An Analytical Study of Three years Published Data of TATA STEEL LIMITED

Bombay House, 24, Homi Mody Street, Fort, Mumbai-400 001.

2009-10
Submitted to:
N. R. Institute of Business Administration. GLS Campus, Ellisbridge Ahmedabad 380 006.

Submitted by:
Amit H. Ghodasara S.Y.B.B.A Roll no : 57

N.R. InstituteOf Business Administration.

GLSCampus, Mardia Plaza, Off. C.G.Road, Ellisbridge, Abad-380006. Ph.:- 26430373

CERTIFICATE
This is to certify that the report on the

Annual Report of TATA STEEL LTD is submitted by Mr. Amit H. Ghodasara to N. R. Institute of Business Administration. Affiliated to the Gujarat University in partial fulfillment of the requirements for the completion of practical studies at the second year B.B.A. programme for the year 2009-10. of the

I/C Director. Charge.

Prof. In.

Date :

PREFACE
Management means at art of getting the things done through others. Today we find management in each and every field. Its a developing field. This are Frequent change in its principles due to increasing complexities that we find around the financial area in management field. Today finance function has played a significant role in the field of management.

As a student of S.Y.B.B.A. I study the finance function in this report as practical study. So, in this report the analysis of financial statements has been done at TATA STEEL LIMITED.

Financing is the process of organizing the flow of funds so that a business can worry out its objective is the most efficient manners. In the word of Joseph & Massie, financial management is the operation activity of a business that is responsible for obtaining and effectively utilizes the funds necessary for efficient operation.

ACKNOWLEDGEMENT
I am thankful to TATA STEEL LTD. I am especially thankful to group members for helping me in my Practical Studies. I take this opportunity to thank our Director, Prof. Avani Desai, Prof.-in-charge Sima Pandit for their encouragement and the office staff for providing us all the facilities for making the report more learning oriented.

Date:

AMIT GHODASARA S.Y.B.B.A

INDEX
NO
1. 2. 3. Preface. Acknowledgement. Company Profile. Result of Operations. Ratio Analysis. a) Profitability Ratio - Gross Profit Ratio. - Net Profit Ratio. - Return on Share Holders Fund. - Return on Equity Share Holders Fund. - Earning per Share Ratio. - Dividend Per Share Ratio. - Operating Ratio. - Return on Capital Employed. - Expense Ratio. - Return on Equity Share Capital. - Price Earning Ratio. - Dividend Yield Ratio. - Interest Coverage Ratio.

PARTICULAR

P.N.

b) Activity / Turnover Ratio. - Stock Turnover Ratio. - Debtors Turnover Ratio. - Creditors Ratio. - Creditors Turnover Ratio. - Overall Turnover Ratio. - Fixed Assets Turnover. c) Liquidity Ratio. - Current Ratio. - Liquid Ratio. - Quick / acid Test Ratio. d) Leverage Ratio. - Debt-equity Ratio. - Proprietary Ratio. e) Other. - Long Term Funds to Fixed Assets. 4. 5. 6. 7. Accounting Policies and Notes on Accounts. Directors Report. Auditors Report. Common-size Statements. - Profit & Loss Account. - Balance Sheet. - Comparison of common size with absolute P&L and Balance Sheet Findings.

CHAPTER 1 COMPANY PROFILE

1.1 1.2 1.3 1.4 1.5 1.6 1.7 Name of the Company Registered address of the company. Brief introduction of the activities of the business. Status in the market. Special achievements. Financial Highlights. Meaning of analysis and objective of study

1.1Name of the Company TATA STEEL LIMITED

Chairman: Ratan N. Tata Managing Director:Mr. B. Muthuraman Board of Directors: Mr. James Leng Mr.Nusli N. Wadia Mr.S.M.Palia Mr.Jacobus Schraven Mr.Anthony Hayward Mr.Andrew Robb Mr.Suresh Krishna Mr.Ishaat Hussain Dr.Jamshed J. Irani Mr. Subhodh Bhargava Mr. Kirby Adams Mr.H.M.Nerurkar

1.2 Registered address of the Company:

TATA STEEL LIMITED

Bombay House, 24, Homi Mody Street, Fort, Mumbai-400 001, India. Tel: (022) 66658282 Fax:(022)66657724/66657725 E-mail: cosectisco@tata.com Website: www.tatasteel.com

1.3 Brief introduction of the activities of the business Coal mining :

Tata steel has a strategic interest of 5 % in coal mining project. The first coal production started in august 2006 and the mine si currently producing around the industry.

Lime stone project:

Lime stone is a key raw material for producing quality steel TATA steel has so far been sourcing lime stone from behavioral safety. A safety curriculum has been introduced in the school in Jamshedpur to generate an awakening with in the company.

Iron ore project

In September 2008 TATA steel through its subsidiaries had signed a heads of agreement memorandum with New Millennium Capital corporation.

1.4 Status in the market

Tata steel ltd is one of the large company of Indian steel market . Tata steel ltd is very wide spread in all over the World Tata steel has always played a vital role in the growth of Indias economy and also one of the oldest company of Indian steel market . Tata export product 108 countries. This demonstrates Tata global competitiveness the world class quantity of its products and superior logistical capabilities.

1.5 Special Achievements

Tata steel India wins the Deming application price 2008 . Tata steel group won some key awards The crowing glory this year was the Deming application price 2007 which is the highest awards for quality in the world. The best establishment award by the president of India mrs Pratibha Devisigh Patil. For the third time running Net Steel holding whom the work life excellence award in 2008.

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1.6 financial highlights

Year 2006-07 2007-08 2008-09 Net profit (Rs. In crores) 4222.15 4687.03 5201.74 Net sales (Rs. In crores) 17,320.68 19,442.62 23,983.8 EPS (in rupees) 72.71 63.85 69.70

1.7 Meaning of analysis and objective of study:

Meaning of analysis:

Financial statements, as prepared and presented annually are of the little use for the guidance of prospective investors, creditors or even management. If relationship between the two related items in these financial statements is established, the can provide useful clue to gauge accurately financial health and ability of business to make profit. This relationship between the two related items of financial statements is known as ratios.

Ration analysis is the process of comparison of one figure against another and the interpretation of the ration to know the strengths and weaknesses of the firms operations and of its financial positions.

