A PROJECT REPORT ON

“ A STUDY ON FINANCIAL STATEMENT ANALISIS

OF TATA STEEL LTD”

SEMESTER VI

AS A PARTIAL FULFILMENT OF THE DEGREE OF

BACHELOR IN COMMERECE (ACCOUNTING AND FINANCE)

UNDER THE FACULITY OF COMMERCE

(2023-2024)

SUBMITTED BY

MR. ATHARV MAHENDRA JAGE

ROLL NO – 29

UNDER THE GUIDANCE OF

PROF. AKSHADA BARI

K.M. AGRAWAL COLLAGE OF ARTS, SCIENCE AND COMMERCE

K.M. Agrawal Collage Road

Gandhare, Kalyan(w) 421 301

1
 A PROJECT REPORT ON

“ A STUDY ON FINANCIAL STATEMENT ANALISIS

OF TATA STEEL LTD”

SEMESTER VI

AS A PARTIAL FULFILMENT OF THE DEGREE OF

BACHELOR IN COMMERECE (ACCOUNTING AND FINANCE)

UNDER THE FACULITY OF COMMERCE

(2023-2024)

SUBMITTED BY

MR. ATHARV MAHENDRA JAGE

ROLL NO – 29

UNDER THE GUIDANCE OF

PROF. AKSHADA BARI

K.M. AGRAWAL COLLAGE OF ARTS, SCIENCE AND COMMERCE

K.M. Agrawal Collage Road

Gandhare, Kalyan(w) 421 301

2
 CERTIFICATE
THIS IS TO CERTIFY THAT MR. ATHARV MAHENDRA JAGE HAS WORKED
AND DULY COMPLETED HIS WORK FOR THE DEGREE OF BACHELOR OF
COMMERCE (ACCOUNTING AND FINANCE) UNDER THE FACULITY OF
COMMERCE IN THE SUBJECT OF FINANCE AND HIS PROJECT IS
ENTIRLED

“ A STUDY ON FINANCIAL STATEMENT ANALISIS

OF TAT STEEL LTD”

UNDER THE SUPERVISION

I FUTHER CERTIFY THAT THE WORK HAS NOT BEEN SUMBITED

PREVIOUSLY BY ANY DEGREE OR DIPLOMA OF ANY UNIVERSITY

IT IS HIS OWN FSCT REPORTED BY HIS PERSONAL FINIDING AND

INVESTIGATION.

SEAL OF
THE
COLLAGE

PROJECT GUIDE EXTERNAL GUIDE

PROF. AKSHADA BARI

SELF-FINANCING INCHARGE

MR. SUJEET SINGH

COORDINATOR PRINCIPAL

MR. MAHENDRA PANDEY DR. ANITA MANNA

DATE OF SUBMISSION: ( /03/2024)

3
 DECLARATION

1, the undersigned MR. ATHARV MAHENDRA JAGE. here by, declare that the
work embodied in this project work titled "A STUDY ON FINANCIAL
STATEMENT ANALIYS OF TATA STEEL LTD" forms my own contribution to
the research work carried University for any other Degree / Diploma to this or any
other University.

Wherever reference has been made to previous works to others, it hasbeen clearly
indicated as such and included in the bibliography.

I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

Name And Signature of the student

Certified by

Name and Signature of the Guiding Teacher

4
 ACKNOWLEDGMENT

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do
this project.

I would like to thank my Principal, Dr. ANITA MANNA for providing the
necessary facilities required for completion of this project.

I take this opportunity to thank our Co-ordinator Mr. MAHENDRA PANDEY, for
his moral support and guidance.

I would also like to express my sincere guidance towards my project guide MS.
AKSHADA BARI whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference
books and magazines related to my project.

Lastly, I would like to thank each person who directly or indirectly helped me in the
completion of the project especially my Parents and Peers supported me throughout
my project

5
 INDEX

S. NO. PARTICULARS PAGE NO.

1 Executive Summary 7

2 Introduction 8-25

3 Company Profile 26-43

4 About The Product 44-45

5 Audit Report 46-47

6 Objective Of The Study 48

7 Research Methodology 49-50

8 Data Analysis and Interpretation 51-63

9 Findings 64-66

10 Conclusion 67

11 Suggestions 68-69

12 Bibliography 70-71

6
 EXECUTIVE SUMMARY

Tata Steel Ltd. Is Indian multinational steel making company which provides steel
with in India as well as out of India. It is also one of top growing companies of India.
They are also world's most geographically diversified steel producers. This is also one
of the reason because of which I have selected this company. This company's data is
also easily available on their official web site which can be accessed by anyone and
which also helped me to gather the data and find out about these results.

I have selected this company to gather the data about how much the organization has
grown over the years and how much debts have they paid and also gather information
about their investments and how much profit the company has made over the years
and what are their future goals and how they have to achieve them. It also helps us to
know what are the company's strength and weakness. It has even helped us to know
about their finances operations and their liquidity and solvency position.

This research also helped me to achieve the objectives of this report the objectives are
as follows:-

To understand the concept & financial statement analysis & highlight its advantages
and disadvantages.

➤ To learn the meaning of ratio analysis & its importance to any business
organization.

➤To study the financial performance of TATA Steel over the period of 5 years.

In conclusion, Tata Steel Ltd. has showcased overall positive financial performance
and a solid foundation. However, it is advised that the company remains vigilant in
managing risks, optimizing operational efficiency, and staying attuned to market
conditions. By addressing these areas, Tata Steel Ltd. can continue its growth
trajectory and maintain its position as a leading player in the steel industry.

7
 INTRODUCTION

Financial statements are written records that convey the business activities and the
financial performance of a company. Financial statements are often audited by
government agencies, accountants, firms, etc. to ensure accuracy and for tax,
financing, or investing purposes. For-profit primary financial statements include the
balance sheet, income statement, statement of cash flow, and statement of changes in
equity. Nonprofit entities use a similar but different set of financial statements.

Key Points

Financial statements are written records that convey the business activities and the
financial performance of an entity.

The balance sheet provides an overview of assets, liabilities, and shareholders' equity
as a snapshot in time.

The income statement primarily focuses on a company's revenues and expenses

during a particular period. Once expenses are subtracted from revenues, the statement
produces a company's profit figure called net income.

The cash flow statement (CFS) measures how well a company generates cash to pay
its debt obligations, fund its operating expenses, and fund investments.

The statement of changes in equity records how profits are retained within a company
for future growth or distributed to external parties.

Definitions

Financial statements are reports prepared by a company's management to present the

financial performance and position at a point in time. A general-purpose set of
financial statements usually includes a balance sheet, income statements, statement of

8
owner's equity, and statement of cash flows. These statements are prepared to give
users outside of the company, like investors and creditors, more information about the
company's financial positions. Publicly traded companies are also required to present
these statements along with others to regulator agencies in a timely manner.

Understanding Financial Statements

Investors and financial analysts rely on financial data to analyze the performance of a
company and make predictions about the future direction of the company's stock
price. One of the most important resources of reliable and audited financial data is the
annual report, which contains the firm's financial statements.

The financial statements are used by investors, market analysts, and creditors to
evaluate a company's financial health and earnings potential. The three major
financial statement reports are the balance sheet, income statement, and statement of
cash flows.

