Nalco-Fin1

SUBMITTED BY: NILAMADHAB DAS | ROLL NO: 11MBAS21540
A
PROJECT REPORT
ON
INVENTORY MANAGEMENT OF
NALCO
By
A REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT
OF MBA PROGRAM
In Guidance With
MANIK CHAND GHOSH
INTERNAL GUIDE TALCHER
Submitted By:
NILAMADHAB DAS
R!"" N!# : 11MBAS21540
DDCE SAMBALPUR UNIVERSITY
MBA
DECLARATION
I hereby declare that this project report submitted by me to DDCE,
Sambalpur University Course in partial fulfillment for the aard of
De!ree of "Master of Business Administration# is of my on and data
collected durin! the trainin! shall be $ept confidential and used only for
academic purposes%
Nilamadhab Das
MBA

CERTIFICATE
The project report of Nilamadhab Das Inventory Management of
NALCO is approved and is acceptable in quality and form. The
candidate has not submitted this report either fully or partially any
where else for publication. I recommended the thesis for the
submission to DDC! "ambalpur #niversity for evaluation as partial
fulfillment of $roject %eport of &'(.
The results and reports were found satisfactory
Mr. R.C.Joshi,
&Mana!er 'inance(
MBA
EXAMINERS CERTIFICATE
)his project report is submitted by *ilamadhab Das of MBA bearin! the
+oll *o% ,,MBAS-,./0 under DDCE, Sambalpur University and
forarded for evaluation%
Internal E1aminer E1ternal E1aminer
MBA
CERTIFICATE OF APPROVAL
This is to Certify that the Project Entitled:
Inventory Management of NALCO
Submitted by Nilamadhab Das &+oll *o% ,,MBAS-,./0(, Sambalpur University,
Burla toards partial fulfillment of the re2uirements for the aard of the de!ree of
Master of Business Administration &MBA( is a bona fide record of the or$ carried
out by him under the able !uidance of Manik Chand Ghosh, 'aculty, +D Computer
3 Mana!ement, )alcher%
MBA
ACKNO$LEDGEMENT
)he satisfaction and euphoria that accompanies the successful completion of any tas$
ould be incomplete ithout the mention of the people hose consent, !uidance,
support and encoura!ement cron all efforts ith success%
I sincerely than$ Mr% Asutosh +ath, MA*A4E+ &)5M( for !ivin! me an opportunity
to under!o the summer trainin! at *ational Aluminium Company 6td%, Damanjodi%
I ould li$e to sincerely e1press my deep sense of !ratitude to Mr% +%C%7oshi,
MA*A4E+ &'inance(, Mr% Satyabrata Dash Dy% MA*A4E+ &'inance( and the staff
in the 'inance Department of *A6C8 for their valuable !uidance in pursuin! my
project%
I am very much obli!ed to Mr% U%C% Sahu, D%4%M%, Mr% +%C%Dash, MA*A4E+, Mr%
9%:%* Murty Sr%E%A, :%+%D of *A6C8, Mrs%;rishna ;umari, Sr% MA*A4E+
&Chemical( for providin! me ith the necessary information re2uired for my project
report%
I sincerely than$ my !uide Mani$ Chand 4hosh, 'aculty, *ICE )A6C:E+ for his
!uidance in pursuin! my project successfully%
Nilamadhab Das
MBA
CONTENTS
,% Introduction
-% Inventory Mana!ement
<% A Study 8n 'inancial 8f *alco
/% +atio Analysis
.% 'unds 'lo 3 Cash 'lo Statement
=% +efinery >rocess 8vervie
?% Conclusion@Summary 3 Su!!estions
A% Anne1ure
MBA
CHA!"R # I
IN!ROD$C!ION
MBA
COMPANY PROFILE
)he bac$ !round of the company B
'olloin! the discovery of lar!e reserves of bau1ite ore in the east coast and
the preliminary project or$ done by Bharat Aluminum company limited, the
company as set by the !ovt% India in,CA, to implement one of the lar!est multiD
locational inte!rated Aluminum projects of the orld ith its on captive poer plant
and port facilities%
)he technical collaboration of aluminum >echiney of 'rance, )he support of
Euro Dollar loan from a consortium of international ban$s and the special
dispensation of the !ovt% of India and the !ovt% of 8rissa helped the company to
implement the project e1peditiously ithin the bud!eted cost of +s -/0A crore, under
very difficult lo!istics of project mana!ement%
Different se!ments of the company ent into production in a phased manner
startin! from *ovember, ,CA.%Eithin a short span of time, the company has emer!ed
as a leader in the field of aluminum production in the country and also has made
si!nificant impact abroad %)he company has helped the company to ma$e 2uantum
jump in production of aluminum and has also been earnin! substantial forei!n
e1chan!e throu!h creditable e1port performance year after year%
ABOUT THE MANAGEMENT:
)he company is a 4overnment of India enterprise under the administrative
control of the Ministry of Mines% )he company is mana!ed by a Board of Directors
appointed by the president of India% )he Board consists of ,0 directors includin! the
CMD of the company% Apart from the CMS, there are / functional or full time
directors headin! production, 'inance, >rojects 3 )echnical, >ersonnel,
administration discipline% )here are - senior officials of 4ovt% of India% Besides, there
are nonDofficial Directors in the board% Subject to the provisions of the Indian
Companies Act, the memorandum and Articles of Association, M8U si!ned ith the
4ovt% of India and also subject to policies formulated by the Board of Directors, from
time to time, the CMD has full poer to sanction e1penditures or to deal ith other
matters for effective functionin! of the company%
MBA
)he Mana!ement#s control system is based on dele!ation of authority and
individual accountability for results% )he responsibility and authority to ta$e decisions
on various matters are dele!ated by the CMD to different levels in the mana!ement%
THE VISION:
)o be a company of !lobal repute in Aluminium%
THE MISSION:
)o achieve !roth in business ith !lobal competitive ed!e providin!
satisfaction to the customers, employees, share holders and community at lar!e%
CORPARATE OBJECTIVES:
D )o ma1imiFe capacity utiliFation%
D )o optimiFe operational efficiency and productivity%
D )o maintain hi!hest international standards of e1cellence in product
2uality, cost efficiency and customer service%
D )o provide a steady !roth in business by technolo!y up !radation,
e1pansion and diversification%
D )o have !lobal presence and earn 'orei!n E1chan!e%
D )o maintain leadership in domestic mar$et%
D )o instill financial discipline at all levels for achievin! cost and
bud!etary controls, optimiFe utiliFation of or$in! capital and
effective cash flo mana!ement%
D )o ma1imiFe return on investment%
D )o develop a stron! + 3 D base and increase business development
activities%
D )o promote result oriented or!aniFational methods and or$ culture
that empoers employees and helps realiFation of individual and
or!aniFational !oals%
D )o ma1imiFe internal customer satisfaction%
D )o faster hi!h standards of health, safety and environment friendly
products%
D )o participate in peripheral development of the area%
MBA
THE PROJECT FINANCE:
*A6C8 as started ith a capital cost of +s%-,/0A Crores, out of hich ,,,,C
Crores e2uivalent of Euro Dollar as financed by Consortium of International Ban$s
and balance +s%,,-AC Crores as financed throu!h E2uity from 4overnment of India%
UNIT!ISE CAPITAL COST
I% Bau1ite Mines AA Crores%
II% Aluminium +efinery ?./ Crores%
III% >ort 'acilities <, Crores%
I9% Smelter >lant ?-< Crores%
9% Captive >oer >lant A,- Crores%
MBA
NALCO TO"AY:
*ational Aluminum Company 6imited &*A6C8( is considered to be a turnin!
point in the .0 years old history of Indian Aluminum Industry% In a major leap
forard, *A6C8 has not only addressed itself to the country#s need for selfD
sufficiency in aluminum, but has also !iven the country the technolo!y ed!e in
ma$in! this strate!ic metal on the best of the orld standards%
)oday, *A6C8 has emer!ed as the lar!est Inte!rated Bau1iteDAluminiumD
Aluminium comple1 in Asia, enablin! India to itness a 2uantum jump in alumina
and aluminum production% *A6C8 for the first time created e1portable surplus in
alumina and helped India to focus on its massive Bau1ite resources in the East Coast
estimated at ,=00 million tonnes%
)he inte!rated comple1 has fine se!ments i%e%, Bau1ite Mines, Alumina
+efinery, Alumina plant, captive poer plant and port facilities%
)he 8pen Cast Mines as located at >anchpatmali :ills of ;oraput District in
8rissa, hereas the Alumina +efinery as located at Damanjodi, a flat land located
about ,. $ms aay from the Mines% )o!ether, the unit came up to be the lar!est open
cast bau1ite mine and the lar!est alumina plant in Asia%
Ba#$i%& Min&
)he fully mechaniFed
opencast mine of /%A million
tpa capacity is in operation
since *ovember, ,CA.,
servin! feedstoc$ to Alumina
+efinery at Damanjodi
located on the foothills%%
)he salient featuresB
Area of deposit D ,= s2% $m%
+esource D <,0 million tonnes
8re 2uality D Alumina /.G, Silica -G
Mineralo!y D 8ver C0G !ibbsitic
8ver burden D < meters &avera!e(
8re thic$ness D ,/ meters &avera!e(
)ransport D ,/%= $m lon! sin!le fli!ht multicurve cable belt conveyor of ,A00
tph
MBA
)he >erformance of the Mines has been e1emplary% )he last ten years production
shon beloB
Min&s and %h& En'i(on)&n%
)he >anchpatmali Bau1ite
Mines of *A6C8 has been ellD
$non as one of the most
Environment friendly mine today%
Salient Environmental featuresB
>eriphery barrier of ,.m
idth havin! !reen cover
around mines
4arland drains and draina!e control ithin the mines
Dust suppression at source and sprin$lin! of ater
)otal overburden e1cavated ith top soil used for reclamation and
rehabilitation of mined out areas ith ve!etation cover%
Studies Conducted on environmentB
Studies on effect of blastin! on !round ater table at Bau1ite Mines
Studies on ater 2uality and ater flo to assess the impact of minin! on the
perennial sprin!s belo%
EcoD!enetic resources survey at >anchpatmali Mines%
)he Environment Mana!ement Systems of Bau1ite Mines certified to IS8D,/00,
standards on 7une -/, ,CC=, by M@s Aspects Moody Certification, U;%
A*#)ina R&+in&(, Co)-*&$
)he ,., ?.,000
tpa Alumina +efinery,
havin! three parallel
streams of e2ual capacity,
MBA
is located in the pictures2ue valley of Damanjodi in ;oraput district is in operation
since Sep ,CA=%
Th& R&+in&(, is d&si.n&d %o:
>rovide about =,C0,000 tons of Alumina to the CompanyHs Smelter at An!ul
E1port the balance Alumina to overseas mar$ets throu!h 9isa$hapatnam >ort
Th& sa*i&n% +&a%#(&s:
Atmospheric pressure di!estion process
>reDdesilication and interDsta!e coolin! for hi!her productivity
Ener!y efficient fluidiFed bed calciners
CoD!eneration of <1,A%. ME poer by use of bac$ pressure turbine in steam
!eneration plant
Advanced red mud disposal system
Alumina +efinery has been consistently improvin! its performance from its
inception and has proven to be one of the best in the business today, ith consistently
e1ceedin! its capacity for the last three years, apart from producin! Alumina at the
orld#s loest cost today% )he
production trend over the last ten years
is shon beloB
)he Alumina +efinery has been
earnin! hundreds of million dollars of
valuable forei!n e1chan!e for the
country throu!h these years throu!h
e1port of its product, hich
consistently meets and e1ceeds the
5uality re2uirement of the international mar$et% Alumina from *alco#s Damanjodi
+efinery is !lobally sou!ht after%
En'i(on)&n% and %h& A*#)ina R&+in&(,
)he Alumina +efinery has been both desi!ned to be and later up!raded to be
environment friendly in all respects%
Sa*i&n% &n'i(on)&n%a* +&a%#(&s
:i!hly efficient ES>s at Calciners and steam 4eneration >lant
MBA
Multista!e ashin! of red mud and its stora!e in specially desi!ned pond
Use of dust collectors at handlin! and transport areas of bau1ite, coal, lime
and alumina
+ecyclin! of aste ater
)he Environment Mana!ement Systems of +efinery certified to IS8D,/00,
standards on 'ebruary ,0, ,CC?, by M@s Aspects Moody Certification, U;
Mod&(ni/a%ion0"&1o%%*&n&2kin.0E$-ansion o+ M3R Co)-*&$
)he massive moderniFation@ deDbottlenec$in! 3 e1pansion pro!ram of M3+
Comple1 has been completed%
)he methodolo!y folloed for the e1ercise as as follosB
)he constraints in production, 2uality and cost of production ere studied in detail
inDhouse as ell by process licensors% )his as folloed up ith identifyin! solutions
for each constraint and choosin! the most modern and economical techni2ues to
achieve the objectives% Implementation of these techni2ues and installation@
commissionin! of the ne e2uipment on the earlier to streams rated at A00,000
M)>I enhanced the capacity to ,0, .0,000 M)>I%
'urther, a deDbottlenec$ed and moderniFed stream of Alumina >lant as installed
in the e1pansion sta!e, hich raised the >lant Capacity to a sta!!erin! ,.,?.,000
M)>I%
)he Chan!es bein! incorporated is primarily as follosB
Increase in speed of Cable belt to double that of the e1istin! speed
>reDdesilication of Bau1ite, before di!estion
Double sta!e dilution, ith second dilution after settlin!
:i!h concentration postDdesilication and settlin!%
Individual ;elly feed and lime dosin!
Improved :eat e1chan!ers for better e1chan!e rate ith loer surface area
InterDsta!e coolin! of precipitators
Cyclone Classification and SpentDli2uor solids separation
Si1Dsta!e evaporation
MBA
UtiliFin! conveyin! air in Calcinations for combustion
A*#)ini#) S)&*%&(
)he <, /.,000 tpa capacity Aluminium Smelter is
located at An!ul in 8rissa% Based on ener!y efficient stateD
ofDtheDart technolo!y of smeltin! and pollution control, the
Smelter >lant is in operation since early ,CA?%
>resently, the capacity is bein! e1panded to /,
=0,000 tpa%
The salient features:
Advanced ,A0 ;A cell technolo!y
MicroDprocessor based pot re!ulation system
'ume treatment plant ith dryDscrubbin! system for pollution control and fluoride
salt recovery
Inte!rated facility for manufacturin! carbon anodes, bus bars, anode stems etc%
/ 1 <. tone and / 1 /. tone furnaces and - 1 ,. tph and - 1 -0 tph in!ot castin!
machines
/ 1 /. tonne furnaces and - 1 C%. tph ire rod mills
- 1 /. tonne furnaces and =0@/- per drop billet castin! machine
- 1 ,%. tonne induction furnace ith a / tph alloy in!ot castin! machine
-=,000 tpa strip castin! machines
Eith the ac2uisition and subse2uent mer!er of International Aluminium >roducts
6imited &IA>6( ith *alco, the .0,000 tpa e1portDoriented +olled >roducts Unit is all
set to produce foil stoc$, fin stoc$, can stoc$, circles, coil stoc$, cable raps, standard
sheets and coils%
Ca-%i'& Po4&( P*an%
Close to the Aluminium Smelter at An!ul, a Captive >oer >lant of C=0 ME
capacity, comprisin! A 1 ,-0 ME clusters, has been established for firm supply of
poer to the Smelter%
MBA
P(&s&n%*,5 %h& 2a-a2i%, is 1&in. &$-and&d %o 6788 M!9
Th& sa*i&n% +&a%#(&s:
MicroDprocessor based burner mana!ement system for optimum thermal
efficiency
Computer controlled data ac2uisition system for onDline monitorin!
Automatic turbine runDup system
Specially desi!ned barrel type hi!h pressure turbine
Electrostatic precipitators ith advanced intelli!ent controllers
Eet disposal of ash
)he ater for the >lant is dran from +iver Brahmani throu!h a ? $m lon! double
circuit pipeline% )he coal demand is met from a mine of <%. million tpa capacity
opened up for *alco at Bharatpur in )alcher by Mahanadi Coalfields 6imited% )he
>oer >lant is interDconnected ith the State 4rid%
Po(% Fa2i*i%i&s
8n the *orthern Arm of the Inner :arbor of 9isa$hapatnam >ort on the Bay of
Ben!al, *alco has established mechaniFed stora!e and ship handlin! facilities for
e1portin! Alumina in bul$ and importin! Caustic Soda%
MBA
Th& sa*i&n% +&a%#(&s:
Ma1imum ship siFe D <.000 DE)
Alumina reception D /A 1 .< tonne payDload a!ons
Alumina stora!e D < 1 -.000 ton +CC Silos
Ship loadin! rate D --00 tph
)hese facilities are bein! up!raded to handle hi!her volumes of e1ports,
folloin! e1pansion of production capacities%
PRO"UCTS:
I9 A*#)ina:
Calcined Alumina J Metallur!ical 4rade%
:ydrated Alumina%
Special Alumina%
II9 A*#)ini#) M&%a* :
Electrical Conductor 4rade%
Commercial 4rade%
:i!h >urity 4rade%
MBA
Alloy 4rade%
In the forms of -0 ;!% In!ots @ =.0 ;!% sos and C%. mm and ?%. mm dia ire
rods% Alloys available in the form of ,0 ;!% In!ots and Billets in ,-. to -00 mm dia
&/ siFes(%
)he 2uality assurance associated ith *A6C8 products received international
acclaim ith *alco#s admission to 6ondon Metal E1chan!e &6ME( in ,CAC%
POLLUTION CONTROL AN" ENVIRONMENT :
*A6C8 has an e1cellent trac$ record in environment mana!ement% All the
units of the company are meetin! the statutory norms and conditions of pollution
control% )he environment mana!ement system of the M 3 + comple1 at Damanjodi
has been audited and recommended by Aspects Certification Services, U%; for
accredition under BS ??.0@IS8 ,/00,% Efforts in the similar direction are an in the
company#s smaller 3 poer plant at An!ul hich ill put the company at part ith
the select fe in the orld of Industry%
:UALITY MOVEMENT :
)he company has accredited the IS8 C00- for smelter plant at An!ul, Captive
>oer >lant at An!ul, Alumina +efinery at Damanjodi and Bau1ite Mines at
>anchpatmalli% Eith this the company has earned the uni2ue distinction of havin! the
2uality mana!ement system of all the production units IS8 certified%
IS8 C00- CertificationB
a( Alumina +efinery D *ov, ,CC/
b( Smelter >lant D 'eb, ,CC.
c( Bau1ite Mines D 7an, ,CC=
d( Captive >oer >lant D 'eb, ,CC=
)he Company also !ot accredited to BS ??.0 and IS8 ,/00, Certification for
Environment Mana!ement System of Mines and +efinery in ,CC=%
5uality circles are encoura!ed and motivated to participate in the competitions
or!aniFed at various levels%
MOU RATING:
*A6C8 bein! a public sector si!ns a memorandum of understandin! ith the
4overnment of India% *A6C8 is rated KE1cellentL in the evaluation of M8U si!ned
ith the 4overnment for < consecutive years%
MBA
EM>A*SI8* >+84+AMMES B
E;PANSION OF MINES AN" REFINERY COMPLE;
4overnment of India had approved the proposal for e1pansion of the Bau1ite Mines
and Alumina +efinery in ,CC=% )he salient features of the e1pansion areB
Ba#$i%& Min&s A*#)ina R&+in&(,
Ca-a2i%,
E$is%in.
A+%&( &$-ansion
7<5885888 TPY
<=5885888 TPY
=5885888 TPY
6>5?>5888 TPY
P(o@&2% 2os% Rs96789>A C(o(&s Rs96BB6966 C(o(&s
)he e1pansion of Alumina +efinery had been completed in to phases i%e%,
Debottlenec$in! &from A 6a$hs )>I to ,0%.0 6a$hs )>I( and )hird Stream &from ,0%.0
6a$hs )>I to ,.%?. 6a$hs )>I(% )he third Stream ill be a replica of one of the
debottlenec$ed streams%
+eputed consultants have been appointed for carryin! out Detailed En!ineerin!,
)enderin! and >rocurement Services and Construction Mana!ement for the various project
se!ments% )he names of the consultants and their area of or$ are as follosB
P(o@&2% S&.)&n% Cons#*%an%
Min&s and R&+in&(,9 M0s En.in&&(s India L%d95 N&4 "&*hi9
S%&a) G&n&(a%ion P*an%5 To4nshi-5
Rai*4a, Fa2i*i%,5 Po(% Fa2i*i%i&s a% Vi/a.9
M0s MECON5 Ran2hi
)he atmospheric pressure di!estion technolo!y of A> used in the e1istin! plant is
bein! adopted for the E1pansion% Some improvements developed by A> have been
incorporated in the e1istin! processes%
E;PANSION OF SMELTER AN" PO!ER COMPLE;
4overnment of India approved e1pansion of Aluminium and C>> at An!ul durin!
'ebruary, ,CCA% )he salient features of the e1pansion areB
SME6)E+ C>>
Capacity
E1istin! -,<0,000 )>I = N,-0 ME
MBA
After e1pansion <,/.,000 )>I ? N,-0 ME
>roject Cost +s%,=/,%CA Crores +s%/-0 Crores
+eputed consultants have been appointed for carryin! out Detailed En!ineerin!,
)enderin! and >rocurement Services and Construction Mana!ement for the various project
se!ments% )he names of the consultants and their area of or$ are as follosB
PROJECT SEGMENT CONSULTANT
S)&*%&(
Ca-%i'& Po4&( P*an%
To4nshi-
Rai*4a, Fa2i*i%,
M0s En.in&&(s India L%d95 N&4 "&*hi9
M0s MN "as%#( and Co95 Ch&nnai9
M0s NI"C5 N&4 "&*hi9
M0s MECON5 Ran2hi9
NE! PROJECTS AN" E;PANSION ACTIVITIES:
As part of its business developments strate!ies *A6C8 has underta$en a number of ne
projects% )hese projects ill broaden product mi1 of the company and provide value addition%
*A6C8 has chal$ed out a to phase e1pansion plan at a total cost of +s%<?-?
Crores% It has already !ot the approval of 4overnment of India and or$ has been started
Besides mana!ement as proDactive in initiatin! other projects to enrich its product
profile% )he projects hich are e1pected to be completed are as detailed beloB
PROJECT CAPACITY
CTPAD
LOCATION COST
CRS9 IN CRORESD
S%(i- Cas%in. 7E5888 An.#* <A9=E
SGA 785888 "a)an@odi <>9?7
F&o*i%& GAH A5888 "a)an@odi 7<968
Ga**i#) 86 "a)an@odi A9<E

