Bhushan Power& Steel LTD

SUMMER INTERNSHIP PROGRAM – 2009
A REPORT
ON
“Standard operating procedure of material

procurement, movement, accounting,
accounting, Auditing and
their financial implication”
implication”
SUBMITTED BY:
Nabin Kumar Shaw

PGDM
Batch 2008-10
Roll No. 30126
1
Table of contents:
Sl No Particulars
1 Executive Summary
2 Preface
3 Certificate of Authenticity
4 Acknowledgement
5 Objective
6 Introduction of the Company
6.1 Bhushan power & steel at Orissa…..
6.2 Mission, Values & Their Commitments
6.3 History of the Company
6.4 Management (Board of Director)
7 From the MD’s desk
8 Job done in M/S Bhushan Power & steel Ltd
8.1 Store Department
8.1.1 Basic documents required in Store Department
8.1.2 Process of Material Outward from the store
8.1.3 Process of unloading of a TRUCK
8.1.4 Auditing of books in stores
8.2 Purchase Department
8.2.1 Types of Purchase
8.2.2 Process of Purchase (for Maintenance)
8.2.3 Process of Purchase (for Consumables)
8.2.4 List of few Suppliers
8.2.5 List of few Materials for SMS-1
8.3 Bill Passing Department
8.3.1 Format of a Supplier’s Bill
8.3.2 Format of Inward Security Pass
8.3.3 Format of Materials Receipt Note
8.3.4 Format of Raw Materials Analysis Report
8.3.5 Format of Debit / Credit Note
8.4 Audit Department
8.4.1 Basic concept of Auditing
8.4.2 Internal Auditing
8.4.2.1 History of internal auditing
2
8.4.2.2 Independence in Internal Audit
8.4.2.3 Internal Audit and Internal Control
8.4.2.4.1 Internal Audit in corporate governance
8.4.2.4.2 Key Financial Associates
8.4.2.5 Nature of the internal audit activity
8.4.2.6 Reporting of critical findings
8.4.3 Audit in M/S Bhushan Power & Steel Ltd
8.4.3.1 Audit for Logistic Department
8.4.4 Audit report submitted to the Management
8.4.4.1 Final Audit Report for Iron Ore
8.4.4.2 Final Audit Report for Coal
8.4.5 Audit for Purchase Department
9. Financial Analysis of M/S Bhushan Power & Steel Ltd.
9.1 Significant Accounting Policies
9.2 P/L Account for the year ended 31st March 2008
9.3 Balance sheet as at 31st March 2008
9.4 Details of Schedules maintained by the company
9.5 Key Financial Indicators
9.5.1 Gross Sales
9.5.2 Export Sales
9.5.3 Net Profit
9.5.4 Cash Profit after Tax
9.5.5 Net worth
9.5.6 Debt Equity Ratio
9.5.7 Current Ratio
9.5.8 Interest Coverage Ratio
9.5.9 Debt Service Coverage Ratio
9.5.10 Earning per Share (EPS)
10 Steel Manufacturing
10.1 History of Steel Production
10.2 Raw Materials for Steel Production
10.3 Classification of Steel
10.4 Heat Treatment of Steel
10.5 Process of Steel Production
10.6 World production of Steel
11 Conclusions
12 Bibliographies
3
1. Executive Summary
This project is intended to help those people who want to study the Standard
operating procedure of material procurement, movement, accounting, Auditing and
their financial implication of M/S Bhushan power & steel ltd. In this project I have
tried to give some recommendation best of my knowledge so I have tried to cover
almost all aspect of M/S Bhushan Power & steel Ltd. In this project I am using
BPSL as the abbreviation of M/S Bhushan Power & steel Ltd.
In this project I have studied the following.
1. How under mentioned departments works:

• Store
• Purchas
• Bill passing
• Logistic
• Accounts
• Audit
2. Accounting of all the above (no. 1) mentioned departments
3. Auditing of all the above (no. 1) mentioned departments
4. Sources of earning
5. Gross sale of BPSL in different years from 2004 to 2008
6. Cash Profit of BPSL in different years from 2004 to 2008
7. Net Profit of BPSL in different years from 2004 to 2008
8. Different financial Indicator of BPSL in different years from 2004 to 2008
9. And many more
4
2. Preface
In present scenario Steel and Power is an important aspect for the development of
nation. So M/S Bhushan Power & steel Ltd is doing a great job by producing and
supplying these two resources. Secondly in this context comparative study of M/S
Bhushan Power & Steel Industry is a great opportunity for me to do as summer
training.
Summer project is one of the essential parts towards the partial fulfillment of the
requirement of two year full time PGDM programme. In this line I had an
opportunity to undergo practical training of two months in M/S Bhushan Power &
steel Ltd which is a steel manufacturing and Power generating Industry
This project was undertaken to study vital aspect of financial books of the
company with physical verification and verification of the books. This project is
divided in two parts. First I will discuss how I have studied the system of the
organization and secondly I will discuss how I have investigated and verified the
books of accounts which in other words known as Auditing.
I visited different sites of the Plant like Iron, Steel and Power sections. I visited all
the departments of the organization and also sat at the gate in order to see the
system and audited the books of accounts in order to get the practical knowledge.
5
3.
Certificate of Authenticity
This is certify that the project work was done on “Standard operating procedure
of material procurement, movement, accounting, Auditing and their financial
implication’’ submitted to Accman Institute of Management, Greater Noida is
in partial fulfillment the requirement for the award of Post Graduate diploma in
Management, is a bonafide `work carried out by me at ‘M/S Bhushan Power &
Steel Ltd’ at Jharsuguda in Orissa. I declare that the form and the content of
the above mentioned project are original and have not been submitted in part or
full, for any other degree or diploma of this or any other Organization/ Institute/
University.
Nabin Kumar Shaw Date: 4th July, 2009

PGDM 2008-10
Roll- 30126
Section- A
6
4. ACKNOWLEDGEMENT
Our prestigious organization Accman Institute of Management gave me a great
opportunity to learn and experience the corporate world. The summer training
programme was great experience for me. This project is the result of time, efforts
and knowledge contributed by various members of the Organization .I pursued my
summer training from M/S Bhushan Power & steel Ltd, a steel manufacturing and
power generating Industry and I would like to extend my sincere gratitude to
Mr. V. R. Sharma (Joint Managing Director) to give me a valuable opportunity
to work with such a renowned organization. I would like to extend my sincere
thanks to Mr. B.M Sharma (VP Commercial) and Mr. Anil Kumar Singh
(GM-Audit & Costing) for assigning me a project on ‘Standard operating
procedure of material procurement, movement, accounting, Auditing and
their financial implication’ of M/S Bhushan Power & Steel Ltd. They have been
a source of guide and motivation for the completion of project.
I would like to give credit for my successful completion of project to

Mr D. R. Sharma [Senior GM - Store]
Mr P. K. Chatterjee [AVP - Materials]
Mr V. K. Sangar [GM – Bill Passing]
Mr C. M Sharma [Bill Passing Officer]
Mr Niranjan Tripathy [Auditor]
Mr Rabindra Jena [Auditor]
Mr Venugopal Sahu [Auditor]
Mr Ranjan Soni [Purchase Officer]
Mr Jogindra Behra [Purchase Officer]
7
Who were always available for my support and important guidance. They
were source of Motivation and guidance for me.
I sincerely thank for the help provided by my institute “Accman Institute of

Management” which provided me necessary materials for completion of this
project. I am also thankful to our sincere mentor in the college to
Prof. S.C.Ghosh (Chief CRIC.)
Prof. Dinesh Singh. (Finance Professor)
Finally I am thankful to other members of my Organization and friends who

supported me a lot and without their help this project would not have been
completed.
8
5. Objective
Presently Steel and Power are two important pillars for the development of a
nation. So M/S Bhushan Power & steel Ltd is doing a great job by producing and
supplying these two resources. This study has been developed for those of you who
are keen to acquire some basic but key information about steel industry as an initial
step towards becoming a more informed individual. I hope this module will act as a
means of satisfying some of your initial queries on this industry.
9
6. Introduction of the Company
Bhushan Power & Steel Limited, a fully integrated 1.5 Million TPA
Steel making Company with turnover of INR3873 Crores (USD 950
Million) and 7 World Class ISO 9000 Certified State of the Art Plants
at Chandigarh, Derabassi, Kolkata and Orissa in India.
A leading manufacturer of flat, rounds and long products including

value added products with total steel value chain right from Coal
Mining, Billets, HR Coils, Pig Iron, CR Coils, GP/GC, Precision
Tubes, Black Pipe/GI Pipe, Cable Tapes, Tor Steel, Wire Rod and
Special Alloy Steel.
Successfully commissioned 1.5 Million TPA Greenfield Steel and

Power Plant in Orissa with HR Coil making facility
—First in Private Sector in the State of Orissa. For the Orissa plant,
technology and equipments are procured from world-renowned
companies like Lurgi from Germany, ABB Ltd., SMS Demag, Siemens
etc. Bhushan is selling its Value added range of products in Secondary
Steel through a large distribution network in India (comprising more
than 35 sales offices) and Abroad.
A rock-solid foundation combined with continuous upgradation and

innovation has ensured that we have constantly surpassed our goals.
Our end-to-end portfolio offers a wide spectrum of products with
consistently superior quality. In addition to our export thrust, we
supply to fast-growing sectors like automotive, white goods,
construction, furniture, fasteners, telecommunication, etc.
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6.1 M/S Bhushan Power & Steel Ltd at Orissa…
The integrated power and steel project at Orissa is a landmark in the

nation’s infrastructure development.
It combines our deep expertise with the best technology that the world
offers to integrate the entire steel manufacturing process – from
mining to the production of value-added products. It also generates
captive power using gases from the process.
Features
• Proposed facilities in close proximity of two bulk inputs i.e. iron ore
and coal to minimize input freight
• Already been allotted two adjoining non-coking coal blocks at
nearby Jamkhani and Bijhan in Orissa, and has got one coking coal
block at Rohne in Jharkhand, providing added logistic advantage in
mining. Allotment of iron ore mines is under process.
• Captive and inexpensive power generation using hot gases from
sponge iron kilns and unusable coal
• Operating synergy enhanced by captive coal washery that processes
locally available coal to ensure uninterrupted supplies and lower costs
• Captive limestone reduces cost further.
• Use of Iron Ore fines in making sinter, for use in blast furnace.
• With hot metal infusion into EAF, exothermic reaction gives quicker
steel production and enhances capacity without additional capex.
• Captive coke oven plant to reduce import costs
• The power consumption for EAF Steel melting reduces from around
800 units/pmt to about 400 units, providing cost efficiency.
• Large reduction in consumption of expensive consumables like
electrodes and refractories.
• With added capacities for both long and flat products, Bhushan
Power & Steel will emerge as a completely integrated, wider range
player with a long term competitive edge.
11
6.2 Mission, Values & Their Commitments:
Their Mission is to achieve clear identity and leadership globally in Steel

production and distribution by integration of complete chain of
production starting from captive iron ore to end user Steel products.
Their revolution in Steel production has helped us to carve a niche

unique only to a market leader. Every year passes by with new value
additions and more accolades from their customers - Locally and
Globally. Their rising chart in respect of all-important parameters of
production and finance is a testimony to their claim.
In pursuing their mission, we at M/S Bhushan Power & steel Ltd. are
guided by the following values :
Quality - To be the best in quality. We aim and achieve excellence.

Technology - State of the art technology and product enrichment by
continuous Research and Development.
Customer Friendly - Their products are world class and more and more
clients are appreciating and using their products. We also undertake
customized products with values addition and enhancement.
Corporate Governance - We comply with all applicable laws and
regulations. We believe in maintaining clean environment and
conservation of natural resources. We contribute towards betterment of
their staff and provide them with best of facilities.
Environment Protection and Practice - We are adopting and
implementing pollution control measures as a matter of policy.All their
efforts are in accordance with the laid down norms of Central Pollution
Control Board for Industrial and Mixed use.
Their Commitments:
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• To improve the quality of their products and complete integration
of various stages of production.
• To be conscious towards quality and pricing of their products. We
strive by continuous research and development to make their
products world class, having distinct identity and uniqueness. Their
customers get best value for their money.
• To run the company profitably year after year.
• A workforce motivated, skilled and well looked after.
• A workplace safe, secure and hygienic.
• To make their Environment Clean, Healthy and Hospitable.
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6.3 History of the Company
Growing from strength to strength
1970 - Started with very small initial outlay for manufacturing Door Hinges & later
on, Rail Track Fasteners.
1973 - Manufacturing facilities set up for Tor Steel and Wire Rod in Chandigarh.
1981 - Rolling Mill Project commissioned at Chandigarh for Round and Narrow
Strips.
1985 - Backward Integration Project for Steel Melting facilities.
1986 - Upgrading of Mini Steel Plant with continuous casting and ladle furnace
facilities. 1997 - Commissioning of Narrow Width Cold Rolling Project at
Chandigarh.
1998 - Commissioning of Precision Pipe Project at Chandigarh.
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2001 - Commissioning of Cold Rolling & Galvanizing Complex at Kolkata.
2002 - Addition of narrow width Cold Rolling facilities at Kolkata.
2003 - Expansion of wide width Cold Rolling facilities, ERW Water Pipes &
Tubes down stream facilities at Kolkata.
2004 - Further expansion of Cold Rolling facilities at Kolkata.
2005 - Commissioning of Orissa Project consisting of 4 DRI Kilns, Steel Making

Facilities, Coal Washery and 100 MW Power Plant.
2007 - Commissioning of further expansion of Orissa Project consisting of HR

Coil Mill, Steel making, Blast Furnance, Sinter plant, Coke oven plant, Oxygen
plant and Lime & Calcining Plant.
2008 - Implementation of further expansion in Orissa Project in progress.

