mousamdas interim-report ifgl

An Interim Report

On

Financial and cash growth of IGFL Refractories Ltd. over the last 4 years(2010-2014) and how the company deals in B2B MARKET

By

MOUSAM DASEnroll. No.: 14BSPHH010394

IFGL REFRACTORIES LIMTED

An Interim ReportOn

Financial and cash growth of IGFL Refractories Ltd. over the last 4 years(2010-2014) and how the company deals in B2B MARKET

By

MOUSAM DASEnroll. No.: 14BSPHH010394

IFGL REFRACTORIES LIMITED

A report submitted in partial fulfilment of the requirements ofMBA Program ofIBS Hyderabad

Submitted toDr. Rajdeep Chakraborty Mr. Kanhaiya PoddarFaculty Guide Company GuideAssistant Professor General Manager (Finance)IBS Hyderabad IFGL Refractories Limited10th April 2015Table of Contents1.ABSTRACT62.INTRODUCTION72.1. Balance sheet72.2. The Income Statement82.3. The Statement of Cash Flows92.4. Financial Ratios92.5. Ratios included in this report103.NEED FOR THE STUDY114.Refractory Industry in India124.1. Industry Overview:-124.2. The Scope of the Industry:-144.3. Business Concerns:-154.4. Challenges for Industry:-154.5 Conclusion:-165. COMPANY PROFILE IFGL REFRACTORIES LIMTED175.1 Growth Story195.2 Products205.2.1. Isostatic Refractories205.2.1.3. Monoblock Stopper: It is used to control the flow of metal stream from tundish to mould during continuous casting of steel.215.2.2 Ladle Slide Gate Refractories and Systems235.2.3. Gas Purging Refrctories and IPV System245.2.4. Products from Monocon255.3 Global Business Presence286. RESEARCH METHODOLOGY296.1. Aims and Objective of the study296.2. METHODOLOGY296.2.1. Sources of secondary data:296.2.2. LIMITATIONS297. LITERATURE RIVIEW307.1. FINANCIAL ANALYSIS307.1.1. RATIO ANALYSIS307.1.2. STEPS IN RATIO ANALYSIS307.1.3. BASIS OR STANDARDS OF COMPARISON317.1.4. NATURE OF RATIO ANALYSIS317.1.5. INTERPRETATION OF THE RATIOS317.1.6. GUIDELINES OR PRECAUTIONS FOR USE OF RATIOS327.1.7. IMPORTANCE OF RATIO ANALYSIS327.1.8. LIMITATIONS OF RATIO ANALYSIS327.1.9. Ratios included in this report337.1.10. Description and significance of the above mentioned Ratios337.2. CASH FLOW STATEMENT ANALYSIS347.2.1. Relationship to Other Financial Statements34While analyzing the cash flow statement, one must analyze the balance sheet and income statement for the coincidingperiod. If the accrual basis of accounting is being utilized, accounts must be examined for their cash components. Analysts must focus on changes in account balances on the balance sheet. General rules for this process are as follows.347.2.4. Cash Flow from Investing347.2.5. Cash Flow from Financing358. RESULTS AND FINDINGS OF RATIO ANALYSIS368.1. Financial Year: 2010-11368.2. Financial Year: 2011-12378.3. Financial Year: 2012-13388.4. Financial Year: 2013-14398.5. Graphical representation of the Financial Ratios to visualize the growth trend408.5.1. Interpretation of the graphs:428.6. Comparative year wise study of the financial ratios over the last 4 years (2010-2014)439. INTERPRETATION OF CASH FLOW STATEMENT ANALYSIS449.1. Financial year 2010-11449.1.2. Cash Flow from Operating Activities449.1.3. Cash Flow from Investing449.1.4. Cash Flow from Financing459.1.5. Bottom Line459.2. Financial year 2011-12469.2.1. Cash Flow from Operating Activities469.2.2. Cash Flow from Investing469.2.3. Cash Flow from Financing479.2.4. Bottom Line479.3. Financial year 2012-13489.3.1. Cash Flow from Operating Activities489.3.2. Cash Flow from Investing489.3.3. Cash Flow from Financing499.3.4. Bottom Line499.4. For the year 2013-14509.4.1. Cash Flow from Operating Activities509.4.2. Cash Flow From Investing509.4.3. Cash Flow from Financing519.4.4. Bottom Line519.5. Conclusion51

1. ABSTRACTThe project is a research based project which deals with the financial and cash growth of IFGL Refractories Limited over the last four years (2010-2014). Financial analysiscan be defined as a process that evaluates businesses, budgets, projects, and entities for analysis purpose. This evaluation is done with the purpose of determining the suitability for investment by a business. Usually, the main purpose of financial analysis is to analyze the stability, solvency, liquidity, and profitability of a business. The financial growth of the company is analyzed solely on the basis of Ratio Analysis which will also gives us a picture of how the investors look into the prospects of a company through ratio analysis before investing in it. In order to get the relevant ratios one has to be thoroughly familiar with the Balance sheet and Income statement in order the extract the relevant information out of them.The Cash growth of the company is done by analyzing the cash flow statement of IFGL Refractories limited. The main factors which are considered in this project with respect to cash is that: from where the majority of the cash are generated and where they are invested. The importance of cash flow statement lies in the fact that it explains the changes in cash and gives insight to the companys operating, investing and financial activities. Also, cash flow statement will unveil the companys ability to generate cash to meet its short-term obligations, thereby assessing if companys liquidity and solvency position is sound.Finally, the report will give us a insight of how IFGL deals in the B2B market. Since, IFGL provides a total solution for refractory for flow control in steel teeming and continuous casting of steel, its major clients are the global steel manufacturing industries. Hence, all its marketing strategies and operations deals in the B2B market and it has been a good opportunity in understanding and familiarizing the B2B market.

