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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
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