Consisting of DRI Kilns, Coal Washery, Coal Mining, Power Plant & Steel
Making facilities.
15
6.4 Management
BOARD OF DIRECTORS
Sh. Sanjay Singal

Chairman & Managing Director
Sh. V.R. Sharma
Joint Managing Director
Ms Radhika Singal
Whole Time Director (Admin)
Sh. R.P. Goyal
Whole Time Director (Commercial)
Sh. H.C. Verma
Whole Time Director (Marketing)
Sh. R.N. Yadav
Whole Time Director (Technical)
Sh. R.D. Batra
Director
Sh. Dinesh Kumar Behal
Director
Sh. Jimmy Mahtani
Director
Sh. Anil S. Supanekar
Director
Sh. Aloke Sengupta
Nominee Director of IDBI
16
7. From the MD’s desk
Dear Shareholders,
Once again it’s time for all of us to take a look at the previous year and yet look beyond!
I would like to take this opportunity to greet all our esteemed shareholders and place on
record my gratitude for their continued support and
valued guidance. I am also pleased to present Your
Company’s achievements in the last one year.
The year 2007-08 has been one of winning challenges,
setting standards and all-round growth. In Your
Company’s performance, I perceive a new world
focused on transforming India’s steel landscape
through operational excellence, skill enhancement and
competitive value additions. One of your Company’s
achievements in the recent months stems from our
aspirations to seize the opportunities and move closer
to the growing market.
It is often said that ‘to accomplish great things, we

must not only act but also dream...’. Our dreams have
finally come true with the commencement of Hot
Rolled Coil production in the Orissa plant. This
venture in line with the Company’s vision is a high
point in our initiative, started years ago and now
stands at the completion of 1.5 million tpa fully
integrated steel & power project. The HR Coil plant is
the country’s first plant in over a decade and of course
the first-of-its-kind in the state of Orissa in private
sector. It gives me great pleasure to say that we have
made this possible. Little wonder, our vision has
travelled that extra mile to bloom forth into a huge
success!
It has already given us a competitive edge and an

impetus to combine our operational skills and
resources to forge a robust performance. However, our
challenge is to remain competitive. Confident of future
growth, we are striving to double the present capacity
in next two years and continuing our expansion drive. Integrating our best resources in
manpower, machinery and technology to reach out and deliver sustainable value over a
long term. I am sure that our achievements will pave the road to success and prepare us to
prove our mettle in the coming years.
17
I am thankful to all our shareholders, bankers, financial institutions and everyone
associated with us for their confidence and belief in our unwavering strength. I
would like to take this opportunity to redefine our commitment to continuous
improvement and high performance on a sustained basis.
Let us together keep up the spirit!
Regards
Sanjay Singal
Chairman & Managing Director
18
8. Job done in M/S Bhushan Power & steel Ltd
In the company my job has been divided in two parts Firstly I was asked to check
the entire system of different department physically:
• Store
• Purchas
• Bill passing
• Marketing
• Personnel
• Accounts
Here I have mainly checked the system like:

Loading and unloading of raw materials,
Storing system
Entry and exit of vehicle (Truck) inside the company premises
Security system
How to put a purchase order?
How the final bills pass for payment?
How to do marketing for the products?
How does the personnel department work?
And last but not least how does the accounts department work?
Secondly I was asked to check the Accounting system, Costing and lastly I also
involved myself in the job of Auditing.
19
8.1 Store Department:
There are two type of storage system in the company first one is Central Store and
second one is Site. It can be shown as under:
Material
Storing
s
Central Site
Store
Job Project
Site Site
Now in the central store they generally store those materials which are not going to
be used immediately in other words they are going to be used in future. The Site
storing mainly consists of two parts Job site storing and Project site storing. Now
the Job site storing means storing of materials in the site where actually the
manufacturing is going on. Project site is the site where manufacturing is not going
on but the construction of a manufacturing plant or other thing is going on. In order
to complete the construction some materials are required and those materials are
stored in the project site.
20
8.1.1 Basic documents required in Store Department:
In order to get some practical knowledge about the document that is maintained in
the store I sat at the gate along with the employee just to see how everything is
working then I observed that there are basically two types of documents are being
maintained at the gate. Material Inward and Material Outward, further Material
Inward is been divided into three parts namely INWARD STORE (Iron ore),
INWARD STORE (Coal), INWARD STORE (Miscellaneous). For more clarity of
the concept one can see the picture as under:
Bhushan Power & Steel as the name suggest is the power generating and steel
manufacturing plant and the two basic raw materials required is Coal and Iron Ore.
These two materials are required in huge quantity. Almost thousands of trucks,
carrying these two materials, come everyday so that is the reason they maintained a
separate document INWARD STORE (coal) INWARD STORE (Iron Ore) for
these two materials. And rests of the materials are recorded in INWARD STORE
21
(Misc). In case of materials or anything else which is going out of the plant
gate has to be recorded in MATERIALS OUTWARD. The pictures of all these
documents are given as under:
Format of INWARD STORE (COAL):
22
Format of INWARD STORE (Iron Ore):
Format of INWARD STORE (Miscellaneous):
23
After seeing the format of different INWARD STOREs documents now its
time to discuss about the MATERIALS OUTWARD. It is the document which is
also maintained at the store and it is mainly prepared at the gate of the plant. Any
vehicles carrying any materials are going outside the plant gate have to show the
relevant documents so that the officer at the gate can fill up the Materials Outward
book. Now take an example of empty LPG Cylinders which had been used at the
guest house going outside for refilling must have to be recorded in Materials
Outward book. So we can see that whether the item is related to business or not,
which was inside the plant premises (whole township), going outside should be
properly recorded in the books. All the outgoing materials are divided into two
parts:
a. Returnable
b. Non returnable (chargeable)
Returnable items are those items which after going out will return back. For
example empty LPG Cylinders, empty Oxygen Cylinders. And Non returnable
items are those items which are going out but will not return back. Example Steel
& Iron (end product), any rejected materials. Let’s see the format of materials
outward.
Format of MATERIALS OUTWARD:
24
Process Of Material outward
From the store
8.1.2
Empty Truck
Loading
Dispatch with….
Challan Way Bill Transport bill OGP
Book entry at the gate
Recheck/Reweight
Truck allowed to go 25
The above given diagram is showing the process of Material Outward from
the store. That means how does the material go out from the store? The above
given diagram is self explanatory. An empty truck comes into the store get the
materials loaded and then the store keeper prepare four documents which are as
under:
• Challan
• Way bill
• Transport bill
• OGP (Outward Gate Pass)
After preparing all this documents the concerned authority give
these documents to the driver of the truck. The truck driver carries those
documents to the exit gate where some entries have been made. Out of these four
documents the OGP has been kept at the gate for their record and later on this OGP
is sent to store department for their record. Now after completing the process of
documentation the materials in the vehicles are recheck or reweight and if it is
found ok then the vehicles are allowed to exit.
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8.1.3 Process of unloading of a TRUCK:
BHUSHAN POWER & STEEL, SAMBALPUR
GATE
EXIT ENTRY
T
R
PARKING U
C
SPACE K
TRUCKS
WEIGH WEIGH
BRIDGE BRIDGE
4 1
T
R
T U
R C
U K
C
K
WEIGH WEIGH
BRIDGE BRIDGE
3 2
T T
R R
U U
C C
K K
CHECK
POINT
T R U C K
UNLOADING
POINT (SMS1) T R U C K
27
The above given picture is showing the process of unloading of trucks at the
job site or the project site. Although the above given picture is looking a bit
complicated but it is very easy to understand. Now in order to see the process
practically I personally sat in a truck and saw the entire process. The process that I
observed is a truck after submitting the required documents at the gate gets the
entry and then the entire truck along with the material has to stand in the Weigh
Bridge 1 in order to get the measurement (Truck + Materials). Here the
measurement of materials is considered along with the truck weight. After that the
measurement is taken second time in Weigh Bridge 2. The difference in weight up
to ±50 kgs is acceptable. Now the truck unloads the materials at the concerned site
and then it comes back. Now the empty truck is measured again twice (Weigh
Bridge 3 & the Weigh Bridge 4). After that the weight of empty truck is deducted
from the weight of truck along with materials and then they get the final weight of
the materials. After the measurement of empty truck it has to wait in the parking
space for further documentation. And if the document is ok then the truck is
allowed to exit from the gate.
28
8.1.4 Auditing of books in stores
I went to the stores department where I got the opportunity to audit the books of
accounts of the store. I verified one month’s books that are books of April 2009.
Mainly I verified two types of documents- one is INWARD STORE
MISCELLENEOUS and another one is OUTWARD GATE PASS (OGP). At the
time of verifying the INWARD RECEIPT I have to verify it with the MATERIAL
RECEIPT NOTE (MRN). If both INWARD RECEIPT and MRN get matched then
we can say that the books are all right, if the two are not getting matched then we
have to understand that there is a problem. Not only did I verify the books but also
I made a physical verification of the stock in the store. While auditing the books I
came up with certain problems like-
On 1/4/09 there was an entry in the INWARD STORE (MISC) books but the
same entry was not there in MRN. When I asked them about that entry I was
told that it was a mistake done by them and later they searched it in the
computer which was there in the database and made a printout of that copy
and put that into the MRN.
On 14/4/09 the vehicle number which was written in the INWARD STORE
RECEIPT was not matching with the one written in MRN. That was also a
clerical mistake done by them and later I went to the record room where the
concerned person searched the data and made the correction in the MRN
books which was written wrongly. The record rooms are that room where all
the documents when made finally are kept preserved there.
On 18/4/09 there were two items which were there in the INWARD STORE
RECEIPT but were missing from the MRN. That entry was checked in the
computer where I was showed that the two items which were missing from
the MRN books had been entered correctly in the computer but that was a
clerical mistake and so those were missing from the MRN books. The
concerned person came up with a print out copy of that entry and put it in
the MRN.
29
On 25/4/09 there was a problem like this
INWARD STORE MRN

BOOKS
F/WT RS 37940 RS 37930
E/WT RS 10260 RS 10250
N/WT RS 27680 RS 27680
Here by looking at these figures we can say that in the INWARD STORE
BOOKS the F/Wt and E/wt is not matching with the figures written in MRN.
But finally we can say that N/Wt is coming same. F/wt is the full weight of
the loaded truck which comes with the materials. E/wt is the weight of the
empty truck which is excluding the materials. N/wt is the net weight of the
materials which is coming inside the plant. Finally we found that it was a
clerical mistake.
On 25/4/09 I found that the challan quantity which was there in the
INWARD STORE books was not matching with the MRN. Finally I found
that it was not a mistake. Actually what happened was that the quantity of
materials ordered to the supplier was less than it actually came. Suppose the
quantity of materials ordered was 36000 kg. But the supplier by mistake sent
36120 kg. This excess 120 kg was not recorded in the books and the
payment would be made according to the materials ordered. The payment
for the excess quantity would not be made to the supplier.
30
8.2 Purchase Department:
After completing the work in store department I moved to Purchase department. It
is also one of the busiest departments of the company. Even in this department I
wanted to understand the entire process physically and then do it practically and
then check its financial implication. According to my observation I found that the
entire work of this department has been divided into three parts i.e. Purchase of
materials relating to MAINTAINANCE, CONSUMABLE AND LUBRICNT. It
can be shown with the help of diagram which is as under.
8.2.1 Types of Purchase:
Purchase Process
Head office Plant

