Tarmac (India) Private Limited

DIRECTORS REPORT

THE MEMBERS OF THE TARMAC (INDIA) PRIVATE LIMITED

The Directors hereby present their ninth annual report on the business and operation of the company and the statement of accounts for the year ended December 31, 2005. 1. FINANCIAL RESULTS (RS.000) Year ended 31.12.2005 Sales & service of Readymixed concrete 1,61,942 Other income 2,959 Expenditure RMC purchased Raw Material consumed Employee cost Other Expenses Depreciation on Fixed Assets Interest Total Profit / (Loss) for the year before tax Fringe benefit tax Profit / (Loss) for the year After tax 2. OPERATIONS During the year 2005, the Company sold 67122 Cu.Ms. of RMC as compared to 86386 Cu.Ms. in the previous year. Consequently, as it would be observed from the above results, the revenues from the sales and services of RMC has gone down to Rs. 161.94 millions in the year 2005 from Rs. 217.51 millions in the previous year representing a decrease of 26%. This was due to closure of Deonar Plant for a period of 6 months while it was being shifted to its site from Mankhurd. The Company has made a net loss of Rs. 12.28 millions as compared to a loss of Rs. 3.99 millions in the previous year. 3. CHANGE IN OWNERSHIP On 13th December 2005, Tarmac Heavy Building Materials Overseas Limited sold its 98.84% equity stake in your Company to The Associated Cement Companies Limited (ACC) from which date your Company has become a Subsidiary of ACC. 4. CHANGE OF STATUS TO A PUBLIC LIMITED COMPANY The Board of Directors has decided to change the status of your Company into a public limited company in view of the provisions of Section 3(iv) of the Companies Act, 1956 which states that a private limited company which is a subsidiary of a public limited company is to be regarded as a public limited company. 5. PROPOSED CHANGE IN THE ADDRESS OF THE REGISTERED OFFICE The Board of Directors has decided to change the Registered Office of the Company from its present location to Cement House, 121, Maharshi Karve Road, Mumbai 400 020. 6. INDUSTRIAL RELATIONS Cordial industrial relations prevailed during the year. 7. DIRECTORS During the year, Mr. Kavel Fisher, Mr. Stuart Jones and Mr. Kevin Lovely resigned from their directorship. Mr. Madan Lal Narula, Mr. A. K. Jain and Mr. Beat Malacarne were admitted as Additional Directors and being eligible offer themselves for reappointment. 8. DIRECTORS RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 217 (2AA) of the Companies Act, 1956: 1,64,901 11,901 99,355 7,725 45,048 12,999 69 1,77,097 (12,196) 92 (12,288)

(i) That in the preparation of the annual accounts for the financial year ended December 31, 2005, the applicable accounting standards had been followed along with proper explanations relating to material departures, if any; (ii) That such accounting policies as mentioned in Schedule - VIII of the Notes to the Accounts have been selected and applied consistently and judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at December 31, 2005 and of the loss of the Company as at December 31, 2005 and of the loss of the Company for that period. iii) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv) The annual accounts have been prepared on a going concern basis. 9. STATUTORY AUDITORS M/s. M. M. Chaturvedi & Co. Chartered Accountants, the Auditors of the Company are due to retire and being eligible offer themselves for reappointment. 10. PARTICULARS OF EMPLOYEES There are no employees drawing in excess of limits prescribed under Section 217 (2A) of the Companies Act, 1956 read with (Particulars of Employees) Rules, 1975 as amended and hence no information is furnished thereto. 11. TECHNOLOGY ABSORPTION Not Applicable 12. FOREIGN EXCHANGE EARNINGS/OUTGO The foreign exchange earnings/outgo of the Company for the year under review was nil. 13. ACKNOWLEDGEMENT The Directors take this opportunity to express their appreciation for the cooperation received from the State Government, the Companys Bankers, valuable customers and others concerned with the Company. Your Directors, also thank the executives, staff and employees of the Company for their valuable services and support during the year. By Order of the Board, For Tarmac (India) Private Limited (M L Narula) Chairman Mumbai : January 20, 2006 Registered Office : 12-13 Sai Chambers, 2nd Floor, Plot 44, Sector 11, Belapur Navi Mumbai 400614