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Objective of study: Ratio analysis helps various interested parties like prospective investors, creditors, banks and employees etc. to draw useful conclusions to serve their purpose. Ratio analysis also helps to determine the performance of particular firm whether they have done favourable or unfavourable business in past and present years.

It is useful to get practical knowledge about the financial information of the company.

The study of the financial statements of the company is one of the most important aspects of studying management and also to determine the position of the company in capital market.

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(2) RESULT OF OPERATION

Year 2006-07 2007-08 2008-09

Gross Profit Net profit E.B.I.T (Rs. In crores) (Rs. In crores) (Rs. In crores) 10,345.02 4222.15 6413.75 11,994.19 4687.03 6845.23 13,833.3 5201.74 7315.61

2.2 Important of cash profit

Finance is the life blood of business. Any company does business for profit. By seeing the profitability of the business various investors invests in it. All the company producing different goods & service having different objective strive to earn more and more profit. Main aim of the company in the end is to earn more profit. Profit shows the image of the firm in the market. A cash flow statement is additional information to see of financial statement. This statement exhibits the flow of incoming and outgoing cash. This statement assesses the ability of the enterprise to generate the cash utilize the cash. In the company various ratios are designed to indicate the profitability of the business. Eg gross profit ratio, net profit ratio, operating ratio, return on total Assets, earning per share, etc. Profit is the test of economic efficiency. Profit is the barometer of success of the firm it measures the profitability of the activity which firm undertakes.
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2.3 Cashflow statement:

A Statement showing inflow of cash and outflow of cash during the last year and as a result the balance of cash at the end of the year is known as cash flow statement.

Cash Flow Statement for the year ended 31st March,2009 (Rs. in Crore) Particulars Amount Amount A. CASH FLOW FROM OPERATING ACTIVITY: 7315.61 Net profit before tax Adjusted for: Depreciation (Profit/loss on sale of Assets/Discarded Assets written off (Profit)/loss on sale of other investments (Gain)/Loss on cancellation of forward covers/options Provision for diminution in value of investments Interest and income from current investment Income from other investments Interest charged to profit and loss account Amortisation of employee separation compensation Provision for Wealth Tax Exchange (Gain)/loss on revaluation of foreign currency loans Amortisation of long term loan expenses
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973.40 6.43 (186.46) (26.62) 0.10 (336.81) (101.62) 1489.50 222.34 1.00 67.91 32.71 2141.88 9457.49

Operating Profit before Working Capital Changes Adjustment for Trade and other receivables Inventories Trade payables and other liabilities Cash generated from operations Direct taxes paid Net Cash from Operating Activities B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets Sale of fixed assets Purchase of investments Purchase of investments in Subsidiaries Sale of investments Inter-corporate deposits Interest and income from current investments received Dividend received Net Cash used in Investing Activities C. CASH FLOW FROM FINANCING ACTIVITES Issue of Equity Capital Issue of Cumulative Convertible Preference Shares Proceeds from borrowings Repayment of borrowings Amount received on cancellation of forward covers/options
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(159.25) (875.49) 1772.03 737.29 10194.78 -2797.56 7397.22

(2786.29) 15.18 (59903.25) (4439.80) 57181.61 90.73 312.12 101.62 (9428.08)

0.25 0.14 6494.43 (894.39) (10.17)

Long term loan expenses Interest paid Dividend paid Net cash from Financing Activities Net increase/(decrease) in Cash or Cash equivalents (A+B+C) Opening Cash and Cash equivalents Closing Cash and Cash equivalents

(32.51) (1213.96) (1187.37) 3156.42 1125.56

465.04 1590.60

2.4 INTERPRETATION

According to the format of cash flow statement its first item is cash flow from Operating activites. In cash flow statement net profit before tax is taken this is difference between 2008-09 and 2007-08. Following items are added in net profit before tax: 973.40 6.43

Depreciation Loss on sale of assets Provision for diminution in Value of investment Interest charged to profit-loss Account Amortization of employee Separation compensation Provision for Wealth tax
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0.10

1489.50

222.34 1.00

Exchange (gain)/ loss on revaluation of foreign currency loans Amortisation fo long term loan expenses 32.71 67.91

Following items are deducted from net profit before tax:

(profit)/loss on sale of other investment (186.46) (Gain)/loss on cancellation of forwards covers/options (26.62)

Interest and income from current investment (336.81) Income from other investment (101.62)

Now the difference is known as operating profit before working capital changes which is 9457.49. Now items which increase assets will deduct from above figure and items which decrease assets and increase debts will add. Trade payables are added which is 1772.03. Trade & other Receivables Inventories Taxes paid (159.25)

(875.49) (2797.56)

Now the figure is known as Net cash from operating Activities which is 7397.22.

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 Second item according to cash flow format is cash flow from investing activities: and transactions which create cash outflow are deducted. Following items are added: Sale of fixed assets 15.18 Inter-corporate depositis90.73 Sale of investments 57181.61 Interest and income from current investments 312.12 Dividend received 101.62 Following items are deducted: Purchase of fixed assets (2786.29) Purchase of investments (59903.25) Purchase of investments in subsidiaries (4439.80) Final figure known as Net Cash used for investing activities which is 9428.08 Third item according to cash flow format is cash flow from financing activities. Following items are added: Issue of equity share capital 0.25 Issue of cumulative convertible preference shares 0.14Proceeds from borrowings 6494.43 Following items are deducted: Repayment of borrowings (894.39)
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In this transactions which create cash inflow will added

Amount received on cancellation of forward covers/options (10.17) Long term loan expenses (1213.96) Dividend paid (1187.37) Third item according to cash flow format is cash flow from financing activities. Following items are added: Issue of equity share capital 0.25 Issue of cumulative convertible preference shares 0.14 Proceeds from borrowings 6494.43 Following items are deducted: Repayment of borrowings (894.39) Amount received on cancellation of forward covers/options (10.17) Long term loan expenses (1213.96) Dividend paid (1187.37) Final will called as Net cash from financing activities which is 3156.42 crores. At last three added together which called net increase in cash and cash equivalents which is 1125.56. In this figure opening balance of cash or cash equivalent added which are 465.04 crore. At the end answer came 1590.60 crore which called Closing Balance of Cash or Cash Equivalents.

