AN ANALYTICAL STUDY OF THREE YEARS PUBLISHE DATA ON SESA INDUSTRIES LIMITED:

SUBMITTED BY: Dave. Vishva.D Roll no. 46 SYBBA

SUBMITTED TO: PROF. Anagha Dixit N.R. Institute of Business, Administration,

Ahmedabad.

N.R. INSTITUTE OF BUSINESS ADMINISTRATION

GLS Campus, Mardia Plaza Lane, Off.C.G. Road, Ellisbridge, Ahmedabad-380006, Phone: 6430373

CERTIFICATE

This is to certify that the report on Sesa Industries Ltd is submitted by Ms. Dave. Vishva.D to N.R. Institute of Business Administration, affiliated to Gujarat University, in the partial fulfillment of the requirements for the completion of Practical Studies in the area of Finance Management at the Second Year of the B.B.A. Program for the year 2010-2011.

Director

Prof-in charge

External Examiner

Date: 24/1 /2011

Acknowledgement

I am highly thankful to the management and staff of Sesa industries ltd. I am especially thankful to Prof. Anagha Dixit for helping me in my Practical Studies. In addition to allowing me to visit the company and study the organization, they provided me with many details which were very useful in preparing this report. I take this opportunity to thank our Director, Prof. Avani Desai, Professor in-charge Prof Anagha Dixit for their encouragement and the office staff for providing us all the facilities for making the visit more learning oriented.

Dave . Vishva. D

Date: 24 / 1 /2011

PREFACE

BBA is a professional course where equal importance is given to practical and theoretical knowledge .This feature makes it different from B.COM wherein importance is given only to the theoretical knowledge to gain this practical knowledge, visit to various companies are organized. The sole objective of this project is to add practical knowledge to the theoretical one. With this objective we made this project on SESA INDUSTRIES LTD. To study about such a company was a great pleasure.

INDEX SR. NO. 1. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 TOPIC Company profile Name of organization Registration Address of the company Brief introduction of the activities Status of the company in market Special Achievements Financial Highlights Meaning and analysis and objective Results of Operation Profit of 3 years Meaning and importance of Cash Flow 7 8 PAGE NO. 1 1 1 2 2 3 5 6

2
2.1 2.2 2.3 2.4 3. 3.1

Cash Flow Statement of the company concerned 10 Conclusion Ratio Analysis Meaning,Importance,Limitation, and Classification of 12 Ratio Analysis. 11

3.2 3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 3.2.6 3.2.7 3.2.8 3.2.9 3.2.10 3.2.11 3.2.12 3.3 3.3.1 3.3.2 3.3.3 3.3.4 3.3.5 3.3.6

Profitable ratio Gross Profit ratio Net Profit Ratio Expenses Ratio Operating ratio Return on Investment Return on Share holder fund Return on Eq Share Capital Return on Eq shareholders Fund Earning per share Dividend per share Price earning ratio dividend yield ratio Activity/Turnover Ratio Overall turn over Ratio Fixed Asset turnover Ratio Debtors Ratio Debtors turnover Ratio Creditors Ratio Creditors turnover Ratio

17 18 19 20 21 23 24 26 27 29 30 31 32

33 34 35 36 37 39

3.3.7 3.3.8 3.3.9 3.4. 3.4.1 3.4.2 3.4.3 3.5. 3.5.1 3.5.2 3.5.3 3.5.4 3.6 3.6.1 3.6.2 4 5 6. 7. 8.

Stock turnover Ratio Working Capital turnover Book value per share Liquidity Ratio Current Ratio Liquid Ratio Quick / Acid Test Ratio Leverage Ratio Proprietary Ratio Debt Eq ratio Capital gearing Ratio Long term fund to F.A Coverage Ratio Interest Coverage Ratio Debt Service Coverage Ratio Accounting Policies and Notes Directors Report Auditors Report Common Size Statement Conclusion & Findings

40 41 43

44 46 48

50 51 52 53

54 55 57 60 62 65 69 & 71

1.

COMPANY PROFILE

1.1

Name of the company SESA INDUSTRIES LIMITED

1.2

Registered Address of the Company

Sesa industries LTD Sesa Ghor, 20,EDC complex, Patto ,panaji, Goa-403001 INDIA.

1.3

Brief introduction of the activities of the business:-

Sesa Goa's Pig Iron business is managed through their subsidiary Sesa Industries Limited (SIL) which commenced operations in 1992. 1.

 Sesa Goa's operations is organised into Iron Ore Division, Metallurgical Coke Division, Pig Iron business through its subsidiary Sesa Industries Limited and a technology business, each of which operates independently. They produce compositions within fairly narrow ranges of specifications with the objective of optimising customer's costs due to non-addition of We also produce two grades of ductile iron grade pig iron SG50 & SG60, which we also supply to Indian manufacturers of automobile components. Manufactures Basic, Foundry and Nodular grade pig iron for the steel mills and foundries. It also sells good quality slag.

1.4

Status in the market

In 2006 Sesa Industries Limited was ranked 8th Best transitioning medium enterprises in a study conducted by Citigroup and IMA India. Sesa Industries Limited is one of the top four iron ore mining companies in the world. Sesa Goa is India's largest producer and exporter of iron ore in the private sector and is on course to be in the league of top four iron ore producing companies in the World. 2.

 SIL's products are well accepted in the export market. To contribute to the development of the communities that we operate in or have influence on our business activities. Our customers comprise some of the most reputed foundries in India who manufacture automobile components, Pump and Diesel Engine manufacturers

1.5

Special Achievements
1997

The company manufacturers 1.8 lac tonnes of pig iron through a subsidiary and producers metallurgical coke through a joint venture with Kembla Coal and Coke, an Australian company.

2004
Sesa Industries and Sesa Kembla sign an agreement with M/s Goa Energy Private Limited, a part of Videocon Group, to set up a 30MW Power plant at Amona.

2006
Dun & Bradstreet ranks Sesa Goa as the 4th best in the Indian Mining Sector among India's top 500 companies 3.

 2008
Sesa industries was selected the winner of Golden Peacock Awards for occupational Health and Safety. The pig iron plant was declared winner of the Green tech Environment Excellence Silver Award. Iron ore sales rises to 12.39 million tonnes in 2007-2008.

2009
Seas Industries won the International safety award in the year2009 for the year 2008 from British safety council. Sesa Industries has won Good Green Governance award from Shrishti Publications in 2009.

2010
Sesa Industries Ltd & Sesa Goa Ltd Met Coke division has won the international safety award by british safety council for 2009 in april 2010. The award will be given in May 2010

4.

1.6

Financial Highlights

PROFIT OF THREE YEARS

(in crores)
PARTICULAR NET PROFIT(%) 2008 62.59 2009 57.67 2010 84.30

SALES OF THREE YEARS

(in crores) PARTICULAR SALES 2008 496.56 2009 572.89 2010 546.94

EPS OF THREE YEARS

EPS = PROFIT AFTER TAX - PERFERENCE DIV.

NO. OF EQUITY SHARES

5.

