In the report we have analysed Financial statements of SAIL for F.Y 2015-16 and F.Y 2014-15

1. Financial Statement Analysis
1
Presented by
Lavanya Kosuri
Aditya Yadav Aradhyula

2.  The financial data given in the statement
should be re-organized and rearranged.
 A relationship is established among financial
statements with the help of tools and
technique of analysis such as ratio, trend,
common size, fund flow etc.
 The information is interpreted in a simple and
understanding way.
 The conclusion drawn from interpretation and
presented to the management in the form of
report.
Financial Statement Analysis 2

3. The analysis and interpretation of financial
statements is used to determine the financial
position and the results of operation as well. A
number of methods or devices are used to study the
relationship between different statements. An effort
is made to use those devices which clearly analyze
the position of the enterprise.
 The following methods of analysis are generally
used:
 Comparative statement.
 Trend analysis.
 Common size statement.
 Cash flow analysis.
 Ratio analysis.
Financial Statement Analysis 3

4.  prese fsa.xlsx
Statement of P&L
Net sales ( 43,336.99 cr) include sales to
government agencies recognized on provisional
contract prices during the year ended 31st march
2016, 3,376.11cr (PY 2,907.36 cr) and
cumulatively up to 31st march 2016 13,074.67 cr
(PY 9,750.99 cr).
Financial Statement Analysis 4

5. Interpretation of Revenue:
 Changes in Operating revenue: During F.Y 2015-16 the
company had registered a growth of 4% in sales volume
from 11.8MT in 2014-15 to 12.2MT in 2015-16, despite of
registering the growth in sales volume the company’s
revenue has been declined by 14.12% due to the oversupply
scenario globally. Thereby, unprecedented imports which
forced significant price cuts by the steel producers leading
to a squeeze in margin.
 To support the domestic steel industry, the government has
imposed restriction on import of steel by fixing Minimum
Import Price (MIP) with effect from 5th Feb 2016, which
lead to an increase in price of steel.
-6,000.00
4,000.00
14,000.00
24,000.00
34,000.00
44,000.00
54,000.00
31-Mar-16 31-Mar-15 31-Mar-14
Income
Revenue From Operations
Less: Excise duty
Other Income
Total Revenue
Financial Statement Analysis 5

6. Interpretation of Expenses:
 Changes in Raw materials: During the F.Y
15-16 the company has consumed 24.83
million tons of captive iron and 0.98MT of
Dolomite, 1.28 metric tons of lime stone
compared to 23.18 million tons of captive of
iron and 1.11 million tons of lime stone and
0.97 million tons of dolomite. Even though
there’s an increase in consumption, due to the
reduction of input prices the cost of material
consumed has decreased.
 Changes in Finance costs: Finance costs had
tremendously increased over the previous year
by 40% ( 590.52crores) which is due to the
increase in the borrowings from 29,898 crores
in F.Y 14-15 to 33,217 crores in F.Y 2015-16.
0.00
5,000.00
10,000.00
15,000.00
20,000.00
31-Mar-16 31-Mar-15 31-Mar-14
Expenses
Cost Of Materials Consumed Finance Costs
Financial Statement Analysis 6

7.  Changes in Employee costs: During the year, the
Employees' Remuneration & Benefits have increased
mainly due to increase in travel concession from 32.54
crores to 251.34 crores and welfare expenses from
481.18 crores to 502.96 crores.
Changes in R&D Expenditure: The R&D expenditure has
an significant increase from 262 crore in 2014-15 to 277
crores in 2015-16 and the R&D expenditure as percentage
of turnover (net of excise) has increased from 0.58 in 2014-
15 to 0.64 in 2015-16.
 Expenses: In the same way analyze all related costs and
expenses like employee cost, Depreciation and other
expenses.
Eg: The increase in other expenses was on account of
increase in the cost of stores & spares, power & fuel, repairs &
maintenance, freight outward, handling expenses, conversion
expenses, security expenses, royalty & cess, etc.
Financial Statement Analysis 7

8.  Equity and Liabilities:
 Changes in Shareholders Funds:
 Share capital: No change as there is no issue
of Equity shares.
 Reserves & Surplus: Due to loss of 4,137.26
crores in current year the R&S has been
decreased by 10%.
 Changes in Non Current Liabilities:
 Long term Borrowings: Increase in long term
borrowings by 14% was due to issue of non-
convertible bonds.
 Long term Provisions: The decrease in long
term provisions by 62 crore was mainly on
account of decrease in the Gratuity and others.
0.00
10,000.00
20,000.00
30,000.00
40,000.00
31-Mar-16 31-Mar-15 31-Mar-14
Shareholders Funds
a) Share Capital b) Reserves and Surplus
0.00
4,200.00
8,400.00
12,600.00
16,800.00
31-Mar-16 31-Mar-15 31-Mar-14
Non-Current Liabilities
Longterm borrowings Deferred Tax Liabilities
other Long term liabilities Long term provisionsFinancial Statement Analysis 8

9.  Changes in current Liabilities:
Short term Borrowings: The short term borrowings
increased by 1,335 crore on account of raising of loans
from banks.
 Other Current liabilities: There was an increase in other
current liabilities from 14,016.53 crores to 15,805.56
crores, due to increase in advances from customers.
Assets:
 Changes In Non-current Assets:
 Tangible Assets: During FY 2015-16, the company has
capitalized its Steel plant worth 9,171.10 Crores, due to
which there is an increase in tangible assets and
depreciation.
 Intangible Assets: Intangible assets are increased due to
mining rights.
 Long Term Loans & Advances: The Company paid a
refundable contribution of 270.34 crore to Indian Railways
for construction of rail link between Dalli-Rajhara and
Rowghat.
0.00
5,000.00
10,000.00
15,000.00
20,000.00
31-Mar-16 31-Mar-15 31-Mar-14
Current Liabilities
a) Short Term Borrowings
b) Trade Payables
c) Other Current Liabilities
d) Short Term Provisions
0.00
2,000.00
4,000.00
6,000.00
31-Mar-16 31-Mar-15 31-Mar-14
Non-current Assets
b) Non-Current Investments
c) Deferred Tax Assets [Net]
d) Long Term Loans And Advances
Financial Statement Analysis
9

10.  Capital work in progress: During FY 2015-16
CWIP has decreased by 4,300 crores due to the
capitalization of steel plant as a result there is an
increase in tangible asset.
 Changes In Current Assets:
 Inventories: During FY 15-16 the inventories
decreased by 2,600 crore mainly on account of
decrease in raw materials inventory by 1,590 crore,
finished/semi-finished products inventory by 674
crore and stores & spares inventory by 336 crore.
 Trade receivables: During FY 15-16 trade
receivables decreased by 359 crore mainly on
account of reduction in debtors.
• Cash & Bank Balances: Decreased by 2,008
crore.
0.00
5,000.00
10,000.00
15,000.00
20,000.00
31-Mar-16 31-Mar-15 31-Mar-14
Current Asset
a) Inventories
b) Trade Receivables
c) Cash And Cash Equivalents
d) Short Term Loans And Advances
e) OtherCurrentAssets
Financial Statement Analysis 10

11. Financial Statement Analysis 11
Conclusion
 The company had a pending court cases in SC, that has been disclosed as contingent liabilities in the
Annual report.
 Adverse outcome of the following cases results in huge decrease in value of Assets.
 Due to non-recognition of the above effect an understatement of Loss after Tax for
the year by 1,321.35 crore was witnessed. We also witnessed:- (Over statement of profit of Previous
Year ended 31st March, 2015 by 1,906.75 crore), overstatement of Reserves & Surplus by 1,321.35
crore (As at 31st March, 2015 1,906.75 crore), understatement of Current Liabilities by 2,020.66
crore (As at 31st March, 2015- 1,906.75 crore) and understatement of Total Assets by 699.31 crore
(Previous Year ended 31st March, 2015 Nil).