1.  We have audited the attached Balance Sheet of VISA Steel Limited
 (the Company) as at 31st March 2011, and the related Profit and Loss
 Account and Cash Flow Statement for the year ended on that date annexed
 thereto, which we have signed under reference to this report. These
 financial statements are the responsibility of the Companys
 Management.  Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India.  Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by Management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004
 (together the Order), issued by the Central
 
 Government of India in terms of sub-section (4A) of Section 227 of The
 Companies Act, 1956 of India (the Act) and on the basis of such
 checks of the books and records of the Company as we considered
 appropriate and according to the information and explanations given to
 us, we give in the Annexure a statement on the matters specified in
 paragraphs 4 and 5 of the Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 As indicated in Note-7 in Schedule 16, approval of the Shareholders is
 awaited for managerial remuneration paid to the Chairman amounting to
 Rs.11.29 millions.
 
 5.  Subject to our remarks in paragraph 4 above and further to our
 comments in the Annexure referred to in paragraph 3 above, we report
 that:
 
 (a) We have obtained all the information and explanations which, to the
 best of our knowledge and belief, were necessary for the purposes of
 our audit;
 
 (b) In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of Section 211 of the Act;
 
 (e) On the basis of written representations received from the
 directors, as on 31st March 2011 and taken on record by the Board of
 Directors, none of the directors is disqualified as on 31st March 2011
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Act;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give, in the prescribed
 manner, the information required
 
 by the Act, and give a true and fair view in conformity with the
 accounting principles generally accepted in India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 company as at 31st March 2011;
 
 (ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 Annexure to Auditors Report
 [Referred to in paragraph 3 of the Auditors Report of even date to the
 members of VISA Steel Limited on the financial statements for the year
 ended 31 March 2011]
 
 1.  (a) The Company is maintaining proper records
 
 showing full particulars, including quantitative details and situation,
 of fixed assets.
 
 (b) The fixed assets are physically verified by the Management
 according to a phased programme designed to cover all the items over a
 period of three years which, in our opinion, is reasonable having
 regard to the size of the Company and the nature of its assets.
 Pursuant to the programme, a portion of the fixed assets has been
 physically verified by the Management during the year and no material
 discrepancies between the book records and the physical inventory have
 been noticed.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 of by the Company during the year.
 
 2.  (a) The inventory (excluding stocks with third
 
 parties) has been physically verified by the Management during the
 year. In respect of inventory lying with third parties, these have
 substantially been confirmed by them. In our opinion, the frequency of
 verification is reasonable.
 
 (b) In our opinion, the procedures of physical verification of
 inventory followed by the Management are reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 3 (a) The Company has granted unsecured loans, to one company covered
 in the register maintained under Section 301 of the Act.  The maximum
 amount involved during the year and the year-end balance of such loans
 aggregates to Rs.2.5 millions.
 
 (b) In our opinion, the rate of interest and other terms and conditions
 of such loans are not prima facie prejudicial to the interest of the
 Company.
 
 (d) In respect of the aforesaid loans, the parties are repaying the
 principal amounts as stipulated and are also regular in payment of
 interest, where applicable.
 
 (d) In respect of the aforesaid loans, there is no overdue amount more
 than Rupees One Lakh.
 
 (e) The Company has not taken any loans, secured or unsecured, from
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Act.
 
 4 In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business for the
 purchase of inventory, fixed assets and for the sale of goods and
 services. Further, on the basis of our examination of the books and
 records of the Company, and according to the information and
 explanations given to us, we have neither come across nor have been
 informed of any continuing failure to correct major weaknesses in the
 aforesaid internal control system.
 
 5.  (a) In our opinion and according to the information
 
 and explanations given to us, the particulars of contracts or
 arrangements referred to in Section 301 of the Act have been entered in
 the register required to be maintained under that section.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements and exceeding the value of Rupees Five Lakhs in respect of
 any party during the year have been made at prices which are reasonable
 having regard to the prevailing market prices at the relevant time.
 
 6.  The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 Company in respect of products where, pursuant to the Rules made by the
 Central Government of India, the maintenance of cost records has been
 prescribed under clause (d) of sub-section (1) of Section 209 of the
 Act, and are of the opinion that prima facie, the prescribed accounts
 and records have been made and maintained. We have not, however, made a
 detailed examination of the records with a view to determine whether
 they are accurate or complete.
 
