MAHARASHTRA SEAMLESS LIMITED

areE x p a n d i n g

A N N U A L R E P O R T 2 0 0 7 - 0 8

WORKS:1. SEAMLESS & ERW PIPES:

- Pipe Nagar, Village - Sukeli,N.H.17, B.K.G. Road,Taluka Roha,Distt. Raigad - 402 126Maharashtra

- D 114, Industrial Area ,Vile Bhagad,Taluka Mangaon,Distt. Raigad-Maharashtra

2. WIND POWER:Village Nivkane, Taluka Patan,District Satara,MaharashtraWebsite: www.jindal.com

BOARD OF DIRECTORSD.P. Jindal ChairmanSaket Jindal Managing DirectorU.C. AgarwalD.K. ParikhH.K. KhannaS.P. Raj Wholetime Director

AUDIT COMMITTEEU.C. Agarwal ChairmanD.P. JindalD.K. ParikhH.K. Khanna

CFOAnil Jain

COMPANY SECRETARYP.K. Puhan

AUDITORSKanodia Sanyal & AssociatesNew Delhi

BANKERSState Bank of PatialaState Bank of Bikaner & JaipurStandard Chartered BankHDFC Bank LimitedICICI Bank LimitedThe Hong Kong and ShanghaiBanking Corporation LimitedDeutsche BankCorportaion BankBank of IndiaUBS AGCredit Suisse

REGISTERED OFFICEPipe Nagar, Village-Sukeli,N.H.17, B.K.G. Road, Taluka Roha,Distt. Raigad - 402 126,Maharashtra

CORPORATE OFFICEPlot No. 30, Institutional Sector 44,Gurgaon – 122 002, Haryana

HEAD OFFICE1/23 B, Asaf Ali Road,New Delhi - 110 001

MUMBAI OFFICE402, Sarjan Plaza,100, Dr. Annie Besant Road,Opp. TELCO Showroom,Worli, Mumbai - 400 018

KOLKATA OFFICESukhsagar Apartment,Flat No. 8A, 8th Floor,2/5, Sarat Bose Road,Kolkata - 700 020

CHENNAI OFFICE3A, Royal Court,44, Venkatanarayan Road,T. Nagar, Chennai - 600 017

Chairman’s Statement 04

Message from the Managing Director 06

Selected Financial Indicators of last 10 Years 16

Notice 17

Directors’ Report 22

Corporate Governance Report 30

Shareholders’ Information 34

Management Discussion & Analysis 39

Auditors’ Report 42

Balance Sheet 46

Profit & Loss Account 47

Cash Flow Statement 48

Schedules & Notes on Accounts 49

CONTENTS:

02

Powerful Teamwork+

Efficient resourceplanning

+innovation

Planned Growth

Understanding of the core growth factors has led us to infuse innovationin our products and services. Challenges are faced with relevantstrategies.

And result is - the ripple effect on our growth. We are expanding ...

=

03

Chairman’s Speech

D.P. JindalChairman, DP Jindal Group

Dear Shareholders,

India is today at the centrestage of huge economic upsurge acrossthe globe. As the US and Europe have receded into slow recession,China and India have emerged as the engine of economic growth.I believe that this is the right moment for India to take it’s rightfulposition as economic superpower fueled by huge entrepreneurialgrowth and emerging opportunities.

This year has been a tough year for India even though we havebeen quite insulated by the worldwide recession due to domesticconsumption and increase in purchasing power. Crude oil price hasgone up from US $50 to nearly US $125 at an unbelievable speed.This has acted as a speed breaker in India’s pursuit of 10% GDPgrowth as the Government has to face an uphill task of controllinginflation through various fiscal measures. Rising interest rate isalso another factor involved in this slowdown. However, we are aresilient country and I am confident that very soon we shall be onour path to achieve the dream of double digit growth.

This year has been remarkable for your Company despite challengesfaced by growing inflation and dumping by several countries. Theopportunities open by increased need for oil exploration both inIndia and rest of the world have been effectively capitalized andconverted into strong order book and decent margins. Leadingexperts have made favourable projection of continuous oil sectorgrowth and with the identification of new oil feilds in Middle Eastand US have only expected to boost the contribution of exportsto your company’s Balance Sheet. Your Company has been able toplan adequate sources of steel so as to minimize the impact ofrising prices on the bottom-line. Your Company is proud of a strong

04

Brand Equity in Global markets which enables it to enjoy premiumeven in such competitive conditions.

Your company is proud of its vibrant and dynamic leadershipcoupled with youth and experience. The company and itsemployees have taken proactive steps through constant innovationand “Out of Box thinking”. The year was specially important sinceyour company accomplished an International acquisition of twoseamless Pipe Mills in East Europe and plans to shift the facilityto India in order to further augment the capacity through thisinorganic growth route. This plant is already under the processof shifting and shall give rewards to your company in the year2009-10.

Innovation through new product development has always beenthe mantra for growth of your company. This year also yourcompany has achieved good benefits out of R&D initiatives. Newproduct line with value addition have been developed andintroduced in the market so as to increase the contribution toyour bottom-line.

Your company has been strongly preparing itself for the dynamicscenario in Seamless and ERW pipes market. Your companycontinues to maintain leadership in the market and intends tostrengthen its position in the coming years. Your company isaggressively marketing through new markets and registrationwith major oil producers of the world. New distribution partnershave been engaged in order to increase the penetration in theGlobal and Domestic market.

Your company continues to strive for operational excellence andcost effectiveness. These are two critical components for healthy

bottom-line more so in today’s competitive scenario.Your companyhas undertaken initiatives to achieve optimum capacity utilizationand minimization of idle time. Modernisation is an on goingprocess in order to maintain the cutting edge over competitionboth from Domestic and Global Players. Your company has madesubstantial efforts in this direction and boasts of one of the mostmodern seamless pipe facilities in the World.

People constitute to be the most critical element for yourcompany’s astounding growth. New HR initiatives and rewardprograms have been brought in to enhance innovation and loyaltyof the employees. Your company enjoy one of the lowest attritionrates and will strive to attract and retain the best available talentin the Industry.

Growth through organic and inorganic means is our underlyingideology. Efforts are underway for Greenfield project for variouskinds of pipes which are used in Oil and Gas Sector and to exploreopportunities for growth through backward integration.

Lastly, I wish to acknowledge the countinued petronage of allstakeholders without which we would not have progressed atthis rapid pace of development.

Thank you,

D.P. Jindal

Message from the Managing Director

Saket JindalManaging Director

Dear shareholders,

It gives me immense pleasure to declare another successfulperformance by your company in the last fiscal. We havemaintained our operational profitability to a large extent despitethe pressure on margins from rising steel prices.

The steel prices have been extremely volatile and have increasedconsiderably with the rise in scarce raw materials like coal andiron ore. However, we have been able to pass on the escalation as there has been a good demand in the market. The competitionfrom China has eased out and we are able to dominate again inthe boiler segment. The recent imposition of export tax on steelpipes has been withdrawn by the Government and rightly so, asit would have been a hurdle for all domestic players.

The oil prices have been hovering over the $100 per barrel markwhich shall promote drilling activity worldwide and in turnincrease demand for seamless pipes. Recently, we have baggedexport orders from USA at high realizations and the market isexpected to remain bullish in the near term.

We have procured orders from British Gas for premium connectionswhich shall keep our JV unit with Tenaris running till the end ofthis year, and we have procured another prestigious order fromOccidental, Oman, for line pipes which shall give us anotherbreakthrough to be amongst the vendors for big internationaloil companies. Saudi Aramco , a very well known oil companyhas audited our mill and recommended us for approval to be

06

amongst their vendor list. Besides this we are looking at furtherapprovals from joint venture companies of Shell in Oman.

We have concluded a deal to buy a seamless pipe plant fromRomania which is being dismantled and brought into Indiaand is expected to commence production within two years .We have procured suitable land from MIDC near our existingfacility in Nagothane and work on the site has already begun.The total project cost should be around Rs. 325 crore whichshall be financed largely through internal resources . Thisexpansion would add another 2 lac MT to our capacity and alsogive us a foothold in the drill pipe segment of the market. Weshall be exporting the surplus material if domestic demand isinsufficient although the domestic requirement is also growingby 25 percent annually with the recent discoveries in the KGbasin.

We shall be soon allotted coal mines in Gondkhari, Maharashtraand shall utilize the reserves for our steel billet project of approx0.5 million MT . Tie up for iron ore and the land shall beaccomplished shortly. Thus, with both horizontal as well asvertical integration, your company is poised for growth in thenear future. Our coating plant is now streamlined and we areadding another line for smaller sizes and also for internal coatingrequirements.

We need more focus on our human resources as the industryis facing high attrition rates. We have hired a consultant totake care of this aspect as well as guide us for cost cutting inkey areas and to increase productivity across the company.

Our ERP program with Oracle has progressed well and shall befully on line shortly. With this, we shall have more transparencyand accountability in our organization and top managers shallhave more control on the affairs of the company.

We are procuring a state of the art solid state welder fromThermatool, UK which shall upgrade our ERW facility and alsofinalizing a full body ultrasonic testing machine from Tuboscope,USA which shall help us in our approvals from global oil MNCs.You shall be pleased to know that MSL has bagged the awardfrom Dun and Bradstreet yet again for best performer in thesteel pipe sector in India.

We hope to continue this trend and achieve new milestones inthe future with the support of our employees, customers,suppliers, collaborators, bankers and all other stakeholders.

Thank you,

Saket jindal

07

are on the Growth Track

Marketing Achievements:

* MSL has been approved by Petronas, Malayasia for supply of Seamless Pipes & Tubes.

* Physical Mill audit has been completed by “Saudi Aramco’

* MSL has made a major export breakthrough with an order booking from‘Occidental, Oman’ for supply of Seamless Line Pipes.

* Highest export orders of 55,000 MTs valued at approx. Rs. 330 crore.

* ERW mill of MSL has been approved by IOCL up to X-70 grade for both Bare and3 LPE coated pipes.

* Successful execution of Coated Line Pipes to ONGC and various valued clients.

MSL believes in capitalizing on every opportunity to add value to business

domain. During the year, we continued to grow by improving productivity

by implementing efficient financial and working capital management and

ORACLE ERP programme - which in turn help us stave off the burden of

higher funds involvement in inventories and on debtors despite steep rise

in steel price.

We have developed more closer relationship with our customers and

adding value to an increasing diverse range of products and services within

the promising OCTG sector.

08

Financial Achievements:

* Granted American Express Corporateaward “India’s top 500 companies, 2007”by Dun & Bradstreet

* Contributing to the Govt. exchequerapprox. Rs. 300 crore.

* International and domestic road shows forthe investors are being carried out regularlyin Singapore and Mumbai etc.

Attractive Ratio of CMP to Book Value

2007

-08

2006

-07

2005

-06

2004

-05

2003

-04

2002

-03

2000

-01

1999

-00

1998

-99

2001

-02

7925

9298 1196

8

1512

1

2031

7

2440

9

3128

1

4139

1

9241

0 1093

41Net Worth(Rs. in Lac)

1.94 times

09

are Expanding through both horizontal & vertical integration

Keeping expansion as our approach to continuous growth, MSL is poisedto integrate its production process. Our backward integration is alreadyon the anvil. Land acquisition process for our upcoming Billet plant isunderway. Further, allotment of Coal block in Gondkhari, Maharashtra hasbeen accomplished.

The newly purchased Seamless Pipe Mill from Romania would add 2 lacMT to existing capacity coupled with deserved foothold in the OCTG Pipesegment.

All these expansion programs lead to our horizontal and vertical integrationfor a seamless growth.

10

* Introducing Dual Layer Epoxy Coating on existing

3 layer external pipe coating plant with a range of

4” to 48” pipe.

* Adding “O-Die coating” facility for small pipes

ranging from 1” to 4” Dia.

* The company is setting up another coating plant

for Internal Coating of pipes with liquid epoxy.

* The company has procured 2 nos Seamless Pipe

Mills from Romania with pipe manufacturing range

of 1” to 6” diameter and with a production capacity

of 2,00,000 MT per annum. Which wil be installed

at Vile Bhagad, 35 kms. away from the existing

facilities at Nagothane.

* To enhance the production and quality of ERW

pipes, the company is in the process of replacing

the old HF Contact Welder with the new 1000 kw

solid state HF Dual Contact / Induction Welder

from M/s Thermatool, U.K. Which will increase

speed of manufacturing capacity by 1.5 times.

are driven by human touch

Our workforce is capable of raising company to scale new heights, bend

challenges into opportunities and further to achievements. Intrinsic to

our operations are our HR practices imbibed by values of teamwork and

leadership qualities, which are a prerequisite. With a scalable recruitment

process, we have been able to attract and retain high caliber employees.

12

Many initiatives are taken to avoid attrition rates and to create favorable work environment that enable employees to

work effectively and efficiently in a cross-functional & cross-cultural work environments.

* Various training and development programmes were held across all

levels during the last fiscal.

* Encouraging a fast learning environment that lay stress on developing

functional and interpersonal skills.

* We also encourage knowledge sharing interactive sessions which enable

internal management to assess progress rate in the organization.

13

Our organization is built and grown by combination of achievements,

business expansion and commitment to the society. Progressing ahead

with business interests, what we never forget is our Corporate Social

Responsibility. We believe in building relationship both internally and

externally. We are committed to protect health and safety of our employees

and community where we operate.

are caring for the community

14

Our efforts always have been are focussed on developing incident free

operational environment.

Our various initiatives include opening up of School, hospital and adoption

of villages in and around the plant. It is by adhering to social values and

commitment to the society that we are able to prosper and look forward to

contribute more in the years to come.

16

SELECTED FINANCIAL INDICATORS OF LAST 10 YEARS

Share Capital

(including WIP)

Equity Share Capital (Rs. Lacs) 2550 2550 2882 2882 2882 2882 2882 2882 3497 3527

(Times) 1.00 1.00 1.13 1.13 1.13 1.13 1.13 1.13 1.37 1.38

Preference Shares 332 332 - - 1441 - - - - -

Reserves & Surplus (Rs. Lacs) 5043 6416 9086 12239 15994 21527 28399 38509 88913 105814

(Times) 1.00 1.27 1.80 2.43 3.17 4.27 5.63 7.64 17.63 20.98

Net Worth (Rs. Lacs) 7925 9298 11968 15121 20317 24409 31281 41391 92410 109341

(Times) 1.00 1.17 1.51 1.91 2.56 3.08 3.95 5.22 11.66 13.80

Book Value (Rs.) 30.00 35.00 42.00 52.00 65.00 85.00 109.00 144.00 264.00 155.00

(Times) 1.00 1.17 1.40 1.73 2.17 2.83 3.63 4.80 8.80 5.17

Equity Dividend (Rs. Lacs) 255.00 306.00 383.59 576.40 1008.70 1152.80 1441.00 2131.55 3719.82 3526.67

Dividend on Equity Shares % 10% 12% 15% 20% 35% 40% 50% 70% 110% 100%

Dividend Per Share (Rs.) 1.00 1.20 1.50 2.00 3.50 4.00 5.00 7.00 5.50 5.00

Earning Per Share (Rs.) 3.89 6.58 11.94 17.37 21.98 23.72 29.54 48.26 38.38 27.70

Dividend Payout Ratio % 25.71% 18.24% 12.56% 11.51% 15.92% 16.86% 16.93% 14.50% 14.33% 18.05%

Particulars 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Gross Turnover (Rs. Lacs) 18555 19243 26541 37272 43563 55529 86724 107695 151961 164037

(Times) 1.00 1.04 1.43 2.01 2.35 2.99 4.67 5.80 8.19 8.84

EBIDTA (Rs. Lacs) 1887 2682 4218 7468 8406 10031 12851 20801 34101 29762

(Times) 1.00 1.42 2.24 3.96 4.45 5.32 6.81 11.02 18.07 15.77

PBT (Rs. Lacs) 1405 2415 4042 7186 9007 10507 12624 20685 35269 30190

(Times) 1.00 1.72 2.88 5.11 6.41 7.48 8.99 14.72 25.10 21.49

PAT (Rs. Lacs) 1037 1756 3196 5001 6209 7146 8488 13960 23384 19522

(Times) 1.00 1.69 3.08 4.82 5.99 6.89 8.19 13.46 22.55 18.83

Gross Block (Rs. Lacs) 8171 8789 10594 14119 16064 26709 32768 35303 37416 44321

(Times) 1.00 1.08 1.30 1.73 1.97 3.27 4.01 4.32 4.58 5.42

Net Block (Rs. Lacs) 6057 6324 7734 10743 12023 21970 26992 28075 28579 33746

(Times) 1.00 1.04 1.28 1.77 1.98 3.63 4.46 4.64 4.72 5.57

17

NOTICENotice is hereby given that the 20th Annual General Meeting of the members of Maharashtra Seamless Limited will be held onSaturday, the 27th day of September 2008 at 11.30 A.M. at the Registered Office of the Company at Pipe Nagar, Village-Sukeli, N.H.17, B.K.G. Road, Taluka Roha, Distt. Raigad-402 126, Maharashtra to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Accounts for the year ended 31st March 2008 and the Reports of Directors andAuditors thereon.

2. To declare dividend on equity shares for the year ended 31st March 2008.

3. To appoint a Director in place of Mr. U.C. Agarwal, who retires by rotation and being eligible, offers himself for reappointment.

4. To appoint a Director in place of Mr. D.K. Parikh, who retires by rotation and being eligible, offers himself for reappointment.

5. To appoint M/s. Kanodia Sanyal & Associates, Chartered Accountants as Auditors of the Company to hold office from theconclusion of this meeting until conclusion of the next Annual General Meeting and to fix their remuneration.

SPECIAL BUSINESS

6. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution.

"RESOLVED THAT pursuant to the provisions of Section 16, 94 and all other applicable provisions, if any of the Companies Act,1956, Clause V of the Memorandum of Association of the Company be and is hereby altered to read as follows:

"The Authorised Share Capital of the Company is Rs. 60,00,00,000 (Rupees Sixty Crore only) divided into 8,00,00,000 (Eight Crore) Equity Shares of Rs.5/- (Rupees Five) each and 2,00,00,000 (Two Crore) Preference Shares of Rs. 10/- (Rupees Ten) each withpower to increase and reduce the capital and to divide the shares in the capital for the time being into several classes and attachthereto respectively such preferential, deferred, guaranteed, qualified or special rights, privileges and vary, modify or to abrogateany such rights, privileges or conditions in such manner as may for the time being be provided by the Articles of Association."