CALCULATION
PARTICULARS NETPROFIT NO. OF EQUITY SHARES RATIO 2007-08 62.59 2 2008-09 57.67 2

(In crores) 2009-10 84.30 2

31.295

28.84

42.15

1.7

Meaning of analysis and objective of study

The analysis of the company have helped me a lot in understanding the working of companies. The analysis of the company gives practical knowledge and where we have to use theories into practise. Objectives of the study:1) It provides an attempt to learn practical rather then bookish knowledge. 2) The main objective of the study is to develop analytical skills. 3) Various finance concepts are used in practical world. 4) The main purpose of the study is analysis of ratios, cash flow statement, common size statement of particular company.

6.

Chpt:- 2
2.1

RESULTS OF OPERATIONS

PROFIT OF 3 YEARS
(in crores) 2007-08 98.03 2008-09 86.52 2009-10 129.12

GROSS PROFIT:PARTICULARS GROSS PROFIT

NET PROFIT:PARTICULARS NET PROFIT 2007-08 62.59 2008-09 57.67

(in crores) 2009-10 84.30

EBIT:- EARNING BEFORE INTEREST AND TAX

PARTICULARS EBIT 2007-08 94.9 2008-09 85.62

(in crores) 2009-10 126.03

7.

EBT:- EARNING BEFORE TAX

PARTICULARS EBT 2007-08 93.66 2008-09 84.73

(in crores) 2009-10 125.30

EAT:- EARNING AFTER TAX

PARTICULARS EAT 2007-08 62.59 2008-09 57.67

(in crores) 2009-10 84.30

2.2 MEANING AND IMPORTANCE OF CASH FLOW STATEMENT:Cash is the most important liquid asset of the business. All business transactions ultimately results into cash inflow or outflow. Hence a statement that shows cash flow is considered to be an important one.

Meaning of Cash Flow :-

A statement showing Inflow of Cash and Outflow of Cash during the last year and as a result the balance of cash at the end of the year is known as CASH FLOW STATEMENT. 8.

IMPORTANCE OF CASH FLOW STATEMENT:-

1. Effective cash management can be done by finance manager

through an idea in cash receipts and cash payments, cash resources can be effectively managed. 2. If the cash payments are planned at a time when enough cash inflows is likely, it is possible to manage business with minimum working capital. 3. The management can plan out payment of dividend, repayment of long term loans, purchase of machinery or equipments etc. 4. Cash flow statement gives clear information about cash receipts and cash payments which is very useful to the management in meeting any future contingencies and also in seizing any profitability opportunity. 5. The historical cash flow statement prepared for last year is important for comparing the figures of cash budgets and points of differences may be located. 6. By cash flow statement it becomes easy in obtaining funds from financial institutes.

9.

2.3 CASH FLOW STATEMENT OF THE COMPANY

PARTICULARS CASH FLOW FROM OPERATING ACTIVITY NET PROFIT BEFORE TAX AJUSTMENT FOR: DEPRECIATION PROVISION / DOUBTFUL DEBTS INTEREST/DIVIDEND PROFIT /LOSS ON SALES OF ASSETS PROFIT /LOSS ON REDEMPTION OF INVTS OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES: ADJUSTMENTS FOR: TRADE AND OTHER RECEIVABLES INVENTORIES TRADE PAYABLES AND OTHER LIABILITIES CASH GENERATED FROM OPERATIONS TAX PAID NET CASH FROM OPERATING ACTIVITIES (4.48) (10.43) 25.92 107.74 (27.97) 79.77 12.16 10.51 (28.25) 79.93 (23.27) 56.66 (16.75) 4.96 30.06 143.42 (40.13) 103.29 7.33 (0.13) (4.17) (0.01) _ 96.73 7.57 0.03 (6.76) (0.03) (0.03) 85.51 7.90 (0.03) (7.96) 0.03 (0.09) 125.15 93.66 84.73 125.30 2007-08 2008-09 2009-10

PARTICULARS CASH FLOW FROM INVESTING ACTIVITIES ADDITION TO FIXED ASSETS PROCEEDS ON SALES OF FIXED ASSETS PURCHASE /REDEMPTION OF CURRENT ASSSETS INTEREST RECEIVED DIVIDEND RECEIVED NET CASH USED IN INVESTING ACTIVITIEs

2007-08

2008-09

2009-10

(9.88) 0.01 (70.57)

(10.83) 0.03 (54.93)

(4.52) 0.03 (102.31)

0.12 1.64 (78.68)

0.19 6.57 (58.97)

0.15 7.81 (98.84)

CASH FLOW FROM FINANCIAL ACTIVITIES INTEREST PAID NET CASH USED IN FINANCIAL ACTIVITIES NET INC/ DEC IN CASH OR CASH EQUIPMENTS CASH AND CASH EQUIPMENTS AT THE BEGINING OF THE YEAR CASH AND CASH EQUIPMENTS AT THE END OF THE YEAR FOOTNOTES :CASH AND BANK BALANCE LESS: UNPAID DIVIDEND ACCOUNT CASH AND CASH EQUIPTMENTS AS PER 7.86 (0.12) 7.74 1.09

_ _ _ (2.31)

_ _ _ 4.45

6.65

7.74

5.43

7.74

5.43

9.88

5.55 (0.12) 5.43

10.00 (0.12) 9.88

10.

2.4 CONCLUSION
1. NET PROFIT BEFORE TAX has decreased from 2008 to 2009 but it
has increased in 2010. 2. Depreciation is also increased from 7.57 to 7.90 in 2009 and 2010 which decrease net profit. 3.Net interest paid has also increased from 6.76 to 7.96 in 2009-2010 which decreases Net profit. 4. Sundry debtor is high in 2008 but it decreased in 2009 and it again increased in 2010 which decreased the profit. 5. Profit on fix assets is more in 2009 as compared to 2008 but it remains constant in 2010 6. Interest income received in 2009 is more than that of 2010 . 7. Inventories are more in 2009 as compared to bot the years. 8. Current liabilities are 68.85 which is very high in 2010.

11.

Chpt:-3

RATIO ANALYSIS

MEANING OF RATIO ANALYSIS:Ratio analysis is a very important tool of financial analysis. It is the process of establishing a significant relationship between the items of financial statement (profit and loss a/c and balance sheet) to provide a meaningful understanding of the performance and financial position of the firm.

ADVANTAGES OF RATIO ANLYSIS

There are various groups of people who are interested in analysis of financial position of the company. They use the ratio analysis to work out particular financial circumstances of the company in which they are interested. Ratio analysis helps the various groups in the following manner:-

To know about the profitability:Accounting ratio helps to measure the profitability it helps the management to know about the capacity of the firm. In this way profitability ratio shows the actual performance of the business.

To know about solvency:With the help of solvency ratio, solvency of the company can be measure. This ratio shows the relationship between the assets and liabilities. In case external liabilities are more than the assets; It shows the unsound position of the business. In this the firm has to make it possible to repay its loan. 12.

Helpful in analysis:Ratio analysis helps the outsiders just like creditors, shareholders, debenture holders, bankers to know about the profitability and ability of the firm to pay their interest, dividend etc.

Helpful in comparative analysis of performance:With the help of ratio analysis, a company may have comparative study of its performance to the previous year. In this way co. come to know about its weak point and able to improve them.

To know about the efficiency:Ratio analysis helps to know the operating efficiency of the co. with the help of various turnover ratios. All turnover ratios are calculated to evaluate the performance of the business in utilizing the resources.

