Report Essaar Steel

A
Summer Training Report

ESSAR STEEL Ltd.
In Partial fulfillment of the
Requirement for the degree of
BACHELOR OF BUSINESS ADMINISTRATION
Submitted By:
(Shaikh Mohammed YunusRafiquddin)
Roll No. (24)
S.Y.B.B.A. (IVth SEMESTER) (CBCS)
Submitted To:
(Dipesh Patel)
Assistant Professor
Smt. Z. S. Patel College of Management and Technology
BBA Programme
PalanpurJakatnaka,
Surat.
Affiliated to
VEER NARMAD SOUTH GUJARAT UNIVERSITY, SURAT
May June 2014
DECLARATION
I Shaikh Mohammed YunusRafiquddin, hereby declare that the report on summer
training in ESSAR STEEl Ltd is a result of my own work and my indebtedness to other
work/publication if any have been only acknowledged.
Place:SURAT
Date:
MOHAMMED YUNUS
Name of Student: SHAIKH
ACKNOWLEDGEMENT
I am very thankful to VER NARMAD SOUTH GUJARAT UNIVERSITY that provides a platform and
opportunity to do project work and enhance my managerial knowledge.I would like to thank my college
SMT.Z.S.PATEL COLLEGE OF MANAGEMENT AND TECHNOLOGY for allowing me to make
this project on summer training.
Also,I am very thankful to ESSAR STEEL LTD who provided all the information without any
hesitation and also gave their valuable time and guidance.
After that I would like to thank my college principalMr.Dipesh Patel for providing guidance and
helping me in solving my project related problems.
At the end, I thank my parents and friends who motivated me and boosted my confidence.
EXECUTIVE SUMMARY
Essar Steel India Limited, an integrated steel producer, manufactures and sells steel products primarily in
India. The company offers hot rolled, cold rolled, and galvanized steel products; color coated sheets; and
pipes and plates, as well as shot blasted and primed plates, factory welded beams, burnt-to-shape plates,
trapezoidal blanks, and chequered plates. It provides steel products for use in engineering, shipbuilding,
automotive, construction, railways, white goods, line pipes, wind engineering and power generation, boilers
and pressure vessels, and yellow goods. The company operates approximately 350 retail outlets for steel
under the EssarHypermart brand name.
In this report the main content of the project is the information of steel industry and details of essar steel
ltd.the report contains details of four important department of the company.Production,Marketing,Human
Resource and Finance department are explained in detail.The project explains the functioning of four
important departments and their contribution to the company.
Table of Contents
ACKNOWLEDGEMENT................................................................................3
EXECUTIVE SUMMARY...............................................................................4
GENERAL INFORMATION................................................................................1
1.1 Industry Background.................................................................................................................................. 1
1.1.1 1991-2011.................................................................................................................................... 2
1.2 COMPANY BACKGROUND........................................................................................................................ 5
1.3 VISSION................................................................................................................................................. 6
1.5 MILESTONES.......................................................................................................................................... 6
COMPANYS EXECUTIVES............................................................................................................................. 8
1.6 Board of directors..................................................................................................................................... 9
1.7 PRESENT PROFILE................................................................................................................................ 10
1.8 PRESENT PRODUCT MIX........................................................................................................................ 12
1.9 Strategies for Future Growth and Development............................................................................................... 14
CHAPTER-2 PRODUCTION DEPARTMENT...........................................................16

2.1 ORGANIZATION STRUCTURE.................................................................................................................. 16
2.2 Types of Product..................................................................................................................................... 17
2.3 PRODUCTION PROCESS AND CONTROL................................................................................................... 17
2.3.1 Hazira-steel-complex.......................................................................................................................... 17
2.3.2 Bailadilla ore beneficiation plant........................................................................................................... 18
2.3.3 Vishakapatnampelletisation plant........................................................................................................... 18
2.3.4 PROCESSING ROUTE:..................................................................................................................... 18
2.4 STEEL MAKING PROCESS.................................................................................................................. 20
HBI PROCESS:-...................................................................................................................................... 20
2.4.1 SMP PROCESS:............................................................................................................................... 21
2.4.2 ELECTRIC ARC FURNANCE:............................................................................................................ 21
2.4.3 Melting Process:............................................................................................................................... 22
2.4.4 LADLE REFINING FURNACE:-.......................................................................................................... 22
2.4.5 REFINING PROCESS-....................................................................................................................... 23
2.4.6 VACUUM DE-GASSING:-.................................................................................................................. 23
2.4.7 CASTER:-....................................................................................................................................... 23
2.5.1 REHEATING FURNACE................................................................................................................. 25
2.5.2 ROLLER TABLE.............................................................................................................................. 26
2.5.3 RECUPERATING ZONE.................................................................................................................... 26
2.5.4 PRE-HEATING ZONE....................................................................................................................... 26
2.5.5 HEATING ZONE.............................................................................................................................. 26
2.5.6 SOAKING ZONE........................................................................................................................... 27
2.5.7 DESCALER.................................................................................................................................... 28
2.5.8 Roughing Mill.................................................................................................................................. 28
2.5.9 COIL BOX AND CROP SHEAR:-......................................................................................................... 29

2.5.10 FINISHING MILL........................................................................................................................... 29
COILER:............................................................................................................................................... 30
2.6 INVENTORY MANAGEMENT SYSTEM....................................................................................................... 30
2.7 TYPES OF MATERIAL HANDELING EQUIPMENT........................................................................................ 31
2.7.1 Barge Un-loader.............................................................................................................................. 31
2.7.2 Gantry Cranes.................................................................................................................................. 32
2.7.3 Travelling Tripper Ship Loader............................................................................................................. 32
2.7.4 EOT Crane ST Bay Higher................................................................................................................... 33
2.8 QUALITY ASSURANCE............................................................................................................................ 33
2.9 FINISHED PRODUCT DETAILS................................................................................................................ 33
Products................................................................................................................................................. 33
CHAPTER-3 MARKETING DEPARTMENT.............................................................37

3.1 Organization Chart.................................................................................................................................. 37
3.2 ACTIVITIES OF MARKETING DEPARTMENT............................................................................................... 38
3.3 Major Competitors.................................................................................................................................. 38
3.4 Customer Satisfaction............................................................................................................................... 39
3.5 Distribution Channel................................................................................................................................ 40
DISTRIBUTION OUTLET......................................................................................................................... 41
3.6 Promotional Measures.............................................................................................................................. 41
CHAPTER-4 HR DEPARTMENT........................................................................43
4.1 ORGANIZATION STRUCTURE................................................................................................................. 43
4.2 ACTIVITIES OF HR................................................................................................................................ 44
4.3 Recruitment and Selection......................................................................................................................... 44
STEPS IN RECRUITMENT....................................................................................................................... 45
Process of Selection...................................................................................................................................... 46
4.4 Personal Details of Employees.................................................................................................................... 49
4.5 PROMOTIONS....................................................................................................................................... 49
CHAPTER-5 Finance Department........................................................................51

