MIRA INFORM REPORT

Report Date :

3^rd May 2006

IDENTIFICATION DETAILS

Name :	DCM SHRIRAM CONSOLIDATED LIMITED
Registered Office :	6^th Floor, Kanchanjunga Building, 18, Barakhamba Road, New Delhi - 110 001, India
Country :	India
Financials (as on) :	31.03.2005
Date of Incorporation :	6^th February, 1989
CIN No.:	L74899DL1989PLC034923
Com. Reg. No.:	55-34923
TAN No.: (Tax Deduction & Collection Account No.)	DELD04602D / DELD08433F
PAN No.: (Permanent Account No.)	AAACD0097R
Legal Form :	It is a public limited liability company. The company's shares are listed on the Stock Exchanges.
Line of Business :	The company is engaged in manufacturing of Fertilisers, Urea, Ammonia, Cement, Caustic Soda, Chlorine, HCI, PAC, SBP, Hydrochloric Acid, Calcium Carbide, PVC Resin, Textile Products, Sugar and Energy Management Services.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 17500000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and diversified company having satisfactory track. Directors are reported as experienced, respectable and resourceful industrialists. Their trade relations are reported as fair. Financial position is satisfactory. Payments are reported as slow but correct. The company can be considered good for normal business dealings.

LOCATIONS

Registered Office :	6^th Floor, Kanchanjunga Building, 18, Barakhamba Road, New Delhi - 110 001, India
Tel. No.:	91-11-23316801 / 8069
Fax No.:	91-11-23357803 / 23318072 / 2371 9570
E-Mail :	dscl@giasdl01.vsnl.net.in dscl@dscl.com
Website :	http://www.dscl.com
Corporate Office :	5^th 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
Factory 1 :	Ø 749, GIDC Industrial Estate, Jhagadia, Dist. Bharuch - 393110, Gujarat Tel. No. 91-2645-220355/226021-27 Fax. No. 91-2645-226037 Ø Shriram Nagar, Kota - 324004, Rajasthan, Tel. No. 91-744-2423391-98 Fax. No. 91-744-2423296 Ø A-315, Road, No. 2, M.I.A., Alwar, Rajasthan Tel. No. 91-144-281915/281916 Village Ajbapur, P. O. Jungbahadur Gang, Lakhimpur Kheri - 361505, Uttar Pradesh Telefax. No. 91-5842-222195/225249 Ø F-91, RIICO Industrial Area, Tonk, Rajasthan Tel. No. 91-1432-243874 Fax. No. 91-1432-243242
Marketing office.:	Ø Kirti Mahal, 19, Rajendra Place, New Delhi - 110 008 Tel. No. 91-11-25713442/25722296 Fax. No. 91-11-25768135 Ø Shivaji Marg, New Delhi - 110 015 Tel. No. 91-11-25104410/25747836 Fax. No. 91-11-25455362/25739816 Ø 5^th Floor, Kanchenjunga Building, 18, Barakhamba Road, New Delhi - 110 001 Tel. No. 91-11-23316801-9 Fax. No. 91-11-23318072 Ø Shivaji Marg, New Delhi - 110 015 Tel. No. 91-11-25104410/25747836 Fax. No. 91-11-25455362/25739816
Sales office :	Located at : Ø Kirti Mahal, 19, Rajendra Place, New Delhi - 110 008 Tel. No. 91-11-25713442/25722296 Fax. No. 91-11-25768135 Ø Vaswani Chambers, 3^rd Floor, 264/265, Dr. Annie Besant Road, Prabhadevi, Mumbai - 400 025, Maharashtra Tel. No. 91-22-24303388/24303379/24304922 Fax. No. 91-22-24307954 Ø Crown Aluminium House, 23, Brabourne Road, Kolkata - 700019, West Bengal Tel. No. 91-33-22421101 Ø Meco House, 3^rd Floor, 47, Mount Road, Chennai - 600 002, Tamilnadu Tel. No. 91-44-28536322 Ø 74-Ratlam Kothi, Mumbai-Agra Road, Indore - 452 001, Madhya Pradesh Tel. No. 91-731-2523181 Fax. No. 91-731-2515281 Ø Model Housing, 6-3-456/A/1, Panjagutta, Hyderabad - 500 482, Andhra Pradesh Tel. No. 91-40-23356220 Fax. No. 91-40-23356220 Ø M. I. Road, Jaipur - 302 001, Rajasthan Tel. No. 91-141-236778/2372017/2365162 Fax. No. 91-141-2375916 Ø 6 South Model Gram, Ludhiana - 141 001, Punbab Tel. No. 91-161-2430740 Ø Jhalawar Road, Kota - 324 002, Rajasthan Tel. No. 91-744-2425278/2420796 Fax. No. 91-744-2425542 Ø A-203, Saket, Meerut - 250 002, Uttar Pradesh Tel. No. 91-121-2647001/2649076 Fax. No. 91-121-2645766 Ø IG-32, Gagan Path, Jawahar Nagar, Sriganganagar - 335001, Rajasthan Tel. No. 91-154-2460307 Fax. No. 91-154-2460307

DIRECTORS

Name :	Mr. Ajay S. Shriram
Designation :	Chairman
Name :	Mr. Vikram S. Shriram
Designation :	Vice Chairman & Managing Director
Name :	Mr. Rajiv Sinha
Designation :	Deputy Managing Director
Name :	Mr. Ajit S. Shriram
Designation :	Director (Sugar)
Name :	Dr. S. S. Baijal
Designation :	Director
Name :	Mr. Arun Bharat Ram
Designation :	Director
Name :	Mr. Pradeep Dinodia
Designation :	Director
Name :	Shri Vimal Bhandari
Designation :	Director
Name :	Shri Sunil Kant Munjal
Designation :	Director
Name :	Shri D. Sengupta
Designation :	Director
Name :	Shri O.V. Bundeliu
Designation :	IDBI Nominee
Name :	Shri S.L Mohan
Designation :	CIC Nominee
Name :	Shri S. C. Bhargava
Designation :	LIC Nominee
Name :	Shri V.P. Agarwal
Designation :	Company Secretary

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters, Relatives and Associates	90,49,672	54.55
Financial Institutions/Banks	24,15,159	14.56
Foreign Institutional Investors/ Overseas Corporate Bodies/ Non-Resident Indians	17,45,215	10.52
Mutual Funds	9,40,401	5.67
Bodies Corporate	3,24,016	1.95
General Public	21,15,869	12.75
TOTAL	1,65,90,332	100.00

BUSINESS DETAILS

Line of Business :

The company is engaged in manufacturing of Fertilisers, Urea, Ammonia, Cement, Caustic Soda, Chlorine, HCI, PAC, SBP, Hydrochloric Acid, Calcium Carbide, PVC Resin, Textile Products, Sugar and Energy Management Services.

Products :

Item Code No.	Product Description
310210.00	Urea
390410.00	Polyvinyl Chloride
281512.00	Caustic Soda

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Ammonia	MT	200000	198000	--
Urea	MT	330000	330000	379000
Calcium Carbide	MT	56100	56100	10328
PVC resins / compounds	MT	26400	33000	39001
Caustic Soda	MT	102050	132500	111805
Chlorine	MT	63420	80250	66146
Hydrochloric acid (100%)	MT	36000	69750	30074
Compressed Hydrogen	MT	620	1565	370
Stable Bleaching Powder	MT	9900	9900	7460
Poly Aluminium Chloride	MT	--	--	--
Cement	MT	200000	400000	320745
Yarn	Spindles Nos.	45384	8880	1838
Cloth	Looms Nos.	--	--	--
Sugar	MT	9500	11000	151486
UPVC Windows	Nos.	--	36000	10367
PVC Compounds	MT	--	23400	4002

GENERAL INFORMATION

No. of Employees :

6000

Bankers :

Ø Punjab National Bank

Ø Bank of Baroda

Ø Oriental Bank of Commerce

Ø State Bank of India

Facilities :

Secured Loan	(Rs in millions)
Debentures	310.000
Loans from banks on cash credit account	12.900
Other loans	4357.700
Unsecured Loan
Deposits
Fixed	129.200
Others	245.200
Interest accrued and due on deposits	3.400
Short term loans and advances
Banks	1535.000
Others	350.000
Finance lease liability	2.300

Banking Relations :	Satisfactory
Auditors :	A. F. Ferguson & Company Chartered Accountants
Subsidiaries :	Ø DCM Shriram Credit & Investment Limited Ø DCM Shriram Aqua Foods Limited Ø Ghaghara Sugar Limited Ø DCM Shriram International Limited Ø Trireme Poly Tech Limited (Formerly known as DCM Shriram Exports Limited)
MEMBERSHIPS:	Ø Confederation of Indian Industry

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
49990000	Equity shares	Rs. 10 each	Rs. 499.900 millions
6501000	Cumulative Redeemable Preference shares	Rs. 100 each	Rs. 650.100 millions
			Rs. 1150.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
17370332	Equity shares	Rs. 10 each	Rs. 173.700 millions
16590332	Equity shares	Rs. 10 each	Rs. 165.900 millions
Less :	Calls unpaid		Rs. 1.600 millions
			Rs. 167.500 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		167.500	167.500
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		4254.900	3535.600
4] (Accumulated Losses)		0.000	0.000
NETWORTH		4422.400	3703.100
LOAN FUNDS
1] Secured Loans		4680.600	3484.400
2] Unsecured Loans		2265.100	1101.800
TOTAL BORROWING		6945.700	4586.200
DEFERRED TAX LIABILITIES		961.600	1108.800
TOTAL		12329.700	9398.100
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		6879.400	5418.700
Capital work-in-progress		1517.600	708.600
		8397	6127.3
INVESTMENT		563.700	741.100
DEFERREX TAX ASSETS
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	3040.000	2054.700
	Sundry Debtors	3036.100	1825.100
	Cash & Bank Balances	255.000	421.300
	Other Current Assets	0.000	0.000
	Loans & Advances	966.100	905.700
Total Current Assets		7297.200	5206.800
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	3371.100	2346.200
	Provisions	557.100	330.900
Total Current Liabilities		3928.200	2677.100
Net Current Assets		3369.000	2529.700
MISCELLANEOUS EXPENSES		0.000	0.000
TOTAL		12329.700	9398.100