To know about liquidity position:Ratio analysis helps to know the short term financial position (liquidity position) of the company with the help of liquidity ratios. In case of short term financial position is not good efforts are made to improve it.

Helpful for forecasting purpose:Accounting ratios indicate the trend of the business. The trend is useful for estimating future. With the help of previous years Ratio, estimates for future can be made in this way. Ratio provides the basis for preparing budget and helps for future course of action. 13.

LIMITATION OF RATIO ANALYSIS

In spite of many advantages there are some limitations and they should be kept in mind while using them in interpreting financial statement. The following are the main limitation of ratio.

Limited comparatively:Different firms apply different accounting policies. There the ratio of one firm cannot always be compared with the ratio of other firm. Some firm may value the closing stock on last in first out (LIFO) based. While some other firms may value first in first out.(FIFO) based. Similarly there may be different in providing depreciation of fixed assets or certain provisions etc.

False result:Accounting ratios are based on data taken from accounting records, incase their data is correct then only the ratio will be correct. e.g.:- valuation of stock is based on very high price the profits of the firm with inflected and it will indicate a wrong financial position. The data therefore must be absolutely correct.

Effect of price level changes:Price level change often made the comparison of different amounts difficult over a period of production, sales and also the value of assets. Therefore it is necessary to made proper adjustment for price changes before any comparison.

14

Qualitative factors are ignored:Ratio analysis is a technique of qualitative analysis and this ignores qualitative factors which may be important in decision making .e.g.:- average collection period may be equal to standard credit period put for some debtors may be in the list of doubtful list which is not disclose by ratio analysis.

Effect of window dressing:In order to cover up their head financial position, some companies use window dressing. They may record the accounting data according to financial position of a company in a better way.

Costly technique:Ratio analysis is a technique and can be use by big business houses. Small business units are not able to afford it.

Miss leading results:In absence of absolute data, the result may be misleading. E.g.:-the gross profit of two firms is 25% where as the profit earned by one company is just 5000RS and sales are 20,000 RS and profit earned by the other one is 10,000RS and sales are 40,00,000RS even he profitability of the 2 firms is same but the magnitude of their business is quite different.

Absence of standard universally expected technology:There are no standard ratios which are universally accepted for comparison purpose. As such the significant of ratio analysis technique is reduced. 15.

CLASSIFICATION OF RATIO:As per the requirement of various users (for e.g.:-short term creditors, long term creditors, management, investors) we can classify ratio into following group.

Traditional Classification:1. Revenue Statement Ratios 2. Balance Sheet Ratios 3. Composite Ratios

Functional Classification:1. Liquidity Ratios 2. Profitability Ratios 3. Leverage Ratios or Structural Ratios 4. Activity Ratios or Efficiency Ratios

16.

3.2

Profitability Ratios:-

PROFITABILITY RATIO
NIN RELA TION TO RELATION TO SALES SALES
IN RELATION TO INVESTMENTS

1. G.P Ratio 2. N.P Ratio 3. Expenses Ratio 4. Operating Ratio

1. Return on Capital Employed 2. Return on Shareholders Fund 3. Return on Eq shareholders fund 4. Return on Eq share capital 5. Earning per share 6. Dividend per share 7. Price earning ratio 8. Dividend yield ratio

17.

3.2.1 GROSS PROFIT

MEANING:It is the basic measure of profitability of business. It expresses relationship between gross profit earned to net sales.

FORMULA:
This ratio is calculated by dividing the gross profit by the net sales. It is expressed in percentage (%).It form of formula this ratio may be expressed as under

GROSS PROFIT = GROSS PROFIT * 100 SALES CALCULATION:PARTICULARS GROSS PROFIT SALES RATIO (%) 2007-08 98.03 496.56 19.74% 2008-09 86.52 572.89 15.10%
(in crores)

2009-10 129.12 546.94 23.78%

18.

INTERPRETATION:This ratio indicate an average gross margin earn on a sale of 100 rupees. The limit beyond which fall in sales prices will definitely result in losses. In 2008 the profit is 19.74%, but in 2009 it is 15.10% and in 2010 it is 23.78%. So we can say that as compared to 2009, 2008 has more profit .But as compared to both the years 2010 has more profit which is 23.78%.

3.2.2

NET PROFIT RATIO:-

MEANING:This ratio measures the relationship between net profit and net sales.

FORMULA:This ratio is calculated by dividing the net profit by net sales. It is expressed as (%). In the form of a formula this ratio may be expressed as under

NET PROFIT RATIO: - NET PROFIT * 100 SALES

19.

CALCULATION:PARTICULARS NET PROFIT SALES RATIO (%) 2007-08 62.59 496.56 12.60% 2008-09 57.67 572.89 10.07%

(in crores) 2009-10 84.30 542.94 15.53

INTERPRETION:This ratio indicates an average net margin earned on a sale of 100 rupees. In the above table we can see that in the year 2008 the Net profit is 12.06%, in 2009 is 10.07%, and in 2010 it is 15.53%. So we can say that as compared to 2008 and 2009, in 2010 it has more net profit which shows good economic condition of the company.

3.2.3

EXPENSES RATIO:-

MEANING:It shows the relationship between operating expenses and net sales.

FORMULA:EXPENSES RATIO = EXPENSES SALES

20.

CALCULATION:PARTICULARS EXPENSES SALES RATIO (%) 2007-08 407.47 496.56 82.06 2008-09 497.87 572.89 86.90

(in crores) 2009-10 426.71 542.94 78.59

INTERPRETATION:This ratio indicates net expenses on a sale of 100 rupees. The above table indicate that the total expenses in 2008 is 1.32%, 2009 is 1.64% and in 2010 is 2.07%.As compared to 2008 and 2009 the expenses occurred in 2010 is much more.

3.2.4 OPERATING RATIO:-

MEANING:This ratio measures a relation between operating cost and net sales.

FORMULA:This ratio is calculated by dividing the operating cost by net sales. This ratio is expressed as % .In the form of a formula this ratio may be expressed as under. 21.

OPERATING RATIO= COST OF GOODS SOLD + OPERATING EXP* 100 NET SALES

CALCULATION:PARTICULARS OPERATING EXP+COGS SALES RATIO (%) 2007-08 398.16 2008-09 497.94

(in crores) 2009-10 428.61

496.56 80.18%

572.89 86.92%

542.94 78.94%

INTERPRETATION:This ratio indicates an average operating cost incurred sales on goods worth rupees 100.Lower the ratio greater is the operating profit to cover the operating expense to pay dividend and to create reserve and vice-versa. In the above table we can see that the operating exp. In the year 2008, 2009 and 2010 are respectively 80.18%, 86.92%, 78.94%.From the above analysis we can say that as compared to 2008 and 2009, 2010 has less OPERATING EXP which is really good. Therefore the company can make more profit. 22.

3.2.5 RETURN ON INVESTMENT / CAPITAL EMPLOYED:MEANING:This ratio measures a relationship between net profit before interest and tax and capital employed.

