Final report in working capital management of tata steel ltd.

SUMMER INTERNSHIP AT TATA STEEL LTD
M.S RAMAIAH INSTITUTE OF MANAGEMENT 1
SUMMER INTERNSHIP PROJECT REPORT
AT
“WORKING CAPITAL MANAGEMENT OF TATA STEEL LTD AND
COMPARATIVE
ANALYSIS BETWWEN TATA STEEL, SAIL AND JINDAL”
A Project Report Submitted In Partial Fulfillment of the Requirement
For The Award of the
POST GRADUATE DIPLOMA IN MANAGEMENT
TO
M.S.RAMAIAH INSTITUTE OF MANAGEMENT
BY
NEHA SINGH
REG NO: 141257
BATCH: 2014-2016
UNDER THE GUIDANCE OF
PROF. ARVINDA REDDY M N
M.S RAMAIAH INSTITUTE OF MANAGEMENT
NEW BEL ROAD, BANGALORE- 560054
JULY 2015

CERTIFICATE
This is to certify that the ProjectReportundertakenby Neha Singh (141257)
conducted at TATA STEEL submitted in partial fulfillment of the
requirements for the awardof the
TO
Is a record of bonafide internship carried out under my supervision and
guidance. She has attended the required guidance sessions held. This report
has not been submitted for the award of any other degree/diploma/fellowship
or similartitlesor prizes.
Name: Prof. Aravinda Reddy M N
Qualification:
Guide’s signature:

STUDENT’S DECLARATION
I hereby declare that the Project Report conducted at TATA STEEL
Under the guidance of Prof. Aravinda Reddy M N
Submitted in Partial fulfillment of the requirements for the
TO
Is my original work and the same has not been submitted for the award of any
other Degree/Diploma/Fellowship or other similar titles or prizes.
Place: Bangalore NEHA SINGH
Date: 31st July 2015 Reg. No.:141257

ACKNOWLEDGEMENT
The fundamental characteristic of summer internship program lies not just in
the successfulcompletion of a given project butalso in the positive expansion
of the professional business personinside a student.
I extend my special gratitude to our Dean Dr.H.Muralidharan, Academic
Head Prof. V. Narayanan & Programme Head Dr. Savita Rani
Ramachandranforinspiring me to take up this project and also for their able
guidance and support in completing this internship.
I wish to acknowledge my sincere gratitude and indebtedness to my project
guide Mr. Aravinda Reddy M N of M.S. RAMAIAH INSTITUTE OF
MANAGEMENT Bangalore for his/her valuable guidance and constructive
suggestions in the preparation of project report.
I would like to extend my gratitude to Mr. Rahul Sharma (Financial
transaction and control) for giving me opportunity to work in such an
important sphere and sharing his vision and experience.
Last but not the least I would like to extend my thanks to all the employees at
finance department, my family and friends for their cooperation, valuable
information and feedback during my project
NEHA SINGH
REG NO: 141257

CONTENTS
CHAPTER I - INDUSTRY ANALYSIS
1.1 Brief history of growth and development in iron and steel industry.
1.2 Future growth prospects.
1.3 Government Policies.
1.4 Major players of Steel industry
1.5 Michael E Porter’s Analysis of Tata Steel ltd.
CHAPTER II – COMPANY ANALYSIS
2.1 About the company
2.2 Environment
2.3 Marketing
2.4 Customers of Tata Steel
2.5 Competitors
2.6 Technology
2.7 Human Resources
2.8 Operations
2.9 Finance
2.10 Company Hierarchy
2.11 SWOT Analysis
CHAPTER III – DISCUSSION ON TRAINING
3.1 Roles and Responsibilities
3.2 Description of tasks handled
3.3 Contribution to the organization
CHAPTER IV – ANALYSIS OF TASK UNDERTAKEN
4.1 Introduction
4.2 Research Design
4.3 Data Analysis
4.4 Findings
4.5 Conclusion
4.6 Recommendation
BIBLIOGRAPH
ANNEXURES

LISTS OF TABLES AND FIGURES
TABLES
2.1 Market Share Competition
2.2 Financial ratio of TATA STEEL
2.3 Performance metrics
4.1 Tata Steel cost sheet
4.2 Tata Steel profit and loss statement
4.3 Tata Steel net working capital
4.4 Cost Sheet of SAIL
4.5 SAIL P/L Account
4.6 Balance Sheet of SAIL
4.7 Working Capital of SAIL
4.8 Cost Sheet of Jindal
4.9 Jindal P/L Account
4.10 Balance Sheet of Jindal
4.11 Working capital of Jindal
4.12 Current ratio
Figures / Chart
1.1Current and Projected Production Capacity of STEEL
2.1 Performance metrics
4.1 Net Working Capital
4.2 Net Working Capital

EXECUTIVE SUMMARY
This internship is a bridge between the institute and organization. This training program is
designed to give the future manager a feel about the corporate happenings and work culture of
an organization. These real life situations are entirely different from the stipulated exercise
enacted in an artificial environment inside the classroom and it is precisely because of this
reason that this summer training program is designed, so that managers of tomorrow get ideas
about the real time business operations. The summer internship program helps us to apply our
theoretical knowledge into the practical field.
Working capital is the most important part of the current assets of an organization. Management
of working capital is important because it has a direct impact on the financial resources of the
organization. Excess investment on the part of inventory is not viable because the funds then
will be held up in inventories and will not be available for other important segment of the
business. Less investment is also detrimental because the company might face a huge problem
in fulfilling the requirement of the business. Therefore, proper working capital management is
very essential for an organization.
This project explains in details of working capital management and how it is operated in an
organization. Various ratio analysis have been taken out on the basis of the data provided so as
to find out the trends of working capital requirements in TATA STEEL LIMITED, a leading
manufacturer of the steel in the world. A brief study of Indian steel has carried out a
comparative analysis of TATA STEEL LIMITED (TSL) AND JINDAL STEEL AND
POWER LTD (JSPL) AND SAIL. Thus analysis studies the different techniques used by
different companies and how effective those prove in this competitive environment.

CHAPTER - I
INDUSTRY ANALYSIS
INTRODUCTION AND COMPANY PROFILE
1.1 BRIEF HISTORY OF GROWTH AND DEVELOPMENT IN IRON &
STEELINDUSTRY
Steel is one of the top manufactured products of the world. It contributes to about 1661.5
million tones and showing a growth of over 1.2% in 2013. (Source: World Steel Association

or WSA) Nearly 67% of this was contributed to by Asia. China's share was 49.2%.China
remained the world’s largest crude steel producer in 2014 (823 mt) followed by Japan (110.7
mt), the USA (88.3 mt) and India (83.2 mt) at the 4th position. The history of the modern steel
industry began in late 1850s, but since then steel has been basic to the world's industrial
economy. Indian players like Tata Steel, SAIL and many others have gone global due to the
steel industry's growing rapidly and reaching new heights.
Steel is an important indicator to analyze the economic development of a country. The steel
industry is highly scientific and technology oriented. Technological advancement is very
important for the overall health of the steel industry.
1.1.1 GLOBAL SCENARIO
In 2014, global demand is forecast to grow faster at about 3.3%. However, more demand
growth is expected to come from outside of China as the Chinese Government pushes through
economic restructuring with a focus on private consumption. With the exception of China,
global supply and demand for steel will largely follow economic growth recovery around the
world.
In China, national mandates to rationalize capacity will have an effect on supply and as the
Chinese economy moves to a more consumer-driven model, steel consumption is expected to
moderate. The short-term estimates by World Steel Association for global steel demand are
similar on an overall basis, with some more positive views for growth in the US, the EU, Brazil
and Russia but a relatively lower expectation for Asian countries.
Growth in the Chinese economy continues to be a determining factor for the global steel market
in the medium-to-long term. As China seeks to restrain investment activity, rebalancing and
deleveraging, current forecasts for 2014 are for lower growth rates in production and demand
with the removal of excess capacity. However, if urbanization projects continue, accompanied
By a strong domestic economy and a growing middle class, the demand for steel will continue
to stimulate. It will also shift the product range as more sophisticated consumer products, such
as automobiles and home appliances, are sought after. This will benefit steelmakers with high-
end, value-added products. Two factors may cause more rapid restructuring of the Chinese
steel sector:

• The excessive levels of debt may allow Chinese policy banks to stop funding losses as a
catalyst to restructure.
• The use of steel stockpiles to collateralize debt to be used for speculation is expected to be
unwound.
Steel demand in Europe and the US is likely to improve during 2014–15. In Europe, it is
expected to increase by a robust 2% in 201411 on the back of investment in the infrastructure
and manufacturing sectors. Although the growth may be insufficient to absorb the capacity
overhang, the switch from decline to marginal growth can be important for industry margins
and overall sentiment. US steel demand is also expected to improve on the back of residential
construction, growing automotive production and energy investments. Other regions to
experience faster steel demand growth will be India, Brazil, Russia and MENA (the Middle
East and North Africa).
It is fairly clear that while there has been a continuous strong growth, year on year, in China.
However, the trends in Japan and USA have not been so. The European Union has not been
out of the financial mess and the emerging economies do not hold any strong promise to the
global investor community in the short run as their macro management has been far below
expectation. The latest report of IMF also point to gloomy prospects of the emerging economies
while at the same time, they have in fact seen some stability creeping into the economies of the
developed world.
1.1.2 INDIAN SCENARIO
India's steel industry is more than a century old. Before the economic reforms of the early
1990s the Indian steel industry was predominantly regulated by the public sector. Tata Steel
was the only major private sector company involved in the production of steel in India. SAIL
and Tata Steel have traditionally been the major steel producers of India. In 1992, liberalization
of the Indian economy led to the opening up of various industries including the steel industry.
Thus the number of producers increased, with increased investments in the steel industry and
increased production capacity.
Indian Steel industry went through a rough phase between 1997 and 2001 when the overall
global steel was facing a downturn but recovered after 2002. The major factors that led to the
revival of steel industry in India were the rise of global demand for steel and the domestic
economic growth in India.

