Professional Documents
Culture Documents
At
Rashtriya Ispat Nigam Limited
Visakhapatnam Steel Plant
A Project report submitted in partial fulfillment of the requirement for the award of
DECLARATION
I, Shiva kumar here by solemnly declare that the project report entitled a study on the Organization Structure submitted by me is a bonafide work done and it is not submitted to any other university or published anytime before. This project work is in partial fulfillment of the requirements for the award of the Master of Business Administration from Christ University, Bangalore.
VISAKHAPATNAM
ACKNOWLEDGEMENT
The satisfaction that accompanies the successful completion of any task would be incomplete without mentioning people who made it possible and whose encouragement and constant guidance crowned my effort with success.
I am grateful to external project guide SRI B. Uma Maheswar Rao , SENIOR MANAGER (Personnel) and I am also thankful to SRI O. Ram Mohan Rao Assistant General Manager, Coordinator of student trainees HRD & PROJECT WORKS and SRI M.L.Srinivas Varma, Assistant General Manager, Coordinator of student trainees HRD & PROJECT WORKS in VISHAKAPATNAM STEEL PLANT for their cooperation and in providing the opportunity to do my project in their esteemed organization .
I especially thank all those who have helped me directly or indirectly. I express my profound thanks to my affectionate parents for their constant encouragement throughout my educational career.
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Contents
1. History.....6 2. Profile of the Products.....................8 3. Mission/ Vision, objectives and strategies.........12 4. Organisation Structure .......15 5. Policies & Procedures.....17 6. Functions of various departments and their managers....18 7. SWOT Analysis...21 8. Key Result Areas.22 9. Significant Factors for Success....23 10. System of accounting followed..25 11.Product Promotional Measures....27 12.Career planning and promotion policy of employees..29 13.Training measures........30 14.HRD measures..31 15.Manpower planning......34 16.The Appraisal Process..36 17.Financial highlights of the organization...37
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HISTORY
On 17 April 1970, the then prime minister of India, Late Mrs. Indira Gandhi announced the government's decision in the Parliament to establish a steel plant at Visakhapatnam. The activities kicked off by appointing site selection committee in June 1970 and subsequently the committees report was approved for site. On 20 January 1971 she laid the foundation stone. Consultants were appointed in February 1971, and feasibility reports were submitted in 1972. The first block of land was taken over on 7 April 1974. M/s M.N. Dastur & Co was appointed as the consultant for preparing the detailed Project report in April 1975 and in October 1977 they have submitted the report for 3.4 mtpa of liquid steel. With the offer for assistance from government of erstwhile USSR, a revised project concept was evolved. Detailed Project Report for a plant capacity of 3.4 Mtpa was prepared by M/s M.N. Dastur & Co in November 1980. In February 1981 the contract was signed with USSR for preparation of working drawings for coke ovens, Blast Furnace and sinter plant. The blast furnace foundation was laid with first mass concreting in the project in January 1982. The construction of township also started. A new company Rashtriya Ispat Nigam Limited (RINL) was formed on 18 February 1982. Visakhapatnam Steel Plant was separated from SAIL and RINL was made the corporate entity of Visakhapatnam Steel Plant in April 1982. Vizag Steel Plant is the only Indian shore-based steel plant, and it has massive land, up to 19,000 acres (7,700 ha), and is poised to become up to 20 MT in a single campus and turnover in 20112012 was 14,457Crores. On 20th May, 2009 Honorable Prime Minister Manmohan Singh launched the expansion project of Visakhapatnam Steel Plant from a capacity of 3.6MT to 6.3MT at a cost of Rs. 8,692 Crores. But the investment was revised to 14,489 crores with following classification:
Expenditure for the financial year 2009-10 Rs 1840 Crore Rs 5883 Crores since inception of the Project
Total Commitment, including enabling works, steel procurement, Consultancy, Spares, etc is Rs 11591 Crores as on 25.03.10. The expansion project is expected to become functional by 2012.
AWARDS:
1. ISO 9002 for SMS and all the down stream units a unique distinction in the steel industry. 2. Indira Priya Darshini Vriksha Mitra award 1992-93, Nehru memorial national award for pollution control 1992-93 & 1993-94. 3. 4. 5. 6. 7. 8. 9. EEPC export excellence award 1994-95. CII (Southern Region) energy conservation award 1995-1996. Continuously growing peacock (1st prize) national quality award 1996. Steel ministries trophy Best safety performance 1996. IIM national quality commitment award 1997. Gold star award for excellent performance in productivity. Udyog excellence gold medal for excellence in steel plant.
10. Excellence award for out standing performance in productivity management, quality and innovation. 11. ISPAT Suraksha Puraskar (1st prize) for largest accident free period 1991-94. 12. PM Trophy for the year 2002-03 as the Best Integrated Steel Plant 13. World quality commitment international star award in 2004 14. Cll-GBC National Award in 2005 15. Safety innovation award in 2006 16. Organizational excellence award in 2006 17. National Energy Conservation Award in 2006 18. Enterprise Excellence Award 2007 19. Viswakarma Rashtriya Puraskar 2007 20. Best Quality Circles implementing Organization Award -2007
TMT Re-Bars:
The reinforcement bars in either straightened form or coil form are produced from fully killed steel and have low carbon content. These have ultimate tensile strength and higher percentage of elongation when compared to cold twisted bars of same grade. These are ideally suited for any type of concrete structure. These vary from a size of 8mm and weight of 0.363kgs/m to 36mm and weight of 7.750kgs/m.
