STUDENT’S DECLARATION

I hereby solemnly affirm, declare and state that organization

study conducted at “BALSORE ALLOYS” was done by me with due
diligence and sincerity and this report based on that study is a
bonafied work by me and submitted to ANNAMALAI UNIVERSITY
through RAMAIAH INSTITUTE OF MANAGEMENT SCIENCES,
Bangalore under the guidance and supervision of RADHA MAM,
Faculty RIMS is my original work and not submitted for the award of
any other degree, diploma, fellowship or other similar title or prizes.

PLACE: BANGALORE Signature:

DATE: ENROLLMENT
NOAA1237
 CERTIFICATE FROM THE GUIDE
This is to certify that the organization study report undertaken
at “BALASORE ALLOYS” by Student’s Name,Enrollment No:-
AA1237 carried out in partial fulfillment for the award of degree of
MBA (Industry Integrated) programme of Annamalai University at
RIMS, Bangalore under my guidance and direction. This study report
is an original work and not submitted earlier to any
University/Institute.

PLACE: BANGALORE Signature:

DATE: Guide Name
CONTENTS
 CHAPTER -I
COMPANY POFILE
Balasore Alloys Ltd, formerly known as Ispat Alloys (IAL), a part
of Ispat Group was incorporated on 31 May '84 as a public limited
company and engaged in the business of manufacturing silicon and
ferro alloys. In Dec.'87, it came out with a public issue of FCDs,
aggregating Rs 99.99 cr to finance its expansion and to strengthen
long-term resources. Group companies include P T Ispat Indo,
Indonesia, Caribbean Ispat, Nippon Denro Ispat and Ispat Profiles.
The company has entered into collaborations with Nippon Denro
Manufacturing Company, Japan; Danieli, Italy; Elkem, Norway; and
Outokumpu, Finland. The company has commissioned two new
furnaces and two imported D G sets. It has set up a Rs 132-cr chrome
ore pellet plant at Orissa, a Rs 100-cr project in Tripura and a Rs 624-
cr gas-based sponge iron project in Maharashtra. The company is
setting up a 1-mtpa hot-strip mill in Lysva, Russia, in a joint venture
with Lysva Steel Works (cost : $ 700 mln). It is also engaged in
shipping, looked after by Garuda Carriers and Shipping. It is investing
$ 5 mln to acquire 41% equity in a Mexican company, Compania
Minera Autlan. IAL has received various awards such as the EEPC
export award, the HRD and Productivity Award for 1993, awarded by
CII. The company has also received the IS 14002/ISO 9002
accreditation from the Bureau of Indian Standards thus establishing
its commitments to quality and technological excellence. The
company has also increased its captive power generation
capacity by installing two new imported DG Set of 10.5 MW each also
Company placed order another DG Set of 11.54 MW from MAN B&W.
at its works at Balgopalpur, Orissa. Govt. of Orissa has sanctioned for
allocation of 50% area of Chorme Ore Mines in Sukinda Valley.
Company has plan to start mining in shortest possible period which
will alow the company to source its raw material at comparatively
cheaper price and the same shall improve the profitability of
Company. During the year 1999-2000, the Company implemented
installation of most modern Jigging machine resulting in higher metal
recovery and yield. In the year 2000-01, the company has successfully
commenced chrome mining operations and also taking steps for
beneficiation and conversion of chrome ore.

Chairman's Speech
Dear Shareholder,

I feel honored and privileged to be at the helm of affairs at a

time when your Company shall declare dividend after a long pause of
about 14 years. It is only because of your unparalleled dedication and
support that your Company could bravely combat severe financial
crunch, stubbornly endure the worst economic meltdown and
recession, and successfully negotiate turbulent waters rocking the
Steel sector in particular and Ferro chrome Industry in general.
The global economy continued to tread on the recovery path
robustly during the final months of 2010 and into early 2011,
when the earthquake and tsunami in Japan and political turmoil in
Middle east and North Africa modestly slowed down the global
industrial production and trade. According to World Bank, global
GDP is projected to slow to 3.2 % in 2011 from 3.8% in 2010. It is
expected to stabilize at 3.6% in 2012 and 2013.
Interestingly,outshining the large economies, the emerging and
developing economies have grown at 7.3% in 2010 and their growth
is expected to firm at 6.2% in 2012. India, one of the leading
developing economy, registered an impressive growth rate of about
8%. While serious concerns on account of surge in headline inflation,
firming interest rates and slow down in manufacturing sector
because of international developments shall impede the future
growth, nonetheless it is projected to be in the range of 7.4% and
8.5% in 2011-12.

The Stainless Steel industry witnessed a significant recovery in

the year 2010 after the Global Meltdown of 2008-09. China remained
the largest as well as the fastest growing producer of Stainless Steel
with encouraging signs of recovery across the global Stainless Steel
Market and a corresponding positive impact was witnessed on the
Ferro Alloys Industry during the first half of the financial year under
review. However, the subsequent increase in Ferro Alloys production
by the domestic and international manufacturers, coupled with
another slowdown in Stainless Steel output saturated the market
towards the later part of the year 2010-11. Braving all challenges,
your Company was able to operate at full capacity while maintaining
finished goods stock level of 2 to 4 days.

Your Company worked on a sustainable business model with

focus on operational excellence, cost optimization and market
penetration which helped us to improve the top as well as the bottom
line performance during the year 2010-11. The steep increase in cost
of power tariff and raw materials did not deter your Company from
continuing with full scale operation and ensuring value addition for
shareholders. Your Company also took proactive measures for
maintaining excellent Supplier and Customer Relationship which
helped in optimizing input cost as well as penetration into niche
markets. This also helped us in generating additional revenue during
the year through trading activity.

