Jindal Steel

[JINDAL STEEL PVT. LTD.
World Steel Industries
Steel Industry is a booming industry in the whole world. The increasing demand for it was mainly generated by the development projects that have been going on along the world, especially the infrastructural works and real estate projects that has been on the boom around the developing countries. Steel Industry was till recently dominated by the United States of America but this scenario is changing with a rapid pace with the Indian steel companies on an acquisition spree. World Steel Industries are undergoing a booming phase with all sorts of Mergers and Acquisitions taking place all around the world. The key market players are now subjected to fierce competition from the new companies from developing economies. From the early 1990s, China and South Korea have emerged significantly in the World Steel Industries. In the very recent years India is also on a winning streak in terms of M&A. First of all, it was NRI Laxmi Mittal's Mittal Steel (listed in Netherlands) to acquire Arcelor, many times greater than it. Then came the Indian big shot TATA Steel to acquire Corus, the fifth largest steel company in terms of production capacity. Thus, it is being observed that World Steel Industries is going at a very competitive pace and time where the OECD (Organization for Economic Cooperation and Development) countries don't have their monopoly on the steel market. The main demand for World Steel Industries comes from the construction industry. With the developmental works on a rise in both the developed and developing countries, the infrastructure industry along with real estate boom, the demand for steel is rising like anything. For example, more and more real estate companies are using steel frames for building houses. In USA, it had been observed in the early 1990s that the use of steel for house building has increased by nearly five times in just one year. The automobile industry is also coming up fast as a potential demander for World Steel Industries because from a research it has been found out that the use of steel in the vehicles would cause the weight of the same to lessen by almost twenty five percent.
S.R.LUTHRA INSTITUTE OF MANAGEMENT
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[JINDAL STEEL PVT. LTD.] The other industries who demand steel industries involve appliance industries, Oil and Gas industries and container industries. On the technological front, the World Steel Industries are making rapid improvement with the implementation of cutting-edge technologies like steel making through the utilization of electric furnace, continuous annealing, casting of thin slabs, and vacuum degassing.
IndianSteelIndustry
DuringAncientPeriod The history of iron and steel making in India goes back by several centuries. It dates to 480 BC when archers in India used arrows tipped with steel. The iron pillar of Dhar near Indore in Madhya Pradesh dates back to about 321 AD, the iron pillar of Kutab Minar near Delhi dates back to about 400 AD and the iron beams of Sun temple of Konark in Orissa dates back to 13th century. These pillars are a testimony to ancient India's expertise in the making of steel.
BeforeIndependence The roots of the Indian Steel industry in modern times can be traced to the year 1874, when a company called Bengal Iron works at Kulti near Asansol in West Bengal produced iron. One of the most important landmarks in the history of Indian steel industry was the commencement of the Tata Iron and Steel Company at Jamshedpur in the state of Bihar in 1907.The other prominent steel manufacturers before independence were Indian Iron and Steel Company (1922),Mysore Iron and Steel Works(1923) and Steel Corporation of Bengal (1937).
AfterIndependences India found it difficult to sustain development in steel sector after independence on its own due to the lack of technological development. The high cost of developing technology in this sector proved to be a major hindrance. That's when the government decided to go for synergy with other countries for technology transfer. Some of the prominent steel plant set up then was in Rourkela in collaboration with West Germany and in Bokaro in collaboration with Russia. These steel plants came under the purview of public sector enterprises.
S.R.LUTHRA INSTITUTE OF MANAGEMENT Page 2
[JINDAL STEEL PVT. LTD.]
Country China Japan United State Russia South Korea F.R.Germany Ukraine Brazil India Italy
Crude Steel Production (mtpa) 272.5 112.7 98.9 65.6 47.5 46.4 38.7 32.9 32.6 28.4
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JINDAL STEEL PVT. LTD.
Introduction:
Industry BSE Code Business Group NSE Code Chairman ISIN No Incorporation Registered Office Steel - SpongeIron 532286 Jindal O P Group JINDALSTEL Mrs. Savitri Jindal INE749A01030 15/09/2007 O.P. Jindal Marg, , , Hissar, Haryana - 125005 Website Email: www.jindalsteelpower.com investorcare@jindalsteel.com
Jindal Steel is amongst the largest corporate groups in India. Jindal Group is presently a US $5 billion conglomerate and ranks fourth amongst the top Indian Business Houses in terms of assets. Jindal Steel is one of the largest steel producers in India with 12 plants in India and 2 in USA.
O.P. Jindal is the founder of Jindal Group. He started by trading in steel pipes in Nalwa, a village in the present-day Haryana. In 1952, O.P. Jindal set up the group's first factory at Liluah, near Calcutta for the manufacturing of steel pipes, bends and sockets. Soon thereafter, he set up a similar manufacturing unit at Hisar. In the early 1960s Jindal Steel achieved a breakthrough when it developed India's first 100% indigenous pipe mill at Hisar. In 1970, O.P. Jindal established Jindal Strips Limited and set up a mini steel plant at Hisar to manufacture coils and plates through the electric and furnace route. Since then, Jindal Steel has not looked back and has gone from strength to strength. Today, the group has developed into a multi-faceted organization with revenues in excess of US $5 billion. The organization
[JINDAL STEEL PVT. LTD.] is still expanding, integrating, amalgamating and growing. New directions, new objectives... but the Jindal motto remains the same- "We are the Future of Steel ".
The group has been technology-driven and has a broad product portfolio. Yet, the focus at Jindal has always been steel. From mining of iron-ore to the manufacturing of value added steel products, Jindal has a pre-eminent position in the flat steel segment in India and is on its way to be a major global player, with its overseas manufacturing facilities and strategic manufacturing and marketing alliances with other world leaders. Jindal Organization aims to be a global player.
History
1998 - The name of the Company has been changed from Orbit Strips Ltd. to Jindal Steel & Power Ltd. on 12th June.
1999 - Shri O.P. Jindal, Shri Ratan Jindal and Shri M.L. Gupta were appointed as Additional Directors of the Company in terms of Section 260 of the Companies Act, 1956 and Article 117 of Articles of Association of the Company.
- Shri M.L. Gupta, appointed as Whole time Director of the Company w.e.f. 1st May for a period of five years.
- The Company has joined the Depository System and its securities can be dematerialised.
- The Raigarh and Raipur Divisions of Jindal Strips Limited have been hived off to JINDAL STEEL & POWER LIMITED pursuant to the Scheme of Arrangement approved by Hon'ble High Court of Punjab and Haryana.
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[JINDAL STEEL PVT. LTD.] - The Company has issued 14% 60,00,000 Cumulative Redeemable Preference Shares of Rs. 100/- each aggregating to Rs. 60 crores on private placement basis.