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2005	31.03.2004
Sales Turnover [including other income]	18094.500	14120.300
Profit/(Loss) Before Tax	1099.400	1029.800
Provision for Taxation	55.100	263.000
Profit/(Loss) After Tax	1044.300	766.800
Export Value	1.400	0.100
Import Value	584.600	148.600
Total Expenditure	15823.500	12173.800

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2005	30.09.2005	31.12.2005	31.03.2006
Type	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr
Sales Turnover	5840.500	5588.900	6742.500	5154.100
Other Income	29.700	17.600	64.600	61.300
Total Income	5870.200	5606.500	6807.100	5215.400
Total Expenditure	5052.900	4970.900	6156.000	4482.000
Operating Profit	817.300	635.600	651.100	733.400
Interest	114.900	98.400	122.700	148.500
Gross Profit	702.400	537.200	528.400	584.900
Depreciation	151.600	160.400	190.700	199.200
Tax	190.400	-23.400	-32.900	47.000
Reported PAT	385.800	261.400	244.500	260.200

200506 Quarter 1 –

Notes Gross Sales Own Products Rs 4503.40 million Traded Products Rs 1679.50 million Expenditure includes Increase/Decrease in stock in Trade - Own Products Rs 621.70 million - Traded Products Rs (659.80) million Consumption of Raw Material Rs 1384.50 million Purchases and related cost - Traded Products Rs 2300.70 million Power & Fuel Rs 683.90 million Personnel Cost Rs 296.40 million Other expenditure Rs 425.50 million Tax Includes Provision for Current Tax Rs 190.40 million Deferred Tax Rs (25.40) million EPS is Basic and Diluted Status of Investor Complaints for the quarter ended June 30, 2005 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 86 Complaints disposed off during the quarter 86 Complaints unresolved at the end of the quarter Nil 1. Figures for the quarter ended June 30,2005 are not comparable to the corresponding quarter of last year, since the current quarter includes the results of 'Shriram PolyTech', consequent to the Scheme of Amalgamation approved by Hon'ble High Court of Delhi and effectuated in the results for year ended March 31, 2005. 2. The Company commissioned on July 21, 2005 its new 30 MVA electric furnace for manufacturing of Calcium Carbide at its Kota complex. 3. Provision for taxation is made based on the best estimate of weighted average annual income - tax rate. 4. Current tax for the quarter ended June 30, 2005 includes Fringe benefit tax also. 5. Previous period figures have been recast, wherever necessary 6. The above results were approved and taken on record by the Board of Directors in their meeting held on July 26, 2005.

200509 Quarter 2 –

Notes : Gross Sales Includes Own Products Rs 4394.10 million Traded Products Rs 1544.30 million Expenditure Includes Increase/Decrease in stock in Trade - Own Products Rs 753.80 million - Traded Products Rs (67.20) million Consumption of Raw Material Rs 1238.80 million Purchases and related cost - Traded Products Rs 1532.90 million Power & Fuel Rs 723.70 million Personnel Cost Rs 318.70 million Other expenditure Rs 470.20 million Tax Includes Provision for Current Tax Rs (23.40) million Deferred Tax Rs 138.80 million EPS is Basic and Diluted Status of Investor Complaints for the quarter ended September 30, 2005 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 70 Complaints disposed off during the quarter 70 Complaints unresolved at the end of the quarter Nil 1. The Board of Directors has declared Interim Dividend of 20% amounting to Rs 66.40 million to all equity shareholders of the Company including the expanded capital consequent to 1:1 Bonus issue. 2. The equity shares of the face value of Rs 10 each were sub-divided into five equity shares of Rs 2/- each w.e.f. October 18, 2005. Further, the Company has allotted bonus shares in the ratio of 1:1 on October 19, 2005. Accordingly earning per share for all the periods in 'Unaudited Financial Results for the Quarter ended September 30, 2005' has been restated, with respect to the enhanced equity share capital after Bonus and revised face value of shares, in accordance with AS-20 on 'Earnings per share' issued by The Institute of Chartered Accountants of India. 3. The Company commissioned the following additional capacities at its manufacturing complex at Kota. - 40 MW coal based captive power plant, Carbide, Monomer, RVCM and Packing/Drying Plant in September, 2005. - expanded PVC Resin capacity from 115 TPD to 175 TPD In October, 2005. 4. Provision for taxation is made based on the best estimate of average annual income - tax rate of the year. 5. Current tax for the quarter and half year ended September 30, 2005 includes fringe benefit tax. 6. Previous period figures have been recast, wherever necessary. 7. The above results were approved and taken on record by the Board of Directors in their meeting held on October 27, 2005. Limited Review The Limited Review, as required under Clause 41 of the Listing Agreement has been completed by the Statutory Auditors, The Limited Review Report for the quarter and half year ended September 30, 2005, does not have any impact on the above Results and Notes in aggregate.

200512 Quarter 3 –

Notes: 1 The equity shares of the face value of Bs. 10 each were sub-divided into five equity shares of Bs. 2/- each w.e.f. 18.10.2005. Further, the Company has allotted bonus shares in the ratio of 1:1 on 19.10.2005. Consequent thereto, the paid up equity share capital of the Company has increased from Rs.16.75 crores to Rs. 33.34 crores. Accordingly earning per share for all the periods in Unaudited Financial Results for the Quarter ended December 31, 2005 has been restated, with respect to the enhanced equity share capital after Bonus and revised face value of shares, in accordance with AS-20 on 'Earnings per share issued by The Institute of Chartered Accountants of India. 2. The Company has paid Interim Dividend of 20% amounting to Bs. 6.64 crores on the expanded equity capital (post bonus). 3. The Company has expanded Sugar Manufacturing capacity from 11000 TCD to 14000 TCD. 4. Consequent to issue of Accounting Standard Interpretation 4 (Revised) - Losses under the head Capital Gains' issued by The Institute of Chartered Accountants of India, the Company has, during the quarter, adjusted deferred tax assets aggregating to Rs. 19.04 crores relating to unabsorbed capital losses as on March 31, 2005 against General Reserve. 5. The Gujarat State Sales Tax Department, based on a notification issued by the Commissioner of Sales Tax, withdrew with retrospective effect the concession of Purchase tax on Furnace oil available to Shriram Alkali and Chemicals, a Unit of the Company and raised a demand for assessment year 2003-04 of Rs. 10.90 crones (including interest and penalty). The Company has been legally advised that this action of the concerned authority is not legally tenable and therefore, no provision has been considered necessary in respect of such demand. 6. Provision for taxation is made based on the best estimate of average annual income - tax rate of the year. Further, Current tax for the quarter and nine months ended December 31, 2005 includes fringe benefit tax, 7. Previous period figures have been recast, wherever necessary. 8. During the quarter, 83 Investor complaints were received, which have all been attended to. No complaints were pending at the beginning or at the end of the quarter. 9. The above results were approved and taken on record by the Board of Directors in their meeting held on January 28, 2006. Limited Review The Limited Review, as required under Clause 41 of the Listing Agreement has been completed by the Statutory Auditors. The Limited Review Report for the quarter ended December 31, 2005, does not have any impact on the above Results and Notes in aggregate.

200603 Quarter 4 –

Notes Gross Sales Includes Own Products Rs 4473.20 million Traded Products Rs 1066.50 million Services Rs 0.30 million Expenditure Includes Increase/Decrease in stock in Trade - Own Products Rs (1219.70) million - Traded Products Rs 198.90 million Consumption of Raw Material Rs 2784.40 million Purchases and related cost - Traded Products Rs 864.70 million Power & Fuel Rs 763.40 million Personnel Cost Rs 331.20 million Other Expenditure Rs 759.10 million Tax Includes Provision for Current Tax Rs 37.20 million MAT Credit Entitlement Rs (14.90) million Current tax of Earlier years Rs 14.50 million Deferred Tax Rs 78.50 million Fringe benefit tax Rs 10.20 million EPS is Basic and Diluted Status of Investor Complaints for the quarter ended March 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 116 Complaints disposed off during the quarter 116 Complaints unresolved at the end of the quarter Nil 1. The Board of Directors has proposed a final dividend of 45% (including interim dividend of 20%) amounting to Rs 149.40 million for the year ended March 31, 2006. 2. The Company has expanded its Caustic Soda Manufacturing capacity at Kota from 250 TPD to 310 TPD in January 2006 3. The equity shares of the face value of Rs 10 each were sub-divided into five equity shares of Rs 2/- each w.e.f. October 18, 2005. Further, the Company has allotted bonus shares in the ratio of 1:1 on October 19, 2005. Accordingly earning per share for all the periods in 'Audited Financial Results for the year ended March 31, 2006 has been restated with respect to the enhanced equity share capital after Bonus and revised face value of shares, in accordance with AS-20 on 'Earnings per share' issued by The Institute of Chartered Accountants of India. 4. Previous period figures have been recast, wherever necessary. 5. The above results were approved and taken on record by the Board of Directors in their meeting held on April 25, 2006.

KEY RATIOS

PARTICULARS	31.03.2005	31.03.2004
Debt Equity Ratio	1.42	1.27
Long Term Debt Equity Ratio	1.05	0.99
Current Ratio	1.06	1.11
TURNOVER RATIOS
Fixed Assets	2.02	1.95
Inventory	7.48	10.77
Debtors	7.84	9.62
Interest Cover Ratio	5.20	3.49
Operating Profit Margin (%)	12.19	13.19
Profit Before Interest and Tax Margin (%)	9.34	9.78
Cash Profit Margin (%)	9.78	8.60
Adjusted Net Profit Margin (%)	6.93	5.20
Return on Capital Employed (%)	18.11	18.64
Return on Net Worth (%)	32.53	22.46

STOCK PRICES

Face Value	Rs. 10.00/-
High	Rs. 121.45/-
Low	Rs. 117.00/-

LOCAL AGENCY FURTHER INFORMATION

The company is in trade terms with:

DAP, Pesticides, Seeds, SSP, Mixtures, Micro, Nutrients and MOP

The company's fixed assets of important value include land, buildings, plant & machinery, furniture & fittings and vehicles.

