Report on Tisco

7/29/2019 Report on Tisco

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QUANTITATIVE TECHNIQUE

PROJECT REPORT ON TATA IRONAND

STEEL COMPANY-"TISCO"

Submitted to : Prof. R N Subudhi

Submitted by : Group- 9, Sec-CAradhana Rout (12202123)

Asha Gupta (12202126)Vishakha Panchbhai (12202175)Rahul Dhall Praharaj (12202237)

KIIT SCHOOL OF MANAGEMENTSubmitted on : 15.10.2012


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Table of Contents

1. Executive summary

2. Introduction

3. Purpose

4. Source and Method

5. Scope of the study

6. Limitation of the study

7. Research Methodology

8. Data Analysis and Interpretation

9. Conclusion

10. Recommendation

11. Bibliography


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REPORT ON TISCO

EXECUTIVE SUMMARYThe Report made on the TISCO company mainly focuses on the operations of the

company starting from its inception, operations undertaken by it, resources consumed to

reaching the target to the sales and the turnover of the company.

The study focuses on all the aspects that are essential to understand the various trends that

take place for the Tata Steel company by making a comparative study of the data

available for different Financial periods. The report analyses the overall purchase pattern,

consumption pattern, sales pattern, impact on the GDP of the Tata Steel Company.

The first part of the report covers the historical background of TISCO and gives us a

detailed view about its introduction stage and expansion stage. It reflects how company

made a significant impact not only on India but on the entire world.

In the next part of our report we have made a study and analysis of the various data

available with us regarding the various operations of the company and the consumption of

different resources for the production of steel which can help us in the better

understanding of the trends of the Tata Steel Company by making their comparative

study. The graphs and charts help us to know the purchase trend, sales trend, proportionof resources, change in GDP better.

On the basis of our study and analysis we have prepared this report and tried to the best of

our ability to relate the theoretical knowledge with the practical work situation of the

company.

INTRODUCTIONTata Iron and Steel Company limited is abbreviated as TISCO. It is an Indian

multinational steel making company which has its headquarter in Mumbai, India. It is the

twelfth- largest steel producing company in the world and the largest private-sector steel

company in India. Its annual crude steel capacity is 23.5 million tonnes. Its operations

spread to numerous countries in the world.

TISCO was established by Dorabji Tata in the year 1907.In the year 1939, the company

had largest steel plant in the British Empire. The company underwent an Expansion and

modernization program in the year 1951.In the year 1990 TISCO started its expansion

plan and established its subsidiary TATA Inc. in New York. The company changed its

name from TISCO to Tata Steel in 2005.In 2004,it made definitive agreements with the

Singapore based NatSteel Ltd toacquire its steel business foe Rs 1313 crore and in 2007


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it wholly owned it.. In 2005 Tata Steel acquired 40% stake in the Millennium Steel

situated in Thailand for approximately Rs 600 crore.

Tata Steel has its presence in around 50 countries with manufacturing operations in 26

countries which includes India, Dubai, Malaysia, Vietnam, Thailand, South Africa,

Canada, UK, Netherlands, France etc. It has set the target to achieve a capacity of 100

million tonnes by 2015.It is planning for capacity expansion to be balanced equally

between greenfield developments and acquisitions. The overseas acquisitions of Tata

Steel includes Corus production at 18.2 million tonne, NatSteel production at 2 million

tonne and millennium steel at 1.2 million tonne. The Tata Steel is looking to add an

additional 29 million tonnes through the acquisition route. The major competitor of Tata

Steel includes SAIL, Essar Steel, VISA Steel, Arcelor Mittal and JSW Steel.

Tata Steel Company offers its products in the following market sector :

Automotive

Construction

Engineering

Packaging

Rail

Shipbuilding

Aerospace

Defence and Security

PURPOSE

The purpose of our study is to analyse and understand the various operations undertaken

by the Tata Steel company which includes sales, purchase of different raw materials,

consumption of power and fuel, diversification of the employees, profit after tax made by

the company, impact on the Gross Domestic Product (GDP).

