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BOARD OF DIRECTORS

(As on 29th June, 2004)

J. K. JainExecutive Chairman

S. P. JainManaging Director

Virendra Jain

K. M. Doongaji

S.H. Junnarkar

D. K. Contractor

Dr. P. P. Shah

S. N. Chaturvedi

Gaurav Jain

V. S. PanditDirector-Works

COMPANY SECRETARY

D. V. Iyer

AUDITORS

Chaturvedi & ShahChartered Accountants

BANKERS

Canara Bank

19THANNUAL REPORT 2003 - 2004

REGISTERED OFFICE :

A-3, M.I.D.C. Indl. Area,Nanded-431 603,Maharashtra.

MANUFACTURING FACILITIES AT :

1. Plastic Processing Division :Plot No. A-2/4, Plot No. A-2/8, Plot No. C-2/1M.I.D.C., Murbad, Dist. Thane, Maharashtra.

Plot No. 444, Masat Village

Plot No. S. N. 103/1/2, Rakholi Village, Silvassa,(Dadra & Nagar Haveli (U.T.))

Plot No. 481/1-2, Dabhel VillageDaman (U.T.)

140/1/1/1-1-140/1/1/9, Village KhadoliSilvassa [(Dadra & Nagar Haveli (U.T.)]

2. Sipta Coated Steels DivisionA-3, M.I.D.C. Indl. Area,Nanded, Maharashtra.

3. Comet Steels Division

A-4, M.I.D.C. Indl. Area,Nanded, Maharashtra.

REGISTRARS & TRANSFER AGENT

KARVY COMPUTERSHARE PVT LIMITED

1. KARVY HOUSE

46, Road No. 4, Street No. 1,

Banjara Hills, Hyderabad - 500 034.

Tel. : 040-23312454/23320251/751/752

Fax : 040-23311968

2. 7, Andheri Industrial Estate,

Off Veera Desai Road,

Andheri (West),

Mumbai - 400 053.

Tel. : 022-26730153/0292/0311/0799/0843

Fax : 022-26730152

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NOTICE

NOTICE is hereby given that the Ninteenth Annual GeneralMeeting of the Members of JAI CORP LIMITEDwill be held onFriday, the 10th September, 2004 at 2.00 p.m. at the RegisteredOffice of the Company at A-3, MIDC Industrial Area,Nanded 431 603 (Maharashtra) to transact the following

business :ORDINARY BUSINESS :

1. To receive, consider and adopt the Profit and Loss Accountfor the year ended 31st March, 2004 and Balance Sheet asat that date together with the Directors Report and AuditorsReport thereon.

2. To appoint a Director in place of Shri Virendra Jain whoretires by rotation and being eligible, offers himself forre-appointment.

3. To appoint a Director in place of Shri S H Junnarkar, whoretires by rotation and being eligible, offers himself forre-appointment.

4. To appoint a Director in place of Dr. P P Shah who retiresby rotation and being eligible, offers himself forre-appointment.

5. To appoint Auditors who shall hold office from conclusionof this Annual General Meeting until the conclusion of thenext Annual General Meeting and to fix their remuneration.

SPECIAL BUSINESS :

6. RESOLVED THAT Shri S N Chaturvedi, who was appointedby the Board of Directors as an Additional Director of theCompany and who holds office upto the date of NinteenthAnnual General Meeting, being eligible for appointment andin respect of whom Notice in writing under Section 257 of

the Companies Act, 1956, has been received by theCompany, be and is hereby appointed as a Director of theCompany.

7. RESOLVED THAT Shri Gaurav Jain, who was appointedby the Board of Directors as an Additional Director of theCompany and who holds office upto the date of NinteenthAnnual General Meeting, being eligible for appointment andin respect of whom Notice in writing under Section 257 ofthe Companies Act, 1956, has been received by theCompany, be and is hereby appointed as a Director of theCompany.

By Order of the Board of Directors

Mumbai J. K. JAIN29th June, 2004 Executive Chairman

NOTES :

1. An Explanatory Statement under Section 173(2) of theCompanies Act, 1956 relating to the Special Business tobe transacted at the meeting is annexed hereto.

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE

MEETING IS ENTITLED TO APPOINT A PROXY TOATTEND AND VOTE INSTEAD OF HIMSELF AND APROXY NEED NOT BE A MEMBER. The instrumentappointing a proxy or the Power of Attorney if any underwhich it is signed should be deposited at the RegisteredOffice of the Company not less than 48 hours before thetime of holding the aforesaid meeting.

3. The Register of Members and Share Transfer books willremain closed from Wednesday, the 1st September, 2004to Friday, the 10th September, 2004 (both days inclusive).

4. The amount of unclaimed dividend for the financial yearended 31st March, 1996 has been transferred to theInvestors Education and Protection Fund pursuant to theprovisions of Section 205C of the Companies Act, 1956.

The Members who have not encashed the dividend warrant(s) for the financial Year ended 31-03-1997 to 31-03-2001are requested to make their claim to the Registrars andTransfer Agent, M/s Karvy Computershare Pvt. Ltd. It mayalso be noted that once the unpaid dividend is transferredto the Fund as above, no claim shall lie with the Companyin respect of such amount.

5. The Members who are holding shares in identical order ofnames in more than one folio are requested to send theCompany details of such folios together with the sharecertificates for consolidating their holding in one folio. The

Share certificate will be returned to the member after makingrequisite changes thereon.

6. Non-resident Indian Shareholders are requested to informthe Company immediately :-

The change in the Residential status on return to Indiafor permanent settlement.

The particulars of NRE Bank Account maintained in India.

Copy of RBI permission.

7. Consequent upon the introduction of Section 109A of theCompanies Act, 1956, Shareholders are entitled to make

nomination in respect of shares held by them in physicalform. Shareholders desirous of making nominations arerequested to send their requests in Form 2B(which will bemade available on request) to the Registrar and TransferAgents, M/s Karvy Computershare Pvt. Limited.

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EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956 :

Item No. 6 :

In order to broad base the Board, Shri S.N.Chaturvedi wasappointed as an Additional Director by the Board of Directorsat their meeting held on 12th March, 2004.

Shri S. N. Chaturvedi is highly qualified professional havingdegrees and qualifications of B.Tech (Hons), MBA, FCA. Hehas over 20 years experience as a practicing CharteredAccountant as partner of M/s. Chaturvedi & Company, CharteredAccountants. He is heading the Mumbai Branch of the Firm.

He is having vast knowledge in the areas of Audit & Taxation,Project Finance, Corporate Finance, Investment Banking,Amalgamation & Mergers, Corporate laws, InternationalFinance, Corporate Advisory Services, International Taxation,Due Diligence exercises, Valuation of business/companies,Restructuring & Rehabilitation and Strategic Business Planning.

He is also having varied experience of Audit of Banks, FinancialInstitutions, Public Sector Units and large Corporates. He is

also having valuable experience in monitoring/ inspection/investigation of units/companies at the behest of FinancialInstitutions/Banks, Income Tax authorities, High Courts,Company Law authorities as well as inspection of Mutual Funds,Stock Exchange Brokers and Plantation companies on behalfof SEBI.

He has presented several papers at Seminars on the Capitalmarkets, Investment Banking, Project Finance, Working CapitalManagement and Mutual Funds. He has travelled extensivelyabroad in connection with Joint Ventures, Technical andFinancial collaborations.

Shri Chaturvedi is Chairman of Audit Committee of the Boardof Directors of N. R. Agarwal Industries Limited and UTI

Securities Limited . He is also on the Board of Tufropes PrivateLimited, Incab Industries Limited, Shree Synthetics Limited,DCM Shriram Consolidated Limited and Balkrishna IndustriesLimited.

In accordance with the provisions of Section 260 of theCompanies Act, 1956, Shri Chaturvedi will hold office upto thedate of this Annual General Meeting. A notice under Section257 of the Companies Act, 1956 has been received by a Membersignifying his intention to propose Shri S.N.Chaturvedi asDirector of the Company. The Board considers Mr Chaturvedisassociation as a Director in the best interest of the Companyand recommend passing of the ordinary resolution. None of

the Directors, except Shri S. N.Chaturvedi are, in any way,concerned or interested in the resolution.

Item No. 7 :

Shri Gaurav Jain was appointed as an Additional Director by

the Board of Directors at their meeting held on 12th March,2004.

Shri Gaurav Jain has graduated with dual degrees from TheWharton School Bachelor of Science in Economics withspecialisation in Finance and School of Engineering and AppliedScience Bachelor of Science in Engineering with Major inComputer Science and Engineering from University ofPennsylvania, USA.

He is on the Board of Cellbion Interactive Private Limited whichis a business process outsourcing (BPO) Company focused invoice operations. He has set up the Company from base andrecruited a professional team to take management control ofthe organisation. He is also on the Board of Pet Fibres Limited

which is engaged in the manufacturing of woven sacks.

As per the provisions of Section 260 of the Companies Act,1956, Shri Gaurav Jain will hold office upto the date of thisAnnual General Meeting. A notice under Section 257 of theCompanies Act, 1956 has been received by a Member signifyinghis intention to propose Shri Gaurav Jain as Director of theCompany.

The Board considers Shri Gaurav Jain association as a Directorwould be beneficial to the Company and recommend passingof the ordinary resolution.

Shri Gaurav Jain may be considered interested in the resolutionsince it relates to his appointment as Director. Shri J K Jain,

Shi S P Jain and Shri Virendra Jain may be deemed to beinterested in the resolution pertaining to the appointment of ShriGaurav Jain, as they are related to each other. Save and exceptas above, none of the other Directors is in any way concernedor interested in the resolution.


Mumbai, J. K. JAIN29th June, 2004 Executive Chairman

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DIRECTORS REPORT

The Directors have pleasure to present the Ninteenth AnnualReport and Accounts for the year ended 31st March, 2004.

