Graphite India

The Directors have pleasure in presenting their Thirty Third Annual
 Report together with the audited statement of accounts of the Company
 for the year ended 31st March, 2008.
 
 FINANCIAL RESULTS
                                              2007-08         2006-07
 Particulars                                  Graphite India Limited
 
 Sales / Income from Operations - (Gross)     1155.87          900.01
 
 Profit for the year after 
 charging all expenses but
 before providing interest, 
 depreciation, tax and
 non-recurring income                          276.19          203.79
 
 Less : Interest                                35.70           32.15
 
 Profit before depreciation, tax 
 and non-recurring income                      240.49          171.64
 
 Less : Depreciation                            33.50           29.93
 
 Profit before taxation and 
 non-recurring income                          206.99          141.71
 
 Add: Non-Recurring Income                       -              96.24
 
 Profit before taxation                        206.99          237.95
 
 Less : Provision for taxation                  73.34           44.08
 
 Profit for the year                           133.65          193.87
 
 Add :Balance brought forward 
 from the previous year                         41.46           22.38
 
                                               175.11          216.25 
 Which has been appropriated as under :
 
 Transfer to Debenture Redemption Reserve       11.25           24.10
 
 Interim Dividend                                 -             29.38
 
 Proposed Dividend on Equity Shares             45.33           14.69
 
 Dividend Tax                                    7.70            6.62
 
 Transfer to General Reserve                   100.00          100.00
 
 Reserve Fund                                     -               - 
 
 Balance carried forward                        10.83           41.46
 
                                               175.11          216.25
 
 
                   Rs. in Crore
 2007-08           2006-07
 Graphite India Limited
      Consolidated
 
 1388.36               1170.94
 
 307.00                 259.73
 
 42.90                   37.05
 
 264.10                 222.68
 
 41.03                   37.71
 
 223.07                 184.97
 
 -                       96.24
 
 223.07                 281.21
 
  80.73                  58.85
 
 142.34                 222.36
 
  89.66                  42.20
 
 232.00                 264.56
 
  11.25                  24.10
 
 -                       29.38
 
  45.33                  14.69
 
   7.70                   6.62
 
 100.00                 100.00
 
   0.05                   0.11
 
  67.67                  89.66
 
 232.00                 264.56
 
 BUSINESS REVIEW
 
 India Inc has performed well this financial year too and Indian
 companies continue to shine in the global market. The recent years
 emphasize the high growth trajectory.
 
 With GDP at market prices exceeding 8 per cent, every year since
 2003-04, the prospects seem good. According to the Economic Survey
 2007-08 the projected GDP growth of 8.7% for FY-2007-08 is fully in
 line with this growth trend. Macroeconomic fundamentals inspire
 investor confidence and the investment climate is one of optimism.
 
 Economic growth continued to be driven mainly by growth in industrial
 and services sectors. Ably supported by the strong domestic demand,
 though the domestic investment and saving rates point towards a sharp
 economic growth in the coming years, some element of cyclical
 fluctuations may interject due to the retarding trends noticeable in
 the world economy. The growth target for the Eleventh Five Year Plan
 (2007-12) has been set at a challenging 9%. The emergence of India as a
 preferred global hub for auto component industry has provided a
 definite impetus to the economy.
 
 The International Monetary Fund (IMF) views the rising of rupee
 vis-a-vis the USD (during the financial year) as a reflection of the
 strength of the Indian economy, which is amongst the worlds fastest
 growing economies, today.  The rupee appreciation against the US dollar
 however has adversely affected Indias export revenues.
 
 According to the IMF, the world economy grew by 4.9% last year (2007)
 and is projected to grow by 3.7% in 2008 and 3.8%) in 2009 (a reduction
 from earlier projections), following slow economic growth in the US.
 
 Indias significant export growth in recent years was on account of a
 combination of a host of favourable external developments and domestic
 policy initiatives. Favourable business environment and recovery in
 world trade aided the growth of Indian exports.
 
