• Despite significant challenges, your company maintained similar levels of sales volumes in iron ore at 18.1 million tonnes (DMT), pig iron at 266 thousand tonnes, and our met coke sales were at 252 thousand tonnes in 2010-11.
• Iron ore capacity expansion is progressing well; and the expansion of Pig Iron and Met Coke are also on track for commissioning by Q3 FY2012
• Your company acquired 18.5% stake in Cairn India Limited, post our announcement of strategic investments to acquire 20% stake in Cairn India.
• Sesa Goa also acquired the upcoming steel plant assets of Bellary Steel & Alloys Limited
• Amalgamation of Sesa Industries Limited (SIL) with your Company completed
• With a focused approach, your company further added 53 million tonnes to the gross reserves and resources taking its total R&R base to 306 million tonnes as at 31 March 2011.
• Total consolidated revenues increased by 55% to Rs 9,745 crore in 2010-11. With this growth, Sesa Goa today is an enterprise with a gross turnover exceeding US$ 2 billion.
• Consolidated Profit after tax grew by 60% to ` 4,222 crore in 2010-11
• Consolidated earnings per share (EPS-diluted) rose from Rs 31.62 in 2009-10 to Rs 48.17 in 2010-11.

• Business & Economy Magazine ranked Sesa at # 26 in power 100 Companies;
• Goan Achievers Award for Corporate Social Responsibility by Navhind Times and Viva Goa Magazine;
• Runners up for the Best Corporate Social Responsibility Award for its Alternate Livelihood Project by Bombay Stock Exchange;
• Environmental Sustainability Excellence Award 2010-11 by Indian Chamber of Commerce;
• Excellent Water Efficient Unit - Beyond Fence at Award for Excellence in Water Management 2010 by Confederation of Indian Industry;
• Excellence award for Afforestation for Sanquelim by Indian Bureau of Mines;
• British Safety Councils International Safety Award 2011, and so on.

• There were all time high productions of iron ore at 21.4 million tonnes and pig iron at 280 thousand tonnes, and our met coke productions was at 263 thousand tonnes
• Total consolidated revenues increased by 21% to Rs. 6,284 crore in 2009-10.
• PAT (consolidated, net of minority interest) grew by 32% to Rs. 2,629 crore
• Consolidated earnings per share (EPS-diluted) rose from Rs. 25.26 in 2008-09 to Rs. 31.62 in 2009-10.
• The Company finished the year with liquidity in cash and cash equivalent of Rs. 6,952 crore.
• Through its exploration activities, there was a net addition of 43 million tonnes to its iron ore reserves and resources, post depletion of 21 million tonnes of saleable iron ore production.
• Acquisition of Dempo's mining assets in Goa on a debt-free and cash-free basis for Rs. 1,750 crore (based on normative working capital) which was financed through internal accruals.
• Sesa Goa's total revenues have grown at a compounded annual growth rate (CAGR) of 41% since 2006-07, while PAT has grown at a CAGR of 60% over the last three years - a testament to the Company's continuously delivering results.

Financial year 2009-10 began with developed markets in recession and commodity prices and industrial demand at multi-year lows. Emerging markets - especially India and China - proved more resilient to the economic downturn, with continued economic and metals consumption growth. The large and coordinated stimulus from Governments globally has secured greater stability in financial markets and return to economic growth.

Despite a slow first half and expectations of a sharp drop in growth, China achieved 8.7% GDP growth in 2009-10, and is forecasted to grow at around 9.7% in 2010. India posted a 7.4% growth in 2009-10, and is estimated to grow above 8% in 2010-11. Brazil is stated to grow at over 5.5% in 2010. These three major emerging economies have not only emerged out of the slowdown, but are also expected to deliver significantly higher GDP growth in the next few years. From a macroeconomic point of view these developments reinforce the strength in Sesa's business strategy.

2010 was another outstanding year. Record productions for Iron Ore and Pig Iron were achieved along with maintaining the costs under control. With a share of 88% of total external sales, iron ore is your Company's primary business segment. During the year, there was a 11.6% increase in sales volume of iron ore from Sesa Goa's existing business and 36% increase on a consolidated basis with 20.5 million tonnes in FY2010 (including 3.6 million tones sales from Dempo mines) as compared to 15.1 million tonnes in FY2009. Even with the sharp increase in production and sales volumes during the year, your Company's cost of productions were competitive and were maintained at same levels as compared to the previous year's cost.

