(A GOVT.

OF INDIA UNDERTAKING UNIT)

SUMMER INTERNSHIP PROJECT BUDGET AND BUDGETORY CONTROL IN SAIL, BOKARO STEEL PLANT

SUBMITTED BY: ZAKI ARFIN AISSMS-IOM

ACKNOWLEDGEMENT
At the very outset, I wish to express my heartiest gratitude to all those who extended their help, guidance and Suggestion and without their help it was not possible for me to complete this Project Report. I am deeply indebted to my guide Mr.Sharma Sir (Jr. Manager) (Accounts & administration) and Mr. Anuj Nidhi sir (Senior Manager) for their valuable and enlightened guidance as well as freedom they had offered to me during the project work. I cant forget the contribution and helped extended to me by my faculty guide Miss. Versha. I am also thankful to the entire employee who provides the practical information about the accounting process 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.

CERTIFICATE
This is to certify that the project entitled BUDGET AND BUDGETORY CONTROL at BOKARO STEEL PLANT has been prepared by Mr.ZAKI ARFIN from 20.6.2011 to 13.08.2011, This project needed for partial fulfillment of his MBA 3rd sem at All India Shree Shivajee Memorial Society Institute of Management It was observed that he is hard working and sincere as well as meticulous student, who believes to think differently.

SIGNATURE OF INTERNSHIP GUIDE:

NAME OF INTERNSHIP GUIDE:

DECLARATION
I hereby declare that the following documented project report titled Budget And Budgetary Control" is an authentic work done by me as a part of my study in finance. I also further state that the project has been prepared by my own with the secondary data provided in the reports of the company, which were essential for the completion of the project. The project was undertaken as a part of the course curriculum of MBA . This has not been submitted to any other Examination body earlier.

ZAKI ARFIN

Satisfaction Aspiration Improvement Leadership

Vision
To Be a respected world class corporation are the leader in Indian steel business in Quality productivity, profitability and customer satisfaction.

CREDO
We build lasting relationships with customer based on trust and mutual benefits We uphold highest ethical standard in conduct of our business. We create and nature a culture that supports flexibility, learning and is proactive to Change. We chart a challenging career for employees with opportunities for advancement and Reward. We value the opportunity and responsibility to make a meaningful difference in people Lives.

COMPANY PROFILE
Steel authority of India limited (SAIL) is the leading steel making company in India. it Is a fully integrated iron and steel maker, producing both basic and special steel for Domestic construction, engineering, power, railway automotive and defense industries And for sale in export markets. its , SAIL manufactures and sells a board range of Steel product, including hot and cold rolled sheets and coils, galvanized sheets, electical Sheet, structural railway product, plates, bars and rods stainless steel and other alloy Steels SAIL product 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 source of raw material , including the company iron ore Limestone and dolomite mines. The company has distinction of being India largest Producer of iron ore ailed of having the country second largest mines network. This gives Sail a competitive edge in term of captive availability of iron ore limestone and dolomite SAIL WIDE RANGE OF LONG AND flat steel product are much in demand in the Domestic as well as the international market. This vital responsibility is carried out by SAILs own central marketing organization (CMO) and the international trade Division CMO encompasses a wide network of 34 branch offices and 54 stockyard located in major cities and town throughout India. With technical and managerial expertise and know how in steel making gained over four decades sails consultancy division (SAILCON) at new Delhi offers service and consultancy to clients world wide SAIL has well- equipped research and development center for iron and steel (RDCIS) at Ranchi which helps to produce quality steel and developed new technologies For the steel industry .beside SAIL has its own-house center for Engineering and Technology (CET), management training institute (MTI) and safety organization at Ranchi. Our capital mines are under the control of the raw material division in Kolkata. The Environment management division and growth division of SAIL operate From their headquarter in Kolkata. Almost all our plant and major unit are ISO

MAJOR UNITS Integrated steel plant

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 plant

Allow Steel plant (ASP) in west Bengal Salem steel plant (SSP) in Tamilnadu

Visvesvaraya iron and steel plant (VISL)in Karnataka

Logistic, publications etc.

Bokaro jaype

BOKARO

Jaiprakash

26:74

To set up and operate a Cement plant of2.1 million Tones per annum Capacity, utilizing Generated slag during Blast furnace operation At BSL

Associates Ltd. Cement ltd

NOW THE PRODUCT MIX OF SAIL:

It is categorized on the basic of two:-

1. product wise, and 2. plant wise

Product wise Semis

Blooms, Billets & slab

Long product

Structurals crane rails Bars, rods and rebars Wire rods

Flat

Flat product HR coils, sheets& scalp

Plates CR coils & sheets 1. GC sheets\ GP sheets and coils Tinplates Electrical steel

Tubular products Railway product sets

Pipes rail

Wheel,axles,wheel

Plant wise

Bhilai steel plant

Blooms, billets and slabs,bems Channels, angles Crane rails plates Rails Pig iron, chemicals and fertilizers

Bokaro steel plant

HR coils and sheets Plates CR coils and sheets GP sheets and coils /GC sheets Pig iron, chemicals and fertilizers Blooms, billets and slabs Joists,channels,angles Bars, Rods and Rebars Wheels,Axies,Wheel sets Pig iron, chemical and fertilizers HR coil Plates CR coil and Sheets GP sheets/GC sheets Tinplates Electrical steel Pipes Pig iron, chemical and fertilizers Stainless steel

Durgapur steel plant

Rourkela steel plant

Salem steel plant

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, 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 tons (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 & knowhow.

SWOT ANALYSIS OF BSL

STRENTHS
IT is an integrated steel plant. It does every work right from

procurement of raw material to selling of its by- product. It is the largest steel plant in Asia in term of production of steel . it produces 300mt of steel every day. It has its joint venture with dvc named BPSCL for continuous and uninterrupted power supply to its manufacturing units. It has its own captive mines for procurement of essential raw material like coal,limestone,coke etc,so it does not have to hunt for raw material. It has its own specialized marketing Unit called CMO (central marketing organization) for sale of primary product in domestic network. It has a healthy balance sheet and virtually a dept free company with dept equity ratio of 0.13.1 It has a strong research and development center.

