is affected to the
profit. As much expenditure asless profit. If the Company’s sales also increase then it will be
sure its expense is also increase. Because of day to day cost of raw material is also increase.
PROFIT: Expenditure increasing so obviously profit decrease not only expenditure but tax
provision also increase. Because of these two factors profit is highly affected in decreasing
mode.

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S.V. Institute Of Manage ment, Kadi 17
 COMMON SIZE STATEMENT

Common size financial statement help to compare the performance of a company with other
companies in the industry, regardless of asset size or sales volume. Evaluating common size
statement of a company over a period of years can be useful in trend analysis.

Common size statement is very useful ways to analyze financial statement. It consists of balance
sheet and income statement in which items are expressed in percentage rather than absolute
value.

To create a common size statement, income statement total income are taken has 100%. Each
line item of the income statement is compared as a percentage of total income. To prepare a
common size balance sheet total assets are taken equal to 100%. Each line item of balance sheet
is compared as a percentage of total assets.

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 BALANCE SHEET

Particular Mar Mar Mar Mar Mar

' 13 ' 12 ' 11 ' 10 ' 09
Sources of funds
Owner's fund
Equity share 0% 0% 0% 1% 0%
capital

Share - - - - -
application
money

Preference - - - - -
share capital

Reserves & 38% 43% 43% 44% 52%

surplus

Loan funds
Secured loans 36% 27% 25% 28% 20%

Unsecured 25% 30% 32% 27% 28%

loans
Total 100% 100% 100% 100% 100%
Uses of funds
Fixed assets
Gross block 59% 60% 63% 58% 71%

Less : - - - - -
revaluation
reserve

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 Less : 15% 14% 14% 14% 16%
accumulated
depreciation

Net block 44% 46% 50% 44% 55%

Capital work- 36% 42% 35% 48% 22%

in-progress

Investments 4% 6% 6% 7% 12%

Net current assets

Current 40% 40% 40% 34% 50%
assets, loans
& advances

Less : current 25% 33% 31% 33% 40%

liabilities &
provisions

Total net 15% 7% 9% 1% 10%

current
assets

Miscellaneous - - - 0% 0%
expenses not
written

Total 100% 100% 100% 100% 100%

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 Equity share capital 0
Reserves & surplus 52

Secured loans 20
Unsecured loans 28

2009
Common Size Statement
(Liabilities)
Equity share capital Reserves & surplus Secured loans Unsecured loans

0%

28%

52%

20%

INTERPRETATION:
From the above pie diagram concluded that in the net worth there is no fluctuation according to
common size statement. There is slightly change in to the loans fund is 20% and 28%. Now
move towards the reserve & surplus which is 52%.If the Company having a more reserve &
surplus its means Company having lots of cash it’s helpful for the contingencies times.

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 Equity share capital 1
Reserves & surplus 44
Secured loans 27
Unsecured loans 28

2010
Common Size Statement
(Liabilities)
Equity share capital Reserves & surplus Secured loans Unsecured loans

1%

28%
44%

27%

INTERPRETATION:

From the above diagram the year 2010, concluded that the secured loans is higher than the year
2009, which is 28%, it’s means Company already having more amount of reserve & surplus then
also takes the loans for taking the advantages of equity. There is slightly or 7% decrease in the
year 2010 than 2009.

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 Equity share capital 0
Reserves & surplus 43
Secured loans 25
Unsecured loans 32

2011
Common Size Statement
(Liabilities)
Equity share capital Reserves & surplus Secured loans Unsecured loans

0%

32%
43%

25%

INTERPRETATION:
From the above data, see that the year 2011, there is minor change in secured loans is 3%
decrease than the 2010 which is good for the company and 5% increase in unsecured loans. Now
look reserve & surplus which is slightly decrease than the year 2010.

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 Equity share capital 0
Reserves & surplus 43
Secured loans 27
Unsecured loans 30

2012
Common Size Statement
(Liabilities)
Equity share capital Reserves & surplus Secured loans Unsecured loans

0%

30%
43%

27%

INTERPRETATION:
From the above diagram concluded that in the year 2012 there is minor increase is 2% in secured
loans and unsecured loans 2% decrease than the year 2011. There is no fluctuation in reserve &
surplus, company maintains the same portion than the year 2011.