Pig Iron business in FY2010 has seen an increase in production and sales volumes by 29% to 280 thousand tonnes and 24% at 279 thousand tonnes respectively - a record production and sales volumes since the inception of the business.

In the Met Coke business; during the FY2010 we achieved a 17% increase in production volumes at 263 thousand tonnes and 22% increase in sales volumes at 265 thousand tonnes as compared to FY2009. As regards to the Technology Sale for our 'Energy Recovery Coke Oven Facility', it may be noted that your company has received United States patent and also our application made for European patent has also been granted, qualifying through the stringent pollution norms in US & EU.

As you are aware, due to prolonged litigation by one single shareholder, the merger of Subsidiary Company, Sesa Industries Limited with the Company is still pending before Supreme Court of India for approval and the hearing is expected in the first week of August 2010.

The Company has been subjected to investigation by Serious Fraud Investigation Office (SFIO) since December 2009 on the conduct of business affairs of the Company. The Company is co-operating with SFIO and providing the required information. Given the high standards of governance practiced by the companies under scrutiny, I am confident that the issues will be favorably sorted out at the earliest.

As informed in the last AGM, Dempo has been the first major acquisition by your Company. In June 2009, your Company acquired the mining assets of V.S.Dempo and Company Private Limited ('VSD' or 'Dempo') and its subsidiaries and associates. The acquisition was on a debt-free and cash-free basis for Rs. 1,750 crore (based on normative working capital) which was financed through internal accruals. Dempo is a logical and strategic fit with Sesa's existing iron ore business. Your Company has started leveraging synergies to create significant long term value for all shareholders. There has been a significant growth in production of saleable ore from Dempo and the success of the post-merger fit has given us confidence to pursue the acquisition route for growth in coming years.

Our exploration philosophy has been to replace every tonne of ore mined with at least one tonne of resource. I am pleased to report that our ongoing exploration activities have yielded significant success with a net increase of 43 million tonnes to reserves and resources, post depletion of 21.4 million tonnes of saleable ore production in FY 2010. As on 31st March 2010, total consolidated reserves and resources stands at 353 million tones including 70 million tonnes from Dempo acquisition.

Over the last few years, your company has been growing profitably, and at a rapid pace. The lessons learnt and the experience gained has given your Company the conviction to set a time bound target for aggressive growth. The goal is to be the fourth largest iron ore producer in the course of next 2/3 years with an annual production of 50 million tonnes from various mines. This is the vision that your Company has adopted to guide its activities in the next three years. Such a large increase in production and transportation of iron ore over a short span of time will need aggressive investments and concerted efforts not only at the mines but also in developing the associated logistics infrastructure. The Company intends to invest around Rs.2,300 crores to support this plan. However, the regulatory environment for iron ore mining in India is quite challenging and hence the time line for growth projects in iron ore mining to that extent suffers from uncertainity.

Your company has also announced for setting up of new integrated project to increase the pig iron production capacity by 375 thousand tonnes per annum along with non recovery coke plant with a capacity of 280 thousand tones, based on its own patented coke-making technology, a sinter plant and a waste heat recovery power plant. Post commissioning of the new projects, your company will be the only manufacturer of pig iron in the secondary sector in India, with total backward integration. Total investment in these projects is estimated at Rs.605 crore. The project is expected to be completed by Q1, FY2012 and is being executed as per schedule.

Driving our achievements and success is our dedicated and talented workforce of over 4,000 people. I would like to thank each one of them for their continued superior efforts this year. We remain committed to continue to provide a challenging and rewarding work environment for all our employees, and building a high performance organisation where careers are nurtured, capabilities are valued, leaders are developed from within and performance is rewarded.

Your company has long standing commitment to sustainable development, and we believe that business today has greater responsibility than ever before to enhance society's overall well being. We continue to proactively foresee social and environmental factors that will be influencing our business in the long term and prepare for those changes now, so that we can emerge as a more effective and stronger company.