However, several challenges like steep hike in Power and

Water Tariff and restriction on their usage, Increase in Raw Material
Cost and Fluctuating Ferro Alloys Market have to be surmounted to
remain competitive and profitable. The business environment and
policy decisions relating to the Mining Sector is becoming
increasingly complex and unpredictable. However, your Company is
taking necessary steps to insulate itself against these challenges
and successfully overcome the hurdles.

It is my privilege to inform the esteemed shareholders that the

profitability of your Company has improved significantly as compared
to the previous year. During the financial year 2010-11, we achieved
PBT of Rs. 4079 lacs and PAT of Rs. 2689 lacs as against the previous
year''s PBT of Rs. 2085 lacs and PAT of Rs. 1255 lacs. Despite several
adverse developments like steep increase in power tariff and
escalating raw material prices, your Company has achieved sound
financial performance with an increase of 31% in the Turnover
(excluding Trading) and increase of 114% in the Profit after Tax. The
coming year also appears encouraging as stainless steel production
and world consumption of ferrochrome is anticipated to grow by over
8% with corresponding firming up of prices, though certain
challenges are expected in global economy.

While taking care of the core business activities, your Company

remains committed to meet the aspirations of all stakeholders
including the employees and the people living in the nearby areas. I
would like to place on record my acknowledgement and appreciation
to the contribution made by the highly committed and motivated
workforce which has enabled us to meet the different challenges and
emerge victorious against all odds. The dedicated team of
professionals in your Company also takes pride in joining hands to
work for the betterment of people in the plant periphery. Your
Company is conscious of its Corporate Social Responsibilities and
has contributed significantly in the areas of Healthcare, Education
and Infrastructure Development in the region.

I extend my sincere appreciation to my colleagues on the

Board for their wise and matured counsel for the smooth functioning
of the Company. I also take this opportunity to thank all our
stakeholders, customers, business associates, bankers, employees,
vendors and shareholders for their unflinching support and trust
reposed upon us which has helped us to achieve new milestones. I am
sure that the Company will continue to receive similar support, trust
and understanding from all of you in the years to come so that we can
march ahead in our journey of excellence.

Thanking you,

R K Jena
To be the trusted Ferro
alloys supplier globally
and to add lasting value
addition for all its stake
holders.

Balasore Alloys, formerly

Ispat Alloys Limited is
part of the renowned
Ispat group of
Companies...............
Our Products

Ferro Chrome Silico Manganese

Production unit of Balasore Alloys Limited at Balgopalpur in

Odisha’s Balasore district. (Express photo | Hemnat Rout)

All eyes are now on the Grievance Redressal Forum (GRF) which
would hear the much hyped electricity dues case of Balasore Alloys
Limited (BAL) on Thursday.

The ferro-alloy company has an outstanding amount of Rs

167,77,40,435 towards the electricity dues. Following a directive of
Odisha High Court, BAL had approached the forum to raise its
disagreements with the power distcom Nesco, which had served a
disconnection notice against the non-payment of power dues on
August 30.
 Disposing of a petition filed by BAL against the notice, a
division bench of judges comprising Justice B P Das and Justice B
K Nayak on September 13 had directed the company to approach the
GRF. Earlier, the court had dismissed a petition of BAL filed against
Nesco over the power dues citing it not maintainable.

While BAL is allegedly one of the major defaulters of power dues

in the State, the Nesco and local consumers pin hope for an impartial
judgement. The consumers believe if the amount is recovered, it
would ultimately result in slashing down the recent power tariff,
which is hitting them under the belt.

President of Nesco Bidyut Grahak Sangha (NBGS) Jayanta Das

wondered while Odisha Electricity Regulatory Commission (OERC)
had laid down provisions for disconnection of electricity for the
defaulting consumers without any pre-notice, why the same was not
followed for BAL.

“Rs 167 Cr is not a small amount. It is pubic money. If collected it

would help reducing the power tariff and upgrading the existing
infrastructure. When poor consumers face disconnection for not
paying the current month’s bill, why was BAL shown favouritism even
if it continued to keep the arrears pending for years together?” he
pointed out.
 Another consumer Srinibas Pradhan said the arrear amount
if waived would be an ultimate burden on the domestic consumers
who are often asked to pay the bills that are hiked in a regular
interval. Several other consumers have threatened not to pay their
bills henceforth and take to the streets if the profit making ferro-alloy
company was let off.

Earlier former Minister Maheswar Bag who is also a nominated

member of OERC for the Consumers Grievance and Redressal Forum
also had demanded the government to act immediately to recover the
amount.

BAL Director (Operations) B N Panda said as per their

calculation the company did not have any dues. “It is all imaginary
and made up. Let the forum decides it,” he said.

It is to be noted that while the Nesco authorities were reportedly

in the process of waiving nearly Rs 133 Cr of the total outstanding
amount, they were forced to issue disconnection notice following an
expose in ‘The New Indian Express’ that was widely discussed in the
Assembly and the Energy Minister had assured the House to recover
the amount.
 MANAGEMENT DISCUSSIONS

ECONOMIC OVERVIEW

During the Financial Year 2011-12 the Global Economy

continued to remain slow andstagnant primarily due to concerns and
crisis prevailing in the EURO zone.

According to the International Monetary Fund (IMF) Global

growth is projected to dropfrom about 4 percent in 2011 to about 3.5
percent in 2012 because of weak activity duringthe second half of
2011 and the first half of 2012. World Real GDP growth in the
emergingand developing economies is projected to slow from 6.25
percent in 2011 to 5.75 percent in2012 but then to reaccelerate to 6
percent in 2013, helped by easier macroeconomicpolicies and
strengthening foreign demand.

The GDP growth in US economy continues to show signs of

modest recovery. Large scaleliquidity infusions by the European
Central Bank have significantly reduced the stress inglobal financial
markets. However, a sustainable solution to the EURO area debt
problemsis yet to emerge.
 As per the Monetary Policy Statement 2012-13 issued by the
RBI on 17th April, 2012states that during the year 2011, the Indian
economy faced major challenges with Fuelprice hikes, a steep
depreciation in the Indian rupee and deceleration in
industrialgrowth.