History

DCM Shriram Consolidated, incorporated in 1989 is a diversified company having interest in Fertilisers, Chlor Alkalis, Cement, Sugar, PVC & its compounds etc. The company has tie-up with Zeon Kasei Company of Japan for PVC Compounds. 

 The subsidiaries of DCM are DCM Shriram Credit and Investments Ltd, DCM Shriram Aqua Foods Ltd, DCM Shriram International Ltd, DSCL Energy Services Co Ltd, Shriram Bioseed Genetics India Ltd, DCM Shriram Infrastructure Ltd, Bioseeds Ltd, Bioseeds Genetics Vietnam, Bioseed Research Vietnam, Bioseed Research Phillippines and Bioseed Research India Pvt Ltd . 

 In 1995, the company commissioned a Chloralkali plant at Bharuch, Gujarat, based on state-of-the-art membrane cell technology from Asahi Chemicals, Japan. The company succesfully commissioned the Chlor Alkali Plant and 18 MW DG set based capative Power palnt in Jun'97. A 100 TPD Caustic Soda Flaking facality was also commissioned in Jan'97. Further the company commissioned a project for establising 2500 TPD crushing capacity Sugar Plant at Ajbapur, UP. 

 During 1999-2000, the Company commissioned a modern solid hazardous waste facility at Bharuch. The Chlor Alkali Units at Bharuch and Kota and the Fertiliser and Cement units have been recommended for being awarded the ISO 14000 certificate by M/s KPMG Peat Marwick for their environment management systems. The company has approved the investment in equity shares of DCM Shriram Exports(changed into Shriram Polytech Limited) as a result became the subsidiary of the company. 

 The company hived off of its Polymer Processing Business to its 91% subsidiary Shriram Polytech Ltd(formerly DCM Shriram Exports Limited)., through a Scheme of Arrangement effective from Jul.'01 at a total consideration of Rs.43.5 crores and is setting up of a wholly owned subsidiary outside India with capital of upto US $ 3.5 million. 

 The company has entered into MoU with M/s.Zurich Financial Services (ZFS) whereby the company, its promoters companies and other group/associate companies will form a joint venture with ZFS to start Life Insurance Business, Non-life insurance business and related support services in India. Under MoU, DSCL group and ZFS will hold 35.5% and 26% equity stake respectively in the two insurance companies. 

 During 2001-02 the capcity of Chlor Alkali was expanded to 102050 MT. The company is also planning to expand the bottling facility as the revenues from Bharuch unit has increased as compared to previous year. It has secured the BIS certification for its cement plant for 43 grade quality.  

 In the year 2003-04 the company has decided to merge Ghaghara Sugar Ltd, a wholly owned subsidiary of the company with itself and hive off the Energy Services business into a Separate company. The company has merged Shriram PolyTech Ltd, a wholly owned subsidiary with itself with effect from 1st October 2004.  

 During 2004-05 the company has increased the installed capacity of Caustic Soda, Chlorine, Hydrochloric acid (100%), Compressed Hydrogen, Cement, Sugar and UPVC Windows by 30450 MTPA, 16500 MTPA, 33750 MTPA, 945 MTPA, 200000 MTPA, 1500 MTPD and 24000 Nos per year respectively. With this expansion the total installed capacity of Caustic Soda, Chlorine, Hydrochloric acid (100%), Compressed Hydrogen, Cement, Sugar and UPVC Windows has increased to 132500 MTPA, 80250 MTPA, 69750 MTPA, 1565 MTPA, 400000 MTPA, 11000 MTPD and 36000 Nos per year respectively. Further the company has installed a new capacity of PVC Compounds with a capacity of 23400 MTPA.  

 In September 2005 the company has commissioned a new 40 MW coal based captive power facility at Kota. With this expansion the company's captive power capacity at Kota Stands increased to 125 MW. 

 During October 2005 the company has sub-divided its equity share face value from Rs.10/- per share to Rs.2/- per share. Further the copany has issued bonus equity shares to its shareholers in the ratio of 1:1. 

 The company has decided to increase the PVC Capacity from 115 TPD to 175 TPD, Chlor-alkali capacity from 200 TPD to 250 TPD, Rise the captive power generation capacity from 85 MW to 125 MW, Improve the sugar capacities from 11000 TCD to 14000 TCD and also increase the number of HKB stores from 16 to 30 in the current year.

DCM Shriram Consolidated Limited (DSCL)

DSCL is a business group with turnover of over Rs. 19000 millions, Profit After Tax above

the Rs 1 000 millions mark and has two broad operational thrusts: (i) the energy intensive

businesses (chloro-vinyl chain and cement), and (ii) the Agri-businesses that covers

Urea, Sugar, Hybrid Seeds and Agri- Merchandised Inputs (DAP, MOP, SSP and

pesticides). The Company has recently launched into value-added businesses that

include UPVC-based Fenesta™ Building Systems, energy services and a rural

retailing initiative called Hariyali Kisaan Bazaar.

Growth defined

Our approach to holistic business growth extends beyond financial performance to cover all aspects of our operations. It includes growing all key stakeholder relationships. Our

customers, for whom we create our products and services, our vendors and business associates, who support our initiatives and plans, our employees who are the backbone of our

operations and our lenders and shareholders who motivate and encourage us to do better.

"Growth Values" guide our initiatives and relationships whereby while furthering the wealth and returns for all stakeholders associated with the Company, we endeavour to

make a positive contribution to the community and the environment.

Consistent growth over the long term and building globally competitive businesses are integral to our approach towards business. Consider all these aspects together and the result is

"Growth Consolidated". Bringing all our businesses under a common strategy and an integrated operating style delivers "Growth Consolidated". At DCM Shriram Consolidated

Limited, our business drive can be termed as "Growth Consolidated".

Growth Values

DSCL's core values and beliefs are a reflection of its commitment to build a world class, learning organisation, striving for excellence in all its endeavors.

Customer Focus

• Be sensitive to the needs of the customer, develop superior customer insight.

• A commitment to surpass expectations and deliver superior value.

Innovation & Excellence

• Strive to think differently and promote creativity.

• Make continuous improvement a way of life, drive excellence.

Relationships & Human dignity

.• Value people and partnerships

• Nurture understanding, compassion, trust and respect in all relationships

Team Work

• Work closely as a cohesive, well-knit team

• Inculcate a spirit of openness and collaboration

Business direction and initiatives 

 Guided by sectoral dynamics the Company has created a research driven business model, investing both time and resources in creating hybrids that possess robust disease resistance, offer high and stable yields through varied climatic conditions and guarantee high grain quality. The Company has thus far developed 25 new products over the past three years. 

 The Company, keeping with best practices has also created a comprehensive physical infrastructure encompassing a seed conditioning plant, a cold-storage facility besides quality assurance facilities and multiple parent seed farms. That along with an able workforce and process competencies allows DSCL to market its products more profitably. Furthermore, the Company's existing marketing and distribution set up provides a ready platform to sell the hybrid seeds, thus substantially lowering the cost of operations and time-to-market for new products. 

 Performance: 

 The hybrid seeds business at India, Vietnam and Philippines under a 51% Joint Venture has reported improvement in performance during the year, with turnover increasing by 20.6% from Rs.69.9 millions to Rs.84.3 millions and profits expanding by 28%-from Rs.4.6 millions to Rs.5.9 millions. 

 Outlook 

 The Company, encouraged by the potential from this business is investing more resources to broaden the product basket and is currently engaged in researching different crops like pearl millet, sorghum, rice and certain vegetable varieties. In the year gone by, the Company successfully introduced soyabean and vegetable seeds in the market. In the future, the Company is planning to focus on hybrid paddy in markets across Eastern U.P., Bihar and Jharkand. 

 The Company's overseas ventures have in a short span of time established themselves as both serious and large players in those markets and have begun contributing to the Company's top and bottom-line. Going forward, earnings contribution from these operations can be expected to improve further. 

 Agri-Merchandised Inputs - Wholesale 

 Profile 

 Agriculture continues to have significant role in the country's economy having contributed 22.2% of GDP in 2003-04. Further the increased use of better agronomic practices, has made the country self sufficient in food grains allowing it to export surpluses. To sustain this situation and to cater to the increasing food grain requirements of a growing population, India needs another green revolution focused on productivity improvements. 

 All India projection of food grain requirement and demand for fertiliser nutrients. 

  ('000 tonnes) 

 Year Food Grain 'N' 'P' 'K' Total 

 2002-03 174,188 10474 4019 1601 16094 

 2003-04 212,060 11076 4124 1597 16797 

 2004-05 (est.) 225,100 12210 4850 1865 18925 

 2005-06 233,136 12595 5065 1945 19605 

 2006-07 241,459 12900 5245 2035 20180 

 2007-08 250,079 13155 5400 2120 20675 

 Source-FAI statistics, 2003-04 

 The Company started as single 'agri-input' provider and over a period of time expanded the offering to a complete basket through the same channel. The company then leveraged its brand and long established distribution networks. This resulted in an overall increase in the volume of business done by the company further reinforcing its brand and reach. 

 DSCL, in keeping with its objective of being a total agri-solutions provider to meet the varied needs of today's farmer, markets a range of fertilizers and micro-nutrients through its existing distribution set-up. 

 The Company markers some of these nutrient inputs like Diammonium phosphate (DAP), Muriate of potash (MOP) and Single super phosphate (SSP) under the trusted 'SHRIRAM' brand. These are procured from high quality sources from both within the country and abroad. 

 Along with the nutrient inputs, the Company also markets a wide range of crop protection products. These are produced by the Company under licence from the respective brand-owners/ innovators. 

