The Directors take pleasure in presenting the Seventeenth Annual
 Report of your Company, together with the Standalone and Consolidated
 Audited Statement of Financial Accounts for the year ended March 31,
 2011.
 
 1.  FINANCIAL RESULTS
 
                                                        (Rs. in crores)
 Particulars                  Standalone                 Consolidated
                          F.Y.          F.Y.          F.Y.        F.Y.
                      2010-11       2009-10       2010-11      2009-10
 
 Gross Turnover     25,130.76     19,456.64     25,867.80    20,211.33
 
 Less: Excise 
 duty                1,967.52      1,254.16      1,967.56     1,254.16
 
 Net Turnover       23,163.24     18,202.48     23,900.24    18,957.17
 
 Other Income          282.64        529.08        284.03       532.16
 
 Total Revenue      23,445.88     18,731.56     24,184.27    19,489.33
 
 Profit before
 Interest,
 Depreciation, &
 Taxation (EBIDTA)   4,856.17      4,801.98      4,946.77     4,602.83
 
 Net Finance Charges   695.18        858.92        945.41     1,104.17
 
 Depreciation and
 amortisation        1,378.71      1,123.41      1,559.71     1,298.66
 
 Profit before
 Taxation (PBT)      2,782.28      2,819.65      2,441.65     2,200.00
 
 Tax including
 Deferred Tax          771.61        796.91        782.27       646.71
 
 Profit after 
 Taxation
 but before
 minority
 interest and
 share of
 profit of 
 Associates          2,010.67      2,022.74      1,659.38     1,553.29
 
 Share of Losses of
 Minority                  -              -        (23.87)      (33.21)
 
 Share of Profit of
 Associates (Net)          -              -         70.73        11.05
 
 Profit after Taxation
 (PAT)              2,010.67       2,022.74      1,753.98     1,597.55
 
 Profit brought 
 forward
 from previous 
 year               5,327.78       3,883.15      4,695.46     3,676.02
 
 Amount available
 for Appropriation  7,338.45       5,905.89      6,449.44     5,273.57
 
 Appropriations
 Transfer to
 Debenture
 Redemption 
 Reserve                  -         (125.00)            -     (125.00)
 
 Transfer to 
 Capital
 Redemption 
 Reserve                  -           (9.90)            -       (9.90)
 
 Dividend on
 Preference 
 Shares              (27.90)         (28.92)       (27.90)     (28.92)
 
 Proposed Final
 Dividend on Equity
 Shares             (273.32)        (177.70)      (273.32)    (177.70)
 
 Corporate 
 Dividend Tax        (48.87)         (34.31)       (48.87)     (34.31)
 
 Transfer to 
 General
 Reserve          (4,200.00)        (202.28)    (4,200.00)    (202.28)
 
 Total            (4,550.09)        (578.11)    (4,550.09)    (578.11)
 
 Balance 
 carried to
 Balance Sheet      2,788.36        5,327.78      1,899.35   4,695.46
 
 The Company achieved a favourable product mix during the year, mainly
 due to increase in rolled products, with the rolling of most of the
 available cast products. This helped in reducing the sale of semis
 (cast products) in the overall product mix to around 6% (vis-à-vis 22%
 in last year) which in turn helped in improvement in blended sales
 realization compared to that of with previous year.
 
 The Company achieved a volume growth over previous year of 7% in crude
 steel production during the current year. It had achieved crude steel
 production of 6.427 Million tonnes (the overall production was 6.506
 Million tonnes, considering trial run production from the expansion
 project) and volume of sales of 6.099 million tonnes.
 
 The interest cost has come down due to prepayment and repayment of high
 cost debt out of proceeds of equity investment by strategic investor
 JFE Corporation, Japan.
 
 The Gross Turnover and Net Turnover for the year stood at Rs. 25,130.76
 crores and Rs. 23,163.24 crores, respectively, showing a growth of 29%
 and 27% over the previous year mainly driven by growth in volumes and
 improved product mix and increase in blended sales realizations.
 
 The EBIDTA for the year was Rs. 4,856.17 crores and EBIDTA margin for the
 year was 20.8%. Your Company posted PAT of Rs. 2,010.67 crores.
 
 Pursuant to Accounting Standard AS-21 issued by the Institute of
 Chartered Accountants of India, consolidated financial statements
 presented by the Company include financial information of its
 subsidiaries. In the context of globalising Indian economy and the
 increase in the number of subsidiaries, the Ministry of Corporate
 Affairs, vide its General Circular No. 2/2011 dated 08.02.2011 has
 granted General Exemption to all companies from attaching the Balance
 Sheet, Profit and Loss Account and other documents of the subsidiary
 companies to the Balance Sheet of the Company subject to fulfilment of
 certain standard conditions generally prescribed while giving specific
 approvals. The Company will make available these documents/details upon
 request by any member or investor of the Company/subsidiary companies.
 Further, the Annual Accounts of the subsidiary companies will be kept
 open for inspection by any investor at the registered office of the
 Company and also that of the subsidiary companies.
 
 Consolidated Financial Statements also reflect minority interest in
 associates as per Accounting Standard (AS) - 23 on Accounting for
 Investments in Associates in Consolidated Financial Statements and
 proportionate share of interest in Joint Venture as per Accounting
 Standard (AS) - 27 on Financial Reporting of Interests in Joint
 Ventures.
 
