Project Finance Main

7/29/2019 Project Finance Main

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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,


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Ahmedabad.

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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


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Date: 24/1 /2011

Acknowledgement

I am highly thankful to the management and staff ofSesa 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 Dixitfor their encouragement and theoffice staff for providing us all the facilities for making the visit more

learning oriented.

Dave . Vishva. D

Date: 24 / 1 /2011


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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 projecton SESA INDUSTRIES LTD. To study about such a

company was a great pleasure.


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INDEX

SR. NO. TOPIC PAGE NO.

1. Company profile 1

1.1 Name of organization 1

1.2 Registration Address of the company 1

1.3 Brief introduction of the activities 2

1.4 Status of the company in market 2

1.5 Special Achievements 3

1.6 Financial Highlights 5

1.7 Meaning and analysis and objective 6

2 Results of Operation

2.1 Profit of 3 years 7

2.2 Meaning and importance of Cash Flow 8

2.3 Cash Flow Statement of the company concerned 10

2.4 Conclusion 11

3. Ratio Analysis

3.1 Meaning,Importance,Limitation, and Classification of 12

Ratio Analysis.


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3.2 Profitable ratio 17

3.2.1 Gross Profit ratio 18

3.2.2 Net Profit Ratio 19

3.2.3 Expenses Ratio 20

3.2.4 Operating ratio 21

3.2.5 Return on Investment 23

3.2.6 Return on Share holder fund 24

3.2.7 Return on Eq Share Capital 26

3.2.8 Return on Eq shareholders Fund 27

3.2.9 Earning per share 29

3.2.10 Dividend per share 30

3.2.11 Price earning ratio 31

3.2.12 dividend yield ratio 32

3.3 Activity/Turnover Ratio

3.3.1 Overall turn over Ratio 33

3.3.2 Fixed Asset turnover Ratio 34

3.3.3 Debtors Ratio 35

3.3.4 Debtors turnover Ratio 36

3.3.5 Creditors Ratio 37

3.3.6 Creditors turnover Ratio 39


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3.3.7 Stock turnover Ratio 40

3.3.8 Working Capital turnover 41

3.3.9 Book value per share 43

3.4. Liquidity Ratio

3.4.1 Current Ratio 44

3.4.2 Liquid Ratio 46

3.4.3 Quick / Acid Test Ratio 48

3.5. Leverage Ratio

3.5.1 Proprietary Ratio 50

3.5.2 Debt Eq ratio 51

3.5.3 Capital gearing Ratio 52

3.5.4 Long term fund to F.A 53

3.6 Coverage Ratio

3.6.1 Interest Coverage Ratio 54

3.6.2 Debt Service Coverage Ratio 55

4 Accounting Policies and Notes 57

5 Directors Report 60

6. Auditors Report 62

7. Common Size Statement 65

8. Conclusion & Findings 69 & 71


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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.


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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.


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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 a30MW Power plant at Amona.

2006Dun & Bradstreet ranks Sesa Goa as the 4th best in the Indian

Mining Sector among India's top 500 companies

3.


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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.


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1.6 Financial Highlights

PROFIT OF THREE YEARS

(in crores)PARTICULAR 2008 2009 2010

NET PROFIT(%) 62.59 57.67 84.30

SALES OF THREE YEARS

(in crores)

PARTICULAR 2008 2009 2010

SALES 496.56 572.89 546.94

EPS OF THREE YEARS

EPS = PROFIT AFTER TAX - PERFERENCE DIV.NO. OF EQUITY SHARES

5.


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CALCULATION (In crores)

PARTICULARS 2007-08 2008-09 2009-10

NETPROFIT 62.59 57.67 84.30

NO. OF EQUITY

SHARES

2 2 2

RATIO 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.


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Chpt:- 2 RESULTS OF OPERATIONS

2.1 PROFIT OF 3 YEARS

GROSS PROFIT:- (in crores)

PARTICULARS 2007-08 2008-09 2009-10

GROSS PROFIT 98.03 86.52 129.12

NET PROFIT:- (in crores)

PARTICULARS 2007-08 2008-09 2009-10

NET

PROFIT

62.59 57.67 84.30

EBIT:- EARNING BEFORE INTEREST AND TAX (in crores)

PARTICULARS 2007-08 2008-09 2009-10

EBIT 94.9 85.62 126.03

7.


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EBT:- EARNING BEFORE TAX (in crores)

PARTICULARS 2007-08 2008-09 2009-10

EBT 93.66 84.73 125.30

EAT:- EARNING AFTER TAX (in crores)

PARTICULARS 2007-08 2008-09 2009-10

EAT 62.59 57.67 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.