 Worldwide, manufacturers have been witnessing a growth in global
 demand. Thus, in the backdrop of yet another favourable global business
 environment, the year was a good year. All the three segments recorded
 year-on-year growth. The Company achieved its highest ever growth in
 its turnover. This was facilitated by increased volumes in all segments
 following stabilization of expanded capacities, de-bottlenecking and
 improved product mix. Domestic turnover increased by 22.51% y-o-y.
 Export business had a good year growing by 33.18%. The growth in export
 turnover (as compared with that of the previous year) has predominantly
 come from increased volumes of Graphite Electrodes sold with full
 stabilization of new/additional production capacities installed earlier
 and supported by higher realisation. The turnover in rupee terms would
 have been significantly higher, but for the impact of the rupee
 appreciation.
 
 There has been a major increase in the prices of raw materials, and
 other costs of production following steep increase in the price of
 crude. It seems, there is no respite as crude oil price continues to
 touch new heights with the passing of every day.  Despite the steep
 increase in the cost of inputs, the Company has so far been able to
 maintain its performance through cost saving measures and better
 realisations.
 
 The USD 40 Million raised by way of Foreign Currency Convertible Bonds
 in October 2005 has been judiciously used to fund the on going capital
 expenditure requirements of several new projects across different
 product segments.
 
 Due to a combination of operational factors, including less than
 expected efficiency and productivity, the performance of the German
 operations was less than planned. However, these causes have since been
 addressed and issues have been resolved.
 
 SHARE CAPITAL
 
 41,88,576 Equity Shares Rs.2/- each pari passu in all respects with the
 existing equity shares of the Company, were issued and allotted to
 FCCB-holders who had exercised their conversion option. Accordingly,
 the total number of equity shares issued by the Company has gone up to
 15,10,84,801 from 14,68,96,225 equity shares.
 
 With this, the issued and paid-up equity capital of the Company has
 gone up to Rs.30,21,69,602 comprising 15,10,84,801 Equity Shares of
 Rs.2/- each.
 
 DIVIDEND
 
 The Dkectors are pleased to recommend the payment of Dividend at the
 rate of 150% on 15,10,84,801 Equity Shares of Rs.2/- each for the
 financial year ended March 31, 2008.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 (i) Industrys structure and developments
 
 A. GRAPHITE ELECTRODE BUSINESS
 
 Graphite Electrode is used in electric arc furnace (EAF) based steel
 mills for conducting current and is a consumable item for the steel
 industry. The estimated world capacity for manufacture of Electrode is
 over 1 million metric ton.  The principal manufacturers are based in
 USA, South America, Europe, Japan, India and China.
 
 Graphite Electrode demand is primarily linked with the global
 production of steel in electric arc furnaces. The overall output of
 steel remained high in 2007 too. The International Iron and Steel
 Institute (1ISI) has announced that world crude steel output reached
 1,343.5 million metric tons in 2007. This is an increase of 7.5% on
 2006. The total represents the highest level of crude steel output in
 history and it is the fifth consecutive year that world crude steel
 production grew by more than 7%. China continued to remain the driving
 force behind the strong world production figures. Other BRIC countries
 namely Brazil, Russia and India also maintained a relatively high
 growth rate, with India and Brazil recording 7.3% and 9.3% increases
 respectively. Steel Production has significantly increased in the
 Middle East which is of particular importance as the Company could
 increase sale of Electrodes substantially in this region.
 
 Between the two basic routes for steel production - (1) Blast Furnace
 (BF); and (2) Electric Arc Furnace (EAF) — the EAF route of steel
 production has increased over the last two decades from 26%) to about
 32% at the global level. The share of EAF is expected to grow further
 in years to come due to characteristics of (a) environment friendly
 production process; (b) low capital cost; and (c) faster project
 commissioning time. Fresh investments in EAF steel mills are
 characterized by large furnace capacity requiring large diameter UHP
 Electrodes. It is expected that the demand for UHP Electrodes will
 correspondingly grow.
 