7. To consider and, if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution:

"RESOLVED THAT pursuant to Section 31 and all other applicable provisions, if any, of the Companies Act, 1956 (including anyamendment thereto or any re-enactment thereof), the existing Article 3 of the Articles of Association of the Company be andis hereby altered to read as follows:-

"The Authorised Share Capital of the Company is Rs. 60,00,00,000 (Rupees Sixty Crore only) divided into 8,00,00,000 (Eight Crore)Equity Shares of Rs.5/- (Rupees Five) each and 2,00,00,000 (Two Crore) Preference Shares of Rs. 10/- (Rupees Ten) each withpower to increase and reduce the capital and to attach thereto respectively such preferential, qualified or special rights, privilegesor conditions and to modify or abrogate any such rights, privileges or conditions in such manner as may for the time beingpermitted by the Act."

8. To consider and, if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

"RESOLVED THAT in accordance with the provisions of Sections 198, 269, 309 and 310 read with Schedule XIII and all otherapplicable provisions of the Companies Act, 1956 (including any statutory modification(s) or re-enactment(s) thereof, for thetime being in force), the consent of the Company be and is hereby accorded to the revision of the remuneration of Shri S.P.Raj, Whole Time Director of the Company w.e.f. 1st October 2008 for the remaining period of his tenure i.e. upto 30th September2010 as set out in the Explanatory Statement annexed hereto.”

Place : GurgaonDated : August 28, 2008

By order of the Board

P. K. PuhanCompany Secretary

18

NOTES:

1. The relative Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of Item No. 6 to 8 of

Special Business is annexed hereto.

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD

OF HIMSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY.

Form of proxy is separately annexed. The proxy must be deposited at the registered office of the Company, not less than 48

hours before the commencement of the meeting.

3. Members / Proxies attending the meeting are requested to bring their copy of the Annual Report for reference at the meeting

as also the Attendance Slip duly filled in for attending the meeting.

4. The Register of Members and Share Transfer Books of the Company will remain closed from 20th September, 2008 to 27th

September 2008 (both days inclusive) for the purpose of determining the shareholders entitled to dividend declared, if any, for

the year ended March 31, 2008 at the Annual General Meeting on 27th September, 2008. Dividend on shares, when declared,

will be paid only to those members whose names are registered as such in the Register of Members of the Company after giving

effect to valid share transfers in physical form lodged with the Company on or before 19th September, 2008 and to the Beneficial

Holders as per the Beneficiary List as on 19th September 2008, provided by the NSDL and CDSL.

5. Members holding shares in electronic form may please note that as per the regulations of National Securities Depository Ltd.

(NSDL) and Central Depository Services (India) Ltd. (CDSL), the Company is obliged to print the bank details on the dividend

warrants as furnished by these Depositories to the Company and the Company cannot entertain any request for deletion / change

of bank details already printed on dividend warrants as per information received from the concerned Depositories. In this regard,

Members should contact their Depository Participant (DP) and furnish particulars of any changes desired by them.

6. Members desirous of getting any information in respect of Accounts of the Company are requested to send their queries in

writing to the Company at the Registered Office of the Company so as to reach at least 7 days before the date of the meeting

so that the required information can be made available at the meeting.

7. In accordance with the provisions of the Companies Act, 1956, the amount of dividend which remains unpaid or unclaimed

for a period of 7 years from the date of transfer to Unpaid Dividend Account of the Company are transferred to the Investor

Education and Protection Fund constituted by the Central Government and shareholders are not able to claim any amount

of dividend so transferred to the fund.

As such, shareholders who have not yet encashed their dividend warrants are requested in their own interest to claim the

outstanding dividend before it falls due for transfer to the aforesaid Fund.

19

9. In case of joint holders attending the meeting, only such joint holder who is higher in the order of names recorded in the registerof members will be entitled to vote.

10. All documents referred to in the notice are open for inspection at the Registered Office of the Company between 10 a.m. to 1p.m. on any working day upto the date of Annual General Meeting and also at the meeting.

Name Mr. U. C. Agarwal Mr. D. K. Parikh

Age 81 Years 75 Years

Qualification M.A. (Pol. Science), IAS (Retd.) M. Sc. (Statistics), M.B.A. (Finance)

Date of appointment as Director 15.06.1990 24.09.1990of the Company

Directorship of other companies - Jay Bharat Maruti Ltd. -

Chairman/Member of Committees Chairman, Audit Committe, -of other Companies Jay Bharat Maruti Ltd.

No. of shares held 1000 Nil

Having considerable experience infinance & administration. Retired asGeneral Manager from ICICI Ltd.

Expertise in specific functional area Extensive experience in administrationat various and widely spread levels havingheld senior posts in Government of India.Held the post of Secretary to the IndianGovernment and Chairman to the CentralVigilance Commission.

The Board of Directors of the Company commends the re-appointment of aforesaid Directors.

8. Details of the Directors seeking reappointment at the forthcoming Annual General Meeting (Pursuant to Clause 49 of the ListingAgreement):

20

ANNEXURE TO THE NOTICE

Explanatory Statement under Section 173(2) of the Companies Act, 1956.

ITEM NO. 6

The Board of Directors of the Company at its meeting held on 30th July 2007 had approved sub-division of equity shares form Rs.5/- each to Rs.2/- each and accordingly the shareholders at the Annual General Meeting held on 28th September 2007 approved theamendment in the capital clauses of the Memorandum & Articles of Association of the Company.

However, the sub-division of equity shares as above i.e. change of face value from Rs.5/- to Rs.2/- per share has not yet been affected.The Board of Directors has reviewed the matter in view of the prevailing market price of the Company's shares and has decided tomaintain the face value of shares at Rs.5/- each at present. Therefore in order to bring in alignment between authorized capitaland issued capital, it is proposed to amend the capital clause of the Memorandum of Association of the Company.

None of the Directors of the Company may be deemed to be concerned or interested in the proposed resolution, except to the extentof their respective shareholding in the Company, if any.

Item No. 7

It is proposed that the Capital Clause of the Articles of Association be amended in conformity with the alteration in Clause V ofthe Memorandum of Association as proposed in Item No. 6 of the Notice. As per section 31 of the Companies Act, 1956, such aproposal requires a Special Resolution to be passed at the General Meeting. The Board recommends the resolution for your approval.

None of the Directors of the Company may be deemed to be concerned or interested in the proposed resolution, except to the extentof their respective shareholding in the Company, if any.

Item No. 8

The shareholders at the Extra Ordinary General Meeting held on 22nd March, 2006 had approved appointment and payment ofremuneration to Shri S.P.Raj as Whole Time Director of the Company for a period of 5 years w.e.f. 1st October, 2005.

The Board of Directors at its meeting held on 28th August 2008 has decided to revise the remuneration of Shri S.P. Raj w.e.f. 1st

October 2008, for the remaining period of his tenure as detailed herein below, subject to the approval of shareholders of the Company.The revision in the remuneration is in accordance with and within the limits fixed under the provisions of section 198, 269, 309and 310 read with Schedule XIII and all other applicable provisions of the Companies Act, 1956.

SALARY

Rs.50,000 (Rupees Fifty Thousand only) per month with such increase as may be decided by the Board of Directors in the gradeof Rs.50,000 - Rs.2,50,000 per month.

PERQUISITES

I The Whole Time Director shall be entitled to perquisites & benefits like furnished /non furnished accommodation or houserent allowance in lieu thereof, gas, electricity, water, medical reimbursement, leave travel concession for self & family, clubfees, car/s with driver/s for business & personal use, facility of telephone installed at his residence, medical and personalaccident insurance, education allowance, bonus/ex-gratia etc. as per rules of the Company. The value of perquisites shallbe evaluated as per Income Tax Rules wherever applicable.

II The Whole Time Director shall be entitled to Company's contribution to Provident Fund, Superannuation Fund, Pension Fund,Gratuity, encashment of earned leave at the end of the tenure, as per the rules of the Company, and these shall not beincluded in the computation of perquisites.

MINIMUM REMUNERATION

In the event of loss or inadequacy of profits, the remuneration including the perquisites as mentioned above shall be paid inaccordance with Schedule XIII and other applicable provisions of the Companies Act, 1956 as amended from time to time.

21

OTHER TERMS

I. The Whole Time Director shall not be paid any sitting fees for attending the meeting(s) of the Board of Directors or Committeesthereof.

II The Whole Time Director shall be entitled to reimbursement of entertainment, traveling and all other expenses incurred inthe course of the Company's business.

III The appointment may be terminated by the Company or by the Whole Time Director by giving not less than three month'sprior notice.

Your Directors recommend the resolution for your approval.

The details given here above together with the accompanying Notice be treated as an abstract of the variance of the terms ofcontract of Shri S.P. Raj, as Whole Time Director of the Company as required under Section 302 of the Companies Act, 1956.

None of the Directors of the Company except Shri S.P. Raj himself is concerned or interested in the above resolutions.

Place : GurgaonDated : August 28, 2008

By order of the Board

P. K. PuhanCompany Secretary

22

DIRECTORS' REPORTTo the Members,

Your Directors are pleased to present the 20th Annual Report along with Audited Accounts of the Company for the year ended 31stMarch 2008.

FINANCIAL RESULTS

During the year, Gross Turnover of the Company increased to Rs.1640 crore from Rs. 1520 crore in the previous year – registeringa growth of 7.94% over previous year. The highlights of the financial results are as under: -

Year Ended Year Ended31.03.2008 31.03.2007

Gross Turnover 1640.37 1519.61

Foreign Currency Translation Loss 18.29 -

Depreciation 17.40 16.26

Profit Before Tax 301.90 352.69

Provision for Taxation

- Current 105.60 116.35

- Fringe Benefit 0.24 0.20

- Deferred 0.83 2.30

Profit after Tax 195.23 233.84

Prior Period Adjustments/Tax Provisions Written Back (0.01) 0.05

Profit After Tax & Adjustments 195.22 233.89

Balance brought forward from previous year 32.86 41.70

Profit available for appropriations 228.08 275.59

Appropriations:

Dividends

- Interim Paid - 26.62

- Proposed on Equity Shares 35.27 10.58

Tax on Dividends

- Interim - 3.73

- Proposed on Equity shares 5.99 1.80

Transfer to General Reserve 150.00 200.00

Balance carried to Balance Sheet 36.82 32.86

228.08 275.59

(Rs. in crore)

23

DIVIDEND

Your Directors are pleased to recommend a dividend of 100% (Rs.5/- per share) for the year ended 31st March, 2008.

The proposed dividend including Dividend Distribution tax will absorb Rs.41.26 Crores.

RESULTS OF OPERATIONS

Your Directors are pleased to inform that your Company has recorded 7.94% growth in turnover during the year ended 31st March,2008. The profit before tax for the year was Rs.301.90 crore as against Rs.352.69 crore in the previous year. The profit after taxand adjustments for the year had been Rs.195.22 crore as against Rs.233.89 crore in the previous year.

The Company has primarily three segments - Seamless, ERW and Wind Power. All the three segments contribute positively to theprofitability. Seamless Pipes Division constitutes 76% of turnover of the Company. The contribution of the Seamless Pipes Divisionis over 81% of the total Profit Before Tax. ERW Division constitutes around 23% of turnover of the company. 7 MW Wind PowerProject of the Company is meeting around 13% of Power requirement and has helped in reducing over all cost of power. TheCompany is also enjoying various fiscal incentives from the state of Maharashtra.

SHARE CAPITAL

During the year the Company allotted 601455 Equity shares of Rs. 5/- each, out of which 601,454 shares were allotted on exerciseof right of conversion by the holders of Zero Coupon Foreign Currency Convertible Bonds (FCCBs) issued by the Company and 1 (one)share was allotted on preferential basis to Mr. Raghav Jindal belonging to Promoter & Promoter Group to mitigate the problemarising out of the proposed sub-division of equity shares from Rs.5/- each to Rs. 2/-each. However, the Board has decided to deferimplementation of the sub-division of equity shares.

ACQUISITION OF SEAMLESS PLANT IN ROMANIA

Your Company has acquired a Seamless Plant in Romania having an installed capacity of 200000 TPA. The plant has been acquiredon Assets Sale basis without any Liability, having the capacity to manufacture Seamless Pipes upto 6" OD including Drill Pipes. Theplant is being dismantled and will be relocated to, in the district of Raigad, Maharashtra, India and is likely to be operational inthe next 2 years. Necessary land has been purchased and civil construction work has already started. The total cost of the projectincluding setting up of the infrastructure at a new location for the facility and complete modernization is estimated to cost INR325 Crores, which will be largely funded out of internal resources only. The Plant Facility would also include the Drill Pipe capability,which has a very strong demand in the current OCTG segment. It is likely to add to the substantial growth in the businesses andprofitability of the Company.

COATING PLANT

The Company has successfully installed the facility for Dual layer Fusion Bond Epoxy (DFBE) coating facility to its already existing3 layer Polyethylene coating facility. It is considered to be equally effective but economical coating process and all major oil companiesin India like IOCL, BPCL etc. are now looking for coated cross country line pipe with this coating and your Company will now beable to participate in the cross country coated line pipe tenders floated by these companies in future.

FCCB ISSUE

Your Company had raised US$ 75 million on 29th July, 2005, by way of Zero Coupon Foreign Currency Convertible Bonds (FCCBs)vide offering circular dated 26th July, 2005.

Your Company is pleased to inform that all the bondholders have exercised their right of conversion and the entire bonds of US$75 million stand converted into Equity Shares of the Company and consequently Company had issued 12888301 No. of new equityshares in aggregate on account of conversion of FCCBs at a face value of Rs. 5/- each with a share premium of Rs. 248.34 per share.

STOCK APPRECIATION RIGHTS (SAR)

The Board of Directors of the Company has approved in-principle to implement a Stock Based Incentive Plan in the form of "StockAppreciation Rights (SAR)" for the Employees of the Company and constituted a Compensation Committee for the said purpose.

PORTFOLIO INVESTMENT SCHEME (PIS).

The shareholders of the Company had passed a special resolution at the last Annual General Meeting and accorded their consentto enhance the investment limit upto 40% of the paid-up equity capital of the Company by FIIs through the Portfolio InvestmentScheme (PIS). The Company had submitted requisite application with Reserve Bank of India (RBI) to record the same and issuenecessary advice for the purchase of Company's securities by FIIs through primary market and Stock Exchange. The RBI vide letterNo.FE.CO.FID/20683/11.01.008/2007-08 dated March 4, 2008 issued an advice in respect of the above.

BACKWARD INTEGRATION PROJECT

The Company plans to implement a Strategic Backward Integration Project to manufacture Billets, the basic feed material forSeamless Pipes making, having a capacity of 0.50 Million TPA.

24

The Govt. of India has recently approved allocation of Coal Block to your Company in Maharashtra. Coal is also one of the majorraw-material for manufacture of steel products. The Company would utilize this coal reserve for its proposed steel project. Thus,with both horizontal as well as vertical integration, your Company is aiming for a complete control on its cost and accordingly itis poised for a good growth in future.

EFFECT OF CHANGE IN FOREIGN EXCHANGE RATES

Pursuant to AS - 11 "The Effect of Change in Foreign Exchange Rates" there is a diminution in the value of Rs. 182,867,127/- asof Balance Sheet date on its overseas US Dollar deposits (out of FCCB proceeds meant for capex purpose) on account of adverseexchange rate fluctuation which has been accounted for in the profit & loss account based on the expert opinion received.

Further, the company has taken some forward contracts after the Balance Sheet date & computed its position after factoring theprevailing exchange rate available on the date of approval of Balance Sheet. This has resulted into unrealised foreign exchange gainsto the extent of Rs. 207,761,421/-. Thus, there has been an unrealised gain on net basis to the extent of Rs. 24,894,294/- , whichhas not been considered in the profit & loss account for the year under review.

REVALUATION OF ASSETS

The Company had planned to get its assets revalued and accordingly made declaration at the time of publishing its Quarterly resultsfor the quarter ended 31st March 2008. However, the exercise is still under process and the impact of the revaluation would beincorporated in the books of accounts of subsequent period as and when the revaluation report is finalised and adopted by theBoard.

IMPLEMENTATION OF ENTERPRISE RESOURCE PLANNING (ERP)

The need for cutting edge ERP solutions is becoming crucial in this information age. Your Company has taken initiative to implementERP package {ORACLE - e Business Suit (ORACLE - 11i)} in the Company. The primary objective of the project is to avoid duplicationof entries across different applications and thereby trim down the time taken for processing work orders, payments and invoices.In the long term, the Company hopes to reduce inventory and operational costs while speeding up the process of manufacturing.IBM is acting as implementation partner and the implementation of the same is at an advanced stage.

AWARDS/RECOGNITION

Your Company has been awarded with "Dun & Bradstreet - American Express Corporate Awards - 2007"

Recognizing the achievement, success and dynamic growth spirit of the Indian corporate sector, Dun & Bradstreet has released the8th edition of its publication, "India's top 500 Companies 2007". Maharashtra Seamless Ltd. has been selected as the top IndianCompany in the metal pipes sector for the "Dun & Bradstreet - American Express Corporate Awards - 2007".

DIRECTORS

Mr. U.C. Agarwal and Mr. D.K. Parikh, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and beingeligible, offer themselves for reappointment.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, your Directors state:

(i) that in the preparation of the Annual Accounts, the applicable accounting standards had been followed;

(ii) that the accounting policies selected and applied are consistent and the judgments and estimates made are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profitof the Company for that period;

(iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities; and

(iv) that the Annual Accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, the Management Discussion & Analysis Statement, Corporate Governance Report,the Auditors' Certificate regarding Compliance of conditions of Corporate Governance are part of this Annual Report.

AUDITORS

M/s. Kanodia Sanyal & Associates, Chartered Accountants, the Auditors of the Company are retiring at the the ensuing AnnualGeneral Meeting and are eligible for reappointment.

