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CHAPTER 1:INDUSTRY PROFILE

Iron and steel, although closely related, are not the same thing. Iron begins as iron ore, which is
melted in a blast Iurnace and blown through with air. Then it is manipulated so as to limit its
content oI carbon and other impurities. Steel is a particular kind oI iron that is approximately one
percent carbon, with the carbon content spread throughout the metal evenly. Steel is harder than
iron and does not rust as easily. However, Ior most oI history steel was harder to make than iron.
That is why iron making was by Iar the bigger industry in America until the late 19
th
century.
The Iirst iron works in America, called Hammersmith, began operation in 1647 in Saugus,
Massachusetts, but lasted only Iive years. Subsequent iron making Iirms would be small
operations that tended to be located close to local ore supplies, water power, and major
transportation routes. Some oI the most important iron making regions oI the country in colonial
America were in eastern Pennsylvania near the Delaware River, western Pennsylvania around the
Allegheny and Monongahela Rivers, and the Hudson River valley in New York and New Jersey.
Most oI these Iirms remained small because oI the high cost and low eIIiciency oI available Iuel
to run their Iurnaces. When Americans switched Iuels Irom charcoal or wood to coal in the early
nineteenth century, larger operations became possible. The discovery oI huge iron ore deposits in
the northern Great Lakes region during the 1840s gave a Iurther boost to production.
The Expansion of Iron Production in the 19
th
Century
The widespread adoption oI puddling as a technique to make iron also contributed to growth in
production. In the early days oI American ironmaking, craItsmen used a method called Iining to
produce iron. This meant that the mixture oI iron and slag expelled Irom a blast Iurnace was
separated out by hammering it. Puddling involved adding iron oxide to the blast Iurnace charge
because the chemical reaction made it easier to separate impurities Irom the iron. Puddlers did the
separating by stirring the melted product with a long iron rod. The slag that rose was poured oII
the top and the iron at the bottom was shaped into balls. The balls were squeezed into iron bars
that were worked into the mill's Iinal product (such as rails or rods) by other workers. Puddling
required many judgment calls based on experience. ThereIore, it could take up to two years oI
training to become a skilled puddler. Many puddlers in the mid-nineteenth century were

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successIul enough to later move into the ranks oI owners.
oth Iining and puddling were pioneered in Great ritain and adopted by American producers in
subsequent decades. As they gained more experience, American iron-masters developed their
own variations oI these English techniques, depending on local resources like the quality oI their
iron and the eIIiciency oI their Iuel. A means oI automating iron production was not developed
until the 1930s.
In the nineteenth century, the American iron market produced a wide variety oI products. Stoves,
gun parts, cannons, and machinery were among key early uses Ior iron. Iron also played a crucial
role in the development oI railroads. Once again, the English pioneered techniques Ior making
high-quality iron rails. In Iact, American railroads imported all their rails Irom ritish mills until
1844. In 1857, John Fritz's Cambria Iron Works in Johnstown, Pennsylvania, created a technique
to automate partially the production oI iron rails. The resulting increase in productivity made the
railroad boom oI the next two decades possible.
Global steel industry
The deteriorating global business environment adversely impacted the steel industry world
wide which experienced huge swings in its Iortunes in the last Iiscal. The demand as well as
international prices oI steel and also those oI raw materials reached a historic high during Iirst
halI oI 2008, Iollowed by sharp dip in the steel prices in October 2008 onwards, as demand
shrunk under the impact oI global slow down. Fall in market prices and the demand was steep &
sudden aIIecting adversely the steel producers across the globe who had to cope with the
Iollowing output prices, declining demand & high input prices , putting a great strain on their
margins. This led to many steel majors , globally , to eIIect major cuts in production in order to
align themselves with market demand and control rising inventory. The impact can be gauged by
the Iact that while the global steel output increased by 2.5 in the Iirst halI oI the calendar year
2010 it Iell by as much as 9.5 in the second halI & by more than 20 in the Iirst halI oI 2011.
Steel Manufacturing: Henry Bessemer and Andrew Carnegie
eIore the Civil War, American manuIacturers made only small quantities oI steel. ecause they

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were unable to master the demanding requirements to create steel through puddling, imports Irom
England's SheIIield mills dominated the American market. That all changed with the application
oI the essemer process. Henry essemer was a ritish inventor who created a way to reIine iron
into steel using air alone in 1855. His machine, the essemer converter, blew air over molten iron
Irom a blast Iurnace so as to remove impurities and create a substance oI a uniIorm consistency.
The American engineer Alexander Holley brought essemer technology to America in 1864, but
did not perIect the essemer design until he created his Iirst plant Irom the ground up as opposed
to adapting an existing Iacility. This was the Edgar Thomson Works in raddock, Pennsylvania.
The mill, which opened in 1875, was the model Ior all subsequent essemer Iacilities.
Holley built the Edgar Thomson Works Ior Andrew Carnegie, who used it mostly to produce
steel rails Ior the Pennsylvania Railroad. Carnegie's Iirst experience in industry came when he
invested in the iron business during the 1860s. His genius was to champion technological
innovations like the essemer converter and the Jones mixer, which sped the delivery oI iron
Irom the blast Iurnace to the converter, in order to cut production costs and undersell his
competitors. Carnegie also had a genius Ior picking good associates. For example, William R.
Jones, the inventor oI the Jones mixer, served as superintendent oI the Edgar Thomson Works
and was just one oI many men who shared in Carnegie's business success.
Another Charles Schwab, would go on to Iorm ethlehem Steel in 1904.Carnegie's devotion to
vertical integration also contributed to his success. His Iirm eventually controlled supplies oI
everything needed to make steel: iron ore and coal deposits; railroads to transport everything; and
marketing networks Ior the Iinished product. y the 1890s, Carnegie Steel made more steel than
the entire country oI Great ritain. In 1900, its annual proIit was $40 million.
etween the mid-1870s and the early 1890s steel replaced iron in more and more markets that
iron had once dominated, such as rails and nails. The key reason Ior this was increased steel
production. Accelerated by the innovations in Carnegie's mills, essemer steelmaking allowed
Iirms to make thousands oI more tons oI metal per year than when iron had dominated the
market. And because the essemer method required less skill than ironmaking, labor costs
dropped too. As steel prices dropped dramatically, consumers increasingly chose the cheaper,
harder, more durable metal.

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As this trend accelerated, puddlers began to Iind that their skills were no longer needed.
Steelmakers came to depend on immigrant labor, particularly workers Irom southern and eastern
Europe. In the Homestead lockout oI 1892, the only major union in the iron and steel industry,
the Amalgamated Association oI Iron and Steel Workers, made one last violent stand to prevent
managers Irom driving the union out oI the industry at Carnegie Steel's Homestead Works. Its
eIIort Iailed. From 1892 to 1937, American steelmakers operated in an almost entirely union-Iree
environment.
The U.S. Steel Corporation
As in other industries, many steel producers joined Iorces at the beginning oI the twentieth
century. However, the eIIect oI the great merger movement in the American steel industry is
particularly noteworthy. The United States Steel Corporation Iormed in 1901 when a group oI
Iirms dominated by J. P. Morgan decided to buy out Andrew Carnegie so that the latter would no
longer undercut their selling price. Carnegie's take Irom the deal made him the richest man in the
world.
U.S. Steel was the Iirst business in history to be valued by the stock market at over one billion
dollars ($1.4 billion, to be exact). This Iigure represented one sixty-seventh oI the total wealth oI
the United States at that time. U.S. Steel controlled 72 percent oI essemer steel production in
the United States and 60 percent oI the market in open hearth steel, a new steelmaking process
that made steel in a Iurnace which achieved high heat by recycling exhaust gases. U.S. Steel's ten
divisions reIlected the diversity oI steel products made at that time, including steel wire, steel
pipe, structural steel (Ior bridges, buildings, and ships), sheet steel (which would go largely Ior
automobile bodies in subsequent decades), and tin plate (once used Ior rooIing shingles, it would
increasingly go to make tin cans). Like Carnegie Steel, the U.S. Steel Corporation was also
vertically integrated, with substantial interests in iron ore, coal, shipping, and railroads.
Although it held one oI the largest monopolies in an age oI monopolies, U.S. Steel deliberately
let its market share decline over the Iirst Iew decades oI its existence to avoid dissolution through
antitrust prosecution by the Iederal government. Even though the Justice Department Iiled suit
against U.S. Steel in 1911, this policy helped it survive when the Supreme Court resolved the

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case in 1920. U.S. Steel's largest competitors took advantage oI the policy and the opportunities
aIIorded them by World War I to grow at U.S. Steel's expense. ethlehem Steel, Ior example,
grew big during the war by selling armaments to Europe and ships to the U.S. Navy.
Nevertheless, other Iirms took their cues Irom U.S. Steel Ior everything Irom product prices to
wages and labor policy. The American Iron and Steel Institute, the industry trade organization
Iormed in 1911 and led by U.S. Steel chairman Elbert Gary, helped spread many oI U.S. Steel's
policies and practices.
An important eIIect oI the corporation's dominance was its imposition oI the Pittsburgh Plus
pricing system upon the entire industry. This system dictated that all steel prices be based upon
the costs oI production and transportation Irom Pittsburgh, no matter where the steel was
originally produced. This allowed producers based in Pittsburgh to compete with local producers
all around the country, since these producers were unable to undersell steel made in markets that
U.S. Steel dominated. Although its origins are obscure, Pittsburgh Plus was Iirmly in place by
1901 and U.S. Steel championed its continued existence. Despite losing a suit by the Federal
Trade Commission in 1924, U.S. Steel Iought to keep the Pittsburgh Plus system in place in a
modiIied Iorm until it lost a U.S. Supreme Court decision on the matter in 1948.
The Steel Industry growth
Throughout the early twentieth century, steel executives were determined to prevent the return oI
organized labor to their industry. Managers Iought oII national organizing campaigns in 1901,
1919, and 1933 through a combination oI the carrot and the stick. They used hard-nosed tactics
like spies, blacklists, and the Iomenting oI racial striIe along with soIter policies like saIety
improvements and employee stock ownership plans. However, when the Committee on Industrial
Organization (later the Congress oI Industrial Organizations, or CIO) started the Steelworkers
Organizing Committee (SWOC) in 1936, it used the impetus oI the National Labor Relations Act
(1935) to gain a Ioothold in U.S. Steel. Rather than risk a costly strike at a time when production
was just beginning to recover Irom the Depression, U.S. Steel recognized the SWOC without a
strike in March 1937.


