MIRA INFORM REPORT

Report Date :

18.11.2011

IDENTIFICATION DETAILS

Name :	DALMIA BHARAT ENTERPRISES LIMITED (w.e.f. 25.03.2010) DALMIA REFRACTORIES (PROPRIETOR - DALMIA BHARAT ENTERPRISES LIMITED)
Formerly Known As :	DCB RENEWABLE ENERGY AND INDUSTRIES LIMITED (19.02.2010) SRI KESAVA MINES AND MINERALS LIMITED
Registered Office :	Dalmiapuram, Thiruuchirapalli District – 621 651, Tamilnadu
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	10.02.2006
Com. Reg. No.:	18-058818
Capital Investment / Paid-up Capital :	Rs.162.380 millions
CIN No.: [Company Identification No.]	L40109TN2006PLC058818
TAN No.: [Tax Deduction & Collection Account No.]	CHED07608G
PAN No.: [Permanent Account No.]	AAJCS7366K
Legal Form :	A public limited liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Not Available
No. of Employees :	Manufacturer of Cement.

RATING & COMMENTS

MIRA’s Rating :

Ba (47)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 19827000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Trade relations are reported as fair. Business is active. Payments are reported to be usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office :	Dalmiapuram, Thiruuchirapalli District – 621 651, Tamilnadu, India
Tel. No.:	91-4329-235131
Fax No.:	91-4329-235111
E-Mail :	nidhi.bisaria@dalmiacement.com
Website :	www.dalmiabharat.com
Head Office :	11^th and 12^th Floor , Hansalaya , 15, Barakhamba Road, New Delhi – 110 001, India
Tel. No.:	91-11-23465100
Fax No.:	91-11-23313303

DIRECTORS

As on 31.03.2011

Name :	Mr. Pradip Kumar Khaitan
Designation :	Chairman and Independent Non-Executive Director
Name :	Mr. Jai Hari Dalmia
Designation :	Managing Director
Name :	Mr. Yadu Hari Dalmia
Designation :	Managing Director
Name :	Mr. Gautam Dalmia
Designation :	Director
Name :	Mr. Puneet Yadu Dalmia
Designation :	Director
Name :	Mr. Donald Peck
Designation :	Independent Non-Executive Director
Name :	Mr. N. Gopalaswamy
Designation :	Independent Non-Executive Director
Name :	Mr. Bharat Anand
Designation :	Independent Non-Executive Director

KEY EXECUTIVES

Name :	Shatrughan Singh
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2011

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	6,114,155	7.53
Bodies Corporate	41,147,899	50.68
Any Others (Specify)	86,665	0.11
Trusts	86,665	0.11
Sub Total	47,348,719	58.32
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	47,348,719	58.32
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	2,500	-
Financial Institutions / Banks	1,669,736	2.06
Central Government / State Government(s)	128,155	0.16
Insurance Companies	1,063,971	1.31
Foreign Institutional Investors	6,652,978	8.19
Sub Total	9,517,340	11.72
(2) Non-Institutions
Bodies Corporate	2,590,379	3.19
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 million	7,814,697	9.63
Individual shareholders holding nominal share capital in excess of Rs.0.100 million	2,611,803	3.22
Any Others (Specify)	11,306,365	13.93
Overseas Corporate Bodies	3,253,805	4.01
Foreign Corporate Bodies	4,470,588	5.51
Non Resident Indians	175,524	0.22
Foreign Nationals	19,655	0.02
Custodian	188,303	0.23
Trusts	3,181,266	3.92
Clearing Members	2,564	-
Directors & their Relatives & Friends	14,660	0.02
Sub Total	24,323,244	29.96
Total Public shareholding (B)	33,840,584	41.68
Total (A)+(B)	81,189,303	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
(1) Promoter and Promoter Group	-	-
(2) Public	-	-
Sub Total	-	-
Total (A)+(B)+(C)	81,189,303	-

BUSINESS DETAILS

Line of Business :

Manufacturer of Cement.

