Ravi Diyora

ESSAR GROUP

OF

COMPANIES

Prepared & Submitted By:

Diyora Ravi

Jobanputra Mary

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 20,000 people in 50 locations worldwide. The Group's revenue guidance for the year ending March 2007 is over USD 4 billion. All the group’s 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 FZE. The group’s enterprise value is approximately US$ 17 billion (Rs. 76,000 crores).

The Group takes pride in being a high-performance multinational organization, providing world-class services and products. Manned by a highly efficient and dynamic team of employees, the Group is growing stronger every day. A committed corporate citizen, the group provides unwavering support to the community as well as initiates various social and ecological drives that have a positive impact on society.

The Essar Group has a large investor base of approximately 1.4 million shareholders in its group companies- Essar Steel Ltd., Essar Shipping Ltd., Essar Oil Ltd. and India Securities Ltd.

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

Essar VISION & Mission

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 our people”

Vision

The vision of Essar Group can be defined by the seven E’s:

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- History

In the post-independence era, India’s industrial revolution had begun and the spirit of a new found freedom was igniting many a young entrepreneur. Nand Kishore Ruia was one of them.

The Ruia family had been in business and trading since 1800’s in Rajasthan. The lure of cotton trade in Bombay made Nand Kishore Ruia leave the desert homelands of his native Rajasthan, his natural instincts of risk and adventure took him further south to the coastal town of Madras in 1956, where he was amongst the first to respond to the country’s call for the export of iron ore. His business activities included exports of groundnuts and groundnuts oil and dealing of Desoto car and trucks.

The untimely demise of Shri Nand Kishore Ruia in 1969 thrust the mantle of family and business responsibilities on the Ruia brothers- Shashi (26 years) and Ravi (22 years). The initials ‘S’ and ‘R’ of the two Ruia brothers gave birth of ESSAR. The seeds of Essar’s growth had already been sown with the first on many contracts for construction of ports, jetties and berths.

Over the years, Essar continued to grow in related areas of offshore construction, pipe lying, and contract drilling and marine transportation. It also moved in to steel, petroleum and telecommunication sectors.

Along these years, business contacts and associations with some of the most reputed companies all over the world paved the way for the Group to imbibe and assimilate substantial managerial skills and technical expertise. All along, the guiding motto was to seek a path of high growth, taking associated risks and turning each venture into a profitable business.

Management Team

Mr. Shashi Ruia	Chairman
Mr. Ravi Ruia	Vice Chairman
Mr. Prashant Ruia	Director
Mr. Anshuman Ruia	Director
Ms. Smiti Ruia	Director
Mr. Rewant Ruia	Director

Board of Directors

Mr. S. N. Ruia	Promoter Director
Mr. V.N. Paradkar	Executive Director
Mr. T. K. Nagraj	Director
Mr. S.V. Venkatesan	Director

Corporate Functions

Mr. Suresh Sundaram	Director – Corporate Aviation
Mr. S. V. Venkatesan	Resident Director – Chennai
Mr. J. Mehra	Resident Director – New Delhi
Mr. Madhu Vuppuluri	Resident Director – New York
Mr. Sunil Bajaj	President – Corporate Affairs
Mr. Adil Malia	President – Human Resource
Mr. Vijay Mehra	Chief Information Officer
Mr. V. Krishnan	Head–Corporate Communication
Mr. Y. M. Shivamurthy	Head – Legal
Mr. N. S. Paramshivam	Head – Forex & Treasury
Mr. Dinyar M. Jivaasha	Head–Corporate Risk & Insurance Management

FINANCE COMMITTEE

NAME	POSITION
Herman M. Schwarz	Chief Executive Officer
John Scot Brunke	President, Chief Financial Officer and Director
Lee O. Waters	Executive Vice-President-Client
R. Glen MacMullin	Director
Ravikant N. Ruia	Director
Prashant S. Ruia	Director
Madhu Vuppuluri	Director

The other members of financial Management are:

Amit Kumar Agarwal

Manager, Finance, Essar Oil Ltd.

Amar Fadia,
Head of Long Term Finance

Veera Patel,

Head Customer Operations & Short-term finance

FUNCTIONS OF FINANCIAL COMMITTIE:

There are following functions that the financial committee has to performe to company.