)he on !oin! projects at Damanjodi hich are scheduled for completion in the first
2uarter of ,CCA are bein! mana!ed nicely ithout the cost overrun and time overrun% )he
special projects are specially loo$ed after by 4M &projects(, ith direct assistance from D4M
&projects(, CM &projects( and some middle level mana!ers%
As *A6C8 enters the -.
th
year of its e1istence in -00. ,a national asset orth above +s
,0,000 Crore !ets created out of an initial investment of +s -/0A Crore, hile yieldin! reach
dividends for the country ,for the state and for the people at lar!e%
MBA
NEE" FOR THE STU"Y:
In this conte1t there is a need to study the efficiency ith hich *A6C8 is contributin!
its part toards the economic development% 'or this purpose the study of major financial
activities does a lon! ay in understandin! the efficiency of *A6C8%
OBJECTIVES OF THE STU"Y:
Th& )ain o1@&2%i'&s o+ %h& s%#d, a(&:
)o study the firm#s financial position, past performance and assess its present
financial stren!th%
)o study the theory and practice of 'inancial Mana!ement%
)o analyFe the financial ratios and 'unds flo and Cash flo statement%
)o !et an insi!ht into various sources available for financin! or$in! capital
and its utiliFation%
)o study the firm#s social responsibility throu!h value added statement%
)o summariFe and su!!est herever necessary%
METHO"OLOGY FOR THE STU"Y:
)he data for the present study is dran both from primary and secondary sources%
)he primary data is collected from discussion ith the e1ecutives of *A6C8 and a fe
employees%
)he Secondary data is collected from the corporations annual reports, ma!aFines li$e
"parichay# and !uide li$e ")he Company you $eep#% Interpretation of various statistics has
been done throu!h analysis herever necessary% )he statistics for a period of - years only has
been ta$en for easy calculation%
E;PECTE" CONTRIBUTION FROM THE STU"Y:
)o provide a handy reference in understandin! the *alco#s financial policies
and procedures%
)o provide an insi!ht into various sources available for financin! or$in!
capital and its utiliFation%
)o provide an idea of optimum utiliFation of all material resources throu!h a
ell desi!ned bud!etary control system%
)o provide economic information to the investors and to jud!e the
mana!ement on its steardship of the resources of the enterprises and
achievement of corporate objectives%
)o provide information about the economic activity of *A6C8 in particular
to several !roup ho otherise has no access to such information%
MBA
)o provide an idea of achievin! optimum utiliFation of capacity ith loest
possible cost throu!h cost reduction and cost control techni2ues%
)o provide the sources for raisin! funds for the ne projects%
)o provide value for money to all sta$e holders%
)o comply the various statutory re2uirements in a manner prescribed under
the statue%
TOOLS 3 TECHNI:UES TO BE USE":
+atio Analysis%
'und 'lo Statement%
Cash 'lo Statement%
)rend Analysis%
Sensitivity Analysis%
4raphs, Charts%
LIMITATIONS:
Any project is not free from limitations% :ere also there may be several limitations to
the study% But the main limitations for this study areB
)he study is limited to / years i%e%, -00?D0A to -0,0D,,%
)he data used in this study have been ta$en from published annual reports only, hence
!roupin! or subD!roupin! and annualisation of data may sli!htly affect the result% It is not
possible to collect primary data from the company#s office%
MBA
CHAPTERFRAME !ORI:
Th& &n%i(& -(o@&2% (&-o(% is +(a)&d in%o NINE 2ha-%&(s9 Th& d&%ai*s o+ 4hi2h a(&
.i'&n 1&*o4:
6D I*)+8DUC)I8*B
)he bac$ !round of the company, About the Mana!ement, 9ision, Mission, Corporate
8bjectives, >roject 'inance, *A6C8 )oday, >roducts, >ollution Control and
Environment, 5uality Movement, E1pansion >ro!rammes, *e >rojects and E1pansion
Activities, *eed for the Study, 8bjectives of the Study, Methodolo!y for the Study,
Contribution from the Study, )ools 3 )echni2ues to be Used, 6imitations, ChapterD
'rame Eor$%
7D )EC:*8684IB
Introduction, Specific Areas in hich + 3 D Activities carries out by *A6C8, Benefits,
)echnolo!y Absorption, Adaptation and Innovation by *A6C8, )echnolo!y imported
last five years, +olled >roducts Unit%
BD A S)UDI 8' 'I*A*CIA6 MA*A4EME*) 8' *A6C8B
Introduction, 'inance 'unction, 'inancial 4oal, 'unctions of 'inancial
Mana!ement, 'inancial >osition of *A6C8, 'inancial Mana!ement of *A6C8,
4raphs%
<D E9E+I DAI 'U*C)I8* B
Cash Mana!ement in *A6C8, )enders and Contracts, Division of Eor$, Internal Audit
Section, Internal Audit )echni2ue, Bill Section, >ayment Mode, Establishment Section,
+a Materials Section%
>D I*9E*)8+I MA*A4EME*)B
Introduction, *ature, *eeds, 8bjectives, Accountin! >olicies, Inventory Mana!ement in
*A6C8, Control System, Stoc$ 6evels, )ools 3 )echni2ues, Advanta!es, E85,
Method of 9aluation, Conclusion, Inventory 6evels%
ED +A)I8 A*A6ISISB
Introduction, Si!nificance, 'inancial +atios, Analysis, Conclusion%
MBA
?D 'U*DS '68E A*D CAS: '68E S)A)EME*)SB
Introduction, Comparison beteen, Importances, )he terms used in the Cash flo
analysis of *A6C8%
=D +E'I*E+I >+8CESS 89E+9IEEB
Introduction, Basic )echnolo!y, >roduct 5uality, 6ist of +a Materials, Bau1ite
:andlin! Area, 4rindin!, >reDDesilication, Di!estion, Sand Separation 3 Eashin!,
Dilution, >ost Desilication, Settlin!, Mud Eashin!, 'locculation 3 Causticisation,
Security 'iltration, Calcinations%
AD C8*C6USI8* @ SUMMA+I 3 SU44ES)I8*S B
Summary and Su!!estion basin! upon the hole study%
Biblio!raphy%
68D A**EMU+E
MBA
CHA!"R # II
IN%"N!OR& MANA'"M"N!
MBA
INVENTORY MANAGEMENT
INTRO"UCTION
Inventories constitute the most si!nificant part of current assets of a lar!e majority of
companies in India% 8n an avera!e inventories are appro1imately =0G of current assets in
public limited companies in India% Because of the lar!e siFe of inventories maintained by
firms, a considerable amount is re2uired to be committed to them% It is, therefore, absolutely
imperative to man!e inventories efficiently and effectively in order to avoid unnecessary
investment% A firm ne!lectin! its inventories ill be jeopardiFin! its lon!Drun profitability and
may fail ultimately% It is possible for a company to reduce its levels of inventories
considerably, ithout any adverse effect on production and sales, by usin! simple inventory
plannin! and control techni2ues% )he reduction in "e1cessive# inventories caries a favorable
impact on a company#s profitability%
NATURE OF INVENTORIES
Inventories are the stoc$ of the product a company is manufacturin! for sale and
components that ma$e up the product% )he various forms in hich inventories e1ist in a
manufacturin! company areB
+a Materials are those basic inputs that are converted into finished product
throu!h the manufacturin! process% +a materials inventories are those units
hich have been purchased and stored for future productions%
Eor$DinDprocess inventories are semiDmanufactured products% )hey represent
products that need more or$ before they become finished products for sale%
'inished !oods inventories are those completely manufactured products
hich are ready for sale% Stoc$s of ra materials and or$DinDprocess
facilitate production% Ehile stoc$ of finished !oods is re2uired for smooth
mar$etin! operations% )hus, inventories serve as a lin$ beteen the
production and consumption of !oods%
)he levels of three $inds of inventories for a firm depend on the nature of its
business% A manufacturin! firm ill have substantially hi!h levels of all three $inds of
inventories, hile a retail or holesale firm ill have a hi!h level of finished !oods
inventories and no ra material and or$DinDprocess inventories%
Besides the aboveDmentioned three $inds, a fourth $ind of inventory, supplies &or
stores and spares( are also maintained by firms% Supplies include office and plant cleanin!
materials such as soap, brooms, fuel lubricants, li!ht bulb etc% )hese materials do not directly
enter in the production process, but are very much essential for smooth runnin! of the
production process% Usually, these supplies constitute a very small part of the total inventory
and do not involve any si!nificant investment%
NEE" TO HOL" INVENTORIES
)here are three !eneral motives for holdin! inventories%
)ransactions motive emphasiFes the need to maintain inventories to facilitate
smooth production and sales operations%
>recautionary motive necessitates holdin! of inventories to !uard a!ainst the
ris$ of unpredictable chan!es in demand and supply forces and other factors%
Speculative motive influences the decision to increase or reduce inventory
levels to ta$e advanta!e of price fluctuations%
OBJECTIVES OF INVENTORY MANAGEMENT
)he main objectives of inventory mana!ement are operational and financial% )he
operational objectives mean that the materials and spares should be available in sufficient
2uantity so that or$ is not disrupted for ant of inventory% )he financial objective means
MBA
that investment in inventories should not remain idle and minimum or$in! capital should be
loc$ed in it% )he folloin! are the objectives of inventory mana!ementB
a( )o ensure continuous supply of materials, spares and finished !oods%
b( )o avoid both overDstoc$in! and underDstoc$in! of inventory%
c( )o maintain investments in inventories at the optimum level as re2uired by
operational and sales activities%
d( )o $eep material cost under control so that they contribute in reducin! costs
of production and overall costs%
e( )o eliminate duplication in orderin!% )his is possible ith centraliFin! of
purchases%
f( )o minimiFe losses throu!h deterioration, pilfera!e, asta!e and dama!es%
!( )o desi!n proper or!aniFation for inventory mana!ement%
h( )o ensure perpetual inventory control so that material lyin! in stoc$ led!ers
should be actually lyin! in stores%
i( )o ensure ri!ht 2uality !oods at reasonable prices%
j( )o facilitate furnishin! of data for shortDterm and lon!Dterm plannin! and
control of inventory%
INVENTORY ACCOUNTING POLICIES IN NALCO:
+a materials, Stores, Spares parts and tools are valued at ei!hted avera!e
cost and net of CE*9A) credit herever applicable%
'inished !oods are valued at loer of cost or net realiFable value% Cost is
determined on the basis of current year#s avera!e cost of production and
e1cludes sellin! and distribution overheads, interest, e1chan!e variation and
depreciation on capitaliFed e1chan!e variation% Cost of 'inished !oods inside
the plant includes e1cise duty payable%
Intermediary product, viF% Anodes are valued at cost% Anode butts and anode
rejects are valued at loer of realiFable value or /.G of direct material cost
&bein! .0G of direct material cost less ,0G thereof toards reprocessin!
cost(%
Aluminium scrap is valued at loer of cost or net realiFable value% Scrap
arisin! out of replacement of major machinery components is valued on the
basis of technical estimation% 8ther scrap and bath tapped from pot shells are
accounted for on disposal%
Stoc$ of or$DinDprocess is ascertained on the basis of technical estimates
and is valued at loer of annual avera!e direct material, poer 3 fuel and
proportionate conversion cost or net realisable value%
Inventory of stores and spares, other than insurance spares, not moved for
more than . years is valued at .G of cost%
INVENTORY MANAGEMENT IN NALCO :
*A6C8 is a lar!e scale manufacturin! company involved in minin! of bau1ite and
production of Alumina and Aluminium% )herefore it has to maintain lar!e 2uantities of
inventories at production units, for its smooth runnin! and functionin!%
)he company has set a record by minin! of /A, ,=,?=- M) Bau1ite and producin! ,.,
.0,,00 M) of Alumina and a combined sales of -, C=,<=A M) of Aluminium durin! the
previous period -00<D0/%
)here are !enerally - types of Inventory B
,% >rocess or movement inventory
-% 8r!aniFation inventory
MBA
>rocess or movement inventory are re2uired because it ta$es time to complete
process@operation and to move product from one sta!e to another% )he 2uantity of such
inventory could be &avera!e output of process M time re2uired for the process(%
'or E1ampleB
If the avera!e output of the process is .00 units @ day and process time is . days, the
avera!e process inventory ill be -.00 units% If the avera!e sales at the arehouse are ,00
units a ee$ and transit time re2uires to ship the !oods from the plant to arehouse is <
ee$s% )hen, the avera!e movement of inventory could be <00 units%
8r!anisation inventory are maintained for plannin! and schedulin! successive
operation% +a materials inventory enables a firm to decouple purchasin! and production
activities to some e1tent% It provides fle1ibility in purchasin! and production%
In process inventory provides fle1ibility in production schedulin! so that an efficient
schedule and hi!h capacity may be attained% Eithout in process inventory a bottlenec$ in any
sta!e of production process can occur% )his results in delay and idle facilities%
'inished !oods inventory mar$etin! activities so that desirable results can be
achieved% If ade2uate finished !oods inventory is available the mar$etin! department can
meet the needs of the customers promptly irrespective of 2uantity and composition of !oods
floin! out of the production line currently%
INVENTORY CONTROL SYSTEM :
A proper inventory control not only serves the acute problem of li2uidity but also
increase profits and cause substantial reduction in the or$in! capital of the concern% In any
scheme of inventory control folloin! thin!s have to be studied%
,( Stoc$ level
-( Determination of safety stoc$
<( System of orderin! for inventory
/( >reparation of inventory report
STOCI LEVELS :
Carryin! of too much or too little of inventories is detrimental to the company% If the
inventory level is too the company ill face fre2uent stoc$ outs inventoryin! heavy orderin!
costs and if inventory level is too hi!h it ill be unnecessary tieDup of capital% )herefore, an
efficient inventory mana!ement re2uires that a company should maintain an optimum level of
inventory here inventory costs are minimum and also there is no stoc$ out%
THE VARIOUS STOCI LEVELS MAINTAINE" AT NALCO :
,( MI*IMUM 6E9E6BD
)his represents the 2uantity hich must be maintained in hand at all times% If stoc$s are
less than the minimum level then the or$ ill stop due to shorta!e of material %
'olloin! factors are ta$en into account hile fi1in! minimum stoc$ level%
a( +ate of consumptionB
It is the avera!e consumption of material in the company% )he rate of consumption
ill be decided on the basis of past e1perience and production plans%
b( *ature of materialBD
It also affects the minimum level% If a material is re2uired only a!ainst special orders
of the customer than minimum stoc$ ill not be re2uired for such material%
-( +ED8+DI*4 6E9E6B
Ehen the 2uantity of materials reaches a certain fi!ure than fresh order is sent to
!et materials a!ain% )he order is sent before the materials reaches minimum stoc$ level%
+eorderin! level is fi1ed beteen ma1imum and minimum level% )herate of consumption,
number of days re2uired to replenish the stoc$ and ma1imum 2uantity of materials
re2uired on anyday are ta$en into account hile fi1in! reorderin! level%
MBA
+E8+DE+I*4 6E9E6O ma1imum consumption M ma1imum reorder period%
<( MAMIMUM 6E9E6BD
It is the 2uantity of materials beyond hich a company should not e1ceed its
stoc$% If the 2uantity e1ceeds ma1imum level limit then it ill be over stoc$in!% A
company should avoid over stoc$in! because it ill result in hi!h materials cost%
MAMIMUM S)8C; 6E9E6O
+eorderin! levelPreorderin! 2uantity &minimum consumption M minimum reorderin!
period(
/( DA*4E+ 6E9E6BD
It is the level beyond hich materials should not fall in any case% If dan!er level
arises then immediate steps should be ta$en to replenish the stoc$ even if more cost is
incurred in arran!in! the materials% If materials are not arran!ed immediately there is a
possibility of stoppa!e of or$%
DA*4E+ 6E9E6O
Avera!e consumption M ma1imum reorder period for emer!ency purchases%
TOOLS AN" TECHNI:UES OF INVENTORY MANAGEMENT:
,( ABC A*A6ISISBD
)his is based on consumption% )he materials are divided into a number of cate!ory
for adoptin! a selective approach for material control% It is !enerally seen that in a
manufacturin! concern a small percenta!e of items contribute a lar!e percenta!e of value of
consumption and a lar!e percenta!e of items contribute a small percenta!e of values%
>ast e1perience in *A6C8 has shon that almost ,0G of the items contribute to
?0G of values of consumption and this cate!ory is called a cate!ory% Cate!ory C covers
about ?0G of items of materials hich contribute only ,0G of values of consumption%
Class *umber of item&G( 9alue of item
A ,0 ?0
B -0 -0
C ?0 ,0
)hus a hi!hest control should be e1ercised on "Item A# inorder to ma1imiFe
profitability on its investment% In case of "Item C# simple controls ill be sufficient% A little
more attention should be !iven toards "Item B#%
)he major inventory items in *A6C8 are composed ofB
+a MaterialsB )hat consists of C> co$e, C) pitch, Aluminium 'luoride, >i!
iron, :eavy fuel oil, 6i!ht Diesel oil, Alumina and anodes% As *A6C8 is a
process industry, it alays maintains sufficient stoc$s /. days% )he company
is maintainin! the stoc$ of ra material effectively and it has not faced a
situation li$e out of stoc$ ra materials durin! the recent past%
Stores and SparesB )he spares of different machines come alon! ith the
machinery at the time of their import% :i!hly valued spares lyin! ith the
plant and machinery are the insurance spares% )he hi!h value spare parts are
produced a!ainst indents raised by user departments hile recurrin! spare
parts are purchased at re!ular intervals at automatic procurement &A>( spares%
Intermediary !oodsB Ehich consists of 4reen Anodes, Ba$ed Anodes, Anode
stem, Cast iron holders etc% of hich *A6C8 has installed its on plant for
producin! the 4reen and Ba$ed anodes and imports them only hen there is
a shorta!e%
'inished !oodsB )hat consists of Alumina, Aluminium In!ots, Sa In!ots,
Billets, Eire bars, sheets etc% )he finished products of *A6C8 more very
fast and hence, the stoc$ of finished !oods is very less in the company%
MBA
)he company also effectively reuses the rejected inventory% )he reject inventory in
*A6C8 comprises of anode butts 3 rejects and rejects of finished products% Anode rejects
are recycled and reused in the process hile finished stoc$ rejects are either recycled are or
sold at a loer price% )he company is e1ercisin! !ood control to minimiFe the rejects%
Material Cost_per_unit
142K Porpex F.C 309,844.40
Alclar - 661 169,991.25
Alclar - 662 204,936.67
Bauxite -
C..! 145,471.25
Cau"tic #o$a - %i&a' ()*$i'e*eou"+ 18,200.09
Cau"tic #o$a (),p+ -a,a*.o$i 17,290.05
Cau"tic #o$a ()*$+ -,.. 18,830.63
Cau"tic #o$a-%i&a' (),porte$+ 16,806.11
C/ar, 0o* 1o2e* Filter Ba'. 2,172.30
C/ar* 0o* 1o2e*3ilter Clot/,Kell4 Filter. 958.00
Coal 1,093.12
C4li*$rical Filter Ba' #i&e 130!, 5 250!, 6o*' 205.31
-e3oa,er (0-85320+ 211.12
-i"c Filter Ba'" -
-i"c3ilter Ba'" )* Clartex 470723 #12 1it/ -i, 202052405700 !, 2,172.30
-i"8 Filter 0o*9o2e* Clot/ For :ac8 Filter 564.37
Filter Ba' For Ba' Filter !o$el 135.93
Filter Ba' !a$e ;3 1o2e* Clot/ <"e$ 1it/out )**er Ba' For -= Filter 340.08
Filter Ba' !a$e ;3 1o2e* Clot/ <"e$ 1it/out )**er Ba' 3 Filter 680.16
Filter Ba'" 21.33
Filter Ba'" (For K9-302+ 13053194 !, 6o*' !a8e> !a"turilal 400.40
Filter Ba'" 6 14.94
Filter Ba'" 700 !e"/ Cour"e 334.03
Filter Ba'" For -oor ;li2er -i"c Filter. 351.22
Filter Ba'" ?.0o.Pe7)*$7Pe75017Pol4"ter 0o*-1o2e* 0ee$le Belt 200.31
Filter Ba'" #i&e 15253664 !, !a8e> !a"turilal,K9-301 468.00
Filter Clot/ For (Fp 101 @o 105+ 212,959.00
Filter Clot/ For 207 A7B 130,333.50
Aea24 Fuel ;il 13,687.61
A4$rate$ 6i,e -
6$o 23,272.22
6i,e 2,451.87
6o9 A"/ Calori3ic Coal (),porte$+ 2,879.34
!e$ia Clot/ 2,696.27
!e$ia Clot/ 1,600.63
!e$ia Clot/ 658.37
0alco #4*t/etic Floccula*t A-120 146,495.79
0o* ;2e* -i"c Filter Clot/ For Bo8ela -i"c Filter 514.16
MBA
0o* 1o2e* Filter Ba'" For Bo8ela Filter !a8e-#upre,e 498.83
0o* 1o2e* Filter Ba'" For -= Filter !a8e #upre,e 338.49
0o* 1o2e* Filter Ba'" For au$3ri* Filter !a8e #upre,e 551.78
Pol4 Prop4le*e @/rea$ 1,203.50
Pol4"ter 0o* 1o2e* Clot/ Filter Ba'" 67.50
#ector Cla,p For -oor ;li2er -i"8 Filter 6,397.90
#o$iu, #ilicate 5,937.30
#uper3loc Ax - 400 142,144.17
#uper3loc Ax-401 165,874.46
#4*t/etic Floccula*t -8 #et )" 1177 #p 308 166.40
#4*t/etic Floccula*t -8 #et )" 1177A15 182.07
#4*t/etic Floccula*t, 0alco 85035 164.32
<*$er Clot/ For 0e9 -ru, Filter #i&e 6,661.04
1a"/ Coal 1,532.52
1/eat Bra* 6,057.85
MBA
T(&nd Ana*,sis o+ Ra%io o+ In'&n%o(, %o C#((&n% Ass&%s:
CRs9in C(o(&sD
YEAR INVENTORY CURRENT
YEAR
RATIO
788886 <8?978 68<=97< B=9=J
788687 <=B9<8 66B=9<> <79>J
78878B <=A97> 688E9>8 <=9EJ
788B8< <=89<= AA89>6 <=9>J
788<8> >7A98E 6=6698< 7A97J
)he level of Inventory in *A6C8 remains more or less around .0 percent of current
assets% )he amount of inventory also remains around /00 to ..0 crores%
T(&nd Ana*,sis o+ )o'&)&n% o+ A'.9 In'&n%o(, %o Sa*&s:
CRs9 in C(o(&sD
Y&a( In'&n%o(, A'.9
In'&n%o(,
In2(&as&0
"&2(&as&
J o+
In2(&as&0
"&2(&as&
Sa*&s In2(&as&0
"&2(&as&
J o+
In2(&as&0
"&2(&as&
7888
86
<8?978 <7B9?7 6=98= <968J 7<8=9E8 7EE97= 679<BJ
7886
87
<=B9<8 <<>9B8 769>= >968J 7B=>9<7 7B96= 89AEJ
7887
8B
<=A97> <=E9BB <698B A976J 7?BA9E? B><97> 6<9=>J
788B
8<
<=89<= <=<9=? 69<E 89B8J BBB=9=? >AA978 769=?J
788<
8>
>7A98E >8<9?? 6A9A8 <968J <<BA9AA 6686967 B79A=J
'rom the above trend analysis table e can notice that e1cept in the year -00,D0-, the
amount of inventory and sales has been increasin! !radually year by year% )he sharp dip in
sales durin! -00,D0- has been due to an unprecedented crisis in -00, summer in hich
almost /0G of pots had to be shut off resultin! in considerable loss of production%
MBA
T(&nd Ana*,sis o+ In'&n%o(, T#(no'&( Ra%io o+ NALCO:
CRs9 In C(o(&sD
YEAR SALES INVENTORY INVENTOY
TURNOVER
RATIO
STORAGE
PERIO"
Cin da,sD
788886 7<8=9E8 <8?978 >9A7 E7
788687 7B=>9<7 <=B9<8 <9AB ?<
78878B 7?BA9E? <=A97> >9E8 E>
788B8< BBB=9=? <=897> E9A> >B
788<8> <<BA9AA >7A98E =9<8 <<
'rom the above trend analysis table, e can notice that the inventory turnover ratio of
*A6C8 hovers around / D A%.0 times in a year and the stora!e period of inventory is
beteen /0 and ?. days% *A6C8 had a better Inventory Mana!ement Methods and it is the
last sta!e of movin! inventories%
T(&nd Ana*,sis o+ Finish&d Goods T#(no'&( Ra%io o+ NALCO:
CRs9 In C(o(&sD
&ear (ales Avg. sto)* of
+inished
'oods
+inished
'oods !,rnover
Ratio
Holding -eriod
.in days/
788687 7B=>9<7 6><9E6 6>9< 7<
78878B 7?BA9E? 6>89A? 6=97 78
788B8< BBB=9=? 6<B97B 7B9B 6E
788<8> <<BA9AA 6E796B 7?9< 6B
'rom the above trend analysis table e can notice that the finished !oods turnover ratio
of *A6C8 is !radually increases at -?%/ times in the current year% )he stora!e period of
finished !oods is beteen ,0 and -. days, hich is very !ood and reflects the hu!e demand
of the finished products of *A6C8%
-( MIQ A*A6ISISB
)his is based on inventory and all the calculations and ma$in! cate!ories are some as
that of ABC analysis%
M O ?0G of inventory%
I O -0G of inventory%
Q O ,0G of inventory%
<( 'S* A*A6ISIS
"'# stands for fast movin! items hich includes items havin! < or more times
movement in a year% "S# stand for slo movin! items hich includes items havin! less than <
times movement since . years% "*# stands for nonDmovin! items hich includes itemsD
a( *ot moved since . years%
b( +eceived before . years% It mainly includes insurance items%
MBA
)he 'S* Analysis is done by *A6C8 to identify the fast movin!, slo movin! , nonD
movin! items and as per the re2uirement of accountin! standard a provision of -0G if the
value of nonDmovin! itemsare made on the boo$s of account and char!ed to profit and loss
account%
/( >E+>E)UA6 I*9E*)8+IR
*A6C8 follos the perpetual inventory system hich is a system of maintainin! bin
cards and stores led!er alon! ith continuous stoc$ verfication % )his is a method of
ascertainin! balance after every issue and receipts of material throu!h stoc$ records to
facilitate re!ular chec$in! and to avoid closin! don for stoc$%
In order to ensure accuracy of perpetual inventory records *A6C8 chec$s the physical
stoc$ by a pro!ram of continuous stoc$ chec$in! throu!h an outside a!ency of continuous
stoc$ chec$in! throu!h an outside a!ency ho are the practicin! chartered accountants% Any
difference noted beteen the physical stoc$ and stoc$ records are investi!ated and
rectifications are made the and there% >erpetual inventory system is used as an aid to material
control because balance of stoc$ shon by in cards or the stores led!er should a!ree ith the
balnce ascertained by physical chec$in!% If the physical verfication reveal that the physical
balance is more than the balance shon by the bin or stores led!er, a debit note is prepared
and stoc$ records are adjusted accordin!ly% Similarly if there is a shorta!e of stoc$ , credit not
is prepared and stoc$ records are adjusted accordin!ly% So that, it shos the actual balance%
Stoc$ adjustment account is prepared and debited ith shorta!e of stoc$ and credited it
surplus% At the end of the year the balance of the adjustment account is transferred to profit 3
loss account%
AD9A*)A4ESB
)he folloin! are the are the advanta!esof perpetual inventory system%
,( it obviates the necessity of the physical chec$in! of all items of stores at the end of
the year and thereby avoids dislocation of production%
-( A system if interval chec$ in operation all the time because bin cards and stores
led!er acts on the cross chec$ on each other%
<( )he capital invested in stores are $ept under control because actual stoc$ can be
compared ith minimum and ma1imum stoc$ level
/( Shorta!e of stoc$s are readily discovered and efforts are made to avoid shorta!e of
stoc$ in future%
E85B &EC8*8MIC 8+DE+I*4 5UA*)I)I(
A decision about ho much order has !reat si!nificance in inventory mana!ement% )he
2uantity to be purchased should be neither too small nor too bi! because costs of buyin! and
MBA
carryin! materials are very hi!h% E85 is the siFe of the lot to be purchased hich is
economically viable% It is the point at hich inventory carryin! costs are e2ual to the orderin!
costs% It is assumed at costs of mana!in! inventory is made of solely of to parts that means
orderin! cost 3 carryin! costs%
Assumptions of E85 B
)he folloin! assumptions are madeR
,( )he !oods can be purchased henever these are needed%
-( )he 2uantity to be purchased by the concern is certain%
<( )he prices of !oods are stable% It results to stabiliFe carryin! costs%
E85 can be calculated ith the help of folloin! formulaB
E85 O -AS @ I Ehere,
A O Annual Consumption in rupees
S O Cost of placin! an order
I O Inventory carryin! costs of one unit%
METHO" OF VALUATION OF MATERIALS:
)he value of materials have a direct bearin! on the income of a concern, so it is necessary
that a method of pricin! materials should be such that it !ives a realistic values of stoc$% )he
traditional method of valuin! materials "Cost price or Mar$et >rice# hichever is less is no
lon!er the only method%
If mana!ement is interested in shoin! more profits then it can choose such a
method, hich ill sho more stoc$ or viceDversa% So, to safe!uard the public interest the
4overnment of India had instituted statutory controls to prevent fre2uent chan!e of materials
valuation methods% A concern ill have to use a particular valuation method for at least <
years and any chan!e thereafter must be approved by the board%
*A6C8 has adopted the ei!hted avera!e method for valuation of its materials% In this
method, the total number of items in stoc$ divides the total cost of all the materials% )he price
calculated in this manner ill be used for issue of materials upto the time a fresh purchase has
not been made% After a fresh purchase the 2uantity ill be added to the earlier balance
2uantity and material cost ill be added to the earlier costs% A fresh price is calculated by
dividin! the chan!ed total cost by the number of units in stoc$ after the purchase% A ne price
is calculated henever a fresh purchase is made%
C8*C6USI8* B
)he Inventory Mana!ement in *A6C8 is very systematic and the fact is confirmed
by the folloin! comparative inventory analysis of last < years%
I*9E*)8+I 6E9E6S B
MBA
Inventory levels at the close of the last < years are !iven beloB
&+s% In Crores(
2002-03 2003-04 2004-05
Raw Materials ?,%=, /A%0A .=%,?
Stores, Spares & Others -A0%?/ -A<%.. -C?%/A
Finished Goods ,<?%=0 ,/A%A. ,?.%/,
Percentage !" o# #inished
goods to sales
.G /%.G /G
*A6C8 has nicely accepted the fact that a most ri!id control over cash is re2uired so
also it is desirable to have an efficient as ell as e2uipped stores department to e1ercise an
effective material control because materials become cash on the sale of finished products
hich represents an e2uivalent amount of cash%
MBA
CHA!"R # III
$ S%&'( OF F)*$*+)$,
M$*$G-M-*% OF *$,+O
MBA
A STU"Y OF FINANCIAL MANAGEMENT OF NALCO
INTRO"UCTION:
As of the late ,C?0#s the financial mana!er had transcended the traditional role in
preparin! reports and raisin! e1ternal funds% As business became lar!er and more comple1,
finance assumed the responsibilities of dealin! ith the problems and decisions associated
ith mana!in! the firm#s assets% )he 'inancial Mana!er is presently involved ith the
allocation of funds to different projects and activities ith the measurement of results of
each allocation%
)oday#s financial mana!er deals ith variety of development that effects the firms
li2uidity and profitability includin!B
:i!h finance cost identified ith ris$ bearin! investment in a capital intensive
environment%
Diversification by firms into different business, mar$ets and product lines%
:i!h rate of inflation that si!nificantly effect plannin! and forecastin! of the firms
operation%
Emphasis on !roth, ith its re2uirement for ne sources of fund and improve use of
e1istin! funds%
:i!h rate of chan!e in technolo!y ith an accompany need for e1penditure on
resources and development%
Speedy dissemination of information, employin! hi!h speed computers and nation
ide and orld ide net or$ for transmittin! financial and operatin! data%
FINANCE FUNCTION:
)here are four important Mana!ement 'inancial 'unctionsB
Investment or lon! term asset mi1ed decisions%
'inancin! or capital mi1ed decision%
Dividend or profit allocation decisions%
6i2uidity or short term asset mi1ed decisions9
FINANCIAL GOAL:
)he startin! point for developin! !oal oriented financial structure is the definin! of
or$able !oals for the firm as a hole% )o primary !oals are commonly encounter i%e%,
ma1imiFation of ealth%
,% MAMIMISA)I8* 8' >+8'I)SB
>rofit ma1imiFation has the benefit of bein! simple and strai!ht forard statement of
purpose% It is easily understood as a rational !oal for a business and it focuses the firms efforts
toards ma$in! money% But, the precise meanin! of the profit ma1imiFation objective is
unclear% )he definition of the profit is ambi!uous%
-% MAMIMISA)I8* 8' EEA6):B
)he second fre2uently encountered objective of the firm is to ma1imiFe the value of
the firm over the lon! run% )his !oal may also be stated as the ma1imiFation of ealth ith
ealth defined as the net present orth of the firm% Ma1imiFation of ealth implies other
factors in addition to profit% As a !eneral !uideline the firm that is ma1imiFin! ealth must do
the folloin!B
Avoid hi!h levels of ris$%
>ay dividends%
See$ !roth%
Maintain mar$et price of stoc$%
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Ma1imiFation of ealth is more useful than ma1imiFation of profits as it balances the
profit factor ith related !oals such as !roth, stability, ris$ avoidance and the mar$et price
of the firms stoc$%
FUNCTIONS OF FINANCIAL MANAGEMENT:
In the conte1t of achievin! the !oals, the 'inancial Mana!er performs tas$s in several
areas% Each tas$ is lin$ed ith the !oal of li2uidity, profitability or both% )he second
classification method focuses on hat is bein! mana!edDAssets or funds%
FUNCTIONS LEA"ING TO LI:UI"ITY:
In see$in! sufficient li2uidity to carry out the firm#s activities the 'inancial Mana!er
performs tas$s such asB
a% 'orecastin! Cash 'lo%
b% +aisin! 'unds%
c% Mana!in! the flo of internal funds%
FUNCTIONS LEA"ING TO PROFITABILITY:
In see$in! profit for the firm the 'inancial Mana!er ill provide specific input
into the division ma$in! process based on his financial trainin! and actions ith
respect to profitability% Some of the specific functions areB
a% Cost Control%
b% >ricin!%
c% 'orecastin! future profits%
d% Measurin! cost of capital%
FINANCIAL POSITION OF NALCO
Fo**o4in. is %h& +inan2ia* -osi%ion o+ Na*2o +o( *as% B ,&a(s9
CRs9 In C(o(&sD
Lia1i*i%i&s 788?8= 788=8A 788A68
&a( >aid up capital
&i( 4overnment
&ii( 8thers
&b( +eserves 3 Surplus
'ree reserves 3 surplus
Capital reserves
Debenture redemption reserve
&c( Borroin! from
&i( *onDconvertible +edeemable
Debenture
&ii( Bonds
&iii( 'orei!n currency loan
.=,%.0
A-%A,
-,/?%C/
,%--
/<,%??
=/<%./
//0%00
,/.%=?
.=,%.0
A-%A,
-</0%/0
,%,?
<-/%,=
/-A%<<
//0%00
DDD
.=,%.0
A-%A,
-AC/%0.
,%,-
-,?%,C
-,/%<C
//0%00
DDD
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&iv( Commercial paper
&v( E1port pac$in! credit
&vi( 8ther loan
&d( Current liability 3 provision
&e( Deferred ta1 liability
,C=%<?
,<?%A?
DDD
?,C%-0
/C-%,<
DDD
-.<%</
,CC%??
,0,,%=0
.?<%,?
DDD
DDD
DDD
A=/%-A
=0C%CC
TOTAL E888987 E76A97> >==>9BB
Ass&%s 788?8= 788=8A 788A68
&f( 4ross Bloc$
&!( 6ess cumulative Depreciation
&h( *et Bloc$
&i( Capital Eor$ in pro!ress
&j( Investment
&$( Current Assets, 6oans 3 Advances
&l( Miscellaneous E1penditure not ritten off
=-??%?.
<<AA%,<
?/.C%C=
<?/?%0,
A0C-%A?
/,AC%<C
-AAC%=-
,C-0%A,
.0%00
,,<A%/.
,%,/
<?,-%C.
,-CA%==
-00%00
,00=%.0
,%,/
<C0<%/A
?C,%</
-00%00
CC0%.,
DDD
TOTAL E888987 E76A97> >==>9BB
&m( Eor$in! Capital &$(D&d(
&n( Capital Employed &h(P&m(
&o( *et Eorth &a(PS&b(&i(P&ii(TD&l(
&p( *et Eorth per rupee of paid up capital &+s%(
/,C%-.
<<0A%A?
<---%AA
.%00
&D( .%,0
<?0?%A.
<<0?%?<
.%,<
,-=%-<
/0-C%?,
<?..%..
.%A<
FINANCIAL MANAGEMENT OF NALCO:
Under e1tremely difficult lo!istics of implementin! a MultiD*ational 4reen 'ield
>roject, *A6C8 successfully constructed and commissioned each of its units on schedule,
ithin estimated cost, a feat hich has fe parallels in Indian >ublic Sector%
A si!nificant achievement in the 'inancial Mana!ement of *A6C8 has been the
prepayment of overseas loans amountin! to +s% C?A@D Crores durin! March#C. to March#C?
period% )his proactive measure has not only brou!ht don the interest liability from +s%
,A/%0< Crores in ,CC/DC. to +s%=/%A< in ,CC.DC= to +s% C%0A Crores in ,CC=DC? but also
helped to achieve around +s%/. Crores savin! on adverse e1chan!e rate variations as on <,
st
March#CA% At this point of time the debt liability of *A6C8 is limited to +s%.A0 Crores in
form of a -0 Billion 7apanese Ien loan repayable in full by end of Sept#CA%
Because of *alco#s efficient financial Mana!ement strict fiscal discipline endeavor to
increase tar!eted production, hich are the essential in!redients for the success of *A6C8
hich has made the company a Qero debt company as on <0
th
September,,CCA%
MBA
CHA!"R # I%
RA!IO ANAL&(I(
MBA
RATIO ANALYSIS
INTRO"UCTION
+atio analysis is a poerful tool of financial analysis% A ratio is defined as Kthe
relationship beteen to or more thin!sL% In financial analysis, a ratio is used as a bench
mar$ for evaluatin! the financial position and performance of a firm% )he relationship
beteen to accountin! fi!ures, e1pressed mathematically, is $non as a financial ratio%
+atios help to summariFe the lar!e 2uantities of financial data and to ma$e 2ualitative
jud!ment about the firm#s financial performance%
SIGNIFICANCE OF RATIO ANALYSIS :
)he ratio analysis is one of the most poerful tools of the financial analysis%
,% It is used as a device to analyFe and interpret the financial health of
an enterprise%
-% Eith the use of ratio analysis one can measure the financial condition
of a firm and can point out hether the condition is stron!, !ood,
2uestionable or poor% )he conclusions can also be dran as to
hether the performance of the firm is improvin! or deterioratin!%
)hus, ratios have ide applications and are of immense use today%
MBA
Finan2ia* Ra%ios :
S*9No9 Ra%ios Fo()#*aHs 786866 788A68
,% Current +atio CA@C6 -%-. ,%,/
-% 6i2uid +atio 6A@C6 ,%.C 0%.C
<% Stoc$ )urnover +atio Sales@inventory A%/0 =%C.
/% Debtors )urnover +atio Sales@Debtors /?%A/ <-%==
.% Av!% Collection >eriod *o% of Eor$in! days
Debtors )urnover +atio
A days ,, days
=% Creditor )urnover +atio >urchases@Creditors ,%C0 ,%A,
?% Av!% >ayment >eriod *o% of Eor$in! days
Cr% )urnover +atio
,C- days -0- days
A% E%C )urnover +atio Sales@*et E%C /%/- -=%.0
C% >roprietary +atio Share :olders 'und
)otal Assets
0%A? 0%?.
,0% 4%> +atio &4%>@*et Sales( M ,00 .A%,0 .,%.0
,,% DebtDe2uity +atio 8utsiders 'und
Sh% :olders 'und
0%,? 0%/0
,-% '%A )urnover +atio Sales@'i1ed Assets ,%0- 0%?,
,<% *et >rofit +atio &*%>@Sales( M ,00 -?%A, --%,0
,/% E>S >rofit available for E2%Sh%:olders
*o% of E2% Shares
,C%,? ,,%//
,.% Dividend Iield +atio Dividend >er Share
Mar$et 9alue >er Share
0%0= 0%0A
,=% Mar$et 9alue >er Share Sh% :olders 'unds
*o% of E2, Shares
?-%C, .A%<,
,?% Dividend >er Share Div% +ate P Div% )a1
*o% of E2% Shares
/%.. /%.,
,A% Dividend >ayout +atio Div% >er E2% Shares
Earnin! >er Share
0%-/ 0%<C
,C% >rice earnin! +atio Mar$et 9alue >er Share
Earnin! >er Share
<%A0 .%,
-0% Capital 4earin! +atio E2% Sh% CapitalP+3S
>ref% CapitalP6on!Dterm debt
D .%?/
-,% +eturn on Sh% :olders
Investment
*%>&after Int 3 )a1(
Sh% :olders 'unds
0%<, 0%-<
--% +atio of +eserves to E2%
Capital
+eserves
E2% Sh%%Capital
=%-C /%A<
MBA
ANALYSIS OF RATIO :
69 SHORTTERM SOLVENCY POSITION :
ShortDterm solvency position of the company is very sound% )he current ratio in
-00CD,0 as ,,/G and in --0/D0. it is --.G hich is ell above the norms of ,C.G to
-00G%
)he li2uid ratio hich as .CG in -00CD,0 and ,.CG in -0,0D,, is also ell above
the !eneral accepted principles of -.0G%
)he Inventory turnover ratio is increasin! constantly over the years hich shos the
2ualitative output of the company and thereby the constant increase in demand%
)he company !enerally sells a!ainst advance payments, a!ainst =0 days usuance 6@C
and a!ainst =0 days stand by 6@C% )hus, on an avera!e the credit terms are - months% )he
avera!e collection period for -00CD,0 as ,, days and for -0,0D,, it is A days hich shos
the efficiency of receivables mana!ement%
)he or$in! capital turnover ratio as -=.G in -00CD,0 and is //-G in -0,0D,,
hich shos the defficiency ith hich the or$in! capital is bein! used by the company%
79 LONGTERM SOLVENCY POSITION
)he lon! term solvency position of the company is very encoura!in!% )he debtDe2uity
ratio in -00CD,0 as /0G and in -0,0D,, is ,?G hich shos efficiency of servicin! loans
by the company% )hou!h the debtDe2uity ratio is considered to be a satisfactory ratio, a lo
ratio is considered as favorable from the lon!Dterm creditors point of vie because a hi!h
proportion of oners fund provides a lar!er mar!in of safety for them%
)he proprietory ratios also supports the vie stron!ly as the shareholders fund ?.G
in -00CD,0 and A?G in -0,0D,, of the total assets% )his proves that the company is not selfD
sufficient in financin! its affairs%
B9 ANALYSIS OF PROFITABILITY
)he profitability of the company is shoin! a very encoura!in! trend% Every year it is
touchin! a ne hei!ht%
)he net profit ratio of the company in -00CD,0 as --G and in -0,0D,, it is -AG of
turn over hich indicates a satisfactory return on its investment and also indicates the
company#s capacity to face adverse economic conditions such as price competition, lo
demand etc%
<9 OVERALL PROFITABILITY RATIO
)he return on shareholders on investment in -00CD,0 as -<G and <,G in -0,0D,,
hich shos the trend of !roth and prosperity in the company#s profitability and efficiency%
)he earnin!s per share&E>S( as ,,%// in -00CD,0 and ,C%,? in -0,0D,, hich
shos the constant increase in E>S over the years% )he E>S loo$s to be lo even throu!h the
company have earned hu!e profits in both the years because of the hi!h e2uity base of the
company%
MBA
)he price earnin! ratio &>@E ration( in -00CD,0 as .%, and in -0,0D,, it is <%A0
hich is shoin! the ee$ fundamentals of the company#s sales%
>9 ANALYSIS OF CAPITAL STRUCTURE
)he capital !earin! ratio for the year -00CD,0 and -0,0D,, are .%?/ and *I66
respectively hich shos the defficient debt servicin! of the company%
)he reserve to e2uityDcapital ratio of -00CD,0 and -0,0D,, are /%A< and =%-C
respectively hich shos that hi!h mar!in of profit are retained by the company for future
!roth%
CONCLUSION:
)he financial results over the year reflect the company#s robust performance in
production 3 mar$etin!% )he sales turnover !ro by <-%/CG over the previous year to reach
//<C%CC Crores%
*et profit !re by ??%=.G over the previous year to reach ,A?0%-? Crore% )he e1port
earnin! of --00%-.crores includin! a forei!n e1chan!e component of -,.0%?.crores is yet
another landmar$ achievements of the year%
)he !ross mar!in has !one up by /A%<CG over the previous year to reach at -<C<%A/
Crores%
)he company pursued over the year its policy of proactive servicin! of the overseas
debt% )his has resulted in a total paybac$ of +S% =?0%0. Crores includin! short term
borroin! +s% /.=%,, Crores%)hese measures have brou!ht don the outstandin! commercial
borroin! to +s%-,/%<C Crores%
)he debt% e2uity ratio has decreased from /0G to ,?G as compared to previous year%
)he E>S has almost improved from +s% ,,%// in -00CD,0 to +s%,C%,? in -0,0D,,%)he current
ratio improved from ,,/G in -00CD,0 to --.G in -0,0D,,% Despite hi!h e2uity base the
mar$et has been ta$in! $een interest in the company#s scrip because of consistent
performance and stron! fundamentals%
MBA
CHA!"R # %
+$ND( +LO0 AND CA(H +LO0
(!A!"M"N!
MBA
FUN"S FLO! STATEMENT
)he statement of chan!es in financial position, prepared to determine only the sources
and uses of or$in! capital beteen dates of to balance sheets, is $non as the funds flo
statements% Eor$in! capital is defined as the difference beteen current assets and current
liabilities% It indicates the various means by hich funds are obtained durin! a particular
period and the ays in hich these funds ere employed% It is a statement of sources and
applications of funds%
CASH FLO! STATEMENT:
An analysis of cash flos is useful for shortDrun plannin!% A firm needs sufficient
cash to pay debts maturin! in the near future, to pay interest and other e1penses and to pay
dividends to share holders% )he firms can ma$e projection of cash inflos and outflos for
the near future to determine the availability of cash% )his cast balance can be matched ith
the firm#s need for cash durin! the period, and accordin!ly, arran!ement can be made to meet
the deficit or invest the surplus cash temporarily% A historical analysis of cash flos provides
insi!ht to prepare reliable cash flo projections for the immediate future%
KA statement of chan!es in financial position on cash basis, commonly $non as the
cash flo statement, summariFes the causes of chan!es in cash position beteen dates of to
balance sheetsL% It indicates the sources and uses of cash% )he cash flo statement similar to
the funds flo statement e1cept that it focuses attention on cash instead of or$in! capital
&funds(%

