Directors Report of Ispat Profiles India Ltd.

Jun 30, 2010

The Directors/present the Nineteenth Annual Report of the Company together with the Audited Accounts for the 18 months financial period ended 30th June, 2010. FINANCIAL RESULTS

(Rs. In lacs)

For the 18 months For the 18 months financial period ended financial period ended 30th June, 2010 31st December, 2008

a. Sales (Net) - -

b. Other Income 3.71 11.15

c. Profit/(Loss) before Finance Charges,

Depreciation and non-cash charges (310.32) (234.22)

d. Finance Charges 0.04 4.60

e. Profit/(Loss) before Dep reciation, Non-cash charges, extra ordinary item and Tax (310.36) (238.82)

f. Depreciation/Non-cash charges/extra

ordinary item 5492.74 5492.73

g. Fringe Benefits Tax 0.37 3.28

h. Profit/(Loss) after Tax for the period (5803.47) (5734.83)

i. Profit/(Loss) brought forward (79122.11) (73387.28)

j. Profit/(Loss) carried to Balance Sheet (84925.58) (79122.11)

OPERATIONS

During the period under review there was no operation in view of the continuing lock out. Continuous efforts are on for early restart and revival of operations under the aegis of Honourable Board for Industrial and Financial Reconstruction (BIFR). The Company has sought relief and concession from the secured lenders and other agencies associated with it and is hopeful of receiving the required support for its revival.

Your Company has been taking adequate insurance coverage for the assets, based on the opinion of an approved valuer, on market value (indemnity) basis.

PROSPECTS

The steel industry has over come the impact of world recession of 2008 and has registered significant growth of 8 to 8.75% in 2009 and 2010 taking the extended GDP growth to 7.2%. There has been a spurt in demand in sectors like automobile, infrastructure, housing etc. leading to increase in steel consumption and the company is hopeful of steady improvement in the steel industry for the years to come.

The country which is already marked as fifth largest producer of steel is likely to become the second largest steel producer in the world by 2015-16.

With the Government continuing to encourage investment in various sectors / facilities including infrastructure facilities, future prospects for the steel industry are good.

REHABILITATION SCHEME UNDER BIFR

The Scheme submitted by the Operating Agency was circulated by the Honourable BIFR in December, 2009 and the views of all the associated agencies have been heard. The Company has filed an appeal before Honourable AAIFR against directions of Honourable BIFR which included, among others, negotiation with the secured lenders.

LABOUR MATTER

During the period under review, Honourable Supreme Court of India upheld the order of the Government of

Maharashtra prohibiting the continuation of lock out declared by the Company.

The Company has sought the support of workers as well for the early restart and revival of operations and has been holding discussions with them from time to time in an effort to gamer their support for the early revival.

EXTENSION OF CLOSURE OF FINANCIAL YEAR

The closure of the financial year was extended from 31st December, 2009 to 31st March, 2010 in view of refusalof entry of company officials into plant premises by a section of the workers. The closure of the financial year was further extended to 30th June, 2010 considering the difficulty caused by the continued refusal, by a section of workers, to allow entry of Company officials into the plant premises and with a view to present the latest position on the affairs of the Company, including the status on Rehabilitation Scheme, to the Members. In view of the financial period extending up to 18 months, the company sought and obtained the approval of Registrar of Companies, West Bengal.

The Company also sought and obtained approval from Registrar of Companies, West Bengal, for extension of time for holding the next Annual General Meeting of the members of the Company as a natural consequence to the extension of closure of financial year upto 30th June, 2010.

DIRECTORS

During the period under review, Honourable Board for Industrial and Financial Reconstruction (BIFR) appointed Shri Santosh Datta, Ex-IRS, as Special Director on the Board of Company w.e.f. 12.05.2010. Your Board while welcoming him as Director expressed the hope that his wide knowledge and vast experience will help the company in its efforts for early restart and revival of operations.

Mr. Deepak Vyankatesh Kulkami retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Shri J. P. Khemka was re-appointed as Whole-time Director (Finance & Commercial) for a further period of five years w.e.f. 1st October, 2009. A special resolution seeking members approval is proposed and the Board recommends the same to members.

The required details in respect of Shri Deepak Kulkami and Shri J. P. Khemka are attached to the notice convening the Annual General Meeting.

The Non Executive Directors do not have any pecuniary relationship or transaction vis-a-vis company except that they are paid sitting fees and reimbursed expenses for attending Board, Audit and Finance Committee meetings.