FINANCIAL RESULTS

(Rs. In lacs)

31-03-2004 31-03-2003

Sale & Services (Gross) 21,741.86 22,585.62

Less: Excise duty recovered on sale 1,942.23 1,983.23

Net Sales 19,799.63 20,602.39

Operating Profit 4,809.36 3,124.14

Less : Provision for diminution in

Investments 28.14 306.33

Less : Finance Charges 32.43 42.70

Gross Profit 4,748.79 2,775.11

Less : Depreciation 830.26 900.25

Profit Before Tax 3,918.53 1,874.86

Less : Provision for Tax 1,159.31 166.07

Profit after Tax 2,759.22 1,708.79

Balance brought forward from

last year 2,522.77 867.95

Prior period Adjustments (Net) 0.77 18.83

Excess provision for Income Tax

in earlier years 26.91 97.20

Amount available for Appropriations 5,309.67 2,692.77

Appropriations :

General Reserve 275.00 170.00

Surplus carried to Balance Sheet 5,034.67 2,522.77

Total 5,309.67 2,692.77

DIVIDEND :

In order to conserve the resources of the Company the Boardhave decided not to recommend any dividend on Equity Sharesof the Company.

OPERATIONS :

During the year under review, the Company was able to maintainits performance in the Steel Division, inspite of stiff competitionin the international markets. The Company has discountinuedits manufacturing operations at Plastic Processing Unit situatedat Rakholi (Silvassa) from November, 2003 and after the closeof the financial year, at Masat (Silvassa) and Daman.

EXPORT ORIENTED UNIT :

The 100% EOU established by the Company for manufactureof woven sacks, fabric, etc.at Village Khadoli in Silvassa hasachieved an export Turnover of Rs.12 crores, during the yearunder review.

FIXED DEPOSITS :

The Company has not accepted any fixed deposits within themeaning of Section 58A of the Companies Act, 1956, and therules framed thereunder.

LISTING OF EQUITY SHARES :

The Companys equity shares are listed on the following StockExchanges :

The Stock Exchange, Mumbai

The National Stock Exchange of India Limited

The Company has paid the Listing fees to all the above Stock

Exchanges for the period 01-04-2004 to 31-03-2005.

DIRECTORS :

In accordance with the provisions of the Companies Act, 1956and Companys Articles of Association, Shri Virendra Jain, ShriS H Junnarkar and Dr. P P Shah, retire by rotation and beingeligible offer themselves for reappointment.

Shri S N Chaturvedi and Shri Gaurav Jain were appointed asAdditional Directors on the Board on 12th March, 2004 and holdoffice upto the date of the ensuing Annual General Meeting.Notice has been received under Section 257 of the CompaniesAct, 1956, proposing their candidature to the office of Directorof the Company. The Directors of your Company recommend

their appointment.

DIRECTORS RESPONSIBILITY STATEMENT :

Pursuant to the requirement under Section 217 (2AA) of theCompanies Act, 1956, with respect to Directors ResponsibilityStatement, it is hereby confirmed :

(i) that in the preparation of the accounts for the financial yearended 31st March, 2004, the applicable accountingstandards had been followed along with proper explanationrelating to material departures;

(ii) that the directors had selected such accounting policies andapplied them consistently and made judgements andestimates that are reasonable and prudent so as to give a

true and fair view of the state of affairs of the Company atthe end of the year and of the profit of the Company for theyear under review :

(iii) That the directors had taken proper and sufficient care forthe maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;

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(iv) that the directors had prepared the accounts for the financialyear ended 31st March, 2004 on a going concern basis.

AUDITORS AND AUDITORS REPORT :

M/s Chaturvedi & Shah, Chartered Accountants, Auditors of theCompany holds office until the conclusion of the ensuing AnnualGeneral Meeting. The Company has received a certificate from

them to the effect that their appointment, if made, would bewithin the prescribed limits under Section 224(1-B) of theCompanies Act, 1956. The notes to the Accounts referred to inthe Auditors Report are self explanatory and therefore do notcall for any further comments.

DISCLOSURE OF PARTICULARS REALTING TOCONSERVATION OF ENERGY, TECHNOLOGY ABSORPTIONAND FOREIGN EXCHANGE :

Information in accordance with the provisions of Section 217(1) (e)of the Companies Act, 1956 read with Companies (Disclosuresof Particulars in the Report of Board of Directors) Rules, 1988,regarding conservation of energy, technology absorption andforeign exchange earnings and outgo are given in the AnnexureA forming part of this report.

SUBSIDIARY COMPANY :

As required under Section 212 of the Companies Act, 1956 copyof Balance Sheet and Profit and Loss account and report ofDirectors and Auditors in respect of subsidiary Company isattached for members perusal.

PARTICULARS OF EMPLOYEES :

Information in accordance with the provisions of Section 217(2A)of the Companies Act, 1956 read with Companies (Particulars

of Employees) Rules, 1975 as amended, the names and otherparticulars of the employees are given in the Annexure B formingpart of this report.

INDUSTRIAL RELATIONS :

The relations with the employees continued to be cordial andsatisfactory.

CORPORATE GOVERNANCE :

The Company has complied with the applicable requirementsunder Clause 49 of the Listing Agreement with the StockExchange. A separate section on Corporate Governance and aCertificate from the Auditors of the Company regardingcompliance of conditions of Corporate Governance as stipulatedunder Clause 49 of the Listing Agreement with the StockExchanges, forms part of the Annual Report.

ACKNOWLEDGEMENTS :

Your Directors express their grateful appreciation for theassistance and co-operation received from the Banks,Institutions, Government Authorities, Customers, Vendors andShareholders during the year under review. Your Directors placeon record their deep sense of appreciation for the devotedservices of the Executives, Staff and Workers of the Company.



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ANNEXURE A TO DIRECTORS REPORT

PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OFDIRECTORS) RULES, 1988

A) CONSERVATION OF ENERGY :

(a) The Company has taken various steps for minimisation of energyconsumption by putting continuous efforts towards optimisationof operating and processing activities, upgradation of plant

equipments, etc.(b) Additional investments and proposals if any, being implemented

for reduction of consumption of energy :The Company is not planning any major additional investmentsand proposals in this regard.

(c) Impact of the measures at (a)and (b) above for reduction ofenergy consumption and consequent impact on the cost ofproduction of goods:Due to various steps taken, the Company has been able toconserve the energy more effectively.

(d) FORM- AForm for Disclosure of Particulars with respect to Conservation

of Energy.

Current Year PreviousYearEnded Ended

31.03.2004 31.03.2003

a) Power and FuelConsumption1. Electricity

(a) PurchasedUnits 26,107,862 27,196,874Total Amount (Rs.) 93,639,602 95,526,503Average Rate/Unit (Rs.) 3.59 3.51

(b) Own generation throughDiesel GeneratorUnits 562,484 1,384,394Unit per ltr. of Diesel Oil 3.23 3.11Average Rate/Unit (Rs.) 6.23 5.55

2. Others

a) HSDQuantity (KL) 1513.18 2,038.69Total Amount (Rs.) 31,800,544.00 33,743,856.00Average Rate/KL (Rs.) 21,015.73 16,551.71

b) LPGQty(KL) 403.24 427.55Total Amount (Rs.) 8,084,526.00 7,706,457.00Average Rate ( Rs. Per KL) 20,048.92 18,024.69

Consumption per unit of production :

Year ended 31.03.2004 Year ended 31-03-2003

Product GP/GC CR Coil/ Woven GP/GC CR Coil/ Woven

Coils/ Sheets sacks / Coils/ Sheets Sacks/ Sheets Fabrics / Sheets Fabrics / Bags Bags

Production (MT) 48,003 46,903 7,240 60,986 59,780 7,578

Electricity 99.61 256.74 1,280.89 87.16 219.62 1,336.48

Others

a) HSD (KL) 0.02 0.01 0.02 0.01 0.04

b) LPG ( KL) 0.01 0.01

B. RESEARCH & DEVELOPMENT (R & D) :

In house Research & Development work is carried out todevelop the new products/improve the existing productsby the Company. No significant expenditure is incurred.

C. TECHNOLOGY ABSORPTION, ADAPTATION AND

INNOVATION :The Company had not imported any technology during lastfive years from the beginning of the financial year ended31-03-2004, hence the required information is notapplicable to the company.

D FOREIGN EXCHANGE EARNINGS AND OUTGO :

The Company has exported its products during the yearunder review and has imported raw materials, store itemsand capital items, the details of which are as follows:

(Rs. in lakhs)

1) FOB Value of Exports Rs. 6000.24

2) CIF Value of Import Rs. 127.42

3) Expenditure in Foreign Currency Rs. 61.05



ANNEXURE B TO DIRECTORS REPORT

PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 217 (2A) OF THE COMPANIES ACT, 1956 READ WITH COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975.Name Age Designation/ Remuneration Qualification Total Date of Last employment held

(Years) Nature of duties Rs. Experience Employment Designation - period foryears which post held

A) Employed throughout the year and in receipt of remuneration aggregating not less than Rs. 24,00,000/- per year.

J. K. Jain 72 Executive Chairman 26,69,201 Matric 53 01.10.95 BusinessS. P. Jain 49 Managing Director 26,72,249 B.Com. 28 01.10.95 Comet Steels Ltd. Managing Director (10 years)Notes :1. Remuneration as above includes Salary, Allowance, bonus, ex-gratia, leave travel assistance, reimbursement of medical expenses, Companys contribution to Provident Fund and monetary value

of other perquisites calculated in accordance with provisions of the Income-tax Act, 1961 and rules thereunder.2. The nature of employment in al l cases is contractual3. No employee mentioned above is related to any director of the Company except Shri J. K. Jain and Shri S. P. Jain, who are related to each other and they are also related to Shri Virendra Jain and

Gaurav Jain, Directors of the Company.By Order of the Board of Directors

J. K. jainMumbai, 29th June, 2004 Executive Chairman

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REPORT ON CORPORATE GOVERNANCE

1. Companys philosophy on code of governance :

The Company strongly believes in fair, efficient and transparentbusiness operations, proper disclosure of relevant information andto serve the best interest of all the stakeholders, viz., the employees,shareholders, customers, the Government and the Society at large.