5.1 ACTIVITIES OF FINANCE DEPARTMENT.................................................................................................. 52
5.2 Accounting Policies................................................................................................................................. 52
5.3 COSTING OF PRODUCT......................................................................................................................... 53
Prerequisites:.......................................................................................................................................... 53
Overview:.............................................................................................................................................. 53
5.4 RATIO ANALYSIS................................................................................................................................... 56
5.5 SOURCES OF FINANCE.......................................................................................................................... 57
5.6 Stakeholders.......................................................................................................................................... 58
BIBLIOGRAPHY.......................................................................................... 59
ANNEXURE............................................................................................... 60
SUMMER TRAINING REPORT ON ESSAR STEEL LTD.
GENERAL INFORMATION
1.1 Industry Background
Indians were familiar with iron and steel during the Vedic age more than 4,000 years
ago. It is evident from the Iorn Pillar at the outskirts of Delhi. But the seeds of modern
steel industry were sown by Sir Jamshedji Tata in 1907 when Tata Iron & Steel
Company Ltd. (TISCO) was set up. The first steel ingots were rolled in TISCO in
1911. This was followed by the establishment of the Mysore Iron and Steel Works in
1936, later renamed as Visvesvaraya Iron & Steel Works. Three years later in 1939,
production of steel started in another private steel company, the Indian Iron & Steel
Company, now a subsidiary of the Steel Authority of India Limited (SAIL). Thus, at
the time of independence, India possessed a small but viable steel industry with an
annual capacity of 1.3 million tonnes. In 1951, finished steel production in India was
1.1 million tonnes.
In the era of planned economy, iron and steel, a core and basic sector, received the
full attention of the Government. It became a key sector for public investment for the
first Five Year Plan itself. The year 1953 saw the first agreement being signed with
the Germans to establish a 1 million tonne plant at Rourkela in Orissa. Two more
agreements for setting up steel plants, at Bhilai with the erstwhile USSRs assistance
and another at Durgapur with the help of U.K. were signed in 1956. Successive
capacity augmentations at Bhilai, Durgapur and Rourkela saw their capacity increase
to 2.5, 1.6 and 1.8 million tonnes per annum respectively by the end of the 60s.
A new plant at Bokaro with a capacity of 2.5 million tonnes per annum went into
production in 1973-74. The year 1978 witnessed a major restructuring of these steelmaking public sector units giving birth to the public sector giant, SAIL, having a
"Navaratna" status today, with an aggregate capacity of over 10 million tonnes. The
first shore-based public sector integrated steel plant, viz. The RashtriyaIspat Nigam
Limited of 3 million tonnes per annum capacity went into production in August, 1992.
During the first two decades of planned economic development, i.e. 1950-60 and
1960-70, the average annual growth rate of steel production exceeded 8 per cent.
During 1970-80, this growth rate in steel production came down to 5.7 per cent per
annum and gathered up marginally to 6.4 per cent per annum during 1980-90.
Smt. Z. S. Patel College of Management & Technology
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Until the 1990s the iron and steel sector was by and large the exclusive preserve of
only the public sector, the sole exception being TISCO. The new economic policy
announced in 1991 was no doubt a significant milestone in the evolution of the Indian
economy. The process of the economic reforms ushered in substantial liberalisation of
the policies and institutions governing trade , industry and finance. With this the
complexion of Indian iron and steel industry has undergone a sea change.
Iron and steel industry became one of the foremost sectors to be opened under the
New Economic Policy. Substantial private investments flowed in with the consequent
changes heralding a new beginning for the interplay of free market enterprise in this
vital sector.
1.1.1 1991-2011
The economic reforms initiated by the Government since 1991 have added
new dimensions to industrial growth in general and steel industry in particular.
Licensing requirement for capacity creation has been abolished, except for certain
locational restrictions. Steel industry has been removed from the list of
industries reserved for the public sector. Automatic approval of foreign equity
investment upto 100% is now available. Price and distribution controls have been
removed from January, 1992, with a view to make the steel industry efficient and
competitive. Restrictions on external trade, both in import and export have been
removed. Import duty rates have been reduced drastically. Certain other policy
measures such as reduction in
import duty of capital goods, convertibility of
rupee on trade account, permission to mobilise resources from overseas financial

markets andrationalisation of existing tax structure for a period of time have also
benefited the Indian steel industry.
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Total Finished Steel (alloy+non-alloy): Production for sale (million

tonnes)
Year
Main
Producer
s
Majors and
Other
Producers
Gran
d
Total
% of share of
Majors and Other
Producers
1991-1992
7.964
6.270
14.23
4
44.0
1992-1993
8.551
8.335
16.88
6
49.4
1993-1994
8.912
8.112
17.02
4
47.7
1994-1995
9.720
10.365
20.08
5
51.6
1995-1996
10.731
13.562
24.29
3
55.8
1996-1997
10.689
15.635
26.32
4
59.4
1997-1998
10.580
16.840
27.42
0
61.4
1998-1999
10.045
17.513
27.55
8
63.5
1999-2000
11.407
19.088
30.49
5
62.6
2000-2001
12.686
19.670
32.35
6
60.8
2001-2002
13.198
20.178
33.37
6
60.5
2002-2003
14.534
22.632
37.16
6
60.9
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2003-2004
15.383
25.326
40.70
9
62.2
2004-2005
15.824
27.689
43.51
3
63.6
2005-2006
16.413
30.153
46.56
6
64.8
2006-2007
17.614
34.915
52.52
9
66.5
2007-2008
18.020
38.055
56.07
5
67.9
2008-2009
17.216
39.948
57.16
4
69.9
2009-2010
18.038
42.586
60.62
4
70.2
2010-2011
18.406
50.215
68.62
1
73.2
2011-2012
(Prov)
17.842
55.574
73.41
6
75.7
1.2 COMPANY BACKGROUND
The Essar Group was founded in 1969, by brothers Mr ShashiRuia and Mr Ravi Ruia.
The 21st century for the Group has been all about consolidating and growing the
businesses
The Ruia familys origins are in Rajasthan. Sometime in the 19th century, they moved
to Mumbai and set up their own business. In 1956, Mr NandkishoreRuia, father of Mr
ShashiRuia and Mr Ravi Ruia, moved to Chennai, capital of the south Indian state of
Tamil Nadu, to begin independent business activities. He mentored his two sons in the
intricacies of business. When Mr NandkishoreRuia passed away in 1969, the brothers
laid the foundation of the Group.
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The Essar Group began its operations with the construction of an outer breakwater in Chennai
port. It quickly moved to capitalize on every emerging business opportunity, becoming Indias
first private company to buy a tanker in 1976. The Group also invested in a diverse shipping
fleet and oilrigs, when the Government of India opened up the shipping and drilling
businesses to private players in the 1980s.
Then, in the 1990s, Essar began its steelmaking business by
setting up Indias first sponge iron plant in Hazira, a coastal
town in the western Indian state of Gujarat. The Group went
on to build a pellet plant in Visakhapatnam, and eventually a
fully integrated steel plant in Hazira.
Through the 1990s, with the gradual liberalization of the Indian economy, Essar seized every
opportunity that came its way. It diversified its shipping fleet, started oil & gas exploration
and production, laid the foundation of its oil refinery at Vadinar, Gujarat, and set up a power
plant near the steel complex in Hazira. The construction business helped the Group build most
of its business assets. Essar also entered the GSM telephony business, establishing Indias
first mobile phone service in Delhi (branded Essar Cell phone) with Swiss PTT as the joint
venture partner.
The 21st century for the Essar Group has been all about consolidating and growing
the businesses, with mergers and acquisitions, new revenue streams and strategic
geographical expansion.
1.3 VISSION
We will be a respected global entrepreneur, through the power of positive action.
1.4 MISSION
We are committed to innovative growth, through our personal passion, reinforced by a
professional mindset, creating value for all those we touch.
1.5 MILESTONES
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With over 20 years of experience in the steel sector, we have an

established operating track record of growth and expansion.
FY12
Commissioned 6 MTPA pellet plant at Paradip
Commissioned service centre at UAE
FY11
Doubled capacity at Hazira complex
Acquisition of Servosteel, UK
FY10
Acquired steel assets of Shree Precoated Steels
Commissioned plate and pipe mills at Hazira
FY09
Established three new service centres
Ramped up Algoma capacity to 4.0mtpa
FY08
Acquired Algoma Steel and Minnesota Steel
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FY07
Increased steelmaking capacity to 4.6mtpa
Implemented DRI module V, taking DRI capacity to 5.0mtpa
Commissioned 8.0mtpa beneficiation plant and 267km slurry pipeline
Increased Vizag pellet plant capacity to 8.0mtpa
FY06
Started first steel Hypermart
Added cold rolling and galvanising capacity of 1.2mtpa
FY04
Implemented DRI module IV and upgraded existing modules, taking total DRI
capacity to 3.5mtpa
FY02
Increased steelmaking capacity to 3.6mtpa
FY99
Began production at pellet plant at Vizag with 3.3mtpa capacity
FY97
Started production at greenfield cold rolling and galvanising complex at PT Essar
Indonesia
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FY96
Commissioned steelmaking capacity of 1.6mtpa
FY93
Installed third DRI module, increasing total DRI capacity to 1.5mtpa
FY89
Installed 2 DRI modules at Hazira with capacity of 0.9mtpa
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Mr J Mehra Director, Essar Group
Mr Malay Mukherjee CEO, Steel Business Group
MrNareshNayyar CEO, Energy Business Group