COMPARISON BET!EEN FUN"S FLO! STATEMENT AN" CASH FLO!
STATEMENT:
A cash flo statement is much similar to a funds flo statement as both are prepared
to summaries the cases of chan!es in the financial position of a business% :oever, folloin!
are the main difference beteen a funds flo and a cash flo statement%
,( 'unds flo statement is based on a ider concept of funds i%e% or$in! capital hile cash
flo statement is based on the narroer concept of funds i%e% cash only, hich is only one
element of or$in! capital, the others bein! debtors, stoc$, temporary investment, bills
receivable etc%
-( 'unds flo statement is based on accrual basis of accountin! hile cash flo statement is
based on cash basis of accountin!% In each flo statement hile calculatin! operatin!
profits, adjustments for prepaid and outstandin! e1penses and incomes are made to
convert the data from accrual basis to cash basisR but no such adjustments are re2uired to
be made hile preparin! a funds flo statements%
<( A funds flo statement s does not reveal chan!es in current assets and current liabilities,
rather theses appear separately in a schedule of chan!es in or$in! capital% *o such
schedule of chan!es in or$in! capital is prepared for a cash flo statement and chan!es
in all assets and liabilities fi1ed as ell as current are summariFed in the cash flo
statements%
/( Cash flo statements is prepared by ta$in! the openin! balance of cash addin! to this all
the inflos of cash and deductin! the outflos of cash from the total% )he balance i%e%
openin! balances of cash, is reconciled ith the closin! balance of cash% *o such openin!
or closin! balances appear in a funds flo statements% )he net difference beteen sources
and applications of funds does not represent cash rather it reveals the net increase or
decrease in or$in! capital%
MBA
.( 'unds flo statements is useful in plannin! intermediate and lon!Dterm financin! hile a
cash flo statement is more useful for shortDterm analysis and cash plannin! of the
business%
IMPORTANCE OF FUN"S FLO! STATEMENT:
A funds flos statement is an essential tool for the financial analysis and is of primary
importance to the financial mana!ement% )he importance#s of funds flo statement are as
follosB
,( Eith the help of funds flo statement, a firm can plan the deployment of its resources and
allocate them amon! various application%
-( A projected funds flo statement acts as a !uide for future to the mana!ement% )he firm#s
future needs of funds can be projected ell in advance and also the timin! of these needs%
<( A funds flo statement helps in e1plainin! lo efficiently the mana!ement has used its
or$in! capital and also su!!ests ays to improve or$in! capital position of the firm%
IMPORTANCE OF CASH FLO! STATEMENT:
Cash flo statement is of vital importance to the financial mana!ement% It is an essential
tool of financial analysis for shortDterm plannin!%
,( Since a cash flo statement is based on the cash basis of accountin!, it is very useful in
the evaluation of cash position of a firm%
-( A Series of intraDfirm and interD firm cash flo statement reveal hether the firm#s
li2uidity is improvin! or deterioratin! over a period of time and in comparison to other
firms over a !iven period of time%
<( Cash flo statement helps in plannin! the repayment of loans, replacement of fi1ed assets
and other similar lon!D term plannin! of cash% It is also si!nificant for capital bud!etin!
decisions%
"EFINITIONS:
'or the cash flo analysis of *A6C8 the folloin! terms have been used ith meanin!
specified%
CAS:B
It comprises of cash in hand, cash at ban$ and demand deposits%
CAS: E5UI9A6E*)SB
)hese are shortDterm hi!hly li2uid investments that are readily converted into cash
hich are subject to insi!nificant ris$ of chan!es of values%
8>E+A)I*4 AC)I9I)IESB
)hese are principal revenue producin! activities of the enterprise and other activities
that are not investin! or financin! activities%
I*9ES)I*4 AC)I9I)IESB
)hese are ac2uisition of lon!D term assets and other investment not included in cash
e2uivalent%
MBA
FINANCING ACTIVITIES:
)hese are activities that result in chan!es in siFe and composition of oner#s capital
&includin! preference share capital in case of a company( and borroin! of an enterprise%
I9 CASH AN" CASH E:UIVALENT:
Cash e2uivalent are held for the purpose of meetin! shortD term cash commitment rather
than for investment purpose% 'or an investment to 2uality as a cash e2uivalent it must be
readily convertible to a $non amount of cash therefore, an investment normally 2uality as a
cash e2uivalent only hen it has a short maturity of say, < months or less from the date of
ac2uisition% Investments in shares are in substance cash e2uivalents% E%!% in case of preference
share ac2uired ithin a short period of maturity and ith specified redemptions date%
Ban$ borroin!s are considered to be financin! activities hoever ban$ overdrafts hich
are repayable cash mana!ement% In theses cases ban$ overdrafts are included as cash
e2uivalent% Cash flos e1clude movement beteen items that constitute cash or cash
e2uivalent because these components are the parts of the cash mana!ement of the enterprise
rather than part of its operatin!, investin! and financin! activities% Cash mana!ement includes
investment of e1cess cash in cash e2uivalents%

