Steel Industry in IndiaSteel Industry in India is on an upswing because of the strong global and domestic demand. India's rapid economic growth and soaring demand by sectors like infrastructure, real estate and automobiles, at home and abroad, has put Indian steel industry on the global map. According to the latest report by International Iron and Steel Institute (IISI), India is the seventh largest steel producer in the world. The origin of the modern Indian steel industry can be traced back to 1953 when a contract for the construction of an integrated steelworks in Rourkela, Orissa was signed between the Indian government and the German companies Fried Krupp und Demag AG. The initial plan was an annual capacity of 500,000 tonnes, but this was subsequently raised to 1 million tonnes. The capacity of Rourkela Steel Plant (RSP), which belongs to the SAIL (Steel Authority of India Ltd.) group, is presently about 2 million tonnes. At a very early stage the former USSR and a British consortium also showed an interest in establishing a modern steel industry in India. This resulted in the Soviet-aided building of a steel mill with a capacity of 1 million tonnes in Bhilai and the British-backed construction in Durgapur of a foundry which also has a million tone Capacity. The Indian steel industry is organized in three categories i.e., main producers, other major producers and the secondary producers. The main producers and other major producers have integrated steel making facility with plant capacities over 0.5 mT and utilize iron ore and coal/gas for production of steel. The main producers are Tata Steel, SAIL, and RINL, while the other major producers are ESSAR, ISPAT and JVSL. The secondary sector is dispersed and consists of: (1) Backward linkage from about 120 sponge iron producers that use iron ore and non-coking coal, providing feedstock for steel producers; (2) Approximately 650 mini blast furnaces, electric arc furnaces, induction furnaces and energy optimizing furnaces that use iron ore, sponge iron and melting scrap to produce steel; and (3) Forward linkage with about 1,200 re-rollers that roll out semis into finished steel products for consumer use.

Structural Weaknesses of Indian Steel Industry Although India has modernised its steelmaking considerably, however, nearly 6% of its crude steel is still produced using the outdated open-hearth process. Labour productivity in India is still very low. According to an estimate crude steel output at the biggest Indian steelmaker is roughly 144 tonnes per worker per year, whereas in Western Europe the figure is around 600 tonnes. India has to do a lot of catching in the production of stainless steel, which is primarily required by the plant and equipment, pharmaceutical and chemical industries. Steel production in India is also hampered by power shortages. India is deficient in raw materials required by the steel industry. Iron ore deposits are finite and there are problems in mining sufficient amounts of it. India's hard coal deposits are of low quality. Insufficient freight capacity and transport infrastructure impediments too hamper the growth of Indian steel industry.Strengths of Indian Steel Industry Mature production base Positive stimuli from construction industry Booming automobile industryOutlookThe outlook for Indian steel industry is very bright. India's lower wages and favourable energy prices will continue to promise substantial cost advantages compared to production facilities in (Western) Europe or the US. It is also expected that steel industry will undergo a process of consolidation since industry players are engaged in an unfettered rush for scale. This is evident from the recent acquisition of Corus by Tata. The deployment of modern production systems is also enabling Indian steel companies to improve the quality of their steel products and thus enhance their export prospects.Steel Authority of India Limited (SAIL) is one of the largest state-owned steel-making company based in New Delhi, India and one of the top steel makers in World. With a turnover of 48681crore (US$8.9billion), the company is among the top five highest profit earning corporates of the country. It is a public sector undertaking which trades publicly in the market is largely owned by Government of India and acts like an operating company. Incorporated on January 24, 1973, SAIL has more than 1 lakh employees. During 2010-11, the manpower of SAIL reached a level of 110794 (as on 31.3.2011) from 116950 (as on 1.4.2010) The company's current chairman is C.S Verma. With an annual production of 13.5 million metric tons, SAIL is the 14th largest steel producer in the world

Steel Authority of India Limited

TypeState-owned enterprisePublic

Traded asNSE:SAILLSE:SAUD

IndustrySteel

Founded1954

HeadquartersNew Delhi, India[1]

Key peopleChandra Shekhar Verma (Chairman)

ProductsSteel, flat steel products, long steel products, wire products, plates

Revenue48681crore (US$8.9billion) (2012) [2]

Net income3542crore (US$650million) (2012)[2]

Total assets20425crore (US$3.7billion) (2011)

Employees131,910 (2006)

Websitewww.sail.co.in

History 1959-1978 SAIL traces its origin to the Hindustan Steel Limited (HSL) which was set up on January 19, 1954. HSL was initially designed to manage only one plant that was coming up at Rourkela.For Bhilai and Durgapur Steel Plants, the preliminary work was done by the Iron and Steel Ministry. From April 1957, the supervision and control of these two steel plants were also transferred to Hindustan Steel. The registered office was originally in New Delhi. It moved to Calcutta in July 1956, and ultimately to Ranchi in December 1959.A new steel company, Bokaro Steel Limited (Bokaro Steel Plant), was incorporated in January 1964 to construct and operate the steel plant at Bokaro. The 1 MT phases of Bhilai and Rourkela Steel Plants were completed by the end of December 1961. The 1 MT phase of Durgapur Steel Plant was completed in January 1962 after commissioning of the Wheel and Axle plant. The crude steel production of HSL went up from 1.58 MT (195960) to 1.6 MT. The second phase of Bhilai Steel Plant was completed in September 1967 after commissioning of the Wire Rod Mill. The last unit of the 1.8 MT phase of Rourkela - the Tandem Mill - was commissioned in February 1968, and the 1.6 MT stage of Durgapur Steel Plant was completed in August 1969 after commissioning of the Furnace in SMS. Thus, with the completion of the 2.5 MT stage at Bhilai, 1.8 MT at Rourkela and 1.6 MT at Durgapur, the total crude steel production capacity of HSL was raised to 3.7 MT in 1968-69 and subsequently to 4MT in 1972-73.[citation needed] IISCO was taken over as a subsidiary in 1978 and later merged in 2006.

Major Units SAIL Integrated Steel Plants1. Rourkela Steel Plant (RSP) in Odisha set up with German collaboration (The first integrated steel plant in the Public Sector in India, 1959)2. Bhilai Steel Plant (BSP) in Chhattisgarh set up with Soviet collaboration (1959)3. Durgapur Steel Plant (DSP) at Durgapur, West Bengal set up with British collaboration (1965)4. Bokaro Steel Plant (BSL) in Jharkhand (1965) set up with Soviet collaboration (The Plant is hailed as the countrys first Swadeshi steel plant, built with maximum indigenous content in terms of equipment, material and know-how)5. IISCO Steel Plant (ISP) at Burnpur (near Asansol), West BengalSpecial Steel Plants1. Steel Authority of India Limited (SAIL), Kanpur, Uttar Pradesh2. Alloy Steels Plants (ASP), Durgapur, West Bengal3. Salem Steel Plant (SSP), Tamil Nadu4. Visvesvaraya Iron and Steel Limited (VISL), at Bhadravathi, KarnatakaFerro Alloy Plant1. Chandrapur Ferro Alloy Plant (CFP) in MaharashtraCentral Units 1. Centre for Engineering and Technology2. Research and development centre for iron and steel3. Management Training Institute4. SAIL safety organization

5. Raw materials division6. Central Marketing Organization7. SAIL consultancy organizatio

INDIAN STEEL PRODUCTIONThe Indian steel industry have entered into a new development stage from 2005-06, riding high on the resurgent economy and rising demand for steel. Rapid rise in production has resulted in India becoming the 7th largest producer of steel. Indias steel consumption will continue to grow at nearly 16% rate annually, till 2012, fuelled by demand for construction projects worth US$ 1 trillion.The National Steel Policy has envisaged steel production to reach 110 million tonnes by 2019-20. However, based on the assessment of the current ongoing projects, both in greenfield and brownfield, Ministry of Steel has projected that the steel capacity in the county is likely to be 124.06 million tonnes by 2011-12.Production Steel industry was relicensed and decontrolled in 1991 & 1992 respectively. Today, India is the 7th largest crude steel producer of steel in the world. In 2008-09, production of Finished (Carbon) Steel was 59.02 million tones. Production of Pig Iron in 2008-09 was 5.299 Million Tons. Last 5 year's production of pig iron and finished (carbon) steel is given below:(in million tons)

Category2004-052005-062006-072007-082008-09

Pig Iron3.2284.6954.9935.3145.289

Finished Carbon Steel40.05544.54455.41658.23359.02

Imports of Iron & Steel Iron & Steel are freely importable as per the extant policy. Last five years import of Finished (Carbon) Steel is given below:-

YearQty. (In Million Tons)

2004-20052.109

2005-20063.850

2006-2007(Partly estimated)4.436

2007-086.581

2008-2009(Partly estimated)5.149

Exports of Iron & SteelExports (Qty. in Million Tonnes)

YearFinished (Carbon) SteelPig Iron

2004-20054.3810.393

2005-20064.4780.440

2006-2007(Prov.estimated)4.7500.350

2007-20084.6270.560

2008-2009(Prov.estimated)3.4820.350

India has also emerged as the largest sponge iron/direct reduced iron (DRI) producing country in the world in 2010, a rank it has held on since 2002. Sponge iron production grew at a CAGR of 11 per cent to reach a level of 20.74 million tonne (MT) in 2009-10 as compared to 14.83 MT in 2005-06. India is expected to become the second largest producer of steel in the world by 2015-16, on account of growing steel demand, rich resources base of iron ore, skilled manpower and vast experience of steel making and the huge capacity expansion planned and being executed in the steel sector. India has recorded a growth of over 8.6 per cent, producing 6.35 MT of steel in March 2011 as against 5.85 MT in the corresponding month in 2010, according to World Steel Association (WSA).Steel exports has increased by 17.3 per cent as it reached an estimated 2.46 MT, while steel imports were at an estimated 5.36 MT, a growth of 2.8 per cent in 2010. Crude steel production was registered at 51.57 MT during April-Dec 2010 in the country as per Joint Plant Committee (JPC). The production is expected to be nearly 110 MT by 2012-13.