MrShishirAgarwal CEO, Exploration & Production Business
Mr Sanjay Mehta CEO, Shipping & Logistics Business Group
Mr Rajiv Sawhney CEO, Telecom Business Group
MrAparupSengupta CEO, Aegis
MrAlwyn Bowden CEO, Projects Business Group
MrPradeep Mittal CEO, Minerals & Mining Business
MrVikashSaraf Director, Strategy & Planning, Essar Group
Mr VG Raghavan CFO, Essar Group
MrAdilMalia Group President, Human Resources
Mr SM Lodha Group President, Assurance and Cost Control

Mr Sunil Bajaj Head, Corporate Relations Group
COMPANYS EXECUTIVES
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1.6 Board of directors

Listed here are the promoter directors of the Essar Group. Each company under the
Group is independently run by a team of professionals
Mr ShashiRuia
Chairman
Essar Group
Mr Ravi Ruia
Vice Chairman
Essar Group
Mr PrashantRuia
Group Chief Executive
Essar Group
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Mr Anshuman Ruia
Promoter Director
Essar Group
Ms Smiti Kanodia
Promoter Director
Essar Group
Mr Rewant Ruia
Promoter Director
Essar Group
1.7 PRESENT PROFILE
Type
Public company
Industry
Steel
Founded
1998
Headquarters Mumbai[1]
Key people
Mr.RaviRuia, Chairman
DilipOommen, CEO
Revenue
350 billion (US$5.9 billion)[2]
Parent
Essar Group
Subsidiaries
ESSAR Steel India Limited,Essar Steel

Algoma, EssarHypermart, Essar Steel
Minnesota LLC.[3]
Website
www.essar.com
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Essar Steel is a global integrated steel producer with an annual capacity of 14 million
tonnes with a strong presence in intensive steel consuming markets of Asia and North
America. It has operations in four countries
A 10 MTPA integrated facilities in India
A 4 MTPA steel plant in Canada
A 7 MTPA Taconite plant under execution in USA
A 0.4 MTPA downstream complex in Indonesia
Essar Steel India is an integrated steel producer with an annual production capacity of
10 million tonnes. Essar Steels manufacturing facility comprises ore beneficiation,
pellet making, iron making, steel making, and downstream facilities including cold
rolling mill, galvanising, pre-coated facility, steel processing facility, extra wide plate
mill and a pipe mill. The steel plant located at Hazira has modern infrastructure like a
power plant and a port that can handle 30 million tonne cargo annually.
With a focus on value added products, it produces over 300 grades of steel
conforming to quality standards of international certification agencies like API, ABS,
NACE, Lloyds Register to name a few. Essar Steel uses information technology
extensively for its operations thereby ensuring consistent quality of its products.
Essar Steel has set up a 1.5 MTPA plate mill and a 0.6 MTPA pipe mill at Hazira to
add further value to its product portfolio. With one of Indias largest steel processing
and distribution network with a capacity of 4 MTPA located at several industrial hubs,
Essar Steel manufactures customised products catering to a variety of industry
segments.
Essar Steel implements rigorous testing and inspection processes to make sure
customers get a product that conforms to the highest standards of accuracy,
consistency and quality. It is conferred with ISO: 9001:2000, ISO 9002, ISO 14001,
ISO 27001, OHSAS 18001:1999 etc.
Sustainability has been given due importance in design and operations and the
company has become a zero waste company. It has received many accolades and
recognitions from reputed institutions like Centre for Science and Environment, Water
Digest, World Steel Association, Golden peacock, Green Tech foundation, CII, CIIITC Sustainable Development Center, Carbon Disclosure Project to name a few.
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1.8 PRESENT PRODUCT MIX
Hot rolled
Essar Steel has state-of-the-art hot rolling mills with a rated capacity
of 8.6 MTPA. The facilities include a conventional hot rolling mill
and a modern compact strip mill.
............................................................................................................................
Cold rolled
Essar Steel holds a leadership position in cold rolling with a capacity
of 2 MTPA. The technology available in the complex ensures
production of high quality products for critical applications in
automotive, white goods, construction, etc.
............................................................................................................................
Galvanised
Essar Steel produces world-class galvanised steel products in its
galvanising facility with a capacity of 1 MTPA.
............................................................................................................................
Colour coated
Essar Steel colour coated sheets are manufactured in a state-of-theart 0.4 MTPA facility. It produces high-quality colour coated sheets
that add aesthetic beauty to the strength of steel.
............................................................................................................................
Plates
The Essar Steel plate mill with a capacity of 1.5 MTPA is Indias
widest plate mill producing 5 metre wide plates. The mill is equipped
with the latest technology to produce value-added plates for
specialised applications that conform to international standards.
............................................................................................................................
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Pipes
The Essar Steel pipe mill is one of Indias finest pipe mills with a
capacity of 0.6 MTPA and the only one with an integrated raw
material source.
............................................................................................................................
Shot blasted and primed plates
Essar Steel's shot blasted and primed plates can be directly used and
allows for excellent adhesion of prime coat and paint.
............................................................................................................................
Factory welded beams
Essar Steel's factory welded beams are custom-made and ready-touse saving labour, service and operational costs.
............................................................................................................................
Burnt-to-shape plates
Essar Steel burnt-to-shape offers tailor-made cutting solutions with
its 30,000 TPA oxy / plasma cutting facility and JIT (Just-In-Time)
supplies.
............................................................................................................................
Trapezoidal blanks
Essar Steel trapezoidal plates offer a customised solution designed to
reduce material wastage. They simplify procurement for the end-user
by meeting their specific requirements and help reduce operation
costs.
.........................................................................................................................
Chequered plates
The Essar Steel chequered plates are high friction plates that ensure
maximum skid resistance. Available in tear drop pattern with a
maximum bead height of 1.2mm, they give products an added
advantage.
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1.9 Strategies for Future Growth and Development

Sustainable development is integral to Essar Group's overarching business model. The
Group's approach to Sustainability focuses on economic, social and environmental
activities.
At Essar we consider sustainability as a key driver for decision-making. A company
cannot sustain itself without considering stakeholders' perspectives alongside business
profitability. Our aim is to drive sustainability in the organisation by way of
formulating sustainability strategies, creating awareness about sustainability issues
and reporting across its business. As part of the continual improvement process, we
have adopted a Group level sustainability policy.
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CHAPTER-2 PRODUCTION DEPARTMENT