 The domestic steel industry is poised for major expansion, and
 expectation of substantial consumption growth has stimulated huge
 expansion plans. The national steel policy has set a higher target of
 150 million metric tons steel production by 2015 and major steel
 producers in India are planning to expand their capacities in tune with
 the National Steel Policy formulations. With the massive infrastructure
 development plans calling for huge requirement of steel, the growing
 demand for steel will be met by the new steel capacities coming on
 stream in Eastern Region.  In turn the demand for Graphite Electrodes
 will also increase and the Company is well positioned to leverage this
 growth cycle.
 
 The cost of all major raw materials and supplementary materials, as
 also fuel and energy, has gone up significantly.  By efficiency /
 productivity improvements and through higher realization, the Company
 is confident of addressing the challenge of high costs and maintaining
 operational performance.
 
 Production and sale of Graphite Electrodes, and other Speciality
 Miscellaneous Graphite Products were higher during the financial year.
 
 In Speciality Graphite products, a modern new machine shop has been set
 up in India to supply speciality products in a cost efficient structure
 to improve the synergy between the two operations.
 
 The steep appreciation of the rupee with respect to the US Dollar has
 hit all exporting industries. The Company too has been affected. With a
 view to mitigate the effect of the rupee appreciation, the GOI
 increased the export incentive rate (DEPB) to 8%, but within a few
 months for reasons best known to the Government, the DEPB rate was
 reduced to 6% for a handful of industries including the Graphite
 Industry. The inclusion of fuel on the negative list in the Value Added
 Tax Act (VAT) added to the list of woes of the industry.
 
 The investigation initiated by the European Commission (EC) based on
 allegation by the community industry of a possible circumvention of
 countervailing duty imposed earlier, has since been terminated by the
 EC after due process of scrutiny and verification, by a Regulation
 dated 19 October, 2007.
 
 Despite these challenges, the Indian Graphite Electrode industry has
 performed well in exports by remaining keenly competitive through
 several strategic measures, such as upgradation of technology,
 expansion of capacity brininging in economies of scale and recording
 its credibility by delivering world class quality products, promptly,
 and equally well along with an efficient follow through of excellent
 after-sales-service.
 
 Barring unforeseen circumstances, Graphite Electrode production and
 sale is expected to rise in the current year too on the back of the
 projected growth in the steel industry.
 
 Coke Division
 
 The Coke Division in Barauni, engaged in the manufacture of Calcined
 Petroleum Coke (CPC), Electrode Paste and Tamping Paste is one of the
 many backward integration initiatives of the Company. Two grades of CPC
 - aluminium and graphite - are produced here. CPC is a raw material
 used in the manufacture of regular and high power grade Graphite
 Electrodes. This is also a critical raw material for fine grained high
 density graphite used in speciality graphite products and Impervious
 Graphite Equipment.  Electrode Paste is used in ferro alloy smelters
 and Tamping Paste is used as a lining material in steel and aluminium
 smelters.
 
 This unit continues to be affected by erratic supply of Raw Petroleum
 coke. Capacity utilization was higher as compared to the previous year
 as the previous year was afflicted by shortage of Raw Petroleum Coke.
 Production and sale of Calcined Petroleum coke and Carbon Paste have
 increased.  Price of raw material continues to rise
 
 unabated, and on introduction of quota system, the availability has
 also suffered.
 
 B.  GRAPHITE EQUIPMENT BUSINESS
 
 The Impervious Graphite Equipment (IGE) Division is engaged in
 manufacturing and marketing of heat exchangers, ejectors, pumps and
 turnkey plants at its Nashik Works.  The Graphite Equipment has wide
 application in corrosive chemicals industries such as pharmaceutical,
 agro-chemical, chloro alkali and fertilizer industries.
 
 In the domestic market, the Equipment Division has maintained its
 leadership status by virtue of its competitive pricing, timely delivery
 and increasing ability to deliver large capacity heat exchangers.
 
 In the international market, the volumes have grown through the
 appointment of a network of qualified agents to address the growing
 demand in the niche markets. Participation in industrial exhibitions,
 direct technical discussion with OEM customers and further strategic
 measures were implemented to enhance the presence in the global market
 
 The regulatory requirement of export licences and the delay in
 obtaining the same, has to some extent affected the delivery lead times
 resulting in delayed deliveries and consequent loss of credibility.
 
