Your directors have pleasure in presenting the 11th Annual Report
 together with the Audited Accounts for the year ended on 31st March,
 2004 and Auditors Report thereon.
 
 FINANCIAL RESULTS
 
                                                            (Rs.in Lacs)
 PARTICULARS                                     Current        Previous
                                                    Year            Year
 
 Operating and other income                      4195.95         5161.87
 
 Profit/(Loss) before financial expenses,
 depreciation and non cash expenditure            871.32          220.35
 
 Financial expenses                               253.05          460.75
 
 Depreciation and non cash expenditure            349.74          357.45
 
 Profit/(Loss) before tax                         268.53        (597.85)
 
 Provision for tax :
 
 - Income tax                                      20.65
 
 - Deferred tax (assets)/liabilities                   -         (33.88)
 
 Profit/(Loss) after tax for appropriations       247.88        (563.97)
 
 Appropriations:
 
 Income tax for earlier years                          -            4.53
 
 Transfer to/(from) general reserve               352.19        (148.86)
 
 Transfer from deferred tax liability           (523.95)
 
 Balance transfer from/(to) balance sheet         419.64        (419.64)
 
                                                  247.88        (563.97)
 
 SEGMENT REPORTING
 
 During the year under review the Companys activities can be classified
 under two segments namely Sugar and Steel as per the Accounting
 Standard A-17 issued by the Institute of Chartered Accountants of
 lndia. The working performance of each segment is stated below :
 
 PERFORMANCE REVIEW SUGAR
 
 During the year under review, the production of sugar was lower at
 25458 tons as against 26341 tons with a sugar recovery of 10.36%
 against 10.32% in the previous year. The Company has sold 23251 tons of
 sugar as against 30950 tons in the previous year. This segment has
 total turnover of Rs.3483.,06 lacs as against Rs.4767.44 lacs in the
 previous year,
 
 STEEL
 
 During the year under review, the company has produced 3542 MTs of
 Steel Ingots as against 3435 MTs in the previous year. This segment
 has total turnover of Rs.759.82 lacs as against Rs.414.70 lacs in the
 previous year.
 
 OVERALL PERFORMANCE
 
 Your company has performed reasonably well during the year under
 review. The company has total income of Rs. 4195.95 lacs as against Rs.
 5161.87 lacs in the previous year. the profit before financial
 expenses, depreciation & non cash expenditure was Rs. 871.32 lacs as
 against Rs. 220.35 lacs in the previous year. The company has earned
 net profit of Rs. 247.88 lacs against net loss of Rs. 563.97 lacs in
 the previous year.
 
 Your directors have planned for next year to achieve higher capacity
 utilisation by ensuring availability of sugarcane during the entire
 season and preventive maintenance to avoid breakdown during the ensuing
 sugarcane crushing season. Your company is making all efforts for
 sugarcane development In the cane area allotted to it by providing
 various facilities such as supply of fertilizers and pesticides at
 subsidised rates, supply of disease free seed and free testing of soil
 etc. to the farmers of the area in order to ensure the availability of
 sufficient quantity of good quality sugarcane during ensuing sugarcane
 crushing season. The company has undertaken necessary maintenance
 programme so that the plant is fully equipped to crush higher quantity
 of sugarcane in the ensuing sugarcane crushing season and to prevent
 the breakdown during the season. Barring unforseen circumstances your
 directors hope to achieve better results in the coming years too.
 
 DIVIDEND
 
 To retain resources for future growth of the company, your directors do
 not recommend dividend for the year ended on 31st March, 2004.
 
 PUBLIC DEPOSITS
 
 During the year the company has not accepted any deposit within the
 meaning of section 58-A of the Companies Act, 1956 and the rules made
 thereunder.
 
 DIRECTORS
 
 Sh. Jawahar Lal Oswal, Dr. (Mrs.) U.K. Bal and Dr. O.P. Sahni,
 Directors of the Company shall retire by rotation at the forthcoming
 Annual General Meeting and being eligible offer themselves for
 re-appointment.
 