Year ended 31.12.2004 2,17,512 895 2,18,407 1,020 1,40,568 7,866 59,006 13,929 13 2,22,402 (3,995) (3,995)

180

AUDITORS REPORT TO THE MEMBERS

1. We have audited the attached Balance Sheet of TARMAC (INDIA) PRIVATE LIMITED (the Company), as at December 31, 2005, the Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date both annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation . We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 (the Order) as amended, issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follow: (a) We have obtained all the information and explanations which to the best of our knowledge and belief, were necessary for the purpose 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 examination of those books; (c) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account; (d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; (e) On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors is disqualified as at December 31, 2005 from being appointed as a director in terms of Section 274 (1)(g) 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 accounts read with Significant Accounting Policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Company as at December 31, 2005; (ii) in the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date; and (iii) in the case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date. For M.M. CHATURVEDI & CO. Chartered Accountants M.M. CHATURVEDI Partner Membership No. 31118

Mumbai : January 20, 2006

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our Report of even date) i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets (b) According to the information and explanations given to us, fixed assets have been physically verified by the management during the year on a continuous basis, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. According to the information given to us, no material discrepancy has been noticed on such verification as compared to records. (c) In our opinion, the Company has not disposed off any substantial part of its fixed assets during the period so as to affect its going concern status. (ii) (a) According to the information and explanations given to us, the physical verification of inventories has been carried out by the management at reasonable intervals. (b) According to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

According to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. (iii) According to the information given to us, the Company has neither granted nor taken any loans, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. (iv) In our opinion, and according to the information and explanations given to us, there is adequate internal control system commensurate with size of the Company and the nature of its business for purchase of inventory and fixed assets and for the sale of goods and services. We have not noted any continuing failure to correct major weakness in the internal control system during the course of the audit. (v) According to the information given to us, Company has not entered into any contracts or arrangements referred to in section 301 of the Companies Act, 1956. (vi) According to information and explanations given to us, the Company has not accepted any deposit from the public. (vii) The Company does not have an internal audit system. (viii) According to information and explanation given to us, the Central Government has not prescribed the maintenances of cost records, under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of the product of the Company. (ix) a. According to the information and explanations given to us, undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth tax, Services tax, Custom duty, Excise duty, cess and any other material statutory dues, applicable to it, have generally been regularly deposited by the Company with the appropriate authorities though there has been slight delay in a few cases. According to the information given to us, no undisputed amounts in respect of aforesaid dues were outstanding at December 31, 2005 for a period of more than six months from the date they became payable. b. According to the information and explanations given to us, there are no disputed statutory dues which have not been deposited. (x) The Accumulated losses as on 31.12.2005 are less than fifty percent of the net worth of the Company and it has not incurred cash losses during the current financial year and in the immediately preceding financial year. (xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks. (xii) According to the information and explanations given to us, the Company has not granted loans and advance on the basis of security by way of pledge of shares, debentures and other securities. (xiii) The Company is not a chit fund, nidhi, mutual benefit fund or a society. Accordingly, clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 is not applicable. (xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, Clause 4 (xiv) of the Company (Auditors Report) Order, 2003 is not applicable. (xv) According to the information and explanations given to us, the Company has not given guarantee for loans taken by others from banks or financial institutions. (xvi) According to the information and explanations given to us, the Company has not taken any term loans. (xvii) According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, funds raised on short term basis have, prima facie, not been used during the year for long term investments. (xviii) The company has not made any preferential allotment of share to Parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956. (xix) The Company has not issued any debentures during the year. (xx) The Company has not raised any money by public issue during the year. (xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year. For M.M. CHATURVEDI & CO. Chartered Accountants M.M. CHATURVEDI Partner Membership No. 31118

(c)

Mumbai : January 20, 2006

181

BALANCE SHEET AS AT DECEMBER 31, 2005

Schedule Rs. I. SOURCES OF FUNDS 1. SHAREHOLDERS FUNDS Share Capital ....................... A 158,835,260 158,835,260 Rs.