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 Equity share capital 0
Reserves & surplus 38
Secured loans 36
Unsecured loans 25

2013
Common Size Statement
(Liabilities)
Equity share capital Reserves & surplus Secured loans Unsecured loans

0% 0%

25%
39%

36%

INTERPRETATION:

From the above diagram of the year 2013 we can conclude that there is a change in secured loans
which is 9% increase and in unsecured loans which is 5% decrease. There is a change in reserve
& surplus is decrease 5% than the year 2012.

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 Fixed Assets 55
Capital work-in- 22
progress
Investments 12
Current Assets 10

2009
Common Size Statement
(assets)
Fixed Assets Capital work-in-progress Investments Current Assets

10%
12%

56%
22%

INTERPRETATION:
From the above diagram we can see that the there are fluctuation in assets.

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 Fixed Assets 44
Capital work-in- 48
progress
Investments 7
Current Assets 1

2010
Common Size Statement
(Assets)
Fixed Assets Capital work-in-progress Investments Current Assets

1%
7%
44%

48%

INTERPRETATION:
As per the above pie chart we can conclude that the increase in fixed assets and current assets to
compare the previous year of the company, its good one for the company, and major decrease in
capital work in process in this year.

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 Fixed Assets 50
Capital work-in- 35
progress
Investments 6
Current Assets 9

2011
Common Size Statement
(Assets)

9%
6%

Fixed Assets
50%
Capital work-in-progress
35%
Investments
Current Assets

INTERPRETATION:

From the above data we can see that there increase in fixed assets at 50%, its shows that
Company’s having large amount of fixed assets and its through company can increase the his
productivity and it’s also beneficial for the investor.Decrease in capital work in process at 35%,
its negative impact of the Company because of this effect on daily routine works of the
Company.

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 Fixed Assets 46

Capital work-in- 42
progress
Investments 6
Current Assets 7

2012
Common Size Statement
(Assets)
Fixed Assets Capital work-in-progress Investments Current Assets

6%
7%
45%

42%

INTERPRETATION:

From the above pie chart we can see that this year increase in Capital work in progress, with the
help of this increase level Company’s routine works like production activity is run smoothly. Its
good sign for the Company.

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 Fixed Assets 44

Capital work-in- 36
progress
Investments 4
Current Assets 15

2013
Common Size Statement
(Assets)

Investments Current
Assets
Fixed Assets

Capital work-in-
progress

INTERPRETATION:

This year increase in current assets and also increase in capital work in process of the Company,
so this year we can predicted to Company’s operations are run smoothly.

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 PROFIT & LOSS ACCOUNT

Particulars Mar ' Mar ' Mar ' Mar ' Mar '
13 12 11 10 09
Income
Operating income 100% 100% 100% 100% 100%
Expenses
Material consumed 45% 45% 39% 43% 45%
Manufacturing 6% 6% 6% 11% 10%
expenses
Personnel expenses 3% 3% 3% 3% 2%
Selling expenses 0 0 0 3% 4%
Administrative 19% 15% 15% 5% 4%
expenses
Operating profit 26% 30% 37% 35% 34%
99% 99% 100% 100% 99%

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 Material consumed 39
Manufacturing expenses 6
Personnel expenses 3
Selling expenses 0
Administrative expenses 15
Operating profit 37

2011
Common Size Statement
Material consumed Manufacturing expenses Personnel expenses
Selling expenses Administrative expenses Operating profit

37% 39%

15% 3% 6%

0%

INTERPRETATION:
From the above data we can conclude that Company earning well profit to compare his spent
amount into the expenses.

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 Material consumed 43
Manufacturing expenses 11
Personnel expenses 3
Selling expenses 3
Administrative expenses 5
Operating profit 35

2012
Common Size Statement
Material consumed Manufacturing expenses Personnel expenses
Selling expenses Administrative expenses Operating profit

35% 43%

5%
11%

3%
3%

INTERPRETATION:

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S.V. Institute Of Manage ment, Kadi 34
 TREND ANALYSIS

Trend analysis involves calculation of percentage changes in financial statement items for
number of successive years. It is an extension of horizontal analysis to several years. Trend
analysis is carried out by first assigning value of 100 to the financial statement items in past
financial years used as the base year. Then expressing financial statement items in the following
years as a percentage of the base year value.

By the trend analysis we can quickly get idea about company’s performance easily.