 As per the Consolidated Financial Statements, the Gross Turnover, Net
 Turnover, EBIDTA and PAT of the Company are Rs. 25,867.80 crores, Rs.
 23,900.24 crores, Rs. 4,946.77 crores and Rs. 1,753.98 crores,
 respectively. The PAT on consolidated basis was lower than the
 standalone net profit, due to losses in overseas subsidiaries
 attributable to slow recovery from global meltdown.
 
 2.  DIVIDEND
 
 The Board has, subject to the approval of the Members at the ensuing
 Annual General Meeting, recommended dividend at the stipulated rate of
 Rs. 1.00 per Share on the 27,90,34,907, 10% Cumulative Redeemable
 Preference Shares of Rs. 10 each of the Company, for the year ended March
 31, 2011.
 
 The Board has also, considering the Companys performance and financial
 position for the year under review, recommended a dividend of Rs. 12.25
 per Equity Share (122.5%) on the 22,31,17,200 Equity Shares of Rs. 10/-
 each of the Company, for the year ended March 31, 2011, subject to the
 approval of the Members at the ensuing Annual General Meeting.
 
 Together with Corporate Tax on dividend, the total outflow on account
 of Equity dividend will be Rs. 317.66 crores, vis-à-vis Rs. 207.21 crores
 paid for fiscal 2009-10.
 
 3.  PROSPECTS
 
 2010 reflected recovery and revival across most of the economies after
 witnessing the pain and panic of the 2008 financial crisis.  Advanced
 Market Economies (AMEs) showed a mix of higher volatility and moderate
 recovery while Unemployment, Debt and Deficit continued to remain as
 challenges. On the other count, Chinese Economic growth remained robust
 @ 10.3% in 2010 fuelled by rising investments (+23.8%). Global Steel
 Production grew by 15% at 1,414 MnT, while Chinas steel production was
 up by 9.3% to 627 MnT.
 
 Economic recovery is expected to continue its positive momentum across
 most of the economies. China, with its 12th Five Year Plan to commence
 from 2011 onwards, is slated to shift focus from growth to income
 distribution while encouraging Energy Efficiency, Emission Reduction,
 Resource Conservation and Social aspects. China is also expected to
 intensify its focus on exploring domestic demand and restructuring of
 steel industry coupled with elimination of inefficient and marginal
 capacities. Rest of the world is also expected to witness improved
 growth led by expanding Investments and consumption with an improving
 global trade, even though inflation is a challenge that most of
 emerging economies needs to address while keeping the growth momentum
 intact. Overall the Steel sector is expected to see a good demand and
 higher price realization driven mainly by restocking and surging input
 cost.
 
 4.  PROJECTS AND EXPANSION PLANS
 
 The status of progress made on various Projects of the Company was as
 follows:
 
 Vijayanagar Works
 
 (a) Projects commissioned during FY 2010-11
 
 (i) The implementation of the state-of-the art new Hot Strip Mill with
 a capacity of 5 mtpa was taken up in two phases.  Phase-I with a
 capacity of 3.5 mtpa was successfully commissioned on March 28, 2010.
 After successful trial runs, the Mill commenced commercial operations
 on April 10, 2010. Phase II implementation is progressing well.
 
 (ii) The 3.2 mtpa expansion project at Vijayanagar Works is progressing
 in full swing. The overall crude steel capacity of the Company will go
 upto 11 mtpa on completion of this project. The following facilities
 were commissioned / part commissioned during the year:
 
 - Ladle Heating Furnace-3&4, Converter-3&4 and Caster-3&4 were
 commissioned in phases by March 2011.
 
 - Sinter plant 3 (5.75 mtpa capacity) was commissioned in February 2011
 - the largest such facility in India.
 
 - 300MW captive power plant (CPP 3) was commissioned in September 2010.
 
 - Two of the four batteries (Battery A&B) of coke oven 4 (1.95 mtpa
 capacity) were commissioned in December 2010. Battery C was
 commissioned in the month of April 2011 while heating of Battery D is
 underway.
 
 (iii) First phase of the 20 mtpa beneficiation plant was commissioned
 in phases in April 2011.
 
 (b) Projects under Progress
 
 Following projects are under different stages of implementation:
 
 - The balance units of 3.2 mtpa expansion project viz, Blast Furnace 4,
 Lime plant, Water pipeline will be commissioned by June 2011.
 
 - Second phase (capacity of 1.5 mtpa) of the new HSM, taking the
 rolling capacity of this facility to 5 mtpa by September 2012.
 
 - Pellet plant 2 (capacity 4.2 mtpa) expected to be commenced by June
 2011.
 
 - Second phase of the Beneficiation plant by November 2011, taking the
 total capacity of beneficiation to 20 mtpa.
 
 - 300 MW Captive Power Plant (CPP4) at Vijayanagar, to be commissioned
 by December 2011.
 
 (c) Projects proposed
 
 New Cold Rolling Mill Complex:
 
 The Company has decided to set-up a new Cold Rolling Mill Complex of
 2.3 mtpa in two phases at its Vijayanagar Works, considering the
 growing demand from consumer durable and automobile segment for CRCA
 products. The proposed complex will have 2.3 mtpa of Pickling cum
 coupled tandem Cold Rolling Mill, 1.9 mtpa (two lines of 0.95 mtpa
 each) of State of the art Continuous Annealing lines and 0.4 mtpa of
 Galvanising cum Galvannealing line.
 
