UltraTech Cement Limited

BOARD OF DIRECTORS Executives

(as on 7th July, 2006)
Mr. Kumar Mangalam Birla, Chairman
Mrs. Rajashree Birla
Mr. O. P. Puranmalka Group Executive President &
Chief Marketing Officer
Mr. S. K. Maheshwari Group Executive President &
Chief Manufacturing Officer

Mr. R. C. Bhargava Mr. V. Shukla Chief People Officer

Mr. G. M. Dave

Mr. Y. M. Deosthalee
Cement Works
Mr. Y. P. Gupta
Mr. A. K. Jain Unit Head, Awarpur
(Maharashtra)
Dr. S. Misra
Mr. K. Y. P. Kulkarni Unit Head, Kovaya
Mr. V. T. Moorthy (Gujarat)
Mr. J. Kumar Unit Head, Hirmi
Mr. J. P. Nayak (Chhattisgarh)
Mr. A. K. Pillai Unit Head, Narmada Cement
Mr. S. Rajgopal
(Gujarat)
Mr. D. D. Rathi Mr. C. S. Reddy Unit Head, Tadipatri
(Andhra Pradesh)

Manager & CEO Corporate Finance Division

Mr. S. Misra Mr. J. Bajaj Joint President (Finance)
Mr. M. B. Agarwal Vice President (F&C)

Chief Financial Officer Auditors

Mr. K. C. Birla S. B. Billimoria & Co., Chartered Accountants, Mumbai
G. P. Kapadia & Co., Chartered Accountants, Mumbai

Company Secretary Solicitors

Mr. S. K. Chatterjee Amarchand & Mangaldas & Suresh A. Shroff & Co.,
Advocates & Solicitors, Mumbai
 CONTENTS

The Chairman’s Letter to Shareholders ............................................................................................................... 3

Management Discussion and Analysis .................................................................................................................. 8

Report on Corporate Governance ......................................................................................................................... 15

Shareholder Information ........................................................................................................................................ 24

Social Report .......................................................................................................................................................... 33

Environment Report .............................................................................................................................................. 35

Directors’ Report to the Shareholders .................................................................................................................. 37

Auditors’ Report ..................................................................................................................................................... 44

Balance Sheet ......................................................................................................................................................... 48

Profit and Loss Account ........................................................................................................................................ 49

Cash Flow Statement ............................................................................................................................................. 50

Schedules ................................................................................................................................................................. 51

Statement Relating to Subsidiary Companies ...................................................................................................... 69

Consolidated Financial Statements ......................................................................................................................... 70

Subsidiary Companies Reports and Accounts ...................................................................................................... 87

REGISTERED OFFICE: B Wing, Ahura Centre, 2 Floor, Mahakali Caves Road, Andheri (East), Mumbai 400 093
THE CHAIRMAN’S
LETTER TO
SHAREHOLDERS

Dear Fellow Shareholders,

India as a Nation has come of age. With a

great measure of pride, we see our country
rise up the ranks of the powers that be in
the global economy. We have grabbed the
world’s attention and imagination. For the
third consecutive year, our GDP has recorded
a near 8 per cent growth - among the highest
in the world. To sustain the current growth
rate and to push it closer to double-digit
levels year after year, the Government seems
committed to an aggressive agenda for
economic reforms. While economic reforms
provide a strong structural foundation for
future growth, these are undeniably
supported by substantive productivity
improvements and an overall positive
mindset. These developments at the macro
level portend well for your Company.

Your Company’s performance has been good.

While the turnover at Rs. 3,299 crores as

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against Rs. 2,607 crores reflects a 27% rise, its net profit at Rs. 230 crores, compared to
Rs. 3 crores has been indeed impressive. I am also pleased to inform you that Narmada
Cement Company Limited was amalgamated with your Company with effect from
1st October, 2005.

To improve productivity as also to address the issue of rising energy costs, your Company has
earmarked a capex of Rs. 1,424 crores which will be spent over the next three years. Of this
Rs. 844 crores is towards installation of captive power plants at your Company’s Units in
Gujarat and Chhattisgarh. Your Company will also invest in de-bottlenecking and cost
efficiencies. Improving efficiencies, leveraging logistics benefits, higher use of alternative
fuels and a thrust on value-added product mix, including blended cement will translate into
higher earnings for your Company as we go forward.

Your Company is pursuing Your Company is pursuing profitable growth through

profitable growth through
enhanced capital productivity,
improved plant performance,
customer focus, cost optimisation
and prudent financial
management. I believe all this
will have a salutary effect on your
Company’s future and we can all
look ahead to both, top-line and
bottom-line growth.
enhanced capital productivity, improved plant
performance, customer focus, cost optimisation and
prudent financial management. I believe all this will
have a salutary effect on your Company’s future and
we can all look ahead to both, top-line and bottom-
line growth.
The Government’s focus to infrastructure
development as well as the boom in the housing
sector augurs well for your Company.

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The overriding reason behind our success has been our strikingly sharper accent on people.
We look upon them as our core asset, much more critical than our physical assets or financial
assets. I value their contribution in building a
The overriding reason behind our
culture of meritocracy.
success has been our strikingly

The Aditya Birla Group: Building A Meritocracy sharper accent on people. We

look upon them as our core asset,
Our vision, as you are aware, is to be a premium
much more critical than our
global conglomerate, with a clear focus at each
physical assets or financial assets.
business level, and our vision is to deliver superior
I value their contribution in
value to all our stakeholders. Implicit
building a culture of meritocracy.
in our Vision Statement, is our global ambition,
which necessarily implies accelerated growth to reach global-sized capacities and services.
We are on course.

Meritocratic organizations are built on the strong foundation of values and not on the quick
sands of opportunism. For us, our values – Integrity, Commitment, Passion, Seamlessness
and Speed – reflect the soul of our organization. To develop a common indepth understanding
of what these values connote in our context, and how they should be our guiding light in the
business decisions we take as well as the manner in which we conduct ourselves, we rolled out
Values Workshops. In more than 373 Workshops, over 8,236 colleagues across management
cadre committed to ensure that these values become a part of their everyday life.

Talent Management and strengthening of the talent pool in building leadership across the
Group is a key priority. Employees identified as high-caliber management talent are put

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 Meritocratic organizations through our Development Assessment Centre.

are built on the strong foundation Here, the talent pool is assessed by an external

of values and not on the agency to validate our ratings on the potential of

quick sands of opportunism. the employee to scale up to a new responsibility

For us, our values – level.

Integrity, Commitment, Passion, Gyanodaya, our management learning institute,

Seamlessness and Speed – reflect
has repositioned itself to align more closely with
the soul of our organization.
business requirements. The focus is very clearly
on business and functional programmes, keeping
in view the competencies required at every career stage. More than 1,000 managers across the
Group have been through the portals of Gyanodaya this year.

The Gyanodaya Virtual Campus, which is our e-Learning Programme, has also increased its
reach manifold. As of today, we have 5,000 e-learners in our Group, with a course completion
rate of 88%, while the world benchmark hovers around 65%. For a large number of engineers
and CAs, we have tied up with Universitas 21 to provide an opportunity for these talented
people to do a full-time e-MBA. As of today, 46 employees have completed 165 courses in 11
subjects in the last 1 year. Soon enough, they will earn their MBA degree while continuing
on their jobs.

With a view to provide for systematic and structured processes for career growth, the job
analysis and evaluation process was started 4 years ago. While Managers from across businesses
have been involved at various stages of the process, more than 100 managers have been

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trained as job analysts and another 100 have been trained as job evaluators. This exercise
covered all management level jobs across India. Over 5,000 jobs are already evaluated, resulting
in the formation of 11 distinct job bands.

To reward and motivate our people and to ensure internal equity and external competitiveness,
we have been using a performance merit grid and linking rewards to performance.
A performance-linked variable pay has been introduced for all management executives. These
initiatives have led to the successful institutionalisation of the Compensation Review and
Performance Management Process.

These, to my mind, are significant steps towards building a more competitive and a world-
class organization.

Best regards,

Yours sincerely,

25th July, 2006 Kumar Mangalam Birla

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 MANAGEMENT DISCUSSION AND ANALYSIS
OVERVIEW

The Cement Industry is a part of the Construction Sector, which represents 6% of the country’s GDP. The
Construction Sector is growing at 15 % p.a. and attracts 40% of the overall investment in the economy.

The Cement Sector is, consequently, showing signs of growing at a faster rate than the 8% CAGR recorded
over the past 2 decades. The principal demand drivers have been housing, roads and government expenditure.
It is expected that renewed corporate investment in capacity creation and government spending on infrastructure
will likely accelerate the demand for cement. The per capita consumption of cement in India is just 125 kgs,
which is modest when compared to neighbouring countries in East Asia. For instance, the comparable figure is
- 366 kgs in Thailand, 606 kgs in Malaysia, 626 kgs in China and as much as 1,216 kgs in South Korea.

The medium term prospects for the Cement Sector in India are satisfactory, as demand and supply are expected
to be in balance, with another 2 years before the next cycle of new capacity enters the market. However, the
industry is vulnerable to volatility in energy prices as this represents nearly two-thirds of the total cost of
operations, including logistics. The position is aggravated by a growing shortfall on supplies of indigenous coal
against linkages, the rising price of imported fuels, and the short term impact of restrictions imposed on the
loads traditionally carried by trucks.

The Company has a capacity of 17 million tpa comprising 5 integrated Cement Plants, supported by 5
Grinding Units and 3 Terminals, one of which is located in Sri Lanka. The Company has focused on improving
Plant productivity as a means of mitigating inflationary pressures. It has also endeavoured to address escalating
power costs by investing in Captive Thermal Power Plants at its 2 major Plants in Kovaya, (Gujarat) and
Hirmi, (Chattisgarh); introduction of alternative fuels; greater reliance on rail and sea transport and an
expected reduction in the average lead distance to markets.

BUSINESS & FINANCIAL PERFORMANCE REVIEW

Merger of subsidiary

A Scheme of Amalgamation of Narmada Cement Company Limited (NCCL) with the Company was approved
by the Board for Industrial and Financial Reconstruction (BIFR) at its hearing held on 15th May, 2006.
Pursuant to the BIFR Order, NCCL stands amalgamated with the Company with effect from 1st October, 2005
(the Appointed Date). The Effective Date of the Scheme is 1st June 2006. NCCL is now a Division of the
Company. NCCL’s results are incorporated in the accounts of the Company for the period from 1st October,
2005 to 31st March, 2006 and hence the current year’s results are not strictly comparable with those of the
previous year.

Capacity Utilisation
FY06 FY05 % change
over FY05
Installed capacity (Mn.TPA):
Clinker 14.44 13.03 11
Cement 17.00 15.50 10
Production (Mn. Mt):
Clinker 12.73 12.36 3
Cement 13.33 12.11 10
— clinker capacity utilisation 93% 95%
— effective capacity utilisation@ 89% 91%

@ effective capacity utilisation: cement production + clinker sold.

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A view of the Andhra Pradesh Cement Works.

Unprecedented floods in Gujarat together with extended shutdowns at the Company’s plant at Kovaya, Gujarat
resulted in lower capacity utilisation at 89% compared to 91% in the previous year. However, cement production
increased from 12.11 Mn. Mt. in FY05 to 13.33 Mn. Mt. registering a growth of 10 %.
Sales Volume
FY06 FY05 % change
over FY05
Sales Volume (Mn. Mt):
Domestic – Cement 12.77 11.68 9
Clinker 0.20 0.04
Exports – Cement 1.46 0.84 74
Clinker 1.12 2.61 (57)
Domestic sales volume grew by 9% on par with the Industry growth - from 11.72 Mn. Mt to 12.97 Mn. Mt in
FY06. Cement export volumes registered a growth of 74% from 0.84 Mn. Mt in FY05 to 1.46 Mn. Mt in FY06.
The export mix saw a growth in cement, which constitutes 57% of the total exports.

Sales Realisation (Net of Excise Duty)

FY06 FY05 % change
over FY05
Average Realisation (Rs./MT) 2,122 1,718 24
Domestic – Cement 2,123 1,750 21
Exports – Cement 2,133 1,928 11
– Clinker 1,632 1,324 23
Domestic Cement realisation rose by 21% from Rs. 1,750 pmt to Rs. 2,123 pmt. Export prices have also seen an
increase with cement realisation improving by 11% from Rs.1,928 pmt to Rs. 2,133 pmt and clinker realisation
improving by 23% from Rs.1,324 pmt to Rs. 1,632 pmt. This helped in mitigating the rising energy and
maintenance costs.

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Financial Highlights:
Rs. in crores
FY06 FY05 % Change

Net Turnover 3,299 2,607 27

Domestic 2,809 2,093 34
Exports 490 514 (5)
Other Income 37 21 76
Total Expenditure 2,745 2,256 22
Operating Profit (PBIDT) 591 372 59
Operating Margin (%) 18 14
Interest 90 107 (16)
Gross Profit (PBDT) 502 265 89
Depreciation 216 222 (3)
Profit Before Tax and Diminution 286 43
Diminution in Value of Investment (EI) — 77
Profit Before Tax / (Loss) 286 (34)
Current Tax 57 32 81
Deferred Tax (5) (68) (93)
Fringe Benefit Tax 4 —
Net Profit after Total Tax and EI 230 3

Net Turnover
The net turnover increased by 18% after adjustment for traded volumes and a change in the treatment of
freight following the introduction of VAT.

Other Income
Other income increased from Rs. 21.07 crores in the previous year to Rs.37.00 crores on account of dividend
received from UltraTech Ceylinco (Pvt) Ltd., a subsidiary of the Company and dividend earned on temporary
surplus funds invested in Debt- linked Dividend Schemes of reputed Mutual Funds. The Company has written
back Rs.11 crores excess provision made in earlier years.

Operating Profit (PBDIT) & Margin

Operating profit increased by 59% from Rs.371.90 crores in FY05 to Rs.591.26 crores in FY06. This was despite
the substantial increase in power, maintenance, employee and logistics costs, viz.

- Power costs increased by 11% on account of higher price of naphtha required for the operation of captive
power plant at the Company’s plant in Gujarat,

- Stores & spares and repairs & maintenance expenditure increased from Rs.210.28 crores to
Rs.246.76 crores due to extended shutdowns across all the plants,

- Employee costs were higher following a revision in the compensation structure,

- Logistics costs were higher given the increase in freight rate and change in the treatment of freight
following introduction of VAT.

Despite the increases, the operating margin improved from 14% in FY 05 to 18% in FY06.

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Captive Jetty at Gujarat Cement Works.

Interest

The interest cost was down by 16% from Rs.106.88 crores in FY05 to Rs.89.64 crores in FY06. This was
achieved as a result of repayment / pre-payment of high coupon borrowings and substituting them with lower
coupon borrowing, leading to a savings of Rs.13 crores. Prudent working capital management also brought
down interest costs on working capital borrowing.

Depreciation

Depreciation at Rs.216.03 crores in FY06 was lower compared to Rs.221.78 crores in FY05; there was additional
depreciation of Rs.18.34 crores in previous year for prior period adjustment.

Income Tax

Current tax increased from Rs.31.55 crores to Rs.57.00 crores, mainly on account of higher taxable income and
lower tax deprecation. The Current tax rate continues to remain high despite the benefit of carry forward of
accumulated tax losses of Rs. 176 crores of NCCL.

The Company has also created Deferred Tax liability for addition in the block on account of amalgamation of
NCCL. During the previous year, the deferred tax credit was higher on account of reduction in income tax
rates in Finance Bill FY05. However, there was a reduction in deferred tax liability of Rs.4.75 crores against
Rs.68.00 crores in previous year.

The Company has provided Rs.3.58 crores towards Fringe Benefit Tax.

Net Profit

Net profit was Rs. 229.76 crores as compared to Rs. 2.85 crores in the previous year after providing
Rs.76.84 crores towards permanent diminution in value of investment towards its investments in NCCL.

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Cash Flow Statement
Rs in Crores
FY06
Sources of Cash
Cash from operations 517.61
Non-operating Cash flow 6.84
Decrease in working capital 34.02
Total 558.47
Uses of Cash
Net increase in investments 147.92
Net capital expenditure 216.16
Decrease in debts 88.04
Dividend 10.66
Interest 92.32
Increase in cash and cash equivalent 3.37
Total 558.47

Sources of Cash
Cash from operations
Cash from operations was higher at Rs 517.61 crores in FY06 as against Rs 371.67 crores in FY05.
Non Operating Cash Flow
Non Operating Cash Flow includes interest earned on deposit with statutory authorities/dividend income from
subsidiary and short term investments.
Decrease in Working Capital
The working capital has decreased by Rs. 34.02 crores. The liabilities and provisions increased by Rs.78.21
crores, while current assets increased by Rs.44.19 crores resulting in reduction of working capital by Rs.34.02
crores.
Uses of Cash
Net increase in investments
The Company has invested its temporary surplus funds in Debt linked - Dividend schemes of reputed Mutual
Funds.
Net Capital Expenditure
The capital expenditure of Rs. 216.16 crores was on account of modernisation / replacement of existing assets
and adjustment of amalgamation of NCCL.

Decrease In Debts
The Company raised Rs. 189 crores long term debts and repaid Rs. 167 crores, resulting in increase of Rs.22
crores in long term borrowings. Sales tax deferment loan increased by Rs. 27.93 crores. There was further
reduction in short term borrowings by Rs. 137.86 crores.
The Company enjoys AA+ and P1+ for its long term and short term debts from CRISIL.

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Dividend

The Company has paid Rs.10.66 crores as dividend to its shareholders including corporate tax on dividend of
Rs.1.33 crores. For the Current year, the Board has recommended a dividend of Rs.1.75 per share, entailing a
outflow of Rs.24.85 crores including corporate tax on dividend of Rs. 3.06 crores. This accounts for 10.8 % of
net profit for FY06.

CAPITAL EXPENDITURE PLAN

The Company has earmarked a capex of Rs.1,424 crores which will be spent over the next three years to
improve productivity and to address the issue of rising energy costs. Of this Rs.844 crores is towards installation
of captive power plants at the Company’s Units in Gujarat and Chhattisgarh and the balance towards
de-bottlenecking and cost efficiencies.

CONSOLIDATED PERFORMANCE
Rs in Crores
FY06 FY05* % Change
Net Turnover 3,384 2,701 25
Operating Profit (PBIDT) 607 379 60
Interest 90 109 (18)
Gross Profit (PBDT) 517 270 92
Depreciation & Amortisation of Goodwill 231 249 (7)
Profit Before Tax and Diminution 286 20
Diminution in Value of Investment (EI) — 77
Profit Before Tax /(Loss) 286 (57)
Current Tax & Fringe Benefit Tax 63 33
Deferred Tax (4) (37)
Net Profit before Minority interest 227 (52)
Minority Interest 2 1
Net Profit after Minority Interest 225 (53)

*Includes figures of UltraTech Ceylinco Pvt Limited for part of the year
The consolidated turnover increased by 25% to Rs.3,384 crores from Rs.2,701 crores in the previous year,
because of improved Domestic and Exports realisation. The interest cost was lower by 18% to Rs.90 crores.
Net profit before tax increased to Rs.286 crores in FY06 from Rs. (57) crores in FY05.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATION FRONT,

INCLUDING NUMBER OF PEOPLE EMPLOYED
Industrial relations at the Company’s plants remained cordial. The Company has restructured its remuneration
strategy to be on par with the industry. It has also introduced a Variable Pay Scheme to reward employees vis-
à-vis their performance as well as the performance of the Company.

The total number of employees in the Company as on 31st March, 2006 was 3,266 employees (3,160 employees).

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RISK MANAGEMENT

The Company is aware of the risks associated with the business. It regularly analysis the risks and takes
corrective action for managing / mitigating the same. Moreover, the Company has engaged the services of a
reputed consultant to undertake an exhaustive exercise for further identifying risks and taking adequate measures
for strengthening risk management.

Foreign Exchange Risk

The Company’s Policy is to hedge its long-term foreign exchange risk as well as short-term exposures within
the defined parameters. Currently, the Company has long term foreign exchange liability of Rs.89.23 crores.
The short term exposures are covered from time to time. The Company’s aggregate exports stood at
Rs.490.25 crores and imports at Rs.243.11 crores in FY06. As exports exceed imports, the Company has
suitably hedged the difference.

Interest Rate Risk

The Company is open to interest rate fluctuations on its Rupee denominated borrowings. It uses a judicious
mix of fixed and floating rate debts within the stipulated parameters.

Internal Control System and their adequacy

The Company has an appropriate internal control system commensurate with the size of its operations. Extensive
internal audit supplements the internal control system.

CONCLUSION

Optimising efficiencies, leveraging logistics benefits, higher use of alternative fuels and a thrust on value-added
product mix, including blended cement will translate into higher earnings for the Company as we go forward.

CAUTIONARY STATEMENT

Statement in this “Management Discussion and Analysis” describing the Company’s objectives, projections, estimates, expectations
or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results
could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations
include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and
pricing in the Company’s principal markets, changes in Government regulations, tax regimes, economic developments within India
and the countries within which the Company conducts business and other factors such as litigation and labour negotiations. The
Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any
subsequent development, information or events or otherwise.

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 REPORT ON CORPORATE GOVERNANCE
Governance Philosophy
The Aditya Birla Group is committed to the adoption of the best governance practices and their adherence in
spirit. Our governance practices stem from an inherent desire to provide full disclosure of material information.
Our governance philosophy rests on five basic tenets viz., Board accountability to the Company and shareholders,
strategic guidance and effective monitoring by the Board, protection of minority interests and rights, equitable
treatment of all shareholders as well as superior transparency and timely disclosure.
In line with this philosophy, UltraTech Cement Limited, continuously strives to adopt the best governance
and disclosure practices. Revised Clause 49 of the Listing Agreement with stock exchanges which deals with
Corporate Governance is applicable to your Company with effect from 1stJanuary, 2006 and your Company is
compliant with its provisions. The details of compliance are as follows:
I. BOARD OF DIRECTORS
• Composition and provisions as to Board and Committees
The Board should have an optimum combination of executive and non-executive directors with not less
than 50% of the Board comprising non-executive directors. Further, at least one-third of the Board should
comprise of independent directors if the Chairman is non-executive and at least half of the Board should
be independent in case of an executive Chairman. Also a Director shall not be a member in more than 10
committees or act as Chairman of more than five committees across all companies in which he is a
director.
Your Company’s Board comprises of 11(eleven) directors, all of whom are non-executive. Of these, 4(four) are
independent directors. The details of the directors with regard to outside directorships, committee positions as well as
attendance at board/ general meetings are as follows:
Director Executive/ No. of Outside No. of Outside No. of Board Attended Attended
Non-Executive/ Directorships Held2 Committee Meetings Last Last
Independent1 Positions Held3 AGM@ EGM#
Public Private Member Chairman Held Attended
Mr.Kumar Mangalam Birla Non-Executive 12 10 1 - 5 2 Yes Yes
Mrs. Rajashree Birla Non-Executive 6 10 - - 5 5 - -
Mr. R.C. Bhargava Independent 11 2 5 3 5 5 - Yes
Mr. G. M. Dave* Independent 5 - 5 - 5 N.A. N.A. N.A.
Mr. Y.M. Deosthalee Non-Executive 8 1 3 - 5 3 Yes -
Mr. A.R. Gandhi* Independent 7 - 2 2 5 1 - -
Mr. Y.P. Gupta Independent 4 - - 3 5 - - -
Dr. S. Misra Non-Executive 5 1 1 - 5 3 Yes Yes
Mr. V.T. Moorthy Non-Executive 1 - - - 5 5 - Yes
Mr. J.P. Nayak Non-Executive 9 1 2 4 5 4 Yes Yes
Mr. S. Rajgopal UTI Nominee,
Independent 1 - - - 5 5 Yes Yes
Mr. D.D. Rathi Non-Executive 6 2 1 - 5 5 Yes -
* At the Board meeting held on 7 th July, 2006, Mr. G.M. Dave was appointed Additional Director and
Mr. A. R. Gandhi resigned from the Board.
@ Annual General Meeting (AGM) held on 24th August, 2005 at Birla Matushri Sabhagar, 19, New Marine Lines,
Mumbai 400 020.
# Extraordinary General Meeting (EGM) held on 20th February, 2006 at Birla Matushri Sabhagar, 19, New Marine
Lines, Mumbai 400 020
1. Independent Director means a director defined as such under Clause 49 of the Listing Agreement.
2. Excluding Directorship in foreign companies and companies under Section 25 of the Companies Act, 1956.
3. Only two Committees viz. the Audit Committee and the Shareholders’ / Investor Grievance Committee are considered.
4. No Director is related to any other Director on the Board, except for Mr. Kumar Mangalam Birla and
Mrs. Rajashree Birla, who are son & mother respectively.

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• Non Executive Directors’ compensation and disclosure

All fees/compensation, (except sitting fees) paid to non-executive directors, including independent directors,
shall be fixed by the Board of Directors and shall require shareholders’ approval. The shareholders’ resolution
shall specify the limits for the maximum number of stock options that can be granted to non-executive
directors, including independent directors.

Details of sitting fees paid to the Directors for attending Board meetings during the year under review are as follows:

Name of Director Sitting fees paid

(Rs.)
Mr. Kumar Mangalam Birla 40,000
Mrs. Rajashree Birla 100,000
Mr. R.C. Bhargava 100,000
Mr. Y.M. Deosthalee 60,000
Mr. A.R. Gandhi 20,000
Mr. Y.P. Gupta —
Dr. S. Misra 60,000
Mr. V.T. Moorthy 100,000
Mr. J.P. Nayak 80,000
Mr. S. Rajgopal 100,000
Mr. D.D. Rathi 100,000

Apart from sitting fees for attending Board/Committee meetings, no other fees/compensation is paid to the Directors.
Your Company does not have any stock option scheme for its Directors and employees.

• Other provisions of the Board and Committees

The Board shall meet at least four times a year, with a maximum time gap of four months between any
two meetings. The minimum information to be made available to the Board should be as prescribed in
Annexure IA of Clause 49 of the Listing Agreement.

Your Company’s Board plays a primary role in ensuring good governance and functioning of your Company. The
Board consists of professionals from diverse fields and has vast experience in their respective areas. The Board’s
role, functions, responsibility and accountability are clearly defined. Members of the Board have complete freedom
to express their views on agenda items and can discuss any matter at the meeting with the permission of the
Chairman. The Board guides the management in achieving its goals and creating value for all stakeholders. Apart
from the matters statutorily required to be placed before the Board, the working of all Units of your Company are
also placed before the Board.

The details of Board meetings held during FY2005-2006 are as outlined below:

Date of Board Meeting City No. of Directors Present

rd
23 April, 2005 Mumbai 9
23rd July, 2005 Mumbai 9
22nd October, 2005 Mumbai 6
26th December, 2005 Mumbai 6
21st January, 2006 Mumbai 8

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• Code of Conduct
The Board shall lay down a Code of Conduct for all Board members and senior management of the
company. The Code of Conduct shall be posted on website of the company. All Board members and Senior
Management personnel shall affirm compliance with the code on an annual basis. The Annual Report of
the company shall contain a declaration to this effect signed by the CEO.

The Board of Directors of your Company have laid down a Code of Conduct (‘the Code’) applicable to all Board
Members and Senior Management personnel of your Company. A declaration from the CEO of your Company to
the effect that all Board Members and Senior Management personnel of your Company have affirmed compliance
with the Code, forms a part of this Report. The Code has been posted on the website of your Company –
www.ultratechcement.com

DECLARATION
As provided under Clause 49 of the Listing Agreement with the Stock Exchanges, the Board Members and the Senior
Management Personnel have affirmed compliance with the Code of Conduct for the year ended 31st March, 2006.

Mumbai S.Misra
30th June, 2006 Manager & CEO

II. AUDIT COMMITTEE

A qualified and independent Audit Committee shall be set up and should meet at least four times in a year.
The Audit Committee shall have minimum three directors as members, with two-thirds of its members
being independent directors. All members of Audit Committee shall be financially literate and at least one
member shall have accounting or related financial management expertise. The Chairman of the Audit
Committee shall be an independent director and shall be present at Annual General Meeting to answer
shareholder queries. The Company Secretary shall act as the secretary to the Committee.

Your Company has an Audit Committee at the Board level which acts as a link between the Management, the
Statutory and Internal Auditors and the Board of Directors and oversees the financial reporting process. All the
Members of the Audit Committee are financially literate and Independent Directors. Mr.R.C.Bhargava is the
Chairman of the Committee. During the year, the Audit Committee met 5 times to deliberate on various matters.
The meetings were held on 23rd April, 2005; 23rd August, 2005; 22nd October, 2005; 21st January, 2006 and
21st February, 2006. The details of the attendance and sitting fees paid are as follows:

Name of Audit No. of meetings Sitting Fees paid

Committee Member Held Attended (Rs.)
Mr. R.C. Bhargava 5 5 100,000
Mr. G.M. Dave* 5 N.A. N.A.
Mr. A.R. Gandhi* 5 — —
Mr. S. Rajgopal 5 5 100,000

* Mr. A. R. Gandhi ceased to be a Member of the Audit Committee with effect from 7th July, 2006.
Mr. G. M. Dave was inducted as a Member of the Audit Committee from that date.
1. Mr.D.D.Rathi, Director of your Company and Wholetime Director & Chief Financial Officer of
Grasim Industries Limited and Mr.K.C.Birla, Chief Financial Officer of your Company are permanent
invitees to the Audit Committee. The Statutory, Internal as well as the Cost Auditors of your Company are
also invited to the Audit Committee Meetings.

(17)
2. Mr.S.K.Chatterjee, Company Secretary, acts as the Secretary to the Committee.
The Audit Committee has the following powers:
1. To investigate any activity within its terms of reference,
2. To seek information from any employee,
3. To obtain outside legal or other professional advice,
4. To secure attendance of outsiders with relevant expertise, if it considers necessary.
The role of the Audit Committee includes the following:
1. Oversight of the company’s financial reporting process and the disclosure of its financial information to
ensure that the financial statement is correct, sufficient and credible,
2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or
removal of the statutory auditor and the fixation of audit fees,
3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
4. Reviewing, with the management, the annual financial statements before submission to the Board for
approval, with particular reference to:
a. Matters required to be included in the Director’s Responsibility Statement to be included in the
Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956,
b. Changes, if any, in accounting policies and practices and reasons for the same,
c. Major accounting entries involving estimates based on the exercise of judgment by management,
d. Significant adjustments made in the financial statements arising out of audit findings,
e. Compliance with listing and other legal requirements relating to financial statements,
f. Disclosure of any related party transactions,
g. Qualifications in the draft audit report.
5. Reviewing, with the management, the quarterly financial statements before submission to the Board for
approval.
6. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal
control systems.
7. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit
department, staffing and seniority of the official heading the department, reporting structure coverage and
frequency of internal audit.
8. Discussion with internal auditors any significant findings and follow up there on.
9. Reviewing the findings of any internal investigations by the internal auditors into matters where there is
suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting
the matter to the Board.
10. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well
as post-audit discussion to ascertain any area of concern.
11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of non payment of declared dividends) and creditors, if any.
The Audit Committee reviews the following information:
1. Management Discussion and Analysis of financial condition and results of operations,
2. Statement of significant related party transactions (as defined by the Audit Committee), submitted by
management,
3. Management letters / letters of internal control weaknesses issued by the statutory auditors, if any,
4. Internal audit reports relating to internal control weaknesses, and
5. The appointment, removal and terms of remuneration of the Chief Internal Auditor.

(18)
III. SUBSIDIARY COMPANIES
At least one independent director on the Board of Directors of the holding company shall be a director on
the Board of Directors of a material non-listed Indian subsidiary company. The Audit Committee of the
listed holding company shall also review the financial statements, in particular, the investments made by
the unlisted subsidiary company. The minutes of the Board meetings of the unlisted subsidiary company
shall be placed at the Board meeting of the listed holding company. The management should periodically
bring to the attention of the Board of Directors of the listed holding company, a statement of all significant
transactions and arrangements entered into by the unlisted subsidiary company.

Your Company does not have any material non-listed Indian Subsidiary Company. The Audit Committee reviews
the financial statements of the unlisted subsidiary companies. The minutes of the Board meetings as well as
statement of all significant transactions of the unlisted subsidiary companies are placed before the Board of your
Company for their review.

IV. DISCLOSURES

(A) Basis of related party transaction

A statement in summary form of transactions with related parties in the ordinary course of business,
details of material individual transactions with related parties that are not in the normal course of
business and details of material individual transactions with related parties that are not on an arm’s
length basis is required to be placed before the Audit Committee.
Your Company places all the aforesaid details before the Audit Committee periodically.
Particulars of related party transactions are listed out in Note no. 14 of Part B of Schedule 21 to the
Accounts. However, all these transactions are on normal commercial arm’s length basis.

(B) Disclosure of Accounting treatment

Your Company has followed all relevant Accounting Standards while preparing the financial statements.

(C) Risk Management

The company shall lay down procedures to inform Board members about the risk assessment and
minimisation procedures. These procedures shall be reviewed to ensure that executive management
controls risk through means of a properly defined framework.
Your Company is aware of the risks associated with the business. It regularly analysis the risks and takes
corrective action for managing/mitigating the same. Your Company has developed a risk management policy.

(D) Proceeds from public issues, right issues, preferential issues etc.
If any capital is raised through an issue, the company needs to disclose to the Audit Committee, the
uses / applications of funds on a quarterly basis. Further, on an annual basis, the company shall
prepare a statement of funds utilised for purposes other than those stated in the offer document/
prospectus/notice and place it before the Audit Committee. This statement shall be certified by the
Statutory Auditors of the company.