2. Board of Directors :

The present strength of the Board is ten Directors. The Boardcomprises of Executive and Non - Executive Directors.

Three Directors- Chairman , Managing Director and Director- Worksare executive Directors. There are seven Non- executive Directors ofwhich five Directors are independent Directors. The number ofindependent Directors on the Board is in conformity with therequirement of Clause 49 (I) (A) of the Listing Agreement.

Nine Board Meetings were held during the year ended 31st March,2004 on 17th June, 2003, 31st July, 2003, 10th September, 2003,

17th October, 2003, 31th October, 2003, 4th December, 2003, 5thJanuary, 2004, 4th February, 2004, and 12th March, 2004.

Name of the Category of No. of Board No. of Other No. of other BoardDirector Directorship Meetings Directorships committees

Attended Held (in Public positions heldCompanies)

Shri J.K.Jain Chairman 9 1 NIL(Executive)

Shri S. P. Jain Managing Director 9 3 1 - Member(Executive) 1 - Chairman

Shri Virendra Jain Non-executive 7 3 Nil

Shri K. M. Doongaji Non-executive, Independent 9 NIL NIL

Shri S.H. Junnarkar Non-executive, Independent 6 14 8 - Member

Shri D.K. Contractor Non-executive, Independent 8 5 4 - Member

Shri V. S. Pandit Executive, Director Works 3 NIL NIL

Dr. P. P. Shah Non-executive, Independent 4 5 3 - Member

# Shri S N Chaturvedi Non-executive, Independent 1 4 2 - Chairman

# Shri Gaurav Jain Non-executive 1 Nil NIL

# Appointed as Additional Director wef 12th March, 2004

Brief Resume of Directors who are proposed to be appointed/re-appointed :

Shri S N Chaturvedi :

Shri S.N.Chaturvedi is highly qualified professional having degrees andqualifications of B.Tech (Hons), MBA, FCA.

He has over 20 years experience as a practicing Chartered Accountantas partner of M/s. Chaturvedi & Company, Chartered Accountants. He isheading the Mumbai Branch of the Firm.

He is having vast knowledge in the areas of Audit & Taxation, ProjectFinance, Corporate Finance, Investment Banking, Amalgamation &Mergers, Corporate laws, International Finance, Corporate AdvisoryServices, International Taxation, Due Diligence exercises, Valuation ofbusiness/companies, Restructuring & Rehabilitation and StrategicBusiness Planning.

He is also having varied experience of Audit of Banks, Financial Institutions,Public Sector Units and large Corporates. He is also having valuableexperience in monitoring/ inspection/ investigation of units/companies at thebehest of Financial Institutions/Banks, Income Tax authorities, High Courts,Company Law authorities as well as inspection of Mutual Funds, StockExchange Brokers and Plantation companies on behalf of SEBI.

He is also on the Board of Balksrishna Industries Ltd, DCM ShriramConsolidated Ltd., N R Agarwal Industries Ltd., and UTI Securities Ltd.

Shri Gaurav Jain :

Shri Gaurav Jain has graduated with dual degrees from The Wharton

School Bachelor of Science in Economics with specialisation in Financeand School of Engineering and Applied Science Bachelor of Science inEngineering with major in Computer Science and Engineering fromUniversity of Pennsylvania, USA.

He is on the Board of Cellbion Interactive Private Limited which is abusiness process outsourcing (BPO) Company focused in voiceoperations. He has set up the company from base and recruited aprofessional team to take management control of the organisation. He isalso on the Board of Pet Fibres Limited which is engaged in themanufacturing of woven sacks.

Shri Virendra Jain :

Shri Virendra.Jain is a Commerce Graduate from Bombay University. Heis associated with the Company since 1986.

He is having more than 18 years experience in manufacturing and is havingoverall responsibility of marketing and export functions of HDPE/PP woven

bags and sacks. He has taken major initiatives in development ofCompanys Exports in the International markets. He is also on the Boardof Nidhi Polyster Ltd, Pet Fibres Ltd., and Suniti Commercials Ltd.

Shri S H Junnarkar :

Shri S H Junnarkar is a B.Sc. graduate, a Law graduate from the BombayUniversity and a Solicitor by profession. Before setting up his independentpractice, he was associated with M/s Kanga & Company, a reputed LawFirm as a Partner for over 21 years and has specialised in Banking laws,Corporate laws including Monopolies laws, Exchange Control laws andSecurities Regulations.

None of the Directors were able to attend the 18th Annual General Meetingheld on 26.08.2003, due to the bomb blasts that occured in Mumbai on25.08.2003.

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REPORT ON CORPORATE GOVERNANCE (Cond.,)

He is also on the Board of various companies like Ambuja Cement IndiaLtd., Ambuja Cement Rajasthan Ltd., Excel Crop Care Ltd., ILFSInfrastructure Development Corporation Ltd., IPCL, Reliance Capital Ltd.,Reliance Industrial Infrastructure Ltd., Reliance Ind. Inv. & Holdings Ltd.,Reliance Life Insurance Co. Ltd., Reliance Ports and Terminals Ltd., SterliteIndustries Ltd., TilakNagar Inds. Ltd., and. Interconnected Stock Exchange

of India Ltd.,Shri P P Shah :

Dr. P. P. Shah is practising Chartered Accountant having over 32 years ofprofessional experience in the areas of Financial Consultancy, CorporateStructering/ Restructering, Management Consultancy, ForeignCollaborations, Business Re-Organisations (Mergers, Acquisitions, De-Mergers, Slump Sale Etc.) Taxation, Valuation, Property Matter Accounting,Auditing, Company Law and FEMA (out of which 6 years were in U.S.A.) .

He is also a member of the Institute of Cost and Works Accountants ofIndia (ICWA) and has also done his Ph. D. in Cost Accounting, Universityof Bombay. He is also a Member of Taxation Committee of The IndianMerchants Chambers.

He is also on the Board of various companies like Adani Exports Ltd.,Himachal Futuristic Communications Ltd., J. M. Financial & Investment

Consultancy Services Pvt. Ltd., Benchmark Trustee Company Ltd., ClarisLife Sciences Ltd., Bhansali Engineering Polymers Ltd., etc.

3. Audit Committee :

The Company has constituted Audit Committee comprising of threeNonexecutive Directors viz. Shri K. M. Doongaji as Chairman of theCommittee and Shri D.K. Contractor and Shri Virendra Jain asmembers. The majority of the members are independent Directors.The constitution of Audit Committee also meets with the requirementsunder Section 292A of the Companies Act, 1956 and Clause 49 ofthe Listing Agreement.

The terms of reference stipulated by the Board to the Audit Committee,are as contained under Clause 49 of the Listing Agreement, as follows:

a. Oversight of the Companys financial reporting process and thedisclosure of its financial information.

b. Recommending the appointment and approval of externalAuditors, fixation of audit fee and also approval for payment forany other service.

c. Reviewing with management the annual financial statementsbefore submission to the Board, focussing primarily on (i) anychanges in accounting policies and practices, (ii) majoraccounting entries based on exercise of judgement bymanagement, (iii) qualifications in draft audit report, (iv) significantadjustments arising out of audit, (v) the going concernassumption, (vi) Compliance with accounting standards, (vii)compliance with Stock Exchange and legal requirementsconcerning financial statements and (viii) any related partytransactions of the company of material nature, with promotersor the management , their subsidiaries or relatives etc. that mayhave potential conflict with the interests of Company at large.

d. Reviewing with the management, external and internal auditors,the adequacy of internal control systems.

e. Reviewing the adequacy of internal audit functions.

f. Discussion with internal auditors any significant findings andfollow up there on.

g. Reviewing the findings of any internal investigations by theinternal auditors into matters where there is suspected fraud orirregularity or failure of internal control systems of a materialnature and reporting the matter to the board.

h. Discussion with external auditors before the audit commencesnature and scope of audit as well as have post-audit discussionto ascertain any area of concern.

i. Reviewing the Companys f inancial and risk managementpolicies.

j. To look into the reasons for substantial defaults in the paymentto the depositors, debenture holders, shareholders ( in case of

non payment of declared dividend) and creditors.

The Audit Committee met three times during the year 2003-2004,on 17th June, 2003, 31st October, 2003 and 4th February, 2004.Shri K.M. Doongaji and Shri D. K. Contractor were present forthree meetings and Shri Virendra Jain was present for twomeetings.

Shri K M Doongaji, Chairman of the Audit Committee was notable to attend the 18th Annual General Meeting held on26.08.2003, due to the bomb blasts that occured in Mumbai on25.08.2003.

4. Remuneration Committee & details of remuneration to Directors:

The Company has not constituted a remuneration committee andpresently, there are three whole time Directors and the remuneration

paid to them are subject to the limits laid down under Sections 198and 309 and Schedule XIII to the Companies Act, 1956. Theremuneration consists of Salary, Companys contribution to ProvidentFund and Superannuation Fund, and other perquisites and allowancesin accordance with the rules of the Company, applicable from time totime.

The Whole Time Directors are not paid any sitting fees for attendingthe Board/ Committee meetings. The Non executive Directors arepaid sitting fees @ Rs. 2000/- per meeting and out of pocket expensesto attend the meetings. The sitting fees has been increased fromRs.2000/- to Rs.5,000/- wef 17th April, 2004.

The details of remuneration paid to the Directors (including perquisitesand allowances) for the year ended 31st March, 2004 are as under :

Name of Sitting Salary Perquisites TotalDirector Fees

Shri J. K. Jain NIL 24,00,000 2,69,201 26,69,201

Shri S. P. Jain NIL 24,00,000 2,87,749 26,87,749

Shri Virendra Jain 18,000 NIL NIL 18,000

Shri K. M. Doongaji 24,000 NIL NIL 24,000

Shri S. H.Junnarkar 12,000 NIL NIL 12,000

Shri D. K.Contractor 22,000 NIL NIL 22,000

Shri V. S.Pandit NIL 8,74,240 15000 8,89,240

Dr. P. P.Shah 8,000 NIL NIL 8,000

Shri S. N. Chaturvedi 2,000 NIL NIL 2,000

Shri Gaurav Jain 2,000 NIL NIL 2,000

The Company has paid Rs. 35,15,200/- as professional Chargesduring the period under review to M/s Pravin P Shah & Associates,Chartered Accountants and M/s PPS & Associates, CharteredAccountants, firms in which Dr. Pravin. P. Shah, is a partner.

