A STUDY OF PROCESS COSTING WITH REFERENCE TO J. S. W.

STEEL
INDUSTRIES PVT, LTD.

CHAPTER NO. I
INTRODUCTION

INTRODUCTION OF PROCESS COSTING

Process costing is an accounting methodology that traces and accumulates direct
costs, and allocates indirect costs of a manufacturing process. Costs are assigned to
products, usually in a large batch, which might include an entire month's production.
Eventually, costs have to be allocated to individual units of product. It assigns
average costs to each unit, and is the opposite extreme of Job costing which attempts
to measure individual costs of production of each unit.

Process costing is a type of operation costing which is used to ascertain the cost of a
product at each process or stage of manufacture. Process costing is suitable for
industries producing homogeneous products and where production is a continuous
flow. A process can be referred to as the sub- unit of an organization specifically
defined for cost collection purpose. The importance of process costing. Costing is an
important process that many companies engage in to keep track of where their
money is being spent in the production and distribution processes. Understanding
these costs is the first step in being able to control them. It is very important that a
company chooses the appropriate type of costing system for their product type and
industry.

One type of costing system that is used in certain industries is process costing that
varies from other types of costing (such as job costing) in some ways. In Process
costing unit costs are more like averages, the process-costing system requires less
bookkeeping than does a job- order costing system. So, a lot of companies prefer to
use process-costing system. In process costing it is the process that is coasted (unlike
job costing where each job is coasted separately). The method used is to take the
total cost of the process and average it over the units of production.
Cost of inputs
Cost per unit = -------------------------------
Expected output in units

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MEANING OF PROCESS COSTING

Process costing is a method of costing under which all costs are accumulated for
each stage of production or process, and the cost per unit of product is ascertained at
each stage of production by dividing the cost of each process by the normal output of
that process.

DEFINITION OF PROCESS COSTING

CIMA London defines process costing as “that form of operation costing which
applies where standardize goods are produced”

FEATURES OF PROCESS COSTING

 The production is continuous
 The product is homogeneous
 The process is standardized
 Output of one process become raw material of another process
 The output of the last process is transferred to finished stock
 Costs are collected process-wise
 Both direct and indirect costs are accumulated in each process

If there is a stock of semi-finished goods, it is expressed in terms of equaling units.

The total cost of each process is divided by the normal output of that process to find
out cost per unit of that process.

ADVANTAGES OF PROCESS COSTING

 Costs are be computed periodically at the end of a particular period
 It is simple and involves less clerical work that job costing
 It is easy to allocate the expenses to processes in order to have accurate costs.
 Use of standard costing systems in very effective in process costing situations.
 Process costing helps in preparation of tender, quotations
 Since cost data is available for each process, operation and department, good
managerial control is possible.

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LIMITATIONS OF PROCESS COSTING

 Cost obtained at each process is only historical cost and are not very useful for
effective control.
 Process costing is based on average cost method, which is not that suitable for
performance analysis, evaluation and managerial control.
 Work-in-progress is generally done on estimated basis which leads to inaccuracy
in total cost calculations.
 The computation of average cost is more difficult in those cases where more than
one type of products is manufactured and a division of the cost element is
necessary.
 Where different products arise in the same process and common costs are
prorated to various costs units. Such individual products costs may be taken as
only approximation and hence not reliable.

REASONS FOR USE OF PROCESS COSTING:

 Companies need to allocate total product costs to units of product for the
following reasons:
 A company may manufacture thousands or millions of units of product in a given
period of time.
 Products are manufactured in large quantities, but products may be sold in small
quantities, sometimes one at a time two at a time
 Product costs must be transferred from Finished Goods to Cost of Goods Sold as
sales are made. This requires a correct and accurate accounting of product costs
per unit, to have a proper matching of product costs against related sales revenue.
 Managers need to maintain cost control over the manufacturing process.
 Process costing provides managers with feedback that can be used to compare
similar product costs from one month to the next, keeping costs in line with
projected manufacturing budgets.

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RESEARCH METHODOLOGY 
The main aim of the study is to know the financial performance of the J. S. W. Steel
Industries
 Research Any efforts which are directed to study of strategy needed to
identify the problems and selection of best solutions for better results are
known as research. 

 Research Design In view of the objects of the study listed above an

exploratory research design has been adopted. Exploratory research is one
which is largely interprets and already available information and it lays
particular emphasis on analysis and interpretation of the existing and
available information. 

 Research Design Objective 

a) To know the financial status of the company. 
b) To know the credit worthiness of the company. 
c) To offer suggestions based on research finding. 

DATA COLLECTION METHODS 

1. Primary Data
 Information collected from internal guide and finance manager. 

2. Secondary data 
 Company balance sheet and profit and loss account. 
 Company’s annual reports 
 Books :- Financial Account

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CHAPTER NO. II
THEORETICAL BACKGROUND
PROCESS COSTING APPLIED
Process costing is appropriate for companies that produce a continuous mass of like
units through series of operations or process. Also, when one order does not affect
the production process and a standardization of the process and product exists.
However, if there are significant differences among the costs of various products, a
process costing system would not provide adequate product-cost

PROCEDURE OF PROCESS COSTING:

For each process an individual process account is prepared. Each process of
production is treated as a distinct cost center.

I. Items On Debit Side Of Process A/C

 Each process account is debited with –
 Cost of materials used in that process.
 Cost of labour incurred in that process.
 Overheads charged to that process on some pre-determined.
 Cost of ratification of normal defectives.
 Cost of abnormal gain (if any arises in that process)

II. Items On Credit Side Of Process A/C

 Each process account is credited with
 Scrap value of Normal Loss (if any) occurs in that process.
 Cost of Abnormal Loss (if any occurs in that process)

COST OF PROCESS:
The cost of the output of the process (Total Cost less Sales value of scrap) is
transferred to the next process. The cost of each process is thus made up to cost
brought forward from the previous process and net cost of material, labour and

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overhead added in that process after reducing the sales value of scrap. The net cost of
the finished process is transferred to the finished goods account. The net cost is
divided by the number of units produced to determine the average cost per unit in
that process. Specimen of Process Account when there are normal loss and abnormal
losses.

Dr. Process I A/c. Cr.

Particulars Units Rs. Particulars Units Rs.

To Basic Material xxx xx By Normal Loss xx Xx

To Direct Material xx By Abnormal Loss xx Xx

To Direct Wages xx By Process II A/c. xx Xx

To Direct Expenses xx
(output transferred to
To Production
xx Next process)
Overheads
To Cost of
By Process I Stock
Rectification of xx xx Xx
A/c.
Normal Defects
To Abnormal Gains xx

xx xxx xx xxx

PROCESS LOSS:
In many process, some loss is inevitable. Certain production techniques are of such a
nature that some loss is inherent to the production. Wastages of material, evaporation
of material is unavoidable in some process. But sometimes the Losses are also
occurring due to negligence of Laborer, poor quality raw material, poor technology
etc. These are normally called as avoidable losses. Basically process losses are
classified into two categories

A. NORMAL LOSS:
Normal loss is an unavoidable loss which occurs due to the inherent nature of the
materials and production process under normal conditions. It is normally
estimated on of normal wastage, normal scrap, normal spoilage, and normal

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defectiveness. It may occur at any time of the process.No of units of normal loss:
Input x Expected percentage of Normal Loss. The cost of normal loss is a
process. If the normal loss units can be sold as a crap then the sale value is
credited with process account. If some rectification is required before the sale of
the Normal loss, then debit that cost in the process account. After adjusting the
normal loss the cost per unit is calculates with the help of the following formula:
Total cost increased – Sale Value of Scrap
Cost of good unit: --------------------------------------------------------
Input – Normal Loss units

B. ABNORMAL LOSS:
Any loss caused by unexpected abnormal conditions such as plant breakdown,
substandard material, carelessness, accident etc. such losses are in excess of pre-
determined normal losses. This loss is basically avoidable. Thus abnormal losses
arrive when actual losses are more than expected losses. The units of abnormal
losses in calculated as under:
Abnormal Losses = Actual Loss – Normal Loss

The value of abnormal loss is done with the help of following formula:
Total Cost - Scrap Value of
increase normal Loss
Value of Abnormal Loss: -----------------------------------x Units of abnormal loss
Input units – Normal Loss Units

Abnormal Process loss should not be allowed to affect the cost of production as it is
caused by abnormal (or) unexpected conditions. Such loss representing the cost of
materials, labour and overhead charges called abnormal loss account. The sales value
of the abnormal loss is credited to Abnormal Loss Account and the balance is written
off to costing P & L A/c.

