Dear Shareholders
 
 During this year Sales has increased by over Rs 100 crores, Rs 38
 crores have been invested in fixed assets and Capital Work-in-Progress
 and about 15 acres of land is being acquired in Visakhapatnam for
 setting up the fifth plant of your Company.  Improvements in the
 Mehsana plant and Kolkata plant have increased installed capacity by
 about 48%. The Kolkata plant expansion for doubling its capacity is
 nearing completion. Large investments have been made in asset creation
 for future value addition while continuing to maintain its Debt
 free status.
 
 Share prices had reached an all-time high.
 
 Vesuvius India retained its leadership in the Indian refractory
 industry and continues its aggressive growth path, which, I am
 confident will provide improved prospects in the coming years.
 
 The Vesuvius Group continues to support your Company with latest
 technical and technological developments and export opportunities and
 it is with their support that the Kolkata plant expansion and venture
 with the new plant at Visakhapatnam has been possible.
 
 I thank you for your continued support to your Company.
 
 With my best wishes to all of you.
 
 Dr SK Gupta