During the year under review, your Company did not raise any funds by way of public, rights, preferential
issues etc.

(19)
(E) Remuneration of Directors and details of Directors’ shareholding

– The company needs to disclose all pecuniary relationship or transactions of the non-executive
directors vis-à-vis the company.

Apart from sitting fees that are paid to the Directors for attending Board / Committee meetings, no
significant material transactions have been made with the non-executive Directors vis-à-vis the Company.

– The Company shall disclose the number of shares and convertible instruments held by
non-executive directors in the annual report.
Details of Directors shareholding in the Company are as follows:
Name of Director No. of Shares
Mr. Kumar Mangalam Birla 400
Mrs. Rajashree Birla 400
Mr. R.C. Bhargava —
Mr. G.M. Dave —
Mr. Y.M. Deosthalee 1,702
Mr. A.R. Gandhi 485
Mr. Y.P. Gupta —
Dr. S. Misra —
Mr. V.T. Moorthy 420
Mr. J.P. Nayak 1,276
Mr. S. Rajgopal —
Mr. D.D. Rathi —

(F) Management
– As part of the Directors’ Report or as an addition thereto, a Management Discussion and Analysis
Report should form part of the Annual Report to the shareholders.
The Management Discussion and Analysis Report forms part of the Annual Report and is in accordance
with the requirements laid out in Clause 49 of the Listing Agreement.
– Senior management shall make disclosures to the Board relating to all material financial and
commercial transactions, where they have personal interest, that may have a potential conflict
with the interest of the company at large (for e.g. dealing in company shares, commercial dealings
with bodies, which have shareholding of management and their relatives etc.)
No material transaction has been entered into by your Company with the Promoters, Directors or the
Management, their subsidiaries or relatives etc., that may have a potential conflict with interests of your
Company.
(G) Shareholders
– In case of the appointment of a new director or re-appointment of a director the shareholders
must be provided with the details of Directors
Details of the Directors seeking appointment / re-appointment at the ensuing AGM are provided in the
Notice convening the AGM.
– Quarterly results and presentations made by the company to analysts shall be put on company’s
website, or shall be sent in such a form so as to enable the stock exchange on which the company
is listed to put it on its own website.
Press Releases and financial results are made available on the website of your Company
(www.ultratechcement.com) and also that of the Aditya Birla Group (www.adityabirla.com).

(20)
– Share Transfer and Shareholder / Investor Grievance Committee

A Shareholders’ Grievances Committee under the chairmanship of a non-executive director shall

be formed to specifically look into the redressal of shareholder and investors complaints like
transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends etc. To expedite
the process of share transfers, the Board of the company shall delegate the power of share transfer
to an officer or a committee or to the registrar and share transfer agents. The delegated authority
shall attend to share transfer formalities at least once in a fortnight.

Your Company has a “Share Transfer and Shareholder / Investor Grievance Committee” at the Board
level, under the Chairmanship of a non-executive, independent director. The Committee looks into issues
relating to share / debentureholders, including transfer/transmission of shares/debentures, issue of duplicate
share/debenture certificates, non-receipt of dividend, Annual Report, shares after transfers and delays in
transfer of shares. The Committee meets to review the status of investor grievances, dematerialisation /
rematerialisation of shares and debentures as well as systems and procedures followed to track investor
complaints and suggest measures for improvement from time to time. During the year the Committee met
on 23rd April, 2005 and 22nd October, 2005.

The composition of the Committee, meetings held and attended and the sitting fees paid are as follows:

Name of Member No. of meetings Sitting Fees paid

Held Attended (Rs.)
Mr. R. C. Bhargava 2 2 40,000
Dr. S. Misra 2 1 20,000
Mr. D. D. Rathi 2 2 40,000

Mr.S.K.Chatterjee, Company Secretary, acts as Secretary to the Committee and is also the Compliance
Officer.

The Company’s shares are compulsorily traded and delivered in the dematerialised form in all Stock
Exchanges. The equity shares of the Company have been admitted with National Securities Depository
Limited and Central Depository Services (I) Limited bearing ISIN No. INE481G01011.

To expedite the transfer in the physical segment, necessary authority has been delegated by your Board to
Officers of your Company, to approve issue of share/debenture certificates, approve transfer/transmission
of shares / debentures, consolidation, sub-division, split of share/debenture certificates etc. Details of share
transfers/transmissions approved by the Directors and Officers are placed before the Board.

Details of complaints received, number of shares transferred during the year, time taken for effecting these
transfers and the number of share transfers pending are furnished in the “Shareholder Information” section
of this Annual Report.

- Details of non-compliance by the Company, penalties, strictures imposed on the company by

stock exchanges or SEBI or any other statutory authority, on any matter relating to capital
markets, during the year.

There has been no instance of non-compliance by the Company on any matter related to capital markets
during the year under review and hence no strictures /penalties have been imposed on the Company by the
stock exchanges or the Securities and Exchange Board of India (SEBI) or any statutory authority.

(21)
 Adoption of non-mandatory compliances

(a) A half-yearly declaration of financial performance of your Company including summary of the
significant events has been sent to each household of shareholders.

(b) The statutory financial statements of your Company are unqualified.

Apart from the above, your Company has constituted a Finance Committee of the Board. The
Committee is authorised to exercise all powers and discharge all functions relating to working capital
management, foreign currency contracts, operation of bank accounts and matters relating to excise,
sales tax, income tax, customs and other judicial or quasi judicial authorities. The Committee
comprises of the following Directors - Mr. R.C. Bhargava, Dr. S. Misra and Mr. D.D. Rathi.

V. CEO/CFO CERTIFICATION

The Manager & CEO and the CFO have certified to the Board that:

1. They have reviewed the balance sheet and profit and loss account (consolidated and unconsolidated),
and all its schedules and notes to accounts, as well as the cash flow statement;

2. Based on their knowledge, information and belief, these statements do not contain any untrue statement
of a material fact or omit to state a material fact that might be misleading with respect to the
statements made;

3. Based on their knowledge, information and belief, the financial statements and other financial
information included in this Report present a true and fair view of the Company’s affairs for the period
presented in this Report and are in compliance with the existing accounting standards, applicable laws
and regulations;

4. To the best of their knowledge, information and belief, no transactions entered into by the Company
during the year are fraudulent, illegal or violative of the Company’s Code of Conduct;

5. They are responsible for establishing and maintaining internal controls for financial reporting and
have evaluated the effectiveness of the internal control systems of the Company pertaining to financial
reporting;

6. They have disclosed, based on their most recent evaluation, wherever applicable, to the Company’s
Auditors and the Audit Committee of the Company’s Board of Directors all significant deficiencies in
the design or operation of internal controls, if any, of which they are aware and the steps taken or
proposed to be taken to rectify the deficiencies;

They have indicated to the Auditors and the Audit Committee:

a) Significant changes in the Company’s internal control over financial reporting during the year;
b) all significant changes in accounting policies during the year, if any, and that the same have been
disclosed in the notes to the financial statements;
c) any fraud, whether or not material, that involves management or other employees who have a
significant role in the Company’s internal control system over financial reporting.

(22)
VI. GENERAL BODY MEETINGS
Details of General Meetings
Year Type Location Date Time
2006 EGM Birla Matushri Sabhagar, 20th February, 2006 3.00 pm
19, New Marine Lines,
Mumbai – 400 020
2005 AGM Birla Matushri Sabhagar, 24th August, 2005 2.00 pm
19, New Marine Lines,
Mumbai – 400 020
2004 AGM Birla Matushri Sabhagar, 11th October, 2004 2.00 pm
19, New Marine Lines,
Mumbai – 400 020
2003 AGM L & T House, Ballard Estate, 30th May, 2003 11.00 am
Mumbai– 400 001

– Whether special resolutions passed in the above mentioned General Meetings: Yes
The following resolutions were passed as special resolutions:
(A) At the EGM held on 20th February, 2006:
i. approval to the Scheme of Amalgamation of Narmada Cement Company Limited(NCCL) with your
Company.
ii. approval to the Board to issue and allot equity shares of the Company to the members of NCCL.
(B) At the AGM held on 11th October, 2004:
i. alteration of the Articles of Association of your Company.
ii. change in name of your Company.
Whether any special resolution passed last year through postal
ballot – details of voting pattern No
Person who conducted the postal ballot exercise N.A.
Whether any special resolution is proposed to be conducted through postal ballot N.A.
Procedure for postal ballot N.A.

VII. MEANS OF COMMUNICATION

Quarterly results
Which newspapers normally published in
Newspaper Cities of Publication
Business Standard All editions
Loksatta Mumbai

Any website, where displayed www.ultratechcement.com

www.adityabirla.com
Whether the Company Website displays
All official news releases Yes
Presentation made to Institutional Investors/Analysts No
General Shareholder Information Part of this annual report

(23)
 SHAREHOLDER INFORMATION
1. Annual General Meeting
- Date and Time : 28th August, 2006 at 2.00 pm
- Venue : Birla Matushri Sabhagar,
19, New Marine Lines,
Mumbai – 400 020

2. Financial Calendar

- Financial reporting for the quarter ended 30th June, 2006 : End July,2006

- Financial reporting for the half year ending 30th September, 2006 : End October,2006

- Financial reporting for the quarter ending 31st December, 2006 : End January,2007

- Financial reporting for the year ending 31st March, 2007 : End April,2007

- Annual General Meeting for the year ending 31st March, 2007 : End July/August, 2007

3. Dates of Book Closure : 17th August, 2006 to

28th August, 2006
(both days inclusive)

4. Dividend Payment Date : On or after 28th August, 2006

5. Registered Office : UltraTech Cement Limited

“B” Wing, Ahura Centre,
2nd Floor, Mahakali Caves Road,
Andheri (East),
Mumbai 400093.
Tel.: (022) 66917800
Fax: (022) 66928109
Email:sharesutcl@adityabirla.com
Web: www.ultratechcement.com
www.adityabirla.com

6. (a) Listing Details :

Equity Shares Non Convertible Debentures

1. Bombay Stock Exchange Limited 1. Bombay Stock Exchange Limited

Phiroze Jeejeebhoy Towers Phiroze Jeejeebhoy Towers
Dalal Street, Mumbai 400001. Dalal Street, Mumbai 400001.

2. National Stock Exchange of India Limited 2. National Stock Exchange of India Limited
“Exchange Plaza” “Exchange Plaza”
Bandra-Kurla Complex Bandra-Kurla Complex
Bandra (East), Mumbai 400051. Bandra (East), Mumbai 400051.

Note: Listing fees for the year 2006-07 has been paid to the Bombay Stock Exchange Limited and the National
Stock Exchange of India Limited.

(24)
 (b) Overseas Depository for GDRs : Citibank N. A.
Depository Receipt Services
111, Wall Street,
New York; NY-10043 USA
Tel: +12126577808
Fax: +12126575398

(c) Domestic Custodian of GDRs : Citibank N.A.

Custody Services
Ramnord House
77, Annie Besant Road,
Worli, Mumbai – 400 025
Tel: (022) 2497 8066
Fax: (022) 2497 8060

7. Stock Code:

Stock Code Reuters Bloomberg

Bombay Stock Exchange Limited 532538 ULTC.BO UTCEM IN

National Stock Exchange of India Limited ULTRACEMCO ULTC.NS NUTCEM IN

8. Stock Price Data:

Bombay Stock Exchange Limited National Stock Exchange of India Limited

High Low Close Avg. Vol. High Low Close Avg. Vol.
(In Rs.) (In Rs.) (In Rs.) (In Nos) (In Rs.) (In Rs.) (In Rs.) (In Nos)

Apr-05 377.85 331.25 333.40 47,596 379.70 331.00 334.15 73,536

May-05 367.00 315.10 324.90 39,828 368.30 315.00 325.55 60,377

Jun-05 358.50 314.00 352.45 72,480 359.45 295.40 353.70 121,283

Jul-05 430.00 348.00 380.75 91,970 415.00 347.00 381.60 133,293

Aug-05 448.40 375.00 439.05 117,163 448.80 370.05 438.00 157,311

Sep-05 495.00 406.00 466.30 59,730 498.00 425.00 466.00 92,972

Oct-05 475.00 381.00 398.15 41,600 473.00 380.00 399.85 52,377

Nov-05 477.05 403.00 450.00 34,284 477.80 400.00 450.20 57,260

Dec-05 464.50 415.00 427.15 44,894 464.20 344.95 427.45 63,241

Jan-06 539.90 421.00 518.55 50,800 538.00 420.10 518.20 81,520

Feb-06 565.00 498.20 560.50 51,136 566.00 499.05 561.45 59,501

Mar-06 689.00 562.50 684.45 71,952 689.80 560.15 683.05 97,305

(25)
9. Stock Performance:

200
(Indexed)
180

160

140

120

100

80

60
Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06

Sensex UltraTech Nifty

10. Stock Performance and Returns :

Absolute Returns (In %)
(In Percentage) 1 Year 3 Years 5 Years
UltraTech 93.1 - -
BSE Sensex 73.7 270.7 213.0
NSE Nifty 67.1 247.8 196.3
Annualised Returns (In %)
(In Percentage) 1 Year 3 Years 5 Years
UltraTech 93.1 - -
BSE Sensex 73.7 54.7 25.6
NSE Nifty 67.1 51.5 24.3

11. Registrar and Transfer Agent : Sharepro Services (India) Pvt. Ltd.
(For share transfers and other communication Satam Estate, 3rd Floor,
relating to share certificates, Above Bank of Baroda,
dividend and change of address) Cardinal Gracious Road, Chakala,
Andheri (East), Mumbai 400099.
Tel: (022) 2821 5168 / 2834 8218
Fax : (022) 2837 5646
Email: sharepro@vsnl.com
12. Share Transfer system :
Share transfer in physical form are registered and returned within a period of 15 days from the date of
receipt, if the documents are clear in all respects. Officers of the Company have been authorised to approve
transfers upto 5,000 shares in physical form under one transfer deed. One Director jointly with one Officer
of the Company have been authorised to approve transfers exceeding 5,000 shares under one transfer deed.

(26)
 The Registrar & Transfer Agent attend to investor grievances in consultation with the Secretarial Department
of the Company.
2005-06 2004-05
Transfer Period No. of No. of % No. of No. of %
(in days) transfers shares transfers shares
1 – 15 1,722 55,565 48.68 25,602 860,561 96.19

16 – 20 969 32,782 28.73 594 17,294 2.23

21 – 30 791 25,786 22.59 419 13,043 1.58

Total 3,482 114,133 100.00 26,615 890,898 100.00

Number of pending share transfers : 109 transfers for 4,271 shares pending as
as at 31st March, 2006 registered notices to sellers have been issued.
13. Investor Services:
Complaints received during the year
Nature of complaints 2005-06 2004-05
Received Cleared Received Cleared

Relating to Transfer, Transmission, 45 45 31 31

Dividend, Interest, Demat & Remat
and Change of address etc.
Legal proceedings on share transfer issues, if any: There are no major legal proceedings relating to transfer
of shares.
14. Distribution of Shareholding as on 31st March :
2006 2005

No. of Equity No. of % of No. of % of No. of % of No. of % of

shares held share share shares share share share shares share
holders holders held holding holders holders held holding

1 – 100 251,388 88.21 8,194,014 6.59 283,334 89.03 9,101,068 7.32

101 – 200 19,563 6.87 2,907,473 2.34 21,008 6.60 3,116,206 2.51

201 – 500 9,588 3.36 3,043,010 2.45 9,727 3.06 3,064,914 2.46

501 – 1000 2,744 0.96 1,971,619 1.58 2,606 0.82 1,846,556 1.48

1001 - 5000 1,428 0.50 2,672,952 2.15 1,339 0.42 2,397,253 1.93

5001-10000 99 0.04 696,917 0.56 80 0.03 546,816 0.44

10001 & above 169 0.06 104,912,636 84.33 122 0.04 104,325,808 83.86

Total 284,979 100.00 124,398,621 100.00 318,216 100.00 124,398,621 100.00

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15. Category of Shareholding as on 31st March :
2006 2005

Category No. of % of No. of % of No. of % of No. of % of

share share shares share share share shares share
holders holders held holding holders holders held holding

Promoters &
Persons Acting in
Concert 2 0.00 63,542,320 51.08 2 0.00 63,542,320 51.08
Mutual Funds & UTI 55 0.02 4,027,732 3.24 69 0.02 4,757,670 3.83

Banks, FI’s and

Insurance Companies 125 0.04 7,830,531 6.29 148 0.05 9,871,096 7.94

FIIs 144 0.05 9,327,078 7.50 158 0.05 9,154,348 7.36

GDRs 2 0.00 732,132 0.59 2 0.00 1,111,658 0.89

Corporates 2,413 0.85 17,937,048 14.42 2,495 0.79 16,151,940 12.98

NRIs/OCBs 3,442 1.21 805,924 0.65 3,609 1.13 611,758 0.49

Indian Public 278,796 97.83 20,195,856 16.23 311,733 97.96 19,197,831 15.43
Total 284,979 100.00 124,398,621 100.00 318,216 100.00 124,398,621 100.00

16. Dematerialisation of Shares and Liquidity
: 95.31% of outstanding equity have been dematerialised as
on 31st March, 2006. Trading in equity shares of the
Company is permitted only in the dematerialised form with
effect from 5th April, 1999, as per notifications issued by
Securities and Exchange Board of India (SEBI).

17. Details on use of public funds obtained : Not Applicable

in the last three years

18. Outstanding GDRs/Warrants and : 732,132 GDRs are outstanding as on 31st March, 2006.
Convertible Bonds Each GDR represents one underlying equity share.
There are no warrants / convertible bonds outstanding as
at the year end.

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19. Plant Locations :
Andhra Pradesh
Cement Works
Bhogasamudram Tadipatri,
Anantapur District,
Andhra Pradesh 515 415
Tel: 08558-288841
Fax: 08558-288821/31
Hirmi
Cement Works
Post Hirmi
Taluka Simga, Dist. Raipur,
Chhattisgarh
Pin 493 195
Tel: 07726-281269
Fax: 07726-281268
Jharsuguda
Cement Works
Near Dhutra Railway Station,
P.O. Arda 768 202
Dist. Jharsuguda, Orissa
Tel: 06645-283161
Fax: 06645-283108
West Bengal Cement Works
Near EPIP Plot, Muchipara,
Post: Rajbandh, Durgapur 713 212
Tel: 0343-2533029
Fax: 0343-2533358
20. Investor Correspondence
Awarpur Gujarat
Cement Works Cement Works
P.O. Awarpur Cement Project Kovaya -365541,
Taluka: Korpana, Taluka - Rajula,
Dist. Chandrapur Dist - Amreli,
Maharashtra 442 917 Gujarat
Tel: 07173-266322 Tel: 02794-283056
Fax: 07173-266339 Fax: 02794-283007
Jafrabad Cement Works Arakkonam
Village: Babarkot,Taluka:Jafrabad Cement Works
Dist. Amreli, Gujarat 365 540 Chitteri Village,
Tel: 02794-245356 District Vellore,
Fax: 02794-245110 Arakkonam 631 003,
Tamil Nadu
Tel: 04177-329504
Fax: 04177-233585
Magdalla Cement Works Ratnagiri Cement Works
Magdalla Port, Dumas Road MIDC Industrial Estate, Zadgaon Block
Surat, Gujarat 395 007 Ratnagiri, Maharashtra 415 639
Tel: 0261-2721318 Tel: 02352-223679
Fax: 0261-2726952 Fax: 02352-221807
Registered Office:
‘B’ Wing, Ahura Centre,
2nd Floor, Mahakali Caves Road,
Andheri (East), Mumbai 400 093
Tel: (022) 66917800
Fax: (022) 66928109
Email: sharesutcl@adityabirla.com
kamalrathi@adityabirla.com
Registrar & Transfer Agent:
Sharepro Services (India) Pvt. Ltd.,
Satam Estate, 3rd Floor,
Above Bank of Baroda,
Cardinal Gracious Road, Chakala,
Andheri (East), Mumbai 400 099
Tel: (022): 2821 5168 / 2834 8218
Fax: (022): 2837 5646
Email: sharepro@vsnl.com
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21. Per Share Data :
2005-06 2004-05
Net Earning (Rs. Crs.) @ 229.76 79.69
Cash Earning (Rs. Crs.) @ 441.04 233.47
EPS (Rs.) @ 18.46 0.23
EPS Growth (%) 7926 (93)
CEPS (Rs.) @ 35.43 18.77
Dividend Per Share (Rs.) 1.75# 0.75
Dividend Payout on net profits (%) 9.48 11.71
Book Value Per Share (Rs.) 83.40 85.78
Price to Earning* 37.08 1541.52
Price to Cash Earnings* 19.32 18.89
Price to Book Value* 8.21 4.13
* Based on Stock Price as on 31st March
@ Before exceptional items
# Recommended by Board for approval of Shareholders at ensuing Annual General Meeting.
22. Other useful information for shareholders :
Unpaid/Unclaimed Dividends
Dividend warrants in respect of the year ended 31st March, 2005 have been despatched to the shareholders
at the addresses registered with the Company. Those shareholders who have not yet received the dividend
warrants may please write to the Company or its Registrar & Transfer Agent for further information in this
behalf. Shareholders who have not encashed the warrants are requested to do so by getting them revalidated
from the Registered Office of the Company or the Registrar & Transfer Agent.
ECS Facility
Company is providing facility of “Electronic Clearing Service” (ECS) for payment of dividend to shareholders.
Shareholders are requested to provide details of their bank account for availing ECS facility. Further ECS
facility is also available to the beneficial owners of shares in demat form. Those desirous of availing the
ECS facility may provide their mandate to the Company in writing, in the form attached with the AGM
Notice.
Share Transfer / Dematerialisation
1. Share transfer requests are acted upon within 15 days from the date of their receipt. In case no
response is received from the Company within 30 days of lodgement of transfer request, the lodger
should immediately write to the Company or its Registrar & Transfer Agent with full details so that
necessary action could be taken to safeguard interest of the concerned against any possible loss /
interception during postal transit.
2. Dematerialisation requests duly completed in all respects are normally processed within 7 days from
the date of their receipt.
3. Equity Shares of the Company are under compulsory demat trading by all investors, with effect from
5th April 1999. Considering the advantages of scripless trading, shareholders are requested to consider
dematerialisation of their shareholding so as to avoid inconvenience in future.

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4. The equity shares of the Company have been admitted with the National Securities Depository
Limited (NSDL) and Central Depository Services (I) Limited (CDSL) bearing ISIN No. INE481G01011.
Correspondence with the Company
Shareholders / Beneficial Owners are requested to quote their Folio No. / DP & Client ID Nos. as the case
may be, in all correspondence with the Company. All correspondence regarding shares & debentures of the
Company should be addressed to the Company’s Registrar & Transfer Agent.
Non-Resident Shareholders
Non-resident members are requested to immediately notify:-
• Indian address for sending all communications, if not provided so far;
• Change in their residential status on return to India for permanent settlement;
• Particulars of their NRE Bank Account with a bank in India, if not furnished earlier.
Others
1. In terms of the Regulations of NSDL & CDSL, the Bank Account details of Beneficial Owners of
Shares in demat form will be printed on the dividend warrants as furnished by the Depository
Participants. The Company will not entertain any request for change of bank details printed on their
dividend warrants. In case of any changes in your bank details please inform your DP immediately.
2. Shareholders holding shares in physical form are requested to notify to the Company, change in their
address / pin code number and Bank Account details promptly in writing, under the signatures of sole /
first joint holder. Beneficial Owners of shares in demat form are requested to send their instructions
regarding change of name, change of address, bank details, nomination, power of attorney, etc. directly
to their DP as the same are maintained by the DPs.
3. To prevent fraudulent encashment of dividend warrants, members are requested to provide their Bank
Account Details (if not provided earlier) to the Company (if shares held in physical form) or to DP
(if shares held in demat form), as the case may be, for printing of the same on their dividend warrants.
4. In case of loss / misplacement of shares, investors should immediately lodge a FIR / Complaint with
the Police and inform the Company along with original or certified copy of FIR / Acknowledged copy
of Police Complaint.
5. For expeditious transfer of shares, shareholders should fill in complete and correct particulars in the
transfer deed. Wherever applicable, registration number of Power of Attorney should also be quoted in
the transfer deed at the appropriate place.
6. Shareholders are requested to keep record of their specimen signature before lodgement of shares with
the Company to obviate possibility of difference in signature at a later date.
7. Shareholders of the Company who have multiple accounts in identical name(s) or holding more than
one share certificate in the same name under different ledger folio(s) are requested to apply for
consolidation of such folio(s) and send the relevant share certificates to the Company.
8. Section 109A of the Companies Act, 1956 extends nomination facility to individuals holding shares
in physical form in companies. Shareholders, in particular, those holding shares in single name, may
avail of the above facility by furnishing the particulars of their nominations in the prescribed Nomination
Form which can be obtained from the Company or its Registrar & Transfer Agent or send their
request for the said form to sharesutcl@adityabirla.com/kamalrathi@adityabirla.com.
9. Shareholders are requested to give us their valuable suggestions for improvement of our investor
services.

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 AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

To the Members of
UltraTech Cement Limited

We have examined the compliance of conditions of Corporate Governance by UltraTech Cement Limited for
the year ended on March 31, 2006 as stipulated in clause 49 of the Listing Agreement of the said Company
with the Stock Exchange.

The compliance of the conditions of Corporate Governance is the responsibility of the Management. Our
examination was limited to procedures and implementations thereof, adopted by the Company for ensuring the
compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion
on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, and the
representations made by the Directors and the Management, we certify that the Company has complied with
the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.

We state that such compliance is neither an assurance as to the future viability of the Company nor the
efficiency or effectiveness with which the Management has conducted the affairs of the Company.

For G.P.Kapadia & Co.

Chartered Accountants

Atul B. Desai
Partner
(Membership No.30850)
Place : Mumbai
Date : 12th July, 2006

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 SOCIAL REPORT
Making a Difference

The philosophy of caring, giving, developing and empowering an under-served people is part of our
Group’s DNA. It is a common stream that flows through the veins of all our Group Companies.

Your Company’s Social Projects in India’s hinterland are carried out under the aegis of the Aditya
Birla Centre for Community Initiatives and Rural Development, led by Mrs. Rajashree Birla, your
Director. These Social Projects are in sync with felt needs of the communities and goes in tandem
with the Group’s Social Vision which is “to make a qualitative difference to the lives of the weaker
sections of society in proximity to our plants and in doing so improve the human development index
of our nation.”

For the year 2005-06, your Company’s work encompassed nearly six lacs people. A summary of our
involvement is as indicated.

Health Care
• Medical camps were conducted in host communities and villagers medically examined and provided
necessary treatment. Treatment for cataract, tuberculosis, pre and post natal care for women were
some of the areas covered,
• AIDS awareness camps generated greater awareness,
• Pulse Polio programmes and provision of safe drinking water were some of the other health care
initiatives.

Education
• Balwadis, promoting Government’s mid-day meal schemes in schools, disbursing merit scholarships
(girl students in particular),
conducting literacy classes
under Adult Education
Scheme, science fairs,
popularising Bal Sanskar
Kendras were some of the
programmes conducted for
educating the people in the
villages surrounding your
Company’s plants.
Balwadi

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Sustainable Livelihood

• Agriculture through farm-based programmes, training of farmers, setting up of vermi-compost

units, seed multiplication and intercropping, animal immunisation, water harvesting by erecting
check-dams and roof-water harvesting benefited farmers around your Company’s plants.

Women Self-Help Groups

• Tailoring training centres,

distribution of sewing
machines, formation of
self-help groups and other
income generating activities
such as agarbatti making,
mushroom cultivation, blanket
weaving, knitting and
earthworm cultivation
provided sustainable means of
livelihood to women.
Women engaged in gainful employment

Social Welfare

• Mass marriage programme for scheduled caste couples, exhibition and training on balanced diet
and food preservation for women and girl students, awareness drive on Knowledge, Attitude and
Practices, were conducted to increase women empowerment.

Infrastructure

• Your Company also contributed towards infrastructure development, construction of health care
centres and facilities for the under-served communities, including construction of low cost toilets.

In these humanitarian endeavours, your Company partners with the Government, District Authorities,
Village Panchayats and other like-minded NGOs, and above all the communities, who seek to serve.
We believe only through collective efforts can we usher in a more equitable society. Your Board and
your Company’s employees are committed to this process.

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 ENVIRONMENT REPORT

Lush green surroundings around your Company’s Unit

Environment conservation – A way of life

We believe in sustainable development. For us this translates into meeting today’s needs without
jeopardising the needs of future generations. For us this means understanding that the earth’s resources
are finite and that as far as possible, using these sparingly and in a responsible manner makes greater
business sense.
We subscribe to the triple-bottom line accountability. So we regard social, economic and environmental
responsibility as integral elements that drive business. We believe these are interdependent and
equally important to our success as a Corporate.
At all of your Company’s Plants at Awarpur and Ratnagiri in Maharashtra, Kovaya, Jafrabad and
Magdalla in Gujarat, Hirmi in Chhattisgarh, Arakkonam in Tamil Nadu, Tadipatri in Andhra
Pradesh, Jharsuguda in Orissa and Durgapur in West Bengal, we adopt clean technologies and
processes that combine both economic progress and sustainable environment. Our plants are ISO
14001 Environment Management Systems Certified and adhere to OHSAS 18001 standards.
Professional Environment Auditors such as Det Norske Veritas, the State Pollution Control Board’s
certified auditors and Environmental Systems Auditors conduct an in-depth environmental audit on
our plants. Their Audit Reports validate our commitment to environmental conservation.

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State-of-the-art automated industrial Effluent Treatment Plants (ETP) operate across all of your
Company’s manufacturing units. The treated effluent inclusive of treated sewage thrown up by the
plants is recycled and is used for horticulture and irrigation.
To prevent air borne dust particles from escaping into the atmosphere, equipment like the state-of-
the-art, highly efficient reverse air Bag House, Electrostatic Precipitators and Jet Pulse Filters are well
in place. The dust collected is fully recycled into the system. Continuous stack monitoring instruments
are installed in Kiln bag house, cooler and cement mills stack for online monitoring of stack emission.
Interlocking of all drives connected to pollution control unit has been provided to avoid emission in
case of failure of pollution control equipment.
We use a blending technology that gives us the flexibility to use low-grade limestone without
effecting the desired cement attributes in our cement mix. This aids in preserving natural resources.
Water in the cement plant is recycled and used for cooling the mills in the plant. Also, surface
miners which are environment friendly are used for limestone excavations, thus eliminating drilling
and blasting operations.
Your Company is increasingly resorting to alternative fuels, such as pet coke which is a by-product of
oil refineries and helps in use of low grade limestones, to save on natural resources. Power saving
initiatives such as installation of Raw Mill Belt Bucket elevator, modification of Raw Mill Separator
cone and installation of Lub oil separator Heat Recovery Unit are implemented across the various
plants.
Your Company is also implementing a Waste Heat Co-generation Plant at one of its Unit’s utilising
the cooler waste heat gases.
Alongside, educating and sensitising all of our stakeholders on the need to conserve natural resources
is an ongoing process. We solicit suggestions from our employees at all levels on how to better our
environment protection measures.
Given the acute water shortage that we face in the hinterland, we have begun several rain-water
harvesting projects. We have collected rain-water in the lower benches of some of our captive
limestone mines. Effective water recharging projects have been implemented. We have created
several water bodies in the catchment areas for rain-water storage and ground water recharging.
There is an additional upside as these projects help provide water to communities that live close to
our Plants.
Large scale plantations in the mines, plants, colonies and surrounding areas provide a lush green
cover and are a reflection of our respect for the environment.
Your Directors and all of your Company’s employees are totally committed to sustainable development.

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 DIRECTORS’ REPORT TO THE SHAREHOLDERS
Dear Shareholders,
Your Directors are pleased to present the 6th Annual Report alongwith the Audited Accounts of your Company
for the year ended 31st March, 2006.
FINANCIAL RESULTS
(Rs. in Crores)
2005-06 2004-05

Gross Turnover 3,785.29 3,057.92

Gross Profit 501.62 265.02
Less: Depreciation 216.03 221.78
Profit before Tax & Diminution 285.59 43.24
Provision for diminution — 76.84
Profit/(Loss) before Tax 285.59 (33.60)
Tax expenses 55.83 (36.45)
Profit after Tax 229.76 2.85
Add:
Balance brought forward from Previous Year 10.11 17.92
Surplus available for Appropriation 239.87 20.77
Appropriation:
Debenture Redemption Reserve 9.45 —
General Reserve 25.00 —
Proposed Dividend 21.79 9.33
Corporate Tax on Dividend 3.06 1.33
Balance transferred to Balance Sheet 180.57 10.11

(The accounts for the year under review include the performance of the erstwhile Narmada Cement Company Limited (NCCL) for the period
1st October, 2005 to 31st March, 2006 and are therefore not comparable with the previous years’ figures)

For the year under review, your Company earned revenues of Rs.3,299.45 crores compared to Rs.2,606.90 crores
in the previous year. After providing for Interest of Rs.89.64 crores (Rs.106.88 crores) and Depreciation of
Rs.216.03 crores (Rs. 221.78 crores), the Profit before Tax stood at Rs.285.59 crores (Rs.43.24 crores). Profit
before tax and provision for diminution in value of investments Rs.NIL (Rs76.84 crores) stood at
Rs.285.59 crores {(Rs.33.60 crores)}.Profit after tax stood at Rs.229.76 crores (Rs2.85 crores).

DIVIDEND
Your Directors have recommended a dividend of Rs. 1.75 per share and seek your approval for the same. The
cash outgo on account of the dividend to be paid to the shareholders will be Rs. 24.85 crores (including
dividend tax) vis-a-vis Rs.10.66 crores in the previous year.

