essar shipping project | Energy And Resource | Business

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SUMMER PROJECT REPORT ON
VADINAR OIL TERMINAL LIMITED ( JAMNAGAR )
IN PARTIALY FULFILMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF MASTER of BUSINESS ADMINISTRATION

SUBMITTED TO :
GUJARAT TECHNOLOGICAL UNIVERSITY

SOM-LALIT INSTITUTE OF BUSINESS MANAGMENT, NAVRANGPURA, AHMEDABAD.

PREPARED BY :
VIRAT K KOTHARI BATCH YEAR : MBA –I (2009-2011) ROLL NO : 26

GUIDED BY :
MR.ANAND THITE

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DECLARATION
I Virat Kothari, a student of Master of Business Administration, Som lalit Institute of Business Management, Ahmedabad, hereby declare that the summer training project prepared on VOTL(ESPLL), is the outcome of my own work and the same has not been submitted to any other university for acquiring any professional degree.

Signature :

Date :

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ACKNOWLEDGEMENT
I would like to thank my project guide Mr. ANAND THITE (Deputy General Manager – F & A) for his kind support and invaluable guidance in term of theoretical as well as practical knowledge and experience. His willingness to motivate us and showing us some examples that related to the topic of our project, has contributed tremendously to my project. Along with the project work, his real life examples and motivational talks have given me a new way to see the world in a different way. A successful project can never be prepared by an individual efforts but it also needs a guardianship and full support of some people who actively participated in guiding and completing the project. I would also like to thank Mr. HARDIK VAIDYA (Assistant Manager) whose guidance and co-operation have helped me in completing the project successfully. I would also thankful to Mr. BHARAT KAKKAD (Joint General Manager ) who has given me opportunity to enhance myself and my potentials for the purpose of summer internship project. I would also like to thank all my colleagues who directly or indirectly supported me for betterments and improvements. I would also like to thank SOM-LALIT INSTITUTE OF BUSINESS MANAGEMENT for Higher Education for permitting me to do my summer internship in VADINAR OIL TERMINAL Ltd.(ESPLL) and all faculties who were there with me to provide guidance and support. All these have helped me to make this project successful. This project has given me an exposure in terms of great learning, knowledge and practical experience. Knowledge in itself is a continuous process. At this moment, of this substantial enhancement I rarely find enough words to express our gratitude towards those who were constantly involved with me until successfully completion of my project.

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TABLE OF CONTENT
Sr No. 1 2 3 4 5 6 7 8 Executive Summery Beginning of Essar Group Essar Group – An Overview Companies under Essar Group Some Facts of Essar Group Social activities at Vadinar Vadinar Oil Terminal Ltd. Operation Project Operation At VOTL Gantry Capacity Turn Around Time Problem Definition & Data collection MCO NE Gate Vehicle Tracking System Time Office Tank Farm Area Procedure Truck Loading System Out Gate Total TAT Recommendation Cost – Benefit Analysis Financial Project Meaning of Ratio Analysis Financial Statements Ratios Of VOTL 11 12 Conclusion & Suggestion Bibliography 55 56 58 71 72 Title Page No. 1 2 4 6 17 21 22 23 24 25 28 29 30 32 36 37 38 41 46 47 48 51 52 54

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Executive Summary:
A Summer Internship has been an outstanding experience from ’HOW to WOW‘. In Summer Internship, first of all, we have been given Health-Safety-FireEnvironment Workshop‘ to teach us that how we have to keep our self safe in the refinery. Then after, we have studied the whole activities going on in different – different departments. I have made a project on General Management including Two projects of operation and Finance. In operation project, we have been given a topic of ―MIS of dispatch areas. It is all about the optimization of time and resources. Here, we have to analyze the whole procedure of truck loading at each office / stage and then we have to put our efforts to minimize the total time taken by each TT and in this way, we have to reduce the average turnaround time of whole process. To make this system more efficient and effective, we have, first, analyzed the existing system of truck loading at Essar. In finance project, we have been given a topic of ―Ratio analysis. In this project, first of all annual reports of Essar has been analyzed fully. The main objective of doing this project is to see the current situation and try to make it more efficient and effective.

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Beginning of Essar Group:
The Essar Group was founded in 1969 by brothers Shri Shashi Ruia and Shri Ravi Ruia. The Ruia family’s origins are in Rajasthan. Sometime in the 19th century, it moved to Mumbai and set up its own business. In 1956, Shri Nandkishore Ruia, father to Shri Shashi and Ravi Ruia, moved to Chennai, capital of the south Indian state of Tamil nadu, to begin independent business activities. He mentored his two sons in the intricacies of business. When Shri Nandkishore Ruia passed away in 1969, the brothers laid the foundation of the Group. The Essar Group began its operations with the construction of an outer breakwater in Chennai port. It quickly moved to capitalize on every emerging business opportunity, becoming India’s first private company to buy a tanker in 1976. The Group also invested in a diverse shipping fleet and oil rigs, when the Government of India opened up the shipping and drilling businesses to private players in the 1980s. Through the 1990s, with the gradual liberalization of the Indian economy, Essar seized every opportunity that came its way. It diversified its shipping fleet, started oil & gas exploration and production, laid the foundation of its oil refinery at Vadinar, Gujarat, and set up a power plant near the steel complex in Hazira. The Construction business helped the Group build most of its business assets. Essar also entered the GSM telephony business, establishing India’s first mobile phone service in Delhi (branded Essar Cell phone) with Swiss PTT as the joint venture partner. The 21st century for the Essar Group has been all about consolidating and growing the businesses, with M & As, new revenue streams and strategic geographical expansion. The name of the company ESSAR‘ is getting from the first letter of the two brothers SHASHI‘ and RAVI‘ S‘ as ESS‘ and R‘ as AR‘ thus the combination of them make ―ESSAR.

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Reaching Millions of Lives: For decades, they have quietly reached the lives of millions of people with the steel to build cars, the oil to fuel factories, the power to light up thousands of lives and the pipelines to bring drinking water to remote villages. Today, they have come closer by connecting customers with their cellular phone services and talking to thousands of people through their call centers, a countrywide chain of fuel outlets and marketing steel at the retail level. Essar Group is a multinational conglomerate in the sector of oil, steel, energy, power, communication, shipping ports and logistics. Essar began as a construction company in 1969 and diversified into manufacturing, services and retail.

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ESSAR GROUP - AN OVERVIEW
Essar is one of India’s largest corporate houses with leadership positions in the high-growth infrastructure sectors of Steel, Energy, Power, Communications, Shipping & Logistics, and Construction. It employs 24,000 people in 50 locations worldwide. The Group’s revenue guidance for the year march 2008 is over USD 4.5 billion. All the groups’ investments have been consolidated under Essar Global Ltd., along with its six sect oral holding companies: Essar Steel Holdings Limited, Essar Energy Holdings Limited, Essar Power Holdings Limited, Essar Communications Holdings Limited, Essar Shipping &Logistics Limited and Essar Constructions. The group’s enterprise value is approximately US$ 18 billion (Rs.77500 Crores).
Essar Group
Steel Energy Power Shipping Ports & Logistics Communications Projects

Essar Steel Ltd 4.6 MTPA integrated steel plant Essar Steel (Hazira) 4 MTPA integrated steel plant (under implementation) Essar Steel Orissa 6 MTPA pellet plant (under implementation) Algoma Steel, Canada 4.0 MTPA integrated steel plant Minnesota Steel 6 MTPA pellet plant (planned) 1.5 billion tonne iron ore reserves PT Essar Indonesia 0.4 MTPA cold rolling complex

Essar Oil 10.5 MTPA refinery complex 1,500 retail outlets Refinery expansion to 34 MTPA Exploration & Production Assets E&P rights in valuable oil & gas blocks in India and abroad

Essar Power / Bhander Power 1015 MW combined cycle Vadinar Power 125 MW co-generation; expanding to 1250 MW Essar Power MP 1200 MW coal based (under implementation) Essar Power Gujarat 1200 MW coal based (under implementation) Essar Power Jharkhand 1200 MW coal based (under implementation)

Essar Shipping Fleet of 25 vessels, DWT of 1.49 mn Vadinar Oil Terminal Terminal facility of 32 MTPA – Liquid Cargo Bulk Terminal Dry bulk port facilities Essar Oilfields A drilling company with 13 rigs Essar Logistics Owns and operates transshipment assets