FORMULA:This ratio is calculated by dividing net profit before interest and tax by capital employed. It is expressed as % in the form of a formula this ratio may be expressed as under. RETURN ON CAPITAL EMPLOYED=NET PROFIT *100

Capital employed

CALCULATION:PARTICULARS 2007-08 2008-09 85.62

(in crores) 2009-10 126.03

NETPROFIT(BEFORE 94.9 INT. & TAX) CAPITAL EMPYOYED RATIO (%) 201.35

259.19

318.44

47.13%

33.03%

39.57% 23

INTERPRITATION:This ratio indicates the ability of the firm higher the ratio the more efficient the mgt and utilization of capital employed. In the above table we can see that the return on capital employed in 2008, 2009, and 2010 is respectively 47.13%, 33.03%, 39.57%. As compared to 2009 and 2010 the return on Capital employed is more which shows that the returns and profit have decreased.

3.2.6

RETURN ON SHARE HOLDERS FUND :-

MEANING:This ratio measures a relationship between net profit after tax, interest, and equity share holders fund.

FORMULA:This ratio is computed by dividing the net profit after interest and tax by equity share holders fund. It is expressed as a %. In the form of formula this ratio may be expressed as under:-

RETURN ON EQUITY SHARE HOLDERS FUND = NET PROFIT AFTER INTEREST, TAX AND PREFERENCE DIVIDEND*100 SHARE HOLDERS FUND 24.

CALCULATION:PARTICULARS NET PROFIT(AFTER INTEREST& TAX AND PREFERENCE DIVIDEND) SHARE HOLDREFUND RATIO (%) 2007-08 94.9 2008-09 85.62

(in crores) 2009-10 126.03

201.35

259.19

318.44

47.13%

33.03%

39.57%

INTERPRETATION:This ratio indicates the firms ability of generating profit per rupee of equity share holders fund. Higher the ratio the more efficient the management and utilization of equity share holders fund.In the above graph we can see that the equity share holders fund in 2008, 2009and 2010 is 47.13%, 33.03%, 39.57.This shows that the company have not worked as efficiently as in 2008.

25.

3.2.7

RETURN ON Eq SHARE CAPITAL:

MEANING:The ratio indicates profitability of a firm from the view point of real owners who are ordinary shareholder, who bear all the risks of business.

FORMULA:This ratio is calculated by dividing Profit after tax and Pref Dividend by Eq share capital.

RETURN ON Eq SHARE CAPITAL= PAT PREF DIVIDEND

*100

EQUITY SHARE CAPITAL

CALCULATION:PARTICULARS 2007-08

(in crores) 2008-09 57.67 2009-10 84.30

NETPROFIT(AFTER 62.59 TAX) Eq share Capital Pref Dividend RATIO 20 0 312.95%

20 0 288.35%

20 0 421.50% 26.

INTERPRETATION:This ratio indicates the firms ability of generating profit per rupee of equity share capital fund. Higher the ratio the more efficient the management and utilization of equity share capital fund. In the above table we can see that the equity share holders fund in 2008, 2009and 2010 is 312.95%, 288.35% and 421.50%. As compared to other two years company has earned maximum returns in 2010.

3.2.8

RETURN ON Eq SHARE HOLDER FUND:-

MEANING:This ratio measures a relationship between net profit after tax, interest, and equity share holders fund.

FORMULA:
This ratio is computed by dividing the net profit after interest and tax by equity share holders fund. It is expressed as a %. In the form of formula this ratio may be expressed as under:-

RETURN ON EQUITY SHARE HOLDERS FUND = NET PROFIT AFTER INTEREST, TAX -- PREFERENCE DIVIDEND*100 SHARE HOLDERS FUND 27.

CALCULATION:PARTICULARS 2007-08

(in crores) 2008-09 57.67 2009-10 84.30

NET 62.59 PROFIT(AFTER INTEREST& TAX ) SHARE HOLDREFUND PREF DIVIDEND RATIO (%) 226.35

284.19

343.49

0 27.65%

0 20.29%

0 24.54%

INTERPRETATION:This ratio indicates the firms ability of generating profit per rupee of equity share holders fund. Higher the ratio the more efficient the management and utilization of equity share holders fund. In the above table we can see that the equity share holders fund in 2008, 2009and 2010 is 27.65%, 20.29%,24.54%.As we see that as compared to 2009 and 2010, 2008 has made more returns on Eq share holder Fund. Therefore companys profit have decreased as compared to 2008.

28.

3.2.9 EARNING PER SHARE:MEANING:This ratio measures the profit earnings available to equity share holder on per share basis.

FORMULA:This ratio is calculated by dividing the net profit after interest, tax and preference dividend by the no. of equity share .It is expressed as an absolute figure. In the form of a formula this ratio may be expressed as under. EARNING PER SHARE = NET PROFIT AFTER TAX - PERFERENCE DIV. NO. OF EQUITY SHARES

CALCULATION:PARTICULARS 2006-07 2007-08 57.67

(in crores)
2008-09 84.30

NETPROFIT(AFTER 62.59 TAX) NO. OF EQUITY SHARES PREF DIVIDEND RATIO(Rs) 31.30 2

0 28.84

0 42.15 29.

INTERPRETATION:In general higher the ratio better it is the company and vice versa. In the above table we can see that E.P.S in the yr 2008,2009 and 2010 is 31.30, 28.84, 42.15. So we can say that as compared to 2008 and 2009 EARNING PER SHARE of 2010 is higher which shows that the earning available to equity share holder are sufficient.

3.2.10 DIVIDED PER SHARE:MEANING:This ratio measures a relationship between dividend and no. of equity share.

FORMULA:This ratio is calculated by dividing dividend paid to equity shareholder by no. of equity shares .It is expressed as absolute figure. In the form of a formula this ratio can be expressed as under

DIVIDEND PER SHARE = DIVIDEND PAID TO EQUITY SHARE HOLDER NO OF EQUITY SHARE

30.

CALCULATION:PARTICULARS DIV PAID TO EQUITY S.H NO. OF EQUITY SHARE RATIO 2007-08 0 2008-09 0

(in crores) 2009-10 0

20

20

20

INTERPRETATION :The company donot have Dividend so the ratio cannot be calculated.

3.2.11

PRICE EARNING RATIO:-

MEANING:It shows the relationship between the market price of the share and the earnings per share.

FORMULA:PRICE EARNING RATIO= MARKET VALUE PER SHARE EARNING PER SHARE

31.

CALCULATION:PARTICULARS MARKET VALUE PER SHARE EARNING PER SHARE RATIO 2007-08 0 2008-09 0

(in crores) 2009-10 0

Interpretation:Market value is not available so the ratio cannot be calculated.

3.2.12

DIVIDEND YEILD RATIO:-

MEANING:This ratio measures a relationship between dividend and no. of equity share.

FORMULA:This ratio is calculated by dividing dividend paid to equity shareholder by no. of equity shares .It is expressed as absolute figure. In the form of a formula this ratio can be expressed as under. DIVIDEND PER SHARE = DIVIDEND PAID TO EQUITY SHARE HOLDER NO OF EQUITY SHARE 32

CALCULATION:PARTICULARS DIV PAID TO EQUITY S.H NO. OF EQUITY SHARE RATIO 2006-07 0 2007-08 0 2008-09 0

20

20

20

INTERPRETATION:-No Dividend is available of the company so the ratio cannot be calculated.