II9 OPERATING ACTIVITIES:
)he amount of cash flos arisin! from operatin! activities is a $ey indicator of the e1tent
to hich the operations capability cash to repay loans, maintain the operatin! capability
enterprise, pay dividends and ma$e ne investment ithout recourse to e1ternal sources of
financin!%
Cash flos from operatin! activity are primarily derived from principal revenue
producin! activities of the firms% )herefore, they !enerally result from the transaction and
other events that are ta$en into account for the determination of net profit or loss%
E1amples of cash flo from operation activities areB
,% Cash receipts from sale of !oods and renderin! of services%
-% Cash receipts from royalties, fees, commissions and other revenues%
<% Cash payment to suppliers of !oods and services%
/% Cash payment to and on behalf of the employees%
.% Cash payments or refunds of Income )a1 unless they are specifically identified ith
financin! and investin! activities%
=% Cash receipts and payments from contracts held for dealin! and tradin! purposes%
Some transactions such as sale of a part of land may !ive rise to a !ain or loss hich
is included in determination of net profit or loss% :oever, cash flos relatin! to such
transactions are cash flos investin! activities% An enterprise may hold securities and loans
for dealin! or tradin! purposes in hich they are similar to inventory ac2uired specifically for
asset% )herefore, cash flos arise from purchase or sale of dealin! or tradin! securities
classified as operatin! activities% Since, they relate to main revenue producin! activity of
enterprise%
III9 INVESTING ACTIVITIES:
)he separate disclosure of cash flos arisin! from investin! activity is important
because the cash flo represents the e1tent to hich e1penditures have been made for
resources intended to !enerate future income and cash flos%
E1amples of cash flos arisin! from investin! activities are B
,% Cash payments to ac2uire fi1ed assets% )hese payments include those relatin! to
capitaliFed + 3 D costs and self constructed fi1ed assets%
-% Cash receipts for disposal of fi1ed assets%
MBA
<% Cash payments to ac2uire shares, arrants or debt instruments of other enterprise and
interest in joint ventures%
/% Cash receipts from disposal of shares, arrants or debt instruments of other enterprise
and interest in joint ventures%
.% Cash advances and loans made to the other party%
=% Cash receipts from repayment of loan made to other party%
?% Cash payments from future contracts, forard contracts, option contracts and sap
contracts e1cept hen contracts are held for dealin! or tradin! purpose or payments
are classified as 'inancin! Activities%
IV9 FINANCING ACTIVITIES:
)he separate disclosure of cash flos arisin! from financin! activities are important
because it is useful in predictin! claims on future cash flos by providers of loan to the
enterprise%
E1amples of cash flos from financin! Activities areB
,% Cash proceeds from issuin! shares of similar instruments%
-% Cash payments to oners to ac2uire or redeem the enterprises shares%
<% Cash payments for issuin! debentures, loans, notes, bonds and other shortDterm and
lon!Dterm borroin!s%
/% Cash payments for the amount borroed%
MBA
FUN"S FLO! STATEMENT FOR 788A68
CRs9 In C(o(&sD
So#(2&s o+ F#nd A--*i2a%ion o+ F#nd
'unds 'rom
8peration
Decrease in
Eor$in! Capital
,-,?%?,
,/%0.
Increase in 'i1ed Asset 3 Capital Eor$ in
>ro!ress
Increase in Investment
Dividend >aid
Decrease in Borroin!
,-.%.C
DDDD
/<=%,-
=?0%0.
67B69?E 67B69?E
STATEMENT OF CHANGES IN !ORIING CAPITAL
Rs9 in C(o(&sD
Pa(%i2#*a(s 788<
CRs9D
788B
CRs9D
E++&2% on !o(kin.
Ca-i%a*
In2(&as& "&2(&as&
Current AssetsB
Inventories
Sundry Debtor
Cash 3 Ban$ Balance
8ther Current Assets
6oans 3 Advances
Current 6iabilityB
Sundry Creditor
8ther Current 6iability
Security Deposits
Ban$ 8verdrafts
>rovision for )a1
>rovision for leave post
retirement medical benefits
Interest 8utstandin!
Eor$in! Capital &CADC6(
*et Decrease in Eor$in!
Capital
/A0%/A
,0-%-/
CA%<=
A=%.,
---%C-
/AC%-.
,0,%A<
/C%.=
AC%A0
-?=%0=
0%/,
/A%A0
=?%</
,,%//
-/%C0
0%./
,/%0.
A%??
<%-C
.<%,/
CA%.,
0%CC
-%?A