- The Steel Melting Shop of the Company, was shut down in May'98 due to the explosion. It was commissioned in Oct '99.
2000 - The company raised 10.5% Redeemable Cumulative Non-Convertible Preference Shares aggregating to Rs 10 crores, on private placement basis. - Naveen Jindal-controlled Jindal Steel & Power Ltd (JSPL), today announced the launch of another company Infovergix Technologies Ltd., which will provide information technology services and solutions.
- The Company has issued 14% 20,00,000 Cumulative Redeemable Non-Convertible Preference Shares of Rs. 100/- each aggregating to Rs.20 Crores on private Placement basis.
- Round Caster Unit set up in Raigarh has been commissioned in the month of May and has started producing Rounds which is a import substitution product.
- The Company has entered into an agreement with Maharashtra Seamless Ltd. for selling 50,000 MT of Rounds annually for next 5 years at a competitive price.
- The Company has launched Fixed Deposit Schemes in the month of February, which has received tremendous response form the public.
- The Company launched Infovergix Technologies, marking the foray of one more old economy company into the infotech sector.
2001 - The Company is setting up a Coal Washery of 2.5 million MT capacity at the coal mine to meet the additional requirement of coal fo rhte Sponge Iron Plant.
- The Company has introduced a new value added product, Alloy Steel Rounds, suitable for
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[JINDAL STEEL PVT. LTD.] manufacture of seamless tubes.
- Jindal Steel and Power Ltd has signed a memorandum of understanding (MOU) with the Chattisgarh government to invest Rs.6,400 crore in various projects in the state over the next seven years.
2002 - Jindal Steel & Power Ltd has informed that the Board of Directors appointed Shri M L Gupta as Wholetime Director of the company wef December 23, 2002 in place of Shri S N Singh who has resigned from the Directorship of the company from November 15, 2002.
2003 -Jindal Steel & Power, a OP Jindal Group has converted Rs.200cr of debt to Foreign currency loan.
-JSP has posted a net profit of Rs. 144.9 million as compared to Rs. 263.7 million for the same period last year.
-Jindal Steel & Power Ltd. has informed that The Delhi Stock Exchange Association Ltd, (DSE) and The Stock Exchange Ahmedabad (ASE) have communicated their approval regarding delisting of securities from their stock exchange.
2004 -Jindal Steel & Power Ltd. has appointed Mr. Sushil K Maroo as Wholetime Director of the company from May 20, 2004
2005 -Jindal Steel & Power signs MOU with Government of Chhattisgarh on January 07, 2005 -Jindal Steel signs MoU with Jharkand Government on July 05, 2005 -Jindal Steel inks agreement with S. African, German cos for coal gasification facility at its proposed six-million-tonne steel plant in Orissa.
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[JINDAL STEEL PVT. LTD.] 2006 -Bolivia inks JV deal with Jindal for El Mutun development -Jindal Steel & Power Ltd has appointed Shri. Suresh Baid as an Additional Director (independent) on the Board of the Company.
2007 -Jindal Steel & Power Ltd has has appointed Shri A K Purwar, former Chairman, State Bank of India as an Independent Director on the Board of the Company with immediate effect.
- Jindal Steel & Power Ltd has informed that the Board of Directors of the Company has (by circulation) appointed Shri. Ram Vinay Shahi as Additional Director (Independent) and member of the Audit Committee of Directors with effect from October 15, 2007.
-Jindal Steel & Power Ltd has appointed Shri. Arun Kumar Mukherji as an Additional Director and Wholetime Director of the Company with effect from April 01, 2008.
2008 - The Company has splits its face value from Rs5/- to Rs1/-. -Jindal Steel & Power Ltd has informed that Jindal Power Ltd (JPL), subsidiary of the Company, on September 05, 2008 has commissioned fourth power generating unit of 250 MW. With this, the subsidiary Company has completed the 1000 MW power project and has now the capacity to generate 1000 MW power from this plant.
2009 - Jindal Steel & Power Ltd has informed BSE that the Board of Directors has, vide resolution passed through circulation on January 14, 2009, appointed Shri. Ashok K Mohapatra, Shri. Haigreve Khaitan, Shri. Hardip Singh Wirk and Shri. Rahul Mehra as independent directors of the Company with effect from January 14, 2009. - Jindal Steel & Power Ltd has appointed Shri Arun Kumar as an independent directors of the Company w.e.f September 16, 2009. - Jindal Steel & Power Ltd has appointed Shri. Arun Kumar as an Additional Director (Independent) from September 16, 2009, to hold office upto the date of next Annual General Meeting of the Company.
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Management - Jindal Steel
Name
Savitri Jindal Vikrant Gujral Anand Goel Ratan Jindal R V Shahi Arun Kumar Hardip Singh Wirk M L Gupta Ravi Uppal Name Naveen Jindal Ravi Uppal Shallu Jindal Sushil Maroo Arun K Purwar Haigreve Khaitan Inderpal Singh Kalra M L Gupta
Designation
Chairman Emeritus Group Vice Chairman Joint Managing Director Director Independent Director Independent Director Independent Director Addl. Director & WTD Managing Director & CEO Designation Chairman & Whole time Director Managing Director & CEO Additional Director Director & Group CFO Independent Director Independent Director Nominee Director Addl. Director & WTD
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Multi step and common size
MARCH 2008
Particulars
Amt. ( Rs.) ( Multi Step)
Common size
Sales Less: Less: Material Cost Manufacturing Expenses Gross profit Less: Personal cost Less: Administrative selling & other exp. Less: Miscellaneous Expenditure
5368.14 1727.4 670.87 2969.87 132.20 376.00 165.76
100 %
32.18 % 12.50 %
2.46 % 7.00 % 3.09 %
PBDIT Less: Interest PBDT Less: Depreciation Less: Other written Off PBT Add: Other Income PBT Less: Tax
2295.91 243.02 2052.89 451.51 0.27 1601.11 -98.60 1502.51 265.55 4.95 % -1.84 % 8.45 % 0.01 % 4.52 %
PAT
1236.96
23.04 %
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MARCH 2009
Particulars
Common size
7677.83 3419.42 773.84 3484.57 181.46 499.14 166.11
100 %
44.54 % 10.08 %
2.36 % 6.50 % 2.16 %
2637.86 267.89 2369.97 433.03 0.20 1936.74 65.14 2001.88 465.40 6.06 % 0.85 % 5.64 % 0.003 % 3.49 %
PAT
1536.48
20.01 %
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MARCH 2010
Particulars
Common size
7347.44 3179.38 838.4 3329.66 219.72 320.90 233.56
100 %
43.27 % 11.41 %
2.99 % 4.37 % 3.18 %
2555.48 331.66 2223.82 512.16 0.00 1711.66 195.8 1907.46 427.78 5.88 % 2.66 % 6.97 % 0.00 % 4.51 %
PAT
1479.68
20.14 %
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MARCH 2011
Particulars
Common size
9543.47 3679.00 1094.40 4770.07 282.65 497.49 308.39
100 %
38.55 % 11.47 %
2.96 % 5.21 % 3.23 %
3681.54 483.22 3198.32 687.77 0.00 2510.55 242.44 2752.99 688.97 7.22 % 2.54 % 7.21 % 0.00 % 5.06 %
PAT
2064.12
21.62 %
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March - 2012
Particulars Amt. (Rs.) ( Multi Step)
Sales Less: Less: Material Cost Manufacturing Expenses Gross profit Less: Personal cost Less: Administrative selling & other exp. Less: Miscellaneous Expenditure 13286.49 6013.06 1239.02 6034.41 385.44 0.00 1586.48 2.90 % 0.00 % 11.94 % 100 % 45.27 % 9.33 %
Common size
4062.49 536.77 3525.72 867.19 0.00 2658.53 184.48 2843.01 732.36 5.51 % 1.39 % 6.53 % 0.00 % 4.04 %
PAT
2110.65
15.88 %
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TREND ANALYSIS OF jindal steel

