DCM Shriram Industries- Limited Review For The Quarter Ended Jun 30, 2007

DCM Shriram Industries Ltd has informed that in the limited review report of the Company for the quarter ended June 30, 2007, the Auditors of the Company have made the following observations:

1. The Auditors observations in its audit report dated July 30, 2007 on the accounts of the Company for the year ended March 31, 2007, although paragraph (ii) below not disclosed in the accompanying statement have been summarized below:

(i) there are various issues relating to sales tax, income-tax, interest etc. arisen / arising out of the reorganization arrangement of the undivided DCM Ltd which will be settled and accounted for in terms of the Scheme of Arrangement of DCM Ltd as and when the liabilities / benefits are finally determined. The ultimate effect of these is not ascertainable at this stage. (refer note 4 of the accompanying statement)

(ii) regarding managerial remuneration paid pending necessary approvals under section 269 - of the Companies Act, 1956 read with para 1(B) of part II of section II of schedule XIII to the Act.

2. As per the policy followed by the Company for preparation of quarterly results, the sugar off - season expenditure amounting to Rs 5.10 crores have been deferred for inclusion in the cost of sugar to be produced in remaining part of the financial year. Had the Company charged expenditure so incurred to the accounting period in which such expenses were incurred, the increase in stock in trade would have been lower by Rs 4.28 crones and loss after tax would have been higher by Rs 2.83 crores for the quarter ended June 30, 2007.