3.3

ACTIVITY / TURNOVER RATIO

3.3.1 OVERALL TURNOVER RATIO:MEANING:The ratio signifies the efficiency of the sales is the turn over. The objective of computing this ratio is to determine efficiency with which company can use.

FORMULA:OVERALL TURNOVER RATIO = NET SALES CAPITAL EMPLOYED 33.

CALCULATION:PARTICULARS SALES CAPITAL EMPLOYED RATIO(IN TIMES) 2006-07 496.56 201.35

(in crores) 2007-08 572.89 259.19 2008-09 542.94 318.49

2.47

2.21

1.10

INTERPRETATION:For any company more turnover gives more returns and it is important to known it. In the year 2008,2009 and 2010 the turnover is 2.47,2.21, 1.10 .From this we can clearly see that the turnover ratio in 2008 is good but it decreases in 2009 and 2010.

3.3.2 FIXED ASSET TURNOVER:MEANING:To ascertain the efficiency and profitability of the business, the total fixed assets are computed to sales.

FORMULA:FIXED ASSET TURNOVER = SALES FIXED ASSETS 34.

CALCULATION:PARTICULARS SALES(IN CRORES) FIXED ASSETS RATIO(IN TIMES) 2006-07 496.56

(in crores) 2007-08 572.89 2008-09 542.94

83.53 5.94

86.79 6.60

83.35 6.51

INTERPRETATION:As shown in the above table the FICED ASSETS TURNOVER for the years 2008,2009 and 2010 are 5.94, 6.60, 6.51. From the data we can clearly clarify that as compared to two year 2009 has higher turnover.

3.3.3

DEBTORS RATIO:-

MEANING:This ratio establishes a relationship between debtors and bills receivable with average daily sales.

FORMULA:This ratio is calculated by dividing debtors and bills receivable by net credit sales. This ratio is usually expressed as x no. of days. As a form of a formula it can be expressed as under. 35.

DEBTORS RATIO = DEBTORS+BILLS RECEIVABLE * 365 NET CREDIT SALE

CALCULATION:
PARTICULARS DEBTORS+BILLS REC. NET CERDIT SALES RATIO(IN DAYS) 2007-08 64.71 2008-09 56.96

(in crores) 2009-10 73.46

496.56

572.89

542.94

48

36

49

INTERPRETATION:This ratio shows average collection period for credit sales.In the above table the time period allowed to the debtors is respectively 48days, 36days, 49days.

3.3.4 DEBTORS TURNOVER RATIO:MEANING:The debtors turnover suggests the number of times the amount of credit sales is collected during the year. 36.

FORMULAS:DEBTORS TURNOVER RATIO = NO. OF DAYS DEBTORS RATIO

CALCULATIONS:
PARTICULARS NO. OF DAYS DEBTORS RATIO RATIO(IN TIMES) 2007-08 365 48 7.60 2008-09 365 36 10.14

(in crores)
2009-10 365 49 7.45

INTERPRETATION:This ratio show the no. of times the turnover of the company. In 2008, 2009 and 2010 the Debtors Turnover ratio is 7.60,10.14,7.45 times.

3.3.5 CREDITORS RATIO:MEANING:This ratio establishes a relationship between creditors and bills payable and average daily credit purchase. 37.

FORMULA:This ratio is calculated by dividing the creditors and bills payable by net credit purchase. This ratio is usually expressed in x no of days. CREDITORS RATIO = CREDITORS+BILLS PAYABLE*365 NET CREDIT PURCHASE

CALCULATION:PARTICULARS CREDITORS+BILLS PAYABLE NET CREDIT PURCHASE RATIO(DAYS) 2007-08 60.28

(in crores) 2008-09 33.38 2009-10 63.68

354.30

424.76

355.03

62

29

65

INTERPRETATION:This ratio shows an average time period for which the credit purchase remain outstanding. Creditors ratio for the year 2008,2009 and 2010 is 62days,29days,65days.

38.

3.3.6 CREDITORS TURNOVER RATIO:MEANING:The creditors turnover suggests the number of times the amount of credit purchase is collected during the year.

FORMULA:CREDITORS TURNOVER RATIO := NO. OF DAYS CREDITORS RATIO

CALCULATION:PARTICULARS NO. OF DAYS CREDITORS RATIO RATIO(IN TIMES) 2007-08 365 62 2008-09 365 29

(in crores) 2009-10 365 65

5.89

12.59

5.61

INTERPRETATION:In the above table shows that the is good growth in creditors ratio from 2008 to 2009, but there is decrease in 2010 which decreases the profit. 39.

3.3.7

stock turnover ratio:

MEANING:This ratio establishes a relationship between costs of goods sold and average inventory.

FORMULAS:
This ratio is calculated by dividing the cost of goods sold by average stock .This ratio is usually expressed as no. of times. In the form of a formula this ratio may be expressed as under

STOCK TURN OVER RATIO = COST OF GOODS SOLD AVERAGE STOCK

CALCULATIONS:-

A. Cost of goods sold which is calculated as under Opening stock+ net purchase+ direct expense-closing stock Or cost of goods sold=net sales-gross profit B. Average stock= opening stock + closing stock 2

40.

Calculation
PARTICULARS CO.O.G.S AVERAGE STOCK RATIO(IN TIMES) 2007 398.53 15.82 25.19 2008 486.37 15.52 31.34

(in crores) 2009 413.82 11.05 37.45

INTERPRETATION:It indicates the speed with which inventory is converted into sales. A high ratio indicates efficient performance of the company. In the above graph we can see that the stock turn over in the yr 2008, 2009 and 2010 is respectively 25.19, 31.34 and 37.45. So we can say that in the yr 2010 the stock turnover is effective which indicates the inefficient performance of the company.

3.3.8 WORKING CAPITAL TURN OVER: MEANING:This ratio establishes a relationship between the sales and working capital. 41

FORMULA:This ratio is calculated by dividing the net sales by the working capital. This ratio usually expressed as NO of times. In the form of formula, this ratio may be expressed as under

WORKING CAPITAL TURN OVER RATIO = NET SALES WORKING CAPITAL

CALCULATIONS:PARTICULARS NET SALES WORKING CAPITAL RATIO(IN TIMES) 2008 496.56 67 7.41

(in crores) 2009 572.89 71.01 8.07 2010 542.94 57.62 9.42

INTERPRETATION:This ratio indicates the firms ability to generate sales per rupee of working capital. In general higher the ratio, the more efficient the management and utilization of working capital and vice-versa. In the above graph W.C. turnover ratio in yr 2008, 2009 and 2010 is 7.41, 8.07 and 9.42 respectively which shows the efficient management of the co. 42.

3.3.9 BOOK VALUE PER SHARE:MEANING:This ratio establishes a relationship between share capital, reserve and surplus with no. of equity shares.

FORMULA:This ratio is calculated by dividing equity share capital reserve and surplus by no. of equity shares. It is expressed as an absolute figure. In the form of a formula this ratio is expressed as under.

BOOK VALUE PER SAHRE = EQUITY SAHRE CAPITAL+R&S NO. OF EQUITY SAHRES

CALCULATION:PARTICULARS EQUITY S.CAPITAL+R&S NO. OF EQUITY EQUITYSHARES RATIO 2007-08 226.35 2008-09 284.19

(in crores) 2009-10 343.49

113.175

142.095

171.75 43.

