ultratech annual report07

8/8/2019 UltraTech Annual Report07

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Mr. G. D. Birla and Mr. Aditya Birla, our founding fathers.

We live by their values.

Integrity, Commitment, Passion, Seamlessness and Speed



U l t r a Te c h Ce m e n t L im i t e d

BOARD OF DIRECTORS

Mr. Kumar Mangalam Birla

Chairman

Mrs. Rajashree Birla

Mr. R. C. Bhargava

Mr. G. M. Dave

Mr. Y. M. Deosthalee

Mr. N. J. Jhaveri

Dr. S. Misra

Mr. V. T. Moorthy

Mr. J. P. Nayak

Mr. S. Rajgopal

Mr. D. D. Rathi

Mr. S. Misra

Managing Director

Chief Financial Officer

Mr. K. C. Birla

Company Secretary

Mr. S. K. Chatterjee

Executives

Mr. O. P. Puranmalka Group Executive President &

Chief Marketing Officer

Mr. S. K. Maheshwari Group Executive President &

Chief Manufacturing Officer

Mr. V. Shukla Chief People Officer

Unit Heads

Mr. K. Y. P. Kulkarni Kovaya & Jafrabad (Gujarat)

Mr. S. Kumar Hirmi (Chhattisgarh)

Mr. C. S. Reddy Tadipatri (Andhra Pradesh)

Mr. Birendra Singh Awarpur (Maharashtra)

Corporate Finance Division

Mr. J. Bajaj Joint President (Finance)

Mr. M. B. Agarwal Vice President (F&C)

Auditors

M/s. S. B. Billimoria & Co., Chartered Accountants, Mumbai

M/s. G. P. Kapadia & Co., Chartered Accountants, Mumbai

Solicitors

M/s. Amarchand & Mangaldas & Suresh A. Shroff & Co.,

Advocates & Solicitors, Mumbai



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

Notice ................................................................ 8

Management Discussion and Analysis.............. 16

Report on Corporate Governance ..................... 24

Shareholder Information ................................... 36

Social Report ..................................................... 45

Environment Report .......................................... 47

Directors’ Report to the Shareholders .............. 49

REGISTERED OFFICE: ‘B’ Wing, Ahura Centre, 2nd Floor, Mahakali Caves Road, Andheri (East), Mumbai 400 093

Auditors’ Report ................................................ 59

Balance Sheet .................................................... 64

Profit and Loss Account.................................... 65

Cash Flow Statement ......................................... 66

Schedules ........................................................... 67

Statement Relating to Subsidiary Companies... 85

Consolidated Financial Statements ................... 86

Subsidiary Companies Reports and Accounts .. 103

C O N T E N T S

U l t r a Te c h Ce m e n t – Co m p o s i t e Un i t s



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Dear Fellow Shareholders,

India stands in the midst of an epochal

transformation. Today, we are the fourth

largest economy in the world in terms of

purchasing power parity, the third largest inAsia, and the second largest among the

emerging nations. Growing at a clip of over

9% annually, India is one of the few markets

that have enormous potential for growth and

earnings in practically all sectors. There is

no let up from the Government on the reform

process which has spurred the economy.

These developments at the macro level willhave a positive impact on your Company.

Your Company has posted improved

performance, with net revenues at Rs.4,911

crores, up by 49%, and a net profit of Rs.782

crores reflecting a growth of 240%.

Your Company is augmenting capacities by

an additional 4 million tpa at its Unit in

Andhra Pradesh to cater to the growing

demand in the South India market. With an

eye on the growing Ready Mix Concrete

THE CHAIRMAN’S

LETTER TO

SHAREHOLDERS



4

business, your Company has commenced setting up Ready Mix Concrete plants in various

places in the country.

The Captive Power Plants being set up at your Company’s Units in Andhra Pradesh, Chattisgarh

and Gujarat, are on track. They are expected to go on stream between FY08 and FY09.

The Power Plants will enable us meet the challenge of growing energy costs, besides reducing

your Company’s dependence on the State Grid.

Towards all these projects, a Capex of around Rs. 2,600 crores has been earmarked.

Your Company’s focus continues to be on sustaining Plant performance, improving service

standards and timely commissioning of projects, all of which go a long way in maintaining

the edge.

The Cement sector is on a roll as the housing

and infrastructure sectors, coupled with the

increasing industrial investment continue to

grow. The out look for your Company is

encouraging.

For our success, much credit must go to our people.

The quality of our people, their intellectual and

emotional commitment has been and continues to

be unwavering. I deeply acknowledge their

contribution in perpetuating such a meritocratic

organisation.

“For our success,

much credit must go

to our people.

The quality of our people,

their intellectual and

emotional commitment

has been and continues

to be unwavering.

I deeply acknowledge their

contribution in perpetuating such

a meritocratic organisation”



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The Aditya Birla Group : In Perspective

In line with our vision to be a premium global

conglomerate with a clear focus at each business

level, I am pleased to inform you that our

geographic reach has far expanded. This year has

indeed been a landmark year consequent to major

acquisitions. Today our Group is a US$ 24 billion

corporation with a market cap in excess of US$ 23

billion, anchored by a committed 100,000

workforce belonging to 25 nationalities, representing

20 countries across 5 continents. We are all glued

together by a common set of values – Integrity,

Commitment, Passion, Seamlessness and Speed.

As a Group we are a meritocracy with a sharp focus on people processes. We try and make

space for new ideas and encourage a spirit of experimentation. Champions of good ideas have

every chance to try them out.

Our people systems and our Group’s HR strategy continue to evolve as our Group increasingly

globalises. In this regard, we are continuously innovating to support our business vision with

world-class HR processes and strategies. The Group-wide implementation of Project Poornata

– the PeopleSoft based HR-ERP Programme, in its first year of implementation is already

reckoned as an enabler of strategic people decisions. These on-line people processes enhance

transparency and productivity.

“In line with our vision

to be a premium global

conglomerate with a clear

focus at each business level,

I am pleased to inform you

that our geographic reach

has far expanded......

.....We are all glued together

by a common set of values –

Integrity, Commitment,

Passion, Seamlessness

and Speed.”



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Talent management and strengthening of the talent pool in building leadership across the

Group continues to be a focus area. On the professional front, our people systems are aligned

to foster excellence, empower and enrich people, recognise creativity, innovation and reward

performance. People with a track record, people with a passion to perform are steered on to a

growth trajectory. Our endeavours to identify, develop and push high potential talent, which

was an initiative begun two years ago, will soon be institutionalised. It might interest you to

learn that more than 4,000 of our high caliber management talent have been put through our

Development Assessment Centres and their professional development plans charted out.

Our investments into employee development both through classroom teaching, e-learning,

personal coaching by senior management and mentoring have been scaled up.

Given the intense war for talent, in addition to these HR systems, we have taken a slew of

initiatives to strengthen our employer brand and to improve the quality of life of our employees.

This, we hope, will help us keep the edge.

We have set up a taskforce to define the unique employment proposition that our Group can

and does offer. Our intent is to ensure that these employee value propositions translate in the

day-to-day experiences of our people and enhance their involvement with our Group.

To offer our people a share in the value created by the organisation, we announced the

Employee Stock Option Plan which we expect to roll out in FY08. This would give them an

increasing sense of ownership in our Group.

It is with a great sense of pride that I share with you the fact that our Group has been adjudged

as the Best Employer in India in 2007 and amongst the Top 20 Best Employers in Asia in the



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Hewitt-Economic Times and Wall Street Study of

2007. This is a singular achievement and a great

honour given that the Study encompassed 230

companies in India and over 700 companies in Asia.

This honour is also a reflection of the pride, the

affection and attachment that colleagues all over have

for our Group.

While we cherish this acknowledgement, we realise

that we have to work harder in the people area and

bring in an even sharper focus on employees and

their engagement.

Best regards,

Yours sincerely,

21st April, 2007 Kumar Mangalam Birla

“It is with a great sense

of pride that I share with

you the fact that our

Group has been adjudged as

the Best Employer in India

in 2007 and amongst the

Top 20 Best Employers

in Asia in the

Hewitt-Economic Times

and Wall Street Study

of 2007.”



8

NOT I C E

NOTICE is hereby given that the Seventh Annual General Meeting of UltraTech Cement Limited

will be held at Ravindra Natya Mandir, P. L. Deshpande Maharashtra Kala Academy, Near

Siddhivinayak Temple, Sayani Road, Prabhadevi, Mumbai 400 025 on Friday, 20th July, 2007 at3.30 pm to transact with or without modification(s), as may be permissible, the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2007 and the

Profit & Loss Account for the year ended 31st March, 2007 and the Reports of the Directors’

and Auditors’ thereon.

2. To note, confirm and ratify payment of dividend on equity shares for the year ended

31st March, 2007.

3. To appoint a Director in place of Mr. J. P. Nayak, who retires by rotation and, being

eligible, offers himself for re-appointment.4. To appoint a Director in place of Mr. Y. M. Deosthalee, who retires by rotation and, being

eligible, offers himself for re-appointment.

5. To appoint a Director in place of Mr. Kumar Mangalam Birla, who retires by rotation and,

being eligible, offers himself for re-appointment.

6. To consider and, if thought fit, to pass, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 224 and other applicable

provisions, if any, of the Companies Act, 1956, M/s. G. P. Kapadia & Co., Chartered

Accountants, Mumbai be and are hereby re-appointed as Joint Statutory Auditor of the

Company, and M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai be and are

hereby appointed, as the other Joint Statutory Auditor of the Company in place of

M/s. S. B. Billimoria & Co., Chartered Accountants, Mumbai who have intimated to the

Company their inability to be re-appointed as Joint Statutory Auditors of the Company,

both to hold office from the conclusion of the Seventh Annual General Meeting until the

conclusion of the next Annual General Meeting at such remuneration to each of them, plus

service tax as applicable and reimbursement of out-of-pocket expenses in connection with

the audit as the Board of Directors may fix in this behalf.”

SPECIAL BUSINESS:



provisions, if any, of the Companies Act, 1956 (the “Act”), M/s. Haribhakti & Co., Chartered

Accountants, Mumbai, be and are hereby re-appointed as the Branch Auditors of the

Company, to audit the Accounts in respect of the Company’s Units at Jafrabad and Magdala

in Gujarat and Ratnagiri in Maharashtra, to hold office from the conclusion of the Seventh

Annual General Meeting until the conclusion of the next Annual General Meeting of the

Company at such remuneration, plus service tax as applicable and reimbursement of



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out-of-pocket expenses in connection with the audit as the Board of Directors may fix in

this behalf.

RESOLVED FURTHER THAT the Board be and is hereby authorised to appoint Branch

Auditors of any other Branch / Unit of the Company, which may be opened / acquired

hereafter, in India or abroad, in consultation with the Company’s Statutory Auditors, any

person(s) qualified to act as Branch Auditor within the provisions of Section 228 of the

Act and to fix their remuneration.”



provisions, if any, of the Companies Act, 1956 (the “Act”), Mr. S. Misra, who was

appointed as an Additional Director by the Board of Directors of the Company and who

holds office as such only up to the date of this Annual General Meeting and in respect of

whom the Company has received a notice in writing along with a deposit of Rs. 500/-pursuant to the provisions of Section 257 of the Act from a Member signifying his

intention to propose Mr. Misra as a candidate for the office of Director of the Company,

be and is hereby appointed as a Director of the Company.”



provisions, if any, of the Companies Act, 1956 (the “Act”), Mr. N. J. Jhaveri, who was

appointed as an Additional Director by the Board of Directors of the Company and who

holds office as such only up to the date of this Annual General Meeting and in respect of

whom the Company has received a notice in writing along with a deposit of Rs. 500/-

pursuant to the provisions of Section 257 of the Act from a Member signifying his intention

to propose Mr. Jhaveri as a candidate for the office of Director of the Company, be and is

hereby appointed as a Director of the Company liable to retire by rotation.”

10. To consider and, if thought fit, to pass, the following Resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 163 and all other applicable

provisions, if any, of the Companies Act, 1956 the Register of Members, Index of Members,

Register of Debentureholders, Index of Debentureholders and other related books be kept

at the premises of the Company’s Registrar and Transfer Agents viz. Sharepro Services

(India) Private Limited, Satam Estate, 3rd Floor, Above Bank of Baroda, Cardinal Gracious

Road, Chakala, Andheri (East), Mumbai 400 099.”

By Order of the Board

S.K.Chatterjee

Company Secretary

Place: Mumbai

Date: 21st April, 2007



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NOTES :

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING ISENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF

HIMSELF/HERSELF AND THE PROXY NEED NOT BE A MEMBER OF THE

COMPANY. THE INSTRUMENT APPOINTING A PROXY SHOULD HOWEVER

BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS

THAN FORTY EIGHT HOURS BEFORE THE COMMENCEMENT OF THE

MEETING.

2. An Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in

respect of item nos. 6 to 10 of the Notice set out above, is annexed hereto.

3. The Register of Members and Share Transfer Books of the Company will remain closed

from 13th July, 2007 to 20th July, 2007 (both days inclusive) for the purpose of Annual

General Meeting.

4. The Board of Directors at their meeting held on 12th March, 2007 have declared interim

dividend of Rs. 4/- per equity share for the year 2006-2007.

At the Board meeting held on 21st April, 2007, the Board has decided to treat the interim

dividend as final dividend for the year ended 31 st March, 2007. Accordingly, Members

should note, confirm and ratify the payment of interim dividend made on the equity shares

of the Company as final dividend. (Refer item no. 2 of this Notice).

5. a) Members are requested to notify immediately any change of address:

(i) to their Depository Participants (DPs) in respect of their electronic share accounts, and

(ii) to the Company or to its Registrar & Transfer Agent viz. Sharepro Services (India)

Private Limited (RTA), having their address at Satam Estate, 3 rd Floor, Above Bank

of Baroda, Cardinal Gracious Road, Chakala, Andheri (East), Mumbai 400 099 in

respect of their physical share folios, if any.

b) in case the mailing address mentioned on this Annual Report is without the PIN

CODE, Members are requested to kindly inform their PIN CODE immediately.

6. Non-resident Indian shareholders are requested to inform the Company or its RTA or to the

concerned DP, as the case may be, immediately:

(a) the change in the residential status on return to India for permanent settlement.

(b) the particulars of the NRE Account with a bank in India, if not furnished earlier.

7. Members are requested to make all correspondence in connection with shares and debentures

held by them by addressing letters directly to the RTA or the Company at its Registered

Office quoting reference of their folio numbers or their Client ID number with DP ID

number, as the case may be.



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8. Members who are holding shares in identical order of names in more than one folio are

requested to send to the Company the details of such folios together with the share

certificates for consolidating their holdings in one folio. The share certificates will bereturned to the Members after making requisite changes thereon.

9. Depository System

The Company has entered into agreements with National Securities Depository Limited

(NSDL) and Central Depository Services (India) Limited (CDSL). Members, therefore,

now have the option of holding and dealing in the shares of the Company in electronic

form through NSDL or CDSL.

The Depository System envisages the elimination of several problems involved in the

scrip-based system such as bad deliveries, fraudulent transfers, fake certificates, thefts in

postal transit, delay in transfers, mutilation of share certificates, etc. Simultaneously,

Depository System offers several advantages like exemption from stamp duty, eliminationof concept of market lot, elimination of bad deliveries, reduction in transaction costs,

improved liquidity, etc.

10. As per the provisions of the Companies Act, 1956, facility for making nominations is now

available to INDIVIDUALS holding shares in the Company. The Nomination Form 2B

prescribed by the Government can be obtained from the RTA or the Company at its

Registered Office or downloaded from the Company’s website www.ultratechcement.com.

Members holding shares in the dematerialised form are required to approach their DP for

nomination.

11. a) To avoid the incidence of fraudulent encashment of the dividend warrants, Members

are requested to intimate the Company under the signature of the Sole / First Joint

holder, the following information, so that the Bank account number and Name and

address of the Bank can be printed on the dividend warrants:

1) Name of Sole/First Joint holder and Folio No.

2) Particulars of Bank Account, viz.

i) Name of the Bank

ii) Name of Branch

iii) Complete address of the Bank with Pin Code number

iv) Account Type, whether Savings (SB) or Current Account (CA)

v) Bank Account Number allotted by the Bank

b) Members are advised to avail of the facility for receipt of future dividends through

Electronic Clearing Service (ECS). The ECS facility is available at specified locations.

Members holding shares in the dematerialised mode are requested to contact their

respective DPs for availing ECS facility. Members holding shares in physical form are



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requested to download the ECS form from the website of the Company and the same

duly filled up and signed along with a xerox copy of a cancelled cheque may be sent to

the Company at its Registered Office or its RTA.

12. Members who hold shares in the dematerialised form and desire a change / correction in

the bank account details, should intimate the same to their concerned DP and not to the

Company or its RTA. Members are also requested to give the MICR Code of their Bank to

their DPs. The Company will not entertain any direct request from such Members for

change of address, transposition of names, deletion of name of deceased joint holder and

change in the bank account details. The said details will be considered as will be furnished

by the DPs to the Company.

13. Pursuant to the recommendation of SEBI Committee on Corporate Governance for

appointment of the Directors / re-appointment of the retiring Directors, a statement

containing details of the concerned Directors is attached hereto.

Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956:

Item No. 6

M/s. S. B. Billimoria & Co., Chartered Accountants, Mumbai have vide letter dated 11th April,

2007 expressed their inability to be re-appointed as Joint Statutory Auditor of your Company.

It is therefore proposed to appoint M/s. Deloitte Haskins & Sells, Chartered Accountants,

Mumbai as the Joint Statutory Auditor in their place as stated in the resolution.

Although Section 224(2)(b) of the Companies Act, 1956 (the “Act”) dealing with such a case

does not refer to any such Notice being given in respect of the appointment of new Auditors,

the matter might also be governed by the provisions of Section 225 of the Act, in terms of

which, Special Notice is required for a resolution at an Annual General Meeting appointing as

Auditor a person other than the retiring Auditor. Accordingly, such a Special Notice has been

received by your Company from one of its Members signifying his intention to move a

resolution appointing M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai as the

new Joint Statutory Auditor of your Company.

M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai have given a certificate of

their eligibility and willingness to act as Joint Statutory Auditor, if appointed at the ensuing

Annual General Meeting.

M/s. G. P. Kapadia & Co., Chartered Accountants, Mumbai have also separately given acertificate of their eligibility and willingness to act as Joint Statutory Auditor, if re-appointed

at the ensuing Annual General Meeting.

It is, therefore, proposed to appoint M/s. Deloitte Haskins & Sells, Chartered Accountants,

Mumbai and re-appoint M/s. G. P. Kapadia & Co., Chartered Accountants, Mumbai as Joint

Statutory Auditors of your Company.



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The Board of Directors of your Company on the recommendation of the Audit Committee

propose the above appointment / re-appointment from the conclusion of this Annual General

Meeting until the conclusion of the next Annual General Meeting.

The resolution as set out in Item No. 6 of this Notice is accordingly commended for your

acceptance.

None of the Directors of your Company is, in any way, concerned or interested in the said

resolution.

Item no. 7

M/s. Haribhakti & Co., Chartered Accountants, Mumbai were appointed as Branch Auditors

of your Company’s Units at Jafrabad and Magdala in Gujarat and Ratnagiri in Maharashtra at

its Sixth Annual General Meeting.

The Board of Directors of your Company have on the recommendation of the Audit Committeeproposed that M/s. Haribhakti & Co., Chartered Accountants, Mumbai be re-appointed as

Branch Auditors of your Company, to audit the Accounts of your Company’s Units at Jafrabad

and Magdala in Gujarat and Ratnagiri in Maharashtra and to hold office from the conclusion

of this Meeting until the conclusion of the next Annual General Meeting.

Further, your Company may acquire new Units in India or abroad in future and it may be

necessary to appoint Branch Auditors for carrying out the audit of the accounts of such Units.

Your consent is being sought for authorising the Board to appoint Branch Auditors in respect

of such Units in consultation with the Statutory Auditors and to fix their remuneration.


acceptance.


resolution.

Item no. 8

Mr. S. Misra was appointed as an Additional Director on the Board of your Company with

effect from 16th October, 2006. Mr. Misra has held top executive positions in the corporate

sector including as Deputy Chairman of ITC Limited and has vast experience in Corporate

Management. He has been heading the Cement Business of the Aditya Birla Group for the last

eight years and this Business has grown significantly under his stewardship.

Mr. Misra was also appointed Managing Director of your Company for a period of 3 years

effective from 16th October, 2006. The appointment of Mr. Misra as Managing Director has

been approved by the Members by passing resolution through postal ballot, results of which

were announced on 17th January, 2007.


acceptance.

None of the Directors except Mr. S. Misra is interested in the resolution.



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Item no. 9

Mr. N. J. Jhaveri was appointed Additional Director on the Board of your Company witheffect from 16th October, 2006. Mr. Jhaveri is M.Sc. (Economics) from the London School of

Economics. Mr. Jhaveri joined ICICI in September 1974 and rose to the position of

Jt. Managing Director and retired as Executive Chairman of ICICI Securities in August, 1995,

after a long and meritorious service. He is on the Board of several reputed companies.

Considering his vast experience, his presence on the Board will be valuable to your Company.

The resolution is accordingly commended for your acceptance.

None of the Directors except Mr. N. J. Jhaveri is interested in the resolution.

Item no. 10

Under the provisions of the Companies Act, 1956, (the “Act”) certain documents such as the

Register and Index of Members, Register and Index of Debentureholders, other related booksand papers etc., are required to be kept at the Registered Office of your Company. However,

these documents can be kept at any other place within the city, town or village in which the

Registered Office of your Company is situated, with the approval of the Members to be

accorded by a Special Resolution.

Your Company has appointed M/s. Sharepro Services (India) Private Limited, Mumbai as its

Registrar and Share Transfer Agent (RTA), who have been providing depository related services

for the shares held in demat mode and also acting as the Share Transfer Agent for the shares

held in physical segment. Hence, the approval of the Members is sought in terms of

Section 163(1) of the Act, for keeping the aforementioned Registers and documents at the

premises of the RTA as stated in the resolution. The Board of Directors recommend the

resolution as set out in the Notice for your approval.


resolution.

By Order of the Board

S.K.Chatterjee

Company Secretary

Place: Mumbai

Date: 21st April, 2007



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Details of Directors seeking re-appointment/appointment at the Annual General Meeting to be held on 20 th July, 2007

Name of Director Mr. J. P. Nayak Mr. Y. M. Deosthalee Mr. Kumar Mangalam Mr. S. Misra Mr. N. J. Jhaveri

Birla

Date of Birth 13th November, 1943 6th September, 1946 14th June, 1967 16th November, 1947 9th August, 1935

Date of Appointment 30th October, 2000 24th August, 2000 14th May, 2004 16th October, 2006 16th October, 2006

Expertise in specific Company Executive Company Executive Industrialist Corporate Management Company Director

general functional area

Qualifications B.E. (Mech.); P.G.D. B. Com; ACA; LL.B ACA; MBA B.A. M. A. (Economics),

(Prodn.) Engineering M.Sc. (Economics)

London School of

Economics

List of outside 1. Audco India L td . 1 . Larsen & Toubro L td . 1 . Adi tya Bir la Nuvo Ltd . 1 . Bir la Te lecom Ltd . 1 . Afcons Inf ra st ructure

Directorships held 2. EWAC Alloys Ltd. 2. Larsen & Toubro 2. Aditya Birla Retail Ltd. 2. BTA Cellcom Ltd. Ltd.