Products :

Item Code No. (ITC Code)	690220
Product Description	Refractory

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Refractory	(‘000 Tonnes)	N.A.	N.A.	49.41

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

v Axis Bank Limited

v Bank of Baroda

v Bank of India

v BNP Paribas

v Canara Bank

v Central Bank of India

v Corporation Bank

v DBS Bank Limited

v HDFC Bank Limited

v The Hongkong and Shanghai Banking Corporation Limited

v ICICI Bank Limited

v IDBI Bank Limited

v Indian Bank

v Landesbank Baden – Wurttemberg

v The Lakshmi Vilas Bank Limited

v Oriental Bank of Commerce

v Punjab National Bank

v State Bank of India

v State Bank of Mysore

v State Bank of Travancore

v Union Bank of India

v United Bank of India

v Vijaya Bank

v Yes Bank Limited

Facilities :

Secured Loans	31.03.2011 Rs. In Millions	31.03.2010 Rs. In Millions
Working Capital Loans	3.180	0.000
Total	3.180	0.000

(i) Working Capital loans are to be secured by hypothecation of inventories and other assets in favour of the participating Banks ranking pari-passu on inter-se-basis.

Banking Relations :	--
Statutory Auditors :
Name :	S.S. Kothari Mehta and Company Chartered Accountants
Address :	New Delhi, India
Internal Auditors :	KPMG
Subsidiaries :	v Dalmia Cement (Bharat) Limited v Dalmia Power Limited v DCB Power Ventures Limited v Kanika Investment Limited

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
100000000	Equity Shares	Rs.2/- each	Rs.200.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
81189303	Equity Shares	Rs.2/- each	Rs.162.380 millions

Note:

Of the above:

(i) 80939303 Shares were allotted as fully paid-up pursuant to Scheme of Arrangement between the Company and Dalmia Cement (Bharat) Limited (formerly Avnija Properties Limited), DCB Power Ventures Limited, Dalmia Bharat Sugar and Industries Limited [formerly Dalmia Cement (Bharat) Limited] without payments being received in cash.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		162.380	0.500	0.500
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		4794.330	0.980	0.000
4] (Accumulated Losses)		0.000	0.000	(0.020)
NETWORTH		4956.710	1.480	0.480
LOAN FUNDS
1] Secured Loans		3.180	0.000	0.000
2] Unsecured Loans		0.000	0.000	13.340
TOTAL BORROWING		3.180	0.000	13.340
DEFERRED TAX LIABILITIES		4.550	0.000	0.000
TOTAL		4964.440	1.480	13.820
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		77.450	0.000	13.220
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		3376.090	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	306.900	0.000	0.000
	Sundry Debtors	103.720	0.000	0.000
	Cash & Bank Balances	582.700	0.620	0.610
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	844.760	1.060	0.000
Total Current Assets		1838.080	1.680	0.610
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	153.000	0.010	0.010
	Other Current Liabilities	47.460	0.000	0.000
	Provisions	126.720	0.190	0.000
Total Current Liabilities		327.180	0.200	0.010
Net Current Assets		1510.900	1.480	0.600
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		4964.440	1.480	13.820

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Sales and Services Rendered	1345.590	0.000	0.000
		Other Income	133.010	2.320	0.040
		TOTAL (A)	1478.600	2.320	0.040
Less	EXPENSES
		(Increase)/ Decrease in Stocks	(19.790)	0.000	0.010
		Raw Materials Consumed	382.590	0.000
		Purchase of Trading Goods	4.410	0.000
		Personnel Expenses	305.690	0.000
		Operating and Other Expenses	504.450	1.120
		TOTAL (B)	1177.350	1.120	0.010
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		301.250	1.200	0.030
Less	FINANCIAL EXPENSES (D)		0.880	0.000	0.000
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		300.370	1.200	0.030
Less/ Add	DEPRECIATION/ AMORTISATION (F)		14.380	0.000	0.000
	PROFIT BEFORE TAX (E-F) (G)		285.990	1.200	0.030
Less	TAX (H)		71.560	0.200	0.010
	PROFIT AFTER TAX (G-H) (I)		214.430	1.000	0.020
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		0.980	(0.020)	(0.040)
Less	APPROPRIATIONS
		Transfer to General Reserve	22.000	0.000	0.000
		Dividend
		- Proposed Dividend	101.490	0.000	0.000
		- Dividend Distribution tax thereon	16.460	0.000	0.000
	BALANCE CARRIED TO THE B/S		75.460	0.980	(0.020)
	EARNINGS IN FOREIGN CURRENCY
		Export of goods at FOB value	24.180	0.000	NA
	TOTAL EARNINGS		24.180	0.000	NA
	IMPORTS
		Spare parts, coal etc.	136.850	0.000	NA
	TOTAL IMPORTS		136.850	0.000	NA
	Earnings Per Share (Rs.)		2.64	3.99	0.46

