strategic thinking. integrated execution. · e-mail: [email protected] website : board of...

Monnet Ispat & Energy Limited

A N N U A L R E P O R T 2 0 1 1 - 1 2

STRATEGIC THINKING.INTEGrAtED EXECUTION.

Monnet DAV Public School, Raipur

Monnet DAV Public School, Raigarh

01 Corporate Information

02 Strategic Thinking. Integrated Execution.

04 Chairman & Managing Director’s Message

06 Roadmap of Expansion

10 Driving Strategic Value Accretion

12 Power Generation

14 Mineral Beneficiation Business

16 Integrated Competitive Strengths

18 Monnet Foundation

20 Monnet Sports Foundation

22 Monnet Go for Gold

24 Management Team

25 Directors’ Report

32 Management Discussion & Analysis

34 Report on Corporate Governance

46 Standalone Financials

76 Consolidated Financials

corporateInformation

REGISTERED OFFICE

Monnet Marg, Mandir Hasaud,

Raipur - 492 101, Chhattisgarh, India

CORPORATE OFFICE

Monnet House, 11, Masjid Moth,

Greater Kailash Part-II,

New Delhi - 110 048, India

Ph.: +91-11-2921 8542-46,

Fax: +91-11-2921 8541

E-mail: [email protected]

Website : www.monnetgroup.com

BOARD OF DIRECTORSChairman & Managing Director

Sandeep Jajodia

Executive Directors

C.P. Baid - Dy. Managing DirectorN.C. Jha - Whole-time Director

Non Executive Independent Directors

G.C. MrigAmit DixitAjay RelanVikram Deswal

Other Non Executive Directors

Gopal TiwariJ.P. Lath BOARD COMMITTEESAudit Committee

G.C. Mrig - ChairmanAjay Relan - MemberJ.P. Lath - MemberM.P. Kharbanda - Secretary

Shareholders’/ Investors’

Grievance Committee

J.P. LathGopal TiwariC.P. Baid

L & T Infrastructure Finance Company LimitedLife Insurance Corporation of IndiaOriental Bank of CommercePunjab National BankState Bank of Bikaner & JaipurState Bank of HyderabadState Bank of IndiaState Bank of PatialaThe Jammu & Kashmir Bank LimitedUCO BankUnited Bank of India

COMPANY SECRETARYM.P. Kharbanda

AUDITORSO.P. Bagla & CompanyChartered Accountants, New Delhi

Remuneration Committee G.C. Mrig Gopal Tiwari J.P. Lath

Finance Committee

Sandeep Jajodia C.P. Baid J.P. Lath

Executive Committee Sandeep Jajodia C.P. Baid J.P. Lath

Share Transfer Committee J.P. Lath C.P. Baid M.P. Kharbanda

BANKERSAxis Bank LimitedBank of BarodaBank of IndiaCentral Bank of IndiaDena BankICICI Bank LimitedIndian BankIndian Overeas BankStandard Chartered Bank

INVESTOR SERVICES CENTRE

Monnet House, 11, Masjid Moth,

Greater Kailash Part-II, New Delhi - 110 048

Ph.: +91-11-2921 8542-46,

Fax: +91-11-2921 8541


WORKS

Unit–I - Mandir Hasaud,

Raipur - 492 101, Chhattisgarh, India

Ph.: +91-771-2471 334-339

Fax: +91-771-2471 250


Unit–II - Village & Post - Naharpali,

Tehsil - Kharsia, Raigarh - 496 661,

Chhattisgarh, India

Ph.: +91-7762-275 451 & 52

Fax: +91-7762-275 455


1

The journey of Monnet Ispat & Energy Limited (MIEL) has been one of continuous and holistic growth, steered by the power of strategic thinking and execution prowess.

2

From unparalleled growth in its stature

across its business roadmap, to unique

contribution in partnering with the

nation’s infrastructure growth, the

Company has unwaveringly focused

on integrated execution of its strategic

blueprint. Driven by the strength of its

experience and expertise, this strategic

focus has enabled the Company to earn

greater trust and admiration among all

stakeholders, year-after-year.

Progressively unveiling a bigger

commitment to leverage the burgeoning

vistas of opportunities, it has consistently

evolved into an industry leader engaged

in ensuring long-term national growth

through integrated operations and

execution, coupled with expanded

capacities.

Growing from strength-to-strength, and

crossing bigger frontiers of progress,

inspired by a vision to build a harmonious

ecosystem for communities and the

society at large, it has emerged as a rising

entity with stronger focus on becoming a

better player on its business landscape.

ENVISIONING TO

BUILD A HARMONIOUS

ECOSYSTEM FOR

COMMUNITIES AND

THE SOCIETY AT LARGE

3

Dear Shareholders,

An organization’s success is measured as much by its ability to

think strategically as by its power of integrated execution. We,

at Monnet, have made this ability our growth mantra and have

imbibed this strength in our business fabric to chart our success

story over the years. The year gone by saw your Company

translate this mantra into new scales of success, continuing

to post positive performance even in a contrarian industry

environment.

The success of its focused, strategic and execution competence

was visible in the financial performance of your Company, which

crossed `2,000 Crore mark - a growth of 22% year-on-year. With

an increase of 15.32%, operating profits stood at `537.85 Crore.

What makes these numbers impressive is the fact that despite

an increase in the raw material costs, represented by coal for

power division and drop in the realization in power tariff for

a few months during the year, your Company reported an

increase in its operating profits.

On the operational front, your Company is steadfast on its

ongoing expansion schedules and is backed by its strength of

strategic thinking and integrated execution. These initiatives

are well on track to enhance your Company’s industry edge and

its competitive strengths.

As we continue to surge forward on the path to progress, these

measures will further enhance your Company’s leadership

positioning in the industry. The full expansion of the 1.5 MTPA

integrated steel project at Raigarh in Chhattisgarh, which

continued to progress well during the year, will boost the

Company’s revenue contribution from value-added products

and position it even better to cater to the growing demands

of the infrastructure and construction sector. This sector shall

continue to remain a key focus area for us, with the unfolding

opportunities in the segment offering immense potential for

growth.

We are certain that, going ahead, our clear direction of ensuring

integrated operations - from raw materials to finished product

- will hold the key to successful and consistent delivery of our

long-term objectives.

Chairman &Managing Director’s Message

4

Cognizant of the need for diversification, and well positioned

on the strength of its expertise and experience to take on new

business challenges, your Company is building its capabilities

in power generation through its subsidiary Monnet Power

Company Limited (MPCL) as an Independent Power Producer

by setting up a 1,050 MW power plant in Angul, Orissa. I am

happy to state that the implementation of the power plant

continued to progress well during the year.

Thinking and executing beyond business

As you are aware, we share a strong relationship with Indian

sports and sportspersons, which we took to a new high

during the year with our ‘Monnet Go for Gold’ initiative. This

was a nation-wide movement to encourage Indian athletes

and unite Indian fans to support them ahead of London

Olympics 2012. The unprecedented response evoked by the

campaign across India was really heart-touching and we feel

proud to have done our bit to boost the Indian Olympic spirit

ahead of the Games.

Our support to the Indian Boxing Team also manifested the

strength of our association with sports, while our CSR initiatives

in the field of education and health continued to positively

impact hundreds of lives in the communities around which we

operate.

Thinking forward

Going forward, I am confident that the strategic focus that

has enabled our progressive journey so far shall continue to

empower us even further to build upon our strengths to seize

the opportunities of tomorrow. Given the government focus

on infrastructure development, we perceive immense growth

potential in this space. We also find great opportunities to boost

our business in the Power vertical, considering the prevailing

demand-supply gap in this segment.

The future beckons us to new vistas of success and we are

well placed to tap the emerging prospects to our advantage

with our continued focus on integrated execution across our

synergistic business interests.

On a concluding note, I would like to take this opportunity

to thank all investors, bankers, stakeholders and employees

for their continued faith and support to the Company, which

is firmly entrenched on the path to continued growth and

expansion. With your cooperation, we look forward to charting

new scales of progress as we move forward.

Sincerely,

Sandeep Jajodia

THE SUCCESS OF OUR

FOCUSED, STRATEGIC

AND EXECUTION

COMPETENCE WAS

VISIBLE IN THE FINANCIAL

PERFORMANCE OF YOUR

COMPANY

5

Our roadmap of expansionDuring the year, the expansion of the 1.5 MTPA integrated steel

project at Raigarh in Chhattisgarh continued to progress well. The

expansion includes the building of an 80 MW power plant which

has already been commissioned, blast furnace, pellet plant and

coke oven plant.

The full expansion will help raise the share of value-added products

such as structural steel, longs (TMT Rebars) and flats (Plate Mill

Plates - PMPs) in the total revenue and enable the Company to cater

to the rapidly growing infrastructure and construction sector even

more effectively in the future.

WE ARE STEADFAST ON

ONGOING EXPANSION

SCHEDULES BACKED

BY OUR STRENGTH OF

STRATEGIC THINKING

AND INTEGRATED

EXECUTION

6

Integrated Steel Plant, Raigarh

7

1 (Clearances awaited Rajnand Gaon, Chhattisgarh)2 (CPP – Captive Power Plant)

The forward integration journey

Raipur, ChhattisgarhExpansion underway at Raigarh

STEEL

Upcoming project at Angul, Orissa

POWERSPONGE IRON + CPP2

Raipur, Chhattisgarh

Raigarh, Chhattisgarh

MININGMINING

Coal (Raigarh, Chhattisgarh)

Iron ore1Coal (Mandakani, Orissa)

8

From building upstream competencies to capturing the downstream profit margin, its strategic expansion is enabling

Monnet Ispat & Energy Limited to climb up the value chain from a formidable position of strength as the country’s

second largest coal-based sponge iron producer into a well-integrated steel Company.

Raipur Plant

9

The Company is committed to its vision of emerging as a dominant industry

player while safe guarding the enormous competitive edge it enjoys. Setting up

its first sponge iron unit with a capacity of 1 Lac MTPA, MIEL has grown by leaps

and bounds over the past 18 years to emerge as the second-largest coal-based

sponge iron producer in the country. The Company’s Milupara coal block is the

country’s single-largest underground coal mine to have production of 1 MTPA.

Further, with the Group’s iron ore and limestone blocks, MEIL is equipped to

control costs at every stage.

Adding to the integrated advantage, the Company has also been selected to

work as a Mining Development Operator (MDO) partner for the Morga III coal

block and has also been awarded the Guma Pusari and Gaitra limestone blocks.

By virtue of being a captive coal producer, MIEL enjoys the advantages of

being a stable, efficient and cost-competitive sponge iron manufacturer as

compared to non-integrated players.

Driving Strategic Value Accretion

Coal

Kiln

Iron Ore10

Reducing raw material dependency through use of technology

Normally, expansion of manufacturing capacity results in

proportionate increase in consumption of its raw material.

However, the technology adopted for building the 1.5 MTPA

integrated steel plant would considerably reduce its dependency

on raw materials like coking coal and iron ore lumps and would

use raw material from captive and domestic resources, resulting

in emergence amongst the most competitive and cost effective

steel making facilities in the country.

Raw material risk arrangement in terms of pricing volatility is

also mitigated through captive availability of coal, power, ferro

alloys and iron ore.

The steel facility is also designed to utilize all waste heat and

gasses generated in the process, thereby making it a truly

energy efficient steel complex.

Further, setting up of iron ore palletisation plant, along with

the sinter plant as a part of the complex, would enable MIEL

to gainfully use cheap and abundantly available iron ore fines.

Conventionally, the primary integrated steel plants in India were

based on blast furnace route requiring expensive imported

coking coal, coal resulting in increased costs. To address this

concern, MIEL’S technology, involving a mix of sponge iron and

hot metal from blast furnace, would not only reduce costs but

also enable the Company to produce high value added steel

through electric arc furnace.

Integrated execution for greater power generation

MIEL’s repertoire also includes two captive power plants (150

MW) which fire the current manufacturing facilities. To build a

strong integrated steel plant, the power production capacity in

the upcoming 1.5 MTPA steel plant has been further enhanced

by 80 MW. In addition to this 230 MW CPP capacity, the

Company also has a 12 MW power plant under its 97% owned

subsidiary, Rameshwaram Steel & Power Private Limited, which

currently sells power in the open market.

The completion of the capacity addition will pave the way for

value-added growth in the steel sector, while enabling better

realizations and providing a cushion against the raw material

price volatility faced by non-integrated players.

Sponge Iron

Melted Steel

Finished steelMolten metal

Semis (Steel)

11

Garnering A bigger share in power generation

WE ARE ALSO SETTING UP

ADDITIONAL SUPER CRITICAL

660 MW POWER PLANT AT

THE SAME SITE OF 1050 MW

THERMAL POWER PLANT AND

ARE FULLY EQUIPPED IN TERMS

OF THE LAND REQUIREMENT

AND FUEL FOR THE SAME

12

The cornerstone of MIEL’s growth strategy is to expand

into new business lines while most effectively harnessing

the existing capabilities and knowledge base. This is in

line with the Group’s commitment to empower India’s

vision to build robust core infrastructure.

MIEL has taken a rapid stride forward, from producing

power for captive consumption; to becoming an

Independent Power Producer (IPP) through its subsidiary

Monnet Power Company Limited (MPCL) by setting up

a thermal power plant of IPP of 1050 MW backed with

pit head captive coal mine in Angul, Orissa. This project

is envisaged to be amongst the lowest cost generation

units in the world.

Additional 660 MW expansion

The Company is also proposing to set up additional

super critical 660 MW power plant at the same site and

is fully equipped in terms of the land requirement and

fuel for the same. During the year, the Company received

the terms of reference relating to the environmental

clearance for the additional capacity from Ministry of

Environment and Forest.

Vital backward linkage

The Company had received a part of Mandakini coal

block for meeting its fuel requirements for the power

plant. The approval process for the mine is also underway.

The mine is located in close proximity of less than 20 kms

from the plant site in Talcher Orissa. This provides the

Company a logistic edge as the mined coal can easily be

transported to the facilities thereby enhancing logistic

efficiencies.

Strengthening management capabilities

During the year, the Company appointed senior industry

professional Mr. N.C. Jha as Chief Executive Officer to

spearhead its Mining Business Operations. Mr. Jha, a

senior industry professional with nearly four decades

of experience, has held Board positions at BCCL, CMPDI,

SECL, CIL and ICVL (A JV Company of 5 Central Govt. PSEs).

He brings along with him years of experience, expertise

and in-depth knowledge of the mining industry, which

will be instrumental in paving a strategic growth path for

the Company’s mining segment.

13

Prudently expanding the mineral beneficiation business

Coal Washery, Ranchi

14

Mineral beneficiation offers a huge opportunity matrix in

India, which is currently beneficiating only 15% of its raw coal

production against 90-95% achieved by USA and 50% by China.

Armed with deep-rooted expertise in the field, Monnet is

harnessing this huge opportunity to expand its Mineral

Beneficiation business, especially in areas connected to coal

and its products. Looking forward, MIEL aims to develop a

washing capacity of approximately 50 million tonnes.

Monnet Group carries out extensive coal washing and

beneficiation for its internal consumption as well as for other

users, both in the public and private sectors. The Company’s

services in this field extend from concept to commissioning

under a single roof, and operation of washery both in coking

and non-coking sectors.

Washing capacity & operational strengths

Monnet Group’s Coal Washing operations are strategically

located:

A. Under operation

4.2 MTPA plant at Khalari (Ranchi) in N.K. Coalfields in

collaboration with M/s Daniels of USA

SERVICES IN BENEFICIATION

EXTEND FROM CONCEPT TO

COMMISSIONING UNDER

A SINGLE ROOF, AND

OPERATION OF WASHERY

BOTH IN COKING AND NON-

COKING SECTORS

B. Under Execution/ Pipeline

5 MTPA washery at Angul, in Talcher Coal Fields, Orissa

in collaboration with J-coal of Japan

2.5 MTPA non coking coal washery at Raigarh in

Chhattisgarh, with indigenous technology to be

expanded to 5 MTPA

3 MTPA non-coking coal washery at Bachra in N.K.

Coalfields, Jharkhand, with indigenous technology

Washeries for Public Sector Undertakings

MIEL, in collaboration with CLI USA/EMA Lysright Australia, has

been awarded contract for design & setting up of washeries and

running their operations for the following washery projects:

Patherdih Washery – 5 MTPA (coking coal)

Ashok Washery – 10 MTPA (non-coking coal)

15

Executing better through integrated competitive strengthsDuring the year, MIEL scripted a contrarian story that

predominantly asserts its core competitive strengths,

enabling it to grow stronger in the best of times, while

also capturing its resilience to maneuver through

challenging times.

(` in Crore)

Particulars 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

Equity Capital 47.99 47.96 54.48 64.36 64.36

Sales 1,159.07 1,548.73 1,480.70 1,573.05 1,897.38

EBITDA 300.30 406.63 477.33 466.39 537.85

EBITDA Margin (%) 25.91 26.26 32.24 29.65 28.35

Net Profit after Tax 166.16 216.00 269.10 281.16 288.86

Cash Profit 238.69 304.41 346.40 364.33 372.23

Dividend (%) 50 50 50 50 25

Earnings per share (in `) 42.98 44.22 53.64 48.61 44.90

Book value per share (in `) 226.85 268.20 307.20 324.78 366.77

Shareholders’ Funds 1,088.76 1,286.26 1,673.05 2,090.14 2,360.35

16

GROWING FROM

STRENGTH TO

STRENGTH, AS

REFLECTED IN THE

NUMBERS

Corporate Office, New Delhi

17

Promoting a ray of hope for a better life tomorrow

Promoting a ray of hope for a better life tomorrow

“I find hope in the darkest of days, and focus in the brightest.”

-Dalai Lama

HEALTHCARE

Health for all – Maina Devi Health Centres - Recognizing

that health is integral to a good quality of life, Monnet works

towards promoting healthcare awareness and providing quality

healthcare services through a gamut of healthcare initiatives for

the workers, employees and the community at large.

Medical support is bestowed through Maina Devi Health

Centres to ensure that the people in and around all project

locations have access to efficient healthcare facilities, thereby

positively impacting the local community’s health conditions.

Medical support in form of free medical health camps under

supervision of specialist doctors for routine check-ups and

financial support for surgical treatments is provided through

15 bedded Maina Devi Health Centres in Raipur and 27 bed in

Raigarh, Chhattisgarh.

Monnet foundation also offers free ambulance services in the

surrounding areas for basic health check-ups and emergency

facilities round the clock.

EDUCATION

In its endeavour to assist the country’s efforts to build modern

India through education, Monnet Foundation lays special

emphasis on imparting quality education. The Group has set

up Monnet DAV Public Schools around its facilities in Raipur

and Raigarh, with a mission of imparting quality education

to children of MIEL’s employees and of workers and villagers

in the surrounding areas. These schools are committed to

providing modern education facilities for the overall growth

of every child.

Concerned about the low enrolment, especially in rural India,

the Foundation has also initiated efforts to encourage children

to enroll at least in primary education. The Foundation

conducts various literacy campaigns in the villages of Angul

with the mission to obtain 100% literacy.

18

WOMEN EMPOWERMENT

Even as a significant part of the Group’s

businesses are located in and around

some of the country’s most mineral

rich states, the scope and necessity to

improve the lives and conditions of

many of the communities around its

facilities is immense especially among

the women. To enable women achieve

financial independence, the Monnet

Foundation has been imparting training

in income generationactivities like

white phenyl making, candle making,

backyard poultry farming, etc.

SUSTAINABLE LIVELIHOOD

The Company’s CSR initiatives aspire to promote focused

sustainable livelihood programmes through development of

skill and craft based training to youth and women, to improve

their lives through better livelihood opportunities. Monnet

Foundation conducts tailoring and embroidery classes, as

well as computer classes especially for young boys and girls.

The Company also imparts know-how on preparing washing

powder with the aim of equipping villagers with income

generation skills for older women unable to pick up these

skills.

WOMEN EMPOWERMENT

Even as a significant part of the Group’s businesses are

located in and around some of the country’s most mineral

rich states, the scope and necessity to improve the lives and

conditions of many of the communities around its facilities

is immense especially among the women. To enable women

achieve financial independence, the Monnet Foundation has

been imparting training in income generation activities like

tailoring & stitching, white phenyl making, candle making,

backyard poultry farming, etc.

Monnet Group believes in inspiring and empowering

communities and people to look deeper and ignite the ray of

hope within, to believe in oneself and confidently stride forward

towards a better tomorrow. The Group, through its Corporate

Social Responsibility (CSR) initiatives, encourages people to

dream big, while simultaneously promoting employees’ welfare,

enabling inclusive development, imbibing confidence and

supporting holistic development for communities. Encouraging

sports and athletics in the country is a vital aspect of its CSR focus.

In keeping with this CSR spirit, Monnet Foundation, a trust set up

by MIEL, is continually engaged in taking forward the Company’s

CSR initiatives. The employees, large worker communities and

the communities around its facilities have played an important

role in shaping the growth and development of the Company.

The Monnet Group acknowledges their contribution and,

through various developmental initiatives, aspires to pave the

way for even higher progress and development. The Group is

committed to bringing about a radical transformation in the

quality of communities in and around its facilities in Chhattisgarh

and Orissa through positive social upliftment programme

covering Health, Education, Women Empowerment, Sustainable

Livelihood, Infrastructure Development and Sports.