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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 oflong 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.


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2.3 CASH FLOW STATEMENT OF THE COMPANY

PARTICULARS 2007-08 2008-09 2009-10

CASH FLOW FROM OPERATING ACTIVITY

NET PROFIT BEFORE TAX 93.66 84.73 125.30

AJUSTMENT FOR:

DEPRECIATION 7.33 7.57 7.90

PROVISION / DOUBTFUL DEBTS (0.13) 0.03 (0.03)

INTEREST/DIVIDEND (4.17) (6.76) (7.96)

PROFIT /LOSS ON SALES OF ASSETS (0.01) (0.03) 0.03

PROFIT /LOSS ON REDEMPTION OF INVTS _ (0.03) (0.09)

OPERATING PROFIT BEFORE WORKING

CAPITAL CHANGES:

96.73 85.51 125.15

ADJUSTMENTS FOR:

TRADE AND OTHER RECEIVABLES (4.48) 12.16 (16.75)

INVENTORIES (10.43) 10.51 4.96

TRADE PAYABLES AND OTHER LIABILITIES 25.92 (28.25) 30.06

CASH GENERATED FROM OPERATIONS 107.74 79.93 143.42

TAX PAID (27.97) (23.27) (40.13)

NET CASH FROM OPERATING ACTIVITIES 79.77 56.66 103.29


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10.

PARTICULARS 2007-08 2008-09 2009-10

CASH FLOW FROM INVESTING ACTIVITIES

ADDITION TO FIXED ASSETS (9.88) (10.83) (4.52)

PROCEEDS ON SALES OF FIXED ASSETS 0.01 0.03 0.03

PURCHASE /REDEMPTION OF CURRENT

ASSSETS

(70.57) (54.93) (102.31)

INTEREST RECEIVED 0.12 0.19 0.15

DIVIDEND RECEIVED 1.64 6.57 7.81

NET CASH USED IN INVESTING ACTIVITIEs (78.68) (58.97) (98.84)

CASH FLOW FROM FINANCIAL ACTIVITIES _ _

INTEREST PAID _ _

NET CASH USED IN FINANCIAL ACTIVITIES _ _

NET INC/ DEC IN CASH OR CASH

EQUIPMENTS

1.09 (2.31) 4.45

CASH AND CASH EQUIPMENTS AT THE

BEGINING OF THE YEAR

6.65 7.74 5.43

CASH AND CASH EQUIPMENTS AT THE END

OF THE YEAR

7.74 5.43 9.88

FOOTNOTES :-

CASH AND BANK BALANCE 7.86 5.55 10.00

LESS: UNPAID DIVIDEND ACCOUNT

CASH AND CASH EQUIPTMENTS AS PER

(0.12)

7.74

(0.12)

5.43

(0.12)

9.88


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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 2009as compared to 2008 but itremains 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.


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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.


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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 improvethem.

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.


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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.

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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, somecompanies 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.


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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.


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3.2 Profitability Ratios:-

N RELA TION TO SALES

1. G.P Ratio 1. Return on Capital Employed

2. N.P Ratio 2. Return on Shareholders Fund

3. Expenses Ratio 3. Return on Eq shareholders fund

4. Operating Ratio 4. Return on Eq share capital

5. Earning per share

6. Dividend per share

7. Price earning ratio

8. Dividend yield ratio

17.

PROFITABILITY

RATIO

IN RELATION TO SALES IN RELATION TO INVESTMENTS


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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:- (in crores)

PARTICULARS 2007-08 2008-09 2009-10

GROSS PROFIT 98.03 86.52 129.12

SALES 496.56 572.89 546.94

RATIO (%) 19.74% 15.10% 23.78%

18.


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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 isexpressed as (%). In the form of a formula this ratio may be

expressed as under

NET PROFIT RATIO: - NET PROFIT * 100

SALES 19.


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PARTICULARS 2007-08 2008-09 2009-10

NET PROFIT 62.59 57.67 84.30

SALES 496.56 572.89 542.94

RATIO (%) 12.60% 10.07% 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 profitwhich 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.


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PARTICULARS 2007-08 2008-09 2009-10

EXPENSES 407.47 497.87 426.71

SALES 496.56 572.89 542.94

RATIO (%) 82.06 86.90 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.


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

NET SALES


PARTICULARS 2007-08 2008-09 2009-10

OPERATING

EXP+COGS

398.16 497.94 428.61

SALES 496.56 572.89 542.94

RATIO (%) 80.18% 86.92% 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.

