The company engages in the sale of steel in India. It's main products includes sponge iron, pig iron, Ferro alloys, mild steel, billets, reinforcement steel bars and wire rods. It also manufactures and sells Thermal TMT Bars.
Suraj Products Limited deals with Iron ore fines, paints and sponge iron. Their main markets are North America and Western Europe. Their total Annual Sales Volume is US$ 2.5 Million to US$ 5 Million.
GALLANT METAL LIMITED
The company engages in the manufacture of steel and iron. It is engaged in a project at GIDA Gorakhpur Uttar Pradesh which comprises of integrated steel plant with captive power plant and spinning.
GANGOTRI IRON AND STEEL CO-OPERATIVE LIMITED
The company engages in the production and sale of MS Deformed cold to twisted bars, MS billets and Thermal TMT Bars.
RAMSARUP INDUSTRIES LIMITED
The company engages in the manufacture of wires, TMT bars and steel. Also engages in development of infrastructure in India.
ADHUNIK METALICS LIMITED
The company engages in the manufacture of steel, both alloy and non alloy. The Products portfolio includes structural steel, carbon steel, Auto steel, free steel and spring steel.
VISA STEEL
It has a 1.5 million tone integrated stainless steel manufacturing plant the company was founded by Mr. Vishambar Saran.Then we need to find out about the financial positions of these companies using various financial data.
THE FINANCIAL DATA COLLECTED IN THIS REGARD OF THE ABOVE MENTIONED COMPANIES ARE AS FOLLOWS-
PROFIT AND LOSS ACCOUNT
BALANCE SHEET
CASH FLOW STATEMENT
ANNUAL RESULTS
DIVIDENDS
CAPITAL STRUCTURE
RATIOS
By making a detailed study of this information we can come to an understanding as to which of these companies are worth doing business with the bank.
Profit and loss account reflects the income statement of the company. It shows whether the company made or lost money during the financial year. It shows the financial position of the company. It also helps in predicting the future performance and assesses the capability of generating cash flows. However the only problem associated with it is that loyalty is not measured. The Balance sheet prepared at the end of the financial year helps to show weather the total asset equals to total liability.
The Profit And Loss Account and Balance Sheet is helpful in preparing the Common Size Statement and the Comparative Statement.
Common Size Financial Statement displaces all items as percentage of common base figure and helps in comparison between two periods of a company.
Common Size Income Statement all items as a percentage of sales and helps to know about the financial position of the company.
The Cash Flows Statement provide information about the cash receipts and payments of a farm for a given time period it tell us about the ability of the enterprise to generate to cash and cash equivalent. One should invest only in a company with a sound cash flow.
An annual report is a comprehensive report on a company's activities throughout the preceding year. Annual reports are intended to give shareholders and other interested people information about the company's activities and financial performance. Most jurisdictions require companies to prepare and disclose annual reports, and many require the annual report to be filed at the company's registry. Annual report needs to be thoroughly understood before coming to an understanding with any company.
Dividends need to be looked into to have an idea about the financial position of any company. A company which pays high amount of dividend to its shareholders is said to be a sound company.
Capital Structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities. A firm's capital structure is the composition or structure of its liabilities.
Accounting Ratios are used to describe significant relationship which exists between figures shown in a balance sheet, profit and loss account, and budgetary control system. It indicates a quantities relationship which is used for analysis and decision making it provides for inter firm and intra firm comparison. From the banks point of view the Debt Service Coverage Ratio this ratio is the key indicator to the lender to assess the extent of ability of the borrower to service the loan in regard to timely payment of interest and repayment of loan installment. It indicates weather the company is earning sufficient profit to pay interest charges and principal amount.
Using this Information we can find out about the financial position of all these Midsized Steel Industries in Eastern India. Then we need to analysis the financial position of all these Steel Companies. We need to do several financial calculations for this. We need to find out as to which of these companies are having a sound financial position. We also have to compare the financial position of one company with that of another company. By comparing the financial position for different time period we can come to the conclusion as to which of these companies can the bank approach for doing business. Also after having a look at their financial position the bank can advice as to which of these companies should be approached and advised regarding investment in any other sector.