Corporate Financial Analysis

In corporate finance, the analysis is conducted internally by the accounting

department and shared with management in order to improve business decision
making. This type of internal analysis may include ratios such as net present value
(NPV) and internal rate of return (IRR) to find projects worth executing.

Many companies extend credit to their customers. As a result, the cash receipt from
sales may be delayed for a period of time. For companies with large receivable
balances, it is useful to track days sales outstanding (DSO), which helps the company
identify the length of time it takes to turn a credit sale into cash. The average
collection period is an important aspect of a company's overall cash conversion cycle.

A key area of corporate financial analysis involves extrapolating a company's past.

performance, such as net earnings or profit margin, into an estimate of the company's
future performance. This type of historical trend analysis is beneficial to identify
seasonal trends.

9
For example, retailers may see a drastic upswing in sales in the few months leading up
to Christmas. This allows the business to forecast budgets and make decisions, such
as necessary minimum inventory levels, based on past trends.

Investment Financial Analysis

In investment finance, an analyst external to the company conducts an analysis for

investment purposes. Analysts can either conduct a top-down or bottom-up
investment approach. A top-down approach first looks for macroeconomic
opportunities, such as high-performing sectors, and then drills down to find the best
companies within that sector. From this point, they further analyze the stocks of
specific companies to choose potentially successful ones as investments by looking
last at a particular company's fundamentals.

A bottom-up approach, on the other hand, looks at a specific company and conducts a
similar ratio analysis to the ones used in corporate financial analysis, looking at past
performance and expected future performance as investment indicators. Bottom-up
investing forces investors to consider microeconomic factors first and foremost. These
factors include a company's overall financial health, analysis of financial statements,
the products and services offered supply and demand, and other individual indicators
of corporate performance over time.

Advantages of Financial Analysis

The advantages of financial statement analysis are listed below:

The most important benefit if financial statement analysis is that it provides an idea
to the investors about deciding on investing their funds in a particular company.

Another advantage of financial statement analysis is that regulatory authorities like

IASB can ensure the company following the required accounting standards.

Financial statement analysis is helpful to the government agencies in analyzing the

taxation owed to the firm.

10
Above all, the company is able to analyze its own performance over a specific time
period.

Limitation of Financial Statement Analysis

Financial Statements Are Derived from Historical Costs - Transactions are

initially recorded at their cost. This is a concern when reviewing the balance sheet,
where the values of assets and liabilities may change over time. Some items, such as
marketable securities, are altered to match changes in their market values, but other
items, such as fixed assets, do not change. Thus, the balance sheet could be
misleading if a large part of the amount presented is based on historical costs.

Financial Statements Only Cover a Specific Period of Time - A user of financial

statements can gain an incorrect view of the financial results or cash flows of a
business by only looking at one reporting period. Any one period may vary from the
normal operating results of a business, perhaps due to a sudden spike in sales or
seasonality effects. It is better to view a large number of consecutive financial
statements to gain a better view of ongoing results.

Financial Statements Could be Wrong Due to Fraud - The management team of a

company may deliberately skew the results presented. This situation can arise when
there is undue pressure to report excellent results, such as when a bonus plan calls for
payouts only if the reported sales level increases. One might suspect the presence of
this issue when the reported results spike to a level exceeding the industry norm, or
well above a company's historical trend line of reported results.

11
Financial Statements Do Not Cover Non-Financial Issues - The financial
statements do not address non-financial issues, such as the environmental
attentiveness of a company's operations, or how well it works with the local
community. A business reporting excellent financial results might be a failure in these
other areas.

Financial Statements May Not Have Been Verified - If the financial statements
have not been audited, this means that no one has examined the accounting policies,
practices, and controls of the issuer to ensure that it has created accurate financial
statements. An audit opinion that accompanies the financial statements is evidence of
such a review.

Financial Statements Have No Predictive Value - The information in a set of

financial statements provides information about either historical results or the
financial status of a business as of a specific date. The statements do not necessarily
provide any value in predicting what will happen in the future. For example, a
business could report excellent results in one month, and no sales at all in the next
month, because a contract on which it was relying has ended.

How Is Financial Analysis Done?

12
Financial analysis can be conducted in both corporate finance and investment finance
settings. A financial analyst will thoroughly examine a company's financial
statements-the income statement, balance sheet, and cash flow statement. One of the
most common ways to analyze financial data is to calculate ratios from the data in the
financial statements to compare against those of other companies or against the
company's own historical performance. A key area of corporate financial analysis
involves extrapolating a company's past performance, such as net earnings or profit
margin, into an estimate of the company's future performance.

Why Is Financial Analysis Useful?

The goal of financial analysis is to analyze whether an entity is stable, solvent, liquid,
or profitable enough to warrant a monetary investment. It is used to evaluate
economic trends, set financial policy, build long-term plans for business activity, and
identify projects or companies for investment

What Is Fundamental Analysis?

Fundamental analysis uses ratios gathered from data within the financial statements,
such as a company's earnings per share (EPS), in order to determine the business's
value. Using ratio anaysis in addition to a thorough review of economic and financial
situations surrounding the company, the analyst is able to arrive at an intrinsic value
for the security. The end goal is to arrive at a number that an investor can compare
with a security's current price in order to see whether the security is undervalued or
overvalued.

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14
15
1 . Comparative Financial Statement Analysis (Horizontal Analysis) - name
suggests, comparative analysis provides a year-on-year review of the various financial
statements. For Example, in the income statement, the sales figure may be compared
over a period of consecutive years to understand how the sales figure have grown (or
declined) over the year. It should be noted that horizontal analysis compares the
internal performance of the company.

2. Common-size Financial Statement Analysis (Vertical Analysis) – Vertical

analysis is applicable for internal performance review as well as for comparison to
peers and bench-making. In vertical analysis all the items in a particular statement are
represented as a percentage of a particular item. For Example: Operating expenses,
Depreciation, Amortization, Profit before tax, Tax, Profit after tax, etc. any be
represented as a percentage of Sales in the Income Statement. Common standard base
can easily reveal the internal make-up of financial statements and any proportionate
increase and decrease of the same.

Vertical analysis is also put to use for comparison across companies as financial
statements are converted to common-size format, which can then be used to compare
with competitor or industry averages, highlighting key differences which can they be
analyzed.

3. Ratio Analysis - Ratio Analysis is the most widely used tool of financial statement
analysis. A ratio gives relationship between two numbers, in this case items in the
financial statements. Ratios are popular because they readily allow internal evaluation
as well as comparison across firms. The ratios are categorized according to activities
or functions they perform or the information they provide. For Example: Profitability
ratios measure the profit making capability of the company.

4. Graphical Analysis - Graphs provide visual representation of the performance that

can be easily compared over time. The graphs may be line graphs. Columns graphs or
pie charts.

5. Trend Analysis - Trend Analysis is used to reveal the trend of items with the
passage of time and is generally used as a statistical tool. Trend Analysis is used in
conjunction with ratio analysis, horizontal and vertical analysis to spot a particular
trend. Explore the causes of the same and if required prepare future projections.