(Public Limited 3. Larsen & Toubro Ltd. Infotech Ltd. 3. Birla Sun Life Asset 3. Idea Cellular Ltd. 2. Gujarat State Petronet

Companies) 4. L&T Demag Plastics 3. L&T Capital Co. Ltd. Management Co. Ltd. 4. Idea Mobile Ltd.

Machin ery Ltd . 4 . L& T Finan ce Ltd. 4 . Birla Sun Life Insurance Co mmun ication Ltd . 3 . Hindalco Industries Ltd.

5. L&T Komatsu Ltd. 5. L&T Infrastructure Co. Ltd. 5. Shree Digvijay Cement 4. Indian Aluminium

6. NAC Infrastructure Development Project Ltd. 5. Century Textiles and Company Ltd. Company Ltd.Equipment Ltd. 6. L&T Infrastructure Industries Ltd. 5. National Securities

7. Tractor Engineers Ltd. Finance Co. Ltd. 6. Essel Mining & Depository Ltd.

8. Voith Paper Technology 7. The Dharma Port Industries Ltd. 6. Pidilite Industries Ltd.

(India) Ltd. Company Ltd. 7. Grasim Industries Ltd. 7. Siemens Information

8. Hindalco Industries Ltd. Systems Ltd.

9. Idea Cellular Ltd. 8. S iemens Ltd.

10. PSI Data Systems Ltd. 9. SKF India Ltd.

11. Transworks Information 10. Star Paper Mills Ltd.

Services Ltd. 11. Usha Martin Ltd.

12. Voltas Ltd.

Chairman / Member of the — — — — —

Committee of the Board of

Directors of the Company

Chairman / Member of the

Committee of Directors of

other Public Limited

Companies in which he/

she is a Director

a) Audit Committee 1. Audco India Ltd. - 1. Larsen & Toubro — 1. Shree Digvijay 1. Afcons Infrastructure

Chairman Infotech Ltd. - Chairman Cement Company Ltd. - Chairman

2. EWAC Alloys Ltd. - 2. L&T Finance Ltd. – Ltd. – Member 2. Usha Martin Ltd. -

Chairman Chairman Chairman

3. L&T Komatsu Ltd. - 3. L&T Capital Co. Ltd. – 3. Voltas Ltd. - Chairman

Chairman Member 4. Gujarat State Petronet

4. Tractor Engineers Ltd. - 4. L&T Infrastructure Ltd. - Member

Chairman Development Projects 5. Hindalco Industries Ltd.

5. L&T Demag Plastics Ltd. – Member - Member

Machinery Ltd. - 6. National Securities

Member Depository Ltd. -

Member

7. Pidilite Industries Ltd.

- Member

8. SKF India Ltd. –

Member

b) Shareholders’ 1. Larsen & Toubro Ltd. - — — 1. Shree Digvijay —

Committee Member Cement CompanyLtd. – Member

Note : Pursuant to Clause 49 of the Listing Agreement, only two Committees, viz., Audit Committee and Shareholders’ Committee have been considered.



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M A N A G E M E N T D I S C U S S I O N A N D A N A L Y S I S

Awarpur Cement Works (ACW)

OVERVIEW:

India is the second largest producer of cement in the world, producing around 150 mtpa. Cement

is one of the core sector industries in the country. It registered a growth of around 9% in

FY07.The Government’s initiatives towards infrastructure development coupled with the growing

housing demand have to a very large extent been the catalysts. The buoyancy in the industry was

reflected in an average capacity utilisation of more than 90% in FY07, which will probably be

bettered in FY08. The industry also witnessed improved domestic and export realisation. This

was partly neutralised by increases in the cost of energy, transport and other inputs.

Cement being an energy intensive industry, availability of quality power and fuel on a regular

basis at economical prices continues to pose a challenge. The increasing need for coal by other

core sectors causes a strain on adequate availability for future needs. Further, since cement is

distributed in the local markets mainly by roads, the impact of restrictions imposed on carrying

capacity by trucks continues to adversely affect the industry.

Enthused by the performance of the industry during the last 15 months and considering the

projected demand, additional capacities of around 90 million tonnes have been announced.

These are likely to be commissioned over the next 3 years creating an imbalance in demand

and supply.

To mitigate the increase in energy costs, your Company is setting up captive power plants at

the Units in Andhra Pradesh, Chattisgarh and Gujarat. These will meet around 80% of yourCompany’s power requirement. Apart from reducing your Company’s dependence on the State

grid, thereby reducing cost of power, this, to some extent will offset the effect on the margins

of your Company resulting out of increased supplies.

Further, to cater to the growing demand in the South India market, the capacity at your Company’s

Units at Andhra Pradesh is being augmented by 4 mtpa with a grinding Unit in Karnataka.



17

BUSINESS AND FINANCIAL PERFORMANCE REVIEW:

Capacity Utilisation

FY 07 FY06# % changeover FY06

Installed capacity (Mn.TPA):

Clinker 14.50 14.50Cement 17.00 17.00

Production (Mn. Mt):

Clinker 14.22 12.73 11.70%Cement 14.64 13.33 10.05%

– clinker capacity utilisation 98% 93%– effective capacity utilisation@ 101% 89%

@ Effective capacity utilisation: cement production + clinker sold.

# Figures for FY06 include those of the erstwhile Narmada Cement Company Limited (NCCL) for the period 1st October, 2005 to 31st March, 2006.

Sales Volume

FY07 FY06# % changeover FY06

Sales Volume (Mn. Mt):

Domestic – Cement 13.91 12.77 9%– Clinker 0.30 0.20 50%

Domestic Volume 14.21 12.97 10%

Exports – Cement 1.26 1.46 –14%– Clinker 2.20 1.12 96%

Exports Volume 3.46 2.58 34%

Total Volume 17.67 15.55 14%

# Figures for FY06 include those of the erstwhile NCCL for the period 1 st October, 2005 to 31st March, 2006.

Domestic sales volume grew from 12.97 Mn.Mt in FY06 to 14.21 Mn.Mt in FY07, registeringa growth of 10%. Overall exports increased from 2.58 Mn.Mt in FY06 to 3.46 Mn.Mt,registering a growth of 34%. However, the export mix witnessed a change based on demand.

Sales Realisation (Net of Excise Duty)

FY07 FY06 % changeover FY06

Average Realisation (Rs./MT) 2,735 2,122 29%

Domestic – Cement 2,970 2,123 40%Exports – Cement 2,435 2,133 14%

– Clinker 1,630 1,632

# Figures for FY06 include those of the erstwhile NCCL for the period 1 st October, 2005 to 31st March, 2006.

High capacity utilisation in India and growing demand in the Middle East have resulted inimproved domestic and export realisation.



18

Financial Highlights

(Rs. in crores)

FY07 FY06# % Change

over FY06

Net Turnover 4,911 3,299 49

Domestic 4,242 2,809 51Exports 669 490 37

Other Income 61 37 65

Total Expenditure 3,493 2,745 27

Operating Profit (PBIDT) 1,479 591 150

Operating Margin (%) 30 18

Interest 87 90 -3

Gross Profit (PBDT) 1,392 502 178

Depreciation 226 216 5

Profit Before Tax 1,166 286 308

Current Tax 396 57 595Deferred Tax (17) (5) 252

Fringe Benefit Tax 5 4 29

Net Profit after Total Tax 782 230 241

# Figures for FY06 include those of the erstwhile NCCL for the period 1st October, 2005 to 31st March, 2006.

Captive Jetty - Gujarat Cement Works (GCW)



19

Net Turnover

The increase in turnover is linked to higher volume in domestic and export markets together

with improved price environment.

Other Income

Other Income grew from Rs. 37 crores in FY06 to Rs. 61 crores in FY07 on account of

interest / dividend earned on investments of temporary surplus fund in Debt Linked Schemes.

Operating Profit (PBIDT) and Margin

Operating profit was up by 150% from Rs. 591 crores in FY06 to Rs. 1,479 crores in FY07,

attributable to the growth in volume resulting in increased capacity utilisation (101%).

The pricing environment in the domestic as well as the export market was also favourable.

At the same time, cost of raw materials, energy, employees and logistics saw an increase on

account of the following factors:

(i) Raw Material – the overall raw material cost per metric ton of cement was higher by

16% on account of increase in inward freight due to loading restrictions and increased

procurement cost of fly ash.

(ii) Energy – energy cost witnessed an increase of 25% from Rs. 910 crores to Rs. 1,138

crores due to higher production and escalating power and fuel rates. Average fuel price

(coal) rose by around 20% - Rs. 2,015 pmt to Rs. 2,425 pmt.

(iii) Employee – costs saw an upswing on account of wage settlement and revision in

compensation structure in line with the market.

(iv) Logistics – expenses stepped up consequent to a substantial rise in rail and road freight

and higher volume.

However, despite this, operating margins improved from 18% in FY06 to 30% in FY07.

Interest

Better working capital management resulted in lowering interest costs by 3% from Rs. 90 crores

in FY06 to Rs. 87 crores in FY07.

Depreciation

Depreciation & Amortisation were higher - from Rs. 216 crores in FY06 to Rs. 226 crores in

FY07 due to capitalisation of Rs. 207 crores in FY07.

Income Tax

The provision for current tax in FY07 was Rs. 396 crores as against Rs. 57 crores in FY06.

Your Company had a tax shield in FY06 on account of carry forward accumulated tax loss of Rs.176 crores of Narmada Cement Company Limited which was amalgamated with your

Company from 1st October, 2005. The higher tax outgo is also linked to improved earnings.

Deferred tax liability reduced by Rs. 17 crores during FY07 despite increase in tax rate on

account of change in education cess. Your Company also provided Rs. 5 crores as Fringe

Benefit Tax against Rs. 4 crores in FY06.



20

Net Profit

Net profit for FY07 stood at Rs. 782 crores compared to Rs. 230 crores in FY06.

Cash Flow Statement

(Rs. in crores)

FY07

Sources of Cash

Cash from operations 1,037

Non-operating cash flow 30

Decrease in working capital 76

Total 1,143

Uses of Cash

Net increase in investments 311

Net capital expenditure 765

Decrease in debts -131

Dividend 82

Interest 88

Increase in cash and cash equivalent 28

Total 1,143

Sources of Cash

Cash from operations

Overall improved performance was reflected in the earnings of your Company. Cash from

operations was higher at Rs. 1,037 crores in FY07 vis-a-vis Rs. 518 crores in FY06.

Non Operating Cash Flow

Non Operating Cash Flow includes dividend income from short term temporary

surplus investments, Joint Venture in Sri Lanka and interest earned on deposits with statutory

authorities.

Decrease in Working Capital

Current Assets increased by Rs. 146 crores, on account of increased deposits with

electricity boards and higher excise deposits. Liabilities and provisions rose by Rs. 222 crores

due to increase in business activities. The above resulted in reduction of working capital by

Rs. 76 crores.



21

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. 766 crores was on account of various ongoing Capex plan.

Decrease in Debts

Your Company raised Rs. 178 crores long term debts and repaid Rs. 76 crores, resulting in

increase of Rs. 102 crores in long term borrowings. Sales tax deferment loan increased by

Rs. 24 crores.

Your Company enjoys AA+ and P1+ ratings for its long term and short term debts from

CRISIL.

Dividend

Your Company has paid a final dividend of Rs. 1.75 per equity share of Rs.10 each absorbing

an amount of Rs. 25 crores (including corporate dividend tax of Rs. 3 crores) for the year

ended 31st March, 2006. An interim dividend of Rs. 4 per equity share of Rs. 10 each

absorbing an amount of Rs. 57 crores (including corporate dividend tax of Rs. 7 crores) was

paid for the year ended 31st March, 2007. The Board of Directors have recommended that the

interim dividend be treated as final dividend for the year ended 31 st March, 2007.

CAPITAL EXPENDITURE PLAN:

Your Company has earmarked over Rs. 2,600 crores for its various Capex plans. Of this,

around Rs. 1,100 crores will be spent in setting up captive power plants at the Units in Andhra

Pradesh, Chattisgarh and Gujarat. The Power Plant in Andhra Pradesh will be commissioned

in the last quarter of FY08 and at Chattisgarh in the first quarter of FY09. The power plant in

Gujarat will be commissioned in a phased manner commencing from the last quarter of FY08

and ending in the second quarter of FY09. These Power Plants will meet around 80% of your

Company’s power requirement. It will also reduce dependence on the State grid, thereby

reducing cost of power.

The capacity at your Company’s Unit at Andhra Pradesh is being augmented by 4 mtpa with a

grinding Unit in Karnataka at an expenditure of around Rs. 1,100 crores. Expected to becommissioned in March, 2008, this will help your Company cater to the growing demand in

South India.

Ready Mix Concrete is likely to see substantial growth in the years to come. Recognising the

opportunities that this Business will offer, your Company has commenced setting up of Ready

Mix Concrete Plants at various places in the country.



22

CONSOLIDATED PERFORMANCE:

(Rs. in crores)

FY07 FY06 % Change

over FY06

Net Turnover 4,969 3,384 47

Operating Profit (PBIDT) 1,491 607 146

Interest 87 90 -4

Gross Profit (PBDT) 1,404 517 172

Depreciation & Amortisation of Goodwill 229 231 -1

Profit Before Tax 1,175 286 311

Current Tax & Fringe Benefit Tax 404 63 537

Deferred Tax (15) (4) 269

Net Profit before Minority interest 787 227 247

Minority Interest 2 2 9

Net Profit after Minority Interest 785 225 249

The consolidated turnover increased by 47% to Rs. 4,969 crores from Rs. 3,384 crores in the

previous year, due to higher volume and overall improved price environment. Net Profit

before minority interest was 3.5 times of FY06 at Rs. 787 crores.

HUMAN RESOURCES:

Your Company maintains a cordial relationship with its employees through a constructive

work environment in support of productive gains.

Your Company invests heavily in people, people processes and skill development. Organisation

Health Studies (OHS) are conducted at regular intervals and findings of the OHS Reports are

analysed and concern areas suitably addressed.

Attrition, which is a common phenomenon all across, has an effect on your Company too.

Your Company strives to retain talent by facilitating career growth through job enrichment

and empowerment. Movement of people across the Businesses is one such initiative. Talent is

identified and taken through Development Assessment Centres for further honing of skills. A

Deferred Compensation Scheme has been introduced for retention of talent.

The total number of employees in your Company as on 31st March, 2007 was 3,503

(3,266 employees).



23

RISK MANAGEMENT:

Your Company’s Risk Management framework ensures compliance with the provisions of Clause 49 of the Listing Agreement. Your Company has institutionalised the process for

identifying, minimising and mitigating risks which is periodically reviewed. Some of the risks

identified and being acted upon by your Company are: Securing critical resources; sustainable

plant operations; cost competitiveness including logistics; timely completion of CAPEX;

customer service standard and environment and safety issues.

In addition, your Company is also exposed to foreign exchange and interest rate risks. Your

Company’s policy is to hedge its long term foreign exchange risks as well as short term

expenses within the defined parameters. To effectively deal with interest rate risks, your

Company uses a judicious mix of fixed and floating rate debts within stipulated parameters.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

Your Company has appropriate internal control systems commensurate with its size of

operations. The Internal Audit Department monitors the internal control systems and their

implementation. Audits are carried out at regular intervals and audit reports presented to the

Audit Committee for review. Further, the Internal Audit Department is also responsible for

reviewing the risk management process and ensuring compliance with the same.

CONCLUSION:

The demand for cement is expected to grow over 9% linked to GDP growth. At the same time,

new capacity announcements are likely to result in a surplus scenario during FY09, resulting

in pressure on domestic prices from FY09 onwards. The government’s continued initiatives

for infrastructure development, augurs well for the industry.

Against this background, your Company’s focus will be on sustainable plant performance,

improving service standard and timely completion of projects.

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.



24

R E P O R T O N C O R P O R A T E G O V E R N A N C E

GOVERNANCE PHILOSOPHY

The Aditya Birla Group is committed to the adoption of best governance practices and their

adherence in spirit. The 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. The Aditya Birla Group

Values - Integrity; Commitment; Passion; Seamlessness and Speed also reflect this philosophy.

UltraTech Cement Limited, (your Company) continuously strives for excellence through

adopting best governance and disclosure practices. In terms of Clause 49 of the Listing

Agreement executed with stock exchanges, the details of compliance are as follows:

BOARD OF DIRECTORS

Composition

Your Company’s Board comprises of 12 (twelve) directors, which include the Managing

Director and 4 (four) independent directors.

Director Executive/Non-Executive/Independent1

Mr. Kumar Mangalam Birla Non-Executive

Mrs. Rajashree Birla Non-Executive

Mr. R. C. Bhargava Independent

Mr. G. M. Dave Independent

Mr. Y. M. Deosthalee Non-Executive

Mr. N. J. Jhaveri2 Independent

Dr. S. Misra Non-Executive

Mr. V. T. Moorthy Non-Executive

Mr. J. P. Nayak Non-Executive

Mr. S. Rajgopal UTI Nominee, Independent

Mr. D. D. Rathi Non-Executive

Mr. S. Misra3 Managing Director

1. Independent Director means a director as defined under Clause 49 of the Listing Agreement.

2. Mr. N. J. Jhaveri was appointed as an Additional Director w.e.f. 16 th October, 2006.

3. Mr. S. Misra was inducted into the Board as Additional Director and appointed Managing Director

w.e.f. 16 th October, 2006 for a period of three years.

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.



25

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 andaccountability 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.

• Attendance of each Director at the Board meetings and the last AGM

Director No. of Board Meetings Attended Last

AGM @

Held Attended

Mr. Kumar Mangalam Birla 7 7 Yes

Mrs. Rajashree Birla 7 6 No

Mr. R. C. Bhargava 7 7 Yes

Mr. G. M. Dave1 7 2 Yes

Mr. Y. M. Deosthalee 7 3 Yes

Mr. A. R. Gandhi2 7 Nil No

Mr. Y. P. Gupta3 7 Nil No

Mr. N. J. Jhaveri4 7 2 No

Dr. S. Misra 7 6 Yes

Mr. V. T. Moorthy 7 6 Yes

Mr. J. P. Nayak 7 5 No

Mr. S. Rajgopal 7 7 Yes

Mr. D. D. Rathi 7 7 Yes

Mr. S. Misra5 7 4 Yes

@ Annual General Meeting (AGM) held on 28th August, 2006 at Birla Matushri Sabhagar, 19, New

Marine Lines, Mumbai – 400 020.

1. Appointed Director w.e.f. 7 th July, 2006.

2. Resigned as Director w.e.f. 7 th July, 2006.

3. Resigned as Director w.e.f. 16 th October, 2006.

4. Appointed Director w.e.f. 16 th October, 2006.

5. Appointed Director w.e.f. 16 th October, 2006.



26

• Number of other Boards or Board Committees in which he/she is a Member or

Chairperson

The details of the Directors with regard to outside directorships, committee positions are

as follows:

No. of outside No. of outside

Director Directorships Held 1 Committee Positions Held 2

Public Private Member Chairman

Mr. Kumar Mangalam Birla 11 11 — —

Mrs. Rajashree Birla 6 12 — —

Mr. R. C. Bhargava 10 3 6 2

Mr. G. M. Dave 5 — 1 1

Mr. Y. M. Deosthalee 7 — 2 2

Mr. N. J. Jhaveri 12 2 5 3

Dr. S. Misra 3 — — —

Mr. V. T. Moorthy 1 — — —

Mr. J. P. Nayak 8 — 2 4

Mr. S. Rajgopal 1 1 — —

Mr. D. D. Rathi 6 1 1 —

Mr. S. Misra 5 — 2 —

1. Excluding directorship in foreign companies and companies under Section 25 of the Companies Act, 1956.

2. Only two Committees viz. the Audit Committee and the Shareholders’ / Investor Grievance Committee

of all public limited companies are considered.

• Number of Board meetings held, dates on which held and number of Directors present

Date of Board Meeting City Board Strength No. of Directors

present

24th April, 2006 Mumbai 11 6

7th July, 2006 Mumbai 11 8

25th July, 2006 Mumbai 11 8

16th October, 2006 Mumbai 12 8

7th December, 2006 Mumbai 12 9

18th January, 2007 Mumbai 12 12

12th March, 2007 Mumbai 12 10



27

• Remuneration of Directors and their shareholding in your Company

Details of sitting fees paid to the Non-Executive Directors for attending Board meetings

and their shareholding in your Company are as under:

Director Sitting fees paid No. of shares

(Rs.) held

Mr. Kumar Mangalam Birla 1,40,000 400

Mrs. Rajashree Birla 1,20,000 400

Mr. R. C. Bhargava 1,40,000 —

Mr. G. M. Dave 40,000 —

Mr. Y. M. Deosthalee 60,000 1,773

Mr. N. J. Jhaveri 40,000 —

Dr. S. Misra 1,20,000 —

Mr. V. T. Moorthy 1,20,000 420

Mr. J. P. Nayak 1,00,000 1,276

Mr. S. Rajgopal 1,40,000 —

Mr. D. D. Rathi 1,40,000 —

Mr. S. Misra Nil 2

Apart from sitting fees that are paid to the Non-Executive Directors for attending Board / Committee meetings, no other fees / commission were paid during the year. No significantmaterial transactions have been made with the Non-Executive Directors vis-à-vis yourCompany. The details of remuneration paid to the Managing Director are as follows:

Managing Relationship

Remuneration paid during 2006-07 Director with other Directors

All elements of Fixed component Service contracts, Stock optionremuneration & performance notice period, details, if anypackage i.e. linked incentives, severance feesalary, benefits, alongwithbonuses, performancepensions etc. (a) criteria (b)

Mr. S. Misra — Rs. 2.36 crores Rs. 1 crore See note (c) See note (d)

(a) Mr. S. Misra was appointed Managing Director of your Company w.e.f. 16 th October, 2006. Remunerationof Rs. 2.36 crores includes Rs. 1.11 crores paid to him for the period 1 st April, 2006 to 15th October,2006 as Manager & CEO.

(b) Mr. S. Misra was paid a sum of Rs. 1 crore towards performance bonus linked to achievement of targets for the years 2004-05 and 2005-06 as Manager & CEO.

(c) Appointment of Mr.Misra as Managing Director is subject to termination by three months notice inwriting on either side.

(d) Your Company has not granted any stock options.

All decisions relating to the remuneration of the Managing Director is taken by the Board

in accordance with the approval received from the Members of your Company.



28

AUDIT COMMITTEE

Brief description of terms of reference

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. The primary objective of the Committee is to

monitor and provide effective supervision of the Management’s financial reporting process.

The terms of reference / power of the Audit Committee are in accordance with Clause 49

of the Listing Agreement.

The Audit Committee has the following powers:

- To investigate any activity within its terms of reference.

- To seek information from any employee.

- To obtain outside legal or other professional advice.- To secure attendance of outsiders with relevant expertise, if it considers necessary.

The role of the Audit Committee includes the following:

1. Oversight of your 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 Auditors and the fixation of audit fees.

3. Approval of payment to Statutory Auditors for any other services rendered by them.

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.



29

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 areas 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.

During the year, the Committee has reviewed the internal controls put in place to ensure

that the accounts of your Company are properly maintained and that the accountingtransactions are in accordance with prevailing laws and regulations. In conducting such

reviews, the Committee found no material discrepancy or weakness in the internal control

system of your Company.

The Committee has also been mandated to periodically review the procedures laid down

by your Company for assessing and managing risks.

• Composition, name of Members and Chairperson

All the Members of the Audit Committee are financially literate and Independent Directors

according to the definition laid down in Clause 49 of the Listing Agreement.

Mr. R. C. Bhargava is the Chairman of the Committee. The other Members of the Committee

are Mr.G.M.Dave and Mr.S.Rajgopal.

