EXHIBIT 1: KEY FINANCIAL INFORMATION FOR JBS’S COMPETITORS

Name YEAR 2014/15, IN ₹ MILLIONS

FISCALRevenue Net Profit Total Assets
Omega Bright Steel Pvt. 141.00 5.64 127.97
Ltd.
Gopalsons Steels Pvt. Ltd. 48.82 0.37 29.26
C. Lal Alloys Pvt. Ltd. 52.17 0.05 30.87
Source: Annual reports of Indian private limited companies were provided by MCA Services, Ministry of Corporate Affairs, Government of India, accessed March 24, 2016, www.mca.gov.in/mcafoportal/login.do.

EXHIBIT 2: INCOME STATEMENTS FOR JBS’S COMPETITORS FISCAL YEAR 2014/15, IN ₹ MILLIONS
Omega Bright Gopalsons Steels C. Lal Alloys Joneja
Revenue Steel Pvt. Ltd.
1,410.00 Pvt. Ltd. 488.20 Pvt. Ltd.
521.70 1,357.00
Cost of goods sold (COGS) 1,170.00 386.20 396.50 1,069.50 0.83 0.79 0.76 0.79
Operating expenses 144.50 73.60 102.50 248.50 0.10 0.15 0.20 0.18
Interest expenses 9.40 23.20 22.70 30.10 20.70
Profit before taxes 86.10 5.20 0.70 8.90 0.0610638290.0106513720.001341767290.006558585114
Income tax 29.70 1.50 0.30 3.50 0.3449477350.2884615380.4285714286 0.393258427
Net profit 56.40 3.70 0.50 5.40
Purchases during the year 1,156.20 380.80 417.36 1,072.55

Source: Annual reports of Indian private limited companies were provided by MCA Services, Ministry of Corporate Affairs,Government of India, accessed March 24, 20

EXHIBIT 3: BALANCE SHEETS FOR JBS’S COMPETITORS FISCAL YEAR 2014/15, IN ₹ MILLIONS
Omega Bright Gopalsons C. Lal
Assets Steel Pvt. Ltd. Steels Pvt. Alloys Pvt.
Ltd. Ltd.
Cash 354.80 0.80 0.60
Accounts receivable 377.90 134.80 110.00
Inventory 133.90 66.90 45.40
Short-term loans and advances 11.90 2.60 5.50
Other current assets 2.00 10.90 −
Non-current assets 399.00 76.50 147.20
Total assets 1,279.70 292.50 308.70
Liabilities
Current liabilities
Accounts payable 103.00 99.90 15.20
Short-term borrowing 60.70 86.00 119.20
Short-term provisions 5.20 0.30 0.20
Other current liabilities 36.90 17.80 14.00
Non-current liabilities 45.60 28.20 59.50
Shareholders’ capital 194.20 18.00 14.00
Reserves and surplus 824.80 42.30 86.60
Total liabilities and shareholders’ equity 1,279.70 292.50 308.70
Source: Annual reports of Indian private limited companies were provided by MCA Services, Ministry of Corporate Affairs, Government of India, accessed March 24, 2016, www.mca.gov.in/mcafoportal/login.do.

EXHIBIT 4: FORECASTED PRODUCTION (IN TONNES) AND AVERAGE PRICES (₹ THOUSANDS PER TONNE) OF
FINISHED STEEL IN INDIA
Fiscal Year Consumption Production Imports Exports Prices
2015/16 99,230.00 93,664.00 11,171.90 11,171.90 39,016.90
2016/17 106,154.00 99,000.00 9,250.00 9,250.00 40,575.00
2017/18 113,725.00 106,400.00 8,450.00 8,450.00 43,250.00
2018/19 122,850.00 114,700.00 8,560.00 8,560.00 45,250.00
2019/20 132,800.00 124,600.00 8,725.00 8,725.00 47,250.00
Source: “Steel Data: Production, Imports, Exports, Consumption and Prices of Finished Steel,” CMIE Industry Outlook,
accessed March 24, 2016.

