VISL

CHAPTER 1:INDUSTRY PROFILE

Iron and steel, although closely related, is not the same thing. Iron begins as iron ore,

which is melted in a blast furnace and blown through with air. Then it is manipulated so

as to limit its content of carbon and other impurities. Steel is a particular kind of 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, for most of history

steel was harder to make than iron. That is why iron making was by far the bigger

industry in America until the late 19th century.

The first iron works in America, called Hammersmith, began operation in 1647 in

Saugus, Massachusetts, but lasted only five years. Subsequent iron making firms would

be small operations that tended to be located close to local ore supplies, water power, and

major transportation routes. Some of the most important iron making regions of 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 of these firms remained small because

of the high cost and low efficiency of available fuel to run their furnaces. When

Americans switched fuels from charcoal or wood to coal in the early nineteenth century,

larger operations became possible. The discovery of huge iron ore deposits in the

northern Great Lakes region during the 1840s gave a further boost to production.

The Expansion of Iron Production in the 19 th Century

The widespread adoption of puddling as a technique to make iron also contributed to

growth in production. In the early days of American ironmaking, craftsmen used a

method called fining to produce iron. This meant that the mixture of iron and slag

expelled from a blast furnace was separated out by hammering it. Puddling involved

adding iron oxide to the blast furnace charge because the chemical reaction made it easier

to separate impurities from the iron. Puddlers did the separating by stirring the melted

product with a long iron rod.

Bapuji Academy of Management and Research, Davangere1

The slag that rose was poured off 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 final product

(such as rails or rods) by other workers. Puddling required many judgment calls based on

experience. Therefore, it could take up to two years of training to become a skilled

puddler. Many puddlers in the mid-nineteenth century were successful enough to later

move into the ranks of owners.

Both fining and puddling were pioneered in Great Britain and adopted by American

producers in subsequent decades. As they gained more experience, American iron-

masters developed their own variations of these English techniques, depending on local

resources like the quality of their iron and the efficiency of their fuel. A means of

automating iron production was not developed until the 1930s.

In the nineteenth century, the American iron market produced a wide variety of products.

Stoves, gun parts, cannons, and machinery were among key early uses for iron. Iron also

played a crucial role in the development of railroads. Once again, the English pioneered

techniques for making high-quality iron rails. In fact, American railroads imported all

their rails from British mills until 1844. In 1857, John Fritz's Cambria Iron Works in

Johnstown, Pennsylvania, created a technique to automate partially the production of iron

rails. The resulting increase in productivity made the railroad boom of 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 fortunes in the last fiscal. The demand

as well as international prices of steel and also those of raw materials reached a historic

high during first half of 2008, followed by sharp dip in the steel prices in October 2008

onwards, as demand shrunk under the impact of global slow down.


Fall in market prices and the demand was steep & sudden affecting adversely the steel

producers across the globe who had to cope with the following output prices, declining

demand & high input prices , putting a great strain on their margins. This led to many

steel majors , globally , to effect major cuts in production in order to align themselves

with market demand and control rising inventory. The impact can be gauged by the fact

that while the global steel output increased by 2.5% in the first half of the calendar year

2010 it fell by as much as 9.5% in the second half & by more than 20% in the first half of

2011.

Steel Manufacturing: Henry Bessemer and Andrew Carnegie

Before the Civil War, American manufacturers made only small quantities of steel.

Because they were unable to master the demanding requirements to create steel through

puddling, imports from England's Sheffield mills dominated the American market. That

all changed with the application of the Bessemer process. Henry Bessemer was a British

inventor who created a way to refine iron into steel using air alone in 1855. His machine,

the Bessemer converter, blew air over molten iron from a blast furnace so as to remove

impurities and create a substance of a uniform consistency. The American engineer

Alexander Holley brought Bessemer technology to America in 1864, but did not perfect

the Bessemer design until he created his first plant from the ground up as opposed to

adapting an existing facility. This was the Edgar Thomson Works in Braddock,

Pennsylvania. The mill, which opened in 1875, was the model for all subsequent

Bessemer facilities.

Holley built the Edgar Thomson Works for Andrew Carnegie, who used it mostly to

produce steel rails for the Pennsylvania Railroad. Carnegie's first experience in industry

came when he invested in the iron business during the 1860s. His genius was to

champion technological innovations like the Bessemer converter and the Jones mixer,

which sped the delivery of iron from the blast furnace to the converter, in order to cut

production costs and undersell his competitors.


Carnegie also had a genius for picking good associates. For example, William R. Jones,

the inventor of the Jones mixer, served as superintendent of the Edgar Thomson Works

and was just one of many men who shared in Carnegie's business success.

Another Charles Schwab, would go on to form Bethlehem Steel in 1904.Carnegie's

devotion to vertical integration also contributed to his success. His firm eventually

controlled supplies of everything needed to make steel: iron ore and coal deposits;

railroads to transport everything; and marketing networks for the finished product. By the

1890s, Carnegie Steel made more steel than the entire country of Great Britain. In 1900,

its annual profit was $40 million.

Between 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 for this was

increased steel production. Accelerated by the innovations in Carnegie's mills, Bessemer

steelmaking allowed firms to make thousands of more tons of metal per year than when

iron had dominated the market. And because the Bessemer method required less skill

than ironmaking, labor costs dropped too. As steel prices dropped dramatically,

consumers increasingly chose the cheaper, harder, more durable metal.

As this trend accelerated, puddlers began to find that their skills were no longer needed.

Steelmakers came to depend on immigrant labor, particularly workers from southern and

eastern Europe. In the Homestead lockout of 1892, the only major union in the iron and

steel industry, the Amalgamated Association of Iron and Steel Workers, made one last

violent stand to prevent managers from driving the union out of the industry at Carnegie

Steel's Homestead Works. Its effort failed. From 1892 to 1937, American steelmakers

operated in an almost entirely union-free environment.

The U.S. Steel Corporation

As in other industries, many steel producers joined forces at the beginning of the

twentieth century. However, the effect of the great merger movement in the American

steel industry is particularly noteworthy.


The United States Steel Corporation formed in 1901 when a group of firms 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 from the deal made him the richest man in the

world.

U.S. Steel was the first business in history to be valued by the stock market at over one

billion dollars ($1.4 billion, to be exact). This figure represented one sixty-seventh of the

total wealth of the United States at that time. U.S. Steel controlled 72 percent of

Bessemer steel production in the United States and 60 percent of the market in open

hearth steel, a new steelmaking process that made steel in a furnace which achieved high

heat by recycling exhaust gases. U.S. Steel's ten divisions reflected the diversity of steel

products made at that time, including steel wire, steel pipe, structural steel (for bridges,

buildings, and ships), sheet steel (which would go largely for automobile bodies in

subsequent decades), and tin plate (once used for roofing 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 of the largest monopolies in an age of monopolies, U.S. Steel

deliberately let its market share decline over the first few decades of its existence to avoid

dissolution through antitrust prosecution by the federal government. Even though the

Justice Department filed suit against U.S. Steel in 1911, this policy helped it survive

when the Supreme Court resolved the case in 1920. U.S. Steel's largest competitors took

advantage of the policy and the opportunities afforded them by World War I to grow at

U.S. Steel's expense. Bethlehem Steel, for example, grew big during the war by selling

armaments to Europe and ships to the U.S. Navy. Nevertheless, other firms took their

cues from U.S. Steel for everything from product prices to wages and labor policy. The

American Iron and Steel Institute, the industry trade organization formed in 1911 and led

by U.S. Steel chairman Elbert Gary, helped spread many of U.S. Steel's policies and

practices.


An important effect of the corporation's dominance was its imposition of the Pittsburgh

Plus pricing system upon the entire industry. This system dictated that all steel prices be

based upon the costs of production and transportation from 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 firmly 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 fought to keep the Pittsburgh Plus system in place in a modified form 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 of organized labor to their industry. Managers fought off national organizing

campaigns in 1901, 1919, and 1933 through a combination of the carrot and the stick.

They used hard-nosed tactics like spies, blacklists, and the fomenting of racial strife

along with softer policies like safety improvements and employee stock ownership plans.

However, when the Committee on Industrial Organization (later the Congress of

Industrial Organizations, or CIO) started the Steelworkers Organizing Committee

(SWOC) in 1936, it used the impetus of the National Labor Relations Act (1935) to gain

a foothold in U.S. Steel. Rather than risk a costly strike at a time when production was

just beginning to recover from the Depression, U.S. Steel recognized the SWOC without

a strike in March 1937.

Although many other steel producers followed the steel corporation's lead, its largest

competitors did not. Firms like Bethlehem Steel, Youngstown Sheet and Tube, and

Republic Steel were part of 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 firms started the Little Steel

Strike of 1937.


