लागत प्रबंधन पस्ु ततका

2020-2021

हर ककसी की स् ंदगी से ड़
ु ा हुआ है सेल

लागत प्रबंधन विभाग

भभलाई इतपात संयंत्र

1
Contents:
S. No. Topic Page No.
1. Financial Overview 3
2. Profit in SAIL 3
3. Profit in SAIL Vs BSP(PBT) 4
4. Cost Reduction Journey 4
5. Production Journey 5
6. Conversion Cost 6
7. Repair & Maintenance Cost 7
8. Trends :
(A) Trend of BSP NSR, Variable Cost & Contribution Margin 7
(B) Trend of NSR & Total Cost – Saleable Steel 8
(C) Trend of Variable Cost Of Coke, Imported Coal & Blend Cost 8
(D)Trend of Imported Coking Coal, Coal Blend & CDI 9
9. BSP-Breakup of Expenditure(2019-20) 9
10. Comparative NSR of different products 9
11. Sensitivity Analysis 10-12
12. Loss Due to Stoppages 13
13. Cost Reduction & Rev. Max. Target for 2020-21 14-15
14. Actual Rates/Cost
(A) Rates of Raw materials 16
(B) Cost of Services 17
(C) Cost of Production 17
15. Guidance to Line Manager
(A) Financial Terms 18
(B) Important Financial ratios 19
(C) Reading the Cost Sheet 19-20
16. Role of Cost Coordinators & Cost Stewards 20-21
17. List of Cost Coordinators 22
18. Cost Control Drive 23
Work on what you are spending Money on
“NOW”….. to cut COST

2
1. Financial Overview (BSP)
Rs. Crores

Particulars Actual 2018-19 Actual 2019 - 20 Actual Q1 2020-21

Gross Turnover 16464 18885 3010
EBITDA 2242 4079 105
% of EBIDTA to Turnover 14% 22% 4%
Finance cost 1041 1312 432
Depreciation 692 968 266
Profit before Tax 509 1799 -593

2. Profit in SAIL
Rs. Crores

Plant/Unit Annual 2017-18 Annual 2018-19 Annual 2019-20 Q1 2020-21

BSP 646 509 1799 -593

DSP -270 279 -442 -120

RSP -180 1472 -409 -546

BSL 526 1916 48 -429

IISCO -988 -402 -1092 -402

Others -492 -436 3267 105

SAIL (PBT) -758 3338 3171 -1985

SAIL (PAT) -482 2179 2022 -1270

3
3. Profit SAIL VS. BSP (PBT)

4. Cost Reduction Journey

Rs. Crores
YEAR COST REDUCTION
2003-04 140.12
2004-05 -2.98
2005-06 67.86
2006-07 -8.77
2007-08 92.14
2008-09 291.05
2009-10 357.13
2010-11 213.93
2011-12 -57.10
2012-13 292.58
2013-14 423.4 (COIS)*
2014-15 31.98 (COIS)*
2015-16 30.13 (COIS)*
2016-17 40.00
2017-18 206.20
2018-19 150.23
2019-20 1969 Rs/TSS
2020-21 (Plan) 3177 Rs/TSS

4
5. Production Journey
(Tonnes)

Production Ann'18-19 Std'19-20 Act 19-20 Up to Aug'20

BF Coke Dry 2763409 3094000 2654222 837395
Skip Coke Dry 2343830 2800500 2229377 633602
SP-II 2609738 3100000 2428813 613895
SP-III 4308248 6300000 4890191 1602707
Total Sinter 6917986 9400000 7319004 2216602
Hot Metal 4751515 6450000 4818436 1414099
SMS I(Total Ingot Steel) 1848910 1200000 978885 644
SMS -II(Total Cast Steel) 2388500 3000000 2380766 634522
SMS -III(Total Cast Steel) 209842 2000000 1137235 700074
Crude Steel 4447252 6200000 4496886 1334596
Cast Slab 990521 1700000 1096178 268632
Cast Bloom 1397979 1300000 1284588 365890
Slab Finished 956422 1649000 1029276 270188
Bloom Finished 1380249 1287000 1265316 362812
Total CCS Finished 2336671 2936000 2294592 633000
Plate Unfinished 956955 1319000 965917 88543
Plate Finished 869088 1200000 872838 79593
Blooms for RSM 51773 34000 39322 0
Total Blooms 1473816 1180000 1026210 942
Total Billets 1329990 1100000 928284 854
Total Rails Unfinished (RSM) 777995 866470 921484 310491
Total Strl. Unfinished (RSM) 4183 0 0 532
Total Rail & Strl. UF (RSM) 782178 866470 921484 311023
Total Rails Finished (RSM) 770177 850000 884973 288238
Total Strl. Finished (RSM) 4047 0 0 484
Total Rails & Strl. Finished (RSM) 774224 850000 884973 288722
Total Rails Finished (URM) 34073 34073 606538 288305
Total Rails Finished (RSM+URM) 110001 110001 1493116 516305
Total Rounds 397821 500000 520793 121969
Total Light Strls. 213025 200000 154330 54167
Total Merchant Products 610846 700000 675122 176135
Total Wire Rods 419983 550000 335296 27429
Saleable Steel 3673362 5600000 3983049 1250235

