Our Directors present the Annual Report and the Audited Accounts for
 the year ended 30th September 2005.
 
                                                 2004 - 05     2003 - 04
                                               (Rs. crore)   (Rs. crore)
 
 Gross Turnover                                     277.66        205.06
 
 Profit/(Loss) before depreciation and taxes         26.94       (19.96)
 
 Depreciation on fixed assets                         6.42          6.67
 
 Profit/(Loss) before tax                            20.52       (26.63)
 Provision for tax:
 
 Deferred tax (net)                                   0.00       (31.51)
 
 Fringe benefit tax                                   0.06          0.00
 
 Profit/(Loss) after tax                             20.46       (58.14)
 
 Add: Balance brought forward
 from the previous year                           (173.39)      (115.25)
 
 Balance to be carried forward                    (152.93)      (173.39)
 
 Your Directors do not recommend any dividend for the financial year
 under review.
 
 PERFORMANCE
 
 Sales, production and profitability
 
 Sales and other income for the financial year under review were Rs.
 243.60 crore as against Rs. 181.69 crore for the previous year which
 showed an increase of 34%.
 
 Clinker production at the Companys Jafrabad Works was 14.07 lakh
 metric tonnes as against 13.45 lakh metric tonnes during 2003-04.
 Cement and clinker dispatches during 2004-05 were higher at 15.23 lakh
 metric tonnes, which showed an increase of 16% over 13.18 lakh metric
 tonnes achieved during the previous year.
 
 The Company reported a Profit before tax of Rs. 20.52 crore for the
 year 2004-05 as against a loss of Rs. 26.63 crore for the previous
 year.
 
 Review of operations
 
 The Company continued its ongoing efforts to improve the efficiency of
 its plants through better utilization of available facilities.
 
 Market scenario
 
 The cement industry saw an encouraging growth in demand during the
 year. Demand continued to be good both in Gujarat and Maharashtra
 States. The prices showed signs of improvement during the second half
 of the current year. However, in certain markets, the prices remained
 low for most part of the current year.
 
 Future demand for cement would depend upon Governments investment plans
 in various infrastructure projects as envisaged in the Budget.
 
 CAPITAL EXPENDITURE
 
 As at 30th September 2005, the gross fixed assets stood at Rs. 202.66
 crore and the net fixed assets at Rs. 80.78 crore.
 
 REFERENCE TO BIFR
 
 Since the accumulated losses as at end September 2003 eroded the entire
 net worth of the Company, a reference was made to the Board for
 Industrial and Financial Reconstruction (BIFR) as per the provisions of
 Section 15 (1) of the Sick Industrial Companies (Special Provisions)
 Act, 1985. The application has been acknowledged by BIFR and a case has
 been registered. BIFR is yet to appoint an Operating Agency to proceed
 further in the matter.
 
 DEPOSITS
 
 The Company has not invited/renewed deposits from the
 public/shareholders in accordance with section 58A of the Companies
 Act, 1956.  No deposits due to be paid have remained unpaid.
 
 AUDITORS REPORT
 
 The Auditors Report to the Shareholders does not contain any
 qualifications.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 The Directors confirm that:
 
 (i) in preparation of the Annual Accounts, the applicable Accounting
 Standards have been followed along with proper explanation relating to
 material departures, if any.
 
 (ii) they have selected the 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 at the end of the financial year under review and for the
 profit and loss of the Company for that period.
 
 (iii) they have 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) they have prepared the Annual Accounts on a going concern basis.
 
 INDUSTRIAL RELATIONS
 
 Industrial relations continued to be cordial during the year.
 
 DIRECTORS
 
 In accordance with the provisions of the Companies Act, 1956 and the
 Articles of Association of the Company, Shri Sanjeev Bafna retires from
 the Board of Directors by rotation and is eligible for re-appointment.
 
 COST AUDIT
 
 The Central Government vide its Order No. 52/295/CAB-88 (CLB) had
 directed that a Cost Audit be carried out every financial year in
 respect of clinker and cement. The Company will make an application to
 the Central Government for appointment of Shri V. V. Deodhar, Cost
 Accountant as Cost Auditors of the Company for the financial year
 October 2005 to September 2006.
 
 AUDITORS
 
 M/s. Haribhakti & Co., Chartered Accountants, who are the Auditors of
 the Company, hold office until the conclusion of the forthcoming Annual
 General Meeting and are recommended for re-appointment.
 
 DISCLOSURE OF PARTICULARS
 
 Information as per the Companies (Disclosure of particulars in the
 report of Board of Directors) Rules, 1988 relating to conservation of
 energy, technology absorption, foreign exchange earnings and outgo is
 given in Annexure A forming part of this report.
 
 PARTICULAR OF EMPLOYEES
 
 There were no employees covered under the provisions of Section 217
 (2A) of the Companies Act, 1956 read with the Companies (Particulars of
 Employees) rules, 1975.
 