(Delhi,
Kolkata)
Iron ore Project Materials

Coal Consumables
Dolomite Lubricant
Quartzite Maintenance
Limestone Fabrication
Coal Bridge Civil Maintenance
31
The purchase of Raw Materials and other materials are taken place either
from the head office (Delhi, Kolkata) or from the plant itself. The core materials
for steel and power generation is being ordered from the Head Office. The core
materials are as under Iron ore Coal, Dolomite, Quartzite, Limestone and Coal
Bridge. But the other materials which are Project Materials, Consumables,
Lubricant, Maintenance, Fabrication, Civil Maintenance and others.
In plant the different job of purchase have been divided into different officers Mr.
Rnjan Soni is taking care of ‘Maintenance Items’, Mr. J. Behera is taking care of
‘Consumable Items’ and Mr. Verma is accountable for the purchase of material
related to ‘Lubricant Items’. Staying in this department and understanding the
process is good experience for me. They all helped me a lot in understanding the
process, which I will discuss in later topics, and gave me the format of all the
required documents. They assign me some jobs in this department so that I can
understand it practically.
32
8.2.2 Process of Purchase (for Maintenance)
Requisition
Indent
generation
K Store
E
Indent from P
Indenter T Purchase
(3copies) by
Indenter
Enquiry to Suppliers
Quotations from Suppliers
Comparative Statement
of Quotations
Purchase order made 33

As given the above flowchart, it refers to the process of purchase of the
materials related to the maintenance. Firstly a purchase requisition of materials will
come from the respective maintenance department then the head of the department
will create an indent. The indent generating from the indenter consists of mainly
three copies- one for the store department, next for the purchase department and
the last one for the indenter itself. As the indent comes from the indenter it does
not mean that the purchase department will approve the purchase requisition and
will immediately set the purchase order. Before setting the purchase order a
verification will be done from the purchase department in order to look in to the
matter whether the materials set for order are truly required or not. In order to put
the purchase order they have to check the following-
• From which department the requisition came?

• How much materials are required?
• How much materials is been installed?
• Are the materials present in the store?
• If present in the store then how much materials are there in the store?
• Are there any requisition previously made for the materials present in the
store?
• If yes then when to supply the materials in the store
• The materials which are urgently required will be supplied first
After making all these verifications, the purchase department put an enquiry to the
suppliers. They put the enquiry either through mail or through phone. After the
enquiries are made, the suppliers send a list of quotations of materials to the
purchase department either through mail or through post. Then getting the
quotations from different suppliers a comparative statement is been made where all
the quotation price of the materials send by the suppliers are put and which quality
of materials they will supply are also been put. After that the price and the quality
is compared and later on a decision is been taken whom to give the purchase order
that is which supplier will get the purchase order. This whole process is the
purchasing process of materials done by the purchase department.
(A format of an original purchase order is given in annexure – 1)
34
8.2.3 Process of Purchase (for Consumables)
Daily Report of stock
Checking the Minimum

Stock level in store
Enquiry To Suppliers
Quotations from Suppliers
Comparative Statement of
Quotations
Purchase Order made

35
As given the above flowchart, it refers to the process of purchase of the
materials related to the consumables. In case of purchase of consumable there is no
need of indent generation. Here the purchase order is directly given by the
purchase department. There is a completely different procedure in placing an order
in compare to the process of purchase of materials related to maintenance. The
process starts with the checking of daily stock reports and then it has to compare
with the minimum stock level which is available with the store. If it is found short
to the minimum level then the purchase department sent the enquiry to the different
supplies. And they asked the suppliers to send the quotation. All the interested
suppliers send their quotation either through e-mail or through the post. After
getting all the quotations the purchase department has to prepare a comparative
statement where all the quotations have to be compared. The comparison may be
based on price, quality, time of delivery, time of credit period etc. After that the
concerned authority takes the final decision and gives the purchase order.
(A format of an original purchase order is given in Annexure – 1)
While doing the audit of the purchase department I came across the under given
lists of few Suppliers and Raw Materials (SMS- I & II).
[A complete list of suppliers along with their address and contact number of
concerned person is given in Annexure – 2]
[A photo copy of original “daily stock statement’’ of SMS- I & SMS- II as on

07/05/09 & 19/05/09 respectively are given along with their code number, EOQ,
opening stock, receipt, issued, closing stock in Annexure – 3 & 4 respectively.]
36
8.2.4.1 List of few Suppliers
Chhattisgarh Electricity Co. Ltd – Raipur

Deepak Ferro Alloys Ltd – Raipur
Shree Balaji Iron Pvt Ltd – Rourkela
Modern India Con- Cost Limited – Kolkata
Shiva Industries – Korba
Brindavan Enterprises Pvt. Ltd – New Delhi
Sarthak Metals Marketing Pvt. Ltd – Bhilai
Team Ferro Alloys Pvt. Ltd – Delhi
Jainson Labs – Meerut
Minex Metallurgical Co. Pvt. Ltd – Nagpur
Bansal Brothers – Jamshedpur
Handa Alloy Steel Industries – Bilaspur
Premier Alloys & Chemicals (P) Ltd – Hyderabad
Electro Ferro Alloys Pvt. Ltd – Ahmedabad
RNB Carbides & Ferro Alloys Pvt. Ltd – Chennai
SMS Power Generation Ltd – Orissa
Co-operative Ispat Alloys Ltd – Durgapur
Harsh Alloys – Raipur
Alok Ferro Alloys – Raipur
Sova Ispat Alloys Limited – Durgapur
Impex Ferro Tech Limited – Kolkata
Satish & Company – Rourkela
Krishna Metal & Alloys – Rourkela
Kushal Chemicals – Bhilai
Corporate Ispat Alloys Ltd – New Delhi
Fine Chemical products – Kolkata
Naman Alloys Pvt. Ltd – Raipur
Shyam century Ferrous – Meghalaya
Sarda Energy & Minerals Ltd – Raipur
37
8.2.4.2 Key Financial Associates:
i. SMS Demag, Germany

Supply of CSP Plant
ii. Siemens, Germany
Supply of Electrical, Automation & Spare parts Design
iii. Waldrich Siegen, Germany
Supply of Roll Grinding Machine and Design and Training
iv. Techint Tagliaferry, Italy
Supply of Electric Arc Furnace, Ladle Furnace / Relevant Auxiliaries
v. Beijing Sino–Steel & Group Corporation (SSIT), China Industry
Supply of Blast furnace plant, Blower for furnace, Sinter Plant & Coke Oven Plant
vi. IMS Messsysteme, Germany
Supply of Compact Gauging System for CSP
vii. Techint Italimpianti, Germany
Supply of Roller Hearth Tunnel Furnace
viii. Qualical AG, Switzerland
Supplu of Lime & Dolomite Plant
ix. Air Liquid Engineering, France
Supply of Oxygen Plant
x. Humbolt Wedag, Germany
Coal Washery
xi. Lurgi Technology , Germany
Thyssen Krupp, Germany
Ferry Capital, France
Sponge Iron Kilns
xii. Bolier- Isgec John Thompson, India
Turbine- Simens Finspong, Germany
Power Plant
xiii. Mecon Ltd, India
Technical Consultant
38
Boric Acid
Ferro aluminum
Ferro Manganese
Sodium silicate
Met Coke
Slide Plate
Laddle Nozzle
Collector Nozzle
Porous Plug
Mag. Carbon Bricks
Asbestos sheet
Asbestos Rope
Lancing Pipe
L.P.G. Cylinder
Argon Cylinder
Oxygen Cylinder
Gear Oil
Hydraulic Oil
Rapseed oil
Copper Mould Tube
Tundish Board
Sen Well Block
Mono Block Stopper
Casting Powder
Mortar
Cal. Pet coke
Gr. Electrodes
Castable- 90A1
Castable-90AH
Castable-95H
39
Aluminum Bar/ Ingots

Ferro silicon lumps
Nickel Plate
Moly Metal
Calcium silicon cord wire
Ferro Boron cord wire
Sulphur cord wire
Ferro Titanium cord wire
Graphite Electrodes
Sulphur stick
Met coke
LPG Gas
Argon gas cylinder
Nitrogen gas cylinder
Hard coke Lumps
Synthetic slag
Lancing pipe
Asbestos hand gloves
Cotton hand gloves
Nose mask
Melting goggles
Salt
Basic Gunning Mass
Nozzle filling compound
Jumbo bags
Silico Manganese
Ferro vanadium
Alumix powder
Kiln Lime EAF Hopper
Kiln Lime LRF Hopper
40
8.3 Bill Passing Department:
Bill passing is also one of the important departments of M/S Bhushan Power &
Steel Ltd. It is basically a checking department and busy with the job of checking
the different documents. The main job of this department is to tally the different
figure of MRN (Materials Receipt Note), Bill of Supplier and Inward Security Pass
with the figure of Purchase order. When everything found to be correct then after
an entry has to be made into the computer and the bunch of documents is send to
the Accounts Departments for making vouchers. A bunch of documents can
contain the under mention documents.
Supplier’s Bill
Inward Security Pass
Weight Bill
MRN
Purchase Order (Photocopy)
Comparative Statement of Quotation (Photocopy)
(See an original copy in Annexure - 5)
Indent (Photocopy)
Transporter’s Bill
Raw Material Analysis Report
Debit Note / Credit Note
Shortage/Rejection Memo
41
8.3.1 Format of a Supplier’s Bill
42
8.3.2 Format of Inward Security Pass
43
8.3.3 Format of Materials Receipt Note
MATERIAL RECEIPT NOTE

BPSL- MRN. No Format No-
Supplier- GE. No Date
Account of- Challan. No Date
Transporter- Indent No Date
Bill of Entry- Date PO. No Date
Vehicle No- Way bill no GR. No Date
Sht. Memo No- Date Rej. Memo No Date Ext. Date
SL. Descp of unit PO Ch Reqd Rejd Sh Accpt Rate Amt Remarks

No Materials No Qty Qty Qty Qty Qty
Wt SL No A: Wt SL No B : Wt SL No C : Wt SL No D :
WB Wt A : WB Wt B : WB Wt C : WB Wt D :
Inspection Note
Prepared by Inspected by Inspection Charge HOD
(Receipt section) (Stores)
44
8.3.4 Format of Raw Materials Analysis Report:
BHUSHAN POWER & STEEL LIMITED Format No:

BPSL/SMS-II/QC/03
Vill: Thelkoloi, The: Rengali
Dist: Sambalpur(Orissa)
RAW MATERIAL ANALYSIS REPORT
Entry No Dated
Material Truck No
Quantity Location
Suppliers name
(Store In-charge)
Chemical composition (Specification)

Chemical Composition (Observed)
Material Accepted/Rejected
Remarks
Office use only
Inspected by Dept Head General Manager
45
8.3.5 Format of Debit / Credit Note:
46
8.4 Audit Department:
Before starting our basic discussion regarding this department at M/S Bhushan
Power & Steel Ltd. we should try to understand some basic concept of auditing.
8.4.1 Basic concept of Auditing:

An audit is an evaluation of an organization, system, process, project or product. It
is performed by a competent, independent, objective, and unbiased person or
persons, known as auditors. The purpose is to verify that the subject of the audit
was completed or operates according to approved and accepted standards, statutes,
regulations, or practices. It also evaluates controls to determine if conformance will
continue, and recommends necessary changes in policies, procedures or controls.
Auditing is a part of some quality control certifications such as ISO 9000.Audits
evaluate conformance now and into the future. An inspection evaluates
conformance in the past. Both are important parts of management.
There are so many types of auditing, for example
Financial Audit
Statutory Audit
Tax Audit
Excise Audit
External Audit
Internal Audit
Cost Audit
Purchase Audit
Logistic Audit
Store Audit & ETC
Here I am going to concentrate mainly on the Internal audit because I was the
proud member of the Internal Auditing Team. Apart from this I will also discuss
some of the above given types of audit. Let us begin with them
47
Financial Audit:
An important type of audit is the financial audit. It is designed to determine

whether financial statements are fairly presented in accordance with Generally
Accepted Accounting Principles (GAAP) & Accounting Standard as issued by
ICAI. Financial audits are carried out for companies, registered charities and some
government/public bodies etc. Government financial reports are not always audited
by outside auditors. Some governments have elected or appointed auditors.
Statutory Auditing:
Every company registered in India has to get his accounts audited from a chartered
accountant every year.
Tax Auditing:
Every assessee, whose turnover of a business exceeds Rs.40 Lakhs or total receipts
from any profession exceeds Rs.10 Lakhs in any previous year, is required to get
his accounts audited and report as per section 44AB of the income tax act.
8.4.2 Internal Auditing:

Internal auditing is a profession and activity involved in helping organizations
achieve their stated objectives. It does this by using a systematic methodology for
analyzing business processes, procedures and activities with the goal of
highlighting organizational problems and recommending solutions. Professionals
called internal auditors are employed by organizations to perform the internal
auditing activity.
The scope of internal auditing within an organization is broad and may involve
topics such as the efficacy of operations, the reliability of financial reporting,
deterring and investigating fraud, safeguarding assets, and compliance with laws
and regulations.
Internal auditing frequently involves measuring compliance with the entity's

policies and procedures. However, Internal auditors are not responsible for the
execution of company activities; they advise management and the Board of
Directors (or similar oversight body) regarding how to better execute their
48
responsibilities. As a result of their broad scope of involvement, internal
auditors may have a variety of higher educational and professional backgrounds.
Publicly-traded corporations typically have an internal auditing department, led by

a Chief Audit Executive ("CAE") who generally reports to the Audit Committee of
the Board of Directors, with administrative reporting to the Chief Executive
Officer.
8.4.2.1 History of internal auditing:
The Internal Auditing profession evolved steadily with the progress of

management science after World War II. It is conceptually similar in many ways to
financial auditing by public accounting firms, quality assurance and banking
compliance activities. Much of the theory underlying internal auditing is derived
from management consulting and public accounting professions. With the
implementation in the United States of the Sarbanes-Oxley Act of 2002, the
profession's growth accelerated, as many internal auditors possess the skills
required to help companies meet the requirements of the law
8.4.2.2 Independence in Internal Audit
To perform their role effectively, internal auditors require organizational

independence from management, to enable unrestricted evaluation of management
activities and personnel. Although internal auditors are part of company
management and paid by the company, the primary customer of internal audit
activity is the entity charged with oversight of management's activities. This is
typically the Audit Committee, a sub-committee of the Board of Directors. To
provide independence, most Chief Audit Executives report to the Chairperson of
the Audit Committee and can only be replaced with the concurrence of that
individual.
49
8.4.2.3 Internal Audit and Internal Control:
Internal auditing activity is primarily directed at improving internal control.
Internal control is broadly defined as a process, effected by an entity's board of
directors, management, and other personnel, designed to provide reasonable
assurance regarding the achievement of objectives in the following internal control
categories:
• Effectiveness and efficiency of operations.

• Reliability of financial reporting.
• Compliance with laws and regulations.
Management is responsible for internal control. Managers establish policies and

processes to help the organization achieve specific objectives in each of these
categories. Internal auditors perform audits to evaluate whether the policies and
processes are designed and operating effectively and provide recommendations for
improvement.
8.4.2.4 Internal Audit in corporate governance

Internal auditing activity as it relates to corporate governance is generally informal,
accomplished primarily through participation in meetings and discussions with
members of the Board of Directors. Corporate governance is a combination of
processes and organizational structures implemented by the Board of Directors to
inform, direct, manage, and monitor the organization's resources, strategies and
policies towards the achievement of the organizations objectives. The internal
auditor is often considered one of the "four pillars" of corporate governance, the
other pillars being the Board of Directors, management, and the external auditor.
A primary focus area of internal auditing as it relates to corporate governance is

helping the Audit Committee of the Board of Directors (or equivalent) perform its
responsibilities effectively. This may include reporting critical internal control
problems, informing the Committee privately on the capabilities of key managers,
suggesting questions or topics for the Audit Committee's meeting agendas, and
coordinating carefully with the external auditor and management to ensure the
Committee receives effective information.
50
8.4.2.5 Nature of the internal audit activity:
Based on a risk assessment of the organization, internal auditors, management and
oversight Boards determine where to focus internal auditing efforts. Internal
auditing activity is generally conducted as one or more discrete projects. A typical
internal audit project involves the following steps:
i. Establish and communicate the scope and objectives for the audit to
appropriate management.
ii. Develop an understanding of the business area under review. This includes
objectives, measurements, and key transaction types. This involves review
of documents and interviews. Flowcharts and narratives may be created if
necessary.
iii. Describe the key risks facing the business activities within the scope of the
audit.
iv. Identify control procedures used to ensure each key risk and transaction type
is properly controlled and monitored.
v. Develop and execute a risk-based sampling and testing approach to
determine whether the most important controls are operating as intended.
vi. Report problems identified and negotiate action plans with management to
address the problems.
vii. Follow-up on reported findings at appropriate intervals. Internal audit
departments maintain a follow-up database for this purpose.
Project length varies based on the complexity of the activity being audited and
48Internal Audit resources available. Many of the above steps are iterative and
may not all occur in the sequence indicated.
8.4.2.6 Reporting of critical findings:

The Chief Audit Executive (CAE) typically reports the most critical issues to the
Audit Committee quarterly, along with management's progress towards resolving
them. Critical issues typically have a reasonable likelihood of causing substantial
financial or reputational damage to the company. For particularly complex issues,
the responsible manager may participate in the discussion. Such reporting is
critical to ensure the function is respected, that the proper "tone at the top" exists in
the organization, and to expedite resolution of such issues. It is a matter of
considerable judgment to select appropriate issues for the Audit Committee's
attention and to describe them in the proper context.
51
8.4.3 Audit in M/S Bhushan Power & Steel Ltd.
This is the newly established department in the company. Since the entire company
is in a project mode so it is optional for the company to audit the books or system.
But thanks to the management for setting up an exclusively independent internal
audit system. Here audit department mainly consists of Cost audit, Logistic audit,
Excise audit, Store audit, Purchase Audit and ETC. Before establishing this
department auditor from the Head Office (which is in Chandigarh) or corporate
office (which is in Delhi) comes to the plant and audit randomly. But establishing
this internal audit department in the plant is itself a good move which will help in
keeping a good control over the entire system. In my two month SIP Programme at
M/S Bhushan Power & Steel Ltd I spent almost 20 days in this department.
Basically I manage to audit for two departments which was Logistic department
and purchase department. Now I will discuss separately what exactly I did and
what exactly I found in these two departments one by one. Apart from this I will
also discuss what audit report did I submit to the management.
8.4.3.1 Audit for Logistic Department:
Logistic department is mainly deals in receiving of the raw materials that they have
ordered for. Volume of work is very high here. In a power and steel plant a huge
quantity of coal and iron ore is required so almost thousands of trucks carrying
Coal and Iron Ore come to the factory every day. This department is a 24x7
department that means this department works for 24 hours a day, 7 days a week
and 365 days in a year it is because the steel plant can not stop for a single minute,
if it does so then it will cost crores of rupees to restart it. In this department I was
given total 7 items for audit they are as under:
i. Coal
ii. Iron Ore
iii. Dolomite
iv. Manganese
v. Quartz
vi. Lime Stone
vii. Coal Bridge
In this department I was mainly checking the MRN (Material Receipt Note)
quantity with weight slip, delivery challan and transporter’s freight slip. Since the
52
volume of work was very high so I along with my another colleague of the
institute checked almost 15000 (Fifteen thousands) MRNs. After completing the
audit of coal and iron ore we submitted the under given report to the management.
8.4.4 Audit Report submitted to the Management:

8.4.4.1 Final Audit Report for Iron Ore:
53
54
55
8.4.4.2 Final Audit Report for Coal:
56
8.4.5 Audit for Purchase Department:
I also got the opportunity to audit the books of the purchase department. In other
words I can say that I have done a purchase audit. When I started auditing I got a
file which contains various documents related to purchase of materials. There was
a copy of the purchase order, indenters copy, Enquiries copy, Quotations copy sent
by the suppliers, and lastly a comparative statement. In order to check these
documents my work was to first check the indenters copy where the specific
description of the materials were stated which the indenter require. After that
enquiries copy were to be checked in order to see whether correct enquiries have
been sent to the suppliers by the purchase officer about the material. Next I have to
read the quotation of that supplier very minutely who got the order to supply the
material. The terms and conditions mentioned in the quotation of that supplier
should match with that in the purchase order. If by any chance there is a mismatch
of conditions mentioned in quotations with that in the purchase order then there is
a mistake. I also have to check the comparative statement very carefully. In the
Comparative statement different prices of the suppliers have been quoted. I have to
check whether the supplier who quoted the least landed price for the material got
the order or not. There were some cases where the least landed price quoted
supplier did not get the order. In that case when I asked the purchase officer about
that case then he told me that sometimes they also have to look into the quality of
materials and not price. So some of the suppliers are there who charges a higher
price in comparison with other suppliers but the quality of materials which the
supply is better.
57
9.Financial Analysis of M/S Bhushan Power
& Steel Ltd.
In this section I am going to make a financial analysis of M/S Bhushan Power &
Steel Ltd. Here I am going to discuss their Accounting Policies, Balance Sheet,
Profit & Loss Account, 15 Schedules and different Financial Indicators.
9.1 Significant Accounting Policies:

I. BASIS FOR PREPARATION OF ACCOUNTS
The Financial Statements have been prepared under historical cost

convention on accrual basis in accordance with generally accepted
accounting principles and applicable Accounting Standards issued by
The Institute of Chartered Accountants of India and the provisions of
Companies Act, 1956.
II. FIXED ASSETS
Fixed Assets are stated at cost, net of VAT/ MODVAT/ CENVAT, less
accumulated depreciation. All costs including borrowing costs till
commencement of commercial production and adjustment arising from
exchange rate variations relating to borrowings attributable to the fixed
assets are capitalized. Capital expenditure on assets by company is
reflected in capital work in progress account till the period of completion
and thereafter in the fixed assets. Machinery spares that can be used only
in connection with an item of fixed asset and their use is expected to be
irregular are capitalized. Replacement of such spares is charged to
revenue.
58
III. INTANGIBLE ASSETS
In accordance with the Accounting Standard (AS) 26 relating to

intangible assets, all costs incurred on technical know-how / license fee
relating to production process are charged to revenue in the year of
incurrence. Costs incurred on technical know-how / license fee relating
to process design / plants / facilities are capitalized at the time of
capitalization of the said plant / facility and amortized on pro-rata basis
over a period of five years. Computer software is capitalized on the date
of installation and is amortized over a period of five years.
IV. IMPAIRMENT OF ASSETS
Carrying amount of cash generating units/assets is reviewed for

impairment. Impairment, if any, is recognized where the carrying
amount exceeds the recoverable amount being the higher of net
realizable price and value in use.
V. EXPENDITURE ON NEW PROJECTS AND SUBSTANTIAL

EXPANSION
Expenditure directly relating to construction activity including trial run

production expenses (net of income, if any) is capitalized. Indirect
expenditure incurred during construction period is capitalized as part of
the indirect construction cost to the extent to which the expenditure is
indirectly related to construction or is incidental thereto. Other indirect
expenditure (including borrowing costs) incurred during the construction
period which is not related to the construction activity nor is incidental
thereto, is charged to the Profit & Loss Account.
VI. DEPRECIATION
Depreciation on fixed assets is provided on straight line method at the

rates and in the manner prescribed in Schedule-XIV to the Companies
Act, 1956.
59
On incremental/decremental cost arising on account of translation
of foreign currency liabilities for acquisition of fixed assets, depreciation
has been provided as aforesaid over the residual life of the respective
plants. Premium of leasehold land is amortized over the period of lease
except leasehold land acquired on lease of ninety years or more.
Depreciation on fixed assets costing up to Rs. 5000/- is charged @ 100%
on pro-rata basis.
Assets not owned by the company are amortized on pro-rata basis over a
period of five years from the year in which such assets are
commissioned.
VII. FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in foreign currencies are normally recorded at

the exchange rate prevailing at the date of the transaction. Monetary
items denominated in foreign currencies outstanding at the year-end are
translated at exchange rate applicable as on that date. Non monetary
items are valued at the exchange rate prevailing on the date of
transaction. Any income or expense on account of exchange difference
either on settlement or on translation is recognized in the profit and loss
account except in cases where these relate to the acquisition of fixed
assets.
Exchange differences arising on liabilities incurred on repayment of
borrowings in foreign currency for acquisition of fixed assets are
adjusted in the carrying cost except borrowing utilized for acquisition of
assets within India on or after 1st April 2004 in which case these are
recognized in the Profit & Loss Account.
VIII. INVESTMENTS
Investments are classified into current and long-term investments.

