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Visa Steel Ltd.

BSE: 532721 Sector: Metals & Mining
NSE: VISASTEEL ISIN Code: INE286H01012
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VOLUME 281172
52-Week high 30.20
52-Week low 14.55
P/E
Mkt Cap.(Rs cr) 255
Buy Price 0.00
Buy Qty 0.00
Sell Price 23.15
Sell Qty 244.00
OPEN 21.50
CLOSE 21.50
VOLUME 281172
52-Week high 30.20
52-Week low 14.55
P/E
Mkt Cap.(Rs cr) 255
Buy Price 0.00
Buy Qty 0.00
Sell Price 23.15
Sell Qty 244.00

Visa Steel Ltd. (VISASTEEL) - Director Report

Company director report

Dear Shareholders

Your Directors are pleased to present this Twentieth Annual Report of the Companytogether with the Audited Standalone and Consolidated Financial Statements of Accounts forthe financial year ended 31 March 2016.

(Rs. in Million)

Particulars Standalone Consolidated
2015-16 2014-15 2015-16 2014-15
Net Revenue 10111.90 9221.57 13031.34 12802.74
Other Income 272.18 288.52 131.90 148.70
Total Revenue 10384.08 9510.09 13163.24 12951.44
Profit before interest depreciation tax & exceptional item 119.80 267.98 46.84 307.59
Finance Cost 4453.71 2061.90 4754.44 2293.60
Depreciation 1226.86 574.09 1431.89 767.30
Profit / (Loss) before Exceptional & Extraordinary (5560.77) (2368.01) (6139.49) (2753.31)
Items and Taxation
Exceptional & Extraordinary Items - - - (212.95)
Profit /(Loss) before Tax (5560.77) (2368.01) (6139.49) (2966.26)
Tax Expenses 274.70 46.39 274.79 60.18
Profit / (Loss) after Tax (5835.47) (2414.40) (6414.28) (3026.44)
Minority Interest - - (259.00) (297.34)
(Loss) / Profit for the period (5835.47) (2414.40) (6155.28) (2729.10)

OPERATIONS

The Company is pursuing Special Steel Business Ferro Alloy Business and Coke Business.The Special Steel Business includes production of Hot Metal/Pig Iron DRI/Sponge Iron andSpecial Steel Bars & Wire Rods. Whereas the Ferro Alloy Business includes productionof High Carbon Ferro Chrome and generation of Power for captive use and the Coke Businessincludes production of Coke and Steam.

The consolidated total revenue of the Company stood at Rs. 13163.24 Million for thefinancial year 2015-16. The consolidated profit before interest depreciation tax andexceptional item is Rs. 46.84 Million in the financial year 2015-16.

The Blast Furnace having installed capacity of 225000 TPA produced 121521 MT HotMetal as compared to 42931 MT in the previous year. The DRI Plant having installedcapacity of 300000 TPA produced 224934 MT Sponge Iron as compared to 184149 MT in theprevious year.

The Ferro Alloy Plant with a total current operating capacity of 120000 TPA includingthe Furnaces taken on lease from VISA BAO Limited a subsidiary Company produced 85836MT of Ferro Alloys in the financial year 2015-16 compared to 62719 MT in 2014-15. Thegeneration of electricity from Company's Captive Power Plant having installed capacity of657 Million units per annum was 406 Million units in financial year 2015-16 as comparedto 367 Million units in the previous year.

The Company has 51% stake in VISA SunCoke Limited (VSCL) which is operating thebusiness of manufacturing and sale of Metallurgical Coke and associated Steam GenerationUnits. VSCL's production of Coke was 294258 MT during the year compared to 295734 MT inthe previous year.