2.1 ORGANIZATION STRUCTURE
Page
Worker
2.2 Types of Product

1. Hot Rolled
2. Colled rolled
3. Galvanized
2.3 PRODUCTION PROCESS AND CONTROL
2.3.1 Hazira-steel-complex
Essar steel complex at hazira, gijarat, houses a 5.0 MTPA(Metric tone per Annum)
sponge iron plant the worlds largest gas-based HBI producer. The plant provides raw
materials for their state-of-the-art 3.0 MTPA hot rolled coil (HRC) plant, the first and
largest of Indias new generation steel mills. This plant fed with inputs from three
electric arc furnaces and two casters, is
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Increasing its capacity to 4.6 MTPA .the complexs sophisticated infrastructure
includes independent water supply and power oxygen and lime plants, a township and
a captive port capable of handling up to 8MTPA of cargo with modern handling
equipment like barges and floating cranes.
2.3.2 Bailadilla ore beneficiation plant

At bailadilla, where some of the worlds richest and finest ore is available,
essar has set up a beneficiation plant of 8million tones per annum (MTPA) capacity,
which ensures the highest quality iron ore. The iron ore slurry is pumped through a
267 km.pipeline (the second longest in the world) to the pellet plant, yielding
advantages of quality, cost and real time inventory management.
2.3.3 Vishakapatnampelletisation plant

The slurry is received at our pellet plant at vishakapatnam, which has a capacity of
8MTPA, providing vital raw material for the steel plant at hazira.
2.3.4 PROCESSING ROUTE:

IRON ORE PROCESSING: Iron ore is got from the mines of Baliadila in Madhya Pradesh.
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The raw materials are screened to remove the fines size of max 50 50 mm
The fines of the iron ore are sent to high grade palletizing plant at Vizag.
Iron ore is crushed into fines & sintered into 5mm spherical porous pellets.
Imported pellets are used in certain cases to improve the quality of the pellets.
It is screened from the fines before charging for the production of HBI/DRI.
FLOW CHART
Iron ore- Bailadila, Mp
Pelletization plantVizag
Essar Steel, Hazira
Fine Size
PELLETISING
Big Size
Right size
HBI Plant
DRI
CRUSHING
HBI
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2.4 STEEL MAKING PROCESS

IRON ORE- BAILADILA
PELLETS- VISHAKAPATNAM
HBI PLANT
STEEL MELTING
SHOP / MELTING
REFINING
LADLE FURNANCE
VACUMM DEGASSING
CASTER/ CONTINUOUS
CASTING OF SLAB
SLABYARD
SCARFING OF SLAB
HOT STRIP MILL
SERVICECENTER
COILS FOR FUTHER
PROCESSING
DISPATCH TO
DOMESTIC
CUSTOMERS
PICKLING LINE
DISPATCH TO
EXPORT
CUSTOMERS
COLD ROLLING
MILL
GALVANISING LINE
CUT TO LENGTH
DISPATCH TO
DOMESTIC/ EXPORT
CORRUGATION
HBI PROCESS:ESSAR is the first midrex plant to implement HOT DRI transfer to an electric arc
furnace. The system has been a great success. Depending upon the quality of the steel
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required a particular ratio of raw iron ore and the pellets approximately 60:40 or 70:30
are charged in to the hopper of the vertical shaft furnace. The production process is
the midrex type by which the burden travels from top to bottom while the bustle gas
i.e. the reducing atmosphere CO and N2 necessary for the reduction of the Iron oxide
to pure Iron in the form of briquettes and DRI. One third of this directly reduced iron
is taken in the form of HOT DRI at a temperature of around 700 C in to a 90 ton
capacity vessel. This is charged into EAF which reduces the power requirement of the
furnace. Remaining briquettes are quenched in cold water to around 50 to 60 C.
At last we get HBI, DRI.
In the process following reaction take place

Fe2o3 + CO
Fe3O4 + CO2
Fe3O4 + CO
FEO + CO2
FEO + CO
The
FE + CO (95-96)
chemistry of the Directly reduced iron consists of
Metallic Fe ---- 84%
Total Fe ---- 92%
Feo --- 6 to 8%
C ---- 2-3% is available
2.4.1 SMP PROCESS:

The process done at Steel Melting Plant is
1) Melt the steel at D.C. electric arc furnace
2) Refining and alloy additions of the steel in the ladle furnace
3) Continuous casting of the hot metal as slabs at casters.
2.4.2 ELECTRIC ARC FURNANCE:

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The metallic iron, HBI, Steel scrap and Hot DRI are fed in to the Electric arc furnace
as raw material and melted at 1570-1600 C by the electric arc formed.
Input Material: HBI

DRI
Scrap
Electric Power-D.C.
Graphite Electrode
One electrode at the top and four at the bottom.
Gases:
Oxygen
Nitrogen
Argon
2.4.3 Melting Process:

The capacity of EAF is maximum 150 ton.
In the EAF, one big Graphite Electrode which is at the top of the Furnace that is
vertically placed into the steel and four other electrodes acts as a anode, which are
imbedded at the bottom of the Furnace
The arc is struck between the graphite Cathode and the liquid steel.
A very high temperature around the melting temperature of the steel is thus obtained
which melts the entire burden in the furnace to produce molten steel.
The molten liquid steel thus obtained is tapped in to the ladle and sent for further
refining and alloy additions.
2.4.4 LADLE REFINING FURNACE:In ladle Refining Furnace steel is refined and the alloy additions are made.
There are three Ladle furnaces.

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Capacity of Each Furnace is 180 ton.

Input Material:
Molten Steel
Electric Power
Fluxes:
a) Lime
b) Do lime
De-Oxidizing agents:
Aluminum in the form of the Wire.
2.4.5 REFINING PROCESSThe ladle with the molten steel is brought to the ladle furnace.
Three graphite electrode are immersed in to the furnace to maintain the temperature
and argon gas is purged from the bottom to prevent the re oxidation of the steel.
Alloy additions are done in the form of Ferro alloys depending upon the final
chemistry needed.
All the above processes are performed until the required chemistry is got by verifying
alloy pop shaped sample taken from the ladle and analyzed in the spectrometer.
Addition of Lime is done to remove Sulphur and Oxygen.
2.4.6 VACUUM DE-GASSING:Further refining after LRF, is required for certain special grades, which is performed
at Vacuum de-gassing furnace.
2.4.7 CASTER:There are two continuous casters.
The liquid steel is transported in the ladle to the ladle turrent , which is just above the
caster at required time for casting in to slab.
Then the molten steel is filled into the turdish over which cast powder is added for the
purpose of lubricating of steel during casting.
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From tundish the molten melt passes through the oscillating copper mould, which is
coated with nickel.
The dummy bar pulls the first form slab after processing through a series of water
coolers.
Finally the hot slab is cut to the required size with the help of the torches.
This is how Slab is formed. After 3 days of Cooling it is ready to get processed in
HSM.
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2.5 The process can be divided into the following sections:

Reheating Furnace
Primary reducing the slab
Roughing Mill
Coil box
Finishing Mill
Down Coiler
Coiling Yard
2.5.1 REHEATING FURNACE
There are two reheating furnaces of the same kind.
It receives the slab at normal temperature and heat it around 1250

Celsius.
The temperature depends on the grade of the slab and the thickness of
the strip to be achieved.
The furnace can be divided into four parts namely:Recuperating zone

Pre-heating zone
Heating Zone
Soaking Zone
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The temperature in every part of the furnace is measured using sensors

and the fuel is injected accordingly.
The total length of the furnace is about 45 m
The various parts before and after the reheating furnace are discussed
below:
2.5.2 ROLLER TABLE

There are five groups driven Roller Tables before the furnace.
These tables carry the slab from the crane to the furnace entry.
This is sensed by sensors and the slab is transported to the furnace entry point. Once
there is enough space in the furnace, the furnace entry door opens and the pusher
rod pushes the slab into the furnace.
The slab enters the Recuperating Zone.
2.5.3 RECUPERATING ZONE

This zone is the first zone in the furnace and no fuel input and hence no burners.
The hot fuel gas generated due to the burning of the fuel in the other zones passes
through this zone.
This hot gas transfers heat from it to the slabs and thus heating the slabs.
2.5.4 PRE-HEATING ZONE

This is the first zone where the slab is heated using the fuel.
The fuel is injected using top and bottom side of the furnace
There are 16 burners 8 on the top and 8 on the bottom of the furnace.
The temperature in this zone is around 1320 C.
2.5.5 HEATING ZONE

This zone is similar to the pre-heating zone
The temperature is more or less same as that in the pre heating zone.
This zone has a total of 16 burners, 8 on the top and 8 on the bottom.
The temperature here is around 1300 C. The temperature here is maintained so
that the temperature here is uniformly distributed in the slab.
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2.5.6 SOAKING ZONE

This zone has 28 burners, 20 on the top and 8 on the bottom.
This zone is separated from the rest of the zone of the furnace by allowing only a
small gap from the other zone to this zone.
The temperature of the tail end is maintained a little higher than the head end
because the tail end losses more heat than the head end before being rolled.
This is because the tail end is exposed to more heat than the heat end
before being rolled.