This analysis makes it easier for us to discover the factors that have an impact on the

different processes undertaken in the various plants of TISCO. The report helps us tomake right interpretation from the available data of the company. We have collected

relevant data concerning the activities undertaken by TISCO and then we have carried out

an analysis of the available data to have a better understanding of the Tata Steel

Company.

The report makes a comparative study of the data which has an impact on the financial

activities, between different Financial periods of the Tata steel company. It is making it

easier for us to understand, why profit earned by Tata Steel is more in one year as

compared to a different year.

The main objective behind preparing this report on the Tata Steel Company is as follows :


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To know the historical background of TISCO.

To understand the operational activities of the company.

To know details about TISCO's management system.

To observe the general activities of the firm.

To evaluate the performance of TISCO and make suggestions.

To acquire information about its production and manufacturing activities.

To make a comparative study of various data of TISCO relating to different

years.

To study and analyse the trend of the Tata Steel Company.

To focus on the overall performance of the company.

SOURCE AND METHOD

The data for the TISCO report was collected from the records of the Annual Report of

2011-2011 of TISCO. This source is the most reliable source to study and make the

accurate analysis about the changes in the productivity and profitability of the company

by making a comparative study of data available with us for different Financial years.

SCOPE OF THE STUDY

The TISCO Report that we have prepared analyses the trends of only the last five years of

the company. Therefore it cannot suggest adefinitecourse of action that needs to be

taken to increase the profitability of the company.

The report focuses on the operational activities of the Tata Steel Company. It gives the

consolidated view of the financial activities and thus highlights the study in a whole.

LIMITATIONS OF THE STUDYThe report on TISCO has certain limitations that have been mentioned as follows :

Time limitation is one of the challenges that we faced while preparing the report

on TISCO. Since the duration of our project study was one month, it was difficult to

study and analyze all the aspects of the Tata Steel Company.


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We were unable to have any direct communication with the employees of the Tata

Steel Company because its subsidiary is not located nearby and the senior managers

were busy with the activities of the firm.

All the information about the Tata Steel Company has not been covered in our

project. The study and analysis made by us is restricted to the activities performed bythe company in the last five years.

The study completely depended on the Annual Reports and Official Reports of the

Tata Steel Company and we did not have direct interaction with the employees of the

TISCO company.

RESEARCH METHODOLOGYThe research design can be both done from both the primary source and the secondary

source. We have used data for the project report from Secondary sources. We have used

the descriptive type of data which is Quantitative in nature, for the study and analysis

purpose.

The relevant data which was essential for our project report was taken from the Annual

reports of the Tata Steel Company for different financial years like 2007-2008, 2008-

2009, 2009-2010, 2010-2011, 2011-2012. The source is a reliable one because it has been

directly prepared by the company and no third party was involved. This method which

has been used, gives us a clear cut idea about theTISCO company and it makes it simpler

and easier for the reader to understand various trends that take place for the company.

DATA ANALYSIS AND INTERPRETATIONThe detailed data analysis and interpretation of the Tata Steel Company has been

showcased below. The collected data from the annual reports of the Tata Steel Company

have been studied and analysed. Then we have drawn interpretations from them so that it

will make it easier for the reader to understand different aspects that have direct or

indirect impact on the activity of the company.

It portrays the elaborate account of the research findings, statistical evidence and data

relating to the operations of the company in the form of tables, charts and graphs whichhelps us to analyse and study the trends of the company in a simpler manner.

We have collected the data of items like Turnover, Profit after tax, Employee ratio,

Purchase of electricity and coal, Consumption of raw materials, Trend of GDP growth,

investment, Capital employed, Earnings made by the Tata Steel Company from Foreign

Exchange.

The following study and analysis made by us focuses on the trend that takes place in the

TISCO Company.