The Indian steel industry has entered into a new development stage from 2007-08, riding high
on the resurgent economy and rising demand for steel. Rapid rise in production has resulted in
India becoming the 4th largest producer of crude steel and the largest producer of sponge iron
or DRI in the world.
Production
• Steel industry was delicensed and decontrolled in 1991 & 1992 respectively.
• Today, India is the 4th largest crude steel producer of steel in the world.
• India is the largest producer of sponge iron in the world with the coal based route
accounting for 89% of total sponge iron production in the country.
• Data on production for sale of pig iron, sponge iron and total finished steel (alloy +
non-alloy) are given below for last five years and April-December
1.2 FUTURE GROWTHPROSPECTS
There are many studies projecting steel demand growth scenario over the next couple of
decades. In a recent study, the Boston Consulting Group (BCG) has made the following
observations. :
a) On the present pattern of growth - the real GDP of India grew from 2002 to 2013 was at
7.4per cent and the steel consumption grew by 8.2per cent in the said period. Over the next 12
years at a GDP growth of 6 – 6.5per cent, and a GDP elasticity of steel demand at 1.1, the likely
growth of steel consumption growth rate was estimated at 7.3per cent per year and the finished
steel consumption in 2025-26, on this basis, was estimated to grow to 155 – 170 million tons
by that year.
b) Bench marking India’s stage of economic growth with other countries – On another model,
following established trajectory of growth as seen in other countries, the per capita
consumption of steel in India would move from the level of 59 kgs in 2011 to 175 kgs in 2025-
26, and given the fact that the population of India is projected to grow to 1.43 billion that year,
the steel consumption in 2025-26 is likely to be around 250 million tons. c) The goal of India
to increase share of manufacturing to 25per cent of GDP by 2025 – The above target if achieved
can propel the usage of finished steel from 16 kgs / $ PPP in the year 2012 to 22 – 25 kgs / $

PPP in the year 2024-25. This would mean a growth in steel consumption of 9 -10per cent and
the steel consumption in 2025-26 is likely to be around 230 – 255 million tons
FIGURE 1.1
Fig. 1 Current as well as projected production capacity of steel industry
1.3 GOVTERNMENTPOLICIES
The economic reforms initiated by the Government since 1991 have added new dimensions to
industrial growth in general and steel industry in particular. Licensing requirement for capacity
creation has been abolished, except for certain locational restrictions. Steel industry has been
removed from the list of industries reserved for the public sector. Automatic approval of foreign
equity investment upto 100% is now available. Price and distribution controls have been
removed from January, 1992, with a view to make the steel industry efficient and competitive.
Restrictions on external trade, both in import and export have been removed. Import duty rates
have been reduced drastically. Certain other policy measures such as reduction in import duty
of capital goods, convertibility of rupee on trade account, permission to mobilize resources
from overseas financial markets and rationalization of existing tax structure for a period of time
have also benefited the Indian steel industry.
0
25
50
75
100
2008-09 2010-11 2012-13 2014-15
Finished Steel Production Finished Steel Capacity Production / Capacity

1.3.1 Important policy measures:
In the new Industrial Policy announced in July, 1991 Iron and Steel industry, among others,
was removed from the list of industries reserved for the public sector and also exempted from
the provisions of compulsory licensing under the Industries (Development and Regulation)
Act, 1951.
i. With effect from 24.5.92, Iron and Steel industry has been included in the list of `high
priority' industries for automatic approval for foreign equity investment upto 51%. This
limit has been recently increased to 100%.
ii. Price and distribution of steel were deregulated from January 1992. At the same time,
it was ensured that priority continued to be accorded for meeting the requirements of
small scale industries, exporters of engineering goods and North Eastern Region of the
country, besides strategic sectors such as Defence and Railways.
iii. Iron & Steel are freely importable as per the Extant Policy.
iv. Iron & Steel are freely exportable.
v. Advance Licensing Scheme allows duty free import of raw materials for exports.
vi. The floor price for seconds and defectives continues till date.
vii. Imports of seconds and defectives of steel are allowed only through three designated
ports of Mumbai, Calcutta and Chennai.
viii. Mandatory pre inspection certificate by a reputed international agency for every import
consignment of seconds and defectives.
ix. In the union Budget 2007-08 the import duty on seconds and defective has been further
reduced from 20% to 10%
1.4 MAJOR PLAYERS OF STEELINDUSTRY
The major players of steel in India are:
1. Vedanta Resources is a London Stock Exchange listed, globally
diversified natural resources major with interests in Zinc, Lead, Silver, Copper, Iron
Ore, Aluminum, Power and Oil & Gas. Our exploration portfolio from all the four
continents that we operate in, follows a history of consistent geological discovery.

2. Bajaj Steel Industries Ltd is counted among the reputed manufacturers,
exporters and suppliers of cotton processing equipment, fully automatic ginning plant,
cotton bale wire ties, double roller ginning machine spare parts, electrical panels, gear
blanks, head spigot, steel reels, turbine housings, winder cam, windmill shafts etc.
3. Visa Steel Ltd is a flagship company of the Visa Group, which has
business interests in steel, power, cement, international trading and urban infrastructure
etc. Visa Steel is a leading player in the special steel, ferro chrome and metallurgical
coke business in India.
4. Kirloskar is a US$ 1.20 billion engineering conglomerate driving critical
industries. They are century old pioneers in our areas of specialization like power,
construction and mining, agriculture, industry and transport, oil and gas and
environment protection with a range of world-class industrial products and turnkey
services.
5. National Mineral Development Corporation (NMDC) was incorporated
in 1958 as a Government of India fully-owned public enterprise. NMDC is under the
administrative control of the Ministry of Steel, Government of India. Since its
inception, the company has been involved in the exploration of a wide range of
minerals, including iron ore, copper, etc.
6. Tata Steel was founded in 1907 by Mr. J N Tata. It started as Asia's first
integrated private sector steel company and presently is among the top ten global steel
companies with an annual crude steel capacity of nearly 30 million tones per annum
(MTPA). It is now the world's second-most geographically-diversified steel producer.
7. Rashtriya Ispat Nigam Ltd (RINL) is the corporate entity of
Visakhapatnam Steel Plant and is a Navratna PSE under the Ministry of Steel,

8. Jindal South West Steel or JSW Steel is the flagship company of the JSW
Group. Originally starting off from a single steel mill in 1982, JSW steel is now a US$
9 billion global conglomerate spread over six locations in India and with a footprint that
extends to the US, South America and Africa.
9. Steel Authority of India Ltd (SAIL) is the leading steel-making company
in the country. It is fully integrated iron and steel maker, producing both basic and
special steels for domestic construction, engineering, power, railway, automotive and
defense industries and for sale in export markets. SAIL is also among the seven
Maharatnas of the country.
10. Jindal Steel and Power Ltd Jindal Steel and Power Ltd (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.

1.5 MICHAEL E. PORTERSANALYSIS OF TATA STEEL
Porter five forces analysis is a framework to analyze the level of competition within an industry
and business strategy development. It draws upon industrial organization (IO) economics to
derive five forces that determine the competitive intensity and therefore attractiveness of an
Industry. Attractiveness in this context refers to the overall industry profitability. An
"unattractive" industry is one in which the combination of these five forces acts to drive down
overall profitability. A very unattractive industry would be one approaching "pure
competition", in which available profits for all firms are driven to normal profit. This analysis
is associated with its principal innovator Michael E. Porter of Harvard University.
Porter referred to these forces as the micro environment, to contrast it with the more general
term macro environment. They consist of those forces close to a company that affect its ability
to serve its customers and make a profit. A change in any of the forces normally requires a
business unit to re-assess the marketplace given the overall change in industry information.
The overall industry attractiveness does not imply that every firm in the industry will return
the same profitability. Firms are able to apply their core competencies, business model or
network to achieve a profit above the industry average. A clear example of this is the airline
Industry. As an industry, profitability is low and yet individual companies, by applying unique

Business models, have been able to make a return in excess of the industry average. Porter’s
five forces include - three forces from 'horizontal' competition: the threat of substitute products
or services, the threat of established rivals, and the threat of new entrants; and two forces from
'vertical' competition: the bargaining power of suppliers and the bargaining power of
customers.
In this article, we have analyzed the domestic steel sector through Michael Porter's five force
model so as to understand the competitiveness of the sector.
1.5.1 COMPETITION
It is medium in the domestic steel industry as demand still exceeds the supply. India is a net
importer of steel. However, a threat from dumping of cheaper products does exist.
1.5.2 BARRIERS TO ENTRY
We believe that the barriers to entry are medium. Following are the factors that vindicate our
view.
1. Capital Requirement: Steel industry is a capital intensive business. It is estimated that to
set up 1 mtpa capacity of integrated steel plant, it requires between Rs 25 bn to Rs 30 bn
depending upon the location of the plant and technology used.
2. Economies of scale: As far as the sector forces go, scale of operation does matter. Benefits
of economies of scale are derived in the form of lower costs, R& D expenses and better
bargaining power while sourcing raw materials. It may be noted that those steel companies,
which are integrated, have their own mines for key raw materials such as iron ore and coal and
this protects them for the potential threat for new entrants to a significant extent.
3. Government Policy: The government has a favorable policy for steel manufacturers.
However, there are certain discrepancies involved in allocation of iron ore mines and land
acquisitions. Furthermore, the regulatory clearances and other issues are some of the major
problems for the new entrants.
4. Product differentiation: Steel has very low barriers in terms of product differentiation as it
doesn't fall into the luxury or specialty goods and thus does not have any substantial price
difference. However, certain companies like Tata Steel still enjoy a premium for their products
because of its quality and its brand value created more than 100 years back. Bargaining power
of buyers: Unlike the FMCG or retail sectors, the buyers have a low bargaining power.

However, the government may curb or put a ceiling on prices if it feels the need to do so. The
steel companies either sell the steel directly to the user industries or through their own
distribution networks. Some companies also do exports.
1.5.3. BARGAINING POWER OF SUPPLIERS
The bargaining power of suppliers is low for the fully integrated steel plant like Tata Steel, as
they have their own mines of key raw material like iron ore coal. However, those who are non-
integrated or semi integrated has to depend on suppliers. An example could be SAIL, which
imports coking coal.
1.5.4 BARGAINING POWER OF BUYERS
Bargaining power of buyers is moderate as there are few players in this industry and for Tata
Steel as the industry is very competitive and due to globalisation more and more intruders are
Prompting to invest in India and the major competitors are also looking for the opportunity to
grab the business so buying power for the buyers is moderate.
1.5.5 THREAT OF SUBSTITUTE
It is medium to low. Although usage of aluminum has been rising continuously in the
automobile and consumer durables sectors, it still does not pose any significant threat to steel
as the latter cannot be replaced completely and the cost differential is also very high
---------------------------------------------xxxxxxxxxxxxxxxx--------------------------------------------------
CHAPTER II

COMPANY ANALYSIS
2. COMPANY PROFILE
2.1 ABOUT THE TATA STEEL LTD.

Established in 1907, TATA STEEL LTD is among the top ten global steel companies with an
annual crude steel capacity of over 28 million tons per annum (mtpa). It is now one of the
world's most geographically-diversified steel producers, with operations in 26 countries and a
commercial presence in over 50 countries.
TATA Steel's larger production facilities include those in India, the UK, Netherlands, Thailand,
Singapore, China and Australia. Operating companies within the group include Tata Steel
Europe Limited (formerly known as Corus), NatSteel, and Tata Steel Thailand (formerly
millennium steel).
Backed by 100 glorious years of experience in steel making, Tata Steel is the world's 6th largest
steel company with an existing annual crude steel production capacity of 30 Million Tones Per
Annum (MTPA). Established in 1907, it is the first integrated steel plant in Asia and is now
the world's second most geographically diversified steel producer and a Fortune 500 Company.
Tata Steel has a balanced global presence in over 50 developed European and fast growing
Asian markets, with manufacturing units in 26 countries.
It was the vision of the founder, Jamsetji Nusserwanji Tata, that on 27th February, 1908, the
first stake was driven into the soil of Sakchi. His vision helped Tata Steel overcome several
periods of adversity and strive to improve against all odds.
Tata Steel's Jamshedpur (India) Works has a crude steel production capacity of 6.8 MTPA
which is slated to increase to 10 MTPA by 2010. The company also has proposed three
Greenfield steel projects in the states of Jharkhand, Odisha and Chhattisgarh in India with
additional capacity of 23 MTPA and a Greenfield project in Vietnam.