The Company has received letters from them to the effect that their re-appointment, if made, would be within the prescribed limits

under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaningof Section 226 of the said Act.

The Auditors' observations and the relevant notes on accounts are self-explanatory and therefore, do not call for further comments.

FIXED DEPOSITS

The Company has not accepted any Deposits within the meaning of Section 58A of the Companies Act, 1956 and the Rules madethere under.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto.

PARTICULARS OF EMPLOYEES

The information required under Section 217 (2A) of the Companies Act, 1956 and the rules framed there under is annexed heretoand forms part of the report.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for the assistance and co-operation received from Central Government, StateGovernment of Maharashtra, SICOM, MSEB, and all other Government agencies, ONGCL, Oil India, Banks and Shareholders.

Your Directors wish to place on record their deep sense of appreciation for the devoted contribution made by the employees at alllevels.

25

Statement of particulars under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees)Rules, 1975 forming part of the Directors' Report for the Year ended 31st March, 2008.

Employed throughout the year and was in receipt of remuneration for the year in the aggregate of not less than Rs. 24,00,000

Name Age Designation Remuneration Qualification Experience Date of Last(Yrs.) Received (Yrs.) Commencement Employment

(Rs.) of Employment

Mr. Saket Jindal 34 Managing Director 3,986,400 BBA 13 01.09.1996 NA

Notes:

1. Remuneration includes Salary, Company's contribution to Provident fund, Bonus/ex-gratia, taxable value of perquisites and otherallowances as per Company's Rules.

2. Mr. Saket Jindal is related to Mr. D.P. Jindal, Chairman of the Company.

For and on behalf of the Board

D. P. JINDALChairman

Place : GurgaonDated : August 28, 2008

For and on behalf of the Board

D. P. JINDALChairman

Place : GurgaonDated : August 28, 2008

26

ANNEXURE TO DIRECTORS' REPORTINFORMATION AS PER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARSIN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED31st MARCH, 2008.

A. CONSERVATION OF ENERGY

a) Energy Conservation measures taken:

1. The electronics and other electrical instruments of hot mill furnaces were replaced with new PLC and SCADA softwarefor effective control of combustion parameters which in turn reduce the fuel consumption

2. Preventive maintenance were made effective to reduce the flue gas leakages through the roof to improve the fuelconsumption

3. Two more furnace combustion system modified to use Furnace Oil instead of LDO were implemented and regular in use.So the cost of fuel has come down considerably due to increase in price of LDO

4. Frequency Variable Drives were added more wherever the equipments are not fully loaded to reduce the power consumptionand to achieve speed effectiveness in operation

5. Fuel Additives used in Heavier Oil are continuing to have proper combustion also to have a controlled process parametersand fuel oil savings.

b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy.

It is proposed to install additional APFC panels to improve the power factor to unity and Harmonic filters to reduce theharmonic distortion.

c) Impact of measures at a & b above for reduction of energy consumption and consequent impact on the cost of productionof the goods.

The measures taken by the Company and the proposed measures will result in reduction of energy consumption and subsequentreduction in cost of the product.

d) Total energy consumption and energy consumption per unit of production.

As per Form-A annexed.

B. TECHNOLOGY ABSORPTION

e) Dual Layer Epoxy coating facility has been added and successfully commissioned in the existing 3 Layer Polyethylene/Polypropylenecoating facility.

The quality and process were approved by the Oil and Gas pipe customers.

This addition of new product will increase the volume of business in coating plant

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

f) Activities relating to exports; initiatives taken to increase exports; development of new export markets for productsand services; and export plans.

The Company is thrusting on export business in view of conducive market conditions overseas. It has also set-up it'sRepresentative Office in Houston, Texas, USA for customer relationship and after sales service besides exploring furtheropportunities there and in neighboring countries. Accordingly, the export mix in the total sales is likely to increase. This willresult in substantial foreign exchange earnings and would also result in import substitution and conservation of valuableforeign exchange.

g) Total foreign exchange used and earned

Used - Rs.256.70 Crore

Earned* - Rs.487.95 Crore

* Supplies to Oil Sector by the Company result in import substitution & consequent saving of substantial Foreign Exchangefor the country.

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a) SEAMLESS PIPES (MT)

Electricity (Units) 247.312 250.029

LDO/Furnace Oil (KL) 0.123 0.117

HSD(KL) 0.001 0.001

LPG(MT) 0.002 0.003

b) ERW PIPES (MT)

Electricity (Units) 66.645 79.325

HSD/Furnace Oil (KL) 0.000 0.002

Note: The figures are re-grouped/re-arranged wherever considered necessary.

FORM AFORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO :

CONSERVATION OF ENERGY

A. POWER AND FUEL CONSUMPTION

Particulars Year ended Year ended31-03-2008 31.03.2007

1. Electricity Purchased

Units(KWH in lacs)* 692.07 639.46

Total Amount (Rs. In lacs) 3,644.44 3,127.79

Rate Per Unit (Rs.) 5.27 4.89

*Includes 85.77 lacs (previous year 102.05 lacs) unitsgenerated by Wind Power Project of the Company.

2. Fuel Consumption

a) LDO

Quantity (KL) 30,127.59 27,051.99

Total Amount (Rs.in lacs) 6,921.48 5,582.82

Average Rate per KL (Rs.) 22,973.90 21,635.45

b) HSD

Quantity (KL) 226.73 205.93

Total Amount (Rs. in lacs) 59.16 58.70

Average Rate per KL (Rs.) 26,093.17 28,504.55

c) LPG

Quantity (MT) 579.45 587.59

Total Amount (Rs. in lacs) 202.44 179.85

Average Rate Per MT (Rs.) 34,936.58 30,608.09

3. Other/Internal generation/Wind Power(KWH in lakhs) 92.22 109.73

B. CONSUMPTION PER UNIT OF PRODUCTION

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FORM BFORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO:

RESEARCH AND DEVELOPMENT (R&D)1. Specific areas in which R&D carried out by the Company

i) To improve the pipe quality a new concept of quencing by immersion type is under implementation.ii) R&D activities of the Company remained centered around the development of new products, improvement of existing products

and processes, problem solving, cost reduction, pollution control, and energy conservation.Activities carried out during the year:

l API 5CT Grade L80 13 Cr has been successfully developed for outside diameter 7"x 10.36 mm (29.00 PPF) and Casing havebeen exported to US Market.

l Other sizes of casing and tubing of API 5CT Grade L80 13 Cr like 9-5/8", 2-7/8" & 3-1/2 " are under development for executingexport orders.

l ASTM 213 Grade T91, T5 & T9 and Boron steel pipes / tubes are under process of developmentl For ERW Pipes, Gr. X-70 has been successfully developed and being supplied to esteemed customers like IOCL etc.l For better rust prevention and aesthetic looks, use of ultra violet varnish as an alternative for present rust preventative, is

under development.2. Benefits derived as a result of above R&D

As a result of the R&D activities, new products were developed viz. 13 Cr Casting and Tubing and Higher Grades for X70 ERWPipes etc., existing products and process were improved and costs were reduced through energy conservation and savings inthe use of materials.

3. Future plan of actionConcentration will remain in the development of new sizes and up-gradation of the quality. The high priority will be given tothe up-gradation of technology, energy conservation, and cost reduction etc. few of the targets fixed are enumerated here below:l Developing NACE Lab to enable to compete specially in the export market for orders of Pipes for SOUR applicationl To Build in-house Varnish Test Lab to qualify and approve the rust preventive varnish, before usel To fulfill IBR requirement, we are planning to develop Elevated Temperature Tensile Testing machinel Implementation of ISO14001 (Environmental Management System) and OHSAS 18001 (Occupational Health and Safety

Management System)4. Expenditure on R&D

Expenditure on R&D is not separately allocated and identified.TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION1. Efforts in brief made towards technology absorption, adaptation and innovation.

The production/Quality Control department absorbs the technology received from the collaborators, adopting the same to localconditions and uses its own experience to effect improvements to the product and manufacturing process.

2. Benefits derived as a result of the above efforts etc.Through above measures, the Company has continued to achieve product improvement/ development, process improvement/development, commercialization of technology, cost reduction, import substitution etc. It aforesaid efforts will also result in avibrant organization ready to face the challenge of global market scenario and striving towards exceeding customer expectation.

3. In case of imported technology (Imported during the last 5 years reckoned from the beginning of the financial year)prescribed information may be furnished:

Technology Imported Year of Import Has Technology If not fully absorbed,been fully absorbed areas where this has

not taken placeTechnical know-how and process detail for plug mill 2003 - 2004 Yes N. A.and classical rellers received from USA3 LPE / 3 LPP Coating Plant - C Type (Korea) 2006 - 2007 Yes N.A.3 LPE / 3 LPP Coating Plant - O Type (Korea) 2007 - 2008 Yes N.AInternal Coating Plant for Line Pipes (Korea) 2007 - 2008 Yes N.A

29

AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

To The Members of

MAHARASHTRA SEAMLESS LIMITED

We have examined the compliance of conditions of corporate governance by Maharashtra Seamless Limited for the year ended on31st March 2008, as stipulated in Clause 49 of the Listing Agreement of the said Company with the stock exchange.

The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited toprocedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of CorporateGovernance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company hascomplied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement.

As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we have to state that as per the recordsmaintained by the Company, no investor grievance is pending for a period exceeding one month.

We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectivenesswith which the management has conducted the affairs of the Company.

For KANODIA SANYAL & ASSOCIATESChartered Accountants

R.K. KANODIAPartner

Membership No.16121Place : New DelhiDated : August 28, 2008

30

CORPORATE GOVERNANCE REPORTYour Company believes in conducting its affairs with the highest levels of integrity, with proper authorisations, accountability,disclosure and transparency. The Company strongly believes in maintaining a simple and transparent corporate structure drivensolely by business needs. Shareholders interests are on utmost priority and the management is only a trustee to carry out the activitiesin a truthful and fruitful manner.

The details of the Corporate Governance compliance by the Company as per the Clause 49 of the Listing Agreement with StockExchanges are as under:

A COMPLIANCE OF MANDATORY REQUIREMENTS:

1. BOARD OF DIRECTORS

Composition

The Company has a Non-Executive Chairman who is also a promoter of the Company. One-half of the Board of the Companyconsists of Independent Directors. The number of Non-Executive Directors (NEDs) exceeds 50% of the total number of Directors.None of the Directors on the Board is a Member on more than 10 Committees and Chairman of more than 5 Committees (asspecified in Clause 49 of the Listing Agreement with Stock Exchanges), across all the companies in which they are Directors.The Directors have made the necessary disclosures regarding Committee positions. Six Board Meetings were held during the year2007-08 and the gap between two meetings did not exceed four months. The Board Meetings were held on 25th April 2007,30th July 2007, 22nd August 2007, 28th September 2007, 30th October 2007 and 31st January 2008. The names and categoriesof the Directors on the Board, their attendance at Board Meetings during the year and at the last Annual General Meeting, asalso the number of Directorships held by them in other companies are given below:

C = Chairman, MD = Managing Director, WTD=Whole time Director, NE = Non-Executive

* Also Independent in terms of Provisions of Clause 49 (1)(A)(iii)

Note:

1. Only Audit and Investor Grievance Committees are considered.

2. Excludes private/foreign companies.

3. All the independent Directors fulfill the minimum age criteria i.e. 21 years as specified in Clause 49 of the listing agreement.

The information as required under Annexure I to Clause 49 is being made available to the Board.

No Director is related to any other Director on the Board in terms of the definition of “relative” under the Companies Act, 1956,except Mr. D.P. Jindal, who is father of Mr. Saket Jindal.

CODE OF CONDUCT

The Board of Directors has adopted the Code Conduct and Ethics for Directors and Senior Management personnel. The Code hasalso been posted on the Company’s website www.jindal.com.

Mr. D.P. Jindal C (NE) 48820 5 Yes 4 1 -

Mr. Saket Jindal MD 1745764 5 Yes 3 2 1

Mr. S. P. Raj WTD - 4 Yes - - -

Mr. U. C. Agarwal NE* 1000 6 Yes 1 - -

Mr. D. K. Parikh NE* - 5 Yes - - -

Mr. H. K. Khanna NE* 220 5 Yes 4 2 -

No. of other Directorships and CommitteeMemberships/ Chairmanships held

Attendance

Directors Category Sharesheld Board

MeetingLastAGM

Directorships

CommitteeMemberships

CommitteeChairmanships

31

The Code has been circulated to all the members of the Board and senior management personnel and the compliance with theCode of Conduct and Ethics is affirmed by them annually.

A declaration signed by the CEO and Managing Director of the Company is given below:

I hereby confirm that the Company has obtained from all the members of the Board and Senior Management, affirmation thatthey have complied with the Code of Conduct and Ethics for Directors and Senior Management in respect of the financial year2007-08.

2. AUDIT COMMITTEE

The terms of reference of the Audit Committee mandated by the statutory and regulatory requirements viz. Listing Agreement,Companies Act, 1956 etc., which are also in line with the mandate given by your Board of Directors, are:

a. Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that thefinancial statement is correct, sufficient and credible;

b. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutoryauditor and the fixation of audit fees;

c. Approval of payment to statutory auditors for any other services rendered by the statutory auditors;

d. Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particularreference to:

i. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s Report in termsof clause (2AA) of Section 217 of the Companies Act, 1956;

ii. Changes, if any, in accounting policies and practices and reasons for the same;

iii. Major accounting entries involving estimates based on the exercise of judgment by management;

iv. Significant adjustments made in the financial statements arising out of audit findings;

v. Compliance with listing and other legal requirements relating to financial statements;

vi. Disclosure of any related party transactions; and

vii. Qualifications in the draft audit report;

e. Reviewing, with the management, the quarterly financial statements before submission to the Board for approval;

f. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal controlsystems;

g. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffingand seniority of the official heading the department, reporting structure, coverage and frequency of internal audit;

h. Discussion with internal auditors any significant findings and follow up thereon;

i. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraudor irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;

j. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-auditdiscussion to ascertain any area of concern;

k. To look into the reasons for substantial defaults in payment to the depositors, debenture holders, shareholders (in case ofnon payment of declared dividends) and creditors;

l. To review the functioning of the Whistle Blower mechanism, in case the same exists;

m. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

28th August, 2008SAKET JINDALManaging Director

32

Five meetings of the Audit Committee were held during the year 2007-08. The dates on which the Audit Committee Meetingswere held were 25th April 2007, 30th July 2007, 22nd August 2007, 30th October 2007 and 31st January 2008. The composition,names of the members, chairperson, particulars of the Meetings and attendance of the members during the year are as follows:

INTERNAL AUDITORS

The Company has appointed a firm of Chartered Accountants as Internal Auditors to review the internal control systems of theCompany and to report thereon. The Audit Committee reviews the reports of the Internal Auditors periodically.

3. REMUNERATION TO DIRECTORS

The Company does not have a Remuneration Committee. Detailed terms of appointment of the Managing and WholetimeDirectors are governed under Board and Members’ Resolutions. None of the Non-Executive Directors draw any remunerationfrom the Company except sitting fees of Rs. 10,000/- for attending each meeting of the Board and Rs. 5000/- for attending eachmeeting of the Audit Committee.

Details of Directors Remuneration

a) The Details of remuneration paid to Managing and Whole Time Directors during the year ended 31st March, 2008 are asunder:-

Mr. U.C. Agarwal Chairman, Independent, Non-Executive 5

Mr. D.P. Jindal Member, Non-Executive 4

Mr. D. K. Parikh Member, Independent, Non-Executive 4

Mr. H. K. Khanna Member, Independent, Non-Executive 4

Members Category No. of meetings attended

The tenure of appointment of the Managing Director and Whole time Director is for a period of 5 years w.e.f. 01.10.2005.

b) The Non-executive Directors are paid by way of sitting fees for each meeting of the Board of Directors and Audit Committee. The details of remuneration paid in the form of sitting fee to Non-Executive Directors during the year ended 31st March,2008 is as under: -

Mr. Saket Jindal, 3,000,000 986,400 3,986,400Managing Director

Mr. S.P. Raj 430,180 267,668 697,848Whole Time Director

(Rs.)

Name Salary Perquisites & other benefits Total

Apart form receiving Directors remuneration by way of sitting fee for attending each meeting of Board and Audit Committee,none of the Non-Executive Director has any pecuniary relationship or transactions with the company during the year ended31st March 2008.

4. SHAREHOLDERS’/INVESTORS’ SHARE TRANSFER CUM GRIEVANCE COMMITTEE

FUNCTIONS

The Board has constituted a Committee of three members under the Chairmanship of a Non Executive Director. The Committeegenerally meets twice in a month, to approve inter-alia, transfer/transmission of shares, issue of duplicate share certificates andreviews the status of investors’ grievances and redressal mechanism and recommends measures to improve the level of investor

Directors Sitting Fees(Rs.)

Mr. D. P. Jindal 70,000

Mr. U. C. Agarwal 85,000

Mr. D. K. Parikh 70,000

Mr. H. K. Khanna 70,000

33

services. Also reviews the status of legal cases involving the investors where the Company has been made a party. Details ofshares transfers/transmissions approved by the Committee are placed at the Board Meetings from time to time.

COMPOSITION

The constitution of the Shareholders’/ Investors’ Share Transfer cum Grievance Committee is as under:-

COMPLIANCE OFFICER

The Board has designated Mr. P.K. Puhan, Company Secretary as Compliance Officer of the Company.