Mr.D.D.Rathi, Director of your Company and Wholetime Director & Chief Financial

Officer of Grasim Industries Limited, the holding company and Mr.K.C.Birla, Chief

Financial Officer of your Company are permanent invitees to the Audit Committee. The

Statutory and Internal Auditors of your Company are also invited to the Audit Committee

Meetings. The Company Secretary acts as the Secretary to the Committee.



30

• Meetings and attendance during the year

During the year, the Audit Committee met 8 times to deliberate on various matters. The

meetings were held on 24th April, 2006; 7th July, 2006; 25th July, 2006; 29th August, 2006;

16th October, 2006; 17th November, 2006; 18th January, 2007 and 26th February, 2007.

The details of attendance and sitting fees paid are as follows:

Name of Member No. of meetings Sitting Fees paid

Held Attended (Rs.)

Mr. R. C. Bhargava 8 8 1,60,000

Mr. G. M. Dave 8 5 1,00,000

Mr. S. Rajgopal 8 7 1,40,000

Mr. A. R. Gandhi resigned as Director w.e.f. 7th

July, 2006 and ceased to be a Member of the Audit Committee. Mr. G. M. Dave was inducted as a Member of the Audit Committee

w.e.f. 7th July, 2006.

SHARE TRANSFER AND SHAREHOLDER / INVESTOR GRIEVANCE

COMMITTEE

A “Share Transfer and Shareholder / Investor Grievance Committee” has been constituted

at the Board level, under the Chairmanship of a Non-Executive, Independent Director.

The Committee looks into issues relating to shares / debentureholders, including transfer/

transmission of shares/debentures, issue of duplicate share/debenture certificates,

non-receipt of dividend, Annual Report, shares after transfers and delay 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 totrack investor complaints and suggest measures for improvement from time to time. During

the year the Committee met two times.

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

To expedite the transfer in the physical segment, necessary authority has been delegated

by your Board to the Directors and Officers of your Company, to approve transfer/

transmission of shares / debentures. Details of share transfers / transmissions approved by

the Directors and Officers are placed before the Board.



31

• Name of Non-Executive Director heading the Committee

Mr.R.C.Bhargava is the Chairman of the Share Transfer and Shareholder / Investor Grievance

Committee.

• Name and designation of the Compliance Officer

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

Compliance Officer.

• Number of shareholders’ complaints received / number not solved to the satisfaction

of shareholders / number of pending complaints

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.

GENERAL BODY MEETINGS

• Location and time, where last 3 Annual General Meetings (AGMs) held

Year Type Location Date Time

2006 AGM Birla Matushri Sabhagar, 28th August, 2006 2.00 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 pm19, New Marine Lines,

Mumbai – 400 020

• Whether special resolutions passed in the previous 3 AGMs.

Yes, the following resolutions were passed as special resolutions:

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

Yes.

The Postal Ballot was conducted pursuant to the provisions of Section 192A of the

Companies Act, 1956 read with the Companies (Passing of the Resolution by Postal



32

Ballot) Rules, 2001, on the Special and Ordinary Resolutions set out in Notice dated

7th December, 2006 seeking consent of the Members of your Company for:

(1) Issuing equity shares under the Employee Stock Option Scheme–2006 (ESOS-2006) to

the employees of your Company (Resolution No. 1);

(2) Issuing equity shares under the Employee Stock Option Scheme–2006 (ESOS-2006) to

the employees of your Company’s holding/subsidiary company(ies) (Resolution No. 2);

(3) Revision in remuneration of Mr. S. Misra as Manager of your Company (Resolution

No. 3);

(4) The appointment of Mr. S. Misra as Managing Director of your Company (Resolution

No. 4)

The results of the Postal Ballot are:

Sr. Particulars Resolution No. 1 Resolution No. 2 Resolution No. 3 Resolution No. 4

No. Special Resolution Special Resolution Ordinary Resolution Ordinary Resolution

No. of No. of No. of No. of No. of No. of No. of No. of

Postal Ballot Shares Postal Ballot Shares Postal Ballot Shares Postal Ballot Shares

Forms Forms Forms Forms

1. Valid Postal Ballot Forms received 9,328 8,26,19,207 9,311 8,26,18,766 9,300 8,26,17,896 9,296 8,25,67,938

2. Postal Ballot Forms with assent 8,481 8,21,90,340 8,143 8,21,69,840 8,336 8,25,59,020 8,693 8,25,28,051

for the resolution (99.48%) (99.46%) (99.93%) (99.95%)

3. Postal Ballot Forms with dissent 847 4,28,867 1,168 4,48,926 964 58,876 603 39,887

for the resolution (0.52%) (0.54%) (0.07%) (0.05%)

All the above resolutions were approved by the Members with requisite majority.

• Person who conducted the postal ballot exercise

Mr. Sanjay Shringarpure, Company Secretary in Whole-time Practice, Mumbai wasappointed as Scrutinizer for conducting the Postal Ballot voting process in a fair and

transparent manner.

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.

DISCLOSURES

• Disclosures on materially significant related party transactions that may have potentialconflict with the interests of the Company at large

Your Company places all the aforesaid details before the Audit Committee periodically.

Particulars of related party transactions are listed out in Schedule 21(B)(12) of the Accounts.

However, all these transactions are on normal commercial arm’s length basis.



33

Disclosure of Accounting treatment

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

statements.

• Risk Management

The Audit Committee of the Board has been mandated to periodically review the procedures

laid down by your Company for assessing and managing risks. The Audit Committee

reviewed the risks identified and the mitigation plan for minimising risks.

• Proceeds from public issues, rights issues, preferential issues etc.

During the year, your Company did not raise any funds by way of public, rights, preferential

issues etc.

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

Company by stock exchanges or SEBI or any other statutory authority, on anymatter relating to capital markets, during the year

There has been no instance of non-compliance by your Company on any matter related to

capital markets during the year under review and hence no strictures /penalties have been

imposed on your Company by the stock exchanges or the Securities and Exchange Board

of India (SEBI) or any other statutory authority.

• Management

— The Management Discussion and Analysis forms part of the Annual Report and is in

accordance with the requirements laid out in Clause 49 of the Listing Agreement.

— 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.

• Shareholders

— Details of the Directors seeking re-appointment/appointment at the ensuing Annual

General Meeting (AGM) are provided in the Notice convening the AGM.

— 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).

• Adoption of non-mandatory compliances

— A half-yearly declaration of financial performance including summary of the significantevents in last six-months have been sent to each household of shareholders.

— The statutory financial statements of your Company are unqualified.

Apart from the above, your Company has constituted a Finance Committee and an ESOS

Compensation Committee of the Board.



34

• Finance Committee

The Finance Committee comprises of the following Directors viz. Mr. R. C. Bhargava,

Dr. S. Misra and Mr. D. D. Rathi. 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. During the year, the

Committee met twice — 25th May, 2006 and 7th December, 2006.

• ESOS Compensation Committee

The Board of Directors at its meeting held on 7th December, 2006 constituted an

“ESOS Compensation Committee” for formulating the Employee Stock Option Scheme

– 2006 (ESOS-2006) and for implementing, administering and supervising the same.

The Committee comprises of the following Directors viz. Mr. Kumar Mangalam Birla,

Mr. G. M. Dave and Mr. S. Rajgopal.

MEANS OF COMMUNICATION

• Quarterly results

— Which newspapers normally published in

Newspaper Cities of Publication

Business Standard All editions

Economic Times Mumbai

Loksatta / Maharashtra Times Mumbai

— Any website, where displayed www.ultratechcement.comwww.adityabirla.com

— Whether the Company Website displays

All official news releases Yes

Presentation made to Institutional Investors/Analysts No



35

CEO/CFO CERTIFICATION

The Board of DirectorsUltraTech Cement Limited

We, to the best of our knowledge and belief, certify that:

1. We have reviewed the financial statements, read with the cash flow statement of UltraTechCement Limited (the Company) for the year ended 31st March, 2007:

(i) these statements do not contain any untrue statement of a material fact or omit to statea material fact that might be misleading with respect to the statements made;

(ii) these statements and other financial information included in this Report present a trueand fair view of the Company’s affairs and are in compliance with the existing accountingstandards, applicable laws and regulations;

2. There are no transactions entered into by the Company during the year which are fraudulent,illegal or violative of the Company’s Code of Conduct;

3. The Company’s other certifying Officers and We, are responsible for establishing andmaintaining internal controls for financial reporting and we have evaluated the effectivenessof the internal control systems of the Company pertaining to financial reporting;

4. The Company’s other certifying Officers and We, have disclosed based on our most recentevaluation, 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 we are aware and the steps taken or proposed to be takento rectify the deficiencies.

5. We have indicated to the Auditors and the Audit Committee :

a) significant changes in the Company’s internal control over financial reporting duringthe year.

b) all significant changes in accounting policies during the year, if any, and that the samehave been disclosed in the notes to the financial statements.

c) that to the best of our knowledge, no fraud, whether or not material, that involves

management or other employees who have a significant role in the Company’s internalcontrol system over financial reporting existed during the period under review.

For UltraTech Cement Limited

Mumbai K.C.Birla S.Misra21st April, 2007 CFO Managing Director

CODE OF CONDUCT

Declaration

As provided under Clause 49 of the Listing Agreement with the Stock Exchanges, the BoardMembers and the Senior Management Personnel have confirmed compliance with the Code of Conduct for the year ended 31st March, 2007.

For UltraTech Cement Limited

Mumbai S.Misra21st April, 2007 Managing Director



36

S H A R E H O L D E R I N F O R M A T I O N

1. Annual General Meeting

— Date and Time : 20th July, 2007, 3:30 p.m.

— Venue : Ravindra Natya Mandir,

P. L. Deshpande Maharashtra

Kala Academy, Near

Siddhivinayak Temple,

Sayani Road, Prabhadevi,

Mumbai 400 025

2. Financial Calendar

— Financial reporting for the quarter ending : End July, 2007

30th June, 2007

— Financial reporting for the half year ending : End October, 2007

30th September, 2007

— Financial reporting for the quarter ending : End January, 200831st December, 2007

— Financial reporting for the year ending : End April, 2008

31st March, 2008

— Annual General Meeting for the year ended : End July/August, 2008

31st March, 2008

3. Dates of Book Closure : 13th July, 2007 to 20th July, 2007

(both days inclusive)

4. Interim Dividend Payment Date : 26th March, 2007

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 : [email protected]

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 400023. Dalal Street, Mumbai 400023.

2. National Stock Exchange of India Limited, 2. National Stock Exchange of India Limited

“Exchange Plaza”,Bandra-Kurla Complex, “Exchange Plaza”, Bandra-Kurla Complex,

Bandra (East), Mumbai 400051. Bandra (East), Mumbai 400051.

Note: Listing fees for the year 2007-08 has been paid to the Bombay Stock Exchange Limited and the

National Stock Exchange of India Limited.



37

(b) Name and address of Trustees : UTI Bank Limited

for the Debentureholders 111, Maker Towers ‘F’

13th Floor, Cuffe ParadeColaba, Mumbai 400 005

Tel: (022) 67074407

Fax: (022) 22186944

(c) Overseas Depository for GDRs : Citibank N. A.

Depository Receipt Services

388, Greenwich Street,

New York; NY-10013 USA

Tel: +2128166649

Fax: +2128166865

(d) 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 : ISIN INE481G01011

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-06 885.00 689.90 859.65 1,692,014 889.00 685.00 854.10 2,623,498

May-06 883.90 585.00 605.45 1,642,231 900.00 588.00 602.05 3,193,434

Jun-06 751.85 500.50 749.95 1,423,384 749.45 495.00 747.70 2,355,503

Jul-06 761.00 599.00 722.10 467,843 760.00 600.00 722.25 855,714

Aug-06 781.40 699.00 769.00 643,184 781.40 710.20 769.35 1,165,678

Sep-06 921.40 762.20 891.15 693,337 922.00 762.00 892.75 1,363,873

Oct-06 919.75 860.00 880.50 615,295 940.00 848.00 882.75 1,109,624

Nov-06 936.50 860.00 898.75 614,249 938.00 860.00 897.45 1,137,293

Dec-06 1,155.00 895.30 1,096.90 742,681 1,153.00 890.00 1,099.65 1,463,466

Jan-07 1,204.95 985.10 993.70 562,769 1,250.00 985.00 995.15 1,587,052

Feb-07 1,140.05 820.00 891.10 685,717 1,141.00 805.00 888.05 2,228,768

Mar-07 928.00 715.00 770.45 940,126 919.00 713.00 772.10 2,188,006



38

9. Stock Performance:

10. Stock Performance and Returns:

Absolute Returns (in %)

(In Percentage) 1 Year 3 Years 5 Years

UltraTech 12.56 — —

BSE Sensex 15.89 133.82 276.79

NSE Nifty 12.31 115.68 238.32

Annualised Returns (In %)

(In Percentage) 1 Year 3 Years 5 YearsUltraTech 12.56 — —

BSE Sensex 15.89 32.73 30.36

NSE Nifty 12.31 29.20 27.59

11. Registrar and Transfer Agents (RTA) : Sharepro Services (India) Private Limited

(For share transfers and other Satam Estate, 3rd Floor, Above Bank of Baroda,

communication relating to Cardinal Gracious Road, Chakala,

share certificates, dividend and Andheri (East), Mumbai 400099.

change of address) Tel: (022) 2821 5168 / 2834 8218

Fax : (022) 2837 5646

Email: [email protected]

12. Share Transfer system :

Share transfer in physical form are registered and returned within a period of 12 days from

the date of receipt, if the documents are clear in all respects. Officers of your Company

have been authorised to approve transfers upto 5,000 shares in physical form under one

transfer deed. One Director jointly with one Officer have been authorised to approve the

transfers exceeding 5,000 shares under one transfer deed.

Mar-07Feb-07Jan-07Dec-06Nov-06Oct-06Sep-06Aug-06Jul-06Jun-06May-06Apr-06

Sensex UltraTech Nifty

60

80

100

120

140

160

180

200



39

The RTA attends to investor grievances in consultation with the Secretarial Department of

your Company.

2006-07 2005-06

Transfer Period No. of No. of % No. of No. of %

(in days) transfers shares transfers shares

1 – 15 1,565 34,625 48.69 1,722 55,565 48.68

16 – 20 361 13,399 11.23 969 32,782 28.73

21 – 30 1,288 44,390 40.08 791 25,786 22.59

Total 3,214 92,414 100.00 3,482 114,133 100.00

Number of pending share transfers : 22 transfers in respect of 721 shares pending as

as at 31st March, 2007 registered notices to sellers have been issued.

13. Investor Services:Complaints received during the year

Nature of complaints 2006-07 2005-06

Received Cleared Received Cleared

Relating to Transfer, Transmission,

Dividend, Interest, Demat & Remat 21 21 45 45

and Change of address etc.

Legal proceedings on share transfer : There are no major legal proceedings relating to

issues, if any. transfer of shares.

14. Distribution of Shareholding as on 31st March :

2007 2006

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

No. of equity share share shares share share share shares share

shares held holders holders held holding holders holders held holding

1 – 100 258,881 89.00 7,842,953 6.30 251,388 88.21 8,194,014 6.59

101 – 200 18,822 6.47 2,797,601 2.25 19,563 6.87 2,907,473 2.34

201 – 500 9,127 3.14 2,893,342 2.32 9,588 3.36 3,043,010 2.45

501 – 1000 2,495 0.86 1,778,311 1.43 2,744 0.96 1,971,619 1.58

1001 - 5000 1,323 0.45 2,471,605 1.99 1,428 0.50 2,672,952 2.15

5001-10000 92 0.03 652,631 0.52 99 0.04 696,917 0.56

10001 & above 153 0.05 106,049,436 85.19 169 0.06 104,912,636 84.33

Total 290,893 100.00 124,485,879 100.00 284,979 100.00 124,398,621 100.00



40

16. Dematerialisation of shares : 95.84% of outstanding equity have been dematerialised

and liquidity as on 31st March, 2007. Trading in equity shares of your

Company is permitted only in the dematerialised form.

17. Details on use of public funds : Not Applicableobtained in the last three years

18. Outstanding GDR/Warrants and : 422,044 GDRs are outstanding as on 31st March, 2007.

Convertible Bonds Each GDR represents one underlying equity share.

There are no warrants/convertible bonds outstanding

as at the year end.

Others

15.14%

Promoters

& Promoter

Group

52.97%

Banks/MFs/FI's

2.08%

Insurance

Companies

5.93%

Foreign

Investors

10.28%

Corporates13.60%

Others

16.23%

Promoters

& Promoter

Group

51.08%

Banks/MFs/FI's

3.28%

Insurance

Companies

6.25%

Foreign

Investors

8.74%

Corporates14.42%

2007 2006

15. Category of Shareholding as on 31st March :

2007 2006

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

share share shares share share share shares share

holders holders held holding holders holders held holding

Promoters &

Promoter Group 5 0.00 65,947,119 52.97 2 0.00 63,542,320 51.08

Banks/MFs / FIs

Mutual Fund

& UTI 38 0.01 2,497,719 2.01 55 0.02 4,027,732 3.24

Banks & FI’s 104 0.04 89,919 0.07 101 0.03 58,108 0.04

Insurance

Companies 12 0.00 7,381,023 5.93 24 0.01 7,772,423 6.25

Foreign Investors

FIIs 171 0.06 11,647,362 9.36 144 0.05 9,327,078 7.50

GDRs 1 0.00 422,044 0.34 2 0.00 732,132 0.59

NRIs/OCBs 3,509 1.21 728,504 0.58 3,442 1.21 805,924 0.65

Corporates 2,244 0.77 16,931,156 13.60 2,413 0.85 17,937,048 14.42

Others 284,809 97.91 18,841,033 15.14 278,796 97.83 20,195,856 16.23

Total 290,893 100.00 124,485,879 100.00 284,979 100.00 124,398,621 100.00



41

19. Plant Locations :

Andhra Pradesh Awarpur Gujarat

Cement Works Cement Works Cement WorksBhogasamudram, P.O. Awarpur Cement Project P.O. Kovaya - 365541,

Tadipatri Mandal, Taluka : Korpana, Taluka - Rajula,

Anantapur District, Dist. Chandrapur Dist. Amreli,

Andhra Pradesh 515 415 Maharashtra 442 917 Gujarat

Tel: 08558 - 288847/41 Tel: 07173-266323 Tel: 02794 - 283034

Fax: 08558-288821/31 Fax: 07173-266339 Fax:02794 - 283036

Hirmi Jafrabad Arakkonam

Cement Works Cement Works Cement Works

Post Hirmi P. B. No. 10, Chitteri Village,

Taluka Simga, Dist. Raipur, Village:Babarkot, District Vellore,

Chhattisgarh Taluka:Jafrabad Arakkonam 631 003,Pin 493 195 Dist.Amreli,Gujarat 365 540 Tamil Nadu

Tel: 07726-281269 Tel:02794-245103 Tel: 04177 - 293291

Fax: 07726-281268 Fax: 02794-245110

Jharsuguda Cement Works Magdalla Cement Works Ratnagiri Cement Works

Near Dhutra Railway Station, Near Magdalla Port, MIDC Industrial Estate,

P.O. Arda 768 202 Dumas Road Zadgaon Block, Ratnagiri,

Dist. Jharsuguda, Orissa Surat, Gujarat 395 007 Maharashtra 415 639

Tel: 06645-283161 Tel:0261-2725175 Tel:02352-223679

Fax:06645-283108 Fax: 0261-2726952 Fax: 02352-221807

West Bengal Cement Works

Near EPIP Plot, Muchipara,Post: Rajbandh, Durgapur

Pin - 713 212

Tel: 0343-2533029

Fax:0343-2533358

20. Investor Correspondence:

Registered Office: Registrar & Transfer Agent:

'B' Wing, Ahura Centre Sharepro Services (India) Private Limited

2nd Floor, Mahakali Caves Road, Satam Estate, 3rd floor, Above Bank of Baroda,

Andheri (East), Mumbai 400 093 Cardinal Gracious Road, Chakala

Tel: (022) 66917800 Andheri (East), Mumbai 400099

Fax: (022) 66928109 Tel: (022) - 28215168 / 28348218Email: [email protected]; Fax: (022) - 2837 5646

[email protected] Email: [email protected]

In terms of SEBI Circular MIRSD/DPS III//Cir-01/07 dated 22nd January, 2007, your Company has designated

[email protected] as the exclusive e-mail ID for redressel of investor complaints. This email ID is

also displayed on your Company's website www.ultratechcement.com.



42

21. Per Share Data :

2006-07 2005-06

Net Earning (Rs. Crs.) 782.28 229.76

Cash Earning (Rs. Crs.) 991.83 441.04

EPS (Rs.) 62.84 18.46

EPS Growth (%) 240% 7926 %

CEPS (Rs.) 79.67 35.43

Dividend Per Share (Rs.) 4.00 1.75

Dividend Payout (%) 40% 17.50 %

Book Value Per Share (Rs.) 141.69 83.40

Price to Earning* 12.26 37.68

Price to Cash Earnings* 9.67 19.32

Price to Book Value* 5.44 8.21

* Based on Stock Price as on 31st March

22. OTHER USEFUL INFORMATION FOR SHAREHOLDERS

Unpaid/Unclaimed Dividends

Dividend warrants in respect of the year ended 31st March, 2006, warrants in respect of

interim dividend declared in March, 2007 and warrants in respect of fractional entitlement

to shareholders of the erstwhile Narmada Cement Company Limited have been despatched

to the shareholders at the addresses registered with your Company. Those shareholders

who have not yet received the dividend / fractional entitlement warrants may please write

to the Company or its RTA 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 its RTA.

ECS Facility

The Company provides 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 which can be downloaded from the

Company’s website.

Share Transfer / Dematerialisation

1. Share transfer requests are acted upon within 12 days from the date of their receipt at

the Company or its RTA. 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 RTA with full details so that necessary action can 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 at the Company or its RTA.



43

3. Equity Shares of the Company are under compulsory demat trading by all investors.

Considering the advantages of scripless trading, shareholders are requested to consider

dematerialisation of their shareholding so as to avoid inconvenience in future.4. The equity shares of the Company have been admitted with the National Securities

Depository Limited (NSDL) and Central Depository Services (India) 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 correspondences

regarding shares and debentures of the Company should be addressed to the Company or

its RTA.

Non-Resident Shareholders

Non-resident shareholders 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 (DP). The Company will not entertain any request for

change of bank details printed on the 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 the Company,

change in their address / pin code number and Bank Account details promptly bywritten request under the signature(s) of sole / first joint holder. Beneficial Owner(s) 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, shareholders are requested to

provide their Bank Account Details (if not provided earlier) to the Company or its RTA

(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.



44

AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

To the Members of

UltraTech Cement Limited

We have examined the compliance of the conditions of Corporate Governance by

UltraTech Cement Limited for the year ended on March 31, 2007, 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 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 tous, 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: 4th May 2007

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 sharecertificates 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 RTA or download the same from the Company’ website.

9. Shareholders are requested to give us their valuable suggestions for improvement of

our investor services.



45

S O C I A L R E P O R T

Beyond Business

Transcending business, we reach out to the weaker sections of society residing near our Units.

We believe it is our collective responsibility to narrow the inequities that exist in our country.

Our social projects therefore address issues of deep relevance to human society, such as

poverty alleviation through sustainable development and livelihood processes, healthcare,

education, societal change and infrastructure development.

Your Company’s social projects are carried out under the aegis of the Aditya Birla Centre for

Community Initiatives and Rural Development, led by Mrs. Rajashree Birla, your Director.