REVIEW OF OPERATIONS
During the year under review, your Company’s aggregate sales volumes recorded a growth of 2.5 %, increasing
from 15.17 MMT in the previous year to 15.55 MMT. Realisation was also up by 23.50 %. The exports mix saw
a rising share of cement, which constitutes 57% of exports.
Lower clinker exports and extended shutdowns at your Company’s plants have resulted in lower effective
capacity utilisation at 89% compared to 91% during the previous year. Unprecedented floods in Maharashtra
and Gujarat, which constitute around 50% of your Company’s domestic market, constrained the performance
of your Company during the second quarter of the year under review.

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Increase in power and freight costs also had an adverse impact on the operating costs at your Company’s plants.
To address the issue of increasing power costs, your Directors have approved the setting up of captive thermal
power plants at your Company’s Units in Kovaya (Gujarat) and Hirmi (Chhattisgarh). These are expected to
be commissioned by March, 2008. Once commissioned, these power plants will lead to reduced power cost.
To optimise freight costs, your Company continuously revisits its despatch mix of rail, road and water ways.
CORPORATE DEVELOPMENT
At a hearing held on 15th May, 2006, the Board for Industrial and Financial Reconstruction (BIFR) approved
the Scheme for the Amalgamation of NCCL with your Company (the Scheme). The Scheme was made
effective from 1st June, 2006.
The entire undertaking of NCCL is transferred to your Company with effect from 1st October, 2005, the
Appointed Date for the Scheme. The financial statements of your Company for the year under review include
that of NCCL for the period 1st October, 2005 to 31st March, 2006. The financial statements for the prior
period, i.e from 1st April, 2005 to 30th September, 2005 are included in your Company’s Consolidated Financial
Statements for the year under review.
In terms of the Scheme, your Company’s shareholding in NCCL has been cancelled. The remaining minority
shareholders of NCCL have been allotted 87,258 equity shares of Rs.10/- each, credited as fully paid-up of your
Company in the ratio of 1(one) equity share of Rs.10/- each, of your Company, for every 18 (eighteen) equity
shares of Rs.10/- each in NCCL.
RESEARCH AND DEVELOPMENT
Your Company’s research and development efforts are aimed towards conservation of energy and materials
development. Your Company is evaluating the use of Mineralisers and Fused Slags, apart from optimising ESP/
Plant performance.
HUMAN RESOURCES
We fully recognise that people are the lifeline of our Organisation. Hence we invest heavily in people, people-
processes and in skill development. In the Chairman’s letter, Group-wide initiatives to build a meritocracy
have been detailed. All these processes, such as Values Workshop, talent management, job analysis and
evaluation and performance management, among others, have been implemented at your Company as well.
Continuous learning is a thrust area. At Gyanodaya, our Management Learning Institute, several executives
underwent training programmes that helped build new competencies and hone current competencies.
To strengthen the Performance Management Process, Performance Management Workshops have been conducted
based on Corporate H.R. guidelines, to cover all Management staff at various locations. Perfomance Champions
have been identified to strengthen the process.
Common HR Policies evolved in the Cement Business facilitate movement of people for career growth.
CORPORATE GOVERNANCE
A separate section on Corporate Governance, in line with Clause 49 of the Listing Agreement with the stock
exchanges, forms a part of this Report.The relevant Certificate dated 12th July, 2006 from your Company’s
Statutory Auditor is annexed and forms part of this Report.
SUBSIDIARY COMPANIES
In terms of Section 212 of the Companies Act, 1956, the Accounts alongwith the Report of Directors and the
Auditors’ Report of your Company’s subsidiaries viz. Dakshin Cements Limited (Dakshin) and UltraTech
Ceylinco (Pvt) Ltd. (UltraTech Ceylinco) are annexed to this Report.
In keeping with the provisions of Accounting Standard 21 (AS 21) and Clause 32 of the Listing Agreement,
the duly audited Consolidated Financial Statements have been prepared after considering the financial statements
of your Company’s subsidiaries viz. NCCL (for the period 1st April, 2005 to 30th September, 2005), Dakshin
and UltraTech Ceylinco.

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FINANCE
Your Company continues to enjoy the AA+/Stable rating from CRISIL.
During the year under review, your Company raised long term foreign currency loans aggregating
USD 20 million (Rs. 89 crores) by way of External Commercial Borrowings. Your Company also raised
Rs.100 crores by way of privately placed debentures.
During the year under review, the net repayment of debt was Rs. 167 crores. On account of repayment of high
cost debts and better working capital management, interest costs came down by 16% compared to the previous
year.
Your Company has not invited or renewed deposits from the public/shareholders in accordance with
Section 58A of the Companies Act, 1956.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
Information on conservation of energy, technology absorption and foreign exchange earnings and outgo,
stipulated under Section 217(1)(e) of the Companies Act, 1956 is set out in a separate statement, as an
Annexure to this Report.
The particulars of employees, required under Section 217(2A) of the Companies Act, 1956 are given as an
Annexure to this Report.
DIRECTORS’ RESPONSIBILITY STATEMENT
Your Directors wish to inform you that the Audited Accounts for the year under review are in conformity with
the requirements of the Companies Act, 1956 and the Accounting Standards. The financial statements reflect
fairly the form and substance of transactions carried out during the year under review and reasonably present
your Company’s financial condition and results of operations.
Your Directors confirm that:
(i) in the presentation of the Annual Accounts, applicable accounting standards have been followed;
(ii) the accounting policies have been consistently applied and reasonable, prudent judgement and estimates
are made so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2006 and
of the profit for the financial year ended 31st March, 2006;
(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for
preventing and detecting frauds and other irregularities;
(iv) the Annual Accounts of your Company have been prepared on a going concern basis.

DIRECTORS
Mr. Girish M. Dave was appointed as an Additional Director by the Board at the meeting held on 7th July, 2006,
to hold office till the conclusion of the ensuing Annual General Meeting. A notice in writing proposing his
appointment as Director pursuant to Section 257 of the Companies Act, 1956 has been received from a
Member.
Mr. A. R. Gandhi resigned from the Board of your Company with effect from 7th July, 2006. The Board places
on record its appreciation for the services rendered by Mr. Gandhi during his tenure as a member of the Board.
Mr. R.C.Bhargava, Mr. D. D. Rathi and Dr. S. Misra retire from office by rotation and being eligible, offer
themselves for re-appointment.
A brief resume, expertise and details of other directorships of these Directors are attached along with the
Notice for the ensuing Annual General Meeting.

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AUDITORS
M/s S.B. Billimoria & Co., Chartered Accountants, Mumbai and M/s G.P. Kapadia & Co., Chartered
Accountants, Mumbai were appointed Joint Statutory Auditors of your Company from the conclusion of the
previous Annual General Meeting until the conclusion of the ensuing Annual General Meeting.
M/s S. B. Billimoria & Co. and M/s G.P. Kapadia & Co., being eligible, offer themselves for re-appointment.
The Board proposes the re-appointment of M/s S.B. Billimoria & Co. Chartered Accountants, Mumbai and
M/s G.P. Kapadia & Co. Chartered Accountants, Mumbai as Joint Statutory Auditors of your Company
based on the recommendation of the Audit Committee, to hold office from the conclusion of the ensuing
Annual General Meeting until the conclusion of the next Annual General Meeting.
The Board proposes the appointment of M/s. Haribhakti & Co., Chartered Accountants, Mumbai as the
Branch Auditors of your Company’s Units at Jafrabad and Magdala in Gujarat and Ratnagiri in Maharashtra,
based on the recommendation of the Audit Committee, to hold office from the conclusion of the ensuing
Annual General Meeting until the conclusion of the next Annual General Meeting. In terms of the provisions
of the Companies Act, 1956, the Board also seeks your approval for the appointment of Branch Auditors in
consultation with your Company’s Statutory Auditors, for any other Branch / Unit of your Company, which
may be opened / acquired in future, in India or abroad.
Resolutions seeking your approval on these items are included in the Notice convening the Annual General
Meeting.
COST AUDITOR
Pursuant to the provisions of Section 233B of the Companies Act, 1956, your Directors have appointed
M/s N.I. Mehta & Co., Cost Accountants, Mumbai as the Cost Auditors to conduct the Cost Audit of your
Company for the financial year ending 31st March, 2007, subject to the approval of the Central Government.
APPRECIATION
Your Directors place on record their appreciation of the assistance and guidance provided by the various
Ministries, the Central and State Governments and all Regulatory Bodies. Your Directors also thank the
financial institutions and banks for their support.
Your Directors also acknowledge the commitment and contribution of your Company’s employees .
Your involvement as shareholders is greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board

Mumbai Kumar Mangalam Birla

7th July, 2006 Chairman

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 ANNEXURE TO THE DIRECTORS’ REPORT
Statement u/s 217(1) (e) of the Companies Act, 1956
A. CONSERVATION OF ENERGY
a) Energy Conservation Measures taken
— Installation of VSD panels
— Installation of belt bucket elevator for feeding Raw Meal into silo
— Modification of Cyclone inlet
— Installation of LRS
— Optimisation of Plant lighting
— Flat belts in Cement mill Area
b) Additional investments and proposals being implemented for reduction of consumption of energy
— Installation of VSD panels
— Installation of Variable Speed Drives
— Replacement of Preheater fans with energy saving PH fans
— Usage of Humicool fills for P&V system
c) Impact of measures at (a) and (b) above for reduction of energy consumption and consequent
impact on the cost of production of goods
The proposals stated above shall result in reduction in power consumption and corresponding
reduction in the cost of production
d) Total energy consumption and energy consumption per unit of production as per FORM-A
B. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATIONS
1. Efforts in brief, made towards technology absorption, adaptation and innovation:
• Participation in national and international conferences
• Imparting training to personnel by foreign technicians and Indian experts in various
manufacturing techniques
2. Benefits derived as a result of the above efforts:
• Improvement in existing processes and reducing consumption of scarce raw materials and fuel
• Cost reduction
• Market Leadership
3. Information regarding technology imported during the last 5 years : Nil
FORM - B
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
Evaluation of use of
• Mineralisers
• Nonferrous sludge as additive
• Fused slag
• Flue dust as additive
• Increased use of Fly Ash Content in PPC without affecting quality
• Use of CFD technique for optimising ESP Performance
2. Benefits derived as a result of the above R&D
The above initiatives have resulted in Energy Conservation , reduction in relative cost of
Production and reduction in Emission levels
3. Future plan of action
• Commercialisation of alternative fuels
• Optimisation of chemistry of raw mix
Rs. in Crores
4. Expenditure on R&D 2005-06 2004-05
a. Capital Expenditure 0.58 0.49
b. Recurring Expenditure 5.18 2.77
c. Total expenditure 5.76 3.26
d. Total R& D expenditure as % of turnover 0.15 0.10
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on foreign exchange earnings and outgo is contained in Schedule 22(6) and (5) of the
Accounts.
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 FORM A
TOTAL ENERGY CONSUMPTION AND ENERGY CONSUMPTION PER UNIT OF PRODUCTION
A. Power and Fuel Consumption :
Current Year Previous Year
2005-06 2004-05
1. Electricity
(a) Purchased
Unit 000 Kwh 423050 288469
Total Amount Rs. Crores 169.64 122.00
Rate/unit Rs. 4.01 4.23
(b) Own generation**
(i) Through Diesel generator
Unit 000 Kwh 305267 291512
Units(Kwh) per Ltr. of fuel oil 4.15 4.10
Cost/Unit Rs. 4.27 3.61
(ii) Through Steam Turbine/Generator
Unit 000 Kwh 256036 318523
Units(Kwh) per kg of coal 0.76 0.89
Cost/Unit Rs. 1.41 1.32
(iii) Through Steam Turbine/Generator
Unit 000 Kwh 292707 306873
Units(Kwh) per kg of Naphtha 4.89 4.41
Cost/Unit Rs. 5.28 4.63
2. Coal (Slack,Steam & ROM including lighting Coal)
For Co-generation of Steam & Power
Quantity Tonnes 335008 357065
Total Cost Rs. Crores 29.36 37.17
Average rate Rs./Tonnes 876 1041
For Process in Cement Plants
Quantity Tonnes 1981134 1912353
Total Cost Rs. Crores 407.98 395.03
Average rate Rs./Tonnes 2059 2066
3. Furnace Oil (Including Naphtha)
Quantity K. Ltrs 159240 171897
Total amount Rs. Crores 256.82 222.62
Average rate Rs./K. ltr 16128 12951
4. Light Diesel Oil (LDO)
Quantity K. Ltrs 1508 1004
Total amount Rs. Crores 4.03 1.87
Average rate Rs./K. ltr 26710 18679
5. High Speed Diesel Oil (HSD)
Quantity K. Ltrs 288 293
Total amount Rs. Crores 0.89 0.67
Average rate Rs./K. ltr 31004 22700
B. Consumption per unit of production:
Product : Cement
Electricity # Kwh 88.70 86.98
Furnace oil Ltr 0.22 0.26
Coal Tonne 0.134 0.132
** Excludes Auxillary & Wheeling
# Excludes non production power consumption
(Current year figures include that of NCCL for the period 1st October, 2005 to 31st March, 2006 and are therefore not
comparable with previous year figures)
For and on behalf of the Board
Mumbai Kumar Mangalam Birla
7th July, 2006 Chairman

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 INFORMATION U/S 217 (2A) OF THE COMPANIES ACT,1956, READ WITH THE COMPANIES (PARTICULARS OF EMPLOYEES) RULES,1975 (AS AMENDED) AND FORMING PART OF THE
DIRECTORS’ REPORT FOR THE YEAR ENDED 31ST MARCH, 2006
(A) EMPLOYED THROUGHOUT THE FINANCIAL YEAR UNDER REVIEW AND WERE IN RECEIPT OF REMUNERATION FOR THE FINANCIAL YEAR IN THE AGGREGATE OF NOT LESS
THAN Rs.24,00,000/- P.A.
Sl. Name Age Qualification Designation Date of Experience Gross Particulars of Last Employment,
No Yrs Commencement as on Remuneration Employer, Last Post, No.of Yrs.
of Employment 31-03-2006 (Rs.)
1 Bajaj J. 40 B.Com, ACA Jt. President 01-04-2005 17 yrs 3,174,350 Grasim Industries Limited
(Finance) Jt. President, 15 yrs 7 months
2 Birla K. C. 47 B.Com, FCA Chief Financial 06-07-2004 21 yrs 4,374,324 Grasim Industries Limited
Officer Jt. President, 19 yrs 3 months
3 Chakravarthy S. 58 BE (Mech) President 01-04-2004 35 yrs 2,494,192 Larsen & Toubro Limited
Vice President,
19 yrs 6 months
4 Jain A. K. 61 BE (Mech) President 01-04-2004 38 yrs 2,613,696 Larsen & Toubro Limited
Vice President,
9 yrs 3 months
5 Misra S.# 58 BA (Hons) Manager & CEO 06-07-2004 38 yrs 18,409,337 Grasim Industries Limited
Business Head (Cement),
5 yrs 2 months
6 Razdan D. 59 MA, Dip. In Senior Executive 01-04-2004 37 yrs 3,729,551 Larsen & Toubro Limited
Marketing Management, President Executive Vice President,
Dip in Basic Management 9 yrs 6 months
7 Reddy C. S. 60 B.Tech (Mech) President 01-04-2004 36 yrs 3,011,923 Larsen & Toubro Limited
Vice President,
8 yrs 8 months

(43)
8 Shukla V. 52 MA (PM & IR) Chief People Officer 03-01-2005 27 yrs 3,208,717 Saurashtra Cement Limited -
Corp. Director
HRD, Q & Com -
ANNEXURE TO THE DIRECTORS’ REPORT

9 yrs 7 months
(B) EMPLOYED FOR PART OF THE FINANCIAL YEAR UNDER REVIEW AND WERE IN RECEIPT OF REMUNERATION AT THE RATE OF NOT LESS THAN Rs. 2,00,000/- PER MONTH
Sl. Name Age Qualification Designation Date of Date of Experience Gross Particulars of Last Employment,
No Yrs Commencement of Cessation of As on Remuneration Employer, Last Post, No.of Yrs.
Employment Employment 31-03-2006 (Rs.)
1 Kapoor B. 60 BA, MBA Vice President - 01-04-2004 14-10-2005 35 yrs 2,224,532 Larsen & Toubro Limited
Marketing (East) Vice President,
10 yrs, 10 months
2 Mayekar M. M. 36 B.Com Supervisor 01-04-2004 30-04-2005 16 yrs 205,775 Larsen & Toubro Limited
Assistant, 9 yrs 11 months
3 Prasad H.S. 58 B.A. Assistant Manager 01.04.2004 30.04.2005 37 Yrs 238,832 Larsen & Toubro Ltd.
Asst.Manager , 21 Yrs
4 Muralidharan V. M. 60 B.Sc, DMIT Senior Executive 01-04-2004 28-02-2006 38 yrs 5,716,965 Larsen & Toubro Limited
President EVP - 19 yrs 3 months
1 Remuneration received includes salary with allowances, bonus & ex-gratia, performance linked payment, Contribution to Provident and Superannuation Fund, reimbursement of cash perks , LTA and
value of amenities provided as per Income Tax Rules.
2 Employment is non-contractual in all the above cases subject to one month/three month’s notice from either side depending upon the office held by the employee, except in the case marked by (#).
3 None of the above employees is a relative of any Director of the Company.
For and on behalf of the Board
Mumbai Kumar Mangalam Birla
7th July, 2006 Chairman
 AUDITORS’ REPORT
TO THE MEMBERS OF ULTRATECH CEMENT LIMITED
1. We have audited the attached Balance Sheet of ULTRATECH CEMENT LIMITED as at 31st March, 2006,
the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date,
both annexed thereto. These financial statements are the responsibility of the Company’s Management. Our
responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. These
Standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by the Management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued by the Central Government
in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above :
a) We have obtained all the information and explanations, which to the best of our knowledge and belief
were necessary for the purpose of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as
appears from our examination of those books;
c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are
in agreement with the books of account;
d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt
with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of
the Companies Act, 1956;
e) In our opinion and to the best of our information and according to the explanations given to us, the
said accounts give the information required by the Companies Act, 1956 in the manner so required
and give a true and fair view in conformity with the accounting principles generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2006;
ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that
date and
iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on
that date.
5. On the basis of the written representations from the directors as on 31st March, 2006, taken on record by
the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2006 from
being appointed as a director under Section 274(1)(g) of the Companies Act, 1956.

For S. B. BILLIMORIA & CO. For G.P. KAPADIA & CO.

Chartered Accountants Chartered Accountants

NALIN M. SHAH ATUL B. DESAI

Partner Partner
(Membership No.15860) (Membership No.30850)
Mumbai, 7th July, 2006

(44)
 ANNEXURE TO THE AUDITORS’ REPORT
(Referred to in paragraph 3 of our report of even date)
(i) The nature of the Company’s business/activities during the year is such that clauses (x), (xii), (xiii),
(xiv), (xviii) and (xx) of CARO are not applicable.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details
and situation of fixed assets.

(b) Some of the fixed assets were physically verified during the year by the Management in accordance
with a programme of verification, which in our opinion provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and explanations given to us, no
material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of
the fixed assets of the Company and such disposal has, in our opinion, not affected the going
concern status of the Company.

(iii) In respect of its inventories:

(a) As explained to us, inventories were physically verified during the year by the Management at
reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of
physical verification of inventories followed by the Management were reasonable and adequate in
relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has
maintained proper records of its inventories and no material discrepancies were noticed on physical
verification.

(iv) According to the information and explanations given to us, the Company has not or taken granted secured
or unsecured loans to/from companies, firms or other parties covered in the Register maintained under
Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, there are adequate internal
control systems commensurate with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods. We have not observed any major
weaknesses in such internal controls.

(vi) To the best of our knowledge and belief and according to the information and explanations given to us,
there were no contracts or arrangements that needed to be entered in the Register maintained under
Section 301 of the Companies Act, 1956.

(45)
ANNEXURE TO THE AUDITORS’ REPORT
(vii) In our opinion and according to the information and explanations given to us, the Company has not
accepted deposits in terms of the provisions of Sections 58A and 58AA or any other relevant provisions of
the Companies Act, 1956.

(viii) In our opinion, the Company has an adequate internal audit system commensurate with the size and the
nature of its business.

(ix) We have broadly reviewed the books of account and records maintained by the Company relating to the
manufacture of cement, pursuant to the order made by the Central Government for the maintenance of
cost records under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie
the prescribed accounts and records have been made and maintained. We have, however, not made a
detailed examination of the records with a view to determining whether they are accurate or complete.

(x) In respect of Statutory dues:

(a) According to the information and explanations given to us, the Company has generally been regular
in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection
Fund, Employees’ State Insurance, Income-Tax, Sales-Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and any other material statutory dues with the appropriate authorities during the
year.

(b) According to the information and explanations given to us, no undisputed amounts payable in
respect of the aforesaid dues were outstanding as at 31st March, 2006 for a period of more then six
months from the date they became payable.

(c) According to the information and explanations given to us, details of disputed Sales Tax, Income
Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited
as on 31st March, 2006 on account of any dispute are given below:

Name of Statute Nature of the dues Amount Period to which Forum where dispute
(Rs. in Crs.) the amount relates is pending
(Assessment years)

Sales Tax Act Sales Tax and interest 16.36 1994-1995 Supreme Court
12.52 1985-2004 Tribunal (s)
13.32 1999-2000, Appellate Authorities
2001-2004
3.38 1998-2004, Assessing Officers
2005-2006
Central Excise Act Excise Duty, penalty 1.00 1994-1995, Supreme Court
and interest 2000-2006
15.04 1994-2004 Tribunal (s)
1.88 1996-2005 Appellate Authorities
Customs Act Custom Duty and 30.41 2002-2006 Tribunal (s)
penalty 1.19 2002-2004 Assessing Officers
Land Revenue Act Surface Rent and 2.58 1987-2006 Supreme Court
interest 0.59 2003-2006 Assessing Officers

(xi) In our opinion and according to the information and explanations given to us, the Company has not
defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(46)
ANNEXURE TO THE AUDITORS’ REPORT
(xii) In our opinion and according to the information and explanations given to us, the terms and conditions of
the guarantees given by the Company for loans taken by others from a bank, are not prima facie prejudicial
to the interests of the Company.

(xiii) To the best of our knowledge and belief and according to the information and explanations given to us, in
our opinion, term loans availed by the Company were, prima facie, applied by the Company during the year
for the purposes for which the loans were obtained, other than temporary deployment pending application.

(xiv) According to the information and explanations given to us, and on an overall examination of the Balance
Sheet of the Company, funds raised on short term basis have, prima facie, not been used during the year for
long term investment.
(xv) According to the information and explantations given to us and the records examined by us, securities/
charges have been created in respect of the debentures issued.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, no
fraud on or by the Company was noticed or reported during the year.

For S. B. BILLIMORIA & CO. For G.P. KAPADIA & CO.

Chartered Accountants Chartered Accountants

NALIN M. SHAH ATUL B. DESAI

Partner Partner
(Membership No.15860) (Membership No.30850)
Mumbai, 7th July, 2006

(47)
 BALANCE SHEET AS AT MARCH 31, 2006
Rs. in Crores
Previous
Schedules Year
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital 1A 124.40 124.40
Share Capital Suspense 1B 0.09 —
Reserves and Surplus 2 913.78 942.73
1,038.27 1,067.13

Loan Funds
Secured Loans 3 1,221.93 1,253.35
Unsecured Loans 4 229.90 278.03
1,451.83 1,531.38
Deferred Tax Liabilities (Net) 576.96 581.71
TOTAL 3,067.06 3,180.22

APPLICATION OF FUNDS
Fixed Assets
Gross Block 5 4,605.38 4,304.29
Less : Depreciation 2,068.21 1,755.39
Net Block 2,537.17 2,548.90
Capital Work-in-Progress 141.03 48.18
2,678.20 2,597.08

Investments 6 172.39 184.79

Current Assets, Loans and Advances
Inventories 7 379.57 283.71
Sundry Debtors 8 172.55 171.95
Cash and Bank Balances 9 61.60 56.26
Loans and Advances 10 158.80 325.73
772.52 837.65

Less:
Current Liabilities & Provisions
Current Liabilities 11 516.87 415.43
Provisions 12 39.18 23.87
556.05 439.30
Net Current Assets 216.47 398.35
TOTAL 3,067.06 3,180.22
Accounting Policies and Notes on Accounts 21 & 22

In terms of our report attached. KUMAR MANGALAM BIRLA

Chairman

For S. B. BILLIMORIA & CO. For G. P. KAPADIA & CO. S. MISRA RAJASHREE BIRLA
Chartered Accountants Chartered Accountants Manager & CEO R. C. BHARGAVA
Y. M. DEOSTHALEE
NALIN M. SHAH ATUL B. DESAI K. C. BIRLA S. MISRA
Partner Partner Executive President & CFO J. P. NAYAK
S. RAJGOPAL
S. K. CHATTERJEE D. D. RATHI
Mumbai, July 7, 2006 Company Secretary Directors

(48)
 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2006
Rs. in Crores
Previous
Schedules Year
INCOME
Gross Sales 3,785.29 3,057.92
Less : Excise Duty 485.84 451.02
Net Sales 3,299.45 2,606.90
Interest & Dividend Income 13 6.99 3.70
Other Income 14 30.01 17.37
Increase / (Decrease) in Stocks 15 39.12 20.91
3,375.57 2,648.88

EXPENDITURE
Raw Materials Consumed 16 282.25 265.34
Manufacturing Expenses 17 1,205.15 1,060.83
Purchase of Finished Products 265.32 193.93
Payments to and Provisions for Employees 18 92.26 72.96
Selling, Distribution, Administration and Other Expenses 19 939.33 683.92
Interest 20 89.64 106.88
Depreciation 216.03 221.78
3,089.98 2,605.64

Profit Before Tax Expenses and Diminution 285.59 43.24

Less: Provision for Diminution in Value of Investment — 76.84
Profit/(Loss) Before Tax Expenses 285.59 (33.60)
Income Tax Expenses
Provision for Current Tax (including provision for 57.00 31.55
Wealth Tax Rs.0.07 Crore (Previous Year Rs. 0.02 Crore),
and interest of Rs. 0.35 Crore (Previous Year Nil))
Deferred Tax (4.75) (68.00)
Fringe Benefit Tax 3.58 —
Profit After Tax 229.76 2.85
Balance brought forward from Previous Year 10.11 17.92
Profit Available for Appropriation 239.87 20.77

Appropriations
Proposed Dividend 21.79 9.33
Corporate Dividend Tax 3.06 1.33
Debenture Redemption Reserve 9.45 —
General Reserve 25.00 —
Balance Carried to Balance Sheet 180.57 10.11
239.87 20.77

Basic and Diluted Earnings per Equity Share (in Rs.) 18.46 0.23
Face Value Per Equity Share (in Rs.) 10.00 10.00
Weighted Average Number of Equity Shares (in Nos.) 124,485,879 124,398,621
Accounting Policies and Notes on Accounts 21 & 22

In terms of our report attached. KUMAR MANGALAM BIRLA

Chairman

For S. B. BILLIMORIA & CO. For G. P. KAPADIA & CO. S. MISRA RAJASHREE BIRLA
Chartered Accountants Chartered Accountants Manager & CEO R. C. BHARGAVA
Y. M. DEOSTHALEE
NALIN M. SHAH ATUL B. DESAI K. C. BIRLA S. MISRA
Partner Partner Executive President & CFO J. P. NAYAK
S. RAJGOPAL
S. K. CHATTERJEE D. D. RATHI
Mumbai, July 7, 2006 Company Secretary Directors

(49)
 CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2006
Rs. in Crores
A Cash Flow from Operating Activities: March 31, 2006 March 31, 2005
Profit Before Tax 285.59 43.24
Adjustments for:
Depreciation 216.03 221.78
Miscellaneous Expenditure Written off — 15.52
Provision for Doubtful Debts and Advances / (Written back) (2.81) 2.81
Bad Debts Written off 0.17 4.65
Credit Balances Written back (9.60) (0.55)
Interest & Dividend Income (6.99) (3.70)
Interest Expense 89.64 106.88
Unrealised Foreign Exchange Loss 0.79 15.86
(Profit)/ Loss on Sale of Fixed Assets (0.21) 0.17
(Profit)/ Loss on Sale of Current Investments (0.08) —
Operating Profit Before Working Capital Changes 572.53 406.66
Adjustments for:
(Increase)/decrease in Inventories (43.05) (60.54)
(Increase)/decrease in Sundry Debtors (11.92) 0.97
(Increase)/decrease in Loans and Advances 10.78 (27.40)
Increase/(decrease) in Liabilities and Provisions 78.21 52.72
Cash Generated from Operations 606.55 372.41
Current Taxes paid (51.89) (34.99)
Fringe Benefit Tax Paid (3.03) —
Net Cash from Operating Activities 551.63 337.42
B Cash Flow from Investing Activities:
Purchase of Fixed Assets (217.29) (69.30)
Sale of Fixed Assets 1.13 0.45
(Increase) / decrease in Current Investments (148.00) (23.54)
Profit on Sale of Current Investments 0.08 —
Loans/deposits with Subsidiaries — 1.51
Interest and Dividend Received 6.84 3.70
Net Cash used in Investing Activities (357.24) (87.18)
C Cash Flow from Financing Activities:
Proceeds from Issue of Share Capital — (0.51)
Repayment of Long Term Borrowings (167.33) (612.00)
Proceeds from Long Term Borrowings 217.15 549.63
Repayment of Short Term Borrowings (Net) (137.86) (57.75)
Interest Paid (92.32) (108.16)
Dividend Paid (9.33) (6.22)
Corporate Dividend Tax (1.33) (0.80)
Net Cash used in Financing Activities (191.02) (235.81)
Net Increase in Cash and Cash Equivalents (A + B + C) 3.37 14.43
Cash and Cash Equivalents at the Beginning of the Year 56.26 41.83
Cash and Cash Equivalents transferred from NCCL as on 1.10.05 1.97 —
Cash and Cash Equivalents at the End of the Year 61.60 56.26
Notes:
1. Cash flow statement has been prepared under the indirect method as set out in Accounting Standard - 3 issued by
the Institute of Chartered Accountants of India.
2. Purchase of fixed assets includes movements of capital work in progress between the beginning and the end of the year.
3. Previous year’s figures regrouped/ recasted wherever necessary.
In terms of our report attached. KUMAR MANGALAM BIRLA
Chairman

For S. B. BILLIMORIA & CO. For G. P. KAPADIA & CO. S. MISRA RAJASHREE BIRLA
Chartered Accountants Chartered Accountants Manager & CEO R. C. BHARGAVA
Y. M. DEOSTHALEE
NALIN M. SHAH ATUL B. DESAI K. C. BIRLA S. MISRA
Partner Partner Executive President & CFO J. P. NAYAK
S. RAJGOPAL
S. K. CHATTERJEE D. D. RATHI
Mumbai, July 7, 2006 Company Secretary Directors

(50)
 SCHEDULES
Rs. in Crores
Previous
SCHEDULE 1A Year
SHARE CAPITAL
Authorised
130,000,000 Equity Shares of Rs. 10 each 130.00 130.00

Issued, Subscribed and Paid up 124.40 124.40

124,398,621 Equity Shares of Rs. 10 each fully paid-up
Of the above, 99,521,437 equity shares of Rs. 10 each issued
as fully paid-up for acquiring the Cement business pursuant to
Scheme of Arrangement without payment being received in cash
(58,464,717 shares are held by Grasim Industries Limited
(Holding Company), {Prev. Year - 58,464,717} and 5,077,603 shares
are held by Samruddhi Swastik Trading & Investment Limited
(Subsidiary Company of Grasim Industries Limited),
{Prev.Year - 5,077,603}).
124.40 124.40

SCHEDULE 1B
SHARE CAPITAL SUSPENSE
87,258 Equity shares of Rs. 10 each to be issued as fully paid-up pursuant to 0.09 —
the Scheme of Amalgamation without payment being received in
cash. (See Note B1)
0.09 —

SCHEDULE 2
RESERVES & SURPLUS Rs. in Crores
Balance *Balance Additions Deduction/ Balance
as at on Merger during Adjustments as at
31st As on the during 31st
March, 05 01.10.05 year the year March, 06
Capital Reserve 24.87 0.15 — — 25.02
Cash Subsidy Reserve 0.10 — — — 0.10
Debenture Redemption Reserve 129.43 — 9.45 — 138.88
General Reserve 778.22 (234.01) 25.00 — 569.21
Surplus as per Profit & Loss Account 10.11 — 229.76 (59.30) 180.57
942.73 (233.86) 264.21 (59.30) 913.78
Previous Year 950.54 — 2.85 (10.66) 942.73
*See Note B 1

SCHEDULE 3
SECURED LOANS
Non-Convertible Debentures (See Note B 8a) 1,018.55 999.75
Other Loans: (See Note B 8b)
Loans from Financial Institutions — 5.82
Foreign Currency Loan 89.23 79.50
Loans from Banks:
Cash Credit / Working Capital Borrowings from Banks Secured by
Hypothecation of Stocks and Book debts 14.15 68.28
Other Loans (See Note B 8b) 100.00 100.00
1,221.93 1,253.35

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 SCHEDULES
Rs. in Crores
Previous
SCHEDULE 4 Year
UNSECURED LOANS
Short Term Loans from Banks — 76.06
Sales Tax Deferment Loan 229.90 201.97
229.90 278.03

SCHEDULE 5
FIXED ASSETS Rs. in Crores
PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK

As at Assets Additions Deductions/ As at As at Cum. Dep For the Deductions/ Upto As at As at

31.3.05 transferred Adjustments 31.3.06 31.3.05 on assets year Adjustments 31.3.06 31.3.06 31.3.05
from NCCL transferred
01.10.05 from NCCL
01.10.05
Freehold land 66.97 — 2.56 — 69.53 — — — — — 69.53 66.97
Leasehold land 16.32 3.71 0.06 — 20.09 3.89 0.64 0.49 — 5.02 15.07 12.43
Buildings 448.06 16.70 3.82 0.02 468.56 120.05 4.92 12.88 (0.20) 138.05 330.51 328.01
Railway sidings 159.35 — 0.31 — 159.66 52.40 — 7.51 — 59.91 99.75 106.95
Plant & machinery 3,461.45 168.19 112.29 22.58 3,719.35 1,474.96 112.52 181.76 19.66 1,749.58 1,969.77 1,986.49
Furniture & fixtures 66.44 4.21 9.67 2.47 77.85 38.00 3.06 5.22 1.86 44.42 33.43 28.44
Jetty 76.63 3.97 — — 80.60 61.11 0.33 3.97 — 65.41 15.19 15.52
Vehicles 9.07 0.52 1.09 0.94 9.74 4.98 0.42 1.01 0.59 5.82 3.92 4.09
Total 4,304.29 197.30 129.80 26.01 4,605.38 1,755.39 121.89 212.84 21.91 2,068.21 2,537.17 2,548.90
Previous year 4,275.84 — 45.17 16.72 4,304.29 1,547.94 — 218.49 11.04 1,755.39

Add: Capital work-in-progress 141.03 48.18

2,678.20 2,597.08

NOTES : Rs. in Crores

A) Depreciation for the year 212.84
Add: Obsolescence 3.19
Depreciation as per Profit & Loss Account 216.03

B) 1. Leasehold Land includes Mining Rights.