 Business direction and initiatives 

 The Company believes that it can provide greater value to its customers by offering traded products along with the Company manufactured ones in categories like fertilizers and pesticides. Further, while the merchandised products business offers stable cash flows with a low capital investment it also increases brand presence for DSCL. The Company is able to fully leverage its expansive distribution set-up to sell the merchandised inputs, saving considerable resources in the process. The crop-protection products sold by the Company complete the product offering made to the farmer.  

 Performance (Traded - Wholesale) 

 Revenues at this division improved to Rs.4743.0 millions, up 62.1% over Rs.2926.0 millions last year. The business is working capital negative, generating positive cash flows for the most part. Its PBIT increased to Rs.39.0 millions, compared to Rs.03.0 millions the year before. 

 Outlook 

 The demand for all agricultural inputs is expected to grow at a healthy rate. Indian farmers have shown great adaptability and willingness to experiment with inputs to increase their profitability and productivity. 

 The phosphatic fertilizers (DAP) industry has been facing difficulties on account of uncertainty of the policy environment on one hand and high international prices on the other. Domestic production was lower during the year 2004-05 at 5.1 million MT. This trend is expected to continue during the year 2005-06 providing the Company with a good opportunity to market imported fertilisers. 

 Constrained by the availability of rock phosphate, the country procures most of it's DAP as imports, which because they are cheaper, provide added incentive over domestic DAP. DSCL imported 65,000 MT during the peak season, at a time when there was an acute shortage of the product, gaining the appreciation of the trade and farmers in the process. Further, the Company recognises the potential from this product and believes it can expand the scope of this particular product in traded volumes over the next few years. 

 The second nutrient input/fertilizer marketed by the Company, MOP, too is scarcely produced in the country; with imports catering to almost the entire demand. Since it is fully imported the profitability in the MOP business continues to be subject to government subsidies. DSCL imported 270,000 MT of the product in the year despite higher global prices in the process making it the second largest player in the country. The prospects for this input are appealing, given the depletion of in-soil potash levels in many parts of the country. Going forward, the Company plans to capitalise on this situation by enhancing the quantity of MOP it markets next year. MOP being a 100% imported product, profitability to a large extent would depend on the subsidy policies of the Government even in the future. 

 With regard to the pesticides business, the introduction of Bt. Cotton in the states of M.P., Gujarat, and Maharashtra has impacted consumption of pesticides in those states. Further, the consumption in paddy was lower on account of scanty rainfall in 2004 resulting in higher inventory levels within the trade and marketing organisations. The Company has therefore decided to reconfigure its portfolio to emphasise on vegetables, paddy and wheat, while decreasing the dependence on cotton. 

 Sugar 

 Profile 

 India is a dominant player in the global sugar industry, being the largest consumer of sugar and the second largest producer (after Brazil) of sugar in the world. The production of sugarcane and therefore that of sugar is cyclical in nature, led mainly by the cane arrears and/or the climate. The crushing season in India begins in October and goes on till April-May except in south India where it goes till July-Aug. 

 With more than 450 sugar mills operating throughout the country, the Sugar industry's contribution to the Indian economy is enormous with a total turnover of Rs.30,000 millions per annum while the capital employed in the industry is estimated to be more than Rs.50,000 millions. The average crushing capacity across the country is about 3,200 TCD, with sharp differences between the mills in terms of size (varying from 1,500 TCD capacity to 13,000 TCD), technology, vintage, and ownership. 

 The unorganized players in the country mainly produce the less refined forms of sugar, such as Cur and Khandsari. The main producers of sugar are states of Maharashtra, Uttar Pradesh and the southern states of Tamil Nadu, Karnataka, and Andhra Pradesh. Over the past decade, sugar production in the country has grown at a CAGR of about 5.5% whereas consumption has grown at a CAGR of 4.5%. Further, the sugar production in the country recorded sharp decline in 'sugar year' 2003-04 (touching 14 million tonnes vis-a-vis 20.5 million tonnes in previous year) and is expected to decline further to about 13 million tonnes in 2004-05 as against consumption level of 18-19 million tonnes. With similar trends being witnessed globally there has been a contraction in availability and import of raw sugar to meet the domestic demand. 

 The Company operates two sugar mills in central Uttar Pradesh. The first at Ajbapur has a capacity of 6500 TCD and power generation capacity of 18 MW of captive power and has the distinction of being awarded the ISO 9000 (for quality management), ISO 14000 (for environmental management) and OHSAS 18000 certifications simultaneously. The other plant at Rupapur has a 4500 TCD capacity and a 6 MW captive power plant. The bagasse based power plants supplies surplus power to the state electricity grid. The Company treats the sugar business as a key growth driver going forward and is constantly on the look out for opportunities to raise crushing capacity. It is presently executing a 3000 TCD expansion across both the plants. 

 The Indian sugar industry provides direct employment to over half a million skilled and unskilled workers mainly from the rural area. Besides, over fifty million sugarcane farmers and their dependents are involved in sugarcane cultivation. Due to a large farming community dependent on sugarcane income, the Indian sugar industry has been highly regulated in terms of input cost and release mechanism. The Central Government stipulates a 'Statutory Minimum Price' (SMP) for the purchase of sugarcane throughout the country. While the states are allowed to prescribe their own 'State Advisory Price' (SAP), this price cannot be lower than the SMP at any time. Furthermore, sugar mills are legally bound to purchase the entire crop in their respective 'command areas' at the predetermined price. Such command areas are allocated annually depending upon the mill's track records and capacities. DSCL has about 120,000 cane growers supplying the two mills during the crushing season. To facilitate faster delivery of the cane the Company has set up a network of cane collection centres around its mills. DSCL sugar mills are designed to make above average recoveries, improving the operating efficiencies further. 

 The Company sells 50 and 100 kg bags of sugar to wholesalers throughout parts of Uttar Pradesh and elsewhere in the north-eastern parts of the country and Bhutan. 

 The sugar industry yields two main by-products, molasses and bagasse, which have important applications in other industries. Molasses find usage primarily in the chemicals and liquor industries. Bagasse finds application primarily in the paper products industry and as a fuel for co-generation. The molasses and surplus bagasse generated during the manufacture of sugar is sold after meeting captive needs. 

 Business direction and initiatives 

 DSCL operates a modern and highly automated sugar operation that allows it to consistently make higher recoveries, enhance efficiencies and in turn realise better earnings from the business. Further, aided by strong business processes, the Company is able to focus on enhancing its operational parameters continually. Sugar has been identified as one of the growth drivers by the Company with the aim of emerging as one of the most efficient and profitable sugar manufacturers in the country. The company's focus is to work closely with farmers to improve cane production and cane quality, and to continue producing sugar in the most efficient way. 

 DSCL's emphasis on cane development places it ahead of others in fostering a 'trust-based' relationship with the farmers. The Company routinely assists farmers with soil fertility mapping for judicious fertilizer usage, varietals propagation and the replacement of low yield / low recovery varieties. It also plays an active role in popularising the use of bio-fertilizers, modern agri-inputs and associated plant protection measures to increase yields per hectare. The company has even implemented an assured irrigation scheme in its cane area. 

 Additionally, with the objective of facilitating the movement of cane to its mills, the Company has carried out a series of initiatives including construction of roads and providing transportation for the sugarcane. DSCL regards farmers as important and invaluable constituents of its objective of growing the business, and remains committed to raising their economic profile. 

 DSCL also believes in actively managing its product realisations and has made the strategic decision to distribute its sugar in states other than Uttar Pradesh to avoid oversupply and consequent erosion in realisations in its primary market around its mills. Further, as the Company sells its molasses and bagasse production within a 200 km radius of its mills it is able to get better realisations. 

 The Company has started supplying power to the state electricity grid from December 2004 and plans to enhance it further with realisation of energy efficiencies in its processes and a minor enhancement in the co-generation facilities. This activity is expected to augment the Company's earnings going forward. 

 The Company is currently implementing an expansion plan covering both its manufacturing facilities. While Rupapur will witness a capacity, addition of 2000 TCD taking its total capacity to 6,500 TCD. the Ajbapur facility will see a 1000 TCD expansion improving crushing capacity to 7500 TCD. The expansions are expected to be completed on schedule by October 2005. 

 Performance 

 Sugar (Rs. Millions) 

  FY2005 FY2004 

 Revenues 2217.0 PBIT 498.0  

 The sugar business of the Company recorded excellent season 2004-05 with sugar production going up by 23% over last season led both by higher cane crush and better sugar recovery:- 

 Sales quantity during the year, however, was lower by approx. 18% primarily due to lower production in sugar season 2003-04. However, a positive bias in sugar prices, following a contraction in total production (13 million tonnes approx. in 2004-2005 against a consumption of 18-19 million tonnes) in the year facilitated higher realisations from the sugar operation. The business reported revenues of Rs.2217.0 millions, up 7.1% over Rs.2069.0 millions last year. Segmental PBIT stood at Rs.498.0 millions over last year when it was Rs.200.0 millions. The company also started supplying power to UPPCL from its Ajbapur sugar factory during the year. 

 In a significant move, the Hon'ble Supreme Court upheld the right of the state government to declare a State Advised Price (SAP) to be paid by sugar mills in the state to the farmers for cane supplies. Accordingly, the Company has had to pay the differential in cane price for earlier years amounting to Rs.99.8 millions and for 2003-04 amounting to Rs.83.2 millions. For 2004-05 sugar season, the U.P. state government announced SAP of Rs.107/- per quintal (compared to Rs.95/- for previous year). 

 It is expected that India will continue to have tight sugar availability, for the next couple of years and the country is likely to remain a net importer to meet its domestic demand. Sugar prices are therefore expected to remain firm. However, the margins for sugar producers could come under pressure with rising costs including the increase in cane prices. 

 The Company intensified its cane development efforts during the year. As a result of these efforts and the attractive cane price, there has been approx. 20% increase in the area under cane plantation during the current season. This should result in much higher cane availability in next season in normal weather conditions. 