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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


PARTICULARS 2007-08 2008-09 2009-10

NETPROFIT(BEFOREINT. & TAX)

94.9 85.62 126.03

CAPITAL

EMPYOYED

201.35 259.19 318.44

RATIO (%) 47.13% 33.03% 39.57%

23


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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.


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PARTICULARS 2007-08 2008-09 2009-10

NET

PROFIT(AFTER

INTEREST& TAX

AND

PREFERENCE

DIVIDEND)

94.9 85.62 126.03

SHARE

HOLDREFUND

201.35 259.19 318.44

RATIO (%) 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.


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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


PARTICULARS 2007-08 2008-09 2009-10

NETPROFIT(AFTER

TAX)

62.59 57.67 84.30

Eq share Capital 20 20 20

Pref Dividend 0 0 0

RATIO 312.95% 288.35% 421.50%

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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.


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PARTICULARS 2007-08 2008-09 2009-10

NET

PROFIT(AFTER

INTEREST& TAX )

62.59 57.67 84.30

SHARE

HOLDREFUND

226.35 284.19 343.49

PREF DIVIDEND 0 0 0

RATIO (%) 27.65% 20.29% 24.54%

INTERPRETATION:-

This ratio indicates the firms ability of generating profit per rupee ofequity 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 comparedto 2008.

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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


PARTICULARS 2006-07 2007-08 2008-09

NETPROFIT(AFTER

TAX)

62.59 57.67 84.30

NO. OF EQUITY

SHARES

2 2 2

PREF DIVIDEND 0 0 0

RATIO(Rs) 31.30 28.84 42.15

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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

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PARTICULARS 2007-08 2008-09 2009-10

DIV PAID TO

EQUITY S.H

0 0 0

NO. OF EQUITY

SHARE

20 20 20

RATIO 0 0 0

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

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PARTICULARS 2007-08 2008-09 2009-10

MARKET VALUE

PER SHARE

0 0 0

EARNING PER

SHARE

0 0 0

RATIO 0 0 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


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CALCULATION:-

PARTICULARS 2006-07 2007-08 2008-09

DIV PAID TO

EQUITY S.H

0 0 0

NO. OF EQUITY

SHARE

20 20 20

RATIO 0 0 0

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. Theobjective of computing this ratio is to determine efficiency with

which company can use.

FORMULA:-

OVERALL TURNOVER RATIO = NET SALES

CAPITAL EMPLOYED 33.


42/88


PARTICULARS 2006-07 2007-08 2008-09

SALES 496.56 572.89 542.94

CAPITAL

EMPLOYED

201.35 259.19 318.49

RATIO(IN TIMES) 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 itdecreases 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.


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PARTICULARS 2006-07 2007-08 2008-09

SALES(IN

CRORES)

496.56 572.89 542.94

FIXED ASSETS 83.53 86.79 83.35


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.

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DEBTORS RATIO = DEBTORS+BILLS RECEIVABLE * 365

NET CREDIT SALE

CALCULATION: (in crores)

PARTICULARS 2007-08 2008-09 2009-10

DEBTORS+BILLS

REC.

64.71 56.96 73.46

NET CERDIT

SALES

496.56 572.89 542.94

RATIO(IN DAYS) 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.

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FORMULAS:-

DEBTORS TURNOVER RATIO = NO. OF DAYS

DEBTORS RATIO

CALCULATIONS: (in crores)

PARTICULARS 2007-08 2008-09 2009-10

NO. OF DAYS 365 365 365

DEBTORS RATIO 48 36 49

RATIO(IN TIMES) 7.60 10.14 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.

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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


PARTICULARS 2007-08 2008-09 2009-10

CREDITORS+BILLS

PAYABLE

60.28 33.38 63.68

NET CREDIT

PURCHASE

354.30 424.76 355.03

RATIO(DAYS) 62 29 65

INTERPRETATION:-

This ratio shows an average time period for which the creditpurchase remain outstanding. Creditors ratio for the year 2008,2009

and 2010 is 62days,29days,65days.

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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


PARTICULARS 2007-08 2008-09 2009-10

NO. OF DAYS 365 365 365

CREDITORS

RATIO

62 29 65

RATIO(IN TIMES) 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.

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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

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Calculation (in crores)

PARTICULARS 2007 2008 2009

CO.O.G.S 398.53 486.37 413.82

AVERAGE STOCK 15.82 15.52 11.05

RATIO(IN TIMES) 25.19 31.34 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.

