DIRECTORS' REPORT

Dear Shareholders,

rdYour Directors have pleasure in presenting the 23

Annual Report on the operation of the company together st

with audited statement of accounts for the year ended 31

March, 2005, Auditors' Report and Review of Accounts

by the Comptroller & Auditor General of India.

Financial Results :

Your Directors are glad to present below the highlights of

the company's performance for the financial year ended st

March 31 , 2005 :-

(Rs. In Crores)

Gross Sales / Income 1138.07

Net Sales / Income 1085.84

Total Expenditure 771.22

Operating Profit (PBIDT) 314.62

Less : Interest 124.96

Cash Profit 189.66

Less : Depreciation 74.64

Profit before Tax 115.02

Less : Provision for Tax 9.02

Net Profit after Tax 106.00

During the year under review, which is the first full year

of commercial operation, your company has posted a

operating profit of Rs. 314.62 crores and a net profit of

Rs.106 crores after providing interest of Rs. 124.96

crores, depreciation of Rs. 74.64 crores and tax of Rs.

9.02 crores on a net turnover of Rs.1086 crores. The

distribution of revenue during the year under review is

given below :

During the current financial year the return on equity and

capital employed have marked 30% and 17%

respectively. Despite a higher level of activity in terms

of production and sales values and increase turnover,

total working capital borrowing was brought down to

zero level resulting savings in monthly interest of Rs. 35

lacs in cash credit account.

During the year, the project payments of Rs. 100 crores

were met through internal cash accrual. There has been a

net saving towards interest on long term borrowing on

account of implementation of corporate debt

restructuring package sanctioned by the lenders in the

current financial year. The Cenvat credit of Rs.39

crores have been transferred from erstwhile Konark Met

Coke Limited on merger with the company and out of

which Rs.23.94 crores have been utilized by the

company.

Merger :

Konark Met Coke Limited (KMCL), an erstwhile sister

concern of the company, was merged with the company

following approval of the scheme of merger by the

shareholders of both the companies and Orissa High

Distribution of Revenue - 2004-05

Materials

Consumed

(57%)

Oprn. & Other

Expenses

(10%)

Employees

Remuneration &

Benefits

(2%)

Repair &

Maintenance

(1%)

Interest

(12%)

Depreciation

(7%)

Tax

(1%)

Net Profit

(10%)

stCourt order dated 05.11.2004. The appointed date of the merger is 1 April, 2004. Accordingly, coke oven plant and

power plant of Konark Met Coke Ltd. have become operating units of the company. The scheme was given effect to in th

the books as on the appointed date in pursuance to the order passed by the Hon'ble Orissa High Court on 5 November,

04. Pursuant to the merger, the erstwhile shareholders of Konark Met Coke Ltd., were allotted 13,27,22,870 equity

shares of Rs. 10/- each fully paid up in the ratio of 1 : 1.

Production Performance :

During the year under review, your company became the

largest pig iron producer in India. The company has produced

615619 t of hot metal which was 31.1% more over previous

year. The pig iron production was 552216 t and growth over

previous year was 35.80%. The high growth in pig iron

production is attributed to better process management, which

include improvement in the pig iron yield from hot metal. The thtrial operation of coke oven plant commenced from 8 July, 2004 (commercial production from 01.09.2004) and the

plant stabilized within 3 months. The coke oven plant from the date of commercial operation has produced 362300 t of

BF coke along with other by products such as crude tar and ammonium sulphate. The BF coke produced is of good

quality and has improved blast furnace techno-economics. This has eliminated company's dependence for coke from

outside.

Coke oven Battery

Pig CastingPig Casting

The sinter plant produced 812639 t of gross sinter to meet

the requirement of blast furnace. Use of sinter has

improved blast furnace productivity and reduced coke

consumption considerably.

The steam turbo generator II of power plant was thsynchronized on 9 October, 2004 and with this your

company has generated 142714420 units of power which

is higher by 48.68% over last year. The company is self

sufficient in power and is also exporting substantial power

to GRIDCO of Orissa.

Power Plant

Sinter Plant

The production performance for the year under review is

presented below :

* Since sinter plant commissioned on 01.03.2004,

the production (17352 t) for previous financial

year being for one month has not been reflected.** Coke oven plant commissioned on 08.07.2004.

Therefore, production figure of BF coke for previous financial year is not applicable.