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2005
Schedule Rs. INCOME : Ready mixed concrete

Rs.

Previous Year Rs.

Previous Year Rs.

158,835,260 158,835,260

Sales & Service ....................... Other Income ............................... 1

161,941,387 2,959,241 164,900,628

217,512,145 894,542 218,406,687

II. APPLICATION OF FUNDS 1. FIXED ASSETS ................... Gross Block .......................... Less Depreciation ................ Net Block .............................. 2. INVESTMENTS .................... 3. Current Assets, Loans & Advances ............................... (a) Inventories ...................... (b) Sundry Debtors .............. (c) Cash & Bank Balances . (d) Loans & Advances ......... B 163,879,383 74,306,059 89,573,324 10,000

EXPENDITURE Ready Mixed Concrete purchased 11,900,689 99,355,320

1,020,352 140,567,806

158,833,689 65,967,724 92,865,965 10,000

Raw Material Consumed ............. Payments and provisions for employees .............................. Other Expenses ........................... Interest .........................................

2 3

7,724,744 45,047,809 69,408 12,998,726 177,096,696

7,865,988 59,005,670 12,735 13,929,029 222,401,580 (3,994,893)

C 2,637,249 28,704,780 18,247,605 6,089,986 55,679,620

Depreciation .................................

2,960,742 38,290,929 15,092,948 6,750,602 63,095,221

Profit / (Loss) for the year after tax Profit / (Loss) for the year before tax ..................................... Provision for Taxation Fringe Benefit Tax .......................

(12,196,068)

92,160 (12,288,228)

(3,994,893)

4. LESS CURRENT LIABILITIES& PROVISIONS 5. NET CURRENT ASSETS ... 6. Profit & Loss Account .......... 7. TOTAL ASSETS (NET) ....... 8. ACCOUNTING POLICIES & NOTES ON ACCOUNTS ....

28,950,827 26,728,793 42,523,143 158,835,260

27,370,841 35,724,380 30,234,915 158,835,260

Add: Loss of earlier Year brought forward .................. Total Loss carried to Balance Sheet ACCOUNTING POLICIES & NOTES ON ACCOUNTS ...... E EARNINGS PER SHARE (See Note - 2(8) of Schedule E) BASIC / DILUTED EARNINGS PER SHARE

30,234,915 (42,523,143)

26,240,022 (30,234,915)

Rs. (0.90)

(0.28)

Per our Report attached For M.M. Chaturvedi & Co. Chartered Accountantants M.M. CHATURVEDI Partner Mem. No. 31118 Mumbai : January 20, 2006

For and on behalf of Board,

Per our Report attached For M.M. Chaturvedi & Co. Chartered Accountants A. K. JAIN Director M.M. CHATURVEDI Partner Mem. No. 31118 Mumbai : January 20, 2006

For and on behalf of Board,

BEAT MALACARNE Director

BEAT MALACARNE Director

A. K. JAIN Director

182

SCHEDULE FORMING PART OF BALANCE SHEET

As at December 31, 2005 Rs. SCHEDULE A : SHARE CAPITAL AUTHORISED 1,70,00,000 (previous year 1,70,00,000) Equity Shares of Rs. 10/- each .......................... ISSUED, SUBSCRIBED & PAID UP 15,883,526 (previous year 15,883,526) Equity Shares of Rs. 10/- each .......................... [Out of the above, 15,699,480 Equity Shares (previous year 15,699,480) are held by The Associated Cement Companies Ltd. (previous year Tarmac Heavy Building Materials Overseas Ltd., U.K.), the holding company]

SCHEDULE FORMING PART OF THE PROFIT & LOSS ACCOUNT

For the Previous year ended Year December 31, December 31, 2005 2004 Rs. Lakhs Rs. Lakhs SCHEDULE 1: OTHER INCOME Bank Interest (Tax deducted at source - Rs.194,460) ........ Service charges ............................................... Interest on Income tax refunds ...................... Prior Period Income ........................................ Interest from Debtors ...................................... Miscellaneous Balance written back ..............

