Fin Statement

Analysis of Financial Statements
And, in this direction
Our first step is towards
Understanding financial statements of Tata Steel
First, we take Balance sheet
Sources of Funds Side
What is Balance Sheet?

BALANCE SHEET is
A statement that consists of assets and liabilities of a company
on a particular date.
A statement having balances of various accounts to be carried
to the next year.

A statement that represents sources of funds and application
of funds.
We start understanding balance sheet by taking
Sources of Funds Side
BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

(Rs. in Crores)
Particulars
2007
2008
SOURCES OF FUNDS:
SHAREHOLDER'S FUNDS Share Capital Share Warrants Reserves and Surplus Total Shareholders' Fund LOAN FUNDS Secured Loans Unsecured Loans 580.67 147.06 13,368.42 14,096.15 3,758.92 5,886.41 9,645.33 748.94 1,107.08 6,203.30 21,097.43 27,300.73 3,520.58 14,501.11 18,021.69 681.80 1,071.30
DEFERRED TAX LIABILITY (NET) PROVISION FOR EMPLOYEE SEPARATION COMPENSATION
TOTAL
25,597.50
47,075.52

(Rs. in Crores)
Particulars
2007
2008
SOURCES OF FUNDS:
TOTAL
25,597.50
47,075.52
Share Warrants
The preferential issue of equity shares/ Fully Convertible Debentures (FCDs)/
Partly Convertible Debentures (PCDs) or any other financial instruments which would be converted into or exchanged with equity shares at a later date, by listed companies whose equity share capital is listed on any stock exchange, to any select group of persons under Section 81(1A) of the Companies Act 1956 on private placement basis shall be governed by these guidelines.
An amount equivalent to at least ten percent of the price fixed as per Chapter-
XIII of DISCLOSURE AND INVESTOR PROTECTION GUIDELINES, SEBI shall become payable for the warrants on the date of their allotment.

(Rs. in Crores)
Particulars
2007
2008
SOURCES OF FUNDS:
TOTAL
25,597.50
47,075.52
Security Premium Account The Securities Premium Account may be applied by the company(a) in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares; (b) in writing off the preliminary expenses of the company; (c) in writing off the expenses of, or commission paid or discount allowed on, any issue of shares or debentures of the company; or
(d) in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company.

(Rs. in Crores)
Particulars
2007
2008
SOURCES OF FUNDS:
TOTAL
25,597.50
47,075.52
Deferred Tax Assets/Deferred Tax Liabilities

ACCOUNTING STANDARD 22:
The differences between taxable income and accounting income can be classified into PERMANENT DIFFERENCES and TIMING DIFFERENCES.
Permanent differences are those differences between taxable income and accounting income which originate in one period and do not reverse subsequently. Timing differences are those differences between taxable income and accounting income for a period that originate in one period and are capable of reversal in one or more subsequent periods.
The tax effects of timing differences are included in the tax expense in the statement of profit and loss; and as deferred tax assets or as deferred tax liabilities, in the balance sheet.

(Rs. in Crores)
Particulars
2007
2008
SOURCES OF FUNDS:
TOTAL
25,597.50
47,075.52

(Rs. in Crores)
Particulars
2007
2008
SOURCES OF FUNDS:
TOTAL
25,597.50
47,075.52

(Rs. in Crores)
Particulars
2007
2008
SOURCES OF FUNDS:
TOTAL
25,597.50
47,075.52
Now, lets move to
Application of Funds Side

(Rs. in Crores)
Particulars APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Amortization Less: Depreciation Net Block Capital Work in Progress
2007
2008
18,526.93 100.41 7,385.96 11,040.56
20,847.04 100.47 8,123.01 12,623.56
11,040.56 INVESTMENTS CURRENT ASSETS, LOANS & ADVANCES Inventories: Stores and Spare Parts Inventories: Stock-in-Trade 505.44 1,827.54 6,106.18
12,623.56 4,103.19
557.67 2,047.31
Sundry Debtors
Cash in Hand and at Bank Loans and Advances Interest Accrued on Investments
631.63
7,681.35 3,055.73 0.20 13,701.89
543.48
465.04 33,348.74 0.20 36,962.44
Less: CURRENT LIABILITIES & PROVISIONS Current Liabilities Provisions 3,523.20 1,930.46 5,453.66 Net Current Assets Miscellaneous Expenses (to the extent not written off or adjusted) 8,248.23 202.53 3,855.26 2,913.52 6,768.78 30,193.66 155.11
TOTAL
25,597.50
47,075.52