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Dr. Abnormal Loss A/c. Cr.

Particulars Units Rs. Particulars Units Rs.

To Process A/c. xx xx By Bank A/c. xx Xx

By Costing P & L A/c. xx Xx

xx xxx xx xxx

ABNORMAL GAIN:
The margin allowed for normal loss is an estimate (i.e. on the basis of expectation in
process industries in normal conditions) and slight differences are bound to occur
between the actual output of a process and that anticipates. This difference may be
positive or negative. If it is negative it is called ad abnormal Loss and if it is positive
it is Abnormal gain i.e. if the actual loss is less than the normal loss then it is called
as abnormal gain. The value of the abnormal gain calculated in the similar manner of
abnormal loss. The formula used for abnormal gain is:

Total Cost Scrap Value of

incurred – Normal Loss
Abnormal Gain = ------------------------------------------------x Abnormal Gain Unites
Input units – Normal Loss Units

The sales values of abnormal gain units are transferred to Normal Loss Account
since it arrive out of the savings of Normal Loss. The difference is transferred to
Costing P & L A/c. as a Real Gain.

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Dr. Abnormal Gain A/c. Cr.

Particulars Units Rs. Particulars Units Rs.

To Normal Loss A/c. xx xx By Process A/c. xx xx

To Costing P & L A/c. xx xx

xx xx xx xx

DISTINCTION BETWEEN JOB COSTING AND PROCESS COSTING

Job order costing and process costing are two different systems. Both the systems are
used for cost calculation and attachment of cost to each unit completed, but both the
systems are suitable in different situations. The basic difference between job costing
and process costing are:

Sr. Basis Of
Job Order Costing Process Costing
No. Distinction

Performed against Production is

1 Specific order
specific orders contentious

Each job many be Product is homogeneous

2 Nature
different. and standardized

Costs are compiled for

each process for
Cost Cost is determined for
3 department on time
determination each job separately.
basis i.e. for a given
accounting period.

Cost Cost is compiled when a Cost is calculated at the

4
calculations job is completed. end of the cost period.

5 Control Proper control is Proper control is

comparatively difficult as comparatively easier as

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each product unit is the production is

different and the standardized and is
production is not more suitable.
continuous.
6 Transfer There is usually not The output of one
transfer from one job to process is transferred to
another unless there is another process as input.
some surplus work.
7 Work-in- There may or may not be There is always some
Progress work-in-progress. work-in-progress
because of continuous
production.
8 Suitability Suitable to industries Suitable, where goods
where production is are made for stock and
intermittent and customer productions is
orders can be identified continuous.
in the value of
production.

INTER PROCESS PROFITS:

Normally the output of one process is transferred to another process at cost but
sometimes at a price showing a profit to the transfer process. The transfer price may
be made at a price corresponding to current wholesale market price or at cost plus an
agreed percentage. The advantage of the method is to find out whether the particular
process is making profit (or) loss. This will help the management whether to process
the product or to buy the product from the market. If the transfer price is higher than
the cost price then the process account will show a profit. This problem arises only in
respect of stock on hand at the end of the period because goods sold must have
realized the internal profits. The unrealized profit in the closing stock is eliminated
by creating a stock reserve. The amount of stock reserve is calculated by the
following formula.
Transfer Value of stock x Profit included in transfer price
Stock Reserve = ----------------------------------------------------------------------
Transfer Price

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WORK IN PROGRESS:
Since production is a continuous activity, there may be some incomplete production
at the end of an accounting period. Incomplete units mean those units on
which percentage of completion with regular to all elements of cost (i.e. material,
labour and overhead) is not 100%. Such incomplete production units are known as
Work-in-Progress. Such Work-in- Progress is valued in terms of equivalent or
effective production units.

MEANING OF EQUIVALENT PRODUCTION UNIT:

This represents the production of a process in terms of complete units. In other
words, it means converting the incomplete production into its equivalent of complete
units. The term equivalent unit means a notional quantity of completed units
substituted for an actual quantity of incomplete physical units in progress, when the
aggregate work content of the incomplete units is deemed to be equivalent to that of
the substituted quantity. The principle applies when operation costs are apportioned
between work in progress and completed units.

Equivalent units of work in progress =

Actual no. of units in progress x Percentage of work completed.

Equivalent unit should be calculated separately for each element of cost (viz.
material, labour and overheads) because the percentage of completion of the
different cost component may be different.

ACCOUNTING PROCEDURE:
The following procedure is followed when there is Work-in Progress
 Find out equivalent production after taking into account of the process losses,
degree of completion of opening and / or closing stock.
 Find out net process cost according to elements of costs i.e. material, labour and
overheads.
 Ascertain cost per unit of equivalent production of each element of cost

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separately by dividing each element of costs by respective equivalent production

units.
PROBLEMS ON EQUIVALENT PRODUCTION:
The problems are dividend in to four groups. They are:
 When there is only closing work-in-progress but without process losses:
In this case, the existence of process loss is ignored. Closing work-in- progress is
converted into equivalent units on the basis of estimates on degree of completion
of materials, labour and production overhead. Afterwards, the cost per equivalent
unit is calculated and the same is used to value the finished output transferred
and the closing work-in-progress.

 When there is closing work-in-progress with process loss or gain:

If there are process losses the treatment is same as already discussed in this
chapter. In case of normal loss nothing should be added to equivalent production.
If abnormal loss is there, it should be considered as good units completed during
the period. If unit’s scrapped (normal loss) have any reliable value, the amount
should be deducted from the cost of materials in the cost statement before
dividing by equivalent production units. Abnormal gain will be deducted to
obtain equivalent production.

 Opening and closing work-in-progress without process losses.

Since the production is a continuous activity there is possibility of opening as
well as closing work-in-progress. The procedure of conversion of opening
work-in-progress will vary depending on the method of apportionment of cost
followed viz, FIFO, Average cost Method and LIFO.

METHODS OF VALUATION OF WORK IN PROGRESS:

 FIFO Method:
The FIFO method of costing is based on the assumption of that the opening
work-in-progress units are the first to be completed. Equivalent production of
opening work-in-progress can be calculated as follows:
Equivalent Production =

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Units of Opening WIP x Percentage of Work needed to finish the units

 Average Cost Method:

This method is useful when price Fluctuate from period to period. The closing
valuation of work-in-progress in the old period is added to the cost of new period
and an average rate obtained. In calculating the equivalent production opening
units will not be shown separately as units of work-in-progress but included in
the units completed and transferred.

WEIGHTED AVERAGE COST METHOD:

In this method no distinction is made between completed units from opening
inventory and completed units from new production. All units finished during the
current accounting period are treated as if they were started and finished during that
period. The weighted average cost per unit is determined by dividing the total cost
(opening work-in-progress cost + current cost) by equivalent production.

 LIFO Method:
In LIFO method the assumption is that the units entering into the process is the
last one first to be completed. The cost of opening work-in-progress is charged to
the closing work-in-progress and thus the closing work-in- progress appears cost
of opening work-in-progress. The completed units are at their current cost

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CHAPTER NO. III

COMPANY PROFILE

TYPE PUBLIC

BSE: 500228
Traded as NSE: JSWSTEEL
NSE NIFTY 50 Constituent

ISIN INE019A01038

Industry Steel

Founded 1982

Founder Sajjan Jindal (Chairman)

Headquarters Mumbai, Maharashtra, India

Area served Worldwide

Key people Sheshagiri Rao MVS, Dr.Vinod Nowal

Steel, flat steel products, long steel products, wire

Products
products, plates

Revenue ₹73,872 crore (US$9.8 billion) (2020)[1]

Operating income ₹7,368 crore (US$980 million) (2020)[1]

Net income ₹4,009 crore (US$530 million) (2020)[1]

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Total assets ₹1.31820 lakh crore (US$18 billion) (2020)[1]

Total equity ₹36,298 crore (US$4.8 billion) (2019)[1]

Number of employees 12,599 (2019)[1]

Parent JSW Group

Subsidiaries Ispat industries Ltd

Website www.jsw.in

INTRODUCTION TO JSW STEEL LIMITED

Steel is crucial to the development of any Modern Economy and it is considered as
the backbone of human civilization. At present, developing countries lead the growth
in world steel demand. Steel occupies this position because of its versatility, strength
and recyclability. Steel is an alloy of iron, carbon other elements, because of its high
tensile strength and low cost, it is a major component used in building, infrastructure,
tools, ships, automobile, machines, appliances, and weapons. JSW Steel Ltd engages
in the manufacture and sales of iron and steel products. The company operates
through two segments steel and power. JSW Steel is a flagship company of the JSW
Group, they are a leading integrated steel manufacturing. Currently one of the fastest
growing companies in

India, they have a presence in over 100 Countries. ISW is also the first company to
manufacture high -strength and advanced high-end steel products for its automotive
segments as a leader in India's steel industry, we believe it is our responsibility to
improve and upgrade the quality of construction in the country. They also pride
ourselves on our CSR activities which aim to make India better every day. JSW Stæl
is recognized worldwide as a purveyor of value-added steel. Today, nearly 40% of
the company's products are high-value steel, and one-fifth of the products are
exported to countries around the workl. With a footprint in over 100 countries, JSW
Sted has become the largest exporter of coaed products in Inda. JSW Energy has a
power generation capacity of 4531 megawatts.