19

MONNET SPORTS FOUNDATION:

At Monnet Group, we strongly believe that India should

be acknowledged as a glorious Sporting Nation and not

just as a Cricketing Nation. Currently, the mention of sports

is synonymous with that of cricket, which is extremely

disheartening and demoralizing for sportspersons who, keep

winning the nation, global acclaim through their remarkable

feats at international podiums. With this thought in mind, the

Group set up Monnet Sports Foundation (MSF) with the intent

of strengthening the focus on sports in the country. As the first

step, MSF was inspired to adopt a sport which has the potential

to captivate the hearts of a billion people, bring laurels for the

country and which connects and synergizes with the Group’s

business operations.

Result: Our association with Boxing, a sport which aptly

exemplifies the attributes of power, agility and endurance

also manifested in our business operations. Monnet Group

became the first corporate to associate with the Indian Boxing

Federation (IBF) by being the official sponsors of the Indian

Boxing team.

Steps in the direction of taking this pursuit for excellence in

boxing further, the Company intends to set up a world class

Monnet Boxing Academy in the upcoming sports city at Raipur,

Chhattisgarh to train amateur boxers to attain global glory.

Indian Boxing Contingent - represented India at London Olympics 2012

Encouraging talent

To encourage budding talent, Monnet Group also supports

national championship events such as Nationals for Senior,

Junior & Youth for both Men & Women.

To support the Chhattisgarh Boxing Federation, the Group also

facilitates the procurement of boxing kits, boxing equipments,

etc. for the tournaments.

Saluting the winners

As a gesture of appreciation to the boxing heroes, Monnet has

devoted funds to regularly felicitate winners of national and

international repute with various cash prizes ranging from

`1 Lac to `3 Lac.

Innovatively popularizing boxing

To popularize the sport further, Monnet Group has been

promoting Boxing Fight Nights, a showcase of exhibition fights

between Indian and International boxing teams. In addition to

being a perfect arena to display talent, it also provides immense

entertainment value, which the Group intends to harness to

boost the future of the sport. As a step in this direction, the first

boxing fight night was organized at Raipur, featuring an India vs

Russia bout. The event was received with much applause.

20

LONDON OLYMPICS 2012

The Monnet Group announced cash incentives of `51 Lac,

`21 Lac & `11 Lac for Gold, Silver and Bronze medal winners

respectively before the Indian Boxing Contingent left for the

Olympics 2012. To honour India’s golden lady, the Legend of

World Boxing and 5 times World Champion, MC Mary Kom

for her tremendous performance at the recently concluded

London Olympics, Monnet Group felicitated MC Mary Kom

with a cheque of `11 Lac for winning a bronze medal.

ENTHUSED TO

COLLABORATE WITH

SPORTS TO MAKE INDIA

A TURE SPORTING

NATION

Shri Abhay Singh Chautala, President Indian Amateur Boxing Federation, Mary Kom and

Mr. Sandeep Jajodia, CMD, Monnet Ispat & Energy Limited

Acknowledging the efforts of the boxers, coaches and

physiotherapists for putting up a heartwarming show at

the London Olympics, Monnet Group extended a token

of appreciation by felicitating the rest of Olympic Boxing

Contingent with a cheque of `10 Lac.

Going forward, the Company will definitely seek to extend its

association with other sports across the country.

21

A nation-wide movement to encourage Indian athletes and unite Indian fans to support them ahead of London Olympics 2012

Monnet GO for gold Initiative

“Monnet Go for Gold Kashmir se Kanyakumari tak ..Ek Soch Ek Asha”

- India Go for Gold

Athletes running with Monnet Go for Gold Torch

22

“I am the greatest…and I said that even before I knew I was,” Muhammad Ali, world’s greatest boxing legend

is quoted to have said.

Monnet Group shares a similar deep conviction and confidence in India’s athletes and sportsmen. Together

with the people of India, MIEL pledged its wholehearted support to the Indian sportsmen as they prepared for

the ultimate test of performance and human endurance at the London Olympics. The campaign was an ode to

the sportsmen as they aspired to outshine and establish an even stronger presence for India, striving to carve

out an even bigger name for the nation and better their own mark in the greatest sporting event of all times.

The Monnet Go for Gold - A run from Kashmir to Kanyakumari, announced in January 2012, saluted the spirit

of sportsmanship in India and was a noble cause aimed at creating awareness amongst the people of India

towards the efforts of its athletes (representing India at Olympics) to put the country on the global map for

sports. It was a journey that aimed to touch the soul of every Indian covering over 50 cities & 6486 kms, to unite

them and pledge their support to the athletes, to cheer them, motivate them and send a strong message that

the entire nation is behind them.

Having commenced its journey from Jammu & Kashmir, the Monnet Go for Gold convoy travelled through

Pathankot, Jalandhar, Ludhiana, Chandigarh, Kurukshetra, Panipat, New Delhi, Vrindavan, Agra, Kanpur,

Allahabad, Varanasi, Bodhgaya, Dhanbad, Durgapur, Kolkata, Kharagpur, Baleshwar, Panikoili, Cuttack,

Bhubaneshwar, Angul, Sambalpur, Katapali, Raipur, Durg, Bhandara, Nagpur, Amrawati, Akola, Jalgaon, Dhule,

Malegaon, Nashik, Kalyan, Mumbai, Panvel, Mahabaleshwar, Chiplun, Panhala, Panaji, Marmagao, Karwar,

Bhatkal, Mangaluru, Bengaluru, Kannur, Kozhikode, Kochi, Kollam, Thiruvananthapuram, Nagercoil and finally

culminated in Kanyakumari.

The Monnet Go for Gold Convoy had major stopovers in Jammu & Kashmir, Chandigarh, New Delhi, Kolkata,

Bhubaneshwar, Raipur, Nagpur, Mumbai, Bengaluru and Kanyakumari. The convoy met with stupendous

response and garnered overwhelming support from the people, who came forward in huge numbers to wish

good luck and reiterate their dedication and support for the Indian Contingent for the Olympics 2012. The rally

across various cities saw various local athletes participate in this impressive journey of inspiration.

“I am the greatest…and I said that even before I knew I was,” Muhammad

is quoted to have said.

Monnet Group shares a similar deep conviction and confidence in India’

with the people of India, MIEL pledged its wholehearted support to the Ind

the ultimate test of performance and human endurance at the London Oly

A NATION-WIDE

MOVEMENT TO

ENCOURAGE INDIAN

ATHLETES AND UNITE

INDIAN FANS TO SUPPORT

THEM AHEAD OF LONDON

OLYMPICS 2012

23

MONNET ISPAT & ENERGY LIMITED

ANNUAL REPORT 2011-1224

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ANNANNANNANNANNANNANNN UALUALUALUAUALUAUALU RERERERERERERRREPORPORPORPORPORPOPOROOO T 2T 2T 2T 2T 2T 2T 20110110110101100 -12-12-12-12-12-1-12124242424242424242

Management Team

ANNANNAANNAANA UALAUALAUALAA REREREREER PORPORPORPOP T 2T 2T 201101101101101111011-1-1-1-124 24 24 442

Sitting Mr. Sandeep Jajodia, Chairman & Managing Director

Standing L to R : Mr. D. B. Mathur, Senior VP, Accounts & Taxation Mr. M. D. Mundra, President, ProjectsMr. Vinay Mittal, CEO, Monnet Power Company LimitedMr. C. P. Baid, Dy. Managing DirectorMr. Amitabh S. Mudgal, Sr. VP, Marketing & Corporate AffairsMr. Sunil Mittal, Corporate ConsultantMr. N. C. Jha, Whole-time DirectorMr. Aniruddha Singh, Group VP, HR & Administration

24

ANNUAL REPORT 2011-12 25

Directors’ Report for the financial year ended 31st March, 2012Your Directors submit their report for the financial year ended 31st March, 2012.

Sales, Profits, Dividends & Retention[` in Crore]

2012 2011Sales (Net of Excise) & Other Income 1897.38 1,573.05Profit before Depreciation 451.13 435.40 Depreciation and amortization expenses 74.11 73.86Profit before taxes 377.02 361.54Current Tax 78.90 71.08Deferred Tax 9.26 9.30Profit after Tax 288.86 281.16Cash Profit 372.23 364.32Profit brought forward from previous year 988.32 806.75Profit available for appropriation 1,277.18 1,087.91Dividend: 25% (2010-11 : 50%) 16.04 32.17Tax on Dividend 2.60 5.22Dividend paid (including taxes thereon) 0.00 2.50Transfer to General Reserve 28.90 28.20Transfer to Debenture Redemption Reserve 31.59 31.50Surplus carried to Balance Sheet 1198.04 988.32

Company PerformanceDuring the year under report, various divisions reported the production as below:

[` in Crore]Production Unit 2012 2011 Increase/

(Decrease)Sponge Iron MT 742194 692096 7.24M.S./S.S. Products MT 89061 41956 112.27Structural Steel MT 81204 39289 106.68Ferro Alloys MT 8993 8606 4.50Coal MT 850505 951930 (10.65)Power Units in ‘000 858238 969075 (11.44)

Status of Expansions

SteelThe steel expansion at Raigarh is progressing as per schedule. 80 MW Power Plant is completed and commenced. Facilities like Blast Furnace, Sinter Plant, Rebar Mill etc. are getting commenced during the year and Pellet Plant and Coke Oven Plant will get completed in the 1st half of next financial year.

Power (Monnet Power Company Limited)The Power Project of 1050 MW being set up in MPCL a subsidiary Company at Angul is also progressing with major milestones like boiler drum lifting and TG deck casting having been completed for both unit 1 and unit 2. TG Building structure is in progress. The Company is well placed with work order on other modules like power evacuation system, cooling tower, intake water system besides two-third of chimney height

having been erected. Boiler light-up is proposed in July 2013 with synchronization proposed in Sep-Oct 2013 for Unit 1 and December 2013 for Unit 2.

Risk ManagementYour Company’s Risk Management Policy is backed by strong internal control systems. The risk management framework consists of policies and procedures framed at management level and strictly adhered to and monitored at all levels. The Company also has a sound internal audit system in place. The audit consists of an independently constituted team in the Company and outside auditors appointed for the purpose. The risk policy and Internal Audit Reports are periodically reviewed by the Board and Audit Committee with emphasis on maintaining its effectiveness in dynamic business environment.



Note on SubsidiariesYour Company has fifteen subsidiary companies including subsidiaries of subsidiaries. The consolidated financial statements presented by the Company include financial information of its subsidiaries prepared in compliance with applicable Accounting Standards. For further details of these subsidiaries, please refer Note 1 [ I ] [a] of Consolidated Financial Statements on page [82]. The Ministry of Corporate Affairs, Government of India vide its Circular No. 5/12/2007-CL-III dated 08-02-2011 has granted general exemption under Section 212(8) of the Companies Act, 1956, from attaching the balance sheet, profit and loss account and other documents of the subsidiary companies to the balance sheet of the Company, provided certain conditions are fulfilled. The information in accordance with para (iv) of the circular dated 08-02-2011 is appended at the beginning of Consolidated Financial Statements on pages [77] and [78]. Further, annual accounts of the subsidiary companies and the related detailed information will be made available to the holding and subsidiary companies’ investors seeking such information at any point of time. The annual accounts of the subsidiary companies will also be kept for inspection by any investor at Company’s Corporate Office in Delhi and at the Registered Offices of subsidiary companies concerned.

BuybackDuring the year under review, your Company had launched buyback scheme of its own equity shares pursuant to Section 77A of the Companies Act, 1956 and the SEBI (Buyback of Securities) Regulations, 1998. The buyback scheme was opened on 21-03-2012 and is continuing. However, the actual buyback commenced from 21-05-2012 and so far, the Company has bought back a total of 231483 equity shares till the date of signing of Board’s Report. The maximum offer size of the buyback is `100 Crore and the maximum offer price is `500/- per share. The total amount of buyback is `79.95 Crore. All the equity shares bought back are being extinguished periodically as prescribed under the said regulations.

DividendThe Board of Directors recommends a dividend of `2.5/- per share on 64175673 equity shares of `10/- each for the financial year ended 31-03-2012 subject to approval of the shareholders in the ensuing Annual General Meeting. The total outgo on account of dividend including corporate dividend tax works out to `18.65 Crore as against `39.89 Crore in the previous year. However, in view of continuing buy back scheme, the actual payout shall differ and shall be based on actual share capital as on the date of book closure of the Company on 22nd September and approval by the shareholders.

Necessary information with respect to entitlement is being given in detail in the Notice calling Annual General Meeting.

Depository SystemAs on 31-03-2012, about 99.28% of the shares of your Company are held in dematerialized form. The percentage wise decline in dematerialized shares is due to ongoing buyback scheme in which only dematerialized shares have been bought back so far.

The shares of the Company are available for trading in the dematerialized form under both the Depository Systems in India – NSDL and CDSL. The International Securities Identification Number (ISIN) allotted to the Company’s shares under the Depository System is INE743C01013. The annual custody fee for the financial year 2012-13 has been paid to NSDL and CDSL, the Depositories.

During the year, 42739 shares of the Company, covered in 174 requests and constituting 0.07% of the paid-up Share Capital of the Company, were dematerialized and 1 shares of the Company, covered in 1 requests and constituting 0.00% of the paid-up Share Capital of the Company, were rematerialized. As on 31-03-2012, 63873685 shares of the Company constituting 99.28% of the issued and subscribed share Capital stand dematerialized. The Company’s market capitalization stood at `3010 Crore on 31-03-2012.

DirectorsDuring the period beginning after the date of last Directors’ Report, Shri M.S. Gujral, Chairman of the Board left for heavenly abode on 04-05-2012. Shri M.S. Gujral had remained the Chairman of Indian Railway Board from 17-11-1980 to 6th February, 1983 and of Coal India Limited from 1983 to 1985 apart from holding senior bureaucratic positions in various capacities with Government of India. Shri Gujral made immense contribution as a member of the Board on operations and strategic matters from time to time. His stature and reputation elevated the profile of the Board. He was a member of the Board from the inception of the Company and was elevated as a Chairman of the Board from 29-11-2002. Shri Gujral, though having left for heavenly abode, shall continue to remain a guiding light and the source of inspiration.

Shri Amit Dixit and Shri Vikram Deswal were inducted as additional directors on the Board of the Company w.e.f. 14-05-2012 and hold office upto the date of ensuing Annual General Meeting. The Company has received notices u/s 257 of the Companies Act, 1956 proposing their names for the directorship along with a fee of `500/- each.


Shri K.K. Khanna, Executive Director resigned from the Board of Directors w.e.f. 13-08-2012 due to his personal commitments. The Board places on record its appreciation of the valuable guidance rendered by him during his tenure as Executive Director. Further, Shri N.C. Jha, who is Ex-Chairman of Coal India Limited, had joined the Company as Chief Executive Officer (Mining Business) on 10-05-2012 and has been elevated as Whole-time Director of the Company w.e.f. 14-08-2012 for a period of three years.

Pursuant to Section 255 of the Companies Act, 1956, Shri Ajay Relan, Director, retires by rotation on the day of ensuing Annual General Meeting of the Company and, being eligible, offers himself for re-election. As per Clause 49 (IV) (G) of the Listing Agreement, the details of above directors are given in Annexure-V.

Responsibility StatementIn terms of Section 217 (2AA), your directors confirm having: -

(i) followed in the preparation of Annual Accounts, the applicable accounting standards, with proper explanation relating to material departures, if any;

(ii) selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

(iii) taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) prepared the accounts on a going concern basis.

Management Discussion & AnalysisPursuant to clause 49 of the Listing Agreement with Stock Exchanges, a separate section titled “Management Discussion & Analysis” has been included in this annual report and is given in Annexure-II and forms an integral part of this report.

Corporate Governance ReportPursuant to clause 49 of the Listing Agreement with stock exchanges, a separate section titled “Compliance Report on Corporate Governance” has been included in this annual report and is given in Annexure-III along with a certificate of compliance from the Auditors and forms an integral part of this report.

Statutory Disclosuresi) A declaration signed by Chairman & Managing Director

as required under Clause 49 (I) (D) of the Listing Agreement is enclosed as Annexure-IV.

ii) The Chairman & Managing Director and Chief Financial Officer have given a certificate to the Board of Directors, as required under Clause 49 (V) of the Listing Agreement, for the year ended 31-03-2012.

Consolidated Financial StatementsIn accordance with Accounting Standard 21 - Consolidated Financial Statements prepared on the basis of audited financial statements received from subsidiary companies as approved by their respective boards form part of this Report & Accounts.

Audit CommitteeThe Audit Committee of Board of Directors constituted in terms of Clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956 consists of Shri G.C. Mrig as its Chairman and Shri Ajay Relan and Shri J.P. Lath as its members.

AuditorsThe Auditors’ Report and Notes to the Accounts as referred in the Auditors’ Report are self-explanatory and therefore, do not call for any further comments or explanation.

M/s. O.P. Bagla & Co., Chartered Accountants, New Delhi, Auditors of the Company, hold the office till the conclusion of 22nd Annual General Meeting and are eligible for reappointment. A Certificate from the auditors has been received to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956.

Fixed DepositsThe Company has not invited or accepted any deposits during the year from the Public under Section 58A of the Companies Act, 1956.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo As required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 the relevant data is enclosed as Annexure-I forming part of this report.

PersonnelInformation as per Section 217(2A) of the Act, read with the Companies (Particulars of Employees) Rules, 1975,



as amended from time to time, forms part of this Report. However, as per the provisions of Section 219 (1) (b) (iv) of the Act, the Report and Accounts are being sent to all the members excluding the statement containing the particulars of employees to be provided under Section 217(2A) of the Act. Any member interested in obtaining such particulars may inspect the same at the Registered Office of the Company or write to the Company Secretary at the Corporate Office of the Company for a copy.

AcknowledgmentsYour Directors take this opportunity to offer their sincere thanks to the various Departments of the Central and State Government, Financial Institutions, Bankers to the Company, all Customers, Suppliers and contractors for their continued valued assistance and support. Your Directors also wish to place on record their appreciation for dedicated services rendered by all officers, staff and workers of the Company at all levels.

For and on behalf of Board of Directors

New Delhi (Sandeep Jajodia)Date : 14-08-2012 Chairman & Managing Director


Annexure to the Directors’ ReportAnnexure - I

Information as per Section 217[1][e] of the Companies Act, 1956 read with the Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988 and forming part of the Director’s Report for the year ended 31-03-2012.

A. CONSERVATION OF ENERGYThe Company has taken a number of steps to improve the conservation of energy by increasing the efficiency of raw material inputs in power generation and by reducing/eliminating consumption wastages. Conservation of energy and improving the efficiency of existing resources are continuing processes and form an integral part of responsibilities of departmental heads. Various steps taken in this direction are as follows: -

a] Energy conservation measures taken :— Optimization of Steam Generation & condensate recover system— Optimization of Heat Recovery from flue gases— Optimization of capacity utilization, thus reducing specific consumption of energy— Optimization of pump & motor operations through application of BFD in WHRB -1— Elimination of one I.D. Fan, P.A., F.D. and CEP in WHRB-2, AFBC-2 & TG-III— Strict control of Quality inputs, resulting in less slag generation, thus saving electricity consumption— Utilization of Ignite Oil in place of LDO in SID— Utilization of all size fractions of coal— Minimization of handling losses— Implementation of online oversize Coal recirculating system in DRI to reduce HSD Consumption and Ground wash— Automation of RMHS Circuit by operating through PLC— Reduction of power consumption of Kilns by installing VVVF Drive for LOB compressors and CB Fans of kilns,

shutting of one compressor, stopping one side screen filter pump and by installation of VFD in two CW pumps— Energy gain by increasing feed water temperature in Deaerator by 5 degree centigrade— Cost saving by increasing the use of Dolo Char

b] Additional Investments and proposals, if any, being implemented for reduction of consumption of energy :— Installation of VFD in 2 nos PA Fans for 90 MW Power Plant— Installation of VFD in 2 nos ACW Fans for 90 MW Power Plant— Retrofitting of cooling tower by replacing gear boxes, fans, & new cylinders of cooling tower of 90 MW Power Plant— Char consumption to be increased up to 25 % of total fuel feeding

c] Impact of measures of [a] and [b] above for reduction of energy consumption and consequent impact on the cost of production of goods— The per ton power consumption has been under control.

d] Total energy consumption and energy consumption per unit of production is as per Form A annexed.

B. TECHNOLOGY ABSORPTIONe] Efforts made in technology absorption are as per Form B annexed.

C. FOREIGN EXCHANGE EARNINGS AND OUTGOf] Activities relating to exports initiatives taken The efforts are being made.

to increase exports development of new export markets for products and services and export plans.

g] Total Foreign Exchange used and earned- Used 198.51 Crore- Earned 113.59 Crore



FORM - A

DISCLOSURE OF PARTICULARS WITH RESPECT OF CONSERVATION OF ENERGY

Current Year (2011-2012)

Previous Year(2010-2011)

A. POWER AND FUEL CONSUMPTION :

1. ELECTRICITY

a] Purchased

- Units 44514295 43274106

- Total Amount (` in Lac) 2172 1790

- Rate/Unit (`) 4.88 4.14

b] Own Generation

(i) Through Diesel Generator

- Units (in KWH) 12862336 13456908

- Unit per ltr. of Diesel Oil 3.01 3.13

- Cost/Unit [`] 15.26 13.00

(ii) Through Steam Turbine

- Units (in KWH) 913551499 1036496183

- Unit per MT of Gas 242 243

- Cost/Unit 2.22 2.14

2. COAL

Quantity (in Mts.)

