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Contents
Page 1 2 14 16 18 19 20 21 22 34 35 42 48 Corporate Information Notice Chairmans and Vice Chairmans Statement Board of Directors Senior Executive Team Our Businesses Core Values Financial Highlights Management Discussion and Analysis Corporate Social Responsibility Directors Report Corporate Governance Report Financial Statements
Corporate Information
Registered Office
DCM Shriram Consolidated Limited 6th Floor, Kanchenjunga Building, 18, Barakhamba Road, New Delhi 110 001. Tel. No. : (91) 11-23316801 Fax No. : (91) 11-23318072 E.mail : dscl@dscl.com Punjab National Bank State Bank of India Bank of Baroda Oriental Bank of Commerce HDFC Bank Limited M/s. A.F. Ferguson & Co., New Delhi DCM Shriram Credit and Investments Limited DCM Shriram Aqua Foods Limited DCM Shriram International Limited DSCL Energy Services Company Limited DCM Shriram Infrastructure Limited Anant Thermal Energy Limited DCM Shriram Energy and Infrastructure Limited Hariyali Rural Ventures Limited Hariyali Finance Foundation Shriram Bioseed (Thailand) Limited Shriram Bioseed Ventures Limited Shriram Bioseeds Limited Affee Investments Corp. Zeus Investments Limited Bioseed Genetics International Inc. Bioseeds Limited Shriram Bioseed Genetics India Limited Bioseed Research India Private Limited Bioseed Vietnam Limited Bioseed Research Philippines Inc. Shri Ganpati Fertilisers Limited Hariyali Rural Services Limited
Bankers
Auditors Subsidiary Companies
Stock Exchanges where the Securities of the Company are Listed

National Stock Exchange of India Ltd., Exchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai-400 051. Bombay Stock Exchange Ltd., Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400 001.
(It is confirmed that annual listing fee has been paid by the Company to the above Stock Exchanges.)
DSCL ANNUAL REPORT 07-08 1
01
Notice
Ordinary Business:
REGISTERED OFFICE: 6th Floor, Kanchenjunga Building, 18, Barakhamba Road, New Delhi.
Notice is hereby given that the Nineteenth Annual General Meeting of DCM Shriram Consolidated Limited will be held on Tuesday, the 19th August, 2008 at 10.00 A.M. at Air Force Auditorium, Subroto Park, New Delhi to transact the following business: 1. To consider and adopt the Directors Report, the audited Balance Sheet of the Company as at 31st March, 2008 and the Profit and Loss Account for the year ended on that date. 2. To declare dividend on Equity Shares. 3. To appoint a Director in place of Shri Rajiv Sinha who retires by rotation and being eligible offers himself for re-appointment. 4. To appoint a Director in place of Dr. S.S. Baijal who retires by rotation and being eligible offers himself for re-appointment. 5. To appoint a Director in place of Shri Arun Bharat Ram who retires by rotation and being eligible offers himself for re-appointment. 6. To appoint a Director in place of Shri S.C. Bhargava who retires by rotation and being eligible offers himself for re-appointment. 7. To appoint M/s. Deloitte Haskins & Sells, Chartered Accountants, as Statutory Auditors of the Company and to fix their remuneration in place of M/s A.F. Ferguson & Co., who have conveyed their intent not to seek re-appointment at the forthcoming Annual General Meeting. Special Business: 8. To consider and, if thought fit, to pass, with or without modification(s), the following Resolution as an Ordinary Resolution: Resolved that Dr. N.J. Singh who was appointed an Additional Director of the Company and holds office under Section 260 of the Companies Act, 1956 upto the date of Annual General Meeting be and is hereby appointed a Director of the Company, liable to retire by rotation. 9. To consider and, if thought fit, to pass, with or without modification(s), the following Resolution as a Special Resolution: Resolved that subject to such consents and permissions, if any, as may be necessary, approval be and is hereby accorded in terms of Sections 269, 309 and other applicable provisions, if any, of the Companies Act, 1956 and the Schedule(s) thereto, including any statutory amendment or re-enactment thereof, to the re-appointment of Shri Ajay S. Shriram as Chairman and Senior Managing Director on the terms and conditions, including as to remuneration as set out hereunder: Terms & Conditions of re-appointment 1. Tenure Five years w.e.f. 1.11.2008. 2. Remuneration (a) Salary Rs.5.3 lacs per month in the range of Rs.3.5 lacs to Rs.7.5 lacs. (b) Perquisites Perquisites (evaluated as per Income Tax Rules, wherever applicable, and at actual cost to the Company in other cases) like the benefit of the Companys furnished accommodation or house rent in lieu thereof, gas, electricity, water and furnishings, club fees, personal accident insurance, use of Companys car and telephone at residence, medical reimbursement, leave and leave travel concession, education benefits, provident fund, superannuation fund and gratuity in accordance with the scheme(s) and rule(s) applicable to the members of the staff of the Company from time to time, for the aforesaid benefits.
(c) Commission on net profits Such amount as may be decided by the Board of Directors or a Committee thereof from year to year provided that the total remuneration including salary and perquisites along with commission paid to all the Managing/Whole Time Directors shall not exceed the limit laid down under Sections 198 and 309 of the Companies Act, 1956. Remuneration for a part of the Year Remuneration for a part of the year shall be computed on pro-rata basis. Minimum Remuneration In the event of absence or inadequacy of profits in any financial year, the aforementioned remuneration excluding commission shall be paid to Chairman and Senior Managing Director as the minimum remuneration, subject to the approval of the Central Government, if necessary. 3. Functions Subject to the direction, control and superintendence of the Board of Directors, Shri Ajay S. Shriram shall have the overall responsibility for looking after the day-to-day business and affairs of the Company. Termination The appointment of Shri Ajay S. Shriram as Chairman and Senior Managing Director may be terminated by either party giving to the other six calendar months notice in writing. In the event of termination of this appointment of Shri Ajay S. Shriram by the Company, he shall be entitled to receive compensation in accordance with the provisions of the Companies Act, 1956 or any statutory amendment or re-enactment thereof. Resolved further that in the event of any further liberalisation / revision in the ceiling on permissible managerial remuneration or otherwise, the Board of Directors or a Committee thereof be and is hereby authorised to alter, vary and increase the remuneration, notwithstanding the overall remuneration set out as above, as may be prescribed/permissible without requiring any further resolution or consent of or reference to the Members. 10. To consider and, if thought fit, to pass, with or without modification(s), the following Resolution as a Special Resolution: Resolved that subject to such consents and permissions, if any, as may be necessary, approval be and is hereby accorded in terms of Sections 269, 309 and other applicable provisions, if any, of the Companies Act, 1956 and the Schedule(s) thereto, including any statutory amendment or re-enactment thereof, to the re-appointment of Shri Vikram S. Shriram as Vice Chairman and Managing Director on the terms and conditions, including as to remuneration as set out hereunder: Terms & Conditions of re-appointment 1. Tenure Five years w.e.f. 1.11.2008. 2. Remuneration (a) Salary Rs.5.0 lacs per month in the range of Rs.3.5 lacs to Rs.7.5 lacs. (b) Perquisites Perquisites (evaluated as per Income Tax Rules, wherever applicable, and at actual cost to the Company in other cases) like the benefit of the Companys furnished accommodation or house rent in lieu thereof, gas, electricity, water and furnishings, club fees, personal accident insurance, use of Companys car and telephone at residence, medical reimbursement, leave and leave travel concession, education benefits, provident fund, superannuation fund and gratuity in accordance with the scheme(s) and rule(s) applicable to the members of the staff of the Company from time to time, for the aforesaid benefits.
4.
(c) Commission on net profits Such amount as may be decided by the Board of Directors or a Committee thereof from year to year provided that the total remuneration including salary and perquisites along with commission paid to all the Managing/Whole Time Directors shall not exceed the limit laid down under Sections 198 and 309 of the Companies Act, 1956. Remuneration for a part of the Year Remuneration for a part of the year shall be computed on pro-rata basis. Minimum Remuneration In the event of absence or inadequacy of profits in any financial year, the aforementioned remuneration excluding commission shall be paid to Vice Chairman and Managing Director as the minimum remuneration, subject to the approval of the Central Government, if necessary. 3. Functions Shri Vikram S. Shriram shall discharge such duties and functions, as may be assigned to him by the Chairman and Senior Managing Director of the Company from time to time. 4. Termination The appointment of Shri Vikram S. Shriram as Vice Chairman and Managing Director may be terminated by either party giving to the other six calendar months notice in writing. In the event of termination of this appointment of Shri Vikram S. Shriram by the Company, he shall be entitled to receive compensation in accordance with the provisions of the Companies Act, 1956 or any statutory amendment or re-enactment thereof. Resolved further that in the event of any further liberalisation/revision in the ceiling on permissible managerial remuneration or otherwise, the Board of Directors or a Committee thereof be and is hereby authorised to alter, vary and increase the remuneration, notwithstanding the overall remuneration set out as above, as may be prescribed/permissible without requiring any further resolution or consent of or reference to the Members. 11. To consider and, if thought fit, to pass, with or without modification(s), the following Resolution as a Special Resolution: Resolved that subject to such consents and permissions, if any, as may be necessary, approval be and is hereby accorded in terms of Sections 269, 309 and other applicable provisions, if any, of the Companies Act, 1956 and the Schedule(s) thereto, including any statutory amendment or re-enactment thereof, to the re-appointment of Shri Rajiv Sinha as Deputy Managing Director on the terms and conditions, including as to remuneration as set out hereunder: Terms & Conditions of re-appointment 1. Tenure Five years w.e.f. 1.11. 2008. 2. Remuneration (a) Salary Rs.3.8 lacs per month in the range of Rs.2.75 lacs to Rs.6.5 lacs. (b) Perquisites Perquisites (evaluated as per Income Tax Rules, wherever applicable, and at actual cost to the Company in other cases) like the benefit of the Companys furnished accommodation or house rent in lieu thereof, gas, electricity, water and furnishings, club fees, personal accident insurance, use of Companys car and telephone at residence, medical reimbursement, leave and leave travel concession, education benefits, provident fund, superannuation fund and gratuity in accordance with the scheme(s) and rule(s) applicable to the members of the staff of the Company from time to time, for the aforesaid benefits.
(c) Commission on net profits Such amount as may be decided by the Board of Directors or a Committee thereof from year to year provided that the total remuneration including salary and perquisites along with commission paid to all the Managing/Whole Time Directors shall not exceed the limit laid down under Sections 198 and 309 of the Companies Act, 1956. Remuneration for a part of the Year Remuneration for a part of the year shall be computed on pro-rata basis. Minimum Remuneration In the event of absence or inadequacy of profits in any financial year, the aforementioned remuneration excluding commission shall be paid to Deputy Managing Director as the minimum remuneration, subject to the approval of the Central Government, if necessary. 3. Functions Shri Rajiv Sinha shall discharge such duties and functions as may be assigned to him by the Chairman and Senior Managing Director of the Company from time to time. 4. Termination The appointment of Shri Rajiv Sinha as Deputy Managing Director may be terminated by either party giving to the other six calendar months notice in writing. In the event of termination of this appointment of Shri Rajiv Sinha by the Company, he shall be entitled to receive compensation in accordance with the provisions of the Companies Act, 1956 or any statutory amendment or re-enactment thereof. Resolved further that in the event of any further liberalisation / revision in the ceiling on permissible managerial remuneration or otherwise, the Board of Directors or a Committee thereof be and is hereby authorised to alter, vary and increase the remuneration, notwithstanding the overall remuneration set out as above, as may be prescribed/permissible without requiring any further resolution or consent of or reference to the Members. 12. To consider and, if thought fit, to pass, with or without modification(s), the following Resolution as a Special Resolution: Resolved that subject to such consents and permissions, if any, as may be necessary, approval be and is hereby accorded in terms of Sections 269, 309 and other applicable provisions, if any, of the Companies Act, 1956 and the Schedule(s) thereto, including any statutory amendment or re-enactment thereof, to the appointment of Dr. N.J. Singh as Whole Time Director (EHS) on the terms and conditions, including as to remuneration as set out hereunder: Terms & Conditions of appointment 1. Tenure Five years w.e.f. 20.11.2007 2. Remuneration (a) Salary Rs.1.14 lacs per month in the range of Rs.1.00 lac to Rs. 2.00 lacs. (b) Perquisites Perquisites (evaluated as per Income Tax Rules, wherever applicable, and at actual cost to the Company in other cases) like the benefit of the Companys furnished accommodation or house rent in lieu thereof, gas, electricity, water and furnishings, club fees, personal accident insurance, use of Companys car and telephone at residence, medical reimbursement, leave and leave travel concession, education benefits, provident fund, superannuation fund and gratuity in accordance with the scheme(s) and rule(s) applicable to the members of the staff from time to time, for the aforesaid benefits.
(c) Commission on net profits Such amount as may be decided by the Board of Directors or a Committee thereof from year to year provided that the total remuneration including salary and perquisites along with commission paid to all the Managing/Whole Time Directors shall not exceed the limit laid down under Sections 198 and 309 of the Companies Act, 1956. Remuneration for a part of the Year Remuneration for a part of the year shall be computed on pro-rata basis. Minimum Remuneration In the event of absence or inadequacy of profits in any financial year, the aforementioned remuneration excluding commission shall be paid to Whole Time Director (EHS) as the minimum remuneration, subject to the approval of the Central Government, if necessary. 3. Functions Dr. N.J. Singh shall discharge such duties and functions as may be assigned to him by Chairman & Senior Managing Director and Vice Chairman & Managing Director of the Company from time to time. 4. Termination The appointment of Dr. N.J. Singh as Whole Time Director (EHS) may be terminated by either party giving to the other six calendar months notice in writing. In the event of termination of this appointment of Dr. N.J. Singh by the Company, he shall be entitled to receive compensation in accordance with the provisions of the Companies Act, 1956 or any statutory amendment or re-enactment thereof. Resolved further that in the event of any further liberalisation / revision in the ceiling on permissible managerial remuneration or otherwise, the Board of Directors or a Committee thereof be and is hereby authorised to alter, vary and increase the remuneration, notwithstanding the overall remuneration set out as above, as may be prescribed/permissible without requiring any further resolution or consent of or reference to the Members. 13. To consider and, if thought fit, to pass, with or without modification(s), the following Resolution as a Special Resolution: Resolved that pursuant to the provisions of Section 314(1B) of the Companies Act, 1956 (including any Statutory modification(s) or re-enactment thereof, for the time being in force), the Company hereby consents, subject to the approval of the Central Government, for promotion of Shri Aditya A. Shriram as General Manager w.e.f. 1.7.2008, a relative of Chairman and Senior Managing Director of the Company, in the salary scale of Rs.75,000/- to Rs.2,00,000/- p.m. with perks/facilities/incentives and retiral benefits as applicable to officers in his cadre with authority to the Board of Directors/Managerial Remuneration Committee to review and revise his remuneration, so as not to exceed Rs.3.50 Lacs per month, and in due course to promote him to a higher grade/grades as it may consider suitable without requiring any further resolution or consent of or reference to the Members. Resolved further that the remuneration payable to Shri Aditya A. Shriram as aforesaid will be subject to such modification(s) as Central Government may suggest. Resolved further that the Board of Directors/Managerial Remuneration Committee, be and is hereby authorised to take all necessary actions, which are incidental and consequential to give effect to the above Resolution. 14. To consider and, if thought fit, to pass, with or without modification(s), the following Resolution as an Ordinary Resolution: Resolved that pursuant to Section 293(1)(a) and other applicable provisions, if any, of the Companies Act, 1956 and subject to such consents and approvals as may be necessary, the Board of Directors of the Company
or a duly constituted Committee thereof be and is hereby authorised to mortgage and/or charge all or any of the present and future movable and immovable properties of the Company, situated at DSCL Sugar-Ajbapur, District Lakhimpur Kheri (U.P.), DSCL Sugar-Rupapur, District Hardoi (U.P.), DSCL Sugar-Hariawan, District Hardoi (U.P.), DSCL Sugar-Loni, District Hardoi (U.P.), Shriram Fertilisers & Chemicals Complex at Kota (Rajasthan) and Shriram Alkali & Chemicals at Bharuch (Gujarat), units of the Company, together with all buildings and structures thereon and all plants and machinery attached to the earth both present and future and the whole of the undertaking of the Company relating to the said units together with the power in favour of the lender(s) to take over the management of the business and concern and/or undertaking of the Company relating to the aforesaid units, mortgaged to them as per details given hereunder, in certain events of default for the purpose of securing the financial assistance from the respective lenders as mentioned below: a) On Companys property situated at DSCL Sugar Ajbapur, Rupapur, Hariawan and Loni Lender As and by way of Residual Charge on Fixed Assets - Punjab National Bank As and by way of Third pari passu Charge on the movable and immovable Fixed Assets Working Capital Facilities of Rs. 1557.53 Crores (Rs. 487.37 Crores for fund based and Rs. 1070.16 Crores for non-fund based) from the under mentioned Banks : Punjab National Bank State Bank of India Oriental Bank of Commerce Bank of Baroda HDFC Bank Limited Rs. Rs. Rs. Rs. Rs. 830.70 Crores 307.51 Crores 129.53 Crores 129.53 Crores 160.26 Crores Financial Assistance Rs. 56.43 Crores
b) On Companys property situated at DSCL Sugar - Hariawan Lender As and by way of First pari passu Charge on the movable and immovable Fixed Assets and Second pari passu Charge on all Current Assets - International Finance Corporation, Washington As and by way of First pari passu Charge on movable and immovable Fixed Assets - UCO Bank c) On Companys property situated at DSCL Sugar - Loni Lender As and by way of First pari passu Charge on movable and immovable Fixed Assets - UCO Bank Financial Assistance Financial Assistance
Rs. 26.40 Crores

(Equivalent to USD 6.6 million)
Rs. 7.50 Crores
Rs. 7.50 Crores
DSCL ANNUAL REPORT 07-08
d) On Companys property situated at Shriram Fertilisers & Chemicals Complex at Kota (Rajasthan) Lender As and by way of Third pari passu Charge on the movable and immovable Fixed Assets Working Capital Facilities of Rs. 1557.53 Crores (Rs. 487.37 Crores for fund based and Rs.1070.16 Crores for non-fund based) from the under mentioned Banks : Punjab National Bank State Bank of India Oriental Bank of Commerce Bank of Baroda HDFC Bank Limited Rs. Rs. Rs. Rs. Rs. 830.70 Crores 307.51 Crores 129.53 Crores 129.53 Crores 160.26 Crores Financial Assistance
e) On Companys property situated at Shriram Alkali & Chemicals at Bharuch (Gujarat) Lender As and by way of First pari passu Charge on movable & immovable Fixed Assets - UCO Bank Financial Assistance
Rs. 140 Crores
together with interest, additional interest, further interest, liquidated damages, compound interest, premia on prepayment, costs, charges, expenses and all other monies payable by the Company and that such mortgage(s)/ charge(s) shall rank pari passu with similar mortgage(s) and charge(s) created/to be created by the Company to secure the financial facilities/borrowings availed or to be availed by the Company from Financial Institution(s)/ Bank(s)/Body(ies) Corporate. Resolved further that the mortgage(s)/charge(s) created or to be created and/or all Agreements/Documents executed or to be executed and all acts done or to be done in terms of the above Resolution by and with the authority of the Board of Directors or a duly constituted Committee thereof be and are hereby ratified and confirmed. Resolved further that the Board of Directors or a Committee thereof be and is hereby authorised to finalise the documents to secure the facilities/borrowings as aforesaid and to do all such acts, deeds, matters and things as may be necessary, desirable, expedient for implementing the above Resolution and to resolve any question or difficulty which may arise in relation thereto, or otherwise considered by the Board of Directors or a duly constituted Committee thereof to be in the best interest of the Company.
By Order of the Board
New Delhi 13th May, 2008
(B.L. SACHDEVA) Company Secretary
Notes: 1. The relevant Explanatory Statement pursuant to Section 173(2) of the Companies Act,1956 is annexed hereto. 2. A Member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself and the proxy need not be a Member of the Company. A Proxy Form is sent herewith. 3. The Share Transfer Books and the Register of Members of the Company will remain closed from 5th August, 2008 to 12th August, 2008 (both days inclusive). 4. Members who are holding shares in identical names in more than one folio are requested to write to M/s. MCS Ltd., the Registrar and Share Transfer Agent (RTA), Srivenkatesh Bhavan, W-40, Okhla Industrial Area, Phase-II, New Delhi-110 020, enclosing their Share Certificate(s) to enable the Company to consolidate their holding in one folio. 5. Members are requested to notify immediately any change in their address to M/s. MCS Ltd., RTA, quoting their folio numbers. 6. Pursuant to Section 205A of the Companies Act, 1956, the dividends upto the financial year 1994-95 which remained unpaid/unclaimed had been transferred to the General Revenue Account of the Central Government. The Members, who have not claimed their dividend for the said period so far may claim the amount from the Registrar of Companies, NCT of Delhi and Haryana, 4th Floor, IFCI Tower, 61 Nehru Place, New Delhi. Pursuant to the amended provisions of Section 205A of the Companies Act, 1956, which came into effect w.e.f. 31.10.1998, the Company is obliged to transfer any amount lying in the unpaid dividend account which remains unpaid or unclaimed for a period of 7 years from the date of such transfer to the unpaid account to the credit of Investor Education and Protection Fund (the Fund). The Company has already transferred the unpaid dividend for the financial year 1999-2000 to the Fund. Please note that no claim shall lie against the Company or the Fund in respect of individual amounts of dividend, once the same is transferred to the Fund. In view of this, the Members of the Company who have not yet encashed their dividend warrant(s) for the financial year ended 31.3.2001 and thereafter may write to the Company immediately. 7. In terms of Section 109A of the Companies Act, 1956, the Member(s) of the Company may nominate a person on whom the Shares held by him/them shall vest in the event of his/their death. Member(s) desirous of availing this facility may submit nomination in Form 2B. 8. In terms of Notification issued by the Securities and Exchange Board of India, Equity Shares of the Company are under compulsory demat trading by all investors w.e.f. 21st March, 2000. Members are, therefore, advised to dematerialise their shareholding to avoid inconvenience in future. 9. A Special Notice under Section 190 of the Companies Act, 1956 has been received from a Member of the Company for appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as Statutory Auditors of the Company, in place of M/s. A.F. Ferguson & Co., from the conclusion of the forthcoming Annual General Meeting till the conclusion of the next Annual General Meeting of the Company.
10. Appointment/Re-appointment of Directors At the ensuing Annual General Meeting Shri Rajiv Sinha, Dr. S.S. Baijal, Shri Arun Bharat Ram and Shri S.C. Bhargava, Directors, retire by rotation and being eligible offer themselves for re-appointment. Dr. N.J. Singh was appointed an Additional Director in November, 2007 and he holds office upto the date of the ensuing Annual General Meeting. The Members approval for re-appointment of Shri Ajay S. Shriram, Shri Vikram S. Shriram and Shri Rajiv Sinha as CMD, VCMD and DMD respectively for a period of 5 years w.e.f. 1.11.2008, and for appointment of Dr. N.J. Singh as WTD (EHS) for a period of 5 years w.e.f. 20.11.2007 is being sought. The information, as required under the Listing Agreement, in relation to the aforesaid Directors is as under:
Name of the Director Date of Birth Nationality Date of Appointment on the Board of the Company Qualification Expertise in Functional Area B.Com, PMD (Harvard) General Management, Strategy, HR, Agri Businesses, Sugar and Retail Directorships held in other Indian Companies - DCM Shriram International Ltd. - DCM Shriram Aqua Foods Ltd. - DCM Shriram Infrastructure Ltd. - DSCL Energy Services Co. Ltd. - DCM Shriram Credit and Investments Ltd. - Shriram Bioseed Genetics India Ltd. - Bioseed Research India Pvt. Ltd. - Hariyali Kisaan Bazaar Ltd. - Anant Thermal Energy Ltd. - Shriram Bioseed Ventures Ltd. - DCM Shriram Energy and Infrastructure Ltd. - Hariyali Finance Foundation - Hariyali Rural Ventures Ltd. - Hariyali Rural Services Ltd. - Hero Corporate Service Ltd. - The Fertilizer Association of India - The Indian Public Schools Society Chairman/Member of the Committee(s) of the Board of Directors of the Company Chairman/Member of the Committee(s) of the Board of Directors of other Companies in which he is a Director Chairman Audit Committee - Shriram Bioseed Genetics India Ltd. Chairman Audit Committee - DCM Shriram Credit and Investments Ltd. - DCM Shriram Aqua Foods Ltd. Member Audit Committee - Shriram Bioseed Genetics India Ltd. Member Audit Committee - DCM Shriram Aqua Foods Ltd. - Shriram Bioseed Genetics India Ltd. NIL Member Shareholders/Investors Grievance Committee Member Shareholders/Investors Grievance Committee NIL NIL B.Com (Hons.), ACA General Management, Strategy, Finance, Agri Businesses, Sugar and Retail - DCM Shriram International Ltd. - DCM Shriram Credit and Investments Ltd. - DCM Shriram Aqua Foods Ltd. - DCM Shriram Infrastructure Ltd. - Shriram Bioseed Genetics India Ltd. - DSCL Energy Services Co. Ltd. - Bioseed Research India Pvt. Ltd. - Hariyali Kisaan Bazaar Ltd. - Anant Thermal Energy Ltd. - DCM Shriram Energy and Infrastructure Ltd. - Shriram Bioseed Ventures Ltd. - Hariyali Finance Foundation - Hariyali Rural Ventures Ltd. - Hariyali Rural Services Ltd. B. Tech (Mech.), SEP (Stanford) General Management, Strategy, Agri Businesses, Plastics, Power and IT - DCM Shriram Aqua Foods Ltd. - Shriram Bioseed Genetics India Ltd. - Bioseed Research India Pvt. Ltd. - Hariyali Kisaan Bazaar Ltd. - Anant Thermal Energy Ltd. - Hariyali Finance Foundation - Hariyali Rural Ventures Ltd. - Hariyali Rural Services Ltd M.Sc., Ph.D. Environment, Health, Safety and Quality Systems NIL Shri Ajay S. Shriram 04.03.1954 Indian 24.07.1989 Shri Vikram S. Shriram 06.12.1958 Indian 22.05.1990 Shri Rajiv Sinha 05.06.1950 Indian 01.11.1998 Dr. N.J. Singh 29.11.1953 Indian 20.11.2007
10
Name of the Director Date of Birth Nationality Date of Appointment on the Board of the Company Qualification Expertise in Functional Area Directorships held in other Indian Companies
Dr. S.S. Baijal 06.09.1929 Indian 22.05.1990 B.Sc., M.Sc., D. Phil. General Management, Finance and Audit - Atul Ltd. - Max India Ltd. - DCM Shriram Credit and Investments Ltd. - Rossell Tea Ltd. - BMG Enterprises Ltd. - Delhi Guest Houses Private Ltd. - Sigma Microsystem Pvt. Ltd. - Max New York Life Insurance Company Ltd.
Shri Arun Bharat Ram 15.11.1940 Indian 22.05.1990 Graduate in Industrial Engineering Nylon Tyre Chord Industry and Industrial Synthetics Business - SRF Ltd. - SRF Polymers Ltd. - SRF Polymers Investments Ltd. - Essilor India Pvt. Ltd. - Moser Baer India Ltd. - Samcor Glass Ltd. - Samtel Color Ltd. - J.K. Paper Ltd. - SRF Fluorochemicals Ltd. - SRF Energy Ltd. - Bharti Airtel Ltd. - SRF Infrastructure Ltd.
Shri S.C. Bhargava 20.07.1945 Indian 11.08.2004 B.Com, Chartered Accountant Insurance Industry, Finance and Investment - IL & FS Insurance & Risk Management Services Ltd. - OTC Exchange of India - UTI Asset Management Company Ltd. - Aditya Birla Nuvo Ltd. - Escorts Ltd. - Swaraj Engines Ltd. - Jaiprakash Associates Ltd. - Jaiprakash Enterprises Ltd. - Jaiprakash Power Ventures Ltd. - Jay Pee Cements Ltd. - Mudra Lifestyles Ltd. - A.K. Capital Services Ltd. - Cox & Kings (India) Ltd. - UTI Retirement Solutions Ltd. - IL & FS Academy for Insurance & Finance Ltd.
Chairman/Member of the Committee(s) of the Board of Directors of the Company
Chairman Audit Committee Member Shareholders/Investors Grievance Committee
Member Audit Committee
NIL
Chairman/Member of the Committee(s) of the Board of Directors of other Companies in which he is a Director
Chairman Audit Committee - Rossell Tea Ltd. - Atul Ltd. Member Audit Committee - Max India Ltd.
Chairman Shareholders/Investors Grievance Committee - SRF Polymers Ltd. Member Shareholders/Investors Grievance Committee - SRF Ltd. - J.K. Paper Ltd. Audit Committee - Bharti Airtel Ltd.
Chairman Audit Committee - Mudra Lifestyles Ltd. Member Audit Committee - Swaraj Engines Ltd. - Jaiprakash Power Ventures Ltd. Shareholders Grievance Committee - Mudra Lifestyles Ltd.
Number of Shares held in the Company
50,000
NIL
NIL
11
EXPLANATORY STATEMENT (Pursuant to Section 173(2) of the Companies Act, 1956)

ITEM NO. 8 Dr. N.J. Singh, was co-opted on the Board of the Company w.e.f. 20.11.2007. According to the provisions of Section 260 of the Companies Act, 1956, he holds office as a Director upto the date of ensuing Annual General Meeting. As required under Section 257 of the Companies Act, 1956, notice has been received from a member signifying his intention to propose him as a Director along with a deposit of Rs. 500/-. The Board considers it desirable that the Company should continue to avail itself of his services. Except Dr. N.J. Singh, no other Director is concerned or interested in the Resolution. ITEM NO. 9 Shri Ajay S. Shriram was appointed Managing Director of the Company in 1990. He was redesignated by the Board as Vice Chairman & Managing Director with effect from 15.4.1993. He was further redesignated by the Board as Chairman & Senior Managing Director with effect from 24.9.2001. The existing tenure of Shri Ajay S. Shriram effective from 1.11.2003 as approved by the Members in their Annual General Meeting held on 11.8.2003 expires on 31.10.2008. It is proposed to re-appoint him for a further period of 5 years with effect from 1.11.2008 and Members approval is sought for his re-appointment. The terms of his re-appointment and remuneration including minimum remuneration are set out in the Resolution. It is under the stewardship of Shri Ajay S. Shriram that the Company has achieved all round growth and made for itself a reputation in the core areas of its businesses. This may be treated as the Abstract and Memorandum of Interest under Section 302 of the Companies Act, 1956. Apart from Shri Ajay S. Shriram, and Shri Vikram S. Shriram and Shri Ajit S. Shriram who are his relatives, no other Director is concerned or interested in the Resolution. ITEM NO. 10 Shri Vikram S. Shriram was appointed Dy. Managing Director of the Company in 1990. He was redesignated by the Board as Jt. Managing Director with effect from 15.4.1993. He was further redesignated as Vice Chairman & Managing Director with effect from 24.9.2001. The existing tenure of Shri Vikram S. Shriram effective from 1.11.2003 as approved by the Members in their Annual General Meeting held on 11.8.2003 expires on 31.10.2008. It is proposed to re-appoint him for a further period of 5 years with effect from 1.11.2008 and Members approval is sought for his re-appointment. The terms of his re-appointment and remuneration including minimum remuneration are set out in the Resolution. The all round contribution of Shri Vikram S. Shriram to the Company in all these years has been outstanding. During his working, he has displayed true leadership in providing the Company the much needed strategic planning and broader financial focus. This may be treated as the Abstract and Memorandum of Interest under Section 302 of the Companies Act, 1956. Apart from Shri Vikram S. Shriram, and Shri Ajay S. Shriram and Shri Ajit S. Shriram who are his relatives, no other Director is concerned or interested in the Resolution. ITEM NO. 11 Shri Rajiv Sinha was appointed Dy. Managing Director of the Company in 1998. The existing tenure of Shri Rajiv Sinha effective from 1.11.2003 as approved by the Members in their Annual General Meeting held on 11.8.2003 expires on 31.10.2008. It is proposed to re-appoint him for a further period of 5 years with effect from 1.11.2008 and Members approval is sought for his re-appointment.
The terms of his re-appointment and remuneration including minimum remuneration are set out in the Resolution. Shri Rajiv Sinha joined the Company in 1972 as a Management Trainee and has extensive exposure to Commercial, Technical and Managerial responsibilities across the Board and in the course of his career has displayed outstanding leadership abilities and business acumen. This may be treated as the Abstract and Memorandum of Interest under Section 302 of the Companies Act, 1956. Apart from Shri Rajiv Sinha, no other Director is concerned or interested in the Resolution. ITEM NO. 12 Dr. N.J. Singh was appointed Whole Time Director (EHS) of the Company in 2007. The existing tenure of Dr. N.J. Singh is effective from 20.11.2007. It is proposed to appoint him for a period of 5 years with effect from 20.11.2007 and Members approval is sought for his appointment. The terms of his appointment and remuneration including minimum remuneration are set out in the Resolution. Dr. N.J. Singh joined the Company in 1983 as Pollution Control Engineer. He had been heading the EHS function and has extensive experience in Environment, Health, Safety and Quality Systems and in the course of his career has displayed outstanding professional acumen. This may be treated as the Abstract and Memorandum of Interest under Section 302 of the Companies Act, 1956. Apart from Dr. N.J. Singh, no other Director is concerned or interested in the Resolution. ITEM NO. 13 Shri Aditya A. Shriram, having Masters Degree of Engineering in Operations Research and Industrial Engineering, had joined the Company as Manager in February, 2006. His total post qualification work experience is more than 4 years, which includes overseas work experience also. Keeping in view his educational qualification, work experience and contribution in the operations of the Company, which has made positive impact on the overall business performance of the Company, it is proposed to promote him as General Manager w.e.f. 1.7.2008 on terms and conditions as enumerated in the Resolution. The promotion and revision in his remuneration requires approval of the Members and the Central Government. Apart from Shri Ajay S. Shriram, relative of Shri Aditya A. Shriram, no other Director is concerned or interested in the Resolution. ITEM NO. 14 The Company has availed/proposes to avail financial assistance from Punjab National Bank, State Bank of India, Oriental Bank of Commerce, Bank of Baroda, HDFC Bank Limited, International Finance Corporation, Washington and UCO Bank as detailed in the Resolution. The terms and conditions for availing the said financial assistance, inter-alia, provide for creation of security by way of mortgage/charge on immovable properties and by way of hypothecation of movable assets of the Company, as detailed in the resolution to respective lenders, situated at DSCL Sugar, Ajbapur, District Lakhimpur Kheri, (U.P.), DSCL Sugar, Rupapur, District Hardoi (U.P.), DSCL Sugar, Hariawan, District Hardoi (U.P.) and DSCL Sugar, Loni, District Hardoi (U.P.), Shriram Fertilisers & Chemicals Complex at Kota (Rajasthan) and Shriram Alkali & Chemicals at Bharuch (Gujarat) in the manner desired by the lenders and agreed to by the Company. The creation of mortgage/charge requires approval of the Members under Section 293(1)(a) of the Companies Act, 1956. None of the Directors is concerned or interested in the Resolution. INSPECTION A copy of each of the terms & conditions of re-appointment of Shri Ajay S. Shriram, Shri Vikram S. Shriram and Shri Rajiv Sinha as CMD, VCMD and DMD respectively and for the appointment of Dr. N.J. Singh as WTD (EHS) and promotion of Shri Aditya A. Shriram as General Manager will be open for inspection at the Registered Office of the Company at 6th Floor, Kanchenjunga Building, 18, Barakhamba Road, New Delhi-110 001 between 11.00 A.M. to 1.00 P.M. on all working days. INTEREST Except as indicated under the respective items, none of the Directors is interested or concerned in any of the aforesaid Resolutions.
02
From the Chairman and Vice Chairmans desk
DSCL will continue to grow with focus on integration, driving cost efficiency and delivering superior value
Dear Friends, We are happy to report yet another year of satisfying progress for your company. Our integrated business model with multiple revenue streams and cost competitive operations enabled us to progress all the growth initiatives, despite the tough operating environment in some of the business. The Company has, over the last few years, aggressively grown all its business with an investment of about Rs.2000 cores, providing economies of scale and strengthening competitiveness in all the businesses. Simultaneously, we are focusing on building raw material and fuel security, as power is one of the key inputs in most of our businesses. We plan to operationalise our lignite mines in Rajasthan in a couple of years and are set to commission a 55 MW new coal based captive power plant at Bharuch soon. The company is accelerating the growth of its newer businesses i.e. Hariyali Kisaan Bazaar - which is setting up Rural Business Centers all across India, Fenesta - the UPVC window systems and Shriram Bioseeds - the Hybrid seeds venture. These businesses will deliver superior shareholder value in the years to come. Hariyali has already set up over 175 outlets and plan to reach about 300 outlets by March 09. Fenesta, which was focusing so far on institutional segment has now entered into the retail segment also in a major way. In hybrid seed business, we have completed the purchase of entire stake of our JV partner. The business is set to launch new generation products and record quantum growth in next couple of years. Our people have been our most enduring strength. We are committed to further improve their competencies and creating a vibrant environment that promotes learning, innovation, entrepreneurial spirit and overall growth of the company and the employees.
14
We view highest standard of Corporate Governance, a value to be institutionalized into the corporate culture. The primary objective is to create and adhere to a corporate culture of transparency, fairness, accountability and ethical practices, thereby creating superior value for all stakeholders. There is a strong element of Corporate Social Responsibility embedded into the value system of our Company. We have implemented best Environment, Health and Safety practices to ensure safe and environment friendly operations. We are committed to make a sustainable difference to the society we serve, and have taken up various initiatives to develop the societies around all our business areas. We would like to take this opportunity to thank all our employees, vendors, suppliers, business associates, lenders and shareholders who have always supported our progress across varied businesses. With their cooperation, we are confident of delivering superior value to all stakeholders.
With best wishes,
(VIKRAM S. SHRIRAM) Vice Chairman & Managing Director
(AJAY S. SHRIRAM) Chairman & Sr. Managing Director
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03
Board of Directors
Shri Ajay S. Shriram Chairman & Senior Managing Director Shri Vikram S. Shriram Vice Chairman & Managing Director Shri Rajiv Sinha Dy. Managing Director Shri Ajit S. Shriram Director (Sugar) Dr. N.J. Singh Whole Time Director (EHS) Dr. S.S. Baijal Shri Arun Bharat Ram Shri Pradeep Dinodia Shri Vimal Bhandari Shri Sunil Kant Munjal Shri D. Sengupta Shri S.C. Bhargava LIC Nominee
Company Secretary Audit Committee
Shri B.L. Sachdeva
Dr. S.S. Baijal Chairman Shri Arun Bharat Ram Shri Pradeep Dinodia Shri D. Sengupta
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Brief Profile of Directors of the Company