 Outlook 

 Sugarcane is one of the more profitable crops for Indian farmers, also being the country's second-largest cash crop. As a result, the area under sugarcane cultivation, is currently about 4.5 million hectares spread across the country. The average yield however is low compared to other countries due to small-sized farms, with the average farm size being about 0.25 hectare per family. The cane farming practices, farm sizes, yields, recovery, and prices vary from state to state. 

 The country consumed more sugar than it could produce through the years 2003-04 and 2004-05. Though the production is likely to improve in the year 2005-06 it is still expected to be lower than the consumption. 

 The demand for white sugar, spurred by better standards of living through years of economic progress, is expected to accelerate going forward. The rapid growth in the processed foods and beverages industry can be seen to drive demand for sugar in the future. 

 The Company further believes that the demand for smallpack sugar will gather momentum once consumers and traders, in the markets served by the Company, realise the importance of packaged sugar over the loosely available type. 

 At the same time, the mandatory admixture of 5% ethanol in petrol if enforced across most of the nation is expected to bring about substantial increase in demand for molasses, a by product of sugar manufacture. Further, the incentive provided to co-generation is expected to raise demand for bagasse, another by-product. The Company believes that it is possible to realise a higher percentage of the cane cost through sales of surplus molasses and bagasse going forward, up from 5-6% currently. 

 The process of evolving from a pure sugar producer to an integrated sugar mill is likely to continue and strengthen as the co-generation and ethanol policy becomes more stable and transparent. In fact in due course of time the Company plans to explore the prospect of manufacturing alcohol/ ethanol. 

 Hariyali Kisaan Bazaar 

 The Company, backed by years of experience in the agribusiness, has implemented a one of a kind rural retailing initiative, the Haryiali Kisaan Bazaar rural departmental stores, to provide single-point solution to the diverse needs of the contemporary Indian farmer. This business has been further discussed under 'Growth Ideas'. 

 Shriram Krishi Vikas Kendras 

 DSCL has been reaching out to the farming community through a network of 'Shriram Krishi Vikas Kendras (SKVK) wherein it provides agronomical services with the objective of improving the farmer's income. With the aim of achieving better reach to the customers and widening the coverage of the Kendras, both vertical and horizontal expansion of the project is being planned. Currently we have 97 SKVK's. The Company is planning to add new 10 SKVKs in the financial year 2005-06 with 10 more in the year to follow. Further, to make the program more cost-effective and to give it a business orientation, a modified version of SKVK, called SKVK Franchisee has been introduced. Currently there are 5 such centres with the number expected to grow to 10 over the current year. 

 It is also proposed to extend this initiative to other parts of the country.  

 Other Businesses 

 Cement 

 Profile 

 DSCL uses the waste sludge produced during the making of calcium carbide as key input for the cement business. The Company manufactures 400,000 TPA of premium grade cement at its integrated manufacturing complex at Kota, Rajasthan. DSCL's is the only plant in the country to convert waste into high quality, premium grade cement. The use of waste sludge combined with access to economical captive power makes this business a very efficient and competitive operation. 

 Strategy 

 The cement business enjoys the dual advantage of inexpensive captive power and readily available key input. The cement manufactured at its computer process controlled and highly automated facility results in a product that displays a high degree of whiteness and possesses superior strength and quick-setting features. The cement produced by the Company commands premium pricing on account of its superior quality and the 'SHRIRAM' brand name and is recognised as market leader in the areas of distribution. 

 Performance 

 The production of cement reached 320,745 MT in the financial year 2004-2005, consequent to completion of expansion programme in December 2004. Although the cement business benefited from favourable demand prospects, higher coal and freight costs weighed on its performance. Margins in cement were further impacted due to the imposition of a Rs.15 ps/kwh duty on captive power in Rajasthan. The division reported sales of Rs.705.0 millions in FY2005, a rise of 18.3% over Rs.595.0 millions in FY2004. The business recorded PBIT of Rs.33.0 millions during the year under review. 

 Outlook 

 DSCL concluded an expansion of its cement capacity in December of 2004. The cement production capacity has been expanded to 400,000 TPA from 2,95,101 TPA previously. The production at the expanded capacity has been stabilised. With the expansion in place the Company will be better equipped to process the surplus waste sludge generated after the expanded calcium carbide capacity goes on stream. 

 Over the last few months, there has been a marked preference for blended cement in the marketplace. The Company is therefore planning to raise the blended cement manufacture from 72% at present to 80% of its total production in the financial year 2005-2006. 

 Energy Services/ESCO 

 Profile 

 DSCL operates a reward-sharing model whereby it identifies opportunities for energy savings, realises the savings and then shares the rewards with its clients Through this division the Company provides know-how, maintenance and energy-efficient product design and project customisation through alternative fuel switching. Its scope of activities covers both captive and co-generation facilities and seeks to assist customers in the conservation of energy and use of renewable sources of energy. This division has won a consulting assignment from Asian Development Bank (ADB) for renewable and energy efficiency development project in China. This has been won against steep competition against international energy consulting giants from USA, Canada, U.K. Switzerland, Norway and Australia. 

 Strategy 

 The Company has gained competencies in the erection of effective and efficient energy systems on the back of its experience in managing its own captive and co-generation facilities. The Company has sought to institutionalise these abilities through DSCL Energy Services Company. 

 Outlook 

 The Company believes this business will offer attractive long-term returns. 

 Textiles 

 The Company has a small textile operation in the form of 8880 spindles spinning unit at Tonk in Rajasthan. The operations of this unit are constrained by limitations of product mix, technology, and capacity. The Company has been consistently making efforts to keep the costs and thereby the losses, of these operations under control. These efforts have continued in the year under review. The unit, however, incurred high costs on account of settlement and payment of gratuity to some ex-workers which has resulted in higher operating loss during FY2005. 

 Real Estate 

 In accordance with the decision of the Hon'ble Supreme Court dated 10th May 1996 and the learned District Court dated 25th February 2005, the Company surrendered the possession of 30.07 hectares of land during the current year to DDA to be kept as green/open area without prejudice to its rights and submissions in the review petitions. The Company has also made substantial progress in vacating the quarters on the land at Najafgarh Road, New Delhi. 

 Growth ideas 

 New Business 

 Fenesta(TM) Building Systems 

 The value-added Ultra PVC (UPVC) window and door systems that DSCL markets under the Fenesta(TM) brand was a natural extension of its PVC Resin, compounding business. The Company has a dedicated plant to manufacture the Fenesta(TM) Building Systems profiles at its integrated manufacturing complex at Kota, having a daily extrusion capacity of 7.2 MT and is backed by captive power supply. 

 UPVC, the un-plasticized variant of PVC besides being environmentally friendly, offers high impact resistance apart from being non-corrosive in nature. The final product provides superior thermal and sound insulation, does not rust and offers high tolerance for extreme weather conditions. Moreover it requires very little upkeep with the product lasting as long as the building; it is installed in, itself. These environmental friendly solutions are rapidly becoming the preferred choice of builders, architects and individual customers. 

 DSCL has in place a dedicated sales team in markets in which it is present. This provides the benefit of close contact with the end-users, mainly the real estate developers community, allowing the Company to promote its range besides servicing actual customer requirements. Complementing the sales set-up is a team of technical experts that advises on customisation options, colour options and other specifications. 

 DSCL's technological edge, contemporary design, end to end customer service and superior infrastructure provides a definitive competitive advantage in a market that is very discerning and sophisticated. The Fenesta(TM) offering is a complete system right from fabrication and design to installation at the customer's site, resulting in consistent quality and better understanding of client's needs. 

 The integrated nature of operations allows the Company to exercise complete control over the entire value chain from blending & extrusion to window fabrication and final installation. DSCL has entered into a technical collaboration with Heywood Williams (HW) Group Plc of U.K. that allows it to better serve the needs of its customers in this line of activity. 

 This business reported revenues of Rs.400.0 millions in the year ended March 31, 2005, the first full year of its operations. 

 Windows and other building components made of UPVC have gained wide popularity across different climatic conditions. UPVC windows have a dominant share in Europe and growing share in the US, Asia and the Middle East. The Universal appeal of UPVC windows have made China one of the fastest growing markets in the world in this segment. The Company believes that in the domestic markets, the demand for its Fenesta(TM) Building Systems would be driven by the growth in the housing sector that has grown 25% over the past two years and IT/ITES led office sectors. The Company has estimated a market potential for window and door systems at Rs.1,0000 millions. Further, the backward linkages that the business enjoys with the established plastics business puts the Company in an advantageous position to leverage the opportunity presented by the product. 

 This year the company embarked upon a strategy to create a pan-India presence and launched Fenesta(TM) Building System in Pune in August '04; in Mumbai and Bangalore in November '04. The fabrication units at Bangalore and Mumbai also commenced operations to serve these new markets. In Delhi, a second launch was made in July '04 to introduce Horizontal Sliding Systems, a new product developed for the Indian market. A profile extrusion plant at Kota also was commissioned during the year to meet the requirements. The Company plans further increase in the number of fabrication facilities across multiple centres closer to its target markets. 

 The response from the markets continues to be encouraging with the company having decided to further increase the penetration of the product. Accordingly sales offices have been opened at Chennai and Hyderabad. Further a fabrication unit is also being set up in Hyderabad, which will commence operation in the second quarter of coming year. The growth strategy being pursued is being supported by extensive sales promotion. Organisation building and capability development continues to be a focus area and the company is committed to grow the business rapidly. The initiatives being undertaken to further promote the acceptance and distribution of the product are expected to give the business a favourable payback period for the capital invested. 

 Hariyali Kisaan Bazaar 

 DSCL, recognising the hitherto untapped rural demand for modern, trustworthy and fair value, retail channels had earlier embarked on a rural retailing initiative called the Hariyali Kisaan Bazaar. The venture has been receiving a tremendous response from its target customers in the rural markets. The business model for HKB is driven by mutual trust, confidence and a strong relationship that we share with the farmers and derives its strength from our ability to provide top-of-the-line products and services at value for money prices at locations close to where they live and work. 