2. INTRODUCTIONThe manager of a business organization examines data to evaluate the organizations financial health and performance. The primary source of this type of data is the companys financial statements. Financial statements are the equivalent of box scores or statistics sheets, allowing managers to assess the organizations financial status. The three basic financial statements are the balance sheet, the income statement, and the statement of cash flows. Each of these is examined in this chapter. These financial statements are constructed from the organizations accounting records. Their preparation typically follows generally accepted accounting principles (GAAP), which are a standard set of guidelines and procedures for financial reporting. Individuals who wish to better understand the financial operations of an organization would benefit by obtaining some accounting background.Publicly traded companiesthose whose stock is traded on one of the many stock exchanges that exist in the National Stock Exchange (NSE), Bombay Stock Exchange (BSE) are required to release their financial statements to the public regularly. Private firms are generally not required to disclose financial statements or other related information to the public.2.1. Balance sheetThe balance sheet is a picture or snapshot of the financial condition of an organization at a specific point in time. The balance sheet is unique among the financial statements in that it represents the organizations financial condition on the date on which it is prepared (thus the reference to the snapshot or picture), whereas the other two financial statements reflect the organizations financial performance over a period of time. The balance sheet is organized in three primary sections: assets, liabilities, and owners equity. A companys assets are what it owns; including items such as cash, inventory, and accounts receivable, or the money a company is owed by customers. Liabilities, conversely, are the organizations financial obligations or debts owed to others. Owners equity, which is also referred to as shareholders equity or stockholders equity, is an estimated measure of the ownership value of the company. On the balance sheet, owners equity is equal to the companys assets minus its liabilities. Stated differently, the balance sheet is always truly in balance, as the assetsthe first half of the statementmust equal the total of the liabilities and owners equitythe second half of the balance sheet. This balance is assured through the use under GAAP of double-entry bookkeeping, where each transaction made by an organization is entered or recorded twice, once on the debit side of the accounting records and once on the credit side. The result of this accounting system is a balanced sheet, where the sum of the organizations assets is equal to the combined sum of its liabilities and owners equity. Assets on a balance sheet are listed in order of liquidity, or how quickly the asset can be converted into cash, with the most liquid assets listed first. Hence, cash will almost always be the first asset listed, at the top of the balance sheet. Further, assets are typically divided into the categories of current assets and long- term assets. Current assets are those that are likely to be converted into cash within one years time. Liabilities are similarly listed according to their maturity, or when the liability or debt is due to be paid by the organization. Liabilities with the earliest maturity dates are listed first. Liabilities due within one year are labelled current liabilities, and those due after one year are labelled long-term liabilities. Common examples of current liabilities include employee salaries and accounts payable, or purchases from suppliers on credit, whereas long-term liabilities include mortgage loans for facility construction or renovation and employee pension obligations. Owners equity, or assets minus liabilities, represents an estimate of the value or ownership stake of the company. First, asset and liability figures represent the items value at the time of purchase, not necessarily their present value. Land bought decades ago would be listed as an asset on the balance sheet at the cost that was paid for the land at that time, even if that land has increased in value many times since then. Second, the assets listed on the balance sheet do not include intangible assets such as branding, management expertise, or product positioning. Third, the balance sheet does not include contingent liabilities, debts that may or may not occur, such as the result of ongoing litigation against the company. Contingent liabilities are frequently disclosed in a notes or footnotes section associated with the balance sheet and other financial statements.2.2. The Income StatementThe income statement, also referred to as the statement of earnings or the profit and loss statement, shows the organizations income over a specified period of time and is typically issued on an annual or quarterly basis. For the specified time period, the income statement lists the organizations revenues, or income generated from business activities, such as the sale of goods or services, and the organizations expenses, or funds flowing out of the organization as costs of doing business. When expenses are subtracted from revenues, the resulting figure is the organizations net income (or net loss, if expenses were greater than revenues over the period of time). Net income is frequently referred to as profits or earnings.An organizations books may be kept on a cash basis or an accrual basis, and it is important to note the differences between these two methods and the resulting impact on the income statement. Cash basis accounting recognizes transactions when money is either received or paid out. Accrual basis accounting, on the other hand, accounts for income when it is earned and expenses when they are incurred, rather than when the money is exchanged. Some sole proprietorship and other businesses utilize cash basis accounting, but most corporations and partnerships are required by GAAP to follow accrual basis accounting. The limitation of cash basis accounting, as it pertains to the income statement, is that sales made during a particular time period cannot be recognized on the income statement if payment has not yet been received, even if payment is forthcoming. Under accrual basis accounting, the lag time between when a transaction is made and when payment is exchanged is acknowledged through another financial statement, the statement of cash flows.When firms account for depreciation (the reduction in value of an asset due to age or use), a number of options are available, and the approach chosen can greatly influence expenses, and thus net income or loss, on the income statement. A related issue is taxation. Accounting decisionsparticularly in regard to depreciation and inventoryare frequently made in an effort to minimize taxes. This can result in financial statements, especially income statements that lack objectivity. Another issue is how the company accounts for expenditures in the areas of research and development (R&D) and advertising. These two areas represent investments in the future revenues of the company, yet they are typically accounted as expenditures when spent rather than in the future, when their benefits are reaped. If a company makes cuts in these areas in difficult times, the result may be an increased net income (or decreased net loss) in the short term. Such action could, however, be harmful to the long-term future of the company.2.3. The Statement of Cash FlowsFor any company to be successful in the long term, it must generate more cash than it spends, known as a positive cash flow. Negative cash flows may be sustainable in the short term, but few companies can survive long periods of spending more than they generate. The income statement and balance sheet, however, do not provide insight into this simple fact.The income statement provides information about the revenues and expenses flowing into and out from an organization, the statement of cash flows tracks cash in and cash out. The ability to track cash coming into and going out of the business is of particular importance to an organization that uses accrual basis accounting. The cash flows statement provides data as to whether the company has sufficient cash on hand to meet its debts and obligations, which is not provided by the balance sheet or the income statement of firms utilizing accrual basis accounting. In addition to revealing differences between accrual basis accounting and cash transactions, the statement of cash flows is free from the influence of noncash expenses, such as depreciationunlike the income statement. On the income statement, the depreciation of an asset such as a stadium or an office building is listed as an expense, yet depreciation does not reflect any true monetary expenditure. The statement of cash flows provides a simpler examination of cash generated and spent.The balance sheet states the status of the companys assets, liabilities, and equity at a single point in time, without showing trends over time, the statement of cash flows examines cash transactions over a period of time and so can provide additional context for the information in a balance sheet. Cash flow statements are typically organized in three sections: operations, investing, and financing. Operations refer to the organizations cash flows from normal business operations, such as cash flowing in from the sale of products or services, or cash flowing out to pay employees salaries. Investing activities include the buying and selling of fixed assets, such as the purchase of property. Financing refers to the companys debt and equity financing, such as the sale of stock or repayment of a loan.2.4. Financial RatiosFinancial ratios are relationships determined from a company's financial information and used for comparison purposes. These ratios are the result of dividing one account balance or financial measurement with another. Usually these measurements or account balances are found on one of the company's financial statementsbalance sheet, income statement, cashflow statement, and/or statement of changes in owner's equity. Financial ratios can provide small business owners and managers with a valuable tool with which to measure their progress against predetermined internal goals, a certain competitor, or the overall industry. In addition, tracking various ratios over time is a powerful means of identifying trends in their early stages. Ratios are also used by bankers, investors, and business analysts to assess a company's financial status.Ratios are calculated by dividing one number by another, total sales divided by number of employees, for example. Ratios enable business owners to examine the relationships between items and measure that relationship. They are simple to calculate, easy to use, and provide business owners with insight into what is happening within their business, insights that are not always apparent upon review of the financial statements alone. Ratios are aids to judgment and cannot take the place of experience. But experience with reading ratios and tracking them over time will make any manager a better manager. Ratios can help to pinpoint areas that need attention before the looming problem within the area is easily visible.Virtually any financial statistics can be compared using a ratio. In reality, however, small business owners and managers only need to be concerned with a small set of ratios in order to identify where improvements are needed.It is important to keep in mind that financial ratios are time sensitive; they can only present a picture of the business at the time that the underlying figures were prepared. For example, a retailer calculating ratios before and after the Christmas season would get very different results. In addition, ratios can be misleading when taken singly, though they can be quite valuable when a small business tracks them over time or uses them as a basis for comparison against company goals or industry standards.The best way for small business owners to use financial ratios is to conduct a formal ratio analysis on a regular basis. The raw data used to compute the ratios should be recorded on a special form monthly. Then the relevant ratios should be computed, reviewed, and saved for future comparisons. Determining which ratios to compute depends on the type of business, the age of the business, the point in the business cycle, and any specific information sought. For example, if a small business depends on a large number of fixed assets, ratios that measure how efficiently these assets are being used may be the most significant.2.5. Ratios included in this report1. Liquidity Ratiosa. Current ratiob. Quick ratio2. Asset Management Ratiosa. Total asset turnover ratiob. Inventory turnover ratio3. Leverage Ratiosa. Debt ratiob. Interest Coverage ratio4. Profitability Ratiosa. Net profit marginb. Return on equity