For the year 2006-07 we have made significant progress. A summary:

In Health Care:

Medical camps were conducted across your Company’s Units, wherein the villagers were

examined and provided the necessary treatment. Emphasis is given on preventive healthcare through vaccinations and awareness on proper nutrition. Curative services are provided

for cataract, tuberculosis, malaria and dental

problems.

Pre and post natal care for women were

done through doorsteps services and the

concept of planned families promoted.

An intensive programme on child health

through village and school checkups are of

special mention.

AIDS awareness camps were conducted tobuild greater awareness amongst students

and the people amidst whom we work.

Some of the other core areas of work conducted were - Pulse polio programme and

provision of safe drinking water.

“Our vision 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.” – Mrs. Rajashree Birla

Education:

Nurturing the child through preschool education in the form of Balwadis, Bal Sanskar

Kendras, harnessing talent through merit scholarships (mostly girl students), enrollment

drives through campaigns, minimising the drop out rate by counseling parents, conducting

adult literacy classes are our main activities in the field of education.

Children and adults in the host communities have enrolled in the Balwadis, Bal Sanskar

Kendras and Adult literacy camps.

Polio Immunisation centre



46

Merit Scholarships to motivate excellence were awarded to students.

To enhance the capacity of the learners, we organise vocational training for the youth and

neo literates.

Sustainable Livelihood:

Agriculture – farmers benefit through farm-based programmes, farmer training, nursery

raising, seed multiplication and intercropping.

Cattle were immunised in animal husbandry camps.

Water harvesting structures, such as hand-pumps installation, erecting check-dams, ponds,

roof-water harvesting and digging wells support families in the host communities.

Women Self-Help Groups:

Organising women to form small thriftand credit groups and training them for

micro-finance activities has brought

about visible change in the state of the

families. Self Help Groups have

enabled the empowerment of women

living in villages surrounding your

Company’s Units.

Women were given training in income

generation activities like tailoring,

incense sticks making, weaving,

mushroom cultivation and bee keeping.Most of them are self employed today and invoke a culture of entrepreneurship and

women empowerment.

Social Welfare:

To support the weaker sections of the society particularly the scheduled castes and tribes,

organising of mass marriage programmes, awareness programmes against prevailing social

evils are organised. Orientation programmes on Panchayati Raj, Government Schemes,

Right to Information and Consumer Rights are organised to empower the poor.

Infrastructure:

Infrastructure development is supported by your Company through the construction andrepair of approach roads, setting up troughs and drinking water structures, health centres

and facilities for the under-served communities, including construction of low cost toilets.

In our own humble way we try to make a difference. At the end of the day we fully realise that

even though we work in around 3,700 villages at the Group level, so much more needs to be

done, given that we are a nation of over 6 lac villages.

Women self-help activity



47

E N V I R O N M E N T R E P O R T

Your Company subscribes to triple-bottom line accountability wherein social, economic and

environmental responsibility is an intrinsic part of our business growth and performance.

At all of your Company’s Units, clean technologies and processes that combine both economic

progress and sustainable environment are adopted. Most of your Company’s Units are ISO

14001 Environment Management Systems Certified and adhere to OHSAS 18001 standards.

During the year, the Cement Business of the Aditya Birla Group, of which your Company

forms a part, became a participating member of the Cement Sustainability Initiative (CSI).

CSI is a program of the World Business Council for Sustainable Development (WBCSD). The

agenda of the WBCSD focuses on six critical issues:

• Climate protection and CO2

management

• Responsible use of fuels and materials

• Employee health and safety

• Emission reduction

• Local impact on land and communities

• Reporting and communications

As a participating member of the CSI, your Company will have to fulfill guidelines set by

CSI, report on defined Key Performance Indicators on the six major initiatives annually and

also fix targets for improvement.

You will be glad to know that your Company is one of the few cement companies in the world

to be awarded Certified Emission Reduction Credits (CERs) by the United Nations Framework



48

Convention for Climate Change (UNFCCC) under the Clean Development Mechanism (CDM)

as per Kyoto Protocol.104,603 CERs were awarded for the CDM Project on Optimum Utilisation

of Clinker by Production of Pozzolona Cement at your Company’s Unit in Andhra Pradesh forthe period 1st April, 2000 to 31st March, 2006. Your Company also commissioned a 4 MW

power generation unit utilising Cooler Waste gases at its Unit in Andhra Pradesh. This is the

second such installation in a cement plant in the world and the first in India. Several other

CDM Projects are under various stages of implementation.

Whitehoppleman, an independent UK based consulting organisation conducts annual global

benchmarking surveys for the cement industry. An assessment of your Company’s performance

on sustainability issues vis-a-vis the findings of the surveys indicate that your Company

compares favourably with the best globally, on a continuos basis.

Alongside, educating and sensitising all of our stakeholders on the need to conserve natural

resources is an ongoing process. We solicit suggestions from all our stakeholders, includingemployees at all levels, on how to better our environment protection measures.

Your Directors and your Company’s employees are totally committed to sustainable

development. Their commitment is visible in the green look that the Units sport and heard in

the chirping of the winged guests at the crack of dawn.

Green surroundings at Andhra Pradesh Cement Works (APCW)



49

Dear Shareholders,

We are pleased to present the Seventh Annual Report together with the Audited Accounts of your Company for the financial year ended 31st March, 2007:

FINANCIAL RESULTS

(Rs. in crores)

2006-07 2005-06

Gross Turnover 5,484.35 3,785.29

Gross Profit 1,392.44 501.62

Less: Depreciation 226.25 216.03

Profit before Tax 1,166.19 285.59

Tax expenses 383.91 55.83

Profit after tax 782.28 229.76

Add:Balance brought forward from Previous Year 180.57 10.11

Surplus available for Appropriation 962.85 239.87

Appropriation:

Debenture Redemption Reserve 30.92 9.45

General Reserve 100.00 25.00

Dividend 49.79 21.79

Corporate Tax on Dividend 6.98 3.06

Balance transferred to Balance Sheet 775.16 180.57

[The figures for the previous year (2005-06) include those of the erstwhile Narmada Cement Company Limited

for the period 1st October, 2005 to 31st March, 2006 and therefore the accounts for the year under review

(2006-07) are not comparable with the previous year]

OVERVIEW

Your Company’s turnover at Rs.5,484.35 crores was up by 45% compared to Rs.3,785.29crores achieved in the previous year. After providing for Depreciation - Rs. 226.25 crores(Rs. 216.03 crores) and Tax - Rs. 383.91 crores (Rs.55.83 crores) the Profit After Tax stood atRs.782.28 crores (Rs.229.76 crores).

DIVIDENDDuring the year, your Company paid an interim dividend of Rs.4 per equity share of Rs.10each. The total pay-out on account of dividend was Rs.56.77 crores (including dividend tax of Rs.6.98 crores) compared to Rs.24.85 crores in the previous year. Considering the growthplans of your Company and the need to plough back profits for its proposed capital expenditure,the Directors have recommended that interim dividend be treated as final dividend.

D I R E C T O R S ’ R E P O R T T O T H E S H A R E H O L D E R S



50

REVIEW OF OPERATIONS

The year under review witnessed improved performance, driven by higher market realisation,enhanced capacity utilisation and greater volumes.

Average realisation improved by 29% from Rs.2,122 per MT in FY06 to Rs.2,735 per MT inFY07. Cement production was 14.64 MMT as compared to 13.33 MMT in the previous year.Effective capacity utilisation (cement produced + clinker sold) was 101% compared to 89 %during the previous year. Aggregate sales volume at 17.67 MMT (15.55 MMT) was higher by13.63%. Domestic sales volume which constituted around 80 % of the aggregate sales volumerose from 12.97 MMT in FY06 to 14.21 MMT in FY07, while aggregate exports grew from2.58 MMT in FY06 to 3.46 MMT in FY07.

CAPITAL EXPENDITURE

Your Company is setting up captive power plants at its Units in Andhra Pradesh, Chattisgarhand Gujarat. The power plant in Andhra Pradesh will be commissioned in the last quarter of FY08 and the one in Chattisgarh in the first quarter of FY09. The power plant in Gujaratwill be commissioned in a phased manner, commencing from the last quarter of FY08 andending in the second quarter of FY09. These power plants will meet around 80% of yourCompany’s power requirement. It will also reduce your Company’s dependence on the StateGrid, supply power at economical rates, thereby reducing the cost of power.

The capacity at your Company’s Unit in Andhra Pradesh is being augmented by 4 mtpatogether with a grinding Unit in Karnataka. Expected to be commissioned in March, 2008, thiswill help your Company cater to the growing demand in the markets of South India.

EMPLOYEE STOCK OPTION SCHEME

At a meeting held on 7th December, 2006, the Board of Directors approved the formulation of an Employee Stock Option Scheme (the Scheme) in terms of the Securities andExchange Board of India (Employee Stock Option Scheme and Employee Stock PurchaseScheme) Guidelines, 1999. A Committee was also constituted for implementing andadministering the Scheme. Members of your Company have approved formulating theScheme by way of resolutions passed through Postal Ballot, results of which were announcedon 17th January, 2007.

In terms of the Scheme a total of 375,000 options would be available for being granted toeligible employees of your Company. Each option is convertible into one equity share of Rs.10 each representing 0.30 % of the paid-up equity share capital of your Company.

AWARDS

Your Company was the recipient of the following awards during the year:

• Recipient of the Top Exporter Award from CAPEXIL for the tenth consecutive year

• Safety Management - Silver Award from Greentech Foundation, New Delhi to GCW



51

• Best Limestone Mines in Saurashtra region for Cement from Indian Bureau of Mines toGCW (Kovaya mines)

• Second prize for overall performance in mines safety week from Directorate General of Mines Safety to GCW (Kovaya mines)

• Innovative Award for Clinker Cooler Waste Heat Recovery Power Project from CII, SouthernRegion to APCW

• Quality control laboratory accreditation by National Accreditation Board for Laboratories(NABL) for chemical and mechanical testing under ISO/IEC: 17025:2005 to APCW.

RESEARCH AND DEVELOPMENT

Your Company continued its efforts towards maximising waste utilisation, search for alternativesources of fuel and chemical and mineral evaluation of captive limestone mines. These measures

will aid in conserving natural resources.HUMAN RESOURCES

As perhaps many of you may be aware, the Aditya Birla Group has been judged as“The Best Employer of India (2007)” and among the Top 20 in Asia by the Hewitt EconomicTimes Study and the Hewitt Wall Street Journal Study respectively. While this is a matter of great pride, it is also validation of the exemplary people processes that go into the makingof a meritocratic organisation like our Group.These people processes are applied universallyto all of the Group Companies across the five continents and your Company is a beneficiaryas well.

Your Company has an enviable track record of managing its intellectual capital successfully.

Fostering people development and harnessing their creative potential to the maximum,identifying and grooming management talent and leadership development at all levels remaina priority.

Executives from your Company participated in Competency Honing and LeadershipDevelopment Programmes at Gyanodaya, your Company’s globally benchmarkable Instituteof Management Learning. Management moves across levels to the different Companies andsectors helped spawn leaders.

Introducing global HR practices, systems and best practices in the areas of talent development,compensation management, recruitment etc., is enabling and preparing us to address futurechallenges effectively. Implementation of People Soft systems, Variable Pay plan and JobBanding are the major initiatives taken in this direction.

In the recently concluded Organisational Health Study, an overwhelming majority of yourCompany’s employees felt happy at work and found it a professionally rewarding and personallysatisfying experience. They said that they would advocate your Company to potential recruitsand looked forward to continue with your Company long term.

The Group’s Corporate Human Resources have played and continue to play a critical role.



52

CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices.Your Company adheres to all the major stipulations laid down in this regard, as provided inClause 49 of the Listing Agreement with the Stock Exchanges which relates to corporategovernance.

A separate section on Corporate Governance together with a certificate from your Company’sStatutory Auditors forms a part of this Report.

SUBSIDIARY COMPANIES

In terms of Section 212 of the Companies Act, 1956, the Accounts alongwith the Report of Directorsand the Auditors’ Report of your Company’s subsidiaries viz. Dakshin Cements Limited (Dakshin)and UltraTech Ceylinco (Private) Limited (UltraTech Ceylinco) are annexed to this Report.

In line with the provisions of Accounting Standard 21 (AS 21) and Clause 32 of the ListingAgreement, the duly audited Consolidated Financial Statement has been prepared after consideringthe financial statements of your Company’s subsidiaries viz. Dakshin and UltraTech Ceylinco.

FINANCE

CRISIL has re-affirmed the AA+ rating for your Company.

Your Company has raised long term foreign currency loan in the form of External CommercialBorrowings aggregating to US$ 40 million (Rs.177 crores). The proceeds from this borrowingwill be utilised for the ongoing CAPEX plans of your Company.

Your Company has repaid debentures amounting to Rs. 76 crores. Effective working capitalmanagement resulted in interest costs coming down to Rs. 87 crores as compared to

Rs. 90 crores during the previous year.Your Company has not invited or renewed deposits from the public/shareholders in accordancewith Section 58A of the Companies Act, 1956.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption and foreign exchange earningsand outgo, required to be disclosed pursuant to Section 217(1)(e) of the Companies Act, 1956,read with the Companies (Disclosure of Particulars in the Report of the Board of Directors)Rules, 1988 is annexed hereto as Annexure I and forms part of this Report.

PARTICULARS OF EMPLOYEES

The particulars of employees as required under Section 217(2A) of the Companies Act, 1956read with Companies (Particulars of Employees) Rules, 1975 is annexed hereto as Annexure IIand forms part of this Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

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



53

the form and substance of transactions carried out during the year under review and reasonablypresent your Company’s financial condition and results of operations.

Your Directors confirm that:

(i) in the preparation of the Annual Accounts, applicable accounting standards have beenfollowed alongwith proper explanations relating to material departures, if any;

(ii) the accounting policies selected have been applied consistently and judgements andestimates are made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2007 and of the profit of yourCompany for the year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguardingthe assets of your Company and for preventing and detecting frauds and otherirregularities;

(iv) the Annual Accounts of your Company have been prepared on a going concern basis.

DIRECTORS

Mr. S. Misra, Manager & CEO of your Company was inducted into the Board as AdditionalDirector and appointed Managing Director with effect from 16th October, 2006. Members of your Company have conveyed their approval for the appointment of Mr.Misra as ManagingDirector through postal ballot, results of which were announced on 17th January, 2007. Uponhis appointment as Managing Director, Mr.Misra has relinquished office as Manager of yourCompany.

Mr. N.J. Jhaveri was appointed as an Additional Director of your Company with effect from16th October, 2006.

Notices pursuant to Section 257 of the Companies Act, 1956 have been received from Membersproposing the above appointments as Director of your Company.

Mr. Y.P. Gupta resigned from the Board with effect from 16th October, 2006. The Boardacknowledges the services rendered by Mr.Gupta during his tenure as Director.

Mr. J.P. Nayak, Mr. Y.M. Deosthalee and Mr. Kumar Mangalam Birla retire from office byrotation and being eligible, offer themselves for re-appointment.

A brief resume of the Directors being appointed / re-appointed are attached to the Notice forthe ensuing Annual General Meeting.

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 Companyfrom the conclusion of the previous Annual General Meeting until the conclusion of theensuing Annual General Meeting. M/s. S.B.Billimoria & Co., have expressed their inability to



54

be re-appointed as Auditors of your Company. It is therefore proposed to appoint M/s. DeloitteHaskins & Sells, Chartered Accountants, Mumbai as Joint Statutory Auditors and re-appoint

M/s G.P. Kapadia & Co., Chartered Accountants, Mumbai, both of whom are eligible forappointment / re-appointment respectively.

Based on the recommendation of the Audit Committee, the Board proposes the appointment of M/s Deloitte Haskins & Sells, Chartered Accountants, Mumbai and the re-appointment of M/s G.P. Kapadia & Co., Chartered Accountants, Mumbai as Joint Statutory Auditors of yourCompany from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting. Your Board also proposes the re-appointment of M/s. Haribhakti & Co., Chartered Accountants, Mumbai as the Branch Auditors of yourCompany’s Units at Jafrabad and Magdala in Gujarat and Ratnagiri in Maharashtra, to holdoffice from the conclusion of the ensuing Annual General Meeting until the conclusion of thenext Annual General Meeting.

Pursuant to the provisions of the Companies Act,1956, your approval is also being sought forappointing Branch Auditors in consultation with your Company’s Statutory Auditors, for anyother Branch / Unit which may be opened / acquired in the future, in India or abroad.

Resolutions seeking your approval for these issues are included in the Notice convening theAnnual General Meeting.

The observations made in the Auditors’ Report are self-explanatory and therefore, do not callfor any further comments under Section 217(3) of the Companies Act,1956.

COST AUDITOR

Pursuant to the provisions of Section 233B of the Companies Act, 1956, your Directors haveappointed 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, 2008, subject to theapproval of the Central Government.

APPRECIATION

Your Directors wish to place on record their appreciation of the dedication and commitment of your Company’s employees to the growth of your Company. Their unstinted support has beenand continues to be integral to your Company’s ongoing success.

Your Directors wish to thank the Central and State Governments, banks, financial institutions,shareholders and business associates for their continued co-operation and support.

For and on behalf of the Board

Mumbai Kumar Mangalam Birla21st April, 2007 Chairman



55

A N N E X U R E I

DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

AND OUTGO AS REQUIRED UNDER COMPANIES (DISCLOSURE OFPARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

A. CONSERVATION OF ENERGY:

a) Energy Conservation Measures taken

— Installation of Variable Speed Drives

— Water Injection in Top stage cyclones

— Replacement of Preheater fans with energy saving fans

— Usage of Humicool fills for P&V system

b) Additional investments and proposals, if any, being implemented for reduction of

consumption of energy

— Installation of Variable Frequency Drives

— DG waste heat recovery system for Production of Desalinated Water

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 andcorresponding reduction in the cost of production.

d) Total energy consumption and energy consumption per unit of production as perFORM-A of this Annexure.

B. TECHNOLOGY ABSORPTION:

Efforts made in technology absorption as per FORM-B of this Annexure.

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.



56

FORM-A

(See Rule 2)

Form for disclosure of particulars with respect to conservation of energyA. POWER AND FUEL CONSUMPTION

Current Year Previous Year2006-07 2005-06

1. Electricity(a) Purchased

Units 000 Kwh 847582 423050Total Amount Rs. crores 405.70 169.64Rate/unit Rs. 4.79 4.01

(b) Own generation**(i) Through Diesel generator

Units 000 Kwh 188908 305267Units(Kwh) per Ltr. of fuel oil 4.03 4.15Cost/Unit Rs. 4.91 4.27

(ii) Through Steam Turbine/GeneratorUnits 000 Kwh 309571 256036

Units(Kwh) per kg of coal 0.73 0.76Cost/Unit Rs. 1.40 1.41(iii) Through Steam Turbine/Generator

Units 000 Kwh 64249 292707Units(Kwh) per kg of Naphtha 4.73 4.89Cost/Unit Rs. 7.40 5.28

(iv) Waste Heat Recovery systemUnits 000 Kwh 477.05 —Cost/Unit Rs. 0.250 —

2. Coal (Slack,Steam & ROM including lighting Coal)For Co-generation of Steam & Power Tonnes 425246 335008Total Cost Rs. crores 35.23 29.36Average rate Rs./Tonnes 828 876For Process in Cement PlantsQuantity Tonnes 1991666 1981134Total Cost Rs. crores 543.99 407.98Average rate Rs./Tonnes 2731 2059

3. Furnace Oil (Including Naphtha)Quantity K. Ltrs 66184 159240Total amount Rs. crores 122.70 256.82Average rate Rs./K ltr 18539 16128

4. Light Diesel Oil (LDO)Quantity K. Ltrs 1430.87 1508Total amount Rs. crores 4.24 4.03Average rate Rs./K ltr 29626 26710

5. High Speed Diesel Oil (HSD)Quantity K. Ltrs 265 288Total amount Rs. crores 0.95 0.89Average rate Rs./K ltr 35661 31004

B. CONSUMPTION PER UNIT OF PRODUCTIONElectricity # Kwh /T of Cement 86.93 88.70Furnace oil $ Ltr /T of Clinker 0.10 0.11Coal Kcal /T of Clinker 707 703

** Excludes Auxillary & Wheeling# Excludes non production power consumption

(The figures for the previous year include those of NCCL for the period 1st October, 2005 to 31st March, 2006 and are

therefore not comparable with the current year figures)

$ Furnace oil used for kiln light up



57

FORM - B

(See Rule 2)

Form for disclosure of particulars with respect to absorptionRESEARCH AND DEVELOPMENT (R&D)

1. Specific areas in which R&D carried out by the Company

Evaluation of use of :

• Mineralisers

• Use of Performance improver to enhance Quality

• Increased use of Fly Ash Content in PPC without affecting quality

• Use of CFD technique for optimising Plant operations

2. Benefits derived as a result of the above R&D

The above initiatives have resulted in increase in production, energy conservation and reduction in relativecost of production

3. Future plan of action

• Commercialisation of alternative fuels

• Optimisation of chemistry of raw mix

• Product development aimed at different customer segments

(Rs. in crores)

4. Expenditure on R&D 2006-07 2005-06

a. Capital Expenditure 1.12 0.58

b. Recurring Expenditure 4.90 5.18

c. Total Expenditure 6.03 5.76

d. Total R& D Expenditure as % of turnover 0.12 0.15

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts in brief, made towards technology absorption, adaptation and innovation:

• Participation in national and international conferences

• Imparting training to personnel in various manufacturing techniques by foreign and Indian expertsand technology suppliers

• Commissioned Waste Heat Recovery power generation system utilising techonology from Israel

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

• Power Recovery from Waste heat and reduction in power cost

3. Information regarding technology imported during the last 5 years : Nil



59

A U D I T O R S ’ R E P O R T

TO THE MEMBERS OF ULTRATECH CEMENT LIMITED

1. We have audited the attached Balance Sheet of UltraTech Cement Limited as at31st March, 2007, 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 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 (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 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 it appears from our examination of those books and proper returns

adequate for the purpose of our audit have been received from the branches not visited

by us;

(c) the reports of the auditors of the branches have been submitted to us and the same have

been considered by us in preparing this report;

(d) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt

with by this report are in agreement with the books of account and with the audited

returns received from the branches;

(e) 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;

(f) in our opinion and to the best of our information and according to the explanationsgiven 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, 2007;



60

(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, 2007 taken

on record by the Board of Directors, we report that none of the directors is disqualified as

on 31st March, 2007 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

UDAYAN SEN ATUL B. DESAI

Partner Partner

(Membership No.31220) (Membership No.30850)

Mumbai, 21st April, 2007

A U D I T O R S ’ R E P O R T



61

(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 granted

or taken secured or unsecured loans to/from companies, firms or other parties covered in

the Register maintained under Section 301 of the Companies Act, 1956. Accordingly

clauses (iii) (b) to (d), (f) and (g) of CARO are not applicable.

(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 purchase of inventory and fixed assets and for the sale of

goods and services. 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 explanationsgiven 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.

(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.

