A

PROJECT REPORT

ON

ANALYSIS ON
PROCUREMENT AND
ACCOUNTING OF RAW
MATERIAL

A Study in Bhilai Steel Plant

Submitted in the partial fulfillment

Of

GUIDED BY: - SUBMITTED BY: -

RITESH JAIN SHUCHITA
PAL
Assistant Manager (F&A) (BCOM)
Bhilai Steel Plant

CERTIFICATE

This is to certify that Shuchita Pal of Christ University

has successfully completed the project work title
“ANALYSIS ON PROCUREMENT AND ACCOUNTING
OF RAW MATERIAL” in Bhilai Steel Plant in partial
fulfillment of requirement of the award of Master in
Business Administration.

This project is the record of authentic work carried out

during 11th JUNE, 2022 to 6th JULY 2022 in BHILAI
STEEL PLANT.

GUIDED BY: -
MR. RITESH JAIN
Assistant Manager (F&A)
Bhilai Steel Plant
 ACKNOWLEDGEMENT

Words are indeed inadequate to convey our deep sense

of gratitude to all those who have helped us in
completing this summer project to the best of my ability.
Being a part of this project has certainly been a unique
and a very productive experience on our part.

I really thankful to Mr. RITESH JAIN, Manager (F &

A Dept.) for making all kinds of arrangements to carry
the project successfully and for guiding and helping me
to solve all kinds of quarries regarding the project work.
His systematic way of working and incomparable
guidance has inspired the pace of the project to a great
extent.

This acknowledgement is incomplete without giving

special thanks to the persons who are directly or
indirectly associated with the project.
We do sincerely hope that our report would give value to
the organization.

PREFACE

There’s a little bit of SAIL in everybody’s life….

“STEEL is the basic framework which has built nations,

and it is on this strength that nation stand apart. This
man-made metal has an extraordinary quality of
contributing to every aspect of life while it keeps the
wheels of industry turning. It also lends ever-lasting
quality to all kinds of structure and infrastructure.

‘SARDAR VALLABH BHAI PATEL’

It was for the first time I got the opportunity to work in

such a prestigious and well-known organization and
things which I have experienced in my training period
are going to help me throughout my life time. I have
worked on this project with great enthusiasm and zeal. I
have tried to cover almost all the things, which I have
experienced and learned during the training period. To
run a giant organization each and every department has
to play its role.

The main goal of my project is the “INCENTIVE

SCHEME and few things related to INCOME TAX”.
 It would be my great pleasure, if this project can help
this company to achieve its goal higher. This project has
been undertaken to study the procedures and practices
followed in Finance and Accounts department. The
Finance & Accounts Department of Bhilai Steel Plant is
divided into various sections and each section specializes
in different activities.

TABLE OF CONTENT

S.NO. TITLE

1 INTRODUCTION TO THE PROJECT

2 OBJECTIVES OF REPORT

3 RESEARCH METHODOLOGY

4 DATA SOURCES

5 LIMITATIONS OF THE STUDY

6 COMPANY PROFILE

7 DATA ANALYSIS &INTERPRETATION

8 FINDINGS & CONCLUSION

9 REFERANCE

OBJECTIVES OF REPORT

 To enhance the profit by minimizing

operational cost.
 To keep inventories low in relation to sales,so
that less capital is tied up in inventory.
 Efficient and economical handling of materials and
storage lowers the acquisition and possession cost
resulting in the reduction in the real cost.
 Continuity of supply of materials is essential for
eliminating the disruption in the production process.
In the absence of regular supply of materials,
production costs go up.
 Materials department is responsible for ensuring
quality of materials from outside suppliers. Therefore,
quality becomes the single most objective in
procurement of materials.
 The effective material control techniques help the
efficient handling of materials resulting in the
lowering of production cost.
 Good relations with the suppliers of materials enhance
the company’s standing in the society as well as in the
business community.
 Materials manager must devote special effort to locate
men at lower position who can take up the executive
posts in future.