Vodafone Essar 55 million subscribers Essar Telecom Infrastructure 5,000 Telecom Sites by end 2008; 20,000 by 2010 The MobileStore Chain of 2,500 retail outlets by 2010 Aegis - BPO 30,000 people in offices in the Philippines, Costa Rica, USA and India BPL Mobile More than 1.8 million subscribers

Essar Construction - Engineering - Fabrication - Construction Fully geared to execute turnkey EPC jobs in India and overseas Essar Engineering Services Ltd Detailed design & engineering Global Supplies (UAE) FZE Global procurement company Heavy Engineering Services Project Management Consultancy Asia’s largest equipment bank

ESSAR GROUP PHILOSOPHY “The success of the Essar group is dependent on the development and realization of the potential of each one of us. The mindset of yesterday’s managers was to accept compromise and keep things neat and orderly which leads to complacency. We should no be afraid to go against today’s currents because we know that tomorrow is ours. We must work on a vision of what business can become.” - Shashi Ruia

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ESSAR VISION The vision of Essar Group can be defined by the seven E’s: We will be a respected global entrepreneur, through the power of Positive Action. EFFECTIVENESS: doing the right thing at the right time EFFICIENCY: doing things the right way by conserving resources, being cost effective and simple ENTREPRENEURSHIP: creating and leveraging opportunities, taking initiative and innovations EMPOWERMENT: through self esteem, self respect, self worth and trust EDUCATION: learning, communicating and sharing information and knowledge ETHICS: having transparent business operations ENVIRONMENTAL HARMONY: adding value to society and creating sustainable development ESSAR MISSION We are committed to innovative growth, through our personal passion, reinforced by a professional mindset, creating value for all those we touch.

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Some of the companies run under the Essar Group are: Essar Oil

Essar Oil has a 13.5 Million Metric Tones Per annum (MMTPA) refinery in Jamnagar, west coast of India and over 1,350 Essar oil branded retail outlets across India. Essar is planning to increase its capacity to 34 MMTPA and open 3,000 outlets countrywide. Essar‘s global portfolio of onshore and offshore oil and gas blocks with about 70,000 sq.km. Is available for exploration. Essar has over 2,80,000 Barrels Per day of crude refining capacity that is being expanded to 6,80,000 barrels Per Day, with a goal to reach a global capacity of 1 million Barrels Per Day. Essar has 50% stake in Kenya Petroleum Refineries Ltd., which operates a refinery in Mombasa, Kenya, With a capacity of 80,000 Barrels Per Day. Essar‘s Exploration & Production business has participating interests in several hydrocarbon blocks for exploration & production of oil and gas. This includes: 1. The Ratna and R-series blocks on Bombay High.

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2. An E&P block in Mehsana, Gujarat, which has currently started commercial production. 3. Coal Bed Methane block at Raniganj in West Bengal. 4. Two E&P blocks in Assam. 5. Essar has an overseas E&P assets include three onshore oil and gas blocks in Madagascar, Africa and one offshore block each in Vietnam and Nigeria. A refinery in Jamnagar has the capability to produce petrol and diesel suitable for use in India as well as advanced international markets. It also produces LPG, Naphtha, light diesel oil, aviation turbine fuel and kerosene. The refinery has been designed to handle a diverse range of crude – from sweet to sour and light to heavy. It is supported by an end-toend infrastructure set up including SBM (Single Buoy Mooring), crude oil tankage, water intake facilities, a captive power plant(currently 125 MV, being expanded to 1,200 MV)product jetty and dispatch facilities by road, rail and sea. A refinery is strategically located in Jamnagar, Vadinar coast, a natural all-weather; deep draft port that can accommodate very large crude carries. Vadinar also receives 70% of India‘s crude imports.

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Essar Steel

Essar is a fully integrated flat carbon steel manufacturer – from iron ore to ready-tomarket products with a current capacity of 14 million tones per annum (MTPA) capacity. With our aggressive expansion plans in India, as well as in Asia and America, we aim to achieve a capacity of 20 to 25 MTPA. Its steel products have wide acceptance in sectors like automotive, white goods, construction, engineering and shipbuilding.

Essar Steel is one of India's largest exporters of flat products, exporting to the highly demanding US and European markets, and to the growing markets of South East Asia and the Middle East. A number of major client companies have approved Essar steel for their use including Caterpillar, Hyundai, Swaraj Mazda, the Konkan Railway, and Maruti Suzuki.

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Essar Power

Essar power is India‘s first new generation independent power plant set up as soon as the power sector was opened up to private sector. Essar power has India‘s first multi-fuel power plant, with the lowest manpower to megawatt ratio and one of the lowest capital per mega watt in India. Essar Power has two gas-based plants, of 500MW and 515MW capacities, and one liquid fuel-based 32MW power plant in Hazira, a 120MW co-generation plant in Vadinar and a 25MW coal-based plant in Visakhapatnam. Work is currently under way to expand the current generation capacity of 1,200MW to 6,000MW by 2012, with a target to reach 10,000 MW in the near future. The company will set up three coal-based plants of 1,200MW each in Gujarat, Madhya Pradesh and Jharkhand, aggregating 3,600MW. An additional 1,200MW (co-generation plant of equivalent capacity) is also under development in Vadinar to supply power and steam to the expanded refinery.

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As the first private company with a license to enter the transmission and power trading segments, Essar is now a fully integrated, end-to-end player in the power sector. By using the latest technology and equipment, Essar generates and supplies power at very competitive price points. Essar currently has complete fuel linkages secured for all projects under execution. Essar power is exploring opportunities for new projects based on thermal, wind and hydro energy. The investments made towards the projects under execution is over USD4 billion. Work is currently under way to increase generation capacity to 6000MW. The company will set up 3 coal based plant of 1200 MW each in Gujarat, Madhya Pradesh and Jharkhand, aggregating 3600 MW. An additional 1200 MW (co-generation plant of equivalent capacity) is also under development in Vadinar to supply power and steam to the expanded refinery. With a license to enter the transmission, distribution and power training segments, Essar Power is now a fully integrated, end-to-end player in the power sector. By using the latest technology and equipment, Essar power can generate and supply power at very competitive price points. The also has the capability to generate power projects for other companies. Essar Power is exploring opportunity for new projects based on thermal, wind and hydro energy. It is also committed to reducing emissions form its plants and earning carbon credits. The 500 MW combined cycle power plant at Hazira is eligible for Certified Emission Reductions (CERs) under the Kyoto Protocol‘s Clean Development Mechanism (CDM).

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ESSAR TELECOME

Vodafone-Essar is a joint venture of Essar Communication Holdings Ltd and the UKbased Vodafone Group. It is one of India‘s largest cellular service companies. Essar Telecom Infrastructure is one of the largest independent telecom infrastructure service provisioning companies in the country. It builds telecom tower infrastructure and shares it with several telecom operators in India. It has a pan-India presence in telecom tower infrastructure with more than 4,500 telecom towers operational. Essar has a 14 per cent stake in Indus Towers, India‘s largest tower company, which has over 100,000 towers. Essar Communications Holdings Limited acquired a 49 per cent stake in Econet Wireless International Limited by subscribing to fresh capital in the company. Essar and Econet Wireless Kenya have launched 'yu' — Kenya‘s third mobile cellular network. This is a GSM-based mobile services network in Kenya with close to a million subscribers. Essar has launched India‘s first national chain of multi-service outlets in the telecom retail space. The Mobile Store ltd currently runs over 1300 ―The Mobile Store‖ outlets. Over 2500 Stores outlets are expected across 650 cities. Expected across 650 cities.

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Essar Construction

Essar Constructions/Projects is a 4000 people strong global engineering procurement and construction company headquartered in Dubai. It has offices in India, China and the Czech Republic. It provides complete construction solution under one roof. It operates through five main businesses. 1. Essar Construction: This division has over four decades of experience in executing projects involving industrial plants, civil and irrigation projects, lying of onshore pipelines, and highway and expressways. With a pipeline division certified at ISO 9001, it has developed capabilities to undertake turnkey projects. 2. Essar Offshore Sub Sea: The marine construction expertise within Essar oil, Essar shipping, Essar project and Essar construction has now demerge in to a single entity namely Essar Offshore Sub sea Ltd (EOSSL). The business provides Engineering Procurement, Construction and Installation (EPCI) services in this sector in domestic as well as overseas markets. In the high-growth oil & gas sector, EOSSL provides EPC service for offshore logistics support and marine construction projects. 3. Global Supplies: The global supplies team specializes in procurement, with a presence in India, Chine, Middle East and Europe. It has excellent relationships with vendors across the globe, giving it the ability to procure materials in a timely manner and at a competitive price.