The slab is heated around 1250 Celsius. Depending on the grade of
the slab. Once the slab reaches the desired temperature at the end of the
furnace, the exit door opens and the slab extractor comes in and lifts
the slab and takes it to the furnace exit Roller table.

There are also sensors inside the furnace to measure the temperature at
every part of the furnace.

Based on this temperature feedback the amount of fuel entering the
furnace is controlled.
2.5.7 DESCALER
The descaler is used to remove the scales from the both the surface of the slab.
When the slab passes through the descaler water is injected on the slab at high
pressure from the top and bottom side of the slab.
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There are about 31 nozzles in the descaler.
These nozzlesare inclined at an angle of 22 to the vertical direction of the slab

entry direction.
This is done to impact with lesser flow of water.
The average water injected is around 4100 liters per minute.
2.5.8Roughing Mill
The roughing mill and the finishing mill each have two work rolls and two backup rolls.
The slab passes between the two work rolls.
The backup rollsare driven by the frictional force from the work Rolls and is not driven
by any motor.
The backup rolls are used to prevent any deformation in the size of the work rolls. The
slab when passes may change its width so in order to maintain the width there are two
vertical edged rolls
The slab is either passed 5 or 7 times depending on the grade of the steel. The roughing
mill descaler is not used every time the slab passes through the roughing mill rolls.
The thickness of the slab is reduced from around 217 mm to 30 to 35 mm.
2.5.9 COIL BOX AND CROP SHEAR: The coil box is used to coil the slab temporarily.
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This is done to reduce the length of the mill and also to reduce the heat
loses in the strip when exposed to the surrounding.
The coil box then uncoils the coil to the finishing mill before which
there is a crop shear to cut the head end and the tail end of the strip.
In Essar they have facility for controlling width and thickness but
length cannot be controlled. So while maintaining the width and
thickness the head and tail becomes semi-circle shaped or curved so
crop shear is used.
2.5.10 FINISHING MILL
The finishing mill is a six stand high finishing mill.

There is a descaler before the first stand of the finishing mill.
This is to remove the scale formed when thetransfer bar was stored in the coil box.
There are six guide in the finishing mill to guide the transfer bar.
There are tension loppers between each finishing mill stand.
These loppers help in maintaining the tension of the strip when it passes from one
stand to another.
If tension is not maintained then it would form bends in the strip. The speed of the
rotation of the rolls increase as the number of stand increases.
The 6th stand is the fastest rotating rolls.
COILER:
There is a Coiler at the end of the Finishing Mill.
It Coils the Coil as soon as it gets processed on Finishing Mill.
STRAPPING, WEIGHING AND MARKING MACHINE
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The strip after being coiled at the coiler is first transported to the strapping
machine.
The strapping machine uses a thin steel strip to strap the coil.
The load cell can weigh a maximum weight of 30 tones. Then the coil moves
to the marking machine.
The marking machine can move both vertically and horizontally.
The Coil is marked at a temperature of around 700 Celsius.
Then the coil moves to the eye strapping machine where the coil is strapped
around its length.
Finally a crane carries the coil to the coil yard.
2.6 INVENTORY MANAGEMENT SYSTEM.

Basically the functions of inventory management are as follows:i)
Materials planning and programming of procurement and supplies.
ii)
Purchasing
iii)
Inventory control
iv)
Store keeping and warehousing
v)
Materials handling and transportation
vi)
Codification and standardization
vii)
Value Analysis
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viii)
Identification, Disposal of supplies, obsolete and scrap materials, etc.
The relationship between the Inventory and Production Departments
Inventory
Dept
RAW MATERIALS
PRODUCTION
DEPT
COMPONENTS,
TOOLS ETC.SCRAP AND

BY PRODUCTS
QUALITY
CONTROL
FINISHED PRODUCTS
REJECT AND DAMAGED
2.7 TYPES OF MATERIAL HANDELING EQUIPMENT

2.7.1 Barge Un-loader
Span : 63000 mm
Capacity : 36 mt
Material : ST-52
Weight : 375 mt
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2.7.2 Gantry Cranes
Span : 45000 mm
Capacity : 35/5 mt
Material : IS 2062
Weight : 145 mt
2.7.3 Travelling Tripper Ship Loader

Dimensions : 41370L x 4300W x 6510Hmm
Material : IS2062
Weight : 47 mt
2.7.4EOT Crane ST Bay Higher

Span : 34000 mm
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Capacity : 35 / 5 mt
Material : IS2062
Weight : 50 mt
2.8 QUALITY ASSURANCE

A large component of materials management is ensuring that parts and materials used
in the supply chain meet minimum requirements by performing quality
assurance (QA). While most of the writing and discussion about materials
management is on acquisition and standards, much of the day to day work conducted
in materials management deals with QA issues. Parts and material are tested, both
before purchase orders are placed and during use, to ensure there are no short or long
term issues that would disrupt the supply chain. This aspect of material management
is most important in heavily automated industries, since failure rates due to faulty
parts can slow or even stop production lines, throwing off timetables for production
goals.
2.9 FINISHED PRODUCT DETAILS

Products
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Hot rolled
Essar Steel has state-of-the-art hot rolling mills with a rated
capacity of 8.6 MTPA. The facilities include a conventional hot
rolling mill and a modern compact strip mill.
............................................................................................................................
Cold rolled
Essar Steel holds a leadership position in cold rolling with a
capacity of 2 MTPA. The technology available in the complex
ensures production of high quality products for critical
applications in automotive, white goods, construction, etc.
............................................................................................................................
Galvanised
Essar Steel produces world-class galvanised steel products in its
galvanising facility with a capacity of 1 MTPA.
............................................................................................................................
Colour coated
Essar Steel colour coated sheets are manufactured in a state-ofthe-art 0.4 MTPA facility. It produces high-quality colour coated
sheets that add aesthetic beauty to the strength of steel.
............................................................................................................................
Plates
The Essar Steel plate mill with a capacity of 1.5 MTPA is Indias
widest plate mill producing 5 metre wide plates. The mill is
equipped with the latest technology to produce value-added
plates for specialised applications that conform to international
standards.
............................................................................................................................
Pipes
The Essar Steel pipe mill is one of Indias finest pipe mills with a
capacity of 0.6 MTPA and the only one with an integrated raw
material source.
............................................................................................................................
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Shot blasted and primed plates
Essar Steel's shot blasted and primed plates can be directly used
and allows for excellent adhesion of prime coat and paint.
............................................................................................................................
Factory welded beams
Essar Steel's factory welded beams are custom-made and readyto-use saving labour, service and operational costs.
............................................................................................................................
Burnt-to-shape plates
Essar Steel burnt-to-shape offers tailor-made cutting solutions
with its 30,000 TPA oxy / plasma cutting facility and JIT (JustIn-Time) supplies.
............................................................................................................................
Trapezoidal blanks
Essar Steel trapezoidal plates offer a customised solution
designed to reduce material wastage. They simplify procurement
for the end-user by meeting their specific requirements and help
reduce operation costs.
.........................................................................................................................
Chequered plates
The Essar Steel chequered plates are high friction plates that
ensure maximum skid resistance. Available in tear drop pattern
with a maximum bead height of 1.2mm, they give products an
added advantage.
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CHAPTER-3 MARKETING DEPARTMENT