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Although many other steel producers Iollowed the steel corporation's lead, its largest competitors
did not. Firms like ethlehem Steel, Youngstown Sheet and Tube, and Republic Steel were part
oI a group known as Little Steel, not because they were small, but because they were smaller than
U.S. Steel. Rather than recognize the union on terms similar to those agreed to by their larger
competitor, these Iirms started the Little Steel Strike oI 1937. Despite violence, particularly the
so-called Memorial Day Massacre in Chicago, the Little Steel Iirms won the strike relatively
easily. However, government pressure during World War II to keep production moving Iorced
each oI these Iirms to recognize the SWOC's successor organization, the United Steel Workers oI
America (USWA), over the course oI that conIlict.
orld ar II and Postwar Decline
During World War II, industry production increased sharply because oI steel's importance to war
mobilization. Some oI this increase was a result oI production returning to Iull capacity aIter the
depression, but new plants also came on line. For example, the government loaned the
shipbuilder Henry J. Kaiser enough money to build the Iirst steel mill on the West Coast so as to
ensure his yards would have enough product to meet his many navy contracts. U.S. Steel used
both its money and money Irom the Iederal government to expand its production capacity during
the war, particularly around Pittsburgh. y 1947, the United States controlled 60 percent oI the
world's steelmaking potential.
When the war ended, steelmakers wanted to roll back union gains that the administration oI
Franklin D. Roosevelt had Iorced the industry to accept, but the USWA had grown too big to
destroy. etween 1946 and 1959, the USWA struck Iive times in an eIIort to win higher wages
and more control over workplace conditions Ior its members. Each oI these strikes shut down the
industry. The 1952 strike led to President Harry Truman's historic decision to seize the entire
steel industry. The Supreme Court ruled this action unconstitutional in Youngstown Sheet and
Tube Company v. Sawyer (1952). The 1959 dispute lasted 116 days and was the largest single
strike in American history. As a result oI these disputes, America's steelworkers were among the
highest paid manuIacturing employees in the country. The cost oI these wage gains contributed to
the collapse oI the industry in subsequent decades.

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Foreign competition also contributed to the industry's decline. Countries like Japan and Germany
Iirst became major players in the international steel market during the 1960s. Later on, countries
like razil and South Korea would break into the American market to the detriment oI domestic
producers. Although Iriends oI the American steel industry would oIten complain oI unIair
competition Irom abroad, Ioreign producers' use oI new technology and the Iailure oI American
steelmakers to innovate also explain these developments. For example, two Austrian Iirms
developed the asic Oxygen Furnace (OF) in 1952. This process, which used pure oxygen as
the only Iuel in the Iurnace, was much more eIIicient than the then-traditional open hearth
method. No major American steelmaker adopted this technology until 1957. U.S. Steel, still the
largest Iirm in the industry, did not commission its Iirst OF unit until 1964. Close proximity to
cheaper raw materials was another advantage that Ioreign steel producers had over their
American counterparts.
The collapse oI the steel industry began in the late 1960s and has only grown worse since then.
Old-line Iirms like Wisconsin Steel and Republic Steel went bankrupt and ceased operations.
Even survivors like U.S. Steel closed old plants in order to cut back capacity. U.S. Steel's
decision to buy two oil companies in the 1980s and then change its name to USX symbolized the
company's break with its roots. The elimination oI much oI America's steel capacity devastated
the communities that had depended on these mills, including Pittsburgh, Pennsylvania, and
Youngstown, Ohio. The Monongahela River valley around Pittsburgh lost approximately thirty
thousand jobs during the 1980s. Many oI these workers experienced signiIicant psychological
distress as they went Irom having high-paying jobs to joining the ranks oI the long-term
unemployed. Alcohol and drug abuse, depression, and suicide all increased dramatically as
deindustrialization progressed.
The only sector oI the American steel industry to expand since the 1960s has been the mini-mills.
These Iacilities use large electric Iurnaces to melt scrap steel and reshape it rather than making
new steel Irom scratch. Among the advantages that mini-mills have over traditional Iacilities are
lower start-up costs, greater Ireedom oI location, and more Ilexible job organization. ecause
these Iacilities tend to be built in rural areas and because workers need Iewer skills than those at
larger mills, mini-mills tend to be nonunion. The Nucor Corporation oI North Carolina, which

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operates in ten states (mostly in the South), has had great success Iilling this niche in the
international steel market. As this technology has improved in recent years, mini-mills have been
able to break into more and more markets that large producers once dominated. ecause oI
globaland domestic competition, it has become increasingly unlikely that the American steel
industry.
Africans Invent Steel 1,900 Years before Europeans
The Haya people on the western shore oI Lake Victoria in Tanzania made medium-carbon steel
in preheated, Iorced-draIt Iurnaces between 1,500 and 2,000 years ago. The person usually given
credit with inventing steel is German-born metallurgist Karl Wilhelm who used an open hearth
Iurnace in the 19th century to make high grade steel. The Haya made their own steel until the
middle oI the middle 20th century when they Iound it was easier to make money Irom raising
cash crops like coIIee and buy steel tools Irom the Europeans than it was to make their own.
The discovery was made by anthropologist Peter Schmidt and metallurgy proIessor Donald
Avery, both oI rown University. Very Iew oI the Haya remember how to make steel but the two
scholars were able to locate one man who made a traditional ten-Ioot-high cone shaped Iurnace
Irom slag and mud. It was built over a pit with partially burned wood that supplied the carbon
which was mixed with molten iron to produce steel. Goat skin bellows attached to eight ceramic
tubs that entered the base oI the charcoal-Iueled Iurnace pumped in enough oxygen to achieve
temperatures high enough to make carbon steel (3275 degrees F).
While doing excavations on the western shore oI Lake Victoria Avery Iound 13 Iurnaces nearly
identical to the one described above. Using radio carbon dating he was astonished to Iind that the
charcoal in the Iurnaces was between 1,550 and 2,000 years old.
Steelmaking was invented in Europe around 1860, when it was discovered that a blast oI air
through molten pig iron removed impurities such as sulIur that made the metal brittle. Later it
was discovered that adding an iron alloy containing manganese and limestone removed the
remaining impuritiesoxygen, phosphorus and leItover sulIurproducing steel.Other
developments such high carbon steel, adding chromium alloys, blast Iurnaces made steel
stronger.

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From time to time white hot liquid iron and melted impurities are drawn oII. Some oI the coke
and limestone is absorbed into the iron, which make its strong and hard. The rest combines with
impurities to produce slag which is lighter than the iron and is skimmed oII.
Molten iron is drained oII in a process called tapping and then poured into molds to produce
pig iron, which is cooled with jets oI water. The name pig iron dates to the 1700s when molds
received molten iron Irom a runner that look like a suckling pig.
last Iurnaces are kept on all the time-24 hours a day, seven days a week, 365 days a year
expect Ior regular inspections or equipment renovation, When it shut down the meted iron turns
solid and it is very diIIicult to start it up again.
Industry Structure
Indian Iron and steel Industry can be divided into two main sectors Public sector and Private
sector. Further on the basis oI routes oI production, the Indian steel industry can be divided into
two types oI producers.
1.3.1 Integrated producers
Those that convert iron ore into steel. There are three major integrated steel players in India,
namely Steel Authority oI India Limited (SAIL), Tata Iron and Steel Company Limited (TISCO)
and Rashtriya Ispat Nigam Limited (RINL).
1.3.2 Secondary producers
These are the mini steel plants (MSPs), which make steel by melting scrap or sponge iron or a
mixture oI the two. Essar Steel, Ispat Industries and Lloyds steel are the largest producers oI steel
through the secondary route.
1.4 Production Scenario
India's steel production during 2009-10 was 64.88 million tonne (MT), up 11 Irom a year ago.
India has emerged as the IiIth largest producer oI steel in the world and is likely to become the
second largest producer oI crude steel by 2015-16.
Considering a steel consumption oI 300 kg per man per year to be a Iair level oI economic
development, India will have to come up to somewhere around 300 million tonnes, iI it is to
IulIill its ambitions oI being a developed country. That oI course is a long journey Irom the
present production level oI around 50 million tonnes but one must consider its past beIore

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coming to a conclusion about its potential. India was producing only around a million tonnes oI
steel at the time oI its independence in 1947. y 1991, when the economy was opened up steel
production grew to around 14 million tonnes. ThereaIter, it doubled in the next 10 years, and then
it is doubling again, maybe over a slightly longer span. Steel Production in India is expected to
reach 124 million tons by 2012 and 275 million tons by 2020 which could make it the second
largest steel maker.
In the developed countries, the trend is on consolidation oI industry. Cross-border mergers have
been taking place Ior several years. The Iocus is on technological improvements and new
products.
Higher production oI value-added products, capacity expansion, upgradation oI production
process achieveing cost eIIective production in an environment Iriendly manner, have been the
major thrust areas oI the Indian Iron and steel producers in the recent times. AIter liberalization,
there have been no shortages oI iron and steel materials in the country.

SAIL -STEEL AUTHORITY OF INDIA LIMITED

The Precursor
SAIL traces its origin to the Iormative years oI an emerging nation - India. AIter independence
the builders oI modern India worked with a vision - to lay the inIrastructure Ior rapid
industrialization oI the country. The steel sector was to propel the economic growth. Hindustan
Steel Private Limited was set up on January 19, 1954.
Expanding Horizon (1959-1973):
Hindustan Steel (HSL) was initially designed to manage only one plant that was coming up at
Rourkela. For hilai and Durgapur Steel Plants, the preliminary work was done by the Iron and
Steel Ministry. From April 1957, the supervision and control oI these two steel plants were also
transIerred to Hindustan Steel. The registered oIIice was originally in New Delhi. It moved to
Calcutta in July 1956, and ultimately to Ranchi in December 1959.The 1 MT phases oI hilai
and Rourkela Steel Plants were completed by the end oI December 1961. The 1 MT phase oI
Durgapur Steel Plant was completed in January 1962 aIter commissioning oI the Wheel and Axle

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plant. The crude steel production oI HSL went up Irom .158 MT (1959-60) to 1.6 MT. A new
steel company, okaro Steel Limited, was incorporated in January 1964 to construct and operate
the steel plant at okaro. The second phase oI hilai Steel Plant was completed in September
1967 aIter commissioning oI the Wire Rod Mill. The last unit oI the 1.8 MT phase oI Rourkela -
the Tandem Mill - was commissioned in February 1968, and the 1.6 MT stage oI Durgapur Steel
Plant was completed in August 1969 aIter commissioning oI the Furnace in SMS. Thus, with the
completion oI the 2.5 MT stage at hilai, 1.8 MT at Rourkela and 1.6 MT at Durgapur, the total
crude steel production capacity oI HSL was raised to 3.7 MT in 1968-69 and subsequently to
4MT in 1972-73.
Holding Company:
The Ministry oI Steel and Mines draIted a policy statement to evolve a new model Ior
managing industry. The policy statement was presented to the Parliament on December 2, 1972.
On this basis the concept oI creating a holding company to manage inputs and outputs under one
umbrella was mooted. This led to the Iormation oI Steel Authority oI India Ltd.
The company, incorporated on January 24, 1973 with an authorized capital oI Rs. 2000 crore,
was made responsible Ior managing Iive integrated steel plants at hilai, okaro, Durgapur,
Rourkela and urnpur, the Alloy Steel Plant and the Salem Steel Plant. In 1978 SAIL was
restructured as an operating company.Since its inception, SAIL has been instrumental in
laying a sound inIrastructure Ior the industrial development oI the country. esides, it has
immensely contributed to the development oI technical and managerial expertise. It has triggered
the secondary and tertiary waves oI economic growth by continuously providing the inputs Ior
the consuming industry.


