vizag steel plant 2014 synonyms
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The document discusses the history and operations of Visakhapatnam Steel Plant (VSP) in India. It notes that VSP is one of the most advanced steel producers in India, with 80% of its income from exports. It was established in 1971 with German and Soviet technology and its products are rated highly in world markets. VSP has grown from a loss-making organization to a $3 billion company. It is expanding its production capacity to 20 million tons annually on its 33,000 acre campus.
vizag steel plant 2014 synonyms
- 1. Introduction of RINL-VSP: Visakhapatnam Steel Plant, popularly known as Vizag Steel is the most advanced steel producer in India with the help of German and soviet technology. Its products have been rated the best in the world market. Almost 80% of its income comes from the exports of steel products to Japan, Germany, United States, Singapore, Dubai, Australia, South American countries and many more. The company has grown from a loss making industry to 3 billion dollar Turnover Com- pany registering a growth of 203.6% in just 4 years. Vizag Steel Plant has been con- ferred Navratna status on 17 November 2010. Founded in 1971, the company focus- es on producing value-added steel, with 214,000 tons produced in August 2010, out of 252,000 tones total of salable steel pro- duced it is the largest single site plant in In- dia and Asia Minor (or south and East Asia combined). On 17 April 1970, the then Prime Minister of India, the late Indira Gandhi announced the government's decision in the Parliament to establish a steel plant at Visakhapatnam. Planning started by appointing site selection committee in June 1970 and subsequently the committee‘s report was approved. On 20 January 1971 Mrs. Gandhi laid the founda- tion stone of the plant. Consultants were ap- pointed in February 1971, and feasibility reports were submitted in 1972. The first block of land was taken over on 7 April 1974. M/s M.N. Dastur & Co was appointed as the consultants for preparing the detailed project report in April 1975 and in October 1977 they submitted a proposal for 3.4 Mtpa of liquid steel. With the offer for assistance from the government of the erstwhile USSR, a revised project evolved. A detailed project report for a plant with a capacity of 3.4 Mtpa was prepared by M/s M.N. Dastur & Co in November 1980. In February 1981 a con- tract was signed with the USSR for the preparation of working drawings of coke ovens, blast furnace and sinter. The blast furnace foundation was laid, with first mass concreting, in January 1982. The construc- tion of the local township was also started at the same time. In 1970's Kurupam Zamindars donated 6,000 acres of land for Vizag Steel Plant. A new company Rashtriya Ispat Nigam Lim- ited (RINL) was formed on 18 February 1982. Visakhapatnam Steel Plant was sepa- rated from SAIL and RINL was made the corporate entity of Visakhapatnam Steel Plant in April 1982. Vizag Steel Plant is the only Indian shore-based steel plant and is situated on 33,000 acres (13,000 ha), and is poised to expand to produce up to 20 MT in a single campus. Turnover in 2011-2012 was Rs 14,457 Cores. On 20 May 2009 Honorable Prime Minister Manmohan Singh launched the expansion project of Vi- sakhapatnam Steel Plant from a capacity of 3.6MT to 6.3MT at a cost of Rs. 8,692 Cores. But the investment was revised to 14,489 cores with the following classifica- tion: Expenditure for the financial year 2009-10 Rs 1840 Cores. Rs 5883 Crores since inception of the Project.
