VISA Steel Limited Annual Report 2007-08

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New design of Pushercar has been installed toimprove the efficiency ofpushing of coking coal inthe coke ovens.CEO / CFO CERTIFICATION TO THE BOARDThe Board of Directors 28 May 2008VISA Steel LimitedKolkata 700 027B. Employed for part of the yearSl. Name Designa- Remunera- Qualifi- Experience Date of Age Last Employment,No. tion tion (Rs.) cation (years) Joining Designation,Employer1. Mr.Basudeo Director 525,945 B.Sc. 37 01-02-08 61 Managing Director,Prasad Modi Kalinganagar (Engg.) Neelachal Ispat(Mech.),Nigam LimitedP G PGDiplomain IndustrialEngg.2. Mr.Surya Bhan Executive 1,753,600.00 B.E. 39 01-06-06 60 Director (Operations)Singh ** Director - (Metall- Ispat IndustriesKalinganagar urgy) Limited.Pursuant to the provisions of Clause 49 (V) of the Listing Agreement, we, Vishal Agarwal, ManagingDirector and Manoj Kumar Digga, Chief Financial Officer hereby certify that:a. we have reviewed the financial statements and the cash flow statement for the year 2007-08and that to the best of our knowledge and belief:• these statements do not contain any materially untrue statement or omit any material fact orcontain statements that might be misleading;• these statements together present a true and fair view of the company’s affairs and are incompliance with existing accounting standards, applicable laws and regulations.b. there are, to the best of our knowledge and belief, no transactions entered into by the companyduring the year which are fraudulent, illegal or violative of the company’s code of conduct.c. we accept responsibility for establishing and maintaining internal controls for financial reportingand that we have evaluated the effectiveness of internal control systems of the companypertaining to financial reporting and there have been no deficiencies in the design or operationof such internal controls.d. we have indicated to the auditors and the Audit Committee that:i. there have been no significant changes in internal control over financial reporting during theyear;ii. there have been no significant changes in accounting policies during the year; andiii. there have been no instances of significant fraud of which we have become aware.Annual Report 2007-0839Notes:1. Remuneration includes Salary, House Rent Allowance, Commission, Company’s contributionto Provident Fund and Perquisites. Value of perquisites have been calculated on the basis ofIncome-Tax Act, 1961.2. Information about qualification and last employment are based on particulars furnished by theemployees concerned.3. None of the employees hold by himself or along with his / her spouse and dependent children,2% or more of the equity shares of the Company.4. Mr.Vishambhar Saran is the father of Mr.Vishal Agarwal, Mr.Vikas Agarwal and Mr.VivekAgarwal, and husband of Mrs. Saroj Agarwal all being Directors of the Company.5. Nature of employment in all cases is contractual in nature.* Mr. Ashok Kumar Lamba has retired w.e.f. 1 April 2008.** Mr.Surya Bhan Singh has resigned w.e.f. 15 September 2007For and on behalf of the BoardPlace: KolkataVishambhar SaranDate: 28 May 2008ChairmanVishal AgarwalManaging DirectorPersons constituting group coming within the definition of “group” as defined in the Monopolies andRestrictive Trade Practices Act, 1969 include the following:Bodies CorporateVISA Minmetal AGVISA International LimitedVISA Comtrade AGVISA Comtrade (Asia) Limited, HongkongVISA Comtrade (Asia) Limited, SingaporeVISA PLCVISA Power LimitedVISA Comtrade LimitedVISA Coal Pty LimitedVISA BAO LimitedVISA Aviation LimitedNorth East Resources LimitedVISA Infrastructure LimitedGhotaringa Minerals LimitedKhandadhar Minerals Limitedmanoj Kumar DiggaChief Financial OfficerIndividual PromotersVishambhar SaranSaroj AgarwalVishal AgarwalVikas AgarwalVivek AgarwalVishambhar Saran & Sons (HUF)
MANAGEMENTDiscussion and Analysisoverviewconsolidation along the lines of Arcelorcompany OverviewRs. MillionYour Company registered a healthyperformance during 2007-08 with a 27%growth in revenues to Rs. 6,828.1 million,103% increase in EBIDTA to Rs. 939.3million, 96% increase in PBT to Rs. 671.4million and 110% rise in PAT to Rs. 431.5million. Your Company’s performance wasdriven primarily by the Coke Oven, BlastFurnace and Ferro Chrome operations andis expected to grow in the coming years withthe commissioning of new projects includingSponge Iron, Power and Special & StainlessSteel Plant.INDUSTRY STRUCTURE ANDDEVELOPMENTSSteel Industry OverviewThe global Steel industry is experiencinga long-term growth phase with expectedCAGR of 5-6 per cent over the next 5 yearsaided by a steady world economic growthinspite of US slowdown due to rising share ofemerging economies in Global GDP. GlobalSteel production recorded a production highof 1.34 billion tonnes in 2007 out of whichChina accounted for over one-third. FurtherMittal and Tata Corus is expected which willrationalise production with growth in demand.Steel prices globally have increaseddrastically due to cost push by increase inraw material prices of Iron Ore and CokingCoal and also rise in demand, especially fromChina, India, Brazil, Russia and Middle East.Domestic Steel prices have spurted in linewith international prices because of thesteep hike in Coking Coal prices due to theAustralian flood situation and Iron Ore pricesdue to Chinese demand. Domestic Pig Iron,Sponge Iron and Steel prices will continueto be firm due to global Steel prices, thedomestic demand-supply gap and high rawmaterial prices.Coke prices have increased drastically asChina dominates the global Coke trade andChinese Government has recently increasedexport tax to 25%. The Ferro Chrome priceshave also been buoyant due to the powercrisis in South Africa affecting supplies andstrong demand from the Stainless Steelindustry in China.Your Company has embarked on anexpansion plan to realise its vision ofbecoming one of the largest, low costIntegrated Special and Stainless Steel playerby setting up a fully integrated 0.5 millionTPA Special and Stainless Steel Plant atKalinganagar Industrial Complex, Orissa.Your Company’s current saleable productsinclude Pig Iron, Coke, Ferro Chrome,Chrome Concentrates and Sponge Iron andSpecial & Stainless Steel will be added indue course. Going forward, your Companywill consume a part of its products captivelyin the manufacture of Special and StainlessSteel, once the respective plants arecommissioned.SEGMENT-WISE / PRODUCT-WISEBUSINESS REVIEWThe current business of your Companycomprises of manufacturing of Pig Iron, Coke,Ferro Chrome and Chrome Concentrates andtrading of Coal and Coke. During the yearunder review, the share of Manufacturing andTrading segment in Gross Revenue was52:48 and key financials of each segment isgiven below:Particulars Manufacturing Trading2007-08 2006-07 2007-08 2006-07Revenue 3,570.39 2,797.77 3,257.66 2,581.51SegmentResult (beforeinterestand tax)794.52 564.90 168.84 (70.88)ManufacturingThe manufacturing facilities of yourCompany are located in Kalinganagar (BlastFurnace, Coke Oven and Ferro Chrome)and Golagaon (Chrome Ore Beneficiation &Chrome Ore Grinding Plant) in Orissa.Pig IronThe Blast Furnace with a total capacity of225,000 TPA is currently producing Hot Metalwhich is poured into moulds to produce PigIron. Basic grade Pig Iron is sold to variousSteel plants in eastern India while foundrygrade Pig Iron to major customers in easternand northern India.The total hot metal production during 2007-08was 67,330 MT compared to 181,086 MTof hot metal in 2006-07, due to shutdownfor refractory lining, disruption in Iron Oresupplies and power trippages. Meanwhile,Annual Report 2007-0841
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VISA Steel Limited Annual Report 2007-08

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