AA89>6 688E9>8
--=%-C
-/<%,.
=,%?.
A%0C
,%C=
-<%?0
A%=0
-C<%=<
,//%=/
?<%,C
<-%CC
0%C?
-0%C-
C%,/
>?B9>< >?>9<=
<6E9A?
6<98>
<B6987
<B6987 <B6987 6E?9<= 6E?9<=
CASH FLO! STATEMENT
CFo( %h& ,&a( 788A68D
MBA
Rs9 in C(o(&sD
In+*o4 O#% +*o4
8penin! balance of cash 3
cash e2uivalent%
Cash from operation
Sale of fi1ed assets
Interest received
Income from forard contracts
4ain from e1chan!e rate
variation
/C%.=
,<AA%C/
0%0=
<0%--
0%C0
?%?=
>urchase of fi1ed assets
+edemption of debentures
>ayment of shortDterm
borroin!s
Interest 3 financin! char!es
Dividend paid
Closin! balance of cash 3
cash e2uivalent
,A?%C-
-,<%C/
/.=%,,
A.%,,
/<=%,-
CA%</
6<??9<< 6<??9<<
CALCULATION OF CASH FROM OPERATION
*et profit for the year
AddB non cash items already debited
Depreciation
Interest and financin! char!es
>rovisions
Claims@recoverable ritten of
Stores 3 spares ritten off
Deferred revenue e1penditures
6oss on sale of fi1ed assets
6essB non cash items already credited
Interest income
Income from forard contracts
4ain from e1chan!e rate variation
8peratin! profit before or$in! capital chan!es
AddB adjustments for
Inventories
)rade 3 other receivables
)rade payables
6essB Direct )a1 paid net of )DS
//.%,<
A/%.?
0%A<
0%0-
<%-A
,%,/
0%-C
68>79?E
>B>97E
-<%C=
0%C0
?%?A
<79E<
.%?.
.=%C.
.<%C=
6>>>9B=
66E9EE