Previous Year Rs.

170,000,000

170,000,000

158,835,260

158,835,260

678,310 60,192 1,966,240 62,300 192,199 2,959,241

459,246 45,000 4,419 385,877 894,542

158,835,260 SCHEDULE B : FIXED ASSETS

158,835,260

GROSS BLOCK AT COST Fixed Assets As at 31-12-04 (b) 8,531,960 13,453,480 2,661,971 127,868,874 98,743 206,300 2,737,267 1,815,080 1,460,014 158,833,689 Additions during the year (c) 9,271,519 323,559 118,264 9,713,342 Deductions during As at the year 31-12-05 (d) (e) 8,531,960 4,557,198 18,167,801 2,661,971 128,192,433 98,743 206,300 2,737,267 54,771 1,760,309 55,679 1,522,599 4,667,648 163,879,383 As at 31-12-04 (f) 959,850 5,277,053 540,773 57,005,313 37,170 58,100 721,299 456,859 911,307 65,967,724

DEPRECIATION For the year (g) 142,200 631,656 88,908 11,712,443 6,245 9,803 130,020 171,138 106,313 12,998,726 Deductions during the year (h) 4,557,198 35,574 67,619 4,660,391 As at 31-12-05 (i) 1,102,050 1,351,511 629,681 68,717,756 43,415 67,903 851,319 592,423 950,001 74,306,059

NET BLOCK As at 31-12-05 (j) 7,429,910 16,816,290 2,032,290 59,474,677 55,328 138,397 1,885,948 1,167,886 572,598 89,573,324

1 2 3 4 5 6 7 8 9

(a) Leasehold land Site preperations Factory Building Plant & Machinery Furniture & Fixture Airconditioner Lab. Equipment Cars Office Equipment TOTAL

As at 31-12-04 (k) 7,572,110 8,176,427 2,121,198 70,863,561 61,573 148,200 2,015,968 1,358,221 548,707 92,865,965

Previous Year

159,719,498

53,280

939,089 158,833,689
Previous Year Rs

52,393,536

13,929,029

354,841

65,967,724

92,865,965

As at December 31, 2005 Rs SCHEDULE C : CURRENT ASSETS, LOANS & ADVANCES CURRENT ASSETS INVENTORIES (as taken, valued and certified by the management) Raw Materials (valued at cost) .......... Spares (valued at cost) ....................... SUNDRY DEBTORS (Unsecured considered good) Outstanding for more than six months Others ................................................... CASH AND BANK BALANCES Cash in hand ....................................... Balance with Scheduled Bank in Fixed Deposits ..................................... Balance with Scheduled Bank in Current Account ...................................

For the Previous Year Ended Year December 31, December 31, 2005 2004 Rs. Lakhs Rs. Lakhs SCHEDULE 2: PAYMENTS TO & PROVISIONS FOR EMPLOYEES Salaries & Wages ............................................ Contribution to Provident Fund/ESIC ............ Staff Welfare Expenses ..................................

1,615,820 1,021,429 2,637,249 6,531,661 22,173,119 28,704,780 75,976 18,164,655 6,974 18,247,605 49,589,634

2,047,000 913,742 2,960,742 1,588,560 36,702,369 38,290,929 85,974 15,000,000 6,974 15,092,948 56,344,619

6,758,613 314,977 651,154 7,724,744

6,937,140 352,083 576,765 7,865,988

LOANS AND ADVANCES (unsecured considered good) Advances recoverable in cash or in kind or for value to be received ................. Deposits ............................................... Tax deducted at source ...................... SCHEDULE D : CURRENT LIABILITIES Sundry Creditors ........................... Accrued liabilities .......................... Bank Overdraft ............................... Advances from customers ............