PROFIT AND LOSS AIC
PARTICULER Mar ' 08 Mar ' 9 Mar ' 10 Mar ' 11 Mar ' 12
Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Total Expenses Operating Profit PBDIT
6131.63 8433.81 7895.58 100 137.545971 93.618187 763.49 755.95 548.14 100 99.0124298 72.510087 5368.14 7677.83 7347.44 100 143.02589 95.696831 -87.26 54.68 192.87 100 -62.6633051 352.72495 202.89 73.1 40.06 100 36.0293755 54.801642 5483.77 7805.61 7580.37 100 142.340215 97.114383 1930.29 100 407.91 100 132.2 100 262.96 100 376 100 165.76 100 3275.12 100 2295.91 100 2208.65 100 3492.52 3219.44 180.932399 92.181004 414.53 391.8 101.622907 94.516682 181.46 219.72 137.261725 121.08454 359.31 446.6 136.640554 124.29379 499.14 320.9 132.75 166.11 100.211149 5113.07 156.118554 2637.86 114.893877 2692.54 121.908858 64.29058 233.56 140.60562 4832.02 94.503302 2555.48 96.877014 2748.35 102.07276
10460.43 132.484631 916.96 167.28573 9543.47 129.888369 241.02 124.965002 363.6 907.638542 10148.09 133.873281 4042.6 125.568422 568.47 145.091884 282.65 128.640998 525.93 117.763099 497.49 155.029604 308.39 132.038877 6225.53 128.839078 3681.54 144.06452 3922.56 142.72418
14741.81 140.929293 1455.32 158.711394 13286.49 139.220745 184.48 76.5413659 426.7 117.354235 13897.67 136.948628 6439.76 159.297482 838.37 147.478319 385.44 136.366531 400.65 76.1793395 0 0 1586.48 514.439508 9650.7 155.018127 4062.49 110.347572 4246.97 108.270364
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[JINDAL STEEL PVT. LTD.] Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) 243.02 100 1956.63 100 451.51 100 0.27 100 1513.85 100 -11.34 100 1502.51 100 265.55 100 1236.96 100 62.02 100 10.55 100 1539.61 100 80.34 100 267.89 110.233726 2424.65 123.919699 433.03 95.9070674 0.2 74.0740741 1991.42 131.546719 10.46 -92.239859 2001.88 133.235719 465.4 175.258897 1536.48 124.214203 85.33 137.58465 0 0 331.66 123.80455 2416.69 99.671705 512.16 118.27356 0 0 1904.53 95.636782 2.93 28.011472 1907.46 95.283434 427.78 91.916631 1479.68 96.303239 116.52 136.55221 4.28 40.56872 483.22 145.697401 3439.34 142.316143 687.77 134.288113 0 0 2751.57 144.475015 1.42 48.4641638 2752.99 144.327535 688.87 161.033709 2064.12 139.497729 140.19 120.314109 3.75 87.6168224 9342.69 100.325912 22.09 139.01825 536.77 111.081909 3710.2 107.875348 867.19 126.087209 0 0 2843.01 103.323194 0 0 2843.01 103.269899 732.36 106.313238 2110.65 102.254229 149.46 106.612455 3.15 84 9348.34 100.060475 22.58 102.218198
1564.53 9312.34 101.618592 595.21645 99.35 15.89 123.661937 15.993961
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BALANCE SHEET
PARTICULER Sources Of Funds Total Share Capital Equity Share Capital Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits 5,918.94 100 1,183.11 100 4,735.83 100 660.48 100 1,036.19 100 980.56 100 287.38 100 92.35 100 1,360.29 100 1,453.72 100 485.56 100 7,362.90 124.395584 1,617.00 136.673682 5,745.90 121.328257 2,318.01 350.958394 1,233.40 119.032224 1,209.96 123.394795 391.46 136.216856 104.86 113.546291 1,706.28 125.435018 3,278.90 225.552376 204.1 42.0339402 8,814.21 119.711119 2,110.15 130.497835 6,704.06 116.675543 7,225.21 311.698828 1,067.11 86.5177558 1,328.50 109.797018 622.36 158.984315 49.49 47.1962617 2,000.35 117.234569 3,164.54 96.512245 10.61 5.19843214 12,787.35 145.07653 2,786.93 132.072601 10,000.42 149.169608 7,077.87 97.9607513 1,210.01 113.391309 2,204.12 165.910425 737.12 118.439488 37.45 75.6718529 2,978.69 148.908441 5,207.33 164.55251 14.11 132.987747 15,218.36 119.011054 3,655.25 131.156864 11,563.11 115.626244 10,479.86 148.065166 1,412.17 116.7073 3,051.31 138.436655 905.06 122.783265 30.94 82.6168224 3,987.31 133.861194 6,115.66 117.443296 0 0
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Mar '08
Mar '09
Mar '10
Mar '11
Mar '12
15.4 100 15.4 100 3,740.98 100 3,756.38 100 1,783.39 100 2,079.96 100 3,863.35 100 7,619.73 100
15.47 100.454545 15.47 100.454545 5,399.85 144.343193 5,415.32 144.163264 2,105.49 118.061108 2,857.16 137.366103 4,962.65 128.45458 10,377.97 136.198658
93.12 601.939237 93.12 601.939237 6,652.88 123.204904 6,746.00 124.572509 4,235.16 201.148426 4,148.10 145.182629 8,383.26 168.927085 15,129.26 145.78246
93.43 100.332904 93.43 100.332904 8,594.12 129.178942 8,689.34 128.807293 5,530.93 130.595538 6,583.74 158.717003 12,114.67 144.51025 20,804.01 137.508444
93.48 100.053516 93.48 100.053516 10,751.93 125.107981 10,845.41 124.812817 6,848.09 123.81444 7,524.37 114.287168 14,372.46 118.636826 25,217.87 121.21639
[JINDAL STEEL PVT. LTD.] Total CA, Loans & Advances Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets 3,299.57 100 1,533.54 100 581.94 100 2,115.48 100 1,184.09 100 3.14 100 7,619.73 100 5,189.28 157.271402 3,125.83 203.831005 985.81 169.400625 4,111.64 194.359673 1,077.64 91.0099739 3.02 96.1783439 10,377.97 136.198658 5,175.50 99.7344526 3,701.93 118.430305 1,343.71 136.30517 5,045.64 122.715997 129.86 12.0504064 3.02 100 15,129.26 145.78246 8,200.13 158.44131 3,791.27 102.413336 1,896.34 141.127178 5,687.61 112.723262 2,512.52 1934.79131 3.19 105.629139 20,804.01 137.508444 10,102.97 123.204998 5,868.89 154.800107 2,471.35 130.322094 8,340.24 146.638746 1,762.73 70.1578495 0 0 25,217.87 121.21639
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Ratio analysis
It refers to the systematic use of ratios to interpret the financial statements in terms of the operating performance and financial position of a firm. It involves comparison for a meaningful interpretation of the financial statements. In view of the needs of various uses of ratios the ratios, which can be calculated from the accounting data are classified into the following broad categories
A. B. C. D.
Liquidity Ratio Turnover Ratio Solvency Or Leverage Ratios Profitability Ratios
A. LIQUIDITY RATIO
It measures the ability of the firm to meet its short-term obligations that is capacity of the firm to pay its current liabilities as and when they fall due. Thus these ratios reflect the shortterm financial solvency of a firm. A firm should ensure that it does not suffer from lack of liquidity. The failure to meet obligations on due time may result in bad credit image, loss of creditors confidence, and even in legal proceedings against the firm on the other hand very high degree of liquidity is also not desirable since it would imply that funds are idle and earn nothing. So therefore it is necessary to strike a proper balance between liquidity and lack of liquidity.
The various ratios that explains about the liquidity of the firm are 1. Current Ratio 2. Acid Test Ratio / quick ratio 3. Absolute liquid ration / cash ratio
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[JINDAL STEEL PVT. LTD.] 1. CURRENT RATIO The current ratio measures the short-term solvency of the firm. It establishes the relationship between current assets and current liabilities. It is calculated by dividing current assets by current liabilities. Current Ratio = Current Asset Current Liabilities Current assets include cash and bank balances, marketable securities, inventory, and debtors, excluding provisions for bad debts and doubtful debtors, bills receivables and prepaid expenses. Current liabilities includes sundry creditors, bills payable, short- term loans, income-tax liability, accrued expenses and dividends payable. year
2008 2009 2010 2011 2012
Current Assets
1360.29 1706.28 2000.35 2978.69 3987.31
Current Liabilities
1533.54 3125.83 3701.93 3791.27 5868.89
Ratio
0.89 0.55 0.54 0.79 0.68
Current Ratio
1 0.8 Ratio 0.6 0.4 0.2 0 2008 2009 2010 year 2011 2012 0.55 0.54 0.89 0.79 0.68
INTERPRETATION:
In the Year of 2008 comparison of five years Current Ratio of Jindal Steel is (0.89) which is higher than other four years. Year 2008 has highest Current ratio which shows company is able to satisfy its short term obligation.
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[JINDAL STEEL PVT. LTD.] 2. ACID TEST RATIO / QUICK RATIO It has been an important indicator of the firms liquidity position and is used as a complementary ratio to the current ratio. It establishes the relationship between quick assets and current liabilities. It is calculated by dividing quick assets by the current liabilities. Acid Test Ratio = Quick Assets Current liabilities
Quick assets are those current assets, which can be converted into cash immediately or within reasonable short time without a loss of value. These include cash and bank balances, sundry debtors, bills receivables and short-term marketable securities.
year
2008 2009 2010 2011 2012
Quick Asset
2193.59 2866.58 3027.4 3825.1 4972.78
Current Liabilities
1533.54 3125.83 3701.93 3791.27 5868.89
Ratio
1.43 0.92 0.82 1.01 0.85
Quick Ratio
1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 1.43 0.92 1.01 0.82 0.85
Ratio
2008
2009
2010 year
2011
2012
INTERPRETATION:
In the year of 2008, comparison of five years Quick Ratio of Jindal steel is (1.43). which is highest ratio of last five years. Year 2009, 2010, 2011, 2012 has lower Quick ratio it indicate short term liquidity position is good than year 2008.
3. ABSOLUTE LIQUID RATIO / CASH RATIO It shows the relationship between absolute liquid or super quick current assets and liabilities. Absolute liquid assets include cash, bank balances, and marketable securities. Absolute liquid ratio = Absolute liquid assets Current liabilities year
2008 2009 2010 2011 2012
Absolute Liquid Ratio

