THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

This Letter of Offer is being sent to you as a shareholder of DCM Shriram Industries Limited (hereinafter referred to as "the Target Company" or “DSIL”). If you require any clarification about the action to be taken, you may consult your stock broker or investment consultant or the Manager to the Offer or the Registrar to the Offer. In case you have recently sold your shares in the Target Company, please hand over this Letter of Offer and the accompanying Form of Acceptance cum Acknowledgement, Form of Withdrawal and Transfer Deed to the member of the Stock Exchange through whom the said sale was effected.

HB Stockholdings Limited

a company incorporated under the Companies Act, 1956

(Registered Office: Plot No. 31, Echelon Institutional Area, Sector-32, Gurgaon – 122001-07, Haryana)

Tel: 0124-4675500 Fax: 0124-4370985

(Hereinafter referred to as "the Acquirer" or “HBSL”)

along with Person Acting in Concert (PAC)

Mr. H. C. Bhasin, R/o C-2/7, Safdarjung Development Area, New Delhi-110016, Tel: 011-32555791

MAKE A CASH OFFER AT RS.130/- PER FULLY PAID UP EQUITY SHARE (BEING THE OFFER PRICE REVISED FROM RS. 70/- TO RS. 120/- & FURTHER REVISED FROM RS. 120/- TO RS. 130/- BEING MORE THAN THE HIGHEST PRICE AT WHICH THE SHARES HAVE BEEN ACQUIRED BY THE ACQUIRER FROM THE OPEN MARKET AFTER THE DATE OF PUBLIC ANNOUNCEMENT)

TO ACQUIRE

35,00,000 fully paid up equity shares of Rs.10/- each representing, as on fifteen days of the closure of this Offer, 20.12% of the expanded voting capital after taking into consideration the allotment of 21,00,000 equity shares consequent to the conversion of 7,00,000 share warrants to the specified entities of the Promoters / Promoter group / Persons Acting in Concert of the Target Company which is sub-judice before the Hon’ble Company Law Board which was, as on the date of PA, 22.88% of the voting capital

DCM SHRIRAM INDUSTRIES LIMITED

a company incorporated under the Companies Act, 1956

(Registered Office: Kanchenjunga Building, 6^th Floor, 18, Barakhamba Road, New Delhi-110001)

Tel: 011 - 23759300 Fax: 011 - 23350765

Attention:

· This Offer is being made pursuant to and in compliance with, among others, Regulation 10 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, and subsequent amendments thereto. The Acquirer does not intend to acquire control over the Target Company. However, if at any point of time in the future, the Acquirer intends to acquire control of the Target Company, it will comply with applicable provisions of the aforesaid Regulations.

· Since it is not a conditional Offer, the Offer is not subject to any minimum level of acceptance.

· The Offer is subject to the receipt of approval from the Reserve Bank of India (“RBI”) for acquiring equity shares from non-resident shareholders who will validly tender their equity shares under this Offer, if applicable. The Acquirer has already applied for in-principle approval of RBI and will make the necessary applications to and filings with RBI on behalf of the non resident shareholders.

· To the best of the Acquirer’s knowledge, there are no other statutory approvals required to implement the Offer other than that specified above.

· Shareholders, who have accepted the Offer by tendering the requisite documents in terms of the Public Announcement dated 19/11/2007 / Revised Public Announcement dated 29/11/2007 / Corrigendum to the Public Announcement dated 14/05/2008 / Letter of Offer dated 14/05/2008, can withdraw the same up to 3 working days prior to the closure of the Offer i.e. by 06/06/2008, in terms of Regulation 22(5A) of the SEBI (SAST) Regulations, 1997.

· If there is any further upward revision of the Offer Price by the Acquirer till the last permitted date for revision i.e. by 02/06/2008 or withdrawal of the Offer, the same would be informed by way of a public announcement in the same newspapers in which the original Public Announcement had appeared. Such revised Offer Price would be payable for all the shares tendered anytime during the Offer and accepted under the Offer.

· If there is a competitive bid:

(i) the public Offers under all the subsisting bids shall close on the same date;

(ii) as the Offer Price cannot be revised during seven working days prior to the closing date of the offers / bids, it would therefore, be in the interest of the shareholders to wait till the commencement of that period to know the final Offer Price of each bid and tender their acceptance accordingly.

· The last date for receiving the Competitive Bid was 10/12/2007 and no competitive bid has been made till date.

· A copy of the Public Announcement, Revised Public Announcement, Corrigendum to the Public Announcement and this Letter of Offer (including the Form of Acceptance cum Acknowledgement and the Form of Withdrawal) is also available on SEBI’s website (http://www.sebi.gov.in.)

All future correspondence, if any, should be addressed to the Manager to the Offer / Registrar to the Offer at the following address:

MANAGER TO THE OFFER

Mefcom Capital Markets Limited

5^th Floor, Sanchi Building,                                             77, Nehru Place, New Delhi - 110019

Tel.: +91(11) 46500500

Fax: +91(11) 46500550

Email: ashok.juneja@mefcom.in

Contact Person: Mr. Ashok Juneja

RCMC Share Registry Private Limited

B-106, Sector-2,

Noida-201301

Tel.: 0120-4015880

Fax: 0120-2444346

E-mail: shares@rcmcdelhi.com

Contact Person: Mr. Rakesh Adhana

REGISTRAR TO THE OFFER

FOR PROCEDURE FOR ACCEPTANCE OF THIS OPEN OFFER PLEASE REFER SECTION 10 “PROCEDURE FOR ACCEPTANCE AND SETTLEMENT OF

THE OFFER” (PAGE NOS. 27-30)

FORM OF ACCEPTANCE CUM ACKNOWLEDGEMENT AND FORM OF WITHDRAWAL IS ENCLOSED WITH THIS LETTER OF OFFER

SCHEDULE OF MAJOR ACTIVITIES OF THE OFFER

Activity	Date	Day
Issue of Public Announcement	19/11/2007	Monday
Specified Date	20/11/2007	Tuesday
Issue of Revised Public Announcement with Upward Revision of Price	29/11/2007	Thursday
Last date for a Competitive bid	10/12/2007	Monday
Issue of Corrigendum to the Public Announcement with Upward Revision of Price	14/05/2008	Wednesday
Letter of Offer to be posted to shareholders	17/05/2008	Saturday
Date of Opening of the Offer	23/05/2008	Friday
Last date for revising the Offer Price / number of shares	02/06/2008	Monday
Last date for withdrawal of acceptance by shareholders	06/06/2008	Friday
Date of Closing of the Offer	11/06/2008	Wednesday
Date by which the acceptance / rejection would be intimated and the corresponding payment for the acquired shares and /or the share certificate for the rejected shares will be despatched.	26/06/2008	Thursday

RISK FACTORS

Risks related to the Offer:

i. In the event that either, (a) the regulatory approvals are not received in timely manner, or (b) there is any litigation to stay the Offer, or (c) SEBI

instructs the Acquirer not to proceed with the Offer, then the Offer proceedings may be delayed beyond the schedule of activities indicated in this

Letter of Offer. Consequently, the payment of consideration to the shareholders of DSIL, whose shares have been accepted in the Offer as well as

shares not accepted by the Acquirer, may be delayed.

ii. In the event of over-subscription to the Offer, the acceptance will be on a proportionate basis.

Risks involved in associating with the Acquirer:

iii. The Acquirer does not warrant any assurance with respect to the future financial performance of the Target Company.

iv. The Acquirer makes no assurance of market price of shares of the Target Company during or after the Offer.

v. The Acquirer is involved in legal proceedings that have been initiated by and against them. If the petition of the Target Company filed before the Hon’ble Company Law Board is to be allowed, the Acquirer’s shareholding/voting rights in the Target Company would be restricted to less than 15% of the total paid up capital/voting rights of the Target Company. The other litigations against the Acquirer will not have any material impact on this Offer. For more details, see clauses 3.1.8 and 3.1.9 and 4.1.13

INDEX

Sr. No.

Subject

Page No.

10.

11.

12.

13.

14.

15.

Key Definitions

Disclaimer Clause

Details of the Offer

Background of the Acquirer and PAC

Disclosure in terms of Regulation 16(ix) of the SEBI (SAST) Regulations, 1997 and Future Plans and Strategy of the Acquirer

Compliance with the Listing Agreement

Background of the Target Company

Offer Price and Financial Arrangements

Terms and Conditions of the Offer

Procedure for Acceptance and Settlement of the Offer

Methods of Settlement

General

Documents for Inspection

Declaration by the Acquirer and PAC

Enclosures (Form of Withdrawal)

4-6

6-17

17-23

23-25

25-27

29-30

1. KEY DEFINITIONS
Acquirer	HB Stockholdings Limited.
Book value per share	Net Worth / Number of Equity Shares issued.
BSE	Bombay Stock Exchange Limited.
Cash Deposits	The amount of Rs. 46,00,000 (Rupees Forty Six Lakhs Only) held in the Escrow Account with HDFC Bank Limited being more than 1% of the total consideration payable under this Offer.
Corrigendum to the Public Announcement	Corrigendum to the Public Announcement made on behalf of the Acquirer along with PAC to the shareholders of the Target Company published on 14/05/2008 which appeared in all the editions of Financial Express and Jansatta and Mumbai (Marathi) edition of Navshakti on that day.
DIP Guidelines	SEBI (Disclosure and Investor Protection) Guidelines, 2000 and the subsequent amendments thereto.
DSIL	DCM Shriram Industries Limited.
EPS	Earning per Share.
Form of Acceptance	Form of Acceptance cum Acknowledgement.
Form of Withdrawal	Form of Withdrawal.
HBSL	HB Stockholdings Limited.
Letter of Offer or LOO	Offer Document.
Manager to the Offer or Merchant Banker	Mefcom Capital Markets Limited.
N.A	Not Available / Not Applicable.
NSE	National Stock Exchange of India Limited.
Offer or the Offer	Offer for acquisition of 35,00,000 fully paid up equity shares of the face value of Rs. 10/- each representing, as the date of this Letter of Offer, 20.12% of the expanded voting capital after taking into consideration the allotment of 21,00,000 equity shares consequent to the conversion of 7,00,000 share warrants to the specified entities of the Promoters / Promoter group / Persons Acting in Concert of the Target Company which is sub-judice before the Hon’ble Company Law Board, which was, as on the date of PA, 22.88% of the voting capital of Rs.15,29,84,370/- of the Target Company, at a price of Rs. 130/- (Rupees One Hundred Thirty Only) per fully paid equity share (“Revised Offer Price”) payable in cash (being the offer price revised from Rs. 70/- to Rs. 120/- & further revised from Rs. 120/- to Rs. 130/-).
Offer Price	Price of Rs. 70/- (Rupees Seventy Only) per share.
Offer Shares	Shares of the Target Company validly tendered / offered by the shareholders of the Target Company in response to this Letter of Offer.
Person Acting in Concert or PAC	Mr. H. C. Bhasin.
Persons eligible to participate	Registered shareholders of DCM Shriram Industries Limited and unregistered shareholders in the Offer who own the equity shares of DCM Shriram Industries Limited any time prior to the closure of the Offer other than the Acquirer and PAC.
Public Announcement or PA	Announcement of this Offer made on behalf of the Acquirer along with PAC to the shareholders of the Target Company published on 19/11/2007, which appeared in all the editions of Financial Express and Jansatta and Mumbai (Marathi) edition of Navshakti on that day.
RBI	The Reserve Bank of India.
Registrar to the Offer	RCMC Share Registry Private Limited, the Registrar to the Offer appointed by the Acquirer, having its office at B-106, Sector-2, Noida-201301.
Return on Net Worth	(Profit After Tax / Net Worth) * 100.
Revised Offer Price	Price of Rs. 130/- (Rupees One Hundred Thirty Only) per share.
Revised Public Announcement or RPA	Revised Public Announcement of this Offer made on behalf of the Acquirer along with PAC to the shareholders of the Target Company published on 29/11/2007 which appeared in all the editions of Financial Express and Jansatta and Mumbai (Marathi) edition of Navshakti on that day
SEBI	Securities and Exchange Board of India.
SEBI (SAST) Regulations, 1997	Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto
Shareholders	Shareholders of DCM Shriram Industries Limited.
Share / Shares	Fully paid up equity share / shares of Rs.10/- each of DCM Shriram Industries Limited.
Specified Date	20/11/2007 being the date for the purpose of determining the names of the shareholders to whom the Letter of Offer will be sent.
Stock Exchanges	BSE and NSE.
Target Company	DCM Shriram Industries Limited.

2. DISCLAIMER CLAUSE

“IT IS TO BE DISTINCTLY UNDERSTOOD THAT FILING OF DRAFT LETTER OF OFFER WITH SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED, VETTED OR APPROVED BY SEBI. THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI FOR A LIMITED PURPOSE OF OVERSEEING WHETHER THE DISCLOSURES CONTAINED THEREIN ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE REGULATIONS. THIS REQUIREMENT IS TO FACILITATE THE SHAREHOLDERS OF DCM SHRIRAM INDUSTRIES LIMITED TO TAKE AN INFORMED DECISION WITH REGARD TO THE OFFER. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR FINANCIAL SOUNDNESS OF THE ACQUIRER, PAC OR THE COMPANY WHOSE SHARES ARE PROPOSED TO BE ACQUIRED OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE LETTER OF OFFER. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ACQUIRER IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THIS LETTER OF OFFER, THE MERCHANT BANKER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE ACQUIRER DULY DISCHARGES ITS RESPONSIBILITY ADEQUATELY. IN THIS BEHALF, AND TOWARDS THIS PURPOSE, THE MERCHANT BANKER, MEFCOM CAPITAL MARKETS LIMITED, HAS SUBMITTED A DUE DILIGENCE CERTIFICATE DATED 29/11/2007 TO SEBI IN ACCORDANCE WITH THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 1997 AND SUBSEQUENT AMENDMENT(S) THERETO. THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE ACQUIRER FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE OFFER.”

3. DETAILS OF THE OFFER

3.1 Background of the Offer

3.1.1 The Offer to the shareholders of the Target Company is being made in accordance with and under Regulation 10 of the SEBI (SAST) Regulations, 1997 i.e. for consolidation of existing shareholding in the Target Company without change in management or control.

3.1.2 The Offer is being made by HB Stockholdings Ltd., who is the sole Acquirer under the Offer. Mr. H.C. Bhasin is the PAC under the Offer.

3.1.3 The Acquirer proposes to acquire 35,00,000 equity shares (the Offer Shares). Regulation 14(1) of the SEBI (SAST) Regulations, 1997 requires any Acquirer, who has acquired securities of any listed company, which entitle him to voting rights in excess of the percentages specified in Regulation 10 or Regulation 11 of the SEBI (SAST) Regulations, 1997, to make a public announcement to acquire shares of such company not later than four working days of deciding to acquire shares or voting rights exceeding the respective percentage specified under Regulation 10. The shareholding of the Acquirer as on the date of PA constituted 12.77% of the share capital of the Target Company. As on the date of this Letter of Offer, the shareholding of the Acquirer and PAC constitutes 22.04% and 0.09% respectively of the expanded voting capital of Rs. 17,39,84,370/- after taking into consideration the allotment of 21,00,000 equity shares consequent to the conversion of 7,00,000 share warrants to the specified entities of the Promoters / Promoter group / Persons Acting in Concert of the Target Company which is sub-judice before the Hon’ble Company Law Board. However, the shareholding of the Acquirer and PAC is 25.06% and 0.10% respectively of the voting capital of Rs. 15,29,84,370/-of the Target Company as on the date of this Letter of Offer.

3.1.4 The Offer is being made in compliance with Regulation 10 read with Regulation 14(1) of the SEBI (SAST) Regulations, 1997.

3.1.5 The Acquirer and PAC have not been prohibited by SEBI from dealing in securities, in terms of directions issued under Section 11B of the SEBI Act, 1992 or under any of the Regulations made there under.

3.1.6 As on date, the Acquirer does not intend to make any changes in the Board of Directors of the Target Company.

3.1.7 As at 31/03/2007, the Target Company’s paid up equity share capital was Rs. 15,29,84,370/- comprising of 1,52,98,437 equity shares of Rs.10/- each. Upon conversion of warrants allotted on 30/11/2007 on preferential basis to the specified entities of the Promoters / Promoter group / Persons Acting in Concert and consequent allotment of 21,00,000 equity shares in 3 tranches (7,00,000 equity shares on 18/12/2007, 4,55,000 equity shares on 29/03/2008 and 9,45,000 equity shares on 01/04/2008), the Target Company’s paid up equity share capital as on 01/04/2008,,increased to Rs. 17,39,84,370/- comprising of 1,73,98,437 equity shares of Rs.10/- each. The aforesaid preferential allotment of warrants/equity shares as above is, however, subjudice before the Hon’ble Company Law Board.

The identity of the Acquirer along with number of shares to be acquired is given below:

(A) On the basis of the paid up capital of Rs. 15,29,84,370/- of the Target Company:

Name/Identity of the Acquirer	HB Stockholdings Limited
Pre Offer holding of the Acquirer as on the date of Public Announcement i.e. 19/11/2007 and % based on total paid up capital i.e. 1,52,98,437 shares	19,54,348 (12.77%)
Market Purchases from the date of PA till 12/05/2008 and % based on the total paid up capital i.e. 1,52,98,437 shares	18,80,160 (12.29%)
Number of shares to be acquired under the Offer and % based on the total paid up capital i.e. 1,52,98,437 shares	35,00,000 (22.88%)
Post Offer holding of the Acquirer and % based on the total paid up capital i.e. 1,52,98,437 shares	73,34,508 (47.94%)

(B) On the basis of the paid up capital of Rs. 17,39,84,370/- of the Target Company:

Name/Identity of the Acquirer	HB Stockholdings Limited
Pre Offer holding of the Acquirer and % based on expanded total paid up capital i.e. 1,73,98,437 shares	19,54,348 (11.23%)
Market Purchases from the date of PA till 12/05/2008 and % based on expanded total paid up capital i.e. 1,73,98,437 shares	18,80,160 (10.81%)
Number of shares to be acquired under the Offer and % based on expanded total paid up capital i.e. 1,73,98,437 shares	35,00,000 (20.12%)
Post Offer holding of the Acquirer and % based on expanded total paid up capital i.e. 1,73,98,437 shares	73,34,508 (42.16 %)

3.1.8 The Target Company has filed a petition in Company Law Board, Principal Bench, New Delhi against the Acquirer in respect of the purchases made by the Acquirer from the open market after the date of PA in which the Target Company has prayed for the following:

a) Pass an Order under Section 111A(3) of the Companies Act, 1956 declaring the acquisition of equity shares in the Petitioner company by the Respondent of 15% and above of the paid up capital numbering 11,19,351 equity shares i.e. total acquisition upto 25.1.2008 of 35,19,115 shares minus 23,04,036 shares, representing 1 share less 15% of the Paid Up Capital of Rs.15,99,84,370/- and further acquisition, if any, during the pendency of the Petition, in violation of law.

b) Pass an order directing the National Securities Depository Limited, Trade World, 4^th Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013 directing it to rectify its Register of Beneficial Owners in respect of the Respondent’s Account – DP ID IN300931 Client ID 10000012 to the extent of 11,19,351 shares acquired upto 18.1.2008 and all subsequent acquisitions by de-registering the shares from the said Account and keeping the shares in suspense account with the Depository till such time the Hon’ble Board may order.

c) Pending making or completing the present enquiry, pass an ex-parte ad-interim order suspending the voting rights of the shares acquired in violation of law by the Respondent in exercise of powers vested with the Hon’ble Board under Section 111A(4) of the Companies Act, 1956 and confirm the same.

d) Restrain the Respondent from acquiring any further equity shares / voting rights in the Petitioner company; and

e) Direct investigation into the ownership of the respondent company and further for the said purpose direct the Inspectors to carry investigation into the affairs of the related company and thereafter declare that the affairs of the respondent company ought to be investigated as regards the membership of the respondent company and other matters relating to respondent company for the purpose of determining the true persons who are or have been financially interested in the success or failure, whether real or apparent, of the company; or who are or have been able to control or materially to influence the policy of the company, apart from directing production of documents and evidence to the Inspector or the person authorized by this Hon’ble Tribunal; and

f) Pass such other and further orders as may be deemed fit and proper in the facts and circumstances of the present case as this Hon’ble Board may deem fit.