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TURNOVER :The Table shows the Turnover pattern of TISCO. The Turnover includes theincome from sales and the income from other operating activities of the company.

TURNOVER (Financial yrs) AMOUNT (in crore)

2008 1,31,534

2009 1,47,329

2010 1,02,393

2011 1,18,753

2012 1,32,900

The Turnover has been represented in the following graph which shows the trend of sales

and other operating income after deducting the excise duty. It shows the income earned

by the company from different sources.

The turnover for the year 2009 is maximum as compared to the turnover of other financial

years that we have taken into account and the turnover for 2010 is minimum in the five

years. In 2011 and 2012 we see a gradual increase in the turnover of the company.

PROFIT AFTER TAX :The Profit after tax of Tata Steel relating to the last 5 years is shown inthe following table. It is the profit earned by the company after deducting tax and other

minority interests.

131534

147329

102393

118753

132900

0

20000

40000

60000

80000

100000

120000

140000

160000

2008 2009 2010 2011 2012

TURNOVER


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PAT (Financial yrs) AMOUNT (in crore)

2008 12,350

2009 4,951

2010 (2,009)

2011 8,983

2012 5,390

The Profit after tax (PAT) has been represented in the following graph which makes it

easier to understand the trend of PAT by making a comparative study of the profit after

tax for the years ranging from 2008 to 2012.

The Tata Steel Company has suffered loss in the year 2010 worth Rs 2009 crore but then

we find a rise in its profit in the year 2011.Then the trend of the PAT changes and there is

decline in the amount of PAT.

DIVERSITY OF EMPLOYEES : The diversity of employees refers to the ratio of women to menworking in the Tata Steel company, India. Presently women constitute 4.81% which is

1,721 women employees and men constitute 95.19% which is 34,072 male employees.

The pie chart shows this ratio in a diagrammatic form and helps us to get a better picture

about the diversity of the workforce in the company.

12350

4951

-2009

8983

5390

-4000

-2000

0

2000

4000

6000

8000

10000

12000

14000

2008 2009 2010 2011 2012

PROFIT AFTER TAX


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The Tata steel, India also includes employees from the Scheduled Caste and Scheduled

background. They form 15.71% of the workforce of the company which is 5,622

employees. Specially abled people form0.16% of the employees which is 56 employees.

EFFECT ON GROSS DOMESTIC PRODUCT :The following table shows the trend of theGross Domestic Product growth in percentage of the world, the advanced economies and

the emerging & developing economies for the years 2007, 2008, 2009, 2010, 2011 by the

International Monetary Fund.

TREND OF GROSS DOMESTC PRODUCT

YEARS WORLDECONOMY

ADVANCEDECONOMY

EMERGING &DEVELOPINGECONOMY

2007 5.4 2.7 8.8

2008 2.9 0.2 6.1

2009 (0.5) (3.4) 2.7

2010 5.3 3.2 7.5

2011 3.9 1.6 6.2

The line graph presented below makes the pattern of GDP growth more clear and simple

for us to understand.

5%

95%

RATIO OF MALE & FEMALE EMPLOYEES

female employees

male employees


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We have analysed the trend of GDP growth for 2010 and 2011.In 2011 the world GDP

witnessed a modest growth of 3.9% as compared to a better growth of 5.3% in the year

2010.

The growth in the advanced economies slowed to 1.6% in 2011 in comparison to 3.2% in

2010.

The emerging and developing economies grew at 6.2% in

2011 as compared to 7.5% in 2010.

Thus we can conclude that the GDP growth of 2010 was higher than that of the growth in

2011.

PURCHASE OF ELECTRICITY:The table shows us the trend of purchase of electricity madeby the Tata Steel Company.