Shri Ajay S. Shriram, Chairman & Senior Managing Director, is a Director of the Company since 24.7.1989. He graduated in Commerce from Sydenham College, University of Mumbai and later attended the Programme for Management Development at the Harvard Business School, U.S.A. He is a Member of the Shareholders/Investors Grievance Committee of the Company. Shri Vikram S. Shriram, Vice Chairman & Managing Director, is a Director of the Company since 22.5.1990. He graduated in Commerce with Honours from St. Xaviers College, Calcutta and is a Member of The Institute of Chartered Accountants of India. He is a Member of the Shareholders/Investors Grievance Committee of the Company. Shri Rajiv Sinha, Deputy Managing Director, joined the Company in 1972 as a Management Trainee after graduating from IIT, Kanpur in Mechanical Engineering. Later, he attended the Executive Development Programme at the Stanford University, U.S.A. Shri Ajit S. Shriram, Director (Sugar), joined the Company in 1991 as an Executive after graduating in Commerce from Osmania University, Hyderabad. Later, he obtained an M.B.A. Degree from the International Institute for Management Development, Switzerland. Dr. N.J. Singh, Whole Time Director (EHS), joined the Company in 1983 as Pollution Control Engineer. He holds M.Sc., Ph.D. Degrees and has been working as Chief Executive, Shriram Environment & Allied Service and General Manager (Safety and Environment) with the Company at Kota. Dr. S.S. Baijal is a Non-Executive Director of the Company since 22.5.1990. He retired as the Chairman of ICI Companies in India in 1987. He holds B.Sc., M.Sc., D. Phil Degrees. He is Chairman of the Board Audit Committee and a Member of the Shareholders/Investors Grievance Committee of the Company. Shri Arun Bharat Ram is a Non-Executive Director of the Company since 22.5.1990. He is Chairman and Managing Director of SRF Ltd. He graduated in Industrial Engineering from the University of Michigan, U.S.A. He is a Member of the Board Audit Committee of the Company. Shri Pradeep Dinodia is a Non-Executive Director of the Company since 18.7.1994. He graduated in Economics with Honours from St. Stephens College, Delhi University and obtained his Law Degree from the same University. He is a member of The Institute of Chartered Accountants of India. He is Chairman of the Shareholders/Investors Grievance Committee and a Member of the Board Audit Committee of the Company. Shri Vimal Bhandari is a Non-Executive Director of the Company since 13.5.2003. He graduated in Commerce from Sydenham College, University of Mumbai and is a Member of The Institute of Chartered Accountants of India. He is currently serving as Country Head India for AEGON N.V. Shri Sunil Kant Munjal is a Non-Executive Director of the Company since 13.5.2003. He is Managing Director of Hero Cycles Limited and Chairman cum Managing Director of Hero Management Service Limited and Chairman of Hero Corporate Service Limited. He is a Commerce Graduate from Delhi University and has training in Mechanical Engineering. Shri D. Sengupta is a Non-Executive Director of the Company since 11.8.2003. He retired as Chairman of General Insurance Corporation of India in June, 2002. He is a Bachelor of Science in Physics and holds Post Graduate Diploma in Marketing from FMS, Delhi University. He is a Member of the Board Audit Committee of the Company. Shri S.C. Bhargava, a nominee of Life Insurance Corporation of India (LIC), is a Non-Executive Director of the Company since 11.8.2004. He retired as Executive Director (Investment) of LIC in July, 2005. He is a Commerce Graduate from University of Mumbai and a Member of The Institute of Chartered Accountants of India.
04
Senior Executive Team
The Company is organized into strategic business units managed by professional managers. The DSCL management team has a strong, credible image in the industry. The key members of the DSCL group Executive Team are listed below: Mr. Ajay S. Shriram Chairman & Senior Managing Director Mr. Vikram S. Shriram Vice Chairman & Managing Director Mr. Rajiv Sinha Dy. Managing Director Mr. Ajit S. Shriram Director (Sugar Business) Dr. N.J. Singh Whole Time Director (EHS) Mr. S.D. Omchary Chief Executive Director (Textiles & Real Estate Development) Mr. S.K. Agrawal Senior Executive Director - Chemicals Business Mr. K.K. Kaul Executive Director & Resident Head - Kota Mr. S. Radhakrishna Executive Director - Sugar Business Dr. G.C. Datta Roy Chief Executive - Energy Business Mr. A.K. Awasthi Chief Executive - Hydro Power Mr. Sovan Chakrabarty President & Business Head - Agri Inputs Mr. Rajesh Gupta President & Business Head - Hariyali Mr. J.K. Jain Senior Vice President & CFO Mr. Rajat Mukerjei Senior Vice President and SBU Head - Plastics Mr. Sandeep Mathur Senior Vice President & Business Head - FenestaTM Building Systems Mr. Sushil Baveja Head - Corporate HR Dr. Gautam Mukhopadhyay Vice President & Business Head - Shriram PolyTech Mr. B.L. Sachdeva Company Secretary Subsidiaries Dr. Sharad Sharma President - Shriram Bioseed Genetics India Ltd. Dr. Paresh Verma Research Director - Bioseed Research India Pvt. Ltd. Mr. Rajeev V. Nayak General Manager - Bioseed Research Philippines Inc. Mr. Sambit Satapathy Country Head - Bioseed Vietnam Ltd.
05
Our Businesses
1. Chloro-Vinyl business: Chemicals Business: This comprises of Caustic Soda (Lye and flakes), Chlorine (Liquid and Gaseous) and associated chemicals including hydrochloric acid, stable bleaching powder, compressed hydrogen and sodium hypochlorite. The Company has two manufacturing facilities located at Kota (Rajasthan) and Bharuch (Gujarat) with full captive power. It is increasing the capacity of its chlor-alkali manufacturing facility at Bharuch from 200 TPD to 445 TPD and also setting up a 55 MW coal based power plant in replacement of the existing 24MW furnace oil based power plant to generate economical power at Bharuch. Plastics Business: This is highly integrated, covering manufacture of PVC resins and Calcium Carbide, PVC Compounds and UPVC Fenesta Windows (a consumer product). The Company is able to capture value at each stage of the entire value chain. i. ii. PVC Resin is fully integrated with captive production of acetylene, chlorine and coal based power, located at Kota. PVC Compounds of which DSCL is the largest manufacturer is backed by an Innovative Polymer application development centre (iPAC) at Gurgaon, India.
iii. The Cement business, located at Kota is based on waste generated from the Calcium Carbide production process. iv. Fenesta Building Systems manufactures UPVC windows (Un-Plasticized PVC) and door systems under the brand Fenesta. It offers complete solutions right from design, fabrication to installation at the customers site.
2.
Agri-Business: i. Urea: DSCL has the countrys lowest cost naphtha based urea plant with a capacity of 3.79 lakh T.P.A., located at its integrated manufacturing facility at Kota. DSCL is one of Indias oldest manufacturers of Urea. The Company had last year carried out the conversion of its plant to enable use of LNG in place of Naphtha with the objective of further improving costs. Sugar: DSCLs sugar business comprises of 4 facilities with a combined capacity of 33,000 TCD in Central U.P. and co-gen power capacity of 70.5 MW. The co-gen power capacity is being expanded to 94.5 MW.
ii.
iii. Hariyali Kisaan Bazaar: It is a one stop solution to the multiple needs of the rural communities (both business and family needs). Currently we have 160 such outlets in operation,which we plan to rapidly scale up going forward. iv. The Agri-Inputs business: This business provides total agri-inputs to farmer community by marketing a range of fertilizers, micro-nutrients, hybrid seeds, pesticides etc through its existing distribution network. In view of unfavorable government policy, the Company has rationalised its product portfolio towards value added items and discontinued the trading of imported bulk fertilisers of DAP & MOP. Seeds: DSCL offers a range of hybrid seeds in the country through its subsidiary Shriram Bioseed Genetics India Ltd. The Company also operates its seeds business in Vietnam, Thailand and Phillippines. The Company increased its stake in Hybrid Seeds business from 51% to 100%, in order to aggressively grow this business in India and South East Asia.
v.
3.
Other Businesses: i. ii. Textiles: The Company has a small textile operation in the form of 12,856 spindles spining unit at Tonk in Rajasthan, which was increased from 8,440 spindles in the previous year. Energy Services (ESCO): This business assists energy users (industrial, institutional, commercial users) in achieving efficiency in energy usage, provides engineering and project management services for biomass/ conventional fuel based power plants.
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06
Core values and beliefs
DSCLs core values and beliefs are a reflection of its commitment to build a world class, learning organisation, to excel and win in all its endeavours:
Customer Focus Be sensitive to the needs of the customer; develop superior customer insight Commitment to surpass expectations and deliver superior value
Innovation and Excellence Think differently and promote creativity Make continuous improvement a way of life; drive excellence
People Development Continuously improve and upgrade the skills and competencies of our people Support people to realise their potential
Team work Work closely as a cohesive, well-knit team Inculcate a spirit of openness and collaboration
Relationships and Human Dignity Value people and partnerships Nurture understanding, compassion, trust and respect in all relationships
Social Responsibility and Ethics Be a socially responsible corporate, addressing the needs of the community and environment Conduct business ethically Maintain highest standards of personal integrity
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07
Financial Highlights
(Rs. Crores)
Financial Highlights
2001 Gross Sales Net Sales - Own Products - Traded - Total PBDIT Interest PBDT Depreciation & Misc. exp. w/off PBT Profit after Current Tax Profit after Deferred Tax** Cash Profit Total Funds Employed/ Utilised Share Capital - Equity Net Worth Minority Interest Deferred Tax liability Long term loans Short term loans Net Fixed Assets Net Current Assets Investments Earnings per share (Rs.) * Dividend per share (Rs.)* 1055.4 826.0 156.8 982.8 156.1 66.5 89.6 44.5 45.1 41.3 41.3 79.8 895.5 16.7 324.9 419.3 146.2 594.6 259.7 33.3 2.3 0.9 2002 1180.9 828.1 280.4 1108.5 143.7 65.4 78.3 47.4 30.9 28.5 11.2 44.8 884.7 16.7 227.3 84.6 401.8 171.0 592.5 276.1 7.1 0.7 0.9 Ratios 2001 Return on Net Worth ** Return on Capital Employed Operating Margin Capital Employed turnover ratio Interest to Net Sales % PAT to Net Sales % Long term Debt/PBDIT Long term Debt/Net Worth Total Debt/Net Worth Total Outside Liabilities/Net Worth Interest Cover 13.3 15.8 18.9 1.2 8.1 5.0 2.7 1.3 1.7 2.1 2.3 2002 4.1 14.5 17.4 1.2 7.9 1.4 2.8 1.8 2.5 3.2 2.2 2003 21.1 18.1 17.7 1.4 5.8 5.0 2.2 1.5 2.0 2.5 3.0 2004 25.0 20.2 17.0 1.6 3.6 6.4 1.7 1.0 1.4 2.3 4.8 2005 27.8 21.6 16.8 1.6 2.5 7.7 2.1 1.1 1.6 2.5 6.8 2006 25.0 18.7 16.5 1.5 2.8 6.8 2.5 1.4 2.1 3.2 6.0 2007 8.0 10.3 11.6 1.5 3.8 2.1 3.3 1.4 2.8 4.4 3.0 2008 1.0 4.5 9.4 1.1 3.6 0.3 4.4 0.9 1.6 2.0 2.6 2003 1376.0 1059.7 235.0 1294.7 187.2 61.9 125.3 54.8 70.5 58.7 52.7 104.6 915.9 16.7 272.5 10.2 89.5 403.0 140.8 652.1 256.9 6.4 3.2 0.9 2004 1556.6 1182.7 280.7 1463.4 201.3 42.1 159.2 55.2 104.0 95.7 75.6 150.9 920.7 16.7 333.0 12.0 109.5 344.7 121.5 652.8 260.1 7.7 4.4 1.2 2005 1977.4 1404.7 464.2 1868.9 235.3 34.7 200.6 57.3 114.8 93.6 107.7 162.8 1259.2 16.7 443.2 14.9 95.4 504.7 201.1 870.0 356.2 33.0 6.3 1.6 2006 2535.8 1788.9 603.0 2391.9 295.1 49.4 245.7 73.2 172.5 153.2 121.0 226.6 1775.0 33.3 525.5 17.7 146.7 740.2 344.9 1272.5 490.9 11.7 7.1 0.9 2007 2008 2938.2 2770.1 2063.3 2432.0 704.1 141.9 2767.4 2573.9 239.6 79.1 160.5 93.4 67.1 66.8 43.4 160.2 2288.8 227.5 87.6 139.9 123.7 16.2 15.3 8.2 138.1 3104.0
33.3 33.3 554.1 1149.3 17.4 170.1 171.2 789.5 991.0 757.7 792.5 1780.8 2056.6 498.9 891.8 9.1 155.5 2.6 0.5 0.8 3.3
Notes: - *On face value of Rs. 2 per share Post Bonus and Split of shares in 2006 - **Profits for the year 2002 are before exceptional items of Rs. 29.8 crores - **Profits for the year 2008 are before exceptional items of Rs. 664.5 crores (Post tax) - Drop in PAT & Net worth related ratios in 2002 due to deferred tax provisioning. - Net Sales for above purposes is for own products only
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08
Management Discussion and Analysis
Performance Overview
The key highlights of the financial year 2007-2008 are as follows : Net sales registered a growth of ~17 % over last year, at Rs. 2,489.6 crores as compared to Rs.2135.9 crores in Financial Year 2007, excluding trading of imported bulk fertilizers (DAP, MOP) which were discontinued in the current year (Rs. 565.6 crores in Financial Year 07). EBITDA stood at Rs. 219.5 crores as compared to Rs.236.2 crores in the same period last year. There has been a significant improvement in performance in the latter half of the year due to positive changes in sugar operating environment, with Company recording an EBITDA of Rs.142.5 crores in the last two quarters. PAT for the year stood at Rs. 670.99 crores. PAT before exceptional items is Rs.6.5 crores as against Rs.45.8 crores last year. The exceptional items amounted to Rs.664.5 crores (net) arising consequent to the sale of rights, title and interests in SBM Land Redevelopment Project and providing for diminution in value of fertilizer bonds. Volume growth registered in Hariyali, Sugar, Plastics, Compounding and Fenesta businesses. Significant improvement in sugar operating climate due to improvement in realizations, towards the latter half of the year. Turnaround in performance of Agri-inputs (Traded) by rationalisation of product portfolio (discontinuation of DAP/MOP) in the current year. Healthy realizations in Plastics, Chemicals and Cement businesses helped sustain operating margins despite input cost pressures. Aggressive growth in Hariyali Kisaan Bazaar with 90 new outlets added taking total number of outlets to 160 as on 31st March,08. The turnover of this business grew by ~ 89% during the year. The Company acquired balance 49% stake in the Hybrid Seeds Business from its JV partner, with a view to focus on the growth of this business. The seeds business has presence in Asia pacific countries of Vietnam, Philippines, Thailand including India. In a significant development, the Company sold its rights, title and interest in SBM Land Redevelopment Project during August 2007. The net addition to Net Worth, after capital gains tax and dividend, is estimated to be Rs.~ 616 crores, which has been deployed to enhance the quality of the balance sheet and finance the growth of the Company.
Business-wise performance review and outlook Chloro-Vinyl Businesses

Chlor-Alkali In the Chlor-alkali business, the two co-products Caustic Soda and Chlorine produced in the ratio of 1:0.886 have varying demand drivers. Both the products are basic industrial chemicals and used in wide varieties of industries. The demand has a direct correlation to the overall GDP growth of the economy. The Chlor Alkali business of DSCL comprises of Caustic Soda, Chlorine (more than 1/3rd of which is used captively in production of PVC and other chemicals) and other value added products viz. stable bleaching powder, hydrochloric acid, compressed hydrogen and sodium hypochlorite. The Company has manufacturing facilities at Kota (Rajasthan) and Bharuch (Gujarat) adding up to a total capacity of 1,76,250 TPA, thereby making it the third largest player in the domestic Chlor-alkali industry. This capacity is being further expanded to 2,27,750 TPA by early Q209 and further to 2,60,600 TPA by Q409 through capacity expansions at the Bharuch facility. Both our plants have full access to captive power with Kota plant based on coal and Bharuch currently based on furnace oil. DSCL at its Kota facility is the lowest cost producer in India. At Bharuch facility the Company is setting up a 55 MW Coal based power plant to be commissioned in early Q209, post which the cost competitiveness of this plant will improve substantially. The contribution of the business to total Revenue, PBIT and Capital Employed for Financial Year 2008 is as follows: Particulars Sales PBIT Capital Employed Amount (Rs. Crore) 334.4 81.4 518.6 % of Total 13.1 53.7 18.8
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Industry Overview and Outlook The Chlor-alkali industry in India has 34 operating units with a combined installed capacity of 2.86 million tonnes of Caustic Soda. DSCL is the third largest player with ~ 8 % share of the total capacity (Post expansion). The top three players constitute about 1/3rd of the total installed capacity. The domestic demand for Caustic Soda and Chlorine is about 2.2 million tonnes and 1.90 million tonne respectively. Since the industry manufactures basic chemicals which are considered as building blocks for any growing economy, the industry growth has kept pace with the healthy GDP growth in the Indian economy. The domestic production is able to meet the demand almost in entirety, with only marginal imports. The imports are freely permitted with a customs duty levy of 7.5%, which was left unchanged in the union budget 2008-09. The international ECU prices (combined unit of one tonne of Chlorine and proportionate Caustic Soda) were stable this year and traded in the range of $500/tonne$530/tonne.The domestic prices, which reflect the movement in global prices, remained volatile and traded in the range of Rs.16,250/tonne to Rs.20,450/tonne. In the current year, the domestic industry witnessed capacity additions to the tune of 3.1 lac tonnes. The industry continues witnessing healthy demand growth of ~ 7% p.a. and capacity utilization of over 80% since 2004. Going forward, domestic GDP growth is expected to generate healthy demand and drive the growth of the industry. Business Performance
Product FY2008 FY2007 % Change
Volume (MT) 1,66,526 1,71,160 (2.71)%
Realization (Rs. / MT) 18,276 18,621 (1.85) %
The chemical businesses of the Company reported a moderate performance with lower profitability and marginally lower volumes. The operating margins of the division witnessed pressure on account of rise in prices of critical inputs like furnace oil, coal and salt. The Bharuch facility witnessed substantial cost pressures on account of spike in furnace oil prices (input for captive power at Bharuch) which dented profitability during the year. Our Strategy With the objective of enhancing both cost competitiveness and scale, the Company is implementing a capacity expansion of 80,850 TPA at its Bharuch plant in two phases, which will take the total capacity to 2,27,750 TPA, in the first phase and 2,60,600 TPA in the second phase. Further, we are also setting up a 55 MW coal-based power plant to cater to the energy needs of the present as well as enhanced capacity. The cost-efficient thermal power plant will ease the cost pressures that the Bharuch facility had been witnessing on account of high furnace oil prices. The first phase of expansion is expected to be completed by early Q2 of Financial Year09 while the second phase is expected to be commissioned by Q4Financial Year09. The Company is also exploring strategic sourcing of key raw materials like salt, barium carbonate and coal, with an objective of securing supply as well as to reduce costs. Plastics The Plastics business is an integral part of the chlorovinyl businesses. It has complete backward integration and has developed forward value chains. The value chain has PVC Resins and Calcium Carbide and moves up to PVC Compounding, Cement and Fenesta Building Systems.
PVC Resin & Calcium Carbide

DSCL manufactures multiple grades of PVC Resin covering a wide array of end-use markets. Besides PVC Resin, the Company also manufactures Calcium Carbide (as part of backward integration).
The manufacturing facility of PVC Resin is located in the integrated complex at Kota with a total capacity of 70,000 TPA. We also have a capacity to produce 1,12,000 TPA of Calcium Carbide out of which 80% is used captively to produce Acetylene gas which is an input for manufacture of PVC Resin and the remaining 22,000TPA of Packed Calcium Carbide is sold in the domestic market. The Company uses the carbide-acetylene route to manufacture PVC as opposed to predominant ethylene route. Hence its cost structure is largely hedged to volatility in crude prices. The high degree of backward and forward integration; unique product mix swing capabilities and access to competitive source of power gives the Company a distinct advantage amongst its peers. The contribution of the business to total Revenue, PBIT and Capital Employed for FY 2008 stands as follows: Particulars Sales PBIT Capital Employed Amount (Rs. Crore) 368.5 67.6 261.7 % of Total 14.4 44.6 9.5
India has witnessed an average growth in the PVC Resin consumption @ 7% during the years 2000 - 2005 which went up to 11% during the financial year 2006-07.The growth registered in 2007-08 has been around 12% in case of Indian PVC Resin Market. Industry expects about 10-12 % growth in demand during next fiscal. The international PVC prices witnessed an upward trend and traded in the range of $898-$1101 per tonne during the Financial Year 2008. The domestic PVC realizations, which share a high degree of co-relation with the international market, too remained robust throughout the year. Going forward, domestic demand is expected to see good growth with per capita consumption of PVC on rise. India is going to remain a net importer of PVC Resin due to demand supply gap which is likely to remain in the coming years in spite of planned capacity additions. As a result, the realizations are expected to stay healthy in the near-term. Also, the demand for Calcium Carbide is expected to witness robust growth due to expansion in steel capacities. Business Performance
Industry Overview and Outlook The total installed capacity of the domestic PVC industry is about 1.1 million tonne. There are in all five players in the industry and the largest player accounts for ~ 2/3 rd of the market. The country has a current demand of 1.35 million tonnes. 73% of domestic demand of PVC Resin is met by the domestic resin suppliers and rest 27% is being imported into the country.The customs duty on PVC Resin was retained @5% in the current budget. In another important development, as a positive move for the domestic industry, the Government of India imposed anti-dumping duty of minimum Rs.1500/tonne on imports of PVC from regions other than Europe, South America, Africa and Australia. PVC holds the major share of all plastics usage in the domestic market and is used for a wide range of applications like Pipes & Fittings, Films & Sheets, and Wires & Cables. Some promising sectors like Windows & Profiles, Medical Disposables, and Packaging have also started using PVC Resin in a big way during the last 2-3 years.
Volume (MT) 67,388 64,680 4.19%
Realisation (Rs. / MT) 46,712 42,940 8.78 %
The PVC Resin and Carbide business of the Company reported a satisfactory performance during the year, with revenues growing by 9% and PBIT by 6%. This was driven by higher volumes, consequent to capacity expansion completed in July07 and better realizations. However, the margins came under pressure because of rising raw material costs viz. carbon materials, lime, coal etc.
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Our Strategy Our strategic viewpoint is to gain advantage at every point in the value chain and maximize profits. We plan to continue to grow and drive efficiencies based on the carbide-acetylene route. We have introduced specialty PVC Resins for specific applications customized to the needs of customers giving additional value to customers and better margins to the Company. We are also looking at certain strategic initiatives like charcoal farming, long-term agreements for limestone, varying the raw material mix etc. to contain costs. PVC Compounds DSCL continues to remain the largest organized manufacturer of PVC compounds with the manufacturing facility located at Kota. PVC Resin required for compounding is sourced from the PVC Resin facility of DSCL at Kota. Present capacity of the compounding facility is 23,400 MT. We have a stateof-the-art research and development centre - Innovative Polymer Application Center (i-PAC) - to bring in innovation and develop high end value added products. Over four decades of knowledge and expertise in technical and marketing aspects aided by strong research and development is our strength in this business. Industry Overview Compounding is a highly knowledge and experience based technical activity to produce intermediates from PVC Resin by blending of different ingredients. The intermediate compounds then find applications in wide industry segments like wire & cable, automotive, footwear, food and medical etc. PVC compounding industry in India is largely unorganized and comprises of a number of small players. Also, some producers of end applications have integrated backward with production of in-house compounds (self compounding). DSCL, which is the one of the largest organized player, produces PVC compounds only for merchant sale. Consistent with Indias growth story, compounding industry has registered strong growth in past couple of years and is expected to continue on high growth track. As almost all user segments are showing robust growth, the outlook going forward is positive.
Business Performance DSCL, in face of competition from small and unorganized players in compounding business, has been able to maintain its dominant position in the market. The business registered more than 20% growth, which is double the PVC industry growth during the year. To support this growth we focused on new products and applications development, formulation cost and procurement cost reduction, better quality and higher productivity, growth of customer and supplier base etc. In the process of such development, we have been able to create significant intellectual properties and three patent applications have been submitted to protect the IPR. A reasonable pipeline for such IPRs has also been created for future patent claims. Share of higher value added products in overall sales continued to grow and will drive the future. We have been able to retain export customers developed in past couple of years and also been able to expand our market development activities with new customers and markets. Our Strategy Specialty PVC Resins offers new opportunities for compounding business. In last two years we have developed a number of applications and products at i-PAC laboratory with encouraging results and possibilities. We are setting up a new state-of-the-art compounding facility at Kota to make these products which will enhance the basket of our value added products. These compounds are also expected to have significant opportunities in export market. We will strategically work to develop market for these products to improve business profitability. SSI restrictions on PVC compounding business have recently been removed. This opens up opportunity for us to grow in both capacity and market share. However, it also opens up possibility of more organized players including MNCs intensifying activity and focus in the market. To take advantage of the opportunity and to counter the possible moves of organized MNC players we will focus continuously to improve our capabilities and capacities proactively. Fenesta Building Systems The UPVC window and door systems, which were pioneered by DSCL in India under the brand name Fenesta constitutes the extended part of our PVC value-chain. The business derives its synergies through backward integration with the PVC Resins business. Fenesta a name that has become synonymous with UPVC windows has
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very attractive designs, with attributes such as thermal insulation, non corrosive, fire retardant, high impact resistance, strength and durability. This makes it a strong business proposition as the concept gains greater acceptability. This product is fast gaining popularity and acceptability across regions in India. In order to meet the rising demand, we have expanded our extrusion as well as fabrication capacities along with expanding marketing presence. The business is uniquely integrated having extrusion, fabrication and installation facilities of its own. The focus is on high quality of installation, consistency in product, innovation in designs, quality service standard and complete project management to ensure timely execution. The extrusion facility located at the Companys Kota complex, which is a state-of-the-art facility, carries out production of profiles which then find their way to the fabrication shops located at Bhiwadi (near Delhi), Mumbai, Bangalore, Hyderabad, and Chennai. Besides these locations, the Company has a full-fledged marketing network in Cochin, Coimbatore, Pune, Kolkata, Goa and Chandigarh, thereby extending its marketing presence in eleven cities across different regions. Consistent high quality product and service, end-toend delivery model, and effective marketing has made Fenesta a premium brand amongst both institutional and retail segments. The Company has a healthy order book of 2.2 lac windows outstanding as on 31st March, 08 which include new order booking of 1.48 lac windows during the year under review. The segment is witnessing healthy competition across various price segments. Our belief is that it will help in increasing awareness and overall penetration of the product to benefit all. At the same time, we believe that our first-mover advantage, technological edge, contemporary design, superior delivery model, synergy from integration and customer care services will help us to sustain our competitive edge and grow at a fast pace going forward. Our Strategy Our strategy for this business is to nurture the Fenesta
brand, to maintain its leadership status in the UPVC windows and doors segment along with offering new and innovative products to the customer. Considering the huge latent potential of retail segment and higher margins, the Company has added its greater focus on this market. Towards this, it has set up a nationwide network of dealers to service retail clients and is also looking at opening dedicated Fenesta Building System showrooms through franchisee model across the country.The thrust in coming year is to grow project sales and establish profitable retail operations. Power Power constitutes the most critical input of a majority of the Companys businesses. Access to cost-effective and uninterrupted sources of power ensures costcompetitiveness of our businesses. The Company currently has a total installed capacity of 227.5 MW at various locations based on different fuels. The Companys integrated complex at Kota has a total installed capacity of 133 MW, which is coal based and caters to the needs of urea, chlor-alkali, PVC and cement facilities, in entirety. The Chlor-alkali facility at Bharuch has an installed capacity of 24 MW which is based on furnace oil. The Bharuch facility has witnessed cost pressures on account of substantial increase in furnace oil prices. To enhance the cost-competitiveness of the Bharuch facility, the Company is setting up a 55 MW coal-based power plant at Bharuch to generate economical power which will take care of both the present as well as the enhanced Chlor-alkali capacity.The new thermal plant is expected to be commissioned by early Q209. The third source of power generation is based on bagasse generated from our sugar facilities. Currently, the bagasse based co-generation capacity stands at 70.5 MW with exportable capacity at 27.5 MW. The Company is implementing an expansion to increase its co-generation capacity to 94.5 MW by adding 12 MW each at its new sugar units at Hariawan and Loni.This expansion will take the total exportable capacity to 51.5 MW. After completion of these expansions, the total power generation capacity of the Company by end of Financial Year 09 shall be 280 MW. The major challenge today is economic procurement of adequate quantities of coal. The coal availability and price have sharply deteriorated in the recent
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months. Our Company has been taking steps for strategic procurement of coal on a long term basis. These include leasing of lignite mine in Rajasthan and exploring possibility of acquiring coal mining concessions in Indonesia. Agri Businesses Urea DSCLs naphtha based plant has an approved capacity of 3,79,000 TPA of urea at its integrated manufacturing complex at Kota, Rajasthan. The Company is the lowest cost producer of urea in the Pre-92 naphtha based group and markets this product under the Shriram Urea brand. The SHRIRAM brand, under which the Company markets all its fertilizers including urea, commands respect and invokes affinity within the farming community. With the objective of further improvement in costs and efficiencies, and consequent to feedstock conversion undertaken in 2006-07 from naphtha to liquefied natural gas, necessary infrastructure for transporting of gas from the source to the plant was put in place by GAIL during the current year. However supply of LNG during the year 2007-08 continued to be restricted in the absence of long term supply agreements with major suppliers. The Company could purchase LNG only during part of the year on spot basis and is trying to secure long term supplies in the forthcoming year. The contribution of the business to total Revenue, PBIT and Capital Employed for Financial Year 2008 stands as follows: Particulars Sales PBIT Capital Employed Industry Overview and Outlook India is the second largest producer of Urea in the world and also the second largest consumer of Urea as well. Urea is the most widely used fertilizer in India and constitutes about 72% of entire Fertilizer consumption. High Nitrogenous content as well as low farm gate price (which is fixed by the government) makes it an attractive nutrient for the farmers vis-a-vis other nutrients.
The domestic capacity of Urea production is approx. 21 million MT/Yr which has been stagnant over the years. The domestic production of Urea during 2007 08 was 19.8 Million MT/yr while the consumption during the period was 26.2 Million MT/yr. The gap between consumption and domestic production has been met with imports which were 6.9 Million MT / yr (approx. 26 % of total consumption). While domestic production has stagnated for over a decade due to the absence of new plant capacity coming up in the country, imports have surged from almost nil in 2004 to 6.9 Million MT in 200708. Due to the heavy demand of Urea in international market, Urea prices have also reached their all time high, resulting in significant increase in fertilizer subsidy. With the continued emphasis of Government on revival of agricultural sector in India and the scope available for increasing fertilizer consumption for increasing agricultural growth, Urea consumption is expected to continue to grow at healthy CAGR of 4.5% p.a. The domestic production is expected to remain at the current levels and no new plant is expected to come in line for next two to three years. The deficit in demand and supply shall largely be met by increased imports. The sector outlook looks positive in terms of demand / supply fundamentals. Indian fertilizer consumption per hectare is still low compared to other developed and developing countries and consumption is expected to grow further in future. In order to maintain national food security for ever growing population and in view of high prices of Urea in international market, Government is expected to remain favorably disposed towards domestic Urea production. It is also expected that Government shall lay emphasis on restoring the ratio of fertilizer nutrient application which is currently skewed towards Urea. The use of micro-nutrient added urea and complex fertilizers is also expected to be encouraged through favorable changes in current policy. Government Policy The new pricing scheme (NPS-III) which was announced by the Ministry of Fertilizers on 8th March 2007 has been made effective from 1st October06. However the industry continues to suffer highly on account of delayed subsidy payments and uncompensated cost escalations due to rising input costs. The problem has been further aggravated during the year on account of issuance of fertilizer bonds by the Ministry of Finance
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Amount (Rs. Crore) 703.2 19.7 206.2
% of Total 27.5 13 7.5
in lieu of subsidy payments to the Fertilizer Companies, who have suffered heavy losses as these bonds are trading at a discount to face value. In view of rising input cost and high fertilizer subsidy payments to the industry in the forthcoming year 2008-09, receipt of subsidy payments would continue to pose a serious challenge. Business Performance
Our Strategy The focus of DSCL in the coming years would be to secure long term and reliable LNG supplies along with continuous improvement of operational efficiencies to further reduce costs. Sugar DSCL has emerged as a major player in the domestic sugar industry, consequent to capacity expansions completed last year. The Company now has four sugar units located at Ajbapur (10500 TCD), Rupapur (6500 TCD), Hariawan (8000 TCD) and Loni (8000 TCD) with a total crushing capacity of 33,000 TCD. In addition, the units have a combined power cogeneration capacity of 70.5 MW with an exportable capacity of 27.5 MW.The Company is further expanding its cogeneration facility by 24 MW at its two units Hariawan and Loni resulting in an exportable surplus of 51.5 MW. The key operating parameters for the current season and the year are as follows:
Volume (MT) 378,913 363,268 4.31%
Realisation (Rs. / MT) 18,642 17,830 4.55 %