 The rural retail store chain offers a comprehensive range of products including fertilizers, pesticides, seeds, farm implements, irrigation equipment and animal products, and value added services like agronomy and advisory services, output linkages, credit-financing and more to the rural citizenry. The comprehensive offering of agri inputs and relevant agri technology to the farmers is creating a strong bond with the farmers and building trust and reliability for the Hariyali Kisaan Bazaar. 

 The Company currently owns and operates a network of 16 rural stores throughout Punjab, Rajasthan, Haryana and Uttar Pradesh. Each store covers an area of 3-4 acres and is managed by a team of 7-8 people whom the Company trains continuously. The stores have their own dedicated power supply. True to its promise of being a one stop shop for all agricultural needs, Hariyali Kisaan Bazaar also proposes to offer tractor service centres, bank branches and ATM's (to be added shortly). 

 The agronomy services offered at these outlets is manned by a team of qualified agronomists and agri-specialists who are on call round the clock. The team provides support to farmers in selection of right agri-inputs apart from identifying opportunities for crop rotation. The outlets also have veterinarians at hand who assist farmers in their buying decisions for animals. These allied agri-services offered under one roof not only enhance farming efficiency and productivity but also create a strong affinity for the brand that in the end leads to trust and enduring relationships. 

 The Company, after meticulous preparation, has recently begun offering farm output management services aimed at improving realisations and finding markets for more profitable crops. The range of advice covers price discovery, storage, handling and sales. DSCL has identified three new focus areas for Hariyali Kisaan Bazaars namely, contract farming, processing and exports. 

 The Company in conjunction with a public sector oil company launched fuel retailing services at a few locations in the year. Encouraged by the response to this services the Company plans to provide this facility at more outlets going forward. Moreover, the Company also intends to retail LPG through its stores in the coming year. This is intended to address one of the key requirements of a trusted source of farm fuels and diesel in the rural areas. The Company also intends to disburse credit and provide other financial services to farmers through a tie-up with a leading private sector bank. 

 The Company has suitably located the stores at key hinterland roads to capture maximum footfalls. Moreover, DSCL recognises that the key to ensuring high conversions lies in demonstrating the ability to provide top-of-the-line products at value-for-money prices. To make that possible, it sources its merchandise directly from large local vendors after validating for quality. To further enhance the value proposition the Company is planning to sell FMCG products, automobile spare parts and construction-related products (mainly cement and paints from the Hariyali Kisaan Bazaar. 

 An important facet of the customer-trust equation is choice. Each sale is made on a best effort basis, where both 'SHRIRAM' and other brand products are accorded equal importance, without unduly favouring any particular one. Similarly, displays are arranged by application and not brand facilitating an objective assessment on the part of the customer. 

 The usage of modem IT systems allows DSCL to track customer preferences and optimise inventory levels and in the process realise better sales and higher efficiencies. 

 The Hariyali Kisaan Bazaar business had revenues of Rs.29 millions in the financial year 2004-2005. 

 The potential to raise farm productivity and profitability in the country cannot be overstated. Also, the farming community is fast becoming aware of and wants to apply the latest techniques. Rural incomes are rising and there is an increasing need for trusted transactions. The Company believes that based on its rich experience in the agri-sector, it is well placed to create a substantial and sustainable value from this business. 

 The format has been heartily adopted by the farmers as indicated by the substantial number of repeat customers. The Company hopes to consolidate and leverage this trend to its advantage going forward, by offering more choice. Also, the Company plans to capitalise on the first mover advantage it enjoys in this line of activity and expand operations by another 28-30 stores in two years. Over the long term, the Company has envisaged a nationwide presence in a graded manner. 

 The scale of activity after completion of the rollout will allow DSCL to realise dual benefits of lower cost of operation and better bargaining ability with vendors. The extended size of operation will help the Company derive maximum value from this largely ignored opportunity. 

 Growth relationships 

 The Company markets a range of products including urea, merchandised agri-inputs, chemicals; plastics and cement under the 'SHRIRAM' brand through an extensive sales and distribution set-up. 

 The adoption of leading technology and best-in-class processes has allowed the Company to deliver superior quality products on a consistent basis. The 'SHRIRAM' brand stands out in the marketplace on account of its dependability. Further, DSCL has carved out a reputation for being a fair and transparent organisation in its dealings in the marketplace and in the process has built for itself a repertoire of enduring customer relationships. The Company prides itself on the high rate of repeat customers that characterise all its businesses. 

 DSCL has amassed a wealth of experience in the agri-space having operated in the field over a number of years. The Company successfully leverages the salience enjoyed by the 'SHRIRAM' brand in the market to its advantage by marketing a range of high-quality products including urea, hybrid-seeds, merchandised inputs and sugar under that name. 

 The Company has spent considerable amount of time in gaining a better understanding of the Indian farmer and his farming practices. Armed with that knowledge the Company regularly introduces new products in the market aimed at meeting the progressive needs of the farmer. This deliberate focus on the needs of the rural citizenry has accorded a certain perceptive ability to the brand As a result, its customers have come to expect a full range of agri-products and services from the brand, a demand that the Company has fulfilled time and again. 

 The 'Shriram Krishi Vikas Kendra' (SKVK) network through which DSCL provides agronomic services to farmers with the aim of raising their economic condition reveals the deep concern the brand has engendered for its customers over the years. Further, the SKVK's have helped improve farming methods and have endeavoured to support agrarian communities through initiatives in education, hygiene, sanitation, healthcare and animal husbandry. The intense goodwill generated in the process gets transferred to the brand. 

 Going forward the Company intends to assume a far greater role in the development and growth of the agricultural sector through the introduction of contemporary management practices in farmlands. It has already begun the consolidation of agri-services under the Hariyali Kisaan Bazaar initiative. 

 The regular introduction of new products combined with the multiple services underway has allowed the Company to maintain a healthy level of engagement with the customer. Over time the SHRIRAM' brand has come to be regarded for its high-quality, dependability, caring nature and perceptive ability thereby representing for the Company a strong and sustainable competitive advantage. 

 Growth responsibility 

 As a consolidated business group extending across industrial and agricultural sectors, DSCL impacts the lives of many people on a daily basis. The Company recognises that business sustainability is as much a function of respecting the environment as it is of good corporate strategy. With that principle in mind the Company continues to accord high priority to environmental protection as part of its social responsibilities and is committed to substantially improving the environment in and around its manufacturing units. 

 DSCL as a matter of policy actively seeks to limit any impact on the environment to the extent possible. As a matter of fact, the Company has recently converted its mercury-cell based chlor-alkali plant at Kota to run on membrane-cell technology. This is significantly earlier than 2012, the industry consensus date for the phasing out of mercury cells. Further, both chlor-alkali units have received OHSAS 18000 certification. 

 With multiple initiatives already underway, aimed at mitigating the ecological impact of its energy-intensive operations, DSCL is confident of meeting the challenges brought on by new developments. 

 The Company has an empowered and institutionalised mechanism to look into environment, health and safety issues on an ongoing basis. Policies on the matter are drafted annually along with the group's business-plans. At the end DSCL remains committed towards the environment and the well-being of its employees and neighbouring communities. 

 DSCL has always sought to employ the best and contemporary safety management practices throughout the group. It was in recognition of the Company's safety performance that it was awarded a five star rating by the British Safety Council earlier in the year. 

 As a mature corporate, DSCL has reached out to the communities that sustain it. The network of about 100 Shriram Krishi Vikas Kendras partners with farmers to raise productivity and profitability. The kendras have been used by the Company from time to time to adopt villages and Krishi Kendras. 

 DSCL has actively created infrastructure in communities in its vicinity. The Company presaging the water needs of communities has built storage tanks, dug bore-wells and installed pumps in some areas whereas in other places financed the creation of such infrastructure. DSCL has also been the initiator for the creation of transport infrastructure in many villages building roads with the help of locals. 

 The Company believes that education creates leaders of tomorrow. With that view in mind it offers several scholarships in the fields of engineering, medicine, agriculture and management. DSCL has also funded the construction of educational institutions at certain locations, besides upgrading infrastructure at others. Along with education the Company also promotes sport, chiefly tennis and is the title sponsor of the Open National Tennis Championships. The Company also routinely conducts medical camps providing consulting and medicines to villages around its plants. Operational metrics 

 Over the past year the Company has been able to curtail the use of key inputs used in manufacturing through concerted efforts directed at energy conservation and efficient use of raw material. Further, there are concurrent plans that seek to utilise waste by-products, water conservation and afforestation. 

 The consumption of power within its energy-intensive businesses over the years is markedly lower. As a matter of fact, over the past decade, energy consumption at its cement plant has declined by over 50% and that at its fertiliser plant decreased by more than 10%. Further, sustained process improvements have resulted in a better raw material to output ratio across divisions. The Company has also been able to actively reduce its intake of water at Bharuch by over 35%. The reduction at the integrated manufacturing complex at Kota was much higher at 64% despite an increase in production volumes there. 

 Furthermore, the integrated nature of operations provides an opportunity to profitably consume some of the by-products from its operations. The waste sludge generated during the production of calcium carbide is canalised to manufacture environmentally-friendly cement. 

 The Company has implemented a rain-water harvesting scheme at its facilities, with the water thus collected getting utilised in its manufacturing processes. Further, DSCL has sought to create a green-belt around its integrated manufacturing facility at Kota by planting 200,000 trees of 25 different species. The Company also has in place several emission and effluent reduction plans. 

 Each of these initiatives has had the additional benefit of improving efficiency levels and cost competitiveness across the group.

 Growth performance 

 Operating perspective 

 The financial year 2004-2005 was very satisfactory for the Company. All round growth in businesses, particularly the chemicals, plastics and sugar businesses, led to higher revenues for FY2005 at Rs.19050 millions, up 29% over Rs.14750 millions in the last year. While, contribution from own products improved by 19% to Rs.14020 millions, that from traded products witnessed a substantial 68% rise to Rs.5030 millions. The Company's efforts to continually improve the cost structures over the years and favourable commodity cycles helped it earn higher revenues and profits during the year. 