2. Cost of Leasehold Land includes Rs. 6.09 Crores (Previous year Rs 6.09 Crores) for which the lease agreement
has not been executed.
3. Cost of Plant and Machinery includes Rs. 29.89 Crores (Previous year Rs. 29.89 Crores) relating to railway
wagons given on operating lease to the Railways under “Own Your Wagon Scheme”.
4. Fixed Assets include assets of Rs. 123.64 Crores (Previous Year Rs. 121.44 Crores) not owned by the Company.
5. Fixed Assets amounting to Rs. 26.72 Crores (Previous Year Rs. 26.72 Crores) are held on Co-ownership with
other Company.
6. The title deeds of some of the immovable properties transferred pursuant to the Scheme of Arrangement are yet
to be transferred in the name of the Company.

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 SCHEDULES
Rs. in Crores
SCHEDULE 6 Previous
INVESTMENTS - At Cost Year
LONG TERM
Government and Trust Securities -Unquoted — —
(Rs. 10,000, Previous Year Rs.10,000)
Pledged as Security Deposit
Shares in Subsidiary Companies- Unquoted
Fully paid-up Equity Shares of Rs. 10 each
NIL Narmada Cement Company Limited
(Previous Year 69,803,293) — 237.39
50,000 Dakshin Cements Limited (Previous Year - 50,000) 1.21 1.21
Fully paid-up Equity Shares of Sri Lankan Rupee 10 each
40,000,000 UltraTech Ceylinco (Pvt.) Ltd.
(Previous Year 40,000,000) 23.03 23.03
24.24 261.63
24.24 261.63
Less: Provision for Diminution in Value of Investment — 76.84
24.24 184.79
CURRENT - Unquoted
Units of Debt Schemes of Mutual Funds:
Description No. of Units Face Value Amount
a) Liquid Scheme - Dividend Plan:
UTI Mutual Fund 2,672,257 10 4.66
LIC Mutual Fund 4,566,339 10 5.00
DSP Merill Lynch Mutual Fund 80,602 1,000 8.06
Birla Sunlife Mutual Fund 18,039,391 10 18.07
Tata Mutual Fund 29,937 1,000 3.00
Prudential ICICI Mutual Fund 2,000,335 10 2.00
Kotak Mahindra Mutual Fund 1,840,311 10 2.25
b) Fixed Maturity Plan - Dividend Plan:
Birla Sunlife Mutual Fund 19,984,026 10 20.00
UTI Mutual Fund 15,047,759 10 15.05
Prudential ICICI Mutual Fund 10,017,937 10 10.02
Kotak Mahindra Mutual Fund 10,000,000 10 10.00
HSBC Mutual Fund 10,000,000 10 10.00
DSP Merill Lynch Mutual Fund 10,000,000 10 10.00
Standard Chartered Mutual Fund 10,038,500 10 10.04
LIC Mutual Fund 10,000,000 10 10.00
Tata Mutual Fund 5,000,000 10 5.00
ING Vysya Mutual Fund 5,000,000 10 5.00
148.15 —
172.39 184.79

Note: No. of Units of various Mutual Funds - Debt Schemes purchased and redeemed during the year are as follows:
(A) Liquid Schemes (Dividend Plan)- Birla Sunlife Mutual Fund - 525,358,908; Prudential ICICI Mutual Fund - 187,226,161;
SBI Mutual Fund - 128,532,270; LIC Mutual Fund - 177,912,670; UTI Mutual Fund - 21,031,805; DSP Merill Lynch
Mutual Fund - 1,659,168; HDFC Mutual Fund - 9,034,877; Kotak Mahindra Mutual Fund - 61,620,366; JM Mutual
Fund - 7,567,514; Standard Chartered Mutual Fund - 51,394,861; HSBC Mutual Fund - 957,845; Franklin Templeton
Mutual Fund - 109,995; Tata Mutual Fund - 1,504,009.
(B) Floating Rate Schemes (Dividend Plan)- Prudential ICICI Mutual Fund - 9,998,700; UTI Mutual Fund - 9,931,966;
LIC Mutual Fund - 16,660,920.
(C) Short Term Schemes (Dividend Plan)- Prudential ICICI Mutual Fund - 9,141,353; Franklin Templeton Mutual
Fund - 91,708.

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 SCHEDULES
Rs. in Crores
SCHEDULE 7 Previous
INVENTORIES Year
Stores & Spare parts, Packing Material, Fuels and Scrap 201.02 165.41
Raw Materials 12.74 9.36
Work-in-progress 105.97 59.35
Finished Goods 59.84 49.59
379.57 283.71

SCHEDULE 8
SUNDRY DEBTORS
Exceeding six months:
Good and Secured 8.87 1.86
Good and Unsecured 1.69 1.50
Doubtful and Unsecured 1.56 —
12.12 3.36
Less: Provision for Doubtful Debts 1.56 —
10.56 3.36
Others:
Good and Secured 89.56 48.74
Good and Unsecured 72.43 119.85
161.99 168.59
172.55 171.95

SCHEDULE 9
CASH AND BANK BALANCES
Cash Balance on Hand 0.11 0.15
Bank Balance with Scheduled Banks:
In Current Accounts 61.39 56.11
In Fixed Deposits Accounts 0.10 —
61.60 56.26

SCHEDULE 10
LOANS & ADVANCES
Secured & Considered Good
Loan against mortgage of House Property 2.23 3.07
Unsecured
Considered Good:
Loans and Advances receivable from Subsidiary Company 0.34 179.81
Deposits and Balances with Government and other Authorities
(including accrued interest ) 31.40 26.16
Advances recoverable in cash or in kind or for value to be received 124.83 113.26
Advance Income Tax (Net of Provision) — 3.43
Considered Doubtful:
Advances recoverable in cash or in kind from
- Subsidiary — 2.81
- Others 0.22 —
156.79 325.47
Less: Provision for doubtful loans and advances 0.22 2.81
156.57 322.66
158.80 325.73

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 SCHEDULES
Rs. in Crores
Previous
SCHEDULE 11 Year
CURRENT LIABILITIES
Sundry Creditors
Small Scale Industries 0.78 0.60
(To the extent identified with available information)
Parent Companies & Fellow Subsidiaries 4.09 —
Others 313.26 222.67
318.13 223.27
Security and Other Deposits 78.52 32.97
Advances from Customers 42.38 25.16
Amount transferable to Investor Education and
Protection Fund, when due
Unpaid Dividend 0.21 0.10
Other Liabilities 43.16 96.77
Interest accrued but not due on loans 34.47 37.16
516.87 415.43

SCHEDULE 12
PROVISIONS
Provision for Contingency — 3.56
Provision for Retirement Benefits 12.11 9.66
Provision for Tax (Net of Advance Tax) 2.22 —
Proposed Dividend 21.79 9.33
Corporate Dividend Tax 3.06 1.31
39.18 23.87

SCHEDULE 13
INTEREST & DIVIDEND INCOME
Interest (Gross) on others 1.28 3.60
(Tax Deducted at Source Rs. 0.11 Crore,
(Previous Year Rs. 0.62 Crore))
Dividend from Current Investments 2.22 0.10
Dividend from a Subsidiary 3.49 —
6.99 3.70

SCHEDULE 14
OTHER INCOME
Lease Rent 3.93 4.60
Insurance Claim 0.19 —
Profit on Sale of Fixed Assets (Net) 0.21 —
Profit on Sale of Current Investments (Net) 0.08 —
Exchange Rate Difference (Net) 1.00 —
Unclaimed Credit Balances Written Back 0.81 0.20
Excess Provisions Written Back (Net) 11.60 0.35
Miscellaneous Income/ receipts 12.19 12.22
30.01 17.37

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 SCHEDULES
Rs. in Crores
Previous
Year
SCHEDULE 15
INCREASE / (DECREASE) IN STOCKS
Closing Stock
Work-in-progress 105.97 59.35
Finished Goods 59.84 49.59
165.81 108.94

Opening stock
Work-in-progress 59.35 44.07
Finished Goods 49.59 41.31
Add: Stock transferred from NCCL as on 1.10.05 21.13 —
130.07 85.38
Add: Increase / (Decrease) in Excise Duty on Stocks 3.38 (2.66)
Increase / (Decrease) in Stocks 39.12 20.91

SCHEDULE 16
RAW MATERIALS CONSUMED
Opening Stock 9.36 7.21
Add: Stock transferred from NCCL as on 1.10.05 1.57 —
Purchase and Incidental Expenses 284.06 267.49
294.99 274.70
Less: Closing Stock 12.74 9.36
282.25 265.34

SCHEDULE 17
MANUFACTURING EXPENSES
Consumption of Stores, Spare Parts, Components and Packing Materials 225.27 186.29
Power & Fuel Consumed 910.11 823.12
Hire Charges of Plant & Machinery and others 4.73 2.59
Repairs to Plant & Machinery 48.19 35.36
Repairs to Buildings 3.54 1.86
Repairs to Others 13.31 11.61
1,205.15 1,060.83

SCHEDULE 18
PAYMENTS TO AND PROVISIONS FOR EMPLOYEES
Salaries, Wages and Bonus, etc. 69.26 54.09
Contribution to and Provisions for Provident and Other Funds 9.40 6.12
Welfare Expenses 13.60 12.75
92.26 72.96

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 SCHEDULES
Rs. in Crores
Previous
Year
SCHEDULE 19
SELLING, DISTRIBUTION, ADMINISTRATION
AND OTHER EXPENSES
Commission paid to Distributors and Selling Agents 7.94 8.40
Cash Discount 26.73 20.79
Freight, Handling and Other Expenses 763.08 478.99
Advertisements & Sales Promotion 46.24 67.65
Insurance 8.65 7.95
Rent (including Lease Rent) 8.79 9.67
Rates and Taxes 12.33 13.56
Stationery, Printing, Communication Expenses 7.76 7.39
Travelling and Conveyance 18.28 15.08
Legal and Professional charges 17.97 12.59
Bad Debts and Advances Written Off 0.17 6.38
Provision for Doubtful Debts and Advances — 1.08
Directors’ Fees 0.11 0.14
Power (other than related to manufacturing activity) 1.18 0.60
Exchange Rate difference (Net) — 0.23
Loss on Sale of Fixed Assets (Net) — 0.17
Miscellaneous Expenses 20.10 33.25
939.33 683.92

SCHEDULE 20
INTEREST
On Debentures and Fixed Loans 83.53 95.78
On Others loans 6.11 11.10
89.64 106.88

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 SCHEDULES
SCHEDULE 21
ACCOUNTING POLICY AND NOTES ON ACCOUNTS
A Significant Accounting Policies:
1. Basis of Accounting:
The financial statements are prepared under the historical cost convention on an accrual basis and in accordance
with the applicable mandatory Accounting Standards.
2. Fixed Assets:
Fixed assets are stated at cost (including other expenses related to acquisition and installation).
3. Foreign Currency Transactions:
Foreign currency transactions are accounted for at the rates prevailing on the date of the transaction. Foreign
currency balances outstanding as at the year end are restated at the year end rate, however, foreign currency
transactions / balances covered by forward contracts are valued at the spot rate at the inception of the contract. The
premia arising on such forward contracts is amortised as an expense or income over the life of the contract. Exchange
differences relating to fixed assets acquired from a country outside India are adjusted to the cost of the asset. Any
other exchange difference is dealt with in the Profit and Loss Account.
4. Treatment of expenditure during construction period:
Expenditure during construction period is included under Capital Work in Progress and the same is allocated to the
respective Fixed Assets on the completion of its construction.
5. Investments:
Current investments are carried at lower of cost or fair value. Long term investments are stated at cost after
deducting provisions made for any other than temporary diminution in the value.
6. Inventories:
Inventories are valued at lower of cost and net realisable value. The cost is computed on weighted average basis.
Finished goods and work-in-progress include cost of conversion and other costs incurred in bringing the inventories
to their present location and condition. Obsolete, defective and unserviceable stocks are duly provided for.
7. Leases:
a) In respect of lease transactions entered into prior to April 1, 2001, lease rentals of assets acquired are charged to
the Profit & Loss Account.
b) Lease transactions entered into on or after April 1, 2001:
i) Assets acquired under leases where the Company has substantially all the risks and rewards of ownership are
classified as finance leases. Such assets are capitalised at the inception of the lease at the lower of the fair
value or the present value of minimum lease payments and a liability is created for an equivalent amount.
Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant
periodic rate of interest on the outstanding liability for each period.
ii) Assets acquired under leases where a significant portion of the risks and rewards of ownership are retained
by the lessor are classified as operating leases. Lease rentals are charged to the Profit & Loss Account on
accrual basis.
iii) Assets leased out under operating leases are capitalised. Rental income is recognised on accrual basis over
the lease term.
(Also refer to policy on Depreciation & Amortisation)
8. Depreciation & Amortisation:
Depreciation is charged in the Accounts on the following basis:
i) Depreciation on original cost is provided on straight-line basis at the rates prescribed in Schedule XIV to the
Companies Act, 1956 except in following.:
a) Motor Cars at 14.14 % per annum.
b) Motor Cars given to employees as per Company Scheme at 17 % per annum.
c) Personal Computers & Laptops given to employees as per Company Scheme at 31 % per annum.

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 SCHEDULES
SCHEDULE 21 (Contd.)
ii) Assets acquired up to September 30, 1987, are depreciated at the rates computed under Section 205(2)(b) of the
Companies Act, 1956 pursuant to rates of depreciation prescribed in Income Tax Rules from time to time.
iii) The value of leasehold land and mining lease is amortised over the period of the lease.
iv) Assets not owned by the Company are amortised over a period of five years.
v) Expenditure incurred on Jetty is amortised over the period of the relevant agreement such that the cumulative
amortisation is not less than the cumulative rebate availed by the Company.
vi) In respect of the amounts capitalised during the year on account of foreign exchange fluctuation depreciation is
provided prospectively over the residual life of the assets.
vii) Depreciation on additions/deductions is calculated pro-rata from/to the month of additions/deductions.
9. Retirement Benefits:
Provisions for/contributions to retirement benefits schemes are made as follows:
a) Provident fund on actual liability basis.
b) Superannuation/Pension schemes on the basis of actual liability/actuarial valuation done at the year end.
Superannuation is funded with an approved fund.
c) Gratuity based on actuarial valuation done at the year end. Gratuity is funded with an approved fund.
d) Leave encashment benefit on actuarial valuation basis done at the year end.
10. Interest:
The difference between the face value and the issue price of ‘Discounted Value Non Convertible Debentures’, being
in the nature of interest, is charged to the Profit and Loss Account, on a compound interest basis determined with
reference to the yield inherent in the discount.
11. Borrowing Costs:
Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised
as part of cost of such asset till such time as the asset is ready for its intended use. A qualifying asset is an asset that
necessarily requires a substantial period of time to get ready for its intended use. All other borrowing costs are
recognised as an expense in the period in which they are incurred.
12. Provision for Current & Deferred Tax:
Provision for Current Tax is made on the basis of estimated taxable income for the current accounting period and in
accordance with the provisions as per the Income Tax Act, 1961. Deferred Tax resulting from “timing difference”
between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or
substantively enacted as on the balance sheet date. The Deferred Tax asset is recognised and carried forward only to
the extent that there is a reasonable certainty except for carried forward losses and unabsorbed depreciation which is
recognised on virtual certainty that the assets will be realised in future.
13. Sales:
a) Sales are accounted on despatch of products.
b) Export sales are accounted on the basis of date of bill of lading.
14. Provisions, Contingent Liabilities and Contingent Assets:
Provision involving substantial degree of estimation in measurement are recognised when there is a present obligation
as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not
recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial
statements.
15. Use of estimates:
The preparation of financial statements in conformity with the generally accepted accounting principles requires
estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of
financial statements and the reported amounts of revenues and expenses during the reported period. Difference
between the actual results and estimates are recognised in the period in which the results are known or materialise.
B. Notes on Accounts
1. Merger of Narmada Cement Company Limited
a. Pursuant to the Scheme of Amalgamation (the Scheme) u/s 18(1)(c ) and other applicable provisions of Sick
Industrial Companies (Special Provisions) Act, effective from October 1, 2005 (the Appointed Date), Narmada
Cement Company Limited (“NCCL” ), has been merged in the Company. The Scheme, is approved by Board

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 SCHEDULES
SCHEDULE 21 (Contd.)
for Industrial and Financial Reconstruction, New Delhi, on May 15, 2006 and has effective from June 1, 2006
(the Effective Date). NCCL business was of manufacturing and sales of clinker and cement.
b. In terms of the Scheme, all the assets and liabilities of NCCL have been transferred and stand vested with the
Company with effect from the Appointed Date. Further, from the Appointed Date, NCCL carried on all its
business and activities for the benefit of and in trust for the Company and thus, all the profit or income accruing
or arising to NCCL, or expenditure or losses arising or incurred by NCCL shall be treated as the profits or
incomes or expenditure or losses of the Company. The Scheme has accordingly been given effect to in these
accounts.
c. The Amalgamation has been accounted for under the “Pooling of Interests” method as prescribed by Accounting
Standard 14 on –“Accounting for Amalgamation” issued by the Institute of Chartered Accountants of India.
Accordingly, the assets, liabilities and reserves of NCCL have been taken over at their book values as on the
Appointed Date, as specified in the Scheme of Amalgamation.
In terms thereof, the difference between the consideration, being shares issuable to minority shareholders of
NCCL, of Rs.0.09 crore for the amalgamation, and the book values of the net liability acquired of Rs. 73.22
crores, after adjusting the carried value of the investments of the Company in NCCL for Rs. 160.55 crores , is
treated as -
i. Capital Reserve of Rs. 0.15 crore to Capital Reserves of the Company;
ii. The debit balance of Rs.234.01 crores (including debit balance in Profit and Loss Account of Rs. 144.76
crores) transferred to debit of General Reserve of the Company.
d. In consideration of the above, 87,258 Equity Shares of Rs. 10 each of the Company are to be issued to the
minority shareholders of NCCL in the ratio of 1 (one) fully paid-up Equity Share of Rs.10/- each of the
Company for every 18 (eighteen) fully paid-up equity shares of Rs.10/- each held in NCCL. Pending allotment,
an amount of Rs 0.09 crore has been shown under the Share Capital Suspense Account as at March 31, 2006.
These shares were subsequently allotted on June 14, 2006.
e. In terms of the Scheme, the Equity Shares when issued and allotted by the Company shall rank pari-passu in all
respects with the existing Equity Shares of the Company. Accordingly, the appropriation for the proposed
dividend includes dividend on 87,258 Equity Shares.
Rs. in Crores
Previous
Year
2. Contingent Liabilities not provided for in respect of:
Claims not acknowledged as debts in respect of matters in appeals:
(a) Sales-tax liability 50.92 31.47
(b) Excise duty 27.10 19.02
(c) Royalty on Limestone/ Marl 29.68 13.53
(d) Customs 30.12 —
(e) Others 15.63 9.54
3. The Ministry of Textiles, vide its orders dated June 30, 1997 and July 1, 1999 has deleted cement from the list of
commodities to be packed in Jute bags under the Jute Packaging (Compulsory Use in Packing Commodities) Act
1987. In view of this, the Company does not expect any liability for non-despatch of cement in Jute bags in respect
of earlier years.
4. Estimated amount of contracts remaining to be executed on capital account and not provided (net of advances) Rs.
531.97 crores (Previous year Rs. 55.74 crores)
5. During the previous year, an amount of Rs. 19.48 crores was charged to the Profit & Loss Account to align the
accounting policy with regard to deferred revenue expenditure with the holding company (Grasim Industries Limited).
The additional charge in the previous year on account of this was Rs.12.60 crores.
6. Depreciation for the year ended March 31, 2006 and March 31, 2005 includes Rs. 4.20 crores and Rs. 18.34 crores,
respectively, related to earlier years.
7. Derivative Instruments
Forward Exchange Contracts are not intended for trading or speculative purposes, but for hedge purposes. The
Company’s policy is to establish the amount of currency required or available at the settlement date of payables and

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 SCHEDULES
SCHEDULE 21 (Contd.)
receivables. The following are the outstanding Forward Exchange Contracts entered into by the Company as on
March 31, 2006:
Currency Amount Buy/Sell Cross Currency
US Dollar 2 Million Sell Rupees
Purpose : To hedge net foreign exchange exposure in respect of highly probable forex transaction.
In accordance with the above policy all Foreign currency exposures that are not hedged by a derivative instruments
or otherwise : NIL
8a) Secured Non-Convertible Debentures Rs. in Crores
Previous
Year
i) Fixed Rate Non Convertible Debentures (NCDs)
1. 12.00% NCDs (Redeemable at par on December 22, 2006 ) 50.00 50.00
2. 12.60% NCDs (Redeemable at par on September 17, 2006 ) 26.00 26.00
3. 8.25% NCDs (Redeemable at par on September 2, 2012 ) 65.00 65.00
4. 8.40% NCDs (Redeemable at par on July 22, 2007 ) 45.00 50.00
5. 8.30% NCDs (Redeemable at par on September 2, 2012 ) 25.00 25.00
6. 8.09% NCDs (Redeemable at par on July 25, 2007 ) 40.00 45.00
7. 10.80% NCDs (Redeemable at par on May 10, 2005 ) — 50.00
8. 6.00 % NCDs (Redeemable at par on March 12, 2009 ) 225.00 225.00
9. 11.75 % NCDs (Redeemable at par on January 11, 2006 ) — 22.00
10. Step up interest NCDs (Redeemable at par on September 16, 2012 ) 25.00 25.00
11. 6.65% NCDs (Redeemable at par on April 30, 2013 ) 5.00 5.00
12. 5.78 % NCDs (Redeemable at par on May 11, 2009 ) 150.00 150.00
13. 6.25% NCDs (Redeemable at par on June 25, 2009 ) 150.00 150.00
14. 6.70% NCDs (Redeemable at par on June 16, 2008 ) 50.00 —
ii) Floating Rate Debentures
1. MIBOR Linked NCDs (Redeemable at par on August 1, 2007 ) 100.00 100.00
2. 1 year GoI Security Linked NCDs (Redeemable at par on June 16, 2008 ) 50.00 —
iii) Discounted Value Debentures
Issued as zero coupon at YTM of 6.80%
(Carrying amount Rs 12.55 cores , previous year Rs 11.75 crores,
Redeemable at par on April 30, 2013) 20.00 20.00
The Company retains the options to purchase the Debentures in the secondary market, and cancel, hold, or
reissue the same at such price and on such terms as the Company may deem fit or as permitted under the
Company Law. Debentures repurchased have not been kept live for reissuance as at March 31, 2006.
The Non Convertible Debentures are secured by way of first charge, having pari passu Rights, on the
Company’s immovable/ movable properties (save and except book debts and inventory).
b) The other loans are secured by a first mortgage and charged with Company’s immovable properties at certain
locations and/ or by hypothecation of movables at those locations (save and except book debts and inventory) both
present and future, having pari passu rights, subject to prior charges, on specific assets in favour of the Company’s
Bankers:
i) Rs. 50.00 Crores (Previous year Rs. 50.00 Crores) from CITI Bank N.A.
ii) Rs. 50.00 Crores (Previous year Rs. 50.00 Crores) from IDBI Bank Ltd.
iii) Rs. 89.23 Crores (Previous year NIL) ECB from SBI Singapore
iv) Rs Nil (Previous year Rs. 5.82 Crores) from IDBI Ltd.
v) Rs Nil (Previous year Rs. 79.50 crores) from HDFC Ltd.

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 SCHEDULES
SCHEDULE 21 (Contd.)
9. Sundry creditors include overdue amounts (mainly unclaimed) of Rs. 0.06 crore (Previous year Rs. 0.05 crore)
(including interest of Rs.77,804 , (Previous Year Rs. 49,753)) payable to Small Scale and Ancillary industrial units.
Total outstanding dues of small scale industrial undertakings have been determined to the extent such parties have
been identified on the basis of information available with the Company.
List of Small Scale Industrial Undertakings to whom the Company owes money for more than 30 days as at March
31, 2006:
1 Kabra Engineering 7 Kaveri Ultra Polymer Limited
2 Jayshree Electorn Pvt. Limited 8 Surya Deep Alloy Casting
3 Shah Alloys 9 Al – Aqmar Trading Company
4 Namitter Industries 10 RS Enterprises
5 Noble Rubber Industries 11 Thejo Engineering Services Pvt. Limited
6 Mahavir Industries
10. Disclosure as per clause 32 of the listing agreement – loans in the nature of Inter Corporate Deposits (ICD) and
Trade Credit given to Subsidiaries :
Name of Subsidiary Company Amount Outstanding Maximum Balance
Outstanding during the year
Rs. in Crores Rs. in Crores
Narmada Cement Company Limited — 190.70
(upto 30.09.2005)
UltraTech Ceylinco (Pvt.) Limited 18.49 20.63
Dakshin Cements Limited 0.11 0.11
There is no repayment schedule and interest on these ICDs is deferred.
11. Auditors’ remuneration (excluding service tax) and expenses charged to the accounts:
Rs. in Crores
a) Statutory Auditors: 2005-06 2004-05
Audit fees 0.24 0.20
Tax audit fees 0.03 0.03
Certification fees 0.14 0.08
Expenses reimbursed 0.02 —
b) Cost Auditors:
Audit fees 0.02 0.02
Expenses reimbursed (Rs. 12,555 previous year Rs. Nil)
12. Manager & Chief Executive Officer’s remuneration:
Rs. in Crores
2005-06 2004-05
Salary 1.56 1.13
Contribution to Provident Fund & Other Funds* 0.15 0.11
Perquisites 0.13 0.10
* Excluding Contribution to Gratuity Fund and provision for leave encashment as separate figures cannot be quantified.
13. Segment Reporting
The Company has one business segment ‘cement’ as its primary segment. The Company’s operations are solely
situated in India.
Rs. in Crores
Revenue 2005-06 2004-05
Net Sales:
Domestic 2,809.20 2,092.54
Export 490.25 514.36
Total 3,299.45 2,606.90

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 SCHEDULES
SCHEDULE 21 (Contd.)
14. Disclosure of related parties / related party transactions:
a) List of related parties
Name of the Related Party Nature of Relationship
Grasim Industries Ltd. (Grasim) Holding Company
Sun God Trading & Investment Ltd. Fellow Subsidiary
Samruddhi Swastik Trading & Investment Ltd. (SSITL) Fellow Subsidiary
Shree Digvijay Cement Co. Ltd. (SDCCL) Fellow Subsidiary
Narmada Cement Company Ltd. (NCCL) Subsidiary (upto 30.09.2005)
UltraTech Ceylinco (Pvt.) Ltd. (UCPL) Subsidiary
Dakshin Cements Ltd. (DCL) Wholly owned subsidiary
Key Management Personnel (KMP)
Mr S. Misra, Manager & CEO of the Company
b) Disclosure of related party transactions: Rs. in Crores
Sl. Nature of Holding Fellow Total
No. Transaction Company Subsidiaries Subsidiaries KMP
Grasim NCCL DCL UCPL SSITL SDCCL
1 Sale of Goods 206.39 — — 95.80 — — — 302.19
(2.76) — — (53.77) — — — (56.53)
2 Purchase of Goods 170.31 88.87 — — — — — 259.18
(6.31) (184.92) — — — — — (191.23)
3 Purchase / lease/ — — — — — — — —
Rent of fixed assets (0.19) — — — — — — (0.19)
4 Transfer of 0.13 — — — — — — 0.13
fixed assets — — — — — — — —
5 Rendering of 0.04 — — — — — — 0.04
Services (0.02) — — (2.24) — — — (2.26)
6 Receiving of 13.66 — — — 0.12 — 1.84 15.62
Services (1.24) — — — — — (1.34) (2.58)
7 Interest & other
income received/ — — — 3.49 — — — 3.49
receivable — (2.81) — — — — — (2.81)
Less : provided for — — — — — — — —
— (2.81) — — — — — (2.81)
8 Letter of Comfort — — — — — — — —
given to Bank — (30.00) — — — — — (30.00)

Outstanding Balance as on March 31,2006 Rs in Crores

Sl. Nature of Holding Fellow
No. Transaction Company Subsidiaries Subsidiaries KMP Total
Grasim NCCL DCL UCPL SSITL SDCCL
Loans & Advances — — 0.11 0.23 0.09 0.00 0.50 0.93
(0.18) (182.54) (0.08) — — — (0.50) (183.30)
Debtors 0.43 — — 18.26 — — — 18.69
(0.23) — — (7.67) — — — (7.90)
Creditors 0.45 — — — — — — 0.45
(1.44) — — — — — — (1.44)
Other Liabilities 4.08 — — — — — — 4.08
— — — — — — — —
Figures in brackets are pertaining to the previous year.

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 SCHEDULES
SCHEDULE 21 (Contd.)
15. Leases
Operating Leases:
i) The Company has taken various plant and machinery under cancellable operating leases. These lease agreement
are generally renewed on expiry.
ii) (a) The Company has taken on non-cancellable operating leases certain assets, the future minimum lease
payments in respect of which, as at March 31, 2006 are as follows:
Rs. in Crores
Minimum Lease Payments Payable 2005-06 2004-05
i. not later than 1 year 0.40 1.70
ii. later than 1 year and not later than 5 years 0.50 2.88
iii. later than 5 years — —
Total Minimum Lease Payable 0.90 4.58

(b) The lease agreements provide for an option to the Company to renew the lease period at the end of the
non-cancellable period. There are no exceptional / restrictive covenants in the lease agreements.
iii) The rental expense in respect of operating leases was Rs. 0.79 crore (Previous Year Rs. 3.00 crores).
iv) Contingent rent recognised in the Profit and Loss Account: Rs. 3,379 (Previous year Rs. 34,305).
16. Deferred Tax Assets and Liabilities as on March 31, 2006 are as under: Rs. in Crores
Particulars Deferred Tax Current Year Deferred Tax
(assets)/liabilities charge/(credit) (assets)/liabilities
as at 01.04.2005 as at 31.03.2006
Deferred Tax Assets:
Provision allowed under tax on payment basis (13.13) 3.70 (9.43)
(13.13) 3.70 (9.43)
Deferred Tax Liabilities:-
Accumulated Depreciation 587.17 (8.45) 578.72
Miscellaneous expenditure — — —
(to the extent not written-off or adjusted)
Payments allowed under tax not expensed
in books 7.67 — 7.67
594.84 (8.45) 586.39
Net Deferred Tax Liability 581.71 (4.75) 576.96
17. The following expenses are included in the different heads of expenses in the Profit & Loss Account :
Rs. in Crores
Particulars 2005-06 2004-05
Stores & Spares Consumed 52.82 60.19
Royalty & Cess 76.46 68.80
Power & Fuel Consumed 0.78 0.06
Repairs to Machinery 19.06 20.80
Repairs to Building 0.42 0.42
Repairs to Other Assets 0.10 0.81
Rates & taxes 2.68 1.81
Lease Rent 2.62 1.50
Professional fees 0.06 0.87
Hire charges-Plant & Machinery 4.05 16.23
18. All the amounts in rupees have been rounded off to crores with lacs in decimals as approved under Section 211 (1)
of the Companies Act, 1956. Figures of Rs.50,000 or less have been shown at actuals in brackets.
19. Additional information required under Part II of Schedule VI to the Companies Act, 1956 (as certified by the
Executives of the respective Divisions) is as per Schedule 22.

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 SCHEDULES
SCHEDULE 22
ADDITIONAL INFORMATION UNDER PART II OF SCHEDULE VI TO THE COMPANIES ACT, 1956
1. CAPACITIES & PRODUCTION:
Product Unit Installed capacity* Actual production
2005-06 2004-05 2005-06 2004-05
Cement (Lakh tonnes) 170.00 155.00 133.33 121.14
Licensed capacity not indicated due to abolition of industrial licenses as per Notification No. 477 (E) dated July 25,
1991 issued under The Industries (Development and Regulation) Act, 1951.
* As Certified by the Management and accepted by the Auditors.