 ACKNOWLEDGEMENT
 
 The Directors wish to place on record their appreciation for the
 co-operation and assistance received by the Company from the concerned
 Ministries of Government of India, various Departments of Government of
 Gujarat and Maharashtra, Banks and Financial Institutions. The
 Directors also wish to thank all the employees of the Company for their
 active participation and co-operation.
 
 The Directors wish to record their special thanks to the esteemed
 shareholders for reposing their confidence in the Company.
 
                                         For and on behalf of the Board,
                                                      V. M. Muralidharan
                                                             K. C. Birla
                                                           Sanjeev Bafna
                                                               Directors
 Place : Mumbai
 Dated : 8th November, 2005
 
 Annexure A to the Directors Report
 
 INFORMATION AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE
 REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE
 DIRECTORS REPORT FOR THE YEAR ENDED 30th SEPTEMBER 2005.
 
 A) CONSERVATION OF ENERGY
 
 a) Energy conservation measures taken:
 
 * Improvement in Plant Run factor and Reliability.
 
 * Process optim.ization.
 
 b) Additional investments and proposals, if any, being implemented for
 reduction of consumption of energy:
 
 * Installation of Belt Bucket Elevator in Kiln feed.
 
 c) Impact of measures at (a) and (b) above for reduction of energy
 consumption and consequent impact on the cost of production of goods:
 
 * Reduction in specific power consumption.
 
 * Reduction in heat consumption.
 
 d) Total energy consumption and energy consumption per unit of
 production as per FORM - A.
 
 FORM - A (RULE 2)
 
                                              Current Year Previous Year
                                                   2004-05       2003-04
 A POWER AND FUEL CONSUMPTION
 
 1 Electricity:
 
 a) Purchased
 
 Unit 000 kWh                                       70464         50420
 
 Total amount Rs. lakhs                               3787          2811
 
 Rate/Unit Rs.                                        5.37          5.58
 
 b) Own Generation
 Through Diesel
 Generator
 
 Unit000 kWh                                       493.51        543.74
 Units (kWh) per
 
 Ltr. of fuel oil                                     4.14          3.68
 
 Cost/Unit Rs.                                        3.98          3.61
 
 2 Coal - For process in Cement Plants
 
 Quantity Tonnes                                    181725        189199
 
 Total cost Rs. lakhs                                 6160          4659
 
 Average rate Rs./Tonne                               3390          2462
 
 3 Furnace Oil(FO/HFO)
 
 Quantity K. Ltrs                                    11929         11994
 
 Total amount Rs. lakhs                               1355           918
 
 Average rate Rs./K. Ltrs                            11359          7650
 
 4 Light Diesel Oil (LDO)
 
 Quantity K. Ltrs                                      344          2657
 
 Total amount Rs. lakhs                                 86           482
 
 Average rate Rs./K. Ltrs                            24997         18139
 
 5 High Speed
 Diesel Oil (HSD)
 
 Quantity K. Ltrs                                      591           464
 
 Total amount Rs. lakhs                                171           109
 
 Average rate Rs./K. Ltrs                            28926         23465
 
                                              Current Year Previous Year
                                                   2004-05       2003-04
 B CONSUMPTION PER UNIT OF PRODUCTION
 
 Product: Cement
 
 Electricity kWh                                     93.63         91.89
 
 Coal Tonne                                           0.13          0.74
 
 # excludes non production power consumption
 
 FORM - B (RULE 2)
 
 Form for disclosure of particulars with respect to absorption.
 
 A. RESEARCH AND DEVELOPMENT(R&D)
 
 1. Specific areas in which R&D carried out by the Company: NA
 
 2. Benefits derived as a result of the above R&D: NA
 
 3. Future plan of action: NA
 
 4. Expenditure on R&D:
 
                                                             (Rs. lakhs)
                                            Current Year   Previous Year
                                               2004 - 05       2003 - 04
 
 a) Capital expenditure                                -               -
 
 b) Recurring expenditure                              -               -
 
 c) Total expenditure                                  -               -
 
 d) Total R&D expenditure as % of turnover             -               -
 
 B. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATIONS
 
 1. Efforts in brief, made towards technology absorption, adaptation and
 innovation:
 
 * Imparting training to personnel in various, manufacturing processes.
 
 2. Benefits derived as a result of the above efforts:
 
 * Cost reduction.
 
 3. Information regarding technology imported during the last 5 years:
 
 a) Technology imported                                         No
 
 b) Year of import                                              NA
 
 c) Has technology been fully absorbed                          NA
 
 d) If not fully absorbed, areas where
 this has not taken place,reasons
 therefore and future plans of action.                          NA
 
 C. FOREIGN EXCHANGE EARNINGS AND OUTGO
 
                                                             (Rs. lakhs)
                                              Current Year Previous Year
                                                 2004 - 05     2003 - 04
 
 Foreign exchange earned                               320           Nil
 
 Foreign exchange used                                 238           248