 Dr. R.S. Kanwar has resigned from the directorship of the company. The
 Board place on record its appreciation for the valuable services
 rendered by Dr. R. S. Kanwar. The Board of Directors has also co-opted
 Prof. Kanwar Sain Main! as an Additional director of the company w.e.f.
 30th July, 2004 He holds the office upto the date of forthcoming Annual
 General Meeting at which his appointment will be regularised subject to
 consent of the share holders.
 
 AUDIT COMMITTEE
 
 The company has constituted an audit committee pursuant to the
 provisions of section 292A of the Companies Act, 1956 and Clause 49 of
 the Listing Agreement. The audit committee consist of Sh. Dinesh Gogna
 and Dr. (Mrs.) H. K. Bal as members and Dr. 0. P. Sahni is the
 Chairman of the committee.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 The Board of Directors of your company state :
 
 i) that in the preparation of the annual accounts, the applicable
 accounting standard had been followed alongwith proper explanation
 relating to material departures;
 
 ii) that the directors had selected such accounting policies and
 applied them consistently and made judgements and estimates that are
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the company at the end of the financial year and of the
 profit/loss of the company for that period ;
 
 iii) that the directors had taken proper and sufficient care 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) that the directors had prepared the annual accounts on a going
 concern basis.
 
 AUDITORS AND AUDITORS REPORT
 
 M/s. Raj Gupta & Co., Chartered Accountants, Auditor of the company
 retire at the conclusion of the forthcoming Annual General Meeting and
 being eligible offer themselves for re-appointment. The company has
 received a certificate from the Auditors as required under Section 224
 (1-B) of the Companies Act, 1956 to the effect that their appointment,
 if made, would be within the limits specified in the said section. The
 Auditors Report-on the accounts of the company is self explanatory.
 Your directors wish to mention that inspite of Note No. (C) (iii) of
 Annexure XVII, the auditors has mentioned in their report regarding
 non-compliance of Accounting Standard (AS-22) Accounting for taxes on
 income issued by the institute of Chartered Accountants of India. The
 Board is of the view that in case such asset/liability is provided in
 the books of accounts it will show a notional asset/liability in the
 Balance Sheet and with a view to comply with the requirement of
 accounting standard the amount of deferred tax assets/liability have
 been quantified and shown in the notes on accounts.
 
 COST AUDITORS
 
 M/s. Ramanath lyer and Co., Cost Accountants. New Delhi have been
 appointed as the Cost Auditor in respect of Sugar for the year
 2004-2005 and their report will be submitted to the Department of
 Company Affairs, Ministry of Finance,
 
 Government of India in accordance with the requirements of law.
 
 LISTING
 
 The Companys equity shares shall continue to be listed at The Stock
 Exchange, Mumbai (BSE). The company has applied to Ahmedabad Stock
 Exchange (ASE), Delhi Stock Exchange (DSE) and Ludhiana Stock Exchange
 (LSE) for delisting of equity shares under SEBI (Delisting of
 Securities) Guidelines, 2003. ASE has delisted the equity shares of the
 company with effect from 8th July, 2004. The consent from DSE and LSE
 regarding delisting of equity shares is awaited. The Company has paid
 listing fee upto the financial year 2004-2005.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 The information in accordance with the provisions of Section 217 (1)
 (e) of the Companies Act, 1956 read with Companies (Disclosure of
 Particulars in the Report of Board of Directors) Rules, 1988 regarding
 conservation of energy, technology absorption and foreign exchange
 earnings & outgo is given in Annexure-I to this report.
 
 CORPORATE GOVERNANCE REPORT
 
 Your Company continues to follow the principles of good corporate
 governance. The Corporate Governance Report alongwith Auditors
 Certificate regarding compliance of the conditions of corporate
 governance as stipulated in clause 49 of the Listing Agreement with the
 stock exchanges is attached herewith.
 
 PARTICULARS OF EMPLOYEES
 
 None of the employees of the company is covered under section 217 (2A)
 of the Companies Act, 1956 read with Companies (Particulars of
 Employees) Rules, 1975.
 