3.1 Organization Chart
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3.2 ACTIVITIES OF MARKETING DEPARTMENT
3.3 Major Competitors
SAIL
TISCO
JINDAL VIJAY NAGAR STEEL LTD.
JISCO
SAW PIPES
UTTAM STEEL LTD.
ISPAT INDUSTRIES LTD.
MUKAND LTD.
MAHINDRA UJINE STEEL CO.LTD
TATA STEEL LTD.
USHA ISPAT LTD.
KAIYANI STEEL LTD.
ELECTRO STEEL CASTING LTD.
SESA GOA LTD.
NMDC
LIOYOLS STEEL INDUSTRIES LTD.
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3.4 Customer Satisfaction

Essar steel defines value as value to customers because when its customer prosper,
the company prospers. Delighting its customer drives its unique approach to
marketing. To helps it customer chose the best steel every time, it became the first
Indian company to brand flat products, under the name24 carat steel
24 carat steel is more than just a brand name. it is a symbol of trust, a measure of
perfection and promise of consistency. Every single product that roll out of the
plants at Essar , guarantees that it has been produce in concurrence with the
highest standards of manufacturing processes, state of the art technology and
precision.
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3.5 Distribution Channel

Marketing channel are sets of interdependent organization involved the process of
making products or service available for use or consumption. As we know there are
various level of channel like 0 level, 1 level, 2 level and 3 level.
Essar follows these types of distribution channels.

0 level distribution channel :-
According to this type it consists of only manufacturer (Essar) and industrial customer
(kokan railway, swarajmazda, etc.). They directly place order to Essar steel only
without involving any other intermediaries.
1 level distribution channel:-
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According to this type industrial customer will contact to companys retail outlet to
procure their material. So, manufacturer will supply material. So , manufacturer will
supply material to companys retail outlet and it will provide material to industrial
customer.
DISTRIBUTION OUTLET
Essar Steel is the first steel company to set up an end user distribution chain for steel
products under the brand name EssarHypermart. It has a strong network of over 474
steel retail outlets. These outlets are conveniently located across the length and
breadth of the country to cater to the customized requirements of small and medium
enterprises.Thehypermarts offer a comprehensive range of flat steel products for a
variety of applications. Other product lines, like longs, structural, and tubular, are also
being developed to make EssarHypermart a one-stop-shop for steel products.
3.6 Promotional Measures

(1)Essars advertising policy is non conventional they always do need base
advertisement
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(2) As companys client are industrial buyers. ESSAR not in consumer goods .they
dont need to do frequent & heavy advertisement.
(3) They take part in industrial exhibition.
(4) They dont do aggressive advertisement.
(5) Sometime useful move of company gives positive publicity. Essar has positive
attitude towards donation to needy organization.
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CHAPTER-4 HR DEPARTMENT
Essars HR philosophy is strongly reflected from EssarsHr mission statement. Its
core HR philosophy is as follows:(1)To create sense of belonging & to develop a culture that makes its employees
business leader.
(2) To create team spirit
(3) To enhance productivity & strive for growth with integrity & efficiency.
4.1 ORGANIZATION STRUCTURE
LEVEL
M1
DESIGNATION
Managing Director/Executive Director /
M2
M3
M4
M5
M6
M7
M8
M9
CEO/ Head of Corporate Functions.

Senior vice president
Vice president
General Manager
Joint General Manager
Deputy General Manager
Manager/Senior Manager
Deputy Manager/ Manager
Senior officer/ Senior Engineer/Deputy
M10
M11
Manager
Officer/Engineer/Assistance Manager
Junior officer/Junior Engineer
4.2 ACTIVITIES OF HR
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Well educated and trained work force.
Learning & development

Essar focuses on building careers. Essar has a high emphasis on performance,
and link both career growth and rewards directly to merit and achievement.
Coaching & mentoring

As Essar expands globally, they work towards making every manager a leader,
and mentoring is their primary means of displaying leadership.
Talent management
Essar runs various talent management and engagement programmes to harness
employee morale and skills
Essar academy
Through the academy, Essar aims to build a learning organization for the
employee's career advancement.
4.3 Recruitment and Selection

The company approaches the collages, which are standardized & reputed. Mostly the
company has a list of collages to approach in search of candidates.
Another important source is the resume received on the email-id of company. Daily
about 100 applications are recived. These applications are than short-listed, where
preference is given to the freshers.
STEPS IN RECRUITMENT
Request from the concerned needy department is checked. Access the

recuritement& vacancy position.
To intimate the note to take approval for the post & its specifications as per
guidelines.
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Releasing the advertisements or going through the applications, & listing the
right applicant.
Written tests, group discussions, & personal interview conducted. During the
interview, technical skill are the main focus points & then knowledge.
15 days after the interview, an offer letter is sent & if the confirmation is
received, placement is given.
ESSAR DIVIDES RECRUITMENT & SELECTION INTO -3
(1) FRESHER:
At this level , company decides various norms for recruitment
& selection. Mainly the candidates who has minimum 60% can apply. It is related to
graudates, diploma, engineering & MBA.
For selection, company goes for campus & off campus intervies:
Written tests
Group discussions
Personal interview
(2) MIDDLE LEVEL:For the middle level, the candidate is approached either through the referral of
existing employees, or add is placed in newspaper & internet.
(3) SENIOR LEVEL:For the senior level, the candidates of raval firms are approached or selection is
done through consolation.
Process of Selection
Each panel is managed by a senior lead facilitator who anchors the assessment and
recruitment process. The Talent Acquisition coordinator anchors the mandate and
assists to smoothly facilitate the process the essence of the panel is to effectively
evaluate each candidate in a comprehensive and consistent manner. The process aids
in quicker decision making and also provides quick convergence of opinions on each
candidate.
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The panel interview format is being utilized for all the senior management hires
across the Essar group.
o Interview evaluation
An interview evaluation sheet (Annexure V) has been designed as a tool to
enable the panel members to objectively evaluate the candidature of the
interviewees even though intuition & judgment shall play an equally
important role in the process of evaluation.
Interview expenses reimbursements to candidates
Outstation candidates appearing for interview shall be eligible for the travel
expense reimbursement.
M 01- M02: Business Class Air Travel
M-07- M03: Air Economy Class to and fro
M-08 to M-11 & Trainees: II AC train fare.
o Employment of spouse/relatives
The following guidelines will be applicable in case of a candidate who
is related to employee:
o The selection of the candidate who is relative of an employee shall purely be
on merits. Any attempt on the part of employee to influence the selection
process shall disqualify the candidate.
b) The relation of an employee shall not be employed in the same function.
Both shall not have any reporting relationship.
c) Any of the HR matters of the relation of employee shall not be handled by
the employee.
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d) Notwithstanding above, all cases of employment of spouse/relatives of an
employee shall be approved by Business HR Head.
o Notice pay
Often in order to facilitate the employee to join us at the earliest we have to buy his
notice period. Also, in case a vacancy adversely affects the efficiency of operations /
project progress, it is reasonable to commit to reimburse notice pay. As the notice
period pay is subject to tax deduction at our end, the HR Lead may agree to pay notice
pay net of tax. It should be made clear that the reimbursement would essentially
depend on documentary proof.
o Reference check
Objective :-The objective of a reference check is to obtain information on the
individual's work performance and on personal characteristics that affect
(positively or negatively) the individual's suitability for the particular position
sought.
Background
o Reference checks are generally used for 3 purposes:
1. To verify information given by job applicants through other
selection
processes (e.g. interview, resume)