3. NEED FOR THE STUDY1. The study has great significance and provides benefits to various parties whom directly orindirectly interact with the company.

2. It is beneficial to management of the company by providing crystal clear picture regarding important aspects like liquidity, leverage,activity andprofitability.

3. The study is also beneficial to employees and offers motivation by showing how actively they are contributing for companys growth.

4. The investors who are interested in investing in the companys shares will also getbenefited by going through the study and can easily take a decision whether to invest ornot to invest in the companys shares.

4. Refractory Industry in India"Refractory" items according to any Standard English dictionary are materials which are hard to work with, and are especially resistant to heat and pressure. In practical terms, refractories are products used for high temperature insulation and erosion/corrosion and are made mainly from non-metallic minerals. They are so processed that they become resistant to the corrosive and erosive action of hot gases, liquids and solids at high temperatures, in various types of kilns and furnaces.

Some typical specifications of Indian refractories commonly used in the furnaces and kilns in steel, cement, non-ferrous metals and glass industries are given below:- High Alumina Silica Basic Castables/Monolithics Special Products Insulating Bricks4.1. Industry Overview:-Refractory is a term given to a class of materials which are produced from nonmetallic minerals and possess capability to withstand heat and pressure. These are products that confer properties like high temperature to corrosive and erosive action of hot gases, liquids and solids at high temperatures in various kilns and furnaces. The fortunes of the Refractory industry are very much dependant on steel industry as almost 75% of the refractories produced is consumed in steel industry. Steel consumption in India is expected to grow significantly in coming years as per capita finished steel consumption is far less than its regional counterparts. The growth in construction, infrastructure, automobile and power sector will continue to create significant demand for steel sector, which in turn will create demand for refractories.

The Indian refractory industry started its journey with first line of production in Kolkata in 1874. Today, the industry comprises over 100 established units, with 11 large plants, 24 medium-scale units and the rest in the small-scale sector. However, while the refractory industry in India took off in the late 19th century, the real growth came in the late 1950s when the public sector steel plants were set up and Tata Steel embarked upon its expansion plans. Currently, the Indian refractory industry has an aggregate production capacity of 20 lakh tonnes per annum. The capacity utilization, however, currently stands at around 60 percent or 11.5-12 lakh tones per annum. About 75 per cent of the refractories that are manufactured find application in the steel industry, 12 percent in the cement industry, 5-6 per cent in non-ferrous industries, three per cent in the glass industry and the balance in other industries.

Refractories are used either where high temperature or high rate of abrasion/corrosion/erosion is involved. Traditionally, refractories are made of naturally-occurring minerals, such as bauxite, kyanite, magnesite, fireclay, chrome ore, etc. Lately, however, the industry has been using man-made raw materials, such as brown-fused alumina, tabular alumina, fused magnesia, silicon carbide, magnesia alumina, etc. Refractory plays a dynamic role not only for metallurgical but also for Shaping up chemical and petrochemical, glass, ceramic, cement and limestone industries. Major research work has so far been concentrated for the development of new refractory and also for its reduction in consumption for steel industries. Indian refractory industry, meanwhile, is required to upgrade their operations with global technologies which need huge investment. 4.2. The Scope of the Industry:-The size of the Indian refractory industry has been pegged at Rs 2,300 crore and it is stated to be growing at 8-10 per cent per annum. Although the specific consumption of refractories has gone down from 30 kg per tonne of steel about 20 years ago to 12-13 kg on an average for the steel industry as a whole and as low as 7-8 kg in the case of some more efficient steel units, the scope for growth is good in view of the continuing growth in the Indian economy and the government's focus on infrastructure development. Despite downturn in steel sector, the domestic refractory industry that supplies raw materials to steel plants and industries, posted 21 percent growth in turnover at Rs 4,480 crore in 2009-10 against Rs 3,640 crore in 2008-09, when the growth was 16 percent over 2007-08. The capacity utilization of the industry was 65 percent.

4.3. Business Concerns:- Industry dependent on raw material imports from China. Use of synthetic raw materials is driving prices higher In the event of continued high prices for crude oil and other petroleum products, hardening of the coal prices the prices of the inputs of the refractory industry are increasing Raw material prices have moved up 80 to 85% but prices of finished products have just appreciated 18-30% resulting in erosion of the bottom lines of the refractories companies. Affected by the slow down in the economy In Industries like steel trend towards lower refractories consumption per tone of steel. Usage of new technology processes leads to reduction in refractories consumption The industry is going through an exciting and complex phase. On one hand, refractory makers are adding capacities with the hope that demand from the steel sector will rise at a fast pace. On the other hand, none of the major announced Greenfield steel projects are yet to get off the ground.4.4. Challenges for Industry:-The Refractory Industry must upgrade itself to take benefit of increased business from the steel industry stated R K Vijayvergia, Executive Director-Operations, SAIL, at a recently held conference. In his special address, Vijayvergia said, Steel industry forms the major end use segment for refractories consuming around 70 percent of its total annual production. The Refractory Industry has to keep pace with steel industry with regard to quality and quantity demands. Meanwhile, with the changed business scenario more and more customers are looking forward to total refractory management which encompasses creation of value added service, responsive supply chain network and understanding of customers' requirement. The major Indian refractory manufactures need to gear up to cater the need of steel industry.

