Dear Members,
 
 The Directors present their Twenty-sixth Annual Report on the
 operations of your Company alongwith the standalone and consolidated
 financial results for the year ended 30th June 2011.
 
 FINANCIAL RESULTS
 
                                            (Rs. in crores)
 
                                     Year ended       15 month
                                     30th June,     period ended
                                       2011           30th June,
                                                        2010
 
 Sales / Income from operations       8990.07         10983.14
 
 Less: Excise Duty                     763.43           850.41
 
 Sales (net) / Income from
 Operations                           8226.64         10132.73
 
 Other Income                          324.35           445.96
 
 Total Income                         8550.99         10578.69
 
 Total Expenditure                    7901.53          8855.75
 
 Profit before Interest & Finance
 Charges and Depreciation              649.46          1807.47
 
 Less : Interest & Finance Charges    1022.91          1369.98
 
 Profit / (Loss) before Depreciation (373.45)           437.49
 
 Depreciation                          596.26           773.95
 
 Profit / (Loss) before Tax and
 Exceptional Items                    (969.71)         (336.46)
 
 Add : Exceptional Items              1180.62             -
 
 Profit / (Loss) before tax          (2150.33)         (336.46)
 
 Provision for Taxation (Net)
 - Wealth Tax                            0.03             0.03
 
 - Deferred Tax Charge / (Credit)     (344.48)          (14.15)
 
 Net Profit / (Loss)                 (1805.88)         (322.34)
 
 Less: Debenture Redemption
 Reserve written back                    -               20.26
 
 Add: Balance brought forward
 from previous year                  (2134.23)        (1832.15)
 
 Amount carried to next year         (3940.11)        (2134.23)
 
 Income from operations during the year under review was Rs.8990.07
 Crores. Profit before interest and finance charges and depreciation was
 Rs.649.46 Crores.
 
 After providing for interest and finance charges of Rs.1022.91 Crores
 and depreciation of Rs.596.26 Crores, loss before exceptional items was
 Rs.969.71 Crores. Exceptional items (details of which are contained in
 Note No.9 of the Notes forming part of the accounts) aggregating to
 Rs.1180.62 Crores have been provided for in the accounts for the year
 under review and, consequently, loss before tax was Rs.2150.33 Crores.
 
 After considering Deferred Tax Credit of Rs.344.48 Crores and Wealth
 Tax provision of Rs.0.03 Crores, net loss during the year under review
 was Rs. 1805.88 Crores. The loss is proposed to be carried to next
 year''s accounts.
 
 DIVIDEND
 
 In view of the accumulated losses, the Board of Directors does not
 recommend any dividend on the Equity Shares. The Board of Directors
 does not declare dividend on the Cumulative Redeemable Preference
 Shares.
 
 STEEL SCENARIO
 
 Steel industry, across the world, has been gripped by uncertainties
 prevailing in the overall economic landscape. Global steel demand has
 been impacted by the slow economic growth in developed markets.  Though
 GDP in US had marginally increased during 2010-11, the country faces a
 large fiscal deficit, low employment growth and reduced consumer
 spending.
 
 In the European Union Zone, the economies of Spain, Ireland, Greece and
 Portugal have been impacted by high unemployment, negative growth and
 increasing inflation levels. Government spending in all the economies
 have been widely hit and the potemial threat of sovereign defaults loom
 large. The overall GDP growth in European Union Zone has, therefore,
 been low.
 
 On the other hand, economic growth in China was robust at over 10%.
 Coupled with economic growth, Chinese investments were also higher
 during the year under review.
 
 Overall, while GDP in emerging economies grew by over 7% during 2010,
 the growth in advanced economies was significantly lower at 3%.  The
 current year, however, has witnessed low GDP growth in emerging
 economies, due to rising inflationary pressures and tightening of
 economic policies.
 