2. TURNOVER:
2005-06 2004-05
Product Unit Quantity Value Quantity Value
Rs. in Crores Rs. in Crores
Cement Lakh tonnes 142.35 3,091.33 125.23 2,250.50
Clinker Lakh tonnes 13.18 207.94 26.48 356.33
Others 0.18 0.07
Total 3,299.45 2,606.90
3. INVENTORY:
As at 31.03.2006 As at 31.03.2005
Product Unit Quantity Value Quantity Value
Rs. in Crores Rs. in Crores
Cement Lakh tonnes 3.14 59.84 2.65 47.67
Clinker (Trading) Lakh tonnes — — 0.14 1.92
4. RAW MATERIALS, STORES, SPARE PARTS:
a) Raw Materials Consumed:
2005-06 2004-05
Product Unit Quantity Value Quantity Value
Rs. in Crores Rs. in Crores
Limestone* Lakh tonnes 183.09 143.40 177.78 143.55
Slag Lakh tonnes 2.50 7.85 3.95 12.12
Gypsum Lakh tonnes 5.12 58.53 4.52 40.59
Fly Ash Lakh tonnes 12.70 29.30 10.24 26.87
Others 43.17 42.21
Total* 282.25 265.34

* Including Royalty & Cess on limestone and other related overheads.

b) Purchase of Finished Goods:
2005-06 2004-05
Class of goods Unit Quantity Value Quantity Value
Rs. in Crores Rs. in Crores
Cement Lakh tonnes 9.54 232.19 4.78 108.12
Clinker Lakh tonnes 2.36 33.02 6.68 85.74
Others 0.11 0.07
Total 265.32 193.93

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 SCHEDULES
SCHEDULE 22 (Contd.)
c) Value of imports (on CIF basis): Rs. in Crores
2005-06 2004-05

Fuel, stores and spares 229.50 258.93

Capital goods 13.61 0.90
d) Value of imported and indigenous raw materials, spare parts and stores consumed:
2005-06 2004-05
Value % Value %
Rs. in Crores Rs. in Crores
Raw materials
Imported 0.69 0.2 — —
Indigenous 281.56 99.8 265.34 100.0
Total 282.25 100.0 265.34 100.0

2005-06 2004-05
Value % Value %
Rs. in Crore Rs. in Crore
Stores & spares
Imported 29.19 10.0 30.31 12.0
Indigenous 248.90 90.0 216.17 88.0
Total 278.09 100.0 246.48 100.0

5. EXPENDITURE IN FOREIGN CURRENCY:

Rs. in Crores
2005-06 2004-05

Freight/ Despatch / Demurrage 54.18 51.54

Commission — 0.26
Advertising 0.01 4.86
Service fees 0.77 1.23
Interest 3.70 5.80
Other matters 3.13 1.63

6. EARNING IN FOREIGN EXCHANGE:

Rs. in Crores
2005-06 2004-05
Export of goods {Including Rs. 460.66 Crores
(Rs. 493.72 Crores) on FOB basis} 490.25 514.36
Professional fees 2.06 1.97
Other receipts 10.47 16.62

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 SCHEDULES
SCHEDULE 22 (Contd.)
7. DIVIDEND REMITTED IN FOREIGN CURRENCY TO NON-RESIDENT SHAREHOLDERS:
2005-06 2004-05
No. Gross No. Gross
of Shares Amount of of Shares Amount of
Shareholders Held Dividends Shareholders Held Dividends

Equity 3669 9576564 Rs 0.72 crore 4015 9257969 Rs 0.46 crore

Dividend remitted in the year 2005-06 is pertaining to 2004-05 and dividend remitted in 2004-05 is pertaining to
2003-04, respectively.

8. Previous year’s figures have been regrouped and rearranged wherever necessary to confirm to this year’s classification.
In view of the amalgamation of NCCL with the Company with effect from October 1, 2005, the figures of the
current year are not comparable with those of the previous year.

Signatures to Schedules ‘1’ to ‘22’

KUMAR MANGALAM BIRLA
Chairman

S. MISRA RAJASHREE BIRLA

Manager & CEO R. C. BHARGAVA
Y. M. DEOSTHALEE
K. C. BIRLA S. MISRA
Executive President & CFO J. P. NAYAK
S. RAJGOPAL
S. K. CHATTERJEE D. D. RATHI
Mumbai, July 7, 2006 Company Secretary Directors

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 ADDITIONAL INFORMATION UNDER PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956
Balance Sheet Abstract and General Business Profile
I Registration Details
Registration No. 1 1 - 1 2 8 4 2 0 State Code 1 1
Balance Sheet Date 3 1 - 0 3 - 0 6

II Capital raised during the year (Amount in Rs. Thousands)

Public Issue Right Issue
N I L N I L
Bonus Issue Private Placement
N I L 8 7 3

III Position of Mobilisation and Development of Funds (Amount in Rs. Thousands)

Total Liabilities Total Assets
3 6 2 3 1 0 6 0 3 6 2 3 1 0 6 0
Source of Funds Paid-Up-Capital Reserve & Surplus
1 2 4 4 8 5 9 9 1 3 7 8 3 8
Secured Loans Unsecured Loans
1 2 2 1 9 2 2 1 2 2 9 9 0 1 1

Application of Funds Net Fixed Assets Investments

2 6 7 8 2 0 2 4 1 7 2 3 8 7 4
Net Current Assets Miscellaneous Expenditure
2 1 6 4 7 1 2 N I L

IV Performance of Company (Amount in Rs. Thousands)

Turnover Total Expenditure
3 7 8 5 2 8 8 3 3 4 9 9 6 9 6 3

+/- Profit / (Loss) Before Tax +/- Profit/(Loss) After Tax

+ 2 8 5 5 9 2 0 + 2 2 9 7 6 1 3
Earning per share (Rs.) Dividend rate %
1 8 . 4 6 1 7 . 5 0

V Generic Names of Principal product of the Company

Item Code 2 5 2 3 2 9 . 0 1
Product Description P O R T L A N D C E M E N T

KUMAR MANGALAM BIRLA

Chairman

S. MISRA RAJASHREE BIRLA

Manager & CEO R. C. BHARGAVA
Y. M. DEOSTHALEE
K. C. BIRLA S. MISRA
Executive President & CFO J. P. NAYAK
S. RAJGOPAL
S. K. CHATTERJEE D. D. RATHI
Mumbai, July 7, 2006 Company Secretary Directors

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 STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES

Name of the Subsidiary Company Dakshin UltraTech

Cements Ceylinco
Limited (Pvt) Limited

1 Financial year of the subsidiary company ended on March 31, 2006 March 31, 2006

2 Holding Company’s Interest

a) Number of Shares fully paid 50,000 40,000,000
b) Extent of holding 100% 80%
Rs. Crores Rs. Crores
3 Net aggregate amount of Profit/(Loss) of the
subsidiary, so far as they concern members of the
UltraTech Cement Limited
i) for the financial year of the subsidiary
a) Dealt with in the account of the — —
holding company
b) Not dealt with in the accounts of the — 8.42 *
holding company
ii) for the previous financial years of
the subsidiary since it became the holding company’s subsidiary
a) Dealt with in the account of the — —
holding company
b) Not dealt with in the accounts of the — 3.90 #
holding company
4 As the financial year of the subsidiary companies — —
coincide with the financial year of the holding company,
Section 212(5) of the Companies Act, 1956 is not applicable.
* converted Re. 1 = Sri Lankan Rupees 2.29
# converted Re. 1 = Sri Lankan Rupees 2.27

Note: Narmada Cement Company Limited (NCCL) was amalgamated with the Company with effect from
October 1, 2005 and was not a subsidiary at the end of the financial year of the Company.
KUMAR MANGALAM BIRLA
Chairman

S. MISRA RAJASHREE BIRLA

Manager & CEO R. C. BHARGAVA
Y. M. DEOSTHALEE
K. C. BIRLA S. MISRA
Executive President & CFO J. P. NAYAK
S. RAJGOPAL
S. K. CHATTERJEE D. D. RATHI
Mumbai, July 7, 2006 Company Secretary Directors

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 AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
AUDITORS’ REPORT TO THE BOARD OF DIRECTORS OF ULTRATECH CEMENT LIMITED ON THE
CONSOLIDATED FINANCIAL STATEMENTS OF ULTRATECH CEMENT LIMITED AND ITS
SUBSIDIARIES.

1. We have examined the attached Consolidated Balance Sheet of ULTRATECH CEMENT LIMITED
(“the Company”) and its subsidiaries, which together constitute “the Group”, as at 31st March 2006, the
Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement of the Group for year
ended on that date, both annexed thereto. These financial statements are the responsibility of the
Company’s Management. Our responsibility is to express an opinion on these financial statements based
on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. These
standards require that we plan and perform the audit to obtain reasonable assurance whether the
financial statements are free of material misstatements. An audit includes, examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the Management, as well as
evaluating the overall financial statements. We believe that our audit provides a reasonable basis for
our opinion.

3. We did not audit the financial statements of two subsidiaries, whose financial statements reflect total assets
of Rs. 0.18 crores as at 31st March, 2006 and total revenues of Rs. 110.62 crores for the year ended on that
date. These financial statements have been audited by other auditors whose report has been furnished to us,
and our opinion, insofar as it relates to the amount included in respect of the subsidiaries, is based solely on
the report of the other auditors.

4. The financial statements also reflect total assets of Rs. 46.44 crores as at 31st March, 2006, total revenues of
Rs. 159.66 crores and net cash flows amounting to Rs. 5.61 crores for the year then ended relating to one
subsidiary, which has been consolidated on the basis of the unaudited financial statements, which have been
subjected to limited review by their auditors.

5. We report that the consolidated financial statements have been prepared by the Company, in accordance
with the requirements of Accounting Standard 21 (Consolidated Financial Statements), issued by the
Institute of Chartered Accountants of India and on the basis of the separate audited financial statements of
the Company and the separate unaudited accounts of two subsidiaries and the audited accounts of one
subsidiary, which have been included in the consolidated financial statements.

6. Based on our audit and on consideration of report of other auditor on separate financial statements and on
the other financial information of the components, and to the best of our information and according to the
explanations given to us, we are of the opinion that the attached consolidated financial statements, subject
to the amounts relating to the subsidiary referred to in paragraph 4 above being consolidated on the basis of

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 their unaudited financial statements, give a true and fair view in conformity with the accounting principles
generally accepted in India:

a. in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at
31st March, 2006;

b. in the case of the Consolidated Profit and loss Account, of the profit of the Group for the year ended on
that date and

c. in the case of the Consolidated Cash Flow Statement, of the case flows of the Group for the year ended
on that date.

For S. B. BILLIMORIA & CO. For G. P. KAPADIA & CO.

Chartered Accountants Chartered Accountants

NALIN M. SHAH ATUL B. DESAI

Partner Partner
(Membership No. 15860) (Membership No. 30850)

Mumbai, 7th July, 2006

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 CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2006
Rs. in Crores
Previous
Schedules Year
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital 1A 124.40 124.40
Share Capital Suspense 1B 0.09 —
Reserves and Surplus 2 916.88 849.28
1,041.37 973.68
Loan Funds
Secured Loans 3 1,222.09 1,259.94
Unsecured Loans 4 229.90 278.03
1,451.99 1,537.97
Minority Interest 4.75 4.08
Deferred Tax Liabilities (Net) 577.55 581.71
TOTAL 3,075.66 3,097.44

APPLICATION OF FUNDS
Fixed Assets
Gross Block 5 4,633.75 4,530.13
Less : Depreciation 2,074.46 1,879.36
Net Block 2,559.29 2,650.77
Capital Work-in-Progress 141.17 49.65
2,700.46 2,700.42
Goodwill 10.45 152.98
Investments 6 148.15 —
Current Assets, Loans and Advances
Inventories 7 386.79 333.48
Sundry Debtors 8 162.05 174.52
Cash and Bank Balances 9 68.39 60.16
Loans and Advances 10 158.84 152.53
776.07 720.69
Less:
Current Liabilities & Provisions
Current Liabilities 11 518.75 452.02
Provisions 12 40.72 24.65
559.47 476.67
Net Current Assets 216.60 244.02
Miscellaneous Expenditure 13 — 0.02
(to the extent not written off or adjusted)
TOTAL 3,075.66 3,097.44
Accounting Policies and Notes on Accounts 22
In terms of our report attached. KUMAR MANGALAM BIRLA
Chairman

For S. B. BILLIMORIA & CO. For G. P. KAPADIA & CO. S. MISRA RAJASHREE BIRLA
Chartered Accountants Chartered Accountants Manager & CEO R. C. BHARGAVA
Y. M. DEOSTHALEE
NALIN M. SHAH ATUL B. DESAI K. C. BIRLA S. MISRA
Partner Partner Executive President & CFO J. P. NAYAK
S. RAJGOPAL
S. K. CHATTERJEE D. D. RATHI
Mumbai, July 7, 2006 Company Secretary Directors

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 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2006
Rs. in Crores
Previous
Schedules Year
INCOME
Gross Sales 3,885.49 3,184.18
Less : Excise Duty 501.54 483.19
Net Sales 3,383.95 2,700.99
Interest & Dividend Income 14 3.71 4.19
Other Income 15 28.11 18.55
Increase / (Decrease) in Stocks 16 40.23 21.23
3,456.00 2,744.96
EXPENDITURE
Raw Materials Consumed 17 324.31 320.42
Manufacturing Expenses 18 1,285.41 1,224.66
Purchase of Finished Products 176.45 9.01
Payments to and Provisions for Employees 19 98.06 94.66
Selling, Distribution, Administration and
Other Expenses 20 965.16 717.26
Interest 21 90.07 109.33
Depreciation 220.41 229.52
Amortisation of Goodwill on Consolidation 10.17 19.00
3,170.04 2,723.86
Profit/(Loss) Before Tax Expenses & Impairment 285.96 21.10
Less: Profit of a Subsidiary till Acquisition Date — 0.76
Less: Impairment of Goodwill — 76.84
Profit/(Loss) Before Tax Expenses 285.96 (56.50)
Provision for Current Tax 59.78 32.50
Deferred Tax (4.16) (36.89)
Fringe Benefit Tax 3.64 —
Profit / (Loss) After Tax 226.70 (52.11)
Minority Interest 1.60 1.28
Profit/ (Loss) After Minority Interest 225.10 (53.39)
Adjustment due to Merger 101.56 —
Balance Brought Forward from Previous Year (67.77) (3.72)
Profit / (Loss) Available for Appropriation 258.89 (57.11)
Appropriations
Proposed Dividend 21.79 9.33
Corporate Dividend Tax 3.06 1.33
Debenture Redemption Reserve 9.45 —
General Reserve 25.00 —
Balance carried to Balance Sheet 199.59 (67.77)
258.89 (57.11)
Basic and Diluted Earnings Per Equity Share (in Rs.) 18.08 (4.29)
Face Value Per Equity Share (in Rs.) 10.00 10.00
Weighted Average Number Of Equity Shares (in Nos.) 124,485,879 124,398,621
Accounting Policies and Notes on Accounts 22
In terms of our report attached. KUMAR MANGALAM BIRLA
Chairman

For S. B. BILLIMORIA & CO. For G. P. KAPADIA & CO. S. MISRA RAJASHREE BIRLA
Chartered Accountants Chartered Accountants Manager & CEO R. C. BHARGAVA
Y. M. DEOSTHALEE
NALIN M. SHAH ATUL B. DESAI K. C. BIRLA S. MISRA
Partner Partner Executive President & CFO J. P. NAYAK
S. RAJGOPAL
S. K. CHATTERJEE D. D. RATHI
Mumbai, July 7, 2006 Company Secretary Directors

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 CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2006
Rs. in Crores
A Cash Flow from Operating Activities: March 31, 2006 March 31, 2005
Profit before tax 285.96 21.10
Adjustments for:
Depreciation 220.41 229.52
Amortisation of Goodwill on Consolidation 10.17 19.00
CWIP Written Off — 3.10
Miscellaneous Expenditure written off 0.02 32.23
Provision for Doubtful Debts and advances 1.79 0.27
Bad Debts Written-off 0.17 4.65
Credit Balances written back (9.65) (0.55)
Interest & Dividend Income (3.71) (1.34)
Interest Expense 90.07 109.30
Unrealised Foreign Exchange (Gain)/Loss 0.79 15.89
(Profit)/ Loss on Sale of Fixed Assets (0.21) 0.18
Profit on Sale of Investments (0.08) —
Operating profit before working capital changes 595.73 433.35
Adjustments for:
(Increase)/decrease in Inventories (53.31) (59.45)
(Increase)/decrease in Sundry Debtors 10.51 2.55
(Increase)/decrease in Loans and Advances (10.09) (32.15)
(Increase)/decrease in Miscellaneous Expenditure not Written Off — (0.03)
Increase/(decrease) in Liabilities and Provisions 77.28 38.28
Cash generated from Operations 620.12 382.55
Current Taxes paid (52.90) (36.12)
Fringe Benefit Tax Paid (3.09) —
Net Cash from Operating Activities (A) 564.13 346.43
B Cash Flow from Investing Activities:
Purchase of Fixed Assets (221.58) (70.33)
Sale of Fixed Assets 1.35 0.47
(Increase) / decrease in Current Investments (148.00) (23.54)
Profit on Sale of Investments 0.08 —
Loans/deposits with Subsidiaries — 1.51
Interest and Dividend Received 3.56 1.37
Net cash used in Investing Activities (B) (364.59) (90.52)
C Cash Flow from Financing Activities:
Proceeds from Issue of Share Capital — (0.51)
Repayment of Long Term Borrowings (167.33) (617.55)
Proceeds from Long Term Borrowings 217.15 549.63
Repayment of Short Term Borrowings (136.60) (57.80)
Interest paid (92.75) (110.63)
Dividend Paid (10.20) (6.22)
Corporate dividend tax (1.33) (0.80)
Net cash used in Financing Activities (C) (191.06) (243.88)
Net increase in cash and cash equivalents (A + B + C) 8.48 12.03
Cash and cash equivalents at the beginning of the year 60.16 48.13
Effect of exchange rate on consolidation of Foreign Subsidiary (0.25) —
Cash and cash equivalents at the end of the year 68.39 60.16
Notes:
1. Cash flow statement has been prepared under the indirect method as set out in Accounting Standard - 3 issued by the
Institute of Chartered Accountants of India.
2. Purchase of fixed assets includes movements of capital work in progress between the beginning and the end of the year.
3. Previous year’s figures regrouped/ recasted where ever necessary.
In terms of our report attached. KUMAR MANGALAM BIRLA
Chairman
For S. B. BILLIMORIA & CO. For G. P. KAPADIA & CO. S. MISRA RAJASHREE BIRLA
Chartered Accountants Chartered Accountants Manager & CEO R. C. BHARGAVA
Y. M. DEOSTHALEE
NALIN M. SHAH ATUL B. DESAI K. C. BIRLA S. MISRA
Partner Partner Executive President & CFO J. P. NAYAK
S. RAJGOPAL
S. K. CHATTERJEE D. D. RATHI

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 SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS
Rs. in Crores
Previous
SCHEDULE 1A Year
SHARE CAPITAL
Authorised
130,000,000 Equity Shares of Rs. 10 each 130.00 130.00
130.00 130.00
Issued, Subscribed and Paid up
124,398,621 Equity Shares of Rs. 10 each fully paid-up
124.40 124.40
124.40 124.40
SCHEDULE 1B
SHARE CAPITAL SUSPENSE
87,258 Equity Shares of Rs. 10 each fully paid-up to be issued. 0.09 —
0.09 —

SCHEDULE 2
RESERVES & SURPLUS Rs. in Crores
Balance *Adjustment Additions Deduction/ Balance
as at due to during Adjustments as at
31st Merger the during 31st
March, 05 with NCCL year the year March, 06
Capital Reserve 25.02 — — — 25.02
Cash Subsidy Reserve 0.10 — — — 0.10
Debenture Redemption Reserve 129.43 — 9.45 — 138.88
General Reserve 762.50 (234.01) 25.00 — 553.49
Exchange Variation Reserve** — — (0.20) — (0.20)
Surplus as per Profit & Loss Account (67.77) 101.56 225.10 (59.30) 199.59
849.28 (132.45) 259.35 (59.30) 916.88
Previous Year 928.94 — (64.05) (15.61) 849.28
* See Note B 2
** Exchange Variation Reserve has been created for Exchange Variation loss in Opening Equity Share Capital and Reserve
& Surplus of UltraTech Ceylinco (Pvt.) Ltd.

SCHEDULE 3
SECURED LOANS
Non-Convertible Debentures 1,018.55 999.75
Other Loans:
Loans from Financial Institutions — 5.82
Foreign Currency Loan 89.23 79.50
Loans from Banks:
Cash Credits / Working Capital Borrowings from Banks Secured by
Hypothecation of Stocks and Book Debts. 14.31 74.87
Other Loans 100.00 100.00
1,222.09 1,259.94

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 SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS
SCHEDULE 4 Rs. in Crores
UNSECURED LOANS Previous
Year
Short Term Loans from Banks — 76.06
Sales Tax Deferment Loan 229.90 201.97
229.90 278.03

SCHEDULE 5
FIXED ASSETS Rs. in Crores
PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK
As at Additions Deductions/ As at As at For the Deductions/ Upto As at As at
31.03.05 Adjustments 31.03.06 31.03.05 year Adjustments 31.03.06 31.03.06 31.03.05
Freehold Land 68.73 2.56 — 71.29 — — — — 71.29 68.73
Leasehold Land 19.98 0.06 0.02 20.02 4.83 0.58 — 5.41 14.61 15.15
Buildings 466.41 3.82 0.04 470.19 125.04 13.15 (0.20) 138.39 331.80 341.37
Railway Sidings 159.35 0.31 — 159.66 52.40 7.51 — 59.91 99.75 106.95
Plant & Machinery 3,658.28 112.38 22.89 3,747.77 1,589.29 185.54 19.73 1,755.10 1,992.67 2,068.99
Furniture & Fixtures 71.08 9.70 2.51 78.27 41.21 5.42 1.94 44.69 33.58 29.87
Jetty 76.63 — — 76.63 61.11 3.97 — 65.08 11.55 15.52
Vehicles 9.67 1.23 0.98 9.92 5.48 1.05 0.65 5.88 4.04 4.19
4,530.13 130.06 26.44 4,633.75 1,879.36 217.22 22.12 2,074.46 2,559.29 2,650.77
Previous year 4,473.06 73.83 16.76 4,530.13 1,660.20 230.23 11.07 1,879.36
ADD: CAPITAL WORK-IN-PROGRESS 141.17 49.65
2,700.46 2,700.42

NOTE: Rs. in Crores

Depreciation for the year 217.22
Add: Obsolescence 3.19
Depreciation as per Profit & Loss Account 220.41

SCHEDULE 6 Rs. in Crores

INVESTMENTS - At Cost Previous
LONG TERM Year
Government and Trust Securities -Unquoted — —
(Rs. 10,000, Previous Year Rs.10,000)
Pledged as Security Deposit
CURRENT - Unquoted
Investment in Debt Schemes of Various Mutual Funds 148.15 —
148.15 —

Note: No. of Units of Various Mutual Funds - Debt Schemes purchased and redeemed during the year 1219735096.
SCHEDULE 7
INVENTORIES
Stores & Spare Parts, Packing Material, Fuels and Scrap 201.02 192.90
Raw Materials 12.74 10.57
Work-in-progress 105.97 68.38
Finished Goods (Includes transit stock of Rs. 4.38 Crores, Previous year Nil) 67.06 61.63
386.79 333.48

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 SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS
SCHEDULE 8 Rs. in Crores
SUNDRY DEBTORS Previous
Year
Exceeding six months:
Good and Secured 8.90 3.62
Good and Unsecured 1.70 1.75
Doubtful and Unsecured 3.02 1.53
13.62 6.90
Less: Provision for Doubtful Debts 3.02 1.47
10.60 5.43
Others:
Good and Secured 79.02 69.50
Good and Unsecured 72.43 99.59
151.45 169.09
162.05 174.52

SCHEDULE 9
CASH AND BANK BALANCES
Cash Balance on Hand 0.20 0.26
Bank Balance with Scheduled Banks:
In Current Accounts 61.41 59.01
In Fixed Deposits Accounts 6.78 0.89
68.39 60.16

SCHEDULE 10
LOANS & ADVANCES
Secured & Considered Good
— Loan against mortgage of House Property 2.23 3.07
Unsecured
Considered Good:
Deposits and Balances with Government and other Authorities
(including accrued interest ) 31.65 29.68
Advances Recoverable in Cash or in Kind or for Value to be Received 124.96 116.00
Advance Income Tax (Net of Provision) — 3.78
Considered Doubtful:
Advances Recoverable in Cash or in Kind 0.22 0.22
156.83 149.68
Less: Provision for Doubtful Loans and Advances 0.22 0.22
156.61 149.46
158.84 152.53

SCHEDULE 11
CURRENT LIABILITIES
Sundry Creditors 318.28 248.02
Security and Other Deposits 78.82 34.45
Advances from Customers 42.38 25.38
Unpaid Dividend 0.21 0.10
Other Liabilities 44.59 106.91
Interest Accrued but not Due on Loans 34.47 37.16
518.75 452.02

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 SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS
SCHEDULE 12 Rs. in Crores
PROVISIONS Previous
Year
Provision for Contingency — 3.56
Provision for Retirement Benefits 12.22 10.45
Provision for Income Tax (Net of Advance Tax) 3.65 —
Proposed Dividend 21.79 9.33
Corporate Dividend Tax 3.06 1.31
40.72 24.65

SCHEDULE 13
MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)
Deferred Revenue Expenditure — 0.02
— 0.02

SCHEDULE 14
INTEREST & DIVIDEND INCOME
Interest (Gross) on others 1.49 4.09
(Tax Deducted at Source Rs.0.11 Crore, Previous Year Rs. 0.62 Crore)
Dividend from Current Investments 2.22 0.10
3.71 4.19

SCHEDULE 15
OTHER INCOME
Lease Rent 3.93 4.60
Profit on Sale of Current Investments (Net) 0.08 —
Insurance Claim 0.47 0.10
Profit on Sale of Fixed Assets (Net) 0.21 —
Exchange Rate Difference (Net) 1.23 —
Unclaimed Credit Balances Written Back 0.81 0.20
Excess Provisions Written Back (Net) 8.84 0.36
Miscellaneous Income/ receipts 12.54 13.29
28.11 18.55

SCHEDULE 16
INCREASE / (DECREASE) IN STOCKS
Closing Stock
Work-in-progress 105.97 68.38
Finished Goods 62.68 61.62
168.65 130.00
Opening stock
Work-in-progress 68.38 56.83
Finished Goods 61.62 48.23
130.00 105.06
Add: Increase / (Decrease) in Excise Duty on Stocks 1.58 (3.72)
Increase / (Decrease) in Stocks 40.23 21.23

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 SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS
SCHEDULE 17 Rs. in Crores
RAW MATERIALS CONSUMED Previous
Year
Opening Stock 13.04 8.93
Purchase and Incidental Expenses 324.01 322.06
337.05 330.99
Less: Closing Stock 12.74 10.57
324.31 320.42

SCHEDULE 18
MANUFACTURING EXPENSES
Consumption of Stores, Spare Parts & Components and
Packing Materials 243.42 223.84
Power & Fuel Consumed 967.44 940.95
Hire Charges of Plant & Machinery and others 5.45 4.01
Repairs to Plant & Machinery 51.14 40.85
Repairs to Buildings 3.80 2.34
Repairs to Others 14.16 12.67
1,285.41 1,224.66

SCHEDULE 19
PAYMENTS TO AND PROVISIONS FOR EMPLOYEES
Salaries, Wages and Bonus, etc. 73.97 61.41
Contribution to and Provisions for Provident and Other Funds 9.82 6.79
Welfare Expenses 14.27 14.57
Voluntary Retirement Scheme — 11.88
98.06 94.66

SCHEDULE 20
SELLING, DISTRIBUTION, ADMINISTRATION AND OTHER EXPENSES
Commission paid to Distributors and Selling Agents 8.27 8.69
Cash Discount 26.73 20.79
Freight, handling and other expenses 778.28 499.87
Advertisements & Sales Promotion 49.39 68.13
Insurance 9.14 9.05
Rent (including Lease Rent) 8.93 9.83
Rates and Taxes 12.67 14.46
Stationery, Printing, Communication Expenses 8.14 7.84
Travelling and Conveyance 18.89 15.74
Legal and Professional charges 18.55 13.17
Bad Debts and Advances Written Off 0.17 6.38
Provision for Doubtful Debts and Advances 1.79 1.58
Capital Work in Progress Written Off — 3.10
Directors’ Fees 0.11 0.14
Power (other than related to manufacturing activity) 1.18 0.90
Exchange Rate difference (Net) — 0.23
Loss on Sale of Fixed Assets (Net) — 0.75
Miscellaneous Expenses 22.92 36.63
965.16 717.26

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 SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS
Rs. in Crores
Previous
Year
SCHEDULE 21
INTEREST
On Debentures and Fixed Loans 83.53 95.78
On Others loans 6.54 13.55
90.07 109.33

SCHEDULE 22
ACCOUNTING POLICY AND NOTES ON ACCOUNTS
A. Significant Accounting Policies:

1. Basis of Accounting:

The financial statements are prepared under the historical cost convention on an accrual basis and in accordance
with the applicable mandatory Accounting Standards.

2. Fixed Assets:

Fixed assets are stated at cost (including other expenses related to acquisition and installation).

3. Foreign Currency Transactions:

Foreign currency transactions are accounted for at the rates prevailing on the dates of the transactions/ converted
at contracted rate. Foreign currency assets and liabilities covered by forward contracts are stated at the forward
contract rates while those not covered are restated at year end rate. Premium in respect of forward contracts is
recognised over the life of contracts. Exchange differences relating to fixed assets acquired from a country outside
India are adjusted to the cost of the asset. Any other exchange difference is dealt with in the profit and loss
account.

4. Treatment of expenditure during construction period:

Expenditure during construction period is included under Capital Work in Progress and the same is allocated to
the respective Fixed Assets on the completion of its construction.

5. Investments:

Current investments are carried at lower of cost or fair value. Long term investments are stated at cost after
deducting provisions made for any other than temporary diminution in the value.

6. Inventories:

Inventories are valued at lower of cost and net realisable value. The cost is computed on weighted average basis.

Finished goods and work-in-progress include cost of conversion and other costs incurred in bringing the inventories
to their present location and condition. Obsolete, defective and unserviceable stocks are duly provided for.

7. Leases:

a) In respect of lease transactions entered into prior to April 1, 2001, lease rentals of assets acquired are charged
to the Profit & Loss Account.

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SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS
b) Lease transactions entered into on or after April 1, 2001:

i) Assets acquired under leases where the Company has substantially all the risks and rewards of ownership
are classified as finance leases. Such assets are capitalised at the inception of the lease at the lower of the
fair value or the present value of minimum lease payments and a liability is created for an equivalent
amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a
constant periodic rate of interest on the outstanding liability for each period.

ii) Assets acquired under leases where a significant portion of the risks and rewards of ownership are
retained by the lessor are classified as operating leases. Lease rentals are charged to the Profit & Loss
Account on accrual basis.

iii) Assets leased out under operating leases are capitalised. Rental income is recognised on accrual basis
over the lease term.

(Also refer to policy on Depreciation & Amortisation)

8. Depreciation & Amortisation:

Depreciation is charged in the Accounts on the following basis:

i) Depreciation on original cost is provided on straight-line basis at the rates prescribed in Schedule XIV to the
Companies Act, 1956 except in following.

a) Motor Cars at 14.14 % per annum

b) Motor Cars given to employees as per Company Scheme at 17 % per annum.

c) Personal Computers & Laptops given to employees as per Company Scheme at 31 % per annum.

ii) Assets acquired up to September 30, 1987, are depreciated at the rates computed under Section 205(2)(b) of
the Companies Act, 1956 pursuant to rates of depreciation prescribed in Income Tax Rules from time to
time.

iii) The value of leasehold land and mining lease is amortised over the period of the lease.

iv) Assets not owned by the Company are amortised over a period of five years.

v) Expenditure incurred on Jetty is amortised over the period of the relevant agreement such that the cumulative
amortisation is not less than the cumulative rebate availed by the Company.

vi) In respect of the amounts capitalised during the year on account of foreign exchange fluctuation depreciation
is provided prospectively over the residual life of the assets.

vii) Depreciation on additions/deductions is calculated pro-rata from/to the month of additions/deductions.

9. Retirement Benefits:

Provisions for/contributions to retirement benefits schemes are made as follows:

a) Provident fund on actual liability basis.

b) Superannuation/Pension schemes on the basis of actual liability/actuarial valuation done at the year end.
Superannuation is funded with an approved fund.

c) Gratuity based on actuarial valuation done at the year end. Gratuity is funded with an approved fund.
Gratuity in respect of a subsidiary is accrued based on local laws.

d) Leave encashment benefit on actuarial valuation basis done at the year end.

