To The Members of SATHAVAHANA ISPAT LIMITED,
 
 The Directors have pleasure in presenting the 23rd Annual Report
 together with the Audited Accounts of the Company for the year ended
 31st March, 2012.
 
 FINANCIAL RESULTS:
 
 Your Directors report the following financial results for the year
 2011-12:
                                                         (Amount in Rs)
 
 SL   Particulars                               Year ended   Year ended
 NO                                             31-03-2012   31-03-2011
 
 1.   Gross Revenue from operations             6885378047   7075798516
 
 2.   Other Income                               120604176     98096143
 
 3.   Operating profit /(loss) before finance 
      costs and depreciation                    (237348923)  1234151494
 
 4.   Finance costs                              433439056    276148493
 
 5.   Depreciation                               198998588    167721074
 
 6.   Profit / (loss) before tax                (869786567)   790281927
 
 7.   Tax expense                                (75307698)   224874986
 
 8.   Net Profit / (loss) after tax             (794478869)   565406941
 
 9.   Add: Profit brought forward from last 
      year                                       698159073    455135505
 
 10.  Available for appropriation                (96319796)  1020542446
 
 11.  Less: Transfer to General Reserve                  0    250000000
 
 12.  Less: Proposed Dividend                            0     62280000
 
 13.  Less: Provision for Corporate 
      Dividend Tax                                       0     10103373
 
 14.  Balance carried forward                    (96319796)   698159073
 
 15.  Earnings/(loss) per Equity Share-Basic        (22.96)       16.91
 
 16.  Earnings/(loss) per Equity Share-Diluted      (22.96)       16.81
 
 Your Directors report that the performance of the Company during the
 year is satisfactory as the Company is able to maintain its sales trend
 despite serious and unprecedented setbacks on raw material; worst ever
 depreciation of Rupee vis-a-vis US Dollar and slackening demand. The
 mining ban in the Bellary-Hospet belt adversely affected not only the
 Pig Iron production but also Metallurgical Coke as other Steel units in
 the belt who were buying the said product from your Company also were
 affected. Although the Company was able to maintain the sales trend,
 yet the profitability turned to be negative. The gross revenue from
 operations at B6885378047/- is marginally lower as compared to previous
 year''s turnover of B7075798516/-. The year ended with a Loss before tax
 of B869786567/- as against profit before tax of B790281927/- in the
 previous year. Accordingly, the Loss per share accounted for at B22.96
 as compared with earnings per share of B 16.91 in the previous year.
 
 DIVIDEND:
 
 The Board of Directors has not recommended any Dividend for the year
 2011-12, due to very tight cash flows in view of the losses suffered by
 the Company during the year and funds commitment for implementation of
 the integrated expansion project at Haresamudram plant.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT:
 
 Pursuant to the requirement under section 217 (2AA) of the Companies
 Act, 1956 with respect to Directors'' Responsibility Statement, Your
 Directors hereby confirm that:
 
 i) The applicable Accounting Standards have been followed in the
 preparation of annual accounts for the financial year 2011-12;
 
 ii) The accounting policies selected were applied consistently and the
 judgements and estimates made are reasonable and prudent so as to give
 a true and fair view of the state of affairs of the Company as at 31st
 March 2012 and of the Loss of the Company for the year ended on the
 date;
 
 iii) Proper and sufficient care has been taken 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 annual accounts have been prepared on a going concern basis.
 
 AUDIT COMMITTEE:
 
 The Audit Committee comprises Chairman -Shri K.Thanu Pillai,
 independent Director and three other independent Director members -Shri
 Khaja Ruknuddin, Shri Syed Anis Hussain and Shri S.N.Rao. The Audit
 Committee at it''s meeting held on 30th May 2012 has considered and
 approved the Audited Accounts for the financial year ended 31st March
 2012. The Audited Accounts for the financial year ended 31st March
 2012, as approved and recommended by the Audit Committee, do not
 require any explanations from the Board.
 
 CORPORATE GOVERNANCE:
 
 Pursuant to Clause 49 of the listing agreement entered into by the
 Company with the Stock Exchanges where the shares of the Company are
 listed, Company is required to comply with the Code of Corporate
 Governance for the financial year under review. Accordingly, the
 reports on Corporate Governance and Management Discussion and Analysis
 together with Auditors'' Report on compliance of Corporate Governance
 are attached to this report and forms part of the Annual Report.
 