Major Units
Integrated Steel Plants
hilai Steel Plant (SP) in Chhattisgarh

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Durgapur Steel Plant (DSP) in West engal
Rourkela Steel Plant (RSP) in Orissa
okaro Steel Plant (SL) in Jharkhand
IISCO Steel Plant (ISP) in West engal
Special Steel Plants
Alloy Steels Plants (ASP) in West engal
Salem Steel Plant (SSP) in Tamil Nadu
Visvesvaraya Iron and Steel Plant (VISL) in
Karnataka


Subsidiary
Maharashtra Elektrosmelt Limited (MEL) in
Maharashtra

oint Ventures
NTPC SAIL Power Company Pvt. Limited (NSPCL): A 50:50 joint venture between Steel
Authority oI India Ltd (SAIL) and National Thermal Power Corporation Ltd (NTPC Ltd);
manages SAIL`s captive power plants at Rourkela, Durgapur and hilai with a combined
capacity oI 814 megawatts (MW).
okaro Power Supply Company Pvt. Limited (PSCL): This 50:50 joint venture between SAIL
and the Damodar Valley Corporation (DVC) is managing the 302-MW power generating
station and 660 tonnes per hour steam generation Iacilities at okaro Steel Plant.
Mjunction Services Limited: A 50:50 joint venture between SAIL and Tata Steel; promotes e-
commerce activities in steel and related areas. Its newly added services include e-assets sales,
events & conIerences, coal sales & logistics, publications, etc.
SCI Shipping Pvt. Limited: A 50:50 joint venture with Shipping Corporation oI India Ior
provision oI various shipping and related services to SAIL Ior importing oI coking coal and
other bulk materials and other shipping-related business.




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CHAPTER 2:COMPANY PROFILE

Visvesvaraya Iron & Steel Plant, the latent addition to the stable oI Steel Authority oI India
Limited
is located at hadravathi,260 kilometers north-west oI angalore in the state oI Karnataka. The
Plant & Township are nestled by the river hadra on three sides. The Plant covers an area oI
about 3.8 square kilometers and 2677 persons as on 1.10.2006.The Steel Town covers an area oI
4.5 square kilometers.

The vision and Ioresight oI late Sir .M Visvesvaraya, the then Dewan oI Mysore, resulted in the
setting up oI 'Mysore Wood Distillation & Iron Works 'in 1918. It became a limited company in
1962. As a tribute to its illustrious Iounder, the company was renamed 'Visvesvaraya Iron &
Steel Limited(VISL) on February 16,1976.An Engineer statesman par excellence, he perceived
hadravathi as an ideal location Ior the plant amidst the Iorests oI Shimoga.

Starting as a Wood Distillation Plant in 1918, the Mysore Iron Works commenced Pig Iron
production in a charcoal last Furnace in 1923 to produce 60 tons oI pig iron per day. A pipe
plant was installed in 1927 to make proIitable use oI pig iron thus produced. Mild steel
production was started in 1936 and in the same year the name oI the company was changed to
Mysore Iron & Steel Works. Production oI Ferro-Alloys began in 1942 with the addition oI two
small Iurnaces and the production capacity was augmented subsequently in 1962.Mild steel
production capacity was also expanded in 1965 with the addition oI two LD converters, one
Electric Arc Furnace and a looming and Heavy Section Mill. The plant was expanded Iurther
and diversiIied into the Iield oI Alloy and Special Steel production in 1965 with the addition oI
Electric Arc Furnace, Combined ar and Rod Mill and Central Heat Treatment Shop.
Subsequently a modern Forge Plant was established in 1977 to produce high alloy steels like high
speed steel, tool steels, die block steel and valve steel etc. With this , the production capacity oI
alloy and special steels went up to 77,000 tons per year.
As a step to improve quality and yield oI steel, a vacuum degassing/vacuum oxygen
decarburizing unit was added in 1983 and a continuous casting unit Ior blooms and billets in

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1985.The company had technical collaboration with the world renowned M/s ohlers oI Austria
Ior twelve years. As a measure oI Iurther updating the technology, VISL utilized the services oI
M/s Voest Alpine Industrial Services (VAIS), Austria, under an agreement between Steel
Authority oI India Limited (SAIL) and (VAIS).

VISL has carved a niche Ior itselI in the Iield oI alloy and special steels in the country. It takes
care oI requirements oI strategic sectors like DeIense, Nuclear Power Corporation, Railways etc.
VISL is producing alloy and special steels since 1966 and has kept pace with the developments
by quickly adopting newer technologies to meet the requirements oI the day and has always
remained in the IoreIront as quality steel producer in the country.
As a long-term strategy VISL installed one 530Cu.M last Furnace in 1995 to produce hot
metal oI right quality so as to take the Iull advantage oI F-OF-LRF-VD route in the
production oI Alloy and Special Steel.
VISION:
1. To be a respected world class corporation and the leader in Indian steel business in quality,
productivity and proIitability, customer satisIaction.
2. To achieve an international competitiveness through satisIaction oI customer needs by
continuous improvement in the quality, cost and dispatch.

'Vision is the key Ior achieving
a goal oI success

MISSION OF VISL:

1. First mission oI VISL plant is too achieving 'saIety. ecause iI the employees are saIe
their working chemistry is high at the top. So automatically it leads to proIit. So saIety is
the Iirst step Ior achieving the satisIaction.
2. The principle product oI VISL is to produce high grade alloy and special steels Ior the
strategic sector, to sustain this status, short and long term modernizing proposals are in
various stages oI consideration & implementation, the customer expect cheap and
sustainable steel.

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3. The next mission oI VISL is committed to environment Iriendly, there is a special
environment department in VISL to achieve 'environmentally green concept.VISL steel
plant recognizes that the process oI competences building people involvement unleashing
and leveraging the creative energies oI our people.
4. Achieve international competitiveness by economically viable source oI alloy and special
steel to meet the growing needs oI the country. Steady proIitable business organization to
protect the Interest oI stakeholder. uilding a strong and conIidence team Ior achieving a
business activity over social responsibility.

QUALITY POLICY:
We shall build and sustain a world-class organization, where quality is the hallmark oI every
process and activity.
With the involvement and dedication oI our human resource, we are committed to achieve
satisIaction oI all our stakeholders, through innovation and continual improvement.
We are committed to achieving total customer satisIaction by:
Providing products and services that meet or exceed customer expectations
Continual improvement to our quality management and processes
Fostering the proIessional development oI our employee
ISO 9000 standards are complimentary to TQP. Implemented together on a continuous basis
they can lead to the ultimate goal oI zero deIect.
VISL as obtained certiIication to ISO 9002- 1994 standards Ior production oI alloy and
special steels through Iorged route in 1995 and Ior rolled route and pig iron in 1997.
VISL has upgraded the QMS to ISO- 9001: 2000 in FE 2005

Area of the plant:
1.47 square miles or 3.8 square kilometers. Area oI operation carried out is National &
International. It is a public sector, looked aIter by the Central Government.


MILESTONES:
1918- construction work started Ior setting up a Wood Distillation plant oI 200 tonnes per day

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and one charcoal based blast Iurnace oI 60 tonnes per day.
1927-Pipe Foundry commissioned
1938-Cement plant commissioned
1943-Open health ` Furnace commissioned
1955- Second 100 T per day capacity electric iron Iurnace started
1967- Second 20 T electric arc Iurnace started
1970- combined bar and rod mill started
1985-CCM commission
1994- Conversion oI 8T EAF to LRF 2
1997-certiIied to ISO 9002 Ior rolled route and pig iron in April
1998-VISL merged to sail in December
2003-Appgraded to ISO 9001-2000 quality management system
2005-conversion oI II 20 T EAF to LRF 4
2007-CertiIication VISL Ior QMS ISO-TS 16949-2002 by M/s TUV Germany
2008-D.G.set 2.1 MuA capacity was commissioned.
2009-loom Caster was commissioned
2010-Development oI .G Axle Iorging Ior RWF , angalore.
SOURCE
VISL News A monthly news Magazine.
VISL Annual PerIormance Plan.
Personnel manual oI VISL
Insight A VISL magazine.

MAOR COMPETITORS
ISSAL,Pune
SunIlag, Nagpur
Kalyani Steels,Hospet
Mukund , Mumbai
SISCOL, Salem
Jindal, ellary

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TISCO , Jamshedpur
FACOR , Nagpur
RINL , Vizag
Starwire, Faridabad
MUSCO, Mumbai
SOURCE
VISL News A monthly news Magazine.
VISL Annual PerIormance Plan.
Personnel manual oI VISL
Insight A VISL magazine.

EMERGING COMPETITORS
RINL, Vizag
SISCOL, Salem
Vardhaman, Punjab
Adhunik, Orissa
hushan steels, Haryana
JSPL Raighad
SOURCE
VISL News A monthly news Magazine.
VISL Annual PerIormance Plan.
Personnel manual oI VISL
Insight A VISL magazine.

FUTURE GROTH AND PROSPECTUS
Future Growth oI VISL, the SAIL has designed the corporate plan Ior 2011-2012 as a
long term plan, is as Iollows:-

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SAIL investing 2000 crores Ior 3 special steel plants including VISL, Ior the modernization.
SAIL planning to increase in the production oI saleable steel up to 0.993 MNT by 2011-2012.
VISL was given Iinal nod Ior setting up a cryogenic air separation unit on build-own-operate
basis.VISL is a special plant oI SAIL. It is a large scale public limited industry. Present Status oI
Industry
The Indian Steel prices are competitive, in relation to international prices up to 1978. The new
technology also includes quality through higher automation and better process controls.
The steel sector has responded strongly to the positive stimulus oI reIorm. An apparent
consumption oI Iinished steed has increased Irom 15MT in 1991-92 to around 23MT in 1996-97.
The domestic steel sector has been able to withstand competition Irom important produces, despite
a steep reduction in custom duty. A number oI Iresh capacities are likely to be commissioned in the
coming years.

Future Prospects of Industry
According to government estimates, India`s per capita consumption oI steel is expected Irom
present 55-60 kgs to 100 kgs by 2010. y 2012, the consumption oI steel in India is expected to
reach around 55-60 MT, nearly double the current level. The SAIL is planning to increase hot metal
production Irom its plant to a level oI about 20 MT per annum 2012 against the current level oI 13
MT. For crude steel production, SAIL is planned to reach a level oI 18.7 MT by 2012 Irom the
current level oI 11.83 MT (achieved in 2003-04).

VISL adopts the 7 strategies :
Consistent quality.
Commitment to delivery schedules.
Customised grades and products.
Contemporary products.
Competitor prices.
Complaint settlements.
Culture oI customer service

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Nature of the Business Carried:

VISL today is one oI the premier oI high quality alloys and special steel producer in the country
starting with basic raw materials such as Iron ore, Lime stone, etc. VISL Steel is mostly
used by Railways and DeIence sectors besides diIIerent heavy.Industries including Steel plants.

Some oI its very specialized steel is also used Ior our Atomic plants and reactors.
Steel is produced through F-OF-LRF-VD route. The Iacilities include ladle reIining
Iurnaces, vacuum degassing, Continuous casting machine and 1600 Tones-hydraulic high
speed Iorging press, a Iully automatic horizontal long Iorging machine with Programmable
Logic Controller (PLC) numerical control system Ior a semi-automatic and automatic mode oI
operation.

The capacity oI the plant has been increased to 1,25,000 tonnes oI liquid steel and 70,000 tonnes
oI pig iron with the addition oI a 530Cu M last Furnace build indigenously through in
house eIIort oI steel. The Iirst indigenous last Furnace, 'CAUVERY was commissioned
on 24
th
Feb 1995.















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ORGANIZATION STRUCTURE OF VISL





















Govt. licensing Civil
Internal auditing Waste handling
House keeping
Iron Ore sorting
SaIety
Canteen
Security
Vehicle maintenance
BUARD UF DIRECTURS
{]
Executive Director
{]
Ceneral
Manager
Pro|ects
Managr
{]
Account
Managr
{]
HR & Admin
Manager
{]

Materials
D.C.M
{]

Production, Planning &
Plant maintenance
Manager
{]
H.R
Salaiies & Incentives
Incentives
Reciuitment

Tiaining
ADMIN
Aumin B.0.
()
Aumin Plant
()
Raw mateiial &
Finisheu
piouuct
Novement
()
Stoies
Bept
()
Puichase
Bept
()
vehicle
Naintenance
()
Lab testing
B.0.B.
()
Piocessing
B.0.B
()

Nechanical
B.0.B
()
Electiical &
Instiumentati
on
B.0.B
()

Auministiatio
n
Plant
Bept B.0.B
()

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The above organization structure shows the Iollowing points.