(Rs. in Crores)
2007
2008
18,526.93 100.41 7,385.96 11,040.56
20,847.04 100.47 8,123.01 12,623.56
12,623.56 4,103.19
557.67 2,047.31
Sundry Debtors
631.63
7,681.35 3,055.73 0.20 13,701.89
543.48
465.04 33,348.74 0.20 36,962.44
TOTAL
25,597.50
47,075.52

(Rs. in Crores)
2007
2008
18,526.93 100.41 7,385.96 11,040.56
20,847.04 100.47 8,123.01 12,623.56
12,623.56 4,103.19
557.67 2,047.31
Sundry Debtors
631.63
7,681.35 3,055.73 0.20 13,701.89
543.48
465.04 33,348.74 0.20 36,962.44
TOTAL
25,597.50
47,075.52

(Rs. in Crores)
2007
2008
18,526.93 100.41 7,385.96 11,040.56
20,847.04 100.47 8,123.01 12,623.56
12,623.56 4,103.19
557.67 2,047.31
Sundry Debtors
631.63
7,681.35 3,055.73 0.20 13,701.89
543.48
465.04 33,348.74 0.20 36,962.44
TOTAL
25,597.50
47,075.52

(Rs. in Crores)
2007
2008
18,526.93 100.41 7,385.96 11,040.56
20,847.04 100.47 8,123.01 12,623.56
12,623.56 4,103.19
557.67 2,047.31
Sundry Debtors
631.63
7,681.35 3,055.73 0.20 13,701.89
543.48
465.04 33,348.74 0.20 36,962.44
TOTAL
25,597.50
47,075.52

(Rs. in Crores)
2007
2008
18,526.93 100.41 7,385.96 11,040.56
20,847.04 100.47 8,123.01 12,623.56
12,623.56 4,103.19
557.67 2,047.31
Sundry Debtors
631.63
7,681.35 3,055.73 0.20 13,701.89
543.48
465.04 33,348.74 0.20 36,962.44
TOTAL
25,597.50
47,075.52

(Rs. in Crores)
2007
2008
18,526.93 100.41 7,385.96 11,040.56
20,847.04 100.47 8,123.01 12,623.56
12,623.56 4,103.19
557.67 2,047.31
Sundry Debtors
631.63
7,681.35 3,055.73 0.20 13,701.89
543.48
465.04 33,348.74 0.20 36,962.44
TOTAL
25,597.50
47,075.52

(Rs. in Crores)
2007
2008
18,526.93 100.41 7,385.96 11,040.56
20,847.04 100.47 8,123.01 12,623.56
12,623.56 4,103.19
557.67 2,047.31
Sundry Debtors
631.63
7,681.35 3,055.73 0.20 13,701.89
543.48
465.04 33,348.74 0.20 36,962.44
TOTAL
25,597.50
47,075.52

(Rs. in Crores)
2007
2008
18,526.93 100.41 7,385.96 11,040.56
20,847.04 100.47 8,123.01 12,623.56
12,623.56 4,103.19
557.67 2,047.31
Sundry Debtors
631.63
7,681.35 3,055.73 0.20 13,701.89
543.48
465.04 33,348.74 0.20 36,962.44
TOTAL
25,597.50
47,075.52
Does Balance Sheet talk about RISK?
Think!!!