During the year under review the Company's performance was adversely impacted due tovarious external factors beyond management control including failure of the commitmentmade by the State Government through MoU to grant captive Iron Ore Mining Lease deprivingthe Company from long term source of Iron Ore at cost de-allocation of Coal Block byMinistry of Coal & Hon'ble Supreme Court's order dated 24 September 2014 deprivingthe Company from long term source of Coal at cost non availability of Iron Ore and ChromeOre at viable prices due to closure of Mines due to Shah Commission Investigation since2011 & Supreme Court judgment on 16 May 2014 non-availability of working capital forPlant operations sharp drop in Steel prices due to Chinese overcapacity dumping of Steelfrom China and Russian Rouble depreciation FTA's with Japan & Korea wherein Steel wasbeing imported at import duty of below 2.5% and high interest costs logistics costsinfrastructure bottlenecks etc.

The Iron Ore & Chrome Ore availability has improved from end 2015 onwardssubsequent to the implementation of the MMDR

(Amendment) Act and restarting of various closed mines. With the improvement in rawmaterial availability and holding on operations the operations of the Company hasimproved significantly from Q4 FY'2016 onwards. However a period of uncertainty in supplyof Iron Ore & Chrome Ore is likely after 31st March 2020 since many non-captive mineswill expire. The Government also implemented Minimum Import Price (MIP) dated 5th February2016 to check imports of Steel at predatory pricing and imposed anti-dumping duties. TheGovernment is also preparing a Policy for revival of the Steel Sector including financialrestructuring.

Due to the continued stress across the Steel Sector the Company has not been able toservice its debt and the account of the Company has become Non-Performing Asset (NPA) withits Lenders. As per RBI if the loan is already an NPA there is no limit to the kind ofrestructuring that is possible. The Company has been in discussions with Lenders to inductinvestor and restructure the loan to a sustainable level. The Company's plan to transferits Special Steel business to VISA Special Steel Limited a subsidiary of the Company tofacilitate fund raising through strategic investor / financial investors has been delayeddue to objection raised by HUDCO. The Company plans to complete the amalgamation of VISABao Limited with the Company consequent to which Baosteel will hold 5% stake in theCompany. The Company is in discussions with potential investors to infuse funds in theCompany as working capital to improve operations and Lenders to restructure the loan to asustainable level.

FUTURE OUTLOOK

As per the Ministry of Steel Government of India the current per capita consumptionof finished steel in the Country is only around 60 kg which is far lower than the worldaverage of 220 kg (China at 500 kg). It is estimated that India would need 300 million TPAof Steel by 2030 and therefore there is a huge growth potential in Steel consumption inIndia. However any significant improvement in demand for Iron and Steel products may takea little longer and show up once investments in infrastructure and construction industriesstart picking up.

The Company has set up economically viable productive assets and is committed to itsvision to emerge as an efficient producer of high quality value added products includingSpecial Steel Long products Ferro Chrome and Coke. Having set up state of the art valueaddition facilities the Company is now focused on increasing capacity utilization of allUnits improving efficiency cutting overhead costs and reducing raw material costs bysecuring captive Iron Ore and Chrome Ore mines in order to improve margins.

Going forward the Company expects that revenues and margins from Special Steel FerroAlloy & Metallurgical Coke businesses shall drive your Company forward.

DIVIDEND

In view of the losses incurred by the Company your Directors have not recommended anydividend for the financial year ended 31 March 2016.

TRANSFER TO RESERVES

In view of losses incurred by the Company during the year no amount has beentransferred to the General Reserve for the financial year ended 31 March 2016.

CHANGE IN NATURE OF BUSINESS

During the year under review there has been no change in the nature of business of theCompany.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the year under review your Company transferred Rs. 359635 to the InvestorEducation and Protection Fund pertaining to Unpaid Dividend for the Financial Year2007-08.

SHARE CAPITAL

The Company's paid up equity share capital remained at Rs. 1100000000 (Rupees OneHundred Ten Crores only) comprising of 110000000 equity shares of Rs. 10 each. There wasno change in the Company's share capital during the year under review.