Current investments are stated at the lower of cost and quoted/ fair
value. Long term investments are stated at cost less any provision for
permanent diminution in value.
60
IX. DIVIDEND INCOME
Dividend on investments is accounted for in the year of receipt.
X. SALES
Sales are inclusive of trial run sales, excise duty and net of sales tax/ vat.
XI. INVENTORY VALUATIONS
Inventories are valued at lower of cost or net realizable value except

scrap which is valued at net realizable value. The cost is determined by
using first-in-first-out (FIFO) method. Finished goods and work-in
progress include costs of conversion and other costs incurred in bringing
the inventories to their present location and condition. Excise duty on
closing stock of finished goods and scrap are accounted for on the basis
of payments made in respect of goods cleared as also provision made for
goods lying in the factory and included in the value of such stocks.
XII. INCOME TAX
Provision for current income tax is made after taking credit for
allowances and exemptions. In case of matters under appeal, due to
disallowance or otherwise, provision is made when the said liabilities are
accepted by the company.
In accordance with the Accounting Standard 22-Accounting for Taxes
on income issued by Institute of Chartered Accountants of India, the
deferred tax for timing differences between the book & tax profit for the
period is accounted for using the tax rates and the tax laws that have
been enacted or substantively enacted as of the balance sheet date.
Deferred tax assets arising from temporary timing difference are
recognized to the extent there is virtual certainty that the asset will be
realized in future. Provision for fringe benefit tax is made on fringe
benefits taxable under the Income Tax Act, 1961.
61
XIII. BORROWING COST
Borrowing costs that are attributable to the acquisition or the

construction of qualifying assets are capitalized as part of cost of such
assets. A qualifying asset is one that necessarily takes substantial period
of time to get ready for intended use. All other borrowing costs are
charged to revenue.
XIV. MODVAT / CENVAT / VAT
Modvat/ Cenvat/ VAT claimed on capital assets are credited to assets /

capital work in progress account. Modvat / Cenvat/ VAT on purchase of
raw materials and other materials are deducted from the cost of such
materials.
XV. CLAIMS
Claims receivable are accounted for depending on the certainty of

receipt and claims payable are accounted at the time of acceptance.
XVI. PROPOSED DIVIDEND
Dividend as proposed by the Board of Directors is provided for in the

books of account, pending approval at the Annual General Meeting.
XVII. RETIREMENT/POST RETIREMENT BENEFITS
i. Short term employee benefits are recognized as an expense at the

undiscounted amount in the year in which related service is
rendered.
ii. The company has defined contribution plan for post retirement
benefits, namely Employees Provident Fund scheme administered
through provident fund commissioner. The company’s contribution
is charged to revenue every year.
62
iii. Company’s contribution to state plans namely Employees
State Insurance Fund is charged to revenue every year.
iv. The Company has defined benefits plans namely Leave
encashment / Compensated absence and Gratuity, the liability for
which is determined on the basis of Actuarial valuation at the end
of the year. Gratuity Trust is administered through “Life Insurance
Corporation of India”.
v. Termination benefits are recognized as an expense immediately.
vi. Gain or Loss arising out of actuarial valuation are recognized
immediately in the profit and loss account as income or expense.
XVIII. PROVISIONS AND CONTINGENT LIABILITIES
Show cause notices issued by various government authorities are not

considered as obligation. When the demand notice are raised against
such show cause notice and are disputed by the company then these are
classified as possible obligations.
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in notes.
XIX. FINANCIAL DERIVATIVE TRANSACTION
In respect of the Financial derivative contracts the premium /interest

paid and profit/ loss on settlement is charged to Profit & Loss account.
The contracts entered into are marked to market at year end and the
resultant profit/ loss is charged to Profit & Loss account except where
these relate to fixed assets in which case it is adjusted to the cost of fixed
assets.
63
9.2 Profit or Loss Account
for the year ended 31st March 2008
SCHEDULE 2008 2007
INCOME
Sale of Products 12 3,87,349.07 3,01,786.23
Less Excise Duty 39691.06 30015.56
Net Sales 3,47,658.01 2,71,770.67
Other Income 5039.29 1121.47
3,52,697.30 2,72,892.14
EXPENDITURE
Manufacturing & Other
13 2,79,944.82 2,26,475.53
Expenses
Profit Before Interest,
72752.48 46416.61
Depreciation and Tax
Interest & Financial Charges 14 17303.69 10605.85
Profit Before Depreciation &
55448.79 35810.76
Tax
Depreciation 16712.74 10438.47
Profit Before Tax 38736.05 25372.29
Less: Income Tax Expense ;
- Current Tax 4400.00 2850.00
- Mat Adjustment 4400.00 2350.00
0.00 500.00
- Deferred Tax 6077.16 4500.00
6077.16 5000.00
- Fringe Benefit Tax 110.00 77.00
6187.16 5077.00
- Earlier years -2.65 183.93
- Wealth Tax 10.50 6195.01 8.21 5,269.14
Profit After Tax 32541.04 20103.15
Balance Brought Forward from
29562.97 27098.96
Previous Year
Impact of Transitional Provision
32.71
of Employee
Benefits as per AS -15 —
64
Profit Available for 62136.72 47202.11
Appropriation
APPROPRIATIONS
General Reserve 20000.00 10000.00
Transferred to Debenture
— 7567.00
Redemption Reserve
Proposed Dividend 68.03 61.66
Dividend Tax 11.56 10.48
Balance Carried to Balance
42057.13 29562.97
Sheet
62136.72 47202.11
Basic earning per share 23.92 16.30
Diluted earning per share 23.73 16.30
Nominal value of Equity Shares
10.00 10.00
in (Rs.)
Significant Accounting
15
Policies
Notes forming part of
16
Accounts
65
9.3 Balance sheet
as at 31st March 2008
SOURCES OF FUNDS SCHEDULE 2008 2007

Shareholders’ Funds
Share Capital 1 13605.17 13605.17
Advance Received for Share Capital 15000.00 --
Reserves and Surplus 2 1,46,024.59 1,13,530.43
1,74,629.76 1,27,135.60
Loan Funds 3
Secured Loans 5,00,514.54 3,49,052.66
Unsecured Loans 1,04,531.09 46766.99
6,05,045.63 3,95,819.65
Deferred Tax Liability (Net) 19600.00 13506.00
7,99,275.39 5,36,461.25
APPLICATION OF FUNDS
Fixed Assets 4
Gross Block 3,71,649.18 1,91,804.42
Less: Depreciation 62734.58 46377.63
Net Block 3,08,914.60 1,45,426.79
Capital Work in Progress 3,26,381.70 3,07,733.86
6,35,296.30 4,53,160.65
Investment 5 10823.11 --
Current Assets, Loans & Advances
Inventories 6 94917.71 48869.65
Sundry Debtors 7 76832.79 54285.52
Cash & Bank Balances 8 11090.80 2648.15
Loans & Advances 9 44394.75 43671.15
2,27,236.05 1,49,474.47
Less: Current Liabilities & Provisions
Current Liabilities 10 73262.88 65492.89
Provisions 11 817.19 680.98
74080.07 66173.87
Net Current Assets 1,53,155.98 83300.60
7,99,275.39 5,36,461.25
Significant Accounting Policies 15
Notes forming part of Accounts 16
66
9.4 Details of Schedules maintained by the company:
(Rs in Lacs)
2008 2007
SCHEDULE-1
SHARE CAPITAL
Authorized
20,00,00,000, Equity Shares of Rs.10/- each 20000.00 20000.00
20000.00 20000.00
Issued
13,60,51,665 Equity Shares of Rs.10/- each 13605.17 13605.17
13605.17 13605.17
Subscribed & Paid Up
13,60,51,665, Equity Shares of Rs.10/- each fully
13605.17 13605.17
paid up.
13605.17 13605.17
Above includes 3,51,52,240 Equity Shares of Rs.
10/- each fully paid up issued pursuant to the
scheme of Amalgamation of Bhushan Industries
Ltd., Bhushan Metallics Ltd. and Decor Steel Ltd
with the company.
SCHEDULE-2
RESERVES AND SURPLUS (Rs in Lacs)
Capital Reserve 1.00 1.00
Capital Redemption Reserve 13.50 13.50
Debenture Redemption Reserve
As Per Last Balance Sheet 8167.00 3100.00
Add : Transferred from Profit and Loss Account -- 7567.00
8167.00 -- 10667.00
Less : Transferred To General Reserve 8167.00 2500.00 8167.00
Securities Premium Account
Add : Received during the year -- 43285.96 35603.57 43285.96
67
General Reserve
Add : Transferred from Profit & Loss Account 20000.00 10000.00
Add : Transferred from Debenture Redemption
8167.00 60667.00 2500.00 32500.00
Reserve
Profit & Loss Account 42057.13 29562.97
1,46,024.59 1,13,530.43
SCHEDULE-3
LOAN FUNDS (Rs in Lacs)
SECURED LOANS
Debentures
-NIL (Previous Year 100), 9% Redeemable Non
-- 667.00
Convertible
Debentures of Rs.10,00,000/-each
-NIL (Previous Year 1500), G-Sec Redeemable -- 15000.00
Non-Convertible Debentures of Rs.10,00,000/-
each
Working Capital Loans from *
- Banks
- Rupee Loan 67168.46 49984.80
- Foreign Currency Loan 5795.65 --
Term Loans From **
- Banks
- Rupee Loan 3,65,628.61 2,25,794.54
- Foreign currency Loan 57151.11 50242.15
- Financial Institutions
- Rupee Loan 2425.00 5240.00
Deferred Credits from ***
- Banks 2345.71 1038.37
Loans From Banks Against F.D.R -- 1085.80
5,00,514.54 3,49,052.66
68
SCHEDULE-4
FIXED ASSETS (Rs in Lacs)
GROSS BLOCK DEPRECIATION NET BLOCK
Sale / Writt
DESCRIPTI Cost Adjus Cost As Adjustm en Total
Addition As At For As At As At
ON OF As At ts At ent back upto
s during 01.04. the 31.03.20 31.03.20
FIXED 01.04.0 durin 31.03.20 during durin 31.03.20
the Year 07 year 08 07
ASSETS 7 g the 08 the year g the 08
Year year
Freehold
3493.99 2593.78 — 6087.77 — — — — — 6087.77 3493.99
Land
Leasehold
3540.18 4.18 — 3544.36 — — — — — 3544.36 3540.18
Land
30783.2 669.8 36638.1 4048.1 2173.3 31062.3 26735.1
Building 6524.74 642.28 3.38 5575.82
9 7 6 7 1 4 2
Railway
2136.62 544.04 — 2680.66 78.66 119.9 — — 198.56 2482.10 2057.96
Siding
Plant & 1,46,74 1,70,855 794.7 3,16,809 40649. 14582. 335.3 54700.4 2,62,109 1,06,099
196.40
Machinery 8.44 .96 2 .68 41 84 8 7 .21 .03
Furniture &
1071.67 288.49 72.45 1287.71 135.07 125.41 44.90 6.43 209.15 1078.56 936.60
Fixture
Vehicles 1935.61 664.28 93.67 2506.22 638.02 206.35 30.42 10.60 803.35 1702.87 1297.59
Intangible Assets
Technical
127.64 — — 127.64 29.18 25.53 — — 54.71 72.93 98.46
Knowhow
Assets Not
Owned by
1966.98 — — 1966.98 799.12 393.4 — — 1192.52 774.46 1167.86
the
Company
1,91,804. 1,81,475 1630. 3,71,649 46377. 17626. 355.7 62734.5 3,08,914 1,45,426
Total 914.00
42 .47 71 .18 63 74 9 8 .60 .79
Previous 1,50,518. 42189.9 903.7 1,91,804 36029. 11177. 46377.6
739.12 90.48
Year 18 7 3 .42 64 59 3
3,26,381 3,07,733
Capital Work in progress
.70 .86
6,35,296 4,53,160
Total
.30 .65
69
I. Capital work in progress includes expenditure incurred during
construction period, capital stores, advances amounting to Rs.
18,681.18 Lacs ( Previous year Rs. 13,962.36 lacs) paid against
capital expenditure (unsecured, considered good)
II. Addition & capital work in progress include loss of Rs. 2,731.90
Lacs (Previous year loss of Rs. 2,104.77 Lacs ) adjustment on
account of exchange difference.
III. No write off has been done for lease hold land since acquired on
lease of 90 years & above.
IV. Sales / Adjustment and Depreciation for the year include Rs.
914.00 Lacs (Previous year Rs. 714.57 Lacs) charged to capital
work in progress Rs. Nil (Previous year Rs. 24.55 Lacs) charged to
trial run expenses and Rs. 16,712.74 Lacs (Previous year
Rs.10,438.47 Lacs) charged to profit & loss account.
V. Sale/ Adjustment includes land Rs. Nil (Previous year Rs. 6.00
lacs) being the amount of land of rehabilitation colony transferred
to various persons.
VI. The intangible assets have been amortized on pro-rata basis over a
period of five years.
70
2008 2007
SCHEDULE-5
INVESTMENT
Long Term, Trade, Unquoted, At Cost
ATMA RAM HOUSE INVESTMENT (P) LTD.
1,020 (Previous Year NIL) Equity Shares of Rs.100/-each Fully Paid Up 10723.11 --
Current, Non-Trade, Quoted
INDUSIND BANK
10 (Previous Year NIL) Unsecured, Non Convertible Bond of Rs. 10 Lacs each,
100.00 --
Fully Paid Up
10823.11 --
(Market Value of quoted Investment Rs. 100 Lacs)
2008 2007
SCHEDULE-6
INVENTORIES
(As taken, valued and certified by the Management)
Raw Material 53153.65 31672.93
Finished Goods 29255.78 12597.42
Work-in-Progress 4291.03 449.54
Scrap 657.58 145.2
Stores & Spares 3106.14 2556.31
Material-in-Transit 4453.53 1448.25
94917.71 48869.65
71
2008 2007
SCHEDULE-7
SUNDRY DEBTORS
(Unsecured)
- Outstanding for a period exceeding six months
- Considered good 2200.24 1691.39
- Considered doubtful 357.54 223.23
2557.78 1914.62
Less : Provision made for doubtful debts 357.54 223.23
2200.24 1691.39
Others - Considered good 74632.55 52594.13
76832.79 54285.52
2008 2007
SCHEDULE-8
CASH AND BANK BALANCES
Cash in Hand (including cheques-in-hand Rs. 50.00 lacs Previous Year Rs.
151.85 60.41
NIL)
Balances with Scheduled Banks :
- In Current Accounts 4758.14 707.01
- In Fixed Deposit Accounts (Including Interest Accrued) 6180.80 1880.73
Under Lien amounting to Rs. 960.23 lacs (Previous Year Rs. 1461.63 lacs)
11090.80 2648.15
72
2008 2007
SCHEDULE-9
LOANS AND ADVANCES
(Unsecured, Considered Good)
Advances recoverable in cash or in kind or
for value to be received* 17442.19 8921.95
Inter Corporate Deposits 3775.55 15462.34
Balance with Excise Authorities 11.25 35.75
Balance of Modvat / Cenvat / Service Tax/ Vat 16411.14 16901.11
Mat Recoverable 6750.00 2350.00
Advance Tax (Net) 4.62 --
44394.75 43671.15
2008 2007
SCHEDULE-10
CURRENT LIABILITIES
Sundry Creditors 62677.19 43884.00
Creditors For Capital Goods/Expenditures 9757.71 21192.77
Interest accrued but not due on loans 826.74 415.18
Due to Directors 1.24 0.94
73262.88 65492.89
2008 2007
SCHEDULE-11
PROVISIONS
Proposed Dividend 68.03 61.66
Dividend Tax 11.56 10.48
Retirement Benefits 737.60 577.68
Provision For Tax (Net) -- 31.16
817.19 680.98
73
SCHEDULE-12
SALE OF PRODUCTS & OTHER INCOME
2008 2007
Sales including Excise Duty 3,87,349.07 3,01,734.62
Commission * -- 51.61
3,87,349.07 3,01,786.23
Other Income
Interest (other than investments) ** 689.74 1061.02
Misc. Income 122.57 57.10
Exchange Fluctuation 775.75 --
Profit on Treasury Operations 3432.98 --
Profit on Sale of Investment 14.83 --
Dividend (on Short term, Current and Non Trade Investment ) 3.42 --
Profit on sale of Fixed Assets (Net) -- 3.35
5039.29 1121.47
* Tax Deducted at Source Rs.NIL (Previous Year Rs. 8.69 Lacs)
** Tax Deducted at source Rs.96.26 Lacs (Previous Year Rs.219.58
Lacs)and Interest includes Rs.314.22 Lacs (Previous Year Rs.417.96
Lacs) on Inter CorporateDeposits, Rs.185.06 Lacs (Previous Year
Rs.542.13 Lacs) on Fixed Deposits with banks,Rs. 5.23 Lacs
(Previous Year Rs. NIL) on bonds of Bank.
74
2008 2007
SCHEDULE-13
MANUFACTURING & OTHER EXPENSES
Raw Material Consumed 2,32,913.78 1,83,433.47
Purchase of Goods traded 18515.92 13267.39
Stores Consumed 8342.27 4208.86
Power & Fuel 17366.04 14310.00
Salary, Wages & Bonus 8073.79 5903.23
Contribution to PF & Other Funds 220.60 129.54
Staff Benefits 436.33 251.54
Excise Duty Provided on Stock (Net) 2904.81 -145.41
Rates and Taxes 243.56 182.67
Legal & Professional Charges 298.17 176.01
Insurance 50.92 67.24
Auditors’ Remuneration 34.96 31.95
Travelling & Conveyance 825.85 625.82
Advertisement & Sales Promotion 73.21 51.19
Postage, Telegrams & Telephone 303.04 297.32
Utility & Facility 407.66 433.94
Rebate and Discount 1578.55 1205.50
Selling and Distribution Expenses 9882.42 9239.40
Selling Commission 178.85 277.38
Repair and Maintenance
- Building 16.64 30.04
- Machinery 2569.60 2226.11
- Vehicle 458.10 373.63
Lease Rent 20.11 18.61
Other Administrative Expenses 296.83 259.72
Provision for doubtful debts 134.30 97.97
Loss on Sale of Assets (Net) 27.23 --
Loss of Assets By Fire 9.55 --
Loss on forward / options / swaps -- 936.56
Exchange Fluctuation -- 104.05
Bad Debts -- 33.38
3,06,183.09 2,38,027.11
75
(INCREASE) /DECREASE IN INVENTORIES
Opening Stock
Work-In-Progress 449.54 2328.09
Scrap 145.2 137.6
13192.16 11590.13
Closing Stock
Work-In-Progress 4291.03 449.54
Scrap 657.58 145.20
34204.39 13192.16
Net (Increase)/Decrease in Inventory -21012.23 -1602.03
2,85,170.86 2,36,425.08
Less :
-Transferred to Projects Commissioned /Under Commissioning /Trial
4692.59 9146.31
Run
- Cost of Material Transferred to Project 533.45 803.24
2,79,944.82 2,26,475.53
2008 2007
SCHEDULE-14
INTEREST & FINANCIAL CHARGES
Interest
- On Debentures 335.93 1057.59
- On Term Loans 42413.37 23388.23
- On Others 7251.22 4471.22
Commission & Bank Charges 2277.53 1483.22
Exchange Fluctuation 2752.16 1536.01
55030.21 31936.27
Less :
-Transferred to Projects Commissioned /Under Commissioning /Trial
37726.52 21330.42
Run
17303.69 10605.85
76
9.5 Key Financial Indicators:
2004 2005 2006 2007 2008