Company profile

Steel Authority of India Limited (SAIL)

 About Steel Authority of India
The Steel Authority of India Limited (SAIL) has always
been the forerunner in the steel sector and tops the list
of steel-making companies in India.

They are fully integrated iron and steel maker – where

they produce both basic and special steels. These are
used for domestic construction, engineering, power,
railway, automotive and defiance purposes. The main
agenda is however to export.

Potential of Steel Authority of India

SAIL has been ranked amongst the top ten public sector
Indian companies in terms of turnover. SAIL has its forte
in manufacturing and selling a wide range of steel
products.

The different products of SAIL

 Hot and cold rolled sheets and coils
 Galvanised sheets
 Electrical sheets
 Structurals
 Railway Products.
 Plates
 Bars & rods
 Stainless steel
 Other alloy steels
Latest Financial Figures (Figures in Rs. Crores)
ET 500 Rank(2014) 27
Industry Steel
Turnover 48491.33
Profit after Tax(PAT) 2616.48
MCAP (Market 34758.41
Capitalization)
Assets 69792.18

SAIL's wide range of long and flat steel products have

high demand in the domestic as well as international
market. SAIL carries on its business through the wide
network of 37 Branch Sales Offices which are spread
across four regions, 25 Departmental Warehouses, 42
Consignment Agents and 27 Customer Contact Offices.
There are in all more than 2000 dealers and thus the
marketing division of Steel Authority of India Limited is
quite strong. This ensures that virtually every district of
the country gets quality steel.
There is a well-equipped Research and Development
Centre for Iron and Steel (RDCIS) at Ranchi of Steel
Authority of India Limited. It helps in producing quality
steel and also for developing new technologies for the
steel industry.

SAIL VISION:
To be a respected world-class corporation and leader in
Indian Steel business in quality, productivity,
profitability, and customer satisfaction.

CORE VALUES OF SAIL:

  Customer satisfaction.
 Concern for people.
 Consistent Profitability.
 Commitment of Excellence.

THE SEVEN C’s OF SAIL

 Complaint settlement.
 Culture of Customer Services.
 Consistent Quality.
 Committed Delivery.
 Customized Product Mix.
 Contemporary Products.
 Competitive Price.

Achievements of SAIL

Everybody has recognized the performance of SAIL,

including stakeholders, financial institutions, rating
agencies and industry bodies. This has helped them win
several awards in different fields across all financial
years.

The major awards in 2008-09 were –

 The highest number of Vishwakarma Award 2007
among both public and private sectors has been bagged
by SAIL employees: out of 28 awards, 15 awards went
 to the SAIL employees (54%).

 25 SAIL employees have received the Prime Minister's

Shram Awards 2006 (that comprises 42% of total
awards in India).

Recent developments of SAIL

1. The merger between Maharashtra Elektrosmelt Limited

(MEL) and Steel Authority of India Limited (SAIL) is to
take six more months. All the formalities are slated to
be completed by then.

2. Steel Authority of India (SAIL) has achieved a step

forward in the deadlock over Chiria iron ore mines. In
the last few years, Jharkhand government's refusal for
renewing the mining leases, had thrown the race for
Chiria open to global steel majors including
ArcelorMittal.

SAIL Today:

SAIL today is one of the largest industrial entities in

India. Its strength has been the diversified range of
quality steel products catering to the domestic, as well
as the export markets and a large pool of technical and
professional expertise.
Today, the accent in SAIL is to continuously adapt to the
competitive business environment and excel as a
business organization, both within and outside India.