TRANSFER OF SPECIAL STEEL BUSINESS

The Board of Directors of the Company had approved a Scheme of Arrangement underSections 391 to 394 of the Companies Act 1956 between the Company and VISA Special SteelLimited (VSSL) a subsidiary of the Company and their respective shareholders andcreditors which inter alia envisages transfer of Special Steel Business (comprising ofBlast Furnace DRI Plant Steel Melt Shop and Rolling Mill) of the Company with all itsassets and liabilities into VSSL. The Appointed Date of the Scheme is 1 April 2013 orsuch other date as may be fixed or approved by the Hon'ble High Court of Judicature ofOrissa at Cuttack. The Scheme has been approved by the members of the Company at the CourtConvened Meeting (CCM) held on 10 June 2014. Subsequent to the approval of the members apetition was filed before the Hon'ble High Court of Orissa on 25 June 2014. Lender'sapproval was received on 31 December 2014. The matter is being heard in High Court ofOrissa and decision is awaited.

AMALGAMATION OF VISA BAO LIMITED

The Board of Directors of the Company had approved a Scheme of Amalgamation underSection 391 to 394 of the Companies Act 1956 between the Company and VISA BAO Limited asubsidiary of the Company and their respective shareholders. The appointed date of theScheme is 1 April 2015 or such other date as may be fixed or approved by the Hon'ble

High Court of Judicature of Orissa at Cuttack. The scheme is subject to necessaryapproval from regulatory authorities. Post amalgamation Baosteel Resources Co. Ltd.China will hold 5% stake in the Company.

AMALGAMATION OF KALINGANAGAR SPECIAL STEEL PRIVATE LIMITED

The Board of Directors of the Company had approved a Scheme of Amalgamation underSection 391 to 394 of the Companies Act 1956 between the Company and KalinganagarSpecial Steel Private Limited a subsidiary of the Company and their respectiveshareholders and creditors. The appointed date of the Scheme is 31 March 2014 or suchother date as may be fixed or approved by the Hon'ble High Court of Judicature of Orissaat Cuttack.

HOLDING SUBSIDIARY COMPANIES

During the year under review VISA Infrastructure Limited ceased to be the HoldingCompany of your Company w.e.f. 22 April 2015. The Company has seven subsidiaries includingindirect subsidiaries namely VISA BAO Limited VISA SunCoke Limited Ghotaringa MineralsLimited Kalinganagar Special Steel Private Limited Kalinganagar Chrome Private LimitedVISA Ferro Chrome Limited and VISA Special Steel Limited:

(i) VISA BAO Limited (VBL) is a Joint Venture between the Company and BaosteelResources Co. Ltd. (Baosteel) China. VBL is setting up a Ferro Chrome Plant with 4Submerged Arc Furnaces at Kalinganagar in Odisha of which 2 furnaces were commissioned inthe month of June 2013. The remaining two furnaces are expected to be completed one eachbefore 31 March 2017 and during 2017-18 respectively. The Company holds 65 percent stakein VBL and Baosteel one of the leading Steel companies in the world holds the balance 35percent stake.

(ii) VISA SunCoke Limited (VSCL) is a Joint Venture with Sun Coke Europe Holding B.V.(SunCoke) in which the Company holds 51 percent stake and SunCoke holds remaining 49percent stake. The joint venture comprises of 400000 MTPA Heat Recovery Coke Plant andassociated Steam Generation Units at Kalinganagar in Odisha. The joint venture providesgreat opportunity for VSCL to leverage its operating and technological expertise to servecustomers across India with the highest quality coke.

(iii) Ghotaringa Minerals Limited (GML) is a Joint Venture between the Company andOrissa Industries Limited (ORIND).

(iv) Kalinganagar Special Steel Private Limited a wholly owned subsidiary wasincorporated on 27 May 2013.

(v) Kalinganagar Chrome Private Limited a wholly owned subsidiary was incorporated on1 July 2013.