- 2. Total Commitment, including enabling works, steel procurement, Consultancy, Spares, etc. is Rs 11591 Cores as on 25.03.10. The expansion project is expected to be- come functional by 2012.It has been rated "the best place to work in India" for con- secutive five year Introduction Capital budgeting is the long term planning for making and financing proposed capital outlays (Or) Capital budgeting is concerned with plan- ning and development of available capital for purpose of maximizing the long term profitability of the concern. Objectives of the study To understood the need of organization, to identity and in high quality capital projects. To analyze the expansion of business by in- creasing production and quality by acquiring more fixed assets and the up to date machin- ery. To evaluate the financial investments asso- ciated with the replacement of existing as- sets soar the purchase of new assets Needs for the study Funds should be invested in the long term projects such as setting of an industry, pur- chase of plant & machinery etc. To analyze the proposal for expansion or creating additional capacities. To decide the replacement of permanent as- set such as building & equipment. Scope The study covers the calculation of payback period, average rate of return, net present value, profitability index, internal rate of return etc. also the study includes the deci- sions as to be made for investments process. These percentages help in analyzing the funds for investment purpose Research methodology Methodology: Research methodology im- plies a systematic attempt by the researcher to obtain knowledge about to obtain the facts and figures from employees Sources of data collection: Primary source: Interaction with the planning and development department em- ployees Interaction with finance employ- ees Secondary sources: Accounting manuals of Steel plant, broachers, magazines of unit, new of papers NPV = ∑ Cfn / (I+K)n -Co
- 3. Limitations: The period of the study is limited Financial matters are sensitive in na- ture, the same could not acquire easi- ly. It may be due to restrictions imposed by management The study was conducted with the data available and analysis was made accordingly Since the study is based on the fi- nancial data that are obtained from company’s financial statements, the limitations of financial statements shall be equally applicable. Data is collected for five projects which is limited. Data analysis & interpretationPayback period = based period+ investment - CCFAT Next CCFAT Profitability index = CFN/CO CFN = cash flow at discount rate CO= initial investment Sample 1 The first project generation is the unequal cash flows for 10 years; the initial invest- ment is Rs 5,125 lakhs 1. NPV and IRP are positive for the proposal. Then the required rate of return 17.7% 2. The profitability index is 1.22 times > 1 3. The return of investment is 43.8% Sample 2 The second project generation is the une- qual cash flow for 10 years. The initial in- vestment is 10,250 lakhs 1. The discounted PBP is 3.1 years; the investment will recover in 3 years and 1 month. 2. NPV and IRR are positive for the proposal then the required rate of re- turn 28% 3. The profitability index is 1.74 times. 4. The return of investment is 62.9% Sample 3 The third project generation is the unequal cash flows for 10 years. The initial invest- ment is Rs 4125 lakhs 1. Total investment has not been real- ized by the cash inflow. So there is no payback period (PBP) 2. NPV and IRR are negative for the proposal as a sum of pre-discounted cash inflow is less than cost of in- IRR = lower rate + inflows at lower rate - investment Inflows at lower rate – inflow at higher rate
- 4. vestment there can’t be IRR (or) IRR< 0. 3. The profitability index is 0.58 times, it is not good 4. The return of investment is 19.8% Sample 4 The fourth project generate is the unequal cash flows for 10 years. The initial invest- ment is Rs 8125 lakhs 1. The discounted PBP is 5.7 years. The investment will recover in 5 years and 7 months 2. NPV and IRR are negative for the proposal then the required rate of re- turn 10.4%. 3. The profitability index is 0.9 times, it is not good sign. 4. The return of investment is 32%. Sample 5 The fifth project generation is the unequal cash flows for 10 years. The initial invest- ment is Rs 1920 lakhs 1. Total investment has not been real- ized by cash -in-flow. So there is no payback period (PBP). 2. NPV and IRR are negative for pro- posal as a sum of pre-discounted cash-in-flow is less than cost of in- vestment there can’t be IRR or IRR<0. 3. The profitability index is 0.44 times, it is not good. 4. The return of investment is 14.78%. Conclusion & Suggestions: First project in all contexts PBP of 4.2 years, NPV, IRR, ROI and PI are positive as its return are positive sign therefore the project is accepted. Second project in all contexts PBP of 3.1 years, NPV, IRR, ROI and PI are indicating of positive sign therefore the project is ac- cepted. Third project NPV and IRR are negative for the proposal as a sum of pre discounted cash inflow is less than cost of investment there can’t be IRR (or) IRR <0. Total investment has not been realized by the cash inflow, so there no PBP. The P> I is 0.58 times, it is not a good, ROI is 20%, it indicating values so the project is required. Fourth project NPV is negative sign and IRR is 10.4%, PI is 0.9 times this is not good sign, PBP is 5.7 months, ROI is 32% the project if may increase the NPV may get profits so the project is accepted. Fifth project NPV and IRR are negative for the proposal as a sum of pre discounted cash inflow is less than cost of investment there can’t be IRR (or) IRR <0. Total investment has not been realized by the cash inflow, so there no PBP. The P> I is 0.44 times, it is not a good, ROI is 15 %, it indicating values so the project is required.