Plain rounds:
Rounds are produced from fully killed steel. Bundling and automatic tying/strapping of rounds ensures minimum damage during handling and transport and has close dimensional tolerance. These vary from a size of 16mm and weight of 1.58kgs/m to a size of 80mm and a weight of 39.47kgs/m.
Structurals:
Structurals are rolled from fully killed steel. It has sectional properties and tolerance as per angles, channels and beams. Piling and automatic tying of structurals ensures minimum damage during handling and transport. The size of angles varies from 50x50x5/6mm and a weight of 4.5kgs/m to 110x110x8/10mm and a weight of 4.82kgs/m. The size of channels varies from 40x32x5mm with a weight of 4.82kgs/m to 150x76x6.5mm with a weight of 16.80kgs/m.
The dimensions of IPE beams are 180x91x5.3mm with a weight of 18.80kgs/m. The dimensions of HE beams are 120x114x5mm with a weight of 19.90kgs/m.
Special steels:
The other products like flats, blooms and billets are also manufactured by steel plant of vizag. Their specifications are as follows: Flats: 150x10mm to 150x12mm. Blooms: 245x245mm to 315x245mm. Billets: 125x125mm to 65x65mm.
Iron Ore lumps & fines BF Lime Stone SMS Lime Stone BF Dolomite SMS Dolomite Manganese Ore Boiler Coal Coking Coal Water supply Power supply Medium cooking coal
Bailadilla, M.P Jaggayyapeta, A.P UAE Dubai Madharam, A.P Chipuripalli, A.P Talcher, Orissa Australia Yeluru canal, Andhra Pradesh Captive power plant Gidi/Swang/Rajarappa/Kargil
Major Units:
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DEPARTMENTS
UNITS (3.0 MT STAGE) 3 Batteries each of 67 ovens & 7 Mts Height 2 Sinter machines of 312 Sqm grate area each 2 Furnaces of 3200 cu m volume each 3 LD Converters each of 150
COKE OVERNS
SINTER PLANT
5,256
BLAST FURNACE
3,400
3,000
LMMM WRM
MMSM
Mission:
To attain 16 million ton liquid steel capacity through technological up-gradation, operational efficiency and expansion. Augmentation of assured supply of raw materials to produce steel at international standards of cost and quality. To meet the growing aspirations of the stakeholders.
Objectives:
Expand Plant capacity to 6.3Mt by 2012 with the mission to expand further in subsequent phases as per the corporate plan. Revamp existing Blast Furnace to make them energy efficient to contemporary levels and in process increase their capacity by 1 Mt, thus total hot metal capacity to 7.5 Mt. Be amongst top five lowest cost steel producers in the world. Achieve higher levels of customer satisfaction. Be proactive in conserving environment, maintaining high levels of safety and addressing social concerns.
Strategies:
RINL-VSP has formed a joint venture company with Manganese Ore India LimitedRINMOIL FERRO ALLOY Pvt. This will help VSP to meet its Ferro Alloys requirements. RINL-VSP acquired 51% stake in M/s EIL, the holding company of OMDC & BSLC (Bird group of Companies) .
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natural calamities.
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VISION:
To be a continuously growing world-class company. We shall: Harness our growth potential and sustain profitable growth. Deliver high quality and cost competitive products and be the first choice of customers. Create an inspiring work environment to unleash the creative energy of people. Achieve excellence in enterprise management. Be a respected corporate citizen, ensure clean and green environment and develop vibrant communities around.
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Organisation Structure
Director (Commercial) ED (MM) Addl. GM (Mktg) Addl. GM (Mktg) - Services & Exports
Director (Personnel) DGM (M&HS) I/C GM (P&A) Addl. GM (P&IR) DGM (Trg) DGM (HRD) DGM (Legal Affairs)
Director (Operations GM ED (Works) (Maint.) Addl. GM (QATD) Addl. GM (Audio & Telco) Addl. GM (Services) Addl. GM (Steel) Addl. GM (C, S & C) GM (Maint.)