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	14.50	43.10	50.00
Net Profit Margin (PBT/Sales)	(%)	21.25	0.00	0.00
Return on Total Assets (PBT/Total Assets}	(%)	14.93	71.43	0.22
Return on Investment (ROI) (PBT/Networth)		0.06	0.81	0.06
Debt Equity Ratio (Total Liability/Networth)		0.07	0.14	27.81
Current Ratio (Current Asset/Current Liability)		5.62	8.40	61.00

LOCAL AGENCY FURTHER INFORMATION

COMPANY PROFILE:

Subject is a cement manufacturer with plants in Tamilnadu and Andhra Pradesh with a capacity of nine million tonnes per annum. The company is engaged in the business of cement, thermal power and other businesses. They operate the business of cement and power through their subsidiaries, namely Avnija Properties Limited and DCB Power Ventures Limited, subject was incorporated on February 10, 2006 with the name Sri Kesava Mines and Minerals Limited In February 19, 2010, the company changed their name from Sri Kesava Mines and Minerals Limited to DCB Renewable Energy and Industries Limited In March 25, 2010, they further changed their name to Dalmia Bharat Enterprises Limited In May 2010, Dalmia Cement, the parent company and KKR had collaborated to invest Rs.7500.000 millions for use in both sequential and merger and acquisition-based growth of the cement making firm. In September 2010, as per scheme of arrangement, Dalmia Cement (Bharat) Limited de-merged their cement business, refractory business, thermal power business and certain other businesses (collectively the de-merged Undertakings) and transferred to the company. As part of the scheme, the company further de-merged the cement business to Avnija Properties Limited (Avnija) and thermal power business to DCB Power Ventures Limited (DPVL). In September 2010, the company received Rs.5000.000 millions investment from private equity firm KKR in Avnija Properties Limited, manufacturer of Dalmia brand of cements. The company is going to be listed on Bombay Stock Exchange and National Stock Exchange by this year end. The company is also looking to raise funds from some of the private equity (PE) firms to improve their production capacity.

BOARD OF DIRECTORS:

Pradip Kumar Khaitan

Chairman and Independent Non-Executive Director

Mr. Pradip Kumar Khaitan, 70, has over 45 years experience in various industries. He was co-opted as a Director of the Company on February 11, 2011. He holds an LL.B. degree from the University of Calcutta. As a partner of Khaitan and Company, Solicitors and Advocates, he has extensive experience in legal and commercial matters. He is a Director in several Public Limited Companies, including, CESC Limited, Electrosteel Castings Limited, Graphite India Limited, Hindustan Motors Limited, India Glycols Limited, OCL India Limited, Pilani Investment and Industries Corporation Limited, Sillanders Arbuthnot and Company Limited, TCPL Packaging Limited, Dhunseri Petrochem and Tea Limited, VISA SteeI Limited and Woodlands Multi speciality Hospital Limited.

Jai Hari Dalmia

Managing Director

Mr. I H. Dalmia, 66, holds a BE. degree in Electrical Engineering from Jadavpur University and a Master’s degree in Electrical Engineering from the University of Illinois, Urbana Champagne. He was co-opted as a Director of the Company on February 11, 2011 and was elevated as Managing Director of the Company w.e.f April 01, 2011. He has more than 39 years of experience cutting across various industries which includes wide knowledge and experience of refractory, sugar and cement businesses. Mr. J. H. Dalmia is deeply involved in research and development, having personally received several patents.