Despite violence, particularly the so-called Memorial Day Massacre in Chicago, the

Little Steel firms won the strike relatively easily. However, government pressure during

World War II to keep production moving forced each of these firms to recognize the

SWOC's successor organization, the United Steel Workers of America (USWA), over the

course of that conflict.

World War II and Postwar Decline

During World War II, industry production increased sharply because of steel's

importance to war mobilization. Some of this increase was a result of production

returning to full capacity after the depression, but new plants also came on line. For

example, the government loaned the shipbuilder Henry J. Kaiser enough money to build

the first 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 from the

federal government to expand its production capacity during the war, particularly around

Pittsburgh. By 1947, the United States controlled 60 percent of the world's steelmaking

potential.

When the war ended, steelmakers wanted to roll back union gains that the administration

of Franklin D. Roosevelt had forced the industry to accept, but the USWA had grown too

big to destroy. Between 1946 and 1959, the USWA struck five times in an effort to win

higher wages and more control over workplace conditions for its members. Each of 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

of these disputes, America's steelworkers were among the highest paid manufacturing

employees in the country. The cost of these wage gains contributed to the collapse of the

industry in subsequent decades.Foreign competition also contributed to the industry's

decline. Countries like Japan and Germany first became major players in the international

steel market during the 1960s.


Later on, countries like Brazil and South Korea would break into the American market to

the detriment of domestic producers. Although friends of the American steel industry

would often complain of unfair competition from abroad, foreign producers' use of new

technology and the failure of American steelmakers to innovate also explain these

developments. For example, two Austrian firms developed the Basic Oxygen Furnace

(BOF) in 1952. This process, which used pure oxygen as the only fuel in the furnace, was

much more efficient than the then-traditional open hearth method. No major American

steelmaker adopted this technology until 1957. U.S. Steel, still the largest firm in the

industry, did not commission its first BOF unit until 1964. Close proximity to cheaper

raw materials was another advantage that foreign steel producers had over their American

counterparts.

The collapse of the steel industry began in the late 1960s and has only grown worse since

then. Old-line firms 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 of much of

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

of these workers experienced significant psychological distress as they went from having

high-paying jobs to joining the ranks of the long-term unemployed. Alcohol and drug

abuse, depression, and suicide all increased dramatically as deindustrialization

progressed.

The only sector of the American steel industry to expand since the 1960s has been the

mini-mills. These facilities use large electric furnaces to melt scrap steel and reshape it

rather than making new steel from scratch. Among the advantages that mini-mills have

over traditional facilities are lower start-up costs, greater freedom of location, and more

flexible job organization.


Because these facilities tend to be built in rural areas and because workers need fewer

skills than those at larger mills, mini-mills tend to be nonunion. The Nucor Corporation

of North Carolina, which operates in ten states (mostly in the South), has had great

success filling 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. Because of 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 of Lake Victoria in Tanzania made medium-

carbon steel in preheated, forced-draft furnaces 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 furnace in the 19th century to make high grade steel.

The Haya made their own steel until the middle of the middle 20th century when they

found it was easier to make money from raising cash crops like coffee and buy steel tools

from the Europeans than it was to make their own.

The discovery was made by anthropologist Peter Schmidt and metallurgy professor

Donald Avery, both of Brown University. Very few of the Haya remember how to make

steel but the two scholars were able to locate one man who made a traditional ten-foot-

high cone shaped furnace from 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 of the charcoal-fueled

furnace pumped in enough oxygen to achieve temperatures high enough to make carbon

steel (3275 degrees F).

While doing excavations on the western shore of Lake Victoria Avery found 13

furnaces nearly identical to the one described above. Using radio carbon dating he was

astonished to find that the charcoal in the furnaces was between 1,550 and 2,000 years

old.


Steelmaking was invented in Europe around 1860, when it was discovered that a blast

of air through molten pig iron removed impurities such as sulfur that made the metal

brittle. Later it was discovered that adding an iron alloy containing manganese and

limestone removed the remaining impurities—oxygen, phosphorus and leftover sulfur—

producing steel.Other developments such high carbon steel, adding chromium alloys,

blast furnaces made steel stronger.

From time to time white hot liquid iron and melted impurities are drawn off. Some of

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

off.

Molten iron is drained off in a process called tapping and then poured into molds to

produce pig iron, which is cooled with jets of water. The name pig iron dates to the 1700s

when molds received molten iron from a runner that look like a suckling pig.

Blast furnaces are kept on all the time-24 hours a day, seven days a week, 365 days a

year—expect for regular inspections or equipment renovation, When it shut down the

meted iron turns solid and it is very difficult 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 of routes of production, the Indian steel industry can

be divided into two types of 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 of India Limited (SAIL), Tata Iron and Steel Company

Limited (TISCO) and RashtriyaIspat 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 of the two. Essar Steel, Ispat Industries and Lloyds steel are the largest

producers of steel through the secondary route.

1.4 Production Scenario

India's steel production during 2009-10 was 64.88 million tonne (MT), up 11% from a

year ago. India has emerged as the fifth largest producer of steel in the world and is likely

to become the second largest producer of crude steel by 2015-16.

Considering a steel consumption of 300 kg per man per year to be a fair level of

economic development, India will have to come up to somewhere around 300 million

tonnes, if it is to fulfill its ambitions of being a developed country. That of course is a

long journey from the present production level of around 50 million tonnes but one must

consider its past before coming to a conclusion about its potential. India was producing

only around a million tonnes of steel at the time of its independence in 1947. By 1991,

when the economy was opened up steel production grew to around 14 million tonnes.

Thereafter, 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 of industry. Cross-border

mergers have been taking place for several years. The focus is on technological

improvements and new products.

Higher production of value-added products, capacity expansion, upgradation of

production process achieveing cost effective production in an environment friendly

manner, have been the major thrust areas of the Indian Iron and steel producers in the

recent times. After liberalization, there have been no shortages of iron and steel materials

in the country.

SAIL –STEEL AUTHORITY OF INDIA LIMITED

The Precursor

SAIL traces its origin to the formative years of an emerging nation - India. After

independence the builders of modern India worked with a vision - to lay the infrastructure


for rapid industrialization of 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 Bhilai and Durgapur Steel Plants, the preliminary work was done by

the Iron and Steel Ministry. From April 1957, the supervision and control of these two

steel plants were also transferred to Hindustan Steel. The registered office was originally

in New Delhi. It moved to Calcutta in July 1956, and ultimately to Ranchi in December

1959.The 1 MT phases of Bhilai and Rourkela Steel Plants were completed by the end of

December 1961. The 1 MT phase of Durgapur Steel Plant was completed in January

1962 after commissioning of the Wheel and Axle plant. The crude steel production of

HSL went up from .158 MT (1959-60) to 1.6 MT. A new steel company, Bokaro Steel

Limited, was incorporated in January 1964 to construct and operate the steel plant at

Bokaro. The second phase of Bhilai Steel Plant was completed in September 1967 after

commissioning of the Wire Rod Mill. The last unit of the 1.8 MT phase of Rourkela - the

Tandem Mill - was commissioned in February 1968, and the 1.6 MT stage of Durgapur

Steel Plant was completed in August 1969 after commissioning of the Furnace in SMS.

Thus, with the completion of the 2.5 MT stage at Bhilai, 1.8 MT at Rourkela and 1.6 MT

at Durgapur, the total crude steel production capacity of HSL was raised to 3.7 MT in

1968-69 and subsequently to 4MT in 1972-73.

Holding Company:

The Ministry of Steel and Mines drafted a policy statement to evolve a new model for

managing industry. The policy statement was presented to the Parliament on December 2,

1972. On this basis the concept of creating a holding company to manage inputs and

outputs under one umbrella was mooted. This led to the formation of Steel Authority of

India Ltd.


The company, incorporated on January 24, 1973 with an authorized capital of Rs. 2000

crore, was made responsible for managing five integrated steel plants at Bhilai, Bokaro,

Durgapur, Rourkela and Burnpur, 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 infrastructure for the industrial development of the

country. Besides, it has immensely contributed to the development of technical and

managerial expertise. It has triggered the secondary and tertiary waves of economic

growth by continuously providing the inputs for the consuming industry.

Major Units

Integrated Steel Plants

1. Bhilai Steel Plant (BSP) in Chhattisgarh

2. Durgapur Steel Plant (DSP) in West Bengal

3. Rourkela Steel Plant (RSP) in Orissa

4. Bokaro Steel Plant (BSL) in Jharkhand

5. IISCO Steel Plant (ISP) in West Bengal

Special Steel Plants

• Alloy Steels Plants (ASP) in West Bengal

• Salem Steel Plant (SSP) in Tamil Nadu

• Visvesvaraya Iron and Steel Plant (VISL) in

Karnataka

Subsidiary

• Maharashtra Elektrosmelt Limited (MEL) in

Maharashtra


Joint Ventures

• NTPC SAIL Power Company Pvt. Limited (NSPCL):A 50:50 joint venture between Steel

Authority of India Ltd (SAIL) and National Thermal Power Corporation Ltd (NTPC Ltd);

manages SAIL’s captive power plants at Rourkela, Durgapur and Bhilai with a combined

capacity of 814 megawatts (MW).