Techno-economics :

Use of in-house coke, sinter and operational improvements has improved the blast furnace productivity and operations during the year. Gross coke consumption per ton of pig iron reduced by 303 kg over the last year. Productivity was 1.010 t/cum/day (working volume) as against 0.768 t/cum/day of last year. Pig iron to hot metal yield improved by 3.10% over the previous year.

Nut coke consumption per ton of hot metal increased by 36 kg and LDO consumption per ton of steam generation reduced by 0.72 lit over previous year.

Sales Performance :

During the period under review, your company became the largest exporter of pig iron in India even after maintaining 96.67% of last year despatch to domestic markets. The company has sold 573417 t of pig iron with a growth of 47.50% over pervious year. Growth in pig iron loading from plant for export was 188.02%. After commissioning of coke oven plant, 117722 t of BF coke has been sold.

Future Outlook :

Your company has started profit from the first full year of its integrated operations. In order to enhance value addition in its out put, your company has drawn up plans to implement the Phase II of the project involving steel melting shop, rolling mill and develop its captive iron ore mines.

Mining :

The company has been granted a mining lease for iron ore by Govt. of Orissa over an area of 1798.338 h. The detailed investigation work in the granted mining lease area is in progress and based on which the detailed feasibility report will be prepared for investment decision. Necessary clearances from the statutory authorities are being obtained for execution of the lease and commencement of the mining operation.

Energy Conservation :

Various improvements in process parameters to effect energy conservation were implemented during the year. The most significant were

(a) Reduction in LDO consumption in power plant and,

(b) Reduced coke consumption in blast furnace.

The boilers in power plant are designed to run with support of light diesel oil by BHEL. However, company with in-house technical expertise has achieved 'Zero' LDO

thconsumption for 45 consecutive shifts from 9 February'

th2005 to 24 February' 2005. The other various measures taken by the company in this regard are annexed at Annexure-I.

Environment and Pollution :

Your company has taken the following process measures to control pollution thereby protecting the environment which is an integral part of the operation & maintenance of the project :

- Dust suppression in FFCB is under implementation.

- Dust removal system at junction points in RMHS and coke sorting plant is under implementation.

- Entire coke dust produced in coke oven is consumed in sinter plant.

- 1385 t of flue dust generated at BF is consumed in

sinter plant.

- All the spillovers at various junction points were

collected and recycled in sinter plant.

48.68%growth

over lastyear

35.8%growth

over lastyear

Afforestation and Greening Efforts :

The company recognizes the importance of global

warming and the need for greater energy saving measures

to reduce CO emissions by carrying out extensive 2

plantation in and around the plant. About, 2,50,000

number of trees were planted by the company.

Approximately 30 percent of total land acquired by the

company is covered under afforestation.

Corporate Social Responsibility :

It has always been the endeavourer of your company to

assist community in promotion of health, education and to

extend support in the peripheral development and in the

event of natural calamities. The notable activities during

the year worth highlight are contribution of Rs. 5 lakhs to

Prime Minister's relief fund for Tsunami victims out of

which 2.5 lakhs is the contribution by the Company. Your

company had also assisted in the development of

neighbouring high schools by cash assistance. Company

also extended financial support for organizing Rath Yatra

in Sukinda and donating to District Red Cross

organization, which undertakes various relief and

community service activities. The company has set an

ambitious Corporate Social Responsible plan for the year

2005-2006.

Training :

To impart knowledge, skill and improve management

skills various training programmes were arranged in-

house and participants were sent outside for technical

training programmes. 92 employees participated in 27

programmes for outside short-term training programmes.

16 training programmes were conducted in which 227

employees participated. Safety training was given to 124

employees in 8 programmes.

Personnel :

At the industrial relations front, your company continued to

have peace and cordial relations with the employees.

During the financial year 2004-05 none of the employees

was covered under the purview of Section 217 (2A) of the

Companies Act, 1956 read with the Companies (Particulars

of Employees) Rules, 1975, as amended.

Corporate Governance:

Your Company reaffirmed to further improve the

Corporate Governance practice by laying emphasis on

substance of Corporate Governance over the form and by

adopting both ethical business standards and transparency

in all segments of its operation.

A separate report of the Directors on Corporate

Governance is placed at Annexure - II and forms a part of

this report.