1) Hierarchy relationship between diIIerent department members.

2) Participative management.

3) Cooperative work culture.

4) Standardized oI polices.

5) Decentralized decision making system provided that some exceptions:-


O Valuable & economical decisions are taken by top level management only. So it is
centralized decision making.

O In visl all major decisions will be taken Irom board oI directors they have Iull control over
the administration they will control the executive and general managers these board oI
directors are selected by SAIL.


O ut the general manager oI visp will have Iull control over the deputy managers oI
project , HRD, production and material departments.

O These deputy managers will have Iull control over their respective area and they have a
right to take minor decisions regarding over their respective area.




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CHAPTER 3: THE 7S MC KINSEY MODEL

The three s across the top oI the model are describer as 'Hard Ss:

STRATEGY

Specializing in developing and marketing special alloy steels & achieve possible market
share in this niche area has been notable strategy adopted by the company. Market penetration by
the best possible past optimization techniques & achieving price excellence has been another
strategy adopted by the company.
Smart sizing oI the company through introduction oI the voluntary retirement scheme &
leveraging most advanced production techniques has been another major strategy adopted by the
company.
Systematic interview into all the processes through development & the processes through
development & the implementation oI various systems has been another strategy adopted by the
company to streamline its operations. Very good selection & development systems adopted
coupled with several employee welIare measures has been a notable strategy adopted by the
company Ior attracting & returning the talent.


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STRUCTURE:

Structure is the organizational chart and associated inIormation that shows who report to whom
and how task are both divided up and integrated. In other words structure describe the hierarchy
oI authority and accountability in an organization, the way the organizations units relate to each
other :centralized, Iunctional, division ( Top-Down) ; decentralized ( The trend in larger
organizations) ; matrix, networks, holding ,etc,. These relationship are Irequently diagrammed in
organizational charts. Most organization use some mix oI structures- pyramidal, matrix or
networked ones- to accomplished their goals strategy.

SYSTEMS:

Systems deIine the Ilow oI activities involved in the daily operation oI business,
including its core processes and its support systems. They reIer to the procedures, processes and
routines that are used to manage the organization and characterize how important work is to be
done.
Systems in business system:
usiness process management system
Management inIormation system
Innovation system
PerIormance management system
Financial system/ Capital allocation system
Compensation system/ Reward system
Customer satisIaction monitoring system..,etc,.



The 4Ss across the bottom oI the model are less tangible, more cultural in nature, and were
termed 'soIt Ss by McKinsey these are shared values:



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SKILLS
The company is capable oI accepting & producing any type oI the product & executes it
well beIore schedule & to the expectation oI the customers. The company is able to manuIacture
over 700 grades oI alloy & special steels to meet the speciIic requirement oI individual
customers.

The steps taken to improve necessary skills oI the employee

1) On the job training
7 days training Ior transIerred employees
1 year probationary period Ior newly recruited employee
Induction training to promoted employee Irom non-executive level to executive
level
6 months probationary period Ior all the executives who are promoted

2) OII the job training
Lecture
Group discussions, case studies
Management games
Developing presentation skill
ConIerence
External training
SpeciIic need base training etc

STYLE
As VISL is a unit a unit oI SAIL, VISL Iollows three types oI styles. Those are as Iollows.
Top down approach
ottom up approach

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Recruitment process approach
In top down approach the corporate oIIice plans activities & sent it to the every units.
ecause to know whether it is suitable or not & with construction decision are taken.
In the bottom up approach all the units oI SAIL plans the activities or recommended
certain policies Ior their convenient & send to the corporate oIIice Ior their convenient & send to
the corporate oIIice Ior approval, thus decisions are made. In this approach the corporate oIIices
only takes certain decisions without consulting the units.
In recruitment process the decisions regarding the recruitment oI execution are made by
the decisions are made by the units itselI according to their corporate oIIice without consulting its
units. ut in case oI recruitment oI non-executives, the decision are made by the units itselI
according to their requirement & then sent Ior the approval oI corporate oIIice.

STAFF
The people in the organization are very dedicated & work towards the improvement oI the
organization. The skill levels oI the workers are work oriented & they are specialized in their
respective Iield oI work.
Most oI the workers are well experienced & well trained.
The staIIs are graded Irom S1 to S11 Ior non-executives & E1 to E9 Ior the executives.
The qualiIication Ior the non-executive employees are SSLC, ITI & Ior the non-executives
Diploma & any degree or higher.
There is totally around 2300 staII members are the members also there. Their average age
is 51-52. The duties & responsibilities oI staII diIIers Irom department to department like
production department to other department.

SHARED VALUES
With a vision oI being a world class, innovative & proIitable alloy & special steel plant it
has used all the available resources .The companyhas common goal to all its concerns & shares
the inIormation available in every concern.
The VISL has implemented the Iollowing main objectives.

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It has been able to build the lasting relationship with customers based on trust & mutual
beneIit.
It has been able to uphold highest ethical standards in conduct oI business
It has been able to create & nurture a culture that supports ,Ilexibility learning & its
proactive to change.
It also charted a challenging career Ior the employees with opportunities Ior the
advancement & rewards.
It values opportunity & responsibility to make a meaningIul diIIerence in people`s
levels.


Hard elements are easier to deIine or identiIy and management can directly inIluence
them: These are strategy statements; organization charts and reporting lines; and Iormal processes
and IT systems.

SoIt elements, on the other hand, can be more diIIicult to describe, and are less tangible
and more inIluenced by culture. However these soIt elements are as important as the hard
elements iI the organization is going to be successIul.


The way the model is presented in Iigure above depicts the interdependency oI the
elements and indicates how a change in one aIIects all the others.










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CHAPTER 4:HUMAN RESOURCE DEPARTMENT











Human Resources Development (HRD) in VISL is not merely limited to training oI the
employees but is aimed at overall development oI employees in all Iields. A new
Entrant to the organization is given necessary training like induction training, class room training
and on the job training to equip them to handle challenges in their work. The experienced and
committed workers oI VISL are ever ready to acquire more skill and competency in their job.
Multi skill training activity is a prime thrust in all our training activities.
A culture oI team work and creativity has been encouraged through the Suggestion Award
Scheme 'SURAHI, Special Award Scheme and Quality circles. The creative talent oI our
employees has been harnessed Ior improvement oI various operational and maintenance
practices. It is no mean Ieat that a small plant like VISL has bagged Prime Minister`s Award as
well as Vishwa Karma Award Ior 14 employees. VISL team has won second place in the second
place in the grand Iinal oI the Mega Steel Quiz 'CRUCILE 2005 held at the hilai in
September.
Large number oI employees are communicated about the tasks, targets and perIormances oI the
company in a periodic communication exercise conducted by our
ChieI Executive. Employees suggestions during these meetings to achieve task and targets are
Iollowed up and implemented by a high power committee.
DSM- PERS & HRD
AuN (BRB)

Senioi Auministiative
Assistants


BANR, BAvANuERE 8



Number of employees in the plant:
2300 employees,1030 employees including technical , non technical, mechanical.270
executives. 1000 contract employees.

INFRASTRUCTURAL FACILITIES:

VISP is a huge plant; it covers 4.8 Sq kms area. It has been providing inIrastructural
Iacilities like,

O Accommodation Ior employees at lower rates.
O One Guest House
O One club
O VISL Town Administration oIIice
O VISL Hospital
O VISL Silver Jubilee Stadium.
O VISL Platinum Jubilee Stage
O Ispat club Ior executives
O Gents club Ior both executives and non executives
O OIIicers association
O Workers association
O 8 Education Institutions
O 2 Parks and cultural Exhibition.

HRD KENDRA

HRD concentrates on developing people through training with the objective oI changes in
knowledge, skills and attitudes, resulting in changes in job perIormance and ultimately changes

BANR, BAvANuERE 9
in organizational eIIectiveness. Emphasis is given to need based training with the active guidance
Irom the corporate oIIice, SAIL and MTI, Ranchi.


HUMAN RESOURCE DEVELOPMENT

Resource is any means oI supply which ca be drawn on when necessary. To develop means to
grow, mature and make progress in the desired direction. Developing a human being in to a
resource means making him or her into a person oI resourceIulness, initiative wittedness,
cleverness talent and ability.

Human Resource Development is considered to be a super speciality oI HRM. It is a process
by which the employees oI an organization are helped in planned and continuous manner to
acquire new capabilities and sharpen existing capabilities, that may be required to perIorm their
present Iunctions or expected Iuture voles.

HRD is a process which is geared towards developing the general enabling capabilities oI
employees as individuals so that they can discover and exploit their own inner potential Ior their own
and / or organization development purposes. HRD strives to develop an organizational culture where
superior subordinate relationships, team diIIerent sub units are strong and contribute to the
organizational health, dynamisms and pride oI employees.

Training programs are as follows:
O FRESH ENTRANTS
Induction and orientation

O COMPETENCE ENHANCEMENT
Technical
Multi skill training
Managerial

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SPECIFIC AREA
SaIety
Environment
Cost control and deduction
Quality
O EXTERNAL TRAINING
O OTHER AREAS
Hindi training

GOALS OF HRD:
O Development oI individual capacity
O Development oI competitive in relations job being perIormed
O Development oI corporate approach
O Development interpersonal relationship
O Development oI overall organization culture


Role of HRD:
O Human resources planning
O Human resources accounting
O Human resources allocation and role planning
O Human resources training and development
O Human resources maintenance
O Climate development oI HRD

Activities of HRD
Training need identiIication

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1) Training need assessment
2) Training need justiIication
3) udgeting and controlling oI cost
4) Selection oI learning process
5) Planning, designing, conducting the training procedure
6) Evolution oI program through, the trainee and Ieed back records

Training Objectives:-

7) To help the trainee
8) To improve knowledge, skill, attitude & perIormance.
9) To develop competence to increase productivity.
10) To prepare Ior greater responsibility.
11) To improve interpersonal relationship.
12) To equip with modern tools & techniques oI to harness best oI the human resources and
maintains industrial harmony.
13) Modern how to develop selI and his subordinates.

Human Resource rely`s on the 4 M`s
Money
Material
Manpower
Machine

RECRUITMENT/SELECTION/INDUCTION METHODS
Recruitment Ior executives is carried out by the Corporate oIIice at Kolkatta.The grades
Irom E1 cadre to E6 cadre. In order to IulIill the requirements and to meet their
expectation. Non-executives are recruited by the top level managers based on the
experience, skills, abilities.