Ø The stability of the financial system as a whole;

Ø Interactions between prudential supervision and control of systemic risks of payment and settlement systems;

Ø Crisis management coordination;

Ø Deposit guarantees and investor protection;

Ø Examining the content of bills, regulatory decrees or circulars which are of relevance to both institutions;

Ø The designation and management of joint activities – including managing staff assigned to these activities – in order to comply with the duty of cooperation as referred to in paragraph 1;

Ø All or part of the work and activities that an administrative body answerable to the Management Committee of one of the institutions undertakes on behalf of another institution;

Ø Coordinating the supervision of businesses, institutions and operations in accordance with the powers vested in the two institutions;

Ø Involvement in one or more of the cooperation bodies.

AUDIT COMMITEE

The Audit Committee is comprised of two directors, R. Glen MacMullin and Madhu Vuppuluri, neither of who serve as an executive officer of the Company and

Stanton is an audit committee financial expert, as that term is defined by regulations of the audit committee.

The Audit Committee was comprised of three members,

1) Stanton D. Anderson,

2) Peter D. Fitzsimmons

3) Josh S. Weston.

So, this is auditing committee of Essar including these three members and Mr. Ravi Ruia as vice chairman of Essar group.

FUNCTIONS OF AUDIT COMMITTIE:

· The integrity of Company’s accounting and financial reporting processes and of the audits of the financial statements of the Company;

· The Company’s compliance with legal and regulatory requirements;

· The outside auditor’s independence and qualifications; and

· The performance of the Company’s internal audit function and outside auditors.

The functions of the Audit Committee are oversight. The management of the Company is responsible for the preparation, presentation and integrity of the Company’s financial statements. Management and the internal auditing function are responsible for maintaining and applying appropriate accounting and financial reporting principles and policies and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations.

The outside auditors are responsible for planning and carrying out a proper audit and reviews, including reviews of the Company’s quarterly financial statements prior to the filing of each quarterly report on Form 10-Q, and other procedures. In fulfilling their responsibilities hereunder, it is recognized that members of the Audit Committee are not full-time employees of the Company and are not, and do not represent themselves to be, accountants or auditors by profession or experts in the fields of accounting or auditing.

As such, it is not the duty or responsibility of the Audit Committee or its members to conduct “field work” or other types of auditing or accounting reviews or procedures, and each member of the Audit Committee shall be entitled to rely on (i) the integrity of those persons and organizations within and outside the Company from whom it receives information and (ii) the accuracy of the financial and other information provided to the Audit Committee.

ORGANIZATIONAL CHART

Companies Under Essar Group

1) ESSAR STEEL

2) ESSAR OIL

3) ESSAR SHIPPING & LOGISTICS

4) ESSAR POWER

5) ESSAR TELE HOLDINGS

ESSAR STEEL

Essar steel is the largest integrated steel producer in Western India and has full control over the entire process of manufacture – from iron ore to ready-to -market products.

The company operates and 8 MTPA Beneficiation plant at Bailadilla, Chattisgarh, where some of the world’s richest deposits of iron ore are available. The iron ore slurry is pumped to Essar Steel’s pelletisation plant in Visakhapatanam through a 267 Km long slurry Pipeline, the second longest in the world. The 8.0 MTPA pelletisation plant at Visakhapatanam provides the raw material for the steel plant at Hazira.

The Essar Steel complex at Hazira in Gujarat, houses the world’s largest gas based single location sponge iron plant. The complex also houses the steel plant which has an annual capacity of 4.6 million tones per annum. It has the world’s largest single location gas-based Hot Briquetted Iron (HBI) plant of 5.1 MTPA. It is also setting up a 1.5 MTPA Wide Width Plate Mill (up to 5 meter wide plates) at Hazira which is promoted by Essar Global Limited (76%) and Stemcor, UK (24%).

The Essar Group also operates a 400,000 TPA cold rolling complex with a galvanizing line of 150,000 TPA in Indonesia, making it the largest private steel company in Indonesia.Essar Steel produces highly customized value added products catering to a wide variety of products segments including roofing, automobiles, oil and gas, shipbuilding, fabrication and white goods where they compete with the best players. in international markets. Essar Steel is India’s largest exporter of flat products, selling over one-third of its production to the highly demanding US and European markets, and to the growing markets of South East Asia and the Middle East.