INTERPRETATION:In general higher the ratio the better it is. From the above graph we can see that book value per share is increasing from 113.175 to 142.095 to 171.75 which show the higher amount of profitability of the company.

3.4

LIQUIDITY RATIOS

3.4.1

CURRENT RATIO:-

MEANING:This ratio establishes a relationship between current assets and current liabilities.

CURRENT ASSETS:The assets which can be converted into cash within a period of a year are known as current assets. E.g. cash balance, marketing security, bills receivable, prepaid expense, advance payment of cash ,bank balance, debtors, all type of stock i.e. raw material , work in progress , finished goods, income due but not received.

44.

CURRENT LIABLITIES:
This means liabilities which are accepted to be mature within a year and included following: - creditors, bills payable, short term loans, advances, provision for tax, bank over draft, income received in advance, unclaimed dividend .

FORMULA:This ratio is calculated by dividing current assets by current liabilities. This ratio is usually expressed as a pure ratio. In the form of the formula this ratio may be expressed as under.

CURRENT RATIO =

CURRENT ASSETS CURRENT LIABLITIES

CALCULATIONS:PARTICULARS 2008

(in crores)
2009 110.20 39.19 2010 126.47 68.85

CURRENT ASSETS 135.21 CURRENT LIABLITIES RATIO(IN PROPOTION) 68.21

1.98

2.81

1.84

45.

INTERPRETATION:This ratio indicates availability of current assets to pay current liabilities. Traditionally a current ratio of 2:1 is considered to be a satisfactory ratio. In the above graph we can see that current ratio in 2008,2009 and 2010 is respectively 1.98,2.81 and 1.84 which shows that the liquidity position of the company is satisfactory at present.

3.4.2

LIQUID RATIO:-

MEANING:This ratio establishes relationship between Liquid assets and liquid liabilities.

FORMULA:This ratio is calculation by dividing liquid assets by liquid liabilities. This ratio is usually expressed as a pure ratio.

LIQUID RATIO= CURRENT ASSETS - STOCK CURRENT LIABLITIES-B.O.D

46.

CALCULATION:PARTICULARS LIQUID ASSETS STOCK LIQUID LIABLITIES-BOD RATIO(IN PROPOTION) 2007-08 113.88 2008-09 100.49

(in crores)
2009-10 114.09

68.21

39.19

68.85

1.67

2.56

1.66

INTERPRETATION:This ratio indicates rupees of liquid assets available for each rupee of liquid liabilities. Ideal liquid ratio is 1:1. In the above graph we can see that the liquid ratio in 2008, 2009 and 2010 is respectively 1.67,2.56,1.66.so, we can say that the liquid ratio has been decreased in the yr 2009 which is not efficient condition for the company.

47.

3.4.3 QUICK RATIO/ ACID RATIO/LIQUID RATIO:MEANING:This ratio establishes relationship between quick assets and quick liabilities.

QUICK ASSETS:Which means those current assets which can be converted into cash immediately or short notice and include the following:- cash balance, marketing security, bills receivable, bank balance, debtors, short term loans and advances or Quick assets =current assets stock

QUICK LIABLITIES:Which include all current liabilities except bank over draft i.e.:-current liabilities bank over draft.

FORMULA:QUICK ACID TEST RATIO :QUICK ASSETS LIQUID LIABILITIES

48.

CALCULATION:PARTICULARS LIQUID ASSETS STOCK LIQUID LIABLITIES-BOD RATIO(IN PROPOTION) 2007-08 7.86

(in crores)
2008-09 5.55 2009-10 10

68.21

39.19

68.85

0.12

0.14

0.15

INTERPRETATION:This ratio indicates rupees of Quick assets available for each rupee of liquid liabilities. Ideal liquid ratio is 1:1. In the above graph we can see that the liquid ratio i 2008,2009 and 2010 is respectively 0.12, 0.14, 0.15.so, we can say that the liquid ratio has been decreased in the yr 2010 which is efficient condition for the company.

49.

3.5
3.5.1

LEVERAGE RATIO:PROPRITORY RATIO:-

MEANING:This ratio measures the relationship between share fund and total assets of the company. holders

FORMULA:This ratio is computed by dividing share holders funds by total assets it is expressed as %.

PROPRIETORY RATIO= PROPRITERS FUND*100 NET ASSETS

CALCULATIONS:PARTICULARS 2007-08 2008-09 284.19

(in crores)
2009-10 368.49

SHARE HOLDERS 226.35 FUND NET ASSETS RATIO (%) 239.46 94.53

298.13 95.32

382.43 96.35

50.

INTERPRETATION:This ratio indicates the assets of the firm purchase out of owners funds. From the above table we can see that the proprietary ratio was very high is the yr 2010 but in 2008 & 2009 it declined, which shows that the owners fund is enough at present.

3.5.2 DEBTH EQUITY RATIO MEANING:This ratio establishes a relationship between long term debts and share holders funds .

FORMULA:This ratio is calculated by dividing the long term debt of the firm by the share holders fund. This ratio is usually expressed as the pure ratio e.g.:- 2:1.

DEBT EQUITY RATIO= LONG TERM DEBTS*100 SHARE HOLDERS FUND

51.

CALCULATION:PARTICULARS LONG TERM DEBTS S.H S FUND RATIO(%) 2007-08 0 2008-09 0

(in crores)
2009-10 0

226.35 94.53

284.19 95.32

368.49 96.35

INTERPRETATION:This ratio indicates the margin of safety to long term creditor.Lower the ratio larger safety margin of creditors.

3.5.3 CAPITAL GEARING RATIO:MEANING:This ratio expresses the proportion of preference capital + debentures and ordinary capital.

FORMULA:
CAPITAL GEARING RATIO = FIXED INTEREST BEARING CAPITAL*100 ORDINARY CAPITAL

52.

CALCULATION:PARTICULARS FIXED INT BEARING CAPITAL ORDINARY CAPITAL RATIO(TIMES) 2007-08 0 2008-09 0

(in crores)
2009-10 0

20

20

20

INTERPRETATION:Company donot have fixed interest bearing capital.

3.5.4 LONG TERM FUND TO FIXED ASSETS MEANING:This ratio measures a relationship between long term funds to fixed assets.

FORMULA:This ratio is computed by dividing share holders fund & long term debts by fixed assets. This ratio is expressed as pure ratio. Ideal is 1:1.The formula is as under. 53.

LONG TERM FUNDS TO FIXED ASSETS = LONG TERM FUND*100 FIXED ASSETS

CALCULATION:
PARTICULARS LONG TERM FUND FIXED ASSETS RATIO(%) 2007-08 201.56 2008-09 259.19

(in crores)
2009-10 318.49

83.53 2.41

86.79 2.99

83.35 3.82

INTERPRETATION:Fixed assets should be purchased from long term capital. In the above table we can see that the fixed assets as compare to long term fund is more than 2008 and 2009, but in the yr 2010 which shows that the long term funds have been properly utilized.

3.6 COVERAGE RATIO

3.6.1 INTEREST COVERAGE RATIO: MEANING:This ratio is useful to know if the firm has sufficient profit its liability or interest. 54.