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 SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS
10. Interest:
The difference between the face value and the issue price of ‘Discounted Value Non Convertible Debentures’,
being in the nature of interest, is charged to the Profit and Loss Account, on a compound interest basis determined
with reference to the yield inherent in the discount.
11. Borrowing Costs:
Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are
capitalised as part of cost of such asset till such time as the asset is ready for its intended use. A qualifying asset is
an asset that necessarily requires a substantial period of time to get ready for its intended use. All other borrowing
costs are recognised as an expense in the period in which they are incurred.
12. Provision for Current & Deferred Tax:
Provision for Current Tax is made on the basis of estimated taxable income for the current accounting period and
in accordance with the provisions as per the Income Tax Act, 1961. Deferred Tax resulting from “timing difference”
between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted
or substantively enacted as on the balance sheet date. The Deferred Tax asset is recognised and carried forward
only to the extent that there is a reasonable certainty except for carried forward losses and unabsorbed depreciation
which is recognised on virtual certainty that the assets will be realised in future.
13. Sales:
a) Sales are accounted on despatch of products.
b) Export sales are accounted on the basis of date of bill of lading.
14. Provisions, Contingent Liabilities and Contingent Assets:
Provision involving substantial degree of estimation in measurement are recognised when there is a present
obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent
Liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed
in the financial statements.
15. Use of Estimates:
The preparation of financial statements in conformity with the generally accepted accounting principles requires
estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of
financial statements and the reported amounts of revenues and expenses during the reported period. Difference
between the actual results and estimates are recognised in the period in which the results are known or materialise.

B. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Principles of consolidation
(a) The Consolidated Financial Statements (CFS) comprise of the financial statements of UltraTech Cement
Limited and its subsidiaries as at 31.03.2006, which are as under:
Name of the Company Country of % Shareholding &
Incorporation Voting Power
Narmada Cement Company Limited
(NCCL) (Upto 30.09.2005) India 97.80%
Dakshin Cements Limited India 100%
UltraTech Ceylinco (Private) Limited Sri Lanka 80%
(b) The financial statements of the parent company and its subsidiaries have been consolidated on a line-by-line
basis by adding together the book values of like items of assets, liabilities, income and expenses, after
eliminating intra-group balances and the unrealised profits/ losses on intra-group transactions, and are presented
to the extent possible, in the same manner as the Company’s separate financial statements.
2. Narmada Cement Company Limited, the subsidiary company was amalgamated with the holding company with
effect from October 1, 2005. Unaudited financial statements for the period April 1, 2005 to Sept 30, 2005 are
considered for consolidation, which have, however, been subjected to limited review by its auditor.

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SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS
The reporting financial year for UltraTech Ceylinco (Pvt) Limited is for 15 months ended March 31, 2006.
However, unaudited financial statements for the year ended March 31, 2006 are made and considered for
consolidation, which have been subjected to limited review by its auditor.
3. Merger of Narmada Cement Company Limited
a. Pursuant to the Scheme of Amalgamation (the Scheme) u/s 18(1)(c ) and other applicable provisions of Sick
Industrial Companies (Special Provisions) Act, effective from October 1, 2005 (the Appointed Date) Narmada
Cement Company Limited (“NCCL” ), has been merged in the Company. The Scheme, is approved by Board
for Industrial & Financial Reconstruction, New Delhi, on May 15, 2006 and has been made effective from
June 1, 2006 (the effective date). NCCL business was of manufacturing and sale of clinker and cement.
b. In terms of the Scheme, all the assets and liabilities of NCCL have been transferred and stand vested with the
Company with effect from the Appointed Date. Further, from the Appointed Date, NCCL carried on all its
business and activities for the benefit of and in trust for the Company and thus, all the profit or income
accruing or arising to NCCL, or expenditure or losses arising or incurred by NCCL shall be treated as the
profits or incomes or expenditure or losses of the Company. The Scheme has accordingly been given effect to
in these accounts.
c. The amalgamation has been accounted for under the “Pooling of Interests” method as prescribed by Accounting
Standard 14 on –”Accounting for Amalgamation” issued by the Institute of Chartered Accountants of India.
Accordingly, the assets, liabilities and reserves of NCCL have been taken over at their book values as on the
Appointed Date, as specified in the Scheme of Amalgamation.
In terms thereof, the difference between the consideration, being shares issuable to minority shareholders of
NCCL, of Rs.0.09 crore for the amalgamation, and the book values of the net liability acquired of Rs. 73.22
crores, after adjusting the carried value of the investments of the Company in NCCL for Rs. 160.55 crores, is
treated as -
i. Capital Reserve of Rs. 0.15 crore to Capital Reserves of the Company;
ii. The debit balance of Rs.234.01 crores (including debit balance in Profit and Loss Account of Rs. 144.76
crores) transferred to debit of General Reserve of the Company. The balance in Profit & Loss Account
in CFS was adjusted for the followings :
1. The losses of NCCL were recognised in consolidated financial statements upto September 30, 2005
by way of line – by – line consolidation ;
2. Amortisation of goodwill arising on consolidation ;
3. Unamortised balance of the goodwill of NCCL arising on consolidation adjusted to reserves on
amalgamation.
d. In consideration of the above, 87,258 Equity Shares of Rs. 10 each of the Company are to be issued to the
minority shareholders of NCCL in the ratio of 1 (one) fully paid-up Equity Share of Rs.10/- each of the
Company for every 18 (eighteen) fully paid-up equity shares of Rs.10/- each held in NCCL. Pending allotment,
an amount of Rs 0.09 crore has been shown under the Share Capital Suspense Account as at March 31, 2006.
These shares were subsequently allotted on June 14, 2006.
e. In terms of the Scheme, the Equity Shares when issued and allotted by the Company shall rank pari-passu in
all respects with the existing Equity Shares of the Company. Accordingly, the appropriation for the proposed
dividend includes dividend on 87,258 Equity Shares.
4. Notes on Accounts of the financial statement of the Company and all the subsidiaries are set out in their
respective financial statements.
5. Goodwill:
Goodwill represents the difference between the Group’s share in the net worth of the subsidiaries, and the cost of
acquisition at each point of time of making the investment in the subsidiaries. For this purpose, the Group’s share
of net worth is determined on the basis of the latest financial statements prior to the acquisition after making
necessary adjustments for material events between the date of such financial statements and the date of respective
acquisition. Goodwill on NCCL is amortised upto September 30, 2005 the balance unamortised portion of
goodwill is adjusted to General Reserve as explained in Note 3.

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SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS
Goodwill arising out of an acquisition of equity stake in subsidiaries is amortised in equal amounts over a period of
10 years from the date of first acquisition. In the event of cessation of operations of the subsidiaries, the unamortised
goodwill is written off fully.

During the year Rs. 10.17 crores ( Previous year Rs. 18.99 crores) was amortised from goodwill.

6. Reserve shown in the consolidated balance sheet represents the Group’s share in the respective reserves of the
Group companies.

7. Contingent Liabilities not provided for in respect of:

Claims not acknowledged as debts in respect of matters in appeals:

Rs. in Crores
Previous
Year
(a) Sales-tax liability 50.92 32.75
(b) Excise duty 27.10 20.29
(c) Royalty on Limestone/ Marl 29.68 13.53
(d) Customs 30.12 —
(e) Others 15.63 11.83

8. Estimated amount of contracts remaining to be executed on capital account and not provided (net of advances)
Rs. 531.97 crores (Previous year Rs.58.08 crores).
9. The Ministry of Textiles, vide its orders dated June 30, 1997 and July 1, 1999 has deleted cement from the list
of commodities to be packed in Jute bags under the Jute Packaging (Compulsory Use in Packing Commodities)
Act 1987. In view of this, the company does not expect any liability for non-dispatch of cement in Jute bags in
respect of earlier years.
10. Segment reporting
The Group has only one business segment ‘cement’ as primary segment and its operations are solely situated in
India. The secondary segment is geographical, which is as under:
Rs. in Crores
Revenue 2005-06 2004-05
Net Sales:
Domestic 2830.40 2127.43
Export 553.55 573.56
Total 3383.95 2700.99

11. Disclosure of related parties / related party transactions:

a) Names of the related parties with whom transactions were carried out during the year and description of
relationship:
Name of the Related Party Nature of Relationship
Grasim Industries Limited (Grasim) Holding Company
Sun God Trading & Investment Ltd. Fellow Subsidiary
Samruddhi Swastik Trading & Investment Ltd. (SSITL) Fellow Subsidiary
Shree Digvijay Cement Co. Ltd. (SDCCL) Fellow Subsidiary
Others
Key Management Personnel (KMP) and their relatives
Mr. S. Misra, Manager & CEO of the Company
Mr. V. M. Muralidharan, Manager of NCCL (upto 30.09.2005)

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 SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS
SCHEDULE 22 (Contd.)
b) Disclosure of related party transactions:
Rs. in Crores
Sl. No. Nature of Transaction Grasim SSITL SDCCL KMP Total
1 Sale of Goods 206.39 — — — 206.39
(2.76) — — — (2.76)
2 Purchase of goods 170.31 — — — 170.31
(11.27) — — — (11.27)
3 Purchase / lease/Rent — — — — —
of fixed assets (0.19) — — — (0.19)
4 Transfer of fixed assets 0.13 — — — 0.13
— — — — —
5 Rendering of Services 0.04 — — — 0.04
(0.02) — — — (0.02)
6 Receiving of Services 13.66 0.12 — 1.92 15.70
(1.24) — — (1.34) (2.58)
Outstanding Balance as on 31st March

1 Debtors 0.43 — — — 0.43

(0.23) — — — (0.23)
2 Loans & Advances — 0.09 0.00 0.50 0.59
(0.18) — — (0.50) (0.68)
3 Creditors 0.45 — — — 0.45
(1.44) — — — (1.44)
4 Other Liabilities 4.08 — — — 4.08
— — — — —
Figures in brackets are pertaining to the previous year.

12. Leases
Operating Leases:
i) The Company has taken various plant and machinery under cancellable operating leases. These lease
agreement are generally renewed on expiry.
ii) (a) The Company has taken on non-cancellable operating leases certain assets, the future minimum lease
payments in respect of which, as at March 31, 2006 are as follows:
Rs. in Crores
2005-06 2004-05
Minimum Lease Payments Payable
i. not later than 1 year 0.40 1.77
ii. later than 1 year and not later than 5 years 0.50 3.04
iii. later than 5 years — —
Total Minimum Lease Payments 0.90 4.81
(b) The lease agreements provide for an option to the Company to renew the lease period at the end of
the non-cancellable period. There are no exceptional / restrictive covenants in the lease agreements.
(iii) The rental expense in respect of operating leases was Rs. 0.83 crore (Previous year Rs. 3.07 crore).
(iv) Contingent rent recognised in the Profit and Loss Account: Rs. 3,379 (Previous year Rs. 34,305).

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 SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS
13. Deferred Tax Assets and Liabilities as on March 31, 2006 are as under:
Rs. in Crores
Particulars Deferred Tax Current Year Deferred Tax
(assets)/ Charge/(Credit) (assets)/
liabilities as at liabilities as at
01.04.2005 31.03.2006
Deferred Tax Assets:-
Provision allowed under tax on payment basis (13.13) 3.66 (9.47)
Unabsorbed Losses — (5.96) (5.96)
(13.13) (2.30) (15.43)
Deferred Tax Liabilities:-
Accumulated Depreciation 587.17 (1.86) 585.31
Miscellaneous expenditure — — —
(to the extent not written-off or adjusted)
Payments allowed under tax not expensed in books 7.67 — 7.67
594.84 (1.86) 592.98
Net Deferred Tax Liability 581.71 (4.16) 577.55

Deferred tax asset is recognised on account of unabsorbed losses after taking into account the current performance
of the subsidiary.
14. Auditors’ remuneration (excluding service tax) and expenses charged to the accounts:
Rs. in Crores
a) Statutory Auditors: 2005-06 2004-05
Audit fees 0.27 0.24
Tax audit fees 0.03 0.03
Certification fees 0.14 0.08
Expenses reimbursed 0.02 0.00
b) Cost Auditors:
Audit fees 0.02 0.02
Expenses reimbursed (Rs. 12,555 previous year Rs. 7620)

15. Depreciation for the year ended March 31,2006 and March 31,2005 includes Rs 4.20 crores and Rs 18.34 crores
respectively related to earlier years.
16. Figures pertaining to the subsidiary companies have been reclassified wherever necessary to bring them in line
with the Company’s financial statements.
17. Previous year’s figures have been regrouped and rearranged wherever necessary to confirm to this year’s
classification. In view of the amalgamation of NCCL with the Company with effect from October 1, 2005, the
figures of the current year are not comparable with those of the previous year.

Signatures to Schedules ‘1’ to ‘22’ KUMAR MANGALAM BIRLA

Chairman

S. MISRA RAJASHREE BIRLA

Manager & CEO R. C. BHARGAVA
Y. M. DEOSTHALEE
K. C. BIRLA S. MISRA
Executive President & CFO J. P. NAYAK
S. RAJGOPAL
S. K. CHATTERJEE D. D. RATHI
Company Secretary Directors
Mumbai, July 7, 2006

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 NARMADA CEMENT COMPANY LIMITED
DIRECTORS’ REPORT DIRECTORS’ RESPONSIBILITY STATEMENT
Dear Shareholders, The Directors’ confirm that:
Your Directors present the Annual Report and the Audited Accounts for the year (i) in preparation of the Annual Accounts, the applicable Accounting Standards
ended 30th September 2005. have been followed along with proper explanation relating to material
departures, if any;
2004 – 05 2003 – 04
(Rs. crore) (Rs. crore) (ii) they have selected the accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to
Gross Turnover 277.66 205.06 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
Profit / (Loss) before
for that period;
depreciation and taxes 26.94 (19.96)
(iii) they have taken proper and sufficient care for the maintenance of adequate
Depreciation on fixed assets 6.42 6.67 accounting records in accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of the Company and for preventing and
Profit / (Loss) before tax 20.52 (26.63)
detecting fraud and other irregularities;
Provision for tax:
(iv) they have prepared the Annual Accounts on a going concern basis.
Deferred tax (net) 0.00 (31.51)
INDUSTRIAL RELATIONS
Fringe benefit tax 0.06 0.00
Industrial relations continued to be cordial during the year.
Profit / (Loss) after tax 20.46 (58.14)
DIRECTORS
Add: Balance brought forward
from the previous year (173.39) (115.25) 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
Balance to be carried forward (152.93) (173.39) by rotation and is eligible for re-appointment.
Your Directors do not recommend any dividend for the financial year under review. COST AUDIT
PERFORMANCE
The Central Government vide its Order No. 52/295/CAB-88 (CLB) had directed
Sales, production and profitability 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
Sales and other income for the financial year under review were Rs. 243.60 crore as appointment of Shri V. V. Deodhar, Cost Accountant as Cost Auditors of the
against Rs. 181.69 crore for the previous year which showed an increase of 34%. Company for the financial year October 2005 to September 2006.
Clinker production at the Company’s Jafrabad Works was 14.07 lakh metric tonnes AUDITORS
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 M/s. Haribhakti & Co., Chartered Accountants, who are the Auditors of the
of 16% over 13.18 lakh metric tonnes achieved during the previous year. Company, hold office until the conclusion of the forthcoming Annual General
Meeting and are recommended for re-appointment.
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. DISCLOSURE OF PARTICULARS
Review of operations Information as per the Companies (Disclosure of particulars in the report of Board
The Company continued its ongoing efforts to improve the efficiency of its plants of Directors) Rules, 1988 relating to conservation of energy, technology absorption,
through better utilization of available facilities. foreign exchange earnings and outgo is given in Annexure ’A’ forming part of this
report.
Market scenario
PARTICULAR OF EMPLOYEES
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 There were no employees covered under the provisions of Section 217 (2A) of the
signs of improvement during the second half of the current year. However, in Companies Act, 1956 read with the Companies (Particulars of Employees) rules,
certain markets, the prices remained low for most part of the current year. 1975.
Future demand for cement would depend upon Governments’ investment plans in ACKNOWLEDGEMENT
various infrastructure projects as envisaged in the Budget.
The Directors wish to place on record their appreciation for the co-operation and
CAPITAL EXPENDITURE assistance received by the Company from the concerned Ministries of Government
of India, various Departments of Government of Gujarat and Maharashtra, Banks
As at 30th September 2005, the gross fixed assets stood at Rs. 202.66 crore and the and Financial Institutions. The Directors also wish to thank all the employees of
net fixed assets at Rs. 80.78 crore. the Company for their active participation and co-operation.
REFERENCE TO BIFR The Directors wish to record their special thanks to the esteemed shareholders for
Since the accumulated losses as at end September 2003 eroded the entire net worth reposing their confidence in the Company.
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 For and on behalf of the Board,
by BIFR and a case has been registered. BIFR is yet to appoint an Operating
Agency to proceed further in the matter.
V. M. Muralidharan
DEPOSITS K. C. Birla
Sanjeev Bafna
} Directors

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 Place : Mumbai
paid have remained unpaid.
Dated : 8th November, 2005
AUDITORS’ REPORT

The Auditors’ Report to the Shareholders does not contain any qualifications.

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 NARMADA CEMENT COMPANY LIMITED
ANNEXURE ‘A’ TO THE DIRECTORS’ REPORT FORM – B (RULE 2)
INFORMATION AS PER THE COMPANIES (DISCLOSURE OF Form for disclosure of particulars with respect to absorption.
PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES,
1988 AND FORMING PART OF THE DIRECTORS’ REPORT FOR THE A. RESEARCH AND DEVELOPMENT (R&D)
YEAR ENDED 30th SEPTEMBER 2005. 1. Specific areas in which R&D carried out by the Company:
A) CONSERVATION OF ENERGY NA
a) Energy conservation measures taken: 2. Benefits derived as a result of the above R&D:
• Improvement in Plant Run factor and Reliability. NA
• Process optimization. 3. Future plan of action:
b) Additional investments and proposals, if any, being implemented NA
for reduction of consumption of energy:
4. Expenditure on R&D: (Rs. lakhs)
• Installation of Belt Bucket Elevator in Kiln feed.
Current Year Previous Year
c) Impact of measures at (a) and (b) above for reduction of energy 2004 - 05 2003 – 04
consumption and consequent impact on the cost of production of
a) Capital expenditure - -
goods:
b) Recurring expenditure - -
• Reduction in specific power consumption.
c) Total expenditure - -
• Reduction in heat consumption.
d) Total R&D expenditure
d) Total energy consumption and energy consumption per unit of
production as per FORM – A. as % of turnover - -
FORM – A (RULE 2) B. TECHNOLOGY ABSORPTION, ADAPTATION AND
Current Year Previous Year INNOVATIONS
2004-05 2003-04 1. Efforts in brief, made towards technology absorption, adaptation
A POWER AND FUEL and innovation:
CONSUMPTION
1 Electricity: • Imparting training to personnel in various manufacturing
a) Purchased processes.
Unit ‘000 kWh 70464 50420 2. Benefits derived as a result of the above efforts:
Total amount Rs. lakhs 3787 2811 • Cost reduction.
Rate / Unit Rs. 5.37 5.58
b) Own Generation 3. Information regarding technology imported during the last 5 years:
Through Diesel a) Technology imported No
Generator
b) Year of import NA
Unit ‘000 kWh 49351 54314
Units (kWh) per c) Has technology been fully absorbed NA
Ltr. of fuel oil 4.14 3.68 d) If not fully absorbed, areas where
Cost / Unit Rs. 3.98 3.61 this has not taken place,reasons
2 Coal – For process therefore and future plans of action. NA
in Cement Plants
Quantity Tonnes 181725 189199 C. FOREIGN EXCHANGE EARNINGS AND OUTGO
Total cost Rs. lakhs 6160 4659 (Rs. lakhs)
Average rate Rs./Tonne 3390 2462 Current Year Previous Year
3 Furnace Oil 2004 - 05 2003 – 04
(FO / HFO) Foreign exchange earned 320 Nil
Quantity K. Ltrs 11929 11994
Total amount Rs. lakhs 1355 918 Foreign exchange used 238 248
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

B CONSUMPTION PER UNIT OF PRODUCTION

Product: Cement
Electricity# kWh 93.63 91.89
Coal Tonne 0.13 0.14
# excludes non production power consumption

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 NARMADA CEMENT COMPANY LIMITED
AUDITORS’ REPORT
AUDITORS’ REPORT TO THE MEMBERS OF NARMADA CEMENT
COMPANY LIMITED
1. We have audited the attached Balance Sheet of Narmada Cement
Company Limited (“the Company”) as at September 30, 2005 and also
the Profit & Loss Account and the Cash Flow Statement of the Company
for the year ended on that date annexed thereto, which we have signed
under reference to this report. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express
an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally
accepted in India. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by the management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. As required by the Companies (Auditors’ Report) Order, 2003 as amended
by the Companies (Auditors’ Report) (Amendment) Order, 2004 (together
“the order”) issued by the Central Government of India in terms of Section
227 (4A) of the Companies Act 1956 (the ‘Act’), and on the basis of such
checks of the books and records as we considered appropriate and according
to the information and explanations given to us, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the said
Order, to the extent applicable to the Company.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
a) we have obtained all the information and explanations to the best
of our knowledge and belief were necessary for the purpose of our
audit;
b) in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination
of those books;
c) the Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books
of account;
d) in our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement comply with the Accounting Standards referred
to in Section 211 (3C) of the Act to the extent they are applicable
to the Company;
e) on the basis of the written representation received from the directors
of the Company as on 30th September 2005, and taken on record by
the Board of Directors of the Company, we report that none of the
directors is disqualified as on 30 th September 2005 from being
appointed as directors in terms section 274 (1)(g) of the Act;
f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto, give the information
required by the Act, in the manner so required, and give a true and
fair view in conformity with the accounting principles generally
accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 30th September, 2005;
(ii) in the case of the Profit and Loss Account, of the profits of
the Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of
the Company for the year ended on that date.
For HARIBHAKTI & CO.
Chartered Accountants
Place : Mumbai CHETAN DESAI
Date : 8th November, 2005 Partner
Membership No. 17000
(89)
ANNEXURE TO THE AUDITOR’S REPORT
Annexure referred to in Paragraph 3 of the Auditor’s Report of even date to
the members of Narmada Cement Company Limited on the accounts for the
year ended September 30, 2005.
Fixed Assets:
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
2. We have been informed that fixed assets have been physically verified by
the management according to the regular programme of periodical
verification in phased manner. The discrepancies noticed on such physical
verification were not material.
3. The Company has not disposed off substantial part of its fixed assets during
the year.
Inventory:
4. We are informed that the inventory has been physically verified by the
management during the year at reasonable intervals.
5. The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to size of the Company
and the nature of its business.
6. The Company has maintained proper records of inventory. We are informed
that the discrepancies noticed on verification between the physical stocks
and the book records were not material and have been properly dealt with
in the books of accounts.
Loans and Advances:
7. We are informed that the Company has not taken / granted loans from / to
companies, firms or other parties registered under section 301 of the Act,
during the year.
Internal Controls:
8. There are adequate internal control procedures commensurate with the
size of the Company and the nature of its business for the purchase of
inventory and fixed assets, and for the sale of goods. During the course of
our audit we have not observed any continued failure to correct major
weaknesses in internal controls.
Transactions with parties under section 301 of the Act:
9. According to the information and explanation given to us by the
management, there are no transactions that need to be entered in the
register maintained under section 301 of the Act.
Fixed Deposits:
10. According to the information and explanations given to us, the Company
has not accepted any deposits under the provisions of Sections 58A and
58AA of the Act or the rules framed thereunder.
Internal Audit:
11. In our opinion, the Company has an adequate internal audit system
commensurate with the size of the Company and the nature of its business.
Cost Records:
12. We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Act. We are
of the opinion that prima-facie, the prescribed accounts and records have
been maintained. However, we have not made a detailed examination of
these records with a view to determine whether they are accurate or
complete.
Statutory Dues:
13. According to the books and records of the Company as produced and
examined by us in accordance with generally accepted auditing practices
in India and also based on management representation, the Company is
 NARMADA CEMENT COMPANY LIMITED
generally regular in depositing undisputed statutory dues including Provident Potentially Sick Company:
Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, 16. The accumulated losses of the Company at the year-end exceeds fifty
Service Tax, Excise Duty, Custom Duty, Cess and any other statutory dues percent of its networth. The Company has incurred cash profits during the
with the appropriate authorities. year covered by our audit and cash losses in the immediately preceding
financial year.
14. According to the information and explanations provided to us, no
undisputed amounts payable in respect of Provident Fund, Investor Repayment of Dues:
Education and Protection Fund, Income Tax, Sales Tax, Service Tax, 17. The Company has not defaulted in repayment of dues to bank.
Custom Duty, Excise Duty, Cess and any other statutory dues were Guarantees Given:
outstanding as at 30th September 2005 for a period of more than six months
from the date they became payable. 18. According to the information and explanations provided to us, the
Company has not given any guarantee for loans taken by others from
15. As at 30th September 2005, according to the information and explanations banks or financial institutions.
provided to us, there are no dues of sales tax, income tax, custom duty, Sources and Application of Funds:
service tax, excise duty or cess which have not been deposited on account
of any dispute except as follows: 19. On the basis of review of utilization of funds, which is based on an overall
examination of the balance sheet of the Company and related information
Name of Nature of Amount Period to Forum where as made available to us and as represented to us by the management, no
Statute Dues (Rs. Lakhs) the amounts which dispute funds raised on short basis have been used for long term purpose.
relates is pending Fraud:

Sales Tax Sales Tax 126.92 1998-1999 Appellate 20. Based upon the audit procedures performed and the information and
Laws Authority – explanations provided to us by the management, we report that no fraud
Tribunal level on or by the Company has been noticed or reported during the course of
our audit.
0.31 1994-1995 Deputy Other Clauses:
Commissioner 21. Following clauses of Paragraph 4 of Companies (Auditors Report) Order,
2003 are not applicable to the Company and hence the same are not
Central Excise 119.22 1997-2004 Appellate reported upon:-
Excise Act, Duty Authority –
Clause (xii), Clause (xiii), Clause (xiv), Clause (xvi), Clause (xviii), Clause
1944 Upto
(xix) and Clause (xx).
Commissioners /
Revisional For HARIBHAKTI & CO.
Authorities Level Chartered Accountants

6.99 2002-2003 Appellate Place : Mumbai CHETAN DESAI

Authority – Date : 8th November, 2005 Partner
Tribunal level Membership No. 17000

Customs Customs 934.88 2003-2004 Appellate

Act, 1962 Duty Authority –
Upto Commissioners/
Revisional
Authorities level

Mineral Interest 130.91 Various Years Geologist-Amreli

Concession on Royalty
Rules

Land Land 44.13 Various Years Revenue

Revenue Revenue Department-
Act Government
of Gujarat

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 NARMADA CEMENT COMPANY LIMITED
BALANCE SHEET AS AT 30TH SEPTEMBER, 2005 PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 30TH SEPTEMBER, 2005

As at 30-09-2005 As at 30-09-2004 2004-05 2003-04

Schedules Rs lakhs Rs lakhs Rs lakhs Schedules Rs lakhs Rs lakhs Rs lakhs

SOURCES OF FUNDS: INCOME

SHAREHOLDERS’ FUNDS: Gross Sales 27765.86 20505.56

Less : Excise Duty 3530.78 2463.90
Share Capital 1 7138.64 7138.64
Net Sales 24235.08 18041.66
Reserves and Surplus 2 15.23 15.23
Interest & Dividend Income 13 2.81 3.22
7153.87 7153.87
Other Income 14 121.77 124.39
Loan Funds
Increase / (Decrease) in Stocks 15 (357.32) 751.11
Secured Loans 3 769.52 1013.33
24002.34 18920.38
Unsecured Loans 4 13208.41 13208.41
13977.93 14221.74
TOTAL 21131.80 21375.61
EXPENDITURE
Raw Material Consumed 16 1781.48 1611.32

Manufacturing Expenses 17 14853.13 12416.15

Clinker Transportation &
APPLICATION OF FUNDS
Handling Expenses 2337.58 1388.59
Fixed Assets
Payments to and
Gross Block 5 19730.13 19727.76 Provisions for Employees 18 867.95 2236.25

Less : Depreciation 12188.90 11564.38 Selling, Distribution, Administration

and Other Expenses 19 1349.52 1961.22
Net Block 7541.23 8163.38
Interest 20 118.83 1299.08
Capital Work-in-Progress 536.29 11.72
Miscellaneous Expenditure
8077.52 8175.10 Written Off — 3.61
Current Assets, Loans and Advances Depreciation 641.99 667.34
Inventories 6 5281.33 4670.78 21950.48 21583.56

Sundry Debtors 7 1945.44 864.74

Cash and Bank Balances 8 197.36 261.58 Profit/(Loss) before Tax 2051.86 (2663.18)

Other Current Assets 0.15 0.13 Provision for Tax:

Loans and Advances 9 1137.77 684.37 Net Deferred Tax — 3150.80

8562.05 6481.60 Fringe Benefit Tax 6.42 —

Profit/(Loss) after Tax 2045.44 (5813.98)
Less:
Current Liabilities & Provisions Balance brought forward from Previous Year (17338.42) (11524.44)

Current Liabilities 10 9906.83 9741.57 Balance carried to Balance Sheet (15292.98) (17338.42)

Provisions 11 77.15 61.17

9983.98 9802.74 Basic and diluted earnings per equity share (in Rs.) 2.87 (8.15)
Net Current Assets (1421.93) (3321.14) Face value per equity share (in Rs.) 10.00 10.00
Profit & Loss Account 12 14476.21 16521.65 Number of equity shares 71373950 71373950
TOTAL 21131.80 21375.61
Accounting Policies and
Notes on Accounts 21
Accounting Policies and
Notes on Accounts 21

As per our separate report attached. As per our separate report attached.

} }
For HARIBHAKTI & CO. V. M. MURALIDHARAN For HARIBHAKTI & CO. V. M. MURALIDHARAN
Chartered Accountants Chartered Accountants
K. C. BIRLA Directors K. C. BIRLA Directors
CHETAN DESAI CHETAN DESAI
Partner SANJEEV BAFNA Partner SANJEEV BAFNA

Mumbai Mumbai
Dated : 8th November, 2005 KAMAL RATHI Company Secretary Dated : 8th November, 2005 KAMAL RATHI Company Secretary

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 NARMADA CEMENT COMPANY LIMITED
SCHEDULES SCHEDULE 2
RESERVES & SURPLUS
(Rs Lakhs) (Rs. lakhs)
SCHEDULE 1 As at As at
30-09-2005 30-09-2004 Balance Additions Deduction/ Balance
as at 30th during Adjustments as at 30th
September, 04 the year during the year September, 05
SHARE CAPITAL
Capital Reserve 15.23 — — 15.23
Authorised
General Reserve* 816.77 — 816.77 —
75000000 (75000000) Equity shares of Rs. 10 each 7500.00 7500.00
832.00 — 816.77 15.23
500000 (500000) Redeemable cumulative preference Previous year 2393.60 — 2378.37 15.23
shares of Rs. 100/- each 500.00 500.00
8000.00 8000.00 *(Rs.816.77 Lakhs deducted as per Contra in Profit & Loss Account)

Issued and Subscribed SCHEDULE 3 As at As at

30-09-2005 30-09-2004
71398700 (71398700) Equity shares of
Rs. 10 each fully paid-up 7139.87 7139.87 SECURED LOANS
Cash Credits secured by hypothecation of stocks and
Paid-up book debts of the Company 769.52 1013.33
71373950 (71373950) Equity shares of 769.52 1013.33
Rs. 10 each fully paid-up 7137.40 7137.40
Forfeited Equity Shares 1.24 1.24 SCHEDULE 4
7138.64 7138.64 UNSECURED LOANS
Inter corporate deposits 13208.41 13208.41
NOTE: (Due within one year Rs.13208.41 Lakhs
Aggregate shares held by UltraTech Cement Limited (Holding Company) (Rs. 8838.16 Lakhs))
69803293 (69752898) Equity shares of Rs. 10/- each fully paid.
13208.41 13208.41

SCHEDULE 5
FIXED ASSETS (Rs lakhs)
Particulars GROSS BLOCK DEPRECIATION NET BLOCK
As at Additions Deductions As at Upto For the Deductions Upto As at As at
30-09-04 30-09-05 30-09-04 Year 30-09-05 30-09-05 30-09-04
Freehold Land 176.15 — — 176.15 5.77 0.60 — 6.37 169.78 170.38

Leasehold Land 194.68 — — 194.68 48.02 9.61 — 57.63 137.05 146.66

Buildings 1669.55 — — 1669.55 450.62 41.46 — 492.08 1177.47 1218.93

Plant and Machinery 17204.31 11.70 — 17216.01 10726.11 558.34 — 11284.45 5931.56 6478.20

Furniture and Fixtures &

Office Equipments 427.83 0.21 6.79 421.25 285.11 27.60 6.79 305.92 115.33 142.72

Vehicles 55.24 6.03 8.78 52.49 48.75 4.38 10.68 42.45 10.04 6.49
Total 19727.76 17.94 15.57 19730.13 11564.38 641.99 17.47 12188.90 7541.23 8163.38
Previous Year 19638.74 89.02 — 19727.76 10897.04 667.34 — 11564.38
Add: Capital work-in-progress 536.29 11.72
8077.52 8175.10

NOTE:- 1. Amount of Rs.3.94 lakhs appearing in depreciation deductions is towards excess depreciation provided in earlier years
2. Capital work in progress includes Capital Advances to suppliers of Rs. 59.69 lakhs.