Company
Addl. GM
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The modern era in steel making began with the introduction of Henry Bessemer's & Bessemer process in the late 1850s. This enabled steel to be produced in large quantities cheaply, so that Mild Steel is now used for most purposes for which wrought iron was formerly used. This was only the first of a number of methods of steel production. The Gilchrist-Thomas process (or basic Bessemer process) was an improvement to the Bessemer process, lining the converter with a basic material to remove phosphorus. Another was the Siemens-Martin process of open hearth steelmaking which like the Gilchrist-Thomas process complemented, rather than replaced, the original Bessemer process. These were rendered obsolete by the Linz-Donawitz process of basic oxygen steel making, developed in the 1950s, and other oxygen steelmaking processes. One third of world's steel is currently produced in China. Arcelor-Mittal is however the production. White-hot steel pouring out of an electric arc furnace. Blast furnaces have been used for two millennia to produce pig iron, a crucial step in the steel production process, from iron ore by combining fuel, charcoal, and air. Modern methods use coke instead of charcoal, which has proven to be a great deal more efficient and is crediting with contributing to the British Industrial Revolution. Once the iron is refined, converters are used to create steel from the iron. During the late 19th and early 20th century there were many widely used methods such as the Bessemer process and the Siemens-Martin process. However, basic oxygen steelmaking, in which pure oxygen is fed to the furnace to limit impurities, has generally replaced these older systems. Electric arc furnaces are a common method of reprocessing scrap metal to create new steel. They can also be used for converting pig iron to steel, but they use a great deal of electricity (about 440 kWh per metric ton), and are thus generally only economical when there is a plentiful supply of cheap electricity.
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Energy policy: Monitor closely and control consumption of various forms of energy through an effective energy Management system. Adopt appropriate energy conservation technologies. Maximize the use of cheaper and easily available forms of energy..
HR Policy: Provide work environment that makes the employees commited and motivated for maximizing productivity. Establish systems for maintaining transparency , fairness and equality in dealing with employees. Encourage teamwork, creativity, innovativeness and high achievement orientation. Ensure functioning of effective communication channels with employees.
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IT Policy: Follow best practices in process automation & business processes through IT by in-house efforts/ outsourcing and collaborative efforts with other organizations. Follow scientific and structured methodology in the software development processes with total user involvement, and thus delivering integrated and quality products to the satisfaction of internal and external customers. Enrich the skill and knowledge at regular intervals to make employees knowledgeable.
Production Department
The production department is responsible for converting inputs into outputs through the stages of production processes. The Production Manager is responsible for making sure that raw materials are provided and made into finished goods effectively. He or she must make sure that work is carried out smoothly, and must supervise procedures for making work more efficient and more enjoyable. There are five production sub-functions
Production and planning They will set the standards and targets at each stage of the production process. The quantity and quality of products coming off a production line will be closely monitored.
Purchasing department This department will provide the materials, components and equipment required. An essential part of this responsibility is to ensure that stocks arrive on time and are of good quality
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The stores department The stores department are responsible for stocking all the necessary tools, raw materials and equipment required to service the manufacturing process.
The design and technical support department They are responsible for the design and testing of new product processes and product types, together with the development of prototypes through to the final product.
The works department This department is concerned with the manufacture of products. This will include the maintenance of the production line and other necessary repairs. The works department may also have responsibility for quality control and inspection.
Recruitment and selection Training programmes Training programs are held by the HRD to improve the employees skills, as well as to motivate them. There are three main types of training are 1. Induction training 2. 3. On-the- job training Off-the-job training Manpower Planning The HR department needs to think ahead and establish the number and skills of the workforce
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required by the business in the future. Failure to do this could lead to too few or too many staff or staff with inappropriate needs.
Dismissal and Redundancy (retrenchment) Dismissal is where a worker is told to leave their job due to unsatisfactory work or behaviour. Redundancy is when the business needs to reduce the number of employees either because it is closing down a branch or needs to reduce costs due to falling profits. It may also be due to technological improvements, and the workers are no longer needed.
Marketing department
These are the main section of the market departments:
Sales department is responsible for the sales and distribution of the products to the different regions. Research & Department is responsible for market research and testing new products to make sure that they are suitable to be sold. Promotion department decides on the type of promotion method for the products, arranges advertisements and the advertising media used. Distribution department transports the products to the market.
Finance Department
Book keeping procedures Keeping records of the purchases and sales made by a business as well as capital spending.
Preparing Final Accounts Profit and loss account and Balance Sheets
Providing management information Managers require ongoing financial information to enable them to make better decisions.
Management of wages The wages section of the finance department will be responsible for calculating the wages and
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salaries of employees and organising the collection of income tax and national insurance for the Inland Revenue.
Raising Finance The finance department will also be responsible for the technical details of how a business raises finance e.g. through loans, and the repayment of interest on that finance. In addition it will supervise the payment of dividends to shareholders.
Availability of land and infrastructural facilities for expansions up to 16Mt. Superior basic steel making technology. Strong committed workforce.
High expenses due to purchase of raw materials. Capital repairs, up-gradation and modernization due to major facilities.
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Entry of international players. Dependency on single supplier for sourcing iron ore.
From the above SWOT matrix the emerging concerns/issues are as follows:
Shutdowns required for carrying out the capital repairs and major equipments. In the long term, non availability of captive mines for iron ore and coking coal has been a handicap for the company. Inconsistencies in supplies - quantity and quality - along with rising prices have impacted the company's performance throughout and more so in the recent past. The company has applied for lease for iron ore mines in the states of Orissa and Chattisgarh without much success. Also the company is contemplating exploring the possibility of acquiring controlling stake in existing / new iron ore mines outside the country. Major threat that challenges the profitability concerns in steel industry continues to be increasing input costs. As per ABARE (Australian Bureau of Agricultural and Resource Economics), world steel prices are expected to remain high and reflecting higher steel making costs and growing steel demand. Steel making costs are expected to rise as a result of high freight costs and higher prices for iron ore and metallurgical coal, the two key steel making ingredients
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Key result areas (KRAs) capture about 80% of the departments work role. The remainders are usually devoted to areas of shared responsibility.