The steel industry in India is likely to receive huge domestic and foreign investments. Posco, South Korea, plans to set up a 12 MT integrated steel plant in Orissa. Mittal Group's announced plans to set up their 12 MT integrated steel unit in Orissa. Bhilai Steel Plant (BSP), the flagship entity of the Steel Authority of India Limited (SAIL), has secured a fresh order of exporting rails to Sri Lanka. The order of about 14,000 tonnes is for the UIC-60 grade of rails. Earlier, the company had received an order to supply 6,500 tonnes of rails to Sri Lanka. Tata Steel Ltd (TSL) and Nippon Steel Corporation (NSC) have signed a joint venture (JV) agreement to setup India's first continuous annealing and processing line (CAPL) for the production of 600,000 tonnes per annum of automotive cold-rolled steel at Jamshedpur, India. The project will be set up at a capital cost of approximately US$ 509.08 million and is expected to come on stream in 2013.

SAIL INTRODUCTIONSteel industry has a major role to play in the economic growth of India. With new global acquisitions by Indian steel giants, setting up of new state-of-the-art steel mills, modernization of existing plants, improving energy efficiency and backward integration into global raw material sources, India is now on the centre of the global steel map. Consumption of steel in the construction sector, industrial applications, and transport sector has been on the rise and special steel usage in engineering industries such as power generation, petrochemicals and fertilizer industry as well as defense sector is also growing. Steel Authority of India Limited (SAIL) (NSE:SAIL, LSE:SAUD is one of the largest state-owned steel makers in India. With a turnover of 48,681 crore (US$ 0.81 billion), the company is among the top five highest profit earning corporate of the country. It is a public sector undertaking which trades publicly in the market is largely owned by Government of India and acts like an operating company. Major plants owned by SAIL are located at Bhilai, Bokaro, Durgapur, Rourkela, Burnpur (near Asansol) and Salem.Any transaction in foreign Exchange is governed by Foreign Exchange Management ACT 1999. The FERA had its origin by defense of India rules (DIR) 1935. This control was exercised in order to ensure the foreign exchange particularly due to severe constraints on exchange reserve due to Second World War. Later this act modified with certain amendments in 1973 and become effective from 01.01.1974. Further relaxation of this affect was effected since 1994. The same was repealed from 1st June, 2000 and all foreign exchange transactions from this date will be governed by the provisions of the Foreign Exchange Management Act 1999.As per the foreign exchange Management Act 1999 the Reserve Bank of India principally controls the movement of the Foreign Exchange of the country in compliance with the provisions of this act and any rules, regulations, notification or directions made there under give to the authorized person any direction in regard to making of payment or the doing or desist from doing any act relating to foreign security. Import and Export is the major part of forex management, as goods along with the abroad currency in being transacted. Joint VenturesNTPC SAIL Power Company Limited (NSPCL)A 50:50 joint venture between Steel Authority of India Ltd. (SAIL) and National Thermal Power Corporation Ltd. (NTPC Ltd.); manages the captive power plants at Rourkela, Durgapur and Bhilai with a combined capacity of 314 megawatts (MW). It has installed additional capacity by implementation of 500 MW (2 x 250 MW Units) power plant at Bhilai. The commercial generation of 1st Unit has commenced in April'2009 and the 2nd Unit in October 2009 NSPCL, Rourkela NSPCL, Durgapur NSPCL, BhilaiBokaro Power Supply Company Pvt. Limited (BPSCL)This 50:50 joint venture between SAIL and the Damodar Valley Corporation formed in January 2002 is managing the 302-MW power generating station and 660 tonnes per hour steam generation facilities at Bokaro Steel Plant. BPSCL has proposed to expand its capacity by installing 2x250 MW coal based thermal unit at Bokaro. In addition, construction activities are underway for installation of 9th Boiler (300T/Hr) & 36 MW Back Pressure Turbo Generator (BPTG) project at Bokaro.mjunction services limitedmjunction services limited operating in Information Technology and the Internet, is a 50:50 venture promoted by SAIL and TATA Steel. Founded in February 2001, it is today not only India's largest eCommerce company (having eTransacted worth over Rs.90,000 crores till date) but also runs the world's largest eMarketplace for steel.m Business volume of the company in terms of Transaction Value has soared from Rs 94.35 crores in FY'02 to Rs 24,854 crores in FY 11, registering a spectacular CAGR of 86%. mjunction's growth has not only been in terms of transactional value, revenue and profits. In the space of just 10 years, it has established offices at 12 locations across the country.Today, mjunction offers a wide range of eSelling, eSourcing, eFinance and eKnowledge services across diverse industry verticals that empower businesses with greater process efficiencies. mjunction has service offerings spanning the entire eCommerce spectrum and operates through - .metaljunction.com, buyjunction.in, coaljunction.in, autojunction.in, straightline.in, financejunction. in, valuejunction.in, and mjunctionedge. mjunction is an ISO 9001:2008, ISO 27001 and CMMI Level 3.certified company.SAIL-Bansal Service Center LtdSAIL has formed a joint venture with BMW industries Ltd. on 40:60 basis to promote a service centre at Bokaro with the objective of adding value to steel.Bhilai JP Cement LtdSAIL has incorporated a joint venture company with M/s Jaiprakash Associates Ltd to set up a 2.2 MT slag based cement plant at Bhilai. The company shall commence cement production at Bhilai by March'2010, whereas clinker production at Satna shall start within 2009.

Bokaro JP Cement LtdSAIL has incorporated another joint venture company with M/s JaiPrakash Associates Ltd to set up a 2.1 MT cement plant at Bokaro utilizing slag from BSL. The project implementation is under progress with commencement of cement production likely by july 2011SAIL&MOIL Ferro Alloys (Pvt.) LimitedSAIL has incorporated a joint venture company with Manganese Ore (India) Ltd on 50:50 basis to produce ferro-manganese and silico-manganese required for production of steel..S&T Mining Company Pvt. LtdSAIL has incorporated a joint venture company with TATA Steel for joint acquisition & development of coal blocks/mines. New indigenous opportunities for coking coal development are being explored by the Joint Venture company for securing coking coal supplies.

International Coal Ventures Private LimitedInternational Coal Ventures Private Limited is a special purpose vehicle set up to achieve the target of making steel PSUs self-reliant in the area of coking coal, a joint venture company has been incorporated composed of five central PSU companies i.e. SAIL, Rashtriva Ispat Nigam Limited (RINL), Coal India Limited and other target countries.Development of Hajigak iron ore mines in AfghanistanA consortium comprisng state-owned NMDC and RINL and private sector steel players JSW, JSW Ispat, Jindal Steel and Power, and Monnet Ispat and Energy and led by SAIL, plan to invest $75 million in first phase for the development of Hajigak iron ore mines in Afghanistan. The consortium, in November 2011, had won the mining rights for three iron ore mines which are said to contain 1.28 billion tonnes of rich reserves.L11Development of mines through outsourcingSAIL has decided to outsource development of two virgin iron ore mines at Rowghat in Chhatisgarh and China in Jharkhand with an annual capacity of 14 Million Tonnes and 15 Million Tonnes, respectively. The development of each mine is likely to cost between Rs. 1,000- 1,200 crore.12-1Ownership and ManagementThe Government of India owns about 86% of SAIL's equity and retains voting control of the Company. However, SAIL, by virtue of its Maharatna status, enjoys significant operational and financial autonomy.Mr. Chandra Shekar Verma is the current chairman of SAIL, taking charge of the.office on June 11, 2010. Prior to this, he was the director of Bharat Heavy electricals Limited (BHEL). Mr. Verma is a fellow member of the Institute of Company Secretaries of India (FCS) and of the Institute of Cost & Works Accountants of India (FTC WA). He is a Commerce post-graduate with a Master's degree in Business Administration and Bachelor's degree in Law & Legislatures. Awards received by him during his career are plenty, some of wihhc include 'Best CFO Award' of CNBC-TV 18 in the infrastructure sector for the year 2008-09 and 'Top Rankers Excellence Award for Best Professional' for the year 2008.Other Board members include Shri S Machendranathan (Additional Secretary & Financial Adviser to the Government of India), Prof. Deepak Nayyar, Shri AK Goswami, Dr. Jagdish Khattar, Prof. Subrata Chaudhuri, Shri Shuman Mukherjee, Shri PC Jha, Shri PK Sengupta, Shri Upendra Prasad Singh, Shri Anil Kumar Chaudhary, Dr. Isher Judge Ahluwalia, Shri Sujit Banerjee, Shri Arun Kumar Srivastava, Shri SS Mohanty, Shri HS Pati and Shri TS Suresh (as on May, 2012).Achievementsm Quality Summit New York Gold Trophy 2007 (International Award for Excellence & Business Prestige) and Award of Excellence Maintenance for Sumitomo Heavy Industry & TSUBKIMOTO-KOGIO, Japan won by Alloy Steel Plant, Durgapur. SAIL was featured in the 2008 list of Forbes Global 2000 companies at position 647.121 Golden Peacock Award for Combating Climate Change 2008 for BSP, Occupational Health and Safety- 2008 for BSL National Safety Award to Bhilai Steel Plant announced by the Ministry of Labour & Employment, Government of India - 2008 Durgapur Steel Plant won the 2nd Prize in the Association of Business Communicators of India Awards - 2008. Ispat Bhasha Bharati. the Rajbhasha Journal of SAIL has been awarded with the first prize under the All India House Journal Award Scheme - 2008-09 Salem Steel Plant received the prestigious Greentech Gold Award in Metal and Mining Sector - 2008-09. Golden Peacock Award for Corporate Social Responsibility won by Bbilai Steel Plant (BSP) for the third year in a row - 2009. Rourkela Steel Plant bagged the prestigious Srishti Good Green Governance (G-Cube) Award - 2009. Greentech HR Excellence Award bagged by Durgapur Steel Plant 2009 The steel township of Rourkela Steel Plant (RSP) has been ranked 14th in sanitation and cleanliness by Union Urban Development Ministry - 2009-10 Greentech Safety Gold Award was bagged by Bhilai Steel Plant 2010 The HR Excellence Award by the Greentech Foundation won by Bhilai Steel Plant 2010 SSP has won the prestigious Greentech Silver Award in Training Category of Greentech FIR Excellence Awards - 2010. Award for financial and operational strength by Indian Institute of Industrial Engineering (IIIE)- 2009-10 Golden Peacock Environment Management Award 2011 Randstad Award for HR Practices and Employer Branding under 'Manufacturing Industries' category 2011 Maiden Wockhardt Shining Star CSR Award in the Iron & Steel Sector category - 2011. Salem Steel Plant (SSP) has won the prestigious National Sustainability Award for the 6th time in succession and 13th time since inception of the award from Indian Institute of Metals (JIM)- 2011 Of the 33 Prime Minister's Shram Awards announced for 2010 by the Ministry of Labour, Government of India, 17 of which went to PSUs, SAIL employees bagged 11 awards. Of the total number of 76 awardees for the year, 45 belong to SAIL - a remarkable distinction for any organisation. Maharatna SAIL has received the prestigious Golden Peacock Environment Management Award for the year 2011. The award, in recognition of SAIL's initiatives and achievements in the field of environment management, was presented by Union Minister for Home Affairs Shri P. Chidambaram on 24 June 201174 of a total of 128 awardees who have won the prestigious Vishwakanna Rashtriya Puraskar (VRP) are from SAIL. The 15 out of 28 awards won by SAIL went to our 74 employees for the performance year 2008. Bhilai Steel Plant won 7 such awards involving 36 employees, Bokaro Steel Plant won 6 awards involving 29 employees. Durgapur Steel Plant and Salem Steel Plant both won 1 award each involving five and four employees respectively. SAIL employees have bagged 4 out of 5 awards of Class A, which is the highest number of A ClaSs awards won by any PSU in India.The India's union minister of steel, Mr Beni Prasad Verma has said that the Steel Industry in India which contributes over 2% to the GDP is expected to become the 2nd largest producer of crude steel in the world by 20l5Future PlansSAIL, is in the process of modernizing and expanding its production units, raw material resources and other facilities to maintain its dominant position in the Indian steel market. The aim is to increase the production capacity from the base level production of 14.6 MTPA (2006 07) to 26.2 MTPA of Hot Metal.The following table shows the increased production of various items prior to and post expansion.ItemActual Production Capacity Production Capacity after Expansion Hot Metal14.6 Mtpa26.2 Mtpa Crude Steel 13.5 Mtpa 24.6 Mtpa Saleable Steel 12.6 Mtpa 23.1 MtpaOn the 25th of May, 2012, Steel Authority of India entered into an Memorandum of Understanding with the West Bengal government and Burn Standard Company Ltd for setting up of a railway Wagon factory of approximately Rs. 2100 crore. This project will create an approximate of 75300 jobs