ELECTRICITY PURCHASED UNITS (MKW)

2008 2,031.07

2009 2,194.54

2010 2,439.47

2011 2,354.76

2012 2,545.63

The following Graph represents the trend of purchase of electricity of the Tata Steel

Company for the years 2008 to 2012.By analysing the data we can conclude that there is

a consistent increase in the purchase of electricity but in 2011 there is slight decline in the

purchase of electricity. Mostly there is increase in demand of electricity due to higher

production.

5.4

2.9

-0.5

5.3

3.9

2.7

0.2

-3.4

3.2

1.6

8.8

6.1

2.7

7.5

6.2

-6

-4

-2

0

2

4

6

8

10

2007 2008 2009 2010 2011

TREND OF GDP GROWTH (%)

WORLD ECONOMY

ADVANCED ECONOMIES

EMERGING & DEVELOPING

ECONOMIES


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PURCHASE OF COAL :The table given below shows the units of coal purchased by theTata Steel Company in the last 5 years. The pattern of purchase reveals that there is asteady increase in the purchase of coal. This rise is due to the increased production of

coke and the increase in coal price.

COAL PURCHASED UNITS (MILLION TONNES)

2008 3.37

2009 4.75

2010 4.91

2011 5.17

2012 5.39

The following Column Graph shows the change in the purchase quantity of coal in the

years spanning from 2008 to 2012. Thus the diagram helps us to understand the trend in a

better and simpler manner.

2031.072194.54 2439.47 2354.76

2545.63

0

500

1000

1500

2000

2500

3000

2008 2009 2010 2011 2012

PURCHASE OF ELECTRICITY

3.37

4.75 4.915.17

5.39

0

1

2

3

4

5

6

2008 2009 2010 2011 2012

purchase of coal


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CONSUMPTION OF ELECTRICITY PER UNIT OF PRODUCTION :The table given below showsthe units of electricity used for each product of Tata Steel in the years 2011 and 2012.It

reflects the consumption of power of electricity by different products produced by the

Tata Steel company.

Particulars Steel Tubes Bearings F.A.M.D Growth

shop

CRC

West

Wire Div.

Electricity

(kw) 2011356.00 113.00 0.41 3614.14 570.74 113.00 222.14

Electricity

(kw) 2012351.00 105.00 0.33 3728.05 531.67 81.88 216.14

The table has been represented in a Graph for our better understanding of the comparisonof the units of Electricity used in the production of different products in 2011 and

2012.We can conclude that the maximum units of electricity is consumed for the

production of F.A.M.D and the lowest unit of electricity is used for the production of

bearings.

INVESTMENT :Investment includes both the Long term as well as the Short terminvestments made by the Tata Steel Company. The table shows the pattern of investment

followed by the company in the last five years.

351

105

0.33

3728.05

531.67

81.88

216.14

356

113

0.41

3614.14

570.74

113

222.14

0 500 1000 1500 2000 2500 3000 3500 4000

steel

tube

bearing

F.A.M.D

growth shop

CRC West

Wire Div.

2011 2012


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INVESTMENT

YEARSAMOUNT (in crore)

2008 4,103

2009 42,372

2010 44,980

2011 46,564.94

2012 50,282.52

The table reflects the pattern of investment followed by the Tata Steel company. We find

that there is a consistent increase in the investment activities of the company which

indicates that every year the activities of the company are on the rise.

The graph will make a clear picture of the trend of investment. The bar graph shows us

the investments made by the firm and also shows the change in pattern which is a gradual

increase in the amount invested.

CAPITAL EMPLOYED :As the production and the manufacturing activities of the TISCOcompany increase year after year, the capital employed by the firm also rises. There is a

direct relation between the amount of capital employed and the production of iron and

steel by the company. This pattern is shown in the table below.

YEAR AMT OF CAPITAL EMPLOYED (in crore)

2007-2008 92,037.98

2008-2009 90,777.94

2009-2010 79,962.30

2010-2011 10,0837.25

2011-2012 10,8422.88

4103

42372

44980

46564.94

50282.52

0 10000 20000 30000 40000 50000 60000

2008

2009

2010

2011

2012

INVESTMENT


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The graph below gives us a clear picture of the capital employed by the Tata Steel

Company and shows us the change i.e. the increase or decrease of capital in different

financial years.