 A large number of enterprises in the steel sector are reassessing their
 capital expenditure plans. Advanced economies are not poised for
 sizeable growth and business sentiments are impacted due to the
 sovereign debt crisis in the European Union. US, European Union and
 several South Asian economies are not expected to grow substantially
 during 2012 and economic stimulus plans are generally perceived to be
 limited. Overall GDP growth is expected to remain modest in advanced
 economies. Stringent credit policies, lower export growth and the
 continuing fall in purchase index are widely expected to signal a lower
 GDP growth in China during 2012.
 
 Crude steel production in India, at around 67 Million Tons, was higher
 by 6% during 2010 compared to the previous year.
 
 Indian steel consumption has witnessed steady growth, on the back of a
 robust GDP and increase in industrial production. However, during the
 current year, domestic steel consumption has been flat due to low IIP
 growth and heavy inflationary pressures. Steel industry margins have
 been under severe squeeze due to high input costs and inflationary
 trends impacting domestic consumption. Capital investment plans are
 significantly low due to economic pressures and increasing cost of
 capital.
 
 OPERATIONS
 
 The Company had undertaken technical upgradation of facilities at its
 steel complex at Dolvi during November and December 2010.  The
 upgradation involved blending of various technical facilities, plant
 shutdown and maintenance related activities. Operations at Dolvi
 Complex had recommenced during end-December 2010.
 
 Production of Hot Rolled Coils at 2.2 Million MTs was lower by 16.9%
 compared to the previous period, on an annualized basis. Production of
 Direct Reduced iron (Sponge Iron) at 1.21 Million MTs and production of
 Hot Metal at 1.35 Million MTs were respectively lower by 10.2% and
 20.6% compared to previous period, on an annualised basis. The
 incidence of lower production in all the product segments was due to
 plant shut-down during most part of November and December, 2010 for
 technical upgradation and maintenance activities.
 
 Restriction in availability of Natural Gas had cascading effect on
 input prices and also severely impacted production of Direct Reduced
 Iron.
 
 Production of Cold Rolled Steel Coils/Sheets and Galvanized
 Coils/Sheets were lower at 0.21 Million MTs and 0.14 Million MTs,
 respectively. Production of Galvalume at 0.048 Million MTs had
 registered an increase of 90.1% over the previous period. Production of
 Tubes and Pipes, however, was lower at 0.014 Million MTs.
 
 Sales of Hot Rolled Coils at 2.08 Million MTs was lower by 10.34%,
 compared to previous period, due to lower production. Sales of Cold
 Rolled Steel Coils/Sheets were lower by 51.98%, whereas sales of
 Galvanized Coils/Sheets were lower by 2.74%, compared to previous
 period, due to lower production. Sales of Galvalume had risen by
 80.03%, on an annualised basis, signifying future growth prospects in
 the value-added segment.
 
 Various cost reduction initiatives have been undertaken by the Company,
 such as, usage of alternate grades of raw material, successful in-house
 commissioning of natural gas injection in blast furnace and lower usage
 of fluxes. However, the increase in bench mark prices for key inputs,
 viz., iron ore, coal and coke is likely to push up the cost of
 production during the current financial year. Further, with the
 changeover to quarterly, and in some cases monthly, pricing against the
 earlier practice of yearly pricing by major raw material suppliers,
 uncertainties in the pricing of key inputs get heightened. Cost of
 natural gas has also risen sharply, since the Company is compelled to
 explore alternate domestic sources in the wake of supply restrictions.
 
 EXPORTS
 
 Export earnings during the year under review was Rs.486.16 Crores,
 signifying an increase of 40% over the previous period, on an
 annualized basis.
 
 Global steel demand has been slack due to negative economic indicators
 in advanced economies.
 
 The Company would continue to integrate its export strategies with
 global steel demand conditions. The dynamics of global market scenario
 shall drive the Company''s export plans as well as development of niche
 steel products for advanced application overseas.
 
 MANAGEMENT CONTROL - JSW STEEL LIMITED
 
 The Company entered into a Subscription-cum-Shareholders Agreement
 (SSA) with its promoters and JSW Steel Limited on December 20, 2010,
 pursuant to which an amount of Rs. 2157 Crores has been received by the
 Company during the year from JSW Steel Limited towards subscription to
 equity shares in the Company.
 