RBS is a much renounced bank and wants to expand its business by attracting companies with whom it has not dealt with till date. The companies already mentioned are the once with whom the bank has not had any dealing till date. The bank can come to know about the various activities that are being performed by these companies and can know about the financial well being of these organizations by looking at their various financial records over the past few years. The Bank is already doing business with a few renounced Steel Company based in Eastern India like TATA METALLIC'S. The Bank can then decide as to which of the mentioned companies can join that elite list.
By finding out about their Financial Position the bank can decide as to which of these companies they can advance loan. The bank has to look into its scope of advancing loan to these industries. The bank can also study as to how much loan can be availed by this selected group of companies. The bank should look into the demand for loan among these companies. After Liberalization and Globalization the capability of financial institution to advance and receive loans has become all the easier. By dealing with these companies the bank can gain a greater foothold in Eastern India.
The objective of doing this project for the student is that to gain a better understanding of the business environment. By doing this project the student can come to known as to what studies are needed to be conducted by a bank before investing in any particular business or industry. He can come to know as to what the areas are being looked into by the bank before making and deciding on any business opportunity. He can also come to know about the workings of various departments of a bank and how they are different from each other.
MAIN TEXT
The main aim of the project is to find out the list of Steel Companies with whom the RBS has not had any transaction till date and then to find out as to with which of them are good enough for them to advance loan to and for carrying out other business. Whether the bank can do business with these companies and the extent of business which can be done can be found out after a thorough study of their past Financial Data.
DIFFERENT TYPES OF LOANS TO BE ADVANCED
CASH CREDIT LOAN
A cash credit is a short-term cash loan to a company. A bank provides this type of funding, but only after the required security is given to secure the loan. Once a security for repayment has been given, the business that receives the loan can continuously draw from the bank up to a certain specified amount. -prearranged loan that a business does not have to take until it is needed. A line of credit is any credit source extended to a government, business or individual by a bank or other financial institution. A line of credit may take several forms, such as overdraft protection, demand loan, export packing credit, term loan, discounting, purchase of commercial bills, etc
TERM LOAN
A term loan is a monetary loan that is repaid in regular payments over a set period of time. Term loans usually last between one and ten years, but May last as long as 30 years in some cases. A term loan usually involves an unfixed interest rate that will add additional balance to be repaid.
Term loans can be given on an individual basis but are often used for small business loans. The ability to repay over a long period of time is attractive for new or expanding enterprises, as the assumption is that they will increase their profit over time. Term loans are a good way of quickly increasing capital in order to raise a business' supply capabilities or range.
OVERDRAFT LOAN
A bank overdraft is a limit on borrowing on a bank current account. With an overdraft the amount of borrowing may vary on a daily basis.
A bank loan is a fixed amount for a fixed term with regular fixed repayments. The interest on a loan tends to be lower than an overdraft.
FACTORS DETERMININIG HOW MUCH LOAN CAN BE ADVANCED BY BANK
LIQUIDITY OF ASSETS
Liquid ratio is also termed as Liquidity Ratio or Acid Test Ratio or Quick Ratio. It is the ratio of liquid assets to current liabilities. The true liquidity refers to the ability of a firm to pay its short term obligations as and when they become due
Liquid assets normally include cash, bank, sundry debtors, bills receivable and marketable securities or temporary investments. In other words they are current assets minus inventories (stock) and prepaid expenses. Inventories cannot be termed as liquid assets because it cannot be converted into cash immediately without a loss of value. In the same manner, prepaid expenses are also excluded from the list of liquid assets because they are not expected to be converted into cash. Similarly, Liquid liabilities means current liabilities i.e., sundry creditors, bills payable, outstanding expenses, short term advances, income tax payable, dividends payable, and bank overdraft (only if payable on demand). Some time bank overdraft is not included in current liabilities, on the argument that bank overdraft is generally permanent way of financing and is not subject to be called on demand. In such cases overdraft will be excluded from current liabilities.
