Prakash Industries

The Directors present the 27th Annual Report together with the
 Audited. Statement of Accounts of the Company for the year ended 31st
 March, 2008.
 
 FINANCIAL RESULTS
 
                                              (Rs. in Lacs)
                                 For the year ended  For the year ended
                                   31st March, 2008    31st March, 2007
 
 Sales and other income                 1,42,329.84        1,05,077.25
 Profit before Interest,
 
 Depreciation & Tax                       30,028.55          20,255.11
 
 Depreciation                              4,767.85           4,590.64
 
 Financial Expenses                        4,145.76           2,575.30
 
 Expenses Amortised                          258.43             258.43
 
                                          20,856.51          12,830.74
 
 Exceptional items                          (940.31)           2445.10
 
 Profit before tax                        19,916.20          15,275.84
 
 Provision for Taxes                          44.03           1,996.77
 
 Profit after tax                         19,872.17          13,279.06
 
 Balance brought forward                  23,923.74          11,013.30
  
                                          43,795.91          24,292,36 
 
 Transitional Provision for
 Employees Benifits                          (62.36)                 -
 
                                          43,733.55          24,292.36
 
 Transfer to General Reserve              30,000.00                  -
 
 Transfer to Preference Capital
 redemption reserve                          231.38             368.62
 
 Transfer to Debenture
 redemption reserve                        3,457.67                  -
 
 Carried over to next year                10,044.50          23,923.74
 
 PERFORMANCE
 
 During the year under review, the Company has achieved sales revenue of
 Rs.1423 crores as against Rs.1051 crores in the previous year thereby
 registering a growth of approx .355 over the previous year. The profit
 before depreciation and interest amount Rs.300 crores as against Rs.203
 crores in the previous year showing froth 48-. After providing for
 interest, depreciation and tax, the net profit of the company (after
 exceptional items) increased substantially to Rs.199 cores during me
 ear under review from Rs.153 crores in the previous year registering a
 growth of 30%.
 
 OPERATIONAL REVIEW
 
 Your Directors are pleased to inform you that the Company has achieved
 a record sales revenue of Rs.1423 crores during the year, The
 production levels in the entire chain of integrated operations of the
 Company were also the highest achieved so far. As a result of various
 steps taken in the past years the Company is now fully integrated and
 is consuming 100% of its steel production in house for manufacture of
 high value added products. As a result of appreciable improvement in
 capacity utilization together with improvement in the realization, the
 Company has been able to maximize its operating margins.
 
 The only concern, which still continues is the unprecedented increase
 in the raw material prices particularly iron ore. The efforts of the
 Company in this direction have finally achieved success with the grant
 of rights over an iron ore mine in Distt. Kabirdham in the State of
 Chhattisgarh having rich iron ore deposits. In addition the Company has
 also got rights over an iron ore mine in Sundergarh Distt. of Orissa
 State. The Company is taking steps to obtain various clearances from
 the State/Central Government with respect to the above mines to make
 them operational by the beginning of next financial year. Your
 Directors are confident that the Company will be largely insulated from
 the vagaries of iron ore supplies by the next financial year.
 
 The Rigid PVC Pipe Division continued with good performance and has
 recorded its highest ever production in the current financial year. The
 unit commands an excellent brand value for its product and has a strong
 presence in Northern India.  The Company is increasing the capacity of
 the unit and also adding further value added products. As a result the
 division is expected to further improve the performance in the years to
 come. Since the Companys core business is steel and power, it was
 considered advisable and in the interest of the Company to focus on
 these sectors only. In view of this the Worsted Woolen Yarn unit of the
 Company is being sold off.
 
 Projects
 
 The Company has already completed expansion in its Structural Rolling
 Mill and has doubled the capacity. With this the Company is now one of
 the largest producer of structural steel in the country. The Wire Rod
 Mill set up by the Company has performed exceedingly well and the
 product quality is comparable with international standards. The Company
 has further taken up an ambitious expansion plan of doubling its steel
 making capacities in its entire chain of operations viz. Sponge iron,
 Pig iron, Power and Finished Steel Segment so that the Company
 continues to be fully integrated. The estimated investment in all these
 projects is likely to be over Rs.1000 crores which is proposed to be
 funded fully from the internal accruals of the Company in the coming
 years.
 
 With the growing importance of power sector in the country, the Company
 has taken several steps to become a major player in this field too. The
 Company has signed two different MoUs with Chhattisgarh State
 Government to set up power plants of 1325 MW. In addition the Company
 has signed MoLI with Madhya Pradesh State Government to set up a power
 plant of 1400 MW in the State.  The Company is now taking various
 effective steps like procurement of land, entering into arrangements
 for evacuation and sale of power, obtaining environment clearences and
 ensuring long term coal supplies for these projects.
 
 With the operations of captive coal mines, other value addition
 measures and modernization and expansion in capacities, the financial
 performance of the Company is expected to further register substantial
 improvement during the current year.
 