WEAKNESS
Too much dependence on imported coal which in turn increases

the cost of production by a huge margin. Obsolete tehnology like ingot casting and the twin hearth furnaces continue to operate and will be eliminate only after implementation of the modernization cum expansion plan which is an ongoing process of BSL. As an integrated steel plant BSL is basically located in the eastern region which increase the transportation cost to the fast growing markets of west and south. Due to historical legacy manpower cost is higher than that of its competitors. Average age of its employee is 53,which lead to low product

Being a public sector company it has to adhere to number of rules and regulation laid down by the central as well as the state government

OPPORTUNITY
Steel consumption in India is growing at a rate of more than

10% that is like to persist in the coming year. The 11th five year plan has laid major stress on infrastructure Sector by allocation US & 200 billion by 2012. The size range and quality makes BSL a preferred choice for project customers. Flat products from BSL are rated amongst the best and are in high demand both in domestic as well international market . Rapid growth of construction ,auto ,capital goods segment requiring steel as input has only increased its demand in the domestic market . Technology breakthrough and global competitiveness in two wheeler and small car segment has made India a global hub of these products thus boosting demand for steel product. THREATS
The per capital consumption of steel in India is 46kg compare to

world standard of 200kg, which is a matter of great concern. The economic slowdown has further threatened the situation for BSL as the production of steel has decreased drastically. Increased competition in domestic market with the TATAs the jindals Arcelor mittal and also the growing presence of Chinese players with low price offering has also intensified the competition for BSL.

Sluggish market condition in the developing economy with high rate of import duty.

 A recent discovery of huge iron ore reserve in china will lead to

reduction in export of iron ore to Chinese steel industries and the availability of cheap indigenous iron in china will there by result in future competition in the international market.

BOKARO STEEL PLANT-Process flow

RAW Material handling plant The raw material and material handling plant receives, blend , stores and supplies different raw material to blast furnace, sinter plant and refectory materials plant as per their requirement . It also maintain a buffer stock to take care of any supply interruption. Some 9 MT of different raw material viz. iron ore fines and lump, limestone (BF and SMS grade), dolomite lump and chips , hard coal and manganese ore are handled here every year. Iron ore and fluxes are sourced from the captive mines of sail situated at kiriburu,meghahataburu,Bhawanathpur, tulsidamar and kuteshwar .washed coal is supplied from different washeries at dugdha,kathara,kargali and giddi, while raw coal is Obtained from jharia coalfields.

COKE OVEN & BY-PRODUCT PLANT The coke oven complex at bokaro converts prime cooking coal from jharia. Dugda and moonidih and medium cooking coal from kargali, kathara and mahuda, blended with imported coal , into high quality coke for the blast furnaces, recovering valuable by product like antharacene oil, benzene, tolurene,xylene,light solvent naphtha ammonium sulphate

and extra-hard pitch in the process . bokaro is situated in the prime coal belt belt of the country. The coke oven battery has 8 batteries with 69 oven each, maintain meticulously in term of fugitive emission control, use of phenolic water and other pollution control measures BLAST FURNACES Bokaro has five 2000-cubic meter blast furnaces that produce molten iron-hot metal for steel making .bell-less top charging, modernized doublers cast houses, coal dust injection and cast house slag granulation technologies have been deployed in the furnaces. the wastes product like blast furnaces slag and gas are either used directly within plant or processed for recycling/re use. Steel Melting shops Hot metal from the blast furnaces is converted into steel by blowing 99.5% pure oxygen through it in the LD Converter. Suitable allowing element is added to produce different grade of steel. Bokaro has two steel melting shops SMS-1and SMS-II has 5LD converter of 130T capacity each. It is capable of producing rimming steel through the ingot route SMS-ll has 2LD converters, each of 300T capacities, with suppressed combustion system and continuous casting facility. It produced various killed and semi killed steels.

Continuous casting shop

The continuous casting shop has two double-stand slab casting machines, producing high quality slab of width ranging from 950mm to1850mm.ccs has a Ladle furnace is used for homogenizing the chemistry and

temperature. The Comcast machines have straight moulds, unique in the country, to produce internally clear slabs. Argon injection in the shroud and tunish nozzle prevent re-oxidation and nitrogen pick-up maintaining steel quality. The eddy current based automatic mould level control, unique in the country, gives better surface quality. The air mist cooling and continuous straightening facilities keep the slab free from internal defect like crack. The casters are fully automated with dynamic cooling, on-line slab cutting, dr-burring and customized marking. The shop is equipped with advanced level-3 automation and control system for scheduling, monitoring and process optimization. CCS produces steel of drawing, deep drawing, extra deep drawing, boiler and Tin plate quality. It also produces low allow steel like LPG, WTCR, SAILCOR and API grade.

Slabbing mill
Slabbing mill transforms ingots into slabs by rolling them in its 1250mm universal four-high mill. The rolling capacity of the mill is 4MT per annum. The shop has and cold scarfing machines and 2800 T Shearing machines. Controlled heating is soaking pits, close dimensional accuracy during rolling and hot and cold scarfing help produce defect-free slabs.

Cold Rolling Mill

The cold rolling mill at Bokaro uses states-of-the-art technology to produce high quality sheet gauge material, tin mill black plates and galvanized product. Cold rolling is done to produce thinner gauge strips

of very smooth and dense finish, which better mechanical properties than hot rolling strips. Rolling is done well below re-crystallization temperature without any prior heating of the materials. The product of CRM are used for deep drawing purposes, automobiles bodies, steel furnitures drum and barrels, railway coaches, other bending and shaping jobs and coated steels. The CRM Complex comprises of tow picking line (including a high speed hydrochloric acid picking line with re-generation facilities),two tandem mills, an electrolytic cleaning line a continuous annealing line, bell annealing furnaces , two skin pass mills, a double cold reduction mill (DCR), Shearing lines, slitting lines and a packaging and dispatch section. The 5 stand tandem mill is capable of rolling sheet Ganges up to 0.15mm thickness it is has sophisticated hydraulic automatic gauge control , computerized mill regulation and optimization control.