• Bokaro Power Supply Company Pvt. Limited (BPSCL):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 facilities

atBokaro 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 & conferences, coal sales & logistics, publications, etc.

• SCI Shipping Pvt. Limited: A 50:50 joint venture with Shipping Corporation of India for

provision of various shipping and related services to SAIL for importing of coking coal and

other bulk materials and other shipping-related business.


CHAPTER 2: COMPANY PROFILE

Visvesvaraya Iron & Steel Plant, the latent addition to the stable of Steel Authority of

India Limitedis located at Bhadravathi,260 kilometers north-west of Bangalore in the

state of Karnataka. The Plant & Township are nestled by the river Bhadra on three sides.

The Plant covers an area of about 3.8 square kilometers and 2677 persons as on

1.10.2006.The Steel Town covers an area of 4.5 square kilometers.

The vision and foresight of late Sir .M Visvesvaraya, the then Dewan of Mysore,

resulted in the setting up of “Mysore Wood Distillation & Iron Works “in 1918. It

became a limited company in 1962. As a tribute to its illustrious founder, the company

was renamed “Visvesvaraya Iron & Steel Limited”(VISL) on February 16,1976.An

Engineer statesman par excellence, he perceived Bhadravathi as an ideal location for the

plant amidst the forests of Shimoga.

Starting as a Wood Distillation Plant in 1918, the Mysore Iron Works commenced Pig

Iron production in a charcoal Blast Furnace in 1923 to produce 60 tons of pig iron per

day. A pipe plant was installed in 1927 to make profitable use of pig iron thus produced.

Mild steel production was started in 1936 and in the same year the name of the company

was changed to Mysore Iron & Steel Works. Production of Ferro-Alloys began in 1942

with the addition of two small furnaces and the production capacity was augmented

subsequently in 1962.

Mild steel production capacity was also expanded in 1965 with the addition of two LD

converters, one Electric Arc Furnace and a Blooming and Heavy Section Mill. The plant

was expanded further and diversified into the field of Alloy and Special Steel production

in 1965 with the addition of Electric Arc Furnace, Combined Bar 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 of alloy and special steels went up to

77,000 tons per year.

VISL PLANT VIEW


VISL has carved a niche for itself in the field of alloy and special steels in the country.

It takes care of requirements of strategic sectors like Defense, 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 of the day and has always remained in the forefront as quality steel

producer in the country.

As a long-term strategy VISL installed one 530Cu.M Blast Furnace in 1995 to produce

hot metal of right quality so as to take the full advantage of BF-BOF-LRF-VD route in

the production of Alloy and Special Steel.

VISION:

1. To be a respected world class corporation and the leader in Indian steel business in

quality, productivity and profitability, customer satisfaction.

2. To achieve an international competitiveness through satisfaction of customer needs

by continuous improvement in the quality, cost and dispatch.

“Vision is the key for achieving

A goal of success”


MISSION OF VISL:

1. First mission of VISL plant is too achieving “safety”. Because if the employees

are safe their working chemistry is high at the top. So automatically it leads to

profit. So safety is the first step for achieving the satisfaction.

2. The principle product of VISL is to produce high grade alloy and special steels for

the strategic sector, to sustain this status, short and long term modernizing

proposals are in various stages of consideration & implementation, the customer

expect cheap and sustainable steel.

3. The next mission of VISL is committed to environment friendly, there is a special

environment department in VISL to achieve “environmentally green”

concept.VISL steel plant recognizes that the process of competences building

people involvement unleashing and leveraging the creative energies of our people.

4. Achieve international competitiveness by economically viable source of alloy and

special steel to meet the growing needs of the country. Steady profitable business

organization to protect the Interest of stakeholder. Building a strong and

confidence team for achieving a business activity over social responsibility.

QUALITY POLICY:

We shall build and sustain a world-class organization, where quality is the hallmark of

every process and activity.

With the involvement and dedication of our human resource, we are committed to

achieve satisfaction of all our stakeholders, through innovation and continual

improvement.

We are committed to achieving total customer satisfaction by:

Providing products and services that meet or exceed customer expectations

Continual improvement to our quality management and processes

Fostering the professional development of our employee

ISO 9000 standards are complimentary to TQP. Implemented together on a

continuous basis they can lead to the ultimate goal of zero defect.


VISL as obtained certification to ISO 9002- 1994 standards for production of alloy

and special steels through forged route in 1995 and for rolled route and pig iron in

1997.

VISL has upgraded the QMS to ISO- 9001: 2000 in FEB 2005

Area of the plant:

1.47 square miles or 3.8 square kilometers. Area of operation carried out is

National & International. It is a public sector, looked after by the Central Government.


MILESTONES:

1918- construction work started for setting up a Wood Distillation plant of 200 tonnes per

day and one charcoal based blast furnace of 60 tonnes per day.

1927-Pipe Foundry commissioned

1938-Cement plant commissioned

1943-Open health ‘B’ Furnace commissioned

1955- Second 100 T per day capacity electric iron furnace started

1967- Second 20 T electric arc furnace started

1970- combined bar and rod mill started

1985-CCM commission

1994- Conversion of 8T EAF to LRF 2

1997-certified to ISO 9002 for 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 of II 20 T EAF to LRF 4

2007-Certification VISL for QMS ISO-TS 16949-2002 by M/s TUV Germany

2008-D.G.set 2.1 MuA capacity was commissioned.

2009-Bloom Caster was commissioned

2010-Development of B.G Axle forging for RWF , Bangalore.

SOURCE

VISL News – A monthly news Magazine.

VISL Annual Performance Plan.

Personnel manual of VISL

Insight – A VISL magazine.


MAJOR COMPETITORS

ISSAL,Pune

Sunflag, Nagpur

KalyaniSteels,Hospet

Mukund , Mumbai

SISCOL, Salem

Jindal, Bellary

TISCO , Jamshedpur

FACOR , Nagpur

RINL ,Vizag

Starwire, Faridabad

MUSCO, Mumbai

SOURCE





EMERGING COMPETITORS

RINL, Vizag

SISCOL, Salem

Vardhaman, Punjab

Adhunik, Orissa

Bhushan steels, Haryana

JSPL Raighad

SOURCE






FUTURE GROWTH AND PROSPECTUS

Future Growth of VISL, the SAIL has designed the corporate plan for 2011-2012

as a long term plan, is as follows:-

SAIL investing 2000 crores for 3 special steel plants including VISL, for the

modernization. SAIL planning to increase in the production of saleable steel up to 0.993

MNT by 2011-2012. VISL was given final nod for setting up a cryogenic air separation

unit on build-own-operate basis.VISL is a special plant of SAIL. It is a large scale public

limited industry. Present Status of IndustryThe 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 of reform. An

apparentconsumption of finished steed has increased from 15MT in 1991-92 to around

23MT in 1996-97.The domestic steel sector has been able to withstand competition from

important produces, despitea steep reduction in custom duty. A number of fresh

capacities are likely to be commissioned in thecoming years.

Future Prospects of Industry

According to government estimates, India’s per capita consumption of steel is expected

frompresent 55-60 kgs to 100 kgs by 2010. By 2012, the consumption of steel in India is

expected toreach around 55-60 MT, nearly double the current level.

The SAIL is planning to increase hot metalproduction from its plant to a level of about 20

MT per annum 2012 against the current level of 13MT. For crude steel production, SAIL

is planned to reach a level of 18.7 MT by 2012 from the current level of 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 of customer service

Nature of the Business Carried :

VISL today is one of the premier of high quality alloys and special steel producer in the

countrystarting with basic raw materials such as Iron ore, Lime stone, etc. VISL Steel is

mostlyused by Railways and Defence sectors besides different heavy.Industriesincluding

Steel plants.

Some of its very specialized steel is also used for ourAtomic plants and reactors.

Steel is produced through BF-BOF-LRF-VD route. The facilities include ladle refining

furnaces, vacuum degassing, Continuous casting machine and 1600 Tones-hydraulic high

speed forging press, a fully automatic horizontal long forging machine with

ProgrammableLogic Controller (PLC) numerical control system for a semi-automatic and

automatic mode ofoperation.

The capacity of the plant has been increased to 1,25,000 tonnes of liquid steeland 70,000

tonnes of pig iron with the addition of a 530Cu M Blast Furnace build indigenously

through in house effort of steel. The first indigenous Blast Furnace, “CAUVERY” was

commissioned on 24th Feb 1995.