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4. Heavy Engineering Services: Has modern facilities for manufacturing pressure vessels, reactors, vacuum vessels, cranes etc. the business is strategically located in the waterfront at Hazira on the west coast of India. 5. Project management Consultants: An independent team of project management consultants ensures compliance to processes in project execution. The team is also pitching for third party projects. Essar projects also own a vast bank of sophisticated construction equipment used in large projects.

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Essar BPO (Agies Ind Ltd.)

This has led Essar to emerge as one of the biggest corporate group not only in India, but gained huge reputation and image internationally. Essar group has played a major role not only in present but also in past. Their contribution to the nation is a significant one. On I.T. Front Essar has incorporated Aegis Communication Group which provides multi-channel customer relationship management, including database management, analytical services and market intelligence to progressive companies.

Aegis has a strong team of 13000 Employees and provides services to blue-chip and multinational companies through a network of nine client‘s services in US and ten in India.

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Essar Shipping ports and logistics

Essar Shipping Ports & Logistics Ltd is an end-to-end logistics provider with sea and surface transportation services, oilfield drilling services, dry and liquid terminals, tankage and associated pipelines. It provides supply chain Management services to client in oil and gas, steel and power generation industries. The sea transportation business provides transportation management services for a crud oil and petroleum products, and dry bulk cargo to global energy, steel and power industries. With an experience of more than 220 ship years, it owns a diverse fleet of 26 vessels, which is being expanded to 38 vessels. Essar‘s integrated business model provides opportunities to cater to the complete supply chain management services to clients in oil and gas, steel and power generation industries. We are one of India‘s largest operators of ports and, building a cargo handling capacity (both dry and bulk cargo) of over 150 million tons. Essar ports and terminals business operates a crude oil and petroleum products terminal at Vadinar and includes the construction of a dry bulk port at Hazira and a coal jetty at Salaya, all in the state of Gujarat. The Vadinar terminal is an all-weather, deep-draft port, which provides crude oil and petroleum products storage, handling and terminal services. The port has a Single Point

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Mooring system capable of handling crude capacity of up to 27mmtpa, and marine facility for export of petroleum products of up to 6.5mmtpa. The dry bulk port being constructed at Hazira involves setting up a 30mtpa allweather, deep-draft port and jetty facility. Essar's logistics business provides end-to-end logistics services – from ships to ports, lighterage services, intra-plant logistics and dispatch of finished products. We own trans-shipment assets to provide lighterage support services, and onshore and offshore logistics services. We also operate a fleet of 4,200 trucks (38 of which we own) to provide inland transportation of steel and petroleum products. Essar‘s sea transportation business provides transportation management services for crude oil and petroleum products, and dry bulk cargo to the global energy, steel and power industries.

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Some Facts of Essar Group
The group‘s enterprise value is approximately US$ 15 billion (Rs. 67,000 crores). The Essar group is one of India's largest spenders on continuous training, investing about Rs. 1.4 crore (US $3 m) annually. Essar has the world's largest gas-based HBI plant at Hazira, Gujarat. Essar Steel is India's largest exporter of flat steel products. Essar Steel is the largest steel manufacturer on the West Coast of India. Essar Steel has the first Indian steel plant to receive ISO 14001 award for environment management and ISO 9002 for the entire plant operations. Essar Shipping is the first Indian shipping company to comply with the IMO's International Safety Management Code. Essar Shipping owns India‘s largest double hull double bottom VLCC, MT Ashna. Essar Power is India's first independent power plant and first multi-fuel plant. Essar Power has India's lowest manpower to megawatt ratio. Essar Power is one of the few recipients of the Sword of Honour' from the British Safety Council and India's only power plant with the ISRS level-3 safety rating. Vodafone Essar is the second largest cellular service provider in India. Essar Oil is the first private sector company in India to enter into petroleum retailing in the last 100 years. The oil refinery of Essar Oil at Vadinar will have a capacity of 34 MMTPA in near future. Essar Constructions is a more than three decade old EPC contractor in India

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Essar Constructions is among India's largest companies in its sector.

The Base of Essar Group (Management Team)
Promoter Directors

Shri. Shashi Ruia Chairman Essar Group

Shri. Ravi Ruia Vice Chairman Essar Group

Shri. Prashant Ruia Group Chief Executive Essar Group

Shri. Anshuman Ruia Promoter Director Essar Group

Shri. Rewant Ruia Promoter Director Essar Group

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Global Management Committee Mr. Adil Malia Mr. J Mehra Mr. Naresh Nayyar Mr. Sanjay Mehta Mr. Rajiv Sawhney Mr. Alwyn Bowden Mr. Aparup Sengupta Mr. V G Raghavan Mr. Vikash Saraf Mr. Shishir Agarwal Mr. Pradeep Mittal Mr. S M Lodha Group Investment Committee Group President - Human Resources CEO - Steel Business Group CEO - Energy Business Group CEO - Shipping & Logistics Business Group CEO - Telecom Business Group CEO - Projects Business Group CEO - Aegis BPO Services CFO - Essar Group Director – Strategy & Planning - Essar Group CEO - Exploration & Production Business CEO - Minerals & Mining Business Group President - Assurance & Cost Control

Promoter Directors

Mr. J. Mehra Mr. Naresh Nayyar Mr. Sanjay Mehta Mr. Rajiv Saxena Mr. V.G. Raghavan Mr. Vikash Saraf Global Finance Committee Mr. V G Raghavan Mr. Mahadev Iyer Mr. P Sampath

CEO - Steel Business Group CEO - Energy Business Group CEO - Shipping & Logistics Business Group Head - Mergers & Acquisitions CFO - Essar Group Director – Strategy & Planning - Essar Group

CFO - Essar Group CFO - Steel Business Group CFO - Energy Business Group

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Mr. V Ashok Mr. V Suresh Mr. S. Subramaniam Mr. Tapash Bhattacharya Mr. C.M. Sharma Mr. Neeraj Gupta Mr. Amar Fadia Mr. N S Paramsivam Mr. Partha Bhattacharyya Dr. Paritosh Basu Mr. Komal Seshagiri Mr. Mahabir Agarwal

CFO - Shipping & Logistics Business Group CFO - Power Business Group CFO – Telecom Business Group CFO – Projects Business Group CFO – Aegis Ltd CEO - Essar Capital Ltd. Head, Corporate Finance - Essar Group Group Head - Forex & Treasury Group Head – Forex & Treasury Group Controller – Essar Group General Counsel, Finance – Essar Group Convener

Management Grade Structure at ESSAR :
Level M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 Designation Managing Director/ Executive Director/ CEO/Head of Corporate functions Senior Vice President Vice President General Manager Joint General Manager Deputy General Manager Senior Manager Deputy Manager Manager Senior Officer Officer

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Social activities at Vadinar :

Two major ponds have been deepened in Kathi Devaria & Kajurda villages for rain water harvesting. Water tankers are sent periodically to Kajurda, Vijaynagar and Bharana villages to help them deal with water shortage. Two school buildings at Bharana & Jankhar villages have been renovated. More than 150,000 kg of fodder has been supplied to 14 surrounding village gaushalas. August 2007 onwards a Fodder Financial Assistance is provided to villages near the refinery. Around 12,000 patients from the refinery’s 10 surrounding villages benefited from an arogya vahini (mobile clinic)’ around 3,000 patients benefited at our Mother & Child Centre at Vadinar, a joint venture with the District Panchayat, Jamnagar. Four eye camps were organised in 2007-08, with 500 patients receiving treatment and 25 patients being operated free of cost. A skin treatment camp was also organised at Timbdi village whereby 100 patients were diagnosed and necessary medicine distributed. Since November 2007, a 24-hour Essar Community Health Centre started in Jankhar village, with three doctors, three paramedics and an ambulance. The centre also has a fullfledged laboratory that is available round the clock. Two medical camps were organised in 2007-08 at Jankhar and Kajurda villages where 1,100 people from 10 – 12 villages were treated. At the Primary School Mahotshav 2007, 1,450 school bag kits were distributed to students from 74 villages of Khambhalia and Lalpur talukas.