FORMULAS:This ratio is calculated by dividing earnings before interest and tax by interest. It can be shown in the form of a formula as under.

INTEREST COVERAGE RATIO = EARNING BEFORE INTEREST & TAX INTEREST

CALCULATION:PARTICULARS EARNINGBEFORE (INT.&TAX) INTEREST RATIO(TIMES) 2007-08 102.28 2008-09 93.19

(in crores)
2009-10 133.93

1.24 82.48

0.89 104.71

0.73 183.47

3.6.2 DEBT EQUITY RATIO :MEANING:This ratio establishes a relationship between long term debts and share holders funds

FORMULA:This ratio is calculated by dividing the long term debt of the firm by the share holders fund. This ratio is usually expressed as the pure ratio e.g.- 2:1. 55.

DEBT EQUITY RATIO=

EBDIT INSTALLMENT OF + INTEREST

PRINCIPLE TO BE REPARED THIS YEAR

CALCULATION:
PARTICULARS EBDIT PRINCIPEL+INT RATIO 2007-08 102.28 1.24 82.48 2008-09 93.19 0.89 104.70

(in crores)
2009-10 133.93 0.73 183.47

INTERPRETATION :This ratio indicates the margin of safety to long term creditor.Lower the ratio larger safety margin of creditors. In the above graph we can see that the debt service coverage ratio in 2008, 2009 and 2010 is respectively 82.48, 104.70 and 183.47 so, it is low in 2010 so it shows the safety margin form creditors. 56.

CHPT-4 ACCOUNTING POLICIES AND NOTES

NOTES OF ACCOUNTS

1.

SIGNIFICANT ACCOUNTING POLICIES:

Basis of accounting
The financial statement have been prepared on accrual basis to comply in all material respects with the Generally Accepted. Accounting Principles in India and the relevant provisions of the Companies Act 1956.

Revenue recognition
Revenue is recognised when significant risk and rewards of ownership of the goods sold are transferred to customers. Revenue in respect of contracts for service is recognised on completion of services.

Employee benefit
The compy contributes to Provident fund, pension fund and employees deposit.

57.

2. CONTINGENT LIABILITIES
Letter of credit opened by the bankers in favour of suppliers amounting to Rs 5.40crore. Estimated amount of contracts remaining to be executed on capital accounts of 3.28 crore.

3. Estimated amount of contracts remaining to be executed on capital accounts of Rs 3.28 crore 4. Expenditure on Repairs and maintenance

Wages and salaries Consumption of stores Other Total

3.16 2.58 0.03 8.63

5. Employment benefit obligations The compy offers its employees defined benefit plans in the form of gratuity schemes. Gratuity scheme covers all employees as statutorily requirements under payment of Gratuity Act .

6. Loans and advances to staff including :- Housing Loans, LAT advance etc. The maximum amt o/s during the year was 0.711 crore. 58.

7. The micro and small enterprises to whom amt is o/s as at the year and requiring disclosure of the companies act 1956. 8.Research and development expenditure of Rs 0.14 crore

9. Earning per share

2009 PAT Weighted avg no. of Eq Nominal value Basic and diluted earning per share 28.84 57.67 20 10

2010 84.30 20 10

42.15

59.

Chpt :-5 Directors report

The directors Sesa Industries ltd have pleasure in presenting the nineteenth annual report along with the audited balance sheet & P&L Account for the year ended on 31st march, 2010.

Appropriation of profit
In the view of pending merger of the company with Holding Company, Sesa Goa ltd the board of directors have decided to recommend any dividend for the year 2009-2010 nor to transfer any amount to General Reserve.

Operations
The Demand and the Price levels remained subdued over most of the year. Sesa industries ltd focused on higher production and volume sales to offset difficult market conditions.

On the raw materials front:

There was scarcity in availability of the IRON ORE in the last quarter of year due to disclosure of mines in Karnataka and non availability of railway rakes.In order to push production the company relied on its in house technology capability. 60

Outlook
Going forward, while demand is expected to be buoyant, especially from the auto sector , engineering goods sector and the pump, price movements of the key raw materials could hamper profitability growth.

Quality/Environment/ISO and safety Certificate

The certifications under ISO for Quality management, Environment Management and safety Management respectively have been maintained.

Awards
Sesa Industries received (CII) by Godrej Green Business center, National Award for Excellence in Water Management in 2009 as WATER EFFICIENT UNIT. Sesa industries ltd won International Safety Awaed for 2009 by British Safety Council. Sesa Industries ltd also won the corporate Social Responsibility Award in Environment category from Green Triangle Society.

Safety :-The FSI is an index , which considers both the frequency

rate of accidents and severity rate of accidents. 61.

Chpt 6 Auditors reports 1. Name of Auditors:

- SANJIV .V. PILGAONKAR
They have audited the attached balance sheet of the SESA INDUSTRIES LIMITED as at 31st March, 2010 and also the Profit & loss Account and Cash flow statement for the year ended on that date annexed there to. These financial statements are the responsibility of the companys management. They conducted the audit in accordance with auditing standards generally accepted in India. Those standards require that they plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. They believe that our audit provides a reasonable basis for our opinion. As the requirement by the companies order, 2003(CARO) issued by the central Government of India in terms of Section 227<4A> of the Companies Act, 1956 they enclose in Annexure a statement on matters specified in paragraphs 4 and 5of CARO.

62.

Further to their comments in the Annexure referred to in paragraph 3 above, they report that

a) They have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit. b) In their opinion, proper books of accounts as required by law have been kept by the company as far as appears from our examinations of other books. c) The Balance sheet and also the Profit & loss Account and Cash flow statement dealt with by this report are in agreement with the books of Account. d) In their opinion, the Balance sheet and Profit and Loss A/c dealt with by this report comply with the accounting standards referred in sub section (3C) of section 211 of the Companies Act, 1956. d) On the basis of written representation received from directors and taken on record by the board of Directors, in the board meeting, none of the directors of the Company is disqualified from being appointed as a director under clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

63.

f) In their opinion and to the best of their information and according to the explanations given to us, the accounts read with the notes thereon, and subject to third party confirmations, gives the information required by the Companies Act, 1956 in the manner so required and give a true & fair view of and in conformity with accounting principles generally accepted in India:g) In the case of the Balance sheet, of the state of affairs of the company as at 31st March,2009. h) In the case of Profit & loss Account of the profit of the company for the year ended on that date.

i)

In the case of cash flow statement of the cash flows for the year ended on that date.

Thus the report is not a qualified report.

64

COMMON SIZE

STATMENT OF

1) PROFIT & LOSS 2) BALANCE SHEET

 Meaning of commonsize statement:The method discussed so far do not provide any common base with which all items in each statement can be compared. For this purpose common size statement are prepared in which all items are compared with one common item. For example in income statement of profit and loss account sales may be taken as 100 and all other item in the statement are computed as presentence of sales. Similarly in case of balance sheet the relation of each item to total assets is computed. When financial statements are presented in this way, they are called common sized statement or 100% statement.

