BOKARO STEEL PLANT

Analysis of Working Capital Management

A Summer Internship Project For MBA (Finance)
By

Nishant Mishra MBA/1029/10

Under the guidance of Mr. R B Sharma Assistant Manager(F&A) 1

BSL ,SAIL

Acknowledgement At the very outset ,I wish to express my heartily gratitude to all those who extended their help ,guidance and suggestion and without whose help it was not possible for me to complete this project. I am deeply indebted to my guide Mr. R B Sharma, Assistant Manager, (F & A), BSL, SAIL, without whose support and help it would not have been possible. I am also thankful to all the employees who provided me with practical information about the accounting processes in SAIL. I express my deep sense of gratitude to the management of Steel Authority of India Limited, Bokaro Steel Plant for allowing me to undertake the project as well as to study the functions of various departments of the organization. My project wouldnt have been successful without the material assistance of a number of people. I would like to acknowledge the help rendered by each of them .I express profound gratitude to all the people who have been extremely inspirational in helping me complete this project.

DECLARATION I,Nishant Mishra hereby declare that the training project, entitled Analysis of Working capital management submitted to the Department of management BIRLA INSTITUTE OF TECHNOLOGY in partial fulfillment of the requirements for the award of degree of Master in Business Administration is a record of original and independent research work done by me during 30th may 2011 to 09 July 2011 under the supervision and guidance of Mr. R.B.Sharma (assistant Manager,Bokaro Steel Plant,SAIL), and it has not formed the basis for the award of any Degree/Diploma/Associate ship/Fellowship or other similar title to any candidate of the university.

Date:

Place:

Signature of Student

CONTENTS 1 01 2 02 3 03 4 04 3 05 4 -24 5 25 6 26 Acknowledgement Declaration C ertificate of approval Certificate from summer project guide Objective Company profile Research methodology Introduction 06

7 Graphical analysis 29-39 8 Ratio Analysis 41-49 8 50 9 10 11 12 13 Findings Conclusion Recommendation Bibliography List of abbreviations Annexture
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51 52 53 54 55-57

OBJECTIVE OF THE STUDY

The project aims to analyze the various components of working capital in BSL i.e. cash , inventory , receivables and payables .It also analyzes the various ratios and also performs a comparative analysis with the competitors and finally provided recommendations to manage the working capital more efficiently. To study and analyze the working capital policy of the BOKARO STEEL PLANT,SAIL To study the affairs of the company with reference to the working capital management and methods of its estimation used in the company. To understand the general performance of the company. To use quantities data for defining companys financial performance. To know the profitability, production and efficiency of the firm. To study the methods of financing working capital. To analyses the performance effectiveness of the company.

SAIL An Overview One of the leading producers of steel in the world and the largest steel maker of the country, SAIL occupies a prime place in the industrial scenario of India. Ranked amongst the top ten public sector companies in India in terms of turnover, SAIL manufactures and sells a broad range of steel product including hot and cold rolled sheets and coils, galvanized sheets, electrical sheets, structural, railway products, plates, bars and rods, stainless steel and other alloy steels. SAIL produces iron and steel at five integrated plants and three special steel plants, located principally in the eastern and central regions of India and situated close to domestic sources of raw materials, including the companies iron ore, limestone and dolomite mines. The company has the distinction of being India; largest producer of iron ore and of having the countrys second largest mines network. This gives SAIL a competitive edge in terms of captive availability of iron ore, limestone and dolomite which are input of steel making in the every integrated plant of SAIL.

SAIL operates and owns five integrated steel plants at Bhilai, Durgapur, Bokaro,

Rourkela, Burnpur and three speciality steel plants at Salem, Durgapur, and Bhadravati. SAIL is the single largest investment in public as on date and is also a symbol of countrys efforts towards indigenization. Over the years since its inception company has grown in a strength reaching increased levels of production. Over the years the plant has also made a definite contribution to the economy of the country. SAIL is the leading steel making company in India. It is fully integrated iron and steel maker producing both basic and special steels for domestic construction, engineering, power, railway, automotive and defense industries and for sale in export markets SAIL wide range of long and flat steel products are much in demand in the two clients world-wide domestic as well as international market. This vital responsibility is carried out by SAIL own Central marketing network of 34 branch offices and 54 stockyards located in major cities and towns throughout India. With technical and managerial expertise and know-how in steel making gained over decades, SAIL has a well-equipped Research and Development Centre for Iron and Steel at Ranchi which helps to produce quality steel and develop new technologies for steel industry. Besides, SAIL has its own in-house Centre for Engineering and Technology (CET), Management training institute (MTI) and safety organization at Ranchi. Our captive mines are under the control of the Raw materials division of SAIL operate from their headquarter in Kolkata. Almost all our plants and major units are ISO Certified.

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. SAIL has created its own Central Marketing Organization (CMO) and the International Trade Division to take care of its international and marketing operations The steel products manufactured by SAIL include:
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Hot and cold rolled sheets and coils Galvanized sheets Electrical sheets Railway products Plates, bars and rods Stainless steel and other alloy steels

Integrated Steel Plants

Bhilai Steel plant (BSP) in Chhattisgarh Durgapur Steel Plant (DSP) in West Bengal Rourkela Steel Plant (RSL) in Orissa IISCO Steel Plant (ISP) in West Bengal Bokaro Steel limited (BSL) in Jharkhand