Gross Sales (Rs in Crore) 1503.00 2030.00 2419.00 3018.00 3873.00
Export Sales (Rs in Crore) 325.00 543.00 580.00 655.00 756.00
PBDITA (Rs in Crore) 192.00 249.00 347.00 464.00 728.00
Net Profit (Rs in Crore) 71.00 96.00 170.00 201.00 325.00
Cash Profit After Tax
130.00 176.00 256.00 350.00 553.00
(Rs in Crore)
Equity (Rs in Crore) 35.00 81.00 111.00 136.00 136.00
Net Worth (Rs in Crore) 371.00 549.00 780.00 1406.00 2142.00
Gross Block (Rs in Crore) 862.00 1652.00 3118.00 4995.00 6980.00
EBIDTA to Net Sales 14.09 13.30 15.92 17.08 20.93
Debt Equity Ratio 0.99 1.56 2.08 1.91 2.21
Total Debt to Equity 1.23 1.78 2.82 2.81 2.71
TOL/TNW 1.84 2.51 3.51 3.28 3.05
Current Ratio 1.41 1.34 1.36 1.36 1.34
FACR 1.74 1.54 1.46 1.69 1.62
DSCR 1.78 1.69 1.79 1.58 1.68
Interest Coverage Ratio 3.52 3.98 4.79 4.38 4.20
EPS (Rs.) 23.00 13.00 16.00 16.00 24.00

Book Value (Rs.) 106.00 68.00 70.00 103.00 143.00
77
9.5.1 Gross Sales:
Gross Sales (Rs in Crore)

3873
3018
2419
2030
1503
2004
2005
2006
2007
2008
Gross sale is a sale before deducting the excise duty but including the export sale.
As the above diagram is showing that the gross sale has increased from Rs 1503
crore in 2004 to Rs 3873 crore in 2008. From 2004 to 2005, 2005 to 2006, 2006 to
2007 and 2007 to 2008 it increased by 35.06%, 19.16%, 24.76%, and 28.33%
respectively. In average we can say that there is a 26.83% growth in the gross sale
in last four years.
78
9.5.2 Export Sales:
Export Sales (Rs

Rs in CRORES
Lakh)
756
800 655
580
700
543
600
500
325
400
300
200
100
0
2004 2005 2006 2007 2008
As the above diagram is showing that the export sale has increased from Rs 325
2007 and 2007 to 2008 it increased by 67%, 6.81%, 12.93%, and 15.41%
respectively. In average we can say that there is a 25.54% growth in the export sale
in last four years.
79
9.5.3 Net Profit:
As above we have seen that the gross sales and the export sales is increasing year
after year so the net profit is also increasing. As the above diagram is showing that
the Net Profit has increased from Rs 71 crore in 2004 to Rs 325 crore in 2008.
From 2004 to 2005, 2005 to 2006, 2006 to 2007 and 2007 to 2008 it increased by
35.21%, 77.08%, 18.24%, and 61.69% respectively. In average we can say that
there is a 48% growth in the export sale in last four years.
80
9.5.4 Cash Profit after Tax:
Cash Profit after tax (Rs in crore)

553
600
500
350
400
256
300
176
130
200
100
0
2004 2005 2006 2007 2008
As the above diagram is showing that the export sale has increased from Rs 36
2007 and 2007 to 2008 it increased by 261%, 35%, 45.45%, and 36% respectively.
In average we can say that there is a 94% growth in the Cash Profit in last four
years.
81
9.5.5 Net worth:
(Rs in crore)
Net worth includes Shareholders’ equity capital plus reserves and surplus. As the
above diagram is showing that the Net worth has increased from Rs 371 crore in
2004 to Rs 2142 crore in 2008. From 2004 to 2005, 2005 to 2006, 2006 to 2007
and 2007 to 2008 it increased to 48%, 42%, 80%, and 52.34% respectively. In
average we can say that there is an 55.50% growth in the Net worth in last four
years.
82
9.5.6 Debt Equity Ratio:
Debt-Equity ratio reflects relative contributions of creditors and owners to finance

the business.
Debt-Equity ratio = Debt

Equity
The desirable/ ideal proportion of the two components (high or low ratio) varies
from industry to industry.
As the above diagram is showing that the Debt Equity has increased from .99 in
2004 to 2.21 in 2008. From 2004 to 2005, 2005 to 2006, 2007 to 2008 it increased
by 57.57%, 33.33%, 15.70%, respectively and a decrease in the year 2006-2007 by
8.17%. In average we can say that there is a 24.45% growth in the Debt Equity
Ratio in last four years. Ideally the debt equity ratio should be 2:1 that means the
debt should be double of equity. So from the above diagram we can say that the
debt equity ratio is ideal in year 2006 and 2007.
83
9.5.7 Current Ratio:
The current ratio measures the ability of the firm to meet its current liabilities from
the current assets. Higher the current ratio, greater the short-term solvency
(i.e. larger is the amount of rupees available per rupee of liability).As the above
diagram is showing that the export sale has decreased from 1.41 in 2004 to 1.34 in
2008. From 2004 to 2005, there is a decrease of 5%, from 2005 to 2006 there is an
increase of 1.50%, from 2006 to 2007 there is no change and from 2007 to 2008
there is a decrease of 1.5%. In average we can say that there is a decrease of
1.25%%.
84
9.5.8 Interest Coverage Ratio:
Interest Coverage ratio = Earnings Before Interest and Taxes

Interest
Higher the interest coverage ratio better is the firm’s ability to meet its interest
burden. The lenders use this ratio to assess debt servicing capacity of a firm.
As the above diagram is showing that the Interest coverage ratio has increased
from 3.52 in 2004 to 4.2 in 2008. From 2004 to 2005, 2005 to 2006 there is an
increase of 13% and 20.35% respectively, from 2006 to 2007 and from 2007 to
2008 there is a decrease of 8% and 4% respectively In average we can say that
there is a 5.33% growth in the Interest Coverage Ratio in last four years.
85
9.5.9 Debt Service Coverage Ratio:
Debt Service Coverage Ratio (DSCR) is a more comprehensive and apt to compute
debt service capacity of a firm. Financial institutions calculate the average DSCR
for the period during which the term loan for the project is repayable. The Debt
Service Coverage Ratio is defined as follows:
Profit after tax+ Depreciation+ other Non cash Items+ Interest on term loan
Interest on term loan+ repayment of term loan
In the above diagram we can see that there is an Increase/ Decrease in the debt
service coverage ratio. From 2004 to 2005 it has decreased by 0.09 then it has
increased by 0.1 in 2006. Again it Ha decreased by 0.21and at the year of 2008 it
has increased by 0.1.
86
9.5.10 Earning per Share (EPS):
24
23
25
20
16 16
13
15
10
0
2004 2005 2006 2007 2008
Earnings per Share measures the profit available to the equity shareholders per
share, that is, the amount that they can get on every share held. It is calculated by
dividing the profits available to the shareholders by number of outstanding shares.
The profits available to the ordinary shareholders are arrived at by net profits after
taxes and preference dividend. It indicates the value of equity in the market.
EPS = Net profit .