A N N E X U R E T O T H E A U D I T O R S ’ R E P O R T



62

(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, 2007 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 31 st March, 2007 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)

Income Tax Act Income Tax 3.58 2004-2006 Appellate Authorities

0.09 2005-2006 Assessing Officers

Value Added Tax Act Value Added Tax 0.78 2005-2006 High Court

and penalty

Sales Tax Act Sales Tax and interest 1.37 1997-1998, High Court

1999-2002

39.62 1985-2004 Tribunal (s)5.59 1998-2001, Appellate Authorities

2002-2004

3.03 1998-2004 Assessing Officers




63

Central Excise Act Excise Duty, penalty 0.10 1994-1995 Supreme Court

and interest 3.34 1997-1999 High Court

14.05 1994-1997, Tribunal (s)

1998-2005,

2006-2007

4.18 1994-2006 Appellate Authorities

0.53 2001-2004, Assessing Officers

2006-2007

Service Tax Act Service Tax 1.08 2005-2006 Tribunal (s)

0.55 2003-2006 Appellate Authorities

Customs Act Custom Duty and 0.11 2001-2002 Supreme Court

penalty 0.08 2006-2007 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.

(xii) In our opinion and according to the information and explanations given to us, the Company

has not given guarantees for loans taken by others from a bank or financial institution.

(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 wereobtained, 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 explanations 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.




Partner Partner

(Membership No.31220) (Membership No.30850)

Mumbai, 21st April, 2007

Name of statute Nature of the dues Amount Period to which Forum where dispute

(Rs in Crs.) the amount relates is pending

(Assessment Years)




64

Rs. in CroresAs at

Schedules March 31, 2006

SOURCES OF FUNDSShareholders’ FundsShare Capital 1A 124.49 124.40Share Capital Suspense 1B — 0.09Reserves and Surplus 2 1,639.29 913.78

1,763.78 1,038.27Loan FundsSecured Loans 3 1,151.25 1,221.93Unsecured Loans 4 427.38 229.90

1,578.63 1,451.83Deferred Tax Liabilities 560.26 576.96

TOTAL 3,902.67 3,067.06

APPLICATION OF FUNDSFixed AssetsGross Block 5 4,784.70 4,605.38Less: Depreciation 2,267.42 2,068.21

Net Block 2,517.28 2,537.17Capital Work-in-Progress 696.95 141.03

3,214.23 2,678.20Investments 6 483.45 172.39Current Assets, Loans and AdvancesInventories 7 433.58 379.57Sundry Debtors 8 183.50 172.55Cash and Bank Balances 9 89.59 61.60Loans and Advances 10 253.50 158.80

960.17 772.52

Less:Current Liabilities & ProvisionsCurrent Liabilities 11 736.71 516.87Provisions 12 18.47 39.18

755.18 556.05

Net Current Assets 204.99 216.47

TOTAL 3,902.67 3,067.06

Accounting Policies and Notes on Accounts 21 & 22

BALANCE SHEET AS AT MARCH 31 , 2007

In terms of our report attached. KUMAR MANGALAM BIRLAChairman

For S. B. BILLIMORIA & CO. For G. P. KAPADIA & CO. S. MISRA RAJASHREE BIRLAChartered Accountants Chartered Accountants Managing Director R. C. BHARGAVA

G. M. DAVEN. J. JHAVERI

UDAYAN SEN ATUL B. DESAI K. C. BIRLA S. MISRAPartner Partner Executive President & CFO V. T. MOORTHY

J. P. NAYAKS. RAJGOPAL

S. K. CHATTERJEE D. D. RATHIMumbai, April 21, 2007 Company Secretary Directors



65

Rs. in CroresPrevious

Schedules Year

INCOMEGross Sales 5,484.35 3,785.29Less: Excise Duty 573.52 485.84

Net Sales 4,910.83 3,299.45Interest & Dividend Income 13 29.82 6.99Other Income 14 31.64 30.01Increase / (Decrease) in Stocks 15 (32.54) 39.12

4,939.75 3,375.57

EXPENDITURERaw Materials Consumed 16 392.99 284.11Manufacturing Expenses 17 1,518.58 1,203.29Purchase of Finished Products 182.43 265.32Payments to and Provisions for Employees 18 117.22 92.26Selling, Distribution, Administration andOther Expenses 19 1,249.26 939.33

Interest 20 86.83 89.64Depreciation and Obsolescence 226.25 216.03

3,773.56 3,089.98

Profit Before Tax Expenses 1,166.19 285.59Income Tax Expenses

Provision for Current Tax {(including provisionfor Wealth Tax Rs. 0.11 Crore (Previous year 396.00 57.00Rs. 0.07 Crore) and Interest of Rs. 0.62 Crore(Previous Year Rs. 0.35 Crore)}Deferred Tax (16.70) (4.75)Provision for Fringe Benefit Tax 4.61 3.58

Profit After Tax 782.28 229.76Balance brought forward from Previous Year 180.57 10.11

Profit Available for Appropriation 962.85 239.87

AppropriationsInterim Dividend paid 49.79 —Proposed Dividend — 21.79Corporate Dividend Tax 6.98 3.06Debenture Redemption Reserve 30.92 9.45General Reserve 100.00 25.00Balance carried to Balance Sheet 775.16 180.57

962.85 239.87

Basic and Diluted Earnings Per Equity Share (in Rs.) 62.84 18.46Face Value Per Equity Share (in Rs.) 10.00 10.00Weighted Average Number of Equity Shares (in Nos.) 124,485,879 124,485,879Accounting Policies and Notes on Accounts 21 & 22

PROF I T AND LOSS ACCOUNT FOR T HE YEAR ENDED MARCH 31 , 2007









66

Rs. in CroresA Cash Flow from Operating Activities: March 31, 2007 March 31, 2006

Profit Before Tax 1,166.19 285.59Adjustments for:Depreciation 226.25 216.03Provision for Doubtful Debts and Advances / (Written back) — (2.81)Bad Debts Written-off 0.76 0.17Provision for Retirement Benefits 4.72 2.45Provision for Mines Reclamation 1.64 —Interest & Dividend Income (29.82) (6.99)Interest Expense 86.83 89.64Unrealised Foreign Exchange (Gain)/Loss (2.29) 0.79(Profit)/ Loss on Sale of Fixed Assets 0.05 (0.21)(Profit)/ Loss on Sale of Investment (0.26) (0.08)

Operating Profit Before Working Capital Changes 1,454.07 587.39Adjustments for:(Increase)/decrease in Inventories (54.01) (43.05)(Increase)/decrease in Sundry Debtors (11.71) (11.92)(Increase)/decrease in Loans and Advances (80.29) 10.78Increase/(decrease) in Trade Payables and other Liabilities 222.27 63.35

Cash Generated from Operations 1,530.33 606.55Current Taxes Paid (412.63) (51.89)Fringe Benefit Tax Paid (4.61) (3.03)

Net Cash from Operating Activities 1,113.09 551.63

B Cash Flow from Investing Activities:Purchase of Fixed Assets (765.68) (217.29)Sale of Fixed Assets 0.41 1.13(Increase) / decrease in Current Investments (311.00) (148.00)Profit on Sale of Investments 0.26 0.08Interest and Dividend Received 29.76 6.84

Net Cash used in Investing Activities (1,046.25) (357.24)

C Cash Flow from Financing Activities:Repayment of Long Term Borrowings (76.00) (167.33)Proceeds from Long Term Borrowings 200.43 217.15Repayment of Short Term Borrowings (Net) 6.76 (137.86)Interest paid (88.41) (92.32)Dividend Paid (71.58) (9.33)Corporate Dividend Tax (10.04) (1.33)

Net Cash used in Financing Activities (38.84) (191.02)

Net Increase in Cash and Cash Equivalents (A + B + C) 27.99 3.37Cash and Cash Equivalents at the Beginning of the Year 61.60 56.26Cash and Cash Equivalents transferred from NCCL as on 01.10.05 — 1.97Cash and Cash Equivalents at the End of the year 89.59 61.60

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 figure regrouped/ recasted wherever necessary.

CASH F LOW ST AT EMENT FOR T HE YEAR ENDED MARCH 31 , 2007

In terms of our report attached. KUMAR MANGALAM BIRLA

ChairmanFor S. B. BILLIMORIA & CO. For G. P. KAPADIA & CO. S. MISRA RAJASHREE BIRLAChartered Accountants Chartered Accountants Managing Director R. C. BHARGAVA







67


SCHEDULE 1A Year

SHARE CAPITALAuthorised130,000,000 Equity shares of Rs. 10 each 130.00 130.00

Issued, Subscribed and Paid -up 124.49 124.40124,485,879 Equity shares of Rs. 10 each fully paid-up. (Previous Year 124,398,621)

Of the above,(a) 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;

(b) 87,258 Equity shares of Rs 10 each issued as fully paid up havebeen allotted to shareholders of erstwhile Narmada CementCompany Limited (NCCL) pursuant to Scheme of Amalgamationwithout payment being received in cash. (Previous Year - NIL);

(c) 58,469,134 shares are held by Grasim Industries Limited(Holding Company), {Previous Year - 58,464,717} and

7,477,178 shares are held by Samruddhi Swastik Trading &Investment Limited (Subsidiary Company of Grasim IndustriesLimited), {Previous Year - 5,077,603}).

124.49 124.40

SCHEDULE 1BSHARE CAPITAL SUSPENSE

NIL Equity shares of Rs. 10 each to be issued as fully paid-up — 0.09pursuant to Scheme of Amalgamation without paymentbeing received in cash. (Previous Year 87,258)

— 0.09

SCHEDULE 2RESERVES & SURPLUS Rs. in Crores

Balance Additions Deduction/ Balance

as at during Adjustments as at31st the during 31st

March, 06 year the year March, 07

Capital Reserve 25.02 — — 25.02Cash Subsidy Reserve 0.10 — — 0.10Debenture Redemption Reserve 138.88 30.92 — 169.80General Reserve 569.21 100.00 — 669.21Surplus as per Profit & Loss Account 180.57 782.28 (187.69) 775.16

913.78 913.20 (187.69) 1,639.29

Previous Year 942.73 @ 30.35 (59.30) 913.78

@ Previous year’s additions figure include Rs. 233.86 crores loss transferred from NCCL on account of merger.

SCHEDULE 3

SECURED LOANSNon-Convertible Debentures (See Note B 5a) 943.40 1,018.55Loans from Banks:Cash Credits / Working Capital Borrowings from Banks Secured byHypothecation of Stocks and Book Debts of the Company 20.91 14.15Term Loans (See Note B 5b) 186.94 189.23

1,151.25 1,221.93

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68

Rs. in Crores

Previous

Year

SCHEDULE 4

UNSECURED LOANS

Term Loan from Bank 173.88 —

Sales Tax Deferment Loan 253.50 229.90

427.38 229.90

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

01.04.06 Adjustments 31.03.07 01.04.06 year Adjustments 31.03.07 31.03.07 31.03.06

Freehold Land 69.53 3.72 — 73.25 — — — — 73.25 69.53

Leasehold Land 20.09 0.20 — 20.29 5.02 0.55 — 5.57 14.72 15.07Buildings 468.56 15.62 — 484.18 138.05 14.51 — 1 52 .5 6 3 31 .6 2 330.51

Railway Sidings 159.66 — — 159.66 59.91 7.49 — 67.40 92.26 99.75

Plant & Machinery 3,719.35 176.08 22.95 3,872.48 1,749.58 188.21 16.43 1921.36 1,951.12 1,969.77

Furniture & Fixtures 77.85 8.54 3.27 83.12 44.42 5.99 3.03 47.38 35.74 33.43

Jetty 80.60 — — 80.60 65.41 1.75 — 67.16 13.44 15.19

Vehicles 9.74 2.67 1.29 11.12 5.82 1.07 0.90 5.99 5.13 3.92

Total 4,605.38 206.83 27.51 4,784.70 2,068.21 219.57 20.36 2,267.42 2,517.28 2,537.17

Previous Year 4,304.29 327.10 26.01 4 ,605.38 1 ,755.39 334.73 21.91 2 ,068.21

Add: Capital Work-in-progress 696.95 141.03

3,214.23 2,678.20

NOTES :Rs. in Crores

A) Depreciation for the year 219.57

Add: Obsolescence 6.70

Less: Depreciation transferred to Pre-operative Expenses (0.02)

Depreciation as per Profit & Loss Account 226.25

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. 123.84 Crores (Previous Year Rs. 123.64 Crores) not owned by theCompany.

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.

S C H E D U L E S



69


SCHEDULE 6 Year

INVESTMENTS - At CostLONG TERM

Government and Trust Securities -Unquoted — —(Rs. 10,000, Previous Year Rs. 10,000)Pledged as Security Deposit

Shares in Subsidiary Companies- UnquotedFully paid-up Equity Shares of Rs. 10 each

50,000 Dakshin Cements Limited (Previous Year - 50,000) 1.21 1.21

Fully paid-up Equity Shares of Sri Lankan Rupee 10 each40,000,000 UltraTech Ceylinco (Pvt.) Ltd.

(Previous Year 40,000,000) 23.03 23.03

24.24

24.24 24.24CURRENT - Unquoted

Units of Debt Schemes of Mutual Funds:Description No. of Face

Units Value Value

a) Liquid Scheme - Dividend Plan:

UTI Mutual Fund(Previous year 2,672,257 units) — 10 — 4.66

LIC Mutual Fund(Previous year 4,566,339 units) — 10 — 5.00

DSP Merill Lynch Mutual Fund(Previous year 80,602 units) — 1,000 — 8.06

Birla Sunlife Mutual Fund(Previous year 18,039,391 units) 24,001,347 10 24.00 18.07

Tata Mutual Fund

(Previous year 29,937 units) — 1,000 — 3.00Prudential ICICI Mutual Fund(Previous year 2,000,335 units) — 10 — 2.00

Kotak Mahindra Mutual Fund(Previous year 1,840,311 units) — 10 — 2.25

b) Fixed Maturity Plan - Dividend Plan:

Birla Sunlife Mutual Fund(Previous year 19,984,026 units) 54,941,544 10 54.99 20.00

UTI Mutual Fund(Previous year 15,047,759 units) 80,000,000 10 80.00 15.05

Prudential ICICI Mutual Fund(Previous year 10,017,937 units) 25,136,000 10 25.14 10.02

Kotak Mahindra Mutual Fund

(Previous year 10,000,000 units) 35,000,000 10 35.00 10.00HSBC Mutual Fund(Previous year 10,000,000 units) — 10 — 10.00

DSP Merill Lynch Mutual Fund(Previous year 10,000,000 units) — 10 — 10.00

Standard Chartered Mutual Fund(Previous year 10,038,500 units) 40,000,000 10 40.00 10.04

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70

LIC Mutual Fund(Previous year 10,000,000 units) 20,000,000 10 20.00 10.00

Tata Mutual Fund(Previous year 5,000,000 units) 15,000,000 10 15.00 5.00

ING Vysya Mutual Fund(Previous year 5,000,000 units) 10,000,000 10 10.00 5.00

Lotus Mutual Fund(Previous year NIL) 15,077,418 10 15.08 —

Deustche Mutual Fund(Previous year NIL) 5,000,000 10 5.00 —

Principal Mutual Fund(Previous year NIL) 15,000,000 10 15.00 —

Reliance Mutual Fund(Previous year NIL) 50,000,000 10 50.00 —

ABN Amro Mutual Fund(Previous year NIL) 10,000,000 10 10.00 —

c) Fixed Maturity Plan - Growth Plan:

Prudential ICICI Mutual Fund(Previous year NIL) 25,000,000 10 25.00 —

Birla Mutual Fund(Previous year NIL) 25,000,000 10 25.00 —

UTI Mutual Fund(Previous year NIL) 10,000,000 10 10.00 —

459.21 148.15

483.45 172.39

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 - 1,000,960,734; Deutsche Mutual Fund -201,116,354; DSP Merrill Lynch Mutual Fund - 1,217,157; Franklin Templeton Mutual Fund - 343,914;HDFC Mutual Fund - 85,906,135; HSBC Mutual Fund - 83,729,198; ING Vysya Mutual Fund - 29,985,607;JM Financial Mutual Fund - 4,991,764; Kotak Mahindra Mutual Fund - 149,450,855; LIC Mutual Fund -517,555,470; Lotus India Mutual Fund - 27,119,744; Principal Mutual Fund - 70,795,044; Prudential ICICIMutual Fund - 716,398,802; Reliance Mutual Fund - 147,153,503; SBI Mutual Fund - 17,358,416; StandardChartered Mutual Fund - 13,118,088; TATA Mutual Fund - 1,670,087; UTI Mutual Fund - 165,438,643.

(B) Floating Rate Schemes (Dividend Plan) - ABN AMRO Mutual Fund - 9,994,207.

(C) Short Term Schemes (Dividend Plan) - Birla Sunlife Mutual Fund - 19,011,706; DSP Merrill LynchMutual Fund - 14,727,464; Franklin Templeton Mutual Fund - 391,748; Principal Mutual Fund - 9,150,428;Prudential ICICI Mutual Fund - 27,041,875.

(D) Dynamic Bond Fund Schemes (Dividend Plan) - Kotak Mahindra Mutual Fund - 55,407,667.

(E) Fixed Maturity Plans (Dividend Plan) - ABN AMRO Mutual Fund - 80,000,000; Birla Sunlife MutualFund - 32,942,168; Deutsche Mutual Fund - 20,000,000; Kotak Mahindra Mutual Fund - 40,000,000; LICMutual Fund - 40,000,000; Principal Mutual Fund - 15,000,000; Prudential ICICI Mutual Fund - 20,000,000;Reliance Mutual Fund - 115,000,000; SBI Mutual Fund - 35,000,000; Standard Chartered Mutual Fund -30,000,000; UTI Mutual Fund - 60,000,000.

CURRENT - Unquoted (Continued)....Units of Debt Schemes of Mutual Funds:Description No. of Face

Units Value Value

S C H E D U L E S



71


SCHEDULE 7 Year

INVENTORIESStores & Spare parts, Packing Material, Fuels and Scrap 275.10 201.02Raw Materials 23.43 12.74Work-in-progress 75.60 105.97Finished Goods 59.45 59.84

433.58 379.57

SCHEDULE 8SUNDRY DEBTORSExceeding six months:Good and Secured 5.65 8.87Good and Unsecured 3.15 1.69Doubtful and Unsecured — 1.56

8.80 12.12

Less: Provision for Doubtful Debts — 1.568.80 10.56

Others:Good and Secured 107.37 89.56Good and Unsecured 67.33 72.43

174.70 161.99

183.50 172.55

SCHEDULE 9CASH AND BANK BALANCESCash Balance on Hand 0.18 0.11Bank Balance with Scheduled Banks:In Current Accounts 89.41 61.39In Fixed Deposits Accounts (Rs. 23,085) — 0.10

89.59 61.60

SCHEDULE 10LOANS & ADVANCESSecured & Considered Good

- Loan against mortgage of House Property 1.57 2.23UnsecuredConsidered Good:

Loans and Advances receivable from Subsidiary Company 0.13 0.34Deposits and Balances with Government and other Authorities(including accrued interest) 69.04 31.40Advances recoverable in cash or in kind or for value to be received 168.35 124.83Advance Tax (Net of Provision) 14.41 —

Considered Doubtful:

Advances recoverable in cash or in kind from- Others 0.22 0.22

252.15 156.79Less: Provision for doubtful loans and advances 0.22 0.22

251.93 156.57

253.50 158.80

S C H E D U L E S



72


SCHEDULE 11 Year

CURRENT LIABILITIESSundry Creditors

Micro, Small and Medium Enterprises 0.47 0.78(To the extent identified with available information)Parent Companies & Fellow Subsidiaries 0.09 4.09Others 463.43 313.26

463.99 318.13Security and Other Deposits 112.99 78.52Advances from Customers 53.93 42.38Investor Education and Protection Fund, Amount not dueUnpaid Dividend 0.39 0.21Other Liabilities 73.37 43.16Interest accrued but not due on loans 32.04 34.47

736.71 516.87

SCHEDULE 12

PROVISIONSProvision for Retirement Benefits 16.83 12.11Provision for Mines Reclamation 1.64 —Provision for Tax (Net of Advance Tax) — 2.22Proposed Dividend — 21.79Corporate Dividend Tax — 3.06

18.47 39.18

SCHEDULE 13INTEREST & DIVIDEND INCOMEInterest (Gross) on others 3.15 1.28(Tax Deducted at Source Rs. 0.47 Crore, Previous Year Rs. 0.11 Crore)Dividend from Current Investments 23.12 2.22Dividend from a Subsidiary 3.55 3.49

29.82 6.99

SCHEDULE 14

OTHER INCOMELease Rent 1.28 3.93Insurance Claim 0.36 0.19Profit on Sale of Fixed Assets (Net) — 0.21Profit on Sale of Current Investments (Net) 0.26 0.08Exchange Rate Difference (Net) 3.19 1.00Miscellaneous Income / Receipts 26.55 24.60

31.64 30.01

SCHEDULE 15INCREASE / (DECREASE) IN STOCKSClosing StockWork-in-progress 75.60 105.97Finished Goods 59.45 59.84

135.05 165.81

Opening stock

Work-in-progress 105.97 59.35Finished Goods 59.84 49.59Add: Stock transferred from NCCL as on 1.10.05 — 21.13

165.81 130.07

Add: Increase / (Decrease) in Excise Duty on Stocks (1.78) 3.38

Increase / (Decrease) in Stocks (32.54) 39.12

S C H E D U L E S



73

Rs. in Crores

PreviousSCHEDULE 16 Year

RAW MATERIALS CONSUMED

Opening Stock 12.74 9.36

Add: Stock transferred from NCCL as on 1.10.05 — 1.57

Purchase and Incidental Expenses 403.68 285.92

416.42 296.85Less: Closing Stock 23.43 12.74

392.99 284.11

SCHEDULE 17

MANUFACTURING EXPENSES

Consumption of Stores, Spare Parts, Components and Packing Materials 295.88 223.90

Power & Fuel Consumed 1,138.32 910.11

Hire Charges of Plant & Machinery and others 5.78 4.73

Repairs to Plant & Machinery 56.22 47.70

Repairs to Buildings 5.82 3.54

Repairs to Others 16.56 13.31

1,518.58 1,203.29

SCHEDULE 18

PAYMENTS TO AND PROVISIONS FOR EMPLOYEES

Salaries, Wages and Bonus 87.16 69.26

Contribution to and Provisions for Provident and Other Funds 13.53 9.40

Welfare Expenses 16.53 13.60

117.22 92.26

SCHEDULE 19

SELLING, DISTRIBUTION, ADMINISTRATION AND OTHER EXPENSES

Commission paid to Distributors and Selling Agents 11.57 7.94

Cash Discount 37.35 26.73Freight, Handling and Other Expenses 1,013.86 763.08Advertisements & Sales Promotions 74.88 46.24

Insurance 11.17 8.65

Rent (including Lease Rent) 9.67 8.79

Rates and Taxes 16.03 12.33

Stationery, Printing, Communication Expenses 8.68 7.76

Travelling and Conveyance 19.09 18.28

Legal and Professional Charges 15.51 17.97

Bad Debts and Advances Written Off 0.76 0.17

Directors’ Fees 0.18 0.11Power (other than related to Manufacturing Activity) 1.53 1.18

Loss on Sale of Fixed Assets (Net) 0.05 —

Miscellaneous Expenses 28.93 20.10

1,249.26 939.33

SCHEDULE 20

INTEREST

On Debentures and Fixed Loans 79.18 83.53

On Other Loans 7.65 6.11

86.83 89.64

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74

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. 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.

3. Fixed Assets:

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

4. 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. Exchange differences in case of

borrowed funds and liabilities in foreign currency for the acquisition of fixed assets from a country outside

India are adjusted to the cost of fixed assets. Any other exchange difference is dealt with in the Profit and

Loss Account.