2) BOKARO STEEL PLANT

History Bokaro steel plant brings out before ones eyes the vision of a massive giant in the making. Bokaro Steel Plant - the fourth integrated plant in the Public Sector - started taking shape in 1965 in collaboration with the Soviet Union. It was originally incorporated as a limited company on 29th January 1964,
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and was later merged with SAIL, first as a subsidiary and then as a unit, through the Public Sector Iron & Steel Companies (Restructuring & Miscellaneous Provisions) Act 1978. The construction work started on 6th April 1968. The Bokaro Steel Plant is hailed as the countrys first Swadeshi steel plant, built with maximum indigenous content in terms of equipment, material and know-how. Its first Blast Furnace started on 2nd October 1972 and the first phase of 1.7 MT ingots steel was completed on 26th February 1978 with the commissioning of the third Blast Furnace. All units of 4 MT stage have already been commissioned and the 90s' modernization has further upgraded this to 4.5 MT of liquid steel. Bokaro Steel Plant (BSL) situated in the coal belt of the eastern region, symbolize Indias advancement in the design, engineering & equipment suppliers & construction of steel plants. It is the 4th integrated steel plants in the public sector conceived in 1959; it actually started taking shapes in 1965, with the collaboration of SOVIET UNION. It was initially set up with a capacity of 1.7 million tones (MT) of flat products per annum with a provision to expand up to 4 million tones .It was incorporated as a limited company. The plant was conceived as the countrys 1st SWADESHI steel plant to be built with maximum indigenization going into the equipments, materials & know-how. The Bokaro Steel Plant is an integrated metallurgical unit engaged in the production of ingots, plates, sheets and coils. In the process, it also produce a number of by -products crude tar, Ammonium sulphate, Benzene, Xylene, Toluene, Coal Tar , Cresols. Medical Facilities The township has a modern 1100-bed Bokaro General Hospital (BGH) with specialized units like Critical Care Unit, Intensive Coronary Care Unit, Nuclear Medicine Laboratory, Ultra modern operation theatre complex and eye operation theatre. The child care unit of the hospital has been recognized as baby friendly hospital by the UNICEF. The blood bank has been given the status of regional training center by the central government, the only one in the Jharkhand. To take care of the employees working in plant, an occupational health service center has been provided within the plant premises. BGH has been granted the status of one of the training centers for students of nursing. The medical team boasts of around 200 doctors and 1000 paramedic staff.

Vision of Bokaro Steel Plant To be a respected world class Corporation and the leader in Indian steel business in quality, productivity, profitability and customer satisfaction. Mission of Bokaro Steel Plant We build lasting relationships with customers based on trust and mutual benefit. We uphold highest ethical standards in conduct of our business. We create and nurture a culture that supports flexibility, learning and is proactive to change. We chart a challenging career for employees with opportunities for advancement and rewards. We value the opportunity and responsibility to make a meaningful difference in peoples lives.

Strategic goals To continue in the business of steel and steel related activities To enhance market share in growth segments To improve profits by productivity improvements , cost reduction , high value added products and customer satisfaction To achieve excellence in quality across the value chain To secure availability of key raw materials and alleviate infrastructure bottleneck which may constrain long term growth

Major Units of Bokaro Steel Plant (a.) Raw Materials and Material Handling Plant The raw material and material handling plant receives blendes, stores and supplies different raw materials to Blast Furnace. It also maintains a buffer stock to take care of any supply interruptions.

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Some 9 MT of different raw materials like iron ore fines and lumps, limestones, dolomite lumps and chips, hard coal and manganese ore are handled every year. (b.) Coke Oven and By Product Plants

The coke oven complex at Bokaro converts prime coking coal into quality coke for the blast furnaces. The coke oven battery has 8 batteries with 69 ovens each, maintained in terms of fugitive emission control, use of phenolic water and other pollution control measures.

(c.) Blast Furnace

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Bokaro Steel Plant has five 2000 cubic meter Blast Furnaces that produce molten iron, hot metal for steel making. The process of iron making is automated using PLC (Programmable Logic Control) Charging System and Computer Controlled Supervision system. The waste products like furnace slag and gas are either used directly within plant or processed for recycling reuse. (d.) Steel Melting Shops(SMS)

Hot metal from the blast furnaces is converted into steel by blowing 99.5% pure oxygen through it in the LD converter. Bokaro has 2 steel melting shops SMS-I and SMS-II. SMS-I has 5 LD converters of 130T capacity each. It is capable of producing rimming steel through the ingot root. SMS-II has 2 LD converters each of 300T capacity with suppressed combustion system and continuous casting facility. It produces various killed and semi- killed steels.

(e.) Continuous Casting Shop

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The CCS has two double strand slab casting machines producing high quality slabs of width ranging from 950mm to 1850mm. The CCS has a ladle furnace and ladle rinsing station for secondary refining of steel. The ladle furnace is used for homogenizing the chemistry and temperature. CCS produces steel of drawing, deep drawing, extra deep drawing, boiler and tin plate quality. (f.) Slabbing Mill

Slabbing Mil transforms ingots into slabs by rolling them in its 1250mm Universal FourHigh Mill. The rolling capacity of the mill is 4MT per annum. The shop has hot and cold scarfing machines and 2800T shearing machine.

(g.) Hot Strip Mill (HSM)

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Slabs from CCS and Slabbing Mill are processed in the state- of-the-art hot strip mill. The fully automated Hot Strip Mill with an annual capacity of 3.363 million tones 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 stateof-the-art automation and controls, using advanced systems for process optimization with on-line real time computer control, PLCs and technological control systems. (h.) Hot Rolled Coil Finishing

All the Hot Rolled Coils from the Hot Strip Mill are received in HRCF for further distribution or dispatch. HR Coils rolled against direct shipment orders are sheared and finished to customers required sizes and dispatched to customers. The shop has two shearing lines with capacities of 645000T per year and 475000 T per year respectively.

(i.) Cold Rolling Mill

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Cold Rolling Mill at Bokaro uses state-of-the-art technology to produce high quality sheet gauge material, tin mill black plate and galvanized products. Cold Rolling is done to produce thinner gauge strips of very smooth and dense finish, with better mechanical properties then Hot Rolling Mill. Rolling is done well below recrystallization temperature without any prior heating of the material. The products of CRM are used for deep drawing purposes, automobile bodies, railway coaches and coated steels. (j.) Hot Dip Galvanizing Complex The Hot Deep Galvanizing Complex integrated with the CRM produces zinccoated cold rolled strips resistant to atmospheric, liquid and soil corrosion. The continuous coil corrugation line in the HDGC produces corrugative sheets and galvanized sheets.