16
6. RegressionAnalysis - Regression analysis is a statistical tool used to establish and
estimate relationship among variables. Generally, the dependent variable is related to
one or more independent variables. In case of financial statements analysis, the
dependent variable may be sales and it is required to estimate its relationship with the
independent variable. Say a macroeconomic factor like NET Domestic Product.

Ratio Analysis

Ratio analysis is referred to as the study or analysis of the line items present in the
financial statements of the company. It can be used to check various factors of a
business such as profitability, liquidity, solvency and efficiency of the company or the
business.

Ratio analysis is mainly performed by external analysts as financial statements are the
primary source of information for external analysts.

The analysts very much rely on the current and past financial statements in order to
obtain important data for analysing financial performance of the company. The data
or information thus obtained during the analysis is helpful in determining whether the
financial position of a company is improving or deteriorating.

Importance of Ratio Analysis

1. Financial Statement Analysis- Understanding financial statements are important

for stakeholders of the company. Ratio analysis helps in understanding the
comparison of these numbers; furthermore, it helps in estimating numbers from
income statements and balance sheets for the future. For e.g. Equity shareholder looks
into the P/E ratio, the Dividend payout ratio, etc. while creditors observe Debt to
Equity ratio, Gross margin ratio, Debt to asset ratio, etc.

2. Efficiency of Company - Ratio analysis is important in understanding the

company's ability to generate profit. Return on Asset, Returns on Equity tell us how
much profit the company is able to generate over assets of the firm and equity

17
investments in the firm, while gross margin and operating margin ratios tell us the
company's ability to generate profit from sales and operating efficiency.

3. Planning and Forecasting - From a Management and investor point of view, ratio
analysis helps to understand and estimate the company's future financials and
operations. Ratios formed from past financial statement analysis helps in estimating
future financials, budgeting, and planning for the future operations of the company.

4. Identifying Risk and Taking Corrective Actions - The company operates under
various business, market, operations related risks. Ratio analysis helps in
understanding these risks and helps management to prepare and take necessary
actions. Leverage ratios help in performing sensitivity analysis of various factors
affecting the company's profitability like sales, cost, debt .Financial leverage ratios
like Interest Coverage ratio and Debt Coverage ratio tell how much the company is
dependent on external capital sources and the company's ability to repay debt.

5. Peers Comparison - Investor, as well as the company's management, makes a

comparison with Competitors Company to understand efficiency, profitability and
market share. Ratio analysis is helpful for companies to perform SWOT (Strengths,
Weakness, Opportunities, and Threats) analysis in the market. It also tells whether the
company is able to perform growth or not over a period from past financials and
whether the company's financial position is improving or not.

6. Financial Solvency - The company's ability to pay short-term debt is determined

by liquidity. Current Ratio, Acid-test ratio tells us whether a company is able to pay
its short-term obligation within a year. The company continuously runs analysis on
past financial statements to understand and prepare for payment of short-term
obligations.

7. Decision Making - Ratios provide important information on the operational

efficiency of the company, and the utilization of resources by the company. It helps
management to forecast and planning for future, new goals, concentrate on the
different markets, etc.

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Types of Ratios

Liquidity Ratios

Liquidity ratios -Liquidity refers to the ability of a concern to meet its current
obligations as and when they become due. Liquidity ratios measure the short-term
solvency of a business and for this purpose following ratio can be computed:

Current Ratio = current ratio is a most widely used ratio to judge short term financial
position or solvency of a firm. it can be defined as relationship between current assets
and current liabilities. Current ratio of 2: 1 is considered as satisfactory.

Current Ratio= Current Assets / Current Liabilities

Liquid Ratio = it is also called as Quick ratio or Acid test ratio, measures the ability
of business to pay its short-term liabilities by having assets that are readily converted
into cash. These assets are namely cash, marketable securities and account
receivables.

Liquid Ratio Current Asset-Inventory-Prepaid Expenses /Current Liabilities.

Absolute Liquid Ratio This ratio is also known as super quick ratio and establishes
relationship between absolute liquid assets and liquid liabilities. The ideal level of
absolute liquid ratio is 0.5:1.

Absolute Liquid Ratio= Cash and Bank Balance/Current Liabilities

Cash Ratio = the cash ratio is a measure of the liquidity of a firm, namely the ratioof
the total assets and cash equivalents.

19
Solvency ratio - This ratio examines whether the total realizable amount from all
assets of a firm is enough to pay all of its external liability or not. In this context this
ratio shows the relationship between total assets and external liabilities of the firm.

Solvency means ability of a firm to pay its liability on due date. Solvency is tested on
the basis of the ability of the concern to pay its long-term liability at due time. The
ratios to be used for this purpose are called as 'ratio of financial position' or sbitality
ratio. The main ratios of this category are as follows;

Debt Equity Ratio- this ratio reflects the long-term financial position of firm is
calculated in the form of relationship between external equities or outsider's funds and
internal equities or shareholder's fund. Debt equity ratio may also be called as 'ratio
long term debt to shareholders funds.

Debt Equity Ratio= Long Term Debts/ Shareholder Funds

Proprietary Ratio- This ratio indicates the relationship between proprietors fund and
total assets. Greater is the proprietor funds better is the position of the creditor.

Proprietary Ratio Proprietary Funds Or Shareholders Funds/Total Assets

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Profitability Ratio

Profitability ratio Profitability ratio is used to evaluate the company's ability

togenerate income as compared to its expenses and other cost associated with
thegeneration of income during a particular period. This ratio represents the final
result ofthe company.

The main categories of this ratio are:

Gross Profit Ratio- This ratio measures the marginal profit of the company. This
ratio isalso used to measure the segment revenue. A high ratio represents the greater
profitmargin and it's good for the company.

Gross Profit Ratio Gross Profit /Sales × 100

Net Profit Ratio This ratio measures the overall profitability of company
consideringall direct as well as indirect cost. A high ratio represents a positive return
in the companyand better the company is.

Net Profit Ratio = Net Profit/Sales × 100

Return on Equity - This ratio measures Profitability of equity fund invested the
company. It also measures how profitably owner's funds have been utilized to
generate company'srevenues. A high ratio represents better the company is.

Retum on Equity Profit afterTax/ Net Worth X 100

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Return on Capital Employed- Return on capital employed (ROCE) is a financial
ratio thatcan be used in assessing a company's profitability and capital efficiency. In
other words, this ratio can help to understand how well a company is generating
profits from its capitalas it is put to use.

Return On Capital Employed (ROCE) = Net Profit Before Interest and

Tax/Capital Employed X 100

Operating Profit Ratio - Operating profit ratio establishes a relationship between

operating Profit earned and net revenue generated from operations (net sales).
Operating profit ratiois a type of profitability ratio which is expressed as a percentage.

Operating Profit Ratio = Operating Profit / Net Sale * 100

INTRODUCTION TO THE INDUSTRY

India was the world's second-largest steel producer with production standing at 111.2
million tons (MT) in 2019. The growth in the Indian steel sector has been driven by
domestic availability of raw materials such as iron ore and cost-effective labor.
Consequently, the steel sector has been a major contributor to India's manufacturing
output.

The Indian steel industry is modern with state-of-the-art steel mills. It has always
strived for continuous modernization of older plants and up-gradation to higher
energy efficiency levels. Indian steel industry is classified into three categories major
producers, main producers and secondary producers.