Board of Directors:

SR. NO. Name of Directors Position 1 Shri. Shashi Ruia Chairman 2 Shri. Ravi Ruia Vice Chairman 3 Shri. Prashant Ruia Director 4 Shri. Rewant Ruia Director 5 Mr. S. V. Venkatesan Director 6 Mr. J. Mehra Director 7 Mr. V. G. Raghavan Director 8 Mr. Vikram Amin Director ( Sales & Marketing ) 9 Mr. Robin Banerjee Director (Finance) 10 Mr. Dilip Oommen Wholetime Director 11 Mr. K.V. Krishnamurthy Director 12 Mr. Sanjeev Shriya Director

The company caters to its small volume customers through an online steel vortal www.clickforsteel.com. Essar Steel’s ’24-carat steel’ brand is one of the most trusted brands in the steel industry.

ESSAR OIL

Essar Oil Ltd. (EOL) is a fully integrated oil company of international size and scale, covering the entire value chain from exploration and production to refining and retailing of petroleum products. It is the first private sector company in India to enter petroleum retailing in the last 100 years.

Board Of Directors

SR. NO.	POSITION	NAME OF DIRECTORS
1	Chairman	Shashi Ruia
2	Wholetime Director	Suresh Mathur
3	Managing Director	Naresh Nayyar
4	Director	Ravi Ruia
5	Director	Anshuman S Ruia
6	Non Executive Director (Upto 31/07/08)	Awadhesh N Sinha
7	Director(Nominee of IDBI)	G Goswamy
8	Deputy Managing Director and Director (Finance) (upto 29/9/07)	Hari L Mundra
9	Director	K N Venkatasubramanian
10	Director(Nominee of LIC)	K Sridhar
11	Director(Nominee of ICICI Bank Limited)	N S Kannan
12	Director	Prashant Ruia
13	Director	R Jayaraman Iyer
14	Director (Nominee of Debenture Trustees – WITCO)	S N Gogate
15	Director (Nominee of IFCI Limited)	Sanjeev Ghai

Lines of business consists of –

The exploration and production division of the company owns the exploration blocks of Coal Bed Methane in Mehsana, Gujarat and Ranigunj in West Bengal and has recently entered into a production-sharing contract with the government of Myanmar for one on-shore and one offshore block. The division also owns the Ratna R-series development blocks, a proven field having more than 500 Million barrels of oil reserves. Recently it was awarded two onshore blocks in Assam namely AA-ONN-2004/3 and AA-ONN-2004/5. It has also been awarded three onshore blocks in Madagascar.

The Refining division consists of a projected capacity of 12.5 MMTPA petroleum refineries at Vadinar in Gujarat. At present it is running at 10.5 MMTPA capacities and is expected to reach 16 MMTPA by the end of September. It will be capable of producing Euro II and Euro III compliant fuels. Its dedicated infrastructure includes port facility, SBM, tankage, pipeline and power. It has an ideal location close to source of crude and market.

The products produced at present are- Furnace oil, Naphtha, Kerosene, LPG and Aviation Turbine Fuel.

The Marketing division consists of:-

§ Retail focus on Highways, rural and semi-rural areas in India

§ Premium fuel brands

§ Institutional sales through Bulk marketing.

Essar Oil has 1,210 outlets in the country and another 800 are at various stages of construction. It also plans to increase the retail outlets to 2500 by the first quarter of next year. Moreover Essar is a bulk exporter of petroleum products, exporting a large proportion of its finished products.

Essar Oil plans to transport fuel for retail outlets through the Railways to reach places as far as Rewadi in Haryana. The fuel requirement of outlets in the eastern and the southern states will be outsourced from the current suppliers. Currently, Essar Oil's Vadinar refinery supplies 20,000 tones of MS and 40,000 tones of diesel for outlets in Gujarat, Maharashtra, Madhya Pradesh and Rajasthan. The refinery also exports HSD.

ESSAR SHIPPING & LOGISTICS

Essar Shipping & Logistics Ltd. (ESLL) is one of the world’s leading integrated sea logistics companies, with a special focus on transportation solutions for the global energy business. A strong management team of experienced marine professionals steers the company, maintaining customer focus, world-class operations, an impressive safety record and a consistent financial performance. Our fleet accounts for almost 14% of India’s shipping fleet and we own the country’s largest VLCC (Very Large Crude Carrier), which is also India’s first double hull, double bottom VLCC.

The company owns 27 vessels including two double hull, double bottom VLCCs. It has a diverse fleet comprising crude carriers and product tankers, Bulk Carriers, Mini Bulk Carriers, Handymax and Barges. The company has unblemished track record in transporting crude oil across the globe.