Through investments in Corus, Millennium Steel (renamed Tata Steel Thailand) and NatSteel
Holdings, Singapore, Tata Steel has created a manufacturing and marketing network in Europe,
South East Asia and pacific-rim countries. Corus, which manufactured over 20 MTPA of steel
in 2008, has operations in the UK, the Netherlands, Germany, France, Norway, and Belgium.
Tata Steel, through its joint venture with Tata BlueScope Steel Limited, has also entered the
steel building and construction applications market.
The iron ore mines and collieries in India give the Company a distinct advantage in raw material
sourcing. Tata Steel is also striving towards raw materials security through joint ventures in
Thailand, Australia, Mozambique, Ivory Coast (West Africa) and Oman. Tata Steel has signed
an agreement with Steel Authority of India Limited to establish a 50:50 joint venture company
for coal mining in India. Also
Tata Steel has brought 19.9% stake in New York Millennium Capital Corporation, Canada for
iron ore mining.
Tata Steel India is the first integrated steel company in the world, outside Japan, to be awarded
the Deming Application Prize 2008 for excellence in Total Quality Management.
2.1.1 VISION OF THE COMPANY
We aspire to be the global steel industry benchmark for
Value Creation and Corporate Citizenship.
2.1.2 MISSION OF THE COMPANY
Consistent with the vision and values of the founder Jamsetji Tata, Tata Steel strives to
strengthen India's Industrial base through the effective utilisation of staff and materials. The
means envisaged to achieve this high technology and productivity, consistent with modern
management practices.Tata steel recognises that while honesty and integrity are the essential
ingredients of a strong and stable enterprise, profitability provide the main spark for economic
activity. Overall, the company seeks to scale heights of excellence in all that it does in an
atmosphere free from fear, and thereby reaffirms its faith in democratic values.
2.1.3 STRATEGIC OBJECTIVES OF TATA STEEL
 A key to address the demands of the future.

 Making giant strides towards commissioning.
 Achieving growth with sustainability.
2.1.4 QUALITY POLICY OF TATA STEEL
• Tata Steel is an equal opportunity employer.
• Tata Steel recognises that its people are the primary source of its competitiveness.
• It will pursue management practices designed to enrich the quality of life of its
employees, develop their potential and maximize their productivity.
• It will aim at ensuring transparency, fairness and equality in all its dealings with its
employees.
• Tata Steel strive continuously to foster a climate of openness, mutual fund and team
work.
• In the process, Tata steel shall strive to be the employer of choice by attracting the best
available talent and ensuring a cosmopolitan workforce.
2.2 ENVIRONMENT
2.2.1 INTERNAL ENVIRONMENT
Tata Steel reaffirms its commitment to provide safe work place and clean environment to its
employees and other stakeholders as an integral part of its philosophy and values. We will
continually enhance our Environmental, Occupational Health & Safety (EHS) performance iN
Our activities, products and services through a structured EHS management framework.
Towards this commitment, we shall:
 Establish and achieve EHS objectives and targets
 Ensure compliance with applicable EHS legislation and other requirement and
go beyond .
 Conserve natural resources and energy by constantly seeking to reduce
consumption and promoting waste avoidance and recycling measures

 Eliminate, minimize and/ or control adverse environmental impacts and
occupational health and safety risks by adopting appropriate ‘state-of-art’
technology and the best EHS management practices at all levels and functions.
 Enhance awareness, skill and competence of our employees and contractors so
as to enable them to demonstrate their involvement, responsibility and
accountability for sound EHS performance.
2.2.2 External Environment
TATA STEEL ltd enjoys active demand in the International as well as domestic markets.
 These products are continuously demanded worldwide, whole of the year.
 The customers are willing to pay for quality products
 The sales of this sectors were $40 billion in the past year.
2.2.3 Economic
Tata Steel ltd is influenced by the macro-economic factors. There has been a change in macro-
economic factors of India and tata steel is influenced by these factors. The increase in taxes has
an adverse effect on the company’s revenue. Government of India is committed to deregulate
and liberalize industry through privatization of state-owned companies.
2.2.4 International
 Tata Tiscon partners with international manufactures.
 Tata Tiscon have signed agreements with world’s leading companies to increase
business by updating market needs and fulfilling them.
 Tata Tiscon shares are sold internationally.
2.3 MARKETING
2.3.1 PRODUCT PORTFOLIO
a)Raw products: With a century of experience in sourcing raw material through scientific
research and development mining. TATA STEEL’s three main areas of raw material, operation
are iron-ore, chromites and coal. The company's long term strategy has been designed to have
greater control over raw material.

b) Agricultural implements - Tata Steel manufactures superior quality agricultural implements
through its Agrico Division from Tata High Carbon Steel, after using a single piece by forging.
The high quality of the products makes them the first choice in agricultural equipment
procurement both in the public and private sectors alike.
c) Flat products - Galvanized corrugated sheets under brand name Tata Shaktee Steelium,
another product of the Flat Products Division happens to be the world's first branded Cold
Rolled Steel and has a strong presence in the retail segment through exclusive shops called
Steelium zones.
d) Long Products- Thermo Mechanically Treated (TMT) rebars from the Long Products
Division are produced under the brand name "TISCON" and are the first of its kind to have
been introduced in India. Tisco has been the first rebar in the country to be awarded the 'Super
Brand' status in the construction rebars category.
e) Tubes- Pipes manufactured by the company's strategy business unit TATA TUBES, is the
most prominent brand in the industry today which is related through a wide distribution

network. A deeply thought out branding exercise was under taken in order to unleash the power
of the 'TATA PIPES' brand in the wielded steel. The tube division's main works is situated at
Jamshedpur and the marketing Head Office is in Kolkata.
Its three main lines of business are:-
• Commercial Tubes- For the conveyance segments, sold under the brand name of "Tata
Pipes".
• Structural Tubes- For the construction segment, sold under the brand name of "Tata
Structure".
• Precision Tubes- For the Auto, Boiler and Engineering segments.
f) Wires - Steel Wires under the brand name Tata Wiron comprise 30% of market share of the
organized wire market in India. A wide range of wires manufactured by Tata Steel's wire
Market in India. A wide range of wires manufactured by TATA STEEL's wire division cater
to the needs of the various industry segments such as automobiles, infrastructure, power and
General engineering. The products are well established across the markets of Europe, USA,
Middle East Asia, Australia, South Asia and Asia-Far East. The range includes:
➢ Auto segment (Tyre Bead Wire, Spring Wire, Spoke Wire, Ball Bearing Wire)
➢ Construction Segment (LRPC,PC Wires)
➢ Power Segment (Cable armour, ACSR)
➢ Textile Industry (Card Clothing Wire)
➢ Galvanized Wires (Farming/Fencing0
g) BEARING - A wide variety of bearing and auto assemblies are manufactured at TATA
STEEL at its bearing division with a production capacity of 30 million bearing numbers per

annum, Tata’s bearing and auto components happen to be the preferred choice of the key
players in the targeted industry segment. The product range includes:
➢ Ball Bearings
➢ Tapered Roller Bearings
➢ Magneto Bearings
➢ Double Row Angular Contact Bearings
➢ Clutch Release Assemblies
➢ Fan Support Assemblies
➢ Cylindrical Roller Bearings
2.3.2 DISTRIBUTION CHANNEL OF TATA STEEL
1. G C Sheets: Traditionally G C sheets were considered as a commodity. Over time, TISCO
has succeeded in differentiating its product and becoming a market leader. Presently it has 32%
market share in the G C sheets industry. The company serves a wide variety of consumers,
ranging from reputed contractors to retail users from the private sector organization to the
public sector undertakings. These consumers can be classified into 3 major groups:
a. Government,
b .Retailer (B TO C),
c. Private sector consumers (B TO B).
To cater to the needs of all its consumers, the company does both (B to B selling) and retail
outlets (B to C selling). Bulk orders come under direct selling and small order from retail
Outlets. Tata steel has selected 28 distributors in different location across India. Every
distributor is given 2 days training session, after which they become confident about the
product and learn how to differentiate its product from its competitor product. Aggressive
distribution strategy needs to be adopted for covering large rural area. Distributors keep
active sales force to cover all the retailers in their geographical area. Their sales force visits
different rural and urban areas to attract retailers so that they can maximize their sales. Also,
the sales force comes up with attractive schemes for the retailers to help them achieve their

target sales. Dealers keep RSU vans which is used for transportation and advertising. All the
distributors have upgraded warehouse with weighing machine.
Tata steel segments its retailers in 4 categories:
1. The STAR.
2. The CHALLENGER.
3. The FRIEND.
4. The DOG.
In the diagram below we have the potential of the retailer to meet sales targets in y axis and
the retailer’s loyalty in the x axis.
Star – high potential and high loyalty
Challenge – high potential but low loyalty
Friend – high loyalty but low potential
Dog – low potential and low loyalty
POTENTIAL
LOYALTY
Tata Shakti has 5000 retailer across India. It has 683 retailers in Maharashtra. They had
classified its retailer on the basis of potential and loyalty. They had offered different schemes
to retailer according to their sales. They offer great discount for their star retailer, so it act as a
motivator for the challenge retailers to come in star segment. Channel capability can be built
by deployment of effective sales force and by ROI guarantee schemes for retailers. Stock points
are located at convenient locations which are easily assessable by customers.
CHALLENGE STAR
DOGS FRIENDLY

They follow a simple philosophy for distribution: To create a Professional distribution through
an organized retail network focused on servicing natural local market that captures value of
brand.
Tata sells about 40 per cent of its total flat products, both hot-rolled and cold rolled products,
through the distribution channel while the remaining 60 per cent is directly sold to customers.
2.3.3 MARKETING MIX OF TATA STEEL
Marketing is the process by which a product or service originates and is then priced, promoted,
and distributed to consumers. The principal marketing functions involve market research and
product development, design, and testing. It is the business activity of presenting products or
services in such a way as to make them desirable. One has to consider promotion that is
balanced with a suitable product available at a reasonable price, provided at all places to
maximize the sale of one’s product.
MARKETING MIX
PRODUCT PRICE PROMOTION PLACE
Brand Pricing Strategy Personal Selling Channels of
Distributions
Packaging Pricing & Quality Advertising Physical Distribution
Innovations Price & Alterations Public Relations Wholesaler & Retailers
Quality Discounts
1. PRODUCT (Brand, Packaging, Innovations, Quality) :
a. Brand: Advertising is often used to make consumers aware of a product’s special
low price or its benefits. But an even more important function of advertising is to
create an image that consumers associate with a product, known as the brand image.
The brand image goes far beyond the functional characteristics of the product. The
products of Tata Motors have many special characteristics to them, but when
consumers think of it, they not only think of its features, but they may also associate
it with quality, performance, and class. All of these meanings have been added to

the product by advertising. Consumers frequently buy the product not only for its
functional characteristics but also because they want to be identified with the image
associated with the brand. Tata Motors have been successful in creating and
maintaining a professional brand image.
b. Packaging: A vehicle cannot have a material packaging. Here, packaging refers to
and effective assembly of features. Tata Motors provide many innovative features
to suit the target customers and the product. E.g. Tata Safari Dicor has ‘Reverse
Guide System’ which includes a weather-proof camera to help the driver while
reversing the vehicle.
c. Innovations: The various motives behind buying an automobile are Need, Prestige,
Comfort, Fashion, Jealousy and Novelty. The R & D Department continuously
strives to bring new innovations in their product. Tatas have an industrial experience
of over 100 years and they are well known with the Psychology of Indian customers,
who desire more at less price. This experience has helped them to develop products
which fulfill the expectations of Indian consumers.
d. Quality Control: Tata Motors have their Quality Control standards and the QC
Dept. ensures that the customer does not face any inconveniences of a defective
product.
2. PRICE (Pricing Strategy, Alterations, Discounts)
a. Pricing Strategy: The prices are fixed keeping in mind a number of factors. As told
by Mr. Desai, prices have to be at par with the prices of the competitors. Tata Motors
give a relative price advantage as compares to its competitors. The various
Determinants of price are:
i. Market Condition
ii. Costs incurred
iii. Profit percentage desired by the Co.
iv. Dealer Profit
b. Alterations: The Company does not allow any alterations to any of the features of the
product. If there is an alteration which affects the performance of the engine, then the warranty
becomes void. However, there may be alterations in the accessories, if desired by the customer.