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Ratio Analysis
Meaning:Financial statements, as prepared and presented annually are of little use for the guidance of prospective investors, creditors or even management. If relationships between various related items in these financial statements are established, they can provide useful clue to gauge accurately the financial health and ability of business to make profit. This relationship between the two related items of financial statements is known as ratio.

Importance: Thus a ratio is one number expressed in terms of another. It is a mathematical yardstick that measures the relationship between two figures. Ratio analysis is a process of comparison of one figure against another and the interpretation of the ratios to know the strengths and weaknesses of the firms operations and of its financial position. Ratio analysis helps various interested parties like prospective investors, creditors, banks, employees etc. to draw useful conclusions to serve their purpose. The use of ratios is becoming increasing popular recently. The banks used the current ratio to judge the capacity of the borrowing firm to repay the loan and to make regular interest payments. Today it has assumed such an importance that anybody connected with business turns to ratios for measuring the financial strength and earning capacity of the business.

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 The suppliers of funds in the form of share capital would like to analysis the accounts to ascertain its earning capacity and future prospects o . A banker or creditor will measure the repaying capacity and the financial strength on the basis of accounting ratios.

Classification:The ratios can be classified as follows: (A) Traditional Classification (B) Functional Classification

(A)Traditional Classification: The ratios are grouped into three categories on the basis of the financial statement from which the figures are taken for computing the ratios. The ratios according to the classifications are: (1) Revenue Statement Ratios. (2) Balance Sheet Ratios. (3) Composite Ratios. (B) Functional Classification: Ratios are also grouped in accordance with certain tests. On this basis there are four categories of ratios:

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(1) Liquidity Ratios.

This ratio is very much useful to know the working capital condition of the business. That means we can understand company is able to pay expenses in time or not. They include: current ratio, liquid ratio, Acid-test ratio.
(2) Profitability Ratios:

Useful information about the trend of profitability is available from profitability ratios. The gross profit ratio, net profits ratio and ratio of return on investment give the good idea of the profitability of the business. On the basis of these ratios, the management gets the idea about the efficiency of managers of the firm.
(a) Gross Profit Ratio. (b) Net Profit Ratio. (c) Operating Ratio. (d) Return on Total Assets. (e) Return on Capital Employed. (f) Return on Shareholders Equity. (g) Return on Equity Share Capital. (h) Earning Per Share EPS. (i) Divided Per Share. (j) Divided Pay-out Ratio. (3) Leverage Ratios or Structural Ratios:

This ratio gives us the idea about the financial position of the business. This ratio is mainly help to the investors of the company and they can decide that how much their funds are uses.
(a) Proprietary Ratio. (b) Debt-Equity Ratio. (c) Gearing Ratio. (d) Fixed Capital-Fixed Assets Ratio. (e) Coverage Ratio.

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(4) Activity Ratio:

Particular business activity is going on properly or not that can be checked by these ratios. But debtors, creditors stock turn over how these are active in the business can be find by activity ratio.
(a) Stock Turnover. (b) Debtors Ratio. (c) Current Assets Turnover. (d) Fixed-Assets Turnover. (e) Total Assets Turnover

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PROFITABILITY RATIO
Gross Profit Ratio: It is a ratio expressing the relationship between gross profits earned to net sales. It is a useful indication of profitability of business. This ratio is expressed in percentage.

Formula: GROSS PROFIT RATIO = Gross Profit / Sales 100

Calculation: Year 2006-07 2007-08 2008-09 Gross Profit (Rs. In crores) 10,345.02 11,994.19 13,833.3 Sales (Rs. In crores) 17,320.68 19,442.62 23,983.8 Ratio 59.73% 61.69% 57.68%

Interpretation: The ratio of the year 2007-08 is higher than current year. It means in 2007-08 the selling price has increased as compared to current year and the cost of production has also gone down, but the selling price is has not been reduced. Thus the current years ratio is unfavourable as compare to previous year.

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Net Profit Ratio: Net profit is obtained interest and taxes are subtracting from the gross profit. The net profit margin ratio is measured by dividing profit after tax by sales. Net profit margin ratio establishes a relationship between net profit and sales and indicates management efficiency in manufacturing administering and selling the products. This ratio is over all measured of the firms liability to tern each profit margin may decline due to fall in sales price or increase in the cost of production.

Formula: NET PROFIT = Net Profit / Sales 100

Calculation: Year 2006-07 2007-08 2008-09 Net profit (Rs. In crores) 4222.15 4687.03 5201.74 Net sales (Rs. In crores) 17,320.68 19,442.62 23,983.8 Ratio 24.38% 24.11% 21.69%

Interpretation: The ratio of 2008-09 is lowest among three years which implies that the business will withstand adverse economic condition when selling prices are declining. Cost of production rising and the demand for the product is falling. Thus current years profitability is not sound as compare to previous year.

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Expense Ratio:This ratio shows that For the purpose of ascertaining relationship between operating expenses and net sales, expense ratios are computed.

Formula: Expense ratio = Expense / Sales * 100

Calculation: YEAR 2006-07 2007-08 2008-09 Expense (Rs.In crores) 7324.25 7807.5 9811.98 Sales (Rs. In crores) 17,320.68 19,442.62 23,983.8 Ratio (%) 42.29 40.16 40.91

Interpretation: Here the expense includes purchase exp., manufacturing exp. and other exp. like depreciation. The expense ratio of the company is low so that more than 50% part of sales revenue is available for meeting financial liabilities like interest, taxes, dividends etc.

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Operating Ratio: It is a ratio showing relationship between cost goods sold plus operating expenses and net sales. It shows the efficiency the management. The higher the ratio, the less will be the margin available to proprietary. The ratio is also usually expressed as a percentage.

Formula: OPERATING RATIO = Cost of Goods Sold + Operating Expenses / Sales 100

Calculation: Year Cost Of Goods Sold (Rs. In crores) 6975.66 7448.44 10,150.5 Operating Expenses (Rs. In crores) 2631.56 2999.08 4101.02 Sales (Rs. In crores) 17,320.68 19,442.62 23,983.8 Ratio

2006-07 2007-08 2008-09

55.47% 53.74% 59.42%

Interpretation: Operating ratio of the company is during the year 2008-09 which is highest among three years, which implies 59% is consumed by operating expense and 41% is left cover taxes and earning to the owner. Also this ratio is not fair enough for the company.