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5. Share Transfer and Investors Grievances Redressal Committee

The Company has delegated the powers to approve the transfer ofshares to the Executive Committee consisting of Shri Virendra Jain,a non-executive director- Chairman and Shri S. P. Jain. The ShareTransfer committee has met 29 times during the year.

Name and designation of Compliance Officer :

Shri D V Iyer, Company Secretary

1038 Shareholders complaints were received during the year ended31-03-2004 and were resolved to the satisfaction of shareholders

No requests were pending for transfer and/or dematerialisation forapproval as on 31st March, 2004.

6. General Body meetings

Location and time, where last three Annual General meeting held :

LOCATION DATE & TIME

18th Annual Registered Office at 26th August, 2003

General Meeting A-3, MIDC Industrial at 2 p.m.Area, Nanded - 431 603.Maharashtra

17th Annual ..........do............ 30th September, 2002General Meeting at 2 p.m.

16th Annual ..............do........... 26th September, 2001General Meeting at 2 p.m.

No resolution requiring Postal Ballot as required by the Companies(Passing of the Resolution by Postal Ballot) Rules, 2004/Clause 49of the Listing Agreement has been placed for Shareholders approvalat this Annual General Meeting.

7. Disclosures :

Materially significant related party transactions i.e. transactions of

the Company of material nature with its promoters, the directors orthe management, the subsidiaries or relatives etc. that may havepotential conflict with the interests of the Company at large.

None of the transactions with any of the related parties were in conflictwith the interest of the Company.

Non- compliance by the Company, penalties, strictures imposed onthe Company by Stock Exchanges, or SEBI or any statutory authority,on any matter related to capital markets, during the last three years.The National Stock Exchange (NSE) had suspended trading in theCompanys shares from April 2003 to mid-August 2003 due to non-compliance of some clauses of the l isting agreement, the suspensionof which was subsequently revoked by NSE on complying the same.

8. Means of Communication :

At present, half yearly results is not sent to household of eachshareholder.

The quarterly (Unaudited) results are normally published in Free PressJournal and Navshakti.

The Company does not have any website, where results of theCompany are displayed. The Company has not made presentationmade to institutional investors or to the analysts.

Management Discussion & Analysis Report is a part of the AnnualReport.

9. General Shareholder Information :

AGM : Date, Time and Venue

19th Annual General meeting, 10th September, 2004 at 2.00 P.M. atregistered office of the Company - A-3, MIDC Industrial Area, Nanded431603, Maharashtra

Financial Calendar : April - March

Unaudited results for the quarter ending 30th June, 2004 : EndJuly, 2004

Unaudited results for the quarter ending 30th Sept., 2004 : EndOct., 2004

Unaudited results for the quarter ending 31st Dec. 2004 : EndJan., 2005

Audited results for the year ending 31st March,2005 : End June,2005

Dates of Book Closure : 1st September, 2004 to 10th September, 2004

Dividend Payment Date : Not Applicable as no dividend is recommended.

The Companys shares are listed on the following Stock Exchanges :The Stock Exchange, Mumbai National Stock Exchange of India Ltd.Phiroze Jeejeebhoy Towers, Exchange Plaza, 5 th Floor, Plot No. C/1,Dalal Street, G Block, Bandra- Kurla Complex,Mumbai 400 001. Bandra (East), Mumbai 400 051.

Annual Listing Fees as prescribed has been paid to the above stockexchanges for the financial year 2003-04.

Stock Code -

Stock Exchange Mumbai (BSE) : 512237

Demat ISIN for NSDL and CDSL : INE070D01019

The Equity shares of the Company has been voluntarily delisted from theAhmedabad Stock Exchange wef. 8th December, 2003, as approved by the

members at the 18th Annual General Meeting held on 26th August, 2003.Registrars and Transfer Agents :

Karvy Computershare Pvt. LimitedKarvy House, 46, Avenue 4, Street No. 1,Banjara Hills, Hyderabad- 500 034.Tel. Nos. 040 2331 2454/2332 0751/52Fax : 040-2331 1968/2332 3049

Share Transfer System :

Presently, the share transfers in physical form are registered and returnedwithin the stipulated period of 10 to 15 days from the receipt, if thedocuments are clear in all respects.

Dematerialisation of shares :

The Equity Shares of your company are traded in compulsorydematerialised form by all the investors w.e.f. 9th March, 2001.

The Company has entered into agreements with both the depositoriesviz, National Securities Depository Ltd.(NSDL) and Central DepositoryServices (India) Ltd (CDSL) , enabling the investors to hold shares of theCompany in electronic form through the depository of their choice.

As on 31st March, 2004, the number of dematerialised shares was 8390359which represents 97.21% of the total paid up capital.

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Outstanding GDRs/ADRs/Warrants or any Convertible Instruments,conversion date and likely impact on equity:

Not Applicable as the company has not issued such instruments.

Plant Locations :

Steel Division : Nanded, Maharashtra

Plastic Processing Division : Murbad, Maharashtra, Masat, Rakholi,Silvassa ( Dadra & Nagar Haveli (U.T.), Daman (U.T.), Khadoli, ( Dadra &Nagar Haveli (U.T.)

Address for correspondence:

Shareholders correspondence should be addressed to the Registrar andShare Transfer Agent of the Company at the address mentioned above.

Market Price Data during each month in last financial year

NSE BSE

Month High Low Month High Low(Rs.) (Rs.) (Rs.) (Rs.

April,2003 April,2003 35.95 29.00

May, 2003 May, 2003 44.00 32.60

June,2003 June,2003 53.50 39.40

July, 2003 July, 2003 69.40 41.50

August, 2003 99.00 77.90 August, 2003 99.00 52.05

September, 2003 86.75 66.10 September, 2003 85.00 66.00

October, 2003 82.00 66.25 October, 2003 82.60 66.00

November, 2003 88.95 71.05 November, 2003 90.00 71.50

December, 2003 174.25 79.00 December, 2003 173.65 83.00

January, 2004 163.90 101.00 January, 2004 161.80 103.90

February, 2004 106.00 82.00 February, 2004 106.80 83.00

March, 2004 98.75 75.50 March, 2004 96.00 78.65

Distribution of shareholding as on 31st March, 2004

SR. CATEGORY NO. OF % OF AMOUNT % OF

NO. FROM - TO HOLDERS HOLDERS AMOUNT

1 1- 5000 7989 96.78 5807810 6.73%

2 5001-10000 115 1.39 891680 1.03%

3 10001-20000 66 0.80 912980 1.06%

4 20001-30000 21 0.25 489660 0.57%

5 30001-40000 7 0.08 241420 0.28%

6 40001-50000 6 0.07 262400 0.30%

7 50001-100000 9 0.11 603650 0.70%

8 100001 & above 42 0.51 77104400 89.33%

TOTAL 8255 100.00 86314000 100.00%

Shareholding pattern as on 31-03-2004

Sr. Description No. of Shares % of

No. share EquityHolders

1 Promoters(includingDirectors, their relatives ) 31 7567363 87.67

2 Mutual Funds 9 15034 0.17

3 Financial Institutions and Banks 6 3050 0.04

4 Bodies Corporate 179 82311 0.95

5 NRI 7 515 0.01

6 Resident Individuals 8021 961191 11.14

7 NSDL Transit 2 2010 0.02

TOTAL 8255 8631400 100.00

Dividend Payment Date : Not applicable as no dividend is recommended.

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MANAGEMENT DISCUSSION & ANALYSIS (MD &A)

1. Industry Structure and developments

The economy has shown some signs of improvement but towardsthe end of 2003-04 due to political uncertainties, economy has sloweddown. It will take longer time for things to settle down and streamline.

STEEL DIVISION

Your Company is one of the leading players in Indian GP/GC steel

market. There are around seven large companies in the organizedsector which together accounts for about 90 % of the total domesticand Export sales.

During the year, the Steel Division of the Company has achieved anexports of Rs. 4784.28 lakhs as compared to Rs. 6900.34 lakhs forthe previous year. The Company has achieved production of 48003M.T. of GP/GC as compared to last years 60986 M.T. The total saleswere 46385 M.T. as compared to last years 59952 M.T.

PLASTIC PROCESSING DIVISION

Your Company is one of the leading manufacturer of small wovensacks and is a market leader in manufacturing FIBC - Jumbo bags.

There are other 23 major players in the organized sector for FIBCJumbo bags and large number of big and small units for manufactureof small woven sacks operating in organized and unorganized sector.

Your Company is fully equipped to cater to the growing export

market in a big way as the Companys 100 % EOU has startedcommercial production last year. During the year under review,the company has achieved production of 7239 M.T. as comparedto last years 7578 M.T.

2. Opportunities and threats

The exports to various developing countries like China seems to bea major opportunity for Steel Industry. However the problems ofvolatility in the raw material prices, over capacity, Uncertaintyprevailing over delay in Monsoon and International Markets representmajor threats to the Industry.

The expansion of the International Markets for niche products likeFIBC- Jumbo bags & Woven Fabrics represents the new opportunityfor the Plastic Processing Division. The Company looks at Exportsas a major thrust area and intends to focus on Exports as the mainstayof business.

The major threat the company faces is from small manufacturersoperating in semi organised sector which results in unhealthycompetition as they are exempt from majority of govt. levies andregulations. There is significant price pressure due to suchcompetition.

3. Segment-wise or product-wise performance

The Company has two main segments- Steel and Plastic Processing.The Steel Division of the Company is engaged in manufacturing ofGP/GC Coils/Sheets at its plant located at Nanded. During the yearunder review, the Steel Division has achieved a turnover of Rs.153.30Crores as compared to Rs.159.78 crores during the last year.