c. Discounts: Discounts are decided by the Co. every month. Any further discounts made from
the profits of the dealer. However, the Co. may compensate the dealer for the discounts allowed
to a certain extent.
3. PROMOTION (Personal Selling, Advertising, Sales Promotion, Public Relations)
a. Personal Selling: There is minimal personal selling involved. The Sales Officers at the
dealerships collect prospective customer databases and perform cold calling to attract
customers.
b. Advertising: Advertising is a form of commercial mass communication designed to
promote the sale of a product or service. Tata Motors is responsible for the advertising of its
products. The dealer does play any role in the advertising. The various media used for
advertising are T.V., Newspapers, Magazines, Hoardings, and Internet etc. The dealer conducts
point-of-purchase displays to advertise the products. The advertisements done by the Co. help
the dealer to capitalize on the market.
c. Sales Promotion: The purpose of sales promotion is to supplement and coordinate
advertising and personal selling; Sales promotions are designed to persuade consumers to
purchase immediately by providing special incentives such as cash rebates, prizes, extra
product, or gifts. The Co. conducts intensive sales promotion during festivals such as festive
discounts during Diwali.
d. Public Relations : Public Relations is a management function that creates, develops, and
carries out policies and programs to influence public opinion or public reaction about an idea,
a product, or an organization. The Co. takes serious measures to maintain good public relations.
The Co. follows business ethics to ensure that the customer is satisfied and receives good
service whenever and wherever he desires.
4. PLACE (Channels of Distribution, Physical Distribution)
a. Channels of Distribution: In case of vehicles, dealership method of distribution and sales
is generally adopted. Tata Motors have also adopted dealership method of distribution of its
products. The dealers purchase products from the Co. at a negotiated price. The MRP is
fixed by the Co. and the dealer gets a profit within these prices. As the Co. deals in
commercial and passenger vehicles, there may be a single or distinct dealerships to market
its commercial and passenger vehicles in a town. However, if there is a single dealership
appointed, then the commercial and passenger vehicles are managed under Commercial
Vehicles Dept. and Passenger Vehicles Dept. respectively. Tata Motors have contracts with

the Government of India and it supplies buses and passenger vehicles, in some cases, to the
Govt. Sometimes, bulk quantities of vehicles are ordered by a Govt. Dept. or a private
company. The sales, distribution and billing of these are looked after by the Co. itself.
b. Physical Distribution: The commercial vehicles are manufactured at Jamshedpur,
Lucknow and Pantnagar whereas the passenger vehicles are manufactured at Pune plant.
From the plant, the finished product is transported to the dealerships. The nation-wide
dealership, sales, services and spare parts network comprises over 2,000 touch points. The
dealerships are strategically located in the target and potential markets to ensure efficient
and timely availability of its products in the market.
2.3.4 MARKET SHARE COMPETITION
Table 2.1
Name Last Price Market Cap.
(Rs. cr.)
Sales
Turnover
Net Profit Total Assets
Tata Steel 296.30 28,777.11 41,785.00 6,439.12 87,274.77
SAIL 60.10 24,824.49 45,710.78 2,092.68 66,933.05
JSW Steel 871.45 21,064.87 46,087.32 2,166.48 49,259.16
Visa Steel 16.55 182.05 922.16 -241.44 2,690.73
Manaksia Steels 1.00 6.55 - - -
2.4 Customers of Tata Steelltd
Domestic customers
 Tinplate Company of India Lt
 MECON Ltd

 Usha Martin Limited
 Salem Steel
 Concast
2.5Competitors of Tata Steel
1. SAIL (STEEL AUTHORITY OF INDIA LIMITED)
2. JSW STEEL LTD
3. VISA STEEL LTD
4. ESSAR STEEL LTD
5. ELESCTRO STEEL STEELS LTD
6. OCL IRON AND STEEL LTD
7. TECHNO CRAFT INDUSTRIES LTD
8. GALLANTISPAT LTD
9. STEEL EXCHANGE INDIA LTD
10.ARCELOR MITTAL

2.6 Technology
TISCO rolls steel power with SAP technology SAP enables seamless remodeling of Tata
Steel from product-driven to a customer-driven enterprise of the Internet economy
"Implementing any ERP system is a challenge for an organization because of the declining
success rate of ERP implementations world-wide. The challenge is compounded if the ERP
provider is a world leader - SAP"
"Post theintroduction of the SAPsolution, the results have been terrific. The company has spent
close to Rs 40 crore on SAP implementation, and has already saved Rs 33 crore"
Choosing the platform and technology
The management at Tata Steel wanted the software to seamlessly integrate with its existing
information system and further provide compatibility with its future implementations. After
anin-depth study of functionality, cost, time, compatibility, esteem, operability, support and
future organizational requirements was done, SAP topped the list of contenders.
The implementation of SAP software was associated with certain strategic goals in mind. With
this implementation, TISCO wanted to bring forth a culture of continuous learning and change.
This would enable TISCO to achieve a world-class status for its products and services and
strengthen its leadership position in the industry. Besides this, TISCO also wanted the software
to result in quick decision-making, transparency and credibility of data and improve
responsiveness to customers across all areas.
Achieving Business Agility through SAP
Marching ahead, Web enabling of SAP R/3 is on the cards. On the surface, it means it would
allow anyone to access our SAP R/3 over the Internet. But beneath it, the implications are
tremendous, as it would result in sharing of information with enterprise accounts and key
customers. The success in Marketing and Sales has prompted a re-visit of the existing system in
the works and a detailed rollout is expected as below.
 Phase I - To Extend SAP in Works with FI, CO, MM, PP & QM

 Phase II - To implement SAP modules such as Asset Management & Budget
management sub-modules of FICO, Plant maintenance, Human Resources, Production
Optimizer (such as SAP APO)
 Phase III - SEM (Strategic Enterprise Management)
The company also plans to adopt the mySAP Customer Relationship Management solution to
enhance its customer relationships in the near term and eventually realize its dream of a
becoming the most efficient and competitive company in the world in its vertical
2.7 HUMAN RESOURCE
2.7.1 SENIOR MANAGEMENT AS OF MAY 25, 2011
 Mr. Cyrus P Mistry
Chairman, Not – independent, non -executive
 H. M Renrurkar
Managing director
 Dr Karl Ulrich Koehler
Managing director and chief executive officer.
 Koushik Chatterjee
Group Chief Financial Officer.
 Anand Sen
Vice president (TQM and Shared Service) TSL
 Theo Henrar
Director (sales and marketing) TSL
2.7.2 Departmentand functions
Functions performed by the division and the reports provided to the top management includes:
✓ Monthly Profit Statement
✓ Monthly, Quarterly & Annual Reports
✓ Decision Support System
✓ Payment of Wages, Salaries and other due to employees
✓ Various analysis
✓ Payment to vendors

Group and Sections of Finance & Accounts Department
The whole section of finance in Jamshedpur division of TATA STEEL is divided into five sub
sections:
• CASH OFFICE
• FINANCE AND COST
• PAYROLL ACCOUNTS
• PURCHASE AND CAPITAL GROUP
• SALES AND INDIRECT TAXATION
Debtors are dealt by sales and Indirect Taxation group. Everything related to debtors is termed
as sundry debtors work.
Sales and Indirect Group is responsible for activities such as:
• FREIGHT-OUTWARD AND INWARD - ROAD AND RAIL
• INVOICE
Indirect Taxation matters - Excise and sales tax. It is also related to the post sales. Activities
like debtors and Town Accounting. It comprises of the following section:
• EXCISE SECTION
• FREIGHT SECTION
• TOWN DEBTORS SECTION
• SUNDRY DEBTORS SECTION
Market sector
✓ AUTOMOTIVE
✓ CONSTRUCTION
✓ CONSUMER GOODS
✓ ENGINEERING
✓ PACKAGING
✓ LIFTING AND EXCAVATION
✓ ENERGY AND POWER
✓ AEROSPACE
✓ SHIPBUILDING

✓ RAIL
✓ DEFENCE AND SECURITY
2.7.3 Staffstrength
NUMBER OF EMPLOYEES (80931 AS ON 31ST MARCH)
2.7.4 Recruitment
Through 2008-2009, the Tata Steel Group has continued to demonstrate that the recruitment of
the best of talent and the engagement of its employees is an asset through both high and low
demand cycles in the industry.
The Tata Steel Management Trainee Programme and the Corus Graduate Programme continue
to attract and offer exciting career options to young engineers who are from amongst the best
colleges of the country. The Group has continued the recruitment of apprentices, graduates and
targeted external middle and senior management staff to meet the current need and prepare the
bench strength for future operations.
2.7.5 Training and Development
The Group has continued to invest in and improve its managerial and technical capabilities
through the internal development of its own employees across Europe, India and South East
Asia
To bridge functional skill gaps and to identify candidates for focused learning in line with the
current and future needs of Tata Steel, a scheme called ‘Directed Learning Initiatives’ was
introduced in Tata Steel. The emphasis was to create a pool of experts in different technical
areas. Apart from creating specialists, the policy also focusses on managerial learning which
consists of modular programmes with tie-ups with various management institutes.
With a view to augment the technical capabilities of the employees, a pilot programme in line
with the Technical Competency Assessment System was introduced in Tata Steel. Based on
the results, the learnings from the programme will be introduced to the rest of the organisation.
The Performance Improvement Committee has continued to focus on improving both
knowledge management and the adoption of best practices across the Tata Steel Group. This

has benefitted TSE alongside the other operations of Tata Steel, NatSteel and Tata Steel
Thailand.
During the year, a greater focus was assigned to the ‘On-the-Job Learning’ for executives. This
is being offered through cross functional assignment/taskforce, role enhancement/enrichment
and improvement Initiatives. The executives were also encouraged to undertake special
projects arising from their work assignments which had focused measures and deliverables.
2.7.6 Appraisal and Retention practices
It is a fundamental principal of the Tata Steel Group that all the employees across the globe are
compensated fairly. Last year, like the previous years, compensation was based on market
benchmarking to ensure that Tata Steel remains an attractive and competitive employer in the
market place. Throughout the year, greater synergy was established between TSE, Tata Steel
India and the South East Asian operations. This included secondment of employees across
geographies. The Performance Improvement Committee has improved both the Knowledge
Management and the Adoption of Best Practices Initiatives across the Tata Steel Group and
this has benefitted TSE alongside the other operations of Tata Steel.
2.7.7 Measurement metrics.
As part of the global talent management initiatives, the year saw a greater movement of
executives between Tata Steel India, Tata Steel Europe, NatSteel and Tata Steel Thailand to
enable the cross pollination of ideas and practices and also provide executives with a global
Experience. The Management Trainee Programme has been re-designed to include special
modules of six months each in the areas of TQM, engineering and projects, and safety. This
will help the fresh graduate engineers prepare in a better way, for future assignments
2.8 Operations
2.8.1 Functions and Processes
Designand Automation- Over a period of time Automation has evolved from ‘modifications,
enhancements and up gradation to focusing on providing ‘Solution Design, Product
Development and Product Life Cycle management’. Globally, Tata Steel production is
controlled and monitored through highly automated, computer-based systems. Such processes
include automatic sequencing of equipment, material detection and tracking, strip rolling,
furnaces, boilers, material coating, water cooling and many more. All these processes are