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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:- (in crores)


NET SALES 496.56 572.89 542.94

WORKING CAPITAL 67 71.01 57.62


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.


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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


PARTICULARS 2007-08 2008-09 2009-10

EQUITY

S.CAPITAL+R&S

226.35 284.19 343.49

NO. OF EQUITY

EQUITYSHARES

2 2 2

RATIO 113.175 142.095 171.75

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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.

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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. Inthe form of the formula this ratio may be expressed as under.

CURRENT RATIO = CURRENT ASSETS

CURRENT LIABLITIES



CURRENT ASSETS 135.21 110.20 126.47

CURRENTLIABLITIES

68.21 39.19 68.85

RATIO(IN

PROPOTION)

1.98 2.81 1.84

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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

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PARTICULARS 2007-08 2008-09 2009-10

LIQUID ASSETS

STOCK

113.88 100.49 114.09

LIQUID

LIABLITIES-BOD

68.21 39.19 68.85

RATIO(IN

PROPOTION)

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.

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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 beconverted 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:-

QUICKACID TEST RATIO :- QUICK ASSETS

LIQUID LIABILITIES

48.


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PARTICULARS 2007-08 2008-09 2009-10

LIQUID ASSETS

STOCK

7.86 5.55 10

LIQUID

LIABLITIES-BOD

68.21 39.19 68.85

RATIO(IN

PROPOTION)

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.

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3.5 LEVERAGE RATIO:-

3.5.1 PROPRITORY RATIO:-

MEANING:-

This ratio measures the relationship between share holders

fund and total assets of the company.

FORMULA:-

This ratio is computed by dividing share holders funds by total assets

it is expressed as %.

PROPRIETORY RATIO= PROPRITERS FUND*100

NET ASSETS


PARTICULARS 2007-08 2008-09 2009-10

SHARE HOLDERS

FUND

226.35 284.19 368.49

NET ASSETS 239.46 298.13 382.43

RATIO (%) 94.53 95.32 96.35

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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

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PARTICULARS 2007-08 2008-09 2009-10

LONG TERM

DEBTS

0 0 0

S.H S FUND 226.35 284.19 368.49

RATIO(%) 94.53 95.32 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

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PARTICULARS 2007-08 2008-09 2009-10

FIXED INT

BEARING

CAPITAL

0 0 0

ORDINARY

CAPITAL

20 20 20

RATIO(TIMES) 0 0 0

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.

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

FIXED ASSETS


PARTICULARS 2007-08 2008-09 2009-10

LONG TERM

FUND

201.56 259.19 318.49

FIXED ASSETS 83.53 86.79 83.35

RATIO(%) 2.41 2.99 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.


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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


PARTICULARS 2007-08 2008-09 2009-10

EARNINGBEFORE

(INT.&TAX)

102.28 93.19 133.93

INTEREST 1.24 0.89 0.73

RATIO(TIMES) 82.48 104.71 183.47

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.


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DEBT EQUITY RATIO= EBDIT

INSTALLMENT OF + INTEREST

PRINCIPLE TO BE REPARED THIS

YEAR


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.

PARTICULARS 2007-08 2008-09 2009-10

EBDIT 102.28 93.19 133.93

PRINCIPEL+INT 1.24 0.89 0.73

RATIO 82.48 104.70 183.47


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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.

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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 3.16

Consumption of stores 2.58

Other 0.03

Total 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.


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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 2010

PAT 57.67 84.30

Weighted avg no. of Eq 20 20

Nominal value 10 10

Basic and diluted earning

per share 28.84 42.15

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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.

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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.


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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 ofthe Companies Act, 1956 they enclose in Annexure a statement on

matters specified in paragraphs 4 and 5of CARO.

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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 ourexaminations 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.

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f) In their opinion and to the best of their information and

according to the explanations given to us, the accounts readwith 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 andin 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.

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COMMON SIZE

STATMENT OF

1) PROFIT & LOSS

2) BALANCE SHEET


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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 allindividual 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.