I am pleased to report that your company's safety record measured in terms of FSI - an index which simultaneously accounts for the frequency and the severity of accidents reduced substantially on consolidated basis by 79% from 1.505 in FY2009 to 0.319 in FY 2010.

On sustainable development, annual targets are set and monitored in line with your Company's HSE and social policies with a clear focus on integrating HSE aspects in the decision-making process. All locations are certified for ISO 9001, ISO 14001 and OHSAS 18001 except Orissa operations and OHSAS for Dempo operations. Your Company's community development work through the Sesa Community Development Foundation, Mineral Foundation of Goa and specific need based initiatives continues to focus on social projects including alternate livelihood developments in line with its over-all sustainability objectives.

We have also remained focused on actively engaging with our key stakeholders, enhancing our reporting and increasing transparency; from the past several years your company has been producing the Sustainable Development Report every year and for the FY2009 your company's sustainable development report was produced based on International Guidelines GRI G3 with A+ level of reporting and your company has plans to publish at same level for the financial year 2010.

It is clear that the primary markets - India and China - are moving back to a relatively high growth trajectory. Iron ore prices have recovered from the lows of 2009 and are expected to be buoyant on the back of strong demand from China and India. We are also looking at iron ore market outside China including domestic market of iron ore with more focus. We have also started shipment on CFR basis in a large way to capture extra realization potential. On the cost front, royalty rates have gone up in India, railway freight costs too are increasing, and there are always risks of ever changing export levies. In this milieu, while your company is committed to its long term growth objective, it is aware of the critical role that internal efficiencies and operational productivity will play for the future fortunes of your Company. Your Company remains cautiously optimistic of overcoming the obstacles and delivering a strong performance in FY2011.

The Board has recommended a dividend of Rs 3.25 per equity share of Re.1/- each for the financial year 2010.

I am happy that our efforts are acknowledged by external agencies. During the year we won several awards in the areas of environment, safety, corporate social responsibility, etc notable among them being the International Safety Award for 2009 by the British Safety Council, Appreciation award for the Mine reclamation work by CII, Overall CSR Excellence Award-2009 for second consecutive year by Green Triangle Society and GCCI, Best performer award by FE - EVI for contributions towards the environment and the excellence in the area of 'Green Businesses'.

On behalf of the Board, I express my sincere appreciation for the support and contribution made by employees at all levels in dealing with the challenges of the new era and look forward to their continued support.

I am also thankful to all our customers for their loyalty and we reiterate our commitment to deliver value to them. Our thanks are also due to suppliers, an important part of our value chain. I would also like to place on record my gratitude & thanks to my esteemed colleagues on the Board for their valuable support & contribution. We are grateful for the support extended by the community around our operating areas and government authorities in the respective states.

We are also grateful to the Ministry of Mines, Ministry of Environment & Forest, Government of India, and State Governments of Goa, Karnataka and Orissa for the support and cooperation extended to us in all our endeavors.

I sincerely appreciate the collective endeavor of the entire management team under the 'able leadership of our Managing Director, Mr. PK. Mukherjee, for working tirelessly to realize the company's vision, meeting stakeholders' aspirations and continuing the growth and success story of the Company.

Last but not the least I am thankful to all shareholders for reposing their confidence in the Company.

Thank you, Ladies and Gentlemen
Chairman
Place: Panaji - Goa,
Date: 19 July 2010

The world economy is recovering after the severe recession of late 2008 and the early part of 2009. Unprecedented stimulus packages announced by various Governments globally have contributed to the upturn.

The Indian economy seems to have a strong foothold on the recovery path backed by timely and aggressive policy responses by the Government and the Reserve Bank of India (RBI) to tackle the crisis and a turnaround in consumer as well as business sentiment. However, some downside risks in the form of inflation do persist. The RBI has projected real GDP growth for 2010-11 at 8.4% against 7.4% in 2009-10.

As mentioned earlier in my speech, your company has achieved record production and sales volumes during the year under review. There has been an increase in production volume by 29% from 217,114 tonnes in 2008-09 to 280,129 tonnes in 2009-10 while sales volume was increased by 24% from 224,478 tonnes in 2008-09 to 278,747 tonnes in 2009-10.