 PROJECT:
 
 Works to de-bottleneck idle capacity in the Turbine Generator capacity
 by installing Coal fired CFBC Boiler as also augmentation of additional
 Co-generation Power of 10 MW from the expanded Coke making facility,
 whereby increasing the installed Power generating capacity to 50 MW has
 been commissioned on 08th March 2012. The Integrated expansion project
 at Haresamudram village for manufacture of DI Pipes, setting up Sinter
 plant and captive Power plant as also the modernisation of Blast
 Furnace is in progress.
 
 DIRECTORS:
 
 Shri Syed Anis Hussain and Shri S.N.Rao, Directors are liable for
 retirement by rotation at the end of the ensuing 23rd Annual General
 Meeting and being eligible, offers themselves for re-appointment at the
 said Annual General Meeting.  AUDITORS:
 
 M/s. P.V.R.K. Nageswara Rao & Co., Chartered Accountants, Hyderabad
 retire as auditors at this Annual General Meeting and are eligible for
 reappointment.
 
 EMPLOYEES:
 
 The particulars of employees required to be furnished pursuant to
 section 217(2A) of the Companies Act, 1956 read with the Companies
 (Particulars of Employees) Rules, 1975, as amended, are not given as
 there were no employees drawing more than the stipulated limits.
 
 SHARE CAPITAL:
 
 During the year Ganapati Adusumilli Fininvest Private Limited, the
 allottee of Share Warrants, has exercised option of conversion of
 1830000 Share Warrants (out of 3800000 Share Warrants outstanding at
 the beginning of the year) to 1830000 Equity Shares. Accordingly, as on
 31st March 2012, 1970000 Share Warrants are outstanding where an amount
 of Rs 15/- per Share Warrant is paid up aggregating to Rs
 2,95,50,000/-.  Subsequent to the above issue / allotment the Paid-up
 share capital has gone up by Rs 1,83,00,000/- and securities premium by
 Rs 9,15,00,000/-.  Accordingly the Paid-up capital now stands at Rs
 36,43,00,000/- and Securities Premium Account at Rs 50,65,00,000/- 
 
 DEMATERIALISATION OF EQUITY SHARES:
 
 The Agreements entered into by the Company with the two Depositories
 viz., National Securities Depository Limited (NSDL) and Central
 Depository Services (India) Limited (CDSL) for dematerialisation of
 shares are in force and the Company''s Shares are in dematerialised mode
 under ISIN No. INE 176C01016. As per the Securities and Exchange Board
 of India(SEBI) directives, the Equity Shares of the Company are to be
 compulsorily traded in dematerialisation form with effect from 26th
 February 2001. In view of the significant benefits that accrue on
 dematerialisation of securities, members may avail the facility.
 
 LISTING OF SHARES ON STOCK EXCHANGES:
 
 The Equity Shares of the Company are regularly traded on the Bombay
 Stock Exchange Limited (BSE) (Stock Code:526093) and The National Stock
 Exchange of India Limited (NSE) (Stock Code: sathaispat). The listing
 fee to these stock exchanges has been paid upto date. The listing on
 Hyderabad Stock Exchange Limited (HSE) (Stock Code: SVI) is not in
 force as the said exchange was de-recognised by the Securities and
 Exchange Board of India.
 
 STATUTORY INFORMATION:
 
 Information on conservation of energy, technology absorption, foreign
 exchange earnings and out go required to be disclosed under section 217
 (1) (e) of the Companies Act, 1956, is given in the Annexure forming
 part of this report.
 
 FIXED DEPOSITS:
 
 During the year the Company has not accepted fixed deposits within the
 meaning of Section 58-A of the Companies Act, 1956. There are no
 overdue deposits or outstanding deposits as on the Balance Sheet date.
 ACKNOWLEDGMENTS:
 
 Your directors take this opportunity to express their grateful thanks
 to Canara Bank, State Bank of Hyderabad, Andhra Bank, Shareholders,
 Central and State Governments and valued suppliers and customers for
 their co-operation and support. The Board also places on record its
 appreciation of the valuable services rendered by the employees at all
 levels of the Company.
                                         for and on behalf of the Board
 
 Place: Hyderabad                                     (K. Thanu Pillai)
 
 Date: 30.05.2012                                              Chairman