1128.54 1338.26 1116.6 1247.46 1443.11
Current Liabilities
1533.54 3125.83 3701.93 3791.27 5868.89
Ratio
0.74 0.43 0.30 0.33 0.25
Cash Ratio
0.80 0.60 Ratio 0.40 0.20 0.00 2008 2009 2010 year 2011 2012 0.74 0.43 0.30 0.33 0.25
INTERPRETATION:
In the Year of 2008 comparison of five years Absolute Liquid Ratio of Jindal Steel is (0.74) which is higher than other four years. Year 2008 has highest Absolute Liquid ratio which shows company is in good position rather than other four years.
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[JINDAL STEEL PVT. LTD.] B. TURNOVER RATIO
Turnover ratios are also known as activity ratios or efficiency ratios with which a firm manages its current assets. The following turnover ratios can be calculated to judge the effectiveness of asset use.
1. 2. 3. 4.
Inventory Turnover Ratio Debtor Turnover Ratio Creditor Turnover Ratio Assets Turnover Ratio
1. INVENTORY TURNOVER RATIO This ratio indicates the number of times the inventory has been converted into sales during the period. Thus it evaluates the efficiency of the firm in managing its inventory. It is calculated by dividing the cost of goods sold by average inventory. Inventory Turnover Ratio = Cost of goods sold Average Inventory The average inventory is simple average of the opening and closing balances of inventory. (Opening + Closing balances / 2). In certain circumstances opening balance of the inventory may not be known then closing balance of inventory may be considered as average inventory
year
2008 2009 2010 2011 2012
COGS
3187.63 5038.92 4687.83 5747.32 8745.87
Average Inventory
980.56 1095.26 2540.46 1766.31 2627.71
Ratio
3.25 4.60 1.85 3.25 3.33
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Inventory Turnover Ratio