During the year 2011-12, the Indian economy is estimated to

have grown by 6.9 percent.While the growth in the agricultural and
service sector continuing to perform well,India's slowdown can be
attributed almost entirely to weakening industrial growth.
Themanufacturing sector grew by 2.7 per cent and 0.4 per cent in the
second and thirdquarters of 2011-12. Inflation as measured by the
wholesale price index (WPI) was highduring most of the current fiscal
year, though by the year's end there was a clearslowdown.

However, for the Indian economy, the outlook for growth and
price stability at thisjuncture looks more promising. There are signs
from some high frequency indicators thatthe weakness in economic
activity has bottomed out and a gradual upswing is imminent.
INDUSTRY STRUCTURE AND DEVELOPMENTS

Your Company is engaged in the production of High Carbon

Ferro Chrome which is backedup by captive Chrome Mines. Basically,
Ferro chrome is used in metallurgical operations(especially stainless
steel) as a raw material. The FeCr acts as an alloy which even addedin
the steel production, gives it corrosion resistant properties. Globally
FeCr productionis centred near regions with high chrome deposits. It
is produced through a highly energyintensive electric arc furnace
(EAF) process. Consumption and production of Ferro chromehas been
growing for the last few years primarily due to increased usage of
stainlesssteel. Globally, major consumers are metal goods followed by
building construction andengineering which are driving the demand
for Ferro Chrome by consuming more steel andsteel products. In
India, Kitchenware is the only major sector which consumes around
75%of ferrochrome in the form of stainless steel. Therefore, demand
for FeCr largely followstrends in Stainless steel and Alloy steel
production.
 CHAPTER – II
BALESWARE ALLOYS PRODUCTION
Highcarbon farrowcrom always is an alloys of chromium
carbon ,silicon,phaspharos, shalfar etc . is used for production of steel
newer it 8 to 20 % ferocrom used for making of steel

Hycarbone farrowcrom production done in electrical are

some most furnish . so carbon in the form of coal and cake is used as a
reducing asegent and the process is called carbon thormick process
flux such as qrtz dolomite magnasite lime stome etc. used to remove
the gange material in the cromite are as slag which is the production.
So electrical energy in the major some of energy is used of heat
energy of production of hycarbon farrowcrom . the chemical
composisite of farrowcrom is

 Chromium- 60%
 Silicon -3.4to 4%
 Phosphoras-0.03to0.04%
 Shalfur-0.05%
 Carbon-8 to 8.5%
Materials for production
1- CHROME ORE
i-Cr. Briquette
ii-Chips
2-Redntant
i-Coke & coal
 STANDARD OPERATING
PROCEDURE
SUBJECT :-Electrode paste handling
OBJECTIVE:-Electrode management
After receiving the EC paste quality is to be tasted for the
following parameters
1-plasticity35%-38% desired
2-fixed carbon 85%-88 desired
3-ash content below 1% desired
EC paste is to be stored in covered sheds to keep is away from
heat dust and moisture however when it is kept in open yard see that
it is well covered
The preserved EC paste is bought to crane approach in ground
floor to the furnace building by tractor
The EC past is taken to 15mtrs floor by 5.0mt eot crane in
bottom open tubs of 1.0 mt capacity fllowed by feeding in to furnance
-1 2 3 transfer point
At transfer point a bottom open tub of 250kg is kept on
amobile trolley to collect the paste for feeding to furnance -4/5 with
the help of 2.0mt mono rail haist
The past level is to be maintained 350 to 400 cms . every day
the initial past levelare measured in to beginning of the shift and than
paste is filled where ever requird the final reading is taken at the end
of shift
 STANDARD OPERATING PRACTICE
Subject =Row materials
Objective= cater to the need of furnace requirement and minimize
spillages /ground lasses

Row material receipt

Row material receipt
 co ordinate with RM purchase department to ensure desired
inventory level item wise with an objective to run the furnace
with consistence mix.
 for every item(cr.ore/reluctant /fluxes etc ) designated yards /
storage sheds are allocated.
 After receiving the row materials are un loaded manually or by
un loading machine and finally stored in respective yards.
 All the designated storage places should have clean and clear
identification mark with name of row material.
 Ensure inspection and sampling while unloading.
 Ensure segregation of rejected material with clear
identification.
 Ensure resizing of oversize of material if required
 Ensure identification and traceability though out.
 Make lots for chips grade wise and ensure sampling &analysis
 RAW MATERIAL FEEDING TO FURNACE
Make daily /shift wise feeding plan in coordination with f/c
in charge shift- in-charge and logistic in-charge with sequence of
feeding with a view to feed maximum quantity in A&B shift maximum
utilization of mobile equipment and minimize height fall in to
bunkers in case of briquettes.

 Ensure FIFO in case of all RM particularly case of briquettes

 Ensure availability of analysis before feeding of any RM
 Ensure clear communication among RM supervisor belt
operator, shift in-charge and control room officer
 Only the authorized supervisor should identify inspect and give
instruction for feeding by issuing bunker feeding slip in the
specified format
 Ensure screening in case of specified material and segregation
of dust grade wise.
 Cross check by two –way communication to prevent bunker mix
–up -Prevent spillage from dumper by avoiding over loading.
 Ensure planned maintenance of RM feeding circuit equipment to
avoid spillage, minimize breakdowns during operation.
 Ensure daily, weekly and monthly reconciliation.
 Find root cause of bunker difference and minimize difference.