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Vadinar Oil Terminal Limited (VOTL):
VOTL is in the business of providing crude oil and petroleum products storage, handling and terminalling facilities. VOTL has invested in port and terminal facilities to support 13.5 million tones per annum (MTPA) refinery capacity at Vadinar in Gujarat on the West Coast of India set up by Essar Oil. The facilities of VOTL include a product port, crude oil and petroleum product tankages, single point mooring, cross country and sub sea pipelines, and rail and road gantry.

Key Data : Order Year Construction Started Project Type Location Estimated Investment Completion Key Players : Sponsors Essar Oil Ltd, Essar Shipping Ltd , Petronet India Ltd, Lead Contractors and Designers, ABB Lummus, TCE, Larsen and Toubro, Semb Co E&C, Essar Shipping Ltd Financial ICIC Bank, IDBI Bank, IFCI Bank, Essar Oil Ltd, Essar Shipping Ltd, Vadinar Oil Terminal Ltd, Essar Projects, Housing and Urban Development Corporation Ltd (HUDCO) 1996 1996 but was delayed, restarted in 2005 Grass roots refinery Vadinar, Jamnagar, Gujarat, India Rs.98,740 ($2.26bn) 2006

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Operation Project “Turn Around Time”

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Operation at VOTL:
Consumer is the key of the market and his need and wants are the goal of the business activities of Essar oil ltd. For achieving this goal whole the services for inward of raw material to dispatch of finished products including management of inventory VOTL takes these steps :

First of all VOTL has it’s own jetty with 1 single point mooring for import of crude and 2 birth for dispatch of finished product via marine. Whenever vessel of crude comes on jetty, it’s weight is minimum 2.5 lac matrix tone. So it’s not possible to take vessel on jetty and for that VOTL has Single Point Morring (SPM) with attached pipeline direct to Crude Oil Tank (COT area). After this whenever Refinery wants crude it directly sends to refinery via pipeline. Then these Finished Product directly send to tank farm area. Now these finished products is directly dispatch through ROAD, RAIL, PIPING & MARINE.

Essar is reaching out to consumers deep in India's heartland with the mission to create enduring value for customers and stakeholders in core Manufacturing and service businesses, through world-class operating standards, state-of-the-art technology and the 'positive attitude' of their people .Let‘s Understand how the Marketing practically applied under the Essar oil Ltd. Oil is a product whose demand is always Latent demand i.e. (A strong Demand that can‘t be satisfied by existing product) so its production remain on Continuous basis. A product planning is a company plan for marketing its Products. Product planning means planning for the product to be produced or What need or what requirements the products the product should satisfy. Essar Oil Limited produces its products on continuous basis and so it

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does not have to do much product planning. As Essar Oil's Refinery has a Production capacity of 13.5 Million Metric Tones Per Annum (MMTPA) or 280,000 (BPD.) barrels per day. Domestic demand coupled with demand from – IOCL, Reliance, HPCL, BPCL etc. For cope with facility of Essar Oil ltd. VOTL also has capacity of 12.5 MMTP. GANTRY CAPACITY :
TANK TRUCK GANTRY (ROAD) Gantry Configuration
TANK LORRY GANTRY CONFIGURATION BAY S Gantry I Gantry II Gantry III Gantry IV Gantry V 1
MSII HSD II SKO ATF LPG LPG

2
MSII HSD II SKO ATF LPG LPG

3
MSII HSD II MSII HSD II LPG LPG

4
MSII HSD II MSII HSD II LPG LPG BIT

5
MSII HSD II MS III HSD II LPG LPG BIT FO

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MSII HSD II MS III HSD III LPG LPG BIT FO

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MSII HSD II MS III HSD III LPG LPG BIT FO

8
MSII HSD II MS III HSD III LPG LPG

9

10

FO

FO

FO

FO

FO

FO

FO

A. Each TT takes 40 minutes ( Considering ramping, idle time etc). Free loading time available per shift is 7 Hours. Number of TT can be loaded in 7 hours is 10 TT per bay per shift ie 200 KL per bay per shift. B. Each loading arm capacity is 60 KL/Hr Gantry I Total 8 bays . Each bays are having MSII and HSDII. Gantry capacity per shift = 200 X 8 = 1600 KL per shift Gantry II 2 bays for SKO or ATF 3 bays for MSII or HSDII 3 bays for MSIII or HSDIII SKO can be loaded per shift = 2 X 12 X 10 = 240 KL MSII or HSD II can be loaded per shift = 3 X 20 X 10 = 600 KL MSIII or HSD III can be loaded per shift = 3 X 20 X 10 = 600 KL Gantry capacity per shift = 240+600+600 = 1440 KL per shift Gantry III

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8 bays for LPG Gantry Capacity per shift = 56 X 17 = 952 MT per shift Gantry IV 8 bays for LPG Gantry Capacity per shift = 56 X 17 = 952 MT per shift Gantry V 6 bays for FO 4 bays for FO or Bitumen ( Presently Bitumen bay used for 380 CST FO ) Each bay can fill 6X15 = 90 MT per shift ie 360 MT 380 CST FO and 540 MT FO Gantry Capacity per shift = 540 + 360 = 900 MT per shift Total TT Gantry capacity considering three shift operation for Oil and General Shift Operation for LPG per day: 11673MT/Day ie 3.85 MMTPA

TANK WAGON GANTRY (RAIL) SPUR : Two LENGTH : Full ie 54 BTPN / 80 Conventional PRODUCT: MS II, MS III, HSD II, HSD III, FO, SKO The optimum capacity of the gantry is 5 rakes per day ie 12000 MT per day or 3.96 MMTPA The gantry to be operated round the clock.

MARINE JETTY (VESSEL) Jetty: Max dwt 100000 Draft at jetty : 20 M Draft of channel: 14.5 M LOA Pipe Line (PIPING) Line No Service Dia in Inch Length in M Line Quantity in KL 5750** 5750 5750 Designed Flow Rate in KL/Hr 2000 2000 2000

76950-A01-1 76900-A01-1 76700-A01-1

WO VGO Slop

24” 24” 24”

22000 22000 22000

**Line quantity from Pig receiving point to jetty per line ( each line is bifurcated into seven no 34”dia Finger Line) is 250 CUM

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The average utilization of the jetty as per present varied planning of the vessels is as below 40% loading, 39% jetty idling, 2% stoppage during operation, 19% stoppage after & before cargo loading Hence the jetty capacity = 365 X 24 X 0.4 X 2000 KL/Hr = 5.43 MMTPA After Night Navigation, double line loading the jetty idling will go down and loading time will increase so the capacity as follows. Minimum 45 TMT vessels to be handled with two LA connection and with night navigation. One vessel may take about 2.5 days. Hence total vessel to be handled = 12 Capacity = 12 X 45000 X 12 = 6.48 MMTPA TOTAL EVACUATION CAPACITY EX VOTL: Present ROAD : 3.85 MMTPA RAIL : 3.96 MMTPA JETTY : 5.43 MMTPA [After Night Navigation, double line loading the jetty idling will go down and loading time will increase so the capacity as follows. Minimum 45 TMT vessels to be handled with two LA connection and with night navigation. One vessel may take about 2.5 days. Hence total vessel to be handled = 12 Capacity = 12 X 45000 X 12 = 6.48 MMTPA]

TOTAL : 13.24 MMTPA SBM SPM:

14.29

Line No

Service

Dia in Inch

Length in M

Crude * Sub sea portion is 8 KM.

48”

21000*

Line Quantity in KL 22000

Designed Flow Rate in KL/Hr

Capacity for handling the ship size 85000DWT to 325000DWT. Maximum draft: 35Mtr. Line Size 1X48”, volume approx: 22000 M3. Capacity 27 mmtpa crude

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Turn Around Time:
It is the time that takes to get a job done and deliver the output, once the Job is submitted for processing. Turnaround may be as simple as unloading and reloading a delivery truck before sending it out again, or as complex as Completing a merge/purge of several rented lists, getting a product into the Buyer’s hands once it is ordered, or receiving approval on a proof that has been Submitted to the print buyer. In most cases, a short turnaround time is economically advantageous, making the most efficient use of time and Resources. TAT starts when FAN is generated. Research Methodology:

Research methodology is a way to systematically solve the research Problem. It may be understood as a science of studying now research is done Systematically. In that various steps, those are generally adopted by a researcher in studying his problem along with the logic behind them. It is important for research to know not only the research method but also know methodology. work of describing, explaining and predicting phenomenon are called methodology. Methods comprise the procedures used for generating, collecting and evaluating data. All this means that it is necessary for the researcher to design his methodology for his problem as the same may differ from problem to Problem. Data collection is important step in any project and success of any project will be largely depend upon now much accurate you will be able to collect and how much time, money and effort will be required to collect that necessary data, this is also important step. Data collection plays an important role in research work. Without proper data available for analysis you cannot do the research work accurately.