WORK FLOW DIAGRAM


Blast furnace

Mixer

Basic Oxygen Furnace

Pig Casting Machine Cast Iron Foundry

Laddle Refining Furnace

VD/VOD

Continuous Casting

Up-Hill Teeming

Rolling at primary Mill

Forging at forge plant Disposition

Disposition

Heat Treatment

Inspection Straightening

Processing at Vendor

InspectionDispatch

Metallurgical Test

Inspection

Bar Mill

Ignots

CHAPTER 3: THE 7S MC KINSEY MODEL

The three s across the top of 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 of the company through introduction of 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 of various systems has been another strategy

adopted by the company to streamline its operations. Very good selection & development


systems adopted coupled with several employee welfare measures has been a notable

strategy adopted by the company for attracting & returning the talent.

STRUCTURE: ORGANIZATION STRUCTURE OF VISL

Govt. licensing Civil

Internal auditing Waste handling

House keeping

Iron Ore sorting

Safety


Executive Director(1)

General Manager(1)

ProjectsManagr

(1)

AccountManagr

(1)

HR & AdminManager

(1)

Materials D.G.M

(1)

Production, Planning &Plant maintenanceManager

(1)

H.R

Salaries & IncentivesIncentives

Recruitment

Training

ADMIN

Admin H.O.(1)

Admin Plant(1)

Raw material & Finished productMovement (1)

StoresDept (1)

Purchase Dept (1)

Vehicle Maintenance

(1)

Lab testingH.O.D.

(1)

Processing H.O.D

(1)

Mechanical H.O.D (1)

Electrical &Instrumentation H.O.D (1)

AdministrationPlant Dept H.O.D (1)

BOARD OF DIRECTORS(4)

Canteen

Security

The above organization structure shows the following points.

1) Hierarchy relationship between different department members.

2) Participative management.

3) Cooperative work culture.

4) Standardized of polices.

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

Valuable & economical decisions are taken by top level management only. So it is

centralized decision making.

In visl all major decisions will be taken from board of directors they have full

control over the administration they will control the executive and general

managers these board of directors are selected by SAIL.

But the general manager of visp will have full control over the deputy managers

of project , HRD, production and material departments.

These deputy managers will have full control over their respective area and they

have a right to take minor decisions regarding over their respective area.


Structure is the organizational chart and associated information that shows who report to

whom and how task are both divided up and integrated. In other words structure describe

the hierarchy of authority and accountability in an organization, the way the

organizations units relate to each other :centralized, functional, division ( Top-Down) ;

decentralized ( The trend in larger organizations) ; matrix, networks, holding ,etc,. These

relationship are frequently diagrammed in organizational charts. Most organization use

some mix of structures- pyramidal, matrix or networked ones- to accomplished their

goals strategy.

SYSTEMS:

Systems define the flow of activities involved in the daily operation of

business, including its core processes and its support systems. They refer 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:

1. Business process management system

2. Management information system

3. Innovation system

4. Performance management system

5. Financial system/ Capital allocation system

6. Compensation system/ Reward system

7. Customer satisfaction monitoring system..,etc,

The 4Ss across the bottom of the model are less tangible, more cultural in nature, and

were termed “soft Ss” by McKinsey these are shared values:


SKILLS

The company is capable of accepting & producing any type of the product &

executes it well before schedule & to the expectation of the customers. The company is

able to manufacture over 700 grades of alloy & special steels to meet the specific

requirement of individual customers.

The steps taken to improve necessary skills of the employee

1) On the job training

7 days training for transferred employees

1 year probationary period for newly recruited employee

Induction training to promoted employee from non-executive level to

executive level

6 months probationary period for all the executives who are promoted

2) Off the job training

Lecture

Group discussions, case studies

Management games

Developing presentation skill

Conference

External training

Specific need base training etc


STYLE

As VISL is a unit a unit of SAIL, VISL follows three types of styles. Those are as

follows.

Top down approach

Bottom up approach

Recruitment process approach

In top down approach the corporate office plans activities & sent it to the every

units. Because to know whether it is suitable or not & with construction decision are

taken.

In the bottom up approach all the units of SAIL plans the activities or

recommended certain policies for their convenient & send to the corporate office for

their convenient & send to the corporate office for approval, thus decisions are made. In

this approach the corporate offices only takes certain decisions without consulting the

units.

In recruitment process the decisions regarding the recruitment of execution are

made by the decisions are made by the units itself according to their corporate office

without consulting its units. But in case of recruitment of non-executives, the decision are

made by the units itself according to their requirement & then sent for the approval of

corporate office.

STAFF

The people in the organization are very dedicated & work towards the

improvement of the organization. The skill levels of the workers are work oriented &

they are specialized in their respective field of work.

Most of the workers are well experienced & well trained.

The staffs are graded from S1 to S11 for non-executives & E1 to E9 for the

executives. The qualification for the non-executive employees are SSLC, ITI & for the

non-executives Diploma & any degree or higher.


There is totally around 2300 staff members are the members also there. Their

average age is 51-52. The duties & responsibilities of staff differs from department to

department like production department to other department.

SHARED VALUES

With a vision of being a world class, innovative & profitable alloy & special steel

plant it has used all the available resources .The companyhas common goal to all its

concerns & shares the information available in every concern.

The VISL has implemented the following main objectives.

It has been able to build the lasting relationship with customers based on trust &

mutual benefit.

It has been able to uphold highest ethical standards in conduct of business

It has been able to create & nurture a culture that supports ,flexibility learning &

its proactive to change.

It also charted a challenging career for the employees with opportunities for the

advancement & rewards.

It values opportunity & responsibility to make a meaningful difference in

people’s levels.

Hard elements are easier to define or identify and management can directly

influence them: These are strategy statements; organization charts and reporting lines;

and formal processes and IT systems.

Soft elements, on the other hand, can be more difficult to describe, and are less

tangible and more influenced by culture. However these soft elements are as important as

the hard elements if the organization is going to be successful.

The way the model is presented in figure above depicts the interdependency of the

elements and indicates how a change in one affects all the others.


CHAPTER 4:DEPARTMENTAL STUDY

HUMAN RESOURCE DEPARTMENT

Human Resources Development (HRD) in VISL is not merely limited to training of the

employees but is aimed at overall development of employees in all fields. 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 of 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 of team work and creativity has been encouraged through the Suggestion

Award Scheme “SURABHI”, Special Award Scheme and Quality circles. The creative

talent of our employees has been harnessed for improvement of various operational and

maintenance practices. It is no mean feat that a small plant like VISL has bagged Prime

Minister’s Award as well as Vishwa Karma Award for 14 employees. VISL team has

won second place in the second place in the grand final of the Mega Steel Quiz

“CRUCIBLE 2005” held at the Bhilai in September.


DSM- PERS & HRD

AGM (HRD)

1 Senior Administrative Assistants

Large number of employees are communicated about the tasks, targets and performances

of the company in a periodic communication exercise conducted by ourChief Executive.

Employees suggestions during these meetings to achieve task and targets are followed up

and implemented by a high power committee.

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 Sqkms area. It has been providing

infrastructural facilities like,

Accommodation for employees at lower rates.

One Guest House

One club

VISL Town Administration office

VISL Hospital

VISL Silver Jubilee Stadium.

VISL Platinum Jubilee Stage

Ispat club for executives

Gents club for both executives and non executives

Officers association

Workers association

8 Education Institutions

2 Parks and cultural Exhibition.


HRD KENDRA

HRD concentrates on developing people through training with the objective of

changes in knowledge, skills and attitudes, resulting in changes in job performance and

ultimately changes in organizational effectiveness. Emphasis is given to need based

training with the active guidance from the corporate office, SAIL and MTI, Ranchi.

HUMAN RESOURCE DEVELOPMENT

Resource is any means of supply which cabe 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 of resourcefulness,

initiative wittedness, cleverness talent and ability.

Human Resource Development is considered to be a super speciality of HRM. It is a

process by which the employees of an organization are helped in planned and continuous

manner to acquire new capabilities and sharpen existing capabilities, that may be required

to perform their present functions or expected future voles.

HRD is a process which is geared towards developing the general enabling capabilities of

employees as individuals so that they can discover and exploit their own inner potential

for their own and / or organization development purposes. HRD strives to develop an

organizational culture where superior subordinate relationships, team different sub units

are strong and contribute to the organizational health, dynamisms and pride of employees.