“Cost Reduction is a brainstorming and ideation mechanism to elicit new ideas through a
concerted effort targeted to achieve Cost Leadership at our work place”

5
6. Conversion Cost
(RS/T)
Area Unit Annual Standard Annual August
2018-19 2019-20 2019-20 2020
Coal Handling & Batt. Operation T 2051 1968 2479 2434
Coal Handling & Breeze disposal T 210 309 232 167
SP-II T 669 553 779 823
SP-III T 766 625 794 962
SPs T 729 601 789 908
B.F. T 3171 2750 3338 3750
SMS-II(Convertor) T 2399 2331 2730 2892
VAD T 781 600 841 801
R H Degasser T 446 486 573 483
Ladle Furnace T 488 364 522 458
Concast T 1320 1324 1933 1999
Casting Powder T 31 34 35 26
Slab Finished T 292 217 285 410
Bloom Finished T 292 217 285 410
Plate Mill T 3646 2919 3755 3813
Plate Mill Normalizing T 1644 1438 2288 1346
R.S.M Reheating Rolling &Shearing T 2615 2238 2624 3355
R S M Finished T 2333 2085 2119 2661
Merchant Mill T 2654 2529 3339 2089
Water Supply Department. ‘000 m3 50372 38615 50215 54180
C.A.S. ‘000 m3 612 420 716 715
T&D Loco Hrs 3666 2905 4141 5095
Steam PP-I T 1084 961 1239 1217
Elect. PP - I ‘000 KWH 6954 7089 7925 7503
Oxy OP - I I ‘000 m3 3389 2043 4009 5775

Buy Product/Spare you will use, instead of substituting just because

We are used to it & is only item available

6
 7. Repair & Maintenance Cost
(RS/T)
Area Annual 2019-20 August'20
CO&CCD
Coal Handling & Batt. Operation 568.6 649.8
GCP 133.4 141.2
Coal Handling & Breeze disposal 169.7 166.3
Total 871.7 957.3
SPs
SP-II 249.3 261.8
SP-III 209.4 258.4
Total SPs 222.6 259.7
B.F. 322.3 437.2
SMS-II
Convertor 212.5 252.9
VAD 129.6 82.7
R H Degasser 12.6 11.2
Ladle Furnace 3.5 3.6
Concast 452.6 467.9
Total SMS-II 810.8 818.2
R.S.M.
Reheating Rolling & Shearing 391.2 598.2
R S M Finished 592.7 655.5
Plate Mill
PM 1103.1 1053.3
Plate Mill Normalizing 297.8 133.6
Total 1400.8 1186.8

8. Important Graphs:
(A) BSP: Trend of NSR, Variable Cost & Contribution Margin:
42812 43077 44253
45000

40000 38040
36824

35000 31388
30544 30930
29771
30000 27975
25546
25000 21473 22217
19088
20000

15000 18707
15351
10000 13306
11456 11881
9171 10065
5000

0
14-15 15-16 16-17 17-18 18-19 19-20 Aug2020

NSR Variable Cost Contribution

7
(B) Trend of NSR & Total Cost – Saleable Steel

48,625
49,000
47,154 46,708
47,000

45,000
42,788 42,629
43,000 44,253
40,936
42,812 43,077 39,972
41,000
38,766
40,945
39,000 40,282 40282
38,979
37,000 38,040
35,000
2017-18 2018-19 2019-20 April 20 May 20 Jun 20 July 20 Aug 20
Total Cost NSR