The Plastic Processing Division is engaged in manufacturing of wovensacks and Fabrics of mainly Polypropylene(PP),High DensityPolyethylene (HDPE) and Low Density Polyethylene (LDPE) at units

located at Murbad in Maharashtra, and Khadoli (Dadra & Nagar HaveliU. T.) The Plastic Processing Division has achieved a turnover of Rs.64.12 crores as compared to Rs. 66.08 crores for the last year. TheCompany has discountinued its manufacturing operations at PlasticProcessing Unit situated at Rakholi (Silvassa) from November, 2003and after the close of the financial year at Masat (Silvassa) andDaman.

4. Outlook

During the year under review there was a substantial increase in theinternational prices of HR and CR Coils, the key raw materials for

making GP/GC Coils/Sheets. The Company was in a position to passon the increased costs to some extent to the customers. However,this increase, coupled with prevailing uncertainties resulted in reduceddemand for GP/GC Coils Sheets in the International Market towardsthe end of the year. Uncertainties prevailing for the coming monsooncan also effect the demand for GP/GC Coils sheets in India. The rawmaterial prices are likely to be volatile for some time, as a result ofuncertainties as mentioned above in the International market. This

will have a significant impact on the prices in the domestic market. Inview of the above factors, the medium term outlook for GP/GC Coils,Sheets is cautiously optimistic.

In Plastic Processing Division, the Companys outlook is optimistic

about the expansion of its international market as its 100 % EOU

has started commercial production last year and is fully equipped to

cater the International markets. The Company is continuously takingsteps in improving its competitive strengths in order to maintain its

lead over competitors and improve its margins and profitability.

However, unprecedented volatility and/or increase in key raw material

prices can adversely affect the performance of the Company.

5. Risks and concerns

The Company is exposed to the normal industry risk factors of

competition, economic cycle, raw material availability, uncertainties

in the International and Domestic Markets and credit risk. Thecompany manages these risks by maintaining a conservative financial

profile and by following prudent business and risk management

practices.

6. Internal Control systems and their adequacy

The Company has a proper and adequate system of internal controlsto ensure that all activities are monitored and controlled against any

unauthorised use or disposition of assets and that transactions are

authorised, recorded and reported correctly.

The Company ensures adherence to all internal control policies and

procedures as well as compliance with all regulatory guidelines.

The audit committee of the Board of Directors reviews the adequacy

of internal Controls.

7. Financial performance with respect to operational performance.

The gross turnover of the Company was Rs.217.41 crores as

compared to Rs. 225.86 for the previous year and the Profit beforetax was Rs.39.18 crores as compared to Rs. 18.75 crores for the last

year. This was mainly due to export incentives of previous years which

were received during the current year.

8. Human Resources and Industrial Relations.

The relations with the employees at all units continued to be cordial

and satisfactory.The total number of employees as on 31st March,

2004 were around 800.

9. Forward - Looking Statements

This reports contains forward-looking statements that involve risks

and uncertainties. When used in this discussion, the words like plans,

expects, anticipates, believes, intends, estimates, or other similar

expressions as they relate to the Company or its business are

intended to identify such forward -looking statements.

Forward looking statements are based on certain assumptions and

expectations of future events. The Companys actual results,

performance or achievements could differ materially from those

expressed or implied in such forward -looking statements. The

Company undertakes no obligation or responsibility to publicly amend,update, modify or revise, any forward -looking statements, on the

basis of any new information, Future events, subsequent

developments or otherwise.

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AUDITORS CERTIFICATE

Auditors certificate to the members of Jai Corp Limited on Compliance of the conditions of corporate governance for theyear ended 31st March 2004, under clause 49 of the listing agreement with stock exchanges :

We have examined the compliance of conditions of Corporate Governance by Jai Corp Limited, for the year ended March 31st,2004, as stipulated in Clause 49 of Listing Agreement of the said Company with the Stock Exchange(s).

The compliance of conditions of Corporate Governance is responsibility of the management. Our examination was limited to thereview of the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions ofthe corporate governance. It is neither an audit nor expression of opinion on the financial statement of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representation made by thedirectors and the management, we certify that the company has, complied in all material respects with the conditions of corporategovernance as stipulated in clause 49, save and except that the Chairman of the Audit Committee could not attend the 18thAnnual General Meeting in view of the reason explained in the report on Corporate Governance.

As required by the guidance note on certification of corporate governance issued by the Institute of Chartered Accountants ofIndia, We state that, the Registrar & Transfer Agent of the Company have certified that, as on 31st March, 2004 there were noinvestor grievance remaining pending for a period exceeding one month and as explained to us by the management, the Registrarshave reported to the Shareholder/ Investors Grievances Committee regularly on the status of such grievances.

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

For CHATURVEDI & SHAHChartered Accountants

R. KORIAPartner

Membership No. 35629

Place : MumbaiDated : 29th June 2004

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AUDITORS REPORTTo the members of Jai Corp LimitedWe have audited the attached Balance Sheet of Jai Corp Limited,as at 31st March, 2004 and alsothe Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto.These financial statements are the responsibility of the Companys management. Our responsibility isto express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Thesestandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free from material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. An audit also includes

assessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.1. As required by the Companies (Auditors Report) Order, 2003 issued by Central Government of

India in terms of Section 227 (4A) of the Companies Act 1956, we give in the Annexure hereto astatement on the matters specified in the paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph 1 above, we state that :

a) We have obtained all the information and explanations which to the best of our knowledgeand belief were necessary for the purpose of our audit.

b) In our opinion, proper books of account, as required by law, have been kept by the Company,so far as appears from our examination of such books.

c) The Balance Sheet and Profit and Loss Account and Cash Flow Statement referred to in thisreport are in agreement with the books of account.

d) In our opinion the Balance Sheet and the Profit and Loss Account and Cash Flow Statementcomplies with the mandatory Accounting Standards referred to in Section 211 (3C) of theCompanies Act, 1956.

e) On the basis of the written representations received from the Directors as on 31st March,2004, and taken on record by the Board of Directors, we report that none of the directors isdisqualified as on 31st March, 2004 from being appointed as a director in terms of Section

274 (1) (g) of the Companies Act, 1956.f) In our opinion and to the best of our information and according to explanations given to us,

the said Balance Sheet and Profit and Loss Account read together with the SignificantAccounting Policies and other notes thereon, in particular note no. 9 of schedule Q regardingchange in accounting policy of accounting for advance licence / DEPB benefits, give theinformation required by the Companies Act,1956, in the manner so required and give a trueand fair view :

I) In so far as it relates to Balance Sheet, of the state of affairs of the Company as at 31stMarch, 2004 and

II) In so far as it relates to the Profit and Loss Account, of the Profit of the Company for theyear ended on that date.

III) In so far as it relates to the Cash Flow Statement, of the Cash Flow for the year endedon that date.

For CHATURVEDI & SHAHChartered Accountants

R. KORIAPlace : Mumbai PartnerDate : 29th June 2004 Membership No. 35629

ANNEXURE TO AUDITORS REPORT(Referred to in paragraph 1 of our report of even date)

(i) 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) As explained to us, the fixed assets have been physically verified by the management in

accordance with a phased programme of verification, which in our opinion, is reasonable,considering the size and nature of its business. No material discrepancies were noticed onsuch verification as compared to the book records.

(c) During the year the company has disposed off substantial part of fixed assets of plasticprocessing unit at Rakholi (Silvasa) however it has not affected the going concern status ofthe company.

(ii) In respect of its inventories :(a) As explained to us, inventories have been physically verified by the management at reasonable

intervals.(b) In our opinion, the procedures of physical verification of inventories followed by the

management is reasonable and adequate in relation to the size of the Company and thenature of its business.

(c) On the basis of our examination of inventory records, we are of the opinion that the company

is maintaining proper records of inventory. As explained to us, there were no materialdiscrepancies noticed on physical verification of the inventories, as compared to book recordsand minor discrepancy have been properly dealt with in the books of account.

(iii) (a) The Company has not taken loans from companies, firms and other parties covered in theRegister maintained under Section 301 of the Companies Act, 1956. There are seven partiescovered in the Register maintained under section 301 of the Companies Act, 1956, to whichthe company has granted loans. The maximum amount involved during the year was Rs.1444.25 Lacs and the year-end balance of loans granted to such parties was Rs. 105.00Lacs.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have beengranted to parties listed in the Register maintained under Section 301 of the Companies Act,1956 are not, prima facie, prejudicial to the interest of the Company.

(c) There is no overdue amount of loans granted to companies, firms or other parties listed inthe Registers maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us there are adequateinternal control procedure commensurate with the size of the Company and the nature of itsbusiness for the purchase of inventories and fixed assets and for sale of goods. We have notobserved any continuing failure to correct major weakness in the internal control.

(v) (a) In our opinion and according to the information and explanations given to us, transactionsthat need to be entered into a Register in pursuance of Section 301 of the Companies Act,1956, are being entered.

(b) Each of these transactions, made in pursuance of contracts or arrangements entered in the

Register maintained u/s.301 of the Companies Act, 1956, and aggregating during the year toRs.5,00,000/- or more in respect of each party, have been made at prices which are reasonablehaving regard to the prevailing market prices.

(vi) The Company has not accepted any deposit from the public and hence directives issued bythe Reserve Bank of India and the provisions of Section 58A and 58 AA of the CompaniesAct, 1956 and rules framed thereunder are not applicable for the year under audit.

(vii) The Company has an internal audit system, which in our opinion, needs to be furtherstrengthened to make it commensurate with the size and nature of its business.

(viii) We are informed by the management that Central Government has prescribed the maintenanceof Cost Records under section 209 (1) (d) of the Companies Act, 1956, in respect of only oneproduct of the company. We have broadly reviewed the accounts and records of the companyin this connection and are of opinion that, prima facie; prescribed accounts and records havebeen made and maintained. We have not, however, made a detailed examination of therecords with a view to determine whether they are accurate.