Human resource:
Motivational Trip Harmonious Employee Relations Counselling Trouble Makers Effective Grievances Handling Handle issues like staff, production, salary .Performance Appraisal Training & Quality Circle
Marketing:
Finance:
development. OD is an effort that is a) planning b) organization wide, and c) managed from the top d) increase organization effectiveness and health e)planned interventions in the organizations processes. In a sense, organisation success is never ending because it is a process of constant striving to become a more healthy, productive and viable organization. In order for change to take hold, however, Organisation success must include clear, measurable goals along the road of development.
There is a realistic, long-term time perspective. There is a willingness to face the data of the situation and to work with it on changing the situation. The system rewards people for the effort of changing and improvement, in addition to rewarding them for short-term results. There are tangible intermediate results.
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Contributions made by the company towards the cost of fixed assets owned by the State / Central Government are grouped together with similar assets owned by the
company with appropriate disclosure thereof. Expenditure attributable / relating to construction, to the extent not directly identifiable to any specific Plant Unit, is kept under Expenditure During Construction for allocation to Fixed Assets and is grouped under Capital Work-in- Progress. Investments:
Current investments are carried at lower of cost and fair value. Long term investments are carried at cost. Diminution in value, other than temporary,
is provided for. Inventories:
Inventories are valued at lower of cost and net realizable value. The basis of determining cost is: Finished / Semi-finished goods - Weighted Average cost
Raw material, Stores & Spares, Loose Tools - Monthly weighted average cost and those in transit at cost. Obsolete / Surplus / Non-moving inventory are adequately provided for.
Revenue Recognition:
Sales are recognized when all significant risks and rewards of ownership have been
to the buyer. Export incentives under various schemes are recognized as Income on certainty of realisation.
Foreign currency monetary items are recorded at the closing rate. Exchange differences arising on account of settlement / conversion of foreign currency monetary items are recognised as expense or income in the period in which they arise. EMPLOYEE BENEFITS 27
Actuarial gains and losses on defined benefit plans are recognized during the year. DEPRECIATION AND AMORTISATION Depreciation is provided on straight line method (SLM), up to full value of the cost of asset over the specified period derived in accordance with the provisions of Schedule XIV of the Companies Act, 1956, except the following: Assets costing up to Rs.5000/- are fully depreciated in the year of capitalisation. Depreciation on the following categories of assets is provided up to full value of the cost of asset on SLM over the period of their useful life based on the Managements estimate given in brackets. Photo Copiers & Fax Machines, Telecom Equipment (5 years); Cranes, Slag Pot Carriers, Audio & Visual Equipment (10 years); Other Office Equipment, Earth Moving Equipment, Forklift Trucks, Air Conditioners, Refrigerators, Water Coolers, Air Coolers, Freezers (7 years); Cars (6 years); Safety Equipment, Other light vehicles (8 years); Computers [including system Software] (4 years); Coke Ovens & Coal Chemical Plant (15 years). Contributions made by the company towards the cost of fixed assets owned by the State / Central Government are depreciated over the estimated period of their utility or five years, whichever is less. Mining lease rights are amortised over the period of lease. BORROWING COSTS Borrowing costs incurred for obtaining assets which take more than 12 months to get ready for its intended use are capitalised to the respective assets wherever the costs are directly attributable to such assets and in other cases by applying weighted average cost of borrowings to the expenditure on such assets. Other borrowing costs are treated as expense for the year. PRIOR PERIOD ADJUSTMENTS Items of Income / Expenditure which arise in the current period as a result of errors or omissions in the preparation of Financial Statements of one or more prior periods.
Objective The consultant to suggest various policy initiatives, covering the following activities/strategies, at the current level of 3.0 Mt stage, 6.3 Mt, 7.3 Mt and 11 Mt stages of expansion to carry out Marketing function effectively. _ Type of products to be manufactured in various stages of expansion _ Market segmentation _ Product mix in various stages of expansion and optimum product mix _ Increasing share of high end value added steels _ Development of market segments _ Optimisation of market-mix _ Product placement and distribution _ Exports as a strategy _ Product pricing _ Modes of sales _ Optimisation of NSRs _ Credit sales _ Brand building and product promotion activities _ Optimisation of transport-mix i.e. rail, road, container and coastal _ Marketing network _ Organisation structure and competence building _ Empowerment _ Future initiatives Existing Marketing Network Currently, RINL/VSP has a network of 5 regional offices, 23 branch sales offices and 22 stockyards spread across the country. In addition to these outlets, RINL/VSP has appointed Consignment Sales Agents (CSAs) at strategic locations, where RINL does not have a branch sales
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office. Currently, RINL/VSP has appointed 8 CSAs. These are Vizag, Kadapa, Damtal, Jamshedpur, Guwahati, Agartala, Jabalpur and Bhopal. RINL/VSP has appointed about 150 Retailers. These Retailers purchase and sell RINls products. District Level Dealers (DLDs) and Rural Dealers are also registered by RINL/VSP to take care of demand in semi-urban and rural areas. Currently, RINL/VSP has 78 DLDs and 177 Rural dealers. In due course, to take care of expansion requirements, the Distribution Network is proposed to be enhanced.