 In terms of the special resolution passed at the Extraordinary General
 Meeting of the members of the Company held on January 18, 2011, the
 Company was authorized to issue 108,66,49,874 Equity Shares to JSW
 Steel Limited, on preferential basis, at a price of Rs. 19.85 per
 Equity Share, determined In terms of SEBI''s Issue of Capital and
 Disclosure Requirement (ICDR) Guidelines. Accordingly, the Securities
 Issue Committee of the Board of Directors of the Company, at its
 meeting held on January 24, 2011, allotted 108,66,49,874 Equity Shares
 of Rs. 10/- each at a premium of Rs. 9.85 per share to JSW Steel
 Limited.
 
 In terms of Regulations 10 and 12 of the Securities and Exchange Board
 of India (Substantial Acquisition of Shares and Takeovers) Regulations,
 1997, JSW Steel Limited had made an open offer to the equity
 shareholders of the Company which opened on March 12, 2011 and closed
 on April 5, 2011. Pursuant to the open offer, JSW Steel Limited has
 further acquired 8,99,40,890 Equity Shares in the Company.
 
 Upon acquisition of the aforesaid Equity Shares in the Company by JSW
 Steel Limited, management and control of the Company stands vested in
 JSW Steel Limited.
 
 The aforesaid infusion of funds by JSW Steel Limited has enabled the
 Company to, inter-alia, meet its long-term working capital requirements
 and achieve savings in interest costs. Besides achieving significant
 marketing synergies, the Company is also likely to be benefited through
 savings in raw material and energy costs.
 
 CHANGE OF NAME - JSW ISPAT STeIl LIMITED
 
 In terms of the aforementioned Subscription-cum-Shareholders Agreement
 and pursuant to the consent accorded by the Shareholders at the
 Extraordinary General Meeting held on June 24, 2011 and the approval
 received from the Office of Registrar of Companies, West Bengal, the
 name of the Company stands changed to JSW ISPAT Steel Limited with
 effect from June 28, 2011.
 
 PROJECTS
 
 The Company''s lime production capacity is currently 600 Tons Per Day
 (TPD), while the requirement is over 1200 TPD. Requirement of lime is
 expected to rise to around 1800 TPD, once the steel-making capacity is
 enhanced to 5 Million Tons per annum. Hence, keeping in mind the
 present as well as future requirement of lime, the Company proposes to
 set-up a lime calcining plant of the capacity of 600 TPD at its Dolvi
 steel complex. The technology for the project as well as the major
 equipment are being sourced from M/s. Cimprogetti, Italy. The project
 is estimated to cost around Rs 75 crores and is planned to be financed
 through internal accruals. The project is expected to be commissioned
 within a period of 15 months.
 
 The Company is planning to set-up a railway siding facility adjacent to
 its Dolvi steel complex, with a view to ensure economic transportation
 of key inputs as well as Hot Rolled Coils. Upon setting-up of the
 railway siding facility substantial savings are envisaged on both
 inbound and outbound logistics. Land required for the purpose is being
 acquired.  The project is estimated to cost around Rs. 90 Crores and is
 planned to be financed through internal accruals. The project is
 expected to be commissioned within a period of 15 months.
 
 With a view to ensure regular supply of power and achieve savings in
 cost thereof, the Company proposes to set-up a gas-based power plant of
 a capacity of 55 MW. The power plant will use waste gas being generated
 by the Blast Furnace, as feed-mix. The Company is at an advanced stage
 of negotiation with various technology and equipment suppliers. The
 project cost is estimated at around Rs. 155 crores and is planned to be
 financed through internal accruals. The project is expected to be
 commissioned within a period of 18 months.
 