Yadu Han Dalmia

Managing Director

Mr. Y. H. Dalmia, 63, holds a B.Com (Hon) degree from Delhi University and is a Fellow Member of the Institute of Chartered Accountants of India. He was co-opted as a Director and Managing Director of the Company on February 11, 2011. He has more than 38 years of experience in the cement industry. Mr. Y. H. Dalmia has served as President of the Cement Manufacturers Association and is a known figure in the cement industry.

Gautam Dalmia

Director

Mr. Gautam Dalmia, 43, holds B.S. and M.S. degrees in Electrical Engineering from Columbia University. He has 18 years of experience in the cement and sugar industries. He was co-opted as a Director of the Company on February 11, 2011. He was directly responsible for managing the cement and sugar businesses and was leading all operations and execution of cement projects. He provides leadership to the commercial functions fort he group.

Puneet Yadu Dalmia

Director

Mr. Puneet Yadu Dalmia, 38, holds a B. Tech. degree from the Indian Institute of Technology, Delhi and isa gold medalist from the Indian Institute of Management, Bangalore in Strategy and Marketing. He was co-opted as a Director of the Company on February 11, 2011. He has 14 years of experience in Cement industry having started his career as the co-founder and Chairman of one of the most profitable e-recruitment websites in India, which was later acquired by Monster.com, a Nasdaq listed multinational company. Mr. Puneet Yadu Dalmia conceptualised the growth strategy and governance architecture of the Group to focus on its core businesses and is spearheading the growth plans for the group.

Donald Peck

Independent Non-Executive Director

Mr. Donald Peck, 59, holds an M.A. degree and a Doctorate in Economic History from Oxford University. He was nominated as a Director of the Company on October 01, 2010. Mr. Pecks expertise lies in emerging markets investing, both in the equity investment/fund management business, experience in which was acquired by him when he was with International Finance Corporation in Washington and prior to that in the investment banks of Lloyds Bank and Morgan Grenfell. He joined CDC Capital Partners and was responsible for helping it to develop its equity investment business and setting up its fund management business worldwide. Having run the CDC/Act is private equity business in India from 1995 to 2007, Mr. Peck became one of the senior founding partners in Act is in 2004.

N. Gopalaswamy

Independent Non-Executive Director

Mr. N. Gopalaswamy, 79, holds a B.Sc. degree in Chemistry from Madras University and a B.E. degree in Chemical Engineering from Annamalai University. He is a member of the Institute of Industrial Engineers, USA, the Indian Institution of industrial Engineering, the Indian Institute of Chemical Engineering, and the Institution of Engineers (India). Having held the position of President for 25 years, since 2007, he is a Council Member of the Tiruchirapalli Productivity Council. He has over 43 years of experience in the cement industry.

Bharat Anand

Independent Non-Executive Director

Mr. Bharat Anand, 35, is a Partner in the Corporate Department of Khaitan and Company and joined Khaitan and Company in 2009. He was co-opted as a Director of the Company on October 1, 2010. Mr. Anand studied Economics at Delhi University and Law at Jesus College, Cambridge, as Cambridge Commonwealth Trust Scholar. Prior to joining Khaitan and Co, Mr. Anand worked at the London offices of Fresh fields, a ‘magic circle” law firm. Mr. Anand has advised several multinationals on their Indian investments and joint ventures. He also regularly advises Indian entities making offshore investments and acquisitions. UK based RSG Consulting featured Mr. Anand in their Iist of top 25 ‘second generation lawyers’ in India.

SCHEME OF ARRANGEMENT

The Scheme of Arrangement between Dalmia Bharat Sugar and Industries Limited (formerly known as Dalmia Cement (Bharat) Limited, the Company, Dalmia Cement (Bharat) Limited(formerly known as Avnija Properties Limited) and DCB Power Ventures Limited, which was approved by the Madras High Court by its Order dated July 29, 2010 was made effective on September 01, 2010. In accordance with the said Scheme of Arrangement, the refractory business carried out in the name and style of Dalmia Refractories stood transferred and vested in the Company with effect from the appointed date, viz., April 01, 2010. The cement business got vested in a subsidiary, Dalmia Cement (Bharat) Limited, and the power business comprising of captive thermal power plants installed at the cement units got vested in its ultimate subsidiary, DCB Power Ventures Limited. The results for the year ended March 31, 2011 are, therefore, not strictly comparable with that of the immediately preceding year.