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 Return on capital employed: It is an index of profitability of business and obtained by comparing net profit with capital employed. The ratio is normally expressed in the percentage. The turn capital employed includes share capital, reserves and long learns such as debentures.

Formula: RETURN ON CAPITAL-EMPLOYED = E.B.I.T / Capital employed 100

Calculation: Year E.B.I.T (Rs. In crores) 6413.75 6845.23 7315.61 Capital Employed (Rs. In crores) 20,402.27 37,898.67 48,285.82 Ratio

2006-07 2007-08 2008-09

31.44% 18.06% 15.15%

Interpretation: There ratio of return on capital employed in 2006-07 was 31.44% which decreases in 2007-08 to 18.06% and than again decreases. in 2008-09 to 15.15%. This current years ratio is unfavourable than a past two years ratio for the company.

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 Return on Equity Share Capital : The ratio is important, as it indicates profitability of a firm from the viewpoint of real owners who are ordinary shareholders, who bear all the risks of business. It signifies the success with which the management has been able to earn enough returns on funds supplied by the proprietors.

Formula: RETURN ON EQUITY SHARE CAPITAL = Profit- Preference dividend/ Equity Capital 100

Calculation: Year Profit (Rs. In crores) 4222.15 4687.03 5201.74 Pref. Dividend Equity Capital (Rs. In crores) 580.67 730.78 730.79 Ratio

200607 200708 200809

------22.19 109.45

727.96% 638.37% 698.82%

Interpretation: The return is highest in the year 2006-07. But due to recession period last two year return is not fair enough towards the company.

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 Return on Share Holders Fund: In order to judge the efficiency with which the proprietors funds are employed in the business, this ratio is ascertained. Proprietors equity or proprietors funds include share capital and reserves. It is of great practical importance to the prospective investors, as it enables the profitability of the company to be compared with that of the other company.

Formula: RETURN ON SHARE HOLDERS FUND = Profit/ Shareholders Fund 100

Calculation: Year Profit (Rs. In crores) 4222.15 4687.03 5201.74 Share Holders Fund (Rs. In crores) 10,756.94 19,920.61 23,150.89 Ratio

2006-07 2007-08 2008-09

37.25% 23.53% 22.47%

Interpretation: Return on shareholders fund of the company was 37.25% for the year 2006-07 which is highest among three years, so that company is giving good return on shareholders fund but last two years this ratio is decreases. It is bad image toward the shareholder.

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 Return on Equity shareholders fund: This ratio measures a relationship between net profit after interest & tax &preference dividend and equity share holders fund. The objective of computing this ratio is to find out how efficiently the funds supplied by the equity share holders have been used.

Formula: RETURN ON EQUITY SHARE HOLDERS FUND = Profit- Preference dividend/ Eq. Shareholders Fund 100

Calculation: Year Profit (Rs. In crores) 4222.15 4687.03 5201.74 Pref. Dividend Eq. SHARE HOLDERS FUND (Rs. In crores) 10,756.94 14,448.09 17,678.23 Ratio

200607 200708 200809

----22.19 109.45

39.25% 32.29% 28.81%

Interpretation: The ratio of return on shareholders fund of the company was for the year 2006-07 to 39.25% which is decrease in 2007-08 32.29% then also decline in the year 2008-09 to 28.18%. It means that the current years ratio is not favorable for the company.

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 Earning Per Share Ratio: This ratio shows the profitability available to the equity shareholders on per share. This is the most important ratio from point of view of outsiders. This ratio measures the net profit earned on per share.

Formula: EARNING PER SHARE RATIO

= PAT Pref. Share Dividend / No. Of Equity Share

Calculation:
Year Profit (Rs. In crores) 4222.15 4687.03 5201.74 Pref. Dividend NO. OF Equity Shares (Rs. In crores) 58.07 73.06 73.06 Ratio (Rs.)

2006-07 2007-08 2008-09

----22.19 109.45

72.71 63.85 69.70

Interpretation: In 2006-07 EPS ratio is highest among three years. This ratio decline to 63.85 in 2007-08 and in 2008-09 is increase to 69.70 Rs. This shows that companys market position is not good. This ratio is favorable for the current year compare to year2007-08.

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 DIVIDEND PER SHARE:This ratio measures relationship between dividend pay to the shareholders and number of equity shares. The objective of computing this ratio is to find out the net distributed profit after interest & tax & preference share dividend belong to equity share holder.

Formula: DIVIDEND PER SHARE =

= Dividend

paid to Equity shareholders / No. of Equity shares

Calculation: YEAR Dividend (Rs. In crores) 943.91 1168.93 1168.95 NO. Of Equity Shares (Rs. In crores) 58.07 73.06 73.06 Ratio (Rs.) 16.25 16.00 16.00

2006-07 2007-08 2008-09

Interpretation: Dividend per share ratio of the company for the year 2006-07 was 16.25 Rs. which decreases to 16.00 Rs. Both the year. It means company is maintaining balance ratio for three year. So it is favorable for investors and also high ratio increase image of company in the mind of shareholder and outsiders.

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 Price Earning Ratio: It is the above ratio with a slight change that it shows the relation between the market price of the share and the earning per share.

Formula: PRICE EARNING RATIO

= Market Value per Share / Earning Per Share

Calculation:
YEAR 2006-07 2007-08 2008-09 Market Value (Rs.In crores) 579.10 819.05 223.50 Earning per Share (Rs. In crores) 72.71 63.85 69.70 Ratio (Times) 7.96 12.83 3.21

Interpretation: PE ratio of the company for the year 2006-07 was 7.96 times which increases at in the year 2007-08 12.83 times which gone down for the current year 3.21 times. This ratio is lowest among the three years, so it is unfavourable for the company.

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Dividend Yield Ratio:The dividend yield is calculated on the basis of market value per share. It shows the actual return on the amount invested by him.