(ix) (a) According to the records, the Company has generally been regular, in depositing withappropriate authorities undisputed statutory dues including Provident Fund, Employees StateInsurance, Income-tax, Sales-tax, Wealth tax, Custom Duty, Excise Duty, Cess and anyother statutory dues except Investor Education and Protection Fund and in few cases ofother statutory dues.

(b) According to the information and explanations given to us, there is no undisputed amountspayable in respect of such statutory dues, except Rs. 2.65 Lacs in respect of InvestorEducation and Protection Fund , as at 31st March, 2004 for a period of more than six monthsfrom the date they became payable, which has since been paid.

(c) The disputed statutory dues aggregating to Rs. 211.12 Lacs, that have not been depositedon account of matters pending before appropriate authorities are as under :Name of the Statute Nature of Amount Forum where dispute

the Dues (Rs. in Lacs) is pending

Central and Bombay Sales Tax Act Sales Tax 23.13 Ass is tant Commissioner(Appeals)

Central and Bombay Sales Tax Act Sales Tax 152.51 Dy. Commissioner(Appeals)

Income Tax Act Income Tax 35.48 Commissioner(Appeals)

Total 211.12(x) The Company neither has accumulated losses nor it has incurred any cash losses during the

current financial year and the immediately preceding financial year.(xi) Based on our audit procedures and information and explanations given by the management, we

are of the opinion that the Company has not de faulted in repayment of dues to a financial institu tion

and bank.(xii) According to the information and explanations given to us, the Company has not granted loans

and advances on the basis of security by way of pledge of shares, debenture and other securities.(xiii) In our opinion, the Company is not a chit fund, a nidhi or a mutual benefit society. Therefore, the

provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 is not applicable tothe Company.

(xiv) The company has maintained proper records of transactions and contracts in respect of trading inshares and other investments and timely entries have been made therein. The investments areheld by the Company in its own name.

(xv) The Company has not given any guarantee for loans taken by others from bank or financialinstitutions.

(xvi) According to the information and explanations given to us the Company has not taken any termloan during the year.

(xvii)On the basis of review of utilization of funds, which is based on overall examination of the BalanceSheet of the Company as at 31st March, 2004, related informations as made available to us andas represented to us, by the management, fund raised on short term basis have not been used forlong term purposes, however the funds raised / generated on long term basis to the extent ofRs.15,458.40 Lacs have been used for short term purposes (Current investments / current assets/ loans and advances).

(xviii)During the year Company has not made any preferential allotment of shares to parties andcompanies covered in the Register maintained under Section 301 of the Act.(xix) The Company has not issued any debentures and hence clause 4 (xix) of the Companies (Auditors

Report) Order, 2003 is not applicable to the Company.(xx) During the year the Company has not raised any money by public issues.(xxi) According to the information and explanations given to us, no fraud on or by the Company has

been noticed or reported during the year.For CHATURVEDI & SHAH

Chartered Accountants

R. KORIAPlace : Mumbai PartnerDate : 29th June 2004 Membership No. 35629

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BALANCE SHEET AS AT 31st MARCH, 2004(Rs.in Lacs)

AS AT AS ATSchedule 31.03.2004 31.03.2003

SOURCES OF FUNDSShareholders Funds

Share Capital A 862.91 862.91Reserves & Surplus B 24,340.06 21,553.16

25,202.97 22,416.07Loan FundsSecured Loans C 56.10 378.52Unsecured Loans D 362.94 443.26

419.04 821.78

Net Deferred Tax Liability 1,208.29 1,058.98(Refer Note no.12 of schedule Q )

Total 26,830.30 24,296.83

APPLICATION OF FUNDS

Fixed Assets

Gross Block E 20,907.62 20,217.96Less: Depreciation 11,797.46 11,156.03

Net Block 9,110.16 9,061.93Capital Work-in-Progress 1,102.01 1,114.02

10,212.17 10,175.95

Investments F 4,717.50 2,714.71Current Assets, Loans and Advances GInventories 8,042.41 6,179.17Sundry Debtors 1,307.96 2,117.24Cash & Bank Balances 111.39 104.21Loans & Advances 3,580.51 3,860.55

13,042.27 12,261.17

Less : Current Liabilities and Provisions HCurrent Liabilites 1,117.17 858.56Provisions 34.83 17.81

1,152.00 876.37

Net Current Assets 11,890.27 11,384.80Miscellaneous Expenditure I 10.36 21.37(To the extent not written off or adjusted)

26,830.30 24,296.83

Notes on Accounts & Contingent Liabilities Q

As per our report of even date For and on behalf of the BoardFor CHATURVEDI & SHAH For JAI CORP LTDChartered Accountants

J. K. JAIN Executive ChairmanR. KORIAPartner S. P. JAIN Managing Director

Mumbai, 29th June, 2004 D. V. IYER Company Secretary

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PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2004(Rs.in Lacs)

Schedule YEAR ENDED YEAR ENDED31.03.2004 31.03.2003

INCOMETurnover J 21,741.86 22,585.62

Less :Excise duty recovered on sales 1,942.23 1,983.23 Net Turnover 19,799.63 20,602.39Other Income K 1,102.57 703.05Increase / (Decrease) in Stocks L 930.51 1,448.94

21,832.71 22,754.38

EXPENDITURE

Purchases and Raw Materials Consumed M 13,887.15 15,374.56Employees Remuneration and Benefits N 848.81 770.24Manufacturing, Selling & Administrative Expenses O 3,649.51 3,780.01Finance Charges P 32.43 42.70Excise Duty (6.98) 67.55Depreciation 830.26 900.25

19,241.18 20,935.31Less :Pre operative expenses of Projects (Net) 55.79

Net Expenditure 19,241.18 20,879.52

PROFIT FOR THE YEAR BEFORE TAX AND EXTRA ORDINARY ITEMS 2,591.53 1,874.86

Add :- Extra Ordinary Items 1,327.00

PROFIT FOR THE YEAR BEFORE TAX 3,918.53 1,874.86Less : Provision for Taxation :

Current Tax 1,010.00 280.00Deferred Tax 149.31 (113.93)

PROFIT FOR THE YEAR AFTER TAX 2,759.22 1,708.79

Balance brought forward from last year 2,522.77 867.95Prior Period Adjustments (Net) 0.77 18.83Excess Provision for Income tax in earlier years written back 26.91 97.20

AMOUNT AVAILABLE FOR APPROPRIATIONS 5,309.67 2,692.77APPROPRIATIONSGeneral Reserve 275.00 170.00

SURPLUS CARRIED TO BALANCE SHEET 5,034.67 2,522.77

Basic & Diluted earning per equity share of Rs. 10 each.(Including Extra Ordinery Items) 31.98 19.00(Excluding Extra Ordinery Items) 22.29 19.00(Refer Note No. 13 of Schedule QNotes on Accounts & Contingent Liabilities QAs per our report of even date For and on behalf of the BoardFor CHATURVEDI & SHAH For JAI CORP LTDChartered Accountants

J. K. JAIN Executive ChairmanR. KORIAPartner S. P. JAIN Managing Director

Mumbai, 29th June, 2004 D. V. IYER Company Secretary

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SCHEDULES FORMING PART OF THE BALANCE SHEET(Rs. in Lacs)

AS AT AS AT31.03.2004 31.03.2003

SCHEDULE A

SHARE CAPITAL

AUTHORISED

2,00,00,000 Equity Shares of Rs. 10 each 2,000.00 2,000.00

15,000 1% Non-Cumulative Non-Participating Redeemable Preference

Shares of Rs. 100 each 15.00 15.00

4,85,000 Unclassified Shares of Rs. 100 each 485.00 485.00

2,500.00 2,500.00

ISSUED AND SUBSCRIBED

86,31,400 Equity Shares of Rs. 10 each 863.14 863.14

PAID UP

86,26,940 Equity Shares of Rs. 10 each. 862.69 862.69

Add : Forfieted Share(Amtount Originally Paid up on 4460 Shares) 0.22 0.22

862.91 862.91

NOTES :

(A) Of the above shares

(i) 24,00,000 Equity Shares have been allotted as Bonus Shares by Capitalisation of Free

Reserves.

(ii) 49,63,522 Equity Shares have been allotted, without payment being received in cash,

pursuant to the Scheme of Amalgamation of Sipta Coated Steels Limited and Comet Steels

Limited with the Company.

(B) In terms of Scheme of Arrangement as approved by the Honourable High Court Judicature at

Mumbai vide its order dated 6th June 2002, the Company has purchased and cancelled 632122

Equity Shares during the year ended 31st March, 2003.

SCHEDULE B

RESERVES & SURPLUS

Capital Reserve

As per last Balance Sheet 92.17 92.17

Equity Share Premium

As per last Balance Sheet 6,068.22 6,226.25

Less :Utilised for buy back of Equity Shares of the company 158.03

6,068.22 6,068.22

General Reserve

As per last Balance Sheet 12,870.00 12,700.00

Add : Transferred from Profit and Loss Account 275.00 170.00

13,145.00 12,870.00

Profit and Loss Account 5,034.67 2,522.77

24,340.06 21,553.16

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SCHEDULES FORMING PART OF THE BALANCE SHEET (Contd.,)(Rs. in Lacs)

AS AT AS AT31.03.2004 31.03.2003

SCHEDULE C

SECURED LOANS

Working Capital Loans from Bank 56.10 378.52

56.10 378.52

NOTE :

Above loans are secured by hypothecation of the Companys inventories and book

debts and further secured by way of negative lien on immoveable fixed assets. The

loans are also guaranteed by some of the Directors of the Company in their personal

capacity.

SCHEDULE D

UNSECURED LOANS

Interest Free Sales-tax Loan 362.95 443.26

362.95 443.26

Note :Amount repayable within one year Rs. 120.63 Lacs (Previous Year Rs.80.31 Lacs).