Measured by on-line instrumentation, and controlled through advanced industrial computers
which themselves are networked to operator screens, databases, and setup models and data
analysis software.
Process Control & Automation (PC&A) engineers use their knowledge of software, application
computers, and control and instrumentation technology to maintain optimum performance of
plants. A highly accomplished team of specialist engineers, software experts, and professionals
in various disciplines (laser, robotics, instrumentation, mathematical modelling and simulation)
is involved in producing designs and engineering drawings for all aspects of planning,
manufacturing, civil, structural and electrical or mechanical engineering projects. The PC&A
Engineers specialize in monitoring, maintaining and developing equipment to its optimum
performance and reliability to meet customer and business requirements.
The Automation Division of Tata Steel in India is the central agency for design, development,
integration and implementation of Process Automation for the Company’s Indian operations
and is also an international supplier of high level automation for the metal industry. It is situated
in the premises of the steel plant at Jamshedpur in its highly advanced Automation
Development Center and also in various plant sites developing and implementing process automation
systems.
Research and Development-The Group's advanced Research and Development centers give it the
competitive edge to meet emerging challenges and ensure that the Company always stays on the path
of innovation. Tata Steel combines dedicated customer service with world-class research facilities to
develop and deliver high quality steel products that add value to the customer‘s business. The Group’s
research programme comprises programs funded by the separate business units and work on a number
of identified thrust areas that receive corporate funding. The thrust areas also incorporate the projects
that were previously a part of the strategic programme of Tata Steelin Europe. Currently, the Tata Steel
Group has five research centres with over 1000 people involving themselves in R&D activities.
Jamshedpur R&D Centre (India): The Jamshedpur R&D Centre in India was established in
1937 and is one of the oldest industrial R&D centres in the country. Since its inception, this
Centre has played a pivotal role in the development of steel products and process routes that
have given the Company a competitive advantage in local and global markets.
Consulting Services- Tata Steel Europe's business services include providing expertise and
knowledge in a wide range of iron, steel and metals related matter that cover the entire steel

value chain. Tata Steel Consulting also warrants technology developed for Tata Steel's internal
production facilities and processes. Business planning assistance is provided to a range of
industrial sectors, operating independently or along with other groups within the consulting
business and sometimes in alliance with external bodies.
2.9 Finance:
2.9.1 Capital structure
2.9.2 Financial Ratios ofTata Steel:
Table 2.2
Particular 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
Current Assets 10379.2 18162.5 12,819.57 11,504.85 11564.6
Current Liabilities 8999.61 11144.9 16,838.49 16,488.65 18,881.78
Net Working Capital 1379.59 7017.6 -4018.92 -4983.8 -7317.18
Current Ratio 1.15 1.63 0.76 0.70 0.61
Capital Structure (Tata Steel)
Period Instrument Authorized
Capital
Issued Capital - P A I D U P -
From To (Rs. cr) (Rs. cr) Shares (nos) Face Value Capital
2013 2014 Equity Share 2100 972.13 971215405 10 971.22
2012 2013 Equity Share 2100 972.13 971215229 10 971.22
2011 2012 Equity Share 2100 972.13 971214450 10 971.21
2010 2011 Equity Share 2100 960.13 959214450 10 959.21
2009 2010 Equity Share 1750 888.13 887214196 10 887.21
2008 2009 Equity Share 1750 731.37 730592471 10 730.59

2.9.3 Performance Metrics
Table 2.3
RATIO 2013 2009
(CPM %) 15.84 23.00
COMPONENTS 2013 2009
SALES (in Rs .Crore) 42317.24 26843.53
PAT plus Depreciation 6705.23 6175.14
Source: Moneycontrol.com
Interpretation:
We see a decline in the ratio from 2009 to 2013 indicating a decline in the company’s
operating performance. This is again due to the decline in company’s ability to generate
cash/profit from its sales.
FIGURE 2.1
2.9.4. Balance sheet as at 31st march 2014

Rs. crores
Note Page As at
31.03.2013
EQUITY AND LIABILITIES
(1) Shareholders'Funds
2 146 (a) Share capital 971.41 971.41
3 148 (b) Reserves and surplus 60,176.58 54,238.27
4 150 (2) Hybrid PerpetualSecurities 61,147.99 55,209.68
(3) Non-current Liabilities 2,275.00 2,275.00
5 150 (a) Long-term borrowings 23,808.09 23,565.57
6 152 (b) Deferred tax liabilities (net) 2,038.98 1,843.74
7 152 (c) Other long-term liabilities 983.52 380.87
8 153 (d) Long-term provisions 1,905.05 2,113.42
28,735.64 27,903.60
(4) Current Liabilities
5 150 (a) Short-term borrowings 43.69 70.94
9 153 (b) Trade payables 8,263.61 6,363.66
10 153 (c) Other current liabilities 8,671.67 8,509.79
8 153 (d) Short-term provisions 1,902.81 1,544.26
18,881.78 16,488.65
ASSETS 1,11,040.41 1,01,876.93
(5) Non -current Assets
(a) Fixed assets
11 154 (i) Tangible assets 24,064.43 24,650.54
12 155 (ii) Intangible assets 201.32 224.51
(iii) Capital work-in-progress 18,509.40 8,722.29
42,775.15 33,597.34
13 156 (b) Non-current investments 52,318.56 49,984.80
14 161 (c) Long-term loans and advances 4,080.07 6,574.15
15 162 (d) Other non-current assets 302.03 215.79
99,475.81 90,372.08
(6) Current Assets
16 162 (a) Current investments 2,343.24 434.00
17 163 (b) Inventories 6,007.81 5,257.94
18 163 (c) Trade receivables 770.81 796.92
19 163 (d) Cash and bank balances 961.16 2,192.36
14 161 (e) Short-term loans and advances 1,299.20 2,207.83
20 164 (f) Other current assets 182.38 615.80
11,564.60 11,504.85
1,11,040.41 1,01,876.93
1-49 144 Notes to Balance Sheet and Statement of Profit
and Loss

2.10 ORGANISATIONALHIERA
Mr.CyrusPMistry
Chairman, Not- independent, Non-Executive Director
Mr. Cyrus P. Mistry is the Chairman of Tata Sons. He is a graduate of Civil Engineering from
Imperial College, UK, and has a M.Sc. in Management from London Business School.
Mr.SubodhBhargava
Independent, Non - Executive Director

Mr. Subodh Bhargava is a Mechanical Engineer from the University of Roorkee. He was the
Group Chairman and Chief Executive Officer and on the Board of Eicher Group of Companies.
He is now the Chairman Emeritus of the same group. He is on the Board of Tata Steel Limited
since 2006.
Mr.O.P.Bhatt
Independent, Non-Executive Director
Mr. O. P. Bhatt is a graduate in Science and a post graduate in English Literature (Gold
Medalist). In his last assignment, from July 1, 2006 to March 31, 2011, he was the Chairman,
State Bank Group, which includes State Bank of India, India’s largest commercial bank; five
associate banks in India; five overseas banks; SBI Life, the country’s largest private life insurer;
SBI Capital Markets, India’s leading investment bank; SBI Fund Management; and other
subsidiaries spanning diverse activities
Mr.T.V.Narendran
Managing Director - Tata Steel India and South East Asia
Mr. T.V. Narendran is a Mechanical Engineer from REC (NIT), Trichy. He joined Tata Steel
after completing his MBA from IIM Calcutta in 1988. He is a Chevening Scholar and has also
attended the Advanced Management Programme in CEDEP - INSEAD, Fontainebleau, France.
He became the Managing Director of Tata Steel India and South East Asia on November 1,
2013

2.11 SWOT ANALYSIS OF TATA STEEL
SWOT ANALYSIS
Strength
1. Raises over 14 million tonnes of ores from its
captive collieries, iron ore mines and quarries
2. Adaptability of company in the fast changing
environment
3. Excellent integration with Corus which has more
than 2000 metallurgists
4. Control over raw materials
5. Economies of scale
6. Strong backing of Tata brand name
7. Operations in 26 countries and a commercial
presence in over 50 countries
Weakness 1. Operational efficiency are not as good as
international leaders

2. Slightly lagging in technological front
Opportunity
1. Newer technologies- The Corex process, The
Hismelt process, Direct iron ore smelting
2. Public private partnership
3. Acquisition of coal blocks in Asia, Africa etc.
Threats
1. Rising coking coal prices
2. India is plagued with violent agitation against land
acquisition
3. Government & regulatory norms
4. International competition
CHAPTER III
Task Accomplished during training
3.1 Roles and Responsibility
3.1.1 Role Description
The role which we were given is to assist the staff member of Tata Steel in Financial
Transaction department in managing the day to day activity and learn about the working capital
management and its practical approach and how important and key factor it is for the
organization to properly maintain the current asset and current liability of the organization. We
also have to learn practical scenario and get the exposure for the holistic market.
From the above we had to work in a team so as to study the positive approach towards the task
assigned and handle it properly with a single aim.
3.1.2 Responsibility assigned

The basic responsibility which we played in the organization was to know the meaning and
uses of Working capital management in an organization and study the balance sheet of the
company and compare it with the major competitor of the organization where we have to find
out the basic indicator such as ratio analysis, cash flow, trend analysis etc of the organization
as well as other major player in the market to compare and analyze the current situation of the
company and scope for betterment.
The Responsibility which we have been assigned was for
1. Detailed study of balance sheet
2. Finding the current position of the company by deriving data from different sources such
as internal source provided by the company and external source such as internet, websites,
surveys done by others etc.
3. Taking out the different Ratio’s to know exactly the current position of the company.
4. Fetching out the ratio from balance sheet of other competitors for comparison.
5. Comparing the data found from the from the above and finding the exact loop holes and
strong points of the company and the current position it holds.
6. Risk associated with the analyzed data from the standard benchmark of Ratio’s.
7. Suggestion to improve the position of the organisation and also help improve the
profitability.
3.2 Description of the task handled
It has already been mentioned above that we have worked out for knowing the working capital
management and its practical uses for which we have to segregate and study the balance sheet
and find out its elements which can be worked out for different analysis.
On day to day basis we have
1. Assisted the staff member in financial and transaction department in daily entry and daily
logistic and stock handling of the organisation.
2. Helped out and studied various law (Mercantile Law) related to financial section in logistic
and payment to the various vendor and customers of Tata Steel.