Present pattern of sales _ Sales categorization Actual users, project customers, small scale industry corporations, retailers, district level dealers and rural dealers : Product-wise percentages are specified for each category. _ Mode of sales MOUs with actual users, project customers, retailers, sales to small scale industry corporations i.e. NSIC/SSIs as per the allocation of GOI, eauctions and spot sales.
_ Pricing
The High Power Committee consisting of Functional Directors fixes the price bands of various products taking inputs from the Pricing Section. As per these price bands, the prices are fixed every month.
educational qualification of a lower level there is scope in the plant as workers. The career planning process at steel plant is however an impressive one as the employees can choose to uplift their career by possessing additional qualification with the help of the organization and qualifying in the internal entrance exams conducted every 7years. It is a platform for developing skill and knowledge where merit is recognized and rewarded. There are various policies for the support and growth of the employees
The system indicates smooth change of the plant over the shifts and uninterrupted pace of
the operation of the plant during shifts.
Employees are paid gratuity in terms of the payment of gratuity Act 1972 and as amended
from time to time. Over and above the gratuity Act, in case of death of an employee before the qualifying service of five years is paid.
Incentive scheme for acquiring additional qualifications and promoting small family norms.
There are also various other schemes like mediclaim insurance policy for retired employees,
awards for achievements, death/accident funds,etc.
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Training Measures
The needs of induction training, skill up gradation, unit training, computer related training,
refresher training, foreign training, faculty development etc are attended by training and development centre while management development and attitudinal development are taken care at the centre for HRD.
The training in specialized areas like safety, fire prevention, occupational health, etc is also
taken up by departments specializing in respective fields.
Employees are sent to other steel plants on short duration tours to find solutions to the
various issues facing the company.
Employees are also sent to suppliers manufacturing units/training institutes to get specific
training in identified areas.
The T&D department identifies the development needs of employees on regular basis and
provide necessary training and continually monitors effectiveness of the training.
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HRD measures
HRD POLICY
focu s
Identifying competence needs Providing training inputs Monitoring training effectiveness Creating learning environment Facilitating Self Development, innovativeness & self expression
RINL believes that the employees are its assets and strives to realize their potential in full for mutual advantage. The human resource development involves development of the employee as a whole.
In-house Training Programs. Nominations to external Training Programs. Organisation Research, Employees satisfaction surveys and voice of employees Index Organisation development Membership with professional bodies Performance Appraisal for executives Human Resource Information System In- plant training for management students Lectures by eminent personalities Corporate presentations Interactions with professionals,academicians and consultants Knowledge management Initiatives in Six Sigma Emancipation of women through WIPS, Women Development Programs Thrust on Samalochana Pursuit of Business Excellence Model Maintaining harmonious industrial relations where entire workforce works as a well knit
team for the progress of the company.
Statutory welfare measures like canteen facilities, baby crche, first aid facilities, water
coolers, leave, maternity leave, gratuity and workmens compensation.
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Non- Statutory welfare measures like facilities for education, scholarships, medical
facilities, housing facilities, work dress, vehicle advances to employees, house building advances and various other motivational schemes.
Employees of the organization are greatest and most valuable resources. Whole on the one hand, HRD should appropriately harness the employee potential for the attainment of the company objectives, the company on the other, as its corporate responsibility, should create an enabling climate where in human talent gets the best opportunity for self expression, all round development and fulfillment. People are more than mere resources and therefore it will be the companys sincere endeavor to treat people with all the respect and that is warranted when employees are seen as more mere instrumentalities.
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HRD as a management function will be given a place of strategic priority, along with function like production, maintenance, materials on finance in the overall scheme of management action in the company. HRD does not refer to training alone, nor it is just a new name for training. In RINL/VSP HRD refers to creative and innovative initiatives in several
management functions for the development and growth of employees HRD should eventually be a core philosophy of all management actions and should not remain merely a departmental / sectional activity. All functional and divisional heads responsible for various activities of the company will imbibe the HRD spirit and suitability integrate HRD into their plans, decisions and actions
Manpower Planning
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31-3-2001 31-3-2002 31-3-2003 31-3-2004 31-3-2005 31-3-2006 31-3-2007 31-3-2008 31-3-2009 31-3-2010
4027 4203 4308 4533 4512 4629 4674 4967 5218 5263
13104 12823 12586 12222 12101 11932 11727 11449 12007 12567
Engineering -14.34% Diploma Grad/PG Literates ITI -10.33% -11.65% -24.33% -39.35%
Engineering Diploma Graduation/PG ITI Literates
Works
Projects
344 51
Mines
109 257
Others
1492 956
Total
5207 12622
3262 11358
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So, the total number of employees as per the recent statistics are 17829.