Directors Responsibility Statement :

Pursuant to the provisions of Section 217 (2AA) of the

Companies Act, 1956 your Directors state :

§ that in the preparation of the annual accounts for the st

financial year ended 31 March, 2005, the applicable accounting standards have been followed along with proper explanation relating to material departures;

§ that the directors had selected such accounting policies and applied them consistently 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 at the end of the financial year and of the profit & loss account of the Company for the year under review;

§ that 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 fraud and other

irregularities;

§ that the directors had prepared the accounts for the st

financial year ended 31 March, 2005 on a 'going concern' basis.

Energy, Technology & Foreign Exchange :

Details of energy conservation and research &

development activities undertaken by the Company along

with the information in accordance with the provisions of

Section 217(1)(e) of the Companies Act, 1956, read with

the Companies (Disclosure of Particulars in the Report of

Board of Directors) Rules, 1988, is Annexed.

Comments of C & AG and Statutory Auditors observations :

The comments of C & AG under Section 619 (4) of the

Companies Act, 1956 along with the Management Replies

thereto on the Accounts of the Company for the year ended

31st March' 2005 are annexed to this report.

Directors :

Shri S. K. Sarna, Jt. Managing Director has been appointed

as Managing Director of the Company with effect from

03.12.2004, subject to approval of the shareholders at the

ensuing Annual General Meeting. Shri M. P. Gupta, Shri D.

P. Bagchi nominated by MMTC and Dr. H. R. Subramanya,

nominated by NMDC were appointed as additional

Directors of the Company w.e.f. 21.02.2005. They hold

office until the conclusion of this Annual General Meeting

and are eligible for re-appointment. Pursuant to the scheme

of merger of KMCL with the Company sanctioned by

Hon'ble High Court, Mr. Sanjeev Chopra, IAS nominated

by OMC was appointed as Director of the company w.e.f.

21.02.2005.In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri

Sanjeev Batra, Shri S. K. Kar and Shri Priyabrata Patnaik, IAS retire from the Board of Directors by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

Auditors :

M/s Nag & Associates, Chartered Accountants,

Bhubaneswar have been appointed as Auditors for the

Financial year 2004-2005 by the Department of Company

Affairs vide Letter No. CA.V / COY / CENTRAL GOVT.

NISPAT(1)/804 dtd. 04.10.2004.

Acknowledgements :

Your Directors wish to place on record their appreciation

for the support and co-operation extended by every

member of the NINL family. Your Directors express their

gratitude to all the stake holders including Ministry of

Commerce, Govt. of India, Ministry of Steel, Govt. of

India, Department of Steel & Mines, Govt. of Orissa, other

Central and State Govt. agencies, Banks and Financial

Institutions, Shareholders and Business associates for their

continued co-operation and valuable support. Your

Directors look forward to their continued support and co-

operation in the coming years.

For and on behalf of the Board

Place: New Delhi

Date: 29/08/2005 S. D. KapoorChairman

Annexure - I

ANNEXURE TO THE DIRECTORS' REPORT

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in Report of the Board of Directors) Rules, 1988 and forming part of Directors' Report for the

styear ended 31 March, 2005.

A. Conservation of Energy :

(a) Energy conservation measures taken :

- LDO consumption reduced in power plant by 0.72

lit/ton of steam generation by optimizing process

parameters and in-house development of 'Zero'

LDO consumption as against minimum LDO

support design by the manufacturer.

- Provision of coke oven gas for flaring of BF gas as th against LPG used previously w.e.f. 12 August,

2004.

- With use of sinter, in-house coke and better process

management, gross coke rate per ton of pig iron

reduced by 303 kg.

- 1,01,493 t of CDCP steam used as process steam.

- Installation of coke dry cooling plant at coke

oven complex, which utilizes sensible heat of

coke to produce HP steam, which is being

utilized for production of electric power.

(b) Additional investments and proposals for

reduction of consumption of energy :

- Commissioning of runner heating in Blast furnace

by coke oven gas instead of LPG.

(c) Impact of the above measures :

- Total saving of Rs. 1.36 crores achieved against

reduced LDO consumption.

- Rs. 1,05,000/- per month saving achieved against

CO gas consumption instead of LPG.

(d) Total energy consumption and energy

consumption per unit of production :

- Form A enclosed.