6E?798<
7=B968
N&% 2ash +(o) o-&(a%ion 6B==9A<
MBA
CHA!"R # %I
R"+IN"R& ROC"((
O%"R%I"0
MBA
REFINERY PROCESS OVERVIE!
INTRO"UCTION
o *A6C8#s Alumna +efinery as set up ith the technical collaboration of Aluminium
>echiney, 'rance
o Installed Capacity
8ri!inal 0%A million M) >A
Debottlenec$in! ,%0. million M) >A
E1pansion ,%.?. million M) >A
o Commissionin!
8ri!inal ,CA? 'ebruary
Debottlenec$in! -000 7une
E1pansion -00, December
BASIC TECHNOLOGY
o >redesilication before di!estion
o Atmospheric di!estion process as bau1ite is primarily 4ibbsitic
o +emoval of coarse sand particles 3 >ostDdesilication
o Settlin! in 'lat bottom settlers
o European hi!h solid,nucleation based precipitation
o Intersta!e coolers for enhanced productivity
o Circulatin! 'luid Bed Calciners
o =Deffect bac$ard feed fallin! film type Evaporation
o Coal based Steam 4eneration >lant
o Bac$ pressure type )urbo 4enerator for coD!eneration of poer
BASIC REACTIONS
Di!estion reaction B
Al&8:(
<
P *a8: *aAl&8:(
/
Silica Dissolution B
Al
-
8
<
, -Si8
-
, -:
-
8 P =*a8: -*aAl&8:(
/
P -*a
-
Si8
recipitation reaction B
*aAl&8:(
/
Al&8:(
<
P *a8:
Carbonation reaction B
-*a8: P C8
-
*a
-
C8
<
P :
-
8
Causticisation reaction B
*a
-
C8
+8DUC) 5UA6I)I
Calcined Alumna D Metallur!ical !rade Sandy Alumna
o >hysical >roperties
BE) D =0 J A0 m
-
@!m
68I &<00D,000
o
C( D 0%. J ,%0 G
Bul$ Density D 0%C. J ,%0. )@m

<
Alpha Content D ,0 G &ma1(
4rain SiFe )ypical Ma1

D/. mic ,0G ,- G
P,-. mic ,. G
o Chemical >roperties
>
-
8
.
D 0%00- G &ma1(
*a
-
8 D 0%.0 G &ma1(
'e
-
8
<
D 0%0,. G &ma1(
Si8
-
D 0%0- G &ma1(
Qn8 D 0%000A G &ma1(
Ca8 D 0%0. G &ma1(
)i8
-
D 0%00/ G &ma1(
9
-
8
.
D 0%00- G &ma1(
;
-
8 D 0%00- G &ma1(
4a
-
8
<
D 0%0,- G &ma1(
Alumina D CA%. G &min(

6IS) 8' +AE MA)E+IA6S
o Bau1ite D 8n Captive Mines
o Caustic Soda D Imported and Indi!enous
o 6ime D 9S>@ +S)@ ;atni Area
o Eheat Bran D 6ocal 'lour Mills
o Coal D MC6 )alchet, IB 9alley
o 'uel 8il &:'8 @ 6D8( D I8C6 @ :>C6
o Cytec D Cytec, Australia
o C4M D 8ndeo *alco Chemicals, ;ol$ota
o Alclar ==, D CIBA Speciality Chemicals
BAUMI)E :A*D6I*4 A+EAB
o +8M &+unDoff Mines( Bau1ite, primary crushin! done at Mines to d
A0
O,.0 mm
o +eceived at An!le Station for &i( Stac$in! or &ii( Direct feedin!
o Stac$in! of Bau1ite done by a Stac$er in any of the / piles%
MBA
o >ile capacity D ,,=.,000 M) each
o Buc$et heel +eclaimers
o )o lines of +eclaimin! 8ld D ?00 )@:r
*e D ,000 )@:r
o Screenin! and secondary Crushin! to d
A0
O<0 mm
o / day Silos D --00 M) capacity each
4+I*DI*4B
o )otal / Ball Mills < old and , *e
o 8ld Mills
8ri!inal desi!n *e Eor$in! condition
Capacity ,.. )>: -0? )>:
D=< mic, G U A0 U ?A
Bond Inde1 ,-%< ?%<0
;E ,=00 ;E
Ball 6oad ,-0 M)
o *e Mill
Capacity --. )>:
D=< mic, G U ?A
;E -000 ;E
Ball 6oad ,-0 M)
o Eet 4rindin! ith S6 at feed end @ dischar!e end
o Speed D ,/%?< rpm &?-G of critical speed(
o :ydocyclone D < cyclones per cluster
o 8utput slurry to predesilication
>+EDDESI6ICA)I8*
o Silica dissolves in heatin! tan$, mechanically a!itated
o Direct Steam injection
o / predesilication tan$s per stream, mechanically a!itated
o Slurry transfer by 9'D pumps ith level control
o +esidence time of = J A :rs, C< G silica removed
o Injection of 4reen li2uor at outlet of predesilication
o Dilution for :ydrocyclone B Classification and raisin! of concentration &*a
-
8( for
di!estion
o 8utput B :@c underflo to Ball Mill and 8verflo to di!estion%
DI4ES)I8*B
o = nos of tan$s per stream, . or$in! and one standby, mechanically a!itated
o 'irst / tan$s ith steam heatin! coil for indirect heatin!
o )emperature control in -
nd
@ <
rd
tan$ in operation ith to steam c@v and flo meters
&,0. J ,0?
o
C (
o Condensate collected and returned to boiler house ensurin! 2uality ie conductivity
o Slurry transfer from tan$ to tan$ by !ravity flo and plun!er system%
MBA
o 'rom last operatin! tan$ slurry pumpin! to sand separation by hydraulic couplin!
pump%
o 8nline +> measurement at the outlet of di!esters%
o Every - hour +> analysis at lab for control of 46 flo@ Bau1ite
o Secondary 46 addition in ,
st
di!ester
o )ar!et +> B ,%,
o Steam J = ata in Stream II and C ata in Stream I and III
S$*' S-P$R$%)O* & .$S/)*G0
o . cyclones for separation of sand@stream, / or$in! and , standby
o Sand is coarse undi!ested Bau1ite
o Sand ashin! in < sta!es in Cyclone system and counter current flo
o Sand ash usin! +M> ater or Sodic Condensate
o 'inal ashed sand &<
rd
sta!e u@f( to mud disposal tan$ and ,
st
sta!e o@f to dilution tan$
DI6U)I8*B
o Dilution is to reduce the soda concentration from ,A< !pl to ,=? !pl%
o +eduction in concentration to facilitate desilication in post desilication%
o Dilution by a part of E
,
o@f
o Slurry transfer to post desilication by :ydraulic couplin! pumps
>8S) DESI6ICA)I8*B
o . mechanically a!itated tan$s, <D/ or$in!, -D, stand by
o :eatin! arran!ement in ,
st
or -
nd
tan$s
o )emperature ,0.
o
C
o Steam Condensate collected and Send to >oer plant ensurin! 2uality
o +esidence time =DA hrs
o >ost desilicated slurry to settlers
SE))6I*4B
o ? nos 'lat Botom Settlers
o /0 m dia and =%-.m hei!ht
o - nos operatin! in each stream and one standby for all three streams
o 'itted ith ra$e mechanism for outard pushin! the mud
o Sin!le point mud evacuation
o 'itted ith ra$e drive system & < drives(
o )or2ue ratin! -,0-,.00 ;!m
o Collection of S8' by !ravity in S8' tan$
o Solid !pl in 8@' J , !pl ma1
o Sellter U@f solid !pl D .00 J =00 !pl
o Settlin! aid D 'locculant Cytec :MD/0, or /00
o 'locculant concentration D 0%- G solution
o Settler 8@' to ;elly 'ilter feed tan$ ith :ydraulic couplin! pumps
MBA
o Settler u@f to ,
st
asher ith 9'D pumps
o Motorised s@v and dischar!e v@v for S8' pumps and SU' pumps
M&' .$S/)*G0
o = sta!es of ashin! before ))D in each stream, hydro mi1er in each stream
o +a$e mechanism li$e settler, - drive system, tor2ue ratin! =0000 $!m
o Counter current ashin!
o Mud ash ater at ))D :ydro mi1er
o ,
st
asher o@f to Dilution &primary( after sand separation
o Dilution &secondary( at S8' tan$
o 'locculantD Bran, facilities of :MD/0, in E
,
only%
o U@f pumps are havin! 9'D
o 8verflo pumps are havin! 9'D or :ydraulic couplin!s
o U@f of =
th
ashers of streamD I@II to mud disposal tan$ of stream ,@II
o Mud alon! ith sand of stream I and II from mud disposal tan$ to mud disposal tan$ of
stream III
o =
th
asher mud of stream III to mud disposal tan$ of stream III%
o <

streams mud and sand slurry fed to ))D
o ))D )hic$ener J -0m dia 1 -0 m hei!ht &appro1(, conic bottom, cylindrical hei!ht A m
&appro1(
o Cone bottom, mud dischar!e ith 9'D pumps from compaction Fone%
o Mud supply to 4eho pump suction
o 4eho pump D A- ;! @ ?A ;! dischar!e, -=/ J <,- m
<
@ hr
.- J .A G solid dischar!e to +M> throu!h =%/ $m pipin!%
o 'locculant D >oder flocculent & Alclar ==,@==-( prepared ith sodic condensate
J 0%- G solution%
'68CCU6A)I8* 3 CAUS)ICISA)I8*
o 'locculants D Cytec :M /0,, Eheat Bran , Alclar ==,
Cytec :M /0, D In Settler and asherD,
>reparation Unit, stora!e of -G solution, dosin! of
0%- G solution
Bran D In Eashers
>reparation ith E
,
8@f, screenin!, storin!,dosin!
Alclar ==, D >reparation usin! Sodic condensate@ ))D o@f @

)reated ater , stora!e of -G solution, dosin! of
0%-G solution
o Causticisation
E
<
8@' or E
/
8@'
)o >:E for raisin! the temperature
Bac$ to ,
st
causticiser
/ tan$s per stream &no causticisation in stream III(
Direct steam heatin!
6ime slurry dosin! in ,

st
causticiser
MBA
)emperature C=
o
C, +esidence time /. minutes J , hour
Slurry flo by !ravity to settler
Causticised mud to .
th
asher
Causticised settler 8@f to E