 ENVIRONMENT AND SOCIAL RESPONSIBILITY
 
 Company has always believed in adopting environment friendly technology
 based on CDM (Clean Development Mechanism). Installing Waste Heat
 Recovery Boilers and Energy Efficiency improvement projects are few of
 the steps taken by the Company in this direction. Considering their
 importance a separate department headed by a senior officer has been
 created to look after the pollution related matters and funds earmarked
 for this purpose. An effective Environment Management System (EMS) is
 also in place in the Company. A Water Treatment plant for reuse of
 waste water has been set up. The Company has also installed a Rain
 Water Harvesting System. The efforts made by the Company towards
 harnessing the environment have been recognized by various agencies,
 which is reflected in the Green Tech Safety Award 2007 and Chhattisgarh
 Paryavaran Puraskar - 2007 conferred on the Company.
 
 As a conscious corporate entity, your Company is taking active interest
 in social welfare of the community. The Company is rendering assistance
 for growth and development of the people in the surrounding areas of
 the plants of the Company.  The Company has adopted over 750 villages
 and has set up a number of coaching centres in those villages to imbibe
 knowledge in young children and develop their personalities.
 
 Towards the uplftment of society and inculcate the spirit of education,
 the Company is providing financial assistance to a number of primary
 schools around the plant of the Company and also actively participating
 in the development of an Engineering college in Korba. Also the Company
 is organizing Mid Day Meal Programme for providing food to poor
 school children in and around Delhi through a non-profit organization.
 
 In order to create greenry the Company has planted saplings and trees
 in and around factory area. The Company continues to maintain ISO 9002,
 ISO 14001 and OHSAS - 18000 Status.
 
 ISSUE OF EQUITY SHARES & CONVERTIBLE WARRANTS
 
 During the year Company has issued 1,21,35,990 warrants convertible
 into equity shares of Rs.10 each @ Rs. 68.61 each on 14* September,
 2007 & 55,55,556 warrants convertible into equity shares of Rs.10 each
 @ Rs.80.00 each on 27* September, 2007 and 1,12,50,000 warrants
 convertible into equity shares of Rs.10 each @ Rs.190 each on 3rd
 January, 2008. The Company has also issued 62,50,000 Equity Shares of
 Rs.10 each @ Rs.190 each on 3rd January, 2008.  During the year Company
 has received the amount of the calls due with regard to the re-issued
 forfeited 1,09,10,808 equity shares of Rs.10 each and now they stand
 fully paid.
 
 DIRECTORS
 
 In accordance with the provisions of section 256 of the Companies Act,
 1956, Dr. Ram K. Vepa and Shri Manish Bahl are liable to retire by
 rotation at the ensuing Annual General Meeting. Both are eligible for
 re-appointment and offer themselves for re-appointment.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirement under Section 217(2AA) of the Companies
 Act, 1956 with respect to Directors Responsibility Statement, it is
 hereby confirmed:
 
 i) That in the preparation of the annual accounts for the financial
 year ended 31st March, 2008, the applicable accounting standards have
 been followed along with proper explanation relating to material
 departures;
 
 ii) That the Directors have selected such accounting policies and
 applied them consistently and made judgements and estimates that were
 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 or loss of the Company for the year under review;
 
 iii) That the Directors 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) That the Directors have prepared the accounts for the financial
 year ended 31st March, 2008 on a going concern basis.
 
 AUDITORS
 
 M/s Chaturvedi and Partners, Auditors of the Company, retire at the
 forth coming Annual General Meeting, and being eligible, offer
 themselves for reappointment.  The Company has received a Certificate
 from the Auditors to the effect that their re-appointment, if made,
 would be within the limit prescribed under Section 224 (1B) of the
 Companies Act, 1956. As regards Auditors observations in their Report,
 the relevant notes on the accounts are self-explanatory.
 
 PARTICULARS OF EMPLOYEES
 
 As required by the provisions of section 217(2A) of the Companies Act,
 1956, read with the Companies (Particulars of Employees) Rules, 1975,
 as amended, the names and other particulars of employees are set out in
 the annexure to the Directors report.
 
 CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION
 AND FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 As required under Section 217 (1) (e) of the Companies Act, 1956 read
 with the Companies (Disclosure of Particulars in the report of the
 Board of Directors) Rules, 1988, a statement showing the information
 relating to the Conservation of Energy, Research and Development,
 Technology Absorption and Foreign Exchange Earnings and Outgo is
 enclosed and should be treated as a part of this report.
 
 CORPORATE GOVERNANCE
 
 The significance of Corporate Governance has always been recognized by
 the Company. A separate report on Corporate Governance and Management
 discussion and Analyses alongwith a certificate from the Practising
 Company Secretary regarding compliance of the conditions of Corporate
 Governance as stipulated under Clause 49 of the Listing Agreement with
 Stock Exchanges is attached and forms part of this Report.
 
 ACKNOWLEDGEMENT
 
 Your Directors take this opportunity to offer their sincere thanks to
 the various departments of Central and State Governments, Financial
 Institutions, Banks, Customers and Suppliers for their continued
 valuable assistance and support.
 
 Your Directors also wish to place on record their sincere appreciation
 of the dedicated efforts by officers, staff and workers of the Company
 at all levels.
 
                              By Order of the Board
 
 Place : New Delhi            V. P. Agarwal
 Dated : 26th July, 2008      Chairman & Managing Director