 C.  GRP PIPES & TANKS BUSINESS
 
 Glass Reinforced Plastic (GRP) Pipes and Tanks Division is engaged in
 manufacturing and marketing of GRP Pipes and Tanks. The Company
 converts users of conventional pipes to GRP through re-engineering,
 strategic marketing, superior product quality, competitive pricing and
 value- added services. The entry of private sector in the retailing of
 Indias petroleum products has greatly enhanced the opportunities for
 GRP Tanks. The Company is confident of a good growth for its GRP
 division.
 
 Following good demand, this Division experienced some capacity crisis
 during the year, leading to delays in execution of some orders. To
 overcome this in future, a beginning has been made to improve the
 production planning systems and perhaps at a later date, enhance the
 production capacity.
 
 D.  POWER
 
 Power is a major input in the manufacturing of Graphite Electrode. As
 part of its cost reduction initiatives, besides ensuring adequate
 availability of quality power ; the Company has made significant
 investment in this segment.
 
 The Company has an installed capacity of 33 MW of power generation
 through Hydel and Multi-fuel routes and has also invested in an
 exclusive transmission line to get the benefit of low cost power in one
 of its plants. In the medium term, the Company has plans to increase
 its competitive edge through further investments in conventional and
 non-conventional routes of power generation.
 
 As part of the ongoing process of reducing the cost of electrical
 energy, the Company has entered into a long term agreement with a power
 producer in the private sector to obtain power at lower cost as
 compared to the grid cost
 
 (ii) Opportunities and threats
 
 Modernisation-cum-Expansion-cum-Conservation (of inputs like power and
 raw materials) projects are important prerequisites for delivering
 year-on-year growth in production and sales. Growth momentum in
 production has been sustained over a long period, driven by increased
 demand in domestic and export markets. The top line growth so essential
 for maintaining profitability, particularly in a period of rising input
 RM costs, and other operations costs, has been realized to some extent
 through an aggressive marketing strategy.
 
 It is this philosophy that has helped the Company grow year-on-year in
 all its Divisions, over the years. To a great extent it is the
 increased demand captured by penetrating into new markets, enlisting
 new customers and increasing the market share, that has contributed to
 this steady growth.
 
 In this respect, the Company is alive to the potential opportunities
 through both organic and inorganic growth.  The Company continues to
 look for M&A opportunities.
 
 The Company is well equipped and geared to face these usual business
 challenges and is confident of achieving its business goals.
 
 The management remains focused on the key areas of cost effectiveness,
 excellence in product quality, and customer service, operational
 productivity and efficiency.
 
 (iii) Segment-wise Performance
 
 TOTAL SALES OF THE COMPANY
 
 The Company achieved a record turnover of Rs.1121 crore during the year
 under review as against Rs. 877 crore in the previous year representing
 an increase of 27.81%.
 
 All product Divisions of the Company recorded increased turnover.
 
 Aggregate Export Sales of all divisions were Rs.665 crore during the
 year under review as against Rs. 499 crore in the previous year,
 representing an increase of 33.18%.
 
 (a) Graphite and Carbon Division
 
 Production of Graphite Electrodes, Anodes and Other Miscellaneous
 Carbon and Graphite Products during the year under review was 74,414 MT
 against 67,576 MT in the previous year.
 
 Production of Calcined Petroleum Coke during the year was 36,746 MT as
 against 29,563 MT in the previous year.
 
 The cost of raw materials, supplementary materials and energy has risen
 very steeply. However, the Company is confident of meeting these
 challenges through cost reduction achieved by improvement in
 productivity, efficiency, optimal product mix of high end products and
 through improved realizarion.
 
 (b) Power Division
 
 Generation from hydel power plant — 18 MW at Chunchanakatte (CCKT) in
 the State of Karnataka - was higher as compared to the previous year
 due to good monsoon.
 
 Total power generated was 133 million units from Hydel Power Plants and
 Multi Fuel Power Generating Sets during the period under review, as
 against 118 million units in the previous year.
 