Sponge Iron 1008950 999794

Power Plant 597236 885839

Ferro Alloys Plant 3655 9311

Total Cost (` in Lac) 38009 30465

Average rate (` per ton) 2361.07 1607.68

3. FURNACE OIL/LDO

Quantity (k. Ltrs) 7580204 5867880

Total Cost (` in Lac) 3148 2171

Average rate (` per Ltrs.) 41.53 37.00

4. OTHERS/INTERNAL GENERATION NIL NIL

B. CONSUMPTION PER MT OF SPONGE IRON

Electricity (in KWH) 79 84

Furnace Oil (in K. Ltrs) NIL NIL

Coal (in Mts.) 1.44 1.36

Others NIL NIL


Current Year (2011-2012)

Previous Year(2010-2011)

C. CONSUMPTION PER MT OF MILD STEEL INGOTS

1. Electricity (KWH) 0 0

D. CONSUMPTION PER MT OF MILD STEEL BILLET


E. CONSUMPTION PER MT OF FERRO ALLOYS


F. CONSUMPTION PER MT OF STRUCTURAL STEEL


FORM - B

DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION

A. RESEARCH AND DEVELOPMENTS : NIL NIL

B. TECHNOLOGY ABSORPTION, ADAPTATION & INNOVATION :

1) Efforts, in brief, made towards technology absorption adaptation and innovation: NIL NIL

2) Benefits derived as a result of :the above efforts e.g. product improvement, cost reduction, product development, import substitution etc.

Not applicable in view of reply B[1]

above.

Not applicable in view of reply B[1]

above.

3) Information relating to imported technology : N.A. N.A.



Management Discussion And AnalysisAnnexure - II

Industrial Structure & Developments / Risks & ConcernsIndia emerged as the 4th largest producer of crude steel in the world as per data upto 31-12-2011 and it continues to remain the largest producer of DRI in the world. The crude steel production has grown mainly due to electric route of steel making particularly induction furnace route that accounts for 32% of total steel production.

During five year period of 2005-06 to 2010-11, the capacity of crude steel production expanded from 51.17 MT to 78 MT on annual basis and the production of crude steel grew from 46.46 MT to 69.57 MT at an annual growth of 8%. The capacity utilization of crude steel, thus, as per the last numbers was at encouraging 89%.

The production of finished steel grew to 66.01 MT during 2010-11 as against 46.57 MT in 2005-06 with an annual growth of 7% but the consumption of finished steel grew at an annual growth of 9.6% during the same period. The export of steel grew by 23.8% and import reduced by 7%. However, India still remains to be net importer of steel.

India continues to be the largest producer of sponge iron in the world in 2011 mainly on account of domestic availability of thermal coal and iron ore, the key resources for sponge iron. The contribution of coal based sponge iron is to the tune of 80% out of the total production. The total capacity of sponge iron industry stands at 35 MT. Though, India remains to be net exporter of pig iron which is mainly contributed by private sector. The Government has taken steps to discourage export of iron ore by increasing the ad valorem duty to 30% on all varieties of steel except pellets. There are no significant numbers of import/export of sponge iron.

Sponge iron industry has become highly sensitive to the supply and pricing of coal and iron ore. Both the raw materials are exposed to volatilities of pricing and supply which is quite challenging to the players exposed to open market purchases. Coal availability has become more critical in the last two years, whereas both availability and pricing have become volatile in iron ore.

Opportunities & Threats / OutlookThe Indian Economy is poised at a critical juncture with deceleration in GDP growth of the country. The investment cycle in the country has deteriorated mainly in capital goods and infrastructure in the last one year. The environment in the industry has become most challenging. The aggregate developments in the Global and local economy in the last

one year have compounded the uncertainty in the economic outlook and its impact on commodity cycle. Demand for commodities including steel in the indigenous and global market is under pressure. The economic activity in the world is locked by problem in different regions and countries across the Globe. A major policy boost on the regulatory front and quick initiatives by the Government are required to renew the momentum of investment cycle to arrest any further downward pressure on the economy.

However, this blockage of investment has equally impacted the steel industry and the industry is not adding or announcing fresh capacities except the additions in the capacities currently in progress in various companies. Issues of land aggregation and basic clearances have become a prolonged activity before physical mobilization of the projects. Therefore, the current virtual status quo in fresh expansions may result into a virtual freeze in supplies over the next few years. That is going to create enormous opportunities for the companies who are implementing or have completed their expansions, while the basic demand of steel will continue to grow relative to the growth of GDP. Country may face supply side constraints, and is painting a very rosy picture for the industry for the future. Nonetheless, the current and ensuing year could be threatening to the companies which are completely exposed to raw material procurement from the open market and market conditions.

India has abundant resources of thermal coal and iron ore, the reasons for India’s rise as largest producer of sponge iron. The structure of sponge iron industry may be classified into organized and large players with 0.2 MT and higher capacities, and smaller players with 0.5 MT to 0.2 MT capacities. Some of the larger players have been able to integrate their operations partially or fully but the integration is missing in most of the small segment which has made them vulnerable to situations of depressed demands or low off takes. The operational sustainability of these players in times of low demands is extremely week resulting in partial or full closure of their operations. Thus, it reduces the supply in the industry which invariably helps the larger players in terms of their sale and margins. Therefore, partial or full integration to raw material is critical in the sponge iron.

Segment wise or Product wise Performance and Discussion on Financial Performance with respect to Operational PerformanceDuring the year, there have been no capacity additions at the plant. The production of Sponge Iron and Steel has reported growth mainly on account of higher capacity utilization,


whereas Coal and Power Generation experienced marginal decrease. Consequently, both divisions have doubled the production during the year under report.

During the year, the Company has reported an increase in revenue by `324 Crore over previous year and Profit before interest & depreciation has increased to `538 Crore from `466 Crore. Net profit however, remained flat on account of incidence of higher costs of raw material and overheads.

Internal Control Systems and their Adequacy

Your Company has adequate internal control systems commensurate with the size and nature of the business and are supplemented by an extensive programme of internal audits, reviews by management and documented policies, guidelines, and procedures to provide reasonable assurance that all assets are safeguarded, transactions are authorized, recorded and reported properly. Your Company has an independent MIS and Audit Department to oversee the day-to-day functioning

of the Company. The Company has proper budgeting system and the actual performance is continuously evaluated and the corrective measures are taken from time to time.

Material Developments in Human Resources/Industrial Relations front Industrial relations in the Company are satisfactory. The relations with the labour are cordial .

The operations of the plant are under the charge of independent Chief Executive Officers, who have rich experience and qualifications in the field.

Cautionary NoteCertain statements in the “Management Discussion and Analysis” section may be forward-looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envisage at this point in time for the future performance and outlook of the Company.



Your Directors present the Company’s Report on Corporate Governance for the financial year ended on 31-03-2012.

Company’s Philosophy on code of GovernanceMonnet is committed to ethical corporate citizenship by following systemic process of healthy governance practices and discharging societal responsibilities towards capital providers, business associates, stakeholders and employees in conducting its affairs in a fair and professional manner and in maintaining the high standards. The Company has also taken a series of other measures such as having professional Directors on the Board who have achieved prominence in their professional career, adopting pragmatic policies and effective systems and procedures, sharing of information with shareholders on a regular basis, through newspapers, audits and checks.

The policies and actions of the Company, while being in full compliance of applicable laws and regulations, are dictated by the underlying objective of maximizing shareholder value on a long-term basis.

Board of DirectorsYour Company has strong and balanced Board of Directors. The Board is fully empowered to discharge the responsibility of strategic supervision of your Company. More than half of the strength of the Board comprises of Non-executive Directors. The Board consists of nine directors, i.e. a Chairman & Managing Director, a Dy. Managing Director, a Whole-time Director and six Non-executive Directors. Four of these six Directors are Non-executive Independent Directors. Subsequent to passing away of Shri M.S. Gujral who held the position of Non-executive Independent Chairman of the Board, the Company has immediately initiated the process of restructuring the Board and has inducted two new directors who are very eminent in their respective fields.

The Board of Directors meets at least once in a quarter to review the Company’s performance and financial results and more often, if considered necessary, to transact any other business. The intervening period between two Board Meetings was well within the maximum gap of four months as prescribed under Clause 49 of the Listing Agreement.

Meetings & AgendaThe agenda is accompanied by Notes giving comprehensive background that enables the Board to take informed decisions. Generally, agenda papers are circulated seven days prior to the board meeting.

Present structure of the Board of Directors is as followingName Category No. of Board

Meetings attended

during 2011-12

No. of Directorships in other public companies 1, 2

No. of Committee Memberships in other

Companies 1, 3

Chairman Member Chairman MemberShri M.S. Gujral #

Independent Non Executive

9 N.A. N.A. N.A. N.A.

Shri Sandeep Jajodia (Chairman & Managing Director)

Not Independent Executive

9 0 5 0 1

Shri C.P. Baid (Dy. Managing Director)


9 0 1 0 0

Report on Corporate GovernanceAnnexure - III


Name Category No. of Board Meetings attended

during 2011-12

No. of Directorships in other public companies 1, 2

No. of Committee Memberships in other

Companies 1, 3

Chairman Member Chairman MemberShri K.K. Khanna % (Executive Director)


9 0 0 0 0

Shri G.C. Mrig Independent Non Executive

4 1 1 0 0

Shri Amit Dixit * Independent Non Executive

N/A 0 6 0 1

Shri Vikram Deswal *

Independent Non Executive

N/A 0 0 0 0

Shri Ajay Relan Independent Non Executive

2 0 4 1 3

Shri J. P. Lath Not Independent Non Executive

8 0 4 0 3

Shri Gopal Tiwari

Not Independent Non Executive

N/A 0 1 0 1

Shri N.C. Jha ** Whole-time Director N/A 0 3 0 0

Notes:1. Other Directorships and Committee Memberships of Directors are as on 31-03-2012.2. Directorships in other Companies exclude Private Limited Companies, Foreign Companies, Membership of Associations

etc./Professional Bodies and Alternate Directorship.3. Committee Membership is in respect of Audit Committee and Investors Grievance Committee of Indian Public Limited

Companies.# Passed away on 04-05-2012.% Resigned w.e.f. 13-08-2012. * Appointed as Additional Director w.e.f. 14-05-2012.** Appointed as Whole-time Director w.e.f. 14-08-2012.

Details of Board Meetings during Financial YearDuring the financial year ended 31-03-2012, nine meetings of the Board were held as follows:—Sl. No.

Date Board Strength No. of Directors Present

1 12-05-2011 8 72 02-08-2011 8 73 20-08-2011 8 74 08-11-2011 8 75 22-12-2011 8 66 06-01-2012 8 67 28-01-2012 8 68 14-02-2012 8 79 26-03-2012 8 6

Information in cases of appointment or re-appointment of Directors as required under Listing Agreement is given as underRequisite details in respect of Shri Amit Dixit, Shri Vikram Deswal, Shri Ajay Relan and Shri N.C. Jha are given in Annexure-V.

Committees of the BoardCurrently, there are six Committees of the Board, i.e. Executive Committee, Finance Committee, Audit Committee, Remuneration



Committee, Investors’/Shareholders’ Grievance Committee and Share Transfer Committee. These Committees have defined terms of reference. However, occasionally, the Board assigns certain matters. The Board also forms Committee for a specific purpose after which these Committees cease to exist.

Audit CommitteeYour Company has in place a qualified and independent Audit Committee as prescribed in Clause 49 (II) (A) and has been delegated powers specified in sub-clause (C) and performs role as defined in sub-clause (D). It also reviews the information as per sub-clause (E) and meets at least four times in a year and not more than four months elapse between two meetings as prescribed in sub-clause (B) of the aforesaid Clause 49 (II). The Audit Committee also meets the requirements contained in Section 292A of the Companies Act, 1956.

CompositionThe Audit Committee comprises of three Independent Non Executive Directors and one Executive Director and a Secretary in compliance of Clause 49 II (A) (i) of the Listing Agreement. Shri M.S. Gujral was the Chairman of Audit Committee. After his passing away, Shri G.C. Mrig has been nominated as Chairman, Shri Ajay Relan and Shri J.P. Lath are the other Members of the Committee.

AttendanceBesides members of the Committee, the Managing Director, Dy. Managing Director, Executive Director and Chief Financial Officer along with the Statutory Auditors are invitees to the meetings.

The details of attendance in the Audit Committee Meetings held during the year is given below: —Name No. of Audit Committee Meetings held

during the tenure of the MembersNo. of Audit Committee Meetings

AttendedShri M.S. Gujral 6 6Shri G.C. Mrig 6 4Shri Gopal Tiwari 6 5Shri C.P. Baid 6 5

During the year 6 Audit Committee Meetings were held. The detail of these Meetings and attendance thereat is given below: —Sl. No.

Date Committee Strength

No. of Members Present

1 12-05-2011 4 32 02-08-2011 4 43 20-08-2011 4 44 08-11-2011 4 45 22-12-2011 4 26 14-02-2012 4 3

Remuneration CommitteeThe Remuneration Committee comprises of Shri G.C. Mrig (Chairman) Shri Gopal Tiwari and Shri J. P. Lath. The terms of reference of this Committee cover the matters specified for Remuneration Committees under clause 49 of the Listing Agreement. During the year no Remuneration Committee Meeting was held as no occasion for holding the said meeting arose.

Shareholders/Investors Grievance CommitteeThe Shareholders/Investors Grievance Committee oversees the redressal of Shareholders and Investor Grievances. Apart from this, the Committee also oversees the compliance with Listing Agreement and various statutes, Rules, Regulations pertaining to securities market, dissemination of quarterly information to Stock Exchanges, furnishing of various certificates from practicing Company Secretary such as Capital Reconciliation Audit, Clause 47 certification, NSDL & CDSL matters such as carrying out Corporate Action etc.

On day to day basis, the Investor grievances are handled by Company’s Registrars and Share Transfer Agents MCS Limited, New Delhi. The Secretarial Department of the Company monitors complaints and other activities and also helps in resolving


grievances wherever needed. A firm of Practicing Company Secretaries conducts the audit on quarterly basis and submits Capital Reconciliation Audit Report. It also conducts half yearly due diligence exercise in compliance of Clause 47 of the Listing Agreement and submits its certificate.

CompositionThe Shareholders/Investors Grievance Committee is headed by Non-executive Chairman in compliance of Clause 49 IV (G) (iii) of the Listing Agreement. Shri M.S. Gujral was the Chairman of the Committee. After he passed away, Shri J.P Lath has been nominated as the Chairman of the Committee. Shri Gopal Tiwari and Shri C.P. Baid are the other Members of the Committee. Shri M.P. Kharbanda, Company Secretary is the Compliance Officer.

AttendanceThe dates of meetings and details of attendance at Shareholders/Investors Grievance Committee Meetings held during the year is given below: —Sl. No.

Date Committee Strength

No. of Members Present

1 12-05-2011 3 22 02-08-2011 3 33 08-11-2011 3 34 14-02-2012 3 3

Share Transfer CommitteeThe Share Transfer work is handled by the Registrars who along with Share Transfer Committee handle the transfers/transmission of shares, issue of duplicate share certificates etc. The Composition and attendance of the members during the financial year ending 31-03-2012 is as follows: —Name Category Number of Meetings held during

the tenure of the MembersNumber of Meetings attended

during the yearShri J. P. Lath Director 24 24Shri C.P. Baid Dy. Managing Director 24 24Shri M.P. Kharbanda Company Secretary 24 24

Whereas requests for share transfer, transmission, split/consolidation and duplicate share certificate are first processed by Company’s Registrar & Transfer Agents, MCS Limited and only valid requests are forwarded to Share Transfer Committee for its approval, requests for dematerialization/rematerialization are handled directly and independently by MCS Limited in line with the Depository Guidelines for their speedy disposal. The Share Transfer Committee meets regularly.

Details of Remuneration to Managing DirectorThe break-up of remuneration paid to the Managing Director, Dy. Managing Director and Executive Director are as follow:—

(` in Lac)

Name Shri Sandeep Jajodia Shri C.P. Baid Shri K.K. Khanna Shri Gopal TiwariPosition Chairman & Managing

DirectorDy. Managing Director Executive Director Consultant

Salary (`) 300.00 114.50 34.37 6.60Commission/Allowance (`)

NIL NIL NIL NIL

Perquisites (`) 36.85 6.61 0.39 NILTotal (`) 336.85 121.11 34.76 NILStock Option Granted (Nos.)

NIL NIL NIL NIL

Service Contract 5 years from 01-04-2010 to 31-03-2015

5 years from 08-11-2010 to 07-11-2015

3 years from 31-10-2009 to 30-10-2012

N.A.



Sitting Fee paid to Non-Executive Directors is as given belowName of the Director Sitting Fees (`) ESOP granted

(No. of Shares)Shri M.S. Gujral 1,57,000 NILShri G.C. Mrig 73,000 NILShri Ajay Relan 5,000 NILShri Gopal Tiwari 1,55,000 NILShri J. P. Lath 1,20,000 NIL

Compliance OfficerShri M.P. Kharbanda, Company SecretaryMonnet House, 11 Masjid Moth,Greater Kailash-II, New Delhi – 110 048

Status of Complaints For The Period 01-04-2011 to 31-03-2012.Particulars No. of

ComplaintsNumber of complaints received from the investors (including the opening Balance as on 01-04-2011) comprising of Non-receipt of Dividend Warrants where reconciliation is completed after end of the quarter, securities sent for transfer and transmission annual report & complaints received from Regulatory/Statutory Bodies and those related to court/consumer forums.

132

Number of complaints resolved 108Complaints Pending as at 31-03-2012 24Number of shares pending for transfer as at 31-03-2012. 0

General Body MeetingsDetails of Last 3 Annual General Meetings

Financial Year AGM Date Place of Meeting

Time Special Resolutions passed in last 3 years / Special Resolution

passed through Postal Ballot last year

2010-11 21st AGM 30-09-2011 Monnet Ispat & Energy LimitedMonnet Marg, Mandir Hasaud, Raipur-492101, Chhattisgarh

11.30 a.m. A special Resolution was passed in the AGM u/s 314 for holding office of profit by a director

2009-10 20th AGM 30-12-2010 3.00 p.m. One Special Resolution u/s 31/Two Ordinary Resolutions passed through Postal Ballot u/s 293 (1) (a) and 293 (1) (d)

2008-09 19th AGM 30-09-2009 3.30 p.m. One Special Resolution u/s 31

The Company is conducting a postal ballot in which one ordinary resolution under section 293 (1 (a), one special resolution u/s 17 & 18 and one special resolution u/s 31 is proposed to be conducted through postal ballot. The postal ballot will be posted to the shareholding position as on 19-08-2012 and will be posted by 25-08-2012. The postal ballots received on or prior to 24-09-2012 only will be deemed to be valid which are to be sent directly to Mr. Sanjay Grover, Practicing Company Secretary who has been appointed as Scrutinizer for this Postal Ballot. Shri J.P. Lath, Director and Shri M.P. Kharbanda, Company Secretary, have been designated for smooth conduct of the postal ballot. The result will be declared by the Chairman in the Annual General Meeting and the resolutions will be deemed to have been passed on that date. These businesses will not be conducted in the AGM even if a shareholder is present who has not exercised the vote through postal ballot.

Disclosures(A) Disclosure by key managerial personnel about related party transactions

The appropriate policies and guidelines are in place to enable the key managerial personnel to give the disclosures relating to financial and commercial transactions where they and/or their relatives have personal interest. There are no materially significant related party transactions, which have potential conflict with the interest of the Company at large. The related party transactions have been disclosed in point no. 24 of Schedule – 21 (B) to the Notes on Accounts on Balance Sheet and Profit and Loss Account for the year ended 31-03-2012.


(B) Matters related to capital marketNo non-compliance related penalties or strictures have been imposed on the Company by Stock Exchanges or SEBI or any statutory authority, on any matter related to capital markets, during the last three years.

(C) Access to Audit CommitteeNo personnel has been denied access to the Audit Committee.

(D) Management Discussion and AnalysisThe Management Discussion and Analysis is a part of the annual report.

(E) Compliance with mandatory requirements and adoption of Non-mandatory requirementsBesides mandatory requirements of Clause 49 of Listing Agreement, endeavor is being made to comply with non-mandatory requirements such as special resolution for alteration of Articles of Association, though not mandatory, is being conducted though postal ballot and formation of Remuneration Committee. For details, refer to the section of this report dealing with Committees of the Board.

Means of CommunicationMonnet regularly interacts with the shareholders and pursues the policy of timely disclosure of information. The Company publishes quarterly results on an all India basis in major newspapers.Quarterly Results Normally published in The Economic Times (All Editions),

Times of India, Navbharat Times, Financial Times, Hindu Business Line and Business Standard.

Whether it also displays official news releases and Presentations made to institutional investors or to analysts

N.A.