Sugar Season
(Figures in Lac Qts)
Ajbapur
2008 2007
Rupapur
2008 2007
Hariawan
2008 2007
Loni
2008 2007
Total
2008 2007
Season (days)
123
175
106 58.9 9.53 5.6
170 93.7
105 61.7
131 61.1
108 66.7
137
Cane Crushed 111.8 150.8 Recovery Rate 10.56 10.36 (%) Sugar Produced
64.5 299.2 370.1 10.01 10.19 10.04 6.4 30.5 37.1
This business witnessed an increase in revenue and profitability by 9% and 72% respectively in Financial Year2008 due to higher volumes and realization as well as positive impact of NPS-3.However,the performance for the year under review is not strictly comparable with the corresponding previous period since there was a planned shut down carried out during Q2 Financial Year2007.
9.53 10.28 10.45 10.07 8.8 6.3 6.4 6.7
11.8
15.5
Financial Year
Cane crushed 137.2 131.1 Sugar Produced 14.5
70.7 6.8 5.1
82.2 7.8 7.9
66.7 56.0 6.9 5.5 5.7 0.5
81.6 8.4 5.6
49.7 356.3 319.1 4.8 0.3 36.7 31.9
13.6 8.9
Sugar Sold
12.8
29.0 17.7
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Sugar production for the year increased by ~ 15% due to capacity increases that took place in February 2007. However the Sugar produced in Sugar Season (SS) 07-08 is lower by ~ 18% as the mills operated for lower no. of days due to a delayed start of crushing and lower availability of Sugarcane which led to an early end to the season. The Sugar Season 07-08 in Uttar Pradesh has witnessed a reduced availability of sugarcane and a delayed start as a result of which overall production was lower for manufacturers in UP. The contribution of the business to total Revenue, PBIT and Capital Employed for Financial Year 2008 stands as follows: Particulars Sales PBIT Capital Employed Amount (Rs. Crore) 464 (5.00) 1254.4 % of Total 18.1 45.4
The Key Government announcements that influenced the industry in the year are: The new Government in UP withdrew all the incentives to the Sugar industry announced by the previous government, that had led to major investments in the industry in the state of Uttar pradesh. Built a buffer stock of 5 MMT whereby the government will bear the cost of storage Export subsidies and incentives Interest free-loans against excise duty paid to clear cane dues Mandatory blending of ethanol in fuel:5% immediate and 10% by October,2008 Direct making of ethanol from sugarcane For SS 07-08 the state government of UP advised SAP of Rs.125/quintal The above announcements (except for the first and the last) helped the cause of the sugar industry which otherwise was in bad health. The two adverse announcements have been contested in the court by the Sugar manufacturers in UP. The Allahabad HC in November 07 ordered sugar mills in UP to begin crushing at Rs.110/quintal for SS 07-08 under an interim order. The final decision on procurement price for 07-08 is still pending before the court, the industry expects a positive outcome in the form of lower cane price. Sugar production in the current crushing season (SS0708E) is expected to be lower at ~ 26 MMT due to the following reasons: 1) Lower availability of cane 2) Delayed crushing in UP on account of cane pricing uncertainty 3) Crushing also commenced late in another key producing state of Maharashtra due to unfavorable weather conditions. Further, India is expected to export 3.5 MMT to the world market. Considering a consumption demand of ~ 22 MMT, the addition to inventory is expected to be insignificant. Further, Sugar production in the SS08-09 impending crushing season is expected to further decrease by 20-25% to 21 - 22 MMT on account of lower availability of sugarcane due to shift in acreage to wheat and paddy. As a consequence, sugar prices started to improve from
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Industry Overview and Outlook India is a dominant player in the global sugar industry. It is the second largest producer (after Brazil) and the largest consumer of sugar in the world. It enjoys strong cost competitiveness, being amongst five lowest cost sugar producers in the world. Though a large consumer and producer, its share in world trade is very small as it uses most of the sugar produced within the country. The consumption has been growing at a CAGR of 3% for the last decade. Sugar, being a controlled commodity under the Essential Commodities Act, 1955, is heavily regulated in terms of fixation of sugarcane price by both the central (SMP) and state government (SAP) and release of monthly open market sale quota .In addition,10 % of the production is sold at fixed prices to the Government which is used for PDS (public distribution system). India registered a continuous increase in sugar production since 1997-98 till 2002-03 when production went up from 12.9 million tonnes to 20.1 million tonnes. It dropped sharply to 12.7 million tonnes in SS 04-05 and then witnessed a high of 19.5 MMT and 28 MMT in 05-06 and 06-07. This reflects the regular 4-5 year cycle in the industry. However, the impact during this down cycle was very severe.
December 07.Considering the cyclicality of the sugar business, the demand-supply dynamics of the sugar industry are expected to change for the better in the near-term. Business Performance Product FY2008 FY2007 % Shift Sales (MT) 2,90,400 1,77,239 63.9% Realization (Rs. / MT) 12,820 16,897 (24.1)%
products and urban amenities to the rural areas. These centres also facilitate buyback of farm produce, and create direct linkages to markets for new crops. Hariyali, as planned, expanded its operations to Southern India by setting up 11 outlets in Andhra Pradesh. Hariyali added 90 outlets during the current year, taking the total tally to 160 outlets spread across Uttar Pradesh, Punjab, Haryana, Rajasthan, Madhya Pradesh, Andhra Pradesh and Uttaranchal. The plan is to establish a countrywide footprint over the next few years covering most of the agriculture dominated districts of the country. During the year, Hariyali had the honour of being selected as a case study by the Harvard Business School, Boston, USA, the worlds leading business school. This has provided global recognition to our Hariyali Venture. Hariyali registered a revenue growth of 89% over last year taking its total revenues to 221 crores for Financial Year08. This is despite shortfall in availability of bulk fertilizers across the year. We have been offering various types of Agri inputs, household and FMCG goods, fuel, apparels, consumer durables and life and general insurance products. We started bulk procurement and trading activity for variety of crops. We also initiated credit services in association with banks and we plan to scale up the same to full banking services going forward. We also started money transfer services and primary healthcare services during 2007-08. We have also scaled up our output procurement to cover approx. 17000 acres of farming area. The Company took various new initiatives in streamlining the operations including the supply chain and logistics management by setting up five new distribution centers (DC) .The Company also focused on improvements in visual merchandising and layouts of outlets based on domestic and international experience. The product offerings were augmented based on customer responses. Hariyali continues to receive positive response from various sections of the society and the Hariyali brand is increasingly being associated with trust and reliability. Our Strategy The Company is now focusing on rapid geographical spread and integrating other synergistic Agri businesses. We are also focusing on further augmenting the product
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The sugar business registered higher revenues of Rs. 464 crores as against 348.8 crores last year on account of higher volumes in sugar, consequent to higher sales quota release due to increased capacity and higher revenues from the export of power. The profitability was adversely affected by substantially lower realizations. However, the realizations have improved in the last quarter. Lower cane price of Rs.110/ quintal, consequent to Allahabad HC interim order, and higher profitability of the power division also helped to mitigate the impact of lower sales price of sugar. Our strength as a prominent player in sugar industry: High recovery Contiguous Cane area Co-gen operations Diversified businesses Our Strategy In order to partially mitigate the impact of cyclicality associated with sugar business, the Company is increasing its co-generation to 94.5 MW and thereby power export capacity to 51.5 MW. The Company continuously works towards improving the yield of Sugar cane in its area and work extensively with the farmer to achieve the twin objective of increasing his income and secure supply of cane. Hariyali Kisaan Bazaar Hariyali business model is structured around creation of rural business centres in the hinter land of India to act as a bridge between rural and urban markets and to act as a platform facilitating both selling into and buying out of the rural and Agri markets of the country. These centres provide round-the-year end-to-end ground level support to the Indian farmer to improve profitability & productivity and also take a range of
offerings and for this; we have formed alliances with various product and service providers. The Company will continue to focus on further strengthening various processes and systems to achieve greater excellence in operations and efficiencies. Agri Inputs The Agri-inputs SBU has been providing a wide range of fertilisers, seeds and pesticides to the Indian farmer. The Shriram brand of Agri-inputs is known for its quality and enjoys a very high brand value in the market. The product range has been continuously expanded to better serve the requirements of the market. The products are backed up by an extensive services network which help in transferring the latest technology to the farmer and help in improving the farming practices. Apart from marketing various agri-products, the Company has also pioneered an agri-extension programme in the name of Shriram Krishi Vikas Kendra (SKVK).The programme envisages to educate the farmer community about the best agro-practices, thereby helping them to increase crop productivity and disposable income. Overview and Outlook Indian agriculture is witnessing major challenges on account of near stagnant agriculture production and an increasing population. Globally, an ever growing demand for bio fuels and agriculture production being diverted towards bio fuels has only aggravated the problem. In view of the limited land available for cultivation, the higher food requirement can only be met by a rapid improvement in the farm productivity. While some initiatives like the National Food Security Mission are aimed at addressing the productivity challenge, there needs to be a concerted effort by all stakeholders of the agri value chain to ensure that the food requirements are adequately met and India emerges once again as a food self-sufficient nation. The daunting task of increasing yield can be achieved only though extensive use of various agri-inputs like fertilizers, HYV seeds, micro-nutrients, etc. Hence, going forward, demand for all agriculture inputs is expected to register robust growth. Business Performance The revenue from traded products division stood at
Rs. 158.2 crores as against Rs.708.9 crores last year. This was due to the discontinuation of imported bulk fertilizers trading from Financial Year08 onwards, because of unfriendly government policy and delay in clearing subsidy Dues.The Company reported a substantial improvement in profitability to Rs.7.3 crores as against a loss of Rs.17.6 crores on account of rationalization of product portfolio and positive contribution from various value-added products in its portfolio. The substantial curtailment of the traded products business has enable the Company improve its margin performance. Our Strategy As one of the pioneers in the field of Indian Agriculture, we realize the responsibility on us in addressing the falling productivity and the food security problems. The need of the hour is not just providing a range of quality inputs, but in providing productivity solutions. The continued uncertainty in the fertiliser subsidy policy does not present us with an immediate option of restarting the businesses of imported DAP and MOP. Keeping in view the challenges posed by the market environment, we have reoriented ourselves to focus on providing a range of value added products & services aimed at improving the farm productivity. Other Businesses Cement DSCLs cement plant is based on waste calcium hydroxide sludge produced during acetylene generation at its integrated manufacturing plant at Kota. Due to availability of sludge, plant is able to use low-grade limestone which otherwise cannot be used for cement manufacturing. The current capacity of plant is 4,00,000 TPA. It produces high quality, premium grade both Ordinary Portland and blended cements. DSCLs cement plant is the only cement plant in the country converting waste to high quality cement. The cement is characterized by light colour i.e. high degree of whiteness, superior strength and setting properties. As a result, the Shriram cement commands a strong brand equity and premium in the market. The contribution of the business to total Revenue, PBIT and Capital Employed for Financial Year 2008 stands as follows:
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Particulars Sales PBIT Capital Employed
Amount (Rs. Crore) 118.66 27.63 25.79
% of Total 4.64 18.24 0.93
Textiles The Company has a spinning unit at Tonk in Rajasthan with an increased capacity of 12,856 spindles. It is implementing an expansion and modernization project in the next year to increase the production of yarn from 6 tonnes to 10.5 tonnes per day and move to finer counts. An adequate provision has also been made for multiple yarn production on new machines with higher productivity. The project is expected to be completed by December, 2008. The unit now has access to cheaper source of power wheeled from Kota which has helped reduce power costs. Going forward, the Company will continue its drive towards cost rationalization and improving efficiencies. Information Technology Initiative DSCL manages a large consolidated operation that is spread over multiple business areas. The Company has employed an information technology system that seeks to facilitate seamless communication across key functions. The extensive communication backbone of the VPN network and VSATs helps to meet the information technology needs of the organisation and its customers / vendors. The Company primarily operates on SAP platform with key components that encompasses Enterprise Resource Planning, Data Warehousing and enterprise portal. During the course of the year, the Company implemented the recommendations of the business process reengineering study on Order-to-Cash cycle conducted last year through the engagement of a consultant of international repute. With the objective of enhancing productivity amongst employees, the Company also established during the year an employee portal through the Enterprise portal system of SAP. E-enablement of Hariyali Kisaan Bazaars continues to be a major focus area for the Company to improve and streamline existing systems. Human Resources and Industrial Relations The Companys focus on strengthening its people resources and employee relationships has been a sustained one all through the year. It has continued to move forward towards implementing programs, processes and policies that ensure better employee
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Industry Overview and Outlook The Indian cement industry, with a total capacity of approx.190 MMT tonnes, is the second largest producer of the cement after China in world. The industry structure is much more consolidated now with the top two players constituting about 42% of the capacity. With growing pace of infrastructure development, the demand growth in cement is expected to be about 9% 10% in the next fiscal. Business Performance
Product FY2008 FY2007 % Shift
Volume (MT) 3,68,607 3,69,129 (0.1)%
Realization (Rs. / MT) 2,589 2,372 9.2 %
The business reported stable performance during the year in a tough operating environment. The revenues were higher primarily on account of higher realizations on the back of firm demand-supply outlook, while increase in prices of key inputs like coal, lime etc. affected the operating margins. Our Strategy Our strategy in this business is to optimize the product mix for higher returns and continuous cost efficiencies.
engagement with the organisation and its business challenges. The organisation has always stood by its core values and beliefs of People Development by offering opportunities whereby people are able to realize their potential to the maximum and contribute towards the achievement of the organisational goals and objectives. Human Resources Growth During the year, along with the growth of the various businesses, the overall people strength has also witnessed a considerable growth. This has been to meet the needs of growth and expansion across various businesses. Apart from lateral recruitments, the organisation has also been recruiting freshers from campuses to build and sustain the talent pipeline for the future. With a large intake of people during the year, the organisation has also focused on strengthening its on-boarding and induction processes to enable them align with the culture and business requirements in the shortest possible time. Employee Engagement and HR Initiatives Attracting, retaining and engaging talent has been a challenge given the market opportunities available for professionals today. The organisation has continuously focused on dealing with the challenge and has been working on various programs and initiatives which could enable the organisation become an employer of choice. There have been sustained efforts with the help of cross-functional teams to strengthen processes of Talent Development, Compensation Management, Capability Building, Employee Connect and Performance Management, to align them with market benchmark, practices and needs of the organisation. The organisation is in the process of taking forward the various recommendations and build robustness around the various HR processes. During the year, the organisation also participated in the Great Places to
Work study to monitor and measure the engagement level of employees in the organisation and take suitable remedial measures based on the insights and findings. Training & Development The Company continues to focus on upgrading the skills and competencies of its employees to improve their effectiveness in their current role and responsibilities and prepare them to deal with the complexities of business challenges and growth. Across various businesses, training & development has got fairly institutionalized and annual calendars are drawn out to conduct programs that deal with technical, functional and behavioural competencies. Employees also continue to be nominated to external programs and seminars / conferences, domestic and international, to get a first hand perspective and knowledge of various industry initiatives and market developments. Employee / Industrial Relations The organisation has during the year, as always, maintained a healthy and cordial relationship with its employees. The relationship has been characterized by a high degree of communication, trust and close involvement in various initiatives of the organisation. The sense of identification and alignment of the employees with the organisation has been strong which has led to an all round improvement in the efficiencies and productivity levels. The Employers Association of Rajasthan has also conferred on DSCL the Best Employer 2007 Award for the organisations incredible performance in Employee-Employer Relation & Excellence in Production & Corporate Social Responsibility. The Companys approach to people has always been fair and progressive to enable everyone to become an integral part of the DSCL family and realize the vision of becoming a world-class organisation.
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09
Corporate Social Responsibility
As responsible corporate citizens we, at DCM Shriram Consolidated Ltd., believe that sustainable growth is possible only when we take all our stakeholders along with us in our journey of growth. The welfare of the communities around our workplaces and the environment forms an integral part of our decision-making processes. We weigh all our commercial activities for its impact on these key stakeholders. DSCL has a strong element of Corporate Social Responsibility inscribed in its values and its concern for the society extends well beyond its business motives, evident from various activities and initiatives in education, health and welfare activities. DSCLs sugar division runs a programme titled Khushali Pariyojana in association with Vinoba Seva Ashram which aims to provide health advisory services to pregnant women, ensure vaccination for children in the age group 05 years, motivate families to enroll children in the age group 6 to 14 years for structured education and to motivate school dropouts in the above age groups to rejoin structured education. DSCL initiated an ambitious drive to create awareness among the members of society against HIV/AIDS in 2004.The Company has since then organized over 80 programs on HIV/ AIDS awareness around its operational facilities in the State of Rajasthan, Gujarat and UP.The Company continues to build awareness on HIV/AIDS for employees, truckers and for local community across all its locations.
Education
To encourage students pursue academic studies, the Company has instituted various scholarship programs for Primary and Secondary level education as well as for Professional and Post graduation courses. The Company also provides financial assistance to schools around its manufacturing facilities. These activities are undertaken in the States of its Operations, namely Rajasthan, Gujarat and UP. Reassuring its commitment to quality education DSCL near its Sugar division in Ajbapur (UP) has setup Ryan International School in collaboration with St. Xavier Education Trust. It is also setting up a primary school in village Akbarpur, Hardoi District (UP). The primary education programme Sanskar Pariyojna, in association with Vinoba Seva Ashram, is aimed to provide primary education and continues to run successfully since last 3 years and has benefited over 821 children from the targeted villages. With the objective of promoting education among economically weaker section of the community, DSCL provides support by distributing books, school bags and uniforms.
Agriculture Extension Activities

DSCLs Shriram Krishi Vikas Kendras (SKVKs) is a long term integrated rural development program which is aimed to support the farmers in their work and life through adoption of over 500 villages. The SKVKs currently 107 in no. provide help in terms of farming technology, Post harvest management, Soil and water testing. These Kendras organize Farmer training programs. Their activities are extended to meeting educational, hygiene, sanitation needs for the community as well.
Social Upliftment
DSCLs Sugar Divisions, in association with Gram Swaraj Mission are running Swabhiman Pariyojna. It has setup Womens self help groups in ten adopted villages and promote their adoption of income generation activities. It aims to provide training in various income generating activities and facilitating creation of structures for marketing and distribution of these products. The response to the programme has been very encouraging.
Mid-day Meal Scheme for Children in Schools

The Company has partnered with the Government of Rajasthan to support the state governments Mid Day Meal Scheme for school children at Jhalawar and Kota Districts of Rajasthan. The scheme is entirely funded by DSCL and has benefited more than 60,000 children across 500 schools in and around Kota and Jhalawar Districts. With this program, attendance rate in schools have gone up and drop out rate decreased by 40 percent. This also provides employment opportunity to local women folk in the central kitchen and others in the distribution network. This initiative will go a long way towards sustaining the future of the society.
Rural Development
The Company has adopted villages close to its Sugar manufacturing facilities. The activities undertaken in such areas include widening and re-soiling of Roads, proper drainage system, clean drinking water, help in maintaining hygienic sanitary conditions and development of Panchayat Bhawan area. The objective is to support infrastructure and development around its operating facilities.
Sports and Cultural Activities

In our endeavor to provide a healthy environment, DSCL organizes a state level volleyball tournament in Hardoi District (U.P). The prestigious DSCL Open National Tennis Championship continues to run successfully and nurture the best tennis talent in the country for international tennis arena. The Company continues to support Sports within its complex as well as in the Schools in its vicinity. DSCL has adopted a knowledge based holistic development approach in the field of education, health and social upliftment.
34
Health Care
The Company endeavors to improve the health of the masses living around its manufacturing facilities. With a focus to serve the society, the Company has donated and maintains Mobile Healthcare unit with assistance of Helpage India, maintains an ICU and private wards at a hospital, has set up a Polyclinic, a Rural Health Clinic and organized Blood donation Camps, Health checkup/awareness camps. It also provides incentive schemes for family planning programs. Besides,
10
Directors Report
The Directors have pleasure in presenting the 19th Annual Report of the Company along with Audited Accounts for the year ended 31st March, 2008. Financial Highlights The working results for the year ended 31.3.2008 and 31.3.2007 are as under: Particulars 31.3.2008 (Rs. in Crores) 31.3.2007 (Rs. in Crores) SBM Land Redevelopment Project in August 2007. Chemicals, Plastics and Cement businesses maintained stable operating margins, despite rise in input costs primarily the fuel prices, on account of healthy demand growth. Significant volume growth was witnessed in businesses of Sugar, Hariyali, Compounding and Fenesta Building Systems. The Agri-inputs (Traded) segment witnessed turnaround due to rationalization of product portfolio, consequent to discontinuation of DAP/MOP trading. Significant lower sugar realizations (~24%) in sugar business continued to adversely affect the operating performance of the segment and overall returns of the Company. However, there has been an improvement in operating climate in the latter half of the year. Delay in receipt of subsidy payments pertaining to urea business and higher sugar inventory led to higher working capital and consequently, higher interest costs for the Company. Diminution in the value of the Fertilizer Bonds, issued by the Government of India, in lieu of fertilizer subsidy, too affected the performance. The Company also incurred a higher net cost in hedging its foreign currency exposure. During the year, the Company sold its rights, title and interest in SBM Land Redevelopment Project. The net addition to Net Worth, after capital gains tax and special dividend, is about Rs.616 Crores, which has been deployed to strengthen Balance Sheet, in order to implement future growth initiatives. The Companys expansion project at its chlor-alkali facility at Bharuch comprising of a 48 MW Coal based power plant and increase in Chemicals capacity to 440 TPD is progressing as per schedule. This expansion will substantially improve the cost efficiency of this unit and will add to the overall profitability of the Company. Further its expansion in Co-gen facility at its Sugar mills is also being implemented as per schedule and will improve the performance of Sugar business. The detailed performance of various businesses of the Company for the year ended 31st March, 2008 has been stated in the Management Discussion and Analysis Report, which appears as a separate statement in the Annual Report. Subsidiary Companies During the period under review, DCM Shriram Energy and Infrastructure Limited, Shriram Bioseed Ventures Limited, Hariyali Rural Ventures Limited, Hariyali Finance Foundation, Hariyali Rural Services Limited, Shri Ganpati Fertilisers Limited, Shriram Bioseeds Limited, Affee Investments Corp., Bioseed Genetics International Inc. and Zeus Investments Limited became subsidiaries of your Company. A statement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiary companies is attached to the accounts. In terms of approval granted by the Central Government
35
Sales (Gross) Own Products 2300.95 2040.80 Trading Hariyali Kisaan Bazaar 221.07 117.33 Wholesale 163.57 714.03 ...................................................... Total Sales (Gross) 2685.59 2872.16 ........................................................................................................................... Other Income 34.79 33.71 ........................................................................................................................... Profit before depreciation, interest and tax 219.51 236.21 ........................................................................................................................... Interest 84.73 77.34 ........................................................................................................................... Gross Profit 134.78 158.87 ........................................................................................................................... Depreciation 122.13 90.26 ........................................................................................................................... Provision for Taxation 111.78 22.80 ........................................................................................................................... Profit for the year after tax 670.99 45.81 ........................................................................................................................... Transfer from Debenture Redemption Reserve 5.17 5.16 ........................................................................................................................... Balance brought forward from previous year 251.37 225.74 ........................................................................................................................... Net Profit available for appropriation 927.53 276.71 ........................................................................................................................... Appropriations - Proposed Dividends on Equity Shares 56.41 13.28 ........................................................................................................................... - Corporate Dividend Tax 9.59 2.06 ........................................................................................................................... - General Reserve 400.00 10.00 ........................................................................................................................... - Balance Carried Forward 461.53 251.37 Dividend Your Directors are pleased to recommend dividend @ 170% (including the interim dividend @ 150% paid in September, 2007) on Equity Shares of Rs.2/- each for the year ended 31st March, 2008. Performance During the year, the Company registered net revenues of its own products of Rs. 2104.91 Crores, up from Rs. 1870.1 Crores in previous financial year, an increase of ~ 12.5%. Its business of Hariyali Kisaan Bazaar witnessed ~ 89% increase in its revenues over previous financial year. The revenues from wholesale trading business were lower due to discontinuation of imported bulk fertilizers (DAP, MOP) trading which had a turnover of Rs.565.6 Crores last year. The operating profit for the year was at Rs.219.5 Crores as compared to Rs.236.2 Crores in the same period last year. Profit after Tax for the current year (before exceptional items) stood at Rs.6.5 Crores as against Rs.45.8 Crores last year. The same for the year (after exceptional items) was at Rs.670.99 Crores, consequent to the sale of its rights, title and interests in
under Section 212(8) of the Companies Act, 1956, the Audited Statements of Accounts and the Auditors Reports thereon for the year ended 31st March, 2008 along with the Reports of the Board of Directors of the Companys subsidiaries have not been annexed. The Company will make available these documents upon request by any member of the Company interested in obtaining the same. However, as directed by the Central Government, the financial data of the subsidiaries have been furnished under subsidiary companies particulars forming part of the Annual Report. Further, pursuant to Accounting Standard AS-21 issued by The Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report includes the financial information of its subsidiaries. Fixed Deposits As on 31st March, 2008, 163 deposits aggregating to Rs. 56.33 lacs were unclaimed. Since then 53 deposits amounting to Rs.27.53 lacs have been claimed/renewed. Corporate Governance A separate section on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement(s) with the Stock Exchange(s) form part of the Annual Report. Directors During the year, Shri S.L. Mohan, Nominee of GIC, ceased to be a Director of the Company. The Directors place on record their sincere appreciation for the contribution made by him during his tenure as a Director of the Company. Dr. N.J. Singh was co-opted on the Board of the Company w.e.f. 20.11.2007 and was appointed as Whole Time Director (EHS). He holds office upto the date of forthcoming Annual General Meeting of the Company. A proposal has been received from a Member for his appointment as a Director. Shri Rajiv Sinha, Dr. S.S. Baijal, Shri Arun Bharat Ram and Shri S.C. Bhargava, Directors, retire by rotation and are eligible for re-appointment. Auditors M/s. A.F. Ferguson & Co., Chartered Accountants, have conveyed their intent not to seek re-appointment at the forthcoming Annual General Meeting. Keeping in view of the Special Notice received from a Member of the Company, the Directors recommend the appointment of M/s. Deloitte Haskins and Sells, as the Statutory Auditors of the Company to hold office from the conclusion of the forthcoming Annual General Meeting till the conclusion of the next Annual General Meeting of the Company. Personnel In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the name and other particulars of the employees are required to be set out in the Annexure to the Directors Report. However, as per
the provisions of Section 219(1)(b)(iv) of the Act, the report and accounts are being sent to all the Members and the Debenture Trustee(s) excluding the aforesaid particulars. The complete Annual Report including this statement shall be made available for inspection by any Member and/or any Trustee during working hours for a period of 21 days before the date of the Annual General Meeting. Any Member and/or the Trustee interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company. Directors Responsibility Statement It is hereby affirmed that 1. in preparation of annual accounts, all applicable accounting standards have been followed, 2. the accounting policies of the Company have been consistently followed. Wherever circumstances demanded, estimates have been made 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 or loss of the Company for that period, 3. proper and sufficient care has been taken for maintenance of accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding assets of the Company and proper internal controls are in place for preventing and detecting frauds and other irregularities, and 4. annual accounts have been prepared on a going concern basis. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings/Outgo The information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to these matters is appended hereto and forms part of this report. Industrial Relations The Company continued to maintain harmonious and cordial relations with its workers in all its Divisions, which enabled it to achieve this performance level on all fronts. Acknowledgements The Directors wish to thank customers, the Government authorities, financial institutions, bankers, other business associates and shareholders for the cooperation and encouragement extended to the Company. The Directors also place on record their deep appreciation for the contribution made by the employees at all levels. On behalf of the Board
New Delhi 13th May, 2008

36
Annexure to the Directors Report

Information as required under Section 217(1)(e) read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988. A.CONSERVATION OF ENERGY (a) Energy Conservation Measures Taken: Energy conservation has been an important thrust area of the management and is being continuously monitored. Important specific actions taken during this year are:Hot steam condensate from PVC plant is being used as boiler feed water in the waste heat boiler of Carbide plant instead of fresh DM water. Improving Carbide handling system with faster recovery of broken Carbide. Improvements have been made in the frequency of raking of raw material in the carbide furnace. Cell House cooling tower ID fan aluminum blades replaced by FRP blades. Installation of one new higher capacity & better efficiency Chlorine compressor of 81 TPD & stoppage of 2 old compressor. Use of grinding aid additives to improve grinding in the cement mill.
of production. The summarized position of energy reduction achieved is as under: Feedstock conversion from naptha to natural gas in fertilizer plant during 2006-07, resulted in energy saving. Hot steam condensate from PVC plant as boiler feed water in the waste heat boiler of carbide plant instead of fresh DM water resulting in energy saving equivalent to 2500 MT/year steam for carbide plant. Improved carbide handling system resulting in reduction in power consumption by ~9 Kwh/MT of carbide. Improvement in the frequency of raking of raw material in the carbide furnace resulting in saving of power of~5 Kwh/MT of carbide. Replacement of ID fan aluminium blades by FRP blades in Cell House cooling Towers resulting in reduction in power consumption by 51000 Kwh/annum. Installation of one new higher capacity & better efficiency Chlorine compressor of 81 TPD & stoppage of 2 old compressor resulting in saving of~12.60 Lacs Kwh/ annum units of power.
(d) Total energy consumption and energy consumption per unit of production: Form A is annexed. B. TECHNOLOGY ABSORPTION (a) Efforts made in technology absorption: Form B is annexed. C. FOREIGN EXCHANGE EARNINGS AND OUTGO (a) Activities relating to exports; initiatives taken to increase exports; development of new export markets for products and services; and export plans: There was no export of Companys own products during the year, as domestic realisation was better than export realisation. (b) Total foreign exchange used and earned:
Rs./Crores 2007-08 2006-07 - Total foreign exchange used - Total foreign exchange earned 154.44 0.08 419.46 3.04
37
(b) Additional investments and proposals being implemented for reduction in consumption of energy: Superior quality low ash Anthracite Coal and semi Coke for Furnace operation are being procured from overseas. This is expected to reduce power consumption per MT of Carbide. Feasibility of conversion to dry or semi dry process is being explored to reduce energy consumption. (c) Impact of the measures at (a) & (b) above for reduction of energy consumption and consequent impact on the cost of production of goods: The above mentioned energy consumption measures which have already been undertaken and the measures under implementation will yield savings in energy consumption compared to the past years and will continue to reduce the cost
FORM A (See Rule 2) Form for disclosure of particulars with respect to conservation of energy This Year 200708 A. POWER AND FUEL CONSUMPTION 1. Electricity Previous Year 200607
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(a) Purchased
Kwh (in lacs)
643.7
590.6
Total Cost (Rs./lacs) Rate (Rs./Kwh)
2832.5
2623.2
4.4
4.4
(b) Own Generation
(i) Through Diesel Generator Kwh (in lacs)
1769.8
1895.4
Kwh generated per ltr. of Diesel/Furnance Oil Cost (Rs./Kwh) Kwh (in lacs)
5.3 5.3
5.1 4.0
Kwh generated per 000 SCM of Natural Gas
58.6
47.0
(ii) Through Steam Turbine Generator Kwh generated per Kg. of Coal Cost (Rs./Kwh) Kwh (in lacs)
10399.2
10343.4
1.2 2.4
1.2 2.2
(iii)Through Steam Turbine Generator (Bagasse) Units generated per M.T. of Bagasse Bagasse consumed (M.T./lacs)
2519.5
1449.8 189.5
309.9
8.1
7.6
2. Coal .............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
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Quantity (M.T.)
994410.3
962548.1 2227.3
Total Cost (Rs./lacs)
24169.0 2430.5
21438.8
Average Rate (M.T.) Quantity (M.T.)
3. Furnace Oil
36606.8 7266.9
39507.1 6665.4 16871.4
Average Cost (M.T.) Quantity (SCM)
19851.3
4. Natural Gas
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10157481.0
8688214.0
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1143.9
888.4
Average Cost (SCM)
11.3
10.2
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This Year 200708 B. CONSUMPTION PER UNIT OF PRODUCTION 1. Electricity Urea (Kwh/M.T.)
Previous Year 200607
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143.8 217.7
133.0 224.0
PVC Compounds (Kwh/M.T.) C. Soda, SFC, Kota (Kwh/M.T.) C. Soda, SAC, Bharuch (Kwh/M.T.) Internal Generation Liquid Chlorine (Kwh/M.T.) HCL (Kwh/M.T.) Textiles Yarn (Kwh/Kg.) Sugar Ajbapur (Kwh) Sugar Rupapur (Kwh) Sugar Loni (Kwh) Sugar Hariwan (Kwh) 2. Coal
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5.6
34.2 2659.2 102.5 2.0 2.4 340.0 256.6 374.5 327.2
2620.2
103.1
3.1
2.4
310.0
282.0
329.6
320.9
Urea (M.T./M.T.)
0.6
0.6
PVC Resin (M.T./M.T.)
4.9
4.8
Carbide Packed (T/Ton) 3.0 3.0 .............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

