The Directors have great pleasure in presenting the Twenty Fifth
 Annual Report on the performance of your Company for the financial year
 ended 31st March, 2009 along with Audited Statements of Accounts. Your
 directors are also pleased to inform you that the Company has
 successfully completed 25 years and is celebrating its Silver Jubilee
 this year.
 
 INDUSTRY SCENE
 
 Indian Steel Industry has been posting a healthy growth for last five
 years. However, the Company has not been encashing on the market
 opportunities due its sick status. As you know your Company is under
 BIFR and because of the financial crunch, the Company is not achieving
 set targets. The turnover of the Company witnessed a decline by 20.83%
 as compared to the previous year.
 
 FINANCIAL RESULTS
 
 The Sales for the year under review amount to Rs. 4013 Lacs as compared
 to Rs.5044 lacs for the previous year. The Company has incurred a loss
 of Rs. 14361 lacs after tax during the year under review as compared to
 a loss of Rs. 11557 Lacs for the previous year. Interest on the Working
 Capital and Term Loan has been provided on accrual basis even though
 the loan funds have eroded over a period. Therefore, huge loss is
 accumulated every year. The accumulated loss up to the year ended
 31.03.2009 is Rs. 80292 lacs as compared to Rs. 65931 lacs for the
 previous year.
 
 The summarised financial results of the company are as under:
 
                                         Current year   Previous year
                                         Rs. In Lacs    Rs. In Lacs
                                         2008-09        2007-08
 
 Total Income                            4013           5044
 Gross profit /(Loss)                     281           1040
 Less : Indirect Expenses                 950            847
 Less: Financial charges                12686          11028
 Profit/(Loss) before Depreciation
 and Income Tax                        (13355)        (10835)
 Less: Depreciation                       713            710
 Net Profit /(Loss) before Tax         (14068)        (11545)
 Prior period items (net)                 284              7
 Less: Fringe Benefit Tax                   9              5
 Less: Income Tax for the year              0              0
 Net Profit/(Loss) after tax           (14361)        (11557)
 Add: Balance from the
 Previous year                         (65931)        (54374)
 Balance carried to balance sheet      (80292)        (65931)
 
 DIVIDEND
 
 In view of the loss incurred by the Company during the year under
 review, your Directors have not recommended any dividend to the
 shareholders.
 
 ISP PROJECT
 
 The Company is continuing its full efforts to obtain foreign investment
 from overseas investors and domestic investors towards additional
 equity/debt, so that the Blast Furnace Complex could be completed in
 the first phase. The Directors are hopeful of an early solution and
 implementation of the Integrated Steel Plant project which has been
 delayed due to financial crunch.
 
 BIFR
 
 Your Company has become a Sick Industrial Company within the meaning of
 clause (O) of section 3 of SICA, 1985 on 07.12.2006 With BIFR, New
 Delhi. IDBI has been appointed as Operating Agency (OA) by BIFR.
 
 DIRECTORS
 
 Shri S. Madhav, Director of your Company retires by rotation at the
 ensuing Annual General Meeting and is eligible for reappointment.
 
 Mr. C.N.B. Nair was appointed as Special Director of BIFR w.e.f.
 20.08.2008 by the Honble BIFR, New Delhi and resigned from the Board
 w.e.f. 30.04.2009. The Board of Directors wishes to place on record the
 appreciation for the service rendered by him during his tenure.
 
 AUDITORS
 
 M/s .Manohar Chowdhry & Associates, Chartered Accountants, Bangalore,
 Auditors of the Company retire at the conclusion of this Annual General
 Meeting and are eligible for reappointment. As required under section
 224(1 -B) of the Companies Act, 1956, the present auditors have
 furnished the necessary certificate.
 
 FIXED DEPOSITS
 
 Your Company has not accepted any deposits from the public during the
 period under review.
 
 CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO.
 
 Conservation of energy and Technology absorption:
 
 The information required to be furnished under section 217 (1) (e) of
 the Companies Act, 1956 read with the Companies (Disclosure of
 particulars in the report of the Board of Directors) Rules, 1968, is
 given in Annexure-I forming part of this report.
 
 Foreign Exchange Earnings and Outgo:
 
 The foreign exchange earnings and outgo during the period are as under:
 
                                Amount 
                                (Rs. In Lacs)
 
 Earnings:                         - Nil -
 Outgo:
 
 1. Imports (CIF Value)              NIL
 2.  Foreign Travel expenses         120.77
 3.  Consultancy                     NIL
 
 PARTICULARS OF EMPLOYEES
 
 There are no employees drawing remuneration beyond the stipulated limit
 in accordance with section 217 (2A) of the Companies Act, 1956 read
 with Companies (Particulars of Employees) Rules 1975 as amended up to
 date.
 
 INFORMATION UNDER THE LISTING AGREEMENT
 
 The statement containing details as required under Clause 49 of the
 Listing Agreement with the Stock Exchanges is appended hereto in
 Annexure -11 and forms part of this report.
 
 CORPORATE GOVERNANCE
 
 The Company has implemented the Code of Corporate Governance as
 required by the Listing Agreement introduced by Securities & Exchange
 Board of India.
 
 The report of Directors on the particulars prevalent on Corporate
 Governance has been annexed as Annexure - III as part of the Annual
 Report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 In accordance with the provisions of section 217 (2AA) of the Companies
 Act, 1956, your Directors state:
 
 (i) That in the preparation of the annual accounts, applicable
 accounting standards have been followed;
 
 (ii) That your Directors have selected such accounting policies and
 applied them consistently and made judgements and estimates that are
 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 period;
 
 (iii) That your Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records, in accordance with the
 provisions of this Act, for safeguarding the assets of your Company and
 for preventing and detecting fraud and other irregularities;
 
 (iv) That your Directors have prepared the annual accounts as a going
 concern basis.
 
 HUMAN RESOURCE
 
 Your company attaches considerable importance to Human Resource
 Development (HRD) and harmonious industrial relations. The management
 is continuously working on the development of human capital, vital in
 an ever changing business environment towards achieving the goals and
 realizing the Vision of the Company. Number of Employees on the rolls
 of the Company as on 31.03.2009 is 224.
 
 ACKNOWLEDGEMENT
 
 The Board expresses its grateful appreciation of the assistance and
 co-operation received from Financial Institutions and Banks, State, and
 Central Governments and other Statutory Bodies, customers, suppliers,
 share holders. Your Directors are grateful for the support extended by
 them and look forward to receiving their continued support and
 encouragement. Lastly, your Directors place on record their
 appreciation for the dedicated efforts put in by the employees during
 the year under review.
 
                          for and on behalf of the Board of Directors
 
 Bangalore                                        S.MADHAV S.PARVATHI
 31 st August, 2009                        Managing Director Director