SEBI is examining whether the Acquirer has violated Regulation 13 of SEBI (Prohibition of Insider Trading) Regulations, 1992 in the acquisition of shares of Target Company.

3.1.9 The Acquirer has filed a petition in the Company Law Board, Principal Bench, New Delhi against the Target Company, its Promoters, Board of Directors and others for oppression and mismanagement under Section 397 and 398 of the Companies Act,1956 wherein the Acquirer has prayed, inter-alia:

a. Pass an order declaring the notice dated October 18, 2007, calling for the postal ballot, and all consequent actions thereupon, including but not limited to the passing of the proposed resolutions contained therein to be null and void;

b. Pass an order in favour of the Petitioner restraining the Respondents, their officers and agents from issuing Warrants on a preferential basis to the Promoters/Promoter Group being Respondents 2 to 4 and 11 to 15, as also restraining such Respondents from applying for and obtaining the Warrants and from seeking a conversion thereof into equity shares of the Respondent No. 1;

c. Pass an order annulling the appointment of the Respondent No. 10 as a Scrutinizer for the proposed postal ballot pursuant to the Notice dated October 18, 2007;

d. Pass an order directing the Respondent No. 1 to immediately and forthwith provide full and complete details of the shareholders/members of the Respondent No. 1 Company to the Petitioner;

e. Pass an order directing that the present Board of Directors of the Respondent No. 1 Company, being Respondent Nos. 2-9, be removed and an administrator be appointed until the new directors are elected;

f. Grant costs of the petition in favour of the Petitioner and against the Respondents; AND

g. Pass such other and further orders as may be deemed fit and proper in the facts and circumstances of the present case.

The Acquirer has also made representation to the Securities & Exchange Board of India (SEBI) and Bombay Stock Exchange regarding violations of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, Securities Contracts (Regulation) Act, 1956 and the Listing Agreement by the Target Company, its Directors & Promoters.

SEBI is examining the extent of compliance with DIP Guidelines by the Target Company in the matter of allotment of 21,00,000 shares on preferential basis during 2007-09.

3.2 The Offer

3.2.1 The Acquirer has made a Public Announcement dated 19/11/2007, Revised Public Announcement dated 29/11/2007 and Corrigendum to the Public Announcement dated May 14, 2008 in the following newspapers in accordance with Regulation 15 and pursuant to Regulation 10 & Regulation 26 of SEBI (SAST) Regulations, 1997.

Publications	Editions	Language
Financial Express	All Editions	English
Jansatta	All Editions	Hindi
Navshakti	Mumbai	Marathi

The Public Announcement, the Revised Public announcement and Corrigendum to the Public Announcement are also available on the SEBI website at http://www.sebi.gov.in.

3.2.2 The Acquirer is making this Offer under the SEBI (SAST) Regulations, 1997 to acquire up to 35,00,000 fully paid-up equity shares of the face value of Rs. 10/- each representing, as the date of this Letter of Offer, 20.12% of the expanded voting capital after taking into consideration the allotment of 21,00,000 equity shares consequent to the conversion of 7,00,000 share warrants to the specified entities of the Promoters / Promoter group / Persons Acting in Concert of the Target Company which is sub-judice before the Hon’ble Company Law Board, which was, as on the date of PA, 22.88% of the voting capital of Rs.15,29,84,370/- of the Target Company, at a price of Rs. 130/- (Rupees One Hundred Thirty Only) per fully paid equity share (“Revised Offer Price”) payable in cash (being the offer price revised from Rs. 70/- to Rs. 120/- & further revised from Rs. 120/- to Rs. 130/-) subject to the terms and conditions mentioned hereinafter.

3.2.3 As per the PA, the Offer Price was Rs. 70/- (Rupees Seventy Only) per equity share which was further revised to Rs. 120/- (Rupees One hundred Twenty Only) per equity share vide RPA dated 29/11/2007. On and after the date of the PA till the date of this Letter of Offer, the Acquirer has purchased 18,80,160 equity shares of the Target Company from Open Market. The highest purchase price for the above purchases is Rs. 127.50 per equity share. However, the Acquirer, in terms of Regulation 20(7) read with Regulation 26 of the SEBI (SAST) Regulations, has revised the Offer Price to Rs.130/- (Rupees One Hundred Thirty Only) per equity share which is the revised price by the Acquirer since the date of publication of PA from the earlier Offer Price of Rs. 70/- (Rupees Seventy Only) per equity share vide PA dated 19/11/2007 which was further revised to Rs. 120/- (Rupees One Hundred Twenty Only) per equity share vide RPA dated 29/11/2007.

3.2.4 There are no partly paid up shares in the Target Company.

3.2.5 The Offer is not a competitive bid.

3.2.6 The Offer is not subject to any minimum level of acceptance from the shareholders i.e. it is not a conditional Offer. The Acquirer will accept those equity shares of DSIL that are tendered in valid form in terms of this Offer up to maximum of 35,00,000 equity shares.

3.2.7 The Acquirer and PAC have acquired the shares of the Target Company after the date of Public Announcement till the date of Letter of Offer through Open Market as per the details given below:

Date of acquisition	No. of shares	Price per Share		% to the Existing Equity	% to the Expanded	Mode of Acquisition
Date of acquisition	No. of shares	Average	Maximum	% to the Existing Equity	% to the Expanded
19/11/2007	19,712	72.53	72.55	0.13	0.11	Open market-on the floor of BSE
20/11/2007	29,851	76.05	76.15	0.20	0.17	Open market-on the floor of BSE
21/11/2007	62,041	79.95	79.95	0.41	0.36	Open market-on the floor of BSE
22/11/2007	50773	83.90	83.90	0.33	0.29	Open market-on the floor of BSE
26/11/2007	47558	92.45	92.45	0.31	0.27	Open market-on the floor of BSE
27/11/2007	42592	97.05	97.05	0.28	0.24	Open market-on the floor of BSE
03/12/2007	68364	117.85	117.85	0.45	0.39	Open market-on the floor of BSE
04/12/2007	13797	123.70	123.70	0.09	0.08	Open market-on the floor of BSE
06/12/2007	92077	123.61	125.00	0.60	0.53	Open market-on the floor of BSE
07/12/2007	44097	124.00	124.00	0.29	0.25	Open market-on the floor of BSE
10/12/2007	69134	124.76	125.00	0.45	0.40	Open market-on the floor of BSE
11/12/2007	67005	122.84	125.00	0.44	0.39	Open market-on the floor of BSE
12/12/2007	74974	123.92	124.87	0.49	0.43	Open market-on the floor of BSE
18/12/2007	2255	125.05	125.05	0.01	0.01	Open market-on the floor of BSE
20/12/2007	643912	124.99	125.00	4.21	3.70	Open market-on the floor of BSE
24/12/2007	4022	125.00	125.00	0.03	0.02	Open market-on the floor of BSE
26/12/2007	2437	125.05	125.05	0.02	0.01	Open market-on the floor of BSE
27/12/2007	1757	124.91	125.00	0.01	0.01	Open market-on the floor of BSE
28/12/2007	12222	125.00	125.00	0.08	0.07	Open market-on the floor of BSE
31/12/2007	1030	124.11	125.00	0.01	0.01	Open market-on the floor of BSE
01/01/2008	671	124.93	125.00	0.00	0.00	Open market-on the floor of BSE
02/01/2008	1060	125.00	125.00	0.01	0.01	Open market-on the floor of BSE
04/01/2008	8271	125.00	125.00	0.05	0.05	Open market-on the floor of BSE
07/01/2008	3530	124.83	125.05	0.02	0.02	Open market-on the floor of BSE
09/01/2008	2200	125.00	125.00	0.01	0.01	Open market-on the floor of BSE
10/01/2008	555	125.05	125.05	0.00	0.00	Open market-on the floor of BSE
11/01/2008	100	125.05	125.05	0.00	0.00	Open market-on the floor of BSE
15/01/2008	50589	125.70	127.50	0.33	0.29	Open market-on the floor of BSE
16/01/2008	20680	124.04	126.00	0.14	0.12	Open market-on the floor of BSE
17/01/2008	20215	125.07	125.10	0.13	0.12	Open market-on the floor of BSE
18/01/2008	21273	125.01	125.10	0.14	0.12	Open market-on the floor of BSE
21/01/2008	73313	123.57	125.00	0.48	0.42	Open market-on the floor of BSE
22/01/2008	12700	114.95	114.95	0.08	0.07	Open market-on the floor of BSE
23/01/2008	2933	110.12	110.50	0.02	0.02	Open market-on the floor of BSE
24/01/2008	2929	107.93	108.15	0.02	0.02	Open market-on the floor of BSE
25/01/2008	860	105.99	106.15	0.01	0.00	Open market-on the floor of BSE
04/02/2008	1941	109.80	109.85	0.01	0.01	Open market-on the floor of BSE
08/02/2008	1801	103.83	106.00	0.01	0.01	Open market-on the floor of BSE
12/02/2008	3933	101.16	101.25	0.03	0.02	Open market-on the floor of BSE
14/02/2008	506	101.26	102.30	0.00	0.00	Open market-on the floor of BSE
18/02/2008	300	106.67	107.00	0.00	0.00	Open market-on the floor of BSE
21/02/2008	9263	109.99	110.00	0.06	0.05	Open market-on the floor of BSE
22/02/2008	400	107.00	107.00	0.00	0.00	Open market-on the floor of BSE
25/02/2008	307	106.48	107.65	0.00	0.00	Open market-on the floor of BSE
05/03/2008	3305	109.97	110.70	0.02	0.02	Open market-on the floor of BSE
10/03/2008	320	107.53	107.65	0.00	0.00	Open market-on the floor of BSE
11/03/2008	516	108.21	109.00	0.00	0.00	Open market-on the floor of BSE
12/03/2008	1194	108.49	109.00	0.01	0.01	Open market-on the floor of BSE
13/03/2008	25939	108.60	112.00	0.17	0.15	Open market-on the floor of BSE
14/03/2008	31655	114.51	116.00	0.21	0.18	Open market-on the floor of BSE
17/03/2008	26731	111.18	112.00	0.17	0.15	Open market-on the floor of BSE
18/03/2008	38042	109.94	111.95	0.25	0.22	Open market-on the floor of BSE
19/03/2008	6161	109.71	111.00	0.04	0.04	Open market-on the floor of BSE
24/03/2008	4680	109.11	109.50	0.03	0.03	Open market-on the floor of BSE
25/03/2008	5349	107.97	108.00	0.03	0.03	Open market-on the floor of BSE
26/03/2008	5000	108.58	109.00	0.03	0.03	Open market-on the floor of BSE
27/03/2008	3681	108.35	108.75	0.02	0.02	Open market-on the floor of BSE
28/03/2008	1567	109.59	110.00	0.01	0.01	Open market-on the floor of BSE
31/03/2008	6380	110.82	111.05	0.04	0.04	Open market-on the floor of BSE
01/04/2008	4200	110.46	111.00	0.03	0.02	Open market-on the floor of BSE
02/04/2008	2680	110.83	111.00	0.02	0.02	Open market-on the floor of BSE
03/04/2008	152	110.50	110.50	0.00	0.00	Open market-on the floor of BSE
04/04/2008	6161	109.91	111.00	0.04	0.04	Open market-on the floor of BSE
07/04/2008	11206	109.88	111.00	0.04	0.06	Open market-on the floor of BSE
08/04/2008	2481	109.88	111.00	0.07	0.01	Open market-on the floor of BSE
09/04/2008	3833	111.00	111.00	0.02	0.02	Open market-on the floor of BSE
10/04/2008	1431	110.55	111.00	0.03	0.01	Open market-on the floor of BSE
11/04/2008	827	110.63	111.00	0.01	0.00	Open market-on the floor of BSE
15/04/2008	1205	110.38	111.00	0.01	0.01	Open market-on the floor of BSE
16/04/2008	575	110.57	111.00	0.01	0.00	Open market-on the floor of BSE
17/04/2008	27910	113.88	114.00	0.00	0.16	Open market-on the floor of BSE
21/04/2008	7663	114.83	115.00	0.18	0.04	Open market-on the floor of BSE
22/04/2008	56644	117.70	118.00	0.05	0.33	Open market-on the floor of BSE
09/05/2008	2188	116.51	118.00	0.37	0.01	Open market-on the floor of BSE
12/05/2008	544	116.11	116.15	0.00	0.00	Open market-on the floor of BSE
TOTAL	18,80,160	116.84	127.50	12.29	10.81

The highest price paid by the Acquirer so far after the date of PA is Rs. 127.50 and the open offer price has been revised to Rs. 130/- which is more than the highest price paid after the date of PA.

3.3 Objects of the Offer

3.3.1 This Offer is being made pursuant to Regulation 10 of the SEBI (SAST) Regulations, 1997 to acquire Offer Shares at a Revised Offer Price of Rs.130/- per fully paid up equity share of the Target Company payable in cash subject to the terms and conditions mentioned hereinafter.

3.3.2 This Offer is pursuant to Regulation 10 and other applicable provisions of the Regulations for consolidation of existing shareholding in the Target Company without change in control and management.

4. BACKGROUND OF THE ACQUIRER AND PAC

4.1 Background of the Acquirer

4.1.1 The company was incorporated on 30^th July 1985 under the name and style of HB Portfolio Leasing Limited (Registration No. 21616 of 1985-86) with the main object of providing funds and non funds based financial services.

The Company over a period of time built up activities comprising of Financial Services (including Category-I Merchant Banker; Sponsor of Mutual Fund; membership of stock exchanges through subsidiary companies); Proprietary Investments and Real Estate Development.

Pursuant to a Scheme of Arrangement approved by the shareholders of the company and sanctioned by the Hon’ble High Court of Delhi vide orders dated 29^th October 1996 and 28^th November 1996 the Financial Services Division was transferred to and vested into company’s wholly owned subsidiary HB Stockholdings Ltd. (renamed as HB Portfolio Limited) and the Real Estate Division was transferred to and vested into its wholly owned subsidiary HB Estate Developers Ltd.

The activity relating to Proprietary Investments was retained in the company and the share capital of the company was reorganised and the name of the company was changed to HB Stockholdings Limited vide Fresh Certificate of Incorporation dated 19^th February 1997.

The company continues to carry on the activity of proprietary investments and is registered with Reserve Bank of India as a Non Banking Financial Company. A Certificate of Registration to carry on the business of a non-banking financial institution has been obtained from the Reserve Bank of India in terms of Section 45-IA of the RBI Act, 1934. It must be distinctly understood, however, that in issuing the Certificate of Registration RBI does not undertake any responsibility for the financial soundness of the company or for the correctness of any of the statements made or any commitments made or opinions expressed.

The Company has two wholly owned subsidiaries viz., HB Prima Capital Ltd. (which is a member of OTC Exchange of India) and Mount Finance Ltd. However the subsidiaries have insignificant operations.

At present the registered office of the Acquirer is situated at Plot No. 31, Echelon Institutional Area, Sector 32, Gurgaon-122001-07 (Haryana).

4.1.2 The promoter of HBSL is Mr. H. C. Bhasin. However, the promoter group comprises of Mr. Lalit Bhasin, Mr. Ayush Kapur, Mr. Kanishk Kapur, Mr. Manasvin Arora, Ms. Mehar Arora, Merrygold Investments Ltd. and RRB Master Holdings Ltd.

4.1.3 The Board of Directors of the Acquirer comprises of Mr. Lalit Bhasin, Mr. K. N. Malhotra, Mr. Gulshan Rai, Mr. P. K. Mittal, Mr. Harbans Lal, Mr. Anil Goyal, Mr. Vijay Sood and Mr. J. M. L. Suri.

4.1.4 The Compliances under Chapter II of SEBI (SAST) Regulations, 1997 are applicable to the Acquirer and they have made timely disclosures to the Target Company as well as to the Stock Exchanges.

4.1.5 The Authorised Share Capital of HBSL as on the date of PA is Rs. 1,00,00,00,000 divided into 7,00,00,000 equity shares of Rs 10/- each and 3,00,00,000 redeemable preference shares of Rs. 10/- each. The paid up equity share capital of the Acquirer as on date of PA is Rs. 24,31,66,634/- comprising of 2,54,43,257 shares of Rs.10/- each fully called up (Allotment money receivable Rs. 1,12,65,936). The Board of Directors of Acquirer vide its Resolution dated 21/03/2008 have forfeited 16,51,094 shares for non-payment of call/allotment money and consequent to such forfeiture the paid up share capital of the Acquirer has become Rs. 23,79,21,630/- comprising of 2,37,92,163 equity shares of Rs.10/- fully paid up.

4.1.6. As on 31/03/2008, except Mr. H. C. Bhasin there are no other shareholders who hold more than 5% paid up capital of the Acquirer.

4.1.7 The shareholding pattern of HB Stockholdings Limited as on the date of PA i.e., 19/11/2007 is as under:

S. No.	Shareholder’s Category	No. of shares held	% of shareholding
1.	Promoters	1,20,63,599	47.41
2.	Mutual Funds / FIIs / FIs / Banks	4,80,528	1.89
3.	Public and others	1,28,99,130	50.70
	TOTAL	2,54,43,257	100

4.1.8 The Board of Directors of HBSL as on the date of PA consists of the following:-

S. No.	Name of the Director	Designation	Qualification and Experience in no. of years and field of experience	Residential Address	Date of Appoint-ment	Other Directorships
1.	Mr. Lalit Bhasin	Chairman	Bachelor of Commerce. An experienced entrepreneur with over 18 years of experience in the area of financial markets, strategic investments and business development.	C-2/7, Safdarjung Development Area, New Delhi-110016	16/08/1989	1. HB Portfolio Ltd. 2. HB Estate Developers Ltd. 3. HB Leasing & Finance Co.Ltd. 4. HB Securities Ltd. 5. Taurus Asset Management Co. Ltd. 6. HB Prima Capital Ltd. 7. Harsai Investments Ltd. 8. RRB Securities Ltd. 9. RRB Master Securities Delhi Ltd. 10. AHL Hotels Ltd. 11. Raja Ram Bhasin Share & Stock Brokers Ltd. 12. Bhasin Share & Stock Brokers Ltd. 13. CHL (South) Hotels Ltd. 14. Indo Continental Hotels & resorts Ltd. 15. CHL International (Company Incorporated Overseas) 16. HB Financial Consultants Pvt. Ltd. 17. HBB Properties Pvt. Ltd. 18. RRB House Finance Pvt. Ltd. 19. Pal Properties (India) Pvt. Ltd.
2.	Mr. K. N. Malhotra	Director	Bachelor of Arts. More than 4 decades of experience in insurance industry.	S-95, Panchsheel Park, New Delhi-110017	06/02/1991	1. Taurus Investment Trust Co. Ltd.
3.	Mr. Gulshan Rai	Director	F.C.A A Practicing Chartered Accountant with experience in the field of financial management, management control systems, corporate planning and business restructuring.	29A/1, Asaf Ali Road, New Delhi-110002	30/10/2004	1. Unicom Services Pvt. Ltd. 2. Sai Beverages Pvt. Ltd.
4.	Mr. P. K. Mittal	Director	F.C.S & LL.B. Leading advocate practicingincorporate & economic laws	171, Chitra Vihar, Delhi-110092	07/03/2001	1. Raunaq International Ltd.
5.	Mr. Harbans Lal	Director	M.A. Public Administration, C.A.I.I.B, Former banker over 36 years of experience	P-1/5 First Floor, DLF City, Gurgaon-122002	28/01/2006	1. Lord Krishna Bank Ltd.
6.	Mr. Anil Goyal	Director	F.C.A with over 20 years of expertise in the field of finance, taxation, investment banking, corporate restructuring and strategic planning	S-383, Greater Kailash Part-II, New Delhi-110048	30/07/2005	1. HB Portfolio Ltd. 2. HB Estate Developers Ltd. 3. HB Leasing & Finance Co Ltd. 4. HB Securities Ltd. 5. HB Prima Capital Ltd. 6. HB Corporate Services Ltd. 7. RRB Securities Ltd. 8. Mount Finance Ltd. 9. Bhasin Investments Ltd. 10. AHL Hotels Ltd. 11. HB Insurance Advisors Ltd. 12. HB Financial Consultants Pvt. Ltd. 13. HBB Properties Pvt. Ltd.
7.	Mr. Vijay Sood	Managing Director	MBA, AICWA with 28 years of experience in banking and industry.	CG 401, Laburnum Sushant Lok, Sector-28, Gurgaon-122002	30/04/2007	1. Taurus Asset Management Co. Ltd.
8.	Mr. J. M. L. Suri	Executive Director	B.E. Mechanical, with more than 30 years experience in Indian Corporate sector.	H-13, Maharani Bagh, New Delhi-110065	01/07/1999	1. HB Portfolio Ltd. 2. HB Estate Developers Ltd. 3. RRB Securities Ltd. 4. Mount Finance Ltd. 5. HB Corporate Services Ltd. 6. RRB Master Holdings Ltd. 7. HB Insurance Advisors Ltd. 8. Pal Properties (India) Pvt. Ltd.

