contents - VISA Steel

CONTENTS

OverviewConsolidating Businesses, Unlocking Value ................................1

About VISA Steel ................................................................................12

Vision and Values ...............................................................................13

Strategic Goals.....................................................................................14

Strategy and Mission ........................................................................15

Financial and Operational Performance ...................................17

Chairman’s Statement .....................................................................18

Managing Director’s Review ..........................................................20

Profile of the Board of Directors ...................................................22

Corporate Social Responsibility.....................................................24

Statutory ReportsReport of the Directors .....................................................................26

Management Discussion and Analysis .....................................36

Report on Corporate Governance ................................................42

Financial StatementsStandalone ............................................................................................57

Consolidated ........................................................................................96

VISA Steel has created a world class facility at Kalinganagar in Odisha, which is India’s

most attractive State for Special Steel, Ferro Chrome and Coke making and accounts for

33% of total Iron Ore reserves, 28% of Coal reserves and 97% of Chrome ore reserves

in India. Kalinganagar Industrial Complex is a large Steel hub in India and investment

destination with excellent Road, Railway and Port connectivity.

The Company has a strong product portfolio with multiple revenue and EBIDTA streams

from Special Steel, Ferro Chrome, Coke and Power businesses. Whilst the Ferro Chrome,

Coke & Power businesses have been doing well, the Special Steel business has been

facing challenges due to non-availability and high prices of Iron Ore which along with

high interest costs and volatile foreign exchange rate have impacted the performance

of the Company.

VISA Steel is now focusing on consolidating its operations and improving efficiencies

as well as restructuring its loans and unlocking value through strategic partnerships to

raise equity and deleverage.

CONSOLIDATING BUSINESSES, UNLOCKING VALUE

SPECIAL STEEL BUSINESS

2

OverviewA n n u a l R e p o r t 2 0 1 1 - 1 2

VISA Steel has set up a world class fully integrated 0.5 million TPA Special Steel Plant with Blast Furnace,

Sponge Iron Plant, Steel Melting Shop (EAF, LRF & VD) & Rolling Mill (Bar & Wire Rod Mill) for supply to

the automobile, construction, infrastructure, engineering, railway and defence sectors.

Due to the sharp drop in availability of Iron Ore and the consequent increase in prices, the Special Steel

business has been adversely impacted. The Company is on the verge of getting Iron Ore Mines in Odisha.

The Iron Ore availability is also likely to improve from OMC’s Daitari Mines after getting forest clearance

for Baliparvat Stockyard and the start up of the Iron Ore Pellet Plant being set up by BRPL. VISA Steel also

plans to set up an Iron Ore Sinter Plant to ensure continuous availability of Iron Ore for smooth running

of the Blast Furnace and enhance the profitability of the Special Steel business.

VISA Steel is also exploring option for having a strategic partnership with an Iron Ore Mining Company

or a Global Steel Player.

3

Statutory Reports Financial Statements

FERRO CHROME BUSINESS

4


VISA Steel is operating a 50,000 TPA Ferro Chrome Plant for sale to various Stainless Steel Plants globally.

In addition, a 100,000 TPA Ferro Chrome Plant is being implemented through VISA BAO, a Joint Venture

with Baosteel, China. This would make VISA among the leading player in the Ferro Chrome industry.

The demand for Ferro Chrome has been strong due to supply constraints in South Africa because of

inadequate availability of Power. With power cuts being imposed on power intensive industries in South

Africa, consumers of Ferro Chrome globally are diversifying their Ferro Chrome sourcing base to the other

countries like India.

5


COKE BUSINESS

6


VISA Steel is operating a 400,000 TPA Coke Oven Plant with surplus

quantity of 250,000 TPA over and above its captive consumption for

sale in the market to integrated Steel Plants.

Demand for Coke has been strong as it is an import substitute and

SAIL has emerged as a large buyer.

VISA Steel is evaluating the option of growing the merchant Coke

business through a tie up with SAIL either independently or along

with a strategic partner.

7


CAPTIVE POWER BUSINESS

8


Energy is one of the key cost components in Steel and Ferro Chrome Operations. The low cost and

uninterrupted availability of power is critical to facilitate operations, reduce external dependence and

optimise costs.

VISA Steel is operating a 75 MW captive Power Plant. Due to rising power tariffs, the captive Power Plant

contributes significantly to margins. The Company plans to eventually add Captive Power generating

capacity along with commencement of production at the Coal Block at Patrapada in Talcher, Odisha.

9


RESOURCE INTEGRATION

10


Having completed full integration on the manufacturing facilities, the focus is now to mine our own Iron

Ore, Chrome Ore and Coal to secure stable raw material supplies and lower costs.

We have a 54 million tonne share of a coal block in Patrapada at Talcher which is under development.

We are also on the verge of getting Iron Ore mines in Odisha and Chhattisgarh. We have been allotted

prospecting licence for Chrome Ore mines in Manipur and are in the process of developing the same. We

are further exploring opportunities to acquire coal mines in Australia and Indonesia. The consolidated

affect of mining our own iron ore and coal shall lead to strengthening our operating margins.

11


ABOUT VISA STEEL

Registered office in Bhubaneswar, Corporate Office in Kolkata and manufacturing facilities at

Kalinganagar and Golagaon in Odisha and Raigarh in Chhattisgarh.

Shares listed on the Bombay Stock Exchange and the National Stock Exchange.

Current Facilities at Kalinganagar, Odisha

Facility Capacity

Coke Oven Plant 400,000 TPA

Ferro Chrome Plant 50,000 TPA

Pig Iron Plant 225,000 TPA

Sponge Iron Plant 300,000 TPA

Power Plant 75 MW

Steel Melt Shop 500,000 TPA

Bar & Wire Rod Mill 500,000 TPA

Projects Under Implementation in Odisha

VISA BAO –100,000 TPA Ferro Chrome Plant in Odisha, in joint venture with Baosteel.

Projects Under Planning in Odisha, Chhattisgarh and Madhya Pradesh

Expansion of Special Steel to 1 million TPA & Captive Power Plant to 375 MW at Kalinganagar in Odisha.

2.5 million TPA Steel Plant and 500 MW Captive Power Plant at Raigarh in Chhattisgarh.

1.25 million TPA Steel Plant, 100,000 TPA Manganese Alloy Plant and 300 MW Captive Power Plant in

Madhya Pradesh.

A n n u a l R e p o r t 2 0 1 1 - 1 2

12

Overview

“Emerge as a low cost & efficient producer of value added steel products with captive coal, mineral resources and power”

VALUESTransparency – We are transparent and

honest in our profession to all our stakeholders

Team Work – We work together as a team

to benefit from our complementary strengths

Passion – We are passionately committed

to delivering excellence in performance

Governance – We are committed to

best standards of safety, corporate social

responsibility and corporate governance

Attitude – We demonstrate ownership in

our attitude to create sustainable value for

shareholders

VISION

13


STRATEGIC GOALS

Integrate across value chain with captive mines and power.

Leadership in business segment through market share.

Maximize shareholder value by Market Cap and ROCE.

Family of capable, motivated and happy employees.

Build partnerships with customers and suppliers.

A n n u a l R e p o r t 2 0 1 1 - 1 2Overview

14

STRATEGY AND MISSION

Integrate across value chain with captive mines and power

Securing mining leases for key raw materials – iron ore, chrome ore & coal.

Build captive power plants.

Select technologies with long-term competitiveness.

Leadership in business segment through market share

Understand the steel market, identify products with demand growth and set market share goals.

Develop strong sales & distribution network with corporate branding.

Maximize shareholder value by Market Cap and ROCE

Ensure capital allocation for growth to generate better ROCE and Market Cap than industry peers.

Create assets at competitive capital costs and operate efficiently.

Build partnerships with customers and suppliers

Be preferred supplier through competitive pricing and high standards of quality and service.

Build and sustain long-term relationships with strategic customers and suppliers.

Family of capable, motivated and happy employees

Recruit effectively.

Train and develop people continually.

Provide safe and clean working environment.

Develop sense of organisational ownership and teamwork.

15


Steel Melting, Billet Casting & Rolling Mill in operation


16

TOTAL REVENUE AND EBIDTA

FINANCIAL AND OPERATIONAL PERFORMANCE

Operational Highlights FY’12 FY’11Coke (in MT) 354,634 340,339

Ferro Chrome (in MT) 22,368 44,372

Hot Metal (in MT) 84,454 46,233

Sponge Iron (in MT) 157,356 134,538

Power (in Million Units) 435 226

Financial Highlights FY’12 FY’11Revenue 13,919 13,466

EBIDTA 1,061 2,376

EBIDTA Margin 7.6% 17.6%

PAT (1,189) 514

Net Margin (8.5%) 3.8%

Share Capital 1,100 1,100

Net Worth 2,344 4,130

(Rs. Million unless indicated otherwise)

Total Revenue (Rs. million)

13,91913,466

11,833

FY’10 FY’11 FY’12

EBIDTA (Rs. million)

FY’10 FY’11

1,061

2,3762,232

FY’12

17


CHAIRMAN’S STATEMENT

Dear Shareholders,

The financial year 2011-12 has been one of the most

challenging years for the Company. The combined effect

of European debt crisis and global economic slowdown

along with the domestic challenges of non availability and

high cost of raw material have impacted the Iron & Steel

industry and the performance of the Company.

The Company has multiple revenue and EBIDTA streams

from Coke, Ferro Chrome, Special Steel and Power business.

The Coke, Ferro Chrome and Power business is performing

well but it is unfortunate that whilst the special steel

making facilities are completed, the Iron Ore challenges

have impacted the Special Steel business adversely. This

coupled with high interest rates and foreign exchange

fluctuations due to the volatile global environment has

impacted the Steel industry in India and has resulted in

losses being suffered by the Company.

VISA Steel is now focused on consolidating its businesses

and improving efficiencies as well as restructuring its loans

and unlocking value through strategic partnerships to raise

equity and deleverage.

Annual Results

For the year ended 31 March 2012, the Company

recorded a revenue growth to Rs.13,918.96 million from

Rs.13,466.45 million in 2010-11. However, the EBIDTA

decreased to Rs.1,060.62 million from Rs.2,376.09 million

in the previous financial year. PAT fell from Rs.513.77

million during the previous financial year to a loss of

Rs.1,188.54 million during financial year 2011-12.

The growth in revenues is driven by sales volume growth

for Coke and Pig Iron and better price realisations from

Sponge Iron, inspite of lower sales volumes for Ferro

Chrome. The Company had low production volumes in its

iron and steel making facilities due to non availability and

high cost of Iron Ore.

The Industry

The global Steel industry has witnessed reasonable

demand growth and Steel making capacities have

gradually shifted to emerging markets such as China

and India. However, the high cost of raw material and

increased volatility in prices have put pressure on margins.

India is poised to be a dominant player in the Global Steel

industry with a strong growth in its economy. Demand for

steel products is being driven primarily by infrastructure

and consumption led sectors including construction,

automobile, white goods and oil & gas. However, the Steel

industry in India has suffered due to the non availability

and high prices of Iron Ore, high interest rates and foreign

exchange volatility.

During the year, the export tax on Iron Ore and Chrome

Ore has been increased to 30% to discourage exports of

such primary raw material and encourage value addition

of natural resources within the country. This has been an

encouraging step and should enhance capacity addition

for Iron Ore Sinter and Pellet Plants within the Country to

meet the supply constraints in Iron Ore.

A n n u a l R e p o r t 2 0 1 1 - 1 2

18

Overview

There is a huge growth potential in Steel consumption in

India given that per capita steel consumption is very low

compared to China and the global average. The States

of Odisha, Chhattisgarh & Jharkhand which account

for majority of the iron ore and coal reserves are most

attractive locations for setting up Steel plants.

Vision & StrategyThe Company is focused on its vision to emerge as a low

cost and efficient producer of value added steel products

with captive coal, mineral resources and power.

Having completed setting up of value addition facilities,

the Company is now focused on mining its own Iron Ore,

Chorme Ore and Coal in order to improve margins. Since

the Company has already qualified all the required criteria,

it is confident of securing a captive Iron Ore mining lease

in Odisha and Chhattisgarh in the very near future. The

Patrapada Coal block wherein the Company has a share

of 54 million tonnes is currently under development. The

Company has also been granted a Prospecting Licence for

a Chrome Ore bearing area in Manipur.

VISA Steel and Baosteel Resources have created a

strategic partnership in the Ferro Chrome business through

the formation of VISA BAO Limited which is setting up an

Integrated Ferro Chrome Complex in Odisha. The project

is progressing well and nearing completion. VISA Steel

is also planning strategic partnerships in its Special Steel

and Coke business to be able to unlock value and grow the

business.

OutlookOur revenues and margins from the Coke, Ferro Chrome

and Power businesses shall drive the Company forward

inspite of the Iron Ore challenges that is impacting the

Special Steel business. It is expected that the Iron Ore

constraints shall ease towards the second half of the

current financial year.

I would like to place on record my sincere appreciation

and thank the entire team of VISA Steel for their

relentless commitment inspite of the challenging business

environment. I am also grateful to the members of the

Board of the Company for their invaluable guidance and

contribution. I would also like to express my sincere thanks

to all the stakeholders for their confidence and faith and

to all the Government, Regulatory Authorities & Banks for

their valued support.

Warm Regards,

Vishambhar Saran

19


MANAGING DIRECTOR’S REVIEW

We have created a world class facility at Kalinganagar in

Odisha, which is India’s most attractive State for Special

Steel, Ferro Chrome and Coke making and accounts for

33% of total Iron Ore reserves, 28% of Coal reserves

and 97% of Chrome ore reserves in India. Kalinganagar

Industrial Complex is a large Steel hub in India and

investment destination with excellent Road, Railway and

Port connectivity.

However, the financial year 2011-12 was a challenging

year at VISA Steel due to various external factors.

During the year under review, the Company’s financial

performance has been adversely affected due to the non-

availability of raw material, increasing raw material costs,

high bank interest rates and volatile foreign exchange.

Due to shortage in availability of iron ore, Iron & Steel

making facilities, i.e. Blast Furnace, DRI, SMS & Rolling Mill

operated at very low production level and the Company

was unable to achieve its revenue potential.

Special Steel businessDuring the year, Steel production was 45,772 MT, Hot

Metal production was 84,454 MT compared to 46,233 MT

in 2010-11 and Sponge Iron production was 157,356 MT

compared to 134,538 MT in 2010-11.

VISA Steel has set up fully integrated 0.5 million TPA

Special Steel Plant with Blast Furnace, Sponge Iron Plant,

Steel Melting Shop (EAF, LRF & VD) & Rolling Mill (Bar &

Wire Rod Mill) for supply to the automobile, construction,

infrastructure, engineering, railway and defence sectors.

Due to the sharp drop in availability of Iron Ore and the

consequent increase in prices, the Special Steel business

has been adversely impacted. The Company is on the

verge of getting Iron Ore Mines in Odisha. The Iron Ore

availability is also likely to improve from OMC’s Daitari

Mines after getting forest clearance for Baliparvat

Stockyard and the start up of the Iron Ore Pellet Plant

being set up by Brahmani River Pellets Limited (BRPL) at

Kalinganagar. VISA Steel also plans to set up an Iron Ore

Sinter Plant to ensure continuous availability of Iron Ore

for smooth running of the Blast Furnace and enhance the

profitability of the Special Steel business.

Ferro Chrome businessThe Ferro Chrome production during the year was

22,368 MT compared to 44,372 MT in 2010-11. The

drop in production of Ferro Chrome has been due to non

availability and high prices of Chrome Ore from Orissa

Mining Corporation (OMC). The matter has been taken

up with the Government of Odisha and OMC and it is

expected that OMC shall change its price fixing policy for

Chrome Ore. This should ensure availability of Chrome

Ore at reasonable prices going forward.

The demand for Ferro Chrome has been strong due to

supply constraints in South Africa because of inadequate

availability of Power. The Company has also been allotted

a prospecting licence over a Chrome Ore area in Manipur.

A 100,000 TPA Ferro Chrome Plant is being implemented

through VISA BAO, a Joint Venture with Baosteel

Resources, China. The project is nearing completion and

would make VISA among the leading player in the Ferro

Chrome industry.

A n n u a l R e p o r t 2 0 1 1 - 1 2

20

Overview

Coke businessThe Coke production during 2011-12 was 354,634 MT

compared to 340,339 MT during the previous year.

The Coking Coal prices have been weakening over the year

and the Company has been procuring Coking Coal with

monthly pricing which has been beneficial. The Company

is a leading supplier of consistent and high quality Coke

to various Iron and Steel plants in Eastern India. Demand

for Coke has been strong as SAIL has emerged as a large

buyer.

Captive Power businessDuring the year, Power generation has witnessed a strong

growth to 435 million units compared to 226 million units

in 2010-11.

Due to rising power tariffs, the captive Power Plant has

contributed significantly to margins. The Company is

expediting development of the Coal Block at Patrapada in

Talcher, Odisha and eventually plans to add captive Power

generation along with the commencement of production

from the Coal block.

FinanceThe Company is focussing on consolidating its operations

and improving operational efficiencies and reduction in

cost. In view of the losses suffered by the Company and

the consequent impact on cash flows and ability to service

loan repayments, we have also approached our lenders for

restructuring our loans. The Company also plans to raise

equity through financial investors or strategic partnerships

in various businesses.

Human Resource Initiative The Company has implemented an ESOP Scheme and is

among the few companies in the Steel Sector to offer such

a Scheme. We are focused on training and development

of our employees. We also have a transparent performance

appraisal system for increments and promotions. We

improve our team building and encourage family bonding

through our annual social activities calendar.

Corporate Social ResponsibilityWe acknowledge the roles and responsibilities of a

corporate citizen. In line with our core business philosophy,

concern for Health, Safety and Environment continue to

be one of our key priorities. We have installed better safety

devices at critical locations under proper supervisions in

order to achieve high safety standards. We continue to

direct our community development initiatives in the states

of Odisha and Chhattisgarh in the areas of education,

healthcare, rural development, sports and culture.

I would like to take this opportunity to express my sincere

gratitude to our team for their commitment, dedication

and hard work, in a challenging business environment.

Warm Regards,

Vishal Agarwal

21


Vishambhar Saran,Chairman

Mr. Saran has experience of almost 43 years in the iron & steel

industry, with over 25 years with Tata Steel in the areas of

development & operations of mines, mineral beneficiation plants

and ferro alloy plants, port operations and international trading

of raw materials for the iron & steel industry.

A mining engineer from BHU, he rose to the level of Director

(Raw Materials) in Tata Steel before taking over as Chairman

of the VISA Group in 1994. In a short span of time, he built

the VISA Group into a minerals and metals conglomerate with

a strong global presence in Australia, China, India, Indonesia,

Singapore, South Africa and Switzerland. He is the Honorary

Consul of Bulgaria for Eastern India.

1

Maya Shanker Verma,Chairman, Finance & Banking Committee

Mr. Verma is a career banker with a multilevel and wide ranging

experience of over 51 years, encompassing an understanding of the

commercial, developmental and investment banking as well as asset

management and capital market operations.

A Master of Arts and Certified Associate of the Indian Institute of

Bankers, Mr. Verma held senior-most and critical positions in India’s

financial system and regulatory regimes like Chairman, State Bank of

India, IDBI Bank and Telecom Regulatory Authority of India.

2

Shiv Dayal Kapoor, Chairman, Audit Committee

Mr. Kapoor has over 43 years of rich experience in the minerals and

metals industry. He is the former Chairman of MMTC Limited and

Neelachal Ispat Nigam Ltd. and had been on the Board of many

renowned Public Sector Enterprises.

A B.Sc. in Metallurgical Engineering from BHU and an MBA from the

University of Leeds, UK, he is a recipient of the Best Chief Executive

Gold Award – Rajiv Ratna National Award 2005 and Top CEO of the

year Award 2000 – Indian Institute of Marketing & Management,

amongst others.

3

Debi Prasad Bagchi,Chairman, Selection Committee

Mr. Bagchi brings to the Board his deep knowledge of the

administrative services and the State of Odisha, especially in the

steel & mining sector. He has held prestigious positions of authority

like Additional Secretary, Commerce – Government of India;

Secretary, Ministry of Small Scale Industry – Government of India;

Chief Secretary – Government of Odisha, etc.

A Master of Arts in Economics and an M. Phil in Public

Administration, Mr. Bagchi was also the Chairman cum Managing

Director of Orissa Lift Irrigation Corporation and Managing Director

of Orissa Mining Corporation Limited.

4

PROFILE OF THE BOARD OF DIRECTORS

1 2 3 4


22

Pradip Kumar Khaitan,Chairman, Remuneration Committee

Mr. Khaitan is a legal luminary and has extensive experience in the

fields of commercial & corporate laws, tax laws, arbitration, foreign

collaborations, mergers & acquisitions and corporate restructuring.

Mr. Khaitan is a Bachelor of Commerce, an LLB and an Attorney-

at-Law (Bells Chamber, Gold Medalist). He is the Senior Partner of

Khaitan & Co., a leading Indian law firm and also member of the

Bar Council of India, the Bar Council of West Bengal and the Indian

Council of Arbitration.

5Vishal Agarwal,Managing Director

Mr. Agarwal has over 15 years experience in the iron & steel

industry with hands on experience of setting up Greenfield

projects, having successfully established the plants at Golagaon

and Kalinganagar. He is responsible for overall management of

operations and projects and is the driving force behind many of

the Company’s strategy, finance, marketing and human resource

initiatives.

He holds a Bachelors degree in Economics from the London

School of Economics and a Masters degree in Economics for

Development from Oxford University. He is a Committee Member

of the CII - Eastern Region Council and Indian Chamber of

Commerce.

8

Shanti Narain,Chairman, Share Transfer & Investor Grievance Committee

Mr. Narain brings with him his expertise in strategic management

transport systems, especially the Railways, in the areas of planning,

marketing, monitoring and control of operations & commercial

activities and development of transport infrastructure.

He holds a Masters degree in Science (Mathematics) and had been

the Member, (Traffic) Railway Board for 4 years till February 2001.

He is a member of several committees set up by the Government of

India and professional societies.

6

Subrato Trivedi, Director

Mr. Trivedi, brings with him 41 years of rich experience in the

areas of identification of green field projects, finalisation of

power purchase agreements / fuel supply agreements, project

construction & erection, management, operation & maintenance

of thermal power projects.

Mr. Trivedi is a Mechanical Engineer from the Government

Engineering College, Bilaspur, Ravi Shankar University. He started

his career with companies like SAIL & BHEL and thereafter has

held the position of Regional Executive Director, NTPC Limited

and President, Projects, Adani Power Limited. Mr. Trivedi is also

serving as a Whole-time Director in VISA Power Limited and is

responsible for project construction and overall management of

the project of the Company.

7

Prabir Ramendralal Bose,Deputy Managing Director

Mr. Bose is a Bachelor in Science (Chemical Engineering) from

Regional Engineering College, Rourkela. He has 35 years of rich

experience in steel industry with previous assignments at Rourkela

Steel Plant, SAIL and Southern Iron & Steel Company Limited,

in Coke Oven operations and construction of heat recovery type

stamp-charged Coke Oven battery, amongst others.

Mr. Bose has been associated with the Company since October

2007 and is presently responsible for the entire operations and

projects at the Kalinganagar Plant and Golagaon plant in Odisha.

Mr. Bose has also been appointed as the Managing Director of

VISA BAO Limited, subsidiary company with effect from

1 April 2012.

9

5 6 87 9

23


EducationAt VISA Steel, we truly believe in igniting young minds and in shaping the future of young India. In our endeavours to

further the cause of education we have taken the following steps:

Established two premier educational institutions in Kolkata - The Heritage School and The Heritage Institute of Technology,

through the Kalyan Bharti Trust.

Introduced scholarship opportunities for brilliant and needy students.

Offered scholarships to needy girl students at the Smt. Sarala Devi Saraswati Balika Inter College in the Tilhar district of

Shahjahanpur, Uttar Pradesh.

Provided facilities such as laboratories and science labs to enhance computer literacy at the Smt. Sarala Devi Saraswati Balika

Inter College in the Tilhar district of Shahjahanpur, Uttar Pradesh.

Planning to set up world-class, professionally managed primary and secondary schools in Bhubaneswar and Raipur, with

facilities for extracurricular activities and sports.

VISA Steel has always believed in creation of wealth for all its stakeholders. As a responsible corporate, VISA Steel is

focused on the happiness of people living in its larger neighbouring communities.

We are also committed to the best industry standards in Health, Safety and Environment. The best safety equipment

has been deployed at the critical locations and constant supervision is also done to maintain the highest safety

standards.

VISA Steel’s CSR team works towards improving the living conditions of the underprivileged and makes a positive

difference in their lives. A number of focused initiatives have been implemented particularly in the remote areas

of Odisha and Chhattisgarh. Over the years, VISA Steel has directed its community development in the areas of

education, healthcare, rural development, sports & culture and safety & environment.

CORPORATE SOCIAL RESPONSIBILITY


24

HealthcareHealthcare has been identified as a primary objective in the community development programmes. The following

healthcare initiatives are undertaken on a regular basis:

Medical camps in the backward areas of Odisha and Chhattisgarh.

Contributed to the construction of a blood bank in Jajpur, Odisha.

Engaged in raising awareness on treatment of common diseases and hygiene and providing free medicines and medical

facilities.

Rural Development

Installed bore-wells for providing clean drinking water in the backward areas.

Provided employment according to the rehabilitation policy of the Government.

Contributed towards renovation of the Biraja temple in Jajpur, Odisha.

Participated in international forums for mentally and physically challenged persons by way of financial sponsorship.

Sports & Culture

Sponsored and organised an annual ladies golf tournament at the Tollygunge Club in Kolkata.

Actively helped in promoting contemporary Indian art through exhibitions.

Organised painting competitions to promote talented young artists.

Sponsored sporting activities, particularly cricket tournaments in Kotmar and Patrapalli Villages in Chhattisgarh.

Safety & Environment

Strong team of medical personnel.

Implements regular safety training sessions for employees and contract labour.

Posters displaying the incorporation of safety measures.

Launched water harvesting initiatives to protect ground water levels.

Introduced plantation drive to improve greenery in industrial region.

25



26

Report of the Directors

Dear Shareholders,Your Directors are pleased to present this Sixteenth Annual Report together with the Audited Statement of Accounts

for the year ended 31 March 2012.

FINANCIAL RESULTS

(Rs. Million)

Particulars 2011-12 2010-11

Net Revenue 13,659.05 13,236.39

Other Income 259.91 230.06

Total Income 13,918.96 13,466.45

Profit before interest, depreciation & tax 1,060.62 2,376.09

Finance Cost 1,896.68 1,029.49

Depreciation 511.52 482.05

Profit / (Loss) before Exceptional Item and Taxation (1,347.58) 864.55

Exceptional Item (617.27) -

Profit / (Loss) before Taxation (1,964.85) 864.55

Taxation - Current - 182.61

- MAT Credit Entitlement (179.30) (127.74)

- Deferred (597.01) 295.91

Profit / (Loss) after Tax (1,188.54) 513.77

Appropriation - Proposed Dividend - 110.00

- Corporate Tax on Dividend - 17.84

Balance Carried to Balance Sheet (492.51) 696.03


27

OPERATIONS

The Company is engaged in the business of

manufacturing value added products including LAM

Coke, High Carbon Ferro Chrome, Pig Iron, Sponge Iron

and Special Steel Billets / Blooms, Bars & Wire Rods.

In addition, the Company generates Power mainly

for captive use. During the year under review, the

Company’s financial performance has been adversely

affected due to the non-availability of raw material,

increasing raw material costs, high bank interest rates

and volatile foreign exchange. Due to shortage in

availability of iron ore, Iron & Steel making facilities,

i.e. Blast Furnace, DRI, SMS & Rolling Mill operated

at very low production level and the Company was

unable to achieve its revenue potential.

The Company has registered a revenue growth

of 3% to Rs.13,918.96 million in the FY’2011-12

compared to Rs.13,466.45 million during the FY’2010-

11. The operating margins decreased to 8% at

Rs.1,060.62 million in the FY’2011-12 versus 18%

at Rs.2,376.09 million in the previous year. The PBT

fell from Rs.864.55 million for the FY’2010-11 to a

loss of Rs.1,964.85 million. PAT fell from Rs.513.77

million during the previous financial year to a loss of

Rs.1,188.54 million during the FY’2011-12.

During the year under review, the Company’s volumes

were impacted by the uneconomical prices of Iron Ore

& Chrome Ore. The production of Coke was 354,634

MT compared to 340,339 MT in the previous year. The

production of High Carbon Ferro Chrome was lower

at 22,368 MT compared to 44,372 MT during the

previous year. The production of Pig Iron was 84,454

MT compared to 46,233 MT in the previous year. The

production of Sponge Iron was 157,356 MT compared

to 134,538 MT in the previous year. The captive power

generated during the year was 435 million units as

against 226 million units in the previous year and Steel

production during the year was 45,772 MT.

The Company has decided to set up a 0.5 MTPA

Iron Ore Sinter Plant in order to hedge the iron ore

procurement as it is currently buying only sized iron

ore. This would also ensure continuous smooth

running of the Blast Furnace. The Iron Ore Sinter Plant

would enhance the profitability of the Blast Furnace

and would further reduce the cost of raw material and

improve the productivity of the Steel making facilities.

The Company’s subsidiary – VISA BAO Limited, is

setting up a 100,000 TPA Ferro Chrome Plant with

4 Submerged Arc Furnaces of 16.5 MVA each at

Kalinganagar in Odisha. The Company has made

significant progress towards implementation of the

project and the project is scheduled to be completed

in phases during second half of the financial year

2012-13.

A detailed analysis of the Company’s operations,

project review, risk management, strategic initiatives

and financial review & analysis, as stipulated under

Clause 49 of the Listing Agreement with the Stock

Exchanges is presented under a separate section titled

“Management Discussion & Analysis Report” forming

part of the Annual Report.

DIVIDEND

In view of the loss, your Directors regret their inability

to declare any dividend for the year.

CORPORATE DEBT RESTRUCTURING

In view of the non-availability and high cost of raw

materials reducing EBIDTA margin inspite of which

debt and interest was being serviced, additional

project cost due to high interest cost, increase in

interest cost during construction, high inflation and

debt repayment obligations over next two years, your

Company proposes to restructure its debt and has

approached the Corporate Debt Restructuring Cell for

the suitable realignment of its entire debt.

SUBSIDIARIES

The Company has two subsidiaries namely, VISA BAO

Limited and Ghotaringa Minerals Limited:

(i) VISA BAO Limited (VBL) is a Joint Venture

between the Company and Baosteel Resources

Co. Ltd., China. VBL is setting up a 100,000 TPA

Ferro Chrome Plant in Odisha.

(ii) Ghotaringa Minerals Limited (GML) is a Joint

Venture between the Company and Orissa

Industries Limited (ORIND) for assisting ORIND

for developing a chrome ore deposit and is

awaiting various Government approvals.

The consolidated financial statements presented

by the Company include financial information of its

subsidiaries prepared in compliance with applicable


28

Accounting Standards. The Ministry of Corporate Affairs,

Government of India vide its Circular No. 5/12/2007-CL-III

dated 8 February 2011 has granted general exemption under

Section 212(8) of the Companies Act, 1956, from attaching the

balance sheet, profit and loss account and other documents

of the subsidiary companies to the balance sheet of the

Company, provided certain conditions are fulfilled. The Board

of Directors has, in its meeting held on 25 May 2012, decided

not to attach the Balance Sheet and other documents of the

subsidiary companies with the annual accounts of the Company.

Accordingly, annual accounts of the subsidiary companies will be

made available to the investors of the aforesaid subsidiaries and

the Company as and when they demand. The Annual Accounts

of the subsidiary companies will also be kept for inspection by

any investor at the registered office of the Company and these

subsidiaries.

Details of the subsidiaries of the Company as required under

Circular No. 5/12/2007-CL-III dated 8 February 2011 are covered

in this Annual Report.

DIRECTORS

Mrs. Saroj Agarwal and Mr. Vikas Agarwal, Non-Executive

Directors resigned from the directorship with effect from 6

February 2012 and 28 April 2012 respectively. The Board had

placed on record its appreciation for the valuable contribution

made by them during their tenure.

The tenure of office of Mr. Basudeo Prasad Modi, Deputy

Managing Director, in accordance with the terms of his re-

appointment, completed on 31 March 2012. Mr. Modi had

expressed his desire not to seek re-appointment and had

tendered resignation as Director of the Company from close of

business hours on 31 March 2012. The Board had placed on

record its appreciation of the services rendered by him during

his tenure on the Board.

Mr. Prabir Ramendralal Bose has been appointed as an

Additional Director with effect from 1 April 2012 in accordance

Section 260 of the Companies Act, 1956 (the Act). Mr. Bose

holds office only upto the date of the forthcoming Annual

General Meeting and a Notice under Section 257 of the Act

has been received from a Member signifying his intention to

propose Mr. Bose’s appointment as a Director. The Board also

appointed Mr. Bose as the Deputy Managing Director effective

the same date. The appointment and remuneration payable to

him require the approval of the Members at the ensuing Annual

General Meeting and is subject to the approval of the Central

Government.

Mr. Subrato Trivedi has been appointed as an Additional

Director with effect from 12 May 2012 in accordance with

Section 260 of the Companies Act, 1956. Mr. Trivedi holds office

only upto the date of the forthcoming Annual General Meeting

and a Notice under Section 257 of the Act has been received

from a Member signifying his intention to propose Mr. Trivedi’s

appointment as a Director.

The Members at the last Annual General Meeting held on 26

July 2011, had re-appointed Mr. Vishambhar Saran, as Whole-

time Director designated as Chairman for a period of 3 years

with effect from 15 December 2010, re-appointed Mr. Basudeo

Prasad Modi as Deputy Managing Director for a period of 1

year with effect from 1 April 2011 and re-appointed Mr. Vishal

Agarwal as Managing Director for a period of 3 years with effect

from 25 June 2011 pursuant to the provisions of Sections 198,

269, 309, Schedule XIII and other applicable provisions, if any,

of the Companies Act, 1956.

The Company is seeking permission of the Central Government

for the waiver of recovery of remuneration paid/payable to the

Whole-time Director, Managing Director and Deputy Managing

Director for the financial year 2011-12 which is in excess of the

remuneration payable in terms of the provisions of the Act.

The Remuneration Committee and the Board of Directors

have approved payment of remuneration as approved by the

Members at the last Annual General Meeting as minimum

remuneration irrespective of any profit or loss or the profit not

being adequate for payment of such remunerations in terms

of Section I or II of Part II of Schedule XIII read with Section

198 and 309 of the Companies Act, 1956, in any financial

year during the remaining tenure of the re-appointment of Mr.

Vishambhar Saran and Mr. Vishal Agarwal with effect from 1

April 2012. This will require the approval of the Members by

a Special Resolution, which forms part of the Notice for the

forthcoming Annual General Meeting.

In accordance with the Article 157 and 158 of the Articles of

Association of the Company, Mr. Shiv Dayal Kapoor and Mr.

Debi Prasad Bagchi, Directors, are liable to retire by rotation at

the ensuing Annual General Meeting and being eligible, offer

themselves for re-appointment.

Brief resume` of the above Directors, nature of their expertise

in their specific functional areas, details of directorships in other

companies and the chairmanship / membership of committees

of the Board, as stipulated under Clause 49 of the Listing

Agreement with the Stock Exchanges are given in the Notice for

the forthcoming Annual General Meeting.


29

DIRECTORS’ RESPONSIBILITY STATEMENT

In terms of the provisions of Section 217 (2AA) of the

Companies Act, 1956, your Directors state:

a. That in the preparation of the annual accounts, the

applicable accounting standards had been followed along

with proper explanation relating to material departures;

b. That the Directors had selected such accounting policies

and applied them consistently and made judgments and

estimates that are reasonable and prudent so as to give a

true and fair view of the state of affairs of the Company

at the end of the financial year and of the profit / (loss) of

the Company for that period;

c. That the Directors had taken proper and sufficient care

for the maintenance of adequate accounting records in

accordance with the provisions of the Companies Act,

1956 and for safeguarding the assets of the Company and

for preventing and detecting fraud and other irregularities;

d. That the Directors had prepared the annual accounts on a

going concern basis.

The Company’s internal auditors, M/s. L.B. Jha & Co., Chartered

Accountants, have conducted periodic audits to provide

reasonable assurance that established policies and procedures

are being followed.

CEO / CFO CERTIFICATION

A Certificate from the Managing Director and the Chief

Financial Officer, pursuant to Clause 49(V) of the Listing

Agreement had been tabled at the Board Meeting held on 25

May 2012 and is also annexed to this Report.

AUDITORS AND AUDITORS’ REPORT

The Auditors of the Company, M/s. Lovelock & Lewes, Chartered

Accountants, Kolkata, retire at the conclusion of the ensuing

Annual General Meeting and have confirmed eligibility and

willingness to accept the office of Auditors, if approved.

The Auditors’ observation in para 10 of the Annexure to the

Auditors’ Report that the Company has incurred cash losses as

at 31 March, 2012 is self explanatory and does not require any

further comments from the Directors.

With respect to Auditors’ observation under para 11 of the

Annexure to the Auditors’ Report, your Directors wish to inform

that the delay in repayment of principal of Rs.620.76 million

and interest of Rs.387.17 million for the period from 1 April

2011 to 31 March 2012, were due to severe liquidity crisis being

faced by the Company on account of continued losses incurred

during the year, further aggravated by the delay in receipt of

expected cash flows on time.

As regards utilisation of short term funds for long term purposes

as observed in para 17 of the Annexure to the Auditors’

Report, your Directors wish to inform that in absence of any

arrangement of long term funds to finance the cash losses,

additions to the Fixed Assets and repayment of long term loans,

the available working funds got depleted resulting in use of

short term funds for long term purposes.

COST AUDITORS

During the year under review, the Board appointed M/s. DGM

& Associates, Cost Accountants, to conduct cost audit of the

Company. The Cost Audit Report for the year ended 31 March

2012 is due on 30 September 2012 and shall be submitted

within the due time period.

Subject to the approval of the Central Government, the

Company has re-appointed M/s. DGM & Associates to audit the

cost accounts relating to the products of the Company for the

financial year 2012-13.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to Section 217 (1) (e) of the Companies

Act, 1956 read with the Companies (Disclosure of Particulars in

the Report of the Board of Directors) Rules, 1988 in respect of

Conservation of Energy and Technology Absorption and Foreign

Exchange Earnings and Outgo is given in Annexure I forming

part of this Report.

HUMAN RESOURCES

The Company places significant emphasis on recruitment,

training & development of human resources, which assumes

utmost significance in achievement of corporate objectives.

The Company integrates employee growth with organisational

growth in a seamless manner through empowerment and by

offering a challenging workplace aimed towards realisation of

organisational goals. To this effect, your Company has a training

centre at its Plant for knowledge-sharing and imparting need

based training to its employees. The Company also has in place

a Performance Management System in SAP for performance

appraisal of the employees. To ensure accommodation,

hospitality and other facilities for its employees, the Company

has set up a modern guest house at Kalinganagar.

The information required under Section 217 (2A) of the

Companies Act, 1956 read with the Companies (Particulars


30

of Employees) Rules, 1975, as amended, and the Companies

(Particulars of Employees) Amendment Rules, 2011 are set out

in Annexure II to this Report. However, as per the provisions

of Section 219(1)(b)(iv) of the Companies Act, 1956 read

with Clause 32 of the Listing Agreement, the Annual Report

excluding the aforesaid information is being sent to all the

members of the Company and others entitled thereto. Any

member interested in obtaining a copy of the statement may

write to the Company.

EMPLOYEES STOCK OPTION

The Company has a ESOP Scheme in place titled Employee

Stock Option Scheme 2010 (ESOP Scheme 2010), for

permanent employees including any Director, whether whole-

time or otherwise, of the Company, its subsidiaries and the

Holding Company to be administered by the Remuneration

Committee of the Board of Directors of your Company. ESOP

Scheme 2010 will provide an incentive to attract, retain and

reward the employees and enable them to participate in future

growth and financial success of the Company. Each option

confers a right upon the employee to apply for one equity share

of the Company.

During the year under report, 197,344 Stock Options have

vested with the specified employees of the Company and its

subsidiary, VISA BAO Limited under the ESOP Scheme 2010 and

126,875 Stock Options have lapsed till 31 March 2012. As on 31

March 2012, none of the Options have been exercised.

The Company has received a certificate from the Auditors of

the Company that the ESOP Scheme 2010 was implemented

in accordance with the SEBI (Employee Stock Option Scheme

and Employee Stock Purchase Scheme) Guidelines, 1999 and

the resolution passed at the Annual General Meeting held

on 17 August 2010. The Certificate would be placed at the

forthcoming Annual General Meeting for inspection by the

Members.

As required by Clause 12 of SEBI (Employee Stock Option

Scheme and Employee Stock Purchase Scheme) Guidelines,

1999 information with respect to active Stock Options as on 31

March 2012 is given in a separate statement as Annexure III

forming part of this Report.

FIXED DEPOSITS

The Company has not accepted or renewed any fixed deposits

under Section 58A of the Companies Act, 1956.

CONSOLIDATED FINANCIAL STATEMENTS

In terms of Clause 32 of the Listing Agreement with Stock

Exchanges, Consolidated Financial Statements, conforming to

Accounting Standard 21 issued by the Institute of Chartered

Accountants of India, are attached as a part of the Annual

Report.

CORPORATE GOVERNANCE

The Company is committed in maintaining the highest

standards of Corporate Governance and adheres to the

stipulations prescribed under Clause 49 of the Listing

Agreement with the Stock Exchanges. A Report on Corporate

Governance & Shareholder Information together with the

Auditors’ Certificate thereon is annexed as part of the Annual

Report.

The Company had also adopted a “Code of Conduct” for its

Directors and Senior Management, as required under Clause

49 of the Listing Agreement and all Directors and Senior

Managers have affirmed compliance with the Code for 2011-

12. A certificate, signed by the Managing Director, affirming

compliance of Directors & Senior Management, forms part of

the Report on Corporate Governance.

ACKNOWLEDGEMENT

Your Directors record their sincere appreciation for the

assistance, support and guidance provided by banks,

financial institutions, customers, suppliers, regulatory &

government authorities, project & other business associates

and stakeholders. The Directors also commend the continuing

commitment and dedication of the employees at all levels

which has been critical for the Company’s growth. The Directors

look forward to their continued support in future.

Your Directors value your involvement as shareholders and look

forward to your continuing support.

For and on behalf of the Board

Vishal AgarwalManaging Director

Kolkata

25 May 2012

Prabir Ramendralal BoseDeputy Managing Director

anag


31

ANNEXURE I TO THE REPORT OF THE DIRECTORS

Statement of particulars required under the Companies

(Disclosure of Particulars in the Report of the Board of Directors)

Rules, 1988

A. Conservation of Energy

(a) Energy Conservation Measures Taken:

1. Reduction in power consumption by using Auto

interlock switch in door AL drop of MCC & Drive

Panel Rooms at Sponge Iron Plant.

2. Installation of VVVF drives in Lobe compressor

of Kiln-2 of Sponge Iron Plant.

3. Water sprinkling system has been introduced

in Quenching car to reduce the burning loss at

Coke Oven.

4. CFBC of 160t/hr capacity boiler has been

commissioned for utilising the waste char &

coal fines generated from Sponge Iron Plant.

5. Reduction in air ingress in flue gas at Coke Oven

resulting in higher steam temperature and

lower specific consumption of steam per unit

power generation.

6. Door Interlock Switch installation in DRI MCC

room which reduces the power consumption.

7. Manganese ore consumption in Blast Furnace

has been stopped & use of magnesite in Ferro

Chrome Plant has been stopped.

8. Zero discharge of waste water.

(b) Additional Investment and Proposals, if any, being

implemented for reduction of consumption of energy:

1. Coke pusher car track is being repaired for

smooth operation of Coke Oven Plant.

2. Coke pusher no. 2 will be renovated to improve

machine availability.

3. Additional magnetic separator is being installed

in Sponge Iron Plant to recover magnetic

particles going into oversize.

(c) Impact of Measures in (a) and (b) above have

resulted in:

1. Saving in electrical energy and higher power

generation.

2. Effective utilisation of waste heats.

3. Effective utilisation of solid waste like char and

coal fines.

(d) Total Energy Consumption and Energy Consumption

per Unit of Production (as per Form “A” below)

FORM A

2011-12 2010-11

A. Power & Fuel Consumption

1. Electricity

(a) Purchased

Unit (Kwh) 2,192,260 19,306,510

Total Amount - (Rs. Million) 37.50 90.25

Rate / unit - (Rs.) 17.11 4.67

(b) Own Generation

(i) Through Diesel Generator

Unit (Kwh) 4,495 2,816

Units per ltr. of diesel oil (Kwh) 0.87 2.82

Cost / unit – (Rs.) 37.80 14.00

(ii) Through Steam Turbine / Generator

Unit (Kwh) 434,735,200 225,961,000

Units per ltr. of fuel oil / gas NIL NIL

Cost / unit – (Rs.) NA NA

2. Coal (Coking and non-coking coal at Coke Oven, Ferro Chrome & DRI)

Quantity (MT) 812,292 695,187

Total Cost - (Rs. Million) 7,701.40 4,928.77

Average Rate – (Rs.) 9,481.07 7,089.85

3. Furnace Oil

Quantity (k. ltrs.) NIL NIL

Total Amount - (Rs. Million) NIL NIL

Average Rate NIL NIL


32

4. Coke

Quantity (MT) 72,216 56,554

Total Cost - (Rs. Million) 1,584.06 903.51

Rate / Tonne – (Rs.) 21,935.03 15,976.06

B. Consumption per unit of productionProducts (with details)

1. Production of Pig Iron including by-products MT 84,454 46,233

Electricity Kwh 191.03 187.61

Furnace Oil Ltr. NIL NIL

Coal Kg. NIL NIL

Coke Kg. 712.63 754.93

2. Production of Coke including by-products MT 296,832* 284,463*



Coal (Hard, Semi Hard & Semi Soft Coking Coal) Kg. 1,471.28 1,428.10

3. Production of Ferro Chrome including by-products MT 22,368 44,372

Electricity Kwh 4,086.80 3,592.23


Coke Kg. 400.52 487.94

Coal Kg. 138.52 9.58

4. Production of Sponge Iron including by-products MT 157,356 134,538



Coal Kg. 1,665.00 2,145.00

(*) Does not include production of coke on account of conversion: 57,802 MT (2011:55,876 MT)

2011-12 2010-11

FORM B

Form for disclosure of particulars with respect to absorption.

B. Technology Absorption

Research & Development (R&D)

1. Specific areas in which R&D was carried out by the Company:

(a) Modification of old Pusher car has been done by Coke Oven maintenance team.

(b) Waste water from switch Power Plant yard, which was being drained earlier, is now being utilised in MRP & Ferro Chrome

road area with a pipeline for dust suppression.

(c) DSDF System (Dust Suppression Dry Fog System) has been developed & installed in belt conveyors at a nominal cost which

utilises the waste water.

(d) Development and installation of Dust Suppression System in Sponge Iron Plants silo-3 at a low cost to arrest the dust

emission.

(e) Introduction of FRP bend in De-dusting duct line instead of metallic bend to increase the life of duct bends and to reduce

the cost.

(f) In-house development of Lifting Device for Shell Air fan and reduction of breakdown period from 4 hours to 0.5 hours at

Sponge Iron Plant.

(g) Coal throw Pipe Shaping Device has been developed to reuse bend Coal throw pipe in Sponge Iron Plant.

(h) Segregation of Coke Breeze into fine and coarse size in Coke Oven Plant. Fine part is used to replace 50% of CPC in SMS

and coarse is replacing 30% of nut coke in Ferro Chrome Plant.

(i) Implementation of oxygen blowing practice at EAF reducing power & electrode consumption.


33

2. Benefits derived as a result of the above R&D:

(a) Enhances the availability of pushing unit at Coke Oven.

(b) Waste utilisation and pollution control.

(c) Reduction of breakdown period in Sponge Iron Plant.

(d) Reduction in cost of Sponge Iron due to technology upgradation.

(e) Reduction in the cost of Sponge Iron due to increased recovery.

(f) Reduction in power consumption due to VVVF technology.

(g) Consistency in operations due to controlled and calibrated feed of raw materials, resulting in increased campaign life.

(h) Reduction in power and electrode consumption due to implementation of oxygen blowing practice at EAF.

3. Future plan of action:

(a) Use of BF Gas in Rolling Mill Re-Heating Furnace.

(b) Installation of Sinter Plant for effective use of Blast Furnace wastes, Iron ore fines & Coke breeze.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

a. Imported technology

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Electrode handling

technology for Ferro

Chrome Plant.

0.5 MTPA Steel Melting

Technology consisting of EAF,

LRF etc.

0.5 MTPA Bar & Wire Rod Mill

Technology.

NIL NIL 300 TPD

Lime Kiln

NIL

b. Year of Import : as given above

c. Has technology been fully absorbed:

Electrode handling technology for Ferro Chrome Plant, SMS and Rolling Mill technologies has been fully absorbed.

d. If not fully absorbed, areas where this has not taken place, reasons there for and future plan of action :

Lime Kiln technology is under initial stage.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988

a) Activities relating to exports; initiatives taken to increase exports; development of new products and services; and export plans:

The Company realises the importance of a long term presence in the global market and has taken initiative to increase exports.

The sales from exports is Rs.808.82 million. Your Company exports to various customers in China, Japan and Korea.

b) Total Foreign Exchange used and earned:

(Rs. Million)


Foreign Exchange Earnings

Export Sales 808.82 2,194.52

Foreign Exchange Outgo

Imports

Raw Materials 3,632.74 3,747.43

Finished Goods 1,336.37 1,839.25

Capital Goods 147.11 2,000.58

Traveling 5.30 6.71

Interest 85.66 61.36

Others 7.78 1.16


34

Annexure IIIAnnexure to the Directors’ Report to the Shareholders Employee Stock Option SchemeStatement as at 31 March 2012, pursuant to Clause 12 (Disclosure in the Directors’ Report) of the Securities and Exchange Board of

India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as amended:

Sl. No.

Particulars Employee Stock Option Scheme 2010

(a) Options granted Options granted in the Financial Year 2011-12 - NIL.

Options granted in the Financial Year 2010-11 - Grant A: 900,000.

(b) The pricing formula The options are granted at an exercise price equal to prevailing

Market Price per Equity Share, being latest available closing price,

prior to the date of the meeting of the Remuneration Committee,

in which options are granted, on the stock exchange on which the

shares of the Company are listed. If the shares are listed on more

than one stock exchange, then the stock exchange where there is

highest trading volume on the said date shall be considered.

(c) Options vested 197,344

(d) Options exercised NIL

(e) The total number of Equity Shares arising as a result of exercise of option Not applicable

(f) Options lapsed 126,875

(g) Variation of terms of options Not applicable

(h) Money realised by exercise of options during the year (Rs.) NIL

(i) Total number of options in force 773,125

(j) Employee wise details of options granted to:

(i) Senior Managerial personnel during the year: NIL

(ii) any other employee who received a grant in any one year of option

amounting to 5% or more of options granted during that year:

NIL

(iii) identified employees who were granted option, during any one

year, equal to or exceeding 1% of the issued capital (excluding

outstanding warrants and conversions) of the company at the

time of grant:

NIL

(k) Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise

of Option calculated in accordance with Accounting Standard (AS) 20

‘Earnings Per Share’

Rs.(10.80)

(l) Where the company has calculated the employee compensation cost

using the intrinsic value of the stock options, the difference between

the employee compensation cost so computed and the employee

compensation cost that shall have been recognised if it had used the fair

value of the options, shall be disclosed. The impact of this difference on

profits and on EPS of the company shall also be disclosed

If the Company had followed fair value method for accounting

the stock options, compensation cost would have been higher by

Rs.7.10 million for Financial Year 2011-12. Consequently Net Loss for

Financial Year 2011-12 would have been higher by Rs.7.10 million

and accordingly earnings per share would be Rs.(10.87).

(m) Weighted-average exercise prices and weighted-average fair values of

options shall be disclosed separately for options whose exercise price

either equals or exceeds or is less than the market price of the stock

Weighted average exercise price of Options whose:

Exercise price equals market price Rs.46.30 per option.

Exercise price is greater than market price N.A.

Exercise price is less than market price N.A.

Weighted average fair value of Options whose:

Exercise price equals market price Rs.19.56 per option

Exercise price is greater than market price N.A.

Exercise price is less than market price N.A

(n) A description of the method and significant assumptions used during

the year to estimate the fair values of options, including the following

weighted-average information:

Black Scholes Options Pricing Model

(i) risk-free interest rate, 7.93%

(ii) expected life, 4 years

(iii) expected volatility, 55.29%

(iv) expected dividends, and 2.77%

(v) the price of the underlying share in market at the time of option

grant

Rs.46.30 per share

Based on the above assumptions, the Fair Value per option is Rs.19.56.

The Company has received a Certificate from the Auditors of the Company that the Scheme has been implemented in accordance with Securities and

Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the resolution passed by the

Members on 17 August 2010.


35

CEO / CFO CERTIFICATION TO THE BOARD

The Board of Directors 25 May 2012

VISA Steel Limited

Kolkata 700 027

Pursuant to the provisions of Clause 49(V) of the Listing Agreement, we, Vishal Agarwal, Managing Director and Manoj Kumar Digga,

Chief Financial Officer hereby certify that:

(a) we have reviewed financial statements and the cash flow statement for the year 2011-12 and that to the best of our

knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that

might be misleading;

(ii) these statements together present a true and fair view of the company’s affairs and are in compliance with existing

accounting standards, applicable laws and regulations.

(b) there are, to the best of our knowledge and belief, no transactions entered into by the company during the year which are

fraudulent, illegal or violative of the company’s code of conduct.

(c) we accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated

the effectiveness of internal control systems of the company pertaining to financial reporting and there have been no

deficiencies in the design or operation of such internal controls.

(d) we have indicated to the auditors and the Audit Committee that:

(i) there have been no significant changes in internal control over financial reporting during the year;

(ii) there have been no significant changes in accounting policies during the year; and

(iii) there have been no instances of significant fraud of which we have become aware.

Vishal AgarwalManaging Director

Manoj Kumar DiggaChief Financial Officer


36

Management Discussion and Analysis

OVERVIEW

During the financial year 2011-12, the Company’s

performance has been adversely affected due to non-

availability of raw material, increasing raw material cost,

high interest rates and volatile foreign exchange. During

the financial year 2011-12, your Company registered a

3% growth in revenues to Rs.13,918.96 million, but a

55% drop in EBIDTA to Rs.1,060.62 million. PAT fell from

Rs.513.77 million during the previous financial year to

a loss of Rs.1,188.54 million during the financial year

2011-12.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Steel Industry Overview

The global economy is witnessing another period of

uncertainty due to the European Sovereign debt crisis.

The increase in inflation in emerging economies has led

to a sharp hike in interest rates, which has resulted in

slowdown in demand. The global financial uncertainty

has also resulted in volatility in exchange rates.

The global Steel industry has witnessed reasonable

demand growth and Steel making capacities have

gradually shifted to emerging markets such as China

and India. However, the high cost of raw materials

and increased volatility in prices has put pressure on

margins.

The Steel industry in India has suffered due to non-

availability and high prices of Iron Ore which has

impacted Steel production. The Iron Ore mining ban

in Karnataka and subsequent impact in Iron Ore

production in Goa and Odisha has forced many Steel

Companies to operate at reduced capacities and even

close down operations. It is expected that the raw

material constraints shall ease towards second half of

FY’2012-13 and mines will gradually get back to normal

production.

The Government of India has imposed an export tax

of 30% on export of Iron Ore and Chrome Ore which

should discourage exports and encourage value addition

within the Country. The removal of 5% import duty on

thermal coal is also a relief for the Sponge Iron based

Steel producers.

The Indian economy is expected to grow at 7.6% in

2012-13 against 6.9% in 2011-12. The economy is

likely to grow significantly over the next decade driven

by the infrastructure (power, road, railways, ports etc.)

and consumption (automobile, real estate etc.) sectors

which will result in sustained growth in demand for

various Iron and Steel products.

The States of Odisha, Chhattisgarh and Jharkhand

which account for majority of the Iron Ore and Coal


37

reserves in the Country will remain the most attractive

locations for setting up Iron and Steel manufacturing

capacity.

The Odisha Government is currently reviewing the

renewal of all expired mining leases which are operating

under deemed extension, which will offer an opportunity

for Steel producers in Odisha. Meanwhile, the draft

MMDR Bill is also under discussion.

Company Overview

Your Company’s current saleable products include Iron

and Steel products such as LAM Coke, High Carbon Ferro

Chrome, Pig Iron, Sponge Iron and Special Steel Billets /

Blooms, Bars & Wire Rods. In addition, the Company

generates power mainly for captive use.

BUSINESS REVIEW

Your Company is engaged in the business of

manufacturing value added products including LAM

Coke, High Carbon Ferro Chrome, Pig Iron, Sponge Iron

and Special Steel Billets / Blooms, Bars & Wire Rods.

In addition, the Company generates power mainly for

captive use.

The manufacturing facilities of your Company are

situated at Kalinganagar which includes Coke Oven,

Ferro Chrome, Blast Furnace, Sponge Iron, Power and

Special Steel and at Golagaon in Odisha where the

Chrome Ore Beneficiation & Chrome Ore Grinding

Plants are located.

During the year under review, the Company’s financial

performance has been adversely affected due to the

non-availability of raw material, increasing raw material

costs, high bank interest rates and volatile foreign

exchange. Due to shortage in availability of iron ore,

Iron & Steel making facilities, i.e. Blast Furnace, DRI,

SMS & Rolling Mill operated at very low production level

and the Company was unable to achieve its revenue

potential.

Iron & Steel Products

(a) LAM Coke

The Coke Oven Plant, with a total capacity of

400,000 TPA, operates on the stamp-charging

technology which allows blending of semi-soft and

semi-hard Coking Coals with prime hard Coking

Coals to produce Low Ash Metallurgical Coke.

The total coke production during 2011-12 was

354,634 MT compared to 340,339 MT in 2010-

11. Coking coal, the primary raw material for

producing coke, was imported from Australia. Coke

was partly consumed in the Blast Furnace and

partly sold with total sales contribution amounting

to Rs.5,659.30 million, equating to 40% of total

revenues.

(b) Ferro Chrome

The Ferro Chrome Plant, with a total capacity of

50,000 TPA produced 22,368 MT of Ferro Chrome

in 2011-12 compared to 44,372 MT in 2010-11.

The main raw material is Chrome Ore (sourced

from OMC, Tata Steel & B. C. Mohanty), Coke and

Power. Ferro Chrome is sold to various Special and

Stainless Steel Plants in India and globally. The

sales contributed 10% of total revenues during

the year amounting to Rs.1,415.88 million.

(c) Pig Iron

The Blast Furnace with a total capacity of 225,000

TPA is currently producing Hot Metal which is

poured into moulds to produce Pig Iron. Hot Metal

/ Pig Iron was partly consumed for making Special

Steel and partly sold to various Steel and foundry

customers in eastern and northern India.

The total hot metal production during 2011-12

was 84,454 MT as compared to 46,233 MT of hot

metal in 2010-11.

Pig iron sales contributed to 13% of the total

revenues of the Company during the year under

review, amounting to Rs.1,826.19 million.

(d) Sponge Iron

The Sponge Iron Plant having capacity of 300,000

TPA produced 157,356 MT during 2011-12 of

Sponge Iron as against 134,538 MT of Sponge

Iron during 2010-11. It has contributed 20%

of the total revenues amounting to Rs.2,890.01

million.

The main raw materials for Sponge Iron Plant are

Iron Ore and Thermal Coal. Iron Ore is procured

mainly from OMC and JSPL. Thermal Coal is

procured from Mahanadi Coalfields Limited and

also imported from South Africa.

(e) Power

The Power Plant produced 435 million KWH of

power during the year 2011-12 as against 226

million KWH produced during 2010-11. The Power

produced was mainly used captively.


38

(f) Special Steel

The Steel production was 45,772 MT during the year

2011-12.

PROJECT OVERVIEW

The availability and pricing of raw materials mainly Iron Ore has

been a major challenge for the Company and has impacted the

Special Steel operations. In view of the same, the Company has

decided to set up an Iron Ore Sinter Plant in order to hedge the

iron ore procurement as it is currently buying only sized iron ore.

This would also ensure continuous smooth running of the Blast

Furnace and consequently the Special Steel Plant. The Iron Ore

Sinter Plant would enhance the profitability of the Blast Furnace

and would reduce the cost of raw material and improve the

productivity of the Steel making facilities.

STRATEGIC INITIATIVES

Backward Integration

Your Company has also taken necessary steps for securing its

raw material requirements and integrating backwards into

mining of Iron Ore, Coal and Chrome Ore.

During the year, your Company has been granted a Prospecting

License for two Chrome ore mines at the Sincha and the

Kalhong Khunou districts in Manipur.

Joint Venture with Baosteel

VISA BAO Limited, a subsidiary of your Company is in the

process of setting up a 100,000 TPA Ferro Chrome Plant at

Kalinganagar Industrial Complex. The Company has made

significant progress towards implementation of the project

including equipment ordering, basic and detailed engineering,

civil and structural work, equipment erection, etc. The project

execution has gained momentum and with a highly qualified

team of professionals and reputed contractors for execution

of the Project, it is scheduled to complete the Project in phases

during second half of the financial year 2012-13.

OPPORTUNITIES & THREATS

Your Company is poised to seize the opportunities in the Iron &

Steel Industry (both for steel & intermediary saleable products)

through its strengths of locational and logistical advantages,

raw material linkages, technology edge and management

expertise. These opportunities will be linked directly to the

growing demand for special steel from the automobile and

auto components, infrastructure, construction and power

sectors. With power cuts being imposed on power intensive

industries in South Africa, consumers of Ferro Chrome globally

are diversifying their Ferro Chrome sourcing base to the other

countries like India due to which the demand for Ferro Chrome

has been strong and your Company with a fully operational

50,000 TPA Ferro Chrome Plant is ready to meet such growing

demands. Coke, being an import substitute, carries a strong

demand and your Company with its fully operational 400,000

TPA Coke Oven Plant with surplus quantity of 250,000 TPA

over and above its captive consumption is ready for sale in the

market to Integrated Steel Plants.

The threats for your Company would come from adverse

fluctuations in input raw material availability and costs, foreign

exchange variations, high interest costs and taxes & duties.

RISK MANAGEMENT

Your Company has identified major focus areas for risk

management to ensure organisational objectives are achieved

and has a well defined structure and proactive approach to

assess, monitor and mitigate risks associated with these areas,

briefly enumerated below:

a) Operations – Timely and cost-effective raw material

supply is critical to growth. Fluctuations in the price and

availability of key raw materials and commercial changes

such as domestic duties / taxes on raw materials have an

impact on the operations. Moreover, the stocks are also

subject to the other foreseeable risks. Necessary coverage

has been taken in the form of a comprehensive Industrial

All Risk (IAR) policy which covers plant, machinery,

buildings (with contents), tools and equipment and stocks

(raw materials, stores and spares and finished goods)

against fire, allied perils and all other foreseeable risks. The

policy also covers loss of profit to the business arising from

any accidental event. The Company also has coverage

in form of a Sales Turnover policy which provides all-risk

transit insurance cover to the finished goods produced

and sold by the Company and also covers transit of all the

incoming raw materials.

b) Foreign Exchange – Your Company deals in sizeable

amount of foreign exchange in imports of raw materials

and exports of finished products. A comprehensive forex

policy has been formulated for managing its foreign

exchange exposure.

c) Systems – Your Company has implemented SAP, the

leading software for Enterprise Resource Planning, to

integrate its operations and to use best business and

commercial practices.

d) Statutory compliances – Procedure is in place for monthly

reporting of compliance of statutory obligations and is

reported to the Board of Directors at its meetings.


39

Sales & Other Income

Sales growth was primarily driven by Sales volume growth for

Pig Iron and Coke and better price realisation for Sponge Iron.

Other Income constitutes mainly income from sale of Scrap,

Coke conversion, DEPB licence, receipt of insurance claim

proceeds, etc.

Raw materials consumed

Raw material consumption value has increased by 30% due to

abnormally high prices of Iron Ore, Coking Coal, Chrome Ore

and Thermal Coal.

HIGHLIGHTS (Rs. Million)

2011-12 2010-11 Change Percent

Net Sales / Income from Operations 13,659.05 13,236.39 422.66 3

Other Income 259.91 230.06 29.85 13

Total Income 13,918.96 13,466.45 452.51 3

Expenditure

(Increase) / decrease in stock (1,410.45) (745.68) 664.77 89

Raw Materials consumed 10,381.81 8,009.69 2,372.12 30

Purchase of Stock-in-trade 2,441.33 2,397.26 44.07 2

Employee Cost 380.30 429.44 (49.14) (11)

Other expenses 1,065.35 999.65 65.70 7

Operating Profit 1,060.62 2,376.09 (1,315.47) (55)

Finance Cost 1,896.68 1,029.49 867.19 84

Depreciation 511.52 482.05 29.47 6

Exceptional Item (617.27) - (617.27) -

Profit before Tax (1,964.85) 864.55 (2,829.40) (327)

Tax Expense (776.31) 350.78 (1,127.09) (321)

Profit after tax (1,188.54) 513.77 (1,702.31) (331)

Finance Cost

The finance cost increased significantly during the year due to

higher interest rates and increased availment of term loans for

projects and working capital facilities for its operations.

Depreciation

Depreciation was stable during the year mainly since there was

marginal addition in Fixed Assets.

Exceptional Item

The sharp depreciation of the Rupee and volatility in exchange

rates resulted in a forex loss of Rs.617.27 million.

FINANCE REVIEW AND ANALYSIS

Your Company reported revenues of Rs.13,918.96 million, registering a 3 percent increase over FY’2010-11. But the EBIDTA and PAT

of the Company were adversely affected due to the non-availability of raw material, increasing raw material costs, high bank interest

rates and volatile foreign exchange.


40

Profit After Tax

PAT was adversely impacted due to the high raw material costs,

higher interest costs and forex loss.

Balance Sheet analysis

Fixed Assets

The Gross Block has increased marginally on account of

additions in buildings, vehicles and computers etc. The Capital

WIP increased due to the Power Plant, Special Steel Plant and

infrastructure projects.

Inventories

Inventory of raw materials went up during the year due to

higher prices of raw materials. The average inventory turnover

reduced to 100 days in 2011-12 as compared to 103 days

during 2010-11.

Sundry Debtors, Loans & Advances

Sundry debtors increased by 7% along with 3% increase

in sales, due to increase in credit sales during the year. Your

Company’s focus on improving collections and stringent credit

assessment procedures, helped bring down the average debtors

turnover from 16 days to 14 days during the year.

Loans & advances increased marginally on account of advances

made to suppliers for raw materials, goods and services.

Cash & Bank Balances

Your Company has deployed its cash accruals in fixed deposits

with banks at attractive rates of interest towards margin money

for working capital.

Sundry Creditors & Current Liabilities

Sundry Creditors & Current Liabilities has increased due to

sharp increase in prices of raw materials coupled with reduced

operational inflows.Key Ratios

The summary of Key financial ratios are as under:


EBIDTA / Revenue (percent) 7.62 17.64

Profit After Tax / Revenue (percent) (8.54) 3.82

EBIDTA / Finance Cost (no. of times) 0.56 2.31

Long term Borrowing / Net worth (no. of times) 3.93 2.42

Return on Average Capital Employed (percent) 5.51 10.94

Book Value per share (Rs./share) 21.31 37.54

Earning per share (Rs./share) (10.80) 4.67

Market Capitalisation (Rs. Million) as on 31 March 6,226 4,945


41

CORPORATE DEBT RESTRUCTURING

In view of the non-availability and high cost of raw materials

reducing EBIDTA margin inspite of which debt and interest was

being serviced, additional project cost due to high interest cost,

increase in interest cost during construction, high inflation and

debt repayment obligations over next two years, your Company

proposes to restructure its debt and has approached the

Corporate Debt Restructuring Cell for the suitable realignment

of its entire debt.

DEVELOPMENTS IN HUMAN RESOURCES & INDUSTRIAL RELATIONS

Your Company recognises the fact that manpower is one of

the vital constituents of a successful organisation. The growth

of your Company and execution of new projects places

emphasis on the recruitment process and your Company has

been successful in attracting professional talent. The Learning

Centre at Kalinganagar, Odisha continuously trains & develops

employees to suit organisational needs.

The total number of employees in your Company, including

those inducted as trainees in the Company, as on 31 March

2012 was 1,458.

INTERNAL CONTROL AND SYSTEMS

The internal control systems in your Company commensurates

with the size and nature of its operations and periodic audits

are conducted in various disciplines to ensure adherence to

the same. During the year, M/s. L. B. Jha, Internal Auditors of

your Company had independently evaluated the adequacy

and efficacy of the audit controls. The direct reporting of the

Internal Auditors to the Audit Committee of the Board ensures

independence of the audit and compliance functions. The

Internal Auditors regularly report to the Audit Committee on

their observations on the Company’s processes, systems and

procedures ascertained during the course of their audit. The

Company has also appointed Cost Auditors for the cost audit

of its manufactured products and the Cost Auditors shall also

report to the Audit Committee on their observations. Concerted

efforts towards stabilisation of SAP have also contributed to

tightening of control systems. Your Company has been able to

adapt adequately to this ERP package and is placed to derive

significant benefits from the same. Emphasis is placed on

adequacy, reliability and accuracy of dissemination of financial

data and information. Compliance issues are given utmost

importance and reported regularly to the Board.

Your Company has been accredited with the ISO 9001

certification. It shows commitment to quality, customers, and

a willingness to work towards improving efficiency. It has also

been accredited with the ISO/TS 16949:2009 certification. The

ISO/TS 16949 is obligatory for all steel manufacturers to sell

their products to the automotive industry. ISO/TS 16949:2009

has given the Company a global standing as a reputable

supplier, improved risk management, ability to win more

business and subsequently a wider spectrum of customer base.

OUTLOOK

India has immense potential for creating new steel capacity.

Indian per capita steel consumption is presently very low

compared to world average which further re-confirms the

opportunities for steel demand to continue accelerating in the

times ahead. Your Company with a well diversified product

portfolio is well poised to take advantage of the growth in the

demand for Special Steel products, Coke and Ferro Chrome.

CAUTIONARY STATEMENT

Statements in this “Management Discussion & Analysis”

describing the Company’s objectives, projections, estimates,

expectations or predictions may be ‘forward looking

statements’ within the meaning of applicable securities laws

and regulations. Actual results could differ materially from

those expressed or implied. Important factors that could make

a difference to the Company’s operations include global

and Indian demand supply conditions, finished goods prices,

input availability and prices, cyclical demand and pricing in

the Company’s principal markets, changes in Government

regulations, tax regimes, economic developments within India

and the countries within which the Company conducts business

and other factors such as litigation and labour negotiations.


42

Report on Corporate Governance

CORPORATE GOVERNANCE: OUR PHILOSOPHYCorporate Governance refers to the structures and

processes for direction and control of the companies. It

is the process carried out by the Board of Directors and

its related committees, on behalf of and for the benefit

of the Company’s stakeholders, to provide direction,

authority and oversights to the management. It also

provides the structure through which the objectives

of the Company are set and the means of attaining

those objectives and monitoring performances are

determined.

VISA Steel Limited (the Company) believes that good

Corporate Governance practices ensures efficient

conduct of the affairs of the Company and also helps in

maximising value for all its stakeholders. The Company

has established systems and procedures to ensure that

its Board of Directors is well informed and equipped

to fulfil its overall responsibilities and to provide the

management with strategic direction needed to create

long-term shareholder value. The Company always

endeavours to uphold the principles and practices of

Corporate Governance to ensure transparency, integrity

and accountability in its functioning, which are vital to

achieve its vision of emerging as a low cost and efficient

producer of value added steel products with captive

coal, mineral resources and power.

COMPLIANCE WITH THE SEBI CODE ON CORPORATE GOVERNANCE

In line with this, we are pleased to inform you that,

as on 31 March 2012, the Company is in compliance

with all the requirements of Clause 49 of the Listing

Agreement. The necessary disclosures as required under

Clause 49 of the Listing Agreement have been covered

in this Annual Report.


43

1. Independent director is as defined in Clause 49 of the Listing Agreement.

2. For this purpose, only two Committees, viz., the Audit Committee and the Shareholders’ / Investors’ Grievance Committee have

been considered. This excludes Committee positions in private limited companies, foreign companies and companies under

Section 25 of the Companies Act, 1956.

3. Mrs. Saroj Agarwal, Non-Executive Director, resigned from the Board of Directors of the Company with effect from 6 February 2012.

4. Mr. Basudeo Prasad Modi, Deputy Managing Director, due to retire on 31 March 2012, had resigned as Director of the

Company from close of business hours on 31 March 2012.

5. Mr. Prabir Ramendralal Bose has been appointed on the Board of Directors of the Company as an Additional Director and

Deputy Managing Director with effect from 1 April 2012.

6. Mr. Vikas Agarwal, Non-Executive Director, resigned from the Board of Directors of the Company with effect from 28 April 2012.

7. Mr. Subrato Trivedi, Non-Executive Director, has been appointed as an Additional Director on the Board with effect from 12 May 2012.

I. BOARD OF DIRECTORS

Composition of the Board

Board / Committee Position as on 31 March 2012

Name of the Director Executive / Non-Executive /

Independent1

No. of Outside

Directorship(s) held

Outside Committee

positions held2

Public Private Foreign Chairman Member

Mr. Vishambhar Saran Executive Chairman 8 - 1 - 1

Mr. Maya Shanker Verma Non-Executive, Independent 3 3 - 2 -

Mr. Shiv Dayal Kapoor Non-Executive, Independent 6 - - 2 3

Mr. Debi Prasad Bagchi Non-Executive, Independent 8 1 - 1 5

Mr. Pradip Kumar Khaitan Non-Executive, Independent 14 - 1 1 3

Mr. Shanti Narain Non-Executive, Independent 1 - - - 1

Mr. Vikas Agarwal Non-Executive 10 4 - - 3

Mr. Vishal Agarwal Managing Director 8 - - 3 1

Mr. Basudeo Prasad Modi Deputy Managing Director 2 - - - -


44

Details of the Board Meeting and Attendance

Date of the Board Meeting City No. of Directors Present

30 May 2011 Kolkata 8

26 July 2011 Bhubaneswar 9

11 November 2011 Kolkata 8

13 February 2012 Kolkata 8

Details of remuneration paid to Board of Directors

A. Non-Executive Directors

Name of the Director Sitting Fees

paid1

Total payments paid /

payable in 2011-12

No. of Board Meetings Attended

Last AGM2

(Rs.) (Rs.) Held Attended

Mr. Maya Shanker Verma 150,000 150,000 4 3 No

Mr. Shiv Dayal Kapoor 190,000 190,000 4 4 Yes

Mr. Debi Prasad Bagchi 140,000 140,000 4 4 Yes

Mr. Pradip Kumar Khaitan 60,000 60,000 4 2 Yes

Mr. Shanti Narain 110,000 110,000 4 3 Yes

Mrs. Saroj Agarwal

(ceased to be a director w.e.f.

6 February 2012)

40,000 40,000 3 2 Yes

Mr. Vikas Agarwal

(ceased to be a director w.e.f.

28 April 2012)

160,000 160,000 4 4 Yes

Total 850,000 850,000

Note:

1. During 2011-12, sitting fees were paid @ Rs.20,000 per Board Meeting and Rs.10,000 per Committee Meeting, i.e.

Audit, Share Transfer & Investor Grievance, Finance & Banking and Remuneration Committees.

2. Annual General Meeting was held on 26 July 2011.

3. No stock options have been granted during the year to any of the above Directors.

B. Executive Directors

Name of the Director

Relationship with other Directors

Business relationship

with the Company, if

any

Remuneration paid during 2011-12

All elements of

remuneration package, i.e. salary, benefits,

bonuses, etc.

Fixed component & performance

linked incentives, along with

performance criteria

Service contracts,

notice period,

severance fee

Stock option

details, if any

(Rs.)

Mr. Vishambhar Saran See Note (a) Chairman 20,651,180 See note (b) See note (c) See note (d)

Mr. Vishal Agarwal See Note (a) Managing

Director

18,256,333 See note (b) See note (c) See note (d)

Mr. Basudeo Prasad

Modi

See Note (a) Deputy

Managing

Director



45

(a) Mr. Vishambhar Saran is the father of Mr. Vishal Agarwal. Other than this, none of the other Directors are in any way

related to any other Director.

(b) As per the terms of re-appointment, Mr. Vishambhar Saran, Chairman and Mr. Vishal Agarwal, Managing Director are

entitled to performance linked incentive in the form of commission upto 2% of the net profits of the Company u/s 198 of

the Companies Act, 1956. The same is not payable for 2011–12 due to losses incurred during the year.

Mr. Basudeo Prasad Modi, Deputy Managing Director is entitled to a Merit Bonus of Rs.1,200,000 p.a. as per the terms

of his re-appointment and remuneration, approved by the Members. The Company has internal norms for assessing

performance of its Executive Directors which is done by the Board.

Remuneration paid to managerial personnel includes excess remuneration paid to Mr. Vishambhar Saran Rs.16,170,452

and Mr. Vishal Agarwal Rs.14,105,045 for the financial year 2011-12. The excess remuneration paid to Mr. Saran and Mr.

Agarwal is subject to the approval of the Central Government.

The Ministry of Corporate Affairs vide circular no. 46/2011 dated 14 July 2011 has brought an amendment in Schedule

XIII to the Companies Act, 1956 whereby listed companies and their subsidiary companies having inadequate profit or no

profits will not be required to seek Central Government approval for payment of remuneration exceeding Rs.400,000 p.m.

to professional managerial persons who has no interest in the capital or any relation with the Directors or Promoters of the

Company. During the financial year, remuneration paid to Mr. Basudeo Prasad Modi includes excess remuneration paid

Rs.4,167,570 for the financial year 2011-12 which is subject to the approval of the Central Government, more particularly,

excess remuneration of Rs.1,084,973 paid during the period 1 April 2011 till 13 July 2011, i.e. during the period prior to

issue of the aforesaid Circular.

Pending such approval for the aforesaid excess remuneration paid to the managerial personnels, it is being held by them

in trust for the Company.

As the profits are currently deemed inadequate, the Company is in the process of making application to the Central

Government seeking approval for payment of remuneration to Mr. Vishambhar Saran, Chairman and Mr. Vishal Agarwal,

Managing Director w.e.f. 1 April 2012, as approved by the Remuneration Committee and the Board of Directors.

(c) Mr. Vishambhar Saran has been re-appointed as Whole-time Director, designated as Chairman for a period of 3 years

with effect from 15 December 2010. This appointment may be terminated by either party by giving 1 month’s notice in

writing and no severance fee is payable.

Mr. Vishal Agarwal has been re-appointed as Managing Director for a period of 3 years with effect from 25 June 2011.

The appointment may be terminated by either party by giving 1 month’s notice in writing and no severance fee is

payable.

Mr. Basudeo Prasad Modi was re-appointed as Deputy Managing Director for a period of 1 year with effect from 1 April

2011. Mr. Modi had expressed his desire not to seek re-appointment as the Deputy Managing Director and had resigned

as Director of the Company from close of business hours on 31 March 2012.

(d) Mr. Vishambhar Saran and Mr. Vishal Agarwal, being the promoters of the Company, are not eligible for grant of Options

under the ESOP Scheme 2010 of the Company. Mr. Basudeo Prasad Modi had been granted 50,000 Options on 4

February 2011 of which 12,500 Options vested in him on 13 February 2012. Mr. Modi did not exercise any Options vested

in him before he resigned from the Board of Directors of the Company.

(e) During the financial year 2011-12, 4 meetings of the Board of Directors were held. Mr. Vishambhar Saran, Chairman and

Mr. Vishal Agarwal, Managing Director were present in all the 4 Board Meetings. Mr. Basudeo Prasad Modi was present in

3 Board meetings. Mr. Vishambhar Saran, Mr. Vishal Agarwal and Mr. Basudeo Prasad Modi were present at the Annual

General Meeting held on 26 July 2011.

(f) Mr. Prabir Ramendralal Bose has been appointed as the Deputy Managing Director of the Company with effect from 1

April 2012. To ensure compliance with provisions of Section II of Part II of Schedule XIII to the Companies Act, 1956, the

Company is in the process of making application to Central Government.


46

The details as required under sub section (c) of Section II of Part II of Schedule XIII are as follows:

Remuneration payable during 2012-13

All elements of remuneration package, i.e. salary, benefits, bonuses, etc.

Fixed component & performance linked incentives, along with performance criteria

Service contracts, notice period, severance fee

Stock option details, if any

Rs.7,708,420 Mr. Bose is entitled to a Performance Bonus of Rs.1,200,000 p.a. as per the terms of his appointment and remuneration, to be approved by the Members. The Company has internal norms for assessing performance of its Executive Directors which is done by the Board.

Mr. Bose has been appointed as Deputy Managing Director for a period of 3 years with effect from 1 April 2012. The appointment may be terminated by either party by giving 1 month’s notice in writing and no severance fee is payable.

See note (i)

(i) Mr Prabir Ramendralal Bose has been granted Stock Options, under the ESOP Scheme 2010 of the Company, details

of which are as given below:

Grant Date No. of Options

granted

Exercise Price

per Option

Vesting Details Options exercised

so far#

No. of Options vested /

to be vested

Actual / Due date

of Vesting

4 February 2011 50,000* Rs.46.30

(Not issued at

a discount)

12,500 13 February 2012 NIL

12,500 4 February 2013 -

12,500 4 February 2014 -

12,500 4 February 2015 -

* Each option when exercised would be converted into one Equity Share of Rs.10 each fully paid-up.

# The options are exercisable within a period of 3 years from the date of vesting.

II. BOARD COMMITTEES

Audit Committee

The Audit Committee comprises of 4 Directors, all Non-Executive Directors, out of which 3 are Independent Directors, details

given under as on 31 March 2012:

Mr. Shiv Dayal Kapoor, Chairman - Independent Director

Mr. Maya Shanker Verma - Independent Director

Mr. Debi Prasad Bagchi - Independent Director

Mr. Vikas Agarwal - Non-Executive Director

All members of the Audit Committee are financially literate and possess requisite accounting or financial management

expertise.

The Company Secretary acts as Secretary to the Committee. The powers, role and terms of reference of the Committee are as

per Clause 49 of the Listing Agreement and the Committee reviews information as prescribed under Clause 49 at its meetings.

The broad terms of reference of the Audit Committee are:

1. Overseeing the Company’s financial reporting process and disclosure of financial information to ensure that the financial

statements are correct, sufficient and credible.

2. Reviewing with the management the internal control systems, internal audit functions, observations of the auditors,

periodical financial statements before submission to the Board.

3. Recommendation of matters relating to financial management and audit reports.

4. The Committee is authorised to investigate into matters contained in the terms of reference or referred / delegated to

it by the Board and, for this purpose, has full access to information / records of the Company including seeking external

professional support, if necessary.


47

During the financial year 2011-12, the Committee met four times on 30 May 2011, 25 July 2011, 11 November 2011 and 13

February 2012 and the details of attendance by the Committee members are as given under:

Name of the Director No. of meetings

Held Attended

Mr. Shiv Dayal Kapoor 4 4

Mr. Maya Shanker Verma 4 3

Mr. Debi Prasad Bagchi 4 4

Mr. Vikas Agarwal 4 3

Share Transfer and Investor Grievance Committee

The Share Transfer and Investor Grievance Committee comprises of the following Directors as on 31 March 2012:

Mr. Shanti Narain, Chairman - Independent Director


Mr. Shiv Dayal Kapoor - Independent Director

Mr. Vishal Agarwal - Managing Director

The primary function of the Committee is to supervise and ensure efficient transfer of shares, issue of new / duplicate share

certificates, dematerialisation & rematerialisation of shares and speedy redressal of investor grievances.

As on 31 March 2012, 100% of the Company’s shares are in dematerialised form and the shares are compulsorily traded on

the stock exchanges in the dematerialised form.

During the financial year 2011-12, the Committee met four times on 30 May 2011, 25 July 2011, 11 November 2011 and 13

February 2012 and the details of attendance by the Committee members are as given under:


Held Attended

Mr. Shanti Narain 4 3



Mr. Vishal Agarwal 4 4

Details of shareholders’ complaints are given in the “Shareholder Information” section of the Annual Report.

The Company Secretary is also the Compliance Officer of the Company.

Remuneration Committee

There is a Remuneration Committee in place with roles, powers and duties to be determined by the Board from time to time.

The Committee recommends appropriate compensation packages for Directors and Executive Officers to retain best available

personnel for key positions and provide performance based incentives. The scope of the Remuneration Committee had been

expanded to include powers related to issuance of ESOP / ESPS to employees, implementation and administration of the ESOP

Scheme 2010. The Committee comprises of the following Directors as on 31 March 2012:

Mr. Pradip Kumar Khaitan, Chairman - Independent Director


Mr. Shanti Narain - Independent Director


Two meeting of the Remuneration Committee were held during the financial year on 11 November 2011 and 13 February 2012

and the details of attendance by the Committee members are as given under:


48


Held Attended

Mr. Pradip Kumar Khaitan 2 1




Finance & Banking CommitteeIn addition to the above Committees, your Company has a Finance & Banking Committee with powers to approve strategies,

plans, policies and actions related to corporate finance. The Committee comprises of the following Directors as on 31 March 2012:

Mr. Maya Shanker Verma, Chairman - Independent Director


Mr. Pradip Kumar Khaitan - Independent Director



Three meetings of the Committee were held during 2011-12 on 30 May 2011, 11 November 2011 and 13 February 2012 and

the details of attendance by the Committee members are as given under:


Held Attended






Selection Committee

In terms of Section 314(1B) of the Companies Act, 1956 and Director’s Relatives (Office or Place of Profit) Rules 2003, as

amended by the Director’s Relatives (Office or Place of Profit) Amendment Rules 2011, for selecting and appointing employees,

who are relatives of the Directors and carrying monthly remuneration exceeding Rs.250,000, your Company has a Selection

Committee in place. The role of the Committee is also to determine the remuneration and revisions to the same and making

periodic recommendations to the Board on their performance. The Committee comprises of the following Independent

Directors as on 31 March 2012:

Mr. Debi Prasad Bagchi, Chairman - Independent Director



The Selection Committee did not meet during the year 2011-12.