 Total investment is about Rs. 4,025 crores, and is proposed to be funded
 by a debt equity ratio of 2:1. The target date of completion is Q1
 2013-14 for Phase-I and Q1 2014-15 for Phase-II.
 
 Augmenting crude steel capacity from 10 mtpa to 12 mtpa at Vijayanagar
 works:
 
 The Company has made assessment of the existing facilities at
 Vijayanagar Works and based on the findings, it has been decided to
 increase the capacity by an additional 2 mtpa.
 
 The proposed project cost is about Rs. 2,695 crores and is to be financed
 out of cash accruals of Rs. 945 crores and the balance by debt and is
 expected to be commissioned by June 2013.
 
 Salem Works
 
 (a) Projects commissioned during FY 2010-11
 
 Phase I of the Blooming Mill (capacity 0.25 mtpa) was commissioned in
 September 2010.
 
 (b) Projects under progress
 
 Phase II of the Blooming Mill (capacity 0.25 mtpa) is in progress and
 the same is expected to be commissioned by September 2011. On
 completion of phase II the Company will have matching rolling capacity
 for cast product at Salem unit.
 
 Vasind Works
 
 Projects under progress
 
 - Railway siding project is in an advanced stage of completion.
 
 - Project RLNG to replace expensive fuel usage, is expected to be
 completed by June 2011.
 
 5.  SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
 
 A.  Indian Subsidiaries
 
 1. JSW Bengal Steel Limited (JSW Bengal), its Subsidiaries Barbil
 Beneficiation Company Limited, JSW Natural Resources India Limited and
 its Associate JSW Energy (Bengal) Limited (JSWEBL)
 
 JSW Bengal Steel Limited was incorporated for setting up an Integrated
 Steel Plant in the State of West Bengal. The Company has already
 acquired and is in possession of Land required for this project.
 Boundary wall work at Salboni site has been completed to a major
 extent. The Company has also started construction of a residential
 complex by the name Ankur for the employees stay during construction
 of the plant. All the major survey work has already been completed at
 site. Power as well as water for construction is already tied up.
 Drilling and 3 Dimensional High Resolution Seismic Survey (3 DHRSS) are
 in progress at Kulti-Sitarampur Coal block by JSW Natural Resources
 India Ltd.
 
 JSW Bengal is planning to invest Rs. 16,000 crores in phase I of this
 project. The Company is drawing up plans for achieving financial
 closure.
 
 2.  JSW Jharkhand Steel Limited
 
 JSW Jharkhand Steel Limited was incorporated for setting up a steel
 plant in the State of Jharkhand. Approvals for setting up the project
 are being pursued.
 
 3.  JSW Steel Processing Centres Limited (JSWSPCL)
 
 JSWSPCL is a 100% subsidiary of the Company. The subsidiary company was
 set up as Steel Service Centre consisting of HR/ CR Slitter and cut to
 length facility with annual slitting capacity of 5,00,000 tonnes. The
 Company processed 4,97,112 tonnes of steel during the FY 2010-11, as
 compared to 3,04,718 tonnes in the previous year.
 
 During the previous year, JSWSPCL purchased 3 Slitting Lines and 1
 Multi Strand Blanking lines from its fellow subsidiary JSW Steel
 Service Centre (UK) Limited.
 
 4.  JSW Building Systems Limited (JSWBSL)
 
 JSWBSL, a 100% subsidiary, was incorporated with its main object as to
 design, make, prepare, develop, create, alter, replace, repair
 pre-fabricated building systems and technologies.
 
 B.  Overseas Subsidiaries
 
 1.  JSW Steel (Netherlands) B.V. (JSW Netherlands)
 
 JSW Netherlands is a holding Company for USA, UK and Chile based
 subsidiaries. It has participation in 49% equity of Georgia based Geo
 Steel LLC, incorporated under the laws of Georgia.  The Company has
 also invested in plate and pipe mill in USA, Coal mining assets in USA,
 iron ore mining concessions in Chile and Service Centres (since
 shutdown) at UK through the following step down subsidiaries.
 
 (a) JSW Steel Holding (USA) Inc. and its subsidiaries viz. JSW Steel
 (USA) Inc - Plate and Pipe Mill Operation and Periama Holdings LLC and
 its subsidiaries - West Virginia, USA based Coal Mining Operation.
 
 Plate and Pipe Mill operation
 
 For the year 2010-11, the Subsidiary Company produced 119,887 net
 tonnes of Plates and 42,148 net tonnes of Pipes and achieved capacity
 utilization of 11% and 8% respectively.  Considering the signs of
 improvement in US economy, it is expected that plate and pipe mills
 performance should improve during FY 2011-12.
 
 Coal Mining operation
 
 During the previous year, JSW Steel Holding (USA) Inc. acquired 100%
 equity interest in West virginia, USA based coal mining concessions
 along with barge load out facility.
 
 Out of the total seven mines acquired, one mine is currently
 operational. For other mines, process of getting statutory
 clearance/permits is at an advanced stage of approval.
 