None of the above directors are on the Board of the Target Company and the shareholder of the Target Company.

4.1.9 The shares of HBSL are listed at BSE and NSE.

4.1.10 The Brief Audited Financials of HBSL are as under:

(Rs. in Lakhs)

Profit & Loss Statement	For the Year Ended 31.03.2005 (Audited)	For the Year Ended 31.03.2006 (Audited)	For the Year Ended 31.03.2007 (Audited)	For the 9 months Period ended 31.12.2007 (Un-audited)
Total Income	272.59	1262.11	320.80	5160.98
Total Expenditure	104.65	118.93	138.93	245.43
Profit Before Depreciation, Interest & Tax	167.94	1143.18	181.87	4915.55
Depreciation	7.70	7.91	8.22	7.56
Interest	7.28	0.84	16.57	55.06
Profit Before Tax	152.96	1134.43	157.08	4852.93
Provision for Tax	3.00	56.76	3.90	534.30
Profit after Tax	149.96	1077.67	153.18	4318.63

(Rs. in Lakhs)

Balance Sheet Statement	Year Ended 31.03.2005 (Audited)	Year Ended 31.03.2006 (Audited)	Year Ended 31.03.2007 (Audited)	As on 31.12.2007 (Un-audited)
Sources of Funds
Paid up Share Capital	2431.66	2431.67	2431.67	2431.67
Reserves & Surplus (excluding Revaluation Reserves)	4172.41	5248.02	5407.77	9725.88
Net worth	6604.07	7679.69	7839.44	12157.55
Revaluation Reserve	-	-	-	-
Secured Loans	-	-	600.00	600.00
Unsecured Loans	-	-	-	-
Total	6604.07	7679.69	8439.44	12757.55
Uses of Funds
Net Fixed Assets	72.27	72.03	84.25	77.04
Investments	6014.93	6986.63	9807.36	13432.72
Net Current Assets	516.87	621.03	(1452.17)	(752.21)
Total Miscellaneous Expenditure not written off		-	-	-
Total	6604.07	7679.69	8439.44	12757.55

Other Financial Data	Year Ended 31.03.2005 (Audited)	Year Ended 31.03.2006 (Audited)	Year Ended 31.03.2007 (Audited)	As on 31.12.2007 (Un-audited)
Dividend (%)	-	-	-	-
Earning Per Share	0.61	4.23	0.63	16.97*
Return on Net Worth (%)	2.27	14.03	1.95	35.52
Book Value Per Share	25.96	30.18	30.81	47.78

Note: The financial figures for the 9 months ended on 31.12.2007 are unaudited but certified by the Statutory Auditors.

* Not annualised.

Formula: - Return on Net Worth = (Profit after Tax / Net Worth) * 100; Book value of shares = Net Worth / Number of equity shares issued; EPS= Profit

after Tax / Number of equity shares issued.

HBSL is not a Sick Industrial Undertaking.

4.1.11 The major contingent liabilities of the Acquirer as per its Annual Report 2006-2007 is as under:

i) Income Tax demand disputed Rs. 2,69,35,750/- against which appeals are pending with appropriate authorities and in respect of which the

management is confident that appeals will be decided in favour of the Company. The aforesaid amount also includes substantial interest in respect

of which there is apparent calculation mistake. The Company has filed necessary rectification application.

ii) Corporate Guarantee issued to Banks on behalf of other companies amounting to Rs. 800 Lakhs.

4.1.12 Reasons for rise / fall in profit during the past three years:

2006-07 The BSE Sensex at close of the financial year on 31/03/2007 was 13,072.10 compared to 11,342.96 on 01/04/2006 showing a rise of 15%. The high of BSE Sensex during the year was 14,723.88 and of low was 8,799.01. The year was marked by the high volatility in the stock market which adversely affected the profitability of operations. On account of above, the profits for the year under review have declined.

2005-06 During the year under review, the stock market maintained the buoyant trend on the strength of good corporate results and high growth rate recorded by the Indian economy. Buoyed by strong economic fundamentals and greater confidence of International Investors in Indian Economy and the Indian Enterprises, the stock market witnessed great appetite for Indian Stocks from FIIs.

The concerted efforts made by the Company to control the expenses while maximizing the revenue from operations have borne fruit and the Company has been able to post excellent results compared to the previous year. The administrative expenses have recorded only a moderate increase as compared to the previous year, which is on the expected lines.

2004-05 During the year under review, the overall economy including primary and secondary market has registered significant growth. NSE and BSE sensex have flared up from 5,590.60 and 1,819.65 to 6,492.82 and 2,035.65 respectively. The Company continues to emphasise on consolidating its position in the market with in bound activities of cost minimisation and efficiency and productivity development and out bound activities of market exploration and strategic investments and profit maximization. The Company has been able to turnout positive results during the year.

4.1.13 Outstanding Litigations

(A) List of Court Cases filed against the Acquirer:

a) Hardev Dohil & Ors. Vs. HB Stockholdings Ltd. (RFA No. 519-540/2007) in Delhi High Court

The Company had booked 22 flats in Prem Dohil Sadan, Rajendra Place, New Delhi in 1994. On Default by the vendors to hand over Possession of the flats on the agreed terms, legal Proceedings (Civil Suit) were initiated by the Company against the vendors in appropriate court of law for specific performance of the agreement. While the Court (Addl. District Judge) decreed the Suit in favour of the company, however Specific Performance was not directed. Accordingly both the company as well as the opposite party (Hardev Dohil & Others (Vendors) have filed appeals before the Delhi High Court against the aforesaid Order of ADJ.

The appeals are pending disposal.

In the year 1997 the company was trifurcated under a Scheme of Arrangement sanctioned by the Delhi High Court whereby the Real Estate Division of the company was allocated to HB Estate Developers Ltd. and hence any outcome of the matter will have no material impact on the aquirer or on the present Open Offer by the Company.

b) Alka Sharma Vs. HB Portfolio Leasing Limited (CA No.74/1996) in MRTP Commission

Ms. Alka Sharma had applied for and allotted 200 Fully Convertible Debentures @ Rs.65/- in February 1995. The said debentures were converted to equity shares of Rs.10/- each at a premium of Rs.55/- per share in accordance with the terms of issue.

The aforesaid shareholder has filed the Compensation Application under MRTP Act alleging that the Company extended the date of payment of allotment money from 31.03.1995 to 30.04.1995, and did not pay interest for the intervening period of extension of last date for payment of allotment money from 01.04.1995 to 30.04.1995 and also for interest from 21.11.1995 to 30.12.1995 being interest up to the date of receipt of warrant. The shareholder had further alleged that the company failed to issue Warrants and Share certificates. The total compensation sought by the shareholder is Rs.52,391.40.

The matter is pending disposal.

The outcome in the matter will not have any material impact either on the aquirer or on this Offer.

c) Petition filed by DCM Shriram Industries Ltd. (DSIL) before Company Law Board.

DCM Shriram Industries Ltd. has filed a petition before the Company Law Board (Principal Bench, New Delhi) against the company under Sections 111A and 247 of the Companies Act, 1956 with the following prayers:

d) Restrain the Respondent from acquiring any further equity shares / voting rights in the Petitioner company; and

f) Pass such other and further orders as may be deemed fit and proper in the facts and circumstances of the present case as this Hon’ble Board may deem fit.

The interim prayer of the petitioner in the matter was declined by the Hon’ble Company Law Board. The pleadings in the matter are complete from both the side and the arguments are continuing.

If the aforesaid petition of the Target Company is to be allowed, the Acquirer’s shareholding/voting rights in the Target Company would be restricted to less than 15% of the total paid up capital/voting rights of the Target Company.

B. List of litigations filed by the Acquirer:

a) Petition filed by Aquirer against the Target Company before Company Law Board

The Acquirer has filed a petition in the Company Law Board, Principal Bench, New Delhi against the Target Company, its Promoters, Board of Directors and others for oppression and mismanagement under Section 397 and 398 of the Companies Act,1956 wherein the Acquirer has prayed, inter-alia:

c. Pass an order annulling the appointment of the Respondent No. 10 as a Scrutinizer for the proposed postal ballot pursuant to the Notice dated October 18, 2007;

d. Pass an order directing the Respondent Nos. 1 to immediately and forthwith provide full and complete details of the shareholders/members of the Respondent No. 1 Company to the Petitioner;

f. Grant costs of the petition in favour of the Petitioner and against the Respondents; AND

g. Pass such other and further orders as may be deemed fit and proper in the facts and circumstances of the present case.

The pleadings are in the process of being completed and the proceedings are continuing.

The SEBI is examining the extent of compliance with DIP Guidelines by the Target Company in the matter of allotment of 21,00,000 shares on preferential basis during 2007-09.

b) HB Stockholdings Ltd. vs. Datanix Computers (CC No.3817/02/2006) before Metropolitan Magistrate

M/s Associated Infotech Ltd (AIL) approached HBSL to subscribe 6,00,000 equity shares of Rs.10/- each at a premium of Rs.65/- per share. (Total - Rs.4,50,00,000.00). HBSL subscribed to the shares. Thereafter, there was an agreement between HBSL and AIL for the disinvestment of the shares. M/s Datanix approached the Company (HBSL) for the re-purchase of the said shares and issued a cheque for Rs.4,50,00,000/- against the purchase of the said shares, which was subsequently dishonoured by their bankers.

On dishonour of cheques the company filed a Criminal Complaint under section 138 of the Negotiable Instruments Act. The matter is pending for cross examination.

c) HB Stockholdings Ltd. Vs. Hardev Dohil & Ors. (RFA No. 423-444/2007) in Delhi High Court

The appeals are pending disposal.

d) HB Stockholdings Ltd. Vs. PSIDC (RSA No. 2276 of 1999) before Punjab and Haryana High Court.

PSIDC made an offer to sell 2 lacs equity shares of Punjab Tractors Limited @ Rs. 270/- per share. The said offer was open till 14.09.1993. The Company accepted the offer vide letter dated 13.09.1993. On 30.09.1993, PSIDC tried to evade their contractual obligation by revoking their offer. After certain correspondence, PSIDC advised company to treat the matter as closed, and offered to sell the shares @ Rs.290/- per share. The company filed a Civil Suit for recovery of Rs.3.70 crores claiming loss for the said amount due to the breach of the contractual obligation by PSIDC. The suit was decreed in favour of HBSL. Regular First Appeal (RFA) filed by PSIDC was decided against the company. Thereafter, Regular Second Appeal (RSA) has been filed by HBSL before the Hon’ble Punjab and Haryana High Court at Chandigarh.

The appeal is pending disposal.

e) HB Portfolio Leasing Limited Vs. Pramod Kumar Singh (Appeal No.806/1995) before SCDRC (U.P.), Lucknow

Mr. P K Singh who was allotted 110 equity shares in the company failed to pay the allotment money within the prescribed time. The allotment money sent by the aforesaid shareholder to the collection bankers was not encashed as the name of the issuing branch was not mentioned.

The shareholders filed a complaint before the DCDRF, Bahraich, and the matter was proceeded ex-parte against the Company. The Company had been directed to pay an amount of Rs.6350/- to the complainant against refund of allotment money, application money and compensation for deficiency in services.

The company has preferred an appeal before the State Commission (Lucknow) which is pending disposal.

f) HB Portfolio Leasing Limited Vs. Narayan Prasad Damale (Appeal No.1995/97) before SCDRC (U.P.), Lucknow

The Company had allotted 20 Fully Convertible debentures to the complainant shareholder. The Share Certificates in respect of Part B of the said debentures were sent to the shareholder by the company upon conversion. The complainant shareholder claimed that the said certificates were not delivered to him in time which had caused him a loss. In a complaint before the Dist. Consumer Forum, Banda, (U.P.) the complainant was awarded a sum of Rs.15,500/- by the Forum while proceeding ex-parte.

The company has preferred an appeal before the State Commission (Lucknow) which is pending disposal.

4.1.14 Significant Accounting Policies for the year ended 31/03/2007.

A. Basis of preparation of financial statements:

The Financial Statements are prepared under the Historical Cost Convention method in accordance with the Generally Accepted Accounting Principles and the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956.

B. Revenue Recognition:

(1) All Income & Expenditure are accounted for on accrual basis.

(2) Shares / Securities are capitalised at cost inclusive of Brokerage, Service Tax, Education Cess. Depository Charges, Securities Transaction Tax and other miscellaneous transaction charges which due to practical difficulty can not be identified / allocated to a particular transaction are charged directly to the Profit and Loss Account.

(3) Provision for loss in respect of Open Equity Derivative Instrument as at the Balance Sheet date is made Index-wise / Scrip-wise. As a matter of prudence, any anticipated profit is ignored.

C. Fixed Assets:

Fixed Assets are stated at cost less depreciation.

D. Depreciation:

Depreciation is provided on Fixed Assets on Straight Line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

E. Investments:

i) Investments are classified into Current Investments and Long Term Investments.

ii) Current Investments are valued at lower of cost or fair market value on category wise basis. Long Term Investments are valued at cost less permanent diminution, if any, on scrip wise basis. Provisions for reduction / diminution in the value of Investments and reversal of such reduction / diminution are included in the Profit & Loss Account.

iii) Cost of investments is computed using the Weighted Average Method.

F. Retirement & Other Staff Benefits:

Leave Encashment, Gratuity, Provident fund, Superannuation Fund dues and other benefits to employees are accounted for on accrual basis. In respect of Gratuity and Superannuation, the company has taken policy from LIC of India and pays contribution to it.

G. Taxation:

Tax expenses for the year comprises of Current Tax and Deferred Tax charge or credit. The Deferred Tax Asset and Deferred Tax Liability are calculated by applying tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date. Deferred Tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax law are recognised only if there is virtual certainty of its realisation. Other Deferred Tax assets are recognised only to the extent there is a reasonable certainty of realisation in future.

4.1.15 There is no change in Accounting Policies during last three financial years.

4.1.16 HB Prima Capital Limited and Mount Finance Limited are wholly owned subsidiaries of the Acquirer.

4.1.17 The Offer is being made for consolidation of existing shareholding in the Target Company without change in management and control. However if at any point of time in the future, the Acquirer wishes to seek control of the Target Company, it will comply with applicable provisions of the said Regulations. The Acquirer at present has no intention to sell, dispose off or otherwise encumber any significant assets of DSIL in the succeeding two years, except in the ordinary course of business of DSIL. DSIL’s future policy for disposal of its assets, if any, will be decided by its Board of Directors, subject to the applicable provisions of the law and subject to the approval of the shareholders at a General Body Meeting of DSIL where necessary.

4.1.18 The Acquirer has complied with the conditions of Corporate Governance as envisaged under Clause 49 of the Listing Agreement.

4.1.19 Mr. Anil Kumar Mittal, the Company Secretary of the Acquirer is its Compliance Officer. His correspondence address is HB Stockholdings Limited, Plot No.-31, Echelon Institutional Area, Sector-32, Gurgaon-122001-07, Tel: 0124- 4675500 Fax: 0124-4370985.

4.1.20 There is no merger / Demerger, spin off during last 3 years involving the Acquirer. As has been stated in clause 4.1.1 of this Letter of Offer, the Company was incorporated under the name of HB Portfolio Leasing Limited. The name of the Company was changed to HB Stockholdings Limited on 19/02/1997.

4.1.21 In the past the Acquirer had made purchases from time to time in the scrip of Target Company and they were divested progressively and in May, 2004 the Acquirer’s holding in Target Company became Nil. The compliances, to the extent, applicable were made. The current acquisition/build up of holding of Acquirer in the Target Company commenced from 6^th May 2005.