III. SUBSIDIARY COMPANIES

The Company has two subsidiary companies, VISA BAO Limited (VBL) and Ghotaringa Minerals Limited.

Clause 49 defines a “material non-listed Indian subsidiary” as an unlisted subsidiary, incorporated in India, whose turnover

or net worth (i.e. paid up capital and free reserves) exceeds 20% of the consolidated turnover or net worth respectively, of

the listed holding company and its subsidiaries in the immediately preceding accounting year. Under this definition, VBL is a

“material non-listed Indian subsidiary” of your Company.

In accordance with the Clause 49 (III) of the Listing Agreement, the following is duly complied with:

Mr. Shiv Dayal Kapoor, an Independent Director on the Board of Directors of the Company is a Director on the Board of

Directors of VBL.


49

The Audit Committee reviews the financial statements and in particular, the investments made by the unlisted subsidiary

companies.

The minutes of the Board meetings as well as statements of all significant transactions of the unlisted subsidiary companies

are placed before the Board of Directors of the Company for their review.

IV. DISCLOSURES

Related Party transactions Related Party transactions as specified under Clause 49 of the Listing Agreement is placed before the Audit Committee. A

comprehensive list of Related Parties and their transactions as required by AS-18 issued by the Institute of Chartered Accountants

of India, forms part of Note No. 3.40 to the Financial Statements in the Annual Report.

Disclosure of Accounting Treatment The accounting treatment in the preparation of financial statements is in line with that prescribed by the Accounting Standards

u/s 211(3C) of the Companies Act, 1956.

Code of Conduct The Code of Conduct applicable to Directors and Senior Management, as approved by the Board of Directors is available on the

website of the Company – www.visasteel.com. All Directors and Senior Management Personnel have affirmed compliance with

the Code and a declaration signed by the Managing Director is given below:

“I hereby confirm that, the Company has obtained from all the members of the Board and Senior Management, affirmation that they

have complied with the Code of Conduct for Directors and Senior Management in respect of the financial year 2011-12.”

Kolkata

Date: 25 May 2012

Vishal Agarwal

Managing Director

Risk Management The Company periodically identifies, assesses and monitors risks associated with operations, foreign exchange fluctuation,

processes and systems, statutory compliances, HR policies etc. The Internal Auditor conducts periodical audits and reports to the

Audit Committee at its meetings on the adequacy of the procedures.

Details on use of proceeds from public issues During the year, the Company did not raise any money through public issue, right issues or preferential issues and there was no

unspent money raised through such issues.

Remuneration of Directors All details of remuneration to Directors have been disclosed above.

The details of the shares held by the Non-Executive Directors as on 31 March 2012 are as given below:

Name of the Director No. of shares held

Mr. Maya Shanker Verma 1,017

Mr. Shiv Dayal Kapoor -

Mr. Debi Prasad Bagchi -

Mr. Shanti Narain -

Mr. Pradip Kumar Khaitan -

Mrs. Saroj Agarwal* -

Mr. Vikas Agarwal** -

* Mrs. Saroj Agarwal ceased to be a director on the Board with effect from 6 February 2012.

**Mr. Vikas Agarwal ceased to be a director on the Board with effect from 28 April 2012.

Details of Directors appointed / re-appointed Details of Directors being appointed / re-appointed, have been disclosed in the Notice for the Annual General Meeting (AGM),

i.e. a brief resume, nature of expertise in specific functional areas, names of directorships and committee memberships and

their shareholding in the Company.


50

Means of communication

- Quarterly results

Which newspapers normally published in - Business Standard / The Financial Express

- Sambad (Oriya)

Any website, where displayed - www.visasteel.com

Whether it displays official news releases - Yes

Presentation to investors / analysts: are they available on the website - Available as and when made

Whether Shareholder Information Report forms part of the Annual Report - Yes

General Body Meetings

Current AGM date, time and venue

The forthcoming Annual General Meeting will be held on Tuesday, 14 August 2012 at 4.00 p.m. at IDCOL Auditorium, IDCOL

House, Ashok Nagar, Near Indira Gandhi Park, Unit – II, Bhubaneswar 751 001.

Location and time, where last three AGMs held:

Year Location Date Time Whether special resolutions passed

2010-11 Jayadev Bhavan, Ashok Nagar, Unit-II,

Bhubaneswar 751 001

26 July 2011 4.00 p.m. No


Bhubaneswar 751 001

17 August 2010 11.30 a.m. Yes


Bhubaneswar 751 001

26 August 2009 12.30 p.m. Yes

Postal Ballot

Whether resolutions were put through postal ballot last year : No

Details of voting pattern : NA

Person who conducted the postal ballot exercise : NA

Procedure for postal ballot : NA

Whether any resolution is proposed to be conducted through postal ballot : NA

Details of non-compliance by the company, penalties or strictures imposed on the Company by Stock Exchange or SEBI or any

statutory authority, on any matter related to capital markets, during the last three years.

There are no penalties or strictures imposed on the Company by SEBI or Stock Exchanges or any statutory authority on any capital

market issue during the last 3 years.

Details of compliance with mandatory requirements and adoption of non-mandatory requirements of this clause.

Your Company is in compliance with all the mandatory requirements of this Clause and with regard to the non-mandatory

requirements, your Company already has a Remuneration Committee in place. The Company also issues Investor & Press Releases on

a quarterly basis, subsequent to the publication of the financial results, which are sent to the Stock Exchanges and are available on

the website of the Company. Other non-mandatory requirements shall be put in place, as and when considered and approved by the

Board.

Certificate from the Auditors regarding compliance of the conditions of Corporate Governance stipulated in Clause 49 of the Listing

Agreement with Stock Exchanges is annexed herewith.


51

Shareholders Information

1. ANNUAL GENERAL MEETING

- Date and Time : 14 August 2012 at 4 p.m.

- Venue : IDCOL Auditorium, IDCOL House, Ashok Nagar,

Near Indira Gandhi Park, Unit – II,

Bhubaneswar 751 001

2. FINANCIAL YEAR : April to March

3. FINANCIAL CALENDAR (TENTATIVE) :

Financial reporting and Limited Review for the quarter ending 30 June 2012 Early August 2012

Financial reporting and Limited Review for the half year ending 30 September 2012 End October 2012

Financial reporting and Limited Review for the quarter ending 31 December 2012 End January 2013

Financial reporting for the year ending 31 March 2013 Mid May 2013

Annual General Meeting for the year ending 31 March 2013 End July 2013

4. DATES OF BOOK CLOSURE : 6 August 2012 to 14 August 2012

(both days inclusive)

5. DIVIDEND PAYMENT DATE : Not applicable

6. REGISTERED OFFICE : VISA House, 11, Ekamra Kanan,

Nayapalli, Bhubaneswar 751 015

Tel: +91 0674 2552 479, Fax: +91 0674 2554 661

E-mail: [email protected]

Website: www.visasteel.com

7. LISTING DETAILS : Equity Shares

Bombay Stock Exchange Limited,

Floor 25, Phiroze Jeejeebhoy Towers,

Dalal Street, Mumbai 400 001

Stock Symbol: (532721)

The National Stock Exchange of India Limited

“Exchange Plaza”, Bandra – Kurla Complex,

Bandra (E), Mumbai 400 051

Stock Symbol: (VISASTEEL)

Note: Listing fees has been paid to the Stock Exchanges for the year 2012-13.


52

8. STOCK PRICE DATA :

Bombay Stock Exchange National Stock Exchange

High Low Close No. of Shares Traded


(Rs.) (Nos) (Rs.) (Nos)

Apr-11 56.50 44.70 53.70 1,257,445 56.40 44.65 53.45 2,917,353

May-11 65.20 53.00 62.45 1,292,574 65.00 53.00 62.35 3,502,034

Jun-11 62.00 57.10 58.80 578,172 62.95 51.70 59.00 1,914,475

Jul-11 60.45 57.50 58.75 955,627 61.00 57.50 58.85 1,529,302

Aug-11 59.85 56.00 56.95 677,598 59.90 53.45 57.00 1,727,978

Sep-11 59.00 57.00 58.50 97,595 59.90 55.25 58.50 226,028

Oct-11 59.25 57.00 58.50 101,291 59.25 58.00 58.60 150,286

Nov-11 59.50 54.70 58.00 323,295 59.95 50.20 58.00 489,551

Dec-11 58.95 56.80 57.75 138,108 58.95 55.25 57.75 376,358

Jan-12 58.40 57.35 57.55 135,562 58.55 57.05 57.70 186,823

Feb-12 64.30 57.40 59.00 253,983 66.00 55.55 59.05 399,948

Mar-12 60.45 56.00 56.60 149,179 65.40 55.55 57.00 254,313

Stock Performance (Indexed)

9. STOCK CODE :

Reuters Bloomberg

Bombay Stock Exchange VISA.BO VISA:IN

National Stock Exchange VISA.NS VISA:IN

150

140

130

120

110

100

90

80

70

Apr - 11 May - 11 Jun - 11 Jul - 11 Aug - 11 Sep - 11 Oct - 11 Nov - 11 Dec- 11 Jan - 12 Feb - 12 Mar - 12

10. STOCK PERFORMANCE :

VSL Sensex Nifty


53

11. STOCK PERFORMANCE OVER THE PAST FEW YEARS :

(In Percentage) 1 Year 2 Years 3 Years 4 Years 5 Years

VISASTEEL 26.11 34.43 208.94 28.96 115.50

BSE Sensex (-)10.50 (-)0.71 79.27 11.25 33.14

NSE Nifty (-)9.23 0.88 75.29 11.85 38.57

12. REGISTRARS AND TRANSFER AGENTS :

(Share transfer and communication regarding

share certificates, dividends and change of

address)

Karvy Computershare Private Limited

Unit: VISA Steel Limited

Plot No. 17-24, Vittal Rao Nagar, Madhapur, Hyderabad 500 081

Tel: + 91 40 2342 0818, Fax: + 91 40 2342 0814

Email: [email protected]

Website: www.karvy.com

13. SHARE TRANSFER SYSTEM : The Board of Directors have delegated powers to the Registrars &

Transfer Agents for effecting share transfers, splits, consolidation,

sub-division, issue of duplicate share certificates, rematerialisation and

dematerialisation, etc., as and when such requests are received.

The Company obtains from a Company Secretary in Practice half-yearly

certificate of compliance with the share transfer formalities as required

under Clause 47(c) of the Listing Agreement and files a copy of the

certificate with the Stock Exchanges. Further, reconciliation of the share

capital report is also submitted on a quarterly basis for reconciliation of

the share capital of the Company.

14. INVESTOR SERVICES :

- Complaints received during the year

Nature of complaints 2011-12 2010-11

Received Cleared Received Cleared

Relating to non-allotment, non-receipt of refund cheques

arising out of the IPO exercise

- - - -

Grievance related to non receipt of dividend 13 13 23 23

Relating to complaints from SEBI / Stock Exchanges 2 2 1 1

Total 15 15 24 24

- Number of pending complaints as on 31 March 2012: NIL

- Number of pending share transfers as at 31 March 2012: NIL


54

15. DETAILS OF UNCLAIMED SHARES AS ON 31 MARCH 2012 :

Pursuant to Clause 5A of the Listing Agreement, the details of shares issued pursuant to the initial public issue of the

Company which remains unclaimed and are lying in the escrow account as on 31 March 2012 are as follows:

Year Opening Balance as on

01.04.2011

Cases disposed off during the

Financial Year 2011-12

Closing Balance as on

31.03.2012

No. of Cases No. of Shares No. of Cases No. of Shares No. of Cases No. of Shares

2011-2012 14 4,055 - - 14 4,055

16. DISTRIBUTION OF SHAREHOLDING AS ON 31 MARCH :

No. of equity shares held

2012 2011

No. of share-

holders

% of share-holders

No. of shares held

% share-holding

No. of share-

holders

% of share-holders

No. of shares held

% share-holding

1 – 500 18,899 85.13 3,007,077 2.73 25,679 82.79 4,364,105 3.97

501 – 1000 2,063 9.29 1,532,276 1.39 3,260 10.51 2,483,948 2.26

1001 – 2000 796 3.59 1,137,726 1.03 1,245 4.01 1,826,129 1.66

2001 – 3000 143 0.64 371,071 0.34 263 0.85 687,697 0.63

3001 – 4000 56 0.25 205,453 0.19 109 0.35 397,845 0.36

4001 – 5000 75 0.34 360,978 0.33 140 0.45 672,702 0.61

5001 – 10000 75 0.34 563,549 0.51 169 0.55 1,238,392 1.12

10001 and above 93 0.42 102,821,870 93.48 152 0.49 98,329,182 89.39

Total 22,200 100.00 110,000,000 100.00 31,017 100.00 110,000,000 100.00

17. CATEGORIES OF SHAREHOLDING AS ON 31 MARCH :

2012 2011

Category No. of share-

holders

No. of shares held

% share-holding

No. of share-

holders

No. of shares held

% share-holding

Promoters 3 81,400,000 74.00 8* 81,400,000 74.00

Persons acting in concert - - - - - -

Mutual Funds - - - - - -

Banks and Financial Institutions 2 1,607,600 1.46 3 40,681 0.04

Insurance Companies 1 500,111 0.45 - - -

FIIs 1 4,998,087 4.54 1 4,998,087 4.54

NRIs 360 360,980 0.33 555 672,627 0.61

Bodies Corporate 352 10,769,984 9.79 488 6,747,698 6.13

Indian Public 21,481 10,363,238 9.43 29,962 16,140,907 14.68

Total 22,200 110,000,000 100.00 31,017 110,000,000 100.00

* Includes 6 shareholders, where the beneficial interest of shares lies with VISA International Limited.


55

18. DEMATERIALISATION OF SHARES AND LIQUIDITY

: 100% of equity shares of the Company are in dematerialised form as

on 31 March 2012.

The International Security Identification Number (ISIN) for your

Company’s shares is INE286H01012.

The CIN allotted by the Ministry of Corporate Affairs is

L51109OR1996PLC004601.

19. DETAILS ON USE OF PUBLIC FUNDS OBTAINED IN THE LAST THREE YEARS

: No funds had been raised from public in the last three years.

20. OUTSTANDING GDRS/ADRS/WARRANTS OR ANY CONVERTIBLE INSTRUMENTS, CONVERSION DATE AND LIKELY IMPACT ON EQUITY

: Stock Options

In terms of the resolution passed by the Members at the Annual

General Meeting held on 17 August 2010, the Company had granted

900,000 Options to the specified employees of the Company and its

subsidiary, VISA BAO Limited at an exercise price of Rs.46.30 under the

Employee Stock Option Scheme (ESOP Scheme 2010). The vesting of

these options is in a phased manner over a period of 4 years from the

date of grant and the options may be exercised within a period of 3

years from the date of vesting of the options, in accordance with the

ESOP Scheme 2010. Each option when exercised would be converted

into one Equity Share of Rs.10 each fully paid-up.

As on 31 March 2012, there are 773,125 Options outstanding under the

ESOP Scheme 2010 and 197,344 Options have been vested. None of the

Options have been exercised till 31 March 2012. As on 31 March 2012,

126,875 Options have lapsed under the ESOP Scheme 2010.

21. PLANT LOCATIONS :

Kalinganagar Industrial Complex Village Golagaon

P.O. Jakhapura,

Dist. Jajpur

Near Duburi

P.O.Pankapal. Dist.Jajpur

Odisha

Tel: + 91 6726 245470

Fax: + 91 6726 245561

Company Secretary,

VISA Steel Limited

VISA House, 8/10 Alipore Road,

Kolkata 700 027

Tel: + 91 33 3011 9000

Fax: + 91 33 3011 9002


Odisha 755 026

Tel: + 91 6726 242441

Fax: + 91 6726 242442

22. INVESTOR CORRESPONDENCE :

In line with the Circular no.SEBI/CFD/DIL/LA/1/2009/24/04 dated 24 April, 2009 issued by Securities and Exchange Board of India,

the Company has opened a Demat Account titled “VISA Steel Limited – Demat Suspense Account” comprising shares allotted to

investors during the IPO and not yet credited to the investors’ demat account due to mismatch of information / invalid demat

account. Investors who have not received credit of shares allotted to them during the IPO are requested to contact the Registrars /

Company Secretary for the same.


56

Auditors’ Certificate on compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreement

To The Members of VISA Steel Limited

We have examined the compliance of conditions of Corporate Governance by VISA Steel Limited (the Company) for the year ended

31 March 2012, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in India.

The compliance of conditions of Corporate Governance is the responsibility of the Company’s management. Our examination was

carried out in accordance with the Guidance Note on Certification of Corporate Governance (as stipulated in Clause 49 of the Listing

Agreement), issued by the Institute of Chartered Accountants of India and was limited to procedures and implementation thereof,

adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an

expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has

complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness

with which the management has conducted the affairs of the Company.

Prabal Sarkar

Partner

Membership No: 52340

For and on behalf of

Lovelock & Lewes

Place: Kolkata Firm Registration Number – 301056E

Date: 25 May 2012 Chartered Accountants


57

Auditors’ Report to the Members of VISA Steel Limited

1. We have audited the attached Balance Sheet of VISA

Steel Limited (the “Company”) as at 31 March, 2012 ,

and the related Statement of Profit and Loss and Cash

Flow Statement for the year ended on that date annexed

thereto, which we have signed under reference to this

report. These financial statements are the responsibility

of the Company’s Management. Our responsibility is to

express an opinion on these financial statements based

on our audit.

2. We conducted our audit in accordance with the auditing

standards generally accepted in India. Those Standards

require that we plan and perform the audit to obtain

reasonable assurance about whether the financial

statements are free of material misstatement. An audit

includes examining, on a test basis, evidence supporting

the amounts and disclosures in the financial statements. An

audit also includes assessing the accounting principles used

and significant estimates made by Management, as well

as evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for

our opinion.

3. As required by the Companies (Auditor’s Report) Order,

2003, as amended by the Companies (Auditor’s Report)

(Amendment) Order, 2004 (together the “Order”), issued

by the Central Government of India in terms of sub-section

(4A) of Section 227 of ‘The Companies Act, 1956’ of India

(the ‘Act’) and on the basis of such checks of the books

and records of the Company as we considered appropriate

and according to the information and explanations given

to us, we give in the Annexure a statement on the matters

specified in paragraphs 4 and 5 of the Order.

4. Without qualifying our opinion, we draw attention to

Note 3.36 to the financial statements, regarding the

preparation of the same on a going concern basis. The

Company incurred a net loss of Rs.1188.54 Million during

the year ended March 31, 2012 and, as of that date, the

Company’s current liabilities exceeded its current assets

by Rs.15,111.77 Million, while the Company’s net worth

remains positive as at the balance sheet date. In view of

proposed plan to restructure the Company’s debt profile to

convert majority of their short term loan to long term loan ,

these financial statements have been prepared on a going

concern basis and no adjustment has been made to the

carrying value of the assets and liabilities.

5. Further to our comments in the Annexure referred to in

paragraph 3 above, we report that:

(a) We have obtained all the information and

explanations which, to the best of our knowledge and

belief, were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by

law have been kept by the Company so far as appears

from our examination of those books;


58

(c) The Balance Sheet, Statement of Profit and Loss and

Cash Flow Statement dealt with by this report are in

agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Profit

and Loss and Cash Flow Statement dealt with by this

report comply with the accounting standards referred

to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from

the directors, as on 31 March 2012 and taken on

record by the Board of Directors, none of the directors

is disqualified as on 31 March 2012 from being

appointed as a director in terms of clause (g) of sub-

section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information

and according to the explanations given to us, the

said financial statements together with the notes

thereon and attached thereto give, in the prescribed

manner, the information required by the Act, and give

a true and fair view in conformity with the accounting

principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of

affairs of the company as at 31 March 2012;

(ii) in the case of the Statement of Profit and Loss ,

of the loss for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the

cash flows for the year ended on that date.


Lovelock & Lewes

Firm Registration Number: 301056E

Chartered Accountants

Prabal Sarkar

Place: Kolkata Partner

Date: 25 May 2012 Membership Number 52340

Auditors’ Report to the Members of VISA Steel Limited


59

Annexure to Auditors’ ReportReferred to in paragraph 3 of the Auditors’ Report of even date to the members of VISA Steel Limited on the

financial statements as of and for the year ended 31 March, 2012

1. (a) The Company is maintaining proper records showing

full particulars, including quantitative details and

situation, of fixed assets.

(b) The fixed assets are physically verified by the

Management according to a phased programme

designed to cover all the items over a period of three

years which, in our opinion, is reasonable having

regard to the size of the Company and the nature

of its assets. Pursuant to the programme, a portion

of the fixed assets has been physically verified by

the Management during the year and no material

discrepancies between the book records and the

physical inventory have been noticed.

(c) In our opinion, and according to the information and

explanations given to us, a substantial part of fixed

assets has not been disposed of by the Company

during the year.

2. (a) The inventory (excluding stocks with third parties) has

been physically verified by the Management during

the year. In respect of inventory lying with third

parties, these have substantially been confirmed by

them. In our opinion, the frequency of verification is

reasonable.

(b) In our opinion, the procedures of physical verification

of inventory followed by the Management are

reasonable and adequate in relation to the size of the

Company and the nature of its business.

(c) On the basis of our examination of the inventory

records, in our opinion, the Company is maintaining

proper records of inventory. The discrepancies noticed

on physical verification of inventory as compared to

book records were not material.

3. (a) The Company has granted unsecured loans, to one

company covered in the register maintained under

Section 301 of the Act. The maximum amount

involved during the year and the year-end balance of

such loans aggregated to Rs. 2.5 Million.

(b) In our opinion, the rate of interest and other terms

and conditions of such loans are not prima facie

prejudicial to the interest of the Company.

(c) In respect of the aforesaid loans, the parties are

repaying the principal amounts, as stipulated, and are

also regular in payment of interest, as applicable.

(d) In respect of the aforesaid loans, there is no overdue

amount more than Rupees One Lakh.

(e) The Company has taken unsecured loans, from one

company covered in the register maintained under

Section 301 of the Act. The maximum amount

involved during the year and the year-end balance of

such loans aggregated to Rs. 506.40 Millions.

(f) In our opinion, the rate of interest and other terms

and conditions of such loans are not prima facie


(g) In respect of the aforesaid loans, the Company

is regular in repaying the principal amounts, as

stipulated, and is also regular in payment of interest,

as applicable.

4. In our opinion, and according to the information and

explanations given to us, there is an adequate internal

control system commensurate with the size of the Company

and the nature of its business for the purchase of inventory

and fixed assets and for the sale of goods and services.

Further, on the basis of our examination of the books and

records of the Company, and according to the information

and explanations given to us, we have neither come across,

nor have been informed of, any continuing failure to correct

major weaknesses in the aforesaid internal control system.

5. (a) In our opinion, and according to the information and

explanations given to us, the particulars of contracts

or arrangements referred to in Section 301 of the

Act have been entered in the register required to be

maintained under that section.

(b) In our opinion, and according to the information and

explanations given to us, the transactions made in

pursuance of such contracts or arrangements and

exceeding the value of Rupees Five Lakhs in respect

of any party during the year have been made at prices

which are reasonable having regard to the prevailing

market prices at the relevant time.

6. The Company has not accepted any deposits from the

public within the meaning of Sections 58A and 58AA of the

Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system

commensurate with its size and the nature of its business.


60

Name of the statute Nature of dues Amount(Rs. Million)

Period to which the amount relates

Forum where the dispute is pending

Income Tax Act, 1961 Wrong valuation of Closing

Stock and loans converted

to equity

5.49 Assessment Year

2003-04

The Commissioner of Income Tax

Appeals, Bhubaneswar, Odisha

Income Tax Act, 1961 Under valuation of Closing

Stock and disallowance of

interest


2004-05



Income Tax Act, 1961 Disallowance of certain

expenses


2006-07



Central Sales Tax (Orissa)

Rules, 1957

Difference in way bill value

and invoice value

0.01 Financial Year

1999-2000

Sales Tax Tribunal, Odisha

Orissa Entry Tax Act, 1999 Adhoc freight addition for

calculating landed cost

0.13 Financial Year

2004-05

The Asst. Commissioner of Sales

Tax (Appeals), Jajpur Range,

Jajpur Road, Odisha

Orissa Entry Tax Act, 1999 Entry tax on imported coke 134.07 Financial year

2008-09

2011-12

The Commissioner of Commercial

Taxes, Cuttack, Odisha

Orissa Sales Tax. Act 1947 Non-payment of Surcharge 0.01 Financial Year

2004-05

The Asst. Commissioner of Sales

Tax (Appeals), Jajpur Range,

Jajpur Road, Odisha

West Bengal VAT, VAT on High Sea Sales 43.00 Financial Year

2006-07

The Commissioner of Commercial

Taxes, West Bengal.

8. We have broadly reviewed the books of account maintained

by the Company in respect of products where, pursuant to

the rules made by the Central Government of India, the

maintenance of cost records has been prescribed under

clause (d) of sub-section (1) of Section 209 of the Act,

and are of the opinion that, prima facie, the prescribed

accounts and records have been made and maintained.

We have not, however, made a detailed examination of the

records with a view to determine whether they are accurate

or complete.

9. (a) According to the information and explanations given

to us and the records of the Company examined by

us, in our opinion, the Company is generally regular

in depositing undisputed statutory dues in respect

of tax deducted at source, though there has been a

slight delay in a few cases, and is regular in depositing

undisputed statutory dues, including provident fund,

investor education and protection fund, employees’

state insurance, income tax, wealth tax, service tax,

customs duty, excise duty, cess and other material

statutory dues, as applicable, with the appropriate

authorities.

(b) According to the information and explanations given


us, the particulars of dues of income tax, sales tax,

wealth tax, service tax, customs duty and excise duty

as at 31 March, 2012 which have not been deposited

on account of a dispute, are as follows:

Annexure to Auditors’ ReportReferred to in paragraph 3 of the Auditors’ Report of even date to the members of VISA Steel Limited on the

financial statements as of and for the year ended 31 March, 2012


61

10. The accumulated losses of the Company did not exceed

fifty percent of its net worth as at 31 March, 2012 and it

has incurred cash losses in the financial year ended on that

date but has not incurred cash losses in the immediately

preceding financial year.

11. According to the records of the Company examined by us

and the information and explanations given to us, other

than dues to financial institution, bank as mentioned

in note 3.3 G and 3.6 in the financial statements for the

period from 1 April 2011 to 31 March 2012 aggregating

Rs. 620.76 Million towards principal and RS 387.17 Million

towards interest, the Company has not defaulted in

repayment of dues to any financial institution or bank or

debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on

the basis of security by way of pledge of shares, debentures

and other securities.

13. The provisions of any special statute applicable to chit fund/

nidhi/ mutual benefit fund/ societies are not applicable to

the Company.

14. In our opinion, the Company is not a dealer or trader in

shares, securities, debentures and other investments.


explanations given to us, the terms and conditions of the

guarantees given by the Company for loans taken by others

from banks or financial institutions during the year, are not



explanations given to us, the term loans have been applied,

on an overall basis, for the purposes for which they were

obtained.

17. On the basis of an overall examination of the balance

sheet of the Company, in our opinion, and according

to the information and explanations given to us, funds

aggregating Rs. 9654.90 Million raised on a short term

basis have been used for the purpose of acquisition of Fixed

Assets and repayment of long-term loan.

18. The Company has not made any preferential allotment

of shares to parties and companies covered in the register

maintained under Section 301 of the Act during the year.

19. The Company has not issued any debentures during the

year; and does not have any debentures outstanding as at

the year end.

20. The Company has not raised any money by public issues

during the year.

21. During the course of our examination of the books and

records of the Company, carried out in accordance with

the generally accepted auditing practices in India, and

according to the information and explanations given to us,

we have neither come across any instance of fraud on or by

the Company, noticed or reported during the year, nor have

we been informed of any such case by the Management.


Lovelock & Lewes



Prabal Sarkar




62

Rs. Million

Note 31 March 2012 31 March 2011

I. EQUITY AND LIABILITIESShareholders’ Funds

Share capital 3.1 1,100.00 1,100.00

Reserves and surplus 3.2 1,244.32 2,432.86

2,344.32 3,532.86

Non Current LiabilitiesLong-term borrowings 3.3 9,223.86 9,983.60

Deferred tax liabilities (Net) 3.39 - 597.01

Other long-term liabilities 3.4 787.20 390.25

Long-term provisions 3.5 10.68 9.76

10,021.74 10,980.62

Current LiabilitiesShort-term borrowings 3.6 2,808.39 1,668.22

Trade payables 3.7 9,353.84 7,255.69

Other current liabilities 3.8 8,771.71 5,564.05

Short-term provisions 3.9 53.78 158.38

20,987.72 14,646.34

Total 33,353.78 29,159.82 II. ASSETS

Non Current AssetsFixed assetsTangible assets 3.10 (a) 7,807.30 7,706.60

Intangible assets 3.10 (b) 11.07 2.53

Capital work -in-progress 17,776.76 13,488.30

25,595.13 21,197.43

Non-current investments 3.11 610.40 610.40

Long-term loans & advances 3.12 1,195.61 936.43

Other non-current assets 3.13 76.69 75.77

27,477.83 22,820.03

Current AssetsInventories 3.14 3,525.06 3,956.80

Trade receivables 3.15 515.81 479.86

Cash and Bank balances 3.16 766.49 809.31

Short-term loans and advances 3.17 1,019.70 1,021.26

Other current assets 3.18 48.89 72.56

5,875.95 6,339.79

Total 33,353.78 29,159.82

Balance Sheet as at 31 March 2012

The notes are an integral part of the Financial Statements.

This is the Balance Sheet referred to in our report of even date.

For Lovelock & Lewes For and on behalf of the Board of Directors

Firm Registration Number - 301056E


Vishal Agarwal Prabir Ramendralal Bose Managing Director Deputy Managing Director

Prabal Sarkar Subhra Giri Manoj Kumar Digga Partner Company Secretary Chief Financial Officer

Membership Number 52340

Place: Kolkata Place: Kolkata

Date: 25 May 2012 Date: 25 May 2012


63

Statement of Profit and Loss for the year ended 31 March 2012

The notes are an integral part of the Financial Statements.

This is the Statement of Profit and Loss referred to in our report of even date.









Rs. Million


INCOME

Revenue from operations (Gross)

Sale of products 3.22 14,275.74 13,404.10

Other operating revenues 3.23 162.96 177.38

14,438.70 13,581.48

Less: Excise duty 779.65 345.09

Revenue from operations (Net) 13,659.05 13,236.39

Other income 3.24 259.91 230.06

I. Total revenue 13,918.96 13,466.45

EXPENSES

Cost of materials consumed 3.25 10,381.81 8,009.69

Purchases of Stock-in-Trade 3.27 2,441.33 2,397.26

Changes in inventory of finished goods, work-in-progress and

Stock-in-Trade

3.27 (a) (1,410.45) (745.68)

Employee benefits expense 3.28 380.30 429.44

Finance costs 3.29 1,896.68 1,029.49

Depreciation and amortisation expense 3.10 (a) & (b) 511.52 482.05

Other expenses 3.30 1,065.35 999.65

II. Total expenses 15,266.54 12,601.90

III. (Loss) / Profit before exceptional items and tax (1,347.58) 864.55

IV. Exceptional items 3.30 (617.27) -

V. (Loss) / Profit before tax (1,964.85) 864.55

VI. Tax expense

Current tax - 182.61

Less : MAT credit entitlement (179.30) (127.74)

Net current tax (179.30) 54.87

Deferred tax (597.01) 295.91

VII. (Loss) / Profit for the period (1,188.54) 513.77

VIII. Earning per equity share 3.32

Basic (Rs.) (10.80) 4.67

Diluted (Rs.) (10.80) 4.67


64

1. GENERAL INFORMATION

VISA Steel Limited (VSL) is engaged in the manufacturing of Iron and Steel products including LAM Coke, High Carbon Ferro

Chrome, Pig Iron, Sponge Iron and Special Steel with captive power plant at Kalinganagar, Odisha. Incorporated on 10 September,

1996, VSL has its registered office at Bhubaneswar and Corporate Office in Kolkata with manufacturing units in Kalinganagar and

Golagaon and branch offices across India. VISA Steel Limited is a public limited company with its shares listed on Bombay Stock

Exchange (BSE) and National Stock Exchange (NSE).

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Principal Accounting Policies

The Financial Statements have been prepared to comply in all material aspects with all the applicable accounting principles

in India, the applicable accounting standards u/s 211(3C) of the Companies Act, 1956 and the relevant provisions of the

Companies Act, 1956. A summary of important accounting policies which have been applied consistently are set out below.

Financial Statements have also been prepared in accordance with relevant presentational requirements of the Companies

Act, 1956 of India.

2.2 Basis of Accounting

The Financial Statements have been prepared under the historical cost convention.

2.3 (a) Fixed Assets

(i) Fixed Assets are stated at their acquisition cost (net of CENVAT credit), where applicable together with any

incidental expenses of acquisition / installation. Cost of acquisition includes borrowing costs that are directly

attributable to the acquisition / construction of qualifying assets. Impairment loss, if any, ascertained as per the

Accounting Standard u/s 211 (3C) of the Companies Act, 1956.

(ii) Exchange difference pertaining to long term foreign currency monetary items are added / deducted from the

capital assets in pursuance to the Notification No. GSR 914(E) dated 29 December 2011 issued by Ministry of

Corporate Affairs amending Accounting Standard (AS) 11, “The Effects of Changes in Foreign Exchange Rates”,

w.e.f 1 April 2011.

(iii) Profit or loss on disposal of fixed assets is recognised in the Statement of Profit and Loss.

(b) Depreciation and Amortisation

(i) Depreciation on fixed assets, other than leasehold land, is provided on Straight Line Method in accordance with

Schedule XIV of the Companies Act, 1956. Leasehold land is amortised over the period of lease. No depreciation

is provided for freehold land.

(ii) Leasehold asset which are jointly held are amortised over the period of the lease term.

(iii) Computer software has been capitalised as Intangible Assets and are being amortised over its useful lifes of

three years.

2.4 Investments

Investments of long term nature is stated at cost, less adjustment for diminution, other than temporary, in the value

thereof.

2.5 Inventories

Inventories are stated at cost (net of CENVAT credit) or net realisable value, whichever is lower. Cost is determined on

weighted average basis and comprises of expenditure incurred in the normal course of business in bringing such inventories

to their location and includes, where applicable appropriate overheads. Obsolete, slow moving and defective inventories are

identified at the time of physical verification and where necessary, provision is made for such inventories.

2.6 Sales

Sales represent the invoiced value of goods and services supplied, net of value added tax (VAT) / sales tax but inclusive of

excise duty.

Notes to Financial Statements


65

2.7 Transactions in Foreign Currencies

(i) Transactions in foreign currencies are recorded in rupees by applying the exchange rate prevailing on the date of

transaction. Transactions remaining unsettled are translated at the rate of exchange ruling at the end of the year.

Exchange gain or loss arising on settlement / translation is recognised in the Statement of Profit and Loss, except those

as mentioned in note 2.3 a (ii).

(ii) Premium or discount on forward contracts are amortised over the life of the contract. Foreign exchange forward

contracts are revalued at the balance sheet date and the exchange difference between the spot rate at the date of the

contract and the spot rate on the balance sheet date is recognised as gain / loss in the Statement of Profit and Loss,

except those as mentioned in note 2.3 a (ii).

2.8 Employee Benefits

(i) Post Retirement Benefit

(a) Provident Fund

The Company operates defined contribution schemes like Provident Fund. The Company makes regular

contribution to provident funds which are fully funded and administered by Government and are independent of

Company’s finance. Contributions are recognised in Statement of Profit and Loss on an accrual basis.

(b) Gratuity

Defined Benefit Plans like Gratuity Schemes are also maintained by the Company. The Company has taken out

a policy with Life Insurance Corporation of India (LICI) for future payment of gratuity liability to its employees.

Gratuity liability is determined at the end of each year by LICI in accordance with the method stated in the

Accounting Standard 15 (Revised 2005) [AS 15 (Revised)] on “Employee Benefits” and such liability has been

provided for in the accounts. Annual Premium determined by LICI is contributed.

(ii) Other Long-term Employee Benefits:

Leave Encashment

Leave encashment benefit is determined on the basis of independent actuarial valuation (using Projected Unit

Credit Method), at the end of each year in accordance with the method stated in AS 15 (Revised) and such

liability is provided for in the accounts and charge is recognised in the Statement of Profit and Loss.

(iii) Other Employee Benefits are accounted for on accrual basis.

2.9 Accounting for Taxes on Income

Current tax in respect of taxable income is recognised based on applicable tax rates and laws. Deferred tax is recognised

subject to consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between

taxable income and accounting income, that originate in one period and are capable of reversal in one or more subsequent

periods and is measured using tax rates and laws that have been substantively enacted by the balance sheet date. Deferred

tax assets are recognised only if there is reasonable certainty that sufficient future taxable income will be available against

which such deferred tax assets will be realised. Such assets are reviewed as at each balance sheet date to reassess realisability

thereof. Minimum Alternate Tax (MAT) Credit is recognised as an asset only when and to the extent there is convincing

evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each balance

sheet date and the carrying amount of the MAT Credit asset is written down to the extent there is no longer a convincing

evidence to the effect that the Company will pay normal income tax during the specified period.

2.10 Borrowing Cost

Borrowing costs attributable to acquisition and / or construction of qualifying assets are capitalised as a part of the cost

of such assets upto the date when such assets are ready for its intended use. Other borrowing costs are charged to the

Statement of Profit and Loss.

2.11 Leases

Assets acquired as leases where a significant portion of the risk and rewards of ownership are retained by the lessor

are classified as Operating Leases. Lease rentals in respect of assets acquired under Operating Lease are charged to the

Statement of Profit and Loss on accrual basis.

2.12 Miscellaneous Expenditure - To the extent not written off or adjusted

Public issue expenses are being amortised over a period of five years.



66

Rs. Million

31 March 2012 31 March 2011

3.1 SHARE CAPITAL

Authorised

160,000,000 Equity Shares of Rs.10/- each 1,600.00 1,600.00

Issued, Subscribed and Paid-up

110,000,000 Equity Shares of Rs.10/- each fully paid up 1,100.00 1,100.00

(a) Rights, preferences and restrictions attached to shares

The Company has only one class of equity shares referred to as equity shares having face value of Rs.10/- each. Each

holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Rupees. The dividend

proposed by the Board of Directors is subject to the approval of shareholders in the Annual General Meeting.

(b) Shares held by the Holding / Ultimate Holding Company and / or their Subsidiaries and Associates

57,612,167 Equity Shares of Rs.10/- each held by VISA Infrastructure

Limited the Holding Company

576.12 576.12

(c) Shareholders holding more than 5 % shares

VISA Infrastructure Limited (Number) 57,612,167 57,612,167

VISA Infrastructure Limited (%) 52.37 52.37

VISA International Limited (Number) 23,532,233 23,532,233

VISA International Limited (%) 21.39 21.39

(d) Share Reserved for issue under option

For details of share reserved for issue under the Employee Stock Option Plan (ESOP) of the Company refer note: 3.33

(e) VISA Infrastructure Limited, the holding company has pledged 55,000,000 number of equity shares (17,300,000 number

equity shares as on 31 March 2012) being 95.47% of its total shareholding.

Rs. Million

31 March 2012 31 March 2011

3.2 RESERVES AND SURPLUS

Capital Reserve

Balance as at the beginning of the year 0.07 0.07

Add / Less : Transfers - -

Balance as at the end of the year 0.07 0.07

Securities Premium Reserve

Balance as at the beginning of the year 1,645.00 1,645.00


Balance as at the end of the year 1,645.00 1,645.00

General Reserve




(Deficit) / Surplus in the Statement of Profit and Loss


Add : Net (Loss) / Profit after Tax transferred from Statement of Profit and Loss (1,188.54) 513.77

Amount available for appropriation (492.51) 823.87



67


Rs. Million

31 March 2012 31 March 2011

3.2 RESERVES AND SURPLUS (Contd.)

Less: Appropriations :

Proposed Dividend - 110.00

Income Tax on Proposed Dividend - 17.84

Balance as at the end of the year (492.51) 696.03

Total 1,244.32 2,432.86

Rs. Million

3.3 LONG-TERM BORROWINGS Non Current Portion Current Maturities Total

31 March

2012

31 March

2011

31 March

2012

31 March

2011

31 March

2012

31 March

2011

Term Loan (Secured)

From Banks [A + B + C (a)] 7,620.59 9,126.95 3,270.25 2,048.60 10,890.84 11,175.55

From Other Parties [C(b) + D] 731.25 340.56 140.58 112.50 871.83 453.06

Other Loans & Advances (Secured)

Equipment and Other Loan (E)

From Banks [E(a)] 15.88 53.74 41.21 36.34 57.09 90.08

From Other Parties [E(b)] 99.74 212.35 132.96 112.61 232.70 324.96

Loan from Related Parties (F) (Unsecured) 756.40 250.00 - - 756.40 250.00

9,223.86 9,983.60 3,585.00 2,310.05 12,808.86 12,293.65

The above amount includes:

Secured borrowing 8,467.46 9,733.60 3,585.00 2,310.05 12,052.46 12,043.65

Unsecured borrowing 756.40 250.00 - - 756.40 250.00

Amount disclosed under the head “other

current liabilities” (refer note 3.8)

- - (3,585.00) (2,310.05) (3,585.00) (2,310.05)

9,223.86 9,983.60 - - 9,223.86 9,983.60

A. Term loan From Banks

Nature of Security

Term Loan from Banks is secured by way of first charge on the land and fixed assets situated at Kalinganagar Industrial Complex,

District Jajpur, Odisha together with hereditaments and premises and building, plant and machineries permanently affixed

thereto and other erections thereon both present and future at Plant at Kalinganagar Industrial Complex, District Jajpur, Odisha

and second charge on all the current assets of the Company ranking pari-passu with other banks along with Corporate Guarantee

of VISA International Limited and personal guarantee of Managing Director of the Company.


68

Banks As at 31 March 2012 (Rs. Million)

Terms of Repayment Interest rate

Andhra Bank 366.43 Twelve quarterly instalments of Rs.18.70 million each,

Four quarterly instalments of Rs.28.00 million each, One

quarterly instalment of Rs.5.30 million, Two quarterly

instalments of Rs.12.40 million each, One quarterly instalment

of Rs.13.10 million, The period of maturity w.r.t the balance

sheet date is 4 years and 9 months.

BPLR-2.50%

Andhra Bank 141.03 Twenty four quarterly instalments of Rs.12.5 million each wef

March 12. The period of maturity w.r.t the balance sheet date is

5 years and 9 months.

BPLR-1.75%

Bank of Baroda 208.42 One quarterly instalment of Rs.8.2 million, Twelve quarterly

instalments of Rs.10.42 million each, Four quarterly instalments

of Rs.13.68 million each, Four quarterly instalments of Rs.5.12

million each. The period of maturity w.r.t the balance sheet date

is 5 years.

Base Rate + 3.50%

Bank of India 412.86 One quarterly instalment of Rs.16.40 million, Eight quarterly



million each, Three quarterly instalments of Rs.13.82 million

each. The period of maturity w.r.t the balance sheet date is 4

years and 9 months.

Base Rate + 3.25%

Bank of India 8.71 Two quarterly instalments of Rs.5.80 million each w.e.f March 12.

The period of maturity w.r.t the balance sheet date is 3 months .

Base Rate + 3.25%

Canara Bank 97.79 Twenty three quarterly instalments of Rs.16.70 million each w.e.f

June 12 and One quarterly instalment of Rs.15.90 million. The

period of maturity w.r.t the balance sheet date is 6 years.

BPLR - 0.75%

Central Bank of

India

823.83 Twelve quarterly instalments of Rs.41.70 million each, Four

quarterly instalments of Rs.62.20 million each,

One quarterly instalment of Rs.11.80 million, Two quarterly

instalments of Rs.27.60 million each, One quarterly instalment

of Rs.27.5 million. The period of maturity w.r.t the balance sheet

date is 4 years and 9 months.

Base Rate + 4.25%

DENA Bank 206.57 One instalment of Rs.8.20 million, Twelve quarterly instalments

of Rs.10.41million each, Four quarterly instalments of Rs.13.68

million each, Four quarterly instalments of Rs.5.17 million each.

The period of maturity w.r.t the balance sheet date is 5 years.

Base Rate + 3.25%

DENA Bank 241.32 Twenty four quarterly instalments of Rs.10.40 million each w.e.f



Base Rate + 3%

Indian Overseas

Bank

19.13 One quarterly instalment of Rs.19.13 million. Matured on March

2012.

BPLR - 2.25%

Indian Overseas

Bank

416.21 Twelve quarterly instalments of Rs.20.80 million each, Four

quarterly instalments of Rs.31.20 million each,

One quarterly instalment of Rs.5.90 million,

Three quarterly instalments of Rs.13.80 million each. The period

of maturity w.r.t the balance sheet date is 4 years and 9 months.

BPLR - 2.25%

Oriental Bank of

Commerce

77.20 Six quarterly instalments of Rs.5.73 million each, Four quarterly

instalments of Rs.10.70 million each. The period of maturity

w.r.t the balance sheet date is 2 years and 3 months.

Base Rate + 3%



69

Oriental Bank of

Commerce

813.54 One quarterly instalment of Rs.32.80 million, Eleven quarterly

instalments of Rs.41.70 million each, Four quarterly instalments of

Rs.62.20 million each, One quarterly instalment of Rs.11.80 million,

Two quarterly instalments of Rs.27.60 million each, One

quarterly instalment of Rs.27.40 million. The period of maturity

w.r.t the balance sheet date is 4 years and 9 months.

Base Rate + 3.25%

Punjab National

Bank

36.81 Twenty four quarterly instalments of Rs.8.30 million each w.e.f

March 12 and One quarterly instalment of Rs.0.91 million. The

period of maturity w.r.t the balance sheet date is 5 years and 9

months.

BPLR +0.50%

Punjab National

Bank

275.05 Twenty nine quarterly instalments of Rs.9.40 million each. The


BPLR +1.5%

State Bank of

Hyderabad

96.82 Five quarterly instalments of Rs.8.30 million each and Four

quarterly instalments of Rs.14.10 million each. The period of

maturity w.r.t the balance sheet date is 2 years.

Base Rate + 3.75%

State Bank of

Hyderabad

200.20 Six quarterly instalments of Rs.10.40 million each, Two quarterly



million each, One quarterly instalment of Rs.0.72 million, One

quarterly instalment of Rs.0.66 million, One quarterly instalment

of Rs.0.67 million. The period of maturity w.r.t the balance sheet


Base Rate + 3.75%

State Bank of

Hyderabad

235.08 Twenty three quarterly instalments of Rs.10.40 million each.

The period of maturity w.r.t the balance sheet date is 5 Years

and 9 months.

Base Rate + 3.75%

State Bank of

Travancore

249.96 Twenty four quarterly instalments of Rs.10.40 million each w.e.f



Base Rate + 3.25%

Syndicate Bank 187.77 Five quarterly instalments of Rs.14.57 million each and Four

quarterly instalments of Rs.27.32 million each. The period of

maturity w.r.t the balance sheet date is 2 years.

BPLR - 1.75%

Syndicate Bank 1,251.53 One quarterly instalment of Rs.49.22 million, Eight quarterly

instalments of Rs.62.50 million each, Four Quarterly instalments

of Rs.70.20 million each, Four Quarterly instalments of Rs.74.35

million each, Four Quarterly instalments of Rs.31.00 million each.

The period of maturity w.r.t the balance sheet date is 5 years.

BPLR - 1.75%

Syndicate Bank 149.88 Thirty Two quarterly instalments of Rs.4.70 million each. The

period of maturity w.r.t the balance sheet date is 7 years and 9

months.

BPLR - 1.75%

UCO Bank 10.77 One quarterly instalment of Rs.10.78 million. Matured on March

2012.

BPLR - 0.50%

UCO Bank 193.94 Three half yearly instalments of Rs.29.16 million each and

Three quarterly instalments of Rs.27.30 million each and One

instalment of Rs.27.00 million. The period of maturity w.r.t the

balance sheet date is 2 years and 3 months.

BPLR - 0.50%

UCO Bank 629.11 Twelve quarterly instalments of Rs.31.3 million each, Four

quarterly instalments of Rs.46.7 million each, One quarterly

instalment of Rs.8.90 million, Three quarterly instalments of

Rs.20.70 million each. The period of maturity w.r.t the balance


BPLR - 0.50%





70

UCO Bank 226.18 Twenty nine quarterly instalments of Rs.7.80 million each. The


BPLR - 0.50%

Union Bank 600.40 Twelve quarterly instalments of Rs.31.30 million each, Four

quarterly instalments of Rs.46.70 million each, One quarterly

instalment of Rs.8.90 million, Three quarterly instalments of

Rs.20.70 million each. The period of maturity w.r.t the balance


Base Rate + 4%

Union Bank 266.48 Twenty four quarterly instalments of Rs.14.60 million each w.e.f



Base Rate + 4%

Union Bank 226.47 Twenty nine quarterly instalments of Rs.7.80 million each. The

period of maturity w.r.t the balance sheet date is 7 years .

Base Rate + 4%

Vijaya Bank 10.40 One quarterly instalment of Rs.10.40 million. Matured on March

2012.

Base Rate + 4.25%

Vijaya Bank 209.04 One quarterly instalment of Rs.8.20 million, Three quarterly

instalements of Rs.10.40 million each , One instalment of

Rs.10.50 million , Three quarterly installements of Rs.10.40

million each, One instalment of Rs.10.50 million, Four quarterly


of Rs.12.40 million each, Three quarterly instalments of Rs.5.20

million each and one instalment of Rs.5.10 million. The period of

maturity w.r.t the balance sheet date is 5 Years .

Base Rate + 4.25%

Vijaya Bank 392.29 One quarterly instalment of Rs.5.20 million, Three quarterly

instalments of Rs.20.80 million each and quarterly instalments

of Rs 20.90 million each till 4 years, Three quarterly instalments

of Rs.20.80 million each, one instalment of Rs.20.90 million,

Three quarterly instalments of Rs.15.60 million each and One

instalment of Rs.15.90 million. The period of maturity w.r.t the

balance sheet date is 6 years and 9 months.

Base Rate + 4.25%

9,281.22





71

B. Term loan From Bank- Balance as at 31 March 2012 (Rs. Million) 875.00

Nature of Security

General Corpus Corporate Loan from State Bank of India is secured by first pari-passu charge on the fixed assets of the Company

situated at Kalinganagar Industrial Complex, District Jajpur, Odisha and first charge on the fixed assets situated at Golagaon

plant at Ankurapal and second charge on all the current assets of the Company both present and future on pari-passu basis along

with other term lenders. State Bank of India is also having lien on fixed deposits of Rs.110.00 million.

Terms of Repayment:

The above mentioned facility is to be repaid in One quarterly instalment of Rs.125.00 million and Four quarterly instalments of

Rs.187.50 million each, Interest rate @ SBI Advance Rate + 2.25%. The period of maturity w.r.t the balance sheet date is 1 year.

C. Subordinate Debt Facility from Banks & FIIS -

Nature of Security

Subordinate Debt Facility from a Consortium of banks and financial institutions through IL&FS Financial Services Limited acting

as Facilitator is secured by way of a second mortgage & charge on pari-passu basis with the Working Capital Lenders of all such

immovable properties and interest in the immoveable properties including buildings, structures, plant and machinery embedded

therein, present & future in the industrial land situated at Kalinganagar Industrial Complex, District Jajpur, Odisha, and by way of

second charge on pari-passu basis with the Term Loan lenders on all the movable current assets and movable plant & machinery,

spares, tools, accessories both present & future along with Corporate Guarantee of VISA International Limited. The registration of

the above charge is pending.

(a) Term loan from Banks-Balance as at 31 March 2012 (Rs. Million) 734.62

Terms of Repayment:

The above mentioned facility is to be repaid in Twenty four quarterly instalments w.e.f end of 9th quarter from the date of

first disbursement i.e 30 March 2011, at an interest rate @ SBI Base rate +5%. The period of maturity w.r.t the balance sheet


(b) Term loan from Financial Institution-Balance as at 31 March 2012 (Rs. Million) 300.00

Terms of Repayment:

The above mentioned facility is to be repaid in Twenty four quarterly instalments w.e.f end of 9th quarter from the date of

first disbursement i.e 30 March 2011, at an interest rate @ SBI Base rate +5%. The period of maturity w.r.t the balance sheet


D. Term loan from Financial Institution- Balance as at 31 March 2012 (Rs. Million) 571.83

Nature of Security

Secured by way of first charge on all the assets, both present & future, of the Company’s plant including township being financed

by HUDCO at Kalinganagar Industrial Complex, Odisha and pari-passu second charge on all the current assets of the Company

within the integrated Steel Complex including Township being financed by with other banks along with Corporate Guarantee of

VISA International Limited and personal guarantee of Managing Director of the Company.

Terms of Repayment:

The above mentioned facility is to be repaid in Thirty one quarterly instalments of Rs.28.10 million each from the reporting date at

an interest rate @ HUDCO Benchmark rate + 1%. The period of maturity w.r.t the balance sheet date is 7 Years and 6 months .

E. Equipment and other loans

Nature of Security

Equipment Finance and other loan from banks and financial Institutions are secured by way of hypothecation of vehicles /

machinery taken under the loan arrangement.

Terms of Repayment:

The above mentioned facility is to be repaid in equal monthly instalments over the period of loan.



72

(a) Equipment and other loans from Bank

Banks As at31 March 2012

(Rs. Million)


HDFC Bank 0.35 Equal monthly instalments over the period of

loan. The period of repayment w.r.t the balance

sheet date is 1 year.

9.75%

ICICI Bank 56.74 Equal monthly instalments over the period of



9.5% to 11.25%

57.09

(b) Equipment and other loans from others

Financial Institutions

As at31 March 2012

(Rs. Million)


Reliance Cap Ltd. 4.95 Equal monthly instalments over the period of


sheet date is 1 year and 2 months.

7.00% to

10.00%

Family Credit Ltd. 0.19 Equal monthly instalments over the period of


sheet date is 1 year.

10.35%

L & T Finance Ltd 20.32 Equal monthly instalments over the period of


sheet date is 2 years.

8.00% to

10.00%

Tata Capital 90.38 Equal monthly instalments over the period of



9.50% to

11.50%

SREI Equipment

Finance (P) Ltd.

97.41 Equal monthly instalments over the period of



10.00% to

11.00%

Kotak Mahindra 19.45 Equal monthly instalments over the period of



11.75%

232.70

F. Loan from Related Parties-Balance as at 31 March 2012 (Rs. Million) [Refer Note 3.40 (c)] 756.40

Company has obtained unsecured loan amounting to Rs.250 million from fellow subsidiary VISA Power Limited at an interest rate

of prevailing Bank rate as per RBI + 1% p.a, which is repayable within12 months from the Balance Sheet date.

Unsecured loan of Rs.506.40 million have also been obtained from holding company VISA Infrastructure Limited, bearing an interest

rate as per SBI base rate i.e 10% p.a, which is repayable from the proceeds of infusion of fresh equity in the Company, as per

contractual terms.



73

G. The Company has defaulted in the repayment of dues (principal and interest) during the period January 2012 to

March 2012. The details of continuing defaults of principal and interest in each case are as follows:

Name of the Banks Principal Interest

Amount (Rs. Million)

Period Amount (Rs. Million)

Period

Andhra Bank 18.70 Jan’12 - Mar’12 11.26 Jan’12 - Mar’12

Andhra Bank 12.50 Jan’12 - Mar’12 4.95 Jan’12 - Mar’12

Bank of Baroda 8.20 Jan’12 - Mar’12 2.52 Mar’12

Bank of India 16.40 Jan’12 - Mar’12 13.94 Jan’12 - Mar’12

Bank of India 5.80 Jan’12 - Mar’12 0.10 Mar’12

Canara Bank 16.70 Jan’12 - Mar’12 2.96 Feb’12 - Mar’12

Central Bank of India 41.70 Jan’12 - Mar’12 33.12 Jan’12 - Mar’12

Central Bank of India - - 2.34 Feb’12 - Mar’12

Corporation Bank - - 1.52 Feb’12 - Mar’12

DENA Bank 8.20 Jan’12 - Mar’12 8.38 Jan’12 - Mar’12

DENA Bank 10.40 Jan’12 - Mar’12 8.49 Jan’12 - Mar’12

HUDCO 28.00 Jan’12 - Mar’12 23.45 Dec’11- Feb’12

ILFS - - 3.01 Feb’12 - Mar’12

Indian Overseas Bank 19.13 Jan’12 - Mar’12 1.41 Feb’12 - Mar’12

Indian Overseas Bank 20.80 Jan’12 - Mar’12 16.18 Feb’12 - Mar’12

Indian Overseas Bank - - 2.96 Feb’12 - Mar’12

Oriental Bank of Commerce 5.73 Jan’12 - Mar’12 1.04 Feb’12 - Mar’12

Oriental Bank of Commerce 32.80 Jan’12 - Mar’12 8.73 Mar’12

Oriental Bank of Commerce - - 2.78 Mar’12

Punjab National Bank 2.30 Jan’12 - Mar’12 0.47 Mar’12

Punjab National Bank 9.40 Jan’12 - Mar’12 3.65 Mar’12

State Bank of Hyderabad 8.30 Jan’12 - Mar’12 1.90 Feb’12 - Mar’12

State Bank of Hyderabad - - 4.89 Feb’12 - Mar’12

State Bank of Hyderabad - - 5.70 Feb’12 - Mar’12

State Bank of India 125.00 Jan’12 - Mar’12 12.65 Mar’12

State Bank of Travancore 10.40 Jan’12 - Mar’12 8.81 Jan’12 - Mar’12

Syndicate Bank 14.57 Jan’12 - Mar’12 6.91 Jan’12 - Mar’12

Syndicate Bank 49.20 Jan’12 - Mar’12 45.29 Jan’12 - Mar’12

Syndicate Bank - - 4.80 Jan’12 - Mar’12

Syndicate Bank - - 2.94 Feb’12 - Mar’12

UCO Bank 10.77 Jan’12 - Mar’12 0.86 Jan’12 - Mar’12

UCO Bank 29.16 Oct’11 - Mar’12 7.09 Jan’12 - Mar’12



Union Bank 31.30 Jan’12 - Mar’12 17.72 Feb’12 - Mar’12

Union Bank 14.60 Jan’12 - Mar’12 9.93 Jan’12 - Mar’12

Union Bank 7.80 Jan’12 - Mar’12 8.50 Jan’12 - Mar’12

Vijaya Bank - - 1.48 Feb’12 - Mar’12

Vijaya Bank 10.40 Jan’12 - Mar’12 0.72 Jan’12 - Mar’12

Vijaya Bank 8.20 Jan’12 - Mar’12 4.85 Feb’12 - Mar’12

Vijaya Bank 5.20 Jan’12 - Mar’12 9.91 Feb’12 - Mar’12

620.76 339.87



74


Rs. Million

31 March 2012 31 March 2011

3.4 OTHER LONG-TERM LIABILITIES

Others-Payable to Subsidiary Company

Contractual obligation towards facility sharing 787.20 390.25

787.20 390.25

Rs. Million

31 March 2012 31 March 2011

3.5 LONG-TERM PROVISIONS

Provision for Employee Benefits 10.68 9.76

10.68 9.76

Rs. Million

31 March 2012 31 March 2011

3.6 SHORT-TERM BORROWINGS

Secured

Loans Repayable on Demand from Banks 2,536.76 1,419.41

From Financial Institution

EXIM 171.67 149.99

SIDBI 99.96 98.82

2,808.39 1,668.22

The working capital facilities from Banks and Financial Institution-EXIM are secured by way of first hypothecation charge ranking

pari-passu with other banks on the whole of the current assets, namely, stock of raw material, stock in process, semi finished &

finished goods, stores & spares not relating to plant & machinery (i.e. consumable stores & spares), bills receivable & book debts

and all other movables, both present and future, whether installed or not provided that the charge in favour of the banks on the

movable plant & machinery, machinery spares, tools & accessories shall be subject to the charges created and / or to be created

thereon in favour of the term lenders to secure the long term borrowing / loans for capital expenditure. The working capital

facilities are also secured by second mortgage charge on the land situated at Kalinganagar Industrial Complex , District Jajpur,

Odisha together with building and structures thereon and all plant & machinery attached to the earth or permanently fastened

to anything attached to the earth along with corporate guarantee of VISA International Limited and personal guarantee of

Managing Director of the Company. Interest rate on such Secured Demand Loan from Banks is linked with the base rate of

respective banks. Overdue amount as on Balance Sheet date is Rs.47.30 million.

Short term borrowing from Small Industries Development Bank of India (SIDBI) is the amount availed as on Balance Sheet date

against the limit of Rs.100 million under the MSMED Receivable Finance Scheme sanctioned by SIDBI covering the sale of goods /

services made by SME / eligible service sector and transport services. Interest is payable on such facility at the rate of 13% p.a.

up to 90 days usance. The above loan is secured by way of unconditional corporate guarantee of VISA International Limited.

Rs. Million

31 March 2012 31 March 2011

3.7 TRADE PAYABLES

Acceptance 1,043.13 766.83

Sundry Creditors

MSMED 57.29 52.00

Others 8,253.42 6,436.86

9,353.84 7,255.69


75

Rs. Million

Details of dues to Micro, Small and Medium enterprises (MSMED): 31 March 2012 31 March 2011

Principal Interest Principal Interest

(i) The amount remaining unpaid to any supplier as at the end of

the accounting year

57.29 - 52.00 -

(ii) The amount of interest paid by the buyer in terms of section 16,

along with the amounts of the payment made to the supplier

beyond the appointed day during accounting year

- - - -

(iii) The amount of interest due and payable for the period of delay

in making payment (which have been paid but beyond the

appointed day during the year) but without adding the interest

specified under this Act

- - - -

(iv) The amount of interest accrued and remaining unpaid at the

end of accounting year and

- - - -

(v) The amount of further interest remaining due and payable even

in the succeeding years, until such date when the interest dues as

above are actually paid to the small enterprise, for the purpose of

disallowance as deductible expenditure under section 23.

- - - -

The above information has been compiled in respect of parties to the extent to which they could be identified as Micro, Small and

Medium Enterprises under Micro, Small and Medium Enterprises Development Act, 2006 on the basis of information available

with the Company.

Rs. Million

31 March 2012 31 March 2011

3.8 OTHER CURRENT LIABILITIES

Current maturities of Long Term Debt (Refer note 3.3) 3,585.00 2,310.05

Interest Accrued and due on borrowings 393.08 119.34

Interest Accrued but not due on borrowings 18.12 1.34

Employee related liabilities 65.81 55.90

Statutory liabilities 101.04 164.10

Share Refund Order account 0.32 0.34

Unclaimed Dividend 1.00 0.79

Advance from Customer 145.02 87.09

Advance from Fellow Subsidiary 2,581.17 -

Capital Creditors 1,643.73 2,710.67

Other liabilities 237.42 114.43

8,771.71 5,564.05

Rs. Million

3.9 SHORT-TERM PROVISIONS 31 March 2012 31 March 2011


Provision for Dividend - 110.00

Income Tax on Provision for Dividend - 17.84

53.78 158.38



76

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77

Rs. Million

31 March 2012 31 March 2011

3.11 NON - CURRENT INVESTMENTS

Long Term Investments - At Cost - Trade - Unquoted

Investment in Equity Instruments

Investment in Subsidiaries

VISA BAO Limited 591.50 591.50

59,150,000 Equity Shares of Rs.10/- each, fully paid up

[Including beneficial interest in 5 Equity Shares of

Rs.10/- each, fully paid up]

Ghotaringa Minerals Limited 8.90 8.90

890,000 Equity Shares of Rs.10/- each, fully paid up

[Including beneficial interest in 44,500 Equity Shares of


Investment in Joint Venture (Refer Note 3.37) 10.00 10.00

VISA Urban Infra Limited


610.40 610.40

Note: The Company has given undertaking to consortium bankers of subsidiary company VISA BAO Limited for sanctioning Rs.1,820

million term loan, by agreeing not to dispose off 51% shares [i.e. 46,410,000 number of shares] of VISA BAO Limited.

Rs. Million

31 March 2012 31 March 2011

3.12 LONG -TERM LOANS & ADVANCES

Unsecured Considered Good

Capital Advance 376.29 417.10

Security Deposits 180.80 55.60

Loans & Advances to related parties

Advances to Subsidiary : Ghotaringa Minerals Limited 2.50 2.50

Security Deposit with holding company: VISA Infrastructure Limited 261.50 261.50

Security Deposit with Enterprise having significant influence: VISA

International Limited

8.00 12.50

Prepaid Expenses 59.48 59.49

MAT Credit Entitlement 307.04 127.74

1,195.61 936.43

Maximum amount due at any time during the year; as per disclosure requirement of

clause 32 of listing agreement :

Due by Subsidiary Company 2.50 2.50

Due by Holding Company 261.50 261.50

Due by Enterprise having significant influence 12.50 12.50

Rs. Million

31 March 2012 31 March 2011

3.13 OTHER NON-CURRENT ASSETS

Margin Money with maturity more than 12 months 76.69 75.77



78

Rs. Million

31 March 2012 31 March 2011

3.14 INVENTORIES

(Refer Note 2.5)

Raw Materials 1,305.88 1,395.83

Work-In-Progress 75.25 70.92


Stock-in-Trade 441.01 463.95

Stores and Spares parts* 256.74 203.29

By-Products 268.38 516.34

3,525.06 3,956.80

* Including Capital Items lying in stores 38.97 41.89

Rs. Million

31 March 2012 31 March 2011

3.15 TRADE RECEIVABLES

Unsecured

Debts Outstanding for a period exceeding six months

Considered Good 36.98 -

Considered Doubtful 5.14 33.53

Other Debts

Considered Good* 478.83 479.86

520.95 513.39

Less: Provision for Doubtful Debts 5.14 33.53

515.81 479.86

* Includes receivable from

Fellow Subsidiary - 101.79

Enterprise over which Relatives of Key Managerial Personnel having

significant influence

1.28 1.12

Holding Company 15.73 -

Rs. Million

31 March 2012 31 March 2011

3.16 CASH AND BANK BALANCES

(i) Cash and Cash equivalents

Balance with Banks in :

Current Account 10.53 18.53

Margin Money 92.68 355.39

Cash on hand 0.76 0.40

(ii) Other Bank balances

Earmarked Accounts :

Share Refund Order Account 0.32 0.34

Dividend Account 1.00 0.79

Margin Money with maturity more than 3 months but less than 12 months 661.20 433.86

766.49 809.31



79

Rs. Million

31 March 2012 31 March 2011

3.17 SHORT-TERM LOANS AND ADVANCES

Unsecured, considered good unless otherwise stated

Security Deposits - 31.03


For Supply of goods & rendering services

Considered Good 285.80 470.33


Less: Provision for Doubtful Advances (13.95) (18.14)

Loans & Advance to related parties

Advances to Key Managerial Personnel ** 34.44 -

Advances to Holding Company 30.65 20.80

Advance Payment of Income Tax 150.34 98.89

[Net of Provision Rs.463.07 million (2011: Rs 463.07 million)]

Others Taxes receivable / adjustable 383.70 367.56

Less: Provision for Other Taxes receivable / adjustable (7.80) (7.80)

1,019.70 1,021.26

Due by a Private Company in which a Director is a Director - 1.21

** Excess Remuneration paid to managerial personnel during the year is subject to the approval by the Central Government. Pending

such approval excess remuneration paid to managerial personnel amounting to Rs.34.44 million is being held by them in trust for the

Company.

Rs. Million

31 March 2012 31 March 2011

3.18 OTHER CURRENT ASSETS

Receivable from DGFT & Customs towards Export Incentive 16.74 53.21

Interest Accrued on Deposits*** 32.15 19.35

48.89 72.56

*** Includes amount receivable from Subsidiary 0.28 -

3.19 CONTINGENT LIABILITIES

(a) Claim against the Company not acknowledged as debt:

(i) In respect of a charter party dispute between VISA Comtrade (Asia) Limited (the “Charterer”) and Transfield Shipping

Inc., Panama, (the “Owner of the vessel- Prabhu Gopal”) the said Owner of the vessel has filed a civil suit in the Hon’ble

Calcutta High Court against the Company and the charterer and claimed the relief for a decree for US$ 0.30 million to

be expressed in Indian Currency at such rate of exchange and / or on such terms as the Court may deem fit and proper,

Injunction, Costs or other reliefs. The Company has not accepted the claim as it was not a party to the said Agreement

and hence cannot be made a party to this suit. The Hon’ble Calcutta High Court passed interim order dated 11 May

2005 and 20 June 2005, restraining the Company and the Charterer from withdrawing any amount from a specified

bank account without leaving a balance for a sum of Rs.12.50 million, which has been set aside by the bank from the

cash credit limit of the Company. The company has been legally advised that the above interim order has been expired

due to efflux of time and has not been extended by the Hon’ble Calcutta High Court.



80

(ii) Applications have been filed by the legal heirs of a deceased employee of the Company, who died in a road accident

while travelling in the Company’s vehicle for his personal work, claiming a compensation of Rs.6.10 million and interest

@ 18% per annum. The Company has contested the claim, which is currently pending before the Motor Accident

Claims Tribunal, Bhubaneswar.

Application filed by the legal heirs of the sister of the deceased employee who died with him, has been disposed off

by the Aditional District Judge Cum 3rd Motor Accident Claims Tribunal, Rourkela on 25 November, 2011 directing the

New India Assurance Co. Ltd to pay Rs.0.18 million with interest 9% p.a. from the date of application till the date of

payment. An appeal has been filed by the New India Assurance Co. Ltd before the Hon’ble High Court of Orissa in May

2012 against such order.

Rs. Million

31 March 2012 31 March 2011

(b) Guarantees

(i) Bank Guarantee 56.77 56.77

(ii) Corporate Guarantee issued on behalf of Subsidiary

Company

720.00 -

(c) Other money for which company is contingently liable

(i) Income Tax matter on Appeal 63.63 63.63

(ii) Sales Tax matter on Appeal 47.22 74.24

(iii) Value Added Tax matter on Appeal - 20.37

(iv) Entry Tax matters 178.42 170.01

(v) Customs Duty matter on Imported Goods 34.86 34.86

Rs. Million

31 March 2012 31 March 2011

3.20 CAPITAL AND OTHER COMMITMENTS:

(a) Capital Commitments

Estimated amount of Contracts remaining to be executed on Capital

Account (Net of advance of Rs.376.29 million, 2011: Rs.417.10 million)

611.52 1,298.91

(b) Other Commitments

The Company has obtained licenses from the Government of India under EPCG Scheme for import of machineries at

a reduced Customs Duty and thereby saved an amount of Rs.388.35 million towards duty upto 31 March 2012 (2011

: Rs.384.40 million). As per the requirement under the said Scheme, the Company is required to export amounting to

Rs.2,989.69 million (2011: Rs.2,986.46 million) within the specified periods, failing which, the Company has to make

payment to the Government of India equivalent to the duty benefit enjoyed along with interest. The Company is

confident that the above export obligation will be met during the specified period.

Rs. Million

31 March 2012 31 March 2011

3.21 PROPOSED DIVIDEND

On Equity Shares of Rs.10 each

Amount of dividend proposed - 110.00

Dividend per equity share - Rs 1.00 per share



81

Rs. Million

31 March 2012 31 March 2011

3.22 SALE OF PRODUCTS

Sale of Finished Goods

Pig Iron 1,826.19 835.02

Chrome Concentrate - 71.66

LAM Coke 5,659.30 4,803.18

Ferrochrome 1,415.88 2,518.25

Sponge Iron 2,890.01 2,277.92

Bloom / Round 1,141.04 -

Rolled Product 180.72 -

By-products 602.12 590.08

Power 564.22 77.00

Total 14,279.48 11,173.11

Sale of Stock-in-Trade

Coal & Coke 1,620.46 2,230.99

Quick Lime 0.84 -

Total 1,621.30 2,230.99

Less: Trial Run Sale 1,625.04 -

Sale of products 14,275.74 13,404.10

Rs. Million

31 March 2012 31 March 2011

3.23 OTHER OPERATING REVENUES

Scrap sales 8.38 38.56

Conversion Income 126.38 83.21

Export Incentives 28.20 55.61

162.96 177.38

Rs. Million

31 March 2012 31 March 2011

3.24 OTHER INCOME

Insurance claim received 8.75 40.81

Interest Income 240.03 137.67

Net Gain / (Loss) from sale of Fixed asset 8.25 -

Liabilities no longer required written back - 22.17

Provisions no longer required written back - 23.34

Other non operating income 2.88 6.07

259.91 230.06



82

Rs. Million

31 March 2012 31 March 2011

3.25 COST OF MATERIAL CONSUMED

Chrome Ore 608.95 1,179.15

Iron Ore 2,688.37 1,712.34

Coke 11.80 59.38

Coal 7,701.40 5,082.62

Others 219.66 130.05

11,230.18 8163.54

Less: Trial Run Consumption 848.37 153.85

10,381.81 8,009.69

Rs. Million

31 March 2012 31 March 2011

3.26 DETAILS OF INDIGENOUS AND IMPORTED RAW MATERIAL CONSUMED

Indigenous 36% 3,783.25 43% 3,462.43

Imported 64% 6,598.56 57% 4,547.26

100% 10,381.81 100% 8,009.69

Rs. Million

31 March 2012 31 March 2011

3.27 PURCHASES OF STOCK-IN-TRADE

Coal & Coke 2,403.34 2,397.26

Billets 36.27 -

Quick Lime 1.72 -

2,441.33 2,397.26

Rs. Million

31 March 2012 31 March 2011

3.27 (a) Changes In Inventory of Finished Goods, Work-in-Progress and Stock-In-Trade

Opening Stock

Finished Goods 1,306.47 886.40

Stock-In-Trade 463.95 258.57


Work-in-Progress 70.92 42.82

2,357.68 1,532.81

Less: Closing Stock


Stock-In-Trade 441.01 463.95



1,962.44 2,357.68

Transfer to Project (1,756.73) -

Increase / (Decrease) in Excise Duty on Stock (48.96) 79.19

Increase / (Decrease) in Stock (1,410.45) (745.68)



83

Rs. Million

31 March 2012 31 March 2011

3.27 (b) Details of Finished Goods ,Work-In-Progress and Stock-In-Trade

Opening Stock

Finished Goods

Pig Iron 293.19 34.73

LAM Coke 724.49 613.93

Ferrochrome 119.92 38.20

Sponge Iron 168.52 61.03

Chrome Powder & Chrome Concentrate 0.35 138.51

Billets - -

Total 1,306.47 886.40


Work-in-Progress

Intermediary Coke 26.74 20.11

Chrome Briquette 40.48 19.00

Washery Coal 3.70 3.70

Total 70.92 42.81

Stock-in-trade

Coal & Coke 463.95 258.57

Total 463.95 258.57

Closing Stock

Finished Goods

Pig Iron 39.67 293.19

LAM Coke 988.45 724.49

Ferrochrome 58.76 119.92

Sponge Iron 89.51 168.52

Chrome Powder 0.35 0.35

Billets 1.06 -

Total 1,177.80 1,306.47


Work-in-Progress

Intermediary Coke 52.66 26.74

Chrome Briquette 18.89 40.48

Washery Coal 3.70 3.70

Total 75.25 70.92

Stock-in-trade

Coal & Coke 441.01 463.95

Total 441.01 463.95



84

Rs. Million

31 March 2012 31 March 2011

3.28 EMPLOYEE BENEFITS EXPENSE

Salaries and Wages 364.48 402.28

Contribution to Provident & Other Funds 12.04 21.96

Staff Welfare Expenses 3.78 5.20

380.30 429.44

3.28 (a) Employee Benefits

The Company maintains provident fund with Regional Provident Fund Commissioner, contributions are made by the Company

to the Fund, based on the current salaries. In the provident fund schemes, contribution are also made by the employees. An

amount of Rs.8.68 million (2011: Rs.15.94 million) has been charged to the Statement of Profit and Loss on account of the

above defined contribution schemes.

The Company operates defined benefit schemes like gratuity and leave encashment . The Company has taken out a policy

with Life Insurance Corporation of India (LICI) for future payment of gratuity liability to its employees. Annual actuarial

valuations are carried out by LICI in compliance with Accounting Standard 15 (revised 2005) on “Employee Benefits”. Annual

contributions are also made by the Company. Employees are not required to make any contribution.

Rs. Million

Gratuity

31 March 2012 31 March 2011

(I) Amount recognised in the Balance Sheet are as follows:

Present value of funded obligation 15.26 11.47

Fair Value of Plan Assets 19.01 16.34

(3.75) (4.87)

Unrecognised past service cost - -

Present value of un-funded obligation - -

Net (Asset) / Liability (3.75) (4.87)

(II) Amount recognised in the Statement of Profit and Loss and charged to Salaries, Wages & Bonus and Contribution to Provident & Other Funds under Note 3.28 are as follows:

Current Service cost 3.74 3.27

Interest cost 0.92 0.67

Expected Return on Plan Assets (1.50) (1.13)

Net actuarial loss / (gain) recognised during the year (0.52) (0.41)

Total 2.64 2.40

(III) Reconciliation of opening and closing balances of the present value of the obligations:

Opening defined benefit obligation 11.47 8.36

Current Service cost 3.74 3.27

Interest cost 0.92 0.67

Actuarial loss / (gain) (0.52) (0.41)

Benefits paid (0.35) (0.42)

Closing Defined Benefit Obligation 15.26 11.47

(IV) Reconciliation of opening and closing balances of the fair value of plan assets:

Opening fair value of Plan Assets 16.34 12.47



85

Expected Return on Plan Assets 1.50 1.13

Contributions by employer 1.52 3.16

Benefits paid (0.35) (0.42)

Closing Fair Value on Plan Assets 19.01 16.34

Actual Return on Plan Assets [Plan Assets consist of funds maintained with

LICI for gratuity scheme]

0.98 0.72

(V) Principal Actuarial Assumption Used:

Discount Rates 8.00% 8.00%

Expected Return on Plan Assets 8.00% 8.00%

Expected Salary increase rates 4.50% 4.75%

Mortality Rates LIC (1994-96)

mortality tables

LIC (1994-96)

mortality tables

(VI) Investment Details of Plan Assets (% allocation)

Insurer managed funds 100% 100%

Current Pattern of investment as per IRDA Guidelines are as under:-

Sr. No Type of Investment Percentage

1 Government Securities, being not less than 20%

2 Government Securities or other approved Securities (inclusive (1) above, being not less than) 40%

3 Balance to be invested in approved investment as specified in Schedule I. Not exceeding 60%

The estimates of future salary increase considered in the actuarial valuation takes into account factors like inflation, seniority, promotion

and other relevant factors. The expected return on plan assets is based on actuarial expectation of the average long term rate of return

expected on investments of the funds during the estimated terms of the obligations.

The contribution expected to be made by the Company for the year ending 31 March 2013 cannot be readily ascertainable and

therefore not disclosed.

31-Mar-12 31-Mar-11 31-Mar-10 31-Mar-09 31-Mar-08

(VII) Experience Adjustment

Defined Benefit Obligation 15.26 11.47 8.36 6.50 4.63

Plan Assets 19.01 16.34 12.47 9.29 6.81

Surplus / (Deficit) (3.75) (4.87) (4.11) (2.79) (2.18)

Experience Adjustments on Plan Liabilities (0.67) Not available Not available Not available Not available

Experience Adjustments on Plan Assets 0.09 Not available Not available Not available Not available

Rs. Million

31 March 2012 31 March 2011

3.29 FINANCE COSTS

Interest expense 933.81 645.91

Other borrowing costs 962.87 383.58

1,896.68 1,029.49

The amount of finance cost capitalised for qualifying assets during the financial year 2011-12 is Rs.1,335.64 million (2010-11:

Rs.850.45 million)

Rs. Million

Gratuity

31 March 2012 31 March 2011



86

Rs. Million

31 March 2012 31 March 2011

3.30 OTHER EXPENSES

Consumption of Stores and Spare Parts 252.36 178.88

Power & Fuel 29.26 91.02

Rent 17.27 26.96

Repairs to buildings 2.84 3.24

Repairs to machinery 44.02 52.68

Insurance expenses 26.02 18.99

Rates and taxes, excluding, taxes on income 35.91 15.22

Material handling expenses 203.07 165.09

Freight and selling expenses 219.56 229.25

Loss on exchange fluctuation (Net) * - 7.53

Miscellaneous expenses written off - 24.55

Miscellaneous expenses** 235.04 186.24

1,065.35 999.65

* In view of high volatility in the value of Indian Rupee against US$ and other foreign currencies, the loss arising out of the reinstatement

of foreign currency monetary items during the current financial year amounting Rs.617.27 million (2011: Rs. Nil) has been considered

as an exceptional item.

** Miscellaneous expenses of current year is net off provision written back for bad & doubtful debts Rs.31.84 million and for doubtful

advances Rs.10.52 million and also includes current year provision for bad and doubtful debt Rs.3.45 million and for advances

Rs.6.34 million.

Rs. Million

31 March 2012 31 March 2011

3.31 (a) Stores and Spares Consumed

Indigenous 99% 249.22 100% 178.88

Imported 1% 3.14 0% -

100% 252.36 100% 178.88

(b) CIF Value of Imports

Raw Material 3,632.74 3,747.43


Capital Goods 147.11 2,000.58

5,116.22 7,587.26

(c) Expenditure in Foreign Currency

Travelling 5.30 6.71


Others 7.78 1.16

98.74 69.23

(d) Earning in Foreign Currency

Export Sales 808.82 2,194.52

(e) Payment to Auditor

Audit Fees 1.25 1.10

Tax Audit Fees 0.15 0.15

Other Services 1.07 0.75

Re-imbursement of expenses 0.07 0.11

2.54 2.11



87

Rs. Million

31 March 2012 31 March 2011

3.32 EARNING PER SHARE

(Loss) / Profit after tax (A) (1,188.54) 513.77

Weighted average number (in million) of Rs.10 equity share outstanding during

the year (B)

110.00 110.00

Basic and Diluted Earning per Share (A/B) (Rs.) (10.80) 4.67

3.33 SHARE - BASED COMPENSATION

The shareholders of the Company in the Annual General Meeting held on 17 August, 2010, has approved an Employee Stock

Option Scheme 2010 (the “ESOP Scheme 2010”), formulated by the Company, under which the Company may issue 5,500,000

options to its permanent employees and directors of the Company, its subsidiaries and its holding company, as determined by

the Remuneration Committee on its own discretion and in accordance with the SEBI Guidelines.

Each option when exercised would be converted into one fully paid - up equity share of Rs.10/- each of the Company. The ESOP

Scheme 2010 is administered by the Remuneration Committee of the Board of Directors of the Company (“the Committee”).

Under the ESOP Scheme 2010, the Committee had granted 900,000 options to its eligible employees during the year ended

31 March 2011. During the current year the Company has not granted any new options. The following share-based payment

arrangements were in existence during the reporting period.

Particulars ESOP Scheme 2010

Number of Options Granted 900,000

Grant Date 4 February, 2011

Vesting Plan Graded vesting - between 12.5% & 25% based on continuity &

performance

Vesting Period Not earlier than one year and not later than five years from the

date of grant of the options in one or more tranches.

Exercise Period 3 years from the date of vesting

Exercise Price (Rs. per Option) 46.30

Method of Accounting Intrinsic Value

Movement of Options Granted

The movement of the options for the year ended 31 March, 2012 is given below:

Particulars Stock

Options

(Number)

Range

of exercise

Prices (Rs)

Weighted Average

Exercise Price

(Rs)

Remaining

Contractual Years

Outstanding at the beginning of the year 900,000 46.30 46.30 6

Granted during the year - - - -

Forfeited during the year - - - -

Exercised during the year - - - -

Lapsed during the year 126,875 46.30 46.30 -

Outstanding at the end of the year 773,125 46.30 46.30 5

Exercisable at the end of the year 191,875 - - 2 years & 10

months

During the year 197,344 number of Options were vested.



88

Fair Valuation: At grant date, the estimated fair value of stock options granted was Rs.19.56. The fair valuation was carried out by an

independent valuer using Black & Scholes model. The various inputs and assumptions considered in the pricing model at grant

date for the stock options granted under ESOP Scheme 2010 are as under.