 It is expected to produce approximately 0.50 million tonnes of Coal in
 the FY 2011-12 subject to receipt of requisite permits, which is
 planned to be ramped up to 3 million tonnes in over 3 years.
 
 (b) JSW Steel (UK) Limited and its Subsidiaries namely Argent
 Independent Steel (Holdings) Limited and JSW Steel Service Centre (UK)
 Limited While the European economy is still struggling to come out of
 recessionary condition, there is growth of Auto and Consumer Durables
 Industry in India and there is a logical growth of Steel Stockholding
 and Service Centre Industry in India. In these circumstances, Plant &
 Machinery of UK Service Centre consisting of 3 Slitting Lines and 1
 Multi Strand Blanking lines was sold to JSW Steel Processing Centres
 Limited, a subsidiary of the Company for relocation and use in India.
 
 (c) JSW Panama Holdings Corporation and its Chilean subsidiaries namely
 Inversiones Eurosh Limitada (IEL), Santa Fe Mining (SFM) and Santa Fe
 Puerto S.A (SFP)
 
 During the financial year 2010-11, SFM commenced the contract mining
 activity through dry process route with a capacity of 1 mtpa. The first
 shipment of Iron ore concentrate was made in April 2011.
 
 Work on putting up a wet beneficiation plant of 2.5 mtpa is currently
 being examined and necessary statutory and environmental approvals are
 being applied for.
 
 SFP, a subsidiary of SFM received maritime concession in April 2011 for
 developing a cape size port in North Caldera.  The environmental and
 other regulatory approvals are applied for and are in progress.
 
 2. JSW Natural Resources Limited (JSWNRL) and its Subsidiaries JSW
 Natural Resources Mozambique Lda (JSWNRML), JSW ADMS Carvão Lda
 
 JSW Natural Resources Limited was incorporated in Mauritius to pursue
 acquiring coal assets/other assets relating to steel business.
 
 JSW Natural Resources Limited formed a wholly owned subsidiary - JSW
 Natural Resources Mozambique Lda in Mozambique to acquire Coal assets
 and engaging in the business of prospecting and exploration of Coal,
 Iron Ore and Manganese.
 
 In one of the mining concession where coal is found, Company has
 started with detailed drilling activities to establish JORC compliant
 reserve estimates.
 
 JSW Natural Resources Mozambique Lda incorporated JSW ADMS Carvão Lda
 on October 8, 2010 wherein 85% stake is owned by JSWNRML and remaining
 15% stake is with minority shareholder. It has a mining concession in
 Zumbo District Tete Province. The Company has initiated drilling
 activities to prove and confirm the quality and quantity of coal
 reserve.
 
 C.  Joint Venture Companies
 
 1.  Geo Steel LLC
 
 Georgia based Joint Venture Geo Steel LLC in which your Company holds
 49% equity through JSW Steel (Netherlands) B.V, has set up a steel
 rolling mill in Georgia with annual production capacity of 175,000
 tonnes across 13.50 hectares
 
 in the industrial area of Rustavi in Georgia. The plant became
 operational during year 2009-10. It is designed to produce rebar
 through hot rolling process by using steel billets produced through the
 Electric Arc Furnace Route.
 
 Geo Steel produced 85,449 tonnes of Rebar and 95,901 tonnes of Billets
 during the FY 2010-11.
 
 2.  Rohne Coal Company Private Limited
 
 Your Company holds 49% equity in Rohne Coal Company Pvt. Ltd. (JSW
 group is holding 69.01%, including that of the Company), which is a
 Joint Venture with three other partners (two partners from outside the
 Group). Forest clearance and Mining lease proposal is being pursued
 with Government authorities.
 
 3.  MJSJ Coal Limited
 
 In terms of the Joint Venture Agreement to develop Utkal - A and Gopal
 Prasad (West) thermal coal block in Orissa, your Company agreed to
 participate in the 11% equity of newly formed MJSJ Coal Limited, Orissa
 along with four other partners.  The Government of India has decided to
 allot 1,522 acres of Gopal Prasad west area to MJSJ Coal Limited.
 Mahanadi Coalfields Ltd, a Public sector company holds 60% of the
 equity.  Land acquisition process is under progress.
 
 4.  Gourangdih Coal Limited
 
 Gourangdih Coal Ltd (GCL) is a 50:50 Joint Venture between JSW Steel
 Limited and Himachal EMTA Power Corporation Ltd (HEPL) incorporated for
 development and mining of coal from Gourangdih ABC Thermal coal block
 in the state of West Bengal. It is currently progressing on pre mining
 activities.
 
 5.  Toshiba JSW Turbine and Generator Private Limited
 
 Toshiba JSW Turbine and Generator Pvt. Ltd. has been incorporated with
 a shareholding of 75% by Toshiba Corporation Ltd., Japan, 20% by JSW
 Energy Ltd. and 5% by the Company, to design, manufacture, marketing
 and maintenance services of mid to large sized Supercritical Steam
 Turbines & Generators of size 500 MW to 1,000 MW.
 
 Trial production of blades started on March 2011. The construction and
 erection of main plant equipment erection is progressing well.
 
 6.  Vijayanagar Minerals Private Limited (VMPL)
 
 During the financial year 2010-11, VMPL supplied 2.20 million tonnes of
 Iron Ore from Thimmappanagudi Iron Ore Mines, vis-à-vis 1.76 million
 tonnes in the last FY 2009-10. VMPL has planned to supply 3.00 million
 tonnes during the next FY 2011-12.
 