The quick ratio/acid test ratio is very useful in measuring the liquidity position of a firm. It measures the firm's capacity to pay off current obligations immediately and is more rigorous test of liquidity than the current ratio. It is used as a complementary ratio to the current ratio. Liquid ratio is more rigorous test of liquidity than the current ratio because it Company eliminates inventories and prepaid expenses as a part of current assets. Usually a high liquid ratio an indication that the firm is liquid and has the ability to meet its current or liquid liabilities in time and on the other hand a low liquidity ratio represents that the firm's liquidity position is not good. As a convention, generally, a quick ratio of "one to one" (1:1) is considered to be satisfactory
CAPITAL ACCOUNT OF A COMPANY
Capital account of a Company at 25% level indicates the soundness of the Company and in this case the Bank can advance loan to that Company. The liquidity ratio should be at 60:40 bases.
COLLATERAL SECURITY
In lending agreements, collateral is a borrower's pledge of specific property to a lender, to secure repayment of a loan. The collateral serves as protection for a lender against a borrower's default that is, any borrower failing to pay the principal and interest under the terms of a loan obligation. If a borrower does default on a loan (due to insolvency or other event), that borrower forfeits (gives up) the property pledged as collateral and the lender then becomes the owner of the collateral. In a typical mortgage loan transaction, for instance, the real estate being acquired with the help of the loan serves as collateral. Should the buyer fail to pay the loan under the mortgage loan agreement, the ownership of the real estate is transferred to the bank. The bank uses a legal process called foreclosure to obtain real estate from a borrower who defaults on a mortgage loan obligation.
Collateral, especially within banking, may traditionally refer to secured lending (also known as asset-based lending). More recently, complex collateralization arrangements are used to secure trade transactions (also known as capital market collateralization). The former often presents unilateral obligations, secured in the form of property, surety, guarantee or other as collateral (originally denoted by the term security), whereas the latter often presents bilateral obligations secured by more liquid assets such as cash or securities, often known as margin. Another example might be to ask for collateral in exchange for holding something of value until it is returned.
BANK WILL NOT APPROACH FOR ADVANCING LOAN IN THE FOLLOWING CASES
If the Company is making a large Net Loss and if the Company has great amount of Miscellaneous Expenses then the Bank will not advance loan to that Company.
If the Fixed Assets of the Company is higher than Capital Balance then no loan will be advanced to that Company.
If the Company does not have any Personal Guarantor then no loan will be advanced to that Company.
If the Company does not have sufficient Collateral Security then no loan will be advanced to that Company.
Last three years profit, tax and the VAT paid over the last three years and the last three years Annual turnover also needs to be looked into. In these cases Banker's Participation is 75% and Promoter's Contribution is 25%.
Till date the first job on hand was to find out the names of the Midsized Steel Industries based in Eastern India with Headquarter preferably in Kolkata. The Steel Companies also should be such whom the Royal Bank of Scotland N.V. has not done any business till date.
Some of the names of the Steel companies to be dealt with are as follows:
M/s. Jai Balaji Industries Ltd.
M/s. Adhunik Metallic's Ltd.
M/s. Vikas Ltd.
M/s. Gallant Metal Ltd.
M/s. Gangotri Iron & Steel Co-Operative Ltd.
M/s. Suraj Ltd.
M/s. Elegant Steel Ltd.
M/s. Reshmi Metallic's Ltd.
I have collected all Financial Data related to these Companies like Profit and Loss Account, Balance Sheet, Cash Flow Statement, Annual Reports, Dividend, Ratios etc. To collect these Financial Data I had to approach a few Financial Institutions like Bengal Chamber of Commerce, WBIDC etc.