Whether M D & A is a part of annual report or not Yes

General Shareholder Information

1. Annual General MeetingDate 29-09-2012Venue Monnet Ispat & Energy Limited

Monnet Marg, Mandir Hasaud, Raipur-492101, ChhattisgarhTime 2.30 p.m.Book Closure Date Saturday, 22-09-2012 to Saturday 29-09-2012 (both days inclusive)Dividend Payment Date

Within 30 days from the date of approval by shareholders in AGM. Dividend shall be payable to those members whose name appears in the Register of Members as on 22-09-2012 after giving effect to all the transfers received on or prior to 22-09-2012.

2. Financial Calendar for : 2012-13 (Tentative)Financial Year 2012-13

Financial year ending 31st MarchFirst Quarter Results On 14-08-2012Half Yearly Results On or before 14-11-2012Third Quarter Results On or before 14-02-2013Fourth Quarter Unaudited Results / OR Audited Results On or before 15-05-2013 / OR 30-05-2013

3. Regd. Office & Works : Monnet Marg, Mandir Hasaud, Raipur, Chhattisgarh- 492101

4. Listing of shares on stock exchangesThe equity shares of the Company are listed on National Stock Exchange of India Limited, Bombay Stock Exchange Limited



& Madhya Pradesh Stock Exchange. Delisting from Calcutta Stock Exchange Assn. Limited is pending.

Stock Exchange Stock CodeNational Stock Exchange of India Limited ‘Exchange Plaza’, Bandra Kurla Complex, Bandra (E), Mumbai- 400051. e-mail : [email protected] ; website : www.nseindia.com

MONNETISPA

Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai – 400 001 e-mail : [email protected] ; website : www.bseindia.com

513446

M.P. Stock Exchange “Palika Plaza”, Phase II, 201, 2nd Floor, MTH Compound, Indore – 452 001 (M.P)

5. Shares held in Dematerialized and Physical form as on 31-03-2012

6. Shareholding pattern as on 31-03-2012:-Category No. of Shares

held% of

ShareholdingPromoters / Persons Acting in Concert 31810341 49.44Banks, Financial Institutions and Insurance Companies 811000 1.26Mutual Funds & UTI 1152439 1.79Foreign Institutional Investors 23352671 36.30NRI/OCBs 47268 0.07Private Corporate Bodies 5379930 8.36Resident Individuals, H.U.F., Directors & their Relatives 1782158 2.77Others (Foreign Banks, Trusts & Foundations) 2000 0.00Total 64337807 100.00


7. Distribution of Shareholding as on 31-03-2012:Range of Holding of Shares

No. of Shareholders No. of SharesPhysical Demat Total % Physical Demat Total %

1 – 500 3661 7977 11638 94.98 408858 696315 1105173 1.72501 - 1000 23 234 257 2.10 17772 188706 206478 0.321001 - 2000 8 106 114 0.93 12400 165857 178257 0.282001 - 3000 1 32 33 0.27 2100 84985 87085 0.143001 - 4000 0 23 23 0.19 0 81109 81109 0.134001 - 5000 0 25 25 0.20 0 116074 116074 0.185001 - 10000 1 45 46 0.38 6992 334695 341687 0.53Above 10000 1 116 117 0.95 16000 62205944 62221944 96.71TOTAL 3695 8558 12253 100.00 464122 63873685 64337807 100.00

8. Stock Price Data (for the period April, 2011 to March, 2012)Year Month BSE High (`) BSE Low (`) NSE High (`) NSE Low (`)2011 April 548.00 509.00 548.00 511.002011 May 523.90 473.00 530.00 470.552011 June 530.00 449.00 530.00 480.052011 July 517.00 485.00 520.00 490.352011 August 509.00 461.00 523.65 460.002011 September 507.45 483.20 509.75 482.102011 October 509.35 455.00 499.60 454.002011 November 474.70 350.00 462.00 350.002011 December 395.00 305.00 389.00 318.902012 January 482.95 359.10 484.00 355.702012 February 504.95 466.10 514.00 464.002012 March 489.70 435.75 484.05 450.00

9. Dividend History:Type Financial Year Date of Declaration Dividend % Dividend (` Per share*)Final Dividend** 2011-12 29-09-2012 25 2.50Final Dividend 2010-11 30-09-2011 50 5.00Final Dividend 2009-10 30-12-2010 50 5.00Final Dividend 2008-09 30-09-2009 50 5.00Final Dividend 2007-08 30-09-2008 25 2.50Interim Dividend 2007-08 28-04-2008 25 2.501st Interim Dividend 2006-07 30-10-2006 20 2.002nd Interim Dividend 2006-07 15-03-2007 25 2.501st Interim Dividend 2005-06 27-10-2005 30 3.002nd Interim Dividend 2005-06 30-06-2006 15 1.501st Interim Dividend 2004-05 22-10-2004 25 2.502nd Interim Dividend 2004-05 30-04-2005 35 3.501st Interim Dividend 2003-04 20-10-2003 15 1.502nd Interim Dividend 2003-04 17-04-2004 10 1.00Final/Annual Dividend 2002-03 03-09-2003 12 1.20

* on the face value of `10/- per share fully paid-up** Subject to the approval of the shareholders in 22nd Annual General Meeting.



10. Stock Performance:The performance of the Company’s share relative to the BSE Sensitive Index and S&P CNX Nifty (on closing rates at the end of each month in respective stock exchange) considering 100 as the base is given in the Chart below:

11. Registrar & Share Transfer Agents:MCS LimitedF-65, Okhla Industrial Area, Phase-I,New Delhi – 110020Tel. : 011- 41406149, Fax : 011- 41709881

12. Share Transfer System:Share Transfer Committee is normally held every 15 days and approves the physical transfers received periodically. The Company is fine tuning its procedures to ensure transfer of Physical Shares within the prescribed period of 15 days of receipt of documents, if found in order or to be returned within 15 days. Share Transfer Agents have been authorized to sign the share certificates on behalf of the Company for expeditious disposal of transfer requests.

13. Dematerialization of Shares & Liquidity:As at 31-03-2012, 99.28% of equity capital was held in Electronic form with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). Normally, requests for dematerialization of shares are processed and confirmed within 15 days of receipt to NSDL and CDSL.

For guidance on depository services, shareholders may write to the Company.

14. Nomination Facility:Shareholders holding shares in physical form and desirous of making a nomination in respect of their holding in the Company, as permitted under section 109A of the Companies Act, 1956 are requested to submit to the Company the prescribed Form 2B for this purpose.

15. BANK DETAILS/ECS MANDATE:Shareholders holding shares in physical form are requested to notify/send the following to the Company to facilitate better services.

(i) any change in their address/bank details, and;

(ii) Particulars of their bank account, in case the same have not been sent earlier.

Payment of dividend through ECS minimizes the risk of loss/late delivery of dividend warrant. Therefore, it is in your interest to provide ECS mandate to the Company. Those holding Shares in physical form can also avail this facility. The ECS Mandate Form can be downloaded from Company’s Website.


Interested shareholders may send the filled-in ECS Mandate Form being sent with the Annual Report. Ensure to enclose a cancelled blank cheque of your bank account. Please check before hand that the concerned branch of your bank provides the ECS facility.

16. Address for Communication:Monnet House,11, Masjid Moth, Greater Kailash-II,New Delhi – 110 048Phone : +91 11 29218542 – 46Fax : +91 11 29218541e-mail : [email protected]

Disclaimer :The information furnished above is certified by Monnet Ispat & Energy Limited to be true, fair and accurate (except in respect of errors in or omissions from documents filed electronically that result solely from electronic transmission errors beyond our control and in respect of which we take corrective action as soon as it is reasonably practicable after becoming aware of the error or the omission). SEBI, the Stock Exchanges or the NIC do not take any responsibility for the accuracy, validity, consistency and integrity of the data entered and updated by it.

M.P. KharbandaCompany Secretary Monnet Ispat & Energy Limited



Certificate

Declaration by Chairman & Managing Director

Annexure - IV

To The Members ofMONNET ISPAT & ENERGY LIMITED,

We have examined the compliance of conditions of Corporate Governance procedures by MONNET ISPAT & ENERGY LIMITED, for the year ended on 31-03-2012, with the relevant records and documents maintained by the Company, as stipulated in clause 49 of the Listing Agreement of the said Company with stock exchange(s).

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For O.P. BAGLA & CO.,Chartered Accountants

Sd/-(Atul Bagla)

PartnerPlace: New Delhi M. No. 91885Date : 14-08-2012 Firm Regd. No. 000018N

It is hereby declared that all Board Members and senior management personnel have affirmed compliance with the Code of Conduct within 30 days for and from the beginning of current financial year.

Sd/-Place: New Delhi (Sandeep Jajodia)New Delhi : 14-08-2012 Chairman & Managing Director


Details of Directors seeking appointment / reappointment in 22nd Annual General Meeting(Pursuant to Clause 49 of the Listing Agreement)

Annexure - V

Name of Director Shri Amit Dixit Shri Vikram Deswal Shri N.C. Jha Shri Ajay RelanBrief Resume Mr. Amit Dixit is an M.B.A.

from Harvard Business School, a M.S. in Engineering from Stanford University where he was awarded John A. Blum fellowship, and B. Tech. from IIT-Bombay. Presently, he is Senior Managing Director of Private Equity at The Blackstone India Advisors.

Before joining Blackstone, Mr. Dixit was a Principal at Warburg Pincus for more than five years.

Shri Vikram Deswal is a Graduate from Indian Institute of Technology, Varanasi, is an MBA from IIM, Lucknow and from The Wharton School, University of Pennsylvania, U.S.A. He is Managing Partner and Chief Investment Officer at East Bridge Capital Management Limited, Boston, Massachusetts, USA. He was Vice President at JM Morgan Stanley, Principal; Director-India Investments at Highfields Capital Management.

Prior to that, Shri Deswal was Principal and Director of India Investments at Highfields Capital Management, LP, a large, multi-strategy hedge fund based in Boston, Massachusetts.

Mr. N.C. Jha retired as Chairman of Coal India Limited. He has also held the position of Director (Technical) in Coal India Limited He has done Master of Technology in Mining Engineering with 1st Class Mine Manager Certificate of Competency in coal.

Aged about 57 years Mr. Relan is an MBA from Indian Institute of Management, Ahmedabad. He led Citigroup’s Citi Ventures India as its Managing Director. After leaving Citibank, he floated CX Advisors Private Limited and is providing investment advisory services to private equity firms across the Globe.

Expertise in specific functional area

Mr. Amit Dixit is heading the Indian arm of private equity fund of Blackstone.

Investment Advisory and heading the India desk for U.S.A. investments in India.

Awarded National Geo Science Award for Mining Tech. in 2009 and eminent Engineering personality of 2011 by the Instt. Of Engineers India.

Investment & Equity.

List of Other Companies in which Directorship held (excluding foreign Companies, Private Limited Companies & Section 25 Companies)

1. Emcure Pharmaceuticals Limited

2. Nagarjuna Construction Company Limited

3. Monnet Power Company Limited

4. MB Power (Madhya Pradesh) Limited

5. Jagran Prakashan Limited6. Midday Infomedia Limited

NIL 1. M.P. Monnet Mining Company Limited – Managing Director

2. Urtan North Mining Company Limited

1. HT Media Limited

2. HT Media Ventures Limited

3. Thyrocare Technologies Limited

4. NTL Electronics Limited

Chairman/Member of the Committees of the Board of Directors of other Companies in which he is a Director (excluding foreign Companies, Private Limited Companies & Section 25 Companies)

1. Member of Audit Committee in Midday Infomedia Limited

2. Member of Audit Committee in MP Power (Madhya Pradesh) Limited

3. Member of Audit Committee in Emcure Pharmaceuticals Limited

4. Member of Audit Committee in Monnet Power Company Limited

NIL NIL 1. Chairman of Shareholders/Investors Grievance Committee in HT Media Limited

2. Member of Audit Committee in HT Media Limited

3. Member of Audit Committee in HT Media Ventures Limited

4. Member of Audit Committee in NTL Electronics Limited

Details of shareholding (both own or held by/for other persons on a beneficial basis), if any, in the Company

NIL NIL NIL NIL

StandaloneFinancials

To,The Members ofMONNET ISPAT & ENERGY LIMITED

We have audited the attached Balance Sheet of MONNET ISPAT & ENERGY LIMITED as at 31-03-2012 and also the Statement of Profit & Loss and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors’ Report) Order 2003 as amended by the Companies (Auditor’s Report) (Amendment) order 2004 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in paragraph 4 & 5 of the said order as far as applicable to the Company.

2. Further to our comments in the annexure referred to in paragraph 1 above, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief, were necessary for the purpose of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books.

c) The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the balance sheet, profit and loss account and Cash Flow statement dealt with by

this report comply with the applicable accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) On the basis of written representation received from the directors and taken on records by the Board of Directors, we report that, none of the director is disqualified as on 31-03-2012 from being appointed as Director u/s 274(1)(g) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Significant Accounting Policies and other Notes thereon, give the information as required by the Companies Act, 1956 in the manner so required and give true and fair view in conformity with the accounting principles generally accepted in India :-

i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31-03-2012.

ii. In the case of the Statement of Profit & Loss, of the PROFIT for the year ended on that date.

iii. In case of cash flow statement, of the cash flow of the Company for the year ended on that date.

For O.P. Bagla & Co.Chartered Accountants

(ATUL BAGLA)Place : New Delhi PartnerDated : 04-08-2012 M.No. 91885

Firm Regd. No. 000018N

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS’ REPORT ON ACCOUNTS FOR THE YEAR ENDED 31-03-2012

1. a) The Company has maintained proper records to show full particulars including quantitative details and situation of fixed assets.

b) As explained to us, major fixed assets have been physically verified by the management during the year. We have been informed that the discrepancies

Auditors’ Report


noticed on such verification as compared to book record were not material and have been properly dealt with in the books of account. In our opinion the frequency of verification is reasonable.

c) The Company has disposed off an insignificant part of fixed assets during the year, hence paragraph 4 (i) (c) of the said order is not applicable.

2. a) Physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores, spare parts and raw materials except ores & coal. We were informed that physical verification of the same was difficult due to its volume and loose nature.

b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of these stocks followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion the Company is maintaining proper records of inventories. The discrepancies noticed on such verification between the physical stocks and book records were not significant and the same have been properly dealt with in the books of account.

3. The Company has given loan to a Company covered in the registers maintained under section 301 of the Companies Act, 1956. The balance amount outstanding at the year end was `7496.20 Lac. The terms and conditions of the loan are not prima facie prejudicial to the interest of the Company. There are no overdue amounts outstanding at the year end regarding this loan.

4. According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from Companies, Firms or other Parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, paragraph 4 (iii) (e) to (g) of the order are not applicable.

5. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to

purchase of inventories, fixed assets and with regard to the sale of goods. During the course of audit, no major weakness has been noticed in the underlying internal control system.

6. a) In our opinion and according to information and explanations given to us, the transactions that needed to be entered in the register maintained under section 301 of the Companies Act, 1956 have been entered in the register.

b) As per information and explanations given to us, the aforesaid transactions have been made at prices which are reasonable having regard to the prevailing market price at the relevant time.

7. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

8. In our opinion and according to the information and explanations given to us, the Company has an adequate internal audit system commensurate with its size and nature of its business.

9. The Central Government has prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed such records and are of the opinion that prescribed accounts and records have been made and maintained.

10. a) As per information and explanations given to us, the Company has been regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess, Octroi, Entry Tax and other statutory dues with the appropriate authorities. There are no undisputed statutory dues at the year end outstanding for a period of more than six months from the date they become payable.

b) We have been informed that following disputed demands in respect of Income Tax, Excise Duty, Sales Tax and Entry Tax have not been deposited



on account of pending appeals.

S. No.

Nature of Demand

Unpaid Amount(` in Lac)

Forum where appeal is pending

1. Sales Tax 669.68 Deputy Commissioner of Sales Tax (Appeals)

2. Entry Tax 967.19 Deputy Commissioner of Sales Tax (Appeals)

3. Central Excise

727.28 Commissioner Appeals (Central Excise)

4. Central Excise

889.69 CESTAT

5. Income Tax

1993.79 Commissioner Income Tax (Appeals)

11. The Company does not have any accumulated losses at the end of the financial year. Further, there are no cash losses during the financial year under audit and in the immediately preceding financial year.

12. Based on our audit procedures and on the basis of information and explanations given to us by the management, we are of the opinion that there is no default in repayment of dues to the Financial Institution, Banks or Debenture holders as at the year end.

13. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Paragraph 4 (xii) of the order is not applicable.

14. According to information and explanations given to us, the Company has not given any guarantee for loans taken by others from Banks / Financial Institutions, terms and conditions whereof are prejudicial to the interest of the Company.

15. According to the information and explanations given to us, the term loans taken by the Company have been applied for the purposes for which the loans were obtained.

16. According to the information and explanations given to us, the funds raised on short term basis have not been utilized for long term investments.

17. In our opinion, and according to information and explanations given to us, proper records have been maintained of the transactions and contracts relating to investments in shares and other securities and debentures. These investments have been held by the Company, in its own name, except certain investments made under portfolio management schemes.

18. During the year, the Company has not made any preferential allotment of shares to parties or companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19. The Company has created security / charge in respect of debentures issued.

20. Since the Company has not raised money by way of Public Issue during the year, paragraph 4 (xx) of the order is not applicable.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that, no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended 31-03-2012.

22. Other clauses of the order are not applicable to the Company for the year under report.


(ATUL BAGLA)Place : New Delhi PartnerDated : 04-08-2012 M.No. 91885



Balance Sheet As at 31st March, 2012

(`)

Particulars Note As at31-03-2012

As at31-03-2011

EQUITY AND LIABILITIES Shareholders’ funds Share capital 2 643,550,484 643,550,484 Reserves and surplus 3 22,959,944,450 20,257,805,529

23,603,494,934 20,901,356,013 Non-current liabilities Long-term borrowings 4 28,904,573,539 16,373,823,811 Deferred Tax liabilities (Net) 5 1,504,990,403 1,412,382,095 Long-term provisions 6 62,378,973 33,620,688

30,471,942,915 17,819,826,594 Current liabilities Short-term Borrowings 7 9,439,327,926 9,689,748,666 Trade payables 8 611,826,835 1,223,573,776 Other current liabilities 9 4,776,578,632 1,770,110,205 Short-term provisions 10 186,466,429 373,875,039

15,014,199,822 13,057,307,686 Total 69,089,637,671 51,778,490,293 ASSETS Non-current assets Fixed assets Tangible assets 11 13,786,959,020 10,935,680,568 Intangible assets 12 538,467 1,451,304 Capital work-in-progress 20,219,299,785 10,653,294,699 Non-current investments 13 5,902,801,577 5,167,046,490 Long-term loans and advances 14 4,433,585,666 4,714,503,578 Other Non-current Assets 15 797,352,993 11,607,627

45,140,537,508 31,483,584,266 Current assets Current investments 16 10,259,283 333,044,638 Inventories 17 5,623,675,062 3,604,252,692 Trade receivables 18 1,788,204,768 1,897,967,790 Cash and bank balances 19 8,733,295,229 6,869,492,825 Short-term loans and advances 20 7,724,404,104 7,566,718,776 Other current assets 21 69,261,716 23,429,306

23,949,100,162 20,294,906,027 Total 69,089,637,671 51,778,490,293 Significant Accounting Policies 1

The accompanying notes form an integral part of these financial statements.In terms of our report of even date annexed

For O.P. BAGLA & CO.Chartered Accountants Sandeep Jajodia C.P. Baid Gopal TiwariAtul Bagla Chairman & Managing Director Dy. Mg. Director Director Partner

Place : New Delhi M.P. Kharbanda J.P. LathDated : 04-08-2012 Company Secretary Director






Statement of Profit and Loss For the year ending 31st March, 2012

(`)

Particulars Note Year ended 31-03-2012

Year ended 31-03-2011

Revenue:

Revenue from operations 22 20,600,641,206 16,948,779,766

Less:Excise Duty 1,626,794,978 1,218,286,484

18,973,846,228 15,730,493,282

Other income 23 631,536,037 293,217,202

Total Revenue 19,605,382,265 16,023,710,484

Expenses:

Cost of Materials Consumed 24 12,079,516,032 9,320,327,997

Purchases of Stock in Trade 0 11,243,217

Changes in inventories 25 (661,228,566) (436,952,935)

Employee benefits expense 26 945,379,802 746,286,380

Finance costs 27 867,022,483 309,952,049

Depreciation and amortization expense 11 & 12 741,067,850 738,638,106

Other Expenses 28 1,863,253,981 1,718,906,786

Total Expenses 15,835,011,582 12,408,401,600

Profit before exceptional and extraordinary items & Tax 3,770,370,683 3,615,308,884

Exceptional / Extraordinary items 0 0

Profit before Tax 3,770,370,683 3,615,308,884

Tax expense:

Current Tax

Current year 755,100,000 722,800,000

Earlier years (6,798,501) 7,008,239

Deferred Tax

Current year 92,608,308 93,049,100

Add : MAT Credit Entitlement utilized 40,855,526 (19,125,089)

Profit for the year 2,888,605,350 2,811,576,634

Earnings per equity share (Par value of `10/- each)

Basic 44.90 48.61

Diluted 43.48 46.91


1. SIGNIFICANT ACCOUNTING POLICIES

I. Basis of AccountingThe Company has prepared its financial statements in accordance with generally accepted accounting principles and also in accordance with the requirements of the Companies Act, 1956.