3. Helped in carrying out the smooth system for payment to the different customers and
different bills related to internal and external resources.
4. We have worked out for detailed study of balance sheet of the organisation in carrying out
the items for study the working capital management of the organisation.
5. How current asset and current liability should be managed properly by the company to
keep the things and financial position of the company in track.
6. Study various ratios of the company in regarding to the working capital management.
7. Study various ratios of other companies / competitors in comparison with the ratios of Tata
Steel.
8. Focused on the footfalls of Tata Steel based on the different analysis.
9. Given suggestion accordingly which was submitted for the rectification on the current
position which is not unto the standard as will appear in the next chapter of the project.
3.3 Contribution to the Organisation
Tata Steel is a big organization and being associated with it was a privilege. There is a dedicated
team in finance department for handling each and everything related to the the risk associated
with Working capital Management, Market discipline, operational risk, etc. We also took out
the ratio analysis and compared it with the other major companies/competitors. Which has been
submitted to our guide Mr. Rahul Sharma, who appreciated the dedication and promised us to
get this issues reach at the top management to get rectified. In the light of above what we
contributed for the organization are:
1. Finding of our project which will be used to know the current scenario of the company and
current position of the company.
2. Suggestion on the problem raised in the finding.
3. Day to day activity work as a employee to the organization for smooth process of work.
4. Contributed in the marketing activity held during the period of internship.

5. Contributed being the volunteer in CSR activity of the company. (Plantation and Lungar
for beggars and poors)
CHAPTER IV
ANALYSIS OF THE RESEARCH
4.1 Introduction – Conceptual introduction to the researchtopic
Comparative ratio analysis and working capital management of TATA STEEL LTD with Sail
and Jindal.
4.1.1 Working capital
Fixed Capital: Long term funds required for purchase of fixed assets such as P&M, Land,
Building, Furniture etc. Investments in such type of assets leads to blockage of a part of capital
and this is the reason it is called fixed capital.
Working Capital: These are referred to as short term funds which are necessary for tuning the
day to day business. It includes marketable securities, debtors & inventories and other current
assets.
WORKING Capital = Current Assets – Current Liabilities

Classification of Working Capital
 On the basis of time
 On the basis of concept
4.2 ResearchDesign
4.2.1 Statement of the problem
 To analyze the working capital and financial position of the company.
 Understanding the company’s balance sheet, ratios, cost sheet of the Tata Steel ltd and
comparative analysis between the Tata Steel, Sail and Jindal.
4.2.2 Objectives ofresearchproblem
 To study the concept and importance of working capital management.
 To study the methods and modes of analysis of working capital management.
 To analyze and interpret the existing situation of the working capital management.
 To compare the position of TATA STEEL LTD with the major steel players of the
world.
 To appreciate the areas of achievement and analyze the areas of weakness.
4.2.3 SCOPE OF THE STUDY
The whole project has been made by collecting data through secondary sources. Primary source
stands for that information i.e. collected by direct queries to concern.
 To carry out a critical analysis of TATA STEEL LTD. Working capital.
 To find out the area of the weakness the existing Tata Steel working capital.
 To extrapolate the company’s position with the steel industry.
4.2.4 Methodology
The project is based on descriptive research. The project deals with working capital of Tata
Steel and there has been a lot of research already been done on the topic. I have tried to
understand the functioning of working capital and its impact on the company. The research
also includes comparison between Tata Steel companies and which one of these is better in
its operations with research to working capital.
4.2.4.1 TOOLS AND TECHNIQUES FOR COLLECTION OF DATA:
Data collection method can be broadly classified into:
 Secondary Data

Data collected from primary methods or which is the first hand information is known as
primary data. Data collected from secondary methods or which is already available, second
hand data is known as secondary data
SECONDARY SOURCE OF DATA
 Annual report
 Study of files and other documents.
 Different records by the accounts and bill section.
 Web sites of Tata Steel Ltd.
 Web sites of SEBI, other Steel companies.
 Review of previous reports related to the topic.
 Study about the topic ‘Working Capital’ from books.
Secondary Data’s were collected by using company website, SEBI website, newsletters,
TMDC library, Annual report and books.
In this I have used secondary data most of which was obtained from internal records of the
company. Usage of secondary data enjoys some advantages but it suffers some limitations.
4.2.4.2 ANALYSIS AND INTERPRETATION
Detailed Analysis of working capital of Tata Steel and other companies have been done.
Along with the interpretation of the calculated Data have also been done. Interpretation of all
the ratios calculated related to working capital has been stated in the project. Relationship
between Net Working Capital has been interpreted.
4.2.4.3 LIMITATIONS
 The biggest limitation with respect to the topic was that the internship is based on
secondary data.
 The study is limitation to the scope of data provided publically.
 The terms of credit policies have not been revealed due to the company rule and
regulations.
 As only secondary data is used in this project, it was difficult to determine the accuracy
of the data.
 Some amount of data was updated and was not of match use.

4.3 DATA ANALYSIS AND INTERPRETATION
Table 4.1
TATA STEEL - COST SHEET
Particulars 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
Raw Material Consumed 5494.74 6244.01 8014.37 9877.4 9678
Wages 2361.48 2837.46 3047.26 3608.52 3673
Prime Cost(A) 7856 9081 11062 13486 13351
Manufacturing Overhead
Conversion Charges 1132.79 1192.89 1513.97 1955.19 2004
Fuel oil consumed 115.16 153.63 186.44 189.06 207.7
repairs to building 29.84 39.84 61.08 85.42 74.46
Factory rent 15.54 16.76 30.88 33.63 46.04
relining exp 32.45 30.89 28.87 38.49 44.6
purchase of power 1268.28 1404.86 1803.72 2321.11 2564.61
Insurance 24.63 31.76 36.48 41.77 44.06
Freight and handling 1357.27 1540.84 1703.98 2260.76 2755.08
Repairs to machinery 978.93 1064.26 1162.95 1381.08 1733.92
Consumption of stores and
spares 1335.36 1417.26 1693.48 2090.89 2611.23
Depreciation and Amortization 1083.18 1146.19 1151.44 1640.38 1928.7
Manufacturing Cost 7373.43 8039.18 9373.29 12037.78 14014.4
Opening stock of WIP 73.17 158.65 81.19 53.83 65.88
Less: Closing stock of WIP 158.65 81.19 53.83 65.88 35.99
Total Manufacturing Cost 7287.95 8116.64 9400.65 12025.73 14044.29
Administration overhead:
Rates & Taxes 236.91 290.73 371.71 423.18 508.61
Royalties 275.72 615.01 912.43 1152.43 1129.8
Excise duty 81.13 88.8 94.95 134.94 2345.78
other expenses 1284.55 1270 2098.84 2150.86 2345.78

Less: Transfer to Cap Exp A/C 326.11 198.78 478.23 876.13 1029.92
Administration Cost 1552.2 2065.76 2999.7 2985.28 5300.05
Cost of Production 16696 19264 23462 28497 32695
purchase of semi-Finished
goods 169.08 180.2 209.52 453.34 353
Opening Stock of finished
goods 1361.85 1414.4 1392.51 1639.83 2032.34
Less: Closing stock of finished
goods 1141.4 1392.51 1639.83 2032.34 2216.14
Cost of Good Sold 17085.9 19465.96 23424.18 28557.76 32864.54
Commission/Discount/Rebate 82.17 109.36 128.42 142.67 163.98
Cost of Sales 17168.07 19575.32 23552.6 28700.43 33028.52
Profit 7853.91 9821.03 10380.86 9499 8682.48
Net Sales 25021.98 29396.35 33933.46 38199.43 41711
Calculation of Net Sales
Revenue from operation 26757.8 31902.14 37005.71 42317.24 46309.34
Less: Excise duty 1735.82 2505.79 3072.25 4118 4598.31
Net Sales 25021.98 29396.35 33933.46 38199.24 41711.03
Reconciliation Statement
Profit as per cost sheet 7853.91 9821.03 10380.86 9499 8682.48
Add: Other income 853.79 790.67 886.43 902.04 787.64
Less: Finance charge 1508.4 1300.49 1925.42 1877 1821
Provision of wealth tax 1 1.28 1.7 2 2
Provision of doubtful debts -16 8.23 5.41 11.15 60.53
Profit before Exceptional items
and Tax 7214.3 9301.7 9334.76 8510.89 7586.59
Exception Items:
Profit on sale of non current
investment 0 0 511.01 12.33 0
Provision for diminution in the
value of investment/doubtful 0 0 0 -686.86 -141.76
Less: Tax 2167.5 2436.01 2638.34 2761.06 1032.83
Profit After Tax 5046.8 6865.69 6696.42 5062.97 6412
Table 4.2
TATA STEEL-PROFIT AND LOSS STATEMENT
Particulars Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
Income
Sales Turnover 46,309.34 42,317.24 37,005.71 29,396.35 26,757.60
Excise Duty 4,598.31 4,117.81 3,072.25 0.00 1,816.95
Net Sales 41,711.03 38,199.43 33,933.46 29,396.35 24,940.65

Other Income 645.88 227.51 1,397.44 1,176.45 1,241.08
Stock Adjustments 155.18 404.60 220.72 173.65 -134.97
Total Income 42,512.09 38,831.54 35,551.62 30,746.45 26,046.76
Expenditure
Raw Materials 12,641.57 12,421.63 9,917.37 7,841.47 8,356.45
Power & Fuel Cost 2,772.31 2,510.17 1,990.16 1,558.49 1,383.44
Employee Cost 3,673.08 3,608.52 3,047.26 2,837.46 2,361.48
Other Manufacturing Expenses 0.00 0.00 0.00 0.00 2,419.89
Selling and Admin Expenses 0.00 0.00 0.00 0.00 417.90
Miscellaneous Expenses 9,962.35 8,937.47 7,662.62 5,850.29 1,287.04
Preoperative Expenses Capitalized 0.00 0.00 0.00 0.00 -326.11
Total Expenses 29,049.31 27,477.79 22,617.41 18,087.71 15,900.09
Operating Profit 12,816.90 11,126.24 11,536.77 11,482.29 8,905.59
PBDIT 13,462.78 11,353.75 12,934.21 12,658.74 10,146.67
Interest 1,820.58 1,876.77 1,925.42 1,735.70 1,848.19
PBDT 11,642.20 9,476.98 11,008.79 10,923.04 8,298.48
Depreciation 1,928.70 1,640.38 1,151.44 1,146.19 1,083.18
Other Written Off 0.00 0.00 0.00 0.00 0.00
Profit Before Tax 9,713.50 7,836.60 9,857.35 9,776.85 7,215.30
Extra-ordinary items 0.00 0.00 0.00 0.00 0.00
PBT (Post Extra-ord Items) 9,713.50 7,836.60 9,857.35 9,776.85 7,215.30
Tax 3,301.31 2,773.63 3,160.93 2,911.16 2,168.50
Reported Net Profit 6,412.19 5,062.97 6,696.42 6,865.69 5,046.80
Total Value Addition 16,407.74 15,056.16 12,700.04 10,246.24 7,543.64
Preference Dividend 0.00 0.00 0.00 0.00 45.88
Equity Dividend 971.21 776.97 1,165.46 1,151.06 709.77
Corporate Dividend Tax 66.19 128.73 181.57 156.71 122.80
Per share data (annualized)
Shares in issue (lakhs) 9,712.15 9,712.15 9,712.14 9,592.14 8,872.14
Earnings Per Share (Rs) 66.02 52.13 68.95 71.58 56.37
Equity Dividend (%) 100.00 80.00 120.00 120.00 80.00
Book Value (Rs) 629.60 568.46 541.81 487.55 418.94
Sources Of Funds
Total Share Capital 971.41 971.41 971.41 959.41 887.41
Equity Share Capital 971.41 971.41 971.41 959.41 887.41
Share Application Money 0.00 0.00 0.00 178.20 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 60,176.58 54,238.27 51,649.95 45,807.02 36,281.34