B. Technology Absorption :

(e) Efforts made in technology absorption as per

Form B :

Research & Development (R&D)

FORM B

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

company :

- 85% sinter burden (monthly average) in blast furnace was established using ore fines of Daitary mines for sinter making. This resulted in reducing coke consumption in Blast Furnace.

- Nut coke to the extent of 62 Kg/t HM (monthly average) was achieved. This helped in reducing coke consumption in production of hot metal in BF.

2. Expenditure on R & D :

- There was no separate expenditure made under R&D head. However, the expenditure for all the R&D activities were charged under revenue account.

3. Technology absorption, adaptation & innovation :- Latest DCS technology of Siemens supplied by M/s.

Rautaurrkki, Finland, in CDPC has been absorbed. it includes complete auto operation from coke recipt in bucket car to charging to the chamber and discharge of coke without operator in between.

- The central portion of PCM mould was frequently cracking, thereby increasing the mould consumption, operational problem due to sticking of pigs to the moulds. By giving slight extended curvature in mould this has been eliminated resulting in increased life of moulds, by around four months. Also 45 Kg moulds were replaced by 60 Kg moulds to improve productivity of pig casting machine.

C. Foreign Exchange Earnings and Outgo :

(f) Total foreign exchange earnings & outgo during 2004-05 ( Rs. in Thousand) :

i) Total Foreign Exchange outgo : 2,80,682

ii) Total Foreign Exchange earned : NIL

ANNEXUREFORM A

( See rule 2)Form for disclosure of particulars with respect to conservation of energy

A. Power and fuel consumption2004-05 Previous year

(01.04.04 (01.03.04 to to 31.03.05) 31.03.04)

1. Electricity(a) Purchased

Unit (Kwh) 29429000 4259733Total amount ( Rs. Lakhs) 810 134.11Average rate / unit ( Rs./Kwh) 2.75 3.15

(b) Own generation(i) Through diesel generator(Kwh) NIL NIL Unit per Ltr. of diesel oil NIL NIL Average cost / unit NIL NIL(ii) Through Steam turbine / generator (Kwh) 112875000 NIL Units per Ltr. of fuel oil / gas - NIL Average cost / unit (Rs.) 2.33 NIL

2. Coke used in blast furnace(skip)Quantity (Tons) 333478 19035Total cost ( Rs. Lakhs) 27505 2245.29Average rate ( In Rs./t) 8248 11796

3. LPGQuantity (Tons.) 601.49 92.60Total amount (Rs. Lakhs) 131.39 20.12Average rate ( In Rs./t) 21844 21727

4. LDOQuantity ( Kilo Liters) 740 -Total cost (Rs. Lakhs) 151.34 -Average rate ( In Rs./ kl.) 20452 -

5. BF gas (internal generation) Quantity ('000 cum) 639968 19370Total cost (Rs. Lakhs) 1919.9 40.67Average rate (Rs./'000cum) 300 210

6. Coking Coal Quantity (Tons.) 547981 -Total cost (Rs. Lakhs) 22367 -Average rate (Rs./t) 4082 -

B) Consumption per unit of productionStandards 2004-05 Previous year

(If any) (01.04.04 to (01.03.04 to 31.03.05) 31.03.04)

1 2Products (with details) Electricity Kwh/tHM 36.68 58.63Furnace oil NIL NILCoke (dry) Kg./t HM 533 668BF gas cum/t HM 614 725L.P.G Kg./t GS 0.732 5.3Coking Coal Kg./t Coke 1460 NILLDO Lit/t steam generation 1.22 -

Data related to coke oven and power plant is w.e.f. 01.09.04 to 31.03.05.

ANNEXURE - IICORPORATE GOVERNANCE

The company's business culture and practices are founded upon a common set of values that govern its relationships with customers, suppliers, shareholders, employees, and the communities in which it operates. These values include highest standards of transparency, integrity, responsibility and accountability, social responsiveness, ethical business practices and commitment to the organization, which have been adopted as a self-discipline code.

Board of Directors:

Presently NINL Board of Directors is comprised of 13

Directors out of which 3 Directors are Independent. Except

the Managing Director and Director (Finance) all other

Directors including Chairman are Non-executive

Directors. All the Directors are highly qualified and

experienced professionals. Four Nos of Board Meetings

were held during the year under review. The Composition

of the Board of Directors and their attendance in the

Meeting during the year and also number of other

Directorship held by Directors in other Board are given

below:

Attendance of Directors at the Board Meetings held during 2004-05.