 Considering the growing demand for colour coated steel with galvanized
 / galvalume base, both in project / construction sectors and consumable
 durable segment, the Company proposes to set-up a second colour coating
 line at its Kalmeshwar complex. The project is estimated to cost around
 Rs.40 crores and is planned to be financed through internal accruals.
 The project is expected to be commissioned within a perjod of 15
 months,
 
 Additionally, with a view to ensure raw material integration and
 achieve savings in input costs, JSW Steel Limited proposes to set-up a
 coke oven plant of the capacity of 1 Million Tons per Annum and a
 pellet plant of the capacity of 4 Million Tons Per Annum at the
 Company''s Dolvi steel complex. Implementation of these projects would
 ensure that the Company is not exposed to market risks in sourcing
 quality coke and pellets for its steel-making operations. The coke oven
 and pellet projects are likely to be commissioned within 24 months and
 21 months, respectively. The projects are proposed to be implemented
 through Special Purpose Vehicle (SPV) Company(ies).
 
 JSW Steel Limited has also proposed to set-up a 0.8 Mio TPA Cold
 Rolling facility at the Company''s Dolvi steel complex, with a view to
 augment the Company''s efforts to capture downstream opportunities.  The
 project is expected to cost around Rs.300 Crores and is likely to be
 commissioned within a period of 18 months.
 
 ACQUISITION OF EQUITY SHARES IN JSW ENERGY LIMITED
 
 In order to be eligible to treat one of the units (300 MW) of JSW
 Energy Ltd., at Ratnagiri, Maharashtra as a captive unit for supply of
 power, the Company has invested a sum of Rs. 163.29 Crores during the
 year in the Equity Shares of JSW Energy Ltd., during the year and is in
 the process of entering into a ''Energy Wheeling Agreement'' to ensure
 long term supply of power.
 
 CAPTIVE POWER PLANT OF ISPAT ENERGY LIMITED
 
 fspat Energy Limited, a wholly-Owned subsidiary, has carried out
 technical evaluation of the condition of the equipments acquired for
 its 110 MW power project by an independent expert who has reported that
 the equipments, lying in the plant premises, are in poor condition and
 beyond economic repair / use and that any attempt to use the same may
 result in accidents during operation. Considering the above, the Board
 of Directors Of Ispat Energy Limited has decided not to pursue the
 project. Accordingly, Ispat Energy Limited has, based on the report of
 an independent valuer, valued the above equipments, building etc., at a
 net realizable value of Rs. 14 Crores and charged the balance amount of
 Rs. 436.78 Crores to its Profit and Loss Account for the quarter ended
 30th June 2011. As a consequence thereof, the Company has made
 provision of Rs. 110 Crores in the accounts towards diminution in the
 value of its investments in Ispat Energy Limited and has also made
 provision of Rs. 324.19 Crores towards loans and advances made to Ispat
 Energy Limited, not likely to be recoverable.
 
 TRANSFER OF NON-CORE AREAS OF OPERATION
 
 In view of lack of visible synergies and project delays, the Company
 proposes to transfer the following non-core areas of operation:-
 
 - Implementation Agreement entered into with Government of Chattisgarh
 and Chattisgarh State Electricity Board during July, 2008 for
 setting-up a 1200 MW Thermal Power Plant;
 
 - Memorandum of Understanding entered into with Gujarat Mineral
 Development Corporation Limited during May, 2010 for mining and supply
 of coal.
 
 - Mining lease granted by Government of Madhya Pradesh during
 September, 2008 for development of Limestone mine in Madhya Pradesh.
 
 - Reconnaissance permit granted by Government of Madhya Pradesh during
 September, 2009 for carrying out reconnaissance operations of precious
 minerals.
 
 The Memorandum of Understanding etc., are proposed to be transferred to
 Special Purpose Vehicle Companies formed/to be formed for the purpose.
 
 SUBSIDIARY COMPANIES
 
 As explained in the foregoing, the Board of Directors of Ispat Energy
 Limited has decided not to pursue its 110 MW Power Project.
 
 The Memorandum of Understanding entered into by Ispat Jharkhand Steels
 Limited for setting-up an integrated steel plant in the State of
 Jharkhand is currently being evaluated and an appropriate decision in
 the matter shall be taken during the current financial year.
 