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Induction methods carries initial show oI the work culture given Ior the Ireshers &
executives who are transIerred. It carries a training oI a week.
Selection is done through interviews , written tests & group discussions.
Promotion & transIer are oI 3 types carried out in VISL
Within executive cadre
Within non executive cadre
Non executive to executive cadre
There are 2 types oI interview carried out in VISL
Direct (Personnel ) interview
Exit interview

Performance appraisal
For the executives it is selI-appraisal , here the HOD gives the task to the executives
and the executives need to complete the task and need to rate himselI. This would be
reIerred by the reporting oIIicer. The appraisal is done online through electronic
appraisal system.
For the non executives it is done by the shiIt managers. The shiIt managers will
provide the task to the non executives and the appraisal will be rated by the reporting
oIIicer according to their perIormance, attendance, discipline etc.
There is perIormance related pay and bonus.There are awards provided by Steel
executive Iederation and National joint committee Ior steel industry.
Motivation
Instant award scheme this award will be recommended by the HOD to the team or to
the individual.
On 26
th
January
Jawahar award Ior executives
Nehru award Ior non executives
Long service award
Employee suggestions Ior this the best one will be awarded

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They have a system called HRIS where the employee can see his position in his
respective department through intranet.
Schemes
Employee Iamily beneIit scheme
PF & Gratuity
CHAPTER 5:PRODUCTION & PURCHASE DEPARTMENT
Process of functioning of purchase department

Purchase indent by consuming party

Purchase enquiry

Floating

Finalizing the oIIers

Placing the purchase order

Procurement oI materials

Inspection oI materials

SDR, SIV & SRV are prepared

PRODUCTS OF VISL

Rolled Alloy & Special Steels.

The ores used in making iron and steel are iron oxides, which are compounds oI iron
and oxygen. The major iron oxide ores are hematite, which is the most plentiIul, limonite, also
called brown ore, taconite, and magnetite, a black ore. Magnetite is named or its magnetic

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property and has the highest iron content. ut important ore, which contains both magnetite and
hematite.
This is the main major component which is produced in visl and it will have the demand Irom
deIence units, railways and steel units.



Forged Alloy & Steels
Some rare companies will produce like these Iorged and alloy steels in that visl is one
oI them. These type oI alloy and steels will have the greater demand in deIence units, railways,
engineering industries.


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Concast Blooms.
This is made by the special treatment in which it will have the greater demand Irom
alloy companies, power sector units, bhel Hyderabad etc..

As Cast Alloy & Special Steels Ingots.
This type cast alloy and steel ingots will incur more expenditure and they made
Irom special alloys and they have a greater demand Irom bearing industries like TATA,
NC and also Irom the deIence units.

Pig Iron - Basic & Foundry Grade.
The three raw materials used in making pig iron (which is the raw material needed
to make steel) are the processed iron ore, coke (residue leIt aIter heating coal in the
absence oI air, generally containing up to 90 carbon) and limestone (CaCO
3
) or burnt
lime (CaO), which are added to the blast Iurnace at intervals, making the process
continuous. The limestone or burnt lime is used as a Iluxing material that Iorms a slag
on top oI the liquid metal. This has an oxidizing eIIect on the liquid metal underneath

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which helps to remove impurities. Approximately two tons oI ore, one ton oI coke, and
a halI ton oI limestone are required to produce one ton oI iron.




Granulated Slag.
This slag is the component coming Irom the blast Iurnace when we get the pig iron,
this slag is usually used in the cement industries to produce cements so it will have the demand
Irom cement industries.


Liquid Nitrogen
It is prepared in visl only and they have a unit oI producing nitrogen gas used Ior
their own consumption and it is used to burning purpose.


STEEL GRADE:

4 TOOL STEELS

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4 SPRING STEELS
4 ALLOY STEELS
SIZE RANGE:
4 20 TO 56 DIA / RCS ROLLED (AR MILL)
4 60 TO 140 DIA / RCS ROLLED (PRI. MILL)
4 75 TO 195 DIA / RCS FORGED (LFM)
4 200 TO 700 DIA / RCS FORGED (PRESS)
4 UNIT WT. OF FORGING 8 Ts.

SUPPLY CONDITION

4 NORMALISED
4 ANNEALED
4 SPHERODISED ANNEALED
4 HARDENED & TEMPERED
4 MACHINED TO DRG. SIZE
4 CLOSED DIE FORGED ITEMS
4 PEELED & GROUND ARS.


As VISL is a large scale industry it Iunction not only in the national market but also in
international market.

Various department Iirst identiIy the needs oI material, then approach to the purchase
department and sent a purchase indent, in which they state quantity, amount and Quality oI the
product required, then purchase department makes an enquire about purchase indent, then it
places a purchase order to the supplier.


BANR, BAvANuERE 8
Purchase order is prepared on the basis oI quotation in which they stator quality, rate3 amount
terms oI purchase Irequency oI supply and delivery schedule etc, and then they think best, then
there makes an inspection oI all the materials as per the condition and terms oI purchase order.

RAISING OF INDENTS
In the Indent, the Indenter will ensure, depending upon the nature oI the item indented,
incorporation oI special requirement oI inspection/check-list Ior special packing instructions, iI
any.
In case some oI the items in the Indent are matching/ complementary parts oI an
equipment/assembly and are required to be supplied by one supplier only, the Indenter shall
speciIy this in the Indent.
With a view to optimizing the utilization oI internal Iacilities, each Plant/Unit is to prepare and
get approved by the Competent Authority, an annual plan Ior 'Make' items in increasing numbers
on cost-eIIective basis, one month beIore the beginning oI each Iinancial year Ior the ensuing
Iinancial year. Indents shall not be raised Ior items identiIied as 'Make' in the annual plan Ior the
Iinancial year. For such items the department shall raise 'Work Order (WO)' in the prescribed
Iorm, to be placed on the Shops.

FOR OB CONTRACTS
The Indenter should give detailed inIormation regarding description oI the jobs to be executed
along with the materials to be supplied and equipment to be deployed by the contractor, wherever
applicable. For the items to be supplied, the quantity along with detailed speciIications and
drawing number, etc., should be given in the indent. Similarly, Ior the equipment to be deployed
the desired capacities oI the equipment, their ownership, procurement through rent/lease, etc.,
should be speciIied in the Indent.
The overall quality oI the jobs to be executed along with the expected PerIormance Guarantees
should be clearly indicated in the Indent. The Indent should also include any other special terms
and conditions required Ior the execution oI the jobs.
In case only one contractor is to be engaged Ior some oI the jobs/all the jobs given in the Indent,
the Indenter shall speciIy this in the Indent.
The indents Ior purchase oI materials/job contracts shall be raised by the department(s)

BANR, BAvANuERE 9
concerned or designated centralized agencies. These Indents shall be prepared in the prescribed
Iormat (to be designed by each Plant/Unit). The indent shall be signed by the Head oI the
Department (HOD). The Plant/Unit shall devise a proper system oI numbering the Indents
initially and their processing reIerence at diIIerent stages to Iacilitate cross-reIerence. Suitable
Index registers shall also be maintained Ior such numbering/reIerences at diIIerent stages Ior
control purposes.

FOR PURCHASE OF MATERIALS
The Indenter should give Iull and complete inIormation regarding the description and
speciIication oI the material to be procured. To the extent possible, speciIications given should be
standard speciIications conIorming to IPSS, PS, ISS or DIN, etc. The cut-oII points Ior
perIormance and the points Ior bonus and penalties should be indicated, wherever Ieasible.
ManuIacturing Drawings, wherever required, should be enclosed in adequate numbers with the
Indent.
Along with the Indent, the Indenter shall also prepare and enclose the Iollowing:
n respect oI new items, a check-list as per the prescribed proIorma (to be designed by each
Plant/Unit) justiIying the indented quantity, with all columns correctly and completely Iilled.
This check list shall be signed by the HOD.
In respect oI proprietary items, a certiIicate on the prescribed proIorma (to be designed by each
Plant/ Unit) signed by the HOD. The purchase oI items on proprietary basis should be kept at the
minimum possible level and should be resorted to when other technically acceptable substitutes
are not available.
MODE OF TENDERING
iii) For any other commercial consideration i.e. as a policy, DOP/estimated value oI purchase/job
contract, Iormation oI cartel/ ring like situations etc.
Plants/Units shall ensure that the complete tender documents along with the enclosures, iI any,
are displayed on the SAIL website which can be downloaded by the interested tenderers.
Application made on such Iorms shall be treated as valid Ior participation in the tender. The cost
oI tender documents, iI any, may be collected Irom the bidders at the time oI submission oI
tenders. However, bidders would be given option to collect the complete document in hard copy,
iI they so desire.

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An abridged version oI the open tender notice shall be published in leading local/ national
newspapers, as per prevailing guidelines; about the required material/job and that the details oI
the tender are available in the given website. For import, the tender notices should also be
published in Indian Trade Journals and/or Indian Export ulletin.

LIMITED TENDER ENQUIRY (LTE)
LTE should be issued only when reliable manuIacturers/ suppliers/traders/contractors are known.
For this purpose, the MM Deptt./Contract Cell shall maintain a list oI registered parties in
accordance with Para 5.3.3.
When the decision is to adopt LTE as a mode oI tendering, the whole indent should be treated as
one and no split up thereoI should be made to reduce the value oI tender enquiries.
LTE shall be issued only to the registered manuIacturers/ suppliers/traders/contractors. The
registration oI manuIacturers/suppliers/traders/contractors should be according to relevant IPSS.
LTE Ior trial order may be issued only with the approval oI Head oI MM Deptt./Contract Cell.
The total quantity to be ordered under the trial order shall also be speciIied and approved by
Competent Authority. The procedure Ior placement oI trial order will be as per Para 12.0.
The recommended modes oI tendering Ior placement oI orders are as under:
i) Open Tender/Global Tender,
ii) Limited Tender Enquiry (LTE),
iii) Single Tender Ior Proprietary items (Original Equipment ManuIacturers).
iv) SingleTender(otherthanProprietaryitem)
Apart Irom the above methods oI tendering, the Iollowing methods Ior placement oI direct orders
may also be considered.
i) Repeat orders,
ii) Plant/Unit/SAIL Rate Contract,
iii) DGS&DRateContract.
In addition to the above, there may be occasions when the Plant/Unit may have to resort to
emergency purchase/job contract.
Approval oI Competent Authority shall be obtained Ior issuance oI NIT in each oI the above
case.
Open/Global tenders are to be considered under the Iollowing circumstances:

BANR, BAvANuERE
When reliable manuIacturers/suppliers/traders/ contractors as well as latest technology are not
clearly known.
When it is Ielt that advertising may elicit better response.

SINGLE TENDER ENQUIRIES (FOR PROPRIETARY ITEMS)
Proprietary (Original Equipment ManuIacturers-OEM) Enquiry :
Enquiries Ior Proprietary items (OEM) should be issued with the approval oI Competent
Authority as per the DOP. Such Proprietary items should be purchased Irom their manuIacturers
or their authorized dealers only, where the manuIacturer does not supply the equipment directly.
In case there is more than one dealer authorized to sell a particular proprietary item, to
Plant/Units, discount may be possible through Limited Tender Enquiries, thereIore LTE may be
issued to the authorized dealers.
Single Tender Enquiry (Other than Proprietary Items)
Single Tender Enquiries should be issued as an exception only. Such enquiries should be
processed, aIter recording reasons and indenter should take approval oI ChieI
Executives oI the Plant/Unit in all cases except procurement Irom PSUs/State Government
Undertakings where approval oI Competent Authority shall be obtained.
A list oI items procured on single tender basis, oI value Rs. 5 Lacs and above should be hosted on
SAIL website to enhance vendor base oI such items. The list oI items displayed would be plant-
wise; giving items details viz. Catalogue number, description, detailed speciIications, annual
requirement as well as area oI use etc.
The instructions to be included on the website should be that, 'Whoever is interested to be a
registered supplier oI these items, should Iill up the vendor registration Iorm, uploaded on the
website. The normal registration process shall, thereaIter be Iollowed by the Plants/Units Ior
registering the eligible suppliers.
Plants/Units should ensure updating oI the list oI Single tender items on website on a quarterly
basis. A resource person at respective plants/Units should be nominated Ior co-ordination.