STANDARD OPERATING PRACTICE
Subject: -weight hopper calibration

Objective:- to optimize operation and to minimize the variation in

raw material issue quantity to actual consumption quantity

 Each weight hopper should be calibrated once in week

WEIGHT HOPPER CALIBRATION SCHEDULE

1. Furnace 1-Monday
2. Furnace 2-Tuesday
3. Furnace 3-Wednesday
4. Furnace 4/5-Monday

Get clearance from concerned control room concerned as per the

schedule Calibration time -10am to 11.30am 15.30pm to16.30pm

Respective authorized person are to be present at the required

spot at time of calibration .

 Weight hopper to be clear thoroughly (inside stuck up materials

if there tobe cleaned/counter weight box should be properly
covered& there should not be any spillage material over the
counter weight box and load call/constrainer should be
thoroughly cleaned) and test weight to be kept ready at
required place before staring calibration.
  Assure zero reading both at PHILLIPS &supervsore scale
before staring calibration. If there each any deviation
necessary adjustment (TARE)should be done by respective
authorized person.
 Then place the grill (having standard weight) on the top of the
weight hopper properly and record the reading at both scales if
the reading at both scales are same then proceed with further
loading with increment of 100kgs till total of 940kgs to 960kgs
and record corresponding reading at both scales in the weight
hopper calibration record.
 Any deviation (beyond (+)/(-)5kgs) at maximum weight load
i.e.940/960kgs should be adjusted by the concerned authorized
person also it is to be seen that there should not much deviation
i.e. (+)/(-) 5kgs in the range of 400 to 600kgs in case it is found
in the field also to be counter checked and necessary adjustment
to be done
 Similary unloading of weights is to be done with 100kgs
decrements.

RESPONSIBILITY
 Respective control room officer /shift-in-charges are responsible
for calibration in time.
 Incase there is any charging problem/furnace problem
concerned shift in charge is authorized to re-schedule tha
calibration.
STANDARD OPERATING PRACTICE
SUBJECT:-Tapping management

Objective:-To improve the prime yield and to optimize, smoth &

steady operation.

 Schedule 3/4 tapping per shift with consultation of shift-in-

charge and display at tapping boy.
 Use of safety appliance each must for every individual involved
in tapping activity . Always keep the tapping platform clean and
keep the tapping tools ready in a systematic manner .
 Runner dressing and tap hole cleaning should be done before
each tapping.
 Tap hole location should not be changed tap hole level should
measured at the beginning of each shift .First the clay and slag
adhering should be sufficiently chipped out from the tab hole
and then lancing should be carried out in proper direction .The
tap hole should be closed deep inside (at least 4’6’’from the
extreme end)
 Always make it a practice to use the left over cut piece lancing
pipe in the subsequent attachment . In case of jammed tip
segregate those pipes for necessary welding /threading for
recycline .
 Efforts to be taken to drain out metal and slag quantities to
the desired level in every tapping
 Collect slag (free from metal) and metal(free from slag) sample
from each tapping and handover to quality control laboratory
through control room . No samples should be collect from
runner .
 Dress the moulds with sodium silicate mixed sand in bottom &
sides and ram it properly to avoid any leakage during tapping.
Lime cating should be done properly for each release of the
cakes and protecting the cast iron surface.
 The rectangular moulds and sand bed should be dressed
properly by thorough mixing .
 Ladle should be coated with lime before use for tapping
 Use oxygen and lancing pipe to the least possible extent, after
opening the tap hole should be poked with M S rod .
 Furnance wise puremetal cakes,pure slag cake& slag mix are
segregated in the crane boy itself and accordingly theyare to be
send to the respective yards with traceability slip
 Identification numbers of receptacles of each tapping should be
record in the log sheet to study the life of receptacles.
 Proper heat treatment should be done before using newly
pasted ladle and new cast iron receptacles.
 CHAPTER - III
COMPANY PROFILE
3.1 INTRODUCTION:

In this chapter we are going to discuss about the following

points of company profile:-
1. History of company
2. About the management of company
3. Product profile
4. Financial highlights.
3.2 HISTORY OF THE COMPANY:

YEAR EVENTS 1984 - The company was incorporated on 1st

May, in Orissa. It was promoted by Ispat Group headed by M.L. Mittal.
The main objective of the company is to manufacture calcium silicide,
ferro silicon, calcium carbide and all other ferrous and non-ferrous
metal based alloys. 1987 - Due to erratic power situation, production
of calcium silicide could not be taken up. Unstable power situation
once again stalled the commencement of calcium slicide production.

 The company installed a second furnace and a captive power

plant with a total outlay of Rs 22.60 crores.
  The company along with an Indonesian firm set up a joint
venture project for manufacture of Silicon, Ferro Silicon and
Ferro Chrome.
 100 shares subscribed for by the signatories to the
Memorandum of Association. 31,49,900 shares then issued at
par of which the following shares reserved and allotted:

(i) 6,09,900 shares to Indian promoters, directors, etc.

(ii)4,50,000 shares to NRI promoters on repatriation basis and

(iii)3,00,000 shares to IPICOL Out of the remaining 17,90,000 shares,
the following shares were reserved for preferential allotment:

(i) 89,500 shares to employees including Indian working directors

and.
(ii) 35,800 shares to business associates of the Company. Out of (i)
and (ii) only 36,600 shares taken up.

 The balance 16,64,700 shares, along with the unsubscribed

portion of 88,700 shares out of the preferential quota were
offered to the public during Sept. 1986.

Additional 4,47,500 shares allotted to the public to retain

oversubscription.
1989 - The company received a letter of intent for the setting up a
third furnace at the existing site at Balgopalpur for the
implementation of charge chrome/ferro chrome with a licensed
capacity of 15,000 TPA.

The company issued 45,45,454-14% secured fully convertible

debentures of Rs. 220 each of which (i) 18,00,000 debentures were
reserved for preferential allotment to the existing equity shareholders
of the company in the ratio of 50 debentures for every 100 equity
shares (only 17,58,345 debentures were taken up);

(ii)1,36,000 debentures allotted to NRI (all were taken up);

(iii)13,63,636 debentures reserved for preferential allotment to the

equity shareholders of Nippon Denro Ispat, Ltd., and Ispat Profiles
India, Ltd. (all were taken up);

(iv) 2,27,000 debentures reserved for UTI, ICICI, Insurance companies

and Mutual Funds (all were taken up);

(v) 2,27,273 debentures offered to the employees (including Indian

working directors) of the Company (only 185 debentures were taken
up).