Sl. Name of the Director Category of No. of Board No. of Board No. of No. Directorships Meetings Meetings Directorships

held attended in other Boards1. S. D. Kapoor, Chairman

(01.04.04 to 31.03.05) Non-Executive 4 3 52. S. K. Kar

(01.04.04 to 31.03.05) Non-Executive 4 4 23. Dr. S. R. Jain

(01.04.04 to 31.03.05) Independent 4 4 24. S. Batra

(01.04.04 to 31.03.05) Non-Executive 4 2 35. D. P. Bagchi

(21.02.05 to 31.03.05) Non-Executive 1 1 46. M. P. Gupta

(21.02.05 to 31.03.05) Non-Executive 1 1 27. Dr. S. N. Dash, IAS

(01.04.04 to 31.03.05) Independent 4 2 48. P. Patnaik, IAS

(01.04.04 to 31.03.05) Non-Executive 4 3 79. Dr. R. N. Bohidar, IAS

(01.04.04 to 01.12.04) Non-Executive 2 1 410. B. Chatterjee, IAS

(01.12.04 to 31.03.05) Non-Executive 2 2 111. S. Chopra, IAS

(21.02.05 to 31.03.05) Non-Executive 1 - 312. M. N. Buch

(01.04.04 to 31.03.05) Independent 4 4 -13. Dr. H. R. Subramanya

(21.02.05 to 31.03.05) Non-Executive 1 - 214. P. K. Gupta

Director (Finance)(01.04.04 to 31.07.04) Executive 1 1 -

15. S. K. SarnaJt. Managing Director(01.04.04 to 02.12.04)Managing Director(03.12.04 to 31.03.05) Executive 4 4 1

Audit Committee of Directors:

The Board of Directors of the Company has constituted the

Audit Committee of Directors to oversee the company's

financial reporting process and disclosure of financial

information. The Audit Committee of Board of Directors

met 2 times during the year under review and the attendance

of the members at the meetings were as follows :

Chairman, Managing Director and Director (Finance) of the

company also attended the above meetings to assist the

Attendance of Members at the Audit Committee Meetings held during 2004 -05:

Sl. Name of the Status Period No. of No. of No. Member Meetings Meetings

held attended

1. M. N. Buch Chairman 1.4.04 to 31.3.05 2 22. Dr. S. R. Jain Member 1.4.04 to 31.3.05 2 23. P. Patnaik, IAS Member 1.4.04 to 31.3.05 2 14. Dr. S. N. Dash, IAS Member 1.4.04 to 31.3.05 2 1

committee in its deliberations. The minutes of the above

meetings were submitted for the information of the Board.

Share and Bond / Debenture Committee of Directors:

The Board of Directors have constituted Share and

Bond/Debenture Committee of Directors comprising of

three Directors to expeditiously consider and approve

allotment / issue, transfer, transmission, consolidation &

spliting of shares and bonds of the Company. During the

year, the committee met thrice. Pursuant to merger of

erstwhile KMCL with the company, the committee

allotted 13,27,22,870 equity shares of Rs. 10/- each fully

paid up in the ratio of 1 : 1 to the shareholders of erstwhile

KMCL. The committee allotted 672 Bonds of Rs.

5,00,000/- each and 160 Bonds of Rs. 10,00,000/- each to

the bondholders of erstwhile KMCL.

ANNEXURE - III

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OFFICE OF THEPRINCIPAL DIRECTOR OF COMMERCIAL AUDIT

& EX-OFFICIO, MEMBER, AUDIT BOARD-I1, COUNCIL HOUSE STREET,

KOLKATA-700 001

ÚC µ/ Telegram: ""<w>µç©C}<»¦>''/Dircomit

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30 AUG 2005

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COMMENTS OF THE COMPTROLLER & AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF NEELACHAL ISPAT NIGAM LIMITED, BHUBANESWAR FOR THE YEAR ENDED 31ST MARCH 2005.

The Company has not disclosed the Deferred Tax Assets and Liabilities in the Balance Sheet as required under Accounting Standard - 22 on "Accounting for Taxes on Income"

Sd/-Dated, Kolkata (A. Roychoudhury)The 30th August 2005 Principal Director of Commercial Audit

& Ex-Officio Member, Audit Board-IKOLKATA

CAG COMMENTS & MANAGEMENTS REPLY ON NINL ACCOUNTS FOR THE YEAR 2004-05

Comments of the Comptroller and Auditor Reply of management General of India under Section 619 (4) of the Companies Act, 1956

The Company has not disclosed the Deferred Tax Assets and Liabilities in the Balance Sheet as required under Accounting Standard 22 on “ Accounting for Taxes on Income”.