<
or E
-
MBA
SECU+I)I 'I6)+A)I8*B
o Settler 8@f input to filter feed tan$
o 6ime slurry or filter aid addition in filter feed tan$
o Individual ;elly filter feed ith 9'D pump ith flo @ pressure control
o = filters per stream
o 'iltration area /00 m
-
, -, leaves
o >olypropylene cloth, stitched to ba!s for fittin! into frame
o 'iltration cycle J A hrs &appro1(
o 'ilter ashin! ith +M> ater
o )urbid li2uor to settler
o Dump mud to .
th
asher
o 'iltrate 2uality J solid less than <0 m!pl
o 'iltrate to aluminate li2uor tan$
o Aluminate li2uor pumps J :ydraulic pump
o < Aluminate li2uor tan$ havin! facility to bypass one or to tan$s
o Stora!e facility for lime and as ater
o Individual lime dosin! facility is not put into re!ular operation due to too many
problems%
P,$%- /-$% -1+/$*G-R0
o Aluminate li2uor temperature J ,00
o
C &appro1(
o :eat recovery by E
<
8@f, spent li2uor and coolin! ater if re2uired%
o )ar!et coolin! is dependant on precipitation head temperature desired hich is fi1ed
observin! nucleation%
o *e&,%A<( is *umber of particles of ,%A< micron siFe in one !ram
o )emperature tar!et increases ith rise in nucleation
o 'or stream I and IID < lines of >:E, - lines in operation and , standby
o 'or stream III J - lines of >:E, , line in operation, , stand by
o Each lineD . batteries of >:E
o ,
st
>:ED heat e1chan!e beteen Aluminate and E
<
8@f
o -
nd
D/
th
>:E J heat e1chan!e beteen Aluminate li2uor and S6
o .
th
>:E J heat e1chan!e beteen Aluminate li2uor and E
<
o@f
o By pass facility of E
<
8@' and S6
o 'or heatin! up E
<
8@' one separate >:E &Causticisation >:E(for heat e1chan!e ith
Steam%
o C4M dosin! to Aluminate li2uor at the outlet of >:E
o C4M D -
nd
tool to control nucleation%
o 9ariation of precipitation :ead temperature and C4M dosin! are the controllin!
parameters for nucleation%
o C4M helps in a!!lomeration and cleanin! the hydrate surface%
MBA
SEEDI*4 A*D :ID+A)E 'I6)+A)I8*R
o Seedin! in Seed tan$ D Aluminate li2uor and hydrate from seed filter%
o Seed ratio C%A
o Seed slurry to ,
st
precipitator ith hydraulic couplin! pump%
o 'eed to seed filters from last but one precipitator by !ravity flo%
o Seed filters are rotary vacuum disc filters%
o 6i2uor filtrate, Spent li2uor to S6 &unpolished( )an$
o . seed filters per stream in Stream I and IIJ,,/ m
-
filtration area B < discs & ori!inal /
filters and , added in the Debottlenec$in!(
o / seed filters of hi!her capacity in stream IIID,-0 m
-
filtration area B < discs
o - seed slurry pumps in each stream and < seed slurry pumps for DB filters of stream I
and II%
o 'ilter 8@f slurry to 8@f tan$ and recyclin! to precipitator
o Each filter is associated ith one vacuum pump and one bloer%
o 'iltration rate J <%0 m
<
@m
-
@hr &4'( R /%0 m
<
@m
-
@hr&D8( and /%.m
<
@m
-
@hr &Bo$ela(
o 'ilter cloth J *onDoven polypropylene cloth
S6 >86IS:I*4B
o Unpolished S6 D < to / !pl solid
o Solid separation by cyclone
o ? cluster of cyclones in each stream, . operatin! and - standby
o Each cluster ,- cyclones
o Cyclone 8@f J 0%. !pl solid
o Cyclone 8@' to polished spent li2uor tan$
o S6 to >:E from polished S6 tan$
o Cyclone U@f to 8@f and draina!e tan$ and recycled to last but one precipitator by 8@'
and draina!e pump%
>+ECI>I)A)I8* 3 I*)E+ S)A4E C886I*4B
o ,= nos of precipitator in each stream, ,/ nos or$in! and - standby
o ,/ m dia 1 <0 mtr hei!ht , Mechanically a!itated
o 'lo by !ravity ith plun!er and launder !ate arran!ement
o 'rom last precipitator slurry is recycled to last but one precipitator%
o 'or production @ dral of hydrate slurry to production side J part of slurry from last
but to precipitator%
o 'or recirculation of precipitated slurry, draina!e pump facility is available%
o Same draina!e pump is used for emptyin! out precipitators%
o . nos of Inter state coolers in each stream, / or$in!, , standby
o coolers are associated ith .
th
to C
th
precipitator%
o ,@<
rd
of total slurry is cooled in each sta!e, ith a temperature drop of =D A
o
C%
o Coolin! media is coolin! ater
o 8verall impact on end temperature of precipitator to .- J ./
o
C%
MBA
o Intersta!e coolin! is to enhance productivity%
:ID+A)E C6ASSI'ICA)I8*B
o Slurry dran from last but to precipitator
o 'eed dilution ith spent li2uor
o 'eed pump J 9'D drive for cyclone feed pressure control and feed density control
o 'acilities for to sta!e classification in each stream for fine !ranulometry situation
o *ormal classification ith ,
st
sta!e only
o ,
st
sta!e cyclone J , cluster ith A0 nos of cyclones%
o -
nd
sta!e cyclone J , cluster ith /0 nos of cyclones
o U@f dilution ith spent li2uor
o Durin! to sta!e operation, u@f dilution is more for controllin! feed density of -
nd
sta!e%
o 8@f is recycled bac$ to last but one precuipitator, directly by !ravity
o 8@f of -
nd
sta!e recycled bac$ to last but one precipitator via 8@f and draina!e tan$%
o Classification is to ta$e coarser hydrate to product side
o U@f of classification to classifier u@f tan$%
,
S)
S)A4E >+8DUC) 'I6)+A)I8*B
o Classified hydrate slurry is filtered to !et ,
st
sta!e product hydrate
o - disc, rotary vacuum disc filters are used for filtration
o 8ne filter per stream
o Each filter is able to handle sli!htly less than - streams slurry
o Eash filtrate of -
nd
sta!e filtration is used for re pulpin! ,
st
sta!e hydrate
o 'iltrate from ,
st
sta!e product filter !et mi1ed ith spent li2uor%
o 'ilter o@f to classified slurry u@f tan$
o 'iltration area is ?= m
-
@ A0 m
-

o +e pulped slurry is fed to -
nd
sta!e filtration unit%
-
nd
S)A4E 'I6)+A)I8* U*I)
o 'iltration of ,
st
sta!e product slurry, ashin! of hydrate to !et product hydrate for
storin! or Calcination%
o +otary vacuum drum filters are used%
o / nos of drum filter, each associated ith vacuum pump, bloer , feed pump and
conveyin! system%
o *ormally < in operation and , standby%
o 'ilter -- D CalD A or stora!e
o 'ilter -< D CalD A or B or stora!e
o 'ilter -/ D CalD B or C or stora!e
o 'ilter ?,< &-.( D CalD C or stora!e
o :ydrate ashin! by hot sodic condensate
o Main filtrate is $non as -
nd
sta!e filtrate
o 'iltrate !enerated durin! ashin! and dryin! is $non as ash filtrate%
MBA
o Eash filtrate is used for reDpulpin! ,
st
sta!e product%
o :ydrate produced ill have moisture less than AG &ma1( and *a
-
8
&s(
less than 0%0< G%
S)ABI6ISA)I8* 6I5U8+ CIC68*EB
o -
nd
sta!e filtrate is havin! -D< !pl soild%
o Solid separation by cyclones%
o 8ne cluster of -0 cyclones%
o Cyclones u@f to filter feed tan$%
o Cyclones o@f is havin! less than 0%. !pl solid%
o )his is $non as stabiliFation li2uor % this is rich in impurities &o1alate(%
o StabiliFation li2uor to E< o@f receptacle , hich is used for causticisation%
:ID+A)E S)8+A4E A*D MIMI*4B
o :ydrate stora!e for storin! hydrate durin! annual S@D of Calciners or any problem
ith calciners%
o Sale of hydrate is from stored hydrate %
o Stora!e capacity is <.,000 M) as Al
-
8
<
each%
o +eclaimin! facility by pay loader and mi1in! in a a!itated tan$ ith ash filtrate%
o :ydrate slurry to -
nd
sta!e filtration unit for usin! after filtration at calciners%
o - stora!e and - nos of mi1in! line is provided%
CA6CI*A)I8*B
o calcination is to remove all moistures associated ith hydrate and to !et product
suitable for smeltin!%
o +emoval of surface moisture 3 bound moisture%
o Calcinations to maintain 68I, BE) and DAlumina %
o Calcinations temperatures C.0D,000 de! C
o 'luidiFed bed static calciner
o Supplied by M@s 6ur!i, 4MB:%
o 8ri!inal - calciners J,/00 M)>D
o Debottlenec$in! Jup!radation to ,?00 M)>D
o E1pansion J, no% -000 M)>D
o 'uel Jheavy fuel oil
o Ener!y efficient J?<. ;cal@;!, reduction of .G , ith >)S at full capacity%
J=C. ;cal@;! for ne calciners%
o Major component JBloers, 'eed scre, ES> Scre Conveyor, ES>, 'urnace,
Material feed cyclone, +ecyclin! cyclone, Seal
pot, Coolin! Cyclone, 'luid Bed cooler, Air slide,
Air lift, Conveyin! Cyclone, >A Coils, Bubble
caps etc%
A6UMI*A :A*D6I*4 SIS)EMB
o +eceivin! fresh alumna from Calciners, Conveyin!, Storin! in Silos, 6oadin! Ea!ons,
Ba!!in!%
o - main conveyors D -=0 )>: Capacity
MBA
o Air Slides for fillin! alumna silos%
o < silos, ,-000 M) capacity each%
o Diversion facilities for ba!!in! plant hopper%
o 'luidiFation facilities for silo%
o Automatic spottin! 3 loadin! of specially desi!ned a!ons%
o ,< ra$es of B)A> a!ons, /A a!ons in each ra$e on run%
o All a!ons are captive%
CAUS)IC S8DA :A*D6I*4 3 S)8+A4EB
o >rocurement of indi!enous 3 imported both%
o +eceipt of caustic soda lye &min% /?G *a8:(%
o +eceipt of tan$ers from nearby suppliers, unloadin! by !ravity to stora!e tan$%
o )ransportation from 9iFa! by < -A *o%s captive a!ons%
o Unloadin! facilityD by vacuum system and siphonin! from top of a!ons%
o )ransfer from unloadin! station to stora!e tan$ by pumps%
o < *o%s stora!e tan$s -, m dia ,/ m hei!ht, capacity <000 M) *a8: &,00G( appro1%
o Caustic transfer pumps for different points &0A@0.@0=@0?@0C(%
o 'uel oil handlin! 3 stora!e%
o Supplier I8C6, :>C6%
o *ormally from 9iFa!%
o )ransportation by +ailay a!on 3 *alco#s captive a!on &-A nos(%
o Unloadin! facility J ith bottom unloadin!
o Unloadin! header J transportation to stora!e by multiple units%
o < nos of stora!e tan$s J - *os old tan$ ,/ m dia ,/ m ht , -000;6 Cap
J, no% ne t$%, -/ m dia ,/ m hei!ht , =000;6%
o 8il transfer to S>> 3 Calcination day tan$s by pump
6IME :A*D6I*4 3 S)8+A4E A*D S6A;I*4B
o )ruc$ unloadin! station available%
o +eceipt of lime in .0 ;! ba!s%
o *o facility for a!on unloadin!%
o Alumna ba!!in! plant and cement !odons are used for lime ba! stoc$yard for a!on
unloadin!%
o )ransportation by truc$ to unloadin! station%
o 6ime bun$ers, conveyors for feedin! to crushers and buc$et elevators for fillin! to silos
throu!h a shuttle conveyor%
o - silos of ,000 ) capacity each%
o 6ime dral from silo bottom throu!h table feeder to slac$er%
o Sla$in! J formation of Ca&8:(
-
, Sla$er capacity A )>:%
o +a$e classifier at the outlet of sla$ers%
o Sla$ed lime slurry stora!e tan$ 3 transfer to mini 0/ 3 0. area by pumps%
MBA
o Density of lime slurry is measured online%
8MA6A)E +EM89A6 U*I)B
o 81alate is separated out from !reen li2uor%
o 4reen li2uor coolin! in >:E 3 coolin! ater%
o 6ime dran form silo of lime handlin! unit crushed and added to cold !reen li2uor%
o 81alate !et precipitated on the surface of lime%
o 81alate mud is separated in &AMA 'ilter(%
o DeDo1alated li2uor is heated up ith heat of incomin! 46%
o :ot deDo1alated li2uor to evaporation%
E9A>8+A)I8*B
o Evaporation of spent li2uor to !et concentrated !reen li2uor re2uired for di!estion%
o = nos of batteries, each ith = effects%
o All are bac$ard flo, fallin! film type evaporators%
o 'acilities to bypass any one of first < effects%
o S6 fed in the .
th
3 =
th
effect%
o Steam in ,
st
or ,
st
and -
nd
effect or -
nd
effect%
o >ossible combination
D = effects = bodies
D . effects = bodies
D . effects . bodies
o )o ta$e advanta!e of steam economy@ capacity and maintenance re2uirement%
o Capacity @ Economy
D ,<., <%-.
D ,?., <%,.
D ,.., -%C.
o ,
st
effect condensate J pure steam condensate
o -
nd
effect condensate J9apour condensate Capacity J ,0@?mic
o .
th
effect condensate Jsodic condensate
o 9acuum by steam ejector%
o / S6 tan$s, / 46 tan$s for stora!e &- nos for Stream I@II and - nos for Stream III(
o - nos Sodic condensate tan$%
o , no mud ash ater tan$ and , no Eash ater tan$%
o 'acilities for transfer of S6@ 46 from StreamDI@II to streamDIII or vice versa%
o S6 pumps for each battery feed, each Ball Mill&one standby in streamDIII(
o >rimary 46 pumps < nos for Stream JI@II and - nos for Stream JIII%
o Secondary 46 pumps < nos for Stream J I@II and - nos for StreamDIII%
o - nos Sodic Condensate >ump%&, operatin! P , standby( for Drum filter%
o - nos Sodic Condensate >ump&Sand separation, 6ime sla$in!, C)D,( J, EP, SB
o - nos Sodic Condensate >ump&Cytec, Seed 'ilters, C)D/, C)D-(J,EP , SB%
o < *o%s mud ash ater >ump to supply mud ash ater to ))D &- EP , SB(%
MBA
o Concentrated :
-
S8
/
tan$, dilute tan$, transfer pump for acid cleanin! of evaporators%
C8M>+ESS8+ 3 C886I*4 )8EE+B
o / nos of ;4 ;hosla Compressor J..*m
<
@min cap%
o -nos of Atlas Copco Scre Compressor JA0 *m
<
@min cap%
o -nos of E66I8) Centrifu!al Compressor J A0 *m
<
@min cap%
o -nos old air driers of <0 *m
<
@min capacity &air pur!e type( J for instrumentation air%
o ,no% old air drier of ,. *m
<
@min capacity &air pur!e type( for dry process air%
o ,no% of rotary air drier associated ith Atlas Copco for instrument air of A0 *m
<
@min
cap%
o , no% Sahara drier &air pur!e type ( A0 *m
<
@min cap% 'or instrument air associated ith
centrifu!al Compressor%
o >lant Air, Instrument air &D /0
0
C (, Dry >rocess Air&D.
0
C(
o C)D, J / cells --00 m
<
@h D for = batteries%
o C)D- J < cells -000 m
<
@h &- EP , SB( J for compressors, hydraulic Couplin!
pumps and Air conditioners%
o C)D/ J . cells ,/00 m
<
@h &- nos for ISC , - for 9acuum >umps, Bloers,
>:Es and one common stdDby(%
EAS)E EA)E+ )+EA)ME*) >6A*)B
o Al$ali Effluent >ond &'rom all process areas(%
o Acid Easte Eater )reatment >lant&acid aste from 0=@0A, 6aboratory Easte, Coolin!
toer blo don(%
o Sanitary Easte ater )reatment >lant%
o 8ily Easte ater )reatment >lant&not operated since inception(
o Environmental clearance J Ash >ond overflo ,00 m
<
@h%
o >resently acid aste ater @ sanitary aste ater to al$ali pond via !uard pond and
recycled bac$ to mud ashin! circuit%
+ED MUD >8*DB
o :aFardous Eater as per earlier rules, Caustic Soda >resence%
o E1pected life upto -0,- ith ))D dischar!e%
o Eater reclamation facility%
o Dam :ei!ht J C/. m , >resent ater level C/-%A m
o 'ree board level permitted C/<%. m%
S)EAM 3 >8EE+ >6A*)B
o CoD!eneration
o / Boilers , -00 )>: capacity, =A ata & <EP, SB(%
o < )4s , ,A%. ME Capacity, , no% dump condenser &,-0 )>:(
o , Coolin! toer%
o DM plant < C0 m
<
@h Capacity
o Coal :andlin! >lant
o Ash Disposal System
o Ash >ond
MBA
o Supply steam to >rocess J C ata 3 = ata, ,A0 J ,-0
0
C
Lo2a%ion E a%a
P&( T
A a%a
P&( T
P&( h(9 +o( no()a*
*oad C6A> TPHD
R&)a(ks
>redesilication ,A< ;! D <.%=A. )>:
797=>
T0T
Di!estion /./ ;! /== ;! C0%0C0 )>:
>ost desilication ,./ ;! ,0= ;! -0%./0 )>:
Evaporation ,,/, ;! D ---%/C. )>:
Causticisation D -,0 ;! /0%C.0 )>:
>recipitation Cleanin! D =C ;! ,<%/.. )>:
CC6 D <A ;! ?%/,0 )>:
Misc% P 6oss D ?? ;! ,.%0,. )>:
)otal /,.%=/ )>:
This &$2*#d&s d#)-&d s%&a) and in%&(na* 2ons#)-%ion a% SPP9
LOCATION 788=8A 788A68C%i** S&-%9D
T0T TPH T0T TPH
Evapoartion ,%<0/ -/.%-/. ,%</- -/A%?C?
>redesilication 0%-,= /0%=<- 0%-,= /0%0/.
Di!estion 0%<./ ==%.?? 0%<?0 =A%.C.
>ost desilication 0%,</ -.%-0- 0%,.C -C%/??
Steam throu!h ,0. &Causticisation , CC6( 0%0?0 ,<%,=. 0%0?, ,<%,=<
Steam throu!h ,,0 &Causticisation >:E ,
>recipitation(
0%0C. ,?%A== 0%0C/ ,?%/-?
)otal Accounted -%,C/ /0A%=?A -%-.- /,?%.0/
Dumped steam 0%0<0 .%=/- 0%,,, -0%.?C
S>> internal 0%<?0 =C%.A? 0%<?< =C%,.,
Unaccounted 0%-C, ./%?-C 0%<00 ..%=,A
To%a* 79=E< >B=9EBE B98B> >E79=>7
ENERGY CONSUMPTION IN ALUMINA PLANT:
'or :ydrate Circuit, desi!n >oer consumption is ,AA ;E:@)
As per M8U, )otal >oer Consumption is <.. ;E:@)
Actual fi!ures achieved for -00AD0C and -00CD,0 &)ill September( is !iven
here belo%
Y&a(0A(&a
788=8A 788A68 CTi** S&-%D
M! I!H0T M! I!H0T
H,d(a%& Ci(2#i% B798< 6=?9>< B89<> 6=89=?
Ca*2in&( Ci(2#i% <9>E 7E9A= <9<? 7E9?>
SPP 6<96> =79AB 6<9>? =E9>E
MBA
U%i*i%i&sCIn2*#din.
To4nshi-D
?9=B <>9=7 A98= >B9AB
TOTAL >=9>= B<B97? >=9>? B<=966
CHA!"R #%II
CONCL$(ION 1 ($MMAR& 2
($''"(!ION(
MBA
CONCLUSION
)he company re!istered a hi!hly satisfactory performance durin! the year as
ell as durin! the last year under revie% )he project is done based on the annual
reports of -00AD0C, -00CD,0 and the unaudited partial data of profit 3 loss account
and balance sheet of -0,0D,,, because so far the annual report of -0,0D,, is not yet
published% )he demand and price scenario in the international mar$et for aluminium
and alumina is hi!hly volatile% )he company is re!istered ith the 6ondon Metal
E1chan!e &6ME(% *A6C8 bein! the first company in India ho has decided to lin$
its domestic prices of aluminium and alumina to that of 6ME prices since
*ovember@December ,CC/% )his has facilitated better avera!e realiFation per tonne
besides helped in reducin! inventory carryin! costs%
*A6C8 has also closed the financial year -0,0D,, ith a record sales
turnover of +s% //<C%CC Crores, re!isterin! an increase of <-%/CG over the previous
year% As per the unaudited statement of accounts ta$en as record by Board of
Directors the >rofit Before )a1 &>B)( has increased by ??G in -0,0D,,% )he net
profit turnover has been +s% ,-</%A/ Crores after providin! +s% =<.%/< crore for ta1
compared to the net profit of +s% ?<?%</ Crores in the previous year% )he company has
achieved a si!nificant reduction in its interest burden from +s% ,0<%/, Crores in -00CD
,0 to +s% =0%=, Crores in -0,0D,, due to substantial repayment of overseas loans% It is
noteorthy that the company has succeeded in prepayin! +s% =-?%=/ Crores overseas
loan beteen March#0/ to March#0.% )he boo$ value per share has also improved to
+s% ?-%C, from +s% .A%<, in the previous year, hile the Earnin! per share &E>S( has
been +s% ,C%,?% 8n the e1port front the company has boosted an all time record
MBA
earnin! of +s% --00%-. crore compared to +s% ,?,?%-? crore in the previous year
hich is /CG of the total turnover%
8n the production, *A6C8 has achieved remar$able success by e1ceedin! all
the annual tar!ets% At mines the company e1ceeded its rated capacity of /A la$h
tonnes ith record production of /A%., la$h tonnes of Bau1ite beatin! the previous
best of /A%,= la$h tonnes achieved in -00CD,0% Alumina production at the refinery has
record crossin! the rated capacity of ,.%?. la$h tonnes hereas ,.%.0 la$h tonnes
could be produced last year% )his year it has !one up to ,.%== la$h tonnes% Also the
,.%?.. la$h tonne aluminium production at the smelter plant this year is on all time
hi!h achievement re!isterin! an increase of ,G over the previous year% At the Captive
>oer >lant &C>>( a net !eneration of .=,< million units of poer has surpassed the
previous best of .,-- million units achieved last year%
MBA
CHA!"R #%III
$**-1&R-
MBA
BIBLIOGRAPHY
Sharma and 4upta, Mana!ement Accountin!, ;alyani >ublisher%
>andey%I%M, 'inancial Mana!ement, 9i$as >ublishin!%
;ahn%M%I and 7ain%>%;, 'inancial Mana!ement, )ata Mc4ra%
:I66 >ublishin!%
httpB@@%*alcoDindia%com%
httpB@@%!oo!le%com%
-<
rd
and -/
th
Annual report of *alco%
MBA
PROFIT AN" LOSS ACCOUNT
C+o( %h& ,&a( &nd&d Ma(2h B65 786BD
CRs9 In C(o(&sD
Pa(%i2#*a(s Pa(%i2#*a(s
To Ra4 )a%&(ia*
2ons#)&d
To Po4&( and +#&*
To R&-ai( and
Main%&nan2&
To O%h&( Man#+a2%#(in.
E$-&ns&s
To E)-*o,&&
R&)#n&(a%ion B&n&+i%s
To G(oss P(o+i% 20d
<8=9A7