(vii) VISA Ferro Chrome Limited (VFCL) a step down subsidiary was incorporated on 26July 2013. VFCL is a wholly owned subsidiary of Kalinganagar Special Steel PrivateLimited.

(vi) VISA Special Steel Limited incorporated on 27 July 2012 is a wholly ownedsubsidiary of VISA Ferro Chrome Limited.

The consolidated financial statements presented by the Company include financialinformation of its subsidiaries prepared in compliance with the applicable AccountingStandards. A statement containing the salient features of the financial statement of theCompany's subsidiaries in the prescribed form AOC-1 pursuant to first proviso to Section129(3) of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 isannexed separately to the financial statements.

The Annual Accounts of the subsidiary companies will be made available to theshareholders of the aforesaid subsidiaries and the Company as and when they demand andwill also be kept for inspection by any investor at the registered office of the Companyand these subsidiaries. The Financial statements of the Company and its subsidiaries arealso available on the website of the Company.

The highlights of performance of subsidiaries as on 31 March 2016 and theircontribution to the overall performance of the Company during the period under review istabulated below:

(Rs. In Million)

Name of the Subsidiary Total Revenue Profit / (Loss) After Tax Profit / Loss considered in consolidation Networth attributable
VISA Suncoke Ltd 4095.18 (417.98) (213.17) 525.35
VISA BAO Ltd 160.08 (175.41) (114.02) 447.98
Kalinganagar Special Steel Private Limited - (0.15) (0.15) (0.24)
Kalinganagar Chrome Private Limited - (0.01) (0.01) 0.53
Ghotaringa Minerals Limited 0.07 0.00 0.00 8.91

EXTENSION OF DATE FOR HOLDING ANNUAL GENERAL MEETING OF THE COMPANY

In accordance with provisions of Section 96 read with Section 129 of the Companies Act2013 the Annual General Meeting (AGM) of the Company for the financial year ended 31March 2016 was due to be held on or before 30 September 2016. The Company approached theRegistrar of Companies Orissa to extend time by three months for holding the AnnualGeneral Meeting so that necessary effect could be given to the Scheme of Arrangementbetween the Company and VISA Special Steel Limited on its sanction by the Hon'ble HighCourt of Judicature of Orissa at Cuttack and to complete the preparation of financialstatements of the Company after giving effect to the Scheme. Necessary approval to holdthe Annual General Meeting for the financial year 2015-16 up to 31 December 2016 wasgranted by the Registrar of Companies Orissa.

BOARD MEETINGS

The Board met 6 times during the year the details of which are given in the CorporateGovernance Report that forms part of the Annual Report. The intervening gap between themeetings was within the period prescribed under the Companies Act 2013 and the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 ("Listing Regulation").

Further the Independent Directors at their meeting reviewed the performance of theBoard Chairman of the Board and of Non Independent Directors as required under the Actand the Listing Regulations.

The Independent Directors at their meeting also assessed the quality quantity andtimelines of flow of information between the Company Management and the Board of Directorsof the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors

In accordance with the provisions of Section 152 of the Companies Act 2013 and interms with the Articles of Association of the Company Mr. Manoj Kumar Digga Whole timeDirector designated as Director (Finance) & Chief Financial Officer (DIN: 01090626)retires by rotation at the forthcoming Annual General Meeting and being eligible offershimself for re-appointment. The Board recommends for his re-appointment.

Mr. Shiv Dayal Kapoor (DIN: 00043634) Mr. Debi Prasad Bagchi (DIN: 00061648) Mr.Pratip Chaudhuri (DIN 00915201) Ms. Gauri Rasgotra (DIN: 06862334) and Mr. Kishore KumarMehrotra (DIN 02894045) have given declarations confirming that they meet with thecriteria of independence as prescribed both under sub-section (6) of Section 149 of theCompanies Act 2013 and under Regulation 17 of the SEBI (Listing Obligation and DisclosureRequirements) Regulation 2015.