World leaders in refractories like RHI from Austria, Vesuvius from Belgium, French giant Calderys, Pohang from South Korea etc have also made their presence in India, which is a good sign for the industry. Recently SAIL has taken over Bharat Refractories Ltd which is now named as SAILRefractorry Unit (SRU). SAIL is in the process of augmenting and upgrading the facilities at SRU for higher production to meet the quality requirement of SAIL. Refractory producers in India have to rise to the occasion by providing ready, regular, speedy and consistent supplies, Irani said. It would also be important for Indian refractory manufacturers to focus on their raw materials security. Industry insiders do acknowledge that raw materials security is a concern especially with China imposing quantitative restrictions on export of raw materials and also jacking up prices over the last year or so. Cheaper refractory imports from China are also putting a pressure on the industry's margins. Hiring and retaining skilled manpower is a major challenge that the Indian refractory industry has to cope with.4.5 Conclusion:- Refractory business is a capital intensive industry which requires heavy investment in technology and basic raw materials. The business is heavily dependent on steel industry (nearly 75%) and on the contrary steel industry is upgrading technology to reduce its dependence on refractories products. The other industries where refractories can cater to are cement, sponge iron, chemical, petrochemical, glass , ceramic and limestone industries. The slowdown in the Indian economy has affected the steel industry resulting in lower top lines in refractory industry. Also, the increase in cost of raw materials, coals, petrol prices, etc. has affected the bottom lines. This is a highly specialized industry and depending upon the production capacities, plant location, technology implemented a competitive advantage can be structured and better performance can be expected in future. 5. COMPANY PROFILE IFGL REFRACTORIES LIMTEDIFGL Refractories Ltd. is a manufacturer of Specialised Refractories and requisite Operating Systems for Iron and Steel Industry. It has a large pool of trained engineers and application specialists to offer customers Total Solution for Refractory for flow control in Steel Teeming and Continuous Casting of Steel.The Slide Gate Refractories Plant was started in the year 1984. Indo Flogates was a joint venture with Flogates Ltd, UK and an exclusive Indian Licensee of Flocon Slide Gate Systems, developed by US Steel Corporation through their wholly-owned subsidiary USS Engineers and Consultants Inc. This plant now manufacturers Slide Gate Systems and Refractories with the latest know-how from Krosaki Harima Corporation, Japan, a subsidiary of Nippon Steel Corporation.The Continuous Casting Refractories Plant set up in technical collaboration with Krosaki Harima Corporation, Japan (then known as Harima Ceramics Corporation) started production in 1993 manufacturing Isostatically Pressed Continuous Casting Refractories and Magnesia Carbon Tap Hole Sleeves.IFGL operates the Quality Management System which complies with the requirements of BS EN ISO 9001:2008 and ISO 14001:2004.IFGL acquired Monocon Group in September, 2005, with production facilities for Tundish Spraying Mass Refractory Darts Monolithic Lances Robotics for EAF, Ladle and Tundish lining maintenance. Monolithics for EAF, Ladle and TundishIn December, 2006, Monocon Group acquired Goricon Metallurgical Services Ltd, Wales (UK) and Goricon LLC, Ohio (USA) engaged in manufacture of Darts, Lances, Ladle Powders etc used by the Steel Industry.In July, 2008 Hoffman Group was acquired with manufacturing facilities for Foundry Ceramics Casting Filters, Feeders, SiC Chill Plates, Pouring System and Monoblock Stopper High Grade fire proof refractory shapes Drawing tools and Tread GuidesIn September, 2010 IFGL acquired EI Ceramics LLC and CUSC International Limited (CUSC), both Cincinnati, Ohio based companies engaged in manufacture of Isostatically Pressed Continuous Casting Refractories.IFGLs subsidiary is IFGL Exports Limited - also engaged in manufacture of Continuous Casting Refractories at new area of Kandla Special Economic Zone, in the state of Gujarat (India).IFGL now have manufacturing facilities in China, Germany, India, UK and USA.IFGL, an Indian Multinational Company from S K Bajoria Group, is listed both on BSE and NSE in India.5.1 Growth Story

5.2 ProductsIFGL is considered as one of the most reliable suppliers of refractories for the global steel industry, with exports to more to more than 50 countries in Europe, Middle East, Africa, South East Asia, Australasia, North and South Americas. Product Range Isostatic Refractories Slide Gate Mechanisms and Refractories Purging Plug Mechanisms and Refractories Tundish Nozzles Monolithics Precast Refractories Slag Control Systems Tube Changer Mechanism (TCM) Nozzle Changer Mechanism (NCM) Robotic Gunning for EAF and Ladle Tundish Lining Refractories Refractory Lances5.2.1. Isostatic Refractories5.2.1.1. Ladle Shroud: Ladle shroud is used to control the flow of liquid steel from Ladle to Tundish and offers protection to steel stream from reoxidation and minimises steel splashes. It has excellent thermal shock resistance to withstand the temperature shock at the start of the cast.Ladle Shrouds are made in Alumina Graphite (Al2O3-C) quality and are isostatically pressed.Options Reverse taper for submerged opening Metal can reinforcement Argon Gas purging (Porous insert or direct injection type) Ceramic fiber wrapping on outer surface Reinforcement in slag zone Re-usable type5.2.1.2. Sub Entry Nozzle/Sub Entry Shroud: It is used to control the flow of liquid steel from Tundish to Mould. It prevents re-oxidation of steel between the tundish and the mould.It is manufactured in Alumina Graphite (Al2O3-C) quality and it is isostatically pressed. Special protective coating is applied to provide resistance to decarburisation.

Options Special reinforcement with Zirconia-Graphite (ZrO2-C) at slag line for excellent slag resistance. Seating area reinforcement with high Alumina or Magnesia base material. Special design to prevent Alumina-clogging. Ceramic fibre wrapping on outer surface. Gas purging facilities. Special insulating coating.

5.2.1.3. Monoblock Stopper: It is used to control the flow of metal stream from tundish to mould during continuous casting of steel.They are made in Alumina Graphite (Al2O3-C) quality and it is isostatically pressed. Special coating is applied on the surface to provide oxidation resistance and minimum decarburisation.Options Monoblock Stopper for steel foundry applications. Cross pin or screw fastening system. Argon gas purging. Special reinforcement in tip either with high Alumina, Magnesia or Spinel materials.

5.2.1.4 Tundish Nozzle: In combination with Monoblock Stopper, Tundish Nozzle controls the flow and protects steel stream before it exists the tundish.IFGL supplies tundish nozzles for tube changer mechanisms and non-tube changer applications with or without argon purging facility.

