Dear Shareholders,
 
 Steel industry has shown welcome signs of resilience in Asia and
 Africa, where growth levels have been better than the western
 economies. GDP growth in China has resulted in steel demand register an
 increase of over 6% during the year. Quantitative easing of credit
 restrictions is widely expected to fuel growth of Chinese economy
 during 2013.
 
 Demand for steel in India continues to grow, in tandem with the growth
 in GDP. Indian economy is expected to grow by around 6% during the
 year, higher than most economies in the developed world. Steel demand
 in India is expected to reach 100 Million Tons in the next few years,
 offering significant opportunities to steel majors to augment their
 capacities.
 
 Inflationary pressures and weak investment sentiments, however,
 continue to be a cause for concern in India.  The Index of Industrial
 Production has remained depressed and the current account deficit has
 widened.  Depreciation of the Indian Rupee has led to costly import
 bills and the current account deficit continues to remain high. Indian
 steel makers are also threatened due to steady decline in availability
 of iron ore from domestic sources.
 
 The fiscal measures recently announced by Government of India are
 expected to boost economic activity and investor sentiment. Planned
 investment in infrastructure and greenfield projects are likely to
 accelerate steel consumption.
 
 The Eurozone crisis and prolonged recession in major western economies
 have, however, led to contraction in global steel demand. However, the
 US economy has performed stronger than expected and steel demand in the
 country has been up by 7% over the previous year.
 
 YEAR 2011-12 - OVERVIEW OF PERFORMANCE
 
 Notwithstanding the overall market conditions, JSW ISPAT achieved
 marked improvement in production of various items of steel products.
 Sales were also significantly higher compared to the previous year.
 
 In view of the challenges in availability of critical inputs, the
 Company could successfully tie-up alternate sources of supply, leading
 to rationalisation of operations. Several initiatives were taken for
 optimizing efficiencies resulting in improved operational performance.
 
 Since January, 2012, the Company has been receiving power from a unit
 (captive to the Company) of JSW Energy Limited, leading to valuable
 savings in cost of power.
 
 The Company has exited from the Corporate Debt Restructuring Scheme
 effective September, 2011, upon arranging refinance of the CDR debts.
 
 INITIATIVES - NEW PROJECTS
 
 JSW ISPAT earnestly seeks to enhance operational efficiencies and
 achieve steady growth. The Company has significant technological and
 locational strengths and every effort is being undertaken to structure
 its growth chart on this valuable platform.
 
 Several cost-saving and efficiency-enhancing projects have been
 undertaken in right earnest. Power project and Lime Calcining project
 at Dolvi Steel Complex are expected to be commissioned during 2013. The
 second Colour Coating Line at Kalmeshwar Complex is expected to be
 fully operational by December 2012.
 
 With a view to achieve raw material security, a Coke Oven project of
 the capacity of 1 Million Tons and a Iron Ore Pelletisation project of
 the capacity of 4 Million Tons are being set-up at Dolvi Steel Complex,
 by a special purpose vehicle company. Both the projects are expected to
 be commissioned during 2014.
 
 A 6 Hi Mill of the capacity of 0.2 Million Tons is also being set-up at
 Kalmeshwar Complex for increasing the overall coating volumes. The
 project is likely to be commissioned during end 2013.
 
 RESTRUCTURING - STRATEGY AND BENEFITS
 
 With a view to achieve economies of scale, improved capital allocation,
 faster implementation of cost-saving initiatives undertaken by the
 Company, reduction of finance costs and other benefits, a restructuring
 scheme has been proposed, which envisages, inter-alia, transfer of
 Kalmeshwar unit of JSW ISPAT to a separate company and amalgamation of
 the residual business of JSW ISPAT into JSW Steel Limited. The
 appointed date for the composite scheme of Arrangement and Amalgamation
 is July 1, 2012. The composite scheme is subject to various regulatory
 and other approvals. The share exchange ratio recommended by
 independent valuers appointed for the purpose is issue of one (1) fully
 paid-up equity share of the face value of Rs. 10/- each in JSW Steel
 Limited for seventy-two (72) fully paid-up equity shares of Rs. 10/- each
 held in JSW ISPAT. Approvals of Competition Commission of India,
 National Stock Exchange and Bombay Stock Exchange have already been
 received. Other approvals are being sought.
 
 SUSTAINABILITY PRINCIPLES
 
 Sustainable growth has been the cornerstone of JSW''s business ethos.
 Economic viability, environment conservation and social responsibility
 shall continue to drive the Company''s policies and plans. JSW ISPAT
 shall continuously endeavor to improve and enhance these core
 principles.
 
 JSW ISPAT shall continue to engage with its stakeholders and seek to
 fully protect their interests. Organisational priorities shall continue
 to be led by a strong stakeholder- engagement policy.
 
 I wish to extend my thanks to all our valued suppliers and customers as
 well as lenders for their continued support.  My thanks are also due to
 our employees who have displayed enormous commitment towards achieving
 our business goals.
 
 Finally, my thanks to all stakeholders, the Board of Directors and the
 Central and State Government for their support.
 
 SAJJAN JINDAL
 
 Chairman