None of the Non Executive Directors holds any share in the company. There is also no relationship inter-se between the Non Executive Directors.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies Act, 1956, with respect to the Directors Responsibility Statement, your Directors state that:-

1. In the preparation of the annual accounts for the 18 months financial period ended 30th June, 2010 applicable accounting standards have been followed except as otherwise disclosed elsewhere in the annual accounts, and that there has been no material departure.

2. The accounting policies are consistently applied and they have made reasonable and prudent judgements and estimates so as to give a true and fair view of the state of affairs of the Company at the end of the financial period and of the loss of the Company for that period.

3. They have taken proper and sufficient care for the maintenance of adequate accounting records m accordance with the provisions of the Companies Act, 1956 for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The annual accounts for the financial period ended 30th June, 2010 have been prepared on a going concern basis.

The above statement has been taken note of by the audit committee at its meeting held on 30th September, 2010.

AUDITORS

The Statutory Auditors M/s.*Singhi & Co., Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and have expressed.their willingness to be re-appointed as Auditors. The Company has obtained a certificate from the Auditors, under section 224(1 B) of the Companies Act, 1956 to the effect that the re-appointment, it made, will be within the limits specified in the said section. The company has also got confirmation that they hold valid certificate from the Peer Review Committee of the Institute of Chartered Accountants of India.

The Company has also re-appointed M/s Shah Khandelwal Jain & Associates, Chartered Accountants, as internal auditors, for another year from 1st October, 2010 to 30th September, 2011.

AUDITORS REPORT

The Auditors have commented on certain matters referred to in the notes forming part, of the accounts and havequalified their report. Your Board wishes to state that the notes referred to by them are fully informatory and self explanatory requiring no further elucidation. The Board, however, wishes to refer to the relevant paras of auditors report and reiterate what has been stated in the notes on accounts as follows:

a) Para i, vi and vii - Relevant notes on accounts are self explanatory and thus requires no further explanation / clarification in respect of the same.

b) Para ii and iii - The company has not provided interest on loans from Bodies Corporate, loans /debentures from Financial Institutions, Banks, MSEDCL and others since the same are part of relief and concession sought from these agencies and envisaged in the Draft Rehabilitation Scheme submitted to BIFR for restart and revival of operations.

c) Para iv - the company has not provided wages etc. for the lock out period as matter is pending in industrial court Pune and the liability is yet to be ascertained and the matter is sub judice.

d) Para v - Companys accounts with Banks and Financial Institutions continue to remain as NPA in their books of accounts and hence balance confirmation is not being received from them from the period the accounts became NPA.

Your directors further wish to state that a request for reschedulement of sales tax dues has been incorporated in the Scheme submitted to BIFR and in view of the same, the sales tax dues remain payable for a period of more than six months.

COSTAUDIT

In view of the continued closure of operations, due to lock out, the company has proposed to make an application to the Central Government seeking exemption from conducting the cost audit in respect of 18 months financial period ended 30th June, 2010.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE

In terms of Clause 49 of the Listing Agreement with the Stock Exchanges, the Management Discussion and Analysis Report forming part of Directors Report, for the year under review, forms part of the Annual Report.

A separate section in the Directors Report on Corporate Governance together with the Auditors Certificate thereon forms part of the Annual Report.

CODE OF CONDUCT

The Board of Directors has laid down Code of Conduct for its members and Management Personnel. Board Members and the Management Personnel have affirmed compliance with the Code for the financial period 2009 2010. In terms of Clause 49 of the Listing Agreement, the Corporate Governance Report contains, as annexure, a separate declaration of affirmation.

PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND

FOREIGN EXCHANGE EARNINGS AND OUTGO

In view of the closure of operations during the period under review there are no transactions which are required to be disclosed under Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988.

A statement of particulars, as required, is however annexed hereto and forms part of this report.

EMPLOYEESPARTICULARS

In accordance with the provisions of section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the Statement of Particulars of employees containing the required information forms part of this report.

However as per provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956 the Annual Report is being sent to all the members excluding the statement of Particulars of the Employees. The statement of particulars of employees referred to herein above shall be made available for inspection at the registered office of the Company during working hours for a period of 21 days before the date of Annual General Meeting. Any member interested in obtaining a copy of the said statement may write to the Company Secretary at the registered office of the Company.

PERSONNEL

The Company and the employees maintained cordial and congenial atmosphere during the period under review.

APPRECIATION

Your Board thanks the Banks, Financial Institutions, Government, Semi Government Agencies and othersassociated with the Company for their support to the company in its efforts for revival. Your Directors value the commitment and confidence of the fraternity of Members and look forward for their continuing support.



FOR AND ON BEHALF OF THE BOARD

DR.BAJARANGI YADAVA

Director J. P. KHEMKA

Director (Finance &

Commercial)

Place: Pune

Date :30th September, 2010