 (c) Others
 
 Production in the Impervious Graphite Equipment (IGE) Division and
 spares at 817 MT was higher as compared to that of 810 MT in the
 previous year.
 
 The growth of organic, chloro alkali and fertilizer industries
 contributed to the growth in domestic market and the same trend is
 expected to continue in 2008-09.
 
 The Gkss Reinforced Plastic Pipes (GRP) Division produced 6,121 MT as
 against 5,759 MT in the previous year. This Division has improved its
 production by 6.29% year-on-year.
 
 (iv) Outlook
 
 The outlook of the global steel industry appears to be good for the
 steelmakers. Global steel production is projected to grow moderately in
 2008 by about 4 percent versus the average gain of 8 percent since
 2001. The BRIC countries which accounted for about 41% percent of
 global steel demand in 2006 will again be leading the growth with an
 expected increase of 12.8%) for 2007 and 11.1 percent in 2008. The
 domestic demand is currently growing at 12.5% per cent with supply
 lagging at five per cent.  On the back of this development, the Company
 can look forward to drive sustainable Graphite Electrode business in FY
 2008-09.
 
 Following good economic growth in the country with GDP growth projected
 at 8.7%, the prospects of Graphite Equipment business in the domestic
 market continues to look good. The potential for growth in the export
 market is also promising.
 
 The demand for GRP Pipes is growing annually at the rate of 20%-30% and
 preference has shifted to GRP over other MOCs for corrosive
 applications and due to the longer gestation period of MS & DI Pipes.
 This Division has the advantage of captive supply of Resin, besides
 favourable locational advantage.
 
 (v) Risks and Concerns
 
 It is undeniable that business projections have an inherent element of
 uncertainty of unknown factors like sudden reversal of positive trends
 leading to economic slowdown resulting in possible negative growth for
 steel, automotive and infrastructure industries which will adversely
 impact prospects of our industry. Declining prices will affect
 operating margins.
 
 Disproportionate increase in taxes and other levies imposed by the
 Central Government and State Governments from time to time, especially
 on essential inputs, increases the cost of manufacture and reduces the
 profit margins.
 
 Any economic slowdown can adversely impact the demand- supply dynamics
 and profitability and our Company too is vulnerable to these changes.
 
 Exports to specific regions may get severely affected by trade barriers
 in the form of crippling import duties or anti dumping duties or
 countervailing duties as the case may be and our export volumes to
 specific markets could get affected by such protectionist measures.
 
 The main raw materials are petroleum based or coal based.  The
 increasing price of crude and coal and its direct impact on its
 derivative materials like Needle Coke, Pitch, Furnace Oil, Met Coke,
 etc. all tend to rise Unison. This is inflating the input cost in a
 major way.
 
 Foreign exchange rate volatility impacts the Companys business
 prospects directly through its foreign currency debt portfolio. Export
 turnover constitutes major part of the total turnover. An appreciating
 trend in INR may substantially impact the earnings of the Company.
 
 The trend in interest rate is moving upwards, after a brief regime of
 soft interest rates. The increase in the interest rate coupled with the
 increased requirement of working capital, may impact margins.
 
 However, the Companys operations have historically shown remarkable
 resilience to such fluctuations in demand. When the domestic demand was
 flat and even negative, the Company was well prepared to focus on
 exports, and retain its eminent status as a steady player over several
 years. This is a testimony to the Companys ability to weather any
 storm, and stay afloat and swim ashore.
 
 (vi) Internal control systems and their adequacy
 
 The Company has proper and adequate system of internal controls.
 Internal audit is conducted by outside auditing firms at all locations
 of the Company. The Internal audit reports are reviewed by the top
 management and adequate remedial measures are taken and in time.
 
 (vii) Discussion on financial performance with respect to operational
 performance
 
 The healthy environment and good performance of customer industries
 like steel, chemicals, infrastructure, etc. enabled 100% capacity
 utilization in all product lines.
 