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C. Soda (M.T./M.T.)
2.4
2.3
Cement (M.T./M.T.)
0.3
0.3
SBP (M.T./M.T.) Urea (Kg./Ton)
0.2
0.2 5.9
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3. Furnace Oil
6.9
C. Soda, SFC, Kota (Kg./Ton)
0.3
0.3
C. Soda, SAC, Bharuch (Kg./Ton)
536.8
559.2
Cement (Kg./Ton)
0.2
0.1 1.3
4. Others
Steam C. Soda (M.T./M.T.) SAC, Bharuch
1.3
Steam PVC Compund (M.T./M.T.)
0.4
0.6
Bagasse (M.T.) Ajbapur
2.0
1.5
Bagasse (M.T.) Rupapur
2.3
2.0
Bagasse (M.T.) Loni
2.1
1.2
Bagasse (M.T.) Hariawan Notes: 1. Different sources of energy are inter changeable. 2. Wherever required, figures relating to previous year have been re-arranged.
2.0
1.0
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FORM B (See Rule 2) Form for disclosure of particulars with respect to technology absorption Research and Development (R & D)
1. Specific areas in which R & D carried out by the Company - Trial of fuel has been conducted to reduce un-burnt carbon in 35 & 10 MW boilers. - Higher capacity Acetylene Generator for low size Carbide has been designed in house and the same has been installed & commissioned. - Study on Salt/Brine purification is being carried out. - Seed Pan Technique for reduction in massecuite production in sugar plant. - Installation of A Pan turns around automation system in sugar units. - Installation of direct contact heaters & cigar system. - A novel Vinyl Polymeric Nano Composite Colored Master batch composition developed along with method of preparation which has enhanced pigment dispersion, better flow-ability and higher pigment loading. Patent has been filed and application number awarded. - Unique polyvinyl chloride and polypropylene polymeric blend compound having good physical, mechanical, thermal, electrical properties along with weatherability. The blend material has good processability, chemical resistance, heat deflection temperature, impact strength as well as hinge properties & flexibility. Patent has been filed and application number awarded. - Sequential process for the production of ultra fine calcium salts from carbide lime was developed for improved polymeric properties like impact resistance, flow-ability, stability, opacity and brightness when added as filler in plastics. Control on processing parameters enables production of desired crystal nature and size with significant improvements in first pass yields. Patent has been filed and application number awaited. - Products from specialty ultra high and ultra low K-value based compounds for high performance applications developed for injection moulding applications e.g. electrical enclosures & corrugated conduits, medical and automotive applications. - Installed 6 Draw Frames, 3 TFOs, 4 Speed frames, 5 Carding Machines, and 2 Ring Frame Machines in the factory which has improved the productivity of the yarn. 2. Benefits derived as a result of the above R & D - Un-burnt reduction of 20% was achieved during the year. - 30 MVA Furnace downtime has been reduced to practically nil which has saved energy lost on account of heating and cooling of Furnace. - Saving of Rs. 50 Lacs has been achieved by usage of power Carbide and floor sweepings. - Improvement in sugar colour, lusture and reduction in steam consumption. - TAAS system has resulted in reduction in boiling time,
consistent brix during pan boiling, increase in purity drop and finally reduction in losses. - Reduction of steam consumption. - Rigid and flexible master batches for PVC applications using K-50 PVC resin will improve dispersion in PVC compounds and processability as well as give customer advantage of lower loadings and better aesthetics. - Blends of PP & PVC help with superior performance in applications especially where higher thermal stability is required. - Ultra fine calcium carbonate filler improves the mechanical & thermal properties with significant cost advantage vis-a-vis other expensive additives which are presently being used in the industry. - High performance applications can easily be targeted with speciality ultra high & Low K-value PVC compounds & blends due to improved properties. - Product mix has diversified. - Repeat orders from Exporting Units have been obtained. 3. Future plan of action - Development of simulation model for entire Ammonia Plant to enable evaluation of energy conservation schemes and to further optimize plant performance. - Further trial of fuel additives in the year 2008-09 in 40 MW/30 MW boiler to reduce the unburnt carbon with specific target. - Pneumatic conveying of sugar dust. - Pneumatic grading of sugar crystals. - Sulphur melting by heat generated by Sulphur combustion. - Induction of bagasse drier to reduce the fuel consumption in boiler. - Introduction of Heavy juice on cake washing. - Introduction of sugar washing through AL molasses. - Juice softening R & D with Aduban Sugar Institute, Lousiana, U.S. - Installation of automated weighing & batching system as well as Buss Kneader for the manufacture of ultra high & low K-value PVC compounds and commercialization in niche applications. - Protect and retain the technological developments with patents wherever it is critical. - Development of a Pilot facility to manufacture ultrafine precipitated calcium carbonate. 4. Expenditure on R & D Rs./Lacs 2007-08 2006-07 a) Capital 27.00 20.00 b) Revenue 154.00 182.57 c) Total 181.00 202.57 d) Total R & D expenditure as percentage of total turnover 0.07 0.07
40
Technology absorption, adaptation and innovation 1. Efforts, in brief, made towards technology absorption, adaptation and innovation The technology of lime briquetting of waste lime fines into useful briquettes has been successfully adopted. Installation of direct contact heaters for molasses conditioning & cigar condensate flash vapour. No use of water in AH, BH, CL molasses conditioners & molasses conditioning by 4th Effect vapour. Kneader technology with segmented elements for the development of ultra low & high K-value resin based PVC compounds & blends. Automated weighing batching system for conveying of raw material to reduce errors in manual handling
of chemicals as well as to get better quality of compounds. 2. Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution, etc. Conversion of waste into useful product for use in Furnaces. Reduction in boiling time & consistent brix during the pan boiling. Reduction in steam consumption / fuel consumption. Production of low ICUMSA Sugar with fine lusture. New market segments are being added based on new product range. Better quality of products and cost reduction due to lower usage of additives in new PVC compounds.
3. I.
Details of imported technology (imported during the last 5 years reckoned from the beginning of the financial year) are furnished as under:
Cement Plant a) Technology Imported To modify the kiln internals to enhance the clinker production. ...................................................................................................................................................................................................................................................................................................................................................................................... b) Year of Import 2004-05 ...................................................................................................................................................................................................................................................................................................................................................................................... c) Has the technology been fully absorbed? Yes ...................................................................................................................................................................................................................................................................................................................................................................................... d) If not fully absorbed, reasons therefor and N.A. future plans of action II. Chemical Plant Purchase of bipolar membrane electrolyzer from Asahi Kasei Chemical Corporation based on their proprietory ION Exchange membrane technology developed for use in manufacture of Chlor-Alkali Products. Design & Drawings package to convert existing Mercury Cell Based Caustic Soda Plant to membrance Cell Plant of 200 TPD capacity. ...................................................................................................................................................................................................................................................................................................................................................................................... b) Year of Import 2004-05, 2005-06 ...................................................................................................................................................................................................................................................................................................................................................................................... c) Has the technology been fully absorbed? Yes ...................................................................................................................................................................................................................................................................................................................................................................................... d) If not fully absorbed, reasons therefor and N.A. future plans of action III. Sugar Plant - Rupapur a) Technology Imported Bagasse drier, Steam Conservation (Cigar) ...................................................................................................................................................................................................................................................................................................................................................................................... b) Year of Import 2005-06 ...................................................................................................................................................................................................................................................................................................................................................................................... c) Has the technology been fully absorbed? Yes ...................................................................................................................................................................................................................................................................................................................................................................................... d) If not fully absorbed, reasons therefor and N.A. future plans of action IV. PVC Plant a) Technology Imported a) Technology Imported
Purchase of polymer based on suspension technology from Chisso Corp., Japan of 100 M3 capacity. ...................................................................................................................................................................................................................................................................................................................................................................................... b) Year of Import 2005-06 ...................................................................................................................................................................................................................................................................................................................................................................................... c) Has the technology been fully absorbed? Yes ...................................................................................................................................................................................................................................................................................................................................................................................... d) If not fully absorbed, reasons therefor and N.A. future plans of action
41
11
Corporate Governance Report 2007-08
(A) Companys Philosophy The Companys philosophy on Corporate Governance is focused upon a rich legacy of fair, ethical and transparent governance practices. The Company is conscious of its responsibility as a good corporate citizen and is committed to high standard of Corporate Governance practices. This is reflected in the well balanced and independent structure of the Companys eminent and well represented Board of Directors. The Company is in full compliance with the requirements under Clause 49 of the Listing Agreement with the Stock Exchanges. (B) Board of Directors As at 31.3.2008, the Board of Directors comprises of an Executive Chairman, four Executive Directors and seven Non-Executive Directors. During the year, seven Board Meetings were held on 29.6.2007, 31.7.2007, 16.8.2007, 24.8.2007, 24.10.2007, 30.1.2008 and 12.3.2008. The composition of Board of Directors and their attendance at Board Meetings during the year 2007-08 and at the last Annual General Meeting held on 24.8.2007 and also number of other Directorship and Committee Membership/ Chairmanship as on 31.3.2008 are as follows:
Category of No. of Board Attended No. of other No. of Committee Directorship meetings last AGM Directorship # Membership # # attended Member Chairman Shri Ajay S. Shriram ED 7 Yes 1 2 2 1 ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. Shri Vikram S. Shriram ED 7 Yes 1 1 4 2 ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. Shri Rajiv Sinha ED 5 Yes 5 2 ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. Shri Ajit S. Shriram ED 5 Yes 9 1 ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. Dr. N.J. Singh * ED 1 ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. Dr. S.S. Baijal I-NED 6 Yes 6 5 3 ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. Shri Arun Bharat Ram I-NED 4 No 1 1 5 1 ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. Shri Pradeep Dinodia I-NED 7 Yes 8 7 5 ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. Shri Vimal Bhandari I-NED 3 Yes 5 2 1 ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. Shri Sunil Kant Munjal I-NED 5 No 1 4 4 1 ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. Shri D. Sengupta I-NED 7 Yes 3 1 ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. Shri S.L. Mohan (GIC Nominee) ** I-NED 1 No ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. Shri S.C.Bhargava (LIC Nominee) I-NED 5 Yes 1 4 4 1
# Excluding Private Limited Companies, Foreign Companies and Companies registered under Section 25 of the Companies Act, 1956. # # Includes only Audit Committee and Shareholders/Investors Grievance Committee. ED - Executive Director I-NED - Independent-Non-Executive Director * Appointed w.e.f. 20.11.2007 ** Ceased w.e.f. 24.10.2007
Name of Director
The ratio between Executive and Non-Executive Directors and Non-Independent and Independent Directors is 5:7. Relationship amongst Directors Shri Ajay S. Shriram, Shri Vikram S. Shriram and Shri Ajit S. Shriram, being brothers, are related to each other. Code of Conduct for Board Members & Senior Management Team: In compliance to the provisions of Clause 49 of the
Listing Agreement, the Board has laid down a Code of Conduct for all Board Members and Senior Management Team. A copy of the said Code of Conduct is available on the website of the Company (www.dscl.com). All Board Members and Senior Management Team have affirmed compliance of Code of Conduct as on 31st March, 2008 and a declaration to that effect signed by Chairman & Senior Managing Director is attached and forms part of this report.
42
(C) Board Audit Committee (i) Terms of reference: The role and terms of reference of Board Audit Committee covers areas mentioned under Clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956, besides other terms as may be referred to by the Board of Directors. (ii) Composition: The Board Audit Committee was formed in 1990. As at 31.3.2008, the Committee comprises of four Independent-Non-Executive Directors. The Committee met four times during the year and attendance of the Members at the meetings was as follows: Name of Member Status No. of meetings attended Dr. S.S. Baijal Chairman 3 ........................................................................................................................................................................................ Shri Arun Bharat Ram Member 4 ........................................................................................................................................................................................ Shri Pradeep Dinodia Member 4 ........................................................................................................................................................................................ Shri D. Sengupta Member 4 (D) Committee for Determining Remuneration Payable to Managing/Whole Time Directors (i) Terms of reference: Subject to the provisions of the Companies Act, 1956 and the notifications, if any, issued by the Government thereunder to determine the remuneration, including commission, payable to Managing/Whole time Directors. (ii) Composition: The Committee comprises of three IndependentExecutive Directors Salary P.F.
Non-Executive Directors. The Committee met four times during the year and the attendance of the Members at the meetings was as follows: No. of meetings attended Dr. S.S. Baijal Chairman 2 ......................................................................................................................................................................................... Shri Pradeep Dinodia Member 4 ......................................................................................................................................................................................... Shri D. Sengupta Member 4 (iii) Remuneration Policy: The policy, inter alia, provides for the following: a) Executive Directors: - Salary and commission not to exceed limits prescribed under the Companies Act, 1956. - Revision from time to time depending upon performance of the Company, individual Directors performance and prevailing Industry norms. - No sitting fees. b) Non-Executive Directors: - Eligible for commission. - Sitting fees and commission not to exceed limits prescribed under the Companies Act, 1956. - The remuneration payable to NonExecutive Directors is decided by the Board of Directors. (iv) Details of remuneration for the year 200708: (a) Executive Directors: (Amount/Rs. Lacs) Superannuation Perquisites Total Name of Member Status
Shri Ajay S. Shriram* 57.60 6.91 8.64 41.97 115.12 Shri Vikram S. Shriram* 54.00 6.48 8.10 33.85 102.43 ..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... Shri Rajiv Sinha* 40.80 4.89 6.12 20.95 72.76 ..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... Shri Ajit S. Shriram** 38.40 4.61 5.76 34.63 83.40 ..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... Dr. N.J. Singh*** 4.37 0.52 0.66 2.74 8.29
.....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
* Re-appointed w.e.f. 1.11.2003 for a period of 5 years. **Re-appointed w.e.f. 2.5.2006 for a period of 5 years.
*** Appointed w.e.f. 20.11.2007 for a period of 5 years. I. Provision for incremental gratuity and earned leave for the current year has not been considered, since the provision is based on actuarial basis for the Company as a whole. II. Notice period for termination of appointment of Managing/Whole Time Directors is six calendar months, on either side.
43
III. In the event of termination of appointment of Managing/Whole Time Directors, compensation will be in accordance with the provisions of the Companies Act, 1956 or any statutory amendment or re-enactment thereof. IV. The Company has not offered any stock option to its Executive Directors. (b) Non-Executive Directors: During the financial year, there was no pecuniary relationship or transaction between the Company and any of its Non-Executive Directors. The criteria for making payments to NonExecutive Directors is as under: A. Sitting fee: @ Rs.10,000/- per Board meeting, and @ Rs.5,000/- per Board Committee meeting attended by them. B. Commission: During the year, no commission is payable to Directors due to inadequacy of profits. The details of remuneration paid during the year by way of sitting fee for attending meetings of Board/Committees thereof along with number of shares held by Non-Executive Directors as on 31.3.2008 in the Company are as under:
Name of the Director Amount/Rs. Lac(s) No. of Shares Sitting Fee held
....................................................................................................................................................................................... ....................................................................................................................................................................................... ....................................................................................................................................................................................... ....................................................................................................................................................................................... ....................................................................................................................................................................................... .......................................................................................................................................................................................
b)
c)
d)
e)
f)
g)
debentures/warrants issued/to be issued by the Company, to exercise all powers conferred on the Board of Directors under Article 43 of the Articles of Association, to decide all questions and matters that may arise in regard to transmission of shares/ debentures/warrants issued/to be issued by the Company, to approve and issue duplicate shares/ debentures/warrants certificates in lieu of those reported lost, to refer to the Board any proposal of refusal of registration of transfer of shares/ debentures/warrants for their consideration, to look into shareholders and investors complaints like transfer of shares, nonreceipt of annual reports, non-receipt of declared dividend warrants, etc., and to delegate all or any of its powers to Officers/Authorised Signatories of the Company.
Dr. S.S. Baijal
1.5
50,000 -
Shri Arun Bharat Ram Shri Pradeep Dinodia Shri Vimal Bhandari Shri D. Sengupta
0.6
1.55 0.3 0.5
29,270 2,000 -
Shri Sunil Kant Munjal
(ii) Composition: The Committee comprises of two IndependentNon-Executive Directors and two Executive Directors. The Company Secretary being Compliance Officer has been delegated the power to approve share transfer/transmission etc. subject to a limit of 2500 shares of Rs.2/- each per transfer deed at a time. The delegated authority has been regularly addressing the share transfer formalities. During the year, the Committee met nine times and the attendance of the Members was as follows:
Name Shri Pradeep Dinodia Dr. S.S. Baijal Status Chairman Member Member No. of meetings attended 9 4
1.9
8,000 -
.......................................................................................................................................................................................
Shri S.L. Mohan * (GIC Nominee) Shri S.C.Bhargava (LIC Nominee)
0.1 0.5
....................................................................................................................................................................................... .......................................................................................................................................................................................
* Ceased w.e.f. 24.10.2007
Shri Ajay S. Shriram Member 7 ....................................................................................................................................................................................... Shri Vikram S. Shriram 9
(E) Shareholders/Investors Grievance Committee (i) Terms of reference: a) to scrutinise and approve registration of transfer and transmission of shares/
During the year, 263 complaints were received from the shareholders and all of them were resolved to the full satisfaction of the shareholders. No investor complaint was pending as on 31.3.2008.
44
(F) General Body Meetings The last three Annual General Meetings were held as under:
Financial Date Time Location Year 2006-07 24.08.2007 10.00 A.M. Air Force Auditorium, Subroto Park, New Delhi ....................................................................................................................................................................................... 2005-06 25.07.2006 10.00 A.M. Air Force Auditorium, Subroto Park, New Delhi ....................................................................................................................................................................................... 2004-05 02.08.2005 10.00 A.M. Air Force Auditorium, Subroto Park, New Delhi
on the Company by the Stock Exchanges or SEBI or any other statutory authority on any matter related to the capital markets during the last three years. (iii) The Company is complying with all mandatory requirements of Clause 49 of the Listing Agreement. The Company has adopted nonmandatory requirements relating to Remuneration Committee. (H) Means of Communication The Company interacts with its shareholders through multiple forms of corporate and financial communications such as annual reports, result announcement and media releases. Quarterly results are usually published in English daily newspapers, viz., The Economic Times, The Financial Times, Business Line and one Hindi daily newspaper, viz. Navbharat Times. These results are also made available on the website of the Company www.dscl.com and also posted at SEBIs website www.sebiedifar.nic.in. The Companys website also displays official news releases. The Company has interacted with analysts and investors during the year under review through one to one meeting. (I) General Shareholders Information (i) Next Annual General Meeting is proposed to be held on 19th August, 2008 at Air Force Auditorium, Subroto Park, New Delhi. (ii) Financial Year: April to March (iii) Date of book closure: 5th August, 2008 to 12th August, 2008 (both days inclusive) (iv) Dividend payment date: Dividend, if any, declared in the next Annual General Meeting, will be paid within 30 days of the date of declaration to those shareholders whose names appear in the Register of Members on the date of book closure. (v) Listing on Stock Exchanges and Stock Codes: Equity Shares are listed on National Stock Exchange of India Ltd. (Stock Code NSE:DCMSRMCONS) and Bombay Stock Exchange Ltd. (Stock Code BSE:523367). Under the depository system, the ISIN allotted to the Companys Equity Shares of face value of Rs.2/- each is INE499A01024.
The details of Special Resolutions passed in previous 3 Annual General Meetings are as under: AGM 2007 - No Special Resolution was passed. AGM 2006 - Approval for re-appointment under Sections 269, 309 of the Companies Act, 1956 of Shri Ajit S. Shriram as Director (Sugar) for a period of five years w.e.f. 2.5.2006. - Approval for appointment under Section 314 of the Companies Act, 1956 of Shri Aditya A. Shriram as a Manager to hold and continue to hold an office or place of profit in the Company. AGM 2005 - Approval under Section 309 of the Companies Act, 1956 for payment of sum not exceeding 1% per annum of net profits to Non-Executive Directors for a period of five years commencing from 1st April, 2005. POSTAL BALLOT - During the year, no special resolution has been passed by Postal Ballot. (G) Disclosures (i) There were no transactions of material nature with related parties during the year that had potential conflict with the interest of the Company at large. (ii) There were no instances of non-compliance by the Company, penalties and strictures imposed
45
(vi) Equity Share Price data for the year 2007-08: Equity Share Price on NSE and NIFTY Index
Month Share Price on NSE High Low NIFTY Index High Low
(x) Categories of Shareholders as on 31.03.2008: Category No of fully % paid up shareshares held holding
2007 April 98.50 84.10 4217.90 3617.00 ....................................................................................................................................................................................... May 89.60 71.00 4306.75 3981.15 ....................................................................................................................................................................................... June 80.20 68.60 4362.95 4100.80 ....................................................................................................................................................................................... July 97.00 72.25 4647.95 4304.00 ....................................................................................................................................................................................... August 92.00 71.15 4532.90 4002.20 ....................................................................................................................................................................................... September 76.90 67.10 5055.80 4445.55 ....................................................................................................................................................................................... October 73.50 58.40 5976.00 5000.95 ....................................................................................................................................................................................... November 77.40 60.00 6011.95 5394.35 ....................................................................................................................................................................................... December 96.00 69.30 6185.40 5676.70
.......................................................................................................................................................................................
Promoters, Relatives and Associates 91172153 54.95 ........................................................................................................................................................................................

........................................................................................................................................................................................
Financial Institutions, Banks and Insurance Companies
19924405
12.01
Foreign Institutional Investors, Overseas Corporate Bodies and Non-Resident Indians 18003253 10.85 ........................................................................................................................................................................................
........................................................................................................................................................................................
Mutual Funds
5031557
3.03
Bodies Corporate 7259934 4.38 ........................................................................................................................................................................................

........................................................................................................................................................................................
General Public TOTAL
24512018
14.78
2008 January 106.90 55.00 6357.10 4448.50 ....................................................................................................................................................................................... February 74.85 61.00 5545.20 4803.60 ....................................................................................................................................................................................... March 70.50 48.15 5222.80 4468.55
165903320
100.00
(vii) Registrar and Share Transfer Agent: M/s. MCS Limited are the Registrar and Share Transfer Agent for shares and debentures of the Company-both in physical and electronic mode. (viii) Share Transfer System: The Companys shares are traded in the Stock Exchanges compulsorily in demat mode. Physical shares, which are lodged with the Company for transfer, are processed and returned to the shareholders within a period of 30 days. (ix) Distribution of Shareholding as on 31.03.2008: Shareholders Number % to total no. of Shareholders Upto 500 51046 86.39 ...................................................................................................................................................................................... 501 - 1000 3970 6.72 ...................................................................................................................................................................................... 1001 - 2000 2014 3.41 ...................................................................................................................................................................................... 2001 - 3000 705 1.19 ...................................................................................................................................................................................... 3001 - 4000 344 0.58 ...................................................................................................................................................................................... 4001 - 5000 238 0.40 ...................................................................................................................................................................................... 5001 - 10000 378 0.64 ...................................................................................................................................................................................... 10001 and above 396 0.67 ...................................................................................................................................................................................... TOTAL 59091 100.00 No. of Shares
(xi) Dematerialisation of Equity Shares and liquidity: As on 31.03.2008, of the total eligible Equity Shares, 86.56% were in dematerialised form and the balance 13.44% shares in physical form. The Company has not issued any GDRs/ADRs/ warrants or any convertible instruments, which are pending for conversion. (xii) Plant Locations: The Companys plants are located at Kota, Bharuch, Ajbapur, Rupapur, Hariawan, Loni, Tonk, Bangalore, Bhiwadi, Chennai, Hyderabad and Mumbai. (xiii) Address for Correspondence: The Companys Registered Office is situated at 6 th Floor, Kanchenjunga Building, 18, Barakhamba Road, New Delhi-110 001. Correspondence by the shareholders and debentureholders should be addressed to: MCS Limited Srivenkatesh Bhavan, W-40, Okhla Industrial Area, PhaseII, New Delhi 110 020 Tel Nos. 011-41406149, 41406151-52 Fax No. 011-41709881 E-mail : mcsdel@vsnl.com Exclusive E-mail for Investor Complaints investorcomplaints@dscl.com Shareholders holding shares in electronic mode should address all their correspondence to their respective Depository Participants.
46
Declaration regarding Compliance of Code of Conduct

I, Ajay S. Shriram, Chairman & Senior Managing Director of DCM Shriram Consolidated Limited hereby declare that all Board Members and Senior Management Team have affirmed compliance of the Code of Conduct for the year ended March 31, 2008.
Place : New Delhi Date : 13th May, 2008
Auditors Certificate on the Compliance of conditions of Corporate Governance under Clause 49 of the Listing Agreement
To the Members of DCM Shriram Consolidated Limited We have examined the compliance of conditions of Corporate Governance by DCM Shriram Consolidated Limited for the year ended March 31, 2008, as stipulated in clause 49 of the Listing Agreement(s) of the said Company with stock exchange(s). The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement(s). We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
For A.F. FERGUSON & CO. Chartered Accountants
Place : New Delhi Date : 13th May, 2008
Jitendra Agarwal Partner Membership No.87104
47
12
Auditors Report
To the Members of DCM Shriram Consolidated Limited 1. We have audited the attached balance sheet of DCM Shriram Consolidated Limited as at March 31, 2008, the profit and loss account and also the cash flow statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the annexure referred to in paragraph 3 above, we report that : a) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; c) the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account; d) in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with
by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; e) on the basis of written representations received from the directors as on March 31,2008 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2008 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; f) without qualifying our opinion, we draw attention to note 20 of schedule 13 relating to accounting for cane purchase liability for the sugar season 2007-08 at Rs. 110 per quintal instead of State Advised Price of Rs. 125 per quintal fixed by the Uttar Pradesh State Government. Pending completion of legal proceedings in the matter, the effect thereof on these accounts can not be determined at this stage.
g) In our opinion and to the best of our information and according to the explanations given to us, the accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2008;
ii) in the case of the profit and loss account, of the profit of the Company for the year ended on that date; and iii) in the case of the cash flow statement, of the cash flows for the year ended on that date. For A. F. FERGUSON & CO. Chartered Accountants Jitendra Agarwal Partner Membership No.: 87104
New Delhi Date : May 13, 2008
48
Auditors Report
(Continued)
Section 301 of the Companies Act, 1956. These loans includes interest free loan aggregating to Rs. 57.25 crores made to two wholly owned subsidiaries, which, as explained to us, have been made for setting up new projects and making strategic investments in other subsidiaries. The maximum amount due during the year of above loans was Rs. 93.94 crores and the year end balance of loans so granted was Rs. 64.47 crores. (b) In our opinion and according to the information and explanations given to us, after considering the purpose for which loans have been granted as indicated in paragraph 4(iii)(a) of the Companies (Auditors Report) Order, 2003 (hereinafter referred to as the Order), the rate of interest and other terms and conditions of the loans granted, are, prima-facie, not prejudicial to the interest of the Company. (c) According to the information and explanations given to us, the parties, to whom the loans have been granted by the Company, as referred to in paragraph 4(iii)(a) above, have been regular in repayment of principal amount as stipulated and have been regular in payment of interest where charged. (d) According to the information and explanations given to us, there are no overdue amounts in respect of the loans granted as referred to in paragraph 4(iii)(a) above and interest thereon where charged. (e) According to the information and explanations given to us, the unsecured loan taken by the Company from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, is by way of fixed deposit of Rs 0.07 crore (maximum amount outstanding during the year Rs 0.07 crore) from a director, which is outstanding as at the year end. (f) In our opinion, the rate of interest and other terms and conditions of unsecured loan taken by the Company are not, prima facie, prejudicial to the interest of the Company. (g) In our opinion, the Company is regular in payment of the principal amount and the interest thereon. (iv) In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of inventories and
49
ANNEXURE Annexure referred to in paragraph 3 of Auditors Report to the Members of DCM Shriram Consolidated Limited on the accounts for the year ended March 31, 2008. (i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. (b) As explained to us, the Company has a programme of physically verifying all its fixed assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of its fixed assets. In accordance with this programme, most of the fixed assets were physically verified by the management during the year. The discrepancies noticed on such verification between the physical balances and the fixed assets records were not material and have been properly dealt with in the books of account. (c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year. (ii) (a) During the year, the inventories have been physically verified by the management except for inventory lying with third parties at the end of the year for which confirmations have been obtained in most of the cases. In our opinion, the frequency of the verification is reasonable. (b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) On the basis of our examination of the records of inventories, we are of the opinion that, the Company is maintaining proper records of inventories. The discrepancies noticed on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account. (iii) (a) According to the information and explanations given to us, the Company has, during the year, not granted any loan, secured or unsecured to companies, firms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956, other than unsecured loans aggregating Rs. 127.46 crores granted during the year to three wholly owned subsidiaries covered in the register maintained under
Auditors Report
(Continued)
(viii) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government, the maintenance of cost records has been prescribed under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete. (ix) (a) According to the information and explanations given to us and the records of the Company examined by us, the Company has generally been regular in depositing undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it. We are informed that there are no undisputed statutory dues as at the year end outstanding for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us and the records of the Company examined by us, there are no disputed dues of wealth tax, customs duty, service tax and cess matters. According to the information and explanations given to us and the records of the Company examined by us, the details of disputed dues not paid of excise duty, sales tax and income-tax dues as at March 31, 2008 are as follows:
fixed assets and with regard to sale of goods. There are no sale of services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instance of major weaknesses in the aforesaid internal control system. (v) According to the information and explanations given to us, during the year, there were no transactions that were required to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956 ( The Act). For this purpose the Company has taken the view that the transactions which are subjected to the provisions of section 299(6) of the Act are not required to be entered in this register. In any case, notwithstanding the view of section 299(6) of the Act taken by the Company, in respect of certain transactions, exceeding the value of Rs. 5 lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time. (vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 58A, section 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, with regard to the deposits accepted from the public. As per information and explanations given to us, no order under the aforesaid sections has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company. (vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
Nature of the statute Central Excise Law Nature of the dues Excise duty Forum where pending Appellate authority up to commissioners level
Amount* (Rs.Crores) 2.16 0.11 2.57 1.51 49.79
Amount paid under protest (Rs. Crores) 0.06 0.80 49.79
Period to which the amount relates 1995-96, 2001-02, 2003-04, 2005-06, 2006-07 1997-98 1983-84, 1994-95, 1995-96 to 2000-01 1990-91, 1991-92, 1992-93, 1995-96 2002-03, 2003-04, 2004-05
Central Excise and Service Tax Appellate Tribunal Sales Tax Laws Sales tax Appellate authority up to commissioners level Sales Tax Tribunal Income Tax Act, 1961 Income tax Commissioner (Appeal)
* amount as per demand orders including interest and penalty wherever quantified in the Order
50
Auditors Report
(Continued)
The following matters, which have been excluded from the table above, have been decided in favour of the Company but the department has preferred appeals at higher levels. The details are given below:
Nature of the statute Income Tax Act, 1961 Nature of the dues Income Tax Forum where pending High Court Amount (Rs. Crores) 9.85 Period to which the amount relates 1996-97, 1997-98, 1998-99
(x)
(xi)
(xii)
(xiii) (xiv)
(xv)
(xvi)
(xvii)
The Company does not have accumulated losses at the end of the financial year March 31, 2008. Further, the Company has not incurred any cash losses during the financial year ended March 31, 2008 and in the immediately preceding financial year ended March 31, 2007. According to the records of the Company examined by us and the information and explanations given to us, the Company, during the year, has not defaulted in repayment of dues to financial institutions, banks or debenture holders. As the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, paragraph 4 (xii) of the Order is not applicable. The provisions of any special statute as specified under paragraph 4 (xiii) of the Order are not applicable to the Company. As the Company is not dealing or trading in shares, securities, debentures and other investments, paragraph 4 (xiv) of the Order is not applicable. As the Company has not given any guarantees during the year for loans taken by others from banks or financial institutions, paragraph 4(xv) of the Order is not applicable. In our opinion and according to the information and explanations given to us, the term loans taken during the year have been applied for the purpose for which they were obtained. As at April 1, 2007, the Company had short term loans amounting to Rs. 212.71 crores
invested in fixed assets. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, short term loans so utilised have since been refinanced during the year with funds from long term sources. As such we report that as at year end, short term funds have not been used to finance long term investment. (xviii) As the Company has not made any preferential allotment of shares during the year, paragraph 4 (xviii) of the Order is not applicable. (xix) According to information and explanations given to us, no security has been created for debentures issued during the year since they are unsecured. (xx) Since the Company has not raised any money by way of public issue during the year, paragraph 4 (xx) of the Order is not applicable. (xxi) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended March 31, 2008.
For A. F. FERGUSON & CO. Chartered Accountants Jitendra Agarwal Partner Membership No.: 87104
51
Balance Sheet
as at March 31, 2008

Schedule
DCM SHRIRAM CONSOLIDATED LIMITED As at March 31, 2008 Rs. Crores As at March 31, 2007 Rs. Crores
Sources of Funds Shareholders funds Share capital Reserves and surplus Loan funds Secured Unsecured Deferred tax liabilities (net) Total funds employed Application of Funds Fixed assets Gross block Less : Depreciation Net block Capital work in progress Investments Current assets, loans and advances Inventories Sundry debtors Cash and bank balances Loans and advances Less: Current liabilities and provisions Current liabilities Provisions 6 7 5 2310.84 617.00 1693.84 270.36 1964.20 198.12 783.06 239.34 46.56 332.37 1401.33 8 402.95 86.26 489.21 Net current assets Total funds utilised Notes to the accounts
Per our report attached For A.F. FERGUSON & CO. Chartered Accountants Jitendra Agarwal Partner Membership No.: 87104 B.L. SACHDEVA Company Secretary
1 2 3
33.34 1111.99 1145.33 1234.21 523.70
33.34 518.49 551.83 978.38 542.16 1520.54 170.55 2242.92
1757.91 171.20 3074.44
2145.61 498.74 1646.87 101.62 1748.49 33.99 558.13 502.20 52.91 220.78 1334.02 812.17 61.41 873.58 460.44 2242.92
912.12 3074.44 13
VIKRAM S. SHRIRAM Vice Chairman & Managing Director RAJIV SINHA Dy. Managing Director
AJAY S. SHRIRAM Chairman & Sr. Managing Director N.J. SINGH S.S. BAIJAL ARUN BHARAT RAM PRADEEP DINODIA SUNIL KANT MUNJAL D. SENGUPTA S.C. BHARGAVA Directors 52
New Delhi May 13, 2008 DSCL ANNUAL REPORT 07-08
Profit and Loss Account
for the year ended March 31, 2008

