Dear Members,
On behalf of the Board of Directors, I take great pleasure in welcoming all of you today at our 21st Annual General Meeting.
I am sure by now you would have had the opportunity to review the Directors’ Report and the Audited Accounts for the financial year 2005-2006.

GLOBAL STEEL INDUSTRY OUTLOOK :

There was extensive volatility in a Steel Industry globally and Industry is facing significant pressure from China due to
over-capacity. We expect pressure on market owing to increased Chinese capacity. With increase in price of crude oil to more than US $ 78 per barrel, the price of natural resources of minerals & energy are rising worldwide. However, we are taking measures to diversify our product range & customer base and to shift focus to value added segments to insulate us from market volatility.

INVESTMENTS MADE DURING THE YEAR 2005-2006 :

During the financial year 2005-2006, we have invested about
Rs. 240 Crores to increase our capacity and also to upgrade our equipments to enhance our quality, yield and efficiency to ensure the flexibility of product-mix.

During the year our new Colour Coating Line was commissioned and the Cold Rolled Coils/Sheets capacity was increased by 33% from 450,000 MT to 600,000 MT

INVESTMENT PLANS UNDER EXEXUTION :

In the current financial year, your Company propose to invest in a new Galvanizing line of wider width of 1650 mm, which will match the new 6–Hi Cold Rolled wider width mill.

Your Company is also investing in a new service centre, to cater to the increasing need of OEM Customers in Automobile and white good sector. With a wide acceptance of your Company’s products by these OEM Customers, the new facility should enhance our capacity to give our customers, tailor made sheets in CRCA, Galvanized and colour coated products.

I am sure that with the kind of investments and efforts planned during the year, the Company’s installed capacity of Cold Rolled and Galvanised Products will reach 1 million Tons per annum by the end of Current Financial year.

We believe that we have strong momentum to deliver continued growth over the long term. We have a very strong business model based on integration and value addition, which will enable us to sustain improved performance in the future.

OPERATIONS :

We have achieved the turnover of Rs. 1897 Crores as against
Rs. 2156 Crores during the previous year and the Profit Before Tax was Rs. 82 Crores as against Rs. 103 Crores during the corresponding year.

Our profitability was adversely affected mainly due to higher finance cost and depreciation. But since, we have embarked upon the major capacity expansion to withstand the pressure from competition, the increase in finance cost and depreciation was inevitable.

During the first quarter ended 30th June, 2006, your Company’s turnover was Rs. 575 Crores as against Rs. 561 Crores and the Profit before Tax was Rs. 25.51 Crores as against 23.71 Crores during the corresponding quarter.

EXPORT SALES :

I am pleased to inform you that, your Company has received the All India Highest Export award last year and also have received the Western Regional Award for Highest Exports of EEPC (Western Region) for the sixth consecutive year.

Your Company is already exporting its products to more than 120 countries; however, now our focus has been to quality conscious markets such as USA, Europe and other developed countries.

DOMESTIC SALES :

We continue to serve our major customers in OEM segments in automobile and white goods industry. With the introduction of Hydrogen annealing facility, our ability to supply for critical applications like EDD and IF grade have improved considerably. We are currently doing extensive R&D activities to develop such grades and for this we have entered into technical association with EBNER Austria.

To augment our activity in domestic marketing we are planning to do the extensive Brand-Building exercise for our entire range of products.

CORPORATE GOVERNANCE :

The Company has all along believed in fair business and corporate practices. All mandatory steps, such as having competent independent Directors on the Board, constitution and functioning of various committees of the Board, transparency through disclosure of financial and non-financial information, introduction and implementation of corporate culture, have been taken and being constantly reviewed for further improvement.

ACKNOWLEDGEMENTS :

Before concluding, I would like to thank to Central, State and Local Governments, Financial Institutions, Banks and all our employees, customers, vendors, suppliers and shareholders for their consistent support year after year, and commitment to our efforts and initiatives. We will continue to pursue our Company’s growth objectives to deliver superior stakeholder value and build long-term relationships with our partners in progress.

Sd/-
(Rajinder Miglani)
Chairman & Managing Director
12th August, 2006