Revenue and Profits of Bokaro Steel Plant

2009-10(in crores) Profits Turnover 2830 12038

2008-09(in crores) 1345 11858

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Product Profile Products of Bokaro Steel Plant

Bokaro Steel Plant - Product Basket

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Mill Capabilities Sho p Products Facility Annua l Capac ity (,000 Tonne s) 3955 Thickne Width ss range range (mm) (mm) Lengt h (metr e)

HS M HR CF

HR Coils/ Sheets/ Continuous Plates Mill HR Sheets/ Shearing Plates Line-I HR Sheets/ Shearing Plates Line-II HR Coil Slitting Line CR Coils/ Sheets CRM-I complex CR Coils/ Sheets CRM-II complex CR Coils/ Sheets, DCR Mill TMBP GP Coils & Sheets HDGL GC Sheets

1.6 -16 5-10 1.6-4

9001850 1800 1500

2.5-12 1.54.5

CR M

1660 0.63-2.5 0.63-1.6 100 170 0.22-0.8 0.3-1.6 7001850 6501250 6501040 6501250

Special Grades of Steel As per the demand of the market, Bokaro Steel Plant has the capacity to produce the special grades of steel. Special Steel Grades SAE 1541 MC 11 SPC 370/390 C 15 Application Automobile Industry Cycle Industry Cycle Industry Cycle Industry

API X-42, X-46, X-52, X-56, X-60 Pipe Line (SAILAPI) SAILCOR (corrosion resistant) Railways SAILMEDSi (Medium Silicon Steel) Heavy Electrical Winding
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SAILPROP

Propeller Shaft

Strapping Steel (for internal use Strapping Finished Products only) Full-hard Galvanized Coil Extra hard roof of houses Cold Rolled Medium Electrical Steel Extra-low Carbon Extra Drawing (HR & CR) DMR 249A Grade Steel Transformer core Deep White goods

Defense Research Development Organization (DRDO) for fabrication of Submarine parts (import substitution) E460/E500/E550 Floating bridges for Defense. For M/S BEML; for making. (import substitution) IS8500 Fe 540B high strength low Kolkata fly-over alloy steel with UTS value in excess of 540 Mpa Low Carbon, Low Manganese, High Structural purposes. ThermoStrength Structural Steel without mechanically Controlled micro alloying (Carbon 0.10% ) Processing.

2.5) Current Market Share of Bokaro Steel Plant (In percentage) PRODUCT HR coil HR sheet CR coil/sheet GP/GC sheet/ coil 09-10 26.9 23.6 12.1 11.0
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08-09 24.9 23.6 16.7 8.9

2.6) Manpower of Bokaro Steel Plant

EMPLOYEES Executives (Regular) Non-Executives (Regular) Plant Attendant Trainees (STs, JTs, MTs) Casual Total

As on 2010 3390 21996 474 153 109 26122

1st

June

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SWOT ANALYSIS

STRENGTHS

Countrywide network of stockyard, dockyard and branches. Internationally standard product. Customer friendly products. Skilled and experienced workforce and team spirit. Vast infrastructure resources. Ready to accept challenges and commitments towards hardworking. Distinct brand equity. Enough competence in salvaging equipment and activities. Benchmarking for best quality steel. Safety discussions before start of work.

WEAKNESS

Poor proximity to major consuming centers. High overheads and fixed cost. Adverse age mix of workers and high average wage. Documentation of failure & break down. Executive oriented maintenance. Lack of training facilities on new maintenance technology. By passing the norms and systems.

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OPPORTUNITIES Since SAIL has wide network of stockyards & branch offices, it can achieve higher customer base by direct approach with customers.

SAIL has a very strong base; it can diversify into the production of different goods as per market requirement.

THREATS Increased competition in the market with other domestic producers. Obsolescence of existing technology. High cost of input material. Tight money market situation. Declining global steel demand and prices. Constraints in availability and cost of critical raw material like coking coal. Infrastructure constraints, viz. ports, railways, etc.

2.7) Competitors of Bokaro Steel Plant

Essar Steel Jindal Steel Saesa Goa Nippon Denro Ispat Usha Ispat Lanco Industries Limited

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Role of Finance and Accounts

Finance is described as science of money and involves the process of conversion of accumulated funds to productive use .The essence of the effective financial management is that the income generated should be greater than the cost of procuring and processing the raw materials by optimum utilization of the same. In the recent changed business scenario which is the outcome of changed Indian economic policy from command economy to free economy to integrate the Indian economy to the world economic order .The role of financial manager has become a crucial one since the factor of efficiency in all productivity field has become paramount. In a multi process industry like an integrated steel plant like this one where some processes remain involved in certain endothermic behavior of cost one finds it difficult to prepare the cost benefit analysis ,hence in deciding the optimum level of activity because each level of activity can be attained with the various number of alternative resources available at a particular point in time. F&A is an important department of BSL headed by ED .There are 34 production cost centers ,24 service centers and 18 job costing centers of engineering shops : Cost and budget section allows process costing systems for its production and service centers job costing method for its engineering shops for maintaining its cost record like production and consumption of RM,power,fuel,stores, spares etc. .In production and service cost per unit is determined upon output and in engineering shop cost is determined upon machine hour rate .Monthly and annual cost is prepared on actual basis and derivations are reported to higher management through MIS report. The reporting of actual business performance and analysis of reason for variance with planned one is done by use of management accounting techniques like variance analysis ,ratio analysis and sensitivity analysis .Cost reduction activity is being monitored by cost and budget section and performance in this stage is brought to the notice of higher management.

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Organizations like SAIL which have various units and subsidiaries, finance and accounts plays an important role. 3.1) Sections in Finance and Accounts

CODE-01 PAY SECTION It deals with the accounting of employees related salary slip .Basically deals with any activity related to pay. Loan Bonus Any monthly payments taken once in a year

CODE-02 MAIN ACCOUNTS SECTION It deals with the consolation of accounts with each quarter along with the final close. It prepares a main ledger, assets ledger, section ledger and trial balance etc..It prepares and maintains assets register of the company .It facilitates the inter plant reconciliation , coordination with the various auditors.

CODE-03 PURCHASE ACCOUNTS It basically deals with the payments and accountings of all the goods against which purchase order has been placed. Its work starts when goods are received and verified with GRN (goods and returned notes).They receive and verify the bill.

CODE-04 CASH ACCOUNT It deals with the disbursement and receipt of cash as per the bills passed by the officers of various sections .Its main function includes monitoring of cash deposit ,liasioning with banks.They generally prepare the bank reconciliation statements(BRS).They deal with Rs 350-380 crores of expenditure on monthly basis. Whereas the revenue side consists of lease, rent etc.
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CODE-05 PROJECT FINANCE It deals with the project accounting (not with the project calculation).Basically it deals with the payments to parties related to different projects.

CODE-06 ESTATE ACCOUNTS It deals with the accounting of IPU cases.IPU is investment in planning unit and is related to projects.