 In respect of the wholly-owned overseas subsidiaries, namely, Erebus
 Limited, Arima Holdings Limited and Lakeland Securities Limited,
 incorporated for the purpose of acquisition and development of iron ore
 and coal mining projects in Brazil, Columbia and Mozambique, necessary
 provision has been made in tha accounts for the year towards diminution
 in the value of investments made by the Company in these subsidiaries.
 Reference may be had to Note No.9 (b) of the Notes forming part of the
 accounts for the year.
 
 In terms of the general exemption granted by Ministry of Corporate
 Affairs, Government of India, vide General Circular No.2/2011 dated 8th
 February, 2011, the Balance Sheet and Profit and Loss Account of the
 Company''s subsidiaries for the financial year ended 31st March, 2011
 are not being attached. The requisite information, in terms of the
 aforesaid General Circular, are contained in the Consolidated Financial
 Statement of the Company and its subsidiaries. The aforesaid annual
 accounts of the subsidiaries and the related detailed information shall
 be made available to any member of the Company or its subsidiary
 companies, upon request. The Annual Accounts of the Subsidiary
 Companies will also be kept open at the Registered Office of the
 Company as well as the Registered Offices of the Subsidiary Companies,
 for inspection by any member.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 The Consolidated Financial Statements of the Company and its
 subsidiaries, prepared and presented in accordance with Accounting
 Standard (AS) 21, are attached to and form part of the Annual Report.
 
 DEBT REFINANCING AND EXIT FROM CORPORATE DEBT RESTRUCTURING SCHEME
 
 The Company has successfully arranged refinancing of its existing debt
 under Corporate Debt Restructuring mechanism and also arranged
 additional debt for meeting its long-term working capital requirements
 etc.
 
 The Company plans to shortly exit from the Corporate Debt Restructuring
 Scheme. The debt consolidation undertaken by the Company would help in
 creating a simple and uniform security structure, under a consortium
 arrangement.
 
 REDEMPTION OF 12% CUMULATIVE REDEEMABLE PREFERENCE SHARES (CRPS)
 
 In accordance with the terms governing issue of 12% CRPS, the Company
 has further redeemed 8% of the face value (Rs. 100/- each) of the 12%
 CRPS. Upon redemption, the adjusted face value of the 12% CRPS is Rs.
 76/- each.
 
 PREFERENTIAL ISSUE OF EQUITY WARRANTS-CANCELLATION
 
 ''ln-principle'' approval of the Stock Exchanges for the proposed
 preferential allotment of 11,33,06,895 Equity Warrants to promoters was
 not received by the Company due to non-receipt of lenders'' consent for
 lock-in'' of the pledged equity shares belonging to the Promoters. The
 Board of Directors, in its meeting held on December 20, 2010, has
 cancelled the aforesaid preferential issue of Warrants.
 
 ISSUE OF EQUITY SHARES, UPON EXERCISE OF CONVERSION OPTION BY LENDERS
 
 During the year, certain lenders, in terms of loan / facility
 agreements entered into with the Company, have opted'' for conversion
 into Equity Shares of their outstanding dues to the extent of Rs. 77.71
 Crores comprising Rs. 39.91 Crores towards principal and Rs. 37.80
 Crores towards interest. Accordingly, the Board of Directors at its
 meeting held on November 24, 2010 has allotted 7,77,07,038 Equity
 Shares of Rs. 10/- each, at par, to these lenders, pursuant to Section
 81(3) of the Companies Act, 1956 read with Public Companies (Terms of
 Issue of Debentures and Raising of Loans with Option to Convert such
 Debentures or Loans into Shares) Rules, 1977.
 