Hot Dip Galvanizing complex

The hot Dip Galvanizing complex integrated with the CRM produced zinc coated cold rolled strips resistant to atmospheric, liquid and solid corrosion. The continuous coil corrugation line in the HDGC Produces corrugated sheet and the galvanized sheet shearing line produces galvanized plain sheet for a variety of application. The first shop of b Bokaro Steel to get the ISO-9001 Certification way back in 1994, this complex has maintain a high- standard of coating quality and its SAILJYOTI branded products enjoy a loyal market. This complex made certain innovation for higher productivity to help rebuild earthquake ravaged Gujarat.

OTHER FACILITY

Services- a valuable support network The service department like traffic, oxygen plant, water management and energy management provide in value support to this gigantic plant. Bokaro steel has a vast networked of railway track and over 40 diesel locos to smoothly run its operation. The oxygen plant provides oxygen, nitrogen and Argon for processes like steelmaking and annealing. Water management looks after the huge water requirement of the plant and the township, providing different grade of water and taking care of recycling needs energy management juggle the supply and demand of by-product gases and their demand as process fuel.

Maintenance department
Bokaro has centralized maintenance department for large-scale electricity and mechanical maintenance , in additional to shop-based maintenance wing for running repair and maintenance these facilities are capable of executing massive capital repair, support by the fabrication facilities are capable of executing massive capital repair, supported by fabrication facilities of the auxiliary shops.

Auxiliary Shops
To meet its need for maintenance and repair, bokaro has a cluster of engineering shop such as machine shop, structure shop ,steel foundry, ingot mould foundry, cast iron and Non-Ferrous foundry, electrical repair shop and power facilities repair shop in additional to shop specific area

repair shops. Most of the repair and maintenance requirement of the plant are met in house. The auxiliary shops and maintenance wing of Bokaro steel, aided by inhouse design term, have executed a number of highly sophisticated procurement-substitution. Productivity enhancement and quality improvement jobs saving revenues and enhancing equipment availability The expertise and operational scale of these departments along with the service departments makes Bokaro a truly integrated plant housing many virtual enterprises within Bokaro Steel plant. KEY SECTIONS OF FINANCE DEPARTMENT
CASH SECTION This section is like a bank of BSL that is it deal with both receipt

and payments of cash Basically issues cheque to all the parties for domestic payments
Monthly receipt of from corporate office based on the required

sent by the department

Payment modes include cheques online payment drafts for small

Amount, etc.

Costing section
Basic work is costing and preparation of budget.

Deal with cost control and cost reduction. Also does the work of variance analysis.
Also keep the record of various shops of the

plant(sms1,sms2,BF,CCD) They keep the record of consumption and production.

Insurance section
It deal with pension, general insurance of plant assets Various type of insurance are motor, fire, machinery breakdown,

marine, theft, burglary, cash, premium amount to Rs 1,41,52,536 per month.

Total assets insured amounts to Rs. 9593.11cr. Private parties that are also involved for insuring assets are HDFC,

ICCI, Reliance, new India insurance.

Raw Materials and Freight Division It deals with fright and claim regarding the raw material.

Rs. 300-350 cr annually is paid as inward fright (raw material to plant) while around Rs400 cr is paid as outward fright (plant to its respective destination)

99% of raw materials are transported by railway, whereas full

100% of finished products are sent by railways. Purchase and stores Accounts
It provides for purchase of new machinery, raw materials etc.

It basically does the accounting job i.e. Book keeping

 This department also issues letter of credit as a payment mode

for foreign suppliers. Purchase limit is fixed up to Rs 1000cr

Also does the accounting job of over 1,00,000 items in

inventory. Pay Roll Section

Accounting: it creates a master data of employees for

making the payment of salary, loans and advances, gratuity etc.

Loan and advances look after vehicle loan ,personal loan,

installment amount, housing loan

Financial functions: tax to be deducted from salary of

every employee on their income, payment of leave encashment to the employees, gratuity payment. It get monthly data from HR department located in the plant which submits it to the EDP department for daily attendance.

Operation finance
Mainly deal with financing of the approved project Main work includes outsourcing the work.

 What to bye, how to buy , from where to buy ,how much to buy

and at what price to buy are the main decision this department has to deal with.
Also does the online reserve action with the help of M junction

(joint venture of TATA and SAIL).

Operations payment
It deals with payment to outside parties.

It pays against work and contract order. Payment amount to around Rs.100 cr per month expect payment for raw materials.

Export procedure section

Outsources the work to outsides parties for specific customer requirements and then finally export it keeping in the view in the profit margin.
Separate export procedures for Nepal .Bangladesh and other

foreign countries
Joint venture with SAIL Bansal for job workers.

Service Tax Section

BSL is service provider as well as receiver.
200 items in India come under service tax.

 By 5th of every month service tax has to be deposited with service

tax department. Payment mode includes cheque as well as online. Rs.50-60 lacs average per monthly payment also amounts to Rs.2.5Cr.

Excise department
Excise is levied by central Govt. on manufacturing goods. It maintains the daily report of various shops of plant Ones the product is mooned from the factory gate excise is levied

on it depending on the quality of good moved out.

Other name of Excise duty is CENVAT Credit. Payment for excise has to be made on 5th of every month by

manual method or it can be paid by 6th of every month by online Method

Main Account Section

This section deals with the consolidation of accounts with each

quarter along with final closure.

It prepares the journal entries, main ledger, assets ledger, section

ledger, profit and loss account. It does not prepare the balance sheet of its own rather it is provided to it by its corporate office.

Estate Revenue Section

It generates the cash receipt order for collection of cash from

various parties expected for sales.

 It deal with the accounting of revenue that comes from house

lease ,rent, electricity charges, shopping center, plot ,school, hospital, hall for social purpose etc. The average monthly revenue of BSL is around Rs22Cr.

Project Finance Section

As the name suggest it deal with the financing of projects. It arranges for finance for financing of the approved project.
It also deals with the capital budgeting part for the various

approved project.

Sales section
Sales of secondary products to customers.
It transfers the stock to its sister concerns know as IPT (inter

plant transfer).
90 % of Primary are sold on credit basis By product are sold on cash basis directly from BSL. Also prepares CA (Credit advice) and DA (Debit Advice)

Previous year sales were around Rs.11858cr.