Year SAIL BSP

Pig Iron 1.7% 0.1%

Bars & Rods 6.2% 4.0%

structures 15.3% 5.8%

Rly. materials 97.5% 91.2%

Total Long 8.7% 5.6%

Product

Plates 44.2% 19.5%

Total Fin.Steel 12.6% 7.1%

Semis 4.6% 1.1%

Saleable Steel 9.7% 4.9%

MAJOR UNITS
 Integrated Steel Plants
 Bhilai Steel Plant (BSP) in Chhattisgarh
  Durgapur Steel Plant (DSP) in West Bengal
 Rourkela Steel Plant (RSP) in Orissa
 Bokaro Steel Plant (BSL) in Jharkhand
 IISCO Steel Plant (ISP) in West Bengal

Special Steel Plants

 Alloy Steels Plants (ASP) in West Bengal
 Salem Steel Plant (SSP) in Tamil Nadu
 Visvesvaraya Iron and Steel Plant (VISL) in Karnataka
 Maharashtra Elektrosmelt Limited (MEL) in
Maharashtra

Other Units.
 Raw Material Division (RMD) at Kolkata.
 Central Marketing Origination (CMO) at Kolkata.
 SAIL Consultancy Division (SAIL CON) at New
Delhi.
 Research and Development Center for Iron and
Steel (RDCIS) at Ranchi
 Center for Engineering and Technology (CET) at
Ranchi.
 Management Training Institute (MTI) at Ranchi.
 Central Power Training Institute (CPTI) at
Rourkela, Orissa.
 SAIL Safety Organisation (SSO) at Ranchi.
 Environment Management Division (EMD) at
Kolkata.
 Growth Division (G.D.) a Kolkata.
 Central Coal Supply Organisation (CCSO) at
Dhanbad.
JOINT VENTURES : SAIL has promoted joint
ventures in different areas ranging from power plants to
e-commerce.

NTPC SAIL Power Company Pvt. Ltd: A 50:50

joint venture between Steel Authority of India Ltd.
(SAIL) and National Thermal Power Corporation Ltd.
(NTPC Ltd.),it manages the captive power plants at
Rourkela, Durgapur and Bhilai with a combined capacity
of 314 (MW).

Bokaro Power Supply Company Pvt.Ltd. This

50:50 joint venture between SAIL and the Damodar
Valley Corporation formed in January 2002 is managing
the 302-MW power generation and 1880 tonnes per hour
steam generation facilities at Bokaro Steel Plant.

Mjunction Services Ltd.: A joint venture between

SAIL and TATA Steel on 50:50 bases, this company
promotes e-commerce activities in steel and related
areas.

SAIL-Basel Service Center Ltd.: SAIL has formed

a joint venture with BMW industries Ltd. on 40:60 basis
to promote a service center at Bokaro with the objective
of adding value o steel.

Bhilai JP Cement ltd.: SAIL has also incorporated a

joint venture company with M/s Jaiprakash Associates
Ltd to set up a @.2 MT cement plant at Bhilai.

North Bengal Dolomite Ltd: A joint venture

between SAIL and West Bengal Mineral Development
Corporation Ltd. on 50:50 basis was formed for
development of Jayanti Dolomite Deposit, Jalpaiguri for
supply of dolomite to DSP and other plants.

Romelt_SAIL (India) Ltd.: A joint venture between

SAIL, National Mineral Development Corporation
(NMDC) and Russian promoters for marketing Romelt
Technology developed by Russia for reducing of iron
bearing materials, which is carried out with carbon in
single stage reactor with the use of oxygen.

Ownership and Management

The Government of India owns about 86% of SAIL's
equity and retains voting control of the Company.
However, SAIL, by virtue of its ‘Navratna’ status, enjoys
significant operational and financial autonomy.
MAJOR CAPITAL SCHEMES:
Bhilai steel Plant:
 Rebuilding of Coke O.
 Coke Oven batteries.
 Modernization of BFs (including Gas Cleaning
Plant).
 Installation of new Slab Caster, RH Degasser &
Ladle Furnace.
 Revamping of existing Slab Casters in phased
manner.
 New Pipe Plant of 0.2 million tones capacity.
 New Bar & Rod Mill (1 million tonnes).
 Logistics & Infrastructures.