 Pursuant to the approval of the CDR Empowered Group at its meeting held
 on January 12,2011 and subsequent notices given to the Company by
 certain lenders for conversion of part of their outstanding dues into
 equity shares in the Company, the Securities Issue Committee of the
 Board of Directors of the Company, at its meeting held on March 31,
 2011, had decided to allot 10,24,17,239 Equity Shares of Rs. 10/- each
 at a premium of Rs. 4.74 per share aggregating to Rs. 150.96 Crores to
 the respective lenders, subject to receipt of ''in principle'' approval
 from the Stock Exchanges in terms of Clause 24(a) of the Listing
 Agreement.  The ''in principle'' approval of Bombay Stock Exchange Ltd
 (''BSE'') has been received, while approval of National Stock Exchange of
 India Ltd.  (''NSE'') is still awaited. Pending receipt of ''in principle''
 approval from NSE, the said amount of Rs. 150.96 Crores has been
 considered as ''Share Capital Suspense Account''.
 
 APPLICABILITY OF SECTION 23 OF SICK INDUSTRIAL COMPANIES (SPECIAL
 PROVISIONS) ACT, 1985
 
 Pursuant to the provisions contained in Section 23 of the Sick
 Industrial Companies (Special Provisions) Act, 1985 (SICA), the
 Company held an Extraordinary General Meeting on January 18, 2011 and
 informed the shareholders about the accumulated losses of the Company
 as at the end of the last financial year, i.e. June 30,2010 being Rs.
 2,134.23 Crores, which led to erosion of more than fifty percent of the
 Company''s peak net worth of the immediately preceding four financial
 years. The Company has also reported the fact of such erosion of net
 worth to the Board for Industrial and Financial Reconstruction (BIFR).
 
 DIRECTORS
 
 Upon being nominated by JSW Steel Limited, Mr. Sajjan Jindal and Mr.
 Seshagiri Rao MVS have been appointed as Additional Directors of the
 Company with effect from Januray 13, 2011. Mr. Haigreve Khaitan and Mr.
 Atul Sud have been appointed as Additional Directors of the Company
 with effect from January 13, 2011. Mr. Sajjan Jindal, Mr. Seshagiri Rao
 MVS, Mr. Haigreve Khaitan and Mr. Atul Sud hold office upto the date of
 the ensuing Annual General Meeting. Separate notices have been received
 from members, under Section 257 of the Companies Act, 1956, proposing
 their names for appointment as Directors of the Company.
 
 Resolutions seeking approval of the members for their appointment as
 Directors of the Company have been proposed at the ensuing Annual
 General Meeting. The Board of Directors recommends adoption of the
 resolutions.
 
 Dr A Besant C Raj and Dr Basudeb Sen have resigned as Directors with
 effect from January 13, 2011.
 
 The Board of Directors wish to place on record its appreciation of the
 services rendered by Dr A Besant C Raj and Dr Basudeb Sen during their
 respective tenures as Directors of the Company.
 
 Mr. Pramod Mittal resigned as Chairman of the Board of Directors with
 effect from February 14, 2011. However, he continues to be a Director
 of the Company.
 
 The Board of Directors wish to place on record its appreciation of the
 valuable contribution made by Mr. Pramod Mittal during his tenure as
 Chairman of the Board.
 
 Mr. R. K. Jena was appointed as an Alternate Director to Mr. Pramod
 Mittal with effect from February 14, 201 J. He ceased to be Alternate
 Director with effect from May 9, 2011. i/lr. Suhail Nathani has been
 appointed as an Alternate Director to Mr. Pramod Mittal with effect
 from May 11,2011.
 
 Mr. Sajjan Jindal has been appointed as the Chairman of the Board of
 Directors with effect from February 14, 2011.
 
 Mr. Vinod Mittal has relinquished the office of Managing Director of
 the Company with effect from July 1, 2011. However, he continues, to be
 the Vice Chairman of the Company, in executive capacity.
 
 The Board of Directors wish to place on record its appreciation of the
 valuable contribution made by Mr. Vinod Mittal during his tenure as
 Managing Director of the Company.
 
 Mr. B. K. Singh, Whole-time Director designated as Executive Director
 (Steel Plant) has been re-designated as Chief Executive Officer with
 effect from July 22, 2011.
 