CODE-08 STORE ACCOUNTS It deals with the accounting and maintenance of stores ledger .receipt, balance of inventories etc.Stores department has the custody of around two lakh items. The document raised by the stores department is: Issue notes Material return notes Dispatch notes Goods receipt notes Stock transfer voucher Stock adjustment voucher Provisional voucher Book transfer voucher CODE-09 PROVIDENT FUNDS It deals with the accountings of employees provident funds along with the loans taken against provident funds balance. CODE-10 FREIGHT ACCOUNTS
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It deals with the payments and accounting of freight bills related to raw materials .This section generally deals with the freight inward whereas outward is dealt by the invoicing section(which is not the part of sales accounts). CODE-11 INSURANCE SETION It deals with the accounting of sales tax matters which are related to steel goods CODE -12 OPERATIONAL PAYMENTS SECTION It deals with the payments of those expenditures which are generally not related with any particular department like Telephone bills Water bills-15 crores Township management bills Aviation Miscellaneous payments City park (horticulture) In plant scrape recovery-15 crores Railways-10 crores Sports CMO

CODE-14 SALES ACCOUNTS It deals with the preparation of invoice and accounting thereof.

CODE-15 COST AND BUDGET There are 77 cost centers .They prepare the budget on monthly ,quarterly and annual basis .They deal with daily profits.They prepare the MIS reports
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.They make the valuation of finished /semi finished stock of plant .Actually this section decides the rate of each output. CODE -16 RAW MATERIAL It deals with the accounting of raw material consumption including Ferro and non Ferro items.It deals with evaluation of raw materials as well as payment of bills related to raw material. CODE-17 EXCISE ACCOUNTS It deals with the CENVAT ,Excise duty. CODE -18 VAT It deals with the accounting and payments of VAT to central governments. Finance and Accounts Department Organization Chart
ED (F&A ) GM (F&A )

DG M (F& OF,Proje ct Finance, A/C admin, Cash A/C, Insuranc e&Claim s, Hindi Cell,Qual ity Circle & Suggesti on Scheme

DGM (F& A) Pay A/C,PF & Pensio n, Time Office, Estate A/C, BGH

DGM (F&A ) C&B, Main A/C, Stock Verific ation, MIS, Govt. Audit and Intern al Audit

DGM (F&A ) Purchas e& Stores A/C,RM A/C, Railway Freight & Claim, Opas, Direct Taxes 26 Report

DG M(F &A) Sales & Excise ,Servic e Tax ,Indire ct Taxes Report & Return

DGM (F&A ) Kolkat a A/C

DGM (F&A)

ERP

RESEARCH METHODOLOGY

The research began with the study of finance and accounts department in BSL, their major sections and their respective activities. It was then followed by the study of various production plants to understand the production flow in the steel plant. The study of various production plants gave the idea of the inventory levels maintained in these plants.

The study was directed towards the analysis of working capital management in BSL which included the analysis of the various components of working capital, the percentage of various components maintained in BSL, determination of operating cycle and the cash conversion cycle, the companys policy towards its various suppliers and customers. The study further included ratio analysis to determine the liquidity and profitability of the firm.

The data was collected from the following sources: Primary sources: Records of previous years profit and loss statements, balance sheets and cash flow statements Information provided by the senior finance executives and chartered accountants of BSL

Secondary sources: Secondary data was collected from the internet magazines, circulars issued by SAIL and books. and various

Working Capital Management

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Working Capital The term working capital refers to the amount of capital that is readily available to the organization. That is , working capital is the difference between the resources in cash or readily convertible into cash (current assets) and the organizational commitments for which cash will soon be required ( current liabilities). Current assets are resources which are in cash or will soon be converted into cash in the ordinary course of business. Current liabilities are commitments which will soon require cash settlement in the ordinary course of business. Thus: Working capital = current assets current liabilities In a departments Statement of Financial Position, these components of working capital are reported under the following headings: Currents assets include: Sundry debtors Inventories Interest receivable Cash and balances Loans and Advances

Current liabilities include: Bank overdraft Bill payable Creditors Outstanding expenses Short term loans

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Provisions(excluding provisions for gratuity ,VRS, Accumulated leave)

Importance of Good Working Capital Management Working capital management constitutes part of the Crowns investment department .Associated with this is an opportunity cost to the Crown (money invested in one area may cost opportunities in other areas).If the department is working with more working capital than is necessary, this over investment represents an unnecessary cost to the Crown. From a departments point of view, excess working capital means operating inefficiencies .In addition, unnecessary working capital increases the amount of the capital charge which departments are required to meet since July 1, 1991. Approaches to Working Capital Management The approaches of working capital management is to maintain the optimum balance of each working capital components .This includes making sure that the funds are held as cash as bank deposits for as long as and in the largest amounts possible to meet the immediate liabilities . Working capital can be managed in two ways: Ratio analysis can be used to monitor overall trends in working capital and to identify areas requiring closer management. The individual components of working capital can be effectively managed by using various techniques and strategies.

When considering these techniques and strategies, departments need to recognize that each department has a unique mix of working capital components .The emphasis that needs to be on each component varies according to the various departments. For example some departments have significant inventory levels while others have little. The working capital requirement of a firm depends to a great extent upon the cash conversion cycle of the firm .The cash conversion cycle may be defined as the time duration starting from the procurement of the goods and raw materials and the ending with the sales realization of the finished product(after going through the various stages of production)

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Thus the cash conversion cycle of the firm consists of the time required for the completion of the chronological sequence of the following: Procurement of raw materials and services Conversion of raw material into work in progress Conversion of work in progress into finished goods Sale of finished goods Conversion of receivable into cash

Cash conversion cycle = Inventory days + Accounts receivable days Accounts Payable days = (inventory *365)/COGS + (Ending A/R *365)/Sales (A/P 365)/purchases

Operating Cycle Period Operating cycle may be defined as the sum of the inventory days and the accounts receivable days Operating cycle = inventory days + Accounts receivable days = (inventory * 365) / COGS + (Ending A/R * 365) / Sales Inventory Conversion Period Inventory Inventory represents one of the most important assets that most businesses posses because of the revenue generation and subsequent earnings for the companies shareholders /owners. It consists of raw materials, work in progress and finished goods inventories. Possessing a high amount of inventory for long periods of time is not usually good for a business because there are inventory storage, obsolescence and spoilage costs .However possessing not enough good inventory is also not good either because the business runs the risk of losing out on potential sales and potential market share as well. Inventory management helps in forecasting the demand and formulating strategies, such as just in time inventory system can help minimize inventory costs because goods are created or received inventory only when needed.