Durgapur Steel Plant:

 Bloom Caster & associated facilities.
 Rebuilding of coke oven battery.
 Installation of a new Billet Caster.
 Up gradation of BFs &CDI (Coal Dust injection) in
BFs.
Rourkela Steel Plant:
 Rebuilding of Coke Oven battery.
 New Blast Furnace-2000m3.
 CDI & Reconstruction of BFs.
 Revamping of sinter Plant including Pollution
Control scheme.
Bokaro Steel Plant:
  New 2.5 million tones hot strip mill & 0.6 million
tones cold rolling mill.
 Installation of Slab Caster.
 Installation of New modern BOFs.
IISCO Steel Plant:
 Modernization of Steel Making Facility.
 New Multipurpose section mill/universal mill.
 Development of collieries.

SWOT Analysis of SAIL

STRENGTH
 Largest player in the Indian Steel industry.
 Strong backward integration like iron ore and
power.
 Very aggressive expansion plans.
 The single largest rail manufacturer in the world.
 Merger with IISCO would boost its profitability, as
SAIL would have access to IISCO’s underutilized
iron ore and coalmines.
 All its plants are a profit centers.
 SAIL is a virtually Debt-Free Company.
 The approved acquisitions and merger of NINL,
NISCO and MEL would result in synergy benefits,
operating efficiencies, cost savings and thus higher
profit.

WEAKNESS
  Concern in obtaining new mining leases and renewal
of old leases.
 Low liquidity in Stock Exchange (85.82% shares is
held by GOI itself).
 Heavily dependent on import of raw materials
(coking coal).
 It has high operation cost when compared to its
peers like Tata Steel, JSW Steel.

OPPORTUNITIES
 The Indian steel industry is poised for a robust
growth over the medium term. There would be
opportunities provided by a rapidly expanding
domestic market particularly infrastructure sector.
 SAIL is at the completion stage of its ongoing
modernization and expansion plan. Commissioning
of new state-of-the-art facilities will enable SAIL to
enhance its market share.
 Focus on infrastructure projects viz. industrial
freight corridors, new ports and new cities planned
along the freight corridors.
THREATS
 Intensification of competition from domestic as well
as foreign steel producers.
 Subdued domestic demand for steel could result in
excess steel capacity in the country.
 Adverse movement in prices of imported coking
coal.
RISKS AND CONCERNS
 Demand not growing as per expectation, whereas
increase in domestic capacities is resulting into
intense competition amongst domestic suppliers.
 Delayed Projects implementation.
 Constant depreciation of Rupee.
 Higher interest rates.
 Raw Material Securitization.
 Inadequate infrastructure for movement of imported
inputs/distribution of output.
 Bhilai Steel Plant

Bhilai steel plant a symbol of indo- soviet techno-

economic collaboration, is the one of first three
integrated steel plants se up by Government of India to
built up a sound base for industrial growth of the
country. The agreement for setting up the plant with
a capacity of 1 MT of ingot steel was assigned between
the Government of the USSR and India on 2ndFebruary
1955. Today the plant has already been expended to the
capacity of 4.0 million tone of crude steel & is producing
3.925 million tones of crude steel & 3.153million tones of
saleable steel.
 The plant was the 1stto produce wide (3600mm) &
heavy plates. A
majorexporter of steel products, Bhilai specializes
in shaped products such as heavy rails, heavystr
uctural merchant products of wore rods. Its coke making
& chemicals, hot metal & pig from, entire making facility
& Blooming and billet mill and all the finishing mills are
armed with ISO-9002 certification. Plate mill of Bhilai
Steel Plant has received the ISO-14001certification for its
Environment Management System.

Among various SAIL steel plant B.S.P, is only

plant, which has been earnings profits continuously.
More so when there has been a total loss to the tune of
1707 crore. BSP has individually earned a profit in
croreRs. for the year march 2003 - 732.20 BSP being
BSP being one of the plant where modernization has not
been fully effected & still B.S.P. is able to isolate itself,
by earning profit, is a matter of great pride for the
employee at Bhilai Steel Plant. Bhilai steel plant won the
Prime Minister Trophy for the “Best Integrated
Steel Plant” in the country five times out of eight times since
the inception of the award.

Bhilai Steel Plant is a flag ship unit of Steel Authority of

India Limited. SAIL, a fully integrated iron and steel
maker, produces both basic and special steels for
domestic construction, engineering, power, railway,
automotive and defense industries and for sale in export
markets. In terms of annual production SAIL is the 18th
largest steel producer in the world.