5.00 4.00 Ratio 3.00 2.00 1.00 0.00 2008 2009 2010 YEAR 2011 2012 1.85 3.25 4.60 3.25 3.33
INTERPRETATION: In the Year of 2009, comparison of five years Inventory Turnover Ratio of Jindal Steel is (4.60) which is higher than other four years. Year 2009 has highest Inventory Turnover Ratio which is better year for the company rather than other years.
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[JINDAL STEEL PVT. LTD.] 2. DEBTOR TURNOVER RATIO This indicates the number of times average debtors have been converted into cash during a year. It is determined by dividing the net credit sales by average debtors.
Debtor Turnover Ratio = Net Credit Sales Average Trade Debtors Net credit sales consist of gross credit sales minus sales return. Trade debtor includes sundry debtors and bills receivables. Average trade debtors (Opening + Closing balances / 2) When the information about credit sales, opening and closing balances of trade debtors is not available then the ratio can be calculated by dividing total sales by closing balances of trade debtor
Debtor Turnover Ratio = Total Sales Trade Debtors
year
2008 2009 2010 2011 2012
Net Sales
5368.14 7677.83 7347.44 9543.47 13286.49
Average Debtors Ratio

287.38 339.42 506.91 679.74 821.09 18.68 22.62 14.49 14.04 16.18
Debtor Turnover Ratio

25.00 20.00 Ratio 15.00 10.00 5.00 0.00 2008 2009 2010 year 2011 2012 18.68 14.49 14.04 22.62 16.18
INTERPRETATION: In the Year of 2009, comparison of five years Debtor Turnover Ratio of Jindal Steel is (22.62) which is higher than other four years. Year 2009 has highest Debtor Turnover Ratio which is better year for the company rather than other years.
[JINDAL STEEL PVT. LTD.] 4. ASSETS TURNOVER RATIO The relationship between assets and sales is known as assets turnover ratio. Several assets turnover ratios can be calculated depending upon the groups of assets, which are related to sales.
a) b) c) d)
Total asset turnover. Fixed asset turnover Current asset turnover Net working capital turnover ratio
a. TOTAL ASSET TURNOVER This ratio shows the firms ability to generate sales from all financial resources committed to total assets. It is calculated by dividing sales by total assets.
Total asset turnover = Total Sales Total Assets year