Mr. Manas Kumar Nag (DIN 02058292) was appointed as Nominee Director (Nominee of StateBank of India) w.e.f. 14 August 2015.

Mr. Manoj Kumar Digga (DIN 01090626) continues as the Whole time Director designated asDirector (Finance) & Chief Financial Officer of the Company for a period of 3 (three)years w.e.f. 14 August 2015. The appointment and remuneration payable to him was approvedby the Shareholders of the Company at its last Annual General Meeting held on 28 December2015.

Mr. Manoj Kumar (DIN 06823891) continues to be the Whole time Director designated asDirector (Kalinganagar) of the Company for a period of 3 (three) years w.e.f. 15 September2015. The appointment and remuneration payable to him was approved by the Shareholders ofthe Company at its last Annual General Meeting held on 28 December 2015.

Subsequent to the year end Ms. Gauri Rasgotra (DIN:

06862334) had resigned as the Independent Woman Director w.e.f 27 July 2016 and Ms.Puja Sondhi (DIN: 06592082) was appointed as an Additional Independent Woman Directorw.e.f 24 October 2016 to hold office up to the ensuing Annual General Meeting. Mr. ShivDayal Kapoor (DIN: 00043634) resigned as an Independent Director w.e.f 4 November 2016 dueto health reasons.

Mr. Vishambar Saran (DIN: 00121501) whose term of 3 Years as Whole-time Directordesignated as the Chairman ends on 15 December 2016 being eligible has offered himselffor reappointment. The appointment and remuneration payable to him require the approval ofMembers of the Company at the ensuing Annual General Meeting of the Company.

Mr. Vishal Agarwal (DIN: 00121539) whose term of 3 Years as Vice Chairman &Managing Director ends on 24 June 2017 being eligible has offered himself forreappointment. The appointment and remuneration payable to him require the approval ofMembers of the Company at the ensuing Annual General Meeting of the Company.

Mr. Manoj Kumar Digga (DIN: 01090626) continues as the Whole-time Director designatedas Director (Finance) & Chief Financial officer and Mr. Manoj Kumar (DIN: 06823891)continues as the Whole-time Director designated as Director (Kalingangar) on the Board ofthe Company.

Brief resume of the above Directors nature of their expertise in their specificfunctional areas details of directorships in other companies and the chairmanship /membership of committees of the Board as stipulated under Regulation 17 of the ListingRegulation and Secretarial Standard - 2 are given in the Notice for the ensuing AnnualGeneral Meeting.

Key Managerial Personnel

During the year Mr. Keshav Sadani was appointed as the Company Secretary andCompliance Officer of the Company w.e.f. 23 May 2015. Subsequent to the year end Mr.Keshav Sadani resigned as the Company Secretary and Compliance Officer of the Companyw.e.f 25 June 2016.

Consequent to the resignation of Mr. Sadani the Board appointed Mr. Sudhir KumarBanthiya as the Company Secretary and Compliance Officer of the Company w.e.f 13 September2016.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theNomination and Remuneration Committee evaluated the performance of all the Directors onparameters such as level of engagement independence of judgement contribution to thestrategic planning process safeguarding the interest of the stakeholders etc. and incontext of the role played by them as a member of the Board at its meetings in assistingthe Board in realising its role of strategic supervision of the functioning of theCompany.

The Board after taking into consideration the evaluation exercise carried out by theNomination and Remuneration Committee and by the Independent Directors carried out anannual performance evaluation of its own performance the individual Directors as well asthe Board Committees in due compliance with the provisions of the Companies Act 2013 andthe Listing Regulations. The performance evaluation of the Independent Directors wascarried by the entire Board and the performance evaluation of the Chairman andNon-Independent Directors was carried out by the Independent Directors.