1,488,747 1,866,950 2,734,289 6,089,986

1,630,539 2,466,950 2,653,113 6,750,602

12,978,960 9,796,315 6,108,978 66,574 28,950,827

7,830,433 10,623,954 8,461,650 454,804 27,370,841

SCHEDULE 3: OTHER EXPENSES Consumption of store/spares ......................... Insurance ......................................................... Power & Fuel ................................................... Travelling Conveyance & Car Expenses ....... Telephone Expenses ...................................... Security Expenses ........................................... Repairs to Building .......................................... Repairs to Plant & Machinery ........................ Rent .................................................................. Legal & Professional charges ........................ Deferred Revenue Expenses written off ....... Sales Commission ........................................... Sub Contracts/Hire charges ........................... Entertainment & Business Promotion ............ Rates & Taxes ................................................. Sales Tax ......................................................... Loss on sale / discard of Fixed Assets ......... Miscellaneous Expenses ................................ Bad debts .........................................................

4,710,412 470,941 16,554,183 930,885 469,424 230,096 80,835 844,688 1,886,936 478,012 328,419 7,764,327 18,824 1,127,711 5,949,065 61,735 1,537,885 1,603,431 45,047,809

3,981,316 604,622 15,102,100 1,039,071 618,794 275,200 102,572 948,829 4,112,440 415,870 488,493 445,778 7,195,430 74,338 1,423,503 18,813,978 489,248 1,085,171 1,788,917 59,005,670

183

SCHEDULES FORMING PART OF THE BALANCE SHEET

SCHEDULE E 1) ACCOUNTING POLICIES: a) b) Basis of Accounting: The Financial Statements are prepared on accrual basis and in accordance with the historical cost convention. Fixed Assets: Fixed Assets are stated at cost of acquisition or construction including incidental expenditure incurred upto the date of commissioning less accumulated depreciation. Depreciation: Depreciation has been provided on straight line method as per the rates prescribed under schedule XIV of the Companies Act 1956, except in following cases, where different rates of depreciation have been applied: Name of the Assets Depreciation Rate Applied % 1.67 14.29 5.00 14.29 10.00 10.00 Depreciation Rate As per Schedule XIV % 1.63 1.63 4.75 11.31 4.75/11.31 4.75

6)

Related Party Transactions : a) b) Related Party where Control Exists (Holding Company) The Associated Cement Companies Ltd (became holding company w.e.f. 14.12.2005) Transaction during the period (From 14.12.2005) Purchase of goods Rs. 4,500/Sale of goods Rs. 208,326/Closing balances: Creditor Rs. 103,950/Debtor Rs. 215,728/-

c)

c)

7)

As the Company does not have distinguishable business segments, and is engaged only in the business of Ready Mixed Concrete business, the requirement to give segment reporting as per Accounting Standard on Segment Reporting is not applicable. Earning per share (EPS) is calculated as under Year Ended December 31, 2005 Rs. a) Numerator Net Loss (After Tax) Add: Prior Period Income Total (Loss) Denominator No. of equity shares outstanding (Opening & Closing numbers are same) Nominal Value of shares Earning per share 1,22,88,228 19,66,240 1,42,54,468

8)

1) 2) 3) 4) 5) 6)

Site Preparation/Foundation (Dronagiri) Site Preparation (Deonar) Batching Plants Mixers/Front-end Loaders Boom pump mounted on motor lorry Static pump

Year Ended December 31, 2004 Rs. 39,94,893 3,85,877 43,80,770

b)

Notes: 1) In the opinion of the management, substantial expenditure incurred at Dronagiri site in concretising the site/foundation work is part of the building (other than the Factory Buildings) and will last the lease period of 60 years of the land and is being accordingly depreciated. Civil costs, plant erection costs, trial run costs and other pre-operative expense incurred at Mankhurd site have been fully depreciated on expiry of lease period of the land during this year. Site Preparation Expenses at Deonar Site are being depreciated over the balance lease period of the site. Management has certified that the plants of the company have worked single shift during the year. ii) c) d) 9)

1,58,83,526 Rs.10 (0.90)

