ISMT

The Directors have the pleasure of presenting the Annual Report
 2007-08 and Audited Accounts for the year ended March 31, 2008
 
 Financial Highlights
                                                   (Rs. in Crore)
 Particulars                                      Financial Year
                                           2007-08       2006-07
 
 Gross Sales                               2063.07       2056.06
 
 Profit before Finance
 Charges, Depreciation,
 Amortization &Tax (EBIDTA)                 225.63        268.55
 
 Gross Profit                               181.39        197.41
 
 Profit Before Tax                          126.10        137.66
 
 Taxation                                    26.06          7.54
 
 Net Profit                                 100.04        130.12
 
 Add : Balance brought forward
 from previous year                          75.19         57.13
 
 Add : Transferred from
 Debenture Redemption
 Reserve                                         -         43.31
 
 Balance available for
 Appropriation                              175.23        230.56
 
 Appropriations
 
 Dividend (Interim+Proposed)                 14.55          7.22
 
 Tax on Dividend
 (Interim+Proposed)                           2.47          1.23
 
 Capital Redemption Reserve                      -         46.92
 
 General Reserve                            100.00        100.00
 
 Balance carried
 to Balance Sheet                            58.21         75.19
 
 Dividend
 
 The Directors declared an Interim Dividend of Rs.  0.50 per Equity
 Share of Rs. 5/- each on October 29, 2007.
 
 The Directors recommend a Final Dividend of Rs.  0.50 per Equity Share
 of Rs.5/- each subject to the approval of the Members at the ensuing
 Annual General Meeting.
 
 Operations
 
 Despite major dislocations arising out of the ongoing expansion project
 at Baramati, both Ahmednagar and Baramati operated at full capacity.
 The Steel plant also operated at near full capacity utilization in a
 rather difficult environment where both continual increases in cost as
 well as the availability of raw material were a challenge.
 
 Market
 
 The market for tubes continued to be buoyant through the year and
 while, given the capacity constraints, it was not possible to increase
 the overall sales volume, we still managed to align the product mix
 with future growth drivers. Thus sales of Boiler Tubes for the Power
 Sector and Hydraulic Cylinder Tubes for the construction sector went up
 by over 50 per cent. Both these sectors have huge long term potential
 and are expected to take up large part of the incremental capacity.
 
 Expansion
 
 Your Directors are pleased to report that the Tube expansion project at
 Baramati has been successfully completed and commissioning trials are
 underway.  Baramati capacity will consequently go up from 90,000 tonnes
 p.a. to 4,00,000 tonnes p.a. apart from building significant technical
 and commercial strengths.
 
 Implementation of the steel expansion to 350,000 tonnes p.a. is
 proceeding as per schedule and we expect to complete it by March 2009.
 
 Finance
 
 Over 75% of the Companys long term borrowings were converted into
 foreign currency (USD) which helped the Company lower its interest cost
 during the year. The Company allotted 57,50,000 Warrants to the
 Promoters on a preferential basis with an option to convert the
 Warrants into Equity Shares of Rs. 5/- each at a price of Rs. 91.80 per
 share at any time within 18 months from the date of allotment. On
 account of the exercise of conversion rights by Warrant Holders in
 terms of the Scheme of Arrangement, the Company allotted 21,08,627
 fresh Equity Shares during the period under report.
 
 Research & Development
 
 There was a concerted effort in moving towards a more application
 orientated approach to both manufacturing as well as sales. Development
 of new grades of tubes for the Energy sector, mainly high alloy tubes
 meant for super critical boiler applications continued to be a thrust
 area. In addition, the Company also made significant advances in the
 development of special application tubes for the Energy, Mining and
 OCTG sectors. The plants also managed to achieve substantial process
 improvements that resulted in lower rejections, rework and therefore in
 higher yields.
 
 Details of the R & D activities undertaken are enumerated in Annexure I
 to this Report.
 
 Directors
 
 In accordance with the provisions of the Companies Act, 1956 and the
 Articles of Association of the Company Mr. O P Kakkar, Mr. J.P. Sureka
 and Mr Salil Taneja retire by rotation and being eligible, offer
 themselves for re-appointment.
 
 As a result of his resignation at the Board Meeting held on April 30,
 2008, Mr V Balasubramanian ceased to be a Director of the Company. The
 Board places on record its sincere appreciation of the services
 rendered by Mr. V Balasubramanian during his tenure.
 
 Mr. S. C. Gupta was appointed as an Additional Director of the Company
 at the Board Meeting held on July 31, 2008. He will hold office up to
 the date of the ensuing Annual General Meeting (AGM) of the Company.
 Members approval has been sought in the notice convening AGM for his
 appointment as a Director of the Company.
 
 Mr. S C Gupta was appointed as Chairman of the Board on August 25,
 2008.
 
 Auditors
 
 M/s P G Bhagwat and J K Shah & Co. Joint Statutory Auditors of the
 Company retire at the conclusion of the forthcoming Annual General
 Meeting and being eligible, offer themselves for re-appointment.
 
 Subsidiaries
 
 Your Company has the following Subsidiaries as on March 31, 2008.
 
 Sr.  Name of Subsidiary Company
 
 1.  ISMT Enterprises SA (Luxembourg)
 
 2.  Structo Hydraulics AB (Sweden)
 
 3.  Structo (UK) Limited (United Kingdom)
 
 4.  Structo Hydraulics India Limited (India)
 
 5.  ISMT Europe AB (Sweden)
 
 The Company is awaiting approval from the Central Government, for
 seeking exemption from attaching the individual financial statements
 and related reports of its Subsidiary Companies for the year ended
 March 31, 2008.
 
 However, a statement containing brief financial details of the
 subsidiaries of the Company for the year ended March 31, 2008 is
 included in the Annual Report. The annual accounts of the said
 subsidiaries will be made available to the Members for inspection at
 the Registered Office of respective Subsidiary Companies and at the
 Registered Office of the Company.
 
 In accordance with Accounting Standard - 21 on Consolidated Financial
 Statements, your Directors have pleasure in attaching the audited
 Consolidated Financial Statements, which form part of this Annual
 Report.
 
 Fixed Deposits
 
 There are no outstanding fixed deposits as on March 31, 2008 except the
 unclaimed Deposits of the erstwhile The Indian Seamless Metal Tubes
 Limited.
 
 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 Companys
 Auditors on compliance, forming part of the Directors Report is
 attached 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 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,
 2008 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
 
 The Board expresses its sincere gratitude for the continued support and
 guidance received by the Company from the Government of India,
 Government of Maharashtra, the Reserve Bank of India, Stock Exchanges
 and other regulatory agencies. The Board would like to acknowledge the
 continued support of its bankers, vendors, clients and investors. The
 Directors also wish to place on record their gratitude and appreciation
 of the employees hard work, dedication, team work and professionalism
 which made the substantial growth possible year after year.
 
                          For and on behalf of the Board of Directors
 
                                                            S C Gupta
                                                             Chairman
 
 Registered Office:
 
 Lunkad Towers, Viman Nagar,
 Pune - 411014
 August 25, 2008