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Need to hold inventories Holding inventories involves tying up of companys funds storage and handling costs .There are generally three general motives for holding inventories: 1. The transaction motive emphasizes the need to maintain inventories to facilitate smooth production and sales operation. 2. The precautionary motive emphasizes on the need to maintain inventories in case of shortage in production. 3. The speculative motive

Size of inventories The dominant position of inventories in working capital of Bokaro Steel Plant makes it relevant to throw light on each component of inventory at BSL.The size of inventory and percentage of inventory to total current assets in BSL.is presented in the table shown: YEAR INVENTORIES(i n crores) 1365.6 1185.5 1755.02 TOTAL CURRENT ASSETS(in crores) 1826.1 1835.9 2312.02 % Of INVENTORIES TO CURRENT ASSETS 74.78 64.59 75.87

2008 2009 2010

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Size of inventories shows a major portion of current assets consists of inventories. Inventory in general has decreased in 2009 which because of the increase in sales of steel products. Similar is the case in the year 2009 while in the year 2010 due to recession the sale of steel goods declined.

Raw Material Inventory Raw materials constitute a very small portion of inventories. Raw materials basically includes coal, coke, iron ore, limestone etc. Size of raw material to total inventories has been shown below: YEAR 2008 2009 2010 RAW MATERIAL(in crores) 256.21 168.28 288.11 INVENTORIES(i n crores) 1365.6 1185.7 1755.02 % OF RAW MATERIALS TO INVENTORIES 18.76 14.19 16.41

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Raw material inventory increased in the year 2010 due to increase in production of steel goods. Due to less demand the consumption of flat products has decreased. 4.3.5) Stores and spare inventory Inventories of stores and spares form a sizeable portion of the total inventories. The stores and spares inventory consists of items like mechanical spares, electrical spares, general spares, refractory, rolls, steel etc.

YEAR 2008 2009 2010

STORES AND INVENTORIES(i SPARES(in n crores) crores) 341.29 1365.6 467.98 1185.7 540.47 1755.02

% Of STORES AND SPARES TO INVENTORIES 25 39.47 30.79

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The size of stores and spares inventory increased in the year 2009 because of the increase in the production capacity of the plant. The production capacity was increased to meet the increased demand for steel hence more stores and spares were required.

Finished and semi-finished product inventory A manufacturing firm cannot do away with this inventory. It introduces flexible business operation which enables the firm to provide better customer service. This product consists of pig iron, saleable steel like HR coil,CR coil,CR plate etc.Size of semi-finished inventory is: YEAR SEMIFINISHED PRODUCTS(in crores) 768.06 549.48 926.44 INVENTORIES(i % OF SEMIn crores) FINISHED PRODUCTS TO INVENTORIES 1365.6 56.25 1185.7 46.34 1755.02 52.78

2008 2009 2010

In the yr 09 there is an increase in

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demand which declined in the yr10

The similar increasing trend is seen in the year 2009 as in the case of other components of inventories. The size of semi-finished inventory in the year 2009 was high due to increase in demand of steel.

Inventory conversion period is the time required for the conversion of raw material into finished goods for sale.ICP consists of RMCP, WPCP and FGCP. RMCP or raw material conversion period is the time period for which the raw material is generally kept in stores. It is taken care by the production department. WPCP or work in process conversion period is the time period for which the raw materials remain in the production process before they are taken out as finished goods. FGCP or finished goods conversion period refers to the time period for which the goods remain in the stores before being sold to the customers.

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Receivable Conversion Period

According to Joseph L.Woods, the purpose of any commercial enterprise is the earning of profit. Credit in itself is utilized to increase sales but sales must return a profit. Receivable management also termed as credit management in corporate enterprise has gained significance on the accounts of its positive contribution towards increasing profitability through increased turnover.

Objective 1. Reduction in risk due to future payments 2. Increase in profit due to increased sales 3. Maintain sufficient amount of liquidity in order to pay immediate liabilities The purpose is to maintain optimum level of sales by keeping down the average collection period, control over the cost of credit, default cost(inability of a customer to pay debts). Credit policy The important decision variable of a firms credit policy is credit standards, credit terms, quality of trade accounts, length of credit period and collection effort. Size of receivable In BSL, the receivable comprises of sundry debtors ,loans and advances. The receivables constitute a substantial portion in the current assets YEAR RECEIVABLES(i n crores) TOTAL CURRENT ASSETS(in crores)
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%OF RECEIVABLES TO CURRENT TOTAL

2008 2009 2010

399.85 595.19 501.99

1826.1 1835.9 2312.02

ASSETS 22.11 21.47 32.42

Size of receivables increased in the year 2009 due to the delay in the payment of cash by the customers due to the downturn. However it was managed well in the year 2010.Receivable collection period refers to the period between the occurrences of credit sales and collection of debtors. The operating cycle of a firm can be shown as

RMCP

WPCP

FGCP

Inv conversion period

Receivable collection period

Operating cycle

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Operating Cycle Period (2008-2009) Raw Material Holding period= (Raw material*365)/total consumption Raw material=168.28 crores Total consumption=3672.8crores Holding period= (168.28*365)/3672.8 =17 days Work in progress WIP=549.48crores Cost of production=COGS-Excise duty-Freight outward-CMO Expenses =9207.14-1660.95-168.18-63.49 =8808.56crores Holding period = (inventory *WIP)/COPE = (549.48*365)/8808.56 = 23 days Finished goods
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Finished goods=549.48 crores Cost of goods sold= sales profit =12037.57-2830.43 =9207.14 Holding period= (Finished goods inventory*365)/COGS = (549.48*365)/9207.14 = 22 days

Companys Policies Credit given to customers=30 days Credit given to suppliers = 15 days Operating cycle Operating cycle=RM holding period+WIP holding period Finished goods holding period Credit given to customers =17+23+22+30 =92 days Cash conversion cycle= RM holding period+WIP holding period Finished goods holding period Credit given to customers-credit given to suppliers =17+23+22+30-15 =77 days 4.6) Operating Cycle Period (2009-2010)
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Raw Material Holding period= (Raw material*365)/total consumption Raw material=288.11 crores Total consumption=5458.55crores Holding period= (288.11*365)/5458.55 =19 days Work in progress WIP=926.44crores Cost of production=COGS-Excise duty-Freight outward-CMO Expenses =10571.19-1394.90-143.63-7.68 =8964.98crores Holding period =(inventory *365)/COPE =(926.44*365)/8964.98 = 38 days Finished goods Finished goods=926.44 crores Cost of goods sold= sales profit =11857.69-1292.78 =10571.19 Holding period=(Finished goods inventory*365)/COGS =(926.44*365)/10571.19
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=32 days Companys Policies Credit given to customers=30 days Credit given to suppliers = 15 days Operating cycle Operating cycle=RM holding period+WIP holding period Finished goods holding period Credit given to customers =17+23+22+30 =119days Cash conversion cycle= RM holding period+WIP holding period Finished goods holding period Credit given to customers-credit given to suppliers =17+23+22+30-15 =104 days

