SUMMER INTERNSHIP PROGRAMVizag steel plant (RINL)

• Steel is an alloy of iron and carbon that is widely used in construction and other applications

because of its hardness and tensile strength.

• steel had been produced in bloomer furnaces for thousands of years, steel's use expanded

extensively after more efficient production methods were devised in the 17th century

for blister steel and then crucible steel.

• Today, steel is one of the most common materials in the world, with more than 1.3 billion

tons produced annually.

• It is a major component in buildings, infrastructure, tools, ships, automobiles, machines,

appliances, and weapons.

ABOUT STEEL PLANT

VISAKHAPATNAM STEEL PLANT

(RINL)

• Visakhapatnam steel plant is also called as RINL which means “RASHTRIYA ISPAT NIGAM LIMITED”.

• The foundation for RINL was laid by the then Prime Minister Mrs. Indira Gandhi on 20th January 1971.

• The Project was estimated to cost Rs.3, 897.28 cores based on prices as on 4th Quarter of 1981.

• On completion of Construction of the whole Plant in 1992, the cost escalated to around 8500 Cr.

• Visakhapatnam Steel Plant is one of the most modern Steel Plants in the country.

• The plant was dedicated to the nation on 1st August 1992 by the then Prime Minister, P.V.Narasimha Rao.

ABOUT STEEL PLANT

Vison and missioncompany

Vision

• To be a continuously growing world class company

• Harness our growth potential and sustain profitable growth.

• Deliver high quality and cost competitive products and be the first choice of customers.

• Create an inspiring work environment to unleash the creative energy of people.

• Achieve excellence in enterprise management.

• Be a respected corporate citizen, ensure clean and green environment and develop vibrant communities around us.

Mission

To attain 16 Mt liquid steel capacity through technological up-

gradation, operational efficiency and expansion; augmentation of assured supply

of raw materials; to produce steel at international Standards of Cost & Quality;

and to meet the aspirations of stakeholders

RINLMAJOR DEPARTMENTS OF

• Human Resource Department

• Finance Department

• Marketing Department

• Administration And Welfare Department

• Raw Material Handling Plant

• Coke Oven Department

• Sinter Plant Department

• Blast Furnace

• Steel Melt Shop

• Rolling Mills

• Wire Rod Mill

• Medium Merchant & Structural Mill (MMSM)

• Law Department

COMPANYCustomer

• The Main Customers Of The Steel Plant Are :

• Builders

• Construction Companies.

• Indian Railways.

• State Governments.

• Visakhapatnam Steel Products Are Also Being Exported To Other Countries.

COMPANYCompetitors

Competitors

• Bharat Refectories Ltd.

• Hindustan Steel Works Construction Ltd.

• Jindal Steel and Power Ltd.

• Tata Iron Steel Company Metal Scrap Trade Corporation Ltd.

• Metallurgical and Engineering Consultants India Ltd.

• National Mineral Development Corporation Ltd.

• Sponge Iron India Ltd.

• Steel Authority India ltd.

ABBREVATIONS

GM - GENERAL MANAGER

ED - EXECUTIVE DIRECTOR

RINL - RASHTRIYA SPAT NIGAM LIMTED

F&A - FNANCE AND ACCOUNTS

TTI - TECHNICAL TRAINING INSTITUTE

CISF - CENTRAL INDUSTRIAL SECURITY FORCE

IT - INFORMATION TECHNOLOGY

MM - MATERIAL MANAGEMENT

Visakhapatnam steel plant technology

•7m tall Coke Oven Batteries with coke dry quenching.

•Biggest Blast Furnaces in the country.

•Bell less top changing system in Blast Furnace.

•100% slag granulation at the Blast Furnace cast house.

•Suppressed combustion—LD gas recovery system.

•100% continuous casting of liquid steel.

•‘Tempcore’ and ‘Stelmor’ cooling process in LMMM & WRM.

•Extensive waste heat recovery systems.

•Comprehensive pollution control measure

On Job Training

• On-the-job training (OJT) is a form of training taking place in a normal

working situation.

• On-the-job training, sometimes called direct instruction, is one of the

earliest forms of training.

• It is a one-on-one training located at the job site, where someone who

knows how to do a task shows another how to perform it.

COMPANYTask Undertaken In Vsp

TASK UNDERTAKEN IN VSP

VSP is operating at 3.00 M.T. of liquid steel at present. It is framed to

Enhance its capacity to produce 6.3M.T of liquid steel by expansion.

The estimated cost of expansion is:

Approved cost: 11,999 Crs (Base Jun, 2005)

Debt component: 2399.8 Crs.

Assumed in calculation as per rate as 5.5%.

How expansion will affect the capacity in positive way:

COMPANY

MAN POWER

Man Power as on 01-03-2014

Works Non-works project mines total

Executive 4250 1511 421 117 6299

Non-Executive 11016 800 48 221 12085

total 15266 2311 469 338 18384

Man Power as on 01-03-2014

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

executves non-excutives total

Man power

works non-works projects mines total

Capital budgeting

The INVESTMENT DECISIONS of a firm are generally known as the capital budgeting,

or capital expenditure decisions

A capital budgeting decision may be defined as the firm’s decision to invest its current

funds most effectively in the long- term assets in anticipation of an expended flow of

benefits over a series of years.