Formula: DIVIDEND YIELD RATIO =

= DIVIDEND PER SHARE / MARKET VALUE PER SHARE100

Calculation: YEAR Dividend per share (Rs. In crores) 16.25 16.00 16.00 Market value (Rs. In crores) 579.10 819.05 223.50 Ratio (%) 2.81% 1.95% 7.15%

2006-07 2007-08 2008-09

Interpretation: Dividend yield ratio is calculated on the basis of market value per share and also this ratio is high for current year which is 7.15 % so that the company is giving good dividend to the share holder. It is favorable.

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 Interest Coverage Ratio:The ratio indicates as to how many times the profit covers the payment of interest on debentures and long-term loans. Hence, it is knows as times-interest earned ratio. It is indicated in times.

Formula: Interest Coverage Ratio = Earning before Depreciation, Interest and Tax / Interest

Calculation: Year 2006-07 2007-08 2008-09 E.B.D.I.T (Rs. In crores) 6413.75 6845.23 7315.61 Interest (Rs. In crores) 251.25 929.03 1489.50 Ratio (Times) 25.53 7.37 4.91

Interpretation: Interest coverage ratio of the company for the last three years continuously decreasing rate and lowest among three years which is 4.97 times. It shows that the profit available before depreciation, interest and tax is 4.97 times.

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Activity / Turnover Ratio

Stock turn over ratio: The number of times the average stock is turn over during the year is known as stock turn over. It is computed by dividing the cost of goods sold by the average stock. The objective of computing this ratio is to determine the efficiency with which the inventory is utilized.

Formula: STOCK TURNOVER RATIO = Cost of goods sold / Average stock

Calculation: Year 2006-07 2007-08 2008-09 C.O.G.S. 6975.66 7448.43 10,150.50 Average Stock 1065.79 1126.38 1290.38 Ratio (times) 7 7 8

Interpretation: Stock turn over ratio of the company is increasing rate so it is good sight for company. It shows that in 2007-08 company has done most profitable business also firm is able to trade on smaller margin of gross profit. That means current year is favourable for company.

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Debtors Ratio:This period shows an average period for which credit sales remain outstanding and measures the quality of debtors. It indicates the rapidity or slowness with which the money is collected from debtors. This period may be calculated as under:

Formula: Debtors + Bills receivable Debtors ratio = ------------------------------------- x 365 Credit sales

Calculation: Year Debtors (Rs. In crores) 631.63 543.48 635.98 Bills receivable 0 0 0 Credit sales (Rs. In crores) 17320.68 19442.62 23983.80 Ratio (days) 13 10 10

2006-07 2007-08 2008-09

Interpretation: In this ratio we can see that the company is reduces the debt collection period year by year. It is good sign for the company in cash management.

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 DEBTORS TURNOVER RATIO: The debtors turnover suggest the number of times the amount of credit sales is collected during the year, while debtor ratio indicates the number of days during which the dues for credit sales are collected. Suppose the debtors ratio is sixty days, it means that debtors pay their dues for credit sales after sixty days of making the sales.

Formula: Debtors Turnover Ratio = No. of Days in a year/Debtors Ratio

Calculation: Year No. of Days

Debtors Ratio

Ratio (Times) 27.42 35.74 37.71

2006-07 2007-08 2008-09

365 365 365

13.31 10.20 9.68

Interpretation: This ratio indicates that credit receivable during 2006-07 was 27 times for current year 2008-09 is 38 times which the company collection period is very good which meet the standard of industry.

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 Creditors turn over ratio:This ratio establishes a relationship between net credit purchases and avg. trade creditors. The objective of computing this ratio is to determine the efficiency with which the creditors are arranged.

Formula: Net credit purchase Creditors turn over ratio = ----------------------------Average trade creditors Calculation: Year 2006-07 2007-08 2008-09 No. of Days 365 365 365
Creditors

(in crores) 3145.99 3243.42 3842.78

Ratio (Times) 0.116 0.112 0.095

Interpretation: in this ratio the creditors of the company is in increases so company is selling goods is increases. So its ratio is decreases. It is good for sells and bad image for company.

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Overall Turnover Ratio: It is an index of Profitability of business and obtained by comparing net sales with capital employed. The ratio is normally expressed in the times. The turn capital employed includes share capital, reserves and long learns such as debentures.

Formula: Overall Turnover Ratio = Net Sales / Capital employed

Calculation: Year Sales (Rs. In crores) 17,320.68 19,442.62 23,983.80 Capital Employed (Rs. In crores) 20,402.27 37,898.67 48,285.82 Ratio (Times) 0.85 0.51 0.50

2006-07 2007-08 2008-09

Interpretation: Company overall turnover ratio is very low . This ratio is decreasing rate which is for current year 2008-09 is 0.50 times so that company is not utilizing funds properly.

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Fixed Assets Turnover: To ascertain the efficiency and profitability of business, the total fixed assets are compared to sales. The m ore sales in relation to the amount invested in fixed assets, the more efficiency is the use of fixed assets.

Formula: FIXED ASSETS TURNOVER = Sales / Total Fixed Assets

Calculation: Year 2006-07 2007-08 2008-09 Sales

(Rs.In corers)

Total Fixed Assets

(Rs.In corers)

Ratio (Times) 1.57 1.54 1.66

17,320.68 19,442.62 23,983.80

11,040.56 12,623.56 14,482.22

Interpretation: Fixed Assets Turnover ratio was for the year 2006-07 1.57 times which decreases in the year 2007-08 to 1.54 times and then increase in the year 2008-09 to 1.66 times. It shows that in the year 2008-09 fixed assets are used efficiently to earn profit in the business, Thus this ratio is favourable for the company.

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LIQUIDITY RATIO
Current ratio:
Current ratio indicates the current position. Current ratio obtained by dividing current assets by the current liabilities. Current assets includes cash and those assets which can be converted in to cash with in a year such as marketable securities, debtors and inventories, short term bank loans, income tax liability and long debt maturing in the current year. The current ratio is a measure of the firms short-term solvency.

Formula: CURRENT RATIO = Current Assets / Current Liabilities

Calculation: Year 2006-07 2007-08 2008-09 Current Assets (Rs. In crores) 10,646.16 3613.70 5707.05 Current Liabilities (Rs. In crores) 3523.30 3855.26 6039.85 Ratio 3.02:1 0.94:1 0.94:1

Interpretation: Large change between two years of the current ratio. The current year for 2008-09 is very low i.e. 0.94:1. It is not good sound. The industry standard for the current ratio is 2:1. According to this standard above ratio are unfavourable for the company, But in 2006-07 there is very quite satisfactory ratio which highest among three years.