SCOPE OF THE STUDY

In order to drive maximum benefit an overall companywide cost plan is formulated by establishing an overall objective towards which the detail administration of the scheme should lead. At the outset it may not be possible-for the company to exactly set the degree of cost to be achieved. However it may be possible to set a reasonable target is general terms.

1. OBJECTIVE
To study the component involved and the procedure adopted in the preparation of annual budget by the cost &budget department of Bokaro Steel Limited and interpreting the cause of variation between the budget prepare and the actual result achieved.

1.1 SPECIFIC OBJECTIVE:

1) To discover the source of high cost/waste.
2) Suggesting, if possible, area where there can be any scope for cost

control. 3) To enable the management to locate potential area where saving can be affected. An attempt to reduce the variation by identifying the possible heads where budgetary control can be done.

METHODOLOGY:
1) This study is based on the discussion conducted with officials of

the plant and observation while on training period. The various data provided by them, the companies circulars, journals, magazines and data from internet were thoroughly studied and interruptions made thereof.

Sources OF Data:
Primary Data:I. Primary data is collected through interview method from the

professionals of SAIL, Bokaro steel city. Data has been collected through interview schedules and observation. During the observation, notes were made and compiled for study. II. The interview were conducted with the staff of the cost and budget section. After collection of data, classifying did analysis. Graph are drawn in order to draw conclusion to the subject. The suggestion and recommendations are given. Secondary Data:Secondary data is collected from the record of organization, magazines published by the organization.

I. Data is taken from the organization budget of BSL for the year

2008-2009. II. Data in the form of profit & loss a/c is taken for the actual figures.
III. Data is gathered from various other departments so as to have a

proper in depth analysis.

IV. Data has also been collected from secondary source like cost

manual, cost books of account, annual report, management report, magazine, sail circulars, source from internet were studied.

Limitation of the study

In spite of precaution and vigilance taken, it cannot be denied that there was procedural and technical limitation. The study is conducted using proper techniques and procedures, but study has it its own limitations.
The study to the performance of steel industry specially SAIL,

Bokaro steel plant because of the unit being a PSU. Full accessibility of data has been restricted considering the sensitivity of the information.
The vastness in the operations because of the huge size of the

organization, leading to inability of proper understanding of the operations. Time constraint for the officials.

COST AND BUDGET DEPARTMENT: Cost and budget is an important section of Fin & Acc.department, which are the eyes and ears of top management. Dy. General Manager(F&A) now heads it. Dy. chief finance manager and four executive are also to provide all assistance. Functions: 1. This is the department that looks after the daily production, then computing it to the monthly and finally the annual figure in term of cost. the standard cost is set in the budget and so cost control is the prime focus of this section. 2. Maintenance of cost records and preparation of Budget is vital for taking appropriate business decision particularly at a time when market is highly competitive. 3. Preparetion of OPERATION BUDGET for next financial year is another important activity undertaken by the section. Budget is a summary of physical as well as financial business performance planning for next year and form basis for comparison of actual performance. 4. 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 . existence of buyers market and tough competition is the sale price are not in hand of producer and only thing left to the organization is to look for reduction is various element of cost . This hold good for steel industry today. 5. Cost reduction activity is being monitored by cost &budget section and performance is this front is brought to the notice of higher management.

There are thirty- four production cost center, 24 services center and job costing center of engineering shops. Cost & budget section follow process costing system for its production & service center and job costing system for its engineering shops for maintaining cost record like production and consumption of raw material, power & fuel stores & spare, salaries & wages and other expenditure. In production & service center cost per unit is determined upon output and in engineering shop cost is determine upon machine hour rate. Based on budgeted consumption norms and budgeted price standard cost is prepared for every cost is price standard cost center before starting of the year. Monthly & annual cost is prepared on actual basis and deviation is reported to higher management through MIS report. BUDGET- A Budget is the financial and/or quantitative statement prepare and approved prior to a period of time of the policy to be pursued during that period for purpose of attending a given objective. For effective running of business, management must know:
I. Where it intends to go, i.e., organizational objective, II. How it intend to accomplish its objective, i.e., plan, III. Whether individual plan fit in the overall organizational objective,

i.e., coordination,
IV. Whether operations confirm to the plan of operations relating to

that period i.e., control. So it is necessary that operation budget of the company is prepared according to the best commercial and professional accounting practices. BUDGETARY CONTROL- Budgetary control implies the use of comprehensive system of budgeting to aid management in carrying out its

function like planning and controlling different activities of business .the system involve:
I. Division of organization into different section according to

function.
II. Preparation of separate budget for each budget center III. Consolidation of all functional Budget to present overall

organization objective during the forthcoming budget period .

IV. Comparison of actual level of performance with the budget.

Objective:
To provide for the likely financial position of the plant & SAIL as

a whole at the end of the budget year, duly compared with the actual of the previous year and latest estimates for current year.
To provide in summary from and in accordance with the uniform

income and expenses heading, a profit and loss account for the previous year and current year. For budget year, the break-up of each income & expenses head shall be shown under fixed and variable components to facilitate flexible budget preparation.
To attain consistent improvement in sales turnover of higher

quality & thinner gauges steel. . To attain consistent improvement in tecni-economic parameters & cost reduction
To make higher profitability to attain higher growth in business.

Below is the chart will help to understand I brief the component of the budget and activity involved in the preparation of the budget in BSL.

ACTIVITIES INVOLVED IN BUDGET PREPARATIO BUDGET Section-1

Production plan-iron &steel Production plan-By product Techno-economic indices Balance sheet Profit & loss Account sales budget Byproduct and secondary sales Inter plant transfer master budget

section-2
subsidiary budget

section-3
sales price working scraps sales scrap balancing stock at plant stock at stockyard

--Internal consumption Excise duty Freight outward Contribution to SDF, JBC &EGEAF Stock accretion/recreation Other revenues Raw material budget Semi/fin. Goods-pros and cons Power & Fuel Employee remn & Benefit Stores & spares Budget Repair & maintenance Other Expenses & provision Misc/Deferred Revenue Expenditure Inter account Adjustment

Yard & export Yard raw material requirement input rate budget semi/finished good rate Budget Imported material rate human resources plan Ingot Mould &Bottom Plates commitment budget For stores & spare. Emerging balancing coke balancing Gas balancing oxygen production & Consumption Steam Balancing power requirement contractual expenses variance analysis Cost Reduction Inbuilt In Budget

Let us look into in detail before getting on to the analysis part as their beforehand knowledge will help in proper inference and understanding of the analysis. SECTION-I 1.1.0 Production plan of iron & steel for annual business plan is finalized by corporate directorate in consultation with plant unit, central marketing organization (CMO) and Raw material Division. Production plan is prepared in synergy with the following.
I. Availability of marketing in year for which budget is prepared. II. Raw material availability.