JAI BALAJI STEEL LIMITED
The Balance Sheet of the Company for the year 2008 is as under
PARTICULARS AMT AMT
Equity Share Capital 47.11
Preference Share Capital _
Share Application Money 61.78
Reserves and Surplus 305.41
Total Share Capital (1) 414.30
(+)Secured Loans 1091.89
(+)Unsecured Loans 337.95 1429.84
Capital Employed (2) 1844.14
REPRESENTED BY
Fixed Assets 830.60
Capital work in progress 285.80
Investments 50.62
Net Current Assets 67712
Total Assets 1844.16
The Balance Sheet of the Company for the year 2009 is as under
PARTICULARS AMT AMT
Equity Share Capital 47.11
Share Application Money 61.78
Reserves and Surplus 307.18
Total Share Capital (1) 416.07
(+)Secured Loans 1503.67
(+)Unsecured Loans 280.10 1783.77
Capital Employed (2) 2199.84
REPRESENTED BY
Fixed Assets 1198.85
Capital work in progress 316.93
Investments 51.62
Net Current Assets 632.45
Total Assets 2199.85
The Balance Sheet of the Company for the year 2010 is as under
PARTICULARS AMT AMT
Equity Share Capital 63.77
Reserves and Surplus 839.24
Total Share Capital (1) 903.01
(+)Secured Loans 1584.80
(+)Unsecured Loans 7.35
Capital Employed (2) 2495.16
REPRESENTED BY
Fixed Assets 1193.15
Capital work in progress 616.38
Investments 82.02
Net Current Assets 603.62
Total Assets 2495.17
COMPARATIVE BALANCE SHEET FOR 2008-2009
PARTICULARS 2008 2009 CHANGE %CHANGE
Fixed Assets 830.60 1198.85 368.25 44.34
Capital work in progress 285.80 316.93 31.13 10.89
Investments 50.64 51.62 0.98 1.94
Net Current Assets 677.12 632.45 (44.67) (6.60)
Total Assets 1844.16 2199.85 355.69 50.57
Equity Share Capital 47.11 47.11 - -
Share Application Money 61.78 61.78 - -
Reserves and Surplus 305.41 307.18 1.77 0.16
Secured Loans 1091.89 1503.67 411.78 37.71
Unsecured Loans 337.95 280.10 (57.85) (17.18)
Total Liabilities 1844.14 2199.84 355.70 20.69
Comparative Balance Sheet as on two or more different dates is used for comparing the assets, liabilities and the net worth of the company. It is useful for studying the trends of an undertaking.
INTERPRETATION
The Equity Share Capital and Share Application Money have remained the same.
The Reserves and Surplus have increased by Rs 1.77 Crores.
The Secured Loans have increased by Rs 411.78 Crores over the previous year.
The Unsecured Loans have gone down by Rs 57.85 Crores over the previous year.
The Fixed Assets have increased by Rs 368.25 Crores over the previous year.
The Capital work in progress has increased by Rs 31.13 Crores over the previous year.
The Investments have increased by Rs 0.98 Crores over the previous year.
The Net Current Assets have gone down by Rs 44.67 Crores over the last year.
COMPARITIVE BALANCE SHEET FOR 2009-2010
PARTICULARS 2009 2010 CHANGE %CHANGE
Fixed Assets 1198.85 1193.15 (5.7) (0.48)
Capital work in progress 316.93 616.83 299.45 94.48
Investments 51.62 82.02 30.40 58.89
Current Assets 632.45 603.62 (28.83) (4.56)
Total Assets 2199.85 2495.17 295.32 148.33
Equity Share Capital 47.11 63.77 16.66 35.36
Share Application money 61.78 - (61.78) (100)
Reserves and Surplus 307.18 839.24 532.06 173.21
Secured Loans 1503.67 1584.80 81.13 5.39
Unsecured Loans 280.10 7.35 (272.75) (97.37)
Total Liabilities 2199.84 2495.16 295.32 16.59
INTERPRETATION
The Equity Share Capital has increased by Rs 16.66 Crores.
The Share Application money has become Nil in the current year.
The Reserves and Surplus amount has gone up by Rs 532.06 Crores.
The Secured Loans amount has increased by Rs 81.13 Crores.
The Unsecured Loans amount has decreased by Rs 272.75 Crores.
The Fixed Assets have gone down by Rs 5.7 Crores.
The Capital work in progress has increased by Rs 299.45 Crores.
The Investments have increased by Rs 30.40 Crores.
The Current Assets has decreased by Rs 28.83 Crores.
CASH FLOW STATEMENT
Cash flow statements provide information about the cash receipts and payments of an enterprise for a given period.
The Cash and Cash equivalent at the end of 2008 is Rs 21.01 Crores.
The Cash and Cash equivalent at the end of 2009 is Rs 10.39 Crores.
The Cash and Cash equivalent at the end of 2010 is Rs 3.92 Crores.
This shows the Cash available at hand has been decreasing over the last three years.
DIVIDEND
The Dividend rate for 2008 was 10%.
The Dividend rate for 2009 was 4%.
The Dividend rate for 2010 was 4%.