Schedule
DCM SHRIRAM CONSOLIDATED LIMITED Year ended March 31, 2007 Rs. Crores 2872.16 170.70 2701.46 33.71 2735.17 1837.34 661.62 60.92 16.42 158.87 90.26 68.61 22.80 45.81 5.16 225.74 276.71
Year ended March 31, 2008 Rs. Crores 2685.59 196.04
Income Sale of products (Gross) Less : Excise duty Sale of products (Net) Other income Expenditure Manufacturing and other expenses Purchases for resale Interest - On debentures and other fixed loans - Others Profit for the year before depreciation, tax and exceptional items Depreciation Exceptional items (net) Profit before tax Provision for taxation Profit after tax Transfer from debenture redemption reserve Balance brought forward from the previous year Profit available for appropriation Appropriations Proposed dividends (equity shares) - Interim - Final Corporate dividend tax General reserve Balance carried to balance sheet Earnings per share - basic/diluted (Rs.) (Refer note 5 in schedule 13) -Before exceptional items -After exceptional items Notes to the accounts
Per our report attached to the balance sheet For A.F. FERGUSON & CO. Chartered Accountants Jitendra Agarwal Partner Membership No.:87104 B.L. SACHDEVA Company Secretary
2489.55 34.79 2524.34
10
1903.36 401.47 75.64 9.09 134.78
11 12
122.13 770.12 782.77 111.78 670.99 5.17 251.37 927.53
49.77 6.64 9.59 400.00 461.53
6.64 6.64 2.06 10.00 251.37
0.39 40.44 13
2.76 2.76
Cash Flow Statement
for the year ended March 31, 2008
DCM SHRIRAM CONSOLIDATED LIMITED
Year ended Year ended March 31, 2008 March 31, 2007 Rs. Crores Rs. Crores Rs. Crores Rs. Crores A. Cash flow from operating activities Net profit before tax and exceptional item Adjustments for : Depreciation (Profit)/Loss on sale of fixed assets Loss on sale of non-trade current investments Profit on sale of non-trade long term investments Finance charges Interest expense Less: interest and dividend income Operating profit before working capital changes Adjustments for : Trade and other receivables(net) Inventories Trade and other payables Cash generated from operations Income taxes paid Net cash from/(used) in operating activities B. Cash flow from investing activities Purchase of fixed assets Sale of fixed assets Purchase of non-trade long term investments Purchase of non-trade current investments Sale of non-trade current investments Sale of non-trade long term investments Sale of trade long term investments Advances to subsidiary companies Interest received Dividend received Cash flow from investing activities before exceptional item Exceptional items Net cash from/(used) in investing activities C. Cash flow from financing activities Proceeds from borrowings Repayment of borrowings Finance charges Changes in working capital borrowings Repayment of finance lease liabilities Dividends paid Corporate dividend tax paid Interest paid Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents as at opening Cash and cheques in hand and balance with banks Cash and cash equivalents as at closing Cash and cheques in hand and balance with banks
Per our report attached to the balance sheet For A.F. FERGUSON & CO. Chartered Accountants Jitendra Agarwal Partner Membership No.: 87104 B.L. SACHDEVA Company Secretary VIKRAM S. SHRIRAM Vice Chairman & Managing Director RAJIV SINHA Dy. Managing Director
12.65 122.13 0.13 0.15 84.73 (7.71) 77.02 212.08 207.86 (224.93) (444.93) (249.92) (111.90) (361.82) (352.24) 3.89 (20.65) (5184.96) 5031.81 (47.93) 4.08 1.67 (564.33) 832.59 268.26 6,854.39 (6,584.65) (32.92) (56.41) (9.59) (83.61) 87.21 (6.35) 52.48 46.13 77.34 (5.95)
68.61 90.26 (8.21) (3.06) 1.46 71.39 220.45 (135.67) (117.55) 278.04 245.27 (23.95) 221.32 (579.39) 14.49 (2007.02) 2007.02 3.06 0.50 (5.29) 4.13 1.60 (560.90) (560.90) 3958.77 (3691.16) (1.46) 186.07 (0.03) (14.94) (2.09) (75.26) 359.90 20.32 32.16 52.48
Schedules to the Accounts

1. SHARE CAPITAL
As at March 31, 2008 Rs. Crores Authorised 24,99,50,000 (2006-2007 - 24,99,50,000) Equity shares of Rs.2 each 65,01,000 (2006-2007 - 65,01,000) Cumulative redeemable preference shares of Rs.100 each 49.99
As at March 31, 2007 Rs. Crores
49.99
65.01 115.00
65.01 115.00
Issued 16,98,03,320 (2006-2007 - 16,98,03,320) Equity shares of Rs.2 each Subscribed and paid up 16,59,03,320 (2006-2007 - 16,59,03,320) Equity shares of Rs.2 each fully called-up Add: Forfeited shares - Amount originally paid up 33.18 0.16 33.18 0.16 33.96 33.96
33.34 33.34
33.34 33.34
NOTES: Of the issued, subscribed and paid-up capital, 2,87,75,380 equity shares of Rs. 2 each represent the equity shares issued on October 9, 1990 to the members of undivided DCM Limited in the ratio of one share for every four shares held by the members in undivided DCM Limited, in terms of the Scheme of Arrangement effective from April 1, 1990, without payment being received in cash. 8,29,51,660 equity shares of Rs. 2 each fully paid up were allotted and issued as bonus shares by capitalisation of Capital Redemption Reserve
2.
RESERVES AND SURPLUS As at March 31, 2007 Rs. Crores Capital redemption reserve Share premium account Debenture redemption reserve General reserve Profit and loss account 8.41 62.76 6.67 189.28 251.37 518.49 Additions Rs. Crores 400.00 210.16 610.16 Deductions Rs. Crores 5.17 # 11.49 * 16.66 As at March 31, 2008 Rs. Crores 8.41 62.76 1.50 577.79 461.53 1111.99
# *
Transfer to profit and loss account on redemption. refer note 11 of schedule 13
55
Schedules to the Accounts (Continued)

3. LOAN FUNDS
As at March 31, 2008 Rs. Crores Secured Debentures Loans from banks On cash credit account Others Other Loans Unsecured Deposits Fixed Others Interest accrued and due on deposits Short term loans and advances Banks Others 5.08 29.80 0.64 488.18 523.70 1757.91 Secured
1.
As at March 31, 2007 Rs. Crores 13.33 226.97 554.94 183.14 978.38
3.00 194.05 733.17 303.99 1234.21
8.54 28.94 0.09 454.59 50.00 542.16 1520.54
2.
Debentures: i) Debentures detailed below are secured by English first mortgage on the Companys property at Taluka Kalol, District Gandhinagar, Gujarat and first equitable mortgage/ charge on immovable/ movable properties, both present and future, of the Companys undertakings at Kota, Rajasthan, subject to charges created/ to be created in favour of the Companys bankers on stocks, stores and book debts for securing borrowings for working capital, and shall rank pari-passu in all respects with the security created or to be created in terms of the stipulations of the respective Trust Deeds : a) Nil (2006-2007 15,00,000) 8.5% Secured redeemable non-convertible debentures of Rs.100 each redeemable in three equal annual instalments commencing from November 1, 2005. The third instalment has been paid during the year (Rs. Nil due within a year, 2006-2007 Rs.5.00 crores). b) 5,00,000 (2006-2007 5,00,000) 8.5% Secured redeemable non-convertible debentures of Rs.100 each, redeemable in three equal annual instalments commencing from November 1, 2006. The second instalment has been paid during the year (Rs.1.67 crores due within one year, 2006-07- Rs.1.67 crores) ii) Debentures detailed below are secured by English first mortgage on the Companys property at Taluka Kalol, District Gandhinagar, Gujarat and first equitable mortgage/ charge on immovable/ movable properties both present and future, of the Companys undertaking at District Bharuch, Gujarat (save and except book debts) subject to charges created/ to be created in favour of the Companys bankers on stocks, stores and book debts for securing borrowings for working capital and shall rank pari-passu with existing charges created/ to be created in favour of other first chargeholders: a) Nil (2006-2007 6,00,000) 8.5% Secured redeemable non-convertible debentures of Rs.100 each redeemable in three equal annual instalments commencing from November 1, 2005. The third instalment has been paid during the year (Rs. Nil due within a year, 2006-2007 Rs.2.00 crores). b) Nil (2006-2007 1,00,000) 11% Secured redeemable non-convertible debentures of Rs.100 each, redeemable in three equal annual instalments commencing from November 1, 2005. The third instalment has been paid during the year (Rs. Nil due within a year, 2006-2007 Rs.0.33 crores). c) 4,00,000 (2006-2007 4,00,000) 8.5% Secured redeemable non-convertible debentures of Rs.100 each, redeemable in three equal annual instalments commencing from November 1, 2006. The second instalment has been paid during the year (Rs.1.33 crores due within one year, 2006-2007 Rs.1.33 crores) Short term working capital borrowings from Banks: i) Loans from banks on cash credit account of Rs. 194.05 crores (2006-2007 Rs.226.97 crores) are secured by first charge by way of hypothecation of stocks/stores and book debts of the Company as per terms and conditions of
56
3.
respective Banks. These loans are further secured/to be secured by a third charge by way of mortgage/hypothecation of all the immovable/movable properties (other than current assets) of the Companys undertakings at Kota in Rajasthan and Ajbapur, Rupapur, Loni & Hariawan in Uttar Pradesh. (ii) Short term loan of Rs. 85.27 crores (2006-07 Rs. Nil) from a bank is secured by 90,000 7.95% Fertilizer Companies GOI Special Bonds 2026, by way of Repo transactions. Other loans: (i) Term loans of Rs. 154.13 crores (2006-2007 Rs. 27.33 crores) from banks and term loans of Rs.12.00 crores (2006-2007 Rs.12.00 crores) from others are secured by pari passu first mortgage/ charge, created on immovable and movable assets, both present and future, (save and except book debts), subject to prior charges created/to be created in favour of the Companys bankers on the stocks of raw materials, semi-finished and finished goods and consumable stores for working capital borrowings and a term loan of Rs.20.00 crores (2006-2007 Rs. 20.00 crores) from a bank is secured by way of second mortgage/ charge, created/to be created on immovable and movable fixed assets, both present and future, pertaining to the Companys undertakings at District Bharuch, Gujarat, (Rs 30.80 crores due within a year; 2006-2007 Rs.14.69 crores) (ii) Term loans of Rs. 128.50 crores (2006-2007 Rs. 146.43 crores) from banks and term loans of Rs.18.00 crores (2006-2007 Rs.18 crores) from others are secured by way of first mortgage/charge, created ranking pari-passu on immovable and movable assets, both present and future, (save and except book debts), term loan of Rs.120.00 crores (2006-2007 Rs.130.47 crores) from others are secured by way of first mortgage/charge, created ranking pari-passu on immovable and movable assets, both present and future, subject to charges created or to be created in favour of the Companys bankers on the stocks of raw materials, semi-finished and finished goods and consumable stores for working capital borrowings, and term loans of Rs.50.00 crores (2006-2007 Rs.50.00 crores) from banks are secured by way of second mortgage/ charge, created/to be created on immovable and movable fixed assets, both present and future of the Companys undertakings at Kota, Rajasthan (Rs. 87.87 crores due within a year; 2006-2007 Rs. 20.87 crores). (iii) Term loan of Rs. 3.32 crores (2006-2007 Rs. 5.33 crores) from a bank is secured by way of first mortgage/charge, ranking pari passu, on immovable/movable assets, both present and future, pertaining to the Companys Ajbapur Sugar complex and Rupapur Sugar Complex, Uttar Pradesh, subject to charges created/to be created in favour of Companys bankers on the stocks of raw materials, semi finished goods, finished goods and consumable stores for securing working capital borrowings (Rs. 2 crores due within a year;2006-2007 Rs. 2.00 crore). (iv) Term loan of Rs.115.90 crores (2006-2007 Rs. 118.07 crores) from banks are secured by way of first mortgage/ charge, ranking pari passu, on immovable/movable assets, both present and future and term loan of Rs. 42.29 crores (2006-2007 Rs. 15.67 crores) from others is secured by way of a exclusive second charge on immovable/movable assets (save and except book debts) subject to charges created/to be created in favour of the Companys bankers on the stocks of raw materials, semi finished goods, finished goods and consumable stores for securing working capital borrowings both present and future, pertaining to the Companys Ajbapur Sugar Complex, Uttar Pradesh (Rs. 8.33 crores due within a year;2006-2007 Rs. 8.33 crores) (v) Term loan of Rs. Nil (2006-2007 - Rs. 7.00 crores) from others is secured by way of subservient mortgage/ charge, created/ to be created on 9 MW power plants at Ajbapur Sugar Complex and 6MW power plant at Rupapur Sugar Complex of the Company. (Rs. Nil due within a year; 2006-2007 Rs. 7.00 crores) (vi) Term loan of Rs. 87.50 crores (2006-2007 Rs. 86.98 crores) from a bank is secured by way of first mortgage/charge created/ to be created on immovable/movable assets, both present and future, subject to charges created/to be created in favour of Companys bankers on the stocks of raw materials, semi finished goods, finished goods and consumable stores for securing working capital borrowings, pertaining to the Companys Loni Sugar complex, Uttar Pradesh. (Rs Nil due within a year;2006-2007 Rs .Nil) (vii) Term loan of Rs. 81.73 crores (2006-2007 Rs. 68.07 crores) from a bank & Rs. 26.40 crores (2006-2007 Nil) from others is secured by way of first mortgage/charge created/ to be created on immovable/movable assets, both present and future, subject to charges created/to be created in favour of Companys bankers on the stocks of raw materials, semi finished goods, finished goods and consumable stores for securing working capital borrowings, pertaining to the Companys Hariawan Sugar Complex, Uttar Pradesh. (Rs Nil due within a year; 2006-2007 Rs.Nil) (viii) Term loan of Rs. 35.69 crores (2006-2007 Rs. 32.73 crores) from a bank is secured by way of first mortgage/charge created/ to be created on immovable/movable fixed assets, both present and future pertaining to the Companys Rupapur Sugar Complex, Uttar Pradesh. (Rs. 11.90 crores due within a year; 2006-2007 Rs.Nil) (ix) Term loan of Rs. 56.43 crores (2006-2007 Nil) from a bank is secured by way of residual mortgage/charge created/ to be created on immovable/movable fixed assets, both present and future pertaining to all the four sugar units of the Company, i.e. Ajbapur Sugar Complex, Uttar Pradesh, Rupapur Sugar Complex, Uttar Pradesh, Hariawan Sugar Complex, Uttar Pradesh and Loni Sugar Complex, Uttar Pradesh.(Rs Nil due within a year; 2006-2007 Rs.Nil)
57

4. DEFERRED TAX LIABILITIES AND ASSETS
As at March 31, 2008 Rs. Crores Deferred tax liabilities Depreciation Compensation payable to employees Others 211.30 211.30 Deferred tax assets Provision for gratuity and leave encashment Provision for doubtful debts and advances Others 22.57 3.13 14.40 40.10 Deferred tax liabilities (net) 171.20
As at March 31, 2007 Rs. Crores 186.22 4.84 6.47 197.53 14.09 2.83 10.06 26.98 170.55
5.
FIXED ASSETS
GROSS BLOCK Description As at March 31, 2007 Rs. Crores 74.57 226.13 1758.22 31.92 20.58 Additions Rs. Crores 31.96 64.22 56.51 14.17 4.46 Deductions Rs. Crores 2.18 0.18 2.08 1.21 2.25 As at March 31, 2008 Rs. Crores 104.35 * 290.17 1812.65 $ 44.88 22.79 23.79 8.22 3.99 7.90 14.72 2310.84 2145.61 Up to March 31, 2007 Rs. Crores 18.85 440.52 16.44 9.10 DEPRECIATION For the year Rs. Crores 6.06 103.29 5.56 3.54 Deductions Rs. Crores 0.18 1.58 0.75 1.37 NET BLOCK Up to As at March 31, March 31, 2008 2008 Rs. Crores Rs. Crores 24.73 542.23$ 21.25 11.27 12.46 3.75 1.31 617.00 498.74 270.36 1964.20 104.35 265.44 1270.42 23.63 11.52 11.33 4.47 2.68 1693.84 1646.87 101.62 1748.49 As at March 31, 2007 Rs. Crores 74.57 207.28 1317.70 15.48 11.48
Land Buildings Plant and machinery Furniture and fittings Vehicles Intangibles Technical Know how Brand Software This year Previous year Capital work in progress (including capital advances) * $ # **
23.75 8.22 2.22 2145.61 1421.23
0.04 1.77 173.13 ** 739.10
10.08 3.06 0.69 498.74 416.34
2.38 0.69 0.62 122.14 # 90.84
3.88 8.44
13.67 5.16 1.53
Includes Rs. 1.90 crores (2006-2007 - Rs. 2.19 crores) pertaining to land situated at Hardoi and Hyderabad pending registration in favour of the Company. Includes Rs. 0.16 crores (2006-2007 -Rs. 0.23 crores) in respect of certain plant and machinery retired from active use and held for disposal. Includes Rs.0.01 crores (2006-2007 -Rs. 0.58 crores) transfer to capital work in progress/fixed assets. Includes addition of Rs. 0.05 crores (2006-2007 -Rs. 11 crores) on account of foreign exchange fluctuation (refer note 12 in schedule 13)
58

6. INVESTMENTS
As at March 31, 2008 Rs. Crores Long Term (valued at cost unless there is permanent fall in value thereof) Trade Investments Unquoted 7,95,009 (2006-2007 - 7,95,009) Equity shares of Rs.10 each fully paid up of Bharuch Eco Aqua Infrastructure Limited. 30,00,000 (2006-2007 - 30,00,000) Equity shares of Rs. 10 each fully paid up of Forum I Aviation Limited. Non-trade Investments Government securities Unquoted National savings certificates Investment in Shares, Units, etc. Quoted 83,115 (2006-2007 - 83,115 ) 6.75% Bonds of Rs.100 each fully paid-up of Unit Trust of India. Unquoted 500 (2006-2007 -Nil) 5.5% Bonds of Rs. 10,000 each fully paid-up of Rural Electrification Corporation Limited purchased during the year Investment in Subsidiaries Unquoted 60,01,208 (2006-2007 - 60,01,208) Equity shares of Rs.10 each fully paid-up of DCM Shriram Credit and Investments Limited. 83,51,207 (2006-2007 - 83,51,196)Equity shares of Rs.10 each fully paid-up of DCM Shriram Aqua Foods Limited. 11 Equity shares of Rs. 10 each fully paid-up purchased during the year 29,19,058 (2006-2007 - 29,19,058) Equity shares of Rs.10 each fully paid-up of Shriram Bioseed Genetics India Limited. 50,000 (2006-2007 - Nil) Equity shares of Rs. 10 each fully paid up of DCM Shriram Energy and Infrastructure Ltd. allotted during the year 17,33,207 (2006-2007 - 17,33,200) Equity shares of Rs. 10 each fully paid-up of DSCL Energy Services Company Limited. 7 Equity shares of Rs. 10 each fully paid-up purchased during the year
0.79 3.00
0.79 3.00
0.01
0.01
0.83 0.50
0.83 -
0.22 4.22
0.22 4.22
8.78
8.78
0.05 1.73
1.73
59

6. INVESTMENTS (Continued)
As at March 31, 2008 Rs. Crores 11,74,551 (2006-2007 - 11,74,551) Equity shares of US $ 1 each fully paid-up of Bioseeds Limited. 50,000 (2006-2007 - Nil) Equity shares of Rs. 10 each fully paid up of Hariyali Rural Ventures Limited allotted during the year 40,50,000 (2006-07- Nil ) Equity shares of Rs. 10 each fully paid up of Shriram Bioseed Ventures Limited(formerly Impact Builders Limited) purchased/allotted during the year Current investments (valued at lower of cost or net realisable value) Non-trade Investments Government securities Unquoted 30,000 (2006-2007 - Nil) 8.3% Fertiliser companies GOI special bond 2023 (fertiliser bonds) of Rs. 10,000 each fully paid-up (40000 issued during the year out of which 10000 sold during the year) 1,23,000 (2006-2007 - Nil) 7.95% Fertiliser companies GOI special bond 2026 (fertiliser bonds) of Rs.10,000 each fully paid-up issued during the year.# TOTAL: Aggregate book value - Quoted - Unquoted Aggregate market value - Quoted # Refer also note 2 (ii) of schedule 3 14.41 0.05 20.05
As at March 31, 2007 Rs. Crores 14.41 -
29.31
114.17 198.12 0.83 197.29 0.84
33.99 0.83 33.16 0.83
60

7. CURRENT ASSETS, LOANS AND ADVANCES
As at March 31, 2008 Rs. Crores Current Assets Inventories Stores and spares * Stock-in-trade ** Raw materials Process Stock Finished goods Sundry debtors Debts over six months Secured - considered Unsecured - considered - considered Other debts Secured - considered Unsecured - considered
70.72 70.55 10.34 631.45 783.06 good good doubtful good good 0.04 28.62 8.55 3.85 206.83 247.89 8.55 239.34 3.88 5.98 35.73 0.97 46.56
67.07 47.91 14.68 428.47 558.13
0.01 124.49 7.99 1.01 376.69 510.19 7.99 502.20 3.10 3.56 45.62 0.63 52.91
Less: Provision for doubtful debts Cash and bank balances Cash on hand Cheques in hand With scheduled banks on Current account Deposit account # Loans and Advances Unsecured and considered good unless otherwise stated $ Advances recoverable in cash or in kind or for value to be received Considered good Considered doubtful Less : Provision for doubtful advances Deposits Balances with customs, excise etc. Tax payments (net of provision for current tax and FBT)@ MAT credit entitlement Interest accrued on investments and deposits
201.39 0.63 0.63 201.39 21.07 67.30 40.28 2.33 332.37 1401.33
107.04 0.38 0.38 107.04 18.78 61.01 21.82 11.76 0.37 220.78 1334.02
* Stores and spares are valued at cost or under. ** Stock-in-trade is valued at cost or net realisable value, whichever is lower. # Includes Rs. 0.43 crore (2006-2007 -Rs. 0.43 crore) provided as margin for bank guarantees and letter of credit $ Refer note 7 of Schedule 13. @ includes Rs. 11.76 crores (2006-2007 -Rs. Nil) MAT credit adjusted during the year

8. CURRENT LIABILITIES AND PROVISIONS
As at March 31, 2008 Rs. Crores Current Liabilities Sundry creditors # Total outstanding dues of micro and small enterprise* Total outstanding dues of creditors other than micro and small enterprise Ex-gratia payable under voluntary retirement schemes ** Interest accrued but not due on loans Provisions Gratuity Compensated absences Provision for contingencies Proposed dividends Corporate dividend tax
0.17 391.20 1.39 10.19 402.95
0.22 800.75 1.58 9.62 812.17 31.43 10.12 12.09 6.64 1.13 61.41 873.58
40.54 25.86 12.09 6.64 1.13 86.26 489.21 # Sundry creditors do not include any amounts outstanding as on March 31, 2008 which are required to be credited to Investor Education and Protection Fund. * Refer note 6 of schedule 13 ** Rs. 0.18 crore (2006-2007 - Rs.0.19 crore) due within a year. 9. OTHER INCOME Year ended March 31, 2008 Rs. Crores Dividend income (gross) from: - non-trade, current investments Profit on sale of non- trade long term investments Profit on sale of fixed assets Interest income # Rent Liabilities/provisions no longer required written back Miscellaneous 1.67 6.04 3.07 2.22 21.79 34.79 # Income-tax deducted at source -Rs.0.66 crore (2006-2007 - Rs.0.47 crore)
Year ended March 31, 2007 Rs. Crores 1.60 3.06 8.21 4.35 1.27 3.00 12.22 33.71
62

10. MANUFACTURING AND OTHER EXPENSES
Year ended March 31, 2008 Rs. Crores Raw materials consumed Stores, spares and components Power, fuel, etc. Repairs Buildings Plant and machinery Salaries, wages, bonus, gratuity, commission, etc. Provident and other funds Welfare Rent Insurance Donation Rates and taxes Auditors remuneration Audit fee Tax audit Other services Out-of-pocket expenses Directors fees Bad debts and advances written off Provision for doubtful debts and advances Freight and transport Commission to selling agents Brokerage, discounts (other than trade discounts), etc. Selling expenses Exchange fluctuation Loss on sale of non-trade current investments Loss on sale/write off of fixed assets Increase/(decrease) in excise duty on finished goods Provisions for losses on derivative transactions Miscellaneous expenses 1183.59 141.37 358.35 3.69 25.67 168.07 15.58 8.98 9.63 6.62 2.89 1.52 0.48 0.02 0.42 0.04 0.07 0.42 1.05 50.70 1.85 1.55 20.54 13.19 0.15 0.13 10.57 2.42 73.28 2102.84 Less:- Cost of own manufactured goods capitalised (Increase)/decrease in stocks of finished goods and process stocks Closing stocks Less : Stock produced during trial run Adjusted Closing Stock Less : Opening stocks (0.84) 2102.00 641.79 641.79 443.15 (198.64) 1903.36 11. EXCEPTIONAL ITEMS (NET) Year ended March 31, 2008 Rs. Crores Income from sale of SBM land redevelopment project Provision for diminution in the value of non-trade current investments-fertiliser bonds 779.64 (9.52) 770.12
Year ended March 31, 2007 Rs. Crores 1046.71 130.21 320.05 4.14 24.08 127.18 12.87 8.06 5.98 6.79 1.09 1.62 0.45 0.06 0.43 0.02 0.06 0.05 1.88 74.34 0.87 2.80 23.20 8.62 11.44 67.57 1880.57 (5.76) 1874.81 443.15 54.83 388.32 350.85 (37.47) 1837.34
Year ended March 31, 2007 Rs. Crores -
63

12. CURRENT/DEFERRED TAX
Year ended March 31, 2008 Rs. Crores - Current tax Less :- MAT credit entitlement - Deferred tax - Fringe benefit tax * Refer note 21 in Schedule 13 102.77 102.77 6.58 2.43 111.78
Year ended March 31, 2007 Rs. Crores 7.27 * (10.27) (3.00) 23.55 * 2.25 22.80
64

13. NOTES TO THE ACCOUNTS
1. Significant accounting policies (i) Accounting convention The financial statements are prepared under the historical cost convention. These statements have been prepared in accordance with applicable mandatory Accounting Standards and relevant presentational requirements of the Companies Act, 1956. (ii) Fixed assets and depreciation Fixed assets are stated at cost less accumulated depreciation. Cost of acquisition or construction is inclusive of freight, duties, taxes and incidental expenses and interest on loans attributable to the acquisition of assets up to the date of commissioning of assets. Capital subsidy received against specific assets is reduced from the value of relevant fixed assets. The Company is following the straight line method of depreciation in respect of buildings, plant and machinery and written down value method in respect of other assets. Depreciation is provided at the rates as specified in schedule XIV to the Companies Act, 1956, except in the case of following assets where depreciation is provided at rates indicated against each asset: Depreciation Rate - catalyst tubes 12.50% - cell units 10.00% - certain other plant and machinery items 16.67% - office and other equipments 25.00% Depreciation is calculated on a pro-rata basis from the date of additions, except in the case of assets costing upto Rs.5000 each, where each such asset is fully depreciated in the year of purchase. Depreciation (amortisation) on intangibles is provided on straight line method as follows: - Technical know-how is amortised over its estimated economic useful life of 10 years. - Brand is amortised over a period of 10 years. - Software is amortised over a period of 5 years. On assets sold, discarded, etc. during the year, depreciation is provided upto the date of sale/ discard. (iii) Foreign currency transactions and derivatives Transactions in foreign currency are recorded on initial recognition at the exchange rate prevailing at the time of transaction. Monetary items (i.e. receivables, payables, loans etc.) denominated in foreign currency are reported using the closing exchange rate on each balance sheet date. The exchange differences arising on the settlement of monetary items or on reporting these items at rates different from rates at which these were initially recorded/reported in previous financial statements are recognized as income/expense in the period in which they arise except that such exchange differences which relate to fixed assets acquired upto March 31, 2004 are capitalised in the carrying amount of these assets and those exchange differences which relate to fixed assets acquired from outside India during April 1, 2004 to March 31, 2007 have been capitalised till March 31, 2007. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts, is amortised as income or expense over the life of the contract. Further exchange difference on such contracts i.e. difference between the exchange rate at the reporting/settlement date and the exchange rate on the date of inception of contract/the last reporting date, is recognized as income/ expense for the period except that such exchange differences which relate to fixed assets acquired upto March 31, 2004 are capitalised in the carrying amount of these assets and those exchange differences which relate to fixed assets acquired from outside India during April 1, 2004 to March 31, 2007 have been capitalised till March 31, 2007.
(iv) Inventories Stores and spares are valued at cost or under. Stock-in-trade is valued at cost or net realisable value, whichever is lower. The bases of determining cost (which also includes taxes and duties wherever applicable) for different categories of inventory are as follows:Stores, spares and raw materials - Weighted average rate. Stock-in-trade Process stocks and finished goods - Direct cost plus appropriate share of overheads after giving credit for other income and excluding certain expenses like exgratia and gratuity. By-products - At estimated realisable value (v) Revenue recognition a) Revenue in respect of sale of products is recognised at the point of despatch to customer. b) Under the retention pricing scheme, the Government of India reimburses to the fertiliser industry, the difference between the retention price based on the cost of production and selling price (as realised from the farmers) as fixed by the Government from time to time, in the form of subsidy. The effect of variation in input costs/expenses on retention price yet to be notified is accounted for by the Company as income for the year based on its assessment of ultimate collection with reasonable degree of certainty at the time of accrual. c) The Company accrues concession/subsidy on traded Phosphatic and Potassic fertilisers pending notification by Government of India, based on its assessment of ultimate collection thereof with reasonable degree of certainty. (vi) Investments Long term investments are stated at cost unless there is a permanent fall in value thereof. Current investments are stated at cost or net realisable value whichever is less. (vii) Employee benefits Companys contributions paid/payable during the year to provident fund, superannuation fund and employees state insurance corporation are recognised in the profit and loss account. For the Provident Fund Trust administered by the Company, the Company is liable to meet the shortfall, if any, in payment of interest at the rates declared by the Central Government, such shortfall is recognised in the year of actual payment. Provisions for gratuity and compensated absences are determined on an acturial basis at the end of the year are charged to revenue each year. (viii) Research and development The revenue expenditure on research and development is charged as an expense in the year in which it is incurred. Capital expenditure is included in fixed assets. (ix) Income-tax The Income-tax liability is provided in accordance with the provisions of the Income-tax Act, 1961. Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.
66
DCM SHRIRAM CONSOLIDATED LIMITED This Year (Rs. Crores) Previous Year (Rs. Crores)
2. (i) Contingent liabilities not provided for: Claims* (excluding claims by employees where amount not ascertainable) not acknowledged as debts: Sales tax matters Excise matters Additional premium on land Others Total
1.33 2.30 8.11 7.08 18.82
1.40 2.27 8.11 7.55 19.33
* all the above matters are subject to legal proceedings in the ordinary course of business. In the opinion of management the legal proceedings, when ultimately concluded, will not have a material effect on results of operations or financial position of the Company. (ii) Capital commitments (net of advances) 94.00 73.99 (iii) Guarantees given to financial institutions, banks and other parties in respect of loans availed by subsidiaries and other parties: Amount guaranteed 1.85 1.85 Amount of loans outstanding 0.52 0.48 3. In accordance with past practice, the Company has taken revenue credits aggregating Rs. 14.21 crores (20062007 - Rs. 109.80 crores) for urea subsidy claims , which are pending notification/ final acceptance by Fertiliser Industry Coordination Committee (FICC), Government of India, in pursuance of the Retention Price Scheme administered for nitrogenous fertilisers. Similarly, revenue credits aggregating Rs. 0.27 crore (2006-07- Rs. Nil) for subsidy claims relating to Di-Ammonium Phosphate and Murite of Potash have been taken which are pending notification of final rates of concession/subsidy by the Government of India, Ministry of Chemicals and Fertilisers. Necessary adjustment to revenue credits so accrued will be made on issuance of notification by FICC/Government of India, Ministry of Chemicals and Fertilisers or final settlement thereof. 4. Segment reporting A. Business segments: Based on the guiding principles given in Accounting Standard AS-17 Segment Reporting issued by the Institute of Chartered Accountants of India, the Companys business segments include: Fertilisers (manufacturing of urea), Plastics (manufacturing of poly-vinyl chloride and carbide), Chemicals (manufacturing of chlor alkali products), Agri inputs -Trading (trading of di-ammonium phosphate, muriate of potash, super phosphate, other fertilisers, seeds and pesticides), Sugar (manufacturing of sugar products and co-generation of Power), Cement (manufacturing of cement), Hariyali Kisaan Bazaar (Rural retail and agri businesses), Others (UPVC window systems, textiles, plaster of paris and compounds). B. Geographical segments: Since the Companys activities/ operations are primarily within the country and considering the nature of products/ services it deals in, the risks and returns are same and as such there is only one geographical segment. C. Segment accounting policies: In addition to the significant accounting policies applicable to the business segments as set out in note 1 above, the accounting policies in relation to segment accounting are as under:
67
a) Segment revenue and expenses: Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments. b) Segment assets and liabilities: Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions, which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include deferred income taxes. While most of the assets/ liabilities can be directly attributed to individual segment, the carrying amount of certain assets/ liabilities pertaining to two or more segments are allocated to the segments on a reasonable basis. c) Inter segment sales: Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation.
D. Information about business segments:
Rs. Crores
PARTICULARS Fertiliser Plastics Chemicals Agri Inputs- Trading This Previous Year Year Sugar Cement Hariyali Kisaan Bazaar This Previous Year Year Others Elimination Total
This Previous Year Year 1. REVENUE External sales Inter segment sales Total revenue 2. RESULTS Segment results Unallocated expenses (net of income) Operating profit Interest expense Profit before tax and exceptional items Profit on sale of SBM land redevelopment project Provision for diminution in value of Fertiliser bonds Profit before tax Provision for taxation Net profit 3. OTHER INFORMATION A. ASSETS Segment assets Unallocated assets Total assets B. LIABILITIES Segment liabilities Share capital and reserves Secured and unsecured loans Unallocated liabilities Total liabilities C. OTHERS Capital expenditure Depreciation Non cash expenses other than depreciation
This Previous Year Year
703.17 647.32 374.97 349.91 374.68 395.38 156.23 708.25 502.22 373.29 139.55 121.05 217.98 115.48 216.79 161.48 0.06 0.38 46.15 36.52 16.91 12.98 1.98 0.62 0.27 0.41 0.04 3.09 1.85 703.23 647.70 421.12 386.43 391.59 408.36 158.21 708.87 502.49 373.70 139.59 121.05 221.07 117.33 216.79 161.48
2685.59 2872.16 68.50 68.50 52.76 52.76 2685.59 2872.16
19.69
11.46
67.58
63.89
81.39 117.84
7.27 (17.61)
(4.99)
3.76
27.63
27.75 (29.64) (12.18) (17.48) (11.77)
151.45 183.14 54.07 37.19 97.38 145.95 84.73 12.65 77.34 68.61
19.69
11.46
67.58
63.89
81.39 117.84
7.27 (17.61)
(4.99)
3.76
27.63
27.75 (29.64) (12.18) (17.48) (11.77)
779.64 9.52 782.77 111.78 670.99
68.61 22.80 45.81
301.11 454.24 294.41 293.63 614.85 397.63
87.11 192.39 1394.76 1262.36
36.09
34.80 305.85 130.13 178.72 233.48
3212.90 2998.66 350.75 117.84 3563.65 3116.50
301.11 454.24 294.41 293.63 614.85 397.63
87.11 192.39 1394.76 1262.36
36.09
34.80 305.85 130.13 178.72 233.48
94.94 116.63
32.68
28.20
96.22
17.28
28.11 377.78 140.32 247.09
10.30
8.39
25.38
7.23
20.36
18.79
448.31 1145.33 1757.91 212.10
821.39 551.83 1520.54 222.74
94.94 116.63
32.68
28.20
96.22
17.28
28.11 377.78 140.32 247.09
10.30
8.39
25.38
7.23
20.36
18.79
3563.65 3116.50
5.11 13.06 0.30
55.15 11.38
8.47 17.25 0.06
12.26 225.30 16.49 30.37 0.07 0.24
48.64 28.24 1.00
0.01 0.05 0.03
0.12 0.05 0.22
20.30 391.90 41.76 20.04 0.22
1.98 2.96
4.10 2.79
98.85 5.06
67.34 1.90
17.66 9.51 0.62
18.96 7.70 0.20
68

5. Earnings per share:
This year
Previous year
Profit after tax and exceptional items (Rs. Crores) Exceptional items, net of taxes of Rs. 105.62 crores (Rs. Crores) Profit after tax but before exceptional items (Rs. Crores) Weighted average number of equity shares outstanding Basic and diluted earnings per share in rupees (face value Rs.2 per share) : - Before exceptional items - After exceptional items
670.99 664.50 6.49 16,59,03,320
45.81 45.81 16,59,03,320
0.39 40.44
2.76 2.76
6. Based on the information available with the Company, the balance due to Micro, Small and Medium Enterprise as defined under the The Micro, Small and Medium Enterprises Development Act, 2006 is Rs. 0.17 crore (2006-07 -Rs. 0.22 crore). Further no interest during the year has been paid or is payable under the terms of the The Micro, Small and Medium Enterprises Development Act, 2006. 7. Loans and advances include following amounts due from subsidiaries:
Amount outstanding as at year end Name of the party 1. 2. 3. 4. 5. 6. DCM Shriram Credit & Investments Limited Shriram Bioseed Genetics India Limited DCM Shriram Aqua Foods Limited DSCL Energy Services Company Limited DCM Shriram Infrastructure Limited Shriram Bioseed Ventures Limited Total This year (Rs. Crores) 7.33 12.04 0.03 22.60 34.56 76.56 Previous year (Rs. Crores) 16.01 4.10 0.08 0.55 20.74 Maximum amount outstanding during the year This year (Rs. Crores) 36.06 19.77 0.09 0.55 22.60 34.70 Previous year (Rs. Crores) 39.50 10.15 0.08 1.05 -
8. Amount of borrowing costs capitalised to fixed assets during the year Rs. 5.24 crores (2006-2007 - Rs. 13.97 crores) 9. Details of Pre-operative expenses pending allocation included under Capital work in progress in Schedule 5 is as under:
Particulars Raw materials consumed Stores, spares and components Power, fuel etc. Repairs: Plant and machinery Salaries, wages, bonus, gratuity, commission etc. Provident and other funds Welfare Rent Insurance Rates and taxes Freight and transport Exchange fluctuation Increase/(decrease) in excise duty on finished goods Miscellaneous expenses Interest Depreciation Less: Other income Inventory produced during trial run - Process stock - Finished goods Add: Brought forward from the previous year Less: Capitalised during the year Transferred to capital work-in-progress This Year (Rs. Crores) 0.06 3.11 0.17 0.03 0.02 0.58 2.36 8.32 3.39 5.24 0.01 23.29 23.29 44.61 46.10 21.80 Previous Year (Rs. Crores) 50.80 3.83 3.95 1.13 8.69 0.65 0.71 0.06 0.33 0.07 0.10 8.62 3.57 7.95 12.83 0.59 103.88 0.26 3.37 51.46 48.79 54.11 58.29 44.61
69
10. Related party disclosures under Accounting Standard AS-18 Related Party Disclosures issued by the Institute of Chartered Accountants of India: A. Name of related party and nature of related party relationship Subsidiaries: DCM Shriram Credit and Investments Limited, DCM Shriram Aqua Foods Limited, DSCL Energy Services Company Limited, DCM Shriram International Limited, DCM Shriram Infrastructure Limited, Bioseed Research Philippines, Inc., Bioseed Research Vietnam, Bioseed Genetics Vietnam, Bioseed Research India Private Limited, Bioseeds Limited, Shriram Bioseed Genetics India Limited, Shriram Bioseed (Thailand) Limited, Anant Thermal Energy Limited, Shriram Bioseeds Ventures Limited, DCM Shriram Energy and Infrastructure Limited, Hariyali Finance Foundation, Hariyali Rural Ventures Limited, Shriram Bioseed Limited, Affee Investment Corp., Zeus Investments Limited, Bioseed Genetics International Inc. Key Managerial Persons, their relatives and HUFs: Mr. Ajay S. Shriram, Mr. Vikram S. Shriram, Mr. Rajiv Sinha, Mr. Ajit S. Shriram, Mr. Aditya A. Shriram (relative of Mr. Ajay S. Shriram), Mrs. Divya Sinha (relative of Mr. Rajiv Sinha), M/s. Ajay S. Shriram (HUF), M/s. Vikram S. Shriram (HUF), Mr. N.J. Singh B. Transactions with related parties referred to in note 10 A above.
DCM Shriram Credit & Investment Ltd.
TYPE OF TRANSACTIONS This year Previous year
Rs. Crores
DCM Shriram Infrastructure Ltd
This year Previous year
DSCL Energy Services Co. Ltd.