Particulars Tranche I

Number of options granted 900,000


Risk Free interest rate (%) 7.86 - 8.00

Option Life (Years) 2.5 - 5.5

Expected Volatility (%) 54.42 - 55.30

Expected Dividend Yield (%) 2.77

Share price at options grant date (Rs) 46.30

Had the compensation cost for the stock options granted been recognised based on fair value at the date of grant in accordance

with Black & Scholes Model, the proforma amount of net profit and earnings per share of the Company would have been as under:

Rs. Million

31 March 2012 31 March 2011

Net (Loss) / Profit attributable to Equity shareholders (1,188.54) 513.77

Less: Compensation cost under ESOP as per Fair Value 7.10 1.40

Proforma (Loss) / Profit before Tax adjustment for earlier years (1,195.64) 512.37

Weighted average number of Basic equity shares outstanding 110.00 110.00

Weighted average number of Diluted equity shares outstanding 110.88 110.14

Face Value of Equity Shares 10.00 10.00

Reported Earning per Share( EPS)

Basic EPS (in Rs) (10.80) 4.67

Diluted EPS (in Rs) (10.80) 4.67

Proforma Earning per Share (EPS)

Basic EPS (in Rs) (10.87) 4.66

Diluted EPS (in Rs) (10.87) 4.66

In Million

31 March 2012 31 March 2011

3.34 DETAILS OF FOREIGN CURRENCY EXPOSURE Currency F.C INR F.C INR

Unhedged Portion as on Balance Sheet Date

a) Trade Receivable US$ 0.83 42.32 1.41 62.87

b) Trade Payable US$ 81.08 4,147.82 39.81 1,777.35

Euro 15.01 1,025.47 1.75 110.57

CHF - - 0.09 4.37

c) Short-Term Finance US$ 3.26 166.68 0.25 11.31

Hedged by Forward Contracts as on Balance Sheet Date

a) Trade Payable US$ 2.20 111.54 47.35 2,179.06

Euro 1.15 79.87 14.41 847.42

b) Short Term Finance US$ - - 2.50 112.62

3.35 As the Company’s business activity falls within a single business segment, viz. “Iron & Steel products”, the disclosure requirements

of Accounting Standard (AS-17) on “Segment Reporting”, notified by the Companies (Accounting Standards) Rules, 2006, are not

applicable.



89

3.36 The Company has incurred a net loss of Rs.1,188.54 million during the year ended 31 March 2012 and as of that date the

Company’s current liabilities exceeded its current assets by Rs.15,111.77 million. The Company has approached the Lenders

to restructure its debt profile to convert majority of their short-term loan to long-term loan, which has already been agreed in

principle by all the banks and the approval is under process. The Company has prepared the financial statements on the basis

of going concern assumption.

3.37 INVESTMENT IN JOINT VENTURE The Company has invested in VISA Urban Infra Limited vide the consortium agreement with VISA Infrastructure Limited and

VISA Realty Limited to start up a project of star hotel and convention centre at Naya Raipur, Chhatisgarh.

Joint Venture VISA Urban Infra Limited

Country of Incorporation India

% of Ownership Interest as at 31 March 2012 26.00%

The Company’s interests in the joint venture is reported as Long-Term Investment in Note no 3.11 and stated at cost. However,

the Company’s share of each of the assets and liabilities etc. (each without elimination of the effect of transactions between

the Company and the joint venture) based solely on the accounts prepared for the internal management reporting purposes to

assess the performance of the joint venture related to its interest in the Joint Venture are:

Rs. Million

31 March 2012 31 March 2011

Income - 0.01

Expenses 0.04 0.01

Assets 14.90 11.32

Liabilities 4.94 1.32

3.38 OPERATING LEASES The Company has lease agreement for various premises which are in the nature of operating lease. The lease arrangement

range for a period between 3 years to 10 years which are cancellable lease. There is no obligation for renewal of these lease

agreements and are renewable by mutual consent.

Rs. Million

31 March 2012 31 March 2011

With respect to all operating lease

Lease payments recognised in the Statement of Profit and Loss during the year 4.23 9.75

3.39 DEFERRED TAX LIABILITIES (NET) Deferred Tax Provision has been made in the accounts in accordance with the requirements of the Accounting Standard on

“Taxes on Income” (AS 22) issued by The Institute of Chartered Accountants of India. The major components of the Deferred

Tax Liabilities / (Assets) based on the tax effects of timing differences are as follows:

Rs. Million

31 March 2012 31 March 2011

Deferred Tax Liabilities


858.78 784.02

Deferred Tax Assets

Unabsorbed Depreciation (444.22) (153.67)

Unabsorbed Business Loss Carried Forward (375.64) -

Others (38.92) (33.34)

(858.78) (187.01)

Deferred Tax Liabilities (Net) - 597.01

As a matter of prudence, deferred tax assets have been recognised only to the extent of the deferred tax liability.



90

3.40 (a) Related Party Disclosures

Nature of Relationship Name of the Related Parties

Holding Company VISA Infrastructure Limited

Subsidiaries Ghotaringa Minerals Limited

VISA BAO Limited

Joint Venture Company VISA Urban Infra Limited

Enterprise having significant influence VISA International Limited

Fellow Subsidiaries VISA Aluminium Limited

VISA Cement Limited

VISA Resources India Limited (Formerly Known as VISA Comtrade Limited)

VISA Power Limited

VISA Power Trading Company Limited

VISA Power (Jharkand) Pvt Limited

VISA Power (Orissa) Pvt Limited

VISA Energy Ventures Limited

Key Managerial Personnel Mr. Vishambhar Saran (Chairman)

Mr. Vishal Agarwal (Managing Director)

Mr. Basudeo Prasad Modi (Deputy Managing Director upto 31 March 2012)

Mr. Prabir Ramendralal Bose (Deputy Managing Director w.e.f 1 April 2012)

Relatives of Key Managerial Personnel Mrs. Saroj Agarwal (Wife of Chairman)

Mr. Vikas Agarwal (Son of Chairman)

Mr. Ashok Agarwal (Brother of Chairman)

Enterprise over which Relatives of Key VISA Minmetal Limited

Managerial Personnel having significant VISA Realty Limited

influence VISA Aviation Limited

VISA Resources Pte Limited

VISA Bulk Shipping Pte Limited

Tastebuds Gourmet Foods Private Limited

VISA Trust



91

3.40 (b) Details of Transactions with Related Parties

Disclosure in respect of transactions in excess of 10% of the total related party transactions of the same type

Rs. Million

Nature of Transactions Name of the related Party 31 March 2012 31 March 2011

Rent Paid VISA International Limited 7.21 7.21

VISA Infrastructure Limited 4.23 3.59

Purchase of Goods VISA Resources India Limited 3,474.04 1,181.47

Sale of Goods VISA Resources India Limited 1,839.55 1,339.62

VISA Resources Pte Limited - 1,254.61

Freight paid for Purchase of Goods VISA Bulk Shipping Pte Limited 622.91 570.73

VISA Resources India Limited 29.95 66.03

Purchase of Fixed Assets VISA Resources India Limited 5.42 -

Hire Charges VISA Resources India Limited 16.08 50.88

Professional Fees VISA Infrastructure Limited 13.24 11.25

Interest Income VISA Resources India Limited - 36.18

Ghotaringa Minerals Limited 0.28 0.12

Finance Cost VISA Power Limited 17.50 17.48

VISA Infrastructure Limited 20.12 -

VISA Resources India Limited 67.04 -

Travelling Expenses VISA Aviation Limited 71.71 2.04

Sitting Fees Mrs. Saroj Agarwal 0.04 0.08

Mr. Vikas Agarwal 0.16 0.17

Remuneration Mr. Vishambhar Saran 4.48 27.49

Mr. Vishal Agarwal 4.15 22.16

Mr. Basudeo Prasad Modi 2.79 6.15

Investment made VISA Urban Infra Limited - 10.00

Sale of Fixed assets VISA Power Limited - 0.33

Reimbursement of Expenses (Net) VISA Infrastructure Limited 9.17 20.80

VISA BAO Limited 4.35 3.36

VISA Resources India Limited 24.10 0.29

VISA Urban Infra Limited - 6.65

Advance Received against CWIP VISA Power Limited - 160.00

VISA Resources India Limited - 80.00

Advance Received VISA Resources India Limited 2,581.17 -

Security Deposit Given VISA Infrastructure Limited - 260.00

Received Advance towards facility sharing VISA BAO Limited 393.60 -

Refund of Deposits VISA International Limited 4.50 7.50

Unsecured Loan Given Ghotaringa Minerals Limited - 2.50

Unsecured Loan Taken VISA Infrastructure Limited 506.40 -



92

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93

3.41 PREVIOUS YEAR FIGURES

The Financial Statements for the year ended 31 March 2011 had been prepared as per the then applicable ,pre-revised Schedule

VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the

financial statements for the year ended 31 March 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year

figures have also been reclassified to confirm to this year’s classification. The adoption of Revised Schedule VI for previous year

figures does not impact recognition and measurement principles followed for preparation of financial statements.











94

Rs. Million

31 March 2012 31 March 2011

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before Tax (1,964.85) 864.55

Adjusted for :


Finance Costs 1,896.68 1,029.49

Interest Income (240.03) (137.66)

Provision for Bad & Doubtful Debts 3.45 33.53

Provision for Doubtful Advances 6.34 18.14

Liabilities no longer required written back - (22.17)

Provision for Doubtful Debts / Advances written back (42.36) (23.34)

(Profit) / Loss on sale of Fixed Assets (8.25) -

Miscellaneous Expenses Written off - 24.55

Unrealised Forex Loss / (Gain) [Net] 574.98 (192.36)

Operating Profit before working capital changes 737.48 2,076.78

Adjustments for changes in working capital

(Increase) / Decrease in Trade and other receivables (33.00) 123.62

(Increase) / Decrease in Inventories 431.73 (569.37)

(Increase) / Decrease in Trade and other Payables 4,370.20 1,424.75

Cash generated from Operations 5,506.41 3,055.78

Direct Taxes paid (51.45) (150.99)

Net Cash from Operating Activities 5,454.96 2,904.79

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets / Capital Work in Progress (6,071.66) (4,646.22)

(Increase) / Decrease in Capital Advances 40.81 167.00

Proceeds from Sale of Fixed Assets 10.36 0.33

Purchase of Investments - (10.00)

Increase in Margin Money (228.26) (150.87)

Interest received 227.23 136.45

Net Cash used for Investing Activities (6,021.52) (4,503.31)

Cash Flow Statement for the year ended 31 March, 2012


95

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Long Term Borrowings 2,228.60 2,215.19

Repayment of Long Term Borrowings (1,713.38) (844.04)

Proceeds from Short Term Borrowings (Net) 1,118.23 1,166.42

Advance received from related party 396.95 -

(Increase) / Decrease in Earmarked Accounts (0.19) (0.42)

Dividend paid (110.00) (110.00)

Dividend Tax paid (17.84) (18.69)

Finance Cost paid (1,606.16) (909.56)

Net Cash from Financing Activities 296.21 1,498.90

Net increase / (decrease) in Cash and Cash Equivalents (270.35) (99.62)

D. CASH AND CASH EQUIVALENTS

Net (Decrease) in Cash and Cash Equivalents (270.35) (99.62)

Cash and Cash Equivalents as at 01 April 2011 374.32 473.94

Cash and Cash Equivalents as at 31 March 2012 103.97 374.32

Notes Cash Flow Statement

1. Cash and cash equivalents consist of cash on hand and balance with banks and deposits with banks.

Rs. Million

31 March 2012 31 March 2011

Balance with Banks in




Cash & Cash Equivalents 103.97 374.32

2. The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard on ‘Cash

Flow Statements (AS-3)’ issued by “The Institute of Chartered Accountants of India”.

3. Previous period figures have been rearranged / regrouped wherever necessary.

This is the Cash Flow Statement referred to in our Report of even date.









Cash Flow Statement for the year ended 31 March, 2012

Rs. Million

31 March 2012 31 March 2011


96

Auditors’ Report on the Consolidated Financial Statements of VISA Steel Limited

The Board of Directors of VISA Steel Limited

1. We have audited the attached consolidated balance sheet

of VISA Steel Limited (the “Company”) and its subsidiaries,

its jointly controlled entity; hereinafter referred to as the

“Group” (refer Note 2.2 to the attached consolidated

financial statements) as at 31 March 2012, the related

consolidated Statement of Profit and Loss and the

consolidated Cash Flow Statement for the year ended on

that date annexed thereto, which we have signed under

reference to this report. These consolidated financial

statements are the responsibility of the Company’s

management. Our responsibility is to express an opinion

on these financial statements based on our audit.






includes examining, on a test basis, evidence supporting the

amounts and disclosures in the financial statements. An

audit also includes assessing the accounting principles used

and significant estimates made by management, as well

as evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for

our opinion.

3. We did not audit the financial statements of one subsidiary

and the jointly controlled entity included in the consolidated

financial statements, which constitute total assets of Rs

27.98 Million and net assets of Rs 22.76 Million as at 31

March, 2012, total revenue of Rs. 0.07 Million , net loss of

Rs 0.03 Million and net cash outflows amounting to Rs 0.93

Million for the year then ended. These financial statements

and other financial information have been audited by

other auditors whose reports have been furnished to us,

and our opinion on the consolidated financial statements

to the extent they have been derived from such financial

statements is based solely on the report of such other

auditors.

4. We report that the consolidated financial statements

have been prepared by the Company’s Management

in accordance with the requirements of Accounting

Standard (AS) 21 - Consolidated Financial Statements

and Accounting Standard (AS) 27 - Financial Reporting of

Interests in Joint Ventures notified under sub-section 3C of

Section 211 of the Companies Act, 1956.


97

5. Without qualifying our opinion, we draw attention to Note

3.33 to the consolidated financial statements, regarding

the preparation of the same on a going concern basis. The

Holding Company incurred a net loss of Rs. 1188.54 Million

during the year ended 31 March, 2012 and, as of that date,

the Company’s current liabilities exceeded its current assets

by Rs. 15,111.77 Million, while the Company’s net worth

remains positive as at the balance sheet date. In view of

proposed plan to restructure the Holding Company’s debt

profile to convert majority of their short term loan to long

term loan , these financial statements have been prepared

on a going concern basis and no adjustment has been

made to the carrying value of the assets and liabilities.

6. Based on our audit and on consideration of reports of other

auditors on separate financial statements and on the other

financial information of the components of the Group as

referred to above, and to the best of our information and

according to the explanations given to us, in our opinion,

the attached consolidated financial statements give a true

and fair view in conformity with the accounting principles

generally accepted in India:

(a) in the case of the consolidated Balance Sheet, of the state

of affairs of the Group as at 31 March 2012;

(b) in the case of the consolidated Statement of Profit and

Loss, of the loss of the Group for the year ended on that

date: and

(c) in the case of the consolidated Cash Flow Statement, of the

cash flows of the Group for the year ended on that date.

For Lovelock & Lewes



Prabal Sarkar




98

Rs. Million


I. EQUITY AND LIABILITIESShareholders’ Fund

Share capital 3.1 1,100.00 1,100.00

Reserves and surplus 3.2 1,276.53 2,465.32

2,376.53 3,565.32

Minority Interest 337.00 336.97

Non Current LiabilitiesLong-term borrowings 3.3 9,838.53 9,983.60

Deferred tax liabilities (Net) 3.35 0.15 597.16

Other long-term liabilities 3.4 337.70 10.19

Long-term provisions 3.5 10.99 9.94

10,187.37 10,600.89

Current LiabilitiesShort-term borrowings 3.6 2,808.39 1,668.22

Trade payables 3.7 9,353.84 7,255.69

Other current liabilities 3.8 9,092.99 5,747.63

Short-term provisions 3.9 53.79 158.39

21,309.01 14,829.93

Total 34,209.91 29,333.11 II. ASSETS

Non Current AssetsFixed assetsTangible assets 3.10 (a) 7,810.89 7,709.52

Intangible assets 3.10 (b) 11.31 2.77

Capital work-in-progress 3.10 (c) 18,934.63 13,953.83

26,756.83 21,666.12

Long-term loans & advances 3.11 1,207.36 1,032.07

Other non-current assets 3.12 93.98 108.77

28,058.17 22,806.96

Current AssetsInventories 3.13 3,525.07 3,956.80

Trade receivables 3.14 515.81 479.86

Cash and Bank balances 3.15 989.77 964.33

Short-term loans and advances 3.16 1,071.24 1,048.72

Other current assets 3.17 49.85 76.44

6,151.74 6,526.15

Total 34,209.91 29,333.11

Consolidated Balance Sheet as at 31 March 2012

The notes are an integral part of the Consolidated Financial Statements.

This is the Consolidated Balance Sheet referred to in our report of even date.










99

The notes are an integral part of the Consolidated Financial Statements.

This is the Consolidated Statement of Profit and Loss referred to in our report of even date.









Rs. Million


INCOMERevenue from operations (Gross)

Sale of products 3.20 14,275.74 13,404.10

Other operating revenues 3.21 162.96 177.38

14,438.70 13,581.48

Less: Excise duty 779.65 345.09

Revenue from operations (Net) 13,659.05 13,236.39

Other income 3.22 262.48 245.15

I. Total revenue 13,921.53 13,481.54 EXPENSES

Cost of materials consumed 3.23 10,381.81 8,009.69

Purchases of Stock-in-Trade 3.24 2,441.33 2,397.26

Changes in inventory of finished goods, work-in-progress and Stock-

in-Trade

3.25 (1,410.45) (745.68)

Employee benefits expense 3.26 382.00 439.15

Finance costs 3.27 1,896.68 1,029.49

Depreciation and amortisation expense 3.10 (a) & (b) 511.93 482.38

Other expenses 3.28 1,066.04 1,004.57

II. Total expenses 15,269.34 12,616.86 III. (Loss) / Profit before exceptional items and tax (1,347.81) 864.68 IV. Exceptional items (617.27) - V. (Loss) / Profit before tax and share of minority interest (1,965.08) 864.68 VI. Tax expense

Current tax - 182.66

Less : MAT credit entitlement (179.30) (127.74)

Net current tax (179.30) 54.92

Deferred tax (597.00) 296.05

Tax Adjustment for earlier years (0.01) (0.01)

VII. (Loss) / Profit after Tax before share of minority interest (1,188.77) 513.72 VIII. Less : Minority Interest 0.02 0.02 IX. (Loss) / Profit for the period (1,188.79) 513.70 X. Earning per equity share 3.29

Basic (Rs.) (10.81) 4.67

Diluted (Rs.) (10.81) 4.67

Consolidated Statement of Profit and Loss for the year ended 31 March 2012


100

1. GENERAL INFORMATION

VISA Steel Limited (VSL) is engaged in the manufacturing of Iron and Steel products including LAM Coke, High Carbon Ferro

Chrome, Pig Iron, Sponge Iron and Special Steel with captive power plant at Kalinganagar, Odisha. Incorporated on 10 September,

1996, VSL has its registered office at Bhubaneswar and Corporate Office in Kolkata with manufacturing units in Kalinganagar and

Golagaon and branch offices across India. VISA Steel Limited is a public limited company with its shares listed on Bombay Stock

Exchange (BSE) and National Stock Exchange (NSE).

VISA Steel Limited holds 65% stake in VISA BAO Limited which is setting up a 100,000 MTPA Ferro Chrome Plant in Kalinganagar,

Jajpur Road, Odisha. Baosteel Resources Co. Ltd., China, which is one of the leading Steel companies in the world, holds the

balance 35% stake.

VISA Steel Limited holds 89% stake in Ghotaringa Minerals Limited which is assisting in developing a chrome ore deposit in

Dhenkanal district of Odisha and balance 11% is held by M/s Orissa Industries Limited, Odisha.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Consolidation

The Consolidated Financial Statements comprises of the financial statements of VISA Steel Limited (the Holding Company)

and its subsidiaries and joint venture. The Consolidated Financial Statements are prepared in accordance with Accounting

Standard 21 on “Consolidated Financial Statements” and Accounting Standard 27 on “Financial Reporting of Interests in

Joint Ventures”.

The Consolidated Financial Statements are prepared on the following basis:

(i) The financial statements of the Holding Company and its Subsidiary Companies have been combined on a line by line

basis by adding together like items of assets, liabilities, income and expenses. The intra-group balances, intra-group

transactions and unrealised profit or losses thereon have been fully eliminated.

(ii) The financial statements of the subsidiaries and joint venture used in the consolidation are drawn up to the same

reporting date as that of the Holding Company.

(iii) The excess value of the consideration given over the net value of the identifiable assets acquired in one of the

subsidiary company is recognised as “Goodwill” and is not being amortised.

(iv) Joint venture have been accounted for using the proportionate consolidation method whereby a venturer’s share of

each of the assets and liabilities of the jointly controlled entity is accounted for on a prorata basis.

2.2 The subsidiary companies and joint venture considered in the Consolidated Financial Statements are:

Country of Incorporation

Proportion of ownership interest As at 31

March 2012 [Including Beneficial Interest]

Proportion of ownership interest As at 31

March 2011 [Including Beneficial Interest]

Subsidiaries considered for consolidation :

VISA BAO Limited India 65% 65%

Ghotaringa Minerals Limited India 89% 89%

Joint Venture considered for consolidation :

Visa Urban Infra Limited India 26% 26%

2.3 Principal Accounting Policies

The Consolidated Financial Statements have been prepared in accordance with applicable Accounting Standards in India.

A summary of Important accounting policies are set out below.

Notes to Consolidated Financial Statements


101

2.4 Basis of Accounting

The Consolidated Financial Statements have been prepared under the historical cost convention.

2.5 (a) Fixed Assets

i) Fixed Assets are stated at their acquisition cost (net of CENVAT credit), where applicable together with any

incidental expenses of acquisition / installation. Cost of acquisition includes borrowing costs that are directly

attributable to the acquisition / construction of qualifying assets. Impairment loss, if any, ascertained as per the

Accounting Standard u/s 211 (3C) of the Companies Act, 1956.

(ii) Exchange difference pertaining to long term foreign currency monetary items are added / deducted from the

capital assets in pursuance to the Notification No. GSR 914(E) dated 29 December 2011 issued by Ministry of

Corporate Affairs amending Accounting Standard (AS) 11, “The Effects of Changes in Foreign Exchange Rates”,

w.e.f 1 April 2011.

(iii) Profit or loss on disposal of fixed assets is recognised in the Statement of Profit and Loss.

(b) Depreciation and Amortisation

(i) Depreciation on fixed assets, other than leasehold land, is provided on Straight Line Method in accordance with

Schedule XIV of the Companies Act, 1956. Leasehold land is amortised over the period of lease. No depreciation

is provided for freehold land.

(ii) Leasehold asset which are jointly held are amortised over the period of the lease term.

(iii) Computer software has been capitalised as Intangible Assets and are being amortised over its useful life of three

years.

2.6 Inventories

Inventories are stated at cost (net of CENVAT credit) or net realisable value, whichever is lower. Cost is determined on

weighted average basis and comprises of expenditure incurred in the normal course of business in bringing such inventories

to their location and includes, where applicable appropriate overheads. Obsolete, slow moving and defective inventories are

identified at the time of physical verification and where necessary, provision is made for such inventories.

2.7 Sales

Sales represent the invoiced value of goods and services supplied, net of value added tax (VAT) / sales tax but inclusive of

excise duty.

2.8 Transactions in Foreign Currencies

(i) Transactions in foreign currencies are recorded in rupees by applying the exchange rate prevailing on the date of


Exchange gain or loss arising on settlement / translation is recognised in the Statement of Profit and Loss, except those

as mentioned in note 2.5 a (ii)

(ii) Premium or discount on forward contracts are amortised over the life of the contract. Foreign exchange forward

contracts are revalued at the balance sheet date and the exchange difference between the spot rate at the date of

the contract and the spot rate on the balance sheet date is recognised as gain / loss in the Statement of Profit & Loss,

except those as mentioned in note 2.5 a (ii)

2.9 Employee Benefits

(i) Post Retirement Benefit

(a) Provident Fund

The Companies operate defined contribution schemes like Provident Fund. The Companies makes regular

contribution to provident funds which are fully funded and administered by Government and are independent of

Company’s finance. Contributions are recognised in Statement of Profit & Loss on an accrual basis.



102

(b) Gratuity

Defined Benefit Plans like Gratuity Schemes are also maintained by the companies. The Companies have

taken out a policy with Life Insurance Corporation of India (LICI) for future payment of gratuity liability to its

employees. Gratuity liability is determined at the end of each year by LICI in accordance with the method stated

in the Accounting Standard 15 (Revised 2005) (AS 15 Revised) on “Employee Benefits” and such liability has been

provided for in the accounts. Annual Premium determined by LICI is contributed.

(ii) Other Long-term Employee Benefits:

Leave Encashment

Leave encashment benefit is determined on the basis of independent actuarial valuation (using Projected Unit Credit

Method), at the end of each year in accordance with the method stated in [AS 15 (Revised)] and such liability is

provided for in the accounts and charge is recognised in the Statement of the Profit and Loss.

(iii) Other Employee Benefits are accounted for on accrual basis.

2.10 Accounting for Taxes on Income

Current tax in respect of taxable income is recognised based on applicable tax rates and laws. Deferred tax is recognised

subject to consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between

taxable income and accounting income, that originate in one period and are capable of reversal in one or more subsequent

periods and is measured using tax rates and laws that have been substantively enacted by the balance sheet date. Deferred

tax assets are recognised only if there is reasonable certainty that sufficient future taxable income will be available against

which such deferred tax assets will be realised. Such assets are reviewed as at each balance sheet date to reassess realisability

thereof. Minimum Alternate (MAT) Tax Credit is recognised as an asset only when and to the extent there is convincing

evidence that the Company will pay normal income tax during the specified period. Such asset is reveiwed at each balance

sheet date and the carrying amount of the MAT Credit asset is written down to the extent there is no longer a convincing

evidence to the effect that the Company will pay normal income tax during the specified period.

2.11 Borrowing Cost

Borrowing costs attributable to acquisition and / or construction of qualifying assets are capitalised as a part of the cost

of such assets upto the date when such assets are ready for its intended use. Other borrowing costs are charged to the

Statement of Profit & Loss.

2.12 Leases

Assets acquired as leases where a significant portion of the risk and rewards of ownership are retained by the lessor

are classified as Operating Leases. Lease rentals in respect of assets acquired under Operating Lease are charged to the

Statement of Profit & Loss on accrual basis.

2.13 Miscellaneous Expenditure - To the extent not written off or adjusted

Public issue expenses are being amortised over a period of five years.

Rs. Million

31 March 2012 31 March 2011

3.1 SHARE CAPITAL

Authorised

160,000,000 Equity Shares of Rs.10/- each 1,600.00 1,600.00

Issued, Subscribed and Paid-up

110,000,000 Equity Shares of Rs.10/- each fully paid up 1,100.00 1,100 .00

(a) Rights, preferences and restrictions attached to shares

The Company has only one class of equity shares referred to as equity shares having face value of Rs.10/- each. Each holder of

equity shares is entitled to one vote per share. The Company declare and pays dividend in Rupees. The dividend proposed by the

Board of Directors is subject to the approval of shareholders in the Annual General Meeting.



103

(b) Shares held by the Holding / Ultimate Holding Company and / or

their Subsidiaries and Associates

57,612,167 Equity Shares of Rs.10/- each held by VISA Infrastructure

Limited the Ultimate Holding Company

576.12 576.12

(c) Shareholders holding more than 5 % shares

VISA Infrastructure Limited (Number) 57,612,167 57,612,167

VISA Infrastructure Limited (%) 52.37 52.37

VISA International Limited (Number) 23,532,233 23,532,233

VISA International Limited (%) 21.39 21.39

(d) Share Reserved for issue under option

For details of share reserved for issue under the Employee Stock Option Plan (ESOP) of the Company refer note: 3.30

(e) VISA Infrastructure Limited, the ultimate Holding Company has pledged 55,000,000 number of equity shares (17,300,000

number equity shares as on 31 March 2012) being 95.47 % of it’s total shareholding.

Rs. Million

31 March 2012 31 March 2011

3.2 RESERVES AND SURPLUS

Capital Reserve




Securities Premium Reserve

Balance as at the beginning of the year 1,645.00 1,645.00


Balance as at the end of the year 1,645.00 1,645.00

General Reserve




(Deficit) / Surplus in the Statement of Profit and Loss


Add : Net (Loss) / Profit after Tax transferred from Statement of Profit & Loss (1,188.79) 513.70

Amount available for appropriation (471.42) 845.21

Less: Appropriations:

Proposed Dividend - 110.00

Income Tax on Proposed Dividend - 17.84

Balance as at the end of the year (471.42) 717.37

Total 1,276.53 2,465.32


Rs. Million

31 March 2012 31 March 2011


104

Rs. Milloin

3.3 LONG-TERM BORROWINGS Non Current Portion Current Maturities Total

31 March

2012

31 March

2011

31 March

2012

31 March

2011

31 March

2012

31 March

2011

Term Loan (Secured)

From Banks 8,234.92 9,126.95 3,270.55 2,048.60 11,505.47 11,175.55

From Other Parties 731.25 340.56 140.58 112.50 871.83 453.06

Other Loans & Advances (Secured)

Equipment and Other Loan

From Banks 15.88 53.74 41.21 36.34 57.09 90.08

From Other Parties 100.08 212.35 132.96 112.61 233.04 324.96

Loan from Related Parties (Unsecured) 756.40 250.00 - - 756.40 250.00

9,838.53 9,983.60 3,585.30 2,310.05 13,423.83 12,293.65

The above amount includes

Secured borrowing 9,082.13 9,733.60 3,585.30 2,310.05 12,667.43 12,043.65

Unsecured borrowing 756.40 250.00 - - 756.40 250.00

Amount disclosed under the head “other

current liabilities” (Refer Note 3.8)

- - (3,585.30) (2,310.05) (3,585.30) (2,310.05)

9,838.53 9,983.60 - - 9,838.53 9,983.60

a. In respect of Holding Company, Term Loan from Banks is secured by way of first charge on the land and fixed assets situated

at Kalinganagar Industrial Complex, District Jajpur, Odisha together with hereditaments and premises and building, plant and

machineries permanently affixed thereto and other erections thereon both present and future at Plant at Kalinganagar Industrial

Complex, District Jajpur, Odisha and second charge on all the current assets of the Company ranking pari-passu with other

banks along with Corporate Guarantee of VISA International Limited and personal guarantee of Managing Director of the

Company.

b. The Subsidiary Company, VISA BAO Limited, has entered into joint consortium agreement with consortium bankers on 16

January 2012, whereby an amount of Rs.1820 million was sanctioned as Rupee Term Loan (Facility). Such Facility together with

all interest, all fees, commitment charges, costs, charges, expenses and other monies whatsoever stipulated in or payable under

this Agreement and the other Financing Documents is secured by:-

(i) Assignment of the right, on pari-passu basis among the term lenders of the consortium, to receive the advance (‘Advances for

Infrastructure Development’ estimated at Rs.786 million as per project cost”) from VISA Steel Ltd. under the Infrastructure

Sharing Agreements between VISA Steel Ltd. & VISA BAO Ltd. for sharing the former’s facilities by the latter, in case of

termination of Infrastructure Sharing Agreements.

(ii) A first charge on pari-passu basis to all the term lenders on all the immovable and movable assets of the Borrower, created/

to be created / acquired / to be acquired in this Project (other than those assets which has been financed by the other

lenders / financial institutions and specifically charged to them).

(iii) Hypothecation of plant and machinery, miscellaneous fixed assets and all other movable fixed assets.

(iv) Equitable Mortgage of 50 acres of land along with the factory building and the super structures thereof, situated at

Jakhapura Village, P.S. No, 197.

(v) Collateral Security in the form of second charge on all the current assets of the Borrower, both present and future, ranking

pari-passu basis to all the proposed Term Lenders.

(vi) Non Disposal Undertaking on 51% of shares held by the Promoters in the Borrower.



105

c. In respect of Holding Company, the General Corpus Corporate Loan from State Bank of India is secured by first pari-passu charge

on the fixed assets of the Company situated at Kalinganagar Industrial Complex, District Jajpur, Odisha and first charge on the fixed

assets situated at Golagaon plant at Ankurapal and second charge on all the current assets of the Company both present and future

on pari-passu basis along with other term lenders. State Bank of India is also having lien on fixed deposits of Rs.110.00 million.

d. In respect of Holding Company, Subordinate Debt Facility from a Consortium of banks and financial institutions through IL&FS

Financial Services Limited acting as Facilitator is secured by way of a second mortgage & charge on pari-passu basis with the

Working Capital Lenders of all such immovable properties and interest in the immovable properties including buildings, structures,

plant and machinery embedded therein, present & future in the industrial land situated at Kalinganagar Industrial Complex,

District Jajpur, Odisha and by way of second charge on pari-passu basis with the Term Loan lenders on all the movable current

assets and movable plant & machinery, spares, tools, accessories both present & future along with Corporate Guarantee of VISA

International Limited. The registrarion of the above charge is pending.

e. Term loan from Financial Institution in respect of Holding Company is secured by way of first charge on all the assets, both present

& future, of the Company’s plant including township being financed by HUDCO at Kalinganagar Industrial Complex, Odisha and

pari-passu second charge on all the current assets of the Company within the intregated Steel Complex including Township

being financed by with other banks along with Corporate Guarantee of VISA International Limited and personal guarantee of

Managing Director of the Company.

f. Equipment Finance and other loan from banks and financial Institutions in respect of Holding Company are secured by way of

hypothecation of vehicles / machinery taken under the loan arrangement.

In respect of Subsidiary Company, VISA BAO Limited Vehicle loan from financial Institutions are secured by way of hypothecation

of vehicles taken under the loan arrangement.

g. Unsecured loan in respect of Holding Company includes Rs.250 million received from fellow subsidiary, VISA Power Limited and

Rs.506.40 million from the Ultimate Holding Company, VISA Infrastructure Limited.

Rs. Million

31 March 2012 31 March 2011

3.4 OTHER LONG-TERM LIABILITIES

Contractual obligation towards facility sharing 333.00 -

Others - Projects - 10.19

Add - Share of Joint Venture [Refer Note 2.2] 4.70 -

337.70 10.19

Rs. Million

31 March 2012 31 March 2011

3.5 LONG-TERM PROVISIONS


10.99 9.94

Rs. Million

31 March 2012 31 March 2011

3.6 SHORT-TERM BORROWINGS

Secured

Loans Repayable on Demand from Banks 2,536.76 1,419.41

From Financial Institution

EXIM 171.67 149.99

SIDBI 99.96 98.82

2,808.39 1,668.22



106

In respect of Holding Company, the working capital facilities from Banks and Financial Institution-EXIM are secured by way of first

hypothecation charge ranking pari-passu with other banks on the whole of the current assets, namely, stock of raw material, stock

in process, semi finished & finished goods, stores & spares not relating to plant & machinery (i.e. consumable stores & spares), bills

receivable & book debts and all other movables, both present and future, whether installed or not provided that the charge in favour of

the banks on the movable plant & machinery, machinery spares, tools & accessories shall be subject to the charges created and / or to

be created thereon in favour of the term lenders to secure the long term borrowing / loans for capital expenditure. The working capital

facilities are also secured by second mortgage charge on the land situated at Kalinganagar Industrial Complex , District Jajpur, Odisha

together with building and structures thereon and all plant & machinery attached to the earth or permanently fastened to anything

attached to the earth along with corporate guarantee of VISA International Limited and personal guarantee of Managing Director of

the Company. Interest rate on such Secured Demand Loan from Banks is linked with the base rate of respective banks. Overdue amount

as on Balance Sheet date is Rs.47.30 million.

Short term borrowing from Small Industries Development Bank of India (SIDBI) is the amount availed as on Balance Sheet date

against the limit of Rs.100 million under the MSME Receivable Finance Scheme sanctioned by SIDBI covering the sale of goods services

made by SME / eligible service sector and transport services. Interest is payable on such facility at the rate of 13% p.a. up to 90 days

usance. The above loan is secured by way of unconditional corporate guarantee of VISA International Limited.

Rs. Million

31 March 2012 31 March 2011

3.7 TRADE PAYABLES

Acceptance 1,043.13 766.83

Sundry Creditors

MSMED 57.29 52.00

Others 8,253.42 6,436.86

9,353.84 7,255.69

Rs. Million

31 March 2012 31 March 2011

3.8 OTHER CURRENT LIABILITIES

Current maturities of Long Term Debt (Refer note 3.3) 3,585.30 2,310.05

Interest Accrued and due on borrowings 393.56 119.34

Interest Accrued but not due on borrowings 18.12 1.34

Employee related liabilities 69.29 58.16

Statutory liabilities 101.81 165.87

Share Refund Order account 0.32 0.34

Unclaimed Dividend 1.00 0.79

Advance From Customer 145.02 90.44

Advance From Fellow Subsidiary 2,581.17 -

Capital Creditors 1,959.53 2,885.18

Other liabilities 237.62 114.80

Add - Share of Joint Venture [Refer Note 2.2] 0.25 1.32

9,092.99 5,747.63

Rs. Million

31 March 2012 31 March 2011

3.9 SHORT TERM PROVISIONS


Provision for Dividend - 110.00

Income Tax on Provision for Dividend - 17.84

53.79 158.39



107


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108


Rs. Million

31 March 2012 31 March 2011

3.10 (c) Capital work-in-progress

Capital work in progress 18,919.94 13,943.01


18,934.63 13,953.83

Rs. Million

31 March 2012 31 March 2011

3.11 LONG-TERM LOANS & ADVANCES

Unsecured Considered Good

Capital Advance 390.02 511.37

Security Deposits 180.85 61.65

Loans & Advances to related parties

Security Deposit with related parties 269.97 271.82


MAT Credit Entitlement 307.04 127.75

1,207.36 1,032.07

Rs. Million

31 March 2012 31 March 2011

3.12 OTHER NON-CURRENT ASSETS

Margin Money with maturity more than 12 months 82.87 75.77

Demand deposits - 22.00

Other Non Current Assets 11.11 11.00

93.98 108.77

Rs. Million

31 March 2012 31 March 2011

3.13 INVENTORIES (REFER NOTE 2.6)

Raw Materials 1,305.88 1,395.83

Work In Progress 75.25 70.92


Stock- In-Trade 441.01 463.95

Stores and Spares parts* 256.74 203.29

By Products 268.38 516.34

3,525.07 3,956.80

* Including Capital Items lying in stores 38.97 41.89


109


Rs. Million

31 March 2012 31 March 2011

3.14 TRADE RECEIVABLESUnsecuredDebts Outstanding for a period exceeding six months

Considered Good 36.98 -


Other DebtsConsidered Good 478.83 479.86

520.95 513.39


515.81 479.86

Rs. Million

31 March 2012 31 March 2011

3.15 CASH AND BANK BALANCES(i) Cash and Cash equivalentsBalance with Banks in :




(ii) Other Bank balancesEarmarked Accounts :



Margin Money with maturity more than 3 months but less than 12 months 682.98 568.15


989.77 964.33

Rs. Million

31 March 2012 31 March 2011

3.16 SHORT TERM LOANS AND ADVANCES Unsecured, considered good unless otherwise stated

Security Deposits - 31.03


For Supply of goods & rendering servicesConsidered Good 285.80 470.33


Less: Provision for Doubtful Advances (13.95) (18.14)

Loans & Advance to related partiesAdvances to Key Managerial Personnel * 34.44 -

Advances to Ultimate Holding Company 30.65 20.80


[Net of Provision Rs.484.36 million (2011: Rs.484.36 million)]

Others Taxes receivable / adjustable 432.39 394.47

Less: Provision for Other Taxes receivable / adjustable (7.80) (7.80)

Other Advances 0.42 0.52

Add - Share of Joint Venture [Refer Note 2.2] 0.10 -

1,071.24 1,048.72

* Excess Remuneration paid to managerial personnel, by the Holding Company during the year is subject to the approval by the Central

Government. Pending such approval excess remuneration paid to managerial personnel amounting to Rs.34.44 million is being held by

them in trust for the Company.


110


Rs. Million

31 March 2012 31 March 2011

3.17 OTHER CURRENT ASSETS

Receivable from DGFT & Customs towards Export Incentive 16.74 53.21

Interest Accrued on Deposits 33.03 23.15


49.85 76.44

3.18 CONTINGENT LIABILITIES

(a) Claim against the Holding Company not acknowledged as debt:

(i) In respect of a charter party dispute between VISA Comtrade (Asia) Limited (the “Charterer”) and Transfield

Shipping Inc., Panama, (the “Owner of the vessel- Prabhu Gopal”) the said Owner of the vessel has filed a civil suit

in the Hon’ble Calcutta High Court against the Company and the charterer and claimed the relief for a decree for

US$ 0.30 million to be expressed in Indian Currency at such rate of exchange and/or on such terms as the Court

may deem fit and proper, Injunction, Costs or other reliefs. The Company has not accepted the claim as it was not

a party to the said Agreement and hence cannot be made a party to this suit. The Hon’ble Calcutta High Court

passed interim order dated 11 May 2005 and 20 June 2005, restraining the Company and the Charterer from

withdrawing any amount from a specified bank account without leaving a balance for a sum of Rs.12.50 million,

which has been set aside by the bank from the cash credit limit of the Company. The company has been legally

advised that the above interim order has been expired due to efflux of time and has not been extended by the

Hon’ble Calcutta High Court.

(ii) Applications have been filed by the legal heirs of a deceased employee of the Company, who died in a road

accident while travelling in the Company’s vehicle for his personal work, claiming a compensation of Rs.6.10 million

and interest @ 18% per annum. The Company has contested the claim, which is currently pending before the

Motor Accident Claims Tribunal, Bhubaneswar.

Application filed by the legal heirs of the sister of the deceased employee who died with him, has been disposed off

by the Aditional District Judge Cum 3rd Motor Accident Claims Tribunal, Rourkela on 25 November, 2011 directing

the New India Assurance Co. Ltd to pay Rs.0.18 million with interest 9% p.a. from the date of application till the

date of payament. An appeal has been filed by the New India Assurance Co. Ltd before the Hon’ble High Court of

Orissa in May 2012 against such order.

Rs. Million

31 March 2012 31 March 2011

(b) Guarantees


(ii) Corporate Guarantee issued on behalf of subsidiary company 720.00 -

(c) Other money for which the Holding Company is contingently liable

(i) Income Tax matter on Appeal 63.63 63.63

(ii) Sales Tax matter on Appeal 47.22 74.24

(iii) Value Added Tax matter on Appeal - 20.37

(iv) Entry Tax matters 178.42 170.01

(v) Customs Duty matter on Imported Goods 34.86 34.86


111


Rs. Million

31 March 2012 31 March 2011

3.19 CAPITAL AND OTHER COMMITMENTS:

(a) Capital Commitments

Estimated amount of Contracts remaining to be executed on Capital

Account (Net of advance of Rs.376.29 million, 2011: Rs.417.10 million)

870.58 1,783.58

(b) Other Commitments

(i) The Holding Company has obtained licenses from the Government of India under EPCG Scheme for import of

machineries at a reduced Customs Duty and thereby saved an amount of Rs.388.35 million towards duty upto

31March 2012 (2011: Rs.384.40 million). As per the requirement under the said Scheme, the Company is required

to export amounting to Rs.2,989.69 million (2011: Rs.2,986.46 million) within the specified periods, failing which,

the Company has to make payment to the Government of India equivalent to the duty benefit enjoyed along with

interest. The Company is confident that the above export obligation will be met during the specified period.

Rs. Million

31 March 2012 31 March 2011

(ii) In respect of Subsidiary Company, VISA BAO Limited 410.93 -

Rs. Million

31 March 2012 31 March 2011

3.20 SALE OF PRODUCTS

Sale of Finished Goods

Pig Iron 1,826.19 835.02

Chrome Concentrate - 71.66

LAM Coke 5,659.30 4,803.18

Ferrochrome 1,415.88 2,518.25

Sponge Iron 2,890.01 2,277.92

Bloom / Round 1,141.04 -

Rolled Product 180.72 -

By-products 602.12 590.08

Power 564.22 77.00

Total 14,279.48 11,173.11

Sale of Stock-in-Trade

Coal & Coke 1,620.46 2,230.99

Quick Lime 0.84 -

Total 1,621.30 2,230.99

Less: Trial Run Sale 1,625.04 -

Sale of products 14,275.74 13,404.10

Rs. Million

31 March 2012 31 March 2011

3.21 OTHER OPERATING REVENUES

Scrap sales 8.38 38.56

Conversion Income 126.38 83.21

Export Incentives 28.20 55.61

162.96 177.38


112


Rs. Million

31 March 2012 31 March 2011

3.22 OTHER INCOMEInsurance claim received 8.76 40.81

Interest Income 242.48 152.70

Net Gain / Loss from sale of Fixed asset 8.25 -

Liabilities no longer required written back - 22.17

Provisions no longer required written back - 23.34

Other non operating income 2.99 6.12

Add - Share of Joint Venture [Refer Note 2.2] - 0.01

262.48 245.15

Rs. Million

31 March 2012 31 March 2011

3.23 COST OF MATERIAL CONSUMEDChrome Ore 608.95 1,179.15

Iron Ore 2,688.37 1,712.34

Coke 11.80 59.38

Coal 7,701.40 5,082.62

Others 219.66 130.05

11,230.18 8,163.54Less: Trial Run Consumption 848.37 153.85

10,381.81 8,009.69

Rs. Million

31 March 2012 31 March 2011

3.24 PURCHASES OF STOCK-IN-TRADE

Coal & Coke 2,403.34 2,397.26

Billets 36.27 -

Quick Lime 1.72 -

2,441.33 2,397.26

Rs. Million

31 March 2012 31 March 2011

3.25 CHANGES IN INVENTORY OF FINISHED GOODS, WORK-IN-PROGRESS

AND STOCK-IN-TRADE

Opening Stock





2,357.68 1,532.81

Less: Closing Stock




113




1,962.44 2,357.68

Transfer to Project (1,756.73) -

Increase / (Decrease) in Excise Duty on Stock (48.96) 79.19

Increase / (Decrease) in Stock (1,410.45) (745.68)

Rs. Million

31 March 2012 31 March 2011

3.26 EMPLOYEE BENEFITS EXPENSE

Salaries and Wages 366.09 411.38


Staff Welfare Expenses 3.83 5.56

382.00 439.15

3.26 (a) Employee Benefits

In respect of the Holding Company and its subsidiary VISA BAO Limited

Provident fund is maintained with Regional Provident Fund Commissioner and contributions are made by the Companies

to the Fund, based on the current salaries. In the provident fund schemes, contribution are also made by the employees.

An amount of Rs.8.72 million (2011: Rs.16.19 million) has been charged to the Statement of Profit and Loss on account

of the above defined contribution schemes.

The Companies operate defined benefit schemes like gratuity and leave encashment. The Holding Company and the

Subsidiary Company, VISA BAO Limited has taken out policy with Life Insurance Corporation of India (LICI) for future

payment of gratuity liability to its employees. Annual actuarial valuations are carried out by LICI in compliance with

Accounting Standard 15 (Revised 2005) on “Employee Benefits”. Annual contributions are also made by the Companies.

Employees are not required to make any contribution.

The Companies also provide for leave encashment benefit to the employees. Annual actuarial valuations are carried

out by an independent actuary in compliance with Accounting Standard 15 (Revised 2005) on “Employee Benefits”.


In respect of the Subsidiary Company, Ghotaringa Minerals Limited and the Joint Venture Company VISA Urban Infra Limited

The relevant provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952, Employees State Insurance

Act, 1948, Payment of Gratuity Act, 1972 and Payment of Bonus Act, 1965 are not applicable to the Company.

Rs. Million

31 March 2012 31 March 2011

3.27 FINANCE COSTS

Interest expense 933.81 645.91

Other borrowing costs 962.87 383.58

1,896.68 1,029.49

The amount of finance cost capitalised for qualifying assets during the financial year 2011-12 is Rs.1,379.02 million (2010-11:

Rs.850.45 million)

Rs. Million

31 March 2012 31 March 2011

3.25 CHANGES IN INVENTORY OF FINISHED GOODS, WORK-IN-PROGRESS

AND STOCK-IN-TRADE (Contd.)


114


Rs. Million

31 March 2012 31 March 2011

3.28 OTHER EXPENSES

Consumption of Stores and Spare Parts 252.36 178.88

Power & Fuel 29.26 91.02

Rent 17.27 26.96

Repairs to buildings 2.84 3.24

Repairs to machinery 44.02 52.68

Insurance expenses 26.02 18.99

Rates and taxes, excluding, taxes on income 35.91 15.22

Material handling expenses 203.07 165.09

Freight and selling expenses 219.56 229.25

Loss on exchange fluctuation (net) * - 7.53

Miscellaneous expenses witten off - 24.55

Miscellaneous expenses** 235.69 191.15

Add: Share of Joint Venture [Refer Note 2.2] 0.04 0.01

1,066.04 1,004.57

* In view of high volatility in the value of Indian Rupee against US$ and other foreign currencies, the loss arising out of the reinstatement

of foreign currency monetary items during the current financial year amounting Rs.617.27 million (2011: Rs.Nil) has been considered

as an exceptional item.

** In respect of the Holding Company, Miscellaneous expenses of current year is net off provision written back for bad & doubtful debts

Rs.31.84 million and for doubtful advances Rs.10.52 million and also includes current year provision for bad and doubtful debt Rs.3.45

million and for advances Rs.6.34 million.

Rs. Million

31 March 2012 31 March 2011

3.29 CONSOLIDATED EARNING PER SHAREConsolidated (Loss) / Profit After Tax (A) (1,188.79) 513.70

Weighted average number (in million) of Rs.10 equity share outstanding during

the year (B)

110 110

Basic and Diluted Earning per Share (A/B) (Rs.) (10.81) 4.67

3.30 SHARE - BASED COMPENSATION IN RESPECT OF THE HOLDING COMPANY

The shareholders of the Company in the Annual General Meeting held on 17 August, 2010, has approved an Employee Stock

Option Scheme 2010 (the “ESOP Scheme 2010”), formulated by the Company, under which the Company may issue 5,500,000

options to its permanent employees and directors of the Company, its subsidiaries and its holding company, as determined by

the Remuneration Committee on its own discretion and in accordance with the SEBI Guidelines.

Each option when exercised would be converted into one fully paid - up equity share of Rs.10/- each of the Company. The ESOP

Scheme 2010 is administered by the Remuneration Committee of the Board of Directors of the Company (“the Committee”).

Under the ESOP Scheme 2010, the Committee had granted 900,000 options to its eligible employees during the year ended

31 March 2011. During the current year Company has not granted any new options. The following share-based payment

arrangements were in existence during the reporting periods.


115




Grant Date 4 February 2011

Vesting Plan Graded vesting - between 12.5% & 25% based on continuity

& performance

Vesting Period Not earlier than one year and not later than five years from

the date of grant of the options in one or more tranches.





The movement of the options for the year ended 31 March 2012 is given below:

Particulars Stock

Options

(Number)

Range

of exercise

Prices (Rs)

Weighted Average

Exercise

Price (Rs)

Remaining

Contractual Years

Outstanding at the beginning of the year 900,000 46.30 46.30 6

Granted during the year - - - -

Forfeited during the year - - - -


Lapsed during the year 126,875 46.30 46.30 -

Outstanding at the end of the year 773,125 46.30 46.30 5

Exercisable at the end of the year 191,875 - - 2 years & 10 months

During the year total 197,344 number of Options were vested.

Fair Valuation:

At grant date, the estimated fair value of stock options granted was Rs.19.56. The fair valuation was carried out by an

independent valuer using Black & Scholes model. The various inputs and assumptions considered in the pricing model at grant

date for the stock options granted under the ESOP Scheme 2010 are as under.


Number of options granted 900,000


Risk Free interest rate (%) 7.86 - 8.00

Option Life (Years) 2.5 - 5.5



Share price at options grant date (Rs.) 46.30


116


Had the compensation cost for the stock options granted been recognised based on fair value at the date of grant in

accordance with Black & Scholes Model, the proforma amount of net profit and earnings per share of the Company would

have been as under:

Rs. Million

31 March 2012 31 March 2011

Net (Loss) / Profit attributable to Equity shareholders (1,188.54) 513.77

Less: Compensation cost under ESOP as per Fair Value 7.10 1.40

Proforma (Loss) / Profit before Tax adjustment for earlier years (1,195.64) 512.37

Weighted average number of Basic equity shares outstanding 110.00 110.00

Weighted average number of Diluted equity shares outstanding 110.88 110.14

Face Value of Equity Shares 10.00 10.00

Reported Earning per Share (EPS)

Basic EPS (in Rs.) (10.80) 4.67

Diluted EPS (in Rs.) (10.80) 4.67


Basic EPS (in Rs.) (10.87) 4.66

Diluted EPS (in Rs.) (10.87) 4.66

In Million

31 March 2012 31 March 2011

3.31 DETAILS OF HOLDING COMPANY’S FOREIGN

CURRENCY EXPOSURE

Currency F.C INR F.C INR

Unhedged Portion as on Balance Sheet Date

a) Trade Receivable US$ 0.83 42.32 1.41 62.87

b) Trade Payable US$ 81.08 4,147.82 39.81 1,777.35

Euro 15.01 1,025.47 1.75 110.57

CHF - - 0.09 4.37

c) Short-Term Finance US$ 3.26 166.68 0.25 11.31

Hedged by Forward Contracts as on Balance Sheet Date

a) Trade Payable US$ 2.20 111.54 47.35 2,179.06

Euro 1.15 79.87 14.41 847.42

b) Short Term Finance US$ - - 2.50 112.62

3.32 As the Holding Company's and its subsidiaries business activity falls within a single business segment, viz. "Iron & Steel

products", the disclosure requirements of Accounting Standard (AS-17) on "Segment Reporting", notified by the Companies

(Accounting Standards) Rules, 2006, are not applicable.

3.33 The Holding Company has incurred a net loss of Rs.1,188.54 million during the year ended 31 March 2012 and, as of that

date the Company’s current liabilities exceeded its current assets by Rs.15,111.77 million. The Company has approached the

Lenders to restructure its debt profile to convert majority of their short-term loan to long-term loan, which has already been

agreed in principle by all the banks and the approval is under process. The Company has prepared the financial statements

on the basis of going concern assumption.


117


3.34 OPERATING LEASES (IN RESPECT OF HOLDING COMPANY)

The Company has lease agreement for various premises which are in the nature of operating lease.The lease arrangement

range for a period between 3 Years to10 Years which are cancellable lease. There is no obligation for renewal of these lease

agreements and are renewable by mutual consent

Rs. Million

31 March 2012 31 March 2011

With respect to all operating leaseLease payments recognised in the statement of profit and loss during the year 4.23 9.75

3.35 DEFERRED TAX LIABILITIES (NET)

Deferred Tax Provision has been made in the accounts in accordance with the requirements of the Accounting Standard on

“Taxes on Income” (AS 22) issued by The Institute of Chartered Accountants of India. The major components of the Deferred

Tax Liabilities / (Assets) based on the tax effects of timing differences are as follows:

Rs. Million

31 March 2012 31 March 2011



859.03 784.23

Deferred Tax Assets


Unabsorbed Loss Carried Forward (375.64) -

Others (39.02) (33.40)

(858.88) (187.07)

Deferred Tax Liabilities (Net) 0.15 597.16

As a matter of prudence, deferred tax assets have been recognised only to the extent of the deferred tax liability.


118


3.36 (a) Related Party Disclosures

Nature of Relationship Name of the Related Parties

Ultimate Holding Company VISA Infrastructure Limited



VISA Cement Limited

VISA Resources India Limited (Formerly Known as VISA Comtrade Limited)

VISA Power Limited


VISA Power (Jharkand) Pvt Limited

VISA Power (Orissa) Pvt Limited

VISA Energy Ventures Limited

Key Managerial Personnel Mr. Vishambhar Saran (Chairman)

Mr. Vishal Agarwal (Managing Director)

Mr. Basudeo Prasad Modi (Deputy Managing Director upto 31 March 2012)

Mr. Prabir Ramendralal Bose (Deputy Managing Director w.e.f 1 April 2012)

Relatives of Key Managerial Personnel Mrs. Saroj Agarwal (Wife of Chairman)

Mr. Vikas Agarwal (Son of Chairman)

Mr. Ashok Agarwal (Brother of Chairman)

Enterprise over which Relatives of Key VISA Minmetal Limited

Manegerial Personnel having significant

influence

VISA Realty Limited

VISA Aviation Limited




VISA Trust


119


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120

3.37 PREVIOUS YEAR FIGURES

The Consolidated Financial statements for the year ended March 31, 2011 had been prepared as per the then applicable, pre-

revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies

Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly,

the previous year figures have also been reclassified to confirm to this year’s classification. The adoption of Revised Schedule

VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial

statements .











121

Consolidated Cash Flow Statement for the year ended 31 March 2012

Rs. Million

31 March 2012 31 March 2011

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before Tax (1,965.08) 864.68

Adjusted for :


Finance Costs 1,896.68 1,029.49


Provision for Bad & Doubtful Debts 3.45 33.53


Liabilities no longer required written back - (22.17)

Provision for Doubtful Debts / Advances written back (42.36) (23.34)

(Profit) / Loss on sale of Fixed Assets (8.25) -

Miscellaneous Expenses Written off - 24.55

Unrealised Forex Loss / (Gain) [Net] 574.98 (192.36)

Operating Profit before working capital changes 735.28 2062.19

Adjustments for :

(Increase) / Decrease in Trade and other receivables (54.64) 97.62

(Increase) / Decrease in Inventories 431.73 (569.37)

(Increase) / Decrease in Trade and other Payables 4,356.34 1,616.95


Direct Taxes paid (51.24) (153.06)

Net Cash from Operating Activities 5,417.47 3,054.34

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets / Capital Work in Progress (6,613.20) (5,187.27)

(Increase) / Decrease In Long Term Loans & Advances (0.27) (3.45)

(Increase) / Decrease in Capital Advances 121.35 167.00


Increase in Margin Money (115.75) (59.02)

Interest received 229.61 166.98

(Increase) / Decrease in Other Long Term Liabilities (10.19) -

(Increase) / Decrease in Other Non Current Assets 15.82 (22.00)

Net Cash used for Investing Activities (6,362.27) (4,937.43)


122

Consolidated Cash Flow Statement for the year ended 31 March 2012 (Contd.)

Rs. Million

31 March 2012 31 March 2011

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Long Term Borrowings 2,843.27 2,215.19

Repayment of Long Term Borrowings (1,713.38) (844.04)

Proceeds from Short Term Borrowings (Net) 1,118.23 1,166.42

Increase in Other Long Term Liabilities 341.05 -

(Increase) / Decrease in Earmarked Accounts (0.19) (0.42)

Dividend paid (110.00) (110.00)

Dividend Tax paid (17.84) (18.69)

Finance Cost paid (1,589.10) (909.44)

Interest paid - Capitalised (16.78) -

Net Cash from Financing Activities 855.24 1,499.02

Net increase / (decrease) in Cash and Cash Equivalents (89.56) (384.07)

D. CASH AND CASH EQUIVALENTS

Net (Decrease) in Cash and Cash Equivalents (89.56) (384.07)

Cash and Cash Equivalents as at 01 April 2011 395.05 779.12

Cash and Cash Equivalents as at 31 March 2012 305.47 395.05

This is the Consolidated Cash Flow Statement referred to in our Report of even date.





Prabal Sarkar Subhra Giri Manoj Kumar Digga

Partner Company Secretary Chief Financial Officer




Notes:

1. Cash and cash equivalents consist of cash on hand and balance with banks and deposits with banks.

Rs. Million

31 March 2012 31 March 2011

Balance with Banks in :




Share of Joint Venture [Refer Note 2.2] 0.03 0.42

Cash & Cash Equivalents 305.47 395.05

2. The above Consolidated Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Accounting

Standard on ‘Cash Flow Statements (AS-3)’ issued by “The Institute of Chartered Accountants of India”.

3. Previous period figures have been rearranged / regrouped wherever necessary.


123

Statement pursuant to Section 212 (3) of the Companies Act, 1956

Name of the subsidiary Ghotaringa Minerals Limited

VISA BAO Limited

1 Financial Year of the Subsidiary ended on 31 March 2012 31 March 2012

2 Shares of the subsidiary held by the Company on the above date

a Number 890,000 59,150,000

Face Value (Rs.) 10 10

b Extent of holding 89% 65%

3 Net aggregate amount of profits / (losses) of the subsidiary for the above financial year

of the subsidiary so far as they concern members of the company

a Dealt with in the accounts of the Company for the year ended 31 March 2012 (Rs.) 14,504 42,230

b Not dealt with in the accounts of the Company for the year ended 31 March 2012 (Rs.) NIL NIL

4 Net aggregate amount of profits / (losses) for previous years of the subsidiary since it

became a subsidiary so far as they concern members of the company

a Dealt with in the accounts of the Company for the year ended 31 March 2012 (Rs.) 286,801 21,130,937

b Not dealt with in the accounts of the Company for the year ended 31 March 2012 (Rs.) NIL NIL

Ghotaringa Minerals Limited (GML), a Company incorporated under the Companies Act, 1956 became subsidiary of the Company with

effect from 30 September 2005. As on 31 March 2012, 89% of the issued and subscribed equity share capital of GML was held by the

Company alongwith its nominees.

VISA BAO Limited (VBL), a Company incorporated under the Companies Act, 1956 became subsidiary of the Company with effect

from 23 May 2008. As on 31 March 2012, 65% of the issued and subscribed equity share capital of VBL was held by the Company

alongwith its nominees.

For and on behalf of the Board of Directors


Place: Kolkata Subhra Giri Manoj Kumar Digga

Date: 25 May 2012 Company Secretary Chief Financial Officer


124

Financial Statement pursuant to Section 212 (8) of the Companies Act, 1956 relating to Subsidiary Companies for the year ended on 31 March 2012

(Amount in Rs.)

Name of the Subsidiary Ghotaringa Minerals Limited

VISA BAO Limited

Financial Year Ending on 31 March 2012 31 March 2012

Share Capital 10,000,000 910,000,000

Reseves & Surplus 64,875 49,693,762

Total Assets 12,836,047 1,895,849,087

Total Liabilities 12,836,047 1,895,849,087

Details of Investment (Except in case of Subsidiaries) - -

Turnover (including Other Income) 74,670 2,770,130

Profit Before Tax 15,915 70,012

Provision for Taxation (382) 5,043

Profit after Taxation 16,297 64,969

Proposed Dividend - -



Place: Kolkata Subhra Giri Manoj Kumar Digga

Date: 25 May 2012 Company Secretary Chief Financial Officer

CORPORATE INFORMATIONBoard of DirectorsMr. Vishambhar Saran, Chairman

Mr. Maya Shanker Verma, Independent Director

Mr. Shiv Dayal Kapoor, Independent Director

Mr. Debi Prasad Bagchi, Independent Director

Mr. Pradip Kumar Khaitan, Independent Director

Mr. Shanti Narain, Independent Director

Mr. Subrato Trivedi, Non-Executive Director

Mr. Vishal Agarwal, Managing Director

Mr. Prabir Ramendralal Bose, Deputy Managing Director

Chief Financial OfficerMr. Manoj Kumar Digga

Company SecretaryMrs. Subhra Giri

AuditorsLovelock & Lewes

Internal AuditorsL. B. Jha & Co.

SolicitorsKhaitan & Co.

Bankers & Financial InstitutionsAndhra Bank

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

Corporation Bank

Dena Bank

Export Import Bank of India

HUDCO

Indian Overseas Bank

IL&FS Financial Services Limited

Oriental Bank of Commerce

Punjab National Bank

SIDBI

State Bank of India

State Bank of Hyderabad

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

Vijaya Bank

RegistrarsKarvy Computershare Private Limited

Registered OfficeBHUBANESWAR

VISA House, 11, Ekamra Kanan, Nayapalli,

Bhubaneswar - 751015.

Tel: +91 (674) 2552479,

Fax: +91 (674) 2554661

Corporate OfficeKOLKATA

VISA Steel Limited,

VISA House,

8/10 Alipore Road,

Kolkata - 700027

Tel: +91 (33) 3011 9000

Fax: +91 (33) 3011 9002

Plant OfficesKALINGANAGAR PLANT SITE

Kalinganagar Industrial Complex,

At/P.O. Jakhapura District Jajpur

Odisha 755026

Tel: +91 (6726) 242441

Fax: +91 (6726) 242442

GOLAGAON PLANT SITE

Village Golagaon, Near Duburi,

P.O. Pankapal, District Jajpur, Odisha.

Tel: +91 (6726) 245470

Fax: +91 (6726) 245561

RAIGARH PLANT SITE

8, Gajanandpuram, Kotra By-pass Road, Raigarh -

496001, Chhattisgarh

Tel: +91 (7762) 2282 80

www.visasteel.com

Forward-looking statementsIn this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and

take investment decisions. This report and other statements - written and oral – that we periodically make contain forward-

looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried

wherever possible to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’,

‘plans’, ‘believes’, and words of similar substance in connection with any discussion of future performance.

We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent

in assumptions. The achievements of results are subject to risks, uncertainties, and even inaccurate assumptions. Should

known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results

could vary materially from those anticipated, estimated, or projected. Readers should keep this in mind.

We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information,

future events or otherwise.

ContentsOverviewNext Altitude 01

About VISA Steel 12

Vision and Values 13

Strategic Goals 14

Strategy and Mission 15

Financial and Operational Performance 16

Corporate Highlights 17

Chairman’s Statement 18

Managing Director’s Review 20

Profile of the Board of Directors 22

Societal Commitment 24

Statutory ReportsReport of the Directors 26

Management Discussion and Analysis 36

Report on Corporate Governance 42

Financial StatementsStandalone 59

Consolidated 92

Subsidiary Companies 116

Next Altitude

Over the last 6 years, VISA Steel has continuously strengthened its business presence in the iron and steel industry. The financial year 2010-11 marked the completion of our first round of capacity expansions to drive its next-altitude growth. We operationally strengthened ourselves and executed the expansions projects, despite a difficult environment.

Whilst Coke and Ferro Chrome revenue stream shall remain, the pig iron and sponge iron shall be used in the production of value-added special steel, the benefits of which will be reflected in our financials from financial year 2011-12 onwards. The focus going forward shall be to start mining our own iron ore and coal so that we can move to higher operating margins.

At VISA Steel, we are at the threshold of an interesting turning point. We have already laid the foundation and are now geared for the big leap ahead. This progression is natural as we have consolidated our capabilities to accelerate our momentum; to ensure uninterrupted growth through the formulation of flexible strategies.

Having completed full integration on the manufacturing facilities, the focus is now to mine our own iron ore and coal to secure stable raw material supplies and lower costs.

Resource Integration

Annual Report 2010 -11

OverviewStatutory Reports

Financial Statements

We have a 54 million tonne share of a coal block in

Patrapada at Talcher which is under development. We are

also on the verge of getting iron ore mines in Orissa and

Chhattisgarh. We have completed prospecting work for a

Chrome Ore mine and are in the process of developing the

same. We are further exploring opportunities to acquire

coal mines in Australia and Indonesia. The consolidated

affect of mining our own iron ore and coal shall lead to

strengthening our operating margins from current levels of

15-20% to 30-35% in the near future.

02

03

0.5 million TPA to 1 million TPA Special SteelWith the strong economic growth potential in India and demand for steel being driven by the infrastructure, automobile and capital goods sector, we have drawn up strategies to deliver volume growth in value added steel products.


The Kalinganagar facility has an infrastructure capability

of 1 million TPA Special Steel. With 0.5 million TPA now

operational, we plan to scale it up to 1 million TPA over

the next three to five years. This will provide us with

economies of scale. We have the experience in execution,

equipment sourcing & technology and the infrastructure

to witness another wave of expansion which would be

implemented in phases going forward.

04

05



50,000 TPA to 200,000 TPAFerro ChromeThe expansion at our ferro chrome facility will enhance our capabilities, strengthen our brand and help us attain leadership in this business segment.


The construction work of the ferro chrome plant at

Kalinganagar through VISA BAO is progressing with

sustained momentum. The cumulative capacity would

be ramped up from 50,000 TPA to eventually 200,000

TPA. Whilst 50,000 TPA is already in operation, additional

100,000 TPA is being implemented through VISA BAO, our

joint venture with Baosteel, China. This would make VISA

among the leading player in the Ferro Chrome industry.

06

07



75 MW to 375 MW PowerEnergy is one of the key cost components in Steel and Ferro Alloy Operations. The low cost and uninterrupted availability of power is critical to facilitate operations, reduce external dependence and optimise costs. In short, we will enhance energy efficiency.


We have successfully completed the setting up additional

25 MW power plant at Kalinganagar, thus taking the

current capacities to 75 MW. We are planning additional

2x150 MW capacities which will benefit us in two ways:

1. It will enable us monetise value of our Coal block at

Patrapada in Talcher, Orissa.

2. It will help us meet our power shortfall for the

current operations and enhanced requirement from

our expanded capacities.

08

09



Human CapitalSustained business progression must involve human innovativeness and ownership. We believe an organization is only as good or as efficient as the team that drives it. The implementation of ESOP Scheme shall further drive ownership among the employees.


At VISA Steel, we are focusing on building a strong and

passionate team of individuals, and creating an enabling working

environment to accelerate operations. We have introduced ESOP

for our employees, not popular in a steel industry. VISA Steel is

one of the early movers in this sphere and plans to unveil a host

of HR measures to create an inspired workforce. The HR initiatives

are expected to motivate team members, drive retention and

attract new talent.

10

11



About VISA Steel

Part of the Rs. 5,000 Crore VISA Group.

Registered office in Bhubaneswar, Corporate Office in Kolkata and manufacturing

facilities at Kalinganagar and Golagaon in Orissa and Raigarh in Chhattisgarh.


Current Operations at Kalinganagar, Orissa

Facility CapacityCoke Oven Plant 400,000 TPA

Ferro Chrome Plant 50,000 TPA

Pig Iron Plant 225,000 TPA

Sponge Iron Plant 300,000 TPA

Power Plant 75 MW

Steel Melt Shop 500,000 TPA

Bar & Wire Rod Mill 500,000 TPA

Projects Under Implementation in Orissa VISA BAO –100,000 TPA Ferro Chrome Plant in Orissa, in joint venture with Baosteel.

Projects Under Planning in Orissa & Chhattisgarh Expansion of Special Steel to 1 million TPA & Power generation to 375 MW at Kalinganagar in Orissa.

1 million TPA Steel Plant and 300 MW Power Plant at Raigarh in Chhattisgarh.


VisionEmerge as a low cost producer of value added steel products with captive mineral resources and power

ValuesTransparency – We are transparent and honest in our profession to all our stakeholders

Team Work – We work together as a team to benefit from our complementary strengths

Passion – We are passionately committed to delivering excellence in performance

Governance – We are committed to best standards of safety, corporate social responsibility and corporate governance.

Attitude – We demonstrate ownership in our attitude to create sustainable value for shareholders

12

13



Strategic Goals

Integrate across value chain with captive mines and power.

Leadership in business segment through market share.



Build partnerships with customers and suppliers.


Strategy and Mission

Integrate across value chain with captive mines and powerSecuring mining leases for key raw materials – iron ore, coal, chrome ore & coking coal.



Leadership in business segment through market share Understand the steel market, identify products with demand growth and set market share goals.


Maximize shareholder value by Market Cap and ROCEEnsure capital allocation for growth to generate better ROCE and Market Cap than industry peers.


Build partnerships with customers and suppliersBe preferred supplier through competitive pricing and high standards of quality and service.


Family of capable, motivated and happy employeesRecruit effectively.




14

15



Financial and Operational Performance

SALES TURNOVER, EBITDA AND PAT

Operational Highlights FY’11 FY’10Coke (in MT) 340,339 353,601

Ferro Chrome (in MT) 44,372 47,649

Hot Metal (in MT) 46,233 150,424

Sponge Iron (in MT) 134,538 139,299

Power (in Mn Units) 226 223

Turnover (Rs. million) EBITDA (Rs. million) PAT (Rs. million)

CAGR

32%

FY’05 FY’11

13,329

2,520

CAGR

58%

FY’05 FY’11

2,056

131

CAGR

41%

FY’05 FY’11

514

66

Financial Highlights (Rs. million) FY’11 FY’10 GrowthRevenue 13,329 11,715 13.8%

EBITDA 2,056 1,976 4.0%

EBITDA Margin 15.4% 16.9% (1.5)%

PAT 514 474 8.4%

Net Margin 3.9% 4.0% (0.1)%

Cash Profit 1,189 1,256 (5.3)%

Share Capital 1,100 1,100 0.0%

Net Worth 4,130 3,423 20.7%


Revenue crossed Rs. 13,329 million

EBIDTA at Rs. 2,056 million

Profit after tax at Rs. 514 million

Completed the 3rd 25 MW Power Generation Facility

Completed the 500,000 TPA Special Steel Plant

The Company’s subsidiary, VISA BAO Limited, made significant progress towards setting

up a 100,000 TPA Ferro Chrome Plant

Introduced ESOP Scheme

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CORPORATE HIGHLIGHTS



Chairman’s Statement

Dear Shareholders,

VISA Steel shall continue to create value and deliver sustainable growth while achieving best standards of safety, corporate governance, corporate social responsibility and investor communication.

The global economy has continued to witness a sustained

growth due to growth in emerging economies led by

China and India and also due to the additional stimulus

in US and bail out packages in Europe. However, this

had resulted in inflationary pressures which have forced

many Central Banks, especially in China and India to raise

interest rates.

Inspite of the volatile and challenging environment on

raw material availability and pricing, the Company has

delivered healthy growth in performance. We will build

on our consistent and well executed strategy to grow in

the value added steel products, while being focused on

allocation of captive mines for raw materials and captive

power generation.

VISA Steel has since completed the Special Steel project.

Consequently the revenues from LAM Coke and Ferro

Chrome shall continue, but the Pig Iron and Sponge

Iron shall get covered into value added Special Steel

long products. This will be a key driver of revenues and

margins going forward.

VISA Steel shall continue to create value and deliver

sustainable growth while achieving best standards

of safety, corporate governance, corporate social

responsibility and investor communication.

Annual ResultsFor the year ended 31 March 2011, the Company

recorded a revenue growth of 14% to Rs. 13,329 million

from Rs. 11,715 million in the previous year and the

EBIDTA increased to Rs. 2,056 million from Rs. 1,976

million in the financial year 2009-10. The PAT also surged

to Rs. 514 million from Rs. 474 million during financial

year 2009-10.

The growth in revenues has been driven by improved

price realizations from Coke, Ferro Chrome, Pig Iron and

Sponge Iron inspite of lower sales volumes for Pig Iron.

The Company achieved satisfactory production volumes

inspite of pressure on smooth availability of raw material.

The IndustryThe Global Steel market is being driven by emerging

economies with increasing importance of China and

India. China now accounts for 630 million tones or 45%

of the Global Steel production of 1.4 billion tones in 2010.


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India is poised to be a dominant player in the Global Steel

industry with a strong growth in its economy. Demand for

steel products is being driven primarily by infrastructure

and consumption led sectors including construction,

automobile, white goods and oil & gas.

India remains a large exporter of iron ore and importer

of steel. During the year, a 20% export tax on iron ore

has been imposed to discourage exports of this primary

raw material and encourage value addition of this

natural resource within the country. This has been an

encouraging step and should enhance capacity addition

for steel making within the Country to meet the supply

constraints.

However, Coking Coal still continues to be a challenge

for the Steel industry in India. Due to the volatile global

environment, there has been a shift in pricing mechanism

of coking coal from annual to quarterly to monthly

benchmark prices.

There is a huge growth potential in Steel consumption

in India given that per capita steel consumption is very

low compared to China and the global average. The

States of Orissa, Chhattisgarh & Jharkhand which account

for majority of the iron ore and coal reserves are most

attractive locations for setting up steel plants and we are

focused on creating high quality assets in these locations.

Vision & StrategyThe Company is focused on its vision to emerge as a low

cost producer of value added Steel products with captive

mineral resources and captive power.

Having completed the full integration on the

manufacturing facilities, the Company is now focused

on mining its own iron ore and coal in order to improve

margins. Since the Company has already qualified all

the required criteria, it is confident of securing a captive

Iron Ore mining lease in Orissa and Chhattisgarh in the

very near future. The Patrapada Coal block wherein the

Company has a share of 54 million tonnes is currently

under development. The prospecting work for the

Chrome Ore deposit has also been completed by

Ghotaringa Minerals Limited.

The Company plans to expand the special steel

production in Orissa from 0.5 million to 1 million TPA and

power generation from 75 MW to 375 MW over the next

few years. The Company also plans to start works on its

2.5 million TPA Steel Plant in Chhattisgarh by setting up

a 1 million TPA Steel Plant and 300 MW Captive Power

Plant in the first phase.

VISA Steel and Baosteel Resources have made full

equity contribution in VISA BAO Limited, for setting up

an Integrated Ferro Chrome Complex in Orissa and the

project is in advanced stage of construction.

OutlookOur revenues and profitability are expected to improve

with the completion of our Special Steel Plant. We shall

maintain our growth trajectory in the coming years and

endeavour to become a leader in value added Steel

products to create value for our shareholders and deliver

sustainable growth for the nation.

I would like to place on record my sincere appreciation

and thank the entire team of VISA Steel for their

relentless commitment and passion to transform the

Company’s vision into a vibrant reality. I am also grateful

to the members of the Board of the Company for their

invaluable guidance and contribution. I would also like

to express my sincere thanks to all the stakeholders for

their confidence and faith and to all the Government,

Regulatory Authorities & Banks for their valued support

Warm Regards,

Vishambhar Saran



Managing Director’s Review

The financial year 2010-11 was a year of healthy growth

at VISA Steel. We have created a strong foundation

by creating a fully integrated Steel Complex with

infrastructure ready for driving the next level of growth.

The increase in price realisations across Coke, Ferro

Chrome, Pig Iron and Sponge Iron has enabled the

Company to register a healthy growth in sales revenue,

despite lower production and sales volumes of Pig Iron.

We had stable margins inspite of higher raw material

costs (coking coal, iron ore and chrome ore). We

completed the Special Steel Project and also

introduced an ESOP Scheme. We shall continue to

focus towards high quality of growth and maximization

of shareholder value.

Stable Operations During the financial year 2010-11, we registered

satisfactory production volumes despite pressure on

smooth availability of raw material.

LAM Coke production was 340,339 MT in 2010-11

compared to 353,601 MT in 2009-10;

Ferro Chrome production was 44,372 MT in 2010-11


Hot Metal production was 46,233 MT in 2010-11

compared to 150,424 MT in 2009-10 due to closure of

OMC’s Daitari Mines;

Sponge Iron production was 134,538 MT in 2010-11


Power generation was 226 million units in 2010-11

compared to 223 million units in 2009-10.

Completion of Special Steel PlantThe 0.5 million TPA Special Steel Plant and an additional

25 MW Power Plant has been completed. This will be a

key driver of revenues and margins going forward.

Raw Material and Mining LeasesThe Company sources its vital raw materials such as iron ore and chrome ore from the Orissa Mining Corporation, whereas coking coal is imported from Australia under a long-term contract with BHP Billiton. It has also signed a Fuel Supply Agreement with Mahanadi Coalfields Limited for the supply of steam coal.

The focus is now to backward integrate into mining of iron ore, chrome ore and coal as quickly as possible in order to reduce raw material costs and improve margins.


The focus is now to backward integrate into mining of

iron ore, chrome ore and coal as quickly as possible in

order to reduce raw material costs and improve margins.

Sales Realisation and Product MixThe Coke and Ferro Chrome business have performed

well. Due to tight availability of Coking Coal due to floods

in Australia and Export Taxes of Coke from China, Coke

prices have been firm. Due to power shortages in South

Africa and growth in Stainless Steel industry in China, the

Ferro Chrome prices have also been firm.

Progress of New ProjectsThe Ferro Chrome plant in Orissa, in joint venture with

Baosteel, China, is in advanced stages of construction.

The Company has acquired 280 acres for its steel making

and power generation facilities at Raigarh in Chhattisgarh

and has been granted Environmental Clearance.

Efforts to Improve Risk Management and Control SystemsThe Company continues to monitor its Foreign Exchange

exposure very closely. Besides, the Company’s SAP-

enabled operations and stringent internal audit integrated

operations, enhanced transparency and accelerated

decision-making.

Human Resource InitiativeThe Company has implemented an ESOP Scheme and

is among the few companies in the Steel Sector to offer

such a Scheme. The value of stock options will continue

to grow as we create value for the Company in the years

to come and hope that employees with high level of

commitment, passion and ownership will benefit from

the same.

We continue to invest in recruiting young engineers and

CA/MBA professionals with passion through Campus.

They are trained and nurtured to enhance their technical

and managerial skills at our Learning Centre and on-

the-job training at the shop floor. The Company has a

transparent performance appraisal system for increments

and promotions. We improve our team building and

encourage family bonding through our annual social

activities calendar.

Corporate ConscienceWe acknowledge the roles and responsibilities of

a corporate citizen. In line with our core business

philosophy, concern for Health, Safety and Environment

continue to be one of our key priorities. We have installed

better safety devices at critical locations under proper

supervisions in order to achieve high safety standards.

We continue to direct our community development

initiatives in the states of Orissa and Chhattisgarh in the

areas of education, healthcare, rural development, sports

and culture.

I would like to take this opportunity to express my sincere

gratitude to our team for their commitment, dedication

and hard work, which has been our primary engine for

growth.

Warm Regards,

Vishal Agarwal

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Profile of the Board of Directors

Vishambhar Saran,Chairman

Mr. Saran has experience of almost 42 years in the

iron & steel industry, with over 25 years with Tata Steel

in the areas of development & operations of mines,

mineral beneficiation plants and ferro alloy plants, port

operations and international trading of raw materials for

the iron & steel industry. A mining engineer from BHU,

he rose to the level of Director (Raw Materials) in Tata

Steel before taking over as Chairman of the VISA Group

in 1994. In a short span of time, he built the VISA Group

into a minerals and metals conglomerate with a strong

global presence in Australia, China, India, Indonesia,

Singapore, South Africa and Switzerland. He is the

Honorary Consul of Bulgaria for Eastern India.

Shiv Dayal Kapoor,Chairman, Audit Committee

Mr. Kapoor has over 42 years of rich experience in the minerals

and metals industry. He is the former Chairman of MMTC Limited

and Neelachal Ispat Nigam Ltd. and had been on the Board of

many renowned Public Sector Enterprises. A B.Sc. in Metallurgical

Engineering from BHU and an MBA from the University of Leeds,

UK, he is a recipient of the Best Chief Executive Gold Award – Rajiv

Ratna National Award 2005 and Top CEO of the year Award 2000 –

Indian Institute of Marketing & Management, amongst others.

Maya Shanker Verma, Chairman, Finance & Banking Committee

Mr. Verma is a career banker with a multilevel and wide

ranging experience of over 50 years, encompassing

an understanding of the commercial, developmental

and investment banking as well as asset management

and capital market operations. A Master of Arts and

Certified Associate of the Indian Institute of Bankers, Mr.

Verma held senior-most and critical positions in India’s

financial system and regulatory regimes like Chairman,

State Bank of India, IDBI Bank and Telecom Regulatory

Authority of India.

Debi Prasad Bagchi,Chairman, Selection Committee

Mr. Bagchi brings to the Board his deep knowledge of the

administrative services and the State of Orissa, especially in

the steel & mining sector. He has held prestigious positions of

authority like Additional Secretary, Commerce – Government of

India; Secretary, Ministry of Small Scale Industry – Government

of India; Chief Secretary – Government of Orissa, etc. A Master

of Arts in Economics and an M. Phil in Public Administration,

Mr. Bagchi was also the Chairman-cum-Managing Director of

Orissa Lift Irrigation Corporation and Managing Director of Orissa

Mining Corporation Limited.

Pradip Kumar Khaitan,Chairman, Remuneration Committee

Mr. Khaitan is a legal luminary and has extensive

experience in the fields of commercial & corporate laws,

tax laws, arbitration, foreign collaborations, mergers

& acquisitions and corporate restructuring. Mr. Khaitan is

a Bachelor of Commerce, an LLB and an Attorney-at-Law

(Bells Chamber, Gold Medalist). He is the Senior Partner of

Khaitan & Co., a leading Indian law firm and also member

of the Bar Council of India, the Bar Council of West Bengal

and the Indian Council of Arbitration.

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Vishal Agarwal,Managing Director

Mr. Agarwal has over 14 years experience in the iron &

steel industry with hands on experience of setting up

Greenfield projects, having successfully established the

plants at Golagaon and Kalinganagar. He is responsible

for overall management of operations and projects and is

the driving force behind many of the Company’s strategy,

finance, marketing and human resource initiatives.

He holds a Bachelors degree in Economics from the

London School of Economics and a Masters degree in

Economics for Development from Oxford University. He is

a Committee Member of the CII - Eastern Region Council.

Shanti Narain,Chairman, Share Transfer & Investor Grievance Committee

Mr. Narain brings with him his expertise in strategic

management transport systems, especially the Railways,

in the areas of planning, marketing, monitoring and control

of operations & commercial activities and development

of transport infrastructure. He holds a Masters degree

in Science (Mathematics) and had been the Member,

(Traffic) Railway Board for 4 years till February 2001. He is a

member of several committees set up by the Government

of India and professional societies.

Vikas Agarwal,Director

Mr. Agarwal is responsible for developing and nurturing the

global coal and coke business of the VISA Group and has

been instrumental in securing investments in the Group’s

coal mining ventures in Australia and Indonesia. He holds a

Masters degree in Manufacturing Engineering from Trinity

College, Cambridge University and is currently the Managing

Director of VISA Power Limited.

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Basudeo Prasad Modi,Deputy Managing Director

Mr. Modi is a Mechanical Engineer from the National

Institute of Technology, a Post Graduate Diploma holder

in Industrial Engineering and an MBA from the Institute

of Business Management, Madras. He has several

decades of rich experience in the field of Design, Project

Management and Operation. He has worked at Bokaro

Steel Plant, Bhilai Steel Plant, MECON and was the

former Managing Director of Neelachal Ispat Nigam Ltd.,

Kalinganagar.