Works Projects
-82.03% -2.10%
Mines
Others
-2.14%
-13.72%
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The appraisal process happens at the end of every year where the performance of the employees is evaluated on the basis of the MBOs given to them. The grading is done on the scale of 1-5. People who get 1 are rewarded where as people with a score of 4 are given a warning. But people who score 5 are asked to leave the organization.
financial strengths and weaknesses. Thus, financial analysis is the starting point for making plans, before using any sophisticated forecasting and planning procedures. Understanding the past is a prerequisite for anticipating the future.
BALANCE SHEET AS AT 31st March 2009 Schedule No. SOURCES OF FUNDS SHAREHOLDERS' FUNDS Reserves and Surplus LOAN FUNDS Secured loans Unsecured loans Deferred Tax Liability ( Net ) Total APPLICATION OF FUNDS FIXED ASSETS Gross block Less: Depreciation Net block Held for disposal Capital work-in-progress INVESTMENTS CURRENT ASSETS, LOANS & ADVANCES Inventories Sundry debtors Cash & Bank balances Other Current assets Loans & Advances LESS: CURRENT LIABILITIES & PROVISIONS Liabilities Provisions 1 2 7 827.32 4 592.59 7 827.32 3 653.72 As at 31st March, 2009 Rs Crs As at 31st March, 2008
3 4
6 7 9 10 11 12 13 14
9 005.99 7 749.74 1 256.25 0.05 4 617.81 5 874.11 0.05 3 215.28 191.27 6 624.17 258.91 1 569.69 11 859.32 2 560.79 1 620.53 4 181.32
8 900.83 7 516.19 1 384.64 0.04 2 087.19 3 471.87 0.05 1 761.15 93.41 7 699.11 292.43 1 958.49 11 804.59 1 610.15 1 581.47 3 191.62
15 16
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Net Current assets Total Accounting Policies & Notes to Accounts Schedules 1 to 29 annexed form part of the Accounts
7 678.00 13 552.16 29
8 612.97 12 084.89
As per our report of even date For RAO & KUMAR Chartered Accountants
(K.S. Shankar) Director (Finance) (CA Anirban Pal) Partner M.No: 214919
Place : Date :
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PROFIT & LOSS ACCOUNT FOR THE YEAR ENDING 31st March 2009 Schedule No. INCOME Gross Sales Less: Excise duty recovered on sales Net Sales Internal consumption Interest earned Other revenue Total EXPENDITURE Raw materials consumed Depletion / (Accretion) to Stock of Semi-finished/Finished goods Employees' remuneration & benefits Stores & spares consumed Power & fuel Repairs & maintenance Freight outward Other expenses & provisions Interest Depreciation Wealth tax Less: Inter account adjustments-raw material mining cost Net expenditure Profit for the year Prior period adjustments- Net credit Profit Before Tax Provision for Taxation Current Tax Fringe Benefit Tax Earlier years adjustments Deferred Tax Profit After Tax Balance of Profit brought forward from previous year Amount available for appropriation APPROPRIATIONS Proposed Dividend Tax on Proposed Dividend Reserve for Redeeming Preference Share Capital Balance carried to Balance Sheet Total appropriations Basic and Diluted Earnings Per Share (in Rupees)(Face Value Rs. 1000 per share) 29 18 For the year ended 31st March, 2009 10 410.63 1 282.25 9 128.38 114.10 787.21 75.02 10104.71 Rs Crs For the year ended 31st March, 2008 10 433.07 1 344.70 9 088.37 88.46 724.64 91.27 9 992.74 4 280.22 (343.17) 1 030.72 364.06 258.81 125.79 306.96 509.93 31.57 471.55 0.48 7 036.92 39.15 6 997.77 2 994.97 0.39 2 995.36 1 188.13 4.43 (11.77) (128.17) 1 942.74 1 709.81 3 652.55
19 20
21 22 23 24 25 26 27
28
5 896.25 (916.65) 1 156.68 501.23 340.31 149.81 286.53 377.12 88.14 240.46 0.89 8 120.77 38.06 8 082.71 2 022.00 4.59 2 026.59 746.38 4.66 (21.39) (38.63) 1 335.57 3 652.55 4 988.12
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BALANCE SHEET AS AT 31st MARCH 2010 Schedule No. SOURCES OF FUNDS SHAREHOLDERS' FUNDS Share Capital Reserves and Surplus LOAN FUNDS Secured loans Unsecured loans Deferred Tax Liability ( Net ) Total APPLICATION OF FUNDS FIXED ASSETS Gross block Less: Depreciation Net block Held for disposal Capital work-in-progress INVESTMENTS CURRENT ASSETS, LOANS & ADVANCES Inventories Sundry debtors Cash & Bank balances Other Current assets Loans & Advances LESS: CURRENT LIABILITIES & PROVISIONS Liabilities Provisions Net Current assets Total Significant Accounting Policies & Notes to Accounts Schedules 1 to 28 annexed form part of the Accounts 1 2 7 827.32 5 057.68 7 827.32 4 592.59 As at 31st March, 2010 Rs Crs As at 31st March, 2009
3 4
6 7 9 10 11 12 13 14
9 473.90 8 008.55 1 465.35 0.05 7 506.90 8 972.30 0.25 2 451.52 181.18 5 415.54 137.40 1 365.02 9 550.66 2 871.95 1 435.89 4 307.84