Market Size

India's finished steel consumption grew at a CAGR of 5.2% during FY16-FY20 to

reach 100 MT. India's crude steel and finished steel production increased to 108.5 MT
and 101.03 MT in FY20P, respectively. Between April 2020 and November 2020,
India's cumulative production of crude steel was 62.01 MT and finished steel was
55.68 MT. Export and import of finished steel stood at 8.24 MT and 6.69 MT,
respectively, in FY20P. Export and import of finished steel stood at 7.70 MT and 2.70
MT, respectively, between April 2020 and November 2020.

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Investment

Steel industry and its associated mining and metallurgy sectors have seen major I and
developments in the recent past.

According to the data released by Department for Promotion of Industry and Internal
Trade (DPIIT), the Indian metallurgical industries attracted Foreign Direct Investment
(FDI) to the tune of US$ 14.24 billion in the period April 2000-September 2020.

Some of the major investments in the Indian steel industry are as follows:

➤ In a move towards becoming self-reliant, Indian steel companies have started

boosting steel production capacity. To this end, SAIL announced doubling of its at 5
of its steel plants capacity in September 2020.

In March 2020, Arcelor Mittal Nippon Steel India (AM/NS) acquired Bhander Power
plant in Hazira, Gujarat from Edelweiss Asset Reconstruction Company.

In February 2020, GFG Alliance acquired Adhunik Metaliks and its arm Zion Steel
for Rs. 425 crore (US$ 60.81 million), marking its entry into the Indian steel market.

➤ For FY20, JSW Steel set a target of supplying around 1.5 lakhs tons of TMT
Rebars to metro rail projects across the country.

➤In December 2019, Arcelor Mittal completed the acquisition of Essar Steel at Rs.
42,000 crore (USS 6.01 billion) and formed a joint venture with Nippon Steel
Corporation.

JSW Steel has planned a USS 4.14 billion capital expenditure programme to increase
its overall steel output capacity from 18 million tons to 23 million tons by 2020.

Ministry of Steel plans to invest US$ 70 million in the eastern region of the country
through accelerated development of the sector.

23
The production capacity of SAIL is expected to increase from 13 MTPA to 50 MTPA
in2025 with total investment of US$ 24.88 billion.

Tata Steel has decided to increase the capacity of its Kalinga Nagar integrated steel
plant from 3 million tons to 8 million tons at an investment of USS 3.64 billion.

Government Initiatives

Some of the other recent Government initiatives in this sector are as follows:

➤ In December 2020, the Minister for Petroleum & Natural Gas and Steel, Mr.
Dharmendra Pradhan, has appealed to the scientific community to Innovate for India
(141) and create competitive advantages to make India 'Aatmanirbhar'..

➤ In September 2020, the Ministry of Steel prepared a draft framework policy for
development of steel clusters in the country.

On October 1, 2020, Directorate General of Foreign Trade (DGFT) announced that

steel manufacturers in the country can avail duty drawback benefits on steel supplied
through their service centers, distributors, dealers and stock yards.

➤ Government introduced Steel Scrap Recycling Policy to reduce import.

➤ An export duty of 30% has been levied on iron ore^ (lumps and fines) to ensure
supply to domestic steel industry.

Government of India's focus on infrastructure and restarting road projects is aiding the
demand for steel. Also, further likely acceleration in rural economy and infrastructure
is expected to lead to growth in demand for steel.

➤ The Union Cabinet, Government of India approved the National Steel Policy
(NSP) 2017, as it intends to create a globally competitive steel industry in India. NSP
2017 envisages 300 million tons (MT) steel-making capacity and 160 kg's per capita
steel consumption by 2030-31.

➤ The Ministry of Steel is facilitating setting up of an industry driven Steel Research

and Technology Mission of India (SRTMI) in association with the public and private
sector steel companies to spearhead research and development activities in the iron
and steel industry at an initial corpus of Rs. 200 crore (US$ 30 million).

24
➤ The Government of India raised import duty on most steel items twice, each time
by 2.5% and imposed measures including anti-dumping and safeguard duties on iron
and steel items.

Road Ahead

The National Steel Policy, 2017 envisage 300 million tons of production capacity by
2030-31. The per capita consumption of steel has increased from 57.6 kg to 74.1 kg
during the last five years. The government has a fixed objective of increasing rural
consumption of steel from the current 19.6 kg/per capita to 38 kg/per capita by 2030-
31.

As per Indian Steel Association (ISA), steel demand will grow by 7.2% in 2019-20
and 2020-21. Huge scope for growth is offered by India's comparatively low per

capita steel consumption and the expected rise in consumption due to increased
infrastructure construction and the thriving automobile and railways sectors.

25
Top 10 Steel Companies in India

Currently, there are numerous brands of steel in the market, and filtering out the best
one leads. you to your wit's end. Here, we make it easier for you by bringing the top
10 best steel companies in India.

1. TATA Steel

2. Vedanta.

3. JSW Steel

4. Steel Authority of India Limited (SAIL)

5. Jindal Steel and Power

6. TATA Steel BSL

7. MS Agarwal Foundries Pvt. Ltd.

26
8. Jindal Stainless

9. TATA Steel Long Products

10. Godavari Power and Ispa

COMPANY'S PROFILE

TATA STEEL LIMITED

TATA STEEL

#We Also Make Tomorrow

27
 Tata Steel Limited is an Indian multinational steel-making company based in
Jamshedpur, Jharkhand and is headquartered in Mumbai, Maharashtra, India. It is a
subsidiary of the Tata Group.

Formerly known as Tata Iron and Steel Company Limited (TISCO), Tata Steel is
among the top steel producing companies in the world with an annual crude steel
capacity of 34 million tons per annum. It is one of the world's most geographically-
diversified steel producers, with operations and commercial presence across the
world. The group (excluding SEA operations) recorded a consolidated turnover of
US$19.7 billion in the financial year ending 31 March 2020. It is the second largest
steel company in India (measured by domestic production) with an annual capacity of
13 million tons after SAIL.

Tata Steel operates in 26 countries with key operations in India, Netherlands and
United Kingdom, and employs around 80,500 people. Its largest plant (10 MTPA
capacities) is located in Jamshedpur, Jharkhand. In 2007, Tata Steel acquired the UK-
based steel maker Corus. It was ranked 486th in the 2014 Fortune Global 500 ranking
of the world's biggest corporations. It was the seventh most valuable Indian brand of
2013 according to Brand Finance.

In July 2019 Tata Steel Kalinganagar (TSK) was included in the list of the World.
Economic Forum's (WEF's) Global Lighthouse Network, showing leadership in
applying Fourth Industrial Revolution technologies to drive financial and operational
impact.

28
 Tata Steel is headquartered in Mumbai, Maharashtra, India and has its marketing
headquarters at the Tata Centre in Kolkata, West Bengal. It has a presence in around
50 countries with manufacturing operations in 26 countries including: India,
Malaysia, Vietnam, Thailand, UAE, Ivory Coast, Mozambique, South Africa,
Australia, United Kingdom, The Netherlands, France and Canada.