 Mr. Anil Sureka has been re-appointed as Whole-time Director of the
 Company designated as Executive Director (Finance) with effect from
 February 1, 2011, subject to approval of the members and other
 authority(ies), as may be required. Mr. Anil Sureka has since resigned
 as Executive Director (Finance) as well as Director of the Company with
 effect from July 1,2011. Accordingly, his appointment as Executive
 Director (Finance) is upto June 30, 2011.
 
 The Board of Directors wish to place on record its appreciation of the
 valuable services rendered by Mr. Anil Sureka during his tenure as
 Director of the Company.
 
 Resolution seeking approval of the members for the re-appointment of
 Mr. Anil Sureka as Whole-time Director designated as Executive Director
 (Finance) for the period February 1, 2011 to June 30, 2011 has been
 proposed at the ensuing Annual General Meeting. The Board of Directors
 recommends adoption of the resolution.
 
 Mr. Vinod Kothari was appointed as an Additional Director of the
 Company with effect from November 12, 2010. Subsequently, Mr. Vinod
 Kothari has been appointed as Director of the Company at the Annual
 General Meeting held on December 21, 2010.
 
 Mr. B. K. Singh and Mr. U Mahesh Rao retire by rotation at the ensuing
 Annual General Meeting, and being eligible, offer themselves for
 re-appointment.
 
 Resolutions seeking approval of the members for re-appointment of the
 aforesaid retiring Directors have been proposed at the ensuing Annual
 General Meeting. The Board of Directors recommends adoption of the
 resolutions.
 
 The nomination of Mr. R. P. Singh was withdrawn by IFCI Ltd. with
 effect from August 28, 2010. Ms Manju Jain has been nominated as
 Director by IFCI Ltd., in place of Mr. R. P. Singh, with effect from
 that date.
 
 The Board of Directors wish to place on record its appreciation of the
 services rendered by Mr. R. P. Singh during his tenure as Director of
 the Company.
 
 Mr. Vinod Garg has resigned as Executive Director (Commercial) as well
 as Director of the Company with effect from April 16, 2011.
 
 The Board of Directors wish to place on record its appreciation of the
 valuable services rendered by Mr. Vinod Garg during his tenure as
 Director of the Company.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
 confirm that:-
 
 (i) in the preparation of the annual accounts for the financial year
 ended 30th June, 2011, the applicable accounting standards have been
 followed and there have been no material departures;
 
 (ii) the 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 that yearf
 
 (iii) 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; and
 
 (iv) the Directors have prepared the annual accounts for the financial
 year ended 30th June, 2011 on a going concern basis
 
 AUDITORS
 
 The Auditors, M/s S R Batliboi & Co., Chartered Accountants, retire at
 the ensuing Annual General Meeting and have expressed their willingness
 to be re-appointed.
 
 The Company has obtained a letter from the Auditors to the effect that
 the re-appointment, if made, will be in conformity with the limits
 specified in Section 224 (1B) of the Companies Act, 1956.
 
 AUDITORS''REPORT
 
 The Auditors in their report have, while drawing attention to Note
 No.11 of Schedule 23 of the accounts for the year, commented on their
 inability to express any opinion on the future profitability
 projections made by the Company and their consequential impact, if any,
 on Deferred Tax Asset recognized in the said accounts.
 
 The Auditors, in their statement under Companies (Auditors Report)
 Order, 2003 annexed to the aforesaid Report, have observed the
 following:-
 
 a) Delay in few cases in depositing undisputed statutory dues;
 
 b) Accumulated losses as at the end of the financial year exceeding
 fifty percent of the Company''s net worth;
 
 c) Certain delays in repayment to domestic financial institutions and
 banks during the year and the arrears of such dues as on the Balance
 Sheet date; and
 
 d) Use by the Company of funds raised on short-term basis for repayment
 of long-term loans and financing of operating losses.
 
