Certificate Renewal

Report for:

Essar Steel Processing & Distribution UK Ltd

LRQA reference: Assessment dates: Assessment location: Assessment criteria: Assessment team: LRQA office:

LRQ 0911213/ 0033 11th - 14th July 2011 Dudley ISO 9001:2008 ISO 14001:2004 Tim Dove LRQA Coventry

Contents
1. 2. 3. 4. 5. 6. 7. Executive report ........................................................................................................ 3 Assessment summary ............................................................................................... 4 Assessment findings log - ISO 9001:2008 .............................................................. 12 Assessment findings log - ISO 14001:2004 ............................................................ 13 Assessment schedule ............................................................................................. 14 Assessment plan ..................................................................................................... 16 Certificate details ..................................................................................................... 18

Attachments

This report was presented to and accepted by: Name: Job title: Stuart Hill Environmental and Quality Supervisor

Lloyd's Register Quality Assurance Limited, its affiliates and subsidiaries and their respective officers, employees or agents are, individually and collectively, referred to in this clause as "LRQA". LRQA assumes no responsibility and shall not be liable to any person for any loss, damage or expense caused by reliance on the information or advice in this document or howsoever provided, unless that person has signed a contract with the relevant LRQA entity for the provision of this information or advice and in that case any responsibility or liability is exclusively on the terms and conditions set out in that contract. Form: MSBSF43000 revn 3.3 21 April 2011 Report: LRQ0911213/0033 - 16-Aug-11 Page 2 of 18

1. Executive report
Assessment outcome:
As no major non-conformance has been raised during the course of this visit, compliance to the requirements of both ISO 9001:2000 and ISO 14001:2004 has been demonstrated and therefore continuation of certification to those standards, as an EQMS certificate is recommended. A draft certificate is included on page 18 of the report.

System effectiveness and continual improvement:

The company is and has been, despite some difficult trading times, maintaining comprehensive Environmental and Quality Management Systems, which are designed to meet and are demonstrably meeting policy commitments and core values which include continual improvement, prevention of pollution and customer satisfaction. Becoming part of Essar Steel is seen as an opportunity to re-double the efforts to improve the performance of the management systems.

Areas for management attention:

The only specific area for management attention, identified during this visit relates to testing of emergency plans as noted in the findings log.

Form: MSBSF43000 revn 3.3 21 April 2011

Report: LRQ0911213/0033 - 16-Aug-11

Page 3 of 18

2. Assessment summary
Introduction:
An opening meeting was held with Phill, Guest Operations Director and Stuart Hill, Quality and Environmental Supervisor, during which it was confirmed that Wayne Roden, the ex Quality and Environment Manager, now working for the EEF, would be attending on day 3. Mr Roden has been retained since he left the company to assist in the transfer of responsibility for the QMS/EMS to Stuart Hill, and in particular to provide continuity in managing the IPPC Permit This visit was a combined QMS surveillance and EMS re-approval (the programme for which is included below). At the conclusion of the visit it was apparent that the newly appointed (at the beginning of this year) has gained knowledge and understanding of both the QMS and EMS and with further mentoring from Mr Roden (who has been retained for a further year) will eventually be competent to maintain and improve both systems as well as take overall responsibility for the IPPC Permit.

Assessor: Tim Dove

Form: MSBSF43000 revn 3.3 21 April 2011

Report: LRQ0911213/0033 - 16-Aug-11

Page 4 of 18

Assessment of:

Management Elements Internal Audits Management Review Customer Complaints External Communications

Auditee(s): Phill Guest

Stuart Hill Jenny Lee

Audit trails and sources of evidence:

Environmental and Quality Management System Internal Audit Timetable 2011 QMS Audits Coil pickling sales order process 04/07/11 Receipt of coil to despatched Product22/04/11 EMS Audits Producer Packaging Regulations Compliance - 21/06/11 CQEMSR Meeting Minutes 06/07/2011 Customer Complaints QC000449 QC 000458 Environmental Complaints EC011 and 012

Evaluation and conclusions:

Internal audits and CQEMSR meeting minutes indicate that compliance with procedures is generally of a high order. It was observed that some confusion had existed as to how corrective actions and improvements raised during internal audits should be designated. During discussions it was clarified that where a failure to meet a requirement is identified during an audit, the problem should be recorded as a non-conformity requiring corrective action and subsequent follow up, whereas an improvement should be identified as a potential preventive action and recorded and followed up as necessary. The confusion did not result in appropriate actions not being taken, but it is suggested that the format of the corrective action and preventive action forms could usefully be amended to clarify the use in relation to actions to be taken and subsequent follow up. Customer complaints follow a similar pattern that has been noted over the years, with one exception that one large supply of galvanised material form the parent group has been found to contain a number of defects. This problem had only recently been identified and the early indications were that the problem is being dealt with in a way which will minimise disruption to customers. The two EMS complaints (received via the EA) relate to two separate instances of a reported odour from two separate locations in the area surrounding the company. Extensive investigations within the company, including a review of the monitoring data from stack emissions recorded at the times relating to the complaints did not reveal any abnormalities and it was concluded that the source of the odours was very unlikely to be emissions from the processing plant within the company. The detail of the investigation was passed to the EA who confirmed in an e-mail on the 6th June 2011 that they were satisfied with the outcome. Nonetheless, the complainants have been given a direct telephone number for the Operations Director so that if any further concerns are apparent complainants can make direct contact.

Form: MSBSF43000 revn 3.3 21 April 2011

Report: LRQ0911213/0033 - 16-Aug-11

Page 5 of 18

Assessment of:

Site Tour

Auditee(s): Stuart Hill

Audit trails and sources of evidence:

External and Internal Conditions Housekeeping Spill Kits Spill Kit Location Map

Evaluation and conclusions:

House keeping and general site conditions (internal and external) have been improving with every visit, to the point that during the current walk round, conditions in all areas were observed to have been maintained to a very high order.

Assessment of:

Environmental Aspects Legal and Other Requirements Evaluation of Legal Compliance

Auditee(s): Stuart Hill

Audit trails and sources of evidence:

Significant Aspects Register Legal Register Refcom registration- First Air UK Ltd REF1005789 Engineers Registration J11-F Gas Cat 1 Steven Rolls James William Bromley Waste Transfer Notes Veolia 103655 01/01/11 to 31/12/11 Consignment Note (including part E) Excel Waste Services Limited AAE127/E1446 18/04/11 Evaluation of Legal Compliance th Producer Responsibility Obligations (Packaging Waste) 7 July 2011 th Water Resources Act, Planning Permission P08/1220 - 17 May 2011 th Water Industries Act, Discharge to Sewer 17 May 2011 th IPPC Permit KP373PL 30 June 2010 Packaging data return 2010 02/02/11 Essar Steel Incoming Packaging Weights Spreadsheet

Evaluation and conclusions:

Veolia has provided waste carriers licences and waste management licences for disposal sites which have been verified using the public register. The waste disposal control spreadsheet currently being updated to include packaging waste associated with steel sales which is now being gathered to for 2011 submission. Evaluation of legal compliance audits have confirmed compliance in those areas audited.

Form: MSBSF43000 revn 3.3 21 April 2011

Report: LRQ0911213/0033 - 16-Aug-11

Page 6 of 18

Assessment of:

IPPC Permit

Auditee(s): Stuart Hill

Audit trails and sources of evidence:

PPC Permit EPR/K3732PL Variation Notice Number EPR/KP373PL/V002 EA Compliance assessment Report 01-04-11 Severn Trent Water Consent Variation 005907V st st Emissions to Sewer report 1 January 2011 to 31 March 2011 st th Emissions to Air reports 1 January 2011 to 30 April 2011 Annual reports for 2010 Waste Disposal and Recovery Energy use Water Use Pollution Inventory Report -2010 MCerts Audit -01/12/10

Evaluation and conclusions:

All documents and data reviewed were found to be satisfactory.