III. Capacity of plant &.maintenance requirement. IV. Previous & current production level. In production budget of iron & steel, level of production is kept at the level of sales by CMO. With adjustment of stock Accretion /Depletion planned during year. Improvement in production over Expected current year is also deciding factor. 1.2.0 PRODUCTION PLAN OF BY PRODUCTS- The production plan of by products is totally dependent on production plan of coke oven. The production plan of By products is linked with coke oven gas generation, which is also dependent upon dry coal charge in oven. The Benzol, Tar and Ammonium Sulphate products are extracted from coke oven gas. One MT charged dry coal yield 308 NM3/MT of coke oven gas. Based on yield of coke oven gas the yield of crude tar, hydrates benzole & Ammonium sulphate are 30kg, 7.10Ltr,9.8kg per MT of dry coal charge respectively. The crude benzole rectification yield 62%, 14%,1%,5%&

3% of Benzene, Toylene, xylene, S B oil & L S Naptha respectively. The crude tar distillation yield 65%,2.6%,4.5% 78.4% &5.0% ofhard pich, midium and soft pitch,Nephthalene,PCM & Wash oil respectively. this area is totally linked with the dry coal change and not linked with direct production of primary product and also not contributes much to the profit of the firm, is not a part of this project. 1.3.0 TECHNO-ECONOMIC INDICES- The techno economic indices are another vital factor, which decided that fate of any organization. The techno economic indices may be called productivity in term of raw material, power, energy and other inputs. The techno-economic indices for operating budgetary of Bokaro steel plant are decided by plant unit. in this connection valuable suggestion of corporate planning directorate is also taken into account. The previous actual and current year actual play vital role in decision and always improvement over these years is planned in budget. Section II 2.1.0 BALANCE SHEET- As per current practice e budget balance sheet of Bokaro steel plant is not prepared separately. Based o profit and loss Account cash flow & cash Surplus statement is prepared. PROFIT & LOSS STATEMENT- is the final statement which projects companys financial performance for year under budget of .Bokaro steel plant Gross revenue is derived through Gross sales, internal plant transfer & internal consumption and then excise duty & fright recovered from customer is deducted for arriving at net revenue . The element of expenditure in operation budget is raw material, power & fuel, stores & spares, salaries & wages and other expenditure. all are discussed below in detail. SALE-in operation Budget sales estimate are divided into four part.ie direct sales, stock yard sales, Export sales & by product sales. The by

product sales is only done by plant unit and other are done by CMO. This has been separately discussed below. DIRECT SALES- The direct sale value of operation budget consist of two aspects. first is net sales realization and second is quantity. Net sales realization estimate for annual business plan of product of Bokaro steel plant Marketed by CMO in consultation with corporate planning directorate. The estimate sales qty for product(direct & stockyard) is also given by CMO based on previous year Direct & stockyard sales percentage the estimated quantity of sales given by CMO is divided among direct and stockyard. STOCKYARD SALES- The gross sales value of stockyard sales is the product of G.S.R (NSR+ EXCISE DUTY+FRIGHT) AND Quantity of sales. the quantity and NSR is decided in manner similar to direct sales. The excise is taken as percentage rate prevailing as per excise Act and fright is taken as average fright paid during the year for outward with the percentage increase suggested by finance and account directorate. EXPORT SALES- The export sales is also product of Export realization in terms of $ Exchange rate & Export Quality. The quality and rate is provided by international trade Division (CMO) and Exchange rate is provide by finance Directorate. The export incentive as calculated separately and it is part of income of profit & loss a/c BY PRODUCT & SECONDARY SALES-By products and secondary sales value is product of price & quality provided by marketing department of Bokaro steel plant. INTER PLANT TRANSFER- Bokaro steel plant transfer TMBP Coil to Rourkela steel plant for further processing. Based on transfer price of TMBP coils given by corporate office and demand for next year given by Rourkela steel plant the Gross value is finalized and form part of income

in budgeted P&L A/C .this transfer price has been set according to the recent policy adopted by SAIL, i.e. cost plus 10% 2.2.03.0INTERNAL CONSUMPTION-A part of our finished product is internally consumed for the purpose of packing and other operational requirement. The value of product consumed for the purpose of packing and other operational requirement. The value of product consumed in internal process is taken as income. The method of valuation is cost is charged in expenditure side. 2.2.04.0-as discussed at point no 2.2.1.0 the gross value of sales include fright & excise recovered from customer. Under this head the amount of fright and excise include in gross sale value is deducted for arriving the net revenue figure from sale in budget. 2.2.05.0 STOCK ACCRETION/DEPLETION- in operation budget stock acceleration/depletion is planned in advanced for budget year. It mostly depends upon quantity of stock laying at plant & stock yard. Based on the sales estimate of home &export market and stock acc/dep- production laying in stock is added and stock depletion means value of stock and form in deducted to the extent value in last year. 2.206.0 INTEREST EARNED- constitutes interest earned from customers, employees, term deposit &loan and advanced given to other companies. The estimates for interest earned from customer & loan and advances given to other companies are provided by corporate office and rest is estimated by F&A department of Bokaro Steel plant. 2.2.07.0 OTHER REVENUE- The estimate of other revenue in budget is provided by F&A Department itself .The revenue from social amenities, sale of empties, service charges, dividend from investment and capital gain is taken.