 In the opinion of the Board of Directors, based on process improvements
 carried out for enhancing the steel-making capacity and operating
 efficiency, Company''s Business Plans and strategies, improvement in net
 worth consequent to issue of Equity Shares to JSW Steel Limited and
 approval of the Company''s proposals by its lenders through CDR
 mechanism, the Company is virtually certain that there would be
 sufficient taxable income in the future to claim the deferred tax
 credit.
 
 Further, the Board of Directors informs that:-
 
 a) Delays in few cases in depositing undisputed statutory dues have
 been due to mismatches in cash flows, which were subsequently
 rectified. However, no undisputed statutory dues were pending to be
 deposited as at the Balance Sheet date;
 
 b) Pursuant to the provisions contained infection 23 of the Sick
 Industrial Companies (Special Provisions) Act, 1985, the Company has
 reported to Board for Industrial and Financial Reconstruction the fact
 of erosion of more than fifty percent of its net worth, as at 30th
 June, 2010, compared to the peak net worth during the immediately
 preceding four financial years.
 
 c) Delays in making payment of dues to domestic financial institutions
 and banks were due to mismatches in cash flows; however, there is no
 such overdue amount as at the Balance Sheet date.
 
 d) Though the observations are based on comparison of financial
 statements of two different periods, ignoring the non cash flow
 impacting items considered in the financial statements, there is no
 usage of short-term funds for long-term purposes.
 
 CORPORATE GOVERNANCE
 
 Pursuant to Clause 49 of the Listing Agreement with the Stock
 Exchanges, the Management Discussion and Analysis and Corporate
 Governance Report together with the Certificate from the Auditors of
 the Company confirming compliance of the conditions of Corporate
 Governance form part of this Report.
 
 SECRETARIAL COMPLIANCE REPORT
 
 The Company had engaged M/s Robert Pavrey & Associates, Practising
 Company Secretaries, to review Secretarial Compliance for the financial
 year ended 30th June, 2011.
 
 Though not mandatory, the Secretarial Compliance Certificate was
 obtained during the year, on a quarterly basis, from the aforementioned
 Practising Company Secretaries, and reviewed by the Board.
 
 SEARCH AND SEIZUIRE OPERATIONS BY INCOME TAX AUTHORITIES
 
 The Income Tax authorities had carried out search and seizure
 operations at certain locations of the Company during November, 2010.
 However, no order consequent to such operation has so far been received
 by the Company.
 
 CODE OF CONDUCT
 
 The 3oard has laid down a Code of Conduct for all Board Members and
 Senior Management of the Company. The Code of Conduct has been posted
 on the Company''s website.
 
 Board Members and Senior Management personnel have affirmed compliance
 with the Code for the financial year 2010-11. A separate declaration to
 this effect is annexed to the Corporate Governance Report.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 In accordance with the requirements of Section 217(1)(e) of the
 Companies Act, 1956 read with Companies (Disclosure of Particulars in
 the Report of Board of Directors) Rules, 1988, the particulars with
 respect to Conservation of Energy, Technology Absorption and Foreign
 Exchange Earnings and Outgo are annexed to and form part of this
 Report. (Ahnexure A).
 
 PERSONNEL
 
 Employee relations continued to be harmonious during the year.
 
 The Company''s Performance Management System is bench-marked with
 prevailing best practices. The Company seeks to continuously enhance
 competitiveness and skills of its employees. Employee- recognition is
 prompt and rewarding.
 
 The Board wishes to place on record its appreciation for the efforts of
 all its employees.
 
 Information in terms of Section 217(2A) of the Companies Act, 1956 read
 with the Companies (Particulars of Employees) Rules, 1975 forms part of
 this Report. (Annexure B).
 
 APPRECIATION
 
 Your Directors wish to place on record their appreciation for the
 support extended to the Company by its lenders, the Central and State
 Governments as well as its business associates. Your Directors also
 thank the members for their continued support.
 
                             For and on behalf of the Board
 
                       Seshagiri Rao          MVS B K Singh
 
                        Director    Chief Executive Officer
  
 Mumbai,
 the 27th August, 2011.