 Sales/Income from Operations recorded Rs. 1156 crore, registering a 28%
 growth over the previous year figure of Rs. 900 crore. As a result, the
 liquidity position during the year improved significantly, supported by
 timely receipts, higher volumes and higher realization.
 
 Due to this, internal accruals improved and borrowings declined to Rs.
 473 crore during the year as compared to Rs. 582 crore in the previous
 year.
 
 On the negative side, it was the continuous increase in crude oil
 prices that resulted in huge increase in raw material prices and energy
 costs.
 
 Since the increase in cost of raw materials and energy was universal in
 its impact, the Company was able to secure a better realization in the
 sale price of electrodes and other products and thus was able to
 largely mitigate the effect of huge increase in input costs.
 
 The Companys long-term debt rating has been upgraded to LAA
 (pronounced L double A) from LAA- (pronounced L double A minus), by
 ICRA. This rating indicates high- credit-quality. The short-term debt
 programme rating has been reaffirmed as A1+ (pronounced A One plus).
 This rating indicates highest-credit-quality.
 
 There is an increase in staff cost due to the revision in salary of
 management staff, wage revision agreements signed with labour unions
 and fresh recruitments to support the growing activity levels in the
 respective plants as also to enable the seamless transition of work
 responsibilities as an integral part of succession planning at various
 levels in the organization.
 
 All commitments relating to repayment of Loan installments were
 honoured in time.
 
 The Company is a net foreign exchange earner.
 
 (viii) Material developments in human resources I industrial relations
 front, including number of people employed Several HRD programmes being
 relentlessly pursued in all locations, aiming at creating a truly
 Learning organization, have significantly raised the level of
 excellence amongst the cross section of employees.  These enabling
 programmes commensurate with the desired managerial competencies in
 terms of global standards, will eventually help in developing the
 skills of the fast-track employees. In due course, they will also be
 groomed to assume higher roles and responsibilities for catering to the
 growing needs of the Company. The strategy also includes enabling the
 Succession Planning being put in place as well as overcoming the
 prevailing crisis of non-availability of qualified and experienced
 manpower across the Company.
 
 On the ERP front, SAP has been established in the Company with a
 purpose. The implementation of PP, PM, QA & CO modules of SAP for the
 electrode plants which was targeted in the second phase will go live in
 early next year. The SAP team has been strengthened and in-house
 expertise has been fully achieved to support and maintain the SAP
 system.
 
 The total no. of people employed in the organization was 2961 as on
 31.03.2008.
 
 Employee relations are good and cordial at all locations of the
 Company. The Board wishes to place on record its appreciation of the
 contribution made by all the employees in ensuring high levels of
 performance and growth.
 
 Cautionary Note
 
 Certain statements in the Management Discussion and Analysis section
 may be more than optimistic, and are as perceived in the present
 situation and are stated as required by relevant prescriptions. Many
 factors may affect the actual results, which could be different from
 what the Directors contemplated in respect of future performance and
 outlook.
 
 Additional Disclosures
 
 In line with the requirements of the Listing Agreements and the
 Accounting Standards of the Institute of Chartered Accountants of
 India, your Company has made additional disclosures in respect of
 consolidated financial statements, related party transactions and
 segmental reporting.
 
 Research & Development
 
 The main thrust in the R&D activities during the year continued to be
 in the area of Carbon — carbon composites for Defence aircraft
 application. Emphasis was on scaling up of process equipment,
 introducing improvements in processing to increase productivity and
 upgradation of quality of carbon composites. Processing of carbon
 composites for space application was also initiated.
 
 New product and process technology upgradation also received greater
 importance in lieu of increased requirement in unexplored specialty
 applications of graphite.
 
 Public Deposits
 
 The Company has not accepted / renewed any fixed deposits during the
 past two years.
 
 Deposits amounting to Rs. 90,000 (previous year Rs. 97,000) due for
 repayment remained unclaimed.
 
 Subsidiary Companies
 
 Carbon Finance Limited is a wholly owned Indian Subsidiary.  Graphite
 International BV in The Netherlands and Carbon International Holdings
 NV in Netherlands Antilles are the wholly owned overseas subsidiaries
 of the Company.
 