5.2.1.5. Tundish Metering Nozzle: IFGL offers a comprehensive range of Zirconia (95% ZrO2) and Zircon (60-75% ZrO2) tundish metering nozzles, including quick change nozzles.

5.2.1.6. Isostatically Pressed Magnesia Carbon Taphole Sleeve: IFGL manufactures taphole sleeves for BOF, EAF, and EBT furnaces as a single piece and pressed in a high capacity isostatic press with mix of Fused Magnesia and Graphite.

Benefits Single piece is easy to install and maintain. Improved performance due to elimination of joints. Uniformly dense body due to isostatic pressing. Superior erosion and corrosion resistance. Enhances converter availability by reducing intermittent repairs.5.2.2 Ladle Slide Gate Refractories and SystemsIFGL is a reputed manufacturer of ladle slide gate refractories and mechanisms for the following standard international systems; IFGL FF and YPL systems. FLocon Systems. Interstop LS Systems. Interstop QC and BK Systems.Apart from the above, IFGL also produces slide gate refractories for non-standard systems which are unique to the customers.5.2.2.1. FF-Series Ladle Slide Gate System: The FF series ladle slide gate is a two plate linear, hydraulically driven gate. The gate valves are designed for small, medium and large capacity ladles. The characteristic features of the FF ladle slide gate are as follows: Safety and reliability. Simplicity and robustness. Higher stroke length. Automatic face pressure loading. Outboard spring design. Optical configuration. Plate crack control. Higher face pressure. Lower nitrogen pick-up. Increased plate life.

5.2.2.2. Flocon Slide Gate Systems: IFGL was the original licensee of Flogates (UK) in India, and have completed more than 200 Ladle installations with Flocon Systems in India & abroad. IGFL offers complete package for Flocon Slide Gate Systems, which include design, manufacture, installation and commissioning of equipment, hydraulics and slide gate refractories for ladles.

5.2.3. Gas Purging Refrctories and IPV SystemIFGL is a leading manufacturer of ladle purging refractories and systems, which include Purge Plugs, Seating Block and Inner nozzle (for IPV System).

5.2.3.1. Slot Plug Flexible design with different number of slots Accurately Formed channels separate print Slot/channels configuration to suit the customer gas flow requirements. Good gas flow control5.2.3.2. Segmented Plug Better plug life High Purging rate Easily adjustable gas flow Improved wear rate Better availability of gas channels Regular bubble pattern5.2.3.3. RCA Plug Excellent resistance to erosion/corrosion Channelled tube not wetted by slag Smooth slot/channel wall prevents metal fins Improved gas flow control High Performance5.2.3.4. IPV System: IFGL had technical tie up with Flogates LTD, UK for IPV systems (ISID Purgemeister Valve) since 1980 and have long experience in design, supply, installation, commissioning and operation of IPV mechanisms with different international customers.Benefits SAFETY: Virtually zero breakout rate LONGEIVITY: Long life minimizes need for mid-campaign ladle bottom repair. FLEXIBILITY: Different gas flow rates are possible. RELIABILITY: Performance is repeatable. No starting failures. No scheduling delay.

5.2.4. Products from Monocon5.2.4.1. Slag Dart Technology: Darts float at the metal-slag interface in the BOF and are designed to block the taphole and restrict the amount of slag exiting the vessel. Effective operation is reliant upon the design characteristic of the slag dart and the accurate calibration of the slag control dart machine.Dart head and tail are designed to withstand temperature, erosion and thermal shock.Design Parameters Designed shape to suit taphole diameter. Density to suit preferred run out time and furnace conditions. Tail length and diameter to suit taphole and bath depths.

5.2.4.2. Automatic Dart Loading Machine

5.2.4.3. Pre Tap Plug: The objective of the pre tap plug is to temporarily block the taphole during the turn down and reopen the taphole when steel is presented to the taphole orifice.Thermal Imaging: The Monocon Thermal Image System allows optimization of slag control with the integration of thermal imaging camera into the slag control package.

5.2.4.4. Slag Control Systems: MONOCON has more than 3 decades of experience in BOF Slag Control Systems & Refractories, with 73 machines in operation at 33 steel plants across the globe.Benefits Reduce Slag Carry Over. Reduce Phosphorous Reversion. Reduce Aluminium Consumption. Increase Alloy Yield. Improve Refractory performance. Potential for yield improvements.Key Elements Slag control dart machine. Vessel Angle Indicator. Infra-red imaging camera and applicators. BOF Taphole repair maintenance. Pre-Tapping Plugs. Infrared Slag Control Camera.Bespoke Slag Control Machine Designs Roof Mounted. Pantograph Roof Mounted. Floor Mounted Side Swipe. Rail Mounted. Floor Mounted Turret & Telescopic.

5.2.4.5. Tube Changer Mechanism (TCM): In 2006, IFGL-MONOCON signed an exclusive manufacturing and marketing license with Alcar International Ltd for new generation of Tundish Tube Changer Mechanisms for slab casters and high performance Argon Injection Tundish Nozzles. Since then IFGL have jointly worked on several successful tube changer projects around the globe.Benefits No patent restrictions on machines or refractories. Pneumatic or hydraulic powered. Easy to install. Ease of maintenance. Robust proven design.

5.2.4.6. Nozzle Changer Mechanism (NCM): This device is used to control and shut off the flow of the metal to each strand for billet and beam blank casters. The system provides continuous casting technique with additional operational control and flexibility.Benefits Extend tundish sequences. Alternate metering nozzle diameter to facilitate casting speed changes as required. Emergency shut off at the push of a button. Hydraulic power for smooth and rapid response.

5.3 Global Business Presence

6. RESEARCH METHODOLOGY6.1. Aims and Objective of the study Gain an in-depth knowledge about various corporate valuation techniques. Standardize financial information for comparisons Evaluate current operations Study the efficiency of operations To know the future prospect of business. To determine if there has been an improvement or deterioration or no change over time. To get an overview on Company producing a products. To know how ratio analysis helps an analyst to make an informed business or investment decision. Study the risk of operations

6.2. METHODOLOGYThe information is collected through secondary sources during the project. That information was utilized for calculating performance evaluation and based on that, interpretations were made.

6.2.1. Sources of secondary data: Most of the calculations are made on the financial statements of the company provided statements. Referring standard texts and referred books collected some of the information regarding theoretical aspects. Method- to assess the performance of the company method of observation of the work in finance department in followed.

6.2.2. LIMITATIONS The study provides an insight into the financial, personnel, marketing and other aspects of IFGL Refractories Ltd. Every study will be bound with certain limitations. The below mentioned are the constraints under which the study is carried out. One of the factors of the study was lack of availability of ample information. Most of the information has been kept confidential and as such as not assed as art of policy of company. Time is an important limitation. The whole study was conducted in a period of 8 weeks (as of now, since it is an Interim Report), which is not sufficient to carry out proper interpretation and analysis.