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Problem Definition:
At Essar we analyzed turnaround time of TTs loading process. Currently the average time to load a truck is around 2hrs 5min and we are able to load near about 450 TTs a day which is a huge success for road supply. The objective of our study is to make this process more effective and efficient by reducing turnaround time at its optimal level. In short, the project is about optimization of time and resources.

Data collection:
To make our study more on the practical basis and not theoretical all the data we used is primary and collected by analyzing each stage of process.

Marketing Co-ordination Office (MCO) Layout:

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NE gate Office :

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The process of truck loading starts from here.
This office is situated at North-East side of refinery. That‘s why it is called ‗North-East Gate (NE Gate)‘. There are three windows in this office: Window – 1 Window – 2 Window – 3 In Window – 1, the activity of creating database including information like TT Number, Driver‘s Name, and Khalasi‘s Name, Transporter‘s Name and Other details. For this, different-different forms have been generated according to the Customers. [A] Annexure 1A: IOCL HPCL BPCL Shell India [B] Annexure 1B: ELL/Essar Dairy Gold Plus Shah Alloys Gill [C] Annexure 1C: Kotak Vinergy Ramdoot G L Khanna Alishan GSEC Shiv Petroleum West Coast Chetak Form – 1

Form – 2

Form – 3

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In Window – 2 & 3, an activity of putting TTs into the Online Vehicle Tracking System (VTS) is done. In these two windows, basically, checking is done. The following is the Check List Slip issued at NE Gate Office to TT drivers and the mentioned things are checked. Document Checklist: Valid Original Driving License & Registration Book Valid Insurance Certificate & Fitness Certificate (Original or notarized) Valid Explosive License & Calibration Certificate ( Original or notarized) Physical Checklist Approved Spark Arrester (Welded in front of TTs towards driver's side DCP fire extinguisher (2 No. 10 KG. Working condition) Value manifold: Flange cover tightened Electrical Junction Box & double pole wiring. No electrical loose wires Regd. No. printed on the body / number plate Emergency Information Panel printed properly on the body ( All the three sides) Crew wearing proper PPEs. ( Helmet / shoes / socks) Extra load with mollified intentions e.g. iron plates, stone bags, extra water bags / buckets, extra jack and Tommy bars and any other items Driver and cleaner training and have TREM card Proper Earthling Strip is available General overall conditions of Tank Lorries Additional Check List in case of LPG Tankers

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LPG height barriers, Earthling Strip of cabin / compartment LPG emergency kit ( For LPG carriers only) Condition of pressure gauge ( For LPG carriers only) Condition of temperature gauge ( For LPG carriers only) After all these checking if everything is all right, then the particular TT is entered into the Online Vehicle Tracking System by following way: Time taken at NE Gate Office is 2 minutes.

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Vehical Tracking System :

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The average time taken at NE gate Office 2.1793 minutes. Three people are there at NE Gate Office, who handles all the activities there. Once the checking is done, the TTs are allowed to move to Time Office.

Time Office :

Time Office is the second place after the TTs have been entered into the Vehicle Tracking System. Between NE Gate to Time Office TTs are checked by security. Once the process gets over, TTs are parked in the parking in front of Time Office where it has a capacity of 700 TTs.
First of all, mails are received from the parties in which Purchase Orders / Indents have been placed. After that it is checked the amount has been

received in advance to Essar.

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After entering into the time office area, the driver sits in the truck while the khalasi comes to the Window – 1 and produce the Check List Slip to the officer, sitting in Window – 1.

After this, an Outbound Delivery Number is generated. Here, Outbound Delivery Numbers are generated according to the No. of products placed in the indent. At Window – 2, shipments are generated for PSUs (Here, the procedure is going on according to shift wise.) and then it is delivered to particular drivers. At Window – 3, Terminal Automation System (TAS) is made by which we can trace any TT in the refinery. Then, Filling Authorization Note (FAN) is generated in which all the information like TT Number, Products to be loaded, in what quantity, Gantry No., Bay No., etc. are recorded. After that Touch Key is issued. At Window – 4, planning for FO and Bitumen is done. Generally, in Time Office, the work at window – 4 is somewhat more important and with full of responsibility. It is also called ―The Hot Seat‖ and it becomes hotter as day passes. The average time taken at Time Office is 20 minutes.

Tanks Farm Area:

Tanks Farm is the area which comes under the S&D Department. Generally, S&D Department has four different areas like TLCB, RLCB, Gantry and Tank Farms. Tanks Farm is the area which act as an intermediately between PIT Area and Gantry. There are three types of tanks in Tanks Farm Area: External Floating Tanks:

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Internal Floating Tanks Cone Floating Tanks .First of all, crude oil is refined in the refinery. Then sample from each product like MS, HSD, SKO, ATF, FO, Bitumen, LPG is taken for testing in lab and after testing these products are certified.

After this, all these products are stored safely Product Intermediate Tanks (PIT). According to the requirements, products are transferred PIT to Tanks Farm Area by pipelines. In Tank Farm, there are 23 tanks.

1) 2) 3) 4) 5) 6) 7) 8)

4 Tanks – HSD 4 Tanks – MS 4 Tanks – FO 4 Sphere – LPG 1 Tank – ATF 2 Tanks – SKO 2 Tanks – Bitumen 2 Tanks – Ethanol

Tanks Farm Area is also known as ―Dispatch Tanks‖. There are some rules and regulations and procedure before storing products in the tanks Farm Area. First of all, samples from Dispatch Tanks are collected for testing. These samples are again tested and certified in the lab. The result from testing at both places PIT and Dispatch Tanks should be same. Once the sample is same then only, products are allowed to transfer to Tanks Farm Area. If there is inequality in testing then retesting is done. Testing the sample always proves to be correct. There are very less chance retesting for inequalities in the products.

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Procedure :

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Tanks Information:

SR NO

Tank No

Service

Type

Nominal Cap (m3)

Diameter (m)

Height (m)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 A

200A 200B 201 202 301A 301B 302 400A 400B 401A 401B 500A 500B 501A 501B 502A 502B 701A 701B 100 100 B 100 C 100 D

GASOLINE BS III GASOLINE BS II GASOLINE BS II GASOLINE BS III SKO SKO ATF HSD BS III HSD BS II HSD BS III HSD BS II FO FO FO FO BITUMEN BITUMEN ETHANOL ETHANOL LPG LPG LPG LPG

EFT EFT EFT EFT EFT EFT IFR EFT EFT EFT EFT CR CR CR CR CR CR IFR IFR SPHERE SPHERE SPHERE SPHERE

4000 4000 500 500 900 900 200 10000 10000 3000 3000 4000 4000 800 800 800 800 300 300 3600 3600 3600 3600

20.0 20.0 10.0 10.0 12.0 12.0 9.0 30.0 30.0 17.5 17.5 20.0 20.0 10.0 10.0 10.0 10.0 8.0 8.0 20.0 20.0 20.0 20.0

13.5 13.5 9.0 9.0 10.0 10.0 5.4 15.0 15.0 13.5 13.5 13.5 13.5 10.8 10.8 10.8 10.8 7.0 7.0

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TOTAL STORAGE IN CUM
IFR : Internal Floating Roof EFT : External Floating Roof CR : Curvature Roof

63200 mmt

No. of Pumps :
S.NO 1 2 3 4 5 PUMP SL NO 970191 970190 970189 970188 970237 PUMP NO 77P-502 S 77P-502 A 77P-501 S 77P-501 A 77P-500 S CAPACITY-m3/hr 100 100 100 100 600 PRODUCT FO MV-2 FO MV-2 FO MV-2 FO MV-2 FO MV-2 RAIL / ROAD ROAD ROAD ROAD ROAD RAIL