Shriram Bioseed Genetics India Ltd.

DCM Shriram Aqua Foods Ltd.

Shriram Bioseed Ventures Ltd

Key managerial personnel and their relatives

Total
This year
Previous year
Interest recovered Expenses recovered Purchases of finished goods Interest paid on leased assets ($ Rs. 2585) Rent paid Remuneration paid Security deposits given Security deposits received back Loans and advances (net) Consultancy paid Expenses paid Investment in subsidiary company Asset sold Assets purchased Balance outstanding as at the year end Security deposits/indemnity Fixed deposits Loans and advances Amount Payable
0.91
1.55
0.01 2.38
0.03 1.93
0.89 4.33 22.21 1.27 10.13 0.31
1.81 7.02 22.21
1.58 3.20 10.13 $
## 2.10 1.08 0.05 1.00 0.07 2.77 0.07 1.00 0.07 50.59 0.70 0.03 20.04 0.03 20.04 2.10
1.08 0.05 2.77 0.07 4.02 0.37 0.07
(9.42)
3.76
2.95 0.70
0.24 0.37
(0.05)
0.02
22.55
34.56
0.04
0.03
0.01 1.77 1.77
0.01
8.77 0.07 7.33 16.01 0.05 0.55 12.04 4.10 0.03 0.08 22.60 34.56
7.84 0.07
8.77 0.07 76.56 0.05
7.84 0.07 20.74
# Rs.1,680 ## Rs.905 Note: Details of remuneration to whole time directors are given in note 14.
70
11. Employee Benefits The Company has during the year adopted Accounting Standard 15 (revised 2005) Employee Benefits. In accordance with the revised accounting standard, the transitional liability, net of deferred tax, amounting to Rs. 11.49 crores has been reduced from opening balance of general reserve. The Company has classified the various benefits provided to employees as under:i) Defined contribution plans a) Superannuation fund b) Provident fund c) Employees state insurance corporation During the year, the Company has recognized the following amounts in the profit and loss account: Rs. crores - Employers contribution to provident fund 8.51 - Employers contribution to superannuation fund 7.06 - Employees state insurance corporation 0.21 ii) Defined benefit plans a) Gratuity b) Compensated absences Earned leave/ sick leave In accordance with Accounting Standard 15 (revised 2005), acturial valuation was done in respect of the aforesaid defined benefit plans based on the following assumptionsThis Year (Rs. crores) Compensated absences Earned leave Sick leave (Unfunded) (Unfunded) 8% 8% 7% 7% LIC (1994-96) LIC (1994-96) duly modified duly modified 58/60 years 58/60 years 3% 2% 1% 2.90 1.00 0.15 4.05 3% 2% 1% 0.86 0.79 (0.45) 1.20
Discount rate (per annum) Future salary increase Expected rate of return on plan assets In service mortality Retirement age Withdrawal rates: - upto 30 years - upto 44 years - above 44 years I. Expense recognised in profit and loss account Current service cost Interest cost Expected return on plan assets Net actuarial( gain) / loss recognised in the year Total expense II. Net asset/(liability) recognised in the balance sheet as at March 31, 2008 Present value of Defined benefit obligation Fair value of plan assets Funded status [surplus/(deficit)] Net asset/(liability) as at March 31, 2008 III. Change in the present value of obligation during the year Present value of obligation as at the beginning of the year Interest cost Current service cost Benefits paid Actuarial (gains) / losses on obligation Present value of obligation as at the end of the year
Gratuity (Unfunded) 8% 7% LIC (1994-96) duly modified 58/60 years 3% 2% 1% 2.57 2.93 2.51 8.01
40.54 (40.54) (40.54) 36.60 2.93 2.57 (4.07) 2.51 40.54
14.83 (14.83) (14.83) 12.54 1.00 2.90 (1.76) 0.15 14.83
11.03 (11.03) (11.03) 9.83 0.79 0.86 (0.45) 11.03

71
12. During the year, as required by the Accounting Standard-11 The effect of changes in foreign exchange rates the exchange gain on forex loans taken for the purpose of acquiring fixed assets from outside India has been credited to profit and loss account as against the policy hitherto followed of adjusting such gains in carrying amount of concerned fixed assets as per the provisions of Schedule VI- Part I of the Companies Act, 1956. Due to this change, profit before tax for the year and fixed assets are higher by Rs. 0.22 crores. 13. Excise duty on sales has been deducted from gross sales on the face of profit and loss account. Increase/ (decrease) in excise duty on finished goods has been shown under the head Manufacturing and other expenses in schedule 10. 14. Managerial remuneration This year (Rs. Crores) 1.95 0.53 1.34 3.82
Salaries and allowances Contribution to provident and other funds Perquisites Commission Total
Previous year (Rs. Crores) 1.69 0.45 1.02 2.33 5.49
Provision for incremental gratuity liability and leave encashment for the current year in respect of directors has not been considered above, since the provision is based on an actuarial basis for the Company as a whole. Computation of net profit in accordance with section 198 of the Companies Act, 1956 (Act) for the current year has not been given as in view of inadequacy of profits, remuneration has been paid in accordance with Central Governments approval/Schedule XIII to the Act, as applicable. Previous Year (Rs. Crores) 68.61 5.49 0.06 74.16 3.06 8.18 62.92 6.29 5.11 0.63 0.38
Profit for the year before tax, per profit and loss account Add: Managerial remuneration including commission Directors sitting fees Less: (i) Profit on sale of non trade long term investments (ii) Profit on sale of land Net profit in accordance with section 198 of the Companies Act, 1956 Maximum remuneration to managing directors @ 10% of the net profit Restricted to Maximum remuneration @ 1% of net profit to non-working directors Restricted to
72
15. Current Investments purchased and sold during the year are as follows: Current investment (Mutual Funds units) purchased and sold during the year 2007-08:
S. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Name of the Fund Face value (Rs.) 1000 1000 10 10 10 10 10 1000 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 1000 10 10 10 10 10 Purchased Units* Sold units* Nos. Amount Nos. (Crores) (Rs. Crores) (Crores) 0.25 258.53 0.25 0.03 29.85 0.03 8.27 82.76 8.27 4.99 54.79 4.99 11.97 119.72 11.97 0.17 330.61 0.17 10.36 108.62 10.36 0.38 377.57 0.38 25.86 261.25 25.86 68.65 687.88 68.65 2.40 24.04 2.40 3.34 33.42 3.34 9.93 99.66 9.93 8.57 86.03 8.57 102.10 1,021.02 102.10 0.99 10.00 0.99 38.04 200.42 38.04 0.65 6.60 0.65 1.78 21.73 1.78 38.61 386.32 38.61 1.00 10.04 1.00 13.03 130.45 13.03 10.86 133.20 10.86 3.05 32.48 3.05 0.13 131.43 0.13 14.22 142.62 14.22 3.01 30.06 3.01 14.34 143.48 14.34 10.36 1.50 10.36 3.93 65.88 3.93 411.27 5,021.96 411.27
UTI Liquid Cash Plan Institutional - Daily Income Option AIG India Liquid Fund Super Institutional - Daily Dividend Plan JPLDI - JP Morgan India Liquid Fund - Daily Dividend - Reinvestment LICMF Liquid Fund Dividend Plan Lotus India Liquid Fund- Super Institutional - Daily Dividend TATA Liquid Super High Investment Fund - Daily Dividend - Reinvestment Principal Floating Rate Fund - Daily Dividend - Reinvestment Tempelton India Treasury Management Account - Daily Dividend -Reinvestment DWS Insta Cash Plus Fund - Daily Dividend - Reinvestment Birla Cash Plus - Daily Dividend -Reinvestment HSBC Cash Fund - Daily Dividend - Reinvestment Fidelity Cash Fund - Daily Dividend - Reinvestment SBI Premier Liquid Fund -Institutional -Daily Dividend -Reinvestment SBI Premier Liquid Fund -Super Institutional - Daily Dividend - Reinvestment ICICI Prudential Liquid Plan Institutional Plan- Daily Dividend -Reinvestment Relaince Floating Rate Fund - Daily Dividend - Reinvestment Reliance Liquidity Fund - Daily Dividend - Reinvestment Sundaram BNP Pariba - Daily Dividend - Reinvestment Kotak Liquid (Institutional Premium)- Daily Dividend - Reinvestment ING VYSYA MF - Daily Dividend - Reinvestment ING Liquid Plus Fund -Institutional - Daily Dividend JM Financial Mutual Fund - Daily Dividend - Reinvestment HDFC Liquid Fund Premium Plan - Dividend - Daily Reinvestment HDFC Cash Management Fund- Saving Plan - Daily Dividend -Reinvestment DSP Merrill Lynch Liquidity Fund - Institutional - Daily Dividend DBS Chola Liquid Institutional - Daily Dividend - Reinvestment ABN AMRO Money Plus Institutional Plan Daily Dividend Birla Sun Life Cash Manager - Daily Dividend - Reinvestment Principal Liquid Option SBI Magnum Insta Cash Fund Total * include dividend units
16. There are no disputed dues of wealth tax, customs duty and cess matters. The details of disputed Excise duty, Sales tax and Income- tax dues as on March 31, 2008 are as follows: Amount* Amount paid Period to which the (Rs. Crores) under protest amount relates (Rs. Crores) Central Excise Law Excise duty Appellate authority up 2.16 - 1995-96, 2001-02, 2003-04, to commissioners level 2005-06, 2006-07. Central Excise and 0.11 0.06 1997-98 Service Tax Appellate Tribunal Sales Tax Laws Sales tax Appellate authority up 2.57 0.80 1983-84, 1994-95, to commissioners level 1995-96 to 2000-01 Sales Tax Tribunal 1.51 - 1990-1991, 1991-92, 1992-93,1995-96 Income Tax Act, 1961 Income tax Commissioner (Appeal) 49.79 49.79 2002-03, 2003-04, 2004-05 *amount as per demand orders including interest and penalty wherever quantified in the Order. The following matters, which have been excluded from the table above, have been decided in favour of the Company but the department has preferred appeals at higher levels. The details are given below :
Nature of the statute Income Tax Act, 1961
Nature of the statute
Nature of the dues
Forum where pending
Nature of the dues Income tax
Forum where pending High Court
Amount (Rs. Crores) 9.85
Period to which the amount relates 1996-97,1997-98, 1998-99

73
17. Provision for contingencies aggregating to Rs. 12.09 crores (2006-2007 - Rs. 12.09 crores) in Schedule 8 represents the maximum possible exposure on ultimate settlement of issues relating to reconstruction arrangement of the companies. 18. Research and development expenses included under relevant heads in the profit and loss account Rs. 1.54 crores (2006-2007 - Rs. 1.83 crores). 19. Category wise quantitative data about Derivative Instruments:
Nature of Derivative Number of deals This Year US Dollar Interest rate swap JPY Interest rate swap Overnight Index swap Currency swap 5 1 Previous Year 4 2 3 1 Hedging Hedging Purpose This Year Previous Year Hedging Hedging Hedging Conversion of Indian Rupee in to USD Amount in foreign currency (in Crores) This Year USD 3.1 Previous Year USD 2.30 JPY 114.33 USD 0.57 Amout in Rs. Crores This Year 124.00 25.00 Previous Year 100.03 42.07 75.00 25.00
Principal swap
Conversion of Indian Rupee denominated Principal into USD Conversion of Indian Rupee denominated Principal into CHF Conversion of Indian Rupee denominated coupons into USD coupons Hedging USD 0.5
USD 0.50
21.75
Principal swap
CHF 0.70
25.00
Coupon swap
Conversion of Indian Rupee denominated coupons into USD coupons
USD 0.41
20.00
17.74
Options
Hedging
USD 0.50
USD 0.50
20.00
21.75
Foreign Currency exposures that are not hedged by derivative instruments or otherwise are as follows:
Particulars
This year Amount in foreign currency (in Crores) Amount in Rs. Crores 90.15 6.78 0.36 0.65 3.39 0.06 0.31
Previous Year Amount in foreign currency (in Crores) USD 2.22 USD 1.12 EURO 0.00035 JPY 1.13 USD 0.0120 EURO 0.00032 Amount in Rs. Crores 96.70 49.00 0.02 0.42 0.53 0.02
Loans Current liabilities Current Assets
USD 2.25 USD 0.17 EURO 0.006 JPY 1.62 USD 0.08 GBP 0.001 EURO 0.005
20. The Company has accounted for cane purchases for sugar season 2007-08 at Rs. 110 per quintal, the rate fixed by the Honble Allahabad High Court (Lucknow Bench) for all sugar factories in the State of Uttar Pradesh for paying the cost of sugarcane to cane growers as an interim measure, against the price of Rs. 125 per quintal fixed by the Uttar Pradesh State Government. The necessary adjustments will be made in accordance with subsequent orders of the Honble court in the matter. 21. Mat Credit entitlement and deferred tax charge for the year includes Rs. Nil (2006-07 - 3.00 crores) relating to earlier year. 22. Previous years figures have been recast, wherever necessary. 23. Schedules 1 to 13 and the statement of additional information form an integral part of the financial statements.

Statement of Additional Information
1. Particulars of capacity and production Capacity Description Ammonia Urea Calcium carbide PVC resins Caustic soda Chlorine Hydrochloric acid(100%) Compressed Hydrogen Stable Bleaching Powder Cement Yarn Sugar UPVC Windows PVC Compounds Unit M.T. per year M.T. per year M.T. per year M.T. per year M.T. per year M.T. per year M.T. per year M.T. per year M.T. per year M.T. per year Spindles Nos. M.T. per day*** Nos. per year M.T. per year Licensed* 2007-08 2006-07 Installed 2007-08 198000 330000 112000 70000 176250 116750 73250 1565 13200 400000 12856 33000 258000 23400 2006-07 198000 330000 112000 70000 176250 116750 73250 1565 13200 400000 8440 33000 183000 23400
Production Unit 2007-08 M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. Nos. M.T. 379000 16824** 67380 167139 96491 50830 704 8530 368970 2373 366692 124156 18543 2006-07 361156 19452** 64758 172754 102610 50326 752 8921 369250 1707 291229$ 98238 15153
*Delicensed/Not applicable ** Production of Marketable Calcium carbide only *** Crushing of sugarcane $ Excludes 30653 M.T. production of sugar, being trial-run production 2. Particulars of stocks and sales Stocks Description Urea Rs. PVC resins Rs. Caustic soda Rs. Chlorine Rs. Hydrochloric acid(100%) Rs. Sodium Hypochlorite(10%) * Rs. Compressed Hydrogen Rs. Stable Bleaching Powder Rs. Marketable Calcium carbide Rs. D.A.P. Rs. M.O.P. Rs. Super Phosphate Rs. Zinc Sulphate Rs. Traded Urea Rs. P.O.P * Rs.
Unit M.T. Crores M.T. Crores M.T. Crores M.T. Crores M.T. Crores M.T. Crores M.T. Crores M.T. Crores M.T. Crores M.T. Crores M.T. Crores M.T. Crores M.T. Crores M.T. Crores M.T. Crores
Opening 2007-08 63 0.10 76 0.31 854 1.10 333 0.03 114 0.04 34 26 0.02 3621 3.13 2049 1.44 3957 1.53 507 1.02 6995 3.38 24 2006-07 2310 3.56 533 0.72 117 0.05 72 0.04 49 35 0.02 317 0.77 2451 2.90 116888 126.96 6860 2.14 273 0.49 1402 0.68 92 0.01
Closing 2007-08 100 0.41 485 0.75 98 0.02 134 0.07 14 14 0.01 4825 4.32 485 0.21 2913 0.97 290 0.71 10014 4.73 34 2006-07 63 0.10 76 0.31 854 1.10 333 0.03 114 0.04 34 26 0.02 3621 3.13 2049 1.44 3957 1.53 507 1.02 6995 3.38 24 2007-08 378913 703.17 57123 318.18 166249 301.33 92768 51.27 8889 2.56 5781 1.36 704 9.20 8542 8.65 16824 52.90 25006 22.60 4975 2.70 134742 42.16 4087 10.35 45147 21.63 19481 7.27
Sales 2006-07 363268 647.32 56013 287.00 171160 329.90 98270 40.39 10107 3.33 7654 1.83 752 10.34 8867 9.07 19769 54.46 229398 339.79 219059 243.61 175922 50.07 4616 10.57 34015 16.77 14175 5.27
75

2. Particulars of stocks and sales (Continued) Stocks Description Unit Opening 2007-08 Cement Yarn Sugar Molasses UPVC Windows PVC Compounds Other sales/stocks and adjustments Total * Amount in Rs. Lacs for above products Sodium Hypochlorite(10%) P.O.P Rs. Lacs Rs. Lacs 0.42 0.38 0.17 1.17 0.15 0.57 M.T. Rs. Crores M.T. Rs. Crores M.T. Rs. Crores M.T. Rs. Crores Nos. Rs. Crores M.T. Rs. Crores Rs. Crores Rs. Crores 3238 0.78 55 0.41 253766 358.35 86720 17.51 11524 3.92 339 2.11 33.29 428.47 2006-07 3448 0.61 34 0.25 111764 166.78 44630 13.01 410 0.70 369 2.37 20.18 342.24 Closing 2007-08 3339 0.81 114 0.91 330024 488.17 87622 31.72 9958 3.37 303 1.82 92.45 631.45
Sales 2007-08 368473 139.55 2314 19.60 290434 403.78 209860 48.22 123340 66.54 18571 122.41 330.16 2685.59 2006-07 343552 121.01 1686 13.76 177239 308.85 127953 44.60 86180 45.29 15175 97.01 191.92 2872.16
2006-07 3238 0.78 55 0.41 253766 358.35 86720 17.51 11524 3.92 339 2.11 33.29 428.47
0.42 0.38
3A. Particulars of raw materials consumed Description Naphtha Liquidated natural gas Lime and lime stone Hard coke/SLV/Pearl/Nut coke/Met coke/Pet coke Charcoal Salt Electrode paste Hydrated Lime Gypsum Lime stone Kapas, cotton, synthetic yarn etc. Sugarcane PVC Resin Plasticizers Other miscellaneous raw materials Total * Excludes 566 M.T. naphtha of Rs. 1.80 crores consumed during trial-run production ** In standard cubic metres *** Excludes 354590 M.T. sugarcane of Rs. 49.00 crores consumed during trial-run production 2007-08 Quantity Value M.T. Rs. Crores 132276 38148127** 127842 39887 65014 268802 1909 6231 24108 380530 2739 3563751 206 4209 429.42 70.58 31.63 32.24 51.40 27.33 3.80 1.84 2.32 10.33 14.25 444.11 0.78 26.01 37.55 1183.59 2006-07 Quantity Value M.T. Rs. Crores 160491* 132471 38137 58682 284479 1845 6458 21637 358564 1970 2866004*** 195 3403 460.85* 28.61 29.79 46.19 24.71 4.08 1.76 2.18 8.74 8.72 383.67*** 0.60 21.01 25.80 1046.71
76

3B. Particulars of goods purchased for resale 2007-08 Description Unit D.A.P. M.O.P. Zinc Sulphate Super Phosphate Traded Urea P.O.P. Traded Sugar Others Total M.T. M.T. M.T. M.T. M.T. M.T. M.T. Quantity M.T. 26751 3542 4006 133705 48166 19491 Value Rs. Crores 24.38 1.52 9.92 39.55 22.97 3.29 299.84 401.47
2006-07 Quantity M.T. 230571 104239 4871 173019 39608 14162 1300 Value Rs. Crores 325.39 107.29 10.51 45.09 19.16 2.21 2.66 149.31 661.62
4.
Other Additional Information 2007-08 Rs. Crores 21.14 18.99 62.47 0.44 1.39 0.41 2.05 19.15 1.38 1.13 2006-07 Rs. Crore 24.04 13.15 57.04 1.56 0.42 0.91 10.51 0.74 1.28
Description (a) Value of imports on CIF basis Raw materials Components and spare parts Capital goods Others Expenditure in foreign currency on cash basis Travelling Technical know how Royalty Interest Consultation fees Others Earnings in foreign exchange on cash basis Direct export of goods on FOB basis/as per contracts where FOB value not readily ascertainable
(b)
(c)
0.08
2.96
2007-08 Rs. Crores (d) Value of imported/indigenous raw materials,spare parts, components and stores consumed (i) Raw materials Imported Indigenous (ii) Spare parts,components and stores Imported Indigenous %
2006-07 Rs. Crores %
14.88 1168.71 1183.59 13.34 128.03 141.37
1.26 98.74 100.00 9.44 90.56 100.00
14.97 1031.74 1046.71 22.37 107.84 130.21
1.43 98.57 100.00 17.18 82.82 100.00
77

NOTES : 1. 2. 3. 4. 5. 6. 7. 8.
The Licences acquired from undivided DCM Limited, pursuant to the Scheme of Arrangement, are pending endorsement in the name of the Company. Installed capacity is as certified by officials of the Company and relied upon by the auditors, being a technical matter. The figures of production, sales, opening /closing stocks of caustic soda consist of liquid and flakes, both. The figures of production, sales, opening /closing stocks of chlorine consist of liquid chlorine and chlorine gas, both. The sales quantities are net of samples/shortages. Where one class of goods is used in the manufacture of another, consumption of materials has been arrived at after deducting internal transfers. Production details in respect of a class of goods captively consumed have not been indicated. Interest paid/payable to financial institutions/ banks in India on foreign currency loans is not included under item 4(b) above, as such payments have been/will be made in Indian Rupees to the financial institutions.
Signatures to Schedules 1 to 13 and Statement of Additional information.
VIKRAM S. SHRIRAM Vice Chairman & Managing Director B.L. SACHDEVA Company Secretary RAJIV SINHA Dy. Managing Director
AJAY S. SHRIRAM Chairman & Sr. Managing Director N.J. SINGH S.S. BAIJAL ARUN BHARAT RAM PRADEEP DINODIA SUNIL KANT MUNJAL D. SENGUPTA S.C. BHARGAVA Directors
New Delhi May 13, 2008
78
Balance Sheet Abstract and Companys General Business Profile

I. Registration Details 3 3 1 4 9 0 2 3 3 0 8 State Code 5 5 Registration No. Balance Sheet date Public Issue Bonus Issue N I L III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands) Total Liabilities 3 0 7 4 4 3 5 6 Sources of Funds Paid-up Capital 3 Secured Loans 1 2 3 3 4 3 2 3 0 6 6 7 5 N I L -
II. Capital raised during the year (Amount in Rs. Thousands) Rights Issue N I L Private Placement N I L Total Assets 3 0 7 4
Reserves and Surplus 1 1 1 1 9 9 Unsecured Loans 5 2 3 6 9
3 8
9 0
Deferred Tax Liabilities (net) 1 7 1 2 Application of Funds Net Fixed Assets 1 9 6 4 2 1 1 N
5 Investments 1 9 8
9 2 I
5 4 L
5 4 -
1 I
5 L
7 -
Net Current Assets 9 1 Accumulated Losses
Misc. Expenditure N
IV. Performance of Company (Amount in Rs. Thousands) Turnover 3 3 0 3 9 7 5 6 +Profit/Loss Before Tax + 7 8 2 7 6 5 7 (Please tick Appropriate box + for Profit, - for Loss) Earning Per Share in Rs. 4 0 . 4 4 ++
Total Expenditure 2 5 2 1 2 0 9 5 9 7 Profit/Loss After Tax 6 7 0 9 8
Dividend rate % 1 7 0 V. Generic Names of Three Principle Products/Services of Company (as per monetary terms) Item Code No. (ITC Code) Product Description Item Code No. (ITC Code) Product Description Item Code No. (ITC Code) Product Description P C 2 A 3 O 8 U 9 L 1 S 0 Y 5 T 4 V 1 I 1 I 3 1 0 2 1 0 U 2 C 0 N . Y . R . 0 E 0 S 0 L 0 A 0 O 0 C H L O R I D E D A
Section 212
1
1. Name of the Subsidiary DCM Shriram Credit and Investments Limited 31st March, 2008 Holder(s) of 60,01,208 Equity Shares of Rs.10/- each out of total issued and subscribed Equity Share Capital of 60,01,208 shares.

Statement Pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary Companies
2
DCM Shriram Aqua Foods Limited
3
DCM Shriram International Limited 31st March, 2008 Holder(s) of 50,007 Equity Shares of Rs.10/- each out of total issued and subscribed Equity Share Capital of 50,007 shares by DCM Shriram Credit and Investments Ltd., another subsidiary of the Company.
4
DSCL Energy Services Company Limited 31st March, 2008 Holder(s) of 17,33,207 Equity Shares of Rs.10/each in its name and Holding of 48,993 Equity Shares of Rs.10/- each by DCM Shriram Credit and Investments Ltd., another subsidiary of the Company out of total issued and subscribed Equity Share Capital of 17,82,200 shares.
5
DCM Shriram Infrastructure Limited 31st March, 2008 Holder(s) of 50,007 Equity Shares of Rs.10/each out of total issued and subscribed Equity Share Capital of 50,007 shares by DCM Shriram Credit and Investments Ltd., another subsidiary of the Company.
2. Financial year of the Subsidiary 3. Holding Companys interest as on 31.3.2008
31st March, 2008 Holder(s) of 83,51,207 Equity Shares of Rs.10/- each out of total issued and subscribed Equity Share Capital of 83,51,207 shares.
4.
Net aggregate amount of the Subsidiarys profits/(losses) so far as it concerns members of Holding Company and not dealt with in the Holding Companys accounts: i) ii) For Subsidiarys financial year ended 31st March, 2008 For Subsidiarys previous financial years since it became Subsidiary. Rs.0.0014 crore (Rs.3.536 crores) (Rs.0.0494 crore) (Rs.4.81 crores) (Rs.0.0007 crore) (Rs.0.0217 crore) Rs.0.7904 crore Rs.0.2806 crore (Rs.0.1472 crore) (Rs.0.0049 crore)
5.
Net aggregate amount of the Subsidiarys profits/(losses) so far as it concerns members of Holding Company and dealt with in the Holding Companys accounts: i) ii) For Subsidiarys financial year ended 31st March, 2008. For Subsidiarys previous financial years since it became Subsidiary. Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
6
1. Name of the Subsidiary Anant Thermal Energy Limited
7
DCM Shriram Energy and Infrastructure Limited 31st March, 2008 Holder(s) of 50,000 Equity Shares of Rs.10/- each out of total issued and subscribed Equity Share Capital of 50,000 shares of Rs. 10/- each.
8
Hariyali Rural Ventures Limited 31st March, 2008 Holder(s) of 50,000 shares of Rs. 10/- each out of total issued and subscribed Equity Share Capital of 50,000 shares of Rs. 10/each.
9
Hariyali Finance Foundation
10
Shriram Bioseed (Thailand) Limited 31st March, 2008 Holder(s) of 9,99,993 shares of 100 Thai Baht each (includes 9,60,000 shares of paid-up amount of 25 Thai Baht each) out of total issued and subscribed Equity Share Capital of 10,00,000 shares by Shriram Bioseed Genetics India Ltd, another subsidiary of the Company.
31st March, 2008 Holder(s) of 50,000 Equity Shares of Rs.10/- each out of total issued and subscribed Equity Share Capital of 50,000 shares by DCM Shriram Credit and Investments Ltd., another subsidiary of the Company.
31st March, 2008 Holder(s) of 10,000 Equity Shares of Rs.10/- each out of total issued and subscribed Equity Share Capital of 10,000 shares by DCM Shriram Credit and Investments Ltd., another subsidiary of the Company.
4.
Net aggregate amount of the Subsidiarys profits/(losses) so far as it concerns members of Holding Company and not dealt with in the Holding Companys accounts: i) ii) For Subsidiarys financial year ended 31st March, 2008. For Subsidiarys previous financial years since it became Subsidiary. (Rs. 0.0008 crore) (Rs. 0.056 crores) (Rs. 0.0069 crore) Nil (Rs. 0.0007 crore) Nil (Rs. 0.0015 crore) Nil Rs. 0.212 crores (Rs. 0.385 crore)
5.
80
Section 212
11
1. Name of the Subsidiary Shriram Bioseed Ventures Limited (Formerly Impact Builders Limited) 31st March, 2008 Holder(s) of 40,50,000 Shares of Rs. 10/- each out of total subscribed Equity Share Capital of 40,50,000 Shares of Rs.10/each.