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OBJECTIVIES OF THE STUDY

1. To study about the divisions of JSW company
2. To know the competitors and organizational structure of business.
3. To understand the manufacturing process and strategies of the company.
4. To study SWOT analysis of the company.

INDUSTRY PROFILE
Manufacturing industry is a major growth sector for the Indian economy with diverse
companies including those engaged in manufacturing of machinery and equipment,
electrical and metal products, cement, building and construction material, rubber and
plastic products and automation technology Products. Companies in manufacturing
industry has a wide variety of goods, major products groups include food and
beverages, chemicals, machinery, transportation equipment and computers and
electronics.

The global manufacturing sectors generates more than $12 trillion in annual revenue,
according to the UN top manufacturing countries include china, the US, Germany,
South Korea, India, Italy. Steel is the world's most important engineering and
construction material. It is used in every aspects of our lives, in cars and construction
products, refrigerators and washing machines, cargo ships and surgical scalpels. The
history of steel can be traced back to the emergency of iron, the main component of
steel. Since the 19th century, steel making has made significant changes, making
steel even more poses. Economical and attainable for multi-purposes. The iron and
steel industries are among the most essential industries in India which propels its
industrial development. It has helped in generation of several subsidiaries and small-
scale industries and also supports the power, transport, fuel and communication
industries in the country, Iron and steel are important industries in India.

India was the world's second-largest steel producer with production standing at 111.2
million tones (MT) in 2019. The growth in the Indian steel sector has been driven by

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domestic availability of raw materials such as iron ore and cost-effective labour.
Consequently, the steel sector has been a major contributor to India's manufacturing
output. The Indian steel industry is modern with state-of-the-art steel mills. It has
always strived for continuous modernization of older plants and up-gradation to
higher energy efficiency levels. Indian steet industry is classified into three
categories - major producers, main producers and secondary producers. Steel
industry was de-licensed and de-controlled in 1992 respectively. India is currently
the 2 largest producer of crude steel in the world. In 2017-18 production of total
finished steel (alloy + non alloy) was 126.85 mt, a growth of 5.6% over last year.
Production of pig iron in 2017-18 was 5.73 mt, a decline of 45% over last year. In
February 2016, the Indian Government had imposed the Minimum Import Price
(MIP) condition on 173 steel products. Iron & Steel are freely imported as per the
extent policy. Iron & Steel are freely exported. India emerged as a net exporter of
total finished steel in 2016-17 and 2017-18.

DESCRIPTION OF THE BUSINESS

JSW Steel Itd is an Indian Steel making company based in Mumbai, Maharashtra. It
is one of the fastest growing companies in India with a global foot print in over 140
countries. It is the subsidiary of JSW Group. After the merger of ISPAT steel, JSW
Steel has become India's second largest private sector steel company. JSW steel
planned to inerease in manufacturing capacity to 44.45 million tons per annum by
2030 from the present 19 million tons. The current installed capacity of the stands at
18 MTPA. A S 13 billion conglomerate, with presence across India, USA, South
America & Africa, and the JSW Group is a part of the O.P.

Jindal Group with strong footprints across core economic sectors, namely, Steel,
Energy, Infrastructure, Cement, Ventures and Sports. JSW's history can be traced
back to 1982, when the Jindal Group acquired Piramal Steel Limited, which operated
a mini steel mill at Tarapur in Maharashtra and renamed it as Jindal Iron and Steel
Company (JISCO). JSW's history can be tracked back to 1982, when the Jindal
Group acquired Primal steel limited which operated a mini steel mill at Tarapur in
Maharashtra and renamed it as Jindal Iron and Steel Company (JISCO) Soon after

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the acquisition set up its first steel plant in 1982 at Vasinda near Mumbai. Jindal
Vijayanagar Steel Itd (JVSL) was set up in 1994, with its plant located at
Toranagallu in the Bellary Hospet area of Karnataka. The heart of the high-grade
iron ore belt and spread over 3,700 acres (15km) of land. Located 340 kilometer
from Bengaluru, it is well connected to both the Goa and Chennai Port. In 2005
JISCO and JVSL merged to form JSW steel. JSW Steel formed a joint venture for a
steel plant in Georgia. The company has also tied up with JFE Steel corp, Japan for
manufacturing the high grade automotive steel. JSW has also acquired mining assets
in the republic of Chile, United States and Mozambique. It is the most efficient steel
producer in India and had the ability to expand capacities at lower cost.

The company has one of the lowest conversation cost in the steel industry and is
constantly striving to future improving this metric. JSW Steel is also among the
fastest growing companies in India and has a strong track record on project
execution. It has made big strides in each of the focus areas listed here and has on
capital employed to become one among the top five steel companies globally. JSW
steel has a strong pool of financial capital to sustain its growth. Being in a capital-
intensive industry, the company's objective is to maintain a strong credit rating,
healthy capital ratios and establish a capital structure that maximizes a stakeholder
through an optimum mix of debt and equity.

DIVISIONS OF JSW COMPANY

An $11 billion conglomerate, with presence across India, USA, South America &
Africa, and the JSW Group is a part of the O.P. Jindal Group with strong footprints
across core economic sectors, namely, Steel, Energy, Infrastructure, Cement,
Ventures and Sports.
 JSW Steel: JSW Steel is India's leading private sector steel producer with an
installed capacity of 18 MTPA. JSW Steel boasts of one of the largest blast
furnace with a capacity of 3.3 MTPA. taking JSW's overall capacity to 12
MTPA at Vijayanagar, Karnataka, and its flagship steel plant. Plants are
located across 6 strategic locations in South and West India.

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 JSW Energy: JSW Energy is one of the earliest private entrants into the
power sector positioned strongly as a full-spectrum integrated power
company. With 4531 MW. operational capacity, it remains one of the most
efficient Power Companies in the country JSW Energy is one of the largest
private sector Hydro Operators in India.

 JSW Cement: JSW Cement is currently upgrading production capacity from

6 MTPA to 20 MTPA by the year 2020. Its plants at Vijayanagar in
Karnataka, Nandyal in Andhra Pradesh and Dolvi in Maharashtra utilize slag
from the JSW Steel plants to produce Green cement, which is Engineered for
strength and durability. It is currently executing expansion projects in
Vijayanagar plant (South) and Salboni (West Bengal) and gearing up to set
up a plant in Jaipur (Orissa).

 JSW Sports: With the ambition of increasing India's presence and stature at
the Olympics, JSW Sports runs the Sports Excellence Program (SEP) which
was set up to identify, nurture and develop Indian athletes by providing them
world class training facilities and putting in place an effective support-system
to ensure that they bring sporting glory to the nation on the global stage. JSW
Sports also runs the Bengaluru Football Club & the Bengaluru Yodhas
wrestling team.

 JSW Foundation: JSW Foundation is the social development division of the

JSW Group. It works with corporate social responsibility (CSR) teams of
Group companies in addressing the critical issues relevant to the
communities. JSW Foundation today works in 16 locations across India, in
the Direct Influence Zone of JSW's plant locations and beyond.

 JSW Paints: JSW Paints is a greenfield venture backed by cutting-edge

technology, automation, and scale that's comparable to leading players in the
sector. The company will manufacture and market both industrial coatings as
well as decorative paints. industrial coatings, JSW In Paints commences
operations with coil coatings.

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 JSW Ventures: JSW Ventures partners with anmbitious and growth öriented
entrepreneurs who leverage technology to build long-term capital efficient
businesses. The fund supports ventures and ideas with JSW Group's expertise
in building scalable and profitable businesses.

 JSW Infrastructure: In its first 14 years, JSW Infrastructure has grown to

become one of India's leading Infrastructure development companies. Its
ports and terminals in Maharashtra and Goa currently have an operational
capacity of 33 MTPA. Within the next four years this is going to increase
more than six-fold to reach 200 MTPA through Greenfield and brownfield
expansions.