DETAILS OF SHAREHOLDERS’ COMPLAINTS RECEIVED AND REPLIED TO THE SATISFACTION OF SHAREHOLDERS

Name of the Members Category

Mr. D.P. Jindal Chairman, Promoter, Non-executive

Mr. Saket Jindal Member, Promoter, Executive

Mr. H.K. Khanna Member, Independent, Non-executive

5. GENERAL BODY MEETINGS

(I) Details of the Location of the last three Annual General Meetings:

Number of Shareholders complaints received during the period 01.04.2007 to 31.03.2008 : 139

Number of complaints not solved to the satisfaction of shareholders : Nil

Number of pending complaints as on 31.03.2008 which were solved later on : Nil

(II) Special Resolutions passed in the previous three AGMs:

a) In the AGM held on 09.09.2005 : For payment of sitting fees along with any other compensation and/orexpenditure to its Non-executive Directors pursuant to Clause 49 of theListing Agreement and Section 309, 310 and other applicable provisions ofthe Companies Act, 1956.

b) In the AGM held on 29.09.2006 : For delisting of equity shares from Delhi Stock Exchange Association Limited,The Calcutta Stock Exchange Association Ltd. and Madras Stock ExchangeLimited.

c) In the AGM held on 28.09.2007 : i) For issuance of 1(one) equity share on preferential basis to Mr. RaghavJindal belonging to the Category Promoter & Promoter Group, pursuantto Section 81(1A) and other applicable provisions of the Companies Act,1956.

ii) For alteration of Capital Clause of the Articles of Association of theCompany.

iii) For enhancement of the limit for acquisition/purchase of Company’sequity shares by Foreign Institutional Investors (FIIs) under PortfolioInvestment Scheme (PIS) upto 40% of the paid-up equity capital of theCompany.

(III) During the last year, no Special Resolution was put through Postal Ballot. No Special Resolution is proposed to be conductedthrough Postal Ballot.

Financial year Date Location of the Meeting Time

2004-05 20.09.2005 Registered Office of the Company at Pipe Nagar, Raigad 11.30 A.M.

2005-06 09.09.2006 Registered Office of the Company at Pipe Nagar, Raigad 11.30 A.M.

2006-07 28.09.2007 Registered Office of the Company at Pipe Nagar, Raigad 11.30 A.M.

34

6. DISCLOSURES

i) Related Party Transactions

There have been related party transaction as reflected in notes to the accounts but they are not in conflict with the interestof the Company.

ii) Accounting Standards

The Company follows the Accounting Standards laid down by the Institute of Chartered Accountant of India and therehas been no deviation during the year.

iii) Details on Non Compliance

There are no instances of non-compliance by the Company on any matter relating to the Capital Market during the last3 years.

iv) CEO/CFO Certificate

The Managing Director, Mr. Saket Jidnal and Mr. Anil Jain, CFO have furnished the required certificate to the Board ofDirectors pursuant to Clause 49 of the Listing Agreement.

v) Whistle Blower Policy

The Company does not have any Whistle Blower Policy, however, no person has been denied access to Audit Committee.

7. MEANS OF COMMUNICATION

The Company’s financial results are forthwith communicated to all the Stock Exchanges with whom the Company has listingarrangements as soon as they are approved and taken on record by the Board of Directors of the Company. Thereafter theresults are normally published in Business Standard, Financial Express and Samna. The Financial Results are also available onthe Company’s website www.jindal.com. The required disclosure to the extent applicable were also posted on the SEBI EDIFARwebsite www.sebiedifar.nic.in .

Designated Exclusive e-mail ID: The Company has designated the following e-mail ID exclusively for investor servicing:secretarial@mahaseam.com

8. GENERAL SHAREHOLDERS INFORMATION

a) Annual General Meeting :

Date & Time : 27th September, 2008 at 11.30 A.M.

Venue : Registered Office of the Company at Pipe Nagar, Village Sukeli, N.H. 17, B.K.G. Road, Taluka-Roha, Distt. Raigad, Maharashtra – 402126

b) Financial Year : 1st April to 31st March

c) Book Closure : 20th Sept. 2008 to 27th Sept. 2008 (both days inclusive)

d) Dividend A dividend @ 100%(Rs.5/- per share), if approved by the members, would be payable on andafter 1st October 2008 onwards.

Financial Calendar (Tentative):

- Financial reporting for the quarter ended 30th June, 2008 : July, 2008

- Financial reporting for the quarter ending 30th September, 2008 : October, 2008

- Financial reporting for the quarter ending 31st December, 2008 : January, 2009

- Financial reporting for the year ending 31st March, 2009 : April, 2009

Listing on Stock Exchanges:

The Equity Shares of the Company are listed on Bombay Stock Exchanges Limited, National Stock Exchange of India Limited, DelhiStock Exchange Limited, Madras Stock Exchange Limited and The Calcutta Stock Exchange Association Limited. The listing fee forthe year 2008-09 has been paid to all the Stock Exchanges.

Stock Code : BSE - 500265

NSE - MAHSEAMLES

NSDL/CDSL – ISIN - INE 271B01025

35

Stock Market Data

The monthly high and low quotations of shares traded on BSE and NSE are as under:-

April 2007 598.00 475.65 594.90 478.00

May 2007 593.45 551.00 593.70 531.00

June 2007 670.00 575.00 665.75 571.95

July 2007 675.00 594.00 755.00 581.00

August 2007 624.00 536.00 623.95 530.00

September 2007 671.90 582.15 636.60 580.00

October 2007 624.00 440.00 623.45 430.00

November 2007 526.00 460.20 522.00 452.60

December 2007 649.95 505.10 649.00 506.00

January 2008 660.00 350.00 660.00 350.00

February 2008 420.00 305.00 418.00 302.65

March 2008 339.50 258.55 339.00 232.70

N S EMONTH

LOW (Rs)

B S E

HIGH (Rs) LOW (Rs) HIGH (Rs)

SHARE PERFORMANCE CHART

Shar

e Pr

ice

(Rs.)

0100

200

300

400500

600700800

PERFORMANCE OF SHARE PRICE AT NSE DURING 2007-08

NSE High(Rs . )

NSE Low(Rs . )

Shar

e Pr

ice

(Rs.)

0100

200

300

400500

600700800

PERFORMANCE OF SHARE PRICE AT BSE DURING 2007-08

BSE High(Rs . )

BSE Low(Rs . )

APR,07

MAY,07

JUNE,07

JULY,07

AUG,07

SEP,07

OCT,07

NOV,07

DEC,07

JAN,08

FEB,08

MAR,08

APR,07

MAY,07

JUNE,07

JULY,07

AUG,07

SEP,07

OCT,07

NOV,07

DEC,07

JAN,08

FEB,08

MAR,08

36

Upto 500 27097 93.94 3681724 5.22

501 to 1000 974 3.38 773496 1.11

1001 to 5000 496 1.72 1078860 1.53

5001 to 10000 67 0.23 493046 0.70

10001 to 20000 57 0.20 848824 1.20

20001 to 30000 32 0.11 805544 1.14

30001 to 40000 11 0.04 376278 0.53

40001 to 50000 8 0.03 369775 0.52

50001 to 100000 27 0.09 2074062 2.94

100001 to Above 77 0.26 60031813 85.11

Grand Total 28846 100.00 70533422 100.00

% of ShareholdingNo. of EquityShares held

No.of Shareholders % of shareholders No.of Shares held

Distribution of shareholding as on 31st March, 2008

Shareholding Pattern as on 31st March, 2008:

Promoters 32602813 46.22

Mutual Funds 10160716 14.40

Financial Institutions/Banks 111032 0.16

Insurance Companies 311497 0.44

Foreign Institutional Investors 7130145 10.11

Bodies Corporate 11890640 16.86

NRIs / OCBs / Foreign Companies 1618893 2.30

Indian Public & Others 6707686 9.51

Grand Total 70533422 100.00

CATEGORY NO. OF SHARES HELD % OF HOLDING

Dematerialisation of Shares and Liquidity

The Company’s shares are compulsorily traded in dematerialised form. As on 31st March 2008, 55.85% of total equity shares wereheld in dematerialised form.

Outstanding GDR / ADR / Warrants and Convertible Bonds, conversion date and likely impact on equity:

The Company has no outstanding GDRs/ADRs/Warrants or any other convertible instruments as on 31st March 2008.

37

Plant Locations:1. Seamless & ERW Pipes 2. Wind Power

Pipe Nagar, Village Sukeli, Village Nivkane, Taluka Patan,N.H.17, B.K.G. Road, Taluka-Roha, Distt. Satara (Maharashtra)Distt.Raigad – 402 126 (Maharashtra)

Registrar and Share Transfer Agents:Alankit Assignments Limited,Alankit House,2E/21, Jhandelwalan Extension,New Delhi – 110 055Phone : 011-23541234,42541234Fax : 011-42541201e-mail : rta@alankit.com

Share Transfer System:

Share transfer requests received in physical form are registered within 15 days from the date of receipt and demat requests arenormally confirmed within the prescribed time from the date of receipt.

Investor correspondence address

Shareholders correspondence should be addressed to the Registrar and Transfer Agent at the address given below or to the CorporateOffice of the Company.

Alankit Assignments Limited,Alankit House,2E/21, Jhandelwalan Extension,New Delhi – 110 055Phone : 011-23541234, 42541234Fax : 011-42541201e-mail : rta@alankit.com

Shareholders holding shares in dematerialized form should address all their correspondence to their respective Depository Participant.

COMPLIANCE CERTIFICATE OF THE AUDITORS

Certificate from the Auditors of the Company, M/s. Kanodia Sanyal & Associates, Chartered Accountants confirming compliancewith the conditions of Corporate Governance as stipulated under Clause 49, is forming part of the Annual Report.

B. NON-MANDATORY REQUIREMENTS

(1) a) CHAIRMAN OF THE BOARD

The Company has a Non-executive Chairman and expenses incurred in performance of his duties are paid by theCompany.

b) TENURE OF INDEPENDENT DIRECTORS

In terms of the Governance policy of the Company, all Directors, including Independent Directors (excluding ManagingDirector & Whole Time Director being appointed for a tenure of 5 years) are subject to retirement by rotation. However,no maximum tenure, in the aggregate for independent directors has been specifically determined by the Board.

(2) REMUNERATION COMMITTEE

The Company does not have any Remuneration Committee. There are 6 members on the Board and remuneration ofManaging Director/Whole Time Director is being approved by the Board of Directors and shareholders.

(3) SHAREHOLDERS RIGHTS

As the Company’s quarterly results are published in leading English newspapers having circulation all over India and in aregional language newspaper widely circulated in the Region, the same are not sent to each household of shareholders.

38

(4) AUDIT QUALIFICATIONS

There are no Audit Qualifications in the Auditors’ Reports.

(5) TRANING OF BOARD MEMEBRS

At present, the Company does not have such a training programme for the Board Members.

(6) MECHANISM FOR EVALUATING NON-EXECUTIVE BOARD MEMBERS

At present, the Company does not have such a mechanism as contemplated for evaluating the performance ofNon-Executive Board Members.

(7) WHISTLE BLOWER POLICY:

The Company does not have any Whistle Blower Policy as of now but no personnel are being denied any accessto the Audit Committee.

39

MANAGEMENT DISCUSSION AND ANALYSISFORWARD LOOKING STATEMENTS

The statement in the Directors ‘Report and Management Discussion and Analysis Report contains “forward-looking statements” aboutthe business, financial performance, skills and prospects of the Company. Statements about the plans, intentions, expectations, beliefs,estimates, predictions or similar expression for future are forward-looking statements.

Forward-looking statements should be viewed in the context of many risk issues, and events that could cause the actual performanceto be different from that contemplated in the Directors’ Report and Management Discussion Analysis Report, including but not limitedto, the impact of changes in oil, Steel prices worldwide and domestic, economic and political conditions. We cannot assure that outcomeof this forward-looking statements will be realized. The Company disclaims any duty to update the information given in the aforesaidreports.

INDUSTRY STRUCTURE AND DEVELOPMENT

The Indian Pipe Industry is among the world’s top three manufacturing hubs after Japan and Europe. India is today at the centrestage of huge Economic turmoil across the Globe. As the US and Europe have receded into slowing down, China and India haveemerged as the two engines which can fuel Economic growth in these tough times. This is the right moment for India to take itsrightful position as Economic Superpower fueled by huge Entrepreneurial growth and emerging opportunities. The Steel prices havebeen extremely volatile and have increased considerably with the rise in the prices of scarce raw materials like coal and iron ore.However the Company has largely been able to pass on this burden as there has been a good demand in the market. The competitionfrom China has eased out and your Company has regained its market share in the boiler segment. The recent imposition of exporttax on steel pipes has been withdrawn by the government and rightly so, as it would have been a hurdle for all domestic players.

STRATEGIC ACQUISITIONS

Your Company has acquired a Seamless Plant in Romania having an installed capacity of 200000 TPA. The plant has been acquiredon Assets Sale basis without any Liability, having the capacity to manufacture Seamless Pipes upto 6" OD including Drill Pipes. Theplant is being dismantled and will be relocated to, in the District of Raigad, Maharashtra and is likely to be operational in the next2 years. Necessary land has been purchased and civil construction work has already started. The total cost of the project includingsetting up of the infrastructure at the new location for the facility and complete modernization is estimated to cost INR 325 Crores,which will be largely funded out of internal resources only. The Plant Facility would also include the Drill Pipe capability, which hasa very strong demand in the current OCTG segment. It is likely to add to the substantial growth in the businesses and profitabilityof the Company.

BACKWARD INTEGRATION PROJECT

The Company plans to implement a Strategic Backward Integration Project to manufacture Billets, the basic feed material forSeamless Pipes making, having a capacity of 0.50 Million TPA.

The Govt. of India has recently approved allocation of Coal Block to your Company in Maharashtra. Coal is also one of the majorraw-material for manufacture of steel products. The Company would utilize this coal reserve for its proposed steel project. Thus,with both horizontal as well as vertical integration, your company is aiming for a complete control on its cost and accordingly it ispoised for a good growth in future.

OPPORTUNITIES & THREATS

The oil prices have crossed the $100 per barrel mark which is promoting exploration and drilling activity worldwide and in turnincrease demand for seamless pipes. Recently the Company has bagged export orders from USA at high realizations and the marketis expected to remain bullish in the near term.

Your Company is under process of procuring a state of the art solid state welder from Thermatool, UK which shall upgrade the ERWfacility and also finalizing a full body ultrasonic testing machine from Tuboscope, USA which shall help the Company in obtainingApprovals from global oil MNCs.

Higher steel prices would lead to higher cost of production and ultimately reduce Company’s margins. US slowdown may affectthe export business of the Company. Foreign exchange volatility, high cost of energy, rising interest rates may affect the businessof the Company.

SEGMENT-WISE PERFORMANCE

The Company has primarily three segments – Seamless, ERW and Wind Power. All the three segments contribute positively to theprofitability. Seamless Pipes Division constitutes 76% of turnover of the Company. The contribution of the Seamless Pipes Divisionis over 81% of the total Profit Before Tax. ERW Division constitutes around 23% of turnover of the company. 7 MW Wind PowerProject of the Company is meeting around 13% of Power requirement and has helped in reducing over all cost of power. The companyis also enjoying various fiscal incentives from the state of Maharashtra.

40

FUTURE OUTLOOK

The market for Seamless pipe is looking quite robust and with crude remaining above US $ 100 per barrel, the demand for thesepipes should be quite strong. Seamless Steel pipes and tubes cater to the needs of oil and non-oil sector. Hydrocarbon Sector isone of the largest consumers of Seamless Pipes in India as well as in international market. The outlook for the sector is stronglylinked to growth in Exploration and Production (E&P) activities in both domestic and international market, which is being drivenup by strong crude oil prices. On the back of the strong growth in oil, industrial machinery, housing and automobile sector, thedemand for seamless steel pipes is on the rise. The domestic production of seamless pipes is expected to witness a big leap inproduction during the next 4-5 years as a result of announced capacities, coming into full production.

Apart from E&P activity, there is also significant interest in deep sea drilling. Continuous high crude oil prices are spurring playerslike ONGC, Reliance industries, British Gas, Cairns Energy, Niko Resources etc. to make substantial investments in offshore & deepwaterdrilling. Moreover, strong growth expected in Infrastructure, power, construction and housing sector would only lead to substantialdemand. With the setting-up of its higher dia seamless plant, the Company has extended its product range and is well positionedto meet the growing requirement of the market.

RISKS AND CONCERNS

The Company is procuring its major feed material i.e. Steel Round Billet from external sources and therefore any steep price hikeand/or delay in supplies may affect the production, the margins and the profitability of the Company, as it may not be feasible topass on the hike to customers immediately/under fixed price contracts. However, after the supplies under these contracts are over,the Company increases the prices in the market.

The Company had raised funds by way of FCCB issue, which has been entirely converted in Indian Equity Shares. US$ 61.66 Millionis lying on the assets side in US Dollars which has been kept to fund its CAPEX. However, in the intermittent stage it would be lyingas Bank Deposits and any adverse change in the Foreign Exchange Rates during that period would expose the Company to thecurrency fluctuation/translation risk.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an adequate system of internal controls to ensure accuracy of accounting records, reliability of financial informationand compliance with all laws and regulations.

An independent firm of Chartered Accountants carries out an extensive internal audit. The Audit Committee reviews the AuditReports submitted by the Internal Auditors, suggestions for improvements and the Audit Committee follows up on the implementationof the corrective actions.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year the turnover of the Company increased to Rs.1640 crore from Rs.1520 crore in the previous year – a growth of7.94%. The profit before tax for the year was Rs.302 crore as against Rs.353 crore in the previous year. The profit after tax &adjustments for the year had been Rs195 crore as against Rs. 234 crore in the previous year.

FINANCE COST

The interest and finance charges for the year ended 31st March 2008 were Rs.3.75 crore as against Rs. 3.50 crore in the previousyear.

PAID-UP SHARE CAPITAL

Paid-up Share Capital of the Company comprises Equity Share Capital of Rs.35.27 crore as on 31st March 2008.

RESERVES & SURPLUS

Reserves & Surplus of the Company were Rs.1058 crore as on 31st March 2008 as against Rs.889 crore as on 31st March 2007.

EARNING PER SHARE

Adjusted earning per share for the financial year 2007-08 was Rs.27.70 as against Rs.38.00 in the previous year.

Maharashtra Seamless approach to Business

MSL’s Vision is to:

l Maintain & strengthen leadership position in Seamless Industry with continued focus on innovation and value addition.

l A highly respected industry leader with which all stakeholders are proud to be associated. Constantly endeavor to make all itsstakeholders and customers to be proud of their association with the company.

41

All manufacturers provide some form of value to their customers – MSL aspires to be the partner of choice for its Seamless andERW pipe customers through adding extra value to its customers than other competitors.

MSL has a wide range of stakeholders including its shareholders, the investment community, customers, suppliers, bankers, employees& their families and the local community within which its operations are situated. MSL always strives to make all its stakeholdersproud of their relationship with the company.