This shows that the Dividend rate has decreased a lot over the past three years. The Dividend rate has diminished a lot over the past three years because JAI BALAJI has undertaken many projects in the recent years and also the profits of the company have gone up.
CAPITAL STRUCTURE
The Capital Structure shows very favorable figures in favor of the Company. The Authorized Capital. The amount of Authorized Capital has remained constant over the last three years at Rs 101.00 Crores. There is no Unpaid Capital since the Issued Capital is the same as the paid up Capital. There is also no Forfeiture of Shares. The Company is also going for an expansion of Rs 17000 Crores and the project is expected to complete within the next 4 years.
ANNUAL RESULTS
The Sales of the Company have gone up from Rs 1290.76 Crores in 2008 to Rs 1922.98 Crores in 2010 which is also an indication that the Net Profit would have also gone up substantially over this period. The Interest of the Company has also jumped from Rs 110.17 Crores to Rs 13135 Crores in 2010 which is an indication that the Loan of the Company is increasing.
RATIOS
CURRENT RATIO
Current measures the solvency of the company in the short term. The Current Ratio should be generally 2:1. In this case it is 2.20 which is acceptable.
QUICK RATIO
Quick ratio measures the company's ability to meet its current obligations. The Quick Ratio should ideally be 1:1. In this case it is 1.29 which is acceptable.
DEBT-EQUITY RATIO
This ratio indicates the relationship between loan funds and net worth of the company. Ideally this ratio should be 2:1. But in the case of this Company it is 0.99 which is not acceptable.
INVENTORY TURNOVER RATIO
This ratio ensures that the level of stocks is kept as low as possible consistent with the need to fulfill customer's orders in time. The Stock Turnover Ratio here is 5.28 which are acceptable.
GROSS PROFIT RATIO
This ratio measures the profit margin on the total net sales made by the company. In this case the Gross Profit Margin is 9.63%.
The Operating Margin here is 13.27 and the Net Profit Margin is 1.66 which is acceptable.
RESHMI METALIKS
Some of the Financial Information of Reshmi Metaliks is as follows
PARTICULARS 2006 2007 2008 GROWTH
Gross Sales 7050 12020 19376 61%
Cash Profit 2100 3011 5262 75%
Gross Profit 2214 3359 5375 60%
Net Worth 4181 6500 11070 70%
INTERPRETATION
The Gross Sales have gone up by 61% over the three year period.
The Cash Profit has gone up by 75% over the three year period.
The Gross Profit has gone up by 60% over the three year period.
The Net Worth of the company has gone up by 70% over the three year period.
OTHER INFORMATION
It is observed that the Dividends of the company are decreasing on an Annual basis; it was 8% in 2008 and reduced to 3% in 2010 which shows that the Company is making good profits. The Cash Flows of the Company has also gone up.
ADHUNIK METALIKS
The Balance Sheet of the company for the year 2008 is as under
PARTICULARS AMT AMT
Equity Share Capital 91.23
Share Application money 13.11
Reserves and Surplus 218.62
Total Share Capital (1) 322.96
(+)Secured Loans 666.32
(+)Unsecured Loans 223.29 889.61
Capital Employed (2) 1212.57
REPRESENTED BY
Fixed Assets 495.76
Capital work in progress 351.67
Investments 138.66
Net Current Assets 226.48
Total Assets 1212.57
The Balance Sheet of the company for the year 2009 is as under
PARTICULARS AMT AMT
Equity Share Capital 91.23
Share Application money 25.12
Reserves and Surplus 200.56
Total Share Capital (1) 322.96
(+)Secured Loans 922.88
(+)Unsecured Loans 398.33 1321.21
Capital Employed (2) 1638.12
REPRESENTED BY
Fixed Assets 860.42
Capital work in progress 257.89
Investments 178.11
Net Current Assets 341.70
Total Assets 1638.12
The Balance Sheet of the company for the year 2010 is as under
PARTICULARS AMT AMT
Equity Share Capital 123.50
Share Application money -
Reserves and Surplus 492.00
Total Share Capital 615.50
(+)Secured Loans 972.70
(+)Unsecured Loans 245.79
Capital Employed 1833.99
REPRESENTED BY
Fixed Assets 1309.95
Capital work in progress 38.06
Investments 206.07
Net Current Assets 279.90
Total Assets 1212.57
COMPARITIVE BALANCE SHEET FOR 2008 -2009
PARTICULARS 2008 2009 CHANGE %CHANGE
Fixed Assets 495.76 860.42 364.66 73.55
Capital work in progress 351.67 257.89 (93.78) (26.66)
Investments 138.66 178.11 39.45 28.45
Net Current Assets 226.48 341.70 115.22 50.87
Total Assets 1212.57 1638.12 425.55 126.21
Equity Share Capital 91.23 91.23 - -
Share Application money 13.11 25.12 12.01 91.60
Reserves and Surplus 218.62 200.56 (18.06) (8.26)
Secured Loans 666.32 922.88 256.56 38.50
Unsecured Loans 223.29 398.33 175.04 78.39
Total Liabilities 1212.57 1638.12 425.55 200.23
INTERPRETATION
The Equity Share Capital has remained constant over the two year period.