Date of Acquisition	Mode of Acquisition	Name of the Acquirer	No. of Shares	% to the Equity	No. of Shares Sold	% to the Equity	Paid up capital of the Target Company
06/05/2005	Open Market-on the floor of BSE	HBSL	5000	0.03	0	0	15298437
26/05/2005	Open Market-on the floor of BSE	HBSL	5000	0.03	0	0	15298437
06/07/2005	Open Market-on the floor of BSE	HBSL	24029	0.16	0	0	15298437
07/07/2005	Open Market-on the floor of BSE	HBSL	10583	0.07	0	0	15298437
13/07/2005	Open Market-on the floor of BSE	HBSL	10753	0.07	0	0	15298437
14/07/2005	Open Market-on the floor of BSE	HBSL	37500	0.25	0	0	15298437
18/07/2005	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
19/07/2005	Open Market-on the floor of BSE	HBSL	5000	0.03	0	0	15298437
20/07/2005	Open Market-on the floor of BSE	HBSL	2700	0.02	0	0	15298437
21/07/2005	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
01/08/2005	Open Market-on the floor of BSE	HBSL	8332	0.05	0	0	15298437
02/08/2005	Open Market-on the floor of BSE	HBSL	10737	0.07	0	0	15298437
04/08/2005	Open Market-on the floor of BSE	HBSL	31810	0.21	0	0	15298437
05/08/2005	Open Market-on the floor of BSE	HBSL	17196	0.11	0	0	15298437
09/08/2005	Open Market-on the floor of BSE	HBSL	5000	0.03	0	0	15298437
10/08/2005	Open Market-on the floor of BSE	HBSL	5000	0.03	0	0	15298437
10/08/2005	Open Market-on the floor of BSE	HBSL	3458	0.02	0	0	15298437
16/08/2005	Open Market-on the floor of BSE	HBSL	5500	0.04	0	0	15298437
09/09/2005	Open Market-on the floor of BSE	HBSL	2992	0.02	0	0	15298437
13/09/2005	Open Market-on the floor of BSE	HBSL	7500	0.05	0	0	15298437
20/09/2005	Open Market-on the floor of BSE	HBSL	25000	0.16	0	0	15298437
21/09/2005	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
22/09/2005	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
23/09/2005	Open Market-on the floor of BSE	HBSL	5000	0.03	0	0	15298437
04/10/2005	Open Market-on the floor of BSE	HBSL	20000	0.13	0	0	15298437
27/10/2005	Open Market-on the floor of BSE	HBSL	2285	0.01	0	0	15298437
28/10/2005	Open Market-on the floor of BSE	HBSL	284	0.00	0	0	15298437
31/10/2005	Open Market-on the floor of BSE	HBSL	1000	0.01	0	0	15298437
10/11/2005	Open Market-on the floor of BSE	HBSL	863	0.01	0	0	15298437
11/11/2005	Open Market-on the floor of BSE	HBSL	150	0.00	0	0	15298437
13/12/2005	Open Market-on the floor of BSE	HBSL	20000	0.13	0	0	15298437
14/12/2005	Open Market-on the floor of BSE	HBSL	30000	0.20	0	0	15298437
14/12/2005	Open Market-on the floor of BSE	HBSL	3065	0.02	0	0	15298437
15/12/2005	Open Market-on the floor of BSE	HBSL	11423	0.07	0	0	15298437
20/12/2005	Open Market-on the floor of BSE	HBSL	1839	0.01	0	0	15298437
21/12/2005	Open Market-on the floor of BSE	HBSL	18311	0.12	0	0	15298437
22/12/2005	Open Market-on the floor of BSE	HBSL	2155	0.01	0	0	15298437
26/12/2005	Open Market-on the floor of BSE	HBSL	4624	0.03	0	0	15298437
27/12/2005	Open Market-on the floor of BSE	HBSL	7655	0.05	0	0	15298437
28/12/2005	Open Market-on the floor of BSE	HBSL	5068	0.03	0	0	15298437
30/12/2005	Open Market-on the floor of BSE	HBSL	3841	0.03	0	0	15298437
04/01/2006	Open Market-on the floor of BSE	HBSL	18041	0.12	0	0	15298437
05/01/2006	Open Market-on the floor of BSE	HBSL	3526	0.02	0	0	15298437
06/01/2006	Open Market-on the floor of BSE	HBSL	5769	0.04	0	0	15298437
10/01/2006	Open Market-on the floor of BSE	HBSL	1344	0.01	0	0	15298437
12/01/2006	Open Market-on the floor of BSE	HBSL	1393	0.01	0	0	15298437
16/01/2006	Open Market-on the floor of BSE	HBSL	27500	0.18	0	0	15298437
17/01/2006	Open Market-on the floor of BSE	HBSL	3065	0.02	0	0	15298437
20/01/2006	Open Market-on the floor of BSE	HBSL	27500	0.18	0	0	15298437
23/01/2006	Open Market-on the floor of BSE	HBSL	11112	0.07	0	0	15298437
24/01/2006	Open Market-on the floor of BSE	HBSL	24107	0.16	0	0	15298437
25/01/2006	Open Market-on the floor of BSE	HBSL	27340	0.18	0	0	15298437
27/01/2006	Open Market-on the floor of BSE	HBSL	42560	0.28	0	0	15298437
30/01/2006	Open Market-on the floor of BSE	HBSL	27343	0.18	0	0	15298437
31/01/2006	Open Market-on the floor of BSE	HBSL	35000	0.23	0	0	15298437
01/02/2006	Open Market-on the floor of BSE	HBSL	41000	0.27	0	0	15298437
03/02/2006	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
06/02/2006	Open Market-on the floor of BSE	HBSL	8214	0.05	0	0	15298437
07/02/2006	Open Market-on the floor of BSE	HBSL	17063	0.11	0	0	15298437
08/02/2006	Open Market-on the floor of BSE	HBSL	8000	0.05	0	0	15298437
10/02/2006	Open Market-on the floor of BSE	HBSL	3248	0.02	0	0	15298437
13/02/2006	Open Market-on the floor of BSE	HBSL	9314	0.06	0	0	15298437
15/02/2006	Open Market-on the floor of BSE	HBSL	15635	0.10	0	0	15298437
17/02/2006	Open Market-on the floor of BSE	HBSL	15050	0.10	0	0	15298437
20/02/2006	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
28/02/2006	Open Market-on the floor of BSE	HBSL	25000	0.16	0	0	15298437
07/03/2006	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
09/03/2006	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
16/03/2006	Open Market-on the floor of BSE	HBSL	19280	0.13	0	0	15298437
13/04/2006	Open Market-on the floor of BSE	HBSL	9827	0.06	0	0	15298437
04/05/2006	Open Market-on the floor of BSE	HBSL	14106	0.09	0	0	15298437
18/05/2006	Open Market-on the floor of BSE	HBSL	38240	0.25	0	0	15298437
19/05/2006	Open Market-on the floor of BSE	HBSL	5000	0.03	0	0	15298437
23/05/2006	Open Market-on the floor of BSE	HBSL	4566	0.03	0	0	15298437
07/06/2006	Open Market-on the floor of BSE	HBSL	3000	0.02	0	0	15298437
08/06/2006	Open Market-on the floor of BSE	HBSL	5346	0.03	0	0	15298437
09/06/2006	Open Market-on the floor of BSE	HBSL	3284	0.02	0	0	15298437
13/06/2006	Open Market-on the floor of BSE	HBSL	7226	0.05	0	0	15298437
15/06/2006	Open Market-on the floor of BSE	HBSL	6205	0.04	0	0	15298437
16/06/2006	Open Market-on the floor of BSE	HBSL	7500	0.05	0	0	15298437
26/06/2006	Open Market-on the floor of BSE	HBSL	3981	0.03	0	0	15298437
27/06/2006	Open Market-on the floor of BSE	HBSL	4360	0.03	0	0	15298437
28/06/2006	Open Market-on the floor of BSE	HBSL	3000	0.02	0	0	15298437
03/07/2006	Open Market-on the floor of BSE	HBSL	15000	0.10	0	0	15298437
05/07/2006	Open Market-on the floor of BSE	HBSL	187	0.00	0	0	15298437
19/07/2006	Open Market-on the floor of BSE	HBSL	2844	0.02	0	0	15298437
21/07/2006	Open Market-on the floor of BSE	HBSL	14230	0.09	0	0	15298437
01/08/2006	Open Market-on the floor of BSE	HBSL	895	0.01	0	0	15298437
10/08/2006	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
14/08/2006	Open Market-on the floor of BSE	HBSL	3587	0.02	0	0	15298437
21/08/2006	Open Market-on the floor of BSE	HBSL	2497	0.02	0	0	15298437
22/08/2006	Open Market-on the floor of BSE	HBSL	9647	0.06	0	0	15298437
23/08/2006	Open Market-on the floor of BSE	HBSL	572	0.00	0	0	15298437
24/08/2006	Open Market-on the floor of BSE	HBSL	6704	0.04	0	0	15298437
25/08/2006	Open Market-on the floor of BSE	HBSL	5568	0.04	0	0	15298437
31/08/2006	Open Market-on the floor of BSE	HBSL	428	0.00	0	0	15298437
06/09/2006	Open Market-on the floor of BSE	HBSL	26948	0.18	0	0	15298437
07/09/2006	Open Market-on the floor of BSE	HBSL	5000	0.03	0	0	15298437
08/09/2006	Open Market-on the floor of BSE	HBSL	9049	0.06	0	0	15298437
13/09/2006	Open Market-on the floor of BSE	HBSL	1309	0.01	0	0	15298437
20/09/2006	Open Market-on the floor of BSE	HBSL	7137	0.05	0	0	15298437
21/09/2006	Open Market-on the floor of BSE	HBSL	10953	0.07	0	0	15298437
19/10/2006	Open Market-on the floor of BSE	HBSL	475	0.00	0	0	15298437
21/10/2006	Open Market-on the floor of BSE	HBSL	101	0.00	0	0	15298437
26/10/2006	Open Market-on the floor of BSE	HBSL	0	0.00	4628	0.03	15298437
27/10/2006	Open Market-on the floor of BSE	HBSL	0	0.00	1360	0.01	15298437
30/10/2006	Open Market-on the floor of BSE	HBSL	5114	0.03	0	0	15298437
24/11/2006	Open Market-on the floor of BSE	HBSL	200	0.00	0	0	15298437
27/11/2006	Open Market-on the floor of BSE	HBSL	6096	0.04	0	0	15298437
28/11/2006	Open Market-on the floor of BSE	HBSL	1812	0.01	0	0	15298437
30/11/2006	Open Market-on the floor of BSE	HBSL	315	0.00	0	0	15298437
01/12/2006	Open Market-on the floor of BSE	HBSL	6818	0.04	0	0	15298437
07/12/2006	Open Market-on the floor of BSE	HBSL	8769	0.06	0	0	15298437
08/12/2006	Open Market-on the floor of BSE	HBSL	5104	0.03	0	0	15298437
11/12/2006	Open Market-on the floor of BSE	HBSL	13896	0.09	0	0	15298437
12/12/2006	Open Market-on the floor of BSE	HBSL	14186	0.09	0	0	15298437
18/12/2006	Open Market-on the floor of BSE	HBSL	6000	0.04	0	0	15298437
12/01/2007	Open Market-on the floor of BSE	HBSL	1600	0.01	0	0	15298437
15/01/2007	Open Market-on the floor of BSE	HBSL	14194	0.09	0	0	15298437
17/01/2007	Open Market-on the floor of BSE	HBSL	2500	0.02	0	0	15298437
18/01/2007	Open Market-on the floor of BSE	HBSL	5000	0.03	0	0	15298437
19/01/2007	Open Market-on the floor of BSE	HBSL	7500	0.05	0	0	15298437
22/01/2007	Open Market-on the floor of BSE	HBSL	2500	0.02	0	0	15298437
23/01/2007	Open Market-on the floor of BSE	HBSL	7575	0.05	0	0	15298437
25/01/2007	Open Market-on the floor of BSE	HBSL	27500	0.18	0	0	15298437
29/01/2007	Open Market-on the floor of BSE	HBSL	2500	0.02	0	0	15298437
31/01/2007	Open Market-on the floor of BSE	HBSL	3622	0.02	0	0	15298437
01/02/2007	Open Market-on the floor of BSE	HBSL	8958	0.06	0	0	15298437
28/02/2007	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
02/03/2007	Open Market-on the floor of BSE	HBSL	15531	0.10	0	0	15298437
06/03/2007	Open Market-on the floor of BSE	HBSL	3363	0.02	0	0	15298437
07/03/2007	Open Market-on the floor of BSE	HBSL	175	0.00	0	0	15298437
08/03/2007	Open Market-on the floor of BSE	HBSL	380	0.00	0	0	15298437
09/03/2007	Open Market-on the floor of BSE	HBSL	1189	0.01	0	0	15298437
13/03/2007	Open Market-on the floor of BSE	HBSL	2182	0.01	0	0	15298437
14/03/2007	Open Market-on the floor of BSE	HBSL	4332	0.03	0	0	15298437
15/03/2007	Open Market-on the floor of BSE	HBSL	791	0.01	0	0	15298437
16/03/2007	Open Market-on the floor of BSE	HBSL	3623	0.02	0	0	15298437
19/03/2007	Open Market-on the floor of BSE	HBSL	9304	0.06	0	0	15298437
21/03/2007	Open Market-on the floor of BSE	HBSL	181	0.00	0	0	15298437
29/03/2007	Open Market-on the floor of BSE	HBSL	5855	0.04	0	0	15298437
30/03/2007	Open Market-on the floor of BSE	HBSL	70	0.00	0	0	15298437
04/04/2007	Open Market-on the floor of BSE	HBSL	1477	0.01	0	0	15298437
05/04/2007	Open Market-on the floor of BSE	HBSL	2000	0.01	0	0	15298437
09/04/2007	Open Market-on the floor of BSE	HBSL	941	0.01	0	0	15298437
11/04/2007	Open Market-on the floor of BSE	HBSL	4190	0.03	0	0	15298437
12/04/2007	Open Market-on the floor of BSE	HBSL	4418	0.03	0	0	15298437
13/04/2007	Open Market-on the floor of BSE	HBSL	5657	0.04	0	0	15298437
04/05/2007	Open Market-on the floor of BSE	HBSL	2500	0.02	0	0	15298437
08/05/2007	Open Market-on the floor of BSE	HBSL	826	0.01	0	0	15298437
11/05/2007	Open Market-on the floor of BSE	HBSL	538	0.00	0	0	15298437
14/05/2007	Open Market-on the floor of BSE	HBSL	383	0.00	0	0	15298437
15/05/2007	Open Market-on the floor of BSE	HBSL	5000	0.03	0	0	15298437
04/09/2007	Open Market-on the floor of BSE	HBSL	40054	0.26	0	0	15298437
05/09/2007	Open Market-on the floor of BSE	HBSL	18405	0.12	0	0	15298437
06/09/2007	Open Market-on the floor of BSE	HBSL	19183	0.13	0	0	15298437
11/09/2007	Open Market-on the floor of BSE	HBSL	150000	0.98	0	0	15298437
18/09/2007	Open Market-on the floor of BSE	HBSL	1506	0.01	0	0	15298437
19/09/2007	Open Market-on the floor of BSE	HBSL	61485	0.40	0	0	15298437
20/09/2007	Open Market-on the floor of BSE	HBSL	18217	0.12	0	0	15298437
21/09/2007	Open Market-on the floor of BSE	HBSL	14042	0.09	0	0	15298437
24/09/2007	Open Market-on the floor of BSE	HBSL	12708	0.08	0	0	15298437
26/09/2007	Open Market-on the floor of BSE	HBSL	5000	0.03	0	0	15298437
27/09/2007	Open Market-on the floor of BSE	HBSL	11545	0.08	0	0	15298437
28/09/2007	Open Market-on the floor of BSE	HBSL	1921	0.01	0	0	15298437
01/10/2007	Open Market-on the floor of BSE	HBSL	-3159	-0.02	0	0	15298437
05/10/2007	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
08/10/2007	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
09/10/2007	Open Market-on the floor of BSE	HBSL	9509	0.06	0	0	15298437
10/10/2007	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
12/10/2007	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
12/10/2007	Open Market-on the floor of BSE	HBSL	-617	0.00	0	0	15298437
16/10/2007	Open Market-on the floor of BSE	HBSL	15294	0.10	0	0	15298437
18/10/2007	Open Market-on the floor of BSE	HBSL	5569	0.04	0	0	15298437
19/10/2007	Open Market-on the floor of BSE	HBSL	12597	0.08	0	0	15298437
22/10/2007	Open Market-on the floor of BSE	HBSL	700	0.00	0	0	15298437
23/10/2007	Open Market-on the floor of BSE	HBSL	21030	0.14	0	0	15298437
24/10/2007	Open Market-on the floor of BSE	HBSL	11770	0.08	0	0	15298437
26/10/2007	Open Market-on the floor of BSE	HBSL	35417	0.23	0	0	15298437
29/10/2007	Open Market-on the floor of BSE	HBSL	36752	0.24	0	0	15298437
30/10/2007	Open Market-on the floor of BSE	HBSL	35539	0.23	0	0	15298437
31/10/2007	Open Market-on the floor of BSE	HBSL	8891	0.06	0	0	15298437
01/11/2007	Open Market-on the floor of BSE	HBSL	10000	0.07	0	0	15298437
01/11/2007	Open Market-on the floor of BSE	HBSL	24224	0.16	0	0	15298437
06/11/2007	Open Market-on the floor of BSE	HBSL	-740	0.00	0	0	15298437
Total			1,960,336	12.81	5,988	0.04
Balance			1,954,348	12.77

The Acquirer has purchased 8,49,133 shares of the Target Company during 12 months period preceding the date of PA. The highest and average price paid for the shares was Rs. 68.12 & Rs. 56.41, respectively.

4.1.22 Action Taken by SEBI in the Past:

In relation to tradings in the scrips of DCM Shriram Consolidated Ltd., Jagsonpal Pharmaceuticals Ltd., and Jindal Steel & Power Ltd., SEBI in the year 2004/05 issued Show Cause Notices to the Acquirer Company under SEBI Act and different SEBI Regulations including SEBI (Prohibition of Fraudulent & Unfair Trade Practices relating to Securities market) Regulations, 1995/2003 and SEBI (Stock Brokers and Sub- Brokers) Regulations, 1995, etc.

The replies to the Show Cause Notices have been filed and the matter is pending disposal.

4.1.23 Action Taken by other Regulatory Authorities in the Past:

a) The Registrar of Companies, NCT of Delhi & Haryana had filed two criminal complaints in the year 2002 in the court of ACMM, Tis Hazari, Delhi (Trial Court), against the Directors (and PAC was one of the Directors of the Acquirer at that time) of HB Stockholdings Limited under section 62 & 63 of the Companies Act, 1956 for alleged non-disclosure in the Prospectus issued in 1992 & 1994 respectively. The Directors moved an application in the Trial Court for reviewing the order on summoning and dropping of proceedings which was dismissed vide orders dated 22-3-2003.

Aggrieved by the above orders the Directors moved a petition under Sec 482 of Cr.P.C. in the Hon’ble Delhi High Court for setting aside of the aforesaid order of the Trial Court and also for quashing of proceedings arising out of the aforesaid complaints. The Hon’ble High Court vide its order passed in the hearing held on 22-08-2007 was pleased to allow the aforesaid petition and quashed the orders taking cognizance of the complaints and the summoning.

b) Registrar of Companies had filed a complaint in the year 2003 under section 211 and other related provisions of the Companies Act, 1956, against Mr. H.C. Bhasin, the then Director of HB Stockholdings Limited for alleged violation/non-compliance of said provisions in the Annual Report for the year ended on November 30, 2000.

A petition was moved by Mr. H.C. Bhasin before the Hon’ble High Court of Delhi under Section 482 of the Cr.P.C. for quashing of the complaint and the proceedings before the trial court.

The Hon’ble High Court vide its order passed in the hearing held on 16-04-2007 was pleased to allow the aforesaid petition and quashed the complaint and all further proceedings relating it.

4.1.24 SEBI is examining whether the Acquirer has violated Regulation 13 of SEBI (Prohibition of Insider Trading) Regulations, 1992 in the acquisition of shares of Target Company

4.1.25 The Acquirer has duly disclosed compliances under Regulations 22(2), 22(17) and 7(1) of the SEBI (SAST) Regulations, 1997 and Regulation 13(3) of SEBI (Prohibition of Insider Trading) Regulations, 1992 to SEBI vide its letter dated 03/05/2008 along with Annexures addressed to the Manager to the Offer. The Acquirer has also disclosed to SEBI in the above mentioned letter:

“that the provisions of Regulation 7(1A) are not applicable to acquisitions during the “Offer Period” after a Public Announcement under Regulation 10 of the Takeover Regulations.

As per Regulation 7(1A) any acquirer who has acquired shares/voting rights under Regulation 11(1) is required to disclose purchase/sale aggregating to 2% to the Target Company and the Stock Exchanges in which the shares of the Target Company are listed within 2 days of such acquisition/sale.

Under Regulation 11(1) an acquirer who has acquired in accordance with the law 15% or more but less than 55% of shares/voting rights in a Target Company is allowed to acquire up to 5% of voting rights in any financial year ending on 31^st of March. Thus it would be appreciated that the provisions of Regulation 11(1) of the Takeover Regulations are applicable to creeping acquisition.

Accordingly the provisions of Regulation 7(1A) of the Regulations are applicable only in case of creeping acquisition made under Regulation 11(1).

The acquisitions made by us are under Regulation 10 of the Takeover Regulations after having made the Public Announcement on 19^th November 2007 and NOT under Regulation 11(1) of the Takeover Regulations. For acquisitions made under Regulation 10 of the Takeover Regulations, disclosures are required to be made under Regulation 22(17) and NOT under Regulation 7(1A).

As would be appreciated, the requirement under Regulation 22(17) is far more stringent than the requirement under Regulation 7(1A), since under Regulation 22(17) each and every acquisition (even if it is for a single share) is required to be disclosed within 24 hours of the acquisition; whereas the disclosure requirement under Regulation 7(1A) is triggered only when shareholding change in aggregate crosses 2% and the disclosure of the same is to be made within 2 days. The disclosure requirement under Regulation 22(17), which as mentioned hereinbefore is far more stringent than 7(1A), has been met by us.

We would like to further submit that the provisions of Regulation 7(1A) of the Takeover Code are pari materia to the provisions of Regulation 13(3) of the SEBI (Prohibition of Insider Trading) Regulations, 1992, in as much as under both the provisions, the Acquirer is required to disclose a change of more than 2% in the shareholding. We may further inform that we have complied with the disclosure requirement under Regulation 7(1) of Takeover Regulations and also of Regulation 13(3) of Prohibition of Insider Trading Regulations wherever applicable and the disclosures of our crossing the threshold of 5%, 7%, 9%, 10%, 11%, 13% 14%, 15%, 17%, 19%, 21%, 23% and 25% shareholding have been made. It may please be noted that the aforementioned percentages have been reckoned on the basis of paid up capital of Target Company (1,52,98,437 Equity Shares) as per its audited balance sheet as at 31^st March 2007.”

4.2 Background of the PAC

4.2.1 Mr. H. C. Bhasin

4.2.1.1 Mr. H. C. Bhasin, aged 69 years, is the son of Late Mr. R. R. Bhasin and is residing at C-2/7, Safdarjung Development Area, New Delhi-110016, Tel: 011-32555791.

4.2.1.2 Mr. H C Bhasin, promoter of HB Group of companies, is an acknowledged expert in Capital Market, Finance and Corporate Restructuring. He has over four decades of experience in Capital Markets and Financial Services Industry. He has held Board positions in a number of well known companies. He is credited with pioneering innovative concepts in the field of Investment Banking and Capital Market. To name a few, the concept of ‘Safety Net’ feature in Public Issues; ‘Share Shoppe’ which offered instant liquidity to small retail shareholders at a time when there were no computerized trading in the stock market nor the concept of present day depositories.