5) Comparison

PARAMETER(in days)/YEAR RM holding period WIP holding period FG holding period

2008-09 17 23 22
41

2009-2010 19 38 32

Debtor period Creditor period Operating cycle

30 15 92

30 15 119

Analysis Operating cycle As per the analysis shown above the operating cycle has increased from 92 days to 119 days in one financial year i.e. from the year 20082009 to 2009-2010.This indicates that if we look at the operating cycle as an indicator of efficiency then efficiency has declined in the past one year i.e. now they need 27 more days to convert raw materials to finished goods and thus its now adding an extra burden to their inventory cost of RM, WIP, FG. Holding period As observed in the BSL,the holding period of RM,WIP and FG have come up. This increased holding period indicates that they are now spending more and more money on storing, maintenance and guarding of their FG and RM. Due to the its excess operating cycle BSL now needs more borrowing from financial institutes for its day to day and long term operations because now the conversion to cash takes a longer time .The demand for flat products has gone down due to the economic recession. Hence the operating cycle and the holding period of BSL has gone up.

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Working Capital Status of BSL

From the above graph it can be inferred that the working capital of BSL has decreased over the previous years .The working capital of BSL in the year 2009-10 has decreased by 16.97 crores since the year 2008-09.It can be seen that there has been a increase in the current assets as well as the current liabilities but the proportionate increase in the current assets is less than that of the current liabilities. The increase in the current assets is due to the increase in the inventories and the cash and bank balances while the increase in the current liabilities is due to the increase in the security and other deposits and the provisions. The increase in current assets can be attributed to the fact that the production in BSL is not in accordance to the demand, there has been a decline in the demand for flat products due to recession resulting in the piling up of inventories. The current liabilities has gone up due to the increase in provisions for wage revision .The wage revision happens every 5 years for non executives and every 10 years for non executives.

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Working Capital of Various Units of SAIL (2009-10)

Source: Balance Sheet of SAIL as on 31st March,2010

BSL 641.94

ISP 115.37

ASP 303.98

SSP 694.58

RMD 463.62

VISL 354.69

BRL -7.93

Looking at the various other units of SAIL, we observe that the working capital of BSL is very high compared to the other units of SAIL . The plants ISP , RMD ,BRL have negative working capital which shows that the account payables for these plants is very high or in other words the working capital needs of these plants is being funded by their suppliers. Instead of paying to the suppliers these plants reinvest the funds in the plants itself , thus their working capital comes out to be negative. While in the case of Bokaro Steep Plant , the working capital is very high due to the a very large inventory stock , as well as a high cash and bank balances . BSL has to reduce these two components of current assets in order to manage their working capital efficiently. Also the piling up of inventory has taken place due to the less demand of flat products ( products of BSL) due to economic recession.

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Ratio Analysis Calculations (2008-09) 6.1)Liquidity Ratios: a)Current Ratio: Current Assets =Rs.1835.88 crores Total current liabilities =Rs.1520.01 crores Current ratio=current assets/current liabilities and provisions =1835.88/1520.01 =1.21 times b)Quick Ratio: Inventory=Rs.1185.74 crores Quick ratio=(total CA-inventory,balance with custom and railways)/total current liabilities =(1835.88-(1185.74+80.34))/1520.01 =569.8/1520.01 =0.37 times 6.2)Activity Ratios: a)Capital turnover ratio: Net Sales=Rs.12037.57 crores Working Capital=Total CA-Total CL =Rs.315.87 crores Net capital employed=Net block Working Capital(Net Block=Gross blockdepreciation) =2282.24+315.87 =Rs.2598.11 crores Capital Turnover Ratio=Net sales/Net capital employed
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=12037.57/2598.11 =4.63 times

b) Inventory Turnover Ratio: Net Sales = Rs.12037.57 crores Inventory=Rs.1185.5 crores Inventory turnover ratio=Net Sales/Inventory =12037.57/1185.5 =10.154 times c) Working Capital Turnover Ratio: Net sales=Rs.12037.57 crores Working Capital=Rs.315.87 crores Working Capital turnover ratio=Net sales/WC =12037.57/315.87 =38.11 times

d) Fixed Asset Turnover Ratio : Net sales=Rs.12037.57 crores Net fixed assets=Rs.2658.77 crores Fixed asset turnover ratio=Net sales/Net fixed assets =12037.57/2658.77 =4.52 times

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6.3)Profitability Ratios: a)ROI(Return on investment): PAT=2830.43 crores Capital employed=Net fixed assets+WC =2658.77+315.87 =Rs.2974.64 crores ROI=PAT/capital employed =2830.43/2974.64 =0.476 b) Gross Margin: Gross margin=Net profit+depreciation+Interest =2830.43+246.7+40.41 =Rs.3077.17 crores c) Net Profit Margin: PAT =Rs.2830.43 crores

Net Sales=12037.57 crores Net profit margin=PAT/Net sales =2830.43/12037.57 =0.12 =12%

Ratio Analysis Calculations (2009-10)

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7.1)Liquidity Ratios: a) Current ratio: Current assets =Rs.2312.02crores

Total current liability =Rs.2013.12crores Current ratio =current assets/total current liabilities =2312.02/2013.12 =1.14 times b) Quick Ratio: Inventory Quick ratio =Rs.1755.02crores = (total CA-inventory, balance with custom and railways)/total current liabilities =[2312.02-(1755.02+47.25)]/2013.12 =0.25 times

7.2)Activity Ratio: a) Capital Turnover Ratio: Net sales =Rs.11857.69crores

Working capital =total CA-total CL =Rs.298.90crores Net capital employed=Net block + Working capital =2245.71+298.90 =Rs.2544.61 crores