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 Particular Mar ' Mar ' Mar ' Mar ' Mar '
09 10 11 12 13
Sources of funds
Owner's fund
Equity share 100.00% 601.94% 603.94% 604.27% 604.27%
capital

Share - - - - -
application
money

Preference - - - - -
share capital

Reserves & 100.00% 123.20% 159.19% 199.12% 226.94%

surplus

Loan funds
Secured loans 100.00% 201.15% 241.51% 325.25% 549.87%

Unsecured 100.00% 145.18% 222.48% 263.35% 277.32%

loans
Total 100.00% 145.78% 193.98% 242.99% 306.89%
Uses of funds
Fixed assets
Gross block 100.00% 119.71% 173.27% 205.94% 255.62%

Less : - - - - -
revaluation
reserve

Less : 100.00% 130.50% 170.50% 223.51% 288.51%

accumulated
depreciation

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 Net block 100.00% 116.68% 174.04% 201.00% 246.37%

Capital work- 100.00% 311.70% 305.48% 452.71% 495.42%

in-progress

Investments 100.00% 86.52% 98.10% 114.49% 107.89%

Net current assets

Current 100.00% 99.73% 156.01% 194.69% 247.42%
assets, loans
& advances

Less : current 100.00% 122.72% 152.16% 202.84% 193.62%

liabilities &
provisions

Total net 100.00% 12.05% 170.70% 163.57% 452.67%

current
assets

Miscellaneous 100.00% 100.00% - - -

expenses not
written

Total 100.00% 145.78% 193.98% 242.99% 306.89%

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 Year 2009 2010 2011 2012 2013
Reserve & 100.00 123.20 159.19 199.12 226.94
Surplus

Reserve & Surplus

250
226.94
200 199.12
Percentage

150 159.19
123.2
100 100
Reserve & Surplus
50

0
2008 2009 2010 2011 2012 2013 2014
Year

INTERPRETATION:

As per the above chart we can conclude that Company’s trend of Reserve& Surplus is constant
increase year by year, its show that if in future any contingency or we can say that any
requirement of money is arise then company must be fulfill its well. So it’s good of the
Company’s point of view.

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Year 2009 2010 2011 2012 2013
Loans Fund 100 145.78 193.98 242.99 306.89

Loans Fund
350
300 306.89
Percentage

250 242.99
200 193.98
150 145.78
Loans Fund
100 100
50
0
2008 2009 2010 2011 2012 2013 2014
Year

INTERPRETATION:
From the above chart we can say that year by year Company’s loans fundtrend is constant
increase, its shows that company liability is increase every year, so Company can think about it.
But one thing is that also Company’s sales are increase with the loans fund, it’s both good and
bad effect for the company.

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Year 2009 2010 2011 2012 2013
Fixed Assets 100.00 116.68 174.04 201.00 246.37

Fixed Assets
300

250 246.37
200 201
Percebtage

174.04
150
116.68 Fixed Assets
100 100

50

0
2008 2009 2010 2011 2012 2013 2014
Year

INTERPRETATION:
As per the above trend we can see that the fixed assets of the company are constant increase year
by year its shows company’s good performance. It’s very beneficial for the Company because of
if the Company having more fixed assets then investors are more likely for the investment is
concern.

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Year 2009 2010 2011 2012 2013
Current 100.00 12.05 170.70 163.57 452.67
Assets

Current Assets
500
452.67
400
Percentage

300

200
170.7 163.57 Current Assets
100 100

0 12.05
2008 2009 2010 2011 2012 2013 2014

Year

INTERPRETATION:
From the above chart we can conclude that, every year Company’s current assets are constant
increase excluding year 2010 and 2012, its shows that Company’s day to day good performance
is well and Company run smoothly.