2.2.08.1 RAW MATERIAL EXCLUDING COKING COAL BUDGET-Raw material quantity requirement and raw material quantity requirement and raw material quantity requirement and raw material price considered in budget .raw material quantity requirement is calculate by multiplying the techno-economic parameter with production ,taken in production budget. The major raw material is brought from own mines and a percentage hike in transfer price of raw material in budget. The hike is taken as per corporate guideline given by corporate finance directorate. As per existing practice raw material & coking coal budget is given separately. 2.2.08.2 COOKING COAL INCLUDING CDI- The preparation of cooking coal budget is similar to the raw material budget preparation. While deciding the quantity of cooking coal provision of moisture loss and Screaming loss is also made because the techno economic of coal is taken in dry basis. The price of imported coal is taken in term of $ and it is converted into rupees by multiplying exchange rate. The price & exchange rate of imported coal is taken as per guideline of corporate office. 2.2.10. EMPLOYEES REMUNERATION & BENEFIT- For preparation of employees remuneration & benefit budget current year (likely) figure is taken as based and provision is made for following points Normal increase on account of increment/promotions over current year (Likely) and provision for normal superannuation.
Provision for wage revision if any

Daincrese@5% of basic.
Amortization impact of earlier VRS.

The budgetary estimate is separately prepared for executive & non executive in following heads. 1. Basic 2. Dearness allowance (DA) 3. Prov for increase in DA 4. Interim relief (if any) 5. Incentive Bonus/Reward 6. Annual Bonus 7. Cost Reduction Reward 8. LTC/LLTC 9. Co contribution to PF 10. Other Fund 11. Gratuity 12. Leave Encashment 13. Pro for VRS 14. HRA 15. Provision for leave 16. Welfare Expenditure & Others All the provision is made as per guidelines given by corporate office. 2.2.11 STORES & SPARES- Store & spare budget is an integral part of the budgeted profit &loss a/c (Master budget).The conventional method of preparation of stores & spare budget was the actual consumption up to December or January of the current year of stores & spare per unit of crud e steel in multiplied with the budgeted production of the crude steel. The resultant value was being taken as consumption of stores & spare budget. The stores & spare budget. The stores & spare budget is prepared separately for individually major heads like machines spare electrical

spare conveyor belt valve pipes bearing steel petrol diesel lubricant & chemicals IMBP & Slag Plot Rolls V Refractoriness. 2.2.12 POWER & FUELS- Power & fuel budget is also department upon the techno- economic & production budget. The power consumption is the product of power consumption per unit of output planned is technoeconomic budget & production taken in budget. The power requirement of every shop is summed up and necessary provision for transmission and other losses are made to reach the actual power required during the year. In budget the requirement is first fulfilled by BPCL power and rest is fulfilled from DVC. The cost of DVC power is assessed as per billing method of DVC. The bill comprises the maximum demand charges, Energy charges, Electricity duty & surcharge of late payment of bill. REPAIR & MAINTENANCE-The repair & Maintenance expenditure in budget is based on the actual consumption incurred up-to the December is converted into the expected current year in straight proportion method and this figure is taken as budget for next year in straight proportion method and this figure is taken as budget for next year. The whole expenditure is provided in following sub-heads.
Capital repair Reclamation, revamp, &preventive maintenance

Foreign expert Other Miscellanies & contg. Cleaning incl slag.cmpt Township Service dept

 Ash pond-ash removal 2.2.14 SHARE OF HEAD OFFICE/CET/RDCIS-The allocation of head office, CET,& RDCIS Expenditure is being done by them to plant unit and the same figure is taken into Budget of Bokaro Steel Plant. 2.2.15 STOCK YARD EXPENDITURE-the expenditure of CMO planned for the period in budget is allocated to the plant unit on the basis of the turnover of the plant. The amount of allocation to BSL is communicated by CMO and it is in budget. 2.216 OTHER EXPENDITURE & PROVISION- These are number of sub-head in the other expenditure & provision and it is difficult to develop a sound method for proper estimation of budget. The actual expenditure incurred against these heads up-to the month of December of current year is taken as base and estimate for 12 month is prepared in straight proportion with improvement. The reduction in other expenditure is taken on overall basis as improvement. The overall budget of other expenditure is distribution to the entire department with improvement taken. the one time expenditure to be incurred in budget year for particular department is also taken care of. This large exercise of allocation and control is done through Administrative Budget. INTER ACCOUNT ADJUSTMENT-under this head the internally processed material taken in stores & spare head is adjusted as the cost of internally Manufactured product that s already charged in main head like raw material, salaries & Wage and others.

2.2.18 INTEREST & FINANCE CHARGES- Interest & Financed charged in budget is taken as per allocation of corporate office. These are two types of interest charges one is interest on capital expenditure loan and other is interest on capital expenditure loan and other is interest on capital expenditure loan and other is interest on working capital loan (cash credit) public deposit , foreign loan, term loan, SDF& Bond are of capital expenditure nature & cash credit is working capital loan. 2.2.19 DEPRECIATION-The budgeted Depreciation of Bokaro steel plant is calculated as per straight line method for year in budget & additional depreciation on assets to be commissioned in year is added. SECTION-III

3.0 Section-III IS Basically designed for the supportive information to be supplied with the budget. This information gives in detail about assumption taken in the budget and working at various stages of budget preparation like sales price, gas generation, energy balancing .the enclosure, which has relevance with this project, has been discussed below. 3.1SALES PRICE WORKING-The sales price of direct (CMO) Sales is work out only on NSR given by ITD in $into rupees with the exchange rate given by corporate office. The export incentive working is also provided with the Budget. 3.2 SCRAP BALANCING-Scrap working is important in budget preparation of Bokaro steel plant .the various type of scrap generation is there in bulk and it is consumed also in steel making.