EARNINGS IN FOREIGN EXCHANGE :The earnings made by Tata Steel Company includes allthe income that it has earned from different activities that it was involved in. The

activities include

Export of steel and other materials.

Interest received.

Income from other sources.The table reflects the trend of earnings made by the company in the last five years.

EARNINGS FROM FOREIGN EXCHANGEYEAR AMOUNT (in crore)

2008 2,286.18

2009 3,374.55

2010 2,099.48

2011 2,373.97

2012 1,850.47

The table above shows us the income earned by the company from abroad in the five

years. It makes it easier for us to understand the trend of such income.

92037.98 90777.94

79962.3

100837.25108422.88

0

20000

40000

60000

80000

100000

120000

2008 2009 2010 2011 2012

Capital Employed


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Thegraph drawn reflects that the Tata Steel Company has earned maximum income from

Foreign exchange in the year 2009 which amounts to Rs 3373.55 crores.

RANK CORRELATION FOR THE YEARS 2011 AND 2012Components 2011(X) 2012(Y) Rx Ry D =

Rx-RyD

TURNOVER 1,18,753 1,32,900 1 1 0 0PAT 8,983 5,390 4 4 0 0ELECTRICITY 2,355 2,546 6 5 1 1INVESTMENT 46,565 50,283 3 3 0 0

CAPITALEMPLOYED

1,00,837 1,08,423 2 2 0 0

EARNINGS INFOREIGN INEXCHANGE

2,374 1,850 5 6 -1 1

D=2

Rank Correlation = 1 - 6 Dn (n-n)

= 1 - 6 * (2)

6(6-6)

= 1 - 12

210

= 1-0.1 = 0.9

0.9 indicates that there is high rank of positive correlation between the attributesthat we have taken into consideration for the Financial years 2011 and 2012.

2286.18

3373.55

2099.48

2373.97

1850.47

0 500 1000 1500 2000 2500 3000 3500 4000

2008

2009

2010

2011

2012

EARNINGS FROM FOREIGN EXCHANGE


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CONCLUSION

The conclusion that we can draw from our study is as follows :

The turnover for the year 2009 is maximum and the turnover for 2010 is minimum in thefive years we have taken into consideration. In 2011 and 2012 we see a gradual increase

in the turnover of the company.

The trend of the Profit After Tax is not consistent in nature. In 2008 the PAT is high but

then it starts declining and in 2010, thecompany suffers loss. But in 2011 there is a strong

PAT growth which gradually declines in 2012 to Rs 5390 crore.

Ratio of male and female employees in the Tata Steel Company reflects that women form

4.81% of the total employees and the remaining employees are male.

The purchase of the raw materials like electricity, coal, etc by the company is on an

increase. The trend is increasing in nature due to increased productivity and higher prices

of raw materials.

The consumption of electricity for the production of F.A.M.D is maximum as compared

to other products produced and manufactured by the TISCO Company.

The trend of Capital Employed is gradually decreasing from 2008 to 2010.Then we canobserve a steady rise in the capital employed by the company in the years 2011 and 2012.

The Tata Steel Company has earned minimum revenue from Foreign Exchange in 2012

and the revenue has been highest from the Foreign Exchange in the year 2009.

RECOMMENDATIONS

The findings from our research study reveal that there is inconsistency in the performance

of the Tata Steel Company. In a year the company is making high profits but in the nextfinancial period it is incurring loss. So it needs to take careful decisions that have an

impact on the financial performance of the company.

When we study its trend after the analysis of data for several years we suggest that the

company has the ability to make the optimum utilization of resources. So it can use it in

still better and more efficient manner.

BIBLIOGRAPHY

websites : www.tatasteel.comwww.wikipedia.org

Documents

Report on Tisco