Chairman's Report on Half Yearly Results

Dear Shareholder

I take pleasure in sending herewith the Unaudited Financial Results (Provisional) for the six months ended 30th September, 2003.

During the period under review, 1,11,775 MT of sponge iron has been produced as compared to a production of 1,22,322 MT in corresponding period of the previous year. This was because the plant took two kiln shutdowns in the first half of this year compared with a single kiln shutdown during the same period last year. The management expects to make up this shortfall during the second half of this financial year. The cost of production has increased mainly due to unprecedented increases in the price of iron ore since April, 2003. However, the sponge iron market has been buoyant and the net realisation has further improved, which has resulted in enhancing the profitability of the Company during the period under review. The profit before tax has registered an increase of 98% while the profit after tax and earnings per share have registered an increase of 72% over the corresponding period of the previous year.

The management is presently considering expanding its operations in sponge iron manufacture as well as in power generation. The work for installation of Kiln # 3 is due to begin shortly as soon as the necessary statutory clearances have been obtained from government authorities.

We look forward to your continued support in the company’s growth.