DIVIDEND

The Board of Directors at its meeting held today has recommended dividend on Ordinary Shares as under :

31st March, 2008 (Rs.) 31st March, 2007 (Rs.) On 4,57,43,318 Ordinary Shares of Rs. 10 each @ Rs. 5.50 per Share (Previous year Rs. 4.00 per Share as interim dividend, which was final dividend) 25,15,88,249 18,29,73,272

AUDIT REPORT

Note nos. 3.16 and 4(f) referred to by the Auditors in its Audit Report are self - explanatory and require no further explanation.

GENERAL REVIEW

The continued effective cost control measures, better treasury management, increase in capacities and improved realizations have resulted in current satisfactory results :

» With continued buoyancy in cement market due to sustained activities in construction and infrastructure development, the Cement Sections contributed handsomely to the bottom line of the annual result, particularly taking advantage of increased production facilities.

» Increased capacity utilization, satisfactory cost cutting measures, improved operating efficiencies     coupled with better price realizations enabled the Tyre Section to contribute significantly to the annual     profit.

» Inspite of adverse market competition, particularly due to cheap imports, the Rayon Section turned     around with positive contribution to annual profit.

» Inspite of better inventory management, the bottom line of the Spun Pipes Section remained in the red.

» Due to improvement in market conditions, the realizations were better resulting in  higher capacity     utilization at Hindusthan Heavy Chemicals Section.

CEMENT SECTIONS

Vasavadatta Cement

Performance of Vasavadatta Cement has improved considerably due to increase in production as well as continued buoyancy in the Cement Industry. As mentioned in our last report, the commercial production from Unit - III started from March 2007.

Production figures of the section are as under :

(Qty in MT)

Production 2007 - 08 2006 - 07 Clinker 31,11,506 21,69,558 Cement  32,78,309 24,83,452

The above figures include production of 10,88,416 MT of Clinker and 9,23,621 MT of Cement from Unit III. Production of Unit III would have been higher but for an unexpected breakdown in June 2007 resulting in production loss of about 2 lac MT of clinker. However it is heartening to note that Unit - I & Unit - II have achieved their highest ever production capacity utilization this year. Production of blended cement ("Birla Shakti") has risen by 37% from 11.73 lac MT to 16.02 lac MT. Consistent high quality of the product has enabled this Section to improve its market share.