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 Liquid ratio: A variant of current ratio is the liquid ratio, which is designed to show the amount of cash available to meet immediate payments. It is obtained by dividing liquid assets by liquid liabilities. Sometimes accountants do not prefer to include bank overdraft in current liabilities on the argument that it is generally a permanent way of conservation it is always good to include bank overdraft. Stock is excluded from the list of quick current assets because they are not expected to be converted into cash. In the liquid ratio the absolute figures of the three year.

Formula: LIQUID RATIO = Liquid Assets / Liquid Liabilities

Calculation: Year 2006-07 2007-08 2008-09 Liquid Assets Liquid Liabilities (Rs.In crores) (Rs. In crores) 8818.62 3523.20 1566.39 3855.26 2838.77 6039.86 Ratio 2.50:1 0.41:1 0.47:1

Interpretation: Ideally liquidity ratio of 1:1 is satisfactory ratio for any company, but here company has not maintained this standard. That means company has need to improve their liquid positions in the company.

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 Quick / Acid test Ratio: To remove the defect of current ratio, liquid ratio is used. It is a variant of current which is designed to show the amount of funds available to meet immediate payment.

Formula: Quick / acid test Ratio = Quick Assets / Liquid Liability

Calculation: Year

2006-07 2007-08 2008-09

Quick Assets (Rs.In crores) 8186.99 1022.91 2202.79

Liquid Liabilities (Rs. In crores)

Ratio 2.32:1 0.27:1 0.36:1

3523.20 3855.26 6039.86

Interpretation: Quick test ratio of the company was for the year 2006-07 is highest but it decrease last two years which further increase in 2008-09 by 0.36:1. Ideally it is 0.5 times but it is not satisfactory last two years. So this ratio is unfavourable for the company.

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LEVERAGE RATIO
Debt-equity Ratio: This ratio expresses the relationship of long-term liabilities to net worth. Long-term debts are those, which are repayable after one year and this are other that those appearing under Current Liabilities include debentures and other secured and unsecured loans which are repayable after one year on the other hand, if the debt is at lower level improvement in the earning on net worth is possible, provided the growth plans are to be funded from untapped borrowings. The other expect of high debt is that case of a full in sales.

Formula: DEBT-EQUITY RATIO = Long term fund / proprietors Fund 100

Calculation: Year Long Term fund (Rs.In crores) 9820.33 18,061.48 25,176.76 Proprietors Fund (Rs.In crores) 10,756.94 19,920.61 23,150.83 Ratio

2006-07 2007-08 2008-09

91.29% 90.67% 108.75%

Interpretation: In 2008-09 ratio is highest that means in this year outside creditors have larger claim than the owners of the business in compare to other years of the company.

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Proprietary ratio: The ratio shows the proportion of proprietors funds to the total assets employed in the business. The proprietors fund or share-holders equity surplus. The ratio indicates the amount of capital contributed by the proprietors .The higher the ratio, the higher proprietors & the financial position of business.

Formula: PROPRIETORY RATIO

= Proprietors Funds / Net Assets 100

Calculation: Year Proprietors Funds (Rs.In crores) 10,756.94 19,920.61 23,150.83 Net Assets (Rs.In crores) 25,597.5 47,075.52 58,741.77 Ratio

2006-07 2007-08 2008-09

42.02% 42.32% 39.41%

Interpretation: The ratio during 2008-09 is lovest financial position as it signifies that the proprietor have provided large funds to purchase the assets. For current year this ratio is gone down. So this ratio is not favourable for 2008-09.

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Others
Long Term Funds to Fixed Assets: The fixed assets should always be acquired out of long-term funds meaning there by that this ratio should not be less then 100.

Formula: Long term fund to fixed assets ratio = Long Term Fund / Fixed assets * 100

Calculation: Year 2006-07 2007-08 2008-09 Long Term Fund

(Rs.In crores)

Fixed assets
(Rs.In crores)

Ratio (%) 184.79 300.22 333.41

20,402.27 37,898.67 48,285.82

11,040.56 12,623.56 14,482.22

Interpretation: This ratio for the year 2008-09 is 333.41 %which is highest among three that means the company is utilizing the long term funds to fixed assets.

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 Capital gearing ratio:This ratio establishes a relationship between debts and Pref. share capital to Eq. share Capital. The objective of computing this ratio is to measure the relative proportion of Pref. share capital to Equity share capital.

Formula:Capital gearing ratio = Fixed interest bering capital / ordinary capital

Calculation: Year Fixed int.bearing capital

(Rs.In crores)

Ordinary capital
(Rs.In crores)

Ratio (times) 6.77:1 12.42:1 12.36:1

2006-07 2007-08 2008-09

3933.92 9076.52 9038.07

580.67 730.78 730.79

Interpretation: In the year 2006-07 the interest bering capital is very less as

compare to 2007-08 so ratio is very low. But in current year the interest bering capital is increases and also the ratio is high.

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5. Accounting policy and notes:

A. Basis of Preparation of Financial Statements: The financial statement are prepared in under the historical cost convention, except for certain fixed assets which are revalued, in accordance with the generally accepted accounting principles in India and the provision of the companies act, 1956.

B. Use of Estimates: The preparation of financial statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period.

C. Own Fixed Assets: Fixed assets are stated at cost net of value added tax and include amounts added on revaluation, less accumulated depreciation and impairment loss. D. Depreciation: Depreciation on fixed assets is provided on written down value method at the rates and in the manner prescribed in schedule to the companies act, 1956 over their useful life except. E. Borrowing Costs: Borrowing costs that are attributable to the acquisition of qualifying assets are capitalized as part of the cost of such assets. F. Provision for Current and Deferred Tax: Provision for current tax is made after taking into consideration benefits admissible under the provisions of the income tax act, 1961.
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6 Directors Report
Net Sales/Income ... Total Expenditure . Operating Profit Add : Dividend and Other Income Profit before Interest, Depreciation, Exceptional items and Taxes Profit before Depreciation, Exceptional items and Taxes Less : Depreciation Profit before Exceptional items and Taxes Less : Exceptional items Profit before Taxes Less : Provision for Current Taxation Less : Provision for Deferred Taxation) Less : Provision for Fringe Benefits Tax Profit after Taxes Add : Balance brought forward from the previous year (q) Balance Which the Directors have appropriated as under, to : (i) Proposed Dividend (ii) Tax on Dividend (iii) General Reserve TOTAL 147,339.26 129,201.59 18,127.67 265.67 18,393.34 3,290.18 15,103.16, 4,265.39 10,837.77 4094.53 6743.24 1997.12 121.93 18.81 4849.24 8234.03 13,184.93 11167.88 109.45 217.64 2222.97

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STEEL INDUSTRY: While most steel companies across geographies enjoyed strong demand and record earnings in the first half of 2008, the demand for steel weakened significantly after August 2008 with the global financial crisis adversely impacting the construction sector and capital spending.