SCHEDULE - E

FIXED ASSETS

(Rs. in Lacs)

GROSS BLOCK DEPRECIATION NET BLOCK

PARTICULARS AS AT Additions Deductions/ AS AT UPTO For The Deductions/ UPTO AS AT AS AT01.04.2003 Adjustments 31.03.2004 31.03.2003 Year Adjustments 31.03.2004 31.03.2004 31.03.2003

FREEHOLD LAND 850.01 274.77 575.24 575.24 850.01LEASEHOLD LAND 451.86 451.86 451.86 451.86

BUILDINGS 3,724.90 27.06 2.81 3,749.15 798.90 106.22 0.58 904.54 2,844.61 2,926.00

PLANT & MACHINERY 14,460.19 1,126.48 288.16 15,298.51 9,933.34 663.94 181.27 10,416.01 4,882.50 4,526.85

DRAWINGS & DESIGNS 65.38 65.38 65.38 65.38

FURNITURE & FIXTURES 141.52 1.66 1.47 141.71 93.27 8.86 1.20 100.93 40.78 48.25

OFFICE EQUIPMENTS 281.73 21.57 2.97 300.33 153.64 25.41 1.86 177.19 123.14 128.09

VEHICLES 242.37 87.81 4.74 325.44 111.50 25.83 3.92 133.41 192.03 130.87

TOTAL 20,217.96 1,264.58 574.92 20,907.62 11,156.03 830.26 188.83 11,797.46 9,110.16 9,061.93

PREVIOUS YEAR 18,053.28 2,422.09 257.41 20,217.96 10,421.55 900.25 165.77 11,156.03 9,061.93

CAPITAL WORK IN PROGRESS 1,102.01 1,114.02

NOTES :-

1. Leasehold land includes Rs. 23.87 Lacs (Prevous Year Rs. 23.87 Lacs) in respect of which title is pending for transfer in the name of the company.2. Building includes Rs.0.01 Lacs (Prevous Year Rs. 0.02 Lacs) being the value of shares in Co-operative Housing Society towards ownership of residential flats.3. Capital Work-in-Progress includes :

i) Rs. Nil (Previous Year Rs.0.02 Lacs) on account of pre-operative expenses.ii) Rs. 1.59 Lacs (Previous Year Rs.2.71 Lacs) on account of cost of construction material at site.iii) Rs. 765.48 lacs (Previous year Rs.614.53 lacs) on account of advances made to the suppliers for capital expenditure.

4. Depreciation for the year includes Rs. .Nil (Previous Year Rs. 0.46 Lacs) capitalised as Pre-operative Expenses5. Addition to Fixed assets & Capital Work in Progress includes Rs. Nil Lacs(Previous Year Rs.0.56 Lacs) on account of Exchange difference (net) .6. Elecrical Installation includes Rs. 25.40 lacs (previous year Rs. 25.40 Lacs) being the amount spent for erection of 11 KV underground cable feeder from Khadoli sub-station to

Unit, the ownership of which vests with Electricity Deptt of Dadra & Nagar Haveli (a Union Teritory).

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AS AT AS AT31.03.2004 31.03.2003

SCHEDULE F

INVESTMENTSQUANTITY

AS AT AS AT31.03.2004 31.03.2003

LONG TERM INVESTMENTS(I) TRADE INVESTMENTS

IN SUBSIDIARY COMPANY- (Unquoted)SARBAGS PTY LTD(A) IN EQUITY SHARE CAPITAL

Equity Shares of A$ 1 each 50,000 50,000 12.34 12.34(B) IN PREFERENCE SHARE CAPITAL

1% Reedemable Non CumulativePreference Shares of A$ 1 each 410,000 410,000 100.93 100.93

113.27 113.27

(II) NON TRADE INVESTMENTSIN PREFERENCE SHARES - of Re. 1/- each(Unquoted Fully Paid Up)Cellbion Interactive Pvt Ltd 810810 900.00 CURRENT INVESTMENTSOTHER THAN TRADE INVESTMENTSQUOTED- FULLY PAID UPIN EQUITY SHARES (OF RS. 10/- EACH)Padmini Technologies Ltd. 800 0.05Bharat Petroleum Corporation Ltd 392,000 870.44Dredging Corp of India Ltd 14,850 59.40 GAIL(India) Limited 193,031 376.41 IDBI Bank Limited 586,740 340.90 ONGC Ltd. 159,975 1,199.81 TV Today Network Limited 64,500 61.28 Hindustan Petroleum Corporation Ltd. 465,000 1,242.97Indraprastha Gas Ltd. 113,387 54.43 Shipping Corporation of India Ltd. 258,000 130.55

UNQUOTED-FULLY PAID UPIN UNITS - of Rs. 10/- eachING Vysya Income Fund 3598324.36 361.08 Prudential ICICI Short Term Plan 10,572,403 3,192,389 1,250.92 357.43

TOTAL 4,717.50 2,714.71

(Rs. in Lacs)

NOTES :(I) Aggregate value of Investments :-As at 31.03.2004 As at 31.03.2003

Book Value Market Value Book Value Market Value

Quoted Investments 2,092.23 2,352.00 2,244.01 2,369.76Unquoted Investments 2,625.27 470.70

(ii) The Current investments are net off provision for diminiution in value of current investment by Rs.28.14 Lacs (Previous YearRs. 306.57 lacs.)

(iii) Movements during the year Face Value Nos. CostPurchased and Sold Rs. (Rs. in Lacs)

Equity SharesVijaya Bank 10 912,100 218.90UCO Bank 10 2,229,100 267.49Mutual Fund UnitsPrudential ICICI Short term Cumulative Plan 10 150,277,827 16,350.96Prudential ICICI Liquid Plan Weekly Dividend 10 557,077,544 6,333.09Prudential ICICI Liquid Plan Weekly Reinvestment 10 213,646,676 25,341.86Prudential ICICI Liquid Plan Div idend Reinvestment 10 102,479,767 10,863.31

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AS AT AS AT31.03.2004 31.03.2003

SCHEDULE GCURRENT ASSETS, LOANS AND ADVANCESCURRENT ASSETS

INVENTORIES(Certified and Valued by the Management)Stores, Spares, Packing Materials, Fuel, etc. 598.16 651.62Raw Materials 2,879.03 1,892.83Work-in-Progress 78.99 252.29Finished Goods 4,399.64 3,224.75Scrap 73.67 144.16Others * 12.92 13.52

8,042.41 6,179.17

* includes realisable value of discarded fixed assets Rs.1.54 lacs ( Previous year Rs.1.54 lacs ).SUNDRY DEBTORS

(Unsecured, considered good and subject to confirmation)For a period of more than six months 19.71 18.38Others * 1,288.25 2,098.86

1,307.96 2,117.24

* Sundry debtors Others include Rs.65.37 lacs (previous year Rs.118.79 lacs) due from subsidiary company.

CASH AND BANK BALANCESCash in hand 2.47 0.80Balances with Scheduled BanksIn Current Accounts 44.87 34.36In Fixed Deposit Accounts* 64.05 69.05

111.39 104.21

* Includes Rs.63.40 lacs Pledged with various Govt. Deptts.( Previous year Rs 68.40 Lacs )LOANS AND ADVANCES

(Unsecured, considered good and subject to confirmation)Loan to Subsidiary Company 79.99 97.48Advances recoverable in cash or in kind or for value to be received 2,152.85 2,725.20Deposits 171.24 152.94Balance with Customs & Excise Authorities 892.60 825.27Income Tax (Net) 283.83 59.66

3,580.51 3,860.55

13,042.27 12,261.17

SCHEDULE HCURRENT LIABILITIES AND PROVISIONSCURRENT LIABILITIES

Sundry Creditors *Small Scale Undertakings 13.65 1.34(As Certified by Management)Others 323.10 237.16

336.75 238.50

Investors Education & Protection FundUnclaimed Dividend ** 19.64 18.12Unclaimed & Matured Deposit 0.06Unpaid Application Money 0.42Unclaimed for Buy back of shares 42.07 44.03Other Liabilities 718.71 557.43

1,117.17 858.56

PROVISIONSWealth Tax (Net) 4.75 4.80Leave Encashment 10.24 9.87Gratuity 19.84 3.14

34.83 17.81

1,152.00 876.37

* Includes Rs. 84.25 lacs ( previous year Rs.26.03 lacs ) for capital expenditure** The amount includes amount , due and outstanding, to be credited to Investor Education and Protection Fund , Rs. 2.66 Lacs, which has

since been paid.

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AS AT AS AT31.03.2004 31.03.2003

SCHEDULE I

MISCELLANEOUS EXPENDITURE

(To the extent not written off or adjusted)Share Issue Expenses 10.36 21.37

10.36 21.37

SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT(Rs. in Lacs)

Year Ended Year Ended

31.03.2004 31.03.2003

SCHEDULE J

TURNOVERSales 21,429.09 22,371.14

Services 312.77 214.48

21,741.86 22,585.62

SCHEDULE K

OTHER INCOMEDividend - Current Investments 237.93 166.38(TDS Rs. Nil (Previous year Rs. 17.46 lacs)Profit on Sale of Fixed Assets (Net) 6.56Profit on Sale of Current Investment(Net) 638.91 112.54Sundry Balances W/Back(Net) 54.71Exchange difference (Net) 9.72 11.01Rent Received 17.78 Interest Received 178.47 254.59(Tax deducted at Source Rs.13.04 lacs (Previous year Rs.31.55 lacs)Miscellaneous Income 19.76 97.26

1,102.57 703.05

SCHEDULE LINCREASE / (DECREASE) IN STOCKSClosing Stock

Finished Goods 4,399.64 3,224.75Work-in-Progress 78.99 252.29Scrap 73.67 144.16Others 11.38 11.98

4,563.68 3,633.18

Opening StockFinished Goods 3,224.75 2,036.47Work-in-Progress 252.28 100.32Scrap 144.16 35.47Others 11.98 11.98

3,633.17 2,184.24

Increase / (Decrease) in Stocks 930.51 1,448.94

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SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT (Contd.,)(Rs. in Lacs)

Year Ended Year Ended31.03.2004 31.03.2003

SCHEDULE MPURCHASES & RAW MATERIALS CONSUMED

PURCHASES 103.62 94.75RAW MATERIALS CONSUMEDOpening Stock 1,892.84 763.23Add : Purchases 14,769.72 16,409.41