Capital turnover

= Net sales/Net capital employed =11857.69/2544.61

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=4.65 times b)Inventory Turnover Ratio: Net Sales = Rs.11857.69 crores Inventory=Rs.1755.02 crores Inventory turnover ratio=Net Sales/Inventory =11857.69/1755.02 =6.75 times

c) Working Capital Turnover Ratio: Net sales Working capital =Rs.11857.69crores =Rs 298.90crores

Working capital turnover ratio=Net sales/WC =11857.69/298.90 =39.67 times

d ) Fixed Turnover Ratio: Net sales =Rs.11857.69crores

Net fixed assets =Rs.3424.67crores Fixed turnover ratio=Net sales/Net fixed assets =11857.69/3424.67 =3.46 times

7.3)Probability Ratio:

a) ROI (Return on investment)

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PAT=292.72 crores Capital employed=Net fixed assets + W.C =3424.67 + 298.9 =Rs.3723.57crores ROI =PAT/Capital employed =1292.78/3723.57 =0.173 b) Gross Margin: Gross Margin =Net profit + Depreciation + Interest =1286.50 + 246.74 + 52.77 =Rs.1586.01 crores

c) Net Profit Margin: PAT=1292.78 crore Net sales=Rs. 11857.69 Net profit margin =PAT/Net sales =1292.78/11857.69 =0.054=5.4%

Comparative

Analysis (with previous years figures)

The financial statement analysis of BSL has been shown for two consecutive years. Ratio analysis has been used adopted as an analytical tool and following ratios have been analyzed. PARAMETER/YEAR A)LIQUIDITY POSTION 2008-09 2009-10

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Current ratio Quick Ratio B)ACTIVITY RATIO Capital Turnover Ratio Inventory Turnover Ratio Working Capital Turnover Ratio Fixed Asset Turnover Ratio C)PROFITABILITY RATIO ROI Gross Margin Net Profit Margin

1.21:1 0.37:1 4.63:1 10.154 38.11:1 4.53:1

1.14:1 0.25:1 4.87:1 6.75 39.67:1 3.46:1

0.476:1 3077.2 0.12:1

0.176:1 1586.01 0.054:1

Liquidity position: It shows the ability of the firm to pay its obligations as and when they become due for payments. Current Ratio: The current ratio for the year 2009-10 has decreased due to the increase in the provisions which has increased the total current liabilities. The current ratio shows a decrease in the year 2009-10 due to the increase in the liabilities ( increase in security deposits and provisions).A current ratio greater than 1 indicates that the company holds a good liquidity position from the banks point of view. Quick Ratio: The quick ratio also shows a decline due to the increase in the current liabilities and due to the increase in the inventories.The low status of the most liquid assets is not a major concern as it is centrally managed by the mother unit SAIL.

Activity inventory fact that Similar is ratio.

Ratio: The activity ratios suggest that the number of times turns over has decreased to almost 6 times clearly indicating the the goods of BSL are in less demand and have been piled up. the case with working capital turnover ratio and capital turnover

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Profitability Ratio: The profit of the company has decreased from 2830.43 crores to 1292.78 crores in the year 2009-10 .This has happened due to the economic slowdown which is a matter of concern.

Comparative Analysis (with its competitors)

Investment policy (2009-10) BSL GWC Net Sales GWC/Net Sales 1237. 48 10376 .62 0.119 257 Essar Steel 2587.05 11,717. 40 0.22078 703 Tata Steel 4580.03 24,348.3 2 0.188104 559

From the above table we can see that BSL ,SAIL follows a conservative investment policy as compared to its competitors . Financing policy (2009-10) BSL STF 0 Current assets 1237. 48 .3* current 371.2 assets 44 STF/.3*current 0 assets Essar Steel 993.77 2,587.05 776.115 1.2804416 9 Tata Steel 23,033.13 4,580.03 1374.009 16.7634491 5

From the above table , it can be concluded that BSL,SAIL has a conservative financing policy as compared to the industry average.BSL has conservative investment as well as financing policy. This may be due to the to the effect of the economic recession which has made the market more unpredictable and has increased the risk. Hence the creditors are less averse in giving credit Also, due to the less demand and hence less production the inventory stock has decreased leading to a conservative financing policy.

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BSL, SAIL depends more on long term financing to support its working capital needs as its STF is 0.Thus it pays higher interest rates. This makes ROA of the company high thus decreasing the profits as is evident from the previous calculations.

Liquidity Analysis (2009-10) BSL Current Ratio Quick Ratio Inventory Turnover Ratio Number of Days in Working Capital (in crores) Operating cycle 1.14 0.25 6.54 SAIL 1.82 1.24 5.86 Essar Steel 0.71 0.62 8.69 48.54 Tata Steel 0.91 0.57 9.36 -4.56

119 days Cash Conversion 104 Cycle days Profitability

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Findings
Current Ratio: A current ratio of 1.14 in BSL and 1.82 in SAIL states that the working capital status of the two plants is good .They have a good amount of current assets to meet any contigent liabilities .Also this ratio is good from the banks point of view. While the current ratios of Essar Steel and Tata Steel are less than 1 which suggests that these companies have higher current liabilities than their current assets. Quick Ratio: BSL has a quick ratio of 0.25 because of its high inventory stock while SAIL has a better quick ratio of 1.24 which states that it has sufficient amount of the most liquid assets i.e. cash and receivables. Its competitors on the other hand have a low quick ratio due to less inventory .It also states that these two companies have high current liabilities. Inventory Turnover Ratio: The inventory in BSL turns over 6.54 times every year i.e BSL currently has a stock sufficient for 1.83 months. Similarly SAIL turns its inventory every 2 months in s year. Among its competitors , Tata Steel has the highest turnover ratio i.e. products move out every 1.28 months .This indicates that Tata Steel maintains a low working capital .The above scenario states that the steel industry is a highly competitive sector in India and none of the companies have a monopoly in the market . Number of Days in Working Capital: Looking at the number of days in working capital, we find that Tata Steel has a negative working capital which states that it may not be having sufficient funds to meet its contingent liabilities. Secondly its working capital needs are funded by its suppliers. While
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Conclusion:

Inventory in the steel plant consists of three parts : the raw material inventory, storage and spare inventory and finished goods inventory .Raw material inventory consists of the major part of the inventory section. Bokaro Steel plant gives a credit period of 30 days to its customers which sometimes vary between 25 40 days .The credit given by their suppliers is normally 15 days. The liquidity position of BSL as analyzed by the current ratio and quick ratio says that the company has sufficient amount of the most liquid assets to meet its contingent liabilities. Although the company has a huge piling up of inventory due to less demand for flat products. The quick ratio also showed a decrease from the previous year due to the increase in current liabilities. However a low quick ratio is not a concern since funds are managed centrally by the mother unit SAIL. Finally a comparative of BSL was done with its major competitors i.e. Tata Steel and Essar Steel .This analysis showed that BSL follows a conservative financing and conservative investment policy as compared to its competitors. Tata has a negative working capital .It is managing its inventories well, however it might face a problem in meeting its day to day financing needs.