(Rs. in Crores)
Particulars
2007
SOURCES OF FUNDS:
SHAREHOLDER'S FUNDS Share Capital Share Warrants Reserves and Surplus Total Shareholders' Fund LOAN FUNDS Secured Loans Unsecured Loans 580.67 147.06 13,368.42 14,096.15 3,758.92 5,886.41 9,645.33
2008 Particulars APPLICATION OF FUNDS FIXED ASSETS 6,203.30 Gross Block Less: Amortization 21,097.43 Less: Depreciation 27,300.73 Net Block Capital Work in Progress 3,520.58 14,501.11 INVESTMENTS 18,021.69 CURRENT ASSETS, LOANS & ADVANCES Inventories: Stores and Spare Parts
2007
2008
18,526.93 100.41 7,385.96 11,040.56 11,040.56 6,106.18
20,847.04 100.47 8,123.01 12,623.56 12,623.56 4,103.19
505.44 1,827.54 631.63 7,681.35 3,055.73 0.20 13,701.89
557.67 2,047.31 543.48 465.04 33,348.74 0.20 36,962.44
CURRENT LIABILITIES & PROVISIONS Current Liabilities Provisions
3,523.20 1,930.46 5,453.66
3,855.26 2,913.52 6,768.78
Inventories: Stock-in-Trade Sundry Debtors Cash in Hand and at Bank Loans and Advances Interest Accrued on Investments
748.94
681.80 Miscellaneous Expenses (to the extent not written off or adjusted)
1,107.08
1,071.30
202.53
155.11
TOTAL
31,051.16
53,844.30
TOTAL
31,051.16
53,844.30
BALANCE SHEET AND BUSINESS RISK

Balance Sheet
LIABILITIES ASSETS
FINANCIAL RISK
OPERATING RISK
TOTAL RISK OF BUSINESS
Have you ever thought that

Sources of funds are not the same thing as LIABILITIES!!!!!!
Application of funds is not the same thing as ASSETS!!!!!!
&
Remember
First, Sources of Funds side of a Balance Sheet does not
represent the TOTAL LIABILITIES of a company.

Second, Application of Funds side of a Balance Sheet
does not represent everything of this side as TOTAL ASSETS.

Third, the focus of representing a Balance Sheet as
SOURCES OF FUND and APPLICATION OF FUNDS is a long-term focus.
Now, lets move towards understanding of
PROFIT AND LOSS ACCOUNT
PROFIT AND LOSS ACCOUNT OF TATA STEEL LIMITED FOR THE YEAR ENDING ON 31ST MARCH
(Rs. in Crores)
Particulars
2007 19,762.57 2,210.55 17,552.02 433.67 Total Income 17,985.69
2008 22,191.80 2,498.52 19,693.28 335.00 20,028.28
INCOME
Sale of Products and Services Less: Excise Duty Other Incomes
TOP LINE OF TATA STEEL
(Rs. in Crores)
Particulars
2007 10,814.77 819.29 11,634.06 236.02 11,398.04
2008 11,645.24 834.61 12,479.85 175.50 12,304.35 878.70 13,183.05 6,845.23 221.13 (150.00) 597.31 7,066.36 2,252.00 19.00 108.33 4,687.03
EXPENDITURE
Manufacturing, and Other Expenses Depreciation Less: Expenditure (Other than Interest) Transferred to Capital and Other Accounts
BOTTOM LINE OF TATA STEEL
Interest Total Expenditure PROFIT/(LOSS) BEFORE TAXATION AND EXCEPTIONAL ITEMS Employee Separation Compensation Profit on the Sale of Long-Term Investments Contribution For Sports Infrastructure Exchange Gain/(Loss) PROFIT/(LOSS) BEFORE TAXATION Current Tax Education Cess on Income Tax Fringe Benefit Tax Deferred Tax PROFIT/(LOSS) AFTER TAXATION
173.90 11,571.94 6,413.75 (152.10)
6,261.65 2,076.01 16.00 (52.51) 4,222.15
(Rs. in Crores)
Particulars APPROPRIATION OF PROFIT PROFIT/(LOSS) AFTER TAXATION Add: Balance brought forward
2007 4,222.15 2,976.16
2008 4,687.03 4,593.98
PROFIT/(LOSS) AVAILABLE FOR APPROPRIATION