Tata Steel primarily serves customers in the automotive, construction, consumer

goods. engineering, packaging, lifting and excavating, energy and power, aerospace,
shipbuilding, rail and defense and security sectors.

Tata Iron and Steel Company (TISCO) was founded by Jamsetji Tata and
established by Dorabji Tata on 26 August 1907. TISCO started pig iron production in
1911 and began. producing steel in 1912 as a branch of Jamsetji's Tata Group. The
first steel ingot was manufactured on 16 February 1912. During the First World War
(1914-1918), the company made rapid progress. By 1939, it operated the largest steel
plant in the British Empire. The company launched a major modernization and
expansion program in 1951. Later, in 1958, the program was upgraded to 2 million
metric tonnes per annum (MTPA) project. By 1970, the company employed around
40,000 people at Jamshedpur, and a further 20,000 in the neighboring coal mines. In
1971 and 1979, there were unsuccessful attempts to nationalize the company. In 1990,
the company began to expand, and established its subsidiary, Tata Inc., in New York.
The company changed its name from TISCO to Tata Steel Ltd. in 2005.

Tata Steel on Thursday, 12 February 2015 announced buying three strip product
services centers in Sweden, Finland and Norway from SSAB to strengthen its offering
in Nordic region. The company, however, did not disclose the value of the
transactions.

In September 2017, ThyssenKrupp of Germany and Tata Steel announced plans to

combine their European steel-making businesses. The deal will structure the European
assets as Thyssenkrupp Tata Steel, an equal joint venture. The announcement
estimated that the company would be Europe's second-largest steelmaker, and listed
future headquarters in Amsterdam.

In 1988, India's state-owned Doordarshan network showcased an iconic

advertising campaign with the kind of recall value that brands today would pay

29
megabucks to have. The three commercials in the campaign used inspiring lyrics and
happy visuals of a developing nation, set to the accompaniment of an upbeat tune, to
encapsulate the powerful contribution that one company Tata Steel had made towards
the building of a nation. Its powerful tagline, almost an aside, flourished the perfect
climax, 'We also make steel'.

Decades later, Tata Steel Ltd (Tata Steel) has moved far beyond the achievements
described in those commercials. Its recent advertising tagline, #WeAlsoMake
Tomorrow', now shapes every aspect of the company, across divisions, departments
and functions.

Facing the future

The journey towards re-inventing the organization began with the initiation of
multiple strategic initiatives, intended to instill structural, cultural and financial future
readiness. In keeping with the exhortation of the group Chairman, N Chandrasekaran,
to simplify, synergize and scale, Tata Steel decided to consolidate and expand the
business that generations of employees had nurtured since 1907. But the future, as
envisaged by Tata Steel's global CEO & MD, TV Narendran, would be "tougher than
the past", so it was necessary to shed the assets and strategies that were no longer
feasible going forward. The company divested itself of NatSteel, its asset in
Singapore, while retaining the one in Thailand. Mr. Narendran says, "We could not
unlock more long-term value from NatSteel. But our asset in Thailand is structurally
self-sufficient and stronger, has upstream and downstream facilities and has a low
carbon footprint."

The company decided to scale up in India. Debashish Choudhury, chief, Corporate

Strategy and Planning, Tata Steel India and Southeast Asia, says, "India is the only
large market with strong growth of steel consumption and that gives us a competitive
advantage. We also have access to a significant proportion of our key raw material
needs. Our ability to scale in India is central to our goal of being the most respected
and valuable steel company in the world."

"Our ability to scale in India is central to our goal of being the most respected
and valuable steel company in the world."-Debashish Choudhury, chief,
Corporate Strategy and Planning

30
 Tata Steel acquired key assets seen as having long-term value. From a single site
at Jamshedpur, Tata Steel grew with the acquisition of Meramandali (formerly
Bhushan Steel) and Neelachal Ispat Nigam, besides its own Greenfield investment in
Kalinga Nagar in Odisha.

These newer plants have the capacity to manufacture long and flat products, an
advantage given India's focus on infrastructure and the burgeoning demand for
appliances, automobiles, etc. The 2500-acre Neelachal site and the 3500-acre Kalinga
Nagar site offer huge scope for unlocking value from scale and infrastructure.
Neelachal also has 100 million tonnes of iron ore. These factors, and the enhanced
ecosystem, bring the company's goal of 40 million tonnes of steel production by 2030
within reach.

Brave New Businesses

A key part of looking ahead involves moving into downstream businesses, getting
into services and solution-oriented businesses and working with new materials to beat
the cyclicality that the legacy business labors under.

Debashish Bhattacharjee, vice president, Technology and New Materials

Business, Tata Steel, is excited about the possibilities thrown up by nascent
technologies as well as the new materials that the company is banking on. "A whole
new world is looming ahead on the strength of decisions made today. Being on the
cusp of that future is a heady proposition," he says. In 2017, Tata Steel made a long
list of 150 new materials with potential. Tossing out those that didn't address future

31
megatrends, didn't allow for innovative applications in multiple sectors and weren't
ecofriendly, the company ended up with three composite materials, having unexplored
potential, namely polymer matrix with fiber reinforcement, graphene and advanced
ceramics.

"We needed to develop and scale up our technologies that would decarbonize our
steel business. To do that, we had to completely recast the way we looked at
technology." Debashish Bhattacharjee, vice president, Technology and New
Materials Business

The composites had structural applications. Like steel, polymer matrix can be
used to build anything from gas cylinders and railway coaches to aircraft fuselages
and bridges. Unlike steel, it is corrosion resistant, moldable and lightweight. Vehicle
bodies made of this material consume less fuel.

Tata Steel has already notched up nearly Rs 200 crore of business in composite
materials. The company has a JV with a Dutch company involved in the design and
prototyping of railway interiors for the European market, using polymer matrix that is
manufactured in West Bengal and Gujarat.

The second material, graphene, was another winner, as Tata Steel had its own
patents for graphene manufacturing. Graphene has applications in corrosion resistance
and in enhancing electronic products and composite materials. The company has set
up a graphene plant in Jamshedpur with a capacity of 100 tonnes per annum. It has
also partnered with the Ministry of Electronics and IT to set up a Rs 85-crore joint
innovation center for graphene in Kerala.

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 The third material, advanced ceramics, used in the steel industry for heat
resistance, has applications in electronics, medical materials, space and defense. The
market for medical materials is about Rs 65,000 crore and includes implants, bone
replacement, collagen for the treatment of severe burn trauma, etc. The medical
materials are being made in Mumbai and the collagen in Kharagpur.

Ceramics and composites already have worldwide markets in excess of $100

billion, with the Indian market at a fledgling $2.5 billion and poised to grow.

The new materials lend themselves to multiple applications, limited only by the
imagination. Dr Bhattacharjee says, "Research in technology disruption is key to these
businesses, which are knowledge-intensive." Tata Steel is partnering extensively to
generate knowledge and capacity in these materials.

The business, only three years old, has miles to go, but Tata Steel has ambitious
plans. By 2030, it hopes to corner at least 10-12 percent of the market. "We need to

33
study the market and supply sides of the business. That takes time and collaboration
with experts," he adds.