The scrap generation is there in bulj and it is consumed also in steel making. The scrap generation during the process & consumption is worked out separately. The opening stock of scrap is added to Budgeted generation this gives that total scrap available in the year and with the available scrap budgeted consumption is subtracted . if there is balance it is treated as closing balance and if not additional requirement quantity is outsourced. 3.3 STOCK AT STOCKYARD &PLANT-The stock at plant and stockyard is calculating separately. The working is based on the dispatch of material planned to stockyard and stock Acc/Dept planned during the year. The total stock Acc/Dept at plant & stock yard will remain firm as per at point no-2.2.05 3.4 RAW MATERIAL REQUIREMENT-A detail working if raw material requirement taken in the raw material budget is enclosed with budget. The raw material consumption of each & every department is worked out according to the techno-economics parameter & production plan that department and finally requirement of all the department is summed up to get the total raw material requirement of all the department is summed up to get the total raw material requirement for budget. The necessary provision for normal fine & transit loss is also is made over the total requirement of the entire department. 3.5 RAW MATERIAL RATE-The raw material rate taken in the raw material budget is the weighted average landed rate of that material from the entire source. The landed rate of a raw material comprises the basis price, sales tax & fright. The landed rate at the

sources from which raw material is to be procured is worked out with help of raw material account of F & A Department. 3.6 IMPORTED MATERIAL RATE WORKING-A Separate sheet of imported material rate working from part of the budget .in Bokaro Steel plant only coal & CD imported the landed rate of raw material comprises the C & F price & fright in us $ and the value in Indian rupees is worked out by multiplying it with exchange rate. The insurance custom duty, port charger 7 fright from port to plant (in RS) IS ADDED IN C&F value to arrive the landed rate. 3.7 COKE BALANCIG- The coke balancing is important in budget preparation activity from point of view of drawing the sales plan of breeze coke. The balancing is done on the dry basis. The production of dry coke is separated out into BF coke, pearl coke and mixed coke as per yield planned in techno economic & again mixed coke recovery from screaming of B F coke before skip. The requirement of coke in blast furnace is meeting with skip coke, Perl coke and balancing with mixed coke. The requirement of sinter plant & soaking pit is balanced with mixed coal generated at coke oven & received from screening of BF coke. The balancing mixed coke is available for sale. 3.8 GAS & ENERGY BALANCING- The gas energy balancing is most important part of operation budget. The purpose of the gas energy balancing is to work out energy requirement from outside. Based on the balancing the fuel budget is prepared. First availability of energy from coke oven, blast furnace & converter

Gas, after considering the losses, is worked out the requirement of different gases at different. COST REDUCTION Cost reduction implies the retention of the essential characteristics and quality of product and thus it must be confined to permanent and thus it must be confined to permanent and genuine saving in the cost of manufacturing, administration, distribution, and selling, brought about by elimination of wasteful and essential element from the design of the product and from the techniques carried out in connection therewith Cost reduction may be defined as the real and permanent reduction in the unit cost of goods manufactured of services rendered without impairing the suitability of the use intended or diminution in the quality of the product. COST REDUCTION in context TO SAIL/BSL There are two techniques used in BSL: 1. Cost reduction Techniques used for primary products. 2. Revenue Maximization Technique- used mostly is respected for By- product and secondary products. 1. Cost Reduction Technique:
a) Reduction in price/cost of

I. Raw Material II. Power & Fuel III. Manpower

IV. Stores & Spares b) Reduction in Consumption by-

I. Yield Management of cache department

II. Waste Management of scrap a).1.price/ cost of Raw Material. The fact that inventory constitute a substantial portion of an enterprise necessitates that investment in inventory be maintained at minimum level consistent with maintenance of continuous flow of production. The material consists of coal, iron ore, limestone dolomite manganese etc. Sail has its own mines for iron ore situated at different places. The various methods adopted by SAIL to minimize the cost of raw material are: 1. Application

of Transportation Model: Sail used to undergo

defective & multitier system of distribution channel that led to delays in delivery and higher cost. Thus, Mc Kinsey suggested the better distribution plan to undertake a massive cost cutting exercise. Supplying the raw material to SAIL PLANT THROUGH SHORTEST ROUTE APPLICATION OF TRANSPORTATION MODEL TO SAVE THE TRANSPORTATION AND FRIGHT EXPENDITURE.

2.

Responsibility Centers: SAIL has its various responsibility

center for proper allocation of resources.

3.

Cost center: A center for which a standard amount of cost is

predetermine and used for control reduction . Subtracting actual cost from the standard cost does performance evaluation.

a).2.price/cost of power & fuel

The cost of power obtained from grid is very high while increased power is required for the growth and expansion plans. In case of SAIL. The price of power is remained stable during the past few year. The major changes undergone during the year is establishment of the own power plant under JV has enabled the SAIL plant to reduce dependence on supplies from public utilities .this has resulted in lower cash outgo for steel plant since the prices charged by utility are higher than the rate agreed upon the power purchase agreement with the JV companies A).3. Price /cost of manpower Human mind has unlimited potential. Manpower is one of the most important factors of production in any industrial unit. It depends on the organization strategic planning that how it maintains the cost of manpower. A).4.Price of stores & spares the stores and spare is one of the major ingredients of cost in SAIL, Bokaro Steel Plant. One or two percent saving in the consumption of stores and spares may result into huge inflow of money .stores and spare, various point are taken into consideration .they are

Mode of Procurement-in this concept the total requirement of

SAIL, Is determined and purchase centrally by central procurement unit (CPU). The various CPU of SAIL are: Bhilai Steel Plant-Ferro-alloys

 Durgapur steel Plant-Silicon-maganese ferro- alloys

Corporate office, New Delhi: Rolls Corporate office, New Delhi: Refractory

Better allocation the proper utilization- SAIL adopt analysis for the utilization of its material resources in which the stores having maximum value is given more concern & used accordingly. Mode of transportation SAIL works on the transportation model by using linear programming problem for procurement of material in shortest and cheapest cost of fright. Concept of conversion-Earlier, materials was procured from subsidery units that used to attract sales tax. To avoid sales tax and better tax management, a decision was taken to get the Raw material converted from its subsidiary units. This implementation resulted in saving of Rs. 40 crores annually, out of which BSL saved about 10 crores. B).1. Yield Management by each department: Each department has been assigned the task to monitor the consumption and thus improve the yield. The department wise tasks assigned areI. Coke oven Yield of Co Gas-The produced is used as raw material for

the extraction of by- product and left over gas is used as fuel in other department. The more yield the more the production of by products and the less the amount of procuring fuel. Heat Generation- the coal is used for heat generation. The more ash content less is the heat generated thus, resulting is low efficiency II. Sinter Plant

 Consumption of Flux III Blast furnace Yield of BF Gas- it is used as fuel Coal to Hot Metal Ratio

IV Steel melting shop (SMS) Metallic input charge-inputs are hot metal & scrap

Consumption of Fe-alloys Increase in special steel production Consumption of flux V Cold Rolling Mill (CRM) Acid consumption Zinc consumption VI Stores & Spare Hot Metal lining life in blast furnace
Steel Ladle, converter lining life in SMS IMBP consumption-incline ingot mould & Bottom plates used in

SMS1
Usage of rolls, conveyors Belts & Lubricants

B).2.Waste management of scrapThe defective produced in the process are not wasted or dumped but reprocessed by charging it in the SMS and thus utilized. Even the iron scrap such as used spares & stores used machine is charged in the SMS to produce steel.