HISTORY
 They have manufacturing facilities at Vijaynagar in Karnataka, Dolvi,
Vasind, Kalmeshwar. Tarapur in Maharashtra, Salem in Tamil Nadu and
Texas in USA. JSW Steel's plant are in Vijaynagar in Karnataka, is the
largest single location steel producing facility in the largest single location
steel producing facility in the country with a capacity of 12 MTPA. JSW steel
is part of $15 billion O.P. Jindal Group.

 In the year 1995, the company entered into a joint venture with Praxair to
build and operate world's largest cryogenic air separation plants for supply of
oxygen, nitrogen and argon to India's integrated steel facility in Bellary in
Karnataka.

 In 2000 the company implenented a toul integrated resource planning

solution for their business process, which was the first of its kind in India.
The company signed a Memorandum of Understanding (MOU) with miners
in and around the company's captive mines located in the Bellary Hospet
region in Karnataka. The MOU was signed for supplying iron ore fines for
the company's palletization plant.

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 JSW group acquired the company and took over the management from
November 2004. Salem works is the only integrated steel plant in Tamil
Nadu and is located at Pottaneri Kalipatti villages and at about 35 km's from
Salem. In 2005. JSWSL approved the merger of Euro Icon Iron & Steel PVT
Itd, euro coke & energy PVT Itd, and JSW power Itd. the company's name
was changed to JSW steel limited on June 16, 2005.

 In March 28, 2008, the company incorporated a 100% subsidiary namely

JSW building system Itd to design, make, prepare, develop, create, alter,
replace, repair pre-fabricated building Systems and technologies.

 In November 19, 2009, the conmpany signed a strategic collaboration

agreement with JFE Steel Corporation, the world rewarded Japanese steel
company Mumbai. This collaboration agreement provides an ideal platform
for both the steel companies to come together änd leverage each other's
strength to their mutual benefit.

 On I October, JSW Steel announced its plan to set up a second steel

processing center in Pune (Maharashtra). On 25 April 2014, JSW Steel
announced the launch of its cold roll mill 2 (CRM- 2) facility Vijaynagar
works Karnataka. On 29 march 2018, JSW steel declared that it entered into a
stock purchase agreement with JSW International Itd.

MISSION
JSW aims to be an "Innovative Company" that contributes to social development by
positively exploring potential needs among our continuously changing society
through proprietary technologies that we have cultivated throughout technologies
that we are under development To support India's growth in power and steel with
steel Demine with speed & innovation.

VISION

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JSW Steel Itd believes in creating sustainable growth while balancing utilization of
nature resources and social development in its business decisions.
1. It also believes in pursuing its business objectives ethically, transparently and
with accountability to its stakeholders across the value chain.
Global recognition för quality and efficiency while nurturing nature and society.

VALUES
It set ups the Confident for their customers to dream big. Setting high goals for
ourselves and believing that we can do it. Courageous to challenge the status quo and
spark progress. Committed to staying true to our promise, Core values
 Crystal clear
 drive with leadership
 differentiate the benefit
 young thinking
 passion for excellence
 Challenge status.

FOUNDER OF JSW STEEL COMPANY

The founder of JSW is Sajjan Jindal. He is an Indian entrepreneur. He is the
chairman and managing director of JSW Group of companies diversified in steel,
mining, energy, sport, infrastructure and software business.

PARTNER AND ASSOCIATES OF JSW STEEL COMPANY

JSW have the partnership with global sector leaders such as JFE steel.
 Marubeni Itochu steel.
 Praxair and Sever field Rowen.
 JSW Energy Ltd.
 JSW Cement Ltd.
 JSW Ispat Steel.
 JSW Holdings Ltd.
 JSW Infrastructure & Logistics Ltd.
 Vijaynagar Minerals Pvt Ltd.

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 Jindal Praxair Oxygen Co. Ltd.

INFORMATION ABOUT FUNCTIONAL AREAS IN BUSINESS

Branch Name Address Pin code
Kudligi road, Toranagallu
JSW Seel Vijay nagar
village, Ballari- Hospete, 583123
plant
Karnataka
A-10/1, MIDC Industrial
JSW Steel Kalmeshwar
Area, SH265,Kalmeshwar, 441501
plant
Maharashtra
Meyyanur Salem, Tamil
JSW Steel Salem Plant 636005
Nadu
B-6, Navapur Road,
JSW Steel Coated
Tarapur M.LD.C, Boisar, 401506
Products
Maharashtra
Taluka Sahapur, Vasind,
JSW Steel Vasind Work 421604
Maharashtra
Dharamtar. Taluka Pen,
JSW Steel Dolvi works 402107
Dolvi, Maharashtra
U 607,6h floor, East Wing,
JSW Steel Bangalore
Raheja Towers, MG Road, 560001
works
Bangalore, Karnataka
New Delhi works for
handicapped Qutab
National trust JSW Steel 110016
Institutional Area, New
Delhi
.
NUMBER OF EMPLOYESS
There are 12,599(2019) employees in JSW steel company. JSw has spent total
Rs.175, 47 crores on employee's remuneration and benefits.
 Revenue: 73,872 crores.
 Total assets: Rs. 131. 820 crores (2020)
 Total equity: Rs.36, 298 crore (2019).

MAJOR ACHIEVEMENTS, AWARDS, CERTIFICATIONS

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 The Platt's Global Metal Awarded in the year 2015 modelled after the plats
global energy awards.
 JSW Steel bags the steel Minister's trophy for being the 2 best integrated steel
plant in the country.
 JSW Steel wins at Asia Sustainability Reporting Award.
 JSW Steel bagged Global Innovation Award at 2019 India Perspeetive.
 JSW Steel was awarded for the Best Raw Material Supplier of 2018.
 JSW Steel was awarded for the outstanding support for the year 2019 by
Honda cars.
 JSW Steel Coated. Vasind wins the 1" prize in the 13 State Level Award for
Excellence in Energy.
 JSW Steel gets recognized by World Steel Sustainable Champions of 2018.
 JSW Steel coated products Itd en awarded with Gold Category for Excellence
in Energy.
 Eficiency for year 2018 by Apex India,
 JSW Steel's wins the prestigious Deming Prize fir its excellence in TQM.
 JSW Steel included in the NIFTY 50 index.
 Ranked sixth among the best operating steel plants in the world.
 Institution of Competitiveness awarded a certificate for making a global
impact.
 National Sustainability award in 2016 for creating better tomorrow.
 CH-EXIM Bank Business Excellence award in 2015 for leading the way.
 CII-ITG Sustainability award in 2014 for achieving greater heights.

COMPANY CONTACT DETAILS JSW

Center Bandra Kurle Complex, near MMRDA grounds, Bandra east, Mumbai 400
051. +91 22 42861000, +91 22 42863000, JSW Steel -1800225 225.

COMPETITORS OF JSW STEEL LTD

 Adhunik industries Itd
 Beckay steel industries Itd
 Gallant ispart Itd Manaksia steels Itd

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 Ocl iron & steel Itd

 Prakash industries of India Itd
 Steel authority of India ltd
 Steel exchange India Itd
 Tata steel Itd Jindal steel Itd
 Visa steel Itd
 Reliance steel & aluminum Bao steel.

ORGANIZATIONAL STRUCTURE
 GM: General Manager.
 CS: Company Secretary.
 AGM: Assistant General Manager.
 CEO: Chief Executive Officer.

LIST OF PRODUCTS
With a footprint in over 100 countries, JSW steel has become the largest exporter of
coated products in India.
 Flat Products
a) Hot Rolled (HR).
b) Cold Rolled (CR).
c) Color coated Products.
 JSW Coloron.
 JSW Coloront,

d) Galvanizcd
 JSW Vishwas.
 GALVOS.

e) Galvalume
 JSW Vishwas+.
 GALVOS.
 Long products

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a) TMT Bars.
b) Neosteel bars.
c) Wire rods.
d) Special Alloy Steel.

PROCESS OF STEEL MANUFACTURING

Steel is one of the most preferred materials for construction, manufacturing of tools,
cars and for various other application. It is an alloy of iron and some other elements
such as chromium. Steel has been manufactured since ages, but the large-scale
commercialization of the process began only in the 19 century. The 1850s and 1860s
saw the advent of different revolutionary techniques, turned the steel-making process
into a măinstream industry. The ensuring technological advancements in the
injection technology as well as in the process control, has made mass production of
steel easier, and an integral part of the global economy.