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Recommendation
During the year 2008-09, Bokaro Steel Plant notched the impressive gain of 2830.43 crores. But in the year 2009-10 BSL earned a profit of only 1286.50 crores which shows a loss of 1543.93 crores as compared to the previous year .It was mainly due to the recession which slowed the demand for flat products. In the view of the analysis and with the changes in the industry scenario it is felt that the company should reconstruct its policies for the betterment. The cost of raw materials as incurred by the Bokaro Steel Plant is very high which has to be brought down through incorporating better technologies and plants .The price of most important raw material coal went up which has badly effected the profits of BSL. The study of working capital management in Bokaro Steel Plant was limited to the study of inventory, receivables, cash and payables. Although no default from the customers or suppliers side was found during the study, the loyalty of the customers and suppliers could be increased by giving them proper trade discounts which would increase the goodwill of the company and hence would prove to be helpful in the long run for the company. Working capital is managed well in BSL although there has been a net decrease in the net working capital which has happened due to the increase in the current liabilities (increase in security and other deposits).There has been a large increase in the security and other deposits i.e. 456% increase
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since the previous year .Also there has been an increase of around 85 % in provisions (excluding provisions for VRS, gratuity and accumulated leave) since the previous year. From the ratio analysis it can be seen that the current ratio of BSL is 1.14 which is good enough. Also there has been a decline in the quick ratio of BSL mainly due to the increase in inventory of finished goods which are lying in the stockyards due to less demand .This low quick ratio suggests that there is high current liabilities. However in this case low current assets is not a major concern since the mother unit of BSL i.e. SAIL is the major provider of finance .Funds are centrally managed in SAIL . Declining cost of the products due to stiff competition from China accompanied with the rising cost of inputs, particularly that of imported coking coal is likely to erode the profit margin of BSL in the current financial year. The management would try to make up for the loss by technology up gradation, improvement in coking rate and reduction in the cost of production. However the 17.6% growth in the industrial sector with the manufacturing sector growing at 19.4% sector fed by an eye popping 72.8% rise in the capital goods might affect the working capital status of BSL in a good way. This might improve the working capital of BSL.

Bibliography

www.sail.co.in www.bokarosteel.com www.moneycontrol.com www.money.livemint.com www.money.rediff.com www.nse.com www.etintelligence.com

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List of Abbreviations

SAIL Steel Authority of India Limited BSL- Bokaro Steel Limited ISP-Indian Iron and Steel Company Steel Plant ASP Alloy Steel Plant SSP Salem Steel Plant RMD Raw Material Division VISL Visvesvaraya Iron and Steel Limited BRL- Bharat Refractories Limited
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SMS-Steel Melting Shop CCS-Continuous Casting Shop CRM-Cold Rolling Mill HRM Hot Rolling Mill CR Cold Rolled HR- Hot Rolled GP Galvanised Plate GC - Galvanised Coil MIS- Management Information System CMO- Central Marketing Organisation ICP- Inventory Conversion Period RMCP-Raw Material Conversion Period WPCP-Work in Progress Conversion Period FGCP-Finished Goods Conversion Period COGS- Cost of Goods Sold GWC- Gross Working Capital STF-Short Term financing

Annexure 1

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BOKARO STEEL PLANT ,Balance sheet as at 31st March,2010

SOURCES OF FUNDS Shareholders' Fund Share Capital Reserves and Surplus Loan Funds Secured Loans Unsecured Loans

0.00 17480.32 17480.32 89.26 0.00 89.26 4538.70 0.00 22108.28

Inter Unit Current Account Deferred Tax Liability ( Net )

APPLICATION OF FUNDS Fixed Assets Gross Block Less: Depreciation Net Block Capital Work-in-Progress Fixed Assets (net) Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash & Bank Balances Other Current Assets Loans & Advances Subsidiary Companies Others Less:Current Liabilities & Provisions Current Liabilities Provisions Net Current Assets Miscellaneous Expenditure (to the extent not written off or adjusted Profit & Loss Account Inter Unit Current Account

7226.17 4980.46 2245.71 1178.96 3424.67 0.10

1755.02 9.03 46.60 8.41 0.00 492.96 2312.02

1066.36 2512.13 3578.49 -1266.47 0.00

0.00 19949.98 22108.28 0.00

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Profit and loss account for the year ended 31st March,2010 INCOME Sales Less : Excise Duty 11857.69 1394.90 10462.79 37.41 24.71 133.79 20.09 427.03 11105.82

Policy Profit (+) / Loss(-) Interest earned Other revenues Provision no longer required written back Stock transfer to other units

EXPENDITURE Accretion(-)/Depletion to stock Raw materials consumed Purchase of semi/finished products Employees Remuneration & Benefits Stores & Spares Consumed Power & Fuel Repairs & Maintenance Freight outward Other expenses Share of expenditure over income -Corporate Office -CMO -CCSO Interest & finance charges Depreciation Total Less: Transferred to Inter Account Adjustments Net Expenditure Profit/Loss(-) for the year Adjustments pertaining to earlier years Add/Less: Extra Ordinary Items Profit/Loss(-) Less : Provision for taxation Less : Provision for Fringe Benefit tax Less : Provision for Deferred taxation Provision(+)Refund(-)of Income tax of earlier years Profit/Loss(-) after tax Amount tfd from Bond Redemption Reserve

-392.29 5458.55 0.00 1930.04 824.79 933.36 120.08 143.63 400.32 199.23 67.68 2.07 52.77 246.74 9986.97 167.65 9819.32 1286.50 6.28 0.00 1292.78 0.00 0.00 0.00 0.00 1292.78

Less: Extraordinary items Amount transferred on amalgamation of Bharat Refractories Limited

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