EXHIBIT 5: SUMMARY OF JBS INCOME STATEMENTS, 2010–2015 (IN ₹ MILLIONS)

Fiscal Year 2010/11 2011/12 2012/13 2013/14 2014/15

Revenue 1,079.00 1,269.40 1,343.30 1,284.00 1,357.00

Cost of goods sold (COGS) 820.00 990.00 1,070.00 1,029.30 1,069.50
Operating expenses (including depreciation) 148.20 165.60 188.50 209.70 248.50
Interest expenses 12.40 12.90 19.70 19.80 30.10
Profit before taxes 98.40 100.90 65.10 25.20 8.90
Income tax 32.50 32.70 24.40 5.70 3.50
Net profit 65.90 68.20 40.70 19.50 5.40
Purchases during the fiscal 863.8 984.34 1,078.32 1,051.11 1,072.55
year
Source: Company documents.

EXHIBIT 6: SUMMARY OF JBS’S BALANCE SHEETS, 2010–2015 (IN ₹ MILLIONS)

Fiscal Year 2010/11 2011/12 2012/13 2013/14 2014/15
Current
Cash assets 7.29 17.16 7.55 7.27 8.52
Accounts receivable 235.69 294.54 314.77 297.18 271.25
Inventory 116.36 102.99 109.85 131.64 134.71
Short-term loans and advances 54.33 52.69 138.92 71.23 70.28
advances
Non-current assets 176.15 252.82 181.40 283.71 283.03
Total assets 589.82 720.20 752.49 791.03 767.79
Current liabilities
Accounts payableAccounts payable 84.76 136.22 89.48 64.35 47.13
Short-term borrowing 34.46 100.85 152.38 167.87 176.64
Short-term provisions 34.46 38.33 21.00 13.22 7.05
Non-current liabilities 165.55 105.99 434.04 146.54 108.77
Shareholders’ capital 19.59 19.59 19.59 19.59 20.59
Reserves and surplus 251.00 319.22 36.00 379.46 407.61
Total liabilities and shareholders’ equity 589.82 720.20 752.49 791.03 767.79

Source: Company documents.

NWC 259.99 191.98 308.23 261.88 253.94

Short term borrowings 34.46 100.85 152.38 167.87 176.64
0.13 0.53 0.49 0.64 0.70
225.53 91.13 155.85 94.01 77.30
0.006558585114
0.393258427
 CALCULATION OF WORKING CAPITAL RATIOS, WORKING CAPITAL CYCLE
LIQUIDITY RATIOS

Particulars Formula 2010/11 2011/12 2012/13 2013/14 2014/15 Trend

1. Current ratio CA/CL 2.69176211.69709512.17260132.06698172.10016463

2. Quick ratio (CA-inventory)/CL

[(Cash & Bank) + short- 1.93460431.32312991.75469831.53063881.516549692
3. Absolute Liquid ratio term securities] /CL 0.04743620.06230930.02872250.02962020.03691187939

TURNOVER RATIOS

1. Inventory turnover Cost of goods

ratio
2. Receivables turnover sold/Average inventory
Credit sales/Average 7.96193809.026669710.0545018.52457658.030786559
ratio
3. Payables turnover receivables
Credit purchases/Average 4.39492554.59658634.23287984.02856444.583572296
ratio
4. Fixed Assets turnover payables
Sales/ Average Fixed 10.1911278.90886059.555338913.66586419.24201651
ratio assets 5.88044285.68162805.93969875.30042354.597240357

WORKING CAPITAL CYCLE365/Receivables

Debtors Conversion CALCULATION turnover
Period (in days)
Inventory Conversion ratio
365/Inventory turnover 83.05032679.40675386.22971090.60299479.63221183
Period
Creditors deferral period ratio
(in days) 365/ Creditors deferral 45.84310940.43573236.30214942.81737545.4500935
(in days) CAPITAL
WORKING period 35.81546640.97044738.19854026.70888318.96890588
CYCLE DCP+ICP-CDP 93.07796978.87203884.333319106.71148106.1133995
Net Working Capital 253.94
RKING CAPITAL CYCLE AND TREND ANALYSIS OF RATIOS
2014/15

Omega Gopal Sons C.Lal Alloys Assumptions Analysis

Current ratio of the company is stable and in a good

4.27842561.058823529 1.086810229 position
The company's cash ratio to meet its' current obligations
Quick
is less ratio
than of theJoneja
0.05. company is have
must between 1.3-1.95
a good overand
inventory the
3.62779390.7308823529 0.7812920592 years and the
receivables company has
management good to
system liquidity
meet its' current
1.72400380.0039215686 0.004037685061 obligations.