Manufacturing:
Steel making involves removal of impurities such as nitrogen, silicon, phosphorus,
Sulphur and carbon from the sourced iron, as well as alloying other elements such as
manganese, nickel, chromium etc. to produce different grades of steel. Modern steel
industries use recycled materials as well as traditional raw materials such as iron ore,
coal and limestone. Almost all the steel manufactured today uses 2 processes basic
oxygen steel making (BOS) and electric arc furnaces (EAF). There are 6 basic steps
in the steel making processes which are as follows:
 Iron-making: This is the first step in the manufacturing of pure steel. In this
step, the raw materials like iron ore, coal and lime are melted in a blast
furnace. This results in the formation of molten iron also known as hot metal,
which still contains 4-4.5% of carbon and other impurities, which makes it
brittle. These have to be subsequently removed.

 Primary steel making: The remaining impurities are removed by either BOS
or EAF methods. In the BOS method, recycled or scrapped steel is added to
the molten iron in a convertor. Oxygen is blown through the metal at high

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temperatures and this reduces the carbon content to about 0-15%. In the EAF
method, scrap steel in fed through high-power electric arcs to melt the metal
and convert it into high quality steel. The steel that is obtained at the end of
this step, by either of the methods is called raw steel.

 Secondary steel making: This step involves treating the raw steel in different
ways to get different grades of steel. This may include addition or removal of
certain elements and or altering the temperature and the production
environment. The final grade of steel that is desired determines the future
techniques that need to be applied. These may include Stirring Altering the
temperature Land injection Removal of gasses CAS-OB.

 Continuous casting: In this step, the molten steel is casting into cooled
moulds, causing the steel is drawn out of the moulds while it is still hot and
then allowed to cool and fully solidify. Next it is cut to the desired lengths,
depending on the applications-beams, slabs, billets etc

 Primary forging: In primary forming, the cut steel is formed into different
shapes, generally by hot rolling, which eliminates the casting defects and
gives a desirable shape and surface quality. Seamless tubing, long products,
flat products and various other specialty products. Can be obtained by this
process.

 Secondary forming: The final step is the secondary forming process, which
gives the steel its finished shape and properties. Various techniques can be
applied at this stage, which involve Heat treatment (tempering) Joining
(welding) Shaping (cold rolling) Coating (galvanizing) Machining (drilling)
Surface treatment (carburizing).

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MANUFACTURING PROCESS OF THE PRODUCT HOT STRIP

MILL
 Re-heating furnace: walking beam type, heat the slabs to the rolling
temperate by using corex gas.

 Primary descale: The purpose of primary declare is to remove the seale

which is formed due to the oxidation of hot metal when it comes out of the
furnace decaling is done using water jets as a pressure of 180 bar.

 Rouging mill: It is powerful four-high reversing roughing mill equipped

with a powerful hydraulically operated vertical edger with an automatic
width control for effective slab reduction which facilitates easier operation of
the finishing mill a produces a good quality hot rolled coils(HRC).

 Coil box: It achieves uniform temperature of the bar from head end to tail
end, effecting isothermal rolling and perfect control on the gauge.

 Rotary crop shear: The purpose of rotary crop shear is to crop the front end
and tail end of the strip prior to entering the FI standing the cut is made on
the fly. The shear is composed of two horizontal drums with curved blade
and a straight knife blade on each drum.

 Pinch roll scale breaker: To remove the fine scale formation from the strip
before it enters the finishing stands by using high precision water spray on
the top and bottom of the transfer strip.

 Finishing mill: to ensure a good quality strip with good gauge control,
profile control and a surface free from any possible defects. The plant has a
six stand for finishing mill equipped among with automatic gauge control,
work rolls bending quick control, roll changing devices, low inertia hydraulic
inter stand loppers and de-scaling facilities.

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 Run out table: this is provided in between finishing stand and coiler. The
strip coming out of finishing stand having a temperature of 850c to 950c is
cooled down to a temperature to 540c to 650c. A series of water jets well
spread uniformly over the strip from the bottom and laminar cooling heads
are provided at the top. ROT table consists of 96 mts length and 20 number
cooling headers.

 Down coiler: Two hydraulic down coilers are supplied by Danieli United,
USA equipped with out-board bearing supports to take care of heavy coil
windings. Hydraulically controlled wrapper rolls with jump control ensure
compaet winding with no damage to the strip surface.

JSW MARKETING MIX STRATEGY

Marketing Mix of JSW analyses the brand/company which covers 4Ps (Product,
Price, Place, Promotion) and explains the JSW marketing strategy. There are several
marketing strategies like product/service innovation, marketing investment, customer
experience ete. which have helped the brand grow. Marketing strategy helps
companies achieve business goals & objectives, and Marketing Mix (4Ps) is the
widely-used framework to define the strategies. This article claborates the product,
pricing, advertising & distribution strategies used by JSw.
 JSW Product Strategy. The product strategy and mix in JSW marketing
strategy can be explained as follows: JSW is one of the leading
conglomerates in India. The key products, services and businesses in the
marketing mix of JSW group are Steel, Energy, Infrastructure, Cement,
Sports and Ventures. Its steel business is the flagship company and a major
contributor to the group's revenue. JSW has a capacity of 18 MTPA and it is
an integrated steel manufacturer.

 JSW Price/Pricing Strategy: Below is the pricing strategy in JSW marketing

strategy: JSW uses different pricing strategies for different sectors and the
major contributor and its flagship company JSW Steel uses a strategy that is
not fixed. As the raw material prices are very dynamic and market forces

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change very frequently it has to modify its strategies to be sucessful. Prices

are generally reviewed and modified every fortnight or at least once in a
month. It also follows differential pricing by pricing differently at different
locations. Current JSW Neo Steel TMT bars are prices starts at Rs.242 for
8m and 32mm bar is priced at nearly Rs.3734. These are the prices per piece.

 JSW Place & Distribution Strategy. Following is the distribution strategy of

JSW: JSW group is present across different countries and its major markets
include India, USA, and South America & Africa. This shows the strong
place strategy in its marketing mix. JSW steel is manufactured from the
plants at Karnataka, Tamil Nadu and Maharashtra. It also has steel mill in
Texas. Its Energy business caters to the needs of customers in different
Indian states and also it has a stake in companies in South Africa. Its
Infrastructure department develops ports in Goa and Maharashtra. Its cement
business is operated from plants at Karnataka, Nandyal in Andhra Pradesh
and Dolvi in Maharashtra. It has strong distribution networks in the name of
JSW Shoppe which is a retail network. It is chain of nearly 400 retail stores
across the country.

 JSW Promotion & Advertising Strategy: The promotional and advertising

strategy in the JSW marketing strategy is as follows: As the businesses are
mostly B2B JSW involves in dealer promotional activities. It uses ad
campaigns which are run in television and digital spaces. Its latest brand
promotion Rukna Nahi Hai' is launched for Olympics. It also uses on ground
amplifications, slides and ads in cinema halls and also outdoor promotions
like billboards and hoardings at strategic locations. JSW uses social media
platforms also effectively to promote its brand. Ogilvy & Mather creates ads
for JSW, it previous ads include will of steel' showing its brand ambassador
Geeta journey into mainstream wrestling.

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MARKETING DEPARTMENT
The strings of the management of the company are in the hands of Board of
Directors who reports to the Vice President. The Vice President looks after the
affairs of the company. The various units of JSW:
 Raw material handling store (RMHS).
 Pellet plant (PP). Corex.
 Basic Oxygen Plant (BOP).
 Continuous Casting Plant (CCP).
 Hot Strip Mile (HSM).
After the production, the company sends to its plant regarding consumer
requirements quality and quality details and transportation facility and delivery date
to dispateh departiment for dispatch the goods at correct time. Main products for
marketing:
a) HR Coils.
b) Slabs.
c) Pellets.

 Sales plan: The interested customiers will send a letter to JSW for enquiry
their availability of the product, terms, and conditions. If they find
satisfactory the order will be placed which including quality, quality of the
product, mode of transport terms of payments ete. After receives the purchase
order and if the same size is satisfactory, JSW sends a sales order and as
acceptance letter.one of the duplicate copies of the sales order is retained
with the dispatch section and one with accounts department. The purchase
then confirms his order by sending back the acceptance letter duly signed.
JSW after receiving the acceptance scrutinizes it and then correspond section
seeks back the range for the availability on required goods and duly prepares
a 'Daily Dispatch Plan' which is passed on the dispatch section and then carry
on.

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 Sales promotion: Sales promotion covers those marketing activities other

than advertising, publicity and personal selling. It acts as a bridge between
personal selling and advertising. JSW adopts sales promotion techniques:
a) JSW is going to provide price off, a straight discount off the list price on
each case purchased during a stated time period.
b) The company developed customer sensitives and it provides incentives
and discounts on regular and bulk purchase.
c) Sometimes JSw provides transport allowances to buyer.