(C). Trend of Variable Cost of Coke, Imported Coal & Blend Cost

25000 23565
22000 20921
18887 18773
18051
19000 16903
16000 14554
13784 13556
16385 12716
13000
14155
13293 13007
10000 12452
2018-19 2019-20 Apr-20 May-20 Jun-20
Variable Cost Imported Coal Rate Blend Cost

Immediately remove unnecessary Routine purchases

8
(D) Trend of Imported Coking Coal, Coal Blend & CDI
Rs/Tonne

9 BSP: Break-Up Of Expenditure (2019-20)

10 Comparative NSR of Different Products:

Product 2019-20 (Actual) Q1_2020-21 (Actual) % change Q1 vs 2019-20
TMT 34911 35709 2
Light Structural 38282 32536 -15
Plain rods/ SWR/ EQ 36343 33984 -6
Plates 36935 36959 0
Billets 28307 27961 -1
Other Re-Roll able 26696 26194 -2
Saleable Steel 43077 42509 -2

9
11. Sensitivity Analysis for 2020-21:
(Variation of specific consumption by 1 unit)
(Based on Annual Cost 2019-20 rates and 2020-21 ABP production)
Parameter Unit Annual Financial
Impact (Rs. L)
CO & CCD
Australia hard Vs. USA hard 1% 49
Imp. Soft Vs Australia hard 1% 969
Ind. Prime Vs. Australia hard 1% 2293
Ind. Medium Vs. Australia hard 1% 2821
Ind. Prime Vs. USA hard 1% 2244
Ind. Prime Vs. Ind Medium 1% 528
3
Yield of CO gas 1 NM /TDC 229
Heat 1 M Cal/TDC 53
Power 1 KWH/T 293
SINTER PLANTS
Iron Ore Fines 1 Kg/T 137
Nandini Vs. Kuteshwar Lime/Stone 1 Kg/T 73
Nandini Vs. Jaisalmer Lime/Stone 1 Kg/T 233
Nandini Vs. Imported Lime/Stone 1 Kg/T 129
Return Sinter 1% 594
Heat 1 M Cal/T 87
Power 1 KWH / T 482
BLAST FURNACES
CDI Vs Coke 1 Kg/T 708
Coal to Hot Metal Ratio 1 Kg/T 59
Limestone HS 1 Kg/T 397
Manganese Ore 1 Kg/T 714
Power 1 KWH/T 324
S.M.S. -II
Hot Metal vs Steel scrap 1 Kg/TCS 71
TMI 1 Kg/TCS 529
Si-Mn 0.1 Kg/TCS 159
Petro coke 0.1 Kg/TCS 78
Fe-Si 0.1 Kg/TCS 184
Lime 1 Kg/TCS 202
Aluminum (Con+CCS) 0.1 Kg/TCS 159
Power 1 KWH/ TCS 153
3
Oxygen 1 M /TCS 101

10
Sensitivity Analysis For 2020-21: (Contd..)
Parameter Unit Annual Financial
Impact (Rs. L)
S.M.S. – lll
Hot Metal Vs Steel scrap 1 Kg./TCS 73
TMI 1 Kg./TCS 542
Si-Mn 0.1 Kg/TCS 163
Fe-Si 0.1 Kg/TCS 189
Aluminum 0.1 Kg/TCS 398
Lime 0.1 Kg/TCS 189
Petro coke 0.1 Kg/TCS 80
Heat M Cal/TCS 28
Power 1 KWH/TCS 157
Rail & Strl Mill
Yield at Hot Saw : Rails 1% 3160
Heat 1 M Cal/Ti 11
Power 1 KWH/To 60
URM :
Yield % 2856
Heat 1 M Cal/Ti 10
Power 1 KWH/T 51
Merchant Mill
Yield 1% 619
Heat 1 M Cal/TI 6
Power 1 KWH/To 32
Wire Rod Mill
Yield 1% 2433
Heat 1 M Cal/Ti 23
Power 1 KWH / To 12
Plate Mill
Yield 1% 1335
Heat (excl. Normalizing) 1 M Cal/Ti 12
Heat (Normalizing) 1 M Cal/Ti 3
Power 1 KWH /To 59
Power
Boiler Coal Cons.(PP-I) 1 Kg/T steam 167
Specific Operating Power Con. 1 KWH/TSS 283
Refractory cons. (RED Controlled) 1 Kg/TCS 1853

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Sensitivity Analysis For 2020-21: (Contd..)
Parameter Unit Annual Financial
Impact (Rs. L)
Revenue Maximization: Increase in Prime Quality production by reducing arising
Rails :
Defective 0.10% 246
IU 0.10% 285
URM :
Defective 0.10% 204
IU 0.10% 261
Merchant Products : Defective 0.10% 57
Wire Rods : Defective 0.10% 11
Plates:
NCOP 0.10% 28
Defective 0.10% 58
Other Areas:
Petro-Fuel Consumption (Plate Mill) 0.1 Lt/TSS 224

“What is necessary to change a person?