There was an increase of 48% in pre-tax profit for the year under review as against previous year. This was primarily due to lower price of raw material, mainly coke & iron ore and partly due to higher sales which was partly off-set by lower average price realization.

While there was an improvement in the latter part of the year, overall demand and price levels remained subdued during the year. Your company focused on higher sales and production volumes with both the blast furnaces operating at the optimum level.

As per the World Steel Association's short range outlook the economic recovery is not only earlier but also stronger than expected. India's steel demand maintained stable growth during the crisis and is expected to grow by 13.9% and 13.7% in 2010 and 2011 respectively, after 7.7% in 2009.

The demand for pig iron is expected to be buoyant, especially with the auto, pump and engineering goods sector projected to do well. However, the international trend of quarterly pricing in the coal and iron ore trade is likely to keep the prices of inputs i.e., coke & iron ore fluctuating which render the prices of pig iron volatile. Your company continues to focus on reductions in operating costs, product quality improvement and development of new products for downstream industries. As we march ahead we look forward to 2010-11 with guarded optimism

Appreciation and accolades always uphold the confidence we have in our strengths and capabilities. Our sustained all round efforts have won us several awards and accolades this year also. Significant amongst which are: National Award for Excellence in Water Management 2009 as Water Efficient Unit by Confederation of Indian Industry (CII), International Safety Award for 2009 by British Safety Council for the second consecutive year and Corporate Social Responsibility Award in Environment category by Green Triangle Society & Goa Chamber of Commerce and Industry (GCCI).

I am greatly obliged to appreciate the passionate contribution made by the employees of the company under the competent leadership of management team. I'd like to take this precious opportunity to put across our Board's gratitude to all shareholders for retaining their trust on the management and also for their endurance over the past several years in waiting for the completion of the merger process. I am also thankful to all stakeholders of the company viz; customers, suppliers, bankers, auditors, legal advisors, consultants, other business associates and various government authorities, for their unstinted support and co-operation.

I am also grateful to my esteemed colleagues on the Board for their enormous support. I am fully confident that the year 2010-11 will be another year of remarkable performance.

Thank you
Chairman
Place: Panaji - Goa,
Date: 19 July 2010

The year gone by has indeed been one of the most challenging for the world economy. The unprecedented financial crisis, acknowledged today as the worst since the Great Depression , has brutally shaken the foundations of some of the strongest economies in the world. Though Governments across continents have responded speedily and in rare unison, the path to recovery is expected to be long and arduous. Indian economy was also not immune to this shock. While at the macro level, our country has displayed remarkable resilience sustaining relatively high growth rates, several sectors have been adversely impacted.

As per IMF's latest forecast the global economy is beginning to pull out of recession and global economic growth during 2010 is projected at 2.5%, against a negative growth rate of 1.4% in 2009. The survey of professional forecasters conducted in backdrop of the first-quarter review of the monetary policy by the Reserve Bank of India, indicates that the Indian economy is projected to grow by 6.5% during the current financial year against 6.7% in 2008-09.

Performance

Your company has recorded highest iron ore sales ever, during 2008-09, - 15.1 Mt as against 12.4 Mt in the previous year, representing 22% increase over the previous year. On a consolidated basis the revenue from operations has crossed the landmark milestone of US Dollar 1 Billion The profit after tax was higher by 30% as compared to previous year primarily due to contribution from higher sales, higher income form investment and depreciating Indian rupee. This was partly off-set by lower sales realization due to depressed market condition in second half of the year and increase in logistic cost and inflationary impacts.

Higher sale were possible due to strenuous efforts by the company to increase production from mines at Goa and Karnataka, duly supported by well managed logistic activity. Your company has surpassed all past records in terms of tonnages handled at mines and by trans-shipper vessel MV Orissa.

Although the long term contract bench mark price was settled with an increase of 79.88% in respect of fines and 96.5% in case of lumps, the long term customers did not adhere to their schedule of off take, citing deteriorating market conditions. Therefore 86% of our direct export quantity was sold on spot basis as against 54% in previous year. The sport prices which peaked during 2nd quarter of the financial year crashed to less than 50% of the long term price by year end.

