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Satish Project

Satish Project

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Project Finance
(A Case Study with Reference to Installation of Expansion
Project 3MT to 6.3MT)

WITH REFERENCE TO RASHTRIYA ISPAT NIGAM LTD, VISAKHAPTNAM A Project report submitted to international institute of planning and management, Hyderabad in partial fulfilments for the award of the degree of




guidance of

Under esteemed
S. Ramprasad Dy. Deputy finance Manager Visakhapatnam Steel Plant




I express my profound sense of gratitude for the administration of VISAKHAPATNAM STEEL PLANT, for giving me an opportunity to take up the project wok in organization. My sincere thanks to Mr.K.RAJA, Asst.Manager, HRD

VISAKHAPATNAM STEEL PLANT for accepting my request of doing the project in this esteemed organization. I also wish to thank all the staff of the HRD for their co-operation and help extended to me during my project. I take this opportunity to express my countless gratitude to my project guide Sri.S.R.Prasad, Deputy Finance Manager, have given kind assistance in my project work. also I record my special thanks to sri K.V RAO ,Manager, HRD, VISAKHAPATNAM STEEL PLANT who

Last but not least but though I could not find words to express my gratitude to my family members who have rendered great support and encouragement to bring out this project a grand success.





5 .

In most cases projects represent expenditure of capital funds by pre-existing entities which want to expand or improve their operation. which focuses not on the credit status of a company.INTRODUCTION A project is an activity sufficiently self-contained to permit financial and commercial analysis . telecommunications. is a specific activity with a specific starting point and a specific ending point intended to accomplish a specific objective. Financing a project involves a good deal of risk. we will spend money in expectation of returns and which logically seems to lead itself to planning. and by the privatization of government-owned entities in developed and developing countries. and transportation sectors. by the globalization of product markets and the need for manufacturing scale. In general a project is an activity in which. 6 . Financing and implementation as a unit. Project finance is a rapidly expanding field. involves a capital investment decision and it is the Top management’s duty to make a situation and feasibility analysis of that particular project and means of financing and implementing it. To take up a new project. but on cash flows that will be generated by a specific project Project finance has its origins in the natural resource and infrastructure sectors. The current demand for infrastructure and capital investments is being fuelled by deregulation in the power.

There are three basic reasons for this trend. In recent years there has been a rapid increase in the number of companies opting for project finance. improved risk control is needed for large-scale projects. In this way. Project financing is the raising of funds to finance an economically separable capital investment project in which the providers of the funds look primarily to the cash flow from the project as the source of funds to service their loans and provide the return of and a return on their equity invested in the project.The concept of private finance is a new method based on the use of privatesector resources to build. Project Finance can be defined in many ways and there does not exist any single definition for it. Interest in this approach has grown steadily as fiscal resources become more constrained. One key advantage is the potential to use the management skills and other resources of private enterprise to provide better public services at a lower cost. companies have become aware of their own credit ratings. project risk can be both spread and reduced. The advantage of the project finance method is that the various parties. In addition. Third. Second. 7 . access to finance can be facilitated by isolating good projects from the reduced credit status of business corporations. maintain. First. (including financial institutions) which are able to control these risks most appropriately can share the various risk factors inherent to projects. it is possible to form new publicprivate partnerships based on the appropriate sharing of roles between the Government And Private Enterprise. Another benefit is economic revitalization through the creation of business opportunities for private enterprise. Finnerty ‘s definition is that. manage and operate public infrastructure.

industrial projects and public services based upon non-recourse or limited recourse financial structure where project debt and equity used to finance the project are paid back from the cash flow generated by the project. To study the financial planning for ongoing expansion project at Visakhapatnam Steel Plant. A proposal for expansion of units at Visakhapatnam steel plant was made to combat to the increasing demand for steel in order to cater the needs of domestic market. The overall cost of the completion cost is Rs 8.3 MT. 8 .While Nevitt and Fabozzi define it as: A financing of a particular economic unit in which a lender is satisfied to look initially to the cash flow and earnings of that economic unit as the source of funds from which a loan will be repaid and to the assets of the economic unit as collateral for the loan.692 Crores as expansion project-up gradation to 6. Need for the study: Now-a-days the Project Finance is necessary to study because to learn how the allocation of financial resource in the implementation of new project or expansion of existing project of any company. it tells about the allocation of financial resources for the project. The International Project Finance Association (IPFA) defines project finance as: The financing of long-term infrastructure.

The collection of information is done through two principal sources. To study the feasibility analysis of the project (expansion project) To study project appraisal of ongoing expansion plan.3 MT).Objectives of the study: The main objectives of the study i. To study how the project serves the company as a long-term Asset. The Project Financing of the expansion plans are. They can not rely upon this report of the expansion plan and should make an exclusively new study for it.0 MT to 6. The scope of our study ‘The project finance of “ongoing expansion plan” in steel plant is confined to that particular project(3. To know the sources of financing the project.( 3.3 MT). 9 . If the management wants to go further future plans it needs to conduct project appraisal again. Methodology: Methodology is a systematic procedure of collecting information in order to analyze and verify a phenomenon.0 MT TO 6. Primary Data. 1.e. Scope of the study: The study of the project finance will helpful to know the allocation of the financial resources and know how it is applicable to individual projects that any Organization takes up. To study the cost incurred in developing a project.

Since the procedure and policies of the company will not allow to disclose confidential financial information.P. either individually or collectively. 1. the project has to be completed with the available data given to us. magazines and other sources of information of steel plant. Limitations: Though the project is completed successfully a few limitations may be there. 3. 10 . sum of the information has been verified or supplemented with personal observation. it was mainly through interviews with concerned officers and staff. Primary Data It is the information collected directly from financial department for further studies. Secondary Data. The study is carried basing on the information and documents provided by the Organization and based on the interaction with the various employees of the respective departments. 2.S. Secondary Data This is taken from the annual reports. The data collection includes: Conducting group seminars and with the concerned managers and officers of finance department of V. websites.2. The period of study that is 6 weeks is not enough to conduct detailed study of the project. company journals.

Project Evaluation Project Finance Contain the summary Findings Suggestions. objective and methodology of study. Chapter –II Chapter –III Chapter –IV Chapter –V Chapter –VI Chapter –VII Chapter –VIII Focuses on the Indian Steel Industries. need. Chapter – I Gives the introduction. Profile of Visakhapatnam Steel Plant.Frame work of the study The study is organized into 8 Chapters. Annexure Bibliography 11 .

this growth rate could not be maintained in the following decades.4% per annum during 1980-90.4 million tonnes of steel export in 1976-77.87 lakhs tonnes. exports declined.e. then it is certainly made using steel at some point in the manufacturing process. the average annual growth rate of steel production exceeded 8%.65% per annum during 1990-2000. which increased to 6. Once domestic demand revived.Steel Industry Steel is a versatile. the growth rate in steel production came down to 5. Though India started steel production in 1911. During the first two decades of planned economic development.79 million tonnes in 199512 . exports again declined to pick up only in 1991-92. Exports in the first five years were mainly due to recession in the domestic iron and steel market.1 million tonnes in 1951 to 29. 1950-60 and 1960-70. when the main producers exported 3. OVERVIEW OF IRON AND STEEL INDUSTRY HISTORICAL PERSPECTIVE The finished steel production in India has grown from a mere 1. constantly developing material that underpins all manufacturing activity. steel exports from India began only in 1964. During 1970-80. Thereafter.27 million tonnes in 2000-2001. If a product is not made from steel.7% per annum and picked up marginally to 6. which rose to 2. India once again started exporting steel only in 1975 touching a figure of 1 million tonnes of pig iron export and 1. However. i.

57 million tonnes.96. lowering of import duty on capital goods and raw materials etc. The situation has changed dramatically in the decade 1990-2000 with most of the growth originating in the private sector. A number of policy measures have been taken since 1991 for the growth and development of the Indian iron & steel sector. THE INDIAN STEEL SECTOR AFTER LIBERALISATION The Indian steel sector was the first core sector to be completely freed from the licensing regime and the pricing and distribution controls. while during 2000-01 the same was 32% and 68% respectively. The share of public sector and private sector in the production of steel during 1990-91 was 46% and 54% respectively. This change was brought about by deregulation and decontrol of the Indian iron and steel sector in 1991.36 million tonnes and in 2000-01 it was 2. inclusion of iron and steel industry in the list of high priority industries for automatic approval for foreign equity investments up to 74%. 1951. deregulation of price and distribution of iron & steel. The growth in the steel sector in the earlier decades since Independence was mainly in the public sector units set up during this period. The steel exports in 1999-2000 were 2. Some of the important steps are Removal of iron & steel industry from the list of industries reserved for the public sector and also exemption from the provisions of compulsory licensing under the Industries (Development & Regulation) Act. This was done primarily because of the inherent strengths and capabilities demonstrated by the 13 .

Indian iron and steel industry. Change in stock is also adjusted in arriving at the consumption figures. The production of finished steel during 2001-02 has been 30.37 million tonnes.2% in 1996-97.5% compared to the previous year. This fall in the growth rate of steel production has been brought about by several factors that. finished steel production shot up to a record 22.60% with the total production touching 29. The year-wise apparent consumption of finished steel since 1990-91. inter-alia. The total production of finished steel and the share of main and secondary producers during 90's and up to 2002-03 are given in the annexure. while in 1997-98. which was 2. During 1996-97. APPARENT CONSUMPTION OF STEEL Apparent consumption of steel is arrived at by subtracting export of steel from the total of domestic production and import of steel in the country.72 million tonnes with a growth rate of 6. 14 . The growth rate in 2000-2001 has improved to a healthy 9.61 million tonnes.27 million tonnes. is given in the table in the annexure. the finished steel production increased to 23. include general slow down in the industrial production and construction activities in the country coupled with lack of growth in major steel consuming sectors. It is also treated as the actual domestic demand of steel in the country. The growth rate has drastically decreased in 1997-98 and 1998-99 being 2. which means a lower growth rate of about 4.8% more than the previous year.2%.8% and 1.9% respectively as compared to 20% in 1995-96 and 6.

where intensity of steel consumption is high. The Sub-Group deliberated upon all aspects including supplydemand projections for finished steel during the period 2001-02 to 2011-12.5% as realistic during the 10th Plan. its growth is dependent upon the demand for steel by these segments of the industry. Considering a GDP growth rate of 6. The iron and steel sector has experienced slow down from the year 1997 to 2001. These include. The major reasons for the slow growth in the steel sector during the last few years include: (a) Sluggish demand in the steel consuming sectors Steel being the basic raw material for the construction industry. demand for steel has remained low. have come up in the recent past. the SubGroup has projected the demand for finished carbon steel in the country.PROJECTIONS OF FINISHED STEEL In order to have a long-term perspective and planning. All major core sectors of the economy have been facing an economic slow down. a Sub-Group on Steel and Ferro Alloys was constituted for steel sector under the aegis of Planning Commission. (b) Overall economic slow down in the country. power sector. The figures are given in enclosed chart. 15 . as also the auto sector and white goods sector. fertilizer sector. the capital goods and engineering goods industry. power. No major projects in the oil sector. Since no major infrastructure or construction projects have been implemented in the last few years. The growth of the steel sector is dependent upon the growth of the economy in general and the growth of industrial production and infrastructure sectors in particular.

private sector investment is yet to materialize in the core sectors of the economy. freight rates. thereby contributing to the rise in input costs for steel making. have been planned by the Government. the steel sector would also show signs of revival. mining and steel. Due to rationalization in the import duty structure in 1999. cement. import duty rates on iron and steel items have been gradually reduced over the years. there is no shortage of iron and steel materials in the country. Apparent consumption of 16 . with huge scale addition to steel making capacity. The slow down phenomenon is not restricted to the steel sector alone. industry. After liberalization. have been under the administered price regime. railways etc. coal prices etc. Only when the overall economy of the country picks up. (c ) Lack of investment by Government/private sector in major infrastructure projects Due to budgetary constraints. (d) Cost escalation in the input materials for iron and steel Power tariff. This has also contributed to slowing down demand for steel. power. This has opened up the domestic iron and steel sector to international competition. (e) Continuous reduction in import duty on iron and steel.coal. MARKET SCENARIO After liberalization. coal.2000. These rates have been frequently enhanced. the rates of basic custom duty have generally gone up to about 35% average. Despite liberalization of the economy and relaxation in the investment norms. no major construction activity in mega projects including fertilizer.

while input cost have gone up. there has been resurgence in the price level mainly of flats and demand has also witnessed an upward trend. In 2001-02. However.steel increased from 14. PRODUCTION Steel industry was de-licensed and decontrolled in 1991 and 1992 respectively. 17 . the integrated steel plants produced 42% of finished steel and the remaining 58% was by the secondary producers.84 million tonnes in 1991-92 to 27 million tonnes in 200102. Prices of iron and steel have declined in 200102 in tune with global trends. During 2001-2002. nearly 51% of crude steel production was by public sector the remaining 49% was by private sector. Steel Industry has been facing a slow down in the level of demand due to slow down of the domestic economy and that of the major steelconsuming sector. auto sector and white goods sector have shown a slump in demand for steel.61 million tonnes. certain sector like power and fertilizer projects. India is 8th largest producer of steel in the world. In 2003-2004 steel sector market demand increased mainly because of massive construction activity taken up in China. Efforts are being made to boost demand particularly in rural areas and also to increase exports. Sponge iron production was 5. Interface with consumers by way of Steel Consumer Council exists. In 2001-02. Pig iron production in 2001-02 was 3.66 million tonnes in 1999-2000.95 million tonnes. due to economic slow down. finished steel production was 30. of late. In 2001-02.

Interface helps in redressing availability problems. Development Commissioner for Iron & Steel makes allocation to priority sectors. Import of carbon steel during 2000-01 was about 1. cold rolled coils and semis. The incidence of import was mainly in hot rolled coils. Government has no control over prices of iron & steel. Due to a rise in domestic demand. PRICING & DISTRIBUTION Price regulation of iron & steel was abolished on 16.80 million tonnes. Exporters of Engineering Goods and North Eastern Region. though fluctuations have been noticed. The total imports of carbon steel during six years up to 2001-02 are given in enclosed chart. Defence. Railways. 18 . annually. Distribution controls on iron & steel removed except 5 priority sectors. the import of saleable steel in 1996-97 reached a level of 1. viz. Open Market Prices have been generally stable.41 million tonnes.1. Small Scale Industries Corporations.which is conducted on regular basis. Price increases of late have taken place mostly in long products than flat products. complaints related to quality. IMPORT AND EXPORT OF IRON AND STEEL India was importing about 10 to 15 lakh tonnes of steel.1992. which was about 12% less than the import in 1999-2000. In the current financial year the long product prices have increased by about 20% because of raise in demand internationally.

exports consisted mainly of plates. CR coils. colour coated sheets. HR sheets. Imports have largely dropped.5 Million Tonnes of steel. bars and rods. MEASURES ON IMPORTS Iron & Steel are freely importable as per the Exim Policy. HR coils. Tinplates. In future. The Government has fixed floor prices for seven items of finished steel viz. cold rolled coils. To check unbridled imports of cheap/seconds & defective steel. structural’s. partly an indication of greater self-sufficiency and partly the ability to control inflow of seconds and defectives.The Industry has been able to maintain its net exporter status from the last two years in the trading of finished steel. Adherence to BIS norms imply 19 . Earlier. hot rolled coils. several measures have been put in place. The other notable measure in this regard is that imports of certain types of steel have been subject to mandatory compliance of quality standards as specified by the Bureau of Indian Standards (BIS). like. The quantity of carbon steel exported from the year 1996-97 is as given in enclosed chart. India has been annually importing around 1. it is expected that the quantum of exports of more value added items would further increase. In fact exports of non-flat products recorded a growth rate of 5. whereas now additional items like semis. GP/GC sheets and pig iron are also being exported.7% over 2000-01.

Duty Exemption Pass Book Scheme also facilitates exports. India however. Further protection in this regard has been the issuance of the Government notification to 3 major ports – Kolkata. MEASURES FOR EXPORT OF IRON & STEEL Iron & Steel are freely exportable and India is a net exporter of steel. and an anti subsidy component of 14. The customs duty on second and defective HR Coils has been raised to the bound rate of 40 per cent. generic or common name of the commodity.48 per cent. Moreover all manufacturers/exporters of the listed products shall be required to register themselves with the BIS. month and year of packaging and maximum retail sale price. Indian steel exports have been subject to anti-dumping/anti-subsidy duties actions by the stronger economies over the last few years.supplying information like name and address of the importer. net quantity in terms of standard units of weights and measures. These include: Anti dumping duty on cut–to–size plate exports from Bhilai Steel Plant of SAIL with a total duty of 72. Advance Licensing Scheme allows duty free import of raw materials for exports. Mumbai and Chennai to monitor the flow of foreign steel into the country. Anti dumping duty has been levied on import of HR coils from Russia and Ukraine.82 per cent. has been exempted from the safeguard duties under Section 201 of the US Trade Laws on almost all steel products except carbon 20 .

An Anti dumping Directorate has been set up under the Ministry of Commerce & Industry with adequate power to fight trade actions while remaining within the WTO framework. However. China has recently imposed a safeguard duty on the import of steel. which led to the loss of major markets for the Indian steel exporters. This is on account of the country’s status as a developing nation. which ranges from 7-26%. The EU has also imposed safeguard duties for India. a Suspension Agreement with exporters like SAIL allows the company to sell at a price not lower than the agreed one. The country-wise details are yet to be worked out. EU has also taken AD/CVD actions on import of HR coils.largely due to the ability to find out alternative export markets where selling steel has been profitable. Steel Exporters’ Forum has been recently set up to boost steel exports.flanges. such measures apply on electrical steel sheets and stainless steel wire rods. hot rolled. cold rolled and galvanized products in the AD/CVD actions. DUTIES & LEVIES ON IRON & STEEL 21 . Canada has covered pipes. The rising trend in Indian steel exports that was being witnessed in the last couple of years was halted due to these anti dumping actions initiated by the advanced. Despite the initial setbacks Indian exports have recovered . developed nations of the world.

inter-alia.(Steel Development Fund) This was a levy started for funding modernization. rehabilitation. Custom Duty on seconds and defectives has been raised to the bound rate of 40%. High excise duty has made domestic industry unviable. Custom Duty has been reduced on a wide range of inputs. pig iron units and steel plants using Corex technology. which would bring down the cost of production for the domestic steel industry.Custom Duties Peak rate of Custom Duty has been reduced sharply during last 5 years. At present excise duty on all iron and steel products is 16% ad valorem called CENVAT. expansion and development of steel sector. Excise Duty Excise Duty on iron & steel has not been reduced in successive budgets. The Fund. In the Union Budget 2002-03 it has been further reduced to 30%. Custom Duty on Met Coke has been reduced to 5% for integrated steel plants using blast furnace. This has forced domestic industry to become internationally competitive. 22 . renewal & replacement of Integrated Steel Plants. LEVIES ON IRON & STEEL SDF. supports: • Capital expenditure for modernization. diversification.

94.4.96. Cabinet decided that Corpus could be recycled for loans to Main producers. Imports of foreign technology as well as foreign direct investment are freely permitted up to certain limits under an automatic route. Ministry of Steel plays the role of facilitator. in the liberalized scenario. EGEAF This was a levy started for reimbursing the price differential cost of inputs used for engineering exporters. Interest on loans to Main Producers be set aside for promotion of R&D. providing broad directions and assistance to new and existing steel plants.• • • Research & Development Rebates to SSI Corporations Expenditure on ERU of JPC Fund was abolished on 21. Fund was discontinued on 19.2. OPPORTUNITIES FOR GROWTH OF IRON AND STEEL The New Industrial Policy Regime The New Industrial policy has opened up the iron and steel sector for private investment by (a) (b) Removing it from the list of industries reserved for public sector and Exempting it from compulsory licensing. GLOBAL SCENARIO 23 . An Empowered Committee has been recently set up to guide the R&D effort in this sector.

The world steel industry is today characterized by excess capacity and poor demand. World steel industry witnessed major ups and downs in the last two decades and especially over the past five years. the Asian countries were large importers of steel.2% to 79. In 1996. The world steel consumption has also increased by 1%. which is equivalent of a third of total steel trade. The international steel trade constituted around 279.8% of the production. After the Asian crisis. the region got transformed into a net exporter of steel. This scenario has led to an undesirable impact in the form of increasing protectionism within the developed countries and large scale dumping in the international markets. Indian exports have been subjected to Anti. The Asian crisis and the collapse of USSR have transformed importers of steel into exporters.The global production of crude steel increased from 777 million tonnes in 1998 to 785 in 1999. These are the collapse of the Soviet Union and the severe financial crisis in most South East Asian countries as well as in Korea and Japan. Till the recent financial crisis.dumping/Counter-veiling duties investigations in EU. There have also been instances of dumping of steel in our country. World production of crude steel in March 2003 rose by 8.6 million 24 . eight of the ten largest steel producing nations were in Asia and import by the region in the mid 1990’s was around 80-90 million tonnes of finished and semi finished steel per year. USA and Canada. During this year. The pattern of trade has been upset by two important developments.6 million tonnes or 39. It is in this global context that the Indian steel industry will have to cast its future role.

while Ukrainian production increased by 10. 25 . fell by 3. Crude steel production in the USA is still rising.5% to 8.6 million tonnes. The total of the 3 months to date was 226. Canadian steel production. 8. In the former USSR. Mexican production is also improving with March production up 21.8 million tonnes.8% higher than the January to March period in 2002. The 3 months total was up 6.6% to 3.tonnes.8% higher than the January to March period in 2002. on the other hand. up by 5.5% in the Ukraine.7 million tonnes.1 million tonnes. on the other hand.2 million tonnes.5% in the year to date to 4.4% in March 2003.5% in Russia and 7. bringing the first quarter total up by 6.8 million tonnes. World production of crude steel in March 2003 rose by 8. The total of the 3 months to date was 226. both Russia and the Ukraine showed an increase in steel production.2% to 79.3% in Russia to 14.7 million tonnes. fell by 4.0 million tonnes. the highest monthly total in over a decade. 8.5% to 23. up by 4. Production in Kazakhstan.8 million tonnes.6% in March and by 3.3% in the three months to 1.3% in March and by 0. almost equal to the Spanish first quarter total.4% and the 3 months total up 29. the highest monthly total in over a decade.

with most of the increase going to the home market. Imports of blooms. 26 .Steel imports by the USA have been falling with the total for the first two months of 2003 30% below the same period in 2002. Total exports. One of the largest rises was in hot rolled wide coil. with the year to date 17% higher than in 2002. On the pricing front the steel prices have been spiralling up especially since mid 2002 mainly due to the shortfall in supply.5% up in the two months at almost 16. • Cessation of gas supply in Venezuela stopped about 6 million tonnes of annualized production of steel.5 million tonnes. In March 2002 the US President announced imposition of temporary safeguard measures on import of key steel products into USA. In retaliation to the US action EU has also imposed provisional safeguard measures against import certain steel products. on the other hand. billets and slabs were less than half what they were in the first two months of 2002. Exports of hot rolled wide coil to Canada almost doubled in the first two months. This can be attributed to the facts. and there was a very large tonnage exported to both China and Singapore in February 2003. have risen. which more than doubled in the first two months of 2003. Canada and Thailand are some of the other countries that have initiated safeguard investigations against import of steel products into their countries. China. In fact the February total was half the February 2002 total. Net shipments of steel reported by the AISI were 7.

Global scrap prices increased Capacity addition is not significant except in China. cost effective. participation and growth of the private sector in the steel industry. Increasing role of private sector in total production can be seen from the fact that its share has increased from 51. the 8 th largest producer of steel in the world. Internal consumption of China has increased. US Dollar is weakening The fascination for cheap steel has come down.4% in 1991-92 to approximately 67% in 1998-99.• • • • • • • • Ukraine has imposed export duty on scrap steel. total (crude) steel making capacity is over 34 million tonnes and India. a large number of new/Greenfield steel plants have also come up in different parts of the country based on modern. This trend is likely to continue. the capability to produce a variety of grades and that too. While the existing units are being modernized/expanded. which is a raw material. has to its credit. Shut down of many coking coalmines in China due to safety reasons. As per the ratings of the prestigious " World 27 . At present. THE GROWTH PROFILE AFTER LIBERALISATION The liberalization of industrial policy and other initiatives taken by the Government have given a definite impetus for entry. There has been series of blast furnace outages in USA. state ofthe-art technologies. of international quality standards.

Of these. while countries like South Korea. the steel industry is likely to have substantial growth in the medium to long term perspective. USA share the same class as India. the huge potential for its increase and the estimated GDP growth. Prior to 1991. there was only one unit in the secondary sector. Considering the facts of current low levels of per-capita consumption in India. In pig iron also. Japan have qualified for the top slot. The production of pig iron has also increased from 1. the AIFIs have sanctioned 21 new projects with a total capacity of approx 3. Chapter-4 Profile of Visakhapatnam Steel Plant INTRODUCTION 28 . 16 units have already been commissioned. the growth has been substantial.6 million tonnes in 1991-92 to 3. Post liberalization.9 million tonnes.Steel Dynamics".94 million tonnes in 200102. EU. Indian HR Products are classified in the Tier II category quality products – a major reason behind their acceptance in the world market. The share of Private/secondary sector has increased over time and is currently around 74% of total production.

The level of steel consumption has long been regarded as an index on industrialisation and economic maturity attained by a country. Keeping in view the importance of steel. aeroplane and computers are in one way or other. 1 2 3 4 Durgapur Steel Plant Bhilai Steel Plant Bokaro Steel Plant Rourkela Steel Plant British Erstwhile USSR Erstwhile USSR German BACKGROUND 29 . railway. for instance. automobile. All the key discoveries of the human genesis. Iron $ Steel Company in the erstwhile princely state of My sore. steam engine. At the time of independence India had only three integrated Steel Plants-Iron $ Steel Company at Burnpur. infrastructure or consumables. making its indispensable for furthering and achieving continual growth of the economy be it construction. the following integrated steel plants with foreign collaborations were set up in the public sector in the post-independence era. means of communication. fastened together with steel and with its sagacious and multifarious application steel is a versatile material with multitude of useful properties. manufacturing.Steel occupies the foremost place among the materials in use today and pervades all walks of life. Tata Iron And Steel Company at Jamshedpur.

VSP TECHNOLOGY: STATE-OF-THE-ART   7 Metre tall Coke oven batteries with coke dry quenching Biggest Blast furnaces in the country 30 .656 MT of saleable steel.22 Crores based on prices as on 4th quarter of 1981. To operate the plant at international levels and attain such labour productivity. large scale computerisation and automation etc are incorporated in the plant. The project was estimated to cost Rs.To meet the growing domestic needs of steel Government of India decided to set up an integrated steel plant at Vishakhapatnam. The foundation stone for the plant was laid by the then prime Minister on 20th January 1971.V. the cost escalated to around 8500 Cores. However on completion of construction and commissioning of the whole plant in 1992. New technology. The plant has a capacity of producing 3. Narasimha Rao.0 MT of liquid steel and 2. Visakhapatnam Steel Plant is one of the most modern steel plants in the country. the organisational manpower has been rationalised.4 MT integrated steel plant at Vishakhapatnam. 3897. An agreement was signed with erstwhile USSR in 1979 for cooperation in setting up 3. The plant was dedicated to the nation on 1st August 1992 by the then Prime Minister Sri P.

Extensive waste heat recovery systems. 100% continuous casting of liquid steel. MAJOR SOURCE OF RAW MATERIALS Iron ore lumps and fines BF lime stone SMS lime stone BF Dolomite SMS Dolomite Manganese Ore Boiler coal Coking coal Bailadilla. “Tempcore” and “Stelmor” cooling process in LMMM & WRM. AP Jaisalmer. AP Chipurupalli. Suppressed combustion – LD gas recovery system. Orissa Australia WATER SUPPLY 31 . MP Jagayyapeta. Comprehensive pollution control measures. AP Talcher.       Bell less top charging system in Blast furnace 100% slag granulation at the BF cast house. Rajasthan Dubai Madharam.

The capacity of the Power plant is 286. MAJOR UNITS Department Coke ovens Sinter Plant Blast furnace Steel melt shop LMMM WRM MMSM Annual cap ‘000 T Units (3.5 MW. POWER SUPPLY Operational power requirement of 180 to 200 MW is being met through Captive Power Plant.0 MT stage) 2261 5256 3400 3000 710 850 860 3 Batteries each of 67 ovens and 7 Meter height 2 Sinter machines of 213 m2 grate area each 2 Furnaces of 3200 m3 volume each 3 LD converters each of 150 m3 volume and strand bloom casters 3 Stand finishing mill 2 x 10 stand finishing mill 6 stand finishing mill MAIN PRODUCTS OF VSP Steel Products By products 32 .Operational water requirement of 36 Mgd is being met from the Yeleru Supply scheme. VSP is exporting 60 MW power to APTRANSCO.

MISSION To become a 10 million tonne world class integrated steel plant by 2019-20.Angles Billets Channels Beams Squares Flats Round Rebars Wire rods Granulate slag Lime fines Coal tar Anthracene acid HP Naphthalene Benzene Toluene Zylene Wash oil Ammonium sulphate THE VISION OF VSP CORPORATE PLAN OF VSP VISION To establish as an excellent corporate citizen and ensure optimal return on investment. OBJECTIVES 33 .

 Towards Profitability – Achieve net profits continuously from 200203. Towards Technology – Continuously upgrade technology to operate at international efficiency levels. branch offices and stockyards located all over 34 . 8 MT by 2014-15 and 10 MT by 2018-19. conservation of environment and be socially responsive. Towards growth – Expand the plant capacity to 6 MT by 2009-10.   Towards Stakeholders – Make VSP the company of choice.  Towards Safety. CORE VALUES Value foresight is crucial in today’s competitive businesses climate VSP values     Commitment Customer satisfaction Continuous improvement Concern for environment MARKETING NETWORK The Company markets its products through headquarters marketing office and a network of regional offices. Environment and Society – Continue efforts towards safety of employees.

The exports are carried out by the export wing of marketing division with the help of different agencies. Regional Mangers/Branch managers meet at Head quarters regularly to assess the market situation and decide market strategies. engineering industry. The Company is recognised as “Star Trading House” by the Director General of Foreign Trade. wire drawing industry. The Company is ideally located to serve the southern Indian market.the country. re-rolling industry. Ministry of commerce. electrode manufacturers and railways. It also takes the help of consignment agents and consignment sales agents for the marketing of its products. forging industry. fastener industry. cable industry. The end users of the steel products manufactured at the plant include amongst other construction industry. FINANCIAL PERFORMANCE OF VSP a) HISTORY 35 . automobile industry. Government of India.

1995 Rs.06.07. 1970 followed by foundation stone laying by her.20%. 8593. Thereafter the project has undergone three revisions as detailed below.00 Third revision 12.56% 3.28 Cr..1982 Rs. 3897. The initial project cost was sanctioned at Rs. 2256 Crores with an Internal Rate of Return (IRR) 4.40% 3.00 The broad reasons for revisions were: (1) Non-availability of funds on time 36 .4 million tonne integrated steel plant at Visakhapatnam.40 Second revision 24. Indira Gandhi in Parliament on 17th April.70 Cr.07. (VSP). First revision Date of sanction by GOI Capital asset. 6849. 6. 5. Rashtriya Ispat Nigam Ltd. The decision of Government of India to set up an integrated steel plant at Visakhapatnam was announced by the Prime Minister Smt. Visakhapatnam Steel Plant (VSP) stands as a monument of advanced technology. 5. The Indian government and USSR signed an agreement on 12th June 1979 for cooperation in setting up the 3. VSP is the first shore based integrated Steel Plant in the country.In the industrial horizon of India.29 Cr. Financial IRR Liquid steel capacity (in MT per annum) 30.30% 3.1988 Rs.

Details of major production facilities under original concept and revised concept are given at annexure. REASONS FOR TIME OVER RUN (1) (2) (3) (4) (5) b) Inadequate fund flow & its delay Midway revision of project concept Dislocation of Soviet equipment suppliers Delay in supplies made by major PSUs. a Rationalised Project Concept was evolved where while retaining the Hot Metal capacity. the liquid steel capacity was brought down to 3. 1497 Crores. Universal Beam Mill was dropped. 37 .(2) (3) (4) (5) Price escalation Enhanced currency exchange rates Revision in taxes and duties Change in ocean freight.4 MT by dropping one SMS converter and up rating the capacity of other converter.0 MT from 3. due to inadequate funds availability. there was a threat to project continuance. The Rationalised Concept helped in reducing the project cost by Rs. Further on the finishing line. In order to contain project cost. Delay in providing water by AP Government RATIONALISED CONCEPT The construction of the plant started in 1981 and scheduled to be completed in 4 to 6 years in two stages. However.

29 Crores (3. Action was taken for restructuring the capital base even before the Company became totally commercially operational. 8593. The 2nd BF viz ‘Krishna’ was commissioned in March 1992 and finally the plant was dedicated to the Nation by the then Honourable Prime Minister Sri PV Narasimha Rao in August 1992. The first capital restructuring took place in July 1993. c) CAPITAL RESTRUCTURING FIRST CAPITAL RESTRUCTURE Long gestation period in commissioning the plant and escalation of the project cost to Rs. ‘Godavari’ was commissioned in March 1990. The 1st BF viz. 1184 Crores Government of India loans into Equity Capital. 38 . in order to ensure viability and to prevent from becoming potentially sick under Sick Industrial Company (Special Provisions) Act 1985.  Conversion of Rs.8 times over the original estimate) necessitated capital restructuring. SALIENT FEATURES  Conversion of Rs.The plant was commissioned in two stages.. 1185 Crores Government of India loans into 7% non-cumulative preference shares redeemable at the end of 10 years.

419 Crores released after 31st July 1992).  Conversion of GOI loans receivable in 1993-94 into Preference Shares to be decided after review. 149. Preference Capital and Interest free loan. 39 . 791 Crores interest due on Government of India loans into interest free loans for a period of 7 years.40 Crores).40 Crores on account of interest saving due to waiver of penal interest.  Government of India ensures funds (RS. 1507 Crores) in the plan period for the project. • Reduction of loss by Rs.47 Crores annually on account of interest saving due to conversion of loans to equity capital.  Conversion of GOI loans receivable in 1992-93 into 7% noncumulative preference shares redeemable at the end of 10 years from the date of allotment (Rs. 432. 149. BENEFITS FROM CAPITAL RESTRUCTURING • Reduction of loss by Rs.  Waiver of penal interest that becomes due up to July 1992 (Rs. Conversion of Rs.

88.47 Crores of Government loan was converted into 7% non-cumulative preference share capital redeemable after ten years from the date of release of these loans. government of India-Inter-alia desired to appoint a financial consultant of repute to suggest a turnaround strategy for the organisation. a second capital restructuring was sanctioned by the Government. Benefits from this capital restructuring was a reduction of loss by Rs. whereby Rs. e) FINANCIAL AND PHYSICAL PERFORMANCE FINANCIAL PERFORMANCE 40 . the general recession set in Steel Industry from mid 1996. to avoid a situation of reporting a technically viable integrated steel plant to BIFR. While approving second capital restructure. long gestation period in the commissioning of the plant. 235.d) SECOND CAPITAL RESTRUCTURE Owing to historical capital burden. the Company continued to incur net loses and getting close to erosion of 50% of networth of the Company. the accumulated net losses before total commissioning.85 Crores on account of interest saving and an annual interest saving of Rs. The second capital restructuring was approved in May 1998. conversion of Rs. Further. 791 Crores interest free loan to 7% noncumulative preference capital was also agreed to. 542. At this stage.47 Crores.

austerity measures to cut down the cost. During the last few years. From this table it can be seen that the Company was gaining considerable gross margin which reflects the satisfactory performance of the plant for all the years except during the year 199899 and 1999-2000 when there was a major set back to Coke ovens. the Company had taken a number of steps like major capital repairs to Coke ovens. 153 Crores and turned around during the year 2002-03 making a Net Profit of around Rs. From the table it can be seen that 41 . PHYSICAL PERFORMANCE The details of physical performance as against the targets set right from 1990-91 to 2002-03 are placed at annexure. BF capital repairs. restrictions on capital expenditure etc.The financial performance of the organisation against the set targets right from 1990-91 to 2002-03 is placed at Annexure. The Company had again gained its momentum during 2000-01 when it made cash profit of Rs. 520crores for the first time. It may need a special mention that a special drive took place to cut down the interest cost on term loans and working capital arrangements. Further it had also secured reasonable cash profits barring those two years and initial period up to 1992-94.

making for first time Net Profit of Rs. achieving Gross sales/turnover of Rs. On the production front. 590. UTI (Rs. 128 Crores and EPC Rs. 109 Crores). The performance of the Company for the year 2002-03 is placed at Annexure. 96 Crores. 5059 Crores. WODL Rs. 42 . 520 Crores. the Company was having total term loans to the tune of Rs. 600 Crores (CC Rs. appreciation of rupee with reference to USD in the later part of the year. The financial year 2002-03 is a happy note in VSP’s diary because of its remarkable performance in all fronts. the Company far exceeded the targets set. Taking advantage of falling interest rates. 267 cores. 175 Crores) are the major outstanding. strong economic factors with reference to country’s strengthened foreign currency reserves. At the beginning of the financial year 2002-03. DCDL Rs. 580. Apart from this the utilisation of working capital limits from the banks were Rs. dynamism prevailing in the financial market. LIC Rs.the targets set were reasonably met by the organisation.29 Crores. 1373. 395 Crores in the form of FCNR (B) DL Rs. the Company has taken several initiatives to reduce the debt burden.80 Crores and Bonds Rs. PRESENT PERFORMANCE The Company turned around during the year 2002-03.98 Crores. up to 1999-2000 and far exceeded the targets from the year 2000-01 onwards.

COMMERCIAL AND FINANCIAL PERFORMANCE 43 . The above steps resulted in brining down outstanding term loans to Rs.37 Crores as at the end of the year 2002-03 (debt free on date) and utilisation of working capital to the extent of only Rs. 773. swapping of high cost loans with borrowings from banks at lower interest rates. 590 Crores from UTI during the year 2002-03 from out of internal resources and by swapping with bank loans.STEPS TAKEN TO REDUCE DEBT BURDEN The significant steps taken by the Company to reduce debt burden include restructuring of dept through prepayment of high interest loans out of internal resources.09T. The Company due to the above initiatives could prepay the entire term loan of Rs. swapping off high cost working capital demand loans with FCNR borrowings and commercial paper at cheaper rates of interest. 368 Crores. PERFORMANCE OF VSP a) PRODUCTION. 15% working capital demand loan of Rs. 290 Crores as shown in Annexure.4% to 10. The above steps resulted in containing the interest expenditure to Rs. 400 Crores was also substituted with commercial paper with an average interest rate of 7% and FCNR demand loan at an average interest rate of 3. 135 Crores for the year 2002-03 as against the previous year level of Rs.

20062000 01 02 03 04 2004.2002.PRODUCTION PERFORMANCE (‘000 Tonnes) Year 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 Hot metal 2943 3165 3485 3941 4055 3920 4153 4046 Liquid steel 2656 2909 3083 3356 3508 3560 3603 3606 Saleable steel 2382 2507 2757 3056 3169 3173 3237 3290 production performance 4500 4000 3500 3000 2500 2000 1500 1000 500 0 1999.2001.20032005.2000.06 07 05 years Hot metal Liquid steel Saleable steel values 44 .

COMMERCIAL PERFORMANCE (Rs. Crores) Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Sales turnover 3037 3436 4081 5059 6169 8181 8469 9126 8881 Domestic sales 2677 3122 3710 4433 5400 7933 8026 8702 7412 Exports 295 322 371 626 769 248 443 425 1469 commercial performance 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 19 9900 20 0001 20 0102 20 0203 20 0304 years 20 0405 20 0506 20 0607 20 0708 values Sales turnover Domestic sales Exports 45 .

In crs) Gross margin Cash profit Net profit 252 -130 504 153 690 400 1049 915 2073 2024 3271 3260 2383 2355 2632 2584 3001 2977 -562 .2005.2000.Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 FINANCIAL PERFORMANCE (rs.2006.2003.291 -75 521 1547 2008 1251 2222 2686 Financial performance 3500 3000 2500 2000 values 1500 1000 500 0 -500 -1000 1999.2001. In order to be eco friendly.2004.200700 01 02 03 04 05 06 07 08 years Gross margin Cash profit Net profit b) POLLUTION CONTROL AND ENVIRONMENTAL PROTECTION Generally. integrated steel plant is seen as a major contributor to environmental pollution as it discharges a large volume of waste products. VSP has planted more than 3 million trees over an 46 .2002. Elaborate measures have been adopted to combat air and water pollution in VSP.

occupational health besides on the job at the shop floor. 460 Crores towards pollution control measures. c) HUMAN RESOURCE MANAGEMENT Human resource initiatives at VSP are clearly linked to the corporate strategy of the organisation. The productive environment prevailing in the Company fosters an atmosphere of growth. the first of its kind. VSP has introduced multi skilling concept since inception and the employees are trained as per this concept. i) TRAINING AND HUMAN RESOURCE DEVELOPMENT Training and HRD are given due emphasis at VSP. fire prevention. both for the employees and for the Company. VSP has exemplary industrial relations where the entire workforce works as a well knit team for the progress of the Company. in the industry. This system ensures smooth change over of the shifts and uninterrupted peace of operation of the plant during the shift change over. and incorporated various technologies at a cost of Rs. Training is also given in the area of safety. Each year. a minimum of 1/3rd of the employees undergo various training sessions either at Training and Development Centre or at Centre for HRD for sharpening their skills on the technical and management related issues.area of 35 square Kms. Another unique feature followed at VSP is the uniform working hours for the ministerial employees. 47 . VSP has adopted a system of overlapping shifts.

medical facilities. 48 . MoU. quality. schools. Some of the major awards received by VSP are in the area of the energy conservation. quality circles. Rajbhasha. Some of the important awards received by VSP are indicated below. sports related awards and a number of awards at the individual level.  CII (Southern Region) Energy conservation award in 1995-96. crèche. drainage system. environment protection. shopping complexes. d) ACHIEVEMENT AND AWARDS The efforts of VSP have been recognised in various forums. A modern township with all amenities has been developed with 8032 quarters to house the plant employees and other government agencies in 11 sectors. community centres. The township is having best facilities in terms of drinking water supply. safety. parks.ii) WELFARE AMENITIES The welfare measures provided for the employees of the Company are the best in the industry.  ISO 9001 for SMS and all the downstream units – a unique distinction in the Indian Steel Industry. roads. The Company also provides welfare facilities much beyond the statutory requirements by way of introduction of a unique superannuation benefit fund and a unique family benefit scheme. recreational facilities. etc to cater to the needs of the employees and their dependent families.

WIPS for 2001-02. SCOPE award for best turn around from 2001. Prime Minister’s trophy for 2002-03. Total quality. Best Enterprise award from SCOPE. high skills. Best Labour Management award from the government of AP. latest technology. Today. up to date knowledge. cost consciousness. sophisticated equipment. production with less cost and customer satisfaction have become the hallmark of VSP.      Gold star award for excellent performance in productivity. 49 . MoU excellence award for 2003-04. VSP is moving forward with an air of confidence and with pride amongst its employees who are determined to give their best for the Company to enable it to reach new heights in organisational excellence.

50 .

The following chart shows the relationship among these phases Planning Analysis Selection Financing Implementation Review 51 . Implementation. and Review. Selection. Financing. which may be divided into six broad phases: Planning.PROJECT EVALUATION Capital budgeting is a complex process. Analysis.

Project Planning The planning of a project is a technically pre-determined set of interrelated activities involving the effective use of given material, human, technological and financial resources over a given period of time. Which in association with other development projects result in the achievement of certain predetermined objectives such as the production of specified goods & services. Project planning is spread over a period of time and is not a one shot activity. The important stages in the life of a project are: • It’s identification • It’s initial formulation • It’s evaluation (whether to select or to reject). • it’s final formulation • It’s implementation. • It’s completion and operation (Management and control to ensure targeted benefits). The time taken for the entire process is the gestation period of the project. Contents of Project report: 1. Market and marketing. 2. Size of the project. 3. Project engineering dealing with technical aspects of the project. 4. Location and layout of the project building. 52

5. Building. 6. Production capacity. 7. Work schedule.

Details of the cost of the Project:

1. Cost of Land. 2. Cost of Building. 3. Cost of Research and Developing. 4. Cost of Plant & Machinery. 5. Cost of Furniture and Fittings. 6. Profitability of Projects. 7. Organisational Structure. 8. Proposed Financing of the Project.


At present Vizag Steel Plant is producing 3.5 million Tonnes of liquid steel. VSP wants to expand its plant capacity to 10 million Tonnes per year by 2020. Now it is in ongoing expansion plan by increasing its capacity from 3.0 MT Stage to 6.3 MT stage in order to cater the needs of the domestic market and inturn contributing for the growth of gross domestic product rate.VSP aiming to produce at international standards of cost and quality ; and to meet the aspirations of the stakeholders. In VSP there are three coke oven batteries they produce the required coke for steel production in VSP. Due to the expansion of the plant the three coke oven batteries, existing rolling mills, steel melt shop are not sufficient. The planning for the expansion project is very essential in order to complete the project in given time. Without proper planning of the material, human and technological resources the project cannot be completed efficiently. The detailed project report helps in estimating requirements of the project and completing the project systematically. Project analyzing After the primary stages of screening, the analysis of the market, technical, financial, economic and ecological aspects are to be taken up. The focus of this phase of capital budgeting is on gathering, preparing and summarizing relevant information about various project proposals. Based on the information developed in this analysis, the stream of costs and benefits associated with the project can be defined.


Project Appraisal In the project cycle.  Technical analysis to determine whether the specifications of technical parameters chosen realistic and optimal. 55 . “PERT/CPM” chart/activity taking in to account the projects that are already being implemented by the concerned agency and resources required for implementing the project.  Financial analysis to determine whether financial costs are properly estimated. resettlement etc as may be required as per environmental guidelines have been fully covered in the project cost estimates.  Environmental aspects to ensure that the environment related issues such as protective measures. funding is assure and the project is financially viable. In the case of an export oriented pr4oject export potential of products/services would need to be assessed. market plan and delivery system are soundly conceived. preliminary establishment precedes the project appraisal proposed to be achieved through implementation of a project.  Economic analysis to determine whether the project is worthwhile from the point of view of the economy as a whole. The appraisal of an investment proposal needs to examine the following aspects:  Demand and supply analysis to determine the gap and whether product specifications. the preparedness to execute the project including implementation plans.  Organisational and managerial aspects to determine whether the Organisation has the managerial capability to implement and operate the project. for preferably through market surveys and/or other reliable forecasts of demand and supply of products/services proposed to be produced by project under consideration. rehabilitation.

 Sensitivity / Risk analysis to assess the impact of different variables of input and output on the viability of the project is carried out which can suggest potential management activity to reduce overall project risk. modernization and replacement of the long-term assets. 2. acquisition. 56 . Capital investment decisions are a firm’s decisions to acquire long term assets. and have considerable effect on the firm’s growth and profitability. This balance can be matched with the firm’s need for cash during the period and accordingly arrangements can be made to meet the deficit or invest the surplus cash. Estimation of cash flows. 1. The firm’s investment decisions would generally include expansion. The three steps involved in the evaluation of an investment or project. The investment decision rules may be referred to as ‘capital budgeting techniques’ or ‘investment criteria’. They involve large capital expenditure. A sound appraisal technique should be used to measure the economic worth of an investment project. Estimation of required rate of return. The firm can make projections of cash inflows and outflows for the near future to determine the availability of cash. to pay interest and other expenses and to pay dividends to shareholders. An analysis of cash flows is useful for short run planning firm needs sufficient cash to pay debts maturing in the near future. 3. Application of a decision rule for making the choice. The essential property of a sound technique is that it should maximise the shareholder’s wealth. The following other characteristics should also be possessed by a sound investment evaluation criterion.

Net operating benefits per unit of investment method 2. Debt-service coverage ratio 57 . Net present value β b. ♦It should provide for an objective and unambiguous way of separating good projects from bad projects. Profitability index d.♦It should consider all cash flows to determine the time profitability of the project. ♦It should help ranking of projects according to their time profitability. ♦It should be a criterion. Accounting rate of return c. pay back period b. The investment criteria or techniques are classified into two broad categories1. Economists. which is applicable to any conceivable investment project independent of others. Internal rate of return c. ♦It should recognize the fact that bigger cash flows are preferable to smaller and early cash flow. Some techniques are general and applicable to wide range of projects and some are specialized and suitable for certain types of investments and industries. ♦It should help to choose among mutually exclusive projects. and others have suggested more than thirty criteria to judge the worthwhileness of the capital project. Familiarity with the capital budgeting techniques will facilitate an easier understanding of costs and benefits risk analysis and cost of capital. Accountants. those projects that maximise the shareholder’s wealth.Discounting criteria a.Non discounting criteria a.

58 Ct --------t=1 (1+r) . INTERNAL RATE OF RETURN: Internal rate of return is also a method that uses the concept of time value of money. n NPV of a project = ∑ Here. IRR is also known as time adjusted return.d. Ct = cash flow at the end of year t n = life of the project t = discount rate 2.V is a modern method of evaluating investment proposals. it represents the net benefit over and above compensation for time and risk. The NPV of a project is the sum of the present values of all the cash flows. NPV recognizes the fact that a rupee earned today is worth more than a rupee tomorrow. The net present value criterion has a sound rationale underlying in it. which is either positive or negative that are expected to occur over the life of the project. NET PRESENT VALUE: N. Cost effectiveness analysis 1. which makes It’s NPV equal to zero. trail & error yield method. IRR equates the present value of future cash flows with the initial investment. The internal rate of return of a project is the discounted rate. This method takes into account the time value of money and calculates the return on investment by introducing the factor of time element.P. In the NPV calculation we assume that the discount rate is known and determine the NPV. i.e. but in the case of IRR we set the NPV equal to zero and determine the discount rate that satisfies this condition.

to the initial cash outflows of the investment. PROFITABILITY INDEX Profitability index method is used to evaluate the investment proposal. R is the rate of return. cash outflow. 3.= 0.C0 --------------C0 C0 is the initial investment and C1 is the cash outflow. A project is accepted if IRR is greater than the cost of capital and is rejected if thee IRR is less than the cost of capital. at the required rate of return.n Ct IRR = ∑ ---------. It is the ratio of the present value of cash inflows. n PI = ∑ t=1 Ct ----------(1+k)t -------------------------------59 . R= Here. t=1 (1+r)t This can also be calculated by knowing the initial investment. C1 .

BENEFIT COST RATIO: 60 . NET OPERATING BENEFITS PER UNIT OF INVESTMENT METHOD NPV/IRR methods are quite useful when project resource are unlimited. N Bt N OCt ∑ ---------..∑ -------------t=1 (1+k)t t=1 (1+k)t -----------------------------------------------------N ∑ t=1 It ---------(1+k)t PV/K = Bt = Benefits in year t OCt = Operating costs in year t It = Investment in year t 5.C0 4. When resource constraint that time Net Operating Benefit Method will use.

If the benefits are much more than the costs then the projects are desirable and if the costs are very large with the benefits meager. It is the initial investment. 6. According to the payback criterion. the projects become undesirable. PVB is the present value of the benefits. Firms using this criterion specify the maximum acceptable payback period. which converts the cash flows in to the present values. The Payback 61 . PAYBACK PERIOD: The payback period is the length of the time required to recover the initial cash outlay on the project. PVB Benefit cost ratio = ------I Where.It is of paramount importance for the finance manager to access the benefits that the firm will accrue by taking up a certain project and the costs that are involved. so this conventional technique is modified as ‘Discounted Payback Period’. The payback period does not take in to consideration the time value of money. the shorter the period of payback. If ‘n’ is the number of years that is fixed by the firm. more is the desirability of the project. the payback period less than ‘n’ is desirable and the projects with payback period exceeding ‘n’ is undesirable.

The payback period however suffers serious drawbacks. If the ARR is calculated for each year using the expected net income the following generalizations can be made: 1. 7. • It can be misleading since it ignores cash flows after the payback period. It gives equal weight to the cash flows occurring over different periods of time. ACCOUNTING RATE OF RETURN The accounting rate of return or average rate of return on investment. Between two projects. The ARR and the IRR can be the same if the depreciation schedule is equal to the economic depreciation schedule. is a measure of profitability. it will accept the project with a shorter period. It does not consider all cash flows of the project. 3. even if the excluded project generates larger cash flows after the payback period. Average income after tax 62 . which relates income to investment both measured in accounting terms.period is a popular method in practice as it is simple helps to tackle risk and focuses on liquidity. The accounting rate of return tends to understate the internal rate of return for earlier years and over state for the later years. • It is not a measure of profitability. Inflation and creative accounting tend to create a discrepancy between the accounting rate of return and internal rate of return. • It does not recognize the time value of money. 2. ARR is calculated on the basis of average income over the life of the project.

“DSCR is the annual net project cash flow after tax divide by the annual principal plus interest charges”. If the ratio exceeds 3 to 4. IRR. if this ratio exceeds 1.ARR = --------------------------------Initial investment In this method a project is accepted if the ARR is higher than the minimum rate established by the management and reject those projects which have ARR less than the minimum rate. The equity is contributed by the promoters of the project and /or by the public if the Organisation is government owned. the project would be attractive and it would be financed by venture capitalist 63 . DEBT SERVICE COVERAGE RATIO (DSCR) Projects are generally financed in a certain debt and equity ratio. 8. The various evaluation techniques like NPV. Payback etc do not give adequate ranking of the project in case it is debt financed.5 on the average for the duration of debt repayment. While the debt is financed by various financial institutes and banks. The banks/financial institutions would finance the debt portion of the project cost. This method would rank a project as number one if it has highest ARR and lowest rank would be assigned to the project with lowest ARR. The ARR can be readily calculated from the accounting data and this rule incorporates the entire stream of income in calculating the project’s profitability.

VSP has to go for expansion plans subsequently. 1. The Visakhapatnam Steel Plant has two alternatives in selecting the project.Cost Effective Analysis In the cost effectiveness analysis the project selection or technological choice. Proper project appraisal to be done for expansion projects otherwise it leads to problems. a seamless pipe mill is envisaged.3 MT 2. The management fixes the cut-off values. one can minimize the capital cost to obtain a given discount. only the costs of two or more alternative choices are considered treating the benefits as identical. In order to accomplish its vision and mission statements and to meet aspirations of the stake holders. To establish the expansion plant i.e up gradation to 6. Project Selection The selection of a project involves a large number of techniques that judge whether the project is worthwhile or not. This approach is used when the question of how to minimize the costs for undertaking an activity at a given discount rates. In case the benefits and operating costs are given. VSP will enhance the volume of production in long products segment in view of brand image. 64 . Internal rate of return and cost benefit ratio are considered. The non-discounting techniques like payback period and accounting rate of return are also considered. The discounting techniques like NPV. In order to diversify the product mix and help reduce the dependence on import of pipes in oil and gas sector. To continue with existing production capacity.

65 .


Project financing is considered right from the time of the conception of the project. The proposal of the project progresses working capital. So, in general a project is considered as a ‘mini firm’ which is a part and parcel of the Organisation. Sources of project financing

Equity capital Equity share capital Preference share capital Internal accruals

debt capital Term loans Debentures W.C advances Misc.sources

EQUITY SHARE CAPITAL:Equity shareholders are the real owners of the company whose ownership is limited only to their capital contributions unlike partnership firms and sole-trading concerns. They bear the risks of ownership and enjoy rewards accordingly. Equity share capital may be Authorized, Issued, Subscribed,Called up & paid up capital. The amount of capital that a company can issue as per its Memorandum of Association is called “Authorized capital”. The amount of share 66

capital being offered by the company to investors (public private or both) is called “Issued capital”. It may be to the full extent of or part of the Authorized capital. That part of the Subscribed capital for which the company has given a call to the investors for the payment of the share money is called “Call-up capital”. That part of the Issued capital which has been subscribed by the investors is called “Subscribed capital”. That part of the call up capital which has been paid up by the investors actually is called “Paid up capital”. The terminology used in the context of share capital is par value, issue price, book value & market value. Par value is the price of a share mentioned in the Memorandum of Association and written on the share scrip. Issue price is the price at which the share are issued. It may be equal to par or Face value or Higher than premium or lower than discount the part value. The book value of a share(Equity)is equal to Paid up equity share capital + Reserves – intangible assets Number of Outstanding equity shares Rights of Equity shareholders  Right to Income  Right to control  Pre-emptive Right  Right in liquidation Advantages of Equity capital: 1. No compulsion to pay dividends to the Equity shareholders. 2. No obligations on part of the company to redeem as equity shares have no maturity date.

3. Other things being constant, higher the equity base of the company,
higher is its credit-worthiness. 67

Disadvantages of Equity capital : 1. Public issue and private placement leads to the dilution of control of existing Equity shareholders.

2. Cost of Equity share capital is higher than that of other investors
since Equity shareholders bear the highest risk. The higher the risk, the larger the return they expect.

3. Cost of issuing Equity shares which includes brokerage,
underwriting commission etc.., is higher than that involve in issuing the securities. PREFERENCES SHARE CAPITAL: Preference shareholders get preference in the form of priority given to them while making dividend is fixed and the preference shareholders do not enjoy the voting rights on any resolution places before the company. In any year if the company is unable to pay preference dividends, The arrears will be carried forward to the next year. In the next year, cumulative preference dividend is paid. It is clear that unless the company pays the cumulative preference dividends along with the arrears the company cannot declare equity dividends. Normally preference shares are redeemed after 10 to 15 years. Advantages: 1. Company can skip preference dividend and pay in the next year. 2. Preference capital enhance the credit worthiness of the company.

3. No dilutions of control as preference shareholders do not carry any voting

4. No collateral pledge in favour of preference shareholders.

1. It is costlier sources of financing when compared to debt capital because
unlike interest payments, preference dividends are not deductible.


This source is readily available for which company need not consult either shareholders or lenders. Since depreciation is a periodic write off of a capital expenditure of an asset in beginning. Retained earnings are also known as internal Equity. internal accruals are also one form of long term sources of project financing. No need of any issue cost to be bleared 3. companies retain 30% to80% profit after tax less preference dividend. As there is skipping of dividends in one year. 2. Generally in India. it is also a long term internal sources of financing a product. it can be adversely affect the reputation of the company. retained earnings are that portion of the profit after tax minus preference dividend which is ploughed back in the company.2. INTERNAL ACCURALS: A part from equity share capital and preference share capital. Internal accruals consist of depreciation charges and retained earnings. If the company skips the dividends for three year. No dilution of control as there will not be any increase in the number of shareholders. 2. Disadvantages: 1.there is opportunity cost of capital by the way of dividends for the by equity share holders. Advantages: 1. TERM LOANS: Sources of long term project financing. it has to give voting right to the preference shareholders. If there is ploughing back of profits through retained earings. are the long term loans given by financial institutions and banks to the companies to be repayable in less than 10 69 . Limitation on the funds available by the way of internal accruals. On the other hand.

Debentures. which may be a bank or financial institution or insurance company. It is a form of debt financing. Normally in case of default of the interest and principal payments by the borrower. Term loans are generally used for financing fixed assets and long term working capital needs. Contemporary types of debentures:  Deep discount bonds  Convertible debentures  Floating rate bonds  Secured premium notes 70 . debentures are secured by mortgage on the immovable asset and a floating charge on the other assets of the company. sometimes. when compared to term loans.for the period of default on the amount of principal in default. rate of interest. In India.a. As per the companies Act if the debentures are issued. Term loans are subject to the levy of upfront fee of 1% on the loan amount sanctioned.years. The company as to pay interest and principal instalment at the specified regular times without fail. Debentures offer greater flexibility with respect to date of maturity. DEBENTURES: Debentures are the debt financing instruments issued by large companies. may have the “Call” or “put” options. Debentures may be medium term having the maturity of 1 to 5 years or long term having the maturity period of 5 to 12 years. is appointed to ensure that the company fulfils all the contractual obligations. These are the long term debt instruments having the similar features to those of ordinary debt. They differ from short term bank loans which are employed for financing short term assets and short term working capital needs. repayment etc. generally.. a trustee. Financial institutions grant Rupee term loans as well as foreign currency term loans. the borrower has to pay penalty in the form of additional interest of 2% p. Term loans are secured by first Equitable mortgage of all immovable properties or assets of the company.

3. Cost of issuing debt is lower than that of equity capital. Indexed bonds  Privately placed debentures Advantages: 1. 4. WORKING CAPITAL ADVANCES: These are the short term advances granted by commercial banks in three ways namely cash credit. purchase/ discount of bills and letter of credit. loans. Interest on debt is tax-deductible. Disadvantages: 1. The borrower is very much interest in this type of loan as he can withdraw amount as and when he requires and pays interest only on the amount he has 71 . Provides protection against high unanticipated inflation as the interest charges are once per all fixed in nominal terms. No dilution of control. 2. 2. Interest is charged only on the running balance but not on the limit sanctioned. Increase financial leverage which in turn raises the cost of Equity as per CAPM model. Debt imposes restrictions on limit of the company’s borrowings. 3. The real cost of debt will be greater than the expected value in case of low inflation. Cash credit: Cash credit is the overdraft agreement made by a bank for the purpose of borrowing by the customer. The borrower can draw the amount as often as required provided the amount does not exceed cash credit limit.

the bank of the importer pays the due amount to the exporter and later on collects the amount from the customer. Later on the purchaser pays the amount of bill to the bank on the due date. The seller.withdrawn. OTHER SOURCES: I) DEFERRED CREDIT: It is the credit provided by the supplier of materials to the buyer so that the latter can make the payment over a period of time. The seller of goods draws the bill and sends it to the purchaser for acceptance. the borrower has to pay some minimum charges irrespective of the level of borrowing.the supplier provides these facility if there is bank’s guarantee furnished by the 72 . It may be clean bill or documentary bill. On behalf of importer.Generally. They are disbursed either on demand or in periodical instalments. Once it is accepted by the purchaser. if he needs money before the maturity date encashes or discounts the bill with any commercial bank. Generally it is useful in case of foreign trade. Loans: Loans are the short term loans granted by the commercial banks and the interest is repayable on the whole loan amount sanctioned unlike cash credit agreement. it is to be received back by the seller. However for availing this facility. Purchase/discount of Bills: Discount of bills is the bill of exchange having the maturity period of 90 days. Letter of credit: Letter of credit is the form of advances granted by a bank in favour of his customer. So here the commercial banks finance the bill to the seller on behalf of the purchaser.

buyer. IV) COMMERCIAL PAPERS: These are the short term unsecured promissory notes issued by the highly credit rated companies having a very high financial strength. Commercial paper is not backed by any collateral security. the hirer gets the title of the ownership of the asset. III) HIRE PURCHASE: It is also a contractual agreement between to persons wherein one person purchase the asset and gives it on hire to the another person per some periodic payments of instalments. This type of finance is short term in nature normally. The two types of lease are available namely finance lease and operating lease. they are having the maturity period ranging from 90 to 270 days.reflecting prevailing interest rates in the market. The person who grants the right is called “Lessor” and the person who uses the asset is called “Lessee”. II) LEASE FINANCE: It is a type of debt finance wherein two persons have the contractual agreement stating that one person gives the right to use his asset/machinery to another person for periodic rental payments.the company need not register them with The Securities and Exchange Commission (SEC).the hirer follows “the sum of the years digits method” so that the total interest is allocated over the years fairly. They are usually issued at discount . The rate of interest charged by the supplier will be high. At the end of the payment of the last instalments to the hirer. Before issuing commercial papers . The instalments cover interest as well as principal. For the calculation of installments.These commercial papers can be issued for financing only current assets but not fixed assets without 73 .

On the other hand. The factor takes the responsibility on behalf the company of collection of outstanding amounts from the customers arising out of credit sales. V) FACTORING: It is the process of financing that of a companies arising from credit sales. the availability of finance from that source is certain. the client has to bear the loss in case of default by the customers. Generally. Factoring is an useful short term sources of finance. The necessity for bridge finance arises in situations where finance from particular sources is being delayed. They are zero coupon debt instruments but have higher yields than other money market instruments. in case of non-recourse factoring. It charges some commission of 1 to 2% of the face value of the debt for providing this service. SOURCES IN INTERNATIONAL MARKETS: Euro market: It is a market which is a collection of international banks that help company’s in different countries to rise capital in the global market. the risk is borne by the factor. However. BRIDGE FINANCE: This a temporary loan meant for tying up the cost of the project. 74 . factor advances around 70 to 80% of the book debt to the client company and charges a rate of interest which is typically higher than the lending rate of commercial banks. In India recourse factoring is prevalent. In case of recourse factoring.SEC’s permission. An Indian company can access Euromarkets to raise Eurocurrency or Eurobond or for issuing global depository receipts(GDRs).

Such ideas are untried before and have high risk opportunities. Export Credit Schemes: Export credit schemes have been offering by export credit agencies like USEXIM. It is the long term Finance having the maturity period. Over the past 20 years.In India. venture capital has become a very famous Financing option in most of the countries. Reliance Industries limited issued dollar-denominated bonds in the U. These agencies follow some common guide lines for giving support for exports credit schemes are of two types namely Buyer’s credit and Suppliers credit. Interest etc.S domestic capital market. Eurocurrency Loans  Eurobonds  Global Depository Receipts Foreign Domestic Markets: Companies can also raise Finance by selling securities in the domestic capital markets of foreign countries. venture capital firm appraises the 75 . So the investors interested in venture capital do not bother about the short term benefits on their investments like dividends.. if an American firm issues pound-sterling denominated equity stocks in the British capital market is the foreign domestic market for the U. For example. VENTURE CAPITAL: It is the capital provide by the institutional investors and high net worth individuals to the companies for Financing technology related innovative business ideas .JEXIM etc…These agencies are established by the central governments of major industrialized countries. the company redeems the capital to the investors along with some capital appreciation. They are very much interested in capital appreciation in the long term.S. Before Financing.

the project would be attractive and it would be financed by ventures capitalists. do not give adequate ranking of the project in case it is debt finance. internal rate of return payback etc. In order to have a proper leverage it will be necessary that the funding should be in a mix of debt and equity capital. So for the financing pattern adopted in Rhastriya Ispat Nigam Ltd (RINL) was in the debt equity ration of 1:1 as per Government 76 . if this ratio exceeds 1. If the ratio exceeds 3 to 4 . The banks financial institutions would finance the debt portion of the project cost. The various evaluation techniques like net present value.692 Crores according to the estimation made at the time of proposal of the project. Venture capital companies are subject to high degrees of risk and uncertainty. DSCR is the annual net project cash flow after-tax divide by the annual principal plus interest charges. While is financed by various financial institutes and banks.5 on the overage for the duration of debt repayment. The estimated completion cost of the project expansion is nearly 8.innovation project of the company borrower is in different angles. The equity is contributed by the promoters of the project and for by the public if the organization is government owned. Debt service coverage ratio: Project is generally financed in a certain debt and equity ratio.

b) Loan Capital: 1. 2. Providing loan by agencies that enter into an assured buy-back arrangement at the terms and condition mutually agreed upon. Guaranteed by the central Government who is the owner of RINL. Surplus credit by major supplier of plant & equipment. When the proposal for COB-4 was made in 1999 the company was in losses and the souring of funds was decided as debt and equity in the ratio 70:30. The company is in profits for the last 3 years. Induction of equity by agencies /companies who are setting up separate stand alone blast furnaces or blast furnace based steel plant complexes without captive coke oven plant. However Government has now decided not to invest heavily in steel sector. The accumulated profits upto 2005 march are approximately 77 . But now the financial position of RINL has changed. 3. a) Equity Capital: 1. Equity by overseas buyer of coke. Infusion of Government equity either from budgetary resources or from Steel Development Funds (SDF). whom may hedge initial capital invested and assured by buy-back arrangement for limited number of years. Equity by overseas suppliers of coking coal. 3. So the Government has decided that respective plant units should meet their capital funds from their own resources or from market borrowings. Loan capital from financial institutions like IDBI. 4. IFCI. ICICI etc. Considering all the above facts the RINL assumed that the debt equity to be in the ratio of 70:30.guide lines. 2.

78 . One of the highlights of the expansion is to rule out the option of going public. So the RINL has decided to meet the capital funds from their own resources. ICICI. Deutche Bank. ECB is considered as the best option to meet 50 per cent of fund requirement. privatization mode is being preferred for augmentation of captive power plant (2x67 MW capacity with all necessary facilities) under build. VSP had received a good response from about 50 banks and financial institutions for loans/debentures through an expression of interest sought on its website. Privatization HSBC. ABN Amro. 8. Punjab National Bank. EXTERNAL COMMERCIAL BORROWINGS: VSP prefers ECB route AT VISAKHA STEEL PLANT After the Centre's clearance to its expansion project at Visakhapatnam Steel Plant (VSP) has now launched an exercise to look for banks and financial institutions to increase its capacity from three million tonnes (MT) to 6. The Cabinet Committee on Economic Affairs (CCEA) okayed VSP's Rs.692 Crores project after a lot of lobbying.3 MT. The employees and the well-wishers of Rhastriya Ispat Nigam Limited — the corporate entity of VSP — view the clearance as the beginning of the good days for the country's first shore-based steel plant. IDBI and other institutions had responded to the request with offers to fund the project on liberal terms mainly due to the brand image enjoyed by VSP and the bright prospects predicted for the steel industry. SBI Caps. own and operate (BOO) scheme.4000 Crores. Moreover. According to indications. The funding requirement will be met on 50:50 basis through external commercial borrowings (ECBs) and internal accruals. As a prelude to expansion.

2.194 reported in 2003-04 was narrowed down to below Rs. The ECB route to raise funds With high GDP growth and progressive industrialization. and liberalized external commercial borrowing policies. VSP is bound to make a significant dent in both domestic and overseas market. Turning point VSP. Capital base of the company has already crossed the Rs. BOO mode will also be followed. Indian economy is the 4th largest in the world in terms of purchasing power parity and the tenth most industrialized. While foreign investment has helped in developing the industrial sector. there is a growing realization of productivity and efficiency gains. The increase in external commercial borrowing (ECB) reflects a strong investment demand domestically as well as favourable financing conditions overseas.N. the Indian market is preparing to be one of the stronger economies around the globe. It is envisaged to complete the first phase in 36 months and the second in less than four years. the Indian industry is increasingly becoming internationally competitive and is aggressively securing access to international markets on the strength of dynamic competitive advantage. Singh as the Chairman and Managing Director. The policy environment has also played an immense role in this resurgence of Indian industry.1. the importance of external commercial borrowing cannot be overlooked.000 Crores in the next fiscal. 8.For expanding the air separation plant (2x1200 t/day oxygen). In the face of free access to imports and foreign direct investment (FDI). In the industrial sector. The management is confident of achieving its designed capacity of 10 million tonnes in the coming years as per the detailed report prepared by M. Dastur and Company. 79 .000-crore mark and the accumulated loss of Rs. With its impressive track record and the launching of expansion process.N. which was facing a rough weather due to slump in the industry and the threat of getting referred to Board of Industrial Finance and Reconstruction (BIFR) could make a spectacular turnaround during the tenure of B.

Moreover corporate can raise a large amount of funds depending on the risk perception of the International market. However. foreign collaborators. However.A company is free to raise ECB from any internationally recognized source such as banks. offers from unrecognized sources are not entertained. securitized instruments (e. housing finance companies and NBFCs) are eligible to raise ECB under the automatic route. Automatic Route and Approval Route. buyers credit. NGOs engaged in micro finance activities have been permitted to raise ECB up to USD 5 million during a financial year for permitted end-use. Benefits The ECBs route provides an Indian company with the foreign currency funds that may not be available in India. financial institutions (FIs). the approval of Reserve Bank of India (RBI) or the Governments approval are not required. foreign equity-holders.4 per cent in March 2005 as compared to 38. Multi-state cooperative societies and non-governmental organizations for expansion of existing capacity as well as for fresh investment. in case of doubt regarding eligibility under the Automatic Route. applicants may take recourse to the Approval Route. ECB is a source of finance for Indian corporate. However Individuals. The external debt to GDP ratio which is an indicator of an economy’s debt servicing capability.External Commercial Borrowing External Commercial borrowing (ECB) is a term used to refer to commercial loans availed from non-resident lenders with a minimum average maturity of 3 years in the form of bank loans. suppliers credit.ECBs can be used as a borrowing means for any purpose (rupee-related expenditure as well as imports) except for investment in stock market and speculation in real estate. small and medium enterprise. export credit agencies. ECB can be accessed under two routes. suppliers of equipment.g. Corporate (registered under the Companies Act except financial intermediaries (such as banks. The maximum amount of ECB that can be raised by an eligible borrower under the Automatic Route during one financial year is USD 500 million. 80 . showed a steady improvement. Trusts and Non-Profit making Organizations are not eligible to raise ECB. Under the Automatic Route. floating rate notes and fixed rate bonds).It is noteworthy to mention that debt owed to the International Monetary Fund (IMF) was fully extinguished by 2000-01. The success of India’s debt management policy is reflected in a perceptible improvement in various external debt indicators. the cost of funds at times works out to be cheaper as compared to the cost of rupee funds and the availability of the funds from the International market is huge compared to the domestic market. dropping to 17. 1992. international capital markets etc.7 per cent in end-March.

Small and medium enterprises (SMEs) are increasingly opting for the external commercial borrowings (ECB) route to raise funds. sea port and airport industrial parks and urban infrastructure (water supply. at 81 . sanitation and sewage projects). costs low. and encourage infrastructure and export sector financing which are crucial for overall growth of the economy. Ministry of Finance.The important aspect of ECB policy is to provide flexibility in borrowings by Indian corporate. and Government of India monitors and regulates Indian firms' access to global capital markets. ECB proceeds can also be utilized for overseas direct investment in Joint Ventures / Wholly Owned overseas subsidiaries subject to the existing guidelines on Indian Direct Investment.in India. the Government has permitted NGOs to raise ECB up to US $ 5 million during a financial year. new projects. Recent Trends The department of Economic Affairs. road including bridges. they announce guidelines on policies and procedures for ECB. railways. The guiding principles for ECB Policy are to keep maturities long. at the same time maintaining prudent limits for total external borrowings. It is interesting to note that the trend of how ECB has evolved and played a greater role in the Indian economy under the surveillance of RBI and the Indian government. In its initial stages. the Government had operationalised the automatic route for fresh ECB approvals up to USD 50 million and for all refinancing of existing ECBs with effect from September 1. The ECB policy focuses on three aspects: eligibility criteria for accessing external markets. Also with a view to provide Non-Governmental Organizations (NGOs) an additional channel of resource mobilization and in order to give impetus to the micro-finance movement. the total volume of borrowings to be raised and their maturity structure as well as the end use of the funds raised. a growing trend. Those SMEs that are export-oriented find it economically more viable to raise funds overseas. Infrastructure sector is defined as power.External Commercial Borrowing can be raised only for investments such as import of capital goods (as classified by DGFT in the Foreign Trade Policy). From time to time. 2000. However. Utilization of ECB proceeds is permitted in the first stage acquisition of shares in the disinvestments process. Over the years the RBI and the Indian government have monitored ECBs in accordance with the needs of the Indian economy and laid down various policies and guidelines. modernization/expansion of existing production units in the industrial sector including small and medium enterprises and infrastructure sector . given the current rising interest scenario. telecommunication.

utilisation of ECB proceeds is not permitted in real estate. It is pertinent to note. This would facilitate corporate to undertake fresh investment or expansion of existing JV/WOS including mergers and acquisitions abroad by harnessing resources at globally competitive rates. Earlier. without any exemption. For instance on September 16. ECB policies have been modified as recently as on 21st May 2007 regarding the end-use of ECBs. the activity of the company is covered under the Automatic Route for FDI or the company has obtained Government approval for foreign equity in the company. if any. As per the extant ECB policy. allowing non-banking finance companies to raise overseas loans. Indian companies have been granted general permission for conversion of External Commercial Borrowings (ECB) into shares/ preference shares. Further. Secondly. It was also. the term real estate excluded development of integrated township as defined by Press Note 3 (2002 Series) dated January 4. ECB has indeed found its place in the Indian market and the flexibility in managing the borrowings have been facilitated by the RBI. ECB for overseas direct investment should also be in conformity with other parameters of the ECB guidelines. The government also relaxed rules for external commercial borrowings. subject to the following conditions and reporting requirements. Other important aspects being that housing finance companies. However at present. pricing of shares is as per SEBI regulations /erstwhile CCI guidelines/ in the case 82 . the exemption accorded to the 'development of integrated township' as a permissible end-use of ECB has been withdrawn. the government has continued to regulate the creation of debt from overseas. that though external commercial borrowing has been an aid to the Indian economy.present the maximum amount of ECB that can be raised by an eligible borrower under the Automatic Route during one financial year is USD 500 million. Overseas Corporate Bodies (OCBs) were derecognized as an eligible 'class of investor' under various routes / schemes available under the extant Foreign Exchange Management Regulations. In accordance with the recent master circular on foreign policy. would be allowed to issue foreign currency convertible bonds. the foreign equity after conversion of ECB into equity is within the sectoral cap. with approval from the Reserve Bank of India. Firstly. reiterated that OCBs not being recognized as investors cannot be recognized lenders. 2003. with a view to enable the Indian corporate to become a global player by facilitating their overseas direct investment. Thirdly. utilization of ECB proceeds is not permissible in real estate. 2002. permitted end-use for ECB was enlarged to include overseas direct investment in Joint Ventures (JV)/Wholly Owned Subsidiaries (WOS).

the need for compliance with the requirements prescribed under any other statute and regulation in force. both in Indian rupees and foreign currency. said.of listed/unlisted companies as the case may be. Many Indian and foreign banks have shown interest in 83 . HSBC. Of the total project cost. The proposed tenure of the debt is likely to be five years. This includes about Rs 3.750 Crores would be met from internal accruals. assistant general manager (finance).500 Crores through debt. The company needs foreign currency of about Rs 1. he added. The company has decided to expand its capacity to 6.000 Crores that VSP has invested in fixed deposits with various public banks. France’s Calyon Bank and a few others. Conclusion From April to December 2006.500 crore.250-crore expansion project of the Visakhapatnam Steel Plant (VSP) is attracting foreign banks such as Citibank. ECB flows have been close to USD 13 billion. Finally. this reflects the rise in commercial borrowing by corporate and other institutions and the liberalized policy of the Government towards borrowing from overseas source. ECB flows were USD 9 billion: a billion dollars a month and from January to March 2007. “To raise Rs 2. VSP. The company proposes to raise the remaining Rs 2.3 million tonne by 2007-08 from 3 million tonne and these banks have evinced interest in financing the project. financial institutions and other agencies to either lend or arrange the amount on their own or by way of a consortium.” G N Murty. VSP expansion plan attracts foreign banks The Rs 8. The corporate world has begun to rely on ECB as a source for raising funds and although the government needs to check arbitrage opportunities for borrowing from overseas yet it has to facilitate commercial borrowing for the growth of Indian economy.500 crore to import machinery. we have invited banks. close to Rs 5.

HSBC. Citibank. he said. VSP expects the funds to come at 5-7 per cent interest. 84 . Bank of Baroda and ICICI Bank have already submitted their proposals.500 crore on their own without any consortium.financing the entire Rs 2.” he said. Calyon Bank. Canara Bank. State Bank of India. Due to overwhelming response. “We have been getting a lot of enquiries from several foreign banks.


Funds shortage does not upset the schedule. The size and composition of your project team. Each of these major activities should be scheduled in a time frame with perfect integration showing dependencies of activities and sub activities with starting and finishing dates for each. The time required for performing various activities. For preparing the project implementation schedule the following information is needed. discussion with prospective manufactures and suppliers of equipment and material are central to an achievable schedule. When the scheduling of activities is complete by translating it into cost. 86 . budget should be prepared. List of all possible activities from project planning to commencement of production. In case of an equity issue for financing the project early discussions with the merchant bank broker and underwriter are necessary for ensuring implementation. The sequence in which various activities have to b e performed. prepare and estimate the total cost on various components of the project. Before you are able to prepare the schedule and budget you have to decide the method of implementation. They include: Design engineering procurement contacting constrictions start up and establishment of operation and maintenance. With the achievable accuracy and ascertain the probable dates of clearances necessary for starting and proceeding with the project execution.The group of activities starting from the techno economic feasibility report approval or project decision and ending with the commencement of stabilized production and maintenance would come under implementation. Equally important is the indication about the financial sanction and disbursement.

The structural work is given to Hindustan Steel & Construction Limited (HSCL). Both these companies are also public sector units. engineering work structural engineering work. The implications of putting more resources or less resource thus are normally required. The civil contract is given to Bridge & Roof (B&R).. Construction and erection of various plant units. civil. basic engineering followed by preparation of technical specification will start from zero date. constitute the various facets of project implementation programme. Coke Dray Cooling Plant . The Bridge & Roof which has taken civil engineering work will cover designing. The Government has approved the decision of Visakhapatnam Steel Plant to install the Coke Oven Battery 4 and expansion plans. The civil engineering design will be based as the norms laid down in relevant specification of Bureau of Indian Standard and National building code. The work as detailed survey.. different equipment and buildings etc. The structural work taken up by the HSCL includes steel structural designs to meet the technological requirements and general conditions of the project. The construction is expected to be completed in 36 months. road and yard construction etc.The resources normally required for performing the various activities. The approval of project implementation will be considered as zero date for the project. 1. preparation of drawing and construction of foundation for Battery proper. earthwork. The implementation work of COB-4 has been given to two companies. A project implementation schedule has been prepared and it is workout as the following consideration. technological scheme. 2. All the works will be as per 87 .

88 Projects become uneconomical resources are not available to support other projects and economic development is adversely To achieve satisfactory human relations in the project selling. affected. Sound project Organisation. Advance action. Pre-Requisites for successful project implementing. Adequate formulation. Orientation. Group Functioning. 3. a search for the causes of deviation and a commitment to check advance variances. It serves two major facts: (i) (ii) It ensures regular monitoring of performance. 4. Authority. Time and cost over runs of projects are common in the project implementation.Project Review & Control Once the project is launched. The project manager must successfully handle problems and challenges . The other systems of project management are not likely to work well. control becomes the dominant concern of the Project Manager. Motivation. 3. To these cost over runs. 2. To minimize these time and cost over runs the following precautions have to be taken. Project control involves a regular comparison of performance against targets. It motivates project personnel to strive for achieving project objectives. 2. 1. Human Aspects of Project Management A satisfactory Human relations system is essential for the successful execution of a project without such a system. relating to 1.

Judicious equipment tendering and procurement.3 MT LIQUID STEEL CAPACITIES 1. Proper implementation planning. 6. GOVT. Commencement date: 6(1) 2005-VSP dated 28th October 2005 28th October 2005 3. Timely availability of funds. Main units in expansion  Raw material handling plant 89 . HIGHLIGHTS OF EXPANSION TO 6. 5.4. of India approval ref: 2.

 One sinter plant (1x 1400 sq.  Air separation plant ( BOO basis)  Captive mines 2x1200 t /day oxygen augmentation of madharam.25 Mt / year sinter 2. 4.)  One blast furnace (BF.000 t/year 1x 67. capacities at jaggayyapeta and Garbham mines.000 t/ year 700. except the special bar mill and structural mill which are required to be commissioned in stage-II.000 t / year 300.5 MW capacity Facilities. own and operate)basis units i.e.m. i.5 MW Turbo2x 67.50Mt / year hot metal 2X500 t / day 2.000 t / year 750. For stage –II : Special bar mill—45 months structural mill----48 months 90 .3800 CUM)  Calcining and material plant (CRMP)  One steel melt shop (SMS) Rolling mills  Wire rod mill  Seamless tube plant  Special bar mill ( in stage II )  Light structural mill (LSM-IN STAGE II)  Augmentation of existing TPP generator with TB  Power plant (BOO basis) with all necessary 3. PROJECT SCHEDULE All the above facilities including BOO ( build .60Mt /year liquid steel 600. power plant and air separation plant (ASP) Will be commissioned in stage-1. For stage –I : 36 months ii.

377 total 6. case steel etc. The following is the Product Mix Proposed Wire Rods (Plain) 5.7 1. structural and semis depending on 139 mm to 366mm dia pipes.34 0. the market demand. Structural’s Seamless pipes Semis plain and round rebar’s.9 0. casing pipes. Product Mix:VSP will continue to produce long products in Phase -1 in view of Brand image and to meet the envisaged demand for long products. bearing steel. case heading quality electrode.5mm to 20mm in coils –medium and high carbon.75 1.6 0.in various grades like Liner pipes.5 2.367 5. hardening . Boiler tubes.5 6. 91 . and cold high carbon.65 0. free cutting hardening.7 0.3 0.3 1.65 1.6 0.5. Capacities of production units after expansion: The combined capacity of various production units is given below: Unit Blast furnace Steel Melt Shop(liquid steel) Wire rods Structural products Special bar mill Seamless tube mill Semis for sale Saleable steel Present capacity 4 3. cold heading quality .in coils and straight lengths –medium and electrode quality .027 2.75 0.34 Expansion 2..spring steel. Special Bars(plain) 16mm to 40mm.05 1.717 6. coupling pipes. Billets.3 0.05 0.

Capital Cost:Approved Cost Debt Component FE Component Pay back Period IRR 8. Rs.412 Year 2010: : : : : 23% Rs. Project Cost (Net of Cenvat)  Total Dividend Payments to Govt PROJECT APPRAISAL INTRODUCTION: 92 .500 2022-23 39.4346 Crores.8000 Crores. Rs. Crores 14.800 28.1477 Crores 5 Years 2 months. Financial Peaks:Details  Turnover 11  Gross Margin 23  PAT(Profit After Tax) 23  Retained Reserves 23 Up to the Year  Total Income Tax Payments(approx) 2022-23  Total Excise Duty Payments(Approx) 2022-23  Total Sales Tax payments 2022-23 9.8692 Crores (base: JUN’05) Rs.494 20224.950 17.7.361 20227.950 38.416 2022Rs.

social reasons.the new industrial policy has deregulated substantially the economy. seventeen industries which were in the nature of core industries were reserved for investment technology. expect for certain industries related to security and strategic concerns. the new policy to regulate the industrial economy was announced on 24-7-1991. the regulatory frame work that governs the selection of industries may be noted. • Abolition of industrial licensing New industrial policy 1991. heavy machinery industries and telecommunications cables. At the outset. This is to support merchant banker’s statement to SEBI . Preparation of project report and appraisal are intimately tied up. Along with the abolition of industrial licensing for new units. overriding environmental issues and manufacture of products of hazardous nature. feasibility studies and project reports are undertaken by merchant bankers and private consultants. electricity. that he has exercised due diligence in regard to claims about the viability of the project in the prospectus for issue of securities. has abolished all industrial licensing.key provisions of the policy are stated here.Project counselling and preparation of pre-investment studies. concerns related to safety.ship building. irrespective of the level of involvement. If an appraisal of the project for the purpose of public issue is made by a financial institution. a bank or one of the lead managers. REGULATORY FRAME WORK: The industrial policy of India has shifted from promoting a regulatory and protective regime to a free and market oriented environment. Dereservation of industries for public sector Since 1956. the seventeen industries included were iron and steel. the same may be relied upon to make adequate disclosures in the offer documents according to the clarification issued by SEBI on 11-10-1993. air transport . the merchant banker or consultant has to satisfy himself that the project is viable and meets the requirements of term lending institutions in case project cost is to be partly financed by borrowing from term lending institutions. At the time of preparation of project report itself. existing industries have been allowed to expand capacity according to their market 93 .

They do not require prior approval from the government for investment in the delicensed industries. human skills and new technical process evolved in the country or else where.needs without obtaining prior expansion of capacity clearance from the government of india. licensing requirements and controls on industry. project idea can be conceived either from input or output side. classified under monopolies and restrictive trade practices act 1969(MRTP ACT) had to obtain approval for their investment proposals in addition to industrial license. • Foreign investment and technology Foreign technology agreements relating to high technology and high investment in priority industries framed within certain guidelines are now automatically approved. • Removal of investment controls on large business houses Earlier large firms with assets of above rs 100 Crores. finite task to be accomplished in order to generate cash flows. the facility is available to industries which are able to finance capital equipment imports through foreign equity. The investment proposal may be for setting up a new unit. forest products. Firms are free to hire technicians and get their indigenously developed technology tested abroad. expansion or improvement of existing facilities. PROJECT IDENTIFICATION A Project is a proposal for capital investment to develop facilities to provide goods and services. a project is a specific . Input based projects are identified on the basis of information about agricultural raw materials.existing manufacturers are now free to diversify and to manufacture any article in response to market demand. Out based projects are identified on the 94 . The automatic approval is accorded to industries if payment is made without resort to free exchange resources. Now the threshold limit of assets (rs 100 Crores) has been abolished and large firms are on par with others. fishing products. The former are material based while the latter demand oriented. Foreign investment in the form of equity up to 51% is automatically approved in the high priority industries. mineral resources. The new industrial policy 1991 has eliminated entry restrictions. animal husbandry.

sophisticated. The project selection exercise should also ensure that it confirms to overall economic policy of the government.basis of needs of population as revealed by family budget studies or industrial units as found by market studies and statistics relating to imports and exports. break down of cost of capital and cash flow is prepared. after that. Prefeasibility studies give output of plant of economic size . for the purpose of screening and priority fixation. customized goods and services in international markets has added a new dimension to project concept. the study should include a lay out plan along with a list of buildings. With the opening up of economy. sales realization. Before dealing with any specific aspect. the quality and dependence of raw materials and their source of supply have to be 95 . capital input /output ratio. the growing demand for complex. The objective at this stage is to decide whether a project idea should be studied in detail and to determine the scope of further studies. choice of raw material and choice of plant size . The cost of feasibility study can be debited to project cost and can be counted as part of promoter’s contribution. services. should specify a site after necessary investigation. it should specify out put and alternative techniques of production in terms of process choice and ecology friendliness. The stages of project selection The identification of project ideas is followed by a preliminary selection stage on the basis of their technical. and power. Feasibility study is the final document in the formulation of project proposal. size and cost. a detailed feasibility study giving additional information on financing. raw material requirements. demand for sophisticated inputs is continuously rising. power and infrastructure facilities. economic and financial soundness. The findings at this stage are embodied in a prefeasibility study or opportunity study.the feasibility study after listing and describing alternative locations. the study has to identify supply sources and present estimates. costs for transportation. water supply. FEASIBILITY STUDY After ensuring that a project idea is suitable for implementation. feasibility should examine public policy with respect to industry. Further . project ideas are developed in to prefeasibility studies. The feasibility study should contain all technical and economic data that are essential for the evaluation of the project. Feasibility study can be prepared by the entrepreneur or consultants or experts. labour requirement. Project identification is a continual process. total cost of production. The quest for new combinations of factors for optimizing output and improving productivity to strengthen the competitive position of Indian industry in the international market place is an ongoing process. structures and yard facilities by type .

Selling arrangements contemplated in terms of direct sales or through distributors or dealers have to be classified. the commonly used methods of demand forecasting are trend. TECHNICAL APPRAISAL Technical appraisal is primarily concerned with the project concept covering technology. at a cost which 96 . The feasibility study is followed by project report firming up all the technical aspects such as location. Market appraisal requires a description of the product. Since cash flow projections are to be made. MARKET APPRAISAL Analysis of demand for the product proposed to be manufactured requires collection of data and preparation of estimates. scope of the market. market analysis has to be covered to help in establishing and determining economic levels of output and plant size. After collection of data . Estimation of demand requires the determination of the total demand for a product and the share that can be captured by the unit through appropriate through marketing strategies. a project report is a detailed plan of follow-up of project through various stages of implementation. capital costs and operating costs for different alternatives along with their profitability. an essential part of the feasibility study is the schedule of implementation and estimates of expenditure during construction . factory lay out specification and process techniques design. It is also necessary to identify principal customers and state particulars of any firm arrangements entered in to with them. design. the existing position has to be assessed to ascertain whether unsatisfied demand exists. possible future changes in the volume and pattern of supply and demand have to be estimated. Feasibility study should present estimates of working capital requirement to operate the unit at a viable level. possible competition from substitutes.investigated and presented in the feasibility report . Financial data should cover preliminary estimates of sales revenue. special features of the product proposed to be manufactured in regard to quality and price which would result in consumer preference for the product in relation to competitive products. Basically. Estimates have to be made about existing and future demand and supply of the products proposed to be manufactured. In a way . scope and content of the plan as well as inputs and infrastructure facilities envisaged for the project. regression and end-use methods.before presentation of the financial data. the project should be able to deliver marketable product from the resources deployed. This would help in assessing the long term prospects of the unit. its major uses.

FINANCIAL APPRAISAL Financial appraisal is concerned with assessing the feasibility of a new proposal for investment for setting up a new project or expansion of existing productive facilities. The other aspect of financial appraisal 97 . Technical appraisal has a bearing on the financial viability of the project as reflected by its ability to earn satisfactory return on the investment made and to service equity and debt.would leave a margin adequate to service the investment and plough back a reasonable amount to enable the enterprise to consolidate its position. The technical review done by the financial institutions focuses mainly on the following aspects:  Product mix  Capacity  Process of manufacture  Engineering know how and technical collaboration  Raw materials and consumables  Location and site  Building  Plant and equipments  Man power requirements  Breakeven point (The technical review is done by qualified and experienced personnel available in plant or outside experts where technologically sophisticated projects are involved). This involves an assessment of funds required to implement the project and the sources of the same.

WORKING RESULTS OF EXISTING UNITS: In case of an existing unit. Financial projections for a ten year period have also to be made. whether the borrowings raised are not out of proportion to its paid up capital and reserves.  Whether there is any inter-locking of funds with associate companies  Whether the concern has been ploughing back of profits in to the business and building up reserves.relates to estimation of operating costs and revenues.  The latest balance sheet and profit and loss account may be analyzed with a view to ascertaining. prospective liquidity and financial returns in the operating phase. for this. For the purpose of appraisal it is necessary to make estimates relating to working results of existing concerns. in case an audited balance sheet as on fairly recent date is not available. the project’s direct benefits and costs are estimated at the prevailing market prices. in appraising a project.  How the current liabilities stand in relation to current assets. it is desirable to make an assessment of its latest financial position. Further relaxation in debt equity is made in the case of capital intensive projects. It may be noted that financial appraisal is concerned with the measurement of profitability of resources invested in the project with out reference to their source. a proforma balance sheet and profit and loss statement certified by the management may be examined. whether the concern is under/over capitalized. this analysis is used to appraise the viability of the project as well as to rank projects on the basis of their profitability. 98 . A balance has to be stuck between debt and equity. a debt equity ratio of 1:1 is considered ideal but it is relaxed up to 2:1 in suitable cases. cost of the project and means of financing. purpose its latest audited balance sheet and profit and loss statement as well as the balance sheets for the last 5 years have to be analysed.  Whether the gross block has been properly depreciated and has not been shown at an inflated value.

Stock exchange listing requirements 99 .5% of project cost with a lower contribution for projects promoted by technical entrepreneurs . The norm for promoter’s contribution in the project is 22. Equity is arrived after deducting carried forward losses in the case of an existing unit. Debt –equity ratio: 1: 1 5. Debt-service coverage ratio: 1.All long term loans/ deferred credit are treated as debt while equity includes free reserves. Contribution of project cost: 30-50% 6.75 4.5 to 1. The financial appraisal seeks to assess the following:  Reasonableness of the estimate of capital cost  Reasonableness of the estimate of working results Adequacy of rate of return: The general norms for financial desirability are as follows: 1. it should be assumed that they would not be withdrawn during the currency of the loan and do not carry interest higher than that payable on institutional loans. If unsecured loans from promoter’s / director’s form an integral part of of the means of finance. Return on investment: 20-25% profit after tax 3. normally the promoters contribution should be brought in by way of equity capital. Internal rate of return :15% or 3-5% more than WACC 2.

N O PARTICU LARS Start year assumed as per budget DEBT:EQUITY YEAR1 200506 YEAR2 2006-07 YEAR3 2007-08 YEAR 4 200809 YEAR5 2009-10 YEA R6 201 0-11 TOTAL RS CR 100 . the following questions are raised:  How resourceful are the promoters?  How sound is the understanding of the project by the promoters?  How committed are the promoters? CAPITAL PHASING FOR ONGOING EXPANSION PROJECT AT VSP: S. Effective rate of protection 2. In addition to the calculation of the economic rate of return as per this approach they also look at two other economic indicators: 1. Domestic resource cost MANAGERIAL APPRAISAL In order to judge the managerial capability of the promoters.ECONOMIC APPRAISAL The economic appraisal looks at the project from the larger social point of view. The methodology by firms for the purpose of economic appraisal is labeled as “PARTIAL LITTLE MIRRLEES” approach.

00 232.00 1.CR) 7.00 464.0 0 742.00 1484.00 626.  It has been assured that the plant would operate at 90% capacity in 1st year and 100% in 2nd year after the completion of the project.07 % 5.499.00 313.00 1.20% 34. the company has allotted funds from accumulated profits since 2003.3 MT TOTAL CAPITAL COST EQUITY( RS.00 742.00 2998.13% 17.00 2968.00 76.0 0 76.48% 34.499.CR) -DEBT (RS.  Assumed time for completion of the project is 2010-2011. 00 4346 4346 8692 CONCLUSION  The Source of financing for the project expansion 6.3 MT is from external commercial borrowing and internal accruals i.A EXPANSI ON PROJECT -UP GRADATI ON TO 6..e.0 0 152.692 Crores.78 % 8692 50% 50% 313. 101 .  Total capital phasing for ongoing expansion project at VSP is 8.33% 1.0 0 1484 232.00 1484.

♦ Project management by Harvey Maylor.P.Shaghil & M. ♦ Successful projects by O. THE JOURNALS: 102 .Stall Worthy. ♦ Project planning and management by M. ♦ Total project management by P.K. appraisal. Project appraisal for ongoing expansion plan to be done intellectually and effectively. M.Pandey ♦ ‘Projects’ (preparation.W.musterque ♦ Source of finance sharma&guptha ♦ Project management (Techniques appraisal managerial issues) by E. BIBLIOGRAPHY ♦ ‘The Financial Management’ by I. Kharbanda & E. M. implementation) by Prasanna Chandra.M.A.Joy.Davis. ♦ Project management by Dennis Lock.

DCFM Cash & DGM DGM DGM AGM(F&A) Raw Materials AGM(F&A ) Budget Corp. ORGANISATION CHART – FINANCE DIRECTORATE DIRECTOR AGM(F&A) IA & SV AGM (F&A) PF & PAY AGM (F&A) Fin.♦ Steel Times.Admm.finan cia 4 RFM’S AGM(F&A) Purchase Bill DCFM Purchase Fin 103 . ♦ Iron &Steel technology.A/C AGM(F&A) Central Excise Insurance ACFM Mktg. ♦ Steel & Metallurgy. ♦ SAIL News.


Effective monitorinPHg. Element. 105 . 2.CVO ED COMM.DT 1.

106 .

107 .

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