The Directors expressed their satisfaction over the evaluation process and resultsthereof.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of the provisions of Section 134(5)) of the Companies Act 2013 yourDirectors to the best of their knowledge and ability confirm:

(a) that in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;

(b) that the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company as at 31 March 2016 andof the loss of the company for that period;

(c) that the director had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;

(d) that the annual accounts had been prepared on a going concern basis;

(e) that the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) that proper systems have been devised to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

AUDIT COMMITTEE

The Audit Committee comprises of 3 (three) Non-Executive Independent Directors. As ondate Mr. Kishore Kumar Mehrotra is the Chairman of the Audit Committee. The members of theCommittee possess adequate knowledge of Accounts Audit and Finance among others. Thecomposition of the Audit Committee meets the requirements as per Section 177 of theCompanies Act 2013 and is detailed in the Corporate Governance Report forming part ofthis Annual Report.

All recommendations made by the Audit Committee during the financial year 2015-16 wereaccepted by the Board of Directors of the Company.

CEO / CFO CERTIFICATION

As required under SEBI (Listing Obligation and Disclosure Requirements) Regulations2015 Mr. Vishal Agarwal Vice Chairman & Managing Director and Mr. Manoj Kumar DiggaWholetime Director designated as Director (Finance) & Chief Financial Officer of theCompany have certified to the Board regarding the Financial Statements for the year ended31 March 2016 which is annexed to this Report

Auditors

Statutory Auditors and Auditors Report

The members of the Company had at the 18th Annual General Meeting of the members ofthe Company held on 24 December 2014 approved the appointment of M/s. Lovelock &Lewes Chartered Accountants as Statutory Auditors of the Company to hold office from theconclusion of that Annual General Meeting till the conclusion of 21st Annual GeneralMeeting subject to ratification by members at every Annual General Meeting.

Accordingly the existing appointment of M/s. Lovelock & Lewes CharteredAccountants as Statutory Auditors of the Company is placed for ratification byshareholders at the ensuing annual general meeting.

In compliance with Section 139 and other applicable provisions of the Companies Act2013 the Company has obtained a written consent from the Auditors and also a certificateto the effect that their appointment if ratified would be in accordance with theconditions prescribed under the Act.

The para-wise management response to the qualifications / observations made in theIndependent Auditors Report is stated as under:

1. Attention is drawn to para 9 of the Independent Auditors Report regarding Matter ofEmphasis. The clarification of the same is provided in Note No. 44 of the Accounts of theStandalone Accounts. Subsequent to the erosion of net worth your Company is evaluatingthe applicability of various statutory guidelines/provisions including referring thematter to the Competent Authority.

2. Attention is drawn to para 10 of the Independent Auditors Report regarding Matter ofEmphasis. The clarification of the same is provided in Note No. 14 of the Accounts of theStandalone Accounts.

3. As regards para (iii) (b) and (c) of the Annexure to the Independent Auditors Report your Directors report that Ghotaringa Minerals Limited a subsidiary of the Companycould not pay the interest of Rs. 2.74 million as at Balance Sheet date. The Board ofDirectors of the Company had extended the tenure of repayment up to May 2018.

4. The Auditors observation in para viii of the Annexure to the Auditors reportregarding dues to financial institution and banks aggregating Rs. 9867.55 million asmentioned in Note 5D were due to severe liquidity crisis being faced by the Company onaccount of continued cash losses incurred.

Internal Auditors

In terms of the provisions of Section 138 of the Act M/s. L B Jha & Company anIndependent Chartered Accountants were appointed as Internal Auditors of the Company forthe financial year 2015-16. The Audit Committee in consultation with the Internal Auditorsformulates the scope functioning periodicity and methodology for conducting the InternalAudit. The Audit Committee interalia reviews the Internal Audit Report.

Secretarial Auditors

Pursuant to Section 204 of the Companies Act 2013 and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhad appointed CS Manoj Kumar Banthia of M/s. M K B & Associates Practicing CompanySecretaries as its Secretarial Auditor to undertake the Secretarial Audit for thefinancial year 2015-16. The report of the Secretarial Auditor in specified form MR-3 isannexed herewith as Annexure I and forms part of this report. The Resolutions in respectof Related Party Transactions for Shareholder's Approval form part of the Notice of theensuing Annual General Meeting.