APPROPRIATION Proposed Dividend Dividend on Cumulative Convertible Preference Shares Tax on dividend General Reserve Balance Carried to The Balance Sheet
7,198.31
9,281.01
943.91
1,168.93 22.19
160.42 1,500.00 4,593.98
202.43 1,500.00 6,387.46
Total
7,198.31
9,281.01
APPROPRIATION OF PROFIT OF TATA STEEL
Investments are assets held by an enterprise for earning income by way of dividends,
Accounting for Investments(AS 13)
interest, and rentals, for capital appreciation, or for other benefits to the investing enterprise. Assets held as stock-in-trade are not 'investments'.
A Current Investment is an investment that is by its nature readily realizable and is
intended to be held for not more than one year from the date on which such investment is made.
A Long Term Investment is an investment other than a current investment. An Investment Property is an investment in land or buildings that are not intended to be
occupied substantially for use by, or in the operations of, the investing enterprise.
Types of Investments(AS 13)
Current Investments
Long Term Investments
Current Investments
A current investment is an investment that is by its nature readily
realizable and is intended to be held for not more than one year from the date on which such investment is made.
The carrying amount for current investments is the lower of cost
and fair value. In respect of investments for which an active market exists, market value generally provides the best evidence of fair value.
reversals of such reductions are included in the profit and loss account.
For current investments, any reduction to fair value and any
Long-Term Investment
A long term investment is an investment other than a
current investment.
Long-term investments are usually carried at cost. However, when
there is a decline, other than temporary, in the value of a long term investment, the carrying amount is reduced to recognize the decline.
Where there is a decline, other than temporary, in the carrying
amounts of long term investments, the resultant reduction in the carrying amount is charged to the profit and loss statement.
Disclosure AS 13
Investments should be disclosed in financial
statements as the aggregate amount of
quoted and unquoted investments, giving

the aggregate market value of quoted investments.
Now, we move to
CASH FLOW STATEMENT
CASH FLOW STATEMENT OF TATA STEEL LTD FOR THE YEAR ENDING ON MARCH 31,
(All Rupees in Crores) 2007 2008
CASH FROM OPERATIONS OF TATA STEEL
A) CASH FLOW FROM OPERATING ACTIVITIES

Net Profit Before Tax Adjustments for: Depreciation (Profit)/Loss on sale of Assets/Discarded Assets written off (Profit)/Loss on sale of current investments (Profit)/Loss on sale of long term investments Impairment of Assets Amount received on cancellation of forward covers/options Provision for diminution in value of investments Loss on cancellation of own debentures Reversal of Impairment Loss Interest income Dividend income/Income from Investments Interest charged to Profit and Loss Account Provision for Wealth Tax Amortisation of long term loan expenses Contribution for sports infrastructure written off Exchange (Gain)/Loss on revaluation of foreign currency loans Operating Profit before Working Capital Changes Adjustments for Trade and other Receivables Inventories Trade and other Payables Cash Generated from Operations Direct Taxes paid Cash Flow before Exceptional Item Employee Separation Compensation paid Net Cash Flow from Operating Activities 7045.66 (21.94) (158.22) 512.04 331.88 7377.54 (2034.59) 5342.95 (224.85) 5118.10 6261.65 819.29 (11.19) (15.63) 6.22 (82.69) 0.10 (77.35) (324.16) 251.25 0.97 65.10 7066.36 834.61 (28.26) (9.98) 0.06 (124.30) (50.33) (170.67) 929.03 226.18 0.95 57.99 150.00 (743.60) 8138.04 (143.44) (272.00) 806.34 390.90 8528.94 (2060.20) 6468.74 (214.54) 6254.20
Miscellaneous Expenditure - Employee Separation Compensation (amortised) 152.10
CASH USED IN INVESTING OF TATA STEEL
B) CASH FLOW FROM INVESTING ACTIVITIES

Purchases of Fixed Assets Sales of Fixed Assets Purchases of Investments Purchase of investments in Subsidiaries Sale of Investments Intercorporate deposits Shareholder's loan to subsidiary Interest received Dividend received (2007.68) 17.85 (2458.97) 63.88
(18306.13) (31595.17) (118.17) (29587.40) 14623.48 (20.00) 58.89 324.16 34110.46 (85.80) 63.75 170.67
Exceptional Items :
Sale of long term investments in subsidiary Sale of other investments Net Cash used in Investing Activities (5427.60) (29318.58)
CASH FROM FINANCING TATA STEEL
C) CASH FLOW FROM FINANCING ACTIVITIES

