To the Members of ISMT LIMITED
 
 The Directors have pleasure in presenting the Annual Report and Audited
 Accounts of the Company for the year ended March 31,2012.
 
 FINANCIAL HIGHLIGHTS                                  (Rs.in Crore)
 
                                                   Financial Year
 Particulars                                    2011-12     2010-11
 
 Gross Sales                                    2980.60     2552.79
 
 Profit before Finance Charges,
 Depreciation, Amortization & Tax (EBIDTA)       265.47      274.64 
 
 Cash Profit                                     107.08      162.98
 
 Gross Profit                                    144.68      184.08
 
 Profit Before Tax                                28.66       95.96
 
 Taxation                                          0.07       20.60
 
 Net Profit                                       28.59       75.36
 
 Add: Balance brought forward from previous year  58.91       54.83
 
 Balance available for Appropriation              87.50      130.19
 
 Appropriations
 
 Dividend                                         10.99       18.31
 
 Tax on Dividend                                   1.78        2.97
 
 General Reserve                                  50.00       50.00
 
 Balance carried to Balance Sheet                 24.73       58.91
 
 DIVIDEND
 
 Despite drop in profit and taking long term view, the Board has
 recommended a dividend of Rs. 0.75 per Equity Share of face value of
 Rs. 5/- each (15 % of face value) for the financial year ended March
 31,2012 and is subject to the approval of the shareholders at the
 ensuing Annual General Meeting of the Company.
 
 OPERATIONS
 
 During the year the Company registered incremental tube sales of 17,532
 MT and incremental steel sales of 10,950 MT. After streamlining the new
 PQF capacity with the existing processes last year, this year the
 efforts were to increase the lot size so as to minimize downtime on
 account of size changes and further on Production Planning to optimize
 on available resources.
 
 MARKET
 
 Exports growth of over 52% has been quite encouraging given the fact
 that the key world economies are passing through uncertain times. On
 the domestic front, while inflation and higher interest rates have
 adversely impacted some of the industries, construction equipment
 segment witnessed good growth.
 
 FINANCE
 
 During the year the company redeemed entire outstanding Foreign
 Currency Convertible Bonds (''FCCB'') amounting to USD 20 Million along
 with redemption premium. Increase in overall interest rates and adverse
 foreign exchange rates along with provisioning for FCCB redemption
 premium led to the increase in finance cost during year. Unprecedented
 forex volatility during the financial year resulted in forex loss of
 Rs. 31.52 Crore. To address the risks associated with foreign currency
 transactions, company has put in place forex risk management policy.
 
 POWER PROJECT
 
 The 40 MW Captive power plant of the company has commenced commercial
 production from May 28, 2012.  The Power generated is wheeled using the
 state electricity grid to all three manufacturing plants located at
 Ahmednagar, Baramati & Jejuri. The surplus power generation resulting
 from the current Banking Regulations, on account of varying load
 consumption pattern at the manufacturing plants, is proposed for sale
 to MSEDCL. The Company has applied for domestic coal linkage, which is
 still awaited.
 
 DIRECTORS
 
 In accordance with the provisions of the Companies Act, 1956 and the
 Articles of Association of the Company, Mr.  A.K. Jain and Mr. Vinod
 Sethi retire by rotation and being eligible offer themselves for
 re-appointment.
 
 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.
 
 COST AUDITORS
 
 The Central Government had approved appointment of the following Cost
 Auditors for FY 2011-12:
 
 (i) M/s Dhananjay V. Joshi & Associates and
 
 (ii) M/s Parkhi Limaye & Co.
 
 The Cost Audit Report for the year 2010-11 was due on September 27,
 2011 and was filed with the Ministry of Corporate Affairs on September
 27,2011.
 
 SUBSIDIARIES
 
 As on date of this report, the Company has eight direct and indirect
 subsidiary companies. The Central Government has granted general
 exemption to the holding Companies from attaching the Annual Accounts
 of their 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.
 
 Continuing with the strategy to shift employee intensive activity from
 Structo to India, while retaining technology intensive front end
 activities in Sweden, the second cold draw bench was shifted during the
 year to the Company''s Baramati plant and is now fully operational.
 
 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 & ANALYSIS
 
 Pursuant to Clause 49 of the Listing Agreement with the Stock
 Exchanges, a separate section on Corporate Governance and Management
 Discussion & Analysis together with a Certificate from the Company''s
 Auditors on compliance, forming part of this Report is attached hereto.
 
 RESEARCH & DEVELOPMENT
 
 Your Company is actively pursuing R&D activities focussed on developing
 new Steel grades and tubes to match customer requirements. In addition,
 the Company also encourages in house development of tooling and
 indigenisation of imported machinery. The Company remained focused on
 developing value added products for all its market segments including
 the Energy, OCTG, Bearing, Auto and Mining Sectors. R&D activities also
 focused on process cost reductions through an increase in yields.
 
 Details of the R&D activities undertaken are enumerated in Annexure I
 to this report
 
 PARTICULARS OF DISCLOSURE
 
 The particulars in respect of energy conservation, technology
 absorption and foreign exchange earnings and outgo etc. as required
 under Section 217(l)(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 are given in Annexure II to this Report.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to provisions of Section 217(2AA) of the Companies Act, 1956,
 your Directors make the following statement:
 
 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 31,2012 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 teamwork.
 
                           For and on behalf of the Board of Directors
 
 Pune                                                        S C Gupta
 
 May 28, 2012                                                 Chairman