FINANCE MANAGEMENT IN RINL
Summer Internship Project (SIP)
Presentation & Viva
Gangavarapu. Geya
2023007418
Under the Supervision of
Dr. K. Madhava Rao
GITAM School of Business
GITAM Deemed to be University
Visakhapatnam
INTRODUCTION
• Capital budgeting refers to the
process of valuation and selection
of long-term investment projects.
• It deals with the examination of
various investment proposals.
• Feasibility studies are undertaken
at the top management level by
deciding upon the sources of
funds.
INDUSTRY PROFILE
• The steel industry is vital to
the global economy.
• Steel production involves
extracting raw materials,
smelting in blast furnaces, and
converting iron into steel.
• Steel is extensively used in
construction, automotive,
machinery, and energy
sectors due to its strength and
versatility.
COMPANY PROFILE
• Vizag Steel Plant, officially known as Rashtriya Ispat Nigam
Limited (RINL).
• Established in 1982, it is renowned for its integrated steel
production facility.
• RINL primarily produces high-quality long steel products.
• Departments at RINL
Production, Maintenance, Quality Control, Human Resources,
Finance and Accounts, Marketing, Procurement, Engineering
and Projects, Environmental Management, Safety and Health,
Information Technology, Legal Affairs
COMPANY PROFILE
• EMPLOYEES – 17,000+
• VISION
• MISSION
• OBJECTIVES OF RINL
• POLICIES
THEORETICAL BACKGROUND (CAPITAL
BUDGETING)
capital investment.
is to concern potential long-term
management is capital budgeting that Allocating financial resources based
A significant part of financial on the evaluation of project priorities
and available capital.
Submitting the capital budgeting proposals Capital budgeting evaluates
for approval by senior management or the itself in decisions that will have
board, ensuring they meet the organization’s a long-term impact.
strategic and financial criteria.
THEORETICAL BACKGROUND
Capital budgeting aids in
The feasibility of these cost containment and better
Constantly tracks and
initiatives is evaluated using resource use by
evaluates the progress of
a range of financial models encouraging financial
the project.
and indicators. accountability and
discipline.
Encourages cost-effective
Forecasting future financial resource allocation and
flows is uncertain. management.
OBJECTIVES OF THE STUDY
Examine the Decision-
Evaluate the financial
Making Processes for
results
Investments
Determine Problems Analyze methods of
and Their Fixes capital budgeting
Comparative Analysis
of Industry Standards
RESEARCH METHODS
Secondary data is collected
from sources like:-
• Gathering necessary information from
internal documents, monthly records,
yearly records, and published books
or profiles of the Visakhapatnam
Steel Plant.
• Additional books, periodicals, and
journals
• Annual Reports of the Organization.
Data Analysis
• Rashtriya Ispat Nigam Limited (RINL), popularly
known as Visakhapatnam Steel Plant, has hit
certain production metrics benchmarks as of the
fiscal year 2023–2024.
• With 4.6 million tons of liquid steel produced,
RINL increased its output over the previous fiscal
year 2022–2023 by 7%.
• CAPITAL BUDGETING TECHNIQUES
USED:-
a) PAYBACK PERIOD
b) ACCOUNTING RATE OF RETURN
c) NET PRESENT VALUE
d) INTERNAL RATE OF RETURN
e) PROFITABILITY INDEX
Data Analysis
UNDER NON – DISCOUNTED CASH
FLOW CRITERIA:-
•PAYBACK PERIOD:- RINL has made
back it’s initial investment in less than 1 year
i.e., in 6 months which was quicker than
expected.
•ACCOUNTING RATE OF RETURN:-
With an annual percentage rate (ARR) of -
698.61%, the investment has, on average,
resulted in an excessive yearly accounting
loss in comparison to the original investment.
Data Analysis
UNDER DISCOUNTED CASH FLOWS:-
• NET PRESENT VALUE:- With an 18%
discount rate, the Net Present Value (NPV) for
the years 2019 to 2023 is 6,511.33 crores.
• INTERNAL RATE OF RETURN:- The cash
flows of the firm from 2019 to 2023 have an
IRR that is much higher than 35%.
• PROFITABILITY INDEX:- With an 18%
discount rate and a ₹233.32 crore initial
investment, the Profitability Index (PI) comes
out to be 27.90.
Discussion & Recommendations
• In a project work focused on RINL,
RASHTRIYA ISPAT NIGAM LIMITED,
VIZAG STEEL PLANT, External variables
affected RINL's financial performance.
• Measures recognized to achieve cost
reduction
• Cost control can be employed to avoid annual
losses in wild value ranges.
• Establish effective early warning mechanisms
concerning the group's financial position on a
regular basis.
• Evaluate the current state of the firm's capital.
Conclusion
• Knowledge of financial management is crucial towards the
achievement of goals of enhancing profitability, efficient
and effective use of resources and minimization of risks.
• RINL's approach to capital budgeting is profitability
depressed when resources are dedicated appropriately to
schemes which will support key strategies and enhance the
formation of shareholder worth.
• Strategic investments in capacity expansion and
technology improvements equip RINL for long-term
growth and market leadership.
• There will be a need to regularly assess and analyze the
financial indicators.
References
• Financial Management - I. M.
Pandey
• Financial Management - M. Y.
Khan & Jain
• https://www.vizagsteel.com/index.
asp
• RINL profile & Annual Reports