1. Marketing plan: In JSW before market planning the top-level management

makes a business plan by considering by annual demand and production
capacity and then year target plan and monthly plan. Senior vice president of
marketing (Mumbai) of JSW makes the marketing planning, This plan is
formulated by taking consideration orders received like personal visit to
company nearby JSW, through branch officers by E-mail, Fax etc. Objectives
of market planning are:
a) To achieve set standard.
b) To enjoy profits.
c) To satisfy customers as it is buyers' market.

2. Physical distribution: Physical distribution is a process of reaching the

product to the consumers. It coordinates all the activities in the physical flow
of product between producer and consumer. There are two major
components:
a) Transportation: The main product of JSW in HR Coils (HOT
ROLLED). The weight of each coil will be approximately 20 to 30
tons, so the airway transport is not the best mode for transportation
because it is more costly, capacity will be limit and cannot carry bulk
orders. The transportation mode of JSW is road way and railway
because it is low cost compared to others, more accurate, it eliminates
the terminal cost, JSW use truck as main vehicle for transportation.

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b) Warehousing: JSW does not maintain more stock because their

capacity is 2.5 million tons, out of which they produced is dispatch to
different places according to the orders received. JSW is maintaining
a small part as a stock in Bangalore, Chennai and Hyderabad because
there Concentrating on small market also, the profit margin high.
c) Channels of distribution: An industrial goods manufacturer can use
it sales forces to sell directly to industrial customers or it can be
industrial distributors. JSW receives orders directly from industrial
customer and JSW sells their product through their branch officers
only. JSW is exporting their product through dealers and direct
customers about 11% of their production. JSW is marketing 60% of
their productions to their group companies.

SWOT ANALYSIS OF JSW STEEL COMPANY

A. Strength
 Experienced business units- JSW steel is testimony of years of experience
and a self- motivated culture that has concluded in the company
becoming the top manufacturing of value added and high end steel in
India.

 Strong presence in domestic market-A 5.8% market share in India. set up

in 1982at Vasind near Mumbai, the group diversified and finally has a
very strong presence in India with plants in six locations in India
Vijayanagar in Karnataka , Salem in Tamil Nadu and Tarapur , Vasind
Kalmeshwar and Dolvi in Maharashtra

 First steel producer in the world to use corex technology for producing
hot metals - JSW steel is the first Indian company to use the Corex
technology to produce hot metal. They went for this technology although
it was untested in India conditions due to its benefits to the environment.

B. Weakness

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 Very low capacity utilization- it has an aggregate capacity utilization of

only 76% whereas competitors like Tata have 103%,
 Less number of mines under its hood affects availability of raw materials-
only 5 mines available for raw material acquisition.

C. Opportunities
 Growing economy therefor increasing demand- Indian steel consumption
of 65kg per capita is well below world average of 235kg per capita
leaving plenty of room for market growth in 2015
 Government rules and regulation- the governnient has recently imposed
minimum import price on steel imports on six months that can benefit
JSW having strong presence in trade segment.

 R & D in steel industry is underdone and can be a good opportunity for

cost reduction- using corex technology, JSW has already pioneered in
R&D in the industry. It needs to maintain its zeal and keep investing in
R&D in order to reduce manufacturing costs.

D. Threats
 Government changes to auction rules of mining- the government changed
rules protecting tribal rights, forests and environment to ensure that more
than 130 mines do not face fresh auctions and are retained by the miners
concerned. This might hinder new acquisition of mines by JSW.

 Rising prices of coal- the cost of power generation in the state had firmed
up by 5% to 7% after the public seetor giant coal India Itd (CL) raised
coal prices by 6, 3% few months back and the ministry of railways started
levying coal terminal charge for loading and unloading of coal. This will
thus increase the cost of raw material and controlling the cost of
manufacturing will be a threat.

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CORPORATE SOCIAL RESPONSIBILITY

JSW believes in inclusive growth to facilitate creation of a value-based and
empowered society through continuous and purposeful engagement of society. JSW
firmly believes in strengthening the social capital. It has adopted a Corporate Social
Responsibility Policy where it strives to address the issues related from antenatal
stage of life up to the reproductive age of 45 years in theme 'Janam se tak, JSW Aap
ke Saath' through a process of social inclusion. JSW Steel is India's leading
integrated steel producer with a capacity of 14.3 MTPA. Spent Rs.32 crores (2010-
11) on corporate social responsibility activities. JSW Steel is committed to:
 Allocate at least 2% of its average net profits made during the three
immediately preceding financial years towards corporate social
responsibility. as per the categories mentioned in schedule VII of the
Company's Act 2013.
 Transparent and accountable system for social development and conducting
periodic assessments.
 Concentrate on community needs and perceptions through social processes
and related infrastructure development.
 Provide special thrust towards empowerment of women through a process of
social inclusion.
 Spread the culture of volunteerism through the process of social engagement.

Focus: JSW Steel has decided to focus on the complete life cycle approach where
women shall be empowered in such a way that they become strong positive force to
charge
 Efficient nmaterial and child health care service.
 Enhance access to improved nutrition services.
 Early childhood education/pre-primary education.
 Completion of primary and secondary education.
 Access to adolescent reproductive and sexual health and rights.
 Enhancing the output of present occupation.
 Employability and vocational education.
 Responsible parenthood.

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PESTEL ANALYSIS
 Political Analysis: The government plays a crucial role, both as a supplier
and a customer, and creates an environment for business there by creating the
rules for companies. It creates boundaries with in which the steel industry
must operate. In the Indian Steel industry, government controls financial and
many other inputs -both raw material and services. The government has
however also given opportunities to private players. This is, in the long run,
expected to improve the power situation in the country., to the benefit of the
steel industry. The government as a buyer is critical for the steel industry.
Investments in infrastructure such as rail, highways, dams, power plants and
ports are critical and chief movers for steel demand. Government spending on
infrastructure shoots the demand for long products and then for flat products.
The demand for long products finishes with a saturation of infrastructure
development. This is expected to provide the necessary boots to the stagnant
steel demand.

 Economic Analysis: The growth of steel industry will be funded by expected

investment in manufacturing units requiring steel as the government,
partnering up with private investors, is investing in the development of
India's infrastructure. Iron and steel industry is expected to continue growing
at a CAGR of 11% over 2015- 2020 reaching Rs 12 trillion by 2020. The
Indian steel industry suffers from low productivity of labor and high capital,
energy and transportation cost Industry needs investment towards technology
up gradation and quality up gradation.

 Safety Analysis: Quality Steel industry constantly strives to improve the

quality of life of the communities it serves through excellence It is committed
to create value for all their stakeholder by continually improving their
systems and process. Safety Steel industry ensures the safety and health of all
its employees under various companies. Company set up dedicated
committees in order to maintain safety standards and it takes safety as a very

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critical and major agenda. The company is responsible for: Establishing safe
and healthy work environment Ensuring compliance with mandatory work
environment Proper maintenance and orderly housekeeping, to control the
risk of damage to plant and Insisting in safe work procedures being followed
by employees, contractors and visitors alcohol and drugs

 Human resource In the competitive environment, steel companies know that

its people are the primary source of its advantage, It is committed to just
employment opportunities to attract the best available talent and ensure a
satisfied work force.

 Technology Analysis: With the advent of Midrex and corex processes of

iron making, which use non-coking coal, the requirement for coking coal
dropped drastically. With the introduction of continuous strip processing
(CSP), due to elimination of intermediate steps and improvement of yield and
price performance ratio, the cost of production of cold rolled sheet reduced
significantly. The convergence of IT with steel may help reduce direct and
indirect sales costs, keep control over the sales channel and enhance reach.

 Environment Analysis: Climate change the greenhouse gas emission from

the fossil. Air emission from the production from cook. Naphthalene,
ammonium compounds, erode light oil, sulfur and coke dust. Emission of
water. Water emission come from the water used to cool after it has finished
baking. Most pollutants can be removed by filtration. Slag, the limestone and
iron ore impurities make up the largest portion of iron-making by products
gascous emission and metal dust are prominent source of waste.

QUALITY POLICY
In our endeavor to become the most preferred global steel supplier, JSW Steel shall
strive to sustain organizational excellence by continuousły improving quality in all
aspects o business. We are committed to delivering Product and Services with 'Zero
Defects'. JSW Steel would have total quality management (TQM) in all its three

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plants, including at Dolvi Works in Maharashtra and Salem Works in Tamil Nadu by
2020, said a senior official The Dolvi plant is located about 80 km from Mumbai on
the west coast.