8 971.80 7 749.74 1 222.06 0.05 4 652.00 5 874.11 0.05 3 215.28 191.27 6 624.17 258.91 1 569.69 11 859.32 2 560.79 1 620.53 4 181.32
15 16
5 242.82 14 215.37
7 678.00 13 552.16
28
As per our report of even date For B.V. RAO & CO Chartered Accountants Regn. No (F.R.N) 003118S (P. Madhusudan) Director (Finance) (CA A.R. UNNI) Partner M.No: 07447
Place : Date :
Visakhapatnam
Th
24 June 2010
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Rashtriya Ispat Nigam Limited Annual Accounts 2009-10 PROFIT & LOSS ACCOUNT FOR THE YEAR ENDING 31st March 2010 Schedule No. INCOME Gross Sales Less: Excise duty recovered on sales Net Sales Internal consumption Interest earned Other revenue Total EXPENDITURE Raw materials consumed Depletion / (Accretion) to Stock of Semi-finished/Finished goods Employees' remuneration & benefits Stores & spares consumed Power & fuel Repairs & maintenance Freight outward Other expenses & provisions Interest & Finance Charges Depreciation Wealth tax Less: Inter account adjustments-raw material mining cost Net expenditure Profit for the year Prior period adjustments- Net credit Profit Before Tax Provision for Taxation Current Tax Fringe Benefit Tax Earlier years adjustments Deferred Tax Profit After Tax Balance of Profit brought forward from previous year Amount available for appropriation APPROPRIATIONS Interim Dividend Proposed Dividend (Final) Tax on Interim Dividend Tax on Proposed Dividend (Final) Reserve for Redeeming Preference Share Capital Balance carried to Balance Sheet Total appropriations Basic and Diluted Earnings Per Share (in Rupees)(Face Value Rs. 1000 per share) 17 For the year ended 31st March, 2010 10 634.63 825.48 9 809.15 121.07 534.71 101.75 10566.68 Rs Crs For the year ended 31st March, 2009 10 410.63 1 282.25 9 128.38 114.10 787.21 22.36 10052.05
18 19
20 21 22 23 24 25 26
27
5 535.11 415.35 1 399.74 466.48 408.27 142.13 312.65 334.63 77.55 277.17 0.45 9 369.53 43.26 9 326.27 1 240.41 7.24 1 247.65 463.08 (0.05) 14.62 (26.67) 796.67 1 653.83 2 450.50
5 896.25 (916.65) 1 157.35 501.23 340.31 149.81 286.53 324.46 87.47 240.46 0.89 8 068.11 38.06 8 030.05 2 022.00 4.59 2 026.59 746.38 4.66 (21.39) (38.63) 1 335.57 3 652.55 4 988.12
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BALANCE SHEET AS AT 31st MARCH 2011 Schedule No. SOURCES OF FUNDS SHAREHOLDERS' FUNDS Share Capital Reserves and Surplus LOAN FUNDS Secured loans Unsecured loans Deferred Tax Liability ( Net ) Total APPLICATION OF FUNDS FIXED ASSETS Gross block Less: Depreciation Net block Held for disposal Capital work-in-progress INVESTMENTS CURRENT ASSETS, LOANS & ADVANCES Inventories Sundry debtors Cash & Bank balances Other Current assets Loans & Advances LESS: CURRENT LIABILITIES & PROVISIONS Liabilities Provisions Net Current assets Total Significant Accounting Policies & Notes to Accounts Schedules 1 to 28 annexed form part of the Accounts 1 2 7 827.32 5 401.90 7 827.32 5 057.68 As at 31st March, 2011 ` Crs As at 31st March, 2010
3 4
6 7 9 10 11 12 13 14
9 794.60 8 264.71 1 529.89 0.03 9 536.71 11 066.63 361.60 3 254.71 330.61 1 998.89 75.96 1 965.04 7 625.21 3 271.43 1 336.06 4 607.49 3 017.72 14 445.95
9 473.90 8 008.55 1 465.35 0.05 7 506.90 8 972.30 0.25 2 451.52 181.18 5 415.54 137.40 1 365.02 9 550.66 2 871.95 1 435.89 4 307.84 5 242.82 14 215.37
15 16
28
As per our report of even date For B.V. RAO & CO Chartered Accountants Regn. No (F.R.N) 003118S (P. Madhusudan) Director (Finance) (CA B.V. Rao) Partner M.No: 019138
Place : Date :
45
Rashtriya Ispat Nigam Limited Annual Accounts 2010-11 PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31st March 2011 Schedule No. INCOME Gross Sales Less: Excise duty recovered on sales Net Sales Internal consumption Interest earned Other revenue Total EXPENDITURE Raw materials consumed Depletion / (Accretion) to Stock of Semi-finished/Finished goods Employees' remuneration & benefits Stores & spares consumed Power & fuel Repairs & maintenance Freight outward Other expenses & provisions Interest & Finance Charges Depreciation Wealth tax Less: Inter account adjustments-raw material mining cost Net expenditure Profit for the year Prior period adjustments- Net credit Profit Before Tax Provision for Taxation Current Tax Fringe Benefit Tax Earlier years adjustments Deferred Tax Profit After Tax Balance of Profit brought forward from previous year Amount available for appropriation APPROPRIATIONS Interim Dividend Proposed Dividend (Final) Tax on Interim Dividend Tax on Proposed Dividend (Final) Balance carried to Balance Sheet Total appropriations Basic and Diluted Earnings Per Share (in Rupees)(Face Value ` 1000 per share) 17 For the year ended 31st March, 2011 11 516.99 1 045.81 10 471.18 87.70 347.54 90.32 10 996.74 ` Crs For the year ended 31st March, 2010 10 634.63 825.48 9 809.15 121.07 534.71 81.03 10 545.96