About Bokaro Steel Plant

TypeState-owned enterprisepublic company

Traded asNSE:SAIL

IndustrySteel

Founded1964

HeadquartersBokaro, Jharkhand, India

ProductsHot Rolled & Cold Rolled

Bokaro Steel Plant is located in the Bokaro district of Jharkhand. It is the fourth integrated public sector steel plant in India built with Soviet help. It was incorporated as a limited company in 1964.[1] It was later merged with the state-owned Steel Authority of India Limited (SAIL).[2]

Formerly it was known as Bokaro Steel Limited (BSL). Bokaro Steel Plant is hailed as India's first Swadeshi movement steel plant. Its first blast furnace was started on 2 October 1972.Currently it houses five blast furnaces with a total capacity to produce 4.5 MT of liquid steel. The plant is undergoing a mass modernisation drive after which its output capacity is expected to cross 10 MT. The first shop of Bokaro Steel Plant got the ISO 9001 certification way back in 1994, and its SAIL JYOTI products enjoy a loyal market.The plant's yearly profit stood at 11.2billion (US$200million) for the financial year 200304 and has increased every year since then reaching to 84.26billion INR in the financial year 200708.

Environment management As a responsible corporate citizen, BSL has taken effective measures in the area of pollution control in By-Product Coke Oven Batteries, Battery No: 1 & 2. BSL has taken adequate steps to check emissions from Coke Ovens and has installed Air cooled self-sealing doors resulting in significant reduction in door emissions; Doors designed, manufactured and supplied by Simpex Castings Ltd, Bhilai India.

COMPANY HISTORYBOKARO STEEL PLANTFormerly there was a village named Maraphari deep in the jungles of Chota Nagpur. The closest village cluster was Chas. Purulia was the closest town and the area was ruled by the Maharaja of Kashipur. Folklore has it that this area came under Mughal rule by the conquests of Man Singh. The region was named ManBhoom after him (VeerBhoom and SinghBhoom are the neighbouring regions also named after him, Veer Man Singh).This remote place came into prominence when Pt. Jawaharlal Nehru planned to build the first swadeshi steel plant with the help of the Soviets. The proximity to coal, iron ore, manganese, and other raw materials had helped in the selection of this place. The steel plant was incorporated as a limited company on 24 January 1964, and was later merged with SAIL and came to be known as Bokaro Steel Limited (BSL). The late 1960s and early 1970s saw heavy construction of the steel plant as well as the township. The first blast furnace started on 2 October 1972.The Sector III and Camps I and II were the first to come in the township followed by Sectors II, IX, IV and so on. The first private school came in the form of St. Xavier's School which the Jesuits from Hazaribagh built on invitation from the BSL management. The 1980s saw rapid development of the township with new sectors, schools, parks, zoos and other public amenities. Township development ceased with the completion of IV/F and IV/G. In all Bokaro Steel City consists of 12 sectors (sectors VII and X do not exist).The late 1990s saw sprucing up of the City Park and creation of islands, new schools and the success of Bokaro's students in all India level competition exams, specially IITs. During this period Bokaro also emerged as the eastern hub for academics. Bokaro has a cosmopolitan culture as the population consists of people from all parts of India.Bokaro is located in the eastern part of India at 23.29N 86.09E[3]It is located in picturesque surroundings on the southern bank of river Damodar with Garga, one of its tributaries meandering along the southern and eastern outskirts of the city. On the north, the city is flanked by the high ranges of the Parasnath Hills and on the south just beyond the river Garga, it is enveloped by the Satanpur hillocks.Two cooling ponds have been built for use in steel making. A dam on river Garga has been built to supply water to the township as well as the steel plant, but due to ever increasing demand Tenughat dam is supplementing it.

Patna, Gorakhpur

Ramgarh, HazaribaghDhanbad, Asansol

Bokaro Steel City

Ranchi, Bhubaneshwar

Demographics As of 2011 India census, under the urban agglomeration of Bokaro Steel City had a population of 563,417[4] making it the 66th largest Urban agglomeration 87th largest city in India and fourth largest city in Jharkhand . Males constitute 53% of the population and females 47%. Bokaro Steel City has an average literacy rate of 84.87%, higher than the national average of 74%, with male literacy of 93% and female literacy of 79%.See also: List of cities in JharkhandEconomy The city gets its name from the Bokaro Steel Plant (BSL) which lies at the core of its economy. It's well aided by the new steel mill Electrosteel Castings Limited and power plants like Bokaro Power Supply Corporation Private Limited, a joint venture of Damodar Valley Corporation and BSL. Some big corporates are also setting up there industries here, such as - ArcelorMittal 12ml/t steel plant, Posco 3ml/t steel plant and SAIL greenfield steel plant of 12 ml/t are coming soon around the city. In the next five Bokaro alone contribute half of the steel production of the country. Apart from steel plants there are a Jaypee Cement Plant of 2.1 ml/t and a power plant of 1000 MW is also coming up.Being an industrial area, agriculture has taken a back seat and is nothing worth mentioning except small amounts of paddy grown on the fringes of the city by the villagers.

SAIL

Bokaro steel plantThe economy of the Steel City is heavily depended on the steel plant which is the primary source of income for the employees. After the 2001 downturn, steel prices hardened due to a huge rise in consumption by China and India. This resulted in large profits by SAIL which crossed a record Rs 6000 crores (USD 1.3 Bn)[5] by the end of FY' 06. It has maintained its profitability since then with a slight dip to Rs 4900 crores (USD 1 Bn)[6] in 2011 due to unfavorable economic conditions of 2011.Electrosteel Castings Limited A Kolkata based water pipe manufacturer acquired 2,500 acres (10km2) of land 18km from the city and has started its erection of its 2.2 MTPA steel plant. The company has invested close to Rs 80 Bn (USD 1.6 Bn) on this project which is operational from 2010.[7][8] It is located near at Asanbani village under Sabra Panchayat.Bokaro Jaypee Cement Limited Bokaro Jaypee Cement Limited (BOJCL), the second joint venture between the Jaypee group and SAIL with management control vested in the Company, is incorporated to set up a 2.1 MTPA capacity cement plant at Bokaro Steel City.[9]Bokaro Power Supply Co Pvt. Ltd. Bokaro Power Supply Co Pvt. Ltd. (BPSCL) came into being on 18.9.2001 under Companies Act 1956 as a part of Steel Authority Of India Limited(SAIL) Business Reconstruction and Restructuring Plan and with intent to strengthen its core business activity (i.e. steel manufacturing). SAIL has assigned its entire business as a going concern pertaining to the Capacity of steam generation 660 T/hr. of BSL by the deed of transfer and assignment of business.BPSCL become a joint venture of SAIL and Domodar Valley Corporation (DVC) on acquisition of shares by DVC. DVC and SAIL agreed to participate in the equity share of BPSCL in 50:50 ratio.BIADA The primary economy is supplemented by BIADA governing four districts Bokaro, Dhanbad, Giridih and Koderma situated in Balidih area of Bokaro beside NH-23. It has a wide manufacturing environment having more than 170 square k.m and constitutes more than 500 S.S.I and large manufacturing enterprises. It manufactures a lot of industrial components for small and medium scale industries.Upcoming projects Bokaro Steel Plant Modernisation[10] and extend its capacity from 4.5 MT to 7.5 MT before 2011. In the same way, further plan for SAIL to extend BSL capacity to 17 MT before 2020. Apart from this a SAIL Greenfield steel plant is planned to set up before 2015, capacity of 5 MT. So before 2020 BSL total capacity goes up to 22 MT, approximately double the present capacity (13 MT) of SAIL all Steel Plants. ArcelorMittal[11][12] Steel giant ArcelorMittal is looking to set up a 12 million tonne greenfield plant in Bokaro. The company is now looking for 8,000 acres (32km2) of land but primarily take 2,500-acre (10km2) of land at Petarwar/Kasmar (in Bokaro district) just 20km from City, nearby on NH-23. The company has been allocated 32-35 million cubic meter of water to be drawn from the Tenughat dam. In another move ArcelorMittal are to use the spare land of SAIL by establishing a new steel plant of 3-4 ml/ton capacity of 50:50 JV with PSU in BSL premises itself by the investment of $2.7 billion. Tata Steel[13]- Tata Steel wants to set up a steel plant with a capacity of 2-3 million tonnes at an investment of up to Rs. 14,000 crore in Bokaro along with SAIL. The jointly owned plant is proposed to come up on a 1,000-acre (4.0km2) plot of land that belongs to SAIL. SAIL-POSCO JV Steel Plant steel minister Sri Virbhadra Singh has announced another new steel plant for Bokaro as part of a joint venture with Posco and SAIL by using FINEX technologies for high quality steel. The capacity of the plant will be 1.5 mt, establish in BSP periphery of 500 acres (2.0km2).[14] Monnet Ispat & Energy Ltd[15][16][17] Monnet, which signed an MoU on February 5, 2003, has identified 1,300 acres (5.3km2) for its project. Monnet Ispat will invest over Rs 14,000 crore for the project and is also building a 280-mW power plant. DVC and SAIL[18] has a joint venture of 50:50 to extend the capacity of Bokaro power plant from 500 MW to 1000 MW. ONGC[19] has started exploring Methane Gas for Commercial use from Parbhatpur (10km from Bokaro). SEZ: Jharkhand government's second SEZ after Jamshedpur is planned to set up in BIADA in 500 acres (2.0km2) land. Software Technology Park[20]- Buoyed by the success of the software technology park (STPI) in the state capital, the government is planning to set up two more STPIs one in Jamshedpur and the other in Bokaro. The Bokaro Industrial Area Development Authority (Biada) to make land available for the projects. It has suggested availability of land in the Balidih industrial area, where the ancillary units of Bokaro steel plant are housed.