2008 2009 2010 2011 2012
Net Sales
5368.14 7677.83 7347.44 9543.47 13286.49
Total Asset
7619.73 10377.97 15129.26 20804.01 25217.87
Ratio
0.70 0.74 0.49 0.46 0.53
Total Asset Turnover Ratio

0.80 0.60 Ratio 0.40 0.20 0.00 2008 2009 2010 year 2011 2012 0.70 0.74 0.49 0.46 0.53
INTERPRETATION: In the Year of 2009 & 2008, comparison of five years Total Asset Turnover Ratio of Jindal Steel is (0.74) & (0.70) which is higher than other years. Year 2009 & 2008 has highest Total Asset Turnover Ratio which is better year for the company rather than other years.
b. FIXED ASSET TURNOVER This ratio is calculated by dividing sales by net fixed assets.
Fixed asset turnover = Total Sales Net Fixed Assets Net fixed assets represent the cost of fixed assets minus depreciation. year
2008 2009 2010 2011 2012
Net Sales
5368.14 7677.83 7347.44 9543.47 13286.49
Net Fixed assets

5772.02 6979.3 7771.17 11210.52 12975.28
Ratio
0.93 1.10 0.95 0.85 1.02
Fixed Asset Turnover Ratio

1.20 1.00 0.80 Ratio 0.60 0.40 0.20 0.00 2008 2009 2010 year 2011 2012 0.93 1.10 0.95 0.85 1.02
INTERPRETATION: In the Year of 2009 & 2012, comparison of five years Fixed Asset Turnover Ratio of Jindal Steel is (0.74) & (0.70) which is higher than other years. Year 2009 & 2012 has highest Fixed Asset Turnover Ratio which is better year for the company rather than other years. Fixed Asset Turnover Ratio all year is few differently change that is ideal for the company.
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[JINDAL STEEL PVT. LTD.] c. CURRENT ASSET TURNOVER It is divided by calculating sales by current assets
Current asset turnover = Total Sales Current Assets year

2008 2009 2010 2011 2012
Net Sales
5368.14 7677.83 7347.44 9543.47 13286.49
Current Assets
1360.29 1706.28 2000.35 2978.69 3987.31
Ratio
3.95 4.50 3.67 3.20 3.33
Current Asset Turnover

5.00 4.00 Ratio 3.00 2.00 1.00 0.00 2008 2009 2010 year 2011 2012 3.95 4.50 3.67 3.20 3.33
INTERPRETATION: In the Year of 2008 Current Asset Turnover Ratio is (3.95) that is increase in year 2009 (4.50) that is better for company. After year 2009 Current Asset Turnover Ratio is decrease in year 2010 & 2011 but after in the year 2012 Current Asset Turnover Ratio is increase that is (3.33) it is better for the company.
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[JINDAL STEEL PVT. LTD.] d. NET WORKING CAPITAL TURNOVER RATIO A higher ratio is an indicator of better utilization of current assets and working capital and vice-versa (a lower ratio is an indicator of poor utilization of current assets and working capital). It is calculated by dividing sales by working capital.
Net working capital turnover ratio = Total Sales Working Capital Working capital is represented by the difference between current assets and current liabilities. year
2008 2009 2010 2011 2012
Net Sales
5368.14 7677.83 7347.44 9543.47 13286.49
Working Capital
-1881.58 -812.58 -1701.58 -1419.55 -173.25
Ratio
-2.85 -9.45 -4.32 -6.72 -76.69
Net Working Capital

0.00 -20.00 Ratio -40.00 -60.00 -80.00 -100.00 year -76.69 -2.85 1 -9.45 2 -4.32 3 -6.72 4 5
INTERPRETATION: Net Working Capital of Jindal Steel of all year is minus that is bad position of company for the Net Working Capital.
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[JINDAL STEEL PVT. LTD.] C. SOLVENCY OR LEVERAGE RATIOS The solvency or leverage ratios throws light on the long term solvency of a firm reflecting its ability to assure the long term creditors with regard to periodic payment of interest during the period and loan repayment of principal on maturity or in predetermined installments at due dates. There are thus two aspects of the long-term solvency of a firm. a. Ability to repay the principal amount when due b. Regular payment of the interest. The ratio is based on the relationship between borrowed funds and owners capital it is computed from the balance sheet, the second types are calculated from the profit and loss a/c. The various solvency ratios are 1. 2. 3. 4. Debt equity ratio Debt to total capital ratio Proprietary (Equity) ratio Debt service (Interest coverage) ratio
1. DEBT EQUITY RATIO Debt equity ratio shows the relative claims of creditors (Outsiders) and owners (Interest) against the assets of the firm. Thus this ratio indicates the relative proportions of debt and equity in financing the firms assets. It can be calculated by dividing outsider funds (Debt) by shareholder funds (Equity) Debt equity ratio = Outsider Funds (Total Debts) Shareholder Funds or Equity The outsider fund includes long-term debts as well as current liabilities. The shareholder funds include equity share capital, preference share capital, reserves and surplus including accumulated profits. However fictitious assets like accumulated deferred expenses etc should be deducted from the total of these items to shareholder funds. The shareholder funds so calculated are known as net worth of the business. year
2008 2009 2010 2011 2012
Total Debts
3863.35 4962.65 8383.26 12114.67 14372.46
Equity
3756.38 5415.32 6746 8689.34 10845.41
Ratio
1.03 0.92 1.24 1.39 1.33
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Debt Equity Ratio

1.50 Ratio 1.00 0.50 0.00 2008 2009 2010 year 2011 2012 1.24 1.03 0.92 1.39 1.33
INTERPRETATION: In the year of 2011& 2012 comparison of five years Jindal Steel Debt Equity Ratio is (1.39) & (1.33) is higher than other years that is higher debt on company in this two year compare of another years. Higher debt is bad for the company.
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[JINDAL STEEL PVT. LTD.] 2. DEBT TO TOTAL CAPITAL RATIO Debt to total capital ratio = Total Debts Total Assets year
2008 2009 2010 2011 2012
Total Debts
3863.35 4962.65 8383.26 12114.67 14372.46
Total Asset
7619.73 10377.97 15129.26 20804.01 25217.87
Ratio
0.51 0.48 0.55 0.58 0.57
Debt To Total Capital Ratio