6 7 8 9 10

970236 970166 970165 970250 970249

77P-500 A 77P-401 S 77P-401A 77P-400 S 77P-400 D

600 300 300 600 600

FO MV-2 HSD-3 HSD-3 HSD-3 HSD-3

RAIL ROAD ROAD RAIL RAIL

11 12

970248 970247

77P-400 C 77P-400 B

600 600

HSD-3 HSD-3

RAIL RAIL

13 14 15 16 17 18 19 20 21

970246 971213 971212 970187 970186 970185 970164 970163 970162

77P-400 A 77P-203 B 77P-203A 77P-302 77P-301 S 77P-301 A 77P-202 77P-201 S 77P-201 A

600 600 600 120 120 120 100 100 100

HSD-3 MS II MS II ATF SKO SKO MS-2/3 MS-2 /3 MS-2/3

RAIL RAIL RAIL ROAD ROAD ROAD ROAD ROAD ROAD

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22 23 24 25 26 27

970245

77P-200 S 77P - 200 B

600 600 600 400 400 400

MS-3 MS - 3 MS - 3 LPG LPG LPG

RAIL RAIL RAIL ROAD ROAD ROAD

970243 970242 970242 970242

77P-200 A 77P - 100S 77P - 100B 77P - 100A

Details Written on Each Tank: 1) 2) 3) 4) 5) 6) 7) 8) 9) Fabrication & Eriction By – Artson Engineering Ltd, Mumbai Owner – Vadinar Oil Terminal Ltd Project Management – Essar Projects Ltd NES – TCE Consulting Engineering Ltd, Mumbai Designed By – Artson Engineering Ltd, Mumbai Item No. – Fabrication Serial No. – Capacity – Tank No. –

All these information are there on each and every tank. ‖ In each and every tank, a minimum level of 1.5Metre is kept. ‖ Maximum tank height is 20 Meters. ‖ There are three pipelines connected to each tanks. These are 1) Inlet 2) Outlet 3) Water ‖ Inlet pipeline is for product receipt. ‖ Outlet pipeline is for product dispatch. ‖ Water pipeline is to sort out water from tanks at the time of raining.

Gantry:
The Gantry is the place where all the TTs are loaded.

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First of all, trucks are parked in the bays. Then ‗Earthling Strip’ connected to TTs and then Touch Key is touched at Batch Control Unit Machine.

Yellow Light – For Acknowledgement Green Light – For Process Red Light – For Emergency
There is new Gantry 6 starting in year 2009-10 which is due to Expansion in the capacity to 18 mmtp from 12.5 mmtp for HSD 3. Other Gantries are also proposed due to expansion.

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Truck loading system :

In each Gantry, there is one officer to handle all operations. This officer is called ‗Gantry Officer‘. ‗Gantry Log Book‘ is maintained at each Gantry to record all information about loading. This information is recorded from Filling Authorization Note (FAN). Gantry log book :

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The Average time taken at Gantry is 35 minutes.

Out Gate Office :

Out Gate Office is the last place after the TTs have been loaded. Here, before going out side of the refinery, the driver parks the truck near by road and goes to Out Gate Office with Invoice / Bill, Indent and FAN.

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The Officer, sitting at Out Gate Office do the checking as following: 1) Check TT Number 2) Check Products and its quantity in Invoice / Bill and Indent both. 3) Check Invoice No. After all these procedures, Essar‘s bill‘s copies and FAN are kept in Out Gate Office and Company‘s (IOCL, HPCL, BPCL) Indent / bill is given to TT driver / cleaner by stamping on it. At last, TTs are made ‗Out from Vehicle Tracking System‘ and then allowed to go outside the refinery. The average time taken at Out Gate Office is 3 minutes.

Here, Total Time 128 Min and 29 Sec includes time from Time Office to Out gate.

Existing System:
Advantages:

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[A] NE Gate: ‖Security Checking:

As we are supplying the most explosive and valuable products, it is
very necessary for the company to maintain full security checking to avoid any uncontrollable circumstances. Security Checking helps to

Maintain and precede the regular procedure easily.
‖Online Tracking of TTs: Essar Oil Ltd. Uses vehicle Tracking System (VTS) to track any TTs at any stage and at any time. Due to this we have been able to control all the TTs and manage daily turn over of 700 TTs approximately. It is also useful to prevent any misconduct or malpractices into the company

Premises during the loading process.
‖Records of drivers / khalasis and TTs are maintained: At the time of entering into the NE Gate, it is the first and primary activity to enter the TTs into the Vehicle Tracking System (VTS). At this time, information like driver‘s name, khalasis‘ name, TT Number, etc. are Recorded. so that, it is very easy to judge responsibility at the time of any

critical situation.
[B] Physical Checking for Safety: It is necessary to know that the vehicle that has come for loading is completely fit to load the respective product, so any accident can be

Avoided from the scratch.
[C] Time Office: Planning and management of information of TTs: Time office does very complex work that is planning the dispatch on the bases of TT capacity and availability of product as well as gantry for the loading. It crates balance between all stages of loading process and avoids unnecessary rush of TTs at a single stage.

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Maintains flow of information: Time office does the work of entering TTs into Terminal Automation System (TAS) and maintaining the flow of information Throughout the process using SAP system. [D] Gantry: Essar Oil has fully automated gantry system which reduces manpower cost and at the same times makes loading system more efficient and

smooth.

Disadvantages:
[A] NE Gate: ‖Wastage of Time and Manpower: At NE gate physical checking of all documents related to driver and TTs are checked. This process creates unnecessary wastage of time and manpower as this process can be avoided by maintaining database of Drivers and TTs and making the whole system automated so it will tack Optimum time and will be worth full for the company.

‖ less utilization of Resources than their capacity : In 2008- 09 only 1179 Rail rakes has been dispatch through two birth of rail Gantry. Generally railway authority gives 6 hours to fulfill the rakes and send it back. And dispatch area takes maximum of 4 hours to fulfill it. Gantries are working 24*7. in each Rake there are 5 tankers with different capacity , different

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type & different demand. So we can say that per rail birth only 118 trains dispatch which takes maximum of 708 hours means 1 or 1.5 month with 20 hours of working. In full year they have work only of 1 to 1.5 month and remaining of months they have just waste the Resources.

RECOMMENDATION:
1. We have two berths with service of only Rail with just 10 loading pipes. We can do multi purpose Pipes. Like we can have FO & HSD both at 1 point with different pipes so whenever tankers with same requirement comes we should not wait for filling up of one and than other. So we can fulfill the requirements of train less than 4 hours and can load more & more trains. With this change we can save our time at loading of rail rakes and utilize more & more of resources. 2. As we visit the Gantries and look at their system all the procedure of filling the tankers are handled through control room. At both the road & rail Gantry for accounting and receipt SAP is used. In this software fully pre generated challan comes out with all the detail of demand, purchaser, qty, product, time and many more things.

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3. We can change the some variable of SAP with the help of IT Department and make Rail Gantry as multi-purposed Gantry. After this we can fulfill the demand of trucks also at the time where there is no train on rail gantry. For that we just have to construct road parallel to railway tracks and make some change in SAP. With these thing now we should not establish new road gantry and the cost of that gantry can be saved and use at other place. We can also control on the time of waiting of truck at parking nearly 35 minutes. And by this we can give full satisfaction to our customer.

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Cost – Benefit Analysis
For Expansion of capacity of Essar oil , VOTL also has to increase the capacity of transportation to 16.5 from 13.5. for expansion project these all things must be needed. PART - I:- TANK AREA PART – II:- POWER PLANT PART – III:- SEA WATER COOLING TOWER & RETURN RESERVOIR PART – IV:- PROCESS AREA – ISOM & DHDT HALF PORTION WEST SIDE PART – V:- ARU UNIT SOUTH SIDE PART – VI:- DCU – 1, DCU – 2, ESSAR HOUSE AND NARMADA RESERVOIR PART – VII:- ETP AREA, COOLING TOWER AND WEST SIDE COOLING TOWER, HMU AREA, N2 PLANT AREA PART – VIII: - REMAINING BOREHOLES FOR D AND B BLOCK. PART – IX: - LPG AND DESPATCH AREA Here for comparison we are calculating only for dispatch area that is for gantry. We are doing cost-benefit analysis of new road gantry and our recommendation of using rail gantry as multy purpose.

Additional gantry
Land for construction: Construction: Piping : Pumps & Machinery : IT department: Extra man power: Total 45 crore 9 crore 23 crore 46 crore 12 crore 1 crore (per year) 136 crore

For additional gantry service with 8 bays VOTL can have 8 filling station with same product.