16,662.56 17,172.64

Less : Closing Stock 2,879.03 1,892.84

13,783.53 15,279.81

13,887.15 15,374.56

SCHEDULE NEMPLOYEES REMUNERATION AND BENEFITS

Salaries, Wages and Perquisites 787.73 713.80Contribution to Provident and Other Funds 30.42 28.57

Staff Welfare & amenities 12.58 9.72Gratuity 18.08 18.15

848.81 770.24

SCHEDULE OMANUFACTURING, SELLING & ADMINISTRATIVE EXPENSES

Power, Fuel and Water 1,366.02 1,421.22Stores, Spares and Packing Materials 1,147.10 902.97Job Work Charges 72.78 84.74Repairs and Maintenance

Plant & Machinery 57.47 60.60Buildings 18.50 11.28Others 26.33 21.00

Rent 23.76 27.54Rates and Taxes 12.04 21.67

Insurance 62.72 44.02Legal, Professional and Consultancy Charges 131.71 67.43Travelling and Conveyance 103.29 127.24Advertisement, Publicity and Sales Promotion 17.98 12.71Freight, Handling Charges and Octroi (Net) 253.05 394.27Brokerage, Commission and Discount 70.73 87.47Payment to Auditors 15.19 14.82Preliminary Expenses Written Off 11.00 11.11Provision for Diminution in value of Investments 28.14 306.33Directors Sitting Fees 0.93 0.70Charity and Donation 26.63 13.25Bad Debts 4.59 0.04Loss on Sale of Fixed Assets (Net) 9.12 Sundry Balances W/Off(Net) 4.63 Wealth Tax 2.00 2.00Other Expenses 183.80 147.60

3,649.51 3,780.01

SCHEDULE PFINANCE CHARGES

Interest (On other than fixed loans) 14.03 28.11Bank Charges 18.40 14.59

32.43 42.70

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SCHEDULES FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

SCHEDULE Q

NOTES ON ACCOUNTS AND CONTINGENT LIABILITIES

1. SIGNIFICANT ACCOUNTING POLICIES

a. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared under historical Cost convention, in accordance with the generally accepted accountingprinciples and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b. USE OF ESTIMATES

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates andassumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reportedamount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognised in theperiod in which the results are known/materialised.

c. FIXED ASSETS

Fixed Assets are stated at cost of acquisition or construction, net of modvat, less accumulated depreciation. All costs, including trialproduction and financing costs till commencement of commercial production are capitalised.

d. DEPRECIATION

i) Depreciation is provided on straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act,1956.

ii) Drawings & Designs are written off on straight line method over a period of ten years.iii) No amortisation has been made in respect of premium paid for the leasehold land, since grant of lease is for a long period.

e. INVESTMENTS

Current investments are carried at lower of cost and market value/NAV, computed individually. Long Term Investments are stated atcost. Provision for diminution in the value of long Term investments is made only if such decline is other than temporary in the opinionof the management.

f. VALUATION OF INVENTORIES

In general, all inventories of Finished Goods, Work-in-Progress etc., are stated at lower of cost or net realisable value. Cost of inventoriescomprise of all cost of purchase, cost of conversion and other cost incurred in bringing the inventory to their present location andcondition. Raw Material & Stores and spares in respect of Packaging Division are stated at cost on FIFO basis and in respect of SteelDivision on Average basis. Scrap and trial run products are valued at estimated net realisable value. Inventories of Finished Goods andScrap includes excise duty wherever applicable.

g. CUSTOMS

The liability on account of Customs duty is recognised on clearance of the goods from the bonded warehouse.

h. ADVANCE LICENCE BENEFITS

The benefits in respect of Advance Licences / Credit in Pass Book scheme received by the Company against exports made by it arerecognised as and when right to receive advance licences/ DEPB credit , as the case may be, is established as per the terms of thescheme.

i. PRELIMINARY AND ISSUE EXPENSES

The preliminary and issue expenses are amortised / charged to the Profit and Loss Account over a period of ten years.

j. FOREIGN CURRENCY TRANSACTIONS

i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transaction.

ii) Monetary items denominated in foreign currencies at the year end not covered by the forward exchange contracts are translated atthe year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction asincreased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction,such differences having been recognised over the life of the contract.

iii) Non monetary foreign currency items are carried at cost.

iv) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit andLoss Account except in cases where they relate to the acquisition of fixed assets in which case they are adjusted to the carryingcost of such assets.

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SCHEDULES FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS (Contd.,)

k. TURNOVER

Turnover include sale of scrap, waste, service charges, commission, export incentive and excise duty but excludes sales tax.

l. EMPLOYEES RETIREMENT BENEFITS

Companys contributions to Provident Fund are charged to the Profit and Loss Account.

Gratuity is charged to the profit and loss account on the basis of actuarial valuation.

m. BORROWING COST

Borrowing costs that are attributable to the acquisition or Construction of qualifying assets are capitalised as part of the cost of suchassets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowingcosts are charged to revenue.

n. PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Ac t, 1961.

Deferred tax resulting from timing difference between book and taxable profit is accounted for using the tax rates and laws that havebeen enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only tothe extent that there is a reasonable certainty that the assets will be realized in future.

2. In the opinion of the Management, the Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinarycourse of business.

3. Auditors Remuneration(Rs. in lacs)

2003-04 2002-03

Audit Fees 8.50 8.50

Tax Audit Fees 3.00 3.00

Certification Fees 3.39 2.70

Out of Pocket Expense 0.30 0.62

15.19 14.82

4. As at 31st March, 2004 the Company has made enquiries from its creditors to ascertain whether the outstanding creditors are small scaleindustrial undertaking or otherwise. The amount disclosed as SSI creditors under the head current liabilities in Schedule H is only inrespect of those creditors who have responded to the companys enquiry. Such undertakings to whom the Company owes a sum for more

than 30 days are: Caliber Engg Co, Contech Instruments Ltd, Jeyaletshmi Machine Works, SU Components.The Company has not received any claim for payment of interest under the interest on delayed payment to Small Scale and AncilliaryIndustries under the Industrial Act, 1993.

5. a) The Company has been advised that the computation of net Profits for the purpose of Directors remuneration under Section 349 of theCompanies Act, 1956 need not be enumerated since no commission has been paid to the Directors. Fixed monthly remuneration hasbeen paid to the Directors as per Schedule XIII to the Companies Act, 1956.

b) Directors Remuneration

(Rs. in lacs)

2003-04 2002-03

Salary 56.89 55.93

Perquisites 05.41 18.59

62.30 74.52

6. a) The Company has discontinued its manufacturing operation at plastic processing unit, situated at Rakholi (Silvassa) from Nov 2003.The Gross Block, Net Blocks and Capital Work in progress as at 31st March, 2004 in respect of the said units are Rs. 674.67 Lacs& Rs 382.81 Lacs & Rs 4.88 Lacs respectively. As the realizable value of plant and machinery is not determined the losses, if any, onthis account will be accounted for as and when determined.

b) After the close of the financial year, the Company has also discontinued its manufacturing operations at plastic processing unit, situatedat Masat (Silvassa) and Daman.

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SCHEDULES FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS (Contd.,)7. During the year the company has utilised sales tax exemption certificate ( Permited to claim exemption in terms of entry E-11, of the schedule

appended to Government of Maharashtra notification u/s 41 of Bombay Sales Tax Act) for Rs. 61.66 Lacs (Previous Year Nil) and paid sales taxamounting to Rs. 0.35 Lacs (Previous Year Nil) in respect of steel segment. As the amounts was not recovered from the customers the same hasnot been adjusted against the sales.

8. Extraordinary items represents export incentives aggregating to Rs. 1327 Lacs, arising from transfer of benefits under DEPB scheme, whichpertains to the exports made during the year 2002-03. Due to the dispute with DGFT relating to classification of products under the EXIM policy,the Company could not receive these DEPB entitlements for its steel segment for the year 2002-03 and the same were received during the year

ended 31st March 2004. As advised the same has been considered as extraordinary item.9. Hitherto the Company was accounting for the benefits in respect of DEPB scheme against the export made by it as and when the goods were

imported against them or the licence/credit were sold, as the case may be. From the Current year, the benefits under DEPB Scheme arerecognized in the Profit and Loss account when the right to receive the DEPB credits as per the terms of the schemes is established in respect ofexports made. This change in accounting policy has resulted an additional DEPB benefits of Rs. 301.13 Lacs for the year ended 31st March2004.Consequently the turnover and profit before tax for the year ended 31st March 2004 is higher by Rs. 301.13 Lacs.

10. Net Pre-operative Expenditure(Rs.in lacs)

Particulars 2003-2004 2002-2003Opening Balance (0.02) 119.86Add : Transferred from Profit & Loss Account 55.79

(0.02) 175.65

Less : Capitalised during the year (0.02) 175.67

Closing Balance ( 0.02)11. Debtors include Rs 0.09 Lacs(Previous year NIL) due from Tuf Ropes Pvt Ltd, a Company in which Directors are interested.12. The deferred tax liability as at 31st March, 2004 comprises of the following :

(Rs. in Lacs)As on As on

31.03.2004 31.03.2003(i) Deferred Tax Liability

Related to fixed assets 1229.18 1168.92(ii) Deferred Tax Assets

Provision for diminution in value of investment 10.09 109.90Disallowance under the Income Tax Act, 1961 10.80 0.04

Total 20.89 109.94

Deferred tax Liability (net) 1208.29 1058.98

13. Basic and Diluted Earnings per Share

2003-04 2002-03(a) Net Profit available for equity Shareholder (Rs. in lacs) 2759.22 1708.79Amount used as numerator)

(b) Weighted Average Number of equity shares used as denominator for calculating EPS 86,26,940 89,95,678(c) Basic & Diluted Earning Per Share (Rs.)

Including extraordinary item 31.98 19.00Excluding extraordinary item 22.29 19.00

Reconciliation between Number of sh

Documents

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