 7.  JSW Severfield Structures Limited and its Subsidiary JSW Structural
 Metal Decking Limited
 
 JSW Severfield Structures Ltd (JSSL) has set up a Greenfield project
 for design, fabrication and erection of structural steelwork and
 ancillaries, including decking for construction projects with a total
 plant Capacity of 35,000 tonnes per annum at Bellary in Karnataka. The
 commercial production of the first fabrication line commenced in
 November 2010 and the second fabrication line was commissioned in March
 2011. The Company has produced a total of 3425 tonnes during the year.
 The order book of the Company stood at X 120 crores (8370 tonnes) as on
 March 31, 2011.
 
 JSW Structural Metal Decking Limited (JSWSMD), a subsidiary company of
 JSSL is engaged in business of the design, roll forming and
 installation of structural metal decking and ancillaries, including
 shear connectors, for construction projects with a total plant capacity
 of 10,000 tonnes per annum at Bellary in the
 
 State of Karnataka and started its commercial production in October
 2010.
 
 D.  Associate Companies
 
 (a) Jindal Praxair Oxygen Company Private Limited (JPOCPL)
 
 The oxygen plants of JPOCPL have been working satisfactorily primarily
 to meet the requirement of the steel plant operations at Vijayanagar
 Works. During the financial year 2010-11, the combined production of
 the oxygen plant module #1 and module # 2 of JPOCPL was: Gaseous oxygen
 - 1003.17 million Nm3; Gaseous nitrogen - 361.26 million Nm3; Liquid
 oxygen - 23.06 million Nm3; Liquid nitrogen - 30.25 million Nm3 and
 Argon - 11.01 million Nm3.
 
 (b) Ispat Industries Limited (IIL)
 
 IIL re-started its operations in December 2010. It produced 0.729
 million tonnes of HR Coils during the Quarter January to March 2011,
 and capacity utilization achieved was 88%. The volume of sales
 including downstream products improved to 0.712 million tonnes with an
 EBIDTA of Rs. 407 crores. Reflecting the synergies of acquisition, ML
 turned into a profit making Company reporting a net profit of Rs. 70
 crores.
 
 The Board of Directors have taken note of the matters to which the
 Auditors of IIL have drawn attention in their report, regarding overdue
 sundry debtors amounting to Rs. 571.60 crores, non-reconciliation of
 credit balances of Rs. 118.69 crores and raw material in-transit
 amounting to Rs. 104.83 crores.
 
 The Board of Directors have also taken note of the confidence expressed
 by the management of ML confirming that these matters will not have any
 material impact on the financial statements of ML and relying on this,
 no provisioning has been considered necessary by the Board in respect
 of these items.
 
 6.  CREDIT RATING
 
 The credit rating of your Company for the Long Term Debt/Facilities/
 Non Convertible Debentures has been upgraded to AA (Double A) from
 AA- (Double A minus) by credit rating agency Credit Analysis & Research
 Ltd. (CARE). The Short Term Debt /Facilities continue to be rated at
 the highest rating of PR1+ (PR one plus).
 
 The revision in the long term rating takes into account the improved
 capacity utilization, profitability margins and reduced leverage on
 account of improved cashflows besides equity infusion by JFE
 Corporation, Japan and the promoters.
 
 The rating continues to derive strength from your Companys significant
 presence in the steel sector, management capability and well
 diversified mix of value added products.
 
 AA rating by CARE indicates a high safety for timely servicing of
 debt obligations and very low credit risk.
 
 PR1+ rating is the highest rating in the category and indicates a
 strong capacity for timely payment of short term debt obligations and
 lowest credit risk.
 
 7.  FIXED DEPOSITS
 
 Your Company has not accepted any fixed deposits from the public and is
 therefore not required to furnish information in respect of outstanding
 deposits under Non Banking Non Financial Companies (Reserve Bank)
 Directions, 1966 and Companies (Acceptance of Deposits) Rules, 1975.
 
 8.  SHARE CAPITAL
 
 Pursuant to the decisions taken in the Board meeting held on July 27,
 2010 and the Extra Ordinary General Meeting held on August 26, 2010,
 and in terms of the Subscription Agreement entered into by the Company
 with JFE Steel Corporation, Japan (JFE) on July 27, 2010, the Share
 Allotment Committee of the Board of Directors in its meeting held on
 September 08, 2010 had allotted 1 (one) Fully and Compulsorily
 Convertible Debenture of face value of Rs. 48,007,197,458 (FCD) to JFE.
 
 Upon the mandatory and automatic conversion on October 07, 2010 of the
 aforesaid FCD held by JFE, the Share Allotment Committee of Directors
 of the Company in its meeting held on October 08, 2010 allotted
 32,004,798 (thirty two million four thousand seven hundred ninety
 eight) Equity Shares of the Company, of face value of Rs. 10/- each,
 fully paid up, to JFE, in accordance with the terms and conditions of
 the FCD.
 