Renewing Technology

Steel is infinitely recyclable. The downside: the steel manufacturing process ends
up producing more carbon dioxide than steel. A solution to this problem does not
exist yet. But given that India has signed the Paris Agreement promising to take
credible action towards reducing greenhouse gas emissions, the key reason for global
warming reduce its carbon footprint. Tata Steel is keen to Dr Bhattacharjee says, "We
needed to develop and scale up our technologies that would decarbonizes our steel
business.

To do that, we had to completely recast the way we looked at technology." The

company mapped out seven technology leadership areas, namely carbon capture and
usage or storage; production of cheap, clean and green hydrogen; use of electric
power for mobility; use of low-grade ores and rejects of ores; conservation and
utilization of water; new ways of coating technology and new coating materials that
are anti-bacterial and anti- viral; and advanced analytics for defect prediction

"From being good technology adopters, our focus has changed to being a
technology leader in the steel industry. For this, we have identified several
technology leadership areas, including use of green hydrogen in steel value chain
and carbon capture and usage."-Debashish Choudhury, chief, Corporate
Strategy and Planning

Substantial work is happening in each of these areas. For instance, a pilot plant in
Jamshedpur captures CO2 from the blast furnace and uses it to treat cooling water in
the steel plants.

34
 Mr. Choudhury says, "From being good technology adopters, our focus has
changed to being a technology leader in the steel industry. For this, we have identified
several technology leadership areas, including use of green hydrogen in steel value
chain and carbon capture and usage. "Once these shifts happen, it will bring about an
inflection point in the business. Till then, we will keep doing the small things right."

Towards this goal, Tata Steel is collaborating with start-ups, research institutes
and Tata companies like Tata Consulting Engineers Ltd and Tata Auto Comp Systems
Ltd. A vertical called Unventured scouts for collaborations, matches them with

35
business needs, carries out proof-of-concept and integrates the start-up technology
into the mainstream.

Another vertical called Ventures incubates the IP that comes from business
related research into new businesses to generate revenue. The first business being
incubated involves recycling steel making slag, a waste of the steel plant, into a soil
conditioner. Dr Bhattacharjee says, "There is a whole pipeline of intellectual property
waiting to be commercialized in this manner."

36
Driving sustainability

At a time when no regulatory framework existed to decarbonizes the

manufacturing sector, Tata Steel appointed Sanjiv Paul as VP, Safety, Health and
Sustainability, and tasked him with finding ways to embed sustainability in the
organization. Mr. Narendran says, "Since he was a business and operations leader, he
had the credibility to drive this goal."

The goal of sustainability wasn't new to the company. Embedded in its vision
statement is the aspiration to be the global steel industry benchmark for value creation
and corporate citizenship. The framework on which the aspiration rests has four
pillars: environment, health and safety of employees, community, and governance.

What needed to be put in place were the actions that would make sustainability
intrinsic to the business. Mr. Paul says, "Climate and biodiversity are important
existential issues for life as we know it on the planet. Both need to be addressed. From
being a part of the problem, we needed to become a part of the solution."

The company invited the Cambridge Institute of Sustainability to sensitize

everyone, even the union. This learning empowered the entire organization, teaching
employees to consider the needs of the business through the prism of the planet and
its people. Subsequently, Tata Steel institutionalized an internal rate of return for
carbon, calculated for every capital expenditure decision in terms of its future cash
flows at the rate of $40 per tonne of CO2 emission. Mr. Paul says, "These actions are
not demanded by regulation, but we have started taking such decisions even when it
impacts our profitability." The journey towards moving beyond compliance had
begun.

"Our current assets produce steel at the rate of 2.5 tonnes of carbon emissions.
We want to reduce it to 1.8 tonnes of carbon emissions by 2030 through more

37
efficient steelmaking processes." Sanjiv Paul, VP, Safety, Health and
Sustainability

Mr. Paul says, "Our current assets produce steel at the rate of 2.5 tonnes of carbon
emissions. We want to reduce it to 1.8 tonnes of carbon emissions by 2030 through
more efficient steelmaking processes." One way to do this is to increase scrap charge
in the company's steelmaking processes from the current 3-4 percent to 15 percent.
Mr. Paul adds, "The more serap we charge, making it part of the circular economy,
the less we need virgin iron, and hence the less emissions we have."

Other methods to improve efficiencies include improving raw material quality and
lowering emissions using fugitive heat and temperature loss. Efforts are also on to
double capacity from the current 20 million tonnes to 35-40 million tonnes by 2030,
using low carbon intensity processes and recycling scrap through electric arc furnaces.

Electric arc furnaces have a carbon emission of 0.4 tonnes of carbon dioxide, as
against 2.5 tonnes from the blast furnace. The company has set up its first steel
recycling plant, with a capacity of 5 million tonnes per annum, at Rohtak, Haryana. It
is also working with the Ministry of Steel to bring in legislation to formalize the scrap
collection sector in India. Mr. Choudhury says, "We are innovating in the scrap
collection and processing space to boost circularity in our business model."

A lot of hope is riding on the quest of new technologies, as also on plans to work
with hydrogen as the reduction agent in the process rather than carbon. Several
actions are being taken to offset carbon emissions.

38
 The company has started working towards reducing indirect carbon emissions
from the supply chain. Mr. Paul explains, "For every 3 tonnes of raw material
transported to the steel plant, we are able to make 1 tonne of good steel. To reduce
emissions, emerging during transportation, we deployed our bulk carrier, Frontier
Sky, to conduct three trial uses of biofuel.

The carrier transported over 160,000 tonnes of coal from Australia to India."
Besides intertwining sustainability with business operations to offset high carbon
emissions, Tata Steel is part of two pioneering taskforces for nature- and climate-
related financial disclosures. These efforts will enable cash flows to move towards
more sustainable businesses.

Even vendors are required to fulfill Tata Steel's sustainability code and exhibit
ethical conduct towards their work and employees. The company, along with other
steel companies and value chain partners, is part of the Responsible Steel initiative,
which seeks to guide the steel industry towards complete sustainability.

39
Proposed targets for 2030

✔Reducing carbon emissions from 2.5 tonnes to 1.8 tonnes

✔Reducing freshwater requirement from 3.2 cubic liters per tonne of steel to 1.5
cubic liters

✔ Improving EBIDTA of by-products business by 2X.

✔ Sustaining material efficiency at 100 percent

✔ No net loss of biodiversity

Safety first

At Tata Steel, safety is a value, not just a metric. With sites housing factories,
construction work and mines, safety is a hard-won victory. Mr. Paul says, "Our
operations come with risks, so the challenge is to ensure zero accidents. Even one
death is a death too many." The company has enhanced its safety consciousness. The
SHE (Safety, Health and Environment) committee monitors the strategy for safety
across departments. A reward and recognition. mechanism rewards actions taken to
ensure safety.

Digital architecture

Tata Steel's digital journey began over 50 years ago, with the acquiring of its first
computer in 1967. At that time, the company had the foresight to separate information
technology from operational technology, knowing that both require different skill sets
and security systems. Sarajit Jha, chief, Business and Digital Transformation
Solutions, Tata Steel, says, "Tata Steel has a seven-layer IT architecture in place, with
data, advanced analytics and artificial intelligence enabling more informed and
intuitive decisions, and enabling the transition from an intelligent enterprise to a
cognitive one." He adds, "In the recently conducted Data and Analytics Operations
Model assessment Tata Steel secured 3.8 out of 5, that is a group benchmark and
amongst the highest globally. We have set ourselves a target of 4.5/5 by 2025."