S.V. Institute Of Manage ment, Kadi 41

 PROFIT & LOSS ACCOUNT

Particular Mar Mar Mar Mar Mar

' 09 ' 10 ' 11 ' 12 ' 13
Income
Operating 100% 96% 125% 174% 195%
income
Expenses
Material 100% 93% 108% 177% 198%
consumed

Manufacturing 100% 108% 73% 108% 121%

expenses

Personnel 100% 121% 153% 212% 247%

expenses

Selling 100% 64% - - -

expenses
Administrative 100% 102% 426% 589% 844%
expenses

Expenses - - - - -
capitalized

Cost of sales 100% 95% 119% 184% 219%

Operating 100% 97% 136% 154% 149%

profit
Other 100% 103% 72% 92% 80%
recurring
income
Adjusted 100% 97% 131% 150% 144%
PBDIT
Financial 100% 124% 106% 200% 306%
expenses

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 Depreciation 100% 118% 159% 200% 242%

Other write 100% - - - -

offs
Adjusted PBT 100% 90% 129% 133% 104%

Tax charges 100% 92% 148% 157% 137%

Adjusted PAT 100% 89% 124% 126% 95%

Nonrecurring 100% 9% - - -
items

Other non 100% 28% - - -

cash
adjustments

Reported net 100% 96% 134% 137% 104%

profit
Earnings 100% 126% 165% 201% 226%
before
appropriation

Equity 100% 137% 164% 175% 175%

dividend
Preference - - - - -
dividend

Dividend tax - - - - -

Retained 100% 126% 164% 202% 226%

earnings

S.V. Institute Of Manage ment, Kadi 43

Year 2009 2010 2011 2012 2013
Cost of Sales 100 95 119 184 219

Cost of Sales
250
219
200
184
150
119
100 100 95
Cost of Sales
50

0
2008 2009 2010 2011 2012 2013 2014

Year

INTERPRETATION:
From the above chart we can say that in every year Company’s sales is increase excluding year
2010, its shows how Company is efficient into the market. Its positive thing for the Company
and also try to increase this level and maintain into the market because it is more beneficial for
the Company. If the Company can run with this trend then surely one day Company can more
contribute into the industry and also getting the more profits.

S.V. Institute Of Manage ment, Kadi 44

 Year 2009 2010 2011 2012 2013
Operating 100 97 136 154 149
Profit

Operating Profit
180
160 154 149
140 136
Percentage

120
100 100 97
80
60 Operating Profit
40
20
0
2008 2009 2010 2011 2012 2013 2014
Year

INTERPRETATION:
As per the above chart we can conclude that Company’s Operating Profit is increase with the
minor change excluding year 2010 then this trend can stable for some time period. Its shows
Company’s profitability and also good image into the market.

S.V. Institute Of Manage ment, Kadi 45

Year 2009 2010 2011 2012 2013
Retained 100 126 164 202 226
earnings

Retained Earnings
250
226
200 202
Percentage

164
150
126
100 100
Retained earnings
50

0
2008 2009 2010 2011 2012 2013 2014
Year

INTERPRETATION:
Retained earnings trend is increase year by year as per the above chart, its shows that good
performance of the company, if the Company faces the any financial shortage in future then
Company can utilize this fund for this.

S.V. Institute Of Manage ment, Kadi 46

S.V. Institute Of Manage ment, Kadi 47
 CASH FLOW STATEMENT

Cash flow statements are statements of changes in the financial position of the business due to
inflow and outflow of cash. Statements of cash flow are required for short rage financial
planning. The plans for more immediate future cannot rely upon the information supplied by
fund flow statement. Fund flow statement conceals certain vital information, because it treats all
current assets and current liabilities as par. Increase in stock, debtors and even short-term
investments are treated equivalent to increase in cash. In factual practice it is not the real
position. Payment from debtors may be realized within a month from stock, within three to six
months but increase in outstanding wages and salaries are treated equivalent or increase in bank
overdraft. There is always a danger that fund flow statement may show sufficient net working
capital but practically there is technical insolvency. This may happen due to pilling upon of large
quantity of stock or considerable amount of credit sales or inefficiency of the business in the
collection of debts.

Cash flow statements are summarized forms of inflow of cash from different source and the uses
to which the cash has been applied. Cash flow statements are useful for management in assessing
the capability of business to meet in short-term commitments towards creditors for goods and
expenses. A proper planning of cash resources will enable the management to have cash
available whenever needed and put it some profitable or productive use in cash there is surplus
available.