Is to change his awareness of self”

is to change his awareness of Self”

12
12. Loss Due To Stoppages for 2020-21
(All workings based on Standard Cost & ABP 2020-21)

Department Parameter Financial impact Assumptions

(Rs. Lakhs)
Coke Ovens Per no.s of Batt 1-8 0.98 ( Assuming loss of loss if 1 no. oven
oven pushed Batt 9-10 1.78 CC Billet pushing is
Batt 11 1.78 contribution) missed
Blast Furnaces Per BF 1 2.84 (Assuming loss of loss if 1 hours BF
furnace/hr BF 5 3.83 CC Billet is stopped
BF 6 4.74 contribution)
BF 7 7.27
BF 8 13.72
SMS-II : per blow 3.17 (Assuming loss of plates and
Converter/CCS surplus HM converted to pig iron
and sold)
9.92 (Assuming loss of plates and
ignoring surplus hot metal sales)
SMS-III : per blow 10.03 (Assuming loss of plates and
Converter/CCS surplus HM converted to pig iron
and sold)
16.76 (Assuming loss of plates and
ignoring surplus hot metal sales)
Merchant Mill per hour 3.91 (Assuming loss of mm products
and sale of surplus billets)
Wire Rod Mill per hour 1.10 (Assuming loss of wire rods and
sale of surplus billets)
Bar & Rod Mill per hour 3.25 (Assuming loss of BRM products
and sale of surplus billets)
RSM per hour 24.92 (Assuming stoppage results in less
rolling of Rails and CCS blooms
available for sale)
URM per hour 23.45 (Assuming stoppage results in less
rolling of Rails and CCS blooms
available for sale)
Plate Mill per hour 8.40 (Assuming loss of Plates and sale
of surplus Slabs at IPT rates)

“Coming together is a beginning,

Keeping together is progress,
Working together is a Success.”

13
13 Cost Reduction & Revenue Maximisation 2020-21 Plan: BSP

Parameter Parameter Savings Target

S. No Parameters Unit
2019-20 2020-2021
1 Coke oven :

Indigenous Prime Coal % 3.5% 8.0% -176.91

Indigenous Medium Coal % 4.1% 5.0% -30.59

Imported Hard Coal % 71.6% 67.0% 272.47

Imported Soft Coal % 20.8% 20.0% 40.18

Coal Blend Cost Rs./T 14169 13904 105.15

b. CO Gas Yield Nm3/TDC 318.5 320 4.55

Total Coke Oven 109.70

2 Sinter Plant :
SP - 2
Reduction in Percentage Sinter return
% 21.8% 21.50 19.50
by 2%
SP - 3
Reduction in Percentage Sinter return
% 21.3% 22.00 43.32
by 2%
Total Sinter Plant 62.82

3 Blast Furnace :
Coal to Hot Metal Kg/THM 953 900 371.08
Total Blast Furnace 371.08
4 Steel Melting Shops:

SMS - II (TMI):

HOT METAL Kg/TCS 1027.40 1035.00 -31.43

Reduction in scrap Kg/TCS 114.40 95.00 123.90

Total TMI SMS ll 1141.80 1130.00

SMS - III (TMI) :

HOT METAL Kg/TCS 979.70 1035.00 -234.49

Reduction in scrap Kg/TCS 173.20 90.00 544.82

Total TMI SMS lll 1152.90 1125.00

Total Steel Melting Shops 402.80

14
 Parameter Parameter Savings Target
S. No Parameters Unit
2019-20 2020-2021

5 Services

Specific power consumption KWH/TSS 538.4 426 306.73

Specific Refractory Consumption Kg/TCS 17.9 18 0.00

Total Services 306.73

Total Cost Reduction ( Rs in Crs ) 1253.13

A Cost Reduction ( Rs / TSS ) 2860

6 Finishing Mills

PM :