REPEAT ORDERS
Normally, as per the lead time, prior to expiry oI the running supplies/Job Contract, the Indenter
has to process Iresh Indent. However, due to unavoidable circumstances, iI either the Indent is

BANR, BAvANuERE
not processed or even aIter processing the Indent, it is not possible to place Iresh order in time,
under such circumstances Ior the Item/ Job Contract Ior which continuity is essential, it may be
necessary to place repeat order on existing party/ contractor. AIter recording the reasons leading
to placement oI repeat order, the proposal Ior repeat order on same terms, conditions and
speciIications may be considered on the Iollowing:

i)The original order must have been placed in the usual course aIter issue oI LTE or Open
Tender. Emergency orders shall not be considered.
ii) Not more than two years have elapsed since placement oI the original order.

METHODS FOR CALLING TENDERS
The Iollowing methods Ior calling oI tenders shall be adopted:
1)Single Part Tendering,
2)Two Part/Three Part Tendering,
3)Pre-qualiIication bid/Expression oI Interest (EOI)
Iollowed by single/two part/three part tendering.

Payment terms
Payments should be made strictly according to terms & conditions as indicated in Purchase Order
(PO)/ Contract. Deviation, iI any, in payment terms should be approved by Competent Authority
with the concurrence oI Head oI Finance oI respective Plant/ Unit.
In case where delivery period has expired, documents sent through ank should be released only
on approval oI the Competent Authority based on recorded reasons. Such approval should be
obtained within two working days. In the case oI payments through ank, the Accounts
Department aIter receipt oI necessary advice Irom the concerned ank will make payment to the
ank as per the terms oI Purchase Order.


TAXES

BANR, BAvANuERE
II any tenderer does not ask Ior duties, taxes, levies, etc. extra in his quotation and iI this
clause has accordingly been incorporated in the Purchase Order/Contract, the tenderer
will not be eligible Ior payment .

A. PRODUCTION DEPARTMENT:
LAST FURNACE:
STEEL MAKING SHOP:
ROLLING MILLS:
FINISHING SHOP:
HEAT TREATMENT SHOP:
FOUNDRY:
MATERIAL MANAGEMENT:

Structural Shop:
In this section almost all the type oI equipments used in the VISP are manuIactured and
repaired. Some oI the equipments manuIactured in structural shop are:
1. converter
2. Laddle
3. F vibarator screen
4. VD covers
5. LiIting table
6. Drilling Machine
7. Gate
PROCESS FLOW DIAGRAM










Blast fuinace
Nixei
Basic 0xygen Fuinace
Pig Casting Nachine Cast Iion
Founuiy
vBv0B Continuous Casting

BANR, BAvANuERE

































CHAPTER 6:MARKETING DEPARTMENT

VISL MARKETING



CMO


Advertising

Lauule Refining Fuinace
Forging at Iorge
plant
Bisposition
Beat Tieatment
Inspection Stiaightening
Piocessing at venuoi
Inspection
Bispatch



Netalluigical Test
Ignots

BANR, BAvANuERE

Services


Demand & Respond


Place to Advertise


Product


Plan

Marketing is a systematic Iunction and it has its own importance in every organization. Main
objectives oI marketing department in VISP are to identiIy customer`s needs and satisIies then
accordingly. It is the process oI buying and selling mainly based on demand and supply analysis.

eIore liberalization, 'producer controlled the market. He took the decision about the
price, quality etc. Now trend has changed, 'customer is the king in the market and satisIying the
customer needs is main objective oI the organization.

eIore the liberalization was marketing oI steel was very easy as steel was a controlled
commodity. Now in the era oI LPG, it is a Iree market and customer dictates the market.

VISL produces special steel and alloy it sells it products directly to the customers. It does
not have any channels oI distribution Ior selling its product. It has branches in various areas like
angalore, Calcutta, Pune, Delhi, Mumbai, and Nagpur. Pune branch has a very large branch.

The branch manger receives all the enquiries Irom the customer and sends it to marketing
department. Any rejection that takes place due to low quantity, quality etc, is handled by branch
managers. Finished goods oI VISP are raw material Ior other company. They adopt integrated
marketing procedure. It produces goods only aIter getting the order Irom customer.


BANR, BAvANuERE
MARKETING NETORK

So VISL has an expanded marketing network in India. The Iollowing summary oI marketing
network, branches, and stockyard oI VISL are as

angalore - ranch sales oIIice
Calcutta - ranch sales oIIice
Mumbai -ranch sales oIIice
Pune - ranch oIIice & stockyard
Delhi -ranch oIIice & stockyard
Ahmedabad -Stockyard

PPRODUCTS OF VISL
Rolled Alloy & Special Steels
Forged Alloy & Special Steels
As Cast Alloy & Special Steels
Concast looms
As Cast Alloy & Special Steels Ingots
Pig Iron asic & Foundry Grade
Granulated Slag
Liquid Nitrogen

MARKETING NETORK OF VISL

BANR, BAvANuERE




GRADES MANUFACTURED


CARON & ALLOY - rakes, CamshaIt,
CONSTRUCTIONAL STEELS Axles, Spring olts,
CASE HARDENING STEELS - Piston Rings, ushes, Gear wheels,
Spindles, ShaIts, Steering parts.

MorKe11ng
HQ
BDVT


Bongo1ore


enno1


o1ou11o


Neu
De11


SJY
(SA1L)

A2edobod


Mu2bo1


!une


SJY
(V1S!)


SJY
(SA1L)

S,Y
(SAII)


BANR, BAvANuERE 8
FREE CUTTING STEELS - olts, Nuts, Screw
SPRING STEELS - LeaI, Helical, Volute
& Torsion Springs
ALL EARING STEELS - alls, rollers & races
TOOL & DIE STEELS - Heavy Iorging / riveting hammers, chisels,
scissors kniIe blades punches, lathe
centers etc. & all types oI die blacks Ior
medium & small Iorging dies.
SOFT MAGNETIC IRON - Railway Signaling & other electrical /
magnetic relay system.

CATEGORIES OF STEEL :
CARON & ALLOY CONSTRUCTION STEEL
CASE HARDENING STEEL
FREE CUTTING STEELS
TOOL & DIE STEELS
SPRING STEELS
ALL EARING STEELS
SOFT MAGNETIC IRON
HIGH TEMPERATURE STEELS
B) SIZE RANGE:

20 TO 56 DIA / RCS ROLLED (AR MILL)
60 TO 140 DIA / RCS ROLLED (PRI. MILL)
75 TO 195 DIA / RCS FORGED (LFM)
UNIT WT. OF FORGING 1 T.
200 TO 700 DIA / RCS FORGED (PRESS)
UNIT WT. OF FORGING 8 Ts.




BANR, BAvANuERE 9

Supply condition
1. NORMALISED
2. ANNEALED
3. SPHERODISED ANNEALED
4. HARDENED & TEMPERED
5. PROOF MACHINED
6. MACHINED TO DRG. SIZE
7. CLOSED DIE FORGED ITEMS
8. PEELED & GROUND ARS
9. SPECIFIC / UNIT LENGTH

MAOR CUSTOMERS
DEFENCE UNITS :
ORDNANCE FACTORY, AMAJHARI
ORDNANCE FACTORY, KANPUR
ORDNANCE FACTORY, KHAMARIA
ORDNANCE FACTORY, TRICHY
METAL & STEEL FACTORY, ISHAPORE
RIFLE FACTORY, ISHAPORE
SMALL ARMS FACTORY, KANPUR
HEAVY VEHICLES FACTORY, AVADI
MIDHANI, HYDERAAD

RAILAYS:
INTEGRAL COACH FACTORY, PERAMUR
CENTRAL RAILWAY, MUMAI
RAIL SPRING KARKHANA, GWALIOR
DIESEL LOCO WORKS, VARANASI
SOUTHERN RAILWAY, PODANUR
RAIL WHEEL FACTORY, ANGALORE


BANR, BAvANuERE

POER SECTOR:
HEL UNITS, HYDERAAD, TRICHY, HARDWAR
NLC, NEYVELI
NPC, MUMAI

STEELS PLANTS:
HILAI STEEL PLANT
OKARO STEEL PLANT
ROURKELA STEEL PLANT
DURGAPUR STEEL PLANT
IISCO STEEL PLANT
JSW, ELLARY
RINL, VIZAG

ENGINEERING INDUSTRY:
HMT UNITS, ANGALORE
TRACTOR ENGINEERS, MUMAI
SHANTI GEARS, COIMATORE
KIRLOSKAR TOYODA TEXTILE MACHINERY,
ANGALORE
DYNAMATIC TECH, ANGALORE
FERROMATIC MILACRON, AHMEDAAD
DEE TEE INDUSTRIES, INDORE

AUTOMOBILE / FORGING INDUSTRY:
HARAT FORGE LIMITED, PUNE
AMFORGE INDUSTRIES LIMITED, PUNE
AMTEK GROUP, PUNE
AHMEDNAGAR FORGINGS LIMITED, PUNE
TRINITY FORGE GROUP, PUNE
TRINITY ENGINEERS LIMITED, PUNE
MM FORGINGS LIMITED, CHENNAI

BANR, BAvANuERE
SHARDLOW INDIA LIMITED, CHENNAI
AY FORGE LIMITED, CHENNAI
SIFL, THRISSUR
MGM INDUSTRIES LIMITED, MYSORE
TATA MOTORS, JAMSHEDPUR

EARTH MOVERS:
EML UNITS, ANGALORE, MYSORE, KOLAR GOLD FIELDS
L&T, ANGALORE
HINDUSTAN MOTORS, HOSUR

BEARING INDUSTRY:
NEI, JAIPUR
TISCO, JAMSHEDPUR
JINAAKUL FORGE PRIVATE LIMITED, ELGAUM
JINALLOY STEEL PROCESSOR, MUMAI
DUAL RINGS, HYDERAAD
AUSTIN ENGINEERING, JUNAGADH

PIG IRON:
MUKUND LTD., GINIGERA
KALYANI STEELS LTD., GINIGERA
ISSAL, PUNE
KALYANI CAPENTER, PUNE
MUSCO, KHOPOLI
PEARLITE LINERS, SHIMOGA
SISCOL, SALEM
NAVAKARNATAKA STEEL, ELLARY
VARIOUS TRADER






BANR, BAvANuERE


CHAPTER 7:FINANCE DEPARTMENT

Finance Department chart
















FINANCIAL DEPARTMENT:

FLO CHART OF FINANCIAL DEPARTMENT:

ACCOUNT SYSTEM:

CENTRAL ACCOUNTS:

PURCHASE FINACE SECTION:

SALES ACCOUNTS SECTION:

PAY AND ESTALISHMENT:

COST ACCOUNT SECTION:

OTHER AREAS OF FINANCE:

Finance means acquisition oI Iunds and proper utilization and allocation oI Iunds in proper way.
Finance plays a vital role in the development oI any business. Thus development oI any business
majorly depends on the eIIective Iinance management.