5. Financial Derivatives:

The Company uses derivative financial instruments such as foreign exchange forward / option contract,

currency swap and interest swap to hedge its risk associated with foreign currency fluctuations and interest

rate. These are accounted on the date of settlement and realised gain / loss in respect of settled contracts are

recognised in the P&L accounts along with underlying transactions, except forward exchange contracts.6. 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.

7. Investments:

Current investments are carried at lower of cost or fair value, Long term investments are stated at cost after

deducting provisions made for diminution other than temporary.

8. Inventories:

Inventories are valued at lower of cost and net realisable value except waste / scrap which is valued at net

realisable value. The cost is computed on weighted average basis.

Finished goods and process stock 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.

9. Leases:

a) In respect of lease transactions entered into prior to April 1, 2001, lease rentals of assets acquired are

charged to 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

S C H E D U L E S



75

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 theinterest 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)

10. 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 except for Motor Car given to employees.

b) Depreciable amount of the Motor Car given to employees as per the Company’s Scheme is

depreciated over the Scheme period.

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 prevailing at the time of

acquisition.

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) Fly Ash handling system installed outside the plant are amortised over the period of the agreement or

over a period of five years wherever no such agreement.

vi) 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.

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

deductions.

11. Impairment of Assets:

The carrying amounts of assets are reviewed at each balance sheet date if there is an indication of impairment

based on the internal and external factors.

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable amount. An impairment

loss, if any, is charged to Profit & Loss account in the year in which the asset is identified as impaired.

Reversal of impairment loss recognised in prior years is recorded when there is an indication that impairment

losses recognised for the assets no longer exists or has decreased.

12. 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.

e) Post retirement medical benefit on actuarial valuation basis done at the year end.

SCHEDULE 21 (Contd.)

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4. (i) Derivative Instruments outstanding

Forward exchange contracts, currency swaps and interest rate swaps are used to hedge its risk associatedwith foreign currency fluctuations & interest rate. The following are the outstanding forward exchange

contracts and derivative transactions entered into by the Company as on March 31, 2007:

Particulars Currency Amount Nature Cross Currency

A. Forward Contracts USD 7 Million Capital Imports Rupees

Euro 5.7 Million Capital Imports USD

B. Options (Derivatives) USD 40 Million ECB Loan Rupees

Euro 2 Million Capital Imports USD

Purpose: To hedge net foreign exchange exposure in respect of highly probable forex exchange transaction.

(ii) Un-hedged Foreign Currency exposure

Foreign currency exposures those are not hedged by a derivative instrument or otherwise: NIL.

5a) Secured Non-Convertible Debentures Rs. in Crores

PreviousYear

i) Fixed Rate Non-Convertible Debentures (NCDs)

1. 12.00% NCDs (Redeemable at par on December 22, 2006) — 50.00

2. 12.60% NCDs (Redeemable at par on September 17, 2006) — 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 45.00

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 40.00

7. 6.00 % NCDs (Redeemable at par on March 12, 2009) 225.00 225.00

8. Step up interest NCDs (Redeemable at par on September 16, 2012) 25.00 25.00

9. 6.65% NCDs (Redeemable at par on April 30, 2013) 5.00 5.00

10. 5.78 % NCDs (Redeemable at par on May 11, 2009) 150.00 150.00

11. 6.25% NCDs (Redeemable at par on June 25, 2009) 150.00 150.00

12. 6.70% NCDs (Redeemable at par on June 16, 2008) 50.00 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 50.00

iii) Discounted Value Debentures

1. Issued as zero coupon at Yield to Maturity of 6.80%

(Carrying amount Rs. 13.40 crores, previous year Rs. 12.55 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, 2007.

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 of Rs. 186.94 crores (previous year Rs. 189.23 crores) 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.

6. Loans & Advances include Rs. 3.64 crores deposited as escrow with Standard Chartered Bank for purchase

of 36,40,000 Equity Shares of M/s K.V.K. Bio Energy Private Limited (KVK) from M/s Maruti Finance


S C H E D U L E S



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Private Limited, the promoters of KVK. The transaction is conditional upon approval from Chattisgarh

State Electricity Board for wheeling power to the Company.7. Sundry creditors include overdue amounts (unclaimed) of Rs. 0.74 Crore (Previous year Rs. 0.06 crore

payable to small scale and ancillary industrial units (SSI)) (including interest of Rs. 36,826, (Previous Year

Rs. 77,804 payable to SSI)) payable to Micro, Small & Medium Enterprises. Total outstanding dues of

Micro, Small & Medium Enterprises have been determined to the extent such parties have been identified

on the basis of information available with the Company.

List of Micro, Small & Medium Enterprises to whom the Company owes money for more than 45 days as

at March 31, 2007:

1 Associated Engineers 4 Masturlal Pvt. Limited

2 Jayshree Electron Pvt. Limited 5 Peekay Industries

3 Shrenik & Company

8. 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 BalanceOutstanding during the year

Rs. in Crores Rs. in Crores

UltraTech Ceylinco Pvt. Limited 18.92 27.86

Dakshin Cements Limited 0.13 0.13

9. Auditors remuneration (excluding service tax) and expenses charged to the accounts:

Rs. in Crores

a) Statutory Auditors: 2006-07 2005-06

Audit fees 0.24 0.24

Tax audit fees 0.03 0.03

Fees for other services 0.14 0.14

Expenses reimbursed 0.02 0.02

b) Branch Auditors:

Audit fees 0.04 —

Expenses reimbursed (Rs. 4,871, previous year Nil) — —c) Cost Auditors:


Expenses reimbursed (Rs. 7,495 previous year Rs. 12,555) — —

Rs. in Crores10. Managing Director’s remuneration: 2006-07 2005-06

Salary 2.97 1.56Contribution to Provident Fund & Other Funds* 0.26 0.15Perquisites 0.13 0.13

* Excluding Contribution to Gratuity Fund and provision for leave encashment as separate figures cannotbe quantified.

11. Segment Reporting :

The Company has mainly one business segment ‘cement’ as its primary segment. The Company’s operationsare solely situated in India.

Rs. in Crores

Revenue 2006-07 2005-06

Sales:

Domestic 4,242.08 2809.20

Export 668.75 490.25

Total 4,910.83 3,299.45


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12. 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

Harish Cement Limited (HCL) 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, Managing Director of the Company

b) Disclosure of related party transactions: Rs. in Crores

Sl. Nature of Holding Fellow TotalNo. Transaction Company Subsidiaries Subsidiaries KMP

Grasim NCCL UCPL SDCCL SSITL

1 Sale of Goods 265.07 — 139.91 0.33 — — 405.31

(206.39) — (95.80) — — — (302.19)

2 Purchase of Goods 191.69 — — 2.41 — — 194.10

(170.31) (88.87) — — — — (259.18)

3 Purchase / Lease / 0.21 — — — — — 0.21

Rent of Fixed Assets — — — — — — —

4 Transfer of — — — — — — —

Fixed Assets (0.13) — — — — — (0.13)

5 Rendering of — — — — — — —

Services (0.04) — — — — — (0.04)

6 Receiving of 0.08 — — — 0.12 3.36 3.56

Services (13.66) — — — (0.12) (1.84) (15.62)

7 Interest & other

income received / — — 3.55 0.04 — — 3.59

receivable — — (3.49) — — — (3.49)

Outstanding Balance as on March 31, 2007 Rs. in Crores

Sl. Nature of Holding Fellow TotalNo. Transaction Company Subsidiaries Subsidiaries KMP

Grasim DCL UCPL SDCCL SSITL

Loans & Advances — 0.13 — Rs. 1276 0.09 0.50 0.72

— (0.11) (0.23) (0.00) (0.09) (0.50) (0.93)

Debtors 0.27 — 18.92 Rs. 6305 — — 19.19(0.43) — (18.26) — — — (18.69)

Creditors 0.34 — — — — — 0.34

(0.45) — — — — — (0.45)

Other Liabilities 0.02 — — — — — 0.02

(4.08) — — — — — (4.08)

Figures in brackets are pertaining to previous year.


S C H E D U L E S



80

13. 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, 2007 are as follows:

Rs. in Crores

Minimum Lease Payments Payable 2006-07 2005-06

i. not later than 1 year 0.28 0.40

ii. later than 1 year and not later than 5 years 0.12 0.50

iii. later than 5 years — —

Total Minimum Lease Payable 0.40 0.90

(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. 0.36 crore (Previous Year Rs. 0.79 crore).

14. Deferred Tax Assets and Liabilities as on March 31, 2007 are as under: Rs. in Crores

Particulars Deferred Tax Deferred Tax

(assets)/liabil ities Current Year (assets)/liabilities

as at 01.04.2006 Charge/(Credit) as at 31.03.2007

Deferred Tax Assets:-

Provision allowed under tax on payment basis (9.43) (2.53) (11.96)

(9.43) (2.53) (11.96)

Deferred Tax Liabilities:-

Accumulated Depreciation 578.72 (14.25) 564.47

Miscellaneous expenditure — — —

(to the extent not written-off or adjusted)

Payments allowed under tax not expensed

in books 7.67 0.08 7.75

586.39 (14.17) 572.22

Net Deferred Tax Liability 576.96 (16.70) 560.26

15. The following expenses are included in the different heads of expenses in the Profit & Loss Accounts :

Rs. in Crores

Particulars 2006-07 2005-06

Raw Power Total Raw Power Total

Materials & Fuel Materials & Fuel

Consumed Consumed Consumed Consumed

Stores & Spares Consumed 40.94 19.62 60.56 36.54 16.28 52.82

Royalty & Cess 84.04 — 84.04 76.46 — 76.46


S C H E D U L E S



81

16. Capital work-in-progress includes:

Rs. in Crores2006-07 2005-06

Pre-operative expenses pending allocation:

Stores & Spares Consumed 0.33 —

Power & Fuel Consumed 0.63 —

Salary, wages, bonus, exgratia and Provisions 1.05 —

Insurance 0.15 —

Depreciation 0.02 —

Interest Capitalised 0.80 —

Misc. expenses 3.15 0.51

Total Pre-operative expenses 6.13 0.51

Add: B/f from Previous Year 0.51 —

Sub total 6.64 0.51

17. In accordance with the requirement of Accounting Standard -29 “Provisions, Contingent Liabilities andContingent Asset” issued by Institute of Chartered Accountants of India, the Company, during the year,

recognised Rs. 1.64 crores towards cost of reclamation of mining area.

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.

20. Previous year’s figures have been regrouped and rearranged wherever necessary to conform to this year’s

classification.

SCHEDULE 22

ADDITIONAL INFORMATION UNDER PART II OF SCHEDULE VI TO THE COMPANIES ACT, 1956

1. CAPACITIES & PRODUCTION:

Product Unit Installed capacity* Actual production**

2006-07 2005-06 2006-07 2005-06

Cement (Lakh tonnes) 170.00 170.00 146.35 133.33

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.

** Excludes Clinker not converted into Cement Production.

2. TURNOVER:

2006-07 2005-06

Product Unit Quantity Value Quantity Value


Cement Lakh tonnes 151.69 4,459.37 142.35 3,091.33

Clinker Lakh tonnes 25.00 408.79 13.18 207.94

Others — 42.67 — 0.18

Total 4,910.83 3,299.45


SCHEDUL ES



82

3. INVENTORY:

As at 31.03.2007 As at 31.03.2006



Cement Lakh tonnes 2.65 59.45 3.14 59.84

4. RAW MATERIALS, STORES, SPARE PARTS:

a) Raw Materials Consumed:

2006-07 2005-06



Limestone* Lakh tonnes 201.77 170.61 183.09 145.26

Slag Lakh tonnes 2.55 9.34 2.50 7.85Gypsum Lakh tonnes 6.19 76.77 5.12 58.53

Fly Ash Lakh tonnes 17.62 51.11 12.70 29.30

Iron ore Lakh tonnes 4.31 47.73 2.53 19.50

Others 37.43 23.67

Total* 392.99 284.11

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

b) Purchase of Finished Goods:

2006-07 2005-06

Class of goods Unit Quantity Value Quantity Value


Cement Lakh tonnes 5.58 182.38 9.54 232.19

Clinker Lakh tonnes — — 2.36 33.02

Others 0.05 0.11

Total 182.43 265.32

c) Value of Imports (on CIF basis): Rs. in Crores

2006-07 2005-06

Fuel, stores and spares 363.03 229.50

Capital goods 140.12 13.61

d) Value of imported and indigenous raw materials, spare parts and stores consumed:

2006-07 2005-06

Value % Value %Rs. in Crores Rs. in Crores

Raw materials

Imported 9.57 2.4 0.69 0.2

Indigenous 383.42 97.6 283.42 99.8

Total 392.99 100.0 284.11 100.0


SCHEDUL ES



83

2006-07 2005-06

Value % Value %Rs. in Crores Rs. in Crores

Stores & spares

Imported 29.06 8.2 29.19 10.5

Indigenous 327.39 91.8 247.53 89.5

Total 356.45 100.0 276.72 100.0

5. EXPENDITURE IN FOREIGN CURRENCY:

Rs. in Crores

2006-07 2005-06

Freight / Despatch / Demurrage 67.68 55.81

Advertising — 0.01

Service Fees 2.93 0.77

Interest 6.04 3.70

Other Matters 0.46 1.50

6. EARNING IN FOREIGN EXCHANGE:

Rs. in Crores

2006-07 2005-06

Export of goods {Including Rs. 639.73 Crores

(Rs. 460.66 Crores) on FOB basis} 668.75 490.25

Professional fees 1.01 2.06

Other receipts 3.74 10.47

7. DIVIDEND REMITTED IN FOREIGN CURRENCY TO NON-RESIDENT SHAREHOLDERS:

2006-07 2005-06No. of Shares Gross Amount No. of Shares Gross Amount

Shareholders Held of Dividends Shareholders Held of Dividends

Final Dividend

on Equity1 3,781 11,142,104 Rs. 1.95 Crores 3,669 9,576,564 Rs. 0.72 Crore

Interim Dividend

on Equity2 3,677 12,780,845 Rs. 5.11 Crores Nil Nil Nil

1. Final Dividend remitted in the year 2006-07 is pertaining to 2005-06 and dividend remitted in 2005-06

is pertaining to 2004-05, respectively.

2. Interim Dividend remitted to Non-Resident Shareholders is pertaining to 2006-07.

Signatures to Schedules ‘1’ to ‘22’

KUMAR MANGALAM BIRLAChairman

S. MISRA RAJASHREE BIRLAManaging Director R. C. BHARGAVA


K. C. BIRLA S. MISRAExecutive President & CFO V. T. MOORTHY




SCHEDUL ES



84

A D D I T I O N A L I N F O R M A T I O N U N D E R P A R T I V O F S C H E D U L E V I T O T H E C O M P A N I E S A C T , 1 9 5 6

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 7

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 N I L

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

Total Liabilities Total Assets

4 6 5 7 8 4 6 9 4 6 5 7 8 4 6 9

Source of Funds Paid-Up-Capital Reserve & Surplus1 2 4 4 8 5 9 1 6 3 9 2 9 0 3

Secured Loans Unsecured Loans

1 1 5 1 2 5 3 9 4 2 7 3 7 9 9

Application of Funds Net Fixed Assets Investments

3 2 1 4 2 2 3 3 4 8 3 4 5 1 5

Net Current Assets Miscellaneous Expenditure

2 0 4 9 9 9 2 N I L

IV Performance of Company (Amount in Rs. Thousands)

Turnover Total Expenditure

5 4 8 4 3 5 2 0 4 3 1 8 1 6 7 1

+/- Profit / (Loss) Before Tax +/- Profit/(Loss) After Tax+ 1 1 6 6 1 8 4 9 + 7 8 2 2 7 9 3

Earning per share (Rs.) Dividend rate (%)

6 2 . 8 4 4 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


S. MISRA RAJASHREE BIRLA

Managing Director R. C. BHARGAVAG. M. DAVE

N. J. JHAVERIK. C. BIRLA S. MISRA

Executive President & CFO V. T. MOORTHYJ. P. NAYAK

S. RAJGOPALS. K. CHATTERJEE D. D. RATHI

Mumbai, April 21, 2007 Company Secretary Directors



85

Name of the Subsidiary Company Dakshin UltraTech

Cements Ceylinco

Limited (Pvt) Ltd.

1 Financial year of the subsidiary company ended on March 31, 2007 March 31, 2007

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


i) for the financial year of the subsidiary

a) Dealt with in the accounts of the — —

holding company

b) Not dealt with in the accounts of the — 7.00*

holding company

ii) for the previous financial years of

the subsidiary since it became the holding company’s subsidiary

a) Dealt with in the accounts of the — —

holding company

b) Not dealt with in the accounts of the — 12.32#

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 2.42

# converted Re. 1 = Sri Lankan Rupees 2.29

S T A T E M E N T P U R S U A N T T O S E C T I O N 2 1 2 O F T H E C O M P A N I E S A C T , 1 9 5 6 R E L A T I N G T O S U B S I D I A R Y C O M P A N I E S









86

TO THE BOARD OF DIRECTORS OF

ULTRATECH CEMENT LIMITED ON THE CONSOLIDATED FINANCIAL STATEMENTSOF 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, 2007, 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 auditincludes, 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 subsidiaries, whose financial statements

reflect total assets of Rs. 52 crores as at 31 st March, 2007, the total revenue of

Rs. 200.72 crores and cash flows amounting to Rs. 5.55 crores for the year then ended.

These financial statements and other financial information have been audited by other

auditors whose report has been furnished to us, and our opinion, in so far as they relate

to the amounts included in respect of these subsidiaries is based solely on the report of other auditors.

4. 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 audited

accounts of subsidiaries, which have been included in the consolidated financial

statements.

5. Based on our audit and on consideration of reports of other auditors 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 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 2007;

A U D I T O R S ’ R E P O R T O N T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S



87

(b) in the case of the consolidated profit and loss account, of the profit for the year ended

on that date; and

(c) in the case of the consolidated cash flow statement, of the cash flows for the year

ended on that date.




Partner Partner

(Membership No. 31220) (Membership No. 30850)

Mumbai, April 21st, 2007



88

C O N S O L I D A T E D B A L A N C E S H E E T A S A T M A R C H 3 1 , 2 0 0 7

Rs. in CroresAs at

Schedules March 31, 2006

SOURCES OF FUNDSShareholders’ FundsShare Capital 1A 124.49 124.40Share Capital Suspense 1B — 0.09Reserves and Surplus 2 1,643.72 916.88

1,768.21 1,041.37Loan FundsSecured Loans 3 1,151.25 1,222.09Unsecured Loans 4 427.38 229.90

1,578.63 1,451.99Minority Interest 5.30 4.75Deferred Tax Liabilities (Net) 562.09 577.55

TOTAL 3,914.23 3,075.66

APPLICATION OF FUNDSFixed AssetsGross Block 5 4,810.81 4,633.75Less: Depreciation 2,274.16 2,074.46

Net Block 2,536.65 2,559.29Capital Work-in-Progress 697.19 141.17

3,233.84 2,700.46Goodwill 9.10 10.45Investments 6 459.21 148.15Current Assets, Loans and AdvancesInventories 7 441.19 386.79Sundry Debtors 8 173.89 162.05Cash and Bank Balances 9 100.11 68.39Loans and Advances 10 254.26 158.84

969.45 776.07

Less:

Current Liabilities & ProvisionsCurrent Liabilities 11 738.80 518.75Provisions 12 18.57 40.72

757.37 559.47

Net Current Assets 212.08 216.60

TOTAL 3,914.23 3,075.66

Accounting Policies and Notes on Accounts 21









89

C O N S O L I D A T E D P R O F I T A N D L O S S A C C O U N T F O R T H E Y E A R E N D E D M A R C H 3 1 , 2 0 0 7


Schedules Year

INCOMEGross Sales 5,542.22 3,885.49Less: Excise Duty 573.52 501.54

Net Sales 4,968.70 3,383.95Interest & Dividend Income 13 27.01 3.71Other Income 14 32.21 28.11Increase / (Decrease) in Stocks 15 (30.38) 40.23

4,997.54 3,456.00

EXPENDITURERaw Materials Consumed 16 423.00 326.17Manufacturing Expenses 17 1,527.57 1,283.55Purchase of Finished Products 182.43 176.45Payments to and Provisions for Employees 18 118.99 98.06Selling, Distribution, Administration and

Other Expenses 19 1,254.72 965.16Interest 20 86.83 90.07Depreciation and Obsolescence 227.31 220.41Amortisation of Goodwill on Consolidation 1.35 10.17

3,822.20 3,170.04

Profit Before Tax Expenses 1,175.34 285.96Provision for Current Tax 399.42 59.78Deferred Tax (15.35) (4.16)Fringe Benefit Tax 4.61 3.64

Profit After Tax 786.66 226.70Minority Interest 1.75 1.60

Profit After Minority Interest 784.91 225.10Adjustment due to Merger — 101.56Balance brought forward from Previous Year 199.59 (67.77)

Profit Available for Appropriation 984.50 258.89

AppropriationsInterim Dividend 49.79 —Proposed Dividend — 21.79Corporate Dividend Tax 6.98 3.06Debenture Redemption Reserve 30.92 9.45General Reserve 100.00 25.00Balance carried to Balance Sheet 796.81 199.59

984.50 258.89

Basic and Diluted Earnings Per Equity Share (in Rs.) 63.05 18.08Face Value Per Equity Share (in Rs.) 10.00 10.00Number of Equity Shares (in Nos.) 124,485,879 124,485,879Accounting Policies and Notes on Accounts 21









90

C O N S O L I D A T E D C A S H F L O W S T A T E M E N T F O R T H E Y E A R E N D E D M A R C H 3 1 , 2 0 0 7

Rs. in CroresMarch 31, 2007 March 31, 2006

A Cash Flow from Operating Activities:

Profit Before Tax 1,175.34 285.96Adjustments for:Depreciation 227.31 220.41Amortisation of Goodwill on Consolidation 1.35 10.17Miscellaneous Expenditure written off — 0.02Provision for Doubtful Debts and Advances / (Written back) — 1.79Bad Debts Written-off 0.76 0.17Provision for Retirement benefits 4.71 1.77Provision for Mines Reclamation 1.64 —Interest & Dividend Income (27.01) (3.71)Interest Expense 86.83 90.07Unrealised Foreign Exchange (Gain) / Loss (2.29) 0.79(Profit) / Loss on Sale of Fixed Assets — (0.21)Profit on Sale of Investment (0.26) (0.08)

Operating Profit Before Working Capital Changes 1,468.38 607.15Adjustments for:(Increase) / decrease in Inventories (54.40) (53.31)(Increase) / decrease in Sundry Debtors (12.60) 10.51(Increase) / decrease in Loans and Advances (82.09) (10.09)Increase / (decrease) in Trade Payables and other Liabilities 222.48 65.86

Cash Generated from Operations 1,541.77 620.12Taxes paid (416.40) (52.90)Fringe Benefit Tax Paid (4.61) (3.09)

Net Cash from Operating Activities (A) 1,120.76 564.13

B Cash Flow from Investing Activities:Purchase of Fixed Assets (766.03) (221.58)Sale of Fixed Assets 2.39 1.35(Increase) / decrease in Current Investments (311.00) (148.00)Profit on Sale of Investments 0.26 0.08Interest and Dividend Received 26.95 3.56

Net Cash used in Investing Activities (B) (1,047.43) (364.59)

C Cash Flow from Financing Activities:Repayment of Long Term Borrowings (76.00) (167.33)

Proceeds from Long Term Borrowings 200.43 217.15Repayment of Short Term Borrowings 6.60 (136.60)Interest Paid (88.41) (92.75)Dividend Paid (72.37) (10.20)Corporate Dividend Tax (10.04) (1.33)

Net Cash used in Financing Activities (C) (39.79) (191.06)

Net increase in Cash and Cash Equivalents (A + B + C) 33.54 8.48Cash and Cash Equivalents at the Beginning of the Year 68.39 60.16Effect of Exchange Rate on Consolidation of Foreign Subsidiary (1.82) (0.25)Cash and Cash Equivalents at the End of the Year 100.11 68.39

Notes:

1. Cash flow statement has been prepared under the indirect method as set out in Accounting Standard - 3 issued by theInstitute 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.