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 NARMADA CEMENT COMPANY LIMITED
SCHEDULES SCHEDULE 11 (Rs Lakhs)

SCHEDULE 6 (Rs Lakhs) As at 30-09-2005 As at 30-09-2004

As at 30-09-2005 As at 30-09-2004 PROVISIONS

INVENTORIES Provision for Leave Encashment 73.66 59.45

Stores & Spare parts, Provision for Taxation — 1.72
Packing Material and Fuels 3012.13 2100.07
Raw Materials 156.66 145.63 Provision for FBT 3.49 —
Finished Goods 355.71 231.27 77.15 61.17
Process Stock 1756.83 2193.81
5281.33 4670.78
SCHEDULE 12
SCHEDULE 7 Profit and Loss Account
SUNDRY DEBTORS Profit and Loss Account
Exceeding six months: (Debit Balance) 15292.98 17338.42
Good and Unsecured 7.79 21.86
Doubtful and Unsecured 193.61 8.62 Less :General Reserve deducted
as per Contra 816.77 816.77
201.40 30.48
Less: Provision for Doubtful 14476.21 16521.65
Debts 193.61 8.62
7.79 21.86
Other: Good and Unsecured 1937.65 842.88 2004-05 2003-04
1945.44 864.74 SCHEDULE 13
INTEREST & DIVIDEND
SCHEDULE 8 INCOME
CASH AND BANK BALANCES Interest (Gross) 2.81 3.22
Cash balance on hand 1.72 1.90
Bank Balance with Scheduled Banks: (Tax Deducted at Source Rs.46494,
Previous year Rs.61133)
On Current accounts 184.07 240.94
On Dividend Account — 7.17 2.81 3.22
On Fixed Deposits accounts 10.00 10.00
On Other Accounts 1.57 1.57
SCHEDULE 14
197.36 261.58
OTHER INCOME
SCHEDULE 9 Insurance Claim 32.96 17.98
LOANS & ADVANCES Provision written back 7.66 —
Unsecured
Considered Good: Profit on sale of assets 0.24 —
Advances recoverable in cash or Miscellaneous Income/ receipts 80.91 106.41
in kind or for value to be received 643.59 203.98
Advance Income-tax and tax 121.77 124.39
deducted at source 15.93 16.03
Advance and Deposits with
Railways, Government SCHEDULE 15
Bodies and Others 478.25 464.36 INCREASE / (DECREASE) IN STOCKS
1137.77 684.37 Closing Stock
Considered doubtful:
Advances recoverable in Finished Goods 355.71 231.27
cash or in kind 22.00 22.00
Process Stock 1756.83 2193.81
1159.77 706.37
Less: Provision for doubtful 2112.54 2425.08
loans and advances 22.00 22.00
1137.77 684.37 Opening stock
Finished Goods 231.27 75.88
SCHEDULE 10
CURRENT LIABILITIES Process Stock 2193.81 1357.49
Sundry Creditors 2425.08 1433.37
Small Scale Industries 16.12 17.97
(To the extent identified with Add: Increase / (Decrease) in
available information) Excise Duty on Stocks (44.78) 240.60
Others 8026.06 8249.24
Increase / (Decrease) in Stocks (357.32) 751.11
8042.18 8267.21
Security and Other Deposits 98.80 104.10
Advances from customers 99.87 49.83 SCHEDULE 16
Amount transferable to RAW MATERIALS CONSUMED
Investor Education and
Protection Fund, when due Opening Stock 145.63 121.88
- Unclaimed amount on account of
redemption of preference shares 0.37 0.37 Purchase and Incidental Expenses 1792.51 1635.07
- Unclaimed dividend — 7.17
Other Liabilities 1593.37 1203.82 1938.14 1756.95
Pension payable under Voluntary Less: Closing Stock 156.66 145.63
Retirement-cum-Pension scheme 72.24 109.07
1781.48 1611.32
9906.83 9741.57

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 NARMADA CEMENT COMPANY LIMITED
SCHEDULES SCHEDULE 21
SCHEDULE 17 (Rs Lakhs) SIGNIFICANT ACCOUNTING POLICIES
2004-05 2003-04 I. Basis of Accounting
MANUFACTURING EXPENSES The Company maintains its accounts on accrual basis following the historical
cost convention, in compliance with the Accounting Standards specified to
Consumption of Stores, Spare Parts be mandatory by the Institute of Chartered Accountants of India and the
and Components, Packing
relevant provisions of the Companies Act, 1956.
Materials and Incidental Expenses 1991.03 2100.17
II. Fixed Assets and Depreciation
Power & Fuel Consumed 12053.28 9598.95
Fixed assets are stated at original cost less accumulated depreciation.
Hire Charges of Plant & Machinery
and others 145.88 78.33 Depreciation in respect of all assets is provided on straight line basis at the
rates prescribed in Schedule XIV to the Companies Act, 1956. Leasehold
Repairs to Plant & Machinery 487.18 508.12
land / land under mining lease are amortized over the period of lease /
Repairs to Buildings 42.02 39.78 expected mining deposits. No depreciation is charged on Freehold land not
having mining deposit.
Repairs to Others 133.74 90.80
III. Inventories
14853.13 12416.15
Inventories are valued at lower of cost or estimated net realisable value.
Cost of raw materials is determined on weighted average basis.
SCHEDULE 18
Material-in-process includes related overheads and cost of finished goods
PAYMENTS TO AND PROVISIONS includes related overheads and excise duty paid/payable on such goods.
FOR EMPLOYEES
IV. Revenue Recognition
Salaries, Wages and Allowances 667.39 625.35
Revenue is recognised only when there is no significant uncertainty as to
Contribution to and Provisions for measurability / collectibility of the amounts. Sales are accounted on dispatch
Provident and Other Funds 54.78 50.79
of products and sales value is net of discount on sales and includes excise
Welfare Expenses 145.78 172.00 duty.

VRS, VRPS & other schemes written-off — 1388.11 V. Retirement Benefits

867.95 2236.25 Provisions for / contributions to retirement benefit schemes are made as
follows:
a) Provident fund on actual liability basis.
SCHEDULE 19 b) Gratuity based on actuarial valuation.
SELLING, DISTRIBUTION, c) Superannuation on actual liability basis.
ADMINISTRATION AND
OTHER EXPENSES d) Leave encashment benefit on retirement on actuarial valuation basis.

Commission paid to Distributors and VI. Foreign Currency Transactions

Selling Agents 42.86 26.59
Foreign currency transactions are accounted for at the rates prevailing on the
Freight, handling and other expenses 480.38 131.15 date of transaction. Foreign currency assets and liabilities outstanding at the
Advertisements & Publicity 1.61 5.58 close of the financial year are restated at the contracted and / or appropriate
exchange rates at the close of the year. The gain or loss due to decrease /
Insurance 93.61 104.03 increase in Rupee liability on account of fluctuations in the rate of exchange
Rent (including Lease Rent) 17.55 19.86 is adjusted to the cost of assets if it relates to acquisition of fixed assets and is
charged to Profit and Loss account in other cases.
Rates and Taxes 74.32 64.39
VII. Leases
Stationery, Printing, Postage and
Telephone Expenses 27.89 22.01 Assets acquired under leases where a significant portion of the risks and
Travelling and Conveyance 26.18 31.80 rewards of ownership are retained by the lessor are classified as operating
leases. Lease rentals are charged to the Profit & Loss Account on accrual
Legal and Professional charges 83.25 64.04 basis.
Bad Debts Written Off 0.20 34.19 VIII. Taxes on Income
Provision for Doubtful Debts 193.61 8.62 Tax on income for the current period is determined on the basis of taxable
Loss on Sale of Fixed Assets 0.93 — income and tax credits computed in accordance with the provisions of the
Income Tax Act, 1961, and based on expected outcome of assessments/
Inventory Obsolescence — 843.11
appeals.
Capital Work-in-Progress Written off — 309.90
Deferred tax is recognised on timing differences between the accounting
Settlement Charges 109.42 — income and the taxable income for the year, and quantified using the tax
Other Miscellaneous Expenses 197.71 295.95 rates and laws enacted or substantively enacted as on the Balance Sheet
date.
1349.52 1961.22
Deferred tax assets are recognised and carried forward to the extent that
there is a reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realised.
SCHEDULE 20
INTEREST IX. Contingent Liabilities
On Cash Credit 71.79 142.86 Depending on facts of each case and after due evaluation of relevant legal
On Inter Corporate Deposits — 823.29 aspects, claims against the Company not acknowledged as debts are provided
or disclosed as contingent liabilities. In respect of statutory matters, contingent
On Other Accounts 47.04 332.93
liabilities are provided or disclosed only for those demand(s) that are contested
118.83 1299.08 by the Company.

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 NARMADA CEMENT COMPANY LIMITED
SCHEDULES NOTES FORMING PART OF ACCOUNTS
NOTES FORMING PART OF ACCOUNTS No amounts have been written off or written back in the year in
1. Cash Credit facility from the Bank is secured by way of a charge by respect of debts due from or to the above parties.
hypothecation of stocks, stores, book debts, movable properties of the
Company and by equitable / legal mortgage of immoveable properties situated (iii) Related party relations are identified by the Company and relied upon
at Babarkot village in Jafrabad. by the auditors.

2. Future liability on account of pension payable under the Voluntary Retirement 6. The Company has taken on operating lease certain assets costing Rs. 27.97
cum Pension Scheme / Employee Separation Scheme introduced earlier, lakhs (Rs. 27.97 lakhs), the future lease obligation against which is Rs. 20.07
amount to Rs.72.24 lakhs (Rs. 109.07 lakhs). lakhs (Rs. 26.91 lakhs) as at 30th September, 2005; break up of which is as
under-
3. Details of contingent liabilities not provided for in the books in respect of Rs. lakhs
the following:
30.9.2005 30.9.2004
Rs. lakhs
not later than one year 7.24 7.16
30.9.2005 30.9.2004
Later than one year but not later than five years 12.83 19.75
a. Counter guarantees given by the
Company to Bankers against Later than five years Nil Nil
guarantees issued by them. 98.55 17.78
b. Estimated amount of Contracts 7. Basic and Diluted Earning per share having Face value of Rs. 10/- each is
remaining to be executed on Rs. 2.87 (previous year Rs. (8.15)). The calculation is based on Profit after
Capital Account and not provided for (gross). 269.17 8.80 Tax Rs. 2045.44 lakhs as divided by weighted average number of equity
shares as at 30th September, 2005 of 713.74 lakhs.
Amount net of advances. 209.48 8.80
c. Other claims against the Company not 8. Deferred Tax Assets/ liabilities
acknowledged as debts. 225.53 50.49
a. The details of deferred tax assets and liabilities are as under:
d. Disputed demands / matters in appeals Rs. lakhs
in respect of notices received from As at For the Year As at
Central Excise / Customs / Sales Tax 30.09.2004 2004-05 30.09.2005
authorities, and are pending for disposal. 1188.32 266.75
Deferred tax assets
4. In respect of Small Scale Industries, the Company owes a sum of Rs. 16.12
lakhs (Rs. 17.97 lakhs) as at 30th September, 2005. Total outstanding dues Carried forward business loss 4636.62 (953.10) 3683.52
of small scale industrial undertakings have been determined to the extent
Unabsorbed tax depreciation 2785.54 (544.79) 2240.75
such parties have been identified on the basis of information available with
the Company. Expenditure disallowed u/s 43B — 24.53 24.53
The names of the small scale industry to whom the company owes monies for
Voluntary retirement schemes 274.67 (150.59) 124.08
more than 30 days as at 30th September, 2005 are:
1. Sea Linkers Total 7696.83 (1623.95) 6072.88

2. Multiple Fabric Company Ltd. Deferred tax liability

Difference between tax and
5. Related Party relationships / transactions warranting disclosures under AS-18 book depreciation 2023.74 (177.12) 1846.62
issued by the Institute of Chartered Accountants of India are as under:
(i) Names and relationship of the transacting parties: Total 2023.74 (177.12) 1846.62
Net Deferred Tax Assets 5673.09 (1446.83) 4226.26
Holding Company
UltraTech Cement Limited (holds 97.80 per cent of the Equity Capital b. Working of Deferred Taxes is based on Assessment Orders where
as at 30th September, 2005). assessments are complete and on Return of Income in other cases.
Other related parties – c. Deferred Tax Assets and Liabilities have not been recognized during the
current year.
Subsidiary Companies of UltraTech Cement Limited
9. Figures for the previous year have been regrouped or rearranged wherever
Dakshin Cements Limited, UltraTech Ceylinco (Private) Limited. necessary to make them comparable with those for the current year.
Holding Company of UltraTech Cement Limited 10. Figures in brackets are for the previous year.
Grasim Industries Limited 11. Additional information pursuant to provisions of paragraph 3 and 4 of Part II
(ii) Nature and volume of transactions: of Schedule VI to the Companies Act, 1956:
Rs. lakhs
2004-05 2003-04
2004-05 2003-04
Quantity Rs Lakhs Quantity Rs Lakhs
UltraTech Cement Limited – Holding Company Lakh MT Lakh MT
a. Sale of Goods
1 Sales 20399.05 13558.11
Cement 8.61 19143.00 6.13 13454.44
2 Purchases —
2.1 Raw materials 0.14 1.15 Clinker 6.62 8622.86 7.05 7051.12

2.2 Stores & Spares — 13.99 Total 27765.86 20505.56

2.3 Power & Fuel 5682.39 5074.70

b. Details of Raw Materials consumption
3 Interest & other finance charges — 1152.31
Lime Stone 19.96 1328.19 19.13 1234.89
4 Share capital 6980.33 6975.29
Gypsum 0.45 178.31 0.28 97.49
5 Unsecured loans – ICDs 13208.41 13208.41
Pozzolona 0.46 111.60 0.25 52.50
6 Current assets - Sundry Debtors 1702.27 374.16
Others 163.38 226.44
7 Current liabilities - Sundry Creditors 6696.29 6467.25
Total 1781.48 1611.32
Grasim Industries Limited (Holding Company
of UltraTech Cement Limited)
Sea Freight 461.28 350.21

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NARMADA CEMENT COMPANY LIMITED
SCHEDULES

c. Capacities and Production:

Figures in Lakh Tonnes
Unit Licensed Capacity * Installed Capacity # Actual Production
Per annum Per annum
2004-05 2003-04 2004-05 2003-04 2004-05 2003-04
Cement 10 10 15 15 15.30 13.27

* As certified by the Management and accepted by Auditors, this being a technical matter.
# Includes 6.62 Lakh Tonnes (7.05 Lakh Tonnes) of clinker produced and sold.

d. Inventories:
Quantity in Lakh Tonnes & Rs. in lakhs
Opening Stock As At Closing Stock As At
30.9.2004 1.10.2003 30.9.2005 30.9.2004

Qty Rs Qty Rs Qty Rs Qty Rs

Cement 0.13 231.27 0.04 75.88 0.18 355.71 0.13 231.27

e. Auditors remuneration and expenses charged to the accounts:

Rs. Lakhs
2004-05 2003-04
Audit fees 3.58 3.03
Tax audit fees 0.66 0.66
Other services 0.96 0.30
Expenses reimbursed 0.04 0.05
Total 5.24 4.04

f. Payments in Foreign Currency Rs. Nil (Rs. Nil)

g. Value of Imports (C.I.F. basis)

Components and Spare Parts 237.58 248.88
Fuel 6110.37 4264.41
Total 6347.95 4513.29

h. Value of Imported and Indigenous Raw Materials, Spare Parts and Stores Consumed:
2004-05 2003-04
Value % Value %
Rs. Lakhs Rs. Lakhs
Raw Materials

Imported — — — —
Indigenous 1781.48 100.00 1611.32 100.00
Total 1781.48 100.00 1611.32 100.00
Stores & Spares
Imported 237.58 16.33 248.88 13.75
Indigenous 857.73 83.67 1245.39 86.25

Total 1095.31 100.00 1534.27 100.00

i Earning in Foreign Currency (Export of Goods on F.O.B. Basis) Rs. 320.24 Lakhs (Rs. Nil)

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 NARMADA CEMENT COMPANY LIMITED
SCHEDULES

12. Additional information pursuant to provisions of Part IV of Schedule VI to the Companies Act, 1956.
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE:
I. Registration Details
Registration No : 19626
State Code : 11
Balance Sheet Date : 30.09.2005
II. Capital Raised during the Year (Amount in Rs Thousands)
Public Issue : Nil
Rights Issue : Nil
Bonus Issue : Nil
Private Placement : Nil
III. Position of Mobilisation & Deployment of Funds (Amount in Rs Thousands)
Total Liabilities : 2113180
Total Assets : 2113180
Sources of Funds
Paid up Capital : 713864
Reserves & Surplus : 1523
Secured Loans : 76952
Unsecured Loans : 1320841
Deferred Tax Liabilities : Nil
Application of Funds
Net Fixed Assets : 807752
Investments : Nil
Deferred Tax Assets : Nil
Net Current Assets : (142193)
Misc. Expenditure : Nil
Accumulated Losses : 1447621
IV. Performance of the Company
(Amount in Rs Thousands)
Turnover : 2400234
Total Expenditure : 2195048
Profit Before Tax : 205186
Provision for Taxes : 642
Provision for Deferred Taxes (net) : Nil
Profit After Tax : 204544
Earning Per Share : 2.87
Dividend Rate (%) : Nil
V. Generic Name of Principal Product of the Company
Item Code : 252329.01
Product Description : Other Grey Portland Cement

V. M. MURALIDHARAN

KAMAL RATHI
K. C. BIRLA
SANJEEV BAFNA
} Directors

Place: Mumbai Company Secretary

Dated: 8th November, 2005

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 NARMADA CEMENT COMPANY LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED 30TH SEPTEMBER, 2005
Year ended Year ended
30-09-2005 30-09-2004
Rs. lakhs Rs. lakhs
A. Cash flow from Operating Activities :
Profit/(Loss) Before Tax & Extraordinary Items 2051.86 (2663.18)
Adjustment for :
Depreciation 641.99 667.34
Capital Work-In-Progress written off — 309.90
(Profit)/Loss on Sale of Asses (Net) 0.68 —
Interest Expenses 118.83 1309.54
Interest Income (2.81) (3.22)
Operating Profit Before Working Capital Changes 2810.55 (379.62)
Adjustment for :
(Increase)/Decrease in Trade & Other Receivables (1534.12) (452.00)
(Increase)/Decrease in Inventories (610.55) 1.19
(Increase)/Decrease in Miscellaneous Expenditure not written off — 1951.18
Increase/(Decrease) in Trade Payables 165.26 (414.97)
Leave Encashment 14.21 12.55
Provision For Tax (1.72) —
Sub Total (1966.92) 1097.94
Cash Generated from Operations 843.63 718.32
Fringe Benefit Tax Paid 2.93 —
Net Cash from Operating Activities (A) 840.70 718.32
B. Cash flow from Investing Activities
Net Purchase of Fixed Assets (542.50) 1.24
Sale of Fixed Assets (2.59) —
Interest Received 2.81 3.22
Net Cash Used in Investing Activities (B) (542.28) 4.46
C. Cash flow from Financing Activities
Repayment from Long-Term and other borrowings (243.81) 641.59
Interest Paid (118.83) (1309.55)
Net Cash Used in Financing Activities (C) (362.64) (667.96)
Net Increase /(Decrease) in Cash & Cash Equivalents (A+B+C) (64.22) 54.82
Cash & Cash Equivalents at the beginning of the year 261.58 206.76
Cash & Cash Equivalents at the end of the year 197.36 261.58
Notes:
1. Cash flow statement has been prepared under the Indirect method as set out in Accounting Standard -3 issued by the
Institute of Chartered Accountant of India.
2. Purchase of fixed assets includes movements of capital work in progress between the beginning and the end of the year
3. Previous year figure regrouped/recasted wherever necessary

As per our separate report attached

For HARIBHAKTI & CO. V. M. MURALIDHARAN

Chartered Accountants K. C. BIRLA
SANJEEV BAFNA
CHETAN DESAI
Partner Directors
KAMAL RATHI
Company Secretary
Place : Mumbai :
Dated : 8th November, 2005

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 DAKSHIN CEMENTS LIMITED
DIRECTORS’ REPORT The Notes to the Accounts referred to in the Auditors Report are
self explanatory and therefore do not call for any further comments
To The Members, from the Directors.
Dakshin Cements Limited
PARTICULARS OF EMPLOYEES.
Your Directors present the Thirteenth Annual Report of your
Company together with Audited Accounts for the year ended 31st Section 217(2A) of Companies Act, 1956 read with the Companies
March 2006. (Particulars of Employees) Rules, 1975 do not apply to your
FINANCIAL RESULTS Company as none of its employees are covered under its provisions.
During the year under review, your Company did not carry on any CONSERVATION OF ENERGY, TECHNOLOGY
business activities and accordingly no Profit and Loss Account has ABSORPTION, FOREIGN EXCHANGE EARNINGS &
been prepared. OUTGO
CAPITAL EXPENDITURE
During the year under review, your Company did not carry any
During the year under review, your Company did not incur any commercial / business activity and accordingly particulars under
capital expenditure. conservation of energy, technology absorption, foreign exchange
earnings & outgo have not been provided.
FIXED DEPOSITS
Your Company has not accepted any fixed deposit during the year AUDITORS
ending 31st March, 2006.
M/s G.P. Kapadia & Co., Chartered Accountants, Mumbai the
DIRECTORS’ RESPONSIBILITY STATEMENT existing Auditors will retire at the ensuing Annual General Meeting
As required under Section 217 (2AA) of the Companies Act, of your Company. They being eligible to be re-appointed have
1956 your Directors confirm that: expressed their willingness to be re-appointed as the Statutory
Auditors of your Company for the financial year 2006-07. A
i) in the preparation of Annual Accounts, the applicable resolution seeking your approval for their re-appointment has been
accounting standards have been followed; included in the Notice convening the Annual General Meeting.
ii) the Directors have selected such accounting policies and made
judgments and estimates that are reasonable and prudent so ACKNOWLEDGEMENT
as to give a true and fair view of the state of affairs of the
The Board of Directors wish to place on record their appreciation
company as at 31st March, 2006;
for the support and co-operation extended by UltraTech Cement
iii) the Directors have taken proper and sufficient care for the Limited, the Auditors and the Bankers of the Company.
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 the fraud and other irregularities; and For and on behalf of the Board of Directors
iv) the Directors have prepared the annual accounts on a going
concern basis.
AUDITORS’ REPORT
K.C. BIRLA
DEEPAK RAZDAN
M.R. PRASANNA
} Directors

There are no adverse comments, observation or reservation in the Place: Mumbai

Auditors Report on the Annual Accounts of the Company. Date: April 18, 2006

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 DAKSHIN CEMENTS LIMITED
AUDITORS’ REPORT
We have audited the attached Balance Sheet of Dakshin Cements
Limited as at 31st March, 2006. No Profit and Loss Account has
been prepared as the Company has not carried out any activities.
These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan
and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In accordance with the provisions of Section 227 of the Companies
Act, 1956, we report that:
1. As the Company has carried out no activities during the year,
the requirement by the Companies (Auditor’s Report) Order,
2003 issued by the Central Government of India in terms of
Section 227(4A) of the Companies Act, 1956, is not
applicable.
2. Further to our comments in paragraph 1 above, we report
that:
(a) we have obtained all the information and explanations,
which to the best of our knowledge and belief were
necessary for the purposes of our audit;
(b) in our opinion, proper books of account as required by
law have been kept by the Company so far as appears
from our examination of those books;
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(c) the balance sheet dealt with by this report is in agreement
with the books of account;
(d) in our opinion, the balance sheet dealt with by this
report, complies with the accounting standards referred
to in Section 211(3C) of the Companies Act, 1956, to
the extent applicable;
(e) on the basis of written representations received from
the directors as on 31st March, 2006, and taken on
record by the Board of Directors, we report that none of
the directors is disqualified as on 31st March, 2006 from
being appointed as a director in terms of Section
274(1)(g) of the Companies Act, 1956; and
(f) in our opinion and to the best of our information and
according to the explanations given to us, the said
balance sheet read together with the significant
accounting policies and other notes appearing in
Schedule 5, gives the information required by the
Companies Act, 1956, in the manner so required and
give a true and fair view in conformity with the
accounting principles generally accepted in India, of the
state of Company’s affairs as at 31st March, 2006.
G. P Kapadia &Co
Chartered Accountants
by the hand of
ATUL B. DESAI
Partner
(Membership No 30850)
Mumbai,April 18, 2006
 DAKSHIN CEMENTS LIMITED
BALANCE SHEET AS AT 31st March, 2006
As at As at
31st March, 2006 31st March,2005
Schedules Rupees Rupees Rupees Rupees

I. SOURCES OF FUNDS:

SHARE HOLDERS’ FUNDS

Share Capital 1 500,000 500,000

Loan Funds — —
500,000 500,000

II. APPLICATION OF FUNDS:

Fixed Assets 2

Gross block — —

Less : Depreciation — —
Net block — —

Capital Work in progress — —

Incidental Expenditure pending

allocation / capitalisation 1,390,738 1,390,738 1,197,776 1,197,776

Current Assets, Loans and Advances 3 361,165 202,546

361,165 202,546
Less : Current Liabilities and Provisions 4 1,289,297 (928,132) 937,716 (735,170)
Miscellaneous Expenditure
(to the extent not written off or adjusted) 37,394 37,394
500,000 500,000

Notes on Accounts 5

As per our report attached.

For G.P. Kapadia & Co

Chartered Accountants
by the hand of

ATUL B. DESAI K. C. BIRLA DEEPAK RAZDAN M. R. PRASANNA

Partner Director Director Director
Membership No. 30850

Mumbai, April 18, 2006

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 DAKSHIN CEMENTS LIMITED
Schedules forming part of the Balance Sheet Schedule - 5
As at As at NOTES ON ACCOUNTS
31st March, 31st March, 1. Significant Accounting Policies :
2006 2005 The Company maintains its accounts on accrual basis following the historical
Schedule - 1 Rupees Rupees cost convention in accordance with generally accepted accounting principles
SHARE CAPITAL (“GAAP”) and in compliance with the accounting standards referred to in
Authorised Section 211 (3C) and other requirements of the Companies Act, 1956, to the
500,000 Equity shares of Rs 10 each 5,000,000 5,000,000 extent applicable.
2. As the Company has not yet started commercial operation no, Profit & Loss
Issued and subscribed
Account has been prepared. The statement showing the unallocated, pre-
50,000 Equity shares of Rs 10 each
operative expenditure incurred up to 31 st March, 2006 is shown in
fully paid (All the shares are held by
Schedule - 2.
UltraTech Cement Limited,
the holding company) 500,000 500,000 3. The pre-operative expenditure as under pending allocation will be allocated to
appropriate fixed assets on commencement of commercial production:
Incidental expenditure pending allocation / capitalisation
Schedule - 2 As at As at
FIXED ASSETS 31st March, 31st March,
Gross block — — 2006 2005
Less : Depreciation — — Rupees Rupees
Net block — — Travelling and conveyance 134,629 134,629
Capital work in progress — — Subscription 1,000 1,000
Incidental Expenditure pending allocation Survey expenses 90,750 90,750
/capitalisation 1,390,738 1,197,776 Testing charges 8,000 8,000
Consultancy Charges 2,500 2,500
1,390,738 1,197,776 Auditors’s remuneration 57,670 52,160
Printing & Stationery 3,764 3,764
Office expenses 2,745 2,745
Bank charges 325 325
Schedule - 3
Directors sitting fees 7,500 7,500
CURRENT ASSETS, LOANS AND ADVANCES
Filing fees 33,770 28,270
Cash and Bank Balances
Royalty/dead rent 757,192 575,240
Cash on Hand 241 241
Legal fees 262,000 262,000
Balance with Scheduled Bank
Interest 7,008 7,008
on current account 200,305 200,305
Miscellaneous expenses 21,885 21,885
200,546 200,546
Total 1,390,738 1,197,776
Loans and Advances
Unsecured, considered good
advances recoverable in cash 4. Contingent liabilities - Nil.
or in kind or for value to be
received 160,619 2,000 5. Previous year figures have been regrouped wherever necessary.

Total 361,165 202,546 Signature to Schedule 1 to 5

As per our report attached.

Schedule - 4
CURRENT LIABILITIES AND For G.P. Kapadia & Co
PROVISIONS Chartered Accountants
Liabilities by the hand of
Due to UltraTech Cement Limited
(The Holding Company) 1,101,840 755,769 ATUL B. DESAI K. C. BIRLA DEEPAK RAZDAN M. R. PRASANNA
Due to Others 171,187 171,187 Partner Director Director Director
Other liabilities 16,270 10,760 Membership No. 30850

Total 1,289,297 937,716 Mumbai , April 18, 2006

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 DAKSHIN CEMENTS LIMITED
Balance Sheet abstract and Company’s General Business Profile
1 Registration Details
Registration No. 0 1 - 0 1 6 0 0 2 State Code 0 1
Balance Sheet Date 3 1 - 0 3 - 0 6
2 Capital raised during the year (Amount in Rs. Thousands)
Public Issue Rights Issue
N I L N I L
Bonus Issue Private Placement
N I L N I L
3 Position of Mobilisation and Development of funds (Amount in Rs. Thousands)
Total Liabilities Total Assets
1 7 8 9 1 7 8 9
Sources of Funds :
Paid up Capital Reserves & Surplus
5 0 0 N I L
Secured Loans Unsecured Loans
N I L N I L
Application of Funds :
Net Fixed Assets Investments
1 3 9 1 N I L
Net Current Assets Miscellaneous Expenditure
( 9 2 8 ) 3 7
Accumulated Losses
N I L
4 Performance of the Company (Amount in Rs. Thousands)
Turnover (including other income) Total Expenditure
N I L N I L
+ - Profit / (Loss) before Tax + - Profit / (Loss) after Tax
N I L N I L
Please Tick Appropriate box + for Profit, - for loss
Earnings per Share (Rs.) Dividend Rate (%)
N A N A
5 Generic Names of Three Principal Products/Services of the Company (as per monetary terms)

No Activities during the year

K. C. BIRLA DEEPAK RAZDAN M. R. PRASANNA

Director Director Director
Mumbai, April 18, 2006

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 UltraTech Ceylinco (Pvt) Ltd
The Directors of UltraTech Ceylinco (Pvt) Ltd have pleasure in DIRECTORATE
presenting to the members their report for the 15 month period
ended 31st March 2006. The names of the Directors of the Company as at date are given
under Corporate Information.
PRINCIPAL ACTIVITY
There have been no change in the directorate during the year
The principal activity of the Company is carrying on business of under review.
importers, exporters, distributors warehousemen, wholesalers,
retailers and dealers of cement and to establish storage terminals RETIREMENT BY ROTATION AND/OR OTHERWISE
and other facilities for the bagging and distribution of bulk cement.
By virtue of provisions contained in the Articles of Association of
MESSAGE FROM THE CEO the Company, the Directors are not subject to Retirement by
Rotation.
The performance during the 15 month period of our JV was the
best ever since the inception. CHANGE IN FINANCIAL YEAR
The Company distributed 0.539 MMT of cement against 0.470 The Board decided to change the financial year of the Company
MMT. This has given 16% growth as against market growth of from 31st March in order to be in line with the financial year of
12% which has resulted in increase in market share to 13%. the parent company, viz. UltraTech Cement Limited and as such
the accounts contained herein reflect the financial status of the
The sales and other income for the financial year under review Company for the 15 month period ended 31st March 2006.
were Rs.4346 M as against Rs.3209 M during the same period last
year which has given us a growth of 35%. The profit after providing DIVIDEND
tax for the period was Rs.242 M as against the profit of Rs.224M.
The Directors do recommend a first and final dividend of 20% to
The performance for the year was much better than previous year, the ordinary shareholders of the Company registered as on the date
mainly due to increase in the quantity sold, better price realization of the Annual General Meeting.
and continuous efforts in the cost reduction activities and better
productivity. DIRECTORS’ INTERESTS IN CONTRACTS
Looking in to the present scenario and the efforts announced by The Directors of the Company have no direct and indirect interest
the government to invite more FDI, infra structure facilities such in any contract or proposed contract of the Company, except those
as power and road, we are expecting performance even better than specified in Note 20 to the financial statement, which have been
last year. GDP expected to remain 6%. disclosed and declared at meetings of the Directors in accordance
with section 203 of the Companies Act No.17 of 1982.
We have taken enormous efforts in the brand awareness after
changing our brand name last year and the coming year, special AUDITORS
steps will be taken for brand building exercises.
The Accounts for the year under review have been audited by
PROFIT & LOSS ACCOUNT Messrs KPMG Ford, Rhodes, Thornton & Company, Chartered
15 months ended Year ended Accountants, who retire and being eligible offer themselves for
31.03.2006 31.12.2004 re-appointment for the year 2006/2007.
Note SLR SLR
Turnover 1 4,349,045,969 2,497,995,777 The Directors do recommend their re-appointment.
Cost of Sales (3,842,782,316) (2,199,030,298)
Gross Profit 506,263,653 298,965,479
Other Operating Income 2 4,894,446 3,941,188
BY ORDER OF THE BOARD
Administrative expenses (57,094,226) (37,377,999)
Distribution cost (91,140,962) (37,097,940)
Other operating expenses 3 (63,637,579) — Sgd.(Authorised Signatory)
Profit from Operations 4 299,285,332 228,430,728 INTERNATIONAL CONSULTANCY AND CORPORATE
Financing cost 5 31,700,606 (44,066,582) SERVICES (PVT) LTD
SECRETARIES FOR ULTRATECH CEYLINCO (PVT) LTD
Profit before Taxation 330,985,938 184,364,146
Income tax expense 6 (88,195,671) (11,048,273) 22nd May 2006.
Profit for the year 7 242,790,267 173,315,873
Colombo
Earnings per share 3.88 3.47