Markets

Classic and idbi, City centre

City centre market,sec.4

Harshvardhan PlazaThe primary economy is supported by the services sector. The city market situated at the center of the city in Sector 4 has shops selling computer hardware and has computer training institutes, making Bokaro a hub of computer studies for the region. The old Chas bazaar still remains a cheap wholesale market, and dundi baag is one of the biggest vegetable markets in the region. Besides these, each sector has its own small shopping center catering to the day to day needs of the people. Chas is the wholesale market of district. Dhundibag is the wholesale market for vegetables/crockery and local and traditional utensils. Cooperative colony medical store, beauty parlour. Sector-9 market is the centre market of sector 9, located northward of city. Sector-8 (Rai Chowk) Market is the centre market of sector 8, located 5km from the city centre. Sector-6 market is the centre market of sector 6, located 4km from the city centre. Laxmi Market - located just 1km from City Centre is famous for fruits and non veg items. Sector-12 Market is the centre market of sector 12, located 6km from the city centre. Sector-3 Market is the centre market of sector 3, located 1km from the city centre. Sector-5 Market is the centre market of sector 5, located 3km from the city centre. Kurmidih Market is the centre market of Bokaro industrial area Balidih, located near NH-23 (next to railway station) Ramdih More Market is located very near to sector 9 & approx 6km from city centre;it is wholesale market for food & groceries.Malls and multiplexes The Bokaro administration has taken a step to turn Bokaro into a shopping hub for the region. An anti-encroachment drive has been launched in the steel city to make way for malls and multiplexes. The BSL administration has prepared a blueprint to develop shopping destinations and multiple-screen theaters.To give an improved look to the city for the residents, and in a move to turn in into model township, Bokaor steel bosses decided to build more shopping complexes, malls and multiplexes in sector IV, sector V, sector XI and in vacant lands behind the residences of Deputy Commissioner and Inspector General of the coal belt.Entertainment Projects The Bokaro Mall - With a cost of Rs 40 crore, The Bokaro Mall-cum-multiplex will soon come up in the heart of the city. The new mall will be established in the 2 acres (8,100 m2) of land with Three Screens of Fame Multiplex, Big Bazaar, Restaurants, Food Court, Club with facilities of sauna bath, steam bath, gym and swimming pool. J P Agarwal one of the best architects in Eastern India has designed the multiplex which may open in 2012. Eyelex multiplex is also one of the upcoming multiplex project in bokaro.Raw Materials & Material Handling PlantThe Raw Materials and Material Handling Plant receives, blends, stores and supplies different raw materials to Blast Furnace, Sinter Plant and Refractory Materials Plant as per their requirements. It also maintains a buffer stock to take care of any supply interruptions.Some 9 MT of different raw materials viz. Iron ore fines and lumps, Limestone (BFand SMS grade), Dolomite lumps and chips, hard Coal and Manganese ore are handled here every year.Iron ore and fluxes are sourced from the captive mines of SAIL situated at Kiriburu, Meghahataburu, Bhawanathpur, Tulsidamar and Kuteshwar. Washed coal is supplied from different washeries at Dugda, Kathara, Kargali and Giddi, while raw coal is obtained from Jharia coalfields.

Coke Ovens & By-product PlantThe Coke Oven Complex at Bokaro converts prime coking coal from Jharia, Dugda and Moonidih and medium coking coal form Kargali, Kathara and Mahuda, blended with imported coal, into high quality coke for the Blast Furnaces, recovering valuable by-products like Anthracene Oil, Benzene, Toluene, Xylene, Light Solvent Naphtha, Ammonium Sulphate and Extra-hard Pitch in the process. Bokaro is situated in the prime coal belt of the country.The Coke Oven battery has 8 batteries with 69 ovens each, maintained meticulously in terms of fugitive emission control, use of phenolic water and other pollution control measures.Blast FurnacesBokaro has five 2000-cubic metre Blast Furnaces that produce molten iron - Hot Metal - for steel making. Bell-less Top Charging, modernised double Cast Houses, Coal Dust Injection and Cast House Slag Granulation technologies have been deployed in the furnaces. The process of iroin-making is automated, using PLC Charging System and Computer Controlled Supervision System. The wastes products like Blast Furnace slag and gas are either used directly within plant or processed for recycling / re-use.

Steel Melting ShopsHot Metal from the Blast Furnaces is converted into steel by blowing 99.5% pure Oxygen through it in the LD converter. Suitable alloying elements are added to produce different grades of steel.Bokaro has two Steel Melting Shops - SMS-I and SMS-II. SIVIS-I has 5 IA) converters of 130T capacity each. It is capable of producing Rimming steel through the ingot route. SMS-II has 2 LD converters, each of 300 T capacity, with suppressed combustion system and Continuous Casting facility. It produces various Killed and Semi-Killed steels.Continuous Casting ShopThe Continuous Casting Shop has two double-strand slab casting machines, producing high quality slabs of width ranging from 950 mm to 1850 mm. CCS has a Ladle Furnace and a Ladle Rinsing Station for secondary refining of the steel. The Ladle Furnace is used for homogenising the chemistry and temperature. The concast machines have straight moulds, unique in the country, to produce internally clean slabs.Argon injection in the shroud and tundish nozzle prevent re-oxidation and nitrogen pick-up, maintaining steel quality. The eddy current based automatic mould level control, unique in the country, gives better surface quality. The air mist cooling and continuous straightening facilities keep the slabs free from internal defects like cracks. The casters are fully automated with dynamic cooling, on-line slab cutting, de-burring and customised marking. The shop is equipped with advanced Level-3 automation and control systems for scheduling, monitoring and process optimisation.CCS produces steel of Drawing, Deep Drawing, Extra Deep Drawing, Boiler and Tin Plate quality. It also produces low alloy steels like LPG, WTCR, SAILCOR and API Grade.Slabbing MillSlabbing Mill transforms ingots into slabs by rolling them in its 1250 mm Universal Four-High Mill. The rolling capacity of the Mill is 4 MT per annum. The shop has Hot and Cold Scarfing Machines and 2800 T 2'3 Shearing Machine. Controlled heating in Soaking Pits, close dimensional accuracy during rolling and hot and cold scarfing help produce defect-free slabs.Hot Strip MillSlabs from CCS and Slabbing Mill are processed in the state-of-the-art Hot Strip Mill. The fully automatic Hot Strip Mill with an annual capacity of 3.363 million tonnes has a wide range of products - thickness varying from 1.2 mm to 20 mm and width from 750 mm to 1850 mm. The mill is equipped with state-of-the-art automation and controls, using advanced systems for process optimisation with on-line real time computer control, PLCs and technological control systems.Walking Beam Reheating Furnaces provide uniform heating with reduction in heat losses, ensuring consistency in thickness throughout the length. High-pressure De-scaling System helps eliminate rolled-in scale. Edgers in the roughing group maintain width within close tolerance. The roughing group has a roughing train of a Vertical Scale Breaker, one 2- high Roughing Stand and four 4-high Universal Roughing Stands. The finishing group consists of a Flying Shear, Finishing Scale Breaker and seven 4-high Finishing Stands. Hydraulic Automatic Gauge Control system in the finishing stands ensures close thickness tolerance. The Work Roll Bending System ensures improved strip crown and flatness. The rolling speed at the last finishing stand is between 7.5-17.5 metres per second. The Laminar Cooling System is a unique feature to control coiling temperature over a wide range within close tolerance. The Hydraulic Coilers maintain perfect coil shape with On-line Strapping system. On-line Robotic Marking on the coil helps in tracking its identity.

Hot Rolled Coil FinishingAll the Hot Rolled coils from the Hot Strip Mill are received in HRCF for further distribution or despatch. HR Coils rolled against direct shipment orders are sheared and finished to customer-required sizes and despatched to customers. The material is supplied as per Indian specifications and many international/ foreign specifications. The shop has two shearing lines with capacities of 6,45,000 Tonnes/ year and 4,75,000 Tonnes/ year respectively.Cold Rolling MillThe Cold Rolling Mill at Bokaro uses state-of-the-art technology to produce high quality sheet gauge material, Tin Mill Black Plate and Galvanised Products. Cold rolling is done to produce thinner gauge strips of very smooth and dense finish, with better mechanical properties than hot rolling strips. Rolling is done well below re-crystallization temperature without any prior heating of the material. The products of CRM are used for deep drawing purposes, automobile bodies, steel furnitures, drums and barrels, railway coaches, other bending and shaping jobs and coated steels. The CRM complex comprises of two Pickling Lines (including a high speed Hydrochloric Acid Pickling Line with regeneration facilities), two Tandem Mills, an Electrolytic Cleaning Line, a Continuous Annealing Line, Bell Annealing Furnaces, two Skin-Pass Mills, a Double Cold Reduction Mill (DCR), Shearing Lines, Slitting Lines and a packaging and despatch section. The 5-stand Tandem Mill is capable of rolling sheet gauges upto 0.15 mm thickness. It has sophisticated hydraulic Automatic Gauge Control, computerised mill regulation and optimisation control.Hot Dip Galvanising ComplexThe Hot Dip Galvanizing Complex integrated with the CRM produces zinc-coated Cold Rolled strips resistant to atmospheric, liquid and soil corrosion. The Continuous Coil Corrugation Line in the HDGC produces corrugated sheets and the Galvanised Sheet Shearing Line produces galvanised plain sheets for a variety of applications. The first shop of Bokaro Steel to get the ISO-9001 certification way back in 1994, this complex has maintained a high-standard of coating quality and its SAII,NOTI branded products enjoy a loyal market.This complex made certain innovations for higher productivity to help re, build earthquake-ravaged Gujarat.

