Lanco Industries

The Directors take pleasure in presenting the 1 6th Annual Report and
 Audited Accounts of your Company lor the year ended 31st March, 2008.
 
 FINANCIAL RESULTS
 
                                       (Rs. in Lakhs)    (Rs. in Lakhs)
                                             2007-08            2006-07
 
 Sales & Other Income                       46458.84          36970.25
 Cross Profit                                5514.43           3321.61
 Depreciation                                1512.99           1156.89
 Profit Before Taxation                      4001.44           2164.74
 Less: Provision for Taxation 
 (Including Deferred Tax)                    1409.70            588.94
 Profit After Tax                            2591.74           1580.80
 Profit Brought Forward from Previous Year    858.92            837.09
 Prior Period Adjustment                     (55.46)                 -
 Balance Available for Appropriation         3395.20           2417.89 
 Appropriations are made as under:
 Debenture Redemption Reserve                 187.50             98.75
 General Reserve                             1500.00           1000.00
 Proposed Dividend                            397.64            397.64
 Dividend Tax                                  67.58             67.58 
 Balance Carried Forward to Next Year        1242.48            858.97
 
 DIVIDEND
 
 Your Directors recommend payment of dividend @ 10% on the equity shares
 of the Company for the year ended 31st March, 2008. If approved, the
 dividend will absorb Rs. 465.22 lakhs (including Rs. 67.58 lakhs
 towards dividend tax).
 
 REVIEW OF OPERATIONS
 
 During the year, the Company achieved gross sales of Rs. 494.72 Crs.,
 an increase of 20% over the previous year sales of Rs. 410.45 Crs. The
 Companys Profit After Tax for the year was Rs. 25.92 Crs as against
 Rs. 15.81 Crs. in the previous year.
 
 The Mini Blast Furnace (MBF) producing liquid metal mainly for Ductile
 Iron Pipe Plant had undergone a shutdown for a period of 19 days to
 repair refractory lining in the second quarter of the year under
 review. Despite, the production of MBF for the year was 1,48,677 MT
 compared with 1,38,958 MT in the previous year, an increase of 7%.
 
 Production of D.I. Pipes was also higher by 15% at 1,13,471 MT compared
 with 98,292 MT in the preceding year.
 
 The Company has successfully commissioned Stamp Charging Facility in
 Coke Oven Plant during the year which has enhanced operational
 efficiency.
 
 In March 2007, the Company had commissioned 12 MW Power Plant for
 making use of waste gas of Coke Oven Plant.  The plant has been
 synchronized with the grid and has successfully generated the power for
 captive use during the year under review.
 
 During the year 2006-07, the Company had arranged long-term funds of
 Rs. 1 1 0 Crs and the proceeds have been utilized towards capital
 expenditure, refinancing and augmentation of long-term funds for
 working capital. No additional long term funds were borrowed during the
 year under review.
 
 CURRENT YEARS PROSPECTS
 
 Demand for Dl Pipes continues to be positive, in view of the thrust
 given by the Government of India to create intrastate ture for drinking
 water across the country. However, the prices of key inputs like Iron
 Ore and Coal / Coke required by \ou Company are rising to unprecedented
 levels and it may not be feasible to pass on the entire1 impact of such
 significant increases in the cost of inputs.
 
 DIRECTORS
 
 Shri Uddhav Kejriwal resigned from the Board on 26th June 2007. Your
 Directors place on record their appreciation for the active
 participation and valuable services rendered to the Company by Shri
 Uddhav Kejriwal.
 
 Shri Sanjeev Churiwal resigned from the Board on 4th July, 2007. Your
 Directors place on record their appreciation for the active
 participation and valuable services rendered to the Company by Shri
 Sanjeev Churiwal Shri Suresh Chukkapalli resigned from the Board on 2nd
 August, 2007. Your Directors place on record their appreciation for the
 active participation and valuable services rendered to the Company by
 Shri Suresh Chukkapalli.
 
 Andhra Pradesh Industrial Development Corporation Limited (APIDC),
 Hyderabad nominated Shri P .Rajeswara Rao on the Board of Directors of
 the Company with effect from 24th July, 2007 in place of Shri
 M.Balarama Krishnaiah. You; Directors place on record their
 appreciation for the active participation and valuable services
 rendered to the Compam by Shri M.Balarama Krishnaiah.
 
 Shri Pradip Kumar Khaitan and Shri L.Sridhar retire by rotation at the
 ensuing Annual General Meeting and being eligible, offer themselves for
 re-appointment.
 
 CORPORATE GOVERNANCE
 
 The Corporate Governance report is set out as Annexure to this Report.
 
 MANAGEMENT DISCUSSION AND ANALYSIS
 
 Please refer to the management discussion and analysis section
 appearing elsewhere.
 
 PARTICULARS OF EMPLOYEES
 
 Board of Directors express its appreciation tor sincere efforts made by
 the employees of your Company at all levels during the year and their
 co-operation in maintaining cordial relations.
 
 The information required under Section 217(2A) of the Companies Act,
 1956 read with Companies (Particulars of Employees) Rules, 1975, as
 amended, forms part of this Report. However, the report and accounts
 are being sent to all the shareholders of the Company excluding the
 above information. Those shareholders, who desire to obtain these
 particulars, would be provided the same upon receiving such request.
 
 STATUTORY INFORMATION
 
 Information as per Companies (disclosure of particulars in the Report
 of Board of Directors) Rules, 1988 related to conservation of energy,
 technology absorption, foreign exchange earnings and outgo are given in
 Annexure-A attached hereto and forming part of this report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 The Board of Directors of the Company confirms:
 
 i) That in the preparation of annual accounts the applicable accounting
 standards have been followed and there has been no material departure.
 
 ii) That the selected accounting policies were applied consistently and
 the Directors 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 .31st March 2008 and of the profits of the Company
 for the year ended on that date.
 
 iii) That proper and sufficient care has been taken for the maintenance
 of adequate accounting records in accordance with the provision of the
 Companies Act, 1 956 tor safeguarding the assets of the Company and lor
 preventing and detecting fraud and other irregularities: and
 
 iv) That the annual accounts have been prepared on a going concern
 basis.
 
 AUDITORS
 
 The Auditors, M/s. K.R. Bapuji & Co., Chartered Accountants, retire at
 the conclusion of the forthcoming Annual General Meeting and being
 eligible, oiler themselves for re-appointment.
 
 ACKNOWLEDGEMENTS
 
 The Board of Directors thank the Customers, Shareholders, Investors,
 Government Authorities, Financial Institutions and Banks for their
 continued co-operation and support to your Company.
 
                            For and on behalf of the Board of Directors
 
 Place: Kolkata                              Pradip Kumar Khaitan
 Date : 28h April, 2008                             Chairman