TOM has enabled the $13- billion JSW Group's flagship business to drive
operational efficiencies and strengthen its customer service orientation. "The TQM
implementation has been focused on building and strengthening the problem-solving
capabilities of our employees at Vijayanagar," said Rao. JSw Steel's Deputy
Managing Director Vinod Nowal said the company had a pro-active customer-
oriented quality assurance teams in all its three plants. The Vijayanagar plant won
the global quality award -- The Deming Prize -- in October for its TQM practices.
The Deming Prize is awarded annually by the Japanese Union of Scientists and
Engineers to a firm implementing TQM suitable for its management philosophy,

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CHAPTER NO. IV
DATA ANALYSIS AND INTERPRETATION
BALANCE SHEET
Particulars   Years  
  2017 2016 2015
Equity and liabilities      
Shareholders’ funds      
1,039,939,76 1,039,939,76 1,039,939,76
Share capital
5 5 5
1,289,920,93 1,330,242,67 1,410,215,74
Reserve and surplus
1 1 1
2,329,860,69 2,370,182,43 2,450,155,50
 
6 6 6
Share application money
   
pending allotment  
Non-current liabilities      
Long term borrowing 375,971,569 355,690,357 346,441,847
Deferred tax liabilities (net) - -  
Other long term liabilities 218,124,972 32,57,88,979 372,623,974
Long term provisions 27,321,161 25,228,322 26,682,000
  621,417,702 706,707,658 747,747,821
Current liabilities      
Short term borrowing 368,495,542 300,023,735 304,516,203
1,245,675,62 1,986,490,31 1,967,479,73
Trade payables
8 0 1
Other current liabilities 150,822,775 39,530,439 73,078,406
Short term provisions 134,135,450 136,119,389 116,664,877
1,899,129,39 2,462,163,87 246,17,39,21
 
5 3 6
4,850,407,79 5,539,053,96 565,96,42,54
Total
3 7 3
Assets    
Non-current assets    
a) Fixed assets    
2,477,506,13 2,314,858,68 2,280,511,42
i) Tangible assets
9 1 9

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ii) Intangible assets 4,163,925 5,656,703  

iii) Capital work in progress   176,337,360 191,824,040
2,481,670,06 2,496,852,74 2,472,335,46
 
4 3 9
b) Non-current investments 21,476,940 21,476,940 21,476,940
c) Deferred tax assets (net)   1,78,03,360 36,108,849
d) Long term loans and advances 184,974,747 191,934,988 188,055,228
e) Other non-current assets 66,464,805 281,516,301 422,055,338
2,754,586,55 3,009,584,33 3,140,031,82
 
6 3 4
Current assets      
a) Current investments      
1,087,588,40 1,356,407,16 1,664,150,39
b) Inventories
5 4 1
c) Trade receivables 400,497,644 659,223,336 411,433,969
d) Cash and cash equivalents 18,566,728 29,996,457 25,768,781
e) Short term loans and advances 304,298,359 184,714,405 157,518,135
f) Other current assets 28,4,870,101 299,128,273 260,739,443
2,095,821,23 2,529,469,63 2,519,610,72
 
7 4 0
4,850,407,79 5,539,053,96 5,659,642,54
Total
3 7 3

PROFIT AND LOSS ACCOUNT

Sr.
Particulars   Years  
No.
    2017 2016 2015
  Income      
6,336,048,45
1 Revenue from operation (gross) 5,734,806,718 10,944,649,232
6
  Less:- Excise duty 6,05,143,905 497,174,792 560,098,922
583,88,73,66
  Revenue from operation (net) 512,96,62,813 10,384,550,310
3
2 Other income 52,146,810 104,709,272 99,003,129
5,943,582,93
3 Total revenue (1+2) 5,181,809,623 10,483,553,439
6
4 Expenditure      
3,163,101,84
  a)      Cost of materials consumed 3,805,290,777 4,434,090,575
3
1,770,185,89
  b)      Purchase of stock in trade 323,565,623 5,073,013,743
3
c)      Changes in investments of
  finished goods, work in progress and -333,578,325 -335,995,134 -589,541,198
stock in trade
  d)      Employee benefits expense 178,732,303 213,615,124 207,677,447
  e)      Finance costs 110,298,251 98,572,432 94,797,735
f)       Depreciation and amortization
  153,088,368 179,198,892 183,628,723
expense

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  g)      Other expenses 923,639,402 832,308,251 1,017,816,953

5,920,987,30
  Total expenses 5,161,033,399 10,421,483,978
1
Profit/loss before exceptional and
5 20,776,224 22,595,635 62,069,461
extraordinary items and tax (3-4)
6 Exceptional items      
Profit/loss before extraordinary
7 20,776,224 22,595,635 62,069,461
items and tax (5+6)
8 Extraordinary items    
9 Profit/loss before tax (7+8) 20,776,224 22,595,635 62,069,461
10 Tax expenses:-    
a)      Current tax expenses for current
     
year
b)      Less:- MAT credit ( where
     
applicable)
c)      Current tax expense relating to  
    -324,625
prior years 430,000
  d)      Net current tax expense 430,000   -324,625
  e)      Deferred tax   17,803,360 18,305,489
    430,000 17,803,360 17,980,864
11 Profit/loss after tax (9+10) 21,206,224 40,398,995 80,050,325
Earning per equity share of face
       
value of 1/- each
  Basic and diluted (in Rs.) 0.05 0.1 0.2

DATA ANALYSIS AND INTERPRETATION

1. CURRENT RATIO
Formula:-
Current Assets
Current Ratio =
Current Liabilities

Chart:-
Particulars   Years  
  2017 2016 2015
Current Assets 2,095,821,237 2,529,469,634 2,519,610,720
Current Liabilities 1,899,129,395 2,462,163,873 2,461,739,216
Total Ratio 1.10 1.03 1.02

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Graph:-

Current Ratio

32% 35% 2017

2016
2015

33%

Interpretation:-
This graph is shows to current financial position of JSW Steel Industries Pvt,
Ltd. on the basis of current ratio. In 2015 the current ratio is 32 % and 2016 the
current ratio is 33% will be increase with the value of 1 % on previous year. In
2017 the current ratio is 35% will be increase with the value of 2 % on previous
year.
2. QUICK RATIO

Formula:-
Quick Assets
Quick ratio =
Quick Liabilities

Chart:-

Particulars   Years  
  2017 2016 2015
Quick Assets 723,362,731 873,934,198 594,720,885
Quick Liabilities 1,899,129,395 2,462,163,873 2,461,739,216
Total Ratio 0.38 0.35 0.24

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Graph:-

Quick Ratio

25%

39% 2017
2016
2015

36%

Interpretation:-
This graph is related to quick ratio of JSW Steel Industries Pvt, Ltd. In 2015 the
quick ratio is 25 % and 2016 the quick ratio is 36 % will be increase with the
value of 11 % on previous year. In 2017 the quick ratio 39 % will be increase
with the value of 3 % on previous year.

3. DEBT-EQUITY RATIO

Formula:-
Long term loan
Debt-equity ratio =
Shareholders fund

Chart:-

Particulars   Years  
  2017 2016 2015
Long Term Loan 744,467,111 655,714,092 650,958,050
Shareholders’ funds 2,329,860,696 2,370,182,436 2,450,155,506

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Total Ratio 0.32 0.28 0.27

Graph:-
Debt-Equity Ratio

31%
37% 2017
2016
2015

32%

Interpretation:-
This graph shows debt-equity ratio of JSW Steel Industries Pvt, ltd. In 2015 the
debt-equity ratio is 31 % and 2016 the debt-equity ratio is 32 % will be increase
with the value of 1 % on previous year. In 2017 the debt-equity ratio 37 % will
be increase with the value of 5 % on previous year.