S.V. Institute Of Manage ment, Kadi 48

Particular Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09
Profit before tax 2,228.50 2,843.01 2,752.94 1,907.50 2,001.88
Net cash flow-operating activity 1,021.48 2,906.04 1,794.04 2,403.08 2,701.99
Net cash used in investing activity -4,366.53 -4,992.84 -4,964.35 -5,811.69 -3,268.82
Net cash used in fin. activity 3,355.18 2,072.63 3,159.95 3,159.75 297.88
Net inc/dec in cash and equivalent 10.13 -14.17 -10.36 -248.86 -268.95
Cash and equivalent begin of year 13.38 49.74 60.10 308.96 577.91
Cash and equivalent end of year 23.51 35.57 49.74 60.10 308.96

INTERPRETATION:
As per the above Cash Flow Statement we can conclude that

S.V. Institute Of Manage ment, Kadi 49

S.V. Institute Of Manage ment, Kadi 50
 RATIO ANALYSIS
Ratio analysis is an important technique of financial analysis. It is a means for judging the
financial health of a business enterprise. It determines and interprets the liquidity, solvency,
profitability, etc. of a business enterprise.

 It becomes simple to understand various figures in the financial statements through the
use of different ratios. Financial ratios simplify, summarize, and systemize the accounting
figures presented in financial statements.

 With the help of ratio analysis, comparison of profitability and financial soundness can be
made between one industry and another. Similarly comparison of current year figures can
also be made with those of previous years with the help of ratio analysis and if some
weak points are located, remedial measures are taken to correct them.

 If accounting ratios are calculated for a number of years, they will reveal the trend of
costs, sales, profits and other important facts. Such trends are useful for planning.

 Financial ratios, based on a desired level of activities, can be set as standards for judging
actual performance of a business. For example, if owners of a business aim at earning
profit @ 25% on the capital which is the prevailing rate of return in the industry then this
rate of 25% becomes the standard. The rate of profit of each year is compared with this
standard and the actual performance of the business can be judged easily.

 Ratio analysis discloses the position of business with different viewpoint. It discloses the
position of business with liquidity viewpoint, solvency view point, profitability
viewpoint, etc. with the help of such a study; we can draw conclusion regarding the
financial health of business enterprise.

S.V. Institute Of Manage ment, Kadi 51

 1) Operating Margin

Year Operating Margin

(%)
Mar ' 09 34.35

Mar ' 10 34.78

Mar ' 11 37.41

Mar ' 12 30.46

Mar ' 13 26.33

Operating Margin
40
35 37.41
30 34.35 34.78
25 30.46
26.33
20
15
10
5
0
Mar ' 09 Mar ' 10 Mar ' 11 Mar ' 12 Mar ' 13
Year
Operating Margin

Comments:

This ratio establishes the relation between the net sales and the operating net profit. The concept
of operating net profit is different from the concept of net profit operating net profit is the profit
arising out of business operations only. As per the above chart we can conclude that the
operating margin is increase in year 2009, 2010 and 2011its show that a higher value of
operating margin ratio is favorable which indicates that more proportion of revenue is converted

S.V. Institute Of Manage ment, Kadi 52

to operating income. An increase in operating margin ratio overtime means that the profitability
is improving. It is also important to compare the gross margin ratio of a Jindal Steel & Power to
the average gross profit margin of the industry. In general, a Company which is more efficient is
controlling its overall costs will have higher operating margin ratio.

2) Gross Profit Margin

Year Gross Profit Margin (%)
Mar ' 09 31.22

Mar ' 10 32.33

Mar ' 11 35.41

Mar ' 12 28.54

Mar ' 13 25.48

Gross Profit Margin

40
35
35.41
30 32.33
31.22
25 28.54
25.48
20
15
10
5
0
Mar ' 09 Mar ' 10 Mar ' 11 Mar ' 12 Mar ' 13
Year
Gross Profit Margin

Comments:
This ratio indicates the relation between production cost and sales and the efficiency with which
goods are produced or purchased. If it has a very high gross profit ratio it may indicate that the

S.V. Institute Of Manage ment, Kadi 53

organization is able to produce or purchase at a relatively lower cost. Gross profit is the profit we
earn before we take off any administration costs, selling costs and so on. Here company has
achieved very good efficiency in 2011 compared to other financial years.

3) Net Profit Margin

Year Net Profit Margin
Mar ' 09 10.54
Mar ' 10 15.61
Mar ' 11 21.24
Mar ' 12 19.77
Mar ' 13 19.7

Net Profit Margin

25

20
21.24
19.77 19.7
15
15.61
10
10.54
5

0
Mar ' 09 Mar ' 10 Mar ' 11 Mar ' 12 Mar ' 13

Year Net Profit Margin

Comments:

This shows the portion of sales available to owners after all expenses. A high profit ratio is
higher profitability of the firm. This ratio shows the earning left for shareholder as percentage of
Net sales. It is depicted from the above diagram that company has been trying to improve its

S.V. Institute Of Manage ment, Kadi 54

profitability year by year except for 2012 and 2013.