SHARE CAPITAL AND LISTING OF SHARES

In terms of the aforesaid Scheme of Arrangement, the Company issued and allotted 8,09,39,303 Equity Shares of X2I- each in the capital of the Company to those Shareholders of Dalmia Bharat Sugar and Industries Limited holding shares on the record date, i.e. September 27,2010, fixed by the Board of Directors for this purpose.

The Equity Shares of the Company now stand listed on the Bombay Stock Exchange, National Stock Exchange and Madras Stock Exchange.

Consequent upon the issue of shares, the Company ceased to be a wholly owned subsidiary of Dalmia Bharat Sugar and Industries Limited.

MANAGEMENT DISCUSSION AND ANALYSIS

Economic Scenario and Outlook

Indian economy had a robust growth of 8.5% in FY 11, though there are signs of growth rate slowing down, with Q4 growth of only 7.8%. Inflation at about 9% for FY-11, continues to be a matter of concern, resulting in increase in interest rates, and necessitating tightening of monitory policy by RBI. However, with expected normal monsoon, Government expects inflation to moderate in coming months. Fiscal deficit figures for FY 11, have been somewhat better than originally budgeted, and Government expects to keep the same at4.6% of GDP in FY 12. Government is trying to strike a delicate balance between growth and controlling inflation, with tilt towards the latter. Slowing of growth could adversely impact Government Revenues, thus impacting the fiscal deficit. Oil and energy prices continue to rise globally, which could further impact fiscal deficit, with increased subsidy burden. Though world economy is gradually coming out of downturn, situation in developed countries continues to be fluid. Further, Chinese economy also faced with inflation, is also slowing down, with growth rate sliding to single digit level. This could impact commodity prices globally. Despite above challenges, it is expected that, Indian economy would continue to grow at a pace of about 8.5% going ahead.

Company Overview

Group Restructuring

The FY 11 was a historic year for the Company. The corporate restructuring plan launched by Dalmia Bharat Sugar and Industries Limited (DBSIL) {formerly known as Dalmia Cement (Bharat) Limited (DCBL)} got completed and subject operated in its first full year, focusing on refractory, cement and thermal power businesses. Besides the listing of DBSIL, the listing of DBEL on the NSE and BSE has led to creation of focused pure play entities. Shareholders of erstwhile DCBL, now renamed DBSIL received additional shares in DBEL in the ratio of 1:1.

As per the new structure of DBEL, Dalmia Refractories is at holding level. Avnija (now renamed Dalmia Cement (Bharat) Limited) and Dalmia Power Limited are subsidiaries of subject.

Business Overview: Refractories

The Company is getting high alumina refractory manufactured on job work basis, mainly catering to cement industry which accounts for about 15%oftotal refractory consumption. Due to slow down in cement market, many project orders dried up or had been deferred. As a result business remained under pressure during the year. Lower capacity utilisation in the industry and volatility in input cost is expected to keep margins under pressure.

Owing to lack of availability of good quality refractory grade Bauxite, which is the main raw material, the Company depends heavily on imports.

The production volumes for FY 11 for refractory business is 49,414 MnT as compared to 48,714 MnT in FY 10.

Financial Overview

The Company's Total Income stood at Rs.1352 millions and EBITDA at Rs.175 millions for the period ended March 31, 2011. Interests Depreciation are being charged at Rs.0.9 million and Rs.14 millions, respectively. The Other income for the year is Rs.127 millions and Tax provision for the year stands at Rs.72 millions. The Net Profit for the year is at Rs.214 millions. EPS for the year stands at Rs.2.64 per share.

Outlook

In FY 12, it is expected that the cement industry will start looking up as the pace of capacity addition is likely to fall significantly during the year. Despite this the margins are likely to continue to remain under pressure in the current year.

The impetus of Government spending on Infrastructure growth, is likely to lead to rise in demand for refractories. However, as the Indian refractory is highly fragmented, the competitive pressure on realisations is likely to remain.

