To the Members of ISMT LIMITED
 
 The Directors have pleasure in presenting their Annual Report and
 Audited Accounts for the year ended March 31, 2011
 
 FINANCIAL HIGHLIGHTS                           (Rs. in Crore)
 
                                             Financial Year
 
 Particulars
 
                                               2010-11      2009-10
 
 Gross Sales                                   2601.92      1914.19
 
 Profit before Finance
 Charges, Depreciation,
 Amortization & Tax (EBIDTA)                    277.84       217.81
 
 Cash Profit                                    162.99       132.91
 
 Gross Profit                                   101.74        82.71
 
 Profit Before Tax                               96.02        91.23
 
 Taxation                                        20.66        16.62
 
 Net Profit                                      75.36        74.61
 
 Add : Balance brought
 
 forward from previous year                      54.83        47.30
 
 Balance available for
 
 Appropriation                                  130.19       121.91
 
 Appropriations
 
 Dividend                                        18.31        14.65
 
 Tax on Dividend                                  2.97         2.43
 
 General Reserve                                 50.00        50.00
 
 Balance carried to
 Balance Sheet                                   58.91        54.83
 
 
 
 Despite a 28% improvement in EBIDTA, the net profit was impacted by
 higher interest and depreciation of the expansion project.
 
 DIVIDEND
 
 The Board has recommended a higher Dividend of Rs 1.25 per Equity Share
 of Rs. 5/- each (25 % of face value) for the financial year ended March
 31, 2011 and is subject to the approval of the shareholders at the
 ensuing Annual General Meeting of the Company.
 
 OPERATIONS
 
 While incremental capacity became available during the year leading to
 higher production at Baramati plant, the volumes at Ahmednagar plant
 were flat. Expansion of both, the size range and the product mix was
 targeted and achieved during the year.
 
 MARKET
 
 Consistent marketing efforts by your Company during last few years
 towards developing new customers especially in Export market has helped
 the Company to achieve strong Export led growth. Export during the year
 were higher by about 87%, while Domestic Tubes & Steel Sales increased
 by 24% & 31% respectively riding on strong growth in Auto, Bearing and
 Power Sector.
 
 FINANCE
 
 There were frequent increases in the bank rates on account of higher
 inflation. However by optimizing the foreign currency borrowings, where
 the libor rates continued to be low, the Company could limit the
 adverse impact and finance cost which came down from 6.6% to 5.6% of
 the sales. With over 30% of Export Sales in Euro denomination, the
 Company has started borrowing in Euro to create a natural hedge.
 
 POWER PROJECT
 
 The Company''s 40 MW Captive Power Project at Chandrapur District is now
 close to commissioning. But for the frequent interruptions and
 impediments both internal and external, the project should have already
 been on stream. The Company has applied for domestic coal linkage.
 
 DIRECTORS
 
 In accordance with the provisions of the Companies Act, 1956 and the
 Articles of Association of the Company, Mr J P Sureka and Mr Salil
 Taneja retire by rotation and being eligible offer themselves for
 re-appointment.
 
 AUDITORS
 
 J K Shah & Co and M/s P G Bhagwat, Joint Statutory Auditors of the
 Company retire at the conclusion of the forthcoming Annual General
 Meeting and being eligible offer themselves for re-appointment.
 
 COST AUDITORS
 
 The Central Government had directed an audit of the Cost Accounts
 maintained by the Company in respect of Steel and Tube businesses for
 the financial year commencing from 2010 -11. In terms of the said
 direction the Company has appointed M/s. D. V. Joshi & Associates and
 M/s.  Parkhi Limaye & Co., Cost Accountants as Cost Auditors for
 conducting the cost audit for Tube & Steel divisions respectively. The
 Central Government has approved appointment of the said Cost Auditors.
 
 SUBSIDIARIES
 
 While the operations of Structo attained break even during the year, in
 order to reduce cost and to attain long term viability & growth, it was
 decided to re-locate some of the upstream facilities to India. One of
 the Draw Benches has already been shifted to Ahmednagar Plant and the
 Second Draw Bench is planned for shifting during the current year to
 Baramati Plant.
 
 As on date of this report, the Company has eight direct & indirect
 subsidiary companies. The Central Government has granted general
 exemption to all Companies from attaching the Annual Accounts of the
 subsidiary companies. The Annual Accounts of these subsidiary companies
 and other relevant information shall be made available for inspection
 at the Company''s Registered Office.
 
 In accordance with the Accounting Standard (AS 21), the audited
 consolidated financial statement of the Company forming part of this
 report is attached hereto.
 
 FIXED DEPOSITS
 
 The Company has not accepted any deposits from the public.
 
 CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS
 
 Pursuant to Clause 49 of the Listing Agreement with the Stock
 Exchanges, a separate section on Corporate Governance and Management
 Discussion and Analysis together with a Certificate from the Company''s
 Auditors on compliance, forming part of the Directors'' Report is
 attached hereto.
 
 RESEARCH & DEVELOPMENT
 
 Your Company continued its efforts towards Research & Development
 activities during the year in key areas of Product, Process and inhouse
 tooling development.
 
 Details of the R&D activities undertaken are enumeated in Annexure I to
 this report.
 
 DISCLOSURE PARTICULARS
 
 The Particulars in respect of energy conservation, technology
 absorption and foreign exchange earnings outgo, etc as required under
 Section 217(1) (e) of the Companies Act, 1956 are given in Annexure - I
 to this report. The Company has also initiated number of Energy
 reduction initiatives anticipating UNFCCC benefits under Green House
 Gas Commission reduction programme The particulars of employees as
 required under Section 217 (2A) of the Companies Act, 1956 forming part
 of this Report are given in Annexure -II to this Report.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 As required by Section 217 (2AA) of the Companies Act, 1956 the
 Directors'' Responsibility Statement is given hereunder:
 
 i) that in the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures ;
 
 ii) that the Directors have selected such accounting policies and
 applied them consistently and made judgments 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 March 31,
 2011 and of the Profit of the Company for that period.
 
 iii) that the Directors have 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) that the Directors have prepared the annual accounts on a going
 concern basis.
 
 ACKNOWLEDGEMENTS
 
 Your Directors take this opportunity to express its sincere gratitude
 for the continued support and co-operation received by the Company from
 the Government of India, Government of Maharashtra, Reserve Bank of
 India, Stock Exchanges, other regulatory agencies and the shareholders.
 The Board would also like to acknowledge the continued support of its
 bankers, vendors, clients and investors. The Directors also wish to
 place on record their appreciation of all the employees for their
 dedication and team work.
 
 For and on behalf of the Board of Directors
 
 Pune                                                  S C Gupta
 
 June 29, 2011                                          Chairman