2. To serve as a basis for predicting job success of job applicants, and
3. To uncover background information on applicants that may not have been
identified by other selection procedures.
Scope of reference work

1. Education Qualification Check
2. Employment verification
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A. HR Feedback
Confirmation of length of employment
Last position held
Compliance with exit formalities
Eligibility for rehiring
B. Supervisor's feedback
o Work ability & Competency
o Duties & Responsibilities
o Integrity, character & ethics
o Management & Supervisory skills
o Reason for leaving
o Eligibility for rehiring
Offer process
The decision to offer a selected candidate will be made by HR on the basis of the
interview panel's inputs, technical reviews, reference check and other relevant criteria.
The offer decision will be influenced by:
a) Current compensation - component wise
b) Expected compensation
c) Comparison with like profiles within the organization
d) Any industry benchmarks
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e) Specific items of offer like joining period, relocation time frame and expenses,
notice Pay reimbursement, role agreed upon, tentative location and any other specific
assistance to be provided on joining..
4.4 Personal Details of Employees

1)Personal information such as name,age,gender,birth place etc
2)Family Background
3)Academic Profile
4)Achievements during graduation
5)Employees Interest both official and personal
4.5 PROMOTIONS
The policy will be applicable for all employees in levels M-05 & M-11 and non
management (NM) ,on the rolls of Essar ltd for that Appraisal period. All employees
on the rolls of company as on 30 th September of that appraisal year & remains in
service till 31st March of that appraisal year.
Process
All employees being considered for promotion to M-11 (in the case Of NMS)/M08 will be promoted by the following Process;On completion of residency period by the executive , subject to him fulfilling the
promotion criteria & based on his performance throughout the residency period
including the review period he may be recommended by his assessor by filling up the
promotion form.
After the discussion between the receiver &assessor the executive may be promoted
to the next level subject to availability of the position & level in the approved
organization chart.
All employees being consider for promotion to M-07 & up to M-05
Will be promoted by the following process:-
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On completion of residency period by the excutive, subject to im fulfilling the
promotion criteria& based on his performance throughtout the residency period
including the period he may be recommended by his assessor by filling up the
promotion justification from.
All the recommended executives will have to appear in MDG & only upto being
recommended by the MDG panel & approved by the CEO/MD/PD the executive will
be promoted to the next level subject to availability of the position & level in the
approved organization chart.
Minimum 3 year residency period in current grade incase of graduates, engineers/
professionals & incase of others such as B.Sc& B.com, minimum residency period
will be 5-6 years. The execution should possess a minimum rating of 3 above during
the assessment year & also during the residency period of assessment year & also
during the residency period of assessment for being commended for promotion.
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CHAPTER-5 Finance Department
Management
trainee
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5.1 ACTIVITIES OF FINANCE DEPARTMENT
Maintenance of Accounts
Reimbursement
Cash Disbursement
Budgeting
Business Plans
Indirect taxes
5.2 Accounting Policies

(a) Basis of preparation
The financial statements have been prepared to comply in all material aspect with the
mandatory accounting standards issued by the institute of chartered accountants of
India and the relevant provisions of the companies Act, 1956. the financial statements
have been prepared under the historical cost convention on an accrual basis. The
accounting policies have been consistently applied by the company and are consistent
with those used in the previous year.
(b)Use of Estimates
The preparationof financial statements in conformity with generally accepted
Accounting Principles requires management to make estimates & assumptions that
effect the reported amounts of assets & liabilities and disclosure of contingent
liabilities at the date of financial statements & result of operations during the reported
year.
(c) Fixed Assets

Fixed assets are stated at cost (or revalued amounts, as the case may be), less
accumulated depreciation and impairment losses if any. Cost comprises the purchase
price and any attributable cost of bringing the asset to its working condition for its
intended use. Borrowing costs relating to acquisition of fixed assets which taken
substantial period of time to get ready for its intended use are also included to extent
they related to the period till such assets are ready to be put to use.
(d)Capital work-in-progress
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All expenditure, including advances given and interest cost during the project
construction period, are accumulated and disclosed as capital work-in-progress until
the assets are ready for commercial use. Assets under construction are not depreciated.
Income earned from investments of surplus borrowed funds during the
construction/trail run period is reduced from capital work-in-progress. Expenditure /
income arising during trail run is added to / reduced from capital work-in-progress.
5.3 COSTING OF PRODUCT
Prerequisites:
Material Masters (including MRP, Accounting, & Costing views)
Quantity Structure (Bill of Materials, Routing or Master Recipe, Production
Versions are optional)
Configuration (WIP, Variance, and Settlement)
CO Master Data (Primary and Secondary Cost Elements, Activity Types,

Actual Assessment/Distribution Cycles, Actual Statistical Key Figures if required)
Overview:
Throughout a given period, actual expenses are recorded in SAP as purchases are
made, payroll is processed, bills are paid, and production occurs. At month-end, Work
in Process, Variance, and Settlement are calculated. The variance between actual costs
and standard costs can result in changes to product costing for the next period or year.
Costs are settled and the posting period is closed at the end of the month end process
to avoid material movement or accounting postings in the previous period.
In product cost by order, actual production yield, scrap, and activity quantities are
entered in a production confirmation. The production costs are collected on the
production orders for review and settlement. In product cost by period, product cost
collectors are used to calculate WIP, variances, and settlement instead of the planned
orders.
Prior to calculating variances and settling orders, orders must run through WIP
calculation to determine what part (if any) of an order is not complete. You can
calculate work in process at target costs for Product cost collectors, Production orders,
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and Process orders. Only orders that have a valid results analysis key and are not in
status DLFL (Deletion flag) or DLT (Deleted) are included in WIP calculation.
In Product Cost by Period (repetitive manufacturing), the quantities confirmed (other

than scrap) for manufacturing orders or production versions are valued at target cost
based on the valuation variant for WIP and scrap. In Product Cost by Order (discrete
manufacturing), WIP is the difference between the debit and credit of an order that has
not been fully delivered.
SAP offers variance analysis on the input (consumption, overhead allocation, actual
expenses) side and output (production quantity or valuation) side.
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Input Variances
Output Variances
Mixed Price Variance:

Input Price Variance:
Caused by differences between plan and
actual material and activity prices. Only
calculated if material origin is selected on
material master.
Caused when the system determines a different

mixed cost than the released cost estimate. Must
be selected in the variance variant to see.
Output Price Variance:

If standard price changed between
delivery to stock and when variances are
calculated
Caused by the use of different materials and
If price control V materials are not
activities than were planned in BOMs and
delivered to stock at standard price
Routings/Master Recipes.
If price used to valuate inventory is not a
mixed price
Resource-Usage Variance:
Material Quantity Variance:
Lot Size Variance:
Caused by different material and quantities

than were planned in BOMs.
Differences between the planned and actual

costs that don't vary with lot size.
Remaining Variance:
Remaining Input Variance:
Differences between target and allocated actual

costs that cannot be assigned to any other
This occurs when costs are entered without a category. Also used when no variance categories
quantity or when OH rates are changed.
defined in variance variant.
Scrap Variance:
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Caused by differences between operation

scrap in routing and actual scrap confirmed.
Finally, we must settle our orders or product cost collectors. Product Cost
Collectors and orders are debited with actual costs during production. The actual
costs posted to an order can be more or less than the value with which an order
was credited when the goods receipt was posted.
5.4 RATIO ANALYSIS
Particulars
Mar 2013
Mar 2012
Mar 2011
Mar 2010 Mar 2009
Operational & Financial Ratios