4.2.1.3 As per the declaration received from Mr. H. C. Bhasin, he holds the position of Director in the following companies and that he is not a Full time Director in any company:

Sr. No.	Name of the Company	Designation	Listed At
1.	AHL Hotels Ltd.	Director	N. A.
2.	CHL (South) Hotels Ltd.	Director	N. A.
3.	CHL Ltd.	Director	Delhi Stock Exchange
4.	Bhasin Share & Stock Brokers Ltd.	Director	N. A.
5.	HB Corporate Services Ltd.	Director	N. A.
6.	Raja Ram Bhasin Share & Stock Brokers Ltd.	Director	N. A.
7.	Machino Polymers Ltd.	Director	N. A.

4.2.1.4 Mr. H. C. Bhasin holds 15,000 Equity shares of the Target Company as on the date of Public Announcement. Mr. H. C. Bhasin has not made any acquisition earlier in the Target Company through Open Offer(s). The acquisition of Mr. H.C. Bhasin in the Target Company has been made over a period of time and after part divestment in 2004 the PAC continues to hold the present shares in the Target Company. The compliances, to the extent, applicable were made.

4.2.1.5 The Compliances under Chapter II of SEBI (SAST) Regulations, 1997 are applicable to the PAC and he has made timely disclosures to the Target Company as well as to the Stock Exchanges.

4.2.1.6 Mr. H. C. Bhasin is having a Net Worth of Rs. 31,49,29,533 as certified by P. Bholusaria & Co., Chartered Accountants (Membership No. 92648), having office at 26/11, Shakti Nagar Delhi-110007, Tel.:011-23845925 vide a certificate dated 20/11/2007.

4.2.1.7 Action taken by SEBI in the past:

There are no Show Cause Notices/Enquiry/Adjudication Proceedings under SEBI Act and Regulations made thereunder against Mr. H.C. Bhasin (PAC).

However Show Cause Notice was issued in August’2004 to H.C. Bhasin - HUF in relation to trading in Equity Shares of DCM Shriram Consolidated Ltd. under Regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003.

The reply to the Show Cause Notices have been filed by H.C. Bhasin-HUF and the matter is pending disposal.

4.2.1.8 Action taken by other Regulatory Authorities in the past:

A petition was moved by Mr. H.C. Bhasin before the Hon’ble High Court of Delhi under Section 482 of the Cr.P.C. for quashing of the complaint and the proceedings before the trial court.

The Hon’ble High Court vide its order passed in the hearing held on 16-04-2007 was pleased to allow the aforesaid petition and quashed the complaint and all further proceedings relating to it.

5. DISCLOSURE IN TERMS OF REGULATION 16(ix) OF THE SEBI (SAST) REGULATIONS 1997 AND FUTURE PLANS AND STRATEGY OF THE ACQUIRER

The Offer is being made for consolidation of existing shareholding in the Target Company without change in management and control. However if at any point of time in the future, the Acquirer wishes to seek control of the Target Company, it will comply with applicable provisions of the SEBI (SAST) Regulations, 1997.

The Acquirer does not have any plans to make any change to the existing lines of business of the Target Company or to dispose off or otherwise encumber any assets of the Target Company in the next 24 months, except in the ordinary course of business of the Target Company. It will be the discretion of the Board of the Target Company to take appropriate decision in these matters as per the requirements of the business and in line with opportunities from time to time.

Further, during the said period of 24 months, the Acquirer undertakes not to sell, dispose off or otherwise encumber any substantial assets of the Target Company except with the approval of the shareholders of the Target Company.

6. COMPLIANCE WITH THE LISTING AGREEMENT

The minimum public shareholding required for continuous listing of the shares of DSIL is 25% (Twenty Five) of the total issued equity share capital. Pursuant to this Offer, there will be no violation of Clause 40A of the listing agreement of DSIL with the Stock Exchanges and the shares will continue to be listed as the public shareholding of DSIL, assuming full acceptance of the Offer, is not expected to fall to a level below the limit for continuous listing specified in the listing agreement.

7. BACKGROUND OF THE TARGET COMPANY (Based on publicly available sources)

It may be noted that the information pertaining to the Target Company has been sourced from information available in the public domain. The Acquirer had requested the Target Company to provide information pertaining it as per the Standard Letter of Offer vide request letters dated 21.11.2007; 01.12.2007 and email dated 11.05.2008 and the replies of the Target Company to each of this letter/email is reproduced herein:

Reply dated 29.11.2007

“This has reference to your letter dated 21.11.2007 received by us on 22.11.2007 seeking various information with regard to the Company.

The Company has already furnished to you the particulars of the Members/ shareholders as per Regulation 23(2) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. Your representative had collected the soft copy of the data from the Registered Office of the Company after verification.

Regarding the information sought in your letter of 21.11.2007 we find that most of the information are in the public domain through the Annual Report/Quarterly Results, etc. published by the Company and Returns furnished to ROC/Stock Exchange, etc. You may therefore, conduct your due diligence from public sources and comply with the law”

Reply dated 4.12.2007

“Without prejudice to what has been stated in our letter of November 29, 2007 we may endeavour to furnish whatever information is possible as follows:

1. The Company’s name has not been changed since incorporation except deletion of the word “Pvt” from the name on conversion of the Company into a Public limited company.

2. The Capital structure of the Company is given in the Annual Report for the year 2006-07, as in the earlier years, copies of which are in your possession and extensively quoted by you in your various communication.

3. Daurala Organics Ltd. was merged with the Company effective from 1.1.2005. The details of the same including the Scheme of Arrangement was sent to you.

4. To the best of our knowledge there has not been any suspension of trading in Company scrip. However, you may verify the fact with BSE on which the Company’s shares are presently listed and also with CSE and DSE on which the shares were listed in the past.

5. There are no unlisted shares in the Company

6. With regard to the compliance of Listing Agreement the Company has been complying with the same to the best of our knowledge.

7. A copy of the Memorandum & Articles of Association is annexed.

8. Unaudited Results for the quarter ended 30.09.2007 published by the Company were duly subjected to a Limited Review by the Auditors as required under Clause 41 of the Listing Agreement. The information is there in the public domain.

9. The Company on its part has been complying with all SEBI Regulation applicable to it. As far as compliance by persons other than the Company you may obtain the information from whatever source you deem proper.

10. The capital structure of the Company is available in the Annual Reports published by the Company from year to year.

11. The composition of the Board of Directors of the Company is given in the Corporate Governance Report given in the Annual Report for the year 2006-07. There has been no change in the composition.

12. The Promoters shareholding details are already in your possession as stated in various documents filed by you with judicial authorities and is also available on SEBI web-site.

13. Disputed dues with regard to various tax/cess cases etc. are given in the Annexure to the Auditors Report 2006-07. Other legal matters are decentralized and details thereof are not readily available.

We have nothing more to add.”

Reply dated 13.05.2008

“Please refer to your mail dated Sunday the 11^th May, 2008.

We find that the information sought by you have already been provided by our letter of 4.12.2007 or are available in the public domain.

As you are already aware, there has since been a change in the paid up capital, which has gone up from Rs. 15,29,84,370 to Rs. 1739,84,370 with allotment of 21 lac equity shares of Rs.10 each on Preferential basis.”

Under the above circumstances the Acquirer has complied the information/details regarding the Target Company on the basis of published documents/reports and information available on public domain except to the extent information has been provided by the Target Company.

7.1 The Target Company i.e. DCM Shriram Industries Limited, was incorporated on 21/02/1989 with the Registrar of Companies, NCT of Delhi and Haryana, as a Public Limited Company (Company Registration No. 035140 and CIN No. L74899DL1989PLC035140). The Company has its Registered Office at Kanchenjunga Building, 18, Barakhamba Road, New Delhi-110001(Source: www.mca.gov.in).

The Target Company is the principal company of the DCM Shriram Group with a portfolio of products comprising of Sugar, Alcohol, Organic/Fine Chemicals and Industrial Fibres. The group is also engaged in the manufacturing of Shipping and other Containers and Potable Alcohol.

7.2 The locations and other details of the manufacturing facilities are as follows-

Daurala Sugar Works, Daurala, Meerut(UP);

Shriram Rayons,Shriram Nagar, Kota (Rajasthan)

Daurala Organics, Daurala, Meerut (UP)

Daurala Foods & Beverages Pvt. Ltd. - subsidiary (The Target Company holds 99.99% of its equity capital)

Source: Annual Report 2006-07 of the Target Company

7.3 The Authorised Share Capital of the Target Company as on the date of PA was Rs. 65,00,00,000/- (Rupees Sixty Five Crores Only) comprising of 6,50,00,000 equity shares of Rs.10/- (Rupees Ten) each and the paid up share capital was Rs. 15,29,84,370/- (Rupees Fifteen Crores Twenty Nine Lakhs Eighty Four Thousand Three Hundred and Seventy Only) comprising of 1,52,98,437 equity shares of Rs 10/- (Rupees Ten) each. As on the date of this Letter of Offer, the paid up share capital of the Target Company is Rs. 17,39,84,370/- (Rupees Seventeen Crores Thirty Nine Lakhs Eighty Four Thousand Three Hundred and Seventy Only) comprising of 1,73,98,437 equity shares of Rs 10/- (Rupees Ten) each (consequent upon conversion of 7,00,000 Shares Warrants issued on preferential basis by the Target Company to the specified entities of the Promoters / Promoter group / Persons Acting in Concert into 21,00,000 equity shares). The allotment of equity shares and warrants is sub-judice.

7.4 As on the date of PA, the Share Capital Structure of the Target Company is as under:

Paid up Equity Shares of DSIL	No. of Equity shares / voting rights	% of Shares / voting rights
Fully paid up equity shares	1,52,98,437	100
Partly paid up equity shares	NIL	NIL
Total paid up equity shares	1,52,98,437	100
Total voting rights in Target Company	1,52,98,437	100

As on the date of this Letter of Offer, the Share Capital Structure of the Target Company is as under (upon conversion of 7,00,000 Shares Warrants issued on preferential basis by the Target Company to the specified entities of the Promoters / Promoter group / Persons Acting in Concert into 21,00,000 Equity Shares):

Paid up Equity Shares of DSIL	No. of Equity shares / voting rights	% of Shares / voting rights
Fully paid up equity shares	1,73,98,437	100
Partly paid up equity shares	NIL	NIL
Total paid up equity shares	1,73,98,437	100
Total voting rights in Target Company	1,73,98,437	100

7.5 As per the latest Annual Report and publicly available information, the current capital structure of the Target Company as at 31/03/2007 is Rs.15,29,84,370/- comprising of 1,52,98,437 equity shares of Rs.10/- each. Consequent to allotment by the Target Company of 21,00,000 equity shares in 3 tranches (7,00,000 equity shares on 18/12/2007, 4,55,000 equity shares on 29/03/2008 and 9,45,000 equity shares on 01/04/2008) on conversion of warrants allotted on 30/11/2007 on preferential basis to its promoters, the Target Company’s paid up equity share capital increased to Rs. 17,39,84,370/- comprising of 1,73,98,437 equity shares of Rs. 10/- each. However, the allotment of equity shares and warrants is sub-judice. In this regard, the Acquirer has asked the Target Company to provide the relevant information vide its Letter dated 01/ 12/2007 in the following format:

Date of Allotment

No. of shares issued

% of shares issued

Cumulative paid up capital (in Rs.)

Mode of allotment

Identity of acquirers (promoters / ex-promoters / others)

Status of compliance

The Target Company vide its Letter dated 04/12/2007 replied as under:

“The Capital Structure of the Company is given in the Annual Report for the year 2006-07, as in the earlier years, copies of which are in your possession and extensively quoted by you in your various communication.”

7.6 In relation to the disclosure with respect to the reasons of suspension of trading of the shares of the Target Company in any Stock Exchange(s), the Target Company vide its Letter dated 04/12/2007 replied as under:

“To the best of our knowledge there has not been any suspension of trading in Company scrip. However, you may verify the fact with BSE on which the Company’s shares are presently listed and also with CSE and DSE on which the shares were listed in the past.”

7.7 There are no preference shares or outstanding convertible instruments / warrants.

7.8 There are no partly paid up shares in the Target Company.

7.9 In relation to the compliance status with the listing requirements and the penal actions, if any, taken by the Stock Exchange(s), the Target Company vide its Letter dated 04/ 12/2007 replied as under:

“With regard to the compliance of Listing Agreement the Company has been complying with the same to the best of our knowledge.”

7.10 Daurala Organics Ltd. was merged with the Target Company w.e.f. 01.01.2005. The details of which as mentioned in the Annual Report for the year 2004-05 are:

AMALGAMATION & FINANCIAL RESTRUCTURING

A scheme u/s 391/394 of the Companies Act, 1956 for amalgamation of Daurala Organics Ltd. (DOL), a promoted company, with the Company effective from 1.1.2005 and financial restructuring was approved by the shareholders in the Court Convened meeting held on 13.5.2005. The Directors are happy to inform that the Hon’ble Delhi High Court has approved the Scheme by its Order dated 13.9.2005 and the Scheme has become effective from 1.1.2005.

The operations of DOL have synergy with the Chemical operations of the Company. The amalgamation will enable rationalising and streamlining of management, businesses and finances and will eliminate duplication of work to common advantage. The Daurala Organics operations will form a separate Unit of the Company.

These changes should help in enhancing shareholder value and future profitability.

As per the Scheme, the shareholders of DOL are being allotted equity shares in the ratio of 1 fully paid equity share of Rs. 10 in the Company for every 10 equity shares of Rs. 10 each held in DOL. With this the paid up share capital of the Company shall stand increased to Rs. 15.30 cr. from Rs. 13.73 cr. Surplus value of the assets over liabilities transferred from DOL of Rs. 14.11 cr have been credited to the ‘Amalgamation Reserve’ and investments in/ loans to promoted companies of Rs.23.25 cr and Rs. 12.66 cr respectively totalling Rs.35.91 cr have been provided for out of Share Premium Account.

7.11 The composition of the Board of Directors of DSIL as on the date of Public Announcement is as follows:-

Sr. No.	Name of the Director	Designation	Qualification and Experience in no. of years and field of experience	Residential Address	Date of Appointment	No. of shares held in Target Company	Other Director-ships
1.	Mr. Tilak Dhar	Chairman	B. Com, MBA & C. A. (Inter). He has over 27 years of experience at various management positions mostly in sugar, alcohol and chemical industries. He was the vice –president of ISMA and is actively involved in matters relating to sugar industry.	27, Sardar Patel Marg, New Delhi-110021	05/10/2005	11,816	1. DCM Shriram Fertilizers Ltd. 2. Indian sugar Exim Corporation Ltd. 3. Indo International Distillers Association Pvt. Ltd. 4. Daurala Foods & Beverages Pvt. Ltd. 5.Indian Sugar Mills Association
2.	Mr. Alok B. Shriram	Dy. Managing Director	B.Com. (Hons). He has over 27 years of experience at various management positions mainly in export market.	27, Sardar Patel Marg, New Delhi-110021	01/04/1992	34,536	1. Hi-Vac Wares Pvt. Ltd. 2. Quick Lithographers Pvt. Ltd. 3. Pee Kay Alkalies Pvt. Ltd. 4. Labels International pvt. Lt d
3.	Mr. Madhav B. Shriram	Whole Time Director	B.Com, MBA He has over 19 years of experience in various positions.	27, Sardar Patel Marg, New Delhi-110021	05/10/2005	15,466	1. Divine Investments Pvt. Ltd. 2. Varuna Overseas Pvt. Ltd
4.	Mr. G. Kumar	Whole Time Director	Post Graduate Engineer from IIT (Mechanical Engineer). He has over 42 years of experience in various senior management positions.	K-53, Ridge Wood Estate, Phase-Iv, Dlf City, Gurgaon-122002	01/02/2006	N. A.	Not a Director in any other company
5.	Mr. Atam Parkash	Director	Commerce Graduate	B-75, Greater Kailash, Part-I, New Delhi-110048	23/08/1991	1,003	1. M.R. Ramchand & Co. (P) Ltd. 2. Raghushree Sales Pvt. Ltd. 3. BHPC Clothing Co. Pvt. Ltd.
6.	Mr. P. R. Khanna	Director	Chartered Accountant. He has experience in the area of financial management and Auditing.	70, Sundar Nagar, New Delhi-110003	05/10/2005	960	1. UTI Asset Management Co. Pvt. Ltd. 2. Ansal Properties & Infrastructure Ltd. 3. Control & Switchgears Contractors Ltd. 4. Indag Rubber Ltd. 5. Uniproducts India Ltd
7.	Dr. V. L. Dutt	Director	He is an Industrialist of repute. He is the CMD of KCP Ltd. and past president of FICCI. He has vast experience and knowledge in industry and business, especially sugar and cement	No-2, Dr. P. V. Cherian Crescent Egmore, Chennai-600008 Tamilnadu	05/10/2005	2,200	1. K.C.P. Ltd. 2. KCP Biotech Ltd. 3. KCP Vietnam Industries Ltd. 4. DCM Shriram Fertilizers Ltd. 5. V. Ramakrishna Sons Pvt. Ltd
8.	Mr. S. P. Arora	Director	N.A.	205, Fancy Appartment 19 Vasundhara Enclave, Delhi-110096	27/05/2005	N. A.	He is the nominee Director of IFCI

However, as on the date of this Letter of Offer, the following are the changes in the composition of the Board of Directors of DSIL:

9.	Mr.S.B. Mathur	Additional Independent Director	N.A.	N.A.	14/01/2008	N.A.	Appointed as Additional Independent Director
10.	Shri Lokanath Mishra	Director	N.A.	N.A.	14/04/2008	N.A.	Appointed as Nominee Director by IFCI in place of Mr. S. P. Arora
11.	Shri Ravinder Narain	Additional Independent Director	Advocate	N.A.	29/01/2008	N.A.	Appointed as Additional Independent Director

7.12 The brief audited financials of DSIL are as under:

(Rs. in Lakhs)

Profit & Loss Statement	For the Year Ended 31.03.2005 (Audited)	For the Year Ended 31.03.2006 (Audited)	For the Year Ended 31.03.2007 (Audited)	For the 9 months Period ended 31.12.2007 (Un-audited)
Total Income	55496	71928	63349	43629
Total Expenditure	48728	63429	59608	42134
Profit Before Depreciation, Interest & Tax	6768	8499	3741	1495
Depreciation	733	1193	1339	1097
Interest	2438	2153	1827	2065
Profit Before Tax	3597	5153	575	(1667)
Profit after Tax	2484	2909	158	(1016)

(Rs. in Lakhs)

Balance Sheet Statement	Year Ended 31.03.2005 (Audited)	Year Ended 31.03.2006 (Audited)	Year Ended 31.03.2007 (Audited)	As on 31.12.2007 (un-audited)
Sources of Funds
Paid up Share Capital	*1530	1530	1530	1600
Reserves & Surplus#	14623	16716	16400	15384
Net worth	16153	18246	17930	16984
Secured Loans	25143	18912	22896	NA
Unsecured Loans	689	563	566	NA
Deferred Tax Liability	2840	2913	2413	NA
Total	44825	40634	43805	NA
Uses of Funds
Net Fixed Assets	21078	22226	24114	NA
Investments	448	308	535	NA
Net Current Assets	21680	17656	19137	NA
Deferred Tax Assets	1521	387	-	NA
Miscellaneous Expenditure not written off	98	57	19	NA
Total	44825	40634	43805	NA

*Includes Capital Suspense Account.

# Includes Revaluation Reserves

Other Financial Data	Year Ended 31.03.2005 (Audited)	Year Ended 31.03.2006 (Audited)	Year Ended 31.03.2007 (Audited)	As on 31.12.2007 (un-audited)
Dividend (%)	-	10%	-	-
Earning Per Share	17.34	19.02	1.04	(6.62)
Return on Net Worth (%)	15.38	15.94	0.88	NA
Book Value Per Share	105.59	119.27	117.20	NA

Formula: - Return on Net Worth = (Profit after Tax / Net Worth) * 100; Book value of shares = Net Worth divided by Number of equity shares issued; EPS = Profit after Tax / Number of equity shares issued.

The Target Company is a not a Sick Industrial Undertaking.