0.80 0.60 Ratio 0.40 0.20 0.00 2008 2009 2010 year 2011 2012 0.51 0.48 0.55 0.58 0.57
INTERPRETATION: In the comparison of five years Jindal Steel Debt to Total capital Ratio is in 2008 (0.51), 2009 (0.48), 2010 (0.55), 2011 (0.58) & 2012 (0.57) is all are few different that is better for the company. Lower debt to total capital ratio is better for the company.
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3. PROPRIETARY (EQUITY) RATIO This ratio indicates the proportion of total assets financed by owners. It is calculated by dividing proprietor (Shareholder) funds by total assets. Proprietary (equity) ratio = Shareholder funds Total assets year
2008 2009 2010 2011 2012
Shareholder Fund
3756.38 5415.32 6746 8689.34 10845.41
Total Asset
7619.73 10377.97 15129.26 20804.01 25217.87
Ratio
0.49 0.52 0.45 0.42 0.43
Proprietary Ratio
0.60 0.50 0.40 0.30 0.20 0.10 0.00 0.49 0.52 0.45 0.42 0.43
Ratio
2008
2009
2010 year
2011
2012
INTERPRETATION: Proprietary Ratio of Jindal Steel is in the year 2008, 2009 , 2010 ,2011 , 2012 are respectively that 0.49, 0.52 , 0.45, 0.42 , 0.43. The few percentage change in all years. Higher Proprietary ratio indicates relatively little danger to creditors and vice-versa.
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[JINDAL STEEL PVT. LTD.] 4. DEBT SERVICE (INTEREST COVERAGE) RATIO This shows the number of times the earnings of the firms are able to cover the fixed interest liability of the firm. This ratio therefore is also known as Interest coverage or time interest earned ratio. It is calculated by dividing the earnings before interest and tax (EBIT) by interest charges on loans.
Debt Service Ratio = Earnings before interest and tax (EBIT) Interest Charges year
2008 2009 2010 2011 2012
EBIT ( PBDIT DEP.)

1757.14 2259.51 2236.19 3234.79 3379.78
Interest charges
243.02 267.89 331.66 483.22 536.77
Ratio
7.23 8.43 6.74 6.69 6.30
Interest coverage
10.00 8.00 Ratio 6.00 4.00 2.00 0.00 2008 2009 2010 Year 2011 2012 7.23 8.43 6.74 6.69 6.30
INTERPRETATION: Interest Coverage Ratio of Jindal Steel is very strong in 2009 & 2008 it shows the company ability to repay principal.
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[JINDAL STEEL PVT. LTD.] PROFITABILITY RATIOS The profitability ratio of the firm can be measured by calculating various profitability ratios. General two groups of profitability ratios are calculated. a. Profitability in relation to sales. b. Profitability in relation to investments. PROFITABILITY IN RELATION TO SALES
1. 2. 3. 4. 5.
Gross profit margin or ratio Net profit margin or ratio Operating profit margin or ratio Operating Ratio Expenses Ratio
1. GROSS PROFIT MARGIN OR RATIO It measures the relationship between gross profit and sales. It is calculated by dividing gross profit by sales. Gross profit margin or ratio = Gross profit X 100 Net sales Gross profit is the difference between sales and cost of goods sold. year
2008 2009 2010 2011 2012
Gross Profit
2180.51 2638.91 2659.61 3796.15 4540.62
Net Sales
5368.14 7677.83 7347.44 9543.47 13286.49
Ratio
40.62 34.37 36.20 39.78 34.17
Gross Profit Margin

45.00 Ratio 40.00 35.00 34.37 30.00 2008 2009 2010 year 2011 2012 40.62 36.20
39.78 34.17
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INTERPRETATION: Gross Profit Margin Of Jindal Steel is better in the Year 2008 & 2011 that is good position for the company. Higher ratio is better for the company. Gross profit should be adequate to cover operating expenses in year 2008 & 2011.
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[JINDAL STEEL PVT. LTD.] 2. NET PROFIT MARGIN OR RATIO It measures the relationship between net profit and sales of a firm. It indicates managements efficiency in manufacturing, administrating, and selling the products. It is calculated by dividing net profit after tax by sales. Net profit margin or ratio = Earning after tax X 100 Net Sales year
2008 2009 2010 2011 2012
EAT
1236.96 1536.48 1479.69 2064.12 2110.65
Net Sales
5368.14 7677.83 7347.44 9543.47 13286.49
Ratio
23.04 20.01 20.14 21.63 15.89
Net Profit Ratio

25.00 20.00 Ratio 15.00 10.00 5.00 0.00 2008 2009 2010 year 2011 2012 23.04 20.01 20.14 21.63 15.89
INTERPRETATION: Net Profit Margin Of Jindal Steel is better in the Year 2008 & 2011 that is good position for the company. Higher ratio is better for the company. This ratio expresses the relationship between net profit and Net sales.
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[JINDAL STEEL PVT. LTD.] 3. OPERATING PROFIT MARGIN OR RATIO Operating profit margin or ratio establishes the relationship between operating profit and net sales. It is calculated by dividing operating profit by sales.
Operating profit margin or ratio = Operating Profit X 100 Net sales Operating profit is the difference between net sales and total operating expenses. (Operating profit = Net sales cost of goods sold administrative expenses selling and distribution expenses.)
year
2008 2009 2010 2011 2012
Operating Profit
2295.91 2637.86 2555.48 3681.54 4062.49
Net Sales
5368.14 7677.83 7347.44 9543.47 13286.49
Ratio
42.77 34.36 34.78 38.58 30.58
Operating Profit Ratio