1,58,83,526 Rs.10 (0.28)

Additional information pursuant to the provisions of paragraphs 3, 4C, 4D of Part II of Schedule VI to the Companies Act, 1956: i) Auditors Remuneration: (including service tax) As Auditors Tax Audit Fees for Tax Matters Certification Work Audit Expenses 2005 132,240 27,550 27,550 27,550 4,288

2)

3) 4) d) e)

2004 132,240 27,550 25,000 3,410

Leasehold Land: The costs incurred in acquiring the leasehold land at Dronagiri are being amortised over the lease period i.e. 60 years. Stock: Stocks of Raw Materials and stores and spares have been valued at cost. Management has certified that there are no stocks of finished goods, and work -inprogress at the year end. Revenue Recognition: In appropriate circumstances, revenue (income) is recognised when no significant uncertainty as to determination or realisation exists. Revenue on account of internal consumption of the finished product is adjusted from the cost of materials consumed. Contingent Liabilities: These, if any, are disclosed in the Notes on Accounts. Provision is made in the accounts in respect of those contingencies which are likely to materialise into liabilities after the year end till the date of finalisation of accounts and which have material effect on the position stated in the Balance Sheet. Expenditure During Construction: All the pre-operative expenditure incurred upto the date of commissioning of the plant are capitalised on the basis of efforts involved in bringing the respective assets to their present location and condition as estimated by the management and relied upon by the auditors. Development Expenses: All expenses incurred for locating new sites/expansion proposals, which have been aborted are written off in the same year. iii)

f)

During the year there was no expenditure or income in foreign exchange. There was also no import or export during the period. Year ended Year ended December 31, 2005 December 31, 2004 Quantity Rs. Quantity Rs. Installed Capacity (As certified by the Not management)Ready Mixed Not Concrete (M) 460,000 Applicable 460,000 Applicable Not Applicable

iv)

g)

h)

i) 2)

Production Ready Mixed Concrete (M) v) Sales/Service Ready Mixed Concrete (M) vi) Purchase of Ready Mixed Concrete (M) vii) Raw Materials Consumption Cement /Flyash/Slag(MT) Sand (Brass) Aggregate (Brass) Others Less: Utilised for internal consumption

61,260

85,951

Not Applicable

67,122 161941,387 5,862 24,113 9,480 18,530 119,00,689 568,69,750 188,57,573 206,05,154 51,14,008 1014,46,485 20,91,165 993,55,320

86,386 21,75,12,145 435 10,20,352

33,949 7,92,21,961 14,418 2,82,39,908 23,333 2,66,01,867 65,24,497 14,05,88,233 20,427 14,05,67,806

NOTES ON ACCOUNTS: 1) 2) 3) Previous years figures have been regrouped wherever considered necessary. No accrual has been done for deferred tax asset on account of substantial brought forward tax losses in view of uncertainty about sufficient future taxable income. Investment represents 6 years National Saving Certificate of Rs.10,000/- taken in the name of the former managing director of the company and lodged with sales tax authorities. As certified by the management, there are no outstanding dues to small-scale industries for more than one month for amount exceeding Rs. 100,000/-. In the opinion of the management, Current Assets, Loans and Advances have value on realisation in the ordinary course of business, at least equal to the amount at which they are stated.

4) 5)

(Note: Sales tax set off has been adjusted on pro-rata basis from the consumption of cement, sand and aggregates.) viii) The entire consumption of raw materials is indigenous. The break up of consumption of stores and spare parts is given below: Stores/spares consumption Year ended Year ended December 31, 2005 December 31, 2004 Rs. % Rs. % Imported 1,76,205 3.75 1,812 0.05 Indigenous 45,34,207 96.25 39,79,504 99.95 47,10,412 100