II. Income and ExpenditureAccounting of Income & Expenditure is done on accrual basis except interest on late payment received from debtors which is accounted for on receipt basis.

III. Salesa) Sales are shown inclusive of excise duty and

net of sales tax, rebates and discounts etc.

b) The Company has reduced interdivision sales from gross turnover as required by AS-9 of ICAI.

c) Sale of Certified Emission Reduction (CER) is recognized as income on the delivery of the CER to the customer’s account as evidenced by the receipt of confirmation of execution of delivery instructions.

IV. ClaimsRevenue in respect of claims is recognized only when the same is reasonably ascertained.

V. Fixed Assets & Depreciationa) Fixed assets are stated at their original cost of

acquisition inclusive of inward freight, duties and expenditure incurred in the acquisition, construction and installation.

b) Cenvat credit availed on capital equipments is accounted for by credit to respective fixed assets.

c) Incidental expenditure on Modifications, Expansions/New Projects (including interest and commitment charges on loans obtained for acquisition of capital assets) has been allocated to assets on pro-rata basis on completion of the Project.

d) Depreciation on fixed assets is provided on Straight Line Method (SLM) on pro-rata basis at the rates and in the manner prescribed in

Schedule XIV to the Companies Act, 1956 except on some Plant & Machinery of Sponge Iron Division, Unit-I, on which depreciation is being provided since commissioning of the unit on Written Down Value (WDV) method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on improvement to leasehold premises is provided based on tenure of lease.

VI. InventoriesInventories are valued on the following basis using FIFO method:

a) Finished Goods - at lower of cost or estimated realizable value.

b) Semi Finished Goods - at lower of cost or estimated realizable value.

c) Work-in-Process - at lower of cost or estimated realizable value

d) Raw Materials - at cost. However, in cases where the realizable value of the finished product falls below cost, materials are written down to net realizable value.

e) Stores and Spares - at cost

f) Finished Goods At Depot – at lower of cost or estimated realizable value (including excise duty & freight)

VII. Excise Duty- Cenvat credit, to the extent availed, is adjusted towards cost of materials.

VIII. Retirement BenefitsGratuity is accounted for on the basis of actuarial valuation as on the closing date.

IX. Contingent LiabilitiesContingent Liabilities are determined on the basis of available information and are disclosed by way of notes to the accounts.

X. Sundry DebtorsSundry Debtors are shown net of bills discounted. Interest on overdue bills is accounted for on receipt basis.

Notes on Accounts



XI. InvestmentsLong Term Investments are stated at cost. Provision for diminution is made only if such a decline is other than temporary. Short term investments are carried at lower of cost or quoted / fair value.

XII. Foreign Currency Transactionsa) Monetary Assets and liabilities in foreign

currency are revalued at the year end exchange rates. Exchange differences arising on such revaluation are recognized in Statement of Profit & Loss.

b) In case of forward exchange contracts, the difference between the forward rate and the exchange rate at the date of transaction is

recognized as income or expense over the life of the contract.

c) Exchange differences arising on reporting of long term foreign currency monetary items, in so far as they relate to acquisition of a depreciable capital asset are adjusted in the cost of the asset as per Companies (Accounting standards) (second amendment) rules, 2011 for additions after 01-04-2011.

XIII. Dividend is accounted for as per the date of declaration.

XIV. Unless specifically stated to be otherwise, these policies are consistently followed.


(`)

Particulars As at 31-03-2012

As at 31-03-2011

Note No. 2 : Share CapitalAUTHORIZED Equity Share Capital13,20,00,000 shares of par value of `10/- each (Previous year 13,20,00,000 shares of par value of `10/- each)

1,320,000,000 1,320,000,000

ISSUED, SUBSCRIBED AND FULLY PAID-UPEquity Share Capital6,43,37,807 shares of par value of 10/- each (Previous year 6,43,37,807 shares of par value of 10/- each)

643,378,070 643,378,070 Add Shares Forfeited Amount Originally Paid up 172,414 172,414 Total 643,550,484 643,550,484

a) During the year, the Company has not issued / bought back any shares. Reconciliation of shares outstanding at the beginning and at the end of the reporting period is given below:


As at 31-03-2011

Number of shares outstanding as at the beginning of the year 64,337,807 52,258,013 Shares allotted against warrants 0 4,700,000 Shares allotted on conversion of Convertible Instruments 0 2,657,255 Shares allotted pursuant to Merger 0 4,722,539 Number of shares outstanding as at the closing of the year 64,337,807 64,337,807

b) The holders of the equity shares are entitled to receive dividends as declared from time to time, and are entitled to voting rights proportionate to their share holding at the meetings of shareholders.

c) Following Shareholders hold equity shares more than 5% of the total equity shares of the Company at the end of the period :-

Name of Shareholder % of Shareholding 31-03-2012

% of Shareholding 31-3-2011

Pavitra Commercials Limited 6.35 7.20 Cecil Webber Engineering Limited 6.57 Below 5%Kamdhenu Enterprises Limited 10.50 Below 5%Udhyam Merchandise Private Limited 15.47 NilChaturanan Industries Limited Nil 10.98Nayan Traders Private Limited Nil 7.39Nikunj Jajodia Below 5% 5.13Blackstone GPV Capital Partners Mauritius 7.10 NilDeutsche Securities Mauritius Limited (FII Custodian) 8.23 9.12

d) The Company has issued the following shares for a consideration other than cash or bonus shares during the immediately preceding 5 years:

47,22,539 equity shares of `10 each were allotted as fully paid up for consideration other than cash pursuant to scheme of amalgamation of M/s.Mounteverest Trading & Investment Limited with the Company as per order dated 19-11-2010 passed by Honourable High Court of Chattisgarh.

Schedule



e) The Company has bought back 1288259 equity shares during the last five years. (`)


As at 31-03-2011

Note No. 3 : Reserves and SurplusCapital ReserveAs per last Balance Sheet 777,655,899 769,816,618 Add : Transferred on Forfeiture of Warrants 0 7,839,281 Securities Premium AccountAs per last Balance Sheet 7,508,927,344 7,508,927,344 Debenture Redemption ReserveAs per last Balance Sheet 544,275,014 229,248,961 Add : Transfer from Surplus 315,889,142 315,026,053 Capital Redemption Reserve As per last Balance Sheet 12,862,590 12,862,590 Capital Reconstruction ReserveAs per last Balance Sheet 196,801,760 196,801,760 Amalgamation ReserveAs per last Balance Sheet 33,050,090 33,050,090 General Reserve As per last Balance Sheet 1,301,073,546 1,019,073,546 Add : Transfer from Surplus 289,000,000 282,000,000 SurplusAs per last balance sheet 9,883,159,286 8,067,514,099 Add: Profit for the year from Statement of Profit & Loss 2,888,605,350 2,811,576,634 Less: Transfer to Debenture Redemption Reserve (315,889,142) (315,026,053)Transfer to general reserve (289,000,000) (282,000,000)Dividend paid (including taxes thereon) 0 (25,030,355)Proposed dividend (160,439,183) (321,689,035)Tax on proposed dividend (26,027,246) (52,186,004)

11,980,409,065 9,883,159,286 Total 22,959,944,450 20,257,805,529

The Company has proposed final dividend for the year 2011-12 @ `2.5 per equity share par value of `10/- each (previous year `5 per equity share)


(`)


As at 31-03-2011

Note No. 4 : Long-Term BorrowingsBonds/DebenturesSecured10.5% Non-Convertible Redeemable Debenture of `1000/- each redeemable at par.

800,000,000 800,000,000

10.5% Non-Convertible Redeemable Debenture of `1000/- each redeemable at par.

1,000,000,000 1,000,000,000


1,200,003,962 1,200,004,972

Unsecured0 % Fully Convertible Debenture of `1000/- each. 392,625,000 392,625,000 (For Terms of Redemption / Conversion, refer note 52)Term Loans From Banks / NBFCSecuredForeign currency loans 12,124,090,500 10,358,800,001 Rupee loans 11,887,854,077 2,622,393,838 UnsecuredRupee loans 1,500,000,000 0 Total 28,904,573,539 16,373,823,811

1 Term Loans, External Commercial Borrowings (ECB) and Non Convertible Debentures (NCD) from financial institutions / Banks, are secured by first charge on all immovable and movable assets (present & future) of the Company (subject to prior charges on movables in favour of working capital banks) ranking pari - passu with the charges created in favour of participating financial institutions. Some of the loans / facilities are further guaranteed by the Managing Director of the Company.

2 Vehicle Loans from Banks are secured by hypothecation of the respective assets financed.

3 The repayment terms and rate of interest of term loans are as under:

a) Rupee Term Loan for Steel Project :- The Company has an outstanding balance of `1094.99 Crore of Rupee term loan with interest band of 1.50% to 2.25% plus base rate. These loans are repayable in 26 variable quarterly installments commencing from Financial Year 14.

b) Rupee Term Loan for Power Project :- The Company has an outstanding balance of `93.75 Crore of Rupee term loan with interest band of 11.75% to 13% repayable by Financial Year 2016.

c) Foreign Currency Term Loan $ 192 Million : the loan is repayable in installments from Financial Year 2014-15 to Financial Year 2019-20 and carries interest rate of libor plus 4.25 to 4.6%.

d) Foreign Currency Term Loan $ 90 Million : the loan is repayable in Financial Year 2012-13 and Financial Year 2013-14 and carries interest rate of libor plus 1.90%.

e) Unsecured Term Loan of `150 Crore is repayable in monthly installments from Financial Year 2013-14 to Financial Year 2017-18.



(`)


As at 31-03-2011

Note No. 5 : Deferred Tax Liabilities (Net) Deferred Tax LiabilitiesDifference of book depreciation and Tax depreciation 1,511,252,280 1,415,725,707 Less: Deferred Tax assetsDisallowances u/s 43B of the Income Tax Act, 1961 6,261,877 3,343,612 Total 1,504,990,403 1,412,382,095

The net increase during the year in the deferred Tax liability has been debited to Statement of Profit & Loss

(`)


As at 31-03-2011

Note No. 6 : Long-term ProvisionsProvision for employee benefitsProvision for gratuity (Note no.46) 17,346,303 7,887,994 Provision for leave benefits (Note no.46) 45,032,670 25,732,694 Total 62,378,973 33,620,688

(`)


As at 31-03-2011

Note No. 7 : Short-term Borrowings Working Capital Facilities- From BanksSecured 1,892,165,733 1,792,508,011 Commercial Paper (Unsecured)From Banks 1,500,000,000 900,000,000 From Institutions & Others 1,000,000,000 0 Short Term LoansUnsecuredForeign currency loans 536,683,624 1,973,299,760 Rupee loans 4,510,478,569 5,023,940,895 Total 9,439,327,926 9,689,748,666

a) Working capital facilities from banks are secured by first charge on movable current assets and second charge on all immovable assets of the Company. These working capital loans are further guaranteed by Managing Director of the Company.

b) Out of the Short Term Rupee Loans, `249.94 Crore since repaid.

(`)


As at 31-03-2011

Note No. 8 : Trade PayablesTrade Payables - Micro, Small & Medium Enterprises 1,272,316 0 - Others 610,554,519 1,223,573,776 Total 611,826,835 1,223,573,776

Disclosure w.r.t. Micro and Small Enterprises as required by MSMED Act is made in Note No.42


(`)


As at 31-03-2011

Note No. 9 : Other Current Liabilities Current maturities of long term debts 2,621,041,339 655,033,000 Payable for Capital Expenditure 958,267,045 362,408,659 Interest accrued but not due on borrowings 135,718,643 71,066,019 Unpaid Dividends 10,556,381 10,792,379 Advances from customers and others 85,670,269 71,422,385 Provision for Expenses 498,511,215 287,768,461 Statutory dues 230,925,902 134,911,322 Security Deduction & Deposits 235,887,838 176,707,980 Total 4,776,578,632 1,770,110,205

(`)


As at 31-03-2011

Note No. 10 : Short-term Provisions Provision for proposed dividend 160,439,183 321,689,035 Provision for Tax on dividend 26,027,246 52,186,004 Total 186,466,429 373,875,039



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(`)


As at 31-03-2011

Note No. 14 : Long-term Loans and Advances (Unsecured Considered good, unless otherwise stated) Capital Advances 4,183,671,470 4,474,068,253 Security Deposits 249,914,196 240,435,325 Total 4,433,585,666 4,714,503,578

(`)


As at 31-03-2011

Note No. 15 : Other Non-current Assets (Unsecured Considered good, unless otherwise stated)Non-Current bank deposits 797,352,993 11,607,627 Total 797,352,993 11,607,627 Non current bank balances include:Deposits provided as collateral against credit facilities 74,710,600 11,607,627

(`)

Name of Scrip 31-03-2012 31-03-2011 No. of

Share/Units Face Value Per Share/

Unit

Amount No. of Share/Units

Face Value Per Share/

Unit

Amount

Note No. 16 : Current InvestmentsEquity Shares Through Portfolio 10,259,283 333,044,638 Management SchemesTOTAL 10,259,283 333,044,638 Quoted InvestmentsBook Value 10,259,283 333,044,638 Market Value 11,335,579 335,527,076

(`)


As at 31-03-2011

Note No. 17 : Inventories Raw Materials 3,383,542,008 2,081,649,018 Work-in-Process 35,274,926 27,049,893 Finished Goods 1,653,795,243 997,386,373 Stock In Trade 0 3,405,336 Stores and Spares 551,062,885 494,762,072 Total 5,623,675,062 3,604,252,692

a) Inventories include material in transit.b) Inventory items have been valued considering the significant accounting policy no. VI disclosed in Note No. 1 to these

financial statements.



(`)


As at 31-03-2011

Note No. 18 : Trade Receivables Debts outstanding for a period exceeding six months Unsecured, considered Good 373,131,160 345,472,992 Unsecured, considered doubtful 20,537,361 23,032,029 Less: Provision for bad & doubtful debts* 20,537,361 23,032,029

373,131,160 345,472,992 Other debts-Considered Good 1,415,073,608 1,552,494,798 Total 1,788,204,768 1,897,967,790 a) Trade receivables include amount due from Private Companies in which

Directors of the Company are Directors 26,311,886 7,635,446

(`)


As at 31-03-2011

Note No. 19 : Cash and Bank Balances Cash& Cash EquivalentsBalances with banks- in current accounts 3,058,555,335 811,488,082 Cheques & drafts on hand 101,065,782 123,202,917 Cash on hand 8,060,868 8,017,062 Others (stamps in hand) 5,705,800 5,705,800 Bank deposits with less than three months maturity 4,888,493,670 5,681,836,565

8,061,881,455 6,630,250,426 Other Bank BalancesBank deposits with more than three months maturity* 660,857,393 228,450,020 Balance in unpaid dividend accounts 10,556,381 10,792,379 Total 8,733,295,229 6,869,492,825 Deposits with banks include the following:Deposits provided as collateral against credit facilities 227,449,469 177,767,326


(`)


As at 31-03-2011

Note No. 20 : Short Term Loans and advances (Unsecured Considered good, unless otherwise stated) Loans To Subsidiaries 1,756,480,419 2,924,428,500 To others 371,458,053 354,063,852 Advances Recoverable In Cash Or Kind From Subsidiaries 783,507,764 614,895,683 From Others 3,769,156,222 2,912,367,105 Advances To employees 40,999,660 40,251,649 Prepaid Expenses 151,162,163 28,742,600 Balances with Excise Authorities 555,401,154 352,037,892 Advance Income Tax (Net of provision for tax) 194,425,313 197,262,613 MAT Credit Entitlement 101,813,356 142,668,882 Total 7,724,404,104 7,566,718,776 a) Due from Directors and Officers of the Company Directors 788,665 202,232 b) Advance to related parties include: Joint venture Companies 28,067,869 27,004,251

(`)


As at 31-03-2011

Note No. 21 : Other Current Assets Interest accrued :Investments 258,041 8,863,265 Term deposits 69,003,675 14,566,041 Total 69,261,716 23,429,306



(`)

Particulars Year Ended 31-03-2012

Year Ended 31-03-2011

Note No. 22 : Revenue from Operations Sale of ProductsFinished Goods 26,462,750,642 19,919,762,842 Traded Goods 0 11,956,529 Sale of Services- Job Work Income 15,075,000 116,981,438 Other operating incomeScrap Sales 31,180,883 35,454,653

26,509,006,525 20,084,155,462 Less : Inter Division Transfers 5,908,365,319 3,135,375,696 Total 20,600,641,206 16,948,779,766 Detail of Sales of Finished GoodsSponge Iron 16,650,137,193 12,402,915,050 M.S/S.S Products 2,478,667,557 1,006,537,178 Structure 2,822,103,979 1,319,964,653 Ferro Alloys 503,551,478 453,030,652 Coal 1,101,560,332 970,371,193 Power 2,841,883,751 3,759,410,505 Others 64,846,352 7,533,612

26,462,750,642 19,919,762,842

(`)



Note No. 23 : Other Income Interest IncomeFrom Bank Deposits 240,601,446 95,107,845 From Long Term Investments 18,055,696 15,308,136 Others 271,730,219 90,501,588 Dividend current investments 5,204,734 8,245,960 Non Current Investments 21,944,877 7,235,727 Net gain on sale of Investments 0 55,055,672 Rent Received 10,787,392 10,836,449 Insurance Claim Received 4,891,998 792,522 Exchange fluctuation 10,687,578 0 Profit on disposal of fixed assets 17,217,746 0 Other Miscellaneous Income 30,414,351 10,133,303 Total 631,536,037 293,217,202


(`)



Note No. 24 : Cost of Materials Consumed Inventories As Beginning The Year 2,081,649,018 1,113,979,502 Add: Purchases (Net) 18,747,301,863 13,049,410,219 Less Inventory At the end of Year 3,383,542,008 2,081,649,018

17,445,408,873 12,081,740,703 Less : Inter Division Transfers 5,365,892,841 2,761,412,706 Total 12,079,516,032 9,320,327,997 Detail of Materials ConsumedIron Ore 8,016,970,998 6,001,787,365 Coal 3,169,284,038 3,190,943,513 Magnese Ore 148,985,384 185,808,740 Billets 2,284,611,368 984,127,525 Ferro Alloys 100,523,500 23,442,678 Sponge Iron 1,932,998,147 752,870,418 Others 1,792,035,439 942,760,463

17,445,408,873 12,081,740,703

(`)



Note No. 25 : Changes in Inventories Opening Stock As on 01-04-2011Work-in-Process 27,049,894 17,231,037 Goods in Transit/Trading goods 3,405,336 3,405,336 Finished Goods 997,386,373 570,252,294 (A) 1,027,841,603 590,888,667 Closing Stock As on 31-03-2012Work-in-Process 35,274,926 27,049,893 Goods in Transit/Trading goods 0 3,405,336 Finished Goods 1,653,795,243 997,386,373 (B) 1,689,070,169 1,027,841,602

(661,228,566) (436,952,935)Detail of Finished Goods InventorySponge Iron & Char 1,176,397,929 712,010,208 M.S/S.S Products 137,459,738 77,997,059 Structure 216,503,790 60,519,936 Ferro Alloys 23,045,677 34,053,672 Coal 100,388,109 112,805,498 Total 1,653,795,243 997,386,373

(`)



Note No. 26 : Employee Benefits Expenses Salaries and wages 857,477,078 667,945,288 Contribution to provident and other funds 55,795,811 50,225,582 Staff welfare expenses 32,106,913 28,115,510 Total 945,379,802 746,286,380



(`)



Note No. 27 : Finance Costs Interest 859,915,129 306,360,418 Other Service Charges 7,107,354 3,591,631 Total 867,022,483 309,952,049

(`)



Note No. 28 : Other Expenses Material, Manufacturing and OthersStores and Spares Consumed 297,861,107 309,716,098 Excise Duty on Stocks 83,473,357 36,370,738 Power and Fuel 1,105,917,538 812,010,684 Less : Inter Division Transfers (542,472,474) (373,962,990)

944,779,527 784,134,530 Administration & Other Expenses Printing and Stationery 4,920,026 6,731,001 Rent 2,869,111 3,635,905 Rates & Taxes 1,375,272 3,738,421 Vehicle Expenses 46,597,904 56,022,588 Communication Expenses 9,297,987 9,368,325 Travelling & Conveyance 25,762,965 26,279,674 Insurance Charges 40,642,934 46,520,922 Legal & Professional Charges 53,111,189 47,541,120 Directors Sitting Fees 530,000 178,000 Auditors' Remuneration- As Audit Fees 2,500,000 2,000,000 - For Quarterly Review 400,000 422,060 - For Tax Matters 1,021,000 767,500 - For Certification & Other Matters 1,415,000 1,526,561 - Reimbursement of Expenses 482,776 311,647 Miscellaneous Expenses 114,295,475 83,636,913 Lease Rent & Hire Charges 9,478,730 10,712,047 Share Transfer Expenses 191,581 240,910 Internal Audit Fees & Expenses 3,543,777 3,438,636 Loss from Partnership Firm 355,395 964,861 Bank Charges 19,164,789 19,746,148 Exchange fluctuation 0 107,509,134 Provision For Doubtful Debts (2,494,674) 1,814,507 Loss on Sale of Fixed Assets 0 1,055,166 Distribution & Marketing Expenses 440,945,917 381,240,554 Loss on Sale of Investment 24,721,329 0

801,128,483 815,402,600 Repair & Maintenance Machinery 91,418,366 96,412,400 Building 15,165,459 14,358,463 Others 10,762,146 8,598,793

117,345,971 119,369,656 Total 1,863,253,981 1,718,906,786


(` in Lac)As at

31-03-2012As at

31-03-201129. Contingent Liabilities (excluding matters separately dealt with in other notes):Claims against the Company not acknowledged as debt- In respect of disputed Excise Demands 1616.97 815.33- in respect of disputed Sales Tax Demands 714.60 95.14- in respect of disputed Entry Tax Demands 1016.89 642.33- in respect of disputed Income Tax Demands 2908.60 2952.00- in respect of disputed Demands for water charges by Water Resources

Division.1075.44 402.44

- In respect of electricity Duty on generation of power 3525.09 1870.58- Other claims against the Company not acknowledged as debt. 1076.70 336.10

(` in Lac)As at

31-03-2012As at

31-03-201130. Commitmentsa. Estimated amount of contracts remaining to be executed on Capital Account

and not provided for (Net of advances)53940.32 46597.19

b. Letters of Credit opened in favour of inland/overseas suppliers (Net) 7785.18 7940.30

(`)As at

31-03-2012As at

31-03-201131. Salary includes following remuneration paid to DirectorsMr. Sandeep Jajodia (Managing Director)- Salary 30,000,000 24,000,000- Perquisites 3,684,685 2,949,922Mr. K.K. Khanna (Director)- Salary 3,437,400 2,970,000- Perquisites 39,000 39,000Mr. C. P. Baid (Dy. Managing Director)- Salary 11,450,196 4,445,789- Perquisites 661,200 272,363Mr. Gopal Tiwari (Director)- Consultancy 660,000 0

(` in Lac)As at

31-03-2012As at

31-03-201132. Guaranteesa. Counter guarantees issued in respect of guarantees issued by Company’s

bankers1101.72 1239.13

b. Guarantees issued on behalf of limited companies 22855.60 2393.00

Other Notes



33. The inventories are taken as per records duly certified by the Company. The same have been valued in accordance with Accounting Policies.