7. LITERATURE RIVIEW7.1. FINANCIAL ANALYSISFinancial analysis is the process of identifying the financial strengths and weaknesses of the firm and establishing relationship between the items of the balance sheet and profit & loss account. Financial ratio analysis is the calculation and comparison of ratios, which are derived from the information in a companys financial statements. The level and historical trends of these ratios can be used to make inferences about a companys financial condition, its operations and attractiveness as an investment. The information in the statements is used by Trade creditors, to identify the firms ability to meet their claims i.e. liquidity position of the company. Investors, to know about the present and future profitability of the company and its financial structure. Management, in every aspect of the financial analysis. It is the responsibility of the management to maintain sound financial condition in the company.

7.1.1. RATIO ANALYSISThe term Ratio refers to the numerical and quantitative relationship between two items or variables. This relationship can be exposed as: Percentages Fractions Proportion of numbersRatio analysis is defined as the systematic use of the ratio to interpret the financial statements. So that the strengths and weaknesses of a firm, as well as its historical performance and current financial condition can be determined. Ratio reflects a quantitative relationship helps to form a quantitative judgment.

7.1.2. STEPS IN RATIO ANALYSIS The first task of the financial analysis is to select the information relevant to the decision under consideration from the statements and calculates appropriate ratios. To compare the calculated ratios with the ratios of the same firm relating to the pas6t or with the industry ratios. It facilitates in assessing success or failure of the firm. Third step is to interpretation, drawing of inferences and report writing conclusions are drawn after comparison in the shape of report or recommended courses of action.

7.1.3. BASIS OR STANDARDS OF COMPARISON Ratios are relative figures reflecting the relation between variables. They enable analyst to draw conclusions regarding financial operations. They use of ratios as a tool of financial analysis involves the comparison with related facts. This is the basis of ratio analysis. The basis of ratio analysis is of four types. Past ratios, calculated from past financial statements of the firm. Competitors ratio, of the some most progressive and successful competitor firm at the same point of time. Industry ratio, the industry ratios to which the firm belongs to Projected ratios, ratios of the future developed from the projected or pro forma financial statementsIn the report I have used comparative study of the past ratios, calculated form past financial statements of the firm. 7.1.4. NATURE OF RATIO ANALYSIS Ratio analysis is a technique of analysis and interpretation of financial statements. It is the process of establishing and interpreting various ratios for helping in making certain decisions. It is only a means of understanding of financial strengths and weaknesses of a firm. There are a number of ratios which can be calculated from the information given in the financial statements, but the analyst has to select the appropriate data and calculate only a few appropriate ratios. The following are the four steps involved in the ratio analysis. Selection of relevant data from the financial statements depending upon the objective of the analysis. Calculation of appropriate ratios from the above data. Comparison of the calculated ratios with the ratios of the same firm in the past, or the ratios developed from projected financial statements or the ratios of some other firms or the comparison with ratios of the industry to which the firm belongs. 7.1.5. INTERPRETATION OF THE RATIOS The interpretation of ratios is an important factor. The inherent limitations of ratio analysis should be kept in mind while interpreting them. The impact of factors such as price level changes, change in accounting policies, window dressing etc., should also be kept in mind when attempting to interpret ratios. The interpretation of ratios can be made in the following ways. Single absolute ratio Group of ratios Historical comparison Projected ratios Inter-firm comparison7.1.6. GUIDELINES OR PRECAUTIONS FOR USE OF RATIOSThe calculation of ratios may not be a difficult task but their use is not easy. Following guidelines or factors may be kept in mind while interpreting various ratios are Accuracy of financial statements Objective or purpose of analysis Selection of ratios Use of standards Caliber of the analysis7.1.7. IMPORTANCE OF RATIO ANALYSIS Aid to measure general efficiency Aid to measure financial solvency Aid in forecasting and planning Facilitate decision making Aid in corrective action Aid in intra-firm comparison Act as a good communication Evaluation of efficiency7.1.8. LIMITATIONS OF RATIO ANALYSIS Differences in definitions Limitations of accounting records Lack of proper standards No allowances for price level changes Changes in accounting procedures Quantitative factors are ignored Limited use of single ratio Background is over looked Limited use Personal bias

In this project on the basis of the following Ratios I have tried my level best to analyze the current financial growth of IFGL REFRACTORIES LIMITED over the last four years (2010-2014):7.1.9. Ratios included in this report1. Liquidity Ratiosa. Current ratiob. Quick ratio2. Asset Management Ratiosa. Total asset turnover ratiob. Inventory turnover ratio3. Leverage Ratiosa. Debt ratiob. Interest Coverage ratio4. Profitability Ratiosa. Net profit marginb. Return on equity

7.1.10. Description and significance of the above mentioned RatiosLiquidity Ratios

Current RatioThe organizations ability to meet its current liabilities (those due within a year) with its current assets.

Quick RatioThe organizations ability to meet its current liabilities with current assets other than inventory.

Asset Management Ratios

Total Asset turnover RatioHow efficiently the organization is utilizing its assets to make money.

Inventory turnover RatioHow often the organization sells and replaces its inventory over a specified period of time.

Leverage Ratios

Debt RatioHow the organization finances its operation with debt and equity.

Interest coverage RatioThe organizations ability to pay the interest on its debt owned.

Profitability Ratios

Net Profit MarginThe percentage of the organizations total sales or revenue that was net profit or income.

Return on equityThe return rate that the organizations owners or shareholders are receiving on their investment.

7.2. CASH FLOW STATEMENT ANALYSISA company's statement of cash flows creates a bridge -- or reconciliation -- between a company's cash balances from one accounting period to another. The statement of cash flows is important to investors because it provides insight into how a company generates and expends cash, and ultimately, its ability to return value to shareholders.The cash flow is widely believed to be the most important of the three financial statements because it is useful in determining whether a company will be able to pay its bills and make the necessaryinvestments. A company may look really great based on the balance sheet andincome statement, but if it doesn't have enough cash to pay its suppliers,creditors, and employees, it will go out of business. A positive cash flow means that more cash is coming into the company than going out, and a negative cash flow means the opposite.

7.2.1. Relationship to Other Financial StatementsWhile analyzing the cash flow statement, one must analyze the balance sheet and income statement for the coincidingperiod. If the accrual basis of accounting is being utilized, accounts must be examined for their cash components. Analysts must focus on changes in account balances on the balance sheet. General rules for this process are as follows. Transactions that result in an increase inassetswill always result in a decrease in cash flow. Transactions that result in a decrease inassetswill always result in an increase in cash flow. Transactions that result in an increase inliabilitieswill alwaysresult in an increase in cash flow. Transactions that result in a decrease inliabilitieswill alwaysresult in a decrease in cash flow.Cash flow statements have three distinct sections, each of which relates to a particular component - operations, investing and financing - of a company's business activities.