Services - a valuable support networkThe service departments like Traffic, Oxygen Plant, Water Management and Energy Management provide invaluable support to this gigantic plant. Bokaro Steel has a vast networked of railway tracks and over 40 diesel locos to smoothly run its operations. The Oxygen Plant provides Oxygen, Nitrogen and Argon for processes like steelmaking and annealing. Water Management looks after the huge water requirements of the plant and the township, providing different grades of water and taking care of recycling needs. Energy Management juggles the supply and demand of by-product gases and their demand as process fuel.Maintenance DepartmentsBokaro has centralised maintenance departments for large-scale electrical and mechanical maintenance, in addition to shop-based maintenance wings for running repairs and maintenance. These facilities are capable of executing massive capital repairs, supported by the fabrication facilities of the auxiliary shops.Auxiliary ShopsTo meet its needs for maintenance and repairs, Bokaro has a cluster of engineering shops such as Machine Shop, Forge Shop, Structural Shop, Steel Foundry, Ingot Mould Foundry, Cast Iron and Non-Ferrous Foundry, Electrical Repair Shop and Power Facilities Repair Shop in addition to shop-specific Area Repair Shops. Most of the repairs and maintainance requirements of the plant are met in house.The auxiliary shops and maintenance wings of Bokaro Steel, aided by in-house design teams, have executed a number of highly sophisticated procurement-substitution, productivity enhancement and quality improvement jobs, saving revenues and enhancing equipment availability.The expertise and operational scale of these departments, along with the service departments, makes Bokaro a truly integrated plant, housing many virtual enterprises within Bokaro Steel.BOKARO STEEL PLANT PRODUCT BASKETMill CapabilitiesShopProductsFacilityAnnual Capacity (000 Tonnes)Thickness range (mm)Width range (mm)Length (metre)

HSMHR Coils/Sheets/ PlatesContinuous Mill39551.6 16900 -1850-

HRCFHR Sheets/ PlatesShearing Line I-5 1018002.5 12

-HR Sheets/ PlatesShearing Line II-1.6 415001.54.5

-HR CoilSlitting Line----

CRM--1660---

-CR Coils/ SheetsCRM I complex-0.63-2.5700 1850-

CR Coils/ SheetsCRM II complex-0.63 1.6 650 1250-

CR Coils/ Sheets, TMBPDCR Mill1000.22 0.8650 1250-

-GP Coils & HDGL1700.3 1.6650 1250-

Special Grade of SteelSpecial Steel GradesApplication

SAE 1541Automobile Industry

MC 11Cycle Industry

SPC 370/390Cycle Industry

C 15Cycle Industry

API X 42, X-46,X-52, X-56, X-60 (SAILAPI)Pipe Line

SAILCOR (corrosion resistant)Railways

SAILMEDSi (Medium Silicon Steel)Heavy Electrical Winding

SAILPROPPropeller Shaft

Strapping Steel (for internal use only)Strapping Finished Products

Full-hard Galvanised CoilExtra hard roof of houses

Cold Rolled Medium Electrical SteelTransformer core

Extra-low Carbon Extra Deep Drawing (HR & CR)White goods

DMR 249A Grade SteelDefence Research Development Organisation (DRDO) for fabrication of Submarine parts (import substitution)

E460/E500/E550Floating bridges for Defence. For M/S BEML; for making. (import substitution)

IS8500 Fe 540B high strength low alloy steel with UTS value in excess of 540 MpaKolkata fly-over

Low Carbon, Low Manganese, High Strength Structural Steel without microalloying (Carbon 0.10%)Structural purposes. Thermo-mechanically Controlled Processing.)

By ProductsNitration-grade BenzeneNitration-grade TolueneAntrhracence OilExtra-hard PitchPitch Creosote MixtureBF Granulated Slag

BRIEF ON BOKARO STEEL PLANT

COMPANY PROFILE

Bokaro Steel Plant (BSL), is the symbol of countrys efforts towards augmentation of steel production & indigenisation. It has made definite contribution to the economy of our country. Agreement was signed with USSR on 25th Jan. 1965 for establishing a 1.7 MT capacity steel plant at Bokaro to be expanded later to 4.0 MT capacity. Over the years, BSL has grown in strength reaching increased levels of production and quality.Bokaro Steel Plant is an integrated Steel Plant which incorporates all the classical features of Iron & Steel making from Coke Ovens to Cold rolling Mills.With a saleable steel production capacity of 3.78 million tones, the plant has been modernized with continuous casting facilities and a state-of-the-art Hot strip mill for producing quality steels of international standards. A range of special steel products like DMR 249A, E-460/500/550, IS-8500 Fe540B, SAILCOR, SAILPROP, SAILMEDSi, SAILRIM, API grade steel, HRNO, SAILMA, WTCR, BSL-46 for auto sector etc. have been introduced after modernization. All the units of the plant from steel making to the finished product are accredited to ISO:9002 QMS standard.

ENERGY CONSUMPTIONIn the present scenario of global cost competitiveness in steel industry the challenge can be met by finding solutions to reduce energy consumption, which is one of the major cost factor. Energy consumption has reduced to an appreciable level of 7.094 Gcal/tcs in 2006-07 mainly through optimization and improvement in existing processes & equipment as well as introduction of new technologies. To achieve the international levels of energy consumption ie 4.5 to 5.5 Gcal/tcs attained by developed countries continuous efforts are made in this direction.The basic energy input ( purchased) to the steel plant are Coking coal ( both low ash imported coal and indigenous coal) for producing coke in Coke Oven. Blast Furnace grade coke purchased to supplement shortage of BF coke generated in Coke Oven. Imported low ash non coking coal for injection in Blast furnace Power purchased from DVC and BPSCL. Steam purchased from BPSCL ( both HP & LP) to meet requirement at various process. Diesel for mobile equipments, locos etc.

The basic energy input ( purchased) to the steel plant and their contribution to energy bill with respect to cost of production is given in following table.

SNParametersUnit04-0505-0606-07

1.0Consumption of basic energy

1.1Metallurgical coalKg/T of crude steel962.6922.7938.1

1.2Coal for injection in Blast furnaceKg/T of hot metal9.67.38.7

1.4Purchase PowerKwh/T of crude steel435.4415.3424.7

1.6Total Energy BillRs. In crores2423.08

2.0Total Manufacturing cost-do-5469.71

3.0Contribution of Energy bill over production cost.%44.3

There has been an astronomical rise in the price of inputs . To circumvent this adverse situation, technologies need to be adopted like fuel injections & other energy reducing measures like waste heat utilization systems etc

ENERGY CONSERVATION COMMITMENT , POLICY & SET UP

Energy Conservation is continuous and on-going process. It has been a top management priority since last two decades.The structured approach to achieve Excellence in Energy Conservation and management is based on Technological change to adopt energy efficient process Retrofitting and modification of existing process to make it more efficient. Minimize noise level through improved house keeping. Monitoring shop wise energy parameters at micro and macro level. Bokaro Steel has established a well organized Energy Management Department since inception for sustained and systematic approach towards efficient utilization of energy.A separate energy conservation cell comprising 4 executives, 21 skilled and 08 semi skilled workers is operating under Energy Management department for monitoring and controlling all energy parameters in close association with all units of the plant.The energy cell is headed by Assist. General Manager exclusively for monitoring energy consumption of the plant.The structure of the energy cell is given below.

EXECUTIVE DIRECTOR (WORKS)GM I/C (SERVICES)GM (EMD&ECD)DGM (ENERGY)SR. MGR. (MILLS)DM (IRON & STEEL ZONE)

Energy schemes completed in 2006-07

1. COKE OVEN

Dry gunniting in 238 ovens to plug cross leakages and increase CO gas yield. Hydrojet cleaning of oven doors @ 200 nos ovens /day Use of steam in place of power driven exhauste Movement of pusher car is optimized by 5-2 series charging in battery no. 6 & 7.2. SINTERING PLANT

Stopping of hammer crushers during idle hours.

Front hearth beam of machine 3 changed to reduce specific heat consm.

3. BLAST FURNACES

Use of mixed gas in stove heating and increase of blast temperature upto 1000 C.

Increase of surface area of stove checker work by Hoogoven type design in stove 1 of BF 4 and stove 2 & 3 of Blast furnace no 3.

4. SLABBING MILL

Complete cleaning of 13 nos. of metallic recuperators in pits of Slabbing Mill.

Adjustment in setting of optimum air/gas ratio in all running pits round the clock.

5. COLD ROLLING MILL

New HCl regeneration plant has been provided with all Energy efficient motors.

Installation of 18 KW motors in place of 24 KW motors in 92 no. of bases in Annealing furnaces.

6. GENERAL & UTILITIES

Reconditioning of 10 nos. of steam traps in ODPL.

Commissioning of VSAT equipments at SLCC for bi-directional data transfer between BSL, EREB, DVC for effective power distribution.

7000 m2 of damaged insulation in steam lines have been changed during the year. Repair of 12.5 Km length of damaged water line. Modernisation of Gas control system with remote operation of some strategic throttles.

ENERGY CONSERVATION ACHIEVEMENTS

As a result of the above energy conservation measures taken and optimization of the operating & maintenance practices, there was a marked improvement in all the major energy parameters. The following table shows the major parameters of the last three years.

The status of energy parameters in the last three yearsSl.NoParametersUnitYear

2004-052005-062006-07

1.0Sp. Heat consumption

-Coke OvenGcal/T dry coal0.5910.5920.583

-Sinter PlantGcal/T gross sinter0.0240.0240.025

-Blast FurnaceGcal/T slab rolled0.5800.5730.577

-Hot Strip MillGcal/T slab rolled0.4460.4500.479

-Cold Rolling MillGcal/T annealed coil0.3320.3330.367

2.0Sp. Power Consumption

-Coke OvenKwh/t gross coke26.927.827.5

-Sinter PlantKwh/T gross sinter48.545.646.6

-Steel Melting shopKwh/T crude steel23.130.831.2

- Hot Strip MillKwh/T coil + plate82.782.080.4

-Cold Rolling MillKwh/T CR Product153.2156.2150.5

3.0Coke RateKg/T hot metal531523520

4.0Coke Oven Gas yieldNm3/T dry coal321.4314.4324.6

5.0Overall Energy ConsumptionGcal/T of crude steel7.2337.0987.094

ENERGY CONSERVATION PLANS AND TARGETS

Future energy conservation plan are :

Use of coal bed methane gas.

Initiation of Clean Development Mechanism projects

Provision of BF Gas line for Captive Power Plant.

Upgradation of Gas mixing & boosting station with PLC based Control system & its linking with Gas control system.

The target for Energy consumption for 2007-08 is 6.88 Gcal/Tcs

SAFETY

Bokaro Steel Plant accords first and foremost priority to safety and health of its human resource. A full fledged Safety Engineering Department headed by General Manager (Safety& fire) is operating in the plant to inspect, monitor and ensure implementation of safe working of various plant units with trained safety officers. Regular medical check up of employees is being done.A separate gas safety section working under energy management department provide gas safety assistance to all gas hazardous jobs. Round the clock monitoring of safe working is done during capital repair, shutdown and special repair jobs.5 Star Health & Safety Management System was first introduced in the year 96-97 and spread within the various units of plant. It has been implemented in Battery 1 & 2 , Benzol recovery plant and desulphurisation unit of Energy management department in the year 1999, Steel Melting Shop no. 1(Pit Side) in 2000 , Slabbing Mill (soaking Pit area) in 2001 and Blast furnace Gas cleaning plant no 3 &4 in 2002. BSL has a safety policy under the signature of MD and it serves as a managements commitment to safety.Designated departmental safety officers(DSO) of all the departments are made responsible for monitoring the safety activities in the dept. who also co-ordinates with safety Engineering Dept. in various activities linked to safe working.

AWARDS:

Bokaro Steel Plant has bagged the following awards:

Second National Energy Conservation award 2006 for excellence in Energy Conservation & Management in 05-06.

ISO 9001.2000 Quality Management System certification for the whole of Bokaro Steel plant.

ENVIRONMENT MANAGEMENT

The concern for Environment at Bokaro Steel Plant is of paramount importance since the construction of the plant. All process equipments are provided with pollution control systems. Bokaro Steel has spent Rs. 335 crores in the last decade on pollution control projects. The plant environment is monitored by an independent Environment Control Department manned by qualified & trained people in the field. The plant has been provided with the latest environmental protection system as regards to air, water, noise and solid waste pollution with state of art laboratory functioning round the clock. The measures taken for improvements of environment are as follows: Effluent discharges from all three outlets of the Plant are maintained within stipulated norms. Emissions from all the stacks except from Sinter exhaust are within stipulated norms. Battery cyclones are going to be replaced by ESP. Ambient Air quality in & around the township remained within the stipulated norms. 100% use of processed LD slag as rail ballast for Internal Railway Track replacing stone ballast. Use of LD slag in fly ash dykes. Fugitive emission (PLD, PLL & PLO) in all batteries are well below the stipulated norm except PLD of battery no. 1. Coke oven battery # 6 commissioned after cold repair. Heating started after re-building of Coke oven battery #5 with latest on line Pollution control equipments. Commissioning of continuous stack monitoring system in coke oven battery no. 3 & 5. Ammonia in BOD plant outlet has come within norm. Water consumption has been reduced to 4.83 cu. M / tcs Hazardous waste pit completed & started functioning. On line CHSGP in BF4 commissioned.

Page 104

Capital Budgeting

Meaning

The term Capital Budgeting refers to the long-term planning for proposed capital outlays or expenditure for the purpose of maximizing return on investments. The capital expenditure may be :

(1) Cost of mechanization, automation and replacement.

(2) Cost of acquisition of fixed assets. e.g., land, building and machinery etc.

(3) Investment on research and development.

(4) Cost of development and expansion of existing and new projects.

DEFINITION OF CAPITAL BUDGETING

Capital Budget is also known as "Investment Decision Making or Capital Expenditure Decisions" or "Planning Capital Expenditure" etc. Normally such decisions where investment of money and expected benefits arising therefrom are spread over more than one year, it includes both raising of long-term funds as well as their utilization. Charles T. Horngnen has defined capital budgeting as "Capital Budgeting is long-term planning for making and financing proposed capital outlays."

In other words, capital budgeting is the decision making process by which a firm evaluates the purchase of major fixed assets including building, machinery and equipment. According to Hamption, John. 1., "Capital budgeting is concerned with the firm's formal process for the acquisition and investment of capital."

From the above definitions, it may be concluded that capital budgeting relates to the evaluation of several alternative capital projects for the purpose of assessing those which have the highest rate of return on investment.

Importance of Capital Budgeting

Capital budgeting is important because of the following reasons :

Capital budgeting decisions involve long-term implication for the firm, and influence its risk complexion.

Capital budgeting involves commitment of large amount of funds.

Capital decisions are required to assessment of future events which are uncertain.

Wrong sale forcast ; may lead to over or under investment of resources.

In most cases, capital budgeting decisions are irreversible. This is because it is very difficult to find a market for the capital goods. The only alternative available is to scrap the asset, and incur heavy loss. Capital budgeting ensures the selection of right source of finance at the right time.

Many firms fail, because they have too much or too little capital equipment.

Investment decision taken by individual concern is of national importance because it deter-mines employment, economic activities and economic growth.

Objectives of Capital Budgeting

The following are the .important objectives of capital budgeting:

(1) To ensure the selection of the possible profitable capital projects.

(2) To ensure the effective control of capital expenditure in order to achieve by forecasting the long-term financial requirements.

(3) To make estimation of capital expenditure during the budget period and to see that the benefits and costs may be measured in terms of cash flow.

(4) Determining the required quantum takes place as per authorization and sanctions.

(5) To facilitate co-ordination of inter-departmental project funds among the competing capital projects.

(6) To ensure maximization of profit by allocating the available investible.

Principles or Factors of Capital Budgeting Decisions

A decision regarding investment or a capital budgeting decision involves the following principles or factors:

(1) A careful estimate of the amount to be invested.

(2) Creative search for profitable opportunities.

(3) A careful estimates of revenues to be earned and costs to be incurred in future in respect of the project under consideration.

(4) A listing and consideration of non-monetary factors influencing the decisions.

(5) Evaluation of various proposals in order of priority having regard to the amount available for investment.

(6) Proposals should be controlled in order to avoid costly delays and cost over-run

(7) Evaluation of actual results achieved against those budget.

(8) Care should be taken to think all the implication of long range capital investment and working capital requirements.

(9) It should recognize the fact that bigger benefits are preferable to smaller ones and early benefits are preferable to latter benefits.

Capital Budgeting Process

The following procedure may be considered in the process of capital budgeting decisions :

(1) Identification of profitable investment proposals.

(2) Screening and selection of right proposals.

(3) Evaluation of measures of investment worth on the basis of profitability and uncertainty or risk.

(4) Establishing priorities, i.e., uneconomical or unprofitable proposals may be rejected.

(5) Final approval and preparation of capital expenditure budget.

(6) Implementing proposal, i.e., project execution.

(7) Review the performance of projects.

Types of Capital Expenditure

Capital Expenditure can be of two types :

(1) Capital expenditure increases revenue.

(2) Capital expenditure reduces costs.

(1) Capital Expenditure Increases Revenue: It is the expenditure which brings more revenue to the firm either by expanding the existing production facilities or development of new production line. (2) Capital Expenditure Reduces Costs: Such a capital expenditure reduces the cost of present product and thereby increases the profitability of existing operations. It can be done by replacement of old machine by a new one.

Types of Capital Budgeting Proposals

A firm may have several investment proposals for its consideration. It may adopt after considering the merits and demerits of each one of them. For this purpose capital expenditure proposals may be classified into :

(1) Independent Proposals

(2) Dependent Proposals or Contingent Proposals

(3) Mutually Excusive Proposals

(1) Independent Proposals: These proposals are said be to economically independent which are accepted or rejected on the basis of minimum return on investment required. Independent proposals do not depend upon each other.

(2) Dependent Proposals or Contingent Proposals: In this case, when the acceptance of one proposal is contingent upon the acceptance of other proposals. it is called as "Dependent or Contingent Proposals." For example, construction of new building on account of installation of new plant and machinery.

(3) Mutually Exclusive Proposals: Mutually Exclusive Proposals refer to the acceptance of one proposal results in the automatic rejection of the other proposal. Then the two investments are mutually exclusive. In other words, one can be rejected and the other can be accepted. It is easier for a firm to take capital budgeting decisions on such projects.

Methods of Evaluating Capital Investment ProposalsThere are number of appraisal methods which may be recommended for evaluating the capital investment proposals. We shall discuss the most widely accepted methods. These methods can be grouped into the following categoriesI. Traditional Methods :Traditional methods are grouped in to the following(1) Pay-back period method or Payout method.(2) Improvement of Traditional Approach to Pay-back Period Method.(a) Post Pay-back profitability Method.(b) Discounted Pay-back Period Method.(c) Reciprocal Pay-back Period Method.(3) Rate of Return Method or Accounting Rate of Return Method. TimeAdjusted Method or Discounted Cash Flow MethodTime Adjusted Method further classified into(I) Net Present Value Method.(2) Internal Rate of Return Method.(3) Profitability Index Method.I. Traditional Methods(1) Pay-back Period Method : Pay-back period is also termed as "Pay-out period" or Pay-off period. Pay out Period Method is one of the most popular and widely recognized traditional method of evaluating investment proposals. It is defined as the number of years required to recover the initial investment in full with the help of the stream of annual cash flows generated by the project.Calculation of Pay-back Period : Pay-back period can be calculated into the following two different situations(a) In the case of constant annual cash inflows.(b) In the case of uneven or unequal cash inflows.(a) In the case of constant annual cash inflows : If the project generates constant cash flow the Pay-back period can be computed by dividing cash outlays (original investment) by annual cash inflows. The following formula can be used to ascertain pay-back period

Pay back Period =

Illustration: 1A project requires initial investment of Rs. 40,000 and it will generate an annual cash inflows of Rs. 10,000 for 6 years. You are required to find out pay-back period.

Solution :Calculation of Pay-back period :

Pay back Period =

= Pay-back period is 4 years, i.e., the investment is fully recovered in 4 years.

(b) In the case of Uneven or Unequal Cash Inflows: In the case of uneven or unequal cash inflows, the Pay-back period is determined with the help of cumulative cash inflow. It can be calculated by adding up the cash inflows until the total is equal to the initial investment.

Illustration: 2

From the following information you are required to calculate pay-back period :A project require initial investment of Rs. 40,000 and generate cash inflows of Rs. 16,000, Rs, 14,000, Rs. 8,000 and Rs. 6,000 in the first, Second, third, and fourth year respectively.

Solution :Calulation Pay-back Period with the help of Cumulative Cash InflowsYearAnnual Cash Inflows Rs.Cumulative Cash Inflows Rs.

123416,00014,0008,0006,00016,00030,00038,00044,000

The above table shows that at the end of 4th years the cumulative cash inflows exceeds the investment of Rs. 40,000. Thus the pay-back period is as follows :

Pay back Period=3Years +

=3Years + =3.33 Years

Chapter 1

Bokaro Steel Plant:Bokaro Steel Plant was fourth integrated plant in the public sector. The company starts taking shape in 1965 in collaboration with the Soviet Union. Bokaro Steel Plant (BSL) was incorporated in 1964 and later merged with SAIL as a subsidiary company and then as a unit under the Public Sector Iron & Steel Companies Act 1978.

It was the first Swadeshi Steel Plant built with maximum equipment and material. Its first Blast Furnace was started on 2nd October, 1978 and its first phase of 1.7 MT Ingot Steel was completed on 26th February, 1978 with the commissioning of its third Blast Furnace. And in 90s it was upgraded from 4 MT to 4.5 MT of liquid Steel.The new feature added in the modernization of SMS-II includes: Two twin-stand slab caster along with a Steel Refining UnitThe modernization of its Hot Strip Mill adds a new feature like: High Pressure de-scalars Work rolls bending Hydraulic automatic gauge control Quick work roll change Laminar cooling And, its less efficient Pusher Type Furnace were replaced by new Walking Beam Reheating Furnace.Two of its existing Hydraulic Coiler was removed by a new improved Hydraulic Coiler. With the modernization and completion of Hot Strip Mill, Bokaro Steel Plant starts producing top quality of hot rolled products and which was accepted in the Global Market.Bokaro Steel Plant is designed to produce flat products like: Hot/Cold Rolled Coils Hot/Cold Rolled Sheets Hot Rolled Plates Tin Mill Black Plates And, Galvanized Plain and Corrugated SheetsBokaro Steel Plant has provided a strong raw material to many modern Engineering Industries such as Automobiles, Pipe and Tube, LPG Cylinder, Barrel and Drum Producing Industries.

Upgradation of Blast Furnace-2 at BSL: Bokaro Steel Plant is equipped with 5 Blast Furnaces, BF Nos. 1 to 5. The furnaces are having identical hearth diameter of 9.75m and useful volume of 2000 cum. The Plant was originally designed for 1.7 MT of Crude Steel, which has progressively increased to 4.5 MT.As per the Corporate Plan-2012 of SAIL, the hot metal production from the existing 5 Blast Furnace is targeted at 6.5 Mtpa in 2012, up from 4.7 MT in 2005-06. This target is planned to be achieved through upgradation of the Blast Furnace to improve productivity levels, introduction of auxiliary fuel injector in all blast furnaces, revamping of turbo blowers, installation of cast house slag granulation plants etc. As per plan, the upgradation of Blast Furnaces is to be carried out during the extended capital repairs shutdown period of Blast Furnace No.-2 was commissioned on 12.04.1976. The last Capital Repair of BF No.-2 was carried out between 16.06.1996 to 15.08.1996. The furnace is due for extended Category II repair in the year 2007-2008 and BSL has decided to use this opportunity to upgrade the furnace so that the reportedly cost of capital repair of around Rs.50 crore can be saved and the shut-down period can be minimized.

The present proposal envisages Rebuilding of Blast Furnace No. 2 with working volume of furnace at 2250 m as against the current capacity of 1758 m. The major technological facilities existing in BF No.2 include bell less top charging system with PLC control, high top pressure operation, ceramic pad in hearth with carbon blocks in the periphery, under hearth cooling with air, twin cast houses 180 apart, hot blast stoves system of Russian design, PLC controlled conveyorised stock-house having sinter & coke screening facilities, etc.The proposed rebuilding would enable the Blast Furnace-2 to increase its productivity at an envisaged level of 2.0 t/m/day from the base level of 1.35 t/m/day (actual 2005-06)resulting in higher production of 4500 t/day of Hot Metal from the base level production of 2373 t/day. The hot blast temperature would be 1200C from 909C with reduction in coke consumption of 385 kg/thm from 543 kg/thm of base level with use of CDI coal injection of 135 kg/thm. The technological parameters and design features of the existing BF No.2 vis--vis upgradated BF No.2 are as under:ParametersExisting (2005-06)After Upgradation Working Volume (cum)17582250 H.M. Production (tpd)23734500 Coke Rate (kg/thm)543385 Furnace Top Pressure (kg/cm)0.952.0 Blast Volume (NM/min)29283065 (with6% Oxygen enrichment) Hot Blast Temp. (C)9091200 Hot Blast Pressure (kg/cmmax.)2.113.5

2. Objective and Scope Objective of the Studies: To describe the organizational profile of Bokaro Steel Plant (BSL). To get familiarity with the various components of Capital Budgeting in BSL. To discuss the importance of the Capital Budgeting management. To find out the difference between the theoretical and practical aspect of Capital Budgeting management. Determination of proposal and investments, inflows and outflows in BSL. To evaluate the investment proposal made by the company. To summarize and to suggest for the better investment proposal by using capital budgeting techniques. To study and come out with any solution for improvement of Capital Budgeting management at BSL The sole objective of this project was to analyze the Capital Budgeting on Blast Furnace-2 at Bokaro Steel Plant. To assess the significance of Capital Budgeting by selecting a few important parameters such as: Net Present Value (NPV) Internal Rate of Return (IRR) Profitability Index (PI) Payback Period (PB) Discounted Payback Average Rate of Return (ARR) Scope of the Studies: The study is limited to Capital Budgeting decision of Blast Furnace-2 in Bokaro Steel Plant. The findings can be used by other to understand the proposal and its attractiveness to permit financial and commercial analysis. This influence the firm growth in long term consequences capital investment decision that what the firm can do in future.

3. Theoretical PerspectiveCapital Budgeting:Capital Budgeting is a planning process which is use to determine the Long Term Investment of an Organization such as investment in new machinery, replacement of machineries, opening of a new plant, innovation of new product and research development projects.Importance of Investment Decisions: They influence the firms growth in long run, They are irreversible or reversible at substantial loss. Types of Investment Decisions: Expansion of Existing Business:A company may add capacity to its existing product lines to expand existing operation. Replacement and Modernization:The main objective of modernization and replacement is to improve operating efficiency and reduce cost. Another useful ways of Classify Investment: Mutually Exclusive Investments:Mutually Exclusive Investments serves the same purpose and competes with each other. Independent Investment:Independent Investment serves different purposes and do not compete with each other. Contingent Investment:Contingent Investments are dependent projects; the choice of one investment necessitates undertaking one or more other investment.Evaluation Criteria:They are classified in two categories: Discounted Cash Flow (DCF) Criteria: Net Present Value (NPV) Internal Rate of Return (IRR) Profitability Index (PI) Non-Discounted Cash Flow Criteria: Payback (PB) Discounted Payback Accounting Rate of Return (ARR) Discounted Cash Flow (DFC) Criteria: Net Present Value (NPV):The difference between PV of cash flows and PV of cash outflows is equal to NPV; the firms opportunity cost of capital being the discount rate.Rules: Accepted if NPV > 0 (i.e. NPV is Positive) Rejected if NPV < 0 (i.e. NPV is negative) Project may be accepted if NPV = 0 Internal Rate of Return (IRR):The discount rate which equates the present value of an investments cash inflows and outflows is its Internal Rate of Return.Rules: Accepted if IRR > k Rejected if IRR < k Project may be accepted if IRR = k Profitability Index (PI):The ratio of the present value of the cash flows to the initial outlay.

Rules: Accepted if PI > 1.0 Rejected if PI < 1.0 Project may be accepted if PI = 1.0 Non-Discounted Cash Flow Criteria: Payback:The number of years required to recover the initial outlay of the investment.Rules: Accepted if PB < Standard payback Rejected if PB > Standard payback Discounted Payback:The number of years required in recovering the cash outlay on the present value basis is the discounted payable period. Except using discounted cash flows in calculating payback, this method has all the demerits of payback method.

Average Rate of Return:An average rate of return found by dividing the average net operating profit [EBIT*(1-T)] by the average investment.Rules: Accepted if ARR > minimum rate Rejected if ARR < minimum rate.

4. Methodology and Procedure of WorkMethodology:The data which I have collected for making this project is a combination of both primary data and secondary data.Primary Data:The information collected directly without any reference. It was mainly through interactions with concerned officers individually. Some of the information is obtained with personal observation.These sources include: Guidance given by the project guide, Mr. R.B.Sharma, Asst. Manager (F&A) Interaction with the various department Managers of BSL Secondary Data:The data is from the number of books, records, annual reports published by the company, business magazines and business news papers. Collection of data from annual records and internal published books By Journals and magazines Annual Report of the Company.Work Procedures: 1-2 weeks: In these two weeks I got acquainted through the existing work which has been done in the Finance & Accounts department and have a fair bit of idea on the above mentioned topic so that I am acquainted with all the aspects which need to be covered in order to have a better insight on the given topic. 3-5 weeks: In this period I got the financial budgeting data of upgradation of Blast Furnace-2 to study and analyze it. 6-8 weeks: In this period I had done analysis of all the data collected, interpret them and reached to a conclusion. Also with the help of my Project Guide, I would start preparing the final report.

Analysis of DataThe proposed rebuilding would enable the Blast Furnace-2 to increase its productivity at an envisaged level of 2.0 t/m/day from the base level of 1.35 t/m/day (actual 2005-06) resulting in higher production of 4500 t/day of Hot Metal from the base level production of 2373 t/day. The hot blast temperature would be 1200C from 909C with reduction in coke consumption of 385 kg/thm from 543 kg/thm of base level with use of CDI coal injection of 135 kg/thm. Capital Cost Estimate (Summary):Table-1Base Date: 3rd Qtr. 2006FE parity:1 euro= Rs.58.54Sl. No.ItemFC (Cr.)LC (Cr.)Total (Cr.)

12345678910EquipmentStructuresRefractoriesCivil WorkErection & CommEngg. & Constn.Freight & InsuranceTaxes & DutiesOthers (Training)Contingencies97.55

29.38

23.707.62

0.977.9694.4352.7126.5023.4541.2537.2915.2399.810.2519.55191.9852.7155.8823.4541.2560.9822.8599.811.2227.51

11Total Plant Cost167.17410.47577.64

12IDC

15.16

13Capital Cost

592.80

Therefore, Total Capital Cost = Rs.592.80 (Cr.) Gross Margin Calculation:Table-2Sl. No.ParticularsUnitBase CaseProposed Case

1.

1.2.3.4.5.6.7.8.9.10.11.12.

1.

1.2.3.4.Technical Parameters:

Working Volume of FurnaceNo. of working daysOxygen enrichmentBF Productivity (Working Volume)Hot Metal ProductionAddl. H M Prodn. w.r.t base caseEquivalent Pig Production (Y=93%)Coke rate (Skip)Savings in coke consumptionCDI coal injectionAvg. power generation from TRTSteam consumption

Benefits:

Contribution on additional Pig IronSaving due to less Coke consumptionAddl. Power generation from TRTSaving in steam cons.

cu mdays%t/m/day000t000t000tKg/thm000t/yrKg/thmMWtph

Unit

Rs. Cr.Rs. Cr.Rs. Cr.Rs. Cr.

1758350Nil1.35823

543

4.66

Rate

425593503177292

22503506%2.0015757526993852401358.080

Amount

297.56232.6621.471.14

Total BenefitsRs. Cr.

552.84

1.

1.2.3.4.5.6.7.Addl. Expenditure:

CDI coal @135 kg/thmElectricity (@27 kwh/tpci)Nitrogen @1900 nm/hr (CDI+TRT)Oxygen consumption - 13000 nm/hrCO gas 8695 nm/hr (CDI+BF+TRT)Make-up waterRepair & Maint. @2.5% of plant cost

Rs. Cr.Rs. Cr.Rs. Cr.Rs. Cr.Rs. Cr.Rs. Cr.

67003177129031303571000

156.702.012.0634.1810.950.1014.44

Total Addl. ExpenditureRs. Cr.

220.45

1. GROSS MARGIN (II-III)Rs. Cr.

332.39

Initial Data:Table-3YearCash Inflow (Cr.)Interest (Cr.)Depreciation (Cr.)Profit Before Tax (PBT) (Cr.)Tax (33.66%) (Cr.)Profit After Tax (PAT) (Cr.)Cash Inflow (Dept.+PAT) (Cr.)

10000000

2110.7329.6221.1160.0020.1939.8060.91

3268.9144.4442.21182.2661.35120.91163.12

4300.5537.0342.21221.3074.49146.81189.02

5316.3629.6242.21244.5382.31162.22204.43

6316.3622.2242.21251.9384.80167.13209.43

7316.3614.8142.21259.3487.29172.04214.25

8316.367.4142.21266.7489.79176.96219.17

9316.360.0042.21274.1592.28181.87224.08

10316.360.0042.21274.1592.28181.87224.08

11316.360.0042.21274.1592.28181.87224.08

12316.360.0042.21274.1592.28181.87224.08

13316.360.0042.21274.1592.28181.87224.08

14316.360.0042.21274.1592.28181.87224.08

15316.360.0042.21274.1592.28181.87224.08

16316.360.0042.21274.1592.28181.87224.08

17316.360.0042.21274.1592.28181.87224.08

18316.360.0042.21274.1592.28181.87224.08

19316.360.0042.21274.1592.28181.87224.08

20316.360.0042.21274.1592.28181.87224.08

21316.360.0042.21274.1592.28181.87224.08

22158.180.0042.21115.9739.0376.93119.14

Net Present Value:Table-4YearDepreciation (Cr.)Profit After Tax (PAT) (Cr.)Cash Inflow (Dept.+PAT) (Cr.)PVIF (10%) (Cr.)PV (Cr.)

10000.9090

221.1139.8060.910.82650.31

342.21120.91163.120.751122.50

442.21146.81189.020.683129.10

542.21162.22204.430.620126.75

642.21167.13209.430.564118.12

742.21172.04214.250.513109.91

842.21176.96219.170.466102.13

942.21181.87224.080.42495.01

1042.21181.87224.080.38586.27

1142.21181.87224.080.35078.43

1242.21181.87224.080.31871.26

1342.21181.87224.080.28964.76

1442.21181.87224.080.26358.93

1542.21181.87224.080.23953.56

1642.21181.87224.080.21748.63

1742.21181.87224.080.19744.14

1842.21181.87224.080.17940.11

1942.21181.87224.080.16336.53

2042.21181.87224.080.14833.16

2142.21181.87224.080.13530.25

2242.2176.93119.140.12214.54

Total1514.39

Total Capital Cost = Rs.592.80 (Cr.)Net Present Value = Present Value of Cash Inflow Cash Outflow = Rs. (1514.39 592.80) = Rs.921.59 (Cr.) Profitability Index:Table-5YearDepreciation (Cr.)Profit After Tax (PAT) (Cr.)Cash Inflow (Dept.+PAT) (Cr.)PVIF (10%) (Cr.)PV (Cr.)

10000.9090

221.1139.8060.910.82650.31

342.21120.91163.120.751122.50

442.21146.81189.020.683129.10

542.21162.22204.430.620126.75

642.21167.13209.430.564118.12

742.21172.04214.250.513109.91

842.21176.96219.170.466102.13

942.21181.87224.080.42495.01

1042.21181.87224.080.38586.27

1142.21181.87224.080.35078.43

1242.21181.87224.080.31871.26

1342.21181.87224.080.28964.76

1442.21181.87224.080.26358.93

1542.21181.87224.080.23953.56

1642.21181.87224.080.21748.63

1742.21181.87224.080.19744.14

1842.21181.87224.080.17940.11

1942.21181.87224.080.16336.53

2042.21181.87224.080.14833.16

2142.21181.87224.080.13530.25

2242.2176.93119.140.12214.54

Total1514.39

Present Value (PV) of Cash Inflows = Rs.1514.39 (Cr.)Present Value (PV) of Cash Outflow = Rs.592.80 (Cr.)Therefore,Profitability Index = PV of Cash Inflows PV of Cash Outflow = 1514.39 592.80 = 2.55 (times)

Internal Rate of Return:Discounted rate taken as 22%.Table-6YearCash Inflow (Dept.+PAT) (Cr.)PVIF (22%) (Cr.)PV (Cr.)

100.8190

260.910.67140.87

3163.120.55089.71

4189.020.45185.24

5204.430.37075.63

6209.430.30363.45

7214.250.24853.13

8219.170.20344.49

9224.080.16737.42

10224.080.13630.47

11224.080.11225.09

12224.080.09220.61

13224.080.07516.80

14224.080.06113.66

15224.080.05011.20

16224.080.0419.18

17224.080.0347.61

18224.080.0276.05

19224.080.0224.92

20224.080.0184.03

21224.080.0153.36

22119.140.0121.42

Total644.45

Where,RV = Relative ValueHV = Higher Value, LV = Lower ValueHR = Higher Rate, LR = Lower RateDiscounted rate taken as 24%.Table-7YearCash Inflow (Dept.+PAT) (Cr.)PVIF (24%) (Cr.)PV (Cr.)

100.8060

260.910.65039.59

3163.120.52485.47

4189.020.42379.95

5204.430.34169.71

6209.430.27557.59

7214.250.22147.34

8219.170.17839.01

9224.080.14432.26

10224.080.11625.99

11224.080.09320.83

12224.080.07516.80

13224.080.06113.66

14224.080.04910.97

15224.080.0398.73

16224.080.0327.17

17224.080.0255.60

18224.080.0204.48

19224.080.0163.58

20224.080.0132.91

21224.080.0102.24

22119.140.0080.95

Total574.92

Discounted rate taken as 22% = 644.45 (Cr.)Discounted rate taken as 24% = 574.92 (Cr.)Therefore,Internal Rate of Return = LR + {(HV - RV) (HV - LV)} * (HR - LR) = 22 + {(644.45 592.80) (644.45 574.92)} * (24 - 22) = 23.48%

Payback Period:Table-8YearDepreciation (Cr.)Profit After Tax (PAT) (Cr.)Cash Inflow (Dept.+PAT) (Cr.)Cumulative Cash Inflow (Cr.)

10000

221.1139.8060.9160.91

342.21120.91163.12224.03

442.21146.81189.02413.05

542.21162.22204.43617.48

642.21167.13209.43826.91

742.21172.04214.251041.16

842.21176.96219.171260.33

942.21181.87224.081484.41

1042.21181.87224.081708.49

1142.21181.87224.081932.57

1242.21181.87224.082156.65

1342.21181.87224.082380.73

1442.21181.87224.082604.81

1542.21181.87224.082828.89

1642.21181.87224.083052.97

1742.21181.87224.083277.05

1842.21181.87224.083501.13

1942.21181.87224.083725.21

2042.21181.87224.083949.29

2142.21181.87224.084173.37

2242.2176.93119.144292.51

Total4292.51

Payback Period = 4 years 10 months.When we are adding the Cash Inflows, we are finding that Rs.413.05 of the original outlay is recovered in the first 4 years. And in the fifth year Cash Inflow generated is Rs. 204.43 and