39,81,316

100

184

CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2005

For the year ended December 31, 2005 (Amount in Rs.) A. Cash flow from operating activities 1. Net Profit / ( Loss ) before Tax and Exceptional Items ....................... Adjustments for : 2. Depreciation ............................................................................................ 3. Loss on Sale/Discard/Loss Fixed Assetts - Net ................................... 4. Interest Income from Bank ..................................................................... 5. Interest Expense ..................................................................................... 6. Interest on Income Tax Refund ............................................................. 7. Miscellaneous Expenditure written off ................................................... Operating profit before working capital changes .......................................... Adjustments for : 8. Trade receivables ................................................................................... 9. Inventories ............................................................................................... 10. Other receivables ................................................................................... 11. Trade payables ....................................................................................... Cash generated from operations ................................................................... 12. Direct Taxes - payments less refund including interest ....................... 13. Fringe Benefit Taxes - Paid ................................................................... Net Cash flow from operating activities ......................................................... B. Cash flow from investing activities14. Purchase of Fixed Assets ...................................................................... 15. Sale of Fixed Assets .............................................................................. 16. Interest Received .................................................................................... Net cash used in investing activities ............................................................. C. Cash flow from financing activities17. Interest Paid ............................................................................................ Net cash used in financing activities- ............................................................ Net increase/(decrease) in cash and cash equivalents ............................... (12,196,068) 12,998,726 1,257 (678,310) 69,408 (60,192) 134,821 9,586,149 323,493 741,792 1,544,734 12,330,989 (20,984) (56,908) 12,253,097 (9,713,342) 6,000 678,310 (9,029,032) (69,408) (69,408) 3,154,657

Previous Year (Amount in Rs.) (3,994,893) 13,929,029 489,248 (459,246) 12,735 (4,419) 488,493 10,460,947 (15,321,206) (660,587) (417,357) 10,580,298 4,642,095 (1,205,154) 3,436,941 (53,280) 95,000 459,246 500,966 (12,735) (12,735) 3,925,172

Cash and cash equivalents - Opening Balance .................................................................................. 15,092,948 11,167,776 - Closing Balance ................................................................................... 18,247,605 15,092,948 Notes : 1 All figures in brackets are outflow 2 Direct Taxes paid are treated as arising from Operating Activities & are not bifurcated between Investing / Financing activities. 3 Cash and Cash Equivalent is Cash and Bank Balances as per Balance Sheet.

Per our report attached For M.M. Chaturvedi & Co. Chartered Accountants M.M. Chaturvedi Partner Membership No. 31118 Mumbai : January 20, 2006

For and on behalf of the Board, Beat Malacarne Director A. K. Jain Director

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Additional information Pursuant to Part IV of Schedule VI to the Companies Act, 1956 Balance Sheet Abstract and Companys General Business Profile
I. REGISTRATION DETAILS Registration No. Balance Sheet Date II. 1 0 4 4 7 0 3 1 Date 1 2 Month 2 0 0 5 Year Rights Issue N I L State Code 1 1

CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousands) Public Issue N Bonus Issue N I L I L

Private Placement N I L

III.

POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands) Total Liabilities Total Assets 1 8 7 7 8 6 1 8 7 7 8 6 SOURCES OF FUNDS Paid-up Capital 1 5 8 8 3 5 Secured Loans N I L Reserves & Surplus N I L

Unsecured Loans N I L

APPLICATION OF FUNDS Net Fixed Assets 8 9 5 7 3 Net Current Assets 2 6 7 2 8 Accumulated Losses 4 2 5 2 3 IV. PERFORMANCE OF COMPANY (Amounts in Rs. Thousands) Turnover 1 6 4 9 0 1 Profit/(Loss) Before Tax ( 1 2 1 9 6 )

Investments 1 0 Misc. Expenditure -

Total Expenditure 1 7 7 0 9 7 Profit/(Loss) After Tax ( 1 2 2 8 8 )

Earning per Share (in Rs.) ( V. . 9 0 )

Dividend Rate (%) N I L

GENERIC NAME OF THREE PRINCIPAL PRODUCTS / SERVICES OF COMPANY (AS PER MONETARY TERMS) Item Code No. (ITC Code) Product Description R E A D Y M I X E D 3 8 2 4 . 2 0

C O N C R E T E

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