Training programs are as follows :

FRESH ENTRANTS

Induction and orientation

COMPETENCE ENHANCEMENT

Technical

Multi skill training

Managerial

SPECIFIC AREA

Safety

Environment

Cost control and deduction

Quality

EXTERNAL TRAINING

OTHER AREAS

Hindi training

GOALS OF HRD:

Development of individual capacity

Development of competitive in relations job being performed

Development of corporate approach

Development interpersonal relationship

Development of overall organization culture

Role of HRD:

Human resources planning

Human resources accounting

Human resources allocation and role planning

Human resources training and development

Human resources maintenance


Activities of HRD

Training need identification

1) Training need assessment

2) Training need justification

3) Budgeting and controlling of cost

4) Selection of learning process

5) Planning, designing, conducting the training procedure

6) Evolution of program through, the trainee and feed back records

Training Objectives: -

1. To help the trainee

2. To improve knowledge, skill, attitude & performance.

3. To develop competence to increase productivity.

4. To prepare for greater responsibility.

5. To improve interpersonal relationship.

6. To equip with modern tools & techniques of to harness best of the human

resources and maintains industrial harmony.

7. Modern how to develop self and his subordinates.

Human Resource rely’s on the 4 M’s

Money

Material

Manpower

Machine


RECRUITMENT/SELECTION/INDUCTION METHODS

Recruitment for executives is carried out by the Corporate office at Kolkatta.The

grades from E1 cadre to E6 cadre. In order to fulfill the requirements and to meet

their expectation. Non-executives are recruited by the top level managers based

on the experience, skills, abilities.

Induction methods carries initial show of the work culture given for the freshers&

executives who are transferred. It carries a training of a week.

Selection is done through interviews , written tests & group discussions.

Promotion & transfer are of 3 types carried out in VISL

Within executive cadre

Within non executive cadre

Non executive to executive cadre

There are 2 types of interview carried out in VISL

Direct (Personnel ) interview

Exit interview

Performance appraisal

For the executives it is self-appraisal , here the HOD gives the task to the

executives and the executives need to complete the task and need to rate

himself. This would be referred by the reporting officer. The appraisal is done

online through electronic appraisal system.

For the non executives it is done by the shift managers. The shift managers

will provide the task to the non executives and the appraisal will be rated by

the reporting officer according to their performance, attendance, discipline etc.

There is performance related pay and bonus.There are awards provided by

Steel executive federation and National joint committee for steel industry.

Motivation

Instant award scheme this award will be recommended by the HOD to the

team or to the individual.


1. On 26th January Jawahar award for executives

2. Nehru award for non executives

3. Long service award

4. Employee suggestions for this the best one will be awarded

5. They have a system called HRIS where the employee can see his

position in his respective department through intranet.

6. Schemes

7. Employee family benefit scheme

8. PF & Gratuity

PRODUCTION & PURCHASE DEPARTMENT

Process of functioning of purchase department

Purchase indent by consuming party

↓

Purchase enquiry

↓

Floating

↓

Finalizing the offers

↓

Placing the purchase order

↓

Procurement of materials

↓

Inspection of 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 of

iron and oxygen. The major iron oxide ores are hematite, which is the most plentiful,

limonite, also called brown ore, taconite, and magnetite, a black ore. Magnetite is named

or its magnetic property and has the highest iron content. But 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

from defence units, railways and steel units.

Forged Alloy & Steels

Some rare companies will produce like these forged and alloy steels in that

visl is one of them. These type of alloy and steels will have the greater demand in defence

units, railways, engineering industries.


Concast Blooms.

This is made by the special treatment in which it will have the greater

demand from 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 from special alloys and they have a greater demand from bearing

industries like TATA, NBC and also from the defence 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 left after heating

coal in the absence of air, generally containing up to 90% carbon) and limestone

(CaCO3) or burnt lime (CaO), which are added to the blast furnace at intervals,

making the process continuous. The limestone or burnt lime is used as a fluxing

material that forms a slag on top of the liquid metal. This has an oxidizing effect


on the liquid metal underneath which helps to remove impurities.

Approximately two tons of ore, one ton of coke, and a half ton of limestone are

required to produce one ton of iron.

Granulated Slag.

This slag is the component coming from the blast furnace when we get the

pig iron, this slag is usually used in the cement industries to produce cements so it will

have the demand from cement industries.

Liquid Nitrogen

It is prepared in visl only and they have a unit of producing nitrogen gas

used for their own consumption and it is used to burning purpose.

STEEL GRADE:

o TOOL STEELS

o SPRING STEELS

o ALLOY STEELS


SIZE RANGE:

o 20 TO 56 DIA / RCS ROLLED (BAR MILL)

o 60 TO 140 DIA / RCS ROLLED (PRI. MILL)

o 75 TO 195 DIA / RCS FORGED (LFM)

o 200 TO 700 DIA / RCS FORGED (PRESS)

o UNIT WT. OF FORGING – 8 Ts.

SUPPLY CONDITION

o NORMALISED

o ANNEALED

o SPHERODISED ANNEALED

o HARDENED & TEMPERED

o MACHINED TO DRG. SIZE

o CLOSED DIE FORGED ITEMS

o PEELED & GROUND BARS.

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

in international market.

Various department first identify the needs of material, then approach to the purchase

department and sent a purchase indent, in which they state quantity, amount and Quality

of the product required, then purchase department makes an enquire about purchase

indent, then it places a purchase order to the supplier.


Purchase order is prepared on the basis of quotation in which they stator quality, rate3

amount terms of purchase frequency of supply and delivery schedule etc, and then they

think best, then there makes an inspection of all the materials as per the condition and

terms of purchase order.

RAISING OF INDENTS

In the Indent, the Indenter will ensure, depending upon the nature of the item indented,

incorporation of special requirement of inspection/check-list for special packing

instructions, if any.

In case some of the items in the Indent are matching/ complementary parts of an

equipment/assembly and are required to be supplied by one supplier only, the Indenter

shall specify this in the Indent.

With a view to optimizing the utilization of internal facilities, each Plant/Unit is to

prepare and get approved by the Competent Authority, an annual plan for 'Make' items in

increasing numbers on cost-effective basis, one month before the beginning of each

financial year for the ensuing financial year.

Indents shall not be raised for items identified as 'Make' in the annual plan for the

financial year. For such items the department shall raise 'Work Order (WO)' in the

prescribed form, to be placed on the Shops.

FOR JOB CONTRACTS

The Indenter should give detailed information regarding description of 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 specifications and drawing number, etc., should be given in the indent. Similarly,

for the equipment to be deployed the desired capacities of the equipment, their

ownership, procurement through rent/lease, etc., should be specified in the Indent.

The overall quality of the jobs to be executed along with the expected Performance


Guarantees should be clearly indicated in the Indent. The Indent should also include any

other special terms and conditions required for the execution of the jobs.

In case only one contractor is to be engaged for some of the jobs/all the jobs given in the

Indent, the Indenter shall specify this in the Indent.

The indents for purchase of materials/job contracts shall be raised by the department(s)

concerned or designated centralized agencies. These Indents shall be prepared in the

prescribed format (to be designed by each Plant/Unit). The indent shall be signed by the

Head of the Department (HOD). The Plant/Unit shall devise a proper system of

numbering the Indents initially and their processing reference at different stages to

facilitate cross-reference. Suitable Index registers shall also be maintained for such

numbering/references at different stages for control purposes.

FOR PURCHASE OF MATERIALS

The Indenter should give full and complete information regarding the description and

specification of the material to be procured. To the extent possible, specifications given

should be standard specifications conforming to IPSS, PS, ISS or DIN, etc. The cut-off

points for performance and the points for bonus and penalties should be indicated,

wherever feasible.

Manufacturing Drawings, wherever required, should be enclosed in adequate numbers

with the Indent.

Along with the Indent, the Indenter shall also prepare and enclose the following:

n respect of new items, a check-list as per the prescribed proforma (to be designed by

each Plant/Unit) justifying the indented quantity, with all columns correctly and

completely filled. This check list shall be signed by the HOD.

In respect of proprietary items, a certificate on the prescribed proforma (to be designed

by each Plant/ Unit) signed by the HOD. The purchase of 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 of

purchase/job contract, formation of cartel/ ring like situations etc.

Plants/Units shall ensure that the complete tender documents along with the enclosures, if

any, are displayed on the SAIL website which can be downloaded by the interested

tenderers. Application made on such forms shall be treated as valid for participation in

the tender. The cost of tender documents, if any, may be collected from the bidders at the

time of submission of tenders. However, bidders would be given option to collect the

complete document in hard copy, if they so desire.

An abridged version of 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 of 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 Bulletin.

LIMITED TENDER ENQUIRY (LTE)

LTE should be issued only when reliable manufacturers/ suppliers/traders/contractors are

known. For this purpose, the MM Deptt./Contract Cell shall maintain a list of registered

parties in accordance with Para 5.3.3.

When the decision is to adopt LTE as a mode of tendering, the whole indent should be

treated as one and no split up thereof should be made to reduce the value of tender

enquiries.

LTE shall be issued only to the registered manufacturers/ suppliers/traders/contractors.