Business strategy that will take the Company towards its Vision is:

l Deliver better value products to customers

l “Solution partnership strategy” through proactive approach towards customers

l Constant up-gradation of technology so as to expand product applications and highest quality standards.

The only true and ultimate measure of MSL’s success is the extent to which it improves the business performance of its customers. The way in which MSL strives to achieve this is through its “Solutions Partner strategy” wherein MSL and its customers:

l Work in partnership to address performance improvement opportunities of highest priority to the customer.

l Combine customer’s expertise with MSL’s proprietory technology, process and product application knowledge.

In addition to its Vision and Business Strategy, at the core of MSL’s approach to business is:

Total Quality Management

The very foundation of MSL’s activities is Total Quality Management. TQM means that all employees strive for excellence in everyaspect of the company’s operations. MSL is an organization constantly seeking better ways of doing things to improve quality,efficiency and to reduce cost and thereby ultimately to provide greater customer satisfaction. TQM will be part of every activityand every process that the company operates, an integral part of the way that every employee works. The Company is accreditedto the international ISO: 9001: 2000 standards.

Key features of the company’s performance during the year were:

Record turnover

l Continued focus on cost effectiveness

l Prudent management of working capital

l Strong cash generation, thereby making sufficient provision for future capital investments, enabled the company to reward itsshareholders with 100% dividend.

Human Resource Management and Industrial Relation

Industrial relations at all units of the Company remained cordial and harmonious throughout the year. The Company’s HumanResource Management system and procedures are formulated to create a responsive, customer centric, market focused culture andenhance organizational vitality. The Company has successfully managed to attract, retain and nurture talent of high quality andhas witnessed significant prospects from the human resource and industrial relations perspective. The Company continued to focuson training its employees on a continuation basis, both on the job and through training programmes by internal and external agencies.The employee strength of MSL as on 31st March 2008 was 1037, including 433 workers.

42

AUDITORS’ REPORTTo The Members of

Maharashtra Seamless Limited

We have audited the attached Balance Sheet of M/S MAHARASHTRA SEAMLESS LIMITED as at 31st March 2008 and also theannexed Profit and Loss Account and the Cash Flow Statement for the year ended on that date (together referred to as ‘financialstatements’). These financial statements are the responsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimates made by the management, as well as evaluatingthe overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A),of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said order.

Further to our comments in the Annexure referred to above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for thepurposes of our audit.

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examinationof such books.

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the booksof account.

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash flow Statement dealt with by this report have been preparedin compliance with the Accounting Standards referred to in Sub Section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, we reportthat none of the said directors are disqualified as on 31st March 2008, from being appointed as directors in terms of clause(g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statementsread together with significant accounting policies and notes thereon in Schedule ‘20’ give the information required by theCompanies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

i. In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2008 and,

ii. In the case of the Profit & Loss Account, of the Profit of the Company for the year ended on that date.

iii. In case of the Cash Flow Statement, of the cash flows for the year ended on that date.

For KANODIA SANYAL & ASSOCIATESChartered Accountants

R.K. KANODIAPartner

Membership No.16121Place : New DelhiDated : August 28, 2008

43

ANNEXURE TO AUDITORS’ REPORT OF MAHARASHTRA SEAMLESS LIMITED(Annexure referred to in our report of even date)

1. (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixedassets.

(b) The company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable havingregard to the size of the Company and the nature of its assets. As explained to us, the management during the year hasphysically verified all the fixed assets of the Company and no material discrepancies between the book records and thephysical verification were noticed on such verification.

(c) Fixed assets disposed off during the year, were not substantial and, therefore, it does not affect the going concern assumption.

2. (a) As explained to us, the inventories of finished goods, semi finished goods, stores, spare parts and raw materials except rawmaterial in transit, lying with the third parties, have been physically verified by the management during the year. In ouropinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification ofinventories followed by the management are reasonable and adequate in relation to the size of the company and the natureof its business.

(c) The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticedon physical verification of inventory as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the company to / from companies, firms or other parties coveredin the register maintained under section 301 of the Companies Act, 1956:

(a) The company has granted loans to two companies during the year. The maximum amount involved during the year wasRs. 642,667,902/- the year end balance of loan granted to such companies was Rs. 351,168,422/-. The company has nottaken any loans during the year secured or unsecured to any Company, firm or party covered in register maintained undersection 301 of the Companies Act, 1956.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms andconditions are not prima facie prejudicial to the interest of the company.

(c) In respect of loans granted by the company the interest payments are regular and the principal amounts are being received/renewed on the due dates. In respect of loans taken by the company, the interest payments are regular and the principalamount is repayable on demand.

(d) There is no overdue amount in respect of the above loans.

4. In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the natureof its business for the purchase of stores, raw material including components, plant and machinery, equipment and other assets,and for the sale of goods. Further, on the basis of our examination of the books and records of the company in accordance withthe generally accepted auditing practices, we have neither come across, nor have we been informed the existence of majorweakness in the internal control procedures and systems.

5. (a) As per the audit procedures applied by us, and according to the information and explanations given to us by the management,the transactions which are required to be entered in the register maintained under section 301 of the Act have been soentered.

(b) As per the audit procedures applied by us and as per the information and explanations given to us, with respect to thetransactions as entered in the register maintained under section 301, with any party during the financial year, the pricesat which these have been made are reasonable having regard to the prevailing, market prices at that time.

6. According to the information and explanations given to us, the company has not accepted any deposits during the year fromthe public within the provisions of Section 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposit)Rules 1975 have been complied with.

7. In our opinion the company has an internal audit system commensurate with the nature and size of its business.

44

8. We have broadly reviewed the cost records maintained by the company pursuant to the order made by the Central Governmentfor the maintenance of cost records, u/s 209(1)(d) of the Companies Act, 1956 and are of opinion that prima –facie the prescribedrecords and accounts have been maintained by the company. However, we have not made a detailed examination of theserecords to verify whether they are accurate or complete.

9. (a) The company is generally regular in depositing the undisputed statutory dues including Provident Fund, Investor Educationand Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess andother statutory dues with the appropriate authorities during the year. According to the information and explanations givento us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2008 for a periodof more than six months from the date of becoming payable.

(b) According to the information and explanations given to us, details of dues of Income Tax, Sales Tax, Custom Duty, WealthTax, Excise Duty and Cess which have not been deposited as on 31st March, 2008 on account of any dispute are givenbelow:

Sales Tax Demand for Sales Tax Maharashtra Sales Tax 1992-1993 4.48Authority (Appellate Tribunal)

ACST 2001-2002 15.70

Income Tax Demand for Tax Liability CIT (Appeal), New Delhi 2002-2003 191.16

2003-2004 217.99

2006-2007 4.22

Excise Duty Demand for Excise Duty CESTAT Jan.1998-June 1999 18.70

CESTAT May1998-Feb.1999 6.73

Commissioner Appeal Feb.1999-Mar. 1999 0.84

CESTAT Dec.1999 2.42

CESTAT Apr. 2000-July 2000 5.03

CESTAT May 2000-Aug. 2001 3.74

CESTAT Oct.2002 0.37

CESTAT 2001-2002 3.58

Commissioner Appeal Jan. 2005 - Sep. 2005 1.64

Additional Commissioner 2005 - 2006 3.462006 - 2007 179.12

Commissioner Appeal 2007 - 2008 135.39

Name of Nature of Forum where Period of which the Amountthe Statute Dues dispute is pending amount relates (Rs.in Lacs)

10. There are no accumulated losses as at the end of the year. There are no cash losses during the financial year and the immediatelypreceding financial year.

11. According to the information and explanations given to us and as per the books of accounts examined by us, the company hasnot defaulted in the repayment of dues to the financial institutions / banks.

12. According to the information and explanations given to us, the company has not granted any loans and advances on the basisof security by way of pledge of shares, debentures and other securities.

13. In our opinion, the company is not a Chit Fund/Nidhi/Mutual Fund/ Society. Therefore, clause 4(xiii) of the Companies (Auditor’sReport) Order, 2003 is not applicable to the company.

14. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly,the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantees against loans taken byothers from banks & financial institutions.

45

For KANODIA SANYAL & ASSOCIATESChartered Accountants

R.K. KANODIAPartner

Membership No.16121Place : New DelhiDated : August 28, 2008

16. According to the information and explanations given to us, the Company has not obtained any term loan during the year,accordingly clause (xvi) of paragraph 4 of the Order is not applicable to the Company.

17. According to the information and explanations given to us and as per the books and records examined by us, as on the dateof Balance Sheet, the funds raised by the Company on short term basis have not been applied for long term investments andvice versa.

18. According to the information and explanations given to us, during the year, the Company has made preferential allotment ofshares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956. The priceat which these shares were issued is not prima-facie prejudicial to the Company.

19. The company does not have any debentures outstanding, as on the Balance Sheet Date, hence, the clause 4(xix) of the orderis not applicable.

20. The company has not raised any money through the public issue during the year. Accordingly, clause 4(xx) of the order is notapplicable.

21. According to the information and explanations given to us, and on the basis of our examination of the books and records ofthe company carried out in accordance with the generally accepted auditing practices in India, we have not come across anysuch instance of fraud on or by the company, noticed and reported during the year.

46

BALANCE SHEET AS AT 31ST MARCH, 2008

Schedules As At As At31.03.2008 31.03.2007

(Rs.) (Rs.)I. SOURCES OF FUNDS

1. Shareholders' Funds a) Share Capital 1 352,667,110 349,659,835 b) Reserves and Surplus 2 10,581,366,851 8,891,251,489

10,934,033,961 9,240,911,324 2. Loan Funds

a) Secured Loans 3 158,325,542 98,740,991b) Unsecured Loans 4 863,262,883 983,226,578

1,021,588,425 1,081,967,569 3. Deferred Tax Liabilities 419,797,530 410,931,000

TOTAL 12,375,419,916 10,733,809,893

II. APPLICATION OF FUNDS1. Fixed Assets 5

a) Gross Block 3,742,084,525 3,683,715,075Less : Depreciation 1,057,502,988 883,692,340Net Block 2,684,581,537 2,800,022,735

b) Capital work in progress 689,989,319 57,917,4163,374,570,856 2,857,940,151

c) Silver Coins in hand 24,924 22,2803,374,595,780 2,857,962,431

2. Investments 6 893,783,869 538,220,434

3. Current Assets, Loans & Advances

a) Inventories 7 3,802,740,970 2,512,817,181b) Sundry Debtors 8 2,695,209,514 1,995,767,641c) Cash and Bank Balances 9 2,548,650,046 3,232,158,967d) Loans and Advances 10 984,893,819 452,780,284

10,031,494,349 8,193,524,073Less: Current Liabilities & Provisions 11 1,924,454,082 855,897,045

Net Current Assets 8,107,040,267 7,337,627,028

TOTAL 12,375,419,916 10,733,809,893

Significant Accounting Policies & Notes on Accounts 20As per our report of even date attached

R.K. KanodiaPartnerMembership No.16121

Place : GurgaonDated : 28th August 2008

For KANODIA SANYAL & ASSOCIATESChartered Accountants

For & on Behalf of the Board

P.K. PuhanCompany Secretary

Anil JainCFO

D.P. JindalChairman

Saket JindalManaging Director

U.C. AgarwalD.K. Parikh

H.K. KhannaS.P. Raj

Wholetime Director

48

A. Cash Flow from Operating Activities

Net Profit before tax and extraordinary items 3,018,969,391 3,526,943,358Adjusted for:

Depreciation 173,972,238 162,629,119Dividend Received (52,247,617) (12,947,570)Prior Period Adjustments (120,097) 443,081Interest Received (175,003,843) (176,309,638)Interest Paid 11,267,935 12,066,965Loss on Sale of Fixed Assets 86,479 81,001Profit on Sale of Investments (13,522,261) (9,898,097)Loss on Sale of Investments - 1,180,000

Operating Profit before Working Capital Changes 2,963,402,225 3,504,188,219Adjusted for:

Trade & Other Receivables (1,235,652,930) (759,061,833)Inventories (1,289,923,789) 242,440,594Trade Payables & Others 793,618,094 (342,103,008)

Cash Generated from operations 1,231,443,600 2,645,463,972Direct taxes Paid (1,058,774,493) (1,117,931,203)

Cash Flow before extraordinary items 172,669,107 1,527,532,769Extraordinary item - -

Net Cash From Operating Activities A 172,669,107 1,527,532,769

B. Cash Flow from Investing ActivitiesPurchase of Fixed Assets (690,802,066) (214,820,253)Sale of Fixed Assets 110,000 1,620,754Purchase of Investments (6,311,713,513) (3,464,230,980)Sale of Investments 5,969,672,339 3,139,508,643Interest Received 179,101,365 236,067,459Dividend Received 52,247,617 12,947,570

Net Cash used in Investing Activities B (801,384,258) (288,906,807)

C. Cash Flow from Financing ActivitiesProceeds from Long Term Borrowings (15,120,664) (8,485,349)Proceeds from Short Term Borrowings 110,533,725 (648,969,452)Interest Paid (11,267,935) (12,066,965)Dividend Paid (120,958,164) (461,405,319)Tax paid on dividend (17,980,732) (67,227,118)

Net Cash used in Financing Activities C (54,793,770) (1,198,154,203)

Net increase in Cash & Cash Equivalents (A+B+C) (683,508,921) 40,471,759

Opening Balances of Cash and Cash Equivalents 3,232,158,967 3,191,687,208Closing Balances of Cash and Cash Equivalents 2,548,650,046 3,232,158,967Change in Cash and Cash Equivalents (683,508,921) 40,471,759

CASH FLOW STATEMENT ANNEXED TO THE BALANCE SHEETFOR THE YEAR ENDED 31ST MARCH 2008

Year Ended Year Ended31.03.2008 31.03.2007

(Rs.) (Rs.)

R.K. KanodiaPartnerMembership No.16121

Place : GurgaonDated : 28th August 2008

For KANODIA SANYAL & ASSOCIATESChartered Accountants

For & on Behalf of the Board

P.K. PuhanCompany Secretary

Anil JainCFO

D.P. JindalChairman

Saket JindalManaging Director

U.C. AgarwalD.K. Parikh

H.K. KhannaS.P. Raj

Wholetime Director

49

SCHEDULE : 1

SHARE CAPITAL

Authorised

200,000,000 (Previous Year - 80,000,000 of Rs. 5/- each) Equity Shares of Rs. 2/- each 400,000,000 400,000,000

20,000,000 (Previous Year - 20,000,000) Preference shares of Rs. 10/- each 200,000,000 200,000,000

600,000,000 600,000,000

Issued, Subscribed and Paid up

Equity Capital

70,533,422 (Previous Year - 69,931,967 ) Equity Shares of Rs. 5/- each fully paid up 352,667,110 349,659,835

352,667,110 349,659,835

SCHEDULE : 2

RESERVES & SURPLUS

Capital Redemption Reserve 144,112,800 144,112,800

Securities Premium :As per last Balance Sheet 3,107,765,317 -

Add : Premium on conversion of FCCB Bonds 149,365,756 3,051,315,584(Refer Note No. 5 & 6)

Add : Premium earlier amortized to be written back as all the - 56,449,733Zero Coupon Foreign Currency Convertible Bonds are alloted

3,257,131,073 3,107,765,317

Capital Investment Subsidy 2,500,000 2,500,000

General Reserve :As per last Balance Sheet 5,308,283,200 3,287,299,260

Add : Transferred from Profit & Loss Account 1,500,000,000 2,000,000,000

Add : Employee Benefit adjustments, as per AS - 15 (net of tax) 1,168,197 -

Add : Premium earlier amortized to be written back as all the - 20,983,940Zero Coupon Foreign Currency Convertible Bonds are alloted

6,809,451,397 5,308,283,200

Profit and Loss Account 368,171,581 328,590,172

10,581,366,851 8,891,251,489

SCHEDULES FORMING PART OF THE FINANCIAL STATEMENTS

As At As At31.03.2008 31.03.2007

(Rs.) (Rs.)

50

SCHEDULE : 3

SECURED LOANS

Term Loan

From Banks

- Foreign Currency Loan 40,350,000 87,880,000

Working Capital Borrowings

From Banks 117,975,542 10,860,991

158,325,542 98,740,991

As At As At31.03.2008 31.03.2007

(Rs.) (Rs.)

SCHEDULE : 4

UNSECURED LOANS

Zero Coupon Foreign Currency Convertible Bonds 152,372,500 3,342,558,673

Less : Converted into Shares during the year (Refer Note No. 5) 152,372,500 3,190,186,173

- 152,372,500

Security Deposit 3,850,000 8,421,000

Deferred Sales Tax 859,412,883 822,433,078

863,262,883 983,226,578

1. Term loans from banks are secured by first charge by way of mortgage on the Company’s’ immovable properties and by way ofhypothecation on moveable properties both present and future (save and except book debts & stock).

2. The borrowings for working capital are secured by hypothecation of inventories, book debts & all other current assets other thanthose specifically excluded and second charge on fixed assets ranking pari passu.

3. Term Loans due within one year is Rs. 40,350,000/- (Previous Year Rs. 43,940,000/-).

51

Land 4,346,850 48,379,719 6,003,230 46,723,339 - - - - 46,723,339 4,346,850

Shed & Building 47,689,872 118,885,654 36,257,323 130,318,203 - - - - 130,318,203 47,689,872

Plant & Machinery 1,860,953 435,876,587 - 437,737,540 - - - - 437,737,540 1,860,953

Preoperative Expenses - 3,377,476 - 3,377,476 - - - - 3,377,476 -

Capital Advances 4,019,741 39,722,816 - 43,742,557 - - - - 43,742,557 4,019,741

Others - 28,090,204 - 28,090,204 - - - - 28,090,204 -

Total (B) 57,917,416 674,332,456 42,260,553 689,989,319 - - - - 689,989,319 57,917,416

Previous Year 163,080,934 120,574,889 225,738,407 57,917,416 - - - - 57,917,416 163,080,934

Current Year (A+B) 3,374,570,856 2,857,940,151

Previous Year 2,857,940,151 2,807,453,920

SCHEDULE : 5

FIXED ASSETS

DESCRIPTION AS AT ADDITIONS SALES/ AS AT UPTO FOR THE SALES/ UPTO AS AT AS AT01.04.2007 ADJUST- 31.03.2008 31.03.2007 YEAR ADJUST- 31.03.2008 31.03.2008 31.03.2007

MENT MENT

GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK

CAPITAL WORK IN PROGRESS

(Rs.)