COMMONSIZE STATEMENT OF PROFIT AND LOSS:MEANING:In the common size income statement, the sales as 100 and all individual items of expenses and incomes are shown as % of sales. The common size statement gives useful proportions of each component to the total. But they alone are not of much use, as they do not give information about the trends of individual items from year to year. 65.

COMMON SIZE STATEMENT OF PROFIT AND LOSS:

(in crores)
Particulars Sales (-)ocean exp 2008 496.56 0.17 496.39 (+) Services (+) other inc Net sales (COGS) G.P (-) Adm. Exp (-) DEPRI PBIT (-) INT PBT (-) TAX PAT 7.78 4.34 508.51 398.53 109.98 7.70 7.38 94.9 1.24 93.66 31.07 62.59 2009 572.89 0.32 572.57 10.54 7.06 590.17 486.37 103.80 10.61 7.51 85.62 0.89 84.13 27.06 57.67 2010 542.94 0.08 542.86 8.54 8.51 559.91 413.82 146.09 12.16 7.90 126.03 0.73 125.30 41 84.30 % 100 0.03 99.97 1.57 0.87 102.41 80.26 22.15 1.55 1.49 19.11 0.25 18.86 6.26 12.60 % 100 0.06 99.94 1.84 1.23 103.02 84.90 18.12 1.85 1.32 14.95 0.16 14.69 4.72 10.07 % 100 0.01 99.99 1.57 1.57 103.13 76.22 26.91 2.24 1.46 23.21 0.13 23.08 7.55 15.53

66.

Interpretation:
In sales, expenditure, manufacturing expenses, finance expenses, profit before extraordinary items, debenture redemption reserve, general reserve, balance profit carried to balance sheet, changes (increase or decrease) in absolute term and relative term are same. In depreciation, differed tax, current tax, fringe benefit tax, balance profit from the last year, proposed dividend, interim dividend, corporate dividend tax thereon, earning per share, changes (increase or decrease) in absolute term and relative term are not same. In VRS compensation there is increase in absolute by 84.51mn. to 127.37mn. term but no any changes in relative term it is same at 0.16%. In general reserve there is no any change in absolute term but decrease in relative term in 2008 to 2009 to 2010 by 1.69% to 1.38% to 1.28% respectively

COMMON-SIZE STATEMENT OF BALANCE SHEET: MEANING:In the balance sheet is taken as 100 and all items are presented as % of total assets as shown below. The balance sheet shows the % of each asset to the total assets as well as the % of each liability to the total liabilities. 67.

COMMON SIZE STATEMENT OF BALANCE SHEET

68.

Particulars Source of Funds Share Capital

2008

2009

2010

20 8.35%

20 6.71% 264.23 88.63% 284.23 95.34% 13.90 4.66% 298.13 100

20 5.23% 348.53 91.14% 368.53 96.37% 13.90 3.63% 382.43 100

(+) Reserve & surplus

206.56 86.26% 226.56 94.61%

(-) Diff Tax Liability

12.90 5.39%

TOTAL

239.46 100

Application of funds Fixed assets

GROSS BLOCK 130.53 52.57 (-) DEPRI NET BLOCK (-) Capital Work-in-plog 2.35 0.25 0.12 52.62 77.91 5.62 145.78 48.90 59.73 86.05 0.74 150.15 39.26 67.26 82.89 0.46

TOTAL

83.53 34.88

86.79 29.11 147.44

83.35 21.79 249.84

Investments Current Assets (Loans & Advances)

92.48

Inventory

54.00 22.55

43.49 14.59 56.96 19.11 5.55 1.86 4.20 1.41 110.20 36.96

38.53 10.08 73.46 19.21 10.00 2.61 4.48 1.17 126.47 33.07

Sundry Debtors

64.71 27.02

Cash & Bank Bal

7.86 3.28

Loans &Advances

8.64 3.61

Total

135.21 56.46

Current Liabilities & Provision Current Liabilities Provisions 68.21 3.55 1.48 39.19 7.11 2.38 68.85 8.38 2.19

Total

71.76

46.30

77.23

29.97 Net Current Assets 63.45 26.50 Total 239.46 100

15.53 63.90 21.43 298.13 100

20.19 49.24 12.88 382.43 100

Interpretation:
In unsecured loans , capital work-in-progress, investment, cash and bank balance, loans and advances, miscellaneous expenses, changes (increase or decrease) in absolute term and relative term are same. In capital, reserve and surplus, secured loans, differed tax liability, gross block, depreciation, net block, inventories, sundry debtors, liabilities, provisions, net current assets, changes (increase or decrease) in absolute term and relative term are not same.

69.

CHPT:- 8 CONCLUSION & FINDINGS

Ratio table:Particulars GROSS PROFIT RATIO 2008 19.74% 2009 15.10%

(in crores)
2010 23.78%

NET PROFIT RATIO EXPENSES RATIO OPERATING RATIO RETURN ON INVT/ CAPITAL EMPL RETURN ON SHARE HOLDERS FUND RETURN ON Eq SHARE CAPITAL

12.60%

10.07%

15.53%

1.32%

1.64%

2.07%

81.39%

86.92%

78.94%

47.13%

33.03%

39.57%

27.65%

20.29%

22.54%

312.95%

288.35%

421.50%

RATIO RETURN ON Eq SHARE HOLDERS FUND RATIO 27.65% 20.29% 24.54%

31.30 EARNING PER SHARE FIXED ASSET TURNOVER RATIO DEBTORS RATIO(IN DAYS) DEBTORS TURNOVER RATIO STOCK TURN OVER RATIO WORKING CAPITAL TURNOVER RATIO BOOK VALUE PER SHARE RATIO CURRENT 1.98 RATIO LIQUID 1.67 RATIO QUICK-ACID TEST 0.12 RATIO 48 7.60 5.94

28.84

42.15

6.60

6.51

36 10.14

49 7.45

25.19

31.34

37.45

7.41

8.07

9.42

113.175

142.095

171.75

2.81

1.84

2.56

1.66

0.14

0.15

PROPRITORY RATIO DEBTH Eq RATIO CAPITAL GEARING RATIO LONG TERM FUND TO F.A INTEREST COVERAGE RATIO DEBT SERVICE COVERAGE RATIO 82.48 CREDITORS RATIO 62 CREDITORS TURNOVER RATIO OVERALL TURNOVER RATIO 5.89 2.47 12.59 2.21 5.61 1.70 29 65 104.70 183.47 2.41 82.48 2.99 104.71 3.82 183.47 0 0 0 94.53 95.32 96.35

70 FINDINGS:
From the study of the company SESA INDUSTRIES LTD three years ratio I have come to that the financial position of the company is really good. By studying and comparing all the financial position of balance sheet and profit and loss I found that the company is in profit. G.P is high as compared to the three years and so as N.P. PBT is also in increasing so this shows that the company is in profit. Sales is in the increasing stage. The expenditure of the company goes down continuously. The return on capital employed is very high; which indicates the profitability is also very high. The companys solvency is satisfactory. So, it is good for the point of view of investors to invest in this company for the long term.

Conclusion

Analysis the three financial results of Sesa industries Ltd Company gave me a great exposure to the financial and general management function of the organization. I am sure my analytical; comprehension and writing presenting skill have improved. I will use the skills all across my management carrier and projects. I also found that ratios are very important point to analyze the company performance.

71.