2008-09 saw a series of increase in rail freight and drastic increase in truck transport cost which resulted into higher logistic cost, although rail freights were reduced for some sectors in the last quarter. The export duty had also undergone frequent changes during the year adding uncertainty to your company's business plan. Wage settlement has been signed with Workers Union, in Goa & Karnataka, two major operational areas, for a period of 4 years.

Business Outlook

Over the longer term, steel demand is likely to go up driven by growing investment in infrastructure, need for new housing and increasing levels of urbanisation in Asian countries, particularly China and India.

However, the World Steel Association forecasts that worldwide apparent steel use is expected to decline by -14.9% to 1,018.6 million metric tons (mmt) in 2009 after declining by -1.4% (1,197 mmt) in 2008. However, steel demand is expected to stabilise in the latter part of 2009 leading to a mild recovery in 2010.

The Company has started wotking on its medium term vision to achieve a volume of 50 Mt from its Goa, Karnataka and Orissa operations. Logistic capability building and long term marketing strategy are also getting focused attention. Your company continues with aggressive drilling programme in 2009-10 and pursue acquisition of new mines for augmentation of resources.

The annual iron ore negotiations have been concluded between the three big suppliers and buyers (except Chinese buyers) with reduction of 32.95% for fines and 44.47% for lumps, , for Australian oreand 28.2% for Brazilian fines, China is still holding on to its expectations of higher price reduction while no suppliers are inclined to accept the same. The recent trend of gradual increase in spot prices has been encouraging for your company.

While sharper-than-expected cut in iron ore prices, slippage in Chinese demand and a spike in freight rates remain risk for our business, a low cost structure gives the company some competitive advantage. The new royalty regime on iron ore @10% ad-valorem announced yesterday would impact the profitability of your company. The unending debate on imposing restrictions on export of iron ore and frequent changes in rail tariff for export of iron ore adds to uncertainty in the business.

Performance

The pre-tax profit of the Metallurgical Coke Business has grown more than 2.5 times as against previous year. This was primarily due to increased price realization during 1st half of the financial year which was partly off-set by higher cost of coal blend consumed and loss of contribution due to lower sales. While the revenue from sale of gas remained almost at the same level as last year, there was no receipt on account of technology sale during the year as against a receipt of Rs.4.3 crs. in the previous year.

The production during the period under review was 224,216 down by ~11% and sale 217,357 down by ~ 16%. Production was curtailed from Dec'08 to Feb'09 owing to inventory built up in pig iron plant being a major outlet and also due to slowdown in foundry industry.

We have received Carbon Credits from the CDM issuance board of the UNFCCCwhich has added to the revenue during the year.

As regards business outlook, the Metallurgical Coke business is expected to continue to face cost pressure with the margins thinning between end product price and price of coal.

During 2008-09 SIL produced 217,114 MT as against 271,492 MT in the previous year. The production was lower because of scheduled shutdown of one of the blast furnace for 48 days during the first quarter for maintenance & relining and subsequently one of the blast furnaces had to be shutdown for over 3 months in the second half due to built-up in pig iron inventory as a result of deteriorating market condition. 224,478 Mt of pig iron was sold during the year as against 266,497 in the previous year.

There was reduction of around 10% in pre-tax profit for the year under review as against previous year. This was primarily due to higher price of coke and partly due to lower sales which was partly off-set by higher average price realization.

As regards to the current market scenario, although the commercial vehicle production continues to be under pressure, the off take from units catering to the tractor, pump and construction sectors have been good in the first quarter.. We are hopeful that pickup in demand in the domestic market will continue in the near term.

Pig Iron Plant has been awarded 5S certification in work place management by the Quality Circle Forum of India (QCFI) in Jul 09 .

For us at Sesa, Corporate Social Responsibility includes living our corporate values with the goal of having minimal impact on the natural environment, enabling local communities to develop their potential, empowering employees to be responsible civil society members and committing ourselves to business practices that are fair to all stakeholders, so that we can collectively contribute towards creating a better world for all. It is essentially focus on triple bottom line, i.e., People, Planet and Profit.