Earnings Per Share (Rs)
-9.95
-4.76
-0.68
0.06
1.62
CEPS(Rs)
-4.37
-1.01
2.87
3.68
8.89
DPS(Rs)
0.00
0.00
0.00
0.00
0.00
25.23
34.30
40.60
40.88
41.18
Book NAV/Share(Rs)
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Tax Rate(%)
34.11
2.54
55.95
68.83
38.43
5.27
5.86
8.50
12.72
14.96
EBIT Margin(%)
-10.68
3.30
6.17
8.36
8.58
Pre Tax Margin(%)
-25.85
-7.31
-2.83
0.61
2.37
PAT Margin (%)
-17.03
-7.13
-1.25
0.19
1.46
-7.48
-1.51
5.43
6.96
7.98
ROA(%)
-6.27
-3.06
-0.46
0.09
1.25
ROE(%)
-34.66
-12.99
-1.72
0.33
3.99
-4.81
1.68
2.73
4.96
9.44
Asset Turnover(x)
0.37
0.43
0.37
0.49
0.86
Sales/Fixed Asset(x)
0.48
0.74
0.77
0.74
0.85
-1.91
-2.13
2.80
3.56
6.83
2.09
1.35
1.29
1.35
1.18
Receivable days
14.02
11.32
13.48
13.68
11.03
Inventory Days
88.10
96.31
107.42
74.60
61.28
Payable days
69.93
47.49
54.21
58.45
40.82
PER(x)
0.00
0.00
0.00
0.00
0.00
PCE(x)
0.00
0.00
0.00
0.00
0.00
Price/Book(x)
0.00
0.00
0.00
0.00
0.00
2.12
1.77
1.96
1.76
0.70
27.39
18.38
14.06
10.53
3.91
-18.26
49.70
29.28
19.05
7.48
EV/CE(x)
0.69
0.67
0.61
0.58
0.53
M Cap / Sales
0.00
0.00
0.00
0.00
0.00
-7.59
32.29
15.84
-9.14
8.80
-25.67
-8.73
-3.29
-14.96
-13.32
EBIT Growth(%)
-401.54
-29.71
-16.02
-10.08
-33.49
PAT Growth(%)
-122.52
-652.73
-840.62
-87.88
-56.79
EPS Growth(%)
-108.94
-596.68
-1202.32
-96.18
-55.39
Margin Ratios
Core EBITDA Margin(%)
Cash Profit Margin (%)

Performance Ratios
ROCE(%)
Working Capital/Sales(x)
Efficiency Ratios
Fixed Capital/Sales(x)
Valuation Parameters
Yield(%)
EV/Net Sales(x)
EV/Core EBITDA(x)
EV/EBIT(x)
Growth Ratio
Net Sales Growth(%)
Core EBITDA Growth(%)
Page
Financial Stability Ratios

Total Debt/Equity(x)
4.17
2.95
2.17
2.00
1.58
Current Ratio(x)
0.50
0.50
0.79
1.66
1.63
Quick Ratio(x)
0.28
0.26
0.37
1.13
0.90
-0.70
0.31
0.69
1.08
1.38
Interest Cover(x)
Total Debt/Mcap(x)
5.5 SOURCES OF FINANCE

Sources Of Funds
Total Share Capital
Equity Share Capital
Share Application Money
Preference Share Capital
Reserves
Revaluation Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
2,257.33
2,213.73
33.53
43.60
6,838.70
0.00
9,129.56
16,596.35
1,590.89
18,187.24
27,316.80
1,184.08
1,140.48
0.00
43.60
3,554.28
0.00
4,738.36
6,317.62
993.77
7,311.39
12,049.75
1,184.08
1,140.48
0.00
43.60
3,447.25
0.00
4,631.33
5,383.11
733.47
6,116.58
10,747.91
1,387.00
1,140.48
0.00
246.52
3,080.95
0.00
4,467.95
6,533.32
409.92
6,943.24
11,411.19
5.6 Stakeholders
Holder's Name
No of Shares
% Share Holding
Promoters
325969383
28.60%
Foreign Promoter
666600784
58.48%
General Public
75967074
6.66%
Other Companies
35254527
3.09%
Foreign Institutions
23759291
2.08%
Page
2,785.29
581.17
0.00
2,204.12
1,246.18
0.00
4,031.47
7,355.20
650.46
8,005.66
12,037.1

Financial Institutions
8160033
0.72%
Foreign NRI
2426201
0.21%
Banks Mutual Funds
1673595
0.15%
Page
BIBLIOGRAPHY
Books:
Human Resource Management by C.B.Gupta
Marketing Management A South Asian Perspective by Philip Kotler,Kevin Lane
Keller,AbrahamKoshy&MithileshwarJha
Financial Management B.S.ShahPrakashan
Websites:
www.essar.com
www.essarsteel.com
www.scribd.com
www.issuc.com
www.slideshare.com
Page
ANNEXURE
Balance Sheet statement for year ended - March 2013
Sources of Funds
Share Capital
Reserves & Surplus
Total Shareholders Funds
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
Application of Funds
Gross Block
Accumulated Depreciation
Less:Impairment of Assets
Net Block
Lease Adjustments
Capital Work in Progress
Investments
Current Assets, Loans & Advances
Inventories
Sundry Debtors
Cash and Bank
Total Current Assets
Current Liabilities
Provisions
Total Current Liabilities
Net Current Assets
Miscellaneous Expenses not written off
Net Deferred Tax
TOTAL ASSETS
Contingent Liabilities
(Figures are in crores)
Page

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A

Summer Training Report

Name of Student: SHAIKH

1.9 Strategies for Future Growth and Development............................................................................................... 14

CHAPTER-2 PRODUCTION DEPARTMENT...........................................................16

2.5.9 COIL BOX AND CROP SHEAR:-......................................................................................................... 29

CHAPTER-3 MARKETING DEPARTMENT.............................................................37

CHAPTER-5 Finance Department........................................................................51

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

import duty of capital goods, convertibility of

rupee on trade account, permission to mobilise resources from overseas financial

Smt. Z. S. Patel College of Management & Technology

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

Smt. Z. S. Patel College of Management & Technology

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

Total Finished Steel (alloy+non-alloy): Production for sale (million

Smt. Z. S. Patel College of Management & Technology

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

1.2 COMPANY BACKGROUND

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

Smt. Z. S. Patel College of Management & Technology

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

With over 20 years of experience in the steel sector, we have an

Smt. Z. S. Patel College of Management & Technology

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

Smt. Z. S. Patel College of Management & Technology

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

Smt. Z. S. Patel College of Management & Technology

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

Mr J Mehra Director, Essar Group

Mr Malay Mukherjee CEO, Steel Business Group

MrNareshNayyar CEO, Energy Business Group

Mr Rajiv Sawhney CEO, Telecom Business Group

MrAparupSengupta CEO, Aegis

MrAlwyn Bowden CEO, Projects Business Group

MrPradeep Mittal CEO, Minerals & Mining Business

MrVikashSaraf Director, Strategy & Planning, Essar Group

Mr VG Raghavan CFO, Essar Group

MrAdilMalia Group President, Human Resources

Mr SM Lodha Group President, Assurance and Cost Control

Smt. Z. S. Patel College of Management & Technology

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

1.6 Board of directors

Smt. Z. S. Patel College of Management & Technology

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

1.7 PRESENT PROFILE

350 billion (US$5.9 billion)[2]

ESSAR Steel India Limited,Essar Steel

Smt. Z. S. Patel College of Management & Technology

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

Smt. Z. S. Patel College of Management & Technology

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

1.8 PRESENT PRODUCT MIX

Smt. Z. S. Patel College of Management & Technology

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.

Smt. Z. S. Patel College of Management & Technology

SUMMER TRAINING REPORT ON ESSAR STEEL LTD.