Assume all sales are made on

credit. 96% of revenue is Inventory turnover ratio has fluctuated between 8-10
8.73786405.772795217 8.733480176 from revenue from times over the past 5 years.
3.73114583.621661721 4.742727273 operations.
Assume all purchases are Receivables
Payables turnover
turnover is quite
ratio stable
has risen over the past
significantly 5 years.
in the
11.2252423.811811812 27.45789474 made on credit
Assume all non-current current year.
Fixed assets turnover is the least in the past year. Capacity
3.53383456.381699346 3.544157609 asssets are fixed assets Debtors
utilisationconversion
should beperiod has always been at 75-90 days.
improved.
The company's credit period is only 45 days. Better
receivables management is required. The company has to
understand
Inventory the reasons
conversion for such
period in constant
is reduced
line with delay in
competitors.
97.825177100.7824662 76.95993866 The company
receivables has significantly
conversion. its time taken to
However the company can improve its conversion
repay its creditors in the last two years. Its competitors period
41.77222263.22760228 41.79319042 with better and efficient planning.
have varying deferral periods. Joneja must utilise its credit
32.51600095.7549895 13.29308031 facilities to the maximum.
The company's NOC has risen over the past two years. Its'
107.0813968.25507899 105.4600488 competitors also have similar Net operating cycles.
711.60 29.80 12.60
COMPARISON OF JBS’S WORKING CAPITAL WITH THAT OF ITS COMPETITORS
Rs. In millions
Particulars Joneja Omega Gopalsons C.Lal Alloys

Current Assets
Cash 8.52 354.80 0.80 0.60
Accounts receivable 271.25 377.90 134.80 110.00
Inventory 134.71 133.90 66.90 45.40
Short-term loans and advances 70.28 11.90 2.60 5.50
Other current assets 0.00 2.00 10.90 −
Gross Working Capital 484.76 880.50 216.00 147.20

Current Liabilities
Accounts payable 47.13 103.00 99.90 15.20
Short-term borrowing 176.64 60.70 86.00 119.20
Short-term provisions 7.05 5.20 0.30 0.20
Other current liabilities 0.00 36.90 17.80 14.00
230.82 168.90 186.20 134.60

Net Working Capital 253.94 711.60 29.80 12.60

Non- current Assets 283.03 399.00 76.50 147.20

Non- current liabilities 108.77 45.60 28.20 59.50
Equity
Shareholders’ capital 20.59 194.20 18.00 14.00
Reserves and surplus 407.61 824.80 42.30 86.60

Total Assets/Equity&liability 767.79 1279.50 292.50 294.40

Revenue 1,357.00 1,410.00 488.20 521.70

Profits 5.40 56.40 3.70 0.50
Interest expenditure 30.10 9.40 23.20 22.70
 8% growth(if cash
10% growth discount is offered)
Fiscal Year 2014/15 2016/17 2016/17
Revenue 1,357.00 1492.7 1465.56
Cost of goods sold (COGS) 1,069.50 1164.306 1164.306
Operating expenses (including depreciation) 248.50 268.686 268.686

Implied Interest rate calculation

Credit terms 2/10 net 45 days
If customer forgoes discount(2/98) 2.04%
No. of periods (365/35) 10.42857143
EAR (1+0.204)^10.42857 23.45%

Evaluation of cash discount policy

Debtors without cash discount 176.6702466

If cash discount is given

Average Collection Period(in days) 27.5
Debtors 106.0021479
Reduction in working capital 70.66809863
Interest saved @ 18% p.a 12.72025775
Discount offered 27.14
Loss due to cash discount proposal 14.41974225

Assumptions
1. COGS remains same at 8% growth and 10% growth in 2015-16 since sales has reduced merely due to trade discount offered in the 8% growth
2. 96% of revenue is considered for debtors calculation since 96% of revenue id the company's core operations
3. Debtors are collected in 45 days on average from 2015-16 unlike the current 80 days
ue to trade discount offered in the 8% growth
e operations