Land - Freehold 29,403,620 6,003,230 - 35,406,850 - - - - 35,406,850 29,403,620

Shed & Building 727,970,691 40,830,593 - 768,801,284 82,713,405 19,710,999 - 102,424,404 666,376,880 645,257,286

Plant & Machinery 2,830,989,191 1,239,344 - 2,832,228,535 778,992,930 146,804,223 - 925,797,153 1,906,431,382 2,051,996,261

Office Equipments 28,863,203 3,560,550 - 32,423,753 4,269,343 1,088,305 - 5,357,648 27,066,105 24,593,860

Computer 11,897,641 2,105,502 - 14,003,143 5,687,187 1,420,151 - 7,107,338 6,895,805 6,210,454

Furniture & Fixtures 23,619,184 2,526,213 - 26,145,397 4,277,529 1,846,331 - 6,123,860 20,021,537 19,341,655

Vehicles 30,971,545 2,486,029 382,011 33,075,563 7,751,946 3,126,171 185,532 10,692,585 22,382,978 23,219,599

Total (A) 3,683,715,075 58,751,461 382,011 3,742,084,525 883,692,340 173,996,180 185,532 1,057,502,988 2,684,581,537 2,800,022,735

Previous Year 3,367,172,712 319,980,623 3,438,260 3,683,715,075 722,799,726 162,629,119 1,736,505 883,692,340 2,800,022,735 2,644,372,986

During the year the depreciation has been capitalised amounting to Rs. 23,942/- & shown under preoperative expenses. Thus there is a difference of Rs. 23,942/- in the depreciationfor the year as appearing in Profit & Loss Account.

52

SCHEDULE : 6INVESTMENTS(Fully paid up unless otherwise specified)I. LONG TERMA. Trade

Un-QuotedEquity Shares Of Joint Venture CompanyRs. 10/- each of Hydril Jindal International Pvt. Ltd. 4,389,095 43,890,950 4,290,000 42,900,000

B. Non-tradeUn-QuotedBonds5.15% Rural Electrification Corp. Ltd. - - 2,520 25,200,0005.50% Rural Electrification Corp. Ltd. 5,150 51,500,000 5,150 51,500,0005.50% National Highway Authority of India 1,400 14,000,000 1,400 14,000,000

II. SHORT TERMNon - TradeQuotedMutual FundsGSSIF - Short Term- Plan B - Growth 1,885,796 20,017,157 - -HSBC Fixed Term Series 28- Inst. Growth 9,000,000 90,000,000 - -ICICI Prudential FMP - Growth - - 5,000,000 50,000,000ICICI Prudential FMP -Series 38 -One Year 4,000,000 40,000,000 - -Plan A- Inst. GrowthICICI Prudential FMP Series 42- Three Month 1,500,000 15,000,000 - -Plan A-Retail GrowthING Short Term Income Fund.- Growth 2,679,016 38,605,249 - -JM Fixed Maturity Fund Series IV - 15 Months 4,000,000 40,000,000 - -Plan 2 Inst. GrowthJM Short Term Fund Inst. Plan - Growth 2,354,780 24,501,547 - -Kotak Bond Short Term Fund -Growth 2,726,932 40,000,000 - -Kotak FMP 15M Series 3 Inst. -Growth 4,000,000 40,000,000 - -Kotak Quarterly Interval Plan Series 3 - Growth 978,426 10,000,000 - -LICMF Liquid Fund - Growth 7,445,376 109,416,495 8,851,840 120,369,974Principal Cash Management Fund - Growth - - 13,206,531 154,250,460Principal Income Fund - Short Term - Institutional 1,683,665 22,500,000 - -Plan GrowthPrincipal PNB FMP - Growth - - 3,000,000 30,000,000Reliance Annual Interval Fund Series I- Inst. Growth 5,400,000 54,000,000 - -Reliance Fixed Horizon Fund- VI- Series 2 -Inst. - Growth 5,500,000 55,000,000 - -Reliance Short Term Fund - Retail Plan - Growth 3,879,290 55,145,748 - -Standard Chartered FMP - Growth - - 5,000,000 50,000,000Tata Fixed. Horizon Fund Series. 17 Scheme D- 2,770,001 27,700,009 - - Inst. Plan GrowthTata Short Term Bond Fund - Growth 4,136,505 60,000,000 - -Templeton India Short Term Income Plan Inst. Growth 25,692 30,005,492 - -Templeton India Short Term Income Plan Retail Plan-Growth 3,430 5,001,222 - -UTI Short Term Income Fund - Growth 567,490 7,500,000 - -

893,783,869 538,220,434Aggregate Value of Quoted Investments 784,392,919 404,620,434Aggregate Value of Unquoted Investments 109,390,950 133,600,000Market Value of Quoted Investments 794,104,612 405,598,107

As At 31.03.2008Number of

Shares / UnitsRs.

As At 31.03.2007Number of

Shares / UnitsRs.

Name of the Investments No. of Units Purchase Sale Value Value (Rs.) (Rs.)

ABN AMRO Flexi Debt Fund - Regular - Growth 9,002,081.331 107,696,400 108,207,718(-) (-) (-)

ABN AMRO Cash Fund - Institutional Growth - - -(3,168,772.730) (35,000,000) (35,362,236)

ABN AMRO FTP Series 7 Qly Plan A - Growth 10,500,000.000 105,000,000 107,696,400(-) (-) (-)

ABN AMRO FTP Series 7 Qly Plan B - Growth 2,750,000.000 27,500,000 28,217,200(-) (-) (-)

AIG India Liquid Fund - Institutional - Growth 21,795.734 22,500,000 22,528,777(-) (-) (-)

AIG India Treasury Plus Fund - Institutional - Growth 10,763,877.157 110,000,000 110,437,264(-) (-) (-)

AIG India Treasury Plus Fund - Super Institutional - Growth 14,555,899.506 150,000,000 150,632,016(-) (-) (-)

Birla FTP - Quarterly - Series 14 - Growth 5,000,000.000 50,000,000 51,290,000(-) (-) (-)

Birla Index Fund - Dividend - - -(464,156.545) (10,100,000) (6,998,094)

Birla Sun Life Cash Manager - Institutional Plan - Growth 4,842,948.717 62,500,000 62,574,395(1,213,327.186) (15,000,000) (15,133,223)

Birla Sun Life Liquid Plus - Institutional -Growth 2,074,502.681 30,972,947 31,076,673(-) (-) (-)

Birla Sun Life Short Term Fund - Growth 10,951,699.842 151,290,000 156,356,581(1,513,477.517) (20,000,000) (20,221,876)

DSPML Short Term Fund - Growth 4,400,406.658 58,000,000 59,781,285(-) (-) (-)

DSPML Liquid Plus-Institutional - Growth - - -(86,187.816) (90,010,546) (90,270,628)

DSPML Liquidity Fund - Institutional - Growth - - -(131,360.847) (140,000,000) (140,060,356)

DSPML Strategic Bond Fund - Regular - Growth 13,665.216 14,000,000 14,206,173(-) (-) (-)

DWS Fixed Term Fund Series 31 - Growth 10,250,000.000 102,500,000 105,103,500(-) (-) (-)

DWS Insta Cash Plus Fund - Growth 7,656,900.512 99,000,000 99,089,122(2,899,559.267) (35,000,000) (35,082,348)

DWS Money Plus Fund - Growth 3,685,659.918 40,015,210 40,644,352(-) (-) (-)

DWS Short Maturity Fund - Growth 15,681,531.952 204,177,413 209,509,774(7,400,451.761) (90,000,000) (90,693,073)

Grindlays Cash Fund- Institutional Plan B - Growth - - -(15,259,453.411) (200,000,000) (200,201,860)

GSSIF - ST - Plan B - Growth 4,489,817.294 45,007,724 46,828,604(-) (-) (-)

GSSIF - ST - Plan C - Growth 8,523,448.972 96,265,000 99,380,264(-) (-) (-)

53

DETAILS OF INVESTMENTS PURCHASED & SOLD DURING THE YEAR:

54

Name of the Investments No. of Units Purchase Sale Value Value (Rs.) (Rs.)

HDFC Liquid Fund - Premium Plan - Growth - - -(5,749,338.827) (85,500,000) (85,770,682)

HDFC Cash Management Fund - Savings Plan - Growth - - -(14,027,982.365) (207,500,000) (208,573,318)

HDFC High Interest Fund - Short Term Plan - Growth 3,638,264.654 51,500,000 53,262,739(-) (-) (-)

HDFC Short Term Plan - Growth 4,318,793.418 60,000,000 61,730,242(-) (-) (-)

HSBC Income Fund - Short Term - Institutional - Growth - - -(6,885,373.121) (85,000,000) (86,484,496)

ICICI Prudential Institutional Liquid Plan - Super 6,377,323.486 71,500,000 71,519,770Institutional - Growth (-) (-) (-)

ICICI Prudential Institutional Short Term Plan - 7,626,603.274 111,769,873 114,634,886Cumulative Option (-) (-) (-)

ICICI Prudential Liquid Plan Institutional Plus - Growth 2,140,348.162 40,000,000 40,250,103(-) (-) (-)

ING Income Fund - Short Term Plan - Growth 8,094,826.027 111,507,819 115,144,903(-) (-) (-)

ING Liquid Fund - Institutional - Growth 23,769,932.232 287,105,530 287,569,283(-) (-) (-)

ING Liquid Plus Fund - Institutional - Growth 5,919,637.044 61,008,118 61,411,499(-) (-) (-)

JM Fixed Maturity Fund - Series V - Quarterly Plan 2 - 5,000,580.983 50,005,810 51,302,460Institutional - Growth (-) (-) (-)

JM High Liquidity Fund - Institutional Plan - Growth 3,565,164.045 45,500,000 45,577,944(-) (-) (-)

JM Short Term Fund - Institutional Plan - Growth 677,040.530 7,000,000 7,001,547(11,494,338.091) (140,000,000) (142,463,667)

Kotak Bond Short Term - Growth 2,937,884.143 41,520,529 42,670,123(11,680,098.989) (152,500,000) (156,525,745)

Kotak Flexi Debt Scheme - Growth 10,695,571.545 125,000,000 125,714,368(4,515,488.124) (50,000,000) (50,476,384)

Kotak Floater Short Term - Growth - - -(1,227,184.593) (15,000,000) (15,053,873)

Kotak FMP 3M Series 16 - Growth 1,700,404.864 17,004,049 17,440,739(-) (-) (-)

Kotak Liquid (Institutional) - Growth 6,338,328.040 98,500,000 98,566,206(-) (-) (-)

LICMF FMP Series 23 - 3 Months - Growth 8,049,888.589 80,498,886 82,591,857(-) (-) (-)

LICMF Index Fund - Nifty - Dividend - - -(1,986,110.467) (30,000,000) (20,523,476)

LICMF Liquid Fund - Growth - - -(22,095,282.271) (292,000,000) (292,800,988)

LICMF Index Fund - Sensex - Dividend Plan 10,374,116.579 160,000,000 109,416,495(-) (-) (-)

55

Name of the Investments No. of Units Purchase Sale Value Value (Rs.) (Rs.)

LICMF Floating Rate Fund - Short Term Plan - Growth 617,695.748 7,500,000 7,539,903(3,372,595.971) (40,000,000) (40,369,974)

Lotus India FMP - 3 Months - Series VI - Institutional - Growth 10,207,593.101 102,075,931 104,711,532(-) (-) (-)

Lotus India Liquid Fund - Institutional - Growth 924,188.793 10,000,000 10,008,780(9,526,458.172) (97,500,000) (97,569,985)

Lotus India Liquid Fund - Institutional Plus - Growth 9,861,170.192 102,000,000 102,075,931(-) (-) (-)

Lotus India Liquid Plus Fund - Institutional - Growth 1,236,258.511 13,000,000 13,073,310(-) (-) (-)

Lotus India Short Term Plan - Institutional - Growth 14,576,834.460 152,211,532 155,239,494(-) (-) (-)

Principal Cash Management Fund Liquid Option - - - -Institutional Plan - Growth (14,357,330.265) (172,500,000) (173,105,671)

Principal Cash Management Fund Liquid Option 1,869,082.064 22,000,000 22,084,139Institutional Premium Plan - Growth (20,852,207.814) (239,500,000) (239,614,375)

Principal Floating Rate Fund FMP - Institutional Plan - Growth 2,586,247.732 30,792,900 31,543,688(7,138,523.040) (80,000,000) (80,280,544)

Principal Income Fund Short Term - Institutional Plan - Growth 11,302,596.174 145,000,000 149,858,782(8,668,074.981) (105,000,000) (107,701,453)

Prudential ICICI Institutional Liquid Plan - Growth - - -(563,110.623) (10,000,000) (10,041,389)

Prudential ICICI Institutional Liquid Plan - Super - - -Institutional - Growth (4,760,499.281) (50,000,000) (50,308,956)

Reliance Floating Rate Fund - Growth - - -(864,423.775) (10,000,000) (10,051,001)

Reliance Liquid Fund - Cash Plan - Growth 5,095,951.542 67,000,000 67,207,200(-) (-) (-)

Reliance Liquid Fund - Treasury Plan - Institutional 8,423,131.177 160,000,000 160,133,856Option - Growth (-) (-) (-)

Reliance Liquidity Fund - Growth 7,432,707.465 84,500,000 85,484,353(-) (-) (-)

Reliance Short Term Fund - Growth - - -(2,377,066.067) (30,000,000) (30,745,686)

Reliance Short Term Fund - Retail Plan - Growth 4,290,433.757 60,003,423 60,782,839(-) (-) (-)

Standard Chartered Fixed Maturity Plan - Quarterly 8,500,000.000 85,000,000 87,225,300Series 11 - Growth (-) (-) (-)

Standard Chartered Fixed Maturity Plan - Quarterly 2,700,651.570 27,006,516 27,704,634Series 9 - Growth (-) (-) (-)

Standard Chartered Liquidity Manager Plus - Growth 363,318.899 400,725,300 401,376,839(395,719.940) (410,000,000) (411,853,789)

Sundaram BNP Paribas Liquid Plus - Super Institutional - Growth 4,884,625.154 50,000,000 50,055,685(-) (-) (-)

TATA Fixed Horizon Fund Series 10 Scheme E - IG - Growth 4,400,000.000 44,000,000 45,147,960(-) (-) (-)

56

Name of the Investments No. of Units Purchase Sale Value Value (Rs.) (Rs.)

Tata Floater Fund - Growth 13,972,808.769 162,500,000 162,812,678(-) (-) (-)

Tata Floating Rate Short Term Institutional Plan - Growth 1,771,822.953 21,000,000 21,010,454(4,528,251.711) (52,500,000) (52,783,566)

Tata Short Term Bond Fund - Growth 8,793,609.561 121,209,553 125,337,807(-) (-) (-)

Templeton Floating Rate Income Fund Short Term Plan - Growth 1,282,427.085 53,500,000 53,525,376(-) (-) (-)

Templeton Floating Rate Income Fund Long Term Plan - Growth - - -(3,080,501.198) (40,000,000) (41,053,223)

Templeton India Short Term Income Plan - Institutional - Growth 190,542.485 214,626,809 223,515,451(47,165.673) (50,000,000) (51,332,708)

Templeton India Treasury Management Account Institutional 74,896.437 90,000,000 90,037,151Plan - Growth (-) (-) (-)

Templeton India Treasury Management Account Regular 47,870.974 90,000,000 90,053,996Plan - Growth (-) (-) (-)

Templeton Quarterly Interval Plan - Plan A - Institutional - Growth 4,000,987.730 40,009,877 41,058,536(-) (-) (-)

UTI FMP Quarterly Series QFMP/0407/II - Institutional 10,002,249.539 100,022,495 102,544,063Plan - Growth (-) (-) (-)

UTI -Index Select Fund - Dividend Plan - Payout 1,978,239.367 60,000,000 38,498,961(-) (-) (-)

UTI Liquid Cash Plan - Institutional - Growth 99,854.839 125,000,000 125,054,938(-) (-) (-)

UTI Liquid Cash Plan Regular- Growth 11,500.683 15,000,000 15,029,619(-) (-) (-)

57

SCHEDULE : 7

INVENTORIES(As Verified, Valued and Certified by the Management)Raw Materials 1,987,858,905 1,398,016,361Finished Goods 1,114,539,733 546,051,897Work in Process 394,824,653 339,245,655Scrap 14,476,933 23,695,929Stores & Spares 291,040,746 205,807,339

3,802,740,970 2,512,817,181

SCHEDULE : 8

SUNDRY DEBTORS(Unsecured, Considered Good)Debts outstanding for a period exceeding six months 348,338,932 205,991,432Other debts (Includes amount receivable from 2,346,870,582 1,789,776,209Joint Venture Company Rs.131,574,786/-, Previous Year Rs. 8,656,128/-)

2,695,209,514 1,995,767,641

SCHEDULE : 9

CASH AND BANK BALANCESCash in hand 779,527 577,187Balances with Scheduled Banks :

- In Fixed Deposit Accounts (Refer Note No. 7) 2,521,996,857 3,185,518,450- In Current Accounts 9,943,282 14,823,551- In Unclaimed Dividend Accounts 13,222,512 28,380,544- In Unclaimed Preference Share Redemption Account 2,511,310 2,562,810- In Unclaimed NCD Redemption Accounts 133,729 213,649- In Unclaimed Debenture Interest Accounts 62,829 82,776

2,548,650,046 3,232,158,967

SCHEDULE : 10LOANS AND ADVANCES(Unsecured, Considered Good)Loans (Includes amount receivable from 351,168,422 77,526,072Joint Venture Company Rs. 92,162,867/-, Previous Year Rs. 13,409,766/-)Advances Recoverable in Cash or in kind or for value to be received 603,661,551 342,186,507Interest Accrued on fixed deposits but not due 8,176,372 12,273,894Security Deposits 21,886,427 20,792,764Balances with Government Authorities 1,047 1,047

984,893,819 452,780,284

As At As At31.03.2008 31.03.2007

(Rs.) (Rs.)