4) Return on Long term Funds (%)

Year Return on Long term Funds
(%)
Mar ' 09 25.01

Mar ' 10 18.06

Mar ' 11 18.92

Mar ' 12 17.47

Mar ' 13 12.59

Return on Long term Funds (%)

30

25
25.01
20
18.06 18.92
15 17.47

10 12.59

0
Mar ' 09 Mar ' 10 Mar ' 11 Mar ' 12 Mar ' 13
Year
Return on Long term Funds (%)

Comments:

S.V. Institute Of Manage ment, Kadi 55

 5) Long term Debt / Equity
Year Long term debt / Equity
Mar ' 09 0.77

Mar ' 10 0.84

Mar ' 11 0.84

Mar ' 12 0.78

Mar ' 13 0.96

Long term Debt / Equity

1.2

0.8 0.96
0.84 0.84
0.77 0.78
0.6
0.4
0.2
0
Mar ' 09 Mar ' 10 Mar ' 11 Mar ' 12 Mar ' 13
Year
Long term debt / Equity

Comments:
In this ratio shareholders ‘fund is the share capital plus reserve and surpluses. In case of high
debt equity it would be obvious that the investment of creditors is more than owners. And if it is
so high then it brings the firm in a risky position. Or if it is too low it might indicate that the
organization has not utilized its capacity of borrowing which must be utilized and that is because
the borrowing from outsiders is a good source of fund for business with lower returns in compare
to equity. The Jindal Steel & Power is trying to lower its debt equity ratio by lowering its

S.V. Institute Of Manage ment, Kadi 56

liabilities and increasing its equity. So it wants to improve its position since, a relatively higher
ratiois unfavorable.

6) Fixed Assets Turnover Ratio

Year Fixed Assets Turnover
Ratio
Mar ' 09 0.85

Mar ' 10 0.57

Mar ' 11 0.54

Mar ' 12 0.58

Mar ' 13 0.52

Fixed Assets Turnover Ratio

0.9
0.8 0.85
0.7
0.6
0.5 0.57 0.58
0.54 0.52
0.4
0.3
0.2
0.1
0
Mar ' 09 Mar ' 10 Mar ' 11 Mar ' 12 Mar ' 13
Year
Fixed Assets Turnover
Ratio

Comments:
A High fixed asset turnover ratio indicates the capability of the firm to earn maximum sales with
the minimum investing in fixed assets. So it shows that the company is using its assets more

S.V. Institute Of Manage ment, Kadi 57

efficiently. As it is shown in above the Company is using its assets specially fixed assets more
efficiently in year 2009 although it had a decrease in efficiency in 2010 and 2011 compared to
2013.

7) Current Ratio
Year Current Ratio
Mar ' 09 1.26
Mar ' 10 1.03
Mar ' 11 1.29
Mar ' 12 1.21
Mar ' 13 1.61

Current Ratio
1.8
1.6
1.4 1.61
1.2 1.29
1.26 1.21
1
1.03
0.8
0.6
0.4
0.2
0
Mar ' 09 Mar ' 10 Mar ' 11 Mar ' 12 Mar ' 13
Year
Current Ratio

Comments:

The ratio is mainly used to give an idea of the company‘s ability to pay back its short- term
liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher
the current ratio in year 2013, the more capable the company is of paying its obligations. A ratio
in each year suggests that the Jindal Steel & Power would be able to pay off its obligations if

S.V. Institute Of Manage ment, Kadi 58

they came due at that point, but the company has shown constantdecreasing trend in its financial
health in subsequent years, Since low current ratio does not necessarily mean that the firm will
go bankrupt, but it is definitely is not a good sign. Short term creditors prefer a high current ratio
since it reduce their risk.