Living up to the description by Jawaharlal Nehru as

significant symbol of a new age in India, Bhilai Steel
Plant has been performing consistently despite many
odds and has achieved profits for the 18th consecutive
year. It broke its own record of highest ever profit of
Rs1932 crore by any steel plant in 2003-04 and
registered a profit of Rs 4042 Crores in 2004-05. In the
year 2005-06 also it earned a handsome profit of Rs.
2781 Crores despite input price escalation. The true
testimony to BSP’s status of a world class steel plant is
that BSP’s EBITDA margin of 33% is quiet comparable to
many International steel players like POSCO (30%),
NIPPON (19%), MITTAL STEEL (16%0, ARCELOR (16%),
etc. Its Gross Margin to average capital employed at
182% is a Global Benchmark. Maintaining the track
record, BSP continued to operate above the rated
capacity in production of the three main items viz. Hot
Metal, Crude Steel and Saleable Steel. BSP is the first
steel plant in India to have crossed the annual
production of 5MT crude steel in the year 2005-06. In
order to meet the challenges of Corporate Plan 2012 and
to maintain the leadership position of BSP in Indian steel
industry, the leadership has taken bold steps to make
significant investments for breakthrough improvements
in efficiency, resource management, knowledge and skill
by deploying world class tools. This year is a milestone in
BSP journey when new tools have been introduced viz.
ERP, Knowledge Management, Six Sigma, Multi-skilling
etc.

Bhilai Steel Plant functions as a unit of SAIL with its

corporate office at New Delhi. SAIL is governed by a
Board consisting of function Directors, Managing
Directors and government nominee Directors, 85.62% of
the shares of SAIL are with Indian Government and
balance are with financial institutions, mutual funds,
Indian Public and others, corporate office formulate
Policies, strategies and overall guidelines for its unit,
central organization like CMO (Central Marketing
Organization) RDCIS (Research and Development Center
for Iron & Steel ) CET ( Center for engineering and
Technology ) look after the relevant activities for the
plates under SAIL.

Over the years, Bhilai Steel Plant has developed an

organizational culture that run forces its commitment to
values and stimulates continuous improvements and
higher levels of performance. The chief executives at
Bhilai is the Managing director (MD) who is in overall
control of the operations of the plant, township and the
mines, Managing Director is assisted by his DRO’S i.e.
the functional heads (Executive directors/General
Manager) concept of Zonal heads and HOD’S helps in
integrating various functions with clear accountability
for achieving corporate vision, company goals and
objectives.
 Finance Department of Bhilai Steel
Plant

Introduction

Finance and accounts department of Bhilai Steel Plant is

one of the key department in the total organization .It
has two main functions i.e. Finance and Accounts. These
functions are carried out by various sections of finance
and accounts department. The objective of finance and
accounts department is always to meet the requirement
of line department while doing its own line functions
such as accounts maintaining, meeting statutory
requirements, budgetary control and advising on
financial matters etc.
This training report is an attempt to consolidate various
functions of accounts and finance department of Bhilai
Steel Plant, this report is based on the latest practices
and system being followed and would we very useful to
everyone functioning as finance and accounts executives
and for others as well. This will throw light on the
function and importance of finance and accounts
department in total organization.
This report is prepared with the contribution of all
managers of finance and accounts department. The
sections of finance and accounts department covered are
as follows

 Mines coordination
 Stores and Raw material section
 Freight and claims
 Purchase and contract concurrence section
 Project finance and accounts
 Costing and budgeting section
 Operation accounts section
 Wages section
 Cash section
 Sales invoicing and accounting section
 Excise and sales tax section.

ORGANISATION STRUCTUR OF FINANCE &

ACCOUNTS DEPARTMENT
 REFERENCE

www.google.co.in

www.sail.co.in.

Incentive.xlsx

Income-Tax-Calculator-FY-2022-23-Age-below-60-years.xlsx