DCM-Finance
AuN-C&IT SR.NuR
SALES,CA,
CE
NuR.C0ST &
B0B
NuR.P0R
& PR0}
NuR.PAY &
EST
NuR.SALES }i.Ngi
CASB
BY.NuR CE ASST.Nu
R CA
DCM-IJC Finance

BANR, BAvANuERE
In VISL Finance Management Department can be divided into diIIerent sections. General
Manager is the head oI the Iinance department and computer section. He looks aIter over all
activities oI Iinance department. Each section maintains the books oI the accounts. The
Iollowing sections deal with their related transactions.
1. Central accounts section.
2. Purchase accounts section.
3. Sales accounts section.
4. Capital project account section.
5. Pay and Establishment Section
6. Cost and budget account section.
Finance Management is one oI the most important Iunctions in the organization. It is the
liIeblood oI the company. Financial management involves the preparation oI budget, which will
be useIul Ior the Iuture decisions, and it will give inIormation about the company`s Iinancial
position to the customer, creditors and Government.

Depreciation method followed:

Depreciation is provided on straight-line method at the rates speciIied in Schedule XIV to the
Companies Act, 1956.
However, where the historical cost oI a depreciable asset undergoes a change, the depreciation on
the revised unamortised depreciable amount is provided over the residual useIul liIe oI the asset.
ClassiIication oI plant and machinery into continuous and non-continuous is made on the basis oI
technical opinion and depreciation provided accordingly.
Depreciation on addition/deletion during the year is provided on pro-rata basis with reIerence to
the month oI addition/deletion.There seems to be no deviation Irom the provisions oI the
Companies Act in respect to Depreciation rates.
The schedule is known as "SigniIicant Accounting Policies and notes on Accounts"




BANR, BAvANuERE
Balancesheet of Visveswaraya Iron & Steel Ltd

Particulars Mar'10 Mar'09 Mar'08 Mar'07 Mar'06
Liabilities 12 Months 12 Months 12 Months 12 Months 12 Months
Share Capital 4,130.40 4,130.40 4,130.40 4,130.40 4,130.40
Reserves &
Surplus
29,186.30 23,853.70 18,933.17 13,182.75 8,471.01
Net Worth 33,316.70 27,984.10 23,063.57 17,313.15 12,601.41
Secured Loans 7,755.90 1,473.60 925.31 1,556.39 1,122.16
Unsecured
Loans
8,755.35 6,065.19 2,119.93 2,624.13 3,175.46
TOTAL
LIAILITIES
49,827.95 35,522.89 26,108.81 21,493.67 16,899.03
Assets
Gross lock 35,382.49 32,728.69 30,922.73 29,912.71 29,360.46
(-) Acc.
Depreciation
21,780.91 20,459.86 19,351.42 18,315.00 17,198.32
Net lock 13,601.58 12,268.83 11,571.31 11,597.71 12,162.14
Capital Work in
Progress.
15,039.83 6,544.24 2,389.55 1,236.04 757.94
Investments. 668.83 652.70 538.20 513.79 292.00
Inventories 9,027.46 10,121.45 6,857.23 6,651.47 6,210.06
Sundry Debtors 3,493.90 3,024.36 3,048.12 2,314.75 1,881.73
Cash And ank 22,436.37 18,228.53 13,759.44 9,609.83 6,172.64
Loans And
Advances
5,155.32 4,292.50 3,644.22 3,097.70 4,524.37
Total Current
Assets
40,113.05 35,666.84 27,309.01 21,673.75 18,788.80
Current
Liabilities
13,383.67 10,201.51 8,960.91 8,105.99 8,081.23
Provisions 6,211.67 9,408.21 6,797.83 5,550.78 7,236.44
Total Current
Liabilities
19,595.34 19,609.72 15,758.74 13,656.77 15,317.67
NET
CURRENT
ASSETS
20,517.71 16,057.12 11,550.27 8,016.98 3,471.13
Misc. Expenses 0.00 0.00 59.48 129.15 215.82
TOTAL
ASSETS
(ACDE
)
49,827.95 35,522.89 26,108.81 21,493.67 16,899.03


BANR, BAvANuERE
Profit & Loss Account of Iron & Steel Ltd.

Mar'10 Mar'09 Mar'08 Mar'07 Mar'06
12 Months 12 Months 12 Months 12 Months 12 Months
INCOME:
Sales Turnover 44,059.72 49,331.47 46,175.85 39,722.59 32,805.96
Excise Duty 3,463.82 5,532.89 6,217.18 5,393.82 4,605.48
NET SALES 40,595.90 43,798.58 39,958.67 34,328.77 28,200.48
Other Income 0.00 0.00 0.00 0.00 0.00
TOTAL INCOME 42,924.01 46,078.47 41,498.36 35,683.73 29,092.78
EXPENDITURE:
ManuIacturing
Expenses
4,234.65 3,762.77 3,317.74 2,925.43 2,793.45
Material Consumed 19,768.57 22,042.58 16,821.39 15,963.13 13,903.23
Personal Expenses 5,417.00 8,401.73 7,919.28 5,087.76 4,156.97
Selling Expenses 1,126.12 935.68 1,143.90 1,066.73 1,108.12
Administrative
Expenses
834.52 1,644.78 1,321.44 1,064.29 1,035.99
Expenses
Capitalised
0.00 -1,930.40 -1,832.22 -1,423.08 -1,352.05
Provisions Made 0.00 0.00 0.00 0.00 0.00
TOTAL
EXPENDITURE
31,380.86 34,857.14 28,691.53 24,684.26 21,645.71
Operating ProIit 9,215.04 8,941.44 11,267.14 9,644.51 6,554.77
EITDA 11,543.15 11,221.33 12,806.83 10,999.47 7,447.07
Depreciation 1,337.24 1,285.12 1,235.48 1,211.48 1,207.30
Other Write-oIIs 10.33 128.02 75.49 128.59 181.44
EIT 10,195.58 9,808.19 11,495.86 9,659.40 6,058.33

BANR, BAvANuERE
Interest 402.01 253.24 250.94 332.13 467.76
ET 9,793.57 9,554.95 11,244.92 9,327.27 5,590.57
Taxes 3,452.89 3,284.28 3,934.65 3,253.80 1,694.36
ProIit and Loss Ior
the Year
6,340.68 6,270.67 7,310.27 6,073.47 3,896.21
Non Recurring
Items
228.89 -277.12 161.90 53.75 45.64
Other Non Cash
Adjustments
184.80 181.26 64.61 60.57 71.12
Other Adjustments 0.00 0.00 0.00 14.50 0.00
REPORTED PAT 6,754.37 6,174.81 7,536.78 6,202.29 4,012.97
KEY ITEMS
PreIerence
Dividend
0.00 0.00 0.00 0.00 0.00
Equity Dividend 1,363.03 1,073.90 1,528.25 1,280.42 826.08
Equity Dividend
()
32.99 25.99 37.00 30.99 20.00
Shares in Issue
(Lakhs)
41,304.01 41,304.01 41,304.01 41,304.01 41,304.01
EPS - Annualised
(Rs)
16.35 14.95 18.25 15.02 9.72










BANR, BAvANuERE
RATIO ANALYSIS
1. CURRENT RATIO CURRENT ASETS/CURRENT LIAILITIES





Theoretically, the standard oI current ratio is 2:1. ut in practice, it changes Irom industry to
industry. II the current ratio is more than 1:1, it means to say that the Iirm is in position oI meet
its short term obligations like creditors, bills payable, bank over draIt and the like. In VISL LTD,
the current ratio is 2.04 in FY 20010-11.
.
2. QUICK RATIO: QUICK ASSETS/CURRENT LIAILTIES

The actual quick ratio has to be compared with the standard quick ratio oI 1:1. II the
actual quick ratio is equal to or more than the standard ratio oI 1:1, the conclusion can be that the
concern is liquid and so that it can pay oII its short term liabilities out oI its quickly realizable
assets without any diIIiculty. ut, VISL LTD`s quick ratio is standard quick ratio oI 1:58. So, it
is possible to meet VISL LTD to the short-term obligation.

3. CASH RATIO:
An asset which converts suddenly into cash without risk is called as cash ratio. It is a pure
liquid asset. It means there is no much risk involved while converting those assets into cash, and
also taking very least time to convert that asset into cash So, those assets include cash in hand,
bank balance.
CURRENT RATIO CURENT ASSETS CURRENT
LIAILITIES
2.04 40,113.05 19,595.34
QUICK RATIO QUICK ASSETS CURRENT
LIAILTIES
1.58 31085.59 19,595.34

BANR, BAvANuERE 8
In VISL LTD, the cash balance is very least. In 2010-11 the cash balance is Rs 10.90
lakhs.


4. NET ORKING CAPITAL RATIOTOTAL CURRENT ASSETS/TOTAL
CURRENT LIAILITIES.

NET WORKING
CAPITAL RATIO
TOTAL CURRENT
ASSETS
TOTAL CURRENT
LIAILITIES.

2.54 49,827.95 19,595.34

Higher the ratio greater the ability oI the Iirm to meet its current obligations and vice-
versa. VISL LTD having 2.54 in 2010-11. II this ratio is more than 1 time we can say that the
Iirm is solvent.

5. DEBT-EQUITY RATIO LONG-TERM DET/SHAREHOLDER`SFUND

DET-EQUITY RATIO LONG-TERM DET SHAREHOLDER`SFUND
2.62 23040.85 28779.79

In present case, the debt-equity ratio is more than one in both the years. So we can say
that it is a lever Iirm. We can do more trading on equity. It is very beneIiciary to shareholder iI
the Iirm having more EIT. When the EIT is more and more over a period oI time, interest cost
cannot be change proportion to changes oI EIT. Interest is a Iixed cost. So, iI EIT is higher in
a particular period we cannot pay the higher interest. VISL LTD is under loss in 2010. So it
cannot be a beneIited one to shareholders.



BANR, BAvANuERE 9
6. INTEREST COVERAGE RATIO EIT/interest

RATIO EIT INTEREST
1.75 10,195.58 5819.01


7. Debtors Turnover ratio sales/ Average Accounts Receivable

Debtors Turnover
ratio
Sales Average Accounts
Receivable
11.61 40,595.90
3,493.90

It expresses the relationship between credit sales and debtors. It needs to be noted that
debtors should be taken beIore making any provision Ior doubtIul debts.
Significance: The liquidity position oI the Iirm depends upon the speed with which debtors are
realised. This ratio indicates the number oI times the receivables are turned over and converted
into cash in an accounting period.

8. Average collection period360days/ Debtors Turnover ratio

Average collection
period
Days Debtors Turnover ratio
31days 360 11.61

For every 31 days the debtors will paid the outstanding amount.






BANR, BAvANuERE
9. Creditors Turnover ratio Net Credit purchases/Average accounts payable

Creditors Turnover ratio Net Credit purchases Average accounts
payable
1.03 times 31380

30316

Creditors turnover ratio indicates the pattern oI payment oI accounts payable. As accounts
payable arise on account oI credit purchases, it expresses relationship between credit purchases
and accounts payable.
Significance: It reveals average payment period. Lower ratio means credit allowed by the
supplier is Ior a long period or it may reIlect delayed payment to suppliers which is not a very
good policy as it may aIIect the reputation oI the business.

10.Average payment period360days/Creditors Turnover ratio

Average payment period Days Creditors Turnover ratio
349 days

360

0.99


The Iirm will made payment 261 days aIter it buy the goods on credit. So the Iirm has
enough time to meet its obligation. So when a Iirm deaccelerate its disbursement the Iirm has
good receivables management.
11.Fixed asset turnover Net Sales/Net Fixed Assets






Fixe asset d turnover Net Sales Net Fixed Assets
1.97 40,595.90 20000

BANR, BAvANuERE
12.orking Capital Turnover Net Sales/Working Capital

Working Capital
Turnover
Net Sales Working Capital
1.97

40,595.90 20517

It reIlects relationship between employed in the business. Higher turnover means better
liquidity and proIitability.

