ANNUAL REPORT ANALYSIS

Presented by

GROUP 10,Finance-D
Hemanth
Prachi
Radha
Som
Sudeep
PRESENTATION OUTLINE
n INTRODUCTION
n ANALYSIS:
n BALANCE SHEET
n INCOME STATEMENT
n CASH FLOW STATEMENT
n LEARNING OUTCOME
n CONCLUSION

INTRODUCTION
n Tata Steel formerly known as TISCO (Tata
Iron and Steel Company Limited), is the
largest private sector steel company in
India in terms of domestic production.
n With the acquisition of Corus (now Tata Steel
Europe) in 2007, the Company today is the
tenth largest steel producer in the world
with an employee strength of above 81,000
across five continents.
PROFIT AND LOSS ACCOUNT
ANALYSIS
 REVENUE
n Net Sales in 2008-09: Rs. 24624.04 crores
n Net Sales in 2009-10: Rs. 25875.77 crores


 Although there has been an increase in net sales by 5.08%, this increase
is mainly due to less relative excise duty and greater other income i.e. there has
been a reduction of excise duty by 31.3% and other income grew by 176.96% as
compared to last year.


t been able to generate a significant growth out of their sales and operating income a
EXPENDITURE
2008-09 2009-10
15510.79 15948.14

 Here we see that there is an increase in

total expenditure by 2.9%.
 The main reason for this increase is due to a 5.6% rise in
the manufacturing and other expenses of the group (purchase
of power creating the major impact). Also the net finance
charges for the group have increased by 30.85%.
PROFIT BEFORE TAXES
2008-09 2009-10
7315.61 7214.30

 A decrease in sales and increase in

expenditures has led to the decrease in EBT
by 1.4%
 EBT-SALES RATIO:


2008-09

2009-10
0.29 0.27
 PROFIT AFTER TAXES
2008-09 2009-10
5201.74 5046.80

 This decrease is a demoralizing sign for the shareholders

as the profit after taxes is the amount tracked by them for the
dividend purpose.
NI-SALES RATIO:


2008-09 2009-10
0.19 0.18
OTHER OBSERVATIONS FROM P&L A/C

n The taxes paid this year has increased by

2.5% as compared to last year
n The proposed dividends has gone down by
39.28%
n Basic EPS of the group has reached 60.26
(2009: 69.45)
n Overall, the group has not recorded any significant growth
BALANCE SHEET ANALYSIS
FUNDS EMPLOYED:
Share Capital
n
n The share capital of the group has come to
887.41 crores (2009: 6203.45 crores)
 The main reason for this dilution is the conversion of 2%
cumulative convertible preference shares worth 5472.66 crores.
FUNDS EMPLOYED:
Reserves and Surplus
n There has been a 50.5% rise in the reserves
and surplus this year.
 This increase is only due to the amount received on
conversion of CCPS and amount received on issue of GDR’s.
q Reserves and Surplus contributes the total
funds employed by 56.16%
q There is a debenture redemption reserve of
400 crores added this year.
q Overall, there has been a 9.35% increase n
the Funds Employed from last year.
q
FUNDS EMPLOYED
n The deferred tax liability has increased by
48.14% this year.
 This is mainly due to the rise in wage provision by 83.6%
as compared to last year.
n There has been a foreign currency monetary
item translation difference account of
206.95 crores which contributes the total
funds employed by 0.3%
APPLICATION OF FUNDS


(Fixed Assets = Land, Building, P & M, Furniture, Office equipment, Vehicles, Intangibles)


Ø Increase in Gross block is 11.06%

Ø Increase in Depreciation is11.88%
Ø Increase in Net block is 10.52%
n
APPLICATION OF FUNDS
n The Financial Assets (Investments) of the
group has increased by 6.15% compared to
last year
 Reasons:
n Trade investments in Tinplate Company of

India by subscribing through rights issue

Rs.128.61 crores (2009: 29.68
crores).Rs.172.48 crores for fully
convertible debentures.
n 3,06,00,000 shares pledged during the

year to Dhamra Port Co. Ltd. increasing

the investments by 55.46%
n
n
 APPLICATION OF FUNDS


n Current assets has increased by 18.22% (5707.05 to 6747.01)

n Cash and Bank balances increase by 103.3%
n Net current Assets has increased by 147.6%
n Increase in cash and bank balances
n Increase in Loans and Advances by 20.58%
n

Note : Net current assets=Current Assets+ Loans & Advances-

Current Liabilities & Provisions
CASH FLOW STATEMENT
ANALYSIS
CASH FLOW FROM OPERATING ACTIVITIES

n The net cash flow from operating activities

has increased by 10.85% from the previous
year.
n Interest charged to P&L and Depreciation
being the major factors causing the
increase
n Adjustments for trade payables and other
liabilities is 330.20 crores (2009: 1772.02)
CASH FLOW FROM INVESTING ACTIVITIES

n The net cash flow from investing activities has

decreased by 82.32% from the previous
year.
n Purchase and Sale of Investments bearing
the major part of change
n Purchase of Investments increased by
217.6%
n Sale of investments fetched amount which is
greater than last year by 236.3%
CASH FLOW FROM FINANCING ACTIVITIES

n The net cash from financing activities has

come from an inflow of 3156.43 crores in
the year 2008-09 to an outflow of 1473.13
crores in the year 2009-10
 There are two reasons behind this:
n The group has issued additional equity
capital worth 2421.25 crores
n The group has repaid its borrowings to the
extent of 7047.78 crores
FREE CASH FLOWS
n The free cash flows (operating +/- investing)
for the year are 3114.38 crores
 (2009: -2030.87 crores)
n The increase in Free cash flows from the
previous year is 253.35%
 RATIO ANALYSIS
KEY RATIOS GROUP GROUP INDUSTRY
2009-2010 2008-2009
Debt-Equity Ratio 0.78 0.78 1.02
Long Term Debt-Equity Ratio 0.78 0.78 0.88

Current Ratio 1.05 2.3 1.21

Turnover Ratios
Fixed Assets 1.26 1.47 1.28
Inventory 8.16 8.82 6.59
Debtors 49.98 45.52 12.49
Interest Cover Ratio 4.42 5.91 4.83
PBIDTM (%) 34.58 36.43 19.72
PBITM (%) 30.53 32.8 15.71
PBDTM (%) 27.67 30.88 16.47
CPM (%) 20.57 23 12.65
APATM (%) 16.53 19.38 8.64
ROCE (%) 13.7 17.23 22.22
RONW (%) 14.19 21.88 27.88
THANK YOU
ALL !!