Number of Ordinary Shares Outs ding
As the above diagram is showing that the EPS is 24 in the year 2004 which reduces
to 13 in the year 2005 again it rises to 16 in the year 2006 which remains in
stagnant in the year 2007 and it increases to 24 in the year 2008.
87
10. Steel Manufacturing:
Since I have got the opportunity to do my SIP in a steel and power generating
company so I manage to accumulate some information regarding the steel
manufacturing process after visiting the steel plant. Now before discussing the
process of steel production let us discuss some other aspect of the steel.
10.1 History of Steel Production:
The exact date at which people discovered the technique of smelting iron ore to
produce usable metal is not known. The earliest iron implements discovered by
archaeologists in Egypt date from about 3000 BC, and iron ornaments were used
even earlier; the comparatively advanced technique of hardening iron weapons by
heat treatment was known to the Greeks about 1000 BC.
The alloys produced by early iron workers and, indeed, all the iron alloys made
until about the 14th century AD would be classified today as wrought iron. They
were made by heating a mass of iron ore and charcoal in a forge or furnace having
a forced draught. Under this treatment the ore was reduced to a spongy mass of
metallic iron filled with a slag composed of metallic impurities and charcoal ash.
This sponge of iron was removed from the furnace while still incandescent and
beaten with heavy sledgehammers to drive out the slag and to weld and consolidate
the iron. The iron produced under these conditions usually contained about 3 per
cent of slag particles and 0.1 per cent of other impurities. Occasionally this
technique of iron making produced, by accident, a true steel rather than wrought
iron. Ironworkers learned to make steel by heating wrought iron and charcoal in
clay boxes for a period of several days. By this process the iron absorbed enough
carbon to become a true steel.
After the 12th century the furnaces used in smelting were increased in size, and
increased draught was used to force the combustion gases through the “charge”,
the mixture of raw materials. In these larger furnaces the iron ore in the upper part
of the furnace was first reduced to metallic iron and then took on more carbon as a
result of the gases forced through it by the blast. The product of these furnaces was
pig iron, an alloy that melts at a lower temperature than steel or wrought iron. Pig
iron (so called because it was usually cast in stubby blocks fed from a central
88
runner, reminiscent of piglets suckling from a sow) was then further refined
to make wrought iron.
Modern steel making employs blast furnaces that are refinements of the furnaces
used by the old ironworkers, but which are much taller, use superheated air, and
operate at much higher pressures, yielding a hundredfold increase in production.
The process of refining molten iron with blasts of air was accomplished by the
British inventor Henry Bessemer, who developed the Bessemer furnace, or
converter, in 1855. Since the 1960s, several so-called mini mills have been
producing steel from scrap metal in electric furnaces. The giant steel mills remain
essential for the production of steel from iron ore
Bessemer Steel Production

In order to convert molten pig iron (crude iron) into steel with a Bessemer furnace, air must be blown through it to
burn away impurities. This engraving of a steel factory illustrates the process developed by Sir Henry Bessemer in
1855 and used until the 1950s.
89
10.2 Raw Materials for Steel Production:
The ores used in making iron and steel are iron oxides, which are compounds of
iron and oxygen. The major iron oxide ores are hematite, which is the most
plentiful, limonite, also called brown ore, taconite, and magnetite, a black ore.
Magnetite is named for its magnetic property and has the highest iron content.
Taconite, named for the Taconic Mountains in the northeastern United States, is a
low-grade, but important ore, which contains both magnetite and hematite.
Iron making furnaces require at least a 50% iron content ore for efficient operation.
Also, the cost of shipping iron ores from the mine to the smelter can be greatly
reduced if the unwanted rock and other impurities can be removed prior to
shipment. This requires that the ores undergo several processes called
"beneficiation." These processes include crushing, screening, tumbling, floatation,
and magnetic separation. The refined ore is enriched to over 60% iron by these
processes and is often formed into pellets before shipping. Taconite ore powder,
after beneficiation, is mixed with coal dust and a binder and rolled into small balls
in a drum pelletizer where it is then baked to hardness. About two tons of
unwanted material is removed for each ton of taconite pellets shipped.
The three raw materials used in making pig iron (which is the raw material needed
to make steel) are the processed iron ore, coke (residue left after heating coal in the
absence of air, generally containing up to 90% carbon) and limestone (CaCO3) or
burnt lime (CaO), which are added to the blast furnace at intervals, making the
process continuous. The limestone or burnt lime is used as a fluxing material that
forms a slag on top of the liquid metal. This has an oxidizing effect on the liquid
metal underneath which helps to remove impurities. Approximately two tons of
ore, one ton of coke, and a half ton of limestone are required to produce one ton of
iron.
There are several basic elements which can be found in all commercial steels.
Carbon is a very important element in steel since it allows the steel to be hardened
by heat treatment. Only a small amount of carbon is needed to produce steel: up to
0.25% for low carbon steel, 0.25-0.50% for medium carbon steel, and 0.50-1.25%
for high carbon steel. Steel can contain up to 2% carbon, but over that amount it is
considered to be cast iron, in which the excess carbon forms graphite. The metal
90
manganese is used in small amounts (0.03-1.0%) to remove unwanted
oxygen and to control sulfur. Sulfur is difficult to remove from steel and the form
it takes in steel (iron sulfide, FeS) allows the steel to become brittle, or hot-short,
when forged or rolled at elevated temperatures. Sulfur content in commercial steels
is usually kept below 0.05%. A small quantity of phosphorus (usually below
0.04%) is present, which tends to dissolve in the iron, slightly increasing the
strength and hardness. Phosphorus in larger quantities reduces the ductility or
formability of steel and can cause the material to crack when cold worked in a
rolling mill, making it cold-short. Silicon is another element present in steel,
usually between 0.5-0.3%. The silicon dissolves in the iron and increases the
strength and toughness of the steel without greatly reducing ductility. The silicon
also deoxidizes the molten steel through the formation of silicon dioxide (SiO2),
which makes for stronger, less porous castings. Another element that plays an
important part in the processing of steel is oxygen. Some large steel mills have
installed their own oxygen plants, which are located near basic oxygen furnaces.
Oxygen injected into the mix or furnace "charge" improves and speeds up steel
production.
Steel can be given many different and useful properties by alloying the iron with
other metals such as chromium, molybdenum, nickel, aluminum, cobalt, tungsten,
vanadium, and titanium, and with nonmetals such as boron and silicon.
91
10.3 Classification of Steel:
Steels are grouped into five main classifications.
i. Carbon Steels
More than 90 per cent of all steels are carbon steels. They contain varying amounts
of carbon. Steels to make sheet for car bodies, domestic appliances, cans, and so on
have very low carbon contents, typically 0.04 per cent or less. Structural steels and
steels for engineering applications have carbon levels up to about 0.8 per cent,
while very hard steels for applications such as hand-working tools may have
carbon contents up to 1.4 per cent. Other elements present are: manganese at not
more than 1.65 per cent, 0.60 per cent silicon, and small amounts of sulphur and
phosphorus. In steels made from 100 per cent scrap there are also significant levels
of copper and tin, which are detrimental to their properties. Machines, car bodies,
most structural steel for buildings, ship hulls, bedsprings, and hairgrips are among
the products made of carbon steels.
ii. Alloy Steels

These steels have a specified composition, and contain, in addition to carbon,
specific quantities of alloy additions such as vanadium, molybdenum, or other
elements, as well as larger amounts of manganese, silicon, and copper than do the
regular carbon steels. Vehicle gears and axles, roller skates, and carving knives are
some of the many things that are made of alloy steels.
iii. High-Strength Low-Alloy Steels

These, called HSLA steels, are the newest of the five chief families of steels. They
cost less than the regular alloy steels because they contain only small amounts of
the expensive alloying elements. They have been specially processed, however, to
have much more strength than carbon steels of the same weight. For example,
railway freight wagons made of HSLA steels can carry larger loads because their
walls are thinner than would be necessary with carbon steel of equal strength; also,
because an HSLA wagon is lighter than an ordinary one, it is less of a load for the
92
engine to pull. Numerous buildings are now being constructed with
frameworks of HSLA steels. Girders can be made thinner without sacrificing their
strength, so that additional interior space is left in the building.
iv. Stainless Steels

Stainless steels contain chromium, or a combination of chromium and nickel, as
well as significant amounts of other alloy additions such as molybdenum. The
chromium content is generally greater than 12 per cent, and it is this alloy element
that chiefly keeps the steel bright and rust resistant in spite of moisture or the
action of corrosive acids and gases. The presence of nickel further improves
corrosion resistance, as does molybdenum. When the nickel content is above about
8 per cent, the crystal structure of the steel changes, imparting properties that make
it suitable for very-low-temperature (cryogenic) applications. Also, nickel-
containing steels are non-ferromagnetic, which is important for such applications
as components for geophysical surveying equipment and full-body X-ray scanners
where magnetic steels would distort the X-ray paths. Some stainless steels are very
hard; some have unusual strength and will retain that strength for long periods at
extremely high or low temperatures. Because of their lustrous surfaces, architects
often use them for decorative purposes. Stainless steels are used for the pipes and
tanks of petroleum refineries and chemical plants, for jet planes, and for space
capsules. Surgical instruments and equipment are made from these steels, and they
are also used to patch or replace broken bones because the steels can withstand the
action of body fluids. In kitchens and in workplaces where food is prepared,
handling equipment is often made of stainless steel because it does not taint the
food and can easily be cleaned.
v. Tool Steels
These steels are made into many types of tools for use in powered machinery such
as drills, lathes, milling machines, and metal-cutting saws, where friction during
use causes the temperature of the tool to rise as high as 500° C (930° F). They
contain tungsten, molybdenum, and other alloying elements that give them extra
strength, hardness, and resistance to wear at high temperatures.
93
10.4 Heat Treatment of Steel:
The basic process of hardening steel by heat treatment consists of heating the metal
to a temperature a little above that at which all the ferrite is transformed into
austenite, usually about 760° to 870° C (1400° to 1600° F), the precise value
depending on the carbon content of the steel. The steel is then held for a time to
take all of the cementite into solution, then rapidly cooled (quenched) in water or
oil. Such hardening treatments, which form martensite, set up large internal
stresses in the metal, and these are relieved by tempering, which consists of
reheating the steel to a temperature below that at which austenite forms. Tempering
results in a decrease in hardness and strength and an increase in ductility and
toughness.
The primary purpose of the heat-treating process is to control the amount, size,
shape, and distribution of the cementite particles in the ferrite, which in turn
determines the physical properties of the steel.
Many variations of the basic process are practised. Metallurgists have discovered
that the change from austenite to martensite occurs during the latter part of the
cooling period and that this change is accompanied by a change in volume that
may crack the metal if the cooling is too swift. Three comparatively new processes
have been developed to avoid cracking. In time-quenching the steel is withdrawn
from the quenching bath when it has reached the temperature at which the
martensite begins to form, and is then cooled slowly in air. In martempering the
steel is withdrawn from the quench at the same point, and is then placed in a
constant-temperature bath until it attains a uniform temperature throughout its
cross-section. The steel is then allowed to cool in air through the temperature range
of martensite formation, which for most steels is the range from about 288° C
(550° F) to room temperature. In austempering the steel is quenched in a bath of
metal or salt maintained at the constant temperature at which the desired structural
change occurs, and is held in this bath until the change is complete, before being
subjected to the final cooling.
Other methods of heat-treating steel to harden it are used. In case hardening a

finished piece of steel is given an extremely hard surface by heating it with carbon
or nitrogen compounds. These compounds react with the steel, either raising the
carbon content or forming nitrides in its surface layer. In carburizing the piece is
heated in a fine carbon-rich powder containing an activator or in carbonaceous
gases such as methane or carbon monoxide. Cyaniding consists of hardening steel
94
in a bath of molten cyanide salt to form both carbides and nitrides, though
this method is less common today because of the expense involved in safely
disposing of the used salts. In nitriding steels of special composition are hardened
by heating them in ammonia gas, or in a plasma produced by striking an arc in the
presence of argon and a nitriding gas, to form alloy nitrides.
95
10.5 Process of Steel Production:
96
In the above picture I am trying to show how exactly the steel is being
produced and how from the alloy steel different finished product is being made. At
first iron ore and lime stone are put into the blast furnace and get it melt after
passing through the converter it goes to the Ladle. On the other hand pig iron,
sponge iron or scrap is put into the Electronic Arc Furnace to get it melt. After
getting melt the entire liquid thing goes to the ladle furnace and finally goes to the
Ladle. Then the entire liquid that has been accumulated in the ladle poured into the
‘continuous casting’ from where the liquid stuff is converted into the Billets. the
billets again passes through the reheating furnace, rolling mills, finishing units and
from where it can be put into different items e.g., wire rod, nails, bar and rods etc.
10.6 World production of Steel:

World production of crude steel in March 2009 fell by 23.5% to 91.7 million tones,
although this was a higher monthly total than the previous 4 months. The total of
the 3 months to date was 263.7 million tones, 22.8% lower than the January to
March period in 2008. However, excluding China, the total for the quarter was
37% less than Q1 2008, with the monthly total down 37.6%. All regions show a
fall in crude steel production in both March and the year to date.
Crude steel production in the European Union 27 fell by 45.3% in March to 10.3
million tones compared to March 2008, and was 43.8% down in the quarter at 30.2
million tones. German steel production was 50% down in March and 39.4% down
in the three months to 7.3 million tones. Italian production decreased by 42.7% in
March, and by 40.9% in the quarter to 4.9 million tones. French steel production
dropped by 36.7% in March, bringing the year to date total down 39.7% to 2.9
million tones. Spanish steel production decreased by 41.2% in March, and by
42.7% in the three months to 2.8 million tones. UK steel production showed a drop
of 43% in March, and 43.7% in the year to date to 2.1 million tones. Romania
showed the largest fall at 67.8% in the month and 66.3% in the quarter; with
Belgian production down 60.2% in the month, and 72% in the quarter.
Outside the European Union, Turkish production decreased by 24.5% in March,

and by 20.6% in the three months to 5.5 million tones. First quarter production in
Switzerland fell 30.3% to 256 thousand tones, and in Serbia it fell by 61% to 193
thousand tones compared to Q1 2008.
According to ACEA, the European vehicle manufacturers association, car

97
registrations in the 28 European countries monitored fell by 9% in March,
and by 17.2% in the first three months of 2009 compared to 2008. In Germany,
presumably due to the car scrapping incentive scheme, there was an increase in
registrations of 40% in March, pushing the three month totals up 18% to 868
thousand units. Italian registrations were flat in March, with the quarter total down
by 19% to 539 thousand units. French registrations showed an increase of 8% in
the month, although the year to date total was down by 3.9% to 505 thousand units.
UK registrations dropped by 30.5% in March, bringing the year to date total down
29.7% to 480 thousand units. In Spain registrations showed a large drop of 38.7%
in March, bringing the quarter total down 43% to 198 thousand units. In Poland,
the largest of the East European countries, registrations rose by 2.5% in March and
by 1.3% in the three months to 88 thousand units. However, Romania's three
month total was down 60.7%.
In the former USSR, Russia showed a decrease in steel production of 30.9% in the
month and 33% in the quarter to 12.9 million tones. In the Ukraine production fell
by 38.5% in March, and by 37.9% in the quarter to 6.8 million tones. Production in
Kazakhstan showed a 22.6% drop in March, with the three months total down by
20% to 865 thousand tones. While exports from both Russia and Ukraine in the
first two months of 2009 were down, 19.2% for Russia and 24.7% for the Ukraine,
monthly exports have actually picked up from the low point in November 2008.
Semis accounted for just under half of Russia's exports in 2009, and just over half
of Ukraine's exports.
Crude steel production in the USA was just 4.1 million tones in March, a decrease
of 52.7%, bringing the first quarter total up 52.5% to 12.1 million tones. Mexican
production fell by 51.2% in the month, with the three months total down 49.1% to
2.4 million tones. Canadian steel production dropped by 55% in March and by
55.4% in the year to date to 1.9 million tones. US imports of steel in February
dropped to their lowest level since October 1995 at just under 1.5 million tones.
Seamless and welded tubes in particular showed a sharp drop compared to recent
months. Imports of semis have also dropped off markedly. US exports have also
fallen significantly, down 34% to 613 thousand tones compared to February 2008,
and the lowest monthly export total since September 2004. 74% of exports went to
Canada and Mexico with a further 10% going to other Central and South American
countries, which is a similar percentage as in previous years. South America is
dominated by Brazil where steel production decreased by 41.5% in March with the
year to date down 42% at 5.0 million tones. In Argentina production was 49.5%
down in the month bringing the year to date to 798 thousand tones, a fall of 41.7%
on the first quarter of 2008. Venezuelan steel production, on the other hand,
98
actually rose by 63% in March, and by 19.6% in the three months to over 1.1
million tones.
In Africa, the South African three month total fell by 26.9% to 1.6 million tones,
while the Egyptian total fell 26.2% to 1.3 million tones. In the Middle East Iranian
steel production rose by 14% in March, bringing the first quarter total up 17.9% to
2.9 million tones, while Saudi Arabian steel production decreased by 5.3% in
March, bringing the three months total down 26.5% to 938 thousand tones.
The five major Asian countries for which monthly crude steel production data are
available showed increased production in both March and the year to date except
for China. Chinese steel production was very slightly down in March at 45.1
million tones, while the three months total rose by 1.4% to 127.4 million tones,
48% of the world total in 2009. Japan's production fell by 46.7% in March, with
first quarter production down 42.9% to 17.6 million tones. Indian steel production
in March was 7.5% lower, with the three months total down 7.9% to 13.2 million
tones. Production in South Korea decreased by 21.2% in March, with the year to
date total down 22.9% to 10.5 million tones. Taiwanese production fell by 21% in
the month, bringing the first quarter total to 4.2 million tones, a drop of 23.2% on
January to March 2008.
Chinese exports of steel actually rose slightly in March to 1.6 million tones,
although this was still below the January total of 1.9 million tones. Imports,
however, jumped to over 1.7 million tones, the highest monthly total since March
2006, and making China's balance of trade negative for the first time since
November 2005. The large rise in imports was due in part to the jump in the
imports of semis, 465 thousand tones, which was almost double the amount
imported in the whole of 2008. Some 900 thousand tones of semis were imported
in the first three months of 2009 of which 91% were low carbon billets and slabs.
They came primarily from Russia, Taiwan, South Korea and Mexico, which
together accounted for 80% of the total. Most Chinese imports rose in March
compared to February, with CR at 318 thousand tones and HR wide coil at 287
thousand tones.
Japanese exports in March 2009 jumped by 38% to 2.5 million tones compared to
February 2009, although they were still a third down on the same month in 2008.
99
11 Conclusion:
Flowchart for Materials Procurement and Movement
Indent Check in Not there Request to Indenters copy to

Raised stores in stores? purchase Purchase Dptmt
Security Materials reach Suppliers Supply Purchase Order

check at the to the company Materials issued by
Gate gate Purchase Dptmt
Weigh Fabrication Weigh Stores

Bridge1 & 2 Area Bridge3 & 4 Documentation
Laboratory
Bill Clearance of Materials Sent
testing of
supplier by Bill To Store
materials
Passing Dptmt
Bill sent to Voucher prepared

Accounts Dptmt by Accounts Dptmt
Accounting Entries
made by Accounts
Dptmt
Payment to 100
Supplier
In the above figure we can see the whole process of material procurement by the
company and how these things are being done by the individual departments of the
organization. Firstly a material is procured on demand of the indenter. So the
Indent is being raised by the Indenter in order to purchase the material. After the
indent is being raised it is not that the material will be purchased immediately. It
will be checked in the store whether that material is available in the store or not. If
it is available in the store then the material will be issued from the store if not
available in the store then further proceedings will be done. The purchase
department will send an enquiry to the suppliers through mail in order to send their
Quotations of the material. The suppliers send the Quotations either through mail
or post. Based on the Quotations send by the suppliers a Comparative statement is
been prepared. The supplier who quotes the least price gets the order of material to
supply. So after deciding which supplier to get the order a Purchase Order is been
issued by the purchase department to the supplier.
Now after the purchase order is been issued it is time for the suppliers to
supply the materials. When the materials reach the Company a security check is
been done at the gate and after that the material is allowed to enter inside the
factory. Then as the material loaded truck enters there are two Weigh Bridges
where weight of the material is measured. After that the truck reaches the
fabrication area to unload the materials. While returning from the unloading point
again the empty truck is being weighed by another two Weigh Bridges.
After the materials are supplied by the supplier it is not used immediately. A
sample of material is been sent to the Laboratory in order to have a Lab Test. After
testing the material it is been sent to the store. The Bill Clearance is been done by
the Bill passing department and the bill is been sent to the Accounts department
where the vouchers are being prepared and the accounting entries are made. After
the entries are made the Accounts Department makes payment to the supplier.
101
12 Bibliography:
www.bpsl.net
www.scribd.com
Information collected from the representative of individual departments.
Microsoft Encarta Encyclopedia.
www.nseindia.com (capital market module)
102

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SUMMER INTERNSHIP PROGRAM – 2009

“Standard operating procedure of material

Nabin Kumar Shaw

In this project I have studied the following.

1. How under mentioned departments works:

of material procurement, movement, accounting, Auditing and their financial

implication’’ submitted to Accman Institute of Management, Greater Noida is

Management, is a bonafide `work carried out by me at ‘M/S Bhushan Power &

Nabin Kumar Shaw Date: 4th July, 2009

I would like to give credit for my successful completion of project to

I sincerely thank for the help provided by my institute “Accman Institute of

Finally I am thankful to other members of my Organization and friends who

A leading manufacturer of flat, rounds and long products including

Successfully commissioned 1.5 Million TPA Greenfield Steel and

A rock-solid foundation combined with continuous upgradation and

The integrated power and steel project at Orissa is a landmark in the

• Captive limestone reduces cost further.

Their Mission is to achieve clear identity and leadership globally in Steel

Their revolution in Steel production has helped us to carve a niche

Quality - To be the best in quality. We aim and achieve excellence.

1985 - Backward Integration Project for Steel Melting facilities.

1998 - Commissioning of Precision Pipe Project at Chandigarh.

2002 - Addition of narrow width Cold Rolling facilities at Kolkata.

2004 - Further expansion of Cold Rolling facilities at Kolkata.

2005 - Commissioning of Orissa Project consisting of 4 DRI Kilns, Steel Making

2007 - Commissioning of further expansion of Orissa Project consisting of HR

2008 - Implementation of further expansion in Orissa Project in progress.

Sh. Sanjay Singal

It is often said that ‘to accomplish great things, we

It has already given us a competitive edge and an

Let us together keep up the spirit!

Here I have mainly checked the system like:

Format of INWARD STORE (COAL):

Format of INWARD STORE (Miscellaneous):

Format of MATERIALS OUTWARD:

Challan Way Bill Transport bill OGP

Book entry at the gate

INWARD STORE MRN

8.2.1 Types of Purchase:

Head office Plant

Iron ore Project Materials

Quotations from Suppliers

Purchase order made 33

• From which department the requisition came?

Daily Report of stock

Checking the Minimum

Quotations from Suppliers

Purchase Order made

[A photo copy of original “daily stock statement’’ of SMS- I & SMS- II as on

Chhattisgarh Electricity Co. Ltd – Raipur

i. SMS Demag, Germany

Aluminum Bar/ Ingots

MATERIAL RECEIPT NOTE

SL. Descp of unit PO Ch Reqd Rejd Sh Accpt Rate Amt Remarks

BHUSHAN POWER & STEEL LIMITED Format No:

RAW MATERIAL ANALYSIS REPORT

Chemical composition (Specification)

Office use only

Inspected by Dept Head General Manager

8.4.1 Basic concept of Auditing:

There are so many types of auditing, for example

An important type of audit is the financial audit. It is designed to determine