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Balance Sheet of TATA Steel

The document explains the balance sheet of Tata Steel for the fiscal year 2013-14, detailing its assets, liabilities, and shareholders' equity. It outlines key components such as total assets worth Rs. 1,71,644.45 cr., liabilities including long-term borrowings and current obligations, and shareholders' funds amounting to Rs. 40,531.96 cr. Additionally, it describes various asset categories, including fixed and intangible assets, as well as current assets totaling several components like inventories and cash.

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0% found this document useful (0 votes)
80 views3 pages

Balance Sheet of TATA Steel

The document explains the balance sheet of Tata Steel for the fiscal year 2013-14, detailing its assets, liabilities, and shareholders' equity. It outlines key components such as total assets worth Rs. 1,71,644.45 cr., liabilities including long-term borrowings and current obligations, and shareholders' funds amounting to Rs. 40,531.96 cr. Additionally, it describes various asset categories, including fixed and intangible assets, as well as current assets totaling several components like inventories and cash.

Uploaded by

kalyan kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Balance Sheet

Note to explain balance sheet I have used 2013-14 balance sheet of Tata Steel which can be accessed at
http://www.tatasteel.com/investors/annual-report-2013-14/html/cons-balance-sheet.html

1. Balance Sheet is a financial statement which entails the financial benefits and obligations of the
company as on a particular date.

2. Future benefits which can be measured in terms of money are known as assets. In other words,
if Tata Steel has an asset worth Rs.1,71,644.45 cr. in its balance sheet as on 31st March 2014 it
means Tata Steel expects a monetary benefit of Rs. 1,71,644.45 cr. from the assets.

3. Future obligations/sacrifice which can be measured in terms of money are known as liability.
In other words, if Tata Steel has a liability worth Rs.1,71,644.45 cr. in its balance sheet as on 31st
March 2014 it means Tata Steel is carrying an obligation/sacrifice of worth Rs.1,71,644.45 cr. to
the next period.

Liability and Owners Equity

4. Shareholders fund is the sum of shareholders capital and reserves and surplus. It refers to the
amount of money the owners have invested in business which theoretically needs to be
returned to them at some point of time. Hence, shareholder’s fund is a part of total liabilities. In
the case of Tata Steel for the year 2013-14 the shareholders fund is the sum of Share Capital at
book value (Rs. 971.41 cr.) and reserves and surplus (Rs. 39560.55 cr.) which is Rs. 40531.96 cr.

5. Share Capital can be calculated as a product of number of outstanding shares and Face Value of
the share.

6. “Reserves and surplus” is the sum of opening balance of reserves and surplus (previous year’s
reserve and surplus) and net profit after distributing dividends. Reserves and surplus is the part
of the profit that has been accumulated over the years. The total amount transferred to the
reserves and surplus every year is known as retained earnings. “Retained earnings” for the year
is the difference between net profit and dividends (paid for the year). Retained Earnings can
also be calculated as the difference between the Reserves and Surplus.

7. Preference Shareholders refer to shareholders who get fixed dividends (share of profit
distributed) which are generally higher than the interest rates before tax benefits. In the case of
Tata Steel preference shares are issued by some of the subsidiaries of the company and are
worth Rs. ……20 cr. ………………..

8. Hybrid Securities include financial instruments which possess characteristics of both shares and
debts. Convertible bonds are examples of the same. The company has hybrid perpetual
securities worth Rs. 2275 cr.
9. Minority Interest – refers portion of a subsidiary corporation's stock that is not owned by the
parent corporation. A non-current liability that can be found on a parent company's balance
sheet and represents the proportion of its subsidiaries owned by minority shareholders. In the
case of Tata Steel minority interest is Rs. 1,737.72 cr.

10. Non-current liabilities include long term fund raised by the company from outsiders. They also
include bonds, term loans etc. Long Term Borrowings is recorded at Rs. 52,366 cr. Deferred tax
Liability refers to tax obligations for the future and is recorded at Rs. 2,595.77 cr. Other long
term liability includes creditors for capital supplies, deferred income (receivable income) and
creditors for other liabilities aggregating to Rs. 1,577 cr. Long term provisions amount to Rs.
6154 cr.

11. Long term

12. Current liabilities are obligations which should be settled within the next year. Following are the
current liabilities which the companies generally have in their balance sheet.

 Account s Payable – Amount due in the course of buying raw materials and finished
goods the company trades in. It may also be called Trades payable and creditors. In the
case of Tata Steel it amounted to Rs.22904.37 cr.
 Outstanding Expenses – includes rent, salaries and other general and administrative
expenses which have not been paid.
 Advanced received from Customers (Pre-received income) – included in the balance
sheet at Rs. 310.12 cr. in current liabilities.
 Current portion of long term debt –Portion of the loan due in the next year is shown as
current liabilities as it needs to be paid within one year. The current portion of long
term debt is Rs. 13,092 cr.
 Current maturities of finance lease obligations (capital lease) have amounted to Rs.
123 cr.
 The company has short term provisions (needs to be settled within a year) worth Rs.
3197.14 cr.
 Bank Overdraft – If a company withdraws more than the amount deposited in the bank
the excess withdrawn is known as bank overdraft.
13. Fixed Assets also known as property, plant and equipment include Freehold Premises, Leasehold
Premises, Plant &Machinery, Office Premises and Movable assets. It primarily consists of
tangible assets. The value of fixed assets for the company is Rs. 55249 cr. for the given year.

14. Intangible assets includes long term assets that have tremendous monetary value such as
patents, development cost, software costs, mining costs and development of property. The
value of intangible asset is given as Rs.3908 cr. in the given year. The company shows goodwill
on consolidation as a separate item. It amounts to Rs.15,748.80.
15. The total non current investment amounted to Rs. 2425 cr. Non Current investment includes
long term and strategic investments.

16. The deferred tax asset amounted to Rs. 40.77 cr. This refers to advance tax.

17. Long term loans and advances amounted to Rs.8,781.73. This is the loan and advances the
company has given.

18. Current assets refere to assets which have a benefit of less than one year. The current assets for
the company include

 Current or short term investments Rs. 2668 cr.

 Inventories or stock worth Rs. 26880 cr.

 Trade Receivables Rs. 16085 cr.

 Cash Rs. 8604 cr.

 Short term loans Rs. 3192 cr.

 Other current assets include interest accrued on investment, interest accrued on


deposits worth Rs.637 cr.

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