4. Revenue Maximization Techniquei.

Arising:

These are the defective and the secondary produced in the process of producing in final product. These defective fetch lesser price as understood thus resulting in lower realization lower of income than expected. The technique deal with reduction in the production of such defectives.

ii. Idle freight: this techniques was introduced recently. The product was transported to the customers majorly through railways. Each wagon has the capacity of carrying 20 tons of steel and each train has almost 40-50 wagons. Thus, the total capacity of a train is 1000 T .But rarely any customer has such requirements. So the wagons went empty but the cost was to be borne in full, leading to idle freight. To put a check on it a technique was introduced. The customers were divided among zones. Then they were sorted on the basis production was scheduled. The production planning and control department plays a vital role in this whole procedure. Yield Management of BY- Product: The CO Gas is further distilled and re- processed in the by- product plant to produced the by- products. The byproduct fetches good revenue directly to the plant. iv. Sale of solid waste:

in the context of steel industry, solid waste management is very wide not only from point of view of its revenue generation but also for environment .the waste like LD slag (sms slag) and blast furnace (Granulates slag) are being generated in a huge quantity continuously, which not only spoils the fertilities of the land situated in the surrounding of the plant but also creating the disposal problem. The slag is used in the cement factory. In order to manage such a situation BSL has entered into a joint venture with jaypee cements. They supply the raw.

RECOMMENATIONS
Gone are the days when the industries were run only with the motive of generating employment. Now in either public sector undertaking or in private enterprises, the efficiency is judged through their financial performance and operational efficiency. Therefore the main objective of the study is centered towards the problem of setting of correct standards and its implementation in an efficient manner, so as to attain negligible variations of the actual results achieved from the pre-set standards. A study of the data related to the above stated topic and applying the managerial technique of variance analysis and an in-depth understanding of the operations in BSL helped me to suggest the following improvements which can be beneficial to the organization in the future:-

 The CMO should take the decision about the sales volume after consulting the Bokaro steel plant taking into consideration its production capacity and issues relating to the quality steel production for which it is know which will result in revenue maximization in future.
Improvement in terms of production of higher quality and

thinner gauge materials and enhancement of their benefit in terms of higher values & contribution from previous year & expected current year was also to be considered. With this objective, now the production of previous year and expected current year is considered than expected extra contribution in budget year (price extra less cost extra) is taken into account, then maximum improvement should be planned in the product where contribution is more.
Efforts should be made to set material mix standards to comply

with the techno economic indices suggested by the technical experts, which will thereby result in reduction in the huge unfavorable material mix variance.
The management of SAIL should do proper market research to

estimate the price of imported Coal as we can see that it is the major cause of material price variance and thereby had a huge impact on the budgeted profit figure,
The various components of the labor cost should be anticipated

after going through the previous years budgeted and actual figures and the reason for the as the cause for the labor cost variance for the last two years has been the improper

anticipation of provisions for increase in various components of pay.

One of the major causes of unfavorable efficiency variance

under heads has been the indifferent attribute of the employees and management towards organization and their work due to a very high level of job security as compared to the private sector. Hence, proper career development and training programs coupled with performance based promotion against security based promotions should be formulated which will thereby result in increased job satisfaction leading to higher productivity.
The delayed implementation of the Enterprise Resource

Planning should be done away with to attain lower labor costs.

The power consumption, quantity of defectives and the cost of

repairs and maintenance has increased due to the obsolete machines being used. Thus, the policy of modernization passed earlier should be implemented as quickly as possible. For implementing cost reduction techniques and budgetary control system, improvement in steel products must be monitored at the appropriate level at works division. The budget preparation should be tuned with the following suggestion. The cost reduction in terms of rupees per MT of Crude steel must be planned and after this reduction the final estimate of Stories & Spares Budget be prepared. The planned cost reduction includes reduction in both Quantity & Landed

price. This will help to achieve the international consumption level of Stores & Spares. For the cost control purpose management needs timely and reliable feedback information on cost effectiveness, it is also essential to determine cost before they are incurred, compare the actual cost against predetermined cost and analyze variance for further management action. Thus, this report is an attempt not only to suggest the management the areas where it can control cost but also a suggestion to prepare the Budget in compliance with all the minute details in order to have a low variance when compared with the actual. This will help the management to estimate the profit it will earn and if reviews needed, can be conducted efficiently.

Conclusion
In this competitive world an organization always has to strive to get better. This is the only way it can survive. It has to constantly renovate and update itself. BSL being a huge manufacturing unit and second largest planet of SAIL (in terms of profit) has a large scope for improvement to get ahead. Controlling cost is a small part of this scope on which we have worked on. Throughout the study we have found out that cost for all the inputs used in BSL either the raw materials or the power consumption has increased this year. Much cannot be done to control costs because majorly all the inputs come from their own resources or their captive mines. But proper decisions have to be taken to control costs of essential inputs like imported coal. Moreover, checks have to be made on the power consumption, improving their efficiency and controlling costs.

Cost reduction techniques must be taken improve the budget preparation. A few budgetary control heads and method have been suggested in the project.

At last FOOD FOR THOUGHT to conclude with: MYTH Cost are not my problem, it is finance Job profitability Dont worry about cost, BSL is making Good profit Low ROI, Extended Pay Back Period Financial implication Higher cost of product

If cost control was possible, other would have done that before

Poor Technoeconomics, Wastage