Issue of Equity Capital Issue of Cumulative Convertible Preference Shares Issue of Share Warrants Capital contributions received Proceeds from borrowings Repayment of borrowings Amount received on cancellation of forward covers/options Long term loan expenses Interest paid Dividends paid Net Cash from Financing Activities Net increase in Cash and Cash Equivalents Opening Balance - Cash and Cash Equivalents Closing Balance - Cash and Cash Equivalents 1393.20 147.06 5.59 4881.45 5472.52
8043.69 17632.70 (916.31) (10386.61) 93.65 (118.88) (227.85) (717.69) 7702.46 7392.96 288.39 7681.35 134.41 (202.38) (746.07) (937.95) 15848.07 (7216.31) 7681.35 465.04
WHAT NEXT IN OUR AGENDA?

Fin Statement

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Fin Statement

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Analysis of Financial Statements

And, in this direction

Our first step is towards

Understanding financial statements of Tata Steel

First, we take Balance sheet

Sources of Funds Side

What is Balance Sheet?

to the next year.

We start understanding balance sheet by taking

Sources of Funds Side

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

DEFERRED TAX LIABILITY (NET) PROVISION FOR EMPLOYEE SEPARATION COMPENSATION

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

DEFERRED TAX LIABILITY (NET) PROVISION FOR EMPLOYEE SEPARATION COMPENSATION

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

DEFERRED TAX LIABILITY (NET) PROVISION FOR EMPLOYEE SEPARATION COMPENSATION

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

DEFERRED TAX LIABILITY (NET) PROVISION FOR EMPLOYEE SEPARATION COMPENSATION

Deferred Tax Assets/Deferred Tax Liabilities

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

DEFERRED TAX LIABILITY (NET) PROVISION FOR EMPLOYEE SEPARATION COMPENSATION

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

DEFERRED TAX LIABILITY (NET) PROVISION FOR EMPLOYEE SEPARATION COMPENSATION

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

DEFERRED TAX LIABILITY (NET) PROVISION FOR EMPLOYEE SEPARATION COMPENSATION

Now, lets move to

Application of Funds Side

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

18,526.93 100.41 7,385.96 11,040.56

20,847.04 100.47 8,123.01 12,623.56

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

18,526.93 100.41 7,385.96 11,040.56

20,847.04 100.47 8,123.01 12,623.56

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

18,526.93 100.41 7,385.96 11,040.56

20,847.04 100.47 8,123.01 12,623.56

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

18,526.93 100.41 7,385.96 11,040.56

20,847.04 100.47 8,123.01 12,623.56

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

18,526.93 100.41 7,385.96 11,040.56

20,847.04 100.47 8,123.01 12,623.56

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

18,526.93 100.41 7,385.96 11,040.56

20,847.04 100.47 8,123.01 12,623.56

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

18,526.93 100.41 7,385.96 11,040.56

20,847.04 100.47 8,123.01 12,623.56

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

18,526.93 100.41 7,385.96 11,040.56

20,847.04 100.47 8,123.01 12,623.56

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

18,526.93 100.41 7,385.96 11,040.56

20,847.04 100.47 8,123.01 12,623.56

Does Balance Sheet talk about RISK?

BALANCE SHEET OF TATA STEEL LIMITED AS AT 31ST MARCH

18,526.93 100.41 7,385.96 11,040.56 11,040.56 6,106.18

20,847.04 100.47 8,123.01 12,623.56 12,623.56 4,103.19

505.44 1,827.54 631.63 7,681.35 3,055.73 0.20 13,701.89

557.67 2,047.31 543.48 465.04 33,348.74 0.20 36,962.44

CURRENT LIABILITIES & PROVISIONS Current Liabilities Provisions

3,523.20 1,930.46 5,453.66