7.13 Reasons for Fall & Rise in Income & PAT in relevant years:

Year ended 31.03. 2007-The turnover for the year, gross profit, net profit was lower than the previous year due to steep fall in sugar prices and planned maintenance, shut down at the Rayon plant during the year.

Sugar

2006-07 turned out to be one of the worst years for the sugar industry. Daurala Sugar Works was no exception, despite significant steps taken to improve productivity and good operation of the plant. The depressed sugar market sentiment due to an all time high production of about 28 million MT for the season against a consumption of about 20 million MT, brought about a steep fall in the selling price of sugar.

During the year, under the second phase of expansion/ modernization, crushing capacity was enhanced and modernization of sugar plant and power house undertaken. This has taken a total crushing capacity to 11000 TCD. The project shall be completed in the current year. The Company is actively pursuing the up gradation of its co-generation facility to export surplus power so as to reduce the cyclicity of its sugar business.

Alcohol

The overall scenario of the Company’s alcohol business was positive and the overall profitability with stable sales volume and higher profitability. Use of Anhydrous Alcohol by Oil Companies improved with the introduction of the Ethanol blending programme in a few more States. This market is slated to steadily grow.

Chemicals

The chemical business of the Company showed higher revenues and operating profits during the year, despite higher input prices, greater competition and the appreciation of the Rupee. This was due to increased sales volume and cost reduction. Exports were at all time high, indicating international acceptance and confidence in the company’s products.

Nylon

Nylon chafer operations were carried on a limited scale due to availability of cheaper imports.

Year ended 31.3.2006

The financial results the company posted its best ever results. The turnover for the year including other income was Rs. 719 cr. Compared to Rs. 555 cr. In the previous year, the Gross Profit and the Net Profit were higher at Rs. 63 cr. and Rs. 29 cr. compared to Rs. 41 cr. and Rs. 25 cr. respectively in the previous year. Exports of the company at Rs. 186 cr. against Rs. 139 cr. in the previous year were an all time high.

Sugar

The overall performance of the business was better due to improved managerial inputs and market conditions.

The country’s sugar production and consumption during the year were more or less balanced .This coupled with exports resulted in lower inventories and sugar prices remaining firm. International sugar prices have also firmed up.

Alcohol

Production and sale of alcohols were stable. Margins were pressure due to reduced availability of molasses and resultant volatility in its price.

Chemicals

During the first year of operation of the chemical business after amalgamation of Daurala Organics, there was all round improvement. Year on year growth in income was higher and exports during year also registered an increase over the previous year. In the phase of a continuing competitive market situation, the growth is indicative of better customer confidence in the company and its products.

Rayon

Rayon operations were upgraded with addition of 5000TPA capacity and installation of state of the art Air jet looms for improving the fabric quality. Exports grew in spite of a weak Euro during the year. Operational margins, however, suffered during the year on account of increased raw material prices, high energy costs and relatively weak Euro. The Unit has installed a 3.2 MW back pressure turbine and is taking steps to install a high efficiency multi-fuel boiler. These steps are expected to reduce energy costs significantly and keep the Unit more competitive in the international market. This project will also promote “clean” fuel usage. Steps are also being taken to upgrade the dipping facility to meet value added products required by the customers. The Unit, for the 10^th time since 1992-93, received the award for the highest exports from Synthetics and rayon Export Promotion Council for the Year 2004-05.

Nylon

Nylon chafer market continued in a limited scale on account of availability of cheaper imported material.

Year ended 31.3.2005

Financial Results: The turnover including other income was Rs.555 cr. Compared to Rs. 615 cr in the previous period of 18 months, a 35% increase on annualised basis. The gross profit at Rs. 41 cr compared to Rs. 32 cr in the previous period is higher by 95% on annualised basis. The net profit at Rs. 25 cr is significantly higher than the figure of Rs. 3 cr in the previous period.

Sugar

The domestic sugar production this year was significantly affected due to the drought situation in some of the cane growing regions of the country. As a result, the excessive inventory with the industry during the previous few years was normalised, and the domestic market stabilised and improved during the later part of the year. To maintain stability, Government encouraged import of raw sugar against advanced license with an obligation to export the same in subsequent years.

Alcohol

On the whole, the scenario of alcohol business was positive and the overall profitability was better during the year. Due to decline in sugar and molasses production, the prices of molasses and alcohol improved significantly.

Chemicals

This year saw volatility in prices of raw material on the one hand and intense international competition in both our products and those of some of our major customers. This affected sales and profitability.

Daurala Organics

The Unit produces and sells fine chemicals to the bulk drugs and agro chemical industries. It is continuing to consolidate itself not only domestically but also internationally. Increase in raw material prices, mainly of those items whose prices are linked to those of crude oil, pressure, on selling prices due to competition and lowering of import duties affected margins.

Rayon

There was consisted growth in the performance of rayon operations. Rayon capacity was expanded by 6% during the year. Focus on cost reduction, operational efficiencies and energy conservation coupled with a stronger Euro enabled the unit to achieve better results. Exports continue to grow and was 15% higher on an annualised basis comparing to previous period.

Nylon

Nylon business improved as a result of growth in the automobile sector and the resultant increase in demand for tyres. However, entry of new players in the market and cheaper import put pressure on sales volume.

(Source: Annual reports of 2007, 2006, 2005, respectively)

7.14 (A) Pre - and Post-Offer shareholding pattern of the Target Company on the basis of the paid-up capital amounting Rs.15,29,84,370/- is as per the following table:

Sr. No.	Category	Shareholding & voting rights prior to the Offer as per the existing paid-up share capital of the Target Company i.e. (Rs.15,29,84,370/-)		Shareholding / voting rights to be acquired in offer (assuming full acceptance)		Shareholding / voting rights after offer (assuming full acceptance)
		(A)		(B)		(A)+(B) = (C)
		No.	%	No.	%	No.	%
(1)	Promoter group	49,77,819	32.54	NIL	NIL	49,77,819	32.54
	Total (1)	49,77,819	32.54			49,77,819	32.54
(2)	Public a. HB Stockholdings Limited (Acquirer) b. Market Purchases from the date of PA till 12/05/2008	19,54,348 18,80,160	12.77 12.29	35,00,000	22.88	73,34,508	47.94
	Sub Total (a+b)	38,34,508	25.06	35,00,000	22.88	73,34,508	47.94
	c. Others	64,86,110	42.40	-35,00,000	-22.88	29,86,110	19.52
	Total (2)	1,03,20,618	67.46			1,03,20,618	67.46
	GRAND TOTAL (1)+(2)	1,52,98,437	100	NIL	NIL	1,52,98,437	100

* the shareholding of the Acquirer has been calculated after including shares of the Target Company purchased by Acquirer after the date of public announcement till the date of this Letter of Offer (details of the same has been provided under clause 3.2.7 of this Letter of Offer).

(B) Pre - and Post-Offer shareholding pattern of the Target Company on the basis of the paid-up capital amounting to Rs.17,39,84,370/- is as per the following table:

Sr. No.	Category	Shareholding & voting rights prior to the Offer as per the existing paid-up share capital of the Target Company i.e. (Rs.17,39,84,370/-)		Shareholding / voting rights to be acquired in offer (assuming full acceptance)		Shareholding / voting rights after offer (assuming full acceptance)
		(A)		(B)		(A)+(B) = (C)
		No.	%	No.	%	No.	%
(1)	Promoter group	70,81,992	40.70	NIL	NIL	70,81,992	40.70
	Total (1)	70,81,992	40.70			70,81,992	40.70
(2)	Public a. HB Stockholdings Limited (Acquirer) b. Market Purchases from the date of PA till 12/05/2008	19,54,348 18,80,160	11.23 10.81	35,00,000	20.12	73,34,508	42.16
	Sub Total (a+b)	38,34,508	22.04	35,00,000	20.12	73,34,508	42.16
	c. Others	64,81,937	37.26	-35,00,000	-20.12	29,81,937	17.14
	Total (2)	1,03,16,445	59.30			1,03,16,445	59.30
	GRAND TOTAL (1)+(2)	1,73,98,437	100	NIL	NIL	1,73,98,437	100

7.15 The approximate number of shareholders of DSIL in public category is 1,03,022 as on PA date which includes 2,717 Non Resident shareholders.

7.16 The changes in the shareholding of the promoters of the Target Company are as per the details mentioned below:

As at	No. of shares	Percentage (%)	Total promoters shareholding (%)
31.03.2001	42,00,172	30.59	30.59
31.03.2002	42,04,000	30.62	30.62
31.03.2004	42,01,000	30.60	30.60
31.03.2005	42,26,000	30.78	30.78
31.03.2006	43,53,000	28.46	28.46
31.03.2007	49,66,000	32.46	32.46
01.04.2008	70,81,992#	40.70	40.70#

#The allotment of 21,00,000 Equity Shares as detailed out in para 7.5above is subjudiced before the Hon’ble Company Law Board. The percentage has been reckoned on the expanded capital after the said allotment of 21,00,000 Equity Shares.

Source: Annual Reports

7.17 As reported in the Annual Report 2006-07, the following are the particulars of disputed dues on account of Income Tax, Excise Duty, Customs Duty and Sales Tax matters that have not deposited by the Target Company:

S. No.	Name of the Statute	Nature of the Dues	Amount (Rs. in Lakhs)	Period to which the amount relates	Forum where dispute is pending
1	Income Tax	Corporate Tax	40.32	2002-03	Commissioner of Income Tax
2	Central Excise Laws	Excise Duty	1.84 6.88 2.88	1981-82 1996-99 2003-04 to 2005-06	Asst. Commissioner Addl. Commissioner Commissioner, Central Excise (Appeals)
		Modvat Credit	3.22	1995-96	Commissioner,(Appeals)
		Service Tax	18.84 9.80 2.01 2.71 4.09 4.64 8.00	2001-02 to 2004-05 2004-05 2004-05 to 2005-06 2004-05 2003-04 to 2005-06 2005-06 2005-06	Jt. Commissioner, Central Excise Commissioner,(Appeals) Commissioner,(Appeals) Addl. Commissioner Customs & Central Excise Addl. Commissioner Customs & Central Excise Dy. Commissioner Customs & Central Excise Addl. Commissioner Customs & Central Excise
3	The Customs Laws	Customs Duty	263.66	2000-01	Commissioner,(Appeals)
4	Sales Tax Laws	Sales Tax	2.43	1985-86	Trade Tax Tribunal
4	Sales Tax Laws	Purchase Tax	2.54 5.33	2001-02 2001-02	Tax Board Commercial Tax officer

Further, in respect of following matters, the concerned authority is in appeal against favourable orders received by the company

S. No.	Name of the Statute	Nature of the Dues	Amount (Rs. /Lakhs)	Period to which the amount relates	Forum where dispute is pending
1.	Central Excise Laws	Excise Duty	1.48 3.54 5.59 6.97 12.08	1993-94 1994-95 1998-99 1972-73 1977-78 2005-06	Customs Excise Service Tax Appellate Tribunal High Court Collector, Central excise Collector, Central excise Customs Excise Service Tax Appellate Tribunal
1.	Central Excise Laws	Modvat Credit	15.15	1995-96	High Court
2.	Sales Tax Laws	Sales Tax	3.65 0.26 2.79 4.28 12.18 5.48 20.13 42.45 33.42 3.97	1976-77 1978-79 1979-80 1982-83 1984-85 1988-89 1989-90 1992-93 1995-96 1997-98	} } } } } } High Court } } } }
2.	Sales Tax Laws	Sales Tax	65.00	2000-01	Supreme Court of India

7.18 In relation to the status of Corporate Governance, the Target Company has complied with the provisions of the corporate Governance as disclosed in the last audited annual report of the company for 2006-07.

7.19 Mr. B. P. Khandelwal, the Company Secretary of the Target Company is its Compliance Officer. His correspondence address is DCM Shriram Industries Ltd., Kanchenjunga, 18, Barakhamba Road, New Delhi -110001, Phone No.: 011- 23321413 Fax No.: 011- 23350765 / 23315424. (Source: www.bseindia.com).

7.20 SEBI is examining the extent of compliance with DIP Guidelines by the Target Company in the matter of allotment of 21 lacs shares on preferential basis during 2007-09.

8. OFFER PRICE AND FINANCIAL ARRANGEMENTS

8.1 Justification of Offer Price

8.1.1 As on the date of PA, the equity shares of the Target Company are listed on Bombay Stock Exchange Limited (BSE).

8.1.2 The annualised trading turnover of the Target Company during the preceding six calendar months ended October, 2007 in BSE is as follows:

Name of the

Stock Exchange

Total number of shares traded during May 2007 to October 2007

Total number of listed shares

Annualized trading turnover (% of the total shares)

BSE

19,88,187

1,52,98,437

25.99

(Source: www.bseindia.com)

8.1.3 Based on the above information, as the annualised trading turnover is more than 5% of the total number of the listed shares, the equity shares are deemed to be frequently traded on BSE as per the data available with BSE (Source: www.bseindia.com) within the meaning of explanation (i) to Regulation 20(5) of the SEBI (SAST) Regulations, 1997.

8.1.4 Following are the average of the weekly high and low of the closing prices and volume data for 26 weeks ended 18/11/2007 i.e. 26 weeks preceding the date of Public Announcement, at BSE, where the shares of the Target Company are most frequently traded.

No. of week	Week Ended	Weekly High Closing (Rs.)	Weekly Low Closing (Rs.)	Average (Rs.)	Volume (No. of Shares Traded)
1	25.05.2007	47.55	46.60	47.08	29,459
2	01.06.2007	46.90	45.65	46.28	43,248
3	08.06.2007	45.05	42.90	43.98	75,602
4	15.06.2007	45.60	43.10	44.35	31,192
5	22.06.2007	44.90	44.05	44.48	25,652
6	29.06.2007	48.20	45.10	46.65	24,077
7	06.07.2007	47.70	44.85	46.28	53,364
8	13.07.2007	47.45	46.00	46.73	1,05,760
9	20.07.2007	48.50	46.95	47.73	80,502
10	27.07.2007	47.20	45.65	46.43	41,525
11	03.08.2007	44.85	42.55	43.70	24,572
12	10.08.2007	42.40	40.80	41.60	44,124
13	17.08.2007	43.55	40.15	41.85	84,595
14	24.08.2007	39.20	38.50	38.85	92,830
15	31.08.2007	43.10	39.75	41.43	30,626
16	07.09.2007	50.50	41.95	46.23	1,28,542
17	14.09.2007	54.65	49.00	51.83	2,75,092
18	21.09.2007	63.65	53.60	58.63	2,46,674
19	28.09.2007	56.90	53.55	55.23	84,113
20	05.10.2007	52.60	48.95	50.78	43,067
21	12.10.2007	50.25	47.75	49.00	70,322
22	19.10.2007	50.45	48.00	49.23	50,432
23	26.10.2007	59.50	49.00	54.25	92,447
24	02.11.2007	63.25	57.40	60.33	1,57,869
25	09.11.2007	70.10	63.75	66.93	1,31,425
26	16.11.2007	69.80	65.65	67.73	50,679
	Total				10,72,428
	26 weeks average			49.13

(Source: www.bseindia.com)

8.1.5 Following are the prices and volume data for 2 weeks ended 18/11/2007 i.e. 2 weeks preceding the date of Public Announcement, at BSE, where the shares of the Target Company are most frequently traded.

Day	Dates	High (Rs.)	Low (Rs.)	Average (Rs.)	Volume
1	5.11.2007	66.40	63.40	64.90	37,977
2	6.11.2007	67.30	62.80	65.05	25,465
3	7.11.2007	66.90	60.60	63.75	35,311
4	8.11.2007	70.20	65.00	67.60	28,057
5	9.11.2007	73.00	67.00	70.00	4,615
6	12.11.2007	69.75	66.70	68.23	7,088
7	13.11.2007	69.20	65.60	67.40	6,188
8	14.11.2007	68.00	63.10	65.55	13,377
9	15.11.2007	67.00	64.10	65.55	8,176
10	16.11.2007	69.80	64.10	66.95	15,850
	Total				1,82,104
	2 Weeks Average			66.50

(Source: www.bseindia.com)

8.1.6 In accordance with Regulation 20(4) of SEBI (SAST) Regulations, 1997, the Offer Price was Rs. 70/- (Rupees Seventy Only) per fully paid up equity share which was higher than the average of the weekly high and low of the closing prices during 26 weeks or 2 weeks average of daily high and low prior to PA date as follows:

a.	Negotiated Price	Not applicable
b.	Highest price paid by the Acquirer/PAC for acquisitions including by way of allotment in a public or rights or preferential issue during the 26 weeks prior to 19^th November, 2007 (the date of PA).	Rs. 62.54
c.	The higher of the average of the weekly high and low of the closing prices for the equity shares of the Target Company for the 26 weeks period and the average of the daily high and low of the prices of the equity shares during the 2 weeks period prior to 19^th November, 2007 (the date of PA).	Rs. 66.50

8.1.7 On and after the date of the PA till the date of this Letter of Offer, the Acquirer has purchased 18,80,160 equity shares of the Target Company as per the details given below:

Date	Mode of Acquisition	Stock Exchange	No. of shares	Highest Price (Rs.)	Lowest Price (Rs.)	Average (Rs.)
November 19, 2007 to May 12, 2008	Market Purchase	The Stock Exchange, Mumbai	18,80,160	127.50	69.00	116.84

The highest purchase price for the above purchases is Rs. 127.50 per equity share. However, the Acquirer, in terms of Regulation 20(7) read with Regulation 26 of the SEBI (SAST) Regulations, 1997, has revised the Offer Price to Rs. 130/- (Rupees One Hundred Thirty Only) per equity share which is higher than the maximum price paid by the Acquirer since the date of publication of PA from the earlier Offer Price of Rs. 70/- (Rupees Seventy Only) per equity share vide PA dated 19th November, 2007 which was further revised to Rs. 120/- (Rupees One hundred Twenty Only) per equity share vide RPA dated 29th November, 2007.

8.1.8 In view of the above, the Revised Offer Price of Rs. 130/- per equity share is justified in terms of Regulation 20(4) of the SEBI (SAST) Regulations, 1997.

8.1.9 There is no non compete agreement.

8.1.10 If the Acquirer acquires equity shares after the date of Public Announcement up to seven (7) working days prior to the closure of the Offer at a price higher than the Offer Price, then the highest price paid for such acquisition shall be payable for all the valid acceptances received under the Offer.

8.2 Financial Arrangements

8.2.1 Consequent to the upward revision in the Offer Price, assuming full acceptance, the total requirement of funds for the revised Offer is Rs. 45,50,00,000/- (Rupees Forty Five Crores and Fifty Lakhs Only). In accordance with Regulation 28 of SEBI (SAST) Regulations, 1997 an escrow account has been created for deposit of securities with M/s Religare Securities Ltd., New Delhi. This escrow account comprises of 6,25,000 equity shares of M/s Jaiprakash Associates Ltd., of face value of Rs. 2/- each (Market Value Rs. 15,40,00,000/- (Rupees Fifteen Crores Forty Lakhs Only) based on closing market rate of Rs. 246.40 as on 12/05/2008 on BSE) [As on the date of creation of Escrow Account i.e. 16/11/2007, the Market Price was Rs. 1520.55 comprising of 60,000 equity shares of M/s. Jaiprakash Associates Ltd., of face value of Rs 10/- each]. After the upward revision of the Offer Price to Rs. 130/-, the deposit of securities with M/s. Religare Securities Limited, in favour of the Manager to the Offer, is more than the requisite amount to be kept in escrow (which is 25% of the total consideration payable) under the revised Offer under the Regulation 28(9) of SEBI (SAST) Regulations.

8.2.2 The said above securities viz. Jaiprakash Associates Limited deposited in Escrow Account are free from lien / encumbrances and are carrying voting rights. There has been no freezing or suspension of voting rights. The face value of the is Rs. 2/- per share and said shares are fully paid up. HB Stockholdings Limited is the holder of securities deposited in Escrow Account for which an NOC has been obtained from the holder of the securities. If there is any deficit on realization of value of the securities, the Merchant Banker shall make good any such deficit in accordance with Regulation 28(7) of SEBI (SAST) Regulations, 1997.