The Share Application money has increased by Rs 1201 Crores in this period.
The Reserves and Surplus amount has gone down by Rs 18.06 Crores.
The Secured Loans amount has increased by Rs 256.56 Crores.
The Unsecured Loan amount has increased by Rs 175.04 Crores.
The Fixed Assets amount has increased by Rs 364.66 Crores.
The Capital work in progress amount has decreased by Rs 93.78 Crores.
The Investments amount has increased by Rs 39.45 Crores.
The Current Assets amount has increased by Rs 115.22 Crores.
CASH FLOW STATEMENT
The Cash Flow statement provides information about the cash receipts and payments of an enterprise for a given period. The Cash in hand of the company in the financial year 2008 was Rs 47.08 Crores which drastically reduced to Rs 18.34 Crores in 2009 and rose to Rs 42.18 Crores in 2010.
DIVIDEND
The Dividend rate of the Company was at 12% in 2008; it reduced slightly to 10% in 2009 and increased again to 13% in 2010. The Dividend rate is high because in recent years the company has not made sufficient investments and its profits are also not as per expectations. But the company has recently made a decision to go for an expansion of Rs 11000 Crores and indications are that the project will come up in the next three to four years.
CAPITAL STRUCTURE
The Capital Structure of the company indicates that The Authorized Capital of the company has increased substantially over last three years. The Issued Capital amount is also matching with the Paid up capital amount which shows that No Capital is unpaid and also there is No Forfeiture of shares.
RATIOS
CURRENT RATIO
This ratio measures the solvency of the company in the short term. A Current ratio of 2:1 indicates a highly solvent position. In this case the current ratios in all the last three years are far below solvency position.
QUICK RATIO
The Quick Ratio is used to measure the company's ability to meet its current obligations. The Quick Ratio should be 1:1. In this case the Quick Ratio is below that in all the years.
INVENTORY TURNOVER RATIO
It is the amount of company's capital that may be tied up in the financing of raw materials, work in progress and finished goods. In this case it is 3.16.
GROSS PROFIT RATIO
This ratio measures the Gross Profit margin on the Net Sales. In this case the Gross Profit Ratio is 14.81% which is slightly higher than that of the previous year.
The Operating Profit Margin is 19.48% and the Net Profit Margin is 4.21%.
SPS GROUP
The Balance Sheet of The Company for the year 2008 is as under
PARTICULARS AMT AMT
Equity Share Capital 141,000,000
Reserves and Surplus 264,798,529
Total Share Capital (1) 405,798,529
(+)Deferred Tax Liability 45,595,477
(+)Secured Loans 314,453,447
Capital Employed (2) 765,847,453
REPRESENTED BY
Total Assets 765,847,453
The Balance Sheet of the Company for the year 2009 is as under
PARTICULARS AMT AMT
Equity Share Capital 424,129,200
Reserves and Surplus 1571,026,852
Total Share Capital (1) 1995,156,052
(+)Deferred Tax Liability 159,840,015
(+)Secured Loans 1990,296,463
(+)Unsecured Loans 350,000,000 2500,136,478
Capital Employed (2) 4495,292,530
REPRESENTED BY
Total Assets 4495,292,530
COMPARITIVE BALANCE SHEET FOR 2008-2009
PARTICULARS 2008 2009 CHANGE
Total Assets 765,847,453 (4495, 292,530) (3729, 445,077)
Share Capital 141,000,000 424,129,200 283,129,200
Reserves and Surplus 264,798,529 1571,026,852 1306,228,323
Deferred Tax Liability 45,595,477 159,840,015 1990,296,463
Secured Loans 314,453,447 1990,296,463 1675,843,016
Unsecured Loans - 350,000,000 350,000,000
Total Liabilities 765,847,453 (4495, 292,530) (3729,445077)
INTERPRETATION
The Fixed Assets amount has increased by Rs 3729,445,077.