Form: MSBSF43000 revn 3.3 21 April 2011

Report: LRQ0911213/0033 - 16-Aug-11

Page 7 of 18

Assessment of:

Sales and Toll Processing

Auditee(s): Mick Pickett

Tim Jones Jenny Lee Mark Farmer George Davies Mark Fellows

Audit trails and sources of evidence:

The steel sales and toll processing processes were reviewed by trailing a number of orders/coils through order receipt processing (de-coiling, pickling, slitting, SCS, as required)- packing weighbridge collection/despatch. Sales Sales Quote Procedure Essar Steel Defect Material Procedure Sales Customers Hadley Rolled Products Libra Systems Barkers Engineering Midtherm Lasers High Speed Lasers Purchase Order Numbers HRP113002992, RO9035, RO9057, 38743 Order Acknowledgements E543, E599, E601 Coil Numbers A8329, A8247, A7855, A8290 Weighbridge Tickets Incoming Coils A9161, A9162, A9149 Mill Certificates P24102, CM3553000A, 618102, 24103 De-coiling Customers European Sheet Steel Ltd Halco Hawthorn Trading Company Walker Steels Coil numbers A9092, A7936, A9007, A8205. Pickling/SCS Customers Hill Steels TATA Steels Coil Numbers A9088, A8667, A8595, A8131 Material Defect Forms 33868, 33881, 33882 Slitting Customers Hill Steels Walker Steels Essar Steels (Internal Slitting Order 0281) Coil Numbers A8131, A9137, A8396 Processed Stock Coil Numbers A4489, A1419, A8932, A9200, A8583 T4547-A, X10644-A, A240, A5874-A

Form: MSBSF43000 revn 3.3 21 April 2011

Report: LRQ0911213/0033 - 16-Aug-11

Page 8 of 18

Evaluation and conclusions:

All documents and data reviewed were found to be satisfactory. Procedures relating to the sales process, which were identified as requiring clarification during the last CTA visit have been addressed as follows: The Sales Quote Procedure has been clarified by reference to relevant sales documentation. The off page connector in the Essar Steel Defect Material Procedure now points to the actual procedure which will be used to implement and control the decision making process when processing is to continue.

Assessment of:

Purchasing

Auditee(s): Jenny Lee

Stuart Hill Wayne Roden

Audit trails and sources of evidence:

Supplier and Contractor Management Spreadsheet Supplier Questionnaires Purchase Orders 31671 31855 31838 31760 31768 Suppliers Humphries Pallets Tessenderlo (HCl) Alcontrol (Sample Analysis) Chemetal SG World Certificate of analysis (HCl) - 51157888

Evaluation and conclusions:

Purchasing documents and data were found to be satisfactory. Questionnaires have been sent to suppliers as required by the purchasing procedure and so far over half of those have been completed and returned. Analysis is ongoing and will be completed, when it is deemed that as many as possible of the questionnaires have been received. It was confirmed that ISO 9001:2008 does not specifically require questionnaires to be sent to suppliers and that the opportunity to monitor supplier performance through the POP (purchase order process) system, particularly when the current upgrade to the system is completed.

Form: MSBSF43000 revn 3.3 21 April 2011

Report: LRQ0911213/0033 - 16-Aug-11

Page 9 of 18

Assessment of:

Emergency Preparedness and Response

Auditee(s): Stuart Hill

Wayne Roden

Audit trails and sources of evidence:

Pollution Incident Response Plan Accident Plan Fire Response Plan Spill Response Plan Local Authority Potential Receptors Map Emergency Contact Information Sheet Incident Record Environmental Awareness Introduction

Evaluation and conclusions:

The company has extensive emergency response procedures and there is evidence that the fire and spill response procedure is effective in that a recent fire in a skip was dealt with by the fire brigade and the resultant fire water, which was fully contained within the skip, was disposed of through the effluent treatment plant. Emergency Preparedness and Response is evident through various plans and feedback from incidents, However testing of emergency preparedness is overdue and this has been raised as a minor nonconformance. Plans are already in place to conduct testing as noted in the corrective action proposal.