 9.  (a) According to the information and explanations
 
 given to us and the records of the Company
 
 examined by us, in our opinion, the Company is generally regular in
 depositing the undisputed statutory dues including provident fund,
 investor education and protection fund, employees state insurance,
 income-tax, sales- tax, wealth tax, service tax, customs duty, excise
 duty, cess and other material statutory dues as applicable with the
 appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues of
 income-tax, sales-tax and entry-tax as at 31st March 2011 which have
 not been deposited on account of a dispute, are as follows:
 
 Name of the   Nature of 
               dues       Amount      Period to which   Forum where the 
                                                        dispute is
 statute                 (Rs.million) the amount 
                                       relates          pending
 
 Income Tax 
 Act,          Wrong 
              valuation 
                of          5.49      Assessment Year   The Commissioner 
                                                         of Income Tax
 1961         Closing Sto
              ck and 
              loans                   2003-04           Appeals, Kolkata, 
                                                         West Bengal
              converted to 
              equity
 
 Income Tax 
 Act,         Under valua
              tion of       44.56      Assessment Year   The Commissioner 
                                                           of Income Tax
 1961         Closing Sto
              ck and                      2004-05       Appeals, Kolkata, 
                                                            West Bengal
              disallowance 
              of interest
 
 Income Tax 
 Act,         Disallowance 
              of certain    10.24      Assessment Year   The Commissioner 
                                                          of Income Tax
 
 1961          expenses                   2006-07           Appeals, 
                                                            Bhubaneswar , 
                                                              Orissa
 
 Central 
 Sales       Difference 
             in way bill     0.01      Financial Year     The Joint. Com
                                                           missioner of
 Tax (Ori
 ssa)        value and inv
             oice value                 1999-2000         Sales Tax 
                                                         (Appeal), Jajpur  
                                                               Range,
 Rules, 1957                                               Jajpur Road, 
                                                               Orissa
 
 Central 
 Sales       Non-submission 
             of C          3.87      Financial Year    The Commissioner 
                                                               of
 Tax (Ori
 ssa)         Form                          2005-06     Commercial Taxes, 
                                                           Cuttack,
 Rules, 
 1957                                                      Orissa
 
 Orissa 
 Value       Reversal of 
             Consignment    16.90      Financial Year    The Commissioner 
 of
 Added Tax 
 Act,         Sale, Input 
              Tax Credit on               2005-06       Commercial Taxes, 
                                                          Cuttack,
 2005         Stock                                         Orissa
 
 Orissa 
 Entry Tax   Adhoc freight 
             addition for   1.34        Financial Year       The Asst. 
                                                          Commissioner 
                                                             of Sales
 Act,1999    calculating 
             landed cost                   2004-05      Tax (Appeals), 
                                                         Jajpur Range,
                                                         Jajpur Road, 
                                                            Orissa
 
 Orissa 
 Entry Tax   Entry tax on 
             imported        96.63       Financial year  The Commissioner
                                                               of
 Act, 1999    coke                         2009-10      Commercial Taxes, 
                                                             Cuttack,
                                           2010-11            Orissa
 
 Orissa 
 Entry Tax   Purchase of 
             coal and        43.57       Financial Year  The Commissioner 
                                                                 of
 Act, 1999  coke including 
               freight                      2005-06     Commercial Taxes, 
                                                            Cuttack,
                                                             Orissa
 
 Orissa 
 Sales      Non-payment of    0.01       Financial Year   The Asst. 
                                                         Commissioner of 
                                                             Sales
 Tax. 
 Act 1947   Surcharge 2                    004-05 Tax        (Appeals), 
                                                           Jajpur Range,
                                                           Jajpur Road, 
                                                              Orissa
 
 10.  The Company has no accumulated losses as at 31st March 2011 and it
 has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 11.  According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund/ societies are not applicable to the
 Company.
 
 14.  In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  In our opinion and according to the information and explanations
 given to us, the Company has not given any guarantee for loans taken by
 others from banks or financial institutions during the year.
 
 16.  In our opinion, and according to the information and explanations
 given to us, on an overall basis, the term loans have been applied for
 the purposes for which they were obtained.
 
 17.  On the basis of an overall examination of the balance sheet of the
 Company, in our opinion and according
 
 to the information and explanations given to us, funds aggregating
 Rs.1813.78 million raised on a short term basis have been used for the
 purpose of long-term investment in Fixed Assets.
 
 18.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 19.  The Company has not issued any debenture during the period and
 accordingly the question of creation of security or charge does not
 arise.
 
 20.  The Company has not raised any money by public issues during the
 year.
 
 21.  During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the Management.
 
                                                   For and on behalf of
                                                       Lovelock & Lewes
                                      Firm Registration Number: 301056E
                                                  Chartered Accountants
 
                                                       Partha Mitra
 
 Place: Kolkata                                            Partner
 Date: 30 May, 2011                          Membership Number 50553