 Operating profits at the Company increased 17% to Rs. 2270 millions in the financial year 2004-2005 despite a 30% rise in expenses for the year. Energy costs during the year went up on account of higher coal prices and the imposition of a charge in Rajasthan on the generation of captive power. 

 DSCL was able to contain its interest costs through a combination of better fiscal management and through the employment of low cost debt in place of high cost one. Consequently, the Company was able to report profits before tax of Rs.1099.0 millions. 

 Profits after tax for the year stood at Rs.1044.0 millions, representing a 36.1% gain over Rs.767.0 millions giving an EPS of Rs.624.6 for the year. 

 Growth processes 

 Information Technology initiative 

 DSCL manages a large consolidated operation that is spread over multiple business areas. By virtue of its integrated nature, the company at any given time is dealing with distinct sets of demand cycles, customers and vendors. The Company has employed an information technology system that seeks to facilitate seamless communication across key functions with the end objective of harnessing the scale. 

 Information technology thus plays a crucial role of enabling business processes, in turn providing the Company with the necessary agility and the responsive ability to meet customer demands. 

 The Company primarily operates a SAP platform with key components that encompass Enterprise Resource Planning, Data Warehousing and Customer Relationship Management solutions. 

 In the year gone by the Company has successfully completed the SAP-based, IT enablement of its Rupapur Sugar operations including the establishment of the requisite communication and IT infrastructure. Furthermore, 14 zonal offices under the sugar business have been inter-connected to provide online cane related information to farmers. Whereas at Shriram Bioseed Genetics, the Company has chosen to employ Microsoft's Navision ERP package to e-enable business processes. 

 DSCL has also carried out the IT-enablement of the Fenesta(TM) Building Systems business, both at the Kota extrusion facility and across its offices at Bangalore, Pune and Mumbai. Additionally, DSCL's retail thrust, the Hariyali Kisaan Bazaar chain of departmental stores, has also been IT enabled through the implementation of a point of sale and SAP-IS solution. 

 With several business interests in its fold, DSCL at present is managing multiple expansion plans. The Company with a view to better manage these initiatives has implemented the project systems module based on the SAP platform. 

 With the objective of enhancing productivity amongst employees the Company is planning to establish an employee website. At the same time, DSCL has made a conscious effort to reach out its key customers through the inclusion of a 'feedback management system' on its customer website, 'dsclpartners.com'. 

 The size and complexity of the information technology platform the Company operates, makes it imperative to employ a well-considered and comprehensive information security system. Accordingly, DSCL has charted an information security policy which is being implemented across DSCL in a phased manner. 

 Internal control systems and adequacy 

 DSCL is a large organisation with facilities across multiple locations in the country. The nature and scale of operations has made the continued operation of certain assets critical to its business. Furthermore, the sheer scope of its business ensures a large volume of business dealings at any give time. 

 The Company has chosen to employ robust control procedures and systems with the twin objectives of safeguarding its assets against theft and misuse and ensuring that all transactions are authorised, recorded and reported correctly. The implementation of SAP throughout the organisation has allowed for a proper system of checks and controls with the end result of enhancing the internal controls of the Company. 

 The Company has further complimented the internal control measures with periodic reviews through qualified, independent firms. The audit findings and recommendations are routinely assessed by top management and audit committees of the Board. 

 Human Capital 

 People first 

 The importance of employee engagement in organisational success can never be over-emphasised. DSCL has always put its people first, treating them with dignity and fairness. To further develop their capabilities the Company has brought into place suitable training and development programs. The end-objective is to promote team excellence and an alignment of individual and corporate objectives. 

 The Company has in its pursuit of excellence continued to focus on human resources and its development in a comprehensive manner. It has stood by its core value of People Development and integrated the same in its organisational work life on a sustainable basis. 

 Processes at work 

 As a growing, dynamic organization DSCL realizes the need to attract, develop and retain the best talent. The Company, during the course of the year set out to fortify its HR processes and systems in the areas of recruitment & selection, compensation & benefits, induction, performance management, training & development, talent management, organisation development and welfare with the objective of meeting its business needs and also to benchmark with industry standards. 

 DSCL is an integrated operation spanning a multitude of industries, demand-cycles and consumers. With the aim of sustaining its growth momentum in the future, the Company has commenced the process of integrating innovation in its organisational culture. Most individual businesses have approached the innovation in a determined manner and are engaged in institutionalizing the same. 

 Skill development 

 The Company regards its employees as key stakeholders in creating wealth. It follows then, that its workforce needs to remain motivated to take on the challenges posed by a dynamic business environment. The Company has implemented several programs aimed at developing, upgrading and improving the functional and behavioral skill sets within the organisation. Along with internal training programs, the employees have been encouraged, from time to time, to participate in external seminars, conferences and workshops to inculcate best practices and knowledge. 

 Industrial Relations 

 A true reflection of the maturity and success of the DSCL's human resources policy has been its excellent labour relations over the years. The overall level of human relations at the Company has been extremely harmonious and cordial all through the year allowing the employees to give their best. This, the Company believes, is the cornerstone of its success. 

 Conclusion 

 The strong demand growth in products such as PVC, Sugar and Chemicals has resulted in the country becoming a net importer in some of these products. Though the Company believes that these trends will sustain, concerns remain about the negative impact of rising costs on margins going forward. 

 In accordance with the growth trends the Company is in the midst of several expansion initiatives across its business lines. In the last quarter of the year under review, the Company commissioned a 200 TPD membrane cell technology based chlor alkali plant at Kota, replacing and expanding the earlier mercury cell based 139 TPD plant. Also, DSCL has raised its Cement Production capacity from 295,101 TPA to 400,000 TPA with effect from December 2004. 

 The other major initiatives underway are 

 * An increase in PVC capacity from 115 TPD to 175 TPD. 

 * An increase in Chlor-alkali capacity from 200 TPD to 250 TPD. 

 * A rise in the captive power generation capacity from 85 MW to 125 MW. 

 * An improvement in sugar capacities from 1 1,000 TCD to 14,000 TCD. 

 * An increase in the number of HKB stores from 16 to 30 in the next financial year. 

 Most of these programs are expected to be completed by the second half of the new financial year. 

 DSCL's energy intensive businesses have continued to contribute significantly to overall growth in the year. The Company's chemicals business driven by stronger prices for caustic soda, registered better revenues in the year. The capacity upgradation cum expansion at its Kota plant which is now rated at 70,000 MT will help the Company target even better revenues in the new fiscal year.  

 The plastics business derived benefit from higher prices of PVC both internationally and at home. Going forward, the challenges here would mainly comprise higher input costs and taxes/duties which could exert pressure on margins. That notwithstanding, demand conditions in the PVC resins market are expected to remain favourable. Considered together with the increased production capacities the Company expects this division to continue the growth momentum. Moreover, the merger of Shriram Polytech in the past year is expected to aid the growth of the entire plastics operations in the future. 

 DSCL's fertiliser business continues to be subject to a challenging regulatory environment. The second phase of the fertilizer policy was implemented from April 1, 2004 with a consequent tightening of energy norms thereby changing the way companies are compensated for producing urea. The Company would carry out a conversion at its urea plant to accept a dual feed of naphtha and gas that will aid in the operations to raise efficiencies further. 

 The sugar business reported better production volumes on the back of a good crushing season. Prices for the commodity are expected to remain firm going forward. The Company is currently engaged in enhancing crushing capacities across its sugar mills to 14,000 TCD. The business continues to benefit from DSCL's close involvement in cane development activities that are directed at raising farmland yields and profitability. 

 The merchandised inputs business saw increased revenues on account of better realisations and volumes for DAP. This business allows the Company to a make a complete agri-offering to its customers thereby propagating the Company's brand and market reach. 

 The new businesses launched by the Company in the recent past have been receiving encouraging response from the markets. 

 The Hariyali Kisaan Bazaar business reported healthy revenues on increased acceptance of the concept. The Company is engaged in expanding the offering of products and services through the stores while at the same time enhancing the reach of the network. This year the network of stores increased to 16 stores from the 8 last year and is expected to almost double to about 30 stores in FY2006. 

 DSCL introduced Fenesta(TM) Bulding Systems in Pune, Mumbai, Bangalore, Hyderabad, and Chennai in the calendar year 2004. The Company targeting a pan-India presence is setting up a fabrication unit at Hyderabad to better target the southern markets. At the same time the Company is emphasising on sales and promotion to further increase awareness about the UPVC-based systems. 

 The Company raised its cement production capacity to 400,000 TPA with a view to fully utilise the extra sludge to be generated after the planned expansions in the calcium carbide and PVC capacities. 

 The financial year 2004-2005 was characterised by favourable demand conditions in key businesses of the Company. DSCL is charting a well-considered strategy to capitalise on the growth momentum by enhancing manufacturing capacities at critical points across its integrated operations. The Company remains committed to its strategy of optimising value contribution from its businesses while continuing to nurture growth drivers of the future. 

Scheme of Amalgamation 

 The Company implemented a Scheme of Amalgamation approved by the Hon'ble High Court of Delhi under Sections 391-394 of the Companies Act, 1956 for amalgamation of its subsidiary Shriram PolyTech Ltd. into the Company w.e.f. 1st October, 2004. This scheme has been given effect in the Annual Report and Financial Statements for the year ended 31st March, 2005 and thus the data for previous year is not comparable. 

 The Scheme of Amalgamation will strengthen and consolidate the position of the Company in PVC related businesses and will enable it to participate more vigorously and profitably in an increasingly competitive and liberalized market. 

Dividend 

 The Directors are pleased to recommend total dividend @ 80% (including the interim dividend @ 25% paid in November, 2004) on Equity Shares of Rs.10/- each for the year ended 31st March, 2005. 

 Performance 

 The Company's sales grew by over 29% from Rs.14756.2 Millionss in the previous year to Rs.19051.9 Millionss during the current year. The operating profit of the Company for the year increased to Rs.2271.0 Millionss from Rs.1946.5 Millionss last year, reflecting an increase of over 16%. The Company's profit before tax (excluding exceptional items) for the year at Rs.1385.3 Millionss has grown by over 34% as against Rs.1029.8 Millionss achieved last year. 