Statement Pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiary Companies
12
Shriram Bioseeds Limited
13
Affee Investments Corp.*
14
Zeus Investments Limited*
15
Bioseed Genetics International Inc.*
2. Financial year of the Subsidiary 3. Holding Companys interest as on 31.12.2007/31.3.2008
31st March, 2008 Holder(s) of 2,50,000 Equity Shares of USD 1 each out of total issued and subscribed Equity Share Capital of 2,50,000 Equity shares by Shriram Bioseed Ventures Limited, another subsidiary of the Company.
31st December, 2007 Nil
4.
Net aggregate amount of the Subsidiarys profits/(losses) so far as it concerns members of Holding Company and not dealt with in the Holding Companys accounts: i) For Subsidiarys financial year ended 31st December, 2007/ 31st March, 2008 For Subsidiarys previous financial years since it became Subsidiary. (Rs.0.089 crore) (Rs.0.0021 crore) Nil Nil Nil
ii)
Nil
Nil
Nil
Nil
Nil
5.
Affee Investments Corp., became a Subsidiary of the Company in March, 2008 consequent upon purchase of its 50,000 ordinary shares of USD 1 each by Shriram Bioseeds Limited, another Subsidiary of the Company. Further, Zeus Investments Ltd. and Bioseed Genetics International Inc., in which Affee Investments Corp. holds entire shareholding of 6,47,870 equity shares of USD 1 each and 30,00,000 equity shares of USD 1 each, respectively, became subsidiaries of the Company.
16
1. Name of the Subsidiary Bioseeds Limited
17
Shriram Bioseed Genetics India Limited 31st March, 2008 Holder(s) of 29,19,058 Equity Shares of Rs.10/- each in its name, and 25,84,624 shares of Rs. 10/- each by Zeus Investments Limited, 2,19,968 shares of Rs. 10/- each by Bioseed Genetics International Inc., other subsidiaries of the Company out of total issued and subscribed Equity Share Capital of 57,23,657 shares of Rs. 10/- each.
18
Bioseed Research India Pvt. Limited 31st March, 2008 Holder(s) of 37,424 Equity Shares of Rs.100/- each out of total issued and subscribed Equity Share Capital of 37,424 shares by Bioseeds Ltd., another subsidiary of the Company.
19
Bioseed Vietnam Limited
20
Bioseed Research Philippines Inc. 31st March, 2008 Holder(s) of 3,58,523 Shares of PHP 100 each out of total Share Capital of 3,58,523 Shares of PHP 100 each by Bioseeds Ltd., another subsidiary of the Company.
31st March, 2008 Holder(s) of 11,74,551 Ordinary Shares of USD 1 each in its name and 11,28,490 Equity Shares of USD 1 each by Bioseed Genetics International Inc., another subsidiary of the Company, out of total issued Ordinary Share Capital of 23,03,041 Equity Shares.
31st March, 2008 Holder(s) of 1,31,25,080 thousand VND stock out of 1,31,25,080 thousand VND stock by Bioseeds Ltd., another subsidiary of the Company.
4.
Net aggregate amount of the Subsidiarys profits/(losses) so far as it concerns members of Holding Company and not dealt with in the Holding Companys accounts: i) ii) For Subsidiarys financial year ended 31st March, 2008. For Subsidiarys previous financial years since it became Subsidiary. Rs. 0.0188 crore Rs. 0.434 crore Rs. 1.183 crores Rs. 1.054 crores (Rs. 1.4475 crores) (Rs. 0.69 crore) Rs. 1.735 crores Rs. 8.728 crores Rs. 1.5198 crores Rs. 0.91 crore
5.
Subsidiary Companies Particulars
Particulars regarding subsidiary companies persuant to letter nos. 47/442/2007- CL- III dated January 15, 2008, February 20, 2008 and May 16, 2008 from Ministry of Corporate Affairs. Year Ended March 31, 2008 Rs. Crores Name of the Subsidiary Company Capital Reserves Total Total Turnover Profit Provision Profit Proposed Assets Liabilities Before for After Dividend Taxation Taxation Taxation DCM Shriram Credit and Investments Limited DSCL Energy Services Company Limited DCM Shriram International Limited DCM Shriram Infrastructure Limited Anant Thermal Energy Limited Shriram Bioseed Genetics India Limited Shriram Bioseed (Thailand ) Limited Bioseeds Limited Bioseed Vietnam Limited (formerly known as Bioseed Genetics Vietnam) Bioseed Research Philippines, Inc. Bioseed Research India Private Limited DCM Shriram Aqua Foods Limited DCM Shriram Energy and Infrastructure Limited Shriram Bioseed Ventures Limited (formerly known as Impact Builders Limited) Shriram Bioseeds Limited Hariyali Finance Foundation Hariyali Rural Ventures Limited Affee Investment Corp. Zeus Investments Limited Bioseed Genetics International Inc. Exchange Rate as at 31.3.2008 1 USD = INR 40.00 DCM Shriram Credit and Investments Limited 6.00 1.78 0.05 0.05 0.05 5.72 3.35 11.21 5.06 5.16 0.37 8.35 0.05 4.05 1.54 0.01 0.05 0.20 2.59 12.00 0.71 0.96 7.13 0.70 15.10 0.50 16.00 52.47 5.49 1.62 14.05 2.75 0.05 22.65 0.06 35.28 4.02 10.11 32.83 9.56 0.57 8.39 0.05 54.61 54.01 0.01 0.05 14.59 2.64 13.62 14.05 2.75 0.05 22.65 0.06 35.28 4.02 10.11 32.83 9.56 0.57 8.39 0.05 54.61 54.01 0.01 0.05 14.59 2.64 13.62 0.99 5.60 82.53 1.27 0.06 17.68 18.59 6.63 0.01 1.14 (0.15) 1.94 0.21 0.02 1.96 1.97 (1.39) (0.05) (0.01) (0.09) (0.01) 0.35 0.76 0.24 0.45 0.06 0.79 (0.15) 1.18 0.21 0.02 1.72 1.52 (1.45) (0.05) (0.01) (0.09) (0.01) -
Details of Investments(other than in subsidiaries) are as follows: Rs. Crores 12,380 6.75% Bonds of Unit Trust of India of Rs. 100/- each fully paid-up 0.11 763.959 US-2002 of Unit Trust of India of Rs. 10/- each fully paid up( # Rs.5,000) # National Saving Certificate (## Rs.9,000) ## 5,400 Master Gains 92 of Unit Trust of India of Rs. 10/- each fully paid up (### Rs.47,000) ### 1,50,000 equity shares of IFCI Ltd. of Rs.10/- each fully paid up 0.06 2,500 equity shares of APW President System Ltd. of Rs. 10/- each fully paid up 0.01 66,037 equity shares of Bank of Baroda of Rs. 10/- each fully paid up 1.52 45,108 equity shares fo Gujarat State Petronet Ltd of Rs. 10/- each fully paid up 0.12 34,150 equity shares of National Thermal Power Corporation Ltd. of Rs. 10/- each fully paid up 0.21 3,430 equity shares of Punjab National Bank of Rs.10/- each fully paid up 0.13 37,870 equity shares of Yes Bank Ltd of Rs. 10/- each fully paid up 0.17 6,934 equity shares of IL & FS Investsmart Ltd. of Rs. 10/- each fully paid up 0.09 1708 equity shares of Future Capital Holdings Ltd. of Rs.10/- each fully paid up alloted during the year 0.13 97,907 equity shares of Power Grid Corporation of India Ltd of Rs. 10/- each fully paid up alloted during the year 0.51 5,443 equity shares of Reliance Power of Rs.10/- each fully paid-up alloted during the year 0.24 49,950 equity shares of Pacific Land Development Pvt. Ltd. of Rs. 10/- each fully paid up 0.05 3,00,000 equity shares of E Commodities Ltd. of Rs. 10/-each fully paid up 0.30 2,00,000 equity shares of Ellenbarie Commercial Ltd. of Rs. 10/-each fully paid up 1.50 40,000 equity shares of BMD Estates Pvt. Ltd of Rs. 10/-each fully paid up 5,00,000 equity shares of Forech India Ltd of Rs. 10/-each, Rs. 4 paid up alloted during the year 1.75 100 12% redeemable cumulative preferential shares of DSCL Energy Services Company Ltd. of Rs. 100/-each fully paid up(* Rs.10,000) * 48,993 equity shares of DSCL Energy Services Company Ltd. of Rs. 10/-each fully paid up 0.05 Other Subsidiaries Nil
The Company will make available the annual accounts and related detailed information of the subsidiary companies upon request to the shareholders of the holding and the subsidiary companies. These shall also be kept for inspection at the head office of the Company and the subsidiary companies.
Consolidated Financial Statements

Auditors Report
Report of the Auditors to the Board of Directors of DCM Shriram Consolidated Limited on the Consolidated Financial Statements of DCM Shriram Consolidated Limited and its Subsidiaries.
We have examined the attached consolidated balance sheet of DCM Shriram Consolidated Limited and its subsidiaries, as at March 31, 2008, the consolidated profit and loss account and also the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the management of DCM Shriram Consolidated Limited. Our responsibility is to express an opinion on these financial statements based on our audit. 1. We conducted our audit in accordance with generally accepted auditing standards in India. These standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are prepared, in all material respects, in accordance with an identified financial reporting framework and are free of material misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements. We believe that our audit provides a reasonable basis for our opinion. 2. We did not audit the financial statements of subsidiaries viz., DCM Shriram Credit and Investments Limited, Anant Thermal Energy Limited, DCM Shriram International Limited, DCM Shriram Infrastructure Limited, Hariyali Finance Foundation, DSCL Energy Services Company Limited, DCM Shriram Aqua Foods Limited, Shriram Bioseed Genetics India Limited, Shriram Bioseed (Thailand) Limited, Bioseeds Limited, Bioseed Vietnam Limited (formerly known as Bioseed Genetics Vietnam), Bioseed Research Phillipines Inc., Bioseed Research India Private Limited, DCM Shriram Energy and Infrastructure Limited, Hariyali Rural Ventures Limited, Shriram Bioseed Ventures Limited, Shriram Bioseed Limited, Affee Investment Corp, Bioseed Genetics International Inc. and Zeus Investments Limited whose financial statements reflect total assets of Rs. 222.93 crores as at March 31, 2008 and total revenues of Rs. 125.16 crores for the year ended on that date (these figures include intra group balances and intra group transactions eliminated on consolidation). These financial statements (other than in case of Bioseed Genetics International Inc.) have been audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included in respect of these subsidiaries, is based solely on the report of the other auditors. However, in case of Bioseed Genetics International Inc. the figures (total assets of Rs. 13.62 crores as at March 31, 2008 and total revenues of Rs. Nil for the year ended on that date; these figures include intra group balances and intra group transactions eliminated on consolidation) have been incorporated in these accounts on the basis of unaudited management accounts for the period March 13, 2008
to March 31,2008 prepared by that company for group consolidation purposes. 3. We report that the consolidated financial statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21, Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India and on the basis of the separate audited financial statements of DCM Shriram Consolidated Limited and its subsidiaries included in the consolidated financial statements other than Bioseed Genetics International Inc. where the financials have been incorporated in these accounts on the basis of unaudited management accounts as indicated in para 2 above. 4. Without qualifying our opinion, we draw attention to note 16 of schedule 14 relating to accounting for cane purchase liability for the sugar season 2007-08 at Rs. 110 per quintal instead of State Advised Price of Rs. 125 per quintal fixed by the Uttar Pradesh State Government. Pending completion of legal proceedings in the matter, the effect thereof on these accounts can not be determined at this stage. 5. In our opinion and on the basis of the information and explanations given to us and on the consideration of the separate audit reports on individual audited financial statements of DCM Shriram Consolidated Limited and its subsidiaries other than Bioseed Genetics International Inc. for which, as indicated in para 2 above, unaudited management accounts have been considered for the purpose, we are of the opinion that: (a) the consolidated balance sheet gives a true and fair view of the consolidated state of affairs of DCM Shriram Consolidated Limited and its subsidiaries as at March 31, 2008; (b) the consolidated profit and loss account gives a true and fair view of the consolidated results of operations of DCM Shriram Consolidated Limited and its subsidiaries for the year ended on that date; and (c) the consolidated cash flow statement gives a true and fair view of the cash flows of DCM Shriram Consolidated Limited and its subsidiaries for the year ended on that date.
For A. F. FERGUSON & CO. Chartered Accountants Jitendra Agarwal Partner Membership No.: 87104
83
Consolidated Balance Sheet

of DCM Shriram Consolidated Limited and its Subsidiary Companies as at March 31, 2008 Schedule Sources of Funds Shareholders funds Share capital Reserves and surplus Minority Interest Loan funds Secured Unsecured Deferred tax liabilities (net) Total funds employed Application of Funds Fixed assets Gross block Less : Depreciation Net block Capital work in progress Investments Current assets, loans and advances Inventories Sundry debtors Cash and bank balances Loans and advances Less: Current liabilities and provisions Current liabilities Provisions Net current assets Total funds utilised Notes to the consolidated accounts
As at March 31, 2008 Rs. Crores 33.34 1115.93 1149.27 1256.41 527.03 1783.44 171.24 3103.95
As at March 31, 2007 Rs. Crores 33.34 520.71 554.05 17.42 1001.83 545.38 1547.21 170.12 2288.80
1 2
5 2390.76 634.14 1756.62 299.98 2056.60 155.52 808.69 281.27 57.72 274.46 1422.14 8 438.80 91.51 530.31 891.83 3103.95 14 836.10 66.20 902.30 498.88 2288.80 2187.16 514.68 1672.48 108.33 1780.81 9.11 584.75 538.85 62.50 215.08 1401.18
6 7
Per our report attached For A.F. FERGUSON & CO. Chartered Accountants Jitendra Agarwal Partner Membership No.: 87104 B.L. SACHDEVA Company Secretary
84
Consolidated Profit and Loss Account
of DCM Shriram Consolidated Limited and its Subsidiary Companies for the year ended March 31, 2008
Schedule Income Sale of products (Gross) Less : Excise duty Sale of products (Net) Income from services and other income Expenditure Manufacturing and other expenses Purchases for resale Interest - On debentures and other fixed loan - Others Profit for the year before depreciation, tax and exceptional items Depreciation Exceptional items (net) Profit before tax Provision for taxation Profit after tax before minority interest Minority Interest Net Profit for the year Transfer from debenture redemption reserve Balance brought forward from the previous year Profit available for appropriation Appropriations Proposed dividends (equity shares) - Interim - Final Corporate dividend tax General reserve Balance carried to consolidated balance sheet Earnings per share - basic/diluted (Rs.) (Refer note 8 in schedule 14) - Before exceptional item - After exceptional item Notes to the consolidated accounts 9 Year ended March 31, 2008 Rs. Crores 2770.08 196.15 2573.93 39.42 2613.35 10 2006.05 379.81 75.64 11.97 139.88 123.65 770.12 786.35 113.64 672.71 672.71 5.17 228.28 906.16 Year ended March 31, 2007 Rs. Crores 2938.23 170.86 2767.37 39.00 2806.37 1915.08 651.69 60.92 18.17 160.51 93.38 67.13 23.73 43.40 0.31 43.71 5.16 204.75 253.62
11 12 13
49.77 6.64 9.59 400.00 440.16
6.64 6.64 2.06 10.00 228.28
0.49 40.55 14
2.63 2.63
Per our report attached to the consolidated balance sheet For A.F. FERGUSON & CO. Chartered Accountants Jitendra Agarwal Partner Membership No.: 87104 B.L. SACHDEVA Company Secretary
85
Consolidated Cash Flow Statement

Year ended March 31, 2008 Rs. Crores
A. Cash flow from operating activities Net profit before tax and exceptional items Adjustments for : Depreciation (Profit)/Loss on sale of fixed assets (Profit)/loss on sale of non trade current investments (Profit)/loss on sale of non trade long term investments Exchange differences on conversion Finance Charges Paid Interest expense Less: interest and dividend income Operating profit before working capital changes Adjustments for : Trade and other receivables(net) Inventories Trade and other payables Cash generated from operations Income taxes paid (net) Net cash (used)/from operating activities Cash flow from investing activities Purchase of fixed assets Sale of fixed assets Purchase of non trade current investments Purchase of non trade long term investments Purchase of non trade long term investments Sale of non trade current investments Sale of Trade Long term Investment Sale of non trade long term investments Purchase of investment in subsidiary companies Refund of security deposit from Investment company Interest received Dividend received Cash flow from investing activities before exceptional item Exceptional item Net cash from/(used) in investing activities Cash flow from financing activities Proceeds from borrowings Repayment of borrowings Inter Corporate Deposits received back Inter Corporate Deposits given Finance Charges Paid Changes in working capital borrowings Dividends paid Corporate dividend tax paid Interest received Interest paid Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents as at opening Cash and cheques in hand and balances with banks Cash and cash equivalents as at closing Cash and cheques in hand and balances with banks 16.23 123.65 0.09 0.15 0.07 1.15 87.61 (7.22) 221.73 198.58 (224.64) (422.71) (227.04) (113.78) (340.82) (379.56) 5.57 (5,184.96) (0.50) (2.63) 5,031.81 0.13 (53.33) 0.12 3.48 1.77 (578.10) 832.59 254.49 6,854.72 (6,585.95) 4.81 (32.92) (56.41) (9.59) 0.01 (86.48) 88.19 1.86 55.02 56.88
of DCM Shriram Consolidated Limited and its Subsidiary Companies for the year ended March 31, 2008
Year ended March 31, 2007 Rs. Crores
67.13 93.38 (8.21) (0.31) (3.25) 1.03 1.46 79.09 (5.80) 224.52 (157.96) (121.66) 294.23 239.13 (25.14) 213.99 (585.07) 14.58 (2007.02) (15.33) 2,007.02 0.50 20.96 0.02 2.84 2.13 (559.37) (559.37) 3,971.34 (3,695.16) 5.58 (6.80) (1.46) 186.07 (14.94) (2.09) 0.58 (77.25) 365.87 20.49 34.53 55.02
B.
C.
Per our report attached to the consolidated balance sheet For A.F. FERGUSON & CO. Chartered Accountants Jitendra Agarwal Partner Membership No.: 87104 B.L. SACHDEVA Company Secretary
86


1. SHARE CAPITAL
As at March 31, 2008 Rs. Crores Authorised 24,99,50,000 (2006-2007 - 24,99,50,000) Equity shares of Rs.2 each 65,01,000 (2006-2007 - 65,01,000) Cumulative redeemable preference shares of Rs.100 each Issued 16,98,03,320 (2006-2007 - 16,98,03,320) Equity shares of Rs.2 each Subscribed and paid up 16,59,03,320 (2006-2007 - 16,59,03,320) Equity shares of Rs.2 each, fully called-up Add: Forfeited shares - Amount originally paid up 49.99 65.01 115.00 33.96 33.18 0.16
As at March 31, 2007 Rs. Crores 49.99 65.01 115.00 33.96 33.18 0.16
33.34 33.34
33.34 33.34
NOTES:
Of the issued, subscribed and paid-up capital, 2,87,75,380 equity shares of Rs. 2 each represent the equity shares issued on October 9, 1990 to the members of undivided DCM Limited in the ratio of one share for every four shares held by the members in undivided DCM Limited, in terms of the Scheme of Arrangement effective from April 1, 1990, without payment being received in cash. 8,29,51,660 equity shares of Rs. 2 each fully paid up were allotted and issued as bonus shares by capitalisation of Capital Redemption Reserve
2.
RESERVES AND SURPLUS

As at March 31, 2007 Rs. Crores 0.34 6.68 65.07 8.41 22.61 189.28 0.71 (0.67) 228.28 520.71 Additions Rs. Crores 400.00 0.03 212.07 612.10 Deductions Rs. Crores 0.03 5.17 # 11.49 @ 0.19 @ 16.88 As at March 31, 2008 Rs. Crores 0.31 1.51 65.07 8.41 22.61 577.79 0.71 (0.64) 440.16 1,115.93
Revaluation reserve Debenture redemption reserve Share premium account Capital redemption reserve Capital Reserve General reserve Statutory reserve * Foreign currency translation reserve Profit and loss account # * @
Transfer to profit and loss account on redemption As per The Reserve Bank of India (Amendment) Act 1997 Refer note 19 in Schedule 14
3.
LOAN FUNDS
As at March 31, 2008 Rs. Crores Secured Debentures Loans from banks On cash credit account Others Other loans Unsecured Deposits Fixed Others Interest accrued and due on deposits Short term loans and advances Banks Others Finance Lease Liability * 3.00 216.25 733.17 303.99 1,256.41 5.08 29.99 0.64 488.18 2.78 0.36 527.03 1,783.44 As at March 31, 2007 Rs. Crores 13.33 250.42 554.94 183.14 1,001.83 8.54 28.94 0.09 454.59 52.71 0.51 545.38 1,547.21
* Represents present value of minimum lease payments. Also refer note 7 in schedule 14.

3. LOAN FUNDS (Continued)
(Continued)
2.
3.
Secured 1. Debentures i) Debentures detailed below are secured by English first mortgage on the Companys property at Taluka Kalol, District Gandhinagar, Gujarat and first equitable mortgage/ charge on immovable/ movable properties, both present and future, of the Companys undertakings at Kota, Rajasthan, subject to charges created/ to be created in favour of the Companys bankers on stocks, stores and book debts for securing borrowings for working capital, and shall rank pari-passu in all respects with the security created or to be created in terms of the stipulations of the respective Trust Deeds : a) Nil (2006-2007 15,00,000) 8.5% Secured redeemable non-convertible debentures of Rs.100 each redeemable in three equal annual instalments commencing from November 1, 2005. The third instalment has been paid during the year (Rs. Nil due within a year, 2006-2007 Rs.5.00 crores). b) 5,00,000 (2006-2007 5,00,000) 8.5% Secured redeemable non-convertible debentures of Rs.100 each, redeemable in three equal annual instalments commencing from November 1, 2006. The second instalment has been paid during the year (Rs.1.67 crores due within one year, 2006-07- Rs.1.67 crores) ii) Debentures detailed below are secured by English first mortgage on the Companys property at Taluka Kalol, District Gandhinagar, Gujarat and first equitable mortgage/ charge on immovable/ movable properties both present and future, of the Companys undertaking at District Bharuch, Gujarat (save and except book debts) subject to charges created/ to be created in favour of the Companys bankers on stocks, stores and book debts for securing borrowings for working capital and shall rank pari-passu with existing charges created/ to be created in favour of other first chargeholders: a) Nil (2006-2007 6,00,000) 8.5% Secured redeemable non-convertible debentures of Rs.100 each redeemable in three equal annual instalments commencing from November 1, 2005. The third instalment has been paid during the year (Rs. Nil due within a year, 2006-2007 Rs.2.00 crores). b) Nil (2006-2007 1,00,000) 11% Secured redeemable non-convertible debentures of Rs.100 each, redeemable in three equal annual instalments commencing from November 1, 2005. The third instalment has been paid during the year (Rs. Nil due within a year, 2006-2007 Rs.0.33 crores). c) 4,00,000 (2006-2007 4,00,000) 8.5% Secured redeemable non-convertible debentures of Rs.100 each, redeemable in three equal annual instalments commencing from November 1, 2006. The second instalment has been paid during the year (Rs.1.33 crores due within one year, 2006-2007 Rs.1.33 crores) Short term working capital borrowings from Banks: (a) Company (i) Loans from banks on cash credit account of Rs. 194.05 crores (2006-2007 Rs.226.97 crores) are secured by first charge by way of hypothecation of stocks/stores and book debts of the Company as per terms and conditions of respective Banks. These loans are further secured/to be secured by a third charge by way of mortgage/hypothecation of all the immovable/movable properties (other than current assets) of the Companys undertakings at Kota in Rajasthan and Ajbapur, Rupapur, Loni & Hariawan in Uttar Pradesh. (ii) Short term loan of Rs. 85.27 crores (2006-07 Rs. Nil) from a bank is secured by 90,000 7.95% Fertilizer Companies GOI Special Bonds 2026, by way of Repo transactions. (b) Shriram Bioseed Genetics India Limited (SBGI), a subsidiary Short term loans and advances from banks of SBGI of Rs. 22.20 crores (2006-2007 Rs. 23.45 crores) are secured by hypothecation of stocks and other receivables and book debts both present and future and mortgage and charge in favour of banks of all immovable properties both present and future including movable machinery, machinery spares, tools and accessories both present and future. Other loans: (i) Term loans of Rs.154.13 crores (2006-2007 Rs. 27.33 crores) from banks and term loans of Rs.12.00 crores (2006-2007 Rs.12.00 crores) from others are secured by pari passu first mortgage/ charge, created on immovable and movable assets, both present and future, (save and except book debts), subject to prior charges created/to be created in favour of the Companys bankers on the stocks of raw materials, semi-finished and finished goods and consumable stores for working capital borrowings and a term loan of Rs.20.00 crores (2006-2007 Rs. 20.00 crores) from a bank is secured by way of second mortgage/ charge, created/to be created on immovable and movable fixed assets, both present and future, pertaining to the Companys undertakings at District Bharuch, Gujarat, (Rs. 30.80 crores due within a year; 2006-2007 Rs.14.69 crores) (ii) Term loans of Rs.128.50 crores (2006-2007 Rs.146.43 crores) from banks and term loans of Rs.18.00 crores (2006-2007 Rs.18 crores) from others are secured by way of first mortgage/charge, created ranking pari-passu on immovable and movable assets, both present and future, (save and except book debts), term loan of Rs.120 crores (2006-2007 Rs.130.47 crores) from others are secured by way of first mortgage/charge, created ranking pari-passu on immovable and movable assets, both present and future, subject to charges created or to be created in favour of the Companys bankers on the stocks of raw materials, semi-finished and finished goods and consumable stores for working capital borrowings, and term loans of Rs.50.00 crores (2006-2007 Rs.50.00 crores) from banks are secured by way of second mortgage/ charge, created/to be created on immovable and movable fixed assets, both present and future of the Companys undertakings at Kota, Rajasthan (Rs. 87.87 crores due within a year; 2006-2007 Rs. 20.87 crores). (iii) Term loan of Rs.3.32 crores (2006-2007 Rs.5.33 crores) from a bank is secured by way of first mortgage/charge, ranking pari passu, on immovable/movable assets, both present and future, pertaining to the Companys Ajbapur Sugar Complex and Rupapur Sugar Complex, Uttar Pradesh, subject to charges created/to be created in favour of Companys bankers on the stocks of raw materials, semi finished goods, finished goods and consumable stores for securing working capital borrowings (Rs. 2 crores due within a year; 2006-2007 Rs.2.00 crores). (iv) Term loan of Rs.115.90 crores (2006-2007 Rs. 118.07 crores) from banks are secured by way of first mortgage/charge, ranking pari passu, on immovable/movable assets, both present and future and term loan of Rs. 42.29 crores (2006-2007 Rs.15.67 crores) from others is secured by way of a exclusive second charge on immovable/movable assets (save and except book debts) subject to charges created/to be created in favour of the Companys bankers on the stocks of raw materials, semi finished goods, finished goods and consumable stores for securing working capital borrowings both present and future, pertaining to the Companys Ajbapur Sugar Complex, Uttar Pradesh (Rs. 8.33 crores due within a year; 2006-2007 Rs.8.33 crores) (v) Term loan of Rs. Nil crores (2006-2007 Rs.7.00 crores) from others is secured by way of subservient mortgage/ charge, created/ to
88

3. LOAN FUNDS (Continued)
(Continued)
be created on 9 MW power plants at Ajbapur Sugar Complex and 6MW power plant at Rupapur Sugar Complex of the Company. (Rs. Nil crores due within a year; 2006-2007 Rs. 7.00 crores) (vi) Term loan of Rs.87.50 crores (2006-2007 Rs.86.98 crores) from a bank is secured by way of first mortgage/charge created/ to be created on immovable/movable assets, both present and future, subject to charges created/to be created in favour of Companys bankers on the stocks of raw materials, semi finished goods, finished goods and consumable stores for securing working capital borrowings, pertaining to the Companys Loni Sugar Complex, Uttar Pradesh. (Rs. Nil due within a year; 2006-2007 Rs. Nil) (vii)Term loan of Rs.81.73 crores (2006-2007 Rs. 68.07 crores) from a bank & Rs. 26.40 crores (2006-2007 Nil) from others is secured by way of first mortgage/charge created/ to be created on immovable/movable assets, both present and future, subject to charges created/to be created in favour of Companys bankers on the stocks of raw materials, semi finished goods, finished goods and consumable stores for securing working capital borrowings, pertaining to the Companys Hariawan Sugar Complex, Uttar Pradesh. (Rs. Nil due within a year; 2006-2007 Rs.Nil) (viii)Term loan of Rs. 35.69 crores (2006-2007 Rs. 32.73 crores) from a bank is secured by way of first mortgage/charge created/ to be created on immovable/movable fixed assets, both present and future pertaining to the Companys Rupapur Sugar Complex, Uttar Pradesh. (Rs. 11.90 crores due within a year; 2006-2007 Rs.Nil) (ix) Term loan of Rs. 56.43 crores (2006-2007 Nil) from a bank is secured by way of residual mortgage/charge created/ to be created on immovable/movable fixed assets, both present and future pertaining to all the four sugar units of the Company, i.e. Ajbapur Sugar Complex, Uttar Pradesh, Rupapur Sugar Complex, Uttar Pradesh, Hariawan Sugar Complex, Uttar Pradesh & Loni Sugar Complex, Uttar Pradesh. (Rs. Nil due within a year; 2006-2007 Rs.Nil)
4.
DEFERRED TAX LIABILITIES AND ASSETS

As at March 31, 2008 Rs. Crores Deferred tax liabilities Depreciation Compensation payable to employees Others Deferred tax assets Provision for gratuity and leave encashment Provision for doubtful debts and advances Unabsorbed business loss Others Deferred tax liabilities (net) 212.05 212.05 22.92 3.19 0.30 14.40 40.81 171.24 As at March 31, 2007 Rs. Crores 186.31 4.84 6.47 197.62 14.21 2.83 0.26 10.20 27.50 170.12
5.
FIXED ASSETS
GROSS BLOCK Description As at March 31, 2007 Rs. Crores 77.61 229.89 1,769.61 33.56 23.05 17.95 23.75 8.22 2.75 0.77 2,187.16 1,458.43 Additions Deductions As at March 31, 2008 Rs. Crores 108.19 293.95 1,824.76 46.68 25.45 54.22 23.79 8.22 4.67 0.83 $$ 2,390.76 2,187.16 * $ Up to March 31, 2007 Rs. Crores 19.63 443.88 17.51 10.25 9.15 10.08 3.06 0.83 0.29 514.68 429.62 DEPRECIATION For the year Rs. Crores 6.24 103.99 5.70 3.84 2.38 0.69 0.69 0.16 123.69 # 93.99 Deductions/ Adjustment Rs. Crores 0.18 1.73 0.74 1.61 (0.03) 4.23 8.93 Up to March 31, 2008 Rs. Crores 25.69 546.14 $ 22.47 12.48 9.15 12.46 3.75 1.52 0.48 634.14 514.68 NET BLOCK As at As at March 31, March 31, 2008 2007 Rs. Crores Rs. Crores 108.19 77.61 268.26 210.26 1,278.62 1,325.73 24.21 16.05 12.97 12.80 45.07 11.33 4.47 3.15 0.35 1,756.62 299.98 8.80 13.67 5.16 1.92 0.48 1,672.48 108.33
Rs. Crores 34.32 64.27 57.23 14.33 4.96 35.96 0.04 1.92 0.06 213.09 744.09 **
Rs. Crores 3.74 0.21 2.08 1.21 2.56 (0.31) 9.49 15.36
Tangibles Land Buildings Plant and machinery Furniture and fittings Vehicles Intangibles Goodwill Technical Know How Brand Software Assets on lease Vehicles This year Previous year Capital work in progress (including capital advances)
**
2,056.60 1,780.81 * ** $ $$ # Includes Rs. 1.90 crores (2006-2007 - Rs. 2.19 crores) pertaining to land situated at Hardoi and Hyderabad pending registration in favour of the Company. Land amounting to Rs. 0.11 crore (2006-2007 -Rs. 0.12 crore) is yet to be mutated in the name of Bioseed Research India Private Limited. Includes addition of Rs.0.05 crore (2006-2007 - Rs.11.00 crores) on account of foreign exchange fluctuation. Includes Rs. 0.16 crore (2006-2007 -Rs. 0.23 crore) in respect of certain plant and machinery retired from active use and held for disposal. Refer note 7 in schedule 14. Includes Rs. 0.01 crore (2006-2007 - Rs. 0.58 crore) included in additions to fixed assets/capital work in progress 89

6. INVESTMENTS
(Continued)
As at March 31, 2008 Rs. Crores Long Term (valued at cost unless there is permanent fall in value thereof) Trade Investments Unquoted 7,95,009 (2006-2007 - 7,95,009) Equity shares of Rs. 10 each fully paid up of Bharuch Eco Aqua Infrastructure Limited. 30,00,000 (2006-2007 - 30,00,000) Equity Shares of Rs. 10 each shares of Forum I Aviation Limited. Quoted 763.959 (2006-2007 - 763.959) US-2002 of Unit Trust of India of Rs. 10 each fully paid up (# Rs. 0.05 lacs) Non-Trade Investments Government Securities Unquoted National savings certificates * Investment in Shares, Units, etc. Quoted 95,495 (2006-2007 - 95,495 ) 6.75 % Bonds of Rs.100 each fully paid-up of Unit Trust of India 1,50,000 (2006-2007 - 1,50,000 ) Equity shares of IFCI Limited of Rs.10 each fully paid up 5,400 (2006-2007 - 5,400) Master Gains 92 of Unit Trust of India of Rs. 10 each fully paid up (@ Rs. 0.47 lacs) 2,500 (2006-2007 - 2,500) Equity shares of APW President System Limited of Rs.10 each fully paid up 66,037 (2006-2007 - 66,037 ) Equity shares of Bank of Baroda of Rs. 10 each fully paid up. 5,443 (2006-07-Nil) Equity shares of Reliance Power of Rs.10 each fully paid up allotted during the year 45,128 (2006-2007 - 45,128) equity shares of Gujarat State Petronet Limited of Rs. 10 each fully paid up 1708 (2006-2007- Nil) Equity shares of Future Capital Holdings Ltd. of Rs.10 each fully paid up allotted during the year 34,150 (2006-2007 - 34,150) equity shares of National Thermal Power Corporation Limited of Rs.10 each fully paid up 3,430 (2006-2007 - 3,430) Equity shares of Punjab National Bank of Rs.10 each fully paid up.
0.79 3.00
0.79 3.00
0.01
0.01
0.95 0.06 @ 0.01 1.52 0.24 0.12 0.13 0.21 0.13
0.95 0.06 @ 0.01 1.52 0.12 0.21 0.13

90

6. INVESTMENTS (Continued)
(Continued)
As at March 31, 2008 Rs. Crores 97,907(2006-07-Nil) Equity shares of Power Grid Corporation Ltd of Rs.10 each fully paid-up allotted during the year 37,870 (2006-2007 - 37,870) Equity shares of Yes Bank Ltd of Rs 10 each fully paid up. 6,934 (2006-2007 - 6,934) Equity share of IL & FS Investments Limited of Rs. 10 each fully paid up. Unquoted 500 (2006-2007 - Nil) 5.5% bonds of Rs. 10,000 each fully paid up of Rural Electrification Corporation Limited purchased during the year 49,950 (2006-2007 - 49,950) Equity shares of Pacific Land Development Private Limited of Rs.10 each fully paid up 5,00,000(2006-07-Nil) Equity shares of Forech India Ltd. of Rs. 10/- each, Rs.4 paid up allotted during the year Nil (2006-2007 - 250) units of Infinity Venture India Fund of Rs. 12,945 each, fully paid up. 250 units sold during the year. 3,00,000 (2006-2007 - 3,00,000) Equity shares of E Commodities Limited of Rs.10 each fully paid up 2,00,000 (2006-2007 - 2,00,000) Equity shares of Ellenbarie Commercial Limited of Rs.10 each fully paid up 40,000 (2006-2007 - 40,000) Equity shares of BMD Estate Private Limited of Rs.10 each fully paid up Less : Permanent diminution in value Current Investments (valued at lower of cost or net realisable value) Governement securities Non trade, Unquoted 30,000 (2006-2007 - Nil) 8.3% Fertiliser Companies GOI Special Bonds 2023 (fertiliser bonds) of Rs. 10,000 each fully paid up (40,000 allotted during the year out of which 10,000 sold during the year) 1,23,000 (2006-2007 - Nil) 7.95% Fertiliser Companies GOI Special Bonds 2026 (fertiliser bonds) of Rs. 10,000 each fully paid up allotted during the year # - Quoted - Unquoted Aggregate market value - Quoted * Lodged with Sales Tax authorities Rs. 9,000 (2006-2007 -Rs. 9,000) # Refer also note 2(a)(ii) of schedule 3
0.51 0.17 0.09 0.50
0.17 0.09
0.05 1.75 0.30 1.50
0.05 0.20 0.30 1.50
0.75 0.75
0.75 0.75
29.31
114.17
TOTAL: Aggregate book value
155.52 4.14 151.38 6.63
9.11 3.26 5.85 4.27
91

7. CURRENT ASSETS, LOANS AND ADVANCES
(Continued)
As at March 31, 2008 Rs. Crores Current Assets Inventories Stores and spares * Stock-in-trade ** Raw materials Process stocks Finished goods Securities Sundry debtors Debts over six months Secured - considered Unsecured - considered - considered Other debts Secured - considered Unsecured - considered Less: 72.99 70.99 11.74 652.96 0.01 808.69 good good doubtful good good 0.04 44.66 9.87 3.85 232.72 291.14 9.87 281.27 3.95 6.30 42.90 4.57 $ 57.72
69.98 48.01 18.78 447.97 0.01 584.75
0.01 134.85 8.99 1.01 402.98 547.84 8.99 538.85 3.21 3.81 47.80 7.68 $ 62.50
Provision for doubtful debts
Cash and bank balances Cash on hand Cheques in hand With scheduled banks on Current account Deposit account # Loans and Advances Advances recoverable in cash or in kind or for value to be received Unsecured - considered good - considered doubtful Less: Provision for doubtful advances Deposits With customs, excise and port trust authorities Tax payments (net of provision for current tax and FBT)@ MAT Credit entitlement Interest accrued on investments and deposits
138.15 0.81 0.81 138.15 23.85 67.30 42.51 0.32 2.33 274.46 1422.14
96.58 0.56 0.56 96.58 21.34 61.01 23.89 11.89 0.37 215.08 1401.18
* ** # $
Stores and spares are valued at cost or under. Stock-in-trade is valued at cost or net realisable value, whichever is lower. Includes Rs. 0.43 crore (2006-2007 - Rs. 0.43 crore) provided as margin for bank guarantees and letter of credit. - Includes Rs. 0.10 lac (2006-2007 - Rs. 0.10 lac) lodged with sales tax authority. - Rs. 0.31 crore (2006-2007 - 0.04 crore) pledged as security against bank guarantee. @ Rs. 11.76 crores (2006-2007 - Rs. Nil) MAT credit adjusted during the year.