BOARD OF DIRECTORS

SR.No.	NAME OF DIRECTORS	POSITION
1	S K Poddar	Independent Director
2	Sanjay Mehta	Managing Director
3	Anshuman S Rula	Director
4	Ravi Ruia	Vice Chairman
5	Shashi Ruia	Chairman / Chair Person
6	A R Ramakrishnan	Whole Time Director
7	V Ashok	Whole Time Director
8	N Srinivasan	Independent Director
9	R N Bansal	Independent Director
10	D J Thakkar	Independent Director
11	K V Krishnamurthy	Independent Director
12	Rewant R Ruia	Director

The shipping business has been reorganized into three different companies- shipping (Essar Shipping), terminalling (Vadinar Oil Terminal Ltd.) and domestic and international logistics (Essar Logistics Ltd.) to bring greater focus and thrust in each of these areas. All these companies are subsidiaries of Essar Shipping & Logistics Ltd.

The company has set up port and terminal facilities to handle the receipt, storage and dispatch of crude oil and petroleum products at Vadinar, Gujarat. The project will facilitate storage and handling of 32 MTPA of crude oil and petroleum products for Essar Oil’s refinery and other projects in the vicinity.

A new deep water berth at Hazira is coming up and will handle bulk cargo up to 24 million tones in two phases, up from the current handling capacity of Hazira of 8 tones. The objective of the bulk berth is to provide the steel plant at Hazira direct access to imported raw materials and also facilitate the export of finished steel products. In doing so, the dependence of the plant on present lighterage operations and the need for monsoon stockpiling of raw material will be minimized, thereby reducing the effect of weather on the movement of cargo.

ESSAR POWER

Essar is India’s first independent power producer, continuously setting new standards of excellence. Essar’s Power business is working closely with other Group companies to add captive capacity. It has achieved several milestones to complete the task of adding 3600 MW to is generation portfolio in the next three to four years. It looks like the company is surging ahead with as many megawatts of energy as it can muster and mare. It has entered into a joint venture with REpower, AG for manufacture of wind turbines.

The plant's design and construction are world class, as confirmed by independent international consultants. All equipment comes from the world's best suppliers such as General Electric, Siemens and Honeywell. The plant is highly efficient and flexible. Both plant availability and the plant load factor are high and have been improving annually. Being India's first multi-fuel plant, it can operate simultaneously on naphtha and gas, which will be a major advantage once LNG becomes freely available. By switching over to LNG, the company’s variable costs have fallen substantially, giving one of the lowest cost of production in India. The government has notified Essar Power as an infrastructure company, giving the advantage of lower interest charges.

BOARD OF DIRECTORS

SR.NO.	NAME OF DIRECTORS	POSITION
1	S N Ruia	Chairman
2	Ravikant Ruia	Vice chairman
3	Mr. A. K. Srivastava	Managing Director
4	Mr Krishnan	Director
5	Mr. Anshuman Ruia	Director

ESSAR TELE HOLDINGS

During 1994-1997 the company launched GSM services in Delhi, Haryana, Rajasthan and UP East telecom circles under the brand name “Essar Cellphone”. Then in 2000 it entered in to a joint venture (JV) with Hutchison for GSM services in India (Hutchison Max Telecom- existing Mumbai GSM operator). The JV acquired licenses for several circles in India.

Essar Group (through Essar Spacetel) independently acquired UAS licenses for 7 North-East circles and in July 2005 the Essar Group acquired BPL Mobile companies. In February 2005 it consolidated all JV operating licenses in to single holding company - Hutchison Essar Ltd (HEL). Then the BPL Mobile companies and Essar Spacetel were rolled into Hutchison Essar Ltd.

Hutchison Essar, a joint venture between Essar and Hutchison Whampoa plays a major role in India’s communication industry, connecting people all over India with world class network coverage and leading edge cellular services at affordable prices. Hutchison Essar is among India’s most valuable companies and serves a rapidly growing base of over 20 million subscribers across the country with a strong brand like Hutch and “the Chilka who followed you wherever you went.!”

On February 11, 2007 Vodafone purchased the HTIL stake in Hutch Essar and on March 15, 2007 the Vodafone Essar partnership was announced. Mr Ravi Ruia is the chairman and Arun Sarin is the vice- chairman of the new JV- “Vodafone Essar”.

Essar Telecom Retail Ltd. is India’s first national chain of multi-brand and multi-service telecom outlets under the brand name “The Mobile Store”. It has now tied up with the Virgin Group for brand licensing, technical and consultancy services agreement.

Other Lines of business of Essar Group consists of the following:-

Essar Agrotechs Ltd.	India Securities Ltd
Aegis BPO services Ltd.	Essar construction Ltd
Futura Travels Ltd.	Essar Projects Ltd.

And many more:

But one thing that is common in all the companies of Essar Group is the high level of synergy and co-ordination maintained by all of them.

BOARD OF DIRECTORS

SR.No.	NAME OF DIRECTORS	POSITION
1	Ravi Ruia	chairman
2	Mr. Vittorio Colao	Chief Executive Officer and Independent Director
3	Mr. Peter Wong	Chief Executive Officer of Hutchison Telecom Hong Kong
4	Mr. Asim Ghosh	Managing Director and Executive Director
5	Mr. Sandip Das	Deputy Managing Director
6	Mr. Naveen Chopra	Chief Marketing Officer

ESSAR CONSTRUCTION

Essar Constructions (India) Limited / EC(I)L formerly known as Essar Constructions Ltd. (ECL) was one of the first companies to be started by the group and has close to forty years’ experience in diverse construction related activities. Essar Constructions (India) Ltd. (ECIL) has a rich and varied track record as a premier construction company. In fact, over the last 30 years, have poured enough concrete to build a road that would circle the earth thrice.

As one of India's leading engineering, procurement and construction (EPC) contractors, we have executed projects worth over US$ 3 bn (Rs.14, 000 crore) and are currently implementing projects worth US$ 2.5 bn (Rs.11, 625 crore). They skillfully bring together hundreds of engineers and tens of thousands of workers to complete the projects, always maintaining an uncompromising focus on quality and safety. Setting high benchmarks, they have consistently broken new ground and achieved a long list of firsts. For example, it built the world's largest gas-based sponge iron plant, were the first Indian company to set up an independent power plant, pioneered the laying of offshore oil and gas pipelines in India and built India's first and longest island breakwater.

A history of expertise

The Company honed their skills as the turnkey contractor for most of the Essar Group’s world-class projects and supporting infrastructure, constructing most of the group’s current asset base of US$ 6 bn (Rs. 270 billion). That includes a 3.4 MTPA sponge iron plant, a 2.4 MTPA steel mill and a 515 MW power plant at Hazira, a 4 MTPA pelletisation plant in Visakhapatnam, a cold rolling mill in Indonesia and a 10.5 MTPA oil refinery under construction at Vadinar, Gujarat. Indeed, the very origin of the Essar Group was in specialized marine construction. As they acquired a truly wide and solid base of experience in major areas of industrial and infrastructure construction, they evolved from being the Group’s projects

division into Essar Projects Ltd. in 1990 and then into ECL and finally into EC(I)L.

BOARD OF DIRECTORS

SR. NO.	NAME OF DIRECTORS	POSITION
1	Shri. S. N. Ruia	Promoter Director
2	Shri. Rewant Ruia	Director
3	Mr. V. N. Paradkar	Executive Director
4	Mr. T. K. Nagraj	Director
5	Mr. S. V. Venkatesan	Director

Special strengths

Simultaneously, the company grew into a leading EPC contractor for other customers, both domestic and international. Here too, both our exposure and our expertise are wide ranging. Apart from our EPC capability in oil and gas, power and steel, marine construction is one of our special strengths. We have a unique capacity for underwater rock blasting and dredging. We also have significant skills in constructing irrigation canals, siphons and bridges. ECIL has a special expertise in pipelines for oil, gas and water as the only Indian company with over 20 years of experience in cross-country, onshore and offshore pipelines, from construction to commissioning. We have laid 2,500 km of pipelines and built 150 km of the prestigious Narmada canal. We are well equipped for infrastructure construction particularly in the areas of ports, jetties and roads; we have built hundreds of kilometers of roads, including national and state highways and expressways.

Equally noteworthy are our long-term relationships with over 20 strategic partners, including multinational construction and engineering companies from around the world. For example, currently a consortium of ECIL, Stroystransgaz of Russia is the EPC contractor for the 269 KM Bailadilla-Vizag slurry pipeline. This is world's second longest slurry pipleine. Along with UEM of Malaysia, it is also building a 200-km, four-lane highway in Karnataka worth US$ 156 m (Rs. 720 crore).