The registration of manufacturers/suppliers/traders/contractors should be according to

relevant IPSS.

LTE for trial order may be issued only with the approval of Head of MM Deptt./Contract

Cell. The total quantity to be ordered under the trial order shall also be specified and

approved by Competent Authority. The procedure for placement of trial order will be as

per Para 12.0.


The recommended modes of tendering for placement of orders are as under:

i) Open Tender/Global Tender,

ii) Limited Tender Enquiry (LTE),

iii) Single Tender for Proprietary items (Original Equipment Manufacturers).

iv) SingleTender(otherthanProprietaryitem)

Apart from the above methods of tendering, the following methods for placement of

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 of Competent Authority shall be obtained for issuance of NIT in each of the

above case.

Open/Global tenders are to be considered under the following circumstances:

When reliable manufacturers/suppliers/traders/ contractors as well as latest technology

are not clearly known.

When it is felt that advertising may elicit better response.

SINGLE TENDER ENQUIRIES (FOR PROPRIETARY ITEMS)

Proprietary (Original Equipment Manufacturers-OEM) Enquiry :

Enquiries for Proprietary items (OEM) should be issued with the approval of Competent

Authority as per the DOP. Such Proprietary items should be purchased from their

manufacturers or their authorized dealers only, where the manufacturer 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, therefore 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, after recording reasons and indenter should take approval of Chief


Executives of the Plant/Unit in all cases except procurement from PSUs/State

Government Undertakings where approval of Competent Authority shall be obtained.

A list of items procured on single tender basis, of value Rs. 5 Lacs and above should be

hosted on SAIL website to enhance vendor base of such items. The list of items displayed

would be plant-wise; giving items details viz. Catalogue number, description, detailed

specifications, annual requirement as well as area of use etc.

The instructions to be included on the website should be that, “Whoever is interested to

be a registered supplier of these items, should fill up the vendor registration form,

uploaded on the website. The normal registration process shall, thereafter be followed by

the Plants/Units for registering the eligible suppliers.”

Plants/Units should ensure updating of the list of Single tender items on website on a

quarterly basis. A resource person at respective plants/Units should be nominated for co-

ordination.

REPEAT ORDERS

Normally, as per the lead time, prior to expiry of the running supplies/Job Contract, the

Indenter has to process fresh Indent. However, due to unavoidable circumstances, if

either the Indent is not processed or even after processing the Indent, it is not possible to

place fresh order in time, under such circumstances for the Item/ Job Contract for which

continuity is essential, it may be necessary to place repeat order on existing party/

contractor. After recording the reasons leading to placement of repeat order, the proposal

for repeat order on same terms, conditions and specifications may be considered on the

following:

i) The original order must have been placed in the usual course after issue of LTE or

Open Tender. Emergency orders shall not be considered.

ii) Not more than two years have elapsed since placement of the original order.


METHODS FOR CALLING TENDERS

The following methods for calling of tenders shall be adopted:

1) Single Part Tendering,

2) Two Part/Three Part Tendering,

3) Pre-qualification bid/Expression of Interest (EOI)

followed 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, if any, in payment terms should be approved

by Competent Authority with the concurrence of Head of Finance of respective Plant/

Unit.

In case where delivery period has expired, documents sent through Bank should be

released only on approval of the Competent Authority based on recorded reasons. Such

approval should be obtained within two working days. In the case of payments through

Bank, the Accounts Department after receipt of necessary advice from the concerned

Bank will make payment to the Bank as per the terms of Purchase Order.

TAXES

If any tenderer does not ask for duties, taxes, levies, etc. extra in his quotation and

if this clause has accordingly been incorporated in the Purchase Order/Contract,

the tenderer will not be eligible for payment .

A. PRODUCTION DEPARTMENT:

BLAST FURNACE:

STEEL MAKING SHOP:

ROLLING MILLS:

FINISHING SHOP:

HEAT TREATMENT SHOP:

FOUNDRY:

MATERIAL MANAGEMENT:


Structural Shop:

In this section almost all the type of equipments used in the VISP are

manufactured and repaired. Some of the equipments manufactured in structural shop are:

1. converter

2. Laddle

3. BF vibarator screen

4. VD covers

5. Lifting table

6. Drilling Machine

7. Gate


MARKETING DEPARTMENT

VISL MARKETING

CMO

Advertising

Services

Demand & Respond

Place to Advertise

Product

Plan

Marketing is a systematic function and it has its own importance in every organization.

Main objectives of marketing department in VISP are to identify customer’s needs and

satisfies then accordingly. It is the process of buying and selling mainly based on demand

and supply analysis.


Before 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

satisfying the customer needs is main objective of the organization.

Before the liberalization was marketing of steel was very easy as steel was a

controlled commodity. Now in the era of LPG, it is a free 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 of distribution for selling its product. It has branches in

various areas like Bangalore, Calcutta, Pune, Delhi, Mumbai, and Nagpur. Pune branch

has a very large branch.

The branch manger receives all the enquiries from 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 of VISP are raw material for other

company. They adopt integrated marketing procedure. It produces goods only after

getting the order from customer.

MARKETING NETWORK

So VISL has an expanded marketing network in India. The following summary of

marketing network, branches, and stockyard of VISL are as

Bangalore - Branch sales office

Calcutta - Branch sales office

Mumbai -Branch sales office

Pune - Branch office & stockyard

Delhi -Branch office & stockyard

Ahmedabad -Stockyard


PPRODUCTS OF VISL

Rolled Alloy & Special Steels

Forged Alloy & Special Steels

As Cast Alloy & Special Steels

Concast Blooms

As Cast Alloy & Special Steels Ingots

Pig Iron – Basic & Foundry Grade

Granulated Slag

Liquid Nitrogen


Marketing HQ

BDVT

Bangalore

Chennai

Calcutta

NewDelhi

S/Y

(SAIL)

Ahmedabad

Mumbai

Pune

S/Y

(VISP)

S/Y(SAIL)

S/Y(SAIL)

MARKETING NETWORK OF VISL


GRADES MANUFACTURED

CARBON & ALLOY - Brakes, Camshaft,

CONSTRUCTIONAL STEELS Axles, Spring Bolts,

CASE HARDENING STEELS - Piston Rings, Bushes, Gear wheels,

Spindles, Shafts, Steering parts.

FREE CUTTING STEELS - Bolts, Nuts, Screw

SPRING STEELS - Leaf, Helical, Volute

& Torsion Springs

BALL BEARING STEELS - Balls, rollers & races

TOOL & DIE STEELS - Heavy forging / riveting hammers, chisels,

scissors knife blades punches, lathe

centers etc. &all types of die blacks for

medium& small forging dies.

SOFT MAGNETIC IRON - Railway Signaling& other electrical /

magnetic relay system.

CATEGORIES OF STEEL :

CARBON & ALLOY CONSTRUCTION STEEL

CASE HARDENING STEEL

FREE CUTTING STEELS

TOOL & DIE STEELS

SPRING STEELS

BALL BEARING STEELS

SOFT MAGNETIC IRON

HIGH TEMPERATURE STEELS

B) SIZE RANGE:

20 TO 56 DIA / RCS ROLLED (BAR 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.

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 BARS

9. SPECIFIC / UNIT LENGTH

MAJOR CUSTOMERS

DEFENCE UNITS :

ORDNANCE FACTORY, AMBAJHARI

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, HYDERABAD

RAILWAYS:

INTEGRAL COACH FACTORY, PERAMBUR

CENTRAL RAILWAY, MUMBAI

RAIL SPRING KARKHANA, GWALIOR

DIESEL LOCO WORKS, VARANASI

SOUTHERN RAILWAY, PODANUR

RAIL WHEEL FACTORY, BANGALORE


POWER SECTOR:

BHEL UNITS, HYDERABAD, TRICHY, HARDWAR

NLC, NEYVELI

NPC, MUMBAI

STEELS PLANTS:

BHILAI STEEL PLANT

BOKARO STEEL PLANT

ROURKELA STEEL PLANT

DURGAPUR STEEL PLANT

IISCO STEEL PLANT

JSW, BELLARY

RINL, VIZAG

ENGINEERING INDUSTRY:

HMT UNITS, BANGALORE

TRACTOR ENGINEERS, MUMBAI

SHANTI GEARS, COIMBATORE

KIRLOSKAR TOYODA TEXTILE MACHINERY,

BANGALORE

DYNAMATIC TECH, BANGALORE

FERROMATIC MILACRON, AHMEDABAD

DEE TEE INDUSTRIES, INDORE

AUTOMOBILE / FORGING INDUSTRY:

BHARAT 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

SHARDLOW INDIA LIMITED, CHENNAI

BAY FORGE LIMITED, CHENNAI

SIFL, THRISSUR

MGM INDUSTRIES LIMITED, MYSORE

TATA MOTORS, JAMSHEDPUR

EARTH MOVERS:

BEML UNITS, BANGALORE, MYSORE, KOLAR GOLD FIELDS

L&T, BANGALORE

HINDUSTAN MOTORS, HOSUR

BEARING INDUSTRY :

NEI, JAIPUR

TISCO, JAMSHEDPUR

JINABAKUL FORGE PRIVATE LIMITED, BELGAUM

JINALLOY STEEL PROCESSOR, MUMBAI

DUAL RINGS, HYDERABAD

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, BELLARY

VARIOUS TRADER


FINANCE DEPARTMENT

Finance Department chart

FINANCIAL DEPARTMENT:

FLOW CHART OF FINANCIAL DEPARTMENT:

ACCOUNT SYSTEM:

CENTRAL ACCOUNTS:

PURCHASE FINACE SECTION:


DGM-Finance

AGM-C&IT SR.MGR SALES,C/A, C/E

MGR.COST & BUD

MGR.PUR & PROJ

MGR.PAY & EST

MGR.SALES Jr.Mgr CASH

DY.MGR C/E

ASST.MGR C/A

DGM-I/C Finance

SALES ACCOUNTS SECTION:

PAY AND ESTABLISHMENT:

COST ACCOUNT SECTION:

OTHER AREAS OF FINANCE:

Finance means acquisition of funds and proper utilization and allocation of funds in

proper way. Finance plays a vital role in the development of any business. Thus

development of any business majorly depends on the effective finance management.

In VISL Finance Management Department can be divided into different sections.

General Manager is the head of the finance department and computer section. He looks

after over all activities of finance department. Each section maintains the books of the

accounts. The following 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 of the most important functions in the organization. It

is the lifeblood of the company. Financial management involves the preparation of

budget, which will be useful for the future decisions, and it will give information about

the company’s financial position to the customer, creditors and Government.


Depreciation method followed:

Depreciation is provided on straight-line method at the rates specified in Schedule XIV to

the Companies Act, 1956.

However, where the historical cost of a depreciable asset undergoes a change, the

depreciation on the revised unamortised depreciable amount is provided over the residual

useful life of the asset.

Classification of plant and machinery into continuous and non-continuous is made on the

basis of technical opinion and depreciation provided accordingly.

Depreciation on addition/deletion during the year is provided on pro-rata basis with

reference to the month of addition/deletion.There seems to be no deviation from the

provisions of the Companies Act in respect to Depreciation rates.

The schedule is known as "Significant Accounting Policies and notes on Accounts".

Cost Control Measures

Emphasis on cost reduction and productivity improvement continued during the

year through systematic application of new technology, process improvement through

R&D efforts and strong awareness to control cost at all levels of operation.

Continuous monitoring of procurement of high value items, maximising use of in-

house engineering shops and optimisation in procurement including negotiations with

suppliers for price reduction.

A saving of ` 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 of operation viz. optimisation of coal blend, higher yield,

reduction in specific energy consumption and coke rate, higher BF 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 fund management. The high

cost short term loans were replaced with low cost debts. Also, the Company earned

interest of ` 1772 crore through short-term deposits with scheduled banks. The Company

continued to maintain its virtual debt-free status with term deposits with Banks of ` 22023

crore against borrowings of ` 16511 crore as at the year-end. The total debt during the

current year increased by ` 8948 crore on account of borrowings for capital expenditure.

M/s FITCH and M/s CARE, RBI approved credit rating agencies, maintained "AAA"

ratings indicating the highest safety, to SAIL's long term borrowing programme.

To ensure faster and timely payment to suppliers, contractors, employees, etc. e-

payments were increased substantially and it covered almost 80% of 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 fund 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 of Hot Metal production from 13.82 MTPA to 23.46 MTPA

progressively in the current phase.

2.Orders for all major packages of ISP and SSP, stand alone and other part packages

of BSL, BSP, RSP & DSP were placed. These packages are under

implementation. The finalization of orders for balance packages are in progress.

3.During FY 2009-10, capital expenditure of ` 10,606 crore was made (` 5,233 crore

in previous year) which has been funded by a mix of borrowings and internal

accruals.


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 of

additional borrowings for meeting working capital requirements and capital expenditure.

*As at the end of the respective financial year.

The inventories decreased mainly on account of reduction in semi/ finished 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 finished/semi-finished inventories by 20% was due to decrease in

quantity and valuation rate on account of reduction in both cost of production or Net

Sales Realisation, whichever applicable.

The stores & spares inventory was reduced by 1% and raw material inventory had

increased marginally by 2%.


CHAPTER 5: SWOT ANALYSIS

Strengths

Well-equipped chemical and metallurgical laboratories.

Producing 700 varieties of alloy & special steels.

Satisfied and loyal customers.

Locational advantage with proximity to major markets

(South and West)

Known as quality supplier of alloy and special steels.

Good Brand Name / Image in the Market.

Advantage of Stock Yards.

Reliable Quality.

Delivery with Short Lead Time.

Integrated steel making facilities offer prospects for

Brownfield capacity additions, offering significant

intrinsic advantage in lower incremental capital cost –

related charges.

Weakness

Old technology in certain production shops.

High Overheads and fixed costs.

Adverse age-mix of workers and high average

wage.

Higher Cost of Production.

High Consumption of Coke / High Coke Rate.

Old Machinery – Frequent Troubles &

Maintenance down time.

Higher dependence on Auto & Private Sector.

Ageing Man Power and the average age

of the employees around 50.

Lack of Captive Mines.

Opportunity

Growing market for iron and steel.

Competitive environment calls for improvement and

increase in productivity.

Cutting costs by making use of new technology.

Hardening of Steel Prices & Increasing Demand.

Integrated Manufacturing Facility.

Skilled Man Power & Established Process Standards.

Threats

Due to better technology competitors are able to

offer the same products at lesser prices.

Too many welfare activities lead to the increase

in expectations of employees, which could at

some point of time become a reason for dispute.

Entry of New Players with Higher Automation.

Volatility in the prices of raw Materials.

CHAPTER 6: SUMMARY OF LATEST ANNUAL REPORT


Balancesheet ofVisveswaraya 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 &

Surplus29,186.30 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

Loans8,755.35 6,065.19 2,119.93 2,624.13 3,175.46

TOTAL

LIABILITIES49,827.95 35,522.89 26,108.81 21,493.67 16,899.03

Assets

Gross Block 35,382.49 32,728.69 30,922.73 29,912.71 29,360.46

(-) Acc.

Depreciation21,780.91 20,459.86 19,351.42 18,315.00 17,198.32

Net Block 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 Bank 22,436.37 18,228.53 13,759.44 9,609.83 6,172.64

Loans And

Advances5,155.32 4,292.50 3,644.22 3,097.70 4,524.37


Total Current

Assets40,113.05 35,666.84 27,309.01 21,673.75 18,788.80

Current

Liabilities13,383.67 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

Liabilities19,595.34 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

(A+B+C+D+E

)

49,827.95 35,522.89 26,108.81 21,493.67 16,899.03

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:

Manufacturing

Expenses4,234.65 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

Expenses834.52 1,644.78 1,321.44 1,064.29 1,035.99

Expenses

Capitalised0.00 -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

EXPENDITURE31,380.86 34,857.14 28,691.53 24,684.26 21,645.71

Operating Profit 9,215.04 8,941.44 11,267.14 9,644.51 6,554.77

EBITDA 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-offs 10.33 128.02 75.49 128.59 181.44

EBIT 10,195.58 9,808.19 11,495.86 9,659.40 6,058.33

Interest 402.01 253.24 250.94 332.13 467.76

EBT 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

Profit and Loss for

the Year6,340.68 6,270.67 7,310.27 6,073.47 3,896.21

Non Recurring

Items228.89 -277.12 161.90 53.75 45.64


Other Non Cash

Adjustments184.80 181.26 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

Preference

Dividend0.00 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


RATIO ANALYSIS

1. CURRENT RATIO= Current Assets / Current Liabilities

Theoretically, the standard of current ratio is 2:1. But in practice, it changes from

industry to industry. If the current ratio is more than 1:1, it means to say that the firm is in

position of meet its short term obligations like creditors, bills payable, bank over draft

and the like. In VISL LTD, the current ratio is 2.04 in FY 20010-11.

.

2. QUICK RATIO:Quick Assets/Current Liabilities

Quick Ratio Quick Assets Current Liabilities

1.58 31085.59 19,595.34


Current Ratio Current Assets Current Liabilities

2.04 40,113.05 19,595.34

The actual quick ratio has to be compared with the standard quick ratio of 1:1. If

the actual quick ratio is equal to or more than the standard ratio of 1:1, the conclusion can

be that the concern is liquid and so that it can pay off its short term liabilities out of its

quickly realizable assets without any difficulty. But, VISL LTD’s quick ratio is standard

quick ratio of 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 cashSo, those

assets include cash in hand, bank balance.