91


Year

SCHEDULE 1A

SHARE CAPITAL

Authorised

130,000,000 Equity shares of Rs. 10 each 130.00 130.0

Issued, Subscribed and Paid up 124.49 124.40124,485,879 Equity shares of Rs. 10 each fully paid-up.

(Previous Year 124,398,621)

124.49 124.40

SCHEDULE 1B

SHARE CAPITAL SUSPENSE

NIL Equity shares of Rs. 10 each fully paid-up issued.(Previous Year 87,258) — 0.09— 0.09

SCHEDULE 2

RESERVES & SURPLUS Rs. in Crores

Balance Additions Deduction/ Balanceas at during Adjustments as at31st the during 31st

March, 06 year the year March, 07

Capital Reserve 25.02 — — 25.02

Cash Subsidy Reserve 0.10 — — 0.10

Debenture Redemption Reserve 138.88 30.92 — 169.80

General Reserve 553.49 100.00 — 653.49

Exchange Variation Reserve* (0.20) (1.30) — (1.50)

Surplus as per Profit & Loss Account 199.59 784.91 (187.69) 796.81

916.88 914.53 (187.69) 1,643.72

Previous Year 849.28 126.90 (59.30) 916.88

* Exchange Variation Reserve has been created for Exchange Variation loss in Opening Equity Share Capitaland Reserve & Surplus of UltraTech Ceylinco (Pvt.) Ltd.

SCHEDULE 3

SECURED LOANS

Non-Convertible Debentures 943.40 1018.55

Loans from Banks:Cash Credits / Working Capital borrowings from Banks Secured byHypothecation of Stocks and Book Debts. 20.91 14.31

Term Loans 186.94 189.23

1,151.25 1,222.09

S C H E D U L E S F O R M I N G P A R T O F C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S



94


Year

SCHEDULE 12

PROVISIONSRetirement Benefits 16.93 12.22Provision for Mines Reclamation 1.64 —Provision for Tax (Net of Advance Tax) — 3.65Proposed Dividend — 21.79Corporate Dividend Tax — 3.06

18.57 40.72

SCHEDULE 13INTEREST & DIVIDEND INCOMEInterest (Gross) on others 3.89 1.49(Tax Deducted at Source Rs. 0.47 Crore, Previous Year Rs. 0.11 Crore)

Dividend from Current Investments 23.12 2.22

27.01 3.71

SCHEDULE 14OTHER INCOMELease Rent 1.28 3.93Profit on Sale of Current Investments (Net) 0.26 0.08Insurance Claim 0.36 0.47Profit on Sale of Fixed Assets (Net) — 0.21Exchange Rate Difference (Net) 3.19 1.23Miscellaneous Income / Receipts 27.12 22.19

32.21 28.11

SCHEDULE 15

INCREASE / (DECREASE) IN STOCKSClosing StockWork-in-progress 75.60 105.97Finished Goods 64.45 62.68

140.05 168.65

Opening stockWork-in-progress 105.97 68.38Finished Goods 62.68 61.62

168.65 130.00

Add: Increase / (Decrease) in Excise Duty on Stocks (1.78) 1.58

Increase / (Decrease) in Stocks (30.38) 40.23

SCHEDULE 16

RAW MATERIALS CONSUMEDOpening Stock 12.74 13.04Purchase and Incidental Expenses 433.69 325.87

446.43 338.91Less: Closing Stock 23.43 12.74

423.00 326.17




95

Rs. in Crores

Previous

Year

SCHEDULE 17

MANUFACTURING EXPENSES

Consumption of Stores, Spare Parts and Components, Packing Materials 303.78 242.05

Power & Fuel Consumed 1,139.22 967.44

Hire Charges of Plant & Machinery and others 5.78 5.45

Repairs to Plant & Machinery 56.27 50.65

Repairs to Buildings 5.92 3.80

Repairs to Others 16.60 14.16

1,527.57 1,283.55

SCHEDULE 18

PAYMENTS TO AND PROVISIONS FOR EMPLOYEESSalaries, Wages and Bonus 88.66 73.97

Contribution to and Provisions for Provident and Other Funds 13.70 9.82

Welfare Expenses 16.63 14.27

118.99 98.06

SCHEDULE 19

SELLING, DISTRIBUTION, ADMINISTRATION AND OTHER EXPENSES

Commission paid to Distributors and Selling Agents 11.60 8.27

Cash Discount 37.35 26.73

Freight, handling and other expenses 1,014.95 778.28

Advertisements & Sales Promotion 77.25 49.39

Insurance 11.21 9.14

Rent (including Lease Rent) 9.75 8.93Rates and Taxes 16.14 12.67

Stationery, Printing, Communication Expenses 8.93 8.14

Travelling and Conveyance 19.52 18.89

Legal and Professional charges 15.62 18.55

Bad Debts and Advances Written Off 0.76 0.17

Provision for Doubtful Debts and Advances — 1.79

Directors’ Fees 0.18 0.11

Power (other than related to Manufacturing Activity) 1.87 1.18

Loss on Sale of Fixed Assets (Net) 0.05 —

Miscellaneous Expenses 29.54 22.92

1,254.72 965.16

SCHEDULE 20

INTEREST

On Debentures and Fixed Loans 79.18 83.53

On Others Loans 7.65 6.54

86.83 90.07




97


9. Leases:

a) In respect of lease transactions entered into prior to April 1, 2001, lease rentals of assets acquired

are charged to 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)

10. 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 except for Motor Cars given to employees.

b) Depreciable amount of the Motor Cars given to employees as per the Company's Scheme is

depreciated over the Scheme period.

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 prevailing at the time of

acquisition.

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) Fly Ash handling system installed outside the plant are amortised over the period of the agreement

or over a period of five years wherever no such agreement.

vi) 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.

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

additions / deductions.

11. Impairment of Assets:

The carrying amounts of assets are reviewed at each balance sheet date if there is an indication of

impairment based on the internal and external factors.




99


B. Notes to Consolidated Financial Statements:

1. Principles of consolidation:

(a) The Consolidated Financial Statements (CFS) comprises the financial statements of UltraTech Cement

Limited and its subsidiaries as at 31.03.2007, which are as under:

Name of the Company Country of % Shareholding &

Incorporation Voting Power

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. Merger of Narmada Cement Company Limited:

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.

3. Notes on Accounts of the financial statement of the Company and all the subsidiaries are set out in their

respective financial statement.

4. Goodwill:

Goodwill represents the difference between the Group's share in the net worth of a subsidiary, and the cost of

acquisition at each point of time of making the investment in the subsidiary. 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 arising out of an acquisition of equity stake in a subsidiary 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 a subsidiary,

the unamortised goodwill is written off fully.

During the year Rs. 1.35 Crores ( Previous year Rs. 10.17 Crores) was amortised from goodwill.

5. Reserve shown in the consolidated balance sheet represents the Group's share in the respective reserves of the

Group Companies.

6. Contingent Liabilities not provided for in respect of:

Rs. in Crores

Previous

Year

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

(a) Sales-tax liability 80.51 50.92

(b) Excise duty 35.75 27.10

(c) Royalty on Limestone / Marl 43.48 29.68

(d) Customs 0.19 30.12

(e) Others 33.53 15.63




100


7. Estimated amount of contracts remaining to be executed on capital account and not provided (net of advances):

Rs. 1,749.10 Crores (Previous year Rs. 531.97 Crores).

8. Segment reporting:

The Group has mainly 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 2006-07 2005-06

Net Sales:

In India 4,242.08 2,830.40

Outside India 726.62 553.55

Total 4,968.70 3,383.95

9. 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

Harish Cement Ltd (HCL) Fellow Subsidiary

Key Management Personnel (KMP) and their relatives

Mr. S. Misra, Managing Director of the Company

b) Disclosure of related party transactions:

Rs. in Crores

Sl. No. Nature of Transaction Grasim SSITL SDCCL KMP Total

1 Sale of Goods 265.07 — 0.33 — 265.40

(206.39) — — — (206.39)

2 Purchase of Goods 191.69 — 2.41 — 194.10

(170.31) — — — (170.31)

3 Purchase / Lease / Rent of Fixed Assets 0.21 — — — 0.21

— — — — —

4 Transfer of Fixed Assets — — — — —

(0.13) — — — (0.13)

5 Rendering of Services — — — — —(0.04) — — — (0.04)

6 Receiving of Services 0.08 0.12 — 3.36 3.56

(13.66) (0.12) — (1.92) (15.70)

7 Interest & other income received / receivable — — 0.04 — 0.04

— — — — —




101


Rs. in Crores

Sl. No. Nature of Transaction Grasim SSITL SDCCL KMP Total

Outstanding Balance as on 31st March

1 Debtors 0.27 — Rs. 6305 — 0.27

(0.43) — — — (0.43)

2 Loans & Advances — 0.09 Rs. 1276 0.50 0.59

— (0.09) (0.00) (0.50) (0.59)

3 Creditors 0.34 — — — 0.34

(0.45) — — — (0.45)

4 Other Liabilities 0.02 — — — 0.02

(4.08) — — — (4.08)

Figures in brackets are pertaining to previous year.

10. 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, 2007 are as follows:

Rs. in Crores

2006-07 2005-06

Minimum Lease Payments Payable

i. not later than 1 year 0.28 0.40

ii. later than 1 year and not later than 5 years 0.12 0.50

iii. later than 5 years — —

Total Minimum Lease Payments 0.40 0.90

(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. 0.36 Crore (Previous year Rs. 0.83 Crore).

11. Deferred Tax Assets and Liabilities as on March 31, 2007 are as under:

Rs. in Crores

Particulars Deferred Tax Current Year Deferred Tax

(assets)/ Charge/ (assets)/

liabilities as at (Credit) liabilities as at

01.04.2006 31.03.2007

Deferred Tax Assets:-

Provision allowed under tax on payment basis (9.47) (2.49) (11.96)

Unabsorbed Losses (5.96) 1.84 (4.12)

(15.43) (0.65) (16.08)

Deferred Tax Liabilities:-Accumulated Depreciation 585.31 (14.85) 570.46

Miscellaneous expenditure — — —

(to the extent not written-off or adjusted)

Payments allowed under tax not expensed in books 7.67 0.04 7.71

592.98 (14.81) 578.17

Net Deferred Tax Liability 577.55 (15.46) 562.09




102


12. Auditors' remuneration (excluding service tax) and expenses charged to the accounts:

Rs. in Croresa) Statutory Auditors: 2006-07 2005-06


Tax audit fees 0.03 0.03

Certification fees 0.14 0.14

Expenses reimbursed 0.02 0.02

b) Branch Auditors :

Audit fees 0.04 —

Expenses reimbursed (Rs. 4,871, previous year Nil) — —

c) Cost Auditors:


Expenses reimbursed (Rs. 7,495 previous year Rs. 12,555) — —

13. Figures pertaining to the subsidiary companies have been reclassified wherever necessary to bring them in

line with the Company's financial statements.

14. Previous year's figures have been regrouped and rearranged wherever necessary to confirm to this year's

classification.

KUMAR MANGALAM BIRLASignatures to Schedules ‘1’ to ‘21’. Chairman





S. K. CHATTERJEE D. D. RATHI

Mumbai, April 21, 2007 Company Secretary Directors




S u b s i d i a r y C o m p a n i e s R e p o r t s a n d A c c o u n t s



D A K S H I N C E M E N T S L I M I T E D

104

DIRECTOR’S REPORT

To The Members,

Dakshin Cements Limited

Your Directors have pleasure in presenting their

Fourteenth Annual Report of your Company

together with Audited Accounts for the year ended

31st March, 2007.

FINANCIAL RESULTS

During the year under review, your Company did not

carry on any business activities and accordingly no

Profit and Loss Account has been prepared.

CAPITAL EXPENDITURE


incur any capital expenditure.

FIXED DEPOSITS

Your Company has not accepted any fixed deposit

during the year ended 31st March, 2007.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies

Act, 1956 your Directors confirm that:

i) in the preparation of Annual Accounts, the

applicable accounting standards had been followedalong with proper explanation relating to material

departures;

ii) the Directors had selected such accounting policies

and made judgments and estimates that are

reasonable and prudent so as to give a true and

fair view of the state of affairs of the Company as

at 31st March, 2007;

iii) the Directors had taken proper and sufficient care

for the maintenance of adequate accounting records

in accordance with the provisions of the Companies

Act, 1956 for safeguarding the assets of the

company and for preventing and detecting the fraudand other irregularities; and

iv) the Directors had prepared the annual accounts on

a going concern basis.

AUDITORS’ REPORT

There are no adverse comments, observation or

reservation in the Auditors’ Report on the AnnualAccounts of the Company.

The Notes to the Accounts referred to in the Auditors’

Report are self explanatory and therefore do not call

for any further comments from the Directors.

PARTICULARS OF EMPLOYEES

Section 217(2A) of Companies Act, 1956 read with

the Companies (Particulars of Employees) Rules, 1975

do not apply to your Company as none of its

employees are covered under its provisions.

CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION, FOREIGN EXCHANGE

EARNINGS & OUTGO


carry any commercial / business activity and

accordingly particulars under conservation of energy,

technology absorption, foreign exchange earnings &

outgo have not been provided.

AUDITORS

M/s G. P. Kapadia & Co., Chartered Accountants,

Mumbai the existing Auditors will retire at the ensuing

Annual General Meeting of your Company. They, being

eligible to be re-appointed, have expressed their

willingness to be re-appointed as the Statutory Auditors

of your Company for the financial year 2007-08. Aresolution seeking your approval for their

re-appointment has been included in the Notice

convening the Annual General Meeting.

ACKNOWLEDGEMENT

The Board of Directors wish to place on record their

appreciation for the support and co-operation extended

by UltraTech Cement Limited, the Auditors and the

Bankers of the Company.

For and on behalf of the Board of Directors

K. C. BIRLA

O. P. PURANMALKA DirectorsM. R. PRASANNA

Place: Mumbai

Date: 16th April, 2007

}




105

AUDITOR’S REPORT

We have audited the attached Balance Sheet of

Dakshin Cements Limited as at 31st March, 2007.

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 materials 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 of 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 notapplicable.

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 accounts as

required by law have been kept by the

Company so far as appears from ourexamination of those books;

(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,

2007, and taken on record by the Board of

Directors, we report that none of the directors

is disqualified as on 31st March, 2007 frombeing 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 matter so required

and give a true and fair view in conformity

with the accounting principles generally

accepted in India, of the state of Company’saffairs as at 31st March, 2007.

For G. P. KAPADIA & CO.


ATUL B. DESAI

Partner

(Membership No.30850)

Mumbai, April 16, 2007




106

Balance Sheet as at 31st March, 2007As at As at

31st March, 2007 31st March, 2006

Schedules Rupees Rupees Rupees Rupees

I. SOURCES OF FUNDS:

SHAREHOLDERS’ 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 —

Captial Work in progress —

Incidental Expenditure pending

allocation / capitalisation 1,554,969 1,554,969 1 ,3 90 ,7 38 1 ,3 90 ,7 38

Current Assets, Loans and Advances 3 365,576 361,165

365,576 361,165

Less: Current Liabilities and Provisions 4 1,457,939 (1,092,363) 1 ,2 89 ,2 97 (92 8,13 2)

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.



by the hand of

ATUL B. DESAI K. C. BIRLA O. P. PURANMALKA M. R. PRASANNA

Partner Director Director Director

Membership No. 30850





107

Schedules forming part of the Balance SheetAs at As at

31st March 07 31st March 06

Schedule - 1 Rupees Rupees

SHARE CAPITALAuthorised

500,000 Equity shares of Rs 10 each 5,000,000 5,000,000

Issued and subscribed

50,000 Equity shares of Rs 10 each

fully paid (All the shares are held by

UltraTech Cement Limited,

the holding company) 500,000 500,000

Schedule - 2

FIXED ASSETS

Gross block — —

Less : Depreciation — —

Net block — —

Capital work in progress — —

Incidental Expenditure pending allocation

/capitalisation 1,554,969 1,390,738

1,554,969 1,390,738

Schedule - 3

CURRENT ASSETS, LOANS AND ADVANCES

Cash and Bank Balances

Cash on Hand 241 241

Balance with Scheduled Bank

on current account 200,305 200,305

200,546 200,546

Loans and Advances

Unsecured, considered good

Advances recoverable in cash or in kind

or for value to be received 165,030 160,619

Total 365,576 361,165

Schedule - 4

CURRENT LIABILITIES AND PROVISIONS

Liabilities

Due to UltraTech Cement Limited

(The Holding Company) 1,264,870 1,101,840

Due to Others 171,187 171,187

Other liabilities 21,882 16,270

Total 1,457,939 1,289,297

Schedule - 5

NOTES ON ACCOUNTS

1) Significant Accounting Policies :

The Company maintains its accounts on accrual basis following the historicalcost convention in accordance with generally accepted accounting principles

(“GAAP”) and in compliance with the accounting standards referred to in

Section 211 (3C) and other requirements of the Companies Act, 1956, to the

extent applicable.

2) As the Company has not yet started commercial operation, no Profit & Loss

Account has been prepared. The statement showing the unallocated,

pre- operative expenditure incurred up to 31st March 2007 is shown in

Schedule - 2.

3) The pre-operative expenditure as under pending allocation will be allocated

to appropriate fixed assets on commencement of the commercial production:

Incidental expenditure pending allocation / capitalisation

As at As at

31st March 07 31st March 06

Rupees Rupees

Travelling and conveyance 134,629 134,629

Subscription 1,000 1,000

Survey expenses 90,750 90,750

Testing charges 8,000 8,000

Consultancy charges 2,500 2,500Auditors’s remuneration 63,282 57,670

Printing & Stationery 3,764 3,764

Office expenses 2,745 2,745

Bank charges 325 325

Directors sitting fees 7,500 7,500

Filing fees 33,770 33,770

Royalty/dead rent 915,811 757,192

Legal fees 262,000 262,000

Interest 7,008 7,008

Miscellaneous expenses 21,885 21,885

Total 1,554,969 1,390,738

4) Contingent liabilities - Nil.

5) Previous years’ figures have been regrouped wherever necessary.

Signature to Schedule 1 to 5

As per our report attached.



by the hand of

ATUL B. DESAI K. C. BIRLA O. P. PURANMALKA M. R. PRASANNA

Partner Director Director Director

Membership No 30850

Mumbai , April 16, 2007




108

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 1Balance Sheet Date 3 1 - 0 3 - 0 7

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

5 0 0 5 0 0

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 5 5 5 N I L

Net Current Assets Miscellaneous Expenditure

( 1 0 9 2 ) 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 O. P. PURANMALKA M. R. PRASANNA

Director Director Director





U l t r a T e c h C e y l i n c o ( P v t ) L t d

109

DIRECTORS’ REPORT

The Directors of UltraTech Ceylinco (Pvt) Ltd have pleasure

in presenting to the members their report for the year ended31st March, 2007.

PRINCIPAL ACTIVITY

The principal activity of the Company is carrying on business

of importers, exporters, distributors, warehousemen,

wholesalers, retailers and dealers of cement and to establish

storage terminals and other facilities for the bagging and

distribution of bulk cement.

MESSAGE FROM THE CEO

The performance during the year of our JV was the best

ever since the inception.

The Company distributed 0.510 MMT of cement against

0.539 MMT during last period of 15 months. This has given

14 % growth as against market growth of 9% which has

resulted in increase in market share to 12.3 %.

The sales and other income for the financial year under

review were Rs. 4,794 M as against Rs. 4,354 M during the

15 months previous period which has given us a growth of

25%. The profit after providing tax for the year was

Rs. 221 M as against the profit of Rs. 243 M for 15 months

previous period.

The performance for the year was driven mainly by increase

in the quantity sold, better price realization and continuous

efforts in the cost reduction activities and better productivity.

The Governments thrust on infrastructure development and

its efforts to invite FDI’s in infrastructure projects such as

power plants, road, flyovers, are expected to have a favorable

impact on the industry in 2007-08.

We have taken enormous efforts in the brand awarenessafter changing our brand name in year 2005 and the coming

year, special steps will be taken for brand building exercises.

PROFIT & LOSS ACCOUNT

Year ended 15 months ended31.03.2007 31.03.2006

SLR SLR

Turnover 4,777,959,022 4,349,045,969

Cost of Sales (4,345,202,370) (3,842,782,316)

Gross Profit 432,756,652 506,263,653

Other operating Income 16,307,571 4,894,446

Administrative expenses (50,087,336) (57,094,226)

Distribution cost (70,016,265) (91,140,962)

Other operating expenses - (63,637,579)

Profit from operations 328,960,622 299,285,332Financing cost 7,452,548 31,700,606

Profit before taxation 336,413,170 330,985,938

Income tax expense (115,255,124) (88,195,671)

Profit for the year 221,158,046 242,790,267

Earnings per share 4.42 3.88

DIRECTORATE

The names of the Directors of the Company as at date are

given under Corporate Information.

Mr. D. Razdan resigned from the board of Directors with

effect from 30th June 2006 and Mr. O. P. Puranmalka was

appointed with effect from 1st July 2006.

RETIREMENT BY ROTATION AND /OR OTHERWISE

By virtue of provisions contained in the Articles of

Association of the Company, the Directors are not subject

to Retirement by Rotation.

DIRECTOR’S INTERESTS IN CONTRACTS

The Directors of the Company have no direct and indirect

interest in any contract or proposed contract of the Company,

except those specified in Note 20 to the financial statement,which have been disclosed and declared at meetings of the

Directors in accordance with Section 203 of the Companies

Act No. 17 of 1982.

AUDITORS

The Accounts for the year under review have been audited

by Messrs KPMG Ford, Rhodes, Thornton & Company,

Chartered Accountants, who retire and being eligible offer

themselves for re-appointment for the year 2007/2008.

The Directors do recommend their re-appointment.

BY ORDER OF THE BOARD

Sgd. (Authorized Signatory)

INTERNATIONAL CONSULTANCY AND

CORPORATE SERVICES (PVT) LTD

SECRETARIES FOR ULTRATECH CEYLINCO

(PVT) LTD

10th April 2007

Colombo




110

REPORT OF THE AUDITORS

TO THE MEMBERS OF ULTRATECH CEYLINCO

(PVT) LTD.

We have audited the Balance Sheet of UltraTech Ceylinco

(Pvt) Ltd., as at 31st March, 2007 and the related Statements

of Income, Changes in Equity and Cash Flow for the year

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 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 year

ended at 31st March, 2007 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, 2007, and of its profit and cash flows for the

year 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

year ended 31st March, 2007, other than those disclosed in

Note 20 to these financial statements.