18 19
20 21 22 23 24 25 26
27
7 188.36 (532.32) 1 272.95 471.22 425.03 145.18 300.72 397.02 164.55 265.94 0.49 10 099.14 49.10 10 050.04 946.70 34.96 981.66 369.10 0.00 (28.08) (17.85) 658.49 2 117.83 2 776.32
5 535.11 415.35 1 399.74 466.48 408.27 142.13 312.65 313.91 77.55 277.17 0.45 9 348.81 43.26 9 305.55 1 240.41 7.24 1 247.65 463.08 (0.05) 14.62 (26.67) 796.67 1 653.83 2 450.50
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In line with the vision in National Steel Policy envisaging 110 MT steel by 2019-20, Vizag Steel is also planning to expand its capacity. Considering the buoyancy in domestic steel market for long products, which is the product mix of VSP and the high acceptance of VSPs brand image in the market, an expansion plan has been proposed. The expansion plan of doubling the capacity of the plant has been cleared in a record time of 10 months and the entire Vizag Steel collective is totally geared up for completing the expansion in the stipulated 36 months. The consultant is in place and the funds are in hand. The expansion should give a strong footing for VSPs growth. The expansion programme is progressing well as per plans and the present focus is on creating an enabling infrastructure such as roads, water, power etc., for smooth execution. Also thrust is on finalization of the specifications and placement of orders. To leverage from our brand leadership in the long segment category, expansion has been cast to enhance volumes in the long product category. A seamless tube mill is also been envisaged to reduce the dependence on imports in view of the huge requirement by the oil and gas sector. The envisaged expansion of the Plants capacity by 2008-09 is as below: 1. Hot Metal - 6.50 Mtpa 2. Liquid Steel - 6.30 Mtpa
3. Saleable Steel - 5.72 Mtpa
The following major facilities are proposed to be added under expansion stage. 1. Blast Furnace - 3800 M3- 1 No. 2. Sinter Plant a. Sinter Machine No.3 400 M2- 1 No. 3. Steel Melt Shop No.2: a. LD Converters 150 M3Cap - 2 Nos. b. 6 Strand Billet Casters - 2 Nos. c. 6 Strand Round Caster - 1 No.
d. Secondary Steel Making Facilities
4. Rolling Mills :
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a. Wire Rod Mill No.2 - 600,000 TPY b. Special Bar Mill - 750,000 TPY c. Structural Mill - 700,000 TPY d. Seamless Tube Plant - 300,000 TPY VSP will enhance the volume of production in long products segment in view of Brand image. In order to diversify the product mix and help reduce the dependence on import of pipes in oil and gas sector, a seamless pipe mill is envisaged. 1. Wire Rod (Plain) - 5.5 mm to 20 mm in coils 2. Special Bars (Plain) - 16 mm to 40 mm in coils and straight lengths 3. Structurals 4. Seamless pipes - 139 mm to 365 mm 5. Semis - Blooms , Billets The Project is estimated to cost Rs.8,259 Crores (Base IV Qr.2004).
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Disadvantages:
Flow of command is time consuming which can lead to delay in decision making. Authority to take the decision is at a very high level.
49
The production, commercial and financial performance has been improving with the passage of years. The financial analysis of VSP by the use of various techniques i.e. Ratio, Cash flow analysis shows that:
1)
2) 3) 4) 5) 6) 7)
8)
The following suggestions will improve the financial position of the VSP.
PRODUCTION
1) Need for continuous up gradation of technology for improving the processes. 2) Effort should be made at cost savings particularly in spares and energy consumption. 3) Using the natural gas reserves of KG basin, Hot metal production capacity can be enhanced with the present BF facility with negligible investment.
FINANCE
1) Improving financial leverage ratio for better returns.
PERSONNEL:
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1)
Rationalization of existing man-power with effective training for future expansion of the plant.
2)
3) 4)
MARKETING
1)
Continuously monitoring the indigenous sale, export sale ratio to capture the best of markets.
2) 3)
Increasing the net realization by selling in the most profitable region. Identifying new markets and new application of the companys product.
4)
Improving
realization
by identifying
value
added
products
and
providing feedback to production department. 5) Value added products (high value items) are to be produced instead of selling semi-finished products in order to increase profit margin.
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