Networth 61,147.99 55,209.68 52,621.36 46,944.63 37,168.75
Secured Loans 4,400.55 4,311.02 4,190.47 3,509.18 2,259.32
Unsecured Loans 21,726.23 21,600.49 19,503.35 22,639.00 22,979.88
Total Debt 26,126.78 25,911.51 23,693.82 26,148.18 25,239.20
Total Liabilities 87,274.77 81,121.19 76,315.18 73,092.81 62,407.95
Application Of Funds
Gross Block 39,019.72 38,056.28 23,081.58 22,497.83 22,306.07
Less: Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Less: Accum. Depreciation 14,753.97 13,181.23 11,715.32 10,692.73 10,143.63
Net Block 24,265.75 24,875.05 11,366.26 11,805.10 12,162.44
Capital Work in Progress 18,509.40 8,722.29 16,058.49 5,612.28 3,843.59
Investments 54,661.80 50,418.80 50,282.52 46,564.94 44,979.67
Inventories 6,007.81 5,257.94 4,858.99 3,953.76 3,077.75
Sundry Debtors 770.81 796.92 904.08 424.02 434.83
Cash and Bank Balance 961.16 2,218.11 3,946.99 4,138.78 500.30
Total Current Assets 7,739.78 8,272.97 9,710.06 8,516.56 4,012.88
Loans and Advances 5,863.68 9,587.82 8,773.73 17,052.84 6,678.55
Fixed Deposits 0.00 0.00 0.00 0.00 2,733.84
Total CA, Loans & Advances 13,603.46 17,860.79 18,483.79 25,569.40 13,425.27
Deferred Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 19,957.78 17,098.06 15,958.34 12,037.59 8,699.34
Provisions 3,807.86 3,657.68 3,917.54 4,421.32 3,303.68
Total CL & Provisions 23,765.64 20,755.74 19,875.88 16,458.91 12,003.02
Net Current Assets -10,162.8 -2,894.95 -1,392.09 9,110.49 1,422.25
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
( Source: Secondary Data)
Table 4.3
TATA STEEL NET WORKING CAPITAL
PARTICULAR 2009-10 2010-11 2011-12 2012-13 2013-14
CURRENT ASSETS
Sundry debtors 434.83 428.03 904.08 796.92 770.81
Inventories 3077.75 3953.76 4858.99 5257.94 6007.81
Cash & Bank balance 3234.14 4141.54 3946.99 2,192.36 961.16
Other Current assets 0 0 76.09 615.8 182.38
Short term loan and advances 5499.68 6458.94 1829.25 2207.83 1299.2
Current investment 0 0 1204.17 434 2343.24
TOTAL CURRENT ASSETS (A) 12246.4 14982.27 12819.57 11504.85 11564.6
CURRENT LIABILITIES
Provisions 2346.52 2220 2065 1545 1902.81
Other current liabilities 0 6263 8799 8504 8671.67
Subsidiary company 1515 0 0 0 0
Interest accrued but not due 677 0 0 0 0
Advances received from customers 335 0 0 0 0
Liability towards investors education 40.49 0 0 0 0

Sundry creditors 4086.65 4465 5974 6369.91 8263.61
Short term Borrowing 0 150 65.62 70.94 43.69
TOTAL CURRENT LIABILITES (B) 9000.66 13098 16903.62 16489.85 18881.78
NET WORKING CAPITAL (A - B) 3245.74 1884.27 -4084.05 -4985 -7317.18
Chart 4.1
Interpretation
The net working capitals of the company is negative since last 3 years this is due to reduction
in loans and advances which reduces the current asset of the company.
Before 2011 company had positive working capital due to high loans and advances which
increases the current asset of the company.
Negative working capital generally depicts bad liquidity position and reduces the credit
worthiness of the company but this is not held true in case of Tata Steel because the company
enjoys good reputation due to which credit worthiness of the company good.
STEEL AUTHORITY OF INDIA LIMITED (SAIL)
Table 4.4
COST SHEET OF SAIL
PARTICULAR 2009-10 2010-11 2011-12 2012-13 2013-14
Raw material consumed 17340.18 22076.4 23020.82 21198.48 19271.76
Direct wages 5416.81 7623.33 7932.05 8637.2 9578.66
-10000
-5000
0
5000
10000
15000
20000
25000
2009-10 2010-11 2011-12 2012-13 2013-14
NET WORKING CAPITAL
TOTAL CURRENT ASSETS
TOTAL CURRENT
LIABILITES
NET WORKING CAPITAL

PRIME COST 22756.99 29699.73 30952.87 29835.68 28850.42
Factory Overhead:
Depreciation and Amortisaton expenses 1337.24 1485.8 1567.03 1402.98 1716.09
Consumption of Stores & Spares parts 3163.43 3309.75 1779.07 2133.22 2340.03
Power and Fuel 3369.35 3597.04 4469.74 4830.44 4942.15
Repairs and Maintenance 569.74 670.04 744.31 824.46 931.53
Freight Outward 674.28 705.33 696.03 953.12 976.43
Handling Expenses of Raw material and
Scrap 313.78 387.86 381.45 362.39 476.64
Conversion Charges 287.66 330.98 339.67 328.76 277.65
Demurrage & Wharfage 65.59 51.79 61.84 55.99 93.72
Water Charges & Cess on Water Pollution 44.55 63.39 63.97 76.57 92.75
Insurance 4.74 7.14 8.08 16.31 17.06
Rent 19.5 17.67 12.65 13.84 24.77
FACTORY COST 32606.85 40326.52 41076.71 40833.76 40739.24
ADD: Opening stock of WIP 0 0 1490.51 2014.76 1966.97
LESS: Closing stock of WIP 0 0 2004.76 1960.82 2437.42
NET FACTORY COST 32606.85 40326.52 40562.46 40887.7 40268.79
Administrative Overhead
Royalty and Cess 261.01 580.44 851.3 976.63 916.51
Excise Duty on Inter-Plant Transfer/ Internal
Consumption 76.94 181.14 237.27 385.47 461.94
Postage, Telegram & Telephone 22.57 17.39 22.73 19.57 18.8
Printing & Stationery 11.37 10.76 10.57 10.54 9.77
Rates &Taxes 33.3 46.94 44.97 68.51 72.17
Security Expenses 236.87 226.44 283.83 321.48 356.05
Travelling Expenses 179.08 185.99 191.42 216.8 190.29
Training Expenses 16.19 17.71 19.67 26.36 39.55
Remuneration to Auditors 3.24 4.22 3.32 3.53 3.71
Cost Audit Fee and Reimbursement of
Expenses 0.02 0.12 0.3 0.14 0.15
Voluntary Retirement compensation 0.05 0 0 0.23 0.01
Handling Expenses - finished goods 80 85.98 100.34 122.68 125.79
Miscellaneous 531.12 535.8 252.81 289.79 415.82
Directors' Fees 0.19 0.22 0.37 0 0
COST OF PRODUCTION 34058.8 42219.67 42581.36 43329.43 42879.35
ADD: Purchase of Stock in Trade 2.79 4.22 4.88 3.21 0.78
LESS: Excise Duty on accretion (-)/Depletion to
stock -3.56 -119.02 -145.86 -274.81 71.2
ADD: Opening stock of finished goods 5817.84 4660.39 4641.57 5641.69 5294
LESS: Closing stock of finished goods 4660.39 6132.08 5641.69 7976.53 6534.1

COST OF GOODS SOLD 35222.6 40871.22 41731.98 41272.61 41568.83
Selling & Distribution Overhead
Cash Discount (Net) 39.23 40.69 48.89 64.81 75.28
Commission to Selling Agents 6.7 6.92 6.39 7.59 7.6
Export Sales Expenses 12.13 14.26 24.34 18.37 25.36
COST OF SALES 35280.66 40933.09 41811.6 41363.38 41677.07
Profit 5270.72 1785.62 4530.19 3265.32 5021.34
Net Sales 40551.38 42718.71 46341.79 44628.7 46698.41
Reconciliation Statement:
Particulars 2009-10 2010-11 2011-12 2012-13 2013-14
Profit as per cost sheet 5270.72 1785.62 4530.19 3265.32 5021.34
ADD: Other Income 2768.23 2199.96 1622.98 964.44
LESS: Finance Costs 402.01 474.95 677.7 747.66 967.64
LESS: Provisions 71.07 48.83 51.01 53.31 198.46
LESS: Write - Offs- Miscellaneous 10.33 1.12 1.03 0.34 7.71
LESS: Foreign Exchange Fluctuation 0 0 0 0 0
ADD/LESS(-): Adjustments pertaining to
Earlier Years 23.22 103.7 -10.54 41.53 150.08
ADD: Inter Account Adjustments 2553.27 3629.93 0 0 0
Profit Before Tax and Exceptional Items 10132.03 7194.31 5412.89 3469.98 2265.43
LESS: Exceptional Items 262.02 229.32 959.12
LESS: Tax 3377.66 2289.57 1608.15 1070.31 608.07
Profit After Tax 6754.37 4904.74 3542.72 2170.35 2616.48
Table 4.5
PROFIT AND LOSS ACCOUNT OF SAIL
Income
Sales Turnover 52,375.70 44,598.26 46,341.79 47,156.25 44,059.72
Excise Duty 5,677.29 0.00 0.00 4,621.95 3,463.82
Net Sales 46,698.41 44,598.26 46,341.79 42,534.30 40,595.90
Other Income 1,840.53 735.12 1,500.13 2,038.97 2,557.00
Stock Adjustments -894.63 2,016.09 1,368.51 1,471.69 -1,157.45
Total Income 47,644.31 47,349.47 49,210.43 46,044.96 41,995.45

Expenditure
Raw Materials 21,611.97 23,334.91 24,804.77 22,642.47 18,611.12
Power & Fuel Cost 4,942.15 4,830.44 4,469.74 3,586.07 3,364.30
Employee Cost 9,578.51 8,637.20 7,932.05 7,530.24 5,417.00
Other Manufacturing Expenses 0.00 0.00 0.00 1,310.00 870.35
Selling and Admin Expenses 0.00 0.00 0.00 1,927.46 1,754.02
Miscellaneous Expenses 5,752.88 5,197.15 4,458.56 45.42 206.62
Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00
Total Expenses 41,885.51 41,999.70 41,665.12 37,041.66 30,223.41
PBDIT 5,758.80 5,349.77 7,545.31 9,003.30 11,772.04
Interest 967.64 747.66 677.70 474.61 402.01
PBDT 4,791.16 4,602.11 6,867.61 8,528.69 11,370.03
Depreciation 1,716.69 1,402.98 1,567.03 1,482.20 1,337.24
Extra-ordinary items 150.08 41.53 -10.54 163.71 184.80
Tax 608.07 1,070.31 1,608.15 2,304.34 3,452.89
Equity Dividend 834.35 826.10 826.10 991.30 1,363.03
Per share data (annualised)
Shares in issue (lakhs) 41,305.25 41,305.25 41,305.25 41,304.01 41,304.01
Earning Per Share (Rs) 6.33 5.25 8.91 11.87 16.35
Equity Dividend (%) 20.20 20.00 20.00 24.00 33.00
Book Value (Rs) 103.30 99.32 96.38 89.75 80.66
(Source: Dion Global Solutions Limited)