8.2.3 As per PA, the Acquirer has deposited a sum of Rs. 25,00,000/- (Rupees Twenty Five Lakhs Only) with HDFC Bank Ltd., Surya Kiran Building, K. G. Marg, New Delhi-110001 being more than 1% of the total consideration payable under the Offer with authority given to the Manager to the Offer to operate and realize the value of the Escrow Account. As per RPA, the Acquirer had increased the cash deposit to Rs.42,00,000 (Rupees Forty Two Lakhs Only). Now, the Offer Price being revised to Rs.130/-, the Acquirer has increased the cash deposit by Rs. 4,00,000/- (Rupees Four Lakhs Only) in the said Escrow Account and the balance is now Rs. 46,00,000/- (Rupees Forty Six Lakhs Only) which is more than 1% of the total consideration payable under the revised Offer.

8.2.4 The Acquirer has adequate resources to meet the financial requirements of the Offer. The acquisition will be financed through internal resources.

8.2.5 M/s. P. Bholusaria & Co, Chartered Accountants, having office at 26/11, Shakti Nagar Delhi-110007, Tel.:011-23845925, Fax: 011-42351148 the Statutory Auditors of the Acquirer, through their partner Mr. Amit Goel, (Membership Number-92648) have certified on 12/05/2008 that the Acquirer has adequate resources to meet the financial requirements of the total consideration payable under the revised Offer.

8.2.6 The Manager to the Offer has been duly authorised by the Acquirer to realize the value of the securities by sale or otherwise in terms of the SEBI (SAST) Regulations, 1997.

8.2.7 The Manager to the Offer based on the declaration received from Mr. Amit Goel, Chartered Accountant confirms that firm arrangements for funds and money for payment through verifiable means are in place to fulfill the Offer obligations under the SEBI (SAST) Regulations, 1997.

9. TERMS AND CONDITIONS OF THE OFFER

9.1 Persons eligible to participate in the Offer

9.1.1 Registered shareholders of DCM Shriram Industries Limited (other than Acquirer and PAC) and unregistered shareholders who own the equity shares of DCM Shriram Industries Limited at any time prior to the date of Closure of the Offer.

9.2 Statutory Approvals / Other Approvals Required for the Offer

9.2.1 The Offer is subject to the receipt of approval from the Reserve Bank of India (“RBI”) for acquiring equity shares from non-resident shareholders who will validly tender their equity shares under this Offer, if applicable. The Acquirer has already applied for in-principle approval of RBI and will make the necessary applications to and filings with RBI on behalf of the non resident shareholders.

9.2.2 To the best of knowledge of the Acquirer, no approvals from Banks / Financial Institutions are required for making this Offer.

9.2.3 To the best of the Acquirer’s knowledge, there are no other statutory approvals required to implement the Offer other than that specified above.

9.2.3.1 In case of delay in receipt of any statutory approval, Regulation 22(12) of SEBI (SAST) Regulations, 1997, will be adhered to, i.e. SEBI has power to grant extension of time to the Acquirer for payment of consideration to the shareholders subject to the Acquirer agreeing to pay interest as directed by SEBI. Further, in case the delay occurs on account of wilful default by the Acquirer in obtaining the approvals, Regulation 22(13) of SEBI (SAST) Regulations, 1997 will also become applicable.

9.2.4 The Offer would be subject to all other statutory approvals that may become applicable at a later date before the completion of Offer.

9.3 Others

9.3.1 Accidental omission to dispatch this Letter of Offer to any person to whom this Offer is made or the non-receipt or delayed receipt of this Letter of Offer by any such person will not invalidate this Offer in any way.

9.3.2 This Letter of Offer has been mailed to all the shareholders of DSIL (other than Acquirer and PAC), whose names appeared on the Register of Members of DSIL as on 20/11/2007, being the Specified Date.

9.3.3 Unaccepted Shares / Shares Certificates, Share Transfer Forms and other documents, if any, will be credited back to respective depository accounts or returned by registered post at the shareholder(s)’ / unregistered owner(s)’ sole risk.

9.3.4 Consideration for equity shares accepted would be paid by crossed account payee cheques / demand drafts / pay orders and sent by registered post to the address of the first shareholder(s) / unregistered owner(s) at their sole risk.

10. PROCEDURE FOR ACCEPTANCE AND SETTLEMENT OF THE OFFER

10.1 The Offer is not subject to any minimum level of acceptance from shareholders and in case of the shares received under the Offer exceeding the Offer size, the acquirer will accept shares on proportionate basis.

10.2 A Letter of Offer specifying the detailed terms and conditions of the Offer together with a Form of Acceptance cum Acknowledgement and Transfer Deed (for shareholders holding shares in physical form) will be mailed to the shareholders of DSIL (other than Acquirer and PAC) whose names appear on the Register of Members of DSIL and to the beneficial owners of the equity shares of DSIL whose names appear as beneficiaries on the records of the respective Depositories, at the close of business hours on 20/11/2007, (the “Specified Date”).

10.3 All shareholders of the Target Company (other than Acquirer and PAC), who own equity shares at any time before the Closure of the Offer, are eligible to participate in the Offer.

10.4 Eligible persons to the Offer may also download a copy of the Letter of Offer and Form of Acceptance cum Acknowledgement and Form of Withdrawal, which will be available on SEBI’s website: http://www.sebi.gov.in and can apply for the Offer in such downloaded form.

10.5 Please note that no shares and other relevant documents should be sent directly to the Acquirer or PAC or to the Target Company.

10.6 Beneficial owners and shareholders holding shares in physical form, who wish to avail of this Offer will have to forward the following documents to the office of the Registrar to the Offer by hand delivery or by registered post or courier, as the case may be, from Monday to Friday between 10.00 a.m. to 1.00 p.m. & 2.00 p.m. to 5.00 p.m. and on Saturday between 10.00 a.m. to 1.00 p.m., on or before the date of Closure of the Offer, i.e. 11/06/2008:

• Form of Acceptance duly completed in all respects and signed by all the joint shareholders in the same order and as per the specimen signature(s) registered with DSIL.

• Relevant Original Share Certificate(s).

• Valid Share Transfer Deed(s), duly signed (in case the equity shares are held in joint names, by all the shareholders and in the same order as appearing in the Register of Members of DSIL or on the Share Certificate issued by DSIL) as per the specimen signature(s) lodged with DSIL and witnessed by an independent witness (if possible, by a Notary Public, Bank Manager or a Member of a recognised stock exchange with membership number). Please do not fill in any other details in the Share Transfer Deed. In the event that a shareholder needs additional Share Transfer Deed(s), the same can be obtained from the Registrar to the Offer as mentioned hereinafter.

• Where the Transfer Deed(s) are executed by Constituted Attorney, attach a copy of the Power of Attorney duly certified as a True Copy by a Notary Public / Gazetted Officer.

10.7 The Registrar to the Offer, RCMC Share Registry Private Limited has opened a special depository account with National Securities Depository Limited (“NSDL”) for receiving equity shares during the Offer from eligible shareholders who hold equity shares in demat form.

10.8 Beneficial owners and shareholders holding shares in the dematerialised form, will be required to send their Form of Acceptance cum Acknowledgement and other documents to the Registrar to the Offer either by Registered Post / by Courier/ by hand delivery from Monday to Friday between 10.00 a.m. to 1.00 p.m. & 2.00 p.m. to 5.00 p.m. and on Saturday between 10.00 a.m. to 1.00 p.m, on or before the date of Closure of the Offer, i.e. 11/06/2008, along with a photocopy of the delivery instructions in “Off market” mode or counterfoil of the delivery instructions in “Off-market” mode, duly acknowledged by the Depository Participant (“DP”), in favour of “RCMC A/c DSIL-Open Offer Escrow A/c” (“Depository Escrow Account”) filled in as per the instructions given below:

Depository	National Securities Depository Limited
Account Name	RCMC A/c DSIL-Open Offer Escrow A/c
Depository Participant	Pee Aar Securities Ltd.
DPID	IN301428
Client ID	10056828

Shareholders having their beneficiary account in Central Depository Services (India) Limited (“CDSL”) have to use inter depository delivery instructions slip for the purpose of crediting their equity shares in favour of the special depository account with NSDL.

10.9 In case of, (a) shareholders who have not received the LOO, (b) unregistered shareholders and, (c) owner of the equity shares who have sent the equity shares to the Target Company for transfer, may send their consent to the Registrar to the Offer on plain paper, stating the name, address, number of equity shares held, distinctive numbers, folio numbers, number of shares offered along with the documents to prove their title to such equity shares such as broker note, succession certificate, original share certificate / original letter of allotment and valid equity share transfer deeds (one per folio), duly signed by all the shareholders (in case of joint holdings in the same order as per the specimen signatures lodged with DSIL), and witnessed (if possible by the Notary Public or a Bank Manager or the Member of the stock exchange with membership number), as the case may be, so as to reach the Registrar to the Offer on or before 5.00 p.m. up to the date of Closure of the Offer i.e. 11/06/2008. Such shareholders can also obtain the LOO from the Registrar to the Offer by giving an application in writing. No indemnity is needed from the unregistered shareholders.

10.10 The shareholders, who have not received the LOO and are holding equity shares in the dematerialised form, may send their consent to the Registrar to the Offer on plain paper, stating the name, address, number of shares held, Depository name, Depository ID, Client name, Client ID, number of equity shares offered along with a photocopy of the original delivery instructions in “Off-market” mode or counterfoil of the delivery instruction in “Off-market” mode, duly acknowledged by the Depository Participant so as to reach the Registrar to the Offer on or before 5.00 p.m. upto the date of Closure of the Offer i.e. 11/06/2008. Such equity shareholders can also obtain the LOO from the Registrar to the Offer by giving an application in writing.

10.11 In case the equity shares stand in the name of a sole shareholder, who is deceased, the notarised copy of the legal representation obtained from a competent court should be enclosed.

10.12 Shareholders who have sent their equity shares for dematerialisation need to ensure that the process of getting shares dematerialised is completed well in time so that the credit in the Depository Escrow Account should be received on or before 5.00 p.m. upto the date of Closure of the Offer, i.e. 11/06/2008, else the application would be rejected.

10.13 In case the equity shares are held by a Company / Body Corporate, then a Certified True Copy of a valid Board Resolution giving authority and Certified True Copy of the Memorandum and Articles of Association of such Company / Body Corporate should also be enclosed.

10.14 The following collection centre would be accepting the documents by Hand Delivery / Registered Post / Courier as specified above, both in case of shares in physical and dematerialised form.

Address of the Collection Centre

Contact Person

Phone / Fax / Email

RCMC Share Registry Pvt. Ltd

B-106, Sector-2, Noida-201301

Mr. Rakesh Adhana

Tel: 0120-4015880

Fax: 0120-2444346

Email: shares@rcmcdelhi.com

Collection Timings for the location mentioned above will be from Monday to Friday between 10.00 a.m. to 1.00 p.m. & 2.00 p.m. to 5.00 p.m. and on Saturday between 10.00 a.m. to 1.00 p.m

10.15 The Registrar to the Offer will hold in trust the shares / share certificates lying in credit of the special depository account, Form of Acceptance cum Acknowledgement, if any, and the transfer form(s) on behalf of the shareholders of DSIL who have accepted the Offer, until the cheques / drafts for the consideration and / or the unaccepted shares / share certificates are dispatched / returned.

10.16 In terms of Regulation 22(5A), shareholders shall have the option to withdraw acceptance tendered earlier, by submitting the Form of Withdrawal enclosed with the LOO, so as to reach the Registrar to the Offer upto three working days prior to the date of Closure of the Offer, i.e. by 06/06/2008.

10.17 The withdrawal option can be exercised by submitting the Form of Withdrawal along with a Copy of the Form of Acceptance cum Acknowledgement and the Acknowledgement slip. In case of non receipt of Form of Withdrawal, the withdrawal option can be exercised by making an application on plain paper along with the following details:-

10.17.1 In case of physical shares: name, address, distinctive numbers, folio number, share certificate number, number of shares tendered, date of tendering the shares.

10.17.2 In case of dematerialised shares: name, address, number of shares tendered, DP name, DP ID, date of tendering the shares, beneficiary account number and a photocopy of the delivery instructions in “off market” mode or counterfoil of the delivery instruction in “off market” mode, duly acknowledged by the DP, in favour of “RCMC A/c DSIL-Open Offer Escrow A/c” (“Depository Escrow Account”).

10.18 The withdrawal of shares will be available only for the Share Certificates / Shares that have been received by the Registrar to the Offer or credited to the Special Depository Escrow Account. Physical shares withdrawn by shareholders would be returned to the shareholders by Registered post.

10.19 As per the provisions of Section 196D(2) of the Income Tax Act, 1961, and amendments thereto (the “Income Tax Act”) , no deduction of tax at source shall be made from any income by way of capital gains arising from the transfer of securities referred to in section 115D of the Income Tax Act. However, while tendering their equity shares under the Offer, Non-Resident Individuals, Overseas Corporate Bodies and other non-resident shareholders will be required to submit a No Objection Certificate (“NOC”) or Tax Clearance Certificate or Certificate for Deduction of Tax at lower rate from Income Tax Authorities under the Income Tax Act indicating the amount of tax to be deducted by the Acquirer before remitting the consideration. In case the aforesaid NOC or Tax Clearance Certificate or Certificate for Deduction of Tax at lower rate is not submitted, the Acquirer will arrange to deduct tax at the maximum marginal rate as may be applicable to the category of shareholders on the entire consideration amount payable to such shareholders. Non-Resident Shareholders should also submit a copy of the permission received from the Reserve Bank of India for acquisition of the shares of the Target Company. In case of its non submission the Acquirer reserves its right to reject the shares tendered in the Offer.

10.20 Acquirer will acquire all the 35,00,000 fully paid up equity shares tendered in the Offer with valid applications. However, if the aggregate to the valid response to the Offer exceeds the Offer size of 35,00,000 shares, then the Acquirer shall the valid applications received on a proportionate basis in accordance with Regulation 21(6) of the SEBI (SAST) Regulation, 1997.

11. METHODS OF SETTLEMENT

11.1 At present, the marketable lot of DSIL is 1 (One) equity share.

11.2 The Form of Acceptance, relevant Original Share Certificate(s), valid Share Transfer Deed(s) and other documents and / or shares lying in the special depository account, tendered by the shareholders of DSIL under this Offer, shall be accepted from such shareholders in terms of the Letter of Offer, but will become a fully valid and binding contract between such shareholder(s) and the Acquirer only upon the fulfilment of all the conditions mentioned in the Letter of Offer and Form of Acceptance.

11.3 On fulfilment of all the conditions mentioned in the Letter of Offer and Form of Acceptance, the Acquirer will pay the Offer Price by a crossed and “Account Payee Only” cheque(s) or demand draft(s) or pay order(s) drawn in favour of the sole shareholder or first named shareholder in case of joint holding. The payment consideration will be sent by Registered Post to the sole / first named shareholder of DSIL whose equity shares are accepted by the Acquirer at his address registered with DSIL. It is desirable that shareholders holding shares in physical mode provide bank details of the first / sole shareholder in the Form of Acceptance cum Acknowledgement, so that the same can be incorporated in the cheque / demand draft. In case of shareholders holding shares in electronic mode, bank particulars recorded with the Depository Participant (DP) and forming part of the beneficial download will be incorporated in the cheque / demand draft. In case of any change in bank particulars recorded with the DP, new bank particulars duly attested by the DP should be furnished.

11.4 Unaccepted share certificates, transfer forms and other documents, if any, will be returned by registered post at the shareholder(s)’ / unregistered owner(s)’ sole risk to the sole / first shareholder.

11.5 The Acquirer shall endeavor to complete all procedures relating to the Offer within fifteen days from the date of closure of the Offer i.e. by 26/06/2008, including payment of consideration to the shareholders of DSIL whose equity shares are accepted for purchase by the Acquirer.

11.6 In case of non-receipt of any of statutory approvals required, as per Regulation 22(12), SEBI may grant extension of time for the purpose of making payments to the shareholders who have successfully tendered their equity shares pursuant to this Offer and in such an event, the Acquirer will pay interest for the delayed payment beyond fifteen days of the closure of the Offer, at such rate as may be prescribed by SEBI.

12. GENERAL

12.1 The Form of Acceptance and instructions contained therein are integral part of this Letter of Offer.

12.2 None of the Acquirer or the Manager to the Offer or the Registrar to the Offer or the Target Company will be responsible for any loss in transit or delay in receipt of the completed Form of Acceptance, Share certificate(s), Share transfer deed(s), and copy of delivery instructions or other documents.

12.3 The Offer Price is denominated and payable in Indian Rupees only.

12.4 All the communication in connection with the Form of Acceptance should be addressed to the Registrar to the Offer as mentioned above, with full name of the sole / first applicant, folio number, number of equity shares tendered, date of lodgement of the Form of Acceptance and other relevant particulars.

12.5 If there is any upward revision in the Offer Price (Regulation 26) by the Acquirer till the last permitted date for revision, i.e. 02/06/2008 at any time upto seven working days prior to the date of closure of the Offer or withdrawal of the Offer, the same would be informed by way of Public Announcement in the same newspapers wherein original Public Announcement had appeared. Such revised Offer Price would be payable for all the shares tendered anytime during the Offer.

12.6 “If there is a competitive bid:

12.6.1 The Public Offers under all the subsisting bids shall close on the same date.

12.6.2 As the Offer Price cannot be revised during seven working days prior to the closing date of the offers / bids, it would, therefore, be in the interest of shareholders to wait till the commencement of that period to know the final Offer Price of each bid and tender their acceptance accordingly”.

12.7 The last date for receiving Competitive Bid was 10/12/2007 and no Competitive Bid has been made till date.

12.8 The Acquirer has acquired 8,49,133 equity shares of DSIL during the 12 months prior to the date of this Public Announcement.

12.9 A copy of Public Announcement, Revised Public Announcement, Corrigendum to the Public Announcement, Letter of Offer, Form of Acceptance cum Acknowledgement and Form of Withdrawal can be obtained from SEBI’s official website: http://www.sebi.gov.in.

12.10 The Manager to the Offer i.e. Mefcom Capital Markets Limited does not hold any shares in DSIL as on the date of PA.

12.11 Applications which are complete in all respects and which reach the Registrar to the Offer on or before the date of closure of Offer i.e. 11/06/2008 would be approved and the shares so offered would be accepted by the Acquirer free from all lien, charges, encumbrances along with all the rights attached to the shares like the right to all dividends, bonus and right shares and all further rights as are attached to such acquired shares.

13. DOCUMENTS FOR INSPECTION

The following documents are regarded as material documents and are available for inspection at the office of the Manager to the Offer at 5th Floor, Sanchi Building, 77, Nehru Place, New Delhi-110019 from 10.30 A.M. to 1.00 P.M. on any working day, except Saturdays, Sundays and Holidays until the closure of the Offer.

13.1 Certificate of Incorporation, Memorandum & Articles of Association of HBSL.

13.2 Certificate issued by Mr. Amit Goel, Partner of M/s. P. Bholusaria & Co, Chartered Accountants, certifying firm arrangement of funds for fulfilment of Offer obligations.

13.3 Certificate issued by Chartered Accountants certifying Net Worth of PAC.

13.4 Audited Annual Reports of HBSL and DSIL for the years ended 31/03/2005, 31/03/2006 and, 31/03/2007.

13.5 Details of Deposit of approved securities with M/s. Religare Securities Ltd., New Delhi comprising of 6,25,000 equity shares of M/s. Jaiprakash Associates Ltd., of face value of Rs. 2/- each (Market Value Rs. 15,40,00,000/- (Rupees Fifteen Crores Forty Lakhs Only)) based on closing market rate as on 12/05/2008 on BSE [As on the date of creation of Escrow Account i.e. 16/11/2007, the Market Price was Rs. 1520.55 each of 60,000 equity shares of M/s. Jaiprakash Associates Ltd., of face value of Rs 10/- each] along with copy of letter of M/s. Religare Securities Ltd., New Delhi certifying that Manager to the Offer is authorised to realise the value of the securities by sale or otherwise. The face value of the securities is Rs. 2/- per share and said shares are fully paid up. Copy of Escrow Agreement with HDFC, New Delhi as well as copy of letter of HDFC, New Delhi confirming that cash of Rs. 46,00,000/- is kept in the escrow account.