Yield of Finished Plates % 90.36% 91.00% 0.08

RSM :

Prime Acceptance % 84.39% 87.50% 85.09

Yield (Rolled to Finish) % 91.14% 91.50% 10.41

URM :

Prime Acceptance % 89.05% 90.00% 23.86

Yield (Rolled to Finish) % 93.27% 94.00% 19.39

Total Revenue ( Rs in Crs ) 138.84

B Total Revenue ( Rs/TSS ) 317

Total Performance Improvement
A+B 3177
( Rs./TSS)
Address your “UTILITIES”

15
14. Actual Rates & Cost:
(A). Rates of Raw Materials:
Rates and Multiplying factors: Unit Ann 19-20 August'20
LSHS Rs/T 3906 2989
Coal Blend cost (incl CDI) Rs/T 14155 10808
Imported coal (Hard) Rs/T 14554 10900
Indigenous Coal (Prime) Rs/T 9978 9930
Indigenous Coal (Medium) Rs/T 8811 9852
Boiler Coal Rs/T 4701 4701
Variable Purchased Power (CSEB Rate) Rs/KWH 9.225 251.761
Variable Cost of power (PPI) Rs/KWH 6.553 7.249
NSR of Naphthalene Rs/T 41616 41476
NSR of Ammonium Sulphate Rs/T 6688 8509
Variable cost of Sulphuric Acid Rs/T 10177 17318
Variable cost of Crude Tar Rs/T 10363 10638
Variable cost of LCB Rs/KL 48722 49216
Variable cost of Process Steam Rs/T 1111 1228
Variable cost of Steam (PP I) Rs/T 1111 1228
Variable cost of Steam (PP II) Rs/T 987 1021
Iron Ore (Fines) incl Undersize lumps Rs/T 1647 1738
Iron Ore (Lumps) Rs/T 1496 1662
Limestone (HS) : Nandini Rs/T 1181 1189
Limestone (LS) : Jaisalmer Rs/T 2599 2867
Limestone (HS) : Kuteshwar Rs/T 2599 2867
Dolomite (HS) Rs/T 1066 985
Manganese Ore Rs/T 7942 8806
CDI Coal Rs/T 11059 10471
Variable Power of all source Rs/KWH 6.231 6.358
Variable cost of Skip Sinter Rs/T 3831 3707
Variable cost of Hot Metal Rs/T 17918 14939
Iron Scrap Rs/T 17374 14379
Avg Cost of Scrap (SMS I) Rs/T 26774 22891
Avg Cost of Scrap (SMS II) Rs/T 26774 22891
Fe-Mn : High Carbon Rs/T 26774 22891
Fe-Mn : Low Carbon Rs/T 128514 128514
Fe-Si Rs/T 26774 22891
Si-Mn Rs/T 75025 78416
Aluminum Rs/T 163866 152627
Variable cost of Blooms (for CBM) Rs/T 26734 25548
Variable cost of CC Blooms (Fin) Rs/T 27143 22861
NSR of All Rails Rs/T 57571 58483
NSR of All Heavy structural Rs/T 43148 37000
There’s no shortage of remarkable ideas,
What’s missing is the will to execute them”
16
 (B) Cost of Services: Rs./Unit
Services Unit Standard 2019-20 Annual 2019-20 Áugust2020
Water THCUM 40084 53830 58265
Electricity (PP- I) THKWH 7226 8412 7843
Electricity (Purchase +Own) THKWH 5418 6632 6488
Steam (PBS) TONNE 966 1292 1253
Chilled Water- I THCUM 12143 107994 0
Chemical Water (PM) THCUM 12806 16779 17820
Oxygen (OP- II) THNM3 2250 4357 6334
Nitrogen THNM3 2250 4357 6334
Rail Transport L.HRS 3206 4730 5705
C.O. Gas GCAL 1066 1171 1202
B.F/ L.D Gas GCAL 1066 1171 1202
Air Blast THCUM 262 457 428
Compressed Air THCUM 461 786 800

(C) Cost of Production 2019-20 (Actual) / 2020-21 (Actual)