Table 4.6
BALANCE SHEET OF SAIL
Sources Of Funds
Total Share Capital 4,130.53 4,130.53 4,130.53 4,130.40 4,130.40
Equity Share Capital 4,130.53 4,130.53 4,130.53 4,130.40 4,130.40
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 38,535.82 36,894.11 35,680.79 32,939.07 29,186.30
Net worth 42,666.35 41,024.64 39,811.32 37,069.47 33,316.70
Secured Loans 11,560.89 8,746.16 7,481.91 11,813.91 7,755.90
Unsecured Loans 12,705.81 12,754.41 8,615.30 8,351.58 8,755.35
Total Debt 24,266.70 21,500.57 16,097.21 20,165.49 16,511.25
Total Liabilities 66,933.05 62,525.21 55,908.53 57,234.96 49,827.95
Application Of Funds
Gross Block 53,874.36 42,461.10 41,367.19 38,260.60 35,382.49
Less: Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Less: Accum. Depreciation 27,103.71 25,683.70 24,239.81 23,180.54 21,780.91
Net Block 26,770.65 16,777.40 17,127.38 15,080.06 13,601.58
Capital Work in Progress 33,650.54 35,890.85 28,049.14 22,228.43 15,039.83
Investments 720.20 718.36 684.94 684.14 668.83
Inventories 15,200.82 16,008.21 13,742.37 11,302.79 9,027.46
Investments 720.20 718.36 684.94 684.14 668.83
Inventories 15,200.82 16,008.21 13,742.37 11,302.79 9,027.46
Sundry Debtors 5,481.98 4,424.18 4,761.32 4,161.30 3,493.90
Cash and Bank Balance 2,855.95 3,850.35 6,415.70 143.99 230.76
Total Current Assets 23,538.75 24,282.74 24,919.39 15,608.08 12,752.12

Loans and Advances 7,281.75 6,549.11 5,556.17 6,175.81 5,155.32
Fixed Deposits 0.00 0.00 0.00 17,334.87 22,205.61
Total CA, Loans & Advances 30,820.50 30,831.85 30,475.56 39,118.76 40,113.05
Deferred Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 19,105.61 14,976.39 14,606.26 13,994.33 13,383.67
Provisions 5,923.23 6,716.86 5,822.23 5,882.10 6,211.67
Total CL & Provisions 25,028.84 21,693.25 20,428.49 19,876.43 19,595.34
Net Current Assets 5,791.66 9,138.60 10,047.07 19,242.33 20,517.71
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Total Assets 66,933.05 62,525.21 55,908.53 57,234.96 49,827.95
Contingent Liabilities 35,228.85 31,283.83 31,836.92 30,519.80 28,382.46
Book Value (Rs) 103.30 99.32 96.38 89.75 80.66
(Source : Dion Global Solutions Limited)
Table 4.7
WORKING CAPITAL OF SAIL
Particulars 2009-10 2010-11 2011-12 2012-13 2013-14
CURRENT ASSETS
Inventories:
Raw Materials 2656.49 3065.56 3865.4 3531.03 3521.31
Finished & Semi finished goods 4660.39 6132.08 7646.45 9937.35 8971.52
Stores & Spares 1710.58 2105.15 2230.52 2539.83 2707.99
Trade Receivables: 3493.9 4130.27 4761.32 4424.18 5481.98
Cash &Bank balances:
Cash in hand 1.13 1.61 1.2 1.32 1.01
Cheques & draft on hand 196.7 107.78 243.71 243.91 194.59
Balances with bank 22238.5 552.68 134.39 32 19.31
Other bank balances 0 16818.02 6036.4 3589.67 2641.74
Other Current assets:
Interest receivable/accrued 765.63 482.25 57.9 49.14 44.73
Others 12.08 1901.76 2067.83 1814.96 2191.49
Gold coins on hand 2.63 0.4 0.4 0.26 0.26
Short term loan and advances 3416.09 1246.09 1385.77 988.73 1160.51
TOTAL CURRENT ASSETS
(A) 39154.12 36543.65 28431.29 27152.38 26936.44
CURRENT LIABILITIES
Trade payables:

Micro and Small Enterprises 15.27 24.8 12.08 13.86 21.44
Sundry Creditors- Subsidiary
Company 17.49 5.2 6.5 5.31 5.43
Sundry Creditors- Capital Works 2114.48 0 0 0 0
Others 4066.64 3156.54 3201.17 3302.87 3178.47
Short term provisions:
Provision for Employee
Benefits: 3245.9 583.27 381.36 390.39 335.34
Other Provisions:
Taxation 2.71 1.52 0.47 0 51.96
Pollution Control &
Peripheral Development 112.92 121.56 118.75 117.62 106.62
Exchange Fluctuation 16.43 17.2 3.18 8.17 0
Proposed Dividend 702.17 495.65 330.45 165.23 0
Tax on Dividend 116.62 80.43 53.65 28.08 0
Wage Revision 1243.22 871.1 1085.75 1472.3 1130.39
Mines Afforestation /
Overburden removal 625.49 437.44 250.93 237.25 262.59
Others 64.9 75.28 72.5 93.66 84.42
Gratuity 89.26 0 0 0 50.63
VRS 10.53 0 0 0 0
Others Current Liabilities: 4704.5 8308.46 8396.03 8654.7 12478.51
Short term borrowings: 0 10003.24 4510.55 8015.02 10634.48
TOTAL CURRENT
LIABILITIES (B) 17148.53 24181.69 18423.37 22504.46 28340.28
NET WORKING CAPITAL
( A-B ) 22005.59 12361.96 10007.92 4647.92 -1403.84

FIGURE 4.2
Interpretation:
The company has been able to maintain positive working capital since 2008-09 onwards till
2012-13 but it had a negative working capital in 2013-14. The company had best working
capital in the year2009-10 and although it reduced in the next years it remained positive till
2012-13. From the year 2008-09 the company has been improving its working capital but in
the year 2012-13 the working capital has gone down and gone negative in the year 2013-14
which should be a major concern for the company. But even in this situation the company has
tried not only to reduce its current assets but also to reduce its current liability which is again
a good sign.
-5000
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2009-10 2010-11 2011-12 2012-13 2013-14
NET WORKING CAPITAL
TOTAL CURRENT ASSETS (A)
TOTAL CURRENT LIABILITIES
(B)
NET WORKING CAPITAL ( A-B )

JINDAL STEEL & POWER LIMITED
Table 4.8
COST SHEET OF JINDAL STEEL
PARTICULAR 2009-10 2010-11 2011-12 2012-13 2013-14
Raw materials consumed 2225.71 2730.35 4529.84 4943.3 4265.71
Direct Wages 214.87 277.78 385.44 447.89 552.32
PRIME COST 2440.58 3008.13 4915.28 5391.19 4818.03
Manufacturing overhead
Depreciation 512.16 687.77 867.19 1048.46 1221.44
Goods purchasae for resale 179.63 176.8 0 0 0
Rent 6.84 7.88 12.27 8.34 9.17
Repairs and Maintenance 234.1 215.92 289.65 270.86 289.43
Conversion charges (Manufacturing
expenses) 152.31 214.67 259.66 693.58 752.41
Insurance 7.59 11.16 14.46 16.76 16.71
Power & fuel 391.8 568.47 838.37 939.38 926.75
Store & Spares Consumed 814.1 1135.45 1457.17 1698.66 1838.24
Manufacturing Cost 2298.53 3018.12 3738.77 4676.04 5054.15
ADD: Opening stock of WIP 61.37 119.72 165.58 179.03 192.93
LESS: Closing stock of WIP -119.72 -163.58 -179.03 -192.93 -94.35
Total manufacturing cost 2240.18 2974.26 3725.32 4662.14 5152.73
Administrative Overhead
Miscellaneous expense 241.56 313.23 419.05 438.61 343.21
Rates & Taxes 12.57 15.82 16.65 21.68 27.67
Research & Development 0 5.8 6.46 14.25 9.47
Loss arising from Business
investment 0 0 167.2 233.03 0
Royalty 85.51 119.7 172.96 185.34 156.83
Donation 55.5 73.96 87.98 41.66 52.26
loss on sale / discard of fixed assets 2.49 2.4 5.33 0.66 11.74
Directors sitting fees 0.07 0.06 0.08 0.18 0.18
Auditors remuneration 0.36 0.52 0.84 0.81 1.2
Administration Cost 398.06 531.49 876.55 936.22 602.56
COST OF PRODUCTION 5078.82 6513.88 9517.15 10989.55 10573.3
Purchase of stock in trade 0 0 452.75 286.58 273.31
Excise duty on account of change
in stock of finished goods 20.15 30.16 47.46 25.2 -40.31
ADD: Opening stock of finished
goods and scrap 570.32 560.9 879.06 1292.31 1451.81
LESS: Closing stock of finished
goods and scrap -552.03 -878.64 -1292.31 -1451.81 -1124.1
COST OF GOODS SOLD 5117.26 6226.3 9604.11 11141.83 11134.1

Selling & Distribution overhead
Selling expenses 202.55 355.64 349.91 420.02 660.32
Commission on sales 7.13 2.94 0 0 0
COST OF SALES 5326.94 6584.88 9954.02 11561.85 11794.4
Profit 2040.65 2988.75 3379.93 3392.85 2749.62
Net sales 7367.59 9573.63 13333.95 14954.7 14544
Table 4.9
PROFIT AND LOSS ACCOUNT OF JINDAL
Particulars
Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
Income
Sales Turnover 16,324.4 16,885.8 13,333.9 9,574.17 7,895.5
Excise Duty 1,780.44 1,931.14 0.00 0.00 548.14
Net Sales 14,544.0 14,954.7 13,333.9 9,574.17 7,347.4
Other Income 146.85 159.28 184.48 143.16 192.87
Stock Adjustments -386.03 148.20 379.24 333.45 40.06
Total Income 14,304.8 15,262.1 13,897.6 10,050.7 7,580.3
Expenditure
Raw Materials 6,377.26 6,928.54 6,439.76 4,042.60 3,219.4
Power & Fuel Cost 926.75 939.38 838.37 568.47 391.80
Employee Cost 552.32 447.89 385.44 277.78 219.72
Other Manufacturing Expenses 0.00 0.00 0.00 0.00 446.60
Selling and Admin Expenses 0.00 0.00 0.00 0.00 320.90
Miscellaneous Expenses 2,542.80 2,848.64 1,987.13 1,436.22 233.56
Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00
Total Expenses 10,399.1 11,164.4 9,650.70 6,325.07 4,832.0
PBDIT 3,905.71 4,097.73 4,246.97 3,725.71 2,748.3
Interest 1,083.63 820.77 536.77 285.00 331.66
PBDT 2,822.08 3,276.96 3,710.20 3,440.71 2,416.6
Depreciation 1,221.44 1,048.46 867.19 687.77 512.16
Extra-ordinary items 0.00 0.00 0.00 0.00 2.93
Tax 308.69 635.95 732.36 688.82 427.78
Equity Dividend 137.23 149.57 149.46 140.19 116.52
Per share data (annualised)

Final report in working capital management of tata steel ltd.

Final report in working capital management of tata steel ltd.

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