The balance of 7,91,545 debentures along with the 2,68,743

debentures not taken up by employees and equity shareholders were
offered to the Indian public (all were taken up). Additional 2,04,544
debentures and 4,47,274 debentures were allotted to the
shareholders of Nippon Denro Ispat, Ltd., Ispat Profiles India, Ltd.,
and Indian public respectively to retain oversubscription.
Part-A of Rs. 60 has been converted into two equity shares of the
face value of Rs. 10 at a premium of Rs. 20 per share at the end of
6 months from the date of allotment. Part-B of Rs. 160 will be
converted into appropriate number of equity shares of the face value
of Rs. 10 at such premium, as may be decided by the CCI between a
period of 18 months to 24 months from the date of allotment.

1990 - With the Government of India extending the scheme of broad-

banding to bulk ferro-alloys industry since January, the company
hoped to have a diversified product mix within the existing licensed
capacities.

1,00,00,544 No. of equity shares allotted due to the conversion of

Part-A convertible debentures.

1991 - The project was at an advanced stage of implementation and

it was expected to be commissioned in March/April.

Another letter of intent was received for the setting up of an

100% Export Oriented Unit (EOU) at Dhenkanal in Orissa for the
manufacture of charge chrome/high carbon ferro-chrome with a
licensed capacity of 75,000 TPA.
1992 - Profitability also improved due to optimum utilisation of
company's resources and adoption of various cost control measures.

352,82,219 shares allotted on conversion of pref. `B' of debentures.

The said furances are set up as Domestic unit in place of 100%

EOU origin with in build facility to produce other ferro alloys in
addition to charge/ferro chrome to enable the company to market
internationally 2 Nos. of imported DG sets of 5 MW each were
commissioned.

1993 - The company successfully implemented the commissioning of

two new furnaces of 7.5 MVA capacity each at Balgopulpur.

1994 - The company undertook steps to increase captive power

generation capacity from 19 MW to 40 MW by installing two new
imported D.G. Sets of 10.5 MW each at Balgopalpur, Orissa.

1996 - The Company has been conferred with various awards during
the period under review such as Regional Top Exporter Shield for
1994-95 from Engineering Export Promotion council (Eastern
Region), HRD First Prize for 1994 from CII. (Eastern Region) and Best
Exporter Award for 1994 from Directorate of Export Promotion
Council, Orissa.
 The Company has also received prestigious IS 14002/ISO
9002 accreditation from the Bureau of Indian Standards.

The Company has successfully used PLCs for economic use of

Resources like Power and Raw Materials.

1997 - IAL is a leading manufacturer of silicon metal and ferro-

silicon. Its products are manufactured under technical collaboration
with global leaders like Nippon Denro Japan, Danieli Italy, Elkem
Norway and Outokumpo Finland, IAL has aggressively added
capacities and diversified within the realms of the ferrous industry.

- IAL have suffered a similar fate of delayed project implementation

for as long as a decade.

1998 - Power generation capacity was increased by installing two

new imported D G sets of 10.5 MW each from MAN B & W Germany at
its works at Balgophalpur, Orissa.

- The management of Ispat Alloys Ltd has declared an indefinite

lockout following violent incidents at the Balagopalpur factory
premises in Balasore district of Orissa.

- Ispat Alloys Ltd, a subsidiary of the Mittals-promoted Ispat

Industries Ltd.
1999 - Two leading manganese alloy producers -- Ispat Alloys
and Maharashtra Elektrosmelt -- have made losses during first
quarter April/June.

2007-

Balasore Alloys Ltd has informed that Mr. Rabindra Kumar Jena,
Executive Director of the Company has been elevated to and
appointed as Joint Managing Director of the Company w.e.f. January
31, 2007.

-Balasore Alloys Ltd has appointed Mr. Debadatta Sengupta as

Director of the Company w.e.f. January 31, 2007.

2009
- Balasore Alloys Ltd has informed that the Board of Directors of the
Company at its meeting held on May 29, 2009 has appointed Mr.
Chittaranjan Pradhan, as an Additional Director & Whole time
Director (Operations) of the Company w.e.f. May 29, 2009, subject to
approval of the shareholders in ensuing Annual General Meeting.
3.3 ABOUT THE MANAGEMENT OF COMPANY :

Name Designation
A K Bhattacharyya Director
Anil Surekha Additional Director
B N Panda Director (Operations)
K P Khandelwal Director
Mahesh Trivedi Director
Pramod Mittal CEO
Pramod Mittal Chairman / Chair Person
R K Parakh Director (Finance)
S K Majumdar Director
S K Pal Director

S M Ali Nominee Director

S Mohapatra Director
Trilochan Sharma Sr. GM,Co. Secretary & Compl. Officer
Trilochan Sharma Secretary
Vartika Mittal Additional Director

3.4 COMPANY PRODUCT PROFILE

Product application :
Ferrochrome (FeCr) is a corrosion-resistant alloy of chrome
and iron containing between 50% and 65% chrome. It is a finishing
material which contains about 50-70% chromium alloyed with iron.
 Primarily ferrochrome is utilized in the production of
stainless steel. Stainless steel depends on chrome for its appearance
and its resistance to corrosion. The average chrome content in
stainless steel is approximately 18%. It is also used when it is desired
to add chromium to carbon steel. Ferrochrome known as 'charge
chrome' produced from a Cr containing ore with a low Cr content is
most commonly used in stainless steel production, where as High
Carbon Ferrochrome produced from high grade ore is more
commonly used in specialist applications such as engineering steels
and production of finished metals takes place in electric arc furnaces.