In VISL LTD, the cash balance is very least. In 2010-11 the cash balance is Rs

10.90 lakhs.

4. NET WORKING CAPITAL RATIO= Total Current Assets/ Total Current

Liabilities

Net Working Capital

Ratio

Total Current Assets Total Current

Liabilities

2.54 49,827.95 19,595.34

Higher the ratio greater the ability of the firm to meet its current obligations and

vice-versa. VISL LTD having 2.54 in 2010-11. If this ratio is more than 1 time we can

say that the firm is solvent.

5. DEBT-EQUITY RATIO =Long term debt/Share holders fund


Debt equity ratio Long term debt Share holders fund

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 firm. We can do more trading on equity. It is very beneficiary to

shareholder if the firm having more EBIT. When the EBIT is more and more over a

period of time, interest cost cannot be change proportion to changes of EBIT. Interest is a

fixed cost. So, if EBIT is higher in a particular period we cannot pay the higher

interest.VISL LTD is under loss in 2010. So it cannot be a benefited one to shareholders.

6. INTEREST COVERAGE RATIO=EBIT/interest

Ratio EBIT Interest

1.75 10,195.58 5819.01

7. DEBT 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 before making any provision for doubtful debts.


Significance: The liquidity position of the firm depends upon the speed with which

debtors are realised. This ratio indicates the number of times the receivables are turned

over and converted into cash in an accounting period.

8. AVERAGE COLLECTION PERIOD=360days/ 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.

9. CURRENT 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 of payment of accounts payable.As

accounts payable arise on account of 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 for a long period or it may reflect delayed payment to suppliers which is not a

very good policy as it may affect the reputation of the business.

10. AVERAGE PAYMENT PERIOD=360days/Creditors Turnover ratio


Average payment period Days Creditors Turnover ratio

349 days 360 0.99

The firm will made payment 261 days after it buy the goods on credit. So the firm

has enough time to meet its obligation. So when a firm deaccelerate its disbursement the

firm has good receivables management.

11. FIXED ASSETS TURNOVER = Net Sales/Net Fixed Assets

Fixe asset d turnover Net Sales Net Fixed Assets

1.97 40,595.90 20000

12. WORKING CAPITAL TURNOVER = Net Sales/Working Capital

Working Capital

Turnover

Net Sales Working Capital

1.97 40,595.90 20517

It reflects relationship between employed in the business. Higher turnover means

better liquidity and profitability.

Significance: High turnover, capital employed, working capital and fixed assets

is a good sign and implies efficient utilisation of resources. Utilisation of capital

employed or, for that matter, any of its components is revealed by the turnover ratios.

Higher turnover reflects efficient utilisation resulting in higher liquidity and profitability

in the business.


13. GROSS PROFIT RATIO: GP/SALES*100

Gross Profit Ratio Gross profit Sales

0.15 6340.68 40595

Gross profit ratio as a percentage of 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 for its comparison. It also indicates the margin available to cover operating

expenses, non-operating expenses, etc. Change in gross profit ratio may result from

change in selling price or cost of sales or a combination of both.

14. OPERATING RATIO: operating cost/sales*100

Operating ratio Operating cost Sales

22.97% 9317 40595

It is computed to analyze cost of operation in relation to sales. Operating expenses

include office expenses, administrative expenses, sellingexpenses and distribution

expenses.

Cost of operation is determined by excluding non-operating incomes and expenses such

as loss on sale of assets, interest paid, dividend received, loss by fire, speculation gain

and so on.

15. OPERATING PROFIT RATIO: 100-0perating ratio

Operating Profit Ratio 100 0perating ratio


77.03 100 22.97

It is calculated to reveal operating margin. It may be computed directly or as a

residual of operating ratio.

Significance: Operating Ratio is computed to express cost of operations

excludingfinancial charges in relation to sales. A corollary of it is ‘Operating Profit

Ratio’.It helps to analyse the performance of business and throws light on theoperational

efficiency of the business.

16. NET PROFIT RATIO:net profit/sales*100

Net profit Ratio Net profit Sales

0.15 6340 40595

Net Profit Ratio is based on all inclusive concept of profit. It relates sales to netprofit

after operational as well as non-operational expenses and incomes.

Significance: It is a measure of net profit margin in relation to sales. Besidesrevealing

profitability, it is the main variable in computation of Return on investment. It reflects the

overall efficiency of the business.

17. RETURN ON INVESTMENT (ROI) OR RETURN ON CAPITAL

EMPLOYED (ROCE)

Return on Investment Profit before Interest and

Tax

Capital Employed

0.24 10195 41304


It explains the overall utilization of funds by a business enterprise. Capital

employed means the long-term funds employed in the business and includes shareholders

fund, debentures and long-term loans.

Significance: It measures return on capital employed in the business. It reveals the

efficiency of the business in utilization of funds entrusted to it by shareholders,

debenture-holders and long-term liabilities.

18. RETURN ON NET WORTH (RONW):profit after tax/net worth*100

Return on Net Worth profit after tax net worth

7.44% -666.42 8946

This ratio is very important from shareholders’ point of view in assessing whether

their investment in the firm generates a reasonable return or not.

It should be higher than the return on investment otherwise it would imply that

company’s funds have not been employed profitably.

19. EPS: PAT/No. Of shares outstanding

Earnings refer to profit available for equity shareholders which are worked out as

Profit after Tax – Dividend on Preference Shares.

This ratio is very important from equity shareholders point of view and so also for the

share price in the stock market. This also helps comparison with other firm’s to ascertain

its reasonableness and capacity to pay dividend.


Earnings per share PAT No. of shares outstanding

-6.50 -77.23 76971094

20. P/E RATIO: MPS/EPS

Price earnings ratio Market price of a Share Earnings per Share

-1.5 5 -6.50

It reflects investors expectation about the growth in the firm’s earnings and

reasonableness of the market price of its shares. P/E ratios vary from industry to industry

and company to company in the same industry depending upon investors perception of

their future.

CHAPTER 7:LEARNING EXPERIENCE

FINDINGS & SUGGESTIONS

FINDINGS:

VISL has good reputation in the steel market having long experience of around 6

decades in the steel industry.It has an easy access through major ports like Goa,

Chennai, Mangalore & Mumbai.

VISL is a fully integrated stainless steel plant.VISL is far away from the main

market as such it faces problems with the infrastructure.

India’s only integrated private sector producer of galvanized steel producer.VISL is

the only co. producing the special alloyed steel in India.

The main problem of VISL is it does not have any captive mines.

Before 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 for handling their jobs in their new

plant.Training program is necessary to all the workers, to improve the quality of

production.The company must give importance to sales promotion.

Dealers meeting should be held once in 3 months to solve the problem of 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 of

operation is decreasing the productivity of the employee. So modernization of

the machines must be taken up.

CONCLUSION:

VISL produces special steels and it has gained a reputation for itself in the

industry by ensuring quality steel production matching international standards. It was

setup in Bhadravati, 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. Blast furnace and numerous

support facilities. Today, the plant is able to produce over 700 varieties of quality alloy

and special steels.

In VISLall major decisions is taken by the board of directors. They have full control

over the administration. They control the executive and general managers. These board of

directors are selected by SAIL. But the general manager of VISL will have full control

over the deputy managers of project, HRD, production and material departments.

These deputy managers will have full control over their respective area and they

have a right to take minor decisions in their respective areas.


Overall VISL has done a significant achievement but from last one and half years

VISL has incurred losses due to fluctuation in steel prices.

BIBILOGRAPHY

VISL News – A monthly news Magazine.(26 JULY 2011), page no 2-24.

VISL Annual Performance Plan.(2 AUGUST 2011), page no 4-14 & 25-64.

Personnel manual of VISL. (14 AUGUST 2011), page no 25-34.

Insight – A VISL magazine. (16 AUGUST 2011), page no 1-18.

WEBSITES

www.sail.co.in (http://www.sail.co.in/pdf/Q2%20FY12.pdf),


http://www.sail.co.in/pdf/Q2%20FY12.pdf

http://www.sail.co.in/

www.visl.co.in (http://www.visl.co.in/aboutus.php?tag=company-

background).

Miso, Thomas J. A Nation of Steel: The Making of Modern America, 1865–1925.

Baltimore: Johns Hopkins University Press, 1995.

Sunil Mukhopadhyay. "VISL expects operating profit in 2000-01". Online Edition

of The Indian Express, dated 2000-05-03. Retrieved 2007-10-23.

"VISL on road to profit, says Sahi". Online Edition of The Deccan Herald, dated

2006-01-23. Retrieved 2007-10-23.


http://www.visl.co.in/

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