7.2.3. Cash Flow from OperationsThis is the key source of a company's cash generation. It is the cash that the company produces internally as opposed to funds coming from outside investing and financing activities. In this section of the cash flow statement, net income (income statement) is adjusted for non-cash charges and the increases and decreases to working capital items - operating assets and liabilities in the balance sheet's current position.

7.2.4. Cash Flow from InvestingFor the most part, investing transactions generate cash outflows, such as capital expenditures forplant, property and equipment, business acquisitions and the purchase of investment securities. Inflows come from the sale of assets, businesses and investment securities. For investors, the most important item in this category is capital expenditures (more on this later). It's generally assumed that this use of cash is a prime necessity for ensuring the proper maintenance of, and additions to, a company's physical assets to support its efficient operation and competitiveness.

7.2.5. Cash Flow from FinancingDebt and equity transactions dominate this category. Companies continuously borrow and repay debt. The issuance of stock is much less frequent. Here again, for investors, particularly income investors, the most important item is cash dividends paid. It's cash, not profits, that is used to pay dividends to shareholders.In this report, cash flow statement analysis has been done over a period of four financial years describing the major elements of cash flow with their description and analysis and interpretation which will give us an idea about the major cash generating activities of the company (IFGL Refractories Limited) and how it is investing and financing its cash.

8. RESULTS AND FINDINGS OF RATIO ANALYSIS8.1. Financial Year: 2010-11Important Parameters for Ratio analysisRupees in LakhsData taken from

Current asset11149.13Balance sheet

Current Liability3652.89Balance sheet

Inventories3508.13Balance sheet

Total Sales22268.09Income statement

Average total assets14071.32Balance sheet

COGS19787.12Income statement

Average Inventory3066.29Balance sheet

Total assets15584.02Balance sheet

Total Liabilities9851.74Balance sheet

EBIT1096.98Income statement

Interest expense395.04Income statement

Net income/PAT737.18Income statement

Shareholder's equity11624.96Balance sheet

Assets20112010

Fixed Assets4434.893622.9

Current assets11149.138935.72

Total assets15584.0212558.62

Inventories

Inventory3508.132624.45

Liabilities

Secured Loans58513712.66

Deferred Tax Liabilities347.85328.05

Net current liabilities3652.894040.71

Total liabilities9851.748081.42

Ratio Analysis Dashboard

Liquidity ratiosProfitability ratios(in Percentage)

Current ratio3.052139539Net profit margin ratio3.31047701

Quick ratio2.091768435Return on equity6.34135515

Asset Management ratios

Total asset turnover ratio1.582516068

Inventory Turnover ratio6.45311435

Leverage ratios

Debt ratio0.632169363

Interest coverage ratio2.776883354

8.2. Financial Year: 2011-12Important Parameters for Ratio analysisRupees in LakhsData taken from














Assets20122011



Total assets16273.415570.35

Inventories

Inventory3978.213508.13

Liabilities

Non Current liabilities1128.361365.51

Current liabilities8955.478486.23









Leverage ratios

















Assets20132012



Total assets17347.4516273.4

Inventories

Inventory3870.543978.21

Liabilities











Leverage ratios

















Assets20142013



Total assets18176.9517347.45

Inventories

Inventory4025.763870.54

Liabilities











Leverage ratios



8.5. Graphical representation of the Financial Ratios to visualize the growth trend

8.5.1. Interpretation of the graphs:Almost every ratio graph shows a positive upward slope except for few (debt ratio, current ratio and quick ratio) which indicates that the financial growth of IFGL Refractories Limited has been increasing gradually over the years sustainably. Some graphs mentioned above which have a downward negative slope can be explained as follows:Debt ratio: It explains how the organization finances its operation with debt and equity, a decreasing downward slope is favourable for the health of the company since it signifies that the company is able to finance its operation with its own retained earnings and does not have to depend on debt/equity finance. Hence, IFGL Refractories Limited is gradually minimizing the dependency external finance to carry out its operations.Current ratio: It explains the organizations ability to meet its current liabilities with its current assets. As observed from the graph it has a decreasing negative slope which means that the company is incurring more liabilities than it can meet them with its current assets. This may be due to its expansion and mergers and acquisitions. Due to limitations, the actual reasons are unknown.The significance/remarks of all the ratios have been explained in the next page in a tabular format.

8.6. Comparative year wise study of the financial ratios over the last 4 years (2010-2014)Comparative Study of financial ratios

Key Financial ratios2010-112011-122012-132013-14Significance/Remarks

Liquidity ratioCurrent ratio3.052141.3308721.237181.577073855Initially the ability to meet the short term liabilities with its current asset was 3 times but it has come down to 1.5 times over the few years

Quick ratio2.0917680.886650.8242311.140384561

Asset Management ratioTotal asset turnover ratio1.5825161.8050951.9217271.927084483the firm is consistent enough in utilising its assets to make money

Inventory turnover ratio6.4531146.7050177.2124867.388726366the firms ability to replenish its inventory has increased from 6 times to 7 times over the last 2 years

Leverage ratioDebt ratio0.6321690.6196510.6064760.535603608debt is almost the half of the value of its assets

Interest Coverage ratio2.7768835.5244866.25992216.18the firm can cover its interest expense more than 16 times over its operating income in the last year which has comparatively increased from the earlier years.

Profitability ratioNet profit margin ratio3.3104776.0637785.2819627.11%93% of the money generated by sales was spent on various expenses in the last year which has gradually increased from the preceding years

Return on equity6.34135513.7440812.4603815.87%nearly 16% of ownership stake that company's ownership realized as PROFIT has gradually increased from the preceding years

9. INTERPRETATION OF CASH FLOW STATEMENT ANALYSIS9.1. Financial year 2010-119.1.2. Cash Flow from Operating Activities

IFGL started with 2036.80 lakhs of cash in hand before working capital changes Receivables in 2011 has decreased from 2010 i.e. it has received payments against sold products which is a good sign. Inventories have increased to a great extent in 2011 from 2010 which means inventories has piled up where a lot of cash of the company is stuck. Payables have decreased significantly in 2011 from 2010 which means the company has decreased its liabilities significantly but it also means decrease in cash. Ultimately the company has much less cash(165.43) than income(1096.98) which is due to significant decrease in payables and too much increase in inventories from 2010.

9.1.3. Cash Flow from Investing 2011 2010

Cash generated from operating activities is 165.43 lakhs but it has invested 2692.98 lakhs of cash in investing activities. The cash flow is negative in this case which says that the company is growing and it routinely invests in new assets to expand its capacity, replace old equipment and to keep up with new technology.9.1.4. Cash Flow from Financing

IFGL has increased its dividend payout (346.14) in 2011 which is a significant increase from what it had paid in 2010, it implies that the number of investors have increased given the good financial health of the company and its growth prospects. Long term borrowings has increased in 2011(1000) from 2010(553.52), but it has paid most of its borrowings which is a good sign for investors. The short terms borrowings has been taken and repaid in the in the same accounting year which proves that the liquidity of the company is high enough to pay its short term liabilities. Cash credit facilities fulfil the requirement of working capital which is needed to run daily operation in a business concern. Cash credit has been significantly increased in 2011 from 2010 which means that the company needs more financing to run its daily operations. It may occur due to increase in capacity of the company.

9.1.5. Bottom Line

In 2011 the company started off with 182.15 lakhs of cash and ended with 333.16 lakhs which is a significant increase and the future looks promising for the company.

9.2. Financial year 2011-129.2.1. Cash Flow from Operating Activities

IFGL started with 2622.86 lakhs of net profit Receivables in 2012 has significantly decreased from 2011 i.e. it has received payments against sold products which is a good sign. Inventories have decreased to a great extent which says that the company is able to sell what it is producing. Payables have decreased significantly in 2012 from 2011 which means the company has decreased its liabilities significantly but it also means decrease in cash. Ultimately the net cash generated from operating activities (2610.79) compared to the net income (2622.86) which means the majority of the cash is coming from the main operation of the company which is the first criteria for a healthy business.

9.2.2. Cash Flow from Investing

Cash generated from operating activities is 2610.79 lakhs and it has invested 884.91 lakhs of cash in investing activities. The cash flow is negative in this case which says that the company is growing and it routinely invests in new assets to expand its capacity, replace old equipment and to keep up with new technology. Since the difference between cash from operating activities and investment activities is high, the company is flexible to meet fluctuating demand. 9.2.3. Cash Flow from Financing

IFGL has decreased its dividend payout (218.69) in 2012 than what it had paid in 2011, this implies that number of investors have decreased which is not a good sign. Long term borrowing is NIL in 2012, it may be because the company may not want to pile up its borrowings since it has already incurred a huge amount in 2011. Instead the cleared up the long term borrowings account which it had borrowed last year which increased the liquidity of the company. The short terms borrowings has been incurred but not paid back this year.

9.2.4. Bottom Line

In 2012 the company started off with 333.16 lakhs of cash and ended up with 1024.97 lakhs which is an increase of 691.81 lakhs of cash, this amount proves how liquidity the company is.

9.3. Financial year 2012-139.3.1. Cash Flow from Operating Activities

IFGL started with 2537.96 lakhs of net profit Receivables in 2013 has significantly decreased from 2012 i.e. it has received payments against sold products which is a good sign, infact there are advance payments. Inventories have increased which says that some cash is stuck in the form of inventories. Payables have increased significantly in 2013 from 2012 which means the company is pending with its liabilities but it also means increase in cash. Ultimately the net cash generated from operating activities (1779.26) is close to net income (2537.96) which means the majority of the cash is coming from the main operation of the company which is the first criteria for a healthy business.

9.3.2. Cash Flow from Investing

Cash generated from operating activities is 1779.26 lakhs and it has invested 907.78 lakhs of cash in investing activities. The cash flow is negative in this case which says that the company is growing and it routinely invests in new assets to expand its capacity, replace old equipment and to keep up with new technology. Since the difference between cash from operating activities and investment activities is high, the company is flexible to meet fluctuating demand. 9.3.3. Cash Flow from Financing

IFGL has increased its dividend payout (588.86) in 2013 than what it had paid in 2012 (218.69), which implies that number of investors have increased which will lead to more equity funds. Long term borrowing is NIL in 2013, it may be because the company may not want to pile up its borrowings since it has already incurred a huge amount in 2011. Instead the cleared up the long term borrowings account which it had borrowed last year which increased the liquidity of the company. The short terms borrowings has been incurred and but not paid back this year.

9.3.4. Bottom Line

In 2013 the company started off with 1024.97 lakhs of cash and ended up with 628.44 lakhs, the cash has decreased mainly due to repayment of borrowings and investing activities. The operating activity of the company continues to generate majority of the revenue for IFGL which is the ideal case.

9.4. For the year 2013-149.4.1. Cash Flow from Operating Activities

IFGL started with 3722.72 lakhs of net profit Receivables in 2014 has significantly decreased from 2013 i.e. it has received payments against sold products which is a good sign, infact there are advance payments. Inventories have decreased in 2014, there is even increased demand, this makes the inventory turnover ratio high. This improves the cash health of the company. Payables have decreased significantly in 2014 from 2013 which means the company has paid off its liabilities, infact some advance payments have been done. But this also means decrease in cash. Ultimately the net cash generated from operating activities (3026.59) is close to net income (3722.72) which means the majority of the cash is coming from the main operation of the company which is the first criteria for a healthy business.9.4.2. Cash Flow From Investing

Cash generated from operating activities is 3026.59 lakhs and it has invested 363.75 lakhs of cash in investing activities. The cash flow is negative in this case which says that the company is growing and it routinely invests in new assets to expand its capacity, replace old equipment and to keep up with new technology. Some of the fixed assets have been sold in both 2014 and 2013 which says IFGL is may be upgrading their technology. Interest received on investments have increased in 2014 than 2013, this implies that IFGL is investing its money wisely. Since the difference between cash from operating activities and investment activities is high, the company is flexible to meet fluctuating demand. 9.4.3. Cash Flow from Financing

The dividend payout has been more or less constant from the last year implying that the number of investors is almost same. Long term borrowing is NIL in 2014, it may be because the company may not want to pile up its borrowings since it has already incurred a huge amount in 2011. Instead the company cleared up the long term borrowings account which it had borrowed during the last few years which increased the liquidity of the company. There had been some advance payments on the short term borrowings

9.4.4. Bottom Line

In 2013 the company started off with 600.44 lakhs of cash and ended up with 1683.03 lakhs, with the majority of the cash inflow coming from operating activity of the company.

9.5. ConclusionOver the years IFGL has used minimum of external financing to finance its own operations with majority of the cash coming from its main operations, this inference can also be made from the Debt ratio of the company over the years which is mentioned in the ratio analysis, this is a very healthy sign for the company. The company invests a heavy amount into its investing activities due to its expansion and technology up gradation since it makes tailor made refractory products for the steel making industries. This company is also a lucrative option for the investors to invest in as it pays out a good dividend amount consistently over the years.

mousamdas interim-report ifgl

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