8. CURRENT LIABILITIES AND PROVISIONS
(Continued)
As at March 31, 2008 Rs. Crores Current Liabilities Sundry creditors# Total outstanding dues of micro and small enterprises Total outstanding dues of creditors other than micro and small enterprises Ex-gratia payable under voluntary retirement schemes* Interest accrued but not due on loans Provisions Gratuity Compensated absences Proposed dividends Corporate dividend tax Provision for contingencies
0.17 427.05 1.39 10.19 438.80 40.83 26.82 6.64 1.13 16.09 91.51 530.31
0.22 824.68 1.58 9.62 836.10 31.62 10.72 6.64 1.13 16.09 66.20 902.30
# *
Sundry creditors do not include any amounts outstanding as on March 31, 2008 which are required to be credited to Investor Education and Protection Fund. Rs. 0.18 crore (2006-2007 - Rs.0.19 crore) due within a year.
9.
INCOME FROM SERVICES AND OTHER INCOME Year ended March 31, 2008 Rs. Crores Income from services* Other income Dividend income (gross) from: - non-trade, long term investments - non-trade, current investments Profit on sale of: -non-trade, long term investments -non-trade, current investments Profit on sale of fixed assets Interest income** Rent Liabilities/provisions no longer required written back Miscellaneous
* Income-tax deducted at source Rs. 0.34 crore (2006-2007 - Rs. 0.17 crore) ** Income-tax deducted at source Rs. 0.85 crore (2006-2007 - Rs. 0.64 crore)
Year ended March 31, 2007 Rs. Crores 4.43
4.67
0.06 1.71 0.05 5.45 3.07 2.30 22.11 39.42
0.10 2.03 3.25 0.31 8.21 3.67 1.27 3.04 12.69 39.00
93

10. MANUFACTURING AND OTHER EXPENSES
(Continued)
Year ended March 31, 2008 Rs. Crores Raw materials consumed Stores, spares and components Power, fuel, etc. Repairs Buildings Plant and machinery Salaries, wages, bonus, gratuity, commission, etc. Provident and other funds Welfare Rent Insurance Donation Rates and taxes Auditors remuneration Audit fee Tax audit Other services Out-of-pocket expenses Directors fees Bad debts and advances written-off Provision for doubtful debts and advances Freight and transport Commission to selling agents Brokerage, discounts (other than trade discounts), etc. Selling expenses Exchange fluctuation Loss on sale of non trade - current investment Loss on sale of non trade - long term investment Loss on sale/write off of fixed assets Increase/(decrease) in excise duty of finished goods Provision for losses on derivative transactions Miscellaneous expenses Less: - Cost of own manufactured goods capitalised (Increase)/ Decrease in stocks of finished goods and process stocks Closing stocks Less: Stock produced during the trial run Adjusted Closing stocks Less : Opening stocks 1,220.63 148.36 359.02 3.82 26.26 182.19 16.62 9.94 11.83 6.87 2.90 2.20 0.58 0.03 0.45 0.04 0.07 0.42 1.28 54.15 1.85 13.91 23.42 12.94 0.15 0.07 0.14 10.57 2.42 91.71 2,204.84 (0.84) 2,204.00
Year ended March 31, 2007 Rs. Crores 1,075.99 135.48 320.79 4.19 24.71 139.27 13.76 8.96 8.17 6.99 1.09 2.00 0.58 0.08 0.44 0.02 0.06 0.47 1.92 78.19 0.87 11.19 25.84 9.11 11.44 79.89 1,961.50 (5.76) 1,955.74
664.71 664.71 466.76 (197.95) 2,006.05
466.76 54.83 411.93 371.27 (40.66) 1,915.08
11. DEPRECIATION
Year ended March 31, 2008 Rs. Crores Depreciation Less: Transfer from revaluation reserve 123.68 0.03 123.65 Year ended March 31, 2007 Rs. Crores 93.41 0.03 93.38
94

12. EXCEPTIONAL ITEMS
(Continued)
Year ended March 31, 2008 Rs. Crores Income from sale of SBM land redevelopment project Provision for diminution in value of non trade current investments - fertiliser bonds 779.64 (9.52) 770.12
Year ended March 31, 2007 Rs. Crores -
13. CURRENT/DEFERRED TAX

Year ended March 31, 2008 Rs. Crores - Current tax Less :- MAT credit entitlement - Deferred tax - Fringe benefit tax 103.98 (0.19) 103.79 7.10 2.75 113.64 * Refer note 15 of Schedule 14 Year ended March 31, 2007 Rs. Crores 7.98 (10.27) * (2.29) 23.45 2.57 23.73
95

14. NOTES TO THE CONSOLIDATED ACCOUNTS
1.
(Continued)
Statement of accounting policies (i) Basis of accounting The consolidated financial statements are prepared under the historical cost convention as modified to include the revaluation of land of one of the units of the Company. These statements have been prepared in accordance with Accounting Standard 21 Consolidated Financial Statements. (ii) Principles of consolidation a) The consolidated financial statements relate to DCM Shriram Consolidated Limited (the Company) and its subsidiary companies. The consolidated financial statements have been prepared on the following basis: the financial statements of the Company and its subsidiary companies have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intragroup balances and intra-group transactions resulting in unrealised profits or losses. the consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as the Companys separate financial statements. the excess of cost to the Company of its investment in a subsidiary company over the Companys portion of the equity of the subsidiary at the date on which investment in subsidiary is made is recognised in the financial statements as goodwill. (refer note 18) b) The companies considered in the consolidated financial statements are: Name of the Company Country of incorporation % voting power held as at March 31, 2008 100 100 100 100 100 100 100 100 100 100 100 100 100 100 99.99 100 100 100 100 100 % voting power held as at March 31, 2007 100 99.99 100 99.99 99.99 99.99 51 51 51 51 51 51 51 -
Subsidiary companies DCM Shriram Credit and Investments Limited (DSCIL) DSCL Energy Services Company Limited (DESL) DCM Shriram International Limited (DSIL) (100% subsidiary company of DSCIL) DCM Shriram Infrastructure Limited (DCMSIL) (99.99 % subsidiary of DSCIL) Anant Thermal Energy Limited(ATEL) (99.99 % subsidiary of DSCIL) Hariyali Finance Foundation # (100% subsidiary of DSCIL) DCM Shriram Energy and Infrastructure Limited # Hariyali Rural Ventures Limited # DCM Shriram Aqua Foods Limited (DSAFL) Bioseeds Limited (BL) Bioseed Vietnam Limited (BVL) (formerly known as Bioseed Genetics Vietnam) (100% subsidiary company of BL) Bioseed Research Vietnam (BRV) (100% subsidiary company of BL) Bioseed Research Philippines Inc (BRP) (100% subsidiary company of BL) Bioseed Research India Private Limited (BRI) (100% subsidiary company of BL) Shriram Bioseed Genetics India Limited (SBGI) Shriram Bioseed (Thailand) Limited (SBTL) (99.99% subsidiary company of SBGI) Shriram Bioseed Ventures Limited (SBVL) # Shriram Bioseed Limited (SBL) # (100% subsidiary company of SBVL) Affee Investment Corp (Affee)# (100% subsidiary company of SBL) Bioseed Genetics International Inc. # (100% subsidiary company of Affee) Zeus Investments Limited # (100% subsidiary company of Affee) c)
India India India India India India India India India Mauritius Vietnam Vietnam Philippines India India Thailand India Mauritius British Virgin Island Panama Mauritius
(iii)
# subsidiary from current year. These Consolidated Financial Statements are based, in so far as they relate to amounts included in respect of subsidiaries on the audited financial statements prepared for consolidation by the concerned subsidiaries in accordance with the requirements of AS 21 Consolidated Financial Statements issued by the Institute of Chartered Accountants of India. Fixed assets and depreciation a) Owned assets Fixed assets (assets acquired in Shriram Bioseed Genetics India Limited which have been revalued and are stated at revalued figure) are stated at cost less accumulated depreciation. Cost of acquisition or construction is inclusive of freight, duties, taxes and incidental expenses and interest on loans attributable to the acquisition of assets up to the date of commissioning of assets. Capital subsidy received against specific asset is reduced from the value of relevant fixed asset.
96

14.
(Continued)
NOTES TO THE CONSOLIDATED ACCOUNTS (Continued)

The Company is following the straight-line method of depreciation in respect of buildings, plant and machinery and written down value method in respect of other assets. Depreciation is provided at the rates as specified in schedule XIV to the Companies Act, 1956, except in the case of: Depreciation Rate catalyst tubes 12.50% cell units 10.00% certain other plant and machinery items 16.67% office and other equipments 25.00% Depreciation is calculated on a pro-rata basis from the date of additions, except in the case of assets costing upto Rs.5000 each, where each such asset is fully depreciated in the year of purchase. Depreciation (amortisation) on intangibles is provided on straight line method as follows: Technical know-how is amortised over its estimated economic useful life of 10 years Brand is amortised over a period of 10 years. Software is amortised over a period of 5 years. On assets sold, discarded, etc. during the year, depreciation is provided upto the date of sale/discard. b) Assets taken on finance lease Fixed assets taken on finance lease on or after April 1, 2001 are stated at the lower of the fair value of the lease assets or the present value of the minimum lease payments at the inception of the lease. In respect of fixed assets taken on finance lease, when there is reasonable certainty that the Company will obtain ownership by the end of the lease term, depreciation is provided in accordance with the policy followed by the Company for owned assets. (iv) Foreign currency transactions and derivatives a) Transactions in foreign currency are recorded on initial recognition at the exchange rate prevailing at the time of transaction. Monetary items (i.e. receivables, payables, loans etc.) denominated in foreign currency are reported using the closing exchange rate on each balance sheet date. The exchange differences arising on the settlement of monetary items or on reporting these items at rates different from rates at which these were initially recorded/reported in previous financial statements are recognized as income/expense in the period in which they arise except that such exchange differences which relate to fixed assets acquired upto March 31, 2004 are capitalised in the carrying amount of these assets and those exchange differences which relate to fixed assets acquired from outside India during April 1, 2004 to March 31, 2007 have been capitalised till March 31, 2007. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts, is amortised as income or expense over the life of the contract. Further exchange difference on such contracts i.e. difference between the exchange rate at the reporting / settlement date and the exchange rate on the date of inception of contract/the last reporting date, is recognized as income/ expense for the period except that such exchange differences which relate to fixed assets acquired upto March 31, 2004 are capitalised in the carrying amount of these assets and those exchange differences which relate to fixed assets acquired from outside India during April 1, 2004 to March 31, 2007 have been capitalised till March 31, 2007. b) In case of foreign subsidiaries, the assets and liabilities have been translated into Indian Rupees at the closing exchange rate at the year end whereas revenues and expenses reflected in the profit and loss account have been translated into Indian Rupees at monthly average exchange rate for the reporting period. The resultant translation exchange differences are accumulated in Foreign currency translation reserve to be recognised as income or expense in the period in which net investment in concerned foreign subsidiary is disposed off. (v) Inventories Stores and spares are valued at cost or under. Stock-in-trade is valued at Cost or net realisable value, whichever is lower. The basis of determining cost (which also includes taxes and duties wherever applicable) for different categories of inventory are as follows: Stores, spares and raw materials Weighted average rate. Stock-in-trade Process stocks and finished goods Direct cost plus appropriate share of overheads after giving credit for other income and excluding certain expenses like ex-gratia and gratuity. By-products At estimated realisable value Securities are valued at cost or market/realisable value, whichever is lower. (vi) Revenue recognition a) Revenue in respect of sale of products is recognised at the point of despatch to customer. b) Under the retention pricing scheme, the Government of India reimburses to the fertiliser industry, the difference between the retention price based on the cost of production and selling price (as realised from the farmers) as fixed by the Government from time to time, in the form of subsidy. The effect of variation in input costs/expenses on retention price yet to be notified is accounted for by the Company as income for the year based on its assessment of ultimate collection with reasonable degree of certainty at the time of accrual. c) The Company accrues concession/subsidy on traded Phosphatic and Potassic fertilisers pending notification by Government of India, based on its assessment of ultimate collection thereof with reasonable degree of certainity. d) Revenue in respect of income from services is recognized on proportionate completion method. (vii) Investments Long term investments are stated at cost unless there is a permanent fall in value thereof. Current investments are stated at cost or net realisable value, whichever is less.
97

14.
(Continued)

(viii) Employee benefits Companys contributions paid/payable during the year to provident fund, superannuation fund and employees state insurance corporation are recognised in the profit and loss account. For the Provident Fund Trust administered by the Company, the Company is liable to meet the shortfall, if any, in payment of interest at the rates declared by the Central Government, such shortfall is recognised in the year of actual payment. Provisions for gratuity and compensated absences are determined on an acturial basis at the end of the year are charged to revenue each year. (ix) Research and development The revenue expenditure on research and development is charged as an expense in the year in which it is incurred. Capital expenditure is included in fixed assets. (x) Agricultural cost Agricultural costs of Shriram Bioseed Genetics India Limited are accounted for as per the on going contracts. (xi) Income-tax The Income-tax liability is provided in accordance with the provisions of the Income-tax Act, 1961. Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. This Year (Rs. Crores) 2. (i) Contingent liabilities not provided for: Claims* (excluding claims by employees where amount not ascertainable) not acknowledged as debts: Sales tax matters Excise Matters Additional Premium on Land Others Total * all the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not, in the opinion of management, have a material effect on results of operations or financial position of the Company. (ii) (iii) Capital commitments (net of advances) Guarantees given to financial institutions, banks and other parties in respect of loans availed by subsidiaries and other parties: Amount guaranteed 94.04 1.85 0.52 75.69 1.85 0.48 Previous Year (Rs. Crores)
1.33 2.30 8.11 7.40 19.14
1.40 2.27 8.11 8.24 20.02
3.
In accordance with past practice, the Company has taken revenue credits aggregating Rs. 14.21 crores (2006-2007 - Rs. 109.80 crores) for urea subsidy claims , which are pending notification/ final acceptance by Fertiliser Industry Coordination Committee (FICC), Government of India, in pursuance of the Retention Price Scheme administered for nitrogenous fertilisers. Similarly, revenue credits aggregating Rs. 0.27 crore (2006-07- Rs. Nil) for subsidy claims relating to Di-Ammonium Phosphate and Murite of Potash have been taken which are pending notification of final rates of concession/subsidy by the Government of India, Ministry of Chemicals and Fertilisers. Necessary adjustment to revenue credits so accrued will be made on issuance of notification by FICC/Government of India, Ministry of Chemicals and Fertilisers or final settlement thereof. The Honble Supreme Court vide its Order dated December 11, 1996 directed that the Aqua projects shall be allowed to be developed after the projects are granted approval by an Authority to be constituted by the Central Government, which is still pending. DCM Shriram Aqua Foods Limited (DSAFL) is monitoring the developments in this regard and will take appropriate actions in due course. However, DSAFL, in the year 2001-2002, based on a valuation of its assets carried out by an independent valuer had out of abundant caution made a provision for contingencies of Rs. 4.00 crores towards the possible diminution in the value of its assets.
4.
5.
Sundry debtors of Shriram Bioseed Genetics India Limited (SBGI) include Rs. 1.16 crores (2006-07 Rs. 1.16 crores) in respect of a debtor against whom legal action for recovery has been initiated. In the opinion of the management of SBGI, this outstanding is considered fully recoverable and therefore, has not been provided for. 6. Segment reporting A. Business segments : Based on the guiding principles given in Accounting Standard AS-17 Segment Reporting issued by the Institute of Chartered Accountants of India, the Companys business segments include: Fertilisers (manufacturing of urea), Plastics (manufacturing of polyvinyl chloride and carbide), Chemicals (manufacturing of chlor alkali products), Agri inputs - Trading (trading of di ammonia phosphate, murate of potash, super phosphate, other fertilisers, seeds and pesticides),Cement (manufacturing of cement), Sugar (manufacturing of sugar products and co-generation of Power), Hariyali Kisaan Bazaar (Rural retail and agri businesses), Others (energy services, textiles, manufacturing of compounds and UPVC Window Systems and plaster of paris). B. Geographical segments: Since the Companys activities/operations are primarily within the country and considering the nature of products/services it deals in, the risks and returns are same and as such there is only one geographical segment.
98

14.
C.
(Continued)

Segment accounting policies: In addition to the significant accounting policies applicable to the business segments as set out in note 1 above, the accounting policies in relation to segment accounting are as under: a) Segment revenue and expenses: Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments. b) Segment assets and liabilities: Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include deferred income taxes. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amounts of certain assets/liabilities pertaining to two or more segments are allocated to the segments on a reasonable basis. c) Inter segment sales: Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation.
Rs. Crores
D. Information about business segments:

PARTICULARS Fertiliser Plastics Chemicals Agri Inputs- Trading This Previous Year Year Sugar Cement Hariyali Kisaan Bazaar This Previous Year Year Others Elimination Total
This Previous Year Year 1. REVENUE External sales Income from services Inter segment sales Total revenue 2. RESULTS Segment results Unallocated expenses (net of income) Operating profit Interest expense Profit before tax and exceptional items Profit on sale of SBM land redevelopment project Provision for diminution in value of Fertiliser bonds Profit before tax Provision for taxation Net profit 3. OTHER INFORMATION A. ASSETS Segment assets Unallocated assets Total assets B. LIABILITIES Segment liabilities Share capital and reserves Secured and unsecured loans Unallocated liabilities Total liabilities C. OTHERS Capital expenditure Depreciation Non cash expenses other than depreciation 5.11 13.06 0.30 55.15 11.38 94.94 116.63 19.69 11.46
703.17 647.32 374.97 0.06 0.38 46.15
349.91 374.68 395.38 134.31 698.43 502.22 373.29 139.55 36.52 16.91 12.98 1.98 0.62 0.27 0.41 0.04
121.05 217.98 3.09 121.05 221.07
115.48 323.20 237.37 4.67 4.43 1.85 0.56 9.46 117.33 328.43 251.26
2770.08 2938.23 4.67 4.43 69.06 69.06 62.22 62.22 2774.75 2942.66
703.23 647.70 421.12 386.43 391.59 408.36 136.29 699.05 502.49 373.70 139.59
67.58
63.89
81.39
117.84
7.27 (17.61)
(4.99)
3.76
27.63
27.75 (29.64) (12.18)
(9.23)
(8.61)
159.70 186.30 (55.86) (40.08) 103.84 146.22 87.61 16.23 779.64 9.52 786.35 113.64 672.71 79.09 67.13 67.13 23.73 43.40
19.69
11.46
67.58
63.89
81.39
117.84
7.27 (17.61)
(4.99)
3.76
27.63
27.75 (29.64) (12.18)
(9.23)
(8.61)
301.11 454.24 294.41 293.63 614.40 397.63
72.89 187.95 1394.76 1262.36
36.09
34.80 305.85 130.13 371.82 352.39
3391.33 3113.13 242.93 77.97 3634.26 3191.10
301.11 454.24 294.41 293.63 614.40 397.63
72.89 187.95 1394.76 1262.36
36.09
34.80 305.85 130.13 371.82 352.39
32.68
28.20
96.16
17.28
28.11 377.78 140.32 247.09
10.30
8.39
25.38
7.23
61.53
47.50
489.42 850.10 1149.27 554.05 1783.44 1547.21 212.13 239.74 3634.26 3191.10
94.94
116.63
32.68
28.20
96.16
17.28
28.11 377.78 140.32 247.09
10.30
8.39
25.38
7.23
61.53
47.50
8.47 17.25 0.06
12.26 225.30 16.49 30.37 0.07 0.24
48.64 28.24 1.00
0.01 0.05 0.03
0.12 0.05 0.22
20.30 41.76 0.22
391.90 20.04 -
1.98 2.96 -
4.10 2.79 -
98.85 5.06 -
67.34 1.90 -
60.03 11.68 0.85
22.97 9.74 1.11
99

7.
(Continued)
14. NOTES TO THE CONSOLIDATED ACCOUNTS (Continued)

Disclosure in respect of assets taken on lease on or after April 1, 2001 under Accounting Standard AS-19 Leases. (i) General description of the finance lease: Bioseed Research Philippines Inc has entered into finance lease arrangement for vehicles and office equipment. Some of the significant terms and conditions of such leases are as under: (ii) renewal for a further period on such terms and conditions as may be mutually agreed upon between lessor and the Company. assets to be purchased by the Company or the nominee appointed by the Company at the end of the lease term. Rs. Crores Later than one year but not later than five years This year 0.26 0.06 0.20 Previous year 0.42 0.08 0.34
Reconciliation between the total of minimum lease payments at the balance sheet date and their present value: Total This year Previous year 0.63 0.12 0.51 This year 0.19 0.03 0.16 Not later than one year Previous year 0.21 0.04 0.17
Total of minimum lease payments at the balance sheet date Less: Future finance charges Present value of minimum lease payments at the balance sheet date
0.44 0.08 0.36
8.
Earnings per share This Year Net profit for the year as per profit and loss account (Rs. Crores) Exceptional income, net of taxes of Rs. 105.62 crores (Rs. Crores) Net Profit after tax but before exceptional items (Rs. Crores) Basic/Weighted average number of equity shares outstanding * Basic and diluted earnings per share in rupees (face value Rs.2 per share) - Before exceptional item - After exceptional item 0.49 40.55 2.63 2.63 672.71 664.50 8.21 165,903,320 Previous Year 43.71 43.71 165,903,320
9.
Related party disclosures under Accounting Standard -18 A. Name of related party and nature of related party relationship Key Managerial Persons, their relatives and HUFs : Mr. Ajay S.Shriram, Mr. Vikram S.Shriram, Mr. Rajiv Sinha, Mr. Ajit S.Shriram, Mr. Aditya A. Shriram (relative of Mr. Ajay S. Shriram), Mrs. Divya Sinha (relative of Mr. Rajiv Sinha), M/s. Ajay S.Shriram (HUF), M/s. Vikram S.Shriram (HUF), Mr. N.J. Singh B. Transactions with Key Managerial Persons, their relatives and HUFs. Key Managerial Personnel, their relatives and HUFs This Year Rs. Crores Hire of premises - rent paid Security deposit given Security deposit received back Managerial remuneration including commission Remuneration paid Balance outstanding as at the year end - Security deposits for premises hired - Fixed deposits 2.10 1.00 0.07 3.82 8.77 0.07 Previous Year Rs. Crores 1.08 2.77 0.07 5.11 0.05 7.84 0.07
10. Amount of borrowing costs capitalised to fixed assets during the year Rs. 5.24 crores (2006-2007 - Rs. 13.97 crores).
100

14.
(Continued)

11. Details of Pre-operative expenses pending allocation included under Capital work in progress in Schedule 5 is as under:
(Rs. in crores) Particulars This Year 0.06 3.11 0.17 0.03 0.02 0.58 2.36 8.32 3.39 5.24 0.01 23.29 Previous Year 50.80 3.83 3.95 1.13 8.69 0.65 0.71 0.06 0.33 0.07 0.10 8.62 3.57 7.95 12.83 0.59 103.88 0.26 3.37 51.46 48.79 54.11 58.29 44.61
Raw materials consumed Stores, spares and components Power, fuel etc. Repairs: Plant and machinery Salaries, wages, bonus, gratuity, commission etc. Provident and other funds Welfare Rent Insurance Rates and taxes Freight and transport Exchange fluctuation Increase/(decrease) in excise duty on finished goods Miscellaneous expenses Interest Depreciation Less: Other income Inventory produced during trial run Process stock Finished goods Add: Brought forward from the previous year Less: Capitalised during the year Transferred to capital work-in-progress
23.29 44.61 46.10 21.80
12. Provision for contingencies aggregating to Rs. 12.09 crores (2006-2007 - Rs. 12.09 crores) in Schedule 8 represents the maximum possible exposure on ultimate settlement of issues relating to reconstruction arrangement of the companies. 13. Category wise quantitative data about Derivative Instruments: Nature of Derivative Number of deals This Year US Dollar Interest rate swap JPY Interest rate swap Overnight Index swap Currency swap 5 1 Previous Year 4 2 3 1 This Year Hedging Hedging Purpose Previous Year Hedging Hedging Hedging Conversion of Indian Rupee in to USD Conversion of Indian Rupee denominated Principal into USD Conversion of Indian Rupee denominated Principal into CHF Conversion of Indian Rupee denominated coupons into USD coupons Hedging Amount in foreign currency (in Crores) This Year USD 3.1 Previous Year USD 2.30 JPY 114.33 USD 0.57 Amount in Rs. Crores This Year 124.00 25.00 Previous Year 100.03 42.07 75.00 25.00
Principal swap
USD 0.50
21.75
Principal swap
CHF 0.70
25.00
Coupon swap
Options
Conversion of Indian Rupee denominated coupons into USD coupons Hedging
USD 0.5
USD 0.41
20.00
17.74
USD 0.50
USD 0.50
20.00
21.75
101

14.
(Continued)

This Year Amount in foreign currency (in Crores) USD 2.25 USD 0.17 EURO 0.006 JPY 1.62 USD 0.08 GBP 0.001 EURO 0.005 Amount in Rs. Crores 90.15 6.78 0.36 0.65 3.39 0.06 0.31 Previous Year Amount in foreign currency (in Crores) USD 2.22 USD 1.12 EURO 0.00035 JPY 1.13 USD 0.0120 EURO 0.00032 Amount in Rs. Crores 96.70 49.00 0.02 0.42 0.53 0.02-
Foreign Currency exposures that are not hedged by derivative instruments or otherwise is as follows: Particulars
Loans Current liabilities
Current Assets
14. In view of the financial statements of companies, which became subsidiaries during the year, being incorporated in these consolidated financial statements, net fixed assets are higher by Rs. 36.54 crores, current assets and loans and advances are higher by Rs. 0.85 crores, current liabilities are higher by Rs. 0.08 crores, and profit after tax is lower by Rs. 0.12 crores. 15. MAT Credit entitlement and deferred tax charge for the year includes Rs. Nil (2006-07 Rs. 3.00 crores) relating to earlier year. 16. The Company has accounted for cane purchases for sugar season 2007-08 at Rs. 110 per quintal, the rate fixed by the Honble Allahabad High Court (Lucknow Bench) for all sugar factories in the State of Uttar Pradesh for paying the cost of sugar cane to cane growers as an interim measure, against the price of Rs. 125 per quintal fixed by the Uttar Pradesh State Government. The necessary adjustments will be made in accordance with subsequent orders of the Honble court in the matter. 17. During the year, as required by the Accounting Standard-11 The effect of changes in foreign exchange rates the exchange gain on forex loans taken for the purpose of acquiring fixed assets from outside India has been credited to profit and loss account as against the policy hitherto followed of adjusting such gains in carrying amount of concerned fixed assets as per the provisions of Schedule VI- Part I of the Companies Act, 1956. Due to this change, profit before tax for the year and fixed assets are higher by Rs. 0.22 crores. 18. During the year, the Company has decided to test goodwill for impairment loss, if any, instead of amortising it over a period of ten years as was being hitherto done. Consequently, the depreciation charge for the year is lower by Rs. 1.92 crores and profit after tax for the year is higher by Rs. 1.92 crores. 19. Employee Benefits The Company and its subsidiaries has during the year adopted Accounting Standard 15 (revised 2005) Employee Benefits. In accordance with the revised accounting standard, the transitional liability, net of deferred tax, amounting to Rs. 11.49 crores and Rs 0.19 crores has been reduced from opening balance of general reserve and profit and loss account respectively. The various benefits provided to employees are classified as under:i) Defined contribution plans a) Superannuation fund b) Provident fund c) Employees state insurance corporation During the year, the following amounts are recognized in the profit and loss account: Rs. In crores - Employers contribution to provident fund 9.95 - Employers contribution to superannuation fund 9.02 - Employees state insurance corporation 0.21 ii) Defined benefit plans a) Gratuity b) Compensated absences Earned leave/ sick leave In accordance with Accounting Standard 15 (revised 2005), acturial valuation was done in respect of the aforesaid defined benefit plans based on the following assumptions-
102

14.
(Continued)

This Year (Rs. In crores) Compensated absences Gratuity (Funded) Gratuity (Unfunded) 8% 7% LIC (1994-96) duly modified 58/60 years 3% 2% 1% 2.60 2.95 2.55 8.10 Earned leave (Unfunded) 8% 7% LIC (1994-96) duly modified 58/60 years 3% 2% 1% 3.05 1.04 0.23 4.32 Sick leave (Unfunded) 8% 7% LIC (1994-96) duly modified 58/60 years 3% 2% 1% 0.87 0.80 (0.46) 1.21
Discount rate (per annum) Future salary increase Expected rate of return on plan assets In service mortality Retirement age Withdrawal rates: upto 30 years upto 44 years above 44 years I. Expense recognised in profit and loss account Current service cost Interest cost Expected return on plan assets Net actuarial( gain) / loss recognised in the year
8% 4% 8% LIC (1994-96) duly modified 58/60 years 5% 5% 5% 0.06 0.02 (0.03) 0.07 0.12
Total expense II. Net asset/(liability) recognised in the balance sheet as at March 31, 2008 Present value of Defined benefit obligation Fair value of plan assets Funded status [surplus/(deficit)] Net asset/(liability) as at March 31, 2008 III. Change in the present value of obligation during the year Present value of obligation as at the beginning of the year Interest cost Current service cost Benefits paid Actuarial (gains) / losses on obligation Present value of obligation as at the end of the year IV. Change in fair value of assets during the year Fair value of plan assets at the beginning of the year Expected return on plan assets Contributions by employer Actual benefits paid Fair value of plan assets at the end of the year Actual return on plan assets V. The major categories of plan assets as a percentage of total plan Funded with LIC
0.34 0.28 (0.06) (0.06) 0.21 0.02 0.06 (0.02) 0.07 0.34 0.25 0.03 0.06 0.06 0.28 0.03 100%
40.77 (40.77) (40.77) 36.81 2.95 2.60 (4.14) 2.55 40.77 -
15.55 (15.55) (15.55) 13.12 1.04 3.05 (1.89) 0.23 15.55 -
11.27 (11.27) (11.27) 9.98 0.80 0.87 (0.38) 11.27 -
20. Excise duty on sales has been deducted from gross sales on the face of profit and loss account. Increase/ (decrease) in excise duty on finished goods has been shown under the head Manufacturing and other expenses in schedule 10. 21 Previous years figures have been recast, wherever necessary. 22. Schedules 1 to 14 form an integral part of the financial statements.
103
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Contents

Auditors Subsidiary Companies

Stock Exchanges where the Securities of the Company are Listed

Rs. 26.40 Crores

Rs. 7.50 Crores

Rs. 7.50 Crores

DSCL ANNUAL REPORT 07-08

Rs. 140 Crores

By Order of the Board

New Delhi 13th May, 2008

(B.L. SACHDEVA) Company Secretary

DSCL ANNUAL REPORT 07-08

DSCL ANNUAL REPORT 07-08

DSCL ANNUAL REPORT 07-08

Chairman/Member of the Committee(s) of the Board of Directors of the Company

Chairman Audit Committee Member Shareholders/Investors Grievance Committee

Member Audit Committee

Number of Shares held in the Company

DSCL ANNUAL REPORT 07-08

EXPLANATORY STATEMENT (Pursuant to Section 173(2) of the Companies Act, 1956)

DSCL ANNUAL REPORT 07-08

With best wishes,

(VIKRAM S. SHRIRAM) Vice Chairman & Managing Director

(AJAY S. SHRIRAM) Chairman & Sr. Managing Director

DSCL ANNUAL REPORT 07-08

Company Secretary Audit Committee

Shri B.L. Sachdeva

DSCL ANNUAL REPORT 07-08

Brief Profile of Directors of the Company

DSCL ANNUAL REPORT 07-08

DSCL ANNUAL REPORT 07-08

DSCL ANNUAL REPORT 07-08

Business-wise performance review and outlook Chloro-Vinyl Businesses

DSCL ANNUAL REPORT 07-08

Product FY2008 FY2007 % Change

Volume (MT) 1,66,526 1,71,160 (2.71)%

Realization (Rs. / MT) 18,276 18,621 (1.85) %

PVC Resin & Calcium Carbide

Product FY2008 FY2007 % Change

Volume (MT) 67,388 64,680 4.19%

Realisation (Rs. / MT) 46,712 42,940 8.78 %

Amount (Rs. Crore) 703.2 19.7 206.2

% of Total 27.5 13 7.5

Product FY2008 FY2007 % Change

Volume (MT) 378,913 363,268 4.31%

Realisation (Rs. / MT) 18,642 17,830 4.55 %

(Figures in Lac Qts)

106 58.9 9.53 5.6

64.5 299.2 370.1 10.01 10.19 10.04 6.4 30.5 37.1

9.53 10.28 10.45 10.07 8.8 6.3 6.4 6.7

Cane crushed 137.2 131.1 Sugar Produced 14.5

70.7 6.8 5.1

82.2 7.8 7.9

66.7 56.0 6.9 5.5 5.7 0.5

81.6 8.4 5.6

49.7 356.3 319.1 4.8 0.3 36.7 31.9

DSCL ANNUAL REPORT 07-08

Particulars Sales PBIT Capital Employed

Amount (Rs. Crore) 118.66 27.63 25.79

% of Total 4.64 18.24 0.93

Product FY2008 FY2007 % Shift

Volume (MT) 3,68,607 3,69,129 (0.1)%