34.(` in Lac)

Particulars % 2011-2012 % 2010-2011Value of Imported & Indigenous Raw Material Consumed and the percentage of each to total consumption :-- Imported 0 0.00 0 0.00- Indigenous 100 120795.16 100 93203.28

35. To comply with the guidance note on “Accounting Treatment of Excise Duty” issued by The Institute of Chartered Accountants of India, excise duty amounting to `1592 Lac (Previous Year `758 Lac) has been included in the value of inventories as on 31-03-2012 and the corresponding amount of excise duty payable has been included in other liabilities. However, this has no impact on the Profit for the year.

36. Value of Imports on CIF basis(` in Lac)

Current Year Previous Year- Capital Goods including Spares etc. 14568.98 10180.15- Raw Material etc. 0.00 0.00

37. In the opinion of the Management, the Current Assets, Loans and Advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet except where stated otherwise.

38. Pre-operative Expenses capitalized as Capital Work in Progress during the year are as under:-(` in Lac)

Amount brought forward 39031.21Incurred During the YearAdministrative, Financial & Other Expenses 30032.71Allocated to Fixed Assets 9832.23Amount carried over 59231.69

(` in Lac)Current Year Previous Year

39. Expenditure in Foreign Currency- Traveling /Others 199.47 1370.18- Financial Charges 5082.08 1874.93

(` in Lac)Current Year Previous Year

40. Earning in Foreign CurrencyFOB Value of Exports (` in Lac) 9879.99 8131.19

41. Balance confirmations have not been received from number of parties showing debit/credit balances.


(` in Lac)2011-12 2010-11

42. Dues to Small & Micro Enterprises #: 1. Principal amount outstanding

2. Interest due on (1) above and the unpaid interest12.720.00

0.000.00

3. Interest paid on all delayed payments under MSMED Act 0.00 0.004. Payment made beyond the appointed date during the year 0.00 0.005. Interest due and payable for the period of delay other than (3) above 0.00 0.006. Interest accrued and remaining unpaid 0.00 0.007. Amount of further interest remaining due and payable in succeeding

years0.00 0.00

# The details of amounts outstanding to Micro, Small and Medium Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 are as per available information with the Company.

43. Rupee equivalent of export obligation to be completed by 20-03-2020 under EPCG Scheme as on 31-03-2012 is `20293.89 Lac (Previous year `26728.82 Lac).

44. No provision has been made for Cess on Power Generation levied by the State of Chhattisgarh amounting to `2732.93 Lac upto 31-03-2012 (`2364.99 Lac upto 31-03-2011). The High Court of Chhattisgarh, in its order dated 15-12- 2006 has set aside the demand of the State of Chhattisgarh, terming the levy as ‘unconstitutional’. However, the State Government has gone in appeal against the order of the High Court and the matter is pending before the Supreme Court.

45. As reported in earlier years, the Company had received risk purchase claims aggregating to `3505.90 Lac during earlier years. The Company has disputed the claims and believes that the claims are untenable. The matter has been referred to arbitration. Necessary adjustment, if any, shall be made on finalization of the matter. No fresh claims have been received in this regard during the year.

46. Retirement Benefits : Gratuity & Leave EncashmentThe following tables summarizes the components of the net employee benefit expenses recognized in the Statement of Profit & Loss and amount recognized in the balance sheet for gratuity & leave encashment:

(` in Lac)Reconciliation of opening and closing balances of the present value of the defined benefit obligation:

Gratuity For Year Ended Leave Encashment For Year Ended

31-03-2012 31-03-2011 31-03-2012 31-03-2011Obligations at period beginning 607 474 257 490Service Cost 136 107 173 89Interest on Defined benefit obligation 49 36 21 35Benefits settled -38 -44 -152 -105Curtailment Cost / (Credit) 0 0 -85 0Actuarial (gain)/loss 195 33 236 -252Obligations at period end 949 607 450 257Change in plan assets Plans assets at period beginning, at fair value 528 378 0 0Expected return on plan assets 42 30 0 0Actuarial gain/(loss) 14 -30 0 0Assets distributed on settlements 0 0 0 0Contributions 230 193 237 105Benefits settled -38 -44 -237 -105Plans assets at period end, at fair value 776 528 0 0



(` in Lac)Reconciliation of present value of the obligation and the fair value of the plan assets:

Gratuity For Year Ended Leave Encashment For Year Ended

31-03-2012 31-03-2011 31-03-2012 31-03-2011Closing PBO 949 607 450 257Closing Fair value of plan assets -776 528 0 0Closing Funded status -173 -79 -450 -257Unrecognized actuarial (gains) losses 0 0 0 0Unfunded net asset/(Liability) recognized in the balance sheet

-173 -79 -450 -257

Expenses recognized Service cost 136 107 173 89Interest cost 49 36 21 35Expected return on plan assets -42 -30 0 0Curtailment Cost / (Credit) 0 0 -85 0Actuarial (gain)/loss 181 63 236 -252Net cost 324 176 345 -127Assumptions Interest rate 8.50% 8.00% 8.70% 8.00%Discount factor 8.50% 8.00% 8.70% 8.00%Estimated rate of return on plan assets 8.5% 8.00% N.A. N.A.Salary increase 5% 5.00% 8% 5.00%Attrition rate 2% 1.00% 4% 1.00%Retirement age 65 65 65 65

47. Tax Expense is the aggregate of current year income tax, fringe benefit tax and deferred tax charged to the Profit and Loss Account for the year.

a) Current Year Charge: Income Tax provision of `7551 Lac has been made on current year profits as per provisions of the Income Tax Act.

Further, MAT credit entitlement of `408.55 Lac has been utilized.

b) Deferred Tax :The Company estimates the deferred tax charge using the applicable rate of taxation based on the impact of timing differences between financial statements and estimated taxable income for the current year. The Company has opted for tax exemption under section 80-IA of the Income Tax Act in respect of its Power Division. Pursuant to the clarification on AS22 of The Institute of Chartered Accountants of India, no Deferred Tax is provided on timing differences arising and reversing during the Tax Holiday period in respect of Assets of Power Division.

(` in Lac)

Particulars Opening balance as at 01-04-2011

Charge/ credit during the year

Closing as at 31-03-2012

Depreciation 14157.26 955.26 15112.52Adjustments u/s 43B -33.44 -29.18 -62.62Net 14123.82 926.08 15049.90

MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date.

48. Related Party DisclosuresIn accordance with the Accounting Standard (AS-18) on related party disclosure, where control exists and where key


management personnel are able to exercise significant influence and, where transactions have taken place during the year, alongwith description of relationship on identified, are given below:-

A. Relationships

Key Managerial Personnel : Shri Sandeep Jajodia (Chairman & Managing Director) Shri C. P. Baid (Dy. Managing Director) Shri K.K. Khanna (Executive Director) Enterprise where KMP has significant influence : A.P. Coal Washeries Private Limited Subsidiaries : Monnet Global Limited Monnet Overseas Limited Monnet Daniel Coal Washeries Private Limited Monnet Power Company Limited Monnet Cement Limited Monnet Enterprises PTE Limited Rameshwaram Steel & Power Private Limited Chattel Constructions Private Limited Chomal Exports Private Limited Subsidiary of Subsidiaries : Pt Monnet Global Monnet Enterprises DMCC Pt. Serwa Sembada Karya Bumi Monnet Global Liberia Limited Monnet Global Guinea S.A. Monnet Global Mali S.A. Joint Ventures : MP Monnet Mining Company Limited Mandakini Coal Company Limited Urtan North Mining Company Limited Monnet Ecomaister Enviro Private Limited

B. The following transactions were carried out with related parties in the ordinary course of business :-(` in Lac)

Key Managerial

Personnel

Subsidiaries Joint Ventures Enterprises where

KMP hold significant

influence31-03-2012 31-03-2011 31-03-2012 31-03-2011 31-03-2012 31-03-2011 31-03-2012 31-03-2011

Sale of goods / services

/ inputs

- - 2867.54 347.75 - - - -

Sale of Assets - - - 12.91 - - - -

Loans / Advances Given - - 9,756.56 12376.6 - - 275.00 -

Loans / Advances repaid - - 23,257.45 - - - 90.00 -

Interest Received - - 2,341.61 537.68 - - - -

Remuneration Paid 492.72 346.77 - - - - - -

Subscription to shares - - 6,080.82 247.53 695.70 2843.33 - -

Share Application Money

Pending Allotment

- - - - 10.38 253.67 - -

Purchase of raw material /

finished goods

- - 1,221.00 362.25 - - - -

Jobwork Charges Paid - - 669.07 388.65 - - - -

Dividend Received - - - - - - - -



C. Outstanding balance :-(` in Lac)

Description

Outstanding BalancesDebit

31-03-2012Debit

31-03-2011Subsidiaries 25399.88 35393.91Key Management Personnel 7.89 -Joint Ventures 280.68 253.67Enterprises where KMP hold significant influence 263.12 76.35

49. Segment ReportingAs per Accounting Standards (AS) 17 on “Segment Reporting”, segment information has been provided in the Notes to Consolidated Financial Statements.

50. The Company has entered into transactions for hedging, cost reduction and risk diversification strategies to manage its loan portfolio. The Company is accounting for profit / loss on such transactions on actual receipt / payment basis. Recognition of effect on these transactions in the accounts as per AS 30 issued by ICAI shall be adhered to when the said accounting standard becomes mandatory on notification by NACAS.

51. Interest in joint venture The Company has a 33.33% interest in the assets, liabilities, income and expenses of Mandakini Coal Company Limited

& Urtan North Mining Company Limited. It also has a 49% interest in the assets, liabilities, income and expenses of MP Monnet Mining Company Limited and 49.96% interest in the assets, liabilities, income and expenses of M/s. Monnet Ecomaister Enviro Private Limited All these Companies are incorporated in India, and involved in setting up and operation of coal mines except for M/s. Monnet Ecomaister Enviro Private Limited which is setting up a plant for manufacturing of PS Balls from slag generated from steel plant.

The Company’s share of the assets, liabilities, income and expenses of the jointly controlled entities as at 31-03-2012 are as follows:

(` in Lac)

Particulars

MP Monnet Mining Co.

Limited

Mandakini Coal Co.

Limited

Urtan North Mining Co.

Limited

Monnet

Ecomaister

Enviro

Private

Limited31-03-2012 31-03-2011 31-03-2012 31-03-2011 31-03-2012 31-03-2011 31-03-2012

I Assets

Fixed Assets/ Capital work in progress 85.70 81.01 630.20 479.92 286.15 282.24 5.29

Current assets and loans & advances

Inventories 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Sundry Debtors 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Cash and bank balances 4.05 7.63 182.24 154.12 4.41 1.31 215.50

Loans and advances 0.00 1.33 2883.98 2640.73 0.50 0.00 375.65

II Liabilities

Secured Loans 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Long Term Provisions 0.00 0.00 1.33 0.00 0.00 0.00 0.00

Unsecured Loans 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Current liabilities and provisions 8.39 8.19 15.86 9.93 1.93 0.02 3.38

III Income

Operating Revenue 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Other Income 0.00 0.00 4.04 3.56 0.00 0.00 9.89

IV Expenses

Expenses 16.63 0.00 18.65 21.09 0.00 0.00 13.03


52. Terms and conditions of issue and redemption of Debentures are as under:No of Debenture

Rate Amount(` in Lac)

Date of commencement of redemption

Non Convertible Debentures1200 12.50% 12000.00 Issued on 04-11-2008. Redeemable at par in the ratio of 35:35:30

at the end of 8th, 9th and 10th Year. 800 10.50% 8000.00 Issued on 30-01-2010. Redeemable at par on 30-01-2020.1000 10.50% 10000.00 Issued on 24-12-2009. Redeemable at par on 24-12-2019.Convertible Debentures1308750 0% 3926.25 Issued on 21-11-2009 Compulsorily convertible into 1.6 equity shares

against each debenture within a period of 18 months.

53. Aggregate capital expenditure as on 31-03-2012 for projects under construction to be capitalized to fixed assets is `2440.28 Crore and includes capital working progress `2021.92 Crore under the head non-current assets and the capital advances `418.36 Crore under the head long term loans advances.

54. Earning Per Share (EPS)–The numerators and denominators used to calculate Basic and Diluted Earning per share :Basic Earning Per Share

Year Ended on 31-03-2012


Profit attributable to the Equity Shareholders –(` in Lac) (A)

28886.05 28115.77

Basic Weighed average number of Equity Shares outstanding during the year (B)

64337807 57844450

Nominal value of Equity Shares (`) 10.00 10.00Basic Earning per share (`)- (A)/(B) 44.90 48.61

Diluted Earning Per Share



Profit attributable to the Equity Shareholders – as above (` in Lac) 28886.05 28115.77Interest Paid on Potential Equity Shares net of tax impact (` in Lac) 0 0Profit considered for Diluted E.P.S. (C) 28886.05 28115.77Basic Weighed average number of Equity Shares outstanding during the year as above 64337807 57844450Weighted Average Potential Equity Shares for the Year 2094000 2094000Total weighted average shares considered for Diluted E.P.S. (D) 66431807 59938450 Nominal value of Equity Shares (`) 10.00 10.00Diluted Earning per share (`)- (C)/(D) 43.48 46.91

55. Previous year figures have been regrouped or recasted wherever necessary.






NOTES:-1 The above Cash Flow statement has been prepared pursuant to clause No 32 of the listing Agreement with Stock Exchanges

and under the indirect method set out in AS-3 issued by the Institute of Chartered Accountants of India.2 Figures in brackets indicate cash outflow.3 Significant Accounting Policies and Notes on Accounts form an integral part of Cash Flow Statement.4 Previous year figures have been regrouped/reclassified to confirm to current year's classification.

Cash Flow Statement For the year ending 31st March, 2012

(`) Particulars Year ended

31-03-2012 Year ended

31-03-2011 A. Cash Flow from Operating Activities

Net Profit before tax and extra ordinary items 3,770,370,683 3,615,308,885 Adustment for :Depreciation 741,067,850 739,206,821 Profit/Loss on Sale of Fixed Assets (17,217,746) 1,055,166 Interest Received (530,387,361) (200,917,569)Interest Paid 859,915,129 306,360,418 Dividend Received (27,149,611) (15,481,688)

1,026,228,261 830,223,147 Operating Profit before Working Capital Facilities 4,796,598,944 4,445,532,032 Adjustment for :Trade & Other Receivable (1,074,446,374) (2,629,121,766)Inventories (2,019,422,370) (1,416,201,780)Trade Payable 2,423,479,771 569,233,922

(670,388,973) (3,476,089,624)Cash generated from operation 4,126,209,972 969,442,408 Tax Paid (745,464,199) (862,788,898)Dividend Paid (373,875,039) (359,491,707)

(1,119,339,238) (1,222,280,605)Net Cash Flow from operating activities 3,006,870,734 (252,838,197)

B. Cash Flow From Investing activitiesPurchase of fixed assets (3,610,319,680) (397,081,469)Sale of Fixed Assets 34,817,861 2,858,194 CWIP (9,564,718,984) (7,915,231,000)Purchase of Investments (Net) (412,969,732) (46,052,380)Buyback of Shares 0 0 Interest Received 530,387,361 200,917,569 Dividend Received 27,149,611 15,481,688

(12,995,653,563) (8,139,107,398)Net Cash used in investing activities (12,995,653,563) (8,139,107,398)C.Cash Flow from Financing ActivitiesProceed from Share Issue 0 98,764,550 Proceed from Share Warrants 0 0 Interest Paid (859,915,129) (306,360,418)Proceed from Share Premium / Other Reserves 0 1,659,448,892 Proceeds from borrowings 12,280,328,987 11,768,770,033

11,420,413,858 13,220,623,057 Net Cash used in financing activities 1,431,631,029 4,828,677,462 Cash & Cash equivalent Opening 6,630,250,426 2,052,422,993 Cash & Cash equivalent Closing 8,061,881,455 6,881,100,455





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We have audited the attached Consolidated Balance Sheet of MONNET ISPAT & ENERGY LIMITED as at 31-03-2012 and the Consolidated Statement of Profit & Loss for the Year Ended 31-03-2012, annexed thereto and cash flow statement for the year ended on that date. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management as well as evaluating the overall financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. We report that the consolidated financial statements have been prepared by the Company’s management in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements, AS 23, Accounting for Investments in Associates in Consolidated Financial Statements and AS 27, Financial Reporting of Interests in Joint Ventures, as notified by the Companies (Accounting Standard) Rules, 2006.

3. We did not audit the financial statements & five subsidiaries whose financial statement reflect total assets of `33959 Lac as at 31-03-2012 and total revenue of ̀ 656 Lac for year then ended. These financial

statements have been audited by other auditors whose report have been furnished to us and our opinion is based solely on the report of other auditors.

4. We further report that on the basis of the information and explanations given to us and on the basis of the separate audited financial statements of its subsidiaries, we are of the opinion that the said consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India :-

a) In the case of the Consolidated Balance Sheet of the consolidated state of affairs of the Group as at 31-03-2011.

b) In the case of Consolidated Statement of Profit & Loss, of the consolidated results of operations of the Group for the year on that date and;

c) In case of Consolidated Cash Flow Statement, of the consolidated cash flows of the Group for the year ended on that date.