8) Quick Ratio
Year Quick ratio
Mar ' 09 0.94

Mar ' 10 0.74

Mar ' 11 0.94

Mar ' 12 0.84

Mar ' 13 1.16

Quick Ratio
1.4
1.2
1 1.16

0.8 0.94 0.94

0.84
0.6 0.74
0.4
0.2
0
Mar ' 09 Mar ' 10 Mar ' 11 Mar ' 12 Mar ' 13
Year
Quick ratio

Comments:

The acid-test ratio is far more forceful than the current ratio, primarily because the current ratio
includes inventory assets which might not be able to turn to cash immediately. Company with
ratios of less than 1in year 2009, 2010, 2011 and 2012 cannot pay their current liabilities and

S.V. Institute Of Manage ment, Kadi 59

should be looked at with extreme caution. Furthermore, if the acid-test ratio is much lower than
the current ratio, it means current assets are highly dependent on inventory

9) Inventory Turnover Ratio

Year Inventory Turnover Ratio
Mar ' 09 9.08

Mar ' 10 8.05

Mar ' 11 4.34

Mar ' 12 4.37

Mar ' 13 4.16

Inventory Turnover Ratio

10
9
8 9.08
7 8.05
6
5
4
4.34 4.37 4.16
3
2
1
0
Mar ' 09 Mar ' 10 Mar ' 11 Mar ' 12 Mar ' 13

Year Inventory Turnover Ratio

Comments:

As per the above chart we can see concluded that the Company’s inventory turnover ratio
is decrease, its shows a lower inventory turnover ratio may be an indication of over-

S.V. Institute Of Manage ment, Kadi 60

 stocking which may pose risk of obsolescence and increased inventory holding costs.
However, a very high value of this ratio may be accompanied by loss of sales due to
inventory shortage.

10) Dividend Payout Ratio

Year Dividend Payout Ratio
Mar ' 09 5.55

Mar ' 10 8.16

Mar ' 11 6.97

Mar ' 12 7.23

Mar ' 13 9.6

Dividend Payout Ratio

12

10
9.6
8
8.16
6 6.97 7.23

4 5.55

0
Mar ' 09 Mar ' 10 Mar ' 11 Mar ' 12 Mar ' 13
Year
Dividend Payout Ratio

Comments:

This ratio indicates the policy of management to pay cash dividend. A higher ratio in a year
2010, 2013 and 2013 indicates that the organization is following the liberal dividend policy
regarding the dividend while a lower ratio in a year 2009 and 2011 indicates a conservative

S.V. Institute Of Manage ment, Kadi 61

approach of the management towards the dividend. Sometimes Company can to keep the
retained earnings from the profit that’s why Company can pay less dividend.

11) Earning Retention Ratio

Year Earning retention ratio
Mar ' 09 94.9

Mar ' 10 91.89

Mar ' 11 93.03

Mar ' 12 92.77

Mar ' 13 90.4

Earning Retention Ratio

96
95
94 94.9
93
93.03 92.77
92
91 91.89
90 90.4
89
88
Mar ' 09 Mar ' 10 Mar ' 11 Mar ' 12 Mar ' 13
Year
Earning retention ratio

Comments:

From the above chart we can conclude that in year 2009 and 2011 higher the retention rate
higher will be the company's sustainable growth rate and higher share price.

S.V. Institute Of Manage ment, Kadi 62

 12) Long term assets / total Assets
Year Long term assets / total Assets
Mar ' 09 0.64
Mar ' 10 0.74
Mar ' 11 0.69
Mar ' 12 0.69
Mar ' 13 0.67

Long term assets / total Assets

0.76
0.74
0.72 0.74
0.7
0.68 0.69 0.69
0.66 0.67
0.64
0.62 0.64
0.6
0.58
Mar ' 09 Mar ' 10 Mar ' 11 Mar ' 12 Mar ' 13
Year
Long term assets / total Assets

Comments:

The ratio provides a general measure of the financial position of a company, including its ability
to meet financial requirements for outstanding loans. A year-over-year decrease in this metric
would suggest the company is progressively becoming less dependent on debt to grow their
business.

S.V. Institute Of Manage ment, Kadi 63

S.V. Institute Of Manage ment, Kadi 64
 

S.V. Institute Of Manage ment, Kadi 65

S.V. Institute Of Manage ment, Kadi 66
S.V. Institute Of Manage ment, Kadi 67
I prepared a project report through these sources. Defined follow that,

SEARCH ENGINE:

WWW.GOOGLE.COM

WEBSITE:
(www.jindalsteelpower.com)

(www.moneycontrol.com)

S.V. Institute Of Manage ment, Kadi 68