BUSINESS RESULTS\ Tata Steel Group The steel deliveries of the Tata Steel Group for the financial year 2008-09 at 28.54 million tones were 10% lower compared to 31.68 million tones during the financial year 2007-08. The Group recorded a turnover of Rs.147,329 crore (US$ 28,962 mn) for the financial year 2008-09, 12% higher than the turnover of Rs. 131,534 crore (US$ 25,857 mn) for the financial year 2007-08 . ENDURING THE DOWNTURN Every steel maker worldwide faced an unprecedented decline in demand after October 2008 following the global economic downturn. The Tata Steel Group made a quick risk assessment of the consequential financial impact and initiated programmes labelled Weathering the Storm and becoming Fit for Future, so as to remain competitive in the future.

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TATA STEEL CORUS INTEGRATION: During the year, considerable progress was made in Institutionalizing an integrated approach in various Functional areas. In procurement, Lead Buyers have been appointed for high value items. DIVIDEND: The Board, for the year ended 31st March, 2009, has Recommended Dividends as under: (i) Rs. 2 per Convertible Cumulative Preference Shares (CCPS) on 547,266,011 CCPS of Rs. 100 each. (2007-08 Re. 0.41 pro rata from the date of allotment i.e. 18th January, 2008) on 547,251,605 CCPS of Rs. 100 each. (ii) Rs. 16 per Ordinary Share on 730,592,471 Ordinary Shares (2007-08 on 730,584,320 Ordinary Shares @ Rs.16 per share). SUBSIDIARIES Pursuant to the Accounting Standards AS-21 issued by the Institute of Chartered Accountants of India, the consolidated financial statements presented by the Company includes financial information of its subsidiaries. BROWNFIELD PROJECT: Brownfield Project of Tata Steel, Indian Operations The Company is in the process of increasing its crude steel capacity to 10 mtpa at its Jamshedpur Works by the year 2011.
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GREENFIELD PROJECTS Kalinganagar Project Chhattisgarh & Jharkhand Projects OTHER PROJECTS Hooghly Met Coke and Power Company Ltd. (HMPCL) Tata BlueScope Steel Limited Dhamra Port Company Limited Tata NYK Shipping Pte Limited Tata Steel (KZN) (Pty) Ltd

HEALTH AND SAFETY: The Tata Steel Group is committed to ensuring the health and safety of its employees, its plants and its surrounding communities at all its operation sites. The Group constantly endeavors to provide safe and hygienic working conditions for its employees as well as its contract workers.

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DIRECTORS: Mr. Kirby Adams and Mr. H. M. Nerurkar were appointed additional Directors on the Board of the Company with effect from 9th April, 2009. Mr. Kirby Adams has been appointed as the CEO of Tata Steel Europe Limited, a wholly owned indirect subsidiary of the Company. He would oversee the operations of Tata Steel in Europe. In addition, he would also be responsible for the Global Raw Material pursuits of Tata Steel. Mr. Adams was formerly the Chief Executive of BlueScope Steel, Australia. Mr. H. M. Nerurkar was the Chief Operating Officer of the Company prior to his appointment as Executive Director, India and South East Asia.

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DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that 1. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures. 2. they have, in the selection of the Accounting Policies, consulted the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period. 3. they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 4. they have prepared the annual accounts on a going concern basis. On behalf of the Board of Directors RATAN N. TATA Mumbai, 25th June, 2009 Chairman

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Auditors Reports
Name of the auditors:DELOITTE HASKINS & SELLS Chartered Accountants, Auditors Report TO THE MEMBERS OF TATA STEEL LIMITED They have audited the attached Balance Sheet of TATA STEEL LIMITED, as at 31st March, 2009, 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. They conducted their audit in accordance with auditing standards generally accepted in India. Those Standards require that they plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, they enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable. For DELOITTE HASKINS & SELLS Chartered Accountants, P. R. RAMESH Partner. Membership No. : 70928 Mumbai, 25th June, 2009
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ANNEXURE Further to their comments in the Annexure referred to in paragraph (3) above, they report that : (a) they have obtained all the information and explanations, which to the best of their knowledge and belief were necessary for the purposes of our audit; (b) in their opinion, proper books of account as required by law have been kept by the Company so far as appears from their examination of the books and proper returns adequate for the purposes of their audit have been received from the Singapore Branch not visited by them. The Branch Auditors Report has been forwarded to them 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 their 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 their opinion, and to the best of their information and according to the explanations given to them, 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 : (i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009; (ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and
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(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. On the basis of written representations received from the directors, as on 31st March, 2009 and taken on record by the Board of Directors, they report that none of the directors is disqualified as on 31st March, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956. For DELOITTE HASKINS & SELLS Chartered Accountants, P. R. RAMESH Partner. Membership No. : 70928 Mumbai, 25th June, 2009

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7 .COMMON SIZE STATEMENT:The methods so far discussed do not provide any common base with which all items in each statement can be compared. For these purpose common size statements are prepared in which all items are compared with one common item, which is significant. For example, in the income statement or profit and losses account, sales may be taken as 100 and all other items in this statement are computed as percentage of sales. Similarly in the case of balance sheet the relation of each item to total assets is computed. With the help of this statement one can easily compare data of the past year thus one can reach conclusion very easily. Forming this statement is also not very hard one with limited skill can easily prepare it. But the efforts of preparing this statement is less then fruit which we recive after preparing it.