 The Company's earnings during the year under review were driven primarily by healthy growth in the Plastics, Chemicals and Sugar businesses. Operationally, the Fertiliser business too performed well, but this business witnessed decline in profitability due to tightening of energy norms by Fertiliser Industry Coordination Committee (FICC) w.e.f. April 1, 2004 and freeze on the conversion costs as a result of which the increase in these costs during the year were not reimbursed by the Government. 

 The performance of various businesses of the Company for the year ended 31st March, 2005 has been stated in the Management Discussion and Analysis Report, which appears as a separate statement in the Annual Report. 

 Subsidiary Companies 

 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 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, 2005 along with the Reports of the Board of Directors of the Company's 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, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company includes the financial information of its subsidiaries. 

 Finance 

 During the year, the Company redeemed 3rd and final instalment of 13% Non-convertible Debentures (NCDs) of Rs.100/- each issued in 1996 aggregating to Rs.20.2 Millionss. 

During the year, the Board of Directors of the Company forfeited 7.8 lacs partly paid up Equity Shares. 

 The Company continues to enjoy the highest rating of A1+ for its short term borrowings. The Company has been upgraded from A rating to A+ rating for its long term borrowings. 

 International Finance Corporation, Washington has sanctioned a term loan facility during the year to fund the expansion plans in the Chemicals and PVC business and to enhance the captive power facilities. 

SECURED

1. Debentures:

i) Debentures detailed below are secured by English first mortgage on the Company's property at Taluka Kalol, District Candhinagar, Gujarat and first equitable mortgage/ charge on immovable/ movable properties, both present and future, of the Company's undertakings at Kota, Rajasthan, subject to charges created/ to be created in favour of the Company's bankers on stocks, stores and book debts for securing borrowings for working capital, and shall rank paripassu in all respects with the security created or to be created in terms of the stipulations of the respective Trust Deeds:

a) 15,00,000 (2003-2004 -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. (Rs. 50.0 millions due within a year, 2003- 2004 - Rs. Nil).

b) 5,00,000 (2003-2004-5,00,000) 11% Secured redeemable non-convertible debentures of Rs. 100 each, redeemable in three equal annual instalments commencing from November 1, 2006.

ii) Nil (2003-2004 - 6,13,618) 13% Secured redeemable non-convertible debentures of Rs. 100 each were redeemable in three equal annual instalments commencing from March 26, 2003. These debentures were secured by English second mortgage on the Company's property at Taluka Kalol, District Gandhinagar, Gujarat and second equitable mortgage/ charge on immovable/ movable properties, both present and future, ofthe Company's undertakings at Kota, Rajasthan, (save and except stocks, stores and book debts) subject to and subservient to the securities already created/ to be created as first charge for any existing/ future borrowings ofthe Company and were ranking pari-passu with any other second charge that might be required to be created to secure any existing/ future borrowings. The third and final

instalment has been paid during the year. (Rs. Nil due within a year, 2003-2004 - Rs. 2.02 millions). iii) Debentures detailed below are secured by English first mortgage on the Company's property at Taluka Kalol, District Gandhinagar, Gujarat and first equitable mortgage/charge on immovable/movable properties both present and future, ofthe Company's undertaking at District Bharuch, Gujarat (save and except book debts) subject to charges created/ to be created in favour ofthe Company's 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) 6,00,000 (2003-2004 - 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. (Rs. 20.0 millions due within a year, 2003-2004 - Rs. Nil).

b) 1,00,000 (2003-2004 -1,00,000) 11 % Secured redeemable non-convertible debentures of Rs. 100 each, redeemablein three equal annual instalments commencing from November 1, 2005. (Rs. 03.3 crore due within a year 2003-2004 - Rs. Nil).

c) 4,00,000 (2003-2004-4,00,000) 11% Secured redeemable non-convertible debentures of Rs, 100 each, redeemable in three equal annual instalments commencing from November 1, 2006.

2. Short term working capital borrowings from Banks:

Loans from banks on cash credit account of Rs. 12.9 millions (2003-2004 - Rs. 409.0 millions) are secured by first charge by way of hypothecation of stocks/stores and book debts of the Company's undertaking at Kota and Tonk in Rajasthan. Ajbapur and Rupapur in Uttar Pradesh and Bharuch in Gujarat. 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 Company's undertakings at Kota in Rajasthan and Ajbapur in Uttar Pradesh and second charge by way of mortgage/ hypothecation of all the immovable/movable properties (other than current assets) of the Company's undertakings at

Rupapur in Uttar Pradesh.

3. Other loans:

(i) Term loans of Rs. 711.5 millions (2003-2004 - Rs. 866.5 millions) from banks and term loans of Rs. 239.5 millions (2003-2004 - Rs. 284.5 millions) from others are secured by pari-passu first mortgage/ charge and a term loan of Rs. Nil (2003-2004 - Rs. 200.0 millions) from a bank was secured by way of second mortgage/ charge, created on ail immovable

and movable assets, both present and future, pertaining to the Company's undertakings at District Bharuch, Gujarat, (save and except book debts), subject to prior charges created/to be created in favour of the Company's bankers on the stocks of raw materials, semi-finished and finished goods and consumable stores for working capital borrowings.

(Rs. 267.5 millions due within a year, 2003:2004 - Rs. 209.0 millions).

(ii) Term loans of Rs. 1542.2 millions (2003-2004 - Rs. 80.94 millions) from banks and term loans of Rs. 368.0 millions (2003-2004 - Rs. 188.0 millions) from others are secured by way of first mortgage/charge, created/to be created, ranking pari-passu on all immovable and movable assets, both present and future, (save and except book debts) subject to charges created or to be created in favour of the Company's bankers on the stocks of raw materials, semifinished

and finished goods and consumable stores for working capital borrowings and term loan of Rs. 656.1 millions (2003-2004 - Nil) from others are secured by way of first mortgage/charge, created/to be created, ranking pari-passu on all immovable and movable assets, both present and future, subject to charges created or to be created in favour of the Company's bankers on the stocks of raw materials, semi-finished and finished goods and consumable stores

and receivables for working capital borrowings, of the Company's undertakings at Kota, Rajasthan. (Rs. 256.1 millions due within a year, 2003-2004 - Rs. 189.6 millions).

(iii) Term loan of Rs. 93.3 millions (2003-2004 - Rs. 98.7 millions) from banks is secured by way of first mortgage/charge, ranking pari-passu, on all immovable/movable assets, both present and future (excluding existing power plants and book debts), pertaining to the Company's Ajbapur Sugar Complex and Rupapur Sugar Complex, Uttar Pradesh,

subject to charges created/to be created in favour of Company's bankers on the stocks of raw materials, semi-finished goods, finished goods and consumable stores for securing working capital borrowings. (Rs. 20.0 millions due within a year, 2003-2004 - Rs. 0.50 crore).

(iv) Term loan of Rs. 500.0 millions (2003-2004 - Rs.11.0 millions) from banks are secured by way of first mortgage/charge, ranking pari-passu, on all immovable/movable assets, both present and future (excluding existing power plants and current'assets) and term loan of Rs. 97.1 millions (2003-2004 - Rs. 97.1 millions) from others is secured by way of a exclusive second charge on all immovable/movable assets (save and except book debts) sbject to charges created/ to be created in favour of the Company's 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 Company's Ajbapur Sugar Complex, Uttar Pradesh. (Rs. Nil due within a year, 2003-2004 - Rs. 11.0 millions).

(v) Rupee term loan of Rs. 150.0 millions (2003-2004 - Rs. 190.0 millions) from others is secured by way of first exclusive mortgage/ charge, created/ to be created on power plants at Ajbapur Sugar Complex and Rupapur Sugar Complex of the Company. (Rs. 40.0 millions due within a year, 2003-2004 - Rs. 40.0 millions).

DCM Shriram Consolidated Ltd’s initiative in setting up rural/semi-urban utility marts by the brand name “Hariyali Kisaan Bazaar Chain” is set to get a boost as it plans to open 35 outlets over the next 12 months.

Currently, there are 24 outlets spread over Uttaranchal, Punjab, Haryana, Rajasthan, and Uttar Pradesh. Another four will be opened this month. The Hariyali Kisaan Bazaar model seeks to empower the Indian farmer by setting up retail centres and providing all retail solutions, from utilities to banking.

With an investment of Rs 2 crore the outlets are set up over 2-3 acres, providing infrastructure to farmers.

"We will also have petrol pumps of Bharat Petroleum, extensions of ICICI Bank branches, LPG outlets, and a Yamaha Motorcycle showroom at these outlets," he said.

For Q1 June 2005, DCM Shriram Consolidated has reported a 162% growth in Q1 June 2005 net profit to Rs 38.58 crore as compared to Rs 14.70 crore in Q1 June 2004. Revenues jumped 80% to Rs 584 crore as compared Rs 323.65 crore last year.

DCM Shriram Consolidated is a diversified firm with interests in sugar, farm inputs marketing, PVC resin and chlor-alkali chemicals.

The company recently commissioned a new furnace for calcium carbide, enhancing calcium carbide capacity from 190 TPD to 340 TPD. Further, it also completed the expansion cum conversion plan of its chlor-alkali facility at Kota in March 2005.

The company has decided to enhance its sugar capacities through brownfield and greenfield expansions from 14,000 TCD to 33,000 TCD (revised from 28,000 TCD announced earlier). This will be accompanied by increase in co-gen power capacity from 24MW to 81MW (revised from 72 MW announced earlier) including 38MW for export of power to the state grid. The expansion of sugar capacities is expected to be implemented by October 2006, while the last phase of the co-gen power augmentation is likely to be concluded by October 2007.

The chlor-alkali capacity at the Kota manufacturing complex is also proposed to be further expanded from 250 TPD to 310 TPD by February 2006

CMT REPORT [Corruption, Money laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 44.88
UK Pound	1	Rs. 83.46
Euro	1	Rs. 57.13

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		64

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions