synonyms for vizag steel plant done by l.varsha nihanth

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.