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COMMON SIZE STATEMENT OF PROFIT AND LOSS:

(in crores)

Particulars 2008 2009 2010 % % %

Sales

(-)ocean exp

(+) Services

(+) other inc

Net sales

496.56

0.17

496.39

7.78

4.34

508.51

572.89

0.32

572.57

10.54

7.06

590.17

542.94

0.08

542.86

8.54

8.51

559.91

100

0.03

99.97

1.57

0.87

102.41

100

0.06

99.94

1.84

1.23

103.02

100

0.01

99.99

1.57

1.57

103.13

(COGS)

G.P

398.53

109.98

486.37

103.80

413.82

146.09

80.26

22.15

84.90

18.12

76.22

26.91

(-) Adm. Exp

(-) DEPRI

7.70

7.38

10.61

7.51

12.16

7.90

1.55

1.49

1.85

1.32

2.24

1.46

PBIT

(-) INT

94.9

1.24

85.62

0.89

126.03

0.73

19.11

0.25

14.95

0.16

23.21

0.13

PBT

(-) TAX

93.66

31.07

84.13

27.06

125.30

41

18.86

6.26

14.69

4.72

23.08

7.55

PAT 62.59 57.67 84.30 12.60 10.07 15.53

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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.

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COMMON SIZESTATEMENT

OF

BALANCE SHEET

68.


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Particulars 2008 2009 2010

Source of Funds

Share Capital

(+) Reserve & surplus

(-) Diff Tax Liability

TOTAL

Application of

funds

Fixed assets

20

8.35%

206.56

86.26%

226.56

94.61%

12.90

5.39%

239.46

100

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

GROSS BLOCK 130.53 145.78 150.15

(-) DEPRI

52.57

52.62

48.90

59.73

39.26

67.26

NET BLOCK

(-) Capital

Work-in-plog

77.91

5.62

86.05

0.74

82.89

0.46

2.35 0.25 0.12


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TOTAL

Investments

Current Assets (Loans

& Advances)

83.53

34.88

92.48

86.79

29.11

147.44

83.35

21.79

249.84

Inventory

Sundry Debtors

Cash & Bank Bal

Loans &Advances

Total

Current Liabilities &

Provision

Current Liabilities

Provisions

Total

54.00

22.55

64.71

27.02

7.86

3.28

8.64

3.61

135.21

56.46

68.21

3.55

1.48

71.76

43.49

14.59

56.96

19.11

5.55

1.86

4.20

1.41

110.20

36.96

39.19

7.11

2.38

46.30

38.53

10.08

73.46

19.21

10.00

2.61

4.48

1.17

126.47

33.07

68.85

8.38

2.19

77.23


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Net Current Assets

Total

29.97

63.45

26.50

239.46

100

15.53

63.90

21.43

298.13

100

20.19

49.24

12.88

382.43

100


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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.


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69.

CHPT:- 8 CONCLUSION & FINDINGS

Ratio table:- (in crores)

Particulars 2008 2009 2010

GROSS PROFITRATIO

NET PROFIT

RATIO

EXPENSES

RATIO

OPERATING

RATIO

RETURN ON INVT/

CAPITAL EMPL

RETURN ON

SHARE HOLDERS

FUND

RETURN ON Eq

SHARE CAPITAL

19.74%

12.60%

1.32%

81.39%

47.13%

27.65%

312.95%

15.10%

10.07%

1.64%

86.92%

33.03%

20.29%

288.35%

23.78%

15.53%

2.07%

78.94%

39.57%

22.54%

421.50%


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RATIO

RETURN ON Eq

SHARE HOLDERS

FUND RATIO

EARNING PER

SHARE

27.65%

31.30

20.29%

28.84

24.54%

42.15

FIXED ASSET

TURNOVER RATIO

5.94 6.60 6.51

DEBTORS

RATIO(IN DAYS)

DEBTORS

TURNOVER RATIO

48

7.60

36

10.14

49

7.45

STOCK TURN

OVER RATIO

WORKING

CAPITAL

TURNOVER RATIO

BOOK VALUE PER

SHARE RATIO

CURRENT

RATIO

LIQUID

RATIO

QUICK-ACID TEST

RATIO

25.19

7.41

113.175

1.98

1.67

0.12

31.34

8.07

142.095

2.81

2.56

0.14

37.45

9.42

171.75

1.84

1.66

0.15


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PROPRITORY

RATIO

DEBTH Eq

RATIO

CAPITAL GEARING

RATIO

LONG TERM FUND

TO F.A

INTEREST

COVERAGE RATIO

DEBT SERVICE

COVERAGE RATIO

CREDITORS

RATIO

CREDITORS

TURNOVER RATIO

OVERALL

TURNOVER RATIO

94.53

0

0

2.41

82.48

82.48

62

5.89

2.47

95.32

0

0

2.99

104.71

104.70

29

12.59

2.21

96.35

0

0

3.82

183.47

183.47

65

5.61

1.70


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70FINDINGS:

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 investin this company for the long term.

Conclusion


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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.


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