The Sesa Group, apart from contribution to the society by paying various statutory dues of over Rs.1,130 crores, has also supported various socio-economic programmes spending over Rs. 11.5 crores directly and indirectly. These include contribution to Mineral Foundation of Goa for its various social projects for sustainable development in the mining belt of Goa, construction/repair of public roads, contribution towards peripheral development of mining areas in Barbil - Orissa, de-silting of village water tanks in Chitradurga - Karnataka, organizing medical camps/distribution of medicines, helping the poor students by providing text books/uniforms, providing educational aides to schools, providing drinking water, helping various charitable organizations, promoting women empowerment, helping farmers in mitigating their losses and increasing productivity, helping various agencies by providing furniture/computers, etc.

A new community medical center has been setup in Chitradurga, Karnataka, which is run by an NGO and fully funded by your company. Besides your Company continues to sponsor two medical centers in Goa and one medical center in Orissa which are also run by NGOs to provide free medical diagnosis and medicines.

Sesa Community Development Foundation has continued with its tradition of delivering high quality technical trainees from Sesa Technical School and young footballers from Sesa Football Academy (SFA). A new wing of senior players of SFA was started at Sirsaim during the year under review with a focus to develop a team of young players.

As informed to you in last AGM, your company, in collaboration with the Mineral Foundation of Goa and Govt. of Goa, is implementing the programme 'Gramnirman 2010' in the village Panchayat of Kirlapal-Dabal in South Goa to develop a model for the overall sustainable development of the village. The first phase of the project has been completed with a focus on social, educational and agriculture infrastructures. The second phase, primarily focused on drinking water and irrigation, is proposed for completion by 2010.

Company has also signed a Memorandum of Understanding (MoU) during the year with the University of Agricultural Sciences, Dharwad (UAS-D), for implementing alternative livelihood development activities for improving the socio - economic status of the people having low resource base, marginal and landless farmers living in the surrounding areas of A Narrain Mines, Chitradurga.

Your company also continues to pursue its mission for environmental excellence and constantly explores opportunities to improve ecology and the environment. Its mine reclamation effort has significantly improved the biodiversity of reclaimed as well as running mines. A collaborative research project with the Department of Microbiology, Goa University, for reclamation of mine dumps has shown positive results on pilot scale and the methodology is being utilized for improving the reclamation practices as the integral part of Environment Management plan. About 70,000 saplings of different native species have been planted over an area of 15 hectares in and around various establishments of the company. Your company has also initiated projects to develop a Butterfly Park and set up a Bamboo Pavilion which would be completed in the current year.

Company's consistent all-round performance has been recognized and appreciated, which is reflected in the number of awards and accolades your company has received. Significant amongst which are the following:

• Best Value Creator (Large Cap) category - Outlook Money NDTV Profit Awards 2008
• CII-ITC Sustainability Award (Commendation for Strong Commitment among Large Business Organisation) for the year 2008
• First prize for Corporate Social Responsibility by Inspectorate of Factories & Boilers - Govt. of Goa, Ministry of Labor - Govt. of India and Green Triangle Society Goa.
• 10th best company in the country's most investor friendly companies in a survey conducted by Business Today.
• Ranked 55th in BT 500 - India's Most Valuable Companies by Business Today.
• Greentech Environment Excellence Awards 2008:
  • Codli Mines - Gold
  • MetCoke - Gold
  • Shipbuilding - Silver

I, on behalf of the Board would like to convey our deepest appreciation to all employees for their sincerity, devotion and perseverance in respective fields, which has helped the Company to grow from strength to strength. I also take this opportunity of extending my personal welcome to those Dempo Group employees, who are now part of larger Sesa family.

I would also like to thank my colleagues on the Board for their contribution and guidance. I sincerely appreciate the collective efforts of the entire management team under the able leadership of our Managing Director, Mr. P. K. Mukherjee, for working tirelessly to realize the corporate agenda, meeting stakeholders' aspirations and continuing the growth and success story of the Company.

The Company's quest for continuous value creation would not have been possible but for the support that my colleagues and myself have received from all our customers, suppliers, regulatory authorities and other business associates.

The support received by your company from its principal shareholders for continuously imparting further dynamism to the growth trajectory of your company is also appreciated.

Finally, I convey my personal gratitude for the confidence that you - our shareholders - have reposed in the company. I sincerely hope that you will continue to extend your whole-hearted support to us so that we, along with the executive management team and all employees, will further accelerate the growth and progress of your company.

Thank you,
K K Kaura