Alternative
For changing in SAP: Construction of road: Addition of pipes & pumps: 5 crore 9 crore 33 crore

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Total

47 crore

Conclusion of this analysis of costing of two alternatives gives the perfect answer for increasing the capacity of VOTL. we can see that when we made new gantry it have all the capital cost which we mention earlier and additionally it have expense of additional staff salary, depreciation of gantry , expense of safety measures and many more. Instead of this we can see that VOTL is not using their Rail gantry as per their capacity. They uses very less just 1179 rakes (1179/5 =236 trains).it simply means 1 train at 1.5 day. But instead of this VOTL has dispatch 8 trains per day maximum. Even though we don’t compare with maximum capacity they must have minimum 3 to 4 trains per day.

So we can say that our alternative is better than expansion of new gantry.

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Finance Project “Ratio Analysis”

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Meaning & Utility of Ratio analysis & Financial Statement
Meaning of Ratio Analysis: Ratio analysis is a widely used tool of financial analysis. It is defined as the systematic uses of ratio to interpret the financial statement so that strength & weakness of a firm as well as its historical performance & current financial condition can be determined. Utilities: (1) Ratio analysis helps to appraise the firm in term of their profitability & efficiency of performance, either individually or in relation to these of other firms in the same industry. Proper Comparison of ratios may revel where a firm is placed as compared with earlier period or in comprise with other firms in the same industries. Ratio analysis is one of the best possible techniques available to the management to impact the basic function the planning & control. Ratio’s calculated on the basis of historical financial statement may be good assistant to predict the future.

(2) (3)

(4)

Meaning of Financial Statements: The process of financial accounting in the books of account which ultimatel y aims at preparing what is called financial statements. Usually the term financial statement refers to two kind of statement. • Balance sheet • Profitability Statement

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Balance –sheet As at 31st march, 2009

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Statement of Profit & loss for the year ended 31st march, 2009

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RATIOS of VOTL Current Ratio :
The current ratio is the ratio of total current assets to total current liabilities. It is calculated by dividing current assets by current liabilities. This most widely used ratio is also known as ‘Working Capital Ratio’ as it is a measured of working capital available at a particular time. It is measure of sort-term financial strength of the business and shows weather the business will be able to meet its current liability, as and when they mature. Remember that a liability which will mature within a period of twelve months is a current liability at the business and shows weather the business will be able to meet its current liability, as and when they mature. Remember that a liability which will mature within a period of twelve months is a current liability. Formula: Current Ratio = Current Assets Current Liability Particulars Current Assets Current liability Current Ratio
3.8721
4 3 2 2008 2009

2008 2488876817 642774898 3.8721

2009 2251547900 2738680472 0.8221

0.8221
1 0 2008 2009

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Interpretation: The relationship between current assets and current liability it is use to judge the liquidity position of company. And ideal current ratio is 2:1.It is generally believed that 2:1 ratio shows a comfortable working capital position i.e. the current assets should be twice the current liabilities. However, this rule should not be taken as a hard and fast rule, because a ratio which is satisfactory for one business may not be satisfactory for the other. There may be instances when an enterprise may function satisfactorily even with a current ratio of one to one or less and some enterprises required much higher ratio than 2 to 1. If the amount of stock-in-trade is unduly large, then the 2 to 1 ratio may not be satisfactory. so, the current liability must be reduced if possible. And due to increase in current liability current ratio is decreased to 0.8221 and it is worst situation for the company, the ratio must be 2:1.and the reason of that is due to expansion and with this the capital expenditure is so increased upto 2510061638 rs. From 323886592.

Acid Test Ratio :
Quick ratio shows that one defect of the current ratio is that it fails to convey any information on the composition of the current assets of a firm. A rupee of cash is considered equivalent to a rupee of inventory or receivable. But it is not so. A rupee of cash is more readily available to meet current obligations than a rupee of, say, inventory. This empires the usefulness of the current ratio. The acid-test ratio because is a measure of liquidity designed to overcome this defect of the current ratio. It is often referred to as quick ratio because it is a measurement of a firm’s ability to convert its current assets quickly into cash in order to meet its current liability. Thus, it is a measure of quick or acid liquidity. The acid-test ratio is the ratio between current assets – inventory and current liability and is calculated by dividing the (CA-Inventory) by the current liability.

Formula: Quick Ratio (Acid-test ratio) = (Current Assets – Inventory) Current Liability Table of Quick Ratio: Particulars Quick Assets (In Rs.) 2008 2009

2472729738 2210760789

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Liquid Liability Ratio

642774898 2738680472 3.8470 0.8072

3.847
4 3.5 3 2.5 2 1.5 1 0.5 0 2008 2009

2008 2009

0.8072

Interpretation:This ratio measured that the absolute liquidity may be obtained by comparing only cash and bank balance as well as readily marketable and it is satisfactory if the ratio is 0.5 : 1.This ratio calculated to know that weather the firm will be able to pay its current liabilities immediately ? Also it is used analysis position of a company into detail. Due to increase in current liability this ratio is decreases and another reason for this the money is blocked more in inventory than the previous.

Gross Profit Ratio :
Gross profit ratio expressing relationship between (Net Sales – Cost of Good Sold) earned to Net Sales. It is a useful indication of the profitability of business. Gross Profit ratio is the results of prices, sales volume and costs. A Change in the Sales can be brought about by changes in any of these factors. The Gross Profit Ratio represents the limit beyond which fall in sales price are outside the tolerance limit. Further the Gross Profit Ratio can also be used in determining the extent of loss caused by theft, spoilage, damage and so on in the case of those firms which fallow the policy of fixed gross profit ratio in pricing their products.

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Formula: Gross Profit Ratio = Sales - Cost of Goods Sold x 100 Net Sales

Table of Gross Profit Ratio :-

( In Rs.) 2008 2009 1093264352 3212516420 1404376830 3867318608 77.85% 83.07%

Gross Profit Sales Ratio

83.07%
84.00% 83.00% 82.00% 81.00% 80.00% 79.00% 78.00% 77.00% 76.00% 75.00% 2008 2009 2008

77.85%

2009

Interpretation:Gross Profit Ratio of the company for two year consecutive years is 77.85%and 83.07% respectively. As the ratio is better in both the two years it shows that there is ability of the management to improve gross profit ratio day by day.

Net Profit Ratio :
Net profit ratio is measure the relationship between net profit and net sales. The objective is to determine the overall profitability due to various factors such as operational efficiency and trading on equity. The net profit ratio is indicative of management’s ability

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to operate the business with sufficient success not only to recover from revenues of the period, the cost of merchandise or services, the expenses of operating the business and the cost of the borrowed funds, but also to leave a margin of reasonable compensation to the owners for providing their capital at risk. The ratio of net profit to sales essentially expresses the cost price effectiveness of the operation.

Formula: Net Profit Ratio = Profit After Tax x 100 Net Sales ( In Rs.) 2008 2009 (559121067) (1438817394)

Table of Net Profit Ratio :-

Profit After Tax

Interpretation : Net ratio is computed on the basis of net profit earned from operation of business and non-operating expenses and incomes are excluded. E.g. income from investments of surplus funds of business is non-operating income and so it is to be excluded. Loss on sale of asset is non-trading loss and it is not taken into account. Generally, tax is deducted from profit while calculating this ratio. Although near about 83% and 77% gross profit margin, the company is in loss due to higher interest paid to the depositors and other financial institutions. So, net profit ratio can’t be found out due to loss in the company.

Operating Ratio :
Operating ratio shows the efficiency of the management. This ratio is to be measured by 1-Operating profit ratio. The higher the ratio, the less will be the profit available to proprietors. The lesser the ratio, the high will be the profit available to proprietors. This ratio is also usually expressed as a percentage. Operating ratio show about how any expenses during the year for making more profit in the firm.

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Formula : Operating Ratio = Cost of good sold + operating expanses Sales

Table of Operating Ratio :Particulars Operating expenses Sales Operating Ratio

( In Rs. ) 2008 311112478 1404376830 22.15% 2009 654802188 3867318608 16.93%

25.00% 20.00% 15.00% 10.00% 5.00% 0.00%

22.15% 16.93%
2008 2009

2008

2009

Interpretation:Operating Ratio of the company for two year is 22.15% & 16.93%. it shows the satisfactory situation. It indicated that the major share of profit will be available for the real owner of the company

Expenses Ratio :
This Ratio is for the purpose of ascertaining relationship between Total expenses and net sales. The expenses ratio is, therefore, very important for analyzing the profitability of a firm. It should be compared over a period of time with the industry

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average as well as firms of similar type. As a working proposition, a low ratio is favorable, while a high one is unfavorable. The implication of a high expenses ratio is that only a relatively small percentage share of sales is available for meeting financial liabilities like interest, tax and dividends, Formula: Expenses Ratio = Total Expenses x 100 Net Sale Table of Expenses Ratio :( In Rs. ) Particulars Expenses Sales Ratio 2008 1929545981 1404376830 137.39% 2009 3183429072 3867318608 82.32%

Total expenses doesn’t include establishment exp.

137.39%
140.00% 120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% 2008 2009

82.32%

2008 2009

Interpretation:An Expense Ratio is shows the relationship between Total expenses of the company out of net sales. This ratio is Decreases to 82.32 % in year 2009 from 137.39% in year 2008 because income increase nearly thrice whereas expenses just twice.

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Return on Capital Employed :
The Return on Capital Employed is the second type of ROI. It is similar to the ROA except in one respect. Here the profits are related to the total capital employed. The term capital employed refers to long-term funds supplied by the creditors and owners of the firm. It can be computed in two ways. First, it is equal to non-current liabilities plus owners’ equity. Alternatively, it is equivalent to net working capital plus fixed assets. Thus, the capital employed basis provides a test of profitability related to the sources of long-term funds. A comparison of this ratio with similar firms, with the industry average and over time would provide sufficient insight into how efficiently the long-term funds of owners and creditors are being used. The higher the ratio, the more efficient is the use of capital employed. Formula:Return on Capital Employed (ROCE) = Profit after Tax x 100 Total Capital Employed Table of Return Capital Employed :Particulars Profit after Tax ( In Rs.) 2008 (559121067) 2009 (1438817394)

Interpretation:Return on capital employed ratio of the company for two consecutive year can’t be found out because company is the starting faze and working in loss. still in comparison to last year net loss decreases It indicates that the management of the company has performed their job successfully.

Return on Shareholders’ Funds :
This ratio is in order to judge the efficiency with which the proprietors’ funds are employed in business, this ratio is ascertained. Proprietors’ Equity or proprietors’ funds include share capital and reserves. It is of great practical importance to the prospective investors. As it enables the profitability of a company to be compared with that of the over company. It also indicates whether the return on proprietors’ funds is enough in relation to

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the risks that they undertake. This ratio shows what amount of dividend is likely to be received on share. This ratio is usually expressed in percentage Formula: Return on Shareholders’ Funds = Profit after Tax x 100 Share holders Fund Table of Return Shareholders’ Fund :Particulars Profit after Tax ( In Rs.) 2008 (559121067) 2009 (1438817394)

Interpretation:This ratio is very important to find out because this ratio shows about the company profit out of the shareholders fund. How much shareholders’ Fund invested in the company show this ratio. Return on share holder’s funds of the company for two consecutive year can’t be found out because of the same reason as earlier that company is working under loss.

Earning Per Share :
Earning per share measures the profit after tax available to equity share holder on a per share basis, i.e. the amount that they can get on every share held. It is calculated by profit after tax by the number of. Equity share earning per share is a widely used ratio. It does not recognize the effect of increase in equity capital as a result of retention of earnings. If Earning per share has increased over the years, it does not necessarily follow that the firm’s profitability has improved because the increased profits to the owners may be the effect of an enlarged equity capital as a result of profit retentions, through the number of ordinary shares outstanding still remains constant. Formula: Earning per Share = PAT . No. of Equity Share

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Interpretation:Earning per share analyze that the ratio shows the relationship between the profit after tax and number of equity shares. This ratio is determine that the how much profit earn by the share. This is very necessary to find this ratio.in this ratio also same problem we are facing that we can’t found out ratio.

Dividend Payout Ratio :
Dividend payout ratio is also known as payout ratio it measures the relationship between dividend per share and earning per share. In other word, the dividend payout ratio shows what percentage share of the net profit after taxes and preference share dividend is paid out as dividend to equity holder it can be calculated by dividing the dividend per share and earning per share. The dividend payout ratio is an important and widely used ratio. The payout ratio can be compared with the trend over the years or an inter-firm and intra-industry comparison would throw light on its adequate. Formula: Dividend Payout Ratio = Dividend per Share Earning Per Share .

Interpretation:Here in VOTL we can say that company is newly established and working in loss . so, there is no matter of dividend. And the other thing is all the shareholders are their holding company only so dividend pay out ratio is not the measurement of good management.

Stock Turnover Ratio :
The number of times the average stock is turned over during the year is known as stock turnover. It is computed by dividing the cost of good sold by stock in the business. Average stock is the average of opening and closing stock of the year. If however the monthly figures of the stock will gives a better turnover ratio.

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Formula:Stock Turnover ratio = Cost of good sold x100 Average Stock

Interpretation: VOTL is basically subsidiary company of ESSAR SHIPPING, PORT & LOGISTICS. It only gives service of transportation of crude & finished product. So, there is no stock turn over ratio. Total Assets Turnover Ratio : The total assets amount turnover ratio amount invested in business are invested in all assets jointly and sales are affected through them to earn profits. So in order to find out relation between total assets to sales. Total assets turnover is calculated. This ratio is important to know the overall efficiency of the business. The higher this ratio, it shows that with less amount of investment in total assets, the business has a capacity to sell more and as such its profitability is also more. While using this ratio, some care must be taken just like above mentioned fixed assets ratio. If the assets are very old and more depreciation has been deducted, then the turnover seems to be more which in fact does not show more efficiency. Formula: Total Assets Turnover Ratio = Net Sales . Total Assets (FA + CA + Investment)

Table of Total Assets Turnover Ratio: Particulars Net Sales Total Assets

( In Rs. ) 2008 1,404,376,830 33425580891 2009 3,867,318,608 35927521197

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Ratio

0.042

0. 11

Total Assets contain the total of Assets side in B\S.
0.11

0.12 0.1 0.08 0.06 0.04 0.02 0 2008 2009
0.042

2008 2009

Interpretation:The calculation of this ratio is dividing by the net sales and total assets (Fixed Assets + Investment + Current Assets). This ratio is defined as the type of assets whether new or old and depreciation and the sales of this ratio depend on overall efficiency on the part of management.

Debtors Ratio : This Ratio shows the rate at which customers are paying for the credit sales. This ratio should approximately to the audit terms allowed by the business and is therefore a comment on the efficiency of audit control. The ratio is computed by dividing the amount of debtors and bills receivables by the average daily sales. Formula: Debtors Ratio = Debtors + Bills Receivables x No. of Days Credit Sales

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Interpretation: Debtors Ratio of the company we are not require to found out because all the debtors are their holding / sisters company.

Creditors Ratio : Creditor’s ratio measures the average time taken to pay suppliers. It is a very important ratio because the potential suppliers would like to know the time within they get paid for their suppliers. The smaller the ratio the large the period of credit enjoyed by the company significantly long payment period may mean that the business may have serious payment problem because it credits sense impending failure or become important with waiting they due to the company. Formula:Creditor’s Ratio = Creditors + Bills Payable x No. Days Credit Purchase

Interpretation:Creditors Ratio of the company we are not require to found out because all the Creditors are their holding / sisters company. .

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Conclusion :
Finally I can Say that it’s my great fortune that I can work in Vadinar Oil Terminal Ltd. That is subsidiary of Essar Shipping, Port and Logistics. From VOTL I can learn many things like How corporate world work?, Some Financial Aspects & also how they operate such a big company so nicely. Here I can also learn MIS of VOTL that is used for transportation of tankers, trains, pipes & marine. From Financial ratio analysis we can say that VOTL is newly established subsidiary of ESOLL is working under loss due to highly paid interest to their holding / sister companies only. Still in comparison to 2008 it’s better in 2009. From Asset turn over ratio we can found out that company can do turn over only 10 % (approx) of total turn-over. From operation project we can say that VOTL is not working under full utilization of their assets. But all the Findings are due to the Reason that VOTL is newly established. And the other Reason is that VOTL is working only for their holding company. So, it has to be dependent on holding company. But as per my suggestion VOTL should also work for other companies for more utilization of resources.

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Bibliography :

1) http://www.essar.com/ 2) http://www.essarnet.com 3) Essar‘s past management reports 4) Financial Annual Reports

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