40
 The company trained over 12,000 employees on all aspects of digital. Employees
were also trained on translating business problems into analytics or digital problems.
The effort yielded rich dividends. The digital transformation journey has delivered
around Rs 3500 crore to the company within a year of implementation.

Culture of Improvement

Tata Steel sees itself as the most respected and valued steel company globally.
While there are metrics to assess valuation, respect is intangible. Small steps,
however, can be taken that can incrementally add value to the sum total, taking the
organization in the direction it wishes to go. The company has instituted a culture in
which small improvements are institutionalized. More importantly, it has ensured that
this culture of doing the right thing permeates every corner of the organization.

#We Also Make Tomorrow serves as a recurrent motif that not only builds on the
emotional resonance of the past but also points the way to a future in which Tata Steel
continues to add value to the social and economic fabric of our lives.

-Cynthia Rodriguez

41
HERITAGE

JAMSETJI NUSSERWANJI TATA

The foundation of what would grow to become the Tata group was laid in 1868 by
Jamsetji Nusserwanji Tata then a 29-year-old who had learned the ropes of business
while working in his father's banking firm when he established a trading company in
Bombay.

A visionary entrepreneur, an avowed nationalist and a committed philanthropist,

Jamsetji Tata helped pave the path to industrialization in India by seeding pioneering
businesses in sectors such as steel, energy, textiles and hospitality.

42
 RATAN TATA

The beginning of the 1990s ushered in plenty of change in Indian business.

Economic reforms opened up many sectors, signaling increased competition and the
arrival of foreign companies. JRD Tata's death, in 1993, symbolized the end of an era
in more ways than one.

Ratan Tata, who took over as chairman in 1991, guided the Tata group in a fast-
changing business environment where old rules did not apply and new realities were
taking hold. Mr. Tata retired as Chairman of Tata Sons on December 28, 2012.

43
 NATARAJAN CHANDRASEKARAN

Natarajan Chandrasekaran is Chairman of the board of Tata Sons, the holding

company and promoter of more than 100 Tata operating companies with aggregate
annual revenues of more than US S100 billion. He joined the board of Tata Sons in
October 2016 and was appointed Chairman in January 2017.

Chandra also chairs the boards of several group operating companies, including
Tata Steel, Tata Motors, Tata Power, Indian Hotels and Tata Consultancy Services
(TCS) of which he was chief executive from 2009-17.

His appointment as chairman followed a 30-year business career at TCS, which

he joined from university. Chandra rose through the ranks at TCS to become CEO and
managing director of the leading global IT solutions and consulting firm.

Mission Statement: Consistent with the vision and values of the founder Jamsetji
Tata, Tata Steel strives to strengthen India's industrial base through effective
utilization of staff and materials. The means envisaged to achieve this are best

44
technology and high productivity, consistent with modern management practices.
Tata Steel recognizes that while honesty and integrity are essential ingredients of a
strong and stable enterprise, profitability provides the main spark for economic
activity. Overall, the Company seeks to scale the heights of excellence in all it does in
an atmosphere free from fear, and thereby reaffirms its faith in democratic values.

45
 ABOUT THE PRODUCTS

Tata Steel's Jamshedpur Works produces hot and cold rolled coils and sheets,
galvanized sheets, tubes, wire rods, construction rebars and bearings. In an attempt to
'decommoditise' steel, Tata Steel has introduced brands like Tata Steelium (the
world's first branded Cold Rolled Steel), Tata Shaktee (Galvanized Corrugated
Sheets), Tata Tiscon (re-bars), Tata Bearings, Tata Agrico (hand tools and
implements), Tata Wiron (galvanized wire products), Tata Pipes (pipes for
construction) and Tata Structura (contemporary construction material). Apart from
these product brands, the company also has in its folds a service brand called
"steeljunction".

Corus' main operating divisions comprise Strip Products, Long Products and
Distribution & Building Systems Division.

The NatSteel group produces construction grade steel such as rebars, 'cut-and-
bend' cages for construction, mesh, precage bore pile, PC wires and PC strand.

Tata Steel Thailand produces round bars and deformed bars for the construction
industry.

46
 AUDITORS REPORT

Auditors' Report

TO THE MEMBERS OF

TATA STEEL LIMITED

1. We have audited the attached Balance Sheet of TATA STEEL LIMITED, as at 31st
March, 2008, the Profit and Loss Account for the year ended on that date and the
Cash Flow Statement for the year ended on that date both annexed thereto in which
are incorporated the Returns from the Singapore Branch audited by another auditor.
These financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on our
audit.

2. We conducted our audit in accordance with auditing standards generally accepted

in India. Those Standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material

47
misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central
Government of India in terms of sub-section (4A) of Section 227 of the Companies
Act, 1956, we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order to the extent applicable.

4. Further to our comments in the Annexure referred to in paragraph (3) above, we

report that :

(a) we 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 our opinion, proper books of account as required by law have been kept by the
Company so far as appears from our examination of the books and proper returns
adequate for the purposes of our audit have been received from the Singapore Branch
not visited by us. The Branch Auditor's Report has been forwarded to us and
appropriately dealt with;

(c) the Balance Sheet, the Profit and Loss Account and Cash Flow Statement dealt
with by this report are in agreement with the books of account and with the audited
returns from the branch;

(d) in our opinion, the Balance Sheet, the Profit and Loss Account and Cash Flow
Statement dealt with by this report comply with the Accounting Standards referred to
in sub-section (3C) of Section 211 of the Companies Act, 1956;

(e) in our opinion, and to the best of our information and according to the
explanations given to us, the said accounts give the information required by the
Companies Act, 1956, in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India :

48
 (i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st
March, 2008;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for the
year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on
that date.

5. On the basis of written representations received from the directors, as on 31st

March, 2008 and taken on record by the Board of Directors, we report that none of the
directors is disqualified as on 31st March, 2008 from being appointed as a director in
terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

OBJECTIVE OF THE STUDY

➤ TO UNDERSTAND THE CONCEPT OF FINANCIAL STATEMENT

ANALYSIS & HIGHLIGHT IT'S ADVANTAGES & DISADVANTAGES.

➤ TO LEARN THE MEANING OF RATIO ANALYSIS & ITS

IMPORTANCE TO ANY BUSINESS ORGANISATION.

➤ TO STUDY THE FINANCIAL PERFORMANCE OF TATA STEEL OVER

THE PERIOD OF 5 YEAR.

49
Objective

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem .It

may be understood as a science of studying how research is done scientifically. So the
research methodology not only talks about the research methods but also consider the
logic behind the method used in context of the research study.

Research Design

Descriptive research used in this study because it will ensure the minimization of
bias and maximization of reliability of data collected. The researcher had to use fact
and information already available through financial statements of earlier years and
analyze these to make critical evaluation of available material. Hence by making the
type of research conducted to be both Descriptive and Analytical in nature.

Source of Data

50
 The required data for the study are basically secondary in nature and the data are
collected from the audited reports of the company. The sources of data are from the
annual reports of the company from the year 2017-2018 to 2021-2022.