58

As At As At31.03.2008 31.03.2007

(Rs.) (Rs.)

SCHEDULE : 12

SALES & INCOME FROM OPERATIONSManufacturing 15,885,875,604 14,840,912,826Scrap 495,096,406 354,334,995Job Work Services 22,694,358 900,579

16,403,666,368 15,196,148,400

SCHEDULE : 13

OTHER INCOMEInterest received (TDS Rs. 6,355,664/-, Previous Year Rs. 662,091/-) 175,003,843 176,309,638Dividend Received - Non Trade 39,300,047 12,947,570Profit on Sale of Current (Non Trade) Investments (Net) 13,522,261 9,898,097Income From DEPB Licence 145,261,750 -Rent Received (TDS Rs. 2,048,343/-, Previous Year Rs. 2,840,904/-) 16,877,422 12,792,696Miscellaneous Income 47,109,943 102,543,694

437,075,266 314,491,695

SCHEDULE : 11

CURRENT LIABILITIES & PROVISIONSCurrent LiabilitiesAcceptances* 500,734,507 -Sundry Creditors 584,367,770 361,559,965Other Liabilities 154,021,667 146,565,620Bank Overdraft 3,419,174 -Advance From customers 163,359,181 103,784,131Investor Education and Protection Fund :(Appropriate amount shall be transferred to Fund as & when due)

- Unclaimed Dividend 13,222,512 28,380,544- Unclaimed Preference Share Redemption Account 2,511,310 2,562,810- Unclaimed NCD Redemption Accounts 133,729 213,649- Unclaimed Debenture Interest Accounts 62,829 82,776

Interest accrued but not due on loans 2,047,637 621,3121,423,880,316 643,770,807

* In Foreign CurrencyProvisionsTaxation (Net of Advance Tax & TDS) 87,970,881 88,345,374Proposed Dividend on Equity Shares 352,667,110 105,800,132Proposed Dividend Distribution Tax 59,935,775 17,980,732

500,573,766 212,126,2381,924,454,082 855,897,045

Year Ended Year Ended31.03.2008 31.03.2007

(Rs.) (Rs.)

59

Year Ended Year Ended31.03.2008 31.03.2007

(Rs.) (Rs.)

SCHEDULE : 14

INCREASE/(DECREASE) IN STOCKClosing StockFinished Goods 1,114,539,733 546,051,897Work in Process 394,824,653 339,245,655Scrap 14,476,933 23,695,929

1,523,841,319 908,993,481Opening StockFinished Goods 546,051,897 616,668,208Stock in Transit (Last Year) - 3,088,188Work in Process 339,245,655 396,216,671Scrap 23,695,929 26,583,323

908,993,481 1,042,556,390614,847,838 (133,562,909)

Excise Duty on differential stock of Finished Goods 64,873,996 (10,010,697)Increase / (Decrease) in Stock 549,973,842 (123,552,212)

SCHEDULE : 15

MATERIALS, MANUFACTURING & OPERATING EXPENSESRaw Materials ConsumedOpening Stock 1,398,016,361 1,566,660,426Add : Purchases 10,689,272,954 7,976,311,048

12,087,289,315 9,542,971,474Less : Closing Stock 1,987,858,905 1,398,016,361

10,099,430,410 8,144,955,113Manufacturing ExpensesStores & Spares Consumed 614,953,011 623,112,693Power & Fuel 1,082,752,317 921,915,803Water Charges 8,378,646 6,877,310Repairs to Machinery 22,863,093 36,912,530Repairs to Building 1,120,628 5,692,856Job Work Charges 66,883,775 89,798,254

11,896,381,880 9,829,264,559

SCHEDULE : 16

EMPLOYEES' REMUNERATION & BENEFITSSalaries, Wages & Other Allowances 210,335,013 153,843,671Contribution to Provident & Other Funds 18,636,901 14,860,124Staff Welfare Expenses 993,713 1,087,788

229,965,627 169,791,583

60

Year Ended Year Ended31.03.2008 31.03.2007

(Rs.) (Rs.)

SCHEDULE : 17

ADMINISTRATIVE EXPENSESRent 6,094,250 5,456,500Rates & Taxes 6,942,645 3,109,709Telephone & Communication Expenses 4,814,913 4,541,091Printing & Stationery 3,519,928 2,941,678Travelling & Conveyance:

- Directors 3,297,374 1,722,278- Others 16,241,635 12,487,887

Vehicle Upkeep & Maintenance 4,947,329 5,328,831Directors' Fee 295,000 285,000Insurance 5,651,045 5,665,005Staff Recruitment & Training Expenses 1,469,600 616,367Repair & Maintenance (Others) 4,528,571 7,449,145Legal & Professional Charges 3,177,854 3,467,009Filing Fees 14,423 25,534Fees & Subscription 4,359,046 3,477,201Electricity Charges 3,009,683 1,431,376Auditors' Remuneration :

- Audit Fee 400,000 300,000- Tax Audit Fee 50,000 50,000- Company Law Matters 222,571 95,000- Other Expenses 14,408 71,854

Foreign Exchange Fluctuation (Net) 18,436,591 4,130,044Internal Auditors' Remuneration 203,481 174,089General Expenses 4,919,145 4,567,811Loss on Sale of Long Term (Non Trade)Investments - 1,180,000Loss on sale of Fixed Assets (Net) 86,479 81,001

92,695,971 68,654,410

SCHEDULE : 18

SELLING & DISTRIBUTION EXPENSESCommission & Discount 70,187,934 109,274,738Freight Outward & Claims 239,963,394 162,537,799Testing & Inspection Fees 13,506,375 9,847,122Advertisement & Business Promotion 6,999,412 6,225,483Tender Fees 555,456 463,976

331,212,571 288,349,118

SCHEDULE : 19

INTEREST & FINANCIAL CHARGESInterest

- Term Loan 5,940,329 11,004,938- Others 342,843 7,276,418- Working Capital Loan 10,925,092 4,790,547

Bank Charges 20,312,852 11,973,80037,521,116 35,045,703

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SCHEDULE: 20

SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS

SIGNIFICANT ACCOUNTING POLICIES

a. Accounting Conventions

The financial statements are prepared under the historical cost convention on accrual basis and in accordance with the requirementsof the Companies Act, 1956 and in compliance with the applicable accounting standards referred to in sub-section (3C) of thesection 211 of the said Act. The accounting policies, except otherwise stated, have been consistently applied by the Company.

b. Use of Estimates

The presentations of financial statements is in conformity with the generally accepted accounting principles which requiresestimates and assumptions to be made that affect the reportable amount of assets and liabilities on the date of financialstatements and the reportable amount of revenue and expenses during the reporting period. Differences between the actualresults and estimates are recognised in the year in which the results are known / materialized.

c. Revenue Recognition

Sale of goods is recognized at the point of despatch to customers and is stated net of Sales Return & Sales Tax and inclusiveof excise duty. Inter divisional transfer of goods for captive consumption/ internal uses are at market value. Dividend income isaccounted when right to receive the same is established. All other income are accounted on accrual basis.

d. Fixed Assets & Depreciation

i) Fixed Assets

Fixed Assets are stated at cost of acquisition, construction less accumulated depreciation. The cost comprises of purchaseprice and any other directly attributable cost of bringing the assets to working condition for its intended use. Depreciationon assets have been provided on pro-rata basis, for the period of use, on straight line method at the rates prescribed underSchedule XIV to the Companies Act, 1956, as amended till date.

ii) Expenditure during construction period

Expenditure incurred during implementation of new / expansion project is included under Capital Work in Progress andthe same is allocated to the respective Fixed Assets on the completion / erection.

iii) Intangible Assets

Intangible assets are stated at cost of acquisition less accumulated amortization. Amortization on intangible assets isprovided on pro- rata basis on the straight line method based on Managements’ estimates.

e. Investments

Investments are classified as long term or current based on the Management intention at the time of purchase. Long terminvestments are valued at their acquisition cost. Current investments are stated at lower of cost or fair market value. The provisionfor diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion ofthe Management.

f. Inventories

Raw Materials are valued at lower of cost (FIFO basis) or net realisable value.

Work-in-process is valued at direct material cost plus conversion cost depending upon the stage of completion or estimatednet realisable value whichever is lower.

Finished goods are valued at lower of cost or net realisable value. Cost for this purpose includes direct material cost plusconversion cost and other direct overheads incurred to bring the goods to their present location & conditions. Excise Duty ongoods manufactured by the Company and remaining in inventory is included as a part of valuation of finished goods.

Stores & Spare parts are valued at lower of cost or net realisable value.

Scrap is valued at net realisable value.

g. Employee Benefits

(a) Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account ofthe year in which the related service is rendered.

(b) Post employment and other long term benefits are recognised as an expense in the Profit and Loss Account for the yearin which the employee has rendered services. The expense is recognised at the present value of the amounts payabledetermined using actuarial valuation techniques at the end of Financial Year. Actuarial gains and losses in respect of postemployment and other long term benefits are charged to the Profit and Loss Account.

(c) Payment to defined contribution retirement benefit scheme, if any, are charged as expenses as they fall due.

62

h. Research & Development Expenses

Research & Development Expenses of revenue nature, if any are charged to Profit and Loss Account in the year in which it isincurred. Expenditure of capital nature, if any is being capitalised.

i. Foreign Currency Transactions

(i) Initial Recognition

Foreign currency transactions during the year are accounted for in the reporting currency at the exchange rates prevailingon the date of the respective transaction in accordance with the Revised Accounting Standard 11 for “The Effects of Changesin Foreign Exchange Rates”:

(ii) Conversion

All monetary assets and liabilities remaining unsettled at the year-end are reported using the closing exchange rate. Anyincome or expenses on account of exchange difference either on settlement or on translation is recognised and is reflectedseparately in the Profit & Loss Account.

(iii) Non-monetary items are carried at cost.

(iv) Forward Exchange Contracts

In case of forward contracts, the exchange differences are dealt - with in the Profit & Loss Account over the period of thecontracts. Any profit or loss arising on cancellation or renewal of forward exchange contracts are recognised as incomeor as expenses for the year.

j. Borrowing Cost

Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the costof asset upto the date when such asset is ready for its intended use. Other borrowing costs are recognised as an expense in theperiod in which they are incurred.

k. Income-Tax

a) The company, in accordance with relevant tax provision and tax advices wherever considered necessary, calculates thecurrent Income Tax liability.

b) Deferred tax assets and liabilities are recognised for future tax consequences attributable to the timing differences thatresults between the profits offered for income tax and profit as per the financial statements. Deferred tax assets andliabilities are measured as per the tax rates/laws that have been enacted or substantively enacted at the Balance SheetDate.

c) Fringe Benefit Tax is provided on the aggregate amount of fringe benefits determined in accordance with the provisionsof the relevant enactments at the specified rate of tax.

l. Impairment of Assets

At each Balance Sheet Date, the Company assesses whether there is any indication that an asset is impaired. If any such indicationexists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, animpairment loss is recognized in the Profit and Loss Account to the extent the carrying amount exceeds recoverable amount.

m. Accounting for Interest in Joint Venture

Accounting for Interest in Joint Venture is accounted for in accordance with AS –27 issued by The Institute of CharteredAccountants of India.

n. Events occurring after the Balance Sheet Date

Events occurring after the Balance Sheet Date and till the date on which the Financial Statement are approved, which arematerial in the nature and indicate the need for adjustments in the Financial Statements have been considered.

o. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as aresult of past events and it is probable that there will be an outflow of resources.

Liabilities which are material, and whose future outcome cannot be ascertained with reasonable certainty, are treated ascontingent, and disclosed by way of notes to the accounts.

Contingent Assets are neither recognized nor disclosed in the financial statement. Provisions, Contingent Liabilities and ContingentAssets are reviewed at each Balance Sheet Date.

NOTES ON ACCOUNTS

1. CONTINGENT LIABILITIES

a) Letter of Credit - Rs. 493,918,906/- (Previous Year Rs. 247,833,809/-)

b) Bank Guarantee & Others - Rs. 228,303,163/- (Previous Year Rs. 208,571,912/-)

c) Sales Tax Demand under appeal - Rs. 2,017,803/- (Previous year Rs. 19,770,868/-)

d) Income Tax Demand under appeal - Rs. 41,337,332/- (Previous Year Rs. 77,741,933/-)

e) Excise Duty Demand under Appeal - Rs. 36,102,472/- (Previous Year Rs. 29,269,942/-)

2. The company has imported Capital Goods under the Export Promotion Capital Goods (EPCG) scheme of the Government of India,at concessional rate of duty against the Legal Undertaking (LUT) to fulfil Exports obligations. The duty saved on such importof capital goods during the year amounts to Rs. 22,058,456/- (Previous Year Rs. 35,066,434/-) and for this the company isunder an obligation to export goods amounting to Rs. 176,467,648/- (Previous Year Rs. 280,531,472/-), within a period ofeight years, commencing from the date of issue of licences. The company has, however, fulfilled, the export obligation till dateto the extent of Rs. 163,199,608/- (Previous Year Rs. 153,522,840/-), for which the LUTs are to be discharged.

Pending fulfilment of such future export obligations, entails Custom Department a right to enforce the LUT executed by us tothe extent of Rs. 13,268,040/- (Previous Year Rs. 67,827,334/-).

3. Estimated amount of contracts remaining to be executed on Capital Account, net of advances, and not provided for isRs. 67,602,072/- (Previous Year Rs. 9,952,825/-).

4. Excise duty in respect of finished goods lying in factory premises and custom duty on goods lying in custom bonded warehouseare provided and included in the valuation of inventory. This accounting treatment has no impact on the profit for the year.Credit of taxes and duties availed is accounted for by reducing the purchase cost of the materials and fixed assets.

5. The Company had issued Five Year USD Denominated Zero Coupon Foreign Currency Convertible Bonds (FCCB) aggregating toUSD 75 Million comprising 75000 Number of Bonds of USD 1000 each to finance capital expenditure plans & acquisitions. Thebond – holders had an option to convert these bonds into Equity Shares of Rs. 5/- each at a premium of Rs. 248.34 per share(reset price) at any time on and after 28th August 2005 upto 30th June 2010. The bonds were redeemable on 30th July 2010at 135.70 percent of their principal amount, unless previously converted, redeemed or purchased and cancelled.

During the year the balance bondholders worth USD 3.50 million have exercised their conversion option for conversion of theirBonds into Equity Shares. The company had allotted 601,454 numbers of shares pursuant to this request. Consequently sharecapital and share premium account have gone up by Rs. 3,007,270/- and Rs. 149,365,086/- respectively.

6. a) The members of the Company had passed necessary resolutions in the 19th Annual General Meeting held on 28th September2007 to sub-divide the equity shares of Rs.5/- each into Equity Shares of Rs.2/- each and amended the capital clause ofthe Memorandum & Articles of Association accordingly. In view of the current turmoil and prevailing volatile capital marketconditions, the implementation of the said proposal was deferred by the Board of Directors of the Company.

b) The Board of Directors has issued and allotted of 1 (One) equity share of Rs.5/- to Mr. Raghav Jindal at a premium ofRs.670/- on preferential basis at its meeting held on 28th September 2007 to mitigate the problem arising out of theproposed sub-division of Equity Shares from Rs 5/- each to Rs 2/-each.

7. Fixed deposits appearing under Cash & Bank Balances include an amount of Rs.2,504,184,438/- (Previous Year Rs.3,175,976,728/-), with Indian Banks & its Overseas Branches and reputed International Bank, being unutilised balance out of FCCB issue proceeds.

8. In accordance with the AS - 28 on Impairment of Assets, the Company has assessed as on the Balance Sheet Date, whetherthere are any indications (listed in paragraphs 8 to 10 of the Standard) with regard to the impairment of any of the assets.Based on such assessment, it has been ascertained that no potential loss is present and therefore, formal estimate of recoverableamount has not been made. Accordingly, no impairment loss has been provided in the books of account.

9. The company had planned to get its assets revalued and accordingly made declaration at the time of publishing its Quarterlyresults for the quarter ended 31st March 2008. However, the exercise is still under process and the impact of the revaluationwould be incorporated in the books of accounts of subsequent period as and when the revaluation report is finalised and adoptedby the Board.

10. Pursuant to AS – 11 “The effect of Change in Foreign Exchange Rates” there is a diminution in the value of Rs. 182,867,127/-as of Balance Sheet Date on its overseas US Dollar deposits (out of FCCB proceeds meant for capex purpose) on account ofadverse exchange rate fluctuation which has been accounted for in the Profit & Loss Account based on the expert opinionreceived.

63

64

Further, the company has taken some forward contracts after the Balance Sheet Date & computed its position after factoringthe prevailing exchange rate on the date of adoption of Balance Sheet i.e. as on 27th August 2008. This has resulted intounrealised foreign exchange gains to the extent of Rs. 207,761,421/-. Thus, there has been an unrealised gain on net basis tothe extent of Rs. 24,894,294/- , which has not been considered in the Profit & Loss Account.

11. a) Total amount due to Small Scale Industrial undertaking is Rs. 4,642,553/- (Previous year Rs. 3,536,809/-). The name ofthe Small Scale Industrial Undertakings to whom the company owes a sum of more than Rupees One Lac, which is outstandingfor more than 30 days are:

The above information regarding Small Scale Industrial undertaking has been determined to the extent such parties havebeen identified on the basis of information available with the company. The Auditors have relied upon the same.

b) The Company has not received any intimation from suppliers regarding their status under the Micro, Small and MediumEnterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end togetherwith interest paid / payable as required under the said Act have not been given.

12. Stock includes material in transit.

13. In the opinion of the company, the value on realisation of current assets, loans & advances in the ordinary course of the businessshall not be less than the amount at which they are stated in the Balance Sheet.

14. The company had entered into a Joint Venture arrangement with Hydril LP, USA on 50:50 basis in the name and style of HydrilJindal International Pvt. Ltd. at Village Sukeli, Distt. Raigad in the State of Maharashtra (India). The main object of the JointVenture Company (JVC) is to manufacture premium thread connections. The company had contributed till 31st March 2008Rs. 43,890,950/-(Previous Year Rs. 42,900,000/-) towards equity contribution. The amount outstanding as on 31st March 2008is Rs. 92,162,867/-(Previous Year Rs. 13,409,766/-) towards loan given to JV.

a) Financial Interest in Joint Venture Company

As At 31.03.2008 Year Ended 31.03.2008 Assets Liabilities Income Expenditure

208,334,026 164,343,076 111,936,886 119,483,911(160,858,928) (114,161,793) (196,959,479) (190,860,738)

(Rs.)