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Saroj Agarwal,Director

Mrs. Agarwal laid the foundation of the VISA Group

during the mid-eighties. She guides the organisation

along its growth chart, while upholding its values and

spirit. A Bachelor of Arts from BHU, she takes an active

interest in philanthropic activities and contributes to

the community through the VISA Trust where she is a

trustee. She is currently the Managing Director of VISA

International Limited and VISA Infrastructure Limited.

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EducationAt VISA Steel, we truly believe in igniting young minds and in shaping the future of young

India. In our endeavours to further the cause of education we have taken the following steps:

Established two premier educational institutions in Kolkata - The Heritage School and The

Heritage Institute of Technology, through the Kalyan Bharti Trust.

Introduced scholarship opportunities for brilliant and needy students.

Offered scholarships to needy girl students at the Smt. Sarala Devi Saraswati Balika Inter

College in the Tilhar district of Shahjahanpur, Uttar Pradesh.

Provided facilities such as laboratories and science labs to enhance computer literacy at

the Smt. Sarala Devi Saraswati Balika Inter College in the Tilhar district of Shahjahanpur,

Uttar Pradesh.

Planning to set up world-class, professionally managed primary and secondary schools in

Bhubaneswar and Raipur, with facilities for extracurricular activities and sports.

Societal Commitment

VISA Steel has always believed in creation of wealth for all its stakeholders. As a responsible corporate, VISA Steel is focused on the happiness of people living in its larger neighbouring communities.

We are also committed to the best industry standards in Health, Safety and Environment. The best safety equipment has been deployed at the critical locations and constant supervision is also done to maintain the highest safety standards.

VISA Steel’s CSR team works towards improving the living conditions of the underprivileged and makes a positive difference in their lives. A number of focused initiatives have been implemented particularly in the remote areas of Orissa and Chhattisgarh. Over the years, VISA Steel has directed its community development in the areas of education, healthcare, rural development, sports & culture.


HealthcareHealthcare has been identified as a primary objective in the community development

programmes. The following healthcare initiatives are undertaken on a regular basis:

Medical camps in the backward areas of Orissa and Chhattisgarh.

Contributed to the construction of a blood bank in Jajpur, Orissa.

Engaged in raising awareness on treatment of common diseases and hygiene and providing

free medicines and medical facilities.

Rural Development

Installed bore-wells for providing clean drinking water in the backward areas.

Provided employment according to the rehabilitation policy of the Government.

Contributed towards renovation of the Biraja temple in Jajpur, Orissa.

Participated in international forums for mentally and physically challenged persons by way of

financial sponsorship.

Sports & Culture

Sponsored and organised an annual ladies golf tournament at the Tollygunge Club in Kolkata.

Actively helped in promoting contemporary Indian art through exhibitions.

Organised painting competitions to promote talented young artists.

Sponsored sporting activities, particularly cricket tournaments in Kotmar and Patrapalli

Villages in Chhattisgarh.

Safety & Environment

Strong team of medical personnel.

Implements regular safety training sessions for employees and contract labour.

Posters displaying the incorporation of safety measures.

Launched water harvesting initiatives to protect ground water levels.

Introduced plantation drive to improve greenery in industrial region.

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Dear Shareholders,Your Directors are pleased to present this Fifteenth Annual Report together with the Audited Statement of Accounts


Financial Results(Rs. Million)

Particulars 2010-11 2009-10Net Revenue 13,059.01 11,569.42


Total Income 13,328.79 11,714.83

Profit before interest, depreciation & tax 2,055.98 1,976.36

Interest (Net) 709.38 651.40


Profit before Taxation 864.55 856.78

Taxation - Current 182.61 96.00

- MAT Credit Entitlement (127.74) -

- Deferred 295.91 286.62

Profit after Tax 513.77 474.16

Appropriation - Proposed Dividend 110.00 110.00

- Corporate Tax on Dividend 17.84 18.69

Balance Carried to Balance Sheet 696.03 310.10

Report of the DirectorsOverview

Statutory ReportsFinancial Statem

ents

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The Company has achieved completion of 0.5 million TPA Special Steel Plant and 3rd 25 MW Power Plant taking the power generation to 75 MW. This will further boost the Company’s growth in revenues and margins.

OperationsThe Company is engaged in the business of manufacturing value added products from coal and minerals into LAM Coke, High Carbon Ferro Chrome, Pig Iron, Sponge Iron (DRI) and Special Steel (Long products). In addition, the Company generates Captive Power. During the year under review, production volumes across all Units have been stable and higher price realisation across various products has enabled the Company to register a robust growth in sales revenue. The operating margins of the Company have been stable inspite of higher cost of raw materials such as Coking Coal, Iron Ore, Chrome Ore and Thermal Coal. We continue to drive our cost competitiveness through efficient raw material procurement and captive power generation.

The Company has registered a revenue growth of 14%

to Rs. 13,328.79 million in the FY’2010-11 compared to

Rs. 11,714.83 million during the FY’ 2009-10. The

operating margins decreased to 15% at Rs. 2,055.98

million in the FY’2010-11 versus 17% at Rs. 1,976.36

million in the previous year. The PBT was Rs. 864.55

million for the FY’2010-11 as against Rs. 856.78 million

and PAT was Rs. 513.77 million as against Rs. 474.16million for the corresponding period.

During the year under review, the Company achieved satisfactory production volumes despite pressure on smooth availability of raw materials. The production of Coke was 340,339 MT compared to 353,601 MT in the previous year. The production of High Carbon Ferro Chrome was slightly lower at 44,372 MT compared to 47,649 MT during the previous year. The production of Pig Iron was 46,233 MT compared to 150,424 MT in the previous year mainly due to non-availability of raw materials owing to closure of OMC’s Daitari mines. The production of Sponge Iron was 134,538 MT compared to 139,299 MT in the previous year. The captive power generated during the year was 226 million units as against 223 million units in the previous year.

The Company has achieved completion of 0.5 million TPA Special Steel Plant and 3rd 25 MW Power Plant taking the power generation to 75 MW. This will further boost the Company’s growth in revenues and margins.

The Company has decided to set up an Iron Ore Sinter Plant in order to hedge the iron ore procurement as it is currently buying only sized iron ore. This would also ensure continuous smooth running of the Blast Furnace. The Company plans to set up additional Captive Power generation facilities to meet the shortfall in captive power generation vis-à-vis requirements including requirement of its subsidiary VISA BAO Ltd and a Lime Kiln Plant to ensure smooth running of Steel Melt Shop.

The Company has charted a vision for expanding the existing facility at Kalinganagar in Orissa from 0.5 million TPA to 1 million TPA Steel Plant and Power Plant from 75 MW to 375 MW and set up greenfield facility of 1 million TPA Steel Plant and 300 MW Power Plant at Raigarh in Chhattisgarh. The plan is to raise the total Steel production of the Company to 2 million TPA and power generation to 675 MW over the next few years and provide the foundation to maintain high quality growth and enhance value creation for its shareholders.

During the year, the Company has also signed a Memorandum of Understanding (MoU) with the Madhya Pradesh Trade & Investment Facilitation Corporation Ltd. (TRIFAC), a wholly owned undertaking of Government of Madhya Pradesh, for setting up a 1.25 million TPA Integrated Steel Plant with 300 MW Captive Power Plant and 100,000 TPA Manganese Alloy Plant,

with a total investment of Rs. 4,025 Crores.

The Company’s subsidiary – VISA BAO Limited, is setting up a 100,000 TPA Ferro Chrome Plant with 4 Submerged Arc Furnaces of 16.5 MVA each at Kalinganagar in Orissa. The Company has made significant progress towards implementation of the project.

A detailed analysis of the Company’s operations, segment-wise performance, project review, risk management, strategic initiatives and financial review & analysis, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is presented under a separate section titled “Management Discussion & Analysis Report” forming part of the Annual Report.


DividendYour Directors recommend a dividend of 10% for the

year ended 31 March 2011, i.e., Rs. 1 per Equity Share in respect of 110,000,000 fully paid up Equity Shares

of Rs. 10 each. The total outlay on account of dividend

payment will be Rs. 110 million excluding Rs. 17.84million on account of dividend distribution tax.

Holding CompanyConsequent to the inter-se transfer of shareholding

between the Promoter Group companies (from VISA

Minmetal AG, Switzerland to VISA Infrastructure

Limited, India), VISA Infrastructure Limited has become

the holding company with effect from 30 April 2010.

The shareholding of VISA Infrastructure Limited in the

Company is 57,612,167 equity shares of Rs. 10/- each

equivalent to 52.37% as on 31 March 2011.

SubsidiariesThe Company has two subsidiaries namely, VISA BAO

Limited and Ghotaringa Minerals Limited:

(i) VISA BAO Limited (VBL) is a Joint Venture between

the Company and Baosteel Resources Co. Ltd.,

China. VBL is setting up a 100,000 TPA Ferro

Chrome Plant in Orissa.

(ii) Ghotaringa Minerals Limited (GML) has been

incorporated to give effect to the joint venture

agreement between the Company and Orissa

Industries Limited (ORIND) for carrying out the

business of mining of chrome ore and/or other

minerals. GML has completed prospecting work

over an area allotted to ORIND in Dhenkanal, Orissa.

The Company’s investment in GML will enable the

Company to directly procure chrome ore, mined by

GML, for its Chrome Ore Beneficiation Plant, Chrome

Ore Grinding Plant and the Ferro Chrome Plant which

shall reduce raw material costs significantly.

The Audited Statement of Accounts of VBL and GML for

the year ended 31 March 2011 are attached as required

under Section 212 of the Companies Act, 1956.

Promoter Group CompaniesThe names of Promoters and Companies comprising

the “Group” as defined in the Monopolies and

Restrictive Trade Practices Act, 1969, have been

disclosed in the Annual Report for the purpose of Regulation 3(1)(e) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

DirectorsDuring the period under Report, Mr. Arvind Pande, Non-Executive & Independent Director retired from the Board of Directors of the Company with effect from 17 August 2010 and Mr. Vivek Agarwal, Non-Executive Director tendered his resignation with effect from 28 January 2011.

The Board places on record its appreciation for the valuable contribution made by them during their tenure.

At the meeting held on 29 October 2010, the Board of Directors had approved the re-appointment of Mr. Vishambhar Saran as Whole-time Director, designated as Chairman for a period of 3 years with effect from 15 December 2010, pursuant to the provisions of Sections 198, 269, 309, Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956. Mr. Saran’s re-appointment is subject to the approval of the Members and the said re-appointment together with the remuneration and terms & conditions are proposed in the Notice for the forthcoming Annual General Meeting for your approval.

At the meeting held on 4 February 2011, the Board of Directors had approved re-appointment of Mr. Basudeo Prasad Modi as Deputy Managing Director for a period of 1 year with effect from 1 April 2011, pursuant to the provisions of Sections 198, 269, 309, 316, Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956. Mr. Modi’s re-appointment is subject to the approval of the Members and the said re-appointment together with the remuneration and terms & conditions are proposed in the Notice for the forthcoming Annual General Meeting for your approval.

At the meeting held on 30 May 2011, the Board of Directors had approved re-appointment of Mr. Vishal Agarwal as Managing Director for a period of 3 years with effect from 25 June 2011, pursuant to the provisions of Sections 198, 269, 309, Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956. Mr. Agarwal’s re-appointment is subject to the approval of the Members and the said re-appointment together with the remuneration and terms & conditions are proposed in the Notice for the forthcoming Annual General Meeting for your approval.


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In accordance with the Article 157 and 158 of the Articles of Association of the Company, Mr. Vikas Agarwal, Mr. Shanti Narain and Mr. Pradip Kumar Khaitan, Directors, are liable to retire by rotation, at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Brief resume` of the above Directors, nature of their expertise in their specific functional areas, details of directorships in other companies and the chairmanship/ membership of Committees of the Board, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges are given in the Notice for the forthcoming Annual General Meeting.

Directors’ Responsibility StatementIn terms of the provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors state:

a. That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 and for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. That the Directors had prepared the annual accounts on a going concern basis.

The Company’s internal auditors, M/s. L.B. Jha & Co., Chartered Accountants, have conducted periodic audits to provide reasonable assurance that established policies and procedures are being followed.

CEO / CFO Certification A Certificate from the Managing Director and the Chief Financial Officer, pursuant to Clause 49(V) of the Listing Agreement had been tabled at the Board Meeting held on 30 May 2011 and is also annexed to this Report.

Auditors and Auditors’ ReportThe Auditors of the Company, M/s. Lovelock & Lewes, Chartered Accountants, Kolkata, retire at the conclusion of the ensuing Annual General Meeting and have confirmed eligibility and willingness to accept the office of Auditors, if approved.

The Auditors’ qualification under Paragraph 4 of their report read along with the notes to Item no.7 of Schedule 16 is self explanatory and does not require any further comments from the Directors.

As regards utilisation of short term funds for long term purposes as specified in para 17 of the Annexure to the Auditors’ Report, your Directors wish to submit that the Company was in the stage of implementation of the project. Since the Company has completed the project work, this will be regularised with the operation of the Company.

Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo Information pursuant to Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 in respect of Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgo is given in Annexure I forming part of this Report.

Human Resources The Company places significant emphasis on recruitment, training & development of human resources, which assumes utmost significance in achievement of corporate objectives. The Company integrates employee growth with organisational growth in a seamless manner through empowerment and by offering a challenging workplace aimed towards realisation of organisational goals. To this effect, your Company has a training centre at its Plant for knowledge-sharing and imparting need based training to its employees. The Company has also incorporated Performance Management System in SAP for performance appraisal of the employees. To ensure accommodation, hospitality and other facilities for its employees, the Company has set up a modern guest house at Kalinganagar.

The information required under Section 217 (2A) of the Companies Act, 1956 read with the Companies


(Particulars of Employees) Rules, 1975, as amended, and the Companies (Particulars of Employees) Amendment Rules, 2011 are set out in Annexure II to this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 read with Clause 32 of the Listing Agreement, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining a copy of the statement may write to the Company.

Employees Stock OptionThe Company has rescinded its Employee Stock Option Scheme 2008 under which no Options had been granted and implemented a new ESOP Scheme titled Employee Stock Option Scheme 2010 (ESOP Scheme 2010), for permanent employees including any Director, whether whole-time or otherwise, of the Company, its subsidiaries and the Holding Company to be administered by the Remuneration Committee of the Board of Directors of your Company. ESOP Scheme 2010 will provide an incentive to attract, retain and reward the employees and enable them to participate in future growth and financial success of the Company. Each option confers a right upon the employee to apply for one equity share of the Company.

During the year under report, 900,000 Stock Options were granted to the specified employees of the Company and its subsidiary, VISA BAO Limited under the ESOP Scheme 2010. As on 31 March 2011, none of the Options have been vested. The shares covered by such Options are 900,000.

The Company has received a certificate from the Auditors of the Company that the ESOP Scheme 2010 was implemented in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the resolution passed at the Annual General Meeting held on 17 August 2010. The Certificate would be placed at the forthcoming Annual General Meeting for inspection by the Members.

As required by Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 information with respect to active Stock Options as on 31 March 2011 is given in a separate statement as Annexure III forming part of this Report.

Fixed DepositsThe Company has not accepted or renewed any fixed deposits under Section 58A of the Companies Act, 1956.

Consolidated Financial StatementsIn terms of Clause 32 of the Listing Agreement with Stock Exchanges, Consolidated Financial Statements, conforming to Accounting Standard 21 issued by the Institute of Chartered Accountants of India, are attached as a part of the Annual Report.

Corporate Governance The Company is committed in maintaining the highest standards of Corporate Governance and adheres to the stipulations prescribed under Clause 49 of the Listing Agreement with the Stock Exchanges. A Report on Corporate Governance & Shareholder Information together with the Auditors’ Certificate thereon is annexed as part of the Annual Report.

The Company had also adopted a “Code of Conduct” for its Directors and Senior Management, as required under Clause 49 of the Listing Agreement and all Directors and Senior Managers have affirmed compliance with the Code for 2010-11. A certificate, signed by the Managing Director, affirming compliance of Directors & Senior Management, forms part of the Report on Corporate Governance.

AcknowledgementYour Directors record their sincere appreciation for the assistance, support and guidance provided by banks, financial institutions, customers, suppliers, regulatory & government authorities, project & other business associates and stakeholders. The Directors also commend the continuing commitment and dedication of the employees at all levels which has been critical for the Company’s growth. The Directors look forward to their continued support in future.

Your Directors value your involvement as shareholders and look forward to your continuing support.


Kolkata Vishambhar Saran

30 May 2011 Chairman


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Annexure I to the Report of the DirectorsStatement of particulars required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988

A. Conservation of Energy


1. CFBC of 160t/hr capacity boiler has been commissioned for utilising the waste char & coal fines generated from Sponge Iron Plant.

2. Reduction of Coke burning loss in Coke Oven.

3. Reduction in air ingress in flue gas at Coke Oven resulting in higher steam temperature and lower specific consumption of steam per unit power generation.

4. Manganese ore consumption in Blast Furnace has been stopped & use of magnesite in Ferro Chrome Plant has been stopped.

5. Zero discharge of waste water.

(b) Additional Investment and Proposals, if any, being implemented for reduction of consumption of energy:

1. Coke pusher car track is being repaired for smooth operation of Coke Oven Plant.

2. Coke pusher no. 2 will be renovated to improve machine availability.

3. Additional magnetic separator is being installed in DRI to recover magnetic particles going into oversize.

(c) Impact of Measures in (a) and (b) above have resulted in:

1. Saving in electrical energy and higher power generation.


3. Effective utilisation of solid waste like char and coal fines.

(d) Total Energy Consumption and Energy Consumption per Unit of Production (as per Form “A” below)

FORM A

2010-11 2009-10A. Power & Fuel Consumption

1. Electricity(a) Purchased

Unit (Kwh) 19,306,510 35,501,800Total Amount - (Rs. Million) 90.25 131.97Rate / unit - (Rs.) 4.67 3.72

(b) Own Generation(i) Through Diesel Generator

Unit (Kwh) 2,816 3,475Units per ltr. of diesel oil (Kwh) 2.82 2.80Cost/unit – (Rs.) 14.00 13.92

(ii) Through Steam Turbine / GeneratorUnit (Kwh) 225,961,000 223,283,900Units per ltr. of fuel oil / gas NIL NILCost/units – (Rs.) NA NA

2. Coal (Coking and non-coking coal at Coke Oven,

Ferro Chrome & DRI)Quantity (MT) 695,187 811,448Total Cost - (Rs. Million) 4,928.77 4,615.92Average Rate – (Rs.) 7,089.85 5,688.50

3. Furnace Oil Quantity (k. ltrs.) NIL NILTotal Amount - (Rs. Million) NIL NILAverage Rate NIL NIL


4. CokeQuantity (MT) 56,554 127,337Total Cost - (Rs. Million) 903.51 1,597.39Rate / Tonne – (Rs.) 15,976.06 12,544.56

B. Consumption per unit of productionProducts (with details)1. Production of Pig Iron including by-products MT 46,233 150,424

Electricity Kwh 187.61 174.07Furnace Oil Ltr. NIL NILCoal Kg. NIL NILCoke Kg. 754.93 681.03

2. Production of Coke including by-products MT 284,464* 353,601Electricity Kwh 12.45 9.39Furnace Oil Ltr. NIL NILCoal (Hard, Semi Hard & Semi Soft Coking Coal) Kg. 1,428.10 1,454.46

3. Production of Ferro Chrome including by-products MT 44,372 47,649Electricity Kwh 3,592.23 3,668.45Furnace Oil Ltr. NIL NILCoke Kg. 487.94 522.46Coal Kg. 9.58 NIL

4. Production of Sponge Iron including by-products MT 134,538 139,299Electricity Kwh 132.54 134.77Furnace Oil Ltr. NIL NILCoal Kg. 2,145.00 2,133.16

5. Production of Chrome Concentrate & Chrome powder MT NIL 2,412Electricity Kwh NIL 76.29Furnace Oil Ltr. NIL NILCoke Kg. NIL NIL

* does not include production of coke on account of conversion: 55,876 MT.

2010-11 2009-10

FORM B


B. Technology Absorption



(a) Use of Anthracite coal to reduce nut coke consumption in Ferro Chrome Plant.

(b) The Pig Iron yield has been improved due to modification of moulds and installation of movable trolley. This has also reduced jamming of Pig Casting Machine.

(c) Controlled cooling of Coke resulting in less moisture in the coke.

(d) Controlled cooling of ferro chrome hot cake to save water and reduce water accumulation in hot zone.

(e) Coke pusher car track is being repaired to improve efficiency & consistency.

(f) Use of Iron ore fines of Blast Furnace in Sponge Iron Plant.

(g) Installation of VVVF drive in Lobe Compressor of DRI Kiln.

(h) Installation of Weigh Feeders & Belt weighers in DRI Unit.


(a) Increase in the sales realisation of Hot Metal.

(b) The pig iron yield has improved which has higher value compared to scrap.

(c) Higher the moisture in the coke, higher will be the coke rate in the Blast Furnace. The reduced coke rate is due to less moisture in the coke.


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Technology absorption, adaptation and innovation a. Imported technology

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11400,000 TPA Environment friendly Clean type Non-recovery Coke Oven Technology.

Electrode handling technology for Ferro Chrome Plant.

0.5 MTPA Steel Melting Technology consisting of EAF, LRF etc.

0.5 MTPA Bar & Wire Rod Mill Technology.

NIL NIL 300 TPD Lime Kiln

b. Year of Import : as given above

c. Has technology been fully absorbed :

Coke Oven Technology and Electrode handling technology for Ferro Chrome Plant has been fully absorbed. SMS and Rolling Mill technologies are being perfected.

d. If not fully absorbed, areas where this has not taken place, reasons there for and future plan of action :

Lime Kiln Technology is under implementation.

Foreign Exchange Earnings and Outgo Particulars under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988

a) Activities relating to exports; initiatives taken to increase exports; development of new products and services; and export plans:

The Company realises the importance of a long term presence in the global market and has taken initiative to increase exports. The sales from exports have increase to Rs. 2,194.52 million from Rs. 1,952.94 million, showing a growth of 12.37%. Your Company exports to various customers in China, Japan and Korea.

(d) The specific consumption of chrome ore is reduced due to higher yield of Ferro Chrome.

(e) Reduction in cost of Ferro Chrome due to non consumption of magnesite and use of less water.

(f) Reduction in the cost of Sponge Iron due to increased recovery.

(g) Reduction in power consumption due to VVVF technology.

(h) Consistency in operations due to controlled and calibrated feed of raw materials, resulting in increased campaign life.


(a) Use of Coke breeze for making composite chrome ore briquette, thereby reducing the specific consumption of sized coke in Ferro Chrome production, resulting in reduction in cost of Ferro Chrome.

(b) Modification in the pig casting machine to be done to improve the pig iron yield further.

(c) Installation of Sinter Plant for effective use of Blast Furnace wastes, Iron ore fines & Coke breeze.

b) Total Foreign Exchange used and earned:(Rs. Million)

Particulars 2010-11 2009-10Foreign Exchange EarningsExport Sales 2,194.52 1,952.94Foreign Exchange OutgoImports

Raw Materials 3,747.43 2,762.86 Finished Goods 1,839.25 816.00Capital Goods 2,000.58 38.08

Traveling 6.71 3.03 Interest 61.36 74.57 Others 1.16 0.98


Annexure III

Annexure to the Directors’ Report to the Shareholders Employee Stock Option SchemeStatement as at 31 March 2011, pursuant to Clause 12 (Disclosure in the Directors’ Report) of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as amended:

Sl.No. Particulars Employee Stock Option Scheme 2010(a) Total number of Options granted during the year Grant A: 900,000(b) The pricing formula The options are granted at an exercise price equal to prevailing Market

Price per Equity Share, being latest available closing price, prior to the date of the meeting of the Remuneration Committee, in which options are granted, on the stock exchange on which the shares of the Company are listed. If the shares are listed on more than one stock exchange, then the stock exchange where there is highest trading volume on the said date shall be considered.

Accordingly, under Grant A, Options have been granted during the year at the closing market price of the shares of the Company on NSE on the day immediately preceeding the date of grant of the options, i.e. Rs. 46.30 per share.

(c) Options vested (as on 31 March 2011) NIL(d) Options exercised during the year NIL(e) The total number of Equity Shares arising as a result of exercise

of option NIL

(f) Options lapsed during the year NIL(g) Variation of terms of options NIL(h) Money realised by exercise of options during the year (Rs.) NIL(i) Total number of options in force 900,000(j) Employee wise details of options granted to:-

(i) Senior Managerial personnel: Basudeo Prasad Modi 50,000Prabir Ramendralal Bose 50,000Manoj Kumar Digga 50,000

(ii) any other employee who received a grant in any one year of option amounting to 5% or more of options granted during that year;

NONE

(iii) identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant

NONE

(k) Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of Option calculated in accordance with Accounting Standard (AS) 20 ‘Earnings Per Share’

Rs. 4.67

(l) Where the company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognised if it had used the fair value of the options, shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed

If the Company had followed fair value method for accounting the stock options, compensation cost would have been higher by Rs. 1.4 Million for Financial Year 2010-11. Consequently Profit after tax for Financial Year 2010-11 would have been lower by Rs. 1.4 Million and accordingly earnings per share would be Rs. 4.66.

(m) Weighted-average exercise prices and weighted-average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock

Weighted average exercise price of Options granted during the year whose:

Exercise price equals market price Rs. 46.30 per option.Exercise price is greater than market price N.A.Exercise price is less than market price N.A.Weighted average fair value of options granted during the year whose:Exercise price equals market price Rs. 19.56 per optionExercise price is greater than market price N.A.Exercise price is less than market price N.A.

(n) A description of the method and significant assumptions used during the year to estimate the fair values of options, including the following weighted-average information:

Black Scholes Options Pricing Model

(i) risk-free interest rate, 7.93%(ii) expected life, 4 years(iii) expected volatility, 55.29%(iv) expected dividends, and 2.77%(v) the price of the underlying share in market at the time of

option grantRs. 46.30 per share

Based on the above assumptions, the Fair Value per option is Rs. 19.56.

The Company has received a Certificate from the Auditors of the Company that the Scheme has been implemented in accordance with Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the resolution passed by the Members on 17 August 2010.


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The Board of Directors 30 May 2011VISA Steel LimitedKolkata 700 027

Vishal Agarwal Manoj Kumar DiggaManaging Director Chief Financial Officer

Pursuant to the provisions of Clause 49(V) of the Listing Agreement, we, Vishal Agarwal, Managing Director and

Manoj Kumar Digga, Chief Financial Officer hereby certify that:

(a) we have reviewed financial statements and the cash flow statement for the year 2010-11 and that to the best of

our knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or contain

statements that might be misleading;

(ii) these statements together present a true and fair view of the company’s affairs and are in compliance with

existing accounting standards, applicable laws and regulations.

(b) there are, to the best of our knowledge and belief, no transactions entered into by the company during the year

which are fraudulent, illegal or violative of the company’s code of conduct.

(c) we accept responsibility for establishing and maintaining internal controls for financial reporting and that we

have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting

and there have been no deficiencies in the design or operation of such internal controls.

(d) we have indicated to the auditors and the Audit Committee that:




Persons constituting group coming within the definition of “group” as defined in the Monopolies and Restrictive Trade Practices Act, 1969 include the following:

Bodies Corporate -

VISA Infrastructure Limited; VISA International Limited; VISA Power Limited; VISA Comtrade Limited;

VISA BAO Limited; VISA Cement Limited; Ghotaringa Minerals Limited; VISA Aluminium Limited;

VISA Realty Limited; VISA Minmetal Limited; VISA Urban Infra Limited; VISA Power Trading Company Limited;

VISA Power (M.P) Limited; VISA Aviation Limited; Tastebuds Gourmet Foods Pvt. Limited;

Fatehpur Logistics Private Limited; VISA Group Limited; VISA Bulk Shipping Pte Limited; VISA Resources Pte

Limited; VISA GMR Limited.

Individual Promoters -

Vishambhar Saran; Saroj Agarwal; Vishal Agarwal; Vikas Agarwal; Vivek Agarwal; Vishambhar Saran & Sons (HUF).


ManagementDiscussion and Analysis

OverviewDuring the financial year 2010-11, the Company has achieved healthy growth in sales and profitability and is poised to emerge as a stronger Company to deliver enhanced shareholder value over the coming years. Your Company registered a stable performance during 2010-11 with a 14% growth in revenues to Rs. 13,328.79million, 4% growth in EBIDTA to Rs. 2,055.98 million, 1% increase in PBT to Rs. 864.55 million and 8% rise in PAT to Rs. 513.77 million.

Industry Structure and DevelopmentsSteel Industry OverviewThe global economy has witnessed a sustained growth largely driven by the additional stimulus and bail out packages announced by various countries which has created liquidity and stimulated demand, leading to the recovery in the US and Europe. The Chinese and Indian economies have been the fastest economies. However, this has led to inflationary pressures which have forced central bank to raise interest rates.

The steel industry has also seen a reasonable growth in demand and increase in production volumes especially in China and India. However, this has once again put pressure on raw material availability and prices. The floods in Queensland, Australia have put further pressure on the prices of Coking Coal which has increased from USD 200 per MT levels to USD 300 per

MT levels. Due to the volatility in Coking Coal prices over the last couple of years, there has been a shift in pricing mechanism for Coking Coal from annual to quarterly to partly monthly benchmark prices. This has resulted in volatility in prices of iron and steel products as well.

China continues to drive the global steel industry with a production of approx. 630 million tons in 2010 which equates to approx. 45% of global Steel production.Chinese Steel demand continues to be driven by large capital expenditure and government infrastructure projects across the country. However, it is expected that the production growth for steel in the current decade will slow down, which should reduce raw material prices.

The Indian economy grew at 8.6% in 2010-11 against 7.2% last year which shows a remarkable growth.The economy is likely to grow at over 8% over the next decade driven by the infrastructure (power, road, railways, ports etc.) and consumption (automobile, real estate etc.) sectors which will result in robust growth in demand for various iron and steel products.

The States of Orissa, Chhattisgarh and Jharkhand which account for majority of the iron ore and coal reserves in the country will remain the most attractive locations for setting up iron and steel manufacturing capacity in the coming years.


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The States of Orissa, Chhattisgarh and Jharkhand which account for majority of the iron ore and coal reserves in the country will remain the most attractive locations for setting up iron and steel manufacturing capacity in the coming years.

Company OverviewYour Company’s current saleable products include Iron and Steel products such as LAM Coke, Ferro Chrome, Pig Iron, Sponge Iron and Special Steel. Your Company has completed project work for the 0.5 million TPA Special Steel Plant and additional 25 MW Power Plant which will further boost growth in revenues and margins.

Business Review The current business of your Company comprises of manufacturing of Iron and Steel products such as Coke, Ferro Chrome, Pig Iron, Sponge Iron and Special Steel.

The manufacturing facilities of your Company are situated at Kalinganagar which includes Coke Oven, Ferro Chrome, Blast Furnace, Sponge Iron, Power and Special Steel and at Golagaon in Orissa where the Chrome Ore Beneficiation & Chrome Ore Grinding Plants are located.

Iron & Steel Products(a) LAM Coke The Coke Oven Plant, with a total capacity of

400,000 TPA, operates on the stamp-charging technology which allows blending of semi-soft and semi-hard Coking Coals with prime hard Coking Coals to produce Low Ash Metallurgical Coke.

The total coke production during 2010-11 was 340,339 MT compared to 353,601 MT in 2009-10.Coking coal, the primary raw material for producing coke, was imported from Australia. Coke was partly consumed in the Blast Furnace and partly sold with total sales contribution amounting to Rs. 4,803.18 million, equating to 36% of total revenues.

(b) Ferro Chrome The Ferro Chrome Plant, with a total capacity of

50,000 TPA produced 44,372 MT of Ferro Chrome in 2010-11 compared to 47,649 MT in 2009-10. The main raw material is Chrome Ore (sourced from OMC), Coke and Power. Ferro Chrome is sold to various Special and Stainless Steel Plants in India and globally. The sales contributed 19% of total revenues during the year amounting to Rs. 2,518.25 million.

(c) Pig Iron The Blast Furnace with a total capacity of 225,000

TPA is currently producing Hot Metal which is

poured into moulds to produce Pig Iron. Basic grade Pig Iron is sold to various Steel plants in eastern India while foundry grade Pig Iron is sold to major customers in eastern and northern India.

The total hot metal production during 2010-11 was 46,233 MT due to closure of OMC’s Daitari Mines as compared to 150,424 MT of hot metal in 2009-10.

Pig Iron sales contributed to 6% of the total revenues of the Company during the year under review, amounting to Rs. 835.02 million.

(d) Sponge Iron The Sponge Iron Plant having capacity of 300,000

TPA produced 134,538 MT during 2010-11 of Sponge Iron as against 139,299 MT of Sponge Iron during 2009-10. It has contributed 17% of the total revenues amounting to Rs. 2,277.92 million.

The main raw materials for Sponge Iron Plant are Iron Ore and Thermal Coal. Whilst Iron Ore is procured mainly from OMC, the Coal is procured from Mahanadi Coalfields Limited.

(e) Power The Power Plant produced 226 million KWH of

power during the year 2010-11 as against 223 million KWH produced during 2009-10. The Power produced was mainly used captively. The Company completed the project work for 3rd 25 MW Power Plant taking the total capacity to 75 MW.

(f) Special Steel The Company completed the project work for

the 0.5 million TPA Special Steel Plant and sales of Special Steel products shall commence from FY’2011-12 onwards. This will further boost the Company’s growth in revenues and margins.

Project Overview The Company has decided to set up an Iron Ore Sinter Plant in order to hedge the iron ore procurement as it is currently buying only sized iron ore. This would also ensure continuous smooth running of the Blast Furnace. The Company plans to set up additional power generation facilities to meet the shortfall in captive power generation vis-à-vis requirements including VISA BAO requirement and a Lime Kiln Plant to ensure smooth running of Special Steel Plant.


Strategic InitiativesJoint Venture with BaosteelVISA BAO Limited, a subsidiary of your Company is in the process of setting up a 100,000 TPA Ferro Chrome Plant at Kalinganagar Industrial Complex. The Company has made significant progress towards implementation of the project including equipment ordering, basic and detailed engineering, civil and structural work etc.

Project expansionYour Company has charted a vision for expanding the existing facility at Kalinganagar in Orissa from 0.5 million TPA to 1 million TPA Steel Plant and Power Plant from 75 MW to 375 MW and set up greenfield facility of 1 million TPA Steel Plant and 300 MW Power Plant at Raigarh in Chhattisgarh. The plan is to raise the total Steel production of the Company to 2 million TPA and power generation to 675 MW over the next few years and provide the foundation to maintain high quality growth and enhance value creation for its shareholders.

Your Company has also taken necessary steps for securing its raw material requirements and integrating backwards into mining of Iron Ore, Coal and Chrome Ore.

Opportunities and ThreatsYour Company is poised to seize the opportunities in the Iron & Steel Industry (both for steel & intermediary saleable products) through its strengths of locational and logistical advantages, raw material linkages, technology edge and management expertise. These opportunities will be linked directly to the growing demand from the automobile and auto components, infrastructure, construction and power sectors. Your Company’s strategic location in Kalinganagar offer scope for seamless value addition in its manufacturing process from hot metal to stainless steel. Your Company is also well positioned in its conscious adherence to a modular project implementation,

thereby enabling ploughing of internal accruals in future projects, thereby reducing costs related to financing.

The threats for your Company would come from adverse fluctuations in input and capital costs, foreign exchange variations and taxes & duties. The buoyancy in the Iron & Steel Sector has attracted many players, resulting in reduced availability of skilled manpower and contractor workforce. Delay in implementation of project may lead to opportunity loss in revenue generation and rise in costs.

Risk ManagementYour Company has identified major focus areas for risk management to ensure organisational objectives are achieved and has a well defined structure and proactive approach to assess, monitor and mitigate risks associated with these areas, briefly enumerated below:

a) Project implementation – Project status is monitored on a regular basis by the project management team to counter slippages and reviewed on a monthly basis by the executive management. Consultants are present on-site for mitigating contingencies on the implementation front. Necessary coverage has been taken in the form of an extensive Erection All Risk Policy.

b) Foreign Exchange – Your Company deals in sizeable amount of foreign exchange in imports of capital items and raw materials and exports of finished products. A comprehensive and robust forex policy has been formulated for insulating the Company by hedging foreign exchange exposure.

c) Systems – Your Company has implemented SAP, the leading software for Enterprise Resource Planning, to integrate its operations and to use best business and commercial practices.

d) Statutory compliances – Procedure is in place for monthly reporting of compliance of statutory obligations and is reported to the Board of Directors at its meetings.


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Finance Review and AnalysisYour Company reported revenues of Rs. 13,328.79 million, registering a 14 per cent increase over FY’2009-10 and

PAT increased from Rs. 474.16 million to Rs. 513.77 million during FY’2010-11.

Highlights Rs. Million

2010-11 2009-10 Change PercentNet Sales / Income from Operations 13,059.01 11,569.42 1,489.59 13

Other Income 269.78 145.41 124.37 86

Total Income 13,328.79 11,714.83 1,613.96 14

Expenditure

(Increase) / decrease in stock (745.68) (176.82) 568.86 322

Raw Materials consumed 8,009.69 6,866.18 1,143.51 17

Purchase of Trading Products 2,397.26 1,447.24 950.02 66

Employee Cost 428.68 327.88 100.80 31

Other expenses 1,182.86 1,273.99 (91.13) (7)

Operating Profit 2,055.98 1,976.36 79.62 4

Interest & Finance Charges (Net) 709.38 651.40 57.98 9

Depreciation 482.05 468.18 13.87 3

Profit before Tax 864.55 856.78 7.77 1

Provision for Tax 350.78 382.62 (31.84) (8)

Profit after tax 513.77 474.16 39.61 8

Cash Profit 1,188.55 1,255.73 (67.18) (5)

Sales & Other Income

Sales growth was primarily driven by better price

realisations for Coke, Ferro Chrome, Pig Iron and

Sponge Iron inspite of lower volumes in Pig Iron. Other

Income constitutes mainly income from sale of Scrap,

Coke conversion, DEPB licence, receipt of insurance

claim proceeds, etc.


Raw material consumption value has increased by 17%

due to stable production volumes and higher prices of

Iron Ore, Coking Coal, Chrome Ore and Thermal Coal.

Employee Cost and Other Expenses

Employee cost increased due to rise in manpower

strength for the expanding facilities and annual

increments. Other expenses decreased due to lower

Power & Fuel and Stores & Spares costs due to lower

production in Blast Furnace.

Interest & Finance Charges

The net interest and finance charges increased during

the year due to higher interest rates and increased

availment of term loans for projects and working capital

facilities for its operations.

Depreciation

Depreciation was stable during the year mainly since

there was marginal addition in Fixed Assets.

Profit before Tax

Your Company has registered a PBT of Rs. 864.55

million as against Rs. 856.78 million last year. PBT has

improved mainly on account of better margins from the

Coke and Ferro Chrome businesses and lower power

cost due to captive power generation.

Profit after Tax

Your Company has registered PAT of Rs. 513.77 million

as against Rs. 474.16 million last year.

Cash Profit

During the year under review, Cash Profit has decreased

marginally to Rs. 1,188.55 million as against Cash Profit

of

Rs. 1,255.73 million in the previous year.


Balance Sheet analysis

Fixed Assets & Investments

The Gross Block has increased marginally on account

of additions in vehicles and computers etc. The Capital

WIP increased due to the Power Plant and Special Steel

Plant. During the year the Company has invested Rs. 10

million in VISA Urban Infra Limited.

Inventories

Inventory of raw materials went up during the year due

to higher prices of raw materials. The average inventory

turnover reduced to 103 days from 110 days during

2010-11.

Sundry Debtors, Loans & Advances

Gross debtors decreased by 26% despite a 13%

increase in sales, which was possible due to better

debtor management during the year. Your Company’s

focus on improving collections and stringent credit

assessment procedures, helped bring down the

average debtors turnover from 23 days to 16 days

during the year.

Loans & advances increased mainly on account of

advances made to suppliers for raw materials, capital

items and statutory deposits.

Cash & Bank Balances

Your Company has deployed its cash accruals in

fixed deposits with banks at attractive rates of interest

towards margin money for working capital.

Sundry Creditors & Current Liabilities

Sundry Creditors has increased due to sharp increase

in coking coal prices. A substantial increase in capital

creditors of Power Plant and Special Steel Plant has also

contributed significantly in increase in sundry creditors.

Key Ratios

Key financial ratios improved during the year due to better operational and financial performance, summary of which is given below:

Particulars 2010-11 2009-10EBIDTA / Turnover (percent) 15.43 16.87

Profit After Tax / Turnover (percent) 3.85 4.05

EBIDTA / Net Interest (no. of times) 2.90 3.03

Debt to Equity 2.95 3.12

Return on Average Capital Employed (percent) 8.05 8.91

Return on Equity (percent) 12.44 13.85

Book Value per share (Rs./share) 37.54 31.12

Earning per share (Rs./share) 4.67 4.31

Cash Earning per share (Rs./ share) 10.80 11.42

Market Capitalisation (Rs. million) as on 31 March 4,945 4,670


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Developments In Human Resources & Industrial RelationsYour Company recognises the fact that manpower

is one of the vital constituents of a successful

organisation. The growth of your Company and

execution of new projects places emphasis on the

recruitment process and your Company has been

successful in attracting professional talent. The Learning

Centre at Kalinganagar, Orissa continuously trains &

develops employees to suit organisational needs. The

total number of employees in your Company, including

those inducted as trainees in the Company, as on 31

March 2011 was 1,344.

Internal Control and SystemsThe internal control systems in your Company

commensurates with the size and nature of its

operations and periodic audits are conducted in various

disciplines to ensure adherence to the same. During the

year, M/s. L. B. Jha, Internal Auditors of your Company

had independently evaluated the adequacy and efficacy

of the audit controls. The direct reporting of the Internal

Auditors to the Audit Committee of the Board ensures

independence of the audit and compliance functions.

The Internal Auditors regularly report to the Audit

Committee on their observations on the Company’s

processes, systems and procedures ascertained during

the course of their audit. Concerted efforts towards

stabilisation of SAP have also contributed to tightening

of control systems. Your Company has been able to

adapt adequately to this ERP package and is placed to

derive significant benefits from the same. Emphasis

is placed on adequacy, reliability and accuracy of

dissemination of financial data and information.

Compliance issues are given utmost importance and

reported regularly to the Board.

Your Company has been accredited with the ISO 9001

certification. It shows commitment to quality, customers

and a willingness to work towards improving efficiency.

OutlookIndia has immense potential for creating new steel

capacity. Indian per capita steel consumption is

presently very low compared to world average which

further re-confirms the opportunities for steel demand

to continue accelerating in the times ahead. Your

Company with a well diversified product portfolio is well

poised to take advantage of the growth in the demand

for Special Steel products, Coke and Ferro Chrome.

Cautionary StatementStatements in this “Management Discussion & Analysis”

describing the Company’s objectives, projections,

estimates, expectations or predictions may be ‘forward

looking statements’ within the meaning of applicable

securities laws and regulations. Actual results could

differ materially from those expressed or implied.

Important factors that could make a difference to

the Company’s operations include global and Indian

demand supply conditions, finished goods prices,

input availability and prices, cyclical demand and

pricing in the Company’s principal markets, changes

in Government regulations, tax regimes, economic

developments within India and the countries within

which the Company conducts business and other

factors such as litigation and labour negotiations.

Annual Report 2010-11Annual Report 2010 -11


Corporate Governance: Our PhilosophyCorporate Governance which has become the integral

part of business operations encompasses the key

elements such as integrity, transparency, fairness and

adoption of highest standards of business ethics to

benefit the interest of the stakeholders. Corporate

governance is beyond the realm of law. It stems

from the culture and mindset of management and

cannot be regulated by legislation alone. Corporate

governance also provides the structure through which

the objectives of the company are set and the means of

attaining those objectives and monitoring performance

are determined.

VISA Steel Limited (the Company) has been practicing

the principles of good Corporate Governance by

adopting best practices followed in the area of

corporate governance, disclosure standards while

protecting the interests of stakeholders in every

business decision. The Board of Directors and its

committees, on behalf of and for the benefit of the

Company’s stakeholders endeavor to achieve high level

of transparency, integrity and equity in all its operations

to meet stakeholders aspirations and societal

expectations. Your Company endeavours to uphold

the principles and practices of Corporate Governance

to ensure transparency, integrity and accountability in

its functioning, which are vital to achieve its vision of

emerging as a low cost producer of value added steel

products with captive mineral resources and power.

Compliance with the SEBI Code on Corporate GovernanceIn line with this, we are pleased to inform you that,

as on 31 March 2011, the Company is in compliance

with all the requirements of Clause 49 of the Listing

Agreement. The necessary disclosures as required

under Clause 49 of the Listing Agreement have been

covered in this Annual Report.


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43



I. BOARD OF DIRECTORSComposition of the Board


Name of the Director Executive / Non-Executive / Independent1

No. of Outside Directorship(s) held

Outside Committee positions held2

Public Private Foreign Chairman Member

Mr. Vishambhar Saran Executive Chairman 12 - 1 - -

Mr. Maya Shanker Verma Non-Executive, Independent 4 3 - 2 1

Mr. Shiv Dayal Kapoor Non-Executive, Independent 6 - - 1 4

Mr. Debi Prasad Bagchi Non-Executive, Independent 8 1 - 2 6

Mr. Pradip Kumar Khaitan Non-Executive, Independent 14 - 1 - 6

Mr. Shanti Narain Non-Executive, Independent 2 - - - 2

Mrs. Saroj Agarwal Non-Executive 9 - - 1 -

Mr. Vikas Agarwal Non-Executive 11 2 - - 3

Mr. Vishal Agarwal Managing Director 13 - - 2 2

Mr. Basudeo Prasad Modi Deputy Managing Director 3 - - - -

1 Independent director is as defined in Clause 49 of the Listing Agreement.

2 For this purpose, only two Committees, viz., the Audit Committee and the Shareholders’ / Investors’ Grievance

Committee have been considered. This excludes Committee positions in private limited companies, foreign companies

and companies under Section 25 of the Companies Act, 1956.

3 At the last Annual General Meeting of the Company held on 17 August 2010, Mr. Arvind Pande, retiring Director, who

was a Non-Executive & Independent Director on the Board of the Company, did not opt for re-election. Hence Mr. Pande

ceased to be director with effect from that date. Due to retirement of Mr. Arvind Pande, Independent Director, the number

of Independent Directors on the Board had reduced from 6 to 5 temporarily and the Company was taking steps to induct

an Independent Director on the Board of the Company. Further, Mr. Vivek Agarwal, Non-Executive Director, resigned from

the Board of Directors of the Company w.e.f. 28 January 2011. The composition of the Board of Directors of the Company

as on 31 March 2011 is in compliance with the requirements of Clause 49 (IA) of the Listing Agreement.

Details of the Board Meeting and Attendance

Date of the Board Meeting City No. of Directors Present19 May 2010 Kolkata 9

30 July 2010 Kolkata 9

29 October 2010 Kolkata 9

4 February 2011 Kolkata 10


Details of remuneration paid to the Board of Directors A. Non-Executive Directors

Name of the Director Sitting Feespaid1

CommissionPayable2

Total payments

paid / payable in 2010-11

No. of Board Meetings

AttendedLast AGM3

(Rs.) (Rs.) (Rs.) Held Attended Mr. Maya Shanker Verma 140,000 578,313 718,313 4 3 NoMr. Arvind Pande (ceased to be a Director w.e.f. 17 August 2010)

- - - 2 - No

Mr. Shiv Dayal Kapoor 180,000 795,181 975,181 4 4 YesMr. Debi Prasad Bagchi 160,000 686,747 846,747 4 4 YesMr. Pradip Kumar Khaitan 50,000 216,867 266,867 4 2 NoMr. Shanti Narain 160,000 722,892 882,892 4 4 NoMrs. Saroj Agarwal 80,000 - 80,000 4 4 NoMr. Vikas Agarwal 170,000 - 170,000 4 4 NoMr. Vivek Agarwal (ceased to be a Director w.e.f. 28 January 2011)

- - - 3 - No

Total 940,000 3,000,000 3,940,000

B. Executive Directors

Name of the Director Relationship with other Directors

Businessrelationship

with the Company, if

any


Allelements of

remunerationpackage,i.e. salary, benefits,

bonuses, etc.(Rs.)

Fixedcomponent & performance

linked incentives,along with

performancecriteria

Servicecontracts,

noticeperiod,

severancefee

Stock option details, if any


Mr. Vishal Agarwal See Note (a) Managing Director


Mr. Basudeo Prasad Modi

See Note (a) Deputy ManagingDirector


Note:

1. During 2010-11, sitting fees were paid @ Rs. 20,000 per Board Meeting and Rs. 10,000 per Committee Meeting, i.e.

Audit, Share Transfer & Investor Grievance, Finance & Banking, Remuneration and Selection Committees.

2. Commission is paid out of profits of the Company for the relevant financial year, not exceeding 1% of the net

profits, to the Independent Directors of the Company. Commission is calculated based on the weightage given to

the attendance at the Board and Committee meetings.

3. Annual General Meeting was held on 17 August 2010.

4. No stock options have been granted during the year to any of the above Directors.


44

45



(a) Mr. Vishambhar Saran is the husband of Mrs. Saroj Agarwal and father of Mr. Vishal Agarwal and Mr. Vikas

Agarwal. Other than this, none of the other Directors are in any way related to any other Director.

(b) Mr. Vishambhar Saran, Chairman is entitled to performance linked incentive in the form of commission not

exceeding 2% of the net profits of the Company u/s 198 of the Companies Act, 1956, subject to a maximum

limit of 9 months salary till 14 December 2010. On 15 December 2010, Mr. Saran was re-appointed as Whole-

time Director designated as Chairman of the Company for a period of three years. As per the terms and

conditions of his re-appointment including remuneration, he is entitled to Commission upto 2% of the net

profits of the Company for the relevant financial year computed in the manner laid down in Section 198 of the

Companies Act, 1956, subject to the overall ceilings stipulated in Sections 198 and 309 of the Companies Act,

1956. Accordingly, Mr. Saran is entitled to commission of Rs. 9,925,785 for the FY’2010-11.

Mr. Vishal Agarwal, Managing Director is also entitled to performance linked incentive in the form of

commission not exceeding Rs. 5,184,000, i.e., not exceeding 9 months’ basic salary for FY’2010-11.

Mr. Basudeo Prasad Modi, Deputy Managing Director is entitled to a Merit Bonus of Rs. 1,200,000 p.a. as per the

terms of his appointment and remuneration, approved by the Members.

The Company has internal norms for assessing performance of its Executive Directors which is done by the Board.

(c) Mr. Vishambhar Saran has been re-appointed as Whole-time Director, designated as Chairman for a period of

3 years with effect from 15 December 2010. This appointment may be terminated by either party by giving 1

month’s notice in writing and no severance fee is payable. The re-appointment is subject to the approval of the

shareholders of the Company at the ensuing Annual General Meeting.

At the Annual General Meeting of the Company, held on 29 July 2008, Mr. Vishal Agarwal was re-appointed

as the Managing Director w.e.f. 25 June 2008 for a period of three years. The appointment may be terminated

by either party by giving 1 month’s notice in writing and no severance fee is payable. The present term of re-

appointment will expire on 24 June 2011.

The Board of Directors, had in its meeting held on 30 May 2011, re-appointed Mr. Vishal Agarwal as Managing

Director for a period of 3 years effective from 25 June 2011. The appointment may be terminated by either

party by giving 1 month’s notice in writing and no severance fee is payable. The re-appointment is subject to

the approval of the shareholders of the Company at the ensuing Annual General Meeting.

Mr. Basudeo Prasad Modi has been re-appointed as Deputy Managing Director for a period of 1 year effective

from 1 April 2011. The appointment may be terminated by either party by giving 1 month’s notice in writing and

no severance fee is payable. The re-appointment is subject to the approval of the shareholders of the Company

at the ensuing Annual General Meeting.

(d) The Company rescinded its Employee Stock Option Scheme 2008 under which no Options had been granted

and implemented a new ESOP Scheme titled Employee Stock Option Scheme 2010 (ESOP Scheme 2010),

salient features of which were duly approved by the Members of the Company at the Annual General Meeting

held on 17 August 2010. The ESOP Scheme 2010 was framed pursuant to the approval of the Members of the

Company at the aforesaid Annual General Meeting and adopted by the Remuneration Committee of Board

of Directors of the Company at its meeting held on 4 February 2011. Mr. Vishambhar Saran and Mr. Vishal

Agarwal, being promoters of the Company, are not eligible for grant of Options under the ESOP Scheme 2010.

Mr. Basudeo Prasad Modi has been granted 50,000 Options, details of which are as follows:


(e) During the financial year 2010-11, 4 meetings of the Board of Directors were held. Mr. Vishambhar Saran,

Chairman, Mr. Vishal Agarwal, Managing Director and Mr. Basudeo Prasad Modi, Deputy Managing Director

were present in all the 4 Board Meetings. Mr. Basudeo Prasad Modi was present at the last Annual General

Meeting held on 17 August 2010. Mr. Vishambhar Saran and Mr. Vishal Agarwal were not able to attend the

Annual General Meeting due to unavoidable circumstances.

II. BOARD COMMITTEES Audit Committee The Audit Committee comprises of 4 Directors, all Non-Executive Birectors, out of which 3 are Independent

Directors, details given under as on 31 March 2011:





Grant Date No. of Optionsgranted

Exercise Price per Option

Vesting Details Options exercised so far#

No. of Options vested / to be

vested

Vesting Dates

4 February 2011 50,000* Rs. 46.30 (Not issued at a discount)

12,500 4 February 2012 -

12,500 4 February 2013 -

12,500 4 February 2014 -

12,500 4 February 2015 -* Each option when exercised would be converted into one Equity Share of Rs. 10 each fully paid-up.

# The options are exercisable within a period of 3 years from the date of vesting.

All members of the Audit Committee are financially literate and possess requisite accounting or financial

management expertise.

The Company Secretary acts as Secretary to the Committee. The powers, role and terms of reference of the

Committee are as per Clause 49 of the Listing Agreement and the Committee reviews information as prescribed

under Clause 49 at its meetings. The broad terms of reference of the Audit Committee are:

1. Overseeing the Company’s financial reporting process and disclosure of financial information to ensure

that the financial statements are correct, sufficient and credible.

2. Reviewing with the management the internal control systems, internal audit functions, observations of the

auditors, periodical financial statements before submission to the Board.


4. The Committee is authorised to investigate into matters contained in the terms of reference or referred /

delegated to it by the Board and, for this purpose, has full access to information / records of the Company

including seeking external professional support, if necessary.


46

47



Share Transfer and Investor Grievance Committee The Share Transfer and Investor Grievance Committee comprises of the following Directors as on

31 March 2011:

Mr. Shanti Narain, Chairman - Independent Director




The primary function of the Committee is to supervise and ensure efficient transfer of shares, issue of new /

duplicate share certificates, dematerialisation & rematerialisation of shares and speedy redressal of investor

grievances.

As on 31 March 2011, 99.77% of the Company’s shares are in dematerialised form and the shares are

compulsorily traded on the stock exchanges in the dematerialised form.


Held Attended



Mr. Arvind Pande1 2 -



Mr. Vivek Agarwal2 3 -

Note : 1. Mr. Arvind Pande ceased to be a Director w.e.f. 17 August 2010.

2. Mr. Vivek Agarwal ceased to be a Director w.e.f. 28 January 2011.

During the financial year 2010-11, the Committee met four times on 19 May 2010, 30 July 2010, 29 October

2010 and 4 February 2011 and the details of attendance by the Committee members are as given under:

During the financial year 2010-11, the Committee met four times on 19 May 2010, 30 July 2010, 29 October 2010 and 4 February 2011 and the details of attendance by the Committee members are as given under:


Held AttendedMr. Shanti Narain1 4 4



Mr. Arvind Pande2 2 -


Note : 1. Mr. Shanti Narain was appointed as Chairman of the Share Transfer & Investor Grievance

Committee with effect from 29 October 2010. 2. Mr. Arvind Pande was Chairman of the Share Transfer & Investor Grievance Committee upto 17

August 2010. He ceased to be a Director w.e.f. 17 August 2010.

Details of shareholders’ complaints are given in the “Shareholders Information” section of the Annual Report.



Two meetings of the Committee were held during 2010-11 on 19 May 2010 and 4 February 2011 and the details of attendance by the Committee members are as given under:


Held AttendedMr. Maya Shanker Verma 2 2


Mr. Pradip Kumar Khaitan 2 -



Three meetings of the Remuneration Committee were held during the financial year on 19 May 2010, 29 October 2010 and 4 February 2011 and the details of attendance by the Committee members are as given under:


Held AttendedMr. Pradip Kumar Khaitan 3 1




Mr. Vivek Agarwal1 2 -

Note : 1. Mr. Vivek Agarwal ceased to be a Director w.e.f. 28 January 2011.

Remuneration Committee There is a Remuneration Committee in place with roles, powers and duties, to be determined by the Board

from time to time. The Committee recommends appropriate compensation packages for Directors and

Executive Officers to retain best available personnel for key positions and provide performance based

incentives. The scope of the Remuneration Committee had been expanded to include powers related to

issuance of ESOP / ESPS to employees, implementation and administration of the ESOP Scheme 2010. The

Committee comprises of the following Directors as on 31 March 2011:





Finance & Banking Committee In addition to the above Committees, your Company has a Finance & Banking Committee with powers to

approve strategies, plans, policies and actions related to corporate finance. The Committee comprises of the

following Directors as on 31 March 2011:







48

49



Selection Committee In terms of Section 314(1B) of the Companies Act, 1956 and Director’s Relatives (Office or Place of Profit)

Rules, 2003, as amended by the Director’s Relatives (Office or Place of Profit) Amendment Rules, 2011, for

selecting and appointing employees, who are relatives of the Directors and carrying monthly remuneration

exceeding Rs. 250,000, your Company has a Selection Committee in place. The role of the Committee is also

to determine the remuneration and revisions to the same and making periodic recommendations to the Board

on their performance. The Committee comprises of the following Independent Directors as on 31 March

2011:




Mr. Arvind Pande was a member of the Selection Committee upto 17 August 2010. He ceased to be a Director

w.e.f. 17 August 2010.

A meeting of the Selection Committee was held on 29 October 2010 which was attended by Mr. Debi Prasad

Bagchi and Mr. Shanti Narain. Ill. SUBSIDIARY COMPANIES The Company has two subsidiary companies, VISA BAO Limited (VBL) and Ghotaringa Minerals Limited.

Clause 49 defines a “material non-listed Indian subsidiary” as an unlisted subsidiary, incorporated in India,

whose turnover or net worth (i.e. paid up capital and free reserves) exceeds 20% of the consolidated turnover

or net worth respectively, of the listed holding company and its subsidiaries in the immediately preceding

accounting year. Under this definition, VBL is a “material non-listed Indian subsidiary” of your Company.

In accordance with the Clause 49 (III) of the Listing Agreement, the following is duly complied with:

Mr. Shiv Dayal Kapoor, an Independent Director on the Board of Directors of the Company is a Director on

the Board of Directors of VBL.

The Audit Committee reviews the financial statements and in particular, the investments made by the

unlisted subsidiary companies.

The minutes of the Board meetings as well as statements of all significant transactions of the unlisted

subsidiary companies are placed before the Board of Directors of the Company for their review.

IV. DISCLOSURES Related Party transactions Related Party transactions as specified under Clause 49 of the Listing Agreement is placed before the Audit

Committee. A comprehensive list of Related Parties and their transactions as required by AS-18 issued by the

Institute of Chartered Accountants of India, forms part of Note 12, Schedule 16 to the Accounts in the Annual Report.

Disclosure of Accounting Treatment The accounting treatment in the preparation of financial statements is in line with that prescribed by the

Accounting Standards u/s 211(3C) of the Companies Act, 1956.


“I hereby confirm that, the Company has obtained from all the members of the Board and Senior Management,

affirmation that they have complied with the Code of Conduct for Directors and Senior Management in respect

of the financial year 2010-11.”

Kolkata Vishal AgarwalDate: 30 May 2011 Managing Director

Risk Management The Company periodically identifies, assesses and monitors risks associated with project implementation,

foreign exchange fluctuation, processes and systems, statutory compliances, HR policies etc. The Internal

Auditor conducts periodical audits and reports to the Audit Committee at its meetings on the adequacy of the

procedures.

Details on use of proceeds from public issues During the year, the Company did not raise any money through public issue, right issues or preferential issues

and there was no unspent money raised through such issues.

Remuneration of DirectorsAll details of remuneration to Directors have been disclosed above.


Name of the Director No. of shares held




Mr. Shanti Narain -


Mrs. Saroj Agarwal 70,100*

Mr. Vikas Agarwal 20,100*

*Beneficial interest of these shares vests with VISA International Limited.

Code of Conduct The Code of Conduct applicable to the Directors and Senior Management, as approved by the Board

of Directors is available on the website of the Company – www.visasteel.com. All Directors and Senior

Management Personnel have affirmed compliance with the Code and a declaration signed by the Managing

Director is given below:

Means of communication - Quarterly results

Which newspapers normally published in - Business Standard

- Sambad (Oriya)


Details of Directors appointed / re-appointedDetails of Directors being appointed / re-appointed, have been disclosed in the Notice for the Annual General

Meeting (AGM), i.e. a brief resume, nature of expertise in specific functional areas, names of directorships and

committee memberships and their shareholding in the Company.


50

51




Year Location Date Time Whether special resolutions passed

2009-10 Jayadev Bhavan, Ashok Nagar,

Unit-II, Bhubaneswar 751 001

17 August 2010 11.30 a.m. Yes



26 August 2009 12.30 p.m. Yes



29 July 2008 12.30 p.m. No

Postal Ballot Whether resolutions were put through postal ballot last year : Yes

The Postal Ballot Notice dated 30 July 2010 pursuant to Section 192A of the Companies Act, 1956 was sent to

the Members of the Company in relation to Ordinary Resolutions for seeking the Members’ assent or dissent

for increasing the borrowing limits of the Company under Section 293(1)(d) of the Companies Act, 1956 and for

authorising the Board of Directors to create mortgage and/or charge on the assets of the Company for securing

borrowings in accordance with Section 293(1)(a) of the Companies Act, 1956. The Members were requested to

return the postal ballot forms duly completed along with the assent (for) or dissent (against), so as to reach the

Scrutinizer on or before 19 September 2010.

Details of voting pattern :


Presentation to investors / analysts: are they available on the website - Available as and when made

Whether Shareholder Information Report forms part of the Annual Report - Yes

General Body MeetingsCurrent AGM date, time and venue:

The forthcoming Annual General Meeting will be held on Tuesday, 26 July, 2011 at 4.00 p.m. at Jayadev

Bhawan, Ashok Nagar, Unit II, Bhubaneswar 751 001.

Particulars Resolution No.1Authorisation for increase in the

borrowing limits of the Company under Section 293(1)(d) of the Companies

Act, 1956

Resolution No. 2Creation of security under Section 293(1)(a) of the Companies Act, 1956

No. of Postal Ballot Forms

No. of Shares No. of Postal Ballot Forms

No. of Shares

Total Postal Ballot Forms received 567 80,554,929 567 80,554,879

-Valid Postal Ballot Forms 528 80,521,258 504 80,513,828

-Invalid Postal Ballot Forms 39 33,671 63 41,051

Postal Ballot Forms with assent for the Resolution

494 80,503,122 476 80,494,403

Postal Ballot Forms with dissent for the Resolution

34 18,136 28 19,425

The Ordinary Resolutions as contained in the Postal Ballot Notice dated 30 July 2010 were duly passed by the

requisite majority. Votes cast in favour were 99.94% of the total votes cast on the resolution no. 1 and 99.92%

of the total votes cast on the resolution no. 2.


Person who conducted the postal ballot exercise :

Mr. Debendra Raut of M/s. D. Raut & Associates, Practising Company Secretary was appointed as Scrutinizer to

receive and scrutinize the completed postal ballot forms received from the Members and for conducting the Postal

Ballot in a fair and transparent manner.

Procedure for postal ballot :

After receiving the approval of the Board of Directors, the Notice, Explanatory Statement along with the Postal Ballot

Form and prepaid self addressed reply envelope were despatched to the Members to enable them to consider and

vote for or against the resolution within a period of 30 days from the date of despatch. After the last date of receipt

of Postal Ballot, the Scrutinizer, after due verification, submitted his report. The result for the above Postal Ballot

resolution was declared by the Chairman and was posted at the Registered Office of the Company. The results were

also published in the Newspapers and intimated to the Stock Exchanges.

Whether any resolution is proposed to be conducted through postal ballot :

At present there is no such proposal.

Details of non-compliance by the Company, penalties or strictures imposed on the Company by Stock Exchange or

SEBI or any statutory authority, on any matter related to capital markets, during the last three years.

There are no penalties or strictures imposed on the Company by SEBI or Stock Exchanges or any statutory authority

on any capital market issue during the last 3 years.


Your Company is in compliance with all the mandatory requirements of this Clause and with regard to the non-

mandatory requirements, your Company already has a Remuneration Committee in place. The Company also issues

Investor & Press Releases on a quarterly basis, subsequent to the publication of the financial results, which are sent

to the Stock Exchanges and are available on the website of the Company. Other non-mandatory requirements shall

be put in place, as and when considered and approved by the Board.

Certificate from the Auditors regarding compliance of the conditions of Corporate Governance stipulated in Clause

49 of the Listing Agreement with Stock Exchanges is annexed herewith.

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53




1. Annual General Meeting- Date and Time : 26 July 2011 at 4.00 p.m.

- Venue : Jayadev Bhavan,

Ashok Nagar, Unit II,

Bhubaneswar 751 001

2. Financial Year : April to March

3. Financial Calendar (Tentative) :

4. Dates of Book Closure : 18 July 2011 to 26 July 2011 (both days inclusive)

5. Dividend Payment Date : The Dividend will be credited / despatched between 1 August 2011 and 8 August 2011 to the eligible members.

6. Registered Office : VISA House11, Ekamra Kanan, NayapalliBhubaneswar 751 015Tel: +91 0674 2552 479, Fax: +91 0674 2554 661E-mail: [email protected]: www.visasteel.com

7. Listing Details : Equity Shares

Bombay Stock Exchange LimitedFloor 25, Phiroze Jeejeebhoy TowersDalal Street,Mumbai 400 001Stock Symbol: (532721)

The National Stock Exchange of India Limited“Exchange Plaza”, Bandra – Kurla ComplexBandra (E), Mumbai 400 051Stock Symbol: (VISASTEEL)

Note: Listing fees has been paid to the Stock Exchanges for the year 2011-12.

Financial reporting and Limited Review for the quarter ending 30 June 2011 End July 2011

Financial reporting and Limited Review for the half year ending 30 September 2011 Mid October 2011


Financial reporting for the year ending 31 March 2012 End May 2012

Annual General Meeting for the year ending 31 March 2012 End July 2012


9. Stock Code :Reuters Bloomberg



8. Stock Price Data : Bombay Stock Exchange National Stock Exchange



(Rs.) (Nos) (Rs.) (Nos)Apr-10 47.00 40.10 44.05 61,285,611 46.90 40.60 44.00 9,027,852May-10 44.30 33.50 35.20 2,959,005 44.20 33.45 35.20 6,617,035Jun-10 38.80 34.25 37.05 1,389,830 40.00 34.55 37.15 3,413,465Jul-10 41.15 36.50 38.85 1,834,328 41.10 36.90 38.80 3,192,628Aug-10 39.50 35.00 35.30 1,391,052 39.60 35.10 35.30 2,726,750Sep-10 43.60 35.35 38.60 4,705,417 43.45 35.50 38.65 9,449,672Oct-10 43.60 38.00 40.20 2,368,029 43.50 38.85 40.25 4,959,681Nov-10 43.80 34.25 36.10 1,107,187 43.15 34.45 36.20 2,513,814Dec-10 38.40 33.05 36.75 597,742 38.30 32.85 36.95 1,447,269Jan-11 45.60 36.35 44.45 3,196,319 45.65 36.10 44.65 7,920,604Feb-11 47.85 42.00 43.85 1,203,370 48.00 42.45 44.00 2,557,451Mar-11 47.35 41.00 44.95 443,957 47.05 42.50 45.20 999,476

10. Stock Performance :

Stock performance (indexed)

130

Apr -10 May -10 Jun -10 Jul -10 Aug -10 Sep -10 Oct -10 Nov -10 Dec -10 Jan -11 Feb -11 Mar -11

120

110

100

90

80

70

60

50

VSL Sensex Nifty


54

55



11. Stock Performance over the past few years :(In Percentage) 1 Year 2 Years 3 Years 4 Years 5 YearsVISASTEEL 6.60 144.99 2.26 70.88 (-)14.71

BSE Sensex 10.94 100.29 24.29 48.75 72.38

NSE Nifty 11.14 93.10 23.21 52.65 71.45

12. Registrars and Transfer Agents :(Share transfer and communication regarding share certificates, dividends and change of address)

Karvy Computershare Private LimitedUnit: VISA Steel LimitedPlot No. 17-24, Vittal Rao Nagar,Madhapur, Hyderabad 500 081Tel: + 91 40 4465 5000, Fax: + 91 40 2342 0814Email: [email protected]: www.karvy.com

13. Share Transfer System : The Board of Directors have delegated powers to the Registrars & Transfer Agents for effecting share transfers, splits, consolidation, sub-division, issue of duplicate share certificates, rematerialisation and dematerialisation etc., as and when such requests are received.

The Company obtains a half-yearly certificate of compliance with the share transfer formalities as required under Clause 47(c) of the Listing Agreement from a Company Secretary in practice and files a copy of the certificate with the Stock Exchanges. Further, reconciliation of the share capital report is also submitted on a quarterly basis for reconciliation of the share capital of the Company.

14. Investor Services :- Complaints received during the year

Nature of complaints 2010-11 2009-10

Received Cleared Received ClearedRelating to non-allotment, non-receipt of refund cheques arising out of the IPO exercise.

- - 1 1


Relating to complaints from SEBI / Stock Exchanges. 1 1 1 1

Total 24 24 9 9




15. Details of Unclaimed Shares as on 31 March 2011:Pursuant to Clause 5A of the Listing Agreement, the details of shares issued pursuant to the initial public issue of the Company which remains unclaimed and are lying in the escrow account as on 31 March 2011 are as follows:

Year Opening Balance as on 1.4.2010

Cases disposed off during the Financial Year 2010-11

Closing Balance as on 31.3.2011

No. of Cases No. of Shares

No. of Cases

No. of Shares No. of Cases No. of Shares

2010-2011 14 4,055 - - 14 4,055

16. Distribution of Shareholding as on 31 March:

2011 2010

No. of equity shares held

No. of share-holders

% of share-holders

No. of shares held

%share-holding

No. of share-holders

% of share-holders

No. of shares held

% share-holding

1 - 500 25,679 82.79 4,364,105 3.97 30,321 82.18 5,243,831 4.77

501 - 1000 3,260 10.51 2,483,948 2.26 3,883 10.52 2,979,272 2.71

1001 - 2000 1,245 4.01 1,826,129 1.66 1,589 4.31 2,343,967 2.13

2001 - 3000 263 0.85 687,697 0.63 352 0.95 919,417 0.83

3001 - 4000 109 0.35 397,845 0.36 152 0.41 549,024 0.50

4001 - 5000 140 0.45 672,702 0.61 187 0.51 904,811 0.82

5001 - 10000 169 0.55 1,238,392 1.12 200 0.54 1,549,319 1.41

10001 and above

152 0.49 98,329,182 89.39 213 0.58 95,510,359 86.83

Total 31,017 100.00 110,000,000 100.00 36,897 100.00 110,000,000 100.00

17. Categories of Shareholding as on 31 March:

2011 2010

Category No. of shareholders

No. of shares held

% share-holding

No. of shareholders

No. of shares held

% share-holding

Promoters 8* 81,400,000 74.00 8* 80,000,000 72.73


Mutual Funds - - - 1 372,271 0.34

Banks and Financial Institutions

3 40,681 0.04 2 1,501 0.00

FIIs 1 4,998,087 4.54 4 5,994,931 5.45

NRIs 555 672,627 0.61 645 754,721 0.69


Indian Public 29,962 16,140,907 14.68 35,535 17,339,752 15.76

Total 31,017 110,000,000 100.00 36,897 110,000,000 100.00

* Includes 6 shareholders where the beneficial interest of shares lies with VISA International Limited.


56

57



18. Dematerialisation of Shares and Liquidity:

: 99.77% of outstanding equity shares have been dematerialised upto 31 March 2011.

The International Security Identification Number (ISIN) for your Company’s shares is INE286H01012.

The CIN allotted by the Ministry of Corporate

Affairs is L51109OR1996PLC004601.

19. Details on use of Public Funds obtained in the last three years

: No funds had been raised from public in the last three years.

20. Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, conversion date and likely impact on Equity

: Stock OptionsIn terms of the resolution passed by the Members in the Annual General Meeting on 17 August 2010, the Company has granted 900,000 Options to the specified employees of the Company and its subsidiary, VISA BAO Limited at an exercise price of Rs. 46.30 under the Employee Stock Option Scheme (ESOP Scheme 2010). As on 31 March 2011, none of the Options have been vested. The shares covered by such Options are 900,000.

21. Plant Locations :

Kalinganagar Industrial Complex Village Golagaon,

At/P.O. Jakhapura, Near Duburi,

Dist. Jajpur, P.O.Pankapal, Dist.Jajpur,

Orissa 755 019 Orissa

Tel: + 91 6726 242441 Tel: + 91 6726 245470

Fax: + 91 6726 242442 Fax: + 91 6726 245561

22. Investor Correspondence : The Company Secretary,

VISA Steel Limited

VISA House, 8/10, Alipore Road,

Kolkata 700 027

Tel: + 91 33 3011 9000

Fax: + 91 33 3011 9002


In line with the Circular no.SEBI/CFD/DIL/LA/1/2009/24/04 dated 24 April, 2009 issued by Securities and Exchange Board of India, the Company has opened a Demat Account titled “VISA Steel Limited – Demat Suspense Account” comprising shares allotted to investors during the IPO and not yet credited to the investors’ demat account due to mismatch of information / invalid demat account. Investors who have not received credit of shares allotted to them during the IPO are requested to contact the Registrars / Company Secretary for the same.


Partha Mitra

Partner

Membership No. 50553


Lovelock & Lewes

Place: Kolkata Firm Registration Number: 301056E

Date: 30 May 2011 Chartered Accountants

AUDITORS’ CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF

CORPORATE GOVERNANCE UNDER CLAUSE 49 OF THE LISTING AGREEMENT

To The Members of VISA Steel Limited

We have examined the compliance of conditions of Corporate Governance by VISA Steel Limited (the Company)

for the year ended on 31 March 2011, as stipulated in Clause 49 of the Listing Agreement of the said Company with

Stock Exchanges in India.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was

carried out in accordance with the Guidance Note on Certification of Corporate Governance (as stipulated in Clause

49 of the Listing Agreement), issued by the Institute of Chartered Accountants of India and was limited to procedures

and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate

Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

The composition of Board of Directors as regards the number of Independent Directors, as required under Clause

49(IA)(ii) of the Listing Agreement could not be maintained from 17 August 2010 to 28 January 2011 for the reason

stated in note no. 3 on the composition of the Board in the report on Corporate Governance. The composition of the

Board of Directors of the Company as on 31 March 2011 is in compliance with the requirements of the Clause 49 (IA)

of the Listing Agreement.

In our opinion and to the best of our information and according to the explanations given to us and the

representation made by the Directors and the Management, we certify that subject to our remarks in preceding

paragraph the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the

above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the

efficiency or effectiveness with which the Management has conducted the affairs of the Company.

58

59

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ents

Auditors’ Reportto the Members of VISA Steel Limited


Steel Limited (the “Company”) as at 31st March

2011, and the related Profit and Loss Account and

Cash Flow Statement for the year ended on that

date annexed thereto, which we have signed under

reference to this report. These financial statements

are the responsibility of the Company’s Management.

Our responsibility is to express an opinion on these

financial statements based on our audit.

2. We conducted our audit in accordance with the

auditing standards generally accepted in India.

Those Standards require that we plan and perform

the audit to obtain reasonable assurance about

whether the financial statements are free of material

misstatement. An audit includes examining, on a

test basis, evidence supporting the amounts and

disclosures in the financial statements. An audit also

includes assessing the accounting principles used

and significant estimates made by Management,

as well as evaluating the overall financial statement

presentation. We believe that our audit provides a

reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report)

Order, 2003, as amended by the Companies

(Auditor’s Report) (Amendment) Order, 2004

(together the “Order”), issued by the Central

Government of India in terms of sub-section (4A)

of Section 227 of ‘The Companies Act, 1956 of India

(the ‘Act’) and on the basis of such checks of the

books and records of the Company as we considered

appropriate and according to the information and

explanations given to us, we give in the Annexure a

statement on the matters specified in paragraphs 4

and 5 of the Order.

4. Further to our comments in the Annexure referred

to in paragraph 3 above, we report that:

As indicated in Note-7 in Schedule 16, approval

of the Shareholders is awaited for managerial

remuneration paid to the Chairman amounting to

Rs.11.29 millions.

5. Subject to our remarks in paragraph 4 above and

further to our comments in the Annexure referred



explanations which, to the best of our

knowledge and belief, were necessary for the

purposes of our audit;

(b) In our opinion, proper books of account as

required by law have been kept by the Company

so far as appears from our examination of

those books;



(c) The Balance Sheet, Profit and Loss Account and

Cash Flow Statement dealt with by this report

are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and

Loss Account and Cash Flow Statement dealt

with by this report comply with the accounting

standards referred to in sub-section (3C) of

Section 211 of the Act;

(e) On the basis of written representations received

from the directors, as on 31st March 2011 and

taken on record by the Board of Directors, none

of the directors is disqualified as on 31st March

2011 from being appointed as a director in

terms of clause (g) of sub-section (1) of Section

274 of the Act;


and according to the explanations given to us,

the said financial statements together with the

notes thereon and attached thereto give, in the

prescribed manner, the information required

by the Act, and give a true and fair view in

conformity with the accounting principles


(i) in the case of the Balance Sheet, of the

state of affairs of the company as at 31st

March 2011;

(ii) in the case of the Profit and Loss Account,

of the profit for the year ended on that

date; and

(iii) in the case of the Cash Flow Statement, of

the cash flows for the year ended on that

date.

For and on behalf ofLovelock & Lewes

Firm Registration Number: 301056EChartered Accountants

Partha MitraPlace: Kolkata PartnerDate: 30 May, 2011 Membership Number 50553

60

61

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ents

Annexure to Auditors’ Report[Referred to in paragraph 3 of the Auditors’ Report of even date to the members of VISA Steel Limited on the financial statements for the year ended 31 March 2011]

1. (a) The Company is maintaining proper records

showing full particulars, including quantitative

details and situation, of fixed assets.

(b) The fixed assets are physically verified by

the Management according to a phased

programme designed to cover all the items

over a period of three years which, in our

opinion, is reasonable having regard to the size

of the Company and the nature of its assets.

Pursuant to the programme, a portion of the

fixed assets has been physically verified by the

Management during the year and no material

discrepancies between the book records and

the physical inventory have been noticed.

(c) In our opinion and according to the information

and explanations given to us, a substantial part

of fixed assets has not been disposed of by the

Company during the year.

2. (a) The inventory (excluding stocks with third

parties) has been physically verified by the

Management during the year. In respect of

inventory lying with third parties, these have

substantially been confirmed by them. In

our opinion, the frequency of verification is

reasonable.

(b) In our opinion, the procedures of physical

verification of inventory followed by the

Management are reasonable and adequate in

relation to the size of the Company and the

nature of its business.

(c) On the basis of our examination of the inventory

records, in our opinion, the Company is

maintaining proper records of inventory. The

discrepancies noticed on physical verification

of inventory as compared to book records

were not material.

3 (a) The Company has granted unsecured loans,

to one company covered in the register

maintained under Section 301 of the Act.

The maximum amount involved during the

year and the year-end balance of such loans

aggregates to Rs.2.5 Millions.

(b) In our opinion, the rate of interest and other

terms and conditions of such loans are not

prima facie prejudicial to the interest of the

Company.

(d) In respect of the aforesaid loans, the parties are

repaying the principal amounts as stipulated

and are also regular in payment of interest,

where applicable.

(d) In respect of the aforesaid loans, there is no

overdue amount more than Rupees One Lakh.

(e) The Company has not taken any loans, secured

or unsecured, from companies, firms or other

parties covered in the register maintained

under Section 301 of the Act.

4 In our opinion and according to the information

and explanations given to us, there is an adequate

internal control system commensurate with the size

of the Company and the nature of its business for

the purchase of inventory, fixed assets and for the

sale of goods and services. Further, on the basis

of our examination of the books and records of the

Company, and according to the information and

explanations given to us, we have neither come

across nor have been informed of any continuing

failure to correct major weaknesses in the aforesaid

internal control system.

5. (a) In our opinion and according to the information

and explanations given to us, the particulars

of contracts or arrangements referred to in

Section 301 of the Act have been entered in

the register required to be maintained under

that section.

(b) In our opinion and according to the information

and explanations given to us, the transactions

made in pursuance of such contracts or

arrangements and exceeding the value of

Rupees Five Lakhs in respect of any party

during the year have been made at prices

which are reasonable having regard to the

prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from

the public within the meaning of Sections 58A and

58AA of the Act and the rules framed there under.


Annexure to Auditors’ Report

7. In our opinion, the Company has an internal audit

system commensurate with its size and nature of its

business.

8. We have broadly reviewed the books of account

maintained by the Company in respect of products

where, pursuant to the Rules made by the Central

Government of India, the maintenance of cost

records has been prescribed under clause (d) of

sub-section (1) of Section 209 of the Act, and are of

the opinion that prima facie, the prescribed accounts

and records have been made and maintained. We

have not, however, made a detailed examination of

the records with a view to determine whether they

are accurate or complete.

9. (a) According to the information and explanations

given to us and the records of the Company

examined by us, in our opinion, the Company

is generally regular in depositing the

undisputed statutory dues including provident

fund, investor education and protection fund,

employees’ state insurance, income-tax, sales-

tax, wealth tax, service tax, customs duty,

excise duty, cess and other material statutory

dues as applicable with the appropriate

authorities.

(b) According to the information and explanations


examined by us, the particulars of dues of

income-tax, sales-tax and entry-tax as at 31st

March 2011 which have not been deposited on

account of a dispute, are as follows:

Name of the statute

Nature of dues Amount (Rs.Million)

Period to which the amount relates


Income Tax Act, 1961

Wrong valuation of Closing Stock and loans converted to equity

5.49 Assessment Year 2003-04

The Commissioner of Income Tax Appeals, Kolkata, West Bengal


Under valuation of Closing Stock and disallowance of interest




Disallowance of certain expenses


The Commissioner of Income Tax Appeals, Bhubaneswar, Orissa

Central Sales Tax (Orissa) Rules, 1957

Difference in way bill value and invoice value

0.01 Financial Year 1999-2000

The Joint. Commissioner of Sales Tax (Appeal), Jajpur Range, Jajpur Road, Orissa


Non-submission of ‘C’ Form


The Commissioner of Commercial Taxes, Cuttack, Orissa

Orissa Value Added Tax Act, 2005

Reversal of Consignment Sale, Input Tax Credit on Stock



Orissa Entry Tax Act, 1999

Adhoc freight addition for calculating landed cost


The Asst. Commissioner of Sales Tax (Appeals), Jajpur Range, Jajpur Road, Orissa


Entry tax on imported coke

96.63 Financial year 2009-102010-11



Purchase of coal and coke including freight



Orissa Sales Tax. Act 1947

Non-payment of Surcharge



62

63

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ents

Annexure to Auditors’ Report

10. The Company has no accumulated losses as at 31st

March 2011 and it has not incurred any cash losses

in the financial year ended on that date or in the

immediately preceding financial year.

11. According to the records of the Company examined

by us and the information and explanation given to

us, the Company has not defaulted in repayment of

dues to any financial institution or bank or debenture

holders as at the balance sheet date.

12. The Company has not granted any loans and

advances on the basis of security by way of pledge

of shares, debentures and other securities.

13. The provisions of any special statute applicable to

chit fund / nidhi / mutual benefit fund/ societies are

not applicable to the Company.

14. In our opinion, the Company is not a dealer or

trader in shares, securities, debentures and other

investments.

15. In our opinion and according to the information

and explanations given to us, the Company has not

given any guarantee for loans taken by others from

banks or financial institutions during the year.

16. In our opinion, and according to the information

and explanations given to us, on an overall basis,

the term loans have been applied for the purposes

for which they were obtained.


sheet of the Company, in our opinion and according

to the information and explanations given to us,

funds aggregating Rs.1813.78 Million raised on a

short term basis have been used for the purpose of

long-term investment in Fixed Assets.

18. The Company has not made any preferential

allotment of shares to parties and companies

covered in the register maintained under Section

301 of the Act during the year.

19. The Company has not issued any debenture during

the period and accordingly the question of creation

of security or charge does not arise.

20. The Company has not raised any money by public

issues during the year.

21. During the course of our examination of the

books and records of the Company, carried out in

accordance with the generally accepted auditing

practices in India, and according to the information

and explanations given to us, we have neither come

across any instance of fraud on or by the Company,

noticed or reported during the year, nor have we

been informed of such case by the Management.