Methods of Data Analysis

The data collected were classified and tabulated for analysis. The analytical tool
used in this study.

The study employs the following analytical tools:

• Graph

• Ratio analysis

Limitation of the Study

The study is based on secondary data, obtained from the publish report and as its
finding depends entirely on the accuracy of such data.

Ratios Used for Data Analysis

➤ CURRENT RATIO

➤ QUICK RATIO

➤ ABSOLUTE LIQUID RATIO

➤ CASH RATIO

➤ DEBT EQUITY RATIO

➤ PROPRIETARY RATIO

51
➤ TOTAL ASSETS TO DEBT RATIΟ

➤ RETURN ON EQUITY

➤ RETURN ON CAPITAL EMPLOYED

➤ RETURN ON SHAREHOLDER'S FUND

➤NET PROFIT RATIΟ

➤ OPERATING PROFIT RATIO

DATA ANALYSIS AND INTERPRETATI0N

52
53
Interpretations

As we can see in the above chart that the current ratio is highest in 2018 and lowest in
2022 it is because they have taken back their investments in the year 2019 so it has
dropped, and in Year 2021 they reinvested their money in the market.

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61
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63
64
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66
 FINDINGS

➤ The higher Current Ratio of the Tata Steel is 1.35 in the year 2018 and the lower
was 0.58 in the year 2022.

➤ The higher Quick Ratio of the Tata Steel is 1.54 in the year 2018 and the lower
was 0.21 in the year 2022.

The higher Absolute Liquid Ratio of the Tata Steel is 0.18 in the year 2018 and the
lower was 0.03 in the year 2019.

➤ The higher Cash Ratio of the Tata Steel is 0.14 in the year 2018 and the lower was
0.04

in the year 2019.

➤ The higher Debt Equity Ratio of the Tata Steel is 0.58 in two years which are 2018
& 2021 and the lower was 0.34 in the year 2022.

➤ The higher Proprietary Ratio of Tata Steel is 0.57 in two years which are 2021 &
2022 and the lower was 0.49 in the year 2018.

➤ The higher Total Assets to Debt Ratio of Tata Steel is 5.18 in the year 2022 and
the lower was 3.50 in the year 2018..

The higher Return on Equity of Tata Steel is 0.26 in the year 2022 and the lower was
0.07 in the year 2018.

➤ The higher Return on Capital Employed of Tata Steel is 0.28 in the year 2022 and
the lower was 0.09 in the year 2018.

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➤ The higher Return on Shareholder's Fund of Tata Steel is 26.32 in the year 2022
and the

lower was 6.78 in the year 2018.

The higher Net Profit Ratio of Tata Steel is 25.59% in the year 2022 and the lower
was 6.89% in the year 2018.

➤ The higher Operating Profit Ratio of Tata Steel is 39.63% in the year 2022 and the
lower was 24.59% in the year 2020,

findings.

68
 CONCLUSION

Efficient management of finance is very important for the success of an

enterprise. Term financial performance is very dynamic term. The subject matter of
financial performance has been changing very rapidly. In present time greater
importance is given to financial performance. So, here an attempt is made by me to
analyze the financial performance of TATA STEEL LTD. While analyzing the
financial performance it can be concluded that TATA Steel is performing good in
terms of Quick assets, better inventory management, and management of fixed assets,
net profit, return on capital employed and dividend payout ratio. These factors play
important role in forming company strategic and operational thinking. Efforts should
constantly be made to improve the financial position up to next level of performance
in order to make benchmark. This will yield greater efficiencies and improve investor
satisfaction. Lastly the policy adopted by government of India under National steel
policy (2017) and policy on preference to domestically. manufactured iron and steel
products is expected to provide the much necessary momentum to the iron and steel
sector of the country.

As per data analysis which we have done above we can say that company is doing
quite is the covid period to when everyone was working from home still company was
doing good as they are a steel company, Covid didn't impact that much to them they
were still able to pay off their debts and also paid a fair amount of dividend to their
shareholders so they also earned good reputation as an organization and now they are
even generating a good employment as it is helping them to grow and pay a good
amount of salary or remuneration or wages & bonuses also. They are having a good
investment which they have made during the years and they have also maintained a
good amount of cash and cash equivalents with them which helps them to pay off
their debts and buy new assets too. They have maintained a good profit which helps
them paying it back too, so it will be easy for them as well to know what they are
doing and how they have to their transactions in the near future which will help them
as an organization. The above graph also shows if they can pay off their debts by
selling their assets or not. It also shows how much they are paying back to the
shareholders which fund they have raised during the time.

69
 SUGGESTIONS

From the findings and analysis of Tata steel ltd for the last five year we can conclude
some suggestions for company so that the company can be more efficient to generate
profit.

➤Current ratio of Tata steel Itd is low it should increase its investments so can meet it
short term obligation smoothly.

➤The company should be maintaining a sound short-term debt paying capacity in

future because they use of more amount of external funds may lead to short-term
insolvency.

➤Liquid ratio of Tata steel ltd is low. So, I suggest that a company maintain proper
Cash and Cash Equivalents so they can fulfill their goals.

➤ All operational and related activities should be performed efficiently and

effectively.

Tata steel ltd has sound solvency position but the company has to avail on the benefit
of trading on equity.

➤ The government intervention in promoting 'Make in India' in public procurement

has resulted in Indian companies garnering over Rs 50 billion in projects.

➤For the very existence and growth, every company has to earn adequate profit. As
regards profitability, the company witnessed a fluctuating trend throughout the study
period, which is not desirable from the management of the company. To keep the
shareholders" happy and reliable the rate of return to the equity shareholders should
be consistent in the years to come.

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➤ They should take time and think properly where they have invested their money
whether

they get a proper return from them or not.

➤ They have also take a drop in sales in the year 2020 they should try some new
techniques. which help them got back in track for a good sales.

➤ Their expenses have also been high in the year 2022 they should try to minimize
them so they can earn and continue their business for a longer period of time.

It also seems like they have invested in some of fixed assets which are property,
plants and equipments because of which their depreciation is also increased.

➤ They have also increased their production which resulted in more of inventories
they should try to keep it in limit as per their storage capacity, it will help them to
give new stock whenever needed.

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 BIBLIOGRAPHY

FROM BOOKS

➤ Kothari C.R. (1990), Research methodology methods and techniques, University

of Rajasthan, New age international (p) limited.

➤ Gupta S.P & Gupta K.L. Management and cost accounting, Sahitya bhavan
publication.

➤ Gupta Shashi k & Sharma RK, management accounting, Kalyani publisher.

➤ Pandey I M, financial management, Vikas publishing house pvt.ltd.

NCERT Book

ONLINE

➤ www.investopedia.com

➤ www.corporatefinanceinstitue.com

➤www.accountingtools.com

➤www.icai.org

➤www.wikipedia.com

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➤www.ncert.nic.in

➤www.google.com

➤www.yourarticlelibrary.com

➤www.wallstreetmojo.com

➤www.geeksforgeeks.org.

➤www.tatasteel.com

➤www.ibef.org

➤www.money.control.com

➤www.constructionworld.in

Biblography
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