 INDUSTRIAL RELATIONS
 
 Industrial relations throughout the year continued to be very cordial
 and satisfactory.
 
 ACKNOWLEDGEMENT
 
 Your directors place on record their appreciation for the co-operation
 of the workers and staff members of the Company at all levels and also
 of the cane growers of the area, but for whose timely sowing and supply
 of cane the Company could not have achieved the production results.
 They also acknowledge the assistance and co-operation extended to the
 company by the banks, financial institutions and shareholders.
 
                                          For and on behalf of the Board
 Place : Ludhiana                                      JAWAHAR LAL OSWAL
 Dated : 30th July, 2004                                      (Chairman)
 
 ANNEXURE - 1 TO DIRECTORS REPORT
 
 Information as per Section 217 (1) (e) read with Companies (Disclosure
 of Particulars in the Reportjof Board of Directors) Rules, 1988 and
 forming part of the Directors Report for the year ended 31st March,
 2004.
 
 (A) CONSERVATION OF ENERGY:
 
 a) As regards energy conservation your Company is giving high priority
 to conservation of energy since very beginning, with the result of
 figures of steam consumption and power consumption per ton cane
 crushing per hour have been achieving quite appreciable. Some of the
 significant measure taken are:
 
 i) In order to increase profitability and minimize energy conservation
 installed D.C. motors which are highly energy efficient in place of
 conventional steam turbine for driving the mills and boilers are
 maintained. High pressure boilers, double effect pre-evaporator system
 along with vapour line juice heater and plate type heat exchangers were
 also maintained.
 
 ii) On account of above measure and their efficient working the
 considerable saving of bagasse and energy saving have been achieved
 during the financial year.
 
 b) The data achieved with regards to conservation of energy is
 furnished below:
 
 (B) RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION:
 
 Your Company has been carrying out research & development in the
 following specific areas:
 
 1) The Company provides certified cane seed to the farmers of different
 varieties.
 
 2) The Company also provided moist hot air treated disease free cane
 seed to the cane growers to achieve higher yield of sugarcane crop.
 
 3) The Company launched integrated pest management programme through
 field staff to control various insect pests for getting higher yield as
 well as sugar recovery.
 
 4) For adoption of new technology on sugarcane cultivation, company
 provided cane planters for planting of sugarcane to reduce the cost of
 cultivation.
 
 5) The Company has set up a R&D Centre consisting three laboratories
 viz Tissue Culture, Bio Control and Soil testing by investing Rs. 9.00
 Lacs from company resources and utilisation of a grant of Rs. 30.00
 Lacs sanctioned by Punjab Government. This Centre has also a farm of
 10.0 hectare for conducting varietal trials with new promising
 varieties.
 
 Owing to above efforts, higher yield of disease free cane will be
 available to the Company, resulting in higher return to cane growers.
 
 FUTURE PLANS
 
 i) Tissue culture laboratory of R & D Centre is being strengthened to
 produce maximum plantlets of new high sugar promising varieties can be
 micropropagated to cover the maximum sugarcane area.
 
 ii) All India varietal trials with new promising varieties developed by
 various sugarcane Research Institutions/Universities in the country
 will be conducted to identify new varieties for the company area.
 
 iii) Continuous research for high yield, disease free variety of cane
 by adopting measures stated above.
 
 Expenditure incurred on research and development was Rs. 4.70 Lacs
 (previous year Rs. 1.18 Lacs). The Company has not imported any
 technology.
 
 (C) FOREIGN EXCHANGE EARNINGS AND OUTGO:
 
 PARTICULARS                                       Current      Previous
                                                      Year          Year
 
 (a) Earnings (Rs. In Lacs)                            Nil           Nil
 
 (b) Outgo (Rs. In Lacs)                            144.11        199.79
 
                                          For and on behalf of the Board
 Place : Ludhiana                                      JAWAHAR LAL OSWAL
 Dated : 30th July, 2004                                      (Chairman)