To reduce dependence on cement industry and to provide growth impetus to the refractory business, the company is also targeting other industries such as coke oven, steel and glass, etc.

Business Overview: Cement and Thermal Power During FY 11, all India domestic consumption of cement grew by about 6% reaching 210 MnT, as against 5 years CAGR of 9%.Empirically there is evidence of correlation between GDP growth and Cement Consumption growth of 1.2x. During the year about 34 MnT of new capacity was added. With this addition to capacity, the aggregate addition of cement manufacturing capacity over the last 3 years is about 102 MnT, which when compared with the increase in consumption of cement by 45 MnT, has resulted in a significant demand/supply mismatch. The pressure on the industry was further augmented by decline in exports of clinker / cement, which declined by about10% to 5 MnT.

During FY 11 total consumption in South (including Maharashtra) grew, just by 2.7%reaching 83 MnT as compared to 5 years CAGR of 8.1%.WhileTamil Nadu and Kerala, which are their main markets, grew by 5%, Andhra Pradesh had a negative growth of 14%. During the year about 16 MnT of new capacity was added in South. Thus during last 3 years about 54MnT of new capacity were created, against consumption increase of only about 13 MnT. Though in short-term demand / supply mismatch poses challenges, in their opinion long-term outlook for the industry remain positive. Robust GDP growth, expected high infrastructure spending is expected to result in demand for cement, driven by housing and commercial space needs.

Growth Ahead

The investment in infrastructure in India has increased from 5% of the gross domestic product (GDP) in FY 03 to 6% last fiscal. It is expected to touch 10% of GDP in the 12thFive Year Plan (2012-2017). There is a considerable hike in Government focus on investment in infrastructure which is visible through announcement of following Government initiatives:

• Opening up a number of infrastructure sectors to private players

• Promoting investment in the sector by private players by permitting FDI

• Huge spending on projects like the National Highway Development Project

• National Maritime Development Programme

• Metro in urban areas through PPP

• Adding 1,00,000 MW in Power sector

The Indian cement industry must prepare to participate in such growth opportunity. What may appear as an overcapacity today is actually a solid foundation for tomorrow. One needs to also factor in the surplus disposable money reaching the urban employed class. Its impact on housing sector will be significant.

Financial Overview

During the year, sales volume increased by 14%, when most key players operating in their market had flat or negative growth in volumes. Total Income stood at Rs.16943 millions and EBITDA at Rs.3373 millions, giving an operating EDITDA margin of 20%.

Average cost of fuel during the year increased by over 25 %, which is the main element of variable cost, including the fuel requirement of Captive Power Plants (CPPs). Increase in diesel prices, impacted logistics costs. Work on Railway siding at their Kadapa unit is progressing and should be completed by December 2011. This will help serve long distant markets from this unit more economically, and also relieve pressure on truck requirements.

During the year the Company was able to sell surplus power from CPPs to TNEB, to the tune of 154 Million KWH, making a profit of Rs. 200 million, on marginal cost basis. It appears that, this window of opportunity may not be available in FY 12 in a significant way.

Marketing Initiatives

DCBL has started an intense brand building exercise in its key markets. Detailed market study was conducted with an objective to enhance the visibility of the brand which is amongst the few prominent brands in the served markets.

The Company has initiated Tech Mobile service which augments in enhancing consumer value. Tech Mobile is a vehicle carrying testing equipments that reaches the site of the customer and helps them in the testing of concrete quality. In addition, the technical staff also enlightens the customer on the product knowledge including other construction materials at site. The Company has recently set up research laboratory at Chennai to support the initiative.

The Company has increased its brand visibility through increased advertising in public transports and at public places like airports, railway stations, local markets, etc.

The Company's novel and much appreciated effort is the launch of new programme on Star Vijay TV (Tamil) captioned "The Dalmia Best House'! This is a unique effort towards selecting and rewarding the Best House. This programme entails acknowledging and rewarding the architect and engineer who have contributed in making such good houses. It leads to appreciating talents more than a product promotion of the company.

Go Green

DCBL is significantly focused on several "Go Green" Initiatives such as development of Flora and Fauna, promoting consumption of Alternate Fuel such as agriculture and municipal solid waste, Fugitive Emission Control, Infrastructure Development for Truck Parking etc., were undertaken.