Assessment of:

Training

Auditee(s): Stuart Hill

Phill Guest

Audit trails and sources of evidence:

Training Matrices Environmental, Quality and H&S Environmental Awareness Inroduction/Refesher training material EMS Representative training courses: Associate Certificate in Environmental Management New Quality Systems Manager

Evaluation and conclusions:

The documents and data reviewed have confirmed that the company has maintained the high level of commitment and investment in training activities.

Form: MSBSF43000 revn 3.3 21 April 2011

Report: LRQ0911213/0033 - 16-Aug-11

Page 10 of 18

Assessment of:

Maintenance Calibration

Auditee(s): Stuart Hill

Audit trails and sources of evidence:

Breakdown Repairs to Machines Procedure Monthly Preventative Checks Procedure Monthly Preventative Maintenance Check-sheets - 2/3/11 to 7/6/11 Plant and Site Maintenance Job Schedule V Notch, Hydroranger 200 and AWE pH meter Certificate No 013/03/11 Micrometers 27, 59, and 103 Vernier 2 Gauge Blocks Certificate 01666G Digital Calliper SERV 088 Certificate U111578

Evaluation and conclusions:

All documents and data reviewed were found to be satisfactory.

Assessment of:

Continual Improvement

Auditee(s): Stuart Hill

Phill Guest

Audit trails and sources of evidence:

CQEMSR Meeting Minutes 06/07/2011 Quality Management Systems Programmes 2011-2012 Environmental Management Systems Programmes 2011-2012

Evaluation and conclusions:

The company has always had a significant range of improvement projects for both environmental and quality issues. Since being acquired by Essar Steel, the company is required to bring the various current initiatives into line with the Essar corporate continuous improvement programme, which will involve each employee being assigned Kpis, the measuring and monitoring of which will be fully transparent on the intranet. It is anticipated that the new system will be fully in place by the end of the year. Typical; of those improvement improvements which have been set are: Reduce Water Usage by 1% -31/01/12 Investigate and Implement new recycling schemes to further divert waste from landfill 01/03/2012 Commission a Carbon Trust Energy Efficiency Survey 31/05/2012 Improve Communication of customer complaint information - Continuous Transfer the documented EMS/QMS to the intranet and ensure its availability at all workstations

Form: MSBSF43000 revn 3.3 21 April 2011

Report: LRQ0911213/0033 - 16-Aug-11

Page 11 of 18

3. Assessment findings log - ISO 9001:2008

Grade 1 Status 2 Finding 3 Corrective action review 4 Process / aspect 5 Date 6 Reference 7 Clause 8

1. Grading of the finding * 6. Date of the finding * Major NC = Major nonconformity

2. New, Open, Closed 7. YYMM<Initials>seq.# Minor NC = Minor nonconformity

3. Description of the LRQA finding 8. Clause of the applicable standard Report: LRQ0911213/0033 - 16-Aug-11

4. Review by LRQA

5. Process, aspect, department or theme

Form: MSBSF43000 revn 3.3 21 April 2011

Page 12 of 18

4. Assessment findings log - ISO 14001:2004

Grade 1
Minor NC

Status 2
New

Finding 3
The Emergency Preparedness testing procedure requires that spill procedures should be tested at a frequency of 12months for minor spills and 18 months for major spills. The last tests were conducted in June 2009.

Corrective action review 4

Process / aspect 5

Date 6
14 Jul 11

Reference 7
1107TJD1

Clause 8
4.4.7

Scenarios are currently under discussion between Emergency Preparedness and the EMS representative, production management Response and the training consultant with regard to suitable test areas and materials The tests will be held to encompass all personnel designated within a specific spill response team. Tests are planned to start in August after the company shutdown

1. Grading of the finding * 6. Date of the finding * Major NC = Major nonconformity

2. New, Open, Closed 7. YYMM<Initials>seq.# Minor NC = Minor nonconformity

3. Description of the LRQA finding 8. Clause of the applicable standard Report: LRQ0911213/0033 - 16-Aug-11

4. Review by LRQA

5. Process, aspect, department or theme

Form: MSBSF43000 revn 3.3 21 April 2011

Page 13 of 18

5. Assessment schedule
Certificate renewal
Page 14 of 18

Visit type > Due date > Feb 12 Start date > 16/02/12 End date > 16/02/12 1 Assessor days > Process / aspect