Parameter Ann'19-20 August'20
Var Cost Fix Cost Total Var Cost Fix Cost Total
BF Coke Dry 20921 3813 24734 15446 4260 19706
Skip Coke Dry 23642 4503 28145 16919 5584 22503
SP-II 2742 630 3372 2590 730 3319
SP-III 2873 656 3530 2943 933 3876
Hot Metal 17374 4932 22306 14379 6220 20600
SMS -II(Total Cast Steel) 26786 8042 34829 22921 10268 33189
SMS -III(Total Cast Steel) 27731 9086 36817 22856 10186 33042
Crude Steel 26774 8545 35319 22891 10229 33120
Cast Slab 26748 7975 34723 23036 10257 33293
Cast Bloom 26819 8100 34919 22799 10280 33078
Slab Finished 27621 8388 36009 23907 10812 34719
Bloom Finished 27143 8552 35695 23042 10681 33724
Total CCS Finished 27358 8479 35836 23479 10747 34226
Plate Unfinished 28992 9572 38563 25102 12260 37363
Plate Finished 29847 12505 42352 26544 15694 42237
Total Rails Unfinished 29548 10471 40019 25537 13494 39031
Total RSMUF 29517 10379 39896 25548 13405 38953
Total Rails Finished 29846 12881 42727 25856 16606 42461
Total RSM Finished 29846 12881 42727 25879 16603 42482
Rails Finished ( URM ) 29975 14332 44307 24748 14667 39415
Total Rounds 30264 13055 43320 24292 12813 37105
Total Light Structural 31110 15272 46383 24479 12817 37296
Total Merchant Products 30456 13559 44015 24358 12815 37173
Total Wire Rods 30472 15768 46240 26109 19663 45772
Saleable Steel 29709 12921 42629 25246 14726 39972

17
15. Guidance to Line Managers:
(A) Financial Terms:

Cost Expenditure incurred on producing a unit item is defined as “Cost”.

Standard Cost Standard Cost is calculated based on Standard Rate & APP norm for producing One
Unit of Output.
Actual Cost of Expenditure incurred at actual rate and actual usage for producing One Unit of
Production Output.
Variable Cost Variable Cost varies with the level of Production eg. Cost due to raw material, Power,
fuel etc.
Fixed Cost Incurred irrespective of level of production eg. Salary, depreciation, interest.
Working Capital The funds deployed by a company in the form of cash, inventories, accounts
receivables and other current assets. The total sum of the fund so employed is termed
“Working Capital”. i.e. excess of current assets over current liabilities.
Profit Net Sales Realisation (NSR) minus Cost of Product is defined as “Profit”. Profit
generally means Net Profit.
Gross Margin / Net Profit plus Depreciation and Interest is called Gross Profit or Gross Margin.
Gross Profit
NSR Gross Sales Realisation minus Sales related expenditure, Taxes, Duties and Freight
Contribution NSR minus variable cost of production.
Margin
Depreciation Depreciation is the annual charge due to use of equipments / assets.
Interest It is the cost of borrowed money for meeting short term / long term requirements.
Works Cost The total cost minus depreciation and interest.
Overheads Cost of establishments like administration, Town, Medical Services, Education, CMO,
RDCIS, Recreation and Other welfare Activities.
Inventory Stocks of supplies (Raw Material & Stores) as well as finished products.
CBDI Cost before depreciation and interest.
EBIDTA Earnings before interest, taxes, depreciation, and amortization as a percentage of its
total revenue.
INT (WC) Interest on Working Capital
INT (CCS) Interest on Commissioned Capital Schemes.

Thrive to achieve your true self

18
 (B) Important Financial Ratios:
Ratio How to Calculate per Capital Purpose
Employed
1. Return on Net Profit Before Int. & tax Measures the profit a firm earns on
Investment Capital Employed investing one unit of Capital

2. Net Profit Ratio Net Profit Measures Net Margin per unit of
Net Sales Sales.

3. Earnings per Share (E.P.S.) Profit after Tax Shows the returns expected to
No. of Equity Shares accrue to the equity shareholders

4. Turnover ratio Sales Measures how much sale is

Capital Employed generated by investing one unit of
Capital.
5. No. of days’ Inventory Finished Goods Inventory Measures the No. of days Sales that
(Sales /365) are locked in stock

6. Debt/Equity ratio Loan Funds Measures the proportion of

Net Worth borrowed funds in the Capital
Structure
7. Fixed Charges Cover Profit before Interest & Tax Shows the safety margin of lenders
Interest by measuring the no. of times
interest is covered by profit.

8. Fixed Asset Turnover Sales Measures the efficient utilization of

Fixed Assets Assets

9. Current ratio Current Assets Measures short term Debt repaying

Current Liabilities ability

10. Price-Earnings (P/E) ratio Market price per equity share Shows the number of times the
earnings covered by its market
EPS price.