Ferrochrome production is essentially a carbothermic reduction

operation taking place at high temperatures. Cr Ore, an oxide of
chromium and iron, is reduced by coal and coke to form the iron-
chromium alloy. The heat for this reaction comes typically from the
electric arc formed between the tips of the electrodes in the bottom of
the furnace and the furnace hearth. This arc creates temperatures of
about 2800°C. In the process of smelting, huge amounts of electricity
are consumed.

The material is tapped from the furnace intermittently. When

enough smelted ferrochrome has accumulated in the hearth of the
furnace, the tap hole is drilled open and the molten metal and slag
are rushed down to a sand bed or caught in ladles. Once the metal
solidifies into cakes, these are shifted to the handling yard where
they are cooled down, cleaned and further broken into pieces as
per specification of the Customers and packed for shipment.

(This figure shows the product mix in company)

(This figure shows the production process in Balasore Alloys Ltd.)

 BAalance Sheet of Balasore Alloys ------------------- in Rs. Cr. -------------------
Mar '12 Mar '11 Mar '10 Mar '09 08

12 mths 12 mths 12 mths 12 mths ths

Sources Of Funds
Total Share Capital 33.66 33.66 33.66 33.66
Equity Share Capital 33.66 33.66 33.66 33.66
Share Application Money 0.00 0.00 0.00 4.90
Preference Share Capital 0.00 0.00 0.00 0.00
Reserves 914.17 229.79 209.28 208.06
Revaluation Reserves 0.00 710.20 763.38 0.00
Networth 947.83 973.65 1,006.32 246.62
Secured Loans 116.07 133.29 159.68 176.98
Unsecured Loans 32.27 78.42 73.46 17.88
Total Debt 148.34 211.71 233.14 194.86
Total Liabilities 1,096.17 1,185.36 1,239.46 441.48
Mar '12 Mar '11 Mar '10 Mar '09

12 mths 12 mths 12 mths 12 mth

Application Of Funds
Gross Block 1,358.42 1,317.08 1,308.48 527.18
Less: Accum. Depreciation 321.27 258.68 198.36 187.99
Net Block 1,037.15 1,058.40 1,110.12 339.19
Capital Work in Progress 35.20 59.83 48.41 47.59
Investments 38.46 37.03 21.33 20.93
Inventories 107.01 134.49 117.90 141.00
Sundry Debtors 9.94 41.31 1.66 11.76
Cash and Bank Balance 6.23 0.34 5.89 0.35
Total Current Assets 123.18 176.14 125.45 153.11
Loans and Advances 79.51 79.22 93.46 119.80
Fixed Deposits 0.00 15.00 11.88 20.49
Total CA, Loans & Advances 202.69 270.36 230.79 293.40
Deffered Credit 0.00 0.00 0.00 0.00
Current Liabilities 195.45 229.48 164.74 255.02
Provisions 21.88 10.79 6.46 4.60
Total CL & Provisions 217.33 240.27 171.20 259.62
Net Current Assets -14.64 30.09 59.59 33.78
Miscellaneous Expenses 0.00 0.00 0.00 0.00
Total Assets 1,096.17 1,185.35 1,239.45 441.49

Contingent Liabilities 115.56 116.74 101.54 76.09 .73

Book Value (Rs) 147.43 40.98 37.79 37.60 .80
 Source : Dion Global Solutions Limited
Profit & Loss - Balasore Alloys Ltd.
Mar'12 Mar'11 Mar'10 Mar'09 Mar'08
12 Months 12 Months 12 Months 12 Months 12 Months
INCOME:
Sales Turnover 626.46 669.02 432.62 656.89 550.40
Excise Duty 37.05 29.59 17.57 18.41 19.65
NET SALES 589.41 639.43 415.05 638.49 530.74
Other Income 0.00 0.00 0.00 0.00 0.00
TOTAL INCOME 598.42 645.41 423.70 645.53 535.71
EXPENDITURE:
Manufacturing Expenses 173.79 131.11 102.42 105.78 133.80
Material Consumed 245.38 365.65 231.98 348.12 234.75
Personal Expenses 23.48 21.61 17.22 16.97 19.50
Selling Expenses 0.00 0.61 0.41 11.93 12.09
Administrative Expenses 43.00 18.40 15.57 21.89 24.18
Expenses Capitalised 0.00 0.00 0.00 0.00 0.00
Provisions Made 0.00 0.00 0.00 0.00 0.00
TOTAL EXPENDITURE 485.65 537.38 367.60 504.68 424.31
Operating Profit 103.75 102.05 47.45 133.80 106.43
EBITDA 112.76 108.02 56.10 140.84 111.40
Depreciation 16.58 15.46 14.05 11.85 18.37
Other Write-offs 0.00 0.00 0.00 0.00 0.00
EBIT 96.18 92.57 42.05 128.99 93.03
Interest 47.29 50.38 42.21 44.58 31.63
EBT 48.89 42.19 -0.1 84.41 61.41
Taxes 16.82 14.07 8.51 6.15 17.88
Profit and Loss for the Year 32.07 28.11 -8.67 78.27 43.53
Non Recurring Items 0.00 -1.08 11.12 -77.77 -12.18
Other Non Cash Adjustments -0.1 -0.1 10.10 0.43 1.95
Other Adjustments 0.00 0.00 0.00 0.00 0.00
REPORTED PAT 31.93 26.89 12.55 0.94 33.29
KEY ITEMS
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 3.21 3.21 0.00 0.00 0.00
Equity Dividend (%) 9.54 9.54 0.00 0.00 0.00
Shares in Issue (Lakhs) 642.90 642.90 642.90 642.90 642.90
EPS - Annualised (Rs) 4.97 4.18 1.95 0.15 4.14
 CHAPTER -Iv
ANALYSIS OF DATA
4.1 INTRODUCTION:
In this chapter we are going to discus about the analysis of
data .Here we analyse the following ratios and interpret them.The
analysis of following ratios are discussed below.