The Board has re-appointed CS Manoj Kumar Banthia of M/s. M K B & AssociatesPracticing Company Secretaries as Secretarial Auditors of the Company for the financialyear 20 16-17.

Cost Auditors

As per Section 148 of the Companies Act 2013 the Board of Directors has appointedM/s. DGM & Associates (Registration

No.00038) Cost Accountants Kolkata as Cost Auditors of the Company to carry out thecost audit of the products (Pig Iron & Pig Scrap Ferro Chrome and Sponge Iron)manufactured by the Company for the financial year ending 31 March 2017.

The Cost Audit Report for the year 2015-16 has been filed under XBRL mode within thedue date of filing.

RISK MANAGEMENT

The speed and degree of changes in the global economy and the increasingly complexinterplay of factors influencing the business makes Risk Management an inevitable exerciseand to cater to the same your Company has identified major focus areas for riskmanagement to ensure organisational objectives are achieved and has a robust policy alongwith well-defined and dynamic structure and proactive approach to assess monitor andmitigate risks associated with the business.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS

There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of your Company and its future operations.

INTERNAL CONTROL SYSTEM

Your Company has adequate system of internal control procedures commensurate with itssize and the nature of business. The internal control systems of the Company are monitoredand evaluated by the Internal Auditors and their audit reports are periodically reviewedby the Audit Committee of the Board of Directors of the Company.

Your Company manages and monitors the various risks and uncertainties that can haveadverse impact on the Company's business. Your Company is giving major thrust indeveloping and strengthening its internal audit so that risk threat can be mitigated.

RELATED PARTY TRANSACTIONS

All related party transactions entered into during FY 2015-16 were on arm's lengthbasis and also in the ordinary course of business. No related party transactions were madeby the Company with Promoters Directors Key Managerial Personnel or other designatedpersons during FY 2015-16 except those reported.

All Related Party Transactions were placed before the Audit Committee for approval.Prior omnibus approval of the Audit Committee was obtained on a yearly basis for thetransactions which were of foreseen and repetitive in nature. The transactions enteredinto pursuant to the omnibus approval so granted were audited and a statement givingdetails of all related party transactions was placed before the Audit Committee for itsapproval on a quarterly basis. The policy on Related Party Transactions as approved by theBoard is uploaded on the Company's website at www.visasteel.com.

Information on transaction with related parties is given in Form AOC-2 Annexure II andthe same forms part of this report.

None of the Directors or KMP has any pecuniary relationships or transactions vis--visthe Company during FY 2015-16.

PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 in respect of Conservation of Energy and TechnologyAbsorption and Foreign Exchange Earnings and Outgo is given in Annexure III forming partof this Report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the financial Statements.

HUMAN RESOURCES

The Company places significant emphasis on recruitment training & development ofhuman resources which assumes utmost significance in achievement of corporate objectives.The Company integrates employee growth with organizational growth in a seamless mannerthrough empowerment and by offering a challenging workplace aimed towards realisation oforganisational goals. To this effect your Company has a training center at its Plant forknowledge-sharing and imparting need based training to its employees. The Company also hasin place a Performance Management System in SAP for performance appraisal of theemployees. To ensure accommodation hospitality and other facilities for its employeesthe Company has set up a modern guest house at Kalinganagar.

PARTICULARS OF EMPLOYEES AND OTHER ADDITIONAL INFORMATION

The information required under Section 197(12) of the Companies Act 2013 read withRule 5(2) & 5(3) of the Companies (Particulars of Employees) Rules 1975 as amendedand the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (theRules) are set out in Annexure IVA to this Report. However as per the provisions ofSection 136 of the Companies Act 2013 the Annual Report excluding the aforesaidinformation 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.