50.00 40.00 30.00 20.00 10.00 0.00 Ratio 42.77 34.36 34.78 38.58 30.58
2008
2009
2010 year
2011
2012
INTERPRETATION: Operating Profit Margin of Jindal Steel is better in the Year 2008 & 2011 that is good position for the company. Higher ratio is better for the company. This ratio expresses the relationship between Operating profit and Net sales.
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[JINDAL STEEL PVT. LTD.] PROFITABILITY IN RELATION TO INVESTMENTS 1. Return on net worth 2. Return on share capital employed 3. Return on shareholders investment or shareholders capital employed.
1. RETURN ON NET WORTH This ratio establishes the relationship between net profit and the gross capital employed. The term Net Worth refers to the total investment made in business. The conventional approach is to divide Earnings after Tax (EAT) by gross capital employed.
Return on Net Worth = Earnings After Tax (EAT) X 100 Net Worth year
2008 2009 2010 2011 2012
EAT
1236.96 1536.48 1479.68 2064.12 2110.65
Net Worth
3756.38 5415.32 6746 8689.34 10845.41
Ratio
32.93 28.37 21.93 23.75 19.46
Return on Net Worth

35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 32.93 28.37 21.93 23.75 19.46
Ratio
2008
2009
2010 year
2011
2012
INTERPRETATION: Return on Net Worth of Jindal Steel in year 2008 is higher than the other years which indicates better for the company. Indicates the percentage return on capital employed in the business. Higher Ratio Is better for the company.
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2. RETURN ON SHARE CAPITAL EMPLOYED
This ratio establishes the relationship between earnings after taxes and the shareholder investment in the business. This ratio reveals how profitability the owners funds have been utilized by the firm. It is calculated by dividing Earnings after tax (EAT) by shareholder capital employed. Return on share capital employed = Earnings after tax (EAT) X 100 Shareholder capital employed year
2008 2009 2010 2011 2012
EAT
1236.96 1536.48 1479.68 2064.12 2110.65
Shareholder Capital
1540 1547 9312 9343 9348
Ratio
80.32 99.32 15.89 22.09 22.58
Return On Share Capital

120.00 100.00 80.00 60.00 40.00 20.00 0.00 99.32 80.32
Ratio
15.89 2008 2009 2010 year
22.09 2011
22.58 2012
INTERPRETATION: Return on Net Worth of Jindal Steel in year 2008 & 2009 extremely higher than the other years which indicates better for the company. Indicates the percentage return on share holders funds. Higher Ratio Is better for the company.
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3. RETURN ON EQUITY SHARE CAPITAL EMPLOYED Equity shareholders are entitled to all the profits remaining after the all outside claims including dividends on preference share capital are paid in full. The earnings may be distributed to them or retained in the business. Return on equity share capital investments or capital employed establishes the relationship between earnings after tax and preference dividend and equity shareholder investment or capital employed or net worth. It is calculated by dividing earnings after tax and preference dividend by equity shareholders capital employed. Return on equity share = Earnings after tax (EAT)- preference dividends X 100 Capital employed Equity share capital employed year
2008 2009 2010 2011 2012
EAT
1236.96 1536.48 1479.68 2064.12 2110.65
Shareholder Capital
1540 1547 9312 9343 9348
Ratio
80.32 99.32 15.89 22.09 22.58
Return On Equity Share Capital

120.00 100.00 Ratio 80.00 60.00 40.00 20.00 0.00 2008 2009 2010 year 2011 2012 15.89 22.09 22.58 80.32 99.32
INTERPRETATION: Return on Net worth of Jindal Steel in year 2008 & 2009 extremely higher than the other years which indicate better for the company. Indicates the percentage return on Equity share holders funds. Higher Ratio Is better for the company.
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[JINDAL STEEL PVT. LTD.

World Steel Industries

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.]

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.]

JINDAL STEEL PVT. LTD.

S.R.LUTHRA INSTITUTE OF MANAGEMENT

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.] manufacture of seamless tubes.

S.R.LUTHRA INSTITUTE OF MANAGEMENT

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.]

Management - Jindal Steel

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.]

Multi step and common size

Amt. ( Rs.) ( Multi Step)

5368.14 1727.4 670.87 2969.87 132.20 376.00 165.76

2.46 % 7.00 % 3.09 %

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.]

Amt. ( Rs.) ( Multi Step)

7677.83 3419.42 773.84 3484.57 181.46 499.14 166.11

2.36 % 6.50 % 2.16 %

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.]

Amt. ( Rs.) ( Multi Step)

7347.44 3179.38 838.4 3329.66 219.72 320.90 233.56

2.99 % 4.37 % 3.18 %

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.]

Amt. ( Rs.) ( Multi Step)

9543.47 3679.00 1094.40 4770.07 282.65 497.49 308.39

2.96 % 5.21 % 3.23 %

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.]

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.]

TREND ANALYSIS OF jindal steel

S.R.LUTHRA INSTITUTE OF MANAGEMENT

1564.53 9312.34 101.618592 595.21645 99.35 15.89 123.661937 15.993961

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.]

S.R.LUTHRA INSTITUTE OF MANAGEMENT

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.]

Liquidity Ratio Turnover Ratio Solvency Or Leverage Ratios Profitability Ratios

S.R.LUTHRA INSTITUTE OF MANAGEMENT

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.]

Absolute Liquid Ratio

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.] B. TURNOVER RATIO

S.R.LUTHRA INSTITUTE OF MANAGEMENT

[JINDAL STEEL PVT. LTD.]

Inventory Turnover Ratio

S.R.LUTHRA INSTITUTE OF MANAGEMENT

Debtor Turnover Ratio = Total Sales Trade Debtors

Average Debtors Ratio

Debtor Turnover Ratio

Total asset turnover = Total Sales Total Assets year

Total Asset Turnover Ratio

[JINDAL STEEL PVT. LTD.]