The Share Capital amount has increased by Rs 283,129,200.
The Reserves and Surplus amount has increased by Rs 1306,228,323.
The Deferred Tax liability amount has increased by Rs 1990,296,463.
The Secured Loans amount has increased by Rs 1675,843,016
The Unsecured Loans amount has increased by Rs 350,000,000.
OTHER INFORMATION
It has also been noted that the Interest Rate of the company has been on the upward swing over the last few years which shows that the loan amount of the Company has been increasing. It has also been noted that SPS Group has been taken over by Concast Steel Company and a down payment of Rs 800 Crores has been paid.
VISA STEEL
The Comparative Balance Sheet of Visa Steel is as under
PARTICULARS 2009 2010 CHANGE %CHANGE
Equity Share Capital 110.00 110.00 - -
Reserves and Surplus 170.15 204.69 34.54 20.30
Secured Loans 892.97 1107.70 214.73 24.05
Unsecured Loans - 35.04 35.04 100.00
Total Liabilities 1173.12 1457.43 284.31 144.35
PARTICULARS 2009 2010 CHANGE
Current Assets (181.65) (188.76) (7.11)
Miscellaneous Expenses 5.13 2.46 (52.00)
Fixed Assets 778.12 813.63 35.51
Capital work in progress 541.04 770.07 229.03
Investments 30.47 60.04 29.57
Total Assets 1173.11 1457.44 284.33
INTERPRETATION
The Equity Share Capital has remained constant.
The Reserves and Surplus amount has increased by Rs 34.54 Crores.
The Secured Loans amount has increased by Rs 214.73 Crores
The Unsecured Loans amount has increased by Rs 35.04 Crores.
The Current Assets amount has increased by -Rs 7.11 Crores.
The Miscellaneous Expenses amount has decreased by Rs 2.67 Crores.
The Fixed Assets amount has increased by Rs 35.51 Crores.
The Capital work in progress amount has increased by Rs 229.03 Crores.
The Investments amount has increased by Rs 29.57 Crores.
CASH FLOW STATEMENT
The Cash Flow Statement provides information about the Cash Receipts and Payments of an enterprise for a given period.
The Cash Flow at the end of 2008 was Rs 85.70 Crores.
The Cash Flow at the end of 2009 was Rs 70.46 Crores.
The Cash Flow at the end of 2010 was Rs 85.70 Crores.
This shows that the Cash Flow has almost remained constant.
DIVIDEND
The dividend rate of the company has remained constant at 10% over the last three years period. This is an indication that the company has not undertaken many projects in the recent years.
ANNUAL REPORTS
The Annual Reports of the company indicates that Interest rate has been increasing which means that the Bank is taking more loans.
OTHER COMPANIES
The Financial Information of some other companies had also been collected like
GALLANTT STEEL
GANGOTRI STEEL
SURAJ STEEL
But these Companies were not included as their Annual Turnover was less than the prescribed limit of Rs 250 Crores.
CONCLUSION
Among the Companies who's Financial Information has been dealt with the Companies which can be considered by RBS for doing business are
JAI BALAJI
RESHMI METALIKS
VISA STEEL
The prime reason being that all these Companies have a decent Annual Turnover (Reshmi doesn't) but its growth rate is very good. The Operating Incomes of these Companies is also on the upward swing. The Cash Flow generated by these Companies is also very good. The Interest rate of these Companies has been increasing indicating that they are taking more loans for expansion. The Dividend rate indicates that these Companies are undertaking many projects. There is No Capital Unpaid and No Forfeiture of Shares of these Companies. The Different Ratios of these Companies are also satisfactory.