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Common-size Profit & Loss Account

PARTICULARS INCOME Turnover (-) Excise Duty/Service Tax Recovered Other Income EXPENDITURE Manufacturing & Other Exp. Depreciation Less: Transferred from Revaluation Reserve Interest and Finance Charges Total Expenditure PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS Less: Employees separation and compensation Contribution for sports infrastructure Exchange Gain PROFIT BEFORE TAX Current Tax Deferred Tax Fringe Benefits PROFIT AFTER TAX 2006-07 (in crores) (%) 19,762.57 2211.48 433.67 10,813.84 819.29 236.02 173.90 11,571.01 6413.75 152.10 -----------------------6261.65 2076.01 52.51 16.00 4222.15 100 11.19 2.19 54.71 4.14 1.19 0.89 58.55 32.45 0.77 ---------31.68 10.50 027 0.08 21.36 2007-08 (in crores) (%) 22,191.80 2498.52 335.00 11,645.24 834.61 175.50 878.70 13,183.05 6845.23 226.18 150.00 597.31 7066.36 2252.00 108.33 19.00 4687.03 100 11.26 1.51 52.47 3.76 0.79 3.96 59.41 30.84 1.02 0.68 2.69 31.84 10.15 0.49 0.09 21.12 2008-09 (in crores) (%) 26,843.73 2527.96 308.27 15,525.99 973.40 343.65 1152.69 17,308.43 7315.61 -----------------------------------7315.61 2173.00 75.13 16.00 5201.74 100 9.42 1.15 57.84 3.63 1.28 5.29 6.48 27.25 -----------------------27.25 8.09 0.28 0.06 19.38

INTERPETATION
Here net sales is consider as sales excise duty.

Income :Income of the company was in Rs.19,762.57 crore in 2007 and Rs. 22,191.80 crore in 2008 and Rs. 26,843.73crore in 2009. It
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shows increasing trend in the income of the company. This shows that during the time of recession also company has increased. Expenditures :As the income of the company has increased, the expenses have also been increased. All the expenses like general exp. Research exp. financial exp. And other expenses have also been increased. But company must control general expenses. Profit :The profit of the company is increasing year by year. In 2007, the profit was Rs. 4222,15 crore, which increased in 2008 by Rs. 4687.03 crore and in the year 2009, it increased to 5201.74 crore.

Common-size Balance Sheet As on 31st March

PARTICULERS (A) SOURCES OF FUNDS Share holders funds (a) Share capital (d) Reserve & surplus Total shareholders Fund Loan funds (a) Secured loan (b) Unsecured loan Deferred tax liabilities Provision for employee separation TOTAL (B) APPLICATION OF FUNDS Fixed Assets (a) Gross Block Less: Imparement (b) (-) Depreciation Net Block Investment Foreign currency monitory item translation A\C As at 31.03.2007
(in crores) (%)

As at 31.03.2008
(in crores) (%)

As at 31.03.2009
(in crores) (%)

727.73 13,368.42 14,096.15 3758.922 5886.41 9645.33 748.94 1107.08 25,597.50

2.84 52.23 55.07 14.68 23.00 37.68 2.92 4.32 100

6203.30 21,097.43 27,300.73 3520.58 14,501.11 18,021.59 681.80 ---------47,075.52

12.79 44.82 58.00 7.48 30.80 38.32 1.45 ---------100

6203.45 23,972.81 30,176.26 3913.05 23,033.13 26,946.18 585.73 1033.60 58,741.77

10.56 40.81 51.37 6.66 39.21 45.87 1.00 1.76 100

18,526.93 100.41 7385.96 11,040.56 5106.13 ----------

72.38 039 28.85 43.13 19.96 ----------

20,547.04 43.70 100.47 0.21 8123.01 17.26 12,623.56 26.82 4103.19 8.72 ---------- -----------

23,544.69 100.47 8962.00 14,482.22 42,371.78 471.66

40.08 0.17 15.26 24.65 72.13 0.80

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Current Assets, Loans & Adv. Current Assets Store and spare parts Sundry Debtor Cash & Bank Balance Stock in trade Loans & Advances (-) Current Liabilities & Provisions (a) Current Liabilities (b) Provisions

505.44 631.63 7681.35 1827.54 3055.73

1.97 2.48 30.01 7.14 11.96

557.67 543.48 465.04 2047.31 33,348.74

1.18 1.15 0.99 4.35 70.84

612.19 635.98 1590.60 2868.28 4578.04

1.04 1.08 2.71 4.88 7.79

3555.26 1930.46

7.55 7.54

3523.20 2943.52

13.76 6..25

6039.86 2934.19

10.28 5.00

NET CURRENT ASSETS Misc Exp. TOTAL

30,193.66 155.11 25597.50

64.14 0.33 100

8248.23 32.22 202.53 0.79 47,075.52 100

1322.04 105.07 58741.77

2.23 0.18 100

INTERPETATION
Shareholders fund :The funds are decreased year by year. In year 2007, it was 55.07%, in the year 2008, it was 58.00% and in the year 2009 it was 51.37%. Because of issue of shares last two year it is increases. Loan funds :Loan funds are the borrowed fund of the company. It was 37.68% in the year 2007, it was 38.32% in 2008 and in the year 2009 loan funds are increased to 45.87.%. Fixed assets :Fixed assets are in the year 2007 was 43.13% which reduces to 26.82% and 24.65% in the year 2008 and 2009 respectively. Current assets :The net current asset is also declining which leads to result in decrease in working capital of the company.

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8.Findings: Here because of global meltdown in this year 2008-09 the company suffered declining in whole financial condition so that we can see in above ratio of the current year are decreasing as compared to previous year. From the above listed ratio we can say that company profitability ratio are not good it is at decreasing rate in every year. During the 2006-07 the ratio of liquidity was good but then after two year the ratio is declining so that company so not maintain balance between asset and liabilities. Current ratio has been decreased which shows company must employ more current asset this will increase more working capital in the company.

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BIBLIOGRAPHY
Guidance from: - Prof. Seema pandit Annual Report of TATA STEEL Ltd. Website: - www.tatasteel.com References: - B.S. shah prakashan (Company accounts) References: - Google.com

Prepared By: Ghodasara Amit H. S.Y.B.B.A. ROLL NO: - 57

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