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 UltraTech Ceylinco (Pvt) Ltd
REPORT OF THE AUDITORS
TO THE MEMBERS OF ULTRATECH CYCLINCO (PVT)
LTD
We have audited the Balance Sheet of Ultratech Ceylinco (Pvt)
Ltd, as at 31st March, 2006 and the related Statements of Income,
Changes in Equity and Cash Flow for the period then ended,
together with the Accounting Policies and Notes thereon.
Respective Responsibilities of Directors and Auditors
The Directors are responsible for preparing and presenting these
financial statements in accordance with the Sri Lanka Accounting
Standards. Our responsibility is to express an opinion on these
financial statements, based on our audit.
Basis of Opinion
We conducted our audit in accordance with the Sri Lanka Auditing
Standards, which require that we plan and perform the audit to
obtain reasonable assurance about whether the said financial
statements are free of material misstatements. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the said financial statements, assessing the accounting
principles used and significant estimates made by the Directors,
evaluating the overall presentation of the financial statements, and
determining whether the said financial statements are prepared
and presented in accordance with the Sri Lanka Accounting
Standards. We have obtained all the information and explanations
which to the best of our knowledge and belief were necessary for
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the purposes of our audit. We therefore believe that our audit
provides a reasonable basis for our opinion.
Opinion
In our opinion, so far as appears from our examination, the
Company maintained proper books of account for the period ended
at 31st March, 2006 and to the best of our information and according
to the explanations given to us, the said Balance Sheet and related
Statements of Income, Changes in Equity and Cash Flow and the
Accounting Policies and Notes thereto, which are in agreement
with the said books and have been prepared and presented in
accordance with the Sri Lanka Accounting Standards, provide the
information required by the Companies Act No.17 of 1982 and
give a true and fair view of the Company’s state of affairs as at 31st
March, 2006, and of its profit and cash flows for the period then
ended.
Directors’ Interests in Contracts with the Company
According to the information made available to us, the Directors
of the Company were not directly or indirectly interested in any
contracts with the Company during the period ended 31st March,
2006, other than those disclosed in Note 20 to these financial
statements.
For KPMG FORD, RHODES, THORNTON & CO.,
Chartered Accounts
Colombo, 10th April, 2006
 UltraTech Ceylinco (Pvt) Ltd
Balance Sheet as at 31st March, 2006

31-03-2006 31-12-2004

ASSETS Note SLR INR SLR INR

Non-current assets

Leasehold land 8 29,837,744 12,936,934 31,229,484 13,059,626

Property, plant and equipment 9 480,312,872 208,252,199 509,864,608 213,216,496

510,150,616 221,189,133 541,094,092 226,276,122
Current assets

Inventories 10 217,476,820 94,292,759 99,439,959 41,584,058

Trade receivables 11 178,863,243 77,550,834 94,953,140 39,707,749

Other receivables 12 34,837,876 15,104,872 41,760,447 17,463,491

Prepayments and advances 1,625,318 704,699 4,642,337 1,941,344

Cash and cash equivalents 13 176,768,213 76,642,479 111,721,220 46,719,868

609,571,470 264,295,643 352,517,103 147,416,511
TOTAL ASSETS 1,119,722,086 485,484,776 893,611,195 373,692,633

EQUITY AND LIABILITIES

Equity

Share capital 14 500,000,000 216,788,068 500,000,000 209,091,289

Accumulated profit 48,832,190 21,172,472 (93,958,077) (39,291,560)

548,832,190 237,960,540 406,041,923 169,799,729
Non-current liabilities

Retirement benefit obligations 15 2,536,750 1,099,874 1,970,700 824,112

Deferred Taxation 16 13,543,162 5,871,992 — —

16,079,912 6,971,866 1,970,700 824,112

Current liabilities

Trade payable 17 429,393,891 186,174,944 418,829,981 175,147,401

Other payables 18 41,277,942 17,897,131 41,596,004 17,394,724

Income tax payable 47,232,196 20,478,753 — —

Accrued expenses 12,529,725 5,432,590 2,963,216 1,239,095

Bank overdraft 24,376,230 10,568,952 22,209,371 9,287,572

554,809,984 240,552,370 485,598,572 203,068,792

TOTAL EQUITY AND LIABILITIES 1,119,722,086 485,484,776 893,611,195 373,692,633

The figures in INR is converted at the rate of: 2.3064=102.9/44.615 2.3913=104.5/43.7

The Directors are responsible for the preparation and presentation of these Financial Statement.
The Accounting Policies and Notes annexed form an integral part of the Financial Statement

Signed for and on behalf of the Board,

D. J. L. B. Kotelawala

}
S. Misra

A. R. Gunawardena Directors

K. C. Birla

D. Razdan

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 UltraTech Ceylinco (Pvt) Ltd
Income Statement for the period ended 31st March, 2006

15 months ended Year ended

31.03.2006 31.12.2004

Note SLR INR SLR INR

Turnover 1 4,349,045,969 1,897,216,356 2,497,995,777 1,105,992,994

Cost of sales (3,842,782,316) (1,676,365,234) (2,199,030,298) (973,625,387)

Gross profit 506,263,653 220,851,122 298,965,479 132,367,608

Other operating income 2 4,894,446 2,135,140 3,941,188 1,744,969

Administrative expenses (57,094,226) (24,906,635) (37,377,999) (16,549,189)

Distribution cost (91,140,962) (39,759,093) (37,097,940) (16,425,193)

Other operating expenses 3 (63,637,579) (27,761,090) — —

Profit from operations 4 299,285,332 130,559,444 228,430,728 101,138,195

Financing income /(cost) 5 31,700,606 13,182,868 (44,066,582) (23,769,002)

Profit before taxation 330,985,938 143,742,312 184,364,146 77,369,193

Income tax expense 6 (88,195,671) (38,474,247) (11,048,273) (4,891,647)

Profit for the period 242,790,267 105,268,065 173,315,873 72,477,546

Earnings per share - Annualised (Rs) 7 3.88 3.47

The figures in INR is converted at the rate of: 2.29233 = ((99.65+102.9)/2)/((43.745+44.615)/2) 2.2586=((96.7+104.5)/2)/((45.38+43.7)/2)

Statement of Changes in Equity

for the Period Ended 31st March, 2006
Share Capital Accumulated Profit Total
SLR SLR SLR
Balance as at 1st January 2004 500,000,000 (167,273,950) 332,726,050

Profit for the year — 173,315,873 173,315,873

Dividend paid — (100,000,000) (100,000,000)

Balance as at 31st December 2004 500,000,000 (93,958,077) 406,041,923

Profit for the period — 242,790,267 242,790,267

Dividend paid — (100,000,000) (100,000,000)

Balance as at 31st March 2006 500,000,000 48,832,190 548,832,190

(107)
 UltraTech Ceylinco (Pvt) Ltd
Cash Flow Statement for the period ended 31st March, 2006
15 months ended Year ended
31-03-2006 31-12-2004

SLR INR SLR INR

Cash flows from operating activities

Profit from operations 299,285,332 130,559,445 228,430,728 101,138,195

Adjustments for :

Depreciation on property, plant and equipment 32,594,483 14,218,931 26,196,089 11,598,375

Amortisation of leasehold land 1,391,740 607,129 1,113,392 492,957

Provision for retiring gratuity 781,925 341,105 678,725 300,507

Exchange Difference — 1,210,567 — (2,199,267)

Provision for bad and doubtful debts — — 6,115,476 2,707,640

(Gain)/loss on translation of foreign currency 27,542,516 12,015,075 — —

(Gain)/loss on disposal of property, plant and equipment (122,793) (53,567) (334,915) (148,284)
Operating profit before working capital changes 361,473,203 158,898,685 262,199,495 113,890,123

(Increase)/decrease in inventories (118,036,861) (51,492,089) 28,283,367 12,522,521

(Increase)/decrease in trade and other receivables. (73,970,513) (32,268,702) 249,937,195 110,660,230

Increase/(decrease) in trade and other payables 33,355,519 14,550,923 (256,645,753) (113,630,458)

Cash generated from operations 202,821,347 89,688,817 283,774,304 123,442,416

Interest paid (1,727,148) (753,446) (53,694,177) (23,773,212)

Dividends paid (100,000,000) (43,623,737) (100,000,000) (44,275,215)

Income tax paid (40,963,475) (17,869,798) (11,048,273) (4,891,647)

Retiring gratuity paid (215,875) (94,173) — —

Net cash flow from operating activities 59,914,850 27,347,663 119,031,854 50,502,342

Cash flows from investing activities

Purchase and construction of property, plant and equipment (3,567,450) (1,556,255) (1,140,075) (504,771)

Interest received 5,885,238 2,567,361 9,627,595 4,262,638

Proceeds from sale of property, plant and equipment 647,496 282,462 844,022 373,693
Net cash flow from investing activities 2,965,284 1,293,568 9,331,542 4,131,560
Net Increase/(Decrease) in Cash & Cash Equivalents 62,880,134 28,641,231 128,363,396 54,633,902

Cash and Cash Equivalents at the beginning of the year 89,511,849 37,432,296 (38,851,547) (17,201,606)
Cash and Cash Equivalents at the end of the year 152,391,983 66,073,527 89,511,849 37,432,296

Cash and Cash Equivalents as at year end

Cash in hand 2,126,822 922,139 2,250,214 941,000

Cash at bank 174,641,391 75,720,340 109,471,006 45,778,868

Bank overdraft (24,376,230) (10,568,952) (22,209,371) (9,287,572)

152,391,983 66,073,527 89,511,849 37,432,296

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 UltraTech Ceylinco (Pvt) Ltd
31.03.2006 31.12.2004
Notes to the Accounts for the period ended SLR INR SLR INR
8 LEASEHOLD LAND
31st March, 2006 Cost 38,946,767 16,886,389 38,946,767 16,286,859

15 months ended Year ended Cumulative amortisation

31.03.2006 31.12.2004 As at the beginning of the year 7,717,283 3,346,030 6,603,891 2,761,632
SLR INR SLR INR Charge for the year 1,391,740 603,425 1,113,392 465,601
1 TURNOVER
Turnover - Cement 4,349,045,969 1,897,216,356 2,497,995,777 1,105,992,994 Balance at the end of the year 9,109,023 3,949,455 7,717,283 3,227,233
Written down value 29,837,744 12,936,934 31,229,484 13,059,626
2 OTHER OPERATING INCOME
Income from storage and handling 4,892,772 2,134,410 3,580,268 1,585,171 Leasehold land is amortised over the lease period of 30 years.
Scrap sales 1,000 436 2,130 943
Gain on disposals of fixed assets — — 334,915 148,284 9 PROPERTY, PLANT AND EQUIPMENT - Refer next page
Lab service income 674 294 23,875 10,571
4,894,446 2,135,140 3,941,188 1,744,969 10 INVENTORIES
Naked cement 101,389,289 43,959,976 74,468,382 31,141,380
3 OTHER OPERATING EXPENSES Bags 1,414,783 613,416 2,480,974 1,037,500
Loss on disposal of property,
plant & equipment 122,793 53,567 — — Stores and spares 13,599,995 5,896,633 11,143,741 4,660,118
NSL Assessment 30,777,179 13,426,155 — — Goods-in-transit 101,072,753 43,822,734 11,346,862 4,745,060
Promotion expense 32,737,607 14,281,368 — —
217,476,820 94,292,759 99,439,959 41,584,058
63,637,579 27,761,090 — —
11 TRADE RECEIVABLES
4 PROFIT FROM OPERATIONS Trade receivables 212,433,856 92,106,250 128,523,755 53,746,395
Profit from operations is stated after charging all expenses including the following Provision for bad and
Directors’ emoluments 1,615,883 704,909 1,540,712 682,154 doubtful debts (33,570,613) (14,555,416) (33,570,615) (14,038,646)
Auditors’ remuneration 340,000 148,321 265,000 117,329
Depreciation and amortisation of 178,863,243 77,550,834 94,953,140 39,707,749
leasehold land 33,986,222 14,826,060 27,309,481 12,091,331
Provision for bad and doubtful debts — — 6,115,476 2,707,640 12 OTHER RECEIVABLES
Donation 3,075,000 1,341,430 — — Receivable from AES 14,592,200 6,326,830 14,592,200 6,102,204
Staff cost Note 2.1 24,960,565 10,888,731 23,592,012 10,445,414 GST recoverable — — 3,948,807 1,651,322
2.1 Staff cost Larsen and Toubro Ltd — — 13,876,834 5,803,050
— Salaries and related costs 21,003,690 9,162,594 20,763,721 9,193,182 VAT recoverable 5,718,088 2,479,227 — —
— Defined contribution plan
cost-EPF and ETF 3,174,950 1,385,032 2,149,566 951,725 Economic service charge recoverable 14,401,724 6,244,244 8,162,404 3,413,375
— Defined benefit plan Others 125,864 54,571 1,180,202 493,540
cost-Retiring gratuity 781,925 341,105 678,725 300,507
34,837,876 15,104,872 41,760,447 17,463,491
24,960,565 10,888,731 23,592,012 10,445,414
13 CASH AND CASH EQUIVALENTS
5 FINANCING INCOME /(COST) Cash in hand 2,126,822 922,139 2,250,214 941,000
Interest on overdrafts and Cash at bank 174,641,391 75,720,340 109,471,006 45,778,868
temporary facilities (1,727,148) (753,446) (23,736) (10,509)
Interest on loans — — (13,911,111) (6,159,174) 176,768,213 76,642,479 111,721,220 46,719,868
Interest income 5,885,238 2,567,361 9,627,595 4,262,638
Gain/(loss) on translation of 14 SHARE CAPITAL
foreign currency 27,542,516 12,015,073 (39,759,330) (21,861,957) Authorised
31,700,606 13,828,988 (44,066,582) (23,769,002) 100,000,000 Ordinary Shares
of SLR 10/- each 1,000,000,000 433,576,136 1,000,000,000 418,182,579
6 INCOME TAX EXPENSE
Income tax on profits 74,466,343 32,485,001 11,048,273 4,891,647 Issued and fully paid
Transferred to / (from) deferred tax 13,543,162 5,908,033 — — 50,000,000 Ordinary shares
Social Responsibility Levy 186,166 81,213 — — of SLR 10/- each 500,000,000 216,788,068 500,000,000 209,091,289
88,195,671 38,474,247 11,048,273 4,891,647 15 RETIREMENT BENEFIT OBLIGATIONS
The Company is liable to income tax at the corporate rate of 32.5%. Provision for retiring gratuity
Income tax on business income As at the beginning of the year 1,970,700 854,448 1,291,975 523,605
Profit before tax 330,985,938 144,388,434 184,364,146 81,627,622 Provision for the year 781,925 339,024 678,725 300,507
Disallowable expenses 38,681,048 16,874,118 28,133,630 12,456,224
Allowable expenses (17,163,590) (7,487,399) (3,299,709) (1,460,953) 2,752,625 1,193,472 1,970,700 824,112
Payments made during the year (215,875) (93,598) — —
Total statutory income 352,503,396 153,775,153 209,198,067 92,622,893
Tax loss brought forward from Balance at the end of the year 2,536,750 1,099,874 1,970,700 824,112
previous years claimed (123,376,188) (53,821,303) (73,219,323) (32,418,012)
16 DEFERRED TAX LIABILITIES
Assessable income 229,127,208 99,953,850 135,978,744 60,204,881 As at the beginning of the year — — — —
Allowable Investment tax allowance — — (101,984,058) (45,153,661) Provision for the year 13,543,162 5,871,992 — —
Taxable income 229,127,208 99,953,850 33,994,686 15,051,220 Balance at the end of the year 13,543,162 5,871,992 — —
Tax liability @ 32.5% 74,466,343 32,485,001 11,048,273 4,891,647 17 TRADE PAYABLES
Income tax on profit 74,466,343 32,485,001 11,048,273 4,891,647 UltraTech Cement Ltd 426,341,744 184,851,606 410,653,650 171,728,202
Other trade payables 3,052,147 1,323,338 8,176,331 3,419,199
As per the provisions of Inland Revenue (Amendment) Act No.12 of 2004, with effect from the year
of assessment 2004/2005, the brought forward tax loss (other than any capital loss) which could be 429,393,891 186,174,944 418,829,981 175,147,401
claimed in arriving at the Assessable Income is restricted to 35% of the total statutory income for the 18 OTHER PAYABLES
year.
Retention money from contractors 10,409,883 4,513,477 10,671,546 4,462,655
The tax loss of the Company brought forward from the year of assessment 2004/2005 was SLR Value added tax payable — — 13,280,066 5,553,492
546,634,533 and the Company claimed SLR 123,376,188 during the year of assessment 2005/2006.
The tax loss carried forward for the year of assessment 2006/2007 is SLR 423,258,345. Debtors deposit 6,252,393 2,710,888 4,257,388 1,780,365
Withholding tax payable 177,929 77,146 76,107 31,827
7 EARNINGS PER SHARE
Economic service charge payable 8,147,719 3,532,657 4,572,876 1,912,297
The calculation of the basic earnings per ordinary share is based on the profits attributable to the Due to Larsen and Toubro
ordinary shareholders divided by weighted average number of shares in issue during the year.
on account of AES 9,376,525 4,065,437 — —
31.03.2006 31.12.2004 Others 6,913,493 2,997,526 8,738,021 3,654,088
Net profit attributable to the
ordinary shareholders (Rs.) 242,790,267 105,268,065 173,315,873 72,477,546 41,277,942 17,897,131 41,596,004 17,394,724
Number of ordinary shares in issue 50,000,000 50,000,000 50,000,000 50,000,000
Basic earnings per ordinary share-
Annualised (Rs.) 3.88 1.69 3.47 1.45

(109)
 NOTES TO THE ACCOUNTS

Property, plant and equipment

BUILDING PLANT & OFFICE LAB COMPUTER ELECTRICAL HT POWER FURNITURE MOTOR MOTOR TOTAL
MACHINERY EQUIPMENT EQUIPMENT EQUIPMENTINSTALLATION LINE & FITTING VEHICLE CYCLES

Cost
Balance as at 01-01-05 37,574,084 489,473,995 2,472,008 2,039,822 4,604,506 71,748,890 1,167,013 1,459,706 1,782,971 1,405,162 613,728,157

Additions during the period — — 409,511 — 1,257,010 — — 41,513 — 1,859,416 3,567,450

Disposals during the period — — (161,473) — (721,359) — — — — (989,600) (1,872,432)

Balance as at 31-03-06 37,574,084 489,473,995 2,720,046 2,039,822 5,140,157 71,748,890 1,167,013 1,501,219 1,782,971 2,274,978 615,423,175

Depreciation
Balance as at 01-01-05 5,907,107 78,346,914 1,686,144 1,515,460 2,488,042 11,482,240 233,403 945,857 625,224 633,158 103,863,549
Charge for the period 1,878,704 24,473,700 484,511 380,521 926,242 3,587,445 58,351 282,881 318,388 203,740 32,594,483
Disposals during the period — — (160,795) — (630,368) — — — — (556,566) (1,347,729)

Balance as at 31-03-06 7,785,811 102,820,614 2,009,860 1,895,981 2,783,916 15,069,685 291,754 1,228,738 943,612 280,332 135,110,303

Written down value

UltraTech Ceylinco (Pvt) Ltd

As at 31-03-06 29,788,273 386,653,381 710,186 143,841 2,356,241 56,679,205 875,259 272,481 839,359 1,994,646 480,312,872

As at 01-01-05 31,666,977 411,127,081 785,864 524,362 2,116,464 60,266,650 933,610 513,849 1,157,747 772,004 509,864,608

(110)
DESCRIPTION COST ADDITIONS/DEDUCTION COST DEPRECIATION W.D.V
AS AT 1-1-2005 FOR THE PERIOD AS AT 31-03-2006 AS AT 1-1-2005 Additions Disposals AS AT 31-03-2006 AS AT 31-03-2006 AS AT 31-12-2004
SLR INR SLR INR SLR INR SLR INR SLR INR SLR INR Ex-dif (INR) SLR INR SLR INR SLR INR
BUILDING 37,574,084 15,712,827 — 578,399 37,574,084 16,291,226 5,907,107 2,470,249 1,878,704 819,561 — — 85,932 7,785,811 3,375,742 29,788,273 12,915,484 31,666,977 13,242,578
PLANT &
MACHINERY 489,473,995 204,689,497 — 7,534,746 489,473,995 212,224,243 78,346,914 32,763,315 24,473,700 10,676,342 — — 1,140,908 102,820,614 44,580,565 386,653,381 167,643,679 411,127,081 171,926,183
OFFICE
EQUIPMENTS 2,472,008 1,033,751 248,038 145,596 2,720,046 1,179,347 1,686,144 705,116 484,511 211,362 (160,795) (70,145) 25,094 2,009,860 871,427 710,186 307,920 785,864 328,635
LAB EQUIPMENTS 2,039,822 853,018 — 31,400 2,039,822 884,418 1,515,460 633,739 380,521 165,997 — — 22,316 1,895,981 822,052 143,841 62,366 524,362 219,279
COMPUTERS 4,604,506 1,925,524 535,651 303,125 5,140,157 2,228,649 2,488,042 1,040,456 926,242 404,061 (630,368) (274,990) 37,512 2,783,916 1,207,040 2,356,241 1,021,610 2,116,464 885,068
ELECTRICAL
INSTALLATION 71,748,890 30,004,136 — 1,104,471 71,748,890 31,108,606 11,482,240 4,801,673 3,587,445 1,564,978 — — 167,206 15,069,685 6,533,856 56,679,205 24,574,751 60,266,650 25,202,463
H T POWER LINE 1,167,013 488,025 — 17,964 1,167,013 505,989 233,403 97,605 58,351 25,455 — — 3,438 291,754 126,498 875,259 379,491 933,610 390,419
FURNITURE &
FITTINGS 1,459,706 610,424 41,513 40,469 1,501,219 650,893 945,857 395,541 282,881 123,403 — — 13,807 1,228,738 532,751 272,481 118,141 513,849 214,883
MOTOR VEHICLES 1,782,971 745,607 — 27,446 1,782,971 773,054 625,224 261,458 318,388 138,893 — — 8,777 943,612 409,128 839,359 363,926 1,157,747 484,150
MOTOR CYCLE 1,405,162 587,614 869,816 398,762 2,274,978 986,376 633,158 264,776 203,740 88,879 (556,566) (242,795) 10,686 280,332 121,545 1,994,646 864,831 772,004 322,839
TOTAL 613,728,157 256,650,423 1,695,018 10,182,379 615,423,175 266,832,802 103,863,549 43,433,927 32,594,483 14,218,931 (1,347,729) (587,930) 1,515,675 135,110,303 58,580,603 480,312,872 208,252,199 509,864,608 213,216,496
 UltraTech Ceylinco (Pvt) Ltd
19 Related party transactions
The Company’s transactions with its related Companies are as follows.
31-03-2006 31-12-2004
SLR INR SLR INR
UltraTech Cement Ltd
— Import of cement 2,190,341,157 955,508,656 776,381,327 343,744,500
— Import of spares for machinery 3,753,121 1,637,252 494,732 219,044
Amount payable as at the balance sheet date 426,341,744 184,851,606 410,653,650 171,728,202
Larsen & Toubro Ltd ( until 28th June 2004)
— Import of cement — — 861,034,377 381,224,819
— Import of spares for machinery — — 652,348 288,828
Ceylinco Developers (Pvt) Ltd
— Sale of Cement — — 558,000 247,056
— Amount Receivable as at the Balance Sheet date — — 232,398 97,185
Ceylinco Homes International Ltd.
— Sale of Cement 3,038,791 1,325,634 3,481,250 1,541,331
— Amount Receivable as at the Balance Sheet date 249,790 108,303 326,041 136,345
International Consultancy & Corporate Services (Pvt) Ltd
— Secretarial services 323,437 141,095 246,040 108,935
Ceylinco Insurance Company Ltd
— Insurance Services 15,056,015 6,567,996 6,787,344 3,005,111
— Commission on Sales 987,895 430,957 263,880 116,833
— Professional services — — 25,000 11,069
— Amount payable as at the balance sheet date 43,677 18,937 511,387 213,853
Ceylinco CISCO Security Transport & Allied Services (Pvt) Ltd
— Cash Transportation services 431,250 188,127 273,700 121,181
Ceylinco Internet Services Ltd
— E-Mail & Internet Services 15,812 6,898 12,885 5,705

20 DIRECTORS’ INTEREST IN CONTRACTS

No director of the Company is directly or indirectly interested in any contract with the Company other than the following:

Mr. Ajith Gunawardena a Director of the company is also a director of following companies.

Ceylinco Developers (Pvt) Ltd

Ceylinco International Trading Company Ltd.

Mr.J.L.B.Kothalawala and Mr.A.R.Gunawardena are Directors of the Company are also Directors of the following Companies.

Ceylinco Insurance Company Ltd

Ceylinco Developers (Pvt) Ltd

Ceylinco Homes International Ltd

International Consultancy & Corporate Services (Pvt) Ltd

Mr.J.L.B.Kothalawala a Director of the Company is also a Director of the following Company

Ceylinco CISCO Securities Transport & Allied Services (Pvt) Ltd

Mr Saurabh Misra, Mr Kailash Chand Birla, Mr.M.R.Prasanna and Mr Deepak Razdan are directors of the Company.

Mr Kiran Redkar is a alternative director for Mr Deepak Razdan.

21 CAPITAL COMMITMENTS

There were no capital commitments as at the balance sheet date which requires disclosure in the accounts.

22 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

No circumstances have arisen since the balance sheet date which would require adjustments to or disclosure in the financial statements.

23 CONTINGENT LIABILITIES
There are no contingent liabilities as at the balance sheet date which would require adjustments or disclosure in the accounts

(111)
 UltraTech Ceylinco (Pvt) Ltd
ACCOUNTING POLICIES The estimated useful lives are as follows.
1. CORPORATE INFORMATION ASSET No. Of Years
• Domicile and Legal Form Building 25
Plant and Machinery 25
Larsen and Toubro Ceylinco (Pvt) Ltd was incorporated on 29th August
1997 as a Private limited liability Company and domiciled in Sri Lanka. Lab Equipment 06
Consequence to the change in the major shareholder of the Electronic Installation 25
Company, the Company was renamed as UltraTech Ceylinco (Pvt) Ltd Office Equipment 06
on 11 March 2005. Motor Cars 07
• Principal Business Activities Motor Cycles 10
HT Power line 25
The Company imports naked cement from India and markets it in Sri
Lanka in 50kg bags and in bulk form. Computers 06
Furniture & Fittings 06
• The Name of the Parent Enterprise and The Ultimate Parent Enterprise
2.2 Inventories
The shareholding of the Company at the Balance Sheet date is as follows.
Inventories are stated at the lower of cost and net realisable value. Net
UltraTech Cement Limited 80%
realisable value is the estimated selling price in the ordinary course of
Ceylinco Insurance Company Ltd 18%
business, less the estimated costs and selling expenses.
Ceylinco International Trading Ltd 2%
The cost of inventory is based on the FIFO cost price principle and
Accordingly, UltraTech Cement Ltd incorporated in India is the Ultimate includes expenditure incurred in acquiring the inventories and bringing
Parent Company. them to their existing location and condition.
• Number of Employees 2.3 Trade and Other Receivable
Number of employees as at the end of the period-62 (2004 — 58) Trade and other receivable are stated at the amounts estimated to be
1.1 Statement of Compliance realised. Provisions have been made in the accounts where necessary for
bad and doubtful debts.
The financial statements have been prepared in accordance with the
2.4 Cash and Cash Equivalents
accounting standards issued by the Institute of Chartered Accountant of
Sri Lanka (ICASL), and the requirements of the Companies Act No. 17 Cash and cash equivalents comprise cash balance and short-term highly
of 1982. liquid investments that are readily convertible to known amounts of cash.

1.2 Basis of Preparation For the purpose of Statement of Cash Flow, cash and cash equivalents
are presented net of bank overdraft.
The financial statements are presented in Sri Lankan Rupees and prepared
3. LIABILITIES AND PROVISIONS
on the historical cost basis. The Accounting Policies are consistent with
those used in the previous year. All known liabilities have been accounted in preparing the financial statements.
1.3 Foreign Currency Transactions 3.1 Classification of Liabilities

Transactions in foreign currencies are translated to rupees at the foreign
exchange ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the balance sheet date
are translated to rupees at the foreign exchange rate ruling at that date.
Foreign exchange differences arising on translation are recognised in the
income statement. Non-monetary assets and liabilities denominated in
foreign currencies, which are stated at historical cost, are translated to
rupees at the foreign exchange rate ruling at the date of the transaction.
2. ASSETS AND BASES OF THEIR VALUATIONS
2.1 Property, Plant & Equipment
2.1.1 Leasehold Property
Lease hold Property located at 81/11/1, New Nuge Road, Peliyagoda has
been sub leased for a period of 30 years from East West Properties Limited
who have taken on lease the said premises for a period of 99 years from
the Urban Development Authority.
The sub-lease rentals and related expenses are amortised on a yearly
basis as per the schedule of the agreement
2.1.2 Owned Assets
Items of Property, Plant and Equipment are stated at cost less accumulated
depreciation. Where an item of Property, Plant and Equipment comprises
major components having different useful lives, they are accounted for
as separate items of Property, Plant and Equipment.
2.1.3 Subsequent Expenditure
Expenditure incurred to replace a component of an item of Property,
Plant and Equipment that is accounted for separately, is capitalised with
the carrying amount of the component being written off. Other
subsequent expenditure is capitalised only when it increases the future
economic benefits embodied in the item of Property, Plant and
Equipment. All other expenditure is recognised in the income statement
as an expense as incurred.
2.1.4 Depreciation
Depreciation is charged on a straight-line basis over the estimated useful
lives of the assets. No depreciation is charged in the year of purchase
and full depreciation is charged in the year of disposal.
Liabilities classified as current liabilities on the Balance Sheet date are
those, which fall due for payment on demand within one year from
Balance Sheet date. Non-current liabilities are those balances that fall
due for payment after one year from the Balance Sheet date.
3.2 Retirement Benefit Plans
3.2.1 Defined Benefit Plan
Provisions have been made in the accounts for retiring Gratuity payable
under the Payment of Gratuity Act, No. 12 of 1983 and it is provided
from the first year of service for all employees in conformity with SLAS
16 (Retirement Benefit Costs). However, according to the Act, liability
to an employee arises on completion of five years service. The liability is
not externally funded nor is it actuarially valued.
3.2.2 Defined Contribution Plans
Contributions to Employees Provident Fund and Employees Trust Fund
are recognised as an expense in the Income Statement as incurred.
4. Revenue Recognition
Revenue is generally accounted for on accrual basis and is recognised as follows:
4.1 On sale of goods all significant risks and rewards of ownership have been
transferred to the buyer, which normally occurs on delivery of the goods.
4.2 Interest income on short-term investment is accounted on cash basis.
5. Borrowing Cost
Borrowing costs are recognised as an expense in the year in which they are
incurred, except to the extent where borrowing costs that are directly attributable
to the acquisition, construction or production of a qualifying asset that take a
substantial period of time to get ready for intended use or sale is capitalised as
part of that asset.
6. Taxation
6.1 The liability to taxation has been computed according to the provisions
of the Inland Revenue Act No. 38 of 2000 and amendments thereto.
6.2 Deferred tax is provided using the liability method, providing for timing
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purpose.
7. Cash Flow
The Cash Flow Statement has been prepared using the Indirect method.

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 Prominent Aditya Birla Group Companies / JVs in India
The Aditya Birla Group enjoys a leadership position in all the sectors in which it operates
I UltraTech Cement Limited & its associates
 UltraTech Cement Limited : Cement
Subsidiaries
- Dakshin Cements Limited : Cement
- UltraTech Ceylinco (Pvt) Ltd. : Cement
 Grasim Industries, its other subsidiaries & JVs
Grasim Industries Limited (holding Company) : Viscose Staple Fibre, Cement,
Sponge Iron, Chemicals, Textiles
Fellow Subsidiaries
- Samruddhi Swastik Trading And Investments Limited : Investment
- Shree Digvijay Cement Company Limited : Cement
- Sun God Trading And Investments Limited : Investment
Joint Ventures
- AV Cell Inc., : Pulp
- AV Nackawic Inc., : Pulp
- Idea Cellular Limited : Telecom
II Others
 Aditya Birla Nuvo Limited & its subsidiaries
Aditya Birla Nuvo Limited : Viscose Filament Yarn, Garments,
Carbon Black, Fertilisers, Textiles
(Spun Yarn & Fabrics), Insulator
(Domestic Marketing),
Financial Services
Subsidiaries
- Aditya Birla Telecom Limited : —
- BGFL Corporate Finance Private Limited : Corporate Services
- Birla Global Asset Finance Company Limited : Retail Finance Company
- Birla Insurance Advisory Services Limited : Non-life Insurance Advisory Services
- Birla Sun Life Insurance Company Limited : Life Insurance
- Laxminarayan Investment Limited : Investment
- Madura Garments Exports Limited : Contract manufacturing of
garments
- PSI Data Systems Limited : Software Services
- TransWorks Information Services Limited : Business Process Outsourcing
Joint Ventures
- Birla NGK Insulators Private Limited : Insulators
- Birla Sunlife Asset Management Company Limited : Investment / Mutual Fund
- Birla Sunlife Distribution Company Limited : Investment Advisory
- Birla Sunlife Trustee Company Limited : Trustee of Birla Mutual Fund
- Idea Cellular Limited : Telecom
 Hindalco Industries Limited & its subsidiaries
Hindalco Industries Limited : Aluminium, Copper
Subsidiaries
- Indian Aluminium Company Limited : Aluminium Foil
- Bihar Caustic And Chemicals Limited : Caustic Soda, Liquid Chlorine,
INFOMEDIA INDIA LIMITED

Hydrochloric Acid
 Essel Mining & Industries Limited : Iron and Manganese Ore Mining,
Noble Ferro Alloys, Nitrogen
production
 TANFAC Industries Limited : Fluorine Products