4.2 Analysis of data:

The financial data of a company have been presented in the
form of tables and each ratio has been calculated and interpreted.

4.2.1 Current ratio :

Following table shoes the current ratio of the company for 3
years i.e 2008-09,2009-10,2010-11.

Table - 4.1
Current Ratio Of Balasore Alloys Ltd.

Current
Year Current Assets Current Ratio
Liabilities

2009-010 29,339.71 25,502.77 1.15:1

2010-11 21,479.23 15,249.52 1.40:1

2011-12 25,719.19 21,987.41 1.17:1

(Source:Annual report of Balasore Alloys Ltd.)

 As a annual of thumb current ratio of 2:1is considered
satisfactory .By analyzing the above table we can see the current
ratio of the company is below the standard and it is unsatisfactory. It
is also derived that the current ratio of the company is decreasing
over 3 years.

4.2.2 Quick ratio :

Followng tablwe shows the quick ratio of the company for 3
years i.e. 2008-09,2009-10,2010-11

Table - 4.2
Quick ratio of Balasore Alloys Ltd.
Current
Year Quick Assets Quick Ratio
Liabilities

2009-10 15,240.06 25,502.77 0.59:1

2010-11 9,689.24 15,249.52 o.63:1

2011-12 12,269.81 21,987.41 0.56:1

(Source: Annual Report of Balasore Alloys Ltd.)

As a convention of quick ratio of 1:1 is considered satisfactory

.But in above table we analyse that quick ratio in 2008-09 is 0.59:1
ind increased 0.63:1 in 2009-10.

Further it is decreasd to 0.56. It is indicates the low quick ratio

and the liquidity position is not good.
4.2.3 Absolute Liquid Ratio:
Following table shows the absolute liquid ratio of company
for 2008-09,2009-10 and 2010-11.
Table - 4.3
Absolute Test Ratio Of Balasore Alloys Ltd.
Absolute Liquid Current Absolute Liquid
Year
Assets Liabilities Ratio

2009-10 2083.94 25,502.77 0.08:1

2010-11 1777.17 15,249.52 o.12:1

2011-12 1534.23 21,987.41 0.07:1

(Source: Annual report of Balasore Alloys Ltd.)

The acceptable norm for this ratio is 50% or 0.5:1 . From the
above table it is observed that the absolute liquid ratio of a company
is decreased respectively i.e. 0.08:1,0.12:1,0.07:1 etc. The firms
liquidity position is not satisfactory.
4.2.4 Stock Turnover Ratio :
Following table shows the stock turnover ratio of the
company for the years 2008-09,2009-10,2010-11 .

Table - 4.
Stock Turnover Ratio Of Balasore Alloys Ltd.
Year Net Sales Inventoy Stock Turnover Ratio

2009-10 63,873.43 14,099.68 4.53 times

2010-11 41,518.56 11,789.99 3.52 times

2011-12 63,866.19 13,449.38 4.75 times

(Source: Annual report of Balasore Alloys Ltd.)

From the above table it is interpreted that the stock turnover

ratio in 2008-09 i.e. 4.53 times and it is reduced to 3.52 times in the
year 2009-10 and further it is increased to 4.75 times in the year
2010-11.It means the management of the company is favourable.
4.2.5 Debtors Turnover Ratio :
Following table shows the debtors turn over ratio for the
years 2008-09,2009-10 and 2010-11 .
Table - 4.5
Debtors Turnover Ratio Of Balasore Alloys Ltd.
Average Trade Debtors Turnover
Year Net Sales
Debtors Ratio

2009-10 63,873.43 1010.72 63.19 times

2010-11 41,518,56 671.28 61.85 times

2011-12 63,866.19 2148.88 29.72 times

(Source: Annual report of Balasore Alloys Ltd.)

From the above table we see that the debtors turnover ratio of
the company is decreased from 63.19 times in the year 2008-09 to
61.85 times in the year 2009-10 and 29.72 times in the year in 2010-
11.
4.2.6 Average Collection Period :

Following table shows the average collection period of 3

years.

Table - 4.6

Debtors
Year No. Of Working Days Avg.Collection Period
Turnover Ratio

2009-10 365 63.19 5.77 days

2010-11 365 61.85 5.90 days

2011-12 365 29.72 12.18 days

(Source: Annual report of Balasore Alloys Ltd.)

The above table shows that the time taken by the company for
collection of debt is increased year after year i.e. arrounded 10 to 12
days .It is indicates the company is in betterway and it should be kept
in mind of the management.
4.2.7 Creditors Turnover Ratio :

The following table shows the creditors turnover ratio for

2008-09,2009-10 and 2010-11.

Table - 4.7

Creditors turnover Ratio of Balasore Alloys Ltd.

Net Credit Average Creditors Turnover

Year
Purchase Creditors Ratio

2009-10 6825.79 700.89 9.71 times

2010-11 7744.09 1004.88 7.7 times

2011-12 9241.93 1043.65 8.86 times

(Source: Annual report of Balasore Alloys Ltd.)

From the above table it is conclude that the ratio has decreased
from 9.74 times to 7.7 times and then increased to 8.86 times in a
year 2010-11.
4.2.8 Average Payment Period:
Following table shows the ratio of payment period of debt
for the year 2008-09,2009-10 and 20010=11.

Table - 4.8
Average payment period of Balasore Alloys Ltd.

No. Of Working Creditiors

Year Avg.Payment Period
Days Turnover Ratio

2009-10 365 9.74 37.47 days

2010-11 365 7.7 47.40 days

2011-12 365 8.66 41.19 days

(Source: Annual report of Balasore Alloys Ltd.)