The features of investment decisions :

The exchange of current funds for future benefits.

The funds are invested in long-term assets.

The feature benefits will occur to the firm over a series of years

Year Constructionyear

OperationYear

Capitalcost

ExpectedCash inflow

Year no Cash flow Net cash

2011-12 1 0 10133 0 1 -10133 -10133

2012-13 2 0 933 0 2 -933 -11066

2013-14 3 0 933 0 3 -933 -11999

2014-15 4 1 0 1154.54 4 1154.54 -10844.5

2015-16 5 2 0 2187.04 5 2187.04 -8657.42

2016-17 6 3 0 2718.78 6 2718.78 -5938.64

2017-18 7 4 0 2684.85 7 2684.85 -3253.79

2018-19 8 5 0 2798.69 8 2798.69 -455.1

2019-20 9 6 0 2657.31 9 2657.31 2202.21

2020-21 10 7 0 2298.82 10 2298.82 4501.03

2021-22 11 8 0 2210.36 11 2210.36 6711.39

2022-23 12 9 0 2159.06 12 2159.06 8870.45

2023-24 13 10 0 2140.15 13 2140.15 11010.6

2024-25 14 11 0 2123.82 14 2123.82 13134.42

2025-26 15 12 0 3755.22 15 3755.22 16889.64

DATA USED FOR THE TASK

Formulas applied

Payback period ₌ Cost of investment

Annual net cash flow

Accounting rate of return = Annual after-tax net income

Annual average investment

NPV= Present value of cash inflow – present value of cash out flow

I R R = A L + (H – L)

B-A

Where

L : Lower discount rate at which NPV is positive

H : Higher discount rate at which NPV is negative

A : NPV at lower discount rate, L

B : NPV at higher discount rate.

PV of cash inflow

Initial Cash outlayP I =

Profitability index

Where,

PI : Profitability index

PV : present value

COMPANY

SWOT ANALYSIS

SWOT

ANALYSIS

S- STRENGTHS:

State –of-the technology

High commitment to achieve capacity levels

Areas of excellence

Economies of scale

High expansion potential

Strong commitment to conserve environment

W-WEAKNESSES

High capital rated charges

Low return product –mix

Productivity below international levels

Practices not as per with international standards

O-OPPORTUNITIES

Shore based

Sizeable export markets

Access to import resources

Proximity to southern markets

Increasing domestic demand due to thrust on infrastructure development

T- THREATS

Rising input costs

Increasing competition

Sensitive to exchange rate variation

Possibility of import duties declining further.

Excise duties continue to be high

Lack of alternative sources for major raw materials

S

W

O

T

A

N

A

L

Y

S

I

S

Suggestions company

• The project completion cost is estimated to be Rs. 11999. Cr.

• The payback period of the project in VSP is 5 years and 2 months. The payback period is less than the

target period so the project may be accepted.

• The NPV of the project is positive than the value of the capital.

• The Internal rate of return is Internal rate of 15.73% it is greater than the cost of capital i.e., 18% so the

project accepted.

• The company has to maintain at 7: 3 (debt: equity), that is better for company.

• It also maintains 60: 40, but equity to be raised

SUGGESTIONS

COMPANYFindings

• The project completion cost is estimated to be Rs.11999. Cr.

• The payback period of the project in VSP is 5 years and 2 months. The payback period is nearly 1/3 of

the 15 years, the economic life project so the project is viable.

• The NPV of the project is positive and higher than the cost of the capital.

• The Internal rate of return is Internal rate of 15.73% it is greater than the cost of capital. So the project

is accepted.

• The estimated cash flows of the project are after payment of interest and tax.

• Expansion from 3.0MT capacity to 6.3MT capacity undertaken is profitable.

• Increase in Debt component is decreasing the Profitability due to the tax on debt as dividend on equity

is not considered as entire equity is held by GOI. Had dividend on equity is considered, the evaluation

will change.

• The completion cost may further increase if any delay in construction process.

FINDINGS

companySKILLS REQUIRED FOR

• The Skills Required For Performing This Task Are Observation Skills.

• Thorough Verification Of The Company’s Financial Data.

• As Capital Budgeting Involves All The Aspects Of Finance There Should Be The

Basic Knowledge Of Finance.

• Good Communication Skills.

SKILLS REQUIRED

Company

GAP ANALYSIS

a) Since the procedure and polices of the company will not allow to disclose confidential financial information, the project has to be

completed with the available data given to us.

b) The period of study that is 8 weeks is not enough to conduct detailed study of the project.

c) The study is carried basing on the information and documents provided by the organization and based on the interaction with the

various employees of the respective departments.

d) Lack of knowledge. Some of the lack full-fledged knowledge of the concept and its difficult to collect a specific opinion from

them.

e) The duration of the project is short to collect the required information accurately

GAP ANALYSIS

By this I conclude that the summer internship programme which has

been undergone in steel plant has been completed with the data given. I

had got aware of the real time corporate experience and this programme

has also helped me to approach many corporate persons.

I am satisfied with by work and task assigned to me.

CONCLUSION