Partha MitraPlace: Kolkata PartnerDate: 30 May, 2011 Membership Number 50553



Rs. Million

Schedule 31 March 2011 31 March 2010

SOURCES OF FUNDSShareholders’ FundShare Capital 1 1,100.00 1,100.00

Reserves and Surplus 2 2,432.86 3,532.86 2,046.93 3,146.93

Loan FundsSecured Loan 3 13,732.38 11,076.99

Unsecured Loan 3A 348.82 350.39

Deferred Taxation [Refer Note 11 Schedule 16] 597.01 301.10

18,211.07 14,875.41

APPLICATION OF FUNDSFixed Assets 4

Gross Block 9,319.91 9,265.60

Less : Depreciation 1,610.78 1,129.31

Net Block 7,709.13 8,136.29

Capital Work in Progress including Advances 13,905.38 21,614.51 7,700.70 15,836.99

Investments 5 610.40 600.40

Current Assets, Loans and AdvancesInventories 6 3,956.80 3,417.07

Sundry Debtors 7 479.86 648.78

Cash and Bank Balances 8 885.08 833.41


Loans and Advances 9 1,593.81 1,415.77

6,934.90 6,333.18

Less: Current Liabilities and ProvisionsLiabilities 10 10,807.54 7,780.24

Provisions 11 141.20 139.47

10,948.74 (4,013.84) 7,919.71 (1,586.53)

Miscellaneous Expenditure [To the extent not written off or adjusted]

Share Issue Expenses - 24.55

18,211.07 14,875.41

Notes on Accounts 16

The Schedules referred to above form an integral part of the Balance Sheet. This is the Balance Sheet referred to in our report of even date.

For Lovelock & Lewes For and on behalf of the Board of Directors Firm Registration Number - 301056EChartered Accountants Vishambhar Saran Vishal Agarwal

Chairman Managing DirectorPartha MitraPartner Subhra Giri Manoj Kumar DiggaMembership Number 50553 Company Secretary Chief Financial Officer

Place : Kolkata Place :KolkataDate : 30 May 2011 Date :30 May 2011

64

65

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ents

Profit & Loss Account for the year ended 31 March 2011

The Schedules referred to above form an integral part of the Profit & Loss Account.This is the Profit & Loss Account referred to in our report of even date.



Place : Kolkata Place : KolkataDate : 30 May 2011 Date : 30 May 2011

Rs. Million


INCOME Sales 13,404.10 11,983.07

Less: Excise Duty on Sales 345.09 13,059.01 413.65 11,569.42

Other Income 12 269.78 145.41

13,328.79 11,714.83

EXPENDITUREMaterials 13 9,661.27 8,136.60

Expenses 14 1,611.54 1,601.87

Interest (net) 15 709.38 651.40


12,464.24 10,858.05

Profit Before Taxation 864.55 856.78

Provision for Taxation

Current Tax 182.61 96.00

MAT Credit Entitlement (127.74) -

Deferred Tax 295.91 286.62

Profit After Taxation 513.77 474.16

Balance brought forward from previous year 310.10 (35.37)

823.87 438.79

APPROPRIATIONProposed Dividend 110.00 110.00

Income Tax on Proposed Dividend 17.84 18.69

Balance Carried forward to Balance Sheet 696.03 310.10

Basic and Diluted Earning Per Share 4.67 4.31



Rs. Million

31 March 2011 31 March 2010

1 SHARE CAPITALAuthorised160,000,000 Equity Shares of Rs.10/- each 1,600.00 1,600.00

Issued and Subscribed 110,000,000 Equity Shares of Rs.10/- each fully paid up 1,100.00 1,100.00

Note:

(a) Of the above 57,612,167 Equity Shares of Rs.10/- each are held by VISA Infrastructure Limited, the Holding Company [Refer Note 4 Schedule 16].

(b) Of the above 8,360,000 Equity Shares of Rs.10/- each allotted for consideration other than cash pursuant to a scheme of amalgamation without payment being received in cash.

2 RESERVES & SURPLUSCapital Reserve 0.07 0.07

Share Premium Account 1,645.00 1,645.00

General Reserve - As per last account 91.76 91.76

Profit and Loss Account 696.03 310.10

2,432.86 2,046.93

Schedulesto the Balance Sheet

3 SECURED LOANFrom Banks

Cash Credit 1,569.40 404.49

[Refer Note 3(a) Schedule 16]

Term Loan 11,294.89 10,569.36

[Refer Note 3(b) & 3(c) Schedule 16]

Vehicle and Other Loan 90.08 14.46

[Refer Note 3(d) Schedule 16]

From Others

Term Loan 453.06 -


Vehicle and Other Loan


324.95 88.68

13,732.38 11,076.99

3A UNSECURED LOANFrom Banks - Short Term

SIDBI 98.82 100.39

From Others 250.00 250.00

348.82 350.39

66

67

StandaloneOverview


ents

Schedulesto the Balance Sheet (Contd.)

Rs.

Mill

ion

4FI

XE

D A

SS

ET

S

AS

SE

TS

Gros

s Bl

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(At C

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.80

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,136

.29


Rs. Million

31 March 2011 31 March 2010

5 INVESTMENTS - AT COSTLong Tern - Trade - Unquoted Subsidiary Companies

VISA BAO Limited


[Including beneficial interest in 5 Equity Shares of


591.50 591.50

Ghotaringa Minerals Limited

890,000 Equity Shares of Rs.10/- each, fully paid up

[Including beneficial interest in 44,500 Equity Shares of


8.90 8.90

Joint Venture Companies

VISA Urban Infra Lmited 10.00 -


Patrapada Coal Mining Company Private Limited [Rs. Nil (2010: - -

100)] Equity Shares of Rs.10/- each fully paid up

[Rs.Nil (2010:Rs.1,000)

610.40 600.40

8 CASH AND BANK BALANCES Cash in Hand 0.40 0.14

Balance with Scheduled Banks in :



Fixed Deposit Account 865.02 757.70


885.08 833.41

6 INVENTORIES - AT LOWER OF COST OR NET REALISABLE VALUEStores & Spare Parts* 203.29 126.60

Raw Materials 1,395.83 1,757.66




3,956.80 3,417.07

* Including Capital items lying in stores 41.89 71.53

7 SUNDRY DEBTORS - UNSECUREDDebts Outstanding for a period exceeding six months

Considered Good - 35.39


Other debts- Considered Good 479.86 613.39

513.39 649.68


479.86 648.78


68

69

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ents

Rs. Million

31 March 2011 31 March 2010

9 LOANS AND ADVANCES UNSECURED - CONSIDERED GOOD [UNLESS OTHERWISE STATED]Loan to Subsidiary 2.50 -

Advances Recoverable in Cash or in kind or

for value to be received

Considered Good 1,004.05 1,199.31


1,029.99 1,222.81

Less: Provision for Doubtful Advances 25.94 23.50

1,004.05 1,199.31

Deposits with

Customs, Port Trust etc. 6.05 6.56

Others 354.58 97.24


[Net of Provision Rs.448.01 Million (2010: Rs.265.33 Million)]

MAT Credit Entitlement 127.74 -

Advance Payment of Fringe Benefit Tax 4.22 4.22


1,593.81 1,415.77

Due by Directors - -

Maximum Amount due at any time during the year 11.92 16.62

Due by an officer - -


Due by a Private Company in which a Director is a Director 1.21 1.21

10 LIABILITIESSundry Creditors (Refer Note 14 Schedule 16) 9,982.64 6,964.05

Advance from Subsidiary Companies 390.25 393.60

Advance from Customers 87.09 254.80

Other Liabilities 345.09 166.33

Interest accrued but not due on loans 1.34 0.75

Unclaimed dividend 0.79 0.37


10,807.54 7,780.24

11 PROVISIONSLeave Encashment 13.36 10.78

Proposed Dividend 110.00 110.00


141.20 139.47



Rs. Million

31 March 2011 31 March 2010

12 OTHER INCOMEInsurance Claim received 40.81 17.76

Gain on Exchange Fluctuation (net) - 38.43

Liabilities no longer required written back 22.17 -

Provisions no longer required written back 23.34 -

Miscellaneous Income 183.46 89.22

269.78 145.41

13 MATERIALS Raw Material Consumed

Opening Stock 1,757.66 2,143.22

Add: Purchase 7,647.86 6,480.62

Less: Closing Stock 1,395.83 8,009.69 1,757.66 6,866.18

Purchase of Finished Goods 2,397.26 1,447.24

(Increase)/Decrease in Stock

Opening Stock




1,532.81 1,357.61

Less: Closing Stock




2,357.68 (824.87) 1,532.81 (175.20)

Increase/(Decrease) in Excise Duty on Stock 79.19 (1.62)

9,661.27 8,136.60

Schedulesto the Profit and Loss Account

70

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ents

Rs. Million

31 March 2011 31 March 2010

14 EXPENSESSalary, Wages & Bonus 403.42 310.90


Workmen and Staff Welfare Expenses 4.27 428.68 4.00 327.88

Consumption of Stores & Spare Parts 178.88 214.30

Power & Fuel 91.02 161.15

Rent 26.96 31.33

Repairs & Maintenance

- Building 3.24 7.49

- Plant & Machinery 52.68 42.72

- Others 5.15 61.07 5.30 55.51

Insurance 18.99 53.12

Rates & Taxes 15.22 20.11

Material Handling Expenses 165.09 242.47

Customs & Cess 6.36 0.07

Freight & Selling Expenses 229.25 157.54

Loss on Sale of Assets - 1.15

Bank & Finance Charges 182.45 137.65

Loss on Exchange Fluctuation (net) 7.53 -

Bad Debts Written off - 15.86

Provision for Doubtful Debts 33.53 -


Advances Written off - 10.00

Miscellaneous Expenditure Written off 24.55 26.77

Miscellaneous Expenses 123.82 134.46

1,611.54 1,601.87

15 INTEREST (NET)Interest on:

Overdraft Facilities 161.90 116.25

Term Loan 462.94 460.77

Vehicle Loan 3.79 5.31

Others 218.41 847.04 187.46 769.79

Less: Interest Income (Gross) (Tax Deducted at Source Rs.6.83

Million (2010: Rs.6.10 Million)

Bank Fixed Deposits (43.37) (28.55)

Others (94.29) (137.66) (89.84) (118.39)

709.38 651.40

Schedulesto the Profit and Loss Account (Contd.)


Schedulesto the Accounts

1 Statement on Significant Accounting Policies

(a) Principal Accounting Policies

The financial statements have been prepared to comply in all material aspects with all the applicable

accounting principles in India, the applicable accounting standards u/s 211(3C) of the Companies Act,

1956 and the relevant provisions of the Companies Act, 1956. A summary of important accounting

policies which have been applied consistently are set out below. Financial Statements have also been

prepared in accordance with relevant presentational requirements of the Companies Act, 1956 of India.

(b) Basis of Accounting


(c) Fixed Assets

(i) Fixed Assets are stated at their acquisition cost (net of CENVAT credit), where applicable together

with any incidental expenses of acquisition/installation. Cost of acquisition includes borrowing

costs that are directly attributable to the acquisition/construction of qualifying assets. Impairment

loss, if any, ascertained as per the Accounting Standard u/s 211 (3C) of the Companies Act, 1956.

(ii) Depreciation on fixed assets, other than leasehold land, is provided on Straight Line Method in

accordance with Schedule XIV of the Companies Act, 1956. Leasehold land is amortized over the

period of lease. No depreciation is provided for freehold land.

(iii) Computer software has been capitalised as Intangible Assets and are being amortised in equal

installments over its useful life of three years.

(iv) Profit or loss on disposal of fixed assets is recognised in Profit and Loss Account.

(d) Investments

Investments of long term nature is stated at cost, less adjustment for diminution, other than temporary,

in the value thereof.

(e) Inventories

Inventories are stated at cost (net of CENVAT credit) or net realisable value, whichever is lower. Cost

is determined on weighted average basis and comprises of expenditure incurred in the normal course

of business in bringing such inventories to their location and includes, where applicable appropriate

overheads. Obsolete, slow moving and defective inventories are identified at the time of physical

verification and where necessary, provision is made for such inventories.

(f) Sales

Sales represent the invoiced value of goods and services supplied, net of value added tax (VAT)/sales

tax but inclusive of excise duty.

(g) Transactions in Foreign Currencies

Transactions in foreign currencies are recorded in rupees by applying the exchange rate prevailing on

the date of transaction. Transactions remaining unsettled are translated at the rate of exchange ruling

at the end of the year. Exchange gain or loss arising on settlement/translation is recognised in the

Profit and Loss Account. Premium or discount on forward contracts are amortised over the life of the

contract. Foreign exchange forward contracts are revalued at the balance sheet date and the exchange

difference between the spot rate at the date of the contract and the spot rate on the balance sheet date

is recognised as gain/loss in the Profit & Loss Account.

16 NOTES ON ACCOUNTS

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ents

16 NOTES ON ACCOUNTS (CONTD.)

Schedulesto the Account (Contd.)

(h) Employee Benefits

(I) Post Retirement Benefits:

(a) Provident Fund

The Company Operates defined contribution schemes Like Provident Fund. The Company

makes regular contribution to Provident Fund which are fully funded and administered by

Government and are Independent of Company’s finance. Contributions are recognized in

Profit & Loss Account on an accrual basis.

(b) Gratuity

Defined Benefit Plans like Gratuity Schemes are also maintained by the Company. The

Company has taken out a policy with Life Insurance Corporation of India (LICI) for future

payment of Gratuity liability to its employees. Gratuity liability is determined at the end of each

year by LICI in accordance with the method stated in the Accounting Standard 15 (Revised

2005) on “Employee Benefits” and such liability has been provided for in the accounts. Annual

Premium determined by LICI is contributed.

(II) Other Employee Benefits:

(a) Leave Encashment

Leave encashment benefit is determined on the basis of independent actuarial valuation, at

the end of each year in accordance with the method stated in AS 15 (Revised 2005) and such

liability is provided for in the accounts and charge is recognized in the Profit and Loss Account.

(b) Other Employee Benefits are accounted for on accrual basis.

(i) Deferred Tax

Deferred Tax is recognised using the liability method, at the current rate of taxation, on all timing differences

to the extent it is probable that a liability or asset will crystallise. Deferred Tax Assets are recognised

subject to consideration of prudence and are periodically reviewed to reassess realisation thereof.

(j) Borrowing Cost

Borrowing costs attributable to acquisition and/or construction of qualifying assets are capitalized as

a part of the cost of such assets upto the date when such assets are ready for its intended use. Other

borrowing costs are charged to Profit & Loss Account.

(k) Leases

Assets acquired as leases where a significant portion of the risk and rewards of ownership are retained

by the lessor are classified as operating leases. Lease rentals are charged to the Profit and Loss Account

on accrual basis.

(l) Miscellaneous Expenditure - To the extent not written off or adjusted

Public issue expenses have been amortized in equal installment over a period of five years.

2 (a) Claim against the Company not acknowledged as debt: (i) In respect of a charter party dispute between VISA Comtrade (Asia) Limited (the “Charterer”) and

Transfield Shipping Inc., Panama (the “Owner of the Vessel - Prabhu Gopal”), the said Owner of

the vessel has filed a civil suit in the Hon’ble Calcutta High Court against the Company and the

Charterer and claimed relief for a decree for US$ 0.30 Million to be expressed in Indian Currency

at such rate of exchange and/or on such terms as the Court may deem fit and proper, Injunction,

Costs or other reliefs. The company has not accepted the claim as it was not a party to the said

Agreement and hence cannot be made a party to the suit. The Hon’ble Court passed interim order

dated 11 May 2005 & 20 June 2005, restraining the Company and the Charterer from withdrawing

any amount from a specified bank account without leaving a balance for a sum of Rs.12.50 Million,


which has been set aside by the bank from cash credit limit of the Company. The Company has

been legally advised that the above interim order has been expired due to efflux of time and has

not been extended by the Hon’ble Calcutta High Court.

(ii) Applications have been filed by the legal heirs of a deceased employee of the Company and his

sister respectively, who died in a road accident while travelling in the Company’s vehicle for their

personal work, claiming a compensation of Rs.6.05 million and interest @ 18% per annum and

Rs.0.55 million respectively. The Company has contested the claims, which are currently pending

before the Motor Accident Claims Tribunal, Bhubaneswar and the Additional District Judge cum

3rd Motor Accident Claims Tribunal, Rourkela respectively.Rs. Million

31 March 2011 31 March 2010

(b) Estimated amount of Contracts remaining to be executed on Capital Account and not provided for (net of advance Rs.417.10 Million ; 2010: Rs.47.73Million)

1,298.91 2,578.33

(c) Contingent liability not provided for in respect of:


(ii) Income Tax matter on Appeal 63.63 63.63

(iii) Sales Tax matter on Appeal 74.24 18.83

(iv) Value Added Tax matter on Appeal 20.37 20.37

(v) Entry Tax matter on Appeal 170.01 50.59

(vi) Customs Duty matter on Imported Goods 34.86 -

(d) The Company has obtained licenses from the Government of India under EPCG Scheme for import of

machineries at a reduced Customs Duty and thereby saved an amount of Rs.384.40 million towards

duty upto 31 March 2011(2010 : Rs.522.17 Million). As per the requirement under the said Scheme,

the Company is required to export amounting to Rs.2986.46 million (2010 : Rs.4177.32 Million) within

the specified periods, failing which, the Company has to make payment to the Government of India

equivalent to the duty benefit enjoyed along with interest. The Company is confident that the above

export obligation will be met during the specified period.

3 (a) The working capital facilities from banks are secured by way of first hypothecation charge ranking

pari-passu with other banks on the whole of the current assets, namely, stock of raw material, stock

in process, semi finished & finished goods, stores & spares not relating to plant & machinery (i.e.

consumable stores & spares), bills receivable & book debts and all other movables, both present and

future, whether installed or not provided that the charge in favour of the banks on the movable plant

& machinery, machinery spares, tools & accessories shall be subject to the charges created and/or to



74

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ents

be created thereon in favour of the term lenders to secure the long term borrowings/loans for capital

expenditure. The working capital facilities are also secured by second mortgage charge on the land

situated at Kalinganagar Industrial Complex , District Jajpur, Orissa together with building and structures

thereon and all plant & machinery attached to the earth or permanently fastened to anything attached

to the earth along with corporate guarantee of VISA International Limited and personal guarantee of

Managing Director of the Company.

(b) Term Loan from Banks & Financial Institutions other than General Corpus Corporate Loan is secured

by way of first charge on the land and fixed assets situated at Kalinganagar Industrial Complex,

District Jajpur, Orissa together with hereditaments and premises and building, plant and machineries

permanently affixed thereto and other erections thereon both present and future at Plant at Kalinganagar

Industrial Complex, District Jajpur, Orissa and second charge on all the current assets of the Company

ranking pari-passu with other banks along with Corporate Guarantee of VISA International Limited and

personal guarantee of Managing Director of the Company.

General Corpus Corporate Loan is secured by first charge on all the movable fixed assets of the

Company and second charge on all the current assets of the Company both present and future on pari

passu basis alongwith other term lenders.

(c) Subordinate Debt Facility from a Consortium of banks and financial institutions through IL&FS Financial

Services Limited acting as Facilitator is secured by way of a second mortgage & charge on pari-passu

basis with the Working Capital Lenders of all such immovable properties and interest in the immovable

properties including buildings, structures, plant and machinery embedded therein, present & future in

the industrial land situated at Kalinganagar Industrial Complex, District Jajpur, Orissa, and by way of

second charge on pari-passu basis with the Term Loan lenders on all the movable current assets and

movable plant & machinery, spares, tools, accessories both present & future along with Corporate

Guarantee of VISA International Limited. The registration of the above charge is pending.

(d) Equipment Finance and other loan from banks and financial Institutions are secured by way of

hypothecation of vehicles/machinery taken under the loan arrangement.

4 Pursuant to an inter se transfer of shares between the Promoter Group Companies, VISA Minmetal AG

transferred its entire shareholding to a Promoter Group Company, VISA Infrastructure Limited subsequent

to which VISA Infrastructure Limited became the holding Company of the Company w.e.f. 30 April 2010.




Rs. Million

MT31 March

2011 MT31 March

2010

5 a) Quantitative Information

The Company manufactures Pig Iron, Coke, Ferro Chrome, Sponge Iron, Chrome Concentrate and Chrome Powder, generates power and trades in Coal and Coke. The relevant particulars are as under:

i) Licensed Capacity N.A. N.A.

ii) Installed Capacity (As certified by the management)

Pig Iron 225,000 225,000

Chrome Concentrate 100,000 100,000

Chrome Powder 100,000 100,000

Coke 400,000 400,000

Ferro chrome 50,000 50,000

Sponge Iron 300,000 300,000

Power generated at Captive Power Plant (MKWH) 438 438

iii) Opening Stock

Pig Iron 2,066 34.73 7,216 129.42

Chrome Concentrate 7,920 138.16 10,589 117.85

Chrome Powder 92 0.35 92 0.35

Coal & Coke 22,630 258.57 - -

LAM Coke 48,259 613.93 43,213 620.10

Ferro chrome 1,068 38.20 4,607 190.49

Sponge Iron 5,144 61.03 4,934 -

1,144.97 1,058.22

iv) Production

Pig Iron (Note 1) 42,454 135,540

Chrome Concentrate - 2,412

LAM Coke (Note 2) 265,621 327,154

Ferro chrome (Note 3) 42,187 45,771

Sponge Iron (Note 4) 134,538 139,299


(Note 5)

1. Does not include By-products generated 3,779 14,884

2. Includes used for own consumption 52,548 124,576

Does not include Production By way of Conversion

51,763 -

Does not include By-products generated 18,842 26,447

Does not include By-products generated by way of conversion

4,113 -


4. Including Trial Run Production - 9,335

5. Includes used for Captive Consumption (MKWH)

201 215



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ents

v) Purchases

Coal & Coke 334,733 2,397.26 219,152 1,438.27

Sponge Iron - - 740 8.97

2,397.26 1,447.24

vi) Closing Stock *

Pig Iron 12,595 293.19 2,066 34.73

Chrome Concentrate - - 7,920 138.16


Coal & Coke 32,133 463.95 22,630 258.57

LAM Coke 44,341 724.49 48,259 613.93

Ferro chrome 2,384 119.92 1,068 38.20

Sponge Iron 10,333 168.52 5,144 61.03

1,770.42 1,144.97

* After adjustment of shortage/excess

vii) Sales

Pig Iron 31,327 835.02 137,882 2,562.29

Chrome Concentrate 5,600 71.66 - -

Chrome Powder - - - -

Coal & Coke 325,337 2,230.99 196,022 1,221.45

LAM Coke 224,746 4,803.18 212,444 3,312.33

Ferro chrome 40,872 2,518.25 49,536 2,517.48

Sponge Iron 129,349 2,277.92 124,184 1,731.08

By-products - 590.08 - 611.86

13,327.10 11,956.49

Power Generated at Captive Power Plant (MKWH) 25 77.00 9 26.58

Total Sales 13,404.10 11,983.07

Rs. Million

MT31 March

2011 MT31 March

2010




Rs. Million

MT31 March

2011 MT31 March

2010

b) Details of Raw Material ConsumedChrome Ore 107,125 1,179.15 110,094 744.77

Iron Ore 387,340 1,712.34 530,279 1,419.58

Coke (Note 1) 4,006 59.38 2,761 43.12

Coal 695,187 4,928.77 771,096 4,495.62

Others 130.05 163.09

8,009.69 6,866.18

Note:

1. Does not include captive consumption of coke 52,548 124,576

c) Consumption of Raw Material % %

Indigenous 43 3,462.43 60 4,108.35

Imported 57 4,547.26 40 2,757.83

100 8,009.69 100 6,866.18

d) Stores & Spares Consumed % %

Indigenous 100 178.88 100 214.30

Imported - - - -

100 178.88 100 214.30

e) CIF Value of Imports

Raw Material 3,747.43 2,762.86


Capital Goods 2,000.58 38.08

7,587.26 3,616.94

f) Expenditure in Foreign Currency

Travelling 6.71 3.03


Others 1.16 0.98

69.23 78.58

g) Earning in Foreign Currency

Export Sales 2,194.52 1,952.94

h) Miscellaneous Expenses include Auditors’ Remuneration:Audit Fees 1.10 0.85

Tax Audit Fees 0.15 0.10

Other Services 0.75 0.55

Re-imbursement of expenses 0.11 0.07

2.11 1.57

i) Addition/ Adjustment of Fixed Assets and Capital Work in Progress include borrowing cost amounting to Rs.Nil (2010 ; Rs.90.63 Million) and Rs.850.45 Million (2010: Rs.510.69 Million) respectively.



78

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6 Earning Per Share Profit/(Loss) After Tax (A) 513.77 474.16

Weighted average number of Rs.10 equity shareoutstanding during the year (B)

110 ,000,000 110 ,000,000

Basic and Diluted Earning per Share (A/B) (Rs.) 4.67 4.31

7 Directors Remuneration Salaries, Allowances & Bonus 34.74 39.78

Retirement benefits 3.67 2.96

Perquisites 2.28 3.59

Commission 18.11 11.82

58.80** 58.15#

Director’s Sitting Fees 0.94 1.24

Total 59.74 59.39

Profit for the year before taxation as per Profit & Loss Account

864.55 856.78

Add: Depreciation 482.05 468.18

Provision for Doubtful Debts and Advances 51.67 12.50

Directors' Remuneration for the current year 58.80 592.52 42.23 522.91

1,457.07 1,379.69

Less: Depreciation u/s 350 of the Companies Act, 1956 482.05 482.05 468.18 468.18

975.02 911.51

Commission to Executive Directors 15.11 8.82

Commission to Non Executive Directors* 3.00 3.00

18.11 11.82

* Within the overall limit of 1% of Net Profit 9.75 9.12

**Remuneration includes an amount of Rs.11.29 Million paid to the Whole-time Director designated as Chairman w.e.f 15 December 2010, which is subject to the approval of the Shareholders of the Company.

# Includes Rs.15.92 Million towards 2008 - 09 Managerial Remuneration paid during 2009 -10 after obtaining the approval of Central Govt for waiver of recovery.

Rs. Million

MT31 March

2011 MT31 March

2010




8 During the year the Joint Venture Company Patrapada Coal Mining Co. Private Limited is dissolved with effect from 05 October 2010.

9 Investment in Joint Venture The Company has invested in VISA Urban Infra Limited during the year vide the consortium agreement with

VISA Infrastructure Limited and VISA Realty Limited to start up a project of star hotel and convention centre at Naya Raipur, Chhatisgarh.

The Company’s interests in the joint venture is reported as Long Term Investment in Schedule 5 and stated at cost. However, the Company’s share of each of the assets and liabilities etc. (each without elimination of the effect of transactions between the Company and the joint venture) in the Joint Venture are:




Rs. Million

31 March 2011 31 March 2010

Amounts in respect of Joint Venture

Income 0.01 -

Expenses 0.01 -

Assets

Capital Work in Progress 10.82 -

Current Assets 0.42 -

Liabilities

Current Liabilities 1.32 -

10 Operating Leases 9.75 8.22

Rent [Including minimum lease payment Rs.Nil (2010: Rs. Nil)] The company leasing arrangements which is in the nature of operating lease are in respect of various premises having a tenure of 3 years.There is no obligation for renewal of these agreements and are renewable by mutual consent on mutually agreeable terms

11 Deferred Tax Provision has been made in the accounts in accordance with the requirements of the Accounting Standard on “Taxes on Income” (AS 22) issued by The Institute of Chartered Accountants of India. The major components of the deferred tax Liabilities/(Assets) based on the tax effects of timing differences are as follows:



Public Issue Expenses - 8.16

784.02 744.16

Deferred Tax Assets


Unabsorbed Loss Carried Forward - (76.99)

Others (33.34) (18.32)

(187.01) (443.06)

597.01 301.10



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12 Related Party DisclosuresNature of Relationship Name of the Related Parties:

Holding Company VISA Minmetal AG (Upto 30 April 2010)

VISA Infrastructure Limited

Subsidiaries Ghotaringa Minerals Limited

VISA BAO Limited

Joint Venture Company VISA Urban Infra Limited

Patrapada Coal Mining Company Pvt Ltd (Upto 5 October 2010)



VISA Cement Limited

VISA Comtrade Limited

VISA Power Limited


Key Managerial Personnel Mr. Vishambhar Saran

Mr. Vishal Agarwal


Relatives of Key Managerial Personnel Mrs. Saroj Agarwal

Mr. Vikas Agarwal

Mr. Vivek Agarwal

Mr. Ashok Agarwal

Enterprise over which Relatives of Key

Managerial Personnel having significant

influence


VISA Power (M.P) Limited

VISA Realty Limited

Far East Trading AG

VISA Minmetal AG

VISA Minmetal Limited




VISA Trust



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82

83

StandaloneOverview


ents

Details of Transactions with Related Parties


Rs. Million

Nature of Transactions Name of the Related Party 31 March 11 31 March 10

Rent Paid VISA International Limited 7.21 6.77

VISA Infrastructure Limited 3.59 0.81

Purchase of Goods VISA Comtrade Limited 1,181.47 1,268.55

VISA Resources Pte Limited - 152.08

Freight paid for the above VISA Bulk Shipping Pte Limited 570.73 781.80

VISA Comtrade Limited 66.03 -

Sale of Goods VISA Comtrade Limited 1,339.62 1,369.64

VISA Resources Pte Limited 1,254.61 -

Purchase of Fixed Assets VISA Comtrade Limited - 1.69

VISA International Limited - 0.87

Hire Charges VISA Comtrade Limited 50.88 -

Professional Fees VISA Infrastructure Limited 11.25 -

Interest Received VISA Comtrade Limited 36.18 -

Interest Paid VISA Power Limited 17.48 -

Travelling Expenses VISA Aviation Limited 2.04 11.33

Sitting Fees Mrs. Saroj Agarwal 0.08 0.10

Mr. Vikas Agarwal 0.17 0.14

Remuneration Mr. Vishambhar Saran 27.49 17.46

Mr. Vishal Agarwal 22.16 16.86

Mr. Basudeo Prasad Modi 6.15 4.89

Investment made VISA Urban Infra Limited 10.00 -

VISA BAO Limited - 295.75

Sale of Fixed assets VISA Power Limited 0.33 -

VISA Aviation Limited - 1.37

Reimbursement of Expenses (Net) VISA Infrastructure Limited 20.80 -

VISA BAO Limited 3.36 -

VISA Comtrade Limited - 35.56

VISA Urban Infra Limited 6.65 -

Advance Received against CWIP VISA Power Limited 160.00 -

VISA Comtrade Limited 80.00 -

Advance Received VISA BAO Limited - 393.60

Security Deposit Given VISA International Limited - 20.00


Refund of Deposits VISA International Limited 7.50 -

Unsecured Loans Given Ghotaringa Minerals Limited 2.50 -

Unsecured Loan taken VISA Power Limited - 250.00




13 Employee Benefits The Company maintains provident fund with Regional Provident Fund Commissioner, contributions are made

by the company to the Fund, based on the current salaries. In the provident fund schemes, contribution are also made by the employees. An amount of Rs.15.94 million (2010 : Rs.12.98 million) has been charged to the Profit and Loss Account on account of the above defined contribution schemes.

The Company operates defined benefit schemes like gratuity and leave encashment. The Company has taken out a policy with Life Insurance Corporation of India (LICI) for future payment of gratuity liability to its employees. Annual actuarial valuations are carried out by LICI in compliance with Accounting Standard 15 (Revised 2005) on Employee Benefits. Annual contributions are also made by the Company. Employees are not required to make any contribution.

The Company also provides for leave encashment benefit to the employees. Annual actuarial valuations are carried out by an independent actuary in compliance with Accounting Standard 15 (Revised 2005) on Employee Benefits. Employees are not required to make any contribution.

Rs. Million

Gratuity31 March

Leave Encashment31 March

2011 2010 2011 2010

Amount recognised in the Balance Sheet are as follows:

Present value of funded obligation 11.48 8.36 - -

Fair Value of Plan Assets 16.35 12.47 - -

(4.87) (4.11) - -

Unrecognized past service cost - - - -

Present value of un-funded obligation - - 13.36 10.78

Net (Asset)/Liability (4.87) (4.11) 13.36 10.78

Amount recognised in the Profit and Loss Account and charged to Salaries, Wages & Bonus and Contribution to Provident & Other Funds under Schedule 14 are as follows:

Current Service cost 3.27 2.84 1.66 2.20

Interest cost 0.67 0.52 0.89 0.72

Expected Return on Plan Assets (1.13) (0.84) - -

Net actuarial loss/(gain) recognised during the year (0.41) (1.36) 1.01 1.42

Total 2.40 1.16 3.56 4.34

Reconciliation of opening and closing balances of the present value of the obligations:

Opening defined benefit obligation 8.36 6.49 10.78 7.32


Interest cost 0.67 0.52 0.89 0.72

Actuarial loss/(gain) (0.41) (1.36) 1.01 1.42

Benefits paid (0.42) (0.14) (0.98) (0.88)

Closing Defined Benefit Obligation 11.47 8.35 13.36 10.78

Reconciliation of opening and closing balances of the fair value of plan assets:

Opening fair value of Plan Assets 12.47 9.29 - -

Expected Return on Plan Assets 1.13 0.84 - -

Contributions by employer 3.16 2.48 0.98 0.88

Benefits paid (0.42) (0.14) (0.98) (0.88)

Closing Fair Value on Plan Assets 16.34 12.47 - -



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Rs. Million

Gratuity31 March


2011 2010 2011 2010

Actual Return on Plan Assets [Plan Assets consist of funds maintained with LICI for gratuity scheme]

1.13 0.84 - -

Principal Actuarial Assumption Used:

Discount Rates 8% 8% 8.25% 8%

Expected Return on Plan Assets 8% 8% - -

Expected Salary increase rates 4.75% 6% 5% -

Mortality Rates LIC (1994-96)mortality tables

LIC (1994-96)mortality tables

The estimates of future salary increase considered in the actuarial valuation takes into account factors like

inflation, seniority, promotion and other relevant factors. The expected return on plan assets is based on

actuarial expectation of the average long term rate of return expected on investments of the funds during

the estimated terms of the obligations.

The contribution expected to be made by the Company for the year ending 31 March 2012 cannot be readily

ascertainable and therefore not disclosed.

Rs. Million

31 March 2011 31 March 2010

14 Details of dues to Micro and Small enterprises: Principal Interest Principal Interest

(i) The amount remaining unpaid to any supplier as at the end of the accounting year;

52.00 - 187.74 -

(ii) the amount of interest paid by the buyer in terms of section 18, along with the amounts of the payment made to the supplier beyond the appointed day during accounting year;

(iii) the amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act;

- - - -

(iv) the amount of interest accrued and remaining unpaid at the end of accounting year; and

- - - -

(v) the amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as deductible expenditure under section 23

- - - -

The above information has been compiled in respect of parties to the extent to which they could be identified as

Micro and Small Enterprises under Micro, Small and Medium Enterprises Development Act, 2006 on the basis of

information available with the Company.




15 As at 31 March 2011, the company had net outstanding foreign currency exposures & its corresponding forward cover as given below:

Rs. Million

2011 2010Currency F.C INR F.C INR

Total Foreign Currency Exposure (Net) USD 88.50 3,951.57 71.33 3,309.52 EURO 16.16 1,021.67 - -

SCF (0.09) (4.37) - -

Covered by Forward Contracts USD 49.85 2,291.69 27.67 1,248.89 EURO 14.41 847.41 - -

16 Share - based Compensation The shareholders of the Company in Annual General Meeting held on 17 August 2010, has approved an

Employee Stock Options Scheme 2010 (the ‘’ESOP Scheme 2010”), formulated by the company, under which the Company may issue 55,00,000 options to its permanent employees and directors of the company, its subsidiaries and its holding company, as determined by the Remuneration Committee on its own discretion and in accordance with the SEBI Guidelines.

Each options when exercised would be converted into one fully paid - up equity share of Rs.10/- each of the Company. The ESOP Scheme 2010 is administered by the Remuneration Committee of the Board of Directors of the Company (‘’the Committee”). Under the ESOP Scheme 2010, the Committee had granted 900,000 options to its eligible employees during the year ended 31 March 2011. The following share-based payment arrangements were in existence during the reporting periods.


Number of Options Granted 900000


Vesting Plan Graded vesting - between 12.5% & 25% based on continuity &

performance

Vesting Period Not earlier than one year and not later than five years from the date of

grant of the options in one or more tranches.






Particulars StockOptions

(Numbers)

Range of exercisePrices

(Rs.)

Weighted Average

Exercise Price

(Rs.)

Remaining contractual years

Outstanding at the beginning of the year -

Granted during the year 900,000 46.30 46.30 6.00

Forefeited during the year - - - -


Lapsed during the year - - - -

Outstanding at the end of the year 900,000 46.30 46.30 6.00

Exerciseable at the end of the year -

No stock options were entitled to be exercised during the year.



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Fair Valuation:

At grant date , the estimated fair value of stock options granted was Rs.19.56. The fair valuation was carried out by an independent valuer using Black & Scholes model. The various inputs and assumptions considered in the pricing model at grant date for the stock options granted under ESOP Scheme 2010 are as under.

Particulars Tranche INumber of options granted 900000Grant Date 4 February, 2011Risk Free interest rate(%) 7.86 - 8.00Option Life(Years) 2.5 - 5.5Expected Volatility (%) 54.42 - 55.30 Expected Dividend Yield (%) 2.77Share price at options grant date 46.30

Had the compensation cost for the stock options granted been recognised based on fair value at the date of

grant in accordance with Black & Scholes Model, the proforma amount of net profit and earnings per share

of the company would have been as under:

(Rs. Million)

Net Profit as Reported 513.77

Less: Dividend on Preference Shares (including Tax) -

Net Profit attributable to Equity shareholders 513.77

Add: Compensation cost under ESOP Scheme 2010 as per intrinsic value included in

the Net Profit

-

Less: Compensation cost under ESOP Scheme 2010 as per Fair Value 1.40

Proforma Net Profit 512.37

Less: Tax adjustment for earlier years -

Proforma Profit after Tax adjustment for earlier years 512.37

Weighted average number of Basic equity shares outstanding 110.00

Weighted average number of Diluted equity shares outstanding 110.14

Face Value of Equity Shares 10.00

Reported Earning per Share( EPS)

Basic EPS (in Rs.) 4.67

Diluted EPS (in Rs.) 4.67




17 As the Company’s business activity falls within a single business segment, viz. “Iron & Steel products”,

the disclosure requirements of Accounting Standard (AS-17) on “Segment Reporting”, notified by the

Companies (Accounting Standards) Rules, 2006, are not applicable.

18 Previous year’s figures have been rearranged/re-grouped wherever necessary.







Rs. Million

Particulars 31 March 2011 31 March 2010

A. CASH FLOW FROM OPERATING ACTIVITIES:Net profit before Tax and Exceptional Item 864.55 856.78

Adjusted for:


Interest Expense 847.04 769.79


(Profit)/Loss on Sale of Fixed Assets - 1.15

Miscellaneous Expenditure written off 24.55 26.77

Provision for Bad & Doubtful Debts 33.53 -

Bad Debts Written Off - 15.86

Advance Written off - 10.00


Provision for Doubtful debts written back (23.34) -

Liabilities no longer required written back (net) (22.17) -

Unrealised Foreign exchange (Gain)/Loss (192.36) (107.26)

Operating profit before working capital changes 1,894.33 1,935.38

Adjustments for changes in working capital :

- (Increase)/Decrease in Sundry Debtors 134.90 160.26

- (Increase)/Decrease in Loans and Advances (11.28) (205.47)

- (Increase)/Decrease in Inventories (569.37) 199.90

- Increase/(Decrease) in Trade and Other Payables 1,424.75 (259.79)

Cash generated from operations 2,873.33 1,830.27

- Taxes Paid (150.99) (88.72)

Net cash from operating activities 2,722.34 1,741.55

Cash Flow Statement for the year ended 31 March 2011

88

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Cash Flow Statement for the year ended 31 March 2011 (Contd.)

B. CASH FLOW FROM INVESTING ACTIVITIES:Purchase of fixed assets (4,479.22) (3,079.33)

Proceeds from Sale of fixed assets 0.33 3.42

Purchase of investments (10.00) (295.75)

Interest Received 136.45 118.80

Net cash used in investing activities (4,352.44) (3,252.86)

C. CASH FLOW FROM FINANCING ACTIVITIES:Proceeds from long term borrowings 2,215.19 2,538.72

Repayment of long term borrowings (724.70) (270.99)

Proceeds from short term borrowings 1,166.42 233.23

Interest Paid (846.45) (860.79)

Dividend Paid (110.00) -

Dividend Tax Paid (18.69) -

Net Cash used in financing activities 1,681.77 1,640.17

Net Increase in Cash & Cash Equivalents 51.67 128.86

Cash and cash equivalents as at 1 April 2010 833.41 704.55

Cash and cash equivalents as at 31 March 2011 885.08 833.41

Notes to Cash Flow Statement

Rs. in Million


1. Cash and cash equivalents consist of cash in hand and balance with banks and deposits with banks.

31 March 2011 31 March 2010

Cash in Hand 0.40 0.14

Balance with Scheduled Bank in :





Cash & cash equivalents 885.08 833.41

2. The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard on ‘Cash Flow Statements (AS-3)’ issued by the Institute of Chartered Accountants of India.

This is the Cash Flow Statement referred to in our report of even date.





Balance Sheet AbstractAND COMPANY’S GENERAL BUSINESS PROFILE

I REGISTRATION DETAILS Registration No. : 4 6 0 1 State Code : 1 5

Balance Sheet Date : 3 1 0 3 2 0 1 1Date Month Year

II. CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousands)

Public Issue : N I L Right Issue : N I L

Bonus Issue : N I L Private Placement : N I L

Iii. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands)

Total Liabilities : 2 9 1 5 9 8 0 9 Total Assets : 2 9 1 5 9 8 0 9

Sources of Funds

Paid-up Capital : 1 1 0 0 0 0 0 Reserves & Surplus : 2 4 3 2 8 6 3

Secured Loans : 1 3 7 3 2 3 8 3 Unsecured Loans : 3 4 8 8 2 3

Deferred Taxation : 5 9 7 0 0 9

Application of Funds

Net Fixed Assets : 2 1 6 1 4 5 0 6 Investments : 6 1 0 4 0 0

Net Current Assets : (-) 4 0 1 3 8 3 8 Misc. Expenditure : N I L

Accumulated Losses : N I L

IV. PERFORMANCE OF COMPANY (Amount In Rs. Thousands)

Turnover * : 1 3 3 2 8 7 9 1 Total Expenditure : 1 2 4 6 4 2 3 7

Profit Before Tax : 8 6 4 5 5 5 Profit After Tax : 5 1 3 7 7 2

Earning per share in Rs. : 4 . 6 7 Dividend % : 1 0

* includes other income

V. GENERIC NAMES OF PRINCIPAL PRODUCTS/SERVICES OF COMPANY (as Per Monetary Terms)

Item Code No. : 7 2 0 1 1 0 0 0 Product Description : Pig Iron

Item Code No. : 2 7 0 4 0 0 3 0 Product Description : Lam Coke

Item Code No. : 7 2 0 2 4 1 0 0 Product Description : Ferro Chrome

Item Code No. : 7 2 0 3 1 0 0 0 Product Description : Sponge Iron


Vishambhar Saran Vishal Agarwal Chairman Managing Director

Subhra Giri Manoj Kumar DiggaCompany Secretary Chief Financial Officer

Place : KolkataDate : 30 May 2011

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Subhra Giri Manoj Kumar DiggaCompany Secretary Chief Financial Officer

Place : KolkataDate : 30 May 2011

Statement Pursuant To Section 212 (3) Of The Companies Act, 1956

Ghotaringa Minerals Limited (GML), a company incorporated under the Companies Act, 1956 became subsidiary of

the Company with effect from 30 September 2005. As on 31 March 2011, 89% of the issued and subscribed equity

share capital of GML was held by the Company alongwith its nominees.

VISA BAO Limited (VBL), a Company incorporated under the Companies Act, 1956 became subsidiary of the Company

with effect from 23 May, 2008. As on 31 March 2011, 65% of the issued and subscribed equity share capital of VBL was

held by the Company alongwith its nominees.

Name of the subsidiary GhotaringaMinerals Ltd

VISA BAO Ltd



a Number 890,000 59,150,000



3 Net aggregate amount of profits/(losses) of the subsidiary for the above financial year of the subsidiary so far as they concern members of the company

a Dealt with in the accounts of the Company for the year ended 31 March 2011 (Rs.)

1,905 42,560

b Not dealt with in the accounts of the Company for the year ended 31 March 2011 (Rs.)

NIL NIL

4 Net aggregate amount of profits/(losses) for previous years of the subsidiary since it became a subsidiary so far as they concern members of the company

a Dealt with in the accounts of the Company for the year ended 31 March 2011 (Rs.)

284,896 21,088,377

b Not dealt with in the accounts of the Company for the year ended 31 March 2011 (Rs.)

N.A N.A


Auditors’ Reportto the Board of Directors of VISA Steel Limited on the Consolidated Financial Statements

1. We have audited the attached consolidated balance

sheet of VISA Steel Limited (the “Company”) and its

subsidiaries and its joint venture; hereinafter referred

to as the “Group” (refer Note 1(b) on Schedule 15

to the attached consolidated financial statements) as

at 31st March, 2011, the related consolidated Profit

and Loss Account and the consolidated Cash Flow

Statement for the year ended on that date annexed


report. These consolidated financial statements are

the responsibility of the Company’s management.

Our responsibility is to express an opinion on these











and significant estimates made by management,




3. We did not audit the financial statements of one

subsidiary and one jointly controlled entity included

in the consolidated financial statements, which

constitute total assets of Rs 23.92 Million and net

assets of Rs 22.55 Million as at 31st March 2011,

total revenue of Rs.0.05 Million, net profit of Rs

0.004 Million and net cash outflows amounting to Rs

0.38 Million for the year then ended. The financial

statements and other financial information of the

subsidiary have been audited by other auditors

whose report has been furnished to us, and our

opinion on the consolidated financial statements

to the extent they have been derived from such

financial statements is based solely on the report of

such other auditors.

4. We report that the consolidated financial

statements have been prepared by the Company’s

Management in accordance with the requirements

of Accounting Standard (AS) 21 - Consolidated

92

93



Consolidated

Auditors’ Reportto the Board of Directors of VISA Steel Limited on the Consolidated Financial Statements

Financial Statements, and Accounting Standard

(AS) 27 - Financial Reporting of Interests in Joint

Ventures notified under sub-section 3C of Section

211of the Companies Act, 1956.

As indicated in Note-7 in Schedule 15, approval

of the Shareholders is awaited for managerial

remuneration paid to the Chairman amounting to

Rs.11.29 Millions.

5. Based on our audit and on consideration of reports

of other auditors on separate financial statements and

on the other financial information of the component of

the Group, as referred to above, and to the best of our

information and according to the explanations given

to us, Subject to our remark in 4 above in our opinion,

the attached consolidated financial statements give a

true and fair view in conformity with the accounting

principles generally accepted in India:

(a) in the case of the consolidated Balance Sheet, of the

state of affairs of the Group as at 31st March, 2011;

(b) in the case of the consolidated Profit and Loss

Account, of the profit of the Group for the year

ended on that date: and

(c) in the case of the consolidated Cash Flow

Statement, of the cash flows of the Group for

the year ended on that date.



Partha MitraPlace: Kolkata PartnerDate: May 30, 2011 Membership Number 50553



Rs. Million


SOURCES OF FUNDSShareholders’ FundShare Capital 1 1,100.00 1,100.00

Reserves and Surplus 2 2,465.32 3,565.32 2,079.46 3,179.46

Minority Interest 336.97 336.95

Loan Funds

Secured Loan 3 13,732.38 11,076.99

Unsecured Loan 3A 348.82 350.39

Deferred Taxation [Refer Note 11 Schedule 15] 597.16 301.11

18,580.65 15,244.90

APPLICATION OF FUNDS

Fixed Assets 4

Gross Block 9,323.50 9,267.63

Less : Depreciation 1,611.21 1,129.41

Net Block 7,712.29 8,138.22

Capital Work in Progress including Advances 14,464.63 7,728.42

Add - Share of Joint Venture [Refer Note 9 Schedule 15] 10.82 22,187.74 0.04 15,866.68

Current Assets, Loans and Advances

Inventories 5 3,956.80 3,417.06

Sundry Debtors 6 479.86 648.78

Cash and Bank Balances 7 1,062.10 1,364.73



7,145.31 6,882.27

Less: Current Liabilities and Provisions

Liabilities 9 10,611.28 7,389.13

Provisions 10 141.20 139.47

10,752.48 (3,607.17) 7,528.60 (646.33)

Miscellaneous Expenditure [To the extent not written off or adjusted]

Share Issue Expenses 0.08 24.55

18,580.65 15,244.90

Notes on Consolidated Accounts 15

The Schedules referred to above form an integral part of the Consolidated Balance Sheet. This is the Consolidated Balance Sheet referred to in our report of even date.




94

95



Consolidated

Consolidated Profit & Loss Account for the year ended 31 March 2011

The Schedules referred to above form an integral part of the Consolidated Profit & Loss Account. This is the Consolidated Profit & Loss Account referred to in our report of even date.




Rs. Million


INCOMESales 13,404.10 11,983.07


Other Income 11 269.83 145.41

13,328.84 11,714.83

EXPENDITURE

Materials 12 9,661.27 8,136.60

Expenses 13 1,626.17 1,613.24

Interest (net) 14 694.33 602.83


12,464.15 10,820.95

Profit /(Loss) Before Taxation and Minority Interest

864.69 893.88



Mat Credit Entitlement (127.74) -

Deferred Tax 296.05 350.97 286.62 395.25

Profit /(Loss) after Taxation before shareof Minority Interest

513.72 498.63

Minority Interests 0.02 8.53

Net Profit / (Loss) 513.70 490.10

Balance brought forward from previous years 331.51 (29.90)

845.21 460.20

APPROPRIATION



Balance Carried forward to Balance Sheet 717.37 331.51




Rs. Million

31 March 2011 31 March 2010

1 SHARE CAPITALAuthorised160,000,000 Equity Shares of Rs.10/- each 1,600.00 1,600.00

Issued and Subscribed 110,000,000 Equity Shares of Rs.10/- each fully paid up 1,100.00 1,100.00

Note:

(a) Of the above 57,612,167 Equity Shares of Rs.10/- each

are held by VISA Infrastructure Limited, the Ultimate

Holding Company.

(b) Of the above 8,360,000 Equity Shares of Rs.10/- each

allotted for consideration other than cash pursuant to

a scheme of amalgamation without payment being

received in cash.




Profit and Loss Account 717.37 331.51

2,465.32 2,079.46

Add: Share of Joint Venture [Refer Note 9 Schedule15] - -

2,465.32 2,079.46

3 SECURED LOANFrom Banks

Cash Credit


1,569.40 404.49

Term Loan


11,294.89 10,569.36



90.08 14.46

From Others

Term Loan


453.06 -



324.95 88.68

13,732.38 11,076.99


SIDBI 98.82 100.39

From Others 250.00 250.00

348.82 350.39

Schedulesto the Consolidated Balance Sheet

96

97



Consolidated

Schedulesto the Consolidated Balance Sheet (Contd.)

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Rs. Million

31 March 2011 31 March 2010

5 INVENTORIES - AT LOWER OF COST OR NET REALISABLE VALUEStores & Spare Parts* 203.29 126.59

Raw Materials 1,395.83 1,757.66




3,956.80 3,417.06

* Including Capital items lying in stores 41.89 71.53

6 SUNDRY DEBTORS - UNSECURED Debts Outstanding for a period exceeding six months

Considered Good - 35.39


Other debts - Considered Good 479.86 613.39

513.39 649.68


479.86 648.78


Balance with Scheduled Banks in



Fixed Deposit Account 1,030.31 1,243.31


1,061.68 1,364.73

Add - Share of Joint Venture [Refer Note 9 Schedule 15] 0.42 -

1,062.10 1,364.73

98

99



Consolidated

8 LOANS AND ADVANCESUNSECURED - CONSIDERED GOOD [UNLESS OTHERWISE STATED]Advances Recoverable in Cash or in kind or


Considered Good 1,033.94 1,200.12


1,059.88 1,223.62

Less:Provision for Doubtful Advances 25.94 23.50

1,033.94 1,200.12

Deposits with


Others 354.63 97.29

Advance Payment of Income Tax


96.82 106.14

MAT Credit Entitlement 127.74 -


[Net of Provision Rs.15.16 Million (2010: Rs.15.16 Million)] 1,623.40 1,414.26

Add - Share of Joint Venture [Refer Note 9 Schedule 15] - -

1,623.40 1,414.26

9 LIABILITIES Sundry Creditors (Refer Note 14 Schedule 15) 10,170.81 6,964.55



Interest accrued but not due on loans 1.34 0.75



Add - Share of Joint Venture [Refer Note 9 Schedule 15] 1.32 0.04

10,611.28 7,389.13

10 PROVISIONS Leave Encashment 13.36 10.78



141.20 139.47

Rs. Million

31 March 2011 31 March 2010



Schedulesto the Consolidated Profit and Loss Account

Rs. Million

31 March 2011 31 March 2010

11 OTHER INCOME

Insurance Claim received 40.81 17.76

Gain on Exchange Fluctuation (Net) - 38.43

Liabilities no longer required written back 22.17 -

Provisions no longer required written back 23.34 -


269.83 145.41

12 MATERIALS

Raw Material Consumed

Opening Stock 1,757.66 2,143.22

Add: Purchase 7,647.86 6,480.62

Less: Closing Stock 1,395.83 8,009.69 1,757.66 6,866.18

Purchase of Finished Goods 2,397.26 1,447.24

(Increase)/Decrease in Stock

Opening Stock




1,532.81 1,357.61

Less: Closing Stock




2,357.68 (824.87) 1,532.81 (175.20)

Increase/(Decrease) in Excise Duty on Stock 79.19 (1.62)

9,661.27 8,136.60

100

101



Consolidated

Rs. Million

31 March 2011 31 March 2010

13 EXPENSES

Salary, Wages & Bonus 412.52 316.77


Workmen and Staff Welfare expenses 4.62 438.38 4.00 333.96


Power & Fuel 91.02 161.15

Rent 26.96 31.33




- Others 5.56 61.48 5.56 55.76




Customs & Cess 6.36 0.07


Loss on Sale of Assets - 1.15


Loss on Exchange Fluctuation (net) 7.53 -

Bad Debts Written off - 15.86

Provision for Doubtful Debts 33.53 12.50

Provision for Doubtful Advances 18.14 -

Advances Written off - 10.00



1,626.16 1,613.24

Add: Share of Joint Venture [Refer Note 9 Schedule 15] 0.01 -

1,626.17 1,613.24



Term Loan 462.94 460.77


Other 218.41 847.04 187.46 769.79

Less: Interest Income (Gross) [Tax Deducted at

Source Rs.11.45 Million (2010; Rs.11.35

Million)]


Others (137.55) (152.70) (118.40) (166.96)

Add: Share of Joint Venture [Refer Note 9

Schedule 15]

(0.01) -

694.33 602.83

Schedulesto the Consolidated Profit and Loss Account (Contd.)


Schedulesto the Consolidated Accounts

1. Statement on Significant Accounting Policies

(a) Basis of Consolidation

The Consolidated financial statements comprises of the financial statements of VISA Steel Limited

(the Holding Company) and its subsidiaries and joint venture. The Consolidated financial statements

are prepared in accordance with Accounting Standard 21 on “Consolidated Financial Statements” and

Accounting Standard 27 on “Financial Reporting of Interests in Joint Ventures”.

The Consolidated financial statements are prepared on the following basis:

(i) The financial statements of the Holding Company and its Subsidiary Companies have been

combined on a line by line basis by adding together like items of assets, liabilities, income and

expenses. The intra-group balances, intra-group transactions and unrealised profit or losses

thereon have been fully eliminated.

(ii) The financial statements of the subsidiaries and joint venture used in the consolidation are drawn

up to the same reporting date as that of the Holding Company.

(iii) The excess value of the consideration given over the net value of the identifiable assets acquired

in one of the subsidiary company is recognised as “Goodwill” and is not being amortised.

(iv) Joint venture have been accounted for using the proportionate consolidation method whereby a

venturer’s share of each of the assets and liabilities of the jointly controlled entity is accounted for

on a prorata basis.

(b) The subsidiary companies and joint venture considered in the Consolidated financial statements are:

Country ofIncorporation

% of Voting power held as at 31 March 2011 [Including Beneficial Interest]

Subsidiaries

VISA BAO Limited India 65%

Ghotaringa Minerals Limited India 89%

Joint Venture

VISA Urban Infra Ltd. India 26%

(c) Principal Accounting Policies

The Consolidated Financial Statements have been prepared in accordance with applicable Accounting

Standards in India. A summary of Important accounting policies are set out below.

(d) Basis of Accounting


(e) Fixed Assets

(i) Fixed Assets are stated at their purchase cost (net of CENVAT credit), where applicable together



loss, if any, ascertained as per the Accounting Standard u/s 211(3C) of the Companies Act, 1956.

(ii) Depreciation on fixed assets, other than leasehold land, is provided on Straight Line Method in

accordance with Schedule XIV of the Companies Act, 1956. Leasehold land is amortized over the

period of lease. No depreciation is provided for freehold land.

15 NOTES ON ACCOUNTS

102

103



Consolidated


Schedulesto the Consolidated Accounts (Contd.)

(iii) Computer software has been capitalised as Intangible Assets and are being amortised in equal

installments over its useful life of three years.


(f) Inventories

Inventories are stated at cost (net of CENVAT credit) or net realisable value, whichever is lower. Cost

is determined on weighted average basis and comprises of expenditure incurred in the normal course

of business in bringing such inventories to their location and includes, where applicable appropriate

overheads. Obsolete, slow moving and defective inventories are identified at the time of physical

verification and where necessary, provision is made for such inventories.

(g) Sales

Sales represent the invoiced value of goods and services supplied, net of value added tax (VAT)/sales

tax but inclusive of excise duty.

(h) Transactions in Foreign Currencies


the date of transaction. Transactions remaining unsettled are translated at the rate of exchange ruling

at the end of the year. Exchange gain or loss arising on settlement/translation is recognised in the

Profit and Loss Account. Premium or discount on forward contracts are amortised over the life of the

contract. Foreign exchange forward contracts are revalued at the balance sheet date and the exchange

difference between the spot rate at the date of the contract and the spot rate on the balance sheet date

is recognised as gain/loss in the Profit & Loss Account.

(i) Employee Benefits


(a) Provident Fund

The Companies operate defined contribution schemes like Provident Fund. The Company

makes regular contribution to provident funds which are fully funded and administered by

Government and are independent of Company’s finance. Contributions are recognized in


(b) Gratuity

Defined Benefit Plans like Gratuity Schemes are also maintained by the Companies. The

Companies have taken out a policy with Life Insurance Corporation of India (LICI) for future

payment of gratuity liability to its employees. Gratuity liability is determined as at the end

of each year by LICI in accordance with the method stated in the Accounting Standard

15 (Revised 2005) on “Employee Benefits” and such liability has been provided for in the

accounts. Annual Premium determined by LICI is contributed.


(a) Leave Encashment

Leave encashment benefit is determined on the basis of independent actuarial valuation, at

the end of each year in accordance with the method stated in AS 15 (Revised 2005) and such

liability is provided for in the accounts and charge is recognized in the Profit and Loss Account.

(b) Other Employee Benefits are accounted for on accrual basis.

(j) Deferred Tax





(k) Borrowing Cost

Borrowing costs attributable to acquisition and/or construction of qualifying assets are capitalized as

a part of the cost of such assets upto the date when such assets are ready for its intended use. Other

borrowing costs are charged to Profit & Loss Account.

(l) Leases

Assets acquired as leases where a significant portion of the risk and rewards of ownership are retained

by the lesser are classified as operating leases. Lease rentals are charged to the Profit and Loss Account

on accrual basis.

(m) Miscellaneous Expenditure - To the extent not written off or adjusted

Public issue expenses in respect of Holding Company have been amortized in equal installment over a

period of five years.

2. (a) Claim against the Holding Company not acknowledged as debt: (i) In respect of a charter party dispute between VISA Comtrade (Asia) Limited (the “Charterer”) and

Transfield Shipping Inc., Panama (the “Owner of the Vessel - Prabhu Gopal”), the said Owner of the

vessel has filed a civil suit in the Hon’ble Calcutta High Court against the Holding Company and

the Charterer claimed relief for a decree for US$ 0.30 Million to be expressed in Indian Currency

at such rate of exchange and/or on such terms as the Court may deem fit and proper, Injunction,

Costs or other reliefs. The holding company has not accepted the claim as it was not a party to the

said Agreement and hence cannot be made a party to the suit. The Hon’ble Court passed interim

order dated 11 May 2005 & 20 June 2005, restraining the Holding Company and the Charterer from

withdrawing any amount from a specified bank account without leaving a balance for a sum of

Rs.12.50 Million, which has been set aside by the bank from cash credit limit of the Holdlng

Company. The Holding Company has been legally advised that the above interim order has been

expired due to efflux of time and has not been extended by the Hon’ble Calcutta High Court.

(ii) Applications have been filed by the legal heirs of a deceased employee of the Holding Company

and his sister respectively, who died in a road accident while travelling in the Holding Company’s

vehicle for their personal work, claiming a compensation of Rs.6.05 Million and interest @ 18% per

annum and Rs.0.55 Million respectively. The Holding Company has contested the claims, which

are currently pending before the Motor Accident Claims Tribunal, Bhubaneswar and the Additional

District Judge cum 3rd Motor Accident Claims Tribunal, Rourkela respectively.Rs. Million

31 March 2011 31 March 2010

(b) Estimated amount of Contracts remaining to be executed on Capital Account and not provided for (net of advance Rs.417.10 Million; 2010: Rs.47.73 Million )

1,783.58 3,344.36

(c) Contingent liability not provided for in respect of the Holding Company:






(vi) Customs Duty matter on Imported Goods 34.86 -



104

105



Consolidated

(d) The Holding Company has obtained licenses from the Government of India under EPCG Scheme

for import of machineries at a reduced Customs Duty and thereby saved an amount of Rs.384.40

Million towards duty upto 31 March 2011(2010 : Rs.522.17 Million). As per the requirement under

the said Scheme, the Holding Company is required to export amounting to Rs.2986.46 Million (2010 :

Rs.4177.32 Million) within the specified periods, failing which, the Holding Company has to make

payment to the Government of India equivalent to the duty benefit enjoyed along with interest. The

Holding Company is confident that the above export obligation will be met during the specified period.

(e) In respect of Subsidiary Ghotaringa Minerals Limited, Prior Period income includes travelling expenses

directly relating to exploration for minerals amounting to Rs.0.02 Million and which has been transferred

to Exploration Expenses under Capital Work in Progress.

3. (a) In respect of the Holding Company working capital facilities from banks are secured by way of first

hypothecation charge ranking pari-passu with other banks on the whole of the current assets, namely,

stocks of raw material, stock in process, semi finished & finished goods, stores & spares not relating

to plant & machinery (i.e. consumable stores & spares), bills receivable & book debts and all other

movables, both present and future, whether installed or not provided that the charge in favour of the

banks on the moveable plant & machinery, machinery spares, tools & accessories shall be subject

to the charges created and/or to be created thereon in favour of the term lenders to secure the long

term borrowing/loans for capital expenditure. The working capital facilities are also secured by second

mortgage charge on the land situated at Kalinganagar Industrial Complex , District Jajpur, Orissa together

with building and structures thereon and all plant & machinery attached to the earth or permanently

fastened to anything attached to the earth along with corporate guarantee of VISA International Limited

and personal guarantee of Managing Director of the Holding Company.

(b) In respect of the Holding Company term loan from bank other than General Corpus Corporate loan is

secured by way of first charge on the land and fixed assets situated at Kalinganagar Industrial Complex,

District Jajpur, Orissa together with hereditaments and premises and building, plant and machineries

permanently affixed thereto and other erections thereon both present and future at Plant at Kalinganagar

Industrial Complex, District Jajpur, Orissa and second charge on all the current assets of the Holding

Company ranking pari-passu with other banks along with Corporate Guarantee of VISA International

Limited and personal guarantee of Managing Director of the Holding Company.

In respect of the Holding Company General Corpus Corporate Loan is secured by first charge on all

the movable fixed assets of the Holding Company and second charge on all the current assets of the

Holding Company both present and future on pari-passu basis along with other term lenders.

(c) In respect of the Holding Company, Subordiante Debt Facility from a Consortium of banks and financial

institutions through IL&FS Financial Services Limited acting as Facilitator is secured by way of a second

mortgage & charge on pari-passu basis with the Working Capital Lenders of all such immovable

properties and interest in the immovable properties including buildings, structures, plant and machinery

embedded therein, present & future in the industrial land situated at Kalinganagar Industrial Complex,

District Jajpur, Orissa, and by way of second charge on pari passu basis with the Term Loan lenders on

all the movable current assets and movable plant & machinery, spares, tools, accessories both present

& future along with Corporate Guarantee of VISA International Limited. The registration of the above

charge is pending.

(d) In respect of the Holding Company, Equipment Finance and other loan from banks and financial

Institutions are secured by way of hypothecation of vehicles/machinery taken under the loan

arrangement.




Rs. Million

31 March 2011 31 March 2010

6. Consolidated Earning Per ShareConsolidated Profit / (Loss) After Tax (A) 513.70 490.10

Weighted average number of Rs.10 equity share

outstanding during the year (B)

110,000,000 110,000,000

Basic and Diluted Earning per Share (A/B) (In Rs.) 4.67 4.46

7. Directors Remuneration (in respect of the Holding Company)Salaries, Allowances & Bonus 34.74 39.78



Commission 18.11 11.82

58.80** 58.15#

Directors’ Sitting Fees 0.94 1.24

Total 59.74 59.39

** Remuneration includes an amount of Rs.11.29 Million paid to the whole time director designated as chairman

wef 15 December 2010 is subject to the approval of the the Shareholders of the Company.

# Includes Rs.15.92 Million towards 2008 - 09 Managerial Remuneration paid during 2009 -10 after obtaining the

approval of Central Govt for waiver of recovery.

8. During the year the Joint Venture Company Patrapada Coal Mining Co. Private Limited is dissolved with

effect from 05 October 2010.

9. Investment in Joint Venture The Holding Company has invested in VISA Urban Infra Limited during the year vide the consortium

agreement with VISA Infrastructure Limited and VISA Realty Limited to start up a project of star hotel and

convention centre at Naya Raipur, Chhatisgarh.




4. Pursuant to an inter se transfer of shares between the Promoter Group Companies, VISA Minmetal AG

transferred its entire shareholding to a Promoter Group Company, VISA Infrastructure Limited subsequent

to which VISA Infrastructure Limited became the holding Company of the Company w.e.f. 30 April 2010

5. Addition/ Adjustment of Fixed Assets and Capital Work in Progress include borrwing cost amounting to

Rs. Nil (2010 ; Rs.90.63 Million) and 850.45 Million (2010: Rs.510.69 Million) respectively



106

107



Consolidated

Rs. Million

31 March 2011 31 March 2010

10. Operating Leases (in respect of the Holding Company) 9.75 8.22

Rent [Including minimum lease payment Rs.Nil (2010;

Rs.Nil)]. The company leasing arrangements which is in

the nature of operating lease are in respect of various

premises having a tenure of 3 years.There is no obligation

for renewal of these agreements and are renewable by

mutual consent on mutually agreeable terms.

11. Deferred Tax Provision has been made in the accounts

in accordance with the requirements of the Accounting

Standard on “Taxes on Income” (AS 22) issued by The

Institute of Chartered Accountants of India. The major

components of the deferred tax Liabilities/(Assets) based

on the tax effects of timing differences are as follows:



Public Issue Expenses - 8.16

784.23 744.21

Deferred Tax Assets


Unabsorbed Loss Carried Forward - (76.99)

Others (33.40) (18.36)

(187.07) (443.10)

597.16 301.11




12. Related Party DisclosuresNature of Relationship Name of the Related Parties

Ultimate Holding Company VISA Minmetal AG (Upto 30 April 2010)




VISA Cement Limited


VISA Power Limited



Mr. Vishal Agarwal



Mr. Vikas Agarwal

Mr. Vivek Agarwal

Mr. Ashok Agarwal

Enterprise over which Relatives of Key VISA Aviation Limited

Managerial Personnel having significant VISA Power (M.P) Limited

influence VISA Realty Limited

Far East Trading AG

VISA Minmetal AG

VISA Minmetal Limited




VISA Trust



108

109



ConsolidatedD

etai

ls o

f Tra

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Rel

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ties

Rs.

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13. Employee Benefits In respect of the Holding Company and its subsidiary VISA BAO Limited

Provident fund is maintained with Regional Provident Fund Commissioner and contributions are made by

the Companies to the Fund, based on the current salaries. In the provident fund schemes, contribution are

also made by the employees. An amount of Rs.16.19 Million (2010; Rs.13.01 Million) has been charged to

the Profit and Loss Account on account of the above defined contribution schemes.

The Companies operate defined benefit schemes like gratuity and leave encashment. The Holding Company

has taken out a policy with Life Insurance Corporation of India (LICI) for future payment of gratuity liability to

its employees. Annual actuarial valuations are carried out by LICI in compliance with Accounting Standard

15 (Revised 2005) on Employee Benefits. Annual contributions are also made by the Company. Employees

are not required to make any contribution.In respect of VISA BAO Limited, the Company is in the process of

taking out benefit schemes like gratuity and annual actuarial valuations are being carried out by Life Insurance

Corporation of India (LICI) in compliance with Accounting Standard 15 (Revised 2005) on Employee Benefits.

The Companies also provide for leave encashment benefit to the employees. Annual actuarial valuations

are carried out by an independent actuary in compliance with Accounting Standard 15 (Revised 2005) on

Employee Benefits. Employees are not required to make any contribution.

In respect of the Subsidiary Company, Ghotaringa Minerals Limited and the Joint Venture Company VISA

Urban Infra Limited, the relevant provisions of Employees Provident Fund and Miscellaneous Provisions Act,

1952, Employees State Insurance Act, 1948, Payment of Gratuity Act, 1972 and Payment of Bonus Act, 1965

are not applicable to the Company.

Rs. Million

31 March 2011 31 March 2010

14. In respect of the Holding Company: Principal Interest Principal Interest

Details of dues to Micro and Small enterprises

(i) The amount remaining unpaid to any supplier as at the end of accounting year;

52.00 - 187.74 -


- - - -


- - - -


- - - -


- - - -



110

111



Consolidated

The above information has been compiled in respect of parties to the extent to which they could be identified as

Micro and Small Enterprises under Micro, Small and Medium Enterprises Development Act, 2006 on the basis of

information available with the Holding Company.

In respect of the Subsidiary Companies:

There are no Micro, Small and Medium Enterprises, as required to be disclosed under the “Micro, Small and

Medium Enterprise Development Act, 2006” identified by the Subsidiary Company on the basis of information

available with the Subsidiary Companies.

15. Share - based Compensation in respect of the holding company The shareholders of the Company in Annual General Meeting held on 17, August 2010, had approved an Employee

Stock Options Scheme 2010 (the ‘’ESOP Scheme 2010”), formulated by the company, under which the Company

may issue 55,00,000 options to its permanent employees and directors of the company, its subsidiaries and its

holding company, as determined by the Remuneration Committee on its own discretion and in accordance with the

SEBI Guidelines.

Each options when exercised would be converted into one fully paid - up equity share of Rs.10/- each of the

Company. The ESOP Scheme 2010 is administered by the Remuneration Committee of the Board of Directors of

the Company (‘’the Committee”). Under the ESOP Scheme 2010, the Committee had granted 900,000 options to its

eligible employees during the year ended 31 March 2011. The following share-based payment arrangements were

in existence during the reporting periods.




Vesting Plan Graded vesting - between 12.5% & 25% based on continuity & performance

Vesting Period Not earlier than one year and not later than five years from the date of grant of the options in one or more tranches.


Exercise Price (Rs.per Option) 46.30







Particulars Stock Options (Numbers)

Range of exercise Prices (Rs.)

Weighted Average

Exercise Price (Rs.)

Remainingcontractual

years

Outstanding at the beginning of the year -

Granted during the year 900,000 46.30 46.30 6.00

Forefeited during the year - - - -


Lapsed during the year - - - -

Outstanding at the end of the year 900,000 46.30 46.30 6.00

Exerciseable at the end of the year -

No stock options were entitled to be exercised during the year.

Fair Valuation:

At grant date, the estimated fair value of stock options granted was Rs.19.56. The fair valuation was carried out by

an independent valuer using Black & Scholes model. The various inputs and assumptions considered in the pricing

model at grant date for the stock options granted under ESOP Scheme 2010 are as under.

Particulars Tranche I

Number of options granted 900000


Risk Free interest rate(%) 7.86 - 8.00

Option Life(Years) 2.5 - 5.5



Share price at options grant date (in Rs.) 46.30

Had the compensation cost for the stock options granted been recognised based on fair value at the date of grant in

accordance with Black & Scholes Model, the proforma amount of consolidated net profit and consolidated earnings

per share of the company would have been as under:



112

113



Consolidated

Rs. Million

Net Profit as Reported 513.70

Less: Dividend on Preference Shares (including Tax) -

Net Profit attributable to Equity shareholders 513.70

Add: Compensation cost under ESOP Scheme 2010 as per intrinsic value included in the Net Profit -

Less: Compensation cost under ESOP Scheme 2010 as per Fair Value 1.40

Proforma Net Profit 512.30

Less: Tax adjustment for earlier years -

Proforma Profit after Tax adjustment for earlier years 512.30

Weighted average number of Basic equity shares outstanding 110.00

Weighted average number of Diluted equity shares outstanding 110.14

Face Value of Equity Shares 10.00

Reported Earning per Share (EPS)






18. Previous year’s figures have been rearranged/re-grouped wherever necessary.



Place: Kolkata Place: KolkataDate: 30 May 2011 Date: 30 May 2011

17. As at 31 March 2011, the Holding Company had net outstanding foreign currency exposures & its corresponding

forward cover as given below:

Rs. Million

2011 2010

Currency F.C INR F.C INR

Total Foreign Currency Exposure (Net) USD 88.50 3,951.57 71.33 3,309.52

EURO 16.16 1,021.67 - -

SCF (0.09) (4.37) - -

Covered by Forward Contracts USD 49.85 2,291.69 27.67 1,248.89

EURO 14.41 847.41 - -

16. As the Holding Company’s and its subsidiaries business activity falls within a single business segment, viz. “Iron

& Steel products”, the disclosure requirements of Accounting Standard (AS-17) on “Segment Reporting”, notified

by the Companies (Accounting Standards) Rules, 2006, are not applicable.




Rs. Million


A. CASH FLOW FROM OPERATING ACTIVITIES:Net profit before Tax and Exceptional Item 864.69 893.88

Adjusted for:




Loss on Sale of Fixed Assets - 1.15


Provision for Bad & Doubtful Debts written back (23.34) -

Liability no longer required written back (22.17) -

Bad Debts Written Off - 15.86

Advance Written off - 10.00


Provision for Bad and Doubtful Debts 33.53 -

Unrealised Foreign exchange (Gain)/loss (192.36) (107.26)

Operating profit before working capital changes 1,879.75 1,924.01 Adjustments for changes in working capital :

- (Increase)/Decrease in Sundry Debtors 134.90 160.25

- (Increase)/Decrease in Loans and Advances (37.79) (205.86)

- (Increase)/Decrease in Inventories (569.37) 199.90

- Increase/(Decrease) in Trade and Other Payables 1,616.99 (658.17)


- Taxes Paid (153.07) (103.34)

Net cash from operating activities 2,871.41 1,316.79

B. CASH FLOW FROM INVESTING ACTIVITIES:Purchase of Fixed Assets (5,023.14) (3,103.41)



Net cash used in investing activities (4,855.82) (2,934.72)

Consolidated Cash Flow Statement for the year ended 31 March 2011

114

115



Consolidated


1 Cash and cash equivalents consist of cash in hand and balance with banks and deposits with banks

31 March 2011 31 March 2011

Cash and Cheques in hands 0.42 0.15

Balance with Schedule Bank in





Cash & cash equivalents 1,062.10 1,364.73

2 The above Consolidated Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the

Accounting Standard on ‘Cash Flow Statements (AS-3)’ issued by the Institute of Chartered Accountants of

India.

C. CASH FLOW FROM FINANCING ACTIVITIES:Proceeds from Long Term borrowings 2,215.20 2,538.72

Repayment of Long Term borrowings (724.70) (270.99)

Proceeds from Short Term borrowings 1,166.42 233.23

Interest Paid (846.45) (860.79)

Dividend Paid (110.00) -

Dividend Tax Paid (18.69) -

Net cash used in Financing Activities 1,681.78 1,640.17

Net Increase in Cash & Cash Equivalents (302.63) 22.24

Cash and cash equivalents as at 1 April 2010 1,364.73 1,342.49

Cash and cash equivalents as at 31 March 2011 1,062.10 1,364.73

Rs. Million


Consolidated Cash Flow Statement for the year ended 31 March 2011 (Contd.)

This is the Consolidated Cash Flow Statement referred to in our report of even date.





Dear Members,

Your Directors have pleasure in presenting the 3rd

Annual Report and Audited statement of Accounts of

VISA BAO Limited for the year ended 31 March 2011.

The Company was incorporated on 1 February 2008

as a subsidiary of VISA Steel Limited, India (VSL). The

present issued, paid-up & subscribed equity Capital of

the Company is Rs. 91,00,00,000/- (Rupees Ninety One

Crore only) and the share holding of the Joint Venture

Partners is in the following ratio: VSL – 65% and Baosteel

Resources Co. Ltd., China – 35%.

OperationsYour Company is setting up a 100,000 TPA Ferro Chrome

Plant with 4 Submerged Arc Furnaces of 16.5 MVA each

at Kalinganagar in Orissa.

The Company has made significant progress towards

implementation of the project including equipment

ordering, basic and detailed engineering, civil and

structural work etc. The project execution has become

faster due to the land, power and water infrastructure

being provided by VISA Steel Limited. The Company has

engaged a qualified team of professionals and reputed

contractors for timely execution of the Project. The

Company is scheduled to complete the Project by end

March 2012. The Company has also made applications

for grant of mineral concessions for chrome ore to the

Government of Orissa.

DividendSince your Company has not yet commenced any

commercial operations, your Directors have not

recommended any dividend for the period under

reference.

DirectorsMr. Vivek Agarwal, Mr. Chao Ji and Mr. Zhou Qinghua,

Directors are liable to retire by rotation at the forthcoming

Annual General Meeting and being eligible, offer

themselves for reappointment.

In compliance with the Listing Agreement applicable to

VISA Steel Limited (VSL), the Holding Company, VSL

had nominated Mr. Shiv Dayal Kapoor, Independent

Director of VSL, to be appointed as a Director in place of

Mr. Manoj Kumar Digga pursuant to Section 262 of the

Companies Act, 1956. Mr. Kapoor has been appointed

as a Director w.e.f 29 October 2010. Mr. Digga resigned

from the Directorship of the Board of the Company w.e.f.

15 July 2010.

The Board of Directors of the Company in their meeting

held on 29 October 2010 reappointed Mr. Basudeo

Prasad Modi as Managing Director of the Company for

a further term of 2 years w.e.f. from 30 December 2010

pursuant to the provisions of Sections 198, 269, 309, 316

read with Schedule XIII & other applicable provisions of

the Companies Act, 1956. Since Mr. Modi’s appointment

is subject to approval of Members’ of the Company in

the forthcoming Annual General Meeting, a resolution to

this effect forms part of the Annual General Meeting’s

Notice.

The Board of Directors of your Company currently

consists of 8 Directors, comprising of 5 directors

nominated by VISA Steel Limited (Mr. Vishambhar Saran,

Mr. Shiv Dayal Kapoor, Mr. Vishal Agarwal, Mr. Vivek

Agarwal and Mr. Basudeo Prasad Modi) and 3 directors

nominated by Baosteel Resources Co. Limited (Mr. Xia

Jiang, Mr. Chao Ji and Mr. Zhou Qinghua).

Financial Results (Rs.)

Particulars Year ended 31-03-2011

Year ended31-03-2010

Gross Revenue (Interest Income) 15,152,677 48,339,804

Expenditure 14,894,212 11,372,556

Profit before Taxation 258,465 36,967,248

Provision for Taxation 192,989 12,606,661

Profit after Taxation 65,477 24,360,587

Profit brought forward from previous year 32,443,658 8,083,071

Balance carried forward to Balance Sheet 49,628,794 32,443,658

Your Company is in Project implementation stage, hence there are no operational revenues or profits, the period under review being the fourth year since incorporation.


116

117



VISA BAO Limited

Directors’ Responsibility StatementIn terms of provisions of Section 217(2AA) of the

Companies Act, 1956, your Directors confirm as under:

(i) that in the preparation of the annual accounts,

the applicable accounting standards have been

followed along with proper explanation relating to

material departures;

(ii) that the Directors have selected such accounting

policies and applied them consistently and made

judgments and estimates that are reasonable and

prudent so as to give a true and fair view of the state

of affairs of the Company at the end of the financial

year and of the profit / (loss) of the Company for that

period;

(iii) that the Directors had taken proper and sufficient

care for the maintenance of adequate accounting

records in accordance with the provisions of this

Act for safeguarding the assets of the Company

and for preventing and detecting fraud and other

irregularities;

(iv) that the Directors had prepared the annual accounts

on a going concern basis.

AuditorsThe Auditors of the Company, M/s Lovelock & Lewes,

Chartered Accountants, Kolkata, retire at the conclusion

of the ensuing Annual General Meeting and being

eligible, offer themselves for re-appointment.

Auditors’ ObservationsThe Auditors’ have not made any adverse observations

in their report for the Financial Year ended 2010-11.

Public DepositThe Company has not accepted any deposit from the

public during the period.

Audit CommitteeAs per Section 292A of the Companies Act, 1956 the

Audit Committee of the Company comprises of the

following Board Members:

Name of the Director Designation

Mr. Vishal Agarwal Chairman

Mr. Vivek Agarwal Member

Mr. Xia Jiang Member

Conservation of Energy and Technology AbsorbtionNo disclosure is required to be given under section 217(1)

(e) of the Companies Act, 1956. The Company has so far

not undertaken any research and development of any

technology in the areas relating to Company’s Business.

Foreign Exchange Earnings & OutgoThe particulars, with respect to foreign exchange

earnings and outgo pursuant to the Companies

(Disclosure of Particulars in the Report of the Board of

Directors) Rules, 1988, during the year 2010-11 has been

set out in Annexure I to this report.

Particulars of EmployeesThere were no such employees employed throughout

the Financial Year 2010-11 by the Company, whose total

remuneration (monthly/yearly) falls within the provisions

of Section 217(2A) of the Companies Act, 1956 read with

the Companies (Particulars of Employees) Amended

Rules, 2011.

AcknowledgementYour Directors wish to place on record their sincere

appreciation for the continued cooperation and support

extended by the various Government Authorities,

Bankers, shareholders and all other business associates

of the Company. The Directors also convey their

appreciation to the members of the Company for their

commitment and involvement during the year under

review.


Vishal Agarwal Xia Jiang

Director Director

Place: Kolkata Shanghai

Date: 26 May 2011


Annexure I to Report of Directors

Foreign Exchange Earning & Outgo(Rs.)

2010-11 2009 -10

Foreign Exchange Earnings NIL NIL


Traveling Expenses 58,578 1,382,277


Vishal Agarwal Xia Jiang

Director Director


Date: 26 May 2011

118

119



VISA BAO Limited

Auditors’ Report to the Members of VISA BAO Limited


BAO Limited (the “Company”) as at 31 March 2011 ,

and the related Profit & Loss Account and Cash Flow


thereto, which we have signed under reference

to this report. These financial statements are the

responsibility of the Company’s Management. Our

responsibility is to express an opinion on these











and significant estimates made by Management,






(Auditor’s Report) (Amendment) Order, 2004

(together the “Order”), issued by the Central

Government of India in terms of sub-section (4A) of

Section 227 of ‘The Companies Act, 1956’ of India

(the ‘Act’) and on the basis of such checks of the

books and records of the Company as we considered


explanations given to us, we give in the Annexure a

statement on the matters specified in paragraphs 4

and 5 of the Order.




explanations which, to the best of our

knowledge and belief, were necessary for the

purposes of our audit;

(b) In our opinion, proper books of account as

required by law have been kept by the Company

so far as appears from our examination of

those books;

(c) The Balance Sheet, Profit & Loss Account and

Cash Flow Statement dealt with by this report

are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit & Loss

Account and Cash Flow Statement dealt with

by this report comply with the accounting

standards referred to in sub-section (3C) of

Section 211 of the Act;

(e) On the basis of written representations

received from the directors, as on 31 March

2011 and taken on record by the Board of

Directors, none of the directors is disqualified

as on 31 March 2011 from being appointed as

a director in terms of clause (g) of sub-section

(1) of Section 274 of the Act;




notes thereon and attached thereto give, in the

prescribed manner, the information required

by the Act, and give a true and fair view in

conformity with the accounting principles


(i) in the case of the Balance Sheet, of the

state of affairs of the company as at 31

March 2011;

(ii) in the case of the Profit & Loss Account, of

the profit for the year ended on that date;

and




Lovelock & Lewes



Partha Mitra




1. (a) The Company is maintaining proper records

showing full particulars, including quantitative

details and situation, of fixed assets.

(b) The fixed assets of the Company have been

physically verified by the Management

during the year and no material discrepancies

between the book records and the physical

inventory have been noticed. In our opinion,

the frequency of verification is reasonable.

(c) In our opinion and according to the information

and explanations given to us, a substantial part

of fixed assets has not been disposed of by the

Company during the year.

2. (a) The Company has not granted any loans,

secured or unsecured, to companies, firms or

other parties covered in the register maintained


(b) The Company has not taken any loans, secured

or unsecured, from companies, firms or other

parties covered in the register maintained



and explanations given to us, there is an adequate

internal control system commensurate with the size

of the Company and the nature of its business for

the purchase of inventory, fixed assets and for the

sale of goods and services. Further, on the basis of

our examination of the books and records of the

Company, and according to the information and

explanations given to us, we have neither come

across nor have been informed of any continuing

failure to correct major weaknesses in the aforesaid

internal control system.

4. (a) In our opinion and according to the information

and explanations given to us, the particulars

of contracts or arrangements referred to in

Section 301 of the Act have been entered in

the register required to be maintained under

that section.


and explanations given to us, there are no

transactions made in pursuance of such

contracts or arrangements and exceeding the

value of Rupees Five Lakhs in respect of any

party during the year, which have been made at

prices which are not reasonable having regard to

the prevailing market prices at the relevant time.

5. The Company has not accepted any deposits from

the public within the meaning of Sections 58A and

58AA of the Act and the rules framed there under.

6. In our opinion, the Company has an internal audit

system commensurate with its size and nature of its

business.

7. The Central Government of India has not prescribed

the maintenance of cost records under clause (d) of

sub-section (1) of Section 209 of the Act for any of

the products of the Company.

8. (a) According to the information and explanations


examined by us, in our opinion, the Company

is generally regular in depositing the

undisputed statutory dues including provident

fund, investor education and protection fund,

employees’ state insurance, income-tax, sales-

tax, wealth tax, service tax, customs duty,

excise duty, cess and other material statutory

dues as applicable with the appropriate

authorities.

(b) According to the information and explanations


examined by us, there are no dues of income-

tax, sales-tax, wealth-tax, service-tax, customs

duty, excise duty and cess which have not

been deposited on account of any dispute.

9. As the Company is registered for a period less than

five years, clause (x) of paragraph 4 of the Companies

(Auditor’s Report) Order, 2003, as amended by the

Companies (Auditor’s Report) (Amendment) Order,

2004, is not applicable for the year.

Annexure to Auditors’ Report[Referred to in paragraph 3 of the Auditors’ Report of even date to the members of VISA BAO Limited on the financial statements for the year ended 31 March 2011]

120

121



VISA BAO Limited

10. According to the records of the Company examined

by us and the information and explanations given to

us, the Company has not defaulted in repayment of

dues to any financial institution or bank or debenture

holders as at the balance sheet date.

11. The Company has not granted any loans and

advances on the basis of security by way of pledge

of shares, debentures and other securities.

12. The provisions of any special statute applicable to

chit fund / nidhi / mutual benefit fund/ societies are


13. In our opinion, the Company is not a dealer or

trader in shares, securities, debentures and other

investments.


and explanations given to us, the Company has not

given any guarantee for loans taken by others from

banks or financial institutions during the year.

15. The Company has not obtained any term loans.


sheet of the Company, in our opinion and according

to the information and explanations given to us,

there are no funds raised on a short-term basis

which have been used for long-term investment.

17. The Company has not made any preferential

allotment of shares to parties and companies


301 of the Act during the year.


the period and accordingly the question of creation

of security or charge does not arise.

19. The Company has not raised any money by public

issues during the year.

20. During the course of our examination of the

books and records of the Company, carried out in

accordance with the generally accepted auditing

practices in India, and according to the information

and explanations given to us, we have neither come

across any instance of fraud on or by the Company,

noticed or reported during the year, nor have we

been informed of such case by the Management.

21. The other clause, (ii) of paragraph 4 of the Companies

(Auditor’s Report) Order 2003, as amended by the

Companies (Auditor’s Report) (Amendment) Order,

2004, are not applicable in the case of the Company

for the year, since in our opinion there is no matter

which arises to be reported in the aforesaid Order.


Lovelock & Lewes



Partha Mitra




Balance Sheetas at 31 March 2011

(Rs.)


SOURCES OF FUNDSShareholders’ FundShare Capital 1 910,000,000 910,000,000

Reserves and Surplus 2 49,628,793 959,628,793 49,563,317 959,563,317

Deferred Taxation 147,650 6,661

959,776,443 959,569,978

APPLICATION OF FUNDSFixed Assets 3

Gross Block 3,361,274 1,793,484

Less: depreciation 408,000 85,982

Net Block 2,953,274 - 1,707,502 -

Capital Work In Progress including advances 548,201,978 551,155,252 19,533,949 21,241,451

Current Assets, Loans and AdvancesCash and Bank Balances 4 175,622,643 529,543,891

Interest Accrued on Fixed Deposits from Banks 3,800,915 19,288,475

Loans and advances 5 421,811,601 393,986,922

601,235,159 942,819,288

Less: Current Liabilities and ProvisionsLiabilities 6 192,542,058 1,949,177

Provisions 7 71,910 2,541,584

192,613,968 408,621,191 4,490,761 938,328,527

959,776,443 959,569,978

Notes on Accounts 9

The Schedules referred to above form an integral part of the Balance Sheet. This is the Balance Sheet referred to in our report of even date.

For Lovelock & Lewes For and on behalf of the Board of Directors Firm Registration Number - 301056EChartered Accountants Vishal Agarwal Jiang Xia

Director DirectorPartha Mitra Place: Kolkata Shanghai

Partner Basudeo Prasad Modi Vikash Prasad Singh Membership Number 50553 Managing Director Company Secretary

Place: Kolkata KolkataPlace : KolkataDate : 26 May 2011 Date : 26 May 2011

122

123



VISA BAO Limited


(Rs.)


INCOMEOther Income

Income from Interest on Fixed Deposit from Banks

(Gross) (Tax deducted at source Rs.4,622,148, 2010:

Rs.5,233,059)

15,152,677 48,339,804

15,152,677 48,339,804

EXPENDITUREExpenses 8 14,572,194 11,286,574

Depreciation 3 322,018 85,982

14,894,212 11,372,556

Profit Before Taxation 258,465 36,967,248

Provision for Taxation Current Tax 52,000 12,600,000

Deferred Tax 140,989 6,661

Profit after Taxation 65,476 24,360,587

Balance Carried to Balance Sheet 65,476 24,360,587


Notes on Accounts 9

The Schedules referred to above form an integral part of the Profit & Loss Account.This is the Profit & Loss Account referred to in our report of even date.






(Rs.)

31 March 2011 31 March 2010

1 SHARE CAPITALAuthorised92,000,000 Equity Shares of Rs. 10/- each 920,000,000 920,000,000

Issued and Subscribed91,000,000(2010: 91,000,000) Equity Shares of Rs. 10/-

each fully paid up

910,000,000 910,000,000

Note:

Of the above 59,150,000 Equity Shares [including

beneficial interest in 5 equity shares] are held by VISA

Steel Limited, the Holding Company, a subsidiary of

VISA Infrastructure Ltd, the Ultimate Holding Company

910,000,000 910,000,000

2 RESERVES & SURPLUSCapital Reserve 17,119,659 17,119,659

Profit & Loss Account

Balance brought forward 32,443,658 8,083,071

Profit & Loss for the Current Year 65,476 32,509,134 24,360,587 32,443,658

49,628,793 49,563,317


124

125



VISA BAO Limited

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(Rs.)

31 March 2011 31 March 2010

4 CASH AND BANK BALANCESCash in hand 11,119 3,901

Balances with Scheduled Banks in:

Current Account 10,323,551 43,931,730

Fixed Deposit Account 165,287,973 485,608,260

175,622,643 529,543,891

5 LOANS AND ADVANCES - UNSECURED, CONSIDERED GOODAdvance recoverable in cash or in kind or valueto be Received

Considered Good 419,661,127 393,936,922

Security Deposit 50,000 50,000

Advance payment of Income Tax

[Net of Provision for Income Tax of Rs. 21,252,000 ]

2,100,474 -

421,811,601 393,986,922

6 LIABILITIESSundry Creditors 188,147,953 1,011,107

Other Liablities 4,394,105 938,070

192,542,058 1,949,177

7 PROVISIONSProvision for Income Tax - 2,469,674

[Net of Advance payment of Income Tax 2010: Rs.8,730,326]

Fringe benefit Tax 71,910 71,910

[Net of Advance payment of FBT Rs 28,090, 2010: Rs.28,090)

71,910 2,541,584


126

127



VISA BAO Limited

Scheduleto the Profit & Loss Account

(Rs.)

31 March 2011 31 March 2010

8 EXPENSESSalary ,wages & Bonus 9,102,790 5,872,583

Contribution to Provident Fund & other funds 251,982 202,439

Staff Welfare 351,653 -

Auditors Remuneration 284,915 110,000

Bank Charges 120,745 15,507

Boarding & lodging 438,456 501,770

Pollution Controls Measure - 240,000

Car Hire Charges 729,002 329,199

Repairs & Maintenance- Others 412,433 258,766

Consultancy Charges 1,247,963 1,237,700

Rates & Taxes 34,645 462,715

Filing Fees 15,172 6,410

Miscellaneous Exp. 276,356 380,192

Printing & Stationery Exp. 263,901 25,097

Professional Fees - 17,651

Telephone ,Telex & Fax 85,670 12,943

Travelling Exp. 956,511 1,613,602

14,572,194 11,286,574


9 NOTES ON ACCOUNTS

1. Statement on Significant Accounting Policies

(a) Principal Accounting Policies

The financial statements have been prepared to comply in all material aspects with all the applicable

accounting principles in India, the applicable accounting standards u/s 211(3C) of the Companies Act,

1956 and the relevant provisions of the Companies Act, 1956. A summary of important accounting

policies which have been applied consistently are set out below. Financial Statements have also been

prepared in accordance with relevant presentational requirements of the Companies Act, 1956 of India.



(c) Fixed Assets

(i) Fixed Assets are stated at their acquisition cost (net of CENVAT credit), where applicable together



loss, if any, ascertained as per the Accounting Standard u/s 211 (3C) of the Companies Act, 1956.

(ii) Depreciation on fixed assets is provided on Straight Line Method in accordance with Schedule XIV

of the Companies Act, 1956.

(d) Transactions in Foreign Currencies


the date of transaction. Transactions remaining unsettled are translated at the rate of exchange ruling at

the end of the year. Exchange gain or loss arising on settlement/translation is recognised in the Profit &

Loss Account.

(e) Employee Benefits


(a) Provident Fund

The Company operates defined contribution schemes like Provident Fund. The Company

makes regular contribution to provident funds which are fully funded and administered by

Government and are independent of Company’s finance. Contributions are recognized in


(b) Gratuity

Gratuity benefit on retirement is determined on the basis of independent actuarial valuation,

at the end of each year in accordance with the method stated in AS 15 (Revised) and such

liability is provided for in the accounts and charge is recognized in the Profit & Loss Account.

(c) Leave Encashment

Leave encashment benefit on retirement is determined on the basis of independent actuarial

valuation, at the end of each year in accordance with the method stated in AS 15 (Revised)

and such liability is provided for in the accounts and charge is recognized in the Profit & Loss

Account.

Actuarial gains and losses, where applicable, are recognised in the Profit & Loss Account.


Other Employee Benefits are accounted for on accrual basis.

(f) Deferred Tax




Schedulesto the ACCOUNTS

128

129



VISA BAO Limited

(Rs.)

31 March 2011 31 March 2010

2 Estimated amount of Contracts remaining to be executed on Capital Account and not provided for (net of advance)

484,669,032 766,034,382

3 Earning Per Share

Profit After Tax (A) 65,476 24,360,587

Weighted average number of Rs. 10 equity share outstanding during the year (B)

91,000,000 63,419,521

Basic and Diluted Earning per Share (A/B) 0.00 0.38

4 Expenditure in Foreign Currency - Traveling 58,578 1,382,277

5 Deferred Tax Provision has been made in the accounts in accordance with the requirements of the Accounting Standard on “Taxes on Income” (AS 22) issued by The Institute of Chartered Accountants of India. The major components of the deferred tax Liabilities/(Assets) based on the tax effects of timing differences are as follows:

Deferred Tax Liabilities.

Depreciation 208,013 47,231

Deferred Tax Assets

Employee Benefit 60,363 40,570

147,650 6,661

6 Auditors’ Remuneration:

Audit Fees 250,000 100,000

Other Services 25,000 10,000

275,000 110,000

Schedulesto the ACCOUNTS (Contd.)

7 The Company is constructing a Ferro Chrome Plant on 50 acres of land at Kalinganagar, Orissa, which is in the

process of transfer in the name of company.

8 The Company has been incorporated for manufacturing of Ferro Chrome and does not operate in any other

reportable segment.

9 There are no Micro, Small and Medium Enterprises, as required to be disclosed under the “Micro, Small and

Medium Enterprise Development Act, 2006” identified by the Company on the basis of information available with

the Company.


11 The Company maintains a provident fund with Regional Provident Fund Commissioner. Contributions are made

by the company to the funds , based on the current salaries. In the provident fund schemes , contribution are

also made by the employees. An amount of Rs.251,982/-(2010: Rs. 25,644/-) has been charged to the Profit & Loss

Account of the above defined contribution schemes.

Annual actuarial valuations are being carried out by Omni Consultants in compliance with Accounting Standard

15 (Revised) on Employee Benefits.

The Company also provides for leave encashment benefit to the employees. Annual actuarial valuations are

carried out by an independent actuary in compliance with Accounting Standard 15 (Revised) on Employee

Benefits. Employees are not required to make any contribution.



(Rs.)

Gratuity31 March


2011 2010 2011 2010


Present value of funded obligation - - - -

Fair Value of Plan Assets 301,617 - - -

301,617 - - -

Unrecognized past service cost - - -

Present value of un-funded obligation 153,952 145,930 181,720 122,124

Net (Asset)/Liability (147,665) 145,930 181,720 122,124

Amount recognised in the Profit & Loss Account and charged to Salaries, Wages & Bonus and Contribution to Provident & Other Funds under Schedule 8 are as follows:

Current Service cost 105,186 77,417 32,889 22,204

Past service benefit 68,513

Interest cost 12,039 - 10,075 -

Expected Return on Plan Assets - - - -

Net actuarial loss/(gain) recognised during the year (109,203) - 16,632 99,920

Total 8,022 145,930 59,596 122,124


-

Opening defined benefit obligation 145,930 - 122,124 -

Current Service cost 105,186 77,417 32,889 22,204

Past service benefit 68,513

Interest cost 12,039 - 10,075 -

Actuarial loss/(gain) (109,203) - 16,632 99,920

Benefits paid - - - -

Closing Defined Benefit Obligation 153,952 145,930 181,720 122,124

Reconciliation of opening and closing balances of the fair value of plan assets:

Opening fair value of Plan Assets - - -

Expected Return on Plan Assets - - -

Contributions by employer 301,617 - -

Benefits paid - - -

Closing Fair Value on Plan Assets 301,617 - - -



130

131



VISA BAO Limited

(Rs.)

Gratuity31 March


2011 2010 2011 2010

Actual Return on Plan Assets [Plan Assets consist of funds maintained with LICI for gratuity scheme]

- - - -


Discount Rates 8.25% 8% 8.25% 8%


Expected Salary increase rates 5% 7% 5% 5%

Mortality Rates LIC (1994-96)mortality tables


The estimates of future salary increase considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors.

The contribution expected to be made by the Company for the year ending 31 March 2012 cannot be readily ascertainable and therefore not disclosed.

12 RELATED PARTY DISCLOSURESName of the Related Parties: Nature of Relationship

VISA Steel Limited Holding Company

VISA Infrastructure Limited Ultimate Holding Company

Baosteel Resources Co. Ltd. Enterprise having significant influence

Ghotaringa Minerals Limited Fellow Subsidiary

Mr Basudeo Prasad Modi Key Managerial Personnel

Details of Transactions with Related Parties (Rs.)

2010-11 2009-10

Nature of Transaction Holding

Company

Enterprise having


Holding

Company

Enterprise having


Advance against share capital - - 295,750,000 -

Issue of share capital - - 295,750,000 159,250,000

Re-imbursement of expenses 3,354,020 - -

Advance against facilities - - 393,600,000 -

Outstanding at closing

Debit 393,600,000 - 393,600,000 -

Credit 3,354,020 - - -








(Rs.)

31 March 2011 31 March 2010

A. CASH FLOW FROM OPERATING ACTIVITIES:Net profit before Tax and Extraordinary items 258,465 36,967,248 Adjusted for:Depreciation 322,018 85,982 Interest Income (15,152,677) (48,339,804)Operating profit before working capital changes (14,572,194) (11,286,574)Adjustments for changes in working capital : - (Increase) in Loans and Advances (25,724,205) (393,972,914) - Increase/(Decrease) in Trade and Other Payables 188,051,297 (5,153,705)Cash generated from operations 147,754,898 (410,413,193) - Taxes Paid (2,080,564) (14,615,266)Net cash from Operating activities 145,674,334 (425,028,459)

B. CASH FLOW FROM INVESTING ACTIVITIES:Purchase of fixed assets (1,567,790) (1,793,484)Capital Work in Progress (528,668,029) (19,533,949)Interest Received 30,640,237 46,235,880 Net cash used in investing activities (499,595,582) 24,908,447

C. CASH FLOW FROM FINANCING ACTIVITIES:Money Received against issue of share - 295,750,000 Advance against Share Capital - - Net cash used in Financing activities - 295,750,000 Net Increase in Cash & Cash Equivalents (353,921,248) (104,370,012)Cash and cash equivalents as at 1 April 2010 529,543,891 633,913,903 Cash and cash equivalents as at 31 March 2011 175,622,643 529,543,891

Notes to Cash Flow Statement1 Cash and cash equivalents consist of cash in hand and balance with banks and deposits with banks.

31 March 2011 31 March 2010 Cash and cash equivalents as at 31 March 2011 comprises:Cash & Cheques in hand 11,119 3,901 Balance with Scheduled Banks:in Current Accounts 10,323,551 43,931,730 in Deposit Accounts 165,287,973 485,608,260 Cash & cash equivalents 175,622,643 529,543,891

2 The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the AccountingStandard on ‘Cash Flow Statements (AS-3)’ issued by the Institute of Chartered Accountants of India. This is the Cash Flow Statement referred to in our report of even date






132

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VISA BAO Limited

I. REGISTRATION DETAILS Registration No. : 9 7 9 0 State Code : 1 5


Il. CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousands)



lll POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands)

Total Liabilities : 1 1 5 2 3 9 0 Total Assets : 1 1 5 2 3 9 0

Sources of Funds

Paid-up Capital : 9 1 0 0 0 0 Reserves & Surplus : 4 9 6 2 9

Secured Loans : N I L Unsecured Loans : N I L

Deferred Taxation : 1 4 8 Advance against

share capital

pending allotment

N I L


Net Fixed Assets : 5 5 1 1 5 5 Investments : N I L

Net Current Assets : 4 0 8 6 2 1 Misc. Expenditure : N I L


IV. PERFORMANCE OF COMPANY (Amount in Rs. Thousands)

Turnover * : 1 5 1 5 3 Total Expenditure : 1 4 8 9 4

Profit Before Tax : 2 5 8 Profit After Tax : 6 5

Earning per share in Rs. : 0 . 0 0 Dividend % : N I L


V. GENERIC NAMES OF PRINCIPAL PRODUCTS/SERVICES OF COMPANY (As Per Monetary Terms)

Item Code No. : 7 2 0 2 4 1 0 0 Product Description : FERRO CHROME

Item Code No. : N . A . Product Description : N . A .


Balance Sheet Abstract And Company’s General Business Profile


Vishal Agarwal Jiang XiaDirector Director


Basudeo Prasad Modi Vikash Prasad Singh Managing Director Company Secretary Place: Kolkata Kolkata

Date : 26 May 2011


Directors’ Report

To the Members,

Your Directors take the pleasure in presenting the Eighth Annual Report together with the audited Annual Accounts of

the Company for the year ended 31 March 2011.

Financial Results(In Rs.)

Year ended 2010-11

(In Rs.)Year ended

2009-10

Gross Revenue - -

Interest Income - 2,15,970.00

Other Income 50,756.00 -

Expenditure 47,615.03 1,10,505.46

Profit/(Loss) after Taxation 2,140.97 72,192.54

Profit/(Loss) brought forward from previous year 46,437.79 (25,754.75)

Balance carried forward to Balance Sheet 48,578.79 46,437.79

OperationsDuring the year, the funds of your Company were

deployed in the prospecting activities, therefore, no

interest income as in previous years has been earned.

Your Company recorded a net profit of Rs.2,140.97 against

Rs. 72,192.54 in the previous financial year. An amount of

Rs. 48,578.79 has been carried forward to the Balance

Sheet.

During the year, your Company has completed

prospecting activities over the total area covered under

the Prospecting Licence and has applied for Mining Lease

over 144.17 hectares in the name of Orissa Industries

Limited.

Your Company has also made several new applications

for grant of prospecting licence over chrome ore bearing

areas.

DividendAs your Company is yet to commence its operations,

the Directors do not recommend any dividend for the

financial year ended 31 March 2011.

DirectorsIn accordance with the provisions of the Companies

Act, 1956 and the Company’s Articles of Association,

Mr.Vishal Agarwal and Mr.Jugal Kishore Jhunjhunwala,

Directors of the Company, retire by rotation and being

eligible offer themselves for reappointment.

AuditorsThe Auditors of the Company M/s. L. B. Jha & Co.,

Chartered Accountants, GF-1, Gillander House, 8, Netaji

Subhas Road, Kolkata 700 001 retire at the ensuing Annual

General Meeting and being eligible, offer themselves for

reappointment.

Directors Responsibility StatementIn terms of the provision of Section 217(2AA) of the

Companies Act, 1956, your Director state:

i. That in the preparations of the annual accounts, the

applicable accounting standards had been followed,

along with proper explanation relating to material

departures.

134

135




Directors’ Report

ii. That the Directors had selected such accounting

policies and applied them consistently and made

judgments and estimates that are reasonable and

prudent so as to give a true and fair view of the state

of affairs of the Company at the end of the financial

year and of the profit or loss of the Company for that

period.

iii. That the Directors had taken proper and sufficient

care for the maintenance of adequate accounting

records, in accordance with the provisions of this

Act to safeguard the assets of the Company and to

prevent and detect fraud and other irregularities.

iv. That the Directors had prepared the annual accounts

on a going concern basis.

Conservation of energy and technology absorption

Since the Company has not commenced

operations, requirement relating to disclosure

under the Companies (Disclosure of Particulars in

the Report of the Board of Directors), Rules 1988 are


Auditors’ ReportThe comments of the Auditors’ Report read with the

notes to the accounts in schedules are self-explanatory

and do not call for further explanation.

EmployeesThere were no employees employed during the year

and hence the particulars under Section 217(2A) of

the Companies Act, 1956 read with the Companies

(Particulars of Employees) Rules, 1975, as amended, are

not required to be furnished.

Foreign currencyThere have been no foreign exchange earnings or

outflow during the year under review.

Public depositThe Company has not accepted any deposit from the

public during the financial year.

AcknowledgementYour Directors wish to place on record their sincere

appreciation for the continued cooperation and support

extended by the various Government Authorities,

Bankers and all other business associates of the

Company. The Directors also convey their appreciation

to the members of the Company for their commitment

and involvement during the year under review.


Jugal Kishore Jhunjhunwala Vishal Agarwal

Director Director

Place: Bhubaneswar

Date: 20 May 2011


1. We have audited the attached Balance Sheet of

GHOTARINGA MINERALS LIMITED as at 31 March,

2011, the related Profit and Loss Account and the

Cash Flow for the year ended on that date (hereinafter

referred to as “financial statement”), which have

been signed under reference to this report. These

financial statements are the responsibility of the

Company’s management. Our responsibility is to

express an opinion on these financial statements

based on our audit.

2. We have conducted our audit in accordance with

auditing standards generally accepted in India. These

Standards require that we plan and perform the

audit to obtain reasonable assurance as to whether

the financial statements are free of any material

misstatements. An audit includes examining, on a




and significant estimates made by the management,






(Auditor’s Report) Order, 2004, issued by the Central

Government of India in terms of Section 227(4A)

of the Companies Act, 1956 of India (the ‘Act’)

and on the basis of such checks as we considered


explanations given to us, we set out in ANNEXURE,

a statement on matters specified in paragraph 4 and

5 of the said order.


to in Paragraph 3 above, we report that:

4.1 We have obtained all the information and

explanations, which to the best of our

knowledge and belief were necessary for the

purpose of our audit;

4.2 In our opinion, proper books of accounts

as required by the law have been kept by

the Company, so far as appear from our

examination of those books;

4.3 The financial statements dealt with by this report

are in agreement with the books of accounts.

4.4 In our opinion, the financial statements dealt with by

this report comply with the Accounting Standards

referred to in Section 211(3C) of the ‘Act’.

4.5 On the basis of written representations

received from the Directors, as on 31 March,

2011 and taken as record by the Board of

Directors, we report that none of the Directors

are disqualified as on 31 March, 2011 from

being appointed as a Director in terms of sub

section 1(g) of Section 274 of the ‘Act’.

4.6 In our opinion and to the best of our information



notes thereon and attached thereto given in the

prescribed manner the information required

by the ‘Act’, and also give, respectively, a true

and fair view in conformity with the accounting

principles generally accepted in India.

(a) In the case of Balance Sheet of the state of

affairs of the Company as at 31 March, 2011;

(b) In the case of Profit and Loss Account, of the

profit for the year ended on that date; and

(c) In the case of Cash Flow Statement, of the

Cash Flows for the year ended on that date.

For L. B. Jha & Co.



T. Mandal


Date: 20 May 2011 Membership No.50070

Auditor’s Reportto the Members of Ghotaringa Minerals Limited

136

137




1. The Company does not have any fixed assets and has only incurred some expenses relating to prospecting/exploration and drilling at the proposed mines and such expenses are treated as Capital Work in Progress. Hence clause 4(i) (a), (b) and (c) are not applicable.

2. The Company do not carry any inventory and so clauses 4(ii) (a), (b) and (c) are not applicable.

3. The Company has not granted nor taken any loans, secured or unsecured to companies, firms or other parties covered in the Register maintained under Section 301 of the ‘Act’. Hence provisions of Clauses 4(iii) (a) to (g) are not applicable.

4. In our opinion and according to the information and explanations given to us and based on our review, there is an adequate internal control system commensurate with the size of the company and the nature of its business and there have been no major weaknesses in internal control system. Further, on the basis of our examination of the books of records of the company, and according to information and explanations given to us, we have neither come across nor have we been informed of any instances of major weaknesses in the aforesaid internal control procedure and continuing failure on the part of the management to take corrective course of action in this regard.

5. In our opinion and according to the information and explanations given to us, there are no such contracts or arrangements, particulars of which are needed to be entered in the register maintained under Section 301 of the ‘Act’.

6. The Company has not accepted any deposit from public within the meaning of Section 58A or Section 58AA of the Act and the rules framed there under.

7. The Company does not have any formal internal audit system and we were told that the Company has not yet commenced commercial activity and the size of operations is too small to have any formal Internal Audit system.

8. The Company has not been prescribed to maintain cost records by the Central Government under Section 209 of the Companies Act 1956.

9. (a) The Company had deposited regularly all statutory dues relating to Income tax and such other taxes as are applicable to it and there was no undisputed dues as at 31 March 2011, which was lying due for a period of more than 6 months from the date when it had become payable.

(b) There are no disputed statutory dues that remain unpaid on account of income tax/sales tax/service tax/customs duty/wealth tax/excise duty/cess etc as on 31.3.2011.

10. The Company was registered in 2003 and is yet to commence commercial revenue earnings. It does not have any accumulated losses as at 31 March 2011. However, in the year 2010-11, the company’s revenue expenses were more than the cash earnings during the year, though there is no loss for the year. Also no cash losses had been incurred in the immediate preceding financial year.

11. The Company has not taken any loans or other dues from financial institution, banks or debenture holders hence there is no question of default in repayment of dues to this group.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund/Nidhi/mutual benefit fund/societies are not applicable to the company.

14. In our opinion the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion, and according to the information and explanations given to us, the Company has not given guarantee for loans taken by others from banks or financial institution during the year.


17. The Company has not raised any funds on short-term basis.

18. The Company has not made any preferential allotment of shares to any parties and companies covered in the register maintained under Section 301 of the ‘Act’.

19. The Company has not issued any debentures during the year and no debentures are outstanding at the end of the year.

20. The Company has not raised any money by public issue during the year.

21. During the course of our examination of books and records of the Company, carried in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For L. B. Jha & Co.



T. Mandal


Date : 20 May 2011 Membership No.50070

Annexure to the Auditors’ Report(Referred to in Paragraph 3 of our report of even date)



The Schedules referred to above and attached thereto form an integral part of this Balance Sheet.This is the Balance Sheet referred to in our report of even date.

For L.B.JHA & CO For and on behalf of the Board of Directors Chartered AccountantsFirm Registration Number:301088E Jugal Kishore Jhunjhunwala Vishal Agarwal

Director DirectorT. MandalPartnerMembership No. 50070

Place : Kolkata Place : Bhubaneswar

Date : 20.05.2011 Date : 20.05.2011

(Rs.)

Schedules 31 March 2011 31 March 2010

I SOURCES OF FUNDS:Shareholders’ FundShare Capital 1 10,000,000.00 10,000,000.00

Reserves & Surplus

Profit & Loss Account 48,578.76 46,437.79

Loan Fund

Unsecured Loan 2 2,500,000.00 -

TOTAL 12,548,578.76 10,046,437.79

II APPLICATION OF FUNDS:FIXED ASSETSCapital Work In Progress 3 11,116,529.00 8,139,209.00

Deferred Tax Assets - -

Current Assets, Loans and AdvancesCash and Bank Balances 4 962,024.76 1,763,640.79

Current Assets , Loans and Advances 5 525,970.00 683,133.00

1,487,994.76 2,446,773.79

Less: Current Liabilities And Provisions 6 55,945.00 539,545.00

Net Current Assets 1,432,049.76 1,907,228.79

TOTAL 12,548,578.76 10,046,437.79

Significant Accounting Policy and Notes to Accounts 9

138

139





The Schedules referred to above and attached thereto form an integral part of this Profit and Loss Account. This is the Profit and Loss Account referred to in our report of even date




Date : 20.05.2011 Date : 20.05.2011

(Rs.)


INCOMEInterest on Term Deposits (Gross) - 215,970.00

(TDS Rs.NIL, P.Y Rs 21,597;)

Other Incomes 7 50,756.00 -

TOTAL 50,756.00 215,970.00

EXPENDITUREExpenses 8 47,615.03 110,505.46

TOTAL 47,615.03 110,505.46

Profit Before Taxation 3,140.97 105,464.54

Less: Taxation for the year

Current Tax 1,000.00 25,800.00

Deferred Tax - (7,472.00)

Profit After Taxation 2,140.97 72,192.54

Balance brought forward from previous year 46,437.79 (25,754.75)

Balance carried over to Balance Sheet 48,578.76 46,437.79

Earnings per share :(Note No B 4 on Schedule 9)Basic & Diluted 0.002 0.072

Face Value of Equity Share 10.00 10.00



(Rs.)

31 March 2011 31 March 2010

SCHEDULE:1Share CapitalAuthorised:

1,000,000 Equity Shares of Rs.10 each 10,000,000.00 10,000,000.00

(P.Y. 1,000,000 Equity share of 10 each)

Issued , Subscribed And Paid Up :


(P.Y. 1,000,000 Equity share of Rs.10 each)

(Refer notes below)

10,000,000.00 10,000,000.00

NOTES :

(1) Of above 110,000 ( P.Y. 110,000)Equity shares of Rs.10 each were allotted for consideration other than cash pursuant to the terms of a Joint Venture Agreement.

(2) 890,000 (P.Y.890,000) Equity Shares of Rs 10 each are held by VISA Steel Limited (Holding company) and its nominees.

SCHEDULE : 2Unsecured Loan :Loan from Holding Company 2,500,000.00 -

2,500,000.00 -

SCHEDULE : 3Capital Work in ProgressExploration Expenses 9,890,193.00 7,030,709.00

Interest during Construction period 117,836.00 -

Prospecting Lease Application 8,500.00 8,500.00

Advance for prospecting lease 1,100,000.00 1,100,000.00

11,116,529.00 8,139,209.00

Schedulesto Balance Sheet

140

141




(Rs.)

31 March 2011 31 March 2010

Schedulesto Balance Sheet (Contd.)

SCHEDULE : 4Cash and Bank BalancesCash in hand - -

Balances with Scheduled Bank :

- in Current Account 962,024.76 1,763,640.79

962,024.76 1,763,640.79

SCHEDULE : 5Current Assets , Loans and Advances(Unsecured, Considerd good)

Advance Recoverable in Cash or Kind or for value to be received (Others) 469,147.00 469,147.00

Advance Income Tax 56,823.00 213,986.00

525,970.00 683,133.00

SCHEDULE : 6Current Liabilities And ProvisionsCurrent Liabilities

Sundry Creditors

Due to Micro & Small Enterprises - -

Due to Other Creditors 16,545.00 493,145.00

Provisions

Provision for Taxation 39,400.00 46,400.00

55,945.00 539,545.00


(Rs.)

31 March 2011 31 March 2010

SCHEDULE : 7IncomesIncome Tax Refund 8,873.00 -

Interest on Income Tax 21,631.00 -

Prior period income 20,252.00 -

50,756.00 -

SCHEDULE : 8ExpensesFiling Fees 3,000.00 2,620.00

Professional Fees - 850.00

Auditor’s Remuneration (as Auditors) 18,090.00 15,000.00

Directors’ Sitting Fees 20,000.00 20,000.00

Other Expenses 223.03 11,284.46

Printing & Stationery - 700.00

Travelling Expenses 6,302.00 60,051.00

47,615.03 110,505.46

Schedulesto the Profit & Loss Account

142

143




Schedulesto the Account

A. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of preparation of financial statements The financial statements have been prepared and presented under the historical cost convention on the

accrual basis of accounting except as stated otherwise and comply with the accounting standards notified

under Section 211(3C) of the Companies Act 1956 (the ‘Act’) and the relevant provisions of the Act to the

extent applicable.

2. Use of estimates The preparation of financial statements in conformity with the generally accepted accounting principles

requires management to make estimates and assumptions that affect the reported amounts of income and

expenses of the period, assets and liabilities and disclosures relating to contingent liabilities as of the date

of the financial statements. Actual results could differ from those estimates. Any revision to accounting

estimates is recognized prospectively in future periods.

3. Revenue recognition The revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company

and the revenue can be reliably measured. Revenue from sales of goods is recognized upon passage of title

to the customer, which generally coincides with their delivery.

Dividend income is recognized when the right to receive payment is established.

Interest income is recognized using the time proportion method, based on the transactional interest rates.

4. Fixed Assets Fixed assets are stated at original cost net of tax / duty credits availed if any, less accumulated depreciation.

Cost includes pre-operative expenses and all expenses related to acquisition, exploration and installation of

the concerned assets. Financing costs relating to acquisition of fixed assets are also included to the extent

they relate to the period till such assets are ready to be put to use.

The carrying amounts are reviewed at each balance sheet date when required to assess whether they

are recorded in excess of their recoverable amounts, and where carrying values exceed this estimated

recoverable amount, assets are written down to their recoverable amount.

5. Depreciation Depreciation on fixed assets is provided on written down value method as per rates prescribed in Schedule

– XIV of the Companies Act, 1956 on pro-rata basis.

6. Intangible assets Intangible assets are recognized only when future economic benefits attributable to the assets will flow to

the enterprise and cost can be measured reliably and are amortised in equal installments over its useful life.

7. Assets acquired under lease For assets acquired under operating lease, rentals payable are charged to Profit & Loss account. Assets

taken on Finance Lease are accounted for as assets of the Company. Lease rentals payable are apportioned

between principal and interest using the internal rate of return method and finance charge is recognised

accordingly.

8. Provision and Contingent liabilities The Company creates a provision when there is a present obligation as a result of a past event that probably

requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure

for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably

will not, requires an outflow of resources. When there is a possible obligation or a present obligation in respect

of which the likelihood of outflow of resources is remote, no provision or disclosure is made.


9. Taxation

Current Tax

The current income tax charge is determined in accordance with the relevant tax regulations applicable to

the Company.

Deferred Tax

Deferred Tax is recognized subject to consideration of prudence, on timing difference between taxable income

and accounting income that originate in one period and are capable of reversal in one or more subsequent

periods and is measured by applying tax rates and tax laws that have been enacted or substantively enacted

by Balance Sheet date. Deferred tax assets are not recognised unless there is reasonable certainty that

sufficient future income will be available against which such deferred tax assets can be realised.

10. Earnings per shareIn determining earnings per share, the Company considers the net profit after tax and includes the post-tax

effect of any extra-ordinary item. The number of equity shares used in computing basic earnings per share

is the weighted average number of equity shares outstanding during the period. The number of equity

shares used in computing diluted earnings per share comprises weighted average number of equity shares

considered for deriving basic earnings per share and also weighted average number of equity shares which

could have been issued on the conversion of all dilutive potential equity shares.

B. Notes On Accounts

1 The Company has not yet commenced commercial revenue earning activity. The Company has entered into

a lease arrangement for operating and extracting of a mine for which the mining lease license application

dated 06.08.2010 is yet to be issued by the Competent Authority.

2. Prior Period Income Prior Period income includes traveling expenses directly relating to exploration for minerals amounting to

Rs 20,252/- and which has been transferred to Exploration Expenses under Capital Work in Progress.

3. Retirement BenefitsThe Company does not have any employees and hence, no provision has been made for the retirement

benefits under AS 15.

4. Earnings per share

31 March 2011 31 March 2010

Profit/ (Loss) after tax (Rs.) 2,140.97 72,192.54

No. of equity shares (No.) of Rs.10 each 10,00,000 10,00,000

Basic & Diluted Earnings per share (Rs.) 0.002 0.072

5. Deferred Tax Asset/Liability

31 March 2011 31 March 2010

Asset:

Deferred tax liability on account of carried over business losses Nil Nil

There are no items of pending adjustments relating to timing difference between taxable incomes and accounting income and so there is neither deferred tax asset nor a deferred tax liability for the year


A. SIGNIFICANT ACCOUNTING POLICIES (CONTD.)

144

145




6. Related party disclosures (as indicated by the management from relevant documentation)a) Where control exists

Related party Relationship

VISA Steel Ltd. Holding Company

VISA Infrastructure Ltd Ultimate Holding Company

VISA BAO Limited Fellow Subsidiary

b) Transactions during the year

(Rs.)

2010 – 11 2009 – 10

Nature of Transaction Holding Co. Holding Co.

Unsecured Loan 2,500,000 Nil

Interest on Unsecured Loan 117,836 Nil

Payment of above interest 117,836 Nil

Closing balanceDebit Nil Nil

Credit 2,500,000 Nil

7. Additional information pursuant to the provisions of paragraph 3(4C) and (4D) of Part-II of Schedule VI of

Companies Act, 1956 has not been furnished since the Company has not carried out any manufacturing/

trading/service activities in the financial year.

8. The previous year’s figures have been regrouped/ re-arranged wherever necessary.




Date : 20.05.2011 Date : 20.05.2011


A. SIGNIFICANT ACCOUNTING POLICIES (CONTD.)



(Rs.)

31 March 2011 31 March 2010

CASH FLOW FROM OPERATING ACTIVITIESNet profit/(loss) before Tax and extraordinary items 3,140.97 105,464.54

Less: Adjustment for taxation for the year (1,000.00) (25,800.00)

Adjustment for deferred taxation - (7,472.00)

Operating profit/(loss) before working capital changes 2,140.97 72,192.54

Adjustments for changes in working capital:

(Increase)/Decrease in Other Current Assets - 5,547.00

(Increase)/Decrease in Loans and Advances 157,163.00 (14,125.00)

Increase/(Decrease) in Current liabilities and Provisions (483,600.00) 390,646.00

Net Cash Flow from Operating Activities A (324,296.03) 454,260.54

CASH FLOW FROM INVESTING ACTIVITIESExpenditure on Capital Work-in- Progress (2,977,320.00) (2,716,710.00)

Net Cash Flow from Investing activities B (2,977,320.00) (2,716,710.00)

CASH FLOW FROM FINANCING ACTIVITIESIncrease/(Decrease) in Unsecured Loan 2,500,000.00 -

Net Cash Flow from financing activities C 2,500,000.00 -

Net increase/(decrease) in cash and cash equivalents (A+B+C)

(801,616.03) (2,262,449.46)

Opening Balance of cash and cash equivalents 1,763,640.79 4,026,090.25

Closing Balance of cash and cash equivalents 962,024.76 1,763,640.79

(801,616.03) (2,262,449.46)

Less Payment of Direct Taxes -

(801,616.03) (2,262,449.46)

Notes:

(1) The above Cash Flow Statement has been compiled from and is based on the Balance Sheet as at 31 March 2011 and the related Profit and Loss Account for the year ended on that date.

(2) The above Cash Flow Statement has been prepared under ‘indirect Method’ as set out in Accounting Standard (AS-3) on “ Cash Flow Statement”,and reallocations required for this purpose are as made by the company.

(3) Figures in Parenthesis represents outflows. Previous years’s figures have been regrouped, wherever necessary,to conform to current year’s

presentations.

This is the Cash Flow referred to in our report of even date.




Date : 20.05.2011 Date : 20.05.2011

146

147




I. REGISTRATION DETAILS

Registration No. : 7 3 4 8 State Code : 1 5

Balance Sheet as at : 3 1 0 3 2 0 1 1Date Month Year




III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands)

Total Liabilities : 1 2 5 4 9 Total Assets : 1 2 5 4 9

Sources of Funds

Paid-up Capital : 1 0 0 0 0 Reserves & Surplus : 4 9

Secured Loans : N I L Unsecured Loans : 2 5 0 0


Net Fixed Assets : 1 1 1 1 7 Investments : N I L

Net Current Assets(including

deferred tax asset)

: 1 4 3 2 Misc. Expenditure : N I L

Accumulated Losses : 0 0


Turnover : 5 1 Total Expenditure : 4 8

+ - Profit/Loss Before tax + - Profit/Loss after tax

+ 3 + 2

(Please tick Appropriate box + for Profit, - for Loss)

Earning per share in Rs. 0 . 0 0 2 Dividend rate % : N I L

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY (as per monetary term)

Item Code No. (ITC Code) 7 2 0 1 1 1 0 0 0

Production N A

Description N A

Balance Sheet Abstract and Company’s General Business Profile


Jugal Kishore Jhunjhunwala Vishal AgarwalDirector Director

Place : Bhubaneswar

Date : 20.05.2011

www.visasteel .com

Contents

Forward-looking statementsIn this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment

decisions. This report and other statements - written and oral – that we periodically make contain forward-looking statements that set out

anticipated results based on the management’s plans and assumptions. We have tried wherever possible to identify such statements by

using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance in connection with any

discussion of future performance.

We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in assumptions. The

achievements of results are subject to risks, uncertainties, and even inaccurate assumptions. Should known or unknown risks or uncertainties

materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated, or

projected. Readers should keep this in mind.

We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or

otherwise.

Committed to performance. Focused on execution. .........................1

About VISA Steel ...........................................................................................12

Vision and Values ..........................................................................................13

Strategic goals ...............................................................................................14

Strategy and mission...................................................................................15

Financial and operational performance ...............................................16

Chairman’s statement .................................................................................18

Managing Director’s review ......................................................................20

Profile of the Board of Directors ..............................................................22

Societal commitment .................................................................................24

Report of the Directors ...............................................................................26

Management Discussion and Analysis .................................................36

Report on Corporate Governance ..........................................................42

Financial Statements ...................................................................................56

Notwithstanding external and internal challenges, VISA Steel remained committed to its performance-oriented mindset. A mindset that is not daunted by external adversities. A mindset focused on execution excellence. A mindset which prepares the ground for the next level of growth.

And that initial groundwork was business consolidation. As the economy slowly picked up

momentum, enhanced operating efficiencies resulted in better operating margins. But this is just

the beginning. With back-end facilities – Coke Oven, Blast Furnace, DRI Plant, Ferro Chrome Plant

and Power Plant – securely in place, 2010-11 will mark an inflection point for VISA Steel, as it moves

into special steel production from metallic production. This will generate higher margins, new

brand-enhancing clientele and new sources of revenue.

We stand committed to superior performance and execution excellence to create more value for

the customer, the community and the country.

Committed to performance. Focused on execution.

Annual Report 2009-10

Performance entails profitability

The production efficiencies, combined with a relatively favourable economic environment have led to lower input costs, better capacity utilisation and increased profitability.

At VISA Steel, superior performance is measured by robust profitability.

Committed to performance.

Focused on execution.2/3

The operations at the DRI Plant stabilised with the production of 139,299 MT, an increase of 391% over last year’s production of 28,370 MT. Similarly, power generation increased 472% touching 223 million units, hot metal production surged 76% to 150,424 MT, LAM coke production increased 7% to 353,601 MT and ferro chrome production galloped 93% to 47,649 MT.


Competence begets commitment

Our work on the 0.5 million TPA Steel Melt Shop and Bar and Wire Rod Mill is nearing completion.

At VISA Steel, competence and commitment go hand in hand.

4/5Committed to performance.

Focused on execution.

This is just the competence part of the story. However, at VISA Steel, a strong culture of urgency is reflected in ensuring timely commissioning of the facilities.The completion of these facilities mean that the first phase of the Integrated Special Steel Complex will be operational.


Power unleashes possibilities

A 50 MW Power Plant has already been set up and another 25 MW is nearing completion. Our power generation increased 472%, from 39 million units to 223 million units.

At VISA Steel, captive power reduces grid dependence and insulates bottomline.



An additional 2 x 150 MW is planned to be set up in Orissa and 2 x 150 MW in Chhattisgarh to raise the total generation to 675 MW.

This will result in an opportunity to sell a part of the captive power generated, creating another revenue stream, besides of course, the cost advantages and continuous assurance of captive power.


Prudence generates productivity

We plan to integrate backwards to the mining of coal, iron ore and chrome ore. A share of 54 million tonne steam coal reserve has been jointly allotted at Patrapara Coal Block in Talcher, Orissa.

At VISA Steel, business prudence is reflected in ensuring raw material availability, which, in turn, enhances productivity and business sustainability.



Captive iron ore mining leases in Orissa and Chhattisgarh are currently under the process of allotment by the Government. A chrome ore deposit in Orissa is being developed through Ghotaringa Minerals Limited, a VISA Steel subsidiary.

Our current coking coal requirement is met through imports from Australia. We are looking at opportunities to acquire coking coal mines in Australia and Indonesia.


Versatility triggers vigilance

Our cost optimisation measures, along with savings from waste management, reduced overhead costs and materials consumption. Besides, enhanced asset sweating ensured more return on gross block.

VISA Steel’s versatile cost-saving measures reflect proactive management control and round-the-clock vigilance.



VISA Steel has de-risked its business model from fluctuating coking coal prices by buying coking coal on quarterly rates. This provides insulation from spot-rate fluctuations or locking in on higher prices for the full year. Besides, our intelligent working capital management prevented foreign exchange losses and protected the bottomline.


About VISA Steel Part of the Rs.5,000 crore VISA Group.

Registered office in Bhubaneshwar, Corporate Office in Kolkata and manufacturing facilities at Kalinganagar and Golagaon in Orissa and Raigarh in Chhattisgarh.


CurreNt fACIlItIeS At KAlINgANAgAr, OrISSA

facility Capacity Status Pig Iron Plant 225,000 TPA In operation

Coke Oven Plant 400,000 TPA In operation

Ferro Chrome Plant 50,000 TPA In operation

Sponge Iron Plant 300,000 TPA In operation

Power Plant 50 MW In operation

Power Plant 25 MW Nearing completion

Steel Melt Shop 500,000 TPA Nearing completion

Bar & Wire Rod Mill 500,000 TPA Nearing completion

upCOmINg fACIlItIeS IN OrISSA & ChhAttISgArh

Expansion of Special Steel to 1 million TPA & Power generation to 375 MW at Kalinganagar in Orissa.

1 million TPA Steel Plant and 300 MW Power Plant at Raigarh in Chhattisgarh.

VISA BAO –100,000 TPA Ferro Chrome Plant in Orissa, in joint venture with Baosteel.

12/13About VISA

Vision and Values

Values

VisionEmerge as a low cost producer of value added steel products with captive mineral resources and power

transparency – We are transparent and honest in our profession to all our stakeholders

team Work – We work together as a team to benefit from our complementary strengths

passion – We are passionately committed to delivering excellence in performance

governance – We are committed to best standards of safety, corporate social responsibility and corporate governance.

Attitude – We demonstrate ownership in our attitude to create sustainable value for shareholders


Strategic goals

Integrate across value chain with captive mines and power. Leadership in business segment through market share.


Build partnerships with customers

and suppliers.


14/15Strategic goals

Strategy and mission

INTEGRATE ACROSS VALuE CHAIN WITH CAPTIVE MINES AND POWER Securing mining leases for key raw materials – iron ore, coal, chrome ore & coking coal.



LEADERSHIP IN BuSINESS SEGMENT THROuGH MARKET SHARE understand the steel market, identify products with demand growth and set market share goals.


MAxIMIzE SHAREHOLDER VALuE By MARKET CAP AND ROCE Ensure capital allocation for growth to generate better ROCE and Market Cap than industry peers.


BuILD PARTNERSHIPS WITH CuSTOMERS AND SuPPLIERS Be preferred supplier through competitive pricing and high standards of quality and service.


FAMILy OF CAPABLE, MOTIVATED AND HAPPy EMPLOyEES Recruit effectively.




Strategy and mission


Financial and operational performance

Financial highlights

Operational highlights 2009-10 2008-09Hot Metal (MT) 150,424 85,457

LAM Coke (MT) 353,601 331,128

Ferro Chrome (MT) 47,649 24,815

Sponge Iron (MT) 139,299 28,370

Power (million units) 223 39

Operational highlights

11715

06-07 07-08 08-09 09-10

53796828

10405

Total Revenue (Rs. Million)

1976

06-07 07-08 08-09 09-10

464

939 815

EBIDTA (Rs. Million)

474

06-07 07-08 08-09 09-10

205

431

(668)

PAT (Rs. Million)

1256

06-07 07-08 08-09 09-10

424

792

517

Cash Profit (Rs. Million)

16966

06-07 07-08 08-09 09-10

6390

10318

13859

Fixed assets - Gross Block (Rs. Million)

15837

06-07 07-08 08-09 09-10

6220

9959

13192

Fixed assets - Net Block (Rs. Million)

Financial and operational performance16/17

Corporate highlights

Crossed Rs.11,700 millions in revenue

142% growth in EBIDTA

186% increase in Profit before tax

171% increase in Profit after tax

157% increase in Return on Equity

76% increase in Hot Metal production

92% increase in Ferro Chrome production

472% increase in Power generation

Commissioned the second 150,000 TPA Sponge Iron facility in June 2009

Stabilised 2 x 25 MW Power Generation Facility

Significant progress on the additional 25 MW Power Plant, along with the 500,000 TPA Steel Melt Shop and 500,000 TPA Bar and Wire Rod Mill

The Company’s subsidiary, VISA BAO Limited is in the process of setting up a 100,000 TPA Ferro Chrome Plant


Chairman’s Statement

The current year will see

VISA Steel transform from

being the only producer and

seller of Pig Iron, Sponge

Iron, LAM Coke, Ferro

Chrome and Power in India

to becoming one of the

largest players in the Special

Steel industry

It is a matter of pride and deep satisfaction that the Company

has emerged triumphant out of the worst global financial

crisis and extra-ordinary economic environment that we

witnessed in the fiscal 2008-09.

The current year will see VISA Steel transform from being

the only producer and seller of Pig Iron, Sponge Iron, LAM

Coke, Ferro Chrome and Power in India to becoming one

of the largest players in the Special Steel industry, after

commissioning of our Steel Melt Shop and Rolling Mill.

Thereafter, apart from selling Special Steel, the Company will

also keep selling substantial quantities of LAM Coke, Ferro

Chrome and any surplus Power.

The Company is back on the growth trajectory and will build

on our consistent and well executed strategy to grow in the

value added steel products, while being focused on allocation

of captive mines for raw materials and captive power

generation.

VISA Steel shall continue to create value and deliver

sustainable growth while achieving best standards of safety,

corporate governance, corporate social responsibility and

investor communication.

AnnuAl Results

For the year ended 31 March 2010, the Company recorded a

revenue growth of 13% to Rs.11,715 million from Rs.10,405

million in the previous year and the EBIDTA increased to

Rs.1,976 million from Rs.815 million in the financial year 2008-

09. The PAT also surged to Rs.474 million from a loss of Rs.668

million during financial year 2008-09.

Dear Shareholders,The global economy has witnessed a sharp recovery due to the huge fiscal stimulus and infusion of liquidity. Whilst the developed economies are yet to emerge out of the crisis, the growth has been stronger and more sustainable in the BRIC economies, especially India.

Vishambhar Saran

Chairman’s Statement18/19

The growth in revenues have been driven by volume growth

in the Pig Iron, Ferro Chrome and Sponge Iron units, despite

lower price realisations. Lower raw material costs and Captive

Power generation has helped in improving operating margins

and better risk management practices have helped in

avoiding forex losses.

the IndustRy

India continued to be the second fastest growing economy

after China and has emerged as the fourth largest producer

of Steel in the world with demand being driven primarily by

domestic demand from the infrastructure and consumption

led sectors including construction, real estate, automobile,

white goods and oil & gas.

India remains a large exporter of iron ore and importer of

steel. This needs to be corrected by increasing the export tax

on iron ore to discourage exports of this primary raw material

and encourage value addition of this natural resource within

the country.

Due to volatility in coking coal prices, there has been a

shift in pricing mechanism of coking coal to quarterly

benchmark prices instead of annual benchmark prices. This

has significantly reduced risk of what the industry suffered in

2008-09 when coking coal prices were fixed for the full year

and product prices corrected sharply in the middle of the year.

There is a huge growth potential in Steel consumption in

India given that per capita steel consumption is very low

compared to China and the global average. The States of

Orissa, Chhattisgarh & Jharkhand which account for majority

of the iron ore and coal reserves are most attractive locations

for setting up steel plants and we are focused on creating

high quality assets in these locations.

VIsIon & stRAtegy

The Company is focused on its vision to emerge as a low cost

producer of value added Steel products with captive mineral

resources and captive power.

After completion of the Steel Melting & Rolling Mill, the

Company shall rank amongst the top few integrated Special

Steel long product manufacturers. The Company plans to

expand the special steel production in Orissa from 0.5 million

to 1 million TPA and power generation from 75 MW to 375

MW over the next few years.

The Company also plans to start works on its 2.5 million TPA

Steel Plant in Chhattisgarh by setting up a 1 million TPA Steel

Plant and 300 MW Power Plant in the first phase.

Since the Company has already qualified all the required

criteria, it is confident of securing a captive Iron Ore mining

lease in Orissa and Chhattisgarh in the very near future. The

dispute between co-allottees of Patrapada Coal block wherein

the Company has a share of 54 million tonnes has been

resolved. The prospecting work for the Chrome Ore deposit

has also been completed by Ghotaringa Minerals Limited.

VISA Steel and Baosteel Resources have made full equity

contribution in VISA BAO Limited, for setting up an Integrated

Ferro Chrome Complex in Orissa and construction work has

commenced.

outlook

Our revenues and profitability are expected to improve with

the commissioning of our Steel Melt Shop & Rolling Mill. We

shall maintain our growth trajectory in the coming years and

endeavour to become a leader in value added Steel products

to create value for our shareholders and deliver sustainable

growth for the nation.

I would like to place on record my sincere appreciation and

thank the team of VISA Steel for their relentless commitment

and passion to transform the Company’s vision into a vibrant

reality. I am also grateful to the members of the Board of the

Company for their invaluable guidance and contribution.

I would also like to express my sincere thanks to all the

stakeholders for their confidence and faith and to all the

Government and Regulatory Authorities for their valued

support.

Warm Regards,

Vishambhar Saran


Managing Director’s Review

We registered a

substantial growth in

production volumes across

each of our units

The financial year 2009-10 was a year of consolidation at VISA Steel. We have created a robust foundation to elevate ourselves to the next level of growth. We continued to maintain a healthy uptrend over the quarters of financial year 2009-10.

The increase in production volumes across all units has enabled

the Company to register a robust growth in sales revenue,

despite lower realisations of various products. We have lowered

raw material costs (coking coal, iron ore and chrome ore) and

this combined with enhanced operating efficiencies have

resulted in better operating margins. We shall continue to

focus towards high quality of growth and maximization of

shareholder value.

We proactively laid out our plans to insulate against raw

material price volatility and foreign exchange risk. Besides,

we continued our efforts towards improving the HR practices

of the organisation and build a family of capable, happy and

motivated employees.

gRowth In opeRAtIons

During the financial year 2009-10, we registered a substantial

growth in production volumes across each of our units

Hot Metal production increased 76 percent from 85,457 MT

in 2008-09 to 150,424 MT in 2009-10;

LAM Coke production increased 7 percent from 331,128 MT

in 2008-09 to 353,601 MT in 2009-10;

Ferro Chrome production increased 92 percent from 24,815

MT in 2008-09 to 47,649 MT in 2009-10;

Sponge Iron production increased 391 percent from 28,370

MT in 2008-09 to 139,299 MT in 2009-10;

Power generation increased 472 percent from 39 million

units in 2008-09 to 223 million units in 2009-10.

pRogRess of expAnsIon pRojects And

InfRAstRuctuRe deVelopment

The construction of a 0.5 million TPA Steel Melt Shop, a 0.5

million TPA Bar and Wire Rod Mill and an additional 25 MW

Vishal Agarwal

Managing Director’s Review20/21

Power Plant is nearing completion. For the Steel Melt Shop Project, we have completed 90 percent of the Civil Work, 99 percent of Structural Fabrication and 91 percent of Structural erection. For the Bar and Wire Rod Mill, we have completed 78 percent of Civil Work, 76 percent of Structural fabrication and 70 percent of Structural erection.

We continue to rely on the best domestic and international equipment suppliers for our projects with SMS Siemag for EAF and LRF, Concast for Caster, SMS Meer for Bar and Wire Rod Mill and Turbines from BHEL. We also continue to use the best contractors such as GDC for our civil and fabrication work and Areva and ABB for our electrical work to ensure high quality standards. We have also made significant improvement in developing roads, drainage and constructing modern hostel-cum-guest house, canteen and office building.

pRogRess of new pRojects

The Company has acquired 250 acres of land for its steel making and power generation facilities at Raigarh in Chhattisgarh and has completed its Public Hearing and MoEF presentation for Environmental Clearance. VISA BAO Limited, a Joint Venture with Baosteel Resources, China, has started construction work of the 100,000 TPA Ferro Chrome Plant in

Orissa and is close to achieving its financial closure.

effoRts to ImpRoVe RIsk mAnAgement And

contRol systems

After being adversely affected by foreign exchange loss in 2008-09, the Company undertook comprehensive measures. It is now covering 75 percent of forex exposure for each vessel between bill of lading and bill of entry date, resulting in automatic averaging throughout the year and mitigating the risk arising out of volatile exchange rates. Besides, the Company’s SAP-enabled operations and stringent internal audit integrated operations, enhanced transparency and accelerated decision-making.

RAw mAteRIAl cost And mInIng leAses

The Company sources its vital raw materials such as iron ore and chrome ore from the Orissa Mining Corporation, whereas coking coal is imported from Australia under a long-term contract with BHP Billiton. It has also signed a Fuel Supply Agreement with Mahanadi Coalfields Limited for the supply of steam coal.

We have made progress towards the acquisition of mining licenses for backward integration into mining of iron ore,

chrome ore and coal in order to reduce raw material costs. We are also exploring opportunities to buy Coking Coal mines in Australia or Indonesia.

sAles ReAlIsAtIon And sAles mIx

Global financial crisis and demand slowdown resulted in a decline in price realisations across all our products. The demand started to revive in the last two quarters of 2009-10, resulting in margin improvement. We devised marketing strategies to market niche´ products in order to improve market ability and realisations. Our Ferro Chrome which was mainly exported to China, is now being exported to Japan as well.

humAn ResouRce InItIAtIVes

We continue to invest in recruiting young and passionate professionals. They are trained and nurtured to enhance their technical and managerial skills at our Learning Centre and on-the-job training at the shop floor. The Company also inducted fresh engineers and CA/MBAs through campus placements and encouraged them to be a part of the exciting journey at VISA Steel. The Company’s transparent performance appraisal system accelerates decisions on increments and promotions. We are also on the verge of introducing ESOPs. We further improve our team building and encourage family bonding through our annual social activities calendar.

coRpoRAte conscIence

We acknowledge the roles and responsibilities of a corporate citizen. In line with our core business philosophy, concern for Health, Safety and Environment continue to be one of our key priorities. We have installed better safety devices at critical locations under proper supervisions in order to achieve high safety standards. We continue to direct our community development initiatives in the states of Orissa and Chhattisgarh in the areas of education, healthcare, rural development, sports and culture.

I would like to take this opportunity to express my sincere gratitude to our team of professionals for their commitment, dedication and hard work, which has been our primary engine for growth.

Warm Regards,

Vishal Agarwal


Debi Prasad Bagchi, Chairman, Selection Committee

Mr. Bagchi brings to

the Board his deep

knowledge of the

administrative services

and the State of Orissa,

especially in the steel & mining sector. He

has held prestigious positions of authority

like Additional Secretary, Commerce –

Government of India; Secretary, Ministry of

Small Scale Industry – Government of India;

Chief Secretary – Government of Orissa, etc. A

Master of Arts in Economics and an M. Phil in

Public Administration, Mr. Bagchi was also the

Chairman-cum-Managing Director of Orissa

Lift Irrigation Corporation and Managing

Director of Orissa Mining Development

Corporation Limited.

Shiv Dayal Kapoor, Chairman, Audit Committee

Mr. Kapoor has over 41

years of rich experience

in the minerals and

metals industry. He is

the former Chairman

of MMTC Limited and Neelachal Ispat Nigam

Ltd. and had been on the Board of many

renowned Public Sector Enterprises. A B.Sc.

in Metallurgical Engineering from BHu and

an MBA from the university of Leeds, uK,

he is a recipient of the Best Chief Executive

Gold Award – Rajiv Ratna National Award

2005 and Top CEO of the year Award 2000 –

Indian Institute of Marketing & Management,

amongst others.

Pradip Kumar Khaitan, Chairman, Remuneration Committee

Mr. Khaitan is a legal

luminary and has

extensive experience in

the fields of commercial

& corporate laws, tax

laws, arbitration, foreign collaborations,

mergers & acquisitions and corporate

restructuring. Mr. Khaitan is a Bachelor of

Commerce, an LLB and an Attorney-at-Law

(Bells Chamber, Gold Medalist). He is the

Senior Partner of Khaitan & Co., a leading

Indian law firm and also member of the Bar

Council of India, the Bar Council of West

Bengal and the Indian Council of Arbitration.

Profile of the Board of DirectorsProfile of the Board of DirectorsVishambhar Saran, Chairman

Mr. Saran has experience

of almost 41 years in

the iron & steel industry,

with over 25 years with

Tata Steel in the areas of

development & operations of mines, mineral

beneficiation plants and ferro alloy plants,

port operations and international trading of

raw materials for the iron & steel industry.

A mining engineer from BHu, he rose to

the level of Director (Raw Materials) in Tata

Steel before taking over as Chairman of the

VISA Group in 1994. In a short span of time,

he built the VISA Group into a minerals and

metals conglomerate with a strong global

presence in Australia, China, India, Indonesia,

Singapore, South Africa and Switzerland.

He is the Honorary Consul of Bulgaria for

Eastern India.

Maya Shanker Verma, Chairman, Finance & Banking Committee

Mr. Verma is a career

banker with a multilevel

and wide ranging

experience of over 50

years, encompassing

an understanding of the commercial,

developmental and investment banking as

well as asset management and capital market

operations. A Master of Arts and Certified

Associate of the Indian Institute of Bankers,

Mr. Verma held senior-most and critical

positions in India’s financial system and

regulatory regimes like Chairman, State Bank

of India, IDBI Bank and Telecom Regulatory

Authority of India.

Arvind Pande, Chairman, Share Transfer &

Investor Grievance Committee

Mr. Pande has over 41

years of experience

in the Indian

Administrative Services

and the corporate public

sector. He was also Joint Secretary to the

Prime Minister for his expertise in Economics,

Science and Technology. As Director of

the Department of Economic Affairs in the

Ministry of Finance, Government of India,

he has been involved with many World Bank

aided projects. A Bachelor of Science and

Master of Arts in Economics from Cambridge

university, Mr. Pande is the former Chairman

of the Steel Authority of India Limited

and brings to the Company his in-depth

knowledge of the iron & steel industry.

Profile of the Board of Directors22/23

Basudeo Prasad Modi, Deputy Managing Director

Mr. Modi is a Mechanical

Engineer from the

National Institute of

Technology, a Post

Graduate Diploma

holder in Industrial Engineering and an MBA

from the Institute of Business Management,

Madras. He has several decades of rich

experience in the field of Design, Project

Management and Operation. He has worked

at Bokaro Steel Plant, Bhilai Steel Plant,

MECON and was the former Managing

Director of Neelachal Ispat Nigam Ltd.,

Kalinganagar.

Vivek Agarwal, Director

Mr. Agarwal is the

Managing Director

of VISA Resources

Pte Ltd., Singapore

and is responsible for

developing the minerals, metals and shipping

business of the VISA Group and has been

instrumental in the Group’s Joint Venture with

Baosteel. Mr. Agarwal has worked as Senior

Consultant with Booz Allen Hamilton, London,

a global strategy consulting firm for 2 years

till 2004, before joining the VISA Group. He

holds a Masters degree in Manufacturing

Engineering from Trinity College, Cambridge

university. He is also the Chairman of the

Expert Committee on External Trade and WTO

at the Indian Chamber of Commerce.

Vishal Agarwal, Managing Director

Mr. Agarwal has over 13

years experience in the

iron & steel industry with

hands on experience of

setting up greenfield

projects, having successfully established the

plants at Golagaon and Kalinganagar. He

is responsible for overall management of

operations and projects and is the driving

force behind many of the Company’s strategy,

finance, marketing and human resource

initiatives. He holds a Bachelors degree

in Economics from the London School of

Economics and a Masters degree in Economics

for Development from Oxford university. He is a

Committee Member of the CII - Eastern Region

Council and Indian Chamber of Commerce.

Vikas Agarwal, Director

Mr. Agarwal is

responsible for

developing and

nurturing the global

coal and coke business

of the VISA Group and has been instrumental

in securing investments in the Group’s coal

mining ventures in Australia and Indonesia.

He holds a Masters degree in Manufacturing

Engineering from Trinity College, Cambridge

university and is currently the Managing

Director of VISA Power Limited and VISA Coal

Pty Limited.

Shanti Narain, Director

Mr. Narain brings with

him his expertise in

strategic management

transport systems,

especially the Railways,

in the areas of planning, marketing,

monitoring and control of operations &

commercial activities and development of

transport infrastructure. He holds a Masters

degree in Science (Mathematics) and had

been the Member, (Traffic) Railway Board for

4 years till February 2001. He is a member of

several committees set up by the Government

of India and professional societies.

Saroj Agarwal, Director

Mrs. Agarwal laid the

foundation of the VISA

Group during the mid-

eighties. She guides the

organisation along its

growth chart, while upholding its values and

spirit. A Bachelor of Arts from BHu, she takes

an active interest in philanthropic activities

and contributes to the community through

the VISA Trust where she is a trustee.

She is currently the Managing Director

of VISA International Limited and VISA

Infrastructure Limited.


Societal commitmentVISA Steel ardently believes in business sustainability, driven by multiple corporate initiatives.

EDuCATIONAt VISA Steel, we truly believe in igniting young minds and in shaping the future of young India. In our endeavours to further

the cause of education we have taken the following steps:

Established two premier educational institutions in Kolkata – The Heritage School and The Heritage Institute of Technology,

through the Kalyan Bharti Trust

Introduced scholarship opportunities for brilliant and needy students

Offers scholarships to disadvantaged girl students at the Smt. Sarala Devi Saraswati Balika Inter College in the Tilhar district of

Shahjahanpur, uttar Pradesh

Provided facilities such as libraries and science labs to enhance computer literacy at the Smt. Sarala Devi Saraswati Balika

Inter College in the Tilhar district of Shahjahanpur, uttar Pradesh

The VISA Trust is exploring and identifying for opportunities for setting up world class, professionally managed kindergarten,

primary and secondary schools in Bhubaneswar and Chhattisgarh, with full facilities for extracurricular activities and sports in the

near future.

HEALTHhealth has been identified as a primary objective in the community development process. the following healthcare

initiatives are undertaken on a regular basis:

Organised medical check-up camps in the backward areas of Orissa and West Bengal

Contributed to the construction of a blood bank in Jajpur, Orissa

Engaged in raising awareness on the treatment of common diseases and hygiene; along with providing free medicines and

medical facilities

RuRAL DEVELOPMENTIn a country like India, where more than 60% of the population depend on agriculture, rural development remains critical for

social empowerment. the Company’s initiatives in this segment comprises the following:

Installed bore-wells for providing clean drinking water in the backward areas of Orissa

Provided employment according to the rehabilitation policy of the Government

Societal commitment24/25

Constructed boundary wall for the local school in Jajpur, Orissa

Contributed substantially towards renovation of various temples in Orissa

Initiated beautification of traffic island at Power House in Bhubaneswar

upgradation of primary schools in Kotmar and Patrapalli villages in Chhattisgarh to be done

Water tanks to be constructed for locals of Kotmar and Patrapalli villages in Chhattisgarh

ENVIRONMENTConcern for the environment has also been a top priority on the VISA agenda. the Company has implemented the following

initiatives to showcase the importance that it gives to environmental issues:

Launched water harvesting initiatives to protect ground water levels

Planted 43,000 trees in and around the plant through a plantation drive; more plantation schemes in the offing

SPORTS AND CuLTuREActively promotes contemporary Indian art through exhibitions and organises painting competitions to promote talented

young artists:

Sponsors the VISA Cup Annual Ladies Golf Tournament at the Tollygunge Club in Kolkata

Sponsors sporting activities, particularly cricket tournaments in Kotmar and Patrapalli villages in Chhattisgarh

Additionally, VISA has strengthened its employee relations strategies to ensure a safe environment conducive to personal and

professional growth

The organisation’s attempt is to give its workforce a quality life. As such, the Company implements safety training sessions for the

benefit of both employees and contract labour. Posters exhorting the incorporation of safety measures, motivational aspects and

daily inspection of workers, also feature among the Company’s proactive initiatives.


The outlook for the Iron and Steel Industry in India remains extremely positive as the increase in expenditure by the Government of India in the infrastructure development of the country will boost the demand for Iron & Steel products


Dear Shareholders,Your Directors take immense pleasure in presenting this Fourteenth Annual Report together with the audited accounts of the

Company for the year ended 31 March 2010.

Financial Results(Rs. Million).


Net Revenue 11,569.42 10,350.06


Total Income 11,714.83 10,404.60

Profit before interest, depreciation & tax 1,976.36 815.47

Interest (Net) 651.40 321.54


Profit before Exceptional Item and Taxation 856.78 186.02

Exceptional Item – Loss on Exchange Fluctuation (net) - 1,184.67

Profit before Taxation 856.78 (998.65)

Taxation – Current 96.00 -

– Deferred 286.62 (334.71)

– Fringe Benefit Tax - 4.20

Profit after Tax 474.16 (668.14)

Appropriation - Proposed Dividend 110.00 -

- Corporate Tax on Dividend 18.69 -

Balance Carried to Balance Sheet 310.10 (35.37)

Report of the Directors26/27

OPeRatiOnsYour Company is engaged in the business of manufacturing Iron and Steel products such as Pig Iron, Coke, Ferro Chrome and Sponge Iron. During the year under review, the increase in production volumes across all Units has enabled the Company to register a robust growth in sales revenue inspite of lower sales realisation of the various products. The lower cost of raw materials such as Coking Coal, Iron Ore and Chrome Ore and better operating efficiencies have resulted in better operating margins. We continue to drive our low cost competitiveness due to our strategic location, efficient raw material procurement and captive power generation.

The outlook for the Iron and Steel Industry in India remains extremely positive as the increase in expenditure by the Government of India in the infrastructure development of the country will boost the demand for Iron & Steel products.

During the year under review, your Company registered substantial growth in production volumes across all operating units. The production of Hot Metal grew 76% to 150,424 MT from 85,457 MT in the previous year. The production of Coke also increased by 7% to 353,601 MT compared to 331,128 MT in the previous year. The production of Ferro Chrome registered a staggering growth of 92% to 47,649 MT in comparison to 24,815 MT during the previous year. The Sponge Iron Plant produced 139,299 MT of Sponge Iron during 2009-10 as against 28,370 MT of Sponge Iron during 2008-09. The power generated during the year was 223 million units as against 39 million units in the previous year, an increase of over 472% and was used mainly for captive consumption.

Your Company has registered a revenue growth of over 13% amounting to Rs.11,714.83 million in FY’ 2009-10 compared to Rs.10,404.60 million during the FY’ 2008-09. The operating margins increased by 142% at Rs.1,976.36 million in FY’ 2009-10 as against Rs.815.47 million in the previous year. The PBT was Rs.856.78 million for FY’ 2009-10 as against loss of Rs.998.65 million and PAT was Rs.474.16 million as against loss of Rs.668.14 million for the corresponding period.

The Company is in the final stages of completing project work on the 0.5 million TPA Steel Melt Shop, 0.5 million TPA Bar and Wire Rod Mill and 3rd 25 MW Power Plant and expects to commence production by December 2010. This will further boost the Company’s growth in revenues and margins.

Your Company has started preparatory work for expanding the existing facility at Kalinganagar in Orissa from 0.5 million TPA to 1 million TPA Steel Plant and Power Plant from 75 MW to 375 MW and set up greenfield facility of 1 million TPA Steel Plant and 300 MW Power Plant at Raigarh in Chhattisgarh. The plan is to raise the total Steel production of the Company to 2 million TPA and power generation to 675 MW over the next few years and provide the foundation to maintain high quality growth and enhance value creation for its shareholders.

The Company’s subsidiary – VISA BAO Limited, has initiated steps for implementation of a 100,000 TPA Ferro Chrome Plant at Kalinganagar in Orissa.

A detailed analysis of your Company’s operations, segment-wise performance, project review, risk management, strategic initiatives and financial review & analysis, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is presented under a separate section titled “Management Discussion & Analysis Report” forming part of the Annual Report.

DiviDenDIn view of the performance of your Company, your Directors recommend a dividend of 10% for the year ended 31 March 2010 i.e., Rs.1 per Equity Share in respect of 110,000,000 fully paid up Equity Shares of Rs.10 each. The total outlay on account of dividend payment will be Rs.110 million excluding Rs.18.69 million on account of dividend distribution tax.

HOlDing cOmPanySubsequent to the inter-se transfer of shareholding between the Promoter Group companies i.e. from VISA Minmetal AG to VISA Infrastructure Limited, VISA Infrastructure Limited has become the holding company of your Company with effect from 30 April 2010.

subsiDiaRiesYour Company has two subsidiaries namely, VISA BAO Limited and Ghotaringa Minerals Limited:

(i) VISA BAO Limited (VBL) is a Joint Venture between your Company and Baosteel Resources Co. Ltd., China. VBL has initiated steps for implementation of a 100,000 TPA Ferro Chrome Plant in Orissa.


(ii) Ghotaringa Minerals Limited (GML) has been incorporated to give effect to the joint venture agreement between your Company and Orissa Industries Limited (ORIND) for carrying out the business of mining of chrome ore and/or other minerals. GML is currently carrying out drilling & prospecting work over an area allotted to ORIND in Dhenkanal, Orissa.

Your Company’s investment in GML will enable the Company to directly procure chrome ore, mined by GML, for its Chrome Ore Beneficiation Plant, Chrome Ore Grinding Plant and the Ferro Chrome Plant which shall reduce raw material costs significantly.

The audited accounts of VBL and GML for the year ended 31 March 2010 are attached as required under Section 212 of the Companies Act, 1956.

PROmOteR gROuP cOmPanies The names of Promoters and Companies comprising the “Group” as defined in the Monopolies and Restrictive Trade Practices Act, 1969, have been disclosed in the Annual Report for the purpose of Regulation 3(1)(e) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

DiRectORs In accordance with the Article 158 of the Articles of Association of the Company, Mr. Debi Prasad Bagchi and Mr. Maya Shanker Verma, Directors, are liable to retire by rotation, at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Mr. Arvind Pande, who is also due to retire at the forthcoming Annual General Meeting, had informed the Company that he does not wish to seek re-appointment. A resolution pursuant to Section 256 of the Companies Act, 1956, for not filling the vacancy caused by the retirement of Mr. Arvind Pande has been included in the Notice of the 14th Annual General Meeting. The Board has taken on record the immense contribution made by Mr. Pande during his tenure as a Director of the Company.

DiRectORs’ ResPOnsibility statementIn terms of the provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors state:

a. That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 and for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. That the Directors had prepared the annual accounts on a going concern basis.

Your Company’s internal auditors, M/s. L.B. Jha & Co., Chartered Accountants, have conducted periodic audits to provide reasonable assurance that established policies and procedures are being followed.

ceO / cFO ceRtiFicatiOn A Certificate from the Managing Director and the Chief Financial Officer, pursuant to Clause 49(V) of the Listing Agreement had been tabled at the Board Meeting held on 19 May 2010 and is also annexed to this Report.

auDitORsThe Auditors of the Company, M/s. Lovelock & Lewes, Chartered Accountants, Kolkata, retire at the conclusion of the ensuing Annual General Meeting and have confirmed eligibility and willingness to accept the office of Auditors, if approved.

PaRticulaRs OF cOnseRvatiOn OF eneRgy, tecHnOlOgy absORPtiOn anD FOReign excHange eaRnings anD OutgO Information pursuant to Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 in respect of Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgo is given in Annexure I forming part of this Report.

Human ResOuRces Your Company places significant emphasis on recruitment, training & development of human resources, which assumes utmost significance in achievement of corporate objectives. Your Company integrates employee growth with organisational growth in a seamless manner through empowerment and by offering a challenging workplace, aimed towards realisation of organisational goals. To this effect, your Company has a training centre at its Plant for knowledge-sharing and imparting need based training to its employees. The Company has also incorporated Performance Management System in SAP for performance appraisal of the employees. To ensure accommodation, hospitality and other facilities for its employees, your Company has set up a modern guest house at Kalinganagar.


The information required under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended are set out in Annexure II to this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 read with Clause 32 of the Listing Agreement, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining a copy of the statement may write to the Company.

EmployEEs stock optionYour Company had introduced an Employee Stock Option Scheme by the name “Employee Stock Option Scheme 2008” (the “Scheme”) for permanent employees including any Director of the Company, whether whole-time or otherwise, of the Company to be administered by the Remuneration Committee of the Board of Directors of your Company.

Information as per Clause 12 of SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 is given in a separate statement as Annexure-III forming part of this Report.

The Board of Directors of your Company has proposed rescinding the existing Scheme and introducing a new Scheme (ESOP Scheme 2010) in accordance with the SEBI Guidelines. Accordingly, appropriate resolutions are being moved at the ensuing Annual General Meeting which the Board recommends for your approval.

FixeD DePOsitsYour Company has not accepted or renewed any fixed deposits under section 58A of the Companies Act, 1956.

cOnsOliDateD Financial statementsIn terms of Clause 32 of the Listing Agreement with Stock Exchanges, Consolidated Financial Statements, conforming to Accounting Standard 21 issued by the Institute of Chartered Accountants of India, are attached as a part of the Annual Report.

cORPORate gOveRnance Your Company is committed in maintaining the highest standards of Corporate Governance and adheres to the stipulations prescribed under Clause 49 of the Listing Agreement with the Stock Exchanges. A Report on Corporate Governance & Shareholder Information together with the Auditors’ Certificate thereon is annexed as part of the Annual Report.

Your Company had also adopted a “Code of Conduct” for its Directors and Senior Management, as required under Clause 49 of the Listing Agreement and all Directors and Senior Managers have affirmed compliance with the Code for FY’ 2009-10. A certificate, signed by the Managing Director,

affirming compliance of Directors & Senior Management, forms part of the Report on Corporate Governance.

acknOwleDgementYour Directors record their sincere appreciation for the

assistance, support and guidance provided by banks,

financial institutions, customers, suppliers, regulatory &

government authorities, project & other business associates

and stakeholders. Your Directors also thank the employees of

the Company for their contribution and commitment towards

your Company performance and growth during the period

under review.

Your Directors value your involvement as shareholders and

look forward to your continuing support.


Vishal Agarwal

Managing Director

Kolkata Basudeo Prasad Modi

12 July 2010 Deputy Managing Director


annexuRe i tO tHe RePORt OF tHe DiRectORsStatement of particulars required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988

a. conservation of energy


1. 3rd TG of 25 MW capacity has been commissioned for utilising the waste char & coal fines generated from Sponge Iron Plant.

2. Reduction in specific consumption of Coke per MT of Hot Metal due to reduction in moisture content of Coke.

3. 160 t/hr. CFBC Boiler is being installed to utilise the waste char and coal fines generated from Sponge Iron Plant.

4. ABC fans at DRI have been installed to produce additional heat for utilisation in the waste heat boilers in DRI Plant.

5. Manganese ore consumption in Blast Furnace has been mostly stopped & use of magnesite in Ferro Chrome Plant has been stopped.

(b) Additional Investment and Proposals, if any, being implemented for reduction of consumption of energy:

1. Coke pusher car track is being repaired for smooth operation of Coke Oven Plant.

2. Coke pusher no. 2 will be renovated to improve machine availability.

3. Additional magnetic separator is being installed in DRI to recover magnetic particles going into oversize.

4. To increase Heat input to Coke Oven Waste Heat Boilers by making arrangements to prevent re-circulation of cool air and mixing with flue gas.

(c) Impact of Measures in (a) and (b) above have resulted in:

1. Saving in electrical energy.


3. Effective utilisation of solid waste like char and coal fines.

(d) Total Energy Consumption and Energy Consumption per Unit of Production (as per Form “A” below)

FORm a2009 - 10 2008 - 09

a. Power & Fuel consumption 1. Electricity

(a) Purchased Unit (Kwh) 35,501,800 98,325,200 Total Amount - (Rs. Million) 131.97 333.48 Rate / unit - (Rs.) 3.72 3.39(b) Own Generation (i) Through Diesel Generator Unit 3,475 10,824 Units per ltr. of diesel oil (Kwh) 2.8 1.44 Cost/unit – (Rs.) 13.92 21.47 (ii) Through Steam Turbine / Generator Unit (Kwh) 223,283,900 32,972,575 Units per ltr. of fuel oil/gas NIL NIL Cost/units – (Rs.) NA NA

2. Coal (Coking and non-coking coal at Coke Oven & DRI)Quantity (MT) 811,448 554,947 Total Cost - (Rs. Million) 4,615.92 6,378.68 Average Rate – (Rs.) 5,688.50 11,494.21

3. Furnace Oil Quantity (k. ltrs.) NIL NIL Total Amount - (Rs. Million) NIL NIL Average Rate NIL NIL


2009 - 10 2008 - 094. Coke

Quantity (MT) 127,337 76,135 Total Cost - (Rs. Million) 1,597.39 1,479.88Rate / Tonne – (Rs.) 12,544.56 19,437.54

b. consumption per unit of production Products (with details) 1. Production of Pig Iron including by-products MT 150,424 85,457

Electricity Kwh 174.07 172.46Furnace Oil Ltr. NIL NILCoal Kg. NIL NILCoke Kg. 681.03 683.38

2. Production of Coke including by-products MT 353,601 331,128Electricity Kwh 9.39 9.85Furnace Oil Ltr. NIL NILCoal (Hard, Semi Hard & Semi Soft Coking Coal) Kg. 1,454.46 1,495.40

3. Production of Ferro Chrome including by-products MT 47,649 24,815Electricity Kwh 3,668.45 4,139.88 Furnace Oil Ltr. NIL NILCoke Kg. 522.46 620.23

4. Production of Sponge Iron including by-products MT 139,299 28,370Electricity Kwh 134.77 151.58 Furnace Oil Ltr. NIL NIL Coal (Non-Coking Coal) Kg. 2,133.16 2,107.12

5. Production of Chrome Concentrate & Chrome powder MT 2,412 10,683Electricity Kwh 76.29 40.74 Furnace Oil Ltr. NIL NILCoke Kg. NIL NIL

FORm b


b. technology absorption



(a) Use of coke briquette in Ferro Chrome Plant.

(b) The Pig Iron yield has been improved due to modification of moulds and installation of movable trolley. This has also

reduced jamming of Pig Casting Machine.

(c) Controlled cooling of Coke resulting in less moisture in the coke.

(d) Installation of Metal Recovery Plant and further modification in Ferro Chrome Plant to recover Ferro Chrome from the

crushed slag and mixed metals.

(e) Coke pusher car track is being repaired to improve efficiency & consistency.

(f ) Use of Iron ore fines of Blast Furnace in Sponge Iron Plant.



(a) Increase in the sales realisation of Hot Metal.

(b) The pig iron yield has improved which has higher value compared to scrap.

(c) Higher the moisture in the coke, higher will be the coke rate in the Blast Furnace. The reduced coke rate is due to less

moisture in the coke.

(d) The specific consumption of chrome ore is reduced due to higher yield of Ferro Chrome.

(e) Reduction in cost of Ferro Chrome due to non consumption of magnesite.

(f ) Reduction in the cost of Sponge Iron.


(a) Use of Coke breeze for making composite chrome ore briquette, thereby reducing the specific consumption of sized

coke in Ferro Chrome production, resulting in reduction in cost of Ferro Chrome.

(b) Modification in the pig casting machine to be done to improve the pig iron yield further.

(c) Installation of Sinter Plant for effective use of Blast Furnace wastes, Iron ore fines & Coke breeze.

technology absorption, adaptation and innovation

a. Imported technology

2005-06 2006-07 2007-08 2008-09 2009-10

400,000 TPA

Environment friendly

Clean type Non-recovery

Coke Oven Technology

Electrode handling technology

for Ferro Chrome Plant.

0.5 MTPA Steel Melting

Technology consisting of EAF,

LRF etc.

0.5 MTPA Bar & Wire Rod Mill

Technology.

NIL NIL

b. Year of Import: as given above

c. Has technology been fully absorbed:

Coke Oven Technology and Electrode handling technology has been fully absorbed.

d. If not fully absorbed, areas where this has not taken place, reasons there for and future plan of action:

The Steel Melting Technology and Bar & Wire Rod Mill Technology are under implementation.


Foreign exchange earnings and Outgo

Particulars under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988

a) Activities relating to exports; initiatives taken to increase exports; development of new products and services; and export

plans:

The Company realises the importance of a long term presence in the global market and has taken initiative to increase

exports. During 2009-10, the export volume of Ferro Chrome has gone up from 28,108.54 to 38,827.45 showing a growth of

38.13%. Your Company exports to various customers in China, Japan and Korea.

b) Total Foreign Exchange used and earned:

(Rs. Million)


Foreign exchange earnings

Export Sales 1,952.94 2,395.82

Foreign exchange Outgo

Imports

• Raw Materials 2,762.86 6,690.30

• Finished Goods 816.00 190.63

• Capital Goods 38.08 16.08

Traveling 3.03 1.68


Others 0.98 56.74*

*Including dividend paid in foreign currency amounting to Rs. 56.21 million.


annexuRe iiiannexure to the Directors’ Report to the shareholders employee stock Option scheme

Statement as at 31 March 2010, pursuant to Clause 12 (Disclosure in the Directors’ Report) of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as amended:

Particulars Details

(a) Total number of Options granted during the year NIL

(b) The pricing formula Exercise price is equal to the latest available closing price of the Equity Shares on the stock exchange where there is highest trading volume on which the shares of the Company are listed on the date prior to the date on which the specific number of options to be granted to the employees is finalised.

(c) Options vested (as of 31 March 2010) NIL

(d) Options exercised during the year NIL

(e) The total number of shares arising as a result of exercise of option (as of 31 March 2010)

NIL

(f ) Options lapsed during the year NIL

(g) Variation of terms of options upto 31 March 2010 -

(h) Money realised by exercise of options during the year (Rs.) NIL

(i) Total number of options in force (as of 31 March 2010) NIL

(j) Employee wise details of options granted to:-

(i) Senior Managerial personnel; NIL

(ii) any other employee who received a grant in any one year of option amounting to 5% or more of options granted during that year;

NIL

(iii) identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant.

NIL

(k) Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of Option calculated in accordance with Accounting Standard (AS) 20 ‘Earnings Per Share’

-

(l) Where the company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognised if it had used the fair value of the options, shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed.

-

(m) Weighted-average exercise prices and weighted-average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock

-

(n) A description of the method and significant assumptions used during the year to estimate the fair values of options, including the following weighted-average information:

-

(i) risk-free interest rate,

(ii) expected life,

(iii) expected volatility,

(iv) expected dividends, and

(v) the price of the underlying share in market at the time of option grant.

The Company has received a certificate from the Auditors of the Company that the Scheme has been implemented in accordance with

the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999,

and the resolution passed by the Members by Postal Ballot on 8 September, 2008.



The Board of Directors 19 May 2010VISA Steel LimitedKolkata 700 071

Persons constituting group coming within the definition of “group” as defined in the Monopolies and Restrictive Trade Practices

Act, 1969 include the following:

bodies corporate individual PromotersVISA Minmetal AG Vishambhar SaranFar East Trading AG Saroj AgarwalFar East Chartering Limited Vishal AgarwalVISA GMR Limited Vikas AgarwalVISA Resources Pte Limited Vivek AgarwalVISA Global Mineral Resources SA (Proprietary) Limited Vishambhar Saran & Sons (HUF)VISA Bulk Shipping Pte LimitedVISA Coal Pty LtdVISA Chartering LimitedVISA Group LimitedPT VISA IndoVISA Infrastructure LimitedVISA International LimitedVISA Power LimitedVISA Comtrade LimitedVISA BAO LimitedGhotaringa Minerals LimitedNorth East Resources LimitedKhandadhar Minerals LimitedVISA Realty LimitedVISA Minmetal LimitedTastebuds Gourmet Foods Pvt. Ltd.

Vishal Agarwal Manoj Kumar DiggaManaging Director Chief Financial Officer

Pursuant to the provisions of Clause 49(V) of the Listing Agreement, we, Vishal Agarwal, Managing Director and Manoj Kumar Digga, Chief Financial Officer hereby certify that:

(a) we have reviewed the financial statements and the cash flow statement for the year 2009-10 and that to the best of our knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

(ii) these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.

(b) there are, to the best of our knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the company’s code of conduct.

(c) we accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and there have been no deficiencies in the design or operation of such internal controls.

(d) we have indicated to the auditors and the Audit committee that:






The financial year 2009-10 was an important year for the Company where we have shown robust recovery and emerge as a stronger Company to deliver enhanced shareholder value over the coming years

OveRviewThe financial year 2009-10 was an important year for the

Company where we have shown robust recovery and emerge

as a stronger Company to deliver enhanced shareholder value

over the coming years. Your Company registered a healthy

performance during 2009-10 with a 13% growth in revenues

to Rs.11,714.83 million, 142% growth in EBIDTA to Rs.1,976.36

million, 186% increase in PBT to Rs.856.78 million and 171%

rise in PAT to Rs.474.16 million.

inDustRy stRuctuRe anD DevelOPmentssteel industry OverviewThe global economy has witnessed a sharp recovery largely

driven by the large stimulus packages announced by various

countries which has created liquidity and stimulated demand,

leading to the speedy recovery of the world GDP growth.

The Chinese and Indian economies have been the fastest

economies to recover.

The steel industry has also seen a strong recovery in demand

and increase in production volumes especially in China

and India. However, this has once again put pressure on

raw material availability and prices. From a net exporter of

Coking Coal and Coke, China has become a net importer of

Coking Coal. As a consequence of China importing significant

quantity of Coking Coal, prices of Coking Coal have increased

from USD 128 to USD 200 per MT. Due to the volatility in

Coking Coal prices over the last couple of years, there has

been a shift in pricing mechanism for Coking Coal to quarterly

benchmark prices instead of annual benchmark prices.

China continues to drive the global steel industry with a

production of approx. 570 million tons in 2009 which equates

to 50% of global Steel production. Chinese Steel demand

continues to be driven by large capital expenditure and

government infrastructure projects across the country.

The Indian economy grew at 7.2% in 2009-10 against 6.7% last

year which shows a remarkable turnaround. The economy is

likely to grow at approx. 8 to 10% over the next decade driven

by the infrastructure (power, road, railways, ports etc.) and

consumption (automobile, real estate etc.) sectors which will

result in robust growth in demand for various iron and steel

products.

The States of Orissa, Chhattisgarh and Jharkhand which

account for majority of the iron ore and coal reserves in the

country will remain the most attractive locations for setting

up iron and steel manufacturing capacity.

Management Discussion and Analysis36/37

company OverviewYour Company’s current saleable products include Iron and

Steel products such as Pig Iron, Coke, Ferro Chrome and

Sponge Iron. Going forward, your Company will consume the

Pig Iron and Sponge Iron captively in manufacturing of Steel.

Your Company has made notable progress on the setting up

of the 0.5 million TPA Steel Melt Shop and 0.5 million TPA Bar

& Wire Rod Mill and additional 25 MW Power Plant. The said

facilities, once commenced, would bring in strong growth in

revenues and margins for the Company.

business Review The current business of your Company comprises of manufacturing of Iron and Steel products such as Pig Iron, Coke, Ferro Chrome and Sponge Iron.

The manufacturing facilities of your Company are situated at Kalinganagar which includes Blast Furnace, Coke Oven, Ferro Chrome, Sponge Iron and Power and at Golagoan in Orissa where the Chrome Ore Beneficiation & Chrome Ore Grinding Plants are located.

iron & steel Products(a) Pig iron The Blast Furnace with a total capacity of 225,000 TPA

is currently producing Hot Metal which is poured into

moulds to produce Pig Iron. Basic grade Pig Iron is sold

to various Steel plants in eastern India while foundry

grade Pig Iron is sold to major customers in eastern and

northern India.

The total hot metal production during 2009-10 was

150,424 MT as compared to 85,457 MT of hot metal in

2008-09 thereby registering a growth of 76%.

The main raw materials for the Blast Furnace are Iron

Ore and Coke. During the second half of year under

review, supply of Iron Ore from OMC’s Daitari Mines and

Gandhamardan mines had been hampered which has

affected production volume. Coke was utilised mainly

from the Coke Oven Plant.

Pig iron sales contributed to 21% of the total sales of the

Company during the year under review, amounting to

Rs.2,562.29 million.

(b) coke The Coke Oven Plant, with a total capacity of 400,000

TPA, operates on the stamp-charging heat recovery

technology which allows blending of semi-soft and

semi-hard Coking Coals with prime hard Coking Coals to

produce Low Ash Metallurgical Coke.

The total coke production during 2009-10 was 353,601

MT compared to 331,128 MT in 2008-09 thereby

registering a growth of 7%. Coking coal, the primary

raw material for producing coke, was imported from

Australia. Coke was partly consumed in the Blast Furnace

and partly sold with total sales contribution amounting

to Rs.3,312.33 million, equating to 28% of total sales.

(c) Ferro chromeThe Ferro Chrome Plant, with a total capacity of 50,000

TPA produced 47,649 MT of Ferro Chrome in 2009-

10 compared to 24,815 MT in 2008-09 showing a

substantial improvement in production of 92% over

previous year. The Ferro Chrome sales contributed 21%

of total sales during the year amounting to Rs.2,517.48

million.

(d) sponge ironThe Sponge Iron Plant having total capacity of 300,000

TPA produced 139,299 MT of Sponge Iron during 2009-

10 as against 28,370 MT during 2008-09 when only 50%

of its capacity was in operation. Being fully operational

now, it contributed 14% of the total sales amounting to

Rs.1,731.08 million.

The main raw materials for Sponge Iron Plant are Iron

Ore and Thermal Coal. Whilst Iron Ore is procured from

OMC, Patnaik Minerals and Rungta Mines, the Coal is

procured mainly from Mahanadi Coalfields Limited

besides using Imported Coal.

(e) PowerThe Power Plants produced 223 MKWH of power

during the year 2009-10 as against 39 MKWH produced

during 2008-09 showing a growth of 472%. The Power

produced was mainly used captively.


PROJect OveRview The following projects are under execution:

steel melt shop – a 70 ton Electric Arc Furnaces (EAF) with

LRF, VD and a Continuous Casting Machine with a Billet/

Bloom Caster to manufacture 0.5 million TPA of Special Steel.

Rolling mill – a 0.5 million TPA Bar and Wire Rod Mill supplied

by SMS Meer, Germany.

Power Plant – an additional 25 MW Power generation with

CFBC Boiler.

associated infrastructure facilities – water pipelines, roads,

drainage, railway siding, stockyards, buildings and colony etc.

stRategic initiativesJoint venture with baosteelVISA BAO Limited, a subsidiary of your Company is in the

process of setting up a 100,000 TPA Ferro Chrome Plant at

Kalinganagar Industrial Complex.

Project expansionYour Company has started preparatory work for expanding

the existing facility at Kalinganagar in Orissa from 0.5 million

TPA to 1 million TPA Steel Plant and Captive Power Plant from

75 MW to 375 MW and set up greenfield facility of 1 million

TPA Steel Plant and 300 MW Captive Power Plant at Raigarh in

Chhattisgarh. The plan is to raise the total Steel production of

the Company to 2 million TPA and power generation to 675

MW over the next few years and provide the foundation to

maintain high quality growth and enhance value creation for

its shareholders.

Your Company has also taken necessary steps for securing its

raw material requirements and integrating backwards into

mining of Iron Ore, Coal and Chrome Ore.

OPPORtunities anD tHReatsYour Company is poised to seize the opportunities in the

Iron & Steel Industry (both for steel & intermediary saleable

products) through its strengths of locational and logistical

advantages, raw material linkages, technology edge and

management expertise. These opportunities will be linked

directly to the growing demand from the automobile and

auto components, infrastructure, construction and power

sectors. Your Company’s strategic location in Kalinganagar

offer scope for seamless value addition in its manufacturing

process from hot metal to stainless steel. Your Company is

also well positioned in its conscious adherence to a modular

project implementation, thereby enabling ploughing of

internal accruals in future projects, thereby reducing costs

related to financing.

The threats for your Company would come from adverse

fluctuations in input and capital costs, foreign exchange

variations and taxes & duties. The buoyancy in the Iron &

Steel Sector has attracted many players, resulting in reduced

availability of skilled manpower and contractor workforce.

Delay in implementation of project may lead to opportunity

loss in revenue generation and rise in costs.

Risk managementYour Company has identified major focus areas for risk

management to ensure organisational objectives are achieved

and has a well defined structure and proactive approach to

assess, monitor and mitigate risks associated with these areas,

briefly enumerated below:

a) Project implementation – Project status is monitored

on a regular basis by the project management team to

counter slippages and reviewed on a monthly basis by

the executive management. Consultants are present on-

site for mitigating contingencies on the implementation

front. Necessary coverage has been taken in the form of

an extensive Erection All Risk Policy.

b) Foreign Exchange – Your Company deals in sizeable

amount of foreign exchange in imports of capital items

and raw materials and exports of finished products.

A comprehensive and robust forex policy has been

formulated for insulating the Company by hedging

foreign exchange exposure.

c) Systems – Your Company has implemented SAP, the

leading software for Enterprise Resource Planning, to

integrate its operations and to use best business and

commercial practices.

d) Statutory compliances – Procedure is in place for

monthly reporting of compliance of statutory

obligations and reported to the Board of Directors at its

meetings.


Rs. in Million

2009-10 2008-09 change Percent

Net Sales / Income from Operations 11,569.42 10,350.06 1,219.36 12

Other Income 145.41 54.54 90.87 167

total income 11,714.83 10,404.60 1,310.23 13

expenditure

(Increase) / decrease in stock (176.82) (237.13) 60.31 (25)

Raw Materials consumed 6,866.18 8,148.87 (1,282.69) (16)

Purchase of Trading Products 1,447.24 190.63 1,256.61 659

Employee Cost 327.88 208.27 119.61 57

Other expenses 1,273.99 1,278.49 (4.50) -

Operating Profit excluding exceptional item 1,976.36 815.47 1,160.89 142

Interest & Finance Charges (Net) 651.40 321.54 329.86 103

Depreciation 468.18 307.91 160.27 52

Profit before exceptional item and tax 856.78 186.02 670.76 361

Loss on Exchange Fluctuation (Net) - 1,184.67 - -

Profit before tax 856.78 (998.65) 1,855.43 186

Provision for Tax 382.62 (330.51) 713.13 216

Profit after tax 474.16 (668.14) 1,142.30 171

cash Profit 1,255.73 516.51 739.22 143

Finance Review anD analysis Your Company reported revenues of Rs.11,714.83 million, registering a 13% increase over 2008-09 and PAT increased from a loss

of Rs.668.14 million to a profit of Rs.474.16 million during FY’ 2009-10.

Highlights

sales & Other income

Sales growth was primarily driven by the Pig Iron, Sponge Iron

and Ferro Chrome business on the back of improved volumes.

Other Income constitutes mainly income from sale of scrap,

DEPB licence, receipt of insurance claim proceeds, etc.


Raw material consumption decreased by 16% due to steep

fall in prices of Iron Ore, Coking Coal and Chrome Ore despite

increase in volumes as compared to the previous year.

employee cost and Other expenses

Employee cost increased due to rise in manpower strength

for the expanding facilities and annual increments. Other

expenses remain same as compared to the previous year.

interest & Finance charges

The net interest and finance charges increased substantially

during the year due to full operationalisation of DRI Plant, CPP and other Infrastructure facilities. The Company has also

availed enhanced working capital facilities during the year for

its operations leading to higher interest and finance charges.

Depreciation

Depreciation increased significantly during the year mainly

due to commissioning of the Sponge Iron Plant and Power

Plant.

Profit before tax

Your Company has registered a PBT of Rs.856.78 million as

against loss of Rs.998.65 million last year. PBT has improved

on account of better realisations of Coke, higher production

of Ferro Chrome and lower power cost due to captive power

generation.

Profit after tax

Your Company has registered a PAT of Rs.474.16 million as

against loss of Rs.668.14 million last year. PAT was adversely

impacted by Rs.286.62 million during the year due to provision

for deferred tax liability created as per Accounting Standard 22.



EBIDTA / Turnover (percent) 16.87 7.84

Profit before Tax / Turnover (percent) 7.31 (9.60)Profit After Tax / Turnover (percent) 4.05 (6.42)

Cash Profit / Turnover (percent) 10.72 4.96Debt to Equity 3.12 3.03 Return on Equity (percent) 13.85 (24.17)Book Value per share (Rs./share) 31.12 25.13

Earning per share (Rs./share) 4.31 (6.07)

Cash Earning per share (Rs./share) 11.42 4.70Market Capitalisation (Rs. Million) as on 31 March

4,670 2,046

DevelOPments in Human ResOuRces & inDustRial RelatiOnsYour Company recognises the fact that manpower is one of

the vital constituents of a successful organisation. The growth

of your Company and execution of new projects places

emphasis on the recruitment process and your Company has

been successful in attracting professional talent. The Learning

Centre at Kalinganagar, Orissa continuously trains & develops

employees to suit organisational needs. The total number of

employees in your Company as on 31 March 2010 was 1051.

inteRnal cOntROl anD systemsThe internal control systems in your Company

commensurates with the size and nature of its operations

and periodic audits are conducted in various disciplines to

ensure adherence to the same. During the year, M/s. L. B. Jha

& Co., Internal Auditors of your Company had independently

evaluated the adequacy and efficacy of the audit controls.

The direct reporting of the Internal Auditors to the Audit

Committee of the Board ensures independence of the audit

and compliance functions. The Internal Auditors regularly

report to the Audit Committee on their observations on the

cash Profit

During the year under review, Cash Profit has improved

substantially to Rs.1,255.73 million as against Cash Profit of

Rs.516.51 million in the previous year thereby registering a

growth of 143%.

balance sheet analysis Fixed assets & investments

The Gross Block increased due to capitalization of the second

kiln of Sponge Iron Plant and Infrastructure facilities. The

Capital WIP increased due to the substantial progress in Power

Plant, Steel Melt Shop, Rolling Mill and infrastructure projects.

The investments increased due to infusion of equity in VISA

BAO Limited.

inventories

The value of Inventory reduced due to sharp reduction in

prices of imported Coking Coal and other prime raw materials.

The average inventory turnover reduced marginally to 110

days from 112 days in 2008-09.

sundry Debtors, loans & advances

Gross debtors of your Company decreased by 21% despite

a 12% increase in sales, which was possible due to better

debtors management during the year. Your Company’s focus

on improving collections and stringent credit assessment

procedures, helped bring down the average debtors turnover

from 31 days to 23 days during the year.

Loans & advances increased mainly on account of advances

made to suppliers for raw materials, capital items and

statutory deposits.

cash & bank balances

Your Company has deployed its cash accruals in fixed deposits

with banks at attractive rates of interest towards margin

money for working capital.

sundry creditors & current liabilities

Sundry creditors decreased due to better vendor

management and reduction in raw material prices as

compared to the previous year.

key Ratios

Key financial ratios improved during the year due to better

operational and financial performance, summary of which is

given below:


Company’s processes, systems and procedures ascertained

during the course of their audit. Concerted efforts towards

stabilisation of SAP have also contributed to tightening

of control systems. Your Company has been able to adapt

adequately to this ERP package and is placed to derive

significant benefits from the same. Emphasis is placed

on adequacy, reliability and accuracy of dissemination of

financial data and information. Compliance issues are given

utmost importance and reported regularly to the Board.

Your Company has been accredited with the ISO 9001-2008

certification. It shows commitment to quality, customers, and

a willingness to work towards improving efficiency.

OutlOOk India has immense potential for creating new steel production

capacity. Indian per capita steel consumption is presently

very low compared to the world average, which further

re-confirms the opportunities for steel demand to continue

accelerating in the times ahead. Your Company with a well

diversified product portfolio is well poised to take advantage

of the growth in the Iron and Steel demand.

cautionary statementStatements in this “Management Discussion & Analysis”

describing the Company’s objectives, projections, estimates,

expectations or predictions may be ‘forward looking

statements’ within the meaning of applicable securities laws

and regulations. Actual results could differ materially from

those expressed or implied. Important factors that could

make a difference to the Company’s operations include global

and Indian demand supply conditions, finished goods prices,

input availability and prices, cyclical demand and pricing in

the Company’s principal markets, changes in Government

regulations, tax regimes, economic developments within

India and the countries within which the Company conducts

business and other factors such as litigation and labour

negotiations.



cORPORate gOveRnance: OuR PHilOsOPHyCorporate governance is the system by which companies are

directed, controlled and managed. In effect, it is concerned

with systems, processes, controls, accountabilities and

decision-making at the heart of and at the highest level of

an organisation. It is about the way in which management

executes its responsibilities and authority and how they

account for that authority in relation to those that have

entrusted them with assets and resources.

At VISA Steel Limited (the Company), the Corporate

Governance objective is to create and adhere to a corporate

culture of conscience and consciousness, integrity,

transparency and accountability for efficient and ethical

conduct of business for meeting its obligation towards

shareholders and other stakeholders. Accordingly, the

Corporate Governance process is carried out by the Board of

Directors, and its committees, on behalf of and for the benefit

of the Company’s stakeholders, to provide direction, authority

and oversights to management. Corporate Governance

is an integral part of the philosophy of the Company in its

pursuit of excellence, growth and value creation. In addition

to complying with the statutory requirements, effective

governance systems and practices towards improving

transparency, disclosures, internal controls and promotion of

ethics at work place have been institutionalised.

cOmPliance witH tHe sebi cODe On cORPORate gOveRnanceIn line with this, we are pleased to inform you that, as on

31 March 2010, the Company is in compliance with all the

requirements of Clause 49 of the Listing Agreement. The

necessary disclosures as required under Clause 49 of the

Listing Agreement have been covered in this Annual Report.

Report on Corporate Governance42/43

i. bOaRD OF DiRectORs composition of the board


name of the Director executive / non-executive / independent1

no. of Outside Directorship(s) held

Outside committee positions held2

Public Private Foreign chairman member Mr. Vishambhar Saran Executive Chairman 7 - 5 - -Mr. Maya Shanker Verma Non-Executive, Independent 5 2 - 4 1Mr. Arvind Pande Non-Executive, Independent 5 - - 1 2Mr. Shiv Dayal Kapoor Non-Executive, Independent 5 1 - 1 2Mr. Debi Prasad Bagchi Non-Executive, Independent 6 - - 2 3Mr. Pradip Kumar Khaitan Non-Executive, Independent 13 - 1 - 6Mr. Shanti Narain Non-Executive, Independent 2 - - - 1Mrs. Saroj Agarwal Non-Executive 6 - 1 - -Mr. Vikas Agarwal Non-Executive 6 2 7 - 1Mr. Vivek Agarwal Non-Executive 7 - 7 - 3Mr. Vishal Agarwal Managing Director 8 - 1 2 2Mr. Basudeo Prasad Modi Deputy Managing Director 3 1 - - -

1 Independent director is as defined in Clause 49 of the Listing Agreement.2 For this purpose, only two Committees, viz., the Audit Committee and the Shareholders’ / Investors’ Grievance Committee have

been considered. This excludes Committee positions in private limited companies, foreign companies and companies under Section 25 of the Companies Act, 1956.

Details of the board meeting and attendanceDate of the board meeting city no. of Directors Present19 May 2009 Kolkata 1024 June 2009 Kolkata 822 July 2009 New Delhi 1030 October 2009 New Delhi 718 December 2009 Kolkata 922 January 2010 Kolkata 9

Details of remuneration paid to the board of Directors a. non-executive Directors

name of the Director sitting Fees paid1

commission Payable2

total payments paid / payable in

2009-10

no. of board meetings

attended last agm3

(Rs.) (Rs.) (Rs.) Held Attended Mr. Maya Shanker Verma 230,000 769,231 999,231 6 5 NoMr. Arvind Pande 130,000 410,256 540,256 6 3 NoMr. Shiv Dayal Kapoor 250,000 769,231 1,019,231 6 6 YesMr. Debi Prasad Bagchi 190,000 538,462 728,462 6 6 NoMr. Pradip Kumar Khaitan 80,000 205,128 285,128 6 3 NoMr. Shanti Narain 120,000 307,692 427,692 6 4 NoMrs. Saroj Agarwal 100,000 - 100,000 6 5 YesMr. Vikas Agarwal 140,000 - 140,000 6 4 Yes Mr. Vivek Agarwal - - - 6 - NoTotal 1,240,000 3,000,000 4,240,000

Note:1. During 2009-10, sitting fees were paid @ Rs. 20,000 per Board Meeting and Rs.10,000 per Committee Meeting, i.e. Audit,

Share Transfer & Investor Grievance, Finance & Banking, Remuneration and Selection Committees. 2. Commission is paid out of profits of the Company for the relevant financial year, not exceeding 1% of the net profits, to the

Independent Directors of the Company. Commission is calculated based on the weightage given to the attendance at the Board and Committee meetings.

3. Annual General Meeting was held on 26 August 2009.


b. executive Directors

name of the Director

Relationship with other Directors

business relationship with

the company,

if any


all elements of remunera-tion package,

i.e. salary, benefits,

bonuses, etc.(Rs.)

Fixed compo-nent & perfor-mance linked

incentives, along with

performance criteria

service contracts,

notice period,

severance fee

stock option details,

if any


Mr. Vishal Agarwal See Note (a) Managing Director



See Note (a) Deputy Managing Director


(a) Mr. Vishambhar Saran is the husband of Mrs. Saroj Agarwal and father of Mr. Vishal Agarwal, Mr. Vikas Agarwal and Mr. Vivek

Agarwal. Other than this, none of the other Directors are in any way related to any other Director.

(b) Mr. Vishambhar Saran, Chairman and Mr. Vishal Agarwal, Managing Director are entitled to performance linked incentive in the

form of commission not exceeding Rs.4,657,500 and Rs.4,158,000 respectively for 2009-10, i.e., not exceeding 9 months’ basic

salary. Mr. Basudeo Prasad Modi, Deputy Managing Director is entitled to a Merit Bonus of Rs.1,320,000 p.a. as per the terms of his

appointment and remuneration, approved by the Members. The Company has internal norms for assessing performance of its

Executive Directors which is done by the Board.

(c) Mr. Vishambhar Saran has been re-appointed as Whole-time Director, designated as Chairman for a period of 3 years effective from

15 December 2007. This appointment may be terminated by either party by giving 1 month’s notice in writing and no severance

fee is payable.

Mr. Vishal Agarwal has been re-appointed as Managing Director for a period of 3 years effective from 25 June 2008. The

appointment may be terminated by either party by giving 1 month’s notice in writing and no severance fee is payable.

Mr. Basudeo Prasad Modi has been appointed as Deputy Managing Director for a period of 3 years effective from 1 April 2008. The

appointment may be terminated by either party by giving 1 month’s notice in writing and no severance fee is payable.

(d) The Company has registered a trust in the name and style of “VISA Steel Limited – Employee Welfare Trust” on 23 September, 2008,

with Registrar of Assurances, Kolkata for implementing the Employee Stock Option Scheme 2008 for the employees specified

therein. However, no option has been granted under the Scheme till date.

(e) During the financial year 2009-10, 6 meetings of the Board of Directors were held. Mr. Vishambhar Saran, Chairman, was present in

5 Board meetings, Mr. Vishal Agarwal, Managing Director and Mr. Basudeo Prasad Modi, Deputy Managing Director were present in

all the 6 Board Meetings. Mr. Vishambhar Saran, Mr. Vishal Agarwal and Mr. Basudeo Prasad Modi were all present at the last Annual

General Meeting held on 26 August 2009.

ii. bOaRD cOmmittees audit committee The Audit Committee comprises of 6 directors, all non-executive directors, out of which 4 are independent directors, details

given under as on 31 March 2010:



Mr. Arvind Pande - Independent Director



Mr. Vivek Agarwal - Non-Executive Director

All members of the Audit Committee are financially literate and possess requisite accounting or financial management expertise.

The Company Secretary acts as Secretary to the Committee. The powers, role and terms of reference of the Committee


are as per Clause 49 of the Listing Agreement and the Committee reviews information as prescribed under Clause 49 at its meetings. The broad terms of reference of the Audit Committee are:

1. Overseeing the Company’s financial reporting process and disclosure of financial information to ensure that the financial statements are correct, sufficient and credible.

2. Reviewing with the management the internal control systems, internal audit functions, observations of the auditors, periodical financial statements before submission to the Board.


4. The Committee is authorised to investigate into matters contained in the terms of reference or referred / delegated to it by the Board and, for this purpose, has full access to information / records of the Company including seeking external professional support, if necessary.

During the financial year 2009-10, the Committee met five times on 19 May 2009, 24 June 2009, 22 July 2009, 30 October 2009 and 22 January 2010 and the details of attendance by the Committee members are as given under:

name of the Director no. of meetings

Held attended



Mr. Arvind Pande 5 3



Mr. Vivek Agarwal 5 -

share transfer and investor grievance committee The Share Transfer and Investor Grievance Committee comprises of the following Directors as on 31 March 2010:

Mr. Arvind Pande, Chairman - Independent Director





The primary function of the Committee is to supervise and ensure efficient transfer of shares, issue of new / duplicate share certificates, dematerialisation and rematerialisation of shares and speedy redressal of investor grievances.

As on 31 March 2010, 99.77% of the Company’s shares are in dematerialised form and the shares are compulsorily traded on the stock exchanges in the dematerialised form.

During the financial year 2009-10, the Committee met four times on 19 May 2009, 22 July 2009, 30 October 2009 and 22 January 2010 and the details of attendance by the Committee members are as given under:


Held attended

Mr. Arvind Pande 4 3





Details of shareholders’ complaints are given in the “Shareholder Information” section of the Annual Report.



Remuneration committee There is a Remuneration Committee in place with roles, powers and duties, to be determined by the Board from time to

time. The Committee recommends appropriate compensation packages for Directors and Executive Officers to retain best available personnel for key positions and provide performance based incentives. The scope of the Remuneration Committee had been expanded to include powers related to issuance of ESOP / ESPS to employees, finalisation and administration of the Scheme. The Committee comprises of the following Directors as on 31 March 2010:





Mr. Vivek Agarwal - Non-Executive Director

One meeting of the Remuneration Committee was held during the financial year on 22 January 2010 and the details of attendance by the Committee members are as given under:


Held attended

Mr. Pradip Kumar Khaitan 1 -




Mr. Vivek Agarwal 1 -

Finance & banking committeeIn addition to the above Committees, your Company has a Finance & Banking Committee with powers to approve strategies, plans, policies and actions related to corporate finance. The Committee comprises of the following Directors as on 31 March 2010:






Four meetings of the Committee were held during 2009-10 on 19 May 2009, 22 July 2009, 30 October 2009 and 22 January

2010, and the details of attendance by the Committee members are as given under:


Held attended








Mr. Arvind Pande - Independent Director



A meeting of the Selection Committee was held on 30 October 2009 which was attended by Mr. Debi Prasad Bagchi,

Mr. Arvind Pande and Mr. Shanti Narain.

iii. subsiDiaRy cOmPaniesThe Company has two subsidiary companies, M/s VISA BAO Limited (VBL) and M/s Ghotaringa Minerals Limited. As per the

provisions of Clause 49 of the Listing Agreement, both the companies were not material non-listed subsidiary company for

the financial year 2009-10 and hence the provisions of this clause did not apply.

However, as on 31 March 2010, the net worth of VBL has exceeded 20% of the consolidated net worth of the Listed Holding

Company and its subsidiaries. Accordingly, pursuant to the Clause 49, VBL has become a “material non-listed Indian

subsidiary” of your Company and at least one independent director on the Board of Directors of your Company shall be

appointed as director on the Board of Directors of VBL. Clause 49 defines a ‘material non-listed Indian subsidiary’ as an

unlisted subsidiary, incorporated in India, whose turnover or net worth (i.e., paid up capital and free reserves) exceeds

20% of the consolidated turnover or net worth respectively, of the listed holding company and its subsidiaries in the

immediately preceding accounting year.

iv. DisclOsuRes Related Party transactions

Related Party transactions as specified under Clause 49 of the Listing Agreement is placed before the Audit Committee.

A comprehensive list of Related Parties and their transactions as required by AS-18 issued by the Institute of Chartered

Accountants of India, forms part of Note 13, Schedule 16 to the Accounts in the Annual Report.

Disclosure of accounting treatment The accounting treatment in the preparation of financial statements is in line with that prescribed by the Accounting

Standards u/s 211(3C) of the Companies Act, 1956.

code of conductThe Code of Conduct applicable to the Directors and Senior Management, as approved by the Board of Directors is available

on the website of the Company – www.visasteel.com. All Directors and Senior Management Personnel have affirmed

compliance with the Code and a declaration signed by the Managing Director is given below:

“I hereby confirm that, the Company has obtained from all the members of the Board and Senior Management, affirmation

that they have complied with the Code of Conduct for Directors and Senior Management in respect of the financial year

2009-10.”

Kolkata Vishal AgarwalDate: 19 May 2010 Managing Director

selection committeeIn terms of Section 314(1B) of the Companies Act, 1956 and Director’s Relatives (Office or Place of Profit) Rules 2003, for

selecting and appointing employees, who are relatives of the Directors and carrying monthly remuneration exceeding

Rs.50,000, your Company has a Selection Committee in place. The role of the Committee is also to determine the

remuneration and revisions to the same and making periodic recommendations to the Board on their performance. The

Committee comprises of the following Independent Directors as on 31 March 2010:


Risk management The Company periodically identifies, assesses and monitors risks associated with project implementation, foreign exchange

fluctuation, processes and systems, statutory compliances, HR policies etc. The Internal Auditor conducts periodical audits

and reports to the Audit Committee at its meetings on the adequacy of the procedures.

Details on use of proceeds from public issues During the year, the Company did not raise any money through public issue, right issues or preferential issues and there was

no unspent money raised through such issues.

Remuneration of DirectorsAll details of remuneration to Directors have been disclosed above.


name of the Director no. of shares held


Mr. Arvind Pande -



Mr. Shanti Narain -


Mrs. Saroj Agarwal 70,100*

Mr. Vikas Agarwal 20,100*

Mr. Vivek Agarwal 20,100*

*Beneficial interest of these shares vests with VISA International Limited.

Details of Directors appointed / re-appointedDetails of Directors being appointed / re-appointed, have been disclosed in the Notice for the AGM, i.e. a brief resume, nature of expertise in specific functional areas, names of directorships and committee memberships and their shareholding in the Company.

means of communication- Quarterly results

Which newspapers normally published in - Business Standard

- Sambad (Oriya)



Presentation to investors / analysts: are they available on the website - Available as and when made Whether Shareholder Information Report forms part of the Annual Report - Yes


general body meetings Current AGM, date, time and venue:

The forthcoming Annual General Meeting will be held on Tuesday, 17 August, 2010 at 11.30 a.m. at Jayadev Bhawan, Ashok Nagar, Unit II, Bhubaneswar 751 001.


year location Date time Whether special

resolutions passed



26 August 2009 12.30 p.m. Yes



29 July 2008 12.30 p.m. No

2006-07 IDCOL Auditorium, IDCOL

House, Ashok Nagar, Near

Indira Gandhi Park, Unit – II,

Bhubaneswar 751 001

30 July 2007 12.30 p.m. No

Postal ballot

Whether resolutions were put through postal ballot last year : No

Details of voting pattern : NA

Person who conducted the postal ballot exercise : NA

Procedure for postal ballot : NA

Whether any resolution is proposed to be conducted through postal ballot : NA

Details of non-compliance by the Company, penalties or strictures imposed on the Company by Stock Exchange or SEBI or

any statutory authority, on any matter related to capital markets, during the last three years.

There are no penalties or strictures imposed on the Company by SEBI or Stock Exchanges or any statutory authority on any

capital market issue during the last 3 years.


Your Company is in compliance with all the mandatory requirements of this clause and with regard to the non-mandatory

requirements, your Company already has a Remuneration Committee in place. The Company also issues Investor & Press

Releases on a quarterly basis, subsequent to the publication of the financial results, which are sent to the Stock Exchanges

and are available on the website of the Company. Other non-mandatory requirements shall be put in place, as and when

considered and approved by the Board.

Certificate from the Auditors regarding compliance of the conditions of Corporate Governance stipulated in Clause 49 of

the Listing Agreement with Stock Exchanges is annexed herewith.


Shareholders’ Information1. annual geneRal meeting -Date and Time : 17 August 2010 at 11.30 a.m.

-Venue : Jayadev Bhavan, Ashok Nagar, Unit II,

Bhubaneswar 751001

2. Financial yeaR : April to March

3. Financial calenDaR (tentative) :

Financial reporting and Limited Review for the quarter ending 30 June 2010 End July 2010

Financial reporting and Limited Review for the half year ending 30 September 2010 End October 2010


Financial reporting for the year ending 31 March 2011 Mid May 2011

Annual General Meeting for the year ending 31 March 2011 Mid July 2011

4. Dates OF bOOk clOsuRe : 10 August 2010 to 17 August 2010

(both days inclusive)

5. DiviDenD Payment Date : Within 3 weeks from the date of Annual

General Meeting

6. RegisteReD OFFice : VISA House, 11, Ekamra Kanan,

Nayapalli,

Bhubaneswar 751 015

Tel: +91 0674 2552 479, Fax: +91 0674 2554 661

E-mail: [email protected]

Website: www.visasteel.com

7. listing Details : Equity Shares

Bombay Stock Exchange Limited

Floor 25, Phiroze Jeejeebhoy Towers

Dalal Street, Mumbai 400 001

Stock Symbol: (532721)

The National Stock Exchange of India Limited

“Exchange Plaza”, Bandra – Kurla Complex

Bandra (E), Mumbai 400 051

Stock Symbol: (VISASTEEL)

Note : Listing fees has been paid to the Stock Exchanges for the year 2010-11.

Shareholders’ Information50/51

8. stOck PRice Data:

bombay stock exchange national stock exchange

High low close no. of shares traded

High low close no. of shares traded

(Rs.) (nos) (Rs.) (nos)Apr-09 26.45 18.25 20.70 1,050,086 26.35 17.55 20.85 2,389,721May-09 30.10 21.05 30.10 1,234,126 30.05 21.15 30.05 2,577,385Jun-09 36.80 24.10 24.95 1,042,984 35.90 24.70 24.90 2,236,646Jul-09 30.10 22.50 29.30 1,823,989 30.15 21.55 29.30 3,946,491Aug-09 34.90 27.50 33.85 1,275,717 34.50 27.60 33.50 2,559,176Sep-09 42.35 31.50 39.70 3,306,361 42.50 31.00 39.75 7,395,473Oct-09 47.45 35.50 36.05 2,714,606 47.20 36.00 36.40 5,252,142Nov-09 43.20 31.50 36.05 2,136,773 42.00 31.80 36.30 4,159,875Dec-09 40.65 33.80 38.75 4,147,275 40.70 33.85 38.90 10,469,037Jan-10 50.20 37.75 41.45 9,242,024 50.30 37.10 41.50 22,303,475Feb-10 45.95 39.10 39.75 2,228,989 47.50 38.10 39.85 5,207,615Mar-10 47.20 40.25 42.45 2,956,051 47.40 40.25 42.40 6,400,092

9. stOck cODe:

Reuters bloomberg



10. stOck PeRFORmance:

stock Performance (indexed)275

250

225

200

175

150

125

100Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10

VSL Sensex Nifty


14. investOR seRvices: - Complaints received during the year

nature of complaints 2009-10 2008-09

Received cleared Received cleared

Relating to non-allotment, non-receipt of refund cheques arising out of the IPO exercise

1 1 17 17


Relating to complaints from SEBI / Stock Exchanges 1 1 1 1

Total 9 9 28 28



15. Details OF unclaimeD sHaRes as On 31 maRcH 2010: Pursuant to Clause 5A of the Listing Agreement, the details of shares issued pursuant to the initial public issue of the Company

which remains unclaimed and are lying in the escrow account as on 31 March 2010 are as follows:

year opening Balance as on

01.04.2009

cases disposed off during

the Financial year 2009-10

closing Balance as on

31.03.2010

no. of

cases

no. of

shares

no. of

cases

no. of

shares

no. of

cases

no. of

shares

2009-2010 15 4,196 1 141 14 4,055

12. RegistRaRs anD tRansFeR agents:(Share transfer and communication regarding share

certificates, dividends and change of address)

Karvy Computershare Private Limited

Unit: VISA Steel Limited

Plot No. 17-24, Vittal Rao Nagar, Madhapur,

Hyderabad 500 081

Tel: + 91 40 2331 2454, Fax: + 91 40 2342 1971


Website: www.karvy.com

13. sHaRe tRansFeR system: The Board of Directors have delegated powers to the Registrars &

Transfer Agents for effecting share transfers, splits, consolidation,

sub-division, issue of duplicate share certificates, rematerialisation

and dematerialisation etc., as and when such requests are received.

11. stOck PeRFORmance OveR tHe Past Few yeaRs:

(in percentage) 1 year 2 years 3 years 4 years

VISASTEEL 129.81 (-) 4.07 60.30 (-) 20.00

BSE Sensex 80.54 12.04 34.09 55.39

NSE Nifty 73.76 10.87 37.36 54.27


16. DistRibutiOn OF sHaReHOlDing as On 31 maRcH:2010 2009

no. of equity

shares held

no. of

share-

holders

% of

share -

holders

no. of

shares held

% share -

holding

no. of

share-

holders

% of

share-

holders

no. of

shares held

%

share-

holding

1 – 500 30,321 82.18 5,243,831 4.77 30,695 82.75 5,332,170 4.85

501 – 1000 3,883 10.52 2,979,272 2.71 3,944 10.63 2,969,962 2.70

1001 – 2000 1,589 4.31 2,343,967 2.13 1,528 4.12 2,205,263 2.00

2001 – 3000 352 0.95 919,417 0.83 319 0.86 831,749 0.76

3001 – 4000 152 0.41 549,024 0.50 130 0.35 470,548 0.43

4001 – 5000 187 0.51 904,811 0.82 149 0.40 713,908 0.65

5001 – 10000 200 0.54 1,549,319 1.41 155 0.42 1,211,795 1.10

10001 and above 213 0.58 95,510,359 86.83 174 0.47 96,264,605 87.51

Total 36,897 100.00 110,000,000 100.00 37,094 100.00 110,000,000 100.00

17. categORies OF sHaReHOlDing as On 31 maRcH:2010 2009

category no. of shareholders

no. of shares held

% share-holding

no. of shareholders

no. of shares held

% share-holding

Promoters 8* 80,000,000 72.73 8* 80,000,000 72.73


Mutual Funds 1 372,271 0.34 1 473,500 0.43

Banks and Financial Institutions 2 1,501 0.00 1 1 0.00

FIIs 4 5,994,931 5.45 4 8,737,184 7.94

NRIs 645 754,721 0.69 668 641,637 0.58


Indian Public 35,535 17,339,752 15.76 35,760 16,031,134 14.58

Total 36,897 110,000,000 100.00 37,094 110,000,000 100.00

* Includes 6 shareholders, where the beneficial interest of shares lies with VISA International Limited.

18. DemateRialisatiOn OF sHaRes anD liQuiDity

: 99.77% of outstanding equity shares have been

dematerialised upto 31 March 2010.

The International Security Identification Number (ISIN) for

your Company’s shares is INE286H01012.

The CIN allotted by the Ministry of Corporate Affairs is

L51109OR1996PLC004601.

19. Details On use OF Public FunDs ObtaineD in tHe last tHRee yeaRs

: No funds had been raised from public in the last three

years.


20. Plant lOcatiOns :Kalinganagar Industrial Complex

P.O. Jakhapura

Dist. Jajpur

Orissa 755 019

Tel: + 91 6726 242441

Fax: + 91 6726 242442

Village Golagaon

Near Duburi

P.O. Pankapal, Dist. Jajpur

Orissa

Tel: + 91 6726 245470

Fax: + 91 6726 245561

21. investOR cORResPOnDence : The Company Secretary,

VISA Steel Limited

“Brooke House”, 2nd Floor,

9, Shakespeare Sarani,

Kolkata 700 071

Tel: + 91 33 3051 9000

Fax: + 91 33 3051 9001


In line with the Circular no.SEBI/CFD/DIL/LA/1/2009/24/04 dated 24 April, 2009 issued by Securities and Exchange Board of

India, the Company has opened a Demat Account titled “VISA Steel Limited – Demat Suspense Account” comprising shares al-

lotted to investors during the IPO and not yet credited to the investors’ demat account due to mismatch of information / invalid

demat account. Investors who have not received credit of shares allotted to them during the IPO are requested to contact the

Registrars / Company Secretary for the same.


To the Members of VISA Steel Limited

We have examined the compliance of conditions of Corporate Governance by VISA Steel Limited (the Company) for the year ended on 31

March 2010, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in India.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was carried

out in accordance with the Guidance Note on Certification of Corporate Governance (as stipulated in Clause 49 of the Listing

Agreement), issued by the Institute of Chartered Accountants of India and was limited to procedures and implementation

thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit

nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representation made by

the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as

stipulated in Clause 49 of the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or

effectiveness with which the Management has conducted the affairs of the Company.

auDitORs’ ceRtiFicate On cOmPliance witH tHe cOnDitiOns OF cORPORate gOveRnance unDeR clause 49 OF tHe listing agReement




Partha Mitra


Date: 19 May 2010 Membership No. 50553

Annual Report 2009-10 Financial Statements

VISA Steel Limited


VISA Steel Limited



Steel Limited (the “Company”) as at 31 March 2010,

and the related Profit and Loss Account and Cash Flow



report. These financial statements are the responsibility

of the Company’s Management. Our responsibility is to

express an opinion on these financial statements based

on our audit.







the amounts and disclosures in the financial statements.

An audit also includes assessing the accounting principles

used and significant estimates made by Management,








(4A) of Section 227 of The Companies Act, 1956 of India

(the ‘Act’) and on the basis of such checks of the books and

records of the Company as we considered appropriate







explanations which, to the best of our knowledge

and belief, were necessary for the purposes of our

audit:

(b) In our opinion, proper books of account as required

by law have been kept by the Company so far as

appears from our examination of those books:



agreement with the books of account:

(d) In our opinion, the Balance Sheet, Profit and Loss

Account and Cash Flow Statement dealt with by

this report comply with the accounting standards

referred to in sub-section (3C) of Section 211 of the

Act;


from the directors, as on 31 March 2010 and taken

on record by the Board of Directors, none of the

directors is disqualified as on 31 March 2010 from

being appointed as a director in terms of clause (g)

of sub-section (1) of Section 274 of the Act;

(f ) In our opinion and to the best of our information




manner, the information required by the Act, and

give a true and fair view in conformity with the

accounting principles generally accepted in India:



(ii) in the case of the Profit and Loss Account, of

the profit for the year ended on that date; and




Firm Registration Number : 301056E


Partha Mitra




VISA Steel Limited


VISA Steel Limited56/57

1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the

Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the Company.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. .

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax and entry tax as at 31 March 2010 which have not been deposited on account of a dispute, are as follows:

Annexure to Auditors’ Report[Referred to in paragraph 3 of the Auditors’ Report of even date to the members of

VISA Steel Limited on the financial statements for the year ended 31 March 2010]


VISA Steel Limited


VISA Steel Limited

Name of the statute Nature of dues Amount(Rs. Million)

Period to which the amount

relates


Income Tax Act, 1961 Wrong valuation of Closing Stock and loans converted to equity



Income Tax Act, 1961 Under valuation of Closing Stock and disallowance of interest



Income Tax Act, 1961 Disallowance of certain expenses


The Commissioner of Income Tax Appeals, Bhubaneswar, Orissa


Difference in way bill value and invoice value


Sales Tax Tribunal, Orissa, Appeal


Excess amount shown in ‘C’ Form


The Asst. Commissioner of Sales Tax (Appeal), Jajpur Range, Jajpur Road, Orissa


Non-submission of ‘C’ Form



Orissa Value Added Tax Act, 2005

Reversal of Consignment Sale, Input Tax Credit on Stock




Adhoc freight addition for calculating landed cost




Purchase of coal and coke including freight



Orissa Sales Tax Act, 1947

Non-payment of Surcharge



West Bengal Sales Tax Act, 1994

Incorrectly assessed Gross Turnover


The Asst. Commissioner of Commercial Taxes, (Appellate and Revisional Board), Kolkata, West Bengal

Annexure to Auditors’ Report (Contd.)


VISA Steel Limited



10. The Company has no accumulated losses as at

31 March 2010 and it has not incurred any cash losses in

the financial year ended on that date or in the immediately

preceding financial year.

11. According to the records of the Company examined by

us and the information and explanation given to us, the

Company has not defaulted in repayment of dues to any

financial institution or bank or debenture holders as at

the balance sheet date.

12. The Company has not granted any loans and advances

on the basis of security by way of pledge of shares,

debentures and other securities.

13. The provisions of any special statute applicable to chit

fund / nidhi / mutual benefit fund / societies are not

applicable to the Company.



15. In our opinion and according to the information and

explanations given to us, the Company has not given

any guarantee for loans taken by others from banks or

financial institutions during the year.


explanations given to us, on an overall basis, the term

loans have been applied for the purposes for which they

were obtained.


sheet of the Company, in our opinion and according to

the information and explanations given to us, there are

no funds raised on a short-term basis which have been

used for long-term investment.

18. The Company has not made any preferential allotment of

shares to parties and companies covered in the register



the period and accordingly the question of creation of

security or charge does not arise.


during the year.




according to the information and explanations given to

us, we have neither come across any instance of fraud

on or by the Company, noticed or reported during the

year, nor have we been informed of such case by the

Management.


Firm Registration Number : 301056E


Partha Mitra



Annexure to Auditors’ Report (Contd.)


VISA Steel Limited


VISA Steel Limited

Rs. Million


SOURCES OF FUNDSShareholders’ FundShare Capital 1 1,100.00 1,100.00 Reserves and Surplus 2 2,046.93 3,146.93 1,701.46 2,801.46

Loan Funds Secured Loan 3 11,076.99 8,891.69 Unsecured Loan 3A 350.39 38.02 Deferred Taxation [Refer Note 12 Schedule 16] 301.10 14.48

14,875.41 11,745.65

APPLICATION OF FUNDS

Fixed Assets 4 Gross Block 9,265.60 8,448.16 Less : Depreciation 1,129.31 666.93

Net Block 8,136.29 7,781.23 Capital Work in Progress including Advances 7,700.70 15,836.99 5,410.43 13,191.66

Investments 5 600.40 304.65

Current Assets, Loans and Advances Inventories 6 3,417.07 3,565.08 Sundry Debtors 7 648.78 823.73 Cash and Bank Balances 8 833.41 704.55 Interest Accrued on Deposits 18.15 18.53 Loans and Advances 9 1,415.77 1,240.07

6,333.18 6,351.96

Less: Current Liabilities and Provisions Liabilities 10 7,780.24 8,146.62 Provisions 11 139.47 7.32

7,919.71 (1,586.53) 8,153.94 (1,801.98)

Miscellaneous Expenditure [To the extent not written off or adjusted] Share Issue Expenses 24.55 51.32

14,875.41 11,745.65 Notes on Accounts 16

The Schedules referred to above form an integral part of the Balance Sheet.





Chartered Accountants Vishambhar Saran Vishal Agarwal

Chairman Managing Director

Partha Mitra

Partner Subhra Giri Manoj Kumar Digga

Membership Number 50553 Company Secretary Chief Financial Officer




VISA Steel Limited





Chairman Managing DirectorPartha MitraPartner Subhra Giri Manoj Kumar Digga Membership Number 50553 Company Secretary Chief Financial Officer


Rs. Million


INCOME Sales 11,983.07 10,571.11


Other Income 12 145.41 54.54

11,714.83 10,404.60

EXPENDITURE

Materials 13 8,136.60 8,102.37

Expenses 14 1,601.87 1,486.76

Interest (net) 15 651.40 321.54


10,858.05 10,218.58

Profit Before Exceptional Item and Taxation 856.78 186.02

Exceptional Item

Loss on Exchange Fluctuation (net) - 1,184.67

Profit /(Loss) Before Taxation 856.78 (998.65)


Current Tax 96.00 -

Fringe Benefit Tax - 4.20

Deferred Tax 286.62 382.62 (334.71) (330.51)

Profit /(Loss) After Taxation 474.16 (668.14)

Balance brought forward from previous year (35.37) 632.77

438.79 (35.37)

Appropriation

Proposed Dividend 110.00 -

Income Tax on Proposed Dividend 18.69 -

Balance Carried forward to Balance Sheet 310.10 (35.37)

Basic and Diluted Earning Per Share 4.31 (6.07)


The Schedules referred to above form an integral part of the Profit & Loss Account.

This is the Profit & Loss Account referred to in our report of even date.


VISA Steel Limited


VISA Steel Limited


Rs. Million

31 March 2010 31 March 2009

1 SHARE CAPITAL Authorised 160,000,000 Equity Shares of Rs. 10/- each 1,600.00 1,600.00

Issued and Subscribed

110,000,000 Equity Shares of Rs. 10/- each fully paid up 1,100.00 1,100.00

Note:

(a) Of the above 56,212,167 Equity Shares of Rs. 10/- each are held by VISA Minmetal AG, the Holding Company [Refer Note 4 Schedule 16]

(b) Of the above 8,360,000 Equity Shares of Rs. 10/- each allotted for consideration other than cash pursuant to a scheme of amalgamation without payment being received in cash.

3 SECURED LOAN From Banks

Cash Credit 404.49

485.83


Term Loan 10,569.36

8,390.60

[Refer Note 3(b) Schedule 16]

Interest Accrued & Due on above - 1.11

Vehicle Loan 14.46

4.01

[Refer Note 3(c) Schedule 16]

From Others

Vehicle and Other Loan 88.68

10.14


11,076.99 8,891.69

3A UNSECURED LOAN From Banks - Short Term

SIDBI 100.39 38.02

From Others 250.00 -

350.39 38.02




Profit and Loss Account 310.10 (35.37)

2,046.93 1,701.46


VISA Steel Limited




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23


VISA Steel Limited


VISA Steel Limited


Balance with Scheduled Banks in:





833.41 704.55


Considered Good 35.39 50.34 Considered Doubtful 0.90 0.90

Other debts - Considered Good 613.39 773.39 649.68 824.63

Less: Provision for Doubtful Debts 0.90 0.90 648.78 823.73

6 INVENTORIES - AT LOWER OF COST OR NET REALISABLE VALUE Stores & Spare Parts* 126.60 64.25 Raw Materials 1,757.66 2,143.22 Finished Goods** 1,144.97 1,058.22 By-Products 345.02 178.57 Work-in-Progress 42.82 120.82

3,417.07 3,565.08 * Including Capital items lying in stores 71.53 19.65 ** Including goods lying with Consignment Agents 33.64 74.00

Rs. Million

31 March 2010 31 March 2009

5 INVESTMENTS - AT COSTLong Term - Trade - Unquoted

Patrapada Coal Mining Company Private Limited100 Equity Shares of Rs. 10/- each, fully paid up[Rs. 1,000 (2009: Rs. 1,000)]

- -

Subsidiary CompaniesVISA BAO Limited59,150,000 (2009: 29,575,000) Equity Shares of Rs. 10/- each, fully paid up [Including beneficial interest in 5 (2009: 4) Equity Shares ofRs. 10/- each, fully paid up]

591.50

295.75

Ghotaringa Minerals Limited890,000 Equity Shares of Rs. 10/- each, fully paid up[Including beneficial interest in 44,500 Equity Shares ofRs. 10/- each, fully paid up]

8.90

8.90

600.40 304.65



VISA Steel Limited






139.47 7.32


Advance from Subsidiary Companies 393.60 -



Interest accrued but not due on loans 0.75 -



7,780.24 8,146.62


9 LOANS AND ADVANCES UNSECURED - CONSIDERED GOOD [UNLESS OTHERWISE STATED]

Advance to Subsidiary - 6.95

Advances Recoverable in Cash or in kind or


Considered Good 1,199.31 943.16


1,222.81 954.16


1,199.31 943.16

Deposits with


Others 97.24 163.46


[Net of Provision Rs. 265.33 Million (2009: Rs 169.32 Million)]


[Net of Provision Rs. 15.06 Million (2009: Rs. 15.03 Million)]

1,415.77 1,240.07

Due by Directors - 15.92


Due by an officer - -

Maximum Amount due at any time during the year 0.54 -

Due by a Private Company in which a Director is a Director 1.21 1.21

Rs. Million

31 March 2010 31 March 2009


VISA Steel Limited


VISA Steel Limited



Opening Stock 2,143.22 1,484.62

Add: Purchase 6,480.62 8,807.47

Less: Closing stock 1,757.66 6,866.18 2,143.22 8,148.87

Purchase of Finished Goods 1,447.24 190.63

(Increase)/ Decrease in Stock

Opening Stock




1,357.61 1,185.73

Less: Closing Stock




1,532.81 (175.20) 1,357.61 (171.88)

Increase/ (Decrease) in Excise Duty on Stock (1.62) (65.25)

8,136.60 8,102.37

Rs. Million

31 March 2010 31 March 2009

12 OTHER INCOME Insurance Claim received 17.76 9.79

Gain on Exchange Fluctuation (net) 38.43 -


145.41 54.54


VISA Steel Limited





Term Loan 460.77 269.05


Others 187.46 769.79 79.88 428.09

Less: Interest Income (Gross) [Tax Deducted at Source

Rs. 6.10 Million (2009: Rs. 17.11 Million)]


Others (89.84) (118.39) (65.73) (106.55)

651.40 321.54


Rs. Million

31 March 2010 31 March 2009

14 EXPENSES Salary, Wages & Bonus 310.90 195.38


Workmen and Staff welfare expenses 4.00 327.88 1.99 208.26


Power & Fuel 161.15 322.67

Rent 31.33 22.69




- Others 5.30 55.51 3.62 28.31




Custom & Cess 0.07 21.38

Freight & Selling expenses 157.54 201.94

Loss on Sale of Assets 1.15 -


Bad Debts Written off 15.86 -

Provision for Doubtful Debts - 0.56


Advance Written off 10.00 16.11



1,601.87 1,486.76


VISA Steel Limited


VISA Steel Limited


16. NOTES ON ACCOUNTS 1 Statement on Significant Accounting Policies

(a) Principal Accounting Policies The financial statements have been prepared to comply in all material aspects with all the applicable accounting

principles in India, the applicable accounting standards u/s 211(3C) of the Companies Act, 1956 and the relevant

provisions of the Companies Act, 1956. A summary of important accounting policies which have been applied

consistently are set out below. Financial Statements have also been prepared in accordance with relevant

presentational requirements of the Companies Act, 1956 of India.

(b) Basis of Accounting The Financial Statements have been prepared under the historical cost convention.

(c) Fixed Assets (i) Fixed Assets are stated at their acquisition cost (net of CENVAT credit), where applicable together with any

incidental expenses of acquisition/installation. Cost of acquisition includes borrowing costs that are directly

attributable to the acquisition/construction of qualifying assets. Impairment loss, if any, ascertained as per

the Accounting Standard u/s 211 (3C) of the Companies Act, 1956.

(ii) Depreciation on fixed assets, other than leasehold land, is provided on Straight Line Method in accordance

with Schedule XIV of the Companies Act, 1956. Leasehold land is amortized over the period of lease. No

depreciation is provided for freehold land.

(iii) Computer software has been capitalised as Intangible Assets and are being amortised in equal installments

over its useful life of three years.


(d) Investments Investments of long term nature is stated at cost, less adjustment for diminution, other than temporary, in the

value thereof.

(e) Inventories Inventories are stated at cost (net of CENVAT credit) or net realisable value, whichever is lower. Cost is determined

on weighted average basis and comprises of expenditure incurred in the normal course of business in bringing

such inventories to their location and includes, where applicable appropriate overheads. Obsolete, slow moving

and defective inventories are identified at the time of physical verification and where necessary, provision is made

for such inventories.

(f) Sales Sales represent the invoiced value of goods and services supplied, net of value added tax (VAT)/sales tax but

inclusive of excise duty.

(g) Transactions in Foreign Currencies Transactions in foreign currencies are recorded in rupees by applying the exchange rate prevailing on the date of


Exchange gain or loss arising on settlement/ translation is recognised in the Profit and Loss Account. Premium or

discount on forward contracts are amortised over the life of the contract. Foreign exchange forward contracts are

revalued at the balance sheet date and the exchange difference between the spot rate at the date of the contract

and the spot rate on the balance sheet date is recognised as gain/loss in the Profit & Loss Account.


VISA Steel Limited



Schedulesto the Accounts (Contd.)

(h) Employee Benefits (I) Post Retirement Benefits:

(a) Provident Fund


contribution to provident funds which are fully funded and administered by Government and are

independent of Company’s finance. Contributions are recognized in Profit & Loss Account on an accrual

basis.

(b) Gratuity

Defined Benefit Plans like Gratuity Schemes are also maintained by the Company. The Company has

taken out a policy with Life Insurance Corporation of India (LICI) for future payment of gratuity liability

to its employees. Gratuity liability is determined as at the end of each year by LICI in accordance with

the method stated in the Accounting Standard 15 (Revised 2005) on “Employee Benefits” and such

liability has been provided for in the accounts. Annual Premium determined by LICI is contributed.


Leave encashment benefit on retirement is determined on the basis of independent actuarial valuation,

at the end of each year in accordance with the method stated in Accounting Standard 15 (Revised 2005)

and such liability is provided for in the accounts and charge is recognized in the Profit and Loss Account.

Actuarial gains and losses, where applicable, are recognised in the Profit and Loss Account.



(i) Deferred Tax Deferred Tax is recognised using the liability method, at the current rate of taxation, on all timing differences

to the extent it is probable that a liability or asset will crystallise. Deferred Tax Assets are recognised subject to

consideration of prudence and are periodically reviewed to reassess realisation thereof.

(j) Borrowing Cost Borrowing costs attributable to acquisition and/ or construction of qualifying assets are capitalized as a part of

the cost of such assets upto the date when such assets are ready for its intended use. Other borrowing costs are

charged to Profit & Loss Account.

(k) Leases Assets acquired as leases where a significant portion of the risk and rewards of ownership are retained by the lessor

are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis

(l) Miscellaneous Expenditure - To the extent not written off or adjusted Public issue expenses are being amortized in equal installment over a period of five years.

2 (a) Claim against the Company not acknowledged as Debt:

(i) In respect of a charter party dispute between VISA Comtrade (Asia) Limited (the “Charterer”) and Transfield Shipping Inc., Panama (the “Owner of the Vessel - Prabhu Gopal”), the said Owner of the vessel has filed a civil suit in the Hon’ble Calcutta High Court against the Company and the Charterer and claimed relief for a decree for US$ 0.30 Million to be expressed in Indian Currency at such rate of exchange and/or on such terms as the Court may deem fit and proper, Injunction, Costs or other reliefs. The Company has not accepted the claim as it was not a party to the said Agreement and hence cannot be made a party to the suit. The Hon’ble Court passed interim order dated 11 May 2005 & 20 June 2005, restraining the Company and the Charterer from withdrawing any amount from a specified bank account without leaving a balance for a sum of Rs.12.50 Million, which has been set aside by the bank from cash credit limit of the Company. The suit is currently pending before the Hon’ble Calcutta High Court.

16. NOTES ON ACCOUNTS (Contd.)


VISA Steel Limited


VISA Steel Limited

(ii) Applications have been filed by the legal heirs of a deceased employee of the Company and his sister respectively, who died in a road accident while traveling in the Company’s vehicle for their personal work, claiming a compensation of Rs. 6.05 Million and interest @ 18% per annum and Rs. 0.55 Million respectively. The Company has contested the claims, which are currently pending before the Motor Accident Claims Tribunal, Bhubaneswar and the Additional District Judge cum 3rd Motor Accident Claims Tribunal, Rourkela respectively.

Rs. Million

31 March 2010 31 March 2009

(b) Estimated amount of Contracts remaining to be executed

on Capital Account and not provided for (net of advance

Rs. 47.73 Million, 2009: Rs. 77.29 Million)

2,578.33 2,501.84

(c) Contingent liability not provided for in respect of:






(v) Differential tariff of electricity and Delayed Payment

Surcharge thereon

- 11.61

(d) The Company has obtained licenses from the Government of India under EPCG Scheme for import of machineries at

a reduced Customs Duty and thereby saved an amount of Rs. 522.17 Million towards duty upto 31 March 2010. As per

the requirement under the said Scheme, the Company is required to export amounting to Rs. 4,177.32 Million within

the specified periods, failing which, the Company has to make payment to the Government of India equivalent to

the duty benefit enjoyed along with interest. The Company is confident that the above export obligation will be met

during the specified period.




VISA Steel Limited





3 (a) The working capital facilities from banks are secured by way of first hypothecation charge ranking pari-passu with

other banks on the whole of the current assets, namely, stocks of raw material, stock in process, semi finished &

finished goods, stores & spares not relating to plant & machinery (i.e. consumable stores & spares), bills receivable

& book debts and all other movables, both present and future, whether installed or not provided that the charge in

favour of the banks on the moveable plant & machinery, machinery spares, tools & accessories shall be subject to

the charges created and/or to be created thereon in favour of the term lenders to secure the long term borrowing/

loans for capital expenditure. The working capital facilities are also secured by second mortgage charge on the

land situated at Kalinganagar Industrial Complex , District Jajpur, Orissa together with building and structures

thereon and all plant & machinery attached to the earth or permanently fastened to anything attached to the earth

along with corporate guarantee of VISA International Limited and personal guarantee of Managing Director of the

Company.

(b) Term Loan from bank other than General Corpus Corporate Loan is secured by first charge on the land and fixed

assets situated at Kalinganagar Industrial Complex, District Jajpur, Orissa together with hereditaments and premises

and building, plant and machineries permanently affixed thereto and other erections thereon both present and

future at Plant at Kalinganagar Industrial Complex, District Jajpur, Orissa and second charge on all the current

assets of the Company ranking pari-passu with other banks along with Corporate Guarantee of VISA International

Limited and personal guarantee of Managing Director of the Company.

General Corpus Corporate Loan is secured by first charge on all the movable fixed assets of the Company and

second charge on all the current assets of the Company both present and future on pari-passu basis along with

other term lenders.

(c) Vehicle and other loan from banks and financial Institutions are secured by way of hypothecation of vehicles/

machinery taken under the loan arrangement.

4 Pursuant to an inter se transfer of shares between the Promoter Group Companies, VISA Minmetal AG transferred its

entire shareholding to a Promoter Group Company, VISA Infrastructure Limited subsequent to which VISA Infrastructure

Limited became the Holding Company of the Company w.e.f. 30th April 2010.

5 On 29 July, 2008, the Board approved the VISA Steel Employee Stock Option Scheme 2008 (ESOP Scheme) and Members

passed the Special Resolution vide Postal ballot pursuant to Section 192A of the Companies Act, 1956 for grant of not

more than 5,500,000 stock options convertible into not more than 5,500,000 Equity Shares of face value Rs. 10 each

fully paid up, through Trust for the purpose of welfare and benefit of the employees of the Company including any

Director of the Company, whether whole-time or otherwise. The Remuneration Committee will administer the scheme

through the trust, which has registered in the name and style of “VISA Steel Limited – Employee Welfare Trust” on 23

September 2008 with Registrar of Assurances, Kolkata for implementing the Employee Stock Option Scheme 2008 for

the employees specified therein.

In view of that scheme the Company has transfered Rs. 10 Million to VISA Steel Limited – Employee Welfare Trust for

procurement of share from the market, which will be granted to the employees of the Company as per the scheme

after obtaining the approval of the Remuneration Committee. However the trust has not purchased any share from the

market and the amount is lying under the current account of the Trust. Moreover, no option has been granted under the

Scheme till date.


VISA Steel Limited


VISA Steel Limited

Rs. Million

MT 31 March 2010 MT 31 March 2009

6 a) Quantitative InformationThe Company manufactures Pig Iron, Coke, Ferro

Chrome, Sponge Iron, Chrome Concentrate and

Chrome Powder, generates power and trades in Coal

and Coke and Sponge Iron. The relevant particulars

are as under:

i) Licensed Capacity N.A. N.A.

ii) Installed Capacity (As certified by the Management)

Pig Iron 225,000 225,000


Chrome Powder 100,000 100,000

Coke 400,000 400,000

Ferro Chrome 50,000 50,000

Sponge Iron 300,000 300,000

Power at Captive Power Plant (MKWH) 438 438

iii) Opening Stock

Pig Iron 7,216 129.42 677 13.36



Coal & Coke - - 7,536 140.59

LAM Coke 43,213 620.10 16,894 205.16

Ferro Chrome 4,607 190.49 10,168 612.16

Sponge Iron 4,934 - - -

1,058.22 981.65

iv) Production

Pig Iron (Note 1) 135,540 76,940


LAM Coke (Note 2) 327,154 303,725

Ferro Chrome (Note 3) 45,771 22,671

Sponge Iron (Note 4) 139,299 28,370


(Note 5)

Note:


2. Includes used for own consumption 124,576 60,043

Does not include By-products generated 26,447 27,403


4. Includes Trial Run Production 9,335 8,312

5. Includes used for Captive Consumption (MKWH)

215 37




VISA Steel Limited



v) Purchases

Coal & Coke 219,152 1,438.27 17,694 190.63

Sponge Iron 740 8.97 - -

1,447.24 190.63

vi) Closing Stock *

Pig Iron 2,066 34.73 7,216 129.42



Coal & Coke 22,630 258.57 - -

LAM Coke 48,259 613.93 43,213 620.10

Ferro Chrome 1,068 38.20 4,607 190.50

Sponge Iron 5,144 61.03 4,934** -

1,144.97 1,058.22

* After adjustment of shortage/excess

** Represents inventory out of trial run

vii) Sales

Pig Iron 137,882 2,562.29 70,449 1,632.38

Chrome Concentrate - - 4,000 109.55

Chrome Powder - - 115 1.92

Coal & Coke 196,022 1,221.45 24,827 352.32

LAM Coke 212,444 3,312.33 238,993 5,582.59

Ferro Chrome 49,536 2,517.48 29,133 2,194.91

Sponge Iron 124,184 1,731.08 20,079 270.41

By-products - 611.86 - 425.15

11,956.49 10,569.23

Power Generated at Captive Power Plant (MKWH) 9 26.58 2 1.88

11,983.07 10,571.11



Rs. Million



VISA Steel Limited


VISA Steel Limited

i) Miscellaneous expenses include Auditor’s Remuneration:Audit Fees - 0.85 - 0.85Tax Audit Fees - 0.10 - 0.10Other Services - 0.55 - 0.55Re-imbursement of expenses - 0.07 - 0.10

1.57 1.60

b) Details of Raw Material Consumed Chrome Ore 110,094 744.77 94,305 1,090.32 Iron Ore (Note 1) 403,730 1,419.58 170,860 528.33 Coke (Note 2) 2,761 43.12 9,992 144.47 Coal (Note 3) 722,251 4,495.62 541,274 6,286.78 Others 163.09 98.97

6,866.18 8,148.87 Note:1. Does not include iron ore fines generation 126,549 30,125 2. Does not include captive consumption of coke 124,576 66,152 3. Does not include coal ore fines generation 48,845 18,418

c) Consumption of Raw Material % %

Indigenous 60 4,108.35 23 1,906.55 Imported 40 2,757.83 77 6,242.32

100 6,866.18 100 8,148.87 d) Stores & Spares Consumed % %

Indigenous 100 214.30 92 180.67 Imported - - 8 16.11

100 214.30 100 196.78 e) CIF Value of Imports

Raw Material 2,762.86 6,690.30 Finished Goods 816.00 190.63 Capital Goods 38.08 16.08

3,616.94 6,897.01 f) Expenditure in Foreign Currency

Travelling 3.03 1.68 Interest 74.57 87.88 Others 0.98 0.53

78.58 90.09 g) Earning in Foreign Currency

Export Sales 1,952.94 2,395.82

h) Particulars of dividend remitted to non resident shareholders in foreign currency during the year related to the year ended 31 March 2008

Nos. Nos.

(i) Number of non-resident shareholder - - 1 - (ii) Number of ordinary shares held - - 56,212,167 -(iii) Dividend remitted - - - 56.21

16. NOTES ON ACCOUNTS (Contd.)Rs. Million




VISA Steel Limited





7 Earning Per Share

Profit/ (Loss)After Tax (A) 474.16 (668.14)

Weighted average number of Rs. 10 equity share

outstanding during the year (B)

110,000,000 110,000,000

Basic and Diluted Earning per Share (A/B) 4.31 (6.07)

8 Directors Remuneration*Salaries, Allowances & Bonus 39.11 6.15



Commission 11.82 -

58.15 9.92

Directors’ Sitting Fees 1.24 0.95

TOTAL 59.39 10.87

Profit for the year before taxation as per Profit & Loss Account

856.78

Add : Depreciation 468.18 -

Provision for Doubtful Advances 12.50 -

Directors' Remuneration for the current year 42.23 522.91 - -

1,379.69 -

Less : Depreciation u/s 350 of the Companies Act, 1956 468.18 468.18 - -

911.51 -

Commission to Executive Directors 8.82

Commission to Non Executive Directors** 3.00 -

11.82 -

** Within the overall limit of 1% of Net Profit 9.12 -

*Includes Rs.15.92 Million towards 2008-09 managerial remuneration, for which Central Government has approved waiver

of recovery of Rs.7.61 Million and Rs.6.60 Million from Mr. Vishambhar Saran, Chairman and Mr. Vishal Agarwal, Managing

Director respectively. The Central Government has not given any approval for waiver in respect of Mr. Basudeo Prasad Modi,

Deputy Managing Director, of Rs.1.71 Million as they were of the view that the remuneration payable to him for 2008-09

was within the permissible limit under Schedule XIII of the Companies Act, 1956.

9 Investment in Joint Venture Joint Venture Patrapada Coal Mining Co. Private Limited



The Company’s interests in the joint venture is reported as Long Term Investment in Schedule 5 and stated at cost. During the

current year no Profit and Loss Account has been prepared, as there was no revenue transaction. However, the Company’s share

of each of the assets and liabilities etc. (each without elimination of the effect of transactions between the Company and the joint

venture) based solely on the accounts prepared for the internal management reporting purposes to assess the performance of the

joint venture related to its interest in the Joint Venture are:



VISA Steel Limited


VISA Steel Limited

Rs. Million

31 March 2010 31 March 2009

Amounts in respect of Joint Venture-Balance Sheet

Assets

Capital Work in Progress 0.04 0.04

Current Assets [Rs. 2,932 (2009: Rs. 2,932)] - -

Liabilities

Current Liabilities 0.04 0.04

10 Addition/Adjustment of Fixed Assets and Capital Work in Progress include borrowing cost amounting to Rs.90.63

Million (2009: Rs.427.93 Million) and Rs.510.69 Million (2009: Rs. 632.98 Million) respectively.

11 Operating Leases

Rent [Including minimum lease payment Rs.Nil (2009: Rs.Nil)]

[Operating leases for office premises are entered into for a

period of three years and thereafter renewable by mutual

consent of both the parties. The operating leases are cancelable

by either party by giving three month’s notice.]

8.22 8.56

12 Deferred Tax Provision has been made in the accounts

in accordance with the requirements of the Accounting

Standard on “Taxes on Income” (AS 22) issued by The Institute

of Chartered Accountants of India. The major components of

the deferred tax Liabilities/(Assets) based on the tax effects of

timing differences are as follows:

Deferred Tax Liabilities Depreciation 736.01 615.88

Public Issue Expenses 8.16 8.40

744.16 624.28

Deferred Tax Assets Unabsorbed Depreciation (347.75) (370.01)

Unabsorbed Loss Carried Forward (76.99) (230.80)

Others - Section 43B items (18.32) (8.99)

(443.06) (609.80)

301.10 14.48




VISA Steel Limited



13 Related Party DisclosuresNature of Relationship Name of the Related Parties

Holding Company VISA Minmetal AG

Subsidiaries VISA BAO Limited


Joint Venture Company Patrapada Coal Mining Company Private Limited


Fellow Subsidiaries Far East Trading AG (f.k.a. VISA Comtrade AG)

VISA Coal Pty. Limited

VISA GMR Limited

VISA Global Mineral Resources SA (Proprietary) Limited

Far East Chartering Limited

VISA Power Limited



Mr. Vishal Agarwal



Mr. Vikas Agarwal

Mr. Vivek Agarwal

Mr. Ashok Agarwal

Enterprise over which Relatives of Key Khandadhar Minerals Limited


influence VISA Minmetal Limited


North East Resources Limited



VISA Chartering Limited

VISA Group Limited


VISA Resource Pte Limited

VISA Trust

PT VISA Indo




VISA Steel Limited


VISA Steel Limited

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VISA Steel Limited



Details of Transactions with Related Parties (Contd.)


Rs. Million

Nature of Transactions Name of the related Party 31 March 2010 31 March 2009

Rent VISA International Limited 6.77 1.50


Purchase of Goods VISA Comtrade Limited 1,268.55 -

VISA Resources Pte Limited 152.08 -

Far East Trading AG - 6,296.67

Freight paid for the above VISA Bulk Shipping Pte Limited 781.80 36.74

VISA Comtrade Limited - 230.72

Sale of Goods VISA Comtrade Limited 1,369.64 -

Far East Trading AG - 1,237.16

Traveling Expenses VISA Aviation Limited 11.33 5.52

Purchase of Fixed Assets VISA Comtrade Limited 1.69 -

VISA International Limited 0.87 -

Sale of Fixed Assets VISA Aviation Limited 1.37 -

Investment made VISA BAO Limited 295.75 295.75

Re-imbursement of expenses (net) VISA Comtrade Limited 35.56 -

VISA BAO Limited - 6.95

VISA International Limited - 21.03

Advance Received VISA BAO Limited 393.60 -

Deposits given VISA International Limited 20.00 1.50

Unsecured Loan VISA Power Limited 250.00 -

Remuneration Mr. Vishambhar Saran 17.46 -

Mr. Vishal Agarwal 16.86 -

Mr. Basudeo Prasad Modi 4.89 -

Sitting Fees Mrs. Saroj Agarwal 0.10 -

Mr. Vikas Agarwal 0.14 -




VISA Steel Limited


VISA Steel Limited

14 Employee Benefits

The Company maintains provident fund with Regional Provident Fund Commissioner, contributions are made by the

Company to the Fund, based on the current salaries. In the provident fund schemes, contribution are also made by the

employees. An amount of Rs.12.98 Million (2009: Rs.9.15 Million) has been charged to the Profit and Loss Account on

account of the above defined contribution schemes.

The Company operates defined benefit schemes like gratuity and leave encashment. The Company has taken out a

policy with Life Insurance Corporation of India (LICI) for future payment of gratuity liability to its employees. Annual

actuarial valuations are carried out by LICI in compliance with Accounting Standard 15 (Revised 2005) on Employee

Benefits. Annual contributions are also made by the Company. Employees are not required to make any contribution.

The Company also provides for leave encashment benefit to the employees. Annual actuarial valuations are carried

out by an independent actuary in compliance with Accounting Standard 15 (Revised 2005) on Employee Benefits.



Rs. Million

Gratuity 31 March

Leave Encashment 31 March

2010 2009 2010 2009


Present value of funded obligation 8.36 6.50 - -

Fair Value of Plan Assets 12.47 9.29 - -

(4.11) (2.79) - -


Present value of un-funded obligation - - 10.78 7.32

Net (Asset)/Liability (4.11) (2.79) 10.78 7.32

Amount recognised in the Profit and Loss Account and

charged to Salaries, Wages & Bonus and Contribution to

Provident & Other Funds under Schedule 14 are as follows:


Interest cost 0.52 0.37 0.72 0.50

Expected Return on Plan Assets (0.84) (0.61) - -

Net actuarial loss/(gain) recognised during the year (1.36) (0.15) 1.42 0.49

Total 1.16 1.47 4.34 2.59


Opening defined benefit obligation 6.49 4.63 7.32 5.25


Interest cost 0.52 0.37 0.72 0.50

Actuarial loss/(gain) (1.36) (0.15) 1.42 0.49

Benefits paid (0.14) (0.22) (0.88) (0.52)

Closing Defined Benefit Obligation 8.35 6.49 10.78 7.32



VISA Steel Limited



Actual Return on Plan Assets [Plan Assets consist of funds

maintained with LICI for gratuity scheme]

0.84 0.61 - -


Discount Rates 8% 8% 8% 8%

Expected Return on Plan Assets 8% 6.57% - -

Expected Salary increase rates 6% 5% - 5%

Mortality Rates LIC (1994-96) mortality tables



Reconciliation of opening and closing balances of the fair

value of plan assets:

Opening fair value of Plan Assets 9.29 6.81 - -

Expected Return on Plan Assets 0.84 0.61 - -

Contributions by employer 2.48 2.09 0.88 0.52

Benefits paid (0.14) (0.22) (0.88) (0.52)

Closing Fair Value on Plan Assets 12.47 9.29 - -

Rs. Million

Gratuity 31 March

Leave Encashment 31 March

2010 2009 2010 2009

The estimates of future salary increase considered in the actuarial valuation takes into account factors like inflation,

seniority, promotion and other relevant factors. The expected return on plan assets is based on actuarial expectation of the

average long term rate of return expected on investments of the funds during the estimated terms of the obligations. The

contribution expected to be made by the Company for the year ending 31 March 2011 cannot be readily ascertainable and

therefore not disclosed.


Net (Asset) / Liability recognised in Balance Sheet including experience adjustment impact :

Gratuity31 March


2010 2009 2008 2010 2009 2008

Present value of funded obligation 8.36 6.50 4.63 - - -

Present value of unfunded obligation - - - 10.78 7.32 5.25

Fair Value of Plan Assets 12.47 9.29 6.81 - - -

Status [(Surplus)/Deficit] (4.11) (2.79) (2.18) 10.78 7.32 5.25

Experience Adjustment of Plan Assets [(Gain)/Loss]

Experience Adjustment of Obligation [(Gain)/Loss]Not Available Not Available


VISA Steel Limited


VISA Steel Limited

Rs. Million

31 March 2010 31 March 2009

15 Details of dues to Micro and Small enterprises:


(i) The amount remaining unpaid to any supplier as at the

end of accounting year:

187.74 - 26.63 -

(ii) the amount of interest paid by the buyer in terms of

section 18, along with the amounts of the payment

made to the supplier beyond the appointed day during

accounting year:

- - - -

(iii) the amount of interest due and payable for the period

of delay in making payment (which have been paid but

beyond the appointed day during the year) but without

adding the interest specified under this Act:

- - - -

(iv) the amount of interest accrued and remaining unpaid at

the end of accounting year: and

- - - -

(v) the amount of further interest remaining due and

payable even in the succeeding years, until such date

when the interest dues as above are actually paid to

the small enterprise, for the purpose of disallowance as

deductible expenditure under section 23

- - - -

The above information has been compiled in respect of parties to the extent to which they could be identified as Micro

and Small Enterprises under Micro, Small and Medium Enterprises Development Act, 2006 on the basis of information

available with the Company.

16 As the Company’s business activity falls within a single business segment, viz. “Iron & Steel products”, the disclosure

requirements of Accounting Standard (AS-17) on “Segment Reporting”, notified by the Companies (Accounting

Standards) Rules, 2006, are not applicable.

17 As at 31 March 2010, the Company had net outstanding foreign currency exposures of Rs. 3,309.52 Million (US$ 71.33

Million) (2009: Rs.6217.95 Million, US$ 122.04 Million) of which Rs. 1248.89 Million (US$ 27.67 Million) (2009: Rs. 3931.34

Million, US$78.27 Million) has been covered by forward contracts.






Chartered Accountants Vishambhar Saran Vishal Agarwal Chairman Managing Director

Partha MitraPartner Subhra Giri Manoj Kumar Digga Membership Number 50553 Company Secretary Chief Financial Officer




VISA Steel Limited



Cash Flow Statementfor the year ended 31 March 2010

Rs. Million


A CASH FLOW FROM OPERATING ACTIVITIES:Net profit before Tax and Exceptional Item 856.78 186.02

Adjusted for:




Loss on Sale of Fixed Assets 1.15 -


Bad Debts Written Off 15.86 -



Provision for Doubtful Debts - 0.56

Unrealised Foreign Exchange gain/Loss (107.26) 670.59



Decrease in Sundry Debtors 160.26 150.46

(Increase) in Loans and Advances (205.47) (186.62)

(Increase) /Decrease in Inventories 199.90 (833.57)

Increase/Decrease in Trade and Other Payables (259.79) 2,921.54


Taxes Paid (88.72) (92.42)

Exceptional item - Loss on Exchange Fluctuation (net) - (1,184.67)

Net cash from Operating Activities 1,741.55 2,315.23

B CASH FLOW FROM INVESTING ACTIVITIES:Purchase of Fixed Assets (3,079.33) (3,013.78)

Proceeds from Sale of Fixed Assets 3.42 -

Purchase of Investments (295.75) (295.75)


Net cash used in Investing Activities (3,252.86) (3,219.17)


VISA Steel Limited


VISA Steel Limited

C CASH FLOW FROM FINANCING ACTIVITIES:Proceeds from Long Term borrowings 2538.72 1,900.91


Proceeds from Short Term borrowings 233.23 415.63

Interest Paid (860.79) (1,061.07)

Dividend Paid - (109.62)

Dividend Tax Paid - (18.69)

Net cash used in Financing Activities 1,640.17 751.52

Net Increase in Cash & Cash Equivalents 128.86 (152.42)

Cash and cash equivalents as at 1 April 2009 704.55 856.97

Cash and cash equivalents as at 31 March 2010 833.41 704.55


1 Cash and cash equivalents consist of cash in hand and balance with banks and deposits with banks:

Cash in Hand 0.14 0.40






Cash & cash equivalents 833.41 704.55

2 The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard on ‘Cash Flow Statements (AS-3)’ issued by the Institute of Chartered Accountants of India.


Cash Flow Statementfor the year ended 31 March 2010 (Contd.)







Rs. Million

31 March 2010 31 March 2009


VISA Steel Limited



Balance Sheet AbstractAnd CoMPAny’S geneRAL BuSIneSS PRofILe



Date: 19 May 2010 Subhra Giri Manoj Kumar Digga Place: Kolkata Company Secretary Chief Financial Officer

I. REGISTRATION DETAILS Registration No. : 4 6 0 1 State Code : 1 5






Total Liabilities : 2 2 7 9 5 1 2 1 Total Assets : 2 2 7 9 5 1 2 1

Sources of Funds

Paid-up Capital : 1 1 0 0 0 0 0 Reserves & Surplus : 2 0 4 6 9 3 3

Secured Loans : 1 1 0 7 6 9 9 5 Unsecured Loans : 3 5 0 3 8 7

Deferred Taxation : 3 0 1 1 0 0


Net Fixed Assets : 1 5 8 3 6 9 9 3 Investments : 6 0 0 4 0 1

Net Current Assets : (-) 1 5 8 6 5 3 0 Misc. Expenditure : 2 4 5 5 1



Turnover * : 1 1 7 1 4 8 3 3 Total Expenditure : 1 0 8 5 8 0 4 9

Profit Before Tax : 8 5 6 7 8 5 Profit After Tax : 4 7 4 1 5 9

Earning per share in Rs. : 4 . 3 1 Dividend % : 1 0


V. GENERIC NAMES OF PRINCIPAL PRODUCTS/SERVICES OF COMPANY (as per monetary terms)

Item Code No. : 7 2 0 1 1 0 0 0 Product Description : Pig Iron

Item Code No. : 2 7 0 4 0 0 3 0 Product Description : Lam Coke

Item Code No. : 7 2 0 2 4 1 0 0 Product Description : Ferro Chrome

Item Code No. : 7 2 0 3 1 0 0 0 Product Description : Sponge Iron


Ghotaringa Minerals Limited (GML), a company incorporated under the Companies Act, 1956, became subsidiary of the Company

with effect from 30 September 2005. As on 31 March 2010, 89% of the issued and subscribed equity share capital of GML was held

by the Company along with its nominees.

VISA BAO Limited (VBL), a Company incorporated under the Companies Act, 1956, became subsidiary of the Company with effect

from 23 May 2008. As on 31 March 2010, 65% of the issued and subscribed equity share capital of VBL was held by the Company

alongwith its nominees.

Name of the subsidiary Ghotaringa

Minerals Ltd.

VISA BAO Ltd.



a Number 890,000 59,150,000



3 Net aggregate amount of profits/(losses) of the subsidiary for the above

financial year of the subsidiary so far as they concern members of the

Company

a Dealt with in the accounts of the Company for the year ended

31 March 2010 (Rs.)

64,251 15,834,381

b Not dealt with in the accounts of the Company for the year ended

31 March 2010 (Rs.)

NIL NIL

4 Net aggregate amount of profits/(losses) for previous years of the subsidiary

since it became a subsidiary so far as they concern members of the

Company

a Dealt with in the accounts of the Company for the year ended

31 March 2010 (Rs.)

220,645 5,253,996

b Not dealt with in the accounts of the Company for the year ended

31 March 2010 (Rs.)

NIL NIL



Place: Kolkata Subhra Giri Manoj Kumar Digga Date: 19 May 2010 Company Secretary Chief Financial Officer

Statement Pursuant To Section 212 (3)of the Companies Act, 1956


Consolidated86/87

1. We have audited the attached consolidated balance sheet

of VISA Steel Limited (the “Company”) and its subsidiary;

hereinafter referred to as the “Group” (refer Note 1(b)

on Schedule 15 to the attached consolidated financial

statements) as at 31 March 2010, the related consolidated

Profit and Loss Account and the consolidated Cash Flow



report. These consolidated financial statements are

the responsibility of the Company’s Management. Our

responsibility is to express an opinion on these financial

statements based on our audit.













3. We did not audit the financial statements of one

subsidiary and one jointly controlled entity included in

the consolidated financial statements, which constitute

total assets of Rs.10.82 Million and net assets of Rs.10.29

Million as at 31 March 2010, total revenue of Rs.0.22

Million, net profit of Rs.0.07 Million and net cash outflows

amounting to Rs.2.26 Million for the year then ended.

The financial statements and other financial information

of the subsidiary have been audited by other auditors

whose report has been furnished to us, and our opinion

on the consolidated financial statements to the extent

they have been derived from such financial statements is

based solely on the report of such other auditors and in so

far as it relates to the amounts included in respect of the

jointly controlled entity, is based solely on the accounts,

which are not audited, prepared by the Management

of the company for the internal management reporting

purposes to assess the performance of the Joint Venture.

4. We report that the consolidated financial statements

have been prepared by the Company’s Management

in accordance with the requirements of Accounting

Standard (AS) 21 - Consolidated Financial Statements,

and Accounting Standard (AS) 27 - Financial Reporting of

Interests in Joint Ventures notified under sub-section 3C

of Section 211of the Companies Act, 1956.

5. Based on our audit and on consideration of reports of

other auditor on separate financial statements and on

the other financial information of the component of

the Group and unaudited financial statements of jointly

controlled entity prepared by the company, as referred to

above, and to the best of our information and according

to the explanations given to us, in our opinion, the

attached consolidated financial statements give a true

and fair view in conformity with the accounting principles


(a) in the case of the Consolidated Balance Sheet, of the

state of affairs of the Group as at 31 March 2010;

(b) in the case of the Consolidated Profit and Loss

Account, of the profit of the Group for the year

ended on that date: and

(c) in the case of the Consolidated Cash Flow Statement,

of the cash flows of the Group for the year ended on

that date.




Partha Mitra



Auditors’ Report to the Board of Directors of VISA Steel Limited on the Consolidated Financial Statements


Consolidated


Consolidated


The Schedules referred to above form an integral part of the Consolidated Balance Sheet. This is the Consolidated Balance Sheet referred to in our report of even date.




Rs. Million


SOURCES OF FUNDSShareholders’ FundShare Capital 1 1,100.00 1,100.00 Reserves and Surplus 2 2079.46 3,179.46 1,706.93 2,806.93 Minority Interest 336.95 163.18 Minority Interest - on account of share capital - 159.16 pending allotment

Loan Funds Secured Loan 3 11,076.99 8,891.69 Unsecured Loan 3A 350.39 38.02 Deferred Taxation [Refer Note 10 Schedule 15] 301.11 14.48

15,244.90 12,073.46

APPLICATION OF FUNDS Fixed Assets 4

Gross Block 9,267.63 8,448.40 Less : Depreciation 1,129.41 666.93 Net Block 8,138.22 7,781.47 Capital Work in Progress including Advances 7,728.42 5,415.86 Add - Share of Joint Venture [Refer Note 8 Schedule 15] 0.04 15,866.68 0.04 13,197.37

Current Assets, Loans and Advances

Inventories 5 3,417.06 3,565.08 Sundry Debtors 6 648.78 823.73 Cash and Bank Balances 7 1,364.73 1,342.49 Interest Accrued on Deposits 37.44 35.72 Loans and Advances 8 1414.26 1,229.23

6,882.27 6,996.25

Less: Current Liabilities and Provisions

Liabilities 9 7,389.13 8,164.16

Provisions 10 139.47 7.32

7,528.60 (646.33) 8,171.48 (1,175.23)

Miscellaneous Expenditure

[To the extent not written off or adjusted] Share Issue Expenses 24.55 51.32

15,244.90 12,073.46 Notes on Consolidated Accounts 15


Consolidated


Consolidated88/89

Consolidated Profit & Loss Account for the year ended 31 March 2010

Rs. Million


INCOMESales 11,983.07 10,571.11


Other Income 11 145.41 54.54

11,714.83 10,404.60

EXPENDITURE Materials 12 8,136.60 8,102.37

Expenses 13 1,613.24 1,495.14

Interest (Net) 14 602.83 296.25


10,820.95 10,201.67

Profit Before Exceptional Item, Taxation and Minority Interest

893.88 202.93

Exceptional Item

Loss on Exchange Fluctuation (net) - 1,184.67

Profit / (Loss) Before Taxation and Minority Interest 893.88 (981.74)



Fringe Benefit Tax - 4.30

Deferred Tax 286.62 395.25 (334.71) (321.77)

Profit / (Loss) after Taxation before share of Minority Interest

498.63 (659.96)

Minority Interests 8.53 2.84

Net Profit / (Loss) 490.10 (662.81)

Balance brought forward from previous years (29.90) 632.91

460.20 (29.90)

Appropriation



Balance Carried forward to Balance Sheet 331.51 (29.90)

Basic and Diluted Earning Per Share 4.46 (6.03)


The Schedules referred to above form an integral part of the Consolidated Profit & Loss Account.This is the Consolidated Profit & Loss Account referred to in our report of even date.





Consolidated


Consolidated

3 SECURED LOAN From Banks

Cash Credit 404.49 485.83


Term Loan 10,569.36 8, 390.60

[Refer Note 3(b) Schedule 15]

Interest Accrued & Due on above - 1.11



From Others



11,076.99 8,891.69


SIDBI 100.39 38.02

From Others 250.00 -

350.39 38.02

Schedulesto the Consolidated Balance Sheet

2 RESERVES & SURPLUS Capital Reserve 11.19 0.07


General Reserve As per last account 91.76 91.76

Profit and Loss Account 331.51 (29.90)

2,079.46 1,706.93

Rs. Million

31 March 2010 31 March 2009

1 SHARE CAPITAL Authorised 160,000,000 Equity Shares of Rs. 10/- each 1,600.00 1,600.00

Issued and Subscribed

110,000,000 Equity Shares of Rs. 10/- each fully paid up 1,100.00 1,100.00

Note:

(a) Of the above 56,212,167 Equity Shares of Rs. 10/- each are held by VISA Minmetal AG, the Ultimate Holding Company. (Refer Note 4 Schedule 15)

(b) Of the above 8,360,000 Equity Shares of Rs. 10/- each allotted for consideration other than cash pursuant to a scheme of amalgamation without payment being received in cash.


Consolidated


Consolidated90/91


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Consolidated


Consolidated







1,364.73 1,342.49


Considered Good 35.39 50.34


Other Debts - Considered Good 613.39 773.39

649.68 824.63


648.78 823.73

Rs. Million

31 March 2010 31 March 2009

5 INVENTORIES - AT LOWER OF COST OR NET REALISABLE VALUE

Stores & Spare Parts 126.59 64.25

Raw Materials 1,757.66 2,143.22




3,417.06 3,565.08



Consolidated


Consolidated92/93





Interest accrued but not due on loans 0.75 -



Add - Share of Joint Venture [Refer Note 8 Schedule 15] 0.04 0.04

7,389.13 8,164.16




139.47 7.32

Rs. Million

31 March 2010 31 March 2009

8 LOANS AND ADVANCES UNSECURED - CONSIDERED GOOD [UNLESS OTHERWISE STATED]Advances Recoverable in Cash or in kind or


Considered Good 1,200.12 943.65


1,223.62 954.65


1,200.12 943.65

Deposits with


Others 97.29 163.46

Advance Payment of Income Tax 106.14

112.40

[Net of Provision Rs. 286.58 Million (2009: Rs.177.97 Million)]


[(Net of Provision Rs. 15.16 Million (2009: Rs.16.80 Million)]

Add - Share of Joint Venture [Rs.2,932 (2009: Rs.2,932)] - -

[Refer Note 8 Schedule 15]

1,414.26 1,229.23


Consolidated


Consolidated

Schedulesto the Consolidated Profit and Loss Account

Rs. Million

31 March 2010 31 March 2009

11 OTHER INCOME Insurance Claim received 17.76 9.79

Gain on Exchange Fluctuation (Net) 38.43 -


145.41 54.54


Opening Stock 2,143.22 1,484.62

Add: Purchase 6,480.62 8,807.47

Less: Closing stock 1,757.66 6,866.18 2,143.22 8,148.87

Purchase of Finished Goods 1,447.24 190.63

(Increase)/ Decrease in Stock

Opening Stock




1,357.61 1,185.73

Less: Closing Stock




1,532.81 (175.20) 1,357.61 (171.88)

Increase/ (Decrease) in Excise Duty on Stock (1.62) (65.25)

8,136.60 8,102.37


Consolidated


Consolidated94/95

Schedulesto the Consolidated Profit and Loss Account (Contd.)

Rs. Million

31 March 2010 31 March 2009

13 EXPENSES Salary, Wages & Bonus 316.77 197.53


Workmen and Staff Welfare Expenses 4.00 333.96 1.99 210.41


Power & Fuel 161.15 322.67

Rent 31.33 22.69




- Others 5.56 55.76 3.61 28.30




Custom & Cess 0.07 21.38


Loss on Sale of Assets 1.15 -



Provision for Doubtful Debts 12.50 0.56

Provision for Doubtful Advances - 11.00




1,613.24 1,495.14

14 INTEREST (NET) Interest on:


Term Loan 460.77 269.05


Others 187.46 769.79 79.88 428.09

Less: Interest Income (Gross) [Tax Deducted at Source

Rs.11.35 Million (2009: Rs. 17.11 Million)]


Others (118.40) (166.96) (65.73) (131.84)

602.83 296.25


Consolidated


Consolidated

15. NOTES ON ACCOUNTS 1. Statement on Significant Accounting Policies

(a) Basis of Consolidation

The Consolidated financial statements comprises of the financial statements of VISA Steel Limited (the Holding

Company) and its subsidiaries and joint venture. The Consolidated financial statements are prepared in accordance

with Accounting Standard 21 on “Consolidated Financial Statements” and Accounting Standard 27 on “Financial

Reporting of Interests in Joint Ventures”.

The Consolidated financial statements are prepared on the following basis:

(i) The financial statements of the Holding Company and its Subsidiary Companies have been combined on a

line by line basis by adding together like items of assets, liabilities, income and expenses. The intra-group

balances, intra-group transactions and unrealised profit or losses thereon have been fully eliminated.

(ii) The financial statements of the Subsidiaries and Joint Venture used in the consolidation are drawn up to the

same reporting date as that of the Holding Company.

(iii) The excess value of the consideration given over the net value of the identifiable assets acquired in one of the

subsidiary company is recognised as “Goodwill” and is not being amortised.

(iv) Joint venture have been accounted for using the proportionate consolidation method whereby a venturer’s

share of each of the assets and liabilities of the jointly controlled entity is accounted for on a prorata basis.

(b) The subsidiary companies and joint venture considered in the Consolidated financial statements are:

Country of Incorporation

% of Voting power held as at 31 March 2010 [Including Beneficial Interest]

Subsidiaries

VISA BAO Limited India 65%

Ghotaringa Minerals Limited India 89%

Joint Venture

Patrapada Coal Mining Co. Pvt. Limited India 0.49%

(c) Principal Accounting Policies

The Consolidated Financial Statements have been prepared in accordance with applicable Accounting Standards

in India. A summary of Important accounting policies are set out below.

(d) Basis of Accounting


(e) Fixed Assets

(i) Fixed Assets are stated at their purchase cost (net of CENVAT credit), where applicable together with any

incidental expenses of acquisition/ installation. Cost of acquisition includes borrowing costs that are directly

attributable to the acquisition/construction of qualifying assets. Impairment loss, if any, ascertained as per

the Accounting Standard u/s 211(3C) of the Companies Act, 1956.

(ii) Depreciation on fixed assets, other than leasehold land, is provided on Straight Line Method in accordance

with Schedule XIV of the Companies Act, 1956. Leasehold land is amortized over the period of lease. No

depreciation is provided for freehold land.

(iii) Computer software has been capitalised as Intangible Assets and are being amortised in equal installments

over its useful life of three years.




Consolidated


Consolidated96/97

(f) Inventories

Inventories are stated at cost (net of CENVAT credit) or net realisable value, whichever is lower. Cost is determined

on weighted average basis and comprises of expenditure incurred in the normal course of business in bringing

such inventories to their location and includes, where applicable appropriate overheads. Obsolete, slow moving

and defective inventories are identified at the time of physical verification and where necessary, provision is made

for such inventories.

(g) Sales

Sales represent the invoiced value of goods and services supplied, net of value added tax (VAT)/ sales tax but

inclusive of excise duty.

(h) Transactions in Foreign Currencies

Transactions in foreign currencies are recorded in rupees by applying the exchange rate prevailing on the date of


Exchange gain or loss arising on settlement/ translation is recognised in the Profit and Loss Account. Premium or

discount on forward contracts are amortised over the life of the contract. Foreign exchange forward contracts are

revalued at the balance sheet date and the exchange difference between the spot rate at the date of the contract

and the spot rate on the balance sheet date is recognised as gain/loss in the Profit & Loss Account.

(i) Employee Benefits


(a) Provident Fund


contribution to provident funds which are fully funded and administered by Government and are

independent of Company’s finance. Contributions are recognized in Profit & Loss Account on an accrual

basis.

(b) Gratuity

Defined Benefit Plans like Gratuity Schemes are also maintained by the Company. The Company has

taken out a policy with Life Insurance Corporation of India (LICI) for future payment of gratuity liability

to its employees. Gratuity liability is determined as at the end of each year by LICI in accordance with

the method stated in the Accounting Standard 15 (Revised 2005) on “Employee Benefits” and such

liability has been provided for in the accounts. Annual Premium determined by LICI is contributed.


Leave encashment benefit on retirement is determined on the basis of independent actuarial valuation,

at the end of each year in accordance with the method stated in Accounting Standard 15 (Revised

2005) and such liability is provided for in the accounts and charge is recognized in the Profit and Loss

Account.



(j) Deferred Tax


to the extent it is probable that a liability or asset will crystallise. Deferred Tax Assets are recognised subject to

consideration of prudence and are periodically reviewed to reassess realisation thereof.




Consolidated


Consolidated

(k) Borrowing Cost

Borrowing costs attributable to acquisition and/ or construction of qualifying assets are capitalized as a part of

the cost of such assets upto the date when such assets are ready for its intended use. Other borrowing costs are

charged to Profit & Loss Account.

(l) Leases

Assets acquired as leases where a significant portion of the risk and rewards of ownership are retained by the lesser

are classified as operating leases. Lease rentals are charged to the Profit & Loss Account on accrual basis.

(m) Miscellaneous Expenditure - To the extent not written off or adjusted

Public issue expenses in respect of Holding Company are being amortized in equal installment over a period of five

years.

2. (a) Claim against the Holding Company not acknowledged as Debt:

(i) In respect of a charter party dispute between VISA Comtrade (Asia) Limited (the “Charterer”) and Transfield

Shipping Inc., Panama (the “Owner of the Vessel - Prabhu Gopal”), the said Owner of the vessel has filed a civil suit

in the Hon’ble Calcutta High Court against the Holding Company and the Charterer claimed relief for a decree for

US$ 0.30 Million to be expressed in Indian Currency at such rate of exchange and/or on such terms as the Court

may deem fit and proper, Injunction, Costs or other reliefs. The Company has not accepted the claim as it was not a

party to the said Agreement and hence cannot be made a party to the suit. The Hon’ble Court passed interim order

dated 11 May 2005 & 20 June 2005, restraining the Holding Company and the Charterer from withdrawing any

amount from a specified bank account without leaving a balance for a sum of Rs. 12.50 Million, which has been set

aside by the bank from cash credit limit of the Company. The suit is currently pending before the Hon’ble Calcutta

High Court.

(ii) Applications have been filed by the legal heirs of a deceased employee of the Holding Company and his sister

respectively, who died in a road accident while traveling in the Holding Company’s vehicle for their personal work,

claiming a compensation of Rs. 6.05 Million and interest @ 18% per annum and Rs. 0.55 Million respectively. The

Holding Company has contested the claims, which are currently pending before the Motor Accident Claims Tribunal,

Bhubaneswar and the Additional District Judge cum 3rd Motor Accident Claims Tribunal, Rourkela respectively.




Consolidated


Consolidated98/99


31 March 2010 31 March 2009

(b) Estimated amount of Contracts remaining to be

executed on Capital Account and not provided for

[net of advance Rs. 47.73 Million (2009 : Rs. 77.29

Million)]

3,344.36 2,501.84

(c) Contingent liability not provided for in respect of

the Holding Company:






(vi) Differential tariff of electricity and Delayed

Payment Surcharge thereon

- 11.61

(d) The Holding Company has obtained licenses from the Government of India under EPCG Scheme for import of machineries at a reduced Customs Duty and thereby saved an amount of Rs. 522.17 Million towards duty upto 31 March 2010. As per the requirement under the said Scheme, the Holding Company is required to export amounting to Rs. 4,177.32 Million within the specified periods, failing which, the Holding Company has to make payment to the Government of India equivalent to the duty benefit enjoyed along with inter-est. The Holding Company is confident that the above export obligation will be met during the specified period.

3. (a) In respect of the Holding Company working capital facilities from banks are secured by way of first hypothecation charge ranking pari-passu with other banks on the whole of the current assets, namely, stocks of raw material, stock in process, semi finished & finished goods, stores & spares not relating to plant & machinery (i.e. consumable stores & spares), bills receivable & book debts and all other movables, both present and future, whether installed or not provided that the charge in favour of the banks on the moveable plant & machinery, machinery spares, tools & accessories shall be subject to the charges created and/ or to be created thereon in favour of the term lenders to secure the long term borrowing/ loans for capital expenditure. The working capital facilities are also secured by second mortgage charge on the land situated at Kalinganagar Industrial Complex, District Jajpur, Orissa together with building and structures thereon and all plant & machinery attached to the earth or permanently fastened to anything attached to the earth along with corporate guarantee of VISA International Limited and personal guarantee of Managing Director of the Company.

(b) In respect of the Holding Company term loan from bank other than General Corpus Corporate Loan is secured by first charge on the land and fixed assets situated at Kalinganagar Industrial Complex, District Jajpur, Orissa together with hereditaments and premises and building, plant and machineries permanently affixed thereto and other erections thereon both present and future at Plant at Kalinganagar Industrial Complex, District Jajpur, Orissa and second charge on all the current assets of the Holding Company ranking pari-passu with other banks along with Corporate Guarantee of VISA International Limited and personal guarantee of Managing Director of the Holding Company.

In respect of the Holding Company General Corpus Corporate Loan is secured by first charge on all the moveable fixed assets of the Holding Company and second charge on all the current assets of the Holding Company both present and future on pari-passu basis along with other term lenders.

(c) In respect of the Holding Company vehicle and other loan from banks and financial Institutions are secured by way of hypothecation of vehicles/machinery taken under the loan arrangement.

4. Pursuant to an inter se transfer of shares between the Promoter Group Companies, VISA Minmetal AG transferred its entire shareholding to a Promoter Group Company, VISA Infrastructure Limited subsequent to which VISA Infrastructure Limited became the Ultimate Holding Company of the Company w.e.f. 30th April 2010.



Consolidated


Consolidated

5. On 29 July, 2008, the Board of the Holding Company approved the VISA Steel Employee Stock Option Scheme 2008 (ESOP Scheme) and Members passed the Special Resolution vide Postal ballot pursuant to Section 192A of the Companies Act, 1956 for grant of not more than 5,500,000 stock options convertible into not more than 5,500,000 Equity Shares of face value Rs. 10 each fully paid up, through Trust for the purpose of welfare and benefit of the employees of the Holding Company including any Director of the Holding Company, whether whole-time or otherwise. The Remuneration Committee will administer the scheme through the trust, which has registered in the name and style of “VISA Steel Limited – Employee Welfare Trust” on 23 September 2008 with Registrar of Assurances, Kolkata for implementing the Employee Stock Option Scheme 2008 for the employees specified therein.

In view of that scheme the Holding Company has transferred Rs.10 Million to VISA Steel Limited – Employee Welfare Trust for procurement of share from the market, which will be granted to the employees of the Holding Company as per the scheme after obtaining the approval of the Remuneration Committee. However the trust has not purchased any share from the market and the amount is lying under the current account of the Trust. Moreover, no option has been granted under the Scheme till date.


Rs. Million

31 March 2010 31 March 2009

6. Consolidated Earning Per Share Consolidated Profit / (Loss) After Tax (A) 490.10 (662.81)

Weighted average number of Rs. 10 equity share outstanding during the year (B)

110,000,000 110,000,000

Basic and Diluted Earning per Share (A/B) 4.46 (6.03)7. Directors Remuneration (in respect of the Holding Company)*

Salaries, Allowances & Bonus 39.11 6.15 Retirement benefits 3.63 2.72 Perquisites 3.59 1.05 Commission 11.82 -

58.15 9.92 Directors’ Sitting Fees 1.24 0.95

TOTAL 59.39 10.87

Profit for the year before taxation as per

Profit & Loss Account 893.88 -

Add: Depreciation 468.28 - Provision for Doubtful Advances 12.50 - Directors’ Remuneration for the current year 42.23 523.01 - -

1,416.89 -

Less: Depreciation u/s 350 of the Companies Act, 1956 468.28 468.28 - - 948.61 -

Commission to Executive Directors 8.82 - Commission to Non Executive Directors** 3.00 -

11.82 - **Within the overall limit of 1% of Net Profit 9.49 -

*Includes Rs 15.92 Million towards 2008-09 managerial remuneration, for which Central Government has approved waiver of recovery of Rs 7.61 Million and Rs 6.60 Million from Mr Vishambhar Saran, Chairman and Mr Vishal Agarwal, Managing Director respectively. The Central Government has not given any approval for waiver in respect of Mr Basudeo Prasad Modi, Deputy Managing Director, of Rs 1.71 Million as they were of the view that the remuneration payable to him for 2008-09 was within the permissible limit under Schedule XIII of the Companies Act, 1956.

SchedulesSchedules to the Consolidated Accounts


Consolidated


Consolidated100/101

11. Operating Leases (in respect of the Holding Company) 8.22 8.56

Rent [Including minimum lease payment Rs. Nil (2009: Rs. Nil)]

[Operating leases for office premises are entered into for a period

of three years and thereafter renewable by mutual consent of both

the parties. The operating leases are cancellable by either party by

giving three month’s notice.]


Rs. Million

31 March 2010 31 March 2009

10. Deferred Tax Provision has been made in the accounts in accordance

with the requirements of the Accounting Standard on “Taxes on

Income” (AS 22) issued by The Institute of Chartered Accountants of

India. The major components of the deferred tax Liabilities/(Assets)

based on the tax effects of timing differences are as follows:



Public Issue Expenses 8.16 8.40

744.21 624.28

Deferred Tax Assets


Unabsorbed Loss Carried Forward (76.99) (230.80)

Others (18.36) (8.99)

(443.10) (609.80)

301.11 14.48

8. Investment in Joint Venture

Joint Venture Patrapada Coal Mining Co. Private Limited



During the current year no Profit and Loss Account has been prepared for joint venture, as there was no revenue

transactions. However, the Group’s share of the assets and liabilities etc. based solely on the accounts prepared for the

internal management reporting purposes by the Holding Company to assess the performance of the joint venture

related to its interest in the Joint Venture.

9. Addition/Adjustment of Fixed Assets and Capital Work in Progress include borrowing cost amounting to Rs. 90.63

Million (2009: Rs.427.93 Million) and Rs.510.69 Million (2009: Rs.632.98 Million) respectively.



Consolidated


Consolidated

12. Related Party DisclosuresNature of Relationship Name of the Related Parties

Ultimate Holding Company VISA Minmetal AG


Fellow Subsidiaries Far East Trading AG (f.k.a. VISA Comtrade AG)

VISA Coal Pty. Limited

VISA GMR Limited

VISA Global Mineral Resources SA (Proprietary) Limited

Far East Chartering Limited

VISA Power Limited



Mr. Vishal Agarwal



Mr. Vikas Agarwal

Mr. Vivek Agarwal

Mr. Ashok Agarwal

Enterprise over which Relatives of Key Khandadhar Minerals Limited


influence VISA Minmetal Limited


North East Resources Limited



VISA Chartering Limited

VISA Group Limited


VISA Resource Pte Limited

VISA Trust

PT VISA Indo




Consolidated


Consolidated102/103


15.

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Consolidated


Consolidated


14. Employee Benefits

In respect of the Holding Company and its subsidiary, VISA BAO Limited

Provident fund is maintained with Regional Provident Fund Commissioner and contributions are made by the Companies

to the Fund, based on the current salaries. In the provident fund schemes, contribution are also made by the employees. An

amount of Rs 13.01 Million (2009: Rs 9.15 Million) has been charged to the Profit and Loss Account on account of the above

defined contribution schemes.

The Companies operate defined benefit schemes like gratuity and leave encashment. The holding Company has taken out a

policy with Life Insurance Corporation of India (LICI) for future payment of gratuity liability to its employees. Annual actuarial

valuations are carried out by LICI in compliance with Accounting Standard 15 (Revised 2005) on Employee Benefits. Annual

contributions are also made by the Company. Employees are not required to make any contribution. In respect of VISA

BAO Limited, the Company is in the process of taking out benefit schemes like gratuity and annual actuarial valuations are

being carried out by Life Insurance Corporation of India (LICI) in compliance with Accounting Standard 15 (Revised 2005) on

Employee Benefits.


Rs. Million

31 March 2010 31 March 2009

13. In respect of the Holding Company: Details of dues to Micro and Small enterprises


(i) The amount remaining unpaid to any supplier as at the end of accounting year;

187.74 - 26.63 -


- - - -


- - - -


- - - -


- - - -

The above information has been compiled in respect of parties to the extent to which they could be identified as Micro and Small Enterprises under Micro, Small and Medium Enterprises Development Act, 2006 on the basis of information available with the Holding Company.

In respect of the Subsidiary Company:There are no Micro, Small and Medium Enterprises, as required to be disclosed under the “Micro, Small and Medium Enterprise Development Act, 2006” identified by the Subsidiary Company on the basis of information available with the Subsidiary Company.


Consolidated


Consolidated104/105









The Companies also provide for leave encashment benefit to the employees. Annual actuarial valuations are carried out by an

independent actuary in compliance with Accounting Standard 15 (Revised 2005) on Employee Benefits. Employees are not

required to make any contribution.

In respect of the Subsidiary Company, Ghotaringa Minerals Limited

The relevant provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952, Employees State Insurance Act,

1948, Payment of Gratuity Act, 1972 and Payment of Bonus Act, 1965 are not applicable to the Company.

15. As the Holding Company and its subsidiaries’ business activity falls within a single business segment, viz. “Iron & Steel products”,

the disclosure requirements of Accounting Standard (AS-17) on “Segment Reporting”, notified by the Companies (Accounting

Standards) Rules, 2006, are not applicable.

16. As at 31 March 2010, the Holding Company had net outstanding foreign currency exposures of Rs.3,309.52 Million (US$ 71.33

Million) (2009: Rs.6,217.95 Million, US$ 122.04 Million) of which Rs.1,248.89 Million (US$ 27.67 Million) (2009: Rs.3,931.34

Million, US$78.27 Million) has been covered by forward contracts.

17. Previous year’s figures have been rearranged/ re-grouped wherever necessary.


Consolidated


Consolidated

Consolidated Cash Flow Statementfor the year ended 31 March 2010

Rs. Million


A CASH FLOW FROM OPERATING ACTIVITIES:Net profit before Tax and Exceptional Item 893.88 202.93

Adjusted for:




Loss on Sale of Fixed Assets 1.15 -





Provision for Bad and Doubtful Debts - 0.56

Unrealised Foreign exchange gain / loss (107.26) 670.59



Decrease in Sundry Debtors 160.25 150.46

(Increase) in Loans and Advances (205.86) (186.68)

(Increase)/ Decrease in Inventories 199.90 (833.57)

Increase/ (Decrease) in Trade and Other Payables (658.17) 2,945.85


Taxes Paid (103.34) (92.45)

Exceptional item - Loss on Exchange Fluctuation (net) - (1,184.67)

Net cash from Operating Activities 1,316.79 2,331.06

B CASH FLOW FROM INVESTING ACTIVITIES:Purchase of Fixed Assets (3,103.41) (3,013.76)

Proceeds from Sale of Fixed Assets 3.42 -


Net cash used in Investing Activities (2,934.72) (2,919.69)


Consolidated


Consolidated106/107

C CASH FLOW FROM FINANCING ACTIVITIES:Proceeds from Issue of Equity Shares - 159.25

Proceeds from Advance against Share Capital - 159.16

Proceeds from Long Term borrowings 2,538.72 1,900.91


Proceeds from Short Term borrowings 233.23 415.62

Interest Paid (860.79) (1,060.83)

Dividend Paid - (109.62)

Dividend Tax Paid - (18.69)

Net cash used in Financing Activities 1,640.17 1,070.16

Net Increase in Cash & Cash Equivalents 22.24 481.54

Cash and cash equivalents as at 1 April 2009 1,342.49 860.95

Cash and cash equivalents as at 31 March 2010 1,364.73 1,342.49


1 Cash and cash equivalents consist of cash in hand and

balance with banks and deposits with banks

Cash and Cheques in hands 0.15 0.40






Cash & cash equivalents 1,364.73 1,342.49







2 The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard

on ‘Cash Flow Statements (AS-3)’ issued by the Institute of Chartered Accountants of India.


Rs. Million


Consolidated Cash Flow Statementfor the year ended 31 March 2010 (Contd.)


VISA BAO Limited


VISA BAO Limited



Dear Members,

Your Directors have pleasure in presenting the 2nd Annual

Report and Audited statement of Accounts of VISA BAO Limited


The Company was incorporated on 01 February 2008 as a

subsidiary of VISA Steel Limited, India (VSL). It became a

subsidiary of Baosteel Resources Co. Ltd, China (Baosteel) on

10 July 2009, with the issue of 15,925,000 equity shares of Rs.10

each aggregating to Rs.159,250,000. Later during the year, on

further issue of 29,575,000 equity shares of Rs.10/- each to VISA

Steel Limited, the Company again became a subsidiary of VISA

Steel Limited. The present share holding of the Joint Venture

Partners in the Company is in the following ratio – VSL – 65%,

Baosteel – 35%.

During the year, the paid-up capital of the Company was

increased to Rs.910 million by issue of a further 45,500,000

equity shares of Rs. 10/- each in the same proportion as above.

Financial Results (Rs.)

Particulars Year ended31-03-2010

Period ended31-03-2009

Gross Revenue (Interest Income) 48,339,804 25,038,512

Expenditure 11,372,556 8,255,441

Profit/ (Loss) before Taxation 36,967,248 16,783,071

Provision for Taxation 12,606,661 8,700,000

Profit/ (Loss) after Taxation 24,360,587 8,083,071

Profit/ (Loss) brought forward from previous year 8,083,071 NIL

Balance carried forward to Balance Sheet 32,443,658 8,083,071

Your Company is in Project implementation stage, hence there are no operational revenues or profits, the period under review

being the third year since incorporation.

Dividend

Since your Company has not yet commenced any operations,

your Directors have not recommended any dividend for the

period under reference.

Operations

Your Company is setting up a 100,000 TPA Ferro Chrome plant

with 4 Submerged Arc Furnaces of 16.5 MVA at Kalinganagar

in Orissa.

The Company has made significant progress towards

finalization of Layout, Site Preparation and obtaining necessary

environmental clearances from MOEF (Ministry of Environment

and Forest), New Delhi and other statutory approvals. We have

made applications for grant of mining lease for Chrome Ore

with Government of Orissa. The Company has also started

employment of Project team for execution of the Project.

The Company is scheduled to complete the Project by the end

of 2011.

Directors

Mr. Vishambhar Saran, Mr. Vishal Agarwal and Mr. Jiang Xia,

Directors appointed at the First Annual General Meeting of the

Company, are liable to retire by rotation at the forthcoming

Annual General Meeting and being eligible, offer themselves

for re-appointment.

The Board of Directors of your Company currently consists

of 8 Directors, comprising of 5 directors nominated by VISA

Steel Limited (Mr. Vishambhar Saran, Mr. Vishal Agarwal, Mr.

Vivek Agarwal, Mr. Basudeo Prasad Modi and Mr. Manoj Kumar

Digga) and 3 directors nominated by Baosteel Resources Co.

Limited (Mr. Jiang Xia, Mr. Qinghua Zhou and Mr. Chao Ji).

Directors’ Responsibility Statement

In terms of provision of Section 217(2AA) of the Companies

Act, 1956, your Directors confirm as under:

(i) that in the preparation of the annual accounts, the

applicable accounting standards have been followed


departures;

(ii) that the Directors have selected such accounting policies



true and fair view of the state of affairs of the Company

at the end of the financial year and of the profit / (loss) of

the Company for that period;


VISA BAO Limited


VISA BAO Limited

Annual Report 2009-10108/109

(iii) that the Directors had taken proper and sufficient care

for the maintenance of adequate accounting records in

accordance with the provisions of this Act for safeguarding

the assets of the Company and for preventing and

detecting fraud and other irregularities;

(iv) that the Directors had prepared the annual accounts on a


Auditors

The Auditors of the Company, M/s Lovelock & Lewes, Chartered

Accountants, Kolkata, retire at the conclusion of the ensuing

Annual General Meeting and being eligible, offer themselves

for re-appointment.

Auditors’ Observations

The Auditors’ have not made any adverse observations in their

report for the Financial Year ended 2009-10.

Public Deposit

The Company has not accepted any deposit from the public

during the period.

Audit Committee

As per Section 292A of the Companies Act, 1956 the Audit

Committee of the Company comprises of the following Board

Members:

Name of the Director Designation

Mr. Vishal Agarwal Chairman

Mr. Vivek Agarwal Member

Mr. Jiang Xia Member

Conservation of Energy and Technology Absorption

No disclosure is required to be given under section 217(1)

(e) of the Companies Act, 1956. The Company has so far not

undertaken any research and development of any technology

in the areas relating to Company’s Business.

Foreign Exchange Earnings & Outgo

The particulars, with respect to foreign exchange earnings and

outgo pursuant to the Companies (Disclosure of Particulars in

the Report of the Board of Directors) Rules, 1988, during the

year 2009-10 has been set out in Annexure I to this report.

Particulars of Employees

The particulars of employee, employed throughout the

Financial Year 2009-10, pursuant to the provisions of Section

217(2A) of the Companies Act, 1956 read with the Companies

(Particulars of Employees) Rules, 1975 (as amended) are set out

in Annexure II to this report.

Acknowledgement

Your Directors wish to place on record their sincere appreciation

for the continued cooperation and support extended by the

various Government Authorities, Bankers, shareholders and all

other business associates of the Company. The Directors also

convey their appreciation to the members of the Company

for their commitment and involvement during the year under

review.


Place: Kolkata Vishal Agarwal Jiang Xia

Date: 14 May 2010 Director Director


VISA BAO Limited


VISA BAO Limited


Annexure I to Directors’ Report

Annexure II to Directors’ Report

FOREign ExChAngE EARningS & OuTgO(Rs.)

2009-10 2008 -09

Foreign Exchange Earnings NIL NIL


Traveling Expenses 1,382,277 173,121


Place: Kolkata Vishal Agarwal Jiang Xia



Place: Kolkata Vishal Agarwal Jiang xia


Particulars of Employees under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees)

Rules, 1975 (as amended) and forming part of Directors’ Report for the year ended on 31 March 2010:

EMPlOYED ThROughOuT ThE YEARSl. No Name Designation Remuneration

(Rs.)

Qualification Experience

(Years)

Date of

Joining

Age Last Employment

Details

1 Mr. Ranjan

Mishra

President 31,99,596 Bachelor of

Engineering

(Metallurgy)

24 01/04/09 47 Vice-President

VISA Steel Ltd.


VISA BAO Limited


VISA BAO Limited


1. We have audited the attached Balance Sheet of VISA BAO

Limited (the “Company”) as at 31 March 2010, and the

related Profit and Loss Account and Cash Flow Statement

for the year ended on that date annexed thereto, which we

have signed under reference to this report. These financial

statements are the responsibility of the Company’s

Management. Our responsibility is to express an opinion

on these financial statements based on our audit.

















(4A) of Section 227 of ‘The Companies Act, 1956’ of India

(the ‘Act’) and on the basis of such checks of the books and

records of the Company as we considered appropriate







explanations which, to the best of our knowledge

and belief, were necessary for the purposes of our

audit;

(b) In our opinion, proper books of account as required

by law have been kept by the Company so far as

appears from our examination of those books;



agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss

Account and Cash Flow Statement dealt with by this

report comply with the accounting standards referred

to in sub-section (3C) of Section 211 of the Act;


from the directors, as on 31 March 2010 and taken

on record by the Board of Directors, none of the

directors is disqualified as on 31 March 2010 from

being appointed as a director in terms of clause (g)

of sub-section (1) of Section 274 of the Act;

(f ) In our opinion and to the best of our information




manner, the information required by the Act, and

give a true and fair view in conformity with the

accounting principles generally accepted in India:



(ii) in the case of the Profit and Loss Account, of

the profit for the year ended on that date; and




Lovelock & Lewes



Partha Mitra



Auditors’ Report to the Members of VISA BAO Limited


VISA BAO Limited


VISA BAO Limited



1. (a) The Company is maintaining proper records showing

full particulars, including quantitative details and

situation, of fixed assets.

(b) The fixed assets of the Company have been

physically verified by the Management during the

year and no material discrepancies between the

book records and the physical inventory have been

noticed. In our opinion, the frequency of verification

is reasonable.

(c) In our opinion and according to the information and

explanations given to us, a substantial part of fixed

assets has not been disposed of by the Company

during the year.

2. (a) The Company has not granted any loans, secured

or unsecured, to companies, firms or other parties


301 of the Act.

(b) The Company has not taken any loans, secured or

unsecured, from companies, firms or other parties


301 of the Act.


explanations given to us, there is an adequate internal

control system commensurate with the size of the

Company and the nature of its business for the purchase

of inventory, fixed assets and for the sale of goods and

services. Further, on the basis of our examination of the

books and records of the Company, and according to

the information and explanations given to us, we have

neither come across nor have been informed of any

continuing failure to correct major weaknesses in the

aforesaid internal control system.

4. (a) In our opinion and according to the information and

explanations given to us, the particulars of contracts

or arrangements referred to in Section 301 of the

Act have been entered in the register required to be

maintained under that section.


and explanations given to us, there are no

transactions made in pursuance of such contracts

or arrangements and exceeding the value of Rupees

Five Lakhs in respect of any party during the year,

which have been made at prices which are not

reasonable having regard to the prevailing market

prices at the relevant time.

5. The Company has not accepted any deposits from the

public within the meaning of Sections 58A and 58AA of

the Act and the rules framed there under.

6. In our opinion, the Company has an internal audit system

commensurate with its size and nature of its business.

7. The Central Government of India has not prescribed

the maintenance of cost records under clause (d) of

sub-section (1) of Section 209 of the Act for any of the

products of the Company.

8. (a) According to the information and explanations given

to us and the records of the Company examined

by us, in our opinion, the Company is generally

regular in depositing the undisputed statutory dues

including provident fund, investor education and

protection fund, employees’ state insurance, income

tax, sales tax, wealth tax, service tax, customs duty,

excise duty, cess and other material statutory dues

as applicable with the appropriate authorities. .


VISA BAO Limited


VISA BAO Limited



(b) According to the information and explanations given


us, there are no dues of income tax, sales tax, wealth

tax, service tax, customs duty, excise duty and cess

which have not been deposited on account of any

dispute.

9. As the Company is registered for a period less than

five years, clause (x) of paragraph 4 of the Companies

(Auditor’s Report) Order, 2003, as amended by the

Companies (Auditor’s Report) (Amendment) Order, 2004,

is not applicable for the year.

10. According to the records of the Company examined by

us and the information and explanation given to us, the

Company has not defaulted in repayment of dues to any

financial institution or bank or debenture holders as at

the balance sheet date.

11. The Company has not granted any loans and advances

on the basis of security by way of pledge of shares,

debentures and other securities.

12. The provisions of any special statute applicable to chit

fund/ nidhi/ mutual benefit fund/ societies are not

applicable to the Company.




explanations given to us, the Company has not given

any guarantee for loans taken by others from banks or

financial institutions during the year.



sheet of the Company, in our opinion and according to

the information and explanations given to us, there are

no funds raised on a short-term basis which have been

used for long-term investment.

17. The Company has not made any preferential allotment of

shares to parties and companies covered in the register



the period and accordingly the question of creation of

security or charge does not arise.


during the year.




according to the information and explanations given to

us, we have neither come across any instance of fraud

on or by the Company, noticed or reported during the

year, nor have we been informed of such case by the

Management.

21. The other clause, (ii) of paragraph 4 of the Companies

(Auditor’s Report) Order 2003, as amended by the

Companies (Auditor’s Report) (Amendment) Order, 2004,

are not applicable in the case of the Company for the

year, since in our opinion there is no matter which arises

to be reported in the aforesaid Order.


Lovelock & Lewes



Partha Mitra




VISA BAO Limited


VISA BAO Limited



(Rs.)


SOuRCES OF FunDSShareholders’ FundShare Capital 1 910,000,000 455,000,000

Reserves and Surplus 2 49,563,317 959,563,317 8,083,071 463,083,071

Advance against Share Capital - 159,158,246

Deferred Taxation [Refer Note 6 Schedule 9] 6,661 -

959,569,978 622,241,317

APPliCATiOn OF FunDSFixed Assets 3

Gross Block 1,793,484 -

Less: Depreciation 85,982 -

Net Block 1,707,502 -

Capital Work in Progress 19,533,949 21,241,451 - -

Current Assets, loans and AdvancesCash and Bank Balances 4 529,543,891 633,913,903

Interest Accrued on Fixed Deposits from Banks 19,288,475 17,184,551

Loans and Advances 5 393,986,922 14,008

942,819,288 651,112,462

less: Current liabilities and ProvisionsLiabilities 6 1,011,107 24,314,295

Provisions 7 3,479,654 4,556,850

4,490,761 938,328,527 28,871,145 622,241,317

959,569,978 622,241,317

notes on Accounts 9

The Schedules referred to above form an integral part of the Balance Sheet.




Chartered Accountants Vishal Agarwal Jiang xiaDirector Director

Partha MitraPartner Basudeo Prasad Modi Vikash Prasad SinghMembership Number 50553 Managing Director Company Secretary




VISA BAO Limited


VISA BAO Limited


Profit & Loss Account for the year ended 31March 2010

(Rs.)


inCOME Other Income

Income from Interest on Fixed Deposit

from Banks (Gross)

48,339,804 25,038,512

[Tax Deducted at source Rs. 5,233,059

(2009: Rs. 4,143,150)]

48,339,804 25,038,512

ExPEnDiTuRE Expenses 8 11,286,574 8,255,441

Depreciation 85,982 -

11,372,556 8,255,441

Profit Before Taxation 36,967,248 16,783,071


Current Tax-Net of Provision 12,600,000 8,600,000

Fringe Benefit Tax - 100,000

Deferred Tax 6,661 -

Profit After Taxation 24,360,587 8,083,071

Appropriation Transfer to General Reserve - -

Proposed Dividend - -

Income Tax on Proposed Dividend - -

Balance Carried forward to Balance Sheet 24,360,587 8,083,071


notes on Accounts 9

The Schedules referred to above form an integral part of the Profit & Loss Account.




Chartered Accountants Vishal Agarwal Jiang xiaDirector Director

Partha MitraPartner Basudeo Prasad Modi Vikash Prasad SinghMembership Number 50553 Managing Director Company Secretary




VISA BAO Limited


VISA BAO Limited


2 RESERVES & SuRPluS Capital Reserve 17,119,659

Profit & Loss Account

Balance brought forward 8,083,071 -

Profit & Loss for the Current Year 24,360,587 32,443,658 8,083,071 8,083,071

49,563,317 8,083,071


(Rs.)

31 March 2010 31 March 2009

1 ShARE CAPiTAl Authorised92,000,000 Equity Shares of Rs. 10/- each 920,000,000 920,000,000

issued and Subscribed91,000,000 (2009: 45,500,000) Equity Shares of Rs. 10/-

each fully paid up

910,000,000 455,000,000

note:

Of the above 59,150,000 Equity Shares (including beneficial interest in 5 equity shares) are held by VISA Steel Limited, the Holding Company, a subsidiary of VISA Minmetal AG, the Ultimate Holding Company

910,000,000 455,000,000


VISA BAO Limited


VISA BAO Limited



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VISA BAO Limited


VISA BAO Limited


(Rs.)

31 March 2010 31 March 2009

4 CASh AnD BAnK BAlAnCES Cash in Hand 3,901 -

Balances with Scheduled Banks in:

Current Account 43,931,730 1,353,861

Fixed Deposit Account 485,608,260 632,560,042

529,543,891 633,913,903

5 lOAnS AnD ADVAnCES - unSECuRED, COnSiDERED gOOD Advance recoverable in cash or in kind or value to be received 393,936,922 14,008

Security Deposit 50,000 -

393,986,922 14,008

6 liABiliTiES Other Liabilities 1,011,107 24,314,295

1,011,107 24,314,295

7 PROViSiOnS Provision for Income Tax

[Net of advance payment of Income tax

Rs.18,730,326 (2009: Rs. 4,143,150)]

2,469,674 4,456,850

Fringe Benefit Tax

[Net of advance payment of FBT

Rs.28,090 (2009: Nil)]

71,910 100,000

Provision for Expenses 938,070 -

3,479,654 4,556,850



VISA BAO Limited


VISA BAO Limited


Schedulesto the Profit & Loss Account

(Rs.)

31 March 2010 31 March 2009

8 ExPEnSESSalary, Wages & Bonus 5,872,583 2,156,691

Contribution to Providend Fund & Other Funds 202,439 -

Advertisement - 12,180

Auditors Remuneration 110,000 150,000

Bank Charges 15,507 8,341

Boarding & Lodging 501,770 169,719

Pollution Controls Measure 240,000 -

Car Hire Charges 329,199 -

Repairs & Maintenance - Others 258,766 -

Consultancy Charges 1,237,700 -

Rates & Taxes 462,715 -

Filling Fees 6,410 6,600

Miscellaneous Expenses 380,192 2,258

Printing & Stationery Expenses 25,097 18,890

Professional Fees 17,651 111,824

Telephone, Telex & Fax 12,943 -

Travelling Expenses 1,613,602 809,938

Preliminary Expenses - 4,708,000

Pre-Operative Expenses - 1,000

Processing Fees - 100,000

11,286,574 8,255,441


VISA BAO Limited


VISA BAO Limited



9 nOTES On ACCOunTS 1. Statement on Significant Accounting Policies (a) Principal Accounting Policies

The financial statements have been prepared to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standards u/s 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956. A summary of important accounting policies which have been applied consistently are set out below. Financial Statements have also been prepared in accordance with relevant presentational requirements of the Companies Act, 1956 of India.



(c) Fixed Assets

(i) Fixed Assets are stated at their acquisition cost (net of CENVAT credit), where applicable together with any incidental expenses of acquisition/installation. Cost of acquisition includes borrowing costs that are directly attributable to the acquisition/construction of qualifying assets. Impairment loss, if any, ascertained as per the Accounting Standard u/s 211 (3C) of the Companies Act, 1956.

(ii) Depreciation on fixed assets is provided on Straight Line Method in accordance with Schedule XIV of the Companies Act, 1956.

(d) Transactions in Foreign Currencies

Transactions in foreign currencies are recorded in rupees by applying the exchange rate prevailing on the date of transaction. Transactions remaining unsettled are translated at the rate of exchange ruling at the end of the year. Exchange gain or loss arising on settlement/ translation is recognised in the Profit and Loss Account.

(e) Employee Benefits


(a) Provident Fund

The Company operates defined contribution schemes like Provident Fund. The Company makes regular contribution to provident funds which are fully funded and administered by Government and are independent of Company’s finance. Contributions are recognized in Profit & Loss Account on an accrual basis.

(b) Gratuity

Gratuity benefit on retirement is determined on the basis of independent actuarial valuation, at the end of each year in accordance with the method stated in AS 15 (Revised) and such liability is provided for in the accounts and charge is recognized in the Profit and Loss Account.


Leave encashment benefit on retirement is determined on the basis of independent actuarial valuation, at the end of each year in accordance with the method stated in AS 15 (Revised) and such liability is provided for in the accounts and charge is recognized in the Profit and Loss Account.

Actuarial gains and losses, where applicable, are recognised in the Profit and Loss Account.



(f ) Deferred Tax

Deferred Tax is recognised using the liability method, at the current rate of taxation, on all timing differences to the extent it is probable that a liability or asset will crystallise. Deferred Tax Assets are recognised subject to consideration of prudence and are periodically reviewed to reassess realisation thereof.

2. During the year ended 31 March 2010, the Company had issued 45,500,000 equity shares of Rs. 10/- each amounting to Rs. 455,000,000 to finance a part of the capital expenditure for setting up new manufacturing facilities of an integrated 100,000 MTPA Ferro Chrome Project at Kalinganagar Industrial Complex.


VISA BAO Limited


VISA BAO Limited



(Rs.)

31 March 2010 31 March 2009

3 Estimated amount of Contracts remaining to be executed on Capital

Account and not provided for

766,034,382 -

4 Earning Per Share

Profit After Tax (A) 24,360,587 8,083,071

Weighted average number of Rs. 10 equity share outstanding

during the year (B)

63,419,521 23,221,096

Basic and Diluted Earning per Share (A/B) 0.38 0.35

5 Expenditure in Foreign Currency - Travelling 1,382,277 173,121

6 Deferred Tax Provision has been made in the accounts in accordance

with the requirements of the Accounting Standard on “Taxes on

Income” (AS 22) issued by The Institute of Chartered Accountants of

India. The major components of the deferred tax Liabilities/(Assets)

based on the tax effects of timing differences are as follows:

Deferred Tax liablities

Depreciation 47,231 -

Deferred Tax Assets

Employee Benefit 40,570 -

6,661 -

7 Auditors’ Remuneration:

Audit Fees 100,000 100,000

Other Services 10,000 50,000

110,000 150,000

8 The Company has been incorporated for manufacturing of Ferro Chrome and does not operate in any other reportable segment.

9 There are no Micro, Small and Medium Enterprises, as required to be disclosed under the “Micro, Small and Medium

Enterprise Development Act, 2006” identified by the Company on the basis of information available with the Company.

10 Previous year’s figures have been rearranged / re-grouped wherever necessary. Comparative figures in the financial statement

pertains to uneven periods and are hence, not strictly comparable.

11 The Company maintains a provident fund with Regional Provident Fund Commissioner. Contributions are made by the

company to the funds, based on the current salaries. In the provident fund schemes, contribution are also made by the

employees. An amount of Rs. 25,644/- (2009: Rs. Nil) has been charged to the Profit & Loss Account of the above defined

contribution schemes.

The Company is in the process of taking out benefit schemes like gratuity and leave encashment. Annual actuarial valuations

are being carried out by LICI in compliance with Accounting Standard 15 (revised 2005) on Employee Benefits.

The Company also provides for leave encashment benefit to the employees. Annual actuarial valuations are carried out by

an independent actuary in compliance with Accounting Standard 15 (revised 2005) on Employee Benefits. Employees are

not required to make any contribution.


VISA BAO Limited


VISA BAO Limited


Reconciliation of opening and closing balances of the fair value of

plan assets:

Opening fair value of Plan Assets - - - -


Contributions by Employer - - - -


Closing Fair Value on Plan Assets - - - -


(Rs.)

gratuity

31 March

leave Encashment

31 March

2010 2009 2010 2009


Present value of funded obligation - - - -

Fair Value of Plan Assets - - - -

- - - -


Present value of un-funded obligation 145,930 - 122,124 -

Net (Asset)/Liability 145,930 - 122,124 -

Amount recognised in the Profit and Loss Account and charged

to Salaries, Wages & Bonus and Contribution to Provident & Other

Funds under Schedule 14 are as follows:

Current Service cost 77,417 - 22,204 -

Past service benefit 68,513 - - -

Interest cost - - - -


Net actuarial loss/(gain) recognised during the year - - 99,920 -

Total 145,930 - 122,124 -

Reconciliation of opening and closing balances of the present

value of the obligations:

Opening defined benefit obligation - - - -

Current Service cost 77,417 - 22,204 -

Past service benefit 68,513 - - -

Interest cost - - - -

Actuarial loss/(gain) - - 99,920 -


Closing Defined Benefit Obligation 145,930 - 122,124 -


VISA BAO Limited


VISA BAO Limited



(Rs.)

gratuity

31 March

leave Encashment

31 March

2010 2009 2010 2009Actual Return on Plan Assets [Plan Assets consist of funds maintained with LICI for gratuity scheme]

- - - -

Principal Actuarial Assumption used:Discount Rates 8% - 8% - Expected Return on Plan Assets - - - - Expected Salary increase rates 7% - 5% - Mortality Rates LIC (1994-96)

mortality tablesLIC (1994-96)

mortality tables

The estimates of future salary increase considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors.

The contribution expected to be made by the Company for the year ending 31 March 2011 cannot be readily ascertainable and therefore not disclosed.

Previous year’s figures have been rearranged/re-grouped wherever necessary.

12 Related Party DisclosuresName of the Related Parties: Nature of RelationshipVISA Steel Limited Holding CompanyVISA Minmetal AG Ultimate Holding CompanyBaosteel Resources Co. Ltd. Enterprise having significant influenceMr. Basudeo Prasad Modi Key Managerial Personnel

Details of Transactions with Related Parties (Rs.)

2009-10 2008-09Nature of Transaction Holding Company Enterprise having

significant influence Holding Company Enterprise having

significant influence Advance against Share Capital 295,750,000 - 232,049,980 318,408,246 Issue of share capital 295,750,000 159,250,000 232,049,980 159,250,000 Expenses incurred - - 7,377,867 - Re-imbursement of expenses - - 427,204 - Advance against facilities 393,600,000 - - - Outstanding at closingDebit 393,600,000 - - - Credit - - 6,950,663 159,158,246

For Lovelock & Lewes For and on behalf of the Board of Directors Firm Registration Number - 301056EChartered Accountants Vishal Agarwal Jiang xia

Director DirectorPartha MitraPartner Basudeo Prasad Modi Vikash Prasad SinghMembership Number 50553 Managing Director Company Secretary



VISA BAO Limited


VISA BAO Limited




1 Cash and cash equivalents consist of cash in hand and balance with banks and deposits with banks 31 March 2010 31 March 2009

Cash and cash equivalents as at 31 March 2010 comprises:

Cash & Cheques in hand 3,901 -

Balance with Scheduled Banks:

in Current Accounts 43,931,730 1,353,861

in Deposit Accounts 485,608,260 632,560,042 Cash & cash equivalents 529,543,891 633,913,903

2 The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard

on ‘Cash Flow Statements (AS-3)’ issued by the Institute of Chartered Accountants of India.

This is the Cash Flow Statement referred to in our report of even date

(Rs.)

31 March 2010 31 March 2009

A. CASh FlOw FROM OPERATing ACTiViTiES:Net profit before Tax and Extraordinary items 36,967,248 16,783,071 Adjusted for: Depreciation 85,982 - Interest Income (48,339,804) (25,038,512)Operating profit before working capital changes (11,286,574) (8,255,441)Adjustments for changes in working capital: - (Increase) in Loans and Advances (393,972,914) (14,008) - Increase/(Decrease) in Trade and Other Payables (5,153,705) 24,314,295 Cash generated from operations (410,413,193) 16,044,846 - Taxes Paid (14,615,266) - net cash from Operating activities (425,028,459) 16,044,846

B. CASh FlOw FROM inVESTing ACTiViTiES:Purchase of Fixed Assets (1,793,484) -Capital Work in Progress (19,533,949) - Interest Received 46,235,880 3,710,811 net cash used in investing activities 24,908,447 3,710,811

C. CASh FlOw FROM FinAnCing ACTiViTiES:Money Received against Issue of Shares 295,750,000 455,000,000 Advance against Share Capital - 159,158,246 net cash used in Financing activities 295,750,000 614,158,246 net increase in Cash & Cash Equivalents (104,370,012) 633,913,903 Cash and cash equivalents as at 1 April 2009 633,913,903 - Cash and cash equivalents as at 31 March 2010 529,543,891 633,913,903

For Lovelock & Lewes For and on behalf of the Board of Directors Firm Registration Number - 301056EChartered Accountants Vishal Agarwal Jiang xia

Director DirectorPartha MitraPartner Basudeo Prasad Modi Vikash Prasad SinghMembership Number 50553 Managing Director Company Secretary



VISA BAO Limited


VISA BAO Limited


Balance Sheet Abstractand Company’s General Business Profile

i. REgiSTRATiOn DETAilS Registration No. : 9 7 9 0 State Code : 1 5


ii. CAPiTAl RAiSED DuRing ThE YEAR (Amount in Rs. Thousands)


Bonus Issue : N I L Private Placement : 4 5 5 0 0 0

iii. POSiTiOn OF MOBiliSATiOn AnD DEPlOYMEnT OF FunDS (Amount in Rs. Thousands)

Total Liabilities : 9 6 4 0 6 1 Total Assets : 9 6 4 0 6 1

Sources of Funds

Paid-up Capital : 9 1 0 0 0 0 Reserves & Surplus : 4 9 5 6 3


Deferred Taxation : 7 Advance against

share capital

pending allotment

N I L


Net Fixed Assets : 2 1 2 4 1 Investments : N I L

Net Current Assets : 9 3 8 3 2 9 Misc. Expenditure : N I L


iV. PERFORMAnCE OF COMPAnY (Amount in Rs. Thousands)

Turnover * : 4 8 3 4 0 Total Expenditure : 1 1 3 7 3

Profit Before Tax : 3 6 9 6 7 Profit After Tax : 2 4 3 6 1

Earning per share in Rs. : 0 . 3 8 Dividend % : N I L


V. gEnERiC nAMES OF PRinCiPAl PRODuCTS/SERViCES OF COMPAnY (as per monetary terms)

Item Code No. : 7 2 0 2 4 1 0 0 Product Description : FERRO CHROME




Vishal Agarwal Jiang xiaDirector Director

Place: Kolkata Basudeo Prasad Modi Vikash Prasad SinghDate: 14 May 2010 Managing Director Company Secretary






Directors’ Report

To the Members,

Your Directors take the pleasure in presenting the Seventh Annual Report together with the audited Annual Accounts of the

Company for the year ended 31 March 2010.

Financial Results

(In Rupees)Year ended

2009-10

(In Rupees)Year ended

2008-09Gross Revenue - -

Interest income 2,15,970.00 2,54,891.00

Expenditure 1,10,505.46 1,32,711.73

Profit/(Loss) after Taxation 72,192.54 94,506.27

Profit/(Loss) brought forward from previous year (25,754.75) (1,20,261.02)

Balance carried forward to Balance Sheet 46,437.79 (25,754.75)

Operations

During the year, your Company earned an amount of

Rs.2,15,970.00 from term deposits made with banks, recorded

a net profit of Rs.72,192.54 and after adjusting the carried

forward losses from the previous year, has transferred an

amount of Rs.46,437.79 to the Balance Sheet.

The application of the Company for transfer of Prospecting

Licence, spread over an area of 721.207 hectares in village

Ghotaringa, Kalada, Kerjodi, Ranjagada RF etc. in Dhenkhanal

district, Orissa, from Orissa Industries Limited (ORIND) is in

advanced stages with the Government of Orissa. Your Company

is currently carrying out drilling & prospecting work in the said

area allotted to ORIND.

Dividend

As your Company is yet to commence its operations, the

Directors do not recommend any dividend for the financial

year ended 31 March 2010.

Directors

In accordance with the provisions of the Companies Act, 1956

and the Company’s Articles of Association, Mr. Manoj Kumar

Digga and Mr. Ranjan Mishra, Directors of the Company,

retire by rotation and being eligible offer themselves for

re-appointment.

Auditors

The Auditors of the Company M/s. L. B. Jha & Co., Chartered

Accountants, GF-1, Gillander House, 8, Netaji Subhas Road,

Kolkata 700 001 retire at the ensuing Annual General Meeting

and being eligible, offer themselves for re-appointment.

Directors Responsibility Statement

In terms of the provision of Section 217(2AA) of the Companies

Act, 1956, your Director state:

i. That in the preparations of the annual accounts, the

applicable accounting standards had been followed,


departures.

ii. That the Directors had selected such accounting policies



true and fair view of the state of affairs of the Company at

the end of the financial year and of the profit or loss of the

Company for that period.

iii. That the Directors had taken proper and sufficient care

for the maintenance of adequate accounting records, in

accordance with the provisions of this Act to safeguard

the assets of the Company and to prevent and detect

fraud and other irregularities.






iv. That the Directors had prepared the annual accounts on a


Conservation of energy and technology absorption

Since the Company has not commenced operations,

requirement relating to disclosure under the Companies

(Disclosure of Particulars in the Report of the Board of Directors),

Rules 1988 are not applicable to the Company.

Auditors’ Report

The comments of the Auditors’ Report read with the notes to

the accounts in schedules are self-explanatory and do not call

for further explanation.

Employees

There were no employees employed during the year and hence

need for furnishing of particulars pursuant to Section 217(2A)

does not arise.

Foreign currency

There have been no foreign exchange earnings or outflow

during the year under review.

Public deposit

The Company has not accepted any deposit from the public

during the financial year.

Acknowledgement

Your Directors wish to place on record their sincere appreciation

for the continued cooperation and support extended by

the various Government Authorities, Bankers and all other

business associates of the Company. The Directors also convey

their appreciation to the members of the Company for their

commitment and involvement during the year under review.


Vishal Agarwal

Director

Jugal Kishore Jhunjhunwala

Director

Place: Bhubaneshwar

Date: 13 May 2010






Auditors’ Reportto the Members of Ghotaringa Minerals Limited

1. We have audited the attached Balance Sheet of

GHOTARINGA MINERALS LIMITED as at 31 March 2010,

the related Profit and Loss Account and the Cash Flow

for the year ended on that date (hereinafter referred to

as “financial statement”), which have been signed under

reference to this report. These financial statements are

the responsibility of the Company’s Management. Our

responsibility is to express an opinion on these financial

statements based on our audit.

2. We have conducted our audit in accordance with

auditing standards generally accepted in India. These

Standards require that we plan and perform the audit to

obtain reasonable assurance as to whether the financial

statements are free of any material misstatements. An

audit includes examining, on a test basis, evidence

supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the

accounting principles used and significant estimates

made by the management, as well as evaluating the

overall financial statement presentation. We believe that

our audit provides a reasonable basis for our opinion.



Order, 2004, issued by the Central Government of India

in terms of Section 227(4A) of the Companies Act, 1956

of India (the ‘Act’) and on the basis of such checks as we

considered appropriate and according to the information

and explanations given to us, we set out in ANNEXURE,

a statement on matters specified in paragraph 4 and 5 of

the said order.


Paragraph 3 above, we report that:

4.1 We have obtained all the information and

explanations, which to the best of our knowledge

and belief were necessary for the purpose of our

audit;

4.2 In our opinion, proper books of accounts as required

by the law have been kept by the Company, so far as

appear from our examination of those books;

4.3 The financial statements dealt with by this report

are in agreement with the books of accounts;

4.4 In our opinion, the financial statements dealt with by

this report comply with the Accounting Standards

referred to in Section 211(3C) of the ‘Act’;

4.5 On the basis of written representations received

from the Directors, as on 31 March 2010 and taken

as record by the Board of Directors, we report

that none of the Directors are disqualified as on

31 March 2010 from being appointed as a Director in

terms of sub section 1(g) of Section 274 of the ‘Act’;

4.6 In our opinion and to the best of our information



notes thereon and attached thereto given in the

prescribed manner the information required by

the ‘Act’, and also give, respectively, a true and fair

view in conformity with the accounting principles


(a) In the case of Balance Sheet of the state of affairs of

the Company as at 31 March 2010;

(b) In the case of Profit and Loss Account, of the profit

for the year ended on that date; and

(c) In the case of Cash Flow Statement, of the Cash

Flows for the year ended on that date.

For L. B. Jha & Co.



T. Mandal








Annexure to the Auditors’ Report(Referred to in Paragraph 3 of our report of even date)

1. The Company does not have any fixed assets and has only incurred some expenses relating to procurement of fixed assets which are treated as Capital Work in Progress. Hence clauses 4(i)(a), (b) and (c) are not applicable.

2. The Company do not carry any inventories and so clauses 4(ii)(a), (b) and (c) are not applicable.

3. (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the Register maintained under Section 301 of the ‘Act’. Hence provisions of clauses 4(iii)(b),(c) and (d) are not applicable.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the Register maintained under Section 301 of the ‘Act’. Hence provisions of clauses 4(iii)(e), (f ) and (g) are not applicable.

4. The Company has not yet commenced normal commercial activity and so it has not entered into any transactions of purchases of inventory, fixed assets or of sales of goods or services. However, in our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business and there have been no major weaknesses in internal control system.

5. In our opinion and according to the information and explanations given to us, there are no such contracts or arrangements, particulars of which are needed to be entered in the register maintained under Section 301 of the ‘Act’.

6. The Company has not accepted any deposit from public within the meaning of Section 58A or Section 58AA of the Act and the rules framed there under.

7. The Company does not have any formal internal audit system and we were told that the Company has not yet commenced commercial activity and the size of operations is too small to have any formal Internal Audit system. At present, all controls and supervisions are lying with the senior executives directly.

8. The Company has not been prescribed to maintain cost records by the Central Government under Section 209 of the Companies Act, 1956.

9. (a) The Company has deposited regularly all statutory dues relating to Income tax and such other taxes as are applicable to it and there are no undisputed dues as at 31 March 2010, which is due for a period of more than 6 months from the date when it has become payable.

(b) There are no disputed statutory dues that remain unpaid on account of income tax/sales tax/service tax/customs duty/wealth tax/excise duty/cess etc as on 31 March 2010.

10. The Company does not have any accumulated loss as at 31 March 2010 and it has not incurred cash losses in the financial year ended on that date and in the immediate preceding financial year.

11. The Company has not taken any loans from any banks or financial institutions and so there is no default in repayment of dues.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion, and according to the information and explanations given to us, the Company has not given guarantee for loans taken by others from banks or financial institution during the year.


17. The Company has not raised any funds on short-term basis.

18. The Company has not made any preferential allotment of shares to any parties and companies covered in the register maintained under Section 301 of the ‘Act’.

19. The Company has not issued any debentures during the year and no debentures are outstanding at the end of the year.

20. The Company has not raised any money by public issue during the year.

21. During the course of our examination of books and records of the Company, carried in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

For L. B. Jha & Co.



T. Mandal








For L. B. JHA & CO


Firm Registration Number - 301088E For and on behalf of the Board of Directors

T. Mandal Jugal Kishore Jhunjhunwala Vishal AgarwalPartner Director Director


Manoj Kumar DiggaDirector & Company Secretary

Place: Kolkata Place: Bhubaneshwar


Balance Sheetas at 31March 2010

(Rs.)

ScheduleAs At

31 March 2010As At

31 March 2009

I SOURCES OF FUNDSShareholders’ FundShare Capital 1 10,000,000.00 10,000,000.00

Reserves & Surplus

Profit & Loss Account 46,437.79 -

TOTAL 10,046,437.79 10,000,000.00

II APPLICATION OF FUNDSFixed Assets:Capital Work In Progress 8,139,209.00 5,422,499.00

(Note B2 of Schedule 7)

Deferred Tax Assets - 7,472.00

Current Assets, Loans and AdvancesCash and Bank Balances 2 1,763,640.79 4,026,090.25

Other Current Assets 3 - 5,547.00


2,446,773.79 4,693,173.25

Less: Current Liabilities and Provisions 5 539,545.00 148,899.00

Net Current Assets 1,907,228.79 4,544,274.25

Profit and Loss Account - 25,754.75

TOTAL 10,046,437.79 10,000,000.00


The Schedules referred to above and attached thereto form an integral part of this Balance Sheet.







For L. B. JHA & CO


Firm Registration Number - 301088E For and on behalf of the Board of Directors

T. Mandal Jugal Kishore Jhunjhunwala Vishal AgarwalPartner Director Director



Place: Kolkata Place: Bhubaneshwar


Profit And Loss Accountfor the year ended 31 March 2010

(Rs.)

ScheduleFor the year ended

31 March 2010For the year ended

31 March 2009

INCOMEInterest on Term Deposits (Gross) 215,970.00 254,891.00

(TDS Rs. 21,597; P.Y. Rs. 49,330)

TOTAL 215,970.00 254,891.00

EXPENDITUREExpenses 6 110,505.46 132,711.73

TOTAL 110,505.46 132,711.73

Profit Before Taxation 105,464.54 122,179.27

Less: Taxation for the year

Current Tax 25,800.00 12,600.00

For earlier years (including Interest Rs. 6,095) - 22,545.00

Deferred Tax (7,472.00) 7,472.00

Profit After Taxation 72,192.54 94,506.27

Balance brought forward from previous year (25,754.75) (120,261.02)

Balance carried over to Balance Sheet 46,437.79 (25,754.75)

Earning Per Share: (Note 8 on Schedule 7)Basic 0.07 0.09

Diluted 0.07 0.09

Face Value of Equity Share 10.00 10.00


The Schedules referred to above and attached thereto form an integral part of this Profit and Loss Account.








(Rs.)

As At31 March 2010

As At31 March 2009

SCHEDULE: 1SHARE CAPITALAuthorised:


(P.Y. 1,000,000 Equity Shares of Rs.10 each)

Issued, Subscribed and Paid up:


(P.Y. 1,000,000 Equity Shares of Rs.10 each)

(Refer notes below)

10,000,000.00 10,000,000.00 NOTES:

(1) Of above 110,000 (P.Y. 110,000) Equity Shares of Rs. 10 each were allotted for consideration other than cash pursuant to the terms of a Joint Venture Agreement for using a Prospecting Licence.

(2) 890,000 (P.Y. 890,000) Equity Shares of Rs. 10 each are held by VISA Steel Limited (immediate holding company) and its nominees.

SCHEDULE: 2CASH AND BANK BALANCESCash in hand - - Balances with Scheduled Bank :- in Current Account 1,763,640.79 526,090.25 - in Term deposits - 3,500,000.00

1,763,640.79 4,026,090.25

SCHEDULE: 3OTHER CURRENT ASSETSInterest accured on term deposits - 5,547.00

- 5,547.00

SCHEDULE: 4LOANS AND ADVANCES(Unsecured, Considerd good)Due from a Company in which a director is a director 469,147.00 469,147.00 Advance Income Tax 213,986.00 192,389.00

683,133.00 661,536.00

SCHEDULE: 5CURRENT LIABILITIES AND PROVISIONSCurrent LiabilitiesSundry CreditorsTo Micro & Small Enterprises - - To Other Creditors 493,145.00 128,299.00 Provisions Provision for Taxation 46,400.00 20,600.00

539,545.00 148,899.00







(Rs.)

For the year ended31 March 2010

For the year ended31 March 2009

SCHEDULE: 6EXPENSESFiling Fees 2,620.00 2,864.00

Professional Fees 850.00 1,000.00

Auditor’s Remuneration (as Auditors) 15,000.00 13,788.00

Directors’ Sitting Fees 20,000.00 110,000.00

Other Expenses 11,284.46 585.73

Printing & Stationery 700.00 125.00

Travelling Expenses 60,051.00 4,349.00

110,505.46 132,711.73






A. Significant Accounting Policies

a. Basis of preparation of Financial Statements

The financial statements have been prepared and presented under the historical cost convention on the accrual basis

of accounting except as stated otherwise and comply with the accounting standards notified under Section 211(3C) of

the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956 (the ‘Act’) to the extent applicable.

b. Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires

Management to make estimates and assumptions that affect the reported amounts of income and expenses of the

period, assets and liabilities and disclosures relating to contingent liabilities as of the date of the financial statements.

Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in

future periods.

c. Revenue Recognition

The revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the

revenue can be reliably measured. Revenue from sales of goods is recognized upon passage of title to the customer,

which generally coincides with their delivery.

Dividend income is recognized when the right to receive payment is established.

Interest income is recognized using the time proportion method, based on the transactional interest rates.

d. Fixed Assets

Fixed assets are stated at original cost net of tax / duty credits availed if any, less accumulated depreciation. Cost includes

pre-operative expenses and all expenses related to acquisition and installation of the concerned assets. Financing costs

relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready to

be put to use.

The carrying amounts are reviewed at each balance sheet date when required to assess whether they are recorded in

excess of their recoverable amounts, and where carrying values exceed this estimated recoverable amount, assets are

written down to their recoverable amount.

e. Depreciation

Depreciation on fixed assets is provided on written down value method as per rates prescribed in Schedule – XIV of the

Companies Act, 1956 on pro-rata basis.

f. Impairment of Assets

An asset is treated as impaired, when carrying cost of assets exceeds its recoverable amount. An impairment loss is

charged to Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized

in prior accounting periods is reversed if there has been a change in estimate of the recoverable amount.

g. Intangible Assets

Intangible assets are recognised only when future economic benefits attributable to the assets will flow to the enterprises

and cost can be measured reliably and are amortised in equal instalments over its useful life.

h. Assets acquired under Lease

For assets acquired under operating lease, rentals payable are charged to Profit & Loss account. Assets taken on Finance

Lease are accounted for as assets of the Company. Lease rentals payable are apportioned between principal and interest

using the internal rate of return method and finance charge is recognised accordingly.


SCHEDULE: 7






i. Foreign Exchange Transaction

i. Foreign currency transactions are recorded at exchange rates prevailing on the date of such transaction.

ii. Monetary Foreign currency assets/liabilities at the end of the year are re-aligned at the exchange rate prevailing at

the year-end and the difference on re-alignment is recognised in the Profit & Loss account.

j. Provision and Contingent liabilities

The Company creates a provision when there is a present obligation as a result of a past event that probably requires an

outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent

liability is made when there is a possible obligation or a present obligation that may, but probably will not, requires an

outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of

outflow of resources is remote, no provision or disclosure is made.

k. Taxation

Current Tax

The current income tax charge is determined in accordance with the relevant tax regulations applicable to the

Company.

Deferred Tax

Deferred Tax is recognized subject to consideration of prudence, on timing difference between taxable income and

accounting income that originate in one period and are capable of reversal in one or more subsequent periods and is

measured by applying tax rates and tax laws that have been enacted or substantively enacted by Balance Sheet date.

Deferred tax assets are not recognised unless there is reasonable certainty that sufficient future income will be available

against which such deferred tax assets can be realised.

l. Earnings Per Share

In determining earnings per share, the Company considers the net profit after tax and includes the post-tax effect of any

extra-ordinary item. The number of equity shares used in computing basic earnings per share is the weighted average

number of equity shares outstanding during the period. The number of equity shares used in computing diluted

earnings per share comprises weighted average number of equity shares considered for deriving basic earnings per

share and also weighted average number of equity shares which could have been issued on the conversion of all dilutive

potential equity shares.

B. Notes On Accounts

1. The Company has not yet commenced commercial revenue earning activity. The company has applied for renewal of

the Prospecting Licenses of Ghotaringa village site which had expired on 11.07.2008 and also transfer of the Prospecting

License in the name of the company from ORIND (original license holder). Such renewal of the Prospecting Licenses and

its transfer in the name of the company is pending.

2. Capital Work In Progress amounting to Rs. 81,39,209/- (previous year Rs. 54,22,499/-) represents

- Rs. 70,39,209/- (previous year Rs. 43,22,499/-) for cost of prospecting, core drilling, logging and sampling at the

Mines area in Ghotaringa village to enable the Company to apply for transferring the Prospecting License into a

Mining Lease and

- Rs. 11,00,000/- (previous year Rs. 11,00,000/-) for cost of transfer of Prospecting License held by Orissa Industries Ltd.

in the said Ghotaringa village.

3. Advances include Rs. 4,69,147/- (previous year Rs. 4,69,147/-) amounts paid to Orissa Industries Limited (ORIND), a

company in which a director of the Company is also a director.

4. Retirement Benefits

The Company does not have any employees and hence, no provision has been made for the retirement benefits under AS 15.







6. Deferred Tax Asset/Liability

Asset:

Deferred tax liability on account of carries over business losses Nil Rs 7,472

There are no items of pending adjustments relating to timing difference between taxable income and accounting

income and so there is neither deferred tax asset nor a deferred tax liability for the year.

31 March 2010 31 March 2009

5. Earnings per share

Profit after tax (Rs.) 72,192.54 94,506.27

No. of Equity Shares of Rs. 10 each 1,000,000 1,000,000

Basic & Diluted Earnings per share (Rs.) 0.07 0.09

7. Related party disclosures (as indicated by the management from relevant documentation)

a) Where control Exists

Related party Relationship

VISA Steel Ltd. Holding Company

b) Transactions during the year Nil

8. Additional information pursuant to the provisions of paragraph 3(4C) and (4D) of Part-II of Schedule III of Companies

Act, 1956 has not been furnished since the company has not carried out on any manufacturing/trading/service

activities in the financial year.

9. The previous year’s figures have been regrouped/ re-arranged wherever necessary.








(Rs.)

Year ended

31 March 2010

Year ended

31 March 2009

CASH FLOW FROM OPERATING ACTIVITIESNet profit/(loss) before Tax and extraordinary items 105,464.54 122,179.27

Less: Adjustment for taxation for the year (25,800.00) (35,145.00)

Adjustment for deferred taxation (7,472.00) 7,472.00

Operating profit/(loss) before working capital changes

72,192.54 94,506.27


(Increase)/Decrease in Other Current Assets 5,547.00 6,428.00

(Increase)/Decrease in Loans and Advances (14,125.00) (56,802.00)

Increase/(Decrease) in Current Liabilities and Provisions 390,646.00 (1,125.00)

Net Cash Flow from Operating Activities A 454,260.54 43,007.27

CASH FLOW FROM INVESTING ACTIVITIESExpenditure on Capital Work-in- Progress (2,716,710.00) -

Net Cash Flow from Investing Activities B (2,716,710.00) -

CASH FLOW FROM FINANCING ACTIVITIESIncrease in Share Capital - -

Net Cash Flow from Financing Activities C - -

Net increase/(decrease) in cash and cash equivalents (A+B+C)

(2,262,449.46) 43,007.27

Opening Balance of cash and cash equivalents 4,026,090.25 3,983,082.98

Closing Balance of cash and cash equivalents 1,763,640.79 4,026,090.25

2,262,449.46 (43,007.27)

Notes:

(1) The above Cash Flow Statement has been compiled from and is based on the Balance Sheet as at 31 March 2010 and

the related Profit and Loss Account for the year ended on that date.

(2) The above Cash Flow Statement has been prepared under ‘Indirect Method’ as set out in Accounting Standard (AS-3) on

“Cash Flow Statement”, and reallocations required for this purpose are as made by the company.

(3) Figures in Parenthesis represents outflows.

Previous year’s figures have been regrouped, wherever necessary, to conform to current year’s presentations.

This is the Cash Flow referred to in our report of even date.For L. B. JHA & CO Chartered AccountantsFirm Registration Number - 301088E For and on behalf of the Board of Directors

T. Mandal Jugal Kishore Jhunjhunwala Vishal AgarwalPartner Director DirectorMembership No. 50070


Place: Kolkata Place: BhubaneshwarDate: 13 May 2010 Date: 13 May 2010


For and On behalf of the Board of Directors

Jugal Kishore Jhunjhunwala Vishal AgarwalDirector Director


Place: BhubaneshwarDate: 13 May 2010

I. REGISTRATION DETAILS

Registration No. : 7 3 4 8 State Code : 1 5

Balance Sheet as at : 3 1 0 3 2 0 1 0Date Month Year





Total Liabilities : 1 0 0 4 6 Total Assets : 1 0 0 4 6

Sources of Funds

Paid-up Capital : 1 0 0 0 0 Reserves & Surplus : 4 6



Net Fixed Assets : 8 1 3 9 Investments : N I L

Net Current Assets(including

deferred tax asset)

: 1 9 0 7 Misc. Expenditure : N I L



Turnover : 2 1 6 Total Expenditure : 1 1 1

+ - Profit/Loss Before tax + - Profit/Loss after tax

+ 1 0 5 + 7 2

(Please tick Appropriate box + for Profit, - for Loss)

Earning per share in Rs. 0 . 0 7 Dividend rate % : N I L

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY (as per monetary term)

Item Code No. (ITC Code) 7 2 0 1 1 1 0 0 0

Production N A

Description N A

Balance Sheet Abstractand Company’s General Business Profile

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