The disclosure pertaining to remuneration of Directors Key Managerial Personnel andemployees as required under Section 197(12) of the Act read with Rule 5(1) of the Rulesare provided in Annexure IVB to this report.

EMPLOYEES STOCK OPTION

The Company has a ESOP Scheme in place titled Employee Stock Option Scheme 2010 (ESOPScheme 2010) for permanent employees including any Director whether whole-time orotherwise of the Company its subsidiaries and the Holding Company to be administered bythe Nomination and Remuneration Committee of the Board of Directors of the Company. ESOPScheme 2010 provides an incentive to attract retain and reward the employees and enablethem to participate in future growth and financial success of the Company. Each optionconfers a right upon the employee to apply for one equity share of the Company..

The particulars with regard to ESOP scheme as on 31 March 2016 as required to bedisclosed pursuant to the provisions of Rule 12(9) of the Companies (Share Capital &Debentures) Rules 2014 are set out in Annexure V to this Report.

A Certificate from the Statutory Auditors with regard to the implementation of ESOPScheme 2010 would be placed at the forthcoming Annual General Meeting.

DEPOSITS

The Company has not accepted or renewed any deposits during the year under review.

CONSOLIDATED FINANCIAL STATEMENT

In terms of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015Consolidated Financial Statement conforming to Accounting Standard 21 issued by theInstitute of Chartered Accountants of India is attached as a part of the Annual Report.

CORPORATE GOVERNANCE

The Company is committed in maintaining the highest standards of Corporate Governanceand adheres to the stipulations prescribed under Clause 17-23 of the SEBI (ListingObligation and Disclosure Requirements) Regulations 2015. A Report on Corporate Governance& Shareholder Information together with the Auditors' Certificate thereon is annexedas part of the Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS

A detailed analysis of the Industry and Company Outlook Company's operations projectreview risk management strategic initiatives and financial review & analysis asstipulated under SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 ispresented under a separate section titled "Management Discussion and Analysis"forming part of the Annual Report.

EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 as perprovisions of Companies Act 2013 and rules thereto is annexed to this report as AnnexureVI.

VIGIL MECHANISM (WHISTLE BLOWER POLICY)

The Company has a Vigil Mechanism / Whistle Blower Policy to deal with instances offraud and mismanagement if any. The policy provides for adequate safeguards againstvictimization of employees and / or Directors and also provides for direct access to theChairman of the Audit Committee. The Policy is uploaded on the website of the Company atwww.visasteel.com..

CORPORATE SOCIAL RESPONSIBILITY POLICY

The Corporate Social Responsibility (CSR) policy recommended by the Corporate SocialResponsibility Committee had been approved by the Board of Directors. The CSR policy isavailable on the website of the Company www.visasteel.com and is also attached to thisreport as Annexure VII.

During the year the CSR initiatives undertaken by the Company although not mandatoryunder Section 135 of the Act read with Companies (Corporate Social Responsibility Policy)Rules 2014 are detailed in the Annual Report.

NOMINATION AND REMUNERATION POLICY

In terms of the requirement of Section 178 of the Companies Act 2013 on therecommendation of the Nomination and Remuneration Committee the Board has approved theRemuneration policy of the Company. The Remuneration policy is attached to the Board'sReport as Annexure VIII.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder. The Companyhas not received any complaint of sexual harassment during the financial year 2015-16.

ACKNOWLEDGEMENT

Your Directors record their sincere appreciation for the assistance support andguidance provided by banks financial institutions customers suppliers regulatory &government authorities project & other business associates and stakeholders. TheDirectors also commend the continuing commitment and dedication of the employees at alllevels which has been critical for the Company's growth. The Directors look forward totheir continued support in future.

Your Directors value your involvement as shareholders and look forward to yourcontinuing support.

For and on behalf of the Board
Vishal Agarwal
Vice Chairman & Managing Director
Kolkata Manoj Kumar Digga
18 November 2016 Wholetime Director designated as Director
(Finance) & Chief Financial Officer