 The overseas subsidiaries clocked a turnover of Euro 62.46 mn as
 compared with Euro 58.54 mn in the previous period. The profit before
 tax of these overseas subsidiaries was Euro 4.95 mn and profit after
 tax was Euro 3.66 mn.
 
 The Company earned by way of Royalty Rs. 4.05 crore during the year and
 Rs. 1.26 crore by way of Dividend, as against Rs.3.80 crore and Rs.
 0.58 crore in the previous year, from overseas subsidiaries.
 
 The Company has obtained exemption from the provisions of Section
 212(1) of the Companies Act, 1956 relating to the attachment of the
 accounts, reports, statement in terms of Section 212(l)(e), etc. of its
 subsidiaries to its Accounts. All these subsidiaries are 100% wholly
 owned by the Company. In terms of the approval of the Ministry of
 Company Affairs, it is stated here that, the Annual Accounts of
 subsidiary companies and the related detailed information will be made
 available to the holding and subsidiary company investors seeking such
 information at any point of time. The annual report and accounts of the
 subsidiary companies will be kept for inspection at the Companys
 registered office along with that of the parent company.
 
 The Consolidated financial statement of the Company along with those of
 its subsidiaries prepared as per AS- 21 forms part of the Annual
 Report.
 
 Information pursuant to Section 217 of the Companies Act, 1956
 
 Information in accordance with clause (e) of sub-section (1) of Section
 217 of the Companies Act, 1956 read with Companies (Disclosure of
 Particulars in the Report of Board of Directors) Rules, 1988 and
 forming part of the Directors Report for the year ended 31st March,
 2008 is given in Annexure A.
 
 Particulars pursuant to Section 217(2A) of the Companies Act, 1956 read
 with the Companies (Particulars of Employees) Rules, 1975 and forming
 part of the Directors Report for the year ended 31st March, 2008 are
 given in Annexure B*.
 
 DIRECTORS
 
 Mr Sanjiv Goenka, Mr A V Lodha and Mr N S Damani, Directors retire by
 rotation at the ensuing Annual General Meeting and being eligible,
 offer themselves for reappointment.
 
 Mr N Venkataramani has been reappointed as the Whole- time Director of
 the Company, designated as Executive Director for a further period of
 one year with effect from 19 October, 2008.
 
 Recognition/Award
 
 This year too, the Company received for the fourth year in a row, the
 TOP EXPORTER AWARD (in the Graphite Electrodes panel) of CAPEXIL for
 its export performance during 2006-07; and Top Exporters award in the
 Large Enterprise category for 2005-06 of Eastern Region of EEPC. The
 Company enjoys the status of a Three Star Export House.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the provisions of Section 217(2AA) of the Companies Act,
 1956, the Directors state
 
 1.  that in the preparation of the Annual Accounts, the applicable
 accounting standards had been followed along with proper explanation
 relating to material departures.
 
 2.  that they have selected such accounting policies and applied them
 consistently and made judgments and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company as at March 31, 2008 and of the profit of the Company for
 the year ended March 31, 2008.
 
 3.  that they have taken proper and sufficient care for the maintenance
 of adequate accounting records in accordance with the provisions of the
 Act for safeguarding the assets of the Company and for preventing and
 detecting fraud and other irregularities; and
 
 4.  that they have prepared the annual accounts on a going concern
 basis.
 
 Corporate Governance Report
 
 A Report on Corporate Governance along with a Certificate of Compliance
 from the Auditors forms part of this Report.
 
 Auditors
 
 Price Waterhouse, Chartered Accountants, Auditors of the Company retire
 and are eligible for re-appointment.
 
 Acknowledgement
 
 Your directors place on record their appreciation of the assistance and
 support extended by all government authorities, financial institutions,
 banks, consultants, solicitors and shareholders of the Company. The
 directors express their appreciation of the dedicated and sincere
 services rendered by employees of the Company.
 
                                          On behalf of the Board
 
 Kolkata                                       K. K. Bangur
 Date :   12th May, 2008                           Chairman