Significance: High turnover, capital employed, working capital and Iixed assets
is a good sign and implies eIIicient utilisation oI resources. Utilisation oI capital employed or, Ior
that matter, any oI its components is revealed by the turnover ratios. Higher turnover reIlects
eIIicient utilisation resulting in higher liquidity and proIitability in the business.

13.Gross ProIit Ratio: GP/SALES*100

Gross ProIit Ratio Gross proIit Sales
0.15 6340.68 40595


Gross proIit ratio as a percentage oI sales is computed to have an idea about gross margin.
Significance: It indicates gross margin or mark-up on products sold. There is no standard norm
Ior its comparison. It also indicates the margin available to cover operating expenses, non-
operating expenses, etc. Change in gross proIit ratio may result Irom change in selling price or
cost oI sales or a combination oI both.





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14.Operating ratio: operating cost/sales*100

Operating ratio operating cost sales
22.97

9317

40595


It is computed to analyse cost oI operation in relation to sales. Operating expenses include
oIIice expenses, administrative expenses, selling expenses and distribution expenses.
Cost oI operation is determined by excluding non-operating incomes and expenses such as loss
on sale oI assets, interest paid, dividend received, loss by Iire, speculation gain and so on.

15. Operating Profit Ratio:100-0perating ratio

Operating ProIit Ratio 0perating ratio
77.03

100 22.97

It is calculated to reveal operating margin. It may be computed directly or as a
residual oI operating ratio.
Significance: Operating Ratio is computed to express cost oI operations excluding Iinancial
charges in relation to sales. A corollary oI it is Operating ProIit Ratio`. It helps to analyse the
perIormance oI business and throws light on the operational eIIiciency oI the business.

16.Net profit Ratio: net proIit/sales*100

Net proIit Ratio Net proIit Sales
0.15 6340 40595

Net ProIit Ratio is based on all inclusive concept oI proIit. It relates sales to net
proIit aIter operational as well as non-operational expenses and incomes.

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Significance: It is a measure oI net proIit margin in relation to sales. esides revealing
proIitability, it is the main variable in computation oI Return on investment. It reIlects the overall
eIIiciency oI the business.

17.Return on Investment (ROI) or Return on Capital Employed (ROCE)

Return on Investment ProIit beIore Interest and
Tax
Capital Employed
0.24 10195

41304


It explains the overall utilization oI Iunds by a business enterprise. Capital employed
means the long-term Iunds employed in the business and includes shareholders Iund, debentures
and long-term loans.
Significance: It measures return on capital employed in the business. It reveals the eIIiciency oI
the business in utilization oI Iunds entrusted to it by shareholders, debenture-holders and long-
term liabilities.

18.Return on Net orth (RON): proIit aIter tax/net worth*100

Return on Net Worth proIit aIter tax net worth
7.44 -666.42

8946


This ratio is very important Irom shareholders` point oI view in assessing whether
their investment in the Iirm generates a reasonable return or not. It should be higher than the
return on investment otherwise it would imply that company`s Iunds have not been employed
proIitably.


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19.EPS:PAT/No. oI shares outstanding

Earnings per share PAT No. oI shares outstanding
-6.50

-77.23



Earnings reIer to proIit available Ior equity shareholders which are worked out as ProIit
aIter Tax Dividend on PreIerence Shares.
This ratio is very important Irom equity shareholders point oI view and so also Ior the
share price in the stock market. This also helps comparison with other Iirm`s to ascertain its
reasonableness and capacity to pay dividend.

20.P/E Ratio: MPS/EPS

Price earnings ratio Market price oI a Share Earnings per Share
-1.5 5

-6.50

It reIlects investors expectation about the growth in the Iirm`s earnings and
reasonableness oI the market price oI its shares. P/E ratios vary Irom industry to industry and
company to company in the same industry depending upon investors perception oI their Iuture.


Cost Control Measures
Emphasis on cost reduction and productivity improvement continued during the year
through systematic application oI new technology, process improvement through R&D eIIorts
and strong awareness to control cost at all levels oI operation.
Continuous monitoring oI procurement oI high value items, maximising use oI in-house
engineering shops and optimisation in procurement including negotiations with suppliers Ior
price reduction.

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A saving oI ` 1082 crore was achieved during the year through cost control and revenue
maximization. Several strategic actions were taken to achieve cost control savings in major areas
oI operation viz. optimisation oI coal blend, higher yield, reduction in speciIic energy
consumption and coke rate, higher F productivity, higher CC production, low power
consumption and improvement in other techno-economic parameters.
Funds Management
During the year, the Company continued its thrust on better Iund management. The high cost
short term loans were replaced with low cost debts. Also, the Company earned interest oI ` 1772
crore through short-term deposits with scheduled banks. The Company continued to maintain its
virtual debt-Iree status with term deposits with anks oI ` 22023 crore against borrowings oI `
16511 crore as at the year-end. The total debt during the current year increased by ` 8948 crore
on account oI borrowings Ior capital expenditure. M/s FITCH and M/s CARE, RI approved
credit rating agencies, maintained "AAA" ratings indicating the highest saIety, to SAIL's long
term borrowing programme.
To ensure Iaster and timely payment to suppliers, contractors, employees, etc. e-payments were
increased substantially and it covered almost 80 oI total payment.
Contribution to SAIL Gratuity Trust
During the year, the Company contributed ` 850 crore to SAIL Gratuity Trust. The total
contribution made by the company as on 31.03.2010 was ` 3350 crore. The Iund size had grown
to ` 4037 crore as on 31.03.2010, including returns on investments made by the Trust.

Capital Investments
1.The Company had undertaken modernization and expansion plan to increase capacity oI
Hot Metal production Irom 13.82 MTPA to 23.46 MTPA progressively in the current
phase.
2.Orders Ior all major packages oI ISP and SSP, stand alone and other part packages oI SL,
SP, RSP & DSP were placed. These packages are under implementation. The
Iinalization oI orders Ior balance packages are in progress.
3.During FY 2009-10, capital expenditure oI ` 10,606 crore was made (` 5,233 crore in
previous year) which has been Iunded by a mix oI borrowings and internal accruals.

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ANALYSIS OF THE FINANCIAL PERFORMANCE OF THE COMPANY
Sales Turnover
Other Revenues
The total loans were increased by ` 8948 crore during the year, mainly on account oI additional
borrowings Ior meeting working capital requirements and capital expenditure.
*As at the end oI the respective Iinancial year.
The inventories decreased mainly on account oI reduction in semi/ Iinished inventory by ` 1157
crore and stores & spares inventory by ` 22 crore. However, there was increase in raw material
inventory by ` 46 crore.
The decrease in Iinished/semi-Iinished inventories by 20 was due to decrease in quantity and
valuation rate on account oI reduction in both cost oI production or Net Sales Realisation,
whichever applicable.
The stores & spares inventory was reduced by 1 and raw material inventory had increased
marginally by 2.
















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CHAPTER 8:SOT ANALYSIS
Strengths
Well-equipped chemical and metallurgical laboratories.
Producing 700 varieties oI alloy & special steels.
SatisIied and loyal customers.
Locational advantage with proximity to major markets
(South and West)
Known as quality supplier oI alloy and special steels.
Good rand Name / Image in the Market.
Advantage oI Stock Yards.
Reliable Quality.
Delivery with Short Lead Time.
Integrated steel making Iacilities oIIer prospects Ior
rownIield capacity additions, oIIering signiIicant
intrinsic advantage in lower incremental capital cost
related charges.
Weakness
Old technology in certain production shops.
High Overheads and Iixed costs.
Adverse age-mix oI workers and high average wage.
Higher Cost oI Production.
High Consumption oI Coke / High Coke Rate.
Old Machinery Frequent Troubles & Maintenance
down time.
Higher dependence on Auto & Private Sector.
Ageing Man Power and the average age oI the
employees around 50.
Lack oI Captive Mines.

Opportunity
Growing market Ior iron and steel.
Competitive environment calls Ior improvement and
increase in productivity.
Cutting costs by making use oI new technology.
Hardening oI Steel Prices & Increasing Demand.
Integrated ManuIacturing Facility.
Skilled Man Power & Established Process Standards.

Threats

Due to better technology competitors are able to oIIer
the same products at lesser prices.
Too many welIare activities lead to the increase in
expectations oI employees, which could at some point
oI time become a reason Ior dispute.
Entry oI New Players with Higher Automation.
Volatility in the prices oI raw Materials.



BANR, BAvANuERE 8

CHAPTER 9:FINDINGS & SUGGESTIONS

FINDINGS:
VISL has good reputation in the steel market having long experience oI around 6 decades in
the steel industry.
It has an easy access through major ports like Goa, Chennai, Mangalore & Mumbai.
VISL is a Iully integrated stainless steel plant.
VISL is Iar away Irom the main market as such it Iaces problems with the inIrastructure.
India`s only integrated private sector producer oI galvanized steel producer.
VISL is the only co. producing the special alloyed steel in India.
The main problem oI VISL is it does not have any captive mines.
eIore merging to SAIL, VISL had plants like, cement plant, bus building etc.

SUGGESTIONS:

It must provide good commission to the traders to increase sales.
Existing Employees have to be given training Ior handling their jobs in their new plant.
Training program is necessary to all the workers, to improve the quality oI production.
The company must give importance to sales promotion.
Dealers meeting should be held once in 3 months to solve the problem oI dealers and to
take their valuable suggestion.
It should develop customer sensitiveness, give incentives, reduce the cost.
It should also ensure that suppliers deliver at right time.
Traditional method oI operation is decreasing the productivity oI the employee. So
modernization oI the machines must be taken up.





BANR, BAvANuERE 9


CHAPTER 10: CONCLUSION

VISL produces special steels and it has gained a reputation Ior itselI in the industry by
ensuring quality steel production matching international standards. It was setup in
hadravati, Karnataka in 1918 to produce pig iron. The plant has been producing alloy and
special steels since the 1960. SAIL has invested over Rs.430 crores since it took over VISL
in 1989 and installed a new 530 cu.m. last Iurnace and numerous support Iacilities. Today,
the plant is able to produce over 700 varieties oI quality alloy and special steels.

In VISL all major decisions is taken by the board oI directors. They have Iull control over
the administration. They control the executive and general managers. These board oI directors are
selected by SAIL. ut the general manager oI VISL will have Iull control over the deputy
managers oI project , HRD, production and material departments.
These deputy managers will have Iull control over their respective area and they have
a right to take minor decisions in their respective areas.
Overall VISL has done a signiIicant achievements but Irom last one and halI years VISL has
incurred losses due to Iluctuation in steel prices.







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CHAPTER 11:BIBILOGRAPHY

VISL News A monthly news Magazine.

VISL Annual PerIormance Plan.

Personnel manual oI VISL

Insight A VISL magazine.


WESITES

www.sail.co.in

www.visl.co.in

Miso, Thomas J. A Nation oI Steel: The Making oI Modern America, 18651925.
altimore: Johns Hopkins University Press, 1995.
Sunil Mukhopadhyay. "VISL expects operating proIit in 2000-01". Online Edition oI The
Indian Express, dated 2000-05-03. Retrieved 2007-10-23.

"VISL on road to proIit, says Sahi". Online Edition oI The Deccan Herald, dated 2006-
01-23. Retrieved 2007-10-23.

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