(Atul Bagla)Place : New Delhi PartnerDated : 04-08-2012 M.No. 91885


Auditors’ Report On consolidated financial statement of Monnet Ispat and Energy Limited


Balance Sheet As at 31st March, 2012

(`)

Particulars Note As at31-03-2012

As at31-03-2011

Equity and LiabilitiesShareholders’ funds

Share capital 2 693,550,484 643,550,484 Reserves and surplus 3 23,584,300,714 20,762,827,224

24,277,851,198 21,406,377,708 Share Application Money Pending Allotment 50,401,130 25,305,853 Minority Interest 1,070,094,564 509,857,731 Non-current liabilities

Long-term borrowings 4 41,374,126,086 21,112,075,317 Deferred Tax liabilities (Net) 5 1,498,816,824 1,378,286,359 Long-term provisions 6 79,516,109 33,620,688

42,952,459,019 22,523,982,364 Current liabilities

Short-term Borrowings 7 11,494,347,156 9,889,126,085 Trade payables 8 903,772,865 1,278,321,870 Other current liabilities 9 7,752,600,566 2,382,328,699 Short-term provisions 10 186,467,010 373,875,039

20,337,187,597 13,923,651,693 Total 88,687,993,507 58,389,175,348 AssetsNon-current assets

Fixed assetsTangible assets 11 15,704,870,095 12,073,978,985 Intangible assets 12 1,288,684,359 1,289,863,016 Capital work-in-progress 36,479,308,319 14,812,245,918 Non-current investments 13 1,078,770,967 1,020,627,670 Long-term loans and advances 14 7,029,723,406 9,487,517,416 Other Non-current Assets 15 907,844,648 165,194,061

62,489,201,794 38,849,427,066 Current assets

Current investments 16 10,259,283 333,044,638 Inventories 17 5,914,639,022 3,753,336,056Trade receivables 18 2,989,555,329 2,463,335,315 Cash and bank balances 19 9,598,778,551 7,700,846,196 Short-term loans and advances 20 7,613,481,187 5,260,832,809 Other current assets 21 72,078,341 28,353,269

26,198,791,713 19,539,748,282Total 88,687,993,507 58,389,175.348






Statement of Profit and Loss For the year ending 31st March, 2012 (Consolidated)

(`)

Particulars Note Year ended 31-03-2012

Year ended 31-03-2011

Revenue:

Revenue from operations 22 21,535,114,508 17,488,751,363

Less:Excise Duty 1,647,837,272 1,233,209,145

19,887,277,236 16,255,542,218

Other income 23 466,574,717 273,779,135

Total Revenue 20,353,851,953 16,529,321,353

Expenses:

Cost of Materials Consumed 24 12,136,443,540 9,320,812,195

Purchases of Stock in Trade 0 11,243,217

Changes in inventories 25 (704,496,370) (392,155,382)

Employee benefits expense 26 1,084,942,846 831,950,845

Finance costs 27 1,004,277,462 349,252,036

Depreciation and amortization expense 11 & 12 814,703,741 791,268,601

Other Expenses 28 2,447,887,148 2,028,070,044

Total Expenses 16,783,758,368 12,940,441,556

Profit before exceptional and extraordinary items & Tax 3,570,093,585 3,588,879,797

Exceptional / Extraordinary items 0 0

Profit before Tax 3,570,093,585 3,588,879,797

Tax expense:

Current Tax

Current year 781,842,050 732,302,692

Earlier years (6,576,535) 7,147,272

Deferred Tax

Current year 120,530,464 93,592,381

Add : MAT Credit Entitlement utilized 40,855,526 (19,125,089)

Profit for the year 2,633,442,079 2,774,962,541

Less : Share Of Profit Transferred To Minority (21,135,283) (9,509,388)

Profit after Tax (after adjustment for Minority Interest) 2,612,306,797 2,765,453,153

Earnings per equity share (Par value of `10/- each)

Basic 40.60 47.81

Diluted 39.32 46.14

Significant Accounting Policies





1. SIGNIFICANT ACCOUNTING POLICIESI. Principles of Consolidation

The consolidated financial results of Monnet Ispat & Energy Limited (“the Company”) and its subsidiaries have been prepared on the following basis:-

a) The financial statements of the Company and its subsidiary companies have been consolidated on a line-by-line basis by adding together with the book value of like items of assets, liabilities and after eliminating the inter subsidiary balances in accordance with Accounting Standard (AS) 21-“ Consolidated Financial Statements” issued by the Institute of Chartered Accountants of India.

b) Interest in Joint Ventures have been accounted by using the proportionate consolidation method as per Accounting Standard (AS) – 27 – “Financial Reporting of Interest in Joint Ventures” issued by Companies (Accounting Standard) Rules, 2006.

c) As far as possible the consolidated financial statement have been prepared using uniform accounting policies for like transactions and in similar circumstances and are presented to the extent possible in the same manner as the Company’s separate financial statements.

d) In respect of foreign subsidiaries, being non- integral foreign operations, revenue items are consolidated at the average rate prevailing during the year. All assets and

Notes on Accountsliabilities are converted at rates prevailing at the year end. Any exchange difference arising on consolidation is recognized in the Exchange Fluctuation Reserve.

e) The difference between the cost of investment in the subsidiaries, over the net assets at the time of acquisition of shares in the subsidiaries is recognized in the financial statements as Goodwill or Capital Reserve as the case may be.

f) Minority Interest’s share of net profit of consolidated subsidiaries for the year is identified and adjusted against the income of the group in order to arrive at the net income attributable to shareholders of the Company.

g) Minority Interest’s share of net assets of consolidated subsidiaries is identified and presented in the consolidated balance sheet separate from liabilities and the equity of the Company’s shareholders.

h) Investment in Associate Companies is accounted under the equity method as per AS 23 – “Accounting for Investments in Associates in Consolidated Financial Statements” issued by Companies (Accounting Standard) Rules, 2006.

i) Particulars of subsidiaries and step subsidiaries considered in the consolidated financial statements are :



Name of the Subsidiary Main Activities Country of Incorporation

Proportion of ownership interest

SubsidiariesMonnet Overseas Limited Investments U.A.E. 100%Monnet Global Limited Investments U.A.E. 100%Monnet Enterprises Pte. Limited All kinds of business

activitiesSingapore 100%

Monnet Power Company Limited Power Generation India 90.16%Monnet Daniel Coal Washeries Private Limited Coal Washery India 51.64%Monnet Cement Limited Cement India 99.95%Rameshwaram Steel & Power Private Limited Manufacturing of

Sponge IronIndia 97%

Chomal Exports Private Limited Mining India 51%Step SubsidiariesPT Monnet Global Imports/Exports and

MiningIndonesia 99%

PT Sarwa Sembada Karya Bumi Mining Indonesia 95%Monnet Global (Liberia) Limited Mining / Exploration Liberia 100%Monnet Global Guinea – SAU Mining / Exploration Republic of Guinea 100%Monnet Global Mali - SA Mining / Exploration Mali 100%Monnet Enterprises DMCC Trading, Investments U.A.E. 100%

Apart from the above, the Company also holds 9999 equity shares of M/s. Chattel Constructions Private Limited, which corresponds to 99.99% holding. However, the accounts of the subsidiary have not been consolidated as the control is intended to be temporary and the subsidiary is held exclusively with a view to subsequent disposal.

j) Interest in joint venturesThe Company has a 33.33% interest in the assets, liabilities, income and expenses of Mandakini Coal Company Limited & Urtan North Mining Company Limited. It also has a 49% interest in the assets, liabilities, income and expenses of MP Monnet Mining Company Limited and 49.96% interest in the assets, liabilities, income and expenses of M/s. Monnet Ecomaister Enviro Private Limited All these Companies are incorporated in India, and involved in setting up and operation of coal mines except for M/s. Monnet Ecomaister Enviro Private Limited which is setting up a plant for manufacturing of PS Balls from slag generated from steel plant.

II. The goodwill recorded in these Consolidated Financial Statements has not been amortized, but instead

evaluated for impairment. The group evaluates the carrying amounts of its goodwill whenever events or changes in circumstances indicate that its carrying amount may be impaired, for diminution other than temporary.

III. Investment other than in subsidiaries, joint ventures and associates have been accounted as per Accounting Standard (AS) 13 on “Accounting for Investments”.

IV. Other Significant Accounting PoliciesThese are set out under “Significant Accounting Policies” as given in the Standalone Financial Statements of Monnet Ispat & Energy Limited.


(`)


As at 31-03-2011

Note No. 2 : Share CapitalAUTHORIZED Equity Share Capital13,20,00,000 shares of par value of `10/- each (Previous year 13,20,00,000 shares of par value of `10/- each)

1,320,000,000 1,320,000,000

Preference Share Capital5,00,000 (Previous Year 5,00,000) 0.001% compulsorily convertible preference shares (CCPS) of par value of `100/- each

50,000,000

50,000,000 ISSUED, SUBSCRIBED AND FULLY PAID-UPEquity Share Capital6,43,37,807 shares of par value of 10/- each (Previous year 6,43,37,807 shares of par value of 10/- each)

643,378,070 643,378,070

Add Shares Forfeited Amount Originally Paid up 172,414 172,414 Total 643,550,484 643,550,484 Preference Share Capital 5,00,000 (Previous Year 5,00,000) 0.001% compulsorily convertible preference shares (CCPS) of par value of `100/- each 50,000,000 0Total 693,550,484 643,550,484

a) During the year, the Company has not issued / bought back any equity shares. Reconciliation of shares outstanding at the beginning and at the end of the reporting period is given below:


As at 31-03-2011

Number of shares outstanding as at the beginning of the year 64,337,807 52,258,013 Shares allotted against warrants 0 4,700,000 Shares allotted on conversion of Convertible Instruments 0 2,657,255 Shares allotted pursuant to Merger 0 4,722,539 Number of shares outstanding as at the closing of the year 64,337,807 64,337,807

Reconciliation of preference shares outstanding at the beginning and at the end of the reporting period is given below:


As at 31-03-2011

Number of shares outstanding as at the beginning of the year 0 0 Shares allotted during the year 500,000 0 Number of shares outstanding as at the closing of the year 500,000 0

b) (i) The holders of the equity shares are entitled to receive dividends as declared from time to time, and are entitled to voting rights proportionate to their share holding at the meetings of shareholders.

(ii) Preference shares- Terms and conditions of issue: The CCPS are carrying dividend @ 0.001%. Each holder of CCPS is entitled to vote in meetings of the Company only on resolutions which directly affect the rights attached to CCPS. Each CCPS can be converted in to fully paid up equity shares of the Company after 15 years of date of issue subject to maximum tenure of 20 years from the date of issue. Alternatively CCPS can be converted in the events of (i) Occurrence of IPO of the Company (ii) exit of investor from the Company. Each CCPS is convertible into 3.37 equity shares of the Company.



c) Following share holders held more than 5% shares in the Company as at the end of the year:

Name of Shareholder % of Shareholding 31-03-2012

% of Shareholding 31-03-2011

EQUITYPavitra Commercials Limited 6.35 7.20 Cecil Webber Engineering Limited 6.57 Below 5%Kamdhenu Enterprises Limited 10.50 Below 5%Udhyam Merchandise Private Limited 15.47 NilBlackstone GPV Capital Partners Mauritius Nil 10.98Chaturanan Industries Limited Nil 7.39Nayan Traders Private Limited Below 5% 5.13Nikunj Jajodia 7.10 NilDeutsche Securities Mauritius Limited 8.23 9.12PREFERENCEBlackstone FP Capital Partners (MAURITIUS) V Limited 100 Nil

d) The Company has issued the following shares for a consideration other than cash or bonus shares during the immediately preceding 5 years:

47,22,539 equity shares of `10 each were allotted as fully paid up for consideration other than cash pursuant to scheme of amalgamation of M/s.Mounteverest Trading & Investment Limited with the Company as per order dated 19-11-2010 passed by Honourable High Court of Chattisgarh.

e) The Company has bought back 1288259 equity shares during the last five years. (`)


As at 31-03-2011

Note No. 3 : Reserves and SurplusCapital ReserveAs per last Balance Sheet 777,655,899 769,816,618 Add : Transferred on Forfeiture of Warrants 0 7,839,281 Securities Premium AccountAs per last Balance Sheet 8,125,461,178 5,606,955,427 Add: Transferred During The Year 577,587,221 2,518,505,751 Debenture Redemption ReserveAs per last Balance Sheet 544,275,014 229,248,961 Add : Transfer from Surplus 315,889,142 315,026,053 Capital Redemption Reserve As per last Balance Sheet 12,862,590 12,862,590 Capital Reconstruction ReserveAs per last Balance Sheet 196,801,760 196,801,760 Exchange Fluctuation ReserveAs per last Balance Sheet 59,581,744 63,295,081 Add : For the year (181,953,518) (3,713,337)Amalgamation ReserveAs per last Balance Sheet 33,050,090 33,050,090 General Reserve As per last Balance Sheet 1,301,073,546 1,019,073,546 Add : Transfer from Surplus 289,000,000 282,000,000 SurplusAs per last balance sheet 9,712,065,403 7,942,543,697 Add: Profit for the year from Statement of Profit & Loss 2,612,306,797 2,765,453,153 Less: Transfer to Debenture Redemption Reserve (315,889,142) (315,026,053) Transfer to general reserve (289,000,000) (282,000,000) Dividend paid (including taxes thereon) 0 (25,030,355) Proposed dividend (160,439,683) (321,689,035) Tax on proposed dividend (26,027,327) (52,186,004)

11,533,016,048 9,712,065,403 Total 23,584,300,714 20,762,827,224


The Company has proposed final dividend for the year 2011-12 @ `2.5 per equity share par value of `10/- each (previous year `5 per equity share)

(`)


As at 31-03-2011

Note No. 4 : Long-Term BorrowingsBonds/DebenturesSecured10.5% Non-Convertible Redeemable Debenture of `1000/- each redeemable at par.

800,000,000 800,000,000


1,000,000,000 1,000,000,000


1,200,003,962 1,200,004,976

Unsecured0 % Fully Convertible Debenture of `1000/- each. 392,625,000 392,625,000 (For Terms of Redemption / Conversion, refer note 47)Term Loans From Banks / NBFC and FlsSecuredForeign currency loans 15,039,881,000 10,358,800,001 Rupee loans 21,441,616,124 6,944,362,971 UnsecuredRupee loans 1,500,000,000 416,282,369 Total 41,374,126,086 21,112,075,317

1 Term Loans, External Commercial Borrowings (ECB) and Non Convertible Debentures (NCD) from financial institutions / Banks, are secured by first charge on all immovable and movable assets (present & future) of the Company (subject to prior charges on movables in favour of working capital banks) ranking pari - passu with the charges created in favour of participating financial institutions. Some of the loans / facilities are further guaranteed by the Directors of the Company.

2 Vehicle Loans from Banks are secured by hypothecation of the respective assets financed.

3 The repayment terms and rate of interest of term loans are as under:

a) Rupee Term Loan for Steel Project :- The Company has an outstanding balance of `1094.99 Crore of Rupee term loan with interest band of 1.50% to 2.25% plus base rate. These loans are repayable in 26 variable quarterly installments commencing from Financial Year 14.

b) Rupee Term Loan for Power Project :- The Company has an outstanding balance of `93.75 Crore of Rupee term loan with interest band of 11.75% to 13% repayable by Financial Year 2016.

c) Rupee Term Loan - Rameshwaram Steel & Power Limited (`7.41 Crore) - Repayable in 84 quarterly installments upto July, 2014. Interest band of 14.5% to 17% during the year.

d) Rupee Term Loan - Monnet Power Co.Limited (849.42 Crore) : The term loans are repayable in equal quarterly installments as per the terms of the respective agreements over a period of 10 years after a moratorium period of one year from the scheduled COD.The rate of interest of all the consortium bankers are linked to their respective base rates and are aligned to 11.50% at the time of signing of CLRA. Thereafter the rate of interest for all participating lenders has changed according to the change in base rate of respective lender.

e) Foreign Currency Term Loan $ 192 Million : the loan is repayable in installments from Financial Year 2014-15 to Financial Year 2019-20 and carries interest rate of libor plus 4.25 to 4.6%.

f) Foreign Currency Term Loan $ 90 Million : the loan is repayable in Financial Year 2012-13 and Financial Year 2013-14 and carries interest rate of libor plus 1.90%.



g) Foreign Currency Term Loan - Monnet Power Co. Limited ($ 37 million) : The loan carries rate of interest of 6 month LIBOR plus 440 bsp on 360 days basis. The loan is repayable in 10 semi annual unequal installments after a moratorium period of three years from the scheduled COD.

h) Foreign Currency Term Loan $ 40 Million - Monnet Global : the loan is repayable in Financial Year 2013-14 and Financial Year 2014-15 and carries interest rate of libor plus 3.5%.

i) Unsecured Term Loan of `150 Crore is repayable in monthly installments from Financial Year 2013-14 to Financial Year 2017-18

j) Unsecured Term Loan of `98.54 Crore - Monnet Power Co. Limited-The loans are repayable in equal quarterly installments as per the terms of the respective agreements over a period of 11 years after a moratorium period of one year from the scheduled COD of the project and carry an interest rate which is higher by 2% as compared to other term loans from banks as mentioned in point no. d above.

(`)


As at 31-03-2011

Note No. 5 : Deferred Tax Liabilities (Net) Deferred Tax LiabilitiesDifference of book depreciation and Tax depreciation 1,616,429,700 1,479,858,359 Less: Deferred Tax assetsDisallowances u/s 43B of the Income Tax Act, 1961 6,261,877 3,344,000 Brought Forward Losses 111,350,999 98,228,000 Total 1,498,816,824 1,378,286,359

The net increase during the year in the deferred Tax liability has been debited to Statement of Profit & Loss

(`)


As at 31-03-2011

Note No. 6 : Long-term ProvisionsProvision for employee benefitsProvision for gratuity (Note no.46) 25,733,503 7,887,994 Provision for leave benefits (Note no.46) 53,782,606 25,732,694 Total 79,516,109 33,620,688

(`)


As at 31-03-2011

Note No. 7 : Short-term Borrowings Working Capital Facilities- From BanksSecured 1,952,207,394 1,895,946,666 Commercial Paper (Unsecured)From Banks 1,500,000,000 900,000,000 From Institutions & Others 1,000,000,000 - Short Term LoansUnsecuredForeign currency loans 536,683,624 1,973,299,760 Rupee loans 5,410,005,480 5,023,940,895 Loans from other bodies corporateUnsecured 1,095,450,658 95,938,764 Total 11,494,347,156 9,889,126,085


a) Working capital facilities from banks are secured by first charge on movable current assets and second charge on all immovable assets of the Company. These working capital loans are further guaranteed by Managing Director of the Company.

b) Out of the Short Term Rupee Loans, `249.94 Crore since repaid.

(`)


As at 31-03-2011

Note No. 8 : Trade PayablesTrade Payables - Micro, Small & Medium Enterprises 1,272,316 0 - Others 902,500,550 1,278,321,870 Total 903,772,865 1,278,321,870

Disclosure w.r.t. Micro and Small Enterprises as required by MSMED Act is made in Note No.38

(`)


As at 31-03-2011

Note No. 9 : Other Current Liabilities Current maturities of long term debts 4,673,696,722 959,135,247 Payable for Capital Expenditure 972,142,173 379,079,546 Interest accrued but not due on borrowings 167,162,189 71,743,110 Interest accrued and due on borrowings 142,626,619 0 Unpaid Dividends 10,556,381 10,792,379 Advances from customers and others 90,620,185 74,256,271 Provision for Expenses 1,039,377,315 476,621,360 Statutory dues 372,869,919 233,990,968 Security Deduction & Deposits 283,549,063 176,709,818 Total 7,752,600,566 2,382,328,699

(`)


As at 31-03-2011

Note No. 10 : Short-term Provisions Provision for proposed dividend 160,439,764 321,689,035 Provision for Tax on dividend 26,027,246 52,186,004 Total 186,467,010 373,875,039



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(`)


As at 31-03-2011

Note No. 14 : Long-term Loans and Advances (Unsecured Considered good, unless otherwise stated)Capital Advances- Secured 2,055,916,979 3,533,800,156 - Unsecured 4,595,227,847 5,581,220,906 Security Deposits 378,578,580 372,496,354 Total 7,029,723,406 9,487,517,416

(`)


As at 31-03-2011

Note No. 15 : Other Non-current Assets (Unsecured Considered good, unless otherwise stated)Non-Current bank deposits 907,844,648 165,194,061 Total 907,844,648 165,194,061 Non current bank balances include:Pledged with banks as margin against credit facilities 185,202,255 165,194,061

(`)

Name of Scrip 31-03-2012 31-03-2011 No. of

Share/Units Face Value Per Share/

Unit

Amount No. of Share/Units

Face Value Per Share/

Unit

Amount

Note No. 16 : Current InvestmentsEquity Shares Through Portfolio 10,259,283 333,044,638 Management SchemesTOTAL 10,259,283 333,044,638 Quoted InvestmentsBook Value 10,259,283 333,044,638 Market Value 11,335,579 335,527,076

(`)


As at 31-03-2011

Note No. 17 : InventoriesRaw Materials 3,543,143,306 2,157,589,193 Work-in-Process 36,388,466 27,049,894Stock in Trade 0 3,405,336 Finished Goods 1,730,545,243 1,031,982,110Stores and Spares 604,562,006 533,309,523 Total 5,914,639,022 3,753,336,056

a) Inventories include material in transit.b) Inventory items have been valued considering the significant accounting policy no. VI disclosed in Note No. 1 to these

financial statements.