For KPMG FORD, RHODES, THORTON & CO

CHARTERED ACCOUNTANTS

Colombo, 10th April, 2007




111

}

Balance Sheet as at 31st March, 2007

31.03.2007 31.03.2006

ASSETS Note SLR INR SLR INR

Non-current assets

Leasehold land 8 28,724,351 11,361,670 29,837,744 12,936,934

Property, plant and equipment 9 462,978,102 183,127,008 480,312,872 208,252,199

491,702,453 194,488,678 510,150,616 221,189,133

Current assets

Inventories 10 234,903,216 92,913,947 217,476,820 94,292,759

Trade receivables 11 235,579,071 93,181,276 178,863,243 77,550,834

Other receivables 12 39,409,610 15,588,131 20,436,152 8,860,628

Prepayments and advances 8,088,492 3,199,334 1,625,318 704,699

Cash and cash equivalents 13 265,402,632 104,977,729 176,768,213 76,642,479

783,383,021 309,860,417 595,169,746 258,051,399

TOTAL ASSETS 1,275,085,474 504,349,095 1,105,320,362 479,240,532

EQUITY AND LIABILITIES

Equity

Share capital 14 500,000,000 197,770,701 500,000,000 216,788,068

Accumulated profits / (losses) 169,990,236 67,238,176 48,832,190 21,172,472

669,990,236 265,008,877 548,832,190 237,960,540

Non-current liabilities

Retirement benefit obligations 15 2,566,754 1,015,257 2,536,750 1,099,874

Deferred Taxation 16 46,172,295 18,263,054 13,543,162 5,871,992

48,739,049 19,278,312 16,079,912 6,971,866

Current liabilities

Trade payable 17 486,291,533 192,348,434 429,393,891 186,174,944

Other payables 18 38,882,495 15,379,637 41,277,942 17,897,131

Income tax payable 26,879,771 10,632,062 32,830,472 14,234,509

Accrued expenses 4,302,390 1,701,773 12,529,725 5,432,590

Bank overdraft - - 24,376,230 10,568,952

556,356,188 220,061,906 540,408,260 234,308,126

TOTAL EQUITY AND LIABILITIES 1,275,085,474 504,349,095 1,105,320,362 479,240,532

The figures in INR is converted at the rate of 2.5282 = 109.9/43.47 2.3064 = 102.9/44.615

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

K. C. Birla

Directors

A. R. Gunawardena




112

Income Statement for the period ended 31st March, 2007

Year ended 15 Months ended

31.03.2007 31.03.2006

Note SLR INR SLR INR

Turnover 1 4,777,959,022 1,977,756,205 4,349,045,969 1,897,216,356

Cost of sales (4,345,202,370) (1,803,518,266) (3,842,782,316) (1,676,365,234)

Gross profit 432,756,652 174,237,939 506,263,653 220,851,122

Other operating income 2 16,307,571 6,750,246 4,894,446 2,135,140

Administrative expenses (50,087,336) (20,732,815) (57,094,226) (24,906,635)

Distribution cost (70,016,265) (28,982,062) (91,140,962) (39,759,093)

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

Profit from operations 4 328,960,622 131,273,309 299,285,332 130,559,444

Financing income /(cost) 5 7,452,548 3,911,785 31,700,606 13,182,868

Profit before taxation 336,413,170 135,185,094 330,985,938 143,742,312

Income tax expense 6 (115,255,124) (47,707,930) (88,195,671) (38,474,247)

Profit for the year 221,158,046 87,477,163 242,790,267 105,268,065

Earnings per share - (Rs) 7 4.42 3.88

The figures in INR is converted at the rate of: 2.415848 = ((109.9+102.9)/2)/ ((44.615+43.47)/2) 2.29233 = ((99.65+102.9)/2)/ ((43.745+44.615)/2)

Statement of changes in equityFor the period ended 31st March, 2007

Share Capital Retained Total

Profits / (Losses)

SLR SLR SLR

Balance as at 1st January 2005 500,000,000 (93,958,077) 406,041,923

Profit for the 15 months 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

Profit for the year - 221,158,046 221,158,046

Dividend paid - (100,000,000) (100,000,000)

Balance as at 31st March 2007 500,000,000 169,990,236 669,990,236




113

Cash Flow Statement for the period ended 31st March, 2007

Year ended 15 Months ended

31.03.2007 31.03.2006

SLR INR SLR INR

Cash flows from operating activities

Profit from operations 328,960,622 131,273,309 299,285,332 130,559,445

Adjustments for :

Depreciation on property, plant and equipment 25,757,070 10,661,708 32,594,483 14,218,931

Amortisation of leasehold land 1,113,393 460,870 1,391,740 607,129

Provision for retiring gratuity 222,904 92,267 781,925 341,105

Exchange difference - (2,980,227) - 1,210,567

Provision for bad and doubtful debts (2,070,323) (856,976) - -

(Gain)/loss on translation of foreign currency (10,315,325) (4,269,856) 27,542,516 12,015,075

(Gain)/loss on disposal of property, plant and equipment (771,292) (319,263) (122,793) (53,567)

Operating profit before working capital changes 342,897,049 134,061,832 361,473,203 158,898,685

(Increase)/decrease in inventories (17,426,396) (7,213,365) (118,036,861) (51,492,089)

(Increase)/decrease in trade and other receivables (80,082,137) (33,148,661) (73,970,513) (32,268,702)

Increase/(decrease) in trade and other payables 46,274,861 19,154,704 33,355,518 14,550,923

Cash generated from operations 291,663,377 112,854,511 202,821,347 89,688,817

Interest paid - - (1,727,148) (753,446)

Dividends paid (100,000,000) (41,393,327) (100,000,000) (43,623,737)

Income tax paid (88,576,693) (36,664,840) (40,963,475) (17,869,798)

Retiring gratuity paid (192,900) (79,848) (215,875) (94,173)

Net cash flow from operating activities 102,893,784 34,716,496 59,914,849 27,347,663

Cash flows from investing activities

Purchase and construction of property, plant and equipment (8,422,301) (3,486,271) (3,567,450) (1,556,255)

Interest received 17,767,873 7,354,714 5,885,238 2,567,361

Proceeds from sale of property, plant and equipment 771,292 319,263 647,497 282,462

Net cash flow from investing activities 10,116,864 4,187,707 2,965,285 1,293,568

Net Increase/(Decrease) in Cash & Cash Equivalents 113,010,649 38,904,202 62,880,134 28,641,231

Cash and Cash Equivalents at the beginning of the year 152,391,983 66,073,527 89,511,849 37,432,296

Cash and Cash Equivalents at the end of the year 265,402,632 104,977,729 152,391,983 66,073,527

Cash and Cash Equivalents at period ended

Cash in hand 7,567,293 2,993,178 2,126,822 922,139

Cash at bank 257,835,339 101,984,551 174,641,391 75,720,340

Bank overdraft - (24,376,230) (10,568,952)

265,402,632 104,977,729 152,391,983 66,073,527




114

Year ended 15 Months ended31.03.2007 31.03.2006

SLR INR SLR INR

Notes to the Accounts for the period ended

31st March, 2007

Year ended 15 Months ended31.03.2007 31.03.2006

SLR INR SLR INR

1 T UR NO VE RTurnover - Cement 4,777,959,022 1,977,756,205 4,349,045,969 1,897,216,356

2 OTHER OPERATING INCOMEIncome from storage and handling 13,035,602 5 ,395 ,869 4,892,772 2,134,410Scrap sales 430,354 178,138 1,000 436Reversal of Provision forbad & doubtful debts 2 ,0 70 ,3 23 8 56 ,9 76 - -Gain on disposals of fixed assets 771,292 319,263 - -Lab service income - - 674 294

16,307,571 6 ,750 ,246 4,894,446 2,135,140

3 OTHER OPERATING EXPENSESLoss on disposal of property,plant & equipment - - 122,793 53,567NSL payment on assesment - - 3 0, 77 7, 17 9 1 3, 42 6, 15 5Promotion e xpense-International - - 3 2, 73 7, 60 7 1 4, 28 1, 36 8

- - 6 3, 63 7, 57 9 2 7, 76 1, 09 0

4 PROFIT FROM OPERATIONS Profit from operations is stated after charging all expenses including the following

Directors’ emoluments 1 ,9 88 ,2 29 8 22 ,9 94 1,615,883 704,909Auditors’ remuneration 400,000 165,573 340,000 148,321Depreciation and amortisationof leasehold land 26,870,462 10,628,380 3 3, 98 6, 22 2 1 4, 82 6, 06 0Donation 43,000 17,799 3,075,000 1,341,430Staff cost Note 2.1 40,003,477 16,558,770 2 4, 96 0, 56 5 1 0, 88 8, 73 1 2.1 Staff cost— Salaries and related costs 35,132,359 14,542,452 21,003,690 9,162,594— Defined contribution

plan cost-EPF and ETF 3,930,593 1 ,627 ,003 3,174,950 1,385,032— Defined benefit plan

cost-Retiring gratuity 940,525 389,315 781,925 341,105

40,003,477 16,558,770 2 4, 96 0, 56 5 1 0, 88 8, 73 1

5 FINANCING INCOME /(COST)Interest on overdrafts andtemporary facilities - - (1,727,148) (753,446)Interest income 17,767,873 7 ,354 ,714 5,885,238 2,567,361Gain/(loss) on translationof foreign currency (10,315,325) (3,442,929) 2 7, 54 2, 51 6 11 ,3 68 ,9 54

7,452,548 3 ,911 ,785 3 1, 70 0, 60 6 1 3, 18 2, 86 8

6 INCOME TAX EXPENSEIncome tax on profits 81,807,912 33,863,016 7 4, 46 6, 34 3 3 2, 48 5, 00 1Transfered to / (from)

deferred tax 32,629,133 13,506,284 13,543,162 5,908,033Social Responsibility Levy 818,079 338,630 186,166 81,213

115,255,124 47,707,930 8 8, 19 5, 67 1 3 8, 47 4, 24 7

Income tax on business incomeProfit before tax 336,413,170 135,185,094 330,985 ,938 144 ,388 ,434Disallowable expenses 28,034,438 11,604,387 3 8, 68 1, 04 8 1 6,8 74 ,11 8Allowable expenses (4,852,392) (2,008,566) ( 17 ,1 63 ,5 90 ) ( 7, 48 7, 39 9)

Total statutory income 359,595,216 144,780,914 352,503 ,396 153 ,775 ,153Tax loss brought forward fromprevious years claimed (125,858,326) (52,096,949) ( 123,376,188) ( 53 ,821 ,303)

Taxable Income 233,736,890 92,683,965 2 29 ,1 27 ,2 08 9 9, 95 3, 85 0

Tax liability @ 35%/(32.5%) 81,807,912 33,863,016 7 4, 46 6, 34 3 3 2, 48 5, 00 1

Income tax on profit 81,807,912 33,863,016 7 4, 46 6, 34 3 3 2, 48 5, 00 1

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 beclaimed in arriving at the Assessable Income is restricted to 35% of the total statutory income for theyear.

The tax loss of the Company brought forward from the year of assessment 2005/2006 was SLR.423,258,345 and the Company claimed SLR 125,858,326 during the year of assessment 2006/2007. The

tax loss carried forward for the year of assessment 2007/2008 is SLR 297,400,019.

7 EARNINGS PER SHAREThe calculation of the basic earnings per ordinary share is based on the profits attributable to theordinary shareholders divided by weighted average number of shares in issue during the year.

31.03.2007 31.03.2006SLR INR SLR INR

Net profit attributable to theordinary shareholders (Rs.) 221,158,046 87,477,163 242,790 ,267 105 ,268 ,065Number of ordinaryshares in issue 50,000,000 50,000,000 5 0, 00 0, 00 0 5 0, 00 0, 00 0Basic earnings per ordinaryshare-Annualised (Rs.) 4.42 1.75 3.88 1.68

8 LEASEHOLD LANDCost 38,946,767 15,405,059 3 8, 94 6, 76 7 1 6, 88 6, 38 9Cumulative amortisationA s a t the beginn ing of the year 9 ,109 ,023 3,602,996 7,717,283 3,346,030Charge for the year 1,113,393 440,393 1,391,740 603,425

Balance at the end of the year 10,222,416 4 ,043 ,389 9,109,023 3,949,455

Written down value 28,724,351 11,361,670 2 9, 83 7, 74 4 1 2, 93 6, 93 4

Leasehold land is amortised over the lease period of 30 years from15th August 1997

9 PROPERTY, PLANT AND EQUIPMENT - Refer next page

10 INVENTORIES

Naked cement 154,146,768 60,971,429 1 01 ,3 89 ,2 89 4 3, 95 9, 97 6Bags 2,568,850 1 ,016 ,087 1,414,783 613,416Stores and spares 12,174,655 4 ,815 ,580 13,599,995 5,896,633Goods-in-transit 66,012,942 26,110,852 1 01 ,0 72 ,7 53 4 3, 82 2, 73 4

234,903,216 92,913,947 2 17 ,4 76 ,8 20 9 4, 29 2, 75 9

11 TRADE RECEIVABLES

Trade receivables 267,079,361 105,640,945 2 12 ,4 33 ,8 56 9 2, 10 6, 25 0Provision for bad anddoubtful debts (31,500,290) (12,459,669) ( 33 ,570 ,613) ( 14 ,555 ,416)

235,579,071 93,181,276 1 78 ,8 63 ,2 43 7 7, 55 0, 83 4

12 OTHER RECEIVABLES

Receivable from AES - - 14,592,200 6,326,830VAT recoverable 38,330,145 15,161,159 5,718,088 2,479,227Others 1 ,0 79 ,4 65 4 26 ,9 72 125,864 54,571

39,409,610 15,588,131 20,436,152 8,860,628

13 CASH AND CASH EQUIVALENTS

Cash in hand 7,567,293 2 ,993 ,178 2,126,822 922,139Cash at bank 257,835,339 101,984,551 1 74 ,6 41 ,3 91 7 5, 72 0, 34 0

265,402,632 104,977,729 1 76 ,7 68 ,2 13 7 6, 64 2, 47 9

14 SHARE CAPITAL

Authorised 100,000,000 Ordinary Sharesof Rs 10/= each 1,000,000,000 395,541,401 1,000 ,000 ,000 433 ,576 ,136

Issued and fully paid 50,000,000 Ordinary Sharesof Rs10/= each 500,000,000 197,770,701 500,000 ,000 216 ,788 ,068

15 RETIREMENT BENEFIT OBLIGATIONS Provision for retiring gratuityAs at the beginning of the year 2,536,750 1 ,003 ,390 1,970,700 854,448Provision for the year 222,904 88,168 781,925 339,024

2,759,654 1 ,091 ,557 2,752,625 1,193,472Payments made during the year ( 19 2, 90 0) ( 76 ,3 00 ) (215,875) (93,598)

Balance at the end of the year 2,566,754 1 ,015 ,257 2,536,750 1,099,874

16 DEFERRED TAX LIABILITIES

As at the beginning of the year 13,543,162 5 ,356 ,881 - -Provision for the year 32,629,133 12,906,173 13,543,162 5,871,992

Balance at the end of the year 46,172,295 18,263,054 13,543,162 5,871,992

17 TRADE PAYABLES

UltraTech Cement Ltd 478,299,911 189,187,417 426,341 ,744 184 ,851 ,606

Other trade payables 7,991,621 3 ,161 ,017 3,052,147 1,323,338

486,291,533 192,348,434 429,393 ,891 186 ,174 ,944

18 OTHER PAYABLES

Retention money from contractors - - 10,409,883 4,513,477Debtors deposit 7,107,393 2 ,811 ,268 6,252,393 2,710,888

Withholding tax payable 277,034 109,578 177,929 77,146

Economic service charge payable - - 8,147,719 3,532,657

Stamp Duty Payable 365,636 144,624 - -

Due to Larsen and Toubro onaccount of AES - - 9,376,525 4,065,437

Distribution expenses payable 30,027,624 11,877,169 6,011,286 2,606,351

Others 1 ,1 04 ,8 08 4 36 ,9 97 902,207 391,175

38,882,495 15,379,637 4 1, 27 7, 94 2 1 7, 89 7, 13 1




116

31.03.2007 31.03.2006

SLR INR SLR INR

19 RELATED PARTY TRANSACTION

19.1 Identify of related parties

UltraTech Cement Ltd. Incorporated in India is the ultimate Parent Company.

The Company’s transactions with its related Companies are as follows.

UltraTech Cement Ltd

- Import of cement 3,487,243,521 1,443,486,116 2,190,341,157 955,508,656

- Import of spares for machinery 1,425,157 589,920 3,753,121 1,637,252

- Amount payable as at

the balance sheet date 478,299,911 189,187,417 426,341,744 184,851,606

Ceylinco Homes International Ltd.

- Sale of Cement - - 3,038,791 1,325,634

- Amount Receivable as at the Balance Sheet date - - 249,790 108,303

International Consultancy & Corporate Services (Pvt) Ltd

- Secretarial services 207,000 85,684 323,437 141,095

Ceylinco Insurance Company Ltd

- Insurance Services 1,024,592 424,113 15,056,015 6,567,996

- Commission on Sales 439,000 181,717 987,895 430,957

- Professional services - - - -

- Amount payable as at the balance sheet date - - 43,677 18,937

Ceylinco CISCO Security Transport & Allied Services (Pvt) Ltd - Cash Transportation services 287,709 119,092 431,250 188,127

- Security Services 1,493,573 618,240 - -

Ceylinco Internet Services Ltd.

- E-mail & Internet services 6,250 2,587 15,812 6,898

19.2 Transactions with key management personnel

Directors emoluments 1,988,229 822,994 - -

Key management personnel compensation

House rent 765,000 316,659 - -

Medical expenses reimbursement 73,763 30,533 - -

Travelling 248,530 102,875 - -

Other non cash benefits 177,848 73,617 - -

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. J. L. B. Kotelawala 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.

Ceylinco International Trading Co. Ltd.

International Consultancy & Corporate Services (Pvt) Ltd.

Mr. J. L. B. Kotelawala a Directors of the Company are 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. O. P. Puranmalka are directors of the Company.

Mr. Kiran G. Redkar is an alternative director for Mr. O. P. Puranmalka.

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




117

ACCOUNTING POLICIES

1. CORPORATE INFORMATION

• Domicile and Legal Form

Larsen and Toubro Ceylinco (Pvt) Ltd was incorporated on

29th August 1997 as a Private limited liability Company and

domiciled in Sri Lanka. Consequence to the change in the major

shareholder of the Company, the Company was renamed as

UltraTech Ceylinco (Pvt) Ltd on 11 March 2005.

• Principal Business Activities

The Company imports naked cement from India and markets it

in Sri Lanka in 50kg bags and in bulk form.

• The Name of the Parent Enterprise and The Ultimate Parent

Enterprise

The shareholding of the Company at the Balance Sheet date is

as follows.

UltraTech Cement Limited 80%

Ceylinco Insurance Company Ltd 18%

Ceylinco International Trading Ltd 2%

Accordingly, UltraTech Cement Ltd incorporated in India is the

Ultimate Parent Company.

1.1 Statement of Compliance

The financial statements have been prepared in accordance with

the accounting standards issued by the Institute of Chartered

Accountant of Sri Lanka (ICASL), and the requirements of the

Companies Act No. 17 of 1982.

1.2 Basis of Preparation

The financial statements are presented in Sri Lankan Rupees

and prepared on the historical cost basis. The Accounting Policies

are consistent with those used in the previous year.

1.3 Foreign Currency Transactions

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.

The estimated useful lives are as follows.

ASSET No. Of Years

Building 25

Plant and Machinery 25

Lab Equipment 06

Electronic Installation 25

Office Equipment 06

Motor Cars 07

Motor Cycles 10

HT Power line 25

Computers 06

Furniture & Fittings 06

2.2 Inventories

Inventories are stated at the lower of cost and net realisable

value. Net realisable value is the estimated selling price in the

ordinary course of business, less the estimated costs and selling

expenses.

The cost of inventory is based on the FIFO cost price principle

and includes expenditure incurred in acquiring the inventories

and bringing them to their existing location and condition.

2.3 Trade and Other Receivable

Trade and other receivable are stated at the amounts estimated

to be realised. Provisions have been made in the accounts where

necessary for bad and doubtful debts.

2.4 Cash and Cash Equivalents

Cash and cash equivalents comprise cash balance and short-term

highly liquid investments that are readily convertible to known

amounts of cash.

For the purpose of Statement of Cash Flow, cash and cash

equivalents are presented net of bank overdraft.




118

3. LIABILITIES AND PROVISIONS

All known liabilities have been accounted in preparing the financial

statements.

3.1 Classification of Liabilities

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 ownershiphave 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 assetsand 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.




119

N O T E S



SPECIMEN SIGNATURE(S) FORM

LEDGER FOLIO NO.________________ E-mail ID :_________________________ Date:______________

Name of the Shareholder(s) Specimen Signature(s) of shareholder(s) Father’s/ Husband’s Name Occupation

1.

2.

3.

4.

Address of the Sole/1st Shareholder:

___________________________________________________________________________________________

___________________________________________________________________________________________

City: State: Pin Code:

Signature to be Attested by Bank Manager(Seal with Stamp of Bank, Full Name, designation of Manager of Bankand address of the Bank)

Dear Shareholder(s)

Sub: Request for fresh Specimen Signature(s) of Shareholders holding Shares in Physical Form.

1. Your specimen signature(s) recorded with us are old and /or pattern of which in course of timemay have undergone change.

2. For providing better services to our shareholders and also to update our records we request you to

kindly arrange to forward to us or the RTA your fresh specimen signature(s) signed by you /allshareholder(s) and duly attested by the Manager of a Nationalised Bank with whom you aremaintaining your bank account.

3. On receipt of your duly attested signature(s), we shall update our records.

4. Please always quote your Ledger Folio while replying to us.

5. Please fill in your E-mail ID in the space provided.

6. We solicit your kind co-operation in the matter.


Registered Office :‘B’ Wing, Ahura Centre, 2nd Floor, Mahakali Caves Road,

Andheri (East), Mumbai 400 093



UltraTech Cement LimitedRegistered Office :

‘B’ Wing, Ahura Centre, 2nd Floor, Mahakali Caves Road,Andheri (East), Mumbai 400 093

ANNUAL GENERAL MEETING - 20th JULY, 2007 AT 3.30 P.M.

ATTENDANCE

SLIP

NAME & ADDRESS OF THE REGISTERED SHAREHOLDER NAME & ADDRESS OF THE REGISTERED SHAREHOLDERDP. ID

Client ID/Folio No.

No. of Shares

I certify that I am a registered shareholder/proxy for the registered shareholder of the Company.

I hereby record my presence at the ANNUAL GENERAL MEETING of the Company at Ravindra NatyaMandir, P. L. Deshpande Maharashtra Kala Academy, Near Siddhivinayak Temple, Sayani Road, Prabhadevi,Mumbai 400 025 on Friday, 20th July, 2007 at 3.30 p.m.

.................................................................Member’s/Proxy’s Signature

Note : Please complete this and hand it over at the entrance of the hall.

UltraTech Cement LimitedRegistered Office :

‘B’ Wing, Ahura Centre, 2nd

Floor, Mahakali Caves Road,Andheri (East), Mumbai 400 093

FORM OF PROXY

DP. ID

Client ID/Folio No.

No. of Shares

I/We ............................................... ................................................ ........................................................................

of ...................................................... in the district of..........................................being a member/members of

UltraTech Cement Limited hereby appoint.......................................................................................................

of .............. ................ ............ in the district of .............................................. ............................... or/failing him

............... ............... ............... of .............. ...... in the district of ........................................................ ...................

as my/our proxy to vote for me/us on my/our behalf at the ANNUAL GENERAL MEETING of theCompany to be held on Friday, 20th July, 2007 and at any adjournment thereof.

Signed this ............ day of ..................... 2007

(TEAR HERE)

Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the

Company, not less than 48 hours before the commencement of the Meeting.

Signature .. ....... ...... ...... ... ...... ...... ....... ...... ....

Affix aRe. 1

RevenueStamp


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