Treatment of deferred tax assets / liabilities has been disclosed in the Significant Accounting Policies vide Point No. 11 of the Annual Accounts 2004-05.

However, the disclosure on account of deferred tax assets & liabilities as suggested by Audit will be made in the year 2005-06 accounts.

AUDITED ANNUAL ACCOUNTS 2004-05

BALANCE SHEET AS AT 31ST. MARCH, 2005

(Rupees in thousand)

SCHEDULE AS AT 31ST AS AT 31ST

NO MARCH 2005 MARCH 2004

SOURCES OF FUNDS

Shareholders’ funds :

Share Capital 1 3,563,529 2,236,300

Reserve & Surplus 2 1,065,225 4,628,754 5,233 2,241,533

Loan funds:

Secured loans 3 14,873,894 9,911,563

19,502,648 12,153,096

APPLICATION OF FUNDS

Fixed assets :

Gross block 4 17,467,301 11,850,158

Less: Depreciation 812,320 66,037

Net Block 16,654,981 11,784,121

Capital work-in-progress 5 2,249,315 18,904,296 442,019 12,226,140

Current assets, loans and advances:

Inventories 6 1,194,424 1,350,263

Sundry Debtors 7 712,815 --

Cash and bank balances 8 87,477 26,273

Loans and advances 9 455,284 292,311

2,450,000 1,668,847

Less Current Liabilities & Provisions:

Current liabilities 10 1,851,381 1,725,608

Provisions 11 56,542 79,109

1,907,923 1,804,717

Net current assets 542,077 (135,870)

Miscellaneous expenditure : 12 56,275 62,826

(to the extent not written off or adjusted) 19,502,648 12,153,096

Significant Accounting Policies and 29

Notes to Accounts :

Schedules referred to above form an

integral part of the Balance Sheet

For and on behalf of Board of Directors

D.P. Parija S.P. Padhi S. K. Kar S. K. Sarna

Company Secretary E.D. (F&A) Director Managing Director

As per our report of even dateFor Nag & AssociatesChartered Accountants

[I. N. Nag]Partner

Place : BhubaneswarDate : 25th June 2005

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2005

(Rupees in thousand)

SCHEDULE

NO

INCOME

Sales 13 11,380,737 290,370

Accretion / (Depletion) to stocks 14 (339,564) 129,803

Interest earned 15 1,255 2,136

Other revenues 16 4,691 11,047,119 6 422,315

EXPENDITURE

Raw Materials consumed 17 5,908,081 201,228

Employees’ remuneration and benefits 18 178,523 12,565

Store & Spares Consumed 19 152,810 9,259

Power & Utilities 20 283,686 29,536

Repairs and Maintenance 21 122,462 593

Excise Duty 22 528,349 14,233

Office and Administrative Expenses 23 91,590 4,730

Rent, Rates, & Taxes 24 3,260 186

Remuneration to Auditors 25 107 97

Selling Expenses 26 478,872 5,502

Other expenses & provisions 27 152,147 9,148

Interest & financing charges 28 1,249,575 82,129

Depreciation 4 746,456 9,895,918 47,876 417,082

Less Adjustments pertaining 1,151,201 5,233

to earlier years 1,020 --

Profit for the year before tax 1,150,181 5,233

Less Provision for tax 90,189 --

Profit after tax 1,059,992 5,233

Balance brought forward 5,233 –

Balance carried to Balance Sheet 1,065,225 5,233

Significant Accounting Policies and

Notes on Accounts ; 29

Schedules referred to above form an

integral part of Profit & Loss Account.

For and on behalf of Board of Directors

D.P. Parija S. P. Padhi S. K. Kar S. K. Sarna

Company Secretary E.D. (F&A) Director Managing Director

As per our report of even dateFor Nag & AssociatesChartered Accountants

[I. N. Nag]Partner

Place : BhubaneswarDate : 25th June 2005

FOR THE YEAR ENDED 31ST MARCH 2005

FOR THE ONEMONTH ENDED

31ST MARCH 2004