The above table shows that the period of payment of debt of the
company is increased from 37.47 in the year 2008-09 to 47.40 days in
the year 2009-10 and then decreased to 41.19 days in the year 2010-
11. It is arounded to 30-40 days.
4.2.9 Working Capital Turnover Ratio:
The following table indicates the working capital turnover
ratio of the company.
Table 4.9
Working capital Turnover Ratio Of Balasore Alloys Ltd.

Working Capital
Year Net Sales Net Working Capital
Turnover Ratio

2009-10 63,873.43 3836.97 16.64 times

2010-11 41,518,56 6229.71 6.66 times

2011-12 63,866.19 3731.78 17.11 times

(Source: Annual report of Balasore Alloys Ltd.)

From the above table we see that the working capital turnover ratio of
the company is increased and shows the better management of working capital.
4.3 Conclusion
The following are the conclusion in our study.

 The current ratio is not satisfactory .It does not follow the
standard criteria 2:1 .
 The liquid ratio of the company is not good as compared to it’s
value of thumb i.e 1:1 .The position of liquid assets is not
satisfactory.
 The absolute liquid ratio is not required as compared to the
ideal ratio 1:2 .
 In all it is concluded that the company needs to improve its short
term financial position.

4.4 Summary:
In this chapter we have analyzed different liquid ratios like
current ratio, liquid ratio and absolute liquid ratio etc. After that a
brief conclusion over this analysis is taken up.
 CHAPTER -V
SUMMARY OF FINDINGS,CONCLUSIONS AND
SUGGESSIONS
5.1 INTRODUCTION:

In this chapter we are going to discuss about the summary

of findings that we have got from calculating different ratios.And also
we discuss about the conclusions taken from this analysis and suggest
them.They are discussed below:

5.2 SUMMARY OF FINDINGS:

From the above calculating tables we find that summary

which will be discussed below:
 From the Table 4.1 it is concluded that the current ratio of the
company in the year 2008-09 is 1.15:1 and in the year 2009-10
it is1.40:1 and also in 2010-11 it is 1.17:1.
 In the Table 4.2 it is shown that the quick ratio of Balasore
Alloys Ltd.are 0.59:1,0.63:1,0.56:1 respectively in the year 2008-
09,2009-10 & 2010-11.
 In the year 2008-09 the absolute liquid ratio of BALtd.is 0.08:1
which is below the acceptable level but in the year 2009-10 it is
0.12:1 and 0.07:1 is in 2010-11 shown in the Table 4.3.
 From the Table 4.4 the stock turnover ratio of Balasore
Alloys Ltd. Is 4.53 times in 2008-09 while it is 3.52 times in the
year 2009-10 and finally it is 4.75 times in 2010-11.
 In the year 2008-09 the debtors turnover ratio is greater than
the others i.e. 63.19 times in respect of 61.85 times & 29.72 times
in the year 2009-10 and 2010-11.
 From the Table 4.6 it is find that the average collection period of
debtors is 5.77 days in 2008-09,5.90 days in the year 2009-10
and 12.28 days in 2010-11.
 In the Table 4.7 it is shown that the creditors turnover ratio is
9.74 times in the year 2008-09 ,in 2009-10 it is falls to 7.7 times
and in 2010-11 it is further increased to 8.86 times.
 In the Table 4.8 it is considered that the average payment
period of creditors in the year 2008-09 is 37.47 days while it is
47.40 days in the year 2009-10 and 41.19 days in 2010-11.
 It is shown in the Table 4.9 is that the working capital turnover
ratio of the company is 16.64 times in the year 2008-09,6.66
times in 2009-10 and 17.11 times in the year 2010-11.
5.3 CONCLUSION:
It may be safely concluded that all aspects of liquidity has
been extensively covered by the department. It is time bound
activity for every researcher to draw conclusion and analyse the
finding at the end of the study. The social security scheme for
employees are one of the best in the country with accident insurance
scheme ,Training and development has been given due emphasis in
Balasore Alloys Ltd. . The appraisal system is the basis of promotion.
Attainment of professional qualification as a ground for promotion
also reserves to boost the enthusiasm of employees. Workers
participation has been widely encouraged Optimum Health, safety
and welfare facilities have been made available for the employees
that have led to the retention of them.

Finally, the liquidity analysis of Balasore Alloys Ltd. is not

satisfactory that means the company needs some increasement in his
short term financial position.
5.4 SUGGESTIONS:
After careful investigations and observation into the "Liquidity
position” of the company this following suggessions are made up:

1) The most important work of the organization to inspire and

motivate the people with a zeal to do work to achieve the
organizational goal.

2) The company should provide effective training policy and

programmes to provide skilled personnel to the organization.

3) More companies should be given towards the worker's

education.

4) More welfare facilities should be provided to the workers.

5) The company should take necessary steps to acquent the workers

with the sophisticated machineries in the organization.

6) There should be rotation in job as it will reduce the boringness

from the monotony of work.

7) The management should appoint experts for selection of

people for promotion.

8) Special-attention should be taken towards the working

condition & safety of workers.
 9) The management shoud appoint some experts in the field of
finance to develop in the short term financial position of the company.

10) There should be sufficient liquid assets.

11) There should have a proper balance in regards to the

liquidity.

12) Finally it is suggested that the liquidity position is not a good

indicator for the company but they shoud try to create a good
position in the global market at present time.
5.5 SUMMARY:

In the year 2011-12 we shall prepare a project report over the

liquidity position of the Balasore Alloys Ltd. And I am confident that
the company’s ceaseless commitment to learn and to improve itself
will once again help it to achieve its goals.

And finally I also thank my teachers and friends for their wise
counsel and guidance who have as always extended their valuable
support and active co-operation to me.
BIBLIOGRAPHY

1. Sashi K Gupta --- Management Accounting

2. R.K. Sharma ----Management Accounting
3. www.balasorealloys.com ---Website Address
4. www.google.com ---Search Engine Website Address