(C) Reading Cost Sheet:

A Cost Sheet comprises of the following:

 Material Cost CBDI
 Operating Cost
 Overheads
Works Cost
 Interest on Working Capital
 Depreciation
Total Cost
 Interest on Commissioned Schemes

19
 In the Cost Sheet, the following fields are shown against each cost element:
 Rate : This field shows the purchase cost of bought out items, or Cost before Depreciation & Interest
(CBDI) of materials transferred from previous processes.
 Quantity : The quantity consumed for a particular item displayed, specific consumption and handling
loss are given separately.
 Fixed / Variable : The value of input elements is segregated into fixed and variable components,
based on the nature of the element. All bought out materials are treated as variable costs; materials
transferred from previous processes are segregated into their respective fixed & variable
components; certain stores items like Refractories, Rolls, Consumable Stores etc, are treated as
variable; Incentive component of Salaries is variable. All other costs, including Depreciation &
Interest are treated as Fixed.
 Cost per Ton : This shows the CBDI per Ton of output.
 Usage : This field shows the sp. consumption of inputs per Ton of output.
 Standard : The Standard Cost/Ton and usage is also displayed alongside, for comparison purpose.
The final cost of output is displayed at the bottom of each Cost Sheet, showing the full break up of
cost. The cost is calculated for the period & up to the period. The Standard Cost is also displayed for
comparison.
16. Role of Cost Coordinators & Cost Stewards for “spreading cost consciousness”

 Main Objectives
1. To spread cost consciousness up to grass-root level
2. To avoid wastages & leakages
3. To generate cost reduction suggestions for implementation
4. To create conducive environment of “innovation”, the key for cost reduction
 First Step Taken
The Cost Coordinators and Cost Stewards of different shops ensure proper understanding of the Cost
Reduction Concepts across the employees & their work place
Their roles & responsibilities are as follows:
1. To identify & report leakages of gases, steam, Oxygen, heat & water
2. To identify & report Wastages of raw materials, consumables and stores & spares
3. To identify & report Power Saving measures
4. To display Cost information & Sensitivity Analysis at suitable locations
5. To conduct Training sessions at regular intervals on cost, to fellow workers with the help of Cost
Coordinators
6. To report excessive pollution within shops & premises
7. To report any unsafe practices whenever found
8. To help the Shop Head in identifying and disposal of Idle Assets
9. To generate and give Cost Reduction Suggestions, after interacting with fellow employees, to Cost
Coordinators for scrutiny and implementation

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 - Recognition For Cost Stewards :
All Cost Stewards will have direct approach to all In-charges of the Shop and the HOD, to report /
discuss any issue regarding Cost Reduction and to synergize the Cost reduction efforts across the
Plant.
- System of operating practices for “Cost Stewards- & Cost Coordinators”
All Cost coordinators & Cost Stewards should practise Cost-effective functioning in their respective
Deptts. / Areas and set example for others to follow. Should maintain cool & balanced Mind-set
and patiently pursue the task of educating Employees towards Cost-effective functioning. No ego /
no dispute / no complaint / no upset / no order…but should work with cooperative & positive
spirit, and bring about turnaround in imbibing cost culture across the organization. A Real Effort in
Building Cost Culture in the organization is no less than bringing a Revolution and demands some
sacrifice too ! Let us leave a mark before we leave the organization … and contribute in creating
such systems and procedures that can instill an innovative atmosphere all around!!

- Functioning Of Cost Coordinators:

 All Cost Coordinators are to meet all Cost Stewards regularly and discuss with them all cost
reduction issues besides updating them on Cost of Production and cost of Services related to their
deptt. & area of Operation.
 To help Cost Stewards in designing and conducting the training programs / interactions for the
Employees of the respective shops at appropriate intervals.
 Encouraging Cost Stewards to generate Cost Reduction Suggestions with the involvement of
Employees of their respective Areas.
 Collection & Scrutiny of Cost Reduction Suggestions generated by the Employees which are
practical & implementable and classifying them as :
- to be implemented by the individual Suggestor
- to be implemented by group of Employees with the initiative of Cost Stewards
- to be implemented by inter-disciplinary group in the Shop with the initiative of Cost Coordinator
/ HOD
- To be brought to the notice of Cost Control Deptt. Where Cost Reduction suggestions need help
and coordination by other Deptts.
 In either case, where the Suggestion is being implemented / rejected, the feedback is to be given
to the employee Suggestor through Cost Stewards, at the earliest.
 All Cost Coordinators should be a Source of inspiration & encouragement to Cost Stewards and
take care that every effort is documented.
- Cost Stewards:
 All Cost Stewards should Interact at regular intervals in evoking Cost Consciousness among
Employees in their respective Areas
 Cost Stewards must ensure that the people of their area work with Safety & Cost-effective working
 Cost Stewards should encourage creative suggestions from all the Employees to improve working
conditions, effective utilization of assets to bring Cost Reduction.
 All the above efforts can only be successful – when ‘HODs’ takes interest and spares time to
encourage and implement suggestions!!!
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17. Cost Coordinators of Plant & Mines:
विभाग नाम: श्री/श्रीमती पदनाम

माईंस हे मत
ं दोषी उप.म.प्र.
ओ.एच.पी. एस.के.ससन्हा म.प्र.
सी.ओ.एण्ड सीसीडी बी.के.ससन्हा म.प्र.
एस.पी.-2 मो. अनीस मजहर म.प्र.
एस.पी.-3 वििेक श्रीिास्ति सहा.म.प्र

ब्लास्ट फनेस प्रतीक पांडे उप.प्र.

आर.एम.डी. एस के राय ि प्र
एस.एम.एस.-3 डी.विजजत म.प्र.
एस.एम.एस.-2 जजतेन्र मीणा ि प्र
आर.एम.पी.-1 आर.के.चौधरी सहा.म.प्र
आर.एम.पी.-2 असिषेक अमत
ृ उप.प्र.
आर.ई.डी-1 फफलोसमना एक्का उप.प्र.
आर.एस.एम. एन.के. खरे म.प्र.
मचेंट समल विनय कुमार यादि सहा.म.प्र
िायर राड समल प्रणि कुमार उप.म.प्र.
प्लेट समल िास्कर रॉय म.प्र.
इंजीननयररंग शाप्स राजीि सोनटके म.प्र.
इलेजक्िकल एस. लक्ष्मी म.प्र.
पी.पी.-1 पी कृष्णमोहन म.प्र.
यटु टसलटीस मो.नदीम खान म.प्र.
एम.आर.डी. दीपंकर रॉय म.प्र.
ई.एम.डी. तजृ प्त िमाा सहा.प्र
इन्िायरमें ट मैनेजमें ट बी अनरु ाधा ि प्र
आई.एण्ड डब््यु बी एस.के. अग्रिाल म.प्र.
टी एण्ड डी सम
ु ीत ससंघ सहा.म.प्र
एफ एण्ड एस एस जजतेन्र मोटिानी म.प्र.
आर.सी.एल. अनि
ु नू त उप.प्र.
माकेटटंग जगन्नाथ रथ म.प्र.
फायनेंस ह स गगलहरे उप.म.प्र.
ए.आर.एस. संतोष कुमार जॉजा म.प्र.
टी.एस.डी. म दे शपांडे म.प्र.
य.ु आर.एम डी एन बेहरा उप.म.प्र.

22
18. Cost Control Drive:
Basic philosophy of our cost control drive is to produce Quality Steel at minimum cost by better cost
management. To manage cost, we need to identify the controllable elements of cost and by applying
innovative methods we should achieve reduced cost of production.
Our Team
Cost Management Department
Shri/ Smt Designation Mobile No.
K.Lalita GM 9407982491
Roopam Kumar GM 9407982013
Neena Rathore DGM 9407981925
Sudharani Dash Sr.Mgr 9407984180

J. V. Vibha Asstt. Mgr 9407983422

Sunil Kumar Varma RMI

Priyanka Sharaf Statistical Asstt.

Finance Department
Shri Designation Mobile No.
Avinash Bodele GM 9407982300
N V Subbarao DGM 9407982330
H.S. Gilhare DGM 9407982357
Alankar Samaddar Dy.Mgr 9407982358

Our Request
COST REDUCTION is everybody’s business - In fact YOU are the best cost-controller on your job at site.
If you need any help in reducing costs, kindly contact us on any of these phone nos. :
61428 /61375/60656/61399/61408/61423
We regret for any mistake and appreciate, if you could bring it to our notice.
Work in a TEAM to achieve maximum “COST REDUCTION”

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