(`)


As at 31-03-2011

Note No. 18 : Trade Receivables Debts outstanding for a period exceeding six months Unsecured, considered Good 1,165,467,826 641,708,415 Unsecured, considered doubtful 20,537,361 24,536,538 Less: Provision for bad & doubtful debts* 20,537,361 24,536,538

1,165,467,826 641,708,415 Other debts-Considered Good 1,824,087,503 1,821,626,900 Total 2,989,555,329 2,463,335,315 a) Trade receivables include amount due from Private Companies in which

Directors of the Company are Directors 26,311,886 7,635,446

(`)


As at 31-03-2011

Note No. 19 : Cash and Bank Balances Cash& Cash EquivalentsBalances with banks- in current accounts 3,735,475,720 1,171,050,856 Cheques & drafts on hand 105,274,219 576,499,610 Cash on hand 12,687,652 11,010,965 Others (stamps in hand) 5,705,800 5,705,800 Bank deposits with less than three months maturity 4,909,976,893 5,697,336,566

8,769,120,285 7,461,603,797 Other Bank BalancesBank deposits with more than three months maturity* 819,101,886 228,450,020 Balance in unpaid dividend accounts 10,556,381 10,792,379 Total 9,598,778,551 7,700,846,196 Deposits with banks include the following:Deposits provided as collateral against credit facilities 282,193,544 177,767,326


(`)


As at 31-03-2011

Note No. 20 : Short Term Loans and advances (Unsecured Considered good, unless otherwise stated) Loans To others 371,458,053 354,063,852 Advances To employees 61,751,586 59,763,588 Advances recoverable in cash or kind 6,083,412,504 4,057,290,216 Prepaid Expenses 220,088,984 76,849,534 Balances with Excise Authorities 585,143,721 357,591,709 Advance Income Tax (Net of provision for tax) 189,812,983 212,605,028 MAT Credit Entitlement 101,813,356 142,668,882 Total 7,613,481,187 5,260,832,809 a) Due from Directors and Officers of the Company Directors 788,665 202,232

(`)


As at 31-03-2011

Note No. 21 : Other Current Assets Interest accrued :Investments 258,041 8,863,265 Term deposits 71,820,300 19,490,004 Total 72,078,341 28,353,269

(`)



Note No. 22 : Revenue from Operations Sale of ProductsFinished Goods 26,910,681,733 20,063,857,334 Traded Goods 0 11,956,529 Sale of Services- Job Work Income 81,982,300 155,846,138 Other operating incomeCoal Beneficiation Charges 423,948,284 357,012,405 Scrap Sales 31,180,883 35,454,653

27,447,793,200 20,624,127,059 Less : Inter Division Transfers 5,912,678,692 3,135,375,696 Total 21,535,114,508 17,488,751,363 Detail of Sales of Finished GoodsSponge Iron 16,863,349,808 12,488,631,926 M.S/S.S Products 2,478,667,557 1,006,537,178 Structure 2,822,103,979 1,319,964,653 Ferro Alloys 503,551,478 453,030,652 Coal 1,302,358,240 1,028,748,809 Power 2,875,804,319 3,759,410,505 Others 64,846,352 7,533,612

26,910,681,733 20,063,857,334



(`)



Note No. 23 : Other Income Interest IncomeFrom Bank Deposits 267,295,297 107,315,909 From Long Term Investments 18,055,696 15,308,136 Others 38,196,358 36,856,021 Dividend Current Investments 34,733,919 23,330,740 Non Current Investments 21,944,877 7,235,728 Net gain on sale of Investments 0 55,055,672 Rent Received 17,261,412 11,016,449 Insurance Claim Received 4,891,998 792,522 Exchange fluctuation 10,667,939 0 Profit on disposal of fixed assets 20,325,977 0 Other Miscellaneous Income 33,201,244 16,867,958 Total 466,574,717 273,779,135

(`)



Note No. 24 : Cost of Materials Consumed Inventories As Beginning The Year 2,157,589,192 1,219,508,094 Add: Purchases (Net) 18,887,890,495 13,020,305,999 Less Inventory At the end of Year 3,543,143,306 2,157,589,192

17,502,336,381 12,082,224,901 Less : Inter Division Transfers 5,365,892,841 2,761,412,706 Total 12,136,443,540 9,320,812,195 Detail of Materials ConsumedIron Ore 8,098,727,877 5,970,706,327 Coal 3,137,061,434 3,219,853,683 Magnese Ore 148,985,384 185,808,740 Billets 2,284,611,368 984,127,525 Ferro Alloys 100,523,500 23,442,678 Sponge Iron 1,932,998,147 752,870,418 Others 1,799,428,672 945,415,529

17,502,336,381 12,082,224,901


(`)



Note No. 25 : Changes in Inventories Opening Stock As on 01-04-2011Work-in-Process 27,049,894 17,993,129 Goods in Transit/Trading goods 3,405,336 3,405,336 Finished Goods 1,031,982,110 648,883,493 (A) 1,062,437,340 670,281,958 Closing Stock As on 31-03-2012Work-in-Process 36,388,466 27,049,894 Goods in Transit/Trading goods 0 3,405,336 Finished Goods 1,730,545,244 1,031,982,110 (B) 1,766,933,710 1,062,437,340 Total (704,496,370) (392,155,382)Detail of Finished Goods InventorySponge Iron 1,239,235,297 730,122,645 M.S/S.S Products 137,459,738 77,997,059 Structure 216,503,790 60,519,936 Ferro Alloys 23,045,677 34,053,672 Coal 114,300,741 129,288,798 Total 1,730,545,243 1,031,982,110

(`)



Note No. 26 : Employee Benefits Expenses Salaries and wages 990,682,150 747,796,189 Contribution to provident and other funds 60,091,217 54,655,271 Staff welfare expenses 34,169,480 29,499,385 Total 1,084,942,846 831,950,845

(`)



Note No. 27 : Finance Costs Interest 891,722,910 345,660,405 Other Service Charges 112,554,552 3,591,631 Total 1,004,277,462 349,252,036



(`)



Note No. 28 : Other Expenses Material, Manufacturing and Others

Stores and Spares Consumed 360,185,530 349,425,545 Power and Fuel 1,141,742,791 833,865,690 Coal Handling & Washing Charges 404,598,957 188,657,456 Excise Duty on Stocks 88,694,321 31,781,923 Less : Inter Division Transfers (546,785,847) (373,962,990)

1,448,435,752 1,029,767,624 Administration & Other Expenses

Printing and Stationery 5,821,332 7,807,605 Rent 9,095,382 9,996,868 Rates & Taxes 5,710,214 5,269,241 Vehicle Expenses 55,632,001 62,815,484 Communication Expenses 12,137,007 11,331,789 Travelling & Conveyance 38,182,727 35,995,515 Insurance Charges 42,792,255 48,508,302 Legal & Professional Charges 73,507,632 53,109,368 Directors Sitting Fees 811,452 212,000 Auditors' Remuneration- As Audit Fees 3,028,627 3,070,273 - For Quarterly Review 400,000 422,060 - For Tax Matters 1,051,000 872,069 - For Certification & Other Matters 1,477,608 1,537,077 - Reimbursement of Expenses 485,769 370,155 Miscellaneous Expenses 123,449,697 88,121,765 Lease Rent & Hire Charges 9,478,730 12,871,511 Share Transfer Expenses 191,581 240,910 Internal Audit Fees & Expenses 3,783,777 3,744,816 Loss from Partnership Firm 355,395 964,861 Bank Charges 20,991,356 21,005,939 Exchange Fluctuation 0 107,545,728 Provision For Doubtful Debts (2,494,674) 1,814,507 Loss on Sale of Fixed Assets 0 1,287,254 Distribution & Marketing Expenses 444,142,958 385,950,583 Loss on Sale of Investment 24,721,329 0 Amount transferred from preoperative expenses 0 6,266,379 Miscellaneous Expenditure w.off 2,703,683 506,939

877,456,837 871,638,998 Repair & Maintenance

Machinery 93,739,740 100,713,443 Building 16,334,401 16,517,790 Others 11,920,418 9,432,189

121,994,559 126,663,422 Total 2,447,887,148 2,028,070,044


(` in Lac)As at

31-03-2012As at

31-03-201129. Contingent Liabilities (excluding matters separately dealt with in other notes):Claims against the Company not acknowledged as debt- In respect of disputed Excise Demands 1899.97 815.33- in respect of disputed Sales Tax Demands 714.60 95.14- in respect of disputed Entry Tax Demands 2531.66 1074.28- in respect of disputed Income Tax Demands 2908.60 2952.00- in respect of disputed Demands for water charges by Water Resources

Division.1075.44 402.44

- In respect of electricity Duty on generation of power 3525.09 1870.58- Other claims against the Company not acknowledged as debt. 1144.13 403.53

(` in Lac)As at

31-03-2012As at

31-03-201130. Commitmentsa. Estimated amount of contracts remaining to be executed on Capital Account

and not provided for (Net of advances)338137.13 378522.74

b. Letters of Credit opened in favour of inland/overseas suppliers (Net) 8321.78 9840.12

(`)As at

31-03-2012As at

31-03-201131. Salary includes following remuneration paid to DirectorsMr. Sandeep Jajodia (Managing Director)- Salary 30,000,000 24,000,000- Perquisites 3,684,685 2,949,922Mr. K.K. Khanna (Director)- Salary 3,437,400 2,970,000- Perquisites 39,000 39,000Mr. C. P. Baid (Dy. Managing Director)- Salary 11,450,196 4,445,789- Perquisites 661,200 272,363Mr. Gopal Tiwari (Director)- Consultancy 660,000 0

(` in Lac)As at

31-03-2012As at

31-03-201132. Guaranteesa. Counter guarantees issued in respect of guarantees issued by Company’s

bankers8466.87 13469.95

b. Guarantees issued on behalf of limited companies 2393.00 2393.00

Other Notes on Accounts



33. The inventories are taken as per records duly certified by the Company. The same have been valued in accordance with Accounting Policies.

34. To comply with the guidance note on “Accounting Treatment of Excise Duty” issued by The Institute of Chartered Accountants of India, excise duty amounting to `1661.12 Lac (Previous Year `774.91 Lac) has been included in the value of inventories as on 31-03-2012 and the corresponding amount of excise duty payable has been included in other liabilities. However, this has no impact on the Profit for the year.

35. In the opinion of the Management, the Current Assets, Loans and Advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet except where stated otherwise.

36. Pre-operative Expenses capitalized as Capital Work in Progress during the year are as under:-(` in Lac)

Amount brought forward 53,542.89Incurred During the YearAdministrative & Other Expenses 45,686.59Total 99,229.48Allocated to Fixed Assets 9832.23Amount carried over 89397.25

37. Balance confirmations have not been received from number of parties showing debit/credit balances.(` in Lac)

2011-12 2010-1138. Dues to Small & Micro Enterprises #: 1. Principal amount outstanding

2. Interest due on (1) above and the unpaid interest12.720.00

0.000.00

3. Interest paid on all delayed payments under MSMED Act 0.00 0.004. Payment made beyond the appointed date during the year 0.00 0.005. Interest due and payable for the period of delay other than (3) above 0.00 0.006. Interest accrued and remaining unpaid 0.00 0.007. Amount of further interest remaining due and payable in succeeding

years0.00 0.00

39. Rupee equivalent of export obligation to be completed by 20-03-2020 under EPCG Scheme as on 31-03-2012 is `20293.89 Lac (Previous year `26728.82 Lac).

40. No provision has been made for Cess on Power Generation levied by the State of Chhattisgarh amounting to `2732.93 Lac upto 31-03-2012 (`2364.99 Lac upto 31-03-2011). The High Court of Chhattisgarh, in its order dated 15-12-2006 has set aside the demand of the State of Chhattisgarh, terming the levy as ‘unconstitutional’. However, the State Government has gone in appeal against the order of the High Court and the matter is pending before the Supreme Court.

41. As reported in earlier years, the Company had received risk purchase claims aggregating to `3505.90 Lac during earlier years. The Company has disputed the claims and believes that the claims are untenable. The matter has been referred to arbitration. Necessary adjustment, if any, shall be made on finalization of the matter. No fresh claims have been received in this regard during the year.

42. Income of beneficiation charges receivable from Punjab State Electricity Board pursuant to the agreement dated 14-08-2002 has been provided in accordance with the agreement and provisional bills have been accordingly raised along with service tax thereon. Such provisional bills are raised at rates inclusive of the Company’s entitlement of certain escalations in the base rate as referred in the aforesaid agreement. Further reimbursement of transportation charges has been accounted for on the basis on which the same are actually realized. Also PSEB has raised debit notes towards commitment charges, shortages & Penalty. The Company has not accepted the debit notes and is contesting the demands. Necessary adjustment towards difference in beneficiation charges/reimbursement of expenses and debit notes raised by PSEB shall be recognized on final settlement with the party and/or actual realization thereof.


43. Tax Expense is the aggregate of current year income tax, fringe benefit tax and deferred tax charged to the Profit and Loss Account for the year.

a) Current Year Charge: Income Tax provision of `7818 Lac has been made on current year profits as per provisions of the Income Tax Act.

Further, MAT credit entitlement of `408.55 Lac has been utilized.

b) Deferred Tax :The Company estimates the deferred tax charge using the applicable rate of taxation based on the impact of timing differences between financial statements and estimated taxable income for the current year. The Company has opted for tax exemption under section 80-IA of the Income Tax Act in respect of its Power Division. Pursuant to the clarification on AS22 of The Institute of Chartered Accountants of India, no Deferred Tax is provided on timing differences arising and reversing during the Tax Holiday period in respect of Assets of Power Division.

(` in Lac)

Particulars Opening balance as at 01-04-2011

Charge/ credit during the year

Closing as at 31-03-2012

Depreciation 14798.58 1365.71 16164.29Adjustments u/s 43B -33.44 -29.18 -62.62Brought Forward Losses -982.28 -131.23 -1113.51Net 13782.86 1205.30 14988.16

MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

44. Related Party DisclosuresIn accordance with the Accounting Standard (AS-18) on related party disclosure, where control exists and where key management personnel are able to exercise significant influence and, where transactions have taken place during the year, alongwith description of relationship on identified, are given below:-

A. RelationshipsKey Managerial Personnel : Shri Sandeep Jajodia

(Chairman & Managing Director) Shri C. P. Baid (Dy. Managing Director) Shri K.K. Khanna (Executive Director) Enterprise where KMP has significant influence : A.P. Coal Washeries Private Limited Joint Ventures : MP Monnet Mining Company Limited Mandakini Coal Company Limited Monnet Ecomaister Enviro Private Limited Urtan North Mining Company Limited



B. The following transactions were carried out with related parties in the ordinary course of business :-(` in Lac)

Key Managerial Personnel

Joint Ventures Enterprises where KMP hold significant

influence31-03-2012 31-03-2011 31-03-2012 31-03-2011 31-03-2012 31-03-2011

Remuneration Paid 492.72 346.77 0.00 0.00 0.00 0.00Subscription to shares 0.00 0.00 695.70 2843.33 0.00 0.00Share Application Money Pending Allotment

0.00 0.00 10.38 253.67 0.00 0.00

Loans / Advances Given 0.00 0.00 0.00 0.00 275.00 0.00Loans / Advances Repaid 0.00 0.00 0.00 0.00 90.00 0.00

C. Outstanding balance :-(` in Lac)

Description Outstanding BalancesDebit

31-03-2012Debit

31-03-2011Key Management Personnel 7.89 -Joint Ventures 280.68 253.67Enterprises where KMP hold significant influence 263.12 76.35

45. Segmental ReportingSegment information has been prepared in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company.

As part of Secondary reporting, the Company has no geographical segment by location.

(` in Lac)Reportable Segments Iron & Steel Power Others Total Revenue Sales and Other Income 1,62,137 29,271 7,464 1,98,873Inter-Segment Sales 418 5,468 - Total Revenue 1,62,555 34,739 7,464 1,98,873Segment Result/Operating Profit 30,955 8,927 1,196 41,078Financial Charges 10,043Other Income 4,666Profit Before Tax 35,701Less : Provision For Tax/ Deferred Tax & FBT 9,367Profit After Tax 26,334

Information about Business Segment - Primary(` in Lac)

Reportable Segments Iron & Steel Power Others Total Other Information Segment Assets 5,32,977 3,01,033 35,349 8,69,359Unallocated Assets 17,521Total Assets 8,86,880Segment Liabilities 54,639 16,404 18,181 89,224Unallocated Liabilities 5,54,878Total Liabilities 6,44,101Capital Expenditure 2,59,352 2,53,720 21,658 5,34,729Depreciation 4,181 3,580 386 8,147Amortization of Misc. Expenditure 27Non-Cash Expenditure Other Than Depreciation & Amortization 0 0 0 0


Notes :a. Unallocated Assets include investments, Interest Bearing Loans and Deposits, Income Tax Advances and Miscellaneous

expenditure.b. Unallocated Liabilities include interest bearing liabilities, dividend and Income tax provisions.

46. The Company has entered into transactions for hedging, cost reduction and risk diversification strategies to manage its loan portfolio. The Company is accounting for profit / loss on such transactions on actual receipt / payment basis. Recognition of effect on these transactions in the accounts as per AS 30 issued by ICAI shall be adhered to when the said accounting standard becomes mandatory on notification by NACAS.

47. Terms and conditions of issue and redemption of Non convertible Debentures are as under:No of Debenture

Rate Amount(` in Lac)

Date of commencement of redemption

Non Convertible Debentures1200 12.50% 12000.00 Issued on 04-11-2008. Redeemable at par in the ratio of 35:35:30

at the end of 8th, 9th and 10th Year. 800 10.50% 8000.00 Issued on 30-01-2010. Redeemable at par on 30-01-2020.

1000 10.50% 10000.00 Issued on 24-12-2009. Redeemable at par on 24-12-2019.Convertible Debentures1308750 0% 3926.25 Issued on 21-11-2009 Compulsorily convertible into 1.6 equity shares

against each debenture within a period of 18 months.

48. Aggregate capital expenditure as on 31-03-2012 for projects under construction to be capitalized to fixed assets is `4313.05 Crore and includes capital working progress `3647.93 Crore under the head non-current assets and the capital advances `665.12 Crore under the head long term loans advances.

49. Earning Per Share (EPS)–The numerators and denominators used to calculate Basic and Diluted Earning per share:Basic Earning Per Share



Profit attributable to the Equity Shareholders – (` in Lac) (A) 26123.07 27654.53Basic Weighed average number of Equity Shares outstanding during the year (B) 64337807 57844450Nominal value of Equity Shares (`) 10.00 10.00Basic Earning per share (`)-(A)/(B) 40.60 47.81

Diluted Earning Per Share



Profit attributable to the Equity Shareholders as above (` in Lac) 26123.07 27654.53Interest Paid on Potential Equity Shares net of tax impact (` in Lac) 0.00 0.00Profit considered for Diluted E.P.S. (C) 26123.07 27654.53Basic Weighed average number of Equity Shares outstanding during the year as above

64337807 57844450

Weighted Average Potential Equity Shares for the Year 2094000 2094000Total weighted average shares considered for Diluted E.P.S. (D) 66431807 59938450Nominal value of Equity Shares (`) 10.00 10.00Diluted Earning per share (`)-(C)/(D) 39.32 46.14

50. Previous year figures have been regrouped or recasted wherever necessary.

In terms of our report of even date annexed





NOTES:-1 The above Cash Flow statement has been prepared pursuant to clause No 32 of the listing Agreement with Stock Exchanges

and under the indirect method set out in AS-3 issued by the Institute of Chartered Accountants of India.2 Figures in brackets indicate cash outflow.3 Significant Accounting Policies and Notes on Accounts (Schedule 22) form an integral part of Cash Flow Statement.4 Previous year figures have been regrouped/reclassified to confirm to current year’s classification.

Cash Flow Statement For the year ending 31st March, 2012

(`) Particulars Year ended

31-03-2012 Year ended

31-03-2011 A. Cash Flow from Operating Activities

Net Profit before tax and extra ordinary items 3,570,093,585 3,588,879,795 Adustment for :Depreciation 814,703,741 791,268,601 Miscellaneous Expenditure W/off 2,703,683 506,939 Profit/Loss on Sale of Fixed Assets (20,325,977) 1,287,254 Exchange Fluctuation Reserve (181,953,518) (3,713,337)Interest Received (323,547,351) (159,480,066)Interest Paid 891,722,910 345,660,405 Dividend Received (56,678,796) (30,566,468)

1,126,624,692 944,963,328 Operating Profit before Working Capital Facilities 4,696,718,278 4,533,843,123 Adjustment for :Trade & Other Receivable (1,861,513,480) (2,057,651,832)Inventories (2,161,302,966) (1,349,717,530)Miscellaneous Expenditure Incurred During the Year 0 (384,764)Trade Payable 5,041,618,284 668,541,711

1,018,801,838 (2,739,212,415)Cash generated from operation 5,715,520,116 1,794,630,708 Tax Paid (752,473,470) (886,977,379)Dividend Paid (373,875,039) (359,491,707)

(1,126,348,509) (1,246,469,086)Net Cash Flow from operating activities 4,589,171,607 548,161,622

B. Cash Flow From Investing activitiesPurchase of fixed assets (4,476,816,471) (1,554,361,279)Sale of Fixed Assets 39,635,570 4,190,203 CWIP (21,656,675,401) (11,594,652,806)Purchase of Investments (Net) 264,642,057 492,958,030 Buyback of Shares 0 0 Interest Received 323,547,351 159,480,066 Dividend Received 56,678,796 30,566,468

(25,448,988,097) (12,461,819,317)Net Cash used in investing activities (25,448,988,097) (12,461,819,317)

C. Cash Flow from Financing ActivitiesProceed from Share Capital 50,000,000 98,764,550 Proceed from Share Warrants / Application Money (Net) 25,095,277 (235,679,866)Interest Paid (891,722,910) (345,660,405)Proceed from Share Premium / Other Reserves 577,587,221 2,518,505,751 Proceeds from Minority Interest 539,101,551 402,838,418 Proceeds from borrowings 21,867,271,840 14,732,341,024 Net Cash used in financing activities 22,167,332,978 17,171,109,472 Net Increase/ (Decrease) in Cash and Cash Equivalents 1,307,516,488 5,257,451,776 Cash & Cash equivalent Opening 7,461,603,797 2,204,152,021 Cash & Cash equivalent Closing 8,769,120,284 7,461,603,797

In terms of our report of even date annexed




Notes:


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New Delhi – 110048, India T: +91-11-2921 8542-46, F: +91-11-2921 8541

www.monnetgroup.com

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