Name of the Party Amount (Rs.)PCP Chemicals Pvt Ltd 1,733,656Tashkent Oil Co. Pvt Ltd 2,771,406

b) Share in Contingent Liability of Joint Venture as on March 31,2008 is Rs. 19,488,883/- (Previous Year Rs. 1,835,000/-).

c) Share in estimated amount of contracts remaining to be executed on capital account and not provided for Rs. Nil (PreviousYear Rs. Nil)

15. Pre-operative expenses forming part of capital work in progress consists as follows:

Particulars As At 31.03.2008 As At 31.03.2007Amount Brought Forward From Last Year - 8,938,326Addition During The Year 3,377,476 -Amount Capitalised/ Adjusted During The Year - (8,938,326)Closing Balance 3,377,476 -Represented By:Salaries, Wages & Other Allowances 1,104,708 -Travelling & Conveyance 1,037,859 -Printing & Stationery 12,854 -Legal & Professional 429,660 -Interest & Financial Charges 1,400 -Loading & Unloading Charges 115,022Miscellaneous Expenses 675,973 -Total 3,377,476 -

(Rs.)

Particulars Gratuity (Funded)Fair value of plan assets at beginning of the year 12,229,722Expected return on plan assets 1,131,249Actuarial gain / (loss) 341,474Employer contribution* 4,385,173Benefit paid 722,991Fair value of plan assets at year end 17,364,627Actual return on plan assets 1,472,723

Particulars Gratuity (Funded) Leave Encashment(Unfunded)

Current Service cost 2,241,853 818,749Interest Cost 1,301,368 271,985Expected return on plan assets (1,131,249) -Actuarial (gain)/loss recognised in the period (113,940) (376,379)Net Cost 2,298,032 714,355

65

16. (a) In accordance with the transitional provisions of Accounting Standard (AS) 15 (revised 2005) on “Employee Benefits”, anamount of Rs. 1,168,197/- (net of tax of Rs. 601,530/-) has been added to the opening balance of General Reserve.

(b) The Accounting Standard 15 (Revised 2005) having been made applicable from this year, the requisite information anddisclosure have been given separately for this year only adopting the new Accounting Policy as per requirement of theAccounting Standard..

(c) The employees’ gratuity fund scheme managed by LIC of India is a defined benefit plan. The present value of obligation isdetermined based on actuarial valuation using the projected unit credit method, which recognises each period of serviceas giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the finalobligation. The obligation for leave encashment is recognised in the same manner as gratuity.

Disclosure as per Accounting Standard (AS) 15 :(i) Expenses recognised during the year (Under the head “Personnel Cost”)

(ii) Net Asset/Liability recognised in the Balance Sheet as at March 31, 2008

(Rs.)

Particulars Gratuity (Funded) Leave Encashment(Unfunded)

Fair value of plan assets as at March 31, 2008 17,364,627 -Present value of obligation as at March 31, 2008 19,270,410 3,826,425Amount recognised in Balance Sheet - Liability 1,905,783 3,826,425

(Rs.)

(iii) Reconciliation of opening and closing balances of Defined Benefit obligation.

Particulars Gratuity (Funded) Leave Encashment(Unfunded)

Defined benefit obligation as at April 1, 2007 16,222,646 3,390,528Current service cost 2,241,853 818,749Interest cost 1,301,368 271,985Actuarial (gain)/loss on obligation 227,534 (376,379)Benefit paid (722,991) (278,458)Defined Benefit obligation as at March 31, 2008 19,270,410 3,826,425

(Rs.)

(iv) Reconciliation of opening and closing balance of fair value of plan assets(Rs.)

* Already paid during the financial year 2006-07, hence added in fair value of plan assets as on 01.04.2007 to computethe transitional provisions.

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(v) Investment details

Particulars Gratuity (Funded)Insurer Managed Funds 17,364,627

(Rs.)

Particulars Gratuity (Funded) Leave Encashment(Unfunded)

Mortality Table (LIC) 1994-96(Ultimate) NADiscount rate (per annum) 8% 8%Expected rate of return on plan assets (per annum) 9.25% NARate of escalation in salary (per annum) 5.5% 5.5%

(Rs.)(vi) Actuarial assumptions

d) The disclosures required under Accounting Standard 15 “Employee Benefits” notified in the Companies (Accounting Standards)Rules 2006, are given below:Defined Contribution PlanContribution to Defined Contribution Plan recognised and charged in the Profit & Loss Account for the year are as under:

The company has applied for exemption of its Provident Fund under Section 17 of Employee’s Provident Fund and MiscellaneousProvisions Act, 1952. A condition for grant of exemptions stipulates that employer shall make good deficiency, if any, inthe interest rate declared by trust vis-à-vis statutory rate.

17. Segment Reporting PoliciesIdentification of SegmentsPrimary SegmentBusiness segment: The Company’s operating businesses are organised and managed separately according to the nature ofproducts, with each segment representing a strategic business unit that offers different products. The three identified segmentsare Seamless Pipes, ERW Pipes and Wind Power.Inter Divisional transfers of goods, as marketable products produced by separate divisions of the company for captive consumptionare made as if sales were to third parties at current market prices and are included in turnover.Segment InformationSegment Revenues, Results and Other Information:

Particulars 2007-2008 2006-2007Employer’s Contribution to Provident Fund 5,255,103 4,060,614Employer’s Contribution to Superannuation Fund 8,600,000 6,647,400Employer’s Contribution to Pension Scheme 4,781,798 4,152,110

(Rs.)

Particulars Seamless Pipe ERW Pipe Wind Power Others TotalNet External Sales/Income 113,472 35,845 449 4,371 154,137from operations (109,307) (29,097) (494) (3,132) (142,030)Inter-Segment Sales - - 449 - 449

(11) (15) (494) (-) (520)Segment Results 31,532 2,805 224 4,371 38,932

(33,778) (3,694) (270) (3,132) (40,874) Interest & Financial Charges 333 42 - - 375

(327) (23) (-) (-) (350)Other un-allocable expenditure 5,203 1,316 19 1,829 8,367

(4,303) (925) (27) (-) (5,255)Profit before tax 25,996 1,447 205 2,542 30,190

(29,148) (2,746) (243) (3,132) (35,269)Segment Assets (Including 82,827 19,210 5,868 38,501 146,406Capital Work In Progress) (59,307) (14,267) (5,472) (37,199) (116,245)Segment Liabilities 20,364 4,043 3,455 - 27,862

(11,854) (3,462) (2,876) (-) (18,192)Unallocable Liabilities 9,204

(5,644)Capital Employed 109,340

(92,409)Figures in bracket are for previous year.

(Rs. in lacs)

67

18. Related Parties Disclosures as per Accounting Standard - 18.List of Related Parties with whom transactions have taken place during the year:a. Joint Venture Company

Hydril Jindal International Pvt. Ltd.b. Key Management Personnel

Shri Saket JindalShri S. P. Raj

c. Relatives of Key Management PersonnelShri D.P. JindalSmt. Savita JindalShri Raghav JindalSmt. Rachna Jindal

Details of Transactions during the year are as follows:

Particulars 31-03-2008 31-03-2007

a. Purchase & Other Services from related partiesJoint Venture Company 1,711,255 1,000,690Relatives of Key Management Personnel 78,726 84,645

b. Sales & Other Services to related partiesJoint Venture Company 166,270,116 258,279,960

c. Investment in related partiesJoint Venture Company 990,950 -

d. Loans/Inter Corporate deposits given (Maximum Outstanding)Joint Venture Company 92,162,867 16,800,000

e. Interest Received from related partiesJoint Venture Company 4,497,157 1,034,169

f. Rent paid to related partiesRelatives of Key Management Personnel 300,000 120,000

g. RemunerationKey Management Personnel 4,684,248 4,496,511

h. Dividend PaidKey Management Personnel 2,618,646 13,093,230Relatives of Key Management Personnel 335,130 1,675,650

i. Balance as at 31st March 2008 Payable by the CompanyRelatives of Key Management Personnel - 19,521

j. Balance as at 31st March 2008 Receivable by the CompanyJoint Venture Company 134,071,934 24,995,949Relatives of Key Management Personnel 14,757 -

(Rs.)

No amount has been provided as doubtful debts or advances / written off or written back in the year in respect of debts duefrom or to any related parties.

19. In compliance with the AS - 22 relating to Accounting for Taxes on Income issued by the Institute of Chartered Accountantsof India, the company has adjusted the deferred tax liability (net) arising out of timing differences accruing during the yearaggregating to Rs. 8,265,000/- in the Profit & Loss Account.

Deferred Tax Liability

Particulars As At 31.03.2007 During the Year As At 31.03.2008

Fixed Assets 413,044,958 6,151,042 419,196,000

Employees Retirement Benefit Adjustment as per AS - 15 - - 601,530

Deferred Tax Assets

Particulars As At 31.03.2007 During the Year As At 31.03.2008

Others 2,113,958 (2,113,958) -

Net Deferred Tax Liability 410,931,000 8,265,000 419,797,530

(Rs.)

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21. Disclosure required by Clause 32 of Listing Agreement:-The company has made an investment in Joint Venture Company during the year amounting to Rs. 990,950/- (Previous YearRs. Nil).Loans & Advances in the nature of Loans where repayment schedule is not specified / is beyond 7 years Rs. Nil (Previous YearRs. Nil).Loans & Advances in the nature of Loan where interest is Rs. Nil (Previous Year Rs. Nil) or below the rate specified U/S 372Aof the Companies Act Rs. Nil (Previous Year Rs. Nil).To Firms / Companies in which directors are interested Rs. Nil (Previous Year Rs. Nil).

22. Additional information pursuant to the provisions of paragraph 3 & 4 of part II of Schedule VI to the Companies Act, 1956.I. CAPACITY AND PRODUCTION

Seamless Pipe

20. Earning Per Share

BasicNet Profit available for equity shareholders (Rs.) (a) 1,952,184,294 2,338,858,439Weighted average number of equity shares of Rs. 5/- each (b) 70,463,933 60,943,464Basic Earning per share (Rs.) (a/b) 27.70 38.38DilutedWeighted average number of equity shares of Rs. 5/- each (b) 70,463,933 60,943,464Add: Weighted average number of potential equity shares of Rs. 5/- each - 601,454that could arise on conversion of FCCBsWeighted average number of shares (c) 70,463,933 61,544,918Diluted Earning per share (Rs.) (a/c) 27.70 38.00

Particulars 2007-08 2006-07

Installed Capacity 350,000 350,000

Production 244,476 228,616

(MT)Particulars Year ended 31.03.2008 Year ended 31.03.2007

Includes Production of Pipe Fittings of 66.688 MT (Previous Year 73.396 MT).

ERW Pipe

Installed Capacity 200,000 200,000

Production 107,594 85,533

(MT)Particulars Year ended 31.03.2008 Year ended 31.03.2007

Includes production of 17,816 MT (Previous Year 13,146 MT) pipe by third party on job work basis as orders executed were not in our size range.

Wind Power

The installed capacity is as certified by the Management.

Installed Capacity 61,320,000 61,320,000

Units Generated 8,576,525 10,205,172

(KWH)Particulars Year ended 31.03.2008 Year ended 31.03.2007

69

II. OPENING STOCK, CLOSING STOCK & TURNOVER OF MANUFACTURED GOODSSeamless Pipe

Opening Stock 11,197 414,075,912 14,193 481,038,789

Turnover* 237,965 11,898,953,888 231,612 11,541,795,643

Closing Stock 17,708 852,582,398 11,197 414,075,912

Items Year ended 31.03.2008 Year ended 31.03.2007

Qty. (MT) Amt. (Rs.) Qty. (MT) Amt. (Rs.)

* It includes captive consumption Seamless Pipes of Rs. 6,992,873/- (233.070 MT) (Previous Year Rs. 4,297,702/-) (162.149 MT).

* It Includes Rs. 7,291,336/- (88.226 MT) (Previous Year Rs. 5,299,452/-) (52.689 MT) of Pipe Fittings.

Closing Stock Includes stock of Pipe Fitting amounting to Rs. 16,65,597/- (14.289 MT) (Previous Year Rs. 3,617,022/-) (35.827 MT).

ERW Pipe

Opening Stock 4,087 131,975,985 5,226 135,629,419

Turnover* 105,432 3,942,066,490 86,672 3,249,737,013

Closing Stock 6,249 261,957,335 4,087 131,975,985

Items Year ended 31.03.2008 Year ended 31.03.2007

Qty. (MT) Amt. (Rs.) Qty. (MT) Amt. (Rs.)

* It includes captive consumption of Rs. 1,488,927/- (56.780 MT) (Previous Year Rs. 3,620,420/-) (119.410 MT).

Income from Power Generation 8,576,525 44,855,226 10,205,172 49,380,170

Wind Power

III. RAW MATERIALS CONSUMED

Round Billets 263,900 6,895,900,618 246,288 5,690,037,601

HR Coil 110,212 3,129,597,648 90,614 2,399,462,332

Zinc 384 56,806,541 315 52,900,779

Socket 33 1,261,803 39 2,280,424

Coating Material 374 15,863,800 4 273,977

Total 10,099,430,410 8,144,955,113

IV. VALUE OF IMPORTED & INDIGENOUS RAW MATERIALS, STORES & SPARE PARTS CONSUMED

Imported 14.63 1,477,694,311 30.18 2,458,470,804

Indigenous 85.37 8,621,736,099 69.82 5,686,484,309

Total 100.00 10,099,430,410 100.00 8,144,955,113

RAW MATERIALS

Items Year ended 31.03.2008 Year ended 31.03.2007

Units (KWH) Amt. (Rs.) Units (KWH) Amt. (Rs.)

Items Year ended 31.03.2008 Year ended 31.03.2007

Qty. (MT) Amt. (Rs.) Qty. (MT) Amt. (Rs.)

Items Year ended 31.03.2008 Year ended 31.03.2007

(%) Amt. (Rs.) (%) Amt. (Rs.)

70

Particulars Year ended 31.03.2008 Year ended 31.03.2007

Imported 17.51 107,685,566 18.73 116,707,437

Indigenous 82.49 507,267,445 81.27 506,405,256

Total 100.00 614,953,011 100.00 623,112,693

V. CIF VALUE OF IMPORTS

Items Year ended 31.03.2008 Year ended 31.03.2007

VI. EXPENDITURE IN FOREIGN CURRENCY (Other than items appearing in point V)

Items Year ended 31.03.2008 Year ended 31.03.2007

VII. EARNING IN FOREIGN CURRENCY

Items Year ended 31.03.2008 Year ended 31.03.2007

VIII. MANAGERIAL REMUNERATION

The Managing / Wholetime Directors of the Company were paid remuneration (without any commission) in accordance withthe provision of Schedule XIII to the Companies Act, 1956. Therefore computation of the profit under section 198 of theCompanies Act 1956 is not applicable.

STORES & SPARE PARTS CONSUMED

The Details of Managerial Remuneration is as under:

(Rs.)

(Rs.)

(Rs.)

(Rs.)

Items Year ended 31.03.2008 Year ended 31.03.2007

(%) Amt. (Rs.) (%) Amt. (Rs.)

Raw Materials 2,011,235,746 2,295,415,315

Stores & Spares 84,369,239 77,997,760

Capital Goods 401,839,990 48,058,140

Travelling 3,327,267 1,595,350

Interest 7,724,542 11,004,938

Ocean Freight 58,306,698 Nil

Others 204,984 628,997

Supplies to Oil Sector 4,740,726,816 1,949,892,200

Interest Received 138,796,620 159,563,244

Salary 3,430,180 3,349,540

Contribution to PF & other Funds 473,692 452,243

Perquisites 780,376 694,728

Total 4,684,248 4,496,511

71

Additional Information pursuant to Part IV of Schedule VI to the Companies Act, 1956.Balance Sheet Abstract and Company's General Business Profile

I. Registration Details

II. Capital Raised during the year (Rs. in thousand)

Registration No. 80545 State Code 11

Balance Sheet Date 31-03-2008

III. Position of Mobilisation and Deployment of Funds (Rs. in thousand)

Bonus Issue Private Placement/FCCB

Nil 3,007

Public Issue Right Issue

Nil Nil

Total Liabilities Total Assets

12,375,420 12,375,420

Sources of Funds

Paid Up Capital Reserves & Surplus

352,667 10,581,367

Secured Loans Unsecured Loans & Deferred Tax

158,326 1,283,060

Application of Funds

Net Fixed Assets Investments

3,374,596 893,784

Net Current Assets Misc. Expenditure

8,107,040 Nil

Accumulated Losses

Nil

72

23. Paise have been rounded off to the nearest rupee.

24. Previous years' figures have been re-grouped/re-arranged wherever considered necessary.

25. Schedule 1 to 20 are annexed to and form part of the Statement of Accounts.

Signatures to Schedules 1 to 20

As per our report of even date attached

IV. Performance of Company (Rs. in thousand)

Turnover (including other income) Total Expenditure

15,413,612 12,394,643

Profit before tax Profit after tax & adjustment

3,018,969 1,952,184

Basic Earning per share (Rs) Dividend (%)

27.70 100

V. Generic Names of Three Principal Products of Company (as per monetary terms)

Item Code No. (ITC Code) 7304.00Product Description Seamless Pipes & Tubes

Item Code No. (ITC Code) 7305.11Product Description ERW Pipes & Tubes

Item Code No. (ITC Code) 8502.31Product Description Wind Power

Diluted Earning per share (Rs)

27.70

R.K. KanodiaPartnerMembership No.16121

Place : GurgaonDated : 28th August 2008

For KANODIA SANYAL & ASSOCIATESChartered Accountants

For & on Behalf of the Board

P.K. PuhanCompany Secretary

Anil JainCFO

D.P. JindalChairman

Saket JindalManaging Director

U.C. AgarwalD.K. Parikh

H.K. KhannaS.P. Raj

Wholetime Director