13.6 Published copy of the Public Announcement, which appeared in the newspapers on 19/11/2007, copy of Revised Public Announcement dated 29/11/2007 and copy of Corrigendum to the Public Announcement dated 14/05/2008.

13.7 Copy of agreement entered with DP for opening special depository account for the purpose of the Offer.

13.8 Copy of approval letter No. CFD/DCR/TO/AK/125018/2008 dated 08/05/2008 from SEBI in terms of proviso to Regulation 18(2) of the SEBI (SAST) Regulations, 1997.

14. DECLARATION BY THE ACQUIRER AND PAC

The Directors of Acquirer, i.e. M/s. HB Stockholdings Limited, having its registered office at Plot No. 31, Echelon Institutional Area, Sector-32, Gurgaon–122001-07, and PAC for this Offer accept full responsibility for the information contained in this Letter of Offer and also for the obligations of the Acquirer and PAC as laid down in the SEBI (SAST) Regulations, 1997 and subsequent amendments made thereto.

All information contained in this document is as on the date of the Public Announcement, unless stated otherwise.

For and on behalf of Board of Directors of

HB Stockholdings Limited and PAC

sd/-

J.M.L. Suri

(Executive Director)

Place: Gurgaon

Date: 14/05/2008

15. ENCLOSURES

1. Form of Acceptance cum Acknowledgement

2. Form of Withdrawal

3. Transfer Deed for Shareholders holding Equity Shares in Physical Form.

FORM OF ACCEPTANCE CUM ACKNOWLEDGEMENT

(All terms and conditions used herein shall have the same meaning as ascribed thereto in the Letter of Offer)

DCM Shriram Industries Limited - Open Offer

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

(Please send this Form of Acceptance with enclosures to the Registrar to the Offer)

OFFER OPENS ON:

23^rd May, 2008 (Friday)

OFFER CLOSES ON:

11^th June, 2008 (Wednesday)

From

FOR OFFICE USE ONLY

Acceptance Number

Number of equity shares offered

Number of equity shares accepted

Purchase consideration (Rs.)

Cheque/Demand Draft/Pay Order No.

Tel.: Fax: E-mail:

RCMC Share Registry Private Limited

B-106, Sector-2,

Noida-201301

Dear Sir,

Sub: Open Offer by HB Stockholdings Limited (“the Acquirer” or “HBSL”) to the shareholders of DCM Shriram Industries Limited (“the Target Company” or “DSIL”) (“Offer”) for acquisition of 35,00,000 Equity Shares of Rs. 10/- each at a revised Offer Price of Rs. 130/- (Rupees One Hundred and Thirty Only) per fully paid equity share, payable in cash.

I/We refer to the Public Announcement dated November 19, 2007, Revised Public Announcement dated November 29, 2007, Corrigendum to the Public Announcement dated May 14, 2008 and the Letter of Offer dated May 14, 2008 for acquiring the equity shares held by me/us in DCM Shriram Industries Limited. I/We, the undersigned, have read the aforementioned Public Announcement, Revised Public Announcement, Corrigendum to the Public Announcement and Letter of Offer and understood their contents including the terms and conditions as mentioned therein.

___________________________________________________________________________________________________________________-________

SHARES IN PHYSICAL FORM

I/We accept the Offer and enclose the original share certificate(s) and duly signed transfer deed(s) in respect of my/our shares as detailed below:

Number of equity shares held in DSIL		Number of equity shares offered
In figures	In words	In figures	In words

Sr. No.	Ledger Folio No(s).	Certificate No(s).	Distinctive No(s).		No. of Shares
Sr. No.	Ledger Folio No(s).	Certificate No(s).	From	To	No. of Shares
1
2
3
4
5
Total No. of Equity Shares

(In case the space provided is inadequate, please attach a separate sheet with details)

I/We note and understand that the Registrar to the Offer will hold the original share certificate(s) and valid share transfer deed in trust for me/us until the time the Acquirer dispatches the purchase consideration as mentioned in the Letter of Offer. I/We also note and understand that the Acquirer will pay the purchase consideration only after verification of the documents and signatures.

_____________________________________________________________________________________________________________________________

SHARES IN DEMATERIALISED FORM

I/We, holding shares in the dematerialised form, accept the Offer and enclose the photocopy of the Delivery Instruction in “Off-market” mode, duly acknowledged by the Depository Participant (“DP”) in respect of my shares as detailed below:

DP Name	DP ID	Client ID	Beneficiary Name	No. of Shares

I/We have executed an off-market transaction for crediting the shares to the special depository account i.e. RCMC A/c DSIL-Open Offer Escrow A/c as per the details below:

via a delivery instruction from my account with NSDL

via an inter-depository delivery instruction from my account with CDSL

Depository	National Securities Depository Limited
Account Name	RCMC A/c DSIL-Open Offer Escrow A/c
Depository Participant	Pee Aar Securities Ltd.
DPID	IN301428
Client ID	10056828

I/We note and understand that the shares would lie in the special depository account until the time the Acquirer dispatches the purchase consideration as mentioned in the Letter of Offer. I/We also note and understand that the Acquirer will pay the purchase consideration only after verification of the documents and signatures.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ ___ __Tear Here __ __ _ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ ___

DCM Shriram Industries Limited - Open Offer Acknowledgement Slip

Received from Mr. /Ms. / Mrs. _________________ residing at ______________________________________________________________________

________________ a Form of Acceptance cum Acknowledgement for _____________ shares along with:

Copy of depository instruction slip from DP ID ____________ Client ID __________________________________________________________

________ Share certificate(s) _____________ transfer deed(s) under folio number(s) ______________________________________________

for accepting the Offer made by the Acquirer.

Stamp of Collection Centre:

Signature of Official:

Date of Receipt:

For NRIs/ OCBs/ FIIs/ Foreign Shareholders:

I/We have enclosed the following documents:

· No Objection Certificate / Tax Clearance / Certificate for Deduction of Tax at lower rate from Income Tax Authorities.

· RBI approvals for acquiring shares of DCM Shriram Industries Limited hereby tendered in the Offer.

I/We confirm that the equity shares of DCM Shriram Industries Limited, which are being tendered herewith by me/us under this Offer, are free from liens, charges and encumbrances of any kind whatsoever.

I/We authorize the Acquirer to accept the shares so offered which it may decide to accept in consultation with the Manager to the Offer and in terms of the Letter of Offer and I/we further authorize the Acquirer to return to me/us, share certificate(s)/shares in respect of which the Offer is not found valid/not accepted without specifying the reasons thereof.

I/We authorize the Acquirer and the Registrar to the Offer and the Manager to the Offer to send by Registered Post or Courier as may be applicable at my/our risk, the demand draft/cheque, in full and final settlement of the amount due to me/us and/or other documents or papers or correspondence to the sole/first holder at the address mentioned below. In case

I/we have tendered my shares in dematerialised form, I/we authorize the Acquirer and the Registrar to the Offer and the Manager to the Offer to use my/our details regarding my/our address and bank account details as obtained from my/our depository participant for the purpose of mailing the aforementioned instruments.

I/We authorize the Acquirer to accept the shares so offered or such lesser number of shares that it may decide to accept in terms of the Letter of Offer and I/we authorize the Acquirer to split / consolidate the share certificates comprising the shares that are not acquired to be returned to me/us and for the aforesaid purposes the Acquirer is hereby authorized to do all such things and execute such documents as may be found necessary and expedient for the purpose.

Yours faithfully,

Signed and Delivered

	Full Name(s) of the shareholders	Signature
First/Sole Holder
Joint Holder 1
Joint Holder 2
Joint Holder 3

Address of First/Sole Shareholder ______________________________________________________________

Place: _________________

Date: _________________

Bank Details

So as to avoid fraudulent encashment in transit, the shareholder(s) holding shares in physical form should provide details of bank account of the first/sole shareholder and the consideration cheque or demand draft will be drawn accordingly. For shares that are tendered in electronic form, the Bank account as obtained from the beneficiary position download to be provided by the depositories will be considered and the cheque / demand draft will be issued with the said Bank particulars.

Name of the Bank

Branch

Account Number

Savings/Current/(Others: please specify)

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ ____ __ __ ____ __ __ ____ __ __ ____ __

The Form of Acceptance cum Acknowledgement along with all the relevant documents should be submitted at the collection centre below:-

Address of collection centre

Contact Person

Telephone Number

Fax Number

Mode of

Delivery

RCMC Share Registry Pvt. Ltd.

B-106, Sector-2, Noida-201301

Mr. Rakesh Adhana

0120-4015880

0120-2444346

Hand Delivery / Registered Post

Collection Timings for the location mentioned above will be 10.00 a.m. to 1.00 p.m. & 2.00 p.m. to 5.00 p.m. from Monday to Friday and 10.00 a.m. to 1.00 p.m. on Saturday.

PLEASE NOTE THAT NO SHARES / FORMS SHOULD BE SENT DIRECTLY TO THE ACQUIRER OR TO THE TARGET COMPANY OR TO THE MANAGER TO THE OFFER

(1) The Form of Acceptance should be filled-up in English only.

(2) Signature other than in English, Hindi and thumb expressions must be attested by a Notary Public under his Official Seal.

(3) All queries pertaining to this Offer may be directed to the Registrar to the Offer.

(4) Shareholders holding registered shares should submit the Form duly completed and signed in accordance by the holders of the shares, along withthe original equity share certificate(s) and valid equity share transfer form(s) duly signed as per the specimen signatures lodged with the Target Company and duly witnessed at the appropriate place. Please do not fill in any other details in the transfer deed.

(5) Shareholders holding shares in dematerialised form should submit the Form duly completed and signed in accordance with the instructions contained therein by all the beneficial holders of the shares, as per the records of the Depository Participant (“DP”).

(6) In case of shares held in joint names, names should be filled up in the same order in the Form and in the transfer deed(s) as the order in which they hold shares in the Target Company, and should be duly witnessed. This order cannot be changed or altered nor can any new name be added for the purpose of accepting the Offer.

(7) In case where the signature is subscribed by thumb impression, the same shall be verified and attested by a Magistrate, Notary Public or Special Executive Magistrate or a similar authority holding a Public Office and authorized to use the seal of his office.

(8) Persons who own shares (as on the Specified Date or otherwise) but are not the registered holders of such shares and who desire to accept the Offer, will have to communicate their acceptance in writing to the Registrar to the Offer together with the original contract note issued by the broker, the share certificate(s), the transfer deed(s) with the buyers’ details not filled in and other relevant documents. In case the share certificate(s) and transfer deed(s) are lodged with the Target Company/its transfer agents for transfer, then the Form shall be accompanied by the acknowledgment of lodgement with, or receipt by, the Target Company/its transfer agents, of the share certificate(s) and transfer deed(s). Persons under this clause should submit their acceptance and necessary documents by registered post or courier or in person to the Registrar to the Offer at their office as mentioned above.

The sole/first holder may also mention particulars relating to savings / current account number and the name of the bank and branch with whom such account is held in the respective spaces allotted in the Form, to enable the Registrar to the Offer to print the said details in the cheques after the name of the payee.

(9) Non-resident Shareholders should enclose copy (ies) of permission received from Reserve Bank of India to acquire shares held by them in the Target Company.

(10) Non-resident shareholders are advised to refer to the clause on taxation in Clause 10.19 of the Letter of Offer regarding important disclosures relating to taxation of the consideration to be received by them.

(11) In case of bodies corporate, certified copies of appropriate authorization (including Board/shareholder resolutions, as applicable) authorizing the sale of shares along with specimen signatures duly attested by a bank must be annexed. The stamp of the Company should also be affixed.

(12) All the Shareholders should provide all relevant documents which are necessary to ensure transferability of the shares in respect of which the acceptance is being sent. Such documents may include (but not be limited to):

(a) Duly attested death certificate and succession certificate in case the original shareholder has expired.

(b) Duly attested power of attorney, if any person apart from the shareholder has signed acceptance form or transfer deed(s).

(c) No objection certificate from any lender, if the shares in respect of which the acceptance is sent, were under any charge, lien or encumbrance.

FORM OF WITHDRAWAL

(All terms and conditions used herein shall have the same meaning as ascribed thereto in the Letter of Offer)

DCM Shriram Industries Limited - Open Offer

OFFER OPENS ON:

23^rd May, 2008 (Friday)

LAST DATE OF WITHDRAWAL:

6^th June, 2008 (Friday)

OFFER CLOSES ON:

11^th June, 2008 (Wednesday)

From

FOR OFFICE USE ONLY

Withdrawal Number

Number of equity shares offered

Number of equity shares withdrawn

Tel.: Fax: E-mail:

RCMC Share Registry Private Limited

B-106, Sector-2,

Noida-201301

Dear Sir,

SHARES HELD IN PHYSICAL FORM

I/We hereby consent unconditionally and irrevocably to withdraw my/our shares from the Offer and I/we further authorize the Acquirer to return to me/us, the tendered Share Certificate(s)/Share(s) at my/our sole risk.

I/We note that upon withdrawal of my/our shares from the Offer, no claim or liability shall lie against the Acquirer / Manager to the Offer / Registrar to the Offer.

I/We note that this Form of Withdrawal should reach the Registrar to the Offer on or before the last date of withdrawal i.e. 6^th June, 2008.

I/We note that the Acquirer / Manager to the Offer / Registrar to the Offer shall not be liable for any postal delay/loss in transit of the shares held in physical form and also for the non-receipt of shares held in dematerialised form in the DP account due to inaccurate/incomplete particulars/instructions.

I/We also note and understand that the Acquirer will return the original share certificate(s), share transfer deed(s) / shares in dematerialised form only on completion of verification of the documents, signatures and beneficiary position as available with the depositories from time to time.

The particulars of tendered original share certificate(s) and duly signed transfer deed(s) are detailed below:

(Please enclose the Xerox copy of Acknowledgement received for ‘Form of Acceptance’).

Sr. No.	Ledger Folio No(s).	Certificate No(s).	Distinctive No(s).		No. of Shares
Sr. No.	Ledger Folio No(s).	Certificate No(s).	From	To	No. of Shares
1
2
3
4
5
Total No. of Equity Shares

(In case the space provided is inadequate, please attach a separate sheet with details)

_____________________________________________________________________________________________________________________________

SHARES HELD IN DEMATERIALSED FORM

I/We hold the following shares in dematerialised form and had executed an off-market transaction for crediting the shares to the special depository account in NSDL styled “RCMC A/c DSIL-Open Offer Escrow A/c” (“Depository Escrow Account”) as per the details given below. Also find enclosed a photocopy of the depository delivery instruction(s) duly acknowledged by DP.

Depository	National Securities Depository Limited
Account Name	RCMC A/c DSIL-Open Offer Escrow A/c
Depository Participant	Pee Aar Securities Ltd.
DPID	IN301428
Client ID	10056828

The particulars of the account from which my/our shares have been tendered are as follows:

DP Name	DP ID	Client ID	Beneficiary Name	No. of Shares

I/We note that the shares will be credited back only to that depository account from which the shares have been tendered and necessary standing instructions have been issued in this regard.

I/We confirm that the particulars given above are true and correct.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ Tear Here____ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __

DCM Shriram Industries Limited - Open Offer Acknowledgement Slip

Received from Mr. /Ms. /Mrs. _________________ residing at _____________________________________________________________________ a Form of Withdrawal for _____________________ shares along with:

copy of depository instruction slip from DP ID ___________ Client ID _____________

Copy of acknowledgement slip issued when depositing dematerialised shares

Copy of acknowledgement slip issued when depositing physical shares for withdrawing from the Offer made by the Acquirer.

Stamp of Collection Centre:

Signature of Official:

Date of Receipt:

In case of dematerialised shares, I/we confirm that the signatures have been verified by the DP as per their records and the same have been duly attested.

Yours faithfully,

Signed and Delivered

	Full Name(s) of the shareholders	Signature
First/Sole Holder
Joint Holder 1
Joint Holder 2
Joint Holder 3

Address of First/Sole Shareholder _______________________________________________________________

Place: _________________

Date: _________________

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ ____ __ __ ____ __ __ ____ __ __ ____ __ __

The Form of Withdrawal along with all the relevant documents should be submitted at the collection centre below:-

Address of collection centre

Contact Person

Telephone Number

Fax Number

Mode of

Delivery

RCMC Share Registry Pvt. Ltd.

B-106, Sector-2, Noida-201301

Mr. Rakesh Adhana

0120-4015880

0120-2444346

Hand Delivery / Registered Post

Collection Timings for the location mentioned above will be 10.00 a.m. to 1.00 p.m. & 2.00 p.m. to 5.00 p.m. from Monday to Friday and 10.00 a.m. to 1.00 p.m. on Saturday.

PLEASE NOTE THAT NO WITHDRAWAL FORMS SHOULD BE SENT DIRECTLY TO THE ACQUIRER OR TO THE TARGET COMPANY OR TO THE MANAGER TO THE OFFER

(1) All queries pertaining to this Offer may be directed to the Registrar to the Offer.

(2) Shareholders should enclose the following:

a. For Equity Shares held in physical form:

Beneficial owners should enclose:

i. Duly signed and completed Form of Withdrawal

ii. Copy of Form of Acceptance cum Acknowledgement / Plain paper application submitted and the Acknowledgement slip

iii. In case of partial withdrawal, Valid Shares Transfer form(s) duly signed as transferors by all registered shareholders (in case of joint holdings) in the same order and as per specimen signatures registered with the Target Company and duly witnessed at the appropriate place.

b. For Equity Shares held in demat form :

Registered shareholders should enclose:

i. Duly signed and completed Form of Withdrawal

ii. Copy of Form of Acceptance cum Acknowledgement / Plain paper application submitted and the Acknowledgement slip

iii. Photocopy of the delivery instruction in “Off-market” mode or counterfoil of the delivery instruction in “Off-market” mode, duly acknowledged by the DP

Unregistered shareholders should enclose:

i. Duly signed and completed Form of Withdrawal

ii. Copy of Form of Acceptance cum Acknowledgement / Plain paper application submitted and the Acknowledgement slip

(3) The withdrawal of shares will be available only for the share certificates / shares that have been received by the Registrar to the Offer / Depository Escrow Account.

(4) The intimation of returned shares to the shareholders will be at the address as per the records of the Target Company / Depository, as the case may be.

(5) Shareholders holding shares in dematerialised form are requested to issue the necessary standing instructions for receipt of the credit in their DP Account.

Annexure I

(To be submitted by outside agency while submitting the softcopy to SEBI)

CHECKLIST FOR THE SUBMISSION OF SOFTCOPY OF INFORMATION TO BE PUBLISHED ON SEBI WEBSITE

1. Soft copy submitted by: Mefcom Capital Markets Limited

2. Content Title: Final Letter of Offer for the shareholders of DCM Shriram Industries Limited

3. Whether the Documents are in HTML format? Yes

4. Whether the tabular data in the HTML format are in order? Yes

5. Whether the Sr. Numbers of paragraph / points are in order and matches with the printed copy? Yes

6. Whether the alignments of all paragraphs are in order? Yes

7. Whether all relevant image files, if any, are available in the floppy? Yes

8. Whether the contents of the HTML format and Hard copy of the document have been compared and found to be in order? Yes

9. Whether the letter of confirmation for the point no. 8 has been enclosed? Yes

10. Whether the spacing between lines and paragraphs is uniform? Yes

11. Remarks, if any:

Prepared by: Ms. Nikita Sharma Verified by: Ms. Pooja Mahna

Date: May 17, 2008

_____________________________________________________________________________________________________________________

(For office use only)

FOR THE USE OF DIVISION/DEPARTMENT CONCERNED

Date of receipt of floppy: RNI No.: ____________

Whether the contents of floppy are prima facie in order: Yes/No

Secretary Officer Division Chief

Date:

FOR THE USE OF INFORMATION SYSTEMS DIVISION

Date of receipt of floppy:

Whether the contents of floppy are prima facie in order: Yes/No

Date on which the document is displayed on the SEBI website:

Secretary Officer Division Chief

_________________________________________________________________________________________________________________

FOR THE USE OF DEPARTMENT/DIVISION CONCERNED AND ISD

The contents on the net were verified and found to be prima facie in order.

ISD Department / Division

_________________________________________________________________________________________________________________