 Further, pursuant to the decisions taken by the Board of Directors in
 its meeting held on October 26,2010 and by the Members by way of a
 Postal Ballot, and in terms of the Subscription Agreement entered into
 by the Company with JFE, on July 27, 2010, the Share Allotment
 Committee of Directors of the Company in its meeting held on December
 14, 2010 allotted:
 
 a) 9,77,906 (Nine lakhs seventy seven thousand nine hundred and six)
 Equity Shares of the Company, of face value of Rs. 10/- each, fully paid
 up, to JFE, on a preferential basis at a price of Rs. 1,500/- per Equity
 Share; and
 
 b) 3,085,814 (Thirty lakhs eighty five thousand eight hundred and
 fourteen) Equity Shares of Rs. 10 each, in favour of the local custodian
 of the Depository i.e. Citibank N.A., underlying equivalent number of
 non-voting, non-transferable Global Depository Receipts (GDRs) issued
 to JFE Steel Corporation, Japan.
 
 Accordingly, during the year under review, your Companys paid up
 equity share capital has increased from Rs.187,04,86,820 (comprising
 18,70,48,682 equity shares of Rs. 10 each) to Rs. 223,11,72,000 (comprising
 22,31,17,200 equity shares of Rs.10 each).
 
 9.  WARRANTS ISSUED TO SAPPHIRE TECHNOLOGIES LIMITED, A PROMOTER GROUP
 ENTITY ON A PREFERENTIAL BASIS
 
 Pursuant to the decisions taken in the Board meeting held on May 03,
 2010 and the Extra Ordinary General Meeting held on June 02, 2010, the
 Share Allotment Committee of Directors of the Company in its meeting
 held on June 16, 2010 allotted 1,75,00,000 (One crore seventy five
 lakhs) Warrants to Sapphire Technologies Limited, a Promoter Group
 Company, on a preferential basis.
 
 Each warrant entitles the holder to apply for and be allotted one
 equity share of the Company of par value of Rs. 10/- each, at a price of
 Rs. 1,210/- per equity share, at any time within 18 months from the date
 of allotment of the warrants, i.e. within December 15, 2011.
 
 During the year under review, the Warrant holder did not exercise the
 option to convert any of the warrants held by it into equity shares of
 the Company.
 
 10.  TECHNICAL COLLABORATION WITH JFE STEEL CORPORATION, JAPAN
 
 In continuation of the Strategic Collaboration Agreement entered into
 on November 19, 2009, between the Company and JFE Steel Corporation
 (JFE), the execution of several definitive agreements, which
 represent the next phase of the multi-faceted collaboration plan
 consistent with the long-term vision of both the parties for future
 growth were concluded on July 27, 2010.
 
 Pursuant to the execution of the aforesaid agreements on July 27, 2010
 between the Company and JFE for the supply of certain technology and
 the provision of certain technical assistance to the Company, including
 foreign collaboration agreements, technical assistance agreement for
 automotive steel and general technical assistance agreement for plant
 performance improvement, JFE has become a foreign collaborator of the
 Company.
 
 This collaboration would help the Company to achieve operational
 excellence and also move up in the value chain with access to cutting
 edge technology.
 
 Through this unique collaboration, your Company gains:
 
 - Access to cutting edge technologies.
 
 - Access to fast-growing automotive market.
 
 - Lower cost of production through operational excellence; and
 
 - Deleveraged balance sheet to fuel next phase of growth.
 
 11.  ACQUISITION OF MAJORITY STAKE IN ISPAT INDUSTRIES LIMITED
 
 Ispat Industries Limited (IIL), with a production capacity of 3.3 mtpa,
 is inherently seen as a pioneering company that brought new
 technologies into India like the Twin Shell ConArc furnace and Thin
 Slab Casting facility. The Twin Shell ConArc furnace provides the steel
 making facility with a great amount of flexibility. Along with the
 state-of-the-art Compact Strip Mill, Ispat also has an in-house jetty,
 with a cargo handling capacity of 12 mtpa, which gives it an added
 advantage.
 
 IIL has been incurring losses constrained by inadequate working
 capital, lack of integration and expensive debt and has been looking
 for a strategic investor to carry forward the business and growth of
 the Company. The Company in turn has been looking at growth
 opportunities/expansions to reach 34 mtpa by 2020 and has plans to
 further expand steelmaking capacity in West Bengal and Jharkhand with
 10 mtpa capacity each. Any greenfield project has a gestation period of
 about 3-4 years. While many greenfield projects have been announced and
 MOUs executed, however due to challenges towards land acquisition,
 environmental and various other Government clearances, not many
 greenfield projects are expected to get into operations in the near
 future.
 
 Considering the synergies and strategic fit, the Company initiated
 dialogue with the management of IIL for strategic collaboration and
 arrived at a proposal whereby the Company would acquire a majority
 stake in IIL.
 
 Accordingly, in accordance with the Subscription cum Shareholders
 Agreement dated December 20, 2010, the Company has acquired
 1,08,66,49,874 equity shares of Ispat Industries Ltd. (IIL) on January
 24, 2011 (aggregating to 45.53% of the equity share capital of IIL as
 on date).
 
 In view of the above, the Company also made a mandatory open offer for
 the shares of IIL (Open Offer) under Regulations 10 and 12 of the
 Securities & Exchange Board of India (Substantial Acquisition of Shares
 & Takeovers) Regulations, 1997 (Takeover Regulations). The Open Offer
 was made to the shareholders of IIL to acquire 64,72,38,458 Equity
 Shares of IIL of face value of Rs. 10 each representing in the aggregate
 20% of the Fully Diluted Equity Share Capital of IIL at a price of Rs.
 20.54 (Rupees twenty and paise fifty four only) per fully paid up
 equity share, which was further revised to Rs. 22.25 (Rupees twenty two
 and paise twenty five only) per fully paid up equity share on March 24,
 2011.
 