4. DEBT TO CAPITAL EMPLOYED RATIO

Formula:-
Long term debt
Debt to capital employed ratio =
Capital employed (net assets)

Chart:-
Particulars   Years  
  2017 2016 2015
Long Term Debt 375,971,569 355,690,357 346,441,847
Net Assets 196,691,842 67,305,761 57,871,504
Total Ratio 1.91 5.28 5.99

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Graph:-

Debt to Capital Employeed Ratio

14%

2017
2016
45%
2015

40%

Interpretation:-
This graph shows debt to capital employed ratio of JSW Steel Industries Pvt, ltd.
In 2015 the debt to capital employed ratio is 45 % and 2016 the debt to capital
employed ratio is 40 % will be decrease with the value of 5 % on previous year.
In 2017 the debt to capital employed ratio 15 % will be decrease with the value
of 25 % on previous year.
5. PROPRIETARY RATIO

Formula:-
Shareholders’ funds
Proprietary ratio =
Capital employed (net assets)

Chart:-
Particulars   Years  
  2017 2016 2015
Shareholders’ Funds 2,329,860,696 2,370,182,436 2,450,155,506
Net Assets 196,691,842 67,305,761 57,871,504
Total Ratio 11.85 35.22 42.34

Graph:-

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Proprietary Ratio

13%

2017
2016
47% 2015

39%

Interpretation:-
This graph shows proprietary ratio of JSW Steel Industries Pvt, Ltd. In 2015 the
proprietary ratio is 47 % and 2016 the proprietary ratio is 40% will be decrease
with the value of 7 % on previous year. In 2017 the proprietary ratio 13 % will
be decrease with the value of 27% on previous year.

6. TOTAL ASSETS TO DEBT RATIO:-

Formula:-
Total assets
Total assets to debt ratio =
Long term debts

Chart:-
Particulars   Years  
  2017 2016 2015
Total Assets 4,850,407,793 5,539,053,967 5,659,642,543
Long Term Debtors 375,971,569 355,690,357 346,441,847
Total Ratio 12.90 15.57 16.34

Graph:-

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Total Assets To Debt Ratio

29%
36% 2017
2016
2015

35%

Interpretation:-
This graph shows total asset to debt ratio of JSW Steel Industries Pvt, ltd. In
2015 the total asset to debt ratio is 36 % and 2016 the total asset to debt ratio is
35% will be decrease with the value of 1 % on previous year. In 2017 the total
asset to debt ratio 29 % will be decrease with the value of 6 % on previous year.

7. INVENTORY TURNOVER RATIO

Formula:-

Cost of revenue from operations

Inventory turnover ratio =
Average inventory

Chart:-
Particulars   Years  
  2017 2016 2015
Cost of Revenue From Operation 5,734,806,718 6,336,048,456 10,944,649,232
Average Inventory 400,497,644 659,223,336 411,433,969
Total Ratio 14.32 9.61 26.6

Graph:-

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Inventory Turnover Ratio

28%
2017
2016
2015
53%

19%

Interpretation:-
This graph shows inventory turnover ratio of JSW Steel Industries Pvt, Ltd. In
2015 the inventory turnover ratio is 53 % and2016 the inventory turnover ratio is
19% will be decrease with the value of 34 % on previous year. In 2017 the
inventory turnover ratio 28 % will be increase with the value of 9% on previous
year.
8. TRADE RECEIVABLES TURNOVER RATIO

Formula:-

Net credit revenue from operations

Trade receivable turnover ratio =
Average trade receivable

Chart:-
Particulars   Years  
  2017 2016 2015
10,384,550,31
Net Credit Revenue From Operations 0 5,838,873,663 5,129,662,813
Average Trade Receivable 411,433,969 659,223,336 400,497,644
Total Ratio 25.24 8.86 12.81

Graph:-

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Trade Receivable Turnover Ratio

27%

2017
2016
2015
54%

19%

Interpretation:-
This graph shows trade receivable turnover ratio of JSW Steel Industries Pvt,
Ltd. In 2015 the trade receivable turnover ratio is 27 % and 2016 the trade
receivable turnover ratio is 19% will be decrease with the value of 28 % on
previous year. In 2017 the trade receivable turnover ratio is 54 % will be increase
with the value of 31 % on previous year.
9. GROSS PROFIT RATIO

Formula:-
Gross profit
Gross Profit Ratio = X 100
Net revenue of operations

Chart:-
Particulars   Years  
  2017 2016 2015
10,944,649,23
Gross Profit 5,734,806,718 6,336,048,456
2
Net Revenue of 10,384,550,31
5,129,662,813 5,838,873,663
Operation 0
Total Ratio 1.12 1.09 1.05

Graph:-

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Gross Profit Ratio

32% 34%
2017
2016
2015

33%

Interpretation:-
This graph shows gross profit ratio of JSW Steel Industries Pvt, Ltd. In 2015 the
gross profit ratio is 32 % and 2016 the gross profit ratio is 34% will be increase
with the value of 1 % on previous year. In 2017 the gross profit ratio 34 % will
be the same value of the previous year.
10. NET PROFIT RATIO
Formula:-

Net Profit
Net Profit Ratio = X 100
Revenue from operations

Chart:-
Particulars   Years  
  2017 2016 2015
Net Profit 2,120,622,400 4,039,899,500 8,005,032,500
10,384,550,31
Net Sales 5,129,662,813 5,838,873,663
0
Total Ratio 0.41 0.69 0.77

Graph:-

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Net Profit Ratio

22%

2017
41%
2016
2015

37%

Interpretation:-
This graph shows net profit ratio of JSW Steel Industries Pvt, ltd. In 2015 the net
profit ratio is 41 % and 2016 the net profit ratio is 37% will be decrease with the
value of 7 % on previous year. In 2017 the net profit ratio 22 % will be decrease
with the value of 15% on previous year.

CHAPTER NO. V
FINDINGS AND SUGGESTIONS

FINDINGS
 Current ratio analysis of JSW Steel Industries Pvt, Ltd. shows recurring
surplus in itself. Since 2015 it increasing continuously.

 Quick ratio provides positive signs since 2015 it is going increasing

continuously.

 Debt equity proportion of JSW Steel Industries Pvt, Ltd. improving year by
year but it is not satisfactory.

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 The proportion of debt to capital employed shows distinct losses after 2015.

 The proprietary ratio also decrease at huge proportion.

 The ratio of total asset to long term debts ratio will be decrease with huge
losses on company financial statements.

 Inventory turnover ratio will be not satisfactory for company position that’s
why company faces various losses.

 Due to sudden increment in stock turnover ratio there it also affected to

debtors turnover ratio. It also improve up to 54%.

 There is not satisfactory signs in gross profit ratio. It reducing by 1% in

2016-17 as compared to in 2015.

 Due to decrement in gross profit it effect net profit of the company but it's no
strongly influence.

SUGGESTIONS
 Current ratio of JSW Steel Industries Pvt, Ltd. its growing good that’s why it
is better for company poisons.

 Quick ratio of possessions is better for JSW Steel Industries Pvt, Ltd.

 Debt equity proportion of JSW Steel Industries Pvt, Ltd. is not satisfactory
but increases in revenue of JSW Steel Industries Pvt, Ltd. can keep the ratio
stable.

 The debt to capital employed ratio of JSW Steel Industries Pvt, Ltd. is faces
huge losses in company position but company can also manage this ratio with
the help of proper asset management techniques

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 The proprietary ratio was not favorable for company position after company
analysis.

 The ratio of total asset to long term debts growing slowly but this situation is
not superior for company growth

 Inventory turnover ratio is not superior for company growth the company
will reduce his non profitable product that time the inventory ratio create
positive signs

 Stock turnover ratio affects to debtors turnover ratio that why this ratio is an
growing position and this situation is better for company growth

 The gross profit ratio proportion of JSW Steel Industries Pvt, Ltd. is not
satisfactory but company analyses all profit margins that time company can
keep the ratio on incremental situation.

 Gross profit ratio affects to net profit ratio that why this ratio is an
unfavorable and this situation is not good for company growth but company
can remove its unprofitable product, reduce inventories and reduce overheads
that time the net profit ratio will be superior for company growth.
CHAPTER NO. VI
CONCLUSION

The purpose our project report at an organization was to help us attain knowledge
about the working pattern in an organization. Appling theoretical knowledge into
practice helps in gaining additional knowledge. We learnt the skill of planning,
organizing and completing the assignment within the stipulated time. Ratio analysis
that company current ratio is better than the quick ratio and fixed / worth ratio. It
means company has invested more in current assets than the fixed assets and liquid
assets.

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The cash flow statement shows that net increase in cash generated from operating
and financing activities is much more than the previous year but cash generated from
investing activities is negative in both years. Therefore analysis of cash flow
statement shows that cash inflow is more than the cash outflow in company. Thus
ratio analysis and trend analysis and analysis of cash flow statement show that
company financial position is good. Company profitability is increasing but not at
high rate. The company liquidity position is fair but not good because company
invests more in current assets than the liquid assets. As we all know that a SR Still
Industry Pvt, Ltd. is on the first position among the entire private sector bank of
India in all areas but it should pay attention on its profitability and liquidity. The
company position is stable.

BIBLIOGRAPHY

 Source internet
 www.wikipedia.ORG
 Reference Books :
i. Financial Accounting
ii. Cost Accounting

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