E<79EB
6EE9<?

A>967

7>=9<7
6>>=98
B66<9B?
>9A?
A9E>
B67A9AA B67A9AA
To Ad)inis%(a%i'&
E$-&ns&s
To O%h&( E$-&ns&s
To S&**in. 3 "is%(i1#%ion
E$-&ns&s
To "&-(&2ia%ion
To "&+&((&d R&'&n#&
E$-&ndi%#(&
To N&% P(o+i% 20d
CEBITD
E?9>8

6<968
?696<
<<>96B
696<
66>E96?
B, G(oss P(o+i% 10d
B, O%h&( In2o)&
B, O*d P(o'ision
L&ss N&4
P(o'ision
79E>
89?8
6>>=9
6?>>96= 6?>>96=
Ea(nin. B&+o(& In%&(&s% 3 Ta$&s CEBITD
L&ss In%&(&s%
P(o+i% B&+o(& Ta$ CPBTD
L&ss Ta$
P(o+i% A+%&( Ta$ CPATD
CP(o+i% a'ai*a1*& %o EK#i%, Sha(& Ho*d&(sD
66>E96?
68B9<6
68>79?8
B6>9BA
?B?9B?
Add P(&'io#s ,&a( -(o+i% 1(o#.h% +o(4a(d
Add P(o+i% %(ans+&((&d %o Ca-i%a* R&s&('& 1(o#.h% 1a2k
Add P(o+i% %(ans+&((&d %o "&1&n%#(& R&d&)-%ion F#nd 1(o#.h%
1a2k
?B?9B?
B96>
898>
68E9A?
MBA
A)o#n% a'ai*a1*& +o( a--(o-(ia%ions
L&ss A--(o-(ia%ions:
P(o-os&d Fina* "i'id&nd
Ta$ on "i'id&nd
T(ans+&( %o G&n&(a* R&s&('&
P(o+i% T(ans+&( %o Ba*an2& Sh&&%
=<?9><
7>?9?7
BB987
>>8988
E98=
Ea(nin. P&( Sha(& CEPSD C?B?9B? C(o(&s0E<5<B58A5E7= sha(&sD
CPAT0N#)1&( o+ sha(&sD
669<<
BALANCE SHEET OF NALCO
Cas on Ma(2h B65 786BD
CRs9 In C(o(&sD
Lia1i*i%, Ass&%s
Sha(&ho*d&(Hs
F#nd:
Sha(& Ca-i%a*
R&s&('& 3 S#(-*#s
Loan F#nd:
S&2#(&d F#nd
"&+&((&d Ta$
Lia1i*i%,
C#((&n% Lia1i*i%, 3
P(o'isions:
Lia1i*i%i&s
P(o'isions

><?9==
B6E9<8
E<<9B6
B6679BE
E><9BA
E8A9AA
=E<97=
Fi$&d Ass&%s:
G(oss B*o2k
L&ss "&-(&2ia%ion
N&% B*o2k
Ca-i%a* !o(k in
P(o.(&ss
In'&s%)&n%s
C#((&n% Ass&%s5
Loans 3 Ad'an2&s:
In'&n%o(i&s
S#nd(, "&1%o(
Cash 3 Bank
Ba*an2&
O%h&( C#((&n%
Ass&%s
Loans 3 Ad'an2&s
=8A79=?
<6=A9BA
<EA<9=7
788988
AA89>6
BA8B9<=
?A69B<

<=89<=
68797<
A=9BE
=E9>6
7779A7
>==>9BB >==>9BB
MBA
PROFIT AN" LOSS ACCOUNT
C+o( %h& ,&a( &nd&d Ma(2h B65 786BD
CRs9 In C(o(&sD
Pa(%i2#*a(s Pa(%i2#*a(s
To Ra4 )a%&(ia* 2ons#)&d
To Po4&( and +#&*
To R&-ai( and Man%&nan2&
To O%h&( Man#+a2%#(in.
E$-&ns&s
To E)-*o,&& R&)#n&(a%ion
B&n&+i%s
To G(oss P(o+i% 20d
<<<97<
?E89<E
6E<9B<
66B988

7=A9<7
7BAB9=<
B, G(oss Sa*&s
L&ss E$2is& "#%,
N&% Sa*&s
B, S%o2k o+ Finish&d
in%&(na**,
2ons#)&d
B, A22(&%ion %o s%o2k
<<BA9AA
B6E98B
<67B9AE
6>99A6
<6E>9B8 <6E>9B8
To Ad)inis%(a%i'& E$-&ns&s
To O%h&( E$-&ns&s
To S&**in. 3 "is%(i1#%ion
E$-&ns&s
To "&-(&2ia%ion
To O*d P(o'ision
L&ss N&4 P(o'ision
To "&+&((&d R&'&n#&
E$-&ndi%#(&
To N&% P(o+i% 20d
CEBITD
>9<A
B9B8
?A968
>?9B7
6889=>
>=97<
796A
<E698=
6=?897?
B, G(oss P(o+i% 10d
B, O%h&( In2o)& 7BAB9=<
7B>976
7E7A98> 7E7A98>
Ea(nin. B&+o(& In%&(&s% 3 Ta$&s CEBITD
L&ss In%&(&s%
P(o+i% B&+o(& Ta$ CPBTD
L&ss Ta$
CP(o+i% a'ai*a1*& %o EK#i%, Sha(& Ho*d&(sD
6=?897?

6=?897?
EB>9
76?96A
MBA
A)o#n% a'ai*a1*& +o( a--(o-(ia%ions
L&ss A--(o-(ia%ions:
In%&(i) "i'id&nd
P(o-os&d Fina* "i'id&nd
Ta$ on "i'id&nd
T(ans+&( %o G&n&(a* R&s&('&
P(o+i% T(ans+&( %o Ba*an2& Sh&&%
6<>=9==
67=9=E
67=9=E
B>9>=
66>8988
6>9>=
Ea(nin. P&( Sha(& CEPSD C67B<9=< C(o(&s0E<5<B58A5E7= sha(&sD
CPAT0N#)1&( o+ sha(&sD
6A96?
BALANCE SHEET OF NALCO
Cas on Ma(2h B65 786BD
CRs9 In C(o(&sD
Lia1i*i%, Ass&%s
Sha(&ho*d&(Hs
F#nd:
Sha(& Ca-i%a*
R&s&('& 3 S#(-*#s
Loan F#nd:
S&2#(&d F#nd
"&+&((&d Ta$
Lia1i*i%,
C#((&n% Lia1i*i%, 3
P(o'isions:
Lia1i*i%i&s
P(o'isions

E6E97>
6A896<
E<<9B6
<8>B9>8

E>79<>
=8E9BA
Fi$&d Ass&%s:
G(oss B*o2k
L&ss "&-(&2ia%ion
N&% B*o2k
Ca-i%a* !o(k in
P(o.(&ss
In'&s%)&n%s
C#((&n% Ass&%s5
Loans 3 Ad'an2&s:
In'&n%o(i&s
S#nd(, "&1%o(
Cash 3 Bank
Ba*an2&
O%h&( C#((&n%
Ass&%s
Loans 3 Ad'an2&s
=?=<9>>
<E<>9>>
<B<>9E6

6=6698<
<6BA988
78E9E6

>7A98E
A79=6
?>>976
=7986
B>69A>
E6>E9E> E6>E9E>
MBA

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SUBMITTED BY: NILAMADHAB DAS | ROLL NO: 11MBAS21540

Bul$ Density D 0%C. J ,%0. )@m

Alpha Content D ,0 G &ma1(

4rain SiFe )ypical Ma1

Qn8 D 0%000A G &ma1(

Ca8 D 0%0. G &ma1(

Alumina D CA%. G &min(

Alclar ==, D >reparation usin! Sodic condensate@ ))D o@f @

)o >:E for raisin! the temperature

/ tan$s per stream &no causticisation in stream III(

Direct steam heatin!

6ime slurry dosin! in ,

Slurry flo by !ravity to settler

Causticised settler 8@f to E

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