The project report focuses on the financial statement analysis of Odisha Mining Corporation Ltd. for the fiscal years 2007-2012, detailing its financial strengths and weaknesses through various analytical methods. It includes a comprehensive examination of profit and loss accounts, balance sheets, and the company’s operations and growth in the mining sector. Additionally, the study aims to support managerial decision-making by evaluating sales growth, expense trends, and the corporation's contributions to government revenues.

1. A
Project Report on
Financial Statement Analysis of "The Odisha Mining
Corporation Ltd.", Bhubaneswar
Submitted By: Sangam Kumar Patra
Regd: 1206284082
Under guidance of
Internal Guide:
Asst. Prof. Sushmita Pradhan
Dept. of Finance
Astha School of Management
External Guide:
Mr. S. Ramkumar
AGM, Finance,
The Odisha Mining Corporation Ltd.
Asst. Prof. In Finance
(Astha School of Management)
PLACE LOGO
OR COMPANY NAME HERE
Submitted To: Astha School of Management, Bhubaneswar
1

2. Acknowledgements
I acknowledge in the indebtedness gratitude to my internal guide Asst.
Prof. Sushmita Pradhan (Finance) for extending her cooperation and help for
successful completion of the project.
I would like to express my sincere gratitude to Mr. S. Ramkumar, AGM
(Finance), OMC for his valuable suggestion as well as I would like to thank Mr.
Debendu Mohapatra (Sr. Manager Finance, OMC) for his advises and guidance
in carrying out this project.
I would also like to thank Mr. P. C. Mohapatra, Sr. Manager (Personnel),
OMC for giving me an opportunity to undertake a project in OMC, Bhubaneswar.
I am also thankful to the staff members of finance department for their immense
support and assistance, for giving some time from his busy schedule to explain me
intricacies of the topic and guidance me to complete my project successfully.
Once again I express my sincere thanks & wholehearted gratitude to all
those persons with whom I was associated during my project & I’m very thankful
from the core of my heart to my Parents for their immense support & blessing for
which I could able to complete project.
Sangam Kumar Patra
Regd no-1206284082
2

3. DECLARATION
I do hereby declare that the project study entitled “FINANCIAL STATEMENT
ANALYSIS OF OMC” is being submitted by me to ASTHA SCHOOL OF
MANAGEMENT
for
partial
fulfillment
of
MASTER
OF
BUSINESS
ADMINISTRATION. This is based on the study undertaken by me, and the information
presented in this report is true to the best of my knowledge and belief. This report has
neither been submitted or published anywhere else. This report is a part of my course
curriculum and the main objective of conducting this study is to know about the financial
strength and weakness of OMC through a detail study of its financial statement from
2007-2008 to 2011-2012. The information and data used in the report was collected from
published “Annual Report”, financial statement and various articles of the OMC. This
report shall be used for academic purpose only.
Sangam Kumar Patra
Regd no-1206284082
3

4. Abstract/Preface
This project report comprises the total study of financial statement
analysis of The Odisha Mining Corporation Ltd. during financial year
2007-08, 2008-09, 2009-10, 2010-11 and 2011-12. This is the concise
statement of last four year’s annual report which has been prepared by using
graphs, facts & figures. The detail analysis and interpretation has been made
by taking last four years profit and loss account & Balance sheet
information. The quantity and amounts involve in this report are in million
tons and crore respectively.
The interpretation part plays a vital role for the organization’s growth
and development which could help in the expansion of business. The
“Financial Statement Analysis” application is inherent as financial reports
are account balance arrayed in effective & meaning order, so that the facts
and concepts the priority may be readily interpreted & used as basic decision
by all people who are interpreted in the business.
4

5. Contents
Chapter-I: INTRODUCTION
 Introduction to the topic
 Objectives
 Scope of Study
 Research Design
 Place of Study
 Methodology
 Limitation
Chapter-II: PROFILE OF THE COMPANY
 Brief History about OMC
 Functions of OMC
 Welfare & CSR activity
 Awards & achievement
Chapter-III: Main text
 Profit & loss account and Balance sheet details
Chapter-IV: Financial Statement analysis & Interpretation
 Trend analysis
 Ratio analysis
 Interpretation
Chapter-V: Suggestion & Reference
5

6. CHAPTER-1
BASIC INTRODUCTION,
FUNCTIONS & CSR
ACTIVITIES OF “OMC
”
6

7. Finance is the key for every business which plays a dominant role
on organizational activities. A firm mainly looks for wealth
maximization and profit maximization by minimizing its used funds. So
the firm always tries to utilize these funds in such a way that, it can get
maximum profit out of it. But to manage these funds is a challenging
task for the organization. The funds are generally raised through
various sources like shareholders, debenture, creditors, etc. Whereas
the funds are raised by taking decisions for long term or short term
investments so that the investors can get maximum return on their
investments.
For the above such reasons every organization prepares their own
annual report in order to facilitate their functions in an efficient manner.
In order for smooth running and growth of the business financial
statement analysis is vital.
Financial statement is prepared with the view to depict the
financial position of the concern. A proper analysis and interpretation of
these statements enables a person to judge the profitability and
financial strength of the business. It is also helpful for assessing
corporate expenses, judging credit worthiness, forecasting for the future
investments, etc.
7

8. There are 3 basic financial statements are Balance sheet,
Profit & loss account and cash flow statement. The Balance sheet
shows the financial viability or state of affairs of a business on a
particular date. The Profit & Loss account reflects the performance of
income or expenses of business over a specific period of time.
Financial Statement Analysis:
Financial statement plays a crucial role in setting the framework
of managerial decision. It provides the summary of accounts of a
business enterprise and to understand financial performance of a
corporation, its stockholders and the application of fund statements
But the information provided in income statement or financial
results aren’t sufficient to make the managerial decision directly. So the
financial statement analysis report helps to the management to draw an
effective, convenient and flexible managerial decision. Financial
statement analysis of an organization can be prepared by taking
previous few years annual report information which could help to view
the growth and development of the business. An annual report of an
organization usually contains the detail information about financial
affairs and other developmental activities of an organization during a
particular financial year.
This report has prepared by taking all the information provided
by Odisha Mining Corporation, Bhubaneswar. It is a concise statement
of last four years annual report information which has analyzed by
taking graphs, charts, facts and figures.
8

9. Objectives of the study:
 To know the financial viability of the business.
 To analyze the sales growth of various ores like chrome, iron and
manganese ores.
 To get the idea about performance of the business.
 To find out the reason of increase in expenses or incomes over
last several financial years.
 To analyze the shareholders dividend over last few years.
 To find out the different sources and application of funds.
 To draw the depreciation view in favor of investments in
machineries and other fixed assets.
 To show the increase or decrease of reserve surplus and general
reserve balance of the organization.
 To view the organizations endeavors towards development of
rural areas and other welfare activities.
9

10. Scope of the study:
The Odisha Mining Corporation (OMC) is a “gold” category state
PSU of our country. This study about financial statement analysis is
important on the view of organization’s managerial decision as well
as our state’s efficient use of natural resources.
Research Design:
Research design is just like a blue print for collection of data,
measuring those data and doing analysis.
When we design a research we should consider the following
aspects.
A) SOURCES OF DATA COLLECTION:-
I have collected the data from primary source, by discussing with
my concerned external guide of the organization and secondary data
with the help of last four years annual report of Odisha Mining
Corporation.
B) DATA INTERPRETATION :-
Data interpretation has been prepared by using graph, bar
diagram, Pi-chart and percentage.
C) TIME DURATION:-
The allotted time duration was 6 weeks.
10

11. Place of the study:
I had been allotted to Odisha Mining Corporation, Bhubaneswar to
conduct my research on behalf of summer project for the partial
fulfillment of MBA curriculum. The corporate office of OMC is situated at
Bhubaneswar which regulates all the functional activities of the
organization. The total accumulated expenses and incomes of all the
mines are regulated by the head office of OMC. My external guide Mr. S.
Ramkumar (AGM, Finance) & Mr Debendu Mohapatra (Sr. Manager,
Finance) had taught me the detail concepts, meanings, functions of the
financial affairs in the organization which helped me to understand the
facts and figures properly.
Research Methodology:
The data that are present in this report have been taken from the
secondary sources i.e. annual reports of the organization. These data
have been brought from the “Profit & loss account” and “Balance
sheet” information of the relevant financial year’s annual report of the
organization. As per the guidance of my external guide the detail
procedures and methods have been written with the help of graphs,
charts and symbols.
11

12. Limitation of the study:
As the report has prepared by taking certain assumptions like the
provided data are correct as far as the corporation is concerned in fact
there are certain limitations which I faced during my study are given
below.
 Time factor was the only reason which didn’t lead to analyze all
the facts and figures thoroughly.
 To write exact quantitative figure was not possible in fact they
were written up to four decimals for clear understanding purpose.
 The complete explanation was not possible to mention on the
report because the given interpretation in this report was made
by analyzing to the relevant years annual reports.
 The trend has been prepared by assuming 2007 as the base year
for our research.
 Last two years data was unavailable for our research which could
be the major reason to give in depth analysis on the report.
12

13. Brief History of Odisha Mining Corporation:
Odisha Mining Corporation (OMC) was initially started in the year
1956 with the joint venture of Odisha govt. and govt. of India to explore
minerals from the various mines in order to make value addition to the
mining industry. Eventually on 1961 it became a wholly state-owned
corporation of Odisha. Now OMC has been classified as “Gold” category
state PSU. The major minerals mined by OMC are chrome ore,
manganese ore, iron ore which cater to the requirement of mineral
based industries like steel, ferro-chrome, pig iron, etc.
But at present it only caters to the mining of “Chrome & Iron ores”
from various mines such as “South Kaliapani”, “Sucrangi”, “Daitarigiri”,
“Gandhamardan” and “Kurumitar”.
Here “south kaliapani” and
“Sucrangi” are involved in mining of chrome ores where as other three
mines are currently working for mining of iron ores in respective
districts. The growth of OMC has been impressive over these years and
today it stands as the largest State PSU in the mining sector of the
country. It recorded the highest turn-over of Rs. 2756 crore in 201011.
OMC is managed by a Board of Directors consisting of
Government Directors and Independent Directors. The day-to-day
management of the Corporation is looked after by the Chairman and the
Managing Director as authorized by the Board of Directors.
OMC has adopted SAP software, an ERP tool, since 2004 to
streamline its business processes, bring synergy in functional activities
across the organization, handle numerous business locations and
expanding volumes. It also helps in bringing greater transparency in
13

14. financial transactions and effective monitoring and financial control
enabling the organization to take informed and timely decisions. For
successfully implementing the ERP package, OMC was awarded with the
Golden Peacock Award in 2006-07 by the Institute of Directors, New
Delhi.
Because of huge accumulated profits, OMC is in a position to
undertake new Projects which are essential to sustain its good
performance in the long run.
i) JV Projects - OMC has decided to diversify its activities and has
entered into sectors such as coal and bauxite mining and power
generation. A number of Joint Venture Companies have been formed/
are in the process of formation like South West Bauxite Mining
Company (Pvt.) Ltd., East Coast Bauxite Mining Company (Pvt.) Ltd., etc.
ii) Own Projects - A number of Projects have already been taken up/are
being taken up by OMC to enhance the present performance level of the
Company.
14

15. Functions of Odisha Mining Corporation(OMC):
Production
OMC has shown consistent growth in the production of ore and
ore concentrate over the last 5 years. The production of iron ore has
increased substantially from 34 lakh tonnes in 2005-06 to about 8
million tonnes in 2008-09. Similarly the production of chrome ore and
chrome concentrate has been fairly consistent in the last 5 years.
Whereas the production of chrome ore increased from 9 lakh tones in
2007-08 to about 11 lakh tones in 2010-11. At the present rate, OMC is
producing about 10 % of total iron ore production of the State and
about 30 % of the total chrome ore production of the State. Presently
Daitari, Gandhamardan and Kurmitar (Khandadhar) are the major Iron
ore Mines of OMC whereas South Kaliapani is the main Chrome ore Mine
of OMC. Bangur Chrome ore Mine is the first and only underground
mine of OMC.
Sales & Distribution
The Sales and Distribution function of OMC have been carrying
out in OMC through ERP & SAP since 2006-07. It has facilitated in
creation of contract at Head office, sales order, financial document and
billing at the R.O Level and issue D.O at the mines levels and so on.
Customer master is maintained in the system which facilitates sale of
material to all customers, mines-wise and maintaining the customer
15

16. balance. In Generation of Reports and Documents MIS has helped
in quicker decision making.
(A) Domestic Sale:

The rates for domestic sale of Iron, Chrome and Manganese Ores
are decided by quarterly Price Setting Tender (PST) Mechanism.

Sale of ore to buying units/industries is restricted to their
capacity.

Verification of the units/industries is done to ascertain their
requirement of Ore.

No ore is sold to traders except iron ore fines, manganese ore with
less than 35% Mn. and non-moving items (materials seized by
various Govt. enforcement authorities and old stock).

Non-moving items and old stock as well as excess stock are sold
through Open Sale notice to liquidate the stock.

Iron ore is supplied to various units/industries as given below:
(i) MoU Steel Plants of Odisha - 70%
(ii) Sponge Iron Plants of Odisha - 30%
(iii) Crusher Units of Odisha - Soft ore only.
(iv) Outside State unit - Through Open Sale
and Tender route

Chrome ore is sold to the following categories of industries.
16

17. (a) Ferro-chrome units
(b) Chemical units
(c) Refractory units
State based units are given preference over outside units.

Chrome ore below 40% Cr203 is sold to State based Beneficiation
Plants through tender process.

Chrome ore is not supplied to any trader/anybody having chrome
ore Mining Lease.

Manganese ore is sold to the following categories of units:
(a) Ferro manganese units
(b) Silico Manganese units
(c) Ferro Alloys Units
(d) Processing units
(e) Chemical units
(B) Export Sale

All export sale of chrome ore and chrome concentrate (known as
canalized items) are made as per the decision of Minerals &
Metals Trading Corporation (MMTC) of Govt. of India. MMTC
decides the export rate and also allocates quantities to be
exported.
17

18. 
Iron ore fines is exported by OMC directly after finalizing the
rate through tender process.

All exports are made through Paradip Port.
HR Functionality
Implementation of HR and ESS function has facilitated the viewing
by employees, of their personal information, salary slip, loan balance,
leave balance and IT Form-16. Annual Self Appraisal respect of all
executives and CCRs of non-executive employees are submitted and
reporting done through online system. All type of leave quota, automatic
calculation of accrued leave, submission and approval of leave
application are all done on line.
Financial Performance of OMC
OMC has been a consistently growing state PSU over a period of 5
years. It has recorded substantial profit in last few years which directly
contributes its production growth on the increase of GDP of our country.
The detail information of the financial performance of OMC has been
described below.
18

19. FOR THE LAST FIVE YEARS.
(Rs. in Lakh
Year
Turnover
Profit
before tax
Profit
after tax
Cumulative Reserves &
surplus at the end of the
year
2008-09
208526.78 189022.37
123687.26 293786.37
2009-10
157784.85 108932.15
71686.68
337994.98
2010-11
275581.81 144696.42
94816.68
421112.16
2011-12
214181.41 188058.64
126938.54
514927.28
2012165824.00 158849.00
13(Provisional)
107310.44
584572.00
19

20. PAYMENT MADE TO GOVT. BY OMC
DURING LAST FIVE YEARS
(Rs. In lakh)
Year
Royalty
Dividend
Sales
Tax
2008-09
5027.50
25000.00
8219.30
65328.51
2009-10
11804.62 10000.00
6273.31
41513.00
2010-11
24422.44 28500.00
11691.56 47065.55
2011-12
25633.40 50000.00
8564.31
61092.71
8526.71
79349.64
201228350.34 13(Provisional)
Total
Income Tax
95238.30 113500.00 43275.19 294349.41
20

21. UDGETED AND ACTUAL PERFORMANCE OF O.M.C. LTD.
FOR LAST FIVE YEARS
(Rs. In Lakh)
ITEM
TURNOVER
OTHER
RECEIPTS
REVENUE
EXP.
YEAR
20082009201020112012-13
09
10
11
12
BUDGET 207653 156656 277693 211559 185148
ACTUAL 208527 157785 275582 214181 165824(Pr
ov.)
BUDGET 18375 24881 28305 40982 51455
ACTUAL 29242
24846
27324
BUDGET 56817
72865
168333 72671
ACTUAL 47288
72013
156575 71212
1310
1594
1633
1686
1635
1110
DEPRECIATI BUDGET 879
ON
ACTUAL 1459
PROFIT
BEFORE TAX
46200
51455(Pro
v.)
63263
57405(Pro
v.)
955
1025(Prov.
)
BUDGET 168331 107362 136071 178237 172385
ACTUAL 189022 108932 144696 188059 158849(Pr
ov.)
21

22. THE FOLLOWING TABULAR STATEMENT REFERS TO THE
ACHIEVEMENTS DURING 2011-12 AS COMPARED TO PREVIOUS YEARS
ITEM
YEAR
2007-08
2008-09
2009-10
2010-11
5174
8589
7325
5367
201112
3908
4510
5209
6210
4798
3971
Sales Value 83794.57
(in Lakh)
121198.08
101236.64
167385.99
171232.81
Production
(in ‘000MT)
926
507
1044
501
Sales
1092
(in ‘000MT)
Sales Value 108342.32
(in Lakh)
698
858
1023
314
86616.84
56548.21
108195.81
42927.35
Production( 31
in ‘000MT)
3
-
-
-
Sales
(in ‘000MT)
7
-
-
-
Sales Value 4182.51
(in Lakh)
711.86
-
-
-
Production( 3454
in ‘000MT)
-
-
-
-
Sales
(in 4504
‘000MT)
Sales Value 7.38
(in Lakh)
GE
Production( STON in ‘000MT)
-
-
-
-
-
-
-
-
-
-
-
-
Sales
(in ‘000MT)
-
-
-
Sales Value (in Lakh)
-
-
-
16,18,627
(In grams)
21.25
IRON
ORE
CHR
OME
ORE
MAN
GANE
SE
ORE
LIME
STON
E
E
Production
(in ‘000MT)
Sales
(in ‘000MT)
1158
134
22

23. Human Resource Development and staff welfare:
In order to keep good industrial relations, the company has taken
steps ofr development of human resources and the welfare measures
for achieving higher productivity.
The company has introduced several welfare activities such as
medical facilities, rent free accommodation in mines and camps,
maintenance of schools, providing grant-in-aid to privately managed
students for higher studies after matriculation, sanctioning substantial
amount for recreation and cultural activities, Group Insurance Scheme,
house building advance for construction of houses, advance for
purchase of vehicles, T.V., Computer etc. The daily rated workers and
piece rated miners have been given Moped advance.
For encouragement to the children of OMC employees, a scheme
has been introduced to give cash award of Rs. 3,000.00 for securing
higher marks in HSC examination as well as CBSE/ICSE examination and
Rs.5,000.00 in case of holding position in best 20 list.
Employees Pension Scheme, 1995 under EPF & MP Act, 1952 has
been implemented w.e.f. 1.11.1995 as social security measure enforced
by Government of India. The employees as well as PRM & DRMP
workers, on completion of 15 years of services in OMC are being
honored with presentation of a watch and are also given presentation
worth Rs.15, 000.00 on the day of retirement.
23

24. Corporate Social Responsibilities:
CSR in OMC has been implemented since its inception, however, a
policy to this effect has been formulated since 2010. Importance has
always been given for the development of peripheral villages of the
operating mines. Construction of roads, and school buildings, extension
of class rooms, supply of infrastructural facilities to the educational
institutions, provision of safe drinking water and promotion of cultural
activities were mainly covered under CSR activities. Every year a
substancial amount of the net profit have been utilized by OMC for
undertaking various social development works.
OMC has also contributed about Rs.319 crores to the Chief Minister’s
Relief Fund in last 5 years. OMC has contributed Rs.5 crores to Odisha
Environment Management Fund to fulfill its commitment for a ‘Clean and
Green Environment’. Apart from this it has also spent for the
development in the backward/mining areas of the state through differet
Government Departments like Health & FW, Mass Education, Water
Resources, ST/SC Development Department, Women & Child Welfare
Department etc. The detail information regarding expenditure incurred
under CSR and Peripheral Development activities in the last 3 years is
given below.
24

25. DETAILS OF CSR AND PERIPHERAL DEVELOPMENT WORKS IN OMC
DURING LAST 3 YEARS
2010-11
a) PD works undertaken
by OMC
b) (i) Keonjhar District
3538840.00
(ii) Sundargarh District 105290000.00
(iii) Jajpur District
11727528.00
(iv) In other District
(CSR)
c) v) CMRF
6276850.00
d) vi) Advertisement
1312700.00
Total
2011-12
a) PD works undertaken
by OMC
2328145918.00
b) (i) Keonjhar District
10865931.00
2200000000.00
(ii) Sundargarh District 225000.00
(iii) Jajpur District
(iv) In other District
(CSR)
722000.00
14020968.00
c) v) CMRF
150000000.00
d) vi) Advertisement
1008521.00
25

26. Total
176842420.00
2012-13
a) PD works undertaken
by OMC
b) (i) Keonjhar District
188957438.00
(ii) Sundargarh District 5668000.00
(iii) Jajpur District
1719633.00
(iv) In other District
(CSR)
c) v) CMRF
26373313.00
d) vi) Advertisement
Total=
283030.00
963001414.00
740000000.00
26

27. Major achievements by OMC: (quick, absolute)
 For successfully implementing the ERP package, OMC was
awarded with the “Golden Peacock” Award in 2006-07 by the
Institute of Directors, New Delhi.

For consistent good performance the Odisha Mining Corporation
Ltd. has been classified as a “Gold” Category State PSU in the year
2012.

For the proper security protection in IT department OMC has
adopted certain important steps like H.O LAN reconfiguration,
Antivirus server configuration, and process oriented incident
management has been carried out keeping network Security in
mind. Recommended Firewall deployment at Gateway level has
been implemented to enhance the level of security.
27

28. CHAPTER-2
TREND ANALYSIS &
INTERPRETAION ON FINDINGS
VISION & MISSION OF RUCHI
28

29. TREND Analysis on P/L Account:
The financial statements may be analyzed by computing
trends of series of information. The method determines the
direction
upwards
or
downwards
and
involves
the
computation of percentage relationship that each statement
item bears to the same item in the base year. The information
for a no. of years is taken up and one year, generally the first
year, is taken as the base year. The figures of the base year are
taken as 100 and trend ratios for the other years are calculated
on the base year. By taking the detail figure of last 5 years
profit & loss account & Balance sheet information the trend has
been analyzed below.
Total Income
Total Expenditure
Year
Trend%
2007-08
Amount
(Rs. In Lakhs)
211373.38
Trend%
100
Amount
(Rs. In Lakhs)
48995.36
2008-09
237769.12
112
50230.84
102
2009-10
182631.27
86
73410.47
150
2010-11
302906.01
143
157771.46
322
2011-12
260381.44
123
72322.80
148
29
100

30. 350%
322%
300%
250%
200%
150%
150%
100% 100%
112%
148%
143%
123%
102%
86%
100%
50%
0%
2007-08
2008-09
2009-10
Total Income
2010-11
2011-12
Total Expenditure
Interpretation:
From the above diagram the figure shows that in the year
2009-10 and 2010-11 the total expenses was increased in a
greater proportion in comparison to the base year i.e. 2007-08.
During financial year 2009-10 the “production & processing”
cost was increased to 5crore from 2.5crore of previous year
expenses. As well as the total expenses in the year 2010-11
increased due to the same reason i.e. increase of “production &
processing” cost to 11.78 crore from 5crore of last year
expenses. But for the year 2011-12 the “production and
processing cost” was increased in lesser proportion than base
year expenses which resulted in decrease to total expenses.
30

31. Furthermore in the same year the interest rate was high than
that of base year.
By considering to the income side the total income was
increased to 2755crore in the year 2010-11 due to increase of
sales in Iron Ore & Chrome Ore.
TREND OBSERVATION WITH RESPECT TO SALES, OTHER INCOME,
INTEREST RECEIVED
Sales
Other Income
Interest Received
Year
Trend%
2007-08
Amount
(Rs. In Lakhs)
196326.77
Trend
%
100%
Amount
(Rs. In Lakhs)
14423.27
Trend%
100%
Amount
(Rs. In Lakhs)
623.04
2008-09
208526.78
106%
678.90
108%
26938.58
187%
2009-10
157784.84
80%
881.87
141%
23960.87
166%
2010-11
275581.80
140%
2130.63
341%
25186.65
175%
2011-12
214181.41
109%
1277.91
205%
44920.50
311%
31
100%

32. 400%
341.97%
350%
311%
300%
250%
205.10%
187%
200%
175%
166%
141%
150%
100% 100% 100%
140%
109%
106% 108%
100%
80%
50%
0%
2007-08
2008-09
Sales
2009-10
Other Income
2010-11
2011-12
Interest Received
Interpretation:
The above figure indicates that in the year 2008-09, 0910, 10-11, 11-12 “interest received” has increased to 269, 239,
251, 449core respectively which resulted in the increase of
interest in subsequent years. Also “other income” has been
increasing in a greater proportion for last four years. But in the
year 2009-10 the sales of Chrome ore & Iron ore was reduced
to 1577crore due to recession for which it directly influenced
to the decrease of total income.
32

33. TREND ANALSIS ON PERCENTAGE CHANGE OF “SALES” FROM “TOTAL
INCOME”
Year
Total Income
Sales.
Percentage
(in crore)
(in crore)
change
2007-08
2113.73
1963.26
92.88%
2008-09
2377.69
2085.26
87.70%
2009-10
1826.31
1577.84
86.39%
2010-11
3029.06
2755.81
90.97%
2011-12
2603.81
2141.81
82.25%
Percentage change of "Sales" from
"Total Income"
94.00%
92.00%
Axis Title
90.00%
88.00%
86.00%
84.00%
82.00%
80.00%
78.00%
76.00%
Percentage change of "Sales"
from "Total Income"
2007-08
2008-09
2009-10
2010-11
2011-12
92.88%
87.70%
86.39%
90.97%
82.25%
INTERPRETATION:
The above figure shows that in the year 2007-08 the total
sales stood at 92.88% of total income, where as the rest income
was earned from the source of “interest received” and “other
income”. But in the year 2008-09 the contribution of ‘sales’ to
the “total income” reduced to 87.70% due to increase of
revenue from “Interest Received”, “Grant-in-Aid”. But later in
33

34. the year 2010-11 the total sales again increased to 90.97% of
“Total income” due to increase of production of Iron ore &
chrome ore to 2755core. Again in the year 2011-12 the sales
decreased to 82.25% due to less production of both iron as
well as chrome ore in compare to the previous year sales.
TREND ANALSIS ON PERCENTAGE CHANGE OF “Interest Received”
FROM “TOTAL INCOME”
Year
Total Income
Interest Received
Percentage
(Rs. In Lakhs)
(Rs. In Lakhs)
change
2007-08
211373.38
14423.27
6.83%
2008-09
237769.12
26938.58
11.32%
2009-10
182631.27
23960.87
13.11%
2010-11
302906.01
25186.65
08.31%
2011-12
260381.44
44920.50
17.25%
percentage change------->
Percentage change of "Interest Received"
from "Total Income"
20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
Percentage change of "Interest
Received" from "Total Income"
2007-08
2008-09
2009-10
2010-11
2011-12
6.83%
11.32%
13.11%
8.31%
17.25%
34

35. INTERPRETATION:
On the above figure I found that the contribution of
Interest Received” to the “Total Income” was high in the years
2008-09, 09-10, 11-12. Where as in the year 2011-12 it stood
at 17.25% but in the year 2007-08 it was 6.55%.
TREND ANALSIS ON PERCENTAGE CHANGE OF “DEPRECIATION”
FROM “TOTAL EXPENDITURE”
Year
Total
Depreciation
Percentage
Expenditure
(Rs in Lakhs)
change
(Rs in Lakhs)
2007-08
48995.36
967.51
1.97%
2008-09
50230.84
1458.84
2.90%
2009-10
73410.47
1686.01
2.29%
2010-11
157771.46
1634.84
1.03%
2011-12
72322.80
1109.93
1.53%
Percentage Change of "Depreciation" from
"Total Expenditure"
3.50%
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
Percentage Change of
"Depreciation" from "Total
Expenditure"
2007-08
2008-09
2009-10
2010-11
2011-12
1.97%
2.90%
2.29%
1.03%
1.53%
35

36. INTERPRETATION:
From the above figure it clearly indicates that the
depreciation cost for the year 2008-09 was 2.90% of total
expenditure where as in the year 2010-11 it was 1.03% of total
expenditure. From the report I found that the depreciation is
charged on “Ore Handling Plant’, “Railway Siding”, Platform
Dump yard, Stockpile and “Stockyard’ at 30%. Finally it clearly
shows that due to high expenditure in 2008-09 the
depreciation cost is also high.
VARIATION OF TREND BETWEEN TOTAL INCOME WITH
PAYMENTS AND PROVISIONS FOR EMLPOYEES.
DATA
(RUPEES IN CRORE)
Year
Payment
And Total Income
%
Provision
For
Payment
Employee
Change
In
And
Provision For Emp.
2007-08
11252.60
211373.38
5.32
2008-09
12136.82
237769.12
5.10
2009-10
13935.35
182631.27
7.63
2010-11
12156.07
302906.01
4.01
2011-12
13354.28
260381.44
5.13
36

37. % change in payment and provision for
employee
9
8
7
Axis Title
6
5
4
3
2
1
0
% change in payment and
provision for employee
2007-08
2008-09
2009-10
2010-11
2011-12
5.32
5.1
7.63
4.01
5.13
INTERPRETATION:-
The above trend signifies that in the year 2009-10 the
payment & provision expenses with respect to “Total income”
was high i.e 7.63 in comparison to other year’s expenses.
During that particular year both “Sales” as well as “Total
income” was less because of recession in business. Again it
reduced to 4.01 in the year 2010-11 hence the firm is utilizing
its resources effectively.
37

38. VARIATION OF TREND BETWEEN TOTAL
INCOME WITH PRODUCTION AND PROCESSING
COST
(RUPEES IN CRORE)
Year
Production
And
Processing
Cost
2007-08 25688.52
Total Income
% Change In
Income
211373.38
12.15
2008-09
29977.97
237769.12
12.06
2009-10
50884.42
182631.27
27.86
2010-11
117889.62
302906.01
38.91
Axis Title
% change of production & processing cost
from total income
50
40
30
20
10
0
% change of production &
processing cost from total
income
2007-08
2008-09
2009-10
2010-11
12.15
12.06
27.86
38.91
INTERPRETATION:-
From the above trend it is clear that the
percentage of production and processing cost with
respect to income is high in the year 2009-10 and 201011 as comparison of others, because of increase in the
volume of “production” & “sales”.
38

39. CHAPTER-3
RATIO ANALYSIS, SUGGESTION,
& REFERENCE
39

40. Ratio Analysis
The
analysis
of
the
financial
statements
and
interpretations of financial results of a particular period of
operations with the help of ‘ration’ is termed as “ratio
analysis.” Ratio analysis used to determine the financial
soundness of a business concern.
Advantages of Ratio Analysis
Ratio analysis is necessary to establish the relationship
between two accounting figures to highlight the significant
information to the management or users who can analyze the
business situation and to monitor their performance in a
meaningful way. The following are the advantages of ratio
analysis:
It facilitates the accounting information to be summarized
and simplified in a required form.
 It highlights the inter-relationship between the facts and
figures of various segments of business.
 Ratio analysis helps to remove all type of wastages and
inefficiencies.
 It provides necessary information to the management to
take prompt decision relating to business.
40

41.  It helps to the management for effectively discharge its
functions such as planning, organizing, controlling,
directing and forecasting.
 Ratio analysis reveals profitable and unprofitable
activities. Thus, the management is able to concentrate on
unprofitable activities and consider to improve the
efficiency.
 Ratio analysis provides all assistance to the management
to fix responsibilities.
 Ratio analysis helps to determine the performance of
liquidity, profitability and solvency position of the
business concern.
Limitations of Ratio Analysis
Ratio analysis is one of the important techniques of
determining the performance of financial strength and
weakness of a firm. Though ratio analysis is relevant and
useful technique for the business concern, the analysis is
based on the information available in the financial
statements. There are some situations, where ratios are
misused, it may lead the management to wrong direction.
The ratio analysis suffers from the following limitations:
 Ratio analysis is used on the basis of financial
statements.
Number
of
41
limitations
of
financial

42. statements may affect the accuracy or quality of ratio
analysis.
 Ratio analysis heavily depends on quantitative facts
and figures and it ignores qualitative data. Therefore
this may limit accuracy.
 Ratio analysis is a poor measure of a firm’s
performance due to lack of adequate standards laid for
ideal ratios.
Classifications of Ratio Analysis
Accounting Ratios are classified on the basis of the
different parties interested in making use of the ratios. A very
large number of accounting ratios are used for the purpose of
determining the financial position of a concern for different
purposes. Ratios may be broadly classified in to:
 Liquidity Ratio
 Profitability Ratio
Liquidity Ratio
Liquidity Ratios are also termed as Short-Term
Solvency Ratios. The term liability means the extent of quick
convertibility of assets in to money for paying obligation of
short-term nature. Accordingly, liquidity ratios are useful in
42

43. obtaining an indication of a firm’s ability to meet its current
liabilities, but it does not reveal how effectively the cash
resources can be managed. To measure the liquidity of a firm,
the following ratios are commonly used:
Current Ratio
2. Quick Ratio
3. Absolute Liquid Ratio
4. Cash Position Ratio
1.
1.Current Ratio:
Current Ratio establishes the relationship between
current Assets and current Liabilities; it attempts to measure
the ability of a firm to meet its current obligations. In order to
compute this ratio, the following formula is used:
Current ratio= current asset/current liability
CURRENT RATIO (Rs in Lakhs):Year
Total Current Liability Total
43
Current

44. Current
Asset
200708
200809
200910
201011
201112
Ratio
168100.22
355068.37
2.11
233944.17
520302.59
2.22
68497.01
397643.61
5.80
82970.90
491267.94
5.92
55370.93
554830.57
10.02
12
10.02
10
8
5.8
6
5.92
4
2.22
2.11
2
0
2007-2008
2008-2009
Ratio
2009-2010
Series 2
2010-2011
2011-2012
Series 3
Interpretation:
As we know the current ratio within 1.5 to 3 is good
for the firm hence if it is more than that the firm may not be
using its current assets efficiently. So from the study I
concluded that due to high balance in current asset side firm’s
44

45. current ratio during year 2010-11 was 5.92. However still it is
high in 2011-12 as 10.02. Finally we can interpret that the firm
is experiencing a healthy growth.
2. Quick Ratio or Acid Test or Liquid Ratio
Quick Ratio also termed as Acid Test or Liquid Ratio. It
is supplementary to the current ratio. The acid test ratio is a
more severe and stringent test of a firm’s ability to pay its
short-term obligations and when they become due. Quick Ratio
establishes the relationship between the quick assets and
current liabilities. In order to compute this ratio, the below
presented formula is used:
Liquid Ratio=Liquid Assets/Current Liabilities
Liquid Assets= (Current Assets – Inventories) or (Sundry
Debtors + Cash & Bank balances+ Loans and advances)
The ideal Quick Ratio of 1:1 is considered to be
satisfactory. High Acid Test Ratio is an indication that the firm
has relatively better position to meet its current obligation in
time. On the other hand, a low value of quick ratio exhibiting
that the firm’s liquidity position is not good.
45

46. Year
Liquid assets
(Rs in lakhs )
200708
343432.04
Total
Current
Liability
(Rs in
Lakhs)
168100.22
200809
495431.47
233944.17
2.12
200910
371364.89
68497.01
5.42
201011
405264.24
82970.90
4.88
201112
453025.07
55370.93
8.18
46
Quick
Ratio
2.04

47. 9
8.18
8
7
6
5.42
4.88
5
4
3
2.11
2.04
2
1
0
2007-2008
2008-2009
Ratio
2009-2010
rs in lakhs
2010-2011
2011-2012
Series 3
Interpretation
From the study it has been seen that the firm is
continuously experiencing effective fund management to meet
its current obligation in due time. If we see the figure during
year 2010-11 it was 4.88 which was less than previous year
ratio. Moreover as we know the firm is cash reach company so
it didn’t continue for next year.
3. Absolute Liquid Ratio
Absolute Liquid Ratio is also called as Cash Position
Ratio or Over Due Liability Ratio. This ratio established the
relationship between the absolute liquid assets and current
liabilities. Absolute Liquid Assets include cash in hand, cash at
47

48. bank, and short term marketable securities or temporary
investments. The optimum value for this ratio should be one,
i.e., 1:2. It indicates that 50% worth absolute liquid assets are
considered adequate to pay the 100% worth current liabilities
in time. If the ratio is relatively lower than one, it represents
that the company’s day-to-day cash management is poor. If the
ratio is considerably more than one, the absolute liquid ratio
represents enough funds in the form of cash to meet its shortterm obligations in time. The Absolute Liquid Ratio can be
calculated by dividing the total of the Absolute Liquid Assets by
Total Current Liabilities. Thus,
Absolute Liquid Ratio= Absolute Liquid Assets/ Current
Liabilities
Absolute Liquid Assets = Cash in hand + cash at bank+
short term marketable securities.
Note** As the firm doesn’t poses any short term marketable
security hence only cash in hand and cash at bank has been
considered as Absolute Liquid Asset in the table.
48

49. Year
Absolute Liquid
Assets (Rs in Lakh)
203893.15
279606.66
233944.17
1.19
321558.21
68497.01
4.69
405264.24
82970.90
4.88
453025.07
200708
200809
200910
201011
201112
Current
Liabilities
(Rs in
lakhs)
168100.22
55370.93
8.18
9
Total
1.21
8.18
8
7
6
4.69
5
4.88
2009-2010
2010-2011
4
3
2
1.21
1.19
2007-2008
2008-2009
1
0
2011-2012
Ratio
Interpretation:
Here the same situation has been seen in year 201011 as its current liability again increased to 82970.90 lakh
49

50. from 68497.01 lakh of 2009-10 current liability. However it
again decreased in the year 2011-12 which shows a positive
sign for the
organization.
Moreover the
firm’s fund
management is appreciable.
4.Debtor’s Turnover Ratio:
Debtor’s Turnover Ratio is also termed as Receivable
Turnover Ratio or Debtor’s Velocity. Receivables and Debtors
represent the uncollected portion of credit sales. Debtor’s
Velocity indicates the number of times the receivables are
turned over in business during a particular period. In other
words, it represents how quickly the debtors are converted
into cash. It is used to measure the liquidity position of a
concern. This ratio establishes the relationship between
receivables and sales. Two kinds of ratios can be used to judge
a firm’s liquidity position on the basis of efficiency of credit
collection and credit policy.
Debtors turnover ratio= Net Sales/ Sundry debtors
50

51. Year
Sales
(Rs in lakhs)
Sundry
Debtors
(Rs in
lakhs)
Ratio
200708
200809
200910
201011
201112
196326.77
4328.13
45.36
208526.78
1679.54
124.15
157784.84
4386.32
35.97
275581.80
2163.72
127.36
214181.41
1521.56
140.76
160
140.76
140
127.36
124.15
120
100
80
60
45.36
35.97
40
20
0
2007-08
2008-09
2009-10
2010-11
2011-12
Debtors turnover ratio
Interpretation:
The graph and data clearly signifies that the firm’s
sundry debtor is decreasing day by day which is again a
positive sign for the organization. As it is used to measure the
51

52. liquidity position of a firm hence we can clearly define that the
firm is experiencing better growth among all state PSUs.
5.Net Profit Ratio:
Net Profit Ratio is also termed as Sales Margin Ratio
(or) Profit Margin Ratio (or) Net Profit to Sales Ratio. This ratio
reveals the firm’s overall efficiency in operating the business.
Net profit Ratiois used to measure the relationship between
net profit (either before or after taxes) and sales. This ratio can
be calculated by the following formula..
Net Profit Ratio = (Net Profit After Tax/ Net Sales) x 100,
Net profit includes non-operating incomes and profits.
Non-Operating Incomes such as dividend received, interest on
investment, profit on sales of fixed assets, commission
received, discount received etc. Profit or Sales Margin indicates
margin available after deduction cost of production other
operating expenses, and income tax from the sales revenue.
Higher Net Profit indicates the standard performance of the
business concern.
Advantages
i.
This is the best measure of profitability and liquidity.
52

53. ii.
It helps to measure overall operational efficiency of the
business concern.
iii.
It facilitates to make or buy decisions.
iv.
It helpps to determine the managerial efficiency to use
firm’s resources to generate income on its invested
capital.
Year
Net Profit After Tax
(Rs in Lakhs)
200708
200809
200910
201011
201112
105285.84
Sales
(Rs in
lakhs)
196326.77
123687.25
208526.78
59.31
71686.67
157784.84
45.43
94816.68
275581.80
35.40
126938.53
214181.41
59.27
53
Ratio
53.62

54. 70
60
59.31
59.27
53.62
50
45.43
40
35.4
30
20
10
0
2007-08
2008-09
2009-10
2010-11
2011-12
Net Profit Ratio
Interpretation:
If we look at the net profit side the wealth of the profit
might have not increased continuously but still it again
increased to 59.27% during 2011-12. The main reason behind
previous year decline might be due to change in tax percentage
or due to less in profit on sale.
54

55. Suggestions
 The company should use its current asset effectively in
order to get maximum revenue out of it.
 Less practical knowledge about day to day mining
activities for which it trusts on the contractors. So
proper experience may lead to minimize the cost of
production.
 Regular effort should be made to increase sales volume
to generate more revenue.
 In order for effective mange of working capital
management reserve and surplus should be used
properly.
 Technological up gradation must be made in order to
increase production volume.
55

56. Reference
The books which were referred during my SIP are
53rd ANNUAL REPORT 2008-09
55th ANNUAL REPORT 2010-11
Apart from this we had collected some information through
virtual medium, these websites are
http://www.orissamining.com
http://www.wikipedia.com
56