Final selection will be determined after review of management elements and actual performance

QMS Processes Steel Sales Coil Pickling De-coiling Slitting SCS Stock Control Stores/Despatch Purchasing Training Document Control Calibration EMS Processes Pickling Plant General Processing Areas Energy Management Waste Management Purchasing/Suppliers Training Warehouse Packaging Waste (Wastepack) Contractor Management IPPC Permit Emergency Preparedness

Form: MSBSF43000 revn 3.3 21 April 2011

Report: LRQ0911213/0033 - 16-Aug-11

Surveillance

Next visit details

Visit type Surveillance Assessor days 1 Due date Feb 12 Locations Dudley Activity codes 2710, 5120, 281102 Team Tim Dove Criteria ISO 9001:2008, ISO 14001:2004 Remarks and instructions Actual start / end dates 16 Feb 2012
th

Note: Opening meetings will be at 09:30, and closing meetings at 16:00, unless agreed otherwise.

Form: MSBSF43000 revn 3.3 21 April 2011

Report: LRQ0911213/0033 - 16-Aug-11

Page 15 of 18

6. Assessment plan
Assessment type Initial / Re-certification / Change to Approval Assessment team Tim Dove
th

Assessment criteria ISO 9001:2008 ISO 14001:2004 Assessment dates Issue date

11 July 2011 Introductory meeting with management to explain the scope of the visit, assessment methodology, method of reporting and to discuss the company's organisation (approximately 30 minutes). The Team Leader will agree a time to meet with senior management to discuss policy and objectives for the management system. LRQA team briefing for a team of two or more assessors and/or experts. Discussion of all outstanding issues from previous visits. System Changes Internal Audits and Management Review Corrective and Preventive Actions Continual Improvement Use of Logos Lunch. Environmental Aspects Legal and Other Requirements and Evaluation of Compliance Report writing. Close.

12 July 2011 Review of findings from previous day. Review of the assessment plan for the day. EA Environmental Permit Lunch. Site Tour Waste Management and Packaging Waste (Wastepack) Purchasing Report writing. Close.

th

Form: MSBSF43011/0.3 0806

Report: 0911213/0033 - 16 August 2011

Page 16 of 18

13 July 2011 Review of findings from previous day. Review of the assessment plan for the day. Sales Decoiling Slitting Lunch. Pickling SCS Report writing Close. 14 July 2011 Review of findings from previous day. Review of the assessment plan for the day. Emergency Preparedness and Response Maintenance Calibration Lunch. Training Document Control Review of days findings. Preparation of final report. Closing meeting with management to present a summary of findings and recommendations.
th

th

Form: MSBSF43011/0.3 0806

Report: 0911213/0033 - 16 August 2011

Page 17 of 18

7. Certificate details

DRAFT CERTIFICATE OF APPROVAL

This is to certify that the Management System of:

Essar Steel Processing & Distribution UK Ltd Pensnett Road, Dudley, West Midlands, United Kingdom
has been approved by Lloyd's Register Quality Assurance to the following Management System Standards:

ISO 9001:2008 ISO 14001:2004

The Management System is applicable to:
Purchase and sale of strip mill products. Sub-contract slitting and de-coiling of wide strip, flat rolled and coiled steels. Coil to coil pickling of mild, low alloy and carbon steels. SCS cleaning of hot rolled coiled steels. Steel sales. Technical review date: Type of certificate:
X Single certificate Certificate per location
(Complete this form for each location) Office use only

Certificate expiry:

Office use; Assessor enter if non-standard

Multi-site certificate
(Complete additional multisite form)

Multiple languages
(Complete required forms for each required language)

(Complete this form)

Accreditation / number of certificates:

X UKAS / RvA / / Not accredited /

Reason for issue of certificate

Initial certification Change of certification X Certificate renewal

Further instructions: (e.g. module and / or annex for directives):

QA Register entry (for UKAS accreditation only)

Required

Not required

Form: MSBSF43002/0.3 - 406

Report: 0911213/0033 - 16 August 2011

Page 18 of 18