The Company adopted non-conventional eco-friendly mining methods which eliminate drilling and blasting operations by deploying mega rock breakers. The breaker is of Vibro Silenced type which reduces the noise during the operation. The machine is equipped with automatic fire suppression system to safe guard the machine from fire hazards.

They made significant efforts in the area of Water Conservation and management in FY11.Rain water harvesting ponds were formed from the rain and seepage water collected in the mines across all the units. This helped in recharging the bore well of the surrounding villages and avoided water inundation thus improving energy efficiency as well. The collected water is also utilised for wetting of mine haul roads and for the development of green belt around the mine boundaries.

Productivity through Safety

The Company is focused on Productivity through Safety. Best Practices such as Safety Stewards System, Work Permit, Incident Investigation, 100% PPE's (Personal Protective Equipment) were practiced to focus on Safety awareness and consciousness in work life.

They are glad to share that in FY 11 their Kadapa unit has received Integrated Management System Certification for Quality, Environment and Health and Safety.

Growth Plans

Cement business is planning one more green field investment of 2.5 MnT capacity through an SPV, Dalmia Cement Ventures Limited, and it is expected to goon stream by the next up cycle.

Outlook

In spite of the immediate situation of overcapacity, DBEL's growth outlook appears positive. The Company has witnessed signs of demand growth and improvement in realizations at the beginning of FY 12.The ramp up of its plants at Kadapa and Ariyalur enabled it to increase its despatches.

Improvement in market share in its traditional markets of Tamil Nadu and Kerala and newmarkets like Karnakata and Andhra Pradesh augurs well, going forward. It shall leverage its economy of scale in improving the cost of inputs. The infusion of capital from KK R shall show its full impact in coming years.

The industry operated at lower capacity utilisations in FY 11; approx75%on All India basis and approx65% in Southern region. They expect capacity utilisations at similar levels in FY 12.This would improve thereafter as capacity addition slows down and demand catches up with supply.

They expect demand to grow at 8-9% in FY 12 and FY 13.Thecapacity additions at All India level is expected to be at 24 MnT in FY 12 and 30 MnT in FY 13. South will account for about 42%of total capacity additions in FY12 and FY13. East capacity addition is expected to be around 25% in FY11 and 9% in FY13.

CONTINGENT LIABILITIES (NOT PROVIDED FOR) IN RESPECT OF:

Particulars	31.03.2011 (Rs. in millions)
a) Claims against the company not acknowledged as debts	4.530

FIXED ASSETS:

Tangible Assets: (Owned)

v Land

v Land (Leasehold)

v Buildings

v Plant and Machinery

v Vehicles

v Furniture and Fixtures

Intangible Assets:

v Software Licenses (Bought out)

WEBSITE DETAILS:

PROFILE:

Subject was incorporated as Sri Kesava Mines and Minerals Limited on February 10, 2006, under the Companies Act, 1956 as a public limited company as a wholly owned subsidiary of Dalmia Cement (Bharat) Limited (DCBL). The name of the Company was changed to its present name Dalmia Bharat Enterprises Limited vide fresh Certificate of Incorporation dated 25-3-2010 issued by the Registrar of Companies, Tamil Nadu.

Under the Scheme of Arrangement between DCBL, subject, Avnija Properties Limited and DCB Power Ventures Limited which was approved by the Hon' ble High Court of Madras by its Orders dated 29th July, 2010, in the first phase the cement business, captive thermal power business along with the refractory business, etc. stands demerged from DCBL (now renamed as Dalmia Bharat Sugar and Industries Limited post demerger) to form a part of subject. Further, in the second stage, the cement business and the captive thermal power business stands demerged from subject to its wholly owned subsidiaries; Avnija Properties Limited and DCB Power Ventures Limited, respectively.

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.50.72
UK Pound	1	Rs.79.87
Euro	1	Rs.68.46

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	6
--CREDIT LINES	1~10	5
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		47

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 EXPLANATIONS

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	Capability to overcome financial difficulties seems comparatively below average.	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
-	NB	New Business	-

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.