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Notes to Accounts of Visa Steel Ltd.

Mar 31, 2015

A. Debt Restructuring

The Company was referred to the Corporate Debt Restructuring Forum (CDR), a non statutory voluntary mechanism set up under the aegis of the Reserve Bank of India, for the restructuring of its corporate debt during the year 2012-13 w.e.f 1 March 2012 and pursuant to which the CDR package was approved vide the letter of approval of CDR cell dated 27 September 2012 and a Master Restructuring Agreement (MRA) dated 19 December 2012 was executed to give effect to the CDR package. The CDR Package includes reliefs/measures such as reduction of interest rates, funding of interest, rearrangement of securities etc.

During the current year Company's Business Re-organization Plan (Refer Note 34) was referred to CDR cell by the lenders and same has been approved by CDR cell vide its letter dated 31 December 2014 and pursuant to this approval Common Loan Agreement (CLA) has been executed on 28 March 2015 among the Company, its Subsidiary company, VISA Special Steel Limited, and lenders. CLA would operate in continuation of above mentioned MRA. In terms of CLA, inter-alia, additional credit facilities have been granted and effective 28 March 2015 Company's existing Debt portfolio has been reorganized/ reallocated and secured as under:

i) Term Loans (I &II), Corporate Term Loans (I &II) and Fresh Term Loan (for sinter plant)]

ii) Working Capital Term Loans (WCTL)

iii) Funded Interest Term Loans (FITL)

iv) Working Capital Loans [Indicated in Note 9]

v) Structured Mezzanine Credit Facet [SMCF (Sub debt)]

B. Details of Securities

i. Term Loans (I & II), SMCF (Sub debts), Working Capital Term Loans(WCTL), Funded Interest Term Loans (FITL), Corporate Term Loans (I & II) , Fresh Term Loan (For Sinter Plant) and Working Capital facilities:

(a) First pari-passu charge by way of hypothecation of all the Company's current assets and fixed assets (excluding land) including movable and immovable plant and machinery, machinery spares, tools and accessories, vehicles and other moveable assets both present and future ("Hypothecated Assets") of the Company, save and except specific assets charged to Banks, Financial Institutions and Non Banking Financial Companies (NBFC).

(b) First pari-passu mortgage and charge on the immovable properties of the Company situated at Kalinganagar Industrial Complex, Jajpur, Odisha, Golagaon, Jajpur, Odisha, Raigarh, Chhattisgarh and office premises of the Company at Bhubaneshwar, Odisha.

(c) Pledge of 51% of Promoter's Shareholding and further Pledge up to 51% of total equity of the Company needs to be executed by 31 March 2016.

(d) Pledge of Equity Shares equivalent to 51% of the present shareholding in Ghotaringa Minerals Limited held by the Company and entire Equity Shares held by the Company in VISA Urban Infra Limited.

(e) Hypothecation on profits of the Company, both present and future.

(f) Lien on all Bank Accounts including the Trust and Retention Account.

(g) The Lenders of SMCF are having a second pari-passu charge on the hypothecated assets and a second charge on the mortgaged assets of the Company.

(h) SIDBI (exposure of Rs. 76.40 Million as on 1 March 2012 for bill discounting facility relating to working capital finance) has a second charge on fixed assets.

Further, the above facilities are also covered by the following:

Irrevocable, unconditional personal guarantee of Mr. Vishambhar Saran, Chairman and Mr. Vishal Agarwal, Vice Chairman and Managing Director of the Company.

Irrevocable, unconditional Corporate Guarantee of VISA Infrastructure Ltd. with negative Lien on VISA House situated at 8/10 Alipore Road, Kolkata 700027, till the Company brings in additional equity of Rs. 1,250.00 Million over and above of Rs. 3,250.00 Million in the Company as envisaged in the CDR package.

Irrevocable, unconditional Corporate Guarantee of VISA International Limited and Ghotaringa Minerals Limited

ii. Equipment and Vehicle Term Loans

These loans are secured by way of hypothecation of vehicles / machinery acquired under the respective loan arrangements.

iii. Term Loans from Other Parties

(a) Term Loan from IL&FS Financial Services

These loans are secured by way of second pari-passu charge on entire pooled assets of the Company save and except assets charged in favor of Banks/FI/NBFC and 50 acres of land on which VISA BAO Limited is setting up a Ferro Chrome Plant. This loan is also covered by a Corporate Guarantee of VISA International Limited.

(b) Term Loan from HUDCO - These loans are secured by way of pari-passu first charge on all the fixed assets, both present and future, of the Company's plant including township being financed by HUDCO at Kalinganagar Industrial Complex in Odisha and pari-passu second charge on the current assets of the Company within the Integrated Steel Complex including township being financed by HUDCO.

C. Terms of Repayment of loans

i. Terms of Repayment and outstanding balance as at the year end of Term Loans including SMCF (TL):

Upon implementation of CDR Package during the Financial Year 2012-13, then existing Restructured Term Loan of Rs. 12,355.48 Million and Additional Term Loan of Rs. 6,100.00 Million sanctioned as per CDR package, were to be repaid over a period of 10 years in quarterly installments commencing from March 2013. Further such loans carry interest @ 10.75% p.a. for the first 4 years, @ 11.5% for 5th and 6th year and @ 12%, linked to the base rate, for subsequent years of restructuring. Above mentioned loan amounting to Rs. 17,286.71 Million outstanding as on balance sheet date are to be repaid as per the repayment schedule given below.

v. Terms of Repayment and outstanding balances of Funded Interest Term Loans (FITL):

In terms of the CDR Package, the aggregate amount of interest accrued and due on the principal amounts of TL, WCTL and Additional Term Loan for the period 1 March 2012 to 28 Feb 2014 had been converted into Funded Interest Term Loans (FITL) which were repayable in quarterly instilments commencing from September 2014 and ending in December 2021. During the Financial Year 2012-13, Company had prepaid instilments due till the second month of second quarter of FY 2016-17. FITL carry interest @ 10.00% p.a. throughout the tenure of facility. Loan outstanding as on balance sheet date are to be repaid as per the repayment schedule given below.

(a) Short term borrowing from Small Industries Development Bank of India (SIDBI) is the amount outstanding as on Balance Sheet date against the limit of Rs. 76.40 Million (31 March 2014 : Rs. 76.40 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. Also refer Note 5.B (i) for details of security.

1. D REVISION IN USEFUL LIVES OF TANGIBLE ASSETS

Effective 1 April 2014 the Company has charged depreciation in keeping with the requirements of Schedule II to the Companies Act, 2013(the 'Act') and as a result of which the estimated useful lives of certain tangible assets have been revised. Pursuant to the transitional provision set out in the said Schedule II, the carrying amount (after retaining the residual values) aggregating Rs. 45.49 Million (31 March 2014: Rs. Nil ) relating to tangible assets, where the revised useful lives are nil as on 1 April 2014, has been debited to General Reserve [Refer Note 4]. Further, related tax impact on such adjustment amounting to Rs. 14.06 Million (31 March 2014: Rs. Nil) has been credited to General Reserve.

Consequent to the above, the total depreciation charge for the year ended 31 March 2015 is lower by Rs. 119.61 Million compared to corresponding previous year with corresponding impact on the loss before tax of the Company.

a) Necessary application had been made to Central Government for payment of remuneration in excess of the prescribed limits under the Companies Act, 1956 to Mr. Vishambhar Saran, Whole Time Director of the Company for a period of 3 years w.e.f. 15 December 2013 to 14 December 2016 (including payment of minimum remuneration, in case of loss or inadequacy of profits during the aforesaid period), as approved by the Members of the Company at the Annual General Meeting of the Company held on 16 December 2013. The said application has been turned down during the year and thereafter representation to the concerned authority against the said rejection has been made and the necessary approval is pending. Further, an application for waiver of recovery of remuneration paid in excess of the prescribed limits under the Companies Act, 1956, for the period 1 April 2012 to 14 December 2013 has also been filed and the same is also pending. Pending approvals of the Central Government, Rs. 40.05 Million is being held in trust by Mr. Vishambhar Saran on behalf of the Company.

b) Necessary application had been filed with the Central Government for payment of remuneration to Mr. Vishal Agarwal, Vice Chairman & Managing Director of the Company for the period of 3 (three) years w.e.f. 25 June 2014 till 24 June 2017 (including payment of minimum remuneration, in case of loss or inadequacy of profits during the aforesaid period), as approved by the Members of the Company at the Annual General Meeting of the Company held on 24 December 2014. Further, an application for waiver of recovery of remuneration paid in excess of the prescribed limits under the Companies Act, 1956, for the period 1 April 2012 to 24 June 2014 has also been filed. Pending approvals of the Central Government, Rs. 36.58 Million is being held in trust by Mr. Vishal Agarwal on behalf of the Company.

c) Necessary application had been filed with the Central Government for waiver of recovery of remuneration paid in excess of the prescribed limits under the Companies Act, 1956, to Mr. Pankaj Gautam, erstwhile Joint Managing Director & CEO of the Company (Mr. Gautam has ceased to be Joint Managing Director and CEO and Director of the Company w.e.f. 28 February 2014) for the period 1 April 2013 to 28 February 2014. During the Financial year company has received approval from Central Government for Rs. 2.90 Million relating to Period 12/12/2013 to 31/03/2014.Pending approval of the Central Government, Rs. 8.91 Million is being held in trust by Mr. Gautam on behalf of the Company.

d) During the financial Year 2014-15, Company has provided managerial remuneration as per limit prescribed in Schedule V to Companies Act ,2013. Remuneration beyond such limit will be paid/provided after receiving Central Government approval for payment of remuneration in excess of Limits.

2. CONTINGENT LIABILITIES

(a) Claim against the Company not acknowledged as debt :

(i) In respect of a charter party dispute between VISA Comrade (Asia) Limited (the "Charterer") and Transfixed 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 the matter is sub juiced. The Hon'ble Calcutta High Court passed interim orders 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 (31 March 2014: 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 (31 March 2014: 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.

(d) In respect of the contingent liabilities mentioned in Note 22 (a) and (b) above, pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any. In respect of matters mentioned in Note 22 (c) above, the cash outflows, if any, could generally occur during the validity period of the respective guarantees. The Company does not expect any reimbursements in respect of the above contingent liabilities.

(b) Other Commitments

(i) The Company has imported capital goods under the Export Promotion Capital Goods Scheme of the Government of India, at a concessional rate of customs duty on an undertaking to fulfill quantified export obligation 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. Related export obligation to be met at the year end is Rs. 167.21 Million (31 March 2014 : Rs. 164.90 Million). The Company is confident that the above export obligation will be met during the specified period.

(ii) For non-disposal undertaking given by the Company with regard to its investments in VISA Bao Limited Refer Note 14 (a).

Other Disclosures as per Accounting Standard-15 (Revised-2005) on "Employee Benefits

(i) Post Employment Defined Contribution Plan

The Company contributes to the Provident Fund (PF) maintained by the Regional Provident Fund Commissioner. Under the PF scheme contributions are made by both the Company and its eligible employees to the Fund, based on the current salaries. An amount of Rs. 8.08 Million (31 March 2014 : Rs. 9.45 Million) has been charged to the Statement of Profit and Loss towards Company's contribution to the aforesaid PF scheme. Apart from making monthly contribution to the scheme, the Company has no other obligation.

(ii) Post Employment Defined Benefit Plan-Gratuity (Funded)

The Company provides for Gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Funds managed by the Life Insurance Corporation of India (LICI) make payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's eligible salary for specified number of days, as per provision of Gratuity Act depending upon the tenure of service subject to a maximum limit of Rs. 1.00 Million. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note 2.10, based on which, the Company makes contributions to the Gratuity Fund.

The following Table sets forth the particulars in respect of the aforesaid Gratuity fund of the Company.

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 2016 cannot be readily ascertainable and therefore not disclosed.

The amount of finance cost capitalized for qualifying assets during the year 31 March 2015 is Rs. 2,044.14 Million (31 March 2014 : Rs. 1,970.23 Million)

3. EXCEPTIONAL ITEMS

In view of high volatility in the value of Indian Rupee against USD and other foreign currency, the loss arising out of the re-instatement of foreign currency monetary items had been considered as exceptional item in the previous year.

4. BUSINESS RE-ORGANISATION/RE-STRUCTURING PLAN

(a) The Board of Directors of the Company at its meeting held on 12 August 2013 had approved the transfer of its Special Steel Undertaking on a going concern basis to its wholly owned subsidiary VISA Special Steel Limited by way of Scheme of Arrangement (the Scheme) with effect from 1 April, 2013 pursuant to provisions of Section 391 to 394 and other applicable provisions of the Companies Act, 1956 and intimated the same to the respective stock exchanges. The Scheme is subject to the sanctions/approval of Jurisdictional High Court, lenders and other concerned authorities as may be applicable. Pending such sanction/approval, the Special Steel Undertaking has not been considered as a discontinuing operation and no effect has been given to the Scheme in these Financial Statements.

(b) The Board of Directors of the Company at its meeting held on 1 October 2013, accorded their in-principle approval to the merger of VISA BAO Limited (Subsidiary Company) with the Company, subject to the approvals as may be necessary from stakeholders, lenders and other relevant authorities.

5. 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, 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.

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 valued using Black & Schools 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.

6. SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH 2015 A Primary Segment Reporting (by Business Segment) Identification of the Business Segment The Company has identified primary business segments namely "Special Steel" and "Ferro Chrome" in accordance with the Accounting Standard on Segment Reporting (AS-17) prescribed under the Act and has disclosed segment information accordingly.

Details of products included in each of the above Segments are given below:

Special Steel Bar and Wire Rods , Billets and Blooms , Pig Iron and Sponge Iron and other Allied Products Ferro Chrome Ferro Chrome and Captive Power

- Excluding Shareholder's Funds

B Secondary Segment Reporting (By Geographical Segment) The Company has its customer in India as well as outside India and thus segment information based on Geographical Location of its customer is as follows :

7. The Company has incurred a net loss of Rs. 2414.40 Million (31 March 2014 : Rs. 1524.95 Million) during the year ended 31 March 2015 and the year-end current liabilities exceeded current assets by Rs. 10521.43 Million (31 March 2014 : Rs. 7,657.22 Million), and defaulted in its debt servicing obligations as mentioned in Note-5D and has negative net worth at the year end. The Company's financial performance has been adversely affected mainly due to non-availability of raw materials, increasing material costs and high interest cost.

With the substantial improvement in the availability of major raw material and reducing raw material cost and signs of recovery in the general economic scenario, the Company expects a positive turnaround with substantial increase in its top line and reasonable increase in its bottom line.

The Company's Debt had been restructured under the package approved by Corporate Debt Restructuring (CDR) cell in the earlier years to overcome inter alia the impact of losses due to high interest costs and to improve cash flows. Under the CDR package, short term borrowings have been converted into long term borrowings with extended repayment schedule and reduced the interest rates. The Company has approached its lenders to sanction fresh line of credit, which is under active considerations by the lenders.

The increased availability of the raw material together with expected increase in demand for the Company's products, the Company has planned full-fledged operations of its various units. The same would enable the Company to embark on a sustainable growth path for years to come. Accordingly, with the improvement in the operations, it is expected that the overall financial health of the Company would improve.

Considering the above developments and favorable impact thereof on the financials of the Company and its operation, the Company has prepared these financial statements on the basis of going concern assumption.

8. 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, Chhattisgarh.

9. OPERATING LEASES

The Company has lease agreement for various premises which are in the nature of operating lease. The tenure of Lease arrangement ranges 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.

During previous year Company has entered into an agreement with VISA BAO Limited (VBL), for taking on lease a part of Production Facility of VBL located at Kalinganagar, Odisha. The said lease arrangement which is in the nature of cancellable operating lease, had been initially entered for a period of 9 months from 1 July, 2013 which has been further extended up to 30 September 2015.

10. (B) Disclosure pursuant to Sub-Section (4) of Section 186 of the Companies Act, 2013 regarding loans given, investment made and guarantees given are mentioned in the respective Notes of Non Current Investments [Refer Note 14], Long-term Loans & Advances [Refer Note 15] and Guarantees [ Refer Note 22(c)].

11. (A) RELATED PARTY DISCLOSURES PURSUANT TO ACCOUNTING STANDARD 18

Related Parties Name of the Related Parties

(i) Where Control Exist Holding Company VISA Infrastructure Limited

Subsidiaries Ghotaringa Minerals Limited

VISA BAO Limited

VISA SunCoke Limited

Kalinganagar Special Steel Private Limited

Kalinganagar Chrome Private Limited

VISA Ferro Chrome Limited VISA Special Steel Limited

(ii) Others

Joint Venture Company VISA Urban Infra Limited Enterprise having significant influence VISA International Limited

Fellow Subsidiaries VISA Resources India Limited

VISA Energy Ventures Limited

VISA Power Limited

Key Managerial Personnel Mr. Vishambhar Saran (Chairman)

Mr. Vishal Agarwal (Vice Chairman & Managing Director)

Mr. Punkaj Kumar Bajaj - Joint Managing Director & CEO (Steel Business) Relatives of Key Managerial Personnel Mrs. Bhawna Agarwal (Wife of Mr. Vishal Agarwal) w.e.f. 01 January 2015

Enterprise over which Relatives of Key VISA Resources PTE Limited Managerial Personnel having VISA Bulk Shipping PTE Limited significant influence VISA Trading (Shanghai) Co. Limited


Mar 31, 2013

1. GENERAL INFORMATION VISA Steel Limited

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. VSL is a Public Limited Company with its shares listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). During the year, the Company has transferred its coke business on going concern basis as per detailed Note 34.

2 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 the matter is subjudice. The Hon''ble Calcutta High Court passed interim orders 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 (31 March 2012: 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.

(d) In respect of the contingent liabilities mentioned in Note 22 (a) and (b) above, pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any. In respect of matters mentioned in Note 22 (c) above, the cash outflows, if any, could generally occur during the validity period of the respective guarantees. The Company does not expect any reimbursements in respect of the above contingent liabilities.

3 EXCEPTIONAL ITEMS

In view of high volatility in the value of Indian Rupee against USD and other foreign currencies, the Company has incurred loss arising out of the re-instatement of foreign currency monetary items. Total such forex loss amounting to Rs.142.66 Million [31 March 2012 : (Rs.33.06 Million)] for continuing operation and forex loss amounting to Rs. 254.71 Million (31 March 2012 : Rs. 650.33 Million) for discontinuing operations (Refer Note 34) has been considered as an exceptional item.

Further pursuant to the Share Purchase and Subscription Agreement executed between the Company, VISA SunCoke Limited, Kalinganagar Metcoke Private Limited (KMPL), a wholly owned subsidiary and SunCoke Europe Holding BV (SunCoke B.V) on 20 November 2012, the Company has sold the investment in VISA SunCoke Limited, a subsidiary, to SunCoke B.V. Profit on such sale of Investment amounting to Rs.1,762.70 Million (31 March 2012 : Nil) has been considered as an exceptional item.

4 DISCONTINUING OPERATIONS

On 18 October 2012, the Board of Directors of the Company had approved the plan to sale the Company''s business of manufacturing and sale of metallurgical coke and the associated steam generated unit (the Coke Business) located at Kalinganagar Industrial Complex, Odisha by way of slump sale on a going concern basis to VISA SunCoke Limited (formerly VISA Coke Limited) and intimated the same to the Stock Exchanges. After obtaining necessary approvals, pursuant to the Business Transfer Agreement (BTA) dated 20 November 2012 between the Company and VISA SunCoke Limited (VSCL), the Company has transferred its Coke Business by way of a slump sale on a going concern basis with effect from 18 March 2013 for a lumpsum consideration of Rs.1,800.00 Million. Accordingly, the approved Coke Business has been considered as a discontinuing operations.

5 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, 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.

6 The Company has incurred a net loss of Rs.910.39 Million (31 March 2012 : Rs.1,185.54 Million) during the year ended 31 March 2013 and the year end current liabilities exceeded current assets by Rs.4,479.74 Million (31 March 2012 : Rs.15,111.77 Million). The Company''s financial Performance has been adversely affected mainly due to non availability of raw materials, increasing material costs, high finance cost and volatile foreign exchange.

During the year, the Company had been referred to Corporate Debt Restructuring (CDR) cell for restructuring of its debts to overcome inter alia the impact of losses due to high interest costs and to improve cash flows. The CDR Cell vide letter dated 27 September 2012 has approved a package whereby major part of short term borrowings have been converted into long term borrowings with extended repayment schedule and reduced the interest rates and fresh line of credit has also been sanctioned. The Company has also infused funds amounting to Rs.3,425.00 Million by way of sale of investment and sale of coke business. Further, with the resumption of supplies of iron ore from OMC and other sources, the Company has taken steps to operate its Blast Furnance, Steel Melting Shop and Bar & Wire Rod Mill during 2013-14.

Considering the above developments and favourable impact thereof on the financials of the Company and its operation, the Company has prepared these financial statements on the basis of going concern assumption.

7 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.

8 AMALGAMATION OF SUBSIDIARY COMPANY

(a) Pursuant to a Scheme of Amalgamation filed under Section 391 to 394 of the Companies Act, 1956 by Kalinganagar Metcoke Private Limited (KMPL), a wholly owned subsidiary of the Company ("the Scheme”) which has been duly sanctioned by the Hon''ble High Court of Judicature at Orissa ("the High Court”), vide its Order dated 6 September 2013, the whole of the undertaking of KMPL including its all assets, investments, properties and liabilities have been transferred to and vested in the Company, as a going concern, with effect from 31 March 2013 ("the Appointed Date”). Certified copies of the said Order of the High Court sanctioning the Scheme have been filed with the Registrar of Companies, Orissa on 23 September 2013 (the "Effective Date”). Accordingly the Scheme became effective on 23 September 2013. KMPL was incorporated with the objective of manufacturing and dealing in coal, coke and related products.

The amalgamation has been accounted for under the "Purchase Method” as prescribed by Accounting Standard 14 (AS-14) on "Accounting for Amalgamation” notified under the Companies (Accounting Standards) Rules, 2006. In accordance with the Scheme, the assets and liabilities of KMPL have been taken over and recorded at their fair values as determined by the Board of Directors of the Company and the net difference amounting Rs.3,761.16 Million [Refer Note 4] between the fair value of such assets and liabilities transferred to the Company after adjusting the Company''s investment in the Equity Share Capital of KMPL as appearing in the books of the Company and all inter company balances have been credited to General Reserve. Further KMPL being a wholly owned subsidiary of the Company no shares of the Company has been issued and allotted in lieu of exchange of company''s holding in the KMPL, which stood cancelled.

Had the Scheme not prescribed the above accounting treatment, the amount transferred to General Reserve (arising pursuant to the Scheme as aforementioned) would have been credited to Capital Reserve in keeping with the requirement of AS-14.

(b) After giving effect to the Scheme, the year end General Reserve [Refer Note 4] represents free reserve not held for any specific purpose, other than to the extent of Rs. 3,761.16 Million (31 March 2012 : Nil) which has arisen on amalgamation as indicated in (a) above.

(c) The Scheme as referred in (a) above, was pending sanction of the High Court as on 29 May 2013, the date on which Company''s financial statements were approved by the Board of Directors and audited by the Statutory Auditors. However, consequent upon the Scheme having become effective and the vesting of whole of the undertaking of KMPL in the Company with effect from the Appointed Date, as indicated in (a) above, these financial statements have now been revised to give effect to the Scheme.

9 PREVIOUS YEAR FIGURES

The previous year figures are reclassified where considered necessary to conform to this year''s classification.


Mar 31, 2012

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).

(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.

(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.

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.

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.

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 date is 7 years and 3 months.

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 date is 7 years and 3 months.

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.

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.

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.

Pursuant 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" the Company has exercised the option and accordingly the exchange difference for the year ended 31 March 2012 pertaining to long term foreign currency monetary items to the extent of Rs.145.62 million has been added to the cost of depreciable capital asset. The same will be amortised from the year the relevant capital asset is capitalised over the balance useful life of such assets. Consequent to change in such accounting policy as aforesaid, the period end aggregate carrying amount of Capital Work-in-Progress is higher by Rs.145.62 million with a corresponding favorable impact on the loss for the year ended on 31 March 2012.

2.1 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.

(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.

(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.

2.2 (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.

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.

* 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.

2.3 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.

2.4 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.

2.5 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.

2.6 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.

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:

2.7 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:

2.8 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.


Mar 31, 2011

1 (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 Honble 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 Honble 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 Honble 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 Companys 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.

(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.

2 (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 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.

3 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.

4 During the year the Joint Venture Company Patrapada Coal Mining Co. Private Limited is dissolved with effect from 05 October 2010.

5 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.

Joint Venture VISA Urban Infra Limited

Country of Incorporation India

% of Ownership Interest as at 31 March 2011 26.00%

The Companys interests in the joint venture is reported as Long Term Investment in Schedule 5 and stated at cost. However, the Companys 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:

6 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.

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.

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.

7 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.

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.

8 As the Companys 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.

9 Previous years figures have been rearranged/re-grouped wherever necessary.

 
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