 The Offer was open from March 17, 2011 to April 05, 2011 during which
 time the Company received valid applications for sale of 8,99,40,890
 equity shares from the shareholders of IIL. The Company has accepted
 all such valid applications and transferred the full amount of the
 purchase consideration to the Special Account opened for payment to the
 successful applicants on April 8, 2011.
 
 Post the above acquisition, the Company holds 1,17,65,90,764 shares
 representing 49.30% of the total paid-up capital of Ispat Industries
 Limited as on that date.
 
 Your Company has also put in a systematic plan to turnaround Ispat
 Industries by developing synergies in the competitive steel market.
 The Company will also facilitate sourcing of key inputs like coke,
 pellet and power which will bring down the cost of production
 substantially.  The Companys extensive Pan India Network will provide
 IIL with better market penetration. By improving the levels of
 efficiency and by rationalizing the sou rcing of Iron ore lumps and
 fines, the Company will reduce the cost of production.
 
 12.  SEARCH AND SEIZURE OPERATIONS BY INCOME TAX AUTHORITIES
 
 The Income-tax Authorities carried out a search and seizure operations
 at certain locations of the Company in March 2011. The Company
 co-operated with the authorities and various statements were recorded
 during the course of these operations. The Company has also informed
 the stock exchanges about the search and seizure operations by the
 Income-tax Authorities.
 
 The Company has not received any communication from the Income- tax
 Authorities till date regarding documents seized during the search
 proceedings having any potential financial or tax implications on the
 Company. No notice has been received from the Income-tax Authorities
 till date. The Income-tax Authorities are yet to conclude the search
 and seizure proceedings on the Company.
 
 13.  FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)
 
 During the F.Y 2007-2008, your Company had issued 3250 Zero Coupon
 Foreign Currency Convertible Bonds (FCCBs) of US$ 1,00,000 each due
 2012 (ISIN XS0302937031), aggregating to US$ 325 million to
 international investors to part finance the capital expenditure
 programme of the Company. Each Bond is convertible into equity shares
 of the face value of Rs. 10 each of the Company at a conversion price of
 Rs. 953.40 per share, at any time on or after August 7, 2007 until the
 close of business on June 21, 2012, unless previously redeemed,
 converted or purchased and cancelled. The Bonds, which are not
 redeemed, converted or purchased and cancelled, are redeemable on June
 28, 2012 at an amount equal to the principal amount of the Bonds
 multiplied by 142.801 per cent.
 
 Out of the aforesaid 3,250 Bonds issued, 8 bonds were converted into
 33,799 equity shares which were allotted on 4 January 2008.
 
 The Company repurchased and cancelled 15.36% of its remaining
 outstanding Zero Coupon Foreign Currency Convertible Bonds of US$
 1,00,000 each, aggregating to US$ 49.80 million (US$ 47.80 million in
 March 2009 and US$ 2 million in April 2009) in accordance with the A.P.
 (DIR Series) Circular No. 39 dated December 8, 2008 issued by the
 Reserve Bank of India.
 
 The principal amount of Bonds outstanding after this repurchase and
 cancellation is US$ 274.40 million.
 
 14.  DIRECTORS
 
 Mr. Seshagiri Rao M.V.S, Mr. Sudipto Sarkar, Mr. Jayant Acharya and Mr.
 Kannan Vijayaraghavan, Directors, retire by rotation at the forthcoming
 Annual General Meeting and being eligible, offer themselves for
 re-appointment.
 
 The proposals regarding the re-appointment of the aforesaid Directors
 are placed for your approval.
 
 Other changes in the Board of Directors of your Company during the year
 under review are as follows:
 
 JFE Steel Corporation nominated Mr. Shigeru Ogura as its nominee on the
 Board of your Company w.e.f. September 08, 2010. Subsequently, JFE
 nominated Mr. Yasushi Kurokawa as its nominee on the Board of the
 Company, in place of Mr. Ogura w.e.f.  May 16, 2011.
 
 Karnataka State Industrial Investment and Development Corporation
 Limited (KSIIDC) nominated Mr. M. Maheshwar Rao, IAS as its nominee on
 the Board of your Company in place of Mrs. Vandita Sharma, IAS w.e.f.
 February 04, 2011.
 
 Your Directors place on record their deep appreciation of the valuable
 services rendered by Mr. Shigeru Ogura and Mrs. Vandita Sharma, IAS
 during their tenure as Directors of the Company.
 
 15.  AUDITORS
 
 M/s. Deloitte Haskins & Sells, Chartered Accountants, auditors of the
 Company, retire at the conclusion of the ensuing Annual General Meeting
 and have expressed their willingness to act as auditors of the Company,
 if appointed, and have further confirmed that the said appointment
 would be in conformity with the provisions of Section 224 (1B) of the
 Act.
 
 16.  PARTICULARS REGARDING CONSERVATION OF ENERGY AND TECHNOLOGY
 ABSORPTION
 
 Information in accordance with the provisions of Section 217(1)(e) of
 the Companies Act, 1956 read with Companies (Disclosure of Particulars
 in the Report of the Board of Directors) Rules, 1988 regarding
 conservation of energy, technology absorption and foreign exchange
 earnings and outgo is given in the statement annexed (Annexure A)
 hereto forming part of the report.
 
 17.  ENVIRONMENTAL INITIATIVES
 
 The Company has undertaken various measures to address environmental
 issues at its Plant Locations:
 
 - Environment Control Laboratories have been developed for carrying out
 monitoring of water, waste-water and air pollutants.  The monitoring
 carried out includes ambient air, stack and in- plant sampling,
 drinking water, and effluents.
 
 - Every effort is made to prevent pollution by recycling solid wastes
 and liquid treated waste-water for reuse in the premises.
 
 18.  PARTICULARS OF EMPLOYEES
 
 The information required under Section 217(2A) of the Companies Act,
 1956 read with the Companies (Particulars of Employees) Rules, 1975 is
 set out in the Annexure to the Directors Report. Having regard to the
 provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report
 excluding the aforesaid information is being sent to all the members of
 the Company and others entitled thereto. Any member interested in
 obtaining such particulars may write to the Company Secretary for a
 copy.
 
 19.  AWARDS AND ACCOLADES
 
 Your Company and its employees received the following awards during the
 year:
 
 1.  PMs Trophy Award: (Runners-up Trophy known as Steel Ministers
 Trophy) for the best performing integrated Steel Plant in the country
 for the year 2007-08, awarded on July 31, 2010.
 
 2.  National Award for Excellence in Energy Management 2010: Excellent
 Energy Efficient Unit Award 2010 at National Award for Excellence in
 Energy Management 2010 conducted by CII - Godrej GBC on September 1 &
 2, 2010 at Chennai Trade Centre, Chennai.
 
 3.  National Sustainability Award 2010: First Prize amongst the
 Integrated Steel Plants Category. The award was presented at 48th
 National Metallurgists Day Celebrations and 64th Annual Technical
 Meeting of Indian Institute of Metals, on November 14, 2010 at
 Bangalore.
 
 4.  CII-EXIM Award 2010: Commendation Certificate for Significant
 Achievement for Business Excellence by Confederation of Indian
 Industries, on November 14, 2010 at Bangalore.
 
 5.  National Award for Excellence in Water Management 2010:
 
 Excellent Water Efficient Unit Award 2010 at National Award for
 Excellence in Water Management 2010 conducted by CII, on December 10 &
 11, 2010 at Hyderabad.
 
 6.  IMC Ramkrishna Bajaj National Quality Award 2010:
 
 Commendation Certificate in the manufacturing category on March 16,
 2011 at Mumbai.
 
 7.  Global HR Excellence Award 2010 for Innovative HR Practices at Asia
 Pacific HRM Congress held on September 3, 2010 at Bangalore.
 
 8.  Best Practices in Talent Management Award at Talent 2010 hosted by
 Osney Media Ltd on November 10 & 11, 2010 at London.
 
 9.  Institution Building Award at Global HR Excellence Awards World
 HR hosted by World HR Congress on February 11, 2011 at Taj Lands End,
 Mumbai.
 
 Individual and Team Recognitions:
 
 1.  Mr. Seshagiri Rao M.V.S, Jt. Managing Director & Group CFO was
 awarded the Best Performing CFO in Metals & Commodities Sector by
 CNBC TV18 at a glittering ceremony in Mumbai on October 27, 2010.
 
 2.  Ms. Sharmila Bannerjee, Vice President- Corporate Communication,
 was awarded WILLS Womens Choice Award in Mumbai on October 28, 2010.
 
 3.  Mr Prachethan Kumar, Manager (R&D and SS), was conferred with
 Young Metallurgist of the Year Award - 2010 at the 48th National
 Metallurgists Day Celebrations held on November 14, 2010 at Bangalore.
 
 20.  CORPORATE GOVERNANCE
 
 Your Company has complied with the requirements of Clause 49 of the
 Listing Agreement regarding Corporate Governance. A report on the
 Corporate Governance practices, the Auditors Certificate on compliance
 of mandatory requirements thereof and Management Discussion and
 Analysis are given as an annexure to this report.
 
 21.  DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirements under Section 217 (2AA) of the Companies
 Act, 1956, your Directors hereby state and confirm that:
 
 (i) in the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures;
 
 (ii) they 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 period;
 
 (iii) they have taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of this
 Act for safeguarding the assets of the Company and for preventing and
 detecting fraud and other irregularities;
 
 (iv) they have prepared the annual accounts on a going concern basis.
 
 22.  APPRECIATION
 
 Your Directors take this opportunity to express their appreciation for
 the cooperation and assistance received from the Government of India,
 Republic of Chile, Central Government of Mozambique, USA and UK; the
 Government of Karnataka, Maharashtra, Tamil Nadu, West Bengal and
 Jharkhand; the financial institutions, banks as well as the
 shareholders and debenture holders during the year under review. The
 Directors also wish to place on record their appreciation of the
 devoted and dedicated services rendered by all employees of the
 